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Managing Quality

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Information about Managing Quality

Published on June 17, 2008

Author: knksmart

Source: slideshare.net

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Managing Quality Outlines Why Study Quality? Defining Quality Quality in Product and Service International Quality Standards: ISO 9000 Total Quality Management (TQM): Principles and Elements Cost of Quality Implementing TQM and Continuous Quality Improvement : Procedure, Problems and Tools

Why Study Quality?

Defining Quality

Quality in Product and Service

International Quality Standards: ISO 9000

Total Quality Management (TQM): Principles and Elements

Cost of Quality

Implementing TQM and Continuous Quality Improvement : Procedure, Problems and Tools

Why Study Quality? Customers "buy" quality with higher price and loyalty Total quality leads to substantial cost reduction in rework, repair, scrap, warranty costs, etc. Total quality "pays" with the higher productivity, profits and market share Quality is built-in into all products and services Quality is everybody’s responsibility including design, operations, marketing, purchasing, etc. Quality improvement requires effective tools and good training

Customers "buy" quality with higher price and loyalty

Total quality leads to substantial cost reduction in rework, repair, scrap, warranty costs, etc.

Total quality "pays" with the higher productivity, profits and market share

Quality is built-in into all products and services

Quality is everybody’s responsibility including design, operations, marketing, purchasing, etc.

Quality improvement requires effective tools and good training

Defining Quality The American National Standards Institute (ANSI) and the American Society for Quality (ASQ) definition: Quality is the totality of features and characteristics of a product or service that bears on its ability to satisfy given needs. Purchaser-based definitions (user-based): Quality of the product delivered Quality of supplier’s service and capability during the transactions

The American National Standards Institute (ANSI) and the American Society for Quality (ASQ) definition:

Quality is the totality of features and characteristics of a product or service that bears on its ability to satisfy given needs.

Purchaser-based definitions (user-based):

Quality of the product delivered

Quality of supplier’s service and capability during the transactions

Purchasing Qualified Tires for UPS Delivery Vehicles What are UPS’s needs for tires What are UPS’s quality/value concerns of the tires delivered What are UPS’s concerns of the supplier’s performance during the product/service delivery and transaction What’s UPS’s “best buy”?

What are UPS’s needs for tires

What are UPS’s quality/value concerns of the tires delivered

What are UPS’s concerns of the supplier’s performance during the product/service delivery and transaction

What’s UPS’s “best buy”?

Dimensions of Product Quality Performance Product's primary operating characteristics Features "Bells and whistles" of a product Reliability Probability of a product's surviving over a specified period of time Conformance Degree to which physical and performance characteristics of a product match pre-established standards

Performance

Product's primary operating characteristics

Features

"Bells and whistles" of a product

Reliability

Probability of a product's surviving over a specified period of time

Conformance

Degree to which physical and performance characteristics of a product match pre-established standards

Dimensions of Product Quality Durability Amount of use one gets from a product before it physically deteriorates or until replacement is preferable Aesthetics How a product looks, feels, sounds, tastes, or smells Perceived quality (reputations) Subjective assessment resulting from image, advertising, or brand names

Durability

Amount of use one gets from a product before it physically deteriorates or until replacement is preferable

Aesthetics

How a product looks, feels, sounds, tastes, or smells

Perceived quality (reputations)

Subjective assessment resulting from image, advertising, or brand names

Dimensions of Service Quality Competence, Access and Communication Possession of the skills and knowledge required to perform the transactions; ease of contact; educating and informing buyers Serviceability and responsiveness Speed and willingness of providing service/repairing Security Freedom from danger, risk, or doubt Commitment Making an effort to meet the customer's needs

Competence, Access and Communication

Possession of the skills and knowledge required to perform the transactions; ease of contact; educating and informing buyers

Serviceability and responsiveness

Speed and willingness of providing service/repairing

Security

Freedom from danger, risk, or doubt

Commitment

Making an effort to meet the customer's needs

Importance of Quality Identify cost saving & value creation Profits including company’s reputation or lower product liability International implications Increased Profits Lower Costs Productivity Rework/Scrap Warranty Market Gains Reputation Volume Price Improved Quality

Identify cost saving & value creation

Profits including company’s reputation or lower product liability

International implications

Description by Specification Establish clear standards for measuring Serve as instructions of handling Advantages and limits of using specs Three types of specs Physical or Chemical Characteristics Defining functions or performance in both products and delivery process Description by engineering drawing

Establish clear standards for measuring

Serve as instructions of handling

Advantages and limits of using specs

Three types of specs

Physical or Chemical Characteristics

Defining functions or performance in both products and delivery process

Description by engineering drawing

Alternatives to Specification Description by sample Use market grade Common for commodities such as agriculture or raw materials Use standard specification For example RS232 interface, IEEE1394 standard

Description by sample

Use market grade

Common for commodities such as agriculture or raw materials

Use standard specification

For example RS232 interface, IEEE1394 standard

ISO 9000 Quality Standards Formed by International Organization for Standardization (ISO) in Geneva, Switzerland U.S. counterpart: American National Standards Institute (ANSI) Internal benefits Better documentation Greater quality awareness by employee External benefits Higher perceived quality Reduced customer quality audits

Formed by International Organization for Standardization (ISO) in Geneva, Switzerland

U.S. counterpart: American National Standards Institute (ANSI)

Internal benefits

Better documentation

Greater quality awareness by employee

External benefits

Higher perceived quality

Reduced customer quality audits

How to Manage Quality? From OM’s perspective Manufacturing-based definitions Conforming to standards Make it right the first time Product-based definitions Quality of design/redesign Quality are precise and measurable variables (specific product attributes)

From OM’s perspective

Manufacturing-based definitions

Conforming to standards

Make it right the first time

Product-based definitions

Quality of design/redesign

Quality are precise and measurable variables (specific product attributes)

Total Quality Management (TQM) Principles Customer focus Continuous improvement Benchmarking Consistency in the goal Suppliers are partners in TQM process Use statistical tools of TQM Yields: How to do what is important and to be accomplished

Customer focus

Continuous improvement

Benchmarking

Consistency in the goal

Suppliers are partners in TQM process

Use statistical tools of TQM

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

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

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

Flow of Activities Necessary to Achieve Total Quality Management Organizational Practices Quality Principles Employee Fulfillment Customer Satisfaction

Organizational Practices

Quality Principles

Employee Fulfillment

Customer Satisfaction

Organizational Practices Leadership Mission statement Effective operating procedure Staff support Training Yields: What is important and what is to be accomplished

Leadership

Mission statement

Effective operating procedure

Staff support

Training

Yields: What is important and what is to be accomplished

Benchmarking the quality of Potential Suppliers 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

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

Employee and Supplier Fulfillment Incentive sharing and empowerment Mutual commitments between Motorola and shipping agents Empowerment Organizational commitment Yields: Suppliers’ attitudes that they are willing to accomplish what is important for buyers

Incentive sharing and empowerment

Mutual commitments between Motorola and shipping agents

Empowerment

Organizational commitment

Yields: Suppliers’ attitudes that they are willing to accomplish what is important for buyers

Quality Circle and Six-Sigma Team Group of 6-12 employees from same work area Meet regularly to solve work-related problems 4 hours/month Six-Sigma team: Internal consulting group of outstanding employees from different work areas Meet regularly to solve quality-related problems Facilitates, trains, and helps with quality circle meetings © 1995 Corel Corp.

Group of 6-12 employees from same work area

Meet regularly to solve work-related problems

4 hours/month

Six-Sigma team: Internal consulting group of outstanding employees from different work areas

Meet regularly to solve quality-related problems

Facilitates, trains, and helps with quality circle

meetings

The Baldrige National Quality Award and Deming Prize Malcolm Baldrige Award is to recognize US organizations’ quality achievement on diffusion of Total Quality Management (TQM) practices Deming Prize granted by Japanese Empire annually to Japanese companies Since 1950’s, Deming’s quality crusade in Japan changed the world’s concepts of quality management

Malcolm Baldrige Award is to recognize US organizations’ quality achievement on diffusion of Total Quality Management (TQM) practices

Deming Prize granted by Japanese Empire annually to Japanese companies

Since 1950’s, Deming’s quality crusade in Japan changed the world’s concepts of quality management

Deming’s Points for Implementing Quality Improvement Create consistent and continuous improvement on product and service quality Build quality into the product; stop depending on inspections to catch problems Build long-term relationships in supplier based on performance instead of price Emphasize top manager’s responsibility

Create consistent and continuous improvement on product and service quality

Build quality into the product; stop depending on inspections to catch problems

Build long-term relationships in supplier based on performance instead of price

Emphasize top manager’s responsibility

Deming’s Points for Implementing Quality Improvement Break down barrier between departments Support, help, and improve Remove barriers of pride in work Institute a vigorous program of education and self-improvement Put everybody in the company to work on the transformation

Break down barrier between departments

Support, help, and improve

Remove barriers of pride in work

Institute a vigorous program of education and self-improvement

Put everybody in the company to work on the transformation

Shewhart’s PDCA Model 4.Act 1.Plan 3.Check 2.Do Identify the improvement and make a plan Test the plan Is the plan working Implement the plan

Exam Information A sample quiz will be discussed Midterm exam will cover Chapter 1, 2, 4, 5, 6

A sample quiz will be discussed

Midterm exam will cover Chapter 1, 2, 4, 5, 6

Cost of Quality INTERNAL FAILURE COSTS Incurred directly--prior to shipment or service--as a result of defective output: scrap rework repair salvage downtime disposition

INTERNAL FAILURE COSTS

Incurred directly--prior to shipment or service--as a result of defective output:

scrap

rework

repair

salvage

downtime

disposition

Cost of Quality EXTERNAL FAILURE COSTS Incurred to the provider when defects are discovered after shipment to customers: warranty expenses returned materials complaint processing liability settlements legal fees

EXTERNAL FAILURE COSTS

Incurred to the provider when defects are discovered after shipment to customers:

warranty expenses

returned materials

complaint processing

liability settlements

legal fees

Cost of Quality PREVENTION COSTS Incurred in an effort to improve quality system and avoid nonconformance in products and services: process analysis and process control quality planning quality training system development and management reporting

PREVENTION COSTS

Incurred in an effort to improve quality system and avoid nonconformance in products and services:

process analysis and process control

quality planning

quality training

system development and management

reporting

Cost of Quality APPRAISAL COSTS Incurred for determining the degree of quality: inspection and testing materials and tools maintenance of test equipment field testing

APPRAISAL COSTS

Incurred for determining the degree of quality:

inspection and testing

materials and tools

maintenance of test equipment

field testing

Traditional View of Quality-Cost Trade offs Low correction cost High detection cost High prevention cost High correction cost Low detection cost Low prevention cost Optimum Quality % of defects Cost

Taguchi Techniques and Quality Loss Function Experimental design methods Identify key component & process variables affecting product variation improve product & process design Taguchi Concepts Quality robustness Quality loss function Target-oriented quality

Experimental design methods

Identify key component & process variables affecting product variation

improve product & process design

Taguchi Concepts

Quality robustness

Quality loss function

Target-oriented quality

Target-Oriented Quality 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 (Conformance-oriented)

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.

Quality Loss Function; Distribution of Products Produced Low loss High loss Frequency Lower Target Upper Specification Loss (to producing organization, customer, and society) Quality Loss Function (a) Unacceptable Poor Fair Good Best Target-oriented quality yields more product in the “best” category Target-oriented quality brings products toward the target value Conformance-oriented quality keeps product within three standard deviations Distribution of specifications for product produced (b)

Quality Loss Function Graph Loss = (Actual X - Target) 2 • (Cost of Deviation) Lower (upper) specification limit Measurement Greater deviation, more people are dissatisfied, higher cost

Loss = (Actual X - Target) 2 • (Cost of Deviation)

The specifications for the diameter of a gear are 25.00 ± 0.25 mm . However, even within the specifications, there is still loss due to quality deviation. Need to identify the loss function Quality Loss Function Example © 1984-1994 T/Maker Co.

The specifications for the diameter of a gear are 25.00 ± 0.25 mm .

However, even within the specifications, there is still loss due to quality deviation.

Need to identify the loss function

Setup equation based on Taguchi’s assumptions L = D 2 C = (X - Target) 2 C L = Loss ($); D = Deviation; C = Cost Design experiments to find out key coefficients 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) 2 64 Enter various X values to obtain L & plot Quality Loss Function Solution

Setup equation based on Taguchi’s assumptions

L = D 2 C = (X - Target) 2 C

L = Loss ($); D = Deviation; C = Cost

Design experiments to find out key coefficients

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) 2 64

Enter various X values to obtain L & plot

Ability to produce products uniformly regardless of manufacturing conditions Different conditions may lead to different yield or process time. But the quality of finished parts will be consistent. Quality Robustness © 1984-1994 T/Maker Co. © 1995 Corel Corp .

Ability to produce products uniformly regardless of manufacturing conditions

Different conditions may lead to different yield or process time. But the quality of finished parts will be consistent.

Assignment and Case Discussion for Managing Quality Assignment 3: LuckWay Supermarket Christy Allen, the manager of the LuckWay supermarket, was very concerned with the large number of complaints from customers, particularly on Sundays, so over the last eight weeks she obtained Sunday's complaint records from the store's service desk…

Assignment 3: LuckWay Supermarket

Christy Allen, the manager of the LuckWay supermarket, was very concerned with the large number of complaints from customers, particularly on Sundays, so over the last eight weeks she obtained Sunday's complaint records from the store's service desk…

Tools of TQM and Continuous Improvement Flow charts or process diagrams Check sheet Pareto charts Cause and effect diagram (Scatter diagram) (Histograms) Statistical process control charts

Flow charts or process diagrams

Check sheet

Pareto charts

Cause and effect diagram

(Scatter diagram)

(Histograms)

Statistical process control charts

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 Flow Chart (Process Diagram)

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

Flow Charts (Chicken Processing Plant) Packing station Weighting & labeling Quick freeze (60 min) Storage (4 to 6 hrs) Shipping dock

Check Sheets Check sheet is designed for recording data Help identify patterns or facts during the recording period and lead to subsequent analysis For example, recording customer complains or inspection results as time goes by

Check sheet is designed for recording data

Help identify patterns or facts during the recording period and lead to subsequent analysis

For example, recording customer complains or inspection results as time goes by

Check Sheet Types of Error ------------------------------------------------------------------- Month Broken Wrong Mixed Contamination package label items --------------------------------------------------------------------------------------------- Jan 7 5 3 0 Feb 5 7 4 0 Mar 9 3 2 0 Apr 4 5 3 3 May 5 7 2 7 Jun 2 5 4 6 ---------------------------------------------------------------------------------------------- Total Percentage

Pareto Charts Organize errors, problems, or defects Help focus on problem-solving efforts Based on the work of Vilfredo Pareto, a 19-century economist 80% of a firm’s problem are a result of only 20% of the causes.

Organize errors, problems, or defects

Help focus on problem-solving efforts

Based on the work of Vilfredo Pareto, a 19-century economist

80% of a firm’s problem are a result of only 20% of the causes.

Pareto Analysis of Production Process (Total Defects = 44)

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. 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.

Cause and Effect Diagram Example Too many defects Problem

Cause and Effect Diagram Example Method Manpower Material Machinery Too many defects Main Cause Main Cause

Cause and Effect Diagram Example Method Manpower Material Machinery Drill Over Time Steel Wood Lathe Too many defects Sub-Cause

Cause and Effect Diagram Example Method Manpower Material Machinery Drill Over Time Steel Wood Lathe Too many defects Tired Old Slow

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 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

Process Control Chart

Patterns to Look for in Control Charts

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 Use TQM tools to help analyze, organize, and interoperate result from inspection 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

Use TQM tools to help analyze, organize, and interoperate result from inspection

When and Where to Inspect (Aided by Flow Chart) Before costly or irreversible processes At the supplier’s plant while the supplier is producing At your facility upon receipt of goods from the supplier Before delivery from your facility During the step-by-step production processes When production or service is complete Conducting survey or interview

Before costly or irreversible processes

At the supplier’s plant while the supplier is producing

At your facility upon receipt of goods from the supplier

Before delivery from your facility

During the step-by-step production processes

When production or service is complete

Conducting survey or interview

Routine Inspection vs. Probing Inspection Probing inspection is to identify the source of emerging quality problem Routine inspection is for tracking and monitoring those existing quality issues Flow chart or process diagram is useful for designing and studying both types of inspection

Probing inspection is to identify the source of emerging quality problem

Routine inspection is for tracking and monitoring those existing quality issues

Flow chart or process diagram is useful for designing and studying both types of inspection

Inspection Points in Services Bank Teller stations Loan accounts Checking accounts Shortages, courtesy, speed, accuracy Collateral, proper credit checks, rates, terms of loans, default rates, loan rates Accuracy, speed of entry, rate of overdraws Organization Some Points of Inspection Issues to Consider

Inspection Points in Services Retail store Stockrooms Display areas Sales counters Clean, uncluttered, organized, level of stockouts, amply supply, rotation of goods Attractive, well-organized, stocked, visible goods, good lighting Neat, courteous knowledgeable personnel; waiting time; accuracy in credit checking and sales entry Organization Some Points of Inspection Issues to Consider

Inspection Points in Services Restaurant Kitchen Cashier station Dining areas Clean, proper storage, unadulterated food, health regulations observed, well-organized Speed, accuracy, appearance Clean, comfortable, regular monitoring by personnel, Organization Some Points of Inspection Issues to Consider

Luckway Supermarket Only use open-ended comments but include timeline Analyze the issues with insightful flow chart Requirements Check sheet Pareto chart Control chart (record the frequency without consider UCL and LCL) Cause-and-effect diagram Make recommendation (for example, tie to TQM principles)

Only use open-ended comments but include timeline

Analyze the issues with insightful flow chart

Requirements

Check sheet

Pareto chart

Control chart (record the frequency without consider UCL and LCL)

Cause-and-effect diagram

Make recommendation (for example, tie to TQM principles)

Southwestern University (B) Why we need quantitative tools for managing quality? How to identify quality problems Collect data Organize data Interoperate data Plan for improving quality Benchmarking Empowerment Continuous improvement

Why we need quantitative tools for managing quality?

How to identify quality problems

Collect data

Organize data

Interoperate data

Plan for improving quality

Benchmarking

Empowerment

Continuous improvement

Southwestern University (B) Two types of data in this case Survey data Open-ended comments Start from considering the tools of TQM Flow chart Pareto chart Cause and effect diagram

Two types of data in this case

Survey data

Open-ended comments

Start from considering the tools of TQM

Flow chart

Pareto chart

Cause and effect diagram

Survey Data vs. Open-Ended Comments All types of data collection is costly When should we use survey? When should open-ended comments be elicited? How to encode open-ended comments? Advantages of using data from comments? How to design questions in survey? Advantages of using survey data

All types of data collection is costly

When should we use survey?

When should open-ended comments be elicited?

How to encode open-ended comments?

Advantages of using data from comments?

How to design questions in survey?

Advantages of using survey data

Analyze Survey Data

Ranking     Speed of Service 1.96 Poor   Seating 2.14     Printed Program 2.34     Concession Prices 2.36     Traffic 2.41     Season Ticket Plans 2.78     Entertainment 3.23     Parking 3.28     Ticket Pricing 3.36     Items in Weighted Descending Order     Food Selection 3.44 Good

Issues for Analyzing Open-Ended Comments A direct way to find out customer’s biggest concerns about quality Data would be abstract and subjective Difficult to encode Difficult to rank and interoperate May miss some secondary issues Good for pilot study on quality

A direct way to find out customer’s biggest concerns about quality

Data would be abstract and subjective

Difficult to encode

Difficult to rank and interoperate

May miss some secondary issues

Good for pilot study on quality

Categorize Open-Ended Comments

Ranking (ABC Analysis)     Speed of Service 1.96 Poor   Seating 2.14     Printed Program 2.34     Concession Prices 2.36     Traffic 2.41     Season Ticket Plans 2.78     Entertainment 3.23     Parking 3.28     Ticket Pricing 3.36     Items in Descending Order     Food Selection 3.44 Good

Pareto Chart 100% 70% 40% 10%

Cause and Effect Diagram Internal Facility Manpower External Facility Food Stands Too many complains Main Cause Main Cause

Other Concerns about Data Collection Time horizon Demography Sample size Sampling techniques Question design Set hypothesis Identify factors Data analysis Statistic methods Models for testing hypothesis

Time horizon

Demography

Sample size

Sampling techniques

Question design

Set hypothesis

Identify factors

Data analysis

Statistic methods

Models for testing hypothesis

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