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MGMT3011 Managing Operations

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Added on: 2023-01-03 10:09:14
Order Code: CLT173389
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    MGMT3011

Learning Objectives

LO1 - Explain the meaning of total quality management (TQM).
LO2 - Identify costs of quality.
LO3 - Describe the evolution of TQM.
LO4 - Identify features of the TQM philosophy.
LO5 - Describe quality awards and quality certifications.
LO6 - Understand why and how TQM efforts fail.

TQM Philosophy Concepts ways of improving quality

  • Focus on customer:
    • Identify and meet customer needs.
    • Quality is customer driven.
    • Stay tuned to changing needs, e.g., fashion styles, psychometrics & demographics
  • Continuous improvement: a philosophy of never-ending improvement, e.g., Kaizen.
    • Plan-Do-Study-Act (PDSA) cycle
    • Benchmarking study how others do things.
    • Reliability
    • Cost of quality
  • Employee empowerment:
    • Empower all employees
    • External versus internal customers
    • Team approach (teams formed around processes, Quality circles; 810 people; meet weekly to analyze and solve problems)
  • Use of quality tools:

Cost of Quality

  • Quality affects all aspects of the organization;
  • Quality has dramatic cost implications:
    • Quality control costs (to achieve high quality)
      • Prevention costs - Costs of preparing and implementing a quality plan
      • Appraisal costs - Costs of testing, evaluating, and inspecting quality
    • Quality failure costs (high costs associated with poor quality)
      • Internal failure costs - Costs of scrap, rework, and material losses
      • External failure costs - Costs of failure at customer site, including returns, repairs, and recalls

External Failure Costs and Defects

FIGURE 5.2 Cost of defects

TQM Philosophy Concepts: Use of Quality Tools

  • Use of Quality Tools
    • Ongoing training on analysis, assessment, and correction, as well as the use of implementation tools
    • Seven Tools of Quality Control
      • Cause-and-effect diagrams
      • Flowcharts
      • Checklists
      • Control charts
      • Scatter diagrams
      • Pareto analyses
      • Histograms

The Seven Tools of Quality Control

FIGURE 5.7 The seven toolsof quality control

1. Cause-and-Effect Diagrams

Often called Fishbone Diagrams or Ishikawa Diagram
A tool that identifies process elements (causes) that may effect an outcome
Focused on identifying potential causes of quality problems.
Used by quality control teams; brainstorming.

FIGURE 5.8 A general cause-and-effect (fishbone) diagram

2. Flowcharts

Schematic diagrams used to document the detailed steps in a process.

3. Checklists

Simple data check-off sheets.
Designed to identify type of quality problems at each work station; per shift, per machine, per operator.

4. Control Charts

The UCL and LCL are calculated limits used to show when a process is in or out of control; e.g., weight, width, or volume.
Key tool used in statistical process control (Chapter 6).

Example using a control chart to monitor defects per unit
The re-Cycle Cardboard Company produces cardboard used for making lazer-cut jigsaw puzzles. As a final step in the process, the cardboard passes through a machine that measures various product quality characteristics. When the cardboard production process is in control, it averages 10 defects per roll.
1. Set up a control chart for the number of defects per roll. For this example, use two-sigma control limits.
2. Five cardboard rolls had the following number of defects: 8, 11, 9, 12 and 14 respectively. The sixth roll, using recycled materials from a new supplier, had 3 defects. Is the paper production process in control?
3. How can the OM manager use this analysis to assist in decisions regarding his suppliers?

Statistical Quality Control

Identifying quality control centres on whether an activity needs adjustment

6 Sigma versus 3 Sigma

  • Motorola coined six-sigma to describe their higher quality efforts back in 1980s; process capability
  • Six-sigma quality standard is now a benchmark in many industries
    • Before design, marketing ensures customer product characteristics
    • Operations ensures that product design characteristics can be met by controlling materials and processes to 6? levels
    • Other functions like finance and accounting use 6? concepts to control all of their processes
    • PPM Defective for 3? versus 6? quality

5. Scatter Diagrams

Graphs that show how two variables are related to one another.
The greater the degree of correlation, the more linear are the observations

6. Pareto Analysis

  • Used to identify quality problems based on their degree of importance.
  • Named after a 19th -century Italian economist; often called the 80?20 rule.
    • Principle is that quality problems are the result of only a few causes; e.g., 80% of problems are caused by 20% of causes.

7. Histograms

A chart that shows the frequency distribution of observed values of a variable (e.g., service time at a bank drive-up window).
Displays whether the distribution is symmetrical (normal) or skewed.

Product Design: Quality Function Deployment (QFD)

  • Critical to ensure that product design meets customer expectations (and to enhance communications internally).
  • QFD is a useful tool for translating customer specifications into technical requirements.
  • QFD encompasses:
    • customer requirements
    • competitive evaluation
    • product characteristics
    • relationship matrix
    • trade-off matrix
    • setting targets

Quality Function Deployment (QFD) Details

Process used to ensure that the product meets customer specifications

QFD: House of Quality

Adding trade-offs, targets & developing product specifications

Benchmarking

Involves comparing an organisations processes with the processes of the best to be found in todays process-based organisations

Used for a variety of purposes:

  • Comparing an organisations processes with an organisation who has best practice at performing a particular activity regardless of the industry itself (functional benchmarking)
  • Comparing an organisations products and services with those of direct industry competitor (competitive benchmarking)
  • Identifying the best practices to be implemented
  • Projecting trends in order to be able to respond proactively to future challenges and opportunities

Product Design: Reliability

  • Reliability is the probability that a product, service, or part will perform as intended for a specified period of time under normal conditions.
  • No product is 100?rtain to function properly.
  • Reliability is a probability function dependent on sub-parts or components.
  • Reliability of a system is the product of component reliabilities

Product Design: Process Management and Managing Supplier Quality

  • Quality products come from quality sources.
  • Quality must be built into the process.
  • Quality at the source is the belief that it is better to uncover the source of quality problems and correct it.
  • TQM extends to quality of product from companys suppliers.

Some terms for quality measuring data

  1. Inspection of variables - Variable data
    • measurable - usually relates to weight, length, temperature, diameter, or some other variable that can be scaled
    • use a continuous scale, e.g. length, weight
    • quality tool - histogram
  2. Inspection of attributes - Attribute data
    • determining the existence of a characteristic;
    • usually uses a dichotomous variable such as right/wrong; acceptable/defective;timely/late; red/not red
    • quality tool bar chart
  3. Subjective data
    • are based on opinions and perceptions,
    • data are usually collected on a five, six or seven point scale; called the Likert scale, these can sometimes be turned into variable data

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