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FMIS Managing Qulaity (6)
FMIS Managing Qulaity Chapter 6
68
Finance
Undergraduate 2
04/06/2010

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Term
Quality
Definition
The ability of a product or service to meet customer needs
Term
User based quality
Definition
"lies in the eyes of the beholder"
Term
Manufacturing based quality
Definition
confroming to standards and "making it right the first time"
Term
Product based quality
Definition
a percise and measureable variable
Term
The operations manager's objective
Definition
to build a total quality management systemt hat identifies and satisfies customer needs.
Term
Sales Gains via ______ lead to increased profits
Definition
* Improved response
* Flexible Pricing
* Improved Repuation
Term
Reduced Costs via _____ lead to increased profits
Definition
* Increased productivity
* Lower rework and scrap costs
* Lower warrany costs
Term
Organizational practices
Definition
Leadership, Mission statemetn, Effective operating procedures, Staff support, Training

Yields: What is important and what tis to be accomplished.

Flows to Quality principles
Term
Quality Principles
Definition
Customer focus, Continuous improvement, Benchmarking, Just-intime, tools of TQM

Yields How to do what is important and to be accomplished.

Flows to Employee fulfillment
Term
Employee Fulfillment
Definition
Empowerment, Organizational Commitment

Yields; Employee attituded taht can accomplish what is important.

Flows to Customer Satisfaction
Term
Customer Satisfaction
Definition
Winning orders, repeat customers

Yields: an effective organiation with a competitive advantage.
Term
The flow of activities that are necessary toa achieve Total Quality Management:
Definition
1. Organizational Practices
2. Quality Principles
3. Employee Fulfillment
4. Customer Satisfaction
Term
Other Implications of Quality:
Definition
1. Company Reputation
2. Product ilability
3. Global implications
Term
Company Reputation:
Definition
An organization cna expect its reputation for quality ( good or bad ) to follow it.

Quality will show up in perceptions about he firm's new products, employment practices, and supplier relations.

Self-promotion is not a substitute for quality products.
Term
Product Liability:
Definition
The courts increasingly hold organizations that design, produce, or distrubte faulty products or services liable for damages or injuries resulting from their use.

Legislation such as the Consumer Product Safety Act sets and enforces product standards by banning products that do not reach those standards.
Term
Global Implications:
Definition
For both a company and a country to compete effectively in the global economy, products must meet global quality, design, and price expectations.

inferiro products harm a firm's profitability and a nation's balance of payments
Term
What is the Malcolm Baldridge National Quality Award?
Definition
An award for quality achievment named fro former secretary of Commerce Malcolm baldridge.

Winners include Motorola, Milliken, Xerox, Fedex, Ritz Carlton Hotels ...
Term
Cost of Quality (COQ)
Definition
The cost of doing thigs work - that is, the price of nonconformance.
Term
4 major categories of costs are associated with quaity
Definition
1. Prevention costs
2. Appraisal costs
3. Internal failure
4. External Costs
Term
Prevention Costs:
Definition
Costs associated with reducing the potential for defective parts or services ( training, quality improvement programs)
Term
Appraisal Costs:
Definition
Costs related to evaluating products, processes, parts and services ( testing, labs, inspectors)
Term
Internal Failure:
Definition
Costs that result from production of defective parts or services before delivery to customers (rework, scrap, downtime)
Term
External costs
Definition
Costs that occur after deliver of defective parts or services (rework, retunred goods, liabilities, lost goodwill, costs to society).
Term
ISO 9000
Definition
A set of quality standards developed by the international Organization for Standardization (ISO)
Term
ISO 14000
Definition
An environmental Management standard established by the international Organization fro Standardization (ISO)
Term
Total Quality Management
Definition
Management of an entire organization so that it excels in all aspects of products and serivces that are importatnt tthe customer.
Term
PDCA
Definition
A continuous improvement model of plan, do , check. act.
Term
Six Sigma
Definition
A program to save time, improve quality, and lower costs.
Term
5 core elements of the ISO 14000
Definition
1. Environmental management
2. Auditing
3. Performance Evaluation
4. Labeling
5. Life cycle assessment
Term
Advantages to the ISO 14000
Definition
* Positive Public Image and reduced exposure to liability.
* Good systematic approach to pollution prevention through the minimization of ecologicial impact of products and activities.
* Compliance with regulatory requirements and opportunites fro competitive advantage.
* Reduction in need for multiple audits.
Term
7 concepts for an effective TQM program
Definition
1. Continuous improvement
2. Six Sigma
3. Employee empowerment
4. Benchmarking
5. just-in-time JIT
6. Taguchi Concepts
7 Knowledge of TQM tools.
Term
Six Sigma is a: (3 things)
Definition
Strategy
Discipline
Set of tools
Term
Six Sigma is a Stragety because:
Definition
it focuses on total customer satisfaction
Term
Six Sigma is a discipline because:
Definition
it follows the fromal Six Sigma Improvement Model known as DMAIC
Term
the 5 steps in the DMAIC
Definition
1. Defines: the project's purpose, scope, and outputs and then identifies the required infromation, keeping in mind the customer's definition of quality
2. Measures: the process and collects data
3. Analyzes: the data , ensuring repeatablity, and reproducibility
4. Improves: by modifying or redesigning, existing processes and prcedures;
5 Controls: the new process to make sure performance levels are maintained.
Term
Six Sigma is a set of 7 tools...
Definition
Check sheets
Scatter diagrams
cause-and-effect diagrams
Pareto charts
flowcharts
histograms
stastical process control
Term
Employee Empowerment
Definition
Enlarging employee jobs so that the added responsibility and authority is moved to the lowest level possible in the organization
Term
Quality Circle
Definition
A group of employees meeting regularly with a facilitator to solve work-related problems in their work area
Term
Benchmarking
Definition
selecting a demonstrated standard of performance that represents teh very best performance for a process or an activity
Term
Techniques for building employee empowerment:
Definition
1. Building communication networks that include employees:
2. Developing open, supportive supervisors
3. Moving responsibility from both managers and staff to production employees
4. Building high-moral organizations
5. Creating such formal organization structures as teams and quality circles.
Term
Steps for developing benchmarks:
Definition
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.
Term
JIT is related to quality in 3 ways:
Definition
JIT cuts the cost of quality
JIT improves quality
Better quality means less inventory and a better, easier-to-employ JIT system.
Term
Quality Robust
Definition
Products are consistently built to meet customer needs in spite of adverse conditions in the production process.
Term
Quality loss Function (QLF)
Definition
A mathematical function that identifies all costs connected with poor quality and shows how these costs increase as product quality moves from what the customer wants.
Term
Target Oriented Quality
Definition
a philosophy of continuous improvement to bring the product exactly on target
Term
Conformance oriented specifications
Definition
The product is good as long as it falls within the tolerance limits

produces more units farther from the target

the loss (cost) is higher in terms of customer satisfaction and benefits to society.
Term
Cause-and-effect diagram
Definition
A schematic technique used to discover possible locations of quality problems
Term
4 M's of Cause and Effect Diagrams
Definition
Material
Machinery/equipment
Manpower
Methods
Term
Pareto charts
Definition
Graphics that identify the few critical items as opposed to many less important ones.
Term
Flowcharts
Definition
Block diagrams that graphically describle a process or system.
Term
Statistical process control (SPC)
Definition
A process used to monitor standards, make measurements and take corrective action as a product or service is being produced.
Term
Control Charts
Definition
Graphic presentations of process data over time, with predetermined control limits
Term
Inspection
Definition
A means of ensuring that an operation is producing at the quality level expected
Term
Source Inspection
Definition
Controlling or monitoring at the point of production or purchase - at the source
Term
Poka-Yoke
Definition
Literally translated "foolproof"; it has come to mean a device or technique that ensures the production of a good unit every time.
Term
Attribute inspection
Definition
an inspection that classifies items as beign either good or defective
Term
Variable inspection
Definition
classifications of inspected items as falling on a continuum scale, such as dimension, size, or strength.
Term
Service Recovery
Definition
Training and empowering frontline workers to solve a problem immediately
Term
Reliability
Definition
Invlovles consistency of performance and dependability. It means that the frim performs the service right the frist time and that the frim honors its promises.
Term
Responsiveness
Definition
Concers the willingness or readiness of employees to provide service. It involves timeliness of service
Term
Competence
Definition
means possession of the required skills and knowledge to perfrom the service.
Term
Access
Definition
Involves approachability and ease of contact
Term
Communication
Definition
Means keeping customers informed in language they can understand and listening to them. It may mean that the company has to adjust its language for different consumers - increasing the level of sophistication with a well-educated customer and speaking simply and plainly with a novice.
Term
Credibility
Definition
Involves trustworthiness, believability, and honesty. It involves having the customer's best interests at heart
Term
Security
Definition
is the freedome from dange, risk, or doubt
Term
Understanding/knowing the customer
Definition
involves making the effort to understand the customer's needs.
Term
Tangibles
Definition
include the physical evidence of the service
Term
Determinants of Service Quality
Definition
Reliability
Responsiveness
Competence
Access
Courtesy
Communication
Credibility
Security
Understanding/knowing the customer
Tangibles
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