Introduction

1. Quality is the ability of a product or service to consistently meet or exceed

customer expectations.

Insight On Quality Management

1. Successful management of quality requires that managers have insights on various
aspects of quality.
2. These include defining quality in operational terms, understanding the costs and
benefits of quality, recognizing the consequences of poor quality, and recognizing
the need for ethical behavior.
Defining Quality: The Dimensions of Quality
1. One way to think about quality is the degree to which performance of a product or
service meets or exceeds customer expectations.
2. The difference between these two, that is Performance Expectations, is of great
interest. If these two measures are equal, the difference is zero, and expectations
have been met.
3. If the difference is negative, expectations have not been met, whereas if the
difference is positive, performance has exceeded customer expectations.
4. Customer expectations can be broken down into a number of categories, or
dimensions, that customers use to judge the quality of a product or service.
5. The dimensions used for goods are somewhat different from those used for
services.
6. Product Quality. Product quality is often judged on eight dimensions of quality:
Performance main characteristics of the product.
Aesthetics appearance, feel, smell, taste.
Special features extra characteristics.
Conformance how well a product corresponds to design specifications.
Reliability dependable performance.
Durability ability to perform over time.
Perceived quality indirect evaluation of quality (e.g., reputation).
Serviceability handling of complaints or repairs.
7. When referring to a product, a customer sometimes judges the first four
dimensions by its fitness for use.
8. Notice that price is not a dimension of quality.
9. Service Quality. The dimensions of product quality dont adequately describe
service quality.
10. Instead, service quality is often described using the following dimensions:
Convenience the availability and accessibility of the service.
Reliability the ability to perform a service dependably, consistently, and
accurately.

Responsiveness the willingness of service providers to help customers

in unusual situations and to deal with problems.
Time the speed with which service is delivered.
Assurance the knowledge exhibited by personnel who come into
contact with a customer and their ability to convey trust and confidence.
Courtesy the way customers are treated by employees who come into
contact with them.
Tangibles the physical appearance of facilities, equipment, personnel,
and communication materials.
Consistency The ability to provide the same level of good quality
repeatedly.
11. The dimensions of both product and service quality establish a conceptual
framework for thinking about quality, but even they are too abstract to be applied
operationally for purposes of product or service design, or actually producing a
product or delivering a service.
12. They must be stated in terms of specific, measurable characteristics.
13. Information on customer wants in service can sometimes be difficult to pin down,
creating challenges for designing and managing service quality.
14. For example, customers may use words such as friendly, considerate, and
professional to describe what they expect from service providers.
15. These and similar descriptors are often difficult to translate into exact service
specifications.
16. Moreover, in many instances, customer wants are often industry specific.
17. Thus, the expectations would be quite different for health care versus dry
cleaning.
18. Furthermore, customer complaints may be due in part to unrelated factors (e.g.,
customers mood or general health, the weather).
19. Other challenges with service quality include the reality that customer
expectations often change over time and that different customers tend to have
different expectations, so what one customer might view as good service quality,
another customer might not be satisfied with at all.
20. If customers participate in a service system (i.e., self-service), there can be
increased potential for a negative perception of quality.
21. Consequently, adequate care must be taken to make the necessary customer acts
simple and safe, especially since customers cannot be trained.
22. So error prevention must be designed into the system.
23. It should also be noted that in most instances, some quality dimensions of a
product or service will be more important than others, so it is important to identify
customer priorities, especially when it is likely that trade-off decisions will be
made at various points in design and production.
The Determinants of Quality

1. The degree to which a product or a service successfully satisfies its intended

purpose has four primary determinants:
Design.
How well the product or service conforms to the design.
Ease of use.
Service after delivery.
2. The design phase is the starting point for the level of quality eventually achieved.
3. Design involves decisions about the specific characteristics of a product or service
such as size, shape, and location.
4. Quality of design refers to the intention of designers to include or exclude certain
features in a product or service.
5. Design decisions must take into account customer wants, production or service
capabilities, safety and liability (both during production and after delivery), costs,
and other similar considerations.
6. Designers may determine customer wants from information provided by
marketing, perhaps through the use of consumer surveys or other market research.
7. Marketing may organize focus groups of consumers to express their views on a
product or service (what they like and dont like, and what they would like to
have).
8. A poor design can result in difficulties in production or service.
9. Moreover, if a design is inadequate or inappropriate for the circumstances, the
best workmanship in the world may not be enough to achieve the desired quality.
10. Also, we cannot expect a worker to achieve good results if the given tools or
procedures are inadequate.
11. Similarly, a superior design usually cannot offset poor workmanship.
12. Quality of conformance refers to the degree to which goods and services
conform to (i.e., achieve ) the intent of the designers. This is affected by factors
such as the capability of equipment used; the skills, training, and motivation of
workers; the extent to which the design lends itself to production; the monitoring
process to assess conformance; and the taking of corrective action (e.g., through
problem solving) when necessary.
13. One important key to quality is reducing the variability in process outputs.
14. The determination of quality does not stop once the product or service has been
sold or delivered.
15. Ease of use and user instructions are important. They increase the chances, but do
not guarantee, that a product will be used for its intended purposes and in such a
way that it will continue to function properly and safely.
16. Much consumer education takes the form of printed instructions and labeling.
Thus, manufacturers must ensure that directions for unpacking, assembling, using,
maintaining, and adjusting the productand what to do if something goes wrong
are clearly visible and easily understood.
Benefits of Good Quality

1. Business organizations with good or excellent quality typically benefit in a variety

of ways:
an enhanced reputation for quality
the ability to command premium prices
an increased market share
greater customer loyalty
lower liability costs
fewer production or service problemswhich yields higher productivity
fewer complaints from customers
lower production costs
higher profits.
The Consequences of Poor Quality
1. Some of the major areas affected by quality are
Loss of business.
Liability.
Productivity.
Costs.
2. Poor designs or defective products or services can result in loss of business.
3. Failure to devote adequate attention to quality can damage a profit-oriented
organizations reputation and lead to a decreased share of the market, or it can
lead to increased criticism and/or controls for a government agency or nonprofit
organization.
4. Organizations must pay special attention to their potential liability due to damages
or injuries resulting from either faulty design or poor workmanship. This applies
to both products and services.
5. An organizations liability costs can often be substantial, especially if large
numbers of items are involved, as in the automobile industry, or if potentially
widespread injury or damage is involved.
6. Productivity and quality are often closely related.
7. Poor quality can adversely affect productivity during the manufacturing process if
parts are defective and have to be reworked or if an assembler has to try a number
of parts before finding one that fits properly.
8. Also, poor quality in tools and equipment can lead to injuries and defective
output, which must be reworked or scrapped, thereby reducing the amount of
usable output for a given amount of input.
9. Cost to remedy a problem is a major consideration in quality management.
10. The earlier a problem is identified in the process, the cheaper the cost to fix it.
11. The cost to fix a problem at the customer end has been estimated at about five
times the cost to fix a problem at the design or production stages.

Quality Certification

1. The International Organization for Standardization (ISO) promotes worldwide

standards for the improvement of quality, productivity, and operating efficiency
through a series of standards and guidelines.
2. Two of the most well-known of these are ISO 9000 and ISO 14000.
3. Both ISO 9000 and ISO 14000 relate to an organizations processes rather than its
products and services, and both stress continual improvement.
4. Moreover, the standards are meant to be generic; no matter what the
organizations business, if it wants to establish a quality management system or an
environmental management system, the system must have the essential elements
contained in ISO 9000 or in ISO 14000.
ISO 9000 and ISO 14000
1. ISO 9000 is a set of international standards on quality management and quality
assurance, critical to international business.
2. It concerns what an organization does to ensure that its products or services
conform to its customers requirements.
3. The ISO 9000 standards are critical for companies doing business internationally,
particularly in Europe.
4. They must go through a process that involves documenting quality procedures
and on-site assessment.
5. The process often takes 12 to 18 months.
6. With certification comes registration in an ISO directory that companies seeking
suppliers can refer to for a list of certified companies.
7. They are generally given preference over unregistered companies.
8. More than 40,000 companies are registered worldwide; three-fourths of them are
located in Europe.
9. In addition to the obvious benefits of certification for companies that want to deal
with the European Union, the ISO 9000 certification and registration process is
particularly helpful for companies that do not currently have a quality
management system; it provides guidelines for establishing the system and
making it effective.
10. ISO 9000 standards include the following categories:
System requirements
Management requirements
Resource requirements
Realization of requirements
Remedial requirements
11. Eight quality management principles form the basis of the latest version of ISO
9000:
A customer focus.
Leadership.
Involvement of people.

A process approach.
A system approach to management.
Continual improvement.
Use of a factual approach to decision making.
Mutually beneficial supplier relationships.

ISO 14000
1. ISO 14000 is a set of international standards for assessing a companys
environmental performance.
2. The standards for ISO 14000 certification bear upon three major areas:
Management systems systems development and integration of
environmental responsibilities into business planning.
Operations consumption of natural resources and energy.
Environmental systems measuring, assessing, and managing
emissions, effluents, and other waste streams.

Total Quality Management

1. Management plays a critical role in TQM.
2. The approach is reflected in an operating philosophy.
3. The term total quality management (TQM) refers to a quest for quality in an
organization.
4. TQM is a philosophy that involves everyone in an organization in a continual
effort to improve quality and achieve customer satisfaction.
5. There are three key philosophies in this approach:
one is a never-ending push to improve, which is referred to as continuous
improvement
the second is the involvement of everyone in the organization
the third is a goal of customer satisfaction, which means meeting or
exceeding customer expectations.

6. TQM expands the traditional view of qualitylooking only at the quality of the
final product or servicesto looking at the quality of every aspect of the process
that produces the product or service.
7. TQM systems are intended to prevent poor quality from occurring.
8. We can describe the TQM approach as follows:
i. Find out what customers want. This might involve the use of surveys,
focus groups, interviews, or some other technique that integrates the
customers voice in the decision-making process. Be sure to include the
internal customer (the next person in the process) as well as the external
customer (the final customer).
ii. Design a product or service that will meet (or exceed) what customers
want. Make it easy to use and easy to produce.
iii.
Design processes that facilitate doing the job right the first time.
Determine where mistakes are likely to occur and try to prevent them.
When mistakes do occur, find out why so that they are less likely to occur
again. Strive to make the process mistake-proof. This is sometimes
referred to as a fail-safing: Elements are incorporated in product or
service design that make it virtually impossible for an employee (or
sometimes a customer) to do something incorrectly. The Japanese term for
this is pokayoke.
iv. Keep track of results, and use them to guide improvement in the system.
Never stop trying to improve.
v. Extend these concepts throughout the supply chain.
9. Successful TQM programs are built through the dedication and combined efforts
of everyone in the organization.
10. Top management must be committed and involved.
11. A number of other elements of TQM are important:
Continuous improvement. The philosophy that seeks to improve all factors
related to the process of converting inputs into outputs on an ongoing basis is
called continuous improvement. It covers equipment, methods, materials,
and people. Under continuous improvement, the old adage If it aint broke,
dont fix it gets transformed into Just because it isnt broke doesnt mean it
cant be improved. The concept of continuous improvement was not new, but
it did not receive much interest in the United States for a while, even though it
originated here. However, many Japanese companies used it for years, and it
became a cornerstone of the Japanese approach to production. The Japanese
use the term kaizen to refer to continuous improvement. The successes of
Japanese companies caused other companies to reexamine many of their
approaches. This resulted in a strong interest in the continuous improvement
approach.

Competitive benchmarking. This involves identifying other organizations

that are the best at something and studying how they do it to learn how to
improve your operation. The company need not be in the same line of
business.
Employee empowerment. Giving workers the responsibility for
improvements and the authority to make changes to accomplish them provides
strong motivation for employees. This puts decision making into the hands of
those who are closest to the job and have considerable insight into problems
and solutions.
Team approach. The use of teams for problem solving and to achieve
consensus takes advantage of group synergy, gets people involved, and
promotes a spirit of cooperation and shared values among employees.
Decisions based on facts rather than opinions. Management gathers and
analyzes data as a basis for decision making.
Knowledge of tools. Employees and managers are trained in the use of
quality tools.
Supplier quality. Suppliers must be included in quality assurance and quality
improvement efforts so that their processes are capable of delivering quality
parts and materials in a timely manner.
Champion. A TQM champions job is to promote the value and importance of
TQM principles throughout the company.
Quality at the source. Quality at the source refers to the philosophy of
making each worker responsible for the quality of his or her work. The idea is
to Do it right the first time. Workers are expected to provide goods or
services that meet specifications and to find and correct mistakes that occur. In
effect, each worker becomes a quality inspector for his or her work. When the
work is passed on to the next operation in the process (the internal customer)
or, if that step is the last in the process, to the ultimate customer, the worker is
certifying that it meets quality standards.
Suppliers are partners in the process, and long-term relationships are
encouraged. This gives suppliers a vital stake in providing quality goods and
services. Suppliers, too, are expected to provide quality at the source, thereby
reducing or eliminating the need to inspect deliveries from suppliers.

Six Sigma
1. Six sigma is a business process for improving quality, reducing costs, and
increasing customer satisfaction.
2. The term six sigma has several meanings. Statistically, six sigma means having
no more than 3.4 defects per million opportunities in any process, product, or
service.

3. Conceptually, the term is much broader, referring to a program designed to reduce

the occurrence of defects to achieve lower costs and improved customer
satisfaction.
4. It is based on the application of certain tools and techniques to selected projects to
achieve strategic business results.
5. In the business world, six-sigma programs have become a key way to improve
quality, save time, cut costs, and improve customer satisfaction.
6. Six-sigma programs can be employed in design, production, service, inventory
management, and delivery.
7. It is important for six-sigma projects to be aligned with organization strategy.
8. Motorola pioneered the concept of a six-sigma program in the 1980s.
9. There are management and technical components of six-sigma programs.
10. The management component involves providing strong leadership, defining
performance metrics, selecting projects likely to achieve business results, and
selecting and training appropriate people.
11. The technical component involves improving process performance, reducing
variation, utilizing statistical methods, and designing a structured improvement
strategy, which involves definition, measurement, analysis, improvement, and
control.
12. A six-sigma improvement project typically has one or more objectives such as
reducing defects, reducing costs, reducing product and/or process variability,
reducing delivery time, increasing productivity, or improving customer
satisfaction.
13. The process is to define, measure, analyze, improve, and control (DMAIC).
14. The projects involve the use of management science tools as well as statistical
tools.
Obstacles to Implementing TQM
1. Among the factors of failing to implement TQM are:
Lack of a companywide definition of quality: Efforts arent coordinated;
people are working at cross-purposes, addressing different issues, and
using different measures of success.
Lack of a strategic plan for change: Without such a plan the chance of
success is lessened and the need to address strategic implications of
change is ignored.
Lack of a customer focus: Without a customer focus, there is a risk of
customer dissatisfaction.
Poor intraorganizational communication: The left hand doesnt know what
the right hand is doing; frustration, waste, and confusion ensue.
Lack of employee empowerment: Not empowering employees gives the
impression of not trusting employees to fix problems, adds red tape, and
delays solutions.

View of quality as a quick fix: Quality needs to be a long-term,

continuing effort.
Emphasis on short-term financial results: Duct-tape solutions often treat
symptoms; spend a little nowa lot more later.
Inordinate presence of internal politics and turf issues: These can sap
the energy of an organization and derail the best of ideas.
Lack of strong motivation: Managers need to make sure employees are
motivated.
Lack of time to devote to quality initiatives: Dont add more work without
adding additional resources.
Lack of leadership: Managers need to be leaders.

Criticisms of TQM
1. The following are some of the major criticisms:
Overzealous advocates may pursue TQM programs blindly, focusing
attention on quality even though other priorities may be more important
(e.g., responding quickly to a competitors advances).
Programs may not be linked to the strategies of the organization in a
meaningful way.
Quality-related decisions may not be tied to market performance. For
instance, customer satisfaction may be emphasized to the extent that its
cost far exceeds any direct or indirect benefit of doing so.
Failure to carefully plan a program before embarking on it can lead to
false starts, employee confusion, and meaningless results.
Organizations sometimes pursue continuous improvement (i.e.,
incremental improvement) when dramatic improvement is needed.
Quality efforts may not be tied to results.
The Plan-Do-Study-Act (PDSA) Cycle
1. The PDSA cycle is a framework for problem solving and improvement activities.
2. The plan-do-study-act (PDSA) cycle, also referred to as either the Shewhart
cycle or the Deming wheel, is the conceptual basis for problem-solving activities.
3. There are four basic steps in the cycle:
i. Plan. Begin by studying the current process. Document that process. Then
collect data on the process or problem. Next, analyze the data and develop
a plan for improvement. Specify measures for evaluating the plan.
ii. Do. Implement the plan, on a small scale if possible. Document any
changes made during this phase. Collect data systematically for
evaluation.
iii.
Study. Evaluate the data collection during the do phase. Check how
closely the results match the original goals of the plan phase.

iv.

Act. If the results are successful, standardize the new method and
communicate the new method to all people associated with the process.
Implement training for the new method. If the results are unsuccessful,
revise the plan and repeat the process or cease this project.