Productivity and QM

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Productivity and Quality

Management

Ch apter 1Productivity C oncepts and

Management

BASI C S

R esources employed for ac h ievingproductivity are 5 M¶s

MaterialsMac h inesMen

Met h odsMoney

Productivity

Defined as a ratio between output andinput.

Input factors are men, materials, tools,knowledge level, mac h inery and met h ods,processes, systems, management , ot h er resources.

Productivity Improvement

Input Output60 minutes 5 c h airs

30minutes 5 c h airs60 minutes 6 c h airs30 minutes 6 c h airs

Improvement in Employee Productivity

Personnel selection.Time control

Organization structuringHuman resource developmentMotivation

Employee MotivationMaslow¶s Need Hierarc h y Th eory

P h ysiological needs

S ecurity needs

S ocial needs

S elf esteem

actualization

Types of productivity

Partial Productivity :

Output quantity / One class of input

Total Productivity :

Output quantity / input quantity

C alculation of Productivity

PPM : Partial Productivity Measure

It is t h e ratio of real gross output to onetype of real input.

PPM = Gross R eal OutputTotal h rs worked

TPM : Total Productivity MeasureIt is t h e ratio of R eal Gross Output to all

th e real inputs

TPM = R eal Gross Output

R eal Gross Input

TFP : Total Factor ProductivityIt is t h e ratio of t h e Net Output to t h e sum of Labour and capital inputs

TFP = Net OutputLabour + C apital

Net output = Gross output ± materials ±intermediate goods and services used in t h eproduction of raw materials

Ch apter 2Quality Fundamentals

Quality means quality of t h e deliveredproduct, work content, quality of service ,quality of systems, quality of processes,quality of people, in s h ort t h e quality of t h eentire organization

Quality can be defined as a ratio of performance (P) and expectation (E)of t h e customer.

S tatistical Quality C ontrol ± S QC

U se of statistical met h ods suc h ascontrol c h arts and samplinginspection****.Problems wit h S QC

1. Difficult to follow by experienced workers2. S tandards were to be set w h ich was a

difficulty due to innumerable factors.3. Was over emp h asized .4. Top management was h ardly involved

S mall µq¶ and B ig µQ¶

S mall µq¶ focuses primarily on t h e productquality .

B ig µQ¶ focuses on several issues of process quality , product, systems,delivery, documentation and every singleaspect of commitment to t h e customer.

Quality Loop

For t h e big µQ¶ to h appen, an organizationidentifies customer needs and preferencesand t h en design , develop, manufactureand sell t h e products fulfilling customer requirements.

QC is a small group of employees, mostlyat worker level formed to perform qualitycontrol and improvement activities wit h inth eir workplace.

C onviction t h at workers at t h e s h op floor level can significantly contribute tomanagement levels to improveproductivity.

Quality circles - Is h ikawa

Helps in developing1. Mutual trust among workers

2. Improve t h e operations3. Employee involvement and motivation4. Infinite possibilities

Quality circles - Is h ikawa

S teps performed by Q C

Decide on t h emeEstablis h th e goalsC larify reasons A ssess t h e currentsituationProbe causes and

analyze t h em

Quality C ontrol

Includes1. Drawing Quality Plans.

2. Test Procedures.3. Test S ch edules.4. Inspection of materials.

5. Non conformities.6. C ustomer complaints

Quality A ssuranceA ssuring t h e quality in t h e product and serviceso t h at t h e customer can buy it wit h confidence.Quality A ssurance can be done t h roug h th efollowing :

1. Development of quality plans.2. Vendor quality surveys.

3. Product quality audits.4. R eview disposition of Non conforming

products.5. Initiation of customers future needs.

Ch apter 3Quality Management P h ilosop h ies

Definition : Quality is meeting productspecifications.

Quality is performance as per customer expectationsQuality is doing t h e rig h t th ing rig h t firsttime.

TQM : A rmand V Feigenbaum

Originator of Total Quality ManagementTalks about 9 M¶s of quality

1. Money

2. Men3. Met h ods4. Mac h ines5. Materials6. Markets7. Management8. Motivation9. Meeting product requirements

Deming¶s 14 points for managementquality transformation

C reate constancy of purpose for improvement in product and service. A

dopt new ph

ilosoph

iesC ease dependence on inspection toac h ieve quality.

End practice of awarding th

e businesspurely on price tagImprove constantly and for every process

Institute training on t h e job. A dopt and institutionalize leaders h ip.

Drive out fear B reakdown barriers between staff areas.Eliminate slogans, ex h ortations and

targets for t h e workforce.

Eliminate numerical quotas for t h e workforceand numerical goals for t h e mgmt.

R emove barriers t h at rob people of pride andworkmans h ips ( annual rating or merit system)Institute programme of education and self-improvement for everyone.

Put everyone in t h e company to work toaccomplis h th e transformation.

Deming¶s 7 Deadly Diseases

1. Lack of constancy of purpose2. Emp h asis on s h ort term profits

3. Over emph

asis on performanceappraisal and merit rating4. Excessive staff mobility5. Overdependence on figures6. Excessive medical costs7. Excessive legal costs

P C D A C ycle

Plan Ch eck

Do A ct

C rosby¶s A bsolutes of qualitymanagement

Quality is defined as conformance torequirements.

e system for causing quality isprevention.Th e performance standard is zero defects.

e measurement of quality is price of nonconformance.

C rosby¶s 14 steps for organizationalimprovement.

1. Management commitment2. Quality improvement teams

3. Measurement4. C ost of quality5. A wareness

6. C orrective action7. Zero defect planning

8. Employee education9. Zero defects day

10. Goal setting11. Error cause removal12. R ecognition

13. Quality councils14. Do it all again

C rosby¶s 14 steps for organizationalimprovement.

C rosby¶s 6 C ¶s

C ompre h ension : ability to understandquality related activities.C ommitment : by one and allC ompetence : of employeesC orrections : rectification abilities.C ommunication : wit h out ambiguity,h onesty and wit h no confusion.C ontinuance: of good performance andfurth er improvement.

J uran¶s p h ilosop h y

Embracing quality planning, qualitycontrol and quality improvement.

It covers1. QC is analogous to financial control.2. Quality planning is analogous to financial

planning and budgeting3. Quality improvement is analogous to cost

reduction.

J uran¶s µProject by Project approac h ¶

Pat h breaking ideas were :1. S urvival and growt h are dependent on

³breakth

rough´

to new levels of performance.2. B reakt h roug h is defined as an organized

creation of a beneficial c h ange.3. C ustomer needs are translated into

process and product features.

C ost of poor quality needs constantattention.Ch

ronic waste must be identified andeliminated.Over 80% of quality related problemsemanate from managers, and not workers.

J uran¶s µProject by Project approac h ¶

Ch apter 4Quality and costs

C ost of Poor Quality

Doing t h ings wrong or doing t h em againand again can cost around 20% or moreth an t h e sales turnover.Price of conformance ±cost to make t h ingscome out rig h t .3- 4 % of t h e salesPrice of non conformance ± cost to correctwrong t h ings done,20% or more of t h esales.

Group of C OPQPrice of non conformance

Expenses involved w h en t h ings are donewrong.

To correct th

e proceduresTo correct t h e product or t h e services20% or more of t h e sales in mfg

companies.35% or more of t h e operating costs inservice companies

Groups of C OPQ

Price of C onformanceMoney spend to make t h ings come outrigh t.

Professional quality functionsPrevention efforts3 to 4%

Price of conformance

1. Prevention costs ± to prevent t h e defects. Egs: Market researc h , audits, qualitytraining, quality planning and control etc

2. A ppraisal costs ± t h e costs incurred indetection of defects . Egs : testing,inspections and measurements,incoming raw material testing, qualityaudits.

Price of non conformance

Internal failures1. S crap, excluding planned waste2. R ework and repair 3. R etesting4. B reakdown maintenance

External failures

1. R ejected and returned products2. Loss of customers goodwill3. Transit damages

C ause wise distribution of C OPQ

C ause %of total C OPQDesign faults 36

B ad specifications 16Poor planning 14Human error 12

B ad inspection 10Ot h ers 12

Distribution of poor quality costs

Prevention: 5% of total quality costs A ppraisal: 30%

Failure: 65%

C omponents of C OPQ

Visible poor quality costsHidden poor quality costs

S crap

R ework

Warranty costs

Excessive use of material

High inventory

Low plant utilizationC ost of redesign and reinspectionC ost of resolving customer problemsInterest c h arged due to delayed payments

Opportunity cost due to lost customers

Visible

h idden

C ost of Poor Quality ( A P IE)

Price of conformance

Price of non conformance

A ppraisal costsPreventive costs

Internal failuresExternal failures

Effect of quality system on t h e costs

Ch apter 5FO CU S ON THE

WO RK FO R C E

Productivity Incentives

Wage structure

C ompensationsystem

Incentive pay

(individual, group,plant wise)

J ob A nalysis

S ystematic exploration of t h e activitieswith in a job.

Description of w h at practically h appens inth e job and identifying t h e appropriatetasks, knowledge, skills necessary for performing t h e job and t h e conditionsunder w h ich th e job is performed.

Focus on t h e workforce includes

Human R esource PlanningR ecruitingEmployee training and developmentC areer developmentPerformance appraisalC ompensationemployee relationsS afety and h ealt h

J ob R otation

Moving employees to various positions inth e organisation. A

im is to explore th

eir abilities, skills andknowledge.C an be vertical or h orizontal.

Work study / Time and Motion S tudy

Tec h niques used in examination of h umanwork in all its contexts, w h ich h elps inassessing all factors affecting t h eefficiency in order to effect improvement.U sed to increase t h e amt produced from agiven quantity of resources wit h out furt h er investment.

Types of Work S tudy

Met h od study ± examination of existingand proposed ways of doing work as ameans of developing easier and better met h ods and reducing costs.

Work measurement ± tec h niques used toestablis h th e time required by a qualifiedworker to carry out a specific job.

Met h odstudy

Workmeasurem

entWork study

Work S tudy S teps

S elect t h e job to be studiedR ecord from direct observationExamine t h e facts recordedDevelop t h e most economic met h odMeasure t h e quantity of work in met h od selectedC alculate t h e std time

Define t h e new met h od and timeInstall t h e new met h odDevelop proper control procedures

Maintain t h e new std practices

Lateral T h inking

B reaking t h e rulesR isk taking

A ttitude adjustmentsCh ecking assumptionsImagination

IntuitionC reative beliefs

B locks in lateral t h inking

Negative attitudeFollowing t h e rules

Making assumptionsS tressFear

No creativityOver reliance on logic

Productivity and QM

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