Reduced Costs • Increased productivity • Lower rework and scrap costs • Lower warranty costs Organizational practices Leadership, Mission statement, Effective operating procedures, Staff support, Training Yields: What is important and what is to be accomplished Quality principles Customer focus, Continuous improvement, Benchmarking, Just-in-time, Tools of TQM Yields: What is important and what is to be accomplished Employee fulfillment Empowerment, Organizational commitment Yields: Employee attitudes that can accomplish what is important Customer satisfaction Winning orders, Repeat customers Yields: An effective organization with a competitive advantage Implications of Quality In addition to being a critical element in operations, quality has other implications: 1. Company reputation. An organization can expect its reputation for quality-be it good or bad. Quality will show up in perceptions about the firm’s new products, employment practices, and supplier relations
2. Product liability. The courts increasingly hold organizations that
design, produce, or distribute faulty products or services liable for damages or injuries resulting from their use
3. Global implications. In this technological age, quality is an
international, as well as OM concern. For both a company and a country to compete effectively in the global economy, products must meet global quality, design, and price expectations. Inferior products harm a firm’s profitability and a nation’s balance of payments Cost of Quality (COQ) Four major categories are associated with quality:
1. Prevention costs - costs associated with reducing the potential for
defective parts or services (i.e., training, quality improvement programs)
2. Appraisal costs - costs related to evaluating products, processes, parts,
and services
3. Internal failure - costs that result from production of defective parts or
services before delivery to customers (i.e., rework, scrap, downtime)
4. External costs - costs that occur after delivery of defective parts or
services (i.e., rework, returned goods, liabilities, lost goodwill, costs to society) Total Quality Management Total quality management (TQM) refers to a quality emphasis that encompasses the entrie organization, from supplier to customer. TQM stresses a commitment by management to have a continuing wide drive toward excellence in all aspects of products and services that are important to the customer
TQM is important because quality decisions influence each of
the 10 decisions made by operations managers. Each of these 10 decisions deals with some aspect of identifying and meeting customer expectations.
Meeting those expectations requires an emphasis on TQM if a
firm is to compete as a leader in world markets An Effective TQM Program has the following: 1. Continuous Improvement
2. Employee Empowerment
3. Benchmarking
4. Just in time
5. Taguchi concepts
6. Knowledge of TQM tools
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 Kaizen The Six-Step Cycle of Kaizen The Six Sigma Employee Empowerment Employee empowerment means involving employees in every step of the production process
Business literature suggests that some 85% of quality problems
have to do with materials and processes, not with employee performance
A study shows that TQM programs that delegate responsibiity
for quality to shop-floor employees tend to be twice as likely to succeed as those implemented with “top-down” directives Benchmarking Benchmarking is another ingredient in an organization’s TQM program
Benchmarking involves selecting a
demonstrated standard of products, services, costs, or practices that represent the very best performance for processes or activities very similar to your own The Steps to developing Benchmark •Determine what to benchmark
•Form a benchmark team
•Identify benchmarking partners
•Collect and analyze benchmarking information
•Take action to match or exceed the benchmark
Just-in-time (JIT) The philosophy behind just-in-time (JIT) is one of continuing improvement and enforced problem solving. JIT systems are designed to produce or deliver goods just as they are needed. JIT is related in three ways:
•JIT cuts the cost of quality
•JIT improves quality
•Better quality means less inventory and a better,
easier-to-employ JIT system Taguchi Concepts Most quality problems are the result of poor product and process design. Genichi Taguchi has provided us with three concepts aimed at improving both product and process quality. They are:
•Quality robustness
•Quality loss function
•Target-oriented quality Knowledge of TQM Tools To empower employees and implement TQM as a continuing effort, everyone in the organization must be trained in the techniques of TQM Quality loss function/Distribution of Products produced Pareto Chart Cause-and-Effect Diagrams QUESTIONS
