C215 Operations Management Study Guide Total Quality Management & SQC | Accurate & Verified
Answers to Pass Actual Exam
LC215 – Operations Management Study Guide
Chapter 5: Total Quality Management - Topics to know
✓ Five definitions of Quality
1. Conformance to specifications
How well a product / service meets targets and tolerances defined by its designers
2. Fitness for use
Evaluates performance for intended use
3. Value for price paid
Evaluation of usefulness vs price paid
4. Support services
Quality of support provided after the product/service is purchased
5. Psychological criteria
Judgmental evaluation of what constitutes product/service quality
✓ Differences between Manufacturing and Servicing Organizations
Manufacturing focuses on tangible product features (can be seen, touched, directly managed)
Conformance
Performance
Reliability
Features
Durability
Serviceability
Service produces intangible products that must be experienced (cannot be seen or touched)
Intangible factors
Consistency
Responsiveness
Courtesy, friendliness
Promptness, timeliness
atmosphere
✓ Four Costs of Quality (See Figure 5:1)
Quality Control Costs (to achieve high quality)
1. Prevention costs – costs of preparing and implementing a quality plan
2. Appraisal costs – cost of testing, evaluating, and inspecting quality
Quality failure costs (high costs associated with poor quality)
3. Internal failure costs – costs of scrap, rework, and material losses
4. External failure costs – costs of failure at customer site, including returns, repairs and recalls
✓ Quality Gurus and their Contributions to TQM (See Table 5:2)
,Walter A. Shewhart
• Contributed to understanding of process variability.
• Developed concept of statistical control charts.
W. Edwards Deming
• Stressed management’s responsibility for quality.
• Developed “14 Points” to guide companies in quality improvement.
Joseph M. Juran
• Defined quality as “fitness for use.”
• Developed concept of cost of quality.
Armand V. Feigenbaum
• Introduced concept of total quality control.
Philip B. Crosby
• Coined phrase “quality is free.”
• Introduced concept of zero defects.
Kaoru Ishikawa
• Developed cause-and-effect diagrams.
• Identified concept of “internal customer.”
Genichi Taguchi
• Focused on product design quality.
• Developed Taguchi loss function.
Dr Taguchi view of quality
o As conformance values move away from the target, loss increases as a quadratic
function
✓ The Philosophy of TQM (See Table 5:3)
, Focus on customer
o Identify and meet customer needs
o Quality is customer driven
o Stay tuned to changing needs (fashion styles etc)
Continuous improvement
o Plan-do-study-act (PDSA) cycle
Plan
Evaluate current process
Documents current procedures, collect data, identify problems
Develop an improvement plan, performance objectives
Do
Implement the plan
Study
Collect data and evaluate against objectives
Act
Communicate the results from the trial
If successful, implement new process
*****After act phase, start planning and repeat process*****
o Benchmarking – study how others do things
Employee empowerment
o Empower all employees
o External verses internal customers
o Team approach
Teams formed around processes
Quality circles (8-10 people)
Meet weekly to analyze and solve problems
Use of quality tools
o Ongoing training on analysis, assessment and correction as well as the use of
implementation tools
o 7 tools of quality control
Cause-and-effect diagrams
, Often called fishbone diagram
Focused on identifying potential causes of quality problems
Used by quality control teams; brainstorming
Used when trying to find potential causes for quality problems
Flowcharts
Schematic diagrams used to document the details steps in a
process
Use when - How does process go from start to finish, evaluate
how much time something is taking, or able to combine steps
Checklists
Simple data check-off sheets
Designed to identify type of quality problems at each work
station; per shift, per machine, per operator
Control charts
The UCL and LCL are calculated limits used to show when a
process is in or out of control; eg weight, width, volume
Key tools used in statistical process control
Used to make sure we are within specifications
Scatter diagrams
Graphs that show how two variables are related to one another
Pareto analysis
Used to identify quality problems based on their degree of
importance
Named after a nineteenth-century Italian economist; often calls
the 80-20 rule
o Principle is that quality problems are the result of only a
few causes; 80% of problems are caused by 20% of
causes
Histograms
a chart that shows the frequency distribution of observed
values of a variable (eg service time at a bank drive up window)
displays whether the distribution is symmetrical (normal) or
skewed
service time at a drive up window
Answers to Pass Actual Exam
LC215 – Operations Management Study Guide
Chapter 5: Total Quality Management - Topics to know
✓ Five definitions of Quality
1. Conformance to specifications
How well a product / service meets targets and tolerances defined by its designers
2. Fitness for use
Evaluates performance for intended use
3. Value for price paid
Evaluation of usefulness vs price paid
4. Support services
Quality of support provided after the product/service is purchased
5. Psychological criteria
Judgmental evaluation of what constitutes product/service quality
✓ Differences between Manufacturing and Servicing Organizations
Manufacturing focuses on tangible product features (can be seen, touched, directly managed)
Conformance
Performance
Reliability
Features
Durability
Serviceability
Service produces intangible products that must be experienced (cannot be seen or touched)
Intangible factors
Consistency
Responsiveness
Courtesy, friendliness
Promptness, timeliness
atmosphere
✓ Four Costs of Quality (See Figure 5:1)
Quality Control Costs (to achieve high quality)
1. Prevention costs – costs of preparing and implementing a quality plan
2. Appraisal costs – cost of testing, evaluating, and inspecting quality
Quality failure costs (high costs associated with poor quality)
3. Internal failure costs – costs of scrap, rework, and material losses
4. External failure costs – costs of failure at customer site, including returns, repairs and recalls
✓ Quality Gurus and their Contributions to TQM (See Table 5:2)
,Walter A. Shewhart
• Contributed to understanding of process variability.
• Developed concept of statistical control charts.
W. Edwards Deming
• Stressed management’s responsibility for quality.
• Developed “14 Points” to guide companies in quality improvement.
Joseph M. Juran
• Defined quality as “fitness for use.”
• Developed concept of cost of quality.
Armand V. Feigenbaum
• Introduced concept of total quality control.
Philip B. Crosby
• Coined phrase “quality is free.”
• Introduced concept of zero defects.
Kaoru Ishikawa
• Developed cause-and-effect diagrams.
• Identified concept of “internal customer.”
Genichi Taguchi
• Focused on product design quality.
• Developed Taguchi loss function.
Dr Taguchi view of quality
o As conformance values move away from the target, loss increases as a quadratic
function
✓ The Philosophy of TQM (See Table 5:3)
, Focus on customer
o Identify and meet customer needs
o Quality is customer driven
o Stay tuned to changing needs (fashion styles etc)
Continuous improvement
o Plan-do-study-act (PDSA) cycle
Plan
Evaluate current process
Documents current procedures, collect data, identify problems
Develop an improvement plan, performance objectives
Do
Implement the plan
Study
Collect data and evaluate against objectives
Act
Communicate the results from the trial
If successful, implement new process
*****After act phase, start planning and repeat process*****
o Benchmarking – study how others do things
Employee empowerment
o Empower all employees
o External verses internal customers
o Team approach
Teams formed around processes
Quality circles (8-10 people)
Meet weekly to analyze and solve problems
Use of quality tools
o Ongoing training on analysis, assessment and correction as well as the use of
implementation tools
o 7 tools of quality control
Cause-and-effect diagrams
, Often called fishbone diagram
Focused on identifying potential causes of quality problems
Used by quality control teams; brainstorming
Used when trying to find potential causes for quality problems
Flowcharts
Schematic diagrams used to document the details steps in a
process
Use when - How does process go from start to finish, evaluate
how much time something is taking, or able to combine steps
Checklists
Simple data check-off sheets
Designed to identify type of quality problems at each work
station; per shift, per machine, per operator
Control charts
The UCL and LCL are calculated limits used to show when a
process is in or out of control; eg weight, width, volume
Key tools used in statistical process control
Used to make sure we are within specifications
Scatter diagrams
Graphs that show how two variables are related to one another
Pareto analysis
Used to identify quality problems based on their degree of
importance
Named after a nineteenth-century Italian economist; often calls
the 80-20 rule
o Principle is that quality problems are the result of only a
few causes; 80% of problems are caused by 20% of
causes
Histograms
a chart that shows the frequency distribution of observed
values of a variable (eg service time at a bank drive up window)
displays whether the distribution is symmetrical (normal) or
skewed
service time at a drive up window
