ExHam 1 Managing for Quality and Performance Excellence ALL SOLUTION 100% CORRECT LATEST UPDATE GUARANTEED GRADE A+

History of Quality Management Late 20th Century - U.S. and European firms begin to implement Quality Management programs (1980's) - U.S. establishes the Malcolm Baldridge National Quality Award (1987) - Professional societies and publications grow at a staggering rate - Quality entered the service arena - Womak writes "The Machine that Changed the World" and coined the term "lean" - Motorola introduces Six Sigma / DMAIC (1990) - General Electric widely applies Six Sigma (1995) - Lean Six Sigma is introduced (2000) service is defined as "any primary or complementary activity that does not directly produce a physical product - that is, the non-goods part of the transaction between buyer (customer) and seller (provider)." Manufacturing perspective conformance to specification The manufacturing perspective is responsible for guaranteeing that design speculations are met doing production customer perspective meeting or exceeding customer expectations The differences between services and manufacturing require different approaches in designing and implementing quality assurance activities Manufacturing Quality can be assessed against firm design specifications, but service quality can only be assessed against customers subjective expectations and past experiences. Service vs Manufacturing Services are produced and consumed simultaneously, whereas manufactured goods are produced prior to consumption. In addition, many services must be performed at the convenience of the customer . Therefore services cannot be stored, inventoried, or inspected prior to delivery as manufactured goods • Services are generally labor intensive, whereas manufacturing is more capital intensive The Deming Philosophy focuses on continuous improvement in product and service quality by reducing uncertainty and variability in design, manufacturing, and service processes, driven by the leadership of top management. Deming Chain Reaction 1. Improve Quality 2. Costs decrease because of less rework, fewer mistakes, fewer delays and snags, and better use of time and materials 3. Productivity improves 4. Capture the market with better quality and lower price 5. Stay in business 6. Provide jobs and more jobs Deming 14 Points of Management Deming turned the 14 Points into the System of Profound knowledge which consisted of 4 simple elements. 1. Appreciation for a system 2. Understanding variation 3. Theory of knowledge 4. Psychology System of Profound Knowledge This outlines Dr. W. Edwards Deming's philosophy based on the view that all elements of an organization should work in concert together as an interdependent system. The four elements lay out a framework for managers to reduce costs while increasing quality, customer loyalty, worker satisfaction and, ultimately, profitability. Below are the four key parts: 1. Appreciation for a System 2. Knowledge of Variation 3. Theory of Knowledge 4. Psychology of Change Deming PDCA Cycle Plan, Do, Check, Act Crosby -quality is free -zero defects -focus on incremental change approach to quality was primarily behavioral and emphasize management and organizational process to change corporate culture and attitudes rather than statistical techniques and improvement methodologies A.V. Feigenbaum o Three Steps to Quality: Quality leadership Modern Quality Technology Organizational commitment Kaoru Ishikawa Cause-and-effect diagram Quality circles Recognized the internal customer Identifying customers o The first step in being customer focused is to understand who your customers are. o Suppliers are always customers. o Consumers, the end user who ultimately purchases and uses a company's product is not the only form of a customer internal costumers individuals and units within the firm that receive services from other individuals or units Ex: manufacturing is a customer of purchasing, nursing is the customer of a hospital customer satisfaction is "the result of delivering a product or service that meets customer requirements." external costumers those who fall between the organization and the consumer but are not part of the organization. Business to business. Ex- Manufacturer of products that distribute to retail store such as Walmart. Walmart is the external customer. external costumers dealers, who buy products to sell to others, and ultimate customers, who buy products for their own personal use "traditional costumer" SIPOC oSupplier: person/organization that provides input to a process oInput: resource that is added to a process by a supplier oProcess: series of steps where an input converts to an output Output: Resource that is a result of the process Customer: Person/organization that receives the product or service The SIPOC is often presented at the outset of process improvement efforts such as Kaizen events or during the "define" phase of the DMAIC process.[3] It has three typical uses depending on the audience: voice-of-customer (VOC) program an ongoing marketing research system that collects customer inputs and integrates them into managerial decisions o Organizations use a variety of methods customer requirements, as expressed in the customers own terms. or listening posts to collect information about customers needs and expectations, their importance, and customer satisfaction with the company's performance. The Net Promotor Score measures: o Based on: what is the likelihood that you would recommend us? o Scale of 0 - 10 • Detractors (6 or below): unhappy customers who may spread negative comments. More price sensitive, defect at higher rates and consequently are less profitable. • Passive (7 to 8): associated with customer who are satisfied but may switch to competitors • Promoters (9 to 10): associated with loyal customers who will typically be repeat customers. Promoters are less price sensitive and more profitable. • Passive customers DO NOT COUNT • Range is -100 to 100. Anything over 50 is good • To get calculate: First add up all detractors. Passive, and promoters (gives you n) Divide detractor amount by total amount Divide promoter amount by total amount Subtract the two percentage to get NPS (promoter - detractor) Reactive • Customer complaints, technical support calls, customer service calls, product returns, sales reporting, warranty claims, web page activity • Implementing Reactive: Carefully define customers to interview Use a standard introduction/ establish context Proactive Seeking to solve a problem before it occurs •Interviews, focus groups, surveys, comment cards, sales visits, market research/monitoring, benchmarking Kano Model A technique that categorizes customer requirements into three types: 1. Delighters 2. Satisfiers 3. Dissatisfiers. Kano Model of Customer Needs o Dissatisfiers (must haves): Basic requirements that customers expect in a product or service. In an automobile, a radio, a heater, and basic safety features are examples, which are generally not sated by customers but assumed as given. If these features are not present, the customer is dissatisfied. o Satisfiers (wants): Requirements that customers expressly say they want. Many car buyers want a sunroof, satellite radio, or navigation system. Although these requirements are generally not expected, fulfilling them creates satisfaction. o Exciters/delighters (never thought of): new or innovative features that customers do not expect or even anticipate, such as separate rear seat video controls but love once they have them. o Providing dissatisfiers and satisfiers is often considered the minimum to stay in business. o Innovations are not exciters/delighters for long. As customers become familiar with them, exciters/delighters become satisfiers over time. workforce everyone who is actively involved in accomplishing the work of an organization (paid employees, volunteers and contract employees, team leaders, supervisors and managers at all levels *Evolution of Workforce Management Taylor system and scientific management -improved productivity -changed manufacturing work into series of mundane and mindless tasks -promulgated adversarial relationships between labor and management -failed to exploit the knowledge and creativity of the workforce Taylor system and scientific management factory managed on scientific basis, improved productivity, manufacturing works became mundane and mindless tasks, adversarial relationship between management and labour, failed to exploit execution from planning Non-Value Added a processing step that does not enhance the product Activities that must be maintained to support other value added activities. Essential but no value added. Minimize 90% waste Activities that consume time, resources, or space and provide no value to the customer. downtime. eliminate. o defects/errors, overproduction, waiting/delays, not utilizing employees, transportation/movement of people or material, too much inventory, motion (unnecessary movements by people), extra processing/over complicating Value added o 10% o Value added: The customer is willing to pay for this activity because it provides value. Activities that transform resources into products, services, or information Time spent or activities that contribute directly to the satisfaction of the customer requirement. Optimize Value Creation Process Focused on producing or delivering an organization's primary goods or services, such as filling and shipping a customer's order, assembling a dishwasher, or providing a home mortgage. Value Creation Process sometimes called core processes . The most important to running a business and maintaining or achieving a sustainable competitive advantage. Frequently align closely to an organization's core competencies and strategic objectives. Product Design Process 1. idea development 2. product screening 3. preliminary design and testing 4. final design involve all activities that are performed to incorporate customer requirements, new technology, and organizational knowledge into the functional specifications of a manufactured good or service Production delivery processes create or deliver the actual product; example are manufacturing, assembly, teaching a class. Flowchart A diagram that shows step-by-step progression through a procedure or system especially using connecting lines and a set of conventional symbols. American Customer Satisfaction Index (ACSI) is a national measure of customer satisfaction, linking expectations, perceived quality, and perceived value to customer satisfaction, which in turn is linked to customer loyalty and profitability. The econometric model used to produce ACSI links customer Customer Engagement customers' investment in or commitment to a brand and product offerings service quality Service quality dimensions are reliability, assurance, tangibles, empathy, and responsiveness Product quality dimensions include performance, features, reliability, conformance, durability, serviceability, and aesthetics VOC Customer requirements, as expressed in the customer's own terms Gathering the voice of the customer is accomplished by various methods, or "listening posts," including comment cards and formal surveys, focus groups, direct customer contact, field intelligence, complaint analysis, and Internet and social media monitoring. Affinity diagrams are helpful tools for classifying customer requirements. VOC GAP model The linkage of the VOC to internal processes is often described by the gap model . Customers form perceptions (perceived quality) of the quality of goods and services by comparing their expectations (expected quality) with outcomes they receive (actual quality). Differences between these can result in unexpected satisfaction dissatisfaction customer relationship management (CRM) software, which typically includes market segmentation and analysis, customer service and relationship building, effective complaint resolution, cross-selling goods and services, order processing, and field service, and is focused on increasing customer loyalty, targeting the most profitable customers, and streamlining customer communication processes. Normal distribution o The probability density function of the normal is represented graphically by the familiar bell curve. Data is often assumed to be normally distributed to simplify certain calculations. o If a random variable has a mean of 0 and standard deviation of 1, it is called a normal standard deviation. Letter z is used to represent this variable. A Three Sigma program has how many defects per million? o is a statistical calculation that refers to data within three standard deviations from a mean. In business applications, three-sigma refers to processes that operate efficiently and produce items of the highest quality. o Three-sigma limits are used to set the upper and lower control CONTINUED...