LESSON 8 – QUALITY AND TOTAL QUALITY
MANAGEMENT
Quality
 The degree to which performance of a product or
service meets or exceeds customer expectations.
 It means putting customer need first before profit.
 The definition depends on the point of view of who
is defining it. Quality may be associated with:
- Product brand
- Performance to standards
- Durability
- Design/features
- Price
- Satisfaction to customers
TOTAL QUALITY MANAGEMENT
Conformance to specification
 Measures how well the product or service meets
the targets and tolerance determined by its
designers.
Fitness to use
 Evaluates how well the product performs for its
intended use.
Value for price paid
 Defines quality in terms of product or service
usefulness for the price paid.
Support services
 The support provided after purchase of the
product.
Psychological criteria
 Focuses on judgmental factors contributing to the
evaluation of what constitutes an excellent
product or service.
DIMENSIONS OF QUALITY
Manufacturing Organization
1. Conformance to specifications—how well a
product corresponds to design specifications.
2. Performance—main characteristics of the
product.
3. Reliability—dependable performance.
4. Features—characteristics of the design.
5. Durability—ability to perform over time.
6. Serviceability—handling of complaints/repairs. *
7. Aesthetics—appearance, feel, smell, taste.
8. Perceived quality—indirect evaluation of quality
(e.g., reputation).
9. Consistency—quality doesn’t vary.
Service Organization
1. Intangible factors
2. Consistency—the ability to provide the same
level of good quality repeatedly.
3. Responsiveness to customer needs—the
willingness of service providers to help customers
in unusual situations and to deal with problems.
4. Courtesy/friendliness—the way customers are
treated by employees who come into contact.
5. Timeliness and promptness—the speed with
which service is delivered.
6. Atmosphere – vibes of the service.
7. Dedication – perseverance of workers. *
8. Expectations—meet (or exceed) customer
expectations.
9. Convenience—the availability and accessibility of
the service.
10. Reliability—the ability to perform a service
dependably, consistently, and accurately.
11. Assurance—the
knowledge
exhibited
by
personnel who come into contact with a customer
and their ability to convey trust and confidence.
12. Tangibles—the physical appearance of facilities,
equipment, personnel, and communication
materials.
8 QUALITY MANAGEMENT PRINCIPLES
Based the latest version of ISO 9000
1. Customer focus
2. Leadership
3. Involvement of people
4. Process approach
5. System approach to management
6. Continual improvement
7. Use of factual approach to decision-making
8. Mutually beneficial supplier relationships
THE DETERMINANTS OF QUALITY
The degree to which a product or a service successfully
satisfies its intended purpose has four primary
determinants:
1. Design.
2. How well the product or service conforms to the
design.
3. Ease of use.
4. Service after delivery.
Quality of design
 Intention of designers to include or exclude
features in a product or service.
Quality of conformance
 The degree to which goods or services conform
to the intent of the designers.
CONSEQUENCES OF POOR QUALITY
1. Loss of business
2. Liability
3. Productivity
4. Cost
COST OF QUALITY
Prevention cost
 All costs incurred in preventing poor quality from
occurring. Like process design, IT design for
customer information, employee training, and
record information system.
 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.
Appraisal cost
 Costs incurred in the process of uncovering
defects. It includes testing, evaluation, and
inspecting quality.
Failure cost
 Incurred by defective parts or products or by
faulty services.
Internal failure cost
 Costs associated with discovering poor product
quality before the product reaches the customer.
External failure cost
 Costs linked with quality problems at the
customer site.
Old concept of quality is to inspect for quality after
production. New concept of quality is to build quality into
the process and to identify and correct causes of quality
problems.
QUALITY GURUS
Walter A. Shewhart
 Contributed to understanding of process
variability.
 Develop concept of statistical control charts.
W. Edwards Deming
 Father of quality control
 Develop 14 points to guide companies in quality
improvement.
Joseph M. Juran
 Define quality as fitness for use.
 Develop concept of cost of quality.
Arman F. Feigenbaum
 Introduced concept of Total Quality Management.
Philip B. Crosby
 Coined the phrase “Quality is free.”
 Introduced the concept of zero defects.
Kaoru Ishikawa
 Known for the development of cause-and-effect
diagrams.
 Identified concept of internal customer.
Genichi Taguchi
 Focused on the product design quality.
 Developed “Taguchi Loss Function”
TOTAL QUALITY MANAGEMENT
Total Quality Management
 The term total quality management (TQM) refers
to a quest for quality in an organization.
 There are three key philosophies in this
approach. One is a never-ending push to
improve.
- Continuous improvement.
- The involvement of everyone in the
organization.
- A goal of customer satisfaction, which means
meeting
or
exceeding
customer
expectations.
CONCEPT OF TOTAL QUALITY MANAGEMENT
PHILOSOPHY
Customer focus
 Goal is to identify and meet customer needs.
Continuous improvement
 A philosophy of never-ending improvement.
Employee empowerment
 Employees are expected to seek out, identify and
correct quality problems.
Use of quality tools
 On-going training in the use of modern tools and
equipment.
Product design
 Products are
expectation.
designed
to
meet customer
Process management
 Quality should be built into the process, sources
of problem needs to be identified and corrected.
Managing supplier quality
 Quality concept must extend to the company’s
suppliers.
PLAN-DO-STUDY-ACT (PDSA) CYCLE
 An iterative, four stage problem solving model
used for improving a process or carrying out
change.
Benchmarking
 Studying the business practices of
companies for purpose of comparison.
other
Employee empowerment
 TQM provides incentives for employee to identify
quality problems.
 Workers are empowered to make decisions
relative to quality in the production process.
 In order to achieve quality performance,
employees are given continual training in quality
measurement tools.
 The importance of exceptional quality is
demonstrated by the Enchanted Kingdom in the
operation of its theme park.
 All employees are extensively trained in customer
service, communication, and quality awareness.
TOOLS IN TOTAL QUALITY MANAGEMENT
1. Cause-and-effect diagram
 A chart that identifies potential causes of
particular quality problems. It is often called
as the “fishbone diagram”.
2. Flowcharts
 A schematic diagram of the sequence of
steps involved in an operation process.
3. Checklist
 A list of common defects and the number of
observed occurrence of these defects. A
simple yet effective tool that allows workers
to collect information regarding the defects
observed.
4. Control chart
 Is used to evaluate whether a process is
operating within the set expectations. To
evaluate a process, the variable is plotted on
a control chart.
5. Scatter diagram
 Graphs that show how two variables are
related to each other. They are particularly
useful in detecting the amount of correlation
or degree of linear relationship.
6. Pareto analysis
 A technique used to identify quality problems
based on their degree of importance. A chart
that ranks the causes of poor quality in
decreasing order based on the percentage of
defects.
7. Histograms
 A chart that shows the frequency distribution
observed values of variables. This tool can be
used to evaluate and monitor the
acceptability of product quality.
QUALITY AWARDS AND STANDARDS
1. Philippine Quality Award
 The Philippine Quality Award Program is a
global competitiveness template that aims to
encourage and engage public and private

organizations and other stakeholders to
strive for and attain performance excellence.
It is a national award program that recognizes
achievements of public and private sector
organizations in their journey towards
performance excellence.
2. Consumer Choice Award
 Consumers Choice – Asia Pacific Award is
Asian Consumers Grand Tribute to
outstanding
products/companies
and
achievers in various Arts and Entertainment,
Public and Humanitarian Service, Sports,
Business and Entrepreneurship, and other
major professional fields, and who have
benefitted the consumers in the Asia-Pacific
Region, including the Philippines.
3. Seal of Excellence Award
 It is a prestigious Year-Ender Consumers
Tribute to outstanding consumer products
and achievers, and which has expanded to
other countries to pursue its public service
objectives.
 It is to motivate consumer products and
companies to excel in their respective
product or corporate categories thereby
contributing to world-class excellence.
4. Baldrige Award
 It is administered by the National Institute of
Standards and Technology. The purpose of
the award competition is to stimulate efforts
to improve quality, to recognize quality
achievements, and to publicize successful
programs.
5. The European Quality Award
 Europe’s most prestigious award for
organizational excellence. The European
Quality Award sits at the top of regional and
national quality awards, and applicants have
often won one or more of those awards prior
to applying for the European Quality Award.
6. The Deming Prize
 Named in honor of the late W. Edwards
Deming, is Japan’s highly coveted award
recognizing successful quality efforts. It is
given annually to any company that meets
the award’s standards. Although typically
given to Japanese firms, in 1989, Florida
Power and Light became the first U.S.
company to win the award.
QUALITY CERTIFICATION
 International Organization for Standardization
(ISO)
 Promotes worldwide standards for the
improvement of quality, productivity, and
operating efficiency through a series of standards
and guidelines.
 ISO 9000, 14000, and 24700.
HIGHLIGHT OF TOTAL QUALITY MANAGEMENT
 The ultimate goal of TQM is to produce and
deliver goods and services that provide value to
the final customer.
 This can only be achieved if the concepts of TQM
are adopted by all members of the organization.
 If just one member of the chain produces poor
quality, the entire entity will suffer. Just as all the
internal functions of an organization are
dependent on one another, the system is linked
together and are dependent on each
performance. For this reason, the concept of
TQM must be extended to everyone in the
organization.