OPRE 6260 OPERATIONS MANAGEMENT Notes 8 Quality Management 2001 Total Quality Management (TQM): A philosophy that involves everyone in an orga- nization in a continual eﬀort to improve quality and achieve customer satisfaction. There are two key philosophies in this approach. 1. Continuous improvement : Never-ending push to improve. 2. Customer satisfaction : meeting or ex- ceeding customer expectations. TQM approaches as follows : 1. Find out what customers want Use of surveys, focus groups, interviews, or some other technique that integrates the cus- tomer’s voice in the decision-making process. 2. Design a product or service that will meet (or exceed) what customer want. Make it easy to use and easy to produce. 3. Design a production process that facilitates doing the job right the ﬁrst time. 4. Keep track of results, and use those to guide improvement in the system. Never stop trying to improve. 5. Extent these concepts to suppliers and to distribution. A number of other elements of TQM are im- portant : 1. Continual improvement : Philosophy that seeks to make never-ending improvements to the process of converting inputs into outputs. The philosophy seeks to improve all factors re- lated to the process of converting inputs into outputs. It covers equipment, methods, materials, and people. Kaizen : Japanese term for continuous im- provement. 2. Competitive benchmarking : This in- volves identifying companies or other organiza- tions that are best at something and studying how they do it to learn how to improve your operation. The company need not be in the same line of business as yours. Examples: Xerox used mail-order company, L.L. Bean, to benchmark order ﬁlling Examples: 1. American Express is well-known for its ability to get customers to pay up quickly. 2. Disney world : for its employees commitment. 3. Federal Express : for its speed. 4. McDonald’s : for its consistency. 5. Xerox : for its benchmarking techniques. Reverse engineering refers to carefully dismantling a competitor’s product in order to improve one’s own product. Ford used this approach successfully in its design of the Taurus automobile. They assessed about 400 features of competitor products They copied or adapted or enhanced more than 300 of them. Examples : Audi’s accelerator pedal, Toyota’s fuel-gauge accuracy, and BMW’s tire and jack storage. Marriott Hotel: They designed of its line of economy hotels. 3. Employee empowerment: Giving workers the responsibility for improvements and the au- thority to make changes to accomplish them. It provides strong motivation for employees. This puts decision making into the hands of those who are closer to the job and have con- siderable insight into problems and solutions. 4. Team approach: The use of teams for problem solving and to achieve consensus takes advantage of group synergy, gets people in- volved, and promotes a spirit of cooperation and shared values among employees. 5. Decisions based on facts rather than opinions: Management gathers and analyzes data as a basis for decision making. 6. Knowledge of tools: Employees and man- agers are trained in the use of quality tools. 7. Suppliers quality: Suppliers must be in- cluded in quality assurance and quality improve- ment eﬀorts so that their process are capa- ble of delivering quality parts and materials in timely manner. Quality at the source : The philosophy of making each worker responsible for the quality of his or her work. Do it right If isn’t right, ﬁx it Workers are expected to provide goods or ser- vices that meet speciﬁcations and to ﬁnd and correct mistakes that occur. Each worker become a quality inspector for his or her work. Each worker certiﬁes that the product meets the quality standards. Suppliers are partners in the process, and long- term relationship are encouraged. This gives suppliers a vital stake in providing quality goods and services. Suppliers, too, are expected to provide quality at the source, thereby reducing or eliminating the need to inspect deliveries from suppliers. PROBLEM SOLVING : Problem solving is one of the basic procedures of TQM. In order to be successful, problem-solving ef- forts should follow a standard approach. An important aspect of problem solving in the TQM approach is eliminating the cause so that the problem does not reoccur. TQM approach users think of problems as opportunities for improvement. PROCESS IMPROVEMENT : Process improvement is a systematic approach to improving a process. It involves documen- tation, measurement, and analysis for the pur- pose of improving the functioning of a process. Typical goals of process improvement include increasing customer satisfaction, achieving higher quality, reducing waste, reducing cost, increas- ing productivity, and speeding up the process. The Plan-Do-Study-Act Cycle PDSA : A framework for improvement activi- ties. PDSA cycle also referred to as the Shewhart cycle or Deming wheel. It is the conceptual basis for continuous im- provement activities. There are four basic steps in the PDSA cycle: 1. Plan : Begin by studying the current pro- cess. Document that process. Then collect data to identify problems. Next survey data and develop a plan for improvement. Specify measures for evaluating the plan. 2. Do : Implement the plan, on a small scale if possible. Document any changes made dur- ing this phase. Collect data systematically for evaluation. 3. Study : Evaluate the data collection during the do phase. Check how closely the results match the original goals of the plan phase. 4. Act : If the results are successful, standard- ize the new method and communicate the new method to all people associated with the pro- cess. Implement training for the new method. If the results are unsuccessful, revise the plan and repeat the process or cease this project. TOOLS There are number of tools that an organiza- tion can use for problem solving and process improvement. The tools aid in data collection and interpre- tation. The tools provide the basis for decision mark- ing. Basic quality tools. 1. Check Sheets : A tool for recording and organizing data to identify a problem 2. Flowchart : A diagram of the steps in pro- cess. A ﬂowchart can help identifying possible points in a process where problems occur. 3. Scatter Diagrams : A graph that shows the degree and direction of relationship be- tween two variables. 4. Histogram : A chart of an empirical fre- quency distribution. 5. Pareto analysis : Technique for classifying problem areas according to degree of impor- tance, and focusing on the most important. 6. Control Chart : A statistical chart of time- ordered values of a sample statistic. 7. Cause-and eﬀect diagram : Used to search for the causes of a problem; also called ﬁshbone diagram 8. Run charts : Tool for tracking results over a period of time. Methods For Generating Ideas Brainstorming : Technique for generating a free ﬂow of ideas. Quality Circles : Groups of workers who met to discuss ways of improving products or pro- cess. The circle comprise a number of workers who get together periodically to discuss ways of im- proving products and processes. Quality circles are usually less structured and more informal than teams involved in continu- ous improvement. Interviewing : Technique for identifying prob- lems and collecting information. Internal problem may require interviewing em- ployees. External problems may require interviewing ex- ternal customers. Ideas for improvement can come from : re- search and development, customers, competi- tors, and employees. Benchmarking : Process of measuring perfor- mance against the best in the same or another industry. The benchmarking approach : 1. What organization does it the best ? 2. How do they do it ? 3. How do we do it now ? 4. How can we change to match or exceed the best? Its purpose is to establish a standard against which performance is judged, and to identify a model for learning and improving. The benchmarking process usually involves the following steps: 1. Identify a critical process usually that needs improvement (Example : order entry, distribu- tion, service after sale). 2. Identify an organization that excels in the process, preferably the best. 3. Contact the benchmark organization, visit, and study the benchmarking activity. 4. Analyze the data. 5. Improve the critical process at your own organization Identify an organization that excels in the pro- cess, preferably the best. Example : Xerox Corporation uses many benchmarks Procter & Gamble : For quality process Florida Power and Light, Toyota and Fuji Xerox : For high-volume Production Kodak and Cannon : For billing collection American Express : For research and devel- opment AT & T and Hewlett-Packard : For distribu- tion L.L.Bean and Hershey Foods : For daily Scheduling Reference: Production/Operations Management by William J. Stevenson, Sixth Edition, Irwin/McGraw- Hill, 1999.
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