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Lesson 2.2

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7 views46 pages

Lesson 2.2

Uploaded by

melchorbulawan06
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Managing Quality

Lesson 2.2
Quality and Strategy
• Quality is the totality of features and characteristics of a
product or service that bears on its ability to satisfy
stated or implied needs.
Affects:
- Strategies: supports the differentiation, low cost,
and response strategies
- Bottom line: helps firms increase sales and reduce
costs
- Process: a demanding task
Competitive
Quality Good reputation
advantage
Implications of
• 1. Company reputation- Good quality companies will
Quality
be known in the market.

• 2. Product Liability- These companies are


responsible for the damages and injuries.

• 3. Global Implications- Because of globalization, you


would be competitive with other firms.
Total Quality Management

• TQM is a quality strategy wherein an organization


breeds a "quality-culture.“
• An organization is mindful of the principles of
quality.
• Engages all employees in taking the necessary steps
to implement quality in the whole organization.
• When companies aim to reach their quality
objectives, we can assume that things or processes
are done better than they were.
Objective

• The operations manager’s objective is:

“to build a total quality management system


that identifies and satisfies customer needs.”
ISO 9000
• With this, supply chains follow a quality standard called ISO
9000.
• Greek word īsos, meaning equal.
• ISO 9000 is the quality standard with international recognition.
• It encourages quality management procedures, detailed
documentation, work instructions and record keeping.
• The latest modification of the standard, ISO 9001: 2015,
follows a structure that makes it more compatible with other
management systems.
• This version gives greater emphasis to risk-based thinking,
attempting to prevent undesirable outcomes.
Cost of Quality
- The cost of doing things wrong; the price of non-conformance.
4 major cost categories associated with quality:
1. Prevention costs - reducing the potential for defects
(training, quality improvement programs)
2. Appraisal costs - evaluating products, parts, and services
(testing, labs, inspectors)
3. Internal failure costs - producing defective parts or service
before delivery (rework, scrap, downtime)
4. External failure costs - defects discovered after delivery
(reword, returned goods, liabilities, costs to societies)
Concepts and Tools for TQM
Continuous Improvement
• Total quality management requires a never-ending
process of continuous improvement that covers
people, equipment, suppliers, materials, and
procedures
• The basis of the philosophy is that every aspect of
an operation can be improved.
• The end goal is perfection, which is never
achieved but always sought.
• The PDCA cycle (also called a Deming circle or a
Shewhart circle) stresses the continuous nature of
the improvement process
• Kaizen, TQM, zero-defects
Six Sigma

• The term Six Sigma , popularized by Motorola, Honeywell,


and General Electric, has two meanings in TQM.
• In a statistical sense, it describes a process, product, or
service with an extremely high capability (99.9997%
accuracy)
• For example, if 1 million passengers pass through the St.
Louis Airport with checked baggage each month, a Six
Sigma program for baggage handling will result in only 3.4
passengers with misplaced luggage.
• The more common three-sigma program would result in 2,700
passengers with misplaced bags every month.
TQM Definition of Six sigma

• Six Sigma is a program designed to reduce defects


to help lower costs, save time, and improve customer
satisfaction.
• Six Sigma is a comprehensive system:
• It is a strategy,
• It is a discipline –DMAIC (Six Sigma
Improvement model)
• a set of tools
-for achieving and sustaining business success
Employee Empowerment

• Research suggests that some 85% of quality


problems have to do with materials and
processes, not with employee performance.
• The task is to design equipment and processes
that produce the desired quality.
TQM Tools
Process Flowchart
Cause and Effect Diagram

• Method
• Manpower
• Machineries
• Materials

• Others
Check Sheet
Pareto Analysis
• The Pareto Principle, named after
esteemed economist Vilfredo Pareto, specifies that 80% of
consequences come from 20% of the causes, asserting an
unequal relationship between inputs and outputs.

• Vital Few vs. Trivial Many

• 80% of customer complaints arise from 20% of your products and services.
• 80% of delays in the schedule result from 20% of the possible causes of
the delays.
• 20% of your products and services account for 80% of your profit.
• 20% of your sales force produces 80% of your company revenues.
• 20% of a systems defects cause 80% of its problems.
Histogram

For example, a census focused on


the demography of a country may
use a histogram to show how
many people are between the
ages of 0 and 10, 11 and 20, 21
and 30, 31 and 40, 41 and 50, etc.
This histogram would look similar
to the example above.
Scatter Diagram
Statistical Process Control Chart
Ishikawa Diagram
• Called the fishbone diagram

• OJT output

• This diagram helps you categorize the different causes


of a problem and would help you focus on generating
specific appropriate courses of action for such
problem.
• Each “bone” represents a possible source of error.
Pareto Analysis
Conclusion: ABC company should focus coming up
with solutions regarding overpricing and small
portion sizes as this makes up 80% of all
complaints.
TQM in Services
• Talking about quality in service is more difficult to measure
than when discussing the quality of goods.
• When you are offering services, it was said that the tangible
component of services is still relevant.
• What’s challenging is to meet or exceed customer’s
expectations because the perceived quality of your
company’s service is judged against the customer’s
expectations.
• No matter what product you serve, goods or services,
managers should always have a backup plan when products
fail, especially when services fail.

“LEARN” routine.
► Listen- Listen to the customer
► Empathize- Imagine if you were in their shoes
► Apologize- Apologize for any inconveniences
► React- Do something to remedy
► Notify- Notify the team to make changes and offer better
service in the future
SERVQUAL
• Evaluates performance
• a widely used instrument that provides direct
comparisons between customer service
expectations and the actual service provided.
• focuses on the gaps between the customer service
expectations and the service provided on 10 service
quality determinants
• five factors for measurement: reliability, assurance,
tangibles, empathy, and responsiveness.
Designing the product, managing the service
process, matching customer expectations to
the product, and preparing for the exceptions
are keys to quality services

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