case study for operations managment class

you need to read and go over the Chapter 6 presentation and work on the Culture of Quality at Arnold Palmer Hospital Case Study on page 240. You need to complete all 4 discussion questions with documentation and fully explain the answersI iploaded the chapter powerpoints, and the questions.
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Managing Quality
6
PowerPoint presentation to accompany
Heizer, Render, Munson
Operations Management, Twelfth Edition
Principles of Operations Management, Tenth Edition
PowerPoint slides by Jeff Heyl
Copyright © 2017 Pearson Education, Inc.
6-1
Outline
?
Global Company Profile:
Arnold Palmer Hospital
?
Quality and Strategy
Defining Quality
Total Quality Management
Tools of TQM
The Role of Inspection
TQM in Services
?
?
?
?
?
Copyright © 2017 Pearson Education, Inc.
6-2
Managing Quality Provides a
Competitive Advantage
Arnold Palmer Hospital
?
Delivers over 12,000 babies annually
?
Virtually every type of quality tool is
employed
?
Continuous improvement
?
Employee empowerment
?
Benchmarking
?
Just-in-time
?
Quality tools
Copyright © 2017 Pearson Education, Inc.
6-3
Learning Objectives
When you complete this chapter you
should be able to:
6.1 Define quality and TQM
6.2 Describe the ISO international quality
standards
6.3 Explain Six Sigma
6.4 Explain how benchmarking is used in TQM
6.5 Explain quality robust products and
Taguchi concepts
6.6 Use the seven tools of TQM
Copyright © 2017 Pearson Education, Inc.
6-4
Quality and Strategy
?
Managing quality supports
differentiation, low cost, and
response strategies
?
Quality helps firms increase sales
and reduce costs
?
Building a quality organization is a
demanding task
Copyright © 2017 Pearson Education, Inc.
6-5
Two Ways Quality
Improves Profitability
Figure 6.1
Sales Gains via
• Improved response
• Flexible pricing
• Improved reputation
Improved
Quality
Reduced Costs via
Increased
Profits
• Increased productivity
• Lower rework and scrap costs
• Lower warranty costs
Copyright © 2017 Pearson Education, Inc.
6-6
The Flow of Activities
Organizational Practices
Leadership, Mission statement, Effective operating
procedures, Staff support, Training
Yields: What is important and what is to be
accomplished
Quality Principles
Customer focus, Continuous improvement, Benchmarking,
Just-in-time, Tools of TQM
Yields: How to do what is important and to be
accomplished
Employee Fulfillment
Empowerment, Organizational commitment
Yields: Employee attitudes that can accomplish
what is important
Figure 6.2
Copyright © 2017 Pearson Education, Inc.
Customer Satisfaction
Winning orders, Repeat customers
Yields: An effective organization with
a competitive advantage
6-7
Defining Quality
An operations manager’s objective
is to build a total quality
management system that identifies
and satisfies customer needs
Copyright © 2017 Pearson Education, Inc.
6-8
Defining Quality
The totality of features and
characteristics of a product or service
that bears on its ability to satisfy stated
or implied needs
American Society for Quality
Copyright © 2017 Pearson Education, Inc.
6-9
Different Views
?
?
?
User based: better performance,
more features
Manufacturing based: conformance
to standards, making it right the first
time
Product based: specific and
measurable attributes of the product
Copyright © 2017 Pearson Education, Inc.
6 – 10
Implications of Quality
1. Company reputation
?
Perception of new products
?
Employment practices
?
Supplier relations
2. Product liability
?
Reduce risk
3. Global implications
?
Improved ability to compete
Copyright © 2017 Pearson Education, Inc.
6 – 11
Malcolm Baldrige National
Quality Award
?
Established in 1988 by the U.S.
government
?
Designed to promote TQM practices
?
Recent winners include
MidwayUSA, Charter School of San Diego, MidAmerica Transplant Services, Hill Country Memorial,
PricewaterhouseCoopers Public Sector Practice,
Elevations Credit Union, Lockheed Martin Missiles
and Fire Control, MESA Products Inc.
Copyright © 2017 Pearson Education, Inc.
6 – 12
Baldrige Criteria
Applicants are evaluated on:
CATEGORIES
POINTS
Leadership
120
Strategic Planning
85
Customer Focus
85
Measurement, Analysis, and Knowledge
Management
90
Workforce Focus
85
Operations Focus
85
Results
450
Copyright © 2017 Pearson Education, Inc.
6 – 13
ISO 9000 International Quality
Standards
?
International recognition
?
Encourages quality management
procedures, detailed documentation, work
instructions, and recordkeeping
?
2015 revision gives greater emphasis to
risk-based thinking
?
Over one million certifications in 206
countries
?
Critical for global business
Copyright © 2017 Pearson Education, Inc.
6 – 14
ISO 9000 International Quality
Standards
?
Management principles
1)
2)
3)
4)
5)
6)
7)
8)
Top management leadership
Customer satisfaction
Continual improvement
Involvement of people
Process analysis
Use of data-driven decision making
A systems approach to management
Mutually beneficial supplier relationships
Copyright © 2017 Pearson Education, Inc.
6 – 15
Costs of Quality
?
Prevention costs – reducing the
potential for defects
?
Appraisal costs – evaluating products,
parts, and services
?
Internal failure costs – producing
defective parts or service before
delivery
?
External failure costs – defects
discovered after delivery
Copyright © 2017 Pearson Education, Inc.
6 – 16
Costs of Quality
Total
Cost
Total Cost
External Failure
Internal Failure
Prevention
Appraisal
Quality Improvement
Copyright © 2017 Pearson Education, Inc.
6 – 17
Takumi
A Japanese character
that symbolizes a
broader dimension than
quality, a deeper process
than education, and a
more perfect method
than persistence
Copyright © 2017 Pearson Education, Inc.
6 – 18
Leaders in Quality
TABLE 6.1
Leaders in the Field of Quality Management
LEADER
PHILOSOPHY/CONTRIBUTION
W. Edwards Deming
Deming insisted management accept responsibility for building
good systems. The employee cannot produce products that on
average exceed the quality of what the process is capable of
producing. His 14 points for implementing quality improvement
are presented in this chapter.
Joseph M. Juran
A pioneer in teaching the Japanese how to improve quality,
Juran believed strongly in top-management commitment,
support, and involvement in the quality effort. He was also a
believer in teams that continually seek to raise quality standards.
Juran varies from Deming somewhat in focusing on the
customer and defining quality as fitness for use, not necessarily
the written specifications.
Copyright © 2017 Pearson Education, Inc.
6 – 19
Leaders in Quality
TABLE 6.1
Leaders in the Field of Quality Management
LEADER
PHILOSOPHY/CONTRIBUTION
Armand Feigenbaum
His 1961 book Total Quality Control laid out 40 steps to quality
improvement processes. He viewed quality not as a set of tools
but as a total field that integrated the processes of a company.
His work in how people learn from each other’s successes led to
the field of cross-functional teamwork.
Philip B. Crosby
Quality Is Free was Crosby’s attention-getting book published in
1979. Crosby believed that in the traditional trade-off between
the cost of improving quality and the cost of poor quality, the cost
of poor quality is understated. The cost of poor quality should
include all of the things that are involved in not doing the job right
the first time. Crosby coined the term zero defects and stated,
“There is absolutely no reason for having errors or defects in any
product or service.”
Copyright © 2017 Pearson Education, Inc.
6 – 20
Ethics and Quality
Management
?
Operations managers must deliver
healthy, safe, quality products and
services
?
Poor quality risks injuries, lawsuits,
recalls, and regulation
?
Ethical conduct must dictate response
to problems
?
All stakeholders must be considered
Copyright © 2017 Pearson Education, Inc.
6 – 21
Total Quality Management
?
?
Encompasses entire organization from
supplier to customer
Stresses a commitment by
management to have a continuing
companywide drive toward excellence
in all aspects of products and services
that are important to the customer
Copyright © 2017 Pearson Education, Inc.
6 – 22
Deming’s Fourteen Points
TABLE 6.2
Deming’s 14 Points for Implementing Quality Improvement
1. Create consistency of purpose
2. Lead to promote change
3. Build quality into the product; stop depending on inspections to catch
problems
4. Build long-term relationships based on performance instead of
awarding business on price
5. Continuously improve product, quality, and service
6. Start training
7. Emphasize leadership
Copyright © 2017 Pearson Education, Inc.
6 – 23
Deming’s Fourteen Points
TABLE 6.2
Deming’s 14 Points for Implementing Quality Improvement
8. Drive out fear
9. Break down barriers between departments
10. Stop haranguing workers
11. Support, help, and improve
12. Remove barriers to pride in work
13. Institute a vigorous program of education and self-improvement
14. Put everyone in the company to work on the transformation
Copyright © 2017 Pearson Education, Inc.
6 – 24
Seven Concepts of TQM
1)
2)
3)
4)
5)
6)
7)
Continuous improvement
Six Sigma
Employee empowerment
Benchmarking
Just-in-time (JIT)
Taguchi concepts
Knowledge of TQM tools
Copyright © 2017 Pearson Education, Inc.
6 – 25
Continuous Improvement
?
Never-ending process of continuous
improvement
?
Covers people, equipment, suppliers,
materials, procedures
?
Every operation can be improved
Copyright © 2017 Pearson Education, Inc.
6 – 26
Shewhart’s PDCA Model
Figure 6.3
4. Act
Implement
the plan,
document
3. Check
Is the plan
working?
Copyright © 2017 Pearson Education, Inc.
1. Plan
Identify the
pattern and
make a plan
2. Do
Test the
plan
6 – 27
Continuous Improvement
?
Kaizen describes the ongoing process
of unending improvement
?
TQM and zero defects also used to
describe continuous improvement
Copyright © 2017 Pearson Education, Inc.
6 – 28
Six Sigma
?
?
Two meanings
?
Statistical definition of a process that is
99.9997% capable, 3.4 defects per
million opportunities (DPMO)
?
A program designed to reduce defects,
lower costs, save time, and improve
customer satisfaction
A comprehensive system for achieving
and sustaining business success
Copyright © 2017 Pearson Education, Inc.
6 – 29
Six Sigma
?
Lower limits
Two meanings
Upper limits
2,700 defects/million
Statistical definition of a process that is
99.9997% capable, 3.4 defects per
3.4 defects/million
million opportunities (DPMO)
?
?
?
A program designed to reduce defects,
lower costs, save time, and improve
customer satisfaction Mean
±3?
A comprehensive system
for achieving
?
and sustaining business±6success
Figure 6.4
Copyright © 2017 Pearson Education, Inc.
6 – 30
Six Sigma Program
?
?
Originally developed by Motorola,
adopted and enhanced by Honeywell
and GE
Highly structured approach to process
improvement
?
A strategy
?
A discipline – DMAIC
?
A set of 7 tools
Copyright © 2017 Pearson Education, Inc.
6?
6 – 31
Six Sigma
1. Defines the project’s purpose, scope, and outputs,
then identifies the required process information
keeping in mind the customer’s definition of quality
2. Measures the process and collects data
3. Analyzes the data ensuring
repeatability and reproducibility
DMAIC Approach
4. Improves by modifying or
redesigning existing
processes and procedures
5. Controls the new process
to make sure performance
levels are maintained
Copyright © 2017 Pearson Education, Inc.
6 – 32
Implementing Six Sigma
?
Emphasize defects per million opportunities
as a standard metric
?
Provide extensive training
?
Focus on top management leadership
(Champion)
?
Create qualified process improvement
experts (Black Belts, Green Belts, etc.)
?
Set stretch objectives
Copyright © 2017 Pearson Education, Inc.
6 – 33
Implementing Six Sigma
?
Emphasize defects per million opportunities
as a standard metric
?
Provide extensive training
?
Focus on top management leadership
(Champion)
?
Create qualified process improvement
experts (Black Belts, Green Belts, etc.)
This cannot be accomplished without a
Set stretch
objectives
major
commitment from top level
management
?
Copyright © 2017 Pearson Education, Inc.
6 – 34
Employee Empowerment
?
Getting employees involved in product and
process improvements
?
?
85% of quality problems are due
to materials and process
Techniques
1) Build communication networks
that include employees
2) Develop open, supportive supervisors
3) Move responsibility to employees
4) Build a high-morale organization
5) Create formal team structures
Copyright © 2017 Pearson Education, Inc.
6 – 35
Quality Circles
?
Group of employees who meet
regularly to solve problems
?
Trained in planning, problem
solving, and statistical methods
?
Often led by a facilitator
?
Very effective when done properly
Copyright © 2017 Pearson Education, Inc.
6 – 36
Benchmarking
Selecting best practices to use as a
standard for performance
1. Determine what to benchmark
2. Form a benchmark team
3. Identify benchmarking partners
4. Collect and analyze benchmarking
information
5. Take action to match or exceed the
benchmark
Copyright © 2017 Pearson Education, Inc.
6 – 37
Best Practices for Resolving
Customer Complaints
Table 6.3
BEST PRACTICE
JUSTIFICATION
Make it easy for clients to complain
It is free market research
Respond quickly to complaints
It adds customers and loyalty
Resolve complaints on first contact
It reduces cost
Use computers to manage complaints
Discover trends, share them, and align
your services
Recruit the best for customer service
jobs
It should be part of formal training and
career advancement
Copyright © 2017 Pearson Education, Inc.
6 – 38
Internal Benchmarking
?When the organization is large enough
?Data more accessible
?Can and should be established in a
variety of areas
Copyright © 2017 Pearson Education, Inc.
6 – 39
Just-in-Time (JIT)
?
‘Pull’ system of production scheduling
including supply management
?
?
Allows reduced inventory levels
?
?
Production only when signaled
Inventory costs money and hides
process and material problems
Encourages improved process and
product quality
Copyright © 2017 Pearson Education, Inc.
6 – 40
Just-in-Time (JIT)
Relationship to quality:
?
?
?
JIT cuts the cost of quality
JIT improves quality
Better quality means less
inventory and better, easier-toemploy JIT system
Copyright © 2017 Pearson Education, Inc.
6 – 41
Taguchi Concepts
?
Engineering and experimental design
methods to improve product and
process design
?
?
Identify key component and process
variables affecting product variation
Taguchi Concepts
?
Quality robustness
?
Target-oriented quality
?
Quality loss function
Copyright © 2017 Pearson Education, Inc.
6 – 42
Quality Robustness
?
Ability to produce products uniformly
in adverse manufacturing and
environmental conditions
?
Remove the effects of adverse
conditions
?
Small variations in materials and
process do not destroy product quality
Copyright © 2017 Pearson Education, Inc.
6 – 43
Quality Loss Function
?
?
?
Shows that costs increase as the
product moves away from what the
customer wants
Costs include customer
dissatisfaction, warranty
and service, internal
scrap and repair, and costs to
society
Traditional conformance
specifications are too simplistic
Copyright © 2017 Pearson Education, Inc.
6 – 44
Quality Loss Function
High loss
Unacceptable
Loss (to
producing
organization,
customer,
and society)
Poor
Fair
Target-oriented quality
yields more product in
the “best” category
Good
Best
Low loss
Target-oriented quality
brings product toward
the target value
Frequency
Conformance-oriented
quality keeps products
within 3 standard
deviations
Lower
Target
Upper
Specification
Copyright © 2017 Pearson Education, Inc.
Figure 6.5
6 – 45
TQM Tools
?
?
Tools for Generating Ideas
?
Check Sheet
?
Scatter Diagram
?
Cause-and-Effect Diagram
Tools to Organize the Data
?
Pareto Chart
?
Flowchart (Process Diagram)
Copyright © 2017 Pearson Education, Inc.
6 – 46
TQM Tools
?
Tools for Identifying Problems
?
Histogram
?
Statistical Process Control Chart
Copyright © 2017 Pearson Education, Inc.
6 – 47
Seven Tools of TQM
(a) Check Sheet: An organized
method of recording data
Hour
Defect
1
2
A
///
/
B
//
/
C
/
//
3
/
4
5
6
7
8
/
/
/
///
/
//
///
//
////
/
Figure 6.6
Copyright © 2017 Pearson Education, Inc.
6 – 48
Seven Tools of TQM
Productivity
(b) Scatter Diagram: A graph of the
value of one variable vs. another
variable
Absenteeism
Figure 6.6
Copyright © 2017 Pearson Education, Inc.
6 – 49
Seven Tools of TQM
(c) Cause-and-Effect Diagram: A tool
that identifies process elements
(causes) that may effect an outcome
Cause
Materials
Methods
Effect
Manpower
Copyright © 2017 Pearson Education, Inc.
Machinery
Figure 6.6
6 – 50
Seven Tools of TQM
Percent
Frequency
(d) Pareto Chart: A graph to identify and
plot problems or defects in descending
order of frequency
A
B
Copyright © 2017 Pearson Education, Inc.
C
D
E
Figure 6.6
6 – 51
Seven Tools of TQM
(e) Flowchart (Process Diagram): A chart
that describes the steps in a process
Figure 6.6
Copyright © 2017 Pearson Education, Inc.
6 – 52
Seven Tools of TQM
(f) Histogram: A distribution showing the
frequency of occurrences of a variable
Frequency
Distribution
Repair time (minutes)
Copyright © 2017 Pearson Education, Inc.
Figure 6.6
6 – 53
Seven Tools of TQM
(g) Statistical Process Control Chart: A chart
with time on the horizontal axis to plot
values of a statistic
Upper control limit
Target value
Lower control limit
Time
Figure 6.6
Copyright © 2017 Pearson Education, Inc.
6 – 54
Cause-and-Effect Diagrams
Method
(shooting process)
Material
(ball)
Grain/Feel
(grip)
Aiming point
Size of ball
Bend knees
Air pressure
Hand position
Lopsidedness
Follow-through
Training
Conditioning
Consistency
Motivation
Concentration
Copyright © 2017 Pearson Education, Inc.
Missed
free-throws
Rim size
Rim alignment
Manpower
(shooter)
Balance
Machine
(hoop &
backboard)
Rim height
Backboard
stability
Figure 6.7
6 – 55
Pareto Charts
Data for October
– 100
70 –
54
– 72
50 –
40 –
Number of
occurrences
30 –
20 –
12
10 –
4
3
2
Pool hours
5%
Minibar
4%
Misc.
3%
0 –
Room svc
72%
Check-in
16%
Cumulative percent
Frequency (number)
60 –
– 93
– 88
Causes and percent of the total
Copyright © 2017 Pearson Education, Inc.
6 – 56
Flow Charts
MRI Flowchart
1.
2.
3.
4.
5.
6.
Physician schedules MRI
Patient taken to MRI
Patient signs in
Patient is prepped
Technician carries out MRI
Technician inspects film
7.
8.
9.
10.
If unsatisfactory, repeat
Patient taken back to room
MRI read by radiologist
MRI report transferred to
physician
11. Patient and physician
discuss
8
1
2
3
4
5
6
7
80%
11
9
10
20%
Copyright © 2017 Pearson Education, Inc.
6 – 57
Statistical Process Control
(SPC)
?
Uses statistics and control charts to tell
when to take corrective action
?
Drives process improvement
?
Four key steps
?
Measure the process
?
When a change is indicated, find the
assignable cause
?
Eliminate or incorporate the cause
?
Restart the revised process
Copyright © 2017 Pearson Education, Inc.
6 – 58
Control Charts
Plot the percent of free throws missed
40%
Upper
control limit
20%
Coach’s
target
value
0%
|
1
|
2
|
3
|
4
|
5
|
6
|
7
|
8
|
9
Lower
control
limit
Game number
Figure 6.8
Copyright © 2017 Pearson Education, Inc.
6 – 59
Inspection
?
?
?
Involves examining items to see if an
item is good or defective
Detect a defective product
?
Does not correct deficiencies in
process or product
?
It is expensive …
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