4.

0
QUALITY IN
O P E RAT I O N
MANAGEMENT
QUALITY CONCEPT IN
OPERATION MANAGEMENT
• Quality refers to the ability of a product or service to
consistently meet or exceed customer requirements
or expectations. However, different customers will
have different requirements, so a working definition of
quality is customer-dependent
DIMENSIONS OF QUALITY

• Performance - main characteristics of the product/service

• Aesthetics - appearance, feel, smell, taste
• Special Features - extra characteristics
• Conformance - how well product/service conforms to
customer’s expectations
• Reliability - consistency of performance
• Durability - useful life of the product/service
• Perceived Quality - indirect evaluation of quality (e.g.
reputation)
• Serviceability - service after sale
EXAMPLES OF QUALITY DIMENSIONS

Dimension (Product) (Service)

Automobile Auto Repair
1. Performance Everything works, fit & All work done, at agreed
finish price
Ride, handling, grade of Friendliness, courtesy,
materials used Competency, quickness
2. Aesthetics Interior design, soft touch Clean work/waiting area

3. Special features Gauge/control placement Location, call when ready

Cellular phone, CD Computer diagnostics
player
EXAMPLES OF QUALITY DIMENSIONS (CONT’D)

Dimension (Product) (Service)

Automobile Auto Repair
5. Reliability Infrequency of breakdowns Work done correctly,
ready when promised

6. Durability Useful life in miles, resistance Work holds up over

to rust & corrosion time

7. Perceived Top-rated car Award-winning service

quality department

8. Serviceability Handling of complaints and/or Handling of complaints

requests for information
SERVICE QUALITY
• Tangibles
• Convenience
• Reliability
• Responsiveness
• Time
• Assurance
• Courtesy
EXAMPLES OF SERVICE QUALITY
Table 9.4

Dimension Examples
1. Tangibles Were the facilities clean, personnel neat?

2. Convenience Was the service center conveniently located?

3. Reliability Was the problem fixed?

4. Responsiveness Were customer service personnel willing and able

to answer questions?
5. Time How long did the customer wait?

6. Assurance Did the customer service personnel seem

knowledgeable about the repair?
7. Courtesy Were customer service personnel and the cashier
friendly and courteous?
EVOLUTION OF QUALITY
MANAGEMENT
• 1924 - Statistical process control charts
• 1930 - Tables for acceptance sampling
• 1940’s - Statistical sampling techniques
• 1950’s - Quality assurance/TQC
• 1960’s - Zero defects
• 1970’s - Quality assurance in services
DPMM (DEFECT PART PER
MILLION)
• PPM (Parts per million) is a measurement used by
many customers to measure quality performance.
• To calculate: For example, if you had 25
pieces defective in a shipment of 1,000 pieces.
25/1000= .025 or 2.5% defective. . 025 X 1,000,000
= 25,000 PPM.
WHAT IS FMEA?
• Failure modes and effects analysis (FMEA) is a
step-by-step approach for identifying all
possible failures in a design, a manufacturing or
assembly process, or a product or service.
TYPES OF FMEA

• System - focuses on global system functions

• Design - focuses on components and subsystems
• Process - focuses on manufacturing and assembly
processes
• Service - focuses on service functions
• Software - focuses on software functions
FMEA PROCEDURE: COMPLETE THE
HEADER ON THE FMEA FORM
WORKSHEET
 A Closer Look

THE FMEA FORM

Identify failure modes Identify causes of the Prioritize Determine and

and their effects failure modes assess actions
and controls
13
7 QUALITY CONTROL(QC
TOOLS

• Cause and Effect Diagrams

• Flow Charts
• Check sheets
• Histograms
• Pareto Charts
• Control Charts
• Scatter Diagrams
 QUALITY TOOL
BRAINSTORMING

Rules
• Diverse group
• Go around room and get input from all – one
idea per turn
• Continue until ideas are exhausted
• No criticism
• Group ideas that go together
• Look for answers
 QUALITY
TOOL
Cause and Effect Diagrams
 FISHBONE
DIAGRAM
Purpose: Graphical representation
of the trail leading to the root cause of
a problem
How is it done?
• Decide which quality characteristic,
outcome or effect you want to
examine (may use Pareto chart)
• Backbone –draw straight line
• Ribs – categories
• Medium size bones –secondary
causes
• Small bones – root causes
 CAUSE & EFFECT
DIAGRAMS
Benefits:
• Breaks problems down into bite-size pieces to

find root cause

• Fosters team work

• Common understanding of factors causing the

problem

• Road map to verify picture of the process

• Follows brainstorming relationship

 Cause & Effect Diagrams
Sample
Manpow Materials
er
Typos
Source info
Wrong source info
incorrect
Didn’t follow
proc.

Po ini
Dyslexic

t ra
Wrong purchase

o r ng
Transposition
order

Incorrect
shipping
Glare on documents
Temp. display Corrupt
data
No training
Environme
No
nt Keyboard
procedure
No communications sticks

Software
problem

Method Machine
s
 QUALITY
TOOL

Flow Charts
 FLOW
Purpose: CHARTS
Visual illustration of the sequence of operations required to
complete a task
 Schematic drawing of the process to measure or improve.
 Starting point for process improvement
 Potential weakness in the process are made visual.
 Picture of process as it should be.

Benefits:
 Identify process improvements
 Understand the process
 Shows duplicated effort and other non-value-added steps
 Clarify working relationships between people and organizations
 Target specific steps in the process for improvement.
 FLOW CHARTS
Benefits TOP DOWN
• Simplest of all
flowcharts
• Used for planning new
processes or examining Measure Analyze Improve Control
existing one
• Keep people focused on Problem report Customer input
Hardware
procurement
Fleet leader
reports

the whole process Hardware return Stress analysis

Customer
coordination Service reports

Heat transfer Compliance Operational

How is it done? Failure analysis analysis verification statistics
• List major steps Life analysis Documentation
• Write them across top of
Substantiation FAA approval
the chart
• List sub-steps under each
in order they occur
 FLOW
Benefits CHARTS
LINEAR
• Show what actually happens
at each step in the process
• Show what happens when
non-standard events occur Toolbox
• Graphically display
processes to identify
redundancies and other
wasted effort

How is it done?
• Write the process step inside
each symbol
• Connect the Symbols with
arrows showing the direction
of flow
 QUALITY
TOOL
S A M P L E L I N E A R F LO W
END
5 - Action Assignee
performs detail
analysis of failure. No
Start Requests failure
analysis as needed. 11 - Fleet Analysis
Still monitors failure to
failing? ensure corrective
action is effective.
1- Fleet Analysis
Yes
utilizes data
Yes
warehouse reports to 6 - Action Assignee
create and distribute documents
a selection matrix. 10 - FRB determines
investigation
required corrective
findings.
action - i.e. QAM or
supplier corrective
2 - Other Groups action.
compile data as
determined by FRB.
7 - Action Assignee 9 - FRB Categorize
reports investigation Failure: Workmanship,
3 - FRB meets to results to FRB. Still component, material,
No
analyze data. failing? maintenance, or
design. Also fleet
wide or RSU.

4 - FRB selects 8 - Fleet Analysis

candidate problems monitors failed item
for additional to ensure failure has
investigation. been corrected.
 QUALITY
TOOL
Checksheets
 CHECKSHEE
Purpose: TS
– Tool for collecting and
organizing measured or
counted data
– Data collected can be used as
input data for other quality
tools

Benefits:
– Collect data in a systematic
and organized manner
– To determine source of
problem
– To facilitate classification of
data (stratification)
 QUALITY CONTROL
TOOL

Histograms
 HISTOGRAMS
Purpose:
To determine the spread or variation
of a set of data points in a graphical
form

How is it done?:
• Collect data, 50-100 data point
• Determine the range of the data
• Calculate the size of the class
interval
• Divide data points into classes Stable process, exhibiting bell shape
Determine the class boundary
• Count # of data points in each class
• Draw the histogram
 HISTOGRAMS
Benefits:
• Allows you to understand at a glance the variation that exists in a
process
• The shape of the histogram will show process behavior
• Often, it will tell you to dig deeper for otherwise unseen causes of
variation.
• The shape and size of the dispersion will help identify otherwise hidden
sources of variation
• Used to determine the capability of a process
• Starting point for the improvement process
 QUALITY CONTROL
TOOL

Pareto Charts
 PARETO
Purpose: CHARTS
Prioritize problems.

How is it done?
• Create a preliminary list of
problem classifications.
• Tally the occurrences in
each problem classification.
• Arrange each classification
in order from highest to
lowest
• Construct the bar chart
 PARETO
CHARTS
Benefits: 120

 Pareto analysis helps

100
graphically display
results so the 80

significant few

Quantity
problems emerge 60

from the general

40
background
 It tells you what to 20

work on first
0
Dent Scratch Hole Others Crack Stain Gap
Defects 104 42 20 14 10 6 4
PARETO CHARTS
Pareto Charts
Weighted Pareto
 Weighted Pareto charts use
the quantity of defects
multiplied by their cost to 900

determine the order. 800

700

Weighted 600
Defect Total Cost cost

Weighted Cost
Gap 4 200 800 500

Dent 104 2 208

400
Hole 20 5 100
Crack 10 8 80 300
Scratch 42 1 42
Others 14 1 14 200

Stain 6 1 6
100

0
Gap Dent Hole Crack Scratch Others Stain
Weighted cost 800 208 100 80 42 14 6
PARETO ANALYSIS
80%
80% ofof the
the
problems
problems
may
may be
be
attributed
attributed to

Number of defects
to
20%
20% ofof the
the
causes.
causes.

Off Smeared Missing Loose Other

center print label
 QUALITY CONTROL
TOOL

Control Charts
 CONTROL
CHARTS
Purpose:
The primary purpose of a control chart is
to predict expected product outcome.

Benefits:
• Predict process out of control and out of
specification limits
• Distinguish between specific, identifiable
causes of variation
• Can be used for statistical process
control
 CONTROL CHARTS
• Strategy for eliminating assignable-cause
variation:
– Get timely data so that you see the effect of the
assignable cause soon after it occurs.
– As soon as you see something that indicates that an
assignable cause of variation has happened, search
for the cause.
– Change tools to compensate for the assignable cause.
• Strategy for reducing common-cause variation:
– Do not attempt to explain the difference between any
of the values or data points produced by a stable
system in control.
– Reducing common-cause variation usually requires
making fundamental changes in your process
 CONTROL
CHARTS
• Control Chart Decision Tree

– Determine Sample size (n)

– Variable or Attribute Data

• Variable is measured on a continuous scale

• Attribute is occurrences in n observations

– Determine if sample size is constant or

changing
 CONTROL CHARTS
Control Chart Decision Tree
X bar , R
o
2t
n=
10 n >10 X bar, S
data
bl e n=
ri a 1
Va
IX, Moving Range
Start
nt n
At

Consta p (fraction defective)

tr

data
ib

rcent or
Pe
ut

np (number def. Per

e

Cha sample
ngin
D

gn p
at
a

Co
da un
ta t
nt n c (defects per
Consta sample or
u defects per unit
Chan
ging u
n
 CONTROL
CHARTS
What does it look like?
o Adding the element of time
will help clarify your
understanding of the causes
of variation in the processes.
o A run chart is a line graph
of data points organized in
time sequence and centered
on the median data value.
 CONTROL CHARTS
I N D I V I D U A L X C H A RT S

How is it done?
• The data must have a normal distribution (bell curve).
• Have 20 or more data points. Fifteen is the absolute
minimum.
• List the data points in time order. Determine the range
between each of the consecutive data points.
• Find the mean or average of the data point values.
• Calculate the control limits (three standard deviations)
• Set up the scales for your control chart.
• Draw a solid line representing the data mean.
• Draw the upper and lower control limits.
• Plot the data points in time sequence.
 CONTROL
• Next, look at the upper and
CHARTS
lower control limits. If your
process is in control,
99.73% of all the data
points will be inside those
lines.
• The upper and lower
control limits represent
three standard deviations
on either side of the mean.
• Divide the distance
between the centerline and
the upper control limit into
 CONTROL CHARTS

• Search for trends:

– Two out of three
consecutive points are
in zone “C”
– Four out of five
consecutive points on
the same side of the
center line are on zone
“B” or “C”
– Only one of 10
consecutive points is in
 CONTROL CHARTS
• Basic Control Charts
interpretation rules:
– Specials are any points above
the UCL or below the LCL
– A Run violation is seven or
more consecutive points above
or below the center (20-25 plot
points)
– A trend violation is any upward
or downward movement of
five or more consecutive
points or drifts of seven or
more points (10-20 plot points)
– A 1-in-20 violation is more
than one point in twenty
consecutive points close to the
center line
CONTROL CHART
Figure 9.11

1020
UCL
1010
1000
990
980
LCL

970
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
TRACKING IMPROVEMENTS
Figure 9-17

UCL UCL
UCL

LCL
LCL
Additional improvements
LCL Process centeredmade to the process
and stable
Process not centered
and not stable
 QUALITY CONTROL
TOOL

Scatter Diagrams
 SCATTER
Purpose:
DIAGRAMS
To identify the correlations that might exist
between a quality characteristic and a
factor that might be driving it
• A scatter diagram shows the correlation
between two variables in a process.
– These variables could be a Critical To
Quality (CTQ) characteristic and a
factor affecting it two factors affecting
a CTQ or two related quality
characteristics.
• Dots representing data points are
scattered on the diagram.
– The extent to which the dots cluster
together in a line across the diagram
shows the strength with which the two
factors are related.
 SCATTER
DIAGRAMS
How is it done?:
• Decide which paired factors you want to examine. Both
factors must be measurable on some incremental linear
scale.
• Collect 30 to 100 paired data points.
• Find the highest and lowest value for both variables.
• Draw the vertical (y) and horizontal (x) axes of a graph.
• Plot the data
• Title the diagram
The shape that the cluster of dots takes will tell you something
about the relationship between the two variables that you tested.
• If the variables are correlated, SCATTER
when one changes the other
probably also changes. DIAGRAMS
• Dots that look like they are
trying to form a line are strongly
correlated.
• Sometimes the scatter plot may
show little correlation when all
the data are considered at once.
 Stratifying the data, that is,
breaking it into two or
more groups based on
some difference such as
the equipment used, the
time of day, some variation
in materials or differences
in the people involved,
may show surprising
results
 SCATTER
DIAGRAMS
• You may occasionally get scatter
diagrams that look boomerang- or
banana-shaped.
To analyze the strength of the
correlation, divide the scatter plot into
two sections.
Treat each half separately in your
analysis
Benefits:
• Helps identify and test probable causes.
• By knowing which elements of your
process are related and how they are
related, you will know what to control or
what to vary to affect a quality
characteristic.
QUALITY CONTROL PROCESS
PHASES OF QUALITY ASSURANCE

Inspection and
Inspection of lots corrective Quality built
before/after action during into the
production production process

Acceptance Process Continuous

sampling control improvement

The least The most

progressive progressive
STATISTICAL PROCESS
CONTROL (CONTROL
PROCESS)
List and briefly explain the elements of the control process.
• Define. The first step is to define in sufficient detail what is to be controlled
• Measure. Only those characteristics that can be counted or measured are candidates
for control.
• Compare. There must be a standard of comparison that can be used to evaluate the
measurements.
• Evaluate. Management must establish a definition of out of control.
• Correct. When a process is judged to be out of control, corrective action must be taken.
This involves uncovering the cause of nonrandom variability (e.g., worn equipment,
incorrect methods, failure to follow specified procedures) and correcting it.
• Monitor results. To ensure that corrective action is effective, the output of a
processmust be monitored for a sufficient period of time to verify that the problem has
been eliminated.
 SPC CONTROL CHART
Figure 10.4

Abnormal variation Out of

due to assignable sources control
UCL

Mean
Normal variation
due to chance
LCL
Abnormal variation
due to assignable sources

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Sample number

10-58
TOTAL QUALITY
MANAGEMENT
• Management plays a critical role in TQM
• The term total quality management (TQM) refers to a quest for quality
in an organization.
• There are three key philosophies in this approach
– continuous improvement
– involvement of everyone in the organization
– goal of customer satisfaction, which means meeting or exceeding customer
expectations
QUALITY TOOLS
 QUALITY TOOLS

• Cause and Effect Diagrams

• Flow Charts
• Check sheets
• Histograms
• Pareto Charts
• Control Charts
• Scatter Diagrams
IMPLEMENTATION OF TQM
• Continuous improvement
• Competitive benchmarking
• Employee empowerment
• Team approach
• Decisions based on facts rather than opinions.
• Knowledge of tools
• Supplier quality
• Champion. A TQM champion’s job is to promote the value and importance
of TQM principles throughout the company
• Quality at the source
• Suppliers are partners in the process, and long-term relationships are
encouraged
CRITISM IN TQM

1. Overzealous advocates may pursue TQM programs blindly, focusing

attention on quality even though other priorities may be more important
(e.g., responding quickly to a competitor’s advances).
2. Programs may not be linked to the strategies of the organization in a
meaningful way.
3. Quality-related decisions may not be tied to market performance. For
instance, customer satisfaction may be emphasized to the extent that its
cost far exceeds any direct or indirect benefit of doing so.
TQM PROCESS
IMPROVEMENT
• Process improvement is a systematic approach to improving a process. It
involves documentation, measurement, and analysis for the purpose of
improving the functioning of a process.
• Typical goals of process improvement include increasing customer
satisfaction, achieving higher quality, reducing waste, reducing c
• ost, increasing productivity, and reducing processing time
ACCEPTANCE QUALITY
LEVEL
• The acceptable quality limit (AQL) is the worst tolerable process average
(mean) in percentage or ratio that is still considered acceptable; that is, it
is at an acceptable quality level. Closely related terms are the
rejectable quality limit and rejectable quality level (RQL).
CONTINOUS IMPROVEMENT
(KAIZEN)
• Taiichi Ohno and Shigeo Shingo. Taiichi Ohno and Shigeo Shingo both
developed the philosophy and methods of kaizen, a Japanese term for
continuous improvement (defined more fully later in this chapter), at Toyota.
Continuous improvement is one of the hallmarks of successful quality
management
• Continuous improvement. The philosophy that seeks to improve all factors
related to the process of converting inputs into outputs on an ongoing basis is
called continuous improvement . It covers equipment, methods, materials,
and people. Under continuous improvement, the old adage “If it ain’t broke,
don’t fix it” gets transformed into “Just because it isn’t broke doesn’t mean it
can’t be improved.”