Classes 6 and 7 - Managing Quality - Chapter 4

Classes 6 and 7 - Managing Quality - Chapter 4 - BUS 370:...

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BUS 370: Managing Quality – Chapter 4 Donavon Favre College of Management North Carolina State University
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Chapter Objectives Be able to: Discuss the various definitions and dimensions of quality and why quality is important to operations and supply chains. Describe the different costs of quality, including internal and external failure, appraisal, and prevention costs. Know what TQM is, along with its seven core principles. Calculate process capability and set up control charts for monitoring continuous variables and attributes.
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Managing Quality Quality Defined Total Cost of Quality Total Quality Management Statistical Quality Control (HARD – it’s not just you!)
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Definitions of Quality American Society for Quality (ASQ): The characteristics of a product or service that bear on its ability to satisfy stated or implied needs (value perspective) A product or service free from deficiencies (conformance perspective)
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Process Variation Variation is defined as the fluctuation in process output Six Sigma focuses first on reducing process variation and then on improving the process capability Upper Spec Limit Lower Spec Limit Target Value After Before Process Center Customers don't judge us on averages, they feel the variance in each transaction, each product we ship
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Firms can gain competitive advantage with quality. Performance Features Reliability Durability Conformance Aesthetics Serviceability Perceived Quality Dimensions of Quality
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To meet the value and conformance perspectives on quality, companies must: Understand what dimensions of quality are most important to users Develop products and services that will meet the user’s requirements Put in place business processes capable of meeting the specifications driven by the user’s requirements Verify that the business process are meeting the specifications
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Total Cost of Quality Quality analyzed in economic terms Total Cost of Quality: Failure Costs (Internal and External) Appraisal Costs Prevention Costs
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Quality improvement progression Improve processes to the point where products and services are defect free and… The need for appraisal & prevention costs fall as defect levels decrease Managers and employees get better at identifying and resolving problems
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Quality Cost Improvement is Driven by Prevention (Quality at the Source) Objective : to find the optimum level of investment in order to substantially reduce the Failure Costs and overall Quality Cost to both the customer and the business Quality Related Costs Time Prevention Costs Appraisal Costs Internal & External Failure Costs Total Quality-related Costs Embedded Quality Improvement Culture
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Classes 6 and 7 - Managing Quality - Chapter 4 - BUS 370:...

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