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Chapter 1- Introduction to Quality
Advertising Marketing (Far Eastern University)
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Chapter 1- Introduction to Quality
After you read this chapter, you should be able to
 Uncover the basic concept of total quality.
 Define total quality management.
 Know the quality and competitive advantage.
 Describe the importance of TQM in manufacturing and service organization.
 Know the competitive advantage and personal values towards quality within
the organization.
Core Values
“For I know the plans I have for you, declares the LORD, plans for welfare
and not for evil, to give you a future and a hope.” - Jeremiah 29:11
Learning Activities and resources
J.R. Evans, W.M. Lindsay. (2019). Total Quality Management. Cengage
DA Collier, J. Evans, W. Lindsay. (2020). Operations Management and Total
Quality Management. Cengage
Introduction
The first chapter provides an overview of the importance of quality in a
rapidly changing business environment. That has become a cliché. Perhaps
we should use the phrase: “a chaotic business environment.” Students at
both the undergraduate and graduate level are likely to be taking this course
as an elective, so you may tend to assume that they are "self-motivated" by
simply being there. This is not necessarily the case. As business and industry
evolves, the terms “performance management” and “performance
excellence” have begun to be used as synonyms for older terms, such as
TQM and total quality. Whatever the vocabulary, you should try to "hook"
your students on the excitement of quality and performance excellence by
using a variety of teaching methods and media.
This chapter also introduces the concept of quality in production and service
systems and develops the idea that quality is central to effective operation of
these systems. Students should be encouraged to develop an understanding
of the fact that quality is not an "add-on" to organizational processes, but
that it is "a way of doing business."
The Business Imperative
“The first job we have is to turn out quality merchandise that consumers will
buy and keep on buying. If we produce it efficiently and economically, we
will earn a profit, in which you will share.” - William Cooper Procter
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Importance of Quality
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Quality is uniquely positioned to accelerate organizational growth
through better execution and alignment
Quality provides the voice of the customer critical to developing
innovative products and services.
Quality can provide an organization with a competitive edge
“No quality, no sales. No sales, no profit. No profit, no jobs.”
Quality Profile – Motorola, Inc.
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Leader in the U.S. quality revolution during the 1980s
Pioneer in continual reduction of defects and cycle times
Exceptional practices in managing human assets, sharing data and
information with employees, customers, and suppliers, and aligning all
its business processes with key organizational objectives.
What is quality?
Quality can be a confusing concept, partly because people view quality
subjectively and in relation to differing criteria based on their individual roles
in the production-marketing value chain. In addition, the meaning of quality
continues to evolve as the quality profession grows and matures. For
example, one study that asked managers of 86 firms in the eastern United
States to define quality produced several dozen different responses,
including the following.
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Perfection
Consistency
Eliminating waste
Speed of delivery
Compliance with policies and procedures
Providing a good, usable product
Doing it right the first time
Delighting or pleasing customer
Total customer service satisfaction
Formal Definitions of Quality
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Transcendent Perspective: excellence
Product Perspective: quantities of product attributes
User Perspective: fitness for intended use
Value Perspective: quality vs. price
Manufacturing Perspective: conformance to specifications
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Customer
Perspective:
expectations
meeting
or
exceeding
customer
Customers – Customer driven quality is fundamental to high-performing
organizations. Clearly, meeting the expectations of customers is the goal of
any business.
1. Consumers
Ultimate buyers of goods and services
2. External customers
Business-to-business
3. Internal customers
Anyone who receives goods or services from someone else within an
organization.
Integrating quality perspective in the value chain
Individuals in different business functions—for example, the designer,
manufacturer or service provider, distributor, or customer- speak different
“languages”. Thus, different quality perspective at different points in the
value chain are important to ultimately create and deliver goods and
services that will satisfy customers need and expectations.
Quality Perspectives
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History of Quality Management
As the philosopher George Santayana said, “those who cannot remember the
past are condemned to repeat it.’’ Thus, an understanding of the history of
quality can be quite insightful. Quality has been an important aspect of
production operations throughout the history.
 Ancient History
 Zhou Dynasty in China
 The Age of Craftsmanship
 Skilled workers during the Middle Ages
 Industrial Revolution
 Early 20th Century
 Separate quality departments
 Ford Motor Company
 Statistical methods and quality assurance Professional societies
and publications
 Post World War II
 Evolution of quality management in Japan
 W. Edwards Deming and Joseph Juran
 U.S. “Quality Revolution”
 Quality crisis around 1980
 Growth of product quality awareness in manufacturing industries
 Early Successes
 Malcolm Baldrige National Quality Award (1987)
 Books, consulting, training
 From Product Quality to Total Quality Management
 “Little Q” vs. “Big Q” and TQM
 Management Failures
 Cynicism and disinterest
 “No, TQM isn’t dead. TQM failures just prove that bad
management is still alive and kicking.”
 Performance Excellence
 Focus on customer value, organizational sustainability,
improvement
of
effectiveness
and
capabilities,
and
organizational and personal learning.
 Emergence of Six Sigma
 a customer-focused, results-oriented approach to business
improvement
 Current and future challenges
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 Continue to apply the principles of quality and performance
excellence.
 Quality is “a race without a finish line.”
Growth of Modern Quality Management
Contemporary Influences on Quality
In 2011, the American Society for quality identified eight key forces that will
influence the future of quality.
1. Global Responsibility- an organization must be fully aware of global
impact of its local decisions and realize that as demand grows for the
planet’s finite resources, waste is increasingly unacceptable. Global
responsibility also involves, labor practices, human rights, consumer
rights, fair operating practices, and contribution to society.
2. Consumer awareness- With today’s technology such as internet,
twitter, facebook and Instagram, consumer have access to a wealth
information on which to make purchasing decision.
3. Globalization- Globalization no longer means just an opportunity for
organizations to enter new markets. Today, firms must contend with a
growing number of competitors and sources of lower-cost labor and
assume the risks associated with global supply chains.
4. Increasing rate of change- Technology has shifted the rate of
change into an entirely new gear, which brings with its opportunities
and threats.
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5. Workforce of the future- Competition for talent will increase, and
along with technological advances, will change how and where work is
done.
6. Aging population- as people live longer, organizations face higher
cost for healthcare and social welfare program.
7. Twenty-first century quality- quality is not the same as it was 50
years ago, even five years ago. Quality is moving beyond the
organization’s walls to encompass a customer’s entire experience
either the organization rather that just the quality of the product or
service.
8. Innovation- according to study, innovation is ‘’the pursuit of
something different and exciting.’’ Innovation lies at the heat of
organizational survival. As the study states, “if the innovation means
the ability of a company to anticipate customer needs—expressed or
unexpressed, known or unknown—and bring products or services to
the marketplace that excite customers, then clearly innovation in the
fuel of growth in today’s changing world, and more so tomorrow.”
These eight forces will impact how organizations configure themselves, how
managers plan and lead, and how all workers will perform to achieve quality.
As ASQ noted “Quality should shape society. Ultimately, quality methodology
will be used to build a better world.”
Manufacturing Systems
Quality management is rooted in manufacturing; therefore, that is where we
will begin. In image below, it illustrates a typical manufacturing system and
the key relationships among its function.
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Quality in Marketing
Marketing and sales personnel are responsible for determining the needs and
expectations of consumers.
Quality in Product Design
Product design and engineering functions develop technical specifications for
products and production processes to meet the requirements determined by
the marketing function.
Quality in Purchasing
A purchasing agent should not simply be responsible for low-cost
procurement but should maintain a clear focus on the quality of purchased
goods and materials.
Quality in Production Planning and Scheduling
Poor quality often results from time pressures caused by insufficient planning
and scheduling.
Quality in Manufacturing and Assembly
Both technology and people are essential to high-quality manufacturing.
Quality in Process Design
Manufacturing processes must be capable of producing output that meets
specifications consistently.
Quality in Finished Goods Inspection and Testing
The purposes of final product inspection are to judge the quality of
manufacturing, to discover and help to resolve production problems that may
arise, and to ensure that no defective items reach the customer.
Quality in Installation and Service
Service after the sale is one of the most important factors in establishing
customer perception of quality and customer loyalty.
Quality in Services
 Service is defined as “any primary or complementary activity that does
not directly produce a physical product – that is, the non-goods part of
the transaction between buyer (customer) and seller (provider).”
Critical Differences Between Service and Manufacturing
 Customer needs and performance standards are more difficult to
identify and measure.
 Services requires a higher degree of customization.
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Output is intangible.
Services are produced and consumed simultaneously.
Customers are often involved in actual process.
Services are more labor-intensive than manufacturing.
Services handle large numbers of transactions.
Components of Service Quality
 People
 “If we take care of our people, they will take care of our
customers.”
 Technology
 Computers and information technology
 E-commerce
Quality in Business Support Functions
 Finance and Accounting. The finance function is responsible for
obtaining fund, controlling their use, analyzing investment
opportunities, and ensuring that the firm operates cost-effectively and
ideally profitably. Financial and accounting personnel who have
contacts with the customers can directly influence the service their
company provides. For example, in many countries, employees chart
invoice accuracy, the time needed to process invoices, and the time
needed to pay bills. In addition, they can apply quality improvement
techniques to improve their own operations.
 Legal Services. A firm’s legal department attempts to guarantee that
the firm complies with laws and regulations regarding such things as
product labeling, packaging, safety, and transportation; designs and
words its warranties properly; satisfies its contractual requirements;
and has proper procedures and documentation in place in the event of
liability claims against it. The rapid liability suits have made legal
services and important aspect of quality.
 Quality Assurance. Because some managers lack the technical
expertise required for performing needed statistical test or data
analyses, technical specialist usually in the “Quality Assurance
Department’ they are the who assist the manger in these task. Quality
assurance specialist perform special statistical studies and analyses
and may be assigned to work with any of the manufacturing or
business support functions. A customer driven quality focus must
involve every function in the organization, including manufacturing,
service and business support functions. Quality is needed everyone’s
responsibility.
Competitive Advantage
Competitive Advantage denotes firm’s ability to achieve market superiority.
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 Is driven by customer wants and needs.
 Makes significant contribution to business success.
 Matches organization’s unique resources with opportunities.
 Is durable and lasting.
 Provides basis for further improvement.
 Provides direction and motivation.
Quality supports each of these characteristics.
Quality and Profitability
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Quality and Business Results
 Hendricks and Singhal study of quality award winners
 Performance results of Baldrige Award recipients
Example: The overall Net Promoter (NP) scores (a loyalty metric defined by
the level of repeat sales and referrals) for MEDRAD, a manufacturer of
medical imaging devices, were consistently 60 percent or higher compared
to the 50 percent or higher marks for other organizations nationwide.
MEDRAD’s global customer satisfaction ratings using the NP system steadily
increased from 50 percent to 63 percent, surpassing the best-in-class
benchmark of 50 percent.
Quality and Personal Values
 Personal initiative has a positive impact on business success
 Quality-focused individuals often exceed customer expectations
 Quality begins with personal attitudes
 Attitudes can be changed through awareness and effort (e.g., personal
quality checklists)
“Unless quality is internalized at the personal level, it will never become
rooted in the culture of an organization.”
“Thus, quality must begin at a personal level (and that means you!).”
Review Questions!
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4.
Discuss the importance of Quality in organization.
Discuss the manufacturing system.
Discuss the 8 Contemporary Influences on Quality.
Explain how each major function of a manufacturing system contributes
to total quality.
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