Production & Operations Management

For
PGDM Participants

By

Prof. Ashutosh Sharma

(Asst. Professor)
I.T.S Mohan Nagar, Ghaziabad
Unit-4
 Quality Management
A Quality management is the act of
overseeing all activities and tasks that
must be accomplished to maintain a
desired level of excellence. This
includes the determination of a quality
policy, creating and implementing
quality planning, assurance, quality
control and quality improvement. In
general, quality management focuses
on long-term goals through the
implementation of short-term
initiatives.
 Garvin’s Eight Dimensions of Quality
Product quality is one of the leading positioning tools used by marketers for
the promotion of their product. Constantly improving the quality of your
product and services is essential to remain competitive. Japanese companies
have been practicing TQM (Total Quality Management) for a long time and
it is an important factor that turned Japan into an economic powerhouse.
David A Garvin, a Harvard Business School Professor and a thought leader
in the area of organizational learning, emphasized the importance of
understanding quality and its various dimensions for business managers in
his 1987 research article published in HBR (Harward Business Review)
Titled-“Competing on The Eight Dimensions of Quality”.
According to him, Business managers needed to adopt a new way of
thinking for Strategic Quality management which was to understand how
customers looked at things or a conceptual bridge to the consumers’
vantage point of view. Managers also needed to see quality as a business
strategy and break it into understandable and manageable parts. Garvin
proposed eight critical dimensions of quality, some of which were mutually
reinforcing and some not. A product or service could rank high on one
dimension of quality and low on the other. Some dimensions were not
mutually reinforcing meant that improvement in one dimension does not
affect the another one.
1. Performance: Performance is one of the leading dimensions of quality
and most customers judge the product’s quality based upon performance.
For example, if you want a television set, you will be looking for factors
like sound, picture clarity, colours, etc. This is what performance means in
the case of a television set. However, in the case of an automobile, there are
other factors that help you to measure performance. Acceleration, mileage,
handling, convenience, etc mean performance for an automobile. Nobody
likes to buy a noisy car and so low noise is also a sign of quality for an
automobile.
In the services industry, for example, the hospitality industry, performance
often means prompt and courteous service.
2. Features: Features are the second dimension of quality and often
regarded as the second aspect of performance. Features are the
characteristics supporting the basic performance of a product or service.
For example, by adding free drinks by flight services providers improve the
appeal of their services.
Automatic updates or automatic light adjustment in a smart-phone
improves its appeal for users. Separating ‘features’ from ‘performance’ is
difficult because drawing a clear line between the two is generally not
possible.
The crucial thing is that features involve objective and measurable
attributes. For many customers, superior quality means that they have a
larger number of options. Furniture stores often offer several varieties in
terms of colour and fabric quality.
3. Reliability: This dimension of quality is also related to the functioning
of the product and how likely it is to fail or malfunction during a specific
time period. Garvin has highlighted three measures of reliability which are:
❖ The mean time to the first failure
❖ The mean time between failures
❖ The failure rate per unit time
Now, these measures of reliability require a product to stay functional for a
given time period and therefore they apply mainly to durable goods instead
of the products that are consumed instantly. If downtime and maintenance
are expensive, reliability becomes even important for the customers. in the
case of automobiles, reliability has become an important product attribute
making products more or less attractive in the eyes of the buyer.
4. Conformance: Conformance means
the ability to meet established
standards. The degree to which the
design and operating characteristics of
a product meet the established quality
standards is called conformance. There
are specifications of some kind related
to all products and services. When new
designs or models are developed,
standards are set for the purity of the
raw material and dimensions are set for
the parts used.
5. Durability: Durability, another dimension of product quality, is a
measure of product life. It has both economic and technical dimensions.
Technically, you can define durability as the amount of use you get from a
product before it deteriorates. Take a bulb for example. After prolonged
use, the filament of a bulb burns and fails. It is now time to replace it. There
is a close link between durability and reliability. Due to this link between
reliability and durability companies sometimes also often lifetime guarantee
on their products. Durability varies from brand to brand also. Duracell is
considered a more durable product due to higher life than normal batteries.
6. Serviceability: The sixth dimension of quality is serviceability which simply implies
the ease of service or repair. However, apart from the ease of repair, speed, courtesy, and
competence also matter. The consumer’s concern is what if the product breaks and how
much time will it take to restore the services.
Other concerns of the consumer include the timeliness of the service appointments and
if the service personnel will keep the appointment and do the servicing in a timely
manner as well as the frequency with which repairs fail to correct the problem. If the
company fails to provide repair and maintenance services in a timely manner, this will
also affect the customer’s perception of the product or services.
Even if a repair restores the service, it is not a guarantee of complete satisfaction. How
the company handles complaints, is important for its reputation. Many reputed
companies offer various channels from which customers can register complaints and get
their problems resolved. Leading technology and FMCG Companies use email, Social
Media Channels, websites as well as toll-free numbers to address consumer complaints.
7. Aesthetics: The last two dimensions of quality are the most subjective.
Aesthetics are a matter of personal judgment and individual preference.
How much a customer likes the look, feel, sound, taste or smell of a
product is all a matter of individual preference.
Someone likes a small and quiet car, and another one wants a big car with a
loud engine. Since not all people prefer the same flavour or colour,
companies need to search for a niche. It is impossible to please everyone on
this dimension of quality.
8. Perceived Quality: Consumers do not always have complete information
regarding a product or service’s attributes. Therefore, they use indirect
measures to make a comparison. One cannot directly observe durability but
can infer it from the various tangible or intangible aspects of the product.
In such a situation, brand name, advertising, and images are critical for
building the customers’ perception about quality. Reputation is the main basis
for perceived quality. It affects people’s perception about a product deeply.
For example, if Sony makes great televisions and walkmans, it makes good
smart-phones also. If Honda makes great cars, its bikes are also good. It is a
kind of unstated analogy where customers compare a new line of products by
a company with its existing line of products.
 Deming’s 14 Principles - A Recipe for Total Quality
Quality is often thought to start and end with the customer, and all points
leading to and from the customer must aim for high-quality service and
interaction.
But to be truly successful, quality needs to be built into every level of a
company, and becomes part of everything the organization does. Deming's
14-Point Philosophy is a great tool you can use to build quality at every
level of your business. Dr. W. Edwards Deming a statistician who went to
Japan to help with the census after World War II, Deming also taught
statistical process control to leaders of prominent Japanese businesses. His
message was - By improving quality, companies will decrease expenses as
well as increase productivity and market share.
Deming's points apply to any type and size of business. Service companies
need to control quality just as much as manufacturing companies. And the
philosophy applies equally to large multinational corporations, different
divisions or departments within a company, or even single-person
operations. 14 Principles of Dr. W. Edwards Deming can be explained as
follows:
1. Create constancy of purpose for improving products and services
❖ Plan for quality in the long term.
❖ Resist reacting with short-term solutions.
❖ Don't just do the same things – find better things to do.
❖ Predict and prepare for future challenges, and always have the goal of
getting better.
2. Adopt the New Philosophy
❖ Embrace quality throughout the organization.
❖ Put your customers' needs first, rather than react to competitive pressure
– and design products and services to meet those needs.
❖ Be prepared for a major change in the way business is done. It's about
leading, not simply managing.
❖ Create your quality vision, and implement it.

3. Stop Depending on Inspections

❖ Inspections are costly and unreliable – and they don't improve quality,
they merely find a lack of quality.
❖ Build quality into the process from start to finish.
❖ Don't just find what you did wrong –eliminate the “wrongs” altogether.
❖ Use statistical control methods – not physical inspections alone – to
prove that the process is working.

4. End the practice of awarding business on price alone; instead,

minimize total cost by working with a single supplier.
❖ Quality relies on consistency – the less variation you have in the input,
the less variation you'll have in the output.
❖ Look at suppliers as your partners in quality. Encourage them to spend
time improving their own quality – they shouldn't compete for your
business based on price alone.
❖ Analyze the total cost to you, not just the initial cost of the product.
❖ Use quality statistics to ensure that suppliers meet your quality standards.
5. Improve Constantly and Forever in every process for planning,
production and service
❖ Continuously improve your systems and processes. Deming promoted
the Plan-Do-Check-Act approach to process analysis and improvement.
❖ Emphasize training and education so everyone can do their jobs better.
❖ Use Kaizen as a model to reduce waste and to improve productivity,
effectiveness, and safety.
6. Use Training on the Job
❖ Train for consistency to help reduce variation.
❖ Build a foundation of common knowledge.
❖ Allow workers to understand their roles in the “big picture”.
❖ Encourage staff to learn from one another, and provide a culture and
environment for effective teamwork.
7. Implement Leadership
❖ Expect your supervisors and managers to understand their workers and
the processes they use.
❖ Don't simply supervise – provide support and resources so that each staff
member can do their best. Be a coach not a policeman.
❖ Figure out what each person actually needs to do their best. For example,
hardware, software, other tools, and training.
❖ Emphasize the importance of participative management and
transformational leadership.
❖ Find ways to reach full potential, and don't just focus on meeting targets
and quotas.
8. Eliminate Fear
❖ Allow people to perform at their best by ensuring that they're not afraid
to express ideas or concerns.
❖ Let everyone know that the goal is to achieve high quality by doing more
things right – and that you're not interested in blaming people when
mistakes happen.
❖ Make workers feel valued, and encourage them to look for better ways to
do things.
❖ Ensure that leaders are approachable and that they work with teams to act
in the company's best interests.
❖ Use open and honest communication to remove fear from the
organization.
9. Break Down Barriers Between Departments
❖ Build the "internal customer" concept – recognize that each department or
function serves other departments that use their output.
❖ Build a shared vision. Use cross-functional teamwork to build
understanding and reduce adversarial relationships.
❖ Focus on collaboration and consensus instead of compromise.

10. Get Rid of Unclear Slogans

Let people know exactly what you want – don't make them guess. "Excellence in
service" is short and memorable, but what does it mean? How is it achieved? The
message is clearer in a slogan like "Always be striving to be better.” However,
don't let words and nice-sounding phrases replace effective leadership. Outline
your expectations, and then praise people face-to-face for doing good work.
11. Eliminate numerical quotas for the workforce and numerical goals
for management
❖ Look at how processes are carried out, not just numerical targets.
Deming said that production targets can encourage high output but result
in low quality.

12. Remove Barriers to Pride of Workmanship

❖ Allow everyone to take pride in their work without being rated or
compared.
❖ Treat workers equally, and don't make them compete with colleagues for
monetary or other rewards. Over time, the quality system will naturally
raise the level of everyone's work to an equally high level.
13. Implement Education and Self-Improvement
❖ Improve the current skills of workers.
❖ Encourage people to learn new skills to prepare for future changes and
challenges.
❖ Build skills to make your workforce more adaptable to change, and
better able to find and achieve improvements.

14. Make "Transformation" Everyone's Job

❖ Improve your overall organization by having each person take a step
towards quality.
❖ Analyze each small step, and ask yourself how it fits into the bigger
picture.
Taken as a whole, the 14
points are a guide to the
importance of building
customer awareness,
reducing variation, and
fostering constant
continuous change and
improvement throughout
organizations.
 Quality Circles
Quality circles are small groups of employees who meet frequently to help
resolve company quality problems and provide recommendations to management
A quality circle is a group of people in the workplace who perform the same, or
similar, functions in their job. They meet regularly to look at different ways to
discover and solve issues related to their role at work. Also known as a quality
control cycle, these groups of people will normally be small in number (3-10) and
be led by the supervisor.
Quality circles got their start in the 1950's with the concept being pioneered by
W. Edwards Deming. Toyota liked the idea and began using it in a variety of
ways throughout their manufacturing facilities and other areas. Companies
around the world began implementing this strategy, and by 1978 there were more
than a million circles operating with ten million workers involved in Japan alone.
 Quality Circle Process
Most quality circles will work
through a set process with each
meeting. In general, this will follow
the Plan, Do, Check, Act Process,
which is ideal for continuous
improvement projects.
Many companies today use quality
circles, especially when it comes to
manufacturing. The most well-
known example would be Toyota,
which helped to pioneer the
concept decades ago.
Another example would be Lockheed Martin. Lockheed Martin began using
quality circles in their manufacturing facilities back in 1974. Executives from
this company learned of quality circles when visiting Japanese manufacturing
plants, and saw how beneficial they could be. Soon after Lockheed Martin, a
number of other US companies added them to their workplaces, including
GM, Northrop and Westinghouse.

Measuring Success of Quality Circles

It is important that quality circles gather data and measure their success in
order to ensure things are actually having a positive impact on the workplace.
When groups of people from one department get together and propose
solutions to problems, it can be tempting to try to come up with an agreement
on how something should be done, and then implement it immediately.
 Implementing Quality Circles
When implementing quality circles, it is important to provide some
guidance to the groups to get started. Companies that simply ask different
departments to get together once a month to discuss how things can be
improved will often find that the meetings are unproductive, and end up
turning into a waste of time.
A company will often have one person who has become an expert in quality
circles and attend meetings with each circle for several times in beginning.
 PDCA cycle – KAIZEN
PDCA Cycle is golden cycle for KAIZEN Dr. Walter A. Shewhart and Dr.
W. Edward Deming advocated PDCA concept for productivity
management, and continuous quality improvement of process and products.
PDCA is the “golden cycle for improvement”. It is a methodical approach
for problem solving and continuous improvement. PDCA wheel should be
considered a never-ending cycle for improvement towards an ideal
condition. Plan is to establish objectives and process or countermeasures
with expected outcome based on the past performances or future
forecasting of work Do is to implement the processes or countermeasures
planed.
Check is to measure the effectiveness or achievement of processes or
countermeasures planed between the actual results and expected results to
ascertain any differences. Act is to analyze the differences to identify the
causes of “Gap”, and take necessary action to improve changes. PDCA
cycle is the concept behind the KAIZEN approach. Look at how PDCA
cycle is used in KAIZEN approach. PDCA is rotated like the way described
in the figure.
During the planning, 5W1H need to be clarified against the theme or topic
as shown below:
1. Why are we undertaking the project?
2. What are we going to do? or, What data is required?
3. Who is responsible for each task? or, Who should be involved?
4. Where can we find relevant data and facts?
5. When must a task be complete? or, When do we need to give feedback?
6. How must it be accomplished? or, How do we review?
Then, implement the plan and see the effectiveness and efficiency of those
activities that are taken. Then, activities that show good result should be
standardize and adopted in routine practice. The activities that do not reduce
the problems should be discontinued and it is necessary to plan better
activities for improvement of the situation
 When to Use the PDCA Cycle
The are many instances where the PDCA cycle can be used to drive
progress. These include:
➢ At the beginning of a new improvement project.
➢ When you first introduce a Kaizen program, to drive a cultural shift.
➢ While identifying root causes of problems to determine solutions.
➢ To improve a process that could be working more efficiently.
 Total
Quality
Management
Model
(TQM)
 Total Quality Management Model
Customers and their feedbacks are the foundation of every Total Quality
Management model. In simpler words, Total Quality Management begins with
understanding customers, their needs and what they expect from the organization.
Design foolproof processes and systems to collect customer data, information to
further study, analyze and act accordingly. Such activities not only help you
understand your target customers but also predict customer behaviour.
As a business marketer, you need to know the age group of your target customers,
their preferences and needs. Employees need to know how their products or
services can fulfil customer needs and demands.
Total Quality Management model requires meticulous planning and research.
Every total quality management model integrates customer feedbacks with
relevant information and plans accordingly to design effective strategies to
achieve high quality products.
 Six Sigma and TQM
Both Six Sigma and TQM are quality improvement systems that look
forward to reducing defects and improving the quality of processes. Six
Sigma is the methodology that aims at performance improvement by
reducing the number of defects produced, resulting in profit increase and
cost reduction. On the other hand, TQM is concerned with the employment,
maintenance, and development of the organizational processes, resulting in
incremental change in process quality. So, while both the tools are aimed at
quality improvement and reduction of defects, where does the difference
lie? The main difference lies in the focus, approach, and scope.
Let us look at these differences in detail;
Focus: TQM focuses on the goals that are quantitative in nature and related
to individual departments with the ultimate focal point being customer
satisfaction. But, Six Sigma utilizes the efforts of multiple departments and
has a data-driven and statistical approach that measure and analyzes data to
determine the number of defects leading to degrading of process quality.

Approach: TQM views quality as conformance to internal requirements,

while Six Sigma improves quality by reducing the number of defects.

Quality: TQM defines quality as the process meeting the standards

established by the organization. But, Six Sigma defines it as the process
with minimum amounts of defects.
Skills required: Six Sigma requires the skills of well-trained professionals
like Green or Black Belts, while TQM doesn’t require any such extensive
training, and is carried out by managers who are not solely dedicated to
TQM. Six Sigma requires participation of only certified professionals,
while TWM is a part-time activity that be carried out easily by quality
managers.

So, we can now see that Six Sigma can deliver more effective and better
results as compared to TQM, as it is a new approach over the traditional
approach of TQM. The process of Six Sigma is more result-oriented and
accurate, which will definitely make it go much further than TQM in the
future.
 7 QC Tools
1. Check Sheet: Also called defect concentration diagram
A check sheet is a structured, prepared form for collecting and analyzing
data. This is a generic data collection and analysis tools that can be adapted
for a wide variety of purposes and is considered one of the 7 basic quality
tools.
We can make use of it, when;
✓ When data can be observed and collected repeatedly by the same person
or at the same location.
✓ When collecting data on the frequency or patterns of events, problems,
defects, defect location, defect causes, or similar issues.
✓ When collecting data from a production process.
 STEPS IN CHECK SHEET
Step-1- Decide what event or problem will be observed. Develop
operational definitions.
Step-2- Decide when data will be collected and for how long.
Step-3- Design the form. Set it up so that data can be recorded simply by
making check marks or X's or similar symbols and so that data do
not have to be recopied for analysis.
Step-4- Label all spaces on the form.
Step-5- Test the check sheet for a short trial period to be sure it collects the
appropriate data and is easy to use.
Step-6- Each time the targeted event or problem occurs, record data on the
check sheet.
Example- The figure below shows a check sheet used to collect data on
telephone interruptions. The tick marks were added as data was collected
over several weeks.
2. Fishbone Diagram: “Fishbone Diagram” also known as “Ishikawa
diagram” and “Cause and Effect diagram. It helps to Identify all
potential or probable causes and select the best cause which contributes to
the problem/effect. The brainstorming technique is used here for potential
cause identification. In a brainstorming session, all 4M or 6M factors are
taken into consideration to identify the potential causes. 4M or 6M factors
are – Man, Machine, Method, Material, Measurement, and Mother nature
also called Environment.
 Steps for making “Cause and Effect Diagram”

Step-1: Identify & define the problem/effect. Use 5W2H approach to

define problem.
Step-2: Fill in the Problem Box & draw the spine.
Step-3: Identify main 4M or 6M categories/factors i.e. Primary causes.
Step-4: Identify Probable Causes that contributes to the problem/effects.
Also called Secondary causes.
Step-5: Add detailed levels i.e. identify sub-causes & analyze the diagram.
Also called Tertiary causes.
 Benefits of “Fishbone Diagram”

✓ Focus is on ‘Causes’ rather than on ‘Symptoms’ or ‘assumptions’.

✓ Break problems down into small pieces to find the real root cause.
✓ Increase people involvement & teamwork.
✓ Improves team performance & effectiveness.
✓ Improves process knowledge.
✓ A common understanding of factors causing the problem.
3. Histogram: A Histogram is a
pictorial representation of a set of
data, and the most commonly
used bar graph for showing
frequency distributions of
data/values. It is created by
grouping the measurements into
“cells” or “class ” or “bins”. It is
similar to the bar chart, but it
groups data points into classes
and plot frequencies.
 Steps for constructing a Frequency distribution graph or Histogram
Step-1- Count the number of data points ‘n’.
Step-2- Compute the range of data. The range ‘R’ is the difference between
the largest and the smallest value in the sample.
Step-3- Determine the number of classes or intervals i.e. class size
Step-4- Compute class width. i.e. Range/No. of classes.
Step-5- Prepare the Tally sheet or Check sheet by summarizing data on it.
Step-6- Count the number of parts in each interval i.e. Number of
frequencies within a particular class.
Step-7- Now plot the graph. Place frequencies on the vertical axis, and
class intervals on the horizontal axis.
Step-8- Interpret the histogram by seeing the shape distribution.
 BENEFITS OF HISTOGRAM

– A bar graph that shows the frequency distribution of values/data.

– To assess Process capability & to understand variation.
– Useful to understand the spread or variations, location, and shape of the data.
– To know whether a process is stable and predictable.
– To know whether the process produces within specification.
– Process monitoring and centring.
4. Pareto chart: Pareto chart helps to Narrow problem area or prioritize
the significant problems for corrective measures. Pareto Chart based
on Pareto 80-20 rule. It means that 80 percent of the problems/failures are
caused by 20 percent of the few major causes/factors which are often
referred as Vital Few. And the remaining 20 percent of the problems are
caused by 80 percent of many minor causes which are referred as Trivial
Many. Hence, it gives us information about Vital few from Trivial many.
 Steps of “Pareto Chart”

Step 1: Record the data – Refer Check Sheet.

Step 2: Order the data.
Step 3: Label the vertical axis.
Step 4: Label the Horizontal axis.
Step 5: Plot the Bars.
Step 6: Add up the counts.
Step 7: Add a cumulative line.
Step 8: Add title and Legends.
Step 9: Analyze the Chart.
Step 10: Interpret the results.
 Benefits of “Pareto chart”

-Solve work related Problem.

-Grasp the problem.
-Narrow problem area.
-To prioritize high impact issues – where to focus?
-Break big problems into smaller problems.
-Systematic analysis of causes based on magnitude.
-To confirm the improvement results.
5. Control chart: Control chart is also known as SPC chart or Shewhart
chart. It is a graphical representation of the collected information/data. And
helps to monitor the process centring or process behaviour against the
specified/set control limits. Control chart is a very powerful tool to
find/investigate the source of Process Variations present in the
manufacturing processes.

There are two types of control Charts :

1- Variables (Continues Value) Trial Control limits for Average Chart:
X -R chart (Average value and range) UCLx = X double bar + A2*R bar
LCLx = X double bar – A2*R bar
X (MR) chart (measured value)
Where A2 is constant varying as per sample sub-group size.
2- Attributes (Discrete Value)
pn-chart (Number of defective value)
p-chart (Fraction Defectives)
c-chart (Number of Defects)
u-chart (Number of defects per unit)

Trial Control limits for Range Chart:

UCLR = D4 * R bar
LCLR = D3 * R bar

Where D4 & D3 are constant varying

as per sample sub-group size.
 Steps for making Control Chart

Step-1- Fulfill precondition

Step-2- Complete preparatory steps
Step-3- Data/Information collection
Step-4- Making Trial Control limits
Step-5- Validation of trial control limits.
Step-6- Process Capability study i.e Cp (Process Capability, i.e. (UCL-
LCL)/6ϭ) & Cpk (Process Capability Index, i.e. (UCL-X double bar)/3ϭ
and (LCL-X double bar)/3ϭ) Study
Step-7- Ongoing process control
Step-8- Continual improvement
 Benefits of Control charts

• To predict process visually.

• Helps to identify Common and Special cause of variations.
• Provides indication for taking action.
6. Scatter Diagram: Scatter Diagram is also known as Correlation
Chart, Scatter Plot, Scatter Chart, and Scatter Graph. Scatter
Graph is used to find out the relationship between the two variables.
Independent variable data and dependent variable data are customarily
plotted along the horizontal X-axis and Vertical Y-axis respectively.
Independent variable is also called as controlled parameters. It shows a
Positive or Negative correlation between two variables. If the plotted points
are distributed from the lower-left corner to the upper right corner, then it is
a positive correlation. If the plotted points are distributed from upper left to
lower right, then it is a negative correlation.
7. Stratification: Stratification is a technique or method that can be
defined in many ways:
✓ A technique used to analyze and divide a universe of data into
homogeneous groups called -Strata.
✓ It involves observing data, splitting them into distinct classes or
categories to see a different process for better analysis.
✓ In Stratification, data recording/observation carried out from multiple
sources like shifts, machines, days, people, etc.
✓ It is a method to divide the data into sub-categories and obtain
meaningful information to solve a Quality problem.
✓ A statistical technique or system of formation of layers or classes or
categories to analyze the problem.
 When to use Stratification?
❑ When the data come from different sources or conditions, such as data
collected from different shifts, machines, people, days, suppliers and
population groups, etc.
❑ Used extensively to control and improve the process. Is the process
running OK and how long?