Heizerch06 RR BW

Outline
♦ Global Company Profile: Motorola

♦ Quality and Strategy
Operations ♦ Defining Quality
♦ Implications of Quality
Management ♦
♦
Malcolm Baldrige National Quality Award
Cost of Quality
♦ International Quality Standards
♦ Total Quality Management
Managing Quality ♦
♦
Continuous Improvement
Employee Empowerment
Chapter 6 ♦
♦
Benchmarking
Just-in-Time (JIT)
Some additions and deletions to this slide set have been made by Ömer Yağız. ♦ Taguchi Concepts
♦ Knowledge of TQM Tools
PowerPoint presentation to accompany Operations © 2001 by Prentice Hall, Inc. , Upper Saddle River, N.J. 07458 PowerPoint presentation to accompany Operations © 2001 by Prentice Hall, Inc. , Upper Saddle River, N.J. 07458
Management, 6E (Heizer & Render) 6-1 Management, 6E (Heizer & Render) 6-2
Outline Learning Objectives

♦ Tools of TQM
♦ Check sheets When you complete this chapter, you should
♦ Scatter Diagrams be able to :
♦ Cause-and-Effect Diagram ♦Identify or Define:
♦ Pareto Charts
♦ Quality
♦ Process Charts
♦ Histogram ♦ Malcolm Baldrige National Quality Award
♦ The Role of Inspection ♦ Demings, Juran, and Crosby
♦ When and where to Inspect ♦ Taguchi Concepts
♦ Source Inspection
♦ Service Industry Inspection
♦ Inspection of Attributes vs Variables
♦ TQM in Services
Learning Objectives - continued To Make the Quality Focus Work

When you complete this chapter, you should
be able to : Motorola:
♦Explain: ♦ Aggressively began a worldwide education
♦ Why quality is important program to be sure that employees understood
♦ Total Quality Management (TQM)
quality and statistical process control
♦ Pareto charts ♦ Established goals
♦ “stretch goal” - a goal which is very ambitious
♦ Process charts
♦ Quality robust products ♦ Established extensive employee participation and
♦ Inspection
employee teams
♦ originator of the “six-sigma” approach to quality
♦ winner of the Baldrige national quality award
1
MOTOROLA Co. --A famous
What is a stretch goal ?
illustration of stretch goal
A stretch goal is an ambitious goal. “Six Sigma Quality” concept of Motorola:
Sometimes it is called a “breakthrough Motorola set the following stretch goal in
objective.” Stretch goals force an 1987.
organization to think radically different to “Improve product and services quality ten times by 1989,
encourage major improvements, as well as and at least one hundred fold by 1991. Achieve six sigma
capability by 1992. With a deep sense of urgency, spread
incremental ones. Stretch goals can be set dedication to quality to every facet of the corporation, and
for all areas of the company, including achieve a culture of continuous improvement to assure total
customer satisfaction. There is only one ultimate goal: zero
manufacturing, sales, accounting, product defects--in everything we do.”
design, etc.
MOTOROLA Co. --A famous Ways in Which Quality Can

illustration of stretch goal contd... Improve Profitability
Concept of six-sigma quality: Sales Gains
Shrinking process variation (as indicated by ♦ Improved response
6 sigma) to half of the design tolerance so ♦ Higher Prices
that only 3.4 parts out of 1 million are ♦ Improved reputation
Improved Increased
defective. Quality Profits
At Motorola, six sigma became part of the Reduced Costs
♦ Increased productivity
common language of all employees. To them ♦ Lower rework and scrap
it meant “near perfection”, even if some did costs
not understand the statistical details. ♦ Lower warranty costs
Flow of Activities Necessary to Organizational Practices

Achieve Total Quality Management
♦Leadership
♦Organizational Practices ♦Mission statement
♦Effective operating procedures
♦Quality Principles
♦Staff support
♦Training
♦Employee Fulfillment
Yields: What is important and what is to be
accomplished
♦Customer Satisfaction
2
Quality Principles Employment Fulfillment
♦Customer focus
♦Empowerment
♦Continuous improvement
♦Organizational commitment
♦Employee empowerment
Yields: Employee attitudes that they can
♦Benchmarking accomplish what is important and what is to
♦Just-in-time be accomplished
♦Tools of TQM
Yields: How to do what is important and what
is to be accomplished
Customer Satisfaction Definitions of Quality
♦Winning orders ♦ ASQ: the totality of features and

♦Repeat customers characteristics of a product or service that
Yields: An effective organization with a bear on its ability to satisfy needs
competitive advantage ♦ User-Based: What consumer says it is
♦ Manufacturing-Based: Degree to which a
product conforms to design specification
♦ Product-Based: Level of measurable product
characteristic
♦Product-based definition: quality is a function

DAVID GARVIN’
GARVIN’S DEFINITIONS of a specific, measurable variable and
OF QUALITY differences in the quality reflect differences
in quantity of some product attribute (
♦Transcendent definition : quality is number of knots on carpets, number of
absolute and universally recognizable; as cylinders in an auto engine, percentage of
such it can not be defined precisely. Used by silk in a shirt or blouse). CAUTION: Quality
lay people. Not useful for operational is mistakenly related to cost..The higher the
purposes. (Mercedes vs. Şahin) cost, the higher the quality. NOT ALWAYS
TRUE. A product need not be expensive to
be considered a quality product.
Mükemmellik-temelli tanım
Ürün-temelli tanım
3
♦Manufacturing-Based Definition: Quality is an
♦User -Based Definition: This is a customer- outcome of engineering and manufacturing
based definition. Quality is determined by practice. Therefore; quality is “conformance
what the customer wants. Quality is defined to specifications”. Specifications are targets
as “fitness for intended use,” or how well the and tolerances determined by designers of
product/service performs its intended products and services. This is a key
function. Concepts of “internal” and definition of quality for the technical aspects
“external” customer important. of quality planning and control.
Kullanıcı-temelli tanım
Üretim-temelli tanım
♦Value-Based Definition: Quality is defined in SOME QUALITY DEFINITIONS

terms of costs and prices: A quality product
is one that provides performance at an ♦ QUALITY MEANS “FITNESS FOR USE”.
acceptable price or conformance at an ♦ QUALITY IS MEETING OR EXCEEDING CUSTOMER
acceptable cost. From this perspective, a EXPECTATIONS.
quality product is one that is as useful as ♦ QUALITY IS INVERSELY PROPORTIONAL TO
competing products and is sold at a lower VARIABILITY.
price or one that offers greater usefulness or ♦ QUALITY IS “THE TOTALITY OF FEATURES AND
satisfaction at a comparable price. ( A no- CHARACTERISTICS OF A PRODUCT OR SERVICE
name PC vs. an IBM brand; a Nissan vs. THAT BEAR ON ITS ABILITY TO SATISFY NEEDS”
Volvo.) (ANSI/ASQ DEFINITION)
Değer-temelli tanım
Eight Principle Dimensions of

Quality for Goods Eight Principle Dimensions of
♦ Performance (operation) Quality for Goods
♦ Features
♦Performance: A product’s primary operating
♦ Reliability
Quality characteristics. Will the product do the
♦ Durability intended job? (Car example -- acceleration,
♦ Conformance braking distance, steering, maneuverability.)
♦ Serviceability
♦ Aesthetics Performans, birincil (temel) işlevler
♦ Perceived quality
4
Eight Principle Dimensions of Eight Principle Dimensions of
Quality for Goods Quality for Goods
♦Reliability: probability of a product’s
♦Features: Characteristics of secondary
surviving over a specified period of time
importance for the functioning of a product.
under stated conditions of use. Consistency
In other words, “the bells and whistles” of a
of performance over time. How often does
product. ( Power steering, antilock brakes,
the product fail? (Ability to start on cold
tape/CD deck, A/C, reclining seats.)
days, frequency of failure of various
components).
İkincil özellikler Güvenilirlik

♦Conformance: Degree to which physical and
♦Durability: Amount of use one gets from a performance characteristics of a product
product before it physically deteriorates or match preestablished standards. Is the
until replacement is preferable. How long product made exactly as the designer
does the product last ? (Corrosion intended? (fit and finish, aerodynamic
resistance, wear of seat cover material, wiper properties-drag coefficient, freedom from
blades motor, AC compressor, etc.) noise, fuel consumption.)
Dayanıklılık Uygunluk (spesifikasyonlara)

♦Serviceability: The speed, courtesy, and ♦Aesthetics: How a product looks, feels,
competence of maintenance and repair. How sounds, tastes, or smells. What does the
easy is it to service and repair the product? product look like? (Color, instrument panel
(Access to spare parts, the number of design, placement of controls, and “feel of
kilometers between major maintenance the road”.)
service, ease and expense of service.) Estetik özellikler
Bakım / onarım kolaylığı
5
Eight Principle Dimensions of Service Quality Attributes
Quality for Goods
Reliability Responsiveness
♦Perceived Quality: Subjective assessment of
Tangibles Competence
quality resulting from image, advertising, or
brand names. What is the reputation of the Under- Access
company or its product? (Brand image of standing
car, repair history reported by trade Security Courtesy
magazines or friends.) © 1995 Corel Corp.
Tüketici tarafından algılanan kalite Credibility Communication
Malcolm Baldrige National Quality

Importance of Quality Award
♦ Costs & market ♦ Established in 1988 by the U.S. government
share Market Gains
♦ Designed to promote TQM practices
Reputation
♦ Company’s
reputation
Volume ♦ Some criteria
Price
♦ Product ♦ Senior executive leadership; strategic p lanning;
Improved Increased
liability management. of process quality
Quality Profits
♦ International Lower Costs ♦ Quality results; customer satisfaction
implications Productivity ♦ Past winners
Rework/Scrap
♦ Motorola;Corning Inc.; Ritz-Carlton Hotels; AT&T;
Warranty
Eastman Chemical.
Other Well-known Awards Costs of Quality

♦Deming Prize (Japan) ♦ Prevention costs - reducing the potential for
defects(training, quality improvement programs)
Established in 1951 in honor of Deming, the ♦ Appraisal costs - evaluating products (testing, labs,
quality guru who helped Japan achieve its inspectors)
famous quality level ♦ Internal failure - of producing defective parts or
♦European Foundation for Quality service before delivery to customers (scrap, rework,
Management (EFQM) downtime of machinery)
Established in 1988 by the European ♦ External costs - occur after delivery (returned
product, liabilities, loss of goodwill, warranty repair,
Commission costs to society)
6
EC Environmental Standard
International Quality Standards ISO 14000
♦ ISO 9000 series (Europe/EU)
♦ Common quality standards for products sold in Core Elements:
Europe (even if made in U.S. or elsewhere)
♦ Environmental management
♦ ISO 14000 series (Europe/EU) ♦ Auditing
♦ Environmental management standard ♦ Performance evaluation
♦ standards for recycling, labeling etc. ♦ Labeling
♦ ANSI/ASQC Q90 series (ISO 9000 in the U.S.) ♦ Life-cycle assessment
Traditional TOTAL QUALITY MANAGEMENT

Quality Process (Manufacturing)
(TQM)
Customer Marketing Engineering Operations Encompasses entire organization, from
supplier to customer
Specifies Interprets Designs Produces Stresses a commitment by management to
Need Need Product Product have a continuing company-wide drive
Defines Plans
toward excellence in all aspects of products
Quality Quality and services that are important to the
lity
is
driv
en! customer.
Qua omer Monitors
t
cus Quality
Achieving
Deming’s Fourteen Points
Total Quality Management
1. Create constancy of purpose
Effective Customer
Satisfaction 2. Adopt philosophy of prevention
Business
Employee Attitudes 3. Cease mass inspection
Fulfillment (e.g., Commitment)
How to Do
4. Select a few suppliers based on quality
Quality
Principles 5. Constantly improve system and workers
Organizational What to Do
Practices 6. Institute worker training in SPC
7
Deming’s Fourteen Points Concepts For an Effective TQM
7. Instill leadership among supervisors Program
8. Eliminate fear among employees
9. Eliminate barriers between departments ♦Continuous improvement
10. Eliminate slogans ♦Improvement Model : PDCA
11. Remove numerical quotas ♦Employee empowerment
12. Enhance worker pride ♦Benchmarking
13. Institute vigorous education programs on ♦Just-in-time (JIT)
quality improvement ♦Taguchi concepts
14. Implement these 13 points (Just do it !) ♦Knowledge and use of TQM tools
Continuous Improvement “ A never-ending journey”
♦ Represents continual improvement of

process & customer satisfaction CONTINUOUS IMPROVEMENT
♦ Involves all operations
& work units
♦ Other names Dr. Ömer Yağız
Department of Business Administration
♦ Kaizen (Japanese) Eastern Mediterranean University
♦ Zero-defects
♦ Six sigma
Prepared for MGMT 407 - Total Quality Management
© 1984-1994 T/Maker Co.
“IMPROVE CONSTANTLY AND FOREVER

THE SYSTEM OF PRODUCTION AND
“UNLESS YOU CHANGE THE PROCESS, WHY SERVICE. IMPROVEMENT IS NOT A ONE-
WOULD YOU EXPECT THE RESULTS TO TIME EFFORT. MANAGEMENT IS
CHANGE?” OBLIGATED TO CONTINUALLY LOOK FOR
WAYS TO REDUCE WASTE AND IMPROVE
The President of Texas Instruments
QUALITY.”
Defense Systems and Electronic Group W. Edwards Deming
8
“ THE STARTING POINT FOR IMPROVEMENT
IS TO RECOGNIZE THE NEED. THIS COMES
“ KAIZEN STRATEGY IS THE SINGLE MOST FROM RECOGNITION OF A PROBLEM. IF NO
IMPORTANT CONCEPT IN JAPANESE PROBLEM IS RECOGNIZED, THERE IS NO
MANAGEMENT--THE KEY TO JAPANESE RECOGNITION OF THE NEED FOR
COMPETITIVE SUCCESS. KAIZEN MEANS IMPROVEMENT. COMPLACENCY IS THE
‘ON-GOING’ IMPROVEMENT INVOLVING ARCH-ENEMY OF KAIZEN. THEREFORE,
EVERYONE--TOP MANAGEMENT, KAIZEN EMPHASIZES PROBLEM-
MANAGERS, AND WORKERS.” AWARENESS AND PROVIDES CLUES FOR
Masaaki Imai IDENTIFYING PROBLEMS.”
Masaaki Imai
PROCESS MANAGEMENT Process Management contd...
♦What is a process ? ♦To apply process management techniques,

A sequence of activities that is intended to processes must be
achieve some result, typically to create 1. repeatable - process must recur over
added value for a customer. time
♦Two types of processes: 2. measurable - information can be
♦ core processes (those that drive the creation of obtained by measurement
goods and services)
♦ support processes (those that are critical to
production and delivery)
CONTINUOUS IMPROVEMENT
Continuous Improvement
(KAIZEN)
Kaizen is the name given by the Japanese to
continuous improvement. Continuous ♦Kaizen refers to improvement of both
improvement really means “continuous processes and people.
incremental improvement.” ♦In fact Kaizen philosophy aims at improving
Kai change all aspects of an organization all the time.
zen good ♦Good is never good enough; kaizen is a
Kaizen means making changes for the better never-ending journey to excellence.
on a continual, never-ending basis.
9
Two Elements of Kaizen Overview of the concept of Kaizen
(Imai)
♦ There are two elements that construct KAIZEN,
improvement/change for the better and 1. Kaizen value system --- continual
ongoing/continuity. Lacking one of those elements improvement of all things, at all levels, all the
would not be considered KAIZEN. For instance, the time, forever.
expression of "business as usual" contains the
element of continuity without improvement. On the 2. Role of top management --- top management
other hand, the expression of "breakthrough" is responsible for establishing Kaizen as the
contains the element of change or improvement overriding corporate strategy and
without continuity. KAIZEN should contain both communicating this commitment to all levels
elements. of the organization and allocating the
resources necessary for Kaizen to work.
Overview of the concept of Kaizen Overview of the concept of Kaizen

(Imai) contd... (Imai) contd...
4. Role of supervisors --- responsible for
3. Role of middle management --- responsible applying the Kaizen approach in their
for implementing the Kaizen policies functional roles; developing plans for
established by top management; carrying out the Kaizen approach at the
establishing, maintaining and improving functional level; improving communication at
work standards; ensuring that employees the workplace; maintaining morale;
receive the training necessary to understand providing coaching for teamwork activities;
and implement Kaizen, and ensuring that soliciting Kaizen suggestions from
employees learn how to use problem solving employees and making Kaizen suggestions.
and improvement tools.
Overview of the concept of Kaizen Overview of the concept of Kaizen

(Imai) contd... (Imai) contd...
5. Role of employees --- responsible for 6. Kaizen and quality --- In a TQM environment
participating in Kaizen through teamwork quality is defined by customers. Regardless
activities, making Kaizen suggestions, of how customers define quality, it can
engaging in continuous self-improvement always be improved and it should be,
activities, continually enhancing job skills continually.
through education and training, and
continually broadening job skills through
cross-functional training.
10
KAIZEN KAIZEN
♦ The following excerpt is taken from the It is very natural that people will propose some kind of change in
their own work place, when they become unsatisfied with their
Kaizen Institute website (www.kaizen- present conditions. Some of the improvements could be carried out
institute.com). It sums up the philosophy right away. Perhaps, the boss won't even notice them. However,
when approval is required, several kinds of responses from the boss
and approach of KAIZEN. could have taken place. The ideal situation is that the boss
♦ "Not a day should go without some kind of improvement being encourages their subordinates to carry out their ideas. The boss
made somewhere in the company. When KAIZEN is adapted in then appreciates the efforts or gives recognition. That's what people
organizations and management perspectives, however, it is easier expect when they propose something. The positive response given
to talk about it than to implement it. by the boss will then develop trust with the subordinates and
stimulate other improvements. Cumulatively, this will create
momentum for continuing improvement.”
The Wet Blanket List THE WET BLANKET LIST

1. I am too busy to study it
However, life in the organization is not as easy. The boss 2. It's a good idea, but the timing is premature
could ask you a silly question like: "it is not broken, why 3. It is not in the budget
should we change it" or "the procedure is fine with me, why 4. Theory is different from practice
should we change it?". From your perspective, you know that 5. Isn't there something else for you to do ?
if you change it, the boss will blame you. The boss just did 6. I think it doesn't match corporate policy
not want to give you a try, with a lot of reasons and/or no 7. It isn't our business; let someone else think
reasons. You could not do anything anymore, "the boss is about it
always right“ like the saying goes. There are so many bosses 8. Are you dissatisfied with your work ?
like that. 9. It's not improvement, it's common sense
10. I know the result, even if we don't do it
The book KAIZEN talks about the list called "The Wet Blanket
11. I will not be held accountable for it
List". The bosses should encourage their subordinates, but in 12. Can't you think of a better idea ?
a real life, the wet blankets put out the "fire" of improvement
suggestions. Here is the list of wet blankets:
THE WET BLANKET LIST Ten Basic Tips for KAIZEN Activities
Yes, I heard them from my boss, you may say; “As you know by now, it is not easy to implement
however, reflect on yourself before you blame your the KAIZEN philosophy to where the culture is not
boss. Your subordinates may also hear them from solid to adopt it. KAIZEN Institute can help to
you frequently. In an inefficient organization, change the way of thinking of your people and the
everybody tends to throw wet blankets everywhere. culture and make a difference. Here is the first
You could also add more wet blankets from your own advice from us for you to start with, the list of basic
vocabulary, the list could be endless. tips for KAIZEN to have the first step of KAIZEN
implementation.” - KAIZEN INSTITUTE
11
Basic Tips for Kaizen Activities Concept of Gembakaizen
1. Discard conventional fixed ideas.
2. Think of how to do it, not why it cannot be done.
3. Do not make excuses. Start by questioning
current practices. In manufacturing industry, there are three major activities
4. Do not seek perfection. Do it right away even if for directly related to earning money: developing, producing and
only 50% of target. selling products. Without these activities, the company
5. Correct it right away, if you make a mistake. cannot exist. Therefore, in a broad sense, GEMBA means the
6. Do not spend money for KAIZEN, use your sites of these three major activities. In a narrower context,
wisdom. however, GEMBA means the place where the products are
7. Wisdom is brought out when faced with hardship. made. The word is usually used in this narrower context,
8. Ask 'WHY?" five times and seek root causes. since production sites have been one of the business arenas
9. Seek the wisdom of ten people rather than the most neglected by management.
knowledge of one.
10. KAIZEN ideas are “infinite."
Concept of Gembakaizen Concept of Gembakaizen
Managers seem to write production off as only a secondary In the service industries, GEMBA is where the customers
means to earn money, and usually place far more emphasis come into contact with the services offered. In the hotel
on such sectors as financial management, marketing and business, for instance, GEMBA is everywhere: the lobby, the
sales, and product development. When GEMBA or production dining room, guest rooms, the receptionist's desk, check-in
sites do become a focus of management attention, though, counters, and the concierge station. At banks, tellers are
they can be turned into a utopia capable of making the working in GEMBA, as are loan officers receiving applicants.
company far more successful and profitable. The same goes for employee's working desks in offices and
for telephone operators sitting in front of switchboards. Thus,
GEMBA spans a multitude of offices and administrative
functions.
Concept of Gembakaizen Kaizen Checklists
Now you have a good understanding of the words, KAIZEN Kaizen is about continual improvement of
and GEMBA. people, processes, procedures, and any
other factors that affect quality. An effective
♦ GEMBAKAIZEN is KAIZEN activities that take place in GEMBA.
♦ GEMBAKAIZEN is to make continuous improvement at the
way to identify problems that represent
real place, where the action is going on, and that can make opportunities for improvement is to use a
your organization better. (Source: Kaizen Institute Web Page) checklist that draws attention to those
factors that are most likely in need of
improvement. The factors ---next..
12
EFQM
EFQMQUALITY MODEL
EXCELLENCE MODEL
Kaizen Checklists contd...
HOW CAN THIS BE IMPROVED ?
Factors which may need improvement:
1. personnel 9. software
2. work techniques 10. tools
3. work methods 11. materials
4. work procedures 12. plant layout
5. time 13. production levels
6. facilities 14. inventory
7. equipment 15. paradigms
8. systems 16. paradigms (mindset)
FIVE W’
W’s and ONE H contd..
FIVE W’
W’s and ONE H
♦ Who ---Who is doing it? Who should be
Using the five W’s and One H encourages employees to doing it?
look at a process and ask questions.
♦ What --- What is being done? What should
be done?
WHO WHAT WHERE ♦ Where --- Where is it being done ? Where
should it be done ?
♦ When --- When is it being done ? When
should it be done ?
♦ Why --- Why is it being done ? Why do it that
WHEN WHY HOW
way ?
♦ How --- How is it being done ? How should it
be done ?
Five - M Checklist
Man
Machines Material
(Operator)
BOOKS ABOUT KAIZEN & GEMBA

KAIZEN
Methods Measurement
The Five-M Checklist is an approach that focuses attention

PowerPoint presentation to accompany Operations
on the6E (Heizer
Management, five& Render) are present© 2001
key factors which6-77 inbyany
Prentice Hall, Inc. , Upper Saddle River, N.J. 07458
process. PowerPoint presentation to accompany Operations
Management, 6E (Heizer & Render) 6-78 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N.J. 07458
13
Concepts for an Effective TQM
Shewhart’s PDCA Model
Program
CONTINUED FROM SLIDE 44
♦Continuous improvement
4.Act 1.Plan
♦Improvement Model : PDCA Implement Identify the
the plan improvement and
♦Employee empowerment (Quality Circles) make a plan
♦Benchmarking 3.Check 2.Do

Is the plan Test the
♦Just-in-time (JIT) working plan
♦Taguchi concepts
♦Knowledge and use of TQM tools
PDCA Cycle (Deming Wheel) Employee Empowerment

PUKÖ DÖNGÜSÜ
♦ Getting employees involved in product &
PDCA Cycle (Deming Wheel)
process improvements
4. Institutionalize
1. Plan a change
aimed at
♦ 85% of quality problems are due to process &
the change or
improvement. material
abandon or do
it again. Planla ♦ Techniques © 1995 Corel Corp.
Önlem al 4. Act 1. Plan

♦ Support workers
♦ Let workers make decisions
3. Check 2. Do
♦ Build teams & quality circles
Kontrol et Uygula
3. Study the results; did 2. Execute the
it work?
PowerPoint presentation to accompany Operations
change.
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Quality Circles Benchmarking

♦ Group of 6-12 employees from same Selecting best practices to use
work area as a standard for performance
♦ Meet regularly to solve work-related ♦ Determine what to benchmark
problems ♦ Form a benchmark team
♦ 4 hours/month ♦ Identify benchmarking partners
♦ Facilitator trains ♦ Collect and analyze benchmarking information
& helps with ♦ Take action to match or exceed the benchmark
meetings ♦ XEROX Corp. example.
Management, 6E (Heizer & Render) © 1995 Corel Corp. 6-83 Management, 6E (Heizer & Render) 6-84
14
Resolving Customer Complaints
Just-in-Time (JIT)
Best Practices
♦Make it easy for clients to complain Relationship to quality:

♦Respond quickly to complaints ♦ JIT cuts cost of quality (scrap, rework costs
decrease)
♦Resolve complaints on the first contact
♦ JIT improves quality (errors caught earlier)
♦Use computers to manage complaints ♦ Better quality means less inventory and better,
♦Recruit the best people for customer service easier-to-employ JIT system (safety stocks
jobs decreased)
Just-in-Time (JIT) Just-In-Time (JIT) Example

♦ ‘Pull’ system of production/purchasing
♦ Customer starts production with an order
♦ Involves ‘vendor partnership programs’ to
improve quality of purchased items
Work in process inventory level
♦ Reduces all inventory levels (hides problems)
♦ Inventory hides process & material problems
♦ Improves process & product quality
Unreliable Capacity
Scrap
Vendors Imbalances
Just-In-Time (JIT) Example Taguchi Concepts

♦ Most quality problems are the result of poor
product and process design.
Reducing inventory reveals ♦ Experimental design methods to improve product &
problems so they can be solved. process design
♦ Identify key component & process variables affecting
product variation
♦ Taguchi Concepts
♦ Quality robustness (can be produced uniformly and
consistently under adverse–unfavorable-manufacturing and
environmental conditions)
♦ Quality loss function (a mathematical function that identifies
Unreliable Capacity
Scrap all costs related to poor quality)
Vendors Imbalances
♦ Target-oriented quality specifications (produce parts and
PowerPoint presentation to accompany Operations © 2001 by Prentice Hall, Inc. , Upper Saddle River, N.J. 07458
products at the target dimension or characteristic)
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15
Quality Robustness Quality Loss Function
♦Shows social cost ($) of deviation from target
value, i.e. poor quality
♦ Ability to produce ♦ customer dissatisfaction, warranty and service costs,
products uniformly
© 1995 Corel Corp.
internal inspection, repair and scrap costs
regardless of ♦ all are called COSTS TO SOCIETY
manufacturing ♦Assumptions
conditions ♦ Most measurable quality characteristics (e.g., length,
weight) have a target value
♦ Put robustness in
♦ Deviations from target value are undesirable
House of Quality
matrices besides
functionality © 1984-1994 T/Maker Co.
Quality Loss Function Quality Loss Function Graph
Loss = (Actual X - Target)2 • (Cost of Deviation)

♦Equation: L = D2C
♦ L = Loss to society ($) Loss Greater deviation,
♦ D2 = Deviation (actual – target)2
more people are
dissatisfied, higher
♦ C = Cost of the deviation at the specification limit cost
X
LSL Target USL
Lower (upper) Measurement

specification limit
Quality Loss Function Example Quality Loss Function Solution
♦L = D2C = (X - Target)2C
The specifications for the
♦ L = Loss ($); D = Deviation; C = Cost; X= Actual
diameter of a gear are dimension
25.00 ± 0.25 mm.
♦4.00 = (25.25 - 25.00)2C
If the diameter is out of
♦ Item scrapped if greater than 25.25
specification, the gear (USL = 25.00 + 0.25) with a cost of $4.00
must be scrapped at a
♦C = 4.00 / (25.25 - 25.00)2 = 64
cost of $4.00. What is the
loss function? ♦L = D2 • 64 = (X - 25.00)264
♦ Enter various X values to obtain Loss & plot
© 1984-1994 T/Maker Co.
16
Target value
Tolerance Target Specification Example
specification limits 0.500+- 0.020 cm
cost to repair during warranty period = $50
2
L= (X - T) C C=50/.0004 = 125,000 LOSS A study found U.S. consumers preferred Sony TV’s
TAGUCHI LOSS FUNCTION DEMO
350
made in Japan to those made in the U.S. Both factories
X
0.45
T
0.5
D=X-T
-0.05
D
2
0.0025
C
125000
LOSS
312.5
300
312,5 312,5
used the same designs & specifications. The difference
0.46
0.47
0.5
0.5
-0.04
-0.03
0.0016
0.0009
125000
125000
200
112.5
250
in quality goals made the difference in consumer
preferences.
200 200 200
0.48 0.5 -0.02 0.0004 125000 50 LOSS
0.49 0.5 -0.01 0.0001 125000 12.5 150
0.5 0.5 0 0.0000 125000 0 100

112,5 112,5
Japanese factory
0.51 0.5 0.01 0.0001 125000 12.5
0.52 0.5 0.02 0.0004 125000 50 50 50 50
0.53
0.54
0.5
0.5
0.03
0.04
0.0009
0.0016
125000
125000
112.5
200
0
12,5
0
12,5
0,45 0,46 0,47 0,48 0,49 0,5 0,51 0,52 0,53 0,54 0,55
(Target-oriented)
0.55 0.5 0.05 0.0025 125000 312.5
U.S. factory
(Conformance-
oriented)
Quality Loss Function; Distribution of Tools of TQM

Products Produced ♦Tools for generating ideas
High loss Quality Loss Function (a)
Unacceptable
♦ Check sheet
Loss (to Target-oriented
producing Poor quality yields more ♦ Scatter diagram
organization, product in the
customer, and
Fair
“best” category ♦ Cause and effect diagram
Good
society)
Low loss
Best Target-oriented quality ♦Tools to organize data
brings products toward
the target value ♦ Pareto charts
Conformance-oriented ♦ Flow charts
Frequency quality keeps product
within three standard
deviations
♦Tools for identifying problems
Distribution of ♦ Histograms
Lower Target Upper
specifications for product
Specification
produced (b) ♦ Statistical process control chart
17

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Outline

♦ Global Company Profile: Motorola

Outline Learning Objectives

Learning Objectives - continued To Make the Quality Focus Work

MOTOROLA Co. --A famous Ways in Which Quality Can

Flow of Activities Necessary to Organizational Practices

Customer Satisfaction Definitions of Quality

♦Winning orders ♦ ASQ: the totality of features and

♦Product-based definition: quality is a function

♦Value-Based Definition: Quality is defined in SOME QUALITY DEFINITIONS

Eight Principle Dimensions of

Eight Principle Dimensions of Eight Principle Dimensions of

Eight Principle Dimensions of Eight Principle Dimensions of

Tüketici tarafından algılanan kalite Credibility Communication

Malcolm Baldrige National Quality

Other Well-known Awards Costs of Quality

Traditional TOTAL QUALITY MANAGEMENT

Continuous Improvement “ A never-ending journey”

♦ Represents continual improvement of

“IMPROVE CONSTANTLY AND FOREVER

PROCESS MANAGEMENT Process Management contd...

♦What is a process ? ♦To apply process management techniques,

Overview of the concept of Kaizen Overview of the concept of Kaizen

Overview of the concept of Kaizen Overview of the concept of Kaizen

The Wet Blanket List THE WET BLANKET LIST

Concept of Gembakaizen Concept of Gembakaizen

Concept of Gembakaizen Kaizen Checklists

BOOKS ABOUT KAIZEN & GEMBA

The Five-M Checklist is an approach that focuses attention

♦Benchmarking 3.Check 2.Do

PDCA Cycle (Deming Wheel) Employee Empowerment

Önlem al 4. Act 1. Plan

Quality Circles Benchmarking

♦Make it easy for clients to complain Relationship to quality:

Just-in-Time (JIT) Just-In-Time (JIT) Example

Just-In-Time (JIT) Example Taguchi Concepts

Quality Loss Function Quality Loss Function Graph

Loss = (Actual X - Target)2 • (Cost of Deviation)

Lower (upper) Measurement

Quality Loss Function Example Quality Loss Function Solution

0.5 0.5 0 0.0000 125000 0 100

Quality Loss Function; Distribution of Tools of TQM

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