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TQM: Total Quality Management is an integrated organizational effort designed to improve quality at every level.Customer Defined Quality TQM is about meeting quality expectations as defined by the customer. Conformance to specification measures how well the product or service meets the targets and tolerances determinedby its designers. Example of Conformance to specification The wait for hotel room service may be specified as 20 minutes, but there may be anacceptable delay of an additional 10 minutes. Also, consider the amount of light delivered by a 60-watt light bulb. If the bulb delivers50 watts, it does not conform to specifications. Fitness for use focuses on how well the product performs its intended function or use.Example of Fitness for use For example, a Mercedes-Benz and a Jeep Cherokee both meet a fitness for use definition if one considers transportation as the intended function. However, if the definition becomes more specific and assumes that the intended use is for transportation on mountain roads and carrying fishing gear, the Jeep Cherokee has a greater fitness for use. You can also see that fitness for use is a user-based definition inthat it is intended to meet the needs of a specific user group. Value for a price paid is a definition of quality that consumers often use for product or service usefulness. Thisis the only definition that combines economics with consumer criteria; it assumes that the definition of quality is price sensitive. Examples of Value for a price paid For example, suppose that you wish to sign up for a personal finance seminar and discover that the same class is being taught at two different colleges at significantly different tuition rates. If you take the less expensive seminar, you will feel that you havereceived greater value for the price. Support Services provided are often how the quality of a product or service is judged. Quality does not apply only to the product or service itself; it also applies to the people, processes, andorganizational environment associated with it. Example of Support Services For example, the quality of a university is judged not only by the quality of staff andcourse offerings but also by the efficiency and accuracy of processing paperwork. Psychological Criteria is a subjective definition that focuses on the judgmental evaluation of what constitutesproduct or service quality. Different factors contribute to the evaluation, such as the atmosphere of the environment or the perceived prestige of the product. Examples of Psychological Criteria For example, a hospital patient may receive average healthcare, but a very friendly staffmay leave the impression of high quality. Similarly, we commonly associate certain products with excellence because of their reputation; Rolex watches and Mercedes- Benz automobiles are examples. Manufacturing Organizations Manufacturing organizations produce a tangible product that can be seen, touched, anddirectly measured. Examples include cars, CD players, clothes, computers, and food items. Quality in manufacturing organizations quality definitions in manufacturing usually focus on tangible product features. Common quality definition in manufacturing 1. Conformance: the degree to which a product characteristic meets preset standards. 2. Performance: such as acceleration of a vehicle 3. Reliability: meaning that the product will function as expected without failure 4. Features: the extras that are included beyond the basic characteristics 5. Durability: the expected operational life of the product 6. Serviceability: how readily a product can be repaired Service Organizations service organizations produce a product that is intangible. Usually, the complete productcannot be seen or touched. Rather, it is experienced. The intangible nature of the product makes defining quality difficult. Examples of Service Organizations delivery of healthcare, the experience of staying at a vacation resort, and learning at auniversity. Quality of Service is defined by perceptual factors 1. Responsiveness to customers needs/ 2. Courtesy and friendliness of staff. 3. Promptness in resolving complains. 4. Atmosphere 5. Time: the amount of time a customer has to wait for the service. 6. Consistency: the degree to which service is the same each time.Quality Control Costs Cost necessary for achieving high quality. Two types of Quality Control Costs 1. Prevention costs. 2. Appraisal costs. Prevention Costs are all costs incurred in the process of preventing poor quality from occurring. Costsincludes the following. 1. quality planning costs, such as the costs of developing and implementing a qualityplan. 2. cost of product and process design. 3. Employee training in quality measurement. 4. Cost of maintaining records of information and data related to quality. Appraisal Costs incurred in the process of uncovering defects. They include the following; 1. Cost of quality inspections. 2. Product testing. 3. performing audits to make sure that quality standards are being met. 4. costs of worker time spent measuring quality 5. cost of equipment used for quality appraisal. Quality Failure Costs Cost consequences of poor quality. Two types of Quality Failure Costs 1. External Failure Costs 2. Internal Failure Costs Internal Failure Costs are associated with discovering poor product quality before the product reaches thecustomer site. 1. rework: the cost of correcting the defective item. 2. Scrap: when item is so defective that it cannot be fixed and must be thrown away. Scrap cost includes all the material, labor, and machine cost spent in producing the defective product. 3. cost of machine downtime due to failures in the process and the costs of discountingdefective items for salvage value. External Failure Costs are associated with quality problems that occur at the customer site. These costs canbe particularly damaging because customer faith and loyalty can be difficult to regain. 1. Customer complaints 2. Product returns 3. repairs to warranty claims 4. recalls 5. litigation costs resulting from product liability issues 6. lost sales and lost customers Example of External Failure Costs manufacturers of lunch meats and hot dogs whose products have been recalled due to bacterial contamination have had to struggle to regain consumer confidence. Other examples include auto manufacturers whose products have been recalled due to majormalfunctions such as problematic braking systems and airlines that have experienced acrash with many fatalities. External failure can sometimes put a company out of business almost overnight. External Failure Costs are particularly high where? External failure costs tend to be particularly high for service organizations. The reasonis that with a service the customer spends much time in the service delivery system, and there are fewer opportunities to correct defects than there are in manufacturing. Examples of external failure in services include overbooking airline flights, long delaysin airline service, and lost luggage. Walter A. Shewhart "Grandfather of quality control" -developed quality control charts that are used to identify whether the variability in theprocess is random or due to an assignable cause, such as poor workers or miscalibrated machinery. W. Edwards Deming "father of quality control" -Deming prize: an annual award given to firms that demonstrate outstanding quality. -"14 points": upper management must develop a commitment to quality and provide asystem to support this commitment that involves all employees and suppliers. Joseph M. Juran -considered to have had the greatest impact on quality management. -defines quality as fitness for use which takes in to account customer intentions for useof the product instead of focusing on technical specifications. -developed the concept of cost of quality which allows measuring quality in dollar termsrather than on the basis of subjective evaluations. -originated the quality trilogy. Quality Trilogy 1. quality planning 2. quality control 3. quality improvement. Quality planning companies identify their customers, product requirements, and overriding businessgoals. Process set up so quality standards can be met. Quality control stresses the regular use of statistical control methods to ensure that quality standardsare met and to identify variation from the standards. Quality improvement quality improvement should not be just breakthroughs, but continuous as well. Armand V. Feigenbaum -introduced the concept of quality control. -promoted idea that quality developments are integrated throughout the entireorganization/ -managers & employees have a total commitment to improve quality and people canlearn from each other's success. -adapted by the Japanese and called "company-wide quality control.Philip B. Crosby -developed phrase "Do it right the first time" and the notion of zero defects, assumingthat no amounts of defects should be considered acceptable. -coined the phrase "quality is free" and for pointing out the many costs of quality. -stressed role of management in the quality improvement effort and the use of statisticalcontrol tools in measuring and monitoring quality. Kaoru Ishikawa -development of quality tools called cause-and-effect diagrams aka fishbone or Ishikawa diagrams. -diagrams are used for quality problem solving. -first quality guru to emphasize the importance of the "internal customer" and total company quality control. - a proponent of implementation of quality circles. Quality circle employees who volunteer to solve quality problems. They solve quality problem througha preset of a process for analyzing and solving quality problems. -Team approach Genichi Taguchi -product design -about 80% of all defective items are caused by poor product design. -stresses effort on design stage. -apply a concept called design of experiment to product design based on robust design. -Taguchi loss function. Robust design a design that results in products that can perform over a wide range of conditions. It iseasier to design a product that can perform over a wide range of environmental conditions that it is to control the environment conditions. Taguchi Loss Function as conformance values move away from the target, loss increases as a quadraticfunction. -smaller differences from target result in smaller cost. -larger differences from target result in larger cost. TQM Philosophy 1. Customer focus 2. Continuous improvement 3. Employee empowerment 4. use of quality tools 5. product design 6. process management 7. managing supplier quality Customer focus goal is to identify and meet customer needs. Quality is customer driven. Companiescontinue to gather information via focus groups, market surveys, and customer interviews to know what they want. Continuous improvement a philosophy of never-ending improvement. Japanese believe lasting changes comefrom gradual improvements. Kaizen: called by the Japanese requires that the company continually strive to be betterthrough learning and problem solving. Employee empowerment employee are expected to seek out, identify, and correct quality problems. They are rewarded for uncovering quality problems not punished. They're given training in qualitymeasurement tools. To further stress their role, TQM differentiates between internal andexternal customers. Use of quality tools ongoing employee training in the use of quality tools. Product design products need to be designed to meet customer expectations. Process management quality should be built into the process; sources of quality problems should be identifiedand corrected. Managing supplier quality quality concepts must extend to a company's suppliers. Kaizen requires that company continually strive to be better through learning and problemsolving. Plan-Do-Study-Act Cycle (PSDA) Cycle aka Shewhart cycle or the Deming wheel. describes the activity a company needs to perform in order to incorporate continuousimprovement in its operation. -circular nature of the cycle demonstrates that improvement is a never-ending process.PSDA Cycle steps 1. plan: managers must evaluate the current process and make plans based on anyproblems they find. Document procedures, collect data, and identify problems. 2. Do: during the implementation process, managers should document all changesmade and collect data for evaluation. 3. Study: study the data collected and see whether the plan is achieving the goals established in the plan phase. 4. Act: act on the basis of the results of the first three phrases by communicating the result to other members of the company and then implement the new procedure if it hasbeen successful. Benchmarking studying business practices of companies considered "best in class." Internal Customers are employees of the organization who receive goods or services from others in thecompany. In order words, if a defective item cannot be pasted on to an external customer, it shouldn't to an internal. External Customers are those that purchase the company's goods and services.Seven Tools of Quality Control 1. Cause-and-Effect Diagram 2. Flowchart 3. Checklist 4. Control Chart 5. Scatter Diagram 6. Pareto Chart 7. Histogram Cause-and-Effect Diagram aka fishbone diagram Identify potential causes of particular quality problems. Flowcharts a schematic diagram of sequence of steps involved in an operation or process. A visualtool that helps develop a clear picture of how operation works and possible problem locations. Checklists a list of common defected the # of observed occurences. Collect specific informationregarding defects observed. Control Charts very important quality control tool. Used to evaluate whether a process is operatingwithin expectations relative to measured value. When it is, it's "in control." -UCL: upper control limit -LCL: lower control limit within these two lines, okay. outside, not ok. Scatter Diagrams shows how two variables are related to one another. Correlations could be positive ornegative. Example: increased production speed & number of defects could correlate positively. -greater the correlation, the more linear and less, the more scatter. -Inverted U: observing relationship between two variables. Pareto Analysis technique used to identify problem based on their degree of importance. The 80-20 rule in respect that most quality problems are a result of only a few causes and the trick is toidentify the causes. -ranks causes of poor quality in decreasing order based on the percentage of defectseach has caused. Histograms a chart that shows frequency distribution of observed values of a variable. If distributionis normal or symmetrical. Example, Kroger must record and monitor product quality of incoming produce. Qualitytools are used to evaluate the acceptability of product quality and to monitor product quality from individual suppliers. Quality Function Deployment (QFD) a useful tool in translating the voice of the customer into specific technical requirements.Useful in enhancing communication between different functions, such as marketing, operations, and engineering. -house of quality: goals set to address identified problems.QFD List 1. Customer requirements 2. competitive evaluations 3. product characteristics 4. relationship matrix 5. the trade-off matrix 6. setting targets ISO 14000 a set of international standards and a certification focusing on a company'senvironmental responsibility Descriptive statistics Can be helpful in describing certain characteristics of a product and a process.Most important descriptive statistics are... 1. central tendency (mean) 2. measures of variability (standard deviation) 3. measures of distribution of data Mean (average) is a statistic that measures the central tendency of a set of data. -calculated by the sum of all observation and divide by the total number of observation. Example of Mean average soft drink bottle is filled with 16 ounces of liquid. 16 is the mean. Range and standard deviation information provides us with the amount of variability of the data. It tells us how spreadout the data are around the mean. Just-in-time (JIT) philosophy Getting the right quantity of goods at the right place at the right time. The goods arrivejust in time. Waste Anything that does not add value.a broad view of JIT A philosophy that encompasses the entire organization. everyone should have a broad view of the organization and work towards the same goaland that is serving the customers. Central belief of JIT Elimination of waste broad view of operations simplicity continuous improvement visibility flexibility Types of wastematerial energy time space Simplicity provide a simpler solution. JIT encourages staff to think about the problem and come up with a simple solution. Continuous Improvement aka Kaizen never-ending improvement always continue to improve since you will never be perfect.Kaizen Blitz This process allows a small group of people to concentrate on a bite-size chunk of theproblem for a short period of time and deliver improvement. Visiblilty Problems must be visible to be identified and solved.JIT facilities are open and clean. Visibility allows us to readily see waste. We can then eliminate it. Flexibility (ways) 1. A company can quickly adapt to the changing needs of its customers. 2. being able to produce a wide variety of products.JIT system 1. just-in-time manufacturing 2. total quality management 3. respect for people Just-in-time manufacturing focuses directly on the production system to make this possible Manufacturing process in JIT starts with the final assembly schedule, often called the master production schedulemaster production schedule a statement of which products and quantities will be made in specific time periods -usually fixed for few months ahead. Kanban to pull the needed products through the production system. For this reason, JIT is oftenreferred to as a pull system. The kanban specifies what is needed. setup cost Cost incurred when setting up equipment for a production table quality level (AQL) Traditional quality control systems . indicate the acceptable number of defective parts Quality at the source objective is not only to identify a quality problem but to uncover its root cause respect for people An element of JIT that considers human resources as an essential part of the JITphilosophy. Pull system JIT is based on a "pull" system rather than a "push" system. Kanban card "signal" or "card" in Japanese a kanban card has such information on it as the product name, the part number, and thequantity that needs to be produced. The kanban is attached to a container. Production card A kanban card that authorizes production of material. Withdrawal card A kanban card that authorizes withdrawal of material. Signal Kanban flag that is used to indicate it is time to produce the next container of used when inventory between workstations is necessary. Supplier Kanbans The suppliers bring the filled containers to the point of usage in the factory and at thesame time pick up an empty container with a kanban to be filled later. small lot-production he amount of products produced at any one time is small—say, 10 versus 1000. Economic setup of JIT 1. internal setups 2. external setups internal setups require the machine to be stopped for the setup to be performedexternal setups can be performed while the machine is still running. Almost all setups in traditional manufacturing systems are internal. Uniform plant loading to eliminate the problem by making adjustments as small as possible and setting aproduction plan that is frozen for the month. A constant production plan for a facility with a given planning horizon.Flexible resources 1. relying on general-purpose equipment capable of performing a number of different functions. 2. multifunction workers who can perform more than one job—an essential aspect ofJIT. multifunction workers Capable of performing more than one job. Facility layout Proper arrangement and layout of work centers and equipment is critical. Physical proximity and easy access contribute to the efficiency of the productionprocess. Streamlined production is an important part of JIT; it relies heavily on assembly lines, dedicated to theproduction of a family of products. Cell manufacturing Placement of dissimilar machines and equipment together to produce a family ofproducts with similar processing requirements. Quality (today) meeting or exceeding customer expectations. strategies for quality improvement Step 1. Define quality as seen by the customer. Step 2: Translate customer needs into measurable terms.Step 3: Measure quality on an ongoing basis. Step 4: Set improvement targets and deadlines. Step 5: Develop a systematic method for improvement. Quality problems from sources 1. Product design. In the design process, customer needs may be misunderstood andnot incorporated into the product design. 2. Process design. Management and equipment problems may stem from the design ofthe production process. Operator error actually contributes to only about 15 percent of quality problems. 3. Suppliers. Quality problems caused by suppliers include low-quality materials and areoften due to misunderstandings between manufacturer and supplier. Jidoka Authority given to workers to stop the production line if a quality problem is detected. Undercapacity scheduling to leave ample time for problem-solving activities. JIT systems usually operate with seven hours of production and one hour of problemsolving and working with teams. poka-yoke Foolproof devices or mechanisms that prevent defects from ntive maintenance regular inspections and maintenance designed to keep machines operational. Workers perform routine preventive maintenance perform routine preventive maintenance activities, including cleaning, lubricating, recalibrating, and making other adjustments to equipment. These duties are viewed aspart of the worker's job work environment Keeping the facility clean is the workers' responsibility. Every worker is responsible forcleaning equipment and tools after using them and putting them back in their place. cross functional worker skills the ability of workers to perform many different tasks on many different machines. Bottom-round management consensus management by committees or teams. When a decision needs to be made,it is discussed at all levels, starting at the bottom, so that everyone in the company contributes to the decision. Role of production employees in JIT 1. Workers have cross-functional skills. 2. Workers are actively engaged in solving production and quality problems. 3. Workers are empowered to make production and quality decisions. 4. Quality is everyone's responsibility. 5. Workers are responsible for recording and visually displaying performance data. 6. Workers work in teams to solve problems. 7. Decisions are made through bottom-round management. 8. Workers are responsible for preventive of management in JIT 1. Be responsible for creating a JIT culture. 2. Serve as coaches and facilitators, not "bosses". 3. Develop an incentive system that rewards workers for their efforts. 4. Develop employee skills necessary to function in a JIT environment. 5. Ensure that workers receive multifunctional training. 6. Facilitate teamwork. single source suppliers Suppliers that supply an entire family of parts for one manufacturer. Benefits of JIT 1. reduction in inventory 2. Improved quality 3. Reduced space requirements 4. Shorter lead times 5. Lower production costs 6. Increased productivity 7. Increased machine utilization 8. Greater flexibility JIT Implementation process 1. Make quality improvements. 2. Reorganize workplace. 3. Reduce setup times. 4. Reduce lot sizes and lead times. 5. Implement layout changes. 6. Switch to pull production. 7. Develop relationship with suppliers. Make quality improvements. Usually it is best to start the implementation process by improving quality. The reason isthat quality is pervasive and all the JIT objectives are dependent on quality improvement. Reorganize workplace Reorganizing the workplace is the next step. This means proper facility layout, cleaningand organizing the work environment, designating storage spaces for everything, and removing clutter. Reduce setup times The next step is to focus on reducing setup times, which will involve manufacturing and industrial engineering. It will require analysis of current setup procedures, elimination of unneeded steps, and streamlining of motions. Workers will need to be trained in the proper setup procedures. Reduce lot sizes and lead times Once setup times have been reduced, the focus is on reducing lot sizes and lead times.This, in turn, will reduce the inventory between workstations and free up space. The empty space will contribute to visibility. Implement layout changes The next step is to arrange equipment and workstations in close proximity to oneanother and to form work cells. Switch to pull production After the preceding changes have been implemented, it is time to switch to pull production. Changing from a push system to a pull system, including worker training,needs to be planned very carefully. However, the change needs to be made at oncebecause a production facility cannot use a push and a pull system at the same time.Develop relationship with suppliers Changes in relationships with suppliers should be among the last steps implemented.Demands for smaller and more frequent deliveries should be instituted gradually. JIT concepts seen in service firms