QUALITY AND PERFORMANCE MANAGEMENT: Meeting Customer Expectation:

DIMENSIONS OF QUALITY Manufactured Products y Performance o basic operating characteristics of a product; how well a car handles or its gas mileage Features o extra items added to basic features, such as a stereo CD or a leather interior in a car Reliability o probability that a product will operate properly within an expected time frame; Conformance o degree to which a product meets preestablished standards Durability o how long product lasts before replacement; with care Serviceability o ease of getting repairs, speed of repairs, courtesy and competence of repair person Aesthetics o how a product looks, feels, sounds, smells, or tastes Safety o assurance that customer will not suffer injury or harm from a product; an especially important consideration for automobiles Perceptions o subjective perceptions based on brand name, advertising, and like

y y y y y y

Customers Perspectives y y y Fitness for use o how well product or service does what it is supposed to Quality of design o designing quality characteristics into a product or service A BMW and a Proton are equally fit for use, but with different design dimensions.

Company/Producers Perspectives y Quality of Conformance o Making sure the product is produced according to design I.e. If new tires do not conform to specifications, they wobble

Final Perspectives y y y y Customers and producers perspectives depend on each other Producers perspective: production process and COST Customers perspective: fitness for use and PRICE Customers view must dominate

COSTS OF QUALITY It is estimated that in the average manufacturing company, the total cost of quality may be as high as 35% of turnover, and in the public sector, as high as 50% of the cost of running the business. Where the best quality-oriented-organisations total quality costs are 5-10% of turnover or the cost of running the business. Cost of quality can be allocated to three major categories: 1. Failure costs. The costs if organisation fails to produce to requirements. y Internal i. Scrap Costs ii. Rework Costs iii. Process Failure Costs iv. Process Downtime Costs v. Price-Downgrading Costs y External i. Customer Complaint Costs ii. Product Return Costs iii. Warranty Claims Costs iv. Product Liability Costs v. Lost Sales Costs 2. Appraisal costs. The costs an organisation incurs checking whether or not it is producing to requirements. y Inspection and testing: costs of testing and inspecting materials, parts, and product at various stages and at end of process y Test Equipment Costs: costs of maintaining equipment used in testing quality characteristics of products

Operator Costs: costs of time spent by operators to gather data for testing product quality, to make equipment adjustments to maintain quality, and to stop work to assess quality 3. Prevention costs. Money spent on trying to avoid quality problems y Quality Planning Costs: costs of developing and implementing quality management program y Product-design Costs: costs of designing products with quality characteristics y Process Costs: costs expended to make sure productive process conforms to quality specifications y Training Costs: costs of developing and putting on quality training programs for employees and management y Information Costs: costs of acquiring and maintaining data related to quality, and development and analysis of reports on quality performance y

TOTAL QUALITY MANAGEMENT (TQM) TQM is a philosophy, concerned with meeting the needs and expectations of customers. It attempts to move away from the focus of quality been strictly operations and tries to refocus upon the whole organisation as a unit of quality. A TOTALITY OF INVOLVEMENT, everybodys responsibility, everyone focused on reducing the cost of quality, and continuously improving to achieve this across the organisation. TQM is an extension of quality control TQM can be viewed as a logical extension of quality control. Quality was achieved by inspection initially - screening out defects before the customer noticed them. Quality control created the systematic approach to not only detecting, but also treating the quality problems. Quality assurance widened the responsibility to include functions other than direct operations. TQM obtained most of this but developed its own themes, which were distinctive. TQM is concerned with the following: y y y y y y y Meeting the needs and expectations of customers Covering all parts of the organisation Including every person in the organisation Examining all costs which are related to quality Getting things right first time, i.e. Designing in quality rather than inspecting it in Developing the systems and procedures which support quality and improvement Developing a continuous process of improvement This development of quality can be seen as an extending cube, expanding the boundaries, forcing the more outward approach, rather than the original inward looking inspection approach.

TOOLS FOR SOLVING QUALITY PROBLEMS Problem recognition (CI) sources y y y Customers Process control charts Managers and workers

Problem Solving (CI) tools y Several problem solving tools exist and include PDCA (Deming wheel), Process Flow Charts, Pareto Analysis, Run Chart, Histogram, Scatter Diagram, Checksheet, Cause and Effect Diagram, Control Charts.

CI Methodology: PDCA Cycle (Deming Wheel)

Benchmarking y y y y Identify those processes needing improvement Identify a firm that is the world leader in performing the process. Contact the managers of that company and make a personal visit to interview managers and workers. Analyze data.

Types of Inspection y y y Successive check inspection: Performed by the next person in the process or by an objective evaluator such as a group leader (feedback) Self-check inspection: Done by the individual worker (looking fordefects) Source inspection: Checking for the errors that will cause defects

Poka-Yoke y Fail-safe procedures or devices that: o Prevents the worker from making an error that leads to a defect before starting a process, or o Gives rapid feedback of abnormalities in the process to the worker in time to correct it. o All three types of inspection rely on some form of poka-yoke control

QUALITY AWARDS AND QUALITY STANDARDS National Individual Awards y y y y y y Armand V. Feigenbaum Medal Deming Medal E. Jack Lancaster Medal Edwards Medal Shewart Medal Ishikawa Medal

International Awards Malcolm Baldrige Award

ISO 9000 y y A set of procedures and policies for international quality certification of suppliers Standards o ISO 9000:2000 Quality Management SystemsFundamentals and Vocabulary o ISO 9001:2000 Quality Management SystemsRequirements o ISO 9004:2000 Quality Management SystemsGuidelines for Performance Improvements