chapter
14
Quality
Copyright © 2009 South-Western/Cengage Learning.
All rights reserved.
PowerPoint Presentation by Charlie Cook
The University of West Alabama
How Frito Lay Came About
1. First, Pepsi-Co was created by Caleb Bradham in the 1890s.
2. Then in the 1930s Elmer Doolin founded the Frito Company
and H.W. Lay founded the H.W. Lay Company
3. In 1961, Frito and Lay merged to form Frito-Lay.
4. In 19654, Frito-Lay merged with Pepsi-Co.
5. At that time Pepsi-Co also owned KFC, Taco Bell and Pizza
Hut but they sold them off to focus on packaged goods.
6. Then Pepsi-Co acquired Tropicana and Quaker Oats so that
now they are the 4th largest consumer goods company in the
world.
7. Today Pepsi-Co has 5 divisions: Pepsi, Frito-Lay, Quaker,
Tropicana and Gatorade.
8. Run by CEO Intra Nooyi, one of the few women minorities to
run a major US corporation.
9. Frito-Lay is the world’s leading snack food company. One
reason they’re successful: consistent quality of product.
Copyright © 2009 South-Western/Cengage Learning. All rights reserved.
14–2
Exhibit 14–8 ● Inventory Control within the Systems Process
Just-in-Time Inventory:
An inventory method in which necessary
parts and raw materials are delivered shortly
before they are needed.
Copyright © 2009 South-Western/Cengage Learning. All rights reserved.
14–3
Quality Control
• Quality Control
 The process of ensuring that all types of inventory meet
standards.
• Quality Assurance
 Means “building in” quality; not attempting to “inspect it in.”
• International Standards Organization (ISO)
 Certifies organizations that meet set quality standards (ISO
9000).
 Many businesses require their suppliers to also be ISO 9000
certified.
• Six Sigma
 Higher levels of quality at lower costs.
 Goal is 3.4 defects or mistakes per million operations.
Copyright © 2009 South-Western/Cengage Learning. All rights reserved.
14–4
Total Quality Management (TQM)
• TQM Principles
1.
Focus on delivering customer value.
2.
Continually improve systems and processes.
3.
Focus on managing processes rather than people.
4.
Use teams to continually improve.
• TQM vs. Quality Control

TQM is broader in organizational scope.

Quality is determined by customers’ acceptance, not by internally-set
standards.

The focus is on continuous improvement.

Frito-Lay uses TQM so that each product always tastes the same.
Packing supplies also important so that products remain fresh.

Frito-Lay is ISO 9000 certified and requires the same of suppliers.
Copyright © 2009 South-Western/Cengage Learning. All rights reserved.
14–5
Exhibit 14–9 ● Five Rules of Customer Human Relations
Copyright © 2009 South-Western/Cengage Learning. All rights reserved.
14–6
Exhibit 14–10 ● Statistical Process Control Chart for 16-Ounce Bags of
Lay’s Potato Chips
Trend
Copyright © 2009 South-Western/Cengage Learning. All rights reserved.
14–7