Importance of Quality
Malcolm Baldrige Quality Award
 Created by Congress in 1987
 Named after Malcolm Baldrige who served as Secretary of Commerce
from 1981-1987
 Award is given annually to recognize US companies that excel in quality
achievement and management
 3 Categories: manufacturing, service, small business
 http://www.quality.nist.gov/Contacts_Profiles.htm
ISO 9000 Standards
 Voluntary standard that is quickly becoming the norm
 Series of quality standards defined by the International Organization for
Standardization
 Certification to an ISO 9000 standard means that the firm has a quality
management system in place that ensures consistency of output quality
 Takes 9 to 18 months to get certified
 ISO 9000 does not prescribe particular practices but requires that
businesses implement three-component cycles. Activities affecting quality
must be:
 Planned
 Controlled
 Documented
Note: ISO 14000 series - An environmental management standard which
focuses on pollution prevention and ecological impact
Seven Concepts of TQM
1. Continuous Improvement
Philosophy: Continuously improve the quality of your product or service.
Involves all operations and work centers including suppliers and customers
2. Six Sigma
 Originally developed by Motorola
 Refers to an extremely high measure of process capability
 A Six Sigma capable process will return no more than 3.4 defects per
million operations (DPMO)
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Utilizes a highly structured approach to process improvement
Requires the commitment of top management
Utilizes corporate sponsors (Champions)
Provides extensive training to employees
Sets stretch goals
3. Employee Empowerment
 Getting employees involved in product and process improvements
 85% of quality problems are due to process and material
 Techniques
 Build communication networks that include employees
 Develop open, supportive supervisors
 Move responsibility to employees
 Build a high-morale organization
 Create formal team structures
 Quality Circles
 Group of employees who meet regularly to solve problems
 Trained in planning, problem solving, and statistical methods
 Often led by a facilitator
 Very effective when done properly
4. Benchmarking
 The basic premise behind benchmarking is that to deliver quality, you
need to compare your business against the “best in class” business and
then make changes to your operation so that quality is enhanced.
 Benchmarking is the process of determining who is the very best, who sets
the standard, and what that standard is.
5. Just-in-time (JIT)
 ‘Pull’ system of production scheduling including supply management
 Production only when signaled
 Allows reduced inventory levels
 Inventory costs money and hides process and material problems
 Encourages improved process and product quality
6. Taguchi Concepts (aka Robust Design) and others
 Taguschi
 Pioneered by Dr. Genichi Taguchi
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Basic fundamental thinking behind the Robust Design method is to
develop products that hold up to adverse conditions (i.e., telephones
are designed to be dropped because this commonly happens)
If we want to apply this quality principle to service, we should plan for
the worst when designing our service. When the adverse condition
occurs, we can maintain the quality in our service.
Example: if we are going to build a grocery store (typically these
stores depend on a high volume of sales to make money), then the
facility should be designed for heavy traffic. Shelves should be sturdy,
flooring should facilitate the movement of wagons, the layout should
promote quick movement through the facility, and shelves should be
restocked quickly. To insure quality, we look at the worst case
scenario (i.e., a pending hurricane) and plan for it so that quality is
maintained during these times.
 Poka-Yoke (pronounced POH-kah YOH-kay)
 Also know as failsafing or mistake-proofing
 Poka-yoke is Japanese for mistake-proofing
 This approach was developed by Shigeo Shingo, an industrial engineer
at Toyota
 A poka-yoke device is any mechanism that either prevents a mistake
from being made or makes the mistake obvious at a glance.
 He observed that errors occurred, not because employees were
incompetent, but because of interruptions in routine or lapses of
attention.
 If we want to apply this quality principle to service, we need to look at
where errors occur in service delivery and develop methods that will
ensure that these errors do not occur.
 Example: The french fry scoop at McDonalds measures a consistent
serving of potatoes. If the scoop was not used, french fry orders would
all look different. Some would be half-full (lead to disgruntled and
hungry customers) and some would be bulging over the top (stray fries
would fall on the floor and change the aesthetics of cleanliness).
 Quality Function Deployment (QFD)
 Developed in Japan and used at Toyota
 Underlying idea is that customer input is important in product design
 The process results in a comprehensive matrix called the “house of
quality” used to document information, perceptions, and decision.
 Quality Function Deployment (QFD) uses a set of powerful product
development tools originally designed to transfer the concepts of
quality control from the manufacturing process into the new product
development process.
 To apply this idea to service, we would seek customer input before
establishing a new service.
Example: Market surveys
7. Knowledge of TQM tools
 Deming’s Plan-Do-Check-Act (PDCA) Cycle
 Plan – select and analyze the problem
 Histograms
 Scatter Plots
 Pareto charts
 Flowcharts
 Cause and effect diagrams
 Control charts
 Do – implement the solution
 Check – check the results of the change
 Act – act to standardize the solution for the long-term