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1 THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Chapter 1
Introduction to Quality
2 THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Modern Importance of Quality
“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.”
- William Cooper Procter
3 THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Quality Assurance
...is any action directed toward providing customers with goods and services of appropriate quality.
4 THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
History of Quality Assurance (1 of 2)
• Skilled craftsmanship during Middle Ages• Industrial Revolution: rise of inspection and
separate quality departments• Statistical methods at Bell System• Quality control during World War II• Quality management in Japan
5 THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
History of Quality Assurance (2 of 2)
• Quality awareness in U.S. manufacturing industry during 1980s: “Total Quality Management”
• Malcolm Baldrige National Quality Award (1987)
• Quality in service industries, government, health care, and education
• Current and future challenge: keep progress in quality management alive
6 THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Contemporary Influences on Quality
• Parterning• Learning systems• Adaptability and speed of change• Environmental sustainability• Globalization• Knowledge focus• Customization and differentiation• Shifting demographics
7 THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Definitions of Quality• Transcendent definition: excellence• Product-based definition: quantities of
product attributes• User-based definition: fitness for intended
use• Value-based definition: quality vs. price• Manufacturing-based definition:
conformance to specifications
8 THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Quality Perspectives
CustomerCustomer
DistributionDistribution
productsproducts and and servicesservices
needsneeds
transcendent &transcendent &product-basedproduct-based user-baseduser-based
manufacturing-manufacturing- basedbased
value-basedvalue-based
MarketingMarketing
DesignDesign
ManufacturingManufacturing
Information flowInformation flowProduct flowProduct flow
9 THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Customer-Driven Quality
• “Meeting or exceeding customer expectations”
• Customers can be...– Consumers– External customers– Internal customers
10 THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Total Quality
• People-focused management system• Focus on increasing customer satisfaction
and reducing costs• A systems approach that integrates
organizational functions and the entire supply chain
• Stresses learning and adaptation to change• Based on the scientific method
11 THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Principles of Total Quality
• Customer and stakeholder focus• Participation and teamwork• Process focus and continuous
improvement
...supported by an integrated organizational infrastructure, a set of management practices,and a set of tools and techniques
12 THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Customer and Stakeholder Focus• Customer is principal judge of quality• Organizations must first understand
customers’ needs and expectations in order to meet and exceed them
• Organizations must build relationships with customers
• Customers include employees and society at large
13 THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Participation and Teamwork• Employees know their jobs best and
therefore, how to improve them• Management must develop the systems and
procedures that foster participation and teamwork
• Empowerment better serves customers, and creates trust and motivation
• Teamwork and partnerships must exist both horizontally and vertically
14 THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Process Focus and Continuous Improvement
• A process is a sequence of activities that is intended to achieve some result
15 THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Continuous Improvement
• Enhancing value through new products and services
• Reducing errors, defects, waste, and costs• Increasing productivity and effectiveness• Improving responsiveness and cycle time
performance
16 THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Deming’s View of a Production System
Suppliers ofmaterials and equipment
Receipt and test of materials
Design and Redesign
Consumer research
ABCD
Production, assembly inspection
Tests of processes, machines, methods
Distribution
Consumers
INPUTS PROCESSES OUTPUTS
17 THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Learning• The foundation for improvement …
Understanding why changes are successful through feedback between practices and results, which leads to new goals and approaches
• Learning cycle:– Planning– Execution of plans– Assessment of progress– Revision of plans based on assessment findings
18 THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Infrastructure, Practices, and Tools
Leadership Strategic HRM Process Data and information Leadership Strategic HRM Process Data and information Planning mgt. managementPlanning mgt. management
Performance TrainingPerformance Training appraisalappraisal
Trend chartTrend chartToolsTools
PracticesPractices
InfrastructureInfrastructure
19 THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
TQ Infrastructure
• Customer relationship management• Leadership and strategic planning• Human resources management• Process management• Data and information management
20 THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Competitive Advantage
• Is driven by customer wants and needs• Makes significant contribution to business
success• Matches organization’s unique resources with
opportunities• Is durable and lasting• Provides basis for further improvement• Provides direction and motivation
Quality supports each of these characteristics
21 THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Quality and Profitability
Improved quality of design
Higher perceived value
Increased market share
Higher prices
Increased revenues
Improved quality of conformance
Lower manufacturing and
service costs
Higher profitability
22 THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Evidence that Quality Impacts Business Results
• General Accounting Office study of Baldrige Award applicants
• Baldrige stock study (see www.quality.nist.gov)
• Hendricks and Singhal study of quality award winners
• Performance results of Baldrige Award winners
23 THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
GAO TQ Model
Product andservice quality
Customersatisfaction
Leadership for continuous improvement
Quality systems andemployee involvement
Competitiveness
Organization benefits
Reliability
On-time delivery
Error/defects
Overall satisfaction
Customer retention
Complaints
CostsCycle timeTurnoverSatisfactionSafety & healthProductivity
Market share
Profits
24 THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Three Levels of Quality
• Organizational level: meeting external customer requirements
• Process level: linking external and internal customer requirements
• Performer/job level: meeting internal customer requirements
25 THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Quality and Personal Values• Personal initiative has a positive impact
on business success • Quality begins with personal attitudes• Quality-focused individuals often exceed
customer expectations• Attitudes can be changed through
awareness and effort (e.g., personal quality checklists)