Quality Management
Quality is the ability of a product or service to
consistently meet or exceed customer
expectations.
Dimensions of Quality
• Performance - main characteristics of the
product/service
• Special features - extra characteristics
• Conformance - how well product/service match to
customer’s expectations
• Aesthetics - appearance, feel, smell, taste
• Durability - useful life of the product/service
• Reliability - consistency of performance
• Service after sale - handling of customer
complaints or checking on customer satisfaction
Examples : Dimensions of Quality
Dimension
(Product)
Automobile
1. Performance
Everything works,
Ride, handling, grade of
materials used
2. Aesthetics
(Service)
Auto Repair
All work done, at agreed
price
Friendliness, courtesy,
Competency, quickness
Interior design, soft touch Clean work/waiting area
3. Special features Cellular phone, CD
Convenience
player
High tech
Location, call when ready
Computer diagnostics
4. Safety
Separate waiting area
Antilock brakes, airbags
Examples : Dimensions of Quality
Dimension (Product)
Automobile
(Service)
Auto Repair
5. Reliability
Infrequency of breakdowns
Work done correctly,
ready when promised
6. Durability
Useful life in miles, resistance
to rust & corrosion
Work holds up over
time
7. Perceived
quality
Top-rated car
Award-winning service
department
8. Service after Handling of complaints and/or Handling of complaints
sale
requests for information
The Consequences of Poor Quality
• Loss of business
• Liability
• Low productivity
Costs of Quality
• Failure Costs
– Internal
– External
• Appraisal Cost
• Prevention Costs
Costs of Quality
• Failure Costs - costs incurred by defective
parts/products or faulty services.
• Internal Failure Costs
Costs incurred to fix problems that are detected before
the product/service is delivered to the customer.
Examples; Material, labor and capacity loss,
scheduling difficulties for re-work
• External Failure Costs
All costs incurred to fix problems that are detected after
the product/service is delivered to the customer.
Examples; Returned products, loss of goodwill,
liability, claims
Costs of Quality
• Appraisal Costs
Cost of inspecting material, parts, and products
to to ensure their conformance with quality standards
Example; labor and material cost of inspecting
equipment, cost of interruption in production
• Prevention Costs
Cost of preventing defects from occurring
Example; Total Quality Management costs
Key Contributors to Quality Management
Contributor Known for
Quality
Deming
14 points; special & common causes of
variation
Juran
Quality is fitness for use; quality trilogy
Crosby
Quality is free; zero defects
Ishikawa
Cause-and effect diagrams; quality
circles
Deming
A professor of statistics in 1940s.
Went to Japan after WWII to assist Japanese in improving quality
and productivity.
Japanese established Deming prize for quality.
Deming was unknown in his home country until 80s
He developed a famous list of 14 points he believed were key for
quality in organizations.
His message was; System is the cause for inefficiency and poor
quality not employees. It is management’s responsibility to
improve the system.
The essence of his 14 points are; Constancy of purpose,
continuous improvement, profound knowledge.
Deming : Profound Knowledge
Profound knowledge is; appreciation for the system, theory of
variation, theory of knowledge, and psychology.
Appreciation for the system;.Every one in the organization
working to achieve overall optimization. Management most
eliminate internal competition.
Theory of Variation; Variation reduction is an important key to
quality. There are two types of variations; random and correctable.
We should concentrate on the later.
Theory of Knowledge; Knowledge comes from theory. Learning
can not occur in an organization without a theory of knowledge.
Psychology; Workers want to create and learn. Management’s
greatest challenge is to motivate workers to contribute their
common effort to achieve a common goal.
Deming’s 14 Points
1.Constancy of purpose toward improvement.
2.We can no longer live with defects and delays.
3.Forget mass inspection, rely on statistical process control (SPC).
4. Eliminate unqualified suppliers. Not just price, but Price + quality.
5.Work continually on the system, identify problems, resolve them.
6.Institute modern methods of training on jobs.
7.Responsibility of foremen is not productivity but quality, which in turn
improves productivity. Management takes immediate action on foremen
requests regarding improvement in elements of the system.
8.Drive out fear, so that every one may work effectively for the company.
9.Break down barriers between departments. Motivate team work.
10.Do not ask for more productivity, without providing methods.
11.Eliminate work standards that prescribe numerical quotas.
12.Break down barriers between hourly and permanent workers.
13.Institute a vigorous program for education and retraining.
14.Top management will push every day on the above 13 points.
Juran
He made his first trip to Japan after publication of his Quality Control
Handbook in 1951.
His method is close to that of Deming, but with two main differences.
1) Management of quality is not very difficult.
2) He places less emphasize on SPC.
His initiatives;
Quality begins by knowing what customer wants. Quality is fitness-for
use.
Almost 80% of quality defects can be controlled by commitment of
management to continuos improvement.
Quality management is 1) quality planning, 2) quality control, and 3)
quality improvement.
He showed high cost of low quality, and potentials of cost reduction
through quality improvement.
Quality Awards
Baldrige Award
Deming Prize
Malcolm Baldrige National Quality Award
1 Leadership (110 points)
2 Strategic Planning (80 points)
3 Customer and Market Focus (80 points)
4 Information and Analysis (80 points)
5. Human Resource Development and
Management (100 Points)
6 Process Management (100 points)
7 Business Results (450 points)
TOTAL = 1000
Baldrige
Award
Characteristics of Baldrige Award Winners
• The companies formulated a vision of what they
thought quality was and how they would achieve
it.
• Senior management was actively involved.
• Companies carefully planned and organized their
quality effort to be sure it would be effectively
initiated.
• They vigorously controlled the overall process.
The Deming Prize
• Honoring W. Edwards Deming
• Japan’s highly coveted award
• Main focus on statistical quality
control
Deming
Prize
International Organization for Standardization
• ISO Series
• Set of international standards on quality
management and Quality assurance that are critical
to international business
• Requires firms to document every thing they do that
affects the quality of goods and services.
• Document every step (incoming raw materials,
product design, in-process monitoring and so forth) to
be able to identify those areas that are causing quality
problems and correct them.
ISO 9000 Registration Process
• When an organization feels that its quality system is
good enough, it may ask for assessment.
• The audit begins with a review of the company's
quality manual. The audit team checks to see that the
documented quality system meets the requirement of
ISO 9000 and that the organization is practicing what
is documented.
• When the registrar is satisfied with the
recommendation of the audit team, it issues a
registration document to the company.
ISO 9000 Series
ISO 9000
ISO 9001
ISO 9002
ISO 9003
ISO 9004
Helps companies determine which standard of
ISO 9001, 9002, and 9003 applies
Outlines guidelines for companies that engaged in
design, development, production, installation,
and servicing of products or service
Similar to 9001, but excludes companies
engaged in design and development
Covers companies engaged in final inspection
and testing
The guidelines for applying the elements of the
quality management system
Reading
The cost of quality, 401-402
Quality gurus 402-406