Module 6

Quality

Quality
What is quality
Lean SC

Servqual

Six Sigma

TQM
Readings
Ch 8: Quality

Ch 8: Quality

What is Quality

Quality defined
Working definition
user satisfaction
Goods or services that satisfy the needs and expectations of
the user.

Associated with..
Well conceived + well designed + well made + well priced + well
serviced = satisfactory quality

Practical approach for OM quality:

quality is the result of a sequence of activities embodied in a process within
the business, therefore:
possible to map the process and monitor and measure the outputs
and to use this information to identify where and how the process itself can be improved.

Major figures
involved in the development of quality

Quality dimensions relevant to OM

Performance
Reliability usage period before failure
Durability performance under hard wear and frequent use
Maintainability reparability after failure

Features extras
Conformance meeting standards/specs
Warranty public promise of faith in product
Service intangible: speed, courtesy competence
Aesthetics look and feel
Perceived quality based on customers complete
experience
Price value for money, includes all above elements

Quality cost concepts

Costs of failure
Internal failure costs
in production
facility
External failure costs
after delivery to
customer

Costs of
controlling
quality
Prevention costs
first time right
Appraisal costs checks and audits

Quality variation sources in

manufacturing
Chance variation (system is in statistical control)
6 sources:
1. People
2. Machines
3. Materials
4. Methods/processes
5. Environment
6. Measurement
Statistical control objectives:
. Select processes capable of producing required quality with minimum defects
. Monitor process to produce quality

Assignable variation (not in control)

Variation due to specific reason
One of the above 6 sources moved out of control region
Statistical analysis will indicate this

Chance variability pattern

(determined by statistical analysis)
CENTER

Within
control
limits
SPREAD

SHAPE

SHAPE = Bell-shaped (normal) curve

CENTER () = mean or average =

x
-----n

SPREAD: Two methods: Range and standard

deviation ()

Control charts
and their role in measuring variability
Measures process capability continuously

Variations:
__ chart
Run
X (X bar) and R chart
p-chart

Control charts
and their role in measuring
variability
Exercise
Work with
a control
chart

1. Calculate mean & SD of your data

2. Make mean your centre line (CL)
3. Calculate upper control Limit
(UCL) & Lower control limit as 3
SDs from the mean (CL). This
means that statistically, 99.73% of
data will fall between UCL & LCL
4. Create a Chart to show LCL, UCL,
CL and actual data
Hint: Make LCL, UCL and CL and
actual data series in a line chart.

Date

Reading
1-Apr

12

2-Apr

11

3-Apr

15

4-Apr

11

5-Apr

10

6-Apr

13

7-Apr

10

8-Apr

9-Apr

15

10-Apr

16

11-Apr

18

12-Apr

14

13-Apr

10

14-Apr

15-Apr

10

16-Apr

17-Apr

10

18-Apr

11

19-Apr

13

20-Apr

14

21-Apr

12

22-Apr

15

23-Apr

14

24-Apr

15

25-Apr

13

26-Apr

15

Have a look a this video later to see the worked example27-Apr

28-Apr
https://www.youtube.com/watch?v=zvp8qmH3Eos
29-Apr
30-Apr

9
13
8
12

Other variability
management/measurement tools
Pareto analysis
Recognises that it is often the case that 80% of failures are due to 20% of problems and therefore tries to
find those 20% and solve them first
Histograms
used to represent this information in visual form;
Cause and effect diagrams
(fishbone charts or Ishikawa diagrams) which are used to identify the effect and work backwards,
through symptoms to the root cause of the problem;
Stratification
identifying different levels of problems and symptoms using statistical techniques applied to each layer;
Check sheets
structured lists or frameworks of likely causes which can be worked through
systematically. When new issues are found they are added to the list;
Scatter diagrams
used to plot variables against each other and help identify where there is a
correlation or other pattern;
Control charts:
use SPC information to start the analytical process off, asking why these errors

Sampling
(because you often cant test
everything)
Type
100% inspection
Acceptance sampling

Risk allocation
Consumers Risk accepting a bad lot
Producers Risk rejecting a good lot

Reasons for sampling

Testing product destructive
Short of time for 100% inspection
Expensive
Human error

Sampling conditions
Produced under similar/identical conditions
Random sample lot
Homogeneous lot size
Large batch inspection

Quality standards
ISO9000 (the quality standard
standard)
International Quality
Standards applicable to
any business, incl. service organizations
Third party registration
Principles:
Customer
focus

Continual
improvement

Factual
approach to
decision
making

Leadership

System
approach to
management

Synergistic
supplier
relationships

People
involvement

Process
approach

Quality through Benchmarking

Comparison with best in class

Steps:

Select process to benchmark

Identify organisation best in class
Study benchmark organisation
Analyse the data

Often connected to standards or

methodologies (eg. SCOR model for SCs)
https://www.scor.com/en/

Quality in the design process

Quality and services

Much of the early changes in thinking on quality took place in

manufacturing but it soon became clear that the lessons applied equally
in services. In many cases, quality is even more important; first,
because service contains many tangible components and no-one values
poorly cooked or served food or bedrooms which are not cleaned
properly. But perceptions of service go beyond this to the overall
experience and the likelihood of returning.

The EFQM Excellence Model

http://www.efqm.org/the-efqmexcellence-model
The (European Framework
for Quality Management) EFQM
Excellence Model is a non-prescriptive business excellence
framework for organizational management systems, promoted by
EFQM (formerly known as the European Foundation for Quality
Management) and designed for helping organizations in their drive
towards being more competitive. (Wikipedia)

The SERVQUAL methodology..

Ask relevant questions
The SERVQUAL questionnaire (Berry,
Parasuruman, and Zeithaml) covers these five
dimensions using 22 questions on:

Tangibles - physical appearance

Reliability - dependability, accurate performance
Responsiveness - promptness and helpfulness
Assurance - competence, courtesy, credibility, and
security
Empathy - easy access, good communications, and
customer understanding

The SERVQUAL methodology

Identify gaps between perceptions
and expectations
Word of mouth
communications

Personal
needs

Past
experience

Expected service
Gap 5
Perceived
service

Customer
Gap 1

Gap 3

Service
delivery

Management
perceptions of
Service quality
customer
specifications
expectations
Gap 2

External
Gap 4communications
to customers

The SERVQUAL methodology

Parasuraman
et al
identified five
gaps that can lead
The gaps
represent
addressable
to service quality failures.
problems
These five gaps to be addressed are
Gap 1. Not understanding the needs of the
customers
Gap 2. Being unable to translate the needs of the
customer into a service design that can address
them
Gap 3. Being unable to translate the design into
service expectations or standards that can be
implemented.
Gap 4. Being unable to deliver the services in line
with specifications
Gap 5. Creating expectations that cannot be met
(gap between customers expectations and actual

Ch 8: Quality

TQM

Total Quality Management (TQM)

An organisational culture of participation of all members in

improving processes, products, service and culture they work

in
(APICS)

Performa
nce
measures

Committe
d and
involved
managem
ent

Basic
Conce
pts
Supplier
partnersh
ip

Continuo
us
Process
Improvem
ent (CPI)

Focus on
customer

Involvem
ent of
total
workforce

Typical organisational TQM

characteristics
Focus on customer satisfaction
Involvement of senior management forming a quality
council
Employee Quality Circles
Establish core values to define company quality culture
Quality statement in vision, mission and policy
statement
Establish quality plan to achieve goals and objectives
Continuous Process Improvement (CPI)
Supplier partnerships
Performance Measures used to:
identify CPI, evaluate alternative processes, set & compare with targets, take
corrective actions, evaluate employees, identify trends

The links between MRP II, JIT & TQM

MRP II*
Managing the
flow of material
with resources
to achieve
customer
service
PLAN

MRP II
Plan labour,
Material, and
recourses

JIT*
Eliminate waste
and non value
added activity
by improving
processes and
reducing lead
time

TQM
Customer
satisfaction

DO

JIT
Produce goods
and
services

CUSTOMER
Sets the
standard
And produces
demand

TQM
Meets or exceeds
customer expectations

iscussed in more detail elsewhere in this Unit

TQM and customer focus

Soft factors gaining
Hard factors SPC
Commitment to TQM;
Charts, Ishikawa
understanding customer
Diagrams, Flow diagrams,
Requirement, cultural
other data for
Change, training,
Constant
measuring
enthusiasm
Interaction between
Hard, soft, product,
Process factors
Product quality
Providing designs and
Specifications to
customer requirements

Process quality
The ability to provide
right, first time, cost
effective, speedy and
reliable delivery
requirements

The Total Quality Offering to Customers

TQM-associated paradigms

Ch 8: Quality

Lean Supply Chain

Definition and aspects
The Lean Supply Chain is a system of interconnected and
interdependent partners that operate in unison to accomplish supply
chain objectives.

Lean Supply Chain

Steps to introducing it
1. Eliminate all waste in the SC, so that only value remains
2. Consider advancements in technology to improve the SC
3. Make customer usage visible to all members of the supply
chain
4. Reduce lead time
5. Create a level flow/level load
6. Use Pull systems, like Kanban
7. Increase velocity and throughput, and reduce variation
8. Collaborate and use process discipline
9. Focus on total cost of fulfilment
This brings the basis of efficient, effective Supply Chains together
into a single checklist

http://cerasis.com/2015/05/06/lean-supply-chain/

Six Sigma
Definition and phases
Six Sigma is a disciplined, data-driven approach and methodology for
eliminating defects (driving toward six standard deviations between the
mean and the nearest specification limit) in any process from
manufacturing to transactional and from product to service (Wiki).
1.
Recognize
2. Define

8. Integrate

7.
Standardize

3. Measure

6. Control

4. Analyze

5. Improve

Six Sigma Quick Guide

http://patelmiller.com/what-we-do/operatingmodel/leansixsigma/usefultools/