TQM & OM

TQM = Customer-Driven Quality Management

Customer Quality Measures

Customers typically relate quality to: 1) Feature-based measures (have or have not) determined by design diamond example: marquise shape diamond vs. round diamond 2) Performance measures (range of values) conformance to design or ideal value diamond example: 4Cs -- carat, clarity, color, cut In this class, we will focus more on analyzing performance measures.
2

What are the Different Views of Quality?

Customers View (more subjective view):

Producers View (more objective view):

Transcendent view image of excellence quality of the design (look, feel, and function). Fitness for intended use customer needs/expectations. consider both feature and performance measures to assess value. Value = Quality / Price (value determined by individual customers)
conformance to requirements. e.g., # of defects per million products is a measure of conformance. costs of quality (prevention, appraisal, scrap & warranty costs).
prevention costs: training, writing quality procedures appraisal costs: inspecting and measuring product characteristics scrap and rework costs: internal costs of defective products warranty costs: external costs for product failures in the field

increasing quality conformance reduces product costs and raises 3 profits.

History of Quality Paradigms (producer / customer relationship)

Customer-craft quality paradigm:

design and build each product for a particular customer. producer knows the customer directly.

Mass production and inspection quality paradigm:

focus on designing and building products for mass consumption. push products on the customer (limit customer choices). quality is maintained by inspecting and detecting bad products. major innovation to this paradigm: statistical process control

TQM or Customer-Driven Quality paradigm:

potential customers determine what to design and build. higher quality obtained by focusing on preventing problems and continuously reducing variability in all organizational processes.

The Quality Hierarchy (Evolution)

Prevention stop problems at source; greater design emphasis (PROACTIVE)

4. Total Quality Management (TQM) 2. Quality Assurance (QA) 2. Quality Control (QC) 1. Inspection

incorporates QC/QA activities into a company-wide system aimed at satisfying the customer. (involves all organizational functions) planned and systematic actions to insure that products or services conform to company requirements (example: product quality plans). operational techniques to make inspection more efficient & to reduce the costs of quality. (example: SPC) Inspect products

Detection Finding & Fixing Mistakes (REACTIVE)

Inspection Approach999 Out of 1000 Syndrome

People often think that doing something right 99 percent of time (99 out of 100) is good enough. However, at this level, there would be the following: 5,000 incorrect surgical operations per week 2 short or long landings per day at each major airport Others: ___________?
6

Some Quality Definitions

The totality of features and characteristics of a product or service that bears on its ability to satisfy given needs. Quality is meeting or exceeding customer expectations.
7

Types of Customers
A process has customers, suppliers, and process managers!
INPUTS

SUPPLIER

TRANSFORMATION PROCESS

OUTPUTS CUSTOMER

Value added

THE NEXT PROCESS IS THE CUSTOMER!

8

Types of Customers

External/Ultimate customer

Needs? Expectations?

Immediate or Internal Customer

Need to define your customer needs and expectations. Always provide feedback to the previous process (supplier)
9

TQM
TQM is a management philosophy which seeks to integrate all organizational functions (marketing, finance, design, engineering, production, customer service ) to focus on meeting customer needs and organizational objectives. It views organizations as a collection of processes. It maintains that organizations must strive to continuously improve these processes by incorporating the knowledge and experiences of workers.
10

The Simple Objective of TQM

Do the right things, right the first time, every time.

11

TQM
DEFINITION OF TOTAL QUALITY MANGEMENT A customer focused, strategic and systematic approach involving continuous performance improvement to provide goods and services that offer the highest value.
TOTAL Everyone in the organization is responsible for quality, and everything in the organization is addressed for improvement. QUALITY All products or services consistently meet or exceed customer needs, desires, and expectations. MANAGEMENT The PLANNING & EXECUTION that makes it happen, via mission, values, vision, goals, policies, process improvement, financial support, measurements, communication, participative supervision, training and education, rewards and recognition, and above all, management involvement.
12

TQM Continued

CUSTOMER FOCUED

Have external and internal customers define quality, then make the changes that make economic sense Make quality a competitive strategy; plan and work for better performance and long term success, instead of business-asusual and short-term results Align all production, information, financial, and personnel systems with the organizations mission, vision, and goals

STRATEGIC

SYSTEMATIC

13

TQM Continued

APPROACH

Proactively lead and steer change, through culture, people, systems, and partnerships Enable employees to routinely solve problems, help improve processes, and make decisions; foster on-going teamwork between managers, employees, unions, customers, and suppliers; design quality in the first time; use state-of-the-art technology; make improvement a habit, a never ending journey. Focus on prevention instead of detection, on doing it right the first time instead of doing it over, and on customer oriented outcomes instead of operational status quo.
14

CONTINUOUS

PERFORMANCE

TQM Continued

IMPROVEMENT

Facilitate data gathering and process analysis; encourage innovation and better design; update methods, procedures, tools, and equipment; remove barriers to effective performance; strive for perfection. Achieve total customer satisfaction where value is perceived as the combination of cost, quality, availability of product and service, and product performance/reliability.

VALUE

15

Some Basic Tenets of TQM

1. The customer determines quality. 2. Improving quality requires the establishment of effective quality metrics. We must speak with data not just opinions. 3. People working within systems create quality through teamwork. 4. Quality is a moving target. It requires a commitment toward sustained (strategic and systematic) continuous improvement. 5. Prevention, not detection, is the key to producing high quality. We must design quality into processes and reduce variability. 6. Top Management must provide leadership and support for all (total) quality initiatives.
16

Innovators of Modern Quality Thinking

U.S. Quality Innovators and the Main Years of their Work:

Walter Shewhart (1920s -1940s) W. Edwards Deming (post WWII through 1980s) Joseph M. Juran (consultant post WWII through 1980s) Philip Crosby (1980s) Armand Feigenbaum (1970s - 1980s) Kaoru Ishikawa (post WWII - 1980s) Genichi Taguchi (1960s - 1980s) Shigeo Shingo (post WWII - 1980s)

Japanese Quality Innovators:

17

Walter A Shewhart

Pioneer of Modern Quality Control

recognized the need to separate variation into assignable and unassignable causes (defined in control.) founder of the control chart (e.g. X-bar and R chart). originator of the plan-do-check-act cycle. perhaps the first to successfully integrate statistics, engineering, and economics.
defined quality in terms of objective and subjective quality

objective quality: quality of a thing independent of people. subjective quality: quality is relative to how people perceive it. (value)

18

W. Edwards Deming

Studied under Shewhart at Bell Laboratories Contributions:

well known for helping Japanese companies apply Shewharts statistical process control.

Main Contribution is his Fourteen Points to Quality

(some key points below)

create constancy of purpose. cease mass production - build quality into products. drive out fear and build employee trust. break down departmental barriers (create win-win situations). seek long-term supplier relationship (end low cost bidding). eliminate numerical goals; abolish annual rating or merit system. eliminate slogans - they provide no value in terms of improving quality.

19

The Deming Chain Reaction (proposed W. Edwards Deming)

Improve Quality Greater Market Share (products with higher quality at less cost)

Costs decrease: (less rework, fewer mistakes, better use of material and equipment)

Stay In Business

Productivity Improves

Provide Jobs and More Jobs

20

Joseph M. Juran

Contributions
also well-known for helping improve Japanese quality. directed most of his work at executives and the field of quality management. developed the Juran Trilogy for managing quality:

Quality planning, quality control, and quality improvement.

enlightened the world on the concept of the vital few, trivial many which is the foundation for pareto charts.

21

Other US Quality Innovators

Philip Crosby (quality management)

Four absolutes of quality including:

#1- quality is defined by conformance to requirements. #2 - system for causing quality is prevention not appraisal. #3 - performance standard is zero defects, not close enough. #4 - measurement of quality is the cost of nonconformance

Armand Feigenbaum

Stressed a systems approach to quality (all organizations must be focused on quality) Costs of quality may be separated into costs for prevention, appraisal, and failures (e.g., scrap, warranty).

22

Kaoru Ishikawa

developed concept of true and substitute quality characteristics true characteristics are the customers view substitute characteristics are the producers view degree of match between true and substitute ultimately determines customer satisfaction. advocate of the use of the 7 tools (e.g., cause-and-effect diagram) advanced the use of quality circles (worker quality teams). developed concept of Japanese Total Quality Control quality first - not short term profits. next process is your customer. use facts and data to make presentations. respect for humanity as a management philosophy - full participation. cross-functional management.

23

Other Quality Innovators

Genichi Taguchi (1960s - 1980s)

quality loss function (deviation from target is a loss to society). Promoted the use of parameter design (application of Design of Experiments) or robust engineering.

Shigeo Shingo (post WWII - 1980s)

advocated the replacement of statistical process control with source inspection (control quality at the source, rather than through sampling inspections). set up poke-yoke devices (mistake proofing devices) such as sensors and monitors to identify defects at the point they occur. referred to his system as a zero defect approach because Zero Defects is the ultimate goal.
24