Meaning of Quality § Webster’s Dictionary § degree of excellence of a thing § American Society for Quality § totality of features and characteristics that satisfy needs § Consumer’s and producer’s perspective History (Cont..) w 1950’s: Deming and Juran’s introduction to Japan of Statistical Quality Control Techniques Quality Gurus w Walter Shewart n In 1920s, developed control charts n Introduced term “quality assurance” w W. Edwards Deming n Developed courses during World War II to teach statistical quality-control techniques to engineers and executives of companies that were military suppliers n After war, began teaching statistical quality control to Japanese companies w Joseph M. Juran n Followed Deming to Japan in 1954 n Focused on strategic quality planning Quality Gurus (cont.) § Armand V. Feigenbaum § In 1951, introduced concepts of total quality control and continuous quality improvement § Philip Crosby § In 1979, emphasized that costs of poor quality far outweigh cost of preventing poor quality § In 1984, defined absolutes of quality management—conformance to requirements, prevention, and “zero defects” § Kaoru Ishikawa § Promoted use of quality circles § Developed “fishbone” diagram § Emphasized importance of internal customer Deming Wheel: PDCA Cycle Meaning of Quality Total Quality Management w Commitment to quality throughout organization w Principles of TQM n Customer-oriented n Leadership n Strategic planning n Employee responsibility n Continuous improvement n Cooperation n Statistical methods n Training and education Basic Economic Quality Level Model TQM and… w … Partnering n a relationship between a company and its supplier based on mutual quality standards w … Customers n system must measure customer satisfaction w … Information Technology n infrastructure of hardware, networks, and software necessary to support a quality program Quality Improvement and Role of Employees w Participative problem solving n employees involved in quality management n every employee has undergone extensive training to provide quality service to Disney’s guests Quality Circle TQM in Service Companies w Principles of TQM apply equally well to services and manufacturing w Services and manufacturing companies have similar inputs but different processes and outputs w Services tend to be labor intensive w Service defects are not always easy to measure because service output is not usually a tangible item Cost of Quality w Cost of Achieving Good Quality n Prevention costs l costs incurred during product design n Appraisal costs l costs of measuring, testing, and analyzing w Cost of Poor Quality n Internal failure costs l include scrap, rework, process failure, downtime, and price reductions n External failure costs l include complaints, returns, warranty claims, liability, and lost sales Juran, J.M., “Planning for Quality” Prevention Costs w Quality planning costs n costs of developing and implementing quality management program w Product-design costs n costs of designing products with quality characteristics w Process costs n costs expended to make sure productive process conforms to quality specifications w Training costs n costs of developing and putting on quality training programs for employees and management w Information costs n costs of acquiring and maintaining data related to quality, and development of reports on quality performance Appraisal Costs w Inspection and testing n costs of testing and inspecting materials, parts, and product at various stages and at end of process w Test equipment costs n costs of maintaining equipment used in testing quality characteristics of products w Operator costs n costs of time spent by operators to gar data for testing product quality, to make equipment adjustments to maintain quality, and to stop work to assess quality Internal Failure Costs w Scrap costs n costs of poor-quality products that must be discarded, including labor, material, and indirect costs w Rework costs n costs of fixing defective products to conform to quality specifications w Process failure costs n costs of determining why production process is producing poor-quality products w Process downtime costs n costs of shutting down productive process to fix problem w Price-downgrading costs n costs of discounting poor-quality products—that is, selling products as “seconds” External Failure Costs w Customer complaint costs n costs of investigating and satisfactorily responding to a customer complaint resulting from a poor-quality product w Product return costs n costs of handling and replacing poor-quality products returned by customer w Warranty claims costs n costs of complying with product warranties w Product liability costs n litigation costs resulting from product liability and customer injury w Lost sales costs n costs incurred because customers are dissatisfied with poor quality products and do not make additional purchases Measuring and Reporting Quality Costs w Index numbers n ratios that measure quality costs against a base value n labor index l ratio of quality cost to labor hours n cost index l ratio of quality cost to manufacturing cost n sales index l ratio of quality cost to sales n production index l ratio of quality cost to units of final product Možné struktury nákladů v modelu PAF Trendy v modelu PAF Grafické znázornění monitorování nákladů na proces Seven Quality Control Tools w Pareto Analysis w Flow Chart w Check Sheet w Histogram w Scatter Diagram w SPC Chart w Cause-and-Effect Diagram Pareto Analysis Pareto Chart Flow Chart Check Sheet Histogram Scatter Diagram Control Chart Cause-and-Effect Diagram Baldrige Award w Created in 1987 to stimulate growth of quality management in United States w Categories n Leadership n Information and analysis n Strategic planning n Human resource n Focus n Process management n Business results n Customer and market focus Other Awards for Quality w National individual awards n Armand V. Feigenbaum Medal n Deming Medal n E. Jack Lancaster Medal n Edwards Medal n Shewart Medal n Ishikawa Medal w International awards n European Quality Award n Canadian Quality Award n Australian Business Excellence Award n Deming Prize from Japans American Customer Satisfaction Index (ACSI) w Measures customer satisfaction w Established in 1994 w Web site: www.acsi.org n Examples (in 2003) l Amazon.com scored 88 (highest in service) l Dell scored of 78 (highest in computer industry) l Cadillac scored 87 (highest in car industry) ISO 9000 w A set of procedures and policies for international quality certification of suppliers w Standards n ISO 9000:2000 l Quality Management Systems—Fundamentals and Vocabulary l defines fundamental terms and definitions used in ISO 9000 family w ISO 9001:2000 n Quality Management Systems—Requirements n standard to assess ability to achieve customer satisfaction w ISO 9004:2000 n Quality Management Systems—Guidelines for Performance Improvements n guidance to a company for continual improvement of its quality-management system Implications of ISO 9000 for U.S. Companies w Many overseas companies will not do business with a supplier unless it has ISO 9000 certification w ISO 9000 accreditation w ISO registrars w A total commitment to quality is required throughout an organization Statistical Process Control Beni Asllani University of Tennessee at Chattanooga Basics of Statistical Process Control w Statistical Process Control (SPC) n monitoring production process to detect and prevent poor quality w Sample n subset of items produced to use for inspection w Control Charts n process is within statistical control limits Variability w Random n common causes n inherent in a process n can be eliminated only through improvements in the system w Non-Random n special causes n due to identifiable factors n can be modified through operator or management action SPC in TQM w SPC n tool for identifying problems and make improvements n contributes to the TQM goal of continuous improvements Quality Measures w Attribute n a product characteristic that can be evaluated with a discrete response n good – bad; yes - no w Variable n a product characteristic that is continuous and can be measured n weight - length Applying SPC to Service w Nature of defect is different in services w Service defect is a failure to meet customer requirements w Monitor times, customer satisfaction Applying SPC to Service (cont.) w Hospitals n timeliness and quickness of care, staff responses to requests, accuracy of lab tests, cleanliness, courtesy, accuracy of paperwork, speed of admittance and checkouts w Grocery stores n waiting time to check out, frequency of out-of-stock items, quality of food items, cleanliness, customer complaints, checkout register errors w Airlines n flight delays, lost luggage and luggage handling, waiting time at ticket counters and check-in, agent and flight attendant courtesy, accurate flight information, passenger cabin cleanliness and maintenance Applying SPC to Service (cont.) w Fast-food restaurants n waiting time for service, customer complaints, cleanliness, food quality, order accuracy, employee courtesy w Catalogue-order companies n order accuracy, operator knowledge and courtesy, packaging, delivery time, phone order waiting time w Insurance companies n billing accuracy, timeliness of claims processing, agent availability and response time Where to Use Control Charts w Process has a tendency to go out of control w Process is particularly harmful and costly if it goes out of control w Examples n at the beginning of a process because it is a waste of time and money to begin production process with bad supplies n before a costly or irreversible point, after which product is difficult to rework or correct n before and after assembly or painting operations that might cover defects n before the outgoing final product or service is delivered Control Charts w A graph that establishes control limits of a process w Control limits n upper and lower bands of a control chart w Types of charts n Attributes l p-chart l c-chart n Variables l range (R-chart) l mean (x bar – chart) Process Control Chart Normal Distribution A Process Is in Control If … Control Charts for Attributes p-Chart p-Chart Example p-Chart Example (cont.) p-Chart Example (cont.) c-Chart c-Chart (cont.) c-Chart (cont.) Control Charts for Variables x-bar Chart x-bar Chart Example x- bar Chart Example (cont.) x- bar Chart Example (cont.) R- Chart R-Chart Example R-Chart Example (cont.) R-Chart Example (cont.) Using x- bar and R-Charts Together Control Chart Patterns Control Chart Patterns (cont.) Sample Size SPC with Excel SPC with Excel: Formulas Process Capability w Tolerances n design specifications reflecting product requirements w Process capability n range of natural variability in a process what we measure with control charts Process Capability Process Capability (cont.) Process Capability Measures Computing C[p ]Process Capability Measures Computing C[pk ]Factors