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BUSNEMBA 653 Operations Management

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Explain how to evaluate quality in both goods and services and develop ... Quality included in all company processes ... Total Quality Management ... – PowerPoint PPT presentation

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Title: BUSNEMBA 653 Operations Management


1
BUSN/EMBA 653 Operations Management
  • Week 3 -- Total Quality

2
Lesson Objectives
  • Apply Scriptural wisdom to organizational
    management issues.
  • Explain how to evaluate quality in both goods and
    services and develop procedures and processes to
    improve or maintain high quality.
  • Define the various elements that comprise the
    costs of quality.

3
The Quality Movement
  • Process control charts -- 1920s
  • Statistics to measure quality of wartime
    production
  • Post-WW II in Japan
  • If Japan can, why cant we? NBC documentary
  • U.S. fighting back -- Taurus versus Accord

4
So, why the change?
  • Korean workers work 56 hours a week for an
    average 1.75 an hour and produce higher quality
    goods at lower prices. They can take away
    business from U.S. firms, in the United States
    and abroad, and eliminate U.S. jobs and companies
    in the process. There is nothing that clears the
    mind as quickly as fear. Schein (p. 282)

5
QC versus Total Quality
  • Defensive function
  • Emphasis on QC
  • The business of specialists
  • Reliance on inspection
  • Rework or scrap
  • Believed that higher quality must be more costly
  • Competitive weapon
  • Emphasis on prevention
  • Everybodys business
  • Quality included in all company processes
  • Quality, not only saves money, but increases
    market share

6
New Quality Dimensions
  • Recognition that quality can be defined in many
    ways and that companies can use quality as a
    competitive advantage.
  • The focus shifts from inside the business to
    listening to, understanding, and pleasing the
    customer outside.

7
Total Quality Management
  • A program to focus all organizational activities
    on enhancing quality for customers by redirecting
    the corporate culture and implementing management
    and statistical tools.

8
Key Concepts
  • Customer satisfaction
  • The need for continuous improvement
  • The cost of quality
  • Quality as a management process
  • Instilling a quality culture
  • Managing total quality

9
Customer Satisfaction
  • Customer satisfaction begins with a clear
    identification of constituency and with the
    desire to understand and speak the customers
    language.
  • Specifications requirements expectations
  • Customer expectations are met by doing the right
    things the right way the first time and 100
    percent of the time at a cost that represents
    value to the customer.

10
The Need for Continuous Improvement
  • Quality is a process not a program
  • No error is too small to ignore
  • Defects measured in parts per
  • 10,000 100,000 1,000,000
  • Constant change is challenging, requires
    calculated risk, no status quo

11
The Cost of Quality
  • The cost of making mistakes duplication missed,
    late, and wrong delivery scrap and repairs.
  • The cost of inspection to locate errors
  • The cost of preventing errors creating error
    free designs, training programs.
  • Estimated at 20-30 percent of sales.
  • Some include inventories as quality costs.

12
Quality as a Management System
  • For some companies, quality has been integrated
    into all management systems with performance
    indicators covering all functions and results.
    The principal goal of quality improvement is the
    improvement of the organization. The quality
    management system is the key to long-term
    survival and profitability.

13
Instilling a Quality Culture
  • Ideally, the goals of the quality effort and the
    supporting practices become the daily norm and
    are embedded in the line organization.
  • Quality is everyones business.
  • Empowerment, the team is the organization of
    choice.
  • A culture of trust and courtesy.

14
Managing Total Quality
  • Variety of quality implementations
  • One executive versus a team of 120 (Westinghouse)
  • Diffusion is varied.
  • Dedication of senior management beyond public
    announcements.
  • Leadership fashions the environment for change.

15
TQM Organizational Structure

Operating Employees
Supervisors
Direction of Support
Middle Managers
Top Managers
16
Process Management
  • Focus is on the process, not the specific product
    or service.
  • Characterized by ownership and accountability,
    measurement and objectives and informed
    employees.
  • Designated process owners

17
The Benefits of TQM
  • Motorola is now approaching its goal of 60
    defects or less per 1 billion units of its
    products.
  • In ten years, HP went from 4 defects per 1000
    soldered computer components to 2 per million
    soldiered components.
  • Xerox, HP and Stanley Tools have targeted a new
    goal of no defects in design, manufacturing or
    delivery.

18
Standards of Quality
  • Formerly managers determined levels of quality
  • Increased awareness of quality has inspired
  • ISO 9000 standards internationally established
    set of standards.
  • Malcolm Baldrige National Quality Award
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