Providing a good, usable product
Doing it right the first time
Delighting or pleasing customers
Total customer service and satisfaction
Compliance with policies and procedures
The totality of features and characteristics of a product or service that bears on its ability to satisfy given needs – American Society for Quality
– Fitness for use
– Meeting or exceeding customer expectations
– Conformance to specifications
An integrated approach to organizational performance management that results in
– delivery of ever-improving value to customers and stakeholders, contributing to organizational sustainability,
– improvement of overall organizational effectiveness and capabilities, and
– organizational and personal learning.
THE buzzword among business in the 1980s and 1990s
Quality problems still abound in many industries, such as automotive
Consumer expectations are high
“We’ve made dependence on the quality of our technology a part of life” – Joseph Juran
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Skilled craftsmanship during Middle Ages
Industrial Revolution: rise of inspection and separate quality departments
Early 20 th Century: statistical methods at
Quality control during World War II
Post-war Japan: evolution of quality management
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Quality awareness in U.S. manufacturing industry during 1980s: from “Little Q” to
“Big Q” - Total Quality Management
Malcolm Baldrige National Quality Award
Disappointments and criticism
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Emergence of quality management in service industries, government, health care, and education
Evolution of Six Sigma
Current and future challenge: maintain commitment to performance excellence
Quality Dimensions in
Performance – primary operating characteristics
Features – “bells and whistles”
Reliability – probability of operating for specific time and conditions of use
Conformance – degree to which characteristics match standards
Durability - amount of use before deterioration or replacement
Serviceability – speed, courtesy, and competence of repair
Aesthetics – look, feel, sound, taste, smell
Time – how much time must a customer wait?
Timeliness – will a service be performed when promised?
Completeness – Are all items in the order included?
Courtesy – do frontline employees greet each customer cheerfully?
Consistency – are services delivered in the same fashion for every customer, and every time for the same customer?
Accessibility and convenience – is the service easy to obtain?
Customer needs and performance standards are often difficult to identify and measure
The production of services typically requires a higher degree of customization
The output of many service systems is intangible
Services are produced and consumed simultaneously
Customers often are involved in the service process and present while it is being performed
Services are generally labor intensive
Many service organizations must handle very large numbers of customer transactions.
The Deming philosophy focuses on continual improvements in product and service quality by reducing uncertainty and variability in design, manufacturing, and service processes, driven by the leadership of top management.
Increase market share with better quality and lower prices
Stay in business
Provide jobs and more jobs 14
Appreciation for a system
Theory of knowledge
Most organizational processes are cross-functional
Parts of a system must work together
Every system must have a purpose
Management must optimize the system as a whole
Many sources of uncontrollable variation exist in any process
Excessive variation results in product failures, unhappy customers, and unnecessary costs
Statistical methods can be used to identify and quantify variation to help understand it and lead to improvements
Knowledge is not possible without theory
Experience alone does not establish a theory, it only describes
Theory shows cause-and-effect relationships that can be used for prediction
People are motivated intrinsically and extrinsically; intrinsic motivation is the most powerful
Fear is demotivating
Managers should develop pride and joy in work
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1. Create and publish a company mission statement and commit to it.
2. Learn the new philosophy.
3. Understand the purpose of inspection.
4. End business practices driven by price alone.
5. Constantly improve system of production and service.
6. Institute training.
7. Teach and institute leadership.
8. Drive out fear and create trust.
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9. Optimize team and individual efforts.
10. Eliminate exhortations for work force.
11. Eliminate numerical quotas and M.B.O.
Focus on improvement.
12. Remove barriers that rob people of pride of workmanship.
13. Encourage education and self-improvement.
14. Take action to accomplish the transformation.
Juran proposed a simple definition of quality: “fitness for use.” This definition of quality suggests that it should be viewed from both external and internal perspectives; that is, quality is related to “(1) product performance that results in customer satisfaction; (2) freedom from product deficiencies, which avoids customer dissatisfaction.”
Quality improvement www.juran.com
“Quality is free. It’s not a gift, but it is free. What costs money are the unquality things -- all the actions that involve not doing jobs right the first time.”
Quality means conformance to requirements
Problems are functional in nature
There is no optimum level of defects
Cost of quality is the only useful measurement
Zero defects is the only performance standard www.philipcrosby.com
Customer and stakeholder focus
Continuous improvement and learning
Employee engagement and teamwork
Management by fact
Visionary leadership and a strategic orientation
Customer is principal judge of quality
Organizations must first understand customers’ needs and expectations in order to meet and exceed them
Organizations must build relationships with customers
Customers are internal and external
A process is a sequence of activities that is intended to achieve some result
Continuous Improvement and
Incremental and breakthrough improvement
– Products and services
– Work processes
– Flexibility, responsiveness, and cycle time
Learning – why changes are successful through feedback between practices and results
Execution of plans
Assessment of progress
Revision of plans based upon assessment findings
Employee Engagement and
Engagement – workers have a strong emotional bond to their organization, are actively involved in and committed to their work, feel that their jobs are important, know that their opinions and ideas have value, and often go beyond their immediate responsibilities for the good of the organization
Teamwork must exist vertically, horizontally, and interorganizationally
Organizations need good performance measures to drive strategies and change, manage resources, and continuously improve
Data and information support analysis at all levels
Typical measures: customer, product and service, market, competitive comparisons, supplier, employee, cost and financial
Leadership is the responsibility of top management
Senior leaders should be role models for the entire organization
Leaders must make long-term commitments to key stakeholders
Quality should drive strategic plans
Agency relationship : a concept in which one party (the principal) engages another party (the agent) to perform work
Key assumption : individuals in agency relationships are utility maximizers and will always take actions to enhance their self-interests.
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TQ views the management system as one based on social and human values, whereas agency theory is based on an economic perspective that removes people from the equation.
Agency theory propounds the belief that people are self-interested and opportunistic and that their rights are conditional and proportional to the value they add to the organization. TQ suggests that people are also motivated by interests other than self, and that people have an innate right to be respected.
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Agency theory assumes an inherent conflict of goals between agents and principals, and that agent goals are aligned with principal goals through formal contracts. In TQ, everyone in the organization shares common goals and a continuous improvement philosophy, and goals are aligned through adoption of
TQ practices and culture.
TQ takes a long-term perspective based on continuous improvement, whereas agency theory focuses on short-term achievement of the contract between the principal and agent.
TQ leaders provide a quality vision and play a strategic role in the organization; leaders in agency theory develop control mechanisms and engage in monitoring.