Quality Management: TQM, ISO 9000 & Control Charts
What is Quality?
Quality is not just about “good” or “bad.” In operations management, it is defined as the ability of a product or service to meet or exceed customer expectations.
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Juran’s Definition: “Fitness for use.” (Does it do what it’s supposed to do?)
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Crosby’s Definition: “Conformance to requirements.” (Did we build it exactly as designed?)
The 4 Stages of Quality Evolution
It is crucial to understand how quality management has evolved.
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Inspection: The act of measuring, examining, or testing a product after it is made. It is reactive. You find the defect and fix it (or scrap it).
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Quality Control (QC): Operational techniques to fulfill quality requirements. It focuses on identifying defects during production.
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Quality Assurance (QA): Planned activities to provide confidence that quality requirements will be fulfilled. It focuses on preventing defects through good processes.
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Total Quality Management (TQM): A management philosophy where everyone in the organization (from CEO to janitor) is responsible for quality.
Total Quality Management (TQM)
TQM is a holistic approach to long-term success through customer satisfaction. It integrates all organizational functions (Marketing, Finance, Design, Engineering, Production) to focus on meeting customer needs.
Core Principles:
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Customer Focus: The customer determines the level of quality.
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Total Employee Involvement: All employees participate in working toward common goals.
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Continuous Improvement: Quality is a journey, not a destination.
Deming’s 14 Points (Simple and Short)
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Create constancy of purpose
Always focus on improving products and services for long-term success. -
Adopt the new philosophy
Accept modern quality practices and commit to continuous improvement. -
Cease dependence on inspection
Don’t rely only on inspection; build quality into the process from the beginning. -
Stop choosing suppliers based on lowest price
Select suppliers based on quality and long-term relationships, not just low cost. -
Improve constantly and forever
Always keep improving processes, products, and services. -
Institute training on the job
Train employees properly so they can do their work efficiently. -
Institute leadership
Managers should guide, support, and help workers—not just supervise. -
Drive out fear
Create a safe environment where employees can speak freely and suggest improvements. -
Break down barriers between departments
All departments should work together as a team, not compete with each other. -
Eliminate slogans and targets
Do not blame workers with slogans or posters; improve the system instead. -
Eliminate numerical quotas
Stop setting unrealistic numerical targets; focus on quality and methods. -
Remove barriers that prevent pride in work
Ensure employees can take pride in their work—fix poor systems and tools. -
Institute education and self-improvement
Encourage continuous learning and skill development. -
Put everyone to work for transformation
Quality is everyone’s responsibility. Involve the entire organization in improvement.
The Cost of Quality (COQ)
Quality is free, but poor quality costs money. The “Cost of Quality” isn’t the price of creating a good product; it’s the cost incurred because quality might exist (or fail).
1. Prevention Costs (Investments): Money spent to prevent defects from occurring.
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Examples: Training employees, quality planning, preventive maintenance.
2. Appraisal Costs (Checking): Money spent to detect defects.
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Examples: Inspection, testing, auditing, equipment calibration.
3. Internal Failure Costs (Found Inside): Costs of defects found before the product reaches the customer.
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Examples: Scrap (throwing it away), rework (fixing it), re-testing.
4. External Failure Costs (Found Outside): Costs of defects found after the customer receives the product. This is the most dangerous cost.
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Examples: Warranty claims, product returns, lawsuits, lost brand reputation.
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Quality Standards: ISO 9000
ISO 9000 is a series of international standards for quality management systems.
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What it does: It certifies that a company has a consistent process for ensuring quality. It doesn’t guarantee the product is “good,” but it guarantees the company follows its own quality rules consistently.
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Key Principles: Customer focus, Leadership, Process approach, and Continuous improvement.
Statistical Quality Control (SQC)
You cannot inspect every single screw in a factory making millions of screws. Instead, we use Statistics.
1. Sampling Inspection
Instead of checking 100% of items (which is costly and time-consuming), we check a small random sample.
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Acceptance Sampling: Inspecting a random sample of goods (incoming raw materials or outgoing finished goods) to decide whether to accept or reject the entire lot.
2. Control Charts
These are graphical tools used to determine if a process is stable (“in control”) or unstable (“out of control”).
A. Charts for Variables (Measurable Data)
Used for things you can measure (Length, Weight, Temperature).
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$\bar{X}$-Chart (Mean Chart): Tracks the average value (central tendency). Example: Is the average weight of the chips packet 50g?
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R-Chart (Range Chart): Tracks the variability. Example: Are the packets varying too much (40g to 60g)?
B. Charts for Attributes (Countable Data)
Used for things you just count (Good/Bad, Pass/Fail).
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p-Chart: Tracks the proportion (percentage) of defective items. Example: 5% of bulbs are broken.
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c-Chart: Tracks the number of defects per unit. Example: 3 scratches on a car door.
Six Sigma (The Zero Defect Goal)
Six Sigma is a data-driven methodology to eliminate defects.
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Statistical Meaning: Achieving “Six Sigma” means having less than 3.4 defects per million opportunities. It is near perfection.
The DMAIC Methodology:
Used to improve existing processes.
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Define the problem.
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Measure the current performance.
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Analyze the data to find root causes.
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Improve the process.
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Control the new process to sustain results.
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