BA- 208 OPERATIONS MANAGEMENT

Quality Management

Submitted by:

Lovely Tinguha

Submitted to:

Atty. Ni a Rica Teves

January 30, 2012

QUALITY the totality of features and characteristics of a product or services that bears on its ability to satisfy given needs MANAGEMENT The organization and coordination of the activities of an enterprise in accordance with certain policies and in achievement of defined objectives.

Quality consumers perspective Dimensions of quality ( manufactured products) a. Performance the basic operating characteristics of a product b. Features the extra items added to the basic features c. Reliability the probability that a product will operate properly within an expected time frame. d. Conformance the degree to which a product meets pre-established standards e. Durability how long the product lasts f. Serviceability the ease of getting repairs, the speed of repairs, and the courtesy and competence of the repair person g. Aesthetic how a product looks, feels, sounds, smells etc. h. Safety Assurance that the customer will not suffer injury or harm from a product i. Other perception subjective perceptions based on brand names, advertising and the likes. Dimensions of service quality a. Time and timeliness how long a customer must wait for service, and if it is completed on time. b. Completeness is everything the customer asked for provided? c. Courtesy How customers are treated by employees. d. Consistency is the same level of service provided to each customer each time?

e. Accessibility and convenience how easy it is to obtain the service f. Accuracy is the service performed right every time. g. Responsiveness how well the company reacts to unusual situations, which can happen frequently in a service company.

Quality on Producers Perspective.

Quality of conformance

Once the product designed has been determined, the producer perceives quality to how effectively the production process is able to conform to the specifications required by the design. The quality during production focuses on making sure that the product meets the specifications required by the designed.

Is making sure the product or service is produce according to designed.

Total Quality Management

History of TQM

W. Edwards Deming He is also known in Japan as the father of Quality Control As a teacher and a consultant of Japanese industries, he was able to convince companies to make use of statistical control and he is a major figure in the Japanese quality movements.

W.Edwards Deming philosophy toward product improvement

1. Create consistency of purpose toward product improvement to achieve long-term organizational goals

2. Adopt a philosophy of preventing poor-quality products instead of acceptable levels of poor quality as necessary to compete internationally 3. Eliminate the need for inspection to achieve quality by relying instead on statistical quality control to improve product and process design. 4. Select a few supplies or vendors based on quality commitment rather competitors prices. 5. Constantly improve the production process by focusing on the two primary sources of quality problems, the system and workers, thus increasing productivity and reducing costs. 6. Institute worker training that focuses on the prevention of quality problems and the use of statistical quality-control techniques. 7. In-still leadership among supervisors to help workers perform better. 8. Encourage employee involvement by eliminating the fear of reprisal for asking question or identifying quality problems 9. Eliminate barriers between departments, and promote cooperation and a team approach for working together. 10. Eliminating slogans and numerical targets that urge workers to achieve the higher performance level without first showing them how to do it. 11. Eliminate numerical quotas that employees attempt to meet at any cost without regard for quality. 12. Enhance worker pride, artisanry and self-esteem by improving supervision and the production process so that workers can perform to their capabilities. 13. Institute vigorous education and training programs in method of quality improvement throughout the organization, from top management down, so that continuous improvement can occur. 14. Develop a commitment from top management to implement the previous 13 points.

Deming wheel Its a four-wheel stage process for continuous quality improvement.

1. Plan. Identify problem and develop a plan for improvement 2. Do. Implement the plan on a test basis 3. Study/check. Assess the plan; is working 4. Act. Institutionalize improvement; continue the cycle.

Philip Crosby (1979) He had a book named, Quality Is Free He had this thats close enough attitude

Armand V. Feigenbaum He introduces total quality control This needs strong leadership from top management to improve quality and make it a continual process.

They believe that all employees at all levels of the organization, led by the top management, are responsible for continuous quality improvement.

Total Quality Management

TQM this emphasizes that top managements role in leading a total quality effort on which all employees at all levels must focus. All employees are responsible for continuous quality improvement, and quality is the focal point of all organizational function. This also emphasizes that quality is a strategic issue. The organization must decide what the customer wants in terms of quality and then strategic planning encompassing all functional areas to achieve goals for quality.

Continuous Process Improvement Is a classification; though it embodies the same basic philosophy and principle as TQM, Its management attention is on the business process of a company rather than its functions.

Principle of Total Quality Management

1. The customer defines quality, and customer satisfaction is the top priority 2. Top management must provide the leadership for quality 3. Quality is a strategic issue, and requires a strategic plan. 4. Quality is the responsibility of employees at all level of the organization. 5. All functions of the company must focus on continuous quality improvement to achieve strategic goals. 6. Quality problems are solved through cooperation among employees and management 7. Problem solving and continuous quality improvement use statistical quality control methods. 8. Training and Education of the employees are the basis for continuous quality improvement.

TQM throughout the Organization

1. Marketing and R&D they define what the consumer wants. 2. Engineering they design to meet customer expectation 3. Purchase acquires high quality parts and materials 4. Human Resources hires employees with required skills and provides training 5. Management must maintain a smooth flow through the production or service process 6. Shipping prevents product damage 7. After the sale quality service is as important as a quality product.

TQM and External Suppliers Companies who are adopting TQM wanted also their suppliers to provide them with quality supplies, thus they enter into a business relationship is called partnering, in which the supplier agrees to meet the companys quality standard, and in return the company enters into a long-term purchasing agreement that includes stable order and delivery schedule.

TQM and Customer Satisfaction The company needs to know what are the response of its customers, thus the product they produce meets the customers satisfaction, is the company meeting customers expectations, among others.

TQM and Information Technology Large manufacturing company uses ERP ( Enterprise Resource Planning software) Hotels and Airline companies uses DSS ( Decision Support System) Information technology help as a tool for companies to make product and services effective and efficient at the same time giving quality needed. However, the adaptation of Information Technology must be an organizational plan, to make it work according to what the company needs.

COST OF QUALITY

Cost of Achieving Good Quality The cost of a quality management program are prevention cost and appraisal cost.

Prevention Cost Cost of trying to prevent poor-quality products from reaching the customer.

Quality Planning Costs the cost of developing and implementing quality management program Product design Costs cost of designing product with quality characteristics Process Costs - cost expended to make sure the productivity process conforms quality specifications Training Costs cost of developing and putting on quality employees and management Information Cost cost of acquiring Information System

Appraisal Cost these are the cost measuring, testing, and analyzing materials, parts, products, and the productive process to ensure that product quality specifications are being met. Inspection and Testing inspecting products in various stages Test equipment cost cost of maintaining equipment used in testing product quality Operator cost cost of time spent by operators to gather data for testing product quality, to make equipment adjustments.

The Cost of Poor Quality

Internal Failure Cost are incurred when poor-quality products are discovered before they are delivered to customer.

Scrap cost discarding the product including labor and material Rework cost cost of fixing defective products Process failure cost- cost determining why the production process is producing poorquality products

Process downtime costs cost of shutting down to fix problem Price-downgrading cost cost of discounting defective or poor quality products that is selling as seconds

External Failure Cost incurred after the customer has received a poor- quality product and are primary related to customer service.

Customer complaint costs cost of investigating and responding satisfactorily to the complain Product return costs costs of returning poor quality products by customer. Warranty claim costs the cost of complying with product warranty Lost sale cost cost incurred because customers are dissatisfied ad will not make additional purchase

GISO 9000

International Organizational for Standardization headquartered in Geneva, Switzerland members about 130 countries. ISO is derived from a Greek word isos meaning equal. The purpose of ISO is to facilitate global consensus agreements on international quality standards. And this has resulted in a system of certifying suppliers to make sure they meet internationally accepted standards for quality management.

Reference:

Operations Management: Providing in Goods and Service. 3th ed. Dilworht, James. Dryden Press USA 2000 Operations Management 4th ed., Russell Robert et.al Prentice Hall Inc: Upper Saddle River, New Jersey 2003