Operations Management Managing Quality Chapter 6 Power Point
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Operations Management Managing Quality Chapter 6 Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 1 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Outline ¨ Global Company Profile: Motorola ¨ Quality and Strategy ¨ Defining Quality ¨ ¨ ¨ Implications of Quality Malcolm Baldrige National Quality Award Cost of Quality ¨ ¨ ¨ Continuous Improvement Employee Empowerment Benchmarking Just-in-Time (JIT) Taguchi Concepts Knowledge of TQM Tools ¨ International Quality Standards ¨ Total Quality Management Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 2 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Outline ¨ Tools of TQM ¨ ¨ ¨ Check sheets Scatter Diagrams Cause-and-Effect Diagram Pareto Charts Process Charts Histogram ¨ ¨ When and where to Inspect Source Inspection Service Industry Inspection of Attributes vs Variables ¨ The Role of Inspection ¨ TQM in Services Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 3 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Learning Objectives When you complete this chapter, you should be able to : ¨ Identify or Define: Quality ¨ Malcolm Baldrige National Quality Award ¨ Demings, Juran, and Crosby ¨ Taguchi Concepts ¨ Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 4 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Learning Objectives continued When you complete this chapter, you should be able to : ¨ Explain: Why quality is important ¨ Total Quality Management (TQM) ¨ Pareto charts ¨ Process charts ¨ Quality robust products ¨ Inspection ¨ Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 5 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
To Make the Quality Focus Work Motorola: ¨ Aggressively began a worldwide education program to be sure that employees understood quality and statistical process control ¨ Established goals ¨ Established extensive employee participation and employee teams Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 6 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Ways in Which Quality Can Improve Productivity Sales Gains ¨ Improved Quality response ¨ Higher Prices ¨ Improved reputation Reduced Costs Increase d Profits ¨ Increased productivity ¨ Lower rework and scrap costs ¨ Lower warranty costs Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 7 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Flow of Activities Necessary to Achieve Total Quality Management ¨ Organizational Practices ¨ Quality Principles ¨ Employee Fulfillment ¨ Customer Satisfaction Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 8 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Organizational Practices ¨ Leadership ¨ Mission statement ¨ Effective operating procedure ¨ Staff support ¨ Training Yields: What is important and what is to be accomplished Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 9 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Quality Principles ¨ Customer focus ¨ Continuous improvement ¨ Employee empowerment ¨ Benchmarking ¨ Just-in-time ¨ Tools of TQM Yields: How to do what is important and to be accomplished Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 10 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Employment Fulfillment ¨ Empowerment ¨ Organizational commitment Yields: Employees’ attitudes that they can accomplish what is important and to be accomplished Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 11 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Customer Satisfaction ¨ Winning orders ¨ Repeat customers Yields: An effective organization with a competitive advantage Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 12 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Definitions of Quality ¨ ASC: Product characteristics & features that affect customer satisfaction ¨ User-Based: What consumer says it is ¨ Manufacturing-Based: Degree to which a product conforms to design specification ¨ Product-Based: Level of measurable 13 Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Dimensions of Quality for Goods ¨ Operation ¨ Reliability & durability ¨ Conformance ¨ Serviceability ¨ Appearance ¨ Perceived quality Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 14 Quality © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Service Quality Attributes Reliability Responsiveness Tangibles Competence Understanding Access Security Courtesy © 1995 Corel Corp. Credibility Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) Communication 15 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Importance of Quality ¨ Costs & market share ¨ Company’s reputation ¨ Product liability ¨ International implications Market Gains Reputation Volume Price Improved Quality Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) Increased Profits Lower Costs Productivity Rework/Scrap Warranty 16 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Malcom Baldrige National Quality Award ¨ Established in 1988 by the U. S. government ¨ Designed to promote TQM practices ¨ Some criteria Senior executive leadership; strategic planning; management. of process quality ¨ Quality results; customer satisfaction ¨ ¨ Recent winners ¨ Corning Inc. ; GTE; AT&T; Eastman 17 Chemical. Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Costs of Quality ¨ Prevention costs - reducing the potential for defects ¨ Appraisal costs - evaluating products ¨ Internal failure - of producing defective parts or service ¨ External costs - occur after delivery Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 18 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
EC Environmental Standard ISO 14000 Core Elements: ¨ Environmental management ¨ Auditing ¨ Performance evaluation ¨ Labeling ¨ Life-cycle assessment Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 19 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
International Quality Standards ¨ Industrial Standard Z 8101 -1981 (Japan) ¨ Specification for TQM ¨ ISO 9000 series (Europe/EC) ¨ Common quality standards for products sold in Europe (even if made in U. S. ) ¨ ISO 14000 series (Europe/EC) ¨ Standards for recycling, labeling etc. ¨ ASQC Q 90 series; MILSTD (U. S. ) Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 20 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Traditional Quality Process (Manufacturing) Customer Marketing Engineering Operations Specifies Need Interprets Need Designs Product Produces Product Defines Quality Plans Quality ! n s i e lity r driv a u Q me o t cus Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) Monitors Quality 21 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
TQM Encompasses entire organization, from supplier to customer Stresses a commitment by management to have a continuing company-wide drive toward excellence in all aspects of products and services that are important to the customer. Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 22 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Achieving Total Quality Management Customer Satisfaction Effective Business Attitudes (e. g. , Commitment) Employee Fulfillment How to Do Quality Principles What to Do Organizational Practices Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 23 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Deming’s Fourteen Points ¨ Create consistency of purpose ¨ Lead to promote change ¨ Build quality into the products ¨ Build long term relationships ¨ Continuously improve product, quality, and service ¨ Start training ¨ Emphasize leadership Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 24 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Deming’s Points - continued ¨ Drive out fear ¨ Break down barriers between departments ¨ Stop haranguing workers ¨ Support, help, improve ¨ Remove barriers to pride in work ¨ Institute a vigorous program of education and self-improvement ¨ Put everybody in the company to work on the transformation Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 25 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Concepts of TQM ¨ Continuous improvement ¨ Employee empowerment ¨ Benchmarking ¨ Just-in-time (JIT) ¨ Taguchi concepts ¨ Knowledge of tools Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 26 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Continuous Improvement ¨ Represents continual improvement of process & customer satisfaction ¨ Involves all operations & work units ¨ Other names Kaizen (Japanese) ¨ Zero-defects ¨ Six sigma ¨ © 1984 -1994 T/Maker Co. Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 27 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Shewhart’s PDCA Model 4. Ac 1. Plan Identify the Implemen t t the plan improvement and make a plan 3. Chec Is the k plan working Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 28 2. Do Test the plan © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Employee Empowerment ¨ Getting employees involved in product & process improvements ¨ 85% of quality problems are due to process & material ¨ Techniques © 1995 Corel Corp. Support workers ¨ Let workers make decisions ¨ Build teams & quality circles ¨ Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 29 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Quality Circles ¨ Group of 6 -12 employees from same work area ¨ Meet regularly to solve workrelated problems ¨ 4 hours/month ¨ Facilitator trains & helps with meetings Power. Point presentation to accompany Operations © 1995 Corel Corp. Management, 6 E (Heizer & Render) 30 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Benchmarking Selecting best practices to use as a standard for performance ¨ Determine what to benchmark ¨ Form a benchmark team ¨ Identify benchmarking partners ¨ Collect and analyze benchmarking information ¨ Take action to match or exceed the benchmark Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 31 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Resolving Customer Complaints Best Practices ¨ Make it easy for clients to complain ¨ Respond quickly to complaints ¨ Resolve complaints on the first contact ¨ Use computers to manage complaints ¨ Recruit the best for customer service jobs Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 32 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Just-in-Time (JIT) Relationship to quality: ¨ JIT cuts cost of quality ¨ JIT improves quality ¨ Better quality means less inventory and better, easier-to-employ JIT system Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 33 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Just-in-Time (JIT) ¨ ‘Pull’ system of production/purchasing ¨ Customer starts production with an order ¨ Involves ‘vendor partnership programs’ to improve quality of purchased items ¨ Reduces all inventory levels ¨ Inventory hides process & material problems ¨ Improves process 34 & product quality Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Just-In-Time (JIT) Example Work in process inventory level (hides problems) Unreliable Vendors Capacity Imbalances Scrap Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 35 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Just-In-Time (JIT) Example Reducing inventory reveals problems so they can be solved. Unreliable Vendors Capacity Imbalances Scrap Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 36 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Tools for TQM ¨ Quality Function Deployment ¨ House of Quality ¨ Taguchi technique ¨ Quality loss function ¨ Pareto charts ¨ Process charts ¨ Cause-and-effect diagrams ¨ Statistical process control Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 37 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Quality Function Deployment (QFD) ¨ Determines what will satisfy the customer ¨ Translates those customer desires into the target design Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 38 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Taguchi Techniques ¨ Experimental design methods to improve product & process design ¨ Identify key component & process variables affecting product variation ¨ Taguchi Concepts Quality robustness ¨ Quality loss function ¨ Target specifications ¨ Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 39 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Quality Robustness ¨ Ability to produce products uniformly regardless of manufacturing conditions ¨ Put robustness in House of Quality matrices besides functionality Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) © 1995 Corel Corp. © 1984 -1994 T/Maker Co. 40 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Quality Loss Function ¨ Shows social cost ($) of deviation from target value ¨ Assumptions ¨ Most measurable quality characteristics (e. g. , length, weight) have a target value ¨ Deviations from target value are undesirable ¨ Equation: L = D 2 C ¨L = Loss ($); D = Deviation; C = Cost Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 41 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Quality Loss Function Graph Loss = (Actual X - Target)2 • (Cost of Deviation) Greater deviation, more people are dissatisfied, higher cost Lower (upper) specification limit Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 42 Measurement © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Quality Loss Function Example The specifications for the diameter of a gear are 25. 00 ± 0. 25 mm. If the diameter is out of specification, the gear must be scrapped at a cost of $4. 00. What is the loss function? © 1984 -1994 T/Maker Co. Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 43 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Quality Loss Function Solution ¨ L = D 2 C = (X - Target)2 C ¨L = Loss ($); D = Deviation; C = Cost ¨ 4. 00 = (25. 25 - 25. 00)2 C ¨ Item scrapped if greater than 25. 25 (USL = 25. 00 + 0. 25) with a cost of $4. 00 ¨ C = 4. 00 / (25. 25 - 25. 00)2 = 64 ¨ L = D 2 • 64 = (X - 25. 00)264 ¨ Enter various X values to obtain L & plot Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 44 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Target Specification Example A study found U. S. consumers preferred Sony TV’s made in Japan to those made in the U. S. Both factories used the same designs & specifications. The difference in quality goals made the difference in consumer preferences. Japanese factory (Target-oriented) U. S. factory (Conformanceoriented) Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 45 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Quality Loss Function; Distribution of Products Produced Quality Loss Function (a) High loss Unacceptable Loss (to producing organization , customer, and society) Low loss Poor Fair Good Bes t Frequency Lower Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) Target Upper Specification 46 Target-oriented quality yields more product in the “best” category Target-oriented quality brings products toward the target value Conformanceoriented quality keeps product within three standardof deviations Distribution specifications for product produced (b) © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Tools of TQM ¨ Tools for generating ideas ¨ Check sheet ¨ Scatter diagram ¨ Cause and effect diagram ¨ Tools to organize data ¨ Pareto charts ¨ Process charts (Flow diagrams) ¨ Tools for identifying problems ¨ Histograms ¨ Statistical process control chart Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 47 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Pareto Analysis of Wine Glass Defects (Total Defects = 75) 72% 16% Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 5% 4% 48 3% © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Process Chart ¨ Shows sequence of events in process ¨ Depicts activity relationships ¨ Has many uses ¨ Identify data collection points ¨ Find problem sources ¨ Identify places for improvement ¨ Identify where travel distances can be reduced Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 49 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Process Chart Example SUBJECT: Request tool purchase Dist (ft) Time (min) Symbol Description lðo D Ñ Write order wÑ On desk ¡ èo. D Ñ To buyer ¡ð o 75 ¡ð n D Ñ Examine ¡= Operation; ð= Transport; o = Inspect; D = Delay; Ñ = Storage Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 50 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Cause and Effect Diagram ¨ Used to find problem sources/solutions ¨ Other names ¨ Fish-bone diagram, Ishikawa diagram ¨ Steps ¨ Identify problem to correct ¨ Draw main causes for problem as ‘bones’ ¨ Ask ‘What could have caused problems in these areas? ’ Repeat for each sub-area. Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 51 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Cause and Effect Diagram Example Problem Too many defects Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 52 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Cause and Effect Diagram Example Method Manpower Main Cause Too many defects Material Machinery Main Cause Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 53 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Cause and Effect Diagram Example Method Manpower Drill Over Time Too many defects Wood Steel Material Lathe Machinery Sub-Cause Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 54 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Cause and Effect Diagram Example Method Manpower Tired Drill Over Time Slow Old Wood Steel Material Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) Too many defects Lathe Machinery 55 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Fishbone Chart - Problems with Airline Customer Service Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 56 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Statistical Process Control (SPC) ¨ Uses statistics & control charts to tell when to adjust process ¨ Developed by Shewhart in 1920’s ¨ Involves ¨ Creating standards (upper & lower limits) ¨ Measuring sample output (e. g. mean wgt. ) ¨ Taking corrective action (if necessary) ¨ Done while product is being produced Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 57 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Statistical Process Control Steps Start Produce Good Provide Service Take Sample No Assign. Causes? Yes Inspect Sample Stop Process Create Control Chart Find Out Why Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 58 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Process Control Chart Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 59 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Patterns to Look for in Control Charts Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 60 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
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 ¨ Issues ¨ When to inspect ¨ Where in process to inspect Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 61 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
When and Where to Inspect ¨ At the supplier’s plant while the supplier is producing ¨ At your facility upon receipt of goods from the supplier ¨ Before costly or irreversible processes ¨ During the step-by-step production processes ¨ When production or service is complete ¨ Before delivery from your facility ¨ At the point of customer contact Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 62 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Inspection Points in Services Organization Some Points of Inspection Bank Teller stations Loan accounts Checking accounts Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) Issues to Consider Shortages, courtesy, speed, accuracy Collateral, proper credit checks, rates, terms of loans, default rates, loan rates Accuracy, speed of entry, rate of overdraws 63 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Inspection Points in Services Organization Some Points of Inspection Retail store Stockrooms Display areas Issues to Consider Clean, uncluttered, organized, level of stockouts, amply supply, rotation of goods Attractive, well-organized, stocked, visible goods, good lighting Neat, courteous Sales counters knowledgeable personnel; waiting time; accuracy in credit checking and sales © 2001 by Prentice Hall, Inc. , Upper Saddle River, Power. Point presentation to accompany Operations 64 entry N. J. 07458 Management, 6 E (Heizer & Render)
Inspection Points in Services Issues to Consider Organization Some Points of Inspection Restaurant Kitchen Cashier station Dining areas Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 65 Clean, proper storage, unadulterated food, health regulations observed, wellorganized Speed, accuracy, appearance Clean, comfortable, regular monitoring by personnel, © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
TQM In Services ¨ Service quality is more difficult to measure than for goods ¨ Service quality perceptions depend on ¨ Expectations versus reality ¨ Process and outcome ¨ Types of service quality ¨ Normal: Routine service delivery ¨ Exceptional: How problems are handled Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 66 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Goods versus Services Good Service ¨ Can be resold ¨ Can be inventoried ¨ Reselling unusual ¨ Difficult to inventory ¨ Quality difficult to measure ¨ Selling is part of service ¨ Some aspects of quality measurable ¨ Selling is distinct from Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) 67 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Goods versus Services continued Good Service ¨ Product is ¨ Provider, not transportable product is transportable ¨ Site of facility important for cost ¨ Site of facility important for customer contact ¨ Often easy to ¨ Often difficult to automate ¨ Revenue generated ¨ Revenue primarily from generated tangible product 68 primarily from intangible service. Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
Service Quality Attributes Reliability Responsiveness Tangibles Competence Understanding Access Security Courtesy © 1995 Corel Corp. Credibility Power. Point presentation to accompany Operations Management, 6 E (Heizer & Render) Communication 69 © 2001 by Prentice Hall, Inc. , Upper Saddle River, N. J. 07458
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