Quality

 Refers to the ability of a product or service to consistently meet or exceed customer requirements
or expectations. Different customers will have different requirements, so a working definition of quality
is customer-dependent.

The Dimensions of Product Quality

1. Performance - main characteristics of the product.
2. Aesthetics - appearance, feel, smell, taste.
3. Special Features - extra characteristics.
4. Conformance - how well a product corresponds to design specifications.
5. Reliability - dependable performance.
6. Durability - ability to perform over time.
7. Perceived Quality - indirect evaluation of quality (e.g., reputation).
8. Serviceability - handling of complaints or repairs.

The Dimensions of Service Quality

1. Convenience - the availability and accessibility of the service.
2. Reliability - the ability to perform a service dependably, consistently, and accurately.
3. Responsiveness - the willingness of service providers to help customers in unusual situations and
to deal with problems.
4. Time - the speed with which service is delivered.
5. Assurance - the knowledge exhibited by personnel who come into contact with a customer
and their ability to convey trust and confidence.
6. Courtesy - the way customers are treated by employees who come into contact with them.
7. Tangibles - the physical appearance of facilities, equipment, personnel, and
communication materials.
8. Consistency - The ability to provide the same level of good quality repeatedly.

SERVQUAL - A widely used tool for assessing service quality, an instrument designed to
obtain feedback on an organization’s ability to provide quality service to customers.

Gaps or Discrepancies in Service Quality

1. Actual customer expectations and management perceptions of those expectations.
2. Management perceptions of customer expectations and service-quality specifications.
3. Service quality and service actually delivered.
4. Service actually delivered and what is communicated about the service to customers.
5. customers’ expectations of the service provider and their perceptions of provider
delivery

The Determinants of Quality

1. Design
Quality of Design - refers to the intention of designers to include or exclude certain features in a
product or service.

2. How well the product or service conforms to the design.

Quality of Conformance - refers to the degree to which goods and services conform to
(i.e.,achieve ) the intent of the designers.
3. Ease of use.
4. Service after delivery.

Key Areas of Responsibility for Quality

1. Top Management.
 Top management has the ultimate responsibility for quality. While establishing strategies for
quality, top management must institute programs to improve quality; guide, direct, and motivate
managers and workers; and set an example by being involved in quality initiatives.
2. Design.
 Quality products and services begin with design. This includes not only features of the product
or service; it also includes attention to the processes that will be required to produce the products
and/or the services that will be required to deliver the service to customers.
3. Procurement.
 The procurement department has responsibility for obtaining goods and services that will not
detract from the quality of the organization’s goods and services.
4. Production/operations.
 Production/operations has responsibility to ensure that processes yield products and services
that conform to design specifications.
5. Quality assurance.
 Quality assurance is responsible for gathering and analyzing data on problems and working
with operations to solve problems.
6. Packaging and shipping.
 This department must ensure that goods are not damaged in transit, that packages are clearly
labeled, that instructions are included, that all parts are included, and that shipping occurs in a
timely manner.
7. Marketing and sales.
 This department has the responsibility to determine customer needs and to communicate them
to appropriate areas of the organization.
8. Customer service.
 Customer service is often the first department to learn of problems. It has the responsibility to
communicate that information to appropriate departments, deal in a reasonable manner with
customers, work to resolve problems, and follow up to confirm that the situation has been
effectively remedied.

Benefits of Good Quality

 an enhanced reputation for quality
 the ability to command premium prices
 an increased market share
 greater customer loyalty
 lower liability costs
 fewer production or service problems

The Consequences of Poor Quality

 Loss of business
 Liability.
 Productivity.
 Costs.

Three Categories of Costs of Quality

1. Appraisal Cost
2. Prevention Cost
3. Failure Cost

Appraisal Costs - relate to inspection, testing, and other activities intended to uncover defective
products or services, or to assure that there are none. They include the cost of inspectors,
testing, test equipment, labs, quality audits, and field testing.

Prevention Costs - relate to attempts to prevent defects from occurring. They include costs such
as planning and administration systems, working with vendors, training, quality control
procedures, and extra attention in both the design and production phases to decrease the
probability of defective workmanship.

Failure Costs - are incurred by defective parts or products or by faulty services.

Internal Failure - those discovered during the production process.
External Failure - those discovered after delivery to the customer.

Return on Quality (ROQ) – an approach that evaluates the financial return of investments in
quality.

THE EVOLUTION OF QUALITY MANAGEMENT

Prior to the Industrial Revolution, skilled craftsmen performed all stages of production.
A division of labor accompanied the Industrial Revolution; each worker was then responsible for
only a small portion of each product.

Frederick Winslow Taylor, the “Father of Scientific Management,” gave new emphasis to quality
by including product inspection and gauging in his list of fundamental areas of manufacturing
management.

G. S. Radford improved Taylor’s methods. Two of his most significant contributions were the
notions of involving quality considerations early in the product design stage and making
connections among high quality, increased productivity, and lower costs.

In 1924, Bell Telephone Laboratories introduced statistical control charts that could be used to
monitor production.

Around 1930, H. F. Dodge and H. G. Romig, also of Bell Labs, introduced tables for sampling.
World War II caused a dramatic increase in emphasis on quality control. The U.S.
Army refined sampling techniques for dealing with large shipments of arms from many suppliers.
 By the end of the 1940s, the U.S. Army, Bell Labs, and major universities were training
engineers in other industries in the use of statistical sampling techniques.

During the 1950s, the quality movement evolved into quality assurance. In the mid-1950s, total
quality control efforts enlarged the realm of quality efforts from its primary focus on manufacturing
to also include product design and incoming raw materials.

During the 1960s, the concept of “zero defects” gained favor. This approach focused on
employee motivation and awareness, and the expectation of perfection from each employee. It
evolved from the success of the Martin Company in producing a “perfect” missile for the U.S.
Army.
In the 1970s, quality assurance methods gained increasing emphasis in services including
government operations, health care, banking, and the travel industry. Something else happened
in the 1970s that had a global impact on quality. An embargo on oil sales instituted by the
Organization of Petroleum Exporting Countries (OPEC) caused an increase in energy costs, and
automobile buyers became more interested in fuel-efficient, lower-cost vehicles. Japanese auto
producers, who had been improving their products, were poised to take advantage of these
changes, and they captured an increased share of the automobile market. The quality of their
automobiles enhanced the reputation of Japanese producers, opening the door for a wide array
of Japanese-produced goods.
American producers, alarmed by their loss of market share, spent much of the late 1970s and
the 1980s trying to improve the quality of their goods while lowering their costs.
The evolution of quality took a dramatic shift from quality assurance to a strategic approach to
quality in the late 1970s. Up until that time, the main emphasis had been on finding and correcting
defective products before they reached the market.

THE FOUNDATIONS OF MODERN QUALITY MANAGEMENT: THE GURUS

Walter Shewhart.
- Walter Shewhart was a genuine pioneer in the field of quality control, and he became known
as the “father of statistical quality control.”
- He developed control charts for analyzing output of processes to determine when corrective
action was necessary.

W. Edwards Deming
- statistics professor at New York University in the 1940s, went to Japan after World War II to
assist the Japanese in improving quality and productivity.
- The Union of Japanese Scientists, who had invited Deming, were so impressed that in 1951,
after a series of lectures presented by Deming, they established the Deming Prize, which is
awarded annually to firms that distinguish themselves with quality management programs.

Joseph M. Juran
- Juran, like Deming, taught Japanese manufacturers how to improve the quality of their goods,
and he, too, can be regarded as a major force in Japan’s success in quality. Juran viewed quality
as fitness-for-use. He also believed that roughly 80 percent of quality defects are management
controllable; thus, management has the responsibility to correct this deficiency.
- He described quality management in terms of a trilogy consisting of quality planning, quality
control, and quality improvement

Armand Feigenbaum
- Feigenbaum was instrumental in advancing the “cost of non-conformance” approach as a
reason for management to commit to quality.
- He recognized that quality was not simply a collection of tools and techniques, but a “total field.”

- According to Feigenbaum, it is the customer who defines quality.

Philip B. Crosby
- Crosby developed the concept of zero defects and popularized the phrase “Do it right the first
time.” He stressed prevention, and he argued against the idea that “there will always be some
level of defectives.”

Kaoru Ishikawa
- The late Japanese expert on quality was strongly influenced by both Deming and Juran,
although he made significant contributions of his own to quality management.
- Among his key contributions were the development of the cause-and-effect diagram (also
known as a fishbone diagram) for problem solving and the implementation of quality circles,
which involve workers in quality improvement.
- He was the first quality expert to call attention to the internal customer —the next person in the
process, the next operation, within the organization.

Genichi Taguchi
- Taguchi is best known for the Taguchi loss function, which involves a formula for determining
the cost of poor quality.
- The idea is that the deviation of a part from a standard causes a loss, and the combined effect
of deviations of all parts from their standards can be large, even though each individual deviation
is small.

Taiichi Ohno and Shigeo Shingo

- Taiichi Ohno and Shigeo Shingo both developed the philosophy and methods of kaizen, a
Japanese term for continuous improvement (defined more fully later in this chapter), at Toyota.
Continuous improvement is one of the hallmarks of successful quality management.

QUALITY AWARDS
 The Baldrige Award – annual award given by the U.S. government to recognize quality
achievements of U.S. companies.
 The European Quality Award – European award for organizational excellence.
 The Deming Prize - named in honor of the late W. Edwards Deming, is Japan’s highly coveted
award recognizing successful quality efforts.

QUALITY CERTIFICATION
 ISO 9000 – a set of international standards on quality management and quality assurance,
critical to international business.
 ISO 14000 – a set of international standards for assessing a company’s environmental
performance.
 ISO 24700 – a set of international standards that pertains to the quality and performance of
office equipment that contains reused components.

ISO 9000 standards include the following categories:

 System requirements
 Management requirements
 Resource requirements
 Realization of requirements
 Remedial requirements

Eight quality management principles form the basis of the latest version of ISO 9000:
1. A customer focus.
2. Leadership.
3. Involvement of people.
4. A process approach.
5. A system approach to management.
6. Continual improvement.
7. Use of a factual approach to decision making.
8. Mutually beneficial supplier relationships.

The standards for ISO 14000 certification bear upon three major areas: Management systems —
systems development and integration of environmental responsibilities into business planning.
Operations —consumption of natural resources and energy.
Environmental systems —measuring, assessing, and managing emissions, effluents, and
other waste streams.

Total Quality Management

 A philosophy that involves everyone in the organization in a continual effort to
improve quality and achieve customer satisfaction.

ELEMENTS OF TQM
1. Continuous improvement - The philosophy that seeks to improve all factors related to the
process of converting inputs into outputs on an ongoing basis.
Kaizen - refer to continuous improvement.

2. Competitive benchmarking - This involves identifying other organizations that are the best at
something and studying how they do it to learn how to improve your operation.

3. Employee empowerment - Giving workers the responsibility for improvements and the
authority to make changes to accomplish them provides strong motivation for employees.

4. Team approach - The use of teams for problem solving and to achieve consensus takes
advantage of group synergy, gets people involved, and promotes a spirit of cooperation and
shared values among employees.

5. Decisions based on facts rather than opinions - Management gathers and analyses data as a
basis for decision making.

6. Knowledge of tools - Employees and managers are trained in the use of quality tools.

7. Supplier Quality - Suppliers must be included in quality assurance and quality improvement
efforts so that their processes are capable of delivering quality parts and materials in a timely
manner.

8. Champion - A TQM champion’s job is to promote the value and importance of TQM principles
throughout the company.

9. Quality at the source - Quality at the source refers to the philosophy of making
each worker responsible for the quality of his or her work.
10. Suppliers - are partners in the process, and long-term relationships are encouraged.

Obstacles to Implementing TQM

1. Lack of a companywide definition of quality.
2. Lack of a strategic plan for change.
3. Lack of a customer focus.
4. Poor intraorganizational communication.
5. Lack of employee empowerment.
6. View of quality as a “quick fix”.
7. Emphasis on short-term financial results.
8. Inordinate presence of internal politics and “turf ” issues.
9. Lack of strong motivation.
10. Lack of time to devote to quality initiatives.
11. Lack of leadership.

PRODUCTIVITY - the quantitative relation between what we produce and what we use as a resource to produce them,
i.e., the arithmetic ratio of the amount produced (output) to the amount of resources (input).

Factors Influencing Productivity

A. CONTROLLABLE (OR INTERNAL) FACTORS

 1. Product factor - In terms of productivity means the extent to which the product meets output requirements
product is judged by its usefulness.
2. Plant and equipment - These play a prominent role in enhancing the productivity. The increased availability of
the plant through proper maintenance and reduction of idle time increases the productivity.
3. Technology - Innovative and latest technology improves productivity to a greater extent.
4. Material and energy - Efforts to reduce materials and energy consumption brings about considerable
improvement in productivity.
5. Human factors - Productivity is basically dependent upon human competence and skill.
6. Work methods - Improving the ways in which the work is done (methods) improves productivity, work study
and industrial engineering techniques and training are the areas which improve the work methods, which in
term enhances the productivity.
7. Management style - This influence the organizational design, communication in organization, policy and
procedures.

B. UN-CONTROLLABLE (OR EXTERNAL) FACTORS

1. Structural adjustments - Structural adjustments include both economic and social changes.
2. Natural resources - Manpower, land and raw materials are vital to the productivity improvement.
3. Government and infrastructure - Government policies and programmes are significant to productivity practices
of government agencies, transport and communication power, fiscal policies (interest rates, taxes) influence
productivity to the greater extent

Total Productivity Measure (TPM)

Partial Productivity Measures (PPM)

Productivity Improvement Techniques

(A) TECHNOLOGY BASED

1. Computer Aided Design (CAD), Computer Aided Manufacturing (CAM), and Computer Integrated Manufacturing
Systems (CIMS)

CAD refers to the design of products, processes or systems with the help of computers.

CAM is very much useful for design and control manufacturing.

2. Computer integrated manufacturing - is characterized by automatic line balancing, machine loading (scheduling
and sequencing), automatic inventory control and inspection.

(B) EMPLOYEE BASED

1. Financial and non-financial incentives at individual and group level.

2. Employee promotion.
3. Job design, job enlargement, job enrichment and job rotation.
4. Worker participation in decision-making 5. Quality Circles (QC), Small Group Activities (SGA)
6. Personal development.

(C) MATERAL BASED

1. Material planning and control
2. Purchasing, logistics
3. Material storage and retrieval
4. Source selection and procurement of quality material
5. Waste elimination.

(D) PROCESS BASED

1. Methods engineering and work simplification

2. Job design evaluation, job safety

3. Human factors engineering.

(E) PRODUCT BASED

1. Value analysis and value engineering

2. Product diversification
3. Standardization and simplification
4. Reliability engineering
5. Product mix and promotion.

(F) TASK BASED

1. Management style
2. Communication in the organization
3. Work culture
4. Motivation
5. Promotion group activity
QUALITY TOOLS

1. Flowcharts - visual representation of a process. As a problem-solving tool, a flowchart can

help investigators in identifying possible points in a process where problems occur.
2. Check Sheets - a simple tool frequently used for problem identification. Check sheets provide
a format that enables users to record and organize data in a way that facilitates collection and
analysis. This format might be one of simple checkmarks. Check sheets are designed on the
basis of what the users are attempting to learn by collecting data.
3. Histograms - useful in getting a sense of the distribution of observed values. Among other
things, one can see if the distribution is symmetrical, what the range of values is, and if there are
any unusual values.
4. Pareto Analysis - a technique for focusing attention on the most important problem areas. The
Pareto concept, named after the 19th-century Italian economist Vilfredo Pareto, is that a relatively
few factors generally account for a large percentage of the total cases.
5. Scatter Diagrams - useful in deciding if there is a correlation between the values of two
variables. A correlation may point to a cause of a problem.
6. Control Charts - used to monitor a process to see if the process output is random. It can help
detect the presence of correctable causes of variation.
7. Cause-and-Effect Diagrams - offers a structured approach to the search for the possible
cause(s) of a problem. It is also known as a fishbone diagram because of its shape, or an
Ishikawa diagram, after the Japanese professor who developed the approach to aid workers
overwhelmed by the number of possible sources of problems when problem solving.
8. Run Charts - used to track the values of a variable over time. This can aid in identifying trends
or other patterns that may be occurring.

Methods for Generating Ideas

1. Brainstorming - a technique in which a group of people share thoughts and ideas on problems
in a relaxed atmosphere that encourages unrestrained collective thinking.
2. Quality Circles - Groups of workers who meet to discuss ways of improving products or
processes.
3. Benchmarking - an approach that can inject new energy into improvement efforts. The
process of measuring an organization’s performance on a key customer requirement against the
best in the industry, or against the best in any industry. Its purpose is to establish a standard
against which performance is judged, and to identify a model for learning how to improve.

Triggers for Benchmarking

1. Problem based benchmarking – arises out of a problem in the organization.
2. Process based benchmarking – initiated as a part of process improvement strategy
organization.

Types of Benchmarking
1. Internal - a process in which a company or an organisation looks within its own business to try
and determine the best practice or methodology for conducting a particular task. The aim is to
find the best practice available to get the job done with minimum effort or resources.
2. Competitive - the process of comparing your company against a number of competitors using
a set collection of metrics. This is used to measure the performance of a company and compare it
to others over time.
3. Functional - involves comparing results across different industries and processes by utilizing
similarities in functional capacities. Functional benchmarking serves as a way to provide
information on industry trends.
4. Generic - broadly conceives how unrelated business functions or processes may be carried
out in similar or identical manners regardless of the field your company belongs to.
Other Types of Benchmarking
5. Process Benchmarking - designed to help you gain a more accurate understanding of how
your competitors’ processes compare to your own.
6. Strategic Benchmarking - pertains to your business strategies and how these may help you
gain an edge in your field.
7. Performance Benchmarking - This is a relatively more difficult type of benchmarking because
you need to understand key performance metrics (e.g., number of employees retained in a year)
and processes to conduct it.

Importance of Benchmarking
1. Increases Performance
2. Cost-Effective
3. Enhances Quality
4. Explore Growth Opportunities
5. Secure Market Position
6. Improve coordination In The Company

5 Steps of Benchmarking Process

1. Planning
2. Collection of Information
3. Analyze the Data
4. Implement
5. Monitor

Quality Function Deployment (QFD)

 A process and set of tools used to effectively define customer requirements and
convert them into detailed engineering specifications and plans to produce the
products that fulfil those requirements.
 QFD was first developed in Japan by Yoji Akao in the late 1960s while working for
Mitsubishi’s shipyard.
 It was later adopted by other companies including Toyota and its supply chain.
 In the early 1980s, QFD was introduced in the United States mainly by the big
three automotive companies and a few electronics manufacturers.

Benefits of Using QFD

 Customer Focused
 VOC (Voice of Customer) Competitor Analysis
 Shorter Development Time and Lower Cost
 Structure and Documentation
Phases of QFD

1. The Product Definition Phase begins with collection of VOC and translating the
customer wants and needs into product specifications. It may also involve a
competitive analysis to evaluate how effectively the competitor’s product fulfils
the customer wants and needs.
2. During the Product Development Phase, the critical parts and assemblies are
identified. The critical product characteristics are cascaded down and
translated to critical or key part and assembly characteristics or specifications.
3. Process Development Phase, the manufacturing and assembly processes are
designed based on product and component specifications.
4. Process Quality Control: Prior to production launch, the QFD process identifies
critical part and process characteristics.