3 TQM Multiple Perspectives

7/30/2019 3 TQM Multiple Perspectives

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Multiple Perspectives on Quality

Terry Nolan

Total Quality Management


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Quality what does it mean?

there is little agreement

on what constitutes

`quality' despite what the

dictionaries mightsuggest, and it appears

that the more we hear it

the more confusing its

meaning seems tobecome

Terry Nolan


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Quality has a wide scope

Terry Nolan

Narrowly interpreted, quality means quality ofproduct. Broadly interpreted, quality meansquality of work, quality of service, quality of

information, quality of process, quality ofdivision, quality of people, including workers,engineers, managers, and executives, qualityof systems, quality of company, quality ofobjectives, etc.

(Ishikawa, 1985, p. 45).


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Perspective 1 - Quality is

Excellence

Terry Nolan

Investment of the best skill and effort possibleto produce the finest and most admirable

results possible ... Quality is achieving or

reaching for the highest standard as against

being satisfied with the sloppy or fraudulent ...

It does not compromise with second-rate

(Tuchman, 1980, p. 39).


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Perspective 1 - Quality is

Excellence

Terry Nolan

Only 1 in 10 customers complain

Quality must be customer-driven not supplierdriven

Quality=Customers perceptionsnot our own!


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Perspective 2 - Quality is Value

Terry Nolan

Feigenbaum (1983) stated the following:

Quality does not have the popular meaning of

`best' in any absolute sense. It means `bestfor certain customer conditions'. These

conditions are (a) the actual use and (b) the

selling price of the product. Product quality

cannot be thought of as apart from productcost


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Perspective 2 - Quality is Value

Terry Nolan

Allows comparison to be made across widelydifferent objects and experiences, such as a

Eurostar train journey through the Channel

Tunnel to Paris versus a plane flight from London

to Paris.


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Perspective 3 Quality is

Conformance to Specifications

Terry Nolan

Juran (1951) proposed what have become the

two most commonly agreed definitions:

1. Conformance to specifications.

2. Fitness for Use


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Terry Nolan

Quality of conformance to design concerns

the extent to which the product or service

conforms to the design specifications


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Terry Nolan

The `conformance to specifications' view of

quality is a manufacturing-based outlook. It

implies that once a design or a specification has

been established by the producer, any deviation

from it, during production or downstream from

production, means a reduction in quality


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Terry Nolan

Historically, quality as `conformance-to-specifications' tended to be internally focused. Byusing this view of quality, organizations pay:

little attention to the link, in customers' minds,between quality and product characteristics otherthan conformance. Rather, quality is defined in amanner that simplifies engineering and productioncontrol. On the design side, that has led to an

emphasis on reliability engineering. On themanufacturing side, it has meant an emphasis onstatistical quality control(Garvin, 1988, p. 45).


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Perspective 4 - Quality is meeting and/or

exceeding customers' expectations

Terry Nolan

Jurans `fitness for use' definition - the

extent to which a product successfully

serves the purposes of the user, not themanufacturer, merchant or the repair

shop

it ensures that firms are more externallyfocused by paying greater attention to

the changes in the market.


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Cost of Quality (CoQ)

Terry Nolan

Quality costs do not readily appear in

the accounting journals

Large timing delays between qualitycosts and benefits create distortion

Accounting rules do not lend themselves

to measuring quality


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Difficulties in capturing the True

costs

Terry Nolan

Numerous cost estimates are needed

There are hidden costs never captured

Matching future costs with historicalcosts is necessary

A clear definition of quality needs to be

made before the costs associated withit can be measured.


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CoQ

Terry Nolan

The two definitions which are most commonlyagreed upon are:

1. Conformance Costs - comprising

Prevention costs and Appraisal costs

2. Non-Conformance Costs comprising

Internal Failure costs and External Failurecosts


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Prevention costsall activities designed

to prevent defects in products or services

Terry Nolan

Include direct and indirect costs related to: quality training and education,

pilot studies,

quality circles,

quality engineering, quality audits,

supplier capability surveys and so on. These costsare used to build awareness of the quality programme

and to keep the costs of appraisal and failure to aminimum


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Conformance Costs

Terry Nolan

Appraisal Costs - associated with measuring andevaluating the product or service quality to ensure

conformance. These include the cost of

inspection, test or audit of purchases,

manufacturing or process operations and finishedgoods or services.


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Nonconformance Costs: orfailure

costs

Terry Nolan

Internal Failure costs - these are incurred prior

to the final shipment of the product or the delivery

of the service. Costs include, defects that are

found prior to customer delivery, net cost of scrap,spoilage, rework, supplier rework, re-inspection

and retest, downtime due to poor quality etc.


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Nonconformance Costs: orfailure

costs

Terry Nolan

External failure cost the cost of discovereddefects occurring after product shipment or

service delivery. These include warranty

charges, customer complaint adjustments,

returned merchandise, product recalls,

allowances and product liability. They also

include the costs of labour and travel

associated with the investigation of customercomplaints


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Traditional Model of Quality Costs

Terry Nolan

TQ TQ

Total quality costs

Failure costs

Costs of appraisal

Plus prevention

0 Quality of Conformance 100


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Old Model Discredited

Terry Nolan

Nowadays, this is discredited for two reasons:

(i) appraisal and prevention costs probably

decrease through experience factors;

(ii) they must be continued any way to preserve

the earlier quality improvements.


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Emerging model of Quality costs

Terry Nolan

TotalQualityCosts

Cost Failure costs

perGood

Unitof

product costs of appraisal and

prevention

0 Quality of Conformance 100


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Four Cost of Quality Components

Terry Nolan

1. Prevention costs remain relatively consistent as theawareness of TQM is built and maintained.

2. Appraisal costs will initially increase as inspection

programs are initiated but should eventually level off

3. Internal failure costs will initially increase as the inspectionprograms are implemented but should then graduallydecrease with learning

4. External failure costs should continue to fall as various TQprograms are brought on line


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Limitations of Cost-of Quality concept

Terry Nolan

COQ measurements do not solve qualityproblems

Publication of the cost figures does not

stimulate cost reduction

COQ reports do not provide specific actions

COQ calculations do not capture all of the cost

Standard accounting conventions do not cater

for COQ needs Important costs can be easily omitted from the

COQ calculation


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Limitations of Cost-of Quality concept

Terry Nolan

There is a time delay between cause andeffect, and a COQ report may not capture all

the changes in the same period

Quality costs are subject to judgement andestimation, which can cause distortion

COQ has a tendency to be short term


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Summary

Terry Nolan

The various definitions discussed show that thereis no `one best' or `correct' definition for quality.

Sources:

Yong, J and Wilkinson, A. (2002) The long and windingroad: the evolution of quality management .TotalQuality Management , Jan. Vol.13 11 p101(21)

Rao, A. (1996) Total Quality Management: A CrossFunctional Perspective. Wiley & Sons

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3 TQM Multiple Perspectives