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Lecture 6

OM 300 Lecture 6: OM Chapter 6 Notes

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Operations Management
OM 300
David Cooper

Operations Management Chapter 6 Notes Managing Quality Defining Quality • An operations manager’s objective is to build a total quality management system that identifies and satisfies ____ needs • The totality of features and characteristics of a product or service that bears on its ability to satisfy stated or implied needs Quality and Strategy • Managing quality supports ____, _____, and _____ strategies • Quality helps firms increase ales and reduce costs • Building a quality organization is a demanding task Different Views • : better performance, more features • : conformance to standards, making it right the first time • : specific and measurable attributes of the product Implications of Quality 1. Company reputation ➢ _____ of new products ➢ Employment practices ➢ Supplier relations 2. Product liability ➢ Reduce _____ 3. Global implications ➢ Improved ability to compete Costs of Quality • _____ costs – reducing the potential for defects • _____ costs – evaluating products, parts, and services • _____ costs – producing defective parts or service before delivery • _____ costs – defects discovered after delivery Ethics and Quality Management • Operations managers must deliver ____ , ____, quality products and services • Poor quality _____, lawsuits, recalls, and regulation • Ethical conduct must dictate response to problems • All _____ must be considered International Quality • ISO 9000 series (Europe/EC) ➢ Common quality standards for products sold in Europe (even if made in U.S.) ➢ 2008 update places greater emphasis on leadership and customer requirements and satisfaction • ISO 14000 series (Europe/EC) Total Quality Management • Encompasses the 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 Seven Concepts of TQM 1. Continuous improvement 2. Six sigma 3. Employee empowerment 4. Benchmarking 5. Just-in-time (JIT) 6. Taguchi concepts (QLF) 7. Knowledge of TQM tools Continuous Improvement • Represents continual improvement of never-ending processes • Involves _____ operations and work centers including suppliers and customers ➢ People (manpower), equipment (machinery), materials, procedures (methods) Six Sigma • Two meanings: ➢ Statistical definition of a process that is 99.9997% capable, 3.4 defects per million opportunities (DPMO) ➢ A program designed to reduce defects, lower costs, save time, and improve customer satisfaction Six Sigma Program • Originally developed by Motorola, adopted and enhanced by Honeywell and GE • Highly structured approach to process improvement ➢ A strategy ➢ A discipline – DMAIC ➢ A set of 7 tools Six Sigma 1. D - Defines critical outputs and identify gaps for improvement 2. M – Measures the work and collect process data 3. A – Analyzes the data 4. I – Improves the process 5. C – Controls the new process to make sure new performance is maintained Implementing Six Sigma • Getting employees _______ in product and process improvements ➢ 85% of quality problems are due to process and material • Techniques 1. Build ______ networks that include employees 2. Develop open, supportive supervisors 3. Move ______ to employees 4. Build a high-morale organization 5. Create formal team structures Quality Circles • Group of employees who meet regularly to solve problems • Trained in planning, problem solving, and statistical methods • Often led by a facilitator • Very effective when done properly Benchmarking • Selecting the best practices to use as a standard for performance 1. Determine what to benchmark 2. Form a benchmark team 3. Identify benchmarking partners 4. Collect and analyze benchmarking information 5. Take action to match or exceed the benchmark Just-in-Time (JIT) • Relationship to quality: ➢ JIT cuts the cost of quality ➢ JIT improves quality ➢ Better quality means less inventory and better, easier-to-employ JIT system • “Pull” system of production scheduling including supply management ➢ Production only when signaled • Allows _______ inventory levels ➢ Inventory costs money and hides process and material problems • Encourages improved process and product quality Taguchi Concepts • Engineering and experimental design methods to improve product and process design ➢ Identify key component and process variables affecting product variation • Taguchi concepts ➢ Quality robustness ➢ Quality loss function ➢ Target-oriented quality Quality Robustness • Ability to produce products uniformly in adverse manufacturing and environmental conditions ➢ Remove the effects of adverse conditions ➢ Small variations in materials and process do not destroy product quality Quality Loss Function • Shows that costs increase as the product moves away from what the customer wants • Costs include customer dissatisfaction, warranty and service, internal scrap and repair, and costs to society • Traditional conformance specifications are too simplistic • L = D^2 * C ➢ L = loss of society ➢ D^2 = square of the distance from target value ➢ C = cost
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