Quality Management and

6 International Standards
PowerPoint presentation to accompany
Heizer, Render, and Munson
Operations Management, Global Edition

Instructor:
Dr. Tahir Iqbal

6-1
Outline

•Company Profile: New Mowasat Hospital

•Quality and Strategy
•Defining Quality
- Implications of Quality
- Cost of Quality (COQ)
- Ethics and Quality Management

6-2
Outline – Continued

•International Quality Standards

- ISO 9000
- ISO14000

6-3
Outline – Continued

•Total Quality Management

- Continuous Improvement
- Six Sigma
- Employee Empowerment
- Benchmarking
- Just-in-Time (JIT)
- Taguchi Concepts
- Knowledge of TQM Tools
6-4
Outline – Continued
• Tools of TQM
- Check Sheets
- Scatter Diagrams
- Cause-and-Effect Diagrams
- Pareto Charts
- Flowcharts
- Histograms
- Statistical Process Control (SPC)
6-5
Outline – Continued

• The Role of Inspection

- When and Where to Inspect
- Source Inspection
- Service Industry Inspection
- Inspection of Attributes versus Variables
- TQM in Services

6-6
Learning Objectives
When you complete this chapter you should be able to:

1. Define quality and TQM

2. Describe the ISO international
quality standards
3. Explain Six Sigma
4. Explain how benchmarking is
used
5. Explain quality robust products
and Taguchi concepts
6. Use the seven tools of TQM
6-7
Defining Quality

The ability of a product or service

to meet customer wants and needs

Render, Heizer, and Al-Zu’bi (2013)

6-8
Different Views

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

6-9
Implications of Quality

1. Company reputation
 Perception of new products
 Employment practices
 Supplier relations
2. Product liability
 Reduce risk
3. Global implications
 Improved ability to compete

6 - 10
Key Dimensions of Quality

 Performance
 Durability
 Features
 Serviceability
 Reliability
 Aesthetics
 Conformance
 Perceived quality
 Value

6 - 11
Costs of Quality

 Prevention costs - reducing the

potential for defects
 Appraisal costs - evaluating
products, parts, and services
 Internal failure - producing defective
parts or service before delivery
 External failure - defects discovered
after delivery
6 - 12
Costs of Quality

Total Total Cost

Cost
External Failure

Internal Failure

Prevention

Appraisal
Quality Improvement
6 - 13
Leaders in Quality

Leader Philosophy/Contribution
W. Edwards Deming 14 Points for
Management
Joseph M. Juran Top management
commitment, fitness for
use
Armand Feigenbaum Total Quality Control
Philip B. Crosby Quality is Free, zero
defects

Table 6.1
6 - 14
Ethics and Quality Management

 Operations managers must deliver

healthy, safe, quality products and
services
 Poor quality risks injuries, lawsuits,
recalls, and regulation
 Organizations are judged by how
they respond to problems
 All stakeholders much be
considered
6 - 15
International Quality Standards

 ISO 9000 series (Europe/EC)

 Common quality standards for products sold in
Europe (even if made in U.S.)
 2008 update places greater emphasis on
leadership and customer requirements and
satisfaction
 International recognition
 Encourages quality management procedures,
detailed documentation, work instructions, and
recordkeeping
 2015 revision gives greater emphasis to risk-
based thinking
 ISO 14000 series (Europe/EC): Environmental
Management

6 - 16
TQM

Encompasses entire organization, from supplier to

customer
Stresses a commitment by management to have a
continuing, companywide drive toward
excellence in all aspects of products and
services that are important to the customer

6 - 17
Seven Concepts of TQM

1. Continuous improvement
2. Six Sigma
3. Employee empowerment
4. Benchmarking
5. Just-in-time (JIT)
6. Taguchi concepts
7. Knowledge of TQM tools

6 - 18
Continuous Improvement

 Represents continual
improvement of all processes
 Involves all operations and work
centers including suppliers and
customers
 People, Equipment, Materials,
Procedures

6 - 19
Shewhart’s PDCA Model

4. Act 1.Plan
Implement Identify the
the plan pattern and
document make a plan

3. Check 2. Do
Is the plan Test the
working? plan

Figure 6.3

6 - 20
Six Sigma

 Two meanings
 Statistical definition of a process that
is 99.9997% capable, 3.4 defects per
million opportunities (DPMO)
 A program designed to reduce
defects, lower costs, and improve
customer satisfaction

6 - 21
Six Sigma
Figure 6.4

6 - 22
 Employee Empowerment
 Getting employees involved in product and
process improvements
 85% of quality problems
are due to process
and material
 Techniques
 Build communication networks
that include employees
 Develop open, supportive supervisors
 Move responsibility to employees
 Build a high-morale organization
 Create formal team structures

6 - 23
Quality Circles

 Group of employees who meet

regularly to solve problems
 Trained in planning, problem
solving, and statistical methods
 Often led by a facilitator
 Very effective when done
properly

6 - 24
Benchmarking

Selecting best practices to use as a

standard for performance rna
l
i nte ing
1. Determine what to Use hmark ig
e n c re b
benchmark b o u ’
if y nough
e
2. Form a benchmark team
3. Identify benchmarking partners
4. Collect and analyze benchmarking
information
5. Take action to match or exceed the
benchmark
6 - 25
Just-in-Time (JIT)

 ‘Pull’ system of production scheduling

including supply management
 Production only when signaled
 Allows reduced inventory levels
 Inventory costs money and hides process
and material problems
 Encourages improved process and
product quality

6 - 26
Just-in-Time (JIT)

Relationship to quality:

 JIT cuts the cost of quality

 JIT improves quality
 Better quality means less
inventory and better, easier-to-
employ JIT system

6 - 27
Just-In-Time (JIT) Example

Work in process
inventory level
(hides problems)

Unreliable Capacity
Vendors Scrap
Imbalances

6 - 28
Just-In-Time (JIT) Example

Reducing inventory reveals

problems so they can be solved

Unreliable Capacity
Vendors Scrap
Imbalances

6 - 29
Taguchi Concepts

 Engineering and experimental

design methods to improve product
and process design
 Identify key component and process
variables affecting product variation
 Taguchi Concepts
 Quality robustness
 Quality loss function
 Target-oriented quality
6 - 30
Tools of TQM

 Tools for Generating Ideas

 Check sheets
 Scatter diagrams
 Cause-and-effect diagrams
 Tools to Organize the Data
 Pareto charts
 Flowcharts

6 - 31
Tools of TQM

 Tools for Identifying Problems

 Histogram
 Statistical process control

6 - 32
Seven Tools of TQM

(a) Check Sheet: An organized method of

recording data

Hour
Defect 1 2 3 4 5 6 7 8
A /// / / / / /// /
B // / / / // ///
C / // // ////

Figure 6.6
6 - 33
Seven Tools of TQM

(b) Scatter Diagram: A graph of the value

of one variable vs. another variable
Productivity

Absenteeism

Figure 6.6
6 - 34
Seven Tools of TQM

(c) Cause-and-Effect Diagram: A tool that

identifies process elements (causes) that
might effect an outcome

Cause
Materials Methods
Effect

Manpower Machinery
Figure 6.6
6 - 35
Seven Tools of TQM

(d) Pareto Chart: A graph to identify and plot

problems or defects in descending order of
frequency
Frequency

Percent
A B C D E
Figure 6.6
6 - 36
Seven Tools of TQM

(e) Flowchart (Process Diagram): A chart that

describes the steps in a process

Figure 6.6
6 - 37
Seven Tools of TQM

(f) Histogram: A distribution showing the

frequency of occurrences of a variable
Distribution
Frequency

Repair time (minutes)

Figure 6.6
6 - 38
Seven Tools of TQM

(g) Statistical Process Control Chart: A chart with

time on the horizontal axis to plot values of a
statistic

Upper control limit

Target value

Lower control limit

Time
Figure 6.6
6 - 39
Inspection

 Involves examining items to see if

an item is good or defective
 Detect a defective product
 Does not correct deficiencies in
process or product
 It is expensive
 Issues
 When to inspect
 Where in process to inspect
6 - 40
When and Where to Inspect

1. At the supplier’s plant while the supplier is

producing
2. At your facility upon receipt of goods from
the supplier
3. Before costly or irreversible processes
4. During the step-by-step production
process
5. When production or service is complete
6. Before delivery to your customer
7. At the point of customer contact
6 - 41
Inspection

 Many problems
 Worker fatigue
 Measurement error
 Process variability
 Cannot inspect quality into a
product
 Robust design, empowered
employees, and sound processes
are better solutions
6 - 42
TQM in Services

 Service quality is more difficult to

measure than the quality of goods
 Service quality perceptions depend
on
 Intangible differences between
products
 Intangible expectations customers
have of those products

6 - 43
Service Quality

The Operations Manager must

recognize:
1. The tangible component of
services is important
2. The service process is important
3. The service is judged against the
customer’s expectations
4. Exceptions will occur

6 - 44
 Determinants of Service Quality

Reliability Consistency of performance and dependability

Responsiveness Willingness or readiness of employees

Competence Required skills and knowledge

Access Approachability and ease of contact

Courtesy Politeness, respect, consideration, friendliness

Communication Keeping customers informed

Credibility Trustworthiness, believability, honesty

Security Freedom from danger, risk, or doubt

Understanding/ knowing
Understand the customer’s needs
the customer
Tangibles Physical evidence of the service

Table 6.5
6 - 45
Service Recovery Strategy

 Managers should have a plan for when

services fail
 Marriott’s LEARN routine
 Listen
 Empathize
 Apologize
 React
 Notify

6 - 46