Managing Quality Chapter 5
5 Chapter Objectives Be able to: § Discuss the various definitions and dimensions of quality and why quality is important to operations and supply chains. § Describe the different costs of quality, including internal and external failure, appraisal, and prevention costs. § Describe what TQM is, along with its seven core principles. § Calculate process capability ratios and indices and set up control charts for monitoring continuous variables and attributes. § Describe the key issues associated with acceptance sampling, as well as the use of OC curves. § Distinguish between Taguchi’s quality loss function and the traditional view of quality. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 -2
5 Quality Defined § Quality – The characteristics of a product or service that bear on its ability to satisfy stated or implied needs; a product or service that is free of deficiencies. § Value perspective – A quality perspective that holds that quality must be judged, in part, by how well the characteristics of a particular product or service align with the needs of a specific user. § Conformance perspective – A quality perspective focused on whether or not a product was made or a service was performed as intended. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 -3
5 § § § § Eight Dimensions of Quality Performance Features Reliability Durability Conformance Aesthetics Serviceability Perceived Quality Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 -4
5 Quality Dimension Examples Table 5. 1 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 -5
5 Total Cost of Quality § Prevention costs – Costs an organization incurs to actually prevent defects from occurring to begin with. § Appraisal costs – Costs a company incurs for assessing its quality levels. § Internal failure costs – Costs caused by defects that occur prior to delivery to the customer. § External failure costs – Costs incurred by defects that are not detected until a product or service reaches the customer. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 -6
Total Cost of Quality 5 Traditional View Figure 5. 2 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 -7
Total Cost of Quality 5 Zero Defects View Figure 5. 3 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 -8
5 Total Quality Management - A managerial approach in which an organization is managed so that it excels in all quality dimensions that are important to customers. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 -9
5 Total Quality Management § § § § Customer focus Leadership involvement Continuous improvement Employee empowerment Quality assurance Strategic partnerships Strategic quality plan Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 - 10
5 Total Quality Management § Customer focus § Each employee has a customer whether internal or external to the company. § Leadership involvement § Must be ‘top’ down, throughout the company. § If not, major cause of TQM failures. § Continuous improvement § There is always room for improvement. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 - 11
5 Total Quality Management § Employee empowerment § Giving employees the responsibility for managing quality. § Quality assurance § Quality Function Deployment (QFD) discussed in Chapter 15 § Statistical quality control (SQC), also called statistical process control (SPC) Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 - 12
5 Total Quality Management § Supplier Partnerships § The commitment between firms and supply chain partners must be the same. § Strategic Quality Plan § Sets a broad set of objectives. § Should establish measurable goals for the shortterm. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 - 13
5 Process Capability Answers the Question: Can the process provide acceptable quality consistently? Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 - 14
5 Process Capability Ratio (Cp) – Measures whether or not a process is potentially capable of meeting certain quality standards Cp = Upper Tolerance Limit – Lower Tolerance Limit 6σ Where σ is the estimated standard deviation for the individual observations Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 - 15
5 Normal Distribution Figure 5. 4 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 - 16
5 Process Capability Values Figure 5. 5 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 - 17
5 Process Capability Index (Cpk) – Measures whether or not a process is capable of meeting certain quality standards and is centered between the specification limits. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 - 18
5 Six Sigma Quality To achieve Six Sigma quality, the variability of a process must be reduced to the point that the process capability ratio is greater than or equal to 2. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 - 19
5 Six Sigma Quality Figure 5. 6 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 - 20
5 Control Charts § Control Chart – A specialized run chart that helps an organization track changes in key measures over time. § Continuous variable – A variable that can be measured along a continuous scale. § Attribute – The presence or absence of a particular characteristic. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 - 21
5 Sampling § Sampling – Using carefully selected samples to get a fairly good idea of how well a process is working. § Good sample: § Every outcome has an equal chance of being selected into the sample. § The sample size is large enough to not be swayed by any single observation. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 - 22
5 Continuous Variable Measurements § Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 - 23
5 Control Charts § X chart - A specific type of control chart for a continuous variable that is used to track the average value for future samples. § R chart – A specific type of control chart for a continuous variable that is used to track how much the individual observations within each sample vary. § p chart – A specific type of control chart for attributes that is used to track sample proportions. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 - 24
5 Step 1 – Sampling the Process Observation Sample 1 2 3 4 5 1 136 137 144 141 138 2 143 138 140 139 3 140 141 144 137 135 4 139 140 141 139 141 5 137 138 143 140 138 6 142 141 140 139 138 7 143 141 143 140 8 139 141 140 136 9 140 138 143 141 139 10 139 141 142 140 136 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 - 25
Step 2 – Calculate the Mean and Range for each sample 5 Sample R 1 139. 2 8 2 140 5 3 139. 4 9 4 140 2 5 139. 2 6 6 140 4 7 141. 4 3 8 139 5 9 140. 2 5 10 139. 6 6 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 - 26
Step 3 – Calculate control limits 5 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 - 27
Step 3 – Calculate control limits 5 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 - 28
5 Step 4 – Plot the Data Sample R 11 141. 2 8 12 142 9 13 144 12 14 140 5 15 139. 6 4 16 140. 8 5 Figure 5. 8 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 - 29
5 Sampling by Attribute § Gonzo Pizza is interested in tracking the proportion (%) of late deliveries § Like before, you take several samples of say, 50 observations each when things are “typical” § For each sample, you calculate the proportion of late deliveries and call this value p. For example: p = (8 late)/(50 deliveries) = 0. 16 § Average all of the 15 sample proportions. For example: Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 - 30
5 Sampling by Attribute § Calculate the standard deviation for the p chart as follows: Where n = size of each sample = 50 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 - 31
5 Sampling by Attribute Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 - 32
5 Sampling by Attribute § Although text says to go ahead with control charts, consider that it is probably too early to develop them since the process is not yet in control (i. e. , late deliveries are too high a percentage at present). § A more practical approach would be: § First, fix the more obvious problem(s) § Then take new samples § Then put in place control charts Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 - 33
5 Acceptance Sampling Some definitions § Acceptable quality level (AQL) § Maximum defect level for 100% customer acceptance § Lot tolerance percent defective (LTPD) § Highest defect level customer will tolerate § Consumer’s risk § Probability of accepting a bad lot § Producer’s risk § Probability of rejecting a good lot § Operating characteristics (OC) curve § Probability of accepting a lot given the actual fraction defective in the entire lot and the sampling plan being used Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 - 34
5 Producer’s and Consumer’s Risk Figure 5. 10 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 - 35
Traditional View of the Cost of Variability 5 There is no failure cost associated with units that fall within the tolerance limits, while units outside the tolerance limits immediately result in failure costs. Figure 5. 12 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 - 36
Taguchi’s Quality Loss Function 5 Any deviation from the target value results in some failure cost. As long as there is variability in the process, there is room for improvement. Figure 5. 13 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 - 37
5 ISO 9000 Family § ISO 9000 - A family of standards supported by the International Organization for Standardization. § Goals: § Meet the customer’s quality requirements and applicable regulatory requirements. § Enhance customer satisfaction. § Achieve continual improvement of performance in pursuit of these objectives. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 - 38
Managing Quality Case Study Dittenhoefer’s Fine China Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 -
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