Quality Management

Definition of Quality:
• Quality is the totality of features and
characteristics of a product or service that bear
on its ability to satisfy stated or implied needs.
• Some goals of quality programs include:
– Fitness for use. (Is the product or service capable of
being used?)
– Fitness for purpose. (Does the product or service
meet its intended purpose?)
– Customer satisfaction. (Does the product or service
meet the customer's expectations?)
– Conformance to the requirements. (Does the product
or service conform to the requirements?)
Quality Management Processes
• Quality Planning
• Quality Assurance
• Quality Control
 Quality Planning
• The process of identifying which quality standards are
relevant to the project and determining how to satisfy
them.
• Input includes: Quality policy, scope statement, product
description, standards and regulations, and other
process Output.
• Methods used: benefit / cost analysis, benchmarking,
flowcharting, and design of experiments
• Output includes: Quality Management Plan, operational
definitions, checklists, and Input to other processes.
 Quality Assurance
• The process of evaluating overall project
performance on a regular basis to provide
confidence that the project will satisfy the
relevant quality standards.
• Input includes: Quality Management Plan,
results of quality control measurements, and
operational definitions.
• Methods used: quality planning tools and
techniques and quality audits.
• Output includes: quality improvement.
 Quality Control
• The process of monitoring specific project results to
determine if they comply with relevant quality standards
and identifying ways to eliminate causes of
unsatisfactory performance.
• Input includes: work results, Quality Management Plan,
operational definitions, and checklists.
• Methods used include: inspection, control charts,
pareto diagrams, statistical sampling, flowcharting, and
trend analysis.
• Output includes: quality improvements, acceptance
decisions, rework, completed checklists, and process
adjustments
 Major Approaches to Quality and
QM
• Deming
• Juran
• Crosby
• TQM
• Six Sigma
• ISO 9000
 W Edwards Demming on Quality
• Quality is an attribute of a product or service that
can only be defined by the customer.
• Because of this its meaning is relative
• Quality or lack of it is one of the outcomes of the
specific business process that produces a
product or service
• Quality is produced by proper execution of such
a process
• The job of quality management is to provide the
system and the leadership to facilitate such
proper execution
 Joseph M. Juran: On Quality
• Quality is “fitness for use”
• Balance between product features and products
free from deficiencies
• Features must meet customer expectations
• Absence of deficiency is as essential as desired
features in producing customer satisfaction
• So the ultimate test of quality is fitness for use
by customers as reflected by customer
satisfaction
 Juran: The Trilogy of
Quality Management
• Quality Planning
– developing a process to achieve goals
involving customer satisfaction
• Quality Control
– holding onto gains, controlling
variation,preventing waste
• Quality Improvement
– lowering cost of poor quality achieving
innovation in performance
 Philip B. Crosby: Quality
• Conformance to requirements
• Must be defined in measurable terms and
expressed as a clear target
• Either present or not present
• The Cost of Quality (COQ) = Price of
Conformance (POC) + Price of Non-
Conformance (NPOC)
• POC is cost of getting things done right the first
time
• NPOC is the cost of waste
 Crosby: Four Absolutes of Quality
• Conformance to the requirements: This idea of quality
must be integrated into the enterprise
• The system of quality is prevention (eliminating errors
before they occur)
• The performance standard is zero defects
• The measure of quality is the PONC: the lower the
PONC the more widespread the quality
• These four absolutes must be attained through strong
discipline, complete leadership commitment, substantial
resource allocation for training, tools, and appropriate
personnel, and Crosby’s 14-step approach to achieving
conformance.
Total Quality Management: Quality
• “we define quality as consistently producing
what the customer wants while reducing errors
before and after delivery to the customer. More
importantly, however, quality is not so much an
outcome as a never ending process of
continually improving the quality of what your
company produces.” David Chaudron
qualitymanagement.com
• Close derivative of Deming’s approach to Quality
 Total Quality Management
• “A structured system for satisfying employees,
customers, and suppliers by integrating the business
environment, continuous improvement, and
breakthroughs with development, improvement, and
maintenance cycles while changing organizational
culture” (from iqd.com).
• Great emphasis on needs and requirements analysis
• Uses a systems approach with strong emphasis onboth
cultural and technological elements
• Strong emphasis on prevention and role of
• leadership
• Closely related to Deming’s approach to QM
 Six Sigma: Quality
• The value added by a productive endeavour
• Potential quality is the maximum possible value
added per unit of input.
• Actual quality is the current value added per unit
of input
• The difference between the two is waste Six
Sigma is focused on reducing waste, cycle time,
defects, and those costs that do not add value
• Goal is virtually error-free performance
 Six Sigma: Key Elements
• Implements “proven” quality principles and and a select
few of the myriad QM techniques
• Performance is measured by the sigma level measure of
variability in the company’s business processes
• Uses a Define-Measure-Analyze-Improve-Control
(DMAIC) model
• Define goals
• Measure existing system and processes
• Analyze (including stat analysis) & develop plan closing
gap
• Improve system (Use stat methods to validate)
• Control the new system by institutionalizing it through
new policies and rules
 Six Sigma: Implementation
approach
• Senior leadership training in principles & tools for organization
success, followed by SLs directing development of management
infrastructure & innovation-friendly culture supporting Six Sigma.
• Develop systems establishing close communication with customers,
employees, & suppliers. Includes rigorous methods and ways of
overcoming cultural, policy, and procedural barriers
• Rigorously assess training needs, provide remedial basic skills
education, and comprehensive training in systems improvement
tools, techniques, and philosophies
• Develop framework for continuous process improvement along with
system of indicators for monitoring progress and success.
• Projects for improving business performance linked to measurable
financial results.
• Six Sigma projects conducted by individual employees & teams led
by change agents (Master Black, Black, and Green Belts)
 ISO 8402 and 9000: Quality and
QM
• “The totality of characteristics of an entity that
bear on its ability to satisfy stated and implied
needs” ISO 8402
• Quality management: activities performed to
formulate and implement policies and programs
intended to achieve quality.
• Examples:
– quality planning,
– quality control,
– quality assurance, and
– quality improvement
 ISO 9000: Eight Principles
• Customer Focus (on needs and requirements)
• Leadership (establish unity of purpose, direction,
environment for participation)
• Involvement of people (full)
• Process Approach (managing activities & resources)
• Systems Approach to Management (of inter-related
processes)
• Continual Improvement (of processes and performance)
• Factual Approach to Decision Making (analysis of
data/info)
• Mutually Beneficial supplier relationships
 Commonalities in QM Approaches
• QM approaches tend to view quality in terms of value
produced by business processes for customers
• Reshape and control process to get quality
• Tend to take a systems, but not a complex adaptive
systems approach
• Emphasize scientific approaches, empirical investigation,
statistical analysis, formal knowledge processing
• Emphasize metrics and measurement
• View QM as an integrated set of activities designed to
have a direct impact on all business processes and their
inter-relations
 Commonalities in QM Approaches
• Use Technological and particularly IT tools and
techniques
• Employ a wide range of analytical techniques and also
social interaction and human intervention techniques
• Emphasizes strongly the elimination of errors before they
happen: prevention
• Strong emphasis on cause-and-effect analysis
suggesting a deterministic view of quality
• Strong emphasis on leadership and its role in QM
• Widespread emphasis on organizational learning
framework to produce knowledge needed for achieving
quality, e.g. PDSA.
 Quality Concepts

• Zero Defects
– Implies that there is no tolerance for errors within the system.
– The goal of all processes is to avoid defects in the product or
service.
– Similar to six sigma: almost zero defects
• The Customer is the Next Person in the Process
– The internal organization has a system that ensures the product
or service is transferred to the next person in the process in a
complete and correct manner.
– The product or service being built is transferred to another
internal party only after it meets all the specifications and all
actions at the current work station.
– Avoids incorrectly assembled components and poor
workmanship.
 Quality Concepts

• Do the Right Thing Right the First Time (DTRTRTFT)

– Implies that it is easier and less costly to do the work right the
first time than it is to do it the second time.
– Entails the training of personnel to ensure sufficient skills and
tools to correctly complete the work.
• Continuous Improvement Process (CIP) (From Japanese
word, Kaizen)
– A sustained, gradual change to improve the situation.
– Differs from innovation -- does not make a sudden jump to a
plateau where it matures over time.
– Focuses on 11 principles: constancy of purpose, commitment to
quality, customer focus and involvement, process orientation,
continuous improvement, system-centered management,
investment in knowledge, teamwork, conservation of human
resources, total involvement, and perpetual commitment.
 Project Characteristics/Attributes
that bear on quality
• Producibility (technology required)
• Ability of a product or service to be produced within the
existing technology, human resources, skills, knowledge,
and materials at a cost compatible with market
expectations.
• Producibility is one of the most critical aspects of
developing any new product.
• Usability (effort expended to use)
• The ability of a product to perform its intended function
for the specified user under the prescribed conditions.
• Usability is determined by examining performance,
function and condition of a product.
 Project Characteristics/Attributes
that bear on quality
• Reliability (MTBF)
• The degree to which a unit of equipment performs its
intended function under specified conditions for a
specified period of time.
• Computed by 2 methods of Mean-Time-Between-Failure
(MTBF):
– Predicted MTBF: Based on a mathematical computation of a
component failure using a tree diagram to determine sequential
failure aspects of the component rated periods. Least desirable
method because it cannot account for environmental variations
that can degrade components to lower rates.
– Actual MTBF: Use of field collected data to compute the failures
under realistic operating conditions to find the average time
between failure. The actual reliability will seldom be the same as
the predicted reliability
 Project Characteristics/Attributes
that bear on quality
• Maintainability (Mean-Time-To-Repair: MTTR)
• The ability of a unit to be restored within a specified time to its
performance capability under the environmental operating
conditions within a specified, average period of time.
• Availability (Probability of performance)
• The probability of a product being capable of performing a required
function under the specified conditions when called upon.
• The key parts of availability are reliability and maintainability.
• Operability (Expected conditional use)
• The ability of a product to be operated by human resources for
specified periods of time under given conditions without significant
degradation of the output.
• Flexibility (Expected variable use)
• The ability of a product to be used for different purposes at different
capacities and under different conditions.
 Project Characteristics/Attributes
that bear on quality
• Social Acceptability (Environment and safety)
– The degree of compatibility between the
characteristics of a product or service and the
prevailing values and expectations of the relevant
society
– The degree to which a public accepts a product for
use.
• Affordability (Return for quality required)
– The ability to develop, acquire, operate, maintain, and
dispose of a product over its life.
 Cost of Quality
• Cost of quality is the total price of all efforts to achieve product or
service quality. This includes all work to build a product or service
that conforms to the requirements as well as all work resulting from
nonconformance to the requirements.
• The typical project should have a goal of between 3-5% of the total
value as the cost of a quality program depending on the type of
project and its total dollar value.
– Cost to build right the first time
– Training programs
– Statistical Process Control (SPC) Costs
• Cost of a quality system is often viewed as a negative cost because
errors in work have been traditionally accepted as a cost of doing
business.
•
 Cost of Conformance
• Planning
• Training and indoctrination
• Process control
• Field testing
• Product design validation
• Process validation
• Test and evaluation
• Quality audits
• Maintenance and calibration
 Cost of Nonconformance

• Scrap
• Rework
• Expediting
• Additional material or inventory
• Warranty repairs or service
• Complaint handling
• Liability judgments
• Product recalls
• Product corrective actions
•
 Cost of Non-Quality

• Cost of non-quality is estimated to be 12-

20% of sales.
• Waste of time and materials
• Rework of poor quality products
• Additional material
• Delays in schedule
• Product and service image
• Corporate image
 Major Cost Categories of Quality

• Prevention Cost - cost to plan and execute a project so

that it will be error-free
• Appraisal Cost - cost of evaluating the processes and
the Output of the processes to ensure the product is
error-free
• Internal Failure Cost - cost incurred to correct an
identified defect before the customer receives the
product
• External Failure Cost - cost incurred due to errors
detected by the customer. This includes warranty cost,
field service personnel training cost, complaint handling,
and future business losses.
• Measurement and Test Equipment - capital cost of
equipment used to perform prevention and appraisal
activities.
Opportunities for Reducing Cost

• Just-in-Time - concept of zero inventory in a

manufacturing plant. Reduces cost of storing and moving
parts; cost of inventory; cost of parts damaged through
handling, etc.
• Product Life Cycle Cost - concept of reducing overall
product life cycle cost by linking the cost areas of the
product life cycle (R&D, acquisition, and operations and
maintenance) and considering each one's cost
implications for the other.
• Product Maturity - Identifying, documenting, and
correcting failures early helps products achieve stability
earlier in the life cycle.
 Opportunities for Reducing Cost

• Areas of Waste in Projects

– Waste in rejects of completed work
– Waste in design flaws
– Waste in work-in-process
– Waste in motion for manpower (under-trained
employee)
– Waste in management (Improper direction of work)
– Waste in manpower (Misplaced or waiting workers)
– Waste in facilities (Ordering excess material)
– Waste in expenses (Unnecessary meetings, travel)
 Quality and People in Project
Management
• Management defines type and amount of work
• Management is 85% responsible for quality
• The employee can only assume responsibility for
meeting the requirements of completing the work when
the employee:
• Knows what's expected to meet the specifications
• Knows how to perform the functions to meet the
specifications
• Has adequate tools to perform the function
• Is able to measure the performance during the process
• Is able to adjust the process to match the desired
outcome
 Quality and People in Project
Management
• Project quality team consists of:
– Senior Management
– Project Manager
– Project Staff
– Customer
– Vendors, suppliers, and contractors
– Regulatory Agencies
 Quality and People in Project
Management
• Reviews & Audits
– Management reviews determine the status, progress made,
problems, and solutions
– Peer reviews determine whether proposed or completed work
meets the requirements
– Competency center reviews are used to validate documentation,
studies, and proposed technical solutions to problems.
– Fitness reviews and audits determine the fitness of a product or
part of a project. (addresses specific issues)
• The collection of quantitative data for statistical analysis
is the basis for proactive Management by FACT rather
than by EXCEPTION. Management by exception lets
errors and defects happen before Management
intervention.