Operation management 10e heizer render chapter 06

Six Sigma Statistical definition of a process that is 99.9997% capable, 3.4 defects per million opportunities DPMO defects, lower costs, and improve customer satisfaction...  Two mean

Outline – Continued

Outline – Continued

Variables

Learning Objectives

When you complete this chapter you

should be able to:

quality standards

Taguchi concepts

Managing Quality Provides a

Competitive Advantage

Arnold Palmer Hospital

 Virtually every type of quality tool is

Quality and Strategy

differentiation, low cost, and response strategies

sales and reduce costs

a demanding task

Two Ways Quality Improves Profitability

Improved

 Increased productivity

 Lower rework and scrap costs

 Lower warranty costs

Reduced Costs via

The Flow of Activities

Customer focus, Continuous improvement, Benchmarking, Just-in-time, Tools of TQM

Yields: How to do what is important and to be

accomplished Employee Fulfillment

Empowerment, Organizational commitment

Yields: Employee attitudes that can accomplish

what is important Customer Satisfaction

Winning orders, Repeat customers

Yields: An effective organization with

Defining Quality

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

American Society for Quality

measurable attributes of the product

Key Dimensions of Quality

Key Dimensions of Quality

Malcom Baldrige National

Fresh Foods, Park Place Lexus, North Mississippi Medical Center, The Bama Companies, Richland College, Texas Nameplate Company, Inc.

education, and a more

perfect method than

persistence

Costs of Quality

potential for defects

products, parts, and services

parts or service before delivery

after delivery

zero defects

Ethics and Quality

Management

healthy, safe, quality products and services

 Poor quality risks injuries, lawsuits,

recalls, and regulation

they respond to problems

considered

International Quality

Standards

 Common quality standards for products sold in Europe (even if made in U.S.)

 2000 update places greater emphasis on leadership and customer satisfaction

ISO 14000 Environmental Standard

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

Deming’s Fourteen Points

3 Build quality into the product; stop

depending on inspection

performance, not price

and service

6 Start training

Deming’s Fourteen Points

departments

education and self-improvement

on the transformation

Continuous Improvement

improvement of all processes

centers including suppliers and customers

Procedures

2 Do Test the plan

3 Check

Is the plan working?

4 Act Implement the plan

1.Plan Identify the improvement and make

a plan

Shewhart’s PDCA Model

Figure 6.3

Six Sigma

 Statistical definition of a process that

is 99.9997% capable, 3.4 defects per million opportunities (DPMO)

defects, lower costs, and improve customer satisfaction

 Two meanings

 Statistical definition of a process that

is 99.9997% capable, 3.4 defects per million opportunities (DPMO)

defects, lower costs, and improve customer satisfaction

Six Sigma Program

adopted and enhanced by Honeywell and GE

process improvement

Six Sigma

1 Define critical outputs

and identify gaps for improvement

collect process data

make sure new performance

DMAIC Approach

Six Sigma Implementation

opportunities as a standard metric

(Champions)

experts (Black Belts, Green Belts, etc.)

This cannot be accomplished without a major

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



Quality Circles

regularly to solve problems

solving, and statistical methods

properly

Use inte

rnal ben chm

arki ng

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Benchmarking

Selecting best practices to use as a

standard for performance

benchmark

information

Benchmarking Factors for

Web Sites

Use of meta tags Yes: 70%, No: 30%

Meaningful homepage title Yes: 97%, No: 3%

Unique domain name Yes: 91%, No: 9%

Search engine registration Above 96%

Average loading speed 28K: 19.31, 56K:

10.88, T1: 2.59

Average number of spelling errors 0.16

Visibility of contact information Yes: 74%, No: 26%

Presence of search engine Yes: 59%, No: 41%

Translation to multiple languages Yes: 11%, No: 89%

Best Practices for Resolving

Customer Complaints

complaints

service jobs

Just-in-Time (JIT)

Relationship to quality:

inventory and better, employ JIT system

easier-to-Just-in-Time (JIT)

including supply management

 Production only when signaled

 Inventory costs money and hides process and material problems

product quality

Just-In-Time (JIT) Example

Scrap

Unreliable Vendors Imbalances Capacity

Work in process inventory level (hides problems)

Just-In-Time (JIT) Example

Reducing inventory reveals problems so they can be solved

Scrap Unreliable

Vendors Imbalances Capacity

Taguchi Concepts

design methods to improve product and process design

variables affecting product variation

Quality Robustness

uniformly in adverse manufacturing and environmental conditions

conditions

process do not destroy product quality

Quality Loss Function

product moves away from what the customer wants

dissatisfaction, warranty and service, internal

scrap and repair, and costs to society

specifications are too simplistic

oriented quality

Target-Unacceptable Poor

Good Best Fair

Quality Loss Function

High loss Loss (to

Conformance-oriented quality keeps products within 3 standard

deviations

L = D2C

where

L = loss to society

D = distance from target value

C = cost of deviation

/ /

/ / //

/

Seven Tools of TQM

(a) Check Sheet: An organized method of

recording data

Seven Tools of TQM

(b) Scatter Diagram: A graph of the value

of one variable vs another variable

Seven Tools of TQM

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

identifies process elements (causes) that might effect an outcome

Cause

Materials Methods Manpower Machinery

Effect

Seven Tools of TQM

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

problems or defects in descending order of frequency

Seven Tools of TQM

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

describes the steps in a process

Seven Tools of TQM

(f) Histogram: A distribution showing the

frequency of occurrences of a variable

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

Target value

Lower control limit Time

Cause-and-Effect Diagrams

Material

(ball)

Method (shooting process)

Machine Manpower

Missed free-throws

Rim alignment

Rim size

Backboard stability

Rim height

Follow-through Hand position

Training

Concentration Consistency

Pareto Charts

Number of occurrences

Room svc Check-in Pool hours Minibar Misc.

Flow Charts

MRI Flowchart

physician

11 10

20%

9

8 80%

Statistical Process Control

(SPC)

tell when to take corrective action

 Measure the process

 When a change is indicated, find the assignable cause

 Eliminate or incorporate the cause

an item is good or defective

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

process

employees, and sound processes are better solutions

Source Inspection

your customer

to your customer

Poka-yoke is the concept of foolproof devices

or techniques designed to pass only

acceptable product

Service Industry Inspection

Organization Inspected What is Standard Jones Law Office Receptionist

performance Billing

Service Industry Inspection

Organization Inspected What is Standard Hard Rock Hotel Reception

desk Doorman Room Minibar

Use customer’s name

Greet guest in less than 30 seconds

All lights working, spotless bathroom

Restocked and charges accurately posted to bill

Service Industry Inspection

Organization Inspected What is Standard Arnold Palmer

Hospital Billing

Pharmacy

Lab Nurses Admissions

Accurate, timely, and correct format

Prescription accuracy, inventory accuracy

Audit for lab-test accuracy Charts immediately

updated Data entered correctly and completely

Service Industry Inspection

Organization Inspected What is Standard Olive Garden

Restaurant Busboy

Busboy Waiter

Serves water and bread within 1 minute

Clears all entrée items and crumbs prior to dessert

Knows and suggest specials, desserts

Service Industry Inspection

Organization Inspected What is Standard Nordstrom

Department

Store

Display areas Stockrooms Salesclerks

Attractive, well-organized, stocked, good lighting

Rotation of goods, organized, clean Neat, courteous, very knowledgeable

Attributes Versus Variables

 Measures dimensions such as weight,

speed, height, or strength

 Falls within an acceptable range

TQM In Services

measure than the quality of goods

on

products

have of those products

customer’s expectations

Service Specifications

at UPS

Service Recovery Strategy

when services fail