Learning objectives of this chapter include: Total quality management defined, quality specifications and costs, six sigma quality and tools, external benchmarking, ISO 9000, service quality measurement. | Chapter 8 Quality Management 2 Total Quality Management Defined Quality Specifications and Costs Six Sigma Quality and Tools External Benchmarking ISO 9000 Service Quality Measurement OBJECTIVES 2 Total Quality Management (TQM) Total quality management is defined as managing the entire organization so that it excels on all dimensions of products and services that are important to the customer 3 Quality Specifications Design quality: Inherent value of the product in the marketplace Dimensions include: Performance, Features, Reliability/Durability, Serviceability, Aesthetics, and Perceived Quality. Conformance quality: Degree to which the product or service design specifications are met 7 Costs of Quality External Failure Costs Appraisal Costs Prevention Costs Internal Failure Costs Costs of Quality Six Sigma Quality A philosophy and set ofmethods companies use to eliminate defects in their products and processes Seeks to reduce variation in the processes that lead to product . | Chapter 8 Quality Management 2 Total Quality Management Defined Quality Specifications and Costs Six Sigma Quality and Tools External Benchmarking ISO 9000 Service Quality Measurement OBJECTIVES 2 Total Quality Management (TQM) Total quality management is defined as managing the entire organization so that it excels on all dimensions of products and services that are important to the customer 3 Quality Specifications Design quality: Inherent value of the product in the marketplace Dimensions include: Performance, Features, Reliability/Durability, Serviceability, Aesthetics, and Perceived Quality. Conformance quality: Degree to which the product or service design specifications are met 7 Costs of Quality External Failure Costs Appraisal Costs Prevention Costs Internal Failure Costs Costs of Quality Six Sigma Quality A philosophy and set ofmethods companies use to eliminate defects in their products and processes Seeks to reduce variation in the processes that lead to product defects The name, “six sigma” refers to the variation that exists within plus or minus three standard deviations of the process outputs Six Sigma Quality (Continued) Six Sigma allows managers to readily describe process performance using a common metric: Defects Per Million Opportunities (DPMO) Six Sigma Quality (Continued) Example of Defects Per Million Opportunities (DPMO) calculation. Suppose we observe 200 letters delivered incorrectly to the wrong addresses in a small city during a single day when a total of 200,000 letters were delivered. What is the DPMO in this situation? So, for every one million letters delivered this city’s postal managers can expect to have 1,000 letters incorrectly sent to the wrong address. Cost of Quality: What might that DPMO mean in terms of over-time employment to correct the errors? Six Sigma Quality: DMAIC Cycle Define, Measure, Analyze, Improve, and Control (DMAIC) Developed by General Electric as a means of focusing effort on quality using a .
