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Production Operations Management

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Production and Operations Management ­MGT613
VU
Lesson 23
MANAGEMENT OF QUALITY
After completing the lecture on Management of Quality, the POMA students should be able to
understand the term quality and the importance of Quality. The student should be able to learn the
Determinants of Quality, when they discuss Total Quality management also they should be able to
identify the various costs associated with Quality. The students should also be able to appreciate the
famous ISO 9000 and ISO 14000 quality systems, which are also actively seen in Pakistan. And last but
not the least out of curiosity than academic interest the students should be aware of philosophies of
Quality Gurus.
Introduction
Quality Management can be understood only if we are able to understand the term quality, which is
defined as
Quality is the ability of a product or service to consistently meet or exceed customer expectations.
Quality as determinant of Revenue has been often neglected, people tend to associate quality with high
price of the product or item they want to purchase, historically speaking this is an incorrect statement.
The debate between American and Japanese philosophy proves that quality is offered free of cost and is
the prime source of revenue or profit.
When the American industry in 70s and 80s talked about cost cutting and productivity improvement
they did not paid heed to Quality Management, which was the "Holy Grail" for the Japanese
Industry.
When Japanese manufacturers entered and occupied the American Markets the only thing that made
their products and services better than the Americans was the concept of Quality, which led to
increase in the revenues and productivity of Japanese manufacturers.
Evolution of Quality Management
1. Prior to Industrial Revolution, the skilled craftsman performed all stages of production. Pride in
workmanship and reputation often formed the basis of producing a quality well. One or small group
of workers was responsible for the entire product. After industrial revolution and specialization and
division of labour each worker was then responsible for small portion of work. This led to loss in
pride of workmanship and failure to produce quality products.
2.
Frederick Winslow Taylor the father of scientific management brought back the concept of quality
by incorporating product inspection as well as focusing on the importance of manufacturing
management.
3.
G.S. Radford introduced the concept of quality in the product design stage and linked high quality
with increased productivity and lower costs.
4.
1924 ­ W. Shewhart of Bell Technologies introduced the Statistical process control charts.
5.
1930 ­ H.F.Dodge and H.G.Romig also of Bell Technologies introduced Tables for acceptance
sampling.
6.
1940's - Universities, Bell Technologies and US Army were using Statistical sampling techniques
for training engineers. American Society for Quality Control aka ASQC ( now ASQ) was formed
during the same era
7.
1950's - Quality assurance/TQC (The era of Deming, Juran and Feigenbaum) which changed the
concepts of quality for ever.
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Production and Operations Management ­MGT613
VU
8. 1960's - Zero defects championed by Quality Guru Phillip Crosby. It produced the perfect missile
for US army
9. 1970's - Quality assurance in services like health care, banking and travel industry.
10. Late 1970s the quality assurance concept changed to Strategic quality approach, Harvard Professor
David Garvin advocated preventing mistakes from occurring all together.
Quality Assurance vs. Strategic Approach
Strategic Approach is the SUPERLATIVE form of Quality Assurance
Quality Assurance places emphasis on finding and correcting defects before reaching
market
Strategic Approach is Proactive, focusing on preventing mistakes from occurring and places
greater emphasis on customer satisfaction
Quality Guru
The Quality Gurus are given more respect and recognized as Key Contributors to Quality Management.
Presented below is their contributions in a nut shell, students should learn to recognize these
1. Walter Shewhart is also known as "Father of statistical quality control"
2. W. Edwards Deming presented 14 points for quality management which focused primarily on
common cause of variation.
3. Joseph M. Juran is famous for his concept of "Quality is the fitness for use".
4. Armand Feigenbaum said, "Quality is a total field or total function".
5. Philip B. Crosby is famous for his philosophy that "Quality is free".
6. Kaoru Ishikawa- presented the "fish bone diagram" or "cause effect diagram".
7. Genichi Taguchi ­robust design for designing products insensitive to change in environment.
Taguchi's contribution was, "Taguchi loss function".
Dimensions of Quality
The concepts of dimensions of quality represent the fact that customers value a product keeping in
mind different dimensions. Quality and Operations Managers come across customer perceptions
relating to demand for durable, reliable, performance to a standard and that too in away that is
aesthetically correct.
1.
Performance - main characteristics of the product/service
2.
Aesthetics - appearance, feel, smell, taste
3.
Special Features - extra characteristics
4.
Conformance - how well product/service conforms to customer's expectations
5.
Reliability - consistency of performance
6.
Durability - useful life of the product/service
7.
Perceived Quality - indirect evaluation of quality (e.g. reputation)
8.
Serviceability - service after sale
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Production and Operations Management ­MGT613
VU
Examples of Quality Dimensions
Dimension
(Product)
(Service)
Automobile
Auto Repair
1. Performance
Everything works, fit &
All work done, at agreed
finish
price
Ride, handling, grade of
Friendliness, courtesy,
materials used
Competency, quickness
2. Aesthetics
Interior design, soft touch
Clean work/waiting area
3. Special features Gauge/control placement Location, call when ready
Cellular phone, CD
Computer diagnostics
player
Examples of Quality Dimensions (Cont'd)
Dimension (Product)
(Service)
Automobile
Auto Repair
5. Reliability
Infrequency of breakdowns
Work done correctly,
ready when promised
6. Durability
Useful life in miles, resistance
Work holds up over
to rust & corrosion
time
7. Perceived
Top-rated car
Award-winning service
quality
department
8.
Handling of complaints and/or Handling of complaints
Serviceability
requests for information
Service Quality
Tangibles
Convenience
Reliability
Responsiveness
Time
Assurance
Courtesy
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Production and Operations Management ­MGT613
VU
Examples of Service Quality
Dimension
Examples
1. Tangibles
Were the facilities clean, personnel neat?
2. Convenience
Was the service center conveniently located?
3. Reliability
Was the problem fixed?
4. Responsiveness
Were customer service personnel willing and able to answer questions?
5. Time
How long did the customer wait?
6. Assurance
Did the customer service personnel seem knowledgeable about the
repair?
7. Courtesy
Were customer service personnel and the cashier friendly and courteous?
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Table of Contents:
  1. INTRODUCTION TO PRODUCTION AND OPERATIONS MANAGEMENT
  2. INTRODUCTION TO PRODUCTION AND OPERATIONS MANAGEMENT:Decision Making
  3. INTRODUCTION TO PRODUCTION AND OPERATIONS MANAGEMENT:Strategy
  4. INTRODUCTION TO PRODUCTION AND OPERATIONS MANAGEMENT:Service Delivery System
  5. INTRODUCTION TO PRODUCTION AND OPERATIONS MANAGEMENT:Productivity
  6. INTRODUCTION TO PRODUCTION AND OPERATIONS MANAGEMENT:The Decision Process
  7. INTRODUCTION TO PRODUCTION AND OPERATIONS MANAGEMENT:Demand Management
  8. Roadmap to the Lecture:Fundamental Types of Forecasts, Finer Classification of Forecasts
  9. Time Series Forecasts:Techniques for Averaging, Simple Moving Average Solution
  10. The formula for the moving average is:Exponential Smoothing Model, Common Nonlinear Trends
  11. The formula for the moving average is:Major factors in design strategy
  12. The formula for the moving average is:Standardization, Mass Customization
  13. The formula for the moving average is:DESIGN STRATEGIES
  14. The formula for the moving average is:Measuring Reliability, AVAILABILITY
  15. The formula for the moving average is:Learning Objectives, Capacity Planning
  16. The formula for the moving average is:Efficiency and Utilization, Evaluating Alternatives
  17. The formula for the moving average is:Evaluating Alternatives, Financial Analysis
  18. PROCESS SELECTION:Types of Operation, Intermittent Processing
  19. PROCESS SELECTION:Basic Layout Types, Advantages of Product Layout
  20. PROCESS SELECTION:Cellular Layouts, Facilities Layouts, Importance of Layout Decisions
  21. DESIGN OF WORK SYSTEMS:Job Design, Specialization, Methods Analysis
  22. LOCATION PLANNING AND ANALYSIS:MANAGING GLOBAL OPERATIONS, Regional Factors
  23. MANAGEMENT OF QUALITY:Dimensions of Quality, Examples of Service Quality
  24. SERVICE QUALITY:Moments of Truth, Perceived Service Quality, Service Gap Analysis
  25. TOTAL QUALITY MANAGEMENT:Determinants of Quality, Responsibility for Quality
  26. TQM QUALITY:Six Sigma Team, PROCESS IMPROVEMENT
  27. QUALITY CONTROL & QUALITY ASSURANCE:INSPECTION, Control Chart
  28. ACCEPTANCE SAMPLING:CHOOSING A PLAN, CONSUMERíS AND PRODUCERíS RISK
  29. AGGREGATE PLANNING:Demand and Capacity Options
  30. AGGREGATE PLANNING:Aggregate Planning Relationships, Master Scheduling
  31. INVENTORY MANAGEMENT:Objective of Inventory Control, Inventory Counting Systems
  32. INVENTORY MANAGEMENT:ABC Classification System, Cycle Counting
  33. INVENTORY MANAGEMENT:Economic Production Quantity Assumptions
  34. INVENTORY MANAGEMENT:Independent and Dependent Demand
  35. INVENTORY MANAGEMENT:Capacity Planning, Manufacturing Resource Planning
  36. JUST IN TIME PRODUCTION SYSTEMS:Organizational and Operational Strategies
  37. JUST IN TIME PRODUCTION SYSTEMS:Operational Benefits, Kanban Formula
  38. JUST IN TIME PRODUCTION SYSTEMS:Secondary Goals, Tiered Supplier Network
  39. SUPPLY CHAIN MANAGEMENT:Logistics, Distribution Requirements Planning
  40. SUPPLY CHAIN MANAGEMENT:Supply Chain Benefits and Drawbacks
  41. SCHEDULING:High-Volume Systems, Load Chart, Hungarian Method
  42. SEQUENCING:Assumptions to Priority Rules, Scheduling Service Operations
  43. PROJECT MANAGEMENT:Project Life Cycle, Work Breakdown Structure
  44. PROJECT MANAGEMENT:Computing Algorithm, Project Crashing, Risk Management
  45. Waiting Lines:Queuing Analysis, System Characteristics, Priority Model