TOTAL QUALITY MANAGEMENT

CHAPTER 1

Introduction to Quality
LECTURE NOTES

DR. AMIRA OMAR

 Chapter 1
Introduction to Quality
Quality is by no means a new concept in modern business. In October 1887,
William Cooper Procter, grandson of the founder of Procter & Gamble, told
his employees, "The first job we have is to turn out quality merchandise that
consumers will buy and keep on buying. If we produce it efficiently and
economically, we will earn a profit, in which you will share." Procter's
statement addresses three critical issues to managers of manufacturing and
service organizations: productivity, cost, quality. Productivity (the measure of
efficiency defined as the amount of output achieved per unit of input), the cost
of operations, and the quality of the goods and services that create customer
satisfaction all contribute to profitability. Of these three determinants of
profitability, the most significant factor in determining an organization's long-
run success or failure is quality.

IMPORTANCE OF QUALITY
1. Quality is uniquely positioned to accelerate organizational growth
through better execution and alignment
2. Quality provides the voice of the customer critical to developing
innovative products and services.
3. Quality can provide an organization with a competitive edge
4. "No quality, no sales. No sales, no profit. No profit, no jobs."

DEFINING QUALITY
Quality can be confusing partly because people view quality subjectively and
in relation to different criteria based on their individual roles in the
production-marketing value chain. In addition, the meaning of quality
continues to evolve as the quality profession grows and matures. Neither
consultants nor business professionals agree on a universal definition. The
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Quality Improvement Glossary defines quality as a subjective term for which
each person has his or her own definition
For example, one study that asked managers of 86 firms in the eastern United
States to define quality produced several dozen different responses, including
the following:
1. Perfection
2. Consistency
3. Eliminating waste
4, Speed of delivery
5. Compliance with policies and procedures
6. Providing a good, usable product
7. Doing it right the first time
8. Delighting or pleasing customers
9. Total customer service and satisfaction
Thus, it is important to understand the various perspectives from which
quality is viewed to fully appreciate its role in the many parts of a business
organization. Quality can be defined from six different perspectives:
transcendent, product, value, user, manufacturing, and customer.

Transcendent (Judgmental) Perspective

One common notion of quality, often used by consumers, is that it is
synonymous with superiority or excellence. In 1931, Walter Shewhart, who
was one of the pioneers of quality control, first defined quality as the goodness
of a product. This view is referred to as the transcendent (transcendent, "to
rise above or extend notably beyond ordinary limits"), or judgmental, the
definition of quality. In this sense, quality is both absolute and universally
recognizable, a mark of uncompromising standards and high achievement »
Common examples of products associated with an image of excellence are
Rolex watches, Ritz-Carlton hotels, and Lexus automobiles. From this
perspective, quality cannot be defined precisely—you just know it when you

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see it. However, it is often loosely related to the aesthetic characteristics of
products that are promoted by marketing and advertising. Product excellence
is also often associated with higher prices. However, high quality is not
necessarily correlated with a price.
Excellence is abstract and subjective, and standards of excellence may vary
considerably among individuals. Hence, the transcendent definition is of little
practical value to managers. It does not provide a means by which quality can
be measured or assessed as a basis for practical business decisions.

product Perspective
Another quality definition is related to the quantity of some product attributes,
such as the thread count of a shirt or bed sheet or the number of different
features in an automobile or a cell phone. This assessment indicates that larger
numbers of product attributes are equivalent to higher quality, So designers
often try to incorporate more features into products, whether the customers
want them or not. As with the transcendent notion of quality, the assessment
of product attributes may vary considerably among individuals. Thus, good
marketing research is needed to understand what features customers want in
a product.
User Perspective
Individuals have different wants and needs and, hence, different expectations
of a product. This leads to a user-based definition of quality-fitness for
intended use, or how well the product performs its intended function.
For example, a U.S. appliance company whose stoves and refrigerators were
admired by Japanese buyers. But, unfortunately, the smaller living areas of
the typical Japanese home lack enough space to accommodate the U.S.
models. Some do not even pass through the narrow doors of Japanese
kitchens. So, although the pro performance characteristics were high, the
products were not fit for use in Japan.

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Value Perspective
A fourth approach to defining quality is based on value: the relationship of
product benefits to price. Consumers no longer buy only on the basis of price.
They compare the quality of the total package of goods and services that a
business' offers (sometimes called the customer benefit package) with price
and with competitive offerings. The customer benefit package includes the
physical product and its quality dimensions; presale support, such as ease of
ordering; rapid, on-time, and accurate delivery; and postsale support, such as
field service, warranties, and technical support. If competitors offer better
choices for a similar price, consumers will rationally select the package with
the highest perceived quality. If a competitor offers the same quality package
of goods and services at a lower price, customers would generally choose the
one having a lower price. From this perspective, a quality product is one that
provides similar benefits as competing products at a lower price or one that
offers greater benefits at a similar price. A good example is standard
pharmaceuticals, which usually provide the same medical benefits at a lower
price.
Competition demands that businesses continually seek to satisfy consumers'
needs at prices. The ability to keep prices low requires a strong internal focus
on efficiency and quality, as quality improvements in operations generally
reduce costs by reducing scrap and rework. Thus, organizations must focus on
continually improving both the consumer benefit package and the quality and
efficiency of their internal operations.

Manufacturing Perspective
Having standards for goods and services and meeting these standards leads to
the fifth definition of quality: conformance to specifications. Specifications
are targets and tolerances determined by designers of goods and services.
Targets (formally called nominal specifications) are the ideal values for which
production is to strive; tolerances are necessary because it is impossible to
meet targets all of the time. In manufacturing, for example, a part dimension
might be specified as "0.236 + 0.003 cm." These measurements would mean
that the target, or ideal value, is 0.236 centimeters and that the allowable
variation (tolerance) is 0.003 centimeters from the target. Thus, any dimension
in the range of 0.233 to 0.239 centimeters would conform to specifications.
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Likewise, in services, "on-time arrival" for an airplane is typically defined as
being within 15 minutes of the scheduled arrival time. The target is the
scheduled time, and the tolerance is specified; to be 15 minutes. However,
specifications are meaningless if they do not reflect attributes that are deemed
important to the consumer. This definition provides an unambiguous way to
measure quality and determine if a good is manufactured or service is
delivered as it was designed.
Coca-Cola strives to ensure that customers will enjoy the taste of its products
anywhere in the world. Service organizations likewise strive for consistency
in performance; The Ritz-Carlton Hotel Company, for example, seeks to
ensure that its customers will have the same quality experience at any of their
properties around the world.

Customer Perspective
The American National Standards Institute (ANSI) and the American Society
for Quality (ASQ) standardized official definitions of quality terminology in
1978. They defined quality as the totality of features and characteristics of a
product or service based on its ability to satisfy given needs. This definition
draws heavily on the product and user definitions and is driven by creating
satisfied customers. However, by the end of the 1980s, many organizations
had begun using a simpler, yet powerful, customer-based definition of quality
that remains popular today: meeting or exceeding customer expectations. To
understand this definition, one must first understand the meanings of the
customer." Most people think of a customer as the fundamental purchaser of
a product or service; for instance, the person who buys an automobile for
personal use or the guest who registers at a hotel is considered an ultimate
purchaser. These customers are more specifically referred to as consumers.
Clearly, meeting the expectations of consumers is the ultimate goal of any
business. However, before a product reaches consumers, it may flow through
a chain of many firms or departments, each of which adds value to the product.
For example, an automobile engine plant may purchase steel from a steel
company, produce engines, and then transport the engines to an assembly
plant. The steel company is a supplier to the engine plant; the engine plant is
a supplier to the assembly plant. The engine plant is thus a customer of the

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steel company, and the assembly plant is a customer of the engine plant. These
customers are called external customers.
Every employee in an organization also has internal customers who receive
goods or services from suppliers within the organization. An assembly
department, for example, is an internal customer of the machining department,
and a person on an assembly line is an internal customer of the person who
performs the previous task. Most businesses consist of many such "chains of
customers." Thus, an employee's job is to satisfy the needs of their internal
customers, or the entire system can fail. This focus is a radical departure from
traditional ways of thinking in a functionally oriented organization. It allows
workers to understand their role in the larger system and their contribution to
the final product. (Who are the customers of a university, its instructors, and
its students?).
Customer-driven quality is fundamental to high-performing organizations.

Integrating Quality Perspectives in the Value Chain

Individuals in different business functions—for example, the designer,
manufacturer or service provider, distributor, or customer-speak different
languages." Thus, different quality perspectives at different points in the value
chain are important to ultimately create and deliver goods and services that
will satisfy customers' needs and expectations. To understand this more
clearly, examine Figure 1.1, which shows the essential elements of the value
chain in manufacturing for developing, producing, and distributing goods to
customers. The customer is the driving force for the production of goods and
services, and customers generally view quality from either the transcendent or
the product perspective. Goods and services produced should meet customers'
needs and expectations. It is the role of the marketing function to determine
these. Hence, the user perspective is meaningful to people who work in
marketing.
The manufacturer must translate customer requirements into detailed product
and process specifications. Making this translation is the role of research and
development, product design, and engineering. Product specifications might
address such attributes as size, form, finish taste, dimensions, tolerances,
materials, operational characteristics, and safety features. Process
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specifications indicate the types of equipment, tools, and facilities to be used
in production. Product designers must balance performance and cost to meet
financial and marketing objectives; thus, the value perspective of quality is
most useful at this stage.
The manufacturing function is responsible for guaranteeing that design
specifications are met during production and that the final product performs
as intended. Thus, for production workers, quality is defined by the
manufacturing perspective.
Each function is an internal customer of others throughout the value chain,
and the firm itself may be an external customer or supplier to other firms.
Thus, the customer perspective provides the basis for coordinating the entire
value chain.

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QUALITY IN MANUFACTURING
Quality management is rooted in manufacturing; therefore, that's where we
will begin.

Figure 1.2 illustrates a typical manufacturing system and the key relationships
among its functions. The quality concerns of each component of the system
are described next.

Marketing and Sales

Marketing and sales involve much more than advertising and selling. Today,
marketing and sales employees have important responsibilities for quality,
such as learning the products and product features that consumers want and
knowing the prices they are willing to pay for them. This information enables
a firm to define products that are fit use and capable of being produced within
the technological and budgetary constraints of the organization. In addition,
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salespeople can help to obtain feedback on product performance from
customers and convey this information to product designers and engineers for
further improvements. They should also help to ensure that customers receive
aide assistance and are completely satisfied.

Product Design and Engineering

Under-engineered products will fail in the marketplace because they will not
meet customer needs. Products that are over-engineered, that is, those that
exceed the customer requirements may not find a profitable market. Japanese
automakers, for instance, discovered in the early 1990s that many consumers
were unwilling to pay for some luxury features they had designed into their
cars as standard features. Poorly designed manufacturing processes result in
poor quality or higher costs. Good design can help prevent manufacturing
defects and service errors and reduce the need for non-value-adding
inspection practices that have dominated the U.S. industry.

Purchasing and Receiving

The quality of purchased parts and services and the timeliness of their delivery
are critical. The purchasing department can help a firm achieve quality by:
• Selecting quality-conscious suppliers
• Ensuring that purchase orders clearly define the quality requirements
specified by product design and engineering
• listing long-term supplier relationships based on trust
• Informing suppliers of any problems encountered with their goods
• Good communication with suppliers as quality requirements and design
changes occur
The receiving department is the link between purchasing and production. It
must ensure that the delivered items are of the quality specified by the
purchase contract through various inspection and testing policies. If the
incoming material is of high quality, extensive inspection and testing are not
necessary. Many companies now require that their suppliers prove that their
processes can consistently turn out products of specified quality and give
preferential treatment to those who can.
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Production Planning and Scheduling
A production plan specifies long-term and short-term production
requirements for filling customer orders and meeting anticipated demand. The
correct materials, tools, and equipment must be available at the proper time
and in the proper places to maintain a smooth production flow.

Manufacturing and Assembly

The role of manufacturing and assembly in producing quality is to ensure that
the product is made correctly. The linkage to design and process engineering,
as noted earlier, is obvious; manufacturing cannot do its job without a good
product design and good process technology. Once in production, however,
no defects should be acceptable. If and when they do occur, every effort must
be made to identify their causes and eliminate them. Inspecting out already
defective items is costly and wasteful.

Tool Engineering
The tool engineering function is responsible for designing and maintaining the
tools used in manufacturing and inspection. Damaged manufacturing tools
result in defective parts. These and other tool problems lead to poor quality
and inefficiency.

Industrial Engineering and Process Design

The job of industrial engineers and process designers is to work with product
design engineers to develop realistic specifications. In addition, they must
select appropriate technologies, equipment, and work methods for producing
quality products.

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Finished Goods Inspection and Testing
If quality is built into the product properly, inspection should be unnecessary
except for auditing purposes and functional testing. In any case, inspection
should be used to gather the information that can be used to improve quality,
not simply to remove defective items.

Packaging, Shipping, and Warehousing

Even good-quality items that leave the plant floor can be incorrectly labeled
or damaged in transit. Packaging, shipping, and warehousing-often termed
logistics activities—are the functions that protect quality after goods are
produced. Accurate coding and expiration dating of products is important for
traceability (often for legal requirements) and customers.

Installation and Service

Products must be used correctly to benefit the customer. Users must
understand a product and have adequate instructions for proper installation
and operation. Should any problem occur, customer satisfaction depends on
good after-the-sale service.

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