MANAGING QUALITY PROVIDES A COMPETITIVE ADVANTAGE

  • Managing quality supports differentiation, low costs, and response strategies.
  • Quality helps firms increase sales and reduce costs.
  • Building a quantity organization is a demanding task.

TWO WAYS QUALITY IMPROVES PROFITABILITY

1) Sales Gains Via

  • Improved response
  • Flexible pricing
  • Improve reputation.

2) Reduces costs via

  • Increased productivity
  • Lower rework & Scrap costs
  • Lower warranty costs.

Increased Profits.

Improved Quality

The Flow of Activities.

i) Organisational Practices.

  • Leadership, mission statement, effective operating procedures, staff support, training.
  • Yields: What is important & What is to be accomplished.

ii) Quality Principles.

  • Customer focus, continuous improvement, Benchmarking, just in time, tools of TQM.
  • Yields: How to do, what is important & to be accomplished.

iii) Employee fulfillment.

  • Empowerment, organizational commitment.
  • Yields: Employees attitudes that can accomplish what is important.

iv) Customer Satisfaction.

  • Winning orders, repeat customers.
  • Yields: An effective organization with a competitive advantages.

Define Quality.

  • An operating manager's objective is to build a total quality.

Different Views.

  • Manufacturing based: conformance to standards, making it right the first time.
  • User based: Better performance, more features.
  • Product based: specific and measurable attributes of the product.

IMPLICATIONS OF QUALITY

2) Product liability.

  • Reduce risk.

1) Company reputation.

  • Perception of new products.
  • Employment practices.
  • Supplier relations.

3) Global implications.

  • Improve ability to compete.

ISO 9000 INTERNATIONAL QUALITY STANDARDS

  • 2015 revision give best greater emphasis to risk based thinking.
  • International recognition.
  • Critical for global business.
  • Encourages quality management procedures, detailed documentation, work instructions, and record keeping.
  • Over 1 million certifications in 206 countries.

ISO 9000 INTERNATIONAL QUALITY STANDARDS

  • Management principles:
    i) Top management leadership
    ii) Customer satisfaction.
    iii) Continual improvement.
    iv) Involvement of people.
    v) Process analysis.
    vi) Use of data- driven decision making.
    vii) A systems approach to management.
    viii) Mutually beneficial supplier relationship.

COSTS OF QUALITY

  • Appraisal costs- evaluating products, parts, and services.
  • Prevention costs- reducing the potential for detects.
  • External failure costs- defects discovered after delivery.
  • Internal failure costs- producing defective parts or service before delivery.

Total Quality Management (TQM)

  • Encompasses entire organization from supplier to customer.
  • Stresses a commitment by management to have a continuing company wide drive toward excellence in all aspects of products and services that are important to the customer.
  • Seven Concepts of TQM

5) Just-in-time (JIT)

6) Taguchi concepts

4) Benchmarking

7) Knowledge of TQM tools.

3) Employee empowerment

2) Six sigma.

  • A program designed to reduces defects, lower costs, save time, and improve customer satisfaction.
  • A comprehensive system for achieving and sustaining business success.

1) Continuous improvement.

  • Never-ending process of continuous improvement.
  • Covers people, equipment, supplier, materials and procedures.
  • Every operation can be improved.
  • Kaizen describes the ongoing process of unending improvement.
  • TQM and zero defects also used to describe continuous improvement.

1) Defines- the project's purpose, scope and outputs and then identified the required process information keeping in mind the customer's definition of quality.


2) Measures- the process and collects data.


3) Analyzes- the data ensuring repeatability and reproducibility.


4) Improves- by modifying or redesigning existing processes and procedures.


5) Controls- the new process to make sure performance levels are maintained.

  • Getting employees involved in products and process improvement.
  • Techniques:
    1) Build communication networks that include employees
    2) Develop open, supportive supervisors
    3) Move responsibility to employees.
    4) Build a high morale organisation.
    5) Create a formal team structures.
  • Selecting best practices to use as a standard performance:
    1) Determine what to benchmark
    2) Form a benchmark team
    3) Identify benchmarking partners
    4) Collect and analyze benchmarking information
    5) Take action to match or exceed the benchmark.
  • Internal Benchmarking
    i) When the organization is large enough.
    ii) Data is more accessible
    iii) Can and should be established in a variety of areas.
  • 'Pull' system of production scheduling including supply management.
  • production is only when signaled.
  • allows reduces inventory levels
  • inventory costs money and hides processes and material problems.
    -encourages improved process and product quality.
  • Relationship to quality:
  • JIT cuts the cost of quality.
  • JIT improves quality.
  • better quality means less inventory and better, easier- to employ JIT system.
  • Engineering and experimental design method to improve product and process design.
  • Identify key component and process variables affecting product variation.
  • Taguchi concepts:
    i) quality robustness
    ii) target-oriented quality
    iii) quality loss function.
  • Tools to identify problems:
    1) Histogram
    2) Statistical process control chart.
  • Seven tools of TQM:
    1) Check sheet.
    2) Scatter diagram
    3) Cause and effect diagram
    4) Pareto chart
    5) Flowchart ( Process Diagram)
    6) Histogram
    7) Statistical process control chart.

INSPECTION

  • Detect a defective product:
    -does not correct deficiencies in process or product.
    -it is expensive
  • Involves examining items to see if an item is good or defective.
  • Issues:
    -when to inspect
    -where in process to inspect
  • Attributes Vs Variables
  • Many problems
  • Cannot inspect quality into product.
  • Robust design, empowered employees, and sound processes are better solutions.
  • Sources inspection
  • Also known as source control
  • Next step in the process is your customer
  • Ensure perfect product to your customer.
  • Poka-yoke is the concept of foolproof devices or techniques designed to pass only acceptable products.
  • Checklists ensure consistency and completeness.
  • Use different statistical techniques.
  • Variables:
    -measures dimensions such as weight, speed, height, or strength.
    -falls within an acceptable range.
  • Attributes:
    -items are either good or bad, acceptable or unacceptable.
    does not address degree of failure

TQM in services

  • Service quality is more difficult to measure than the quality of goods.
  • Services quality perceptions depend on:
    1) Intangible differences between products.
    2) Intangible expectations consumers have of those products.

SERVICE QUALITY

  • The operations manager must recognize:
    i) the tangible component of service is important.
    ii) the service process is important.
    iii) the service is judged against the customer's expectations.
    iv) exceptions will occur.
  • Service Recovery Strategy
  • Manager should have a plan for when services fail.
  • Marriott's learn routine:
    1) Listen
    2) Empathize
    3) Apologize
    4) React
    5) Notify

NURUL SYUHADA BT ZULKIFLEE
2019416606
KBA2462A