Chapter 1Chapter 1Chapter 1Chapter 1
Introduction to Quality
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 1
Modern Importance of QualityModern Importance of QualityModern Importance of QualityModern 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
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Key IdeaKey Idea
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Building—and maintaining—quality into an organization’s goods and services, and more importantly, into the infrastructure of the organization itself, is not an easy task.
Quality AssuranceQuality Assurance
...is any action directed toward providing customers with goods and services of appropriate quality.
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History of Quality Assurance History of Quality Assurance (1 of 3)(1 of 3)History of Quality Assurance History of Quality Assurance (1 of 3)(1 of 3)
Skilled craftsmanship during Middle AgesIndustrial Revolution: rise of inspection
and separate quality departmentsEarly 20th Century: statistical methods at
Bell SystemQuality control during World War IIPost-war Japan: evolution of quality
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History of Quality Assurance History of Quality Assurance (2 of 3)(2 of 3)History of Quality Assurance History of Quality Assurance (2 of 3)(2 of 3)
Quality awareness in U.S. manufacturing industry during 1980s: from “Little Q” to “Big Q” - Total Quality Management
Malcolm Baldrige National Quality Award (1987)
Disappointments and criticism
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Key IdeaKey Idea
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Although quality initiatives can lead to business success, they cannot guarantee it, and one must not infer that business failures or stock price dives are the result of poor quality.
History of Quality Assurance History of Quality Assurance (3 of 3)(3 of 3)History of Quality Assurance History of Quality Assurance (3 of 3)(3 of 3)
Emergence of quality management in service industries, government, health care, and education
Evolution of quality to performance excellence Growth and adoption of Six SigmaCurrent and future challenge: continue to apply
the principles of quality and performance excellence. Quality is “a race without a finish line.”
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Contemporary Influences on Contemporary Influences on QualityQualityGlobalizationInnovation/creativity/changeOutsourcingConsumer sophisticationValue creationChanges in quality
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Defining QualityDefining Quality
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Perfection
ConsistencyEliminating waste
Fast delivery
Compliance with policies and procedures
Providing a good, usable product
Doing it right the first time
Delighting or pleasing customersTotal customer service and
satisfaction
Formal Definitions of QualityFormal Definitions of QualityFormal Definitions of QualityFormal Definitions of Quality
Transcendent definition: excellenceProduct-based definition: quantities of
product attributesUser-based definition: fitness for intended
useValue-based definition: quality vs. priceManufacturing-based definition:
conformance to specifications
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Quality PerspectivesQuality PerspectivesQuality PerspectivesQuality Perspectives
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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 flow
Product flowProduct flow
Key IdeaKey Idea
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Because individuals in different business functions speak different “languages,” the need for different views of what constitutes quality at different points inside and outside an organization is necessary to create products of true quality that will satisfy customers’ needs.
Customer-Driven QualityCustomer-Driven QualityCustomer-Driven QualityCustomer-Driven Quality
“Meeting or exceeding customer expectations”
Customers can be...◦Consumers◦External customers◦Internal customers
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Total QualityTotal QualityPeople-focused management systemFocus on increasing customer
satisfaction and reducing costsA systems approach that integrates
organizational functions and the entire supply chain
Stresses learning and adaptation to change
Based on the scientific method
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Principles of Total QualityPrinciples of Total Quality
Customer and stakeholder focusParticipation and teamworkProcess focus supported by continuous
improvement and learning
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…all supported by an integrated organizational infrastructure, a set of management practices,and a set of tools and techniques
Customer and Stakeholder Customer and Stakeholder FocusFocus
Customer is principal judge of qualityOrganizations 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
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Key IdeaKey Idea
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To meet or exceed customer expectations, organizations must fully understand all product and service attributes that contribute to customer value and lead to satisfaction and loyalty.
Participation and TeamworkParticipation 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
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Key IdeaKey Idea
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In any organization, the person who best understands his or her job and how to improve both the product and the process is the one performing it.
Process Focus and Continuous Process Focus and Continuous ImprovementImprovement
A process is how work creates value for customers
Processes transform inputs (facilities, materials, capital, equipment, people, and energy) into outputs (goods and services)
Most processes are cross-functional
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Key IdeaKey Idea
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A process is a sequence of activities that is intended to achieve some result
Continuous Improvement Continuous Improvement Enhancing value through new products
and servicesReducing errors, defects, waste, and
costsIncreasing productivity and effectivenessImproving responsiveness and cycle
time performance
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Key IdeaKey Idea
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Major improvements in response time may require significant simplification of work processes and often drive simultaneous improvements in quality and productivity.
Deming’s View of aDeming’s View of aProduction SystemProduction System
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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 OUTPUTSFeedback
LearningLearning
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
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Infrastructure, Practices, and Infrastructure, Practices, and ToolsTools
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Leadership Strategic HRM Process Information and knowledgeLeadership Strategic HRM Process Information and knowledge Planning mgt. managementPlanning mgt. management
Performance TrainingPerformance Training appraisalappraisal
Trend chartTrend chartToolsTools
PracticesPractices
InfrastructureInfrastructure
TQ InfrastructureTQ InfrastructureCustomer relationship managementLeadership and strategic planningHuman resources managementProcess managementInformation and knowledge management
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Competitive AdvantageCompetitive AdvantageCompetitive AdvantageCompetitive Advantage
Is driven by customer wants and needsMakes significant contribution to business
successMatches organization’s unique resources with
opportunitiesIs durable and lastingProvides basis for further improvementProvides direction and motivation
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Quality supports each of these characteristics
Quality and ProfitabilityQuality and ProfitabilityQuality and ProfitabilityQuality and Profitability
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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
Key IdeaKey Idea
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Considerable evidence exists that quality initiatives positively impact bottom-line results.
Quality and Business Results Quality and Business Results StudiesStudies
General Accounting Office study of Baldrige Award applicants
Hendricks and Singhal study of quality award winners
Performance results of Baldrige Award recipients
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Key IdeaKey Idea
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An organization that is committed to total quality must apply it at three levels: the organizational level, the process level, and the performer/job level.
Three Levels of QualityThree Levels of QualityOrganizational level: meeting external
customer requirementsProcess level: linking external and
internal customer requirementsPerformer/job level: meeting internal
customer requirements
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Quality and Personal ValuesQuality and Personal ValuesQuality and Personal ValuesQuality and Personal ValuesPersonal initiative has a positive impact on
business success Quality-focused individuals often exceed
customer expectationsQuality begins with personal attitudesAttitudes can be changed through awareness and
effort (e.g., personal quality checklists)Unless quality is internalized at the personal
level, it will never become rooted in the culture of an organization. Thus, quality must begin at a personal level (and that means you!).
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Key IdeaKey Idea
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In the daily attempt to bring about change in the individual parts of the organizational universe, managers, employees, professors, and students can find that personal quality is the key to unlock the door to a wider understanding of what the concept really is all about.