PRODUCTION SYSTEMS AND OPERATIONS MANAGEMENT

©1998 Joseph Martinich. All rights reserved. None of these materials can be stored, transmitted or reproduced by any means (electronic, mechanical, photocopying or otherwise) without the written permission of Joseph Martinich. These materials may be used by students in classes taught by Professor Martinich at University of Missouri - St. Louis.

The Quality Management System

• Product quality is an increasingly popular order-winning-dimension
• The minimum quality threshold simply to compete has increased considerably.
• Advantages of Good Quality

2. Attracts more loyal customers

• Customers won on price are more footloose
• To get quality-driven customers to switch products, competitors must prove clear quality superiority; this is very difficult.

3. Good quality is often cheaper than bad quality

• Belief that better quality can only be achieved by increasing costs is a myth.
• Methods used to improve quality simultaneously increase productivity, reduce material usage, and reduce costs

5. Poor quality can expose the company to financial liability

• Death, injuries, and business disruptions for customers

• During the 1980's especially, U.S. companies began to recognize the benefits of good quality, and the need to change their quality philosophy and quality management systems in order to compete.
• Driven by foreign competition, especially from Japan during the 1970's.
• So-called quality gurus demonstrated an alternative approach (Total Quality Management - TQM)
• W. Edwards Deming
• Joseph Juran
• Philip Crosby
• Armand Feigenbaum
• Kaoru Ishikawa
• Shigeo Shingo
• Yoji Akao
• Taiichi Taguchi
• Some of them developed entire philosophies; some focused on specific aspects of quality or specific tools - but they are generally consistent

Differences Between

Old Quality Control Approach and Total Quality Management Approach

• Old Approach

1. Quality criteria and standards set internal to the organization

2. Responsibility for quality assigned to a separate department (e.g., the quality control department)

3. Efforts were focused primarily on quality conformance

4. Operational focus was on final product inspection, and using statistical methods (acceptance sampling) to estimate the defect rate to keep defective items to an "acceptable level"

5. Quality goal was to achieve an "acceptable quality level."

• Total Quality Management

1. Customer-focused: Quality criteria and standards set by customers.

2. Quality is an organization-wide responsibility. All workers are responsible for good product quality, especially the quality of their own work.

3. Product and process design are key aspects of achieving quality.

4. Operational focus is on making products correctly the first time rather than catching defects after the fact. Whatever defects do occur are identified and corrected quickly.

5. Continuous Improvement - always seeking ways to make quality better.

• Success of TQM
• TQM is widely used, with thousands of demonstrated success stories
• Based on sound principles; not a fad.
• Stories of failures almost always due to poor implementation or lack of understanding of TQM
• Implementing isolated techniques (e.g., SPC, quality circles)
• Lack of incentives, top management support, organizational infrastructure (worker authority).
• Insufficient training
• Insufficient patience

• What Is Product Quality?
• Possible Answers
• Product works the way it is supposed to/was designed
• What if it does not do what the customer wants, needs, or expects; for example, a computer that only performs computations or a software package that can only show one line of information per screen.
• Product does what the customer wants it to do.
• What if it works correctly for 20 minutes, and then it needs repair?
• Product operates correctly for a long time.
• What if it requires the user to read a 500 page user manual to operate it? What about a 300 pound leaf blower?
• Product is easy to use, operates correctly, and lasts a long time.
• What about a fertilizer that makes plants grow well but smells awful?

• We need a simple, robust definition.
• J.M. Juran: Quality is the "fitness for use" of the product
• Customer-focused
• Products are of good quality only if customers say they are
• Products must satisfy customer needs and wishes
• Goods must perform the way customers expect; services must be provided the way customers expect
• Customers establish quality criteria and standards
• Fitness for use, and therefore quality, will depend on who the potential customers are and their intended use of the product.
• For example: If PC users have trouble using a computer or software, this is poor product quality. The designer and producer of the product is at fault, not the user/customer. Products should be designed and made so they are easy to use correctly, and necessary training and documentation should be provided.

• Quality, and fitness for use, is multi-dimensional.
• We typically evaluate the quality of a product using several criteria or attributes.

• Common Quality Dimensions

1. Performance

• Does the good do what it is supposed to?
• Is the service provided correctly, on-time?
• If customer provides specifications, are they met?

2. Range and Type of Features

• Customers often interested in, and willing to pay for, additional features or capabilities
• TV remote control; foreign currency transactions

• Product may function correctly and have many useful features, but if the intended user cannot operate the product easily and correctly, its value (fitness for use) is diminished
• For example: a VCR player that can record two shows at once, store 20 recording dates, and still allow one to watch TV, but is difficult to program.
• For a service, this may mean having a convenient location or easy telephone access.

4. Reliability and Durability

• Reliability measures how consistently the product performs and how long it performs at an acceptable level under normal maintenance.
• Durability measures how long the product performs until repair is needed, and the overall usable life of the product. For a service durability may measure how up-to-date the service is or how easy it is to update the service.

• The frequency, expense, and difficulty of actions required to keep the product operating at the desired level.
• Training provided to customers
• Assistance available (e.g., phone hotline)
• Availability of replacement parts

6. Sensory Appeal

• Appearance, feel, smell, taste, or sound of product
• Example: Healthy food that is not tasty not usually considered to be of high quality

7. Ethical and Image Dimensions

• How customer is treated, especially important for service products
• Customers' perceptions of courtesy, honesty, and responsiveness of producer in dealings with customers.

• If TQM is Beneficial, How Do We Convince Managers and Other Workers of the Need to Adopt It?
• Organizations are typically resistant to change, and will not make the significant structural and cultural changes required for TQM without compelling reasons or evidence.
• Despite the obvious marketing and revenue advantages of good quality, management may view the additional cost and effort of achieving higher quality not to be worth the expense.
• One way to highlight the benefits of better quality is through a Quality Cost Audit.

• Quality Cost Audit
• An in-depth investigation (audit) that identifies all costs or revenue losses related to quality. Includes
• Costs incurred to achieve good quality (prevention costs)
• Costs incurred to determine quality (appraisal costs)
• Costs incurred because good quality was NOT achieved (failure costs)
• The information is collected and organized on a quality cost scorecard
• Purpose is to identify:
• How much an organization is actually spending on quality related activities
• How and where these costs are incurred.

• Typical result and benefit:
• Most companies have little idea how much they are spending on quality related activities, especially the costs of poor quality. They view their quality costs as only those incurred by the quality control department (most appraisal and some prevention costs). In fact, the "hidden" costs (mostly failure costs) are often five or ten times that amount. Recognition of this creates motivation to improve the quality management system.
• Typical Cost Distribution
• Total quality costs are often 8-12% of all costs (sometimes more)
• Failure costs: 60-80% of all quality costs
• Appraisal costs: 15-40% of quality costs
• Prevention costs: 5-10% of quality costs
• These results suggest the strategy of increasing resources devoted to prevention, thereby decreasing failure (and possibly appraisal) costs. Result should be reduction in total quality costs, with prevention costs being 20-50% of total and failure costs being less than 50% of total.

• Requirements for Achieving Good Quality

1. Commitment of Top Management

• Create organizational structure that supports TQM; restructure jobs and responsibilities
• Create evaluation and reward system that promotes good product quality
• Commit resources to on-going training and improvement

2. Product Design - Design Quality

• Determine what customers want
• Customers on product design teams
• Use Quality Function Deployment and focus groups
• Replace conventional wisdom with customer-based data and standards
• Design products to deliver what customer wants
• Quality Function Deployment
• Prototyping; customer feedback
• Post-purchase customer feedback mechanisms; satisfaction surveys and complaint lines

• Design products so they are easy to produce; simplify quality conformance
• Follow design simplification principles (reduce the number of parts, use standard and common parts, etc.)

• Use concurrent design of the product and production system. Identify potential production obstacles early.

3. Quality Conformance

• Production System Design
• Mistake-proof processes and operations (poka-yoke)
• Design processes to be robust - small process variation (e.g., use the Taguchi method)
• Tight linkages among production stages and short cycle times so defects are identified and problems corrected quickly (small lot-sizes, kanban scheduling).

• Organization of Workers and Job Design

• Design jobs and work methods to make work easier (ergonomics and work environment)
• Give workers responsibility and AUTHORITY needed to achieve good quality (e.g., authority to stop production if a quality problem appears; authority to suggest or make changes in methods to achieve quality).
• Use autonomous work teams and quality circles to discuss quality issues
• Self-inspection; source-inspection
• Structured machine set-ups (SMED)

• Training
• Teach good work methods. Teach techniques that will most likely ensure good product quality.
• Have well-trained trainers. (Frequently workers who use incorrect methods are the ones who teach new workers!)
• Workers should have a customer-oriented mind-set (including internal customers)
• Teach quality control tools: SPC, fish-bone charts, 5 why's

• Quality of Materials
• Most companies purchase more than half of the materials they use from outside suppliers
• Products made using poor materials and components will be of poor quality.
• Quality of materials can be improved by making suppliers partners in the production process
• Suppliers have expertise that can be used in design of products and selection of components
• Companies that want good quality must help suppliers to have good quality management systems
• ISO 9000 certification is intended to do this, but it only certifies policies and procedures, not the quality of the products made. Recent study shows that ISO 9000 certification does not correlate with quality, but use of lean production methods does.

• Operational Methods for Defect Prevention - Quality Monitoring, Testing, and Feedback
• Even the best production processes will experience problems that lead to defective items
• To maintain good quality in spite of failures requires good monitoring and feedback system
• Want to identify quality problems as quickly as possible and correct them

• Source inspection - workers check their own work
• Defects not caught at the source must be found quickly (at next stage)
• Corrective action taken quickly
• Mistake-proofing mechanisms can prevent defects and perform 100% inspection
• Statistical Process Control identifies problems before defects occur
• Process is constantly improved to further reduce defects - problems are treated as improvement opportunities

• Defect Prevention
• Source Inspection
• Poka Yoke (Mistake-Proofing)

• Statistical Process Control
• Problem Solving and Quality Improvement

• Inspections

• Purpose - Intended to reveal and prevent defects in work and transportation
• Inspections alone will not PREVENT defects; they will just identify defects; feedback and corrective action is needed for prevention
• Types of Inspection
• Physical - uses measuring devices
• Sensory - Use of human senses and judgment; more subjective, less consistent

• Where Performed
• At the same process where work was done (Process-Internal)
• A concern of self-checking is the independence of the check, and the care of the checking; poka yoke methods can help when the quality tests are physical rather than sensory

• At a subsequent process (Process-External)
• "Successive" check system (inspection at next operation) allows independence of inspection and quick feedback of errors
• Feedback should be given quickly, otherwise the successive checks don't help much

• Amount of Inspection
• 100% (costly)
• Sampling (based on statistical procedures)
• Types of Defects
• Isolated (will be caught by 100% inspection; but not by sampling or SPC); no special action taken
• Serial (caused by systemic problem, such as worn tool; can be caught by sampling and SPC) ; quick feedback and corrective action needed.

• Defect-Reducing Inspections
• Informative Inspections; those that provide information that is fed back to the process to correct errors
• "Source Inspections" - Differentiates between errors and defects
• Errors create defects; we want to identify errors before they become defects; we can then correct what caused the error
• Errors can be identified and defects prevented using:
• Poka Yoke
• SPC

• Poka Yoke (Mistake-Proofing)
• Purpose - To prevent mistakes and to prevent mistakes from turning into defects
• Examples
• Yamada Electric - assembled push-button device with springs under "on" and "off" buttons; solution - have worker remove both springs from container and put on dish at beginning of assembly step
• Poka Yoke devices provide "self checking" of quality without problem of independence; obtain 100% inspection at low cost with quick feedback
• Examples
• When a quality dimension is size (height, width, etc.) we can set up size barriers that screen out items that are too big and too small; for example a wash that is supposed to be between 15/64 and 17/64 of an inch thick can be sent down a conveyor that has a 17/64 in. high clearance. Any item more than 17/64 thick would hit the barrier and be funneled off the conveyor; a second barrier would be set at a height of 15/64 in.; any item bigger than that would be funneled into an "acceptable" bin, and those less than 15/64 in. would go under the barrier into a reject pile.
• This provides 100% inspection, and immediate feedback when there is a quality problem

• If parts have to be installed or put into a box, have a mechanism such that the hand has to break a circuit (light beam). If all the circuits are not broken the box or item cannot advance.
• If similar but different parts must be processed, try using templates or limit switches; insert part into a holder, if the part doesn't fit correctly (wrong part or defective part) a limit switch is activated. For example if there is a hole in a part in a certain place, a light beam could be sent through that spot; an obstruction would activate a warning light. (Ford Mustang tape showed this with correct welding).
• On mixed assembly line; have a bar code that identifies the product type. This can be read by an optical scanner, which can then control which part boxes open (each box for a different model)

• Use templates to check drill or die set-up
• Use poka yoke concept to check set-ups and operating conditions before processing begins rather than check for errors afterward.

• Poka yoke for maintenance
• Example: put thermistor (thermometer) in bearings or other area of machine that can overheat and cause breakdown. The thermometer can then warn of overheating before a breakdown. Frequent warnings help identify areas of improvement (eliminate causes).

• Poka Yoke for Production Control
• Despite popular belief, it is not always best to shut down a process when errors occur.
• If the errors are isolated (not serial and systematic), a poka yoke approach is to have the process continue, but have the "inspection machine or worker" mark the item and have it checked and corrected by hand later. This can keep production higher at less cost.
• If defects are serial defects, the process should be stopped and corrected.

• Categories of Poka Yoke Methods
• Contact Methods
• Check for shape or size by being in contact with a "Template"
• Put barriers so wrong components won't fit
• Fixed-Value Methods
• When step has to be repeated a fixed number of times; e.g. if five items have to be inserted into a unit, remove the five first and place on tray; or if items have to be put in boxes; do them in groups of 10 or fifty and group items in groups of ten or fifty.
• Detection Methods
• Put sensors on products or pass products through light beams; if parts do not line up correctly an alarm sounds

URL: http://www.umsl.edu/~jmartini/pomnotes/webquality.htm
Page Owner: Joseph Martinich (Joseph.Martinich@umsl.edu)
Last Modified: November 4, 1998