1:37 AM
Chapter 16
Total Quality Management
What is Quality?
· Quality means user satisfaction: that goods or services satisfy the needs and expectations of the user. To achieve quality according to this definition, we must consider quality and product policy, product design, manufacturing, and final use of the product.
· Product planning involves decisions about the products and services that a firm will market. The basic quality level of a product is thus specified by management according to its understanding of the wants and needs of the market segment. A product or service is a combination of tangible and intangible characteristics that a company hopes the customer will accept and be willing to pay a price for.
· A firm’s studies of the marketplace should yield a general specification of the product, outlining the expected performance, appearance, price, and volume. Product designers must then build into the product the quality level described in the general specification.
· Quality in manufacturing means that, at a minimum, all production must be within specification limits and the less variation from the nominal the better the quality.
· To the user, quality depends on an expectation of how the product should perform. This is sometimes expressed as “fitness for use.” Customers do not care why a product is defective, but they care if it is defective.
· Quality has a number of dimensions:
Ø Performance implies that the product or service is ready for the customer’s use at the time of sale. The phrase “fitness for use” – that the product does what it is supposed to do – is often used to describe this. Three dimensions to performance are important: reliability, durability, and maintainability. Reliability means consistency of performance. Durability refers to the ability of a product to continue to function even when subjected to hard wear and frequent use. Maintainability refers to being able to return a product to operating condition after it has failed.
Ø Features secondary characteristics – little extras.
Ø Conformance means meeting established standards or specifications.
Ø Warranty is an organization’s public promise to back up its products with a guarantee of customer satisfaction.
Ø Service is an intangible generally made up of a number of things such as availability, speed of service, courtesy, and competence of personnel.
Ø Aesthetics means pleasing to the senses; i.e. finish or appearance of a product.
Ø Perceived quality is based on the premise that total customer satisfaction is based on the complete experience with an organization, not just the product.
Ø Price is what customers pay for value in what they buy. Value is the sum of the benefits the customer receives and can be more than the product itself.
Total Quality Management (TQM)
· TQM “is based on the participation of all members of an organization in improving processes, products, services, and the culture they work in.” The objective of TQM is to provide a quality product to customers at a lower price. By increasing quality and decreasing price, profit and growth will increase, which will increase job security and employment.
· The six basic concepts in TQM are:
Ø A committed and involved management. TQM is a continuous process that must become part of the organization’s culture.
Ø Focus on the customer. This means listening to the customer so goods and services meet customer needs at a low cost. It means improving design and processes to reduce defects and cost.
Ø Involvement of the total workforce. Total quality management is the responsibility of everyone in the organization.
Ø Continuous process improvement (covered in chapter 14). Processes can and must be improved to reduce cost and increase quality.
Ø Supplier partnering rather than adversarial relationship.
Ø Performance measures to measure the results.
Quality Cost Concepts
· Quality costs fall into two broad categories: the cost of failure to control quality and the cost of controlling quality.
· The costs of failing to control quality are the costs of producing material that does not meet specifications and they can be broken down into:
Ø Internal failure costs are the costs of correcting problems that occur while the goods are still in the production facility.
Ø External failure costs are the costs of correcting problems after goods or services have been delivered to the customer.
· The costs of controlling quality can be broken down into:
Ø Prevention costs are the costs of avoiding trouble by doing the job right the first time.
Ø Appraisal costs are the costs associated with checking and auditing quality.
· Investment in prevention will improve productivity by reducing the cost of failure and appraisal. Investing in prevention will increase total costs in the short run, but in the long run prevention will eliminate the causes of failure and reduce total quality costs.
Variation as a Way of Life
· Variability exists in everything.
· In any manufacturing process, we can expect to find a certain amount of chance variation that is inherent in the process. The causes of the chance variation are broken into six categories: people, machine, material, method, environment, and measurement. There is no way to alter chance variation except to change the process. If the process produces too many defects, then it must be changed.
· Assignable variation has a specific reason for these causes of variation.
· As long as only chance variation exists, the system is said to be in statistical control. If there is an assignable cause for variation, the process is not in control. The objective of statistical process control is to detect the presence of assignable causes of variation. SPC, then, has two objectives:
Ø To help select processes capable of producing the required quality with minimum defects.
Ø To monitor a process to be sure it continues to produce the required quality and no assignable cause for variation exists.
· The output of every process has a unique pattern that can be described by its shape, center, and spread. The bell-shaped curve is called a normal curve and is commonly encountered in manufacturing processes that are running under controlled conditions. To evaluate a process, we must know not only what the center is, but also something about the spread or variation. This can be measured using either of two methods, range or standard deviation.
Process Capability
· Tolerances are the limits of deviation from perfection and are established by the product design engineers to meet a particular design function. In statistical process control, the lower specification limit (LSL) is the minimum acceptable level of output. Similarly, the upper specification limit (USL) is defined as the maximum acceptable level of output. Both the USL and LSL are related to the product specification and are independent of any process.
· Besides spread, there is another way a process can produce defects. If there is a shift in the mean (average), defects will be produced. In summary:
- The capability of the process is not related to the product specification tolerance.
- A process must be selected that can meet the specifications.
- Processes can produce defects in two ways, by having too big a spread (sigma) or by a shift in the mean (average).
Process Control
· Process control attempts to prevent the production of excessive defects by showing when the probability is high there is an assignable cause for variation.
Sample Inspection
· Statistical process control monitors the process and detects when the process goes out of control, thus minimizing the production of defective parts. Traditional inspection inspects the batch of parts after they are made, and on the basis of the inspection, accepts or rejects the batch. 100% inspection means testing every unit in the lot. In cases in which the cost of failure is exceptionally high, 100% inspection is vital. Acceptance sampling consists of taking a sample of a batch of product and using it to estimate the overall quality of the batch.
· There are four reasons for using sample inspection:
Ø Testing the product is destructive.
Ø There is not enough time to give 100% inspection to a batch of product.
Ø It is too expensive to test the entire batch.
Ø Human error is estimated to be as high as 3% when performing long-term repetitive testing.
· The use of statistical sampling depends on the following conditions:
Ø All items must be produced under similar or identical conditions.
Ø A random sample of the lot must be taken.
Ø The lot to be sampled should be a homogeneous mixture.
Ø The batches to be inspected should be large.
· Sampling plans are designed to provide some assurance of the quality of goods while taking costs into consideration. Lots are defined as good if they contain no more than a specified level of defects, called the acceptable quality level (AQL). A plan is designed to have a minimum allowable number or percent defective in the sample in order to accept the lot. Above this level of defects, the lot will be rejected.
· The probability of accepting a bad lot is called the consumer’s risk. The probability of rejecting a good lot is called the producer’s risk. The objective is to balance the consumer’s risk and the producer’s risk against the cost of the sampling plan.
ISO 9000
· The International Organization for Standardization (ISO) developed a series of five standards for quality systems that have become universally accepted and a requirement for doing business. The standards are intended to prevent nonconformities during all stages of business functions. A third party, called a registrar, assesses the adequacy of the supplier’s quality system. In simple terms, the standards require the supplier to say what it is doing to ensure quality, do what it says, and prove it has done so by documentation.
· ISO 9000 consists of five standards and explains the basic quality concepts, defines key terms, and provides guidelines for selecting, using, and modifying ISO 9001, 9002, and 9003. ISO 9004 provides guidance in implementing a quality system. ISO 9001 provides a model for quality assurance in design, production, installation and servicing. ISO 9002 provides a model for quality assurance in production and installation. ISO 9003 provides a model for quality assurance in final inspection.
Benchmarking
· Benchmarking is a systematic method by which organizations can compare their performance in a particular process to that of a “best in class” organization. Bench marking looks outward to what competitors and excellent performers outside the industry are doing.
· The steps in benchmarking are:
- Select the process to benchmark.
- Identify an organization that is “best-in-class” in performing the process you want to study.
- Study the benchmarked organization.
- Analyze the date. What are the differences between your process and the benchmark organization?
JIT, TQM, and MRPII
- The TQM concepts are compatible with the use of JIT and MRPII practices.