Quality Management
1
Definitions of Quality
Quality is the ability of a product or service to
consistently meet or exceed customer
expectations.
Quality is a service’s and product’s fitness for its
intended use
2
Importance of Quality
Sales Gains
 Improved response
 Higher Prices
 Improved reputation
 Increased volume
Improved
Quality
Reduced Costs
Increased productivity
Lower rework and scrap
costs
 Lower warranty costs


3
Increased
Profits
Dimensions of Quality (1 of 2)
Performance – basic operating characteristics of the
product/service
Aesthetics - appearance, feel, sound, smell, taste
Special Features - extra items added to the basic
characteristics
Conformance - how well product/service conforms to
customer’s expectations, meeting preestablished standards
Quality
Reliability - consistency of performance, probability
product
will operate over time
4
Dimensions of Quality (2 of 2)
 Durability – useful life of the product/service. Life span
before replacement
 Safety- freedom from injury or harm
 Perceived Quality – subjective perceptions based on
brand name, advertising, etc. indirect evaluation of quality
(e.g. reputation)
 Serviceability – service after sale, ease of getting repairs,
speed & competence of repairs
5
Examples of Quality Dimensions (1 of 2)
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
4. Safety
Antilock brakes, airbags
6
Separate waiting area
Examples of Quality Dimensions (2 of 2)
Dimension (Product)
Automobile
(Service)
Auto Repair
5. Reliability
Infrequency of breakdowns
Work done correctly,
ready when
promised
6. Durability
Useful life in miles,
resistance to rust &
corrosion
Work holds up over
time
7. Perceived
quality
Top-rated car
Award-winning
service department
8. After sale
service
Handling of complaints
and/or requests for
information
Handling of
complaints
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Dimensions of Service Quality
Consistency
Reliability
Responsiveness
Tangibles
Competence
Understanding
Accessibility
Completeness
Security
Courtesy
© 1995 Corel Corp.
Credibility
Accuracy
Communication
Convenience
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Time, timeliness
Dimensions of Service Quality (examples)
Dimension
Examples
1. Tangibles
Were the facilities clean, personnel neat?
2. Convenience
Was the service center conveniently located?
3. Reliability
Was the problem fixed?
4. Responsiveness
Were customer service personnel willing and able to answer
questions?
5. Time
How long did the customer wait?
6. Assurance
Did the customer service personnel seem knowledgeable
about the repair?
7. Courtesy
Were customer service personnel and the cashierfriendly
and courteous?9
Costs of Quality (1 of 2)
Cost of achieving good quality
Appraisal Costs
Costs incurred to evaluate the products, costs of activities
designed to uncover defects, inspection and testing, test
equipment, operator
Prevention Costs
Costs incurred to reduce the potential for defects, all TQ
training, planning, product design, customer assessment,
process control, and quality improvement costs to prevent
defects from occurring
10
Costs of Quality (2 of 2)
Cost of poor quality-failure costs - costs incurred by
defective parts/products or faulty services.
Internal Failure Costs
Costs incurred to fix problems that are detected before the
product/service is delivered to the customer. (eg. scrap, rework on
the defective parts, process failure, process downtime, price
downgrading)
External Failure Costs
All costs incurred to fix problems that are detected after the
product/service is delivered to the customer.(customer complaints,
product return, warranty, product liability, lost sales)
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Quality–Cost Relationship
 Increased prevention costs lead to decreased failure
costs
 Improved quality leads to increased sales and market
share
 Quality improvement at the design stage
 Higher quality products can command higher prices
12
Quality and Productivity
output
 Productivity =
input
 Fewer defects increase output
 Quality improvement reduces inputs
13
Determinants of Quality
 Design (quality of)
Intention of designers to include or exclude features in a product
or service
 Conformance (quality of)
 The degree to which goods or services conform to the intent of
the designers, ensuring product or service produced according to
design (degree to which the design specifications are met)
Depends on:
 Design of production process
 Performance of machinery
 Materials
 Training

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Other Determinants That Affect
Quality
 Production/operations system
 Packaging and shipping
 Marketing and sales
 Value-added services
 Quality Systems
 Top management
15
Evolution of Quality Management
 1924 - Statistical process control charts
 1930 - Tables for acceptance sampling
 1940’s - Statistical sampling techniques
 1950’s - Quality assurance/TQC
 1960’s - Zero defects
 1970’s - Quality assurance in services
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Quality Assurance vs. Strategic
Approach
 Quality Assurance
 Emphasis on finding and correcting defects
before reaching market
 Strategic Approach
 Proactive, focusing on preventing mistakes from
occurring
 Greater emphasis on customer satisfaction
17
The Quality Gurus
 Walter Shewhart
 “Father of statistical quality control”
 W. Edwards Deming
 Joseph M. Juran
 Armand Feignbaum
 Philip B. Crosby
 Kaoru Ishikawa
 Genichi Taguchi
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Key Contributors to Quality Management
Contributor Known for
Quality
Deming
14 points; special & common causes of
variation
Juran
Quality is fitness for use; quality trilogy
Feignbaum
Quality is a total field
Crosby
Quality is free; zero defects
Ishikawa
Cause-and effect diagrams; quality
circles
Taguchi
Taguchi loss function
Ohno and
Shingo
Continuous improvement
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Total Quality Management
T
Q
20
M
TQM
 Encompasses entire organization, from supplier to
customer
 Stresses a commitment by management to have a
continuing, company-wide drive toward excellence on all
dimensions of products and services that are important
to the customer
 Can be defined as a philosophy that involves everyone
in an organization in a continual effort to improve quality
and achieve customer satisfaction.
21
TQM Throughout the Organization
 Marketing, sales, research
 Engineering
 Purchasing
 Human resources
 Management
 Packing, storing, shipping
 After-sale support
22
Quality Principles (Elements of TQM)
 Customer focus
 Continuous improvement
 Employee empowerment
 Close relations with external suppliers
 Team approach
 Quality at the source
 Supplier quality
 Decision based on facts
 Knowledge of TQM tools
Yields: How to do what is important
and to be
23
accomplished
Employee Fulfillment
 Empowerment
 Organizational commitment
Yields: Employees’ attitudes that they can
accomplish what is important and to be
accomplished
24
TQM and External Suppliers
 Support of suppliers required to satisfy customer
expectations
 Single-sourcing
 Partnering
 Suppliers may be required to adopt quality programs or
meet specific standards
25
Customer Satisfaction
 Winning orders, loyal customers, repeated sales
 Requires some form of measurement system
 Customer surveys are widely used
 Total customer satisfaction is often an organization’s
overriding objective
Yields: An effective organization with a competitive
advantage
26
Achieving
Total Quality Management
Customer
Satisfaction
Attitudes
(e.g., Commitment)
Employee
Fulfillment
How to Do
Quality
Principles
What to Do
Organizational
Practices
27
Continuous Improvement
 Philosophy that seeks to make never-ending
improvements to the process of converting
inputs into outputs to assure customer
satisfaction
 Involves all operations
& work units
 Other names



Kaizen (Japanese)
Zero-defects
Six sigma
28
Continuous Improvement:
Shewhart’s PDCA Model
4.Act
1.Plan
3.Check
2.Do
Institutionalize
Identify the problem
improvement,
and develop the plan
implement the plan for improvement
Assess the
plan; Is it
working
Implement
the pan on a
test basis
29
The Process Improvement Cycle
Select a
process
Document
Study/document
Evaluate
Seek ways to
Improve it
Implement the
Improved process
Design an
Improved process
30
Six Sigma Quality
 Statistically

Having no more than 3.4 defects per million
 Conceptually
A philosophy and set of methods companies use to
eliminate defects in their products and processes
 Seeks to reduce variation in the processes that lead to
product defects
 The name, “six sigma” refers to the variation that
exists within plus or minus six standard deviations of
the process outputs
 Requires the use of certain tools and techniques

31
Six Sigma Process
 Define
 Measure
 Analyze
 Improve
 Control
DMAIC
32
Employees and Quality
Improvement
 Employee involvement
 Quality circles
 Process improvement
teams
 Employee
suggestions
33
Employee Empowerment
 Getting employees involved in product &
process improvements

85% of quality problems are due to process &
material
 Techniques of employee empowerment



Support workers
Let workers make decisions
Build teams & quality circles
34
© 1995 Corel Corp.
Quality at the Source
The philosophy of making each worker
responsible for the quality of his or her work.
35
Employee Empowerment Technique:
Quality Circles
 Group of 6-12 employees from same work
area
 Meet regularly to solve work-related problems
 4 hours/month
 Facilitator trains & helps
with meetings
© 1995 Corel Corp.
36
The Quality
Circle Process
Organization
8-10 members
Same area
Supervisor/moderator
Training
Presentation
Implementation
Monitoring
Group processes
Data collection
Problem analysis
Solution
Problem
Identification
Problem results
List alternatives
Consensus
Brainstorming
Problem
Analysis
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Cause and effect
Data collection
and analysis
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
38
Total Quality Management
1.
2.
3.
4.
5.
6.
7.
8.
Customer defined quality
Top management leadership
Quality as a strategic issue
All employees responsible for quality
Continuous improvement
Shared problem solving
Statistical quality control
Training & education for all employees
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Deming’s Fourteen Points
 Create consistency of purpose
 Adapt philosophy of prevention
 Cease mass inspection
 Select a few suppliers based on quality
 Constantly improve system and workers
 Institute worker training
 Instill leadership among supervisors
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Deming’s Points - continued
 Eliminate fear among employees
 Break down barriers between departments
 Eliminate slogans
 Remove numerical quotas
 Enhance worker pride
 Institute vigorous training and education programs
 Develop commitment from top management to
implement these 13 points
41
Tools of TQM
 Tools for organizing data, identifying problems
generating ideas and improving the processes
Check sheet
 Scatter diagram
 Cause and effect diagram
 Pareto charts
 Process charts (Flow charts)
 Run charts
 Histograms
 Statistical process control chart

Process
1
2
3
1
2
3
4
4
5
Dirt
Old
Temp
Fault
42
x xx
x
x
x x x
x
x
x x
x
x x x
UCL
LCL
Check Sheet
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TIME PERIOD: 22 Feb to 27 Feb 2002
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Number of Lots
Histogram
Can be used to identify the frequency of quality
defect occurrence and display quality
performance
0
1
2
44
3
4
Defects
in lot
Pareto Chart
CAUSE
NUMBER OF
DEFECTS
Poor design
Wrong part dimensions
Defective parts
Incorrect machine calibration
Operator errors
Defective material
Surface abrasions
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PERCENTAGE
80
16
12
7
4
3
3
64 %
13
10
6
3
2
2
125
100 %
70
Percent from each cause
Pareto Chart
(64)
60
50
40
30
20
(13)
10
(10)
(6)
(3)
(2)
0
46
Causes of poor quality
(2)
Process Chart
 Shows sequence of events in process
 Depicts activity relationships
 Has many uses
Identify data collection points
 Find problem sources
 Identify places for improvement
 Identify where travel distances can be reduced

47
Process Chart Example
SUBJECT: Request tool purchase
Dist (ft)
Time (min)
Symbol
Description
 D  Write order
 D  On desk
75
  D  To buyer
 D  Examine
 = Operation;  = Transport;  = Inspect;
D = Delay;  = Storage
48
Flow Chart
Material
Received
from
Supplier
No,
Continue…
Inspect
Material for
Defects
Defects
found?
Yes
Can be used to
find quality
problems
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Return to
Supplier
for Credit
Scatter Diagram
Y
50
X
Cause and Effect Diagram
 Used to find problem sources/solutions
 Other names

Fish-bone diagram, Ishikawa diagram
 Steps
Identify problem to correct
 Draw main causes for problem as ‘bones’
 Ask ‘What could have caused problems in these
areas?’ Repeat for each sub-area.

51
Cause-and-Effect Diagram
Methods
Materials
Cause
Cause
Cause
Cause
Cause
Cause
Environment
Effect
Cause
Cause
Cause
People
Cause
Cause
Cause
Equipment
Can be used to systematically track backwards to find a possible
cause of a quality
problem
52
Cause-and-Effect Diagram
Measurement
Faulty
testing equipment
Lack of concentration
Improper methods
Inadequate training
Environment
Tooling problems
Old / worn
Quality
Problem
Defective from vendor
Poor process design
Ineffective quality
management
Not to specifications
Dust and Dirt
Machines
Out of adjustment
Poor supervision
Incorrect specifications
Inaccurate
temperature
control
Human
Deficiencies
in product design
Materialhandling problems
Materials
Process
53
Fishbone Chart - Problems with
Airline Customer Service
54
Control Chart
1020
UCL
1010
1000
990
LCL
980
970
0
1
2
3
4
5
6
7
8
9 10 11 12 13 14 15
Can be used to monitor ongoing production process quality and
Quality conformance to stated standards of quality
55
Control Chart
27
24
UCL = 23.35
Number of defects
21
c = 12.67
18
15
12
9
6
LCL = 1.99
3
2
4
6
56
8
10
12
Sample number
14
16
Run Chart
Diameter
Can be used to identify when equipment or processes are not
Behaving according to specifications
Time57(Hours)
Methods for Generating Ideas
 Brainstorming
 Quality circles
 Benchmarking
 5W2H
58
Applications That Facilitate TQM
 Benchmarking
 Just-in-time (JIT)
 Quality Function Deployment (House of Quality)
 Taguchi concepts and techniques (Quality Loss
Function)
59
Benchmarking
Selecting best practices to use
as a standard for performance
 Identify a critical process that needs to be improved
 Form a benchmark team
 Identify benchmarking partners (an organization that
excels in this process)
 Contact the organization
 Collect and analyze benchmarking information
 Improve the critical process, ie. take action to match or
exceed the benchmark
60
Just-in-Time (JIT)
Relationship to quality:
JIT cuts cost of quality
 JIT improves quality
 Better quality means less inventory and better, easierto-employ JIT system

61
Quality Function Deployment
(QFD)
 Determines what will satisfy the customer
 Translates those customer desires into the target
design
62
Taguchi Techniques
 Experimental design methods to improve product
& process design
 Identify key component & process variables
affecting product variation
 Taguchi Concepts
 Quality robustness
 Quality loss function
 Target specifications
63
Taguchi Concepts –
Quality Robustness
 Ability to produce
products uniformly
regardless of
manufacturing
conditions
 Put robustness in
House of Quality
matrices besides
functionality
© 1984-1994 T/Maker Co.
64
Taguchi Techniques:
Quality Loss Function
 Shows social cost ($) of deviation from target value
 Assumptions
Most measurable quality characteristics (e.g., length, weight)
have a target value
 Deviations from target value are undesirable

 Equation: L = D2C

L = Loss ($); D = Deviation; C = Cost
65
Taguchi’s View of Variation
Traditional view is that quality within the LS and US is
good and that the cost of quality outside this range is
constant, where Taguchi views costs as increasing as
variability increases, so seek to achieve zero defects and
that will truly minimize quality costs.
High
High
Incremental
Cost of
Variability
Incremental
Cost of
Variability
Zero
Zero
Lower Target Upper
Spec Spec Spec
Traditional View
Lower Target Upper
Spec Spec Spec
66
Taguchi’s View
Quality Loss Function; Distribution of
Products Produced
Quality Loss Function (a)
High loss
Unacceptable
Loss (to
producing
organization,
customer, and
society)
Low loss
Target-oriented
quality yields more
product in the
“best” category
Poor
Fair
Good
Best
Target-oriented quality
brings products toward
the target value
Conformance-oriented
quality keeps product
within three standard
deviations
Frequency
Lower
Target
Specification
67
Upper
Distribution of
specifications for product
produced (b)
TQM In Services
 Service quality is more difficult to measure than
for goods
 Service quality perceptions depend on
 Expectations versus reality
 Process and outcome
 Types of service quality
 Normal: Routine service delivery
 Exceptional: How problems are handled
68
TQM in Service Companies
 Inputs similar to manufacturing
 Processes & outputs are different
 Services tend to be labor intensive
 Quality measurement
is harder
 Timeliness is
important measure
 TQM principles
apply to services
69
Obstacles to Implementing TQM
Lack of :
Company-wide definition of quality
Strategic plan for change
Customer focus
Real employee empowerment
Strong motivation
Time to devote to quality initiatives
Leadership
70
Obstacles to Implementing TQM
 Poor inter-organizational communication
 View of quality as a “quick fix”
 Emphasis on short-term financial results
 Internal political and “turf” wars
71
Criticisms of TQM
Blind pursuit of TQM programs
Programs may not be linked to strategies
Quality-related decisions may not be tied
to market performance
Failure to carefully plan a program
72
Quality Awards
Baldrige Award
Deming Prize
European
Quality Award
73
Quality Certification
ISO 9000
Set of international standards on quality management
and quality assurance, critical to international business
 Adopted in 1987
 ISO 9000 requires companies “to document everything
they do that affects the quality of goods and services
and than do as they documented”

ISO 14000

A set of international standards for assessing a
company’s environmental performance
74
ISO 9000 Quality Management
Principles
A systems approach to management
Continual improvement
Factual approach to decision making
Mutually beneficial supplier relationships
Customer focus
Leadership
People involvement
Process approach
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