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Quality Control

Chapter 2- Total Quality


Management and
Principles
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Quality Control, 8e

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Besterfield: Quality Control, 8th ed.. 2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
Learning Objectives
When you complete this chapter, you should:
Know the six basic concepts, the purpose and
benefits of TQM.
Understand the twelve characteristics of a
leader.
Describe the necessary management
activities to implement a TQM program.
Know the importance of customer satisfaction
and how to achieve it.

Besterfield: Quality Control, 8th ed.. 2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
Learning Objectives-contd.
When you complete this chapter, you should:
Describe the process necessary for effective
employee involvement.
Describe continuous process improvement
and the problem-solving method.
Know the importance of supplier partnership
and techniques to measure effectiveness.
Be able to describe the measures of
performance.

Besterfield: Quality Control, 8th ed.. 2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
TQM
Total - made up of the whole
Quality - degree of excellence a
product or service provides
Management - act, art or manner of
planning, controlling, directing,.

Therefore, TQM is the art of


managing the whole to achieve
excellence.
excellence

Besterfield: Quality Control, 8th ed.. 2009 Pearson Education, Upper Saddle River, NJ 07458.
Total Quality Management All rights reserved
TQM
Total Quality Management (TQM) is the
application of methods and human resources
to improve all the processes within an
organization and exceed customer needs now
and in the future.
Enhancement to the traditional way of doing
business
It is a top to bottom approach of quality
improvement

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Besterfield: Quality Control, 8 ed..
th
2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
Productivity and TQM
Traditional view:
Quality cannot be improved without
significant losses in productivity.
TQM view:
Improved quality leads to improved
productivity.

Besterfield: Quality Control, 8th ed.. 2009 Pearson Education, Upper Saddle River, NJ 07458.
Total Quality Management All rights reserved
TQM
TQM is philosophy and guiding principles
continuously improve the Organization processes
and result in customer satisfaction
The purpose of TQM is to provide a quality
product to customers, which will, in turn, increase
the productivity and lower cost
TQM allows the organization to achieve the
business objectives of profit and growth
Job Security. TQM creates a satisfying place to
work

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Besterfield: Quality Control, 8 ed..
th
2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
TQM
A company will not begin the
transformation to TQM until it is aware
that the quality of the product or service
must be improved
Improvements in quality lead directly to
increased productivity
TQM is better way to run a business and
compete in domestic and world markets
TQM requires a cultural change
TQM is mandated by the customer
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Besterfield: Quality Control, 8 ed..
th
2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
Why TQM?
Ford Motor Company had operating
losses of $3.3 billion between 1980
and 1982.
Xerox market share dropped from
93% in 1971 to 40% in 1981.
Attention to quality was seen as a
way to combat the competition.

Besterfield: Quality Control, 8th ed.. 2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
TQM
Basic Approach:
1. A committed and involved
management to provide long-term top-
to-bottom organizational support
2. A continuous focus on the customer
both internal & external
3. Effective involvement and utilization of
the entire work force

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Besterfield: Quality Control, 8 ed..
th
2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
TQM
Basic Approach contd:
4. Continuous improvement of the business
and production processes
5. Treating suppliers as partners
6. Establishing performance measures for
the processes
These concepts outline an excellent way
to run a business
Increase in productivity and reduction in
cost
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Besterfield: Quality Control, 8 ed..
th
2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
TQM
TQM is not an overnight process it takes
a long time (3 5 years) to build the
appropriate emphasis and techniques
into the culture
It requires a cultural change
If a company is not aware of importance
of quality then the TQM transformation
will begin either
Company loses market share
Mandated by customer
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Besterfield: Quality Control, 8 ed..
th
2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
TQM
Quality Previous State TQM
Element
Definition Product- Customer-
Oriented oriented
Decisions Short-term Long-term
Emphasis Detection Prevention
Errors Operations System
Responsibility Quality Control Everyone
Prob. Solving Managers Teams
Procurement Price Life-cycle costs
Managers Role Plan, enforce etc Delegate,
facilitate

Table2.1 New and Old Cultures


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Besterfield: Quality Control, 8 ed..
th
2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
TQM
TQM
Principles and Tools and techniques
practices

Leadership Quantitative Non-Quantitative


techniques techniques
Customer satisfaction

Employee involvement

Continuous
improvement

Supplier partnership

Performance
measures
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Besterfield: Quality Control, 8 ed..
th
2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
Criteria 1: Leadership
The ability to positively influence people
and systems to have a meaningful
impact and achieve results

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Besterfield: Quality Control, 8 ed..
th
2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
Leadership
Recognize that the quality function is no
more alone responsible for product
quality.Quality is the responsibility of
everyone in the organization
Commitment to quality becomes part of
the corporations business strategy and
leads to enhanced profit and an
improved competitive position

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Besterfield: Quality Control, 8 ed..
th
2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
Leadership
Leadership Characteristics:
1. Give priority attention to external and internal
customers and their needs
2. Empower, rather than control, subordinates
3. Emphasize improvement rather than
maintenance
4. Emphasize prevention
5. Encourage collaboration rather than competition

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Besterfield: Quality Control, 8 ed..
th
2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
Leadership
Leadership Characteristics Contd:
6. Train and coach, rather than direct and supervise
7. Learn from problem
8. Improve communications
9. Continuously demonstrate their commitment to
quality
10.Choose suppliers on the basis of quality, not price

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Besterfield: Quality Control, 8 ed..
th
2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
Leadership
Leadership Characteristics Contd:
11. Establish organizational systems to support
the quality effort e.g. work groups, project
teams.
12. Encourage and recognize team effort

Leadership is essential during every phase of the


implementation process and particular at the
start!!!!!

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Besterfield: Quality Control, 8 ed..
th
2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
TQM Implementation
Begins with the Senior Managements and the
CEOs commitment
Involvement is required not delegation or rhetoric
(book)
Requires the education of Senior Management in
TQM concepts
Timing of the implementation process can be
very important
Formation of the Quality Council
Development of Core Values, Vision Statement,
Mission Statement, Quality Policy Statement
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Besterfield: Quality Control, 8 ed..
th
2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
TQM Implementation
Quality Council:
In order to build quality into the organization
culture, a quality council is established
Composed of: CEO, the Senior Managers of the
functional areas, such as design, marketing,
finance, production, and quality; and a
coordinator or consultant
The coordinator (or a consultant in small
organizations) will ensure that the team members
are empowered and know their responsibilities

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Besterfield: Quality Control, 8 ed..
th
2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
TQM Implementation
Quality Council Duties:
1. Develop the core values, vision, mission,
and quality policy statements
2. Develop the strategic long-term plan with
goals and the annual quality improvement
program with objectives
3. Create the total education and training plan
4. Determine and continually monitor the cost
of poor quality

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Besterfield: Quality Control, 8 ed..
th
2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
TQM Implementation
Quality Council Duties:
5. Determine the performance measures for
the organization and approve them
6. Determine projects that improve the
processes
7. Establish multifunctional project and
departmental or work group team
8. Establish or revise the recognition and
reward system

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Besterfield: Quality Control, 8 ed..
th
2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
TQM Implementation
Core Values
Each organization will need to develop its own values to promote
TQM
Core Values for the Malcolm Baldrige National Quality Award:
Customer-driven Excellence
Organizational & Personal Learning
Valuing Employees & Partners
Agility
Focus on the Future
Social responsibility

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Besterfield: Quality Control, 8 ed..
th
2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
TQM Implementation
Quality Statements:
Include the Vision Statement, Mission
Statement, and Quality Policy Statement
They are part of the strategy planning
process, which includes goals and objectives
Develop with input from all personnel

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Besterfield: Quality Control, 8 ed..
th
2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
TQM Implementation
Seven Steps to Strategy Planning:
The key is that quality and customer satisfaction
are the key focus
Customer Needs (book)
Customer Positioning
Predict the Future
Gap Analysis
Closing the Gap
Alignment
Implementation

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Besterfield: Quality Control, 8 ed..
th
2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
Criteria 2 Customer
Satisfaction
Who is the Customer?
External Customer -- those who receive the final
products. Occurs normally at the organizational
level
Internal Customers -- occur at the process and
cross-departmental levels within the company

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Besterfield: Quality Control, 8 ed..
th
2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
Customer Satisfaction
Customer is always right in Japan customer is
King
Customer expectations constantly changing 10
years ago acceptable, now not any more!
Delighting customers (Kano Model)
Customer Satisfaction is a function of total
experience with organization not just purchased unit
Must give customers a quality product or service,
reasonable price, on-time delivery, and outstanding
service
Need to continually examine the quality systems and
practices to be responsive to ever changing needs,
requirements and expectations Strive to Retain and
Win new customers

Besterfield: Quality Control, 8th ed.. 2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
Issues for customer
satisfaction
Checklist for both internal and
external customers
1.Who are my customers?
2.What do they need?
3.What are their measures and expectations?
4.Does my product/service exceed their
expectations?
5.How do I satisfy their needs?
6.What corrective action is necessary?

Besterfield: Quality Control, 8th ed.. 2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
Customer Satisfaction
Contd.
Customer Feedback:
To focus on customer, an effective feedback
program is necessary, objectives of program are
to:
1. Discover customer dissatisfaction
2. Discover priorities of quality, price, delivery
3. Compare performance with competitors
4. Identifying customers needs
5. Determine opportunities for improvement

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Besterfield: Quality Control, 8 ed..
th
2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
Customer Satisfaction
Contd.
Customer Feedback Methods:
1. Comment cards and formal
surveys
2. Direct customer contacts
3. Field Intelligence
4. Study complaints
5. Monitoring the Internet

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Besterfield: Quality Control, 8 ed..
th
2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
Customer Satisfaction
Contd.
Customer Complaints:
Dissatisfied customers rarely complain
Complaint is an opportunity for quality
improvement
Procedure for customer complaints, such
as:
Accept complaints
Feedback complaint information to all people
Analyze complaints by doing effective work
Eliminate the root cause
Report results of all investigations and
Good experience
solutions are told to to 6 people while
everyone bad experience are repeated to3215
involved
Besterfield: Quality Control, 8 ed..
th
2009 Pearson Education, Upper Saddle River, NJ 07458.
people All rights reserved
Criteria 3 Employee
Involvement
People most important resource/asset of the
organization
Quality comes from people
Develop motivation programs with goals and
implement these programs
Deming 15% operator errors, 85%
management system

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Besterfield: Quality Control, 8 ed..
th
2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
Employee Involvement
Reduce fear throughout the organization by
encouraging open two way communication
The economic loss resulting from fear to ask
questions or report trouble is shocking
Involving people in quality improvement
programs is an effective technique to improve
quality

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Besterfield: Quality Control, 8 ed..
th
2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
Employee Involvement
Management commitment, annual quality
improvement programs with incentives, project
teams at all levels are all effective ways of
utilizing human resource
Education and training of employees in all
departments not only in Quality control dept.

35
Besterfield: Quality Control, 8 ed..
th
2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
Criteria 4 Continuous Process
Improvement
The Goal is to achieve perfection:
View work as a process
Make all processes effective, efficient,
and adaptable
Anticipate changing customer needs
Control in-process performance using
measures such as scrap reduction,
control charts
Maintain constructive dissatisfaction with
the present level of performance
Besterfield: Quality Control, 8 ed..
th
36
2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
Continuous Process
Improvement
The Goal is to achieve perfection:
Eliminate waste and rework wherever it
occur
Investigate non-value added activities
Use benchmarking to stay competitive
Use tools such as SPC, design of
experiments etc.

37
Besterfield: Quality Control, 8 ed..
th
2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
Continuous Process Improvement

FEEDBACK

PROCESS OUTPUT
INPUT People Information
Materials Equipment Data OUTCOMES
Money Method
Product
Procedures
Information Environment Service, etc.
Data, etc Materials

CONDITIONS

Figure 2-3 Input/output process model

Besterfield: Quality Control, 8th ed.. 2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
Continuous Process
Improvement
For continuous improvement problem solving method
should be applied to processes at all levels
Problem-Solving Method:
1.Identify the opportunity
2.Analyze the current process
3.Develop the optimal solution(s)
4.Implement changes
5.Study the results
6.Standardize the solution
7.Plan for the future
39
Besterfield: Quality Control, 8 ed..
th
2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
Criteria 5 Supplier
Partnership
On average 40% or more of product or
service cost is due to procurement.
It follows that a substantial portion of
quality problems will be due to the supplier.
The supplier should be treated as an
extension of the production process.

Besterfield: Quality Control, 8th ed.. 2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
Supplier Partnership
The supplier should make a positive
contribution to design, production and cost
reduction
This requires:
Long term relationship with supplier(s)
Good supplier management (Book)

Besterfield: Quality Control, 8th ed.. 2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
Supplier Partnership
Supplier Selection Criteria:
Quality of parts/raw materials
Certified?
On-time delivery
100% delivery
Technology

Besterfield: Quality Control, 8th ed.. 2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
Criteria 6 Performance Measures

Managing by fact rather than gut feelings


Effective management requires measuring
Performance measures are necessary as a
baseline, to identify potential projects and to
evaluate results from improvement
E.g. Production performance measures
defects per million, inventory turns, on-time
delivery
Service billing errors, sales, activity times

Besterfield: Quality Control, 8th ed.. 2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
Performance Measurements
Cost of Poor Quality:
It is defined as those costs associated with the
non-achievement of the product or service quality
It includes
Cost of quality inspectors and reworks
Prevention costs associated with design and
productions
Failure costs associated lost sales and customer
goodwill.

The lower poor quality cost leads to higher profits


Besterfield: Quality Control, 8th ed.. 2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
Performance Measurements
Management uses cost of poor quality in its
pursuit of quality improvement, customer
satisfaction and profit enhancement
The higher cost of poor quality also reflects
the management ineffectiveness and loss in
companys competitive position

Besterfield: Quality Control, 8th ed.. 2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
Performance Measurements
Categories of Cost of Poor Quality
(Book)
Prevention Costs:
Costs of minimizing failure to
occur/reoccur
Appraisal Costs:
Costs of determining the degree of
conformance/compliance to quality
requirements

Besterfield: Quality Control, 8th ed.. 2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
Performance Measurements
Cost of Poor Quality:
Internal Failure Costs:
Costs resulting from defects found before
the customer receives the product or service
External Failure Costs:
Costs resulting from defects found after the
customer receives the product or service

Besterfield: Quality Control, 8th ed.. 2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
Demings 14 Points
1. Create consistency of purpose
2. Lead to promote change
3. Build quality into the product; stop
depending on inspection
4. Build long term relationships based on
performance, not price
5. Continuously improve product,
quality, and service

Besterfield: Quality Control, 8th ed.. 2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
Demings 14 Points
6. Start training
7. Emphasize leadership
8. Drive out fear
9. Break down barriers between
departments
10. Stop haranguing workers

Besterfield: Quality Control, 8th ed.. 2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved
Demings 14 Points
11. Support, help, improve
12. Remove barriers to pride in work
13. Institute a vigorous program of
education and self-improvement
14. Put everybody in the company to
work on the transformation

Besterfield: Quality Control, 8th ed.. 2009 Pearson Education, Upper Saddle River, NJ 07458.
All rights reserved