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1、Total Quality Management,Part 0: What is Quality? Part 1: Economics of Quality Part 2: TQM: Principles and Managerial Methods Part 3: TQM: Improvement Tools,Principal objectives of the lecture,What is quality? The economics of quality: What is the relationship of: Quality and Cost Quality and Produc
2、tivity Quality and Profitability What is total quality management?,What is Quality?,Five definitions of quality-Garvin,Transcendent Product-based User-based Manufacturing-based Value-based,Transcendent,“Quality is neither mind nor matter, but a third entity independent of the two Even though quality
3、 cannot be defined, you know what it is.” -Robert M. Pirsig,Product-based,“Differences in quality amount to differences in the quantity of some desired ingredient or attribute.” -Lawrence Abbot,User-based,“Quality is fitness for use.” -Joseph M. Juran,Manufacturing-based,“Quality is the degree to wh
4、ich a specific product conforms to a design or specification.” -Harold L. Gilmore “Quality is product uniformity around the target.” -Genichi Taguchi,Value-based,“Quality is the degree of excellence at an acceptable price and the control of variability at an acceptable cost.” -Robert A. Broh,Dimensi
5、ons of quality,Performance (primary product characteristics) Features (“bells and whistles”) Reliability (frequency of field failures) Conformance (match with specifications) Durability (product life) Serviceability (speed, courtesy, or competence of repair) Aesthetics (“fits and finishes”) Perceive
6、d quality (reputation and intangibles),Dimension Product Example: Service Example:,Stereo Amplifier Checking Account at Bank,PerformanceSignal-to-noise ratio,powerTime to process customer requests,FeaturesRemote controlAutomatic bill paying,ReliabilityMean time-to failureVariability of time to proce
7、ss requests,DurabilityUseful life (with repair)Keeping pace with industry trends,ServiceabilityEase of repairResolution of errors,Courtesy of dealerCourtesy of teller,EstheticsOak-finished cabinetAppearance of bank lobby,ReputationConsumer Reports rankingAdvice of friends, years in business,Source:
8、Modified from Paul E. Plsek, “Defining Quality at the Marketing/Development Interface.” Quality Progress, June 1987, pp. 28-36.,Quality Specifications,Design quality inherent value of the product or service in the marketplace Conformance quality degree to which the product or service design specific
9、ations are met,Design Quality,Conformance Quality,Fitness of Use,Fitness of use degree to which the final product or service meets the customers objectives,Economics of Quality,Quality,Cost,Productivity,Profitability,Traditional cost/quality tradeoff,Cost,Quality,Quality and cost,Unavoidable costs (
10、Price of Conformance = POC) Appraisal Prevention Avoidable costs (Price of Nonconformance = PONC) Internal failure External failure,Appraisal costs,Test and inspection materials and services Wages of inspection personnel Product quality audits Maintenance of test equipment Customer satisfaction audi
11、ts Supplier appraisals Employee surveys Mystery shopper program,Prevention costs,Quality planning Process control Education and training Preventive maintenance Supplier training/certification Failure analysis Customer relationship management Quality systems development,Internal failure costs,Scrap R
12、ework Downtime/overtime Downgrading/disposition Analysis of scrap/rework Accidents/injuries Employee turnover Loss of morale Handling grievances,External failure costs,Complaints processing Warranty Product recall Product liability Field service Repair Administrative costs,PONC estimates,COMPANYYEAR
13、 PONC as percentage of sales,IBM198015-40,Motorola198613,Heinz1989($350-400 Million),Motorola19898 ($800 Million),General electric estimates,STAGECost per defect per product,Supplier inspection cost$0.003 Incoming inspection cost$0.03 Fabrication inspection cost$0.30 Subproduct test cost$3.00 Final
14、product test cost$30.00 Product service cost$300.00,Traditional processes,Cost,Conformance Quality,0%,100%,Total cost,PONC,POC,Emerging processes,Cost,Conformance Quality,0%,100%,Total cost,PONC,POC,Quality and productivity,Common roots: Design for manufacturability Simplicity Improved equipment Bet
15、ter maintenance Less downtime Worker motivation,Quality and profitability,Profit = Revenue - Cost = (Price) (Sales) - Cost,Quality and profitability,1) Market Gains,Higher Quality,-Garvin,Improved Reputation,Higher Market Share,Experience-based economies,Higher Prices,Higher Profits,Quality and Prof
16、itability (cont.),2) Cost,Higher Quality,Lower per unit Cost,What is total quality management?,The total quality management triangle,Bedrock principles,Managerial methods,Improvement tools,T Q M,Bedrock principles,Customer focus Continuous improvement Total employee involvement,Customer focus,“A cus
17、tomer is the most important person even in the office in person or by mail. A customer is not an interruption of our work he is the purpose of it.” -L. L. Bean,Customer focus,Know thy customers Who they are What their requirements are Only the customer can define customer satisfaction Quality is wha
18、t the customer says it is! Organizational self-assessment,Continuous improvement,Continuous improvement of all processes - forever,RESULT,.,Process Process: The way everyone thinks, behaves, and acts every day,The quality incline,QUALITY,Total employee involvement,Inside every individual is infinite
19、 creative potential Involvement is getting peoples ideas, and respecting those ideas Management has to ask for ideas Let them make their workplace better for themselves,Total employee involvement (cont.),In a service organization customer relations are a reflection of employee relations Quality is a
20、 state of mind No other resource improves with age,Total employee involvement,TQM is not a spectator sport,I hear and I forget I see and I remember I do and I understand,Managerial methods,Governance Organization Decision making,Managerial methods,“The people work in a system. The job of the manager
21、 is to work on the system to improve it, constantly, with their help.” -Myron Tribus,Management by fact Prevention based Process-oriented,Managerial methods,Push Power Up,Managerial methods,Macho Manager,Benevolent Manager,Participative Manager,TQM Leader Manager,Do to,Do for,Do with,Facilitate Enab
22、le,Process-oriented management,RESULT,.,Discipline Time management Personal development Participation Morale Communication Teamwork PEOPLE,Performance,Check with the result, not by the result,Relationship management,“The customer usually doesnt know what hes getting until he doesnt.” -Ted Levitt,Selling Marketing Relationship management,Provider,Provider,Customer,Cu
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