Quality Management

• “The first job we have is to turn out quality merchandise that consumers will buy and keep on buying. If we produce it efficiently and economically, we will earn a profit, in which you will share.”
• - William Cooper Procter

...is any action directed toward providing customers with goods and services of appropriate quality.

• ®Globalization
• ®Innovation/creativity/change
• ®Outsourcing
• ®Consumer sophistication
• ®Value creation
• ®Changes in quality

excellence

quantities of product attributes

fitness for intended use

quality vs price

conformance to specifications

-“Meeting or exceeding customer expectations”

-Customers can be...

• ®Consumers
• ®External customers
• ®Internal customers

• ®People-focused management system
• ®Focus on increasing customer satisfaction and reducing costs
• ®A systems approach that integrates organizational functions and the entire supply chain
• ®Stresses learning and adaptation to change
• ®Based on the scientific method

• ®Customer and stakeholder focus
• ®Participation and teamwork
• ®Process focus supported by continuous improvement and learning

• ®Customer is principal judge of quality
• ®Organizations must first understand customers’ needs and expectations in order to meet and exceed them
• ®Organizations must build relationships with customers
• ®Customers include employees and society at large

• ®Employees know their jobs best and therefore, how to improve them
• ®Management must develop the systems and procedures that foster participation and teamwork
• ®Empowerment better serves customers, and creates trust and motivation
• ®Teamwork and partnerships must exist both horizontally and vertically

• ®A process is how work creates value for customers
• ®Processes transform inputs (facilities, materials, capital, equipment, people, and energy) into outputs (goods and services)
• ®Most processes are cross-functional

• ®Enhancing value through new products and services
• ®Reducing errors, defects, waste, and costs
• ®Increasing productivity and effectiveness
• ®Improving responsiveness and cycle time performance

The foundation for improvement … Understanding why changes are successful through feedback between practices and results, which leads to new goals and approaches

• ®Planning
• ®Execution of plans
• ®Assessment of progress
• ®Revision of plans based on assessment findings

• ®Customer relationship management
• ®Leadership and strategic planning
• ®Human resources management
• ®Process management
• ®Information and knowledge management

• ®Is driven by customer wants and needs
• ®Makes significant contribution to business success
• ®Matches organization’s unique resources with opportunities
• ®Is durable and lasting
• ®Provides basis for further improvement
• ®Provides direction and motivation

• ®General Accounting Office study of Baldrige Award applicants
• ®Hendricks and Singhal study of quality award winners
• ®Performance results of Baldrige Award recipients

• ®Organizational level: meeting external customer requirements
• ®Process level: linking external and internal customer requirements
• ®Performer/job level: meeting internal customer requirements

• ®Personal initiative has a positive impact on business success
• ®Quality-focused individuals often exceed customer expectations
• ®Quality begins with personal attitudes
• ®Attitudes can be changed through awareness and effort (e.g., personal quality checklists)
• ®Unless quality is internalized at the personal level, it will never become rooted in the culture of an organization. Thus, quality must begin at a personal level (and that means you!).

- Subsystems of an organization are linked together as internal customers and suppliers.

A systems perspective acknowledges the importance of the interactions of subsystems, not the actions of them individually

• - Product design and engineering
• - Purchasing and receiving
• - Production planning and scheduling
• - Manufacturing and assembly
• - Tool engineering
• - Industrial engineering and process design
• - Finished goods inspection and test
• - Packaging, shipping, and warehousing
• - Installation and service

• - Joseph M. Juran
• - Philip B. Crosby
• - Armand V. Feigenbaum
• - Kaoru Ishikawa
• - Genichi Taguchi

• -Stay in business - Provide jobs and more jobs
• The Deming philosophy focuses on continual improvements in product and service quality by reducing uncertainty and variability in design, manufacturing, and service processes, driven by the leadership of top management.
• - Most organizational processes are cross-functional
• - Parts of a system must work together
• - Every system must have a purpose
• - Management must optimize the system as a whole
• - Many sources of uncontrollable variation exist in any process
• - Excessive variation results in product failures, unhappy customers, and unnecessary costs
• - Statistical methods can be used to identify and quantify variation to help understand it and lead to improvements

• - Experience alone does not establish a theory, it only describes
• - Theory shows cause-and-effect relationships that can be used for prediction
• - People are motivated intrinsically and extrinsically; intrinsic motivation is the most powerful
• - Fear is demotivating
• - Managers should develop pride and joy in work

• - 2. Learn the new philosophy.
• - 3. Understand the purpose of inspection.
• - 4. End business practices driven by price alone.
• - 5. Constantly improve system of production and service.
• - 6. Institute training.
• - 7. Teach and institute leadership.
• - 8. Drive out fear and create trust.
• - 9. Optimize team and individual efforts.
• - 10. Eliminate exhortations for work force.
• - 11. Eliminate numerical quotas and M.B.O. Focus on improvement.
• - 12. Remove barriers that rob people of pride of workmanship.
• - 13. Encourage education and self-improvement.
• - 14. Take action to accomplish the transformation.

• - Quality control
• - Quality improvement

Juran proposed a simple definition of quality: “fitness for use.” This definition of quality suggests that it should be viewed from both external and internal perspectives; that is, quality is related to “(1) product performance that results in customer satisfaction; (2) freedom from product deficiencies, which avoids customer dissatisfaction.”

• - Quality means conformance to requirements
• - Problems are functional in nature
• - There is no optimum level of defects
• - Cost of quality is the only useful measurement
• - Zero defects is the only performance standard

• - Achieve, maintain, and continuously improve product quality
• - Improve quality of operations to continually meet customers’ and stakeholders’ needs
• - Provide confidence to internal management and other employees that quality system requirements are being fulfilled
• - Provide confidence to customers and other stakeholders that quality requirements are being achieved
• - 21 elements organized into four major sections:
• o Management Responsibility
• o Resource Management
• o Product Realization
• o Measurement, Analysis, and Improvement

• - Leadership
• - Involvement of People
• - Process Approach
• - System Approach to Management
• - Continual Improvement
• - Factual Approach to Decision Making
• - Mutually Beneficial Supplier Relationships
• ISO 9000 provides a set of good basic practices for initiating a quality system, and is an excellent starting point for companies with no formal quality assurance program.

• - Six Sigma can be described as a business improvement approach that seeks to find and eliminate causes of defects and errors in manufacturing and service processes by focusing on outputs that are critical to customers and a clear financial return for the organization.
• - Think in terms of key business processes, customer requirements, and overall strategic objectives.
• - Focus on corporate sponsors responsible for championing projects, support team activities, help to overcome resistance to change, and obtaining resources.
• - Emphasize such quantifiable measures as defects per million opportunities (dpmo) that can be applied to all parts of an organization
• - Ensure that appropriate metrics are identified early and focus on business results, thereby providing incentives and accountability.
• - Provide extensive training followed by project team deployment
• - Create highly qualified process improvement experts (“green belts,” “black belts,” and “master black belts”) who can apply improvement tools and lead teams.

• To create satisfied customers, the organization needs to identify customers’ needs, design the production and service systems to meet those needs, and measure the results as the basis for improvement.
• - “Satisfaction is an attitude; loyalty is a behavior”
• - Loyal customers spend more, are willing to pay higher prices, refer new clients, and are less costly to do business with.
• - It costs five times more to find a new customer than to keep an existing one happy.
• - A firm cannot create loyal customers without first creating satisfied customers.

• - Understand the voice of the customer (VOC)
• - Understand linkages between VOC and design, production, and delivery
• - Build relationships through commitments, provide accessibility to people and information, set service standards, and follow-up on transactions
• - Develop effective complaint management processes
• - Measure customer satisfaction for improvement

• o consumers
• o external customers
• o employees
• o society
• - Process level
• o internal customer units or groups
• - Performer level
• o individual internal customers

• - Who uses these products and services?
• - Who do employees call, write to, or answer questions for?
• - Who supplies inputs to the process?
• The natural customer-supplier linkages among individuals, departments, and functions build up the “chain of customers” throughout an organization that connect every individual and function to the external customers and consumers, thus characterizing the organization’s value chain.

• - Features – “bells and whistles”
• - Reliability – probability of operating for specific time and conditions of use
• - Conformance – degree to which characteristics match standards
• - Durability - amount of use before deterioration or replacement
• - Serviceability – speed, courtesy, and competence of repair
• - Aesthetics – look, feel, sound, taste, smell

• - Assurance – knowledge and courtesy of employees and ability to convey trust
• - Tangibles – physical facilities and appearance of personnel
• - Empathy – degree of caring and individual attention
• - Responsiveness – willingness to help customers and provide prompt service

• - Satisfiers: expressed requirements
• - Exciters/delighters: unexpected features

• - Failure to identify appropriate quality dimensions
• - Failure to weight dimensions appropriately
• - Lack of comparison with leading competitors
• - Failure to measure potential and former customers
• - Confusing loyalty with satisfaction
• - Customer Perceived Value

The three basic functions of quality circles and problem-solving teams are to identify, analyze, and solve quality and productivity problems.

The key stages of a team’s life cycle are called forming, storming, norming, performing, and adjourning.

• - Improvement plan
• - Clearly defined roles
• - Clear communication
• - Beneficial team behaviors
• - Well-defined decision procedures
• - Balanced participation
• - Established ground rules
• - Awareness of group process
• - Use of scientific approach

• - Job rotation – having workers learn several tasks and rotate among them
• - Job enrichment – granting more authority, responsibility, and autonomy

• - Develops skills and leadership abilities
• - Increases morale and commitment
• - Fosters creativity and innovation
• - Helps people understand quality principles and instilling them into the organization’s culture
• - Allows employees to solve problems at the source
• - Improves quality and productivity

• - Remove restrictive policies/procedures
• - Foster an atmosphere of trust
• - Share information freely
• - Make work valuable
• - Train managers in “hands-off” leadership
• - Train employees in allowed latitude

• - Conventional appraisal systems
• o Focus on short-term results and individual behavior; fail to deal with uncontrollable factors
• - New approaches
• o Focus on company goals such as quality and behaviors like teamwork
• o 360-degree feedback; mastery descriptions
• - Measuring Employee Satisfaction and Effectiveness
• - Satisfaction
• o Quality of worklife, teamwork, communications, training, leadership, compensation, benefits, internal suppliers and customers
• - Effectiveness
• o Team and individual behaviors; cost, quality, and productivity improvements; employee turnover; suggestions; training effectiveness

Leading companies identify important business processes throughout the value chain that affect customer satisfaction. These processes typically fall into two categories: value-creation processes and support processes.

• - Translate customer requirements and internal capabilities into product and service design requirements early in the process
• - Ensure that quality is built into products and services and use appropriate tools during development
• - Manage product development process to enhance communication, reduce time, and ensure quality
• - Define performance requirements for suppliers and ensure that they are met
• - Control the quality and operational performance of key processes and use systematic methods to identify variations, determine root causes, and make corrections
• - Continuously improve processes to achieve better quality, cycle time, and overall operational performance
• - Innovate to achieve breakthrough performance using benchmarking and reengineering
• - Plan and ensure continuity of operations

• Make the product
• Sell the product

• Design the product
• Make it with appropriate tests
• Put it on the market Conduct consumer research
• Redesign with improvements

• o -Functional performance
• - Parameter Design
• o -Nominal dimensions
• - Tolerance Design
• o -Tolerances

• L(x) = k(x - T)2
• Example: Specification = .500 ± .020
• Failure outside of the tolerance range costs $50 to repair. Thus, 50 = k(.020)2. Solving for k yields k = 125,000. The loss function is: L(x) = 125,000(x - .500)2
• Expected loss = k(s2 + D2) where D is the deviation from the target.

• - Tools and Approaches
• o Design for Manufacturability
• o Design for Environment

• o Design processes – activities that develop functional product specifications
• o Production/delivery processes – those that create or deliver products
• - Support processes – those most important to an organization’s value creation processes, employees, and daily operations

• - Mindset of prevention and continuous improvement
• - Everyone manages a process at some level and is a customer and a supplier
• - Customer needs drive the process
• - Corrective action focuses on root cause
• - Process simplification reduces errors

- DFM is intended to prevent product designs that simplify assembly operations but require more complex and expensive components, designs that simplify component manufacture while complicating the assembly process, and designs that are simple and inexpensive to produce but difficult or expensive to service or support.

• - Environmental issues
• - Design for Environment (DfE) - is the explicit consideration of environmental concerns during the design of products and processes, and includes such practices as designing for recyclability and disassembly
• - Process Management

• - Concurrent (simultaneous) engineering - a process in which all major functions involved with bringing a product to market are continuously involved with the product development from conception through sales
• - Design reviews

• 2. Identify the customer: Who is the work for?
• 3. Identify the supplier: What do I need and from whom do I get it?
• 4. Identify the process: What steps or tasks are performed? What are the inputs and outputs for each step?
• 5. Mistake-proof the process: How can I eliminate or simplify tasks?
• 6. Develop measurements and controls, and improvement goals: How do I evaluate the process? How can I improve further?

• - Physical facilities, processes and procedures
• - Employee behavior
• - Employee professional judgment

• 2. technical and administrative credibility;
• 3. interpersonal and political sensitivity; and
• 4. leadership ability.

• - Project Quality Planning: Create a blueprint for the scope of the project and resources needed to accomplish it.
• - Project Quality Assurance: Use appropriate, qualified processes to meet technical project design specifications.
• - Project Quality Control: Use appropriate communication and management tools to ensure that managerial performance, process improvements, and customer satisfaction is tracked.
• - Project Quality Closure: Evaluate customer satisfaction with project deliverables and assess success and failures that provide learning for future projects and referrals from satisfied customers.
• - Process Control
• - Control – the activity of ensuring conformance to requirements and taking corrective action when necessary to correct problems and maintain stable performance

2. Long-term improvements cannot be made to a process unless the process is first brought under control.

• 1. a standard or goal,
• 2. a means of measuring accomplishment, and
• 3. comparison of actual results with the standard, along with feedback to form the basis for corrective action.

• - key processes, and
• - final products and services.

• - a clear understanding of the appropriate equipment and working environment;
• - methods for monitoring and controlling critical quality characteristics;
• - approval processes for equipment;
• - criteria for workmanship, such as written standards, samples, or illustrations; and
• - maintenance activities.

• 2. What actually happened?
• 3. Why was there a difference?
• 4. What can we learn?