Managing Quality

(Assignment #5)

1. Explain the dimensions of design quality, process quality and service quality .

 Design quality can be described as the quality that a product has in terms of the
actual characteristics of the product. Think about the design of your favourite cell
phone. The decisions made by Marketing as well as the Design team will
determine the way your phone will operate, the quality of the sound, the features
it has, not to mention the way it looks, feels and lasts. Below are some facets of
quality in products.

 Process quality refers to the ability of the organization to produce the good or

service having perfect quality at each stage of the process, or in other words,
manufacturing defect-free products.

 Measurement of  service quality is more challenging.  Each customer has a

certain performance level in mind from which to compare or evaluate a service.

2. Describe the quality gurus that contributed to the modern field of quality .

Gurus of Quality

Much of the field of Quality originated from several individuals who spent their
careers researching, teaching and developing the field of Quality. These individuals are
Walter Shewhart, W. Edwards Deming, Joseph Juran, Philip Crosby and Armand
Fiegenbaum.

Walter Shewhart (1891-1967)

Dr. Shewhart was an American physicist, engineer and statistician. He is known

as the father of statistical quality control and spent much of his career researching
variation and is credited with the creation of the first control chart. His work focused
around the need to reduce variation in order to improve quality. He is responsible for the
concepts of assignable and common variation.

The processes that produce goods and services will all have some variation. It is
intuitive that the more variation in processes, the poorer the quality will be. Assignable
variation is the type of variation where the cause can be clearly identified and corrected
or managed. An example of an assignable variation might be an error by an employee, a
software glitch, or a tool breakage. Common variation, also referred to as chance
variation, is the type of variation that is inherent in the process. It is generally to be
expected, and not a cause of an error. Intuitively, if we reduce or minimize either
variation, we will improve product quality.

Edwards Deming (1900-1993)

Dr. Deming is likely the most well-known of the Quality Gurus. He was an
American engineer, statistician, professor and author. Dr. Deming was recruited to Japan
after WWII to assist with their national census. Beginning in 1950 Deming trained
thousands of Japanese engineers, managers, and scholars in basic statistical process
control. He is credited with guiding the rise of Japanese superior quality. In appreciation
for Deming’s guidance the Japanese named their highest quality award after Dr. Deming
(The Deming Prize). Dr. Deming has an extensive list of published works but is likely
most well-known for Deming’s 14 points and the Deming Cycle.

Joseph Juran (1904-2008)

Juran was a Romanian-born American engineer. He is best known for the Quality

Control Handbook, which was first published in 1951. He emphasized the importance of
three specific factors which came to be known as the quality trilogy: quality planning,
quality control and quality improvement. He authored hundreds of papers and 12 books.
He is responsible for creating the concept known today the cost of quality. The Juran
Institute in the U.S. is a leader in training and research in quality. Joseph Juran also came
 upon the work of Vilfredo Pareto (1848-1923) and made the Pareto Principle, also known
as the 80/20 rule, well known today as a tool for problem solving and continuous
improvement.

Pareto was an Italian economist and sociologist who noticed that 80% of the land
in Italy was owned by about 20% of the population. This Pareto principle is alive and
well today in the field of quality and continuous improvement. It is generally accepted
that 80% of defects can be traced to a small number (20%) of the causes. Firms need to
ensure that they are concentrating on fixing the correct or “root” causes.

Philip Crosby (1926-2001)

Crosby was an American businessman and author. He published Quality is Free in

1979. He believed that the costs of quality are often understated. He coined the
phrase zero defects and felt that there was no reason for any errors. He taught that it is
less expensive to do it right the first time rather than to pay for extra inspection, scrap,
rework and repairs.

Armand Fiegenbaum (1920-2014)

Dr. Feigenbaum was an American quality engineer and businessman. He was the
Director of Manufacturing Operations at General Electric from 1958-1968. He devised
the concept of total quality control, which later became total quality management (TQM).
He is also known for his concept of a “hidden plant.” He felt that a large portion of a
plant’s capacity is wasted due to the large amount of failures and defects.

3. Discuss the costs of quality.

Companies who provide excellent quality goods and services are obviously able
to excel and differentiate themselves from competitors. They also tend to be more
profitable and their losses and extra costs due to poor productivity, rework, inspection,
and scrap will be negligible. The various costs of quality can be broken down into the
following four categories: prevention costs, appraisal costs, and failure costs, which are
further classified as internal failure costs and external failure costs.
 Prevention costs

Prevention costs include all the funds spent to prevent the occurrence of defects.
Examples include quality improvement initiatives, employee training, upgrading of
equipment, implementing quality procedures and making proactive design changes.

Appraisal costs

All money spent in checking and testing of product during the production process
would be considered Appraisal costs. Wages of inspectors when defined as part of the
process, testing labs and equipment, gauging, and process control, would be included in
this category.

Internal failure costs

Once a defect has been produced, with any luck the organization will detect the
error before it leaves the building and is sent to the customer. Often, defective products
can be repaired, but all of the extra time spent on the rework is considered internal failure
costs. Product that is unable to be repaired is classified as scrap. This also is Internal
Failure costs. This can cause many other problems because customers still expect on-time
deliveries. Often other orders may have to be re-manufactured and expedited in order to
compensate for products that are scrap. The customer is often not aware of these issues.

External failure costs

Once a defective product has been shipped to the customer, the costs then become
external failure costs. Replacement product, expedited shipping, potential law suits,
product recalls, and of course loss of future business are all external failure costs. It is
impossible to predict the actual external failure costs since there is no way of gauging the
impact of dissatisfied customers on future business.

4. Differentiate between TQM, ISO9001 and Six Sigma.

Total Quality Management (TQM)

 To compete today, companies must deliver quality goods and services that satisfy
customers’ needs. This is the objective of quality management. Total quality management
(TQM), or quality assurance, includes all the steps that a company takes to ensure that its
goods or services meet or exceed the customers defined specifications and are of
sufficiently high quality to meet customers’ needs. Generally speaking, a company
adheres to TQM principles by focusing on three tasks:
 Customer satisfaction
 Employee involvement
 Continuous improvement

ISO

The International Organization for Standardization (ISO) is an international

standard-setting body composed of representatives from various standards organizations.
Founded on 23 February 1947, the organization promotes worldwide proprietary,
industrial and commercial standards. It is headquartered in Geneva, Switzerland, and
works in 164 countries.

ISO is an independent, non- governmental organization and is the largest

developer of voluntary international standards. Use of these standards assists organization
to create products and services that are safe, reliable and of good quality. The standards
help businesses increase productivity while minimizing errors and waste. By enabling
products from different markets to be directly compared, they facilitate companies in
entering new markets and assist in the development of global trade on a fair basis. The
standards also serve to safeguard consumers and the end-users of products and services,
ensuring that certified products conform to the minimum standards set internationally

Six Sigma

You may end up accepting a job in an organization that has a Six Sigma Program.
Six Sigma is a set of techniques and tools for process improvement. It was introduced by
engineer Bill Smith while working at Motorola in 1980. It is a comprehensive quality
 system for achieving business success by minimizing variation in business processes. Six
Sigma quality is used to describe a process so well controlled that there are no more than
3.4 defects per million opportunities

Six Sigma comes from the term in statistics of sigma, meaning standard deviation.
It is a measure of the amount of variation in a set of data. A usual company process might
operate at a 3 sigma quality level. This indicates that 99.73% of all output will fall
between plus and minus three standard deviations of the mean. The result then would be
that 0.27% of all results are non-conforming, or defective. This is equivalent to 2700
defects per million opportunities. This is not so good if the business is operating in an
industry where quality is critical to customer safety, such as manufacturing of aircraft,
cars or medical devices. A process with a Six Sigma capability generates 99.99966%
defect free outputs.

Unique to Six Sigma is the DMAIC Improvement Model. In Six Sigma,

improvements are made by the use of project teams. A team may be assembled in order
to fix a quality issue, to streamline an old process or to develop a new process.  The team
will use the DMAIC model, which is an acronym that stands for Define, Measure,
Analyze Improve and Control. Copyright © 1993 — American Society for Quality. All
rights reserved. An explanation of the steps in the DMAIC process and some of the tools
used are below.

 Define the problem, improvement activity, opportunity for improvement, the

project goals, and customer (internal and external) requirements.
 Measure process performance.
 Analyze the process to determine root causes of variation and poor performance
(defects).
 Improve process performance by addressing and eliminating the root causes.
 Control the improved process and future process performance

5. Describe the tools used in quality improvement projects.

 Check Sheets

This is a custom designed form used to record the number of occurrences of a

particular outcome of interest. It may collect basic information such as how many
incidents occurred, the timing, or the measurement that was non-conforming.

Histograms

Raw data from a check sheet may be put into a histogram. Data that is continuous
in nature can be put into a Histogram that contains ranges of the data. It will show an
accurate representation of the distribution of the data.

Control Charts

In order to monitor the performance of a process over time, a control chart is the
appropriate tool. A Control Chart includes an Upper Control limit and a lower Control
limit, which are used to control the quality dimension that is measured. As long as points
seem to appear randomly on both sides of the mean and they fall between the upper and
lower control limits, the process is assumed to be in control.

Pareto Charts

A special type of bar chart that shows the number of occurrences of a particular
characteristic, ordered from highest to lowest. The X axis represents each characteristic
and the Y axis is the number of times this occurrence was recorded. In addition, a
cumulative percent line shows the cumulative percentage that each category represents.
The Y axis on the right hand side of the chart corresponds to the percentage on this line.
In the management of quality, managers must allocate resources to rectify the most
frequently occurring problems.  A Pareto analysis helps us focus our attention on the
defects that occur the most frequently and to allocate the resources accordingly.

Scatter Diagrams
 A simple diagram helps to figure out if there is a relationship between two
variables.

Cause and Effect Diagrams

Also known as a Fishbone diagram, it was developed by Dr. Ishikawa to help

identify the causes of a problem. The overall shape is that of a fish. The pointy end points
to the ‘effect’ or the problem.  Each of the ribs represents a major cause, or category that
is a potential contributor to the problem.  Commonly, the rib bones tend to be categories
such as the man, method, material, machine, and environment. The actual factors that fall
under each category are written on their related rib.