lesson 11 quality

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Introduction How is customer satisfaction achieved? Two dimensions: Product features and Freedom from deficiencies. Product features – Refers to quality of design . Examples in manufacturing industry: Performance, Reliability, Durability, Ease of use, Esthetics etc. Examples in service industry: Accuracy, Timeliness, Friendliness and courtesy, Knowledge of server etc. Freedom from deficiencies – Refers to quality of conformance . Higher conformance means fewer complaints and increased customer satisfaction. 2

Why Quality?:

Why Quality? Product complexity – As systems have become more complex, the reliability requirements for suppliers of components have become more stringent. Higher levels of customer satisfaction – Higher customers expectations are getting spawned by increasing competition. Relatively simpler approaches to quality viz. product inspection for quality control and incorporation of internal cost of poor quality into the selling price, might not work for today’s complex market environment. 3


Introduction What is quality? Dictionary has many definitions: “Essential characteristic,” “Superior,” etc. Some definitions that have gained wide acceptance in various organizations: “ Quality is customer satisfaction ,” “ Quality is Fitness for Use .” The American National Standards Institute (ANSI) and the American Society for Quality (ASQ) define quality as: “ The totality of features and characteristics of a product or service that bears on its ability to satisfy given needs. ” 4

What is Quality :

What is Quality The goodness or badness of a result Fitness for Purpose the degree of excellence a thing possesses. The degree in which all properties of a product, process or service conform to requirements. Quality without an adjective most often means quality better than normal, as contrasted with normal quality. E.g. “That’s a quality product” Quality = Meeting and exceeding customer’s expectations

Quality Management:

Quality Management That aspect of the overall management function that determines and implements the quality policy

Quality perspectives:

Quality perspectives Everyone defines Quality based on their own perspective of it. Typical responses about the definition of quality would include: Perfection Consistency Eliminating waste Speed of delivery Compliance with policies and procedures Doing it right the first time Delighting or pleasing customers Total customer satisfaction and service 7


FACTORS AFFECTING QUALITY Technological Advancement Quality of Human Resources Availability of Finance Management Commitment Natural Factors


HOW TO IMPROVE QUALITY? Improved Raw materials Better Technology Scientific Selection of Workers Good Working Conditions Harmonious Relations Quality and Cost Consciousness Industrial Research


QUALITY CONTROL Determination of quality standards and measurement and control necessary to see that the established standards are maintained and practised. Systematic control of various factors that affect the quality of the end product


QUALITY CONTROL (cont’) Establishing the standards and specifications Design and use of measures for making production conform to the standards Selection of the process of manufacture Establishing a logical inspection plan and collection and analysis of data Evaluation of methods and processes of manufacture Coordination of activities to improve the quality


SIGNIFICANCE OF QUALITY CONTROL Quality Consciousness Better utilization of resources Reduced cost of production Greater satisfaction to customers Increased level of morale Higher quality goods leads to good reputation of the organisation


METHODS OF QUALITY CONTROL INSPECTION OF QUALITY REMEDIAL INSPECTION (usable raw material from defective raw material) PREVENTIVE (causes responsible for defective work) OPERATIVE (check and control the quality standards in the production process) CENTRALIZED AND FLOOR INSPECTION


METHODS OF QUALITY CONTROL STATISTICAL QUALITY CONTROL To control the quality of work done on individual operations while the work is being done To decide whether to accept or reject lots of products already produced To furnish management with a quality audit of the company’s products


TECHNIQUES OF STATISTICAL QUALITY CONTROL Acceptance Sampling Controls the quality of outgoing products Control Chart Causes of variations


Introduction What is TQM? A comprehensive, organization-wide effort to improve the quality of products and services, applicable to all organizations. 16


Introduction What is a customer? Anyone who is impacted by the product or process delivered by an organization. External customer : The end user as well as intermediate processors. Other external customers may not be purchasers but may have some connection with the product. Internal customer : Other divisions of the company that receive the processed product. What is a product? The output of the process carried out by the organization. It may be goods (e.g. automobiles, missile), software (e.g. a computer code, a report) or service (e.g. banking, insurance) 17


TQM TQM is an approach to management that seeks continual improvement in everything we do. It is concerned with the performance TQM stresses the creative involvement of everyone from the Chief Executive Officer down, in the quest for quality. Q Circles is centered around employees, TQM is encompasses the whole org = Total

PowerPoint Presentation:

Total Quality Management is a structured system for satisfying internal and external customers and suppliers by integrating the business environment, continuous improvement , and breakthroughs with development, improvement, and maintenance cycles while changing organizational culture. exceed customer expectations and achieve strategic business objectives. TQM used by profit and not-for-profit orgs

TQM Principles & Characteristics:

TQM Principles & Characteristics Quality Pays Focus on the Customer Involving and Empowering People Process- oriented rather than product-oriented “Excellence is the journey rather than the destination” Continual Improvement of Process, Product and Service Involves the whole Org (total)

TQM = Competitiveness:

TQM = Competitiveness + Quality = Less defects Better time management Better resources management = + competitiveness + cost effectiveness

TQM Levels:

TQM Levels Integrating quality throughout the company (up- bottom and bottom-up) That is on each of the following levels: organizational level Process Level Job/performer level

A bit of History :

A bit of History First introduced the idea to the Japanese through the introduction of Statistical Quality Control methods in the 1960s, an NBC program was broadcasted titled "if Japan can do it, why can't we? " and from there, the TQM model started in the United States. Motorola was the initiator of the Six Sigma program

Deming’s Theory: :

Deming’s Theory : Deming has 14 quality points but can be summed up in 4 main points (cycle): 1. Plan : Identify the Problem and develop the plan for improvement 2. Do : Implement the plan on a test basis 3. Study/Check : Access the plan is it working 4. Act : Institutionalize improvement continue the cycle


Misconceptions… On the early 1950s management used to think that quality is costly and in order to achieve higher quality management should spend lots of money. Nowadays, Quality insures great reduction of cost in manufacturing and service. When you improve quality you actually reduce scrap and inspection and reduce cycle time of making the product meaning that there is no WIP (work in progress) stuck at the assembly line and hence less holding costs. A.Cost

PowerPoint Presentation:

If a company sees itself paying lots of money for quality programs that means they are failing to provide quality, because quality is free. Quality is free because it's more of a discipline that every level on the organization should understand. Organizations levels are classified : Management level, Process Level, Performer/job Level


TQM Meeting customer’s requirement Continous improvement through management process Involvement of all employees

Quality perspectives:

Quality perspectives Judgmental perspective “goodness of a product.” Shewhart’s transcendental definition of quality – “absolute and universally recognizable, a mark of uncompromising standards and high achievement.” Examples of products attributing to this image: Rolex watches, Lexus cars. Product-based perspective “function of a specific, measurable variable and that differences in quality reflect differences in quantity of some product attributes.” Example: Quality and price perceived relationship. 28

Quality perspectives:

Quality perspectives User-based perspective “fitness for intended use.” Individuals have different needs and wants, and hence different quality standards. Example – Nissan offering ‘dud’ models in US markets under the brand name Datson which the US customer didn’t prefer. Value-based perspective “quality product is the one that is as useful as competing products and is sold at a lesser price.” US auto market – Incentives offered by the Big Three are perceived to be compensation for lower quality. 29

Quality perspectives:

Quality perspectives Manufacturing-based perspective “the desirable outcome of a engineering and manufacturing practice, or conformance to specification.” Engineering specifications are the key! Example: Coca-cola – “quality is about manufacturing a product that people can depend on every time they reach for it.” 30

Quality perspectives:

Quality perspectives 31

Quality levels:

Quality levels At organizational level , we need to ask following questions: Which products and services meet your expectations? Which products and services you need that you are not currently receiving? At process level , we need to ask: What products and services are most important to the external customer? What processes produce those products and services? What are the key inputs to those processes? Which processes have most significant effects on the organization’s performance standards? 32

Quality levels:

Quality levels At the individual job level , we should ask: What is required by the customer? How can the requirements be measured? What is the specific standard for each measure? 33

History of quality management:

History of quality management …To know the future, know the past! Before Industrial Revolution, skilled craftsmen served both as manufacturers and inspectors, building quality into their products through their considerable pride in their workmanship . Industrial Revolution changed this basic concept to interchangeable parts . Likes of Thomas Jefferson and F. W. Taylor (“scientific management” fame) emphasized on production efficiency and decomposed jobs into smaller work tasks. Holistic nature of manufacturing rejected! 34

History of quality management:

History of quality management Statistical approaches to quality control started at Western Electric with the separation of inspection division. Pioneers like Walter Shewhart, George Edwards, W. Edwards Deming and Joseph M. Juran were all employees of Western Electric. After World War II, under General MacArthur's Japan rebuilding plan, Deming and Juran went to Japan. Deming and Juran introduced statistical quality control theory to Japanese industry. The difference between approaches to quality in USA and Japan: Deming and Juran were able to convince the top managers the importance of quality . 35

History of quality management:

History of quality management Next 20 odd years, when top managers in USA focused on marketing, production quantity and financial performance, Japanese managers improved quality at an unprecedented rate. Market started preferring Japanese products and American companies suffered immensely. America woke up to the quality revolution in early 1980s. Ford Motor Company consulted Dr. Deming to help transform its operations. (By then, 80-year-old Deming was virtually unknown in USA. Whereas Japanese government had instituted The Deming Prize for Quality in 1950.) 36

History of quality management:

History of quality management Managers started to realize that “quality of management” is more important than “management of quality.” Birth of the term Total Quality Management (TQM) . TQM – Integration of quality principles into organization’s management systems . Early 1990s: Quality management principles started finding their way in service industry . FedEx, The Ritz-Carton Hotel Company were the quality leaders. TQM recognized worldwide : Countries like Korea, India, Spain and Brazil are mounting efforts to increase quality awareness. 37

Evolution of TQM philosophies:

Evolution of TQM philosophies The Deming Philosophy Definition of quality, “A product or a service possesses quality if it helps somebody and enjoys a good and sustainable market.” 38 Improve quality Decrease cost because of less rework, fewer mistakes. Productivity improves Capture the market with better quality and reduced cost. Stay in business Long-term competitive strength

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The Deming philosophy:

The Deming philosophy 40 William Edwards Deming ( October 14 , 1900 – December 20 , 1993 ) was an American statistician , college professor, author, lecturer, and consultant. Deming is widely credited with improving production in the United States during World War II , although he is perhaps best known for his work in Japan .

PowerPoint Presentation:

41 14 points for management: Create and publish to all employees a statement of the aims and purposes of the company. The management must demonstrate their commitment to this statement. Learn the new philosophy. Understand the purpose of inspection – to reduce the cost and improve the processes. End the practice of awarding business on the basis of price tag alone. Improve constantly and forever the system of production and service. The Deming philosophy

The Deming philosophy:

The Deming philosophy Institute training Teach and institute leadership . Drive out fear. Create an environment of innovation . Optimize the team efforts towards the aims and purposes of the company. Eliminate exhortations for the workforce. Eliminate numerical quotas for production. Remove the barriers that rob pride of workmanship . Encourage learning and self-improvement . Take action to accomplish the transformation. 42

The Deming philosophy:

The Deming philosophy “A System of Profound Knowledge” Appreciation for a system - A system is a set of functions or activities within an organization that work together to achieve organizational goals. Management’s job is to optimize the system . (not parts of system, but the whole!). System requires co-operation . Psychology – The designers and implementers of decisions are people . Hence understanding their psychology is important. 43

The Deming philosophy:

The Deming philosophy Understanding process variation – A production process contains many sources of variation. Reduction in variation improves quality . Two types of variations- common causes and special causes . Focus on the special causes. Common causes can be reduced only by change of technology. Theory of knowledge – Management decisions should be driven by facts, data and justifiable theories . Don’t follow the managements fads! 44

The Juran philosophy:

The Juran philosophy 45 Joseph Moses Juran ( December 24 , 1904 – February 28 , 2008 ) was a 20th century management consultant who is principally remembered as an evangelist for quality and quality management , writing several influential books on these subjects.

The Juran philosophy:

46 Pursue quality on two levels: The mission of the firm as a whole is to achieve high product quality . The mission of each individual department is to achieve high production quality . Quality should be talked about in a language senior management understands: money (cost of poor quality) . At operational level, focus should be on conformance to specifications through elimination of defects- use of statistical methods. The Juran philosophy

The Juran philosophy:

The Juran philosophy Quality Trilogy – Quality planning : Process of preparing to meet quality goals. Involves understanding customer needs and developing product features. Quality control : Process of meeting quality goals during operations. Control parameters. Measuring the deviation and taking action. Quality improvement : Process for breaking through to unprecedented levels of performance. Identify areas of improvement and get the right people to bring about the change. 47

The Crosby philosophy:

The Crosby philosophy 48 Philip Bayard "Phil" Crosby , ( June 18 , 1926 – August 18 , 2001 ) was a businessman and author who contributed to management theory and quality management practices. Crosby initiated the Zero Defects program at the Martin Company Orlando, Florida plant. As the quality control manager of the Pershing missile program, Crosby was credited with a 25 percent reduction in the overall rejection rate and a 30 percent reduction in scrap costs.

The Crosby philosophy:

49 Absolute’s of Management Quality means conformance to requirements not elegance. There is no such thing as quality problem . There is no such thing as economics of quality: it is always cheaper to do the job right the first time . The only performance measurement is the cost of quality : the cost of non-conformance. Basic Elements of Improvement Determination (commitment by the top management) Education (of the employees towards Zero Defects (ZD)) Implementation (of the organizational processes towards ZD) The Crosby philosophy

Process improvement: Kaizen:

Process improvement: Kaizen Japanese for gradual and orderly continuous improvement over a long period of time with minimum financial investment, and with participation by everyone in the organization . Improvement in all areas of business serves to enhance quality of the firm. Three things required for successful kaizen program: operating practices, total involvement, and training. Operating practices expose opportunities for improvement. JIT reveals waste and inefficiency as well as poor quality. 50

Process improvement: Kaizen:

Process improvement: Kaizen Every employee strives for improvement. Top management views improvement as part of strategy and supports it. Middle management can implement top management’s improvement goals by establishing, maintaining, and upgrading operating standards. Workers can engage through suggestions, small group activity. Middle management can help create conducive environment for improvement by improving cooperation amongst departments , and by making employees conscious of their responsibilities for improvement. Supervisors can direct their attention more on improvement than supervision, which will facilitate communication. 51

Kaizen: Implementation:

Kaizen: Implementation The Deming cycle : Originally developed by Walter Shewart, but renamed in 1950s because Deming promoted it extensively. 52

Kaizen: Implementation:

Kaizen: Implementation Plan – Study the current system; identifying problems; testing theories of causes; and developing solutions. Do – Plan is implemented on a trial basis. Data collected and documented. Study – Determine whether the trial plan is working correctly by evaluating the results. Act – Improvements are standardized and final plan is implemented. Variation of PDSA cycle: FADE – Focus, Analyze, Develop, Execute cycle ! 53

Kaizen: Implementation:

Kaizen: Implementation Juran’s breakthrough sequence: Proof of the need Project identification Organization for breakthrough – two paths identified: symptom to cause (diagnostic) and cause to remedy (remedial) paths. Diagnostic journey Remedial journey Holding the gains. 54

Process improvement tools:

Process improvement tools Seven QC Tools Flow charts Check sheets Histograms Pareto diagrams Cause-and-effect diagrams Scatter diagrams Control charts 55

Flow charts:

Flow charts Process map identifies the sequence of activities or the flow in a process. Objectively provides a picture of the steps needed to accomplish a task. Helps all employees understand how they fit into the process and who are their suppliers and customers. Can also pinpoint places where quality-related measurements should be taken. Also called process mapping and analysis. Very successfully implemented in various organizations. e.g. Motorola reduced manufacturing time for pagers using flow charts. 56

Check sheets:

Check sheets Special types of data collection forms in which the results may be interpreted on the form directly without additional processing. Data sheets use simple columnar or tabular forms to record data. However, to generate useful information from raw data, further processing generally is necessary. Additionally, including information such as specification limits makes the number of nonconforming items easily observable and provides an immediate indication of the quality of the process. 58

Pareto diagrams:

Pareto diagrams Based on the 85-15 Pareto distribution . Helpful in identifying the quality focus areas. Popularized by Juran. It is a histogram of the data from the largest frequency to the smallest. 59

Cause-effect diagrams:

Cause-effect diagrams Also called fishbone diagrams (because of their shape) or Ishikawa diagrams. Helps in identifying root causes of the quality failure. (Helps in the diagnostic journey .) 60

Scatter diagrams:

Scatter diagrams Graphical components of the regression analysis. Often used to point out relationship between variables . Statistical correlation analysis used to interpret scatter diagrams. 61

Run charts and Control charts:

Run charts and Control charts Run chart: Measurement against progression of time. Control chart: Add Upper Control Limit and Lower Control Limit to the run chart. 62

Quality circles:

Quality circles Teams of workers and supervisors that meet regularly to address work-related problems involving quality and productivity. Developed by Kaoru Ishikawa at University of Tokyo. Became immediately popular in Japan as well as USA. Lockheed Missiles and Space Division was the leader in implementing Quality circles in USA in 1973 (after their visit to Japan to study the same). Typically small day-to-day problems are given to quality circles. Since workers are most familiar with the routine tasks, they are asked to identify, analyze and solve quality problems in the routine processes. 63

Additional process improvement tools:

Additional process improvement tools Kaizen blitz An intense and rapid improvement process in which a team or a department throws all its resources into an improvement project over a short period of time. Short time “burst” rather than long range simmer- hence the name. Blitz teams usually comprise of employees from all areas involved in the process who understand it and can implement the changes on the spot . 64

Additional process improvement tools:

Additional process improvement tools Poka-Yoke (Mistake proofing) Approach for mistake-proofing processes using automatic devises or methods to avoid simple human error. Developed and refined in the 1960s by the late Shigeo Shingo, a Japanese manufacturing engineer who developed the Toyota production system. Focused on two aspects: Prediction – Recognizing that a defect is about to occur and provide a warning. Detection – Recognizing that a defect has occurred and stop the process. 65

ISO 9000: 2000:

ISO 9000: 2000 Created by International Organization for Standardization (IOS) which was created in 1946 to standardize quality requirement within the European market. IOS initially composed of representatives from 91 countries: probably most wide base for quality standards. Adopted a series of written quality standards in 1987 (first revised in 1994, and more recently (and significantly) in 2000 ). Prefix “ISO” in the name refers to the scientific term “iso” for equal . Thus, certified organizations are assured to have quality equal to their peers. 66

ISO 9000: 2000:

ISO 9000: 2000 Defines quality systems standards based on the premise that certain generic characteristics of management principles can be standardized . And that a well-designed, well-implemented and well managed quality system provides confidence that outputs will meet customer expectations and requirements . Standards are recognized by 100 countries including Japan and USA. Intended to apply to all types of businesses. (Recently, B2B firm bestroute.com became the first e-commerce company to get ISO certification .) 67

ISO 9000: 2000:

ISO 9000: 2000 Created to meet five objectives: Achieve, maintain, and seek to continuously improve product quality in relation to the requirements. Improve the quality of operations to continually meet customers’ and stakeholders’ needs. Provide confidence to internal management that quality requirements are being met. Provide confidence to the customers that quality requirements are being met. Provide confidence that quality system requirements are fulfilled. 68

ISO 9000: 2000 structure:

ISO 9000: 2000 structure Consists of three documents ISO 9000 – Fundamentals and vocabulary. ISO 9001 – Requirements. Organized in four sections: Management Responsibility; Resource Management; Product Realization; and Measurement, Analysis and Improvement. ISO 9004 – Guidelines for performance improvements. 69

ISO 9000: 2000 Quality Management Principles:

ISO 9000: 2000 Quality Management Principles Principle 1: Customer Focus Principle 2: Leadership Principle 3: Involvement of people Principle 4: Process approach Principle 5: Systems approach for management Principle 6: Continual improvement Principle 7: Factual approach to decision making Principle 8: Mutually beneficial supplier relationships. 70

ISO 9000: 2000 registration:

ISO 9000: 2000 registration Originally intended to be a two-party process where the supplier is audited by its customers, the ISO 9000 process became a third-party accreditation process . Independent laboratory or a certification agency conducts the audit. Recertification is required every three years . Individual sites – not entire company – must achieve registration individually. All costs are to be borne by the applicant. A registration audit may cost anywhere from $10,000 to $40,000. (more information at http://www.iso.ch) 71

Six Sigma:

Six Sigma Business improvement approach that seeks to find and eliminate causes of defects and errors in processes by focusing on outputs that are critical to customers. The term Six Sigma is based on a statistical measure that equates 3.4 or fewer errors or defects per million opportunities . Motorola pioneered the concept of Six Sigma. The late Bill Smith, a reliability engineer is credited with conceiving the idea of Six Sigma. GE (specifically CEO Jack Welch) extensively promoted it. 72

Six Sigma:

Six Sigma Core philosophy based on key concepts: Think in terms of key business processes and customer requirements with focus on strategic objectives. Focus on corporate sponsors responsible for championing projects. Emphasize quantifiable measures such as defects per million opportunities ( dpmo ). Ensure appropriate metrics is identified to maintain accountability. Provide extensive training. Create highly qualified process improvement experts -“belts”. Set stretch objectives for improvement. 73

Six Sigma:

Six Sigma Contrasts between traditional TQM and Six Sigma (SS) - TQM is based largely on worker empowerment and teams; SS is owned by business leader champions. TQM is process based; SS projects are truly cross-functional. TQM training is generally limited to simple improvements tools and concepts; SS is more rigorous with advanced statistical methods. TQM has little emphasis on financial accountability; SS requires verifiable return on investment and focus on bottom line. 74

SQM: Hoshin planning:

SQM: Hoshin planning Hoshin kanri : Japanese for management cycle build around Plan, Do, Check, Act. Elements of this cycle include – Quality policies Quality goals Deployment of goals Plans to meet goals Organizational structure Resources Measurement feedback Review of progress Training 75

SQM: Vision/Mission statement:

SQM: Vision/Mission statement Developed by taking everyone in confidence. Guide for the Quality journey . Ties quality to overall business goals. Vision Statement : Collection of quality policies. A vision statement outlines what a company wants to be. It focuses on tomorrow; it is inspirational ; it provides clear decision-making criteria ; and it is timeless . A vision needs to address three areas: people, culture (or values) and product or service . Mission statement : A mission statement outlines what the company is now. It focuses on today ; it identifies the customers; it identifies the critical processes; and it states the level of performance . 76

SQM: Vision/Mission statement:

SQM: Vision/Mission statement It has been said that a vision is something to be pursued , while a mission is something to be accomplished . Mission is what you do best every day, and vision is what the future looks like because you do that mission so exceedingly well. For vision – Think leading with inspiration and courage, obsessed with future possibility. For mission – Think managing with greatness and untamed strength, improving everything daily. Famous vision statement – “ By the end of the decade, we will put a man on the moon. ” JFK. Famous mission statement – “ CRUSH REEBOK. ” Nike 77

SQM: Quality policies:

SQM: Quality policies Prepared to provide guidelines for planning the overall quality program; and defining the action to be taken in situation for which personnel had requested guidelines. Policies state: a) a principle to be followed; b) what is to be done . Examples of quality policy – For a computer manufacturer: “In selecting suppliers, decision makers are responsible for choosing the best source even if this means internal sources are not selected.” 78

SQM: Quality goals:

SQM: Quality goals A goal (or objective) is a statement of the desired result to be achieved within a specified period – an aimed-at target . These goals then become basis for detailed planning of activities. Tactical goals are short range (up to 1 year), whereas strategic goals are long range (say, 5 years). Examples of corporate quality goals – For a health product company, the quality goals over the next year could be: “The average leakage rate for …. product shall be reduced to …” Note that quality goal statements include quantified data . Typically Pareto analysis is used to develop the quality goals. 79

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SQM: Deploying quality goals:

SQM: Deploying quality goals Broad goals don’t lead to results. First they have to be deployed as follows: Division and subdivision of the goal until specific deeds to be done are identified. Allocation of responsibility of doing these deeds. Provision for the needed resource. 81

SQM: Caveats:

SQM: Caveats Reasons of failure of SQM could be Lack of leadership by upper management. Lack of infrastructure for quality. Failure to understand the skepticism about the “new quality program.” Management assumption that the exhortation approach will work. Failure to start small and learn from pilot programs. Reliance on specific techniques as the primary means. Underestimating the time and resource required. 82

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