School of Business, Management, &
Accountancy
QUALITY &
OPERATIONS
MANAGEMENT
Chapter 4
What is Quality?
Quality
- has been defined as excellence,
conformance to specifications,
fitness for use, and value for the
price.
Quality in products means reliability,
durability, serviceability, and more.
Quality in services means reliability
or consistency, caring about your
customers, and more.
Kano Model suggests that “today’s
delights are tomorrow’s
expectations.”
Kano Model A theory of product
development and customer
satisfaction developed in the
1980s by Noriaki Kano that clas-
sifies customer preferences into
five categories:
attractive
one-dimensional
must-be
indifferent
reverse
How do you ensure Quality?
Make Quality a Strategic Issue
Planning for quality must be part of the
organization’s comprehensive business planning.
Any focus on quality must be championed by
effective leaders who understand at least the
basics of quality, who believe in it as a strategic
necessity, and who engage in training and
improvement activities personally, not just sign
memos about them and give speeches in support.
The leaders must lead by example.
How do you ensure Quality?
Promote Teamwork and Provide Training
Quality is not the responsibility of a quality
assurance department or quality control units. It’s
the responsibility of every employee in every area of
the organization; it has to be built into any product
or service that you deliver.
The employees who execute the processes are the
experts in how those processes work—not just as
they were designed to work, but also how they work
in real life. They own those processes, and they
should have authority and responsibility for
improving them.
How do you ensure Quality?
Meet or Exceed Your Customers’
Expectations
Focus on satisfying the customers. Those are the
people who buy the goods and services. Those are
the people who define “quality” through their needs
and wants.
How do you ensure Quality?
Meet or Exceed Your Customers’
Expectations
Focus on satisfying the customers. Those are the
people who buy the goods and services. Those are
the people who define “quality” through their needs
and wants.
How do you ensure Quality?
Improve Key Processes Continuously
When can you stop improving your designs and
processes? Never. Quality is a journey without end.
Even if your designs and processes are perfect now
—which is highly improbable—and even if you are
currently delight- ing your customers, don’t expect
that perfection and that delight to last.
How do you ensure Quality?
Work with Information: Get It, Analyze It,
Apply It
To manage operations, you need the following information:
Information about what potential and current customers
want and expect you to offer in your goods and services
Information about your markets and your industry,
particularly your competitors, both direct and indirect
Information about your current processes, similar processes
used by other organizations, and possibilities for improving
your processes through technology and zero-based thinking
Information about the organization’s financials
Information about critical business issues—issues identified
during strategic planning or operational goal setting as
objectives for ensuring the growth or survival of the
organization
Six Sigma for Quality
Improvement
A basic approach to improving products, services,
and processes can be found in the Six Sigma
methodology for quality management. It focuses on
customer requirements and reducing variation in
processes.
Six Sigma uses a specific approach and tools to
improve processes and products by using data to
reduce process variation. The technical goal of Six
Sigma is to reduce unacceptable output to no more
than 3.4 defects per million opportunities (DPMO).
Tools
Some tools are often used during more than one
phase, for different purposes; others may not be
used at all.
According to Kaoru Ishikawa, a quality pioneer, the
seven basic tools— flow charts, cause-and-effect
diagrams, Pareto charts, histograms, scatter
diagrams, run charts, and control charts—are
sufficient for removing 95 percent of all defects,
variations, and inconsistencies from any process.
Variation
The objective of the Six Sigma approach to quality is
to reduce variation in processes to produce outputs
that better satisfy customer requirements as
consistently as possible and to minimize waste.
Variation is the spread of data around the average
value, quantified in terms of standard deviation.
Six Sigma Methodology
The Six Sigma structure for improvement projects
generally consists of these five phases, often
described as DMAIC:
Define
Measure
Analyze
Improve
Control
Within each phase, the activities can vary widely,
depending on the specifics of the situation and the
person leading the initiative.
Define
Form an improvement project team.
Create a project charter.
1. Business case for the project—quantify the results
expected, especially the effect on the bottom line
2. The problem statement
3. The scope of the project
4. The goals and objectives of the project
5. Plan and milestones for the project
6. The members of the team and their roles and
responsibilities
Determine the customers’ needs and
requirements.
Create a high-level map of the process.
Measure
Refine the Y or Y’s that will be the project focus.
Define essential concepts.
Develop a more detailed process map.
Create a data collection plan.
A data collection plan is a chart consisting of columns
containing the following information:
1. Characteristics to measure
2. Metrics
3. Type of data (discrete or continuous data)
4. Operational definitions and procedures
5. Targets
6. Data collection forms
7. Sampling method(s)
Implement the data collection plan.
Calculate the current sigma level of the process.
Set performance targets.
Analyze
Analyze the data collected in the Measure phase.
1. For discrete data, the statistical tools most commonly used
are the Pareto chart and the pie chart.
2. For continuous data, if the data is collected using a frequency
distribution check sheet, it’s already in a form allowing
analysis.
Run chart A graph that
Analyze the process in greater detail.
plots the performance of
a process over time,
usually showing the data
as a line, with the Y axis
showing what is being
measured and the X axis
showing time
measurements.
Analyze
Create one or more small problem statements.
Analyze the root causes of the effects.
Correlation.
Design of Experiments.
List root causes and propose solutions.
Improve
Implement the solutions the project team has
proposed for the root causes.
Verify the results of the process changes with
independent data.
Determine process capability.
Control
Determine a method of technical control.
Create a response plan.
Close the project.
Control Chart A graph
used to determine whether a
process is in a state of statistical
control or not. It consists of a line
graph with a central line that
represents an estimate of the
process mean (average) and an
upper control limit and a lower
control limit, which form the
control area.