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Total Quality Management

Production
Production Management
Management

BM 325

Sabaragamuwa University of Sri Lanka


Quality is a Journey,
Contents
not a Destination
 Meaning of Quality
 Total Quality Management
 Strategic Implications of TQM
 TQM in Service Companies
 Cost of Quality
 Quality Control Tools
 Awards for Quality
Meaning of Quality
➨ Fitness for purpose or use

➨ Conformance to specified requirements

➨ The totality of features and characteristics


of a product or service that bears on its
ability to satisfy the stated and/or implied
needs
Meaning of Quality:
Total Quality Management

 Principles of TQM
 Customer-oriented
 Leadership
 Strategic planning
 Employee responsibility
 Continuous improvement
 Cooperation
 Statistical methods
 Training and education
Strategic Implications of
TQM

 Strong leadership
 Goals, vision, or mission
 Operational plans and policies
 Mechanism for feedback
TQM in Service Companies
 Principles of TQM apply equally well to services and
manufacturing

 Services and manufacturing companies have similar


inputs but different processes and outputs

 Services tend to be labour intensive

 Service defects are not always easy to measure


because service output is not usually a tangible item
Quality Attributes in
Service
 Benchmark
 “best” level of quality
achievement one
company or
companies seek to
achieve
 Timeliness
 how quickly a service
is provided “quickest, friendliest, most
accurate service
available.”
Cost of Quality

 Cost of Achieving Good Quality


 Prevention costs
 Costs incurred during product design
 Appraisal costs
 Costs of measuring, testing, and analyzing
 Cost of Poor Quality
 Internal failure costs
 Include scrap, rework, process failure, downtime,
and price reductions
 External failure costs
 Include complaints, returns, warranty claims,
liability, and lost sales
Prevention Costs
 Quality planning costs  Training costs
 costs of developing and  costs of developing and
implementing quality putting on quality training
management program
programs for employees
 Product-design costs and management
 costs of designing  Information costs
products with quality
characteristics  costs of acquiring and
 Process costs maintaining data related
to quality, and
 costs expended to make
sure productive process development of reports on
conforms to quality quality performance
specifications
Appraisal Costs

 Inspection and testing


 costs of testing and inspecting materials, parts, and
product at various stages and at the end of a
process
 Test equipment costs
 costs of maintaining equipment used in testing
quality characteristics of products
 Operator costs
 costs of time spent by operators to gar data for
testing product quality, to make equipment
adjustments to maintain quality, and to stop work to
assess quality
Internal Failure Costs
 Scrap costs  Process downtime costs
 costs of poor-quality products
that must be discarded,
 costs of shutting down
including labor, material, and productive process to fix
indirect costs problem
 Rework costs  Price-downgrading costs
 costs of fixing defective
products to conform to quality  costs of discounting poor-
specifications quality products—that is,
 Process failure costs selling products as
 costs of determining why “seconds”
production process is
producing poor-quality
products
External Failure Costs
 Customer complaint costs  Product liability costs
 costs of investigating and  litigation costs
satisfactorily responding to a resulting from product
customer complaint resulting
from a poor-quality product liability and customer
injury
 Product return costs
 Lost sales costs
 costs of handling and replacing
poor-quality products returned  costs incurred
by customer because customers
 Warranty claims costs are dissatisfied with
 costs of complying with poor quality products
product warranties and do not make
additional purchases
Measuring and Reporting
Quality Costs
 Index numbers
 ratios that measure quality costs against a
base value
 labor index
 ratio of quality cost to labor hours
 cost index
 ratio of quality cost to manufacturing cost
 sales index
 ratio of quality cost to sales
 production index
 ratio of quality cost to units of final product
Seven Quality Control Tools

Check Lists Pareto Principle


Flow Charts

Histogram or Bar Graph


Scatter Plots

Cause and Effect / Fishbone Diagram Control Charts


Pareto Analysis

 The Pareto principle suggests that most effects


come from relatively few causes

 Effort aimed at the right 20% can solve 80% of


the problems. Double (back to back) Pareto
charts can be used to compare 'before and after'
situations. General use, to decide where to
apply initial effort for maximum effect.
3-17
Percent from each cause

10
20
30
40
50
60
70

0
Po
W or
ro De
ng si
di gn
(64)

m
De en
fe si
ct on
iv s

(13)
M e
ac pa
hi r ts
ne

(10)
ca
O
pe libr
ra at
to io

(6)
re ns
De rr
fe or
ct s
iv (3)
e
Su m

Causes of poor quality


rfa at
er
ce ia
(2)

ab ls
ra
si
on
s
(2)
Pareto Chart
Flow Chart

 Pictures, symbols or text coupled with lines,


arrows on lines show direction of flow.

 Enables modeling of processes.

 problems/opportunities and decision points etc.

 Develops a common understanding of a process


by those involved.
Flow Chart

Start/
Finish Operation Operation Decision Operation

Operation Operation

Decision Start/
Finish
Check Sheet
 Data recording form that has been designed to
readily interpret results from the form itself.
 It needs to be designed for the specific data it is
to gather.
 Used for the collection of quantitative or
qualitative repetitive data.
 Adaptable to different data gathering situations.
Minimal interpretation of results required.
 Easy and quick to use.
Check Sheet

COMPONENTS REPLACED BY LAB


TIME PERIOD: 22 Feb to 27 Feb 2002
REPAIR TECHNICIAN: Bob

TV SET MODEL 1013


Integrated Circuits ||||
Capacitors |||| |||| |||| |||| |||| ||
Resistors ||
Transformers ||||
Commands
CRT |
Histogram
 Graphic summary of variation in a set of data.

 A graph in which the continuous variable is clustered


into categories and the value of each cluster is
plotted to give a series of bars as above.

 Without using some form of graphic this kind of


problem can be difficult to analyze, recognize or
identify
Histogram

20

15

10

0
1 2 6 13 10 16 19 17 12 16 2017 13 5 6 2 1
Scatter Diagram

 A scatter plot is effectively a line graph with no line


 the point intersections between the two data sets are plotted
but no attempt is made to physically draw a line.
 The Y axis is conventionally used for the characteristic
whose behavior we would like to predict. Use, to define the
area of relationship between two variables.
Scatter Diagram

X
Control Chart
 Method of Statistical Process Control (SPC).

 Upper and lower control and tolerance limits are


calculated for a process and sampled measures
are regularly plotted about a central line between
the two sets of limits.

 The plotted line corresponds to the stability/trend


of the process. Action can be taken based on
trend rather than on individual variation.
Control Chart

24
UCL = 23.35
21
Number of defects

18 c = 12.67

15

12
9

6
LCL = 1.99
3
2 4 6 8 10 12 14 16
Sample number 3-28
Cause-and-Effect Diagram

 Method for analyzing process dispersion.


 Purpose is to relate causes and effects.
 Three basic functions are
 Problem to be resolved
 Opportunity to be grasped
 Result to be achieved
 Deals with time direction but not quantity.
 Can be difficult to identify or demonstrate
interrelationships.
Cause-and-Effect Diagram

Measurement
Measurement Human
Human Machines
Machines
Faulty
testing equipment Poor supervision Out of adjustment

Incorrect specifications Lack of concentration Tooling problems

Improper methods Inadequate training Old / worn

Quality
Quality
Inaccurate Problem
Problem
temperature
Defective from vendor Poor process design
control
Ineffective quality
Not to specifications management
Dust and Dirt Deficiencies
Material-
handling problems in product design

Environment
Environment Process
Process
Materials
Materials

3-30
Awards for Quality

 Sri Lanka National Quality Award

The selection criteria for this award is based


upon the Malcolm Baldrige Quality Award of
USA

 International Asia Pacific Quality Award

ISO 9000
ISO 9000

 A set of procedures and policies for international quality


certification of suppliers

Standards

 ISO 9001 ~ Suppliers and Designers


 ISO 9002 ~ Production
 ISO 9003 ~ Inspection and Test
 ISO 9004 ~ Quality Management
Implications of ISO 9000

 Many overseas companies


will not do business with a
supplier unless it has ISO
9000 certification
 ISO 9000 accreditation
 ISO registrars
 A total commitment to quality
is required throughout an
organization
Summary