Costs result from the production of defective parts or services before delivery to the customer.

What does quality help firms do?

Quality helps firms increase sales and reduce costs, both of which can increase profitability. Sales Gain: improved response, flexible pricing, and improved reputation) Reduced costs: (Increase productivity and lower rework, scrap, and warranty costs)

The totality of features and characteristics of a product or service that bears on its ability to satisfy stated or implied needs. Or informal “quality lies in the eyes of the beholder”

Product quality vs. manufacturing based quality

Manufacturing quality: Quality means conforming to standards and making it right the first time.
PRODUCT quality: views quality as precise and measurable variable.

What are the implications of quality?

1. company reputation: good or bad depending on quality
2. Product liability: companies are liable for the damage their faulty products can create
3. Global implications: to effectively compete globally, products must meet global quality standards.

What is the Malcolm Bridge National Quality Award?

Award for US based global companies that excel in quality.

Four major categories of costs associated with quality are?

1. Prevention costs
2. Appraisal costs
3. internal Factor costs
4. external failure costs

Costs associated with reducing defective parts or services. Ex. Training, quality improvement programs

Costs related to evaluating products, parts, processes, and services. Ex. testing labs/inspections)

Costs that result from production of defective parts or services before delivery to customer (ex. Rework, scrap, and downtime.

External facilities costs

Costs that occur after delivery of defective parts or services (ex. Rework, returned goods, liabilities, lost goodwill, costs to society)

Refers to the quality emphasis that encompasses the entire organization, from supplier to customer.

Who is W. Edwards Demings?

created the 14 points for implementing quality improvement.

What are the seven concepts of TQM

1. continuous improvement
2. six sigma
3. employee empowerment
4. benchmarking
5. just-in-time
6. Taguchi concepts
7. Knowledge of TQM tools

What is deming’s 14 points for implementing quality improvement?

1. create consistency with purpose
2. lead to promote changes
3. build quality into products, don’t depend on inspections
4. Build long-term relationships based on performance
5. Continually improve product, service, and quality
6. start training
7. emphasize leadership
8. drive fear out
9. break down barriers between departments
10. Stop haranguing employees
11. support, help, and improve
12. remove barriers to pride in work
13. institute a vigorous program of education and self- improvement
14. put everybody in the company to work on the transformation

Plan-To-Do-Checklist (PDCA) for Continuous Improvement

Plan, Do, Check, Act is Walter Shewhart’s version of continuous improvement

What are the two definitions of Six Sigma? (Statistical sense and program sense)

Two means in TQM:

1. in statistical sense, it describes a process, product, or service with an extremely high capability. (99.9997% accuracy)
2. a program designed to reduce defects to help lower costs, saves time, and improve customer satisfaction.

A comprehensive system - a strategy, a discipline, and a set of tools - for achieving and sustaining business success.

What is the Six Sigma improvement model known as DMAIC?

Defines, Measures, Analyses, Improves, Controls the improvement of operations.

What are the set of seven tools of SIX sigma?

Check sheets, scatter diagram, cause-and-effect diagrams, Pareto charts, flowcharts, histograms, and statistical process control.

What is employee empowerment?

Involving employees in every step of the production process.

A group of employees who meet regularly to solve work-related problems.

Involves selecting a demonstrated standard of products, services, costs, practices that represent the very best performance for processes or activités very familiar to your own.

What are the steps for benchmarking

1. determine what to benchmark
2. form a benchmark team
3. identify benchmarking partners
4. collect and analyze benchmarking information
5. take action to match or exceed the benchmark

What are the typical measures used in benchmarking

Percentage of defects, costs per unit or per order, processing time per unit, service response time, return on investment, customer satisfaction rats, and customer retention rates.

Systems designed to produce or deliver goods just as they are needed.

What are the three ways JIT is related to quality?

1. cuts the cost of quality
2. improves quality
3. better quality means less inventory and a better, easier-to-employ JIT system.

Genichi Taguchi’s three concepts aimed at improving both product and process quality.

1. quality robustness
2. target-oriented quality
3. quality-loss function

Products are products that can be produced uniformly and consistently in adverse manufacturing and environmental conditions.

Philosophy of continuous improvement to bring the product exactly on target.

Quality-loss function (QLF)

a measure that attempts to estimate the cost of devoting from the target value.

A check sheet is any kind of form that is designed for recording data. Helps find facts or patterns that may aid subsequent analysis.

Show the relationship between two measurements.

Cause and Effect Diagram aka Ishikawa diagram or fish-bone chart

Four Ms are the cause: Material, Machinery/Equipment. Manpower, and method. Branch with individual causes associated with each major cause.

A method of organizing errors, problems, or defects to help focus on problem-solving efforts. Created by Vilfredo Pareto. Sums the complaints and notes them by category in decreasing order along the horizontal axis of table.

Graphically present a process or system using annotated boxes and interconnected line. Great for trying to improve the process.

Shows the range of values of a measurement and the frequency with which each value occurs. Shows Frequency and variation of values.

Statistical Process Control (SPC)

Monitors standards, make measurements, and takes corrective actions as a product or service is being produced.

are a graphic presentation of data over time that show upper and lower limits for the process we want to control.

Can involvem measurement, tasting, touching, weighing, or testing product. Goal is to detect a bad process immediately. Only find deficiencies and defects. OMs need to know when to inspect and where to inspect.

Inspections can take place at any of the following points.

1. At your suppliers plant while your supplier is producing
2. at your facility upon receipt of goods from your supplier
3. before costly or irreversible processes
4. during the step by step production process
5. ehen production or service is complete
6. before delivery to your customer
7. at the point of customer contact.

Controlling or monitoring at the point of production or purchase - at the source. (Employee empowerment).

Poka-yoke (Source Inspection)

A foolproof device or technique that ensures production of good units every time. Ex. French fry boxes, gas diesel pump nozzles differentiating shape

Checklists (source inspection)

Type of poka-yoke to help ensure consistency and completeness in carrying out a task.

What is the main goal for source inspections?

To provide guarantee of 100% good product or service at each step of a process.

Classifies items as being either good or defective. Does not address degree of failure.

Measures such dimensions as weight, speed, size, or strength to see if the item falls within an acceptable range.

What are the determinants of service quality

Reliability, responsiveness, competence, access, courtesy, communication, credibility, security, understanding/knowing the customer, tangibles

Service recovery strategies

Train and empower employees to immediately solve problems. LEARN rountine which is an acronym for Lister, Empathize, Apologize, React, Notify

Useful for evaluating preformance. Provides direct comparisons between customer service expectations and the actual service provided. Focus on the gaps.

Which of the following categories of costs is related to evaluating products processes parts and services?

Which of the four major categories of quality costs is the highest and most difficult to estimate?

In which of the four major categories of quality costs would the costs associated with scrap and rework belong?

Which cost of quality is hardest to evaluate?