2022 t3 mmm710 w09 quality iii

Once upon a time, companies were used to contributing to good causes by donating part of their profits. This initiative had a twofold benefit: On one side, it was a great opportunity to gain media exposure and brand awareness and improve the donor’s positioning within its target group. On the other side, the company could deduct the donation for fiscal benefit purposes. As social and environmental pressure built up, new groups of interest started to generate concepts like sustainable development goals (SDGs) or environmental, social and corporate governance (ESG) models as an attempt to standardize these practices as a management model and make those initiatives become an operational issue. And thankfully, I think they are largely succeeding. More and more companies of all sizes are treating social and environmental impact as business concerns

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Business Process and

Operations Management

Week 9 Quality Management

The search for precision?

Week 1 - Introduction

Week 2 - Innovation Perspective on Operations Management

Week 3 - Sustainability Perspective on Operations Management

Week 4 - Strategic Perspective on Operations Management

Week 5 - Mid-term Review

Week 6 - Operations Planning

Week 7 - Forecasting

Week 8 - Resource Management

Week 9 - Quality Management (Assessment Task 1 due on 16 January 2023)

MMM710 Weekly Learning Schedule

Learning Outcomes

1 Explain the concepts and definitions of quality

2 Describe the quality philosophies and principles

•of Deming, Juran, and Crosby

3 Describe the concepts and philosophy of ISO 9000: 2000

5 Explain the categories of cost-of-quality measurement

7 Explain the concepts of kaizen and poka-yoke

(Statistical computations involving any of the quantitative

Compare Week 8 and Week 9

•How do you bring the plans to life?

•What do people do – at a micro level?

• If you are going to produce and sell a good or service

• You and the Consumer need to be confident that it

does what it is supposed to do

• Tell the Time

• Wash the Dishes

• Self-drive you safely to your destination (Driver-less Car)

• This seems to be self-evident

• However it was, and is, not always the case

• Cars and Lemons ….

The Key Quality Problem

• The Lemon Laws

• What is a ‘lemon’? The definition of a ‘lemon’ is a car (often new) that is found to be defective only after its purchase Any motor vehicle with numerous, severe defects that reoccur after multiple repair attempts is such and the term ‘lemon’ can also extend to any product with flaws too great or severe to serve its purpose

Consumer experiences Ms Cicchini purchased a brand new Alfa Romeo 147 in 2009 During the three year manufacturer’s

warranty period the vehicle had been back to the dealership approximately twenty times and had spent over 160 days in the workshop Ms Cicchini had made numerous calls and had sent hundreds of emails to the dealership She had even sent emails to the importer, manufacturer in Italy and the International CEO of Fiat Chrysler Automobiles in attempts to get a satisfactory

resolution After receiving an extended one year manufacturer’s

The Lemon Laws

• A ‘lemon’

• A car (often new)

• found to be defective only after its purchase

• Any motor vehicle with numerous, severe defects that reoccur after multiple

repair attempts is such and the term ‘lemon’

• can also extend to any product with flaws too great or

severe to serve its purpose

• Ms Cicchini purchased a brand new Alfa Romeo 147 -2009

• During the three year manufacturer’s warranty period

Spent over 160 days in the workshop

The Lemon Laws

• It is one thing for your organisation to be able to control quality

• However you are dependent on all of your suppliers

• The Quality Systems have been developed so

• You are able to verify that your Suppliers are unlikely to deliver goods or services with Quality Problems

• Important for the Car Industry, the Food Industry, the ……

• All industries

Quality, Lemons and the Supply Chain

Built 1632–53 Cost – Today’s money: $1Billion US Construction project

employed some 20,000 artisans under the guidance of a board of architects led by the court architect to the emperor, Ustad Ahmad Lahauri

THE TAJ MAHAL

The Point is?

• There were specifications

• It was designed and managed to meet the specifications

• It is still standing – and admired

• They understood this concept of Quality

• - It is possible to build or create something that is very

complex and do it well

Decided to rebuild his version of the car

• The components of each car would be so lovingly

sculptured , and machined with such accuracy

• The resulting cars

• ‘Perfection lies in the small things’

• Charles Royce

• However

•Perfection is no small thing

• This is the quest for Quality

18

– How can the clocks be improved?

• The Grand Challenge

•Longitude places a ship at sea

• Requires accurate time (exact)

• Many ships sank due to this problem

• Harrison was interested

• This was a major leap forward

•But the process continued

The Orion Oil Rig – North Sea

• Set into place 1967

•600 metres from site

• Today this would

•not happen

• The expectation &

•Capability Has increased

• GPS

So What is this Thing ‘Quality’

• The Quality Movement arose in the 1930’s

•Quality as

• ‘made to specifications’

• ‘deliver on the promise

• ‘doing it right the first time’

•Often confused with being the best, most expensive

• The Rolls Royce story is essentially one of understanding quality at every level of the process

– And delivering a product that is precise in every way

W Edwards Deming’s Quality Management

Philosophy

• Focuses on improving product and service quality by reducing

variability in goods and services design

• Higher quality leads to higher productivity and lower costs

 Leads to improved market share and long-term competitive strength

• Deming cycle - Plan, do, study, and act (PDSA)

• 14 Absolutes of Quality

1 Create constancy of purpose for improving products and services.

2 Adopt the new philosophy.

3 Cease dependence on inspection to achieve quality.

4 End the practice of awarding business on price alone; instead, minimize total cost

by working with a single supplier.

5 Improve constantly and forever every process for planning, production and

service.

6 Institute training on the job.

7 Adopt and institute leadership.

8 Drive out fear.

9 Break down barriers between staff areas.

10 Eliminate slogans, exhortations and targets for the workforce.

11 Eliminate numerical quotas for the workforce and numerical goals for

management.

12 Remove barriers that rob people of pride of workmanship, and eliminate the

DEMING Summary Points

• Leadership and Clear Purpose

• Philosophy of

•Develop People

•Constant Improvement of Processes

•So People Can Work together with Pride

• Avoid destructive practices

Joseph Juran’s Principles

• Defined quality as fitness for use

• Sought to improve quality by working

• within a familiar cultural system

• Advocated the use of

• quality cost measurement

• Focused on elimination of defects

• using statistical tools for analysis

Crosby’s Absolutes of Quality Management

• Quality means conformance to requirements, not elegance

• There is no such thing as a quality problem

• Doing the job right the first time is always cheaper

• Only performance measurement

• is the cost of quality,

• which is the expense of non-conformance

• Only performance standard is Zero Defects

Formally Defined: Quality Management

• Systematic policies, methods, and procedures

• Used to ensure that goods and services are produced

• with appropriate levels of quality

• to meet the needs of customers

• Deals with issues relating to how goods and services

• are designed,

• created, and

• delivered to meet customer expectations

• Arguably the master skill of management

• Designing and Delivering on the Process

• Meeting or exceeding customers' expectations

• How well outputs of a manufacturing or service process conform to

the design specifications

• Quality of conformance: Extent to which a process is able to deliver

outputs that conform to the design specifications

• Specifications: Targets and tolerances determined by designers of goods and

services

Interlinking Quality and Profitability Performance

Service Quality

• Consistently meeting or exceeding customer expectations and

service-delivery system performance criteria

Principles of Total Quality

• Focus on customers and stakeholders

• Process focus supported by continuous improvement and learning

• Participation and teamwork by an organization’s employees

ISO 9000: 2000 Standards

• Define quality system standards, based on the premise that

management practices can be standardized

• Help outputs meet customer expectations and requirements

• Internationally recognized

• Prescribe documentation for all processes affecting quality

• This solves the TRUST PROBLEM

Six Sigma, Part 1

Business improvement approach

• Seeks to find and eliminate causes of defects and errors in manufacturing and service processes

• Focuses on outputs that are critical to customers

 Results in a clear financial return for the organization

Motorola, Six Sigma, 3.4 defects per million.

• 1986

Six Sigma, Part 2

Level of capability indicates a level of near-zero defects

• Defect: Mistake or error that is passed on to the customer

• Unit of work: Output of a process or an individual process step

Defects per unit (DPU) = No of defects discovered / No of units produced

Six Sigma, Part 3

• Quantifies quality performance by defects per million opportunities

(dpmo)

dpmo = No of defects discovered /Error opportunities

• In service applications, analogous to dpmo, the term errors per

million opportunities (epmo) is used

Key Concepts of Implementing Six Sigma

• Emphasizing dpmo or epmo as a standard metric that can be applied

to all parts of an organization

• Providing extensive training followed by project team deployment

• Focusing on corporate sponsors responsible for supporting team

activities

Key Concepts of Implementing Six Sigma

• Creating highly qualified process improvement experts

• Ensuring that appropriate metrics are identified early in the process

and that they focus on business results

• Setting stretch objectives for improvement

DMAIC Process for Implementation of Six Sigma,

Part 1

Define (D)

• Identify customers and their priorities

• Identify and define a suitable project

• Identify CTQs (critical-to-quality characteristics)

Measure (M)

• Determine how to measure a process and how it is performing

• Identify key internal processes that influence CTQs

• Measure current defects

Analyze (A)

• Determine likely causes of defects

• Understand why defects are generated by identifying the key variables that cause

DMAIC Process for Implementation of Six Sigma,

Part 3

Improve (I)

• Identify means to remove the causes of defects

• Confirm key variables and quantify their effects on CTQs

• Identify the maximum acceptable ranges of key variables and a system for measuring deviations of the variables

• Modify the process to stay within an acceptable range

Control (C)

• Determine how to maintain the improvements

Analyze (A) Determine likely causes of defects Understand why defects are generated by identifying the key variables that cause process variation

Cost-of-Quality Measurement

•Cost of quality: Costs associated with avoiding poor quality or those incurred as a result of poor quality

• Helps operations managers:

• Communicate better between operations managers and senior-level managers

• Identify and justify major improvement opportunities

• Evaluate the importance of quality and improvement in operations

Categories of Quality Costs, Part 1

•Prevention costs: Expended to keep nonconforming goods and services from being made and reaching the customer

• Quality planning costs

• Process-control costs

• Information-systems costs

• Training and general management costs

Categories of Quality Costs, Part 2

Appraisal costs: Help ascertain quality levels through measurement and data analysis to detect and correct problems

• Test and inspection costs

• Instrument maintenance costs

• Process-measurement and process-control costs

Categories of Quality Costs, Part 2

Appraisal costs: Help ascertain quality levels through measurement and data analysis to detect and correct problems

• Test and inspection costs

• Instrument maintenance costs

• Process-measurement and process-control costs

Categories of Quality Costs, Part 3

Internal failure costs: Incurred as a result of unsatisfactory quality that

is found before the delivery of a good or service

• Scrap and rework costs

• Costs of corrective action

• Downgrading costs

• Process failures

Categories of Quality Costs, Part 4

External failure costs: Incurred after poor-quality goods or services reach the customer

• Costs due to customer complaints and returns

• Goods & services recall costs and warranty & service guarantee claims

• Product-liability costs

Seven QC Tools

Flowcharts: Identifies the sequence of activities of flow of information in

a process

Run charts and control charts:

Run chart – Line graph with data plotted over time

Control chart – Includes upper and lower control limits

Check-sheets – Data-collection forms where the results are interpreted

directly on the forms without additional processing

Seven QC Tools (continued)

Histograms: Graphically represents the frequency of values within a

specified group

Pareto diagrams:

Separates the vital few from the trivial many

Provides directions for selecting projects for improvement

Cause-and-effect (or fishbone) diagrams: Presents a chain of causes and

events

Scatter diagrams: Graphical component of regression analysis

5-Why Technique of Root Cause Analysis

• Helps redefine a problem statement as a chain of causes and effects

to identify the source of the symptoms

• Asks why, ideally five times

• Uses the Seven QC tools

Kaizen Quality Improvement Approach

• Focuses on small, gradual, and frequent improvements over a long

term, with:

• Minimum financial investment

• Participation by everyone in the organization

Kaizen event: Intense and rapid improvement process

• All resources of a team or a department are directed into an improvement

project over a short time period

Poka-Yoke Quality Improvement Approach

• Advocates processes to embed mistake-proofing

• Advocates using automatic devices or methods to avoid simple human

error

• Advocates using applications that are simple, creative, and inexpensive

to implement

• Internal failure costs

• External failure costs

• Kaizen

• Kaizen event

• Poka-yoke

MMM710: Week 9

Seminar Slides

Seminar discussion

• To what extent do you think can the Lean-Six Sigma (LSS) ideology be

practically effective in bringing together the best of both worlds from its two parent ideologies - Six Sigma and Lean Operations across

manufacturing and service organizations?

• Try and inform your response by carefully reading through the posted

article [Yadav and Desai (2016)]

Week 1 - Introduction

Week 2 - Innovation Perspective on Operations Management

Week 3 - Sustainability Perspective on Operations Management

Week 4 - Strategic Perspective on Operations Management

Week 5 - Mid-term Review

Week 6 - Operations Planning

Week 7 - Forecasting

Week 8 - Resource Management

Week 9 - Quality Management (Assessment Task 1 due on 16 January 2023)

Week 10 - Operations Resilience

MMM710 Weekly Learning Schedule

62

The Problem of the Subject

• Understand the nature of Global Value Chains

• Identify the forces that are shaping and changing GVC’s

• Imagine the ways that your industries,

•and their GVC’s

• Will evolve over the life of your career

The Road Ahead

• Weeks 2 – 4: The Innovation, Sustainability and Strategic Perspectives of

the GVC

• Week 5: Review and Key Questions

• Weeks 6-7: Operations Planning and Forecasting

• Weeks 8-9: Resource and Quality Management

•Assignment Due Week 9

• Week 10: Operations Resilience

• Week 11: Review

•Online Exam during Exam Period