Chapter 9
Management of Quality
Slides prepared by
Laurel Donaldson
Douglas College
Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.
Learning Objectives
LO 1
LO 2
LO 3
LO 4
LO 5
Define the term quality, describe evolution of quality
management, discuss dimensions and determinants
of quality, describe various costs associated with
quality, and discuss philosophies of quality gurus.
Describe ISO 9001 and apply it.
Describe HACCP and apply it.
Describe and apply Canada Awards for Excellence
and TQM.
Give an overview of problem solving and process
improvement, describe and use various quality tools.
Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.
2
Chapter Outline
 Introduction











Evolution of Quality Management
Dimensions and Determinants of Quality
Costs of Quality
Quality Gurus
ISO 9001
Hazard Analysis Critical Control Point
Canada Awards for Excellence
Total Quality Management
Problem Solving and Continuous Improvement
Six Sigma
Basic Quality Tools

Methods for Generating Ideas and Reaching Consensus
Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.
3
What is Quality?
QUALITY
is the ability of a product or service to consistently
meet or exceed customer expectations
 Quality control is monitoring, testing, and correcting
quality problems after they occur.
 Quality assurance is providing confidence in a products
quality by preventing defects before they occur.
LO 1
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4
Evolution of Quality Management
Pre-Industrial Revolution
Craftsmanship: each craftsman responsible for quality.
Industrial Revolution
Division of labour: quality control shifts to full time inspectors
1950s
quality assurance
1970s
quality management systems
1980s
TQM, continuous improvement
Today
Six Sigma, statistical tools
LO 1
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5
Dimensions of Quality
Performance
Perceived
quality
Durability
Reliability
LO 1
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Aesthetics
Special
features
Safety
6
Service Quality
Tangibles
Courtesy
Convenience
Assurance
Reliability
Time
LO 1
Responsiveness
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7
Examples of Quality Dimensions
Dimension
(Product)
Automobile
(Service)
Auto Repair
1. Performance
Everything works, fit &
finish
Ride, handling, grade of
materials used
Interior design, soft touch
All work done, at agreed
price
Friendliness, courtesy,
Competency, quickness
Clean work/waiting area
2. Aesthetics
3. Special features Gauge/control placement Location, call when ready
Cellular phone, CD
Computer diagnostics
player
LO 1
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8
Examples of Quality Dimensions (Cont’d)
Dimension
(Product)
Automobile
(Service)
Auto Repair
4. Reliability
Infrequency of breakdowns
Work done correctly,
ready when promised
5. Durability
Useful life in miles, resistance Work holds up over
to rust & corrosion
time
6. Perceived
quality
Top-rated car
7. Serviceability Handling of complaints
and/or requests for
information
LO 1
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Award-winning service
department
Handling of complaints
9
Determinants of Quality
Product design
• Intention of designers to include or exclude features
that customers require
Process design
• Translating product characteristics into process
specifications and tolerances
Production
• The degree to which goods or services conform to
design specifications
LO 1
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10
Costs of Quality
Failure Costs - costs incurred by defective
parts/products
Internal Failure Costs
Fixing
problems during production
External Failure Costs
fixing
LO 1
problems after delivery to customer.
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11
Costs of Quality (continued)
Appraisal Costs
 Inspection
and testing
Prevention Costs
 Quality
training, planning, customer
assessment, creating standard operating
procedures
LO 1
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12
The Quality Gurus
•14 points
•mgmt
must fix
system
•reduce
variation
•SPC,
PDSA
•“total field”
•quality at
the source
W. Edwards Deming
Joseph M. Juran
Armand Feigenbaum
Philip B. Crosby
LO 1
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•fitness-as-use
•trilogy:
planning,
control &
improvement
•continuous
improvement
•cost of quality
•zero defects
•“Do it right
the first time.”
•Quality is free
13
Quality Certification
ISO 9001
Set of international standards on quality
management and quality assurance, critical to
international business
Standards Council of Canada
> 100 countries and 180 technical committees
Documentation and assessment process takes 12 – 18
months for certification
Re-register every 3 years
LO 2
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14
ISO 9001:2000 Elements
System Requirements
Management Responsibilities
Resource Management
Product Realization
Measurement, Analysis, and Improvement
LO 2
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15
ISO 9001 Activities
Source: www.iso.org/iso/iso_9000_selection_and_use-2009.pdf
LO 2
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16
Hazard Analysis Critical Control Point (HACCP)
A quality control system, similar to ISO
9001, designed for food processors
Deals with food safety (biological, chemical, and
physical hazards)
 Main steps:
1. Hazard Analysis
2. Determination of the Critical Control Points
3. Creation of the HACCP Plan
LO 3
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17
Canada Awards for Excellence (CAE)
Administered by
National Quality
Institute
(NQI)
Source: http://www.nqi.ca/Certification/PEP/Overview.aspx
LO 3 Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.
18
National Quality Institute (NQI)
Source: http://www.nqi.ca/Certification/PEP/Overview.aspx
LO 3 Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.
19
Total Quality Management (TQM)
A philosophy
that
involves
everyone
in an
organization in
a continual
effort to
improve quality
and achieve
customer
satisfaction
LO 3
Continuous
Improvement:
make never-ending
improvements to
critical processes
Data driven
Employee
empowerment:
Giving workers
responsibility and
training
Team Approach
Suppliers:
encourage
partnership and
long term
relationships
Fail-safing:
designing in
elements that
prevent errors
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20
The TQM Approach
1. Find out what the customer wants
2. Design a product or service that
meets or exceeds customer wants
3. Design processes that facilitates
doing the job right the first time
4. Keep track of results
5. Extend these concepts to suppliers
LO 3
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21
Comparing the cultures of TQM and
traditional organizations
Aspect
Traditional
TQM
Overall mission
Maximize return on
investment
Emphasis on short term
Not always open; at times
inconsistent objectives
Issue orders; enforce
Not highest priority; may
be unclear
Assign blame; punish
Not systematic; individuals
Meet or exceed customer expectations
Erratic
Adversarial
Narrow, specialized; much
individual effort
Product-oriented
Continuous
Partners
Broad, more general; much team effort
Objectives
Management
Role of manager
Customer
Requirements
Problems
Problem solving
Improvement
Supplier relations
Jobs
Focus
LO 3
Balance of long term and short term
Open; encourages employee input;
consistent objectives
Coach, remove barriers, build trust
Highest priority; important to identify
and understand
Identify and resolve
Systematic; teams
Process-oriented
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22
Basic Steps in Problem Solving
Define problem
and establish
improvement
goals
Define
measures and
collect data
Analyze the
problem
Implement the
solution
Choose a
solution
Generate
potential
solutions
Monitor
solution to see
if goals are
accomplished
LO 5
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23
The PDSA Cycle
Plan
Act
Do
Study
LO 5
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24
Six Sigma
Statistically
Having no more than 3.4 defects per million
Conceptually
Program designed to reduce defects
Requires the use of certain tools and
techniques
Six sigma: A business process for
improving quality, reducing costs, and
increasing customer satisfaction.
LO 5
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25
Six Sigma Process
6 DMAIC
LO 5
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26
Basic Quality Tools
LO 5
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27
Basic Quality Tools
LO 5
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28
Check Sheet
Billing Errors
Monday
Wrong Account
Wrong Amount
A/R Errors
Wrong Account
Wrong Amount
LO 5
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29
80% of the
problems
may be
attributed to
20% of the
causes.
Number of defects
Pareto Analysis
Off Smeared Missing Loose Other
center print
label
LO 5
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Control Chart
1020
UCL
1010
1000
990
LCL
980
970
0
LO 5
1
2
3
4
5
6
7
8
9 10 11 12 13 14 15
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31
Cause-and-Effect Diagram
Methods
Materials
Cause
Cause
Cause
Cause
Cause
Cause
Environment
Effect
Cause
Cause
Cause
People
LO 5
Cause
Cause
Cause
Equipment
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32
Diameter
Run Chart
Time (Hours)
LO 5
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33
Methods for Generating Ideas
LO 5
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34
Methods for Generating Ideas
and Reaching Consensus
 Brainstorming
 Technique for generating a free flow of ideas in a group of
people
 Quality Circles
 Groups of workers who meet to discuss ways of improving
products or processes
 Interviewing
 Technique for identifying problems and collecting information
 Benchmarking
 Process of measuring performance against the best in the
same or another industry
 The 5W2H Approach
 A method of asking questions about a process/problem that
include what, why, where, who, how, and how much
LO 5
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35
Learning Checklist
 Define the term quality.
 Explain why quality is important and the consequences of poor quality.
 Identify the determinants of quality.
 Describe the costs associated with quality.
 Describe the main ideas of the quality gurus.
 Outline the key elements of ISO 9001 and HACCP
 Describe the key ideas of TQM.
 Give an overview of the problem solving process for quality
improvement.
 Describe the various quality tools.
 Describe some methods for generating ideas regarding quality issues.
Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.
36