Quality Management

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 Learning Objectives
• Explain the meaning of Quality
• Explain the dimensions of Quality
• Describe the history of Quality
• Explain the meaning of Total Quality Management (TQM)
• Identify TQM System Components
• Identify key features of the TQM philosophy
• Describe tools for identifying and solving quality problems
• Describe quality awards and quality certifications
• Identify the costs of Quality 2
 What is Quality?

• Conformance to specifications (British Defense Industries

Quality Assurance Panel)

• Conformance to requirements (Philip Crosby)

• A predictable degree of uniformity and dependability, at
low cost and suited to the market (Edward Deming)
 What is Quality?
• “The degree to which a system, component, or process meets
(1) specified requirements, and
(2) customer or users needs or expectations” – IEEE
• The totality of features and characteristics of a product or service
that bears on its ability to satisfy stated or implied needs” – ISO
8402
• Degree to which a set of inherent characteristics fulfils
requirements – ISO 9000:2000
 Dimensions of Quality
Garvin (1987)
1. Performance:
• Will the product/service do the intended job?
2. Reliability:
• How often does the product/service fail?
3. Durability:
• How long does the product/service last?
4. Serviceability:
• How easy to repair the product / to solve the problems in
service?
 Dimensions of Quality
5. Aesthetics:
• What does the product/service look/smell/sound/feel like?
6. Features:
• What does the product do/ service give?
7. Perceived Quality:
• What is the reputation of the company or its
products/services?
8. Conformance to Standards:
• Is the product/service made exactly as the designer/standard
intended?
 History of Quality Methodology

• Ancient times: Skilled crafstmanship

• Industrial Revolution (18th century): Mass production
• R. A. Fisher: Modern quality methodology started
• W. A. Shewhart: Transformed Fisher’s methods into quality
control discipline for factories
• World War II: Acceptance of statistical quality-control concepts
• The American Society for Quality Control formed (1946)
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 History of Quality Methodology

• Quality in Japan:
• W.E. Deming invited to Japan to give lectures;
• G. Taguchi developed “Taguchi method” for scientific design
of experiments;
• The Japanese Union of Scientists and Engineers (JUSE)
established “Deming Price” (1951);
• The Quality Control Circle concept is introduced by K.
Ishikawa (1960).
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 History of Quality Methodology

• Quality awareness in U.S. manufacturing industry during 1980s:

• Total Quality Management
• Quality control started to be used as a management tool.

• Malcolm Baldrige National Quality Award (1987)

• International Standard Organization’s (ISO) 9000 series of

standards
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 History of Quality Methodology
• Quality in service industries, government, health care, and
education
• Current and future challenge: keep progress in quality
management alive

Statistical Quality
Quality
Quality Management
Assurance
Control

• To sum up: A gradual transition 10

 Deming’s 14 Principles.
1. Create Constancy of Purpose
2. Adopt A New Philosophy
3. Cease Dependence On Inspection For Quality
4. End Proactive Awarding Of Business Based On
Price Alone
5. Improve Every Process Constantly / Forever
6. Institute Training
7. Adopt And Institute Leadership
 Deming’s 14 Principles.
8. Drive Out Fear
9. Break Barriers Between Staff Areas
10. Eliminate Slogans, Exhortations And Targets
11. Eliminate Numerical Quotas
12. Remove Barriers That Rob Pride Of
Workmanship
13. Institute Programs For Education And Self
Improvement
14. Put Everybody In The Company To Work For
This Transformation
 Taguchi’s Philosophy

AIM
• Designing products or processes so that they are robust to
environmental conditions
• Designing/developing products so that they are robust to
component variation
• Minimizing variation around a target value
 Taguchi Philosophy

• Stages in a product’s (or process’s) development:

1) System design: uses scientific and engineering principles
to determine the basic configuration.
2)Parameter design: specific values for the system
parameters are determined.
3) Tolerance design: determine the best tolerances for the
parameters.
 Total Quality Management

▪ Total—Made up of the whole

▪ Quality—Degree of excellence a product or service
provides
▪ Management—Act, art, or manner of handling,
controlling, directing, etc.

▪ TQM is the art of managing the whole to achieve the

excellence.
Quality Management Components

Quality Management

Quality Planning Quality Assurance Quality Control

Criteria driven Prevention driven Inspection driven

ISO 9000:2000
 Quality Management Components
• Quality Planning
• It identifies the standards and determines how to satisfy
those standards.
• It lays out the roles and responsibilities, resources,
procedures, and processes to be utilized for quality control
and quality assurance.
• Quality Assurance
• It is the review to ensure aligning with the quality standards.
An assessment will be provided here.
• Planned and systematic quality activities.
• Provide the confidence that the standards will be met.
 Quality Control – Inspection Driven

• Quality Control
• It addresses the assessment conducted during Quality
Assurance for corrective actions.
• Measure specific results to determine that they match the
standards.
• Use of Statistical Process Control (SPC) : a methodology for
monitoring a process to identify special causes of variation
and signal the need to take corrective action when
appropriate.
• SPC relies on control charts.
 TQM Philosophy
◼ TQM Focuses on identifying quality problem root causes
◼ Encompasses the entire organization
◼ Involves the technical as well as people
◼ Relies on seven basic concepts of
◼ Customer focus

◼ Continuous improvement

◼ Employee empowerment

◼ Use of quality tools

◼ Product design

◼ Process management

◼ Managing supplier quality

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 Methods of Improving Quality
• Plan-Do-Study-Act Cycle (PDSA)
• Also called the Deming Wheel after originator
• Circular, never ending problem solving process
• Seven Tools of Quality Control
• Tools typically taught to problem solving teams
• Quality Function Deployment
• Used to translate customer preferences to design

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 Plan-Do-Study-Act Cycle (PDSA)
• Plan
• Evaluate current process
• Collect procedures, data, identify problems
• Develop an improvement plan, performance objectives
• Do
• Implement the plan – trial basis
• Study
• Collect data and evaluate against objectives
• Act
• Communicate the results from trial
• If successful, implement new process 21

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 Seven Tools of Quality Control
1. Cause-and-Effect Diagrams
2. Flowcharts
3. Checklists
4. Control Charts
5. Scatter Diagrams
6. Pareto Analysis
7. Histograms

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 Cause & Effect Diagrams
Fishbone Diagram

Why are cause and effect diagrams helpful?

• Identify and display many
Root cause Root cause different possible causes
for a problem

Focused • See the relationships

problem between the many causes

• Helps determine which

Root cause Root cause data to collect
How To Construct Cause & Effect Diagrams

•Clearly define the focused problem

•Use brainstorming to identify possible causes
•Sort causes into reasonable clusters (no less than 3, not
more than 6)
•Label the clusters (consider people, policies, procedures,
materials if you have not already identified labels)
•Develop and arrange bones in each cluster
•Check the logical validity of each causal chain
Cause & Effect Diagrams •Define the problem
•Identify possible causes
•Sort causes into clusters
•Label the clusters
•Develop and arrange bones in each cluster
•Check the logical validity of each causal chain

Materials Policies
Lack of office Minimal
space Location
benefits
Restrictive budget No policy on staff
screening Turnover in
“Back-biting”
staff
Escorting clients to environment Lack of
appointments and supervision
having to wait
Paperwork Burnout
overwhelming Inadequate
training
Procedures People
 Flowcharts
• Used to document the detailed steps in a process
• Often the first step in Process Re-Engineering

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 Flowcharts

Why is flow chart helpful?

• Build a common understanding of a
whole process
• Develop process thinking
• Improve a process
• Standardize a process

Week4_4
 Checklist

Simple data check-off sheet designed to identify type of

quality problems at each work station; per shift, per
machine, per operator

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 Control Charts

• Important tool used in Statistical Process Control

• The UCL and LCL are calculated limits used to show when process is
in or out of control

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 Control Charts

• Used to determine if variation is chance or assignable cause

• Good for measuring control of variation
• Control needed before Change
• More appropriately applied to process rather than product
 Scatter Diagrams
•A graph that shows how two variables are related to one
another
• Data can be used in a regression analysis to establish equation
for the relationship

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 Pareto Analysis
Purpose: To assess the most frequently occurring defects by category

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 Histograms
• A chart that shows the frequency distribution of observed values of a
variable like service time at a bank drive-up window
• Displays whether the distribution is symmetrical (normal) or skewed

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 Histogram

Histogram of univariate sample - bimodal tendency Histogram of univariate sample - skewed tendency

0.04

0.04

0.03
0.03

Density
Density

0.02
0.02

0.01 0.01

0.00 0.00

20 40 60 80 0 20 40 60 80

measurement scale measurement scale

Product Design - Quality Function Deployment

• Critical to ensure product design meets customer expectations

• Quality Function Deployment (QFD) is a tool for translating
customer specifications into technical requirements
• QFD encompasses
• Customer requirements
• Competitive evaluation
• Product characteristics
• Relationship matrix
• Trade-off matrix
• Setting Targets 35

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 Quality Function Deployment (QFD) Details

Importance Factor
=5
Voice of the Engineer =3
(product characteristics) =1
=0

Voice of the Customer-based

Customer (C. requirements) benchmarks

Relationship Matrix

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 QFD - House of Quality
Importance Factor X
Relationship
25x3=75
20x0=0

Importance Factor
25x3=75
20x3=60 =5
10x1=10 =3
=1
Total=220 =0

Trade-offs

(Relative Importance) 220 115 155 185 255

Targets

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Adding trade-offs, targets & developing product specifications
© Wiley 2010
Process Management & Managing Supplier
Quality
INPUTS
Production/Service OUTPUTS
Processes

• Quality must be built into the process

• Quality products come from quality sources
• Quality at the source is belief that it is better to uncover
source of quality problems and correct it
• TQM extends to quality of product from company’s suppliers
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 Quality Awards

• Malcolm Baldrige National Quality Award (MBNQA)

• Intended to reward and stimulate quality initiatives in manufacturing, service,
and small business
• Past winners; Motorola Corp., Xerox, FedEx, 3M, IBM, Ritz-Carlton

• The Deming Prize

• Given by the Union of Japanese Scientists and Engineers since 1951
• Named after W. Edwards Deming who worked to improve Japanese quality
after WWII
• Not open to foreign companies until 1984
• Florida P & L was first US company winner 39

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 ISO Standards
• ISO 9000 Standards:
• Certification developed by International Organization for Standardization
• Set of internationally recognized quality standards
• Companies are periodically audited & certified
• ISO 9000:2000 QMS – Fundamentals and Standards
• ISO 9001:2000 QMS – Requirements
• ISO 9004:2000 QMS - Guidelines for Performance
• More than 40,000 companies have been certified
• ISO 14000:
• Focuses on a company’s environmental responsibility
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 Quality-related Costs

• Prevention costs
• activities to keep unacceptable products from being generated and to keep track of the
process

• Appraisal costs
• activities to maintain control of the system
• Correction costs
• activities to correct conditions out of control, including errors
 Prevention Costs

• Quality planning and engineering

• New products review
• Product/process design
• Process control
• Training
• Quality data acquisition and analysis
 Appraisal Costs

• Inspection and test of incoming material

• Product inspection and test
• Materials and services consumed
• Maintaining accuracy of test equipment
 Correction Costs

1. Internal Failure Costs: 2. External Failure Costs:

• Scrap • Complaint adjustment
• Rework • Returned
• Retest product/material

• Failure analysis • Warranty charges

• Downtime • Liability costs

• Yield losses • Indirect costs

• Downgrading (off-specing)
Internal and External Benefits of TQM

Internal Benefits External Benefits

Customer gets correct
Reduces costs product or service
Increases dependability
Increases speed Correct specifications
Boosts moral Appropriate intangibles
Increases customer retention
Increases profit Customer satisfaction
Customer retention
 Drawbacks of TQM

• Long way to establish in the organization

• Substantial efforts
• QM design not always fit for purpose (loss of cost
effectiveness)
 Why TQM Efforts Fail

• Lack of a genuine quality culture

• Lack of top management support and commitment
• Over- and under-reliance on Statistical Process
Control methods

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 Contributions of TQM
• TQM is broad sweeping organizational change
• TQM impacts
• Marketing – providing key inputs of customer information
• Finance – evaluating and monitoring financial impact
• Accounting – provides exact costing
• Engineering – translate customer requirements into specific engineering
terms
• Purchasing – acquiring materials to support product development
• Human Resources – hire employees with skills necessary
• Information systems – increased need for accessible information
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 References

• Reid R.D. & Sanders N.R., Operations Management, 4th

Edition, 2010, John Wiley & Sons, Inc.
• International Organization for Standardization (ISO) 9000:2000
• International Organization for Standardization (ISO) 8402
• [Link]