Quality Management

By :Donna Lyngie L. Cubelo

Cost of quality

1. Prevention costs

2. Appraisal costs

3. Internal failure costs

4. External failure costs

5. Opportunity costs
What is quality management all about?

Try to manage all aspects of the organization

in order to excel in all dimensions that are
important to “customers”

Two aspects of quality:

features: more features that meet customer needs
= higher quality
freedom from trouble: fewer defects = higher
quality
What does Total Quality Management encompass?

TQM is a management philosophy:

• continuous improvement
• leadership development
• partnership development

Technical
Tools
Cultural
Customer (Process
Alignment
Analysis, SPC,
QFD)
Developing quality specifications

Design Design quality

Input Process Output

Dimensions of quality
Conformance quality
Six Sigma Quality
 6
• A philosophy and set of methods companies use to
eliminate defects in their products and processes
• Seeks to reduce variation in the processes that lead to
product defects
• The name “six sigma” refers to the variation that
exists within plus or minus six standard deviations of
the process outputs
Six Sigma Quality
 Six Sigma Roadmap (DMAIC)
Next Project Define
Customers, Value, Problem Statement Validate
Scope, Timeline, Team Project $
Celebrate Primary/Secondary & OpEx Metrics
Project $ Current Value Stream Map
Measure
Voice Of Customer (QFD)
Control Assess specification / Demand
Document process (WIs, Std Work) Measurement Capability (Gage R&R)
Mistake proof, TT sheet, CI List Correct the measurement system
Analyze change in metrics Process map, Spaghetti, Time obs.
Value Stream Review Measure OVs & IVs / Queues
Prepare final report

Validate
Project $
Validate
Project $

Improve Analyze (and fix the obvious)

Optimize KPOVs & test the KPIVs Root Cause (Pareto, C&E, brainstorm)
Redesign process, set pacemaker Find all KPOVs & KPIVs
Validate
5S, Cell design, MRS FMEA, DOE, critical Xs, VA/NVA
Project $
Visual controls Graphical Analysis, ANOVA
Value Stream Plan Future Value Stream Map
Six Sigma Organization
Quality Improvement

em e nt
I mp rov
inuo us
Co n t
Quality

Traditional

Time
Continuous improvement philosophy

1. Kaizen: Japanese term for continuous improvement.

A step-by-step improvement of business processes.
2. PDCA: Plan-do-check-act as defined by Deming.

Plan Do

Act Check

3. Benchmarking : what do top performers do?

Tools used for continuous improvement

1. Process flowchart
 Used to document the detailed
steps in a process
 Often the first step in Process Re-
Engineering
Tools used for continuous improvement
2. Run Chart
A run chart is a line graph of data plotted over time. By collecting and charting data over time, y
can find trends or patterns in the process. Because they do not use control limits, run charts cann
tell you if a process is stable. However, they can show you how the process is running. The run
chart can be a valuable tool at the beginning of a project, as it reveals important information abo
process before you have collected enough data to create reliable control limits.

Performance

Tim
e
Tools used for continuous improvement
3. Control Charts
 Important tool used in Statistical Process Control –
Chapter 6
 The UCL and LCL are calculated limits used to show when
process is in or out of control
Performance Metric

Time
Tools used for continuous improvement
4. Cause and effect diagram (fishbone)
 Called Fishbone Diagram
 Focused on solving identified quality problem

Machine Man

Environment

Method Material
Fishbone diagram analysis

Absent receiving Working system of

party operators

Absent Too many phone calls

Out of office Lunchtime

Not at desk Absent

Makes
custome
Not giving receiving r wait
party’s coordinates Does not
Lengthy talk understand
Does not know customer
Complaining organization well

Leaving a Takes too much time to

message explain

Customer Operator
Tools used for continuous improvement
5. Check sheet

Simple data check-off sheet designed to identify type of quality

problems at each work station; per shift, per machine, per
operator
Item A B C D E F G
------- √√ √ √ √
------- √√√ √√√ √ √√
------- √√ √ √√ √
Reasons why customers have to wait
(12-day analysis with check sheet)

Daily Total
average number
A One operator (partner out of office) 14.3 172

B Receiving party not present 6.1 73

C No one present in the section receiving call 5.1 61

D Section and name of the party not given 1.6 19

E Inquiry about branch office locations 1.3 16

F Other reasons 0.8 10

29.2 351
Tools used for continuous improvement
6. Histogram
 A chart that shows the frequency distribution of observed
values of a variable like service time
at a bank drive-up window

 Displays whether the distribution is symmetrical (normal) or

skewed Frequency
Tools used for continuous improvement
7. Pareto Analysis
 Technique that displays the degree of importance for each element
 Named after the 19th century Italian economist; often called the 80-20 Rule
 Principle is that quality problems are the result of only a few problems e.g.
80% of the problems caused by 20% of causes
100%
60
50 75%

Percentage
Frequency

40
50%
30
20 25%
10
0%
A B C D E F
Pareto Analysis: reasons why customers have to wait

Frequency Percentage

300 87.1%

250 71.2%
200
49%
150
100

0%
A B C D E F
Results of implementing the recommendations

Before… …After
Frequency Percentage Frequency Percentage

100%

300 87.1% 300

71.2%
Improvement
200 200
49%

100 100 100%

0% 0%

A B C D E F B C A D E F
Summary of Tools

1. Process flow chart

2. Run diagram
3. Control charts
4. Fishbone
5. Check sheet
6. Histogram
7. Pareto analysis
Ideas for improvement

1. Taking lunches on three different shifts

2. Ask all employees to leave messages when leaving desks
3. Compiling a directory where next to personnel’s name
appears her/his title
In general, how can we monitor quality…?

By observing
variation in
output measures!

1. Assignable variation: we can assess the cause

2. Common variation: variation that may not be possible to
correct (random variation, random noise)
 Product Design - Quality
Function Deployment
 Critical to ensure product design meets customer
expectations
 Useful tool for translating customer specifications into
technical requirements is Quality Function Deployment
(QFD)
 QFD encompasses
 Customer requirements
 Competitive evaluation
 Product characteristics
 Relationship matrix
 Trade-off matrix
 Setting Targets

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 Process Management &
Managing Supplier Quality
 Quality products come from quality sources
 Quality must be built into the process
 Quality at the source is belief that it is better to
uncover source of quality problems and correct it
 TQM extends to quality of product from
company’s suppliers

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 Quality Awards and
Standards
 Malcolm Baldrige National Quality
Award (MBNQA)
 The Deming Prize
 ISO 9000 Certification
 ISO 14000 Standards

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MBNQA- What Is It?
 Award named after the former Secretary of
Commerce – Reagan Administration
 Intended to reward and stimulate quality initiatives
 Given to no more that two companies in each of
three categories; manufacturing, service, and small
business
 Past winners; Motorola Corp., Xerox, FedEx, 3M,
IBM, Ritz-Carlton

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The Deming Prize
 Given by the Union of Japanese Scientists and Engineers since
1951
 Named after W. Edwards Deming who worked to improve
Japanese quality after WWII
 Not open to foreign companies until 1984
 Florida P & L was first US company winner

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ISO Standards
 ISO 9000 Standards:
 Certification developed by International Organization for
Standardization
 Set of internationally recognized quality standards
 Companies are periodically audited & certified
 ISO 9000:2000 QMS – Fundamentals and
Standards
 ISO 9001:2000 QMS – Requirements
 ISO 9004:2000 QMS - Guidelines for Performance
 More than 40,000 companies have been certified
 ISO 14000:
 Focuses on a company’s environmental responsibility

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Why TQM Efforts Fail
 Lack of a genuine quality culture
 Lack of top management support and
commitment
 Over- and under-reliance on SPC
methods

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TQM Within OM
 TQM is broad sweeping organizational change
 TQM impacts
 Marketing – providing key inputs of customer information
 Finance – evaluating and monitoring financial impact
 Accounting – provides exact costing
 Engineering – translate customer requirements into specific
engineering terms
 Purchasing – acquiring materials to support product development
 Human Resources – hire employees with skills necessary
 Information systems – increased need for accessible information

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 Quality Management
Highlights
 TQM is different from the old concept of quality as it focus is on
serving customers, identifying the causes of quality problems, and
building quality into the production process
 Four categories of quality cost of prevention, appraisal, internal and
external costs
 Seven TQM notable individuals include Walter A. Shewhart, W.
Edwards Demings, Joseph M. Juran, Armand V. Feigenbaum, Philip
B. Crosby, Kaoru Ishikawa, and Genichi Taguchi

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