EXAM 3 Supply chain - EXAM 3 SCO Total Quality Management o Managing the entire organization so that it excels on all dimensions of products and

EXAM 3 Supply chain - EXAM 3 SCO Total Quality Management o...

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EXAM 3 SCO Total Quality Management o Managing the entire organization so that it excels on all dimensions of products and services that are important to the customer. o Two fundamental operational goals Careful design of the product or service Ensuring that the organization’s systems can consistently produce the design. TWM commitments o Commitment to total customer satisfaction o Commitment to understanding and improving the organization’s processes o Commitment to employee involvement o Commitment to data based decision making Quality ties to other functions o Finance- justify quality costs in relationship to quality improvements (cost of quality) o Accounting- organization must agree on reporting of quality costs, and method of reporting quality losses o Marketing- customer intelligence translated into quality requirements, and drive customer perceptions of our product o Human resources – TQM of employee involvement, effect on job description, training o Engineering – what is the role of quality in design decisions, process for improvement, how to measure and test for quality Definition of quality o Conformance to requirements o A predictable degree of uniformity and dependability at a low cost and suited to the market o Fitness for use (satisfies customer needs) Design quality- inherent value of the product in marketplace Conformance quality- degree to which the product or service design specifications are met Quality at the source o TQM commitment- employee involvement o Quality is everyone’s job, workers must engineer quality into product, not rely on inspection to validate quality Variation/ defects o Common cause variation (random variation)- natural variation inherent in system o Special cause variation (assignable variation)- changes in process outcomes can be tied to specific cause Quality processes
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o Detection- reacting to problems as they arise o Prevention- taking care of special cases by removing assignable or identifiable causes of system variation Costs of quality o Appraisal costs- cost of inspection and testing to ensure product is process is acceptable o Internal failure costs- costs for defects incurred within system o External failure costs- costs for defects that pass through the system o Prevention costs- sum of all costs to prevent defects ISO (international organization for standardization ) o ISO 9000 directs you to “document what you do and then do as you documented) Six sigma o Six sigma seeks to improve quality of process outputs by identifying and removing the causes of defects and minimizing variability in manufacturing and business processes o It uses a set of quality management methods, including statistics, and creates special infrastructure of people within organizations who are experts in these methods (blackbelts) o Each six sigma project carried out within an organization follows a defined sequence of steps and has quantified financial targets 6 sigma key concepts o
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