Operations Management

(1)

Operations

Management

Managing

Quality

_Quality

Chapter 6

(2)

Outline

♦

Global Company Profile: Motorola

♦

Quality and Strategy

♦

Defining Quality

♦

Implications of Quality

♦

Malcolm Baldrige National Quality Award

♦

Cost of Quality

♦

International Quality Standards

♦

Total Quality Management

♦

Continuous Improvement

♦

Employee Empowerment

♦

Benchmarking

(3)

Outline

♦

Tools of TQM

♦

Check sheets

♦

Scatter Diagrams

♦

Cause-and-Effect Diagram

♦

Pareto Charts

♦

Process Charts

♦

Histogram

♦

The Role of Inspection

♦

When and where to Inspect

♦

Source Inspection

(4)

Learning Objectives

When you complete this chapter, you should

be able to :

♦

Identify or Define

:

♦

Quality

♦

Malcolm Baldrige National Quality Award

♦

Demings, Juran, and Crosby

(5)

Learning Objectives

-

continued

When you complete this chapter, you should

be able to :

♦

Explain

:

♦

Why quality is important

♦

Total Quality Management (TQM)

♦

Pareto charts

♦

Process charts

♦

Quality robust products

(6)

To Make the Quality Focus Work

Motorola:

♦

Aggressively began a worldwide education

program to be sure that employees understood

quality and statistical process control

♦

Established goals

♦

“stretch goal” - a goal which is very ambitious

♦

Established extensive employee participation and

employee teams

(7)

What is a stretch goal ?

A stretch goal

is an ambitious goal.

Sometimes it is called a “breakthrough

objective

.

” Stretch goals force an

organization to think radically different to

encourage major improvements, as well as

incremental ones. Stretch goals can be set

for all areas of the company, including

(8)

MOTOROLA Co.

--

A famous

illustration of stretch goal

“Six Sigma Quality” concept of Motorola:

Motorola set the following stretch goal in

1987.

“Improve product and services quality ten times by 1989,

and at least one hundred fold by 1991. Achieve

six sigma

capability

by 1992. With a deep sense of urgency, spread

dedication to quality to every facet of the corporation, and

achieve a culture of continuous improvement to assure total

customer satisfaction. There is only one ultimate goal: zero

(9)

MOTOROLA Co.

--

A famous

illustration of stretch goal contd...

Concept of six-sigma quality:

Shrinking process variation (as indicated by

6 sigma) to half of the design tolerance so

that only 3.4 parts out of 1 million are

defective.

At Motorola, six sigma became part of the

common language of all employees. To them

it meant “near perfection”, even if some did

(10)

Ways in Which Quality Can

Improve Pro

fitability

_fitability

Sales Gains

♦

Improved response

♦

Higher Prices

♦

Improved reputation

Reduced Costs

♦

Increased productivity

♦

Lower rework and scrap

costs

Improved

Quality

Increased

Profits

(11)

Flow of Activities Necessary to

Achieve Total Quality Management

♦

Organizational Practices

♦

Quality Principles

(12)

Organizational Practices

♦

Leadership

♦

Mission statement

♦

Effective operating procedures

♦

Staff support

♦

Training

Yields: What is important and what is to be

accomplished

(13)

Quality Principles

♦

Customer focus

♦

Continuous improvement

♦

Employee empowerment

♦

Benchmarking

♦

Just-in-time

♦

Tools of TQM

(14)

Employment Fulfillment

♦

Empowerment

♦

Organizational commitment

Yields: Employee attitudes that they can

accomplish what is important and what is to

be accomplished

(15)

Customer Satisfaction

♦

Winning orders

♦

Repeat customers

Yields: An effective organization with a

competitive advantage

(16)

Definitions of Quality

♦

ASQ

: the totality of features and

characteristics of a product or service that

bear on its ability to satisfy needs

♦

User-Based

: What consumer says it is

♦

Manufacturing-Based

: Degree to which a

product conforms to

design

specification

(17)

DAVID GARVIN

’

S DEFINITIONS

OF QUALITY

♦

Transcendent definition

:

quality is

absolute and universally recognizable; as

such it can not be defined precisely. Used by

lay people. Not useful for operational

(18)

♦

Product-based definition

:

quality is a function

of a specific, measurable variable and

differences in the quality reflect differences

in quantity of some product attribute (

number of knots on carpets, number of

cylinders in an auto engine, percentage of

silk in a shirt or blouse). CAUTION: Quality

is mistakenly related to cost..The higher the

cost, the higher the quality. NOT ALWAYS

TRUE. A product need not be expensive to

be considered a quality product.

(19)

♦

User -Based Definition

:

This is a

customer-based definition. Quality is determined by

what the customer wants. Quality is defined

as “fitness for intended use,” or how well the

product/service performs its intended

function. Concepts of “internal” and

“external” customer important.

(20)

♦

Manufacturing-Based Definition

:

Quality is an

outcome of engineering and manufacturing

practice. Therefore; quality is “conformance

to specifications”. Specifications are targets

and tolerances determined by designers of

products and services. This is a key

definition of quality for the technical aspects

of quality planning and control.

(21)

♦

Value-Based Definition

:

Quality is defined in

terms of costs and prices: A quality product

is one that provides performance at an

acceptable price or conformance at an

acceptable cost. From this perspective, a

quality product is one that is as useful as

competing products and is sold at a lower

price or one that offers greater usefulness or

satisfaction at a comparable price. ( A

no-name PC vs. an IBM brand; a Nissan vs.

Volvo.)

(22)

SOME QUALITY DEFINITIONS

♦

QUALITY MEANS “FITNESS FOR USE”.

♦

QUALITY IS MEETING OR EXCEEDING CUSTOMER

EXPECTATIONS.

♦

QUALITY IS INVERSELY PROPORTIONAL TO

VARIABILITY.

♦

QUALITY IS “THE TOTALITY OF FEATURES AND

CHARACTERISTICS OF A PRODUCT OR SERVICE

THAT BEAR ON ITS ABILITY TO SATISFY NEEDS”

(23)

Eight Principle

Dimensions of

Quality for Goods

♦

Performance (operation)

♦

Features

♦

Reliability

♦

Durability

♦

Conformance

♦

Serviceability

♦

Aesthetics

Quality

(24)

Eight Principle

Dimensions of

Quality for Goods

♦

Performance:

A product’s

primary

operating

characteristics. Will the product do the

intended job? (Car example -- acceleration,

braking distance, steering, maneuverability.)

(25)

Eight Principle

Dimensions of

_{Dimensions of}

Quality for Goods

♦

Features

: Characteristics of secondary

importance for the functioning of a product.

In other words, “the bells and whistles” of a

product. ( Power steering, antilock brakes,

tape/CD deck, A/C, reclining seats.)

(26)

Eight Principle

Dimensions of

_{Dimensions of}

Quality for Goods

♦

Reliability

: probability of a product’s

surviving over a specified period of time

under stated conditions of use. Consistency

of performance over time. How often does

the product fail? (Ability to start on cold

days, frequency of failure of various

components).

Güvenilirlik

(27)

Eight Principle

Dimensions of

_{Dimensions of}

Quality for Goods

♦

Durability

: Amount of use one gets from a

product before it physically deteriorates or

until replacement is preferable. How long

does the product last ? (Corrosion

resistance, wear of seat cover material, wiper

blades motor, AC compressor, etc.)

(28)

Eight Principle

Dimensions of

Quality for Goods

♦

Conformance

: Degree to which physical and

performance characteristics of a product

match preestablished standards. Is the

product made exactly as the designer

intended? (fit and finish, aerodynamic

properties-drag coefficient, freedom from

noise, fuel consumption.)

(29)

Eight Principle

Dimensions of

_{Dimensions of}

Quality for Goods

♦

Serviceability

: The speed, courtesy, and

competence of maintenance and repair. How

easy is it to service and repair the product?

(Access to spare parts, the number of

kilometers between major maintenance

service, ease and expense of service.)

(30)

Eight Principle

Dimensions of

_{Dimensions of}

Quality for Goods

♦

Aesthetics

: How a product looks, feels,

sounds, tastes, or smells. What does the

product look like? (Color, instrument panel

design, placement of controls, and “feel of

the road”.)

(31)

Eight Principle

Dimensions of

_{Dimensions of}

Quality for Goods

♦

Perceived Quality

: Subjective assessment of

quality resulting from image, advertising, or

brand names. What is the reputation of the

company or its product? (Brand image of

car, repair history reported by trade

magazines or friends.)

(32)

Service Quality Attributes

Under-standing

Tangibles

Reliability

Communication

Credibility

Security

Responsiveness

Competence

Courtesy

Access

(33)

Importance of Quality

♦

Costs & market

share

♦

Company’s

reputation

♦

Product

liability

♦

International

implications

Increased

Profits

Lower Costs

Productivity

Market Gains

Reputation

Volume

Price

Improved

Quality

(34)

Malcolm

Baldrige

National Quality

Award

♦

Established in 1988 by the U.S. government

♦

Designed to promote TQM practices

♦

Some criteria

♦

Senior executive leadership; strategic p lanning;

management. of process quality

♦

Quality results; customer satisfaction

(35)

Other Well

-

known Awards

♦

Deming Prize (Japan)

Established in 1951 in honor of Deming, the

quality guru who helped Japan achieve its

famous quality level

♦

European Foundation for Quality

Management (EFQM)

Established in 1988 by the European

Commission

(36)

Costs of Quality

♦

Prevention costs

- reducing the potential for

defects(training, quality improvement programs)

♦

Appraisal costs

- evaluating products (testing, labs,

inspectors)

♦

Internal failure

- of producing defective parts or

service before delivery to customers (scrap, rework,

downtime of machinery)

♦

External costs

- occur after delivery (returned

product, liabilities, loss of goodwill, warranty repair,

costs to society)

(37)

International Quality Standards

♦

ISO 9000 series (Europe/EU)

♦

Common quality standards for products sold in

Europe (even if made in U.S. or elsewhere)

♦

ISO 14000 series (Europe/EU)

♦

Environmental management standard

♦

standards for recycling, labeling etc.

(38)

EC Environmental Standard

ISO 14000

Core Elements:

♦

Environmental management

♦

Auditing

♦

Performance evaluation

♦

Labeling

♦

Life-cycle assessment

(39)

Traditional

Quality Process (Manufacturing)

Specifies

Need

Customer

Interprets

Need

Marketing

Designs

Product

Defines

Quality

Engineering

Produces

Product

Plans

Quality

Operations

alit

y is

(40)

TOTAL QUALITY MANAGEMENT

(

TQM

)

Encompasses entire organization, from

supplier to customer

Stresses a commitment by management to

have a continuing company-wide drive

toward excellence in all aspects of products

and services that are important to the

customer.

(41)

Achieving

Total Quality Management

Organizational

Quality

Principles

Employee

Fulfillment

Attitudes

(e.g., Commitment)

How to Do

What to Do

Effective

Business

Effective

Business

Customer

Satisfaction

Customer

Satisfaction

(42)

Deming

’

s Fourteen Points

1. Create constancy of purpose

2. Adopt philosophy of prevention

3. Cease mass inspection

4. Select a few suppliers

based on quality

(43)

Deming

’

s Fourteen Points

7. Instill leadership

among supervisors

8. Eliminate fear

among employees

9. Eliminate barriers

between departments

10. Eliminate slogans

11. Remove numerical quotas

12. Enhance worker pride

13. Institute vigorous education programs on

quality improvement

(44)

Concepts

For an Effective

TQM

Program

♦

Continuous improvement

♦

Improvement Model : PDCA

♦

Employee empowerment

♦

Benchmarking

♦

Just-in-time (JIT)

(45)

Continuous Improvement

♦

Represents continual improvement of

process & customer satisfaction

♦

Involves all operations

& work units

♦

Other names

♦

Kaizen (Japanese)

♦

Zero-defects

(46)

“ A never-ending journey”

CONTINUOUS IMPROVEMENT

Dr. Ömer Ya

ğ

ı

z

Department of Business Administration

Eastern Mediterranean University

(47)

“

UNLESS YOU CHANGE THE PROCESS, WHY

WOULD YOU EXPECT THE RESULTS TO

CHANGE?

”

The President of Texas Instruments

Defense Systems and Electronic Group

(48)

“

IMPROVE CONSTANTLY AND FOREVER

THE SYSTEM OF PRODUCTION AND

SERVICE. IMPROVEMENT IS NOT A

ONE-TIME EFFORT. MANAGEMENT IS

OBLIGATED TO CONTINUALLY LOOK FOR

WAYS TO REDUCE WASTE AND IMPROVE

QUALITY

.

”

(49)

“

KAIZEN STRATEGY IS THE SINGLE MOST

IMPORTANT CONCEPT IN JAPANESE

MANAGEMENT--THE KEY TO JAPANESE

COMPETITIVE SUCCESS. KAIZEN MEANS

‘ON-GOING’ IMPROVEMENT INVOLVING

EVERYONE--TOP MANAGEMENT,

MANAGERS, AND WORKERS

.

”

(50)

“

THE STARTING POINT FOR IMPROVEMENT

IS TO RECOGNIZE THE NEED. THIS COMES

FROM RECOGNITION OF A PROBLEM. IF NO

PROBLEM IS RECOGNIZED, THERE IS NO

RECOGNITION OF THE NEED FOR

IMPROVEMENT. COMPLACENCY IS THE

ARCH-ENEMY OF KAIZEN. THEREFORE,

KAIZEN EMPHASIZES

PROBLEM-AWARENESS AND PROVIDES CLUES FOR

IDENTIFYING PROBLEMS

.

”

(51)

PROCESS MANAGEMENT

♦

What is a process ?

A sequence of activities that is intended to

achieve some result, typically to create

added value for a customer.

♦

Two types of processes:

♦

core processes (those that drive the creation of

(52)

Process Management contd...

♦

To apply process management techniques,

processes must be

1. repeatable - process must recur over

time

2. measurable - information can be

(53)

CONTINUOUS IMPROVEMENT

(KAIZEN)

Kaizen is the name given by the Japanese to

continuous improvement. Continuous

improvement really means “continuous

incremental improvement.”

Kai

change

zen

good

Kaizen means making changes for the better

on a continual, never-ending basis.

(54)

Continuous Improvement

♦

Kaizen refers to improvement of both

processes and people.

♦

In fact Kaizen philosophy aims at improving

all aspects of an organization all the time.

♦

Good is never good enough; kaizen is a

(55)

Two Elements of Kaizen

♦

There are two elements that construct KAIZEN,

improvement/change for the better

and

ongoing/continuity.

Lacking one of those elements

would not be considered KAIZEN. For instance, the

expression of "business as usual" contains the

element of continuity without improvement. On the

other hand, the expression of "breakthrough"

contains the element of change or improvement

without continuity. KAIZEN should contain both

elements.

(56)

Overview of the concept of Kaizen

(Imai)

1. Kaizen value system --- continual

improvement of all things, at all levels, all the

time, forever.

2. Role of top management --- top management

is responsible for establishing Kaizen as the

overriding corporate strategy and

communicating this commitment to all levels

of the organization and allocating the

(57)

Overview of the concept of Kaizen

(Imai) contd...

3. Role of middle management --- responsible

for implementing the Kaizen policies

established by top management;

establishing, maintaining and improving

work standards; ensuring that employees

receive the training necessary to understand

and implement Kaizen, and ensuring that

(58)

Overview of the concept of Kaizen

(Imai) contd...

4. Role of supervisors --- responsible for

applying the Kaizen approach in their

functional roles; developing plans for

carrying out the Kaizen approach at the

functional level; improving communication at

the workplace; maintaining morale;

providing coaching for teamwork activities;

soliciting Kaizen suggestions from

(59)

Overview of the concept of Kaizen

(Imai) contd...

5. Role of employees --- responsible for

participating in Kaizen through teamwork

activities, making Kaizen suggestions,

engaging in continuous self-improvement

activities, continually enhancing job skills

through education and training, and

(60)

Overview of the concept of Kaizen

(Imai) contd...

6. Kaizen and quality --- In a TQM environment

quality is defined by customers. Regardless

of how customers define quality, it can

always be improved and it should be,

continually.

(61)

KAIZEN

♦

The following excerpt is taken from the

Kaizen Institute website

(www.kaizen-institute.com). It sums up the philosophy

and approach of KAIZEN.

♦

"Not a day should go without some kind of improvement being

made somewhere in the company. When KAIZEN is adapted in

organizations and management perspectives, however, it is easier

to talk about it than to implement it.

(62)

KAIZEN

It is very natural that people will propose some kind of change in

their own work place, when they become unsatisfied with their

present conditions. Some of the improvements could be carried out

right away. Perhaps, the boss won't even notice them. However,

when approval is required, several kinds of responses from the boss

could have taken place. The ideal situation is that the boss

encourages their subordinates to carry out their ideas. The boss

then appreciates the efforts or gives recognition. That's what people

expect when they propose something. The positive response given

by the boss will then develop trust with the subordinates and

(63)

The Wet Blanket List

However, life in the organization is not as easy. The boss

could ask you a silly question like: "it is not broken, why

should we change it" or "the procedure is fine with me, why

should we change it?". From your perspective, you know that

if you change it, the boss will blame you. The boss just did

not want to give you a try, with a lot of reasons and/or no

reasons. You could not do anything anymore, "the boss is

always right“ like the saying goes. There are so many bosses

like that.

The book KAIZEN talks about the list called "The Wet Blanket

List". The bosses should encourage their subordinates, but in

(64)

THE WET BLANKET LIST

1. I am too busy to study it

2. It's a good idea, but the timing is premature

3. It is not in the budget

4. Theory is different from practice

5. Isn't there something else for you to do ?

6. I think it doesn't match corporate policy

7. It isn't our business; let someone else think

about it

8. Are you dissatisfied with your work ?

9. It's not improvement, it's common sense

10. I know the result, even if we don't do it

11. I will not be held accountable for it

12. Can't you think of a better idea ?

(65)

THE WET BLANKET LIST

Yes, I heard them from my boss, you may say;

however, reflect on yourself before you blame your

boss. Your subordinates may also hear them from

you frequently. In an inefficient organization,

everybody tends to throw wet blankets everywhere.

You could also add more wet blankets from your own

vocabulary, the list could be endless.

(66)

Ten Basic Tips for KAIZEN

A

ctivities

“As you know by now, it is not easy to implement

the KAIZEN philosophy to where the culture is not

solid to adopt it. KAIZEN Institute can help to

change the way of thinking of your people and the

culture and make a difference. Here is the first

advice from us for you to start with, the list of basic

tips for KAIZEN to have the first step of KAIZEN

(67)

Basic Tips for Kaizen Activities

1. Discard conventional fixed ideas.

2. Think of how to do it, not why it cannot be done.

3. Do not make excuses. Start by questioning

current practices.

4. Do not seek perfection. Do it right away even if for

only 50% of target.

5. Correct it right away, if you make a mistake.

6. Do not spend money for KAIZEN, use your

wisdom.

7. Wisdom is brought out when faced with hardship.

8. Ask 'WHY?" five times and seek root causes.

(68)

Concept of Gembakaizen

In manufacturing industry, there are three major activities

directly related to earning money: developing, producing and

selling products. Without these activities, the company

cannot exist. Therefore, in a broad sense, GEMBA means the

sites of these three major activities. In a narrower context,

however, GEMBA means the place where the products are

made. The word is usually used in this narrower context,

since production sites have been one of the business arenas

most neglected by management.

(69)

Concept of Gembakaizen

Managers seem to write production off as only a secondary

means to earn money, and usually place far more emphasis

on such sectors as financial management, marketing and

sales, and product development. When GEMBA or production

sites do become a focus of management attention, though,

they can be turned into a utopia capable of making the

(70)

Concept of Gembakaizen

In the service industries, GEMBA is where the customers

come into contact with the services offered. In the hotel

business, for instance, GEMBA is everywhere: the lobby, the

dining room, guest rooms, the receptionist's desk, check-in

counters, and the concierge station. At banks, tellers are

working in GEMBA, as are loan officers receiving applicants.

The same goes for employee's working desks in offices and

for telephone operators sitting in front of switchboards. Thus,

GEMBA spans a multitude of offices and administrative

(71)

Concept of Gembakaizen

Now you have a good understanding of the words, KAIZEN

and GEMBA.

♦

GEMBAKAIZEN is KAIZEN activities that take place in GEMBA.

♦

GEMBAKAIZEN is to make continuous improvement at the

real place, where the action is going on, and that can make

your organization better. (Source: Kaizen Institute Web Page)

(72)

Kaizen Checklists

Kaizen is about continual improvement of

people, processes, procedures, and any

other factors that affect quality. An effective

way to identify problems that represent

opportunities for improvement is to use a

checklist that draws attention to those

(73)

Kaizen Checklists contd...

HOW CAN THIS BE IMPROVED ?

Factors which may need improvement:

1. personnel

9. software

2. work techniques

10. tools

3. work methods

11. materials

4. work procedures

12. plant layout

5. time

13. production levels

6. facilities

14. inventory

(74)

(75)

FIVE W

’

s and ONE H

Using the five W’s and One H encourages employees to

look at a process and ask questions.

WHO

WHAT

_WHAT

WHERE

_WHERE

HOW

WHEN

(76)

FIVE W

’

s and ONE H contd..

♦

Who

---Who is doing it? Who should be

doing it?

♦

What

--- What is being done? What should

be done?

♦

Where

--- Where is it being done ? Where

should it be done ?

♦

When

--- When is it being done ? When

should it be done ?

♦

Why

--- Why is it being done ? Why do it that

(77)

Five

-

M Checklist

Man

(Operator)

Machines

Material

Measurement

Methods

(78)

BOOKS ABOUT KAIZEN & GEMBA

KAIZEN

(79)

Concepts for an Effective TQM

Program

CONTINUED FROM SLIDE 44

♦

Continuous improvement

♦

Improvement Model : PDCA

♦

Employee empowerment (Quality Circles)

♦

Benchmarking

♦

Just-in-time (JIT)

(80)

Shewhart

’

s

PDCA Model

4.Act

1.Plan

3.Check

2.Do

Identify the

improvement and

make a plan

Test the

plan

Is the plan

working

Implement

the plan

(81)

PDCA Cycle (Deming Wheel)

1. Plan a change

aimed at

improvement.

1. Plan

2. Do

3. Check

4. Institutionalize

the change or

abandon or do

it again.

4. Act

PDCA Cycle (Deming Wheel)

PUKÖ DÖNGÜSÜ

Planla

Önlem al

(82)

Employee Empowerment

♦

Getting employees involved in product &

process improvements

♦

85% of quality problems are due to process &

material

♦

Techniques

♦

Support workers

♦

Let workers make decisions

♦

Build teams & quality circles

(83)

Quality Circles

♦

Group of 6-12 employees from same

work area

♦

Meet regularly to solve work-related

problems

♦

4 hours/month

♦

Facilitator trains

& helps with

meetings

(84)

Benchmarking

Selecting best practices to use

as a standard for performance

♦

Determine what to benchmark

♦

Form a benchmark team

♦

Identify benchmarking partners

♦

Collect and analyze benchmarking information

♦

Take action to match or exceed the benchmark

(85)

Resolving Customer Complaints

Best Practices

♦

Make it easy for clients to complain

♦

Respond quickly to complaints

♦

Resolve complaints on the first contact

♦

Use computers to manage complaints

♦

Recruit the best people for customer service

(86)

Just

-

in

-

Time (JIT)

Relationship to quality:

♦

JIT cuts cost of quality (scrap, rework costs

decrease)

♦

JIT improves quality (errors caught earlier)

♦

Better quality means less inventory and better,

easier-to-employ JIT system (safety stocks

decreased)

(87)

Just

-

in

-

Time (JIT)

♦

‘Pull’ system of production/purchasing

♦

Customer starts production with an order

♦

Involves ‘vendor partnership programs’ to

improve quality of purchased items

♦

Reduces all inventory levels

♦

Inventory hides process & material problems

(88)

Just

-

In

-

Time (JIT) Example

Scrap

Work in process inventory level

(hides problems)

Unreliable

(89)

Just

-

In

-

Time (JIT) Example

Scrap

Reducing inventory reveals

problems so they can be solved.

Unreliable

(90)

Taguchi

Concepts

♦

Most quality problems are the result of poor

product and process design.

♦

Experimental design methods to improve product &

process design

♦

Identify key component & process variables affecting

product variation

♦

Taguchi Concepts

♦

Quality robustness

(can be produced uniformly and

consistently under adverse–unfavorable-manufacturing and

environmental conditions)

(91)

Quality Robustness

♦

Ability to produce

products uniformly

regardless of

manufacturing

conditions

♦

Put robustness in

House of Quality

matrices besides

(92)

♦

Shows social cost ($) of deviation from target

value, i.e. poor quality

♦

customer dissatisfaction, warranty and service costs,

internal inspection, repair and scrap costs

♦

all are called

COSTS TO SOCIETY

♦

Assumptions

♦

Most measurable quality characteristics (e.g., length,

weight) have a target value

♦

Deviations from target value are undesirable

Quality Loss Function

(93)

Quality Loss Function

♦

Equation: L = D

2 _C

♦

L = Loss to society ($)

♦

D

2 = Deviation (actual – target)

2

(94)

Quality Loss Function Graph

Loss

X

Target

USL

LSL

Loss = (Actual X - Target)

2 _{• (Cost of Deviation)}

Lower (upper)

Measurement

Greater deviation,

more people are

dissatisfied, higher

cost

(95)

Quality Loss Function Example

The specifications for the

diameter of a gear are

25.00 ± 0.25 mm

.

If the diameter is out of

specification, the gear

must be scrapped at a

cost of

$4.00

. What is the

(96)

Quality Loss Function Solution

♦

L = D

2 _{C = (X - Target)}

2 _C

♦

L = Loss ($); D = Deviation; C = Cost; X= Actual

dimension

♦

4.00 = (25.25 - 25.00)

2 _C

♦

Item scrapped if greater than 25.25

(USL = 25.00 + 0.25) with a cost of $4.00

♦

C = 4.00 / (25.25 - 25.00)

2 _{= 64}

(97)

LOSS 312,5 200 112,5 50 12,5 0 12,5 50 112,5 200 312,5 0 50 100 150 200 250 300 350 0,45 0,46 0,47 0,48 0,49 0,5 0,51 0,52 0,53 0,54 0,55 LOSS

Target value

Tolerance

specification limits 0.500+- 0.020 cm

cost to repair during warranty period = $50

L= (X - T)

2

C

C=50/.0004 = 125,000

TAGUCHI LOSS FUNCTION DEMO

X

T

D = X - T

D

2

C

LOSS

0.45

0.5 -0.05

0.0025

125000

312.5

0.46

0.5 -0.04

0.0016

125000

200

0.47

0.5 -0.03

0.0009

125000

112.5

0.48

0.5 -0.02

0.0004

125000

50

0.49

0.5 -0.01

0.0001

125000

12.5

0.5

0 0.0000

125000

0

0.51

0.5

0.01 0.0001

125000

12.5

0.52

0.5

0.02 0.0004

125000

50

0.53

0.5

0.03 0.0009

125000

112.5

0.54

0.5

0.04 0.0016

125000

200

0.55

0.5

0.05 0.0025

125000

312.5

(98)

Target Specification Example

A study found U.S. consumers preferred Sony TV’s

made in Japan to those made in the U.S. Both factories

used the same designs & specifications. The difference

in quality goals made the difference in consumer

preferences.

Japanese factory

(Target-oriented)

U.S. factory

(99)

(Conformance-Quality Loss Function; Distribution of

Quality Loss Function; Distribution of

Products Produced

Low loss

High loss

Frequency

Loss (to

producing

organization,

customer, and

society)

Quality Loss Function (a)

Unacceptable

Poor

Fair

Good

Best

Target-oriented

quality yields more

product in the

“best” category

Target-oriented quality

brings products toward

the target value

Conformance-oriented

quality keeps product

within three standard

deviations

(100)

Tools of TQM

♦

Tools for generating ideas

♦

Check sheet

♦

Scatter diagram

♦

Cause and effect diagram

♦

Tools to organize data

♦

Pareto charts

♦

Flow charts