Pm Presentation

Total Quality Management

Production Production Management Management BM 325

Sabaragamuwa University of Sri Lanka

Quality is a Journey, Contents not a Destination  Meaning of Quality  Total Quality Management  Strategic Implications of TQM  TQM in Service Companies  Cost of Quality  Quality Control Tools  Awards for Quality

Meaning of Quality ➨

Fitness for purpose or use

➨

Conformance to specified requirements

➨

The totality of features and characteristics of a product or service that bears on its ability to satisfy the stated and/or implied needs

Meaning of Quality:

Total Quality Management  Principles of TQM        

Customer-oriented Leadership Strategic planning Employee responsibility Continuous improvement Cooperation Statistical methods Training and education

Strategic Implications of TQM  Strong leadership  Goals, vision, or mission  Operational plans and policies  Mechanism for feedback

TQM in Service Companies  Principles of TQM apply equally well to services and manufacturing  Services and manufacturing companies have similar inputs but different processes and outputs  Services tend to be labour intensive  Service defects are not always easy to measure because service output is not usually a tangible item

Quality Attributes in Service  Benchmark 

“best” level of quality achievement one company or companies seek to achieve

 Timeliness 

how quickly a service is provided

“quickest, friendliest, most accurate service available.”

Cost of Quality  Cost of Achieving Good Quality 

Prevention costs 



Costs incurred during product design

Appraisal costs 

Costs of measuring, testing, and analyzing

 Cost of Poor Quality 

Internal failure costs 



Include scrap, rework, process failure, downtime, and price reductions

External failure costs 

Include complaints, returns, warranty claims, liability, and lost sales

Prevention Costs  Quality planning costs 

costs of developing and implementing quality management program

 Training costs 

 Product-design costs 

costs of designing products with quality characteristics

 Process costs 

costs expended to make sure productive process conforms to quality specifications

costs of developing and putting on quality training programs for employees and management

 Information costs 

costs of acquiring and maintaining data related to quality, and development of reports on quality performance

Appraisal Costs  Inspection and testing 

costs of testing and inspecting materials, parts, and product at various stages and at the end of a process

 Test equipment costs 

costs of maintaining equipment used in testing quality characteristics of products

 Operator costs 

costs of time spent by operators to gar data for testing product quality, to make equipment adjustments to maintain quality, and to stop work to assess quality

Internal Failure Costs  Scrap costs 

costs of poor-quality products that must be discarded, including labor, material, and indirect costs

 Rework costs 

costs of fixing defective products to conform to quality specifications

 Process failure costs 

costs of determining why production process is producing poor-quality products

 Process downtime costs 

costs of shutting down productive process to fix problem

 Price-downgrading costs 

costs of discounting poorquality products—that is, selling products as “seconds”

External Failure Costs  Customer complaint costs 

costs of investigating and satisfactorily responding to a customer complaint resulting from a poor-quality product

 Product return costs 

costs of handling and replacing poor-quality products returned by customer

 Warranty claims costs 

costs of complying with product warranties

 Product liability costs 

litigation costs resulting from product liability and customer injury

 Lost sales costs 

costs incurred because customers are dissatisfied with poor quality products and do not make additional purchases

Measuring and Reporting Quality Costs  Index numbers 



ratios that measure quality costs against a base value labor index 



cost index 



ratio of quality cost to manufacturing cost

sales index 



ratio of quality cost to labor hours

ratio of quality cost to sales

production index 

ratio of quality cost to units of final product

Seven Quality Control Tools Check Lists

Pareto Principle Flow Charts

Histogram or Bar Graph

Cause and Effect / Fishbone Diagram

Scatter Plots

Control Charts

Pareto Analysis  The Pareto principle suggests that most effects come from relatively few causes  Effort aimed at the right 20% can solve 80% of the problems. Double (back to back) Pareto charts can be used to compare 'before and after' situations. General use, to decide where to apply initial effort for maximum effect. 3-17

Po or W ro De ng si gn di m en De si fe on ct s iv e M pa ac r ts hi ne ca O pe libr at ra io to ns re rr De or fe s ct iv e Su m at rfa er ce ia ls ab ra si on s

Percent from each cause 70

20

10

(64)

60

Pareto Chart

50

40

30

(13) (10) (6) (3) (2)

0

Causes of poor quality (2)

Flow Chart  Pictures, symbols or text coupled with lines, arrows on lines show direction of flow.  Enables modeling of processes.  problems/opportunities and decision points etc.  Develops a common understanding of a process by those involved.

Flow Chart Start/ Finish

Operation

Operation

Decision

Operation

Operation

Operation

Decision

Start/ Finish

Check Sheet  Data recording form that has been designed to readily interpret results from the form itself.  It needs to be designed for the specific data it is to gather.  Used for the collection of quantitative or qualitative repetitive data.  Adaptable to different data gathering situations. Minimal interpretation of results required.  Easy and quick to use.

Check Sheet COMPONENTS REPLACED BY LAB TIME PERIOD: 22 Feb to 27 Feb 2002 REPAIR TECHNICIAN: Bob TV SET MODEL 1013 Integrated Circuits Capacitors Resistors Transformers Commands CRT

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Histogram  Graphic summary of variation in a set of data.  A graph in which the continuous variable is clustered into categories and the value of each cluster is plotted to give a series of bars as above.  Without using some form of graphic this kind of problem can be difficult to analyze, recognize or identify

Histogram

20 15 10 5 0 1 2

6 13 10 16 19 17 12 16 2017 13 5 6 2 1

Scatter Diagram  A scatter plot is effectively a line graph with no line  the point intersections between the two data sets are plotted but no attempt is made to physically draw a line.  The Y axis is conventionally used for the characteristic whose behavior we would like to predict. Use, to define the area of relationship between two variables.

Scatter Diagram Y

X

Control Chart  Method of Statistical Process Control (SPC).  Upper and lower control and tolerance limits are calculated for a process and sampled measures are regularly plotted about a central line between the two sets of limits.  The plotted line corresponds to the stability/trend of the process. Action can be taken based on trend rather than on individual variation.

Control Chart

Number of defects

24 UCL = 23.35

21

c = 12.67

18 15 12 9 6

LCL = 1.99

3 2

4

6

8

10

12

Sample number

14

16 3-28

Cause-and-Effect Diagram   

Method for analyzing process dispersion. Purpose is to relate causes and effects. Three basic functions are   

Problem to be resolved Opportunity to be grasped Result to be achieved

 Deals with time direction but not quantity.  Can be difficult to identify or demonstrate interrelationships.

Cause-and-Effect Diagram Measurement Measurement Faulty testing equipment

Improper methods

Environment Environment

Out of adjustment Tooling problems

Lack of concentration Inadequate training

Old / worn Quality Quality Problem Problem

Defective from vendor Not to specifications

Dust and Dirt

Machines Machines

Poor supervision

Incorrect specifications

Inaccurate temperature control

Human Human

Materialhandling problems

Materials Materials

Poor process design Ineffective quality management Deficiencies in product design Process Process

3-30

Awards for Quality  Sri Lanka National Quality Award The selection criteria for this award is based upon the Malcolm Baldrige Quality Award of USA  International Asia Pacific Quality Award ISO 9000

ISO 9000  A set of procedures and policies for international quality certification of suppliers Standards    

ISO 9001 ~ Suppliers and Designers ISO 9002 ~ Production ISO 9003 ~ Inspection and Test ISO 9004 ~ Quality Management

Implications of ISO 9000  Many overseas companies will not do business with a supplier unless it has ISO 9000 certification  ISO 9000 accreditation  ISO registrars  A total commitment to quality is required throughout an organization

Summary