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Quality Improvement in the Modern Business Environment

Intense competition (price, value, features nearly everything related to the products and services) Knowledge of customer needs,requirements and expectations will allow the company to succeed in the marketplace. Quality has be come one of the most important consumer decision factors in the selection among competing products and services..

Definitions of Quality
Fitness for use (Juran, 1988) Inversely proportional to variability (Douglas C. Montgomery, if variability (referring to unwanted, harmful variability) in the important characteristics decreases, the quality of the product increases). Conformance to requirements (Crosby, 1979 the requirements may not fully represent customer expectations, "doing it right the first time) Nonfaulty systems (Deming) Quality is a customer determination which is based on the customers actual experince with the product or service,measured against his or her requirements stated or unstated,conscious or merely sensed,technically operational or entirely subjective- and always representing a moving target in a competitive market. (Feigenbaum) A subjective term for which each person has his or her own definition. The characteristics of a product or service that bear on its ability to satisfy stated needs. ( The American Society for Quality Control)

Dimensions of Quality
The quality of a product can be evaluated in several ways. These components can be differentiated in several ways. According to Garvin (1987); Performance (will the product do the intended job?) Reliability (how often does the product fail?) Durability(how long does the product last?) Serviceability(how easy is it to repair the product?) Aesthetics (what does the product look like?) Features (what does the product do?) Perceived Quality (what is the reputation of the company/product?) Conformance to standards ( is the product made exactly as the designer intended?)


Management of Quality

Examples of Quality Dimensions

(Product) Automobile
Everything works, fit & finish Ride, handling, grade of materials used Interior design, soft touch

1. Performance

(Service) Auto Repair

All work done, at agreed price Friendliness, courtesy, Competency, quickness Clean work/waiting area

2. Aesthetics

3. Special features Gauge/control placement Location, call when ready Cellular phone, CD Computer diagnostics player

What is your definition of quality? Dimensions of service quality!!!

Customer: Anyone who receives /affected by the product or process External: affected by the product, (purchasers, public, other organizations external company) Internal: within the production organization departments are customers of each other Products: in generic sense, refers to both goods and services Process: A process takes inputs and performs value-added activities on those inputs to create an output.

Quality Improvement
Variation is present in any natural process. No two products or occurences are exactly alike. Variability has significant customer impact. Sources of this variability include differences in materials, differences in the performance and operation of the manufacturing equipment, and differences in the way the operators perform their tasks

Quality Improvement
Quality improvement is the reduction of variability in processes and products. Alternatively, quality improvement is also seen as waste reduction since excessive variability in processes often results in waste. Since variability can be described in statistical terms, we use statistical methods for.

Quality Characteristics
Every product processes a number of elements that jointly describe what the user or consumer thinks of quality. These parameters are called quality characteristics (a.k.a. critical-to-quality(CTQ) characteristics). CTQ characteristics may be of several types. Physical-length, weight, voltage, viscosity Sensory-taste, appearance, color Time Orientation -reliability, durability, serviceability Note that different types of CTQ characteristics can relate to the dimensions of quality.

Quality Engineering
Quality engineering is the set of operational, managerial, and engineering activities that a company uses to ensure that the quality characteristics of a product are at the nominal or required levels. Data on q. characteristics can be classified as variables or attributes (cont. vs. discrete) Q. characteristics are often evaluated relative to specifications (desired measurements for q. characteristic- nominal value with an allowable range- USL and LSL/ upper and lower specification limitsobtained as a result of the design prosess) Non-conformity: failure to meet one or more specs Defects: non-conformities which are serious enough to significantly affect the safe or effective use of the product

Productivity vs. Quality

To be productive, one must work efficiently and operate in a manner that best the utilizes the available resources. Quality focuses on being effective(achieving the intended results or goals while meeting the customers requirements). Quality concentrates not only on doing things right (being productive), but on doing the right things right (being effective).

History of Quality Paradigms

The Evolution of Quality

Total quality management (TQM) is a strategy for implementing and managing quality improvement activities on an organization wide basis. Some general reasons for the lack of conspicuous success of TQM include (1) lack of top down, high-level management commitment and involvement; (2) inadequate use of statistical methods and insufficient recognition of variability reduction as a prime objective; (3) general as opposed to specific business-results-oriented objectives; and (4) too much emphasis on widespread training as opposed to focused technical education.

Quality Advocates
The work of many dedicated people contributed to today s modern quality thinking : Walter A. Shewhart W. Edwards Deming Joseph M. Juran Philip B. Crosby Armand Feigenbaum Kaoru Ishikawa Genichi Taguchi

Walter A. Shewhart(1920-1940 s)
Pioneer of modern quality control Control chart development and statistical contributions through Bell Labs (Shewhart charts: X-bar an R-charts) Defined objective vs subjective quality Laid the foundation for modern quality theory with the postulate:
It seems reasonable to believe that there is an objective state of control, making possible the prediction of quality within limits even though the causes of variability are unknown.

W. Edwards Deming
Master who developed Japan s road map to quality, inspired by Shewhart Deming Chain Reaction

Focuses on the management involvement, continuous improvement ,statistical analysis, goal setting and communication.

W. Edwards Deming
Defines Seven deadly diseases: Lack of constancy of purpose Emphasis on short-term profits Evaluation of performance merit rationing or annual review Mobility of management Management by use of visible figures Excessive medical costs Excessive costs of liability

W. Edwards Deming- 14 points of his Philosophy

1. Create and publish a statement of aims and purposes of the company. The management must demonstrate constantly their commitment to this statement. Aims must focus on improvement, research and innovation Learn the new philosophy, top management and everybody and adopt this philosophy emphasizing quality Understand the purpose of inspection for improvement of processes and reduction of costs. Do not rely on inspection to control the quality. Inspection can only sort out defects, which is late! Understand that quality results from prevention of these defects End the practice of awarding business on the basis of price tag alone. Improve constantly and forever the system of production and service. Focus on continuous improvement. Institute training. Practice modern training methods and invest in training


4. 5. 6.

W. Edwards Deming- 14 points of his Philosophy

7. 8. 9. 10. 11. 12. Institute leadership and supervision, focusing on continuous improvement Drive out fear, create trust. Create a climate for innovation Break down barriers between functional areas of business, teamwork is essential Eliminate targets, slogans, numeric goals for the workforce. These are generally counterproductive Eliminate numerical quotas . Instead, learn and institute methods of improvement Remove barriers that discourage people from doing their jobs. Management must listen to suggestions, comments and complaints of the employees. Encourage education and self-improvement for everyone. Take action to accomplish the transformation

13. 14.

Joseph M. Juran
Placed a major role in Japanese success story Introduced the quality management element Less focused than Deming on statistical techniques Emphasis is on organizational change and managerial breakthrough Thinks of quality as a triology: planning, control, improvement

Philip B. Crosby(1980 s)

Quality is defined as conformance to requirements System for causing quality is prevention, not appraisal Zero defects The measurement of quality is the price of non-conformance

Armand Feigenbaum(1970-1980 s )
Concept of company-wide quality control Emphasizes organizational structure and systems approach Defines TQC : Effective system For integrating the quality development, quality maintenance and quality improvement efforts of various groups in an organization To allow for full customer satisfaction

Kaoru Ishikawa Provided great leadership in shaping Japanese quality movement Associated with the development and universal education in seven basic tools of quality control Ishikawa s concept of total quality control contains six fundamental principles: Quality first- not the short term profits Consumer orientation- not producer orientation Next process is your customer Using facts,data and statistical methods Respect for humanity as a management philosophy, full participatory management

Genichi Taguchi (1960- 1980 s) Emphasizes engineering approach and stresses the need for the minimal performance variation (noise) Defines quality loss function (any target specification causes loss) Experiment design

Statistical Methods for Quality Improvement

Three major areasare: Statistical process control (SPC) monitoring for unusual sources of variability (online) Design of experiments (DOX) -helpful in discovering the key variables influencing the quality characteristics of interest in the process (off-line). Acceptance sampling-closely connected with inspection and testing of product, classification of a sample of units selected at random from a larger batch and making a decision about disposition of the lot

Statistical process controli s a collection of tools that when used together can result in process stability and variability reduction. SPC is an on-linequality control tool. Control charts are used for process monitoring and variability reduction.

Design of Experiments
Experimental design is an approach to systematically varying the controllable input factors in the process and determine the effect these factors have on the output responses. Experimental designs are off-line quality tools. Crucial for variability reduction

Acceptance Sampling
Acceptance sampling is the inspection and classification of a sample of the product selected at random from a larger batch or lot and the ultimate decision about disposition of the lot. Two types: 1. Outgoing inspection-follows production 2. Incoming inspection-before use in production Items in a rejected lot are typically either scrapped or recycled, or they may be reworked or replaced with good units, which is called the rectifying inspection.

Management Aspects of Quality Improvement

Effective management of quality requires the execution of three activities: 1. Quality Planning 2. Quality Assurance 3. Quality Control and Improvement

Six Sigma
Use of statistics & other analytical tools has grown steadily for over 80 years
Statistical quality control (origins in 1920, explosive growth during WW II, 1950s) Operations research (1940s) TQM (Total Quality Management) movement in the 1980s Reengineering of business processes (late 1980s) Six-Sigma (origins at Motorola in 1987, expanded impact during 1990s to present)

Focus of Six Sigma is on Process Improvement with an Emphasis on Achieving Significant Business Impact
A process is an organized sequence of activities that produces an output that adds value to the organization All work is performed in (interconnected) processes Easy to see in some situations (manufacturing) Harder in others Any process can be improved An organized approach to improvement is necessary The process focus is essential to Six Sigma

Six Sigma
A disciplined and analytical approach to process and product improvement Specialized roles for people; Champions, Master Black belts, Black Belts, Green Belts Top-down driven (Champions from each business) BBs and MBBs have responsibility (project definition, leadership, training/mentoring, team facilitation) Involves a five-step process (DMAIC) :
Define Measure Analyze Improve Control

DMAIC Solves Problems by Using Six Sigma Tools

DMAIC is a problem solving methodology Use this method to solve problems:
Define problems in processes Measure performance Analyze causes of problems Improve processesremove variations and nonvalue-added activities Control processes so problems do not recur

Six Sigma
DMAIC is closely related to the Shewhart cycle (variously called the Deming cycle, or the PDCA cycle)