Operations Chapter Management 6

Front 1

Defects

Back 1

Any instance when a process fails to satisfy its customer.

Front 2

Prevention costs

Back 2

associated with preventing defects before they happen.

Front 3

Appraisal costs

Back 3

incurred when the firm assesses the performance level of its processes.

Front 4

Internal failure costs

Back 4

costs result from defects that are discovered during production of services or products.

Front 5

External failure costs

Back 5

arise when a defect is discovered after the customer receives the service or product.

Front 6

Quality

Back 6

A term used by customers to describe their general satisfaction with a service or product.

Front 7

Total quality management (TQM)

Back 7

a philosophy that stresses three principles for achieving high levels of process performance and quality:
Customer satisfaction
Employee involvement
Continuous improvement in performance

Front 8

Conformance

Back 8

How a service or product conforms to performance specifications.

Front 9

Value:

Back 9

How well the service or product serves its intended purpose at a price customers are willing to pay.

Front 10

Fitness for use:

Back 10

How well a service or product performs its intended purpose.

Front 11

Support:

Back 11

Support provided by the company after a service or product has been purchased

Front 12

Psychological impressions

Back 12

atmosphere, image, or aesthetics

Front 13

Quality at the source

Back 13

a philosophy whereby defects are caught and corrected where they were created.

Front 14

Teams

Back 14

Small groups of people who have a common purpose, set their own performance goals and approaches, and hold themselves accountable for success

Front 15

Employee empowerment

Back 15

an approach to teamwork that moves responsibility for decisions further down the organizational chart to the level of the employee actually doing the job.

Front 16

Quality circles:

Back 16

Another name for problem-solving teams; small groups of supervisors and employees who meet to identify, analyze, and solve process and quality problems

Front 17

Special-purpose teams

Back 17

Groups that address issues of paramount concern to management, labor, or both.

Front 18

Self-managed team

Back 18

A small group of employees who work together to produce a major portion, or sometimes all, of a service or product.

Front 19

Continuous improvement

Back 19

the philosophy of continually seeking ways to improve processes based on a Japanese concept called kaizen.

Front 20

Continuous improvement

Back 20

Train employees in the methods of statistical process control (SPC) and other tools.
Make SPC methods a normal aspect of operations.
Build work teams and encourage employee involvement.
Utilize problem-solving tools within the work teams.
Develop a sense of operator ownership in the process.

Front 21

Statistical process control

Back 21

the application of statistical techniques to determine whether a process is delivering what the customer wants.

Front 22

Process capability

Back 22

the ability of the process to meet the design specifications for a service or product

Front 23

Nominal value

Back 23

a target for design specifications.

Front 24

Tolerance

Back 24

an allowance above or below the nominal value.

Front 25

Process Capability Index, Cpk,

Back 25

an index that measures the potential for a process to generate defective outputs relative to either upper or lower specifications.

Front 26

Using Continuous Improvement to Determine Process Capability

Back 26

Step 1: Collect data on the process output; calculate mean and standard deviation of the distribution.
Step 2: Use data from the process distribution to compute process control charts.
Step 3: Take a series of random samples from the process and plot results on the control charts.
Step 4: Calculate the process capability index, Cpk, and the process capability ratio, Cp, if necessary. If results are acceptable, document any changes made to the process and continue to monitor output. If the results are unacceptable, further explore assignable causes.

Front 27

Quality loss function

Back 27

the rationale that a service or product that barely conforms to the specifications is more like a defective service or product than a perfect one.
Quality loss function is optimum (zero) when the product’s quality measure is exactly on the target measure.

Front 28

Six Sigma

Back 28

a comprehensive and flexible system for achieving, sustaining, and maximizing business success by minimizing defects and variability in processes.

It relies heavily on the principles and tools of TQM.

It is driven by a close understanding of customer needs; the disciplined use of facts, data, and statistical analysis; and diligent attention to managing, improving, and reinventing business processes.

Front 29

Green Belt

Back 29

An employee who achieved the first level of training in a Six Sigma program and spends part of his or her time teaching and helping teams with their projects

Front 30

Black Belt:

Back 30

An employee who reached the highest level of training in a Six Sigma program and spends all of his or her time teaching and leading teams involved in Six Sigma projects.

Front 31

Master Black Belt:

Back 31

Full-time teachers and mentors to several black belts