1、Total Quality Management,Part 0: What is Quality? Part 1: Economics of Quality Part 2: TQM: Principles and Managerial Methods Part 3: TQM: Improvement Tools,Principal objectives of the lecture,What is quality? The economics of quality: What is the relationship of: Quality and Cost Quality and Produc
2、tivity Quality and Profitability What is total quality management?,What is Quality?,Five definitions of quality -Garvin,Transcendent Product-based User-based Manufacturing-based Value-based,Transcendent,“Quality is neither mind nor matter, but a third entity independent of the two Even though qualit
3、y cannot be defined, you know what it is.”-Robert M. Pirsig,Product-based,“Differences in quality amount to differences in the quantity of some desired ingredient or attribute.”-Lawrence Abbot,User-based,“Quality is fitness for use.”-Joseph M. Juran,Manufacturing-based,“Quality is the degree to whic
4、h a specific product conforms to a design or specification.”-Harold L. Gilmore“Quality is product uniformity around the target.”-Genichi Taguchi,Value-based,“Quality is the degree of excellence at an acceptable price and the control of variability at an acceptable cost.”-Robert A. Broh,Dimensions of
5、 quality,Performance (primary product characteristics) Features (“bells and whistles”) Reliability (frequency of field failures) Conformance (match with specifications) Durability (product life) Serviceability (speed, courtesy, or competence of repair) Aesthetics (“fits and finishes”) Perceived qual
6、ity (reputation and intangibles),Dimension Product Example: Service Example:,Stereo Amplifier Checking Account at Bank,Performance Signal-to-noise ratio,power Time to process customer requests,Features Remote control Automatic bill paying,Reliability Mean time-to failure Variability of time to proce
7、ss requests,Durability Useful life (with repair) Keeping pace with industry trends,Serviceability Ease of repair Resolution of errors,Courtesy of dealer Courtesy of teller,Esthetics Oak-finished cabinet Appearance of bank lobby,Reputation Consumer Reports ranking Advice of friends, years in business
8、,Source: Modified from Paul E. Plsek, “Defining Quality at the Marketing/Development Interface.” Quality Progress, June 1987, pp. 28-36.,Quality Specifications,Design quality inherent value of the product or service in the marketplace Conformance quality degree to which the product or service design
9、 specifications are met,Design Quality,Conformance Quality,Fitness of Use,Fitness of usedegree to which the final product or service meets the customers objectives,Economics of Quality,Quality,Cost,Productivity,Profitability,Traditional cost/quality tradeoff,Cost,Quality,Quality and cost,Unavoidable
10、 costs (Price of Conformance = POC) Appraisal Prevention Avoidable costs (Price of Nonconformance = PONC) Internal failure External failure,Appraisal costs,Test and inspection materials and services Wages of inspection personnel Product quality audits Maintenance of test equipment Customer satisfact
11、ion audits Supplier appraisals Employee surveys Mystery shopper program,Prevention costs,Quality planning Process control Education and training Preventive maintenance Supplier training/certification Failure analysis Customer relationship management Quality systems development,Internal failure costs
12、,Scrap Rework Downtime/overtime Downgrading/disposition Analysis of scrap/rework Accidents/injuries Employee turnover Loss of morale Handling grievances,External failure costs,Complaints processing Warranty Product recall Product liability Field service Repair Administrative costs,PONC estimates,COM
13、PANY YEAR PONC as percentage of sales,IBM 1980 15-40,Motorola 1986 13,Heinz 1989 ($350-400 Million),Motorola 1989 8 ($800 Million),General electric estimates,STAGE Cost per defect per product,Supplier inspection cost $0.003 Incoming inspection cost $0.03 Fabrication inspection cost $0.30 Subproduct
14、test cost $3.00 Final product test cost $30.00 Product service cost $300.00,Traditional processes,Cost,Conformance Quality,0%,100%,Total cost,PONC,POC,Emerging processes,Cost,Conformance Quality,0%,100%,Total cost,PONC,POC,Quality and productivity,Common roots: Design for manufacturability Simplicit
15、y Improved equipment Better maintenance Less downtime Worker motivation,Quality and profitability,Profit = Revenue - Cost= (Price) (Sales) - Cost,Quality and profitability,1) Market Gains,Higher Quality,-Garvin,Improved Reputation,Higher Market Share,Experience-based economies,Higher Prices,Higher P
16、rofits,Quality and Profitability (cont.),2) Cost,Higher Quality,Lower per unit Cost,What is total quality management?,The total quality management triangle,Bedrock principles,Managerial methods,Improvement tools,T Q M,Bedrock principles,Customer focus Continuous improvement Total employee involvemen
17、t,Customer focus,“A customer is the most important person even in the office in person or by mail. A customer is not an interruption of our work he is the purpose of it.”-L. L. Bean,Customer focus,Know thy customers Who they are What their requirements are Only the customer can define customer satis
18、faction Quality is what the customer says it is! Organizational self-assessment,Continuous improvement,Continuous improvement of all processes - forever,RESULT,Process Process: The way everyone thinks, behaves, and acts every day,The quality incline,QUALITY,Total employee involvement,Inside every in
19、dividual is infinite creative potential Involvement is getting peoples ideas, and respecting those ideas Management has to ask for ideas Let them make their workplace better for themselves,Total employee involvement (cont.),In a service organization customer relations are a reflection of employee re
20、lations Quality is a state of mind No other resource improves with age,Total employee involvement,TQM is not a spectator sport,I hear and I forget I see and I remember I do and I understand,Managerial methods,Governance Organization Decision making,Managerial methods,“The people work in a system. Th
21、e job of the manager is to work on the system to improve it, constantly, with their help.”-Myron Tribus,Management by fact Prevention based Process-oriented,Managerial methods,Push Power Up,Managerial methods,Macho Manager,Benevolent Manager,Participative Manager,TQM Leader Manager,Do to,Do for,Do w
22、ith,Facilitate Enable,Process-oriented management,RESULT,Discipline Time management Personal development Participation Morale Communication Teamwork PEOPLE,Performance,Check with the result, not by the result,Relationship management,“The customer usually doesnt know what hes getting until he doesnt.
23、”-Ted Levitt,SellingMarketingRelationship management,Provider,Provider,Customer,Customer,What TQM is not,It is not a program It is not a gift It is not delegating responsibility for quality,Dr. Demings visit to Ford,“We wanted to talk to him about quality. He wanted to talk to us about management. W
24、e wanted to talk about quality improvement tools we could use. He wanted to talk to us about culture change. We wanted to know what programs would work. He wanted to know senior managements vision for the company.”-John A. Betti Under Secretary of Defense,What we have learned this lecture:,What is quality? The economics of quality: What is the relationship of: Quality and Cost Quality and Productivity Quality and Profitability What is total quality management? Quality “experts” and the quality improvement programs.,
