MODULE 1

We all understand what Quality is. ‘This is a high quality product’ we explain to others whenever
we like a product that we enjoy; sometimes this product/service is something expensive but many
other times, it is not. Interestingly, Quality is not easy to define. There are several different
definitions of Quality, most of them are true, and therefore, complementary.
Moreover, Quality refers not only to a characteristic of products and services, but also to a
management approach (Total Quality, or Total Quality Management) that was very successful in
Japan during their post-war efforts to recover their economy, and has been improved and
upgraded ever since.
Now, you will review several definitions required to understand what Quality is. You will also
review why Quality is important and how it is related to the competitiveness (and therefore,
success) of organizations. Total Quality Management (TQM) will be reviewed, as a framework
and introduction to understanding other approaches, concepts, systems and methodologies.
You will close these topics by discussing the level of adoption of TQM in organizations and how
this level can be evaluated.
Topic 1.1 Quality as a key factor to competitiveness
Let’s start by reading the experience of Professor Francisco Tamayo about how Quality can be a
key to competitiveness:
Quality as a key factor to competitiveness

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1.1.1 Quality Management Strategies
ISO/DIS 9001 [2014, p. 18] defines:

Topic 1.2 Management theory and Total Quality Management

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“Quality has to be managed. It will not just happen” [Oakland, 2003, p. 7]. Careful planning and
continuous decision taking are required in order to make sure that products and services satisfy
customers’ requirements. But Quality is so important for organizations, that a whole management
approach was designed with Quality as a final objective. This approach was called TQM.
According to the ASQ [2014], TQM is “a term first used to describe a management approach
to quality improvement. Since then, TQM has taken on many meanings. Simply put, it is a
management approach to long-term success through customer satisfaction. TQM is based on all
members of an organization participating in improving processes, products, services and the
culture in which they work. The methods for implementing this approach are found in the
teachings of such quality leaders as Philip B. Crosby, W. Edwards Deming, Armand V.
Feigenbaum, Kaoru Ishikawa and Joseph M. Juran.”
ASQ [1999, p.3] refers that TQM is a holistic approach to management that involves “knowledge
of the principles and techniques from behavioral sciences, quantitative and non-quantitative
analysis, economics, and system analysis to continuously improve the quality of all activities and
relationships.”
Topic 1.3 Quality concepts: systems thinking, stakeholders and quality dimensions, the
PDCA cycle, continuous Improvement
It is important to understand some definitions in order to be able to establish a reference
framework. Click [here] to see the list of some of the most important definitions, as well as their
references.
Topic 1.4 Historical approaches to Quality Management
With all the concepts that Quality encloses, previously reviewed, it is possible to state that Quality
started with mankind. As a matter of fact, it is possible that all species know about quality, when
they decide that this wood is of a ‘better quality’ in order to build a nest, that this soil is of a ‘better
quality’ to grow, or that this food ‘is of better quality’. In nature, usually the measure of
competitiveness is survival, therefore choosing materials, nutrients and soil of the adequate
Quality seems to be very important.
A different level of Quality was required when the first tools were built and our ancestors needed
to choose the correct parameters for manufacturing tools of the required Quality level. Later on,
Quality and need led to interchange and therefore, to competitiveness of families and once again,
to survival.
ASQ [1999, p.3] mentions the following events that mark the evolution of TQM:

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Japan was tremendously successful with the TQM approach. This management approach helped
turning post-war Japan into an industrial and economic power. This ‘Japanese miracle’ finally
made companies in the West notice that something radical has happened in Japan… Oakland
[2003, p.18] points out that it was in the early 1980s when “organizations in the West started to be
seriously interested in quality and its management.”

There were several famous American philosophers (also called ‘gurus’) who have shaped the
basis of the current concepts of Quality and of our understanding of Quality. Of those
teachers, Dr. Williams Edwards Deming, who was able to condense in 14 points his guidance
for management, has been the most influential.
According to ASQ [1999, p.5], TQM has the following primary elements:

 TQM is customer-focused: This means that quality is always focused in customer and
satisfying customers’ requirements.

 TQM requires total employee involvement: Quality cannot happen without all employees’
active participation. You could have a world-in-class manufacturing system, but if the front-line
employee is not involved at the store, he could easily affect the whole image and reputation of
the company.

 TQM is organization centered: Both the organizational structure and working philosophy
shall be aligned with TQM for TQM to work. If TQM is not actively supported and promoted
from Top Management, it has little opportunity of becoming successful.

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 TQM requires an integrating system: An integrating system connects business
improvement elements in an attempt to continuously improve and exceed the expectations of
customers, employees and other stakeholders.

 TQM requires a strategic and a systematic approach: A critical part of quality management
is the strategic and systematic approach to achieving the vision, mission, and goals of an
organization. This process is also called strategic planning.

 TQM requires process improvement: A key element of TQM is to develop an organization

capable of challenging its key processes for continuous improvement.

 TQM require effective communications: Effective communications play a large part in

maintaining morale and in motivating employees at all levels. Communication can also be
defined as coordination for action. Morale, motivation and coordination are all required for an
effective TQM program.

Topic 1.5 Levels of adoption of Total Quality Management

You can measure nonconformities in ISO 9001 audits, but audits randomly assess different
processes and there are different levels of auditors; or you can see their quality metrics (such as
claims, defects-per-million-units, rejections, etc.), but these metrics could be misaligned with the
market requirements… Or you can see this year financial results, but maybe the organization was
lucky this year, and next one they will be out of the market. Therefore, the only way an
organization can be competitive year after year, is if they have a robust quality system and they
follow the TQM concepts, such as the 14 Deming Points.
However, there are 2 internationally recognized approaches to assess the level of adoption of
TQM:

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Fundamentals of Total Quality

Quality is not about concepts, but it is more about business strategies and tactics for
competitiveness. However, there many concepts and ideas that together integrate the ‘Quality
Philosophy’ or ‘Quality Mindset’ and that are useful in order to provide a framework to quality
systems and tools. Each organization shall select and define its own ‘Quality Philosophy’, one that
is aligned to the company culture and values. In the next modules, you will review some models,
systems and tools that can be used in order to put in practice the concepts reviewed in this
module.

Module Glossary

 Quality: “A subjective term for which each person or sector has its own definition. In technical
usage, quality can have two meanings: 1. the characteristics of a product or service that bear
on its ability to satisfy stated or implied needs; 2. a product or service free of deficiencies ”
ASQ [2014].
 Total Quality Management: “Term first used to describe a management approach to quality
improvement” ASQ [2014].
 Continuous Quality Improvement (CQI): “A philosophy and attitude for analyzing
capabilities and processes and improving them repeatedly to achieve customer satisfaction”
ASQ [2014].
 PDCA Cycle: Effective improvement technique developed by Walter Shewhart. It is
sometimes called the Shewhart Cycle or the Deming Cycle. Its four steps are Plan, Do,
Check, Act [ASQ, 2008, p.320].

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 MODULE 2

In order to achieve quality, variability needs to be minimized. In order to minimize variability,

processes need to be measured, controlled, improved and standardized. Also there are certain
minimal requirements that organizations need to meet, depending on the specific segment in
which they perform. Finally, several organizations believed that their suppliers’ processes needed
to be evaluated in a standardized, objective way. All these factors, together with the
internationalization of products distribution, components manufacturing and currently services
supply, have made internationally recognized standards and norms very important and even a
requirement for doing business for some organizations.
In this module, some international standards and norms will be reviewed. In order to fully
understand each standard or norm in detail, it is necessary to read it. However, an overview of a
group of representative standards and norms is provided in this module.
Topic 2.1 Quality Management Standards: ISO 9000 family
According to the ISO website [ISO, 2014] “The ISO 9000 family addresses various aspects of
quality management and contains some of ISO’s best known standards. The standards provide
guidance and tools for companies and organizations who want to ensure that their products and
services consistently meet customer’s requirements, and that quality is consistently improved.”
There are 4 standards that integrate the ISO 9000 family [ISO, 2014]:

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These standards are periodically reviewed, and therefore, ISO 9001 Quality Management
Systems is currently under review. In 2014 a draft version of this standard was released, so many
of the concepts and references of this text will be based on this draft and updated when the final
version of the standard is released. The final updated version is expected by the end of 2015.
2.1.1 ISO 9001
“ISO 9001 specifies requirements aimed primarily at giving confidence in the products and
services provided by an organization and thereby improving customer satisfaction. Its proper
implementation can also be expected to bring other organizational benefits such as improved
internal communications, better understanding and control of the organization's processes, and
reduction in defects and waste” [ISO/DIS 9001, 2014, p. 7].
It is interesting that in their definition, ISO does not talk about ‘increasing competitiveness’ or
something similar. Since competitiveness depends on a lot of factors, both internal and external, it
is understandable that this was not included in the scope of this international standard.

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Topic 2.2 Environmental Quality Management Standards: ISO 14001
According to ISO website [ISO, 2014] ISO 14001 International Standard “specifies requirements
for an environmental management system to enable an organization to develop and implement a
policy and objectives which take into account legal requirements and information about significant
environmental aspects.” It is intended to apply to all types and sizes of organization and to
accommodate diverse geographical, cultural and social conditions.” The basis of ISO 14001
approach is presented in next figure:

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You can measure nonconformities in ISO 9001 audits, but audits randomly assess different
processes and there are different levels of auditors; or you can see their quality metrics (such as
claims, defects-per-million-units, rejections, etc.), but these metrics could be misaligned with the
market requirements… Or you can see this year financial results, but maybe the organization was
lucky this year, and next one they will be out of the market. Therefore, the only way an
organization can be competitive year after year, is if they have a robust quality system and they
follow the TQM concepts, such as the 14 Deming Points.
ISO webpage [ISO, 2014] also states that a system of this kind “enables an organization to
develop an environmental policy, establish objectives and processes to achieve the policy
commitments, take action as needed to improve its performance and demonstrate the conformity
of the system to the requirements of this International Standard.”
The overall objective of ISO 14001 is “to support environmental protection and prevention of
pollution in balance with socio-economic needs. It should be noted that many of the requirements
can be addressed concurrently or revisited at any time” [ISO, 2014].
Topic 2.3 Other models
2.3.1 Hazard Analysis & Critical Control Points (HACCP)
According to United States Food and Drug Administration (FDA, 2014) HACCP is:

It is an instrument for evaluating hazards and establishing control systems based in prevention,
not in final product evaluations.
2.3.2 Occupational Health and Safety Management System (BS OHSAS 18001 and ISO
45001)
According to the BSI: British Standards Institution website [2014], BS OHSAS 18001 is:

However, BSI website [2014] also announced that “a new ISO standard, ISO 45001 for an
occupational health and safety management system is being produced which is envisaged to
replace BS OHSAS 18001.”

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Topic 2.4 Management Integrated System
As explained in the TQM elements section, an integrated system connects business improvement
elements in an attempt to continuously improve and exceed the expectations of customers,
employees and other stakeholders [ASQ, 1999, p.5]. The integration of quality and environmental
standards with the organizational business model is not only possible, but highly advisable.

Total Quality Management Systems

It is important to understand that some standards are general, since they need to be able to
consider all kind of organizations, regardless of their segment or product. Some other standards
and norms, like the automotive standard TS-16949, can be more specific since they are designed
for the suppliers of a particular market segment, who share requirements and needs. It is also
important to consider that norms can be mandatory in some industries, and that some standards
like ISO 9001 or ISO 14001 can be required by different organizations in order to do business
with their suppliers.
On the other hand, being certified to a certain standard does not assure competitiveness. There
could be an organization that complies with all requirements of ISO 9001 and follows their
procedures as documented, but chose the incorrect market segment and was unwilling to change
on time. Therefore, some awards have been designed in order to recognize those organizations
which business models that have proven to be successful. In order to assess these organizations,
different models have been developed worldwide. In the next module, these awards and their
models will be discussed.
Module Glossary

 ISO 9001: International standard that sets out the requirements of a quality management
system [ISO, 2014].
 ISO 14001: International standard that specifies the requirements for an environmental
management system [ISO, 2014].
 HACCP: Management system in which food safety is addressed through the analysis and
control of biological, chemical, and physical hazards from raw material production,
procurement and handling, to manufacturing, distribution and consumption of the finished
product” [FDA, 2014].
 BS OHSAS 18001: Framework for an occupational health and safety management system.

Module References

 ASQ: American Society for Quality Management Division. (1999). The Certified Quality
Manager Handbook. Milwaukee, WI: ASQ Quality Press.
 BSI: The British Standards Institution. (2014). BSI. Retrieved November 8, 2014,
from http://www.bsigroup.com/en-GB/ohsas-18001-occupational-health-and-safety/

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 FDA: U.S. Food and Drug Administration. (2014). fda.gov. Retrieved November 08, 2014,
from http://www.fda.gov/Food/GuidanceRegulation/HACCP/
 ISO. (2005). ISO 9000:2005 Quality Management Systems Fundamentals and Vocabulary.
Geneva: International Organization for Standardization.
 ISO. (2014). Draft International Standard ISO/DIS 9001. Geneva: International Organization
for Standardization (ISO).
 ISO. (2014). iso.org. Retrieved 2014, from ISO 14001:2004
(en): https://www.iso.org/obp/ui/#iso:std:iso:14001:ed-2:v1:en

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 MODULE 3

In order to promote and recognize competitiveness, many countries have established national
quality awards given annually to those organizations that voluntarily decide to participate in these
events. In order to be able to evaluate competing organizations with the same reference, models
and criteria are developed and auditors trained in order to be able to assess compliance of
organizations to these models. Usually, only organizations established within the country (or
countries) that promote the award may participate, but there are different rules and criteria for
each prize. In this module, some of the most important quality awards worldwide will be reviewed,
with special emphasis on those models related to Mexico and Latin America.

Topic 3.1 Malcom Baldrige National Quality Award

“An award established by the U.S. Congress in 1987 to raise awareness of quality management
and recognize U.S. companies that have implemented successful quality management systems.
Awards can be given annually in six categories: manufacturing, service, small business,
education, healthcare and nonprofit. The award is named after the late Secretary of Commerce
Malcolm Baldrige, a proponent of quality management. The U.S. Commerce Department’s
National Institute of Standards and Technology manages the award, and ASQ administers it”
[ASQ, 2014].

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Topic 3.2 European Foundation for Quality Management Excellence Model
According to EFQM webpage [2014], the EFQM Excellence Model “provides a holistic tool for
assessing how effective you are in developing and delivering a stakeholder focused strategy. The
4 result areas focus on what's important to the 4 key stakeholder groups. At its simplest level, the
Model is a cause and effect diagram. If we want to achieve a different result, we need to change
something we do within the organization.”
“The EFQM Excellence Model is based on nine criteria. Five of these are ‘Enablers’ and four are
‘Results’. The ‘Enabler’ criteria cover what an organization does and how it does it. The ‘Results’
criteria cover what an organization achieves [EFQM, 2014].”

EFQM also has a quality award: “The EFQM Excellence Award is organized once a year and it is
designed to recognize Europe's best performing organizations, whether private, public or non-
profit. It recognizes industry leaders with an indisputable track record of success in turning
strategy into action and continuously improving their organization’s performance” [EFQM, 2014].
Topic 3.3 Mexico’s National Quality Award
The Mexican National Quality Award (Premio Nacional de Calidad) “is the maximum recognition
to innovation, competitiveness and sustainability that is awarded to organizations that are a
national benchmark, in order to have its example as an inspiration in the road to excellence of the
Mexican organizations” [PNC, 2014].

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Topic 3.4 The Deming Prize

JUSE website [2014] describes Deming Prize as “one of the

highest awards on TQM (Total Quality Management) in the world. It was established in 1951 in
commemoration of the late Dr. William Edwards Deming who contributed greatly to Japan’s
proliferation of statistical quality control after the World War II”.
On its application guide for the Deming Prize, JUSE [2014] states that “The Deming Prize is an
annual award presented to an organization that has implemented TQM suitable for its
management philosophy, scope/type/scale of business, and management environment.
Regardless of the types of business, any organization can apply for the Prize under certain
conditions, be it public or private, large or small, domestic or overseas, or part of or entire
organization”.
Topic 3.5 Ibero-American Quality Prize
According to FUNDIBEQ webpage [2014], the Ibero-American Quality Prize “was established in
1999 and it is “a project integrated to the Cumbre Iberoamericana de Jefes de Estado y de
Gobierno (Ibero-American Board of Chiefs-of-State and Government) coordinated by the SEGIB:
Secretaría General Iberoamericana (General Ibero-American Secretariat) and administered by

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FUNDIBEQ: Fundación Iberoamericana para la Gestión de la Calidad (Ibero-American
Foundation for Quality Management).”
The prize is based in the Ibero-American Model of Excellence in Management created by
FUNDIBEQ.
“FUNDIBEQ is a non-for-profit international organization, constituted and supported by a series of
public and private organizations that is promoting and developing the global quality management
in the Ibero-American context” [FUNDIBEQ, 2014]. This association was founded in 1998 and it
“integrates the experience of other countries with current developments in the implantation of
models and systems of excellence to achieve that its members improve their competitiveness and
consolidate their international competitive position” [FUNDIBEQ, 2014].

Business Excellence Models

National quality awards recognize and promote those organizations that are able to show
compliance with their models. These models include not only organizational culture, processes
and structure, but they also focus in results and competitiveness. Although several of these
models were initially designed for manufacturing organizations, currently most of the quality
awards are able to accept service organizations in their different categories. In the next module,
the main characteristics of service will be discussed.
Module Glossary

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 Quality awards: Prizes which different countries promote in order to incentive
competitiveness and sharing of best-practices.

Module References

 ASQ. (2014). Malcolm Baldrige National Quality Award (MBNQA). Retrieved November 2014,
from http://asq.org/learn-about-quality/malcolm-baldrige-award/overview/overview.html
 EFQM: European Foundation for Quality Management. (2014). efqm.org. Retrieved November
8, 2014, from http://www.efqm.org/about-us
 JUSE: The Deming Prize Committee Union of Japanese Scientists and Engineers. (2014).
The Application Guide for The Deming Grand Prize 2014 for Overseas. JUSE.
 JUSE: Union of Japanese Scientists and Engineers. (2014). http://www.juse.or.jp. Retrieved
November 8, 2014, from https://www.juse.or.jp/deming_en/award/
 NIST: The National Institute of Standards and Technology U.S Department of Commerce.
(2014, June 17). http://www.nist.gov. Retrieved November 2014,
from http://www.nist.gov/baldrige/publications/business_nonprofit_criteria.cfm
 Secretaria de Economía México. (2014). http://www.pnc.org.mx/. Retrieved November 2014,
from Premio Nacional de Calidad.

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 MODULE 4

Currently it is hard to find a company that does not provide services to its customers. Automotive
industry, for example, sales automobiles, and so on. But they also sale insurance, financial
products for credits, maintenance, customization, spare-parts and travel assistance, among other
services. And we cannot separate products from services.
Example: After years of having automobiles of the same company because of the quality of their
products, one person bought a car from a different company because of a service issue in one of
their dealerships.
Achieving world-class quality in products is hard; but at least in products there is usually a
specification and the customer usually does not see the process, just the product. Services have
some unique characteristics that make them harder to standardize, evaluate and improve towards
excellence. You will review these characteristics and some tools for design and improvement of
services in this module.
Topic 4.1 The Service Industry
More than 20 years ago, Zeithaml et al. [1990 p. 1] reported that “executives ranked the
improvement of service and tangible product quality as the single most critical challenge facing
U.S. business.” In addition, at that time services accounted for approximately 75 percent of the
US gross national product (GNP), and 90 percent of the new jobs the economy created. This
transition towards a service economy has represented a global trend and it is a major competitive
issue. Currently, all organizations virtually compete to some degree on the basis of service and it
is difficult to find a company for which service matters are currently unimportant [Zeithaml et al.,
1990].

Topic 4.2 Nature of Services

According to Parasuraman et al. [1985] three characteristics of services must be acknowledged
for a full understanding of service quality: intangibility, heterogeneity and inseparability.

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Topic 4.3 Service Design
According to George [2003] the key issue in designing is to understand that we do not really know
what customers want. Therefore, an adequate approach to design services is to use QFD, since it
focuses first in understanding the customer needs and then in establishing processes, parameters
and controls that assure that those needs are met.
According to Hunt and Killen [2004, p.934] QFD can be defined as “a practice-based methodology
to provide a reliable method of addressing customer needs in product development and
manufacturing while promoting and structuring cross-functional communication and information
sharing.”
There are different versions of the steps for QFD. The one described below (See Steps for QFD)
is a combination of the steps described by Castañeda-Calzada et al. [2009], and Vongpatanasin
and Mazur [2009]. Implementation samples will be provided in the section of case studies.

Steps for QFD

QFD Step 1: Customer segment for design identification

It is very important to define the customer segment that would be used for the design of the
process/service. Although a company may have several different customers, the design should
be done to satisfy the needs of a specific segment. The interviews to obtain the Voice of
Customer (VOC) need to be done to customers of this segment. This customer segment
identification will also let us choose an adequate gemba. Gemba is defined by Mazur [1999] as
“the place where the product or service becomes of value to the customer.”

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QFD Step 2: Obtaining the Voice of Customer

Voice of Customer (VOC) is what target segment customers communicate (either explicitly or
not) to us regarding their needs. Vongpatanasin and Mazur [2009, p. 36] state that there are
different kinds of data inputs we can collect in gemba. This data inputs include “observations
(things we can see), verbatims (things we hear), documents (written data provided by the
customer), notes (written data an inferences produced by the gemba visit team), and evidence
(physical specimens, samples, failed or destroyed pieces).”

A common mistake is to try to do surveys in order to obtain the VOC. Surveys are useful in other
stages of QFD, but they already limit customers to predefined options.
In this step, it is required to actually be in contact with target customers, interview them, ask them
about the needs they have regarding our product/service, understand ‘what for’ they need certain
features that they mention, see what they do, how they do it and why they do it.
Careful planning regarding where to go, what to see, what to ask and who should go to this gemba is
required in order to assure a successful and focalized gemba visit and useful VOC. If the VOC that we
obtain in this step is inadequate, all the design could be inadequate as well.

QFD Step 3: Transforming the Voice of Customer (VOC) into Customer Needs (CN)
Voice of Customer (VOC) tell us what the customers say, but we need to understand what the
customers need. This may not be the same.
Castañeda et al. [2009, p. 95] present a table with a couple of examples of verbatims (answers)
provided by a current guest (real) and a potential customer (potential).

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In the second example, the VOC of the customer is “I would like to be surprised, with my wife’s
favorite flowers in the room and that special song playing on the stereo.” Shall we do this for all our
customers? Are all of our customers willing to pay for the additional cost of this particular service? We
need to extract the Customer Need (CN) from this VOC.
An adequate follow-up question that needs to be asked whenever a customer provides us a specific
solution or parameter (‘favorite flowers’ are a specific solution to a need) is ‘What for you need this?’
Example:

 Customer: “I would like... flowers in the room” VOC: Voice of

Customer
 QFD Team: “What for you need flowers in the room?” Follow up
question
 Customer: “Because I need a hotel with personalized service” CN:
Customer Need

CN are generic: Personalized service. ‘My wife’s favorite flowers’ is not generic, because it only has a
particular solution. On the other hand, personalized service has a lot of different solutions that can be
useful for different customers. Imagine for one second that one policy of the hotel is ‘never use flowers
that are not alive’, due to its environmental-friendly style. If the CN is ´favorite flowers’, this customer
is lost. If it is ‘personalized service’, different solutions are available (favorite chocolates or dinner, for
example).
In order to make sure that a CN is written correctly, it is advisable to start a phrase with ‘I need…’ and
then connect it with the identified CN:

I need… personalized service

The previous CN has 3 important characteristics:

1. Is generic enough (is not a single solution)

2. Is specific enough (‘good service’ is too general; in this case, is useful to ask for examples)
3. It fits correctly in a sentence after ‘I need’ (‘I need… flowers’ does not sound well)

QFD Step 4: Customer Needs Prioritization

After transforming all the VOC obtained into Customer Needs (CN), it is usual to have a list of
several CN. Large, complex projects may even have over a hundred different CN. Therefore, it
is critical to identify those CN in which to focalize resources.
Tamayo-Enriquez et al. [2004, pp.984-985] state that “CN prioritization is critical, since the
design of products and services with QFD will be driven to fulfill these prioritized needs.
However it is not uncommon that customers say something that is different from what they
really need. Only through careful research can the real structure and weight of CNs be
determined.” In this step, structure and weight of CN need to be identified.

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QFD Step 4.1 Provide Structure
In order to provide structure, affinity diagrams could be used in order to establish a ‘CN Tree’. This CN
Tree is a hierarchical representation of the structure of CNs. One way of building a CN Tree is the
following:

1. Write all available CN in post-it papers

2. Ask a focus group of target customers to group together CN by affinity
3. QFD Team: Listen to this focus group, and help them identify missing CN
4. Structure ‘big CN’ as titles (Parent CN) and group of ‘small CN’ (Child CN) under these Parent
CN
5. Confirm that Child CN answer to the question ‘How?’ of their Parent CN
6. Confirm that Parent CN answer to the question ‘What for?’ of their Child CN
7. QFD Team shall review with focus group that an adequate CN Tree is achieved

A photo of a finished CN Tree is provided in Figure 6. Texts and context of this exercise are not
relevant, but it is important to see the final CN Tree as developed by the Customers Focus Group and
QFD Team after several iterations.

After the CN Tree is completed in a board, it is useful to document this structure in Excel. Most users
do not have specialized AHP software, therefore, it is useful to be able to use standard software for next
steps. A screenshot of an Excel CN Tree developed by Gonzalez et al. [2008] is shown in Figure 7. It is
easier to work in a horizontal tree (less design-time is required and it is always easy to include or
eliminate a CN). An Excel editable sample of a CN Tree will be provided together with this material.

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QFD STEP 4.2 Provide Weight to the CN Structure
All CN are important. And sometimes, a company becomes successful by exploiting a CN that has
been forgotten or ignored by their competitors. However, it is critical to understand the specific weights
that each CN has, because for customers some CN are much more important than others.
Tamayo et al. [2004] discuss several weighting methods of different complexity and accuracy, but they
mention several authors that point out that the Analytical Hierarchy Process (AHP) method of paired
comparisons is the most effective method for weighting CN. The detailed description of the AHP
method goes beyond the scope of this module, but an editable sample in Excel is provided within this
material.
In this step the important point is to be able to determine the importance of different CN. From a total
of 100%, importance of each CN is assigned a proportion (weight) that represents its relative
importance. For example, in Figure 8, CN1 is assigned 24% using 1-2-3 Prioritization Method and
around 29% using $100 Test Method. In this specific sample, CN1 seems to be very important to
customers in relation to other CN.

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QFD Step 5: Design processes to fulfill identified CN
Once we know the CN structure that our target customers require, and considering other regulations,
standards, specifications and organizational policies that may be applicable, the processes need to be
designed in order to fulfill this CN. Priority shall be given to those CN that are more important to our
customers.
It is also important to consider the current status of performance (for existing processes) and/or the
status of performance of competitors. A CN may be very important, but if the organization is
performing in an excellent level it may have a lower priority than a CN that is not that important, but
where the customers perceive that there is a big gap in the required performance level.
In the chart presented as Figure 9, Tamayo et al. [2004] documented in a project that the first CN (ice
cold beer) had a total weight of 31% and therefore, was more important than the second CN (accessible
price). However, customers’ evaluation of the first CN (24.8% achieved of 31% possible point) made
the performance gap smaller than the second CN. As a matter of fact, the CN with the largest gap (and
therefore, probably a candidate for resources for improvement) was the third CN (fast service).

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The process design for each service provided needs to consider the deliverable, the CN related to that
deliverable, the regulations and standards that need to be complied, and plan backwards the activities
required in order to provide it. The advantage of this ‘backwards planning’ is that focus will be put on
the customer and its requirements, and not in what the organization is capable of doing.
Some QFD practitioners use matrices in order to relate the process and parameters of the organization
with the CN. The idea behind the use of matrices, as once I had the honor to personally discuss in a
QFD Symposium with Dr. Yoji Akao, author of QFD, was to point out the non-linear relationship that
many times different processes and parameters have with CN. This is especially useful when there is a
conflict in which one parameter improves a CN, but negatively affects another one.

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The use of matrices is not a requirement for QFD and in many projects it adds unnecessary complexity
and hinders the true objective of QFD. Both of my QFD teachers, Dr. Akao and QFDI Director Glenn
Mazur, have shared this same point of view in several QFD symposiums and presentations.

Topic 4.4 Service Quality Measurement

It has been discussed that services are very important, but nevertheless, service worldwide does
not appear to have improved as much as customers require. As Zeithaml et al. [1990 p. 3]
wondered, “How do we explain the incongruity that service excellence pays off and yet it is in
such short supply?”
From a quality assurance standpoint, services present several challenges. Parasuraman et al.
[1985, p.42] point out three of the most important ones:

1 Service quality is more difficult for the consumer to evaluate than goods quality.

Service quality perceptions result from a comparison of consumer expectations

2
with actual service performance.

Quality evaluations are not made solely on the outcome of a service; they also
3
involve the evaluations of the process of service delivery.

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Parasuraman et al. [1985, p.47] list 10 criteria that regardless the kind of service, customers uses
to evaluate service:

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Topic 4.5 Implementation of Service Quality Strategies

Excellent service is a genuine key for a better future, for both

customers and suppliers [Zeithaml et al., 1990]. However, this can only be achieved with a
profound knowledge of evolving customer needs [Gonzalez and Tamayo-Enriquez, 2005].
Two supplementary strategies can be used in order to achieve excellence in service quality. A
proactive, design-based strategy, is the use of QFD in order to design (and upgrade) service
processes and parameters. This has been discussed to some detail previously within this module.
A second, more reactive approach, is to implement a Customer Complaint Management
System (CCMS) as the one described by Gonzalez and Tamayo-Enriquez [2005].
Customer Complaint Management Systems (CCMS)
As quoted by Gonzalez and Tamayo-Enriquez [2005], Dr. Deming believed that failures in service
and therefore complaints are inevitable due to the number of variables and perceptions involved
in service transactions. These authors also point out that in PDCA Cycle, feedback and learning
from mistakes are both “key ingredients for achieving true TQM and sustained profitability” [2005,
p.31].
“Complaints are expensive, both as direct and indirect costs. But for this price, companies can
extract priceless knowledge, because complaints contain the direct voice of the customer (VOC)”
[Tamayo-Enriquez and Gonzalez, 2005, p.31]. These authors point out that if complaints are
transformed into knowledge about customers, complaints can provide a valuable amount of
resources to organizations, but in order to exploit them, “organizations need to design, build,
operate and continuously upgrade systems for managing complaints.” These systems are
called Customer Complaints Management Systems (CCMS).
A model for CCMS proposed by Gonzalez and Tamayo-Enriquez [2005, p. 32] is presented in
Figure 11. In this model, different tools are used in order to upgrade services. Note that CCMS is
part of a general model for Quality Service.

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A more detailed explanation of each step and an example is presented in the paper by Gonzalez
and Tamayo-Enriquez [2005] included in the case studies section.

Service Quality

Service Quality is a difficult challenge for organizations, given its particular characteristics
described within this module. Nevertheless, careful design is required in order to achieve
excellence in quality service, as some organizations have already achieved.
In the next years, having an excellent product would probably not be enough if the Service Quality
of the services that supplement these products is not excellent as well. Moreover several
organizations have decided that it is useless separating their product from its services, since they
are ‘a package’. Therefore, from this point forward, whenever we refer to products, we also refer
to product and its supplementing services.
Given the nature of services, there is always the risk that errors and complaints happen. However,
these events shall be carefully analyzed and understood in order to improve service processes.
CCMS provide useful models in order to exploit customer feedback.
In the next module, TQM implementation for the development of competitive products/services will
be discussed in more detail.

Module Glossary

 Intangibility: “Most services cannot be counted, measured, inventoried, tested, and verified in
advance of sale to assure quality. Because of intangibility, the firm may find it difficult to

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 understand how consumers perceive their services and evaluate service quality”
[Parasuraman et al., 1985, p.42].
 Heterogeneity: Services “performance often varies from producer to producer, from customer
to customer, and from day to day. Consistency of behaviors from service personnel is difficult
to assure because what the firm intends to deliver may be entirely different from what the
consumer receives” [Parasuraman et al., 1985, p.42].
 Inseparability: “Production and consumption of many services are inseparable. As a
consequence, quality in services is not engineered at the manufacturing plan and then
delivered intact to the consumer. In labor intensive services, for example, quality occurs
during service delivery, usually in an interaction between the client and the contact person
from the service firm” [Parasuraman et al., 1985, p.42].
 QFD: “A practice-based methodology to provide a reliable method of addressing customer
needs in product development and manufacturing while promoting and structuring cross-
functional communication and information sharing” [Hunt and Killen, 2004, p.934].
 CCMS: Customer Complaint Management Systems. Systems for managing complaints
[Gonzalez and Tamayo-Enriquez, 2005].

Module References

 Castañeda-Calzada, G.A., Gonzalez, V., and Hernández-Morales, E. (1999). QFD: Proposals

for occupancy increase in a special category hotel. Proceedings of the 15th International
Symposium on Quality Function Deployment (pp. 94-101). Monterrey: ICQFD and ISQFD.
 George, M.L. (2003). Lean Six Sigma for Service: How to Use Lean Speed and Six Sigma
Quality to Improve Services and Transactions. U.S.A.: McGraw-Hill.
 Gonzalez, V. and Tamayo-Enriquez, F. (2005). TQM and QFD: Exploiting a customer
complaint management system. International Journal of Quality & Reliability Management,
22(1), 30-37.
 Gonzalez, V., Tamayo-Enriquez, F., and SantaCruz-Ruiz, J. (2008). Understanding Customer
Needs for an Early Childhood Educational Center (QFD
 Case Study). Proceedings of the 14th International Symposium on Quality Function
Deployment (págs. 144-151). Beijing, China: China Association for Quality.
 Hunt, R. and Killen, C. (2004). Best practice quality function deployment part I: Cases. Guest
Editorial. International Journal of Quality and Reliability Management, 21(9), 934-937.
 Mazur, G.H. (1999). Comprehensive Quality Function Deployment V.2000. Ann Arbor, MI:
Japanese Business Consultants, Ltd.
 Parasuraman, A., Zeithalm, V.A. and Berry, L.L. (1985). A Conceptual model of service quality
and its implications for future research. Journal of Marketing, 49, 41-50.
 SantaCruz-Ruiz, J. and Tamayo-Enriquez, F. (2004). From VOC to Customer Loyalty: A
successful QFD application in footware industry in Mexico. International Symposium of QFD.
Monterrey.
 Slater, R. (2000). The GE Way Fieldbook. New York: Mc Graw-Hill.
 Tamayo-Enriquez, Jaramillo-Osuna, A., and Gonzalez, V. (2004). Prioritizing customer needs
at spectator events. Obtaining accuracy at a difficult QFD arena. International Journal of
Quality and Reliability Management, 21(9), 984-990.

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 Vongpatanasin, T. and Mazur, G. (2009). Why we drink beer: Using QFD, kansei and AHP to
understand how consumers identify with brands. Proceedings of the 15th International
Symposium on Quality Function Deployment (págs. 33-44). Monterrey: ICQFD and ISQFD.
 Zeithaml, V.A., Parasuraman, A. and Berry, L.L. (1990). Delivering Quality Service. New York:
Free Press.

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 MODULE 5
Without knowing the specific status, needs and strategy of an organization, it is not possible to
recommend a specific TQM implementation plan. This plan completely depends in the business
plan of each organization. However, there are in the literature some generic TQM implementation
plans that contain the overall elements that a sound TQM implementation plan shall include. In
this module, we will also discuss 2 of the most important ‘trends’ or approaches to TQM: Six
Sigma and Lean Manufacturing. Finally, we will close the module with some references to
interesting case studies.
Topic 5.1 Critical factors in TQM implementation
ASQ [1999, p.7] describes a general TQM implementation model that consists of 11 steps:

Topic 5.2 Current trends in Total Quality Management

According to Gupta [2004, p.21] “Six Sigma offers a measure of

goodness, a methodology for improving performance, a measurement system that drives dramatic
results, and a new paradigm that requires a passionate commitment from leadership to set high

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expectations”. Six Sigma has been used frequently with all these definitions; and therefore, now
Six Sigma is not easy to define.
For GE, as stated in GE webpage [2014], Six Sigma is “a highly disciplined process that help us
focus on developing and delivering near-perfect products and services.”
“Why ‘Sigma’? The word is a statistical term that measures how far a given process deviates from
perfection. The central idea behind Six Sigma is that if you can measure how many ‘defects’ you
have in a process, you can systematically figure out how to eliminate them and get as close to
‘zero defects’ as possible. To achieve Six Sigma Quality, a process must produce no more than
3.4 defects per million opportunities. An ‘opportunity’ is defined as a chance for nonconformance,
or not meeting the required specifications. This means we need to be nearly flawless in executing
our key processes [GE, 2014].”
Gupta [2004, p. 24] states that the “project-level implementation relies on the DMAIC
methodology to capitalize on opportunities for improvement.” This DMAIC methodology has 5
steps, corresponding to each of the 5-letters of the methodology:

Lean Manufacturing (TPS)

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“The Toyota Production System (TPS) has long been hailed as the source of Toyota's
outstanding performance as a manufacturer” (Spear and Bowen, 1999, p.97). “What's curious is
that few manufacturers have managed to imitate Toyota successfully” (Spear and Bowen, 1999,
p.97).

TPS has its basis on lean manufacturing. There are currently a lot of definitions of ‘lean
manufacturing’, however; one of the most relevant is the approach taken by Liker and Meier
[2006, p. 33] to define ‘lean manufacturing’: “The starting point on creating a lean flow for us is
Taiichi Ohno’s description, in 1988, of what he was trying to accomplish: All we are doing is
looking at the timeline from the moment the customer gives us an order to the point when we
collect the cash. And we are reducing that timeline by removing the non-value-added wastes.”

TQM implementation

TQM is key for competitiveness. Therefore, its implementation (or upgrade) should be a
decision related to the business plan of each company. As we have discussed in the previous
modules, there are many concepts, systems, tools and approaches that integrate the current TQM
knowledge. It is responsibility of each organization the careful adoption and development of a
‘quality philosophy’, the design of an implementation plan, the selection of an approach and the
continuous control, evaluation and improvement of the quality strategy and its results.
In order to close this module, it is important to state, once again, that the true measure of a
successful TQM or Quality strategy is its impact on the competitiveness of the organization.
Therefore, we cannot imagine a successful TQM program that is static; TQM program needs to be
continuously evolving in order to provide support to its organization in one of its most important
tasks: Continuously provide value to their customers.
Module Glossary

 Six Sigma: “Six Sigma is a highly disciplined process that helps us focus on developing and
delivering near-perfect products and services” [GE, 2014].
 Lean Manufacturing: Process of looking at the timeline from the moment the customer gives
an order to the point when we collect the cash and reducing that time line by removing the
non-value-added wastes [Liker and Meier, 2006, p. 33].

Module References

 ASQ: American Society for Quality Management Division. (1999). The Certified Quality
Manager Handbook. Milwaukee, WI: ASQ Quality Press.
 GE. (2014). http://www.ge.com/en/company/companyinfo/quality/whatis.htm. Retrieved
November 15, 2014, from http://www.ge.com
 Gupta, P. (2004). Six Sigma Business Scorecard: Ensuring Performance for Profit. U.S.A:
McGraw-Hill.

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 Liker, J.K., and Meier, D. (2006). The Toyota Way Fieldbook: A Practical Guide for
Implementing Toyota’s 4Ps. U.S.A.: McGraw-Hill.

By Francisco Tamayo-Enriquez, 2019

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