Adeyl Khan, Faculty, BBA, NSU Management of Quality

Adeyl Khan, Faculty, BBA, NSU

Chapter 9Management

of Quality


What does the term quality mean?

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

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• 1924 - Statistical process control charts• 1930 - Tables for acceptance sampling• 1940’s - Statistical sampling techniques• 1950’s - Quality assurance/TQC• 1960’s - Zero defects• 1970’s - Quality assurance in services

Evolution of Quality Management


Quality Assurance vs. Strategic ApproachQuality Assurance

Emphasis on finding and correcting defects before reaching market

Strategic Approach Proactive, focusing on

preventing mistakes from occurring

Greater emphasis on customer satisfaction

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• Walter Shewhart• “Father of

statistical quality control”

• W. Edwards Deming

• Joseph M. Juran• Armand

Feignbaum• Philip B. Crosby• Kaoru Ishikawa• Genichi Taguchi

The Quality Gurus


Key Contributors to QMContributor Known for

Deming 14 points; special & common causes of variation

Juran Quality is fitness for use; quality trilogy

Feignbaum Quality is a total field

Crosby Quality is free; zero defects

Ishikawa Cause-and effect diagrams; quality circles

Taguchi Taguchi loss function

Ohno and Shingo Continuous improvement

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Dimensions of Quality

Performance - main characteristics of the product/serviceAesthetics - appearance, feel, smell, tasteSpecial Features - extra characteristicsConformance - how well product/service conforms to customer’s expectationsReliability - consistency of performanceDurability - useful life of the product/servicePerceived Quality - indirect evaluation of quality (e.g. reputation)Serviceability - service after sale

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Examples of Quality DimensionsDimension

(Product)Automobile

(Service)Auto Repair

Performance

Everything works, fit & finish

All work done, at agreed price

Aesthetics

Ride, handling, grade of materials usedInterior design, soft touch

Friendliness, courtesy, Competency, quicknessClean work/waiting area

Special features

Gauge/control placementCellular phone, CD player

Location, call when readyComputer diagnostics

Reliability

Infrequency of breakdowns

Work done correctly, ready when promised

Durability Useful life in miles, resistance to rust & corrosion

Work holds up over time

Perceived quality Top-rated car Award-winning service department

Serviceability Handling of complaints and/or requests for information

Handling of complaints

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Service Quality

ConvenienceReliabilityResponsivenessTimeAssuranceCourtesyTangibles

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Examples of Service QualityDimension Examples1. Convenience Was the service center conveniently

located?

2. Reliability Was the problem fixed?

3. Responsiveness

Were customer service personnel willing and able to answer questions?

4. Time How long did the customer wait?

5. Assurance Did the customer service personnel seem knowledgeable about the repair?

6. Courtesy Were customer service personnel and the cashier friendly and courteous?

7. Tangibles Were the facilities clean, personnel neat?

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Challenges with Service Quality

Customer expectations often changeDifferent customers have different expectationsEach customer contact is a “moment of truth”Customer participation can affect perception of qualityFail-safing must be designed into the system

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Determinants of QualityQuality of design

Intension of designers to include or exclude features in a product or serviceQuality of conformance

The degree to which goods or services conform to the intent of the designers

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Design Ease of use

Conforms to design

Service


The Consequences of Poor Quality

Loss of businessLiabilityProductivityCosts

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• Top management• Design• Procurement• Production/operations• Quality assurance• Packaging and shipping• Marketing and sales• Customer service

Responsibility for Quality


Costs of Quality

Failure Costs Internal Failure Costs- before customer External Failure Costs- after customer

Appraisal Costs Costs of activities designed to ensure quality or uncover defects

Prevention Costs All TQ training, TQ planning, customer assessment, process control, and quality improvement costs to prevent defects from occurring

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Ethics and Quality

Having knowledge of this and failing to correct and report it in a timely manner is unethical.

Substandard work Defective products Substandard service Poor designs Shoddy workmanship Substandard parts and materials

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Malcolm Baldrige National Quality Award1.0 Leadership (125 points)2.0 Strategic Planning (85 points)3.0 Customer and Market Focus (85 points)4.0 Information and Analysis (85 points)5.0 Human Resource Focus (85 points)6.0 Process Management (85 points)7.0 Business Results (450 points)

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Quality Awards


Quality Certification

ISO 9000 Set of international standards on quality management and quality assurance, critical to international business

ISO 14000 A set of international standards for assessing a company’s environmental performance

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ISO 9000 Quality Management PrinciplesCustomer focusLeadershipPeople involvementProcess approachA systems approach to

managementContinual improvementFactual approach to decision makingMutually beneficial supplier relationships

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• Requirements • System requirements• Management • Resource• Realization• Remedial

ISO 9000 Standards


ISO 14000ISO 14000 - A set of

international standards for assessing a company’s environmental performance

Standards in three major areas Management

systems Operations Environmental

systems

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• 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

ISO 14000 Standards


Total Quality Management

A philosophy that involves everyone in an organization in a continual effort to improve quality and achieve customer satisfaction.

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T Q M

• 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

The TQM Approach


Elements of TQM

Continual improvement Philosophy that seeks to make never-ending improvements to the process of converting inputs into outputs. Kaizen: Japanese word for continuous improvement.

Competitive benchmarkingEmployee empowermentTeam approachDecisions based on factsKnowledge of tools

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Supplier qualityChampionQuality at the

sourceSuppliers


Six SigmaSix sigma: A business

process for improving quality, reducing costs, and increasing customer satisfaction.

Statistically Having no more than 3.4

defects per millionConceptually

Program designed to reduce defects

Requires the use of certain tools and techniques

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• Improve quality• Save time• Cut costs

Six Sigma programs

• Design• Production• Service• Inventory

management• Delivery

Employed in

Based on Statistical Process Control (SPC) techniques, the Six Sigma management strategy was developed in 1986 to support Motorola’s drive towards reducing defects by minimizing variation in processes

Adeyl Khan, Faculty, BBA, NSU9-21

• Providing strong leadership

• Defining performance metrics

• Selecting projects likely to succeed

• Selecting and training appropriate people

Six Sigma Management

• Improving process performance

• Reducing variation• Utilizing statistical

models• Designing a structured

improvement strategy

Six Sigma Technical

• Top management• Program champions• Master “black belts”• “Black belts”• “Green belts”

Six Sigma Team

• Define• Measure• Analyze• Improve• Control• DMAIC

Six Sigma Process


Obstacles to Implementing TQM

Lack of: Company-wide definition of quality Strategic plan for change Customer focus Real employee empowerment Strong motivation Time to devote to quality initiatives Leadership

Poor inter-organizational communicationView of quality as a “quick fix”Emphasis on short-term financial resultsInternal political and “turf” wars

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Criticisms of TQM

Blind pursuit of TQM programsPrograms may not be linked to strategiesQuality-related decisions may not be tied to market performanceFailure to carefully plan a program

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Basic Steps in Problem Solving

Define the problem and establish an improvement goalDefine measures and collect dataAnalyze the problemGenerate potential solutionsChoose a solutionImplement the solutionMonitor the solution to

see if it accomplishes the goal

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Plan

Do

Study

Act


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

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The Process Improvement Cycle

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Implement theImproved process

Select aprocess

Study/document

Seek ways toImprove it

Design anImproved process

Evaluate

Document


Basic Quality Tools

FlowchartsCheck sheetsHistogramsPareto ChartsScatter diagramsControl chartsCause-and-effect diagramsRun charts

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Check Sheet

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Billing Errors

Wrong Account

Wrong Amount

A/R Errors

Wrong Account

Wrong Amount

Monday


Pareto Analysis80% of the problems may be attributed to

20% of the causes.

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Smearedprint

Nu

mb

er o

f d

efec

ts

Offcenter

Missinglabel

Loose Other


Control Chart

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970

980

990

1000

1010

1020

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

UCL

LCL


Cause-and-Effect Diagram

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Effect

MaterialsMethods

EquipmentPeople

Environment

Cause

Cause

Cause

Cause

Cause

CauseCause

Cause

CauseCause

Cause

Cause


Run Chart

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Time (Hours )

0.440.460.480.50.520.540.560.58

1 2 3 4 5 6 7 8 9 10 11 12

Time (Hours)

Dia

met

er


Tracking Improvements

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UCL

LCL

LCLLCL

UCLUCL

Process not centeredand not stable

Process centeredand stable

Additional improvementsmade to the process


Methods for Generating Ideas

BrainstormingQuality circlesInterviewingBenchmarking5W2H

A method of asking questions about a process that includes what, why, ?, where, who, how and how much.

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Quality Circles

Team approach List reduction Balance sheet Paired comparisons

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Benchmarking Process

Identify a critical process that needs improvingIdentify an organization that excels in this processContact that organizationAnalyze the dataImprove the critical process

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Documents

Adeyl Khan, Faculty, BBA, NSU Management of Quality