Operations Management Revision Notes : Quality Management Quality is important.

It can literally be a matter of life and death (Chernobyl) or just incredibly expensive (Intels $47 m chip recall). Quality can be understood as product based !hat the customer experiences" or process based" !hereby the company does thin#s ri#ht first time and avoids the cost of corrective action. $chievin# exceptional %uality is rare but the results can be incredible & 'apanese autoplants produce ()* defects per million parts compared to (+ , per million for -. plants. Total Quality Management (TQM) /Q0 is not about inspections. It1s a loose collection of ideas built around a culture of %uality. It emphasises continual improvement and measurement of process results. /his can involve loo2in# outside your business (if you select suppliers on cost !hy be surprised if %uality isn1t #reat3). 4mployees need to be hi#hly trained" motivated and empo!ered to ma2e decisions. In particular companies need to drive out fear so employees !ill as2 %uestions and ma2e su##estions. 5emin# even su##ested that numerical tar#ets and %uotas !ere a bad idea" since mana#ers usually mana#e to the tar#ets rather than the actual #oal they1re tryin# to achieve. 6inally top mana#ement has to buy into this approach" believe in it and ma2e it happen. Statistical Process Control $ll systems produce variance. /he 2ey is to differentiate bet!een special cause variance and common cause variance. Common cause variance is simply !hat you1d expect from the system and only improvements to the system !ill reduce it. 7pecial cause variance can be traced to particular events and directly addressed. 8rocess control charts sho! !here results are !ithin or !ithout limits. /he avera#e value of the variable is a central limit. -pper and 9o!er control limits are then set at a standard number of standard deviations a!ay from this.
$cceptable -nacceptable

-pper limit Central limit 9o!er limit

Capability is about !hether or not the variance in a system is acceptable. It is calculated as upper tolerance limit & lo!er tolerance limit : + times standard deviation (six si#ma) ;hat this means is *.4 defects per million parts. 5emin# still feels this is missin# the point as it doesn1t #enerate the re%uired culture shift of continual improvement. Problems it! TQM /Q0 re%uires !or2ers to put in a lot of extra effort and ma2es them responsible for thin#s !hich they !ere not responsible for previously. <o!ever it doesn1t necessarily re!ard them for this" essentially brea2in# the !a#e=effort relationship. It also re%uires !or2ers to be more flexible and reduces !or2er po!er accordin#ly. $n $/ .erney study of /Q0 in the -. found that >,? of implementations fail. 0ostly do!n to no trainin#" too much hype" unrealistic expectations" mixed messa#es and bad faith.