ch 5
TRANSCRIPT
© 2008 Prentice Hall, Inc. 6 – 1
Operations ManagementChapter 5 – Chapter 5 – Managing QualityManaging Quality
PowerPoint presentation to accompany PowerPoint presentation to accompany Heizer/Render Heizer/Render Principles of Operations Management, 7ePrinciples of Operations Management, 7eOperations Management, 9e Operations Management, 9e
© 2008 Prentice Hall, Inc. 6 – 2
OutlineOutline Global Company Profile: Arnold Global Company Profile: Arnold
Palmer HospitalPalmer Hospital Quality and StrategyQuality and Strategy Defining QualityDefining Quality
Implications of QualityImplications of Quality Malcolm Baldrige National Quality Malcolm Baldrige National Quality
AwardAward Cost of Quality (COQ)Cost of Quality (COQ) Ethics and Quality ManagementEthics and Quality Management
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Outline – ContinuedOutline – Continued International Quality StandardsInternational Quality Standards
ISO 9000ISO 9000 ISO14000ISO14000
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Outline – ContinuedOutline – Continued
Total Quality ManagementTotal Quality Management Continuous ImprovementContinuous Improvement Six SigmaSix Sigma Employee EmpowermentEmployee Empowerment BenchmarkingBenchmarking Just-in-Time (JIT)Just-in-Time (JIT) Taguchi ConceptsTaguchi Concepts Knowledge of TQM ToolsKnowledge of TQM Tools
© 2008 Prentice Hall, Inc. 6 – 5
Outline – ContinuedOutline – Continued Tools of TQMTools of TQM
Check SheetsCheck Sheets Scatter Diagrams Scatter Diagrams Cause-and-Effect DiagramsCause-and-Effect Diagrams Pareto ChartsPareto Charts FlowchartsFlowcharts HistogramsHistograms Statistical Process Control (SPC)Statistical Process Control (SPC)
© 2008 Prentice Hall, Inc. 6 – 6
Outline – ContinuedOutline – Continued
The Role of InspectionThe Role of Inspection When and Where to InspectWhen and Where to Inspect Source InspectionSource Inspection Service Industry InspectionService Industry Inspection Inspection of Attributes versus Inspection of Attributes versus
VariablesVariables TQM in ServicesTQM in Services
© 2008 Prentice Hall, Inc. 6 – 7
Learning ObjectivesLearning ObjectivesWhen you complete this chapter you When you complete this chapter you should be able to:should be able to:
Define quality and TQMDefine quality and TQM Describe the ISO international Describe the ISO international
quality standardsquality standards Explain Six SigmaExplain Six Sigma Explain how benchmarking is used Explain how benchmarking is used Explain quality robust products and Explain quality robust products and
Taguchi conceptsTaguchi concepts Use the seven tools of TQMUse the seven tools of TQM
© 2008 Prentice Hall, Inc. 6 – 8
Quality and StrategyQuality and Strategy
Managing quality supports Managing quality supports differentiation, low cost, and differentiation, low cost, and response strategiesresponse strategies
Quality helps firms increase sales Quality helps firms increase sales and reduce costsand reduce costs
Building a quality organization is Building a quality organization is a demanding taska demanding task
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Two Ways Quality Two Ways Quality Improves ProfitabilityImproves Profitability
Improved Improved QualityQuality
Increased Increased ProfitsProfits
Increased productivity Lower rework and scrap costs Lower warranty costs
Reduced Costs via
Improved response Flexible pricing Improved reputation
Sales Gains via
Figure 6.1Figure 6.1
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The Flow of ActivitiesThe Flow of ActivitiesOrganizational Practices
Leadership, Mission statement, Effective operating procedures, Staff support, TrainingYields: What is important and what is to be
accomplishedQuality Principles
Customer focus, Continuous improvement, Benchmarking, Just-in-time, Tools of TQMYields: How to do what is important and to be
accomplishedEmployee Fulfillment
Empowerment, Organizational commitmentYields: Employee attitudes that can accomplish
what is importantCustomer SatisfactionWinning orders, Repeat customersYields: An effective organization with
a competitive advantage
Figure 6.2Figure 6.2
© 2008 Prentice Hall, Inc. 6 – 11
Defining QualityDefining Quality
The totality of features and The totality of features and characteristics of a product or characteristics of a product or
service that bears on its ability to service that bears on its ability to satisfy stated or implied needssatisfy stated or implied needs
American Society for QualityAmerican Society for Quality
© 2008 Prentice Hall, Inc. 6 – 12
Different ViewsDifferent Views
User-based – better performance, User-based – better performance, more featuresmore features
Manufacturing-based – Manufacturing-based – conformance to standards, conformance to standards, making it right the first timemaking it right the first time
Product-based – specific and Product-based – specific and measurable attributes of the measurable attributes of the product product
© 2008 Prentice Hall, Inc. 6 – 13
Implications of QualityImplications of Quality1.1. Company reputationCompany reputation
Perception of new productsPerception of new products Employment practicesEmployment practices Supplier relationsSupplier relations
2.2. Product liabilityProduct liability Reduce riskReduce risk
3.3. Global implicationsGlobal implications Improved ability to competeImproved ability to compete
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Key Dimensions of QualityKey Dimensions of Quality
PerformancePerformance FeaturesFeatures ReliabilityReliability ConformanceConformance
DurabilityDurability ServiceabilityServiceability AestheticsAesthetics Perceived qualityPerceived quality ValueValue
© 2008 Prentice Hall, Inc. 6 – 15
Malcom Baldrige National Malcom Baldrige National Quality AwardQuality Award
Established in 1988 by the U.S. Established in 1988 by the U.S. governmentgovernment
Designed to promote TQM practicesDesigned to promote TQM practices Recent winnersRecent winners
Premier Inc., MESA Products, Sunny Premier Inc., MESA Products, Sunny Fresh Foods, Park Place Lexus, North Fresh Foods, Park Place Lexus, North Mississippi Medical Center, The Bama Mississippi Medical Center, The Bama Companies, Richland College, Texas Companies, Richland College, Texas Nameplate Company, Inc.Nameplate Company, Inc.
© 2008 Prentice Hall, Inc. 6 – 16
Baldrige CriteriaBaldrige CriteriaApplicants are evaluated on:Applicants are evaluated on:
Categories PointsLeadership 120Strategic Planning 85Customer & Market Focus 85Measurement, Analysis, and Knowledge Management 90Workforce Focus 85Process Management 85Results 450
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TakumiTakumi
A Japanese character A Japanese character that symbolizes a that symbolizes a broader dimension broader dimension than quality, a deeper than quality, a deeper process than process than education, and a more education, and a more perfect method than perfect method than persistencepersistence
© 2008 Prentice Hall, Inc. 6 – 18
Costs of QualityCosts of Quality
Prevention costs - reducing the Prevention costs - reducing the potential for defectspotential for defects
Appraisal costs - evaluating Appraisal costs - evaluating products, parts, and servicesproducts, parts, and services
Internal failure - producing defective Internal failure - producing defective parts or service before deliveryparts or service before delivery
External costs - defects discovered External costs - defects discovered after deliveryafter delivery
© 2008 Prentice Hall, Inc. 6 – 19
External Failure
Internal Failure
Prevention
Costs of QualityCosts of Quality
Appraisal
Total Cost
Quality Improvement
Total CostTotal Cost
© 2008 Prentice Hall, Inc. 6 – 20
Leaders in QualityLeaders in Quality
W. Edwards DemingW. Edwards Deming 14 Points for 14 Points for ManagementManagement
Joseph M. JuranJoseph M. Juran Top management Top management commitment, commitment, fitness for usefitness for use
Armand FeigenbaumArmand Feigenbaum Total Quality Total Quality ControlControl
Philip B. CrosbyPhilip B. Crosby Quality is Free, Quality is Free, zero defectszero defects
© 2008 Prentice Hall, Inc. 6 – 21
Ethics and Quality Ethics and Quality ManagementManagement
Operations managers must deliver Operations managers must deliver healthy, safe, quality products and healthy, safe, quality products and servicesservices
Poor quality risks injuries, lawsuits, Poor quality risks injuries, lawsuits, recalls, and regulationrecalls, and regulation
Organizations are judged by how Organizations are judged by how they respond to problemsthey respond to problems
All stakeholders much be All stakeholders much be consideredconsidered
© 2008 Prentice Hall, Inc. 6 – 22
International Quality International Quality StandardsStandards
ISO 9000 series (Europe/EC)ISO 9000 series (Europe/EC) Common quality standards for products Common quality standards for products
sold in Europe (even if made in U.S.)sold in Europe (even if made in U.S.) 2000 update places greater emphasis on 2000 update places greater emphasis on
leadership and customer satisfactionleadership and customer satisfaction ISO 14000 series (Europe/EC)ISO 14000 series (Europe/EC)
© 2008 Prentice Hall, Inc. 6 – 23
ISO 14000ISO 14000Environmental StandardEnvironmental Standard
Core Elements:Core Elements: Environmental managementEnvironmental management AuditingAuditing Performance evaluationPerformance evaluation LabelingLabeling Life cycle assessmentLife cycle assessment
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TQMTQM
Encompasses entire organization, Encompasses entire organization, from supplier to customerfrom supplier to customer
Stresses a commitment by Stresses a commitment by management to have a continuing, management to have a continuing,
companywide drive toward companywide drive toward excellence in all aspects of products excellence in all aspects of products
and services that are important to and services that are important to the customerthe customer
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Deming’s Fourteen PointsDeming’s Fourteen Points1.1. Create consistency of purposeCreate consistency of purpose2.2. Lead to promote changeLead to promote change3.3. Build quality into the product; stop Build quality into the product; stop
depending on inspectiondepending on inspection4.4. Build long-term relationships based on Build long-term relationships based on
performance, not priceperformance, not price5.5. Continuously improve product, quality, Continuously improve product, quality,
and serviceand service6.6. Start trainingStart training7.7. Emphasize leadershipEmphasize leadership
Table 6.1Table 6.1
© 2008 Prentice Hall, Inc. 6 – 26
Deming’s Fourteen PointsDeming’s Fourteen Points8.8. Drive out fearDrive out fear9.9. Break down barriers between Break down barriers between
departmentsdepartments10.10. Stop haranguing workersStop haranguing workers11.11. Support, help, improveSupport, help, improve12.12. Remove barriers to pride in workRemove barriers to pride in work13.13. Institute a vigorous program of Institute a vigorous program of
education and self-improvementeducation and self-improvement14.14. Put everybody in the company to work Put everybody in the company to work
on the transformationon the transformationTable 6.1Table 6.1
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Seven Concepts of TQMSeven Concepts of TQM Continuous improvementContinuous improvement Six SigmaSix Sigma Employee empowermentEmployee empowerment BenchmarkingBenchmarking Just-in-time (JIT)Just-in-time (JIT) Taguchi conceptsTaguchi concepts Knowledge of TQM toolsKnowledge of TQM tools
© 2008 Prentice Hall, Inc. 6 – 28
Continuous ImprovementContinuous Improvement
Represents continual Represents continual improvement of all processes improvement of all processes
Involves all operations and work Involves all operations and work centers including suppliers and centers including suppliers and customerscustomersPeople, Equipment, Materials, People, Equipment, Materials,
ProceduresProcedures
© 2008 Prentice Hall, Inc. 6 – 29
2. DoTest the
plan
3. CheckIs the plan working?
4. ActImplement
the plan
1.PlanIdentify the
improvement and make
a plan
Shewhart’s PDCA ModelShewhart’s PDCA Model
Figure 6.3Figure 6.3
© 2008 Prentice Hall, Inc. 6 – 30
Six SigmaSix Sigma Two meaningsTwo meanings
Statistical definition of a process that Statistical definition of a process that is 99.9997% capable, 3.4 defects per is 99.9997% capable, 3.4 defects per million opportunities (DPMO)million opportunities (DPMO)
A program designed to reduce A program designed to reduce defects, lower costs, and improve defects, lower costs, and improve customer satisfactioncustomer satisfaction
© 2008 Prentice Hall, Inc. 6 – 31
Two meaningsTwo meanings Statistical definition of a process that Statistical definition of a process that
is 99.9997% capable, 3.4 defects per is 99.9997% capable, 3.4 defects per million opportunities (DPMO)million opportunities (DPMO)
A program designed to reduce A program designed to reduce defects, lower costs, and improve defects, lower costs, and improve customer satisfactioncustomer satisfaction
Six SigmaSix Sigma
Mean
Lower limits Upper limits
3.4 defects/million
±6
2,700 defects/million
±3
Figure 6.4
© 2008 Prentice Hall, Inc. 6 – 32
Six Sigma ProgramSix Sigma Program
Originally developed by Motorola, Originally developed by Motorola, adopted and enhanced by adopted and enhanced by Honeywell and GEHoneywell and GE
Highly structured approach to Highly structured approach to process improvementprocess improvement A strategyA strategy A discipline - DMAICA discipline - DMAIC 66
© 2008 Prentice Hall, Inc. 6 – 33
Six SigmaSix Sigma
1.1. Define critical outputs Define critical outputs and identify gaps for and identify gaps for improvementimprovement
2.2. Measure the work and Measure the work and collect process datacollect process data
3.3. Analyze the dataAnalyze the data4.4. Improve the processImprove the process5.5. Control the new process to Control the new process to
make sure new performance make sure new performance is maintainedis maintained
DMAIC ApproachDMAIC Approach
© 2008 Prentice Hall, Inc. 6 – 34
Six Sigma ImplementationSix Sigma Implementation Emphasize defects per million Emphasize defects per million
opportunities as a standard metricopportunities as a standard metric Provide extensive trainingProvide extensive training Focus on corporate sponsor support Focus on corporate sponsor support
(Champions)(Champions) Create qualified process improvement Create qualified process improvement
experts (Black Belts, Green Belts, etc.)experts (Black Belts, Green Belts, etc.) Set stretch objectivesSet stretch objectives
This cannot be accomplished without a major commitment from top level management
© 2008 Prentice Hall, Inc. 6 – 35
Employee EmpowermentEmployee Empowerment Getting employees involved in product Getting employees involved in product
and process improvementsand process improvements 85% of quality problems are due 85% of quality problems are due
to process and materialto process and material TechniquesTechniques
Build communication networks Build communication networks that include employeesthat include employees
Develop open, supportive supervisorsDevelop open, supportive supervisors Move responsibility to employeesMove responsibility to employees Build a high-morale organizationBuild a high-morale organization Create formal team structuresCreate formal team structures
© 2008 Prentice Hall, Inc. 6 – 36
Quality CirclesQuality Circles
Group of employees who meet Group of employees who meet regularly to solve problemsregularly to solve problems
Trained in planning, problem Trained in planning, problem solving, and statistical methodssolving, and statistical methods
Often led by a facilitatorOften led by a facilitator Very effective when done Very effective when done
properlyproperly
© 2008 Prentice Hall, Inc. 6 – 37
Use internal
benchmarking
if you’re big
enough
BenchmarkingBenchmarkingSelecting best practices to use as a Selecting best practices to use as a standard for performancestandard for performance
Determine what to Determine what to benchmarkbenchmark
Form a benchmark teamForm a benchmark team Identify benchmarking partnersIdentify benchmarking partners Collect and analyze benchmarking Collect and analyze benchmarking
informationinformation Take action to match or exceed the Take action to match or exceed the
benchmarkbenchmark
© 2008 Prentice Hall, Inc. 6 – 38
Benchmarking Factors for Benchmarking Factors for Web SitesWeb Sites
Use of meta tagsUse of meta tags Yes:Yes: 70% 70%, No:, No: 30% 30%
Meaningful homepage titleMeaningful homepage title Yes:Yes: 97% 97%, No:, No: 3% 3%
Unique domain nameUnique domain name Yes:Yes: 91% 91%, No:, No: 9% 9%
Search engine registrationSearch engine registration Above Above 96%96%
Average loading speedAverage loading speed 28K: 19.31, 56K: 28K: 19.31, 56K: 10.88, T1: 2.5910.88, T1: 2.59
Average number of spelling errorsAverage number of spelling errors 0.160.16
Visibility of contact informationVisibility of contact information Yes:Yes: 74% 74%, No:, No: 26% 26%
Presence of search enginePresence of search engine Yes:Yes: 59% 59%, No:, No: 41% 41%
Translation to multiple languagesTranslation to multiple languages Yes:Yes: 11% 11%, No:, No: 89% 89%
Table 6.3Table 6.3
© 2008 Prentice Hall, Inc. 6 – 39
Best Practices for Resolving Best Practices for Resolving Customer ComplaintsCustomer Complaints
Make it easy for clients to complainMake it easy for clients to complain Respond quickly to complaintsRespond quickly to complaints Resolve complaints on first contactResolve complaints on first contact Use computers to manage Use computers to manage
complaintscomplaints Recruit the best for customer Recruit the best for customer
service jobsservice jobs
© 2008 Prentice Hall, Inc. 6 – 40
Just-in-Time (JIT)Just-in-Time (JIT)
Relationship to quality:Relationship to quality:
JIT cuts the cost of qualityJIT cuts the cost of quality JIT improves qualityJIT improves quality Better quality means less Better quality means less
inventory and better, easier-to-inventory and better, easier-to-employ JIT systememploy JIT system
© 2008 Prentice Hall, Inc. 6 – 41
Just-in-Time (JIT)Just-in-Time (JIT)
‘‘Pull’ system of production scheduling Pull’ system of production scheduling including supply managementincluding supply management Production only when signaledProduction only when signaled
Allows reduced inventory levelsAllows reduced inventory levels Inventory costs money and hides process Inventory costs money and hides process
and material problemsand material problems Encourages improved process and Encourages improved process and
product qualityproduct quality
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Just-In-Time (JIT) ExampleJust-In-Time (JIT) Example
ScrapUnreliable Vendors
Capacity Imbalances
Work in process inventory level
(hides problems)
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Just-In-Time (JIT) ExampleJust-In-Time (JIT) Example
Reducing inventory revealsReducing inventory revealsproblems so they can be solvedproblems so they can be solved
ScrapUnreliable Vendors
Capacity Imbalances
© 2008 Prentice Hall, Inc. 6 – 44
Taguchi ConceptsTaguchi Concepts Engineering and experimental Engineering and experimental
design methods to improve product design methods to improve product and process designand process design Identify key component and process Identify key component and process
variables affecting product variationvariables affecting product variation Taguchi ConceptsTaguchi Concepts
Quality robustnessQuality robustness Quality loss functionQuality loss function Target-oriented qualityTarget-oriented quality
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Quality RobustnessQuality Robustness
Ability to produce products Ability to produce products uniformly in adverse manufacturing uniformly in adverse manufacturing and environmental conditionsand environmental conditions Remove the effects of adverse Remove the effects of adverse
conditionsconditions Small variations in materials and Small variations in materials and
process do not destroy product process do not destroy product qualityquality
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Quality Loss FunctionQuality Loss Function Shows that costs increase as the Shows that costs increase as the
product moves away from what product moves away from what the customer wantsthe customer wants
Costs include customer Costs include customer dissatisfaction, warranty dissatisfaction, warranty and service, internal and service, internal scrap and repair, and costs to scrap and repair, and costs to societysociety
Traditional conformance Traditional conformance specifications are too simplisticspecifications are too simplistic
Target-Target-oriented oriented qualityquality
© 2008 Prentice Hall, Inc. 6 – 47
Unacceptable
Poor
GoodBest
Fair
Quality Loss FunctionQuality Loss FunctionHigh lossHigh loss
Loss (to Loss (to producing producing organization, organization, customer, customer, and society)and society)
Low lossLow loss
FrequencyFrequency
LowerLower TargetTarget UpperUpperSpecificationSpecification
Target-oriented quality Target-oriented quality yields more product in yields more product in the “best” categorythe “best” category
Target-oriented quality Target-oriented quality brings product toward brings product toward the target valuethe target valueConformance-oriented Conformance-oriented quality keeps products quality keeps products within 3 standard within 3 standard deviationsdeviations
Figure 6.5Figure 6.5
L = DL = D22CCwherewhere
L =L = loss to loss to societysocietyD =D = distance from distance from target valuetarget valueC =C = cost of cost of deviationdeviation
© 2008 Prentice Hall, Inc. 6 – 48
Tools of TQMTools of TQM Tools for Generating IdeasTools for Generating Ideas
Check sheetsCheck sheetsScatter diagramsScatter diagramsCause-and-effect diagramsCause-and-effect diagrams
Tools to Organize the DataTools to Organize the DataPareto chartsPareto chartsFlowchartsFlowcharts
Tools for Identifying ProblemsTools for Identifying ProblemsHistogramHistogramStatistical process control chartStatistical process control chart
© 2008 Prentice Hall, Inc. 6 – 49
//
/ / /// /// ///// ////
//////
HourDefect 1 2 3 4 5 6 7 8
ABC
////
/
Seven Tools of TQMSeven Tools of TQM(a)(a) Check Sheet: An organized method of Check Sheet: An organized method of
recording datarecording data
Figure 6.6Figure 6.6
© 2008 Prentice Hall, Inc. 6 – 50
Seven Tools of TQMSeven Tools of TQM(b)(b) Scatter Diagram: A graph of the value Scatter Diagram: A graph of the value
of one variable vs. another variableof one variable vs. another variable
AbsenteeismAbsenteeism
Prod
uctiv
ityPr
oduc
tivity
Figure 6.6Figure 6.6
© 2008 Prentice Hall, Inc. 6 – 51
Seven Tools of TQMSeven Tools of TQM(c)(c) Cause-and-Effect Diagram: A tool that Cause-and-Effect Diagram: A tool that
identifies process elements (causes) that identifies process elements (causes) that might effect an outcomemight effect an outcome
Figure 6.6Figure 6.6
CauseCauseMaterialsMaterials MethodsMethods
ManpowerManpower MachineryMachinery
EffectEffect
© 2008 Prentice Hall, Inc. 6 – 52
Seven Tools of TQMSeven Tools of TQM(d)(d) Pareto Chart: A graph to identify and plot Pareto Chart: A graph to identify and plot
problems or defects in descending order of problems or defects in descending order of frequencyfrequency
Figure 6.6Figure 6.6
Freq
uenc
yFr
eque
ncy
Perc
ent
Perc
ent
AA BB CC DD EE
© 2008 Prentice Hall, Inc. 6 – 53
Seven Tools of TQMSeven Tools of TQM(e)(e) Flowchart (Process Diagram): A chart that Flowchart (Process Diagram): A chart that
describes the steps in a processdescribes the steps in a process
Figure 6.6Figure 6.6
© 2008 Prentice Hall, Inc. 6 – 54
Seven Tools of TQMSeven Tools of TQM(f)(f) Histogram: A distribution showing the Histogram: A distribution showing the
frequency of occurrences of a variablefrequency of occurrences of a variable
Figure 6.6Figure 6.6
DistributionDistribution
Repair time (minutes)Repair time (minutes)
Freq
uenc
yFr
eque
ncy
© 2008 Prentice Hall, Inc. 6 – 55
Seven Tools of TQMSeven Tools of TQM(g)(g) Statistical Process Control Chart: A chart with Statistical Process Control Chart: A chart with
time on the horizontal axis to plot values of a time on the horizontal axis to plot values of a statisticstatistic
Figure 6.6Figure 6.6
Upper control limitUpper control limit
Target valueTarget value
Lower control limitLower control limit
TimeTime
© 2008 Prentice Hall, Inc. 6 – 56
Cause-and-Effect DiagramsCause-and-Effect DiagramsMaterialMaterial
(ball)(ball)MethodMethod
(shooting process)(shooting process)
MachineMachine(hoop &(hoop &
backboard)backboard)ManpowerManpower(shooter)(shooter)
Missed Missed free-throwsfree-throws
Figure 6.7Figure 6.7
Rim alignmentRim alignment
Rim sizeRim size
Backboard Backboard stabilitystability
Rim heightRim height
Follow-throughFollow-through
Hand positionHand position
Aiming pointAiming point
Bend kneesBend knees
BalanceBalance
Size of ballSize of ball
LopsidednessLopsidedness
Grain/Feel Grain/Feel (grip)(grip)
Air pressureAir pressure
TrainingTraining
ConditioningConditioning MotivationMotivation
ConcentrationConcentration
ConsistencyConsistency
© 2008 Prentice Hall, Inc. 6 – 57
Pareto ChartsPareto Charts
Number of Number of occurrencesoccurrences
Room svcRoom svc Check-inCheck-in Pool hoursPool hours MinibarMinibar Misc.Misc.72%72% 16%16% 5%5% 4%4% 3%3%
121244 33 22
5454
– 100100– 9393– 8888
– 7272
70 70 –
60 60 –
50 50 –
40 40 –
30 30 –
20 20 –
10 10 –
0 0 –
Freq
uenc
y (n
umbe
r)Fr
eque
ncy
(num
ber)
Causes and percent of the totalCauses and percent of the total
Cum
ulat
ive
perc
ent
Cum
ulat
ive
perc
ent
Data for OctoberData for October
© 2008 Prentice Hall, Inc. 6 – 58
Flow ChartsFlow ChartsMRI FlowchartMRI Flowchart1.1. Physician schedules MRIPhysician schedules MRI2.2. Patient taken to MRIPatient taken to MRI3.3. Patient signs inPatient signs in4.4. Patient is preppedPatient is prepped5.5. Technician carries out MRITechnician carries out MRI6.6. Technician inspects filmTechnician inspects film
7.7. If unsatisfactory, repeatIf unsatisfactory, repeat8.8. Patient taken back to roomPatient taken back to room9.9. MRI read by radiologistMRI read by radiologist10.10. MRI report transferred to MRI report transferred to
physicianphysician11.11. Patient and physician discussPatient and physician discuss
1111
1010
20%20%99
8880%80%
11 22 33 44 55 66 77
© 2008 Prentice Hall, Inc. 6 – 59
Statistical Process Control Statistical Process Control (SPC)(SPC)
Uses statistics and control charts to Uses statistics and control charts to tell when to take corrective actiontell when to take corrective action
Drives process improvementDrives process improvement Four key stepsFour key steps
Measure the processMeasure the process When a change is indicated, find the When a change is indicated, find the
assignable causeassignable cause Eliminate or incorporate the causeEliminate or incorporate the cause Restart the revised processRestart the revised process
© 2008 Prentice Hall, Inc. 6 – 60
An SPC ChartAn SPC Chart
Upper control limitUpper control limit
Coach’s target valueCoach’s target value
Lower control limitLower control limit
Game numberGame number
| | | | | | | | |11 22 33 44 55 66 77 88 99
20%20%
10%10%
0%0%
Plots the percent of free throws missedPlots the percent of free throws missed
Figure 6.8Figure 6.8
© 2008 Prentice Hall, Inc. 6 – 61
InspectionInspection Involves examining items to see if Involves examining items to see if
an item is good or defectivean item is good or defective Detect a defective productDetect a defective product
Does not correct deficiencies in Does not correct deficiencies in process or productprocess or product
It is expensiveIt is expensive IssuesIssues
When to inspectWhen to inspect Where in process to inspectWhere in process to inspect
© 2008 Prentice Hall, Inc. 6 – 62
When and Where to InspectWhen and Where to Inspect1.1. At the supplier’s plant while the supplier is At the supplier’s plant while the supplier is
producingproducing2.2. At your facility upon receipt of goods from At your facility upon receipt of goods from
the supplierthe supplier3.3. Before costly or irreversible processesBefore costly or irreversible processes4.4. During the step-by-step production During the step-by-step production
processprocess5.5. When production or service is completeWhen production or service is complete6.6. Before delivery to your customerBefore delivery to your customer7.7. At the point of customer contactAt the point of customer contact
© 2008 Prentice Hall, Inc. 6 – 63
InspectionInspection Many problemsMany problems
Worker fatigueWorker fatigue Measurement errorMeasurement error Process variabilityProcess variability
Cannot inspect quality into a Cannot inspect quality into a productproduct
Robust design, empowered Robust design, empowered employees, and sound processes employees, and sound processes are better solutionsare better solutions
© 2008 Prentice Hall, Inc. 6 – 64
Source InspectionSource Inspection Also known as source controlAlso known as source control The next step in the process is The next step in the process is
your customeryour customer Ensure perfect product Ensure perfect product
to your customerto your customer
Poka-yoke is the concept of foolproof devices or techniques designed to pass only
acceptable product
© 2008 Prentice Hall, Inc. 6 – 65
Service Industry InspectionService Industry Inspection
OrganizationOrganization What is What is InspectedInspected StandardStandard
Jones Law OfficeJones Law Office Receptionist Receptionist performanceperformanceBillingBilling
AttorneyAttorney
Is phone answered by the Is phone answered by the second ringsecond ringAccurate, timely, and Accurate, timely, and correct formatcorrect formatPromptness in returning Promptness in returning callscalls
Table 6.5Table 6.5
© 2008 Prentice Hall, Inc. 6 – 66
Service Industry InspectionService Industry Inspection
OrganizationOrganization What is What is InspectedInspected StandardStandard
Hard Rock HotelHard Rock Hotel Reception Reception deskdeskDoormanDoorman
RoomRoom
MinibarMinibar
Use customer’s nameUse customer’s name
Greet guest in less than 30 Greet guest in less than 30 secondssecondsAll lights working, spotless All lights working, spotless bathroombathroomRestocked and charges Restocked and charges accurately posted to billaccurately posted to bill
Table 6.5Table 6.5
© 2008 Prentice Hall, Inc. 6 – 67
Service Industry InspectionService Industry Inspection
OrganizationOrganization What is What is InspectedInspected StandardStandard
Arnold Palmer Arnold Palmer HospitalHospital
BillingBilling
PharmacyPharmacy
LabLabNursesNurses
AdmissionsAdmissions
Accurate, timely, and Accurate, timely, and correct formatcorrect formatPrescription accuracy, Prescription accuracy, inventory accuracyinventory accuracyAudit for lab-test accuracyAudit for lab-test accuracyCharts immediately Charts immediately updatedupdatedData entered correctly and Data entered correctly and completelycompletely
Table 6.5Table 6.5
© 2008 Prentice Hall, Inc. 6 – 68
Service Industry InspectionService Industry Inspection
OrganizationOrganization What is What is InspectedInspected StandardStandard
Olive Garden Olive Garden RestaurantRestaurant
BusboyBusboy
BusboyBusboy
WaiterWaiter
Serves water and bread Serves water and bread within 1 minutewithin 1 minuteClears all entrée items and Clears all entrée items and crumbs prior to dessertcrumbs prior to dessertKnows and suggest Knows and suggest specials, dessertsspecials, desserts
Table 6.5Table 6.5
© 2008 Prentice Hall, Inc. 6 – 69
Service Industry InspectionService Industry Inspection
OrganizationOrganization What is What is InspectedInspected StandardStandard
Nordstrom Nordstrom Department Department StoreStore
Display areasDisplay areas
StockroomsStockrooms
SalesclerksSalesclerks
Attractive, well-organized, Attractive, well-organized, stocked, good lightingstocked, good lightingRotation of goods, Rotation of goods, organized, cleanorganized, cleanNeat, courteous, very Neat, courteous, very knowledgeableknowledgeable
Table 6.5Table 6.5
© 2008 Prentice Hall, Inc. 6 – 70
Attributes Versus VariablesAttributes Versus Variables AttributesAttributes
Items are either good or bad, Items are either good or bad, acceptable or unacceptableacceptable or unacceptable
Does not address degree of failureDoes not address degree of failure VariablesVariables
Measures dimensions such as weight, Measures dimensions such as weight, speed, height, or strengthspeed, height, or strength
Falls within an acceptable rangeFalls within an acceptable range Use different statistical techniquesUse different statistical techniques
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TQM In ServicesTQM In Services
Service quality is more difficult to Service quality is more difficult to measure than the quality of goodsmeasure than the quality of goods
Service quality perceptions depend Service quality perceptions depend on on Intangible differences between Intangible differences between
productsproducts Intangible expectations customers Intangible expectations customers
have of those productshave of those products
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Service QualityService QualityThe Operations Manager must The Operations Manager must recognize:recognize:
1.1. The tangible component of The tangible component of services is importantservices is important
2.2. The service process is importantThe service process is important3.3. The service is judged against the The service is judged against the
customer’s expectationscustomer’s expectations4.4. Exceptions will occurExceptions will occur
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ServiceServiceSpecificationsSpecifications
at UPSat UPS
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Determinants of Service Determinants of Service QualityQuality
ReliabilityReliability ResponsivenessResponsiveness CompetenceCompetence AccessAccess CourtesyCourtesy CommunicationCommunication
CredibilityCredibility SecuritySecurity Understanding/ Understanding/
knowing the knowing the customercustomer
TangiblesTangibles
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Service Recovery StrategyService Recovery Strategy Managers should have a plan for Managers should have a plan for
when services failwhen services fail Marriott’s LEARN routineMarriott’s LEARN routine
ListenListen EmpathizeEmpathize ApologizeApologize ReactReact NotifyNotify