CHAPTER 8

                                                        MANAGING QUALITY

 

Teaching Notes

            This chapter is included to provide depth on quality manage­ment, while the usual coverage on statistical quality control issues is contained in Chapter 9.  Topics included in this chapter are definitions of quality, quality cycle, the approaches to quality as advocated by Deming, Crosby and Juran, ISO 9000 approach to quality, the Baldrige Quality System, and cost of quality.  While these topics are treated in the general litera­ture, they are sometimes not treated extensively in Operations Management courses.  Due to the importance of quality management, more coverage is perhaps warranted.

            In teaching this chapter, I start by developing a general framework for quality.  I ask students to write a definition of quality before reading the chapter.  Most students find this a difficult exercise and the definitions they provide vary widely.  I also cover various approaches to quality, ISO 9000, the cost of quality and the Baldrige approach, which the students often find interesting.

            The handbook by Juran and Godfrey (1999) is recommended as a source of background material on quality.  The books by Crosby (1992 and 1995) give a persuasive argument for "Quality is Free", the book by George and Weimerskirch (1998) describes a total approach to quality, and Deming's (2000) book and Garvin's (1987) article make interesting reading.  For recent books that are useful see Aaker (2001) on the Baldrige and Evans and Lindsay (2004), an excellent textbook.

 

Answers to Questions

1.         Quality, defined as meeting or exceeding customer requirements, can be measured along the four dimensions of design, conformance, the "abilities" and field service.

            a.         Telephone service - for public, private and business phones:
Design:
- Number of service options and features

                        Conformance:
- Number of complaints regarding operators
- Speed and clarity of connections

                        Availability:
- Time between repair requests (MTBF)
- Mean time to repair (MTTR)

                        Field Service:
- Speed of installation

            b.         Auto repair:
Design:
- Quality of shop equipment
- Skill level of mechanics

                        Conformance:
- Average turnaround time
- Average repair time
- Number of disputed bills

                        Availability:
- Shop size and on-duty mechanic hours

                        Field Service:
- Warranty of repair

            c.         Manufacture of ball-point pens:
Design:
- Evenness of ink flow
- Cap fit
- Ease of grasping

                        Conformance:
- Number of customer complaints
- Ink flow test

                        Availability:
- Test of pen's useful life

                        Field service:
- Buy back policy for defectives

            Note: Parts a and b can also be answered using the dimensions of SERVQUAL.

2.         Quality of design is determined before the product is produced.  Market research results in a concept.  Engineering (in manufacturing organiza­tions) translates the concept into specifications and together with operations is responsible for subsequent modifications of the specifica­tions.

            Quality of conformance - conformance to specifications - is assured by operations during the production process.

            The two uses of the term quality are independent:  a product can have a high quality design and low conformance to specifications or it can have a low quality design but high conformance to specifications.

3.         a.         Product B has the higher reliability on average due to a higher MTBF (40 > 30).
b.         Product B has greater maintainability due to a lower MTTR (2 < 5).
c.         Product A:  30 hrs./(30 hrs. + 5 hrs.) = 85.7%
Product B:  40 hrs./(40 hrs. + 2 hrs.) = 95.2%
Product B has greater availability than Product A (95.2% > 85.7%).

4.         Answers to this question will vary.

5.         Answers will also vary to this question.  Students might describe a recent experience with
pizza delivery, automobile repair, purchase of books at the bookstore and many other
examples.

6.         The manufacturer's first step in implementing a quality planning and control system through the quality cycle is to determine quality attri­butes for wooden pencils.  If strength of lead, strength of the eraser, and ease of sharpening are characteristics desired by pencil users, then the next step is deciding how to measure these three attributes.

            Measurement techniques might be applying pressure to the pencil point and eraser and counting the number of turns in a pencil sharpener.

            The inspection program for pencils should be based on sampling of the product during production and at final inspection.  When the results fall short of the standards, or outside of control limits, quality is assumed to be out of control.  Efforts are then made to discover and correct the causes of poor quality.

7.         a. Products with relatively poor (design) quality:
- Some U.S. manufactured economy cars
- Most frozen pizza
- Inexpensive cutlery and kitchen utensils
- Cheap cassette recorder

            b. Services with relatively poor quality:
- Amtrak (low design quality from miles of poor tracks)
- Service station auto repairs
- Administration of state unemployment compensation

8.         Products that have a high degree of quality: Mercedes automobile, American Express credit cards, Del computers, and Steinway pianos.  Yes, generally these products are associated with successful companies.

9.         40,000 Training of personnel
15,000 Process planning
55,000 Total cost of prevention

            20,000 Incoming materials inspection
30,000 Quality laboratory
50,000 Total cost of appraisal

            13,000 Scrap
25,000 Rework
38,000 Total cost of internal failure

            45,000 Warranty
10,000 Allowances
14,000 Complaints
69,000 Total cost of external failure

 

10.       To apply a zero defects policy to student term papers, the professor must believe and instill in students the belief that they are capable of flawless work.  This requires attitude as well as behavior changes and depends greatly on the professor as a change agent.

            To prevent errors, prevention costs are incurred in the form of time spent priming and directing students before writing begins.  Cost savings to the professor and students result from less time spent on corrections and rewrites.  Added incentives may be needed such as higher grades or fewer overall assignments.

11.       Student answers will vary.

 

12.

Deming	Crosby	Juran
Continuous improvement	“Zero Defects” or “Make It Right The First Time”	Breakthrough and continuous improvement
Constancy of purpose toward continuous improvement and top management’s commitment to quality and productivity	Do it over again, uses cost of quality evaluations to catch and keep the attention of top management	Careful management planning to solve “the vital few” and continuous improvement
Management and worker training	Importance of management commitment and worker training	Careful management planning and worker training
Remove barriers to productivity and worker’s right to pride of workmanship	Workers make errors because they have been conditioned to believe that it is all right to err, use of recognition	Involvement of all employees
Eliminate work standards and numerical quotas	Establish quality measurements in all parts of the company	Institute procedure and methods to insure quality
Encourage problem solving through teamwork and effective two-way communication	Includes motivational programs, posters, awards, and prizes	Involvement of all employees
Use statistical methods for quality improvement	Quality performance means conformance to requirements	Control quality through statistical methods

13.       Student answers will vary.

14.       The Baldrige Award categories might be used in a variety of ways in helping a company improve quality.  One way would be for a company to benchmark itself against its competition, or against best practice, using the categories as guides for areas of potential strength and weakness.  A company may wish to adjust the weightings on the various categories, since the value that a market segment places on the various categories may differ from that used in the award criteria.

15.       The ISO 9000 process certification is a quality approach based on compliance and conformance quality with continuous improvement, leadership and customer satisfaction being added in the new 2000 standard.  The Baldrige -based approach addresses additional quality requirements not considered in the ISO 9000/2000 approach.  The additional quality requirements addressed are strategic planning and business results.  A company must not only satisfy its customers and be improving, but must have positive financial results and a strategy for long-term business success to win the Baldrige Award.

16.       ISO 9000 is considered a first step, or basic, approach to quality since it provides a quality assurance system to produce consistent quality and continuous improvement but does not provide a complete quality system.  A company can be making a product that the customers like, but be going out of business and still be ISO 9000 certified as long as the company has a quality system in place.  A long run strategic plan and positive financial performance is not required by ISO 9000.

17.       Any of the four dimensions of quality can affect revenue depending on what customers consider important in their buying decision.  Design quality will generally increase costs, unless new technology can be used to provide more product performance at lower cost.  The same can be said about improving maintainability, reliability and availability unless improvements can be made by product simplification.  Improving conformance quality will generally decrease costs when a prevention approach and better process control is used. 

18.       Student answers will vary depending upon the references used.

19.       Success can be defined in terms of the degree of customer satisfaction and profitability.  Then a successful quality improvement implementation effort is one that increases both customer satisfaction and profitability over time.  Many other measures of success could also be used such as customer loyalty, reduction in quality costs, ROI, and discounted cash flow.