LESSON 9 - BUSINESS BASICS PART II - OPERATIONS MANAGEMENT, CUSTOMER SERVICE, IS & HR
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Quality Management is a method for ensuring that all the activities necessary to design, develop and implement a product or service are effective and efficient. All to often, quality is viewed as simplistic with the simple attitude of putting some quality standards in place and assign people to make sure they’re observed. This is the wrong attitude, as quality, in any aspect of business, should be considered critically important. The attitude within the entire company should be that of accepting nothing but superior quality. Customer loyalty and superior quality go hand-in-hand. Loyalty is a direct result of customer satisfaction. Value is created for the customer, which also results in employee satisfaction. Customers will be less price sensitive and are more likely to recommend your company’s products or services. Most of all, with customer loyalty due to superior quality comes higher profit and growth for the company.
Quality management can be considered to have three main components:
Quality control - also known as QC and IQC (incoming quality control) which is designed to meet or exceed customer requirements. An example would be a goal of no more than a 2% failure rate, based on random inspection, on the cosmetic look of a phone. The goal is to find ways to lower that percentage without increasing costs.
Quality assurance - also known as QA, which refers to planned and systematic production and testing processes to ensure proper performance of the product, to minimize defects, and ensure a high degree of quality. An example of a QA goal based on a software release would be a less than 2% trouble ticket rate based on a bug associated with the release.
Quality improvement - there are many methods and organizations for quality improvement. The bottom line is that they all strive for continuous quality improvement. Three basic rules for managing quality are:
Upper management must be completely involved and committed to excellence, not just supporting it. They should be willing to allow for independent assessment, accept the findings, and act on them.
The quality focus must be incorporated throughout the entire company, not just a group or two.
Quality improvement must be measured both on quality specific terms and the impact it has towards business goals.
Here are six of the most common quality methods and organizations used towards quality improvement:
Six Sigma - identifies and removes the causes of defects and errors in manufacturing and business processes. It uses a set of quality management methods, including statistical methods, and creates a special infrastructure of people within the organization who are experts in these methods. These experts are considered Green Belts & Black Belts. Six Sigma has two key methods:
DMAIC - which is used to improve an existing business process:
Define process improvement goals that are consistent with customer demands and the enterprise strategy.
Measure key aspects of the current process and collect relevant data.
Analyze the data to verify cause-and-effect relationships. Determine what the relationships are, and attempt to ensure that all factors have been considered.
Improve or optimize the process based upon data analysis using techniques like “Design of experiments.”
Control to ensure that any deviations from the target are corrected before they result in defects. Set up pilot runs to establish process capability, move on to production, set up control mechanisms, and continuously monitor the process.
DMADV is used to create new product or process designs:
Define design goals that are consistent with customer demands and the enterprise strategy.
Measure and identify CTQ’s (characteristics that are “Critical To Quality”), product capabilities, production process capability, and risks.
Analyze to develop and design alternatives, create a high-level design, and evaluate design capability to select the best design.
Design details, optimize the design, and plan for design verification. This phase may require simulations.
Verify the design, set up pilot runs, implement the production process, and hand it over to the process owners.
ISO 9000 - is a family of standards for quality management systems. ISO 9000 is maintained by ISO, the International Organization for Standardization and is administered by accreditation and certification bodies. There are eight ISO 9000 2000 quality management principles:
Focus on your customers
Involve your people
Use a process approach
Take a systems approach
Encourage continual improvement
Get the facts before making decisions
Work with your suppliers
TQM – Total Quality Management is a management approach to long-term success through customer satisfaction. All members of an organization participate in improving processes, products, services and the culture in which they work.
Kaizen – looks at eliminating waste from the business and production process, thus improving production and reducing costs without much of a monetary investment.
Benchmarking - is the process of measuring an organization's internal processes, then identifying, understanding, and adapting outstanding practices from other organizations considered to be best-in-class.
Quality, Cost, Delivery (QCD) – offers a straightforward method of measuring processes while being applicable to both simple and complicated business processes. It also represents a basis for comparing businesses. QCD, as used in lean manufacturing, measures a businesses activity and develops key performance indicators. QCD analysis often forms a part of continuous improvement programs.