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Chapter 9 Notes.doc

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Ryerson University
Global Management Studies
GMS 401
Wally Whistance- Smith

Chapter 9 – Management of Qualitity INTRODUCTION Quality: The ability of a product or service to consistently meet or exceed customer expectations Prior to the increased level of Japanese competition in the North American marketplace in the 1980s, quality was not very important. Leading Japanese manufacturers Toyota, Honda, and Nissan have build a reputation for quality and reliability in their vehicles. Benefits of Good Quality Enhanced reputation for quality, Ability to command higher prices, Increased market share Greater customer loyalty, Lower liability costs, Fewer production or service problems, Higher profits Best In-Class and World-Class Customers’ expectations of quality are not the same for different classes of products or services. Best-in-class quality means being the best product or service in a particular class of products or services. Being a world-class company means that each of its products and services are considered best-in-class by its customers. Ethics and Quality Substandard work - Defective products, Substandard service, Poor designs, Shoddy workmanship, Substandard parts and materials Having knowledge of these and failing to correct and report it in a timely manner is unethical Quality Drives the Productivity Machine If production does it right the first time and produces products and services that are defect-free, waste is eliminated and costs are reduced. Quality management programs today are viewed by many companies as productivity improvement programs. Other Aspects of the Quality Picture Just-In-Time (JIT) manufacturing, Product standardization, Automated equipment, Preventive maintenance Customer Involvement Mechanisms to involve customer- Focus groups, Mkt surveys, Customer questionnaires, Mkt research programs Quality Function Deployment (QFD) - Formal system for identifying customer wants - Eliminate wasteful product features and activities that do not contribute Designing Products for Quality Designing for Robustness - Product will perform as intended even if undesirable conditions occur in production or in field. Designing for Manufacturability (DFM) - Products typically have fewer parts and can be assembled quickly, easily, and error-free. Designing for Reliability - Manufacturing parts to closer tolerances. Redundant components where necessary Designing and Controlling Production Processes The responsibility of producing products of high quality rests with the workers producing the product Two types of factors introduce variation in production processes - Controllable factors - can be reduced by workers and management - Uncontrollable factors - reduced only by redesigning or replacing existing processes THE EVOLUTION OF QUALITY MANAGEMENT Prior to the industrial revolution, in most cases skilled craftsmen performed all stages of production. Workmanship and reputation often provided motivation for a job to be done right. Division of labour accompanies the industrial revolution, each worker was responsible for a small portion Frederick Winslow Taylor, the “Father” of scientific management gave new emphasis to quality control including product inspection and gauging in his list of fundamental areas of manufacturing management 1924 - Statistical process control charts – used to monitor production 1930 - Tables for acceptance sampling - 1940’s - Statistical sampling techniques 1950’s - Quality assurance/TQC – primary focus to include marketing, product design, and after sale service. 1960’s - Zero defects – focused on managements role, and the expectation of perfection from each employee 1970’s - Quality assurance in services QUALITY: THE BASICS Dimensions of Product Quality include; Performance – main characteristic of function of the product (everything works, ride, handling, leg room) Aesthetics – appearance, feel, smell, taste (interior design, soft touch) Special features – extra characteristics or secondary functions (convenience, high tech) Safety – reduction or elimination of risk of injury or harm (airbags) Reliability – consistency of performance (infrequency of breakdowns) Durability – the useful life of the product or service (long life, resistance to rust and corrosion) Perceived Quality – subjective evaluation of quality (e.g. reputation, image, top rated car - cadillac) Service after Sale – warrantees, maintenance, and handling of complaints Dimensions of Service Quality include; Tangibles – the physical appearance of facilitates, equipment, personnel, and communication materials Convenience – the ability and accessibility of the service Reliability – the ability to perform a service dependably, consistently, and accurately Responsiveness – the willingness of providers to help customers in unusual situations & to deal with problems Time – the speed with which service is delivered Assurance – the knowledge exhibited by personnel, and their ability to convey trust and confidence Courtesy – the way customers are treated by employees who come into contact with them All dimensions must be stated in terms of specific, measureable characteristics (e.g. when buying a car, you want to know how many clicks it has) otherwise they are too abstract to be applied operationally The Determinants of Quality Design, capability of production processes, How well it conforms to the design in production, Ease of use, Service after delivery, Customer service, Organizational quality culture Quality of Design: Characteristics designers specify for a product or service Design characteristics must take into consideration customer wants, production capabilities, safety, costs, etc A poor design can result in difficulties in production or service Quality of Conformance: The degree to which goods or services conform to the specification of the designers The is affected by factors such as characteristics of material, capability of equipment used, skills and training, monitoring process to assess conformance, and the taking of corrective actions. Ease of use and user instructions are important. They increase the chance that a product will be used for its intended purpose, and function properly and safely. Service After Delivery - When products/services to not perform as expected, it is important to remedy the situation through recall/repair, replacement, or refund to satisfy the customer The Consequences of Poor Quality Loss of business, Liability, Productivity loss, Costs The Costs of Quality classified into 4 categories  Internal Failure Costs, External Failure Costs, Appraisal Costs, Prevention Costs Failure Costs: caused by defective parts or products or by faulty services Internal Failures: discovered during production – caused by defective material, faulty equipment, etc Costs include lost production time, scrap and rework, investigation costs, possible equipment damage, and possible employee injury. External Failures: discovered after delivery to the customer. Costs include warranty work, handling of complaints, replacements, liability/litigation, payments to customers, loss of customer goodwill, opportunity costs related to lost sales. Appraisal Cost: costs of inspection and testing. Include costs of inspectors, testing, test equipment, labs, quality audits, and field testing. Prevention Costs: Costs of preventing defects from occurring. Include costs such as quality planning and admin systems, working with vendors, training, quality control procedures, extra attention in both design and production phases to decrease the probability of defective workmanship. Internal and External – represent costs related to poor quality Appraisal and Prevention – represent costs investments for achieving good quality QUALITY GURUS W. Edwards Deming - Assisted Japan in improving productivity and quality. Complied a famous list of 14 points needed to achieve quality. His message was that the cause of inefficiency & poor quality is the system, not the employees. Philip B. Crosby - In Quality Is Free contends that a company should have the goal of zero defects “Do it right the first time” Armand V. Feigenbaum - Developed the concept of total quality control Kaoru Ishikawa - Developed the concept of quality circles and use of cause and effect (fishbone diagrams) for problem solving and the implementation of quality circles. He was the first expert to call attention to the internal customer, the next employee in the process. Joseph M. Juran - Also taught Japanese manufactures how to improve the quality of their goods. He wrote the Quality Control Handbook Genichi Taguchi - Best known for the Taguchi loss function, which involves a formula for determining the cost of poor quality. Associated with robust product design: a design which results in acceptable product during manufacturing and use under varied conditions QAULITY AWARDS Quality awards have been established to generate awareness and interest in quality. The following two awards and well known and given annually to firms that have integrated quality management in their operations The Baldrige Award: Given by the U.S government to recognize quality achievement of U.S companies Canada Awards for Excellence: Award recognizing outstanding quality achievement administered by the National Quality Institute (NQI) QUALITY CERTIFICATION The purpose of the Internation Organization for Standardization (ISO) is to promote worldwide standards that will improve operating efficiency and productivity, and reduce costs. ISO 9000: A set of international standards on quality management and quality assurance, critical to international business. They must go through a process that involves documenting quality procedure and on-site assessment. The process often takes 1ISO9000nths. WitHelpscompaniesdeterminewhichstandardn an ISO directory that companies seeking suppliers can refer to. ofISO9001,9002,and9003applies Registration Process-ISO9001n organizOutlinesguidelinesforcompaniesthatm is good enough, it may ask an accredited registrar or other third party audit team for
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