Chapter_4_-_Managing_Quality

Chapter_4_-_Managing_Quality - BUS 370: Chapter 4 Managing...

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Unformatted text preview: BUS 370: Chapter 4 Managing Quality Tracy Freeman College of Management North Carolina State University 1 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. 2 Definitions of Quality American Society for Quality (ASQ) Definition: The characteristics of a product or service that bear on its ability to satisfy stated or implied needs fitness for use ( value perspective ) A product or service free from deficiencies ( conformance perspective ) 3 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 on averages, they feel the variance in each transaction, each product or service we deliver 4 Firms can gain competitive advantage with quality Performance Features Reliability Durability Conformance Aesthetics Serviceability Perceived Quality Dimensions of Quality: 5 To meet the value and conformance perspectives on quality, companies must: 1. Understand what dimensions of quality are most important to users 2. Develop products and services that will meet the users requirements 3. Put in place business processes capable of meeting the specifications driven by the users requirements 4. Verify that the business process are meeting the specifications 6 Quality improvement progression Improve processes to the point where products and services are defect free The need for appraisal and prevention costs fall as defect levels decrease Managers and employees get better at identifying and resolving problems How much does an oil spill cost compared to the cost of preventing it? 7 Quality Cost Improvement is Driven by Prevention (Quality at the Source) 8 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 Q u a l i t y R e l a t e d C o s t s Time Prevention Costs Appraisal Costs Internal & External Failure Costs Total Quality-related Costs Embedded Quality Improvement Culture Ref: ISO/TR 10014:1998 - Guidelines for managing the economics of quality" first published 1981 as BS 6143 $ Total Quality Management (TQM) Managing the entire organization so that it excels in all dimensions important to the customer....
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This note was uploaded on 02/13/2012 for the course BUS 370 taught by Professor Favre during the Fall '08 term at N.C. State.

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Chapter_4_-_Managing_Quality - BUS 370: Chapter 4 Managing...

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