OPERATIONS MANAGEMENT

Chapter 9
Management

of Quality

Aurea Theresa M. Laxinto

Group 2 - MMPA Trece 2B5
 DISCUSS THE PHILOSOPHIES OF

QUALITY GURUS

DEFINE THE TERM QUALITY AS IT

Learning

RELATES TO PRODUCTS AND

SERVICES

Objectives
IDENTIFY DETERMINANTS OF

QUALITY

EXPLAIN IMPORTANCE OF QUALITY

AND CONSEQUENCES OF POOR

QUALITY
DESCRIBE AND GIVE EXAMPLES OF

THE COSTS ASSOCIATED WITH

QUALITY
 DISCUSS IMPORTANCE OF ETHICS IN

MANAGING QUALITY

Learning

COMPARE THE QUALITY AWARDS

Objectives
DISCUSS QUALITY CERTIFICATION

AND ITS IMPORTANCE

DESCRIBE TOTAL QUALITY

MANAGEMENT (TQM)

GIVE AN OVERVIEW OF PROBLEM

SOLVING
 GIVE AN OVERVIEW OF PROCESS

IMPROVEMENT

DESCRIBE THE SIX SIGMA

Learning
METHODOLOGY

Objectives
DESCRIBE AND USE VARIOUS QUALITY
TOOLS
 QUALITY is the ability of a

Introduction product or service to consistently

meet or exceed customer

expectations.
 Evolution of Quality Management

PRE-INDUSTRIAL
INDUSTRIAL

1920S 1930S 1940S 1950S

REVOLUTION REVOLUTION

Craftsmanship,
Division of
Statistical
Tables of
Statistical
Quality

Guilds Labor Control Charts Sampling Sampling Assurance

Techniques
Scientific

Management
 Evolution of Quality Management

1960S EARLY 1970S LATE 1970S

Zero Defects Quality

Strategic

Assurance
Approach to

Methods
Quality
increased

emphasis in

services
 LEARNING OBJECTIVE 1

DISCUSS THE PHILOSOPHIES OF

QUALITY GURUS

The Foundations of

Modern Quality

Management: The Gurus

 Father of Statistical Quality

1
Control

Developed Control Charts for

analyzing the outputs of

WALTER SHEWHART 2
processes to determine when

corrective action was necessary

Had strong influence on two

3
other Gurus: Deming and Juan
 14 Points to achieve quality in

1
an organization

"The cause of inefficiency and

W. EDWARDS DEMING 2 poor quality is the system, not

the employees."

Stressed the need to reduce

3 variation in output (deviation

from standard)
 1 Fitness-for-Use

Trilogy of Quality Management:

Quality Planning, Quality control

JOSEPH M. JURAN 2 and Quality Improvement;

Commitment of Management to

Continual Improvement

Measured the cost of quality

and demonstrated the potential

3
for increased profits if costs of

poor quality is reduced

 1 Cost of Non-Conformance

Quality is a "total field" not

ARMAND FEIGENBAUM 2 simply a collection of tools and

techniques

It is the customer who defines

3
quality
 Zero Defects and "Do it right the

1
first time"

PHILIP B. CROSBY 2 Quality is Free

Any level of defects is too high

3 and achieving quality can be

relatively easy
 Cause and Effect Diagram --

1
Fishbone Diagram

KAORU ISHIKAWA 2 Quality Circles

Called attention to the internal

customer -- the next person in

3
the process, the next operation,

within the organization

GENICHI TAGUCHI SHIGEO SHINGO & TAIICHI OHNO

1 Taguchi Loss Function 1 Kaizen (at Toyota)

2 Cost to society of poor quality

 LEARNING OBJECTIVE 2

DEFINE THE TERM QUALITY AS IT

RELATES TO PRODUCTS AND

SERVICES

INSIGHTS ON QUALITY

MANAGEMENT
PRODUCT QUALITY
9 DIMENSIONS OF PRODUCT QUALITY

PERFORMANCE AESTHETICS SPECIAL

FEATURES
MAIN CHARACTERISTICS OF

APPEARANCE, FEEL, SMELL

THE PRODUCT EXTRA CHARACTERISTICS

CONFORMANCE RELIABILITY DURABILITY

HOW WELL A PRODUCT

ABILITY TO PERFORM

CORRESPONDS TO DESIGN
DEPENDABLE PERFORMANCE
OVERTIME
SPECIFICATIONS

PERCEIVED SERVICEABILITY CONSISTENCY

QUALITY
INDIRECT EVALUATION OF HANDLING OF COMPLAINTS OR
QUALITY DOESN'T VARY
QUALITY REPAIR
PRODUCT QUALITY
9 DIMENSIONS OF PRODUCT QUALITY
SERVICE QUALITY
9 DIMENSIONS OF SERVICE QUALITY

CONVENIENCE RELIABILITY RESPONSIVENESS

ABILITY TO PERFORM A
WILLINGNESS OF SERVICE

AVAILABILITY AND
SERVICE DEPENDABLY,
PROVIDERS TO HELP CUSTOMERS

ACCESSIBILITY OF THE SERVICE CONSISTENTLY AND

IN UNUSUAL SITUATIONS AND TO

ACCURATELY DEAL WITH PROBLEMS

TIME ASSURANCE COURTESY

KNOWLEDGE EXHIBITED BY
THE WAY THE CUSTOMERS ARE

PERSONNEL WHO COME INTO

SPEED WITH WHICH SERVICE IS

TREATED BY EMPLOYEES WHO

CONTACT WITH A CUSTOMER AND

DELIVERED ABILITY TO CONVEY TRUST AND

COME INTO CONTACT WITH

CONFIDENCE THEM

TANGIBLES CONSISTENCY EXPECTATIONS

PHYSICAL APPEARANCE OF

ABILITY TO PROVIDE THE SAME

FACILITIES, EQUIPMENT,
MEET (OR EXCEED) CUSTOMER

LEVEL OF GOOD QUALITY

PERSONNEL AND
EXPECTATIONS
REPEATEDLY
COMMUNICATION MATERIALS
SERVICE QUALITY
9 DIMENSIONS OF SERVICE QUALITY
 LEARNING OBJECTIVE 3

IDENTIFY THE DETERMINANTS OF

QUALITY

INSIGHTS ON QUALITY

MANAGEMENT
DETERMINANTS OF QUALITY

DESIGN CONFORMANCE

TO DESIGN
INTENTION OF DESIGNERS DEGREE TO WHICH
TO INCLUDE OR EXCLUDE GOODS OR SERVICES
FEATURES IN A PRODUCT CONFORM TO THE INTENT
OR SERVICE OF THE DESIGNERS

EASE OF USE SERVICE

INCREASE THE CHANCES, BUT

AFTER

DO NOT GUARANTEE, THAT A

PRODUCT WILL BE USED FOR

DELIVERY
ITS INTENDED PURPOSE AND
TAKING CARE OF ISSUES
IN SUCH A WAY THAT IT WILL

AND PROBLEMS THAT

CONTINUE TO FUNCTION

PROPERLY AND SAFELY ARISE AFTER TEH SALE

 LEARNING OBJECTIVE 4

EXPLAIN IMPORTANCE OF QUALITY

AND CONSEQUENCES OF POOR

QUALITY

INSIGHTS ON QUALITY

MANAGEMENT
Benefits of GREATER CUSTOMER LOYALTY

Good Quality LOWER LIABILITY COSTS

ENHANCE REPUTATION

FEWER COMPLAINTS

COMMAND PREMIUM PRICES

LOWER PRODUCTION COSTS

INCREASE MARKET SHARE

HIGHER PROFITS
Consequences of LOSS OF BUSINESS

Poor Quality
LIABILITY

PRODUCTIVITY

COSTS
 LEARNING OBJECTIVE 5

DESCRIBE AND GIVE EXAMPLES OF

THE COSTS ASSOCIATED WITH

QUALITY

INSIGHTS ON QUALITY

MANAGEMENT
 Evolution of Quality Management
CATEGORY DESCRIPTION EXAMPLES

Costs related to measuring, evaluating,

Inspection equipment, testing, labs, inspectors,

APPRAISAL COSTS and auditing materials, parts, products,

and the interruption of production to take

and services to assess conformance with

samples
quality standards

Quality improvement programs, training,

Costs related to reducing the potential for

PREVENTION COSTS quality problems

monitoring, data collection and analysis, and

design costs

INTERNAL FAILURE
Costs related to defective products or

Rework costs, problem solving, material and

services before they aredelivered to

COSTS customers
product losses, scrap, and downtime

EXTERNAL FAILURE

Costs related to delivering substandard

Returned goods, reworking costs, warranty costs,

COSTS products or services to customers loss of goodwill, liability claims, and penalties
 LEARNING OBJECTIVE 6

DISCUSS IMPORTANCE OF ETHICS IN

MANAGING QUALITY

INSIGHTS ON QUALITY

MANAGEMENT
Ethics and Quality
Management
Having knowledge of These can include increased costs for organizations

substandard work and failing in terms of decreased productivity, an increase in the

to correct and report it in a accident rate among employees, inconveniences and

timely manner is unethical injuries to customers, and increased liability costs.

and can have a number of
negative consequences.

A related issue is how an

For example, automakers and tire makers in recent

organization chooses to deal

years have been accused of withholding information

with information about

about actual or potential qualityproblems; they failed

quality problems in products

to issue product recalls, or failed to divulge

that are already in service. information, choosing instead to handle any

complaints that arose on an individual basis.

 LEARNING OBJECTIVE 7

COMPARE THE QUALITY AWARDS

QUALITY AWARDS
QUALITY AWARDS

Baldridge European Deming

Award Quality Prize

ANNUAL AWARD GIVEN BY THE

U.S. GOVERNMENT TO Award JAPAN’S HIGHLY COVETED

AWARD RECOGNIZING

RECOGNIZE QUALITY

EUROPEAN AWARD FOR SUCCESSFUL QUALITY EFFORTS.

ACHIEVEMENTS OF U.S.

COMPANIES. ORGANIZATIONAL EXCELLENCE.

 LEARNING OBJECTIVE 8

DISCUSS QUALITY CERTIFICATION

AND ITS IMPORTANCE

QUALITY
CERTIFICATION
QUALITY AWARDS

ISO 9000 ISO 14000 ISO 24700

A set of international A set of international A set of international

standards on quality
standards for assessing standards that pertains to
management and quality
a company’s environmental the quality and performance of
assurance, critical to
performance. office equipment that contains
international business.
reused components.

 LEARNING OBJECTIVE 9

DISCUSS TOTAL QUALITY

MANAGEMENT (TQM)

TOTAL QUALITY
MANAGEMENT
TQM
A philosophy that involves everyone

in an organization in a continual

effort to improve quality and achieve

customer satisfaction.

3 KEY PHILOSOPHIES

Continuous improvement
Involvement of everyone
Customer satisfaction
NEXT
 Key Elements of CONTINUOUS

IMPROVEMENT
KAIZEN
01 KNOWLEDGE OF

TOOLS
06

TQM COMPETITIVE

BENCHMARKING
02 SUPPLIER

07 QUALITY

EMPLOYEE

EMPOWERMENT 03 CHAMPION
08

TEAM

QUALITY AT THE

04 APPROACH SOURCE
09 Do it right the

first time.

FACTS-BASED

DECISIONS 05 SUPPLIER

PARTNERS 10
To truly reap the benefits of TQM, the organization
must change its culture.
Traditional Organization
vs. TQM Organization
Obstacles of
POOR INTRAORGANIZATION

COMMUNICATION

Implementing TQM
LACK OF EMPLOYEE EMPOWERMENT

LACK OF COMPANYWIDE DEFINITION

OF QUALITY
VIEW OF QUALITY AS "QUICK FIX"

LACK OF STRATEGIC PLAN FOR

CHANGE
EMPHASIS ON SHORT-TERM

FINANCIAL RESULTS

LACK OF CUSTOMER FOCUS

INORDINATE PRESENCE OF INTERNAL

POLITICS AND "TURF" ISSUES

Obstacles of

Implementing TQM
LACK OF STRONG MOTIVATION

LACK OF TIME TO DEVOTE TO

QUALITY INITIATIVES

LACK OF LEADERSHIP
Criticisms of TQM
OVERZEALOUS ADVOCATES

PROGRAMS MAY NOT BE

MAY BLINDLY PURSUE TQM

QUALITY-RELATED DECISIONS

LINKED TO THE STRATEGIES

PROGRAMS EVEN THOUGH

MAY NOT BE TIED TO MARKET

OF THE ORGANIZATION IN A

OTHER PRIORITIES MAY BE

PERFORMANCE.
MEANINGFUL WAY
MORE IMPORTANT

ORGANIZATIONS SOMETIMES

FAILURE TO CAREFULLY PLAN

PURSUE CONTINUOUS

QUALITY EFFORTS MAY NOT BE

A PROGRAM BEFORE
IMPROVEMENT
TIED TO RESULTS.
EMBARKING ON IT WHEN DRAMATIC

IMPROVEMENT IS NEEDED.

There is nothing inherently wrong with TQM; the problem

is how some individuals or organizations misuse it.
 LEARNING OBJECTIVE 10

GIVE AN OVERVIEW OF PROBLEM

SOLVING

PROBLEM SOLVING AND

PROCESS IMPROVEMENT
 Steps in the TQM
Problem-Solving Process
The PDSA/

PDCA Cycle
Applied to

Problem

Solving
 LEARNING OBJECTIVE 11

GIVE AN OVERVIEW OF PROCESS

IMPROVEMENT

PROBLEM SOLVING

AND PROCESS

IMPROVEMENT
Process

Improvement
A systematic approach to improving a

process. Typical goals of process

improvement include increasing customer

satisfaction, achieving higher

quality, reducing waste, reducing cost,

increasing productivity, and reducing

processing time.
 LEARNING OBJECTIVE 12

DESCRIBE THE SIX SIGMA

METHODOLOGY

PROBLEM SOLVING

AND PROCESS

IMPROVEMENT
Six Sigma's
Reduction of variation is an important

goal.

Guiding

The methodology is data driven; it

Principles requires valid measurements.

Outputs are determined by inputs; focus

on modifying and/or controlling inputs to

improve outputs.

Only a critical few inputs have a

significant impact on outputs (the

Pareto effect); concentrate on those.

Key Players

in Six Sigma
Besides Top
Management, these
are the program
champions for six
sigma to succeed in
an organization
 Steps in the TQM
Problem-Solving Process
 LEARNING OBJECTIVE 13

DESCRIBE AND USE VARIOUS QUALITY

TOOLS

QUALITY TOOLS
7 Basic
Quality
Tools
Link
 End of Presentation.

Thank you!