Management of Quality

Quality Management
 What does the term quality mean?
 Quality is the ability of a product to consistently meet
or exceed customer expectations
 Quality management refers to systematic policies,
methods, and procedures used to ensure that goods and
services are produced with appropriate levels of quality
to meet and exceed the needs of customers.
 Organizations today integrate quality principles into
their management systems, using tools such as Total
Quality Management (TQM), Six Sigma, Kaizen and
Lean Operating Systems
Understanding Quality

Quality can be a confusing concept, partly because

people view quality in relation to differing criteria based
on their individual roles in the value chain such as:
perfection,
doing it right the first time, and/or
consistency.
 A Brief History of Quality Management
Historical uses of quality management include the
precision involved in building of Egyptian pyramids,
interchangeable parts during Industrial Revolution, and
statistical tools used for quality control during World War
II.
Japan integrated quality ideas and methods throughout
their organizations and developed a culture of continuous
improvement.
 Principles of Total Quality Management
A focus on customers and stakeholders.
A process focus supported by continuous improvement and
learning.
Participation and teamwork by everyone in the organization.
Cont’d …
 Investment in Quality Yields Business Results
Increased employee participation
Improved product and service quality
Improved customer satisfaction
Improved productivity
Improved employee skills
Improved financial performance
Cont’d …
Dimensions of Quality
Performance - main characteristics of the
product
Aesthetics - appearance, feel, smell, taste
Special features - extra characteristics
Conformance - how well product conforms to
customer’s expectations
Safety - Risk of injury
Reliability - consistency of performance
Cont’d
Durability - useful life of the product/service
Perceived Quality - indirect evaluation of quality (e.g.
reputation)
Service after sale - handling of customer complaints or
checking on customer satisfaction
Examples of Quality Dimensions

Dimension (Product) (Service)

Automobile Auto Repair
1. Performance Everything works, fit & All work done, at agreed
finish price
Ride, handling, grade of Friendliness, courtesy,
materials used Competency, quickness
2. Aesthetics Interior design, soft touch Clean work/waiting area

3. Special features Gauge/control placement Location, call when ready

Convenience Cellular phone, CD Computer diagnostics
High tech player

4. Safety Antilock brakes, airbags Separate waiting area

Cont’d …

Dimension (Product) (Service)

Automobile Auto Repair
5. Reliability Infrequency of breakdowns Work done correctly,
ready when promised

6. Durability Useful life in miles, resistance Work holds up over

to rust & corrosion time

7. Perceived Top-rated car Award-winning service

quality department

8. Service after Handling of complaints and/or Handling of complaints

sale requests for information
CONSUMER NEEDS/REQUIREMENTS

QUALITY
QUALITY OF PERFORMANCE

QUALITY OF DESIGN

QUALITY OF CONFORMANCE

WORK PROCESS/SYSTEM
 The Costs of Poor Quality
 Prevention Costs
 Appraisal Costs
 Internal Failure Costs
 External Failure Costs
Costs of quality assurance: Prevention Costs
QC administration and systems planning
Quality training
Quality planning (QC engineering work) Incoming, in-
process, final inspection
Special processes planning
Quality data analysis
Procurement planning
Vendor surveys
Reliability studies
Quality measurement and control equipment
Qualification of material
Costs of quality assurance: Appraisal Costs
Testing
Inspection
Quality audits
Incoming test and inspection and laboratory acceptance
Checking labor
Laboratory or other measurement service
Setup for test and inspection
Test and inspection material
Outside endorsement
Maintenance and calibration
Product engineering review and shipping release
Field testing
Costs of quality assurance: Internal Failure Costs
Scrap, at full shop cost
Rework, at full shop cost
Scrap and rework , fault of vendor
Material procurement
Factory contact engineering
QC investigations (of failures)
Material review activity
Repair and troubleshooting
Costs of quality assurance: External Failure Costs
Complaints and loss of customer goodwill
Warranty costs
Field maintenance and product service
Returned material processing and repair
Replacement inventories
Strained distributor relations
Hidden costs of poor Quality
 Total Quality Management

A philosophy that involves everyone in an

organization in a continual effort to improve quality
and achieve customer satisfaction.
The TQM Approach
Find out what the customer wants
Design a product or service that meets or exceeds
customer wants
Design processes that facilitates doing the job right the
first time
Keep track of results
Extend these concepts to suppliers
Customer
satisfaction
Elements of TQM
Continual improvement
Competitive benchmarking
Employee empowerment
Team approach
Decisions based on facts
Knowledge of tools
Supplier quality
Champion
Continuous Improvement
Philosophy that seeks to make never-ending
improvements to the process of converting inputs into
outputs.
Kaizen: Japanese word for continuous improvement.
Benchmarking
Benchmarking is the process of measuring an
organization’s performance against that best in the same
or another industry.

Types of benchmarking
Internal
Competitive (either local, national or international)
Functional
 Six Sigma
Six Sigma is a business improvement approach that seeks to
find and eliminate causes of defects and errors.
Used by companies including Motorola, Allied Signal, Texas
Instruments, and General Electric.
The Six Sigma concept characterizes quality performance by
defects (or errors) per million opportunities – dpmo or epmo.
Statistically speaking:
3 Sigma results in around 3 defects per thousand (old
standard)
6 Sigma results in around 3.4 defects per million
Six Sigma Management
Providing strong leadership
Defining performance metrics
Selecting projects likely to succeed
Selecting and training appropriate people

Six Sigma Technical

Improving process performance
Reducing variation
Utilizing statistical models
Designing a structured improvement strategy
Six Sigma Team
Top management
Program champions
Master “black belts”
“Black belts”
“Green belts”

Six Sigma Process

Define
Measure DMAIC
Analyze
Improve
Control
 Six Sigma’s DMAIC Process

 Define: identify customer and priorities, identify and define a

suitable project, identify CTQs (critical to quality
characteristics).
 Measure: determine how to measure the process, identify key
internal processes that influence CTQs.
 Analyze: determine likely causes of defects and understand why
defects are generated by identifying key variables that cause
process variation.
 Improve: identify means to remove defects, confirm key
variables, modify the process to stay within acceptable range.
 Control: determine how to maintain improvements, put tools in
place to ensure that key variables remain within acceptance
ranges under the modified process.
27
 Implementing Six Sigma
Six Sigma teams are comprised of:
• Champions - senior-level managers who promote and lead the
deployment of Six Sigma.
• Master Black Belts - full-time Six Sigma experts who are
responsible for Six Sigma strategy, training, mentoring,
deployment, and results.
• Black Belts - fully-trained Six Sigma experts with up to 160 hours
of training who perform much of the technical analyses required of
Six Sigma projects, usually on a full-time basis.
• Green Belts – functional employees who are trained in introductory
Six Sigma tools and methods and work on projects on a part-time
basis, assisting Black Belts while developing their own knowledge
and expertise.
• Team Members are individuals from various functional areas who
support specific projects. 28
 Kaizen
Continuous Improvement (Kaizen): focuses on small,
gradual, and frequent improvements over the long term
with participation by everyone in the organization.
 The 5 Steps/5s are as follows:
Sort: Sort out & separate that which is needed & not needed
in the area
Straighten: Arrange items that are needed so that they are
ready & easy to use. Clearly identify locations for all items so
that anyone can find them & return them once the task is
completed
Shine: Clean the workplace & equipment on a regular basis
in order to maintain standards & identify defects
Standardize: Revisit the first three of the 5S on a frequent
basis and confirm the condition of the Gemba using standard
procedures
Sustain: Keep to the rules to maintain the standard &
continue to improve every day
Cont’d …
5S relates to workplace organization and forms a solid
foundation upon which many organizations base their drive
for continuous improvement. It is equally applicable &
successful in all sectors helping to achieve high impact
results.
It is a systematic and methodical approach allowing teams to
organize their workplace in the safest and most efficient
manner.
The discipline to check & repair equipment is included &
adopted. The entire process is managed through the use of
team generated audit documents, completed on an agreed
frequency by responsible owners within the Gemba.
Summary
 Improved safety
 5S becomes a fundamental business measure & key driver
for Kaizen
 Forms a solid foundation upon which to build continuous
improvement
 Employees gain a sense of ownership, involvement &
responsibility
 Reduction in waste – as defined by Ohno’s seven forms of
waste
 Improved performance in productivity, quality & morale
leads to increased profitability
 Ohno’s seven forms of waste
1. Defects
2. Over production
3. Waiting
4. Transporting
5. Movement
6. Inappropriate processing
7. Inventory
 Some more:
8. Confusion
9. Unsafe or un-ergonomic work condition
10. Underutilized human potential
 Process Improvement: A systematic
approach to improving a process

A P
(Act) (Plan)

e n d ing
r-
(Check) (Do) Neve ent
o v em
C D impr

Quality
 Select a
process
Document
Study/document

Evaluate

Implement the Seek ways to

Improved process Improve it

Design an
Improved process
Malcolm Baldrige National Quality Award
1. Leadership
2. Strategic Planning
3. Customer and Market Focus
4. Information and Analysis
5. Human Resource Development and Management
6. Process Management
7. Business Results
 Process Improvement and Tools
Process improvement - a systematic approach to
improving a process
Process mapping
Analyze the process
Redesign the process
Tools
There are a number of tools that can be used for
problem solving and process improvement
Tools aid in data collection and interpretation, and
provide the basis for decision making
Service Quality
Dimension Examples
1. Convenience Was the service center conveniently located?
2. Reliability Was the problem fixed?
3. Responsiveness Were customer service personnel able to answer questions?
4. Time How long did the customer wait?
5. Assurance Did the customer service personnel seem knowledgeable?
6. Courtesy Were customer service personnel and the cashier friendly?
7. Tangibles Were the facilities clean; personnel neat?

Challenges with Service Quality:

Many
• Customer expectations often change
Moments
• Different customers have different expectations of Truth
• Each customer contact is a “moment of truth”
• Customer participation can affect perception of quality
• “Fail-safe” must be designed into the system
Basic Quality Control Tools
Check sheets
Histograms
Pareto Charts – NB: read more
Scatter diagrams
Control charts
Cause-and-effect: also called fishbone/Ishikawa diagram
Run charts alternatively flowcharts/run charts
Quality Certification
 ISO 9000
 Set of international standards on quality management and
Quality assurance, critical to international Business
 ISO 9000 series standards, briefly, require firms to
document their quality-control systems at every step
(incoming raw materials, product design, in-process
monitoring and so forth) so that they’ll be able to identify
those areas that are causing quality problems and correct
them.
The ISO Series Standards
ISO 9000 requires companies to document everything
they do that affects the quality of goods and services.
Hierarchical approach to documentation of the Quality
Management System
ISO 14000 - A set of international standards for
assessing a company’s environmental performance
Standards in three major areas
Management systems
Operations
Environmental systems