TQM

QM0001
Foundations of Quality Management
Contents
Unit 1
Introduction of Quality Management 1
Unit 2
Quality Approaches – Economic, Social & Environmental 21
Unit 3
Quality and Customer Focus 40
Unit 4
Quality as a Problem Solving Concept 61
Unit 5
Quality as a Cost Concept 77
Unit 6
Quality in Product Design 90
Unit 7
Quality as a Knowledge Management 117
Unit 8
Barriers to Quality 134
Unit 9
Quality as a Strategic Decision 151
Unit 10
Emergence Quality Theories 169
Prof. S. Kannan
Director and Dean
Sikkim Manipal University of Health, Medical, and Technological Sciences
Board of Studies
Mr. C. Shanath Kumar, Mr. Shankar Jagannathan
Charirman, Former Group Treasurer,
Head, Management & Commerce, Wipro Techmologies Limited,
Sikkim Manipal University , DDE. Bangalore.
Dr. T.V. Narasimha Rao Mr. Pankaj Khanna,

Adjunct Faculty & Advisor, Director, HR, Fidelity Mutual Fund.
SMU DDE, Bangalore-560008
Mr. Ashok Kumar, Mr. Abraham Mathew,

Additional Registrar, SMU, DDE. CFO, Infosys BPO.
Mr. M.K.N. Prasad, Mr. Sadhana Das

Controller of Examinations, SMU DDE. Senior Manager – HR
Microsoft India Corporation (Pvt) Ltd.
Prof. K.V.M. Varambally Special Invitee

Director, Prof. Ramu Iyer
Manipal Institute of Management, Ex-Professor
Manipal – 576104. IIM – Calcutta.
Content Preparation Team
Content Writing Peer Review By

Prof. K.R. Anantha Prof. Shanath Kumar .C
Prof. Muzna Zafar SMU DE
Prof. Seetharam Bangalore
Bangalore
Edition: Spring 2009

Printed: Spring 2009
This book is a distance education module comprising of collection of learning material for
our students.
All right reserved. No part of this work may be reproduced in any form by any means
Without permission in writing form Sikkim Manipal University o f Health. Medical and
Technological Sciences, Gangtok, Sikkim.
Printed and Published on behalf of Sikkim Manipal University of Health, Medical and
Technological Sciences, Gangtok, Sikkim by Mr. Rajkumar Mascreen , GM, Manipal
Universal Learning Pvt. Ltd., Manipal–576104. Printed at Manipal Press Limited, Manipal
Subject Introduction
Unit 1: Introduction to Quality Management
Quality has grown along with the engineering and management disciplines. This
unit traces the development of Quality thought in Japan, America and Europe
and gives an overview of the important quality concepts.
Unit 2: Quality Approaches-Economic, Social and Environmental

This unit suggests a total approach to quality in terms of economic, social and
environmental perspectives and gives some insights into the overall quality
improvement aspects.
Unit 3: Quality and Customer Focus

The objective of Quality is primarily towards Customer Satisfaction. This unit
focuses the attention towards this criterion of quality and brings out several
perspectives from the customers’ point of view.
Unit4: Quality as a Problem Solving Concept

Quality has served the industrial world very well in terms of reducing defects in
products and reducing wastage. The development of advanced concepts of
production and inventory such a Kanban and Agile manufacturing have taken the
industries several steps ahead of their competition. This units visits some of
these concepts.
Unit 5: Quality as a Cost Concept

General impression among many is that higher quality means higher costs and
expensive. Many Quality gurus particularly Phil Crosby has pointed out that it is
the other way round. In fact, in efficient processes consume more resources and
produce more wastes there by increasing the costs.
Unit 6: Quality in Product Design

As seen in the evolution of Quality movement through the last 100 years, the
focus has shifted from the inspection of the end product to ensure quality to build
the quality in the manufacturing processes. There after it has been observed and
proven that the product design contributes immensely for the quality of the
products and services facilitating in achievement of Customer satisfaction.
Unit 7: Quality as a Knowledge Management Concept

In today’s competitive environment organization needs to have sound business
knowledge to gain competitive advantage. In uncertain market conditions
organization needs a quality approach that views knowledge as a foundation
factor for organization survival and growth.
Unit 8: Barriers to Quality

The implementation of TQM techniques is considered as the absolute solution to
everything, although organizations are unable to adopt the Quality management
philosophies fully, due to many barriers/ hindrance factors that are faced.
Unit 9: Quality as a Strategic Decision

In quality management, the ratio of improvement effort to benefits varies greatly.
Sometimes, a single change in a process will bring a lot of benefit. Contents of
this unit emphasize Quality of leadership, Quality implementation as strategic
management and explain importance of Decision Making. Considerable aspects
is discussed to compare the “should” (normative analysis) with the “do”
(descriptive aspect).
Unit 10: Emergence Quality Theories

Post Industrial Revolution period has given rise to the major management
theories of classical and Human Relations thought. Quality theories have closely
followed from these theories and have led to the development of quality concepts
including Total Quality Management. This unit briefly describes the evolution.
Foundation of Quality Management Unit 1
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Unit 1 Introduction to Quality Management
Structure
1.1 Introduction
Objectives
1.2 Evolution of Quality Movement
Self Assessment Question I-III
1.3 Companywide Quality
Self Assessment Question IV
1.4 Understanding Quality
Self Assessment Question V
1.5 Gavin’s Approach to Quality
1.6 Berry’s 10 Dimensions of Service Quality
Self Assessment Question VI
1.7 Quality Dimensions as Per Juran
Self Assessment Question VII
1.8 Quality Control, Quality Assurance & Quality Management
Self Assessment Question VIII
1.9 Total Quality Management (TQM)
Self Assessment Question IX
1.10 Summary
1.11 Terminal Questions
1.12 Answers To SAQ’s And TQ’s
1.1 Introduction:
In this globalized world, we are all exposed to the products and services from across the
world. These products and services carry very distinguishing features and compete for
the consumer attention there by trying to increase their presence and the market share.
The companies adopt various strategies and management systems to achieve this
objective. The Quality Management has acquired an increasingly predominant role in the
company’s success not only in achieving the customer satisfaction but also sustaining
the competitive advantage through process improvements.
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Sikkim Manipal University Page No. 1
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Among general public, the word “Quality Management” has got many meanings. For
most of them, it is related to the final product / service quality, and for others it may
mean certifications like ISO 9000. Some others may link Quality Management with Six
Sigma, Kaizen and others.
Quality management has evolved over number of years with the contribution of many
stalwarts. Today it has acquired a very strategic position in the organization’s operations.
Organizations of all types and sizes – Big or Small, Manufacturing or Service providers,
NGOs and Government bodies have adopted structured Quality Management to achieve
effectiveness of their operations to realize customer satisfaction and sustained growth.
Objectives:
After studying this unit, you will understand
a) How the Quality Movement has evolved over a period of time.
b) Evolution of Quality Management in Japan and America
c) The meaning of Companywide Quality
d) The meaning of Quality and different dimensions of Quality.
e) The difference between Quality Control, Quality Assurance and Quality
Management.
1.2 Evolution of quality movement:

In the pre industrial revolution period, the quality was the responsibility of the crafts man
or the master crafts man who was responsible for the workmanship of the other crafts
men in his team. Even then, it has been observed that extenal persons were deployed
to keep an eye on quality on behalf of customers. Example: it has been recorded that
Royal Governments in Great Britain had appointed overseers to report on the
construction and repair of ships. During this period, it was possible for the craftsmen /
workers to control the quality of their own work out puts. The working conditions then
probably had been conducive for professional pride.
The industrial revolution led to the establishment of systems where number of people
performing similar type of work was grouped together under the supervision of a person
often called “Foreman”, who was responsible for the quality and the output of the work
output.
In the late 19th century, pioneers like Frederick Taylor and Henry Ford recognized the
limitations of methods deployed for the manufacturing of the goods through masss
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production and the resultant variation in the quality of the work output. Taylor
established Quality department to oversee the quality of production and rectifying errors
detected. Ford insisted on standardization pf design and components to ensure that
products produced are of standard in nature with little variation. Quality department was
responsible of the quality of the products and adopted the method of inspection of work
out put to catch the defects.
Early 20th Century:

During the early 20th century around the time of World War I, the products had become
more complex requiring deployment of complex manufacturing processes. This period
also witnessed the introduction of wide spread mass production and piece work. As the
workers were paid on the number of pieces made, a tendency was developed among
the workers to strive to push more products to earn extra, resulting in pushing the
products with bad workmanship to the assembly lines / customers.
To counter the above tendency, full time inspectors were introduced to identify
quarantine and correct the defects. Quality control in this method of inspections during
1920s and 30s led to the formal establishment of Quality Inspection functions, separated
from production.
During 1930s, mostly in USA, the importance of quality has gained and efforts involved
in rework and the cost of scraps started getting some attention. This has led to the
development of systematic approach to quality. The mass production has grown to such
an extent that prevalent quality control method – inspection of every product produced
had become too cumbersome. At this point of time, Statistical Quality Control (SQC)
had come in to being. The introduction of statistical quality control is credited to
Walter.A. Shewhart of Bell Labs.
SQC came about with the realization that quality cannot be fully inspected into an
important batch of products. SQC introduced to the inspectors control tools such as
Sampling and control charts where 100 percent inspection is not practicable. The
statistical techniques allow inspection and test of certain proportion of products (sample)
for quality to get the desired level of confidence in the quality of the entire batch or lot of
production.
Self Assessment Questions: I

1. Taylor established Quality department to oversee _____________________ and
_________________.
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2. During 1920s and 30s, Quality Control led to the establishment of Quality Inspection
functions separated from _____________________
3. The introduction of Statistical Quality Control is credited to ____________________
4. SQC introduced to the inspectors the control tools such as _________________ and
__________________.
Post war scenario

a) Japanese experience:
After the Second World War, US entrusted the post war re construction of Japan to, Gen
Douglas MacArthur. Two members of Gen MacArthur’s team, W. Edwards Demings and
Joseph Juran have introduced the statistical methods for quality control and
management to Japanese industrialists. Both individuals promoted the collaborative
concepts of quality to Japanese business and technical groups. Deming propounded the
management philosophy in the form of 14 points which are at the high level abstraction
that should be interpreted by learning and understanding. These points encompass
quality, productivity, innovation, people aspects, competitive position and others.
Demings’ contribution is significant in the evolution of Japan for innovative high quality
products and as an economic super power. His work in Japan had profound impact on
the development of Japanese economy, that he was awarded: Order of the Sacred-
Treasure, Second class by the Emperor Hirohito.
In 1950, JUSE (Union of Japanese Scientists and Engineers) have established the
Deming Prize to repay him for his friendship and contribution. The Deming prize –
particularly, the Deming Application Prize, given to companies has exerted immense
influence on the development of quality movement in Japan.
It is Joseph Juran who has been credited for adding the human dimension quality. In his
opinion, it is the human relations problems – resistance to change (cultural resistance) is
one of the main causes for the quality issues. He has pushed for training and education
of the managers on quality aspects. Juran also developed the “Juran’s triology” a cross
functional management comprising of three managerial processes – quality planning,
quality control and quality improvement. Juran is also credited with the application of
Pareto principle (Vital few, trivial many) to handle the quality issues.
Even while being influenced by Deming and Juran’s ideas on quality, the Japanese
began developing their own contributions towards quality improvements. Just – In -
Time (JIT) concept propounded and implemented by Taichi Ohno of Toyota and Shigeo
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Shingo has challenged the traditional understanding of the production management,

revolutionizing the relationship between the manufacturer and its supplier.
Shiego Shingo has also developed the concept of Poka Yoke (Mistake proofing), an
important component of Toyota Production System. Poka yoke involves devising
behavior shaping constraint or methods in which the operations are carried out so that
there is no scope for occurrence of inadvertent mistakes.
Genichi Taguchi through his theory of Robust Design evolved a method of designing the
products focusing on improving the fundamental function of the product or process, thus
facilitating flexible designs and concurrent engineering.
Kaoru Ishikawa is another Japanese pioneer, who has contributed immensely towards
the development of Quality Circles and the development of quality tool – Ishikawa
diagram popularly known as Fish and bone diagram (tool for identifying possible causes
for the problem).
In fact, some of the highly successful quality initiatives have been invented by the
Japanese. Among them are Taguchi methods, Poka Yoke (as indicated above), Quality
function deployment (QFD), Toyota production system and others. Many of these
methods provide techniques but also have associated quality culture aspects (people
factors). These methods are being adopted worldwide now.
The result of the great efforts of the above pioneers and others in Japan resulted in
Japanese becomes the power house for manufacturing high quality products at highly
competitive prices. Japanese products became a byword for quality and customer
satisfaction.
Self Assessment Questions: II

1. Edwards Deming and ________________ have introduced the statistical methods for
quality Control and Management to Japanese Industrialists
2. Deming’s 14 points, apart from Quality, encompass ________________,
_________________, and others.
3. The Deming Prize has been established by _____________________
4. Juran’s Trio logy consists of 3 managerial processes. They are ___________,
____________ and ________________
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5. JIT (Just – In – Time) concept developed by Taichi Ohno of Toyota has

revolutionized the relationship between _______________ and
_________________.
6. Poka Yoke is also referred as _________________.
b) American experience:
While Deming and Juran were facilitating the quality movement in Japan, there were
people trying to lead United States industries towards a more comprehensive approach
to quality. Among such individuals, Philip. B. Crosby was busy in his endeavors in
improvement of quality in ITT Corporation – USA. He has propounded theory, Zero
defects – complete conformance to defined quality parameters and not acceptable
quality levels. Another important aspect of his theory is that quality is achieved by
prevention and not by detection.
Another important person who contributed in the evolution of quality is Armand

Feigenbaum who was Director of manufacturing operations in General Electric from
1958 to 1968. He has pioneered the Concept – Total Quality Control – an effective
system for integrating the efforts of various groups in the organization in developing,
maintaining improving quality. He has also propounded the theory of “Hidden factory”
highlighting the extra work that is carried out in correcting the mistakes and defects. His
proposition that quality must be actively managed and ensure visibility at the highest
level in the organization led to the development of Total Quality Management.
In spite of such yeomen services undertaken by many individuals led by Crosby and
others, to lead United States industries towards a more comprehensive approach to
quality, the U.S. continued to apply the QC concepts of inspection and sampling to
remove defective product from production lines, essentially ignoring advances in QA for
decades. This has led to decline in America over Japan in terms of Quality, productivity
and cost competitiveness.
In 1980, NBC broadcasts a documentary on the success of Japanese companies in

Quality and asked: “If Japanese can do why not we “? About the increasing industrial
competition the United States was facing from Japan. This documentary had featured
Deming prominently. As a result of this, Deming’s work attracted the attention of the
American business. Ford Motor Company was the first to seek the services of Deming in
1981. Deming facilitated the jump –start of the quality movement in Ford, helping in
turning around in its fortunes. The main focus of these initiatives was on management
and on the company quality culture.
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In 1982, MIT Center for Advanced Engineering published a book by Dr. Deming, -
Quality, Productivity, and Competitive Position. This book was later published with a new
name - Out of the Crisis in 1986. This book has become extremly popular in US among
the business leaders and laid the foundation for the Total Quality Management
movement in US. In this book, Deming offers a theory of management based on his
famous 14 Points for Management. Management's failure to plan for the future brings
about loss of market, which brings about loss of jobs. Management must be judged not
only by the quarterly dividend, but by innovative plans to stay in business, protect
investment, ensure future dividends, and provide more jobs through improved products
and services. "Long-term commitment to new learning and new philosophy is required of
any management that seeks transformation. The timid and the fainthearted, and the
people that expect quick results, are doomed to disappointment."
Self Assessment Questions: III

1. Phil. B. Crosby has propounded the theory: “Zero defects” highlights – complete
conformance to defined ______________ and not acceptable Quality levels
2. An important aspect of Crosby’s Zero defects theory is that Quality is achieved by
_____________ and not by _________________.
3. The theory “Hidden Factory” propounded by Armand Feigenbaum highlights the extra
work that is carried out for _________________.
4. The Book by Deming titled: ____________________ has laid the foundation for the
Total Quality Movement in US.
1.3 Companywide Quality

During the 1980s, the concept of “company wide quality” with the focus on management
and people came to the fore. It was realized that, if all departments approached quality
with an open mind, success was possible if the management led the quality
improvement process.
The company-wide quality approach places an emphasis on four aspects:-

1. Elements such as controls, work management, adequate processes,
performance and integrity criteria and identification of records
2. Competence such as knowledge, skills, experience, qualifications
3. Soft elements, such as personnel integrity, confidence, organizational culture,
motivation, team spirit and quality relationships.
4. Infrastructure (as it enhances or limits functionality)
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The quality of the outputs is at risk if any of these aspects is deficient in any way.
The approach to quality management given here is therefore not limited to the
manufacturing theatre only but can be applied to any business or non-business activity:
It comprises a quality improvement process, which is generic in the sense it can be

applied to any of these activities and it establishes a behavior pattern, which supports
the achievement of quality.
With the development of Quality Management Standards (ISO 9000 series) and their
adoption by European Union as one of the pre requisites for the exporters to Union to be
eligible, the quality management movement picked up pace worldwide and the concept
of Total Quality Management gained immense popularity.
Customers recognize that quality is an important attribute in products and services.

Suppliers recognize that quality can be an important differentiator between their own
offerings and those of competitors (quality differentiation is also called the quality gap).
In the past two decades this quality gap has been greatly reduced between competitive
products and services. This is partly due to the contracting (also called outsourcing) of
manufacture to countries like India and China, as well internationalization of trade and
competition. These countries amongst many others have raised their own standards of
quality in order to meet International standards and customer demands. The ISO 9000
series of standards are probably the best known International standards for quality
management.
At the same time, industry sectors had initiated campaigns for development of sector
specific Quality management models to drive quality movement in the respective
sectors. Among the most popular ones, which had revolutionized the quality status in the
sector, are: QS 9000 / TS 16949 in the automotive sector and Capability Maturity Models
developed by Software Engineering Institute of Carnegie Mellon University for
Information Technology sector.
Governments and the industry bodies have developed the award criteria for encouraging
the organizations to move continuously up the value chain in establishing the total
quality concept in their organizations. Among the most popular ones is the Malcom
Baldrige Quality Award, Deming Prize, EFQM (European Foundation for Quality
Management) and others.
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The increasing globalization, complexity in supply chain and the ever increasing
customer expectations had led many major organizations to adopt the principles of Total
Quality Management and implemented in different formats like: Six sigma, Lean
productions, Toyota Production system and others.
Self Assessment Questions: IV

1. Companywide Quality focuses on management and ______________.
2. Companywide Quality approach is not limited to manufacturing alone but to be
applied to ________________
3. The 3 most popular Quality awards are: __________________,
___________________ and _______________________.
4. The best known International Standard for Quality Management is ___________.
1.4 Understanding Quality:

Before proceeding with further discussions, we need to remember that a Product is the
output of any process. There are three categories of products which are popularly known
as:
1. Goods: e.g. Automobiles, Electronic circuit boards, chemicals, pharmaceuticals
2. Software : e.g. Computer program, information, report, instructions, data
3. Services: e.g. insurance, banking, transportation, telecom. In an organization
context, the services include support activities within the company like employee
benefits and others.
The term “Quality” is being defined in many ways as each of them understands. It is
similar to 7 blind men describing an elephant. Each one of the definition provides an
insight to the concept of quality in its own way. Let us see some of the major definitions
of quality.
A. “Quality is physical or non-physical characteristic that constitutes that basic

nature of a thing or is one of its distinguishing features”. – Webster’s new World
Dictionary.
B. “Customer satisfaction and Loyalty” and “Fitness for Use” - Juran.
C. “Conformance to requirements” – Phil. Crosby.
D. “Degree to which a set of inherent characteristics fulfills requirements” : - ISO
9000
The above definitions are popular and define the quality in generic terms. As can be
seen from these definitions, the quality has physical and non –physical dimensions, it is
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related to requirements as determined by the customer and the extent to which the
requirements are fulfilled. This can be best illustrated by an example: An Automobile
has physical characteristics like size, color, shape and others. The non physical
characteristics like functional characteristics – speed, fuel efficiency, smooth ride and
others.
When the definition: fitness for use and conformance to requirements is taken up for
discussion, we will be required to ask the question, who defines the requirements, who
decides that the product is fit for use. The answer obviously is the customer. Juran
defines the customer as: “Any one who is affected by the service, product or process”.
The customer will include both external customer and internal customer.
The External customers include those ultimate users (current and potential) and also
intermediate processors, as well as the retailers. The other customers are those who
may not purchase the product but may have some connection with it. They include
government and regulatory authorities, suppliers, partners, media and general public,
and others.
The internal customers are those, who are part of the process (belong to the company)
that produce the goods or services. Example: When purchase department in a
manufacturing company receives the specifications for the component that needs to be
purchased from Engineering department, purchase department will be the internal
customer to the Engineering department. Similarly, when the purchase department
makes available the components to assembly / production department, then assembly /
production assumes the role of internal customer.
The Internal and external customers are sometimes referred as “Stake holders”. External
customers are clearly of primary importance.
The common element of the definitions is that the quality of a product or service refers to
the perception of the degree to which the product or service meets the customer's
expectations. Quality has no specific meaning unless related to a specific function and/or
object. Quality is a perceptual, conditional and somewhat subjective attribute.
Self Assessment Questions: V

1 Three categories for products : ____________________, _________________ &
__________________
2 The definition of Quality as per Juran : _______________________________
3 Two dimensions of Quality are : ____________________ & _______________
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4 Two types of Customers are : ____________________ & _________________
1.5 Garvin’s Approach to Quality:

David. C. Garvin, Harvard Business School professor has identified several approaches
to Quality in his book “Managing Quality”. Each of the approaches has different
implications for Quality control and improvement. He has presented five approaches to
Quality and relates them to the eight dimensions of Quality.
Five Approaches to Quality:

A. Transcendent Approach: Quality is recognized through learning and
experience defined in terms of innate excellence.
B. Product – Based Approach: Quality is precise and measurable; it can be
ranked on various attributes and is an inherent part of the product.
C. User – Based Approach: Quality reflects personal, idiosyncratic view,
reflected in customer demand curves in marketing; quality is the ideal
combination of attributes for maximizing consumer satisfaction.
D. Manufacturing – Based Approach: Focus on engineering and
manufacturing practices; quality is defined as conformance to specifications;
reduce costs by reducing the number of deviations
E. Value – Based Approach: Quality is defined as performance or
conformance at an acceptable cost; this is the notion of “affordable
excellence”.
Eight Dimensions of Quality:

1. Performance: Primary operating characteristics; combines product and user
– based approach relationship between performance and quality reflects
individual reactions to objective characteristics.
2. Features: Characteristics that is secondary to basic functioning.
3. Reliability: Probability of the product failing within a given time period.
Relevant to the mission critical products and consumer durable goods.
4. Conformance: Degree or the extent to which the design and operating
characteristics match the specifications.
5. Durability: Measure of product life; technically, as the amount of use before it
deteriorates.
6. Serviceability: The speed and the ease of repair in case the product fails
during operation.
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7. Aesthetics : Subjective assessment of look and feel; reflects the individual

preferences
8. Perceived Quality: Indirect measures of Quality such as brand name, image.
Garvin had expressed fear that multiple definitions of Quality will cause confusion and
conflict resulting in dysfunction. He recommends that the different approaches to quality
to be dovetailed with the different stages of the product realization – design to
manufacturing to market place. He recommends a process with three steps to be
followed to address quality from its own perspective, using the methods and measures
appropriate to its needs. The three steps are:
b) Use market research to identify the product characteristics which can be

easily identifiable with customer needs
c) Translate these characteristics in to identifiable product attributes.
d) Define and establish manufacturing set up to ensure products are made
to specifications.
1.6 Berry’s 10 Dimensions of Service Quality:

Dr. Leonard Berry, a distinguished professor of Marketing in Texas A&M University and
his colleagues have identified attributes of the Service Quality through extensive studies.
These attributes are identified in 10 dimensions.
1. Reliability : Consistency in Performance and dependability performing the right

service right the first time; honoring promises; accuracy
2. Responsiveness : Willingness or readiness of employees to provide service;
timeliness
3. Competence : Ensuring that the personnel engaged in service provision are
competent with required skills and knowledge to perform the assigned tasks
4. Access : Approachability and ease of access; waiting time; hours of operation
5. Courtesy: Politeness, respect, consideration and friendliness of personnel who
come in to contact with customers.
6. Communication: Keeping the customers informed of the various aspects related
to the service in the language they understand.
7. Credibility: Trustworthiness, honesty, company reputation, personal attributes
and characteristics of personnel engaged in service provision.
8. Security : Freedom from danger, risk or doubt; physical safety; confidentiality
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9. Understanding the customer: Making the effort to understand the customer

needs; learning the customers’ specific requirements; providing individual
attention; recognition of regular customer.
10. Tangibles: Physical evidence of the service; physical facilities; appearance of
personnel; Equipments or tools used for providing service; physical
representation of service such as statement of a bank, policy document in
insurance and others.
Dr. Berry has summarized the above 10 dimensions in to five broader characteristics
with acronym: RATER.
1. Reliability (R): Ability to perform the promised service dependably and

accurately.
2. Assurance (A): Knowledge and courtesy of employees and their ability to
inspire trust and confidence.
3. Tangibles (T): Physical facilities, equipment and appearance of
personnel.
4. Empathy (E): Caring, individualized attention the firm provides its
customers
5. Responsiveness (R): Willingness to help customers and provide prompt service.
Self Assessment Questions: VI

1 Value based approach to Quality takes in to account the performance or
conformance at ____________________
2 In Manufacturing based approach, the focus is on ____________________
3 Reliability is the probability of ______________________________________
4. Any of the four important dimensions of Service Quality are :
___________________; _______________________;
_______________________; ____________________.
5. Five broad characteristics summarizing the ten important dimensions of the
Quality are: Reliability, Assurance, Tangibles, Empathy and ______________
6. As a service characteristic – Reliability is defined as ____________________
7. Willingness to help customers and provide prompt service is known as ________
1.7 Quality Dimensions as per Juran:

Customer satisfaction and loyalty are achieved through two dimensions:
Features and Freedom from deficiencies
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a) Features: - Some of the examples are: Performance, reliability, accuracy,

Ease of use and others.
Features have a major effect on sales income (through market share, premium
price and others). The total customer satisfaction in some of the industries can
be segmented by the “level” or “grade” of quality desired. Luxury hotels, Luxury
cars, premium branded apparels can be cited as examples for this. Features
refer to Quality of Design. Increasing the Quality of design generally leads to
higher costs.
b) Freedom from deficiencies: - Some of the examples are: Defect free

products, right first time – no rework and others.
Freedom from deficiencies has major effect on costs through reductions in scarp,
rework, complaints, and other results of deficiencies. “Deficiencies” are stated in
different terms like errors, defects, failures, off-specifications and others.
Freedom from deficiencies refers to Quality of Conformance. Increasing the
quality of conformance usually results in lower costs. In addition, higher
conformance means fewer complaints and therefore decreased customer
dissatisfaction.
To summarize, the quality is defined by customer. Features and Freedom from

deficiencies are the main factors deciding the satisfaction levels.
Self Assessment Questions: VII

1. Features relate to Quality of ___________
2. Freedom from Deficiencies relate to Quality of _____________
3. Higher Conformance means ________________________.
1.8 Quality Control, Quality Assurance and Quality Management :

Quality Control:
Quality Control activities include inspection and testing of the products or services after
they are produced and just before their delivery to the customers. The inspection and
testing activities are carried out to check conformity of the product with specifications /
requirements. If any of the products are not in conformance with the specifications, they
are quarantined / segregated and the actions as specified (repair, re grade, scrap) are
initiated.
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Quality Assurance:
Quality Assurance refers to planned and systematic production processes that provide
confidence in a product's suitability for its intended purpose. It is a set of activities
intended to ensure that products (goods and/or services) satisfy customer requirements
in a systematic, reliable fashion.
Quality assurance covers all activities from design, development, production, installation,
servicing and other associated activities. This introduces the rule ” Right first time”.
PDCA (Plan- Do- Check –Act) approach is the most widely used concept in Quality
Assurance.
Quality Assurance is about improving and stabilizing the production and associated
processes to eliminate or limit the defects from occurring, while the Quality Control is
about inspection and testing and preventing the defects from getting delivered to the
customers. However, QA does not necessarily eliminate the requirement for Quality
control in terms of inspection and testing.
Quality Management:
Quality Management has three components: Quality Control, Quality Assurance and
Quality Improvement. Quality management is focused not just on product quality, but
also on the means to achieve it. Quality management make use of the Quality assurance
and control activities for planning and realizing the product quality in a consistent
manner.
Self Assessment Questions: VIII

1. Design Control activity is part of Quality _____________.
2. Testing activity is part of Quality ________________.
3. Quality Control is related to activities carried out in ________
Production phase ( Pre / post)
1.9 Total Quality Management (TQM):

International Organization for Standardization (ISO) has defined TQM as:
TQM is a management approach for an organization, centered on quality, based on the
participation of all its members and aiming at long –term success through customer
satisfaction, and benefits to all members of the organization and society (ISO
8402:1994)
One major aim is to reduce variation from every process to achieve greater consistency.
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TQM requires that the company maintain the required quality standard in all aspects of
its business. This requires ensuring that things are done right the first time and those
defects and wastes are eliminated from operations.
Concept of TQM:
TQM is a management philosophy that seeks to integrate all organizational functions
(marketing, finance, design, engineering, and production, customer service, etc.) to
focus on meeting customer needs and organizational objectives.
TQM views an organization as a collection of processes. It maintains that organizations

must strive to continuously improve these processes by incorporating the knowledge and
experiences of workers. The simple objective of TQM is "Do the right things, right the
first time, every time". TQM is infinitely variable and adaptable. Although originally
applied to manufacturing operations, and for a number of years only used in that area,
TQM is now becoming recognized as a generic management tool, just as applicable in
service and public sector organizations. There are a number of evolutionary strands,
with different sectors creating their own versions from the common ancestor. TQM is the
foundation for activities, which include:
 Commitment by senior management and all employees

 Meeting customer requirements
 Just In Time
 Improvement teams
 Reducing product and service costs
 Employee involvement and empowerment
 Recognition and celebration
 Challenging quantified goals and benchmarking
 Focus on processes / improvement plans
 Specific incorporation in strategic planning
Continuous Improvement through TQM

TQM is mainly concerned with continuous improvement in all work, from high level
strategic planning and decision-making, to detailed execution of work elements on the
shop floor. It stems from the belief that mistakes can be avoided and defects can be
prevented. It leads to continuously improving results, in all aspects of work, as a result of
continuously improving capabilities, people, processes, and technology and machine
capabilities.
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Continuous improvement must deal not only with improving results, but more importantly
with improving capabilities to produce better results in the future. The five major areas of
focus for capability improvement are demand generation, supply generation, technology,
operations and people capability.
A central principle of TQM is that mistakes may be made by people, but most of them
are caused, or at least permitted, by faulty systems and processes. This means that the
root cause of such mistakes can be identified and eliminated, and repetition can be
prevented by changing the process.1
There are three major mechanisms of prevention:

1. Preventing mistakes (defects) from occurring (Mistake - proofing or Poka-Yoke).
2. Where mistakes can't be absolutely prevented, detecting them early to prevent
them being passed down the value added chain (Inspection at source or by the
next operation).
3. Where mistakes recur, stopping production until the process can be corrected, to
prevent the production of more defects. (Stop in time).
Self Assessment Questions: IX

1. One of the major aims of TQM is to reduce __________________ from every
process to achieve greater consistency.
2. TQM is a management philosophy seeking to ________________ all
organizational functions to focus on customer needs and organizational
objectives.
3. TQM views organization as collection of ______________.
4. The simple objective of TQM is “ Do the right things ______________
5. The central principle of TQM is that even though mistakes are made by people,
but most of them are caused by faulty ____________ and __________.
1.10 Summary
The concept of quality is quite popular and has been around for many decades. This unit
looked briefly at the evolution of quality awareness in management and examined the
definitions and components of quality. We examined the different approaches and
dimensions of quality and related them to both goods and services. The unit also
brought in the aspects of quality for service industry and clarified the differences in the
understanding of terms such as Quality Inspection, Quality Control, Quality Assurance
and Quality management. As an introductory unit to Quality management, the aim of the
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unit was to arouse the interest of the students on the relevance and meaning of quality
and its management.
1.11 Terminal Questions:

(1) Briefly explain the evolution of Quality Management
(2) Give a few examples of Japanese as well as American experiences on Quality.
(3) Describe the main features of Companywide approach on Quality.
(4) How do you understand Quality? Briefly explain the same.
(5) List the different approaches and dimensions to Quality.
(6) Write a note on Berry’s dimensions of service quality.
(7) Discuss Juran’s views on Quality.
1.12 Answers to SAQ’s and TQ’s
SAQ I
(1) Oversee Quality of production and rectifying errors.
(2) Production
(3) Walter A.Shewhart of Bell Labs
(4) Sampling and Control Charts
SAQ II
(1) Joseph Juran
(2) quality, productivity, innnovation, people aspects, competitive position
(3) JUSE (Union of Japanese Scientists and Engineers)
(4) quality planning, quality control and quality improvement
(5) Manufacturer and supplier
(6) Mistake Proofing
SAQ III
(1)Quality Parameters
(2) Prevention and not by detection
(3) Correcting mistakes
(4) Quality, Productivity and Competitive Position
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SAQ IV
(1) Management and people
(2) Any business or non-business activity
(3) Malcom Baldrige Quality Award, Deming Prize, EFQM (European Foundation for
Quality Management)
(4) ISO 9000 series
SAQ V
(1) Goods, software and services
(2) “Customer satisfaction and Loyalty” and “Fitness for Use”
(3) Physical and non-physical dimensions
(4) External customers and internal customers
SAQ VI
(1) At an acceptable cost
(2) Focus on engineering and manufacturing practices
(3) Product failing within a given time period.
(4) Performance, reliability, features, conformance
(5) Responsiveness
(6) Ability to perform the promised service dependably and accurately
(7) Responsiveness
SAQ VII
(1) Quality of Design
(2) Quality of conformance
(3) Fewer complaints and lesser customer dissatisfaction
SAQ VIII
(1) Quality Assurance
(2) Quality testing
(3) Post
SAQ XI
(1) Mistakes
(2) Integrate
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(3) Processes
(4) Right the first time, every time
(5) Systems and processes
Answers to Terminal Questions:

(1) Refer Section 1.2
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Foundations of Quality Management Unit 2
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Unit 2 Quality Approaches-Economic,

Social and Environmental
Structure
2.1. Introduction
Objectives
2.2 Quality Management Approach
2.3 Quality Economic Approach
2.4 Quality Social Approach
2.5 Quality Environmental Approach
2.6 Case study
Self Assessment Questions
2.7 Summary
2.9 Answers to SAQs and TQs
2.1 Introduction
Business organization exists in an environment. Environment and the business units
reciprocate and influence each other. Environment surrounding the organization is both
external and internal. Factors outside the business are known as external environment
and are broadly classified as political, economical, environmental and social. As the
business does not work in vacuum, it influence and get influenced by the existing
environment, as they are in continuous interaction with each other. The internal
functioning is affected by the external factors and the external environment gets affected
by the business functions.
Quality management concern is to provide quality in every sphere, be it business,

society, institutions, homes, or governmental departments.
What do we mean by „quality‟ and „quality system‟? Quality is often taken as

synonymous with excellence and certainly excellence is an important element of the
quality .A more pragmatic, and useful, concept is one of „fitness for purpose‟ or
„satisfying the customer's need‟.
“Quality Management can be described as a strategic process of seamlessly integrating

all functions, activities and processes of a Management or an organization for
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Sikkim Manipal University Page No.21
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continuous improvement of quality of goods and services”, the objective of quality

management is to achieve excellence in the performance.
Quality approach is to achieve excellence on economical, social and ecological

parameters. It emphasizes to provide quality in every dimension, process, and system to
all the social, economical and environmental factors .The focus is on wastage
elimination, quality, efficiency, productivity, growth and overall quality.
Quality economical approach is to gain max. return on investment, customer satisfaction,

stake holder‟s satisfaction, cost reduction and wastage elimination .To achieve quality
organizations need to agree with the requirement, specification, and the combination of
the contributing factors which provide the best They need to analyze and design the
process that eliminate waste and efficiently utilize resources to provide the best.
Quality shall be the essence of existence. As a human being we shall contribute to

quality in all and every dimension of life.
Objectives:
After studying this unit, one will be able to:
o List and understand the Quality Management approaches
o Discuss the role of quality in society, economy and ecology
o Recognize the importance of quality
2.2 Quality Management Approach

Quality management approach is to achieve excellence in every sphere be it, business,
economy, society, or environment. Quality management can be defined as the process
of integration of all activities, functions and process in order to achieve continuous
improvement in cost, quality, function and delivery for overall development.1
Quality management in every sphere is achievable if:

 All contributes to the respective goals and add value to all, who are
involved.
According to Taylor “If we achieve our goals –the company, the employees, and
society all benefits, more specifically each group in society benefit”. The true
1
Mandal S.K, 2005, edition 1, “Total Quality Management principle and practices”, Vikas Publishing
House
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value is the value which is meant for all, not a win –lose game-It should be win-
win situation for all.
 To look and observe the process involve for betterment

At the organizational and business level, it means observing and measuring
operational processes, to apply continuous improvement whether is Kaizen or
innovation, and at an individual level it applies to self awareness and
introspection.
 To change the process accordingly to meet the required goals

Willingness to change for the betterment will add value and make things more
effective .At the business level developing and adopting best practices will
enhance value.
 Address each and every issue and make any significant large or small,
based on the evidence
Quality management is not easy to implement and does not come for free,
organizations need to put extra work to implement, and they need to build an
appropriate system for it. Though on the offset of the difficulties, - return is
substantial to the organization.
Total quality management approach is to lead business actions that benefit the
business and the people.
Business -External environment

As the business organizations do not exist in isolation they influence and get influence
by the external factors.
The factors are:
 Economical
 Environmental
 Social
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Economic
environment
Ecological Business Social

environment Organisation Environment
Political
Environment
Business -External environment Figure 2.1
Economical: The quality economical approach is to provide quality in product or service

at a competitive prices ,while significantly , reducing wastage, decreasing cost, providing
high customer satisfaction, gaining competitive advantage ,and providing a vibrant
economy that affects in terms of taxation, government spending, general demand,
interest rates, exchange rates , and overall development .
Social: The approach of quality to social components, such as society, people,

customer, communities, is to provide quality in their behavior and beliefs, changes in
attitude towards health, and provide a better living and services
Ecological: The approach of quality is to provide safe and healthy environment and
surroundings for better living.
2.3 Quality economic approach

Business conditions are changing and evolving so as the economic environment. In this
competitive environment, organization requires new approaches to survive. Quality is
becoming prime priority for most of the organizations and implementing a quality system
requires management commitment to develop a quality assurance program. This
embraces a variety of activities designed to ensure reliability in the first place, specific
quality control measures to monitor quality on a routine basis.
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The goal of quality system should be to avoid errors rather than to detect them. The
reduction of correction costs is recognized as a benefit which can be offset against the
cost of the system.
The quality economical approach is to provide quality product or service at competitive

prices while reducing wastage, decreasing cost, providing high customer satisfaction,
gaining competitive advantage ,provide a vibrant economy that affects in terms of
taxation, government spending, general demand, interest rates, exchange rates , and
overall development and growth.
Following are some of the quality economical aspects:

Reduce Cost
Cost is an important concern for organization, in fierce competitive market, organization
are struggling to provide quality at lesser cost to gain competitive edge. Quality helps an
organization to reduce wastage and come up with quality product or service at
competitive price.
Now the question arises as how to reduce cost and get quality?
The quality costs are the cost of not doing the right things right first time or the cost
incurred because failure is possible
Philip Crosby published in his book “Quality is free”, stressed upon the removal of
defects which is in built cost in running any business. There are various costs
associated, with the quality negligence.
Crosby suggested that by eliminating all the errors and reaching zero defects, it will not
only reduce the cost but also satisfy the customers.
By reducing complexity and installing failure-prevention measures, there will be less

spending on failure detection and correction. After initial investment made, in long term
customer requirement can be meet by spending less. Low cost can result from high
productivity and high capacity utilization .Improvement in quality leads to improvement in
productivity, which in turn lower the costs. Lower costs is also a result of innovation in
product design and process technology, as it reduces the cost of production .Many
Japanese companies adopted product innovation and process technologies ,they refined
the designs and manufacturing processes to produce high quality products at low cost,
resulting in higher competitive advantage than before.
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As high defective rates lead to high cost and vice versa. Organization need to control its
defectives, errors and damage rate to control its cost factor and improve its quality
substantially. High defectives increase not only the cost of production bust as well as
customer perception. To survive and gain competitive advantage organizations need to
work on its processing structure and improve its quality
Lower
deficiencies
Cycle Time Warranty Waste
Cost Profit
Figure 2.2
Internal failure costs External failure costs Prevention costs Appraisal costs
•Scrap •Warranty charges •incomin inspection and

•Quality planning testing
•rework •complaint adjustment •New product review
•failure analysis •Returned material •In process inspection and
•Process control testing
•Scrap and rework supplies •allowances •quality audits 'supplier •Final inspection and
•one hundred sorting quality evaluation'training testing
inspection
•Product quality audit
•reinspection and testing
•Maintaining accuracy of
•avoidable process losses
testing equipment
•Downgrading
•Evaluation of stock
Reduce wastage
The wastage increases the cost and lead to high pricing and in the competitive scenario
it is difficult for organization to survive with high cost products. Quality approach provides
the elimination of wastage at every process. Wastages are due to mistakes and wrong
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process, Like Poka yoke – (mistake proofing) –a method that concentrates on

elimination of mistakes to avoid wastage.
Gain Competitive advantage

Quality has become a key issue for companies. Competitive advantage denotes a firm
ability to achieve market superiority .To sustain in the competitive market an
organization needs to perform above average. Organizations which are capable to
satisfy the customers need and provide value to them, can gain competitive advantage
over their competitors. It requires a lot of resources and utilization of them to gain
maximum advantage and satisfy customers need better than others.
An organization absolute goal should be gaining competitive advantage through

customer satisfaction .A quality system designed on people centric approach is viable,
and other important thing is the ability of an organization to win or retain customers, its
image or credibility, and the staff morale.
These are various tools to gain competitive advantage:

 Creativity and innovation
Creativity is essential for continuous improvement in an organization. According
to the Webster‟s dictionary creativity means,‟ to produce through artistic or
imaginative effort„s and innovation means doing something new or unusual
„together they mean doing or producing „something new or unusual through
imaginative efforts‟ .creativity and innovation help organization to think out of box
and bring out new solutions to various problems. Now a day‟s organizations are
concentrating on breakthrough thinking and encouraging bringing out quality in
every dimension through new ideas and innovations. Creativity is considered as
an important tool to gain competitive advantage.
 Poka Yoke (mistake proofing)

This method helps to avoid common human errors; this is simple mistake –
proofing process which focuses on two aspects such as predicting and
recognizing that a defect is about to occur, and then providing signals and
warning or by detecting and recognizing the error after it has occurred and then
stopping the process so that no further errors can be done, with the application of
Poka Yoke method mistakes can be avoided and this helps to reduce wastage
and enhance quality.
Just in Time:
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Toyota Motor Co. in Japan has developed this Just in Time (JIT) or lean concept to
improve the quality and performance in production and manufacturing.
The concept is based on three essential elements

 Optimal standardization with everything measured and under control.
 Workflow optimization
 Pull production
These are some of the other tools to gain competitive advantage

o Kaizen
o Zero defects program
o Benchmarking
o Business Process Re-engineering
o Six sigma
Face Competition: Business organizations do not want competition, though facing

competition is inevitable for most of them, as the market is changing all the time,
customers need and want are changing, new competitors and technologies are entering
market. The competition depends on market in which the business operates ,It can be
from many small or large rival business or from the rapidly changing market , or from
the technology which is being developed very quickly , previously, it was considered that
high quality -high price .But now, customers are accessible to high quality at low prices
.Due to high competition, an organization needs to reduce its internal costs of (sorting,
inspection, and rework scrap) for providing a quality product .Business could survive and
gain competitive edge by providing quality, reducing price and cutting cost .
Right Pricing:
Price is important characteristic of product .People are attracted and price conscious.
Reduction of costs and wastage leads to right pricing.
Increase Market share: In a competitive business scenario gaining maximum market

share is not easy .Organization performance depends upon their customer satisfaction.
To gain competitive advantage and gain market shares, organization needs to
concentrate on the quality.
Satisfy stakeholders, expectations: The quality approach emphasis on quality, gaining

competitive advantage, making profits and satisfying customer expectations.
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Provide overall economic growth: Quality provide a vibrant economy that affects in
terms of taxation, government spending, general demand, interest rates, exchange rates
and global economic factors.
2.4 Quality social approach

The quality social approach is to provide quality in every dimension of life - , Heath,
education, culture, family religion, environment, and society. Quality is as large as life
itself .Quality needs betterment and improvement, free from all grudges well in all
dimensions of society .A stable society is the outcome of quality. A global society of
quality shall not have war, starvation fear and oppression.
Quality social approach is to make organizations realize the need; to be aware of their
social responsibilities, consider the effects, business can have on the local community.
Social aspect of quality is to provide community, society a better standard of living,
health, education, attitude, quality life and overall development and growth. Business
organizations need to provide the products, services, which are environment friendly. In
These ways they can act responsibly towards the different parts of society that they
come into contact with.
Quality social approach is:

People centric and customer focused
Quality is about meeting or exceeding customer expectations. The customer is the
judge of quality, value and product. Total quality approach focuses on customer
satisfaction and delight in terms of product quality and services .The approach is
customer satisfaction through innovation, as there are many factors throughout the
customers overall purchase ,and service experiences.
To accomplish this, a company efforts need to extend well beyond merely meeting
specifications, reducing errors, or resolving complaints, the entire process of a company
shall be an unending chain to deliver improve products and services This must include
both designing new products that truly delighting the customer and responding rapidly to
changing consumer and market demands. A company should focuses on customer
needs and wants, and know how the customer uses it, and anticipates the needs that
the customer may not even able to express. The approach focuses on continually
development of new ways of enhancing customer relationship. The underlying approach
is total customer satisfaction
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supplier organisation customer
TQM-strategic Performance
process excellence
Customer
satisfaction
Figure 2.4
The strategy of Total Quality Management is to try to build customer orientation so that
each one in the organization feels committed to provide customer satisfaction
Social factors influencing quality:

Changing customer: The customer base are changing with globalization, new
geographical areas, different customer tastes ,perception ,choices .An organization
needs to cope with changing requirements and serves to provide the best quality in
order to gain prominence in the market. As some of the companies are entering
industrial and consumer market for the first time.
Changing customers need:

The customer expectations have spawned by competition, in many forms. The needs
are changing and organizations need to keep pace with changing customer‟s need, with
innovative product line and creative process and adding value at every step.
2.4.3.3 Changing product mix: The organization needs to keep pace with the market
and customers demand, therefore it requires that they should provide correct product
mix .For example, earlier computer manufacturer were focused primarily on low volume,
and high price mix now it is shifted to a mix that includes high volume and low price.
Product complexity
With changing customers demands and perception .Organization are stressing on new
innovative ideas to gain competitive advantage .The system and products have become
more complex.
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2.5 Quality Environmental Approach:

Industrial and economic development have led to faster depletion of natural resources,
forestry, water, coal, and petroleum etc have given impetus to growth and now with the
fast depletion of resources the crisis is approaching. Pollution, carbon and gaseous
emission, are adding to crisis. Large scale usage of natural resources is not only
causing depletion but also leading to wide spread air, water and noise pollution that is
again leading to hazardous health problem and severe consequences . Emission of
hazardous gases are depleting the ozone layer in the atmosphere and disturbing
ecological imbalance. The consequences have alarmed the society, organization and
various other institutions. Now organizations are aware of their environmental and social
responsibility and are taking various measures to safeguard environment.
Social responsibility of business organization is to keep check on issues pertaining to

environment. To discharge the responsibility organizations need to accomplish
“Environmental Quality policy”. Total quality management provides a model for business
excellence by advocating on environment management as a key business process to
create eco- friendly environment and built premises of secure environment and better
working condition.
Quality management concentrates on the activity that lead to environment pollution

directly or indirectly and causes harm to environment and health, hygiene of people in an
around the business. It checks the problem and consequences of the environmental
issues and concentrates on the following areas
1. Generation and discharge of pollutants to the environment, namely air, waste or

excessive noise
2. Industrial energy management
3. Management of industrial health, hygiene and safety
4. Management of ecology and forestry2
2
House.
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Quality management to check environmental issues
•Identify •Area need to •Meausres the

environment focus to sove the action to achieve
realted issues issue the results
Figure 2.5
Following are the steps to check the environmental issues:

 Identification of environmental issues
 Area need to focus to solve the issue
 Measures the action to achieve the results
The outcry to save environment, leads business organizations to take serious initiative to
manage environment and design mode and process to achieve eco friendly system.
Tata Group of Industries is one of the examples that follows eco governance, the
township of Jamshedpur and surrounding is model of eco governance .This group has
marked eco governance for superior business performance.
The quality environmental approach emphasis organization to take accountability to

society and check environmental issues by taking various steps, such as, making
employees aware of the need to control and improve environment and make them
understand the management commitment ,for environment up gradation, and to feel
them motivated and inspired to act.
Organizations need to identify areas that require attention and monitor it to discharge, air
polluting units, waste disposal operation etc. Proper planning and documentation is
required to manage the environment quality in the company -such as, what is to be
done, how and by whom. Facilities and capabilities is to be developed for measuring
controlling and improving all environment related activities and processes by setting up
effluent testing laboratories, disposal tanks and treatment plants, installation of pollution
controlling equipment and instruments. People should be trained empowered and
encouraged to take initiative and come up with the innovative ideas to deal with the
environmental issues and improvements. Measuring, controlling the environment as per
planning and reviewing for continuous improvement and dealing with the side effects of
it.
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Proper documentation, record keeping and data control system, are required for
implementing and developing a quality environment system.
Table 2.6: Depicts the Principal Scopes of Different ISO-14000 Principal Standards
on Environment Management System
International Standards on Environment Management System:

ISO-14000 Principal Standards
Table 2.63
1. ISO-14000: Environment Management System – General guidelines
2. ISO-14001: Environment Management System – Specifications with guidance for use
registration authorities and third party inspection
3. ISO-14004: Environmental Management System – General guidance on principle
systems and supporting techniques
4. ISO-14010: Guidelines for Environment Auditing – General principles of environment
auditing
5. ISO-14011: Guidelines for Environment Auditing – Audit procedures
6. ISO-14012: Guidelines for Environment Auditing – Qualification criteria for
environment auditors
7. ISO-14013: Guidelines for Environment Auditing – Management of environment
auditing system
8. ISO-14014: Guidelines for environment audit review
9. ISO-14015: Guidelines for site assessments
Table 2.7 Illustrative examples of TQM and environment management4
Issues Areas of Address Measures and Actions

1. Control of 1.1. Control of water Checking possible sources of
water contamination: contamination
pollution Measuring water quality at identified
points
1.2 Control of water discharge Preventing or minimizing

contamination
3
House
4
ibid
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Designing and laying discharge lines

Measuring water for polluting
chemicals
1.3 Effluent treatment
discharge water Deciding treatment plan and process
Effluent treatment of discharged water
Monitoring outgoing discharge water
1.4 Monitoring of water quality
at different outlets Water sample collection plan and
analysis
Reporting and conformance study
Improvement plans and actions
2. Control of 2.1 Control of particulate
air pollution generation Identification of sources & processes
Standardization of processes to
minimize particulate generation
Installation of equipment and facilities
for preventing particular discharge to
air
Measuring air samples at critical
points for conformance and
improvement
3. Energy 3.1 Source of waste: Audit of energy usage and

audit & consumption
management Identification of controls and
improvement points
3.2 Control of waste: Identification of methods of control

Installation of control measures
Measurement of data and analysis
Improvement actions and monitoring
3.3 Energy Editing : Adoption of audit system

Resource deployment
Audit result review and corrective
actions
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1. Fill in the blanks with the option given
Quality environmental approach is to check __________
(a) Environmental issues (b) Political issues (c) Progress (d)
Health
2. Quality social approach is:
(a)Profit centric (b) Customer and people centric (c)
Leadership (d)Technology centric
3. What is quality economical approach?
2.7 Summary:
Quality is the key issue for society whether its business, product, service, education and
health care; in each and every sphere quality is a major concern and the tool for
betterment. Focus on quality has profound effect on nature and global society. The aim
is to achieve quality by setting goal, working on process and continuously improving the
process that leads to positive results. The integration of activities, functions and
processes helps to achieve improvement in cost, quality, and delivery for excellence.
The principles, methods and best practices provide a framework to strive for excellence
and provide quality in every sphere of life.
Business organizations play critical role in providing quality through delivering quality
products or services. Organizations do not exist in vacuum, they have an environment
around, classified as economical, social, political, and ecological and they all are
interrelated. They influence and get influenced by each other .The influence is
substantial and therefore, it makes business units responsible to society, now
organizations are aware of their social responsibilities and continuously working to
improve in every process, initiation and outcome.
The Quality approach makes business organizations accountable to society and

stresses on the generation of quality in the processes for social, economical and
environmental betterment and focuses to lead business actions that benefit the
business and the people.
Quality economical approach is to apply various tools, methods, processes and

technologies to eliminate wastage, reduce cost, improve quality and produce quality
products or services to satisfy customer and gain competitive advantage. Innovation and
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creativity is an important tool to achieve it, the out of box thinking approach makes
organizations to come up with new ideas and develop competitive edge.
Quality social approach is people centric; it aims to provide overall development, growth
in health, education, environment, economy and quality of life.
Society needs healthy environment to grow and live quality life. Environment and
ecology are the twin faces of nature that supports civilization and society. Quality is as
large as the life itself, the increasing pollution rate, emission of hazardous gases and
chemicals are harming ecological balance; with global warming consequences are
severe. Quality approach stresses on organization to take initiative to safeguard
environment and take it as social responsibility and pledge commitment to the society at
large. There are policy designs for managing environment quality, for example ISO-
14000 is an environment policy that an organization needs to comply with. Organizations
need to document pragmatic application of the policy, communicate the policy and
implement it. They also need to review it regularly to evaluate its effectiveness.
The quality approach is to gain continuous improvement and achieve excellence in every
sphere and process - nothing less than that.
TVS5
Threats and opportunities take TVS group companies into the rigorous world of absolute
quality standards. Now , a couple of years after companies such as Sundaran Clayton,
SBL, and TVS Motors have won the Deming medal, it is important to find out how they
evaluate their progress and how the implementation of the suggestions made by JUSE
has helped their operations. If there is one industrial group that has been infected by the
„ Deming‟ bug, it us the Chennai-based TVS group. And it is happy about it. Since 2001,
one TVS group company figures in the prestigious Deming Application prizewinners
announced by the Union of Japanese Scientists and Engineers (JUSE). Incidentally,
group company Sundaran Clayton Limited became the first Indian company in 1998 to
win the Deming medal. He company‟s brakes division became the proud recipient of the
prestigious award.
Other group companies to win the Deming medal have been Sundaram Brake Lining
Limited (SBL) in 2001, TVS Motors Limited in 2002, and Brakes India Limited‟s Foundry
Division in 2003. In the year 2004, it was Lucas TVS Limited which kept alive the
Deming‟s association with the group. However, winning a Deming is not akin to
5
Bedi Kanishka ,”Quality Management”, edition ,Oxford Higher education
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becoming ISO- certified. On the other hand the total quality management process might
even involve changing a company‟s corporate culture. Accounting to JUSE, the Deming
is awarded to companies or divisions that practice TQM suitable to their management
practices, their business, and the industry they operate in. explaining the TQM process
at Sundaram Clayton, Venu Srinivasan, Managing Director (and also the Chairman and
Managing Director of its sister company – TVS Motors – another Deming recipient) says,
„it is a company-wide effort at continuous quality improvement of all processes, products
and services through total employee involvement, that results in increasing customer
satisfaction and loyalty, and improved business results.‟ Intertingly, the TVS group
adapted to the TQM concepts and assimilated them in its own „TVS culture „ to the
extent that the auditors from JUSE commended the TQM practices in the group as „TVS
TQM. JUSE also examines whether the medal challenger, as the applicant is referred to,
has established „ challenging customer-oriented business objectives and strategies
under clear leadership‟ and precisely how TQM was implemented to achieve them,
JUSE also assesses whether the company has scored „outstanding achievement‟ in its
business objectives and strategies after implementing TQUALITY MANAGEMENT.
According to JUSE, TQM is a set of systematic activities carried out by the entire
organization to achieve effectively its objectives to provide products or services at a
quality that satisfied customers at the appropriate time and price. The shortest way to
Deming is to undertake only those activities that are really necessary for its business
and scale. For all the TVS group winners, it was a hard grind before they won the
Deming, However it has been worth it all as the benefits have helped beef up the top
and bottom lines of each of the recipients. „The award certainly puts the company on a
higher pedestal straightaway,‟ remarks SBK‟s Chairman and Managing Director, K.
Mahesh. „ Though many companies outside India are not familiar with the Deming Prize,
they know that it is the highest recognition in a company‟s quest for total quality‟ Adds
Srinivasan, „TVS Motor experienced significant increase in sales after receiving the
Deming medal. Our turnover, which was around Rs. 1,940 crore in 2001-02, went up to
over Rs. 2,700 crore in 2002-03 and to Rs2, 856 in 2004. The projection for 2005 is Rs.
3,200 crore.‟ Wining the medal is not an end in itself. It is like catching a tiger by its rail.
Any slackening in the quality process impacts the bottom line. Naturally, businesses
keep an eagle eye to spot any variance and take immediate corrective action. As there is
always scope for continuous improvement and to encourage companies to aim higher,
JUSE also awards the Japan Quality Medal (JQUALITY MANAGEMENT)- considered a
cut above the Deming. Three years after winning the Deming medal, companies have to
submit a status report to JUSE. At this stage they can also challenge the JQUALITY
MANAGEMENT. By the time a company challenges the JQUALITY MANAGEMENT, all
the employees would have imbibed the TQM process and procedures, which by then,
will have become a way of life for everyone in the company. In 2002, Sundram Clayton
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became the first Indian company and the second outside Japan to bag the JQUALITY
MANAGEMENT, „The Deming award is just a milestone in a company‟s TQM journey‟
„remarks Mahesh. According to him, „The race for quality has no finishing line.‟ Not
surprisingly, all the Deming awardees in the TVS group have reported enviable
performance record. For instance, the Rs. 230 crore Brakes India‟s Foundry Division
works continuously to improve upon the value addition in order to become a tier-I
supplier to original equipment manufacturers (OEMs) from its status of a tier – II / tier –III
supplier. Says Executive Director V. Narasimhan, „Unlike normal foundries that work with
customer drawings and specifications, we are increasingly getting involved with product
design through collaborative efforts with our customer. We differentiate ourselves by
getting more and more involved at the design stage itself.‟ He elaborates, „The Deming
award has considerably enhanced out status in the domestic and the export markets and
has helped us become the largest exporter of automotive castings from India besides
also becoming the largest automated ductile iron foundry in India. „The foundry turns out
around 42, 000 tonners of ductile iron and permanent mould castings per annum and
have sustained an enviable 35% growth year-on-year for the last three years. Similarly,
all the companies have taken appropriate steps to incorporate the suggestions made by
JUSE during the audit for the Deming medal. According to SBL‟s Mahesh, after
implementing JUSE‟s suggestions, the company‟s sales. Compared to its nearest
competitor, have not only improved substantially; the gap is continuously widening in its
favour in the automotive friction material segment. Moreover, the company has also
used the suggestions to develop new products such as asbestos-free composite brake
blocks for the Indian Railways. It has supplied a pilot batch of 1,800 brake blocks to
Indian Railways and expects a sales volume of Rs 9 crore in the next three years.
Similarly, TVS Motors, in keeping with JUSE‟s recommendation to have an integrated
approach to its brand recognition strategy, strengthened the brand image and visibility
using brand ambassadors for its two-wheelers – cricketer Sachin Tendulkar for TVS
Victor and actress Priety Zinta for scooty pep. At a time when many TVS group
companies have embraced TQMwith missionary zeal, Sundram Fasteners Limited is
happy following total productivity maintenance (TPM). It was the first Indian company to
get an ISO certification. The company has been winning the „supplier of the year‟ awards
from the US giant, Ceneral Motors, and has won TPM awards from the Japanese
Institute of Plant Maintenance (JIPM). Pioneering the TPM movement in India, Chairman
and Managing Director Suresh Krishna explains why Sundram Fasteners is not looking
at the Deming award, „Both TPM and TQM aim to reach the same destination. I am
happy and satisfied with my path.‟
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1. What are the quality approaches?

2. What are the social factors that influence organization to concentrate on quality?
3. What is quality?
SAQ
1. Refer to 2.5
2. Refer to 2.4
3. Refer to 2.3
Answers to TQ
1. Refer to 2.2
2. Refer to 2.4
3. Refer to 2.5
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Unit 3 Quality and Customer focus
Structure
3.1 Introduction:
Objectives:
3.2 Customer satisfaction:
3.3 Customer Driven Quality Cycles:
3.4 Identifying Customers:
3.5 Customer segmentation:
3.6 Understanding the customer needs:
3.7 Gathering and analyzing customer information:
3.8 Customer relationship Management:
3.9 Customer Relationship Management (CRM) Technology:
3.10 Measuring Customer Satisfaction:
Self Assessment Questions: X
3.11 Summary:
3.13 Answers to SAQs & TQs
3.1 Introduction:
In this era of high competition, the organizations are required to be highly customer
focused to achieve success and growth. No business can survive without customers
and in these days of wider choices, the customers are little impatient with the companies
that are slow or lethargic in meeting their requirements. They do not hesitate even for a
few minutes to switch over to the competitors if their requirements are not fulfilled. The
companies world over are exploring ways and means to determine the factors that are
most important for ensuring the customer satisfaction and are making all out efforts to
incorporate these factors in their products and processes. It should also be noted that
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the factors determining the customer satisfaction keep changing over time. Therefore, it
has become imperative for the companies to institute processes to keep track of the
changing customer requirements in a structure manner, carrying out the analysis with
respect to company’s ability to meet those requirements. The processes should also be
instituted for addressing the complaints from the customers in an expeditious manner so
that customer dissatisfaction should not result in loosing a customer.
The companies following the philosophy of TQM do remember very well the famous
quotes from Mahatma Gandhi, which describe the position of customer in a business.
“A customer is the most important visitor on our premises. He is not dependent

on us; we are dependent on him. He is not an interruption in our work; he is the
purpose of it. He is not an outsider in our business; he is part of it. We are not
doing him a favor by serving him; he is doing us a favor by giving us an
opportunity to do so.”
Objectives:
a) Concept of Customer satisfaction.
b) Identifying the customers – Internal and External
c) Segmentation of customers.
d) Understanding the customer needs – Kano Model.
e) Gathering and analyzing customer information.
f) Customer relationship management including effective complaints management.
g) Measurement of customer satisfaction.
3.2 Customer satisfaction:

New companies (many start ups) create new markets with innovative products. This
process basically tells customers what they want. As customers become more and more
sophisticated and competition increases, these firms often face a competitive crisis and
must begin to listen to customers more closely.
Many companies have not developed their capability in this area. A research study has
shown that quality of customer service will be critical factor to maintain competitive edge
in 21st century. The organizations must also use customer focus as a key driver for its
strategic planning activities.
Customer satisfaction is an important factor for the bottom line. A study has shown that a
company with 98% customer retention rate was twice as profitable as those at 94%.
Studies have also shown that dissatisfied customers tell at least twice as many friends
about bas experiences than they tell about good ones.
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Even though satisfaction is important, modern firms need to look further. “Customer
Loyalty” is one of the driving factors to achieve sustained profitability and increased
market share. Loyal Customers are those, who stay with the company and make positive
referrals. Satisfaction and Loyalty are two different concepts.
Customers who are merely satisfied may often purchase from competitors because of
convenience, promotions and other factors. Loyal Customers place priority on doing
business with a particular company, will often go out of the way or pay premium to stay
with the company. Loyal Customers spend more, are willing to pay higher prices, refer
new clients and are less costly to do business with.
Studies have shown that a typical company gets 65% of its business from existing
customers and it costs 5 times more to find new customers than keep existing customers
happy.
Customer satisfaction occurs when products and services meet or exceed customer
expectation. To exceed expectations, the organization must deliver ever- improving
value to its customers. Customers no longer buy solely on the basis of price. They
compare the total package of products and services that a company offers with the price
and the competitive offerings.
This total package influences the perception of quality and includes the physical product
and its quality dimensions; pre-sale support such as ease of ordering, rapid on-time and
accurate delivery; and post –sale support such as field service, warranties, and technical
support. If competitors offer better choices for similar price, the customers will rationally
select the package with the highest perceived quality.
If a competitor offers the same quality package of goods and services at a lower price,
customers would generally choose the one having the lower price. However, lower
prices require lower costs if the company is to continue to be profitable. Quality
Improvements in operations reduce costs. Thus, understanding exactly what customers
want and their perceptions of value is absolutely crucial to competitive success.
Business must focus on both continually improving both the customer benefits package
and improving the quality of their internal operations.
In addition to value, satisfaction and loyalty are influenced greatly by service quality,
integrity and the relationships that organizations build with customers. One study has
found that customers are 5 times more likely to switch because of perceived service
problems than for price concerns or product quality issues.
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1. Quality of Customer _______________ is a critical factor in maintaining the
competitive edge in 21st century.
2. Customer ____________is one of the driving factors to achieve sustained
profitability and increased market share.
3.3 Customer Driven Quality Cycles:
Customer needs and

expectations (expected
Quality)
Identification of Customer needs
Translation in to product / service

Specifications (Design Quality)
Output (Actual Quality)
Customer perceptions
(Perceived Quality)
Measurements and benefits
The above figure depicts the process through which customer needs and expectations
are translated in to inputs for design, production and delivery processes.
True customer needs and expectations might be called – Expected Quality. The
Expected Quality is what the customer assumes will be received from the product.
These needs and expectations are translated in to specifications for products and
services (Design Quality).
Actual Quality is the outcome of the production process and what is delivered to the
customer. However, actual quality may differ considerably from expected quality if
information on expectations is misinterpreted or gets lost from one step to the next step
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in the flow map. Example: Market research may fail to correctly assess the true
customer needs and expectations. Designers of products and services may develop
specifications that inadequately reflect these needs. Manufacturing operations or
customer contact personnel may not deliver according to specifications.
Customers assess quality and develop perceptions (Perceived Quality) by comparing

their expectations (Expected Quality) with what they receive (Actual Quality). If the
actual quality fails to match the expected quality, the customer will be dissatisfied. On
the other hand, if the actual quality exceeds expectations, then the customer will be
satisfied or even surprisingly delighted. As the perceived quality drives the customer
behavior, producers should make every effort to ensure that actual quality conforms to
the expected quality.
It should be noted that the customer perceptions are not static but keep changing over
time. Hence the producers are expected to be on their toes to meet the expectations.
Understanding these relationships requires a system of customer satisfaction
measurement and the ability to use customer feedback for improvement. It requires that
producers must take great care to ensure that customer needs are met or exceeded
both by the design and production process.
The producers are required to look at the processes through the customers’ eyes and
not the organizations. An organization’s focus is often reflected by the measures that it
uses to evaluate its performance. When an organization’s focus is on such things as
production schedules and costs, productivity or output quantity rather than ease of
product use, availability or cost, it is difficult to create customer –focused culture.
Many causes of dissatisfaction are not attributable to production or service defects or

employee mistakes. Customers may not use the product correctly. Some times the
customers may have unreasonable expectations about what it can do that has been
created by exaggerated claims over the product performance by the marketing or
misleading advertisements. These points suggest that companies must pay greater
attention to overall customer experiences that impact perceptions. Such attention might
include better user manuals or information on product packaging as well as
unambiguous advertising.

1. ___________ Quality is what the customer assumes will be received from the
product.
2. ____________ Quality is the outcome of the production process and what is
delivered to the customer.
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3. If the ___________ quality fails to match the ____________quality, the customer
will be dissatisfied.
4. Customer perceptions are not static, but keep changing over ________.
3.4. Identifying Customers:

Generally, it is the ultimate end user, or consumer, who purchase and the use the
product is considered as the customer. However, the consumers are not the only
customer group who should be of concern to the company, but there are other groups as
well.
The easiest way to identify customers is to think in terms of customer – supplier

relationships. AT & T uses a Customer – Supplier model as shown in the figure below.
Inputs Outputs
Supplier Process Customer
Requirements and Requirements and

feedbacks feedbacks
Every process receives inputs from suppliers and creates outputs for customers. The
feedback loop suggests that suppliers must also be considered as customers. They
need appropriate information about the requirements they must meet. This model can be
applied at the organization level, at the process level and at activity performer level.
External Customers:
There are various external customers with different requirements and needs. Typical of
them are:
a) Retail stores / distributors – these are external customers to manufacturers with
the typical requirements: Timely delivery, Advertising support, appropriate
product display, accurate invoicing and others.
b) Consumers - these are those who purchase from retail stores and consume/ use
the product. Their typical requirements are: Product Quality, Pricing, Availability,
serviceability and others.
Internal Customers:
At the process level, departments, and key cross –functional processes within the
company have internal customers who contribute to the company’s mission and depend
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on the department’s or function’s products or services to ultimately serve consumers /
external customers.
Example: 1 Manufacturing is a customer for Purchase. In a typical manufacturing

situation, manufacturing (production) give the requirements to purchase who make
necessary arrangements to make available the same for manufacturing.
Example: 2 Nursing unit can be considered as a customer for the Laundry division in a
hospital.
At performance level, each employee receives inputs from others and produces some
outputs for their internal customers.
While identifying the customers, the following questions which are fundamental in nature
are asked.
a) What products or services are produced?

b) Who uses these products and services?
c) Whom do employees call, write to or answer questions for?
d) Who supplies the inputs to the process?
Eventually, everyone can better understand their role in satisfying not only their internal
customers but also the external customers.
The natural customer –supplier linkages among individuals, departments and

functions buildup the “chain of customers’ throughout an organization that
connect every individual and functions to the external customers and consumers
thus characterizing the organization’s value chain.
An organization that consider employees and general public as customers, consciously

maintains a work environment conducive to well being and growth of all employees. The
Quality improvement activities pay utmost importance to Health, safety, ergonomics
apart from training and skill development. Some companies even arrange for special
facilities like recreational and cultural activities, non-work related education and others
for the benefit of employees.
The organizations must be sensitive to the concerns of the general public in order to
ensure sustainable growth. They must anticipate their concern and assess the possible
impact of their products, services and operations on the general public and environment
at large. Business ethics, environmental concerns and safety are the critical societal
issues in the recent times. Companies can have a powerful influence on communities as
corporate citizens through their contributions to charitable activities and the personal
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involvement of their employees. General public judge the companies’ role in addressing
the societal concerns through their actions. This has a major influence on their buying or
patronizing behavior towards the company’s products and services there by impacting
the sales, profitability and growth.

1. Advertising support is one of the typical requirements of Retail stores /
distributors --- True / False.
2. In a typical Manufacturing company, Purchase function can be considered as
________________ customer to the production function.
3. Quality Improvement programs should pay attention only to issues related to
product quality and not to health, safety and environmental issues. --- True /
False.
3.5 Customer segmentation:

Customers generally have different requirements and expectations. A company can not
satisfy all customers with the same products or services. This point assumes
significance if the company is operating in different countries or geographies. Therefore
companies segment their customers in to natural groups and customize the products or
services in order to be able to respond to their needs.
The principle: “Vital few and useful many” principle is usually adopted while carrying out
the segmentation of the customers.
Example: Some customers who purchase in bulk and contribute significantly to the sales
are to be treated differently compared to some customers who purchase small
quantities. However, the numbers of customers who purchase in bulk and contribute
significantly to the sales are very few numbers, but are vital for realization of large
volume of sales. Defense stores, restaurants, Hotels can be examples of these vital few
customers for a wholesales grocery stores. Similarly, some customers make purchases
in small quantity but very frequently. Their numbers are large. Even though, as individual
customers, their contribution to the sales is very less but all of them put together, the
sales income generated would be huge.
Customers can also be segmented based on their contribution towards business results
(profitability). Profit potential is normally measured by the Net present value of the
customer (NPVC).
NPVC = Total profits discounted over time.
Note: Total profit is the revenue from the customer minus the expenses incurred to
service the customer
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We can consider the frequent flyer for an airline as an example. By segmenting the
customers according to their flying frequency, an airline can determine the level of
benefits that can be offered as a means of retaining them. This can also be used to
entice the potential customers to use the airline for their travel more frequently. Another
example is the points offered by credit card companies for every use of credit card or
some retail chain stores for frequent shoppers. Firms can make use of NPVC to
discourage customers with low or negative value from continuing to do business with
them as they represent a financial liability.
Customer segmentation is carried out based on geography, demographic factors,

product usage methods, product usage volumes and others.
Segmentation allows the companies to decide on which of the groups to be give priority
for initiating actions to meet their expectations and demands. This will help in
channelizing the efforts in the right direction. The efforts can be for aligning the internal
processes towards meeting the expectations of the customers whose NPVC are highest.

1. Companies segment their customers in to ____________ and customize the
products or services in order to be able to respond to their needs.
2. Frequent flyer program in an airline is an example for segmentation of customers
based on Net Present Value of the Customer (NPVC) ----- True / False.
3. NPVC measures the profit potential ------- True / False
3.6 Understanding the customer needs:

Kano Model:
Japanese professor, Noriki Kano has suggested 3 classes of customer
requirements.
a) Dissatisfiers:
The absence of requirements that are expected in a product or service
causes dissatisfaction among the customers. These requirements are
generally not stated by the customers but assumed to be included in the
product / service. Example: Safety features in an automobile.
b) Satisfiers:
The presence of the requirements stated by the customers as their wants
ensures satisfaction among the customers. Although these requirements are
generally expected with additional costs, fulfilling them creates satisfaction.
Example: Power windows, antilock brakes in an automobile.
c) Exciters / Delighters:
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The presence of requirements that are new or innovative features that
customers do not normally expect results in delighted customers. The
presence of such unexpected features leads to higher perceptions of quality.
Example: Separate audio controls in the rear seats in an automobile.
The companies must strive to meet customer expectations (providing satisfiers) as a

minimum to stay in business. The companies must surprise and delight customers by
going beyond the expected in order to be truly competitive. Successful companies
continually innovate and study customer perceptions to ensure that needs are being
met.
Example: Airbags and antilock brakes were exciters when they were first introduced.
Now, most customers expect them in a premium car.
GPS / Satellite navigation system for automobiles are recent examples of exciters /
delighters, but are becoming more common place and may soon be viewed as satisfiers.
As technology evolves, customer expectations also continuously increase.

1. Absence of safety features in an automobile can be an example of Dissatisfies ---
True / False.
2. Requirements stated by the customers are incorporated in the product. These
requirements are classified as ____________.
3. Innovative features in a product can be classified as ______________.
4. As technology evolves, the customer expectations continue to _____________.
3.7 Gathering and analyzing customer information:

Customer requirements, as expressed in the customers own terms are called the “Voice
of Customer”. However, the customer’s meaning is the critical part of the message.
The customer voices are usually gathered through:
 Customer cards or formal surveys.
 Focus groups
 Direct customer contacts
 Field intelligence
 Complaint analysis
 Internet monitoring.
Some companies use unconventional and innovative approaches to understand

customers. Some of them are:
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 Rapid innovation and release the products for field trail to gather the customer
feedbacks;
 Close tracking of technological, competitive, societal, environmental, economic
and demographic factors that may affect customer requirements and
expectations
 Interviewing lost customers to understand the factors that influence their
purchase decisions.
Voice of the customer data typically consist of large number of verbal comments or other
textual information. Such information needs to be sorted and consolidated in to logical
groups so that managers can understand the key issues. “Affinity Diagram” is one of the
useful tools used for organizing large volumes of information efficiently and identifying
natural pattern or grouping in the information.
Affinity diagrams can be used for many other applications like: organizing any large
group of complex ideas of issues like potential reasons for quality problems, or actions to
be initiated for successful launch of a product in the market.

1. Customer requirements expressed in their words / terms are called
___________.
2. ____________ tool is used for organizing large volumes of information efficiently
and identifying natural patterns or grouping in the information.
3.8 Customer relationship Management:

Any organization can build customer loyalty by developing trust, communication with
customers, and effectively managing the interactions and relationships with customers
through different approaches and its people. Formal, structured customer relationship
management will go a long way in fostering customer loyalty. Friendly service that
includes honest opinion, advice without emphasis on sales also helps in building up
customer loyalty. The behavior and professionalism of direct customer contacts like
sales and service personnel; the communication sent to the customers such as news
letters, invoices, reminders or any other correspondence with customers play a very big
role in determining the customer satisfaction and loyalty. However, the factors like
unkept promises, failure to provide full service, failure to provide service when it was
needed, providing incorrect or in complete service, failure to provide full and correct
information contribute greatly to customer dissatisfaction.
Excellent customer relationships management depends on five aspects.

 Accessibility and commitments
 Selecting and developing customer contact employees
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 Relevant customer contact requirements
 Effective complaints management
 Strategic partnerships and alliances.
A) Accessibility and Commitments:

Customer focused organizations provide customers easy access to their employees /
customer service personnel. Establishing toll –free numbers was the first attempt to
provide easy accessibility. Today, e-mail and web site access are becoming medium of
choice for many customers to access the company.
Strong commitment by the company and keeping the same go a long way in fostering
customer loyalty. Effective commitments address the principal concerns of customers
and are free from conditions that might weaken customer’s trust and confidence. The
commitments are to be expressed clearly and in simple terms and be communicated to
the customers. This commitment can be as simple as to respond to every query within
48 hours. Many commitments take the form of guarantees and warrantees. FedEx is
highly recognized for its guarantee, which refunds full charges if the shipment is delayed
beyond predefined period.
The company L.L. Bean has communicated its guarantee to replace or refund any
product that is not satisfactory to the customer without any questions / conditions.
Companies can improve their customer satisfaction by providing extraordinary
guarantees that promise exceptional, uncompromising quality and back the promise with
full payments.
Such guarantees when executed quickly alert the company to problems at the first
instance and sensitize the employees about the importance of quality, which can result
in increased sales and higher profit.
B) Selecting and developing customer – contact employees:

Customer contact employees are very important in terms of achieving customer
satisfaction. They are the people whose main responsibility is to be in touch with
customers – in person, by telephone or other means. To day many companies rely on
call centers as their primary means of customer contact. Call centers can prove to be
competitive advantage by serving customers more efficiently and personalizing
transactions to build relationships. However, they must be supported with appropriate
technology. Their processes must be designed very carefully and the personnel to be
recruited after thorough scrutiny of their competence. Inefficient processes an only result
in frustrated customers.
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The customer contact personnel are required to exhibit excellent inter personal and
communication skills. They also should possess problem solving and analytical skills.
Assertiveness, stress tolerance, patience, empathy, attention to the details, computer
literacy are the essential attributes of a good customer contact personnel. Their
recruitment should involve rigorous screening processes like aptitude testing, role-
playing exercise, back ground checks and medical evaluations.
Companies with good customer relationship management shall ensure that customer
contact personnel understand the products and services well enough to answer any
question, develop good listening and problem solving skills, and feel confident enough to
handle problems. Employee training has a very big role in this respect. Effective training
not only increases employee’s knowledge, but improves their self esteem and loyalty to
the organization. Many organizations, impart the training on customer relationship to all
the employees who come in to contact with customers, including receptionists.
It is important to consider the point that customers’ issues are solved at minimum
number of contacts, without resorting to transferring the issues to different contacts. No
customer would like to be moved / transferred to number of contacts / employees, as it
would be a very frustrating experience for them. This requires very carefully designed
processes where in the contacts are adequately empowered to take decisions, and have
consistent understanding and knowledge of what actions that may or should be taken.
Customer contact employees also need access to right technology and company
information to do their jobs. Information technology improves productivity, increases
communication and allows customer contact employees to handle almost any customer
issue.
C) Customer contact requirements:

Customer contact requirements are the expectations that define the quality of service
provided by the customer contact personnel. These requirements are measurable
performance levels. These requirements may include technical requirements like
response time (example: answering a telephone within 2 rings) , or behavioral
requirements ( using a customer name whenever possible). Some companies like Walt
Disney have clearly defined requirements to the minutest details possible. Some of them
relate to : Making eye contact and smiling, greeting and welcoming, seeking out guest
who need assistance, appropriate body language and others.
Companies should communicate these requirements to all customer contact employees.

These standards / requirements must be continuously reinforced in order to consistently
maintain effectiveness. However, it should be noted that it is also important to have
satisfied internal customers. Internal customers have a big role in realizing overall
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customer satisfaction. Use of the customer –supplier model described earlier effectively
communicates the importance of these relations.
Finally, the company should implement a process for tracking adherence to the
requirements and providing feedback to the employees to improve their performance.
Deployment of IT ensures effective tracking conformance to customer contact
requirements.

1. A formal, structured customer relationship management will go a long way in
fostering customer loyalty. --------------- True / False.
2. Providing toll – free numbers to the customers is to provide easy____________ .
3. The customer contact personnel should be selected through rigorous screening
process. ------ True / False.
4. Customer contact personnel should be adequately empowered in addition to
appropriate process design to limit the number of contacts the customer should
make during the customer service ---------- True / False.
5. Internal customer satisfaction does not necessarily play a role in determining the
external customer satisfaction --------- True / False.
D) Effective customer complaints management:

Every company experiences unhappy customers despite best of their efforts to satisfy all
the customers. The customer complaints can affect the business severely if not
addressed / handled properly. Studies have shown that:
 Only 4 percent of the unhappy customers take the trouble to make
complaints and the rest 96% do not bother to complaint , but simply
switch over to the competitors where possible
 Nearly half of the customers who have complained, will do repeat
business with the company if only their complaints are addressed
properly. If the complaints are resolved quickly, 95% of the complainants
will do repeat business.
 The average customers who have had a problem will tell nine or ten
others about it. If the complaints are resolved quickly, the customers will
tell only about 5 others of the problem resolution.
Many progressive companies treat complaints as opportunities for improvements. They

encourage the customers to complain and making it easy for them to do so (not by
providing those shoddy products or services, but providing means of communication).
The companies have established processes fro effective resolution of those complaints
there by increasing customer loyalty and retention.
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Companies with effective customer relationship management train their customer

contact personnel to deal with angry customers. The customer contact personnel need
to listen carefully to determine customer feelings and then respond sympathetically,
ensuring that complaint is understood. They should make every effort to resolve the
complaints quickly. Many companies have defined well defined processes (like senior
level employee deal the issues) to handle the angry customers. International
organization for standardization (ISO) has published guidance standards (ISO 10002) on
handling customer complaints.
Complaints provide a source of product and process improvement ideas. Costs

associated with complaints can be significant, and include lost business, complaints
handling costs, claims and compensation. Typically, cross functional teams study the
information related to complaints and make recommendations. Technology is often used
to capture, analyze and report complaints data. The complaints analysis process should
not stop at identifying who has caused the problems, but the root causes that may
include systems, procedures, and infrastructure related aspects. The corrective actions
should be initiated to eliminate the root causes so that complaints do not recur.
Finally, the complaints handling process it self needs to be monitored, evaluated and
improved. Typically, the companies track the percentage of customers who are satisfied
with the complaints resolution, the cost of resolving complaints and the time required to
resolve them.
E) Strategic partnerships and alliances:

The companies are focusing more and more on their core competencies (the things they
do best) and are looking outside their companies for assistance with non-critical support
processes. The suppliers are being encouraged to take on greater responsibilities to
help their customers. Customer –supplier partnerships – long term relationships
characterized by team work and mutual confidence- represent an important strategic
alliance in achieving excellence and business success. Benefits of such partnership
include:
 Access to technology or distribution channels not available internally.

 Shared risks in new investments and product development
 Improved products through early design recommendations based on
supplier capabilities.
 Reduced operations costs through better communications.
Many companies work closely with suppliers that share common values. This close
relationship improves supplier capabilities by teaching them quality related tools and
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approaches. Most of the companies have schemes to rate their suppliers, but some
progressive companies like Motorola have established processes to get feedback from
suppliers on some points like: expected technical assistance; expected benefits from the
partnerships; accuracy of production schedules and others. Improved two-way
communication improves both products and relationships.

1. Complaints provide a source for product and process ___________ .
2. The complaints analysis process should not stop at identifying who has caused the
problem, but at the ___________ for the problems.
3.9 Customer Relationship Management (CRM) Technology:

Customer Relationship Management (CRM) software is designed to help companies
increase customer loyalty, target their most profitable customers, and streamline
customer communication processes. A typical CRM system includes market
segmentation and analysis, customer service and relationship building, effective
complaint resolution, cross selling goods and services, order processing and field
service.
CRM helps firms gain and maintain competitive advantage by:

 Segmenting markets based on demographic and behavioral characteristics.
 Tracking sales trends and advertising effectiveness by customer and market
segment.
 Identifying which customer should be the focus targeted marketing initiatives with
predicted high customer response rates.
 Forecasting customer retention (and defection) rates and providing feed back as
to why customers leave a company.
 Studying which goods and services are purchased together, leading to good
ways to bundle them.
 Studying and predicting which web characteristics are most attractive to
customers and how the website might be improved.
CRM systems provide a variety of useful operational data to managers, including the
average time spent to responding to customers questions, comments, and concerns,
average order flow time, total revenue generated by each customer from goods and
services bought by the customer, cost per marketing campaign and price discrepancies.
Many companies like Amazon have deployed CRM technology.
1. A typical CRM systems includes market segmentation and analysis in addition to
effective complaint resolution. ---------- True / False.
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3.10 Measuring Customer Satisfaction:

Customer feedback is vital to a business. Feedbacks enable the company to learn how
satisfied their customers are with its products and services. Measure of customer
satisfaction benefits the business through:
 Discover customer perceptions of how well the business is doing in meeting the
customer needs and identify causes of dissatisfaction and failed expectations as
well as drivers of delight.
 Compare the company’s performance relative to competitors to support planning
and better strategic initiatives.
 Discover areas for improvement in the design and delivery of products and
services, as well as for training and coaching of employees.
 Track trends to determine whether changes actually result in improvements.
An effective customer satisfaction measurement system results in reliable information

about customer ratings of specific product and service features and about the
relationship between their ratings and the customer’s likely future market behavior.
It is important to keep in mind that customer satisfaction is a psychological attitude. It is

not easy to measure and it is influenced by customer expectations and their perceptions
on quality and value. Thus it is difficult to reduce these complex relationships in to a
single measure.
Customer satisfaction measures may include product attributes such as product quality,
product performance, usability, maintainability and service attributes such as attitude,
service time, on-time delivery, exception handling, accountability, technical support and
image attributes like reliability and price; and overall satisfaction measures.
The most important customer data includes comparisons with key competitors.
Companies commission third parties to conduct blind surveys to determine who key
competitors are and how their products and services compare. Competitive
comparisons often clarify how improvements in quality characteristics are being
overlooked.
Survey Design:
The purpose of the survey needs to be identified as a first step in designing surveys.
Surveys should be designed in such a way that survey results provide appropriate
information to the managers for decision making. Customer satisfaction should not be
limited to externals customers only. Information from internal customers and supporters
also constitute to the assessment of the organization’s strengths and weaknesses.
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The next point that needs to be decided while designing surveys is who should conduct
surveys. Independent third party organizations often have mare credibility to respondent
and can ensure objectivity in the results. Next a sample audience is identified from the
target group. Depending upon the purpose of survey, it might be the entire customer
base or a specific segment is chosen.
Thereafter, the survey instrument/means are to be selected. Formal written surveys are
the most common means of measuring customer satisfaction, although techniques like
face-to-face interviews, telephone interviews and focus groups are used. Written
surveys have the advantage of low data collection costs and easy analysis. However
they should be kept short and simple. However they have the disadvantage – requiring
large sample size. Face-to-face interviews and focus groups on the other hand, require
much smaller sample sizes and participant time commitments.
The type of questions to ask in a survey must be properly worded to achieve actionable
results. That means the responses can be tied directly to key business processes. This
identifies clearly the processes/process elements that need to be improved.
Normally, the customers are asked to rate each of the aspect on a scale of 1 to 5, ( 5
being excellent and 1 very poor). Responses for the rating “5” indicate that the
customers are fully satisfied and the company can infer that they are doing very well in
this particular area. The rating “4” suggests that customer requirements are met but
there are still areas of improvement that needs to be considered by the company. The
rating “3” indicates that the company has barely met the customer requirements and lot
of actions needs to be initiated to effect improvements in all earnest otherwise, the
company may be in the danger of loosing many customers. Responses with the rating
“1” and “2” indicate serious problems requiring immediate corrective actions.
Many surveys measure service characteristics. Developing measurable service quality

characteristics can be difficult. For example: The quality characteristic “availability” is
ambiguous and not easy to measure the characteristic like- accuracy of order filling.
Such quality characteristics are to be translated in to specific statements that clearly
describe the concept. Example: The characteristic “availability” can be measured making
use of the following statement: “I could get the delivery any time of the day after an hour
of telephone”.
It should be noted that, surveys should always be pretested to determine whether the
survey questions are clear; are easy to understand; can be completed within reasonable
time and evoke customer interest.
Analyzing and using customer feedback:

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It is important to use customer feedbacks to improve a company’s products and
processes. By examining the trends in customer satisfaction measures and linking
satisfaction data to its internal processes, a company can determine the status and
areas for improvement. The company may assign the task of developing and
implementing improvements identified through customer satisfaction surveys.
Determining and using customer satisfaction information should be viewed as a key

business process. There are number of reasons why customer satisfaction efforts fail to
produce useful results. Some of the reasons are:
a) Poor measurement schemes

b) Failure to identify appropriate quality dimensions.
c) Failure to measure potential and former customers
d) Lack of comparison with leading competitors.

1. Customer satisfaction is a _______________attitude.
2. Customer satisfaction measures may include ____________attributes in addition
to service attributes.
3. One of the benefits of the customer satisfaction is that it enables the company to
compare the company’s performance relative to competitors --------- True /
False.
4. Only third party independent agencies should conduct customer satisfaction
surveys --------------- True / False.
5. Ratings “1” & “2” requires immediate ___________ actions (if “1” & “2” denotes
unsatisfactory)
3.11 Summary:
The customer focus is the central theme of Total Quality Management. Determination of
the customer requirements, meeting the same during product design, manufacturing and
delivery is the primary objective of the TQM organizations. The Company needs to
monitor customer satisfaction to know the extent to which it has been able to meet the
customer requirements. The determination of the customer satisfaction is a structured
process which can involve different methods such as surveys. The data received from
the customer satisfaction survey provide a snap shot of the customer perceptions on the
organization’s performance with respect to the aspects surveyed. The analysis of the
data provides information on the aspects that the company has done well, and those
aspects where urgent corrective actions are to be initiated.
The relationship developed by the companies with the customers does not end with the
product or service delivery. In fact most of the customer dissatisfaction occurs if the
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company fails to provide effective after sales service or do not handle their complaints in
an effective manner. The structured Customer relationship Management ensures
continued effective communication with the customer and redresses all the customer
concerns / complaints.

1. Describe the factors determining the customer satisfaction.
2. Define – Expected Quality, Design Quality and Actual Quality and how they
influence the customer satisfaction.
3. Define Internal and External customers and identify the internal customers along
with the process in your organization
4. What is NPVC?
5. Indicate any 5 methods for gathering customer information
6. Write short notes on one of the aspects of Customer Relationship Management :
“ Selection and development of customer contact employees”
7. Write short notes on complaints handling and how it influences customer
satisfaction
8. Describe the advantages to the company for measuring the customer satisfaction
9. Describe the important aspects / points that needs to be considered in the design
of customer satisfaction survey
3.13 Answers to SAQs & TQs

SAQs
I 1 Service
2 Loyalty
II 1 Expected
2 Actual
3 Actual, Expected
4 Time
III 1 True
2 Internal
3 False
IV 1 Natural groups
2 True
3 True
V 1 True
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2 Satisfiers
3 Exciters / Delighters
4 Increase
VI 1 Voice of Customer
2 Affinity Diagram
VII 1 True
2 Accessibility
3 True
4 True
5 False
VIII 1 Improvement ideas

2 Root causes
IX 1 True
X 1 Psychological
2 Product
3 True
4 False
5 Corrective
Answers to TQ
1. Refer 1.2
2. Refer 1.3
3. Refer 1.4
4. Refer 1.5
5. Refer 1.7
6. Refer 1.8 (B)
7. Refer 1.8 (D)
8. Refer 1.10
9. Refer 1.10.1
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Unit 4 Quality as problem Solving Concept
Structure
4.1 Introduction:
Objectives:
4.2 Solving a Problem that’s Already Solved
Self Assessment Questions I
4.3 Critical Success Factors
Self Assessment Questions II
4.4 Quality Management for Managers and Workers
Self Assessment Questions III
4.5 Seven Transition Products
Self Assessment Questions IV
4.6 Fast and Intense: Kaizen Approach to Problem Solving
Self Assessment Questions V
4.7 Summary
4.9 Answers to Self Assessment Questions
4.1 Introduction:
In spite of the facts that the essential principles of quality were developed in 1911 and
rounded out by 1924, and that we’ve had solid quality theory available since the 1980s,
truly high quality is more the exception than the rule in most of business. Why is it so
hard for business and society—to put these ideas into practice? We talk about barriers in
corporate culture, but what does that mean? How come just a few businesses achieve
quality in all aspects and maintain it? If we understand these questions and start to
answer them, we can lead the way to improved quality management in our own
businesses and organizations. We often come across problems related to production,
quality etc which are required to be analyzed and solved immediately. Basic Quality
control tools and techniques are used for these solving problems and for continuous
improvements, which are required in productivity and quality
Objectives:
 Identify the barriers and challenges to success in quality management,
 Identify critical success factors,
 Outline a plan for a quality improvement program that will stick,
 Discuss key factors for quality at the management and worker levels.
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 Problems that may arise in manufacturing processes or in the quality of the product
or with the input materials etc are attacked at source itself rather than allowing it
percolate to other areas.
4.2 Solving a Problem that’s Already Solved

Many people will tell you that a solution to the challenge of quality management already
exists. Dr. Imai, the founder of the Kaizen Institute, spoke of Gemba Kaizen for JIT as a
solution. Others say that Six Sigma is a solution. Possibilities are agreeing and disagree.
Certainly, in some companies at some times, error has come consistently under
management, quality has been a key focus of business leaders, and the drive towards
quality has succeeded in delighting customers, delivering value, reducing costs, and
increasing profits. And all of that is good. At the same time, the challenge of achieving
sustained comprehensive quality management is still with us and the problem is never
fully solved. There are executives, and whole companies who don’t care much about
quality, or who give it lip service, or who think that they are managing and delivering
quality when they are not. In fact, some of the companies that have the most trouble with
quality management are those that have a system such as TQM or Six Sigma but have
lost the crucial leadership and employee focus on excellence essential to maintaining a
corporate culture that supports and sustains continuous quality improvements. The fact
is, in terms of ideas, the solution to quality management exists in many places. One can
get there with TQM, with Six Sigma, with Gemba Kaizen for JIT, or by pursuing a
standard or prize such as ISO 9000, CMMI, or the Baldrige Award. In a smaller
company, we can achieve quality through caring about excellence and good team
leadership, and then studying best practices and applying common sense, without too
much worry about standards at all. But ideas alone don’t grow corn. To grow corn, we
have to plant corn kernels, and then pull up weeds. And weeds like to grow back. It’s the
same in business: A steady focus on quality will yield a rich harvest, but seeds of other
things such as pressure to increase profit, impress stockholders, cut costs, or keep
things simple will sprout and get in the way.
Barriers and Challenges

We often talk about resistance and corporate culture, but if we want to bring these
issues under management, we need to define them more clearly. In Kaizen, Dr. Masaaki
Imai defines corporate culture as ―factors of industrial structure and psychology that
determine the company’s overall strength, productivity, and competitiveness in the long
term; such factors including organizational effectiveness, industrial relations, and the
capacity to produce quality products economically.‖ If we say organizational instead of
industrial, and realize that industrial relations include relationships with unions, but also
professional associations, standard organizations, and the marketplace for workers, for
inputs, and to our customers, then we have a good working definition. In psychological
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and social factors, we need to keep in mind the issue of cultural assumptions. People
may be unable to comprehend the approach we want to take. For example, when we
hear about TQM using suggestions, certainly did not envision the scale of the Japanese
corporate suggestion management systems. One still have a hard time imagining an
American company working effectively with suggestions on that scale. We can then say
that an organization is a system relating to other systems, contained within the larger
systems of its industry, society, and the ecosphere, and meanwhile containing its own
subsystems. From a systems perspective, we can define resistance as composed of
from one to five elements.
 Unhealthy resistance. This results from poor communication and lack of willingness
to create good communication and eliminate misunderstanding. This is covered by
the word ―politics‖ in the negative sense of the term, and includes the effects of all
forms of dishonesty and avoidance.
 Other priorities. Any new initiative when it is proposed, planned, or encountered by

a new stakeholder can appear to be in conflict with their priorities. We have to allow
the stakeholder person or representative of a subsystem to identify their priorities,
and then demonstrate that the quality program is either beneficial or at least not
harmful to their goals, or is a worthwhile trade.
 Constraints. Any new initiative may exceed the limits of some part of the
organization, or threaten to do so. We are also constrained by agreements such as
union contracts, vendor contracts, and commitment to existing policies.
 Inherent conservatism. All lasting systems have a tendency towards homeostasis a

tendency to forcefully move towards their own pre-defined point of balance. If we are
changing processes and results, we will be changing these set points. Some
disruption is inevitable, so caution is appropriate. Sometimes that caution comes out
as resistance; an effort to block or slow down what appears to be a dangerous
process.
 Inherent momentum. Systems, like physical objects, tend to keep moving in the
same direction that they already are moving. In a system, a successful change of
direction requires not force, but encouragement for habit change.
Note that four out of five of the forms of resistance express completely legitimate
perspectives, raising issues that we can and should take into account. The fifth
unhealthy resistance is a natural part of being human. If we wish to work with those who
resist our proposals, we must listen well, and then help them educate themselves on the
safety and value of our ideas.
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Here are some common examples of types and sources of resistance:

 The need to prove quarterly revenue. In public companies, executives face serious
consequences when quarterly financials are not good or not in line with expectations.
This can block focus on long-term objectives, impose constraints, and make other
 Faster, punchier options. Other alternatives, such as mergers and acquisitions, may
seem like an easier way to go than looking at and dealing with internal quality
problems.
 Quick fixes that sounds credible. If you know how difficult the problem is to solve,
you know how expensive it will be. What do you do when someone claims they have
a cheaper solution?
 Vested interests. Unions, managers, executive committees, and others will have a
variety of interests legitimate or otherwise and we will need to address them
proactively.
 A belief that the solution is impossible.
 A lack of willingness to look at the problem.
 Resistance to personal change. When we change processes, we not only change
the organization, we call on individuals to change as well. The self-image, as a self-
sustaining system, naturally resists this. If we truly want to transform processes, we
must support people in truly transforming as well. This can be looked at from various
perspectives, such as emotional intelligence for business or the difficulty of changing
habits and character.
How to define the cultural issues and resistance that you are likely to face in your own
company? In addition to addressing cultural limitations and resistance, you will also need
to deal with two other issues. One is quite simple: You will have to show how your
program and new processes are affordable at present, acceptable over the short- and
medium-term, and beneficial to the company’s long-term bottom line. The other is that
you will need to define quality and especially what you include in a quality management
program and what you leave out clearly enough so that everyone understands it. That is,
you’ll have to succeed at a job Plato thought was impossible.

1. Dr. Imai, the founder of the _____________spoke of Gemba Kaizen for JIT as a
solution for Quality Management
2. From a systems perspective, we can define____________ as composed of from one
to five elements.
3. In a system, a successful change of direction requires not force, but ___________ or
habit change
4. When we change processes, we not only change the organization, we call on
_____________to change as well
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5. If you know how difficult the problem is to solve, you know how _________________
4.3 Critical Success Factors

If we want to succeed where many companies have failed in the last hundred years, it
would be good to know the critical factors for success. The most honest answer would
keep this section very short: Deming already defined them for us. In Total Quality
Management and read his 14 points.. Update them. See how they apply to your
organization, to every stakeholder and subsystem in and around your organization.
Supplement the 14 points with other material from Deming, Crosby, and others. Deming
worked to make quality management work. Surely he would have had a shorter list if all
14 points weren’t essential. Deming’s14 points show, effectiveness of its application to
one subsystem of a company. Leadership is often best done by example. Encouraging
others to follow; to the first corporate subsystem. Rigorous self-assessment is what
clears fear. How do they affect routine in general? How do they limit ones’ ability to
understand and implement this program? if you did. That was interpretation of what it
means to drive out fear. Feel free to throw all of it away. As Six Sigma teaches,
challenge every question and every answer. But don’t throw away Deming without a
close look. Seriously consider what he and other leaders in quality management have
been trying to tell all of us for over 100 years. It will work if we listen, understand, make it
our own, and then follow through on own convictions. If one want to overcome the
challenges, should be ready to lead a quality management initiative, then make it truly
your own, believe in it, and follow your convictions.
A Quality Improvement Program

In defining and presenting a quality improvement program, let us begin with these points:
 Improved process for a better bottom line. Improving the quality of processes
improves product quality, reduces costs, and cuts cycle time.
 Continuous improvement. Our program will include a change of attitude and focus for
everyone in the company, starting from the top down. Everyone will be supported in
seeing how to make things better in their own work, for the customer, and for the
company. This will lead to many low-cost initiatives— small changes with small
benefits that add up to big results in cost performance, reduced cycle time, customer
delight, and flexibility.
 Executives set the big goals. As an executive team, we will set big, hairy, audacious
goals (BHAGs) for the company. These are achievable, but they demand innovation
and thinking outside the box. They lead to highly profitable breakthroughs in process,
products, and customer growth.
Here are the steps a senior executive will follow in any organization to implement a
program for the improvement of quality management.
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1. Float the idea and brainstorm it with the executive team. If you’re wrong, and a quality
improvement program is not best for the company right now, you’ll want someone to
tell you right off. If you’re right, you’ll want the executive team to be able to say, ―We
came up with this great idea.‖
2. Brainstorm even more. If the basic idea is a go, then brainstorm the best name,
sources of resistance and support, how to investigate standards and best practices,
and how to deploy it internally.
3. Develop the brainstorm results into a feasible—if audacious—strategic plan, then
beat up on it. Have the executive team create a plan that looks workable, and then
run it through program analysis, portfolio analysis, SWOT (strengths, weaknesses,
opportunities, threats) evaluation, and anything else you can do to test the idea.
4. Make a marketing plan and sell the idea. Figure out how the program is likely to
benefit each stakeholder group, and give them a straw man to shoot down. Then
involve other leaders and stakeholder representatives the same way you brought in
your own management team. Listen to them, and let them be convinced, and then
sell you on your own idea.
5. Create a team to lead the way, and give it full support. Have a team build a plan that
includes training, deployment, management, and feedback. Review it thoroughly,
and show up for kickoff day.
6. Stay on top of the program. Make sure it is working well, and promote it. Assign
resources to problem areas, and publicly reward successes.
7. Listen and respond. Each worker in the company will make this his or her own if you
lead the way in appreciating every idea good or bad and in making decisions based
on understandable, empirical, and fair evaluation.
8. Keep it simple. Some parts of this will be inherently complex, so it pays to keep
everything as simple as it can be.
9. Have the company makes it their own, and keeps truing the wheel. The program
must become an ongoing process of managed quality improvement.
Here are some other key points in establishing a quality management improvement
program.
 Quality Management always means bringing quality something as large as life itself
under management, again and again. We have to realize that we are taking on a
huge job, and we need to always be willing to start over.
 Quality always has two sides: an immeasurable side that we can sense related to
aesthetics, art, and design; and an engineering side that is definable, quantifiable,
and measurable. We must always address both.
 Key step in quality management is to understand the principles of the cost of quality
and, as a result, focus on preventing error from entering the system and eliminating it
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as soon as possible, instead of allowing errors to enter and struggling to eliminate

them at the end.
 Effective quality management must also always have two sides: a human side, and a
technical side.
 The human side of quality management must be both an individual and a team effort.
 The technical side of quality management quality engineering demands precise
application of scientific methods of investigation.
 Both the human side and the engineering side can strive toward continuous
improvement.
 We can improve quality through both innovations and incremental continuous
improvement, but we always need continuous improvement to maintain quality and
prevent backsliding.
 Continuous improvement will always run into roadblocks and distractions. The
roadblocks will be cultural issues, where our growth takes us beyond where we are
willing to go as individuals or as a team, and the distractions are the perpetual quick
fixes of our society, such as short-term profit and dishonest representation of the
situation.
Quality Management Self-Evaluation

Perhaps a manager doesn’t need a completely new quality management program, or a
full overhaul. Perhaps he just wants to evaluate and improve what you already have. So,
whether you are a senior executive or a manager with responsibility for quality, you’ll
want to know what you’re doing well and what you could do better. Here are some
questions to ask yourself and your team:
 How do we rate to Deming’s 14 points? Identify any discrepancies, and decide if

they have significant consequences.
 Does our program have full executive support? Or is it too low down in the
company to make process changes, or sidelined outside work processes?
 Is our program visible to every employee, stakeholder, and customer?
 What is the history of our program? Does that history imply any biases or
limitations?
 What are the strengths and weaknesses of our program and our team?
 Are we tracking our program? Do we have metrics for the process and results of
our quality management and quality improvement work?
 Are we benchmarking? Are we using those metrics to establish a baseline, and
then using PDCA to improve.
 Are we using best practices and standards well? So much is available for free or
at low cost, we should be using it. Assign someone to research what is out there
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for general fit, and make a practice of looking for solutions in existing methods
when a problem is defined.
 Does everyone have an eye on quality? Maybe this should be first on the list.
 Are people learning about quality and quality management? People mean
everybody.
 Are we recognizing and rewarding quality work and quality improvement?
Studies in business psychology affirm that the Japanese approach to rewards
prompt, small, and frequent works best for everyone.
Self Assessment Questions II

State whether following statement True or False
1. If we want to succeed where many companies have failed in the last hundred years, it
would be good to know the financial factors for success
2. If one wants to overcome the challenges, should be ready to lead a quality
management initiative
3. The human side of quality management must be individual effort
4. Key step in quality management is to understand the principles of the cost of quality
5. A manager doesn’t need a completely new quality management program, or a full
overhaul to evaluate performance
4.4 Quality Management for Managers and Workers

This section is for managers, supervisors, and workers. If an organization which, cares
about quality, but has dropped the ball on quality, may be able to pick up the Q-Ball for
team. Most managers have enough autonomy to at least support, encourage, and
reward attention to quality problems. Managers may have to work very quietly, but can
work with team also encourage attention and good quality work, and praise good work
and suggestions for making the workplace better. If manager want to do this, try to fit
into the language and program that company uses. Keep it small and personal. And,
above all, be consistent. This approach will also work if you are a manager or
department head with accountability for results and a reasonable degree of autonomy.
As a worker, especially a worker in a quality-related job, one can make many of the
ideas as your own. Perhaps one can even start own Quality Circle for study and
learning.
Conclusion: Quality A Complete and Lasting Solution

We’ve seen many partial solutions to the quality management problem. What would a
complete and lasting solution look like? Certainly, some companies in Japan and
elsewhere have one. And sometimes it is called TQM, sometimes ISO 9000, sometimes
CMMI, sometimes and Six Sigma. These companies have moved beyond standards and
methodologies to lasting solutions. What makes the difference? It would be better that
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the bottom line when it comes to quality versus culture is that lasting quality, continuous
improvement, and innovation in quality require a commitment to truthfulness honesty
and integrity. Quality is achieved by the definition and elimination of defect and errors.
Let’s call them mistakes and booboos. Why because, in most cultures, for most people,
it is embarrassing to look at and talk about our mistakes. And, to do quality
management, we have to see errors, be honest about what we see, and follow through
with a solution. That’s honesty and integrity truthfulness. In the fields of quality
management and project management, confronting issues while working with people is a
skill we learn and a character trait we develop. Most people are not willing to take that
step because most business environments do not support it. For many people, it is
easier to smooth things over or to walk away than it is to look in a mirror and see what
improvements we need to make. But for anyone willing to consider change, the option of
quality in process, in product, in profit, and in personal performance is there. And, as
both Deming and Imai affirm the satisfaction or even joy of doing good work and solving
problems together is worth the challenge of learning to be true.

1. Most managers have enough autonomy to at least support, encourage, and reward
attention to_______________
2. If manager want to encourage team, try to fit into the ___________________that
company uses
3. Quality is achieved by the definition and elimination of _____________
4. As a Manager of quality management, ____________be honest about what we see,
and follow through with a solution
4.5 Seven Transition Products

A number of transitions to QUALITY products are mentioned above, but there are
others. The seven most common ones are listed below as an aid in both understanding
and in helping you determine whether or not a transition to QUALITY might be of interest
to your organization.
Product #1: Strategic Problem Solving Goals/Objectives

Strategic problem solving goals describe expectations in terms of the nature and extent
of customer problems at a point in the future. Strategic objectives describe the
approaches that will be used to address customer problems.
Product #2: Transition to QUALITY Blueprint

A Transition to QUALITY Blueprint is a brief "why to", "what-to", and when-to" guide. It
describes why change is necessary, indicates how a QUALITY transition will be of
benefit, commits an organization to the transition, describes transition roles and
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responsibilities, lists and describes key events and products, and includes a timetable for
events.
Product #3: Present State Analysis

A Present State Analysis explores customer perceptions regarding an organization's
vision and values, accomplishments, and strengths/weaknesses. It should be simple to
carry out. It should yield results in days or a few weeks. It should provide for confidential
responses. It should involve solicitation of input from internal and external customers.
And, it should involve sharing results with interested persons.
Product #4: Vision/Values Statement

The vision elements of vision/values statements should identify and describe customers,
customer problems that will be addressed, and problem solving approaches that will be
used.
Values elements should identify and describe how well an organization will function,
assumptions about customers, assumptions about employees, interaction with persons
outside the organization, and continuous improvement commitments.
Product #5: Capacity Building Objectives/Timetable

This brief statement should describe what will be done, when, and by whom to help
persons acquire knowledge, skills, and attitudes relating to QUALITY awareness,
leadership, problem analysis and problem solving, teams, and measuring success.
Product #6: Improvement Target(s)/Timetable

This work sheet lists an improvement target or targets, identifies the person or persons
responsible for designing and testing improvements, and establishes a timetable for
these efforts.
Product #7: Quality Transition Status Assessment

This product uses comparative measures to assess the extent to which an organization
is making use of QUALITY management as opposed to traditional management
principles.

State whether following statements True or False
1. Strategic objectives describe the approaches that will be used to address customer
problems
2 A Transition to QUALITY Blueprint is a brief ―Where-to‖, "what-to", and when-to"
guide.
3 A Present State Analysis explores customer perceptions regarding an organization's
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vision and values, accomplishments, and strengths/weaknesses

4 Values elements should identify and describe how well an organization will function
5 QUALITY Transition Status Assessment ensures TRADITIONAL management as
opposed to quality management principles
4.6 Fast and Intense: Kaizen Approach to Problem Solving

Often it was an awareness of how hard it is for people to concentrate on improvement
when they keep thinking about getting their work done. To some extent it was a matter of
their innate respect for the people who do the work. For all these reasons, years ago the
Japanese inventors of the Lean improvement systems came up with a different
improvement model they called Kaizen.
Kaizens (or blitzes, as they are sometimes called) are improvement events where
people work only on improvement for a few days, up to a full week. In a traditional
Kaizen project, the people from a particular work area come together with a few experts
for four or five days straight and complete most or all of a DMAIC cycle on a narrowly
targeted high-priority issue. ("We need to process loan applications faster.") The model
has been so successful that this basic approach has been adapted to other uses such
as service design sessions.
Example of a Bank's Use of Kaizen

A major national bank started using the five-day Kaizen approach whenever it wanted to
attack process speed and efficiency problems. The bank's Kaizen events all share four
characteristics:
 The purpose is to take a cross-functional view of the process or work area.

 Participants are people who are directly involved in, and usually responsible for,
various parts of the process. The team is cross-functional.
 Participants are pulled off their jobs for several days at a time.
 The project is well-defined going in because there is not time to redefine the
purpose or scope.
A Typical Kaizen Schedule

Here is a sample agenda which the bank uses for the five days:
Day 1 is an afternoon spent training participants on topics that cover basic concepts
related to the goals of the project. This could include teaching relevant Lean or Six
Sigma concepts and reviewing relevant data.
Day 2 is spent looking at the process with new eyes. Participants do a "unit walk," a tour
of operations affected by the problem or situation being studied where they simulate
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being a work item flowing through the process. The group visits each portion of the
process, where, because there is cross-functional representation, they have the
opportunity to hear insights from someone who works in that area. The group creates a
value stream map (a picture of the "as-is" situation) that captures the basic process
steps, such as cycle times, number of steps, rework loops, queuing delays, work in
progress (WIP) and transportation time.
Day 3 is designed around clarifying problems and brainstorming solutions. The team re-
organizes the value stream (on paper) or creates a "should" map that depicts how the
process would need to function to solve the identified problems. The outcome includes
developing action plans for implementing solutions or trial simulations for the next day.
Day 4 is used to test the solutions, conducting a simulation within the operations if
possible. The group quantifies the improvement if the proposed changes are
implemented, using estimates of reductions in travel time, queuing time, work in process,
number of steps, number of forms, and so on.
Day 5 is when participants prepare and present their findings to the sponsor in a formal
report-out session.
Making It Work and the Results

The bank makes this model work by having its internal consultants (equivalent to Master
Black Belts) partner with the manager/sponsor to pick problems that are extremely high
priority, not only for that work area but also for the business as whole. This makes it
much easier to justify taking people off their regular jobs. Also, the goal of the event is a
little more modest than a traditional Kaizen. Instead of having solutions up and running
full-bore after five days, teams are expected only to get through the simulation and
piloting of solution ideas. The internal consultant will then assist the team with full-scale
implementation.
In the many Kaizens this bank has run, it has achieved results such as:
Cycle-time improvements have ranged from 30 percent faster to nearly 95 percent
faster, measured sometimes in minutes and other times in days. One administrative
process went from 20 minutes to 12 minutes, and a complaint resolution process
dropped from 30 days to 8 days.
Fiscal indicators have all been positive. One high-level project has allowed the bank to
start charging for a service that previously was offered free to customers. New revenues
are expected to total between $6 million to $9 million per year. Other projects have led to
cost reductions or loss avoidance in the hundreds of thousands of dollars.
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An Alternative Kaizen Format

While consecutive days of intense work is the ideal, some companies have found it
impossible to pull an entire work group, or even a subset of a work group, off the job for
the better part of a week.
One company worked around this issue by using the following structure:
 The team was brought together for a brief meeting where the problem was
explained and people brainstormed what they would need to know and
understand in order to find solutions.
 The team leader, a Black Belt, and one team member then worked offline during
a period of several weeks to gather data and refine the problem definition.
 The team was brought together for a day to rapidly analyze the problem and
come up with complete action plans – not just ideas – for improvement.
 Since the changes likely would affect the everyday work of the team members,
they and others were involved in making the changes real-time on the job, and
establishing a control plan.
This alternative Kaizen structure works well in this company because:

 The company is still relying on the knowledge of the people who actually do the
work.
 It is data-based decision making.
 The company starts with a narrowly defined problem or opportunity statement –
often the participants may be examining how they can implement a Lean
principle to their process, such as "How can we make information flow better?"
 The company takes steps to verify that the target is likely to bring important,
measurable results. Random or "drive by" Kaizens, chosen with little forethought,
may, at best, lead to local improvements, but will not contribute to significant
value stream gains.
Conclusion: Concentrating on Creativity

Kaizen events are a powerful improvement tool because people are isolated from their
day-to-day responsibilities and allowed to concentrate all their creativity and time on
problem-solving and improvement. Companies which use Kaizens have found they
generate energy among those who work in the area being improved, and produce
immediate gains in productivity and quality.
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Self Assessment Questions V

1. A Typical Kaizen Schedule bank uses is designed around clarifying problems and
____________________
2. The bank makes this model work by having its ______________ (equivalent to
Master Black Belts)
3. An Alternative Kaizen Format works well, because it is data-based ______________
4. Random or "drive by" Kaizens, chosen with little forethought, may, at best, lead to
local improvements, but will not contribute to significant ___________________
5. Companies which use Kaizens have found they generate energy among those who
work gains in __________________
4.7 Summary
QUALITY ideas and systems are not for every organization. You may be accomplishing
the same results or achieving the same benefits from a different management
philosophy or system. However, management systems wear out. People get tired of
them. Problems that cannot be dealt with or that are created as a function of the
inherent limits in the existing system begin to accumulate, and the irritation level with the
system begins to increase.
It is no accident that there are a dozen major management systems or that some of
those that were popular in the past have waned. Remember the Planning Programming
Budgeting System (PPBS) from the early 1970s? Remember zero-based budgeting?
Remember management-by-objectives? All are tool kits designed to help us to manage
the relationships between our purposes, our resources and the people with whom we
interact -- to achieve as large an impact as we can on the world around us. Many
human service organizations are designed to help individuals and communities to
change themselves. QUALITY concepts offer another way that CAAs can also change
themselves.
However, QUALITY does hold the promise of significant and sustained improvement for
your organization in terms of the changes you bring about in the lives of the people you
serve IF (1) you can find people capable of playing the roles sketched out above, and (2)
if you can effectively use the approaches described.
QUALITY is a journey, not a destination, but it is a journey customers would be delighted

to see your organization take.

1. Discuss Barriers and Challenges in Quality Management with examples
2. How do you assess critical factors in an organization?
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3. What do you mean by Quality Management Self-Evaluation?

4. Discuss number of transitions to QUALITY products
5. What are the features of Kaizen Schedule?
6. Briefly discuss Alternative Kaizen Format
4.9 Answers to Self Assessment Questions
SAQ I
1. Kaizen Institute
2. Resistance
3. Encouragement
4. Individuals
5. Expensive
SAQ II
1. False
2. True
3. False
4. True
5. True
SAQ III
1. Quality Problems
2. Language & Program
3. Defects & Errors
4. Check Errors
SAQ IV
1. True
2. False
3. True
4. True
5. False
SAQ V
1. Brain storming sessions
2. Internal Consultants
3. Decision making
4. Value stream gains
5. Productivity and Quality
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Answers to Terminal Questions

1. Refer Part No. 4.2.1
2. Refer Part No. 4.3
4. Refer Part No. 4.5
6. Refer Part No. 4.6.S
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Unit 5 Quality as a Cost Concept
Structure
5.1 Introduction:
Objectives:
5.2 Cost of Quality:
5.3 Cost of Quality – Quality in the Language of Money:
5.4 Benefits of Cost of Quality Information:
5.5 Components of Cost of Quality:
5.6 External Failure costs:
5.7 Comments on the Cost of Quality:
5.8 Optimum total cost of Quality:
5.9 Allocation of Overheads to Cost of Quality:
5.10 Reporting Quality costs:
5.11 Quality Costs in Service organizations:
5.12 Implementation strategy:
5.13 Summary
5.1 Introduction:
General impression among many is that higher quality means higher costs and
expensive. Many Quality gurus particularly Phil Crosby has pointed out that it is the
other way round. In fact, in efficient processes consume more resources and produce
more wastes there by increasing the costs. In his famous book “Quality is Free” Crosby
give umpteen examples that out come of well run processes result in optimum costs and
the inefficient processes result in higher costs. Systematic Quality improvements ensure
efficient processes which in turn consume optimum resources, reduce wastes to
minimum or nil. It is also generally known that if the results of inefficient processes are
converted in to monetary terms and reported to top management; it will attract
immediate attention and convey the gravity of the situations. Similarly, the benefits of
the improved processes through Quality Improvement programs can also be converted
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in to monetary benefits and highlight the benefits of such improvement initiatives. The
results of processes converted in to monetary terms are referred as “Cost of Quality”.
The cost of Quality can be systematically analyzed to identify the priority areas of
actions. The analysis also points out the areas where more investments are required to
be carried out in order to reduce the overall costs.
Objectives:
a) Concept of Cost of Quality and the Cost of Poor Quality
b) Segregation of the Cost of Quality in to various elements
c) Analysis of the cost of quality and their reporting.
d) Cost of Quality in a service organization.
e) Strategy for implementing Cost of Quality Program.
5.2 Cost of Quality:

Cost accounting is a most important function in many companies. All organizations
measure and report costs as a basis for control and improvement. This is true for both
types of organizations – For profit and Not for profit.
The concept of cost of Quality (COQ) has emerged in 1950s. The concept of Quality
Costs is a means to quantify the total cost of Quality related efforts and deficiencies.
This was first described by Armand V. Feigenbaum.
Generally, the people have the perception that higher quality involves higher costs,
either for buying better raw materials or machines or by hiring expensive skills. Further
more, while cost accounting had evolved to categorize the financial transactions in to
revenues, expenses, overheads, it had not attempted to categorize the costs related to
quality. Management is well served if the Quality related costs are segregated and
reported so that the data can be evaluated to understand the impact of investments on
quality related activities and focus better on the quality improvement activities to reduce
the overall costs and enhance the profitability.
5.4 Cost of Quality – Quality in the Language of Money:

The Quality Guru, Juran has propounded that it is easier to sensitize the top
management about the magnitude of the Quality problems if they are translated in
monetary terms and link with financial performance as they are more familiar and
concerned with.
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Middle managers who deal with top management and with Supervisors, operators must
be familiar with this language – language of money.
Cost of Quality is the amount of money a business loss because of its product or service
was not done right in the first place. It can include the costs of repairing a defective
component in an assembly to those associated with warranty costs of malfunctioning
machines, badly performed service or business loss.
Some practitioners refer to these costs associated with the failures are also called as
“Cost of Poor Quality “(COPQ) to distinguish them from the costs associated with other
Quality activities.
Juran has defined the Cost or Poor Quality (COPQ) as follows:

“COPQ is the annual monetary loss of products and processes that are not achieving
their quality objectives. The COPQ is not limited to quality but is essentially the cost of
waste associated with poor performance of processes.
Cost of Poor Quality (COPQ)
Cost of Non conformities. Cost of Inefficient Processes. Cost of lost opportunities for
sales income.
Main components of the Cost of Poor Quality

The above frame work reflects not only the cost of non-conformities but also process
inefficiencies and the impact of quality on sales revenue. Each organization must decide
which cost elements to be included in its cost of poor quality.
Some observations:
A) It has been observed that these costs may be in the range of 20 to 40 % of sales in a
typical company which does not have formal Quality improvement programs.
B) The Quality related costs are not just attributable to manufacturing but also to other
associated activities like – purchase, customer service and others.
C) Most of these costs are avoidable.
D) In order to reduce these costs, one needs to adopt a structured approach to identify,
segregate, prioritize and initiate systematic actions.
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5.4 Benefits of Cost of Quality Information:
Quality Cost information serves a variety of purposes. It helps management to evaluate
relative importance of quality problems and thus identify opportunities for cost / waste
reduction.
The Quality cost information can aid in budgeting and cost control activities. It can also
serve as a benchmark for evaluating organization’s performance in achieving quality
objectives.

1. Cost of quality is the amount of money business loses because of
_______________.
2. _______________ annual monetary loss of products and processes that are not
achieving their quality objectives.
3. In a typical company which does not have formal Quality improvement program,
the cost of quality may be in the range of _________________
4. Quality cost information helps management to evaluate ___________________
importance of quality problems.
5. Quality cost information can also serve as ___________________ for evaluating
organization’s performance in achieving Quality objectives.
5.5 Components of Cost of Quality:

Crosby has defined that the cost of quality has two main components.
a) Cost of conformance
b) Cost of Non –conformance.
a) Cost of Conformance (COC): It is the total cost to ensure that a product conforms to
the requirements – which it is of “Good Quality”. It includes the costs of Quality
Assurance and Quality control activities. It represents an organization’s investment in
ensuring the quality of its products and services. The cost of conformance is further
classified in to: Prevention costs and Appraisal costs.
b) Cost of Non – Conformance (CNOC): It represents the total costs to the

organization of failure to ensure conformance to the requirements – which is “Bad
Quality “. It includes in –process failure costs generated by process failures and the
post –delivery failure costs such as warranty. Cost of Non-conformance is nothing but
the Cost of Poor Quality (COPQ). The cost of Non- conformance is further classified in
to: External failure costs and internal failure costs.
However, the classification - : Prevention costs, Appraisal costs, External failure costs
and internal failure costs are the most popular form of classification.
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1. Cost of Conformance is the total cost to ensure that a product ___________
2. Cost of Conformance is further classified as _______________and
________________
3. Cost of Non conformance represents the total costs to the organization’s
___________ to ensure conformance to the requirements.
4. Cost of Non conformance is also referred as ______________________
5. External failure cost is one of the classifications of cost of
_____________________
5.6 External Failure costs :

External failure costs are associated with deficiencies that are found after the customer
receives the product. This also includes the lost opportunities for sales revenue. This
cost will automatically disappear in the absence of the deficiencies.
Examples of this category:

 Warranty charges - Costs involved in repairs or making repairs to products
that are still within the warranty period.
 Complaints - The cost of investigation and price adjustments that needs to
be made in case the complaints are attributed to defective products or
installation.
 Field returns – The costs associated with receipt and replacement of
defective products received from the field.
 Penalties for poor quality : Damages to be paid to the customer
 Re-grading / down grading of the product: The cost of concessions made to
the customer due to products supplied which are not fully compliant to the
requirements, but accepted by the customer as re-grade / down grade.
Lost opportunities for sales revenue:

Customer lost: profits from the potential customers who have shifted to competitors.
Loss of new customers due to inefficient processes: profits lost from the potential
customers because of in adequate processes to meet customer needs.
Internal Failure costs:

These are the costs of deficiencies discovered before delivery. These are associated
with the failures to meet the requirements of customers (both explicit and implicit). These
costs include avoidable process losses and process inefficiencies. Internal failure costs
are broadly classified as
a) Costs of failures to meet customer requirements

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b) Costs of Inefficient processes.
Examples of costs of failures to meet customer requirements:

 Rework – correcting defects in physical products or errors in services.
 Increased inspection – Finding defective units in a production lots that
contain unacceptably high level of defectives.
 Re-inspection / re-test – Re inspection and re-test of products that has
been reworked or modified.
 Scrap – The defective product that can not be repaired.
 Failure analysis – cost of analysis of defective products or services to
determine causes.
 Down grading – Reduction in price because of poor quality
 Change in processes – cost of modifying manufacturing or service
delivery process as part of corrective actions.
 Redesign in hard ware and soft ware – cost of changes in designs of
hard ware and software to correct deficiencies.

Examples of Costs of Inefficient processes:
 Cost of unplanned down time of machines and equipments.
 Variation in the product characteristics from the specifications ( variation
within specification )
 Variations in process characteristics from the “ best practices”
 Non –value added activities – like redundant operations, sorting operations.
Appraisal Costs
These are the costs incurred to determine the degree of conformance to the quality
requirements.
Examples of Appraisal costs:

 Incoming inspection and test of raw materials and other inputs.
 In process inspection and tests
 Final inspection and tests
 Product Quality Audits.
 Maintaining the accuracy of test equipments – maintenance, calibration
 Consumables used in Inspection and testing
 Evaluation of stocks available to check any degradation.
The word “appraisal” is referred in different words in different industries. Some of these
words are: Review, check, reconciliation, inspection and others.
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Prevention costs:
These costs are incurred to keep failure and appraisal costs to a minimum. Prevention
costs are costs of special planning, review and analysis activities for quality. Prevention
costs do not include basic activities such as product design, process design, process
maintenance and customer service.
Examples of prevention costs:

 Process planning – Process capability studies, inspection planning and
other activities associated with manufacturing and service processes.
 Process control - In process inspection & tests to determine the status of
process ( not for product acceptance)
 Supplier quality evaluation – Prior to selection and on-going for suppliers.
 Training – of personnel in quality related training programs
 New product review / design review
 Quality audits – System / process audits ; different from product audits
 Quality planning.
The compilation / computation of prevention costs in the initial stage are important
because it highlights the investment currently made in prevention activities. It may pin
point the need to increase prevention costs to reduce failure costs.

1. External failure costs are associated with deficiencies found after
________________
2. Field returns are an example for _____________________
3. Costs associated with deficiencies found before delivery of the product are called
________________________.
4. Costs incurred to determine the level of conformance to the requirements are
called ______________________
5. Calibration of measuring instruments is an example for __________ cost.
6. Two examples for internal failure costs are: ______________ and
__________________
7. Prevention costs highlights the costs currently made for ______________
activities.
8. Two examples for prevention costs are _______________ and
____________________
5.7 Comments on the Cost of Quality:

It is estimated that 60 to 70% of the total quality costs are the result of Internal and
external failures. These are controllable with concerted efforts by the management.
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When these figures are thrown up, the initial reaction of most of the managements are to
increase inspection activities. This will in turn increase the appraisal costs. This situation
may not result in substantial changes either in improved quality or improved profitability.
The following scenario has been observed in most of the companies before they had
embarked on formal Quality cost control program.
The external failure costs found to be the highest followed by internal failure costs. The
appraisal costs occupy the third position and the prevention costs are at the fourth
position.
It has been observed that an increase in prevention costs will result in generating larger
reductions in the other cost categories. Studies have shown that cost incurred in
changing the design to prevent a problem from occurring (prevention cost) is 1% of the
cost of replacement of a poor quality (faulty) component in the field (external failure
costs). Better prevention clearly reduces the internal failure costs as fewer defectives are
produced. The external failures costs also decrease. As the prevention measures are
directed at creating an environment where the products are produced correctly first time,
even the appraisal costs also decrease.
The companies should first concentrate on reducing the external failure costs to
minimum or zero by investigating the appraisal activities to find the causes of failure and
initiate corrective actions. This will result in the increase in the appraisal costs as the
failure costs are reduced. Thereafter the companies should shift focus on prevention
costs to reduce the appraisal costs.
It should be noted that, Quality costs can never be zero. The ideal situation would be to
have prevention costs at the highest, followed by appraisal costs. This will automatically
reduce the failure costs to a minimum or nil.
5.8 Optimum total cost of Quality:
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Studies have shown that minimum total cost can be achieved typically at 98% perfection.
This percentage is also known as best practice. Beyond this, the cost of achieving an
improvement outweighs the benefits of that Improvement.
5.9 Allocation of Overheads to Cost of Quality:

Allocation of overheads is one of the issues that often come up while calculating the cost
of quality. Any of the following 3 approaches may be followed. However, it is particularly
important to strictly adhere to the approach selected for over a period of time.
a) Include total overheads using direct labour or some other base.

b) Include the variable overhead only.
c) Do not include any overhead.
The allocation of overhead has an impact on the total costs of quality and on distribution
over various departments.
Activity Based Costing (ABC) can help to provide realistic allocation of overhead costs.
(ABC is an accounting method that allocates overheads based on the activities that
cause overhead cost elements to be incurred.)
5.10 Reporting Quality costs:

Typical way of reporting Quality costs is through a break down by organization function
as shown in the figure below.
Quality Cost Matrix

Type of Departments >> Design Purchase Manufacturing …………
costs
Prevention Training
Quality planning
…………………..
Appraisal Test and
Inspection
Instrument
maintenance
…………………..
Internal Scrap
failure Rework
………………….
External Returns
failure Replacement
………………….
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The advantage of this matrix is that it allows all the departments to recognize their
contribution to the cost of quality and participate in initiatives to optimize the costs.
Secondly, it pinpoints areas of high quality costs and helps in channelizing the
improvement efforts towards it. Such reports can be easily prepared with regular spread
sheets.
Normally the quality costs are reported as indexes – ratio of current value to a base
period.

1. Increase in Inspection activities increases ____________________costs.
2. Increase in ______________ costs result in large reductions in other cost
categories.
3. The companies need to concentrate on reducing ___________ costs initially.
4. Quality costs can never reduce to ___________.
5. ________________ Costing method helps in providing realistic allocation of
overheads.
5.11 Quality Costs in Service organizations:

In manufacturing, Quality costs are primarily product – oriented, where as in service
industry it is personnel (labour) oriented. Personnel costs account for up to 60 to 75% of
the total costs.
The nature of Quality costs differs from services and manufacturing organizations. In
services, the external failure costs like warranty and field support are less relevant
compared to manufacturing. Process related costs like customer service and complaints
handling are critical in addition to lost customers.
Internal failure costs might not be as evident in services as in manufacturing. Since there
is a high level of customer contact during service delivery, there may not be any
opportunity to correct the errors before delivery. By the time error has been detected,
the costs related to that had already become external failure costs. Hence, the internal
failure costs in service organizations tend to be much lower for service organizations
compared to manufacturing organizations. The same is the case with the appraisal
costs.
The service organizations must spend a lot of money in prevention activities (prevention
costs) such as employee training, quality planning, work flow planning and work
automation in order to be successful in reducing the external failure costs and also to
achieve customer satisfaction and retention. This is because of high level of personal
interactions with the customers.
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Work measurement and sampling techniques are extensively used to gather quality cost
information in service organizations. Work measurement indicates how much of time an
employee spends on various quality related activities. The quality cost for a particular
activity can be calculated by multiplying the employee costs with the proportion of the
time spent for that activity. In some cases, the cost of quality (poor service) can be
calculated based on customer satisfaction data and customer retention / loyalty data. In
this case, the cost of poor quality is the cost of lost opportunities for sales revenue.
In some cases, cost of poor quality is defined with a focus on the cost of key activities or
processes. In this case the cost of poor quality is computed as the difference between
the actual cost and the standard cost. The standard cost is the cost incurred in an ideal
situation or by following the best practice. The best practice can be either from within
the organization or from an out side organization. This approach addresses the cost of
inefficient processes.
In general, the accounting of quality costs for services difficult because of the intangible
nature of the output.
5.12 Implementation strategy:

 It is not proper to apply the quality cost system to every project until it is applied
successfully on a pilot project. Initially it may not be possible to measure all the
costs. Hence, consider only the costs that are obvious initially.
 It is most important to have consensus in the organization among the costs and
their classification.
 Avoid the pit fall – inclusion of all types of costs to show up dramatic results. But
at the same time, underplaying the costs also does not help as it may hide the
customer dissatisfaction.

1. Quality Costs in Manufacturing is product oriented where as in service industry it is
__________________.
2. Opportunities for correcting the service deficiency are less in service industry because
of high level of __________________during service delivery.
3. _______________ costs are much lower in service industry compared to
manufacturing industries.
5.13 Summary
There is always to cost to errors and mistakes, especially in the business and industry.
The quality costs require a practical understanding as they impact both the financial
performance as well as customer satisfaction. As explained in this unit, there are several
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types of costs associated with quality such as external failure costs, internal failure
costs, appraisal costs, prevention costs etc. Further, we also understood how quality
costs could be treated in financial accounting and their mode of reporting to the
management and other authorities.

(1) Explain the concept of Cost of Quality briefly
(2) What are the components of Cost of Quality?
(3) Give a few examples of External and Internal Failure costs
(4) What do we mean by Appraisal and Prevention Costs?
(5) How will you apportion and account for cost of quality?

SAQ I
(1) Waste due to poor performance of processes
(2) COPQ
(3) 20 to 40%
(4) Relative importance of Quality problems
(5) Benchmark
SAQ II
(1) Conforms.
(2) Prevention costs and Appraisal Costs
(3) Failure
(4) Cost of Poor Quality (COPQ)
(5) Non-conformance
SAQ III
(1) Customer receives the Product
(2) External Failure costs
(3) Internal Failure Costs
(4) Appraisal costs
(5) Appraisal costs
(6) Rework and scrap
(7) Review and Analysis
(8) New Product review and Quality Audits
SAQ IV
(1)Appraisal costs
(2) Prevention costs
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(3) External failure costs
(4) Zero
(5) Activity Based Costing
SAQ V
(1) Personnel oriented
(2) Customer contact
(3) External failure costs
Answers to Terminal Questions:

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Unit 6 Quality in Product design
Structure
6.1 Introduction:
Objectives:
6.2 Product development:
Self Assessment Questions: I-III
6.3 Tools for product development:
Self Assessment Questions: IV - VIII
6.4 Tools for Design development:
6.5 Tools for Design Optimization:
6.6 Tools for Design verification:
Self Assessment Questions: XI
6.7 Special Considerations for Service design:
Self Assessment Questions: XII
6.8 Designing processes:
Self Assessment Questions: XIII
6.9 Summary:
6.11 Answers to SAQ & TQ
6.1 Introduction:
As seen in the evolution of Quality movement through the last 100 years, the focus has
shifted from the inspection of the end product to ensure quality to build the quality in the
manufacturing processes. There after it has been observed and proven that the product
design contributes immensely for the quality of the products and services facilitating in
achievement of Customer satisfaction. If the product or service is badly conceived and
does not address all the customer requirements, desires and likings, the product is
doomed to fail in the market place in spite of best of processes of marketing, production
and customer support. The best of marketing, production and customer support
processes can only take the quality that has been built in to the design of the product
further. If the processes of design and development are robust and effective in
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addressing all the customer requirements, the cost and efforts involved in realization of
the design in to product and delivery are not huge and optimum.
There are number of concepts that needs to be taken in to account while designing and
developing products and services. The practitioners have invented number of tool s and
techniques to analyze the voice of the customer and deploying the same in to further
design processes. These techniques have been in use for a long time and have
contributed immensely to reduce the time to market and bringing out innovative
products. These tools and techniques vary in complexity and thereby influence the
deployment.
Objectives:
 The structured process for Product design process.
 The various concepts that need to be kept in focus while designing the product
and services.
 The tools for analyzing the voice of customer and deploying the same in the
subsequent design process.
 Different approaches for design optimization.
 The peculiarities in the services compared to manufacturing and the points that
need to be taken in to account while designing services.
 Design of the processes.
6.2 Product development:

Companies today face incredible pressures to continually improve the quality of their
products while simultaneously reducing costs to meet ever- increasing legal and
environmental requirements and to shorten product lifecycles to meet changing
consumer needs and remain competitive.
The ability to achieve these goals depends on to a large extent on product design. The
complexity of today’s products makes design a difficult activity. Nevertheless, the
improved designs not only reduce costs, but increase quality. Example: In the year
1990, the net work interface card had 40 chips. In 1995, the entire system board had just
19 chips. Fewer components mean fewer points of failure and less chance of assembly
error.
Most companies have some type of structured product development process. Generally,
product development is equated with manufactured products. However, it should be
noted that design processes are applicable to services also. Example: A new procedure
for loan approval in a bank to reduce the lead time.
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Typical Product development process consists of 6 phases.

Idea
Generation
Preliminary
concept
development
Product /
Process
development
Full scale
production
Market
Introductio
n
Market
evaluation
1. Idea Generation:
The new or redesigned product ideas should incorporate customer needs and
expectations. However, innovations in product design should go beyond
customer needs or expresses desires. Innovative products are some times
beyond the comprehension of customers. Example: Touch screen mobile
phones.
2. Preliminary concept development :
In this phase, new ideas are studied for feasibility, addressing such questions
as: will the product meet customer’s requirements? ; can it be manufactured
economically with higher quality?
3. Product / Process Development :
Once the idea is cleared after feasibility, actual design process begins by
evaluating design alternatives and determining engineering specifications for
all materials, components and parts. A prototype is also built and tested for all
specifications and operated under actual operated conditions. Some times,
consumer reactions are also obtained. Design reviews are frequently
conducted to identify and eliminate possible causes for manufacturing and
marketing problems. In addition to product design, companies develop, test
and standardize the process for manufacturing. This includes selection of
appropriate technology, tooling and suppliers, performing pilot runs to verify
results.
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4. Full scale production:

If no serious problems are observed during the verification/ pilot run stage,
the company releases the products for manufacturing or service delivery.
5. Market Introduction:
The product is released to the customer.
6. Market evaluation:
Initiate improvement actions on the product based on market evaluation and
customer feedback.
TQM consider the product development as a continuous process with continual

improvement based in customer feedback. In fact, the customers are considered as
partners in product development, thus integrating the market evaluation throughout the
process.
Design approaches often differ depending on the nature of the product or service. The
approach followed for the development of entirely new product is not made use for
Development of another variety of the existing product by making minor changes or
improvements. The approaches followed for both types of product development are
entirely different.
Design approaches consider factors like: functional performance, cost, manufacturability,

safety and environmental aspects.

1. Name the missing product development phase
2. Idea Generation - Preliminary concept development 
____________________ - Full scale production - Market introduction -
Market evaluation
3. The Question: “Can the product under design be manufactured economically with
higher quality?” is answered in phase ___________________
4. Design ___________ are frequently conducted to identify and eliminate possible
causes for manufacturing and marketing problems.
5. TQM considers product development as ____________ with continual
improvement based on customer feedback.
Cost, Manufacturability and Quality:

The costs related to manufacturing (direct and indirect materials, direct and indirect labor
and overheads), redesign, warranty and field repair are greatly affected by the product
design. The product design also has significant influence on the efficiency of production,
and Quality.
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Studies have found that 75% of manufacturing costs are determined by the design.
Simplifying the design can often improve cost performance as well as quality. Example:
Fewer numbers of parts in a simplified design will result in reduction in material costs,
inventory levels, size of the vendor base, and production time. Many aspects of product
design can adversely affect manufacturability, thereby Quality.
Example:
a) Parts designed with complicated features or with tighter tolerances
It may be difficult to manufacture them on repetitive basis without substantial
investment in upgrading the manufacturing infrastructure
b) The design specifies materials that are not easily available,
Then the costs involved in procuring them will increase.
c) Design has complicated assembly steps or complex joining methods
Require complex machinery and materials for assembly and specially skilled
personnel. Other wise, it may result in incorrect, incomplete, unreliable or other
wise faulty assemblies.
d) Design has too many parts
This will increase the manufacturing control costs to prevent mix ups, loss of
parts in inventory and also faulty assemblies with missed parts.
Similarly, the design has to take in to account the manufacturing environment. The
manufacturing environment may have high temperature, dust, humidity, vibration and
others. If the material specified and / or the assembly methods specified does not take
these in to account, the product / assembly may experience failure during testing or use.
The problems of poor design may show up as errors, poor yields, damage or functional
failure in manufacturing, assembly, test, transport or end use stages.
Design for Manufacturability (DFM):

It is the process of designing a product for efficient production at the highest level of
Quality.
DFM is intended to prevent

 Product designs that simplify assembly operations requiring more complex and
expensive components
 Designs that simplify component manufacturing but complicates the assembly
process
 Designs that is simple and inexpensive to produce but difficult or expensive to
service or support.
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When we analyze the above statement, it becomes apparent that design process should
consider manufacturing aspects at all stages including field service.

1. Simplifying the design can often improve ______________ performance as well
as quality.
2. Design has to take in to account the ____________ environment.
3. Functional failure may be traced to _______________ failure apart from
component failure, assembly failure and others.
4. DFM is the process of designing the product for efficient ___________at the
highest level of Quality.
Stream lining the Product development process:

The organizations shall develop and release new products in order to be successful in
highly competitive market place. Hence the companies are forced to reduce the product
development cycles. Most of the manufacturers are now striving to develop and release
the new models within 24 months, whereas they use to take 4 to 6 years earlier. Toyota
has established a goal of 18 months for the development and release of new model.
The product development process has improved greatly with the advancements in the
technologies like CAD (Computer Aided Design), CAM (Computer Aided Manufacturing),
FMS (Flexible Manufacturing Systems), CIM (Computer Integrated Manufacturing) and
others. These technologies automate and link design and manufacturing processes,
reduce cycle times and at the same time reduce or eliminate the human errors, thus
improving Quality.
Concurrent Engineering / Simultaneous Engineering:

Different functions in an organization have different expectations from a product that is
under development.
The objective of the design function is to design a product that meets the desired
functional requirements. The Manufacturing expects that the product under design can
be manufactured efficiently by making use of the existing infrastructure without
necessitating expensive materials and skills. The sales would like to have the product
with many features and produced at low cost so that it can be positioned competitively in
the market. The sourcing / purchase expect the product requires the components and
raw materials that are not expensive and easy to source with many suppliers.
Clearly, all functions have a stake in the product development and they need to work
together in a coordinated manner.
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Concurrent Engineering / Simultaneous Engineering approach facilitates to achieve the

above objective; i.e. coordinated working by all business functions in product
development.
Concurrent Engineering is a process in which all the major functions with a direct stake
in bringing a product to market are continuously involved with the product development
from conception through sales.
This approach will ensure smooth development / introduction of the products and
services, and result in improved quality, lower costs and shorter product development
cycles.
Studies have shown that Concurrent Engineering results in

 Reduction in development time between 30 to 70%
 Reduction in engineering changes between 65 to 90%
 Improvement in Quality between 200 to 600%.
 Reduced time for market between 20 to 90%.
Concurrent Engineering process:

Concurrent engineering is basically a cross functional team process. Multifunctional
team consisting of about 4 to 20 members representing all the concerned functions is
formed. Where required, external experts and the important vendors who supply /
manufacture critical components / sub systems are also co opted in the team. The team
charter is to determine the characteristics of the product and decide on the appropriate
design methods and production methods and analyze the product functions so that
design decisions made are correctly to ensure meet the / match the customer / market
expectations. Team also carries out the DFM (Design for Manufacturability) studies to
determine whether the design can be improved without affecting the performance;
formulate the production / assembly sequence and design a factory system with the
involvement of production personnel.
Concurrent Engineering approach has been found to be of immensely useful in

drastically reducing the product development cycle. This has been experienced by all
companies’ especially automobile companies. Initially the automobile development was
carried out with sequential process. First, the concept was finalized by the style
engineers. Concept was sent next to design engineers for designing detailed
engineering and designing the subsystems and components. The designs of the sub
systems and components were sent next to manufacturing and suppliers. This process
was found to be inefficient and expensive. Each handover has resulted in time and cost
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overruns. Too much time was being consumed to evolve consensus among functions
and iron out their differences regarding feasibility.
Design Review:
It is the approach that is being used extensively to facilitate effective product
development. The purpose of the design review is to encourage the participants to have
critical view of the product under design, raise questions to help the designers
understand the potential problems that may be encountered in manufacturing, testing,
and in service. The participants are also expected to involve actively in finding out the
solutions and generate ideas for product improvement.
Generally, design reviews are conducted in 3 major stages Preliminary, Intermediate

and Final. The number of design stages is decided based on the size, complexity and
criticality of the product under development.
The preliminary design review establishes early communication between Marketing,

Engineering, manufacturing and purchasing and provide better coordination of their
activities. Preliminary design review evaluates issues such as function of the product Vis
– a Vis customer requirements, completeness of the specifications, manufacturing costs
and controls against any product liability issues as applicable. It usually involves higher
management and concentrates on strategic issues in design that are related to customer
and finally decide on product quality.
Interim / Intermediate design reviews are carried out once the design is finalized. This
review is carried out to study the design in greater detail to identify potential problems
and determine remedial actions. Personnel from the middle management / Operations
are greatly involved at this stage.
Final review is carried out before the design is released for manufacturing. Design
outputs such as Bill of Materials (BOM), Drawings, and Assembly / Manufacturing
methods proposed are studied in order to identify the changes that may be required in
Manufacturing set up.
In summary, a total approach to product development and process design involve the
following activities.
 Focus on continuous improvement not just on Corrective actions.

 Focus on “ Things done right” rather than on “ Things gone wrong”
 Focus on meeting customer expectations and going beyond them not on just
barely meeting them or just matching the competition.
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 Focus on optimizing desirable features such or results not just on incorporating

them.
 Focus on minimizing overall cost without compromising quality of function.

1. Advancement in the technologies like______________ has improved the product
development process.
2. __________________ is a process in which all major functions with a direct
stake in bringing a product to market are continuously involved with the product
development.
3. _________________ is basically a cross functional team process
4. The purpose of _________________ process is to encourage the participants to
have critical view of the product under design.
5. The number of design review stages is decided based on ___________,
_______________ and ______________ of the product under development.
6. ________________ review is carried out before the design is released for
manufacturing.
7. Bill of materials (BOM) is one form of design ____________.
6.3 Tools for product development:

There are number of tools and methodologies made use of for effective product
development process. These tools and methodologies are grouped under 4 principle
activities.
a) Concept development – Product functionality is determined based on customer

requirements, technological capabilities and economic realities.
b) Design development – Focuses on product and process performance issues
necessary to fulfill product and service requirements in manufacturing or delivery.
c) Design Optimization – To minimize the impact of the variations in production
and use , creating a “ Robust Design”
d) Design Verification – To verify the design for compliance to the customer
requirements there by ensuring that the production systems to be used for
manufacturing are capable to produce the product that fulfills the customer
requirements.
Tools for Concept development:

Concept development is the process of applying scientific, engineering and business
knowledge to produce the basic functional design that meets the customer needs and
manufacturing or service delivery requirements. Concept development is a highly
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creative activity which can be carried out in a structured way by using techniques like
“Brain storming “and or “Brain writing”
These techniques are focused first on identifying potential ideas. Once the potential
ideas are generated they are evaluated through techniques like: “Cost / benefit analysis”
and “Risk analysis”. The best concept is selected using tools like “weighted Scores” and
others.
The starting point in the concept development is the “Voice of Customer” (For details –
See unit on Customer). To recall, the voice of customer is the requirements, desires, and
expectations as expressed by customers in their own words.
The success of product development depends on how effectively the voice of customer
is translated in to physical and operational (functional) specifications and production
processes for manufacturing or service delivery.
One of the case studies (available in public domain) illustrates the above point very
clearly. When developing a new camera, Japanese engineers studied pictures
developed at photo labs and talked with customers to understand the major causes of
poor pictures. They had identified 3 major problems as: Underexposure, Out of focus,
and End of the roll. This has led to the development of camera with built in flash (to
prevent under exposure), autofocus lens (to take care of out of focus problem) and
automatic rewind (to address the end of the roll issue) features. To day one will find
these features in most of the cameras. The other design considerations include: the
product’s weight, size, appearance, safety, life, serviceability and maintainability. While
deciding on these factors, customer requirements were given prominence compared to
engineering considerations. This has resulted in a product that was well received in the
market.
Technical requirements also called design characteristics, translate the voice of

customer in to technical language specifically in to measures of product performance. As
an example: the customer voice – Good sound quality is translated in to technical
specifications like – frequency response and others.
Technical requirements are actionable. They lead to design specifications.

Quality function deployment and concept engineering are the two most powerful tools
used in finalizing the technical requirements.

1. During the activity ________________, the focus is on reducing the impact of the
variations in the production and use.
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2. Starting point of the concept development is __________________.

3. _________________ translates the voice of customers in to technical language.
4. __________________ and concept engineering are the two most powerful tools
used for finalizing the technical requirements.
Quality Function Deployment (QFD):

This approach has been developed by Japanese to translate the voice of customer in to
technical requirements (Engineering language).
QFD is a planning process to guide the design, manufacturing and marketing of goods
by integrating the voice of the customer through out the organization. Through QFD,
every design, manufacturing and control decision is made to meet the expressed needs
of customers. It uses a type of matrix diagram to present data and information.
Even though QFD was originated in 1972 at Mitsubishi, Toyota has been the pioneer in
deploying the tool extensively. It is estimated that Toyota has realized 20% reduction in
start up costs on the launch of new van in 1979. Xerox and Ford have started using the
QFD process in 1986. To day, it is being deployed in all most all of the leading
companies in the world.
QFD benefits companies through improved communication and team work between all
functions in the value chain, such as between marketing and design, between design
and manufacturing, and between purchase and suppliers.
Use of QFD:
QFD focuses on drivers of customer satisfaction and dissatisfaction, making it a useful
tool for competitive analysis of product quality by top management.
QFD ensures productivity and quality improvement through comprehensive analysis and
understanding of the customer requirements, product requirements, and process
requirements by all concerned.
QFD facilitates simulation of the effects of the new design ideas and concepts, which in
turn reduces the product development time thereby enabling the companies to introduce
the new products quickly and achieve competitive advantage.

1. QFD is a planning process to guide the design, manufacturing and marketing of
goods by integrating ______________throughout the organization.
2. QFD uses ______________ diagram to present data and information.
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3. QFD focuses on drivers of _______________ and __________________ making

it a useful tool for competitive analysis of product quality by top management.
QFD Process explained:

QFD is basically a set of matrices used to relate the voice of customer to product’s
technical requirements, component requirements, process control plans and
manufacturing operations.
The initial matrix, called, the customer requirements planning matrix is shown in the
figure below. This matrix provides the basis for the QFD concept. The shape of the
matrix is similar to a house. Hence, QFD is also called “House of Quality.”
Interrelation ships
(3)
Technical
requirements
(2)
Relation ships between

Voice of Customer Priorities of Competitive
customer requirements and
(1) technical requirements
Customer Evaluation
requirements (5)
(4)
(5)
Priorities of
Technical
requirements
(6)
Customer requirements planning matrix – House of Quality
Construction of QFD (House of Quality) involves 6 basic steps.

a) Identify customer requirements
b) Identify technical requirements
c) Relate the customer requirements to the technical requirements
d) Conduct an evaluation of competing products or services
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e) Evaluate technical requirements and develop targets

f) Determine which technical requirements to deploy in the subsequent processes.
a) Identify Customer requirements:

The voice of the customer is the primary input to the QFD process. The most
crucial part of the process is to capture the essence of customer’s needs and
expectations and ensure that it does not miss out in the different interpretations by
designers and engineers. This step is also the most difficult one. The voice of the
customer is documented in the part of matrix identified as (1).
b) List the technical requirements that provide the foundation for the product or
service design
Technical requirements are design characteristics that describe the customer
requirements as expressed in the language of designers or engineers.
Essentially, they are “hows” through which the company can respond to the
“whats” – the customer requirements. Technical requirements must be measurable
as the output is controlled and compared with targets. The details are added in the
part of the matrix identified as (2).
It is very well known that many technical requirements are related to each other at
various levels. These relationships provide answers to the questions like: “how a
change in a technical characteristic does affects others?” The degree of
relationship can be identified as: Strong relationship, moderate relationship, weak
relationship or no relationship.
These relationships are identified through appropriate symbols in the matrix at the
portion marked (3). The symbols that are very popularly used are as follows:
X ----- Strong relationship
Δ ---- Moderate relationship
Z --- Weak relationship
O -- No relationship
c) Develop a relationship matrix between the customer requirements and the

technical requirements.
Customer requirements are indicated in the left hand side of the matrix at (1) and
the technical requirements are listed in the top side of the matrix at (2). Now, the
relationships between the two are indicated in the middle portion marked as (4).
The degree of relationship is indicated in the similar manner as we have done for
the relations between the technical requirements at (3). The purpose of this
relationship matrix is to show whether the final technical requirements adequately
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address the customer requirements. The assessment is usually based on expert

opinion / judgment, experience from the previous similar cases/ designs or
controlled experiments.
If the matrix indicates any particular technical requirement does not have any
relation with the customer requirement, then one may come to the conclusion
that either the technical requirements may be redundant or some important
customer requirements are missed.
Similarly, if the matrix indicates the absence of any strong relationship between
customer requirements and any technical requirements, it means that the
customer needs are either not addressed or the final design is inadequate to
meet those requirements.
d) Add competitor evaluation and key selling points:

This step identifies importance ratings for each customer requirements and
evaluates competitor’s existing products or services for each of them. These are
documented in the matrix in the area marked (5). Customer importance ratings
represent the areas of great interest and the expectations expressed by the
customer. Competitor evaluation highlights the absolute strengths and
weaknesses in competing products. This step facilitates identification of
opportunities for improvement. For e.g.: if an important customer requirement
receives low valuation on all competitors’ product, the company can focus on this
particular requirement to gain competitive advantage. Such points will also
become key selling points and the basis for formulating marketing strategies.
e) Evaluate technical requirements of competitive products and services and

develop targets:
This step involves testing and gathering intelligence on competitor products. The
details are translated in to measurable terms. These evaluations are compared
with the competitive evaluation of the customer requirements. Targets for each
technical requirement are set based on the customer importance ratings and
existing product strengths and weaknesses.
f) Select technical requirements to be deployed in the subsequent process:

The technical requirements are selected for deployment in subsequent process
based on the following criteria:
 Requirements with strong relationships to customer needs.

 Requirements where competition is not doing well.
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 Requirements that can be identified with strong selling points
The selected requirements are accorded highest priority as critical characteristics and
needs to be developed and taken in to account in the further design and production
processes. These are identified and documented in the area marked as (6) in the matrix.
The requirements not identified as Critical characteristics need not be further treated so
rigorously.

1. QFD is also called _____________________.
2. ___________________is the primary input to the QFD process.
3. Technical requirements are design characteristics that describe customer
requirements as expressed in the language of ________________.
4. The purpose of relationship matrix is to show whether the final
_______________ adequately address the customer requirements.
Deployment in to production and further processes:

The House of Quality as developed and discussed so far is the first step. The voice of
the customer, represented by the prioritized technical requirements need to be carried
throughout the production / delivery process. The technical requirements from the first
house (QFD) are related to detailed requirements of subsystems and components. At
this stage, target values identifying the best possible values for fit, function and
appearance are determined.
At the next stage, process plan relates the component characteristics to the key process
operations. The key process operations are further analyzed to identify control points
there by develop the Quality control plans. The control plan identifies the critical
characteristics that need to be controlled by means of monitoring, measurement and
evaluation on continuous basis to ensure that process continues to meet the important
customer requirements identified in the first house.
Thus, QFD process provides a link from the voice of the customer through design and
production activities, daily management and control. In a way, it provides the basis for
deploying more advanced methodologies like DOE (Design of Experiments) and other
statistical process controls.
Even though many practitioners have opined that third and fourth houses provide huge
benefits that the first two, since they are actionable on the shop floors, in practice, many
companies have concentrated mostly on the first two houses.
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Technical Component
requirement Characteristics
s
Customer Technical
requirement 1 requirement 2
s s
Process Quality Control

Operations Plans
Process
Component 3 Requirements 4
Requirement
The 4 – Houses of Quality

1. Key process operations are analyzed to identify _____________
2. QFD process provides a link from the _______________ through design and
production activities, daily management and control.
Concept Engineering (CE):

CE is a focused process for discovering customer requirements and using them to select
the superior product or service concepts for meeting those requirements. Although CE is
similar to QFD in basic ideas, it employs number of other techniques to ensure effective
analysis of data which are qualitative in nature.
This process has been developed by a consortium of companies like Polaroid along with
researchers at MIT.
CE process involves 5 major steps:

a) Understanding the customer environment:
It involves in collecting the voice of customer which includes the complete
customer’s environment – physical, psychological, competitive and others. This
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step also involves project planning for the complete process like – team
selection, determining team charter, identifying tools for analysis and others.
b) Converting the understanding in to requirements:
Teams analyze customer voice in to more specific requirements using structured
tools like KJ method. This is similar to the step in QFD: identifying the technical
requirements and prioritizing them.
c) Operationalzing what has been learnt:
In this step, metrics / measurements and method of measurements are
determined for the technical requirements identified in step b). The metrics are
evaluated to ensure that they cover all the key requirements and to remove the
redundant ones. This evaluation usually requires some sort of customer
questionnaire to identify the importance of the requirements and prioritize them.
d) Concept generation:
This step focuses on generating ideas for solutions that have potential to meet
the customer requirements. Usually, brainstorming techniques are used to
generate ideas, classifying them and select the most appropriate ones. Creative
thinking techniques are applied to increase the number and choices of ideas.
e) Concept selection:
Finally, the potential ideas are evaluated with respect to meeting requirements,
and optimal ideas are selected after evaluating the trade offs. The process ends
with final evaluation of the concepts selected to test whether the decision “feels
right” based on all the knowledge acquired.
Like QFD, concept engineering maintains traceability back to the voice of the customer.
This helps in the structured review of the process. The process demands high level of
discipline and patience. The process helps in building consensus and gives the team
confidence in selling the concept to the management.

1. Concept engineering has been developed by a consortium of companies like
______________ with researchers at _________________.
2. In concept engineering, the customer voice is analyzed using structured tools like
___________________.
3. Concept engineering, like QFD, maintains _______________ back to the voice
of customer.
6.4 Tools for Design development:

Detailed design process with the aim to finalize the product specification is initiated after
the concept is selected. While finalizing the specification, the primary goal is to see that
_______________________________________________________________________
_____________________________________________________________________________
the final design can be produced economically, efficiently and with high quality. The
process of development of specifications is carried out even for service design.
One of the important steps in finalizing the specification is deciding the tolerances.
Tolerance is defined as the permissible variation from the ideal value or the target value.
Tolerance is an unavoidable requirement since the manufacturing or service delivery
process has their inherent variation, which causes the actual value to be away from the
ideal / target value.
Tolerance Design:
In order to decide on tolerances, the designers have to understand the limitations of the
manufacturing / service delivery process and the trade –offs required. Narrow tolerances
increases the manufacturing costs and at the same time ensure high quality in terms of
product performance, durability and appearance. Wide tolerances on the other hand,
increase material utilization, machine throughput but may affect the product performance
negatively. The factors relating to: production planning; tool design; machine set up;
process yield; Inspection and gauge control; maintenance and supervision required
affect the tolerance selection.
Traditionally, the tolerances are set based on the previous designs or as a judgment
from the past experience. Setting inappropriate tolerances can be costly for the
manufacturing or service delivery. If tighter tolerances are specified than those actually
required, the cost of production will go up. Similarly, if the tolerances are relaxed than
optimum value, it may result in inconsistent functional performance of the product.
Other tools for the Design and Development:

There are many statistical tools like – regression, design of experiments; statistical
inferences are used for design development. In addition, there are other non-statistical
tools like Failure mode effect analysis (FMEA) and reliability prediction are used for the
effective design and development.
a) Design Failure Mode and Effect Analysis (DFMEA):

This is an exercise carried out by the expert group to identify the ways and
means through which a failure can occur, possible causes for the failure, the
effect of failure, and the possible impact of the failure on the functionality of the
product. The analysis also involves identifying the possible actions to be
initiated to prevent the occurrence of failures.
These are documented in the form of a table and kept updated as and when new
factors are identified or emerged in the field.
_______________________________________________________________________
_____________________________________________________________________________
Deployment of DFMEA improves the product functionality and safety and also
reduces field failures, thereby reducing the external failure costs.
DFMEA is conducted early in the design process to provide inputs that needs to
be considered during the subsequent process steps, there by reducing the cycle
time and saving costs.
b) Reliability Prediction:
Reliability is defined as the ability of the product to perform as expected over
time. Reliability is one of the crucial dimensions of Quality. Mission critical
products and systems like Aircrafts, satellites, medical diagnostic equipments, air
traffic control equipments and others require high level of reliability. High
reliability also provides a competitive advantage for many consumer goods.
Formally, reliability is defined as the probability that a product, piece of

equipment, or system performs its intended function for a stated period of time
under specified operating conditions.
Reliability is indicated in terms of probability with numerical values between 0

and 1. Reliability value of 0.98 indicates that, on average 98 of 100 items will
perform their functions for a given period of time and defined operating
conditions.
Reliability prediction involves complex mathematical calculations. Simulated /

controlled experiments are also conducted to validate the predictions. Field
performance is closely monitored and any failures are analyzed and reliability
values are adjusted. Based on the analysis, actions are initiated to maintain
target values of reliability.

1. ______________ is defined as the permissible variation from the ideal value or
target value.
2. Narrow tolerances increase ___________________and at the same time ensure
high quality in terms of product performance.
3. DFMEA is expanded as Design
________________________________________.
4. DFMEA is an exercise carried out by experts to identify ways and means through
which _____________ can occur.
_______________________________________________________________________
_____________________________________________________________________________
5. Reliability is defined as the ability of the product to perform as expected over

_____________.
6. Reliability has a numerical value between _________ and ___________.
6.5 Tools for Design Optimization:

Every effort shall be made to optimize the designs. Design optimization includes setting
proper tolerances to ensure maximum product performance and making the design
“Robust”.
Robust design means, the variations in manufacturing or user environment do not

influence or have least influence on the performance of the product.
Design of Experiments (DOE) is the most popular tool used for tolerance optimization.
Taguchi’s Loss Function is another concept often made use of for optimizing the
tolerances.
Similarly, techniques such as Standardization and redundancy are used for optimizing
reliability.
a) Standardization:
The design makes use of only the components with proven reliability in the field.
This will ensure products with optimum reliability. Use of standard components with
know reliability ensures not only high reliability but also reduces costs since these
standard components are used in many products and are bought / manufactured in
bulk, there by reducing the costs.
b) Redundancy:
If the failure of any component / subsystem results in the failure of the whole system
or the performance gets deteriorated significantly, it is the common practice to
provide redundancy to that component / subsystem. This will ensure uninterrupted
functioning of the system in the event of the failure of the component / subsystem.
The redundant components / subsystems are designed in a stand by mode or in
parallel configuration. In the stand by mode, the stand by component / subsystem
gets activated when the component / subsystem fails. In the parallel mode, both the
components / subsystems were operating but any one of them is used actively.
Redundancy, however, increases the cost, size and weight of the system. But it is
crucial to provide redundancy in mission critical products like Airplanes, Air traffic
and rail traffic control systems, communication systems and life supporting systems
in a critical care unit in a hospital and others.
_______________________________________________________________________
_____________________________________________________________________________

1. In a design, the variations in manufacturing or user environment do not influence
the performance of a product. Such designs are referred as _____________.
2. The tools used for tolerance optimization are: ___________________and
____________.
3. Tools used for Reliability optimization are: _______________ and ___________.
4. ____________ is provided to ensure uninterrupted functioning of the mission
critical systems.
6.7 Tools for Design verification:

Design verification is necessary to ensure that design will meet the customer
requirements and can be produced to specifications. The verification may also be
required to meet the regulatory requirements. The data gathered during verification may
also be used for design improvements.
Design verification is carried out in many ways. It can be in the form of peer review of
the design outputs such as drawings and specifications. Prototype inspection and
testing may also be carried out as part of design verification. Life testing / accelerated
life testing are carried out to understand the failure rates and modes thereby initiating
actions to improve the design. Environmental testing involves testing the systems under
various environmental conditions (high / low temperatures, high / low humidity, salty or
marine atmosphere, damp conditions) to examine how the system performs. The design
may require to be modified to ensure that the system performs in all conditions.
Self Assessment Questions: XI

1. Life testing / accelerated testing s carried out to understand _________ rates and
modes.
6.7 Special Considerations for Service design:

There are fundamental differences between manufacturing and services in terms of
nature of the outputs, extent of interaction with the customers and others. The support
processes in a manufacturing environment also fit the bill as services.
The outputs of a manufacturing process are well defined while those of services are not
so well defined. While in manufacturing, the quality of the product and the after sales
services are the sole criteria determining the customer satisfaction, in services, it is the
way in which the service (product) is delivered determines the customer satisfaction in
addition to the service (product) quality.
_______________________________________________________________________
_____________________________________________________________________________
The customer interaction during the service delivery is very high compared with the
manufacturing process. It implies that in manufacturing, one has the opportunity to
inspect the product for compliance to the requirements, (and correct it if required),
before delivery. where as such opportunities are very less or nil in a service
environment.
Three components of Services:

a) Physical facilities, procedures and processes
b) Employee behavior
c) Employee professional judgment.
Designing services essentially involves determining an effective balance of these

components. The goal is to provide a service, whose elements are internally consistent
and directed at meeting the needs of customers. Too much or too little emphasis on any
one component leads to problems and affect customer perceptions. For example: Too
much emphasis on procedures may result in timely and effective services, but may be
perceived as insensitivity and apathy towards customers. Similarly, too much of an
emphasis on behavior may provide a friendly environment at the expense of slow,
inconsistent or chaotic service.
Customer contact and interactions in services:

It should be borne in mind that services differ in the degree of customer contact and
interactions, the degree of work intensity and degree of customization. For example:
Railway travel is low in all the three dimensions, where as interior design is high in all
the three dimensions. A fast food restaurant is high in customer interaction and work
intensity, but low in customization.
Services that are low in all the three dimensions are similar to manufacturing. In this
situation, the quality of the physical facilities and procedures occupy predominant
position compared to behavior and professional judgment of the service personnel.
As the customer contact and interactions in the service system increases, the behavior
and the professional judgment of the personnel become more and more intense.
In services with low work intensity, the customer impression of physical facilities and
procedures assume important role in shaping the customer satisfaction. Hence, the
companies must take special care in selection and maintenance of physical facilities.
In services, the quality standards take the place of dimensions and tolerances as
applicable in manufacturing.
_______________________________________________________________________
_____________________________________________________________________________
E.g.: Dispatch of policy document within 5 working days of the approval of the proposal.
Service standards are inherently more difficult to define and measure than
manufacturing specifications.
In designing high – quality service processes, the following factors are considered.
a) Defining service standards
b) Communication of the service standards among the service personnel and the
general public
c) The number of personnel coming in contact with the customers during service
delivery
d) The extent of control needed over service components
Self Assessment Questions: XII

1. Customer interaction during the service delivery is ____________ compared to
manufacturing.
2. As the customer contact and interactions increase, the service personnel
_______ and ___________ become more and more intense.
6.8 Designing processes:

It must be kept in mind that processes through which the products are manufactured or
services are delivered, is extremely important to ensure the desired out come namely,
meeting the customer requirements. These processes have significant impact on cost,
flexibility (ability to produce right types and amounts of products as customer demand)
and quality of the output. Hence, it is very much essential to have processes designed /
defined in a structured manner.
The goal of process design is to develop an efficient procedure / activity flow that
ensures satisfaction of both – internal and external customers.
The design of process begins with the process owner. The process owner can be a
department, team, cross –functional team or even an individual operator. Motorola has
recommended the following approach for designing processes.
a) Identify the product or service

b) Identify the customer
c) Identify the supplier
d) Identify the process steps or sequence of steps
e) Mistake proof the process
f) Develop measurements and controls, and improvement goals.
_______________________________________________________________________
_____________________________________________________________________________
The above points answer the following questions:

a) Identify the product or service - What is the final out put of the process
b) Identify the customer – Who are the customers (internal / external) for these
outputs?
c) Identify the supplier - Who provides the inputs required for this process to
produce the product / service? And what inputs are required?
d) Identify the process steps or sequence of steps – What steps are to be taken in
which sequence so that the output is produced effectively and efficiently?
e) Mistake proof the process - What can make the process go wrong? How this can
be avoided? What measures are to be taken to avoid process going wrong way?
f) Develop measures and controls, and improvement goals:
How the process performance be measured? How the process performance can
be evaluated? How the process can be improved?
The points a) to c) are the preparatory work for the process design. The point d) is the
actual process design by defining the specific tasks performed in transforming the inputs
to outputs. The point e) focus on making the process efficient and capable to produce /
deliver high quality product / service. The point f) requires that the process be
adequately monitored and controlled to ensure required performance.
Process design sequence:

The following sequence is recommended for process design.
a) List in detail all the steps in sequence in the form of the flow chart. The flow chart
provides an excellent communication device for visualizing and understanding
the process.
b) Identify the inputs required for each of these steps.
c) Identify the resources (in terms of tools, techniques, software, hardware) required
to perform the step. Please note that the resources identified here are not to be
confused with the inputs indicated in b). The inputs are those that get converted
in to out puts or facilitate in transformation in to output.
d) Identify the skills required for the personnel performing the step.
e) Determine the performance criteria ( e.g.: time taken, quality levels and others)
f) Determine the monitoring methods and measurements (if possible) for
performance of the step.
Even though every step / activity (where there is an input transformed in to an output)
can be considered as process, the process boundaries should be defined taking in to
account the out put. The output should be substantial and meaningful in the overall
context. The points a) to f) are to be deployed judiciously to obtain meaningful outcomes.
_______________________________________________________________________
_____________________________________________________________________________
Self Assessment Questions: XIII

1. Goal of the process design is to develop _____________ that ensures customer
satisfaction.
2. The following 2 stages are considered as preparatory work for the process
design. The first one is: Identify the product and the other one is
___________________
3. The measures taken to avoid the process going in the wrong way is referred as
____________________
6.9 Summary:
The product design and development is a highly structured process starting with the
analysis of customer requirements gathered through customer voice. All the further
activities are carried out keeping the customer requirements in focus. There are number
of tools with varying complexity are made use of to achieve effective product design.
Quality function deployment (QFD) is one of the tools deployed to translate the customer
requirements in to technical requirements and further deployment to identify the process
controls that need to be instituted to comply with the customer requirements. Services
have some features that are distinct from the manufacturing and they need to be
considered while designing the services. The product design carried out through
structured process by making use of the various tools ensure the products of high quality
that can be manufactured / delivered in most efficient manner in the shortest possible
time.

1. Explain the structured product development process with all their phases
2. Write short notes on DFM
3. Describe concurrent engineering process with the benefits that can be realized.
4. Write short notes on Design review
5. Identify any three tools used for product development
6. Write short notes on QFD process and describe why it is also called “ House of
Quality”
7. Write short notes on Tolerance design
8. Describe how service design process differs from the manufactured product
design.
9. List out the activities followed in sequence for service design.
6.11 Answers to SAQ & TQ
SAQ
I 1 Product / process development
_______________________________________________________________________
_____________________________________________________________________________
2 Preliminary concept development

3 Reviews
4 Continuous process
II 1 Cost
2 Manufacturing
3 Design
4 Production
III 1 CAD, CAM

2 Concurrent engineering
3 Concurrent engineering
4 Design review
5 Size, complexity and criticality
6 Final design
7 Output
IV 1 Design optimization
2 Voice of customer
3 Technical requirements
4 QFD
V 1 Voice of customer
2 Matrix diagram
3 Customer satisfaction and dissatisfaction
VI 1 House of Quality
2 Voice of Customer
3 Engineers and designers
4 Technical requirements
VII 1 Control points

2 Voice of Customer
VIII 1 Polaroid, MIT

2 K.J, Method
3. Traceability
IX 1 Tolerance
_______________________________________________________________________
_____________________________________________________________________________
2 Cost of production
3 Failure Mode Effect Analysis
4 Failures
5 Time
6 0 and 1.
X 1 Robust design
2 Design of Experiments and Taguchi’s
Loss function
3 Standardization and Redundancy
4 Redundancy
XI 1 Failure
XII 1 High
2 Behavior and professional judgment
XIII 1 Efficient procedure / activity flow

2 Identify the customer
3 Mistake proofing
Answers to TQ
1 Refer 1.2 & 1.2.1
2 Refer 1.2.4
3 Refer 1.2.5 & 1.2.5.1
4 Refer 1.2.6
5 Refer 1.3
6 Refer 1.3.2, 1.3.2.1 & 1.3.2.2
7 Refer 1.4.1
8 Refer 1.7, 1.7.1 & 1.7.2
9 Refer 1.8
_______________________________________________________________________
_____________________________________________________________________________
Unit 7 Quality as a Knowledge Management concept
Structure
7.1 Introduction
Objectives
7.2 Knowledge and information
7.3 Knowledge Management-A quality management framework
7.4 Knowledge management
7.5 Tacit and Explicit knowledge in quality
7. 6 Knowledge Repositories
7.7 Approaches to Knowledge Management
7.8 Obstacles in Knowledge Management
7.9 Case study
7.10 Summary
7.1 Introduction
In today‘s competitive environment organization needs to have sound business
knowledge to gain competitive advantage. In uncertain market conditions organization
needs a quality approach that views knowledge as a foundation factor for organization
survival and growth.
Quality management emphasis on optimum utilization of resources and on greater

productivity and the use of intellectual capital and knowledge assets hold the key to
achieve desired result. Organizations need to take various decisions, plan, and
organize, and knowledge is the basis for strategically decision making. They are the
building blocks or raw material for decision making .Sound knowledge leads to effective
decisions and provide overall quality and productivity. Such as, knowledge of customer
need and expectation, knowledge of raw materials and resources to be used, knowledge
of products and services to be delivered these are some of the information that helps to
built strong decisions.
_____________________________________________________________________________
_____________________________________________________________________________
Organizations face various concerns of survival, adaption and competence. By creating,

acquiring, embedding and using knowledge, organizations can address the issues and
gain competitive advantage.
Managing information and knowledge require a significant commitment of resources .It

needs organization to keep the track and update, and look for new sources of
information and new technologies that helps to stand out from others.
The concern for knowledge management is to exploit and develop knowledge assets
that help to attain objectives.
Knowledge assets refer to the accumulated intellectual resources that an organization

possesses, including information, ideas, learning, understanding, memory, insights,
cognitive and technical skills1.
And to achieve objectives, management has to take responsibility for all those processes
associated with identification, share and creation of knowledge that requires a
systematic creation and maintenance of knowledge repositories to cultivate and facilitate
sharing of knowledge and organizational learning. A knowledge conversion process
helps to use, create share and transfer knowledge, it helps to preserve, embed and
enhance knowledge of process, products or services, and it also helps to improve the
knowledge access and develops an environment that is conducive to knowledge
conversion process.
Knowledge to be managed includes both explicit,-documented knowledge, and tacit –

subjective knowledge.
Therefore, Quality management helps to address changes, improve knowledge

management capacities and skills. With Integration of knowledge and quality
management process overall quality and productivity of the organization will enhance
and leads to a holistic development.
Objectives:
After studying this unit, you will be able to understand:
 Importance and application of knowledge management
 Discuss the interrelation of quality and knowledge management
 Explain the storage, application and utilization of knowledge
assets in organizations.
1 th
Evans .R James and Lindsay. M. William ,”The management and control of quality”,6 edn, Thomson –
South Western
_____________________________________________________________________________
_____________________________________________________________________________
7.2 Knowledge and information

Information is an understanding of the relationships between pieces of data, or between
pieces of data and other information.
Information relates to description, definition, or perspective (what, who, when, where).2

Knowledge comprises strategy, practice, method, or approach (how)
•understan •understan
Data ding
information ding knowledge •undersata
relations patterns nding
principles
Figure 7.1
7.3 Knowledge management -A quality management framework:
A manager in Hewlett –Packard noted,‖ The fundamental building material of a modern

corporation is knowledge ―H. James observed, -―All organization have it, but most don‘t
know what they have know, don‘t use what they do know and don‘t reuse the knowledge
they have.‖3.Quality of any product/or service depends significantly on knowledge .To be
considered as reliable ,knowledge concerning the organization processes has to be
identified and formalized as much as possible.
In order to manage a business, organizations need to have strong in and around

information. New century is dominated by knowledge-based enterprises operating within
this forces requires concern for wider issues such as environmental scanning and
,quality management is very focused on knowledge production and integration.
Quality as such is defined as accelerated sustainable innovation in response to

problems and is directed at improving quality of knowledge processes, production and
integration in response to problems.
Quality management focuses on performing knowledge processing to manage the best

business processes and produce quality in products and services .It relies heavily on
production of knowledge and put emphasizes on systematic, statistical, and scientific
3 th
Evans .R James and Lindsay. M. William ,”The management and control of quality”,6 edition, Thomson
–South Western
_____________________________________________________________________________
_____________________________________________________________________________
studies to bring quality to the modern enterprise. Knowledge management is contributing

quality management by continuing contributing evolutionary development of effective
programs, policies, and rules that accelerate innovation in quality management and its
relate knowledge processes to eliminate error.
Quality management decisions and business process actions can be confidently based
on knowledge management.
Deming - quality guru in his quality philosophical framework summarized his philosophy
and called ― A system of profound knowledge‖, which consists of four parts
(1) Appreciation for a system

(2) Understanding process variation
(3) Theory of knowledge
(4) Psychology
In the third part of profound knowledge which is called ―theory of knowledge‖, Deming
stresses the nature and scope of knowledge. Its, presuppositions and bases, and the
general reliability of claims to knowledge4, Clarence Irving Lewis, author of Mind and the
world believes that management decision should be driven by facts, data and justifiable
theories, it should not be based solely on opinions .As such experience can‘t tested and
verified but for prediction, good theories which are supported by data and shows cause
and effect relationship can be used, as these theories explains the reason of why things
happen.
Quality and Knowledge-An interrelation
Knowledge Quality
Figure 7.2
7.3.1.1Role of Quality in Knowledge Management:
Managing Quality in knowledge assets is prerequisite, organization must ensure that

data and information are valid and accurate, systems that process data (hardware and
software) are reliable and information is accessible to all who need it.
4 th
Evans. R. James, “Total Quality ,Management ,Organization and Strategy”,4 edition, Cenage Learning
_____________________________________________________________________________
_____________________________________________________________________________
 Data Validity: Data used for planning and decision making requires being
accurate and valid .Good data yield good results. A sound decision requires
quality data.
To collect reliable data a systematic approach is required, internal cross

functional teams or external auditors can conduct periodic audits of the
process to collect the data.
Standardized forms, clear instructions and adequate training lead to

consistence performance in data collection
For example Data security AT&T Universal Card Services, used standard
data entry and procedures to facilitate the consistency and uniform editing
of manually input data and followed stringent guidelines and standards for
developing ,maintaining ,documenting and managing data system.
The quality principle should be applied in managing and creating
knowledge.
Following are some of the features to manage quality in information:
 Capture data only once and keeping its close to the origin of data
 Eliminating human error by encouraging electronic support
 Using single database
 Ensuring proper training
 Defining targets and measures of data quality
 Error check and backup
 Error checking capability into software system
 Ensuring data availability and validity
 Data Accessibility: Total quality focuses on data availability to everyone

besides top manager‘s .Collected information should be available to right
person whenever needed. Right information, to right person, at right time is
quality approach.
Data accessibility empowers employees and encourages their participation

in quality improvement
 Data security: Data are to be kept secure from the external threat .To
prevent the external threats systems have to be safeguarded with the use of
firewalls and passwords. Sensitive data are to be accessed by only
authorized users to safeguard the data security.
_____________________________________________________________________________
_____________________________________________________________________________
Role of Knowledge in Quality Management: The quality of products and services is

significantly depends on knowledge.
Knowledge management involves the process of identifying, capturing, organizing and

using knowledge assets to create and sustain competitive advantage. Knowledge
management can contribute to quality in terms of providing, conceptual frameworks for
thinking, knowledge processing and improving its character and helps to validate
frameworks that can help individuals and groups.
The contributions of Knowledge Management to Quality Management decisions are

indirect, but they can have a pervasive positive impact on knowledge processing in QM
and through this impact can affect QM decisions, implementation and business
processing.
7.4 Knowledge Management:

Concept:
Knowledge management constitutes, the practices applied in an organization to identify,
create, represent, distribute and enable implementation of perceptiveness and
experiences. The experiences and insights are embedded in organizational processes
and practices. It is the management of information, experiences, insights which helps to
improve the process and enhance quality.
Knowledge is information in context to produce an actionable understanding. It can be

said that knowledge is information and context that leads the ability to act.
Knowledge management focuses on how an organization identifies, creates, captures,

and acquires shares and leverages knowledge.
History and evolution of Knowledge Management

Peter Drucker, Paul Strassmann, and Peter Senge these are the various theorists those
have made contribution to evolution of knowledge management, Chris Argyris,
Christoper Bartlett, and Dorothy Leonard-Barton of Harvard Business School have
examined various facets of managing knowledge. A study of Chaparral Steel, company,
which has effective knowledge management strategy inspired the research documented
‗Wellsprings of Knowledge — Building and Sustaining Sources of Innovation (Harvard
Business School Press, 1995). Peter Senge has contributed and focused on the
"learning organization," a cultural dimension of managing knowledge.
Diffusion of innovation concept has also made remarkable contribution to our

understanding of how knowledge is produced, used, and diffused within organization.
_____________________________________________________________________________
_____________________________________________________________________________
The appreciation of the mounting importance of organizational knowledge was

accompanied by concern over how to deal with exponential increases in the amount of
available knowledge and increasingly complex products and processes.
Knowledge acquisition,‖ knowledge engineering," "knowledge-base systems, and

computer-aided facilities has contributed a lot in this sphere .1980‘s spurred the rise of
the knowledge management systems that relied on work done in artificial intelligence
and expert systems.
Characteristics of Effective knowledge management system5:

An effective knowledge management system should include the following
 A system to capture and organize the tacit and explicit knowledge of
business functions and processes to make people better understand
how business functions
 A system design that facilitates incorporation of new knowledge into the
business system and that is toward continuous improvement and
innovation
 A common structure to manage knowledge, validate, synthesis new
knowledge as it is acquired
 A culture and values that support collaborative sharing of knowledge,
across functions and encourages full participation of all employees in the
process.
Why knowledge management?

 Strategically linking organizational intellectual assets with positive
business results and enhancing quality in business processes.
 Treating knowledge as an important concern of business activities and
reflected in strategy, policy, and practice at all levels of the organization.
 To align strategy and process
 To measure return on quality
 To design effective performance measure systems
7.5 Tacit and explicit knowledge in quality

Knowledge and information are the tools to deal with business problems; managing
knowledge provides primary opportunity for achieving substantial savings, significant
improvements in performance and provides competitive advantage.
5 th
Evans .R James and Lindsay. M. William ,”The management and control of quality”,6 edition, Thomson
–South Western
_____________________________________________________________________________
_____________________________________________________________________________
Knowledge is perishable and if it is not renewed and replenished, it becomes worthless.

As it provide the ―know how ―that an organization has available to use, invest and grow.
Many researchers and writers on this have drawn attention to the distinction between
explicit and tacit knowledge.
Tacit Knowledge : (personal know-how)

Tacit knowledge is information that is formed around intangible factors resulting from an
individual experience and is personal and content-specific. The tacit knowledge is which
we cannot easily communicate in words or symbols or the rest of the knowledge. Much
of our knowledge is tacit; perhaps we do not fully know what we know and it can be very
difficult to explain or communicate what, we know. Tacit knowledge represents
internalized knowledge that an individual may not be consciously aware of how he or
she accomplishes particular tasks. For ex: A manager way of motivating employees to
accomplish goals.
In many organizations, however, especially the services sector, much of people‘s

valuable and useful knowledge is tacit rather than explicit.
The salient characteristic of the tacit knowledge approach is the basic belief that
Knowledge is essentially personal in nature and is therefore difficult to extract from the
heads of individuals. In effect, this approach to knowledge management assumes, often
implicitly, that the knowledge in and available to an organization will largely consist of
tacit knowledge that remains in the heads of individuals in the organization. 6
The tacit knowledge holds that people are‖ knowledge carriers ―and dissemination of
knowledge can be accomplished by the transfer of people from one part to another part
of an organization, in this view, new knowledge is created when people come together
under circumstances that encourage them to share their ideas, experience, knowledge
and insights and this leads to learning in an organization
Tacit knowledge improve understanding of who knows what in an organization -- an

effort that is sometimes described as an effort to create ―know who‖ forms of knowledge
An example of the tacit knowledge approach to transferring knowledge within a global

organization is provided by Toyota. When Toyota wants to transfer knowledge of its
production system to new employees in a new assembly factory, Toyota typically selects
a core group of two to three hundred new employees and sends them for several
months training and work on the assembly line in one of Toyota‘s existing factories. After
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Practice”,http://www.knowledgeboard.com/download/3512/Tacit-vs-Explicit.pdf
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several months of studying, the production system and working alongside experienced
Toyota assembly line workers were sent back to the new factory site. These repatriated
workers are accompanied by one or two hundred long-term, highly experienced Toyota
workers, who will then work alongside with all new employees in new factory to assure
that knowledge of Toyota‘s finely tuned production process is fully implanted in the new
factory.7
Explicit Knowledge (recorded)

Explicit knowledge includes information stored in documents or other forms of media, or
that which can be express to others. Explicit knowledge can be put into a form that we
can communicate to others – the words, figures and models in book are an example of
that. Explicit knowledge represents knowledge that the individual holds consciously in
mental focus, in a form that can easily be communicated to others
In traditional perceptions of the role of knowledge in business organizations, tacit

knowledge is often viewed as real key to getting things done and creating new value.
Not explicit knowledge. Thus we often encounter an emphasis on ―learning organization"
and other approaches that stress internalization of information (through experience and
action) and generation of new knowledge through managed interaction.
7.6 Knowledge Repositories:

Knowledge repositories are knowledge assets, to organizations that refer accumulation
of intellectual resources that organizations possess. Knowledge can easily be lost if
information is not documented or when individuals leave the organization. Repositories
are the storage of information for further use. Knowledge repositories, captures and
manages, knowledge in an organization and can be said as organizational memory. It
continuously captures and analyses the knowledge assets of an organization. It is a
collaborative system where people can get information in order to retrieve and preserve
organizational knowledge assets and facilitate collaborative working .As the process
improvement requires new knowledge to result in better processes and procedures
.Knowledge repositories or Knowledge assets are similar to capital assets. They are
usually independent of those who created them and they can be used, moved, and
leveraged by others to solve broad-based problems and to enhance performance.
Knowledge repositories are storage of information or policies and are accessed to
leverage organizational processes .They increases knowledge of an organization, both
as in an individual sense as well as a whole.
7
ibid
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Kinds of Knowledge repositories:
Employee
Database Patents
Softwar Knowledge Documen

e repositories ts
Policies
Guides and
procedures
Technical
drawings
Figure 7. 3. Knowledge Repositories
Employees: Employees are repositories of knowledge, they have firsthand

experience, information, knowledge and learning, that can be utilize for the innovative
process designing. Personal knowledge rooted in individual experience and involving
personal belief, perspective, and values. The knowledge is stored in the brain of
respective employees.
They are the carriers of tacit knowledge, attributed with ―know-how‖ to perform task and
they have skills or the ability to solve problem.
Database: Database is organizational knowledge repositories where the information is

stored and retrieved. It is a collection of information that is organized so that it can easily
be accessed, managed, and updated. It is an integrated collection of logically related
records or files that is stored in a computer system, which consolidates records
previously stored in separate files into a common pool of data records that provides data
for many applications
Software: There are various software‘s used to store and process information. It
enhances knowledge repositories that support the collaborative generation of knowledge
by providing a semi-automatically generated semantic net of the topics contained.
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What is a... (verbal description)

--how does one look... (diagrams, animations)
--how does one use... (examples, explanations)
--how good is... (situational ratings)
--how does one implement... (recipe or template)
Patents: A patent refers to a right granted to organization that invents or discovers any
new and useful process, machine, article of manufacture, or composition of matter, or
any new and useful improvement. Patents are unique information repository
Documents: A document is a physical symbolic, diagrammatically, representation of the

information to communicate. It is designed with the capacity to communicate and
represents information.
It carries organizational documented information for further retrieval.
Guides Policies: Guiding policies are the source of organization plan and policies laid
down for retrieval and organization information.
Procedures: Procedures are the scientific method, which indicates sequence, steps,
task, decision calculation and process to perform a job or process the job when
undertaken produce the result or outcome.
Technical drawings: Technical drawing is the standardized technical ideas
These are the knowledge repositories or knowledge assets that stores information and
knowledge for further process and enhancement, they play more important role than
financial and physical assets in organizations.
7.7 Approaches to knowledge management

Approaches to quality management pertain to reshape processes to get valued result, in
terms of quality and sustainable innovation in response to problems. The emphasis is
strongly on the elimination of errors, from business process, employment of wide range
of IT tools and techniques, human intervention, social, analytical, and techniques are
employed to achieve this.
The ultimate concern is to enhance organizational ability and capacity to attain

organizational goal.
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Karl-Erik Sveiby identified two "tracks" of knowledge management:

o Management of Information. According to Sveiby, "… knowledge =
Objects that can be identified and handled in information systems."
o Management of People. For many researchers and practitioners,
knowledge consists of "… processes, a complex set of dynamic skills,
know-how, etc., that is constantly changing."
(From Sveiby, Karl-Erik, "What is knowledge management" )
Knowledge management approaches can broadly classify as:

 Mechanistic approaches to knowledge management
 Systematic approaches to knowledge management
 Cultural/behaviorist approaches to knowledge management
Mechanistic approaches to knowledge management

Mechanistic approaches to knowledge management are characterized by the application
of technology and resources to do more of the same better
Systematic approaches to knowledge management:

The systematic approach to knowledge management retains the traditional faith in
rational analysis of knowledge problem: such as –―The problem has a solution only the
way of thinking has to be changed ―
Cultural/behaviorist approaches to knowledge management

Cultural/behaviorist approaches,-This approach concentrates and tend to focus more on
innovation and creativity –the learning organization. And holds root in process re-
engineering and change management, tend to view ―knowledge problem" as a-
management issue.
7.8 Obstacles in knowledge management

In general, managing knowledge has been perceived as a different kind of problem —
an implicitly human, knowledge work is fundamentally different in character from
physical labor.
The knowledge work is almost completely immersed in a computing environment. Alters

the methods by which we must manage, learn, represent knowledge, interact, solve
problems, and act.
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7.9 A case study8

Quality in Practice
Knowledge Management for Continuous improvement at Convergys
Convergys Corporation (NYSE: CVG), a member of the S & P 500 and the Forbes
Platinum 400, is the global leader in integrated billing , employee care, and customer care
services provided through out-sourcing or licensing. Converges serves top companies in
telecommunications, Internet, cable and broadband service, technology, financial service,
and other Industries in more than 40 countries, and also provides integrated, outsourced,
human resource services to leading companies across a broad range of industries.
Convergys software processes more than 1.5 million individual bills each day to support
more than 120 million sub-scribes, and manages more than 1.7 million separate customer
and employee contacts, both live and via electronic interaction. Convergys employs more
than 48,000 people in 48 customer contact centers, data centers and other offices in the
United States, Canada, Latin America, Europe, the Middle East, and Asia. Convergys is
on the Internet at http:// www. Convergys.com, and has world headquarters in Cincinnati.
The outsourced customer service industry is maturing rapidly, is extremely dynamic,

and the environment continues to become more and more complex. Some factors
contributing to this situation include consolidation of providers, stiff price competition, and
new competition from both the expansion to offshore markets such as India and the
Philippines as well as traditional system integrators who are further penetrating the
business process outsourcing (BPO) market. In addition, Convergys is a fairly young
organization, having growth through a series of acquisitions that number more than 20 in
the last 20 years. This high number of mergers creates a unique challenged to integrate
the myriad of processes, procedure, and systems. With this environment and the
expectations of clients, shareholders and employees to constantly improve, Convergys
developed a vision ―To establish a high performance culture focused on continuously
improving the value we provide to our clients, shareholders and employees.‖
To deploy continuous improvement (CI) as a key part of the company‘s culture and
achieve this vision, Convergys followed a two-step approach.
1. Establish leadership support and financial relevance.
2. Support and encourage total participation establish CI as part of
everyone‘s job.
First, they built leadership support by linking CI to importance business initiatives in a

highly visible way. With this strong foundation, they turned more attention to getting all
employees involved in improving the business. To accomplish this goal, Convergys
needed a tool to help facilitate sharing and accelerating improvement efforts. The tool
8 th
Evans. R James and Lindsay. M. William ,”The management and control of quality”,6 edition, Thomson
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they chose was a Web-based employee intranet that called the CI portal (see Figure
8.11).
The CI Portal provides an infrastructure for companywide knowledge management

activities. One of the primary ways employees use it us to submit, tract, and manage
improvement efforts (see Figure 8.12). Additionally all improvement efforts and success
stories from throughout the organization can be accessed through the CI Portal. Since its
inception in the fourth quarter of 2000, more than 2400 improvement efforts have been
submitted in the pipeline, 300 of which were completed, successful improvements by mid-
2003.
Convergys also introduced a Best Practices Knowledgebase to the CI Portal (see

Figure 8.13). The purpose of the knowledge base is to encourage and facilitate the
sharing of best practices that improve the value of services provided to their clients.
Furthermore, through this knowledge base, best practices can be adopted and leveraged
across the organization. To facilitate the sharing of knowledge across the organization,
the knowledge base was designed to make it easy to record a best practice in a
consistent format that makes it understood by others with little difficulty. Additionally, best
practices are categorized in a way that makes it easy to find those that are relevant to a
diverse set of needs. To ensure the ongoing credibility of the Best Practices
Knowledgebase, a potential best practice is reviewed and endorsed before it can be
designated as a best practice. Once the proper documentation is in place, the potential
best practice is forwards to a vice president deemed to be a subject matter expert in the
area of the idea. The VP is asked to review the practice and decide whether its use
should be encouraged across the organization. The VP then designates the practice as a
Best Practice.
Another reason employees go to the CI Portal is to access resources to help them

facilitate or accelerate improvement efforts. More than 40 specific improvement tools that
are accessible through the CI Portal support their standard improvement methodology,
which is referred to as The Improvement Process or TIP. Figure 8.14 shows TIP as
accessed in the CI Portal. For each step of TIP, CI Tools are identified that support that
step.
GI Tools are approaches, tips and techniques that facilitate problem solving and
making improvements. CI Tools are basically proven methods that assist in marking fact-
based decisions. CI Tools can be used in a variety of ways. Independently, each tool can
help to solve a common business issue. CI Tools also support a structured improvement
effort. CI Tools are documented in the CI Portal in a simple, consistent, easy –to- use
format. Figure 8.15 shows list of the types of tools included in the CI Portal as well as the
consistent format.
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Access to TIP and CI tools through the CI Portal provides an ongoing source of
continual training for employees on an –needed basis and a way to refresh and reinforce
continuous improvement approaches. Additionally, self – paced training modules have
been developed specifically for CI and the CI Portal and are available to all employees to
augment learning and personal development. Examples of the self-paced course
including the following.
 Driving Improvements with the CI Portal

 Accelerating Improvements with TIP and CI Tools
 Improving Business Processes
Continuous improvement (CI) is an integral part of Convergys‘s culture and its value
proposition. Through CI, Convergys has been able to generate significant financial
benefits, such as maintaining higher profit margins than its competition. In 2002 alone,
more than 2,000 management employees (or 45 percent of management) were directly
involved in CI activities. In a 24 Month period, more than 2,400 improvement ideas were
submitted. Furthermore, thousands more embraced the CI culture. Several clients also
acknowledged their approach to continuous improvement as a point of differentiation.
CI and the uses of the CI Portal keep expanding. The focus will continue to be on how
employees can be better equipped to facilitate making their own improvements.
Additionally, Convergys continues to learn how to most effectively leverage the
knowledge and experience of its employees through the sharing of success stories and
best practices, and in the process, strengthen CI as a competitive advantage.
Self Assessment Questions:

1. What are knowledge repositories?
2. Differentiate between Explicit and Tacit knowledge
3. Select the correct option:
The Knowledge that is formed around intangible factors resulting from an

individual experience and is personal and content-specific is:
(a)Explicit knowledge
(b)Tacit knowledge
(c)Transit knowledge
(d)Information
7.10 Summary
―Quality is the totality of features and characteristics of a product in satisfying customer
needs and expectations on a continuous basis to delight customer‖. Quality is
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conformance to requirements or specifications, quality of any product and service

depends significantly on knowledge.
As the Business organizations exist with certain mission – ―they are trying to accomplish
objectives, though they have to, face competition, gain competitive advantage‖, they
have to improve the performance-‖ To deliver the best results‖, and they also have to
deal with the change ―How to cope with change? Now all these need made lifelong
learning as an inescapable reality for organization and they compete on the basis of
knowledge. As the product and services are increasingly getting complex, endowing
them with a significant information component is essential. Therefore, knowledge and
information are considered as corporate assets and it need strategies policies and tools
to manage these intangible assets same as the tangible assets of organization
Knowledge Management is the discipline that helps spread knowledge of individuals or

groups across organizations in ways that directly affect performance. Knowledge
Management envisions, getting the Right Information within the Right Context to the
Right Person at the Right Time for the Right Business Purpose.
Functionally, the ideal knowledge management Infrastructure should take advantage of

existing knowledge stimulates the development of new knowledge and ideas, acquire it
directly and painlessly, automatically classify and relate knowledge, make it globally
accessible so that the right knowledge could be obtained and effectively utilized by any
knowledge worker who needs it.
Further organization needs to implement technology driven methods to access control

and deliver information to share, identify and transfer knowledge within organization
these are the best practices that often set high –performing organization apart from the
rest
Finally, the contributions of Knowledge Management to Quality Management decisions

are indirect, but they can have a pervasive positive impact on knowledge processing in
QM and this impact can positively affect QM decisions, implementation and business
processing
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9
A benchmarking study co-sponsored by the American Productivity and
Quality Center reported that 79 percent of managers from the 70 responding
companies felt that managing organizational knowledge is central to the
organization‘s strategy, but 59 percent stated that their firm was performing this
management function poorly or not at all. Also, 88 percent believed that a climate of
openness the trust is important for knowledge sharing, but 32 percent of the
respondents believed that their organization did not have such a climate. In many
companies, the gap was attributed to a lack of commitment to knowledge
management on the part of top managers.
The transfer of knowledge within organizations and the identification and

sharing of best practices often set high – performing organizations apart from the
rest.

1. How information plays a role in knowledge management?
2. What is the importance of knowledge management?
3. Fill in the blanks with the correct option:
______________includes information stored in documents or other forms of
media, or that which can be express to others.
(a) Explicit knowledge (b)Tacit knowledge (c) Any information (d)Process
knowledge

SAQ
1. Refer to 7.6
2. Refer to 7.4
3. Refer to 7.5
Answers to TQ’s
1. Refer to 7.2
2. Refer to 7.3
3. Refer to 7.5
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Evans. R James and Lindsay. M. William ,”The management and control of quality,6 edition, Thomson
–South Western
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Unit 8 Barriers to Quality
Structure
8.1. Introduction
Objectives
8.2 Organization‟s Vision to Promote QM
8.3. Barriers/Obstacles to Quality
8.4. Overcoming Barriers
8.5. Summary
8.6. Terminal Questions
8.7. Answers to SAQ‟s And TQ‟s
8.1. Introduction
 Quality management [QM] is a never ending journey. The time for reaping the
benefits from quality management depends on the resources being allocated to the
process. Before any quality management efforts can be undertaken, the top
management of an organization must make a commitment to transformation, to
sustain, to coordinate and to promote that commitment.
 Total Quality Management [TQM] is an approach to every person at every level.
Participation and teamwork, customer focus and continuous improvement are the
main elements of the TQM concept.
 The implementation of TQM techniques is considered as the absolute solution to
everything, although organizations are unable to adopt the Quality management
philosophies fully, due to many barriers/ hindrance factors that are faced
 Different types of barriers/obstacles may pose a serious threat to organization in
implementing and transforming the organization to quality management and reap
the benefits.
 What are these barriers/obstacles that organizations may face and what measures
can be practiced to overcome them, improve upon and reap the benefits, are
deliberated in this unit.
Objectives
 How can an organization achieve the desired results as listed above without crossing
all the barriers/obstacles in their efforts to transform the organization to Quality
management in place?
 It is very essential for organizations to identify those barriers/ obstacles that hinder
their efforts and understand how they arise for any action to counter.
 In this unit, we are discussing different types of barriers that may pose a serious
threat to organization in implementing the quality management, its implications,
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complications, the failures experienced and further identifying the systems,

methodologies, tools, techniques that can be adopted to overcome them to reap the
benefits listed in 2 above.
8.2. Organization’s ‘VISION’ to Promote- QM:

 Different needs and situations stimulate an organization to pursue QM.
Organizations desire to have their objectives met when they are promoting the
transformation to QM. Some of the important objectives/ desires include:
1) To exceed customer requirement and satisfy him
2) To improve organization‟s image
3) To increase market share and size
4) To improve employee morale
5) To create common mission
6) To improve communication
7) To standardize processes
8) To create best practices
9) To improve the physical environment
10) To resolve problems before they become crisis
11) To bridge responsibility gaps
12) To improve the documentation of processes, products, and services
13) To improve the design of processes, products, and services
14) To improve manufacturing and delivery of services
15) To Produce uniform products at low cost to the market
16) To increase profits
8.3. Barriers / Obstacles to Quality

 The barriers/obstacles to implement TQM seem endless. The barriers are found
never-ending with plenty of issues. In fact it starts from top management itself and
flows down to all working levels. This is so in all business sectors, whether they are
manufacturing, services, government and even education.
 The question is: Is there any way to adopt TQM and finally overcome these barriers?
Therefore, it is important for organizations to understand these barriers first and
avoid them both before and during the TQM implementation.
Main Groups of barriers: The barriers to quality could be grouped under four:
Physical: (Processes, Tools, & Structures, Organization design & Management
perspectives)
Infrastructure: (Strategy, Measurements, Rewards, Systems & Procedures)
Behavioural (What groups or individual do)
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Cultural: (Deeply held Assumptions, Values, Beliefs, & Norms. attitudes, values and
beliefs
 The above four groups with inclusive elements are shown in the following figure
ARTIFACTS
S PHYSICAL [PROCESSES, TOOLS
ABILITY TO AND STRUCTURES]
INFLUENCE
PEOPLE INFRASTRUCTURAL
[STRATEGY, SYSTEMS,
REWARDS]
BEHAVIORAL [WHAT GROUP &

INDIVIDUALS DO]
CULTURAL [ASSUMPTIONS,
BELIEFS, VALUES, NORMS]
CHANGE
DURABILITY
Fig: Four Organizational Levels and Its Elements
 The Barriers/obstacles of the groups are discussed with feasible actions to overcome
such hindrance factors. While many such obstacles are interrelated, it and may be
difficult to categorise them exactly to any one specifically.
Physical/ Management Perspectives

 Some of the attributes that may pose threat as barriers, which requires positive
actions from the management, are listed below.
1) Lack of management commitment/lack of leadership
2) Inability to change the mind set (paradigms) of top management
3) Inability to maintain momentum for the transformation
4) Lack of uniform management style
5) Lack of long term Corporate directions
6) Inability to change the culture of an organization
7) Lack of effective communication
8) Lack of discipline require to transform
9) Incompatible Organizational Structure
10) Isolated Individuals and Departments
11) Who's responsible? Inadequate Empowerment and Teamwork
12) Setting Priorities
13) Paying Inadequate Attention to Internal and External Customers
14) Ineffective Measurements, Lack of Access to Data & Results
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15) Organizational Politics:

16) Lack of time
 The above barriers along with proposed/feasible solutions to overcome them are
highlighted side by side
Lack of Management commitment & good leadership:

 Lack of management commitment will stop quality management efforts. Impeding
quality management create a situation called the „slow death‟. The slow death is
similar to a plant whose parts like leaves, branches and the trunk has natural
inclination to grow, but the gardener neglects and allow that plant to have a slow
death. Therefore the gardener (top management) must create and direct energy
necessary to transform an organization.
 When management commitment is missing, organizations will experience low
employee‟s participation in TQM programs.
 There are two sources for energy, „a crisis or a vision’. Certain companies begin a
program of QM as a reaction to the crisis, which may reflect on the organization‟s
inability to be competitive due to low quality and productivity,etc
 Top management can uncover and bring to the forefront the real or potential crisis
through a probing question in a brain storming session to make their employees to
understand the real crisis and ask them commit for quality, productivity etc. Top
management should develop a transformation plan.
 Another method is to transform via a vision. A vision can stimulate top management
to expend energy needed to transform & as a rallying point for the creation of quality.
A vision should inspire people to take action to transform their organization and
should have long term purpose. The top management should initiate action via a
crisis and or a vision process, synthesize the study and digest the crisis being faced
and then formulate and articulate the vision of the organization, thus promoting
commitment to transformation.
 Next issue is the Leader of the team. Is he committed to quality? Without a good
leadership, quality success is likely to be doomed. Lack of evidence of this
commitment at the leader level may result in damaging results.
Lack of communication:
 Eliminating communication barriers between management can improve production
and increase product and service quality.
 Communication barriers can prove detrimental particularly those that isolate
departments and individuals can prove detrimental.
 Both Employees and management need to know “what's going on" to be effective.
So also customers and suppliers need to be involved.
 Communication being a management responsibility and one of the major barriers to
quality, top management should answer certain questions like:
 Does the organization design support or inhibit quality achievement?

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 Is quality recognized as a problem?

 Is the focus right for achieving quality?
 Is the mindset holistic or reductionist?
 What is the relative health of organization‟s Quality improvement initiative?
 What are the areas of strength, “assets” that support & reinforce quality
improvement efforts?
 In which areas they failing in sustaining its quality improvement philosophy
 Are you seeing the Quality results you had hoped for?
 Top management‟s commitment, support to total quality management program and

proper communication will soften the barriers and promote team work
 Removing barriers will increase employee's perception of organization. Work
satisfaction will improve as employees will make better use of their resources.
Incompatible Organizational Structure,

 Autocratic organizational structure and policies can lead to implementation problems.
If organizational structure is a problem and incompatible, then it should be
restructured for the expected outcomes.
Isolated Individuals & Departments

 Teamwork is an essential part of the TQM environment. When TQM principles are
used, the isolation of individuals and departments will dissolve over time. Team work
for problem solving by using SQC tools will analyse the root cause and easily solve
them, thus taking advantage of their teamwork efforts.
Ineffective Measurement Techniques, Lack of Data and Results

 Ineffective measurement techniques or the absence of a measurement process,
maintaining inaccurate data, and lack of access to data may run as counter measure
to TQM principles. Hence, quick, easy access to data is important; data retrieval
must be efficient, not time-consuming or labour-intensive.
 Further, decision makers must also receive training in data analysis and
interpretation so that the measurement system will serve its intended purpose.
Paying Inadequate Attention to Internal and External Customers

 Organizations must pay attention to both their internal and external customers and
understand their needs and expectations. Managers may assume about customer
needs and expectations, resulting in misdirected efforts and investments. This brings
in customer dissatisfaction and labour mistrust.
Not defining the ‘Quality’ properly:

Many companies are confused in defining quality. A specified definition by the
management will help others to understand the meaning of quality and work for it.
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Focus on quick fix:

 Management is under constant pressure to find and fix problems quickly, with
immediate results. Instead, they must provide a long-term focus and look towards the
future. Organizational should focus on quality problems & solution.
Who's responsible?
 The focus is on "who's responsible" for „what‟ and "how can we prevent this problem
from occurring in the future?" Or can I shift the problem to someone else? In other
words, the responsibility on quality aspects must be spelt out and owned rather than
passing the buck. This approach is a barrier in itself.
What do you know and don't know?

 „What' we know and don't know about people, equipment, processes, products, and
services is a barrier. Managers should know „what is known and what is unknown‟,
and plan for the right training. Management must provide employees with the
opportunity to really do their job and have pride in their workmanship.
Failure to understand the Skeptism

 People inside have seen the previous programs, have failed and management
fails to understand the conviction of a) the need for quality effort b) determination
to make efforts a success.
 Any exhortation approach with work may not help as motivational technique and
to inspire everyone to do better may not be forthcoming.
Failure to fix a problem

Certain issues/ problems with human resource, the management vs. leadership,
processes/procedures/ systems that are adopted may hinder the quality movement.
Treatment should not be on symptoms by overlooking the real problem. The manager's
role is to fix problems properly & solve totally.
Number (output) counting

 In production, looking at output numbers is given the priority. Managers forget the
emotions and hearts of the employees. On the other side they should look into value
of a satisfied customer/ unhappy customer. Hence management needs to focus on
the right numbers, not just numbers they wish to.
Setting Priorities:
 Setting priorities of the work to be accomplished by the associates is the primary
responsibility of the manager. This brings in a long run relationship and creates
stability. Here too communication plays an important role.
Short and single sightedness:

 Concentrating on issues rather that identifying and removing root causes will not help
achieve the desired results
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Organizational Politics:
 Internal competition, the "know-all" attitudes from seniors, no pro activeness; ego-
clashes, jealousy, fear complex, feeling threatened by competency, looking for power
and popularity et al, and such other human resource problems are going to diminish
the organizational strength, its culture and the positive growth.
Rigidity:
 Not being flexible and adaptable poses serious problems in implementation.
Infrastructure:
 Here the discussion is on the factors that support or inhibits in pursuit of quality and
what are the barrier and how to overcome them. Some of the barriers are
1) Lack of financial and human resources
2) Improper Planning
3) Lack of continuous training and education
4) Education and self improvement requirements for transformation
Lack of an infrastructure for quality:

 Have management successfully planned and provided for all infrastructural facilities
for achieving the desired quality of the products or services and delegated the
responsibility through an mechanisms with clear quality goals for carrying out the
plans, budgets and provision for recognition and rewards etc. Barriers if any, in this
vital operational requirement must be totally removed.
Improper Planning
 Lack of clarity in the implementation plan creates another barrier. Failure to
promote open dialogue among the participants kills the TQM initiatives.
 Implementation problems can be overcome with proper planning. Say for
example of a successful planning of a TQM of a) obtain total commitment; b)
communicate vision, mission, goal, about the new focus.
 The plan should remain flexible, however, so that adjustments and
improvements can be made as the quality culture evolves.
Education and self improvement requirements for transformation
 Once the organization commits for transformation, its members enter a stage of
education and self improvement and hence the top management need to
promote and coordinate these for organizational transformation.
 Education and self improvement among its entire human resources will help
remove the Management‟s fears.
 Educating and promoting self improvement being both an exciting and a
frightening process, will make its group members to understand how the system
of profound knowledge might affect organizational and personal decision making.
 The salient features of components of the system of profound knowledge are:
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_____________________________________________________________________________
a) System theory: involves defining a system, understanding who is

responsible for results, understanding the inter dependence among the
components of the system and the need to optimize the entire system
b) The theory of variation: understanding causes of variation and knowing
responsibility for teach type of variation, capability of a process, and to predict
a process‟s future output.
c) The theory of knowledge: understanding how to acquire process
knowledge, how to develop knowledge on operational requirements
d) Psychology: understanding 1) people 2) the interaction between and people
and circumstances, 2) people‟s learning in different ways and different
speeds and 3) intrinsic and extrinsic motivations.
Lack of Continuous Training and Education

 Training and education is an ongoing process that facilitates continuous quality
improvement in any organization. Leaders involved in the TQM implementation
should identify the educational needs of the organization and meet those needs
efficiently and cost-effectively. Lack of continuous training and education puts up
barriers on effective and efficient working of individuals.
Behavioural (What Groups and Individuals Do)

 Behaviour of individuals and groups has to be analysed and barriers if any must be
removed and related problems must be resolved quickly. Some of the barriers that
may result from the behaviour of individuals and groups is listed below
o Identifying and resolving personal Barriers to transformation.

o Fear of loss of individuality, rigidity, scrutiny by supervisor and the process
standardization
o Passive resistance to change
Identifying and resolving personal Barriers to transformation

 Each members of the organization should identify and resolve any issues that create
barriers to the transformation. The following beliefs and satisfying them may resolve
barriers/obstacles
1) Extrinsic motivators brings the best in people
2) Focusing on improvement of results
3) Effective rational decisions based on majority opinions & visible figures
4) Quantity is inversely related to quality
5) Management‟s function is to construct, execute and control plans
6) Competition is superior to cooperation
7) Winners and losers are necessary in any interaction
 Each member should examine his or her opinions/ beliefs; Identify and resolve
personal barriers in the transformation process of an organization,
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‘One for me’- Fear syndrome.

Selfish motive, a behaviour aspect, gets priority over good decisions. It may give raise
to a symptom of fear of losing a job and other anxieties. This can create deeper problem
like lack of teamwork etc. Deming calls this "driving out fear so that everyone can work
for the company."
Inadequate Use of Empowerment and Teamwork

 Ineffective teams that fail to stay focused or complete their tasks in time reflects
inefficiency. To be effective, teams need to be trained regarding a mission or
purpose, a time frame for completing the project, responsibilities being delegated etc
and empower them to take decisions, This sends a positive message to employees
about the importance of empowerment and teamwork.
Avoid TQM Barriers by Understanding Them

 Barriers occur to varying degrees and with varying frequency in every organization.
Most of the employees can exercise far more creative, responsible self directive and
self controlled action in their particular job. This individual behaviour should be
optimized in group working
 Awareness of barriers in group working and understanding behaviour of individuals
working in groups, will enable quick solution to problems. This brings better
understanding of the team improves group behaviour.
Passive Resistance to change, sustain & stabilize:

 Passive resistance to change to any new suggestions/ideas/ practices will always be
there with all working in the organization, at different levels to different scales.
Change for better is the slogan. Everything on this earth changes, why not people,
why not attitudinal changes, why not behavioural changes etc. The required prime
mover as „change engine‟ are to be planned by the management. All the
barriers/obstacle that may come in the way of TQM because of attitudinal changes
must be removed
 Some of the reasons for such resistance by people may be attributed to: a) Some
people fear loss b) Some people mistrust those who lead. c).Some people disagree
on the change. d) Some people don‟t tolerate change
 To Introduce the Change, the following trigger process may help:

 Ask people to solve the “problem.”
 Offer solutions and strategies.
 Work together to co-create a shared change vision.
 Guide people for the positive outcomes.
 Listen to people‟s objections, concerns, fears, and acknowledge
 Invite people to offer ideas & realize the benefits.
 Integrate their ideas for improving change.
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 Change Process: After triggering, next process is to create a felt need, so that the
workforce will start thinking about the change, as shown in the fig. Below:
5
4
SUSTAIN
STABILIZE
THE
CHANGE
CHANGE
3
1 REVISE &
CREATE A FINALIZE
NEED FOR THE
CHANGE CHANGE
PLAN
2
INTRODUCE
THE
CHANGE
 The above said process involves:
1) Identify what needs to be changed and why it must be changed
2) Identify the problem that needs to be solved.
3) Impart them the data of the successes and failures.
4) Identify the consequences of not solving the problem
5) Introduce the Change, ask them to change and solve the problem
 Leading Change: The figure given below details the process of:
a) Creating a felt need,
b) Introduce change and what are its consequences
c) Finalize the change plan, reconcile differences & Stabilize
d) Reinforce to build/sustain employee‟s commitment and ownership
 The following process will help stabilize and sustain the Change
1) Develop action steps for stabilizing, reinforcing, & sustain change
2) Provide skill and knowledge training
3) Revise job descriptions
4) Develop new reward systems based on performance measures
5) Make adjustments to the change vision and strategy
6) Prepare and Challenge people for the next change.
 Revise and Finalize the Change with the following action plans”
 Help people identify/explore opportunities
 Define the future of the change for individuals & organization
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 Invent creative solutions to the challenges

 Encourage people to find answers to their questions about the change.
 Adjust the change vision, strategy, and plan
Organizational Culture [Is the culture supportive of quality?]

 The organizational culture is the set of values, beliefs, assumptions, principles,
myths, legends, and norms that define how people actually think, decide, and
perform in the organization. How these fundamental assumptions and related issues
shape in an organization is depicted in the picture below.
Cultural Artefacts:
 Artefacts are the outward manifestations of the culture and the physical evidence of
the powers that drive the organization.
a) Types of artefacts: Behaviours, goals, plans, dress, hours of work, rules,
policies, practices, systems, structures, and mechanisms that describe what
the culture is and what it is now.
b) Espoused Values-what organization says is important, what it values
c) Tacit Assumptions — the unspoken shared assumptions that define how
things really work in the organization
d) A Healthy Culture: A culture is healthy/effective to the extent that it enables
an organization to achieve its objectives/goals (especially survival and
integration).
e) An Unhealthy Culture: When the external or internal environment demands
a change and the prevailing beliefs, assumptions, and norms held by
members stifle the innovation, the emergence unhealthy cultures marginalize
the challenge and it disables or prevents the organization from achieving its
goals.
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FUNDAMENTAL ASSUMPTIONS ORGANIZATIONAL

people sort out the role of human
nature, self, group, truth, time, CULTURE
quality.
SHAPE
FUNDAMENTAL
ASSUMPTIONS
INTERNAL
INTEGRATION
ISSUES AND
EXTERNAL
SURVIVAL ISSUES
INTEGRATION ISSUES
Issues to help people know
where they fit in. To deal
with anxiety & uncertainty &
provide direction
Inability To Change Organizational Culture

 Many have found that changing a company's culture to reflect TQM is a difficult task
and requires enormous time. To bring TQM into a company's corporate culture, first,
the fear of change must be removed, poor labour-management relations must be
resolved, and the company's focus must be beyond the status quo. For an
organization's culture to change, the effort must be continuous and focused.
Management must be committed to the program and support all change efforts.
They must identify and address inconsistencies in the organization.
8.4. Overcoming Barriers:

 A strong knowledge and awareness in the Leadership coupled with a drive for
excellence and growth, proactively, will reap high success to the organization. The
manager's job is to create an environment in which excellent workmanship flows. All
the means and ways must be found to overcome any obstacles/barriers/hindrances
that may come in the way of progress and growth of the organization
 Some of the methods/tools, techniques, and best practices to overcome certain

types of barriers are discussed and these are in addition to the 8.4 to 8.6 above.
Use of the Drivers of Success to overcome barriers:

 Some of the drivers that are essentials to achieve success and identified areas for
overcoming obstacles/barriers in quality across are discussed below:
 Senior management commitment and involvement.
 Leadership and active commitment to continuous improvement at all levels
 Focusing on the needs of customers and stakeholders.
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 Establishing clear and effective measurement and feedback systems.

 Learning from continuous improvement results and capturing and sharing
learning throughout the organization.
 Establishing a culture for continuous improvement and high involvement
 Focusing on people-front line and developing employee ownership for quality.
 Focusing on critical processes—including major business processes
 Standardizing achievements & documented quality management system
A Step by Step Approach:

 To create a sound quality culture across the organization, managers should have
their own approach plans. The activities involved shown below, may to some extent
fade the barriers. These steps emerged from the company's experiences in human
resource management and adopted as an active approach to quality improvement
and remove the obstacles.
1. Show what's expected and required,

2. Involve people and Encourage employees
3. Take a long-term approach,
4. Focus on teamwork and Train thoroughly,
5. Use problem-solving processes,
6. Communicate and Try different approaches.
Brain storming process:

 The simplest method to generate ideas is brainstorming process. Given a specific
area to improve or problem to solve, as many ideas as possible should come up to
solve. This method encourages innovation, invention, and creativity; and it could
produce solutions, thus removing the foreseen and unforeseen barriers
The process mapping technique

 This process Involves creation of flowchart to pinpoint where the problems arises
and identify areas that could be improved. Mapping is particularly useful for spotting
bottlenecks and to remove unnecessary barriers in the operations.
Kaizen:
 Kaizen is a Japanese set of techniques which promotes efficiency as a means to
higher quality. Any process deemed to be wasteful resources are removed, and the
process is refined/improved upon, monitored by the team to ensure that changes are
adhered to, transformation happens, removes impediments and continuous
improvements takes place. This reduces barriers
Use of QC Tools:
 It is possible to overcome the barriers by treating symptoms and focusing on a quick
fix through a logical problem-solving process. By using QC tools like Cause and
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Effect Diagrams, and Force Field Analysis, the problems can be broken to
manageable pieces, solve, and implement corrective measures.
Involve people.
 People involved in the decision-making process take more responsibility for finding
and implementing solutions. A team' process makes individuals to contribute to the
long-term success of a business, thus overcoming barriers. Involving people
throughout the organization can help overcome these barriers.
Take a long-term approach.

 Short-term outlook generally creates problems instead of overcoming. A long-term
plan is important to success. Of course, answer depends on the situation.
Start ...all.
The Quality Improvement requires change which can become a barrier if forced upon
too many people, too quickly. Limitations should be reckoned.
Focus on teamwork.
It is easy to have a group, but more difficult to build a team. Teams need training on
aspects of: how people work together, how teams function, what process will be used,
and group dynamics. This teamwork help overcome many barriers
Encourage employees.
Good leader is an encourager and his role is to involve with people and encourage
activities in quality improvement. An effective manager is a positive motivator, who will
stop barriers to penetrate further..

a). Match the following:
Group of Barrier to quality Features in each group
PHYSICAL Deeply held Assumptions, Values, Beliefs, & Norms.
attitudes, values and beliefs
INFRASTRUCTURE What groups or individual do
BEHAVIORAL Strategy, Measurements, Rewards, Systems &
Procedures
CULTURAL (Processes, Tools, & Structures, Organization design
& Management perspectives)
b). Fill up the blanks with appropriate words:

1) Participation and teamwork, customer-focus and ................are the main
elements of the TQM concept.
2) The barriers to quality could be grouped under four main heading. While first
three are a) physical 2) Infrastructure, 3) Behavioural, the fourth one is ,,,,,,,,,,,,,
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_____________________________________________________________________________
3) There are two sources for this energy. They are crisis and.........Certain
companies begin a program of quality management as a reaction to a crisis
which may reflect on the organization‟s inability to be competitive
4) Eliminating communication barriers between management can improve
production and increase..........................
5) Removing barriers will increase each employee's ............ of organization as a
total entity. Work will improve ............, because employees will make better use
of their resources
6) Teams can work on tools like brainstorming, and ..............for identifying the
discrepancies that are often the root cause of such problems and easily solve
them, taking advantage of their teamwork efforts.
7) Certain issues/ problems with human resource, the management vs. leadership,
and ..........................that are adopted may hinder the quality movement.
8) The process of leading change are a) Creating a felt need, b) Introduce change
c) Finalize the change plan d)...........................
9) Educating and promoting self improvement being both an exciting and a
frightening process. The salient features of components of the system of
profound knowledge are: system theory, the theory of variations, &.....................
8.5. Summary
 Different types of barriers/obstacles may pose a serious threat to organization in
implementing and transforming the organization to quality philosophies and
management and reap the benefits.
 What are these barriers/obstacles that an organization may face and what measures
can be practiced to overcome them, improve upon and reap the benefits. It is very
essential to identify those barriers/ obstacles that hinder their efforts and understand
them clearly before taking any action to counter them.
 We have discussed the different types of barriers that may pose a serious threat to
organization in implementing the quality management, its implications,
complications, the failures and further identified systems, methodologies, tools,
techniques that can be adopted to overcome such barriers and reap the benefits
 The barriers to quality could be grouped under four main headings: 1) Physical, 2)
Infrastructure , 3) Behavioural , 4) Cultural:
 In all as many as 35 barriers coming under the above four groups are analysed and
the possible solutions to overcome each one of these barriers are analyzed, and
evaluated and the process of establishing a Quality management program in an
organization is discussed,
8.6. Terminal Questions:

1) Why TQM is important for an organization?
2) What are the objectives/desires that an organization aspires to achieve?
3) What do you mean by Barriers to quality?
4) What are the four major groups with which we categorize the barriers to Quality?
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5) What are the main elements covered in the four groups of barriers?
6) What are the attributes that pose threat as barriers to achieve Quality
management under Physical/Management perspectives?
7) Companies are having two sources of energy that can be tried by management
to transform people. What are they and how these two will help the process?
8) Communication is management responsibility, what are the questions that may
arise with the employees which requires answer to be communicated from the
management?
9) What are the barriers under “physical” Group? Briefly explain
10) List out some of the barriers that comes under “Infrastructure” group and how do
they subscribe for improvements if impediments are removed?
11) Why behaviour of individuals and groups in an organization require thorough
analysis and removal of barriers is essential for team working?
12) What are the barriers that may result due to behavioural aspects that hinders
progress in quality movements
13) Change for better is the slogan. Why change at all levels is a must for
organizational growth?
14) What are the factors that cause resistance to change?
15) Briefly explain change process
16) Define organizational culture?
17) What are cultural artifacts? List out the type of artifacts. How these help in the
change process?
18) Briefly explain the types of drivers that could be practiced to change the
organization?
19) Briefly explain some of the methodologies, tools techniques that can be deployed
to overcome certain types of barriers in an organization?
8.7. Answers To SAQ’s and TQ’s

a). Match the following:
Group (Barrier to quality) Features in each group
PHYSICAL Processes, Tools, & Structures, Organization design
& Management perspectives
INFRASTRUCTURE Strategy, Measurements, Rewards, Systems &
Procedures
BEHAVIORAL What groups or individual do
CULTURAL Deeply held Assumptions, Values, Beliefs, & Norms.
attitudes, values and beliefs
b): Fill up the blank with appropriate word:

1) Continuous improvement. 2) Cultural. 3) Crisis & Vision. 4) Product and service
quality.5) perception, satisfaction 6) fishbone diagrams and workflow diagrams 7)
processes/procedures/ systems 8) Reinforce. 9) theory of knowledge and
psychology.
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_____________________________________________________________________________

1. Refer page no. 2
2. Refer page no. 2
3. Refer page no. 3
4. Refer page no. 4
5. Refer page no. 4
6. Refer page no. 4
7. Refer page no. 5
8. Refer page no. 6
9. Refer page no. 5-9
11. Refer page no. 11
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Unit 9 Quality as a Strategic Decision
Structure
9.1 Introduction
Objectives:
9.2 Quality: A Business Perspective
9.3 Planning for Quality
9.4 Leading Your Team to Quality
9.5 Coaching Individuals to Excel
9.6 Summary
9.1 Introduction
Quality management seeks to change business processes to assure and increase value
for both the customers and for the business it-self. But a business is a system, and a
change in any one process has complex consequences. Usually, a process is changed
not just once but repeatedly in a series of progressive refinements. The first changes
bring big results, but, as time goes on, we have to spend more time and money to get
useful results. Once we’ve fixed the big, obvious problems, one of two things will
happen: either changes will become incremental, resulting in smaller benefits, or the
company will hit one bottleneck one area that it doesn’t see or isn’t willing to change that
is the source or root cause of many problems earlier thought to have stemmed from
other causes that by now have been removed. When either of these starts to happen,
executives can become disenchanted with quality management programs or continuous
improvement, and start to look elsewhere for magic pills, quick fixes, and bigger bang for
the buck in improvements.
Objectives:
After going through this Unit students will understand
 Business perspective of Quality
 Quality as flow Perspective
 SIPOC Model
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 Planning for Quality

 Building and creating quality team
 Enterprise Decision Making System
 Quality Inspection
9.2 Quality: A Business Perspective

In quality management, the ratio of improvement effort to benefits varies greatly.
Sometimes, a single change in a process will bring a lot of benefit. Other times, three or
four changes in a process have to come together to produce one change in results. We
can understand this best if we visualize our business as a series of pipes containing
products, information, and money. If one main pipe is broken in just one place, then
fixing it will make a big difference. If the same pipe is clogged in five different spots, then
we have to clear all five clogs before things get moving and we see increases in flow or
productivity. Also, once we’ve fixed all the pipes and cleared out the main ones, we will
see less improvement in overall flow as we get down into the details and clear out small
pipes that are only partly clogged. If results are incrementally lower over time, why
should a company stick with quality management? There are three reasons:
 When we don’t spiral up towards more quality, we quickly spiral down towards
less. It is hard, if not impossible, to stay on a plateau. Maintaining quality in a
world of human error, mechanical failure, and general change requires constant
checking. That constant checking if we do it naturally leads to some degree of
improvement. Without that constant checking, quality is sure to degrade.
 If our competitors keep the focus on quality in an effective way, we will fall behind
fast particularly in market share.
 A steady commitment to quality solves other problems, such as customer
retention and employee retention, reducing cost of sales and cost of operations.
Quality: A Process Flow Perspective

The idea of seeing a business as a bunch of flows through pipes is not a new one.
Chemical engineering developed a method called flow diagramming for chemical plants,
and that led to data flow diagramming for business by the 1950s. We also talk about
work flow, information flow, and cash flow. When things are flowing, it’s good for
business. In a chemical factory, stuff flows through vats and pipes. What carries the flow
of work in a company? Processes! In a factory, a process is how a product is built. And
we can define each process as having seven elements, as shown in Figure.
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INPUT PROCESS OUTPUT
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TOOLS
TECHNIQUES
RESOURCES
We can think of each task as having three core elements, and four ancillary elements.
The major elements are:
 Inputs, which are the ingredients, raw materials, or components that go into a
process and become part of the output.
 Process, the activity of transforming inputs to make outputs the work.
 Outputs, the end results of a task, such as a component or a finished product.
The additional, minor elements are:

 Tools or equipment, which are used for the task, but not used up.
 Resources, including disposable items (such as cleaning supplies), and our
effort, which are used up in the process but do not get included in the product.
 Techniques, the instructions for the work process.
 The work environment, the space and conditions within which the work is being
done. Of course, each product may be built using many tasks—perhaps
thousands or even millions
Tasks are linked because the output of one task is the input of another, until we can link
the supplier’s through all the tasks to the cut Output-Customer model.
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Of course, a single product or company has many such chains that link all suppliers
through many processes to all customers. We can map the five stages of our quality
management framework to the SIPOC model as follows:
 Quality definition comes before the definition of processes.

 Quality planning includes defining what processes are required to deliver the
product to meet
Or exceed specifications, putting them in order by linking outputs of one process to

inputs of the next, and then defining all seven aspects of each process with
requirements and tolerances on all key variables, so that we can consistently produce all
outputs of all processes to specification.
 Quality control in the broad sense including all forms of checking ensures that
outputs and processes meet requirements, that defective output is reworked or
scrapped, and that all seven aspects of processes are adjusted and restored to
work within tolerances.
 Quality assurance includes activities to evaluate and improve processes, re-
engineer work to eliminate unnecessary processes or steps, ensure effective
communication and mutual understanding throughout the SIPOC chain, and
auditing and review to ensure all processes are maintained to standard and
improved.
 Delivering quality means carrying the SIPOC chain all the way through to the
customer’s receipt of the product or service, to the customer’s perception that he
or she has indeed received value and quality in the product, service, and contact
with the company.
Defining Quality: Requirements Elicitation

Here are some excellent practices for obtaining good requirements:
 Define your goal clearly at the start. Are you seeking to define a new product?
Are you seeking to learn about what your customers do and don’t like about your
current product? Are you seeking to compare customer opinions of your product
or service and your competitors’? Are you seeking to determine what specific
changes to your product or service the customers most want?
 Make it interactive. We learn more by letting customers try out or taste or play
with a sample or prototype than we do by asking questions. We want the
customers focused on the product, not on us. If a prototype or sample isn’t
possible, then we should use pictures, charts, and diagrams.
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 Record everything. If possible, videotape or audiotape the sessions. If not, have

two note takers so you lose as little as possible.
 Use industry best practices, such as focus groups and structure requirements
elicitation methods.
 Study your results. Don’t just gather a lot of data and ignore it. Put it all together
and learn what you need to know. Quality Management Demystified will help with
many analytic tools, the most important of which is plan, do, and check, act
(PDCA).
 Check and test your results. If you have a limited set of customers, or customer
representatives (such as a marketing department), have them check and improve
what you come up with from the sessions before it goes final. Otherwise, use
multiple methods, such as a survey, a focus group, and a limited pilot product
launch before you go into full production. After eliciting requirements, we will
need to organize them into a clear, useful requirements specification. The best
description one notice is found for what makes a good requirements document is
from the Institute of Electrical and Electronic Engineers, in their Standard 830-
1993, “IEEE Recommended Practice for Software Requirements Specifications,”
summarized here in Table.
Characteristic Description
Complete Nothing is missing, all attributes relevant to customer satisfaction are
Included, defined, and given tolerances.
Consistent The specification contains no internal contradictions.
Correct The specification accurately reflects customers’ and stakeholders’
wants
And needs.
Feasible Delivering to the specification is possible with technology that is
Available, can be obtained, or can be developed. Delivering to the
specification is possible within time, cost, and Other constraints.
Modifiable The specification is designed so that future changes can be made in a
defined, practical, traceable way.
Necessary Each requirement adds value for the customer.
Prioritized Requirements are ranked as to how essential it is to include each in the
book. A group at the top may be listed as required, and then optional
ones listed below that, in priority order.
Testable Each requirement must be defined in a way that will allow for one or
more tests of either process or product that will ensure conformance
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and detect error.

Traceable Each element is uniquely identified so that its origin and purpose can
be traced to ensure that it is necessary, appropriate, and accurate. This
usually means assigning a number or code to each requirement that
doesn’t change, and then adding codes to indicate changes to a
requirement and giving each new requirement its own code or number.
Unambiguous Each requirement has only one possible interpretation.

1. In quality management, the __________________effort to benefits varies greatly
2. What carries the flow of work in a company? __________
3. Quality definition comes before the definition of ___________
4. _______________in the broad sense including all forms of checking ensures that
outputs and processes meet requirements
5. Customers try out or taste or play with a __________________than we do by
asking questions
9.3 Planning for Quality

Quality planning includes all of the work we do to organize and layout a plan for all five
stages of our quality work. Some of it begins even before we define product quality
through requirements elicitation. After we have the requirements specification, we do a
lot more quality planning. We define all of the reviews, inspections, and tests. We define
our approach to QA, QC, rework and scrapping, process improvement, and delivering
customer delight. Of course, we may have standard practices we always use, in which
case we adapt them for this particular project, service, or product. We also need to make
sure that our practices are up to date, conforming to current versions of relevant
standards and regulations. And we may want to research best practices, as well.
Quality planning doesn’t end there. As we develop and deliver the product, we can use
any information obtained about quality and quality management from any process to
improve the way we do quality work. When we do, that will require additional planning.
For example, suppose a team member suggests a way that we can sell items that were
being scrapped to a different, less demanding market. In that case, we need to do lots of
planning work: We define the new market, see if it is really viable, and then define tests
for the scrap to make sure they meet the lower requirements of that market. When we
make use of what we learn as we go by feeding that knowledge into ongoing quality
planning and then implementing those plans, we accelerate the continuous improvement
cycle and add value for the company.
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Checking: Quality Control and Inspection

Under the broad term checking, it includes all of what was classically called inspection
as well as statistical quality control. The two have a lot in common. Both have the goal of
conformance to specifications. Both require clear specification of each attribute, so it is
definable and subject to a process that determines if the result matches the requirement
or falls within tolerances. Both can use review of documents, inspection of attributes, or
testing of components as the method by which information is gathered. The results of
both lead directly to a choice of allowing the error through, rework with retesting, or
scrapping. Both also feed information back into the control of the manufacturing process,
so that future, similar problems can be prevented by bringing the process under control,
and by performing root cause analysis and applying a permanent preventative solution.
Clarifying Ideas about Inspection

In some circles, inspection has gotten a bad name. This is a result of misunderstandings
of things that a number of quality gurus, including W. Edwards Deming, have said.
Deming did say, “Quality comes not from inspection, but from improvement of the
process,” and “The old way: Inspect bad quality out; the new way: Build good quality in.”
Unfortunately, although he also said, “eliminate slogans,” people have turned his
comments about inspection into a slogan, and then misunderstood and misapplied it.
Deming’s point was not that we should stop performing inspections. It was that we
should use the information from inspections to do more than just move the one product
into the scrap pile or rework line. We should use information from inspection to improve
the way we do things so that we can build quality in. Inspection is essential to Deming’s
Total Quality Management because, by detecting errors, we gather information for the
root cause analysis that will allow us to eliminate them.
The second confusion about inspection is that some people discourage it because they
think it has been replaced by statistical quality control. It has, but only in very limited
circumstances. We can only apply statistical methods when we have large quantities of
identical components or products—generally tens of thousands or more—and we can
make precise measurements to match against specifications and tolerances. As a result,
statistical quality control is effectively limited to manufacturing, automated services, and
some very high-volume service industries.
Elsewhere, we must rely on inspection. The third misunderstanding regarding inspection

is that some people think that inspection implies inspection by people, by human beings,
rather than by machines. There are limits to the effectiveness of inspection by human
beings. However, we are now finding ways to develop computer-controlled sensors and
robotic devices that perform inspections. In electronics manufacturing, for instance, there
are robots that can manipulate a circuit board and test every circuit on every board, so
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that inspection is once again replacing statistical quality control. While human inspection
cannot eliminate all errors, automated or robotic inspection is part of the wave of the
future.
Quality Assurance
Quality assurance (QA) developed in North America while TQM was developing in
Japan. QA focused on solving quality problems, rather than living with rework and
scrapping. The major difference between QA and TQM is that QA was usually performed
at an engineering or management level with little executive support. Also, QA tended to
gather information by auditing after the fact, which meant that it didn’t bring in rapid
benefits the way that methods that focus on the earliest parts of the process can. QA
focused on production the ratio of 10 in the 1:10:100 rules more than on planning and
requirements definition, where there is more to be gained. Nonetheless, QA does offer
some distinct and useful ideas:
• Product re-engineering. This is where we examine failure points of the product, and
then redesign it to have fewer failure points. For example, if solder joints often fail in
testing or too soon after delivery to the customer, we might design the product to have
fewer parts so that there are fewer solder joints, or we might use a different method for
joining parts.
• Process re-engineering. This is where we find better ways to do the work, reducing
errors.
• Evaluation of customer satisfaction and customer service information. QC only

had information from inside the factory. QA gathered information from customers,
service companies, and the company’s own repairmen, and used that to identify
problems.
• Communication across departments. QA experts saw that many quality problems

happened when there was an unclear definition of requirements across departments. If
your output is somebody input, but they never talk to one another, will have quality
problems.
• Communication with vendors. Similarly, bringing internal and vendor engineers and
managers together to resolve quality problems across the supply chain were a part of
QA. QA offered many good ideas and added value, but did not produce the
transformative results that TQM did. There were two reasons for this, which refers to “too
little” and “too late.” By too little, It means that QA had too little clout. Engineers and
some managers saw its value, but they were unable to convince upper management.
(Deming saw this problem, but was unable to solve it in the United States) As a result,
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when productivity demands increased, people working on QA were told to “quit talking
and get back to work.” QA was actively discouraged for another reason, as well. Until the
difficult economic times of the 1970s, Henry Ford’s methods were unchallenged in North
America. The assembly line focused on productivity and efficiency, not on quality.
Worse, shops were run by Theory Y managers, and workers were assumed to be
slackers. Disrespected workers built strong unions that were very ready to strike.
In this environment of conflict, the quiet voice of the QA engineers and managers who
saw a better way a way of cooperative improvement was lost. By too late, means that
QA focused primarily on audits and defective products, and did not reach the realization
of the implications of the 1:10:100 rules as quickly as TQM did. In spite of these
limitations, QA, when supported and sustained, can add real value to an organization.
These days, much of what the originators of QA developed is now included in quality
planning and internal auditing. Also, teams have been consolidated and terms confused,
so that knowing QA groups that do QC and QC groups that do QA. Nonetheless, we
should be sure to include processes of communication, assurance that we are using
best practices and the focus on quality improvement that QA brought to the world of
business.

1. Quality planning includes all of the work to organize and layout a plan for all five
stages of our quality work
2. Under the broad term checking, it includes all of what was classically called
inspection but not statistical quality control
3. Deming said, “Quality comes not from inspection, but from improvement of the
process.”
4. QC only had information from inside and outside the factory
5. Quality Assurance, when supported and sustained, can add real value to an
organization
9.4 Leading Your Team to Quality

A quality team is a good team of good people. Upgrading the group of people you work
with now to a quality team will almost certainly require change. If you already have a
quality team, then change is still essential, because quality teams either follow the path
of continuous improvement, or they stagnate. In fact, one of the saddest and most
difficult business situations one could realize was in a company dedicated to TQM. But
after TQM was achieved, senior management slipped on the education effort and in
leadership. The result was a bunch of people surrounded by slogans, thinking that they
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were in a TQM company, feeling that TQM was a disaster or a joke, and not knowing
how to work together to achieve quality. A team is shaped by its leader. If you’re going to
lead a quality team, you’re going to have to get yourself into shape.
Learning leadership skills self awareness, self-control, listening, empathy, and the ability
to provide guidance are essential steps for you. As you learn these skills, you can model
them for your team, and the team can learn and grow together. Looking at it another
way, a leader is simply a person who has followers. But to lead them in the right
direction, we, as leaders, must be going in the right direction. If the right direction is
greater ability to define and deliver quality, then we must cultivate these abilities within
ourselves, and cultivate our ability to communicate them to others. When we do this, we
become able to improve the quality of our company’s most important asset its people. At
the same time, followers make a leader. People willing and able to do good work and
also willing to learn, take direction, and grow make a team and its leader successful. We
need to find such people and, even more importantly, help each person become a highly
professional worker and team member. What do you mean by a good team of good
people?
 Each person is good at what he or she does, and capable of getting better.
 Each person is effective at communicating listening and expression about the job
and about quality.
 The team leader is an effective self-manager who can grow and wants to grow.
 The team leader has an understanding of the surrounding environment and can
offer a vision to the team or help the team create a vision, and then lead the team
in the right direction.
 The team has effective methods of meeting and communicating to define status,
do planning, brainstorm problems, and clear the air.
 The team has the skills it needs to do the job, or can close gaps by learning and
hiring. Is it really possible to take the team we have, and turn it into a quality
team? The answer is yes, sometimes. It is possible, but it is not easy. And not
everyone is up to the task.
We can learn the qualities of leadership so that we can lead our team on the path of
becoming a quality team. Here are some best practices:
 Start where we are. Self-acceptance and acceptance of others, without blame, is
essential.
 Set clear, attainable goals. Vague slogans and extreme commitments don’t work.
Setting a clear goal and taking at least one small step towards it every day
works.
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 Define and practice your values. Human memory and focus are valuable and
trainable. Experts have written a personal vision, mission, and values statement,
and one need try and read it every day. When you do, it works. You will see
yourself becoming more patient, clearer, and more productive.
 In managing, use a coaching style. The coaching style of management is most
compatible with Theory Y—where we believe that your team members want to do
good work—and support them.
 Gain power from genuine qualities. Genuine presence and listening, caring about
your team while also caring about good work, gains you respect and is positively
infectious. We can build on this through effective reward systems of small
rewards for clearly defined goals. Referential power can be gained by knowing
that quality management works and guiding the team to learn what you know.
 Find best practice resources about leadership, coaching, and professional
development. Most of them are either adaptations of TQM to self improvement.
Others apply best practices such as Stephen Covey’s Seven Habits of Highly
Effective People and Emotional Intelligence for Business. When we are willing to
be the first to change, we can rightly ask others to change along with us. In
creating quality teams, we see how many people who, though they seem at first
to be utterly unable or unwilling to change, become able and willing to change
when given clear direction and a supportive environment. Joining together to
become a good team of good people is one of the most rewarding experiences in
professional life. It is also darned well for our careers and for the bottom line.
Become known as a problem solver leading a team that gets the job done, and
see where you go from there! Here are the crucial elements in developing a
quality team:
 Quality and Job Definition

 Focus on Quality
 Coaching Individuals to Excel
 Creating a Quality Team
Let’s look at each of these in turn.
Quality and Job definition

The bottom line is people can’t do a good job if they don’t know what they’re supposed
to be doing. W. Edwards Deming, a founder of TQM, put it this way, “It is totally
impossible for anybody or for any group to perform outside a stable system—
Management’s job, as we have seen, is to try to stabilize systems. An unstable system is
a bad mark against management.” (Walton, The Deming Management Method) Are you
giving your team a stable system? In a quality team environment:
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 Each team member knows what his or her job is, and isn’t.
 We all know who prepares our inputs for each task, who we deliver our outputs
to, and what their requirements are.
 We all know how our job affects the customer and the bottom line.
 We know what work we will be doing each day and each week, unless something
unexpected happens. Unexpected events do happen, but, when they do, we see
that we genuinely couldn’t have known about them sooner, and couldn’t have
prevented them.
 We have effective, structured meetings weekly or more often to check status,
plan future work, clear the air, and make suggestions for how to work smarter. As
team manager, it is your job to put all of this in place with your team. You need to
make sure it happens, and they need as much empowerment in defining their
own jobs as they are ready for, but not so much that they get lost at sea.
Building a Quality Team

Here are crucial things to keep in mind when building a quality team:
 Define roles and workflow. Map workflow using the IPO method.
 As much as possible, let the team split up the work the way they want to. Once
all the tasks are defined in the workflow, meet with the team to decide who will do
each job. As long as each task gets done, and each person commits to doing his
tasks well, that is enough for you.
 Let each team member define his or her inputs, and their quality requirements.
Then transfer these requirements to be the outputs of the preceding tasks.
 Let each team member decide how to do his or her own work. This empowers
workers and eliminates micromanagement.
 Turn the roles into job descriptions. Always keep up-to-date job descriptions on
file.
 Fill the gaps. If a task can’t be done by the current team, then either provide
training or retain new staff or outside services.
 Define improvement goals with each team member. Provide small, frequent
incentives or rewards for improvements that link to customer delight and
improvement in the company’s bottom line.
 Build teams to set standards and solve problems. Additional jobs such as
discovering relevant external standards, benchmarks, and best practices, or
solving specific technical problems, should be assigned to teams perhaps just
teams of two who use PDCA to come up with a solution by a specific, reasonable
date. In a small company or department, it is fine if people are on several part-
time improvement teams. Early on, you can guide the teams. Later, your
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improvement teams will become self-managing. Lead your team in building a

defined, stable work environment that fosters elimination of more and more
errors as time goes on.
Focus on Quality
We don’t usually think of attention or awareness as a business skill. But how often do we
want to say to a team member, “Pay attention!” Attention to work, and also attention to
our moods and reactions is a skill we can learn and practice. Creating a team that
believes they can improve requires cultivating this skill in ourselves and in everyone on
our team. How do we cultivate the skill? The first step is to make an environment free of
personal criticism, so that people feel safe paying attention, expressing that they care
about work, and suggesting improvements. The next step is to help the whole team
understand the benefits of quality work for everyone. We’ve already discussed the
benefits for the customer and the bottom line. What are the benefits for the employees?
Quality Guru Philip B. Crosby talks about creating hassle-free businesses. If we define
requirements clearly, then we create a situation where, as much as possible, people
know exactly what they are supposed to do and when they are supposed to do it.
Everyone receives high-quality inputs, does their job well, and passes on their outputs,
contributing to success. And we know that there are no time-wasting dead-end activities
that don’t deliver value. It does not mean painting a picture of a perfect world; it is only a
description of a well-managed business that cannot only execute plans but can also
handle contingencies. There will be changes to specifications. There will be urgent
requests. How many? That depends on the nature of your business, particularly on what
is not under your control. If you work in a high-pressure industry where your customers
want you to respond to urgent requests, there will be lots of stuff flying at your team. If
you work in a stable industry or on a long project, there will be less. What will be nearly
eliminated is the unnecessary hassles, interruptions, and changes. You and your team
can do this by first setting up a stable environment, then using root cause analysis and
permanent preventative actions to improve problem areas.

1. Once established quality teams either follow the path of continuous improvement,
or _______________
2. A good team of good people is one, with each person is good at what he or she
does, and _______________________
3. Quality Guru Philip B. Crosby talks about creating _____________businesses.
4. To Build a Quality Team, Define roles and ______________
5. ________________and also attention to our moods and reactions is a skill we
can learn and practice.
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9.5 Coaching Individuals to Excel

In delivering quality, nothing can replace each person’s attention to work and desire to
do good work. It also helps if individuals are more self-managed, taking responsibility for
completing work on time to specification. Although specifications are precise, the way we
work with each individual must be unique. The coaching approach to management
proven to be the most effective—involves sensitivity to individual differences. And some
of the strongest differences come up around how to talk to someone about a mistake he
or she has made. Some people handle news of a mistake in a matter-of-fact way and
take care of it; others need a lot of support and care. It is your job to do it the right way
with each person. Be proactive. Set up a good working relationship with each team
member before you need to work out problems. Help the person get excited about
continuous improvement, and then make it specific, defining clearly and specifically
where they are now, and agreeing on what improvements they can make in a specific
period of time one or three or six months that are beneficial to the company. In this
context, it is easier to bring up specific errors and even repeating problems. For some
people, we need to ask how the person feels; for others, we should avoid this, and let
them volunteer their feelings only if they want to. But we should always be specific and
clear about the problem and the importance of a solution by a specific date. Vagueness
doesn’t help anyone solve problems, no matter what their personality. Realistic optimism
has been shown to be the most effective for motivating people.
Creating a Quality Team

 Have the teams agree: Don’t criticize anyone for being human. If we all make
errors, why should anyone receive personal criticism for doing what we all do
sometimes?
 We each strive to do good work, and that includes talking about and preventing
error. This creates a constructive team environment for quality management.
 Better the error is found by the team than by the customer. We set our ego aside
to let the team check, review, inspect, and test.
 Best if we can fix our own errors. When feasible, the team shows the error to the
original worker, who fixes it.
 Prevent future errors: Fix the process as a team. The team can see each error
as a chance for continuous improvement through PDCA.
When a team is on the path of continuous improvement together, synergy arises.

Synergy is the quality of people being able to do more together than we could do
separately. A hassle-free work environment makes room for synergy. One thing that
helps synergy appear it always appears as a gift, we can’t force it is customer service on
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the team. When we realize that our outputs are inputs for someone else, and we strive to
do good work so that the next person can focus on his or her job, instead of running into
a hassle getting what he or she needs, that is customer service on the team. With a well-
designed workflow and customer service on the team, each person sees how he or she
is a valuable part of the team, and how each task adds value for the customer or the
company. Through the workflow, everyone is connected to the customer. In this
environment, people can take genuine pride in their work and appreciate support from
the team even when that support means hearing about their mistakes. The sound of a
quality team at work is often silent focus punctuated by expressions of joy.
What is the Enterprise Decision Making Approach?

Every Enterprise deal with their own solution space or the solution space inherited from
client and market research or the combination of both, to get the reliable and robust ,
optimal and requirement specific solution. But, these solution space itself create conflict
some spare. Some time, it leads to the different way of solution, sometimes; it leads to
believe different axioms for the same fact. Even some times, it happens that mentioned
rule not seems to be valid for certain perspectives.
In this case, to get the optimal solution path with low risk, high assurance and good
opportunities; people needs the optimal and clear knowledge of Decision Making. When
this process of Decision Making happens inside the organization, it’s then not being so
easy to take a hand hold decision. Several perspectives from solution, space and
environment, as well as from problem space needs to be considered, and some time
needs to be ignored. The aspects are may be clients’/market need, minimal requirement,
clients’ environment and believes, people inside the organization and outside the
organization, organization policies, work culture, resources and obviously time
management and a lots. From these scenarios the Enterprise Decision Making
Approach can be defined as:
Enterprise Decision Making

Can be regarded as an outcome of mental processes (cognitive process) leading to the
selection of a course of action among several alternatives Considering organization,
Market and People perspectives. Every decision making process produces a final choice
the output can be an action or an opinion.”
But, some time depending on situations some aspects may not be considered or some
aspects may be born which even play a key role at the time of Decision Making.
Following fig. shows the Para diagram of a Enterprise Decision Making System.
Time Market & Financial Risk Factor

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Sikkim Manipal University Management Management Page No. 165
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Requirements
High Assurance
Policies &
workculture 1. Psychological Decision
2. Cognitive Decision Optimal
3. Normative Decision
Solution
4. Logical Decision
Environment
5. Conceptual Decision
6. Informal Logic base Decision Policies &
7. Cost Benefit Analysis workculture
8. Decision Tree
Resources 9. Decision Table
10. Critical Decision Making Environment
(Financial &
others)
Decision Making Processes Resources

Client/Market (Financial &
Side Processed others
Resultant Decision

1. The coaching approach to management proven to be the most effective—involves
sensitivity to individual differences
2. Synergy is the quality of people being able to do less together than we could do
separately.
3. Realistic optimism has been shown to be the most effective for motivating people
4. The sound of a quality team at work is often silent focus punctuated by expressions of
anger
5. Enterprise Decision Making can be regarded as an outcome of mental processes
(cognitive process)
9.6 Summary
To those who want to reduce quality management entirely to a science, applying
statistics and achieving ever higher and higher levels of Sigma, quote Shakespeare:
“There are more things in heaven and earth, Horatio, than are dreamt of in your
philosophy.” Just as Smeaton for all his good engineering made a stronger lighthouse
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by imitating the shape of an oak tree, without knowing why it would work, so we must
realize that each person’s contribution to the quality team definable and measurable, or
not is essential to success. Normative aspects refers to How should we act in a given
decision situation? In what way should our decisions be structured and constrained so
that we eventually make decisions in a consistent manner? Considerable aspects is
discussed to compare the “should” (normative analysis) with the “do” (descriptive
aspect). The normative aspect often refers to the question of rational decision making,
that is, how we should act if we wish to behave rational

1. How do you view Quality as Business Perspective?
2. Relate Quality as Process Flow Perspective
3. Discuss main feature of Quality Control and Inspection
4. .Describe Evolution of Quality Assurance
5. ” A quality team is a good team of good people” Substantiate
6. Explain key role of Enterprise Decision Making
SAQ I
1. Ratio of improvement
2. Processes!
3. Processes
4. Quality Control
5. Sample or prototype
SAQ II
1. True
2. False
3. True
4. False
5. True
SAQ III
1. They Stagnate
2. Capable of getting better
3. Hassle-free
4. Work flow
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5. Attention to work
SAQ IV
1. True
2. False
3. True
4. False
5. True

1. Refer Part 9.2
2. Refer Part 9.2.1
3. Refer Part 9.3.1
4. Refer Part 9.3.4
5. Refer Part 9.4
6. Refer 9.5.3
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Unit 10 Emergence Quality Theories
Structure
10.1 Introduction:
Objectives:
10.2 Classical Theory:
10.3 Human relations Theory:
10.4 Relevance to Quality:
10.5 The evolution of Quality Management:
10.7 Summary:
10.9 Answers to SAQ‟s and TQ‟s
10.1 Introduction:
The concepts of Quality have emerged alongside the evolution of management thought.
The formal study of management has emerged as a discipline in its own right only over
the past one hundred years or so. Theoretical and practical development of the
discipline has more or less paralleled the emergence of the major corporations. Prior to
the industrial revolution, the only permanent large scale organizations were the various
churches and the standing armies and navies of the wealthier nations. The majority of
the workforce was agricultural labourers, land owning farmers, craftsmen or
professionals such as doctors and lawyers.
Following the industrial revolution, many agricultural workers moved from the country to
the towns and cities to improve their standard of living, often becoming factory workers.
The increasing size of such organizations and the increasing wealth and desire to
pursue other interests of the factory owners, created the opportunity for the emergence
of professional managers- those whose job it was to oversee and supervise the activities
of the workers on behalf of the owners. The need to manage these large scale
organizations and the drive for additional profitability were the motivations for the
impetus to the study of management.
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The principal early models in organization (or management) theory are the classical,
also known as the traditional or Rational, and the Human relations. These theories are to
some extent the causes of many quality problems, and have been reflected in the
dominant quality models.
Objectives:
1. To be able to trace the beginning of the Quality movement
2. To understand the dimensions of Quality Management
3. To link the business processes to quality improvement effort
4. To understand the differences in the levels of quality approaches
10.2 Classical Theory:

The classical theory model of organization reflects the scientific management approach
developed by Frederick Taylor, the Classical theory of Henri Fayol and Max Weber‟s
Bureaucracy theory. These collectively dominate the mainstream management thinking.
Each of these approaches regards the design of organizations as a technical exercise
and depends upon fragmenting or dissecting an organization into its component parts for
analysis and efficient operation.
The machine approaches to organization arose, as suggested, in the late nineteenth and
early twentieth centuries and may be considered logical extensions of the advances then
being made in machine technology. Machines are in general, designed to perform
specified tasks at known input/ output rates and within specified tolerances; these
management approaches assume that organizations can be similarly designed.
Frederick Taylor‟s Scientific management is based on four key principles: scientific task
design, scientific selection, management-worker cooperation and equal division of work.
Taylor‟s objectives were first, to improve efficiency by increasing output and reducing
„underworking‟. Second, to achieve „standardization‟ of job performance, by dividing
tasks up into small and closely specified sub tasks. Finally, to instill discipline, by
establishing hierarchical authority and introducing system whereby all management‟s
policy decisions could be implemented. Taylor saw the organization as a machine
capable of being specified, designed and controlled by management to achieve a given
purpose. The workmen were viewed as standardizes machine parts, interchangeable
with every other of like design and to be used at the discretion of management. His
approach was later followed by Gilbreth and Gantt, who both attempted to humanize
scientific management, recognizing the need for rest and human needs and dignity.

(1) The Classical theory
A. treats people as machines
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B. Treats machines as people
C. Believes machines can do people‟s work
D. None of the above
10.3 Human relations Theory:

While benefits could, and may still, be obtained from the rational approaches, their lack
of humanity is demonstrated by the difficulties which emerge during their application with
the people involved. The Human Relations Model of organization emerged as a means
of addressing these difficulties and was the first significant challenge to the „machine‟
view.
The „organic‟ or „organism‟ analogy stem from the origins of modern systems thinking in
the biological sciences and attempts to deal with the attainment of survival of the system
or organization rather than the achievement of particular goals. While survival may be
seen as a legitimate goal, it may not sufficiently represent the purpose of the
organization. This organic view first found expression in organizations through what has
become known as the Human Relations Model. This considers that attention must be
paid to the human aspects of organization and gives primacy to the roles, needs and
expectations of the human participants. Particular emphasis is given to issues of
motivation, management style and participation as critical factors.
The „Hawthorne‟ studies of Roethlisberger and Dickson with Elton mayo may be
interpreted as an early systems approach to management. Although they were originally
focused on the application of scientific management principles, their findings led away
from this perspective, and they subsequently recognized the need to capture and
understand the relatedness of all the parts involved. Later work in this field by Maslow
and Herzberg did not accept the systemic perspective. These later developments still
adopt a reductionist and „closed‟ system‟ view of the organization, concentrating on
improving the performance of parts, not wholes, and emphasizing internal rather than
external influences on the organization.
In modern large scale industry, the three persistent problems of management are: 1)
The application of science and technical skill to some material good or product, 2) The
systematic ordering of operations. 3) The organization of team work – that is of
sustained co-operation.
Following Chester Barnard, Mayo saw that the first two of these would operate to make
an industry effective, the third to make it efficient. He considered that application of
science and technical skill and the systematic ordering of operations were attended to,
the first by continuous experiment, the second being already well developed in practice.
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He saw the third element as neglected but necessary if the organization as a whole was
to be successful.
Mayo became involved in the „Hawthorne‟ studies, after they had examined the effects of
changes in the physical environment. Experiments had shown that social and
psychological factors were present, and the studies became focused on these human
issues. Records were kept of every aspect of changes made and their impact, to
establish a systemic view. Further experiments were conducted and followed by formal
interviews, which revealed that many of the particular organizations‟ difficulties related to
emotional rather than rational conditions. Further experiments showed that informal
group pressures had more influence on output and performance than the economic
pressures of the formal organization.
Critical View:
Several assumptions about the world and people seem to underpin the human relations
approaches to organization, some of which represent a major shift in thinking from a
machine view. From the organization design perspective, the influence of the
environment is still largely neglected and there continues to be a focus on improving the
performance of parts rather the whole.
The first major shift and perhaps the most significant, is the assumption that people may
be motivated by rewards from work other than money. This is especially significant in
industrial economies, where ever rising salaries and wages can never be a sustainable
reality. In such circumstance, it makes sense to find that there are other factors which
could motivate people from the work itself.
The second assumption is concerned with the abilities of people. Whereas the machine
view largely assumes limited ability and finite competence, the human relations view
assumes much greater, albeit variable, competence and encourages a greater degree of
autonomy and flexibility. It stresses delegation of decision making and enrichment of
jobs, in direct contrast to the simplification associated with classical theory.

(1) The Human relations Theory
A. Gives importance to the emotions of people
B. Believes that people want to perform well
C. Says that social needs of people affect work
D. All of the above
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10.4 Relevance to Quality:
The Classical and Human relations theories of management have relevance to quality
for a number of reasons. First, they remain the dominate approaches to management in
many cultures and contexts. They retain this dominance because they do have
considerable value and appear to offer simple, fast solutions to management problems
while serving to support the currently powerful groups I the organizations. The second
reason is that many management schools and training organizations do not teach many
of the more contemporary and, arguably, radical ideas, rejecting them in favour of the
traditional approaches.
It must be acknowledged that in a newly developing country where the workforce are
perhaps unfamiliar with the concept of having a job, the highly disciplined and autocratic
styles which fit with the traditional view or organization my offer advantages in the short
term. In more sophisticated contexts, this is unlikely to be the case, and may indeed be
directly damaging to the organization.
A further point which needs to be recognized is the loss of skill and status associated
with the introduction of modern highly productive and factory based methods of working.
For example, when agricultural or craft workers left the land or traditional occupations to
work in factories, their accumulated store of knowledge became redundant. The
progressive deskilling of the workforce particularly associated with increased
specialization and mechanization in factories has served to reinforce this situation.
Previously a worker would have exercised a large share of his or her skill, knowledge
and abilities in the completion of a task. However, a factory style operation requires
much less of these qualities and for this reason much of the pride of the worker in the
jobs has been lost. This may reasonably be considered to be a primary driver of quality
problems in organizations.
While the human relations approach, which emerged in response to the problems
associated with the classical school, may appear to offer the solution, this is not the
case. The human relations view gives priority to the needs of the individuals over the
needs of the organization. In this case, potential exists for the needs of the customers to
be completely ignored in the pursuit of employee satisfaction. Thus it may be considered
more important for employees to go home on time, or take a tea break, than to meet a
customers‟ expectations. Similarly, the organization may develop products and services
which exercise the skills, knowledge and aspirations of its workers rather than fulfilling
customers‟ needs.
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Figure 10.1: Model of Quality Management
Clearly, both these schools of thought offer advantages to the organization. All too often,
these advantages are pursued internally (because they are internally focused) and the
needs of the customer are neglected.

(1) Quality approach
A. arises from the classical theory only
B. Quality approach arises for Human Relations theory only
C. Quality approach is a combination of both
D. None of the above
10.5 The evolution of Quality Management:

Systems for improving and managing quality have evolved rapidly in recent years.
During the last two decades or so, simple inspection activities have been replaced or
supplemented by quality control, quality assurance has been developed and refined and
now most companies are working towards TQM. In this progression, four fairly discrete
stages can be identified: Inspection, Quality Control, Quality Assurance and Total
Quality Management.
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Quality and Processes:
Quality chains can be traced right through the business or service processes used by
any organization. A process is the transformation of a set of inputs into outputs that
satisfy customer needs and expectations, in the form of products, information or
services. Everything we do is a process, so in each area or function of an organization,
there will be many processes taking place. For example, a finance department may be
engaged in budgeting processes, accounting processes, salary and wage processes,
costing processes. Each process in each department or area can be analyzed by an
examination of the inputs and outputs. This will determine some of the actions
necessary to improve quality. There are also cross functional processes.
The output from a process is that which is transferred to somewhere or someone- the
customer. Clearly to produce an output that meets the requirement of the customer, it is
necessary to define, monitor and control the inputs to the process, which in turn may be
supplied as output from an earlier process. At every supplier/ customer interface then,
there resides a transformation process and every single task throughout an organization
must be viewed as a process in this way.
Once we have established that one process capable of meeting the requirements, we
can address the next question, „Do we continue to do the job correctly?‟ which brings a
requirement to monitor the process and the controls on it. If we now re-examine the first
question, “Have we done the job correctly?”, we can see that , if we have been able to
answer the other two question with a yes, we must have done the job correctly. Any
other outcome would be illogical.
By asking the question in the right order, we have moved the need to ask the
“inspection” question and replaced a strategy of detection with one of prevention. This
concentrates all the attention on the front end of any process- the inputs- and changes
the emphasis to making sure the inputs are capable of meeting the requirements of the
process. This is a managerial responsibility and is discharged by efficiently organizing
the inputs, the resources and controlling the processes.
These ideas apply t every transformation process; they all must be subject to the same
scrutiny of the methods, the people, skills, equipment and so on to make sure they are
correct for the job. A person giving a lecture whose audio/video equipment will not focus
correctly or whose teaching materials are not appropriate will soon discover how difficult
it is to provide a lecture that meets the requirements of the audience.
In every organization, there are some very large processes- groups of smaller processes
often called core business processes. These are activities the organization must carry
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out especially well if its mission and objectives are to be achieved. It is crucial if the
management of quality is to be integrated into the strategy of the organization.
The control of quality can only take place at the point of operation or production- where
the letter is word processed, the sales call is made, the patient is admitted, or the
chemical manufactured. The act of inspection is not quality control. When the answer to
„Have we done the job correctly?‟ is given indirectly by answering the questions of
capability and control, then we have assured quality, and the activity of checking
becomes one of quality assurance- making sure that the product or service represents
the output from an effective system to ensure capability and control. It is frequently found
that organizational barriers between functional or departmental empires encouraged the
development of testing and checking of services or products in a vacuum, without
interaction with other departments.
Quality Control then, is the activities and techniques employed to achieve and maintain
the quality of the product, process or service. It includes a monitoring activity but is also
concerned with finding and eliminating causes of quality problems so that the
requirements of the customer are continually met.
Quality Assurance is broadly the prevention of quality problems through planned and
systematic activities (including documentation). These will include the establishment of
good quality management systems and the operation of the system, and the review of
the system itself.
Total Quality management is concerned with moving the focus of control outside the
individual to within, the objective being to make everyone accountable for their own
performance, and to get them committed to attaining quality in a highly motivated
fashion. The assumptions a director or a manager must make in order to move in this
direction are simply that people do not need to be coerced to perform well, and that
people want to achieve, accomplish, influence activity and challenge their abilities, If
there is belief in this, the TQM effort will be successful.
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Figure 10.2: Pillars of Total Quality Management
Total Quality Management is user driven- it cannot be imposed from outside the
organization, as perhaps can a quality management standard or statistical process
control. This means that the ideas for improvement must come from those with
knowledge and experience of the processes, activities and tasks; this has massive
implications for training and follow up. TQM is not a cost cutting or productivity
improvement device in the traditional sense and it must not be used as such. Although
the effects of a successful programme will certainly reduce costs and improve
productivity, TQM is concerned chiefly with changing attitudes and skills so that culture
of the organization becomes one of preventing failure- doing the right things, right first
time, every time.

(1) Quality Inspection
A. Verifies whether the job is done correctly
B. Verifies whether the job has been done as per specifications
C. Verifies whether it fits the customers‟ needs
D. All of the above
10.7 Summary:
The evolution of Quality management concepts have followed the development of
management thought through the last few decades. The rationale for the quality school
of thought has arisen from the industrial revolution and subsequent developments on the
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management theories. Quality management derives its significance from its focus on the
customer and has its effect on the organizational processes.
The concepts of Quality inspection, quality assurance and Total Quality management
have developed due to the progression of management concerns regarding the need for
comprehensive behavioral changes needed in the workplace towards meeting the
customer needs.

(1) How do you trace the development of Management thought?
(2) What does the Classical Theory assume about work and organizations?
(3) How is the Human Relations Theory different from the Classical Theory?
(4) What are organizational Processes and how are they influenced by Quality
thinking?
(5) Differentiate between Quality Inspection, Quality Control, Quality Assurance and
Total Qality management.
SAQ I
(1) A – Treats people as machines
SAQ II
(1) D – All of the above
SAQ III
(1) C – Arises from Both
SAQ IV
(1) D – All of the above
Answers to terminal Questions:

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TQM

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Foundations of Quality Management

Dr. T.V. Narasimha Rao Mr. Pankaj Khanna,

Mr. Ashok Kumar, Mr. Abraham Mathew,

Mr. M.K.N. Prasad, Mr. Sadhana Das

Prof. K.V.M. Varambally Special Invitee

Content Preparation Team

Content Writing Peer Review By

Edition: Spring 2009

Unit 2: Quality Approaches-Economic, Social and Environmental

Unit 3: Quality and Customer Focus

Unit4: Quality as a Problem Solving Concept

Unit 5: Quality as a Cost Concept

Unit 6: Quality in Product Design

Unit 7: Quality as a Knowledge Management Concept

Unit 8: Barriers to Quality

Unit 9: Quality as a Strategic Decision

Unit 10: Emergence Quality Theories

Unit 1 Introduction to Quality Management

1.2 Evolution of quality movement:

Early 20th Century:

Self Assessment Questions: I

Post war scenario

Shingo has challenged the traditional understanding of the production management,

Self Assessment Questions: II

5. JIT (Just – In – Time) concept developed by Taichi Ohno of Toyota has

Another important person who contributed in the evolution of quality is Armand

In 1980, NBC broadcasts a documentary on the success of Japanese companies in

Self Assessment Questions: III

1.3 Companywide Quality

The company-wide quality approach places an emphasis on four aspects:-

It comprises a quality improvement process, which is generic in the sense it can be

Customers recognize that quality is an important attribute in products and services.

Self Assessment Questions: IV

1.4 Understanding Quality:

A. “Quality is physical or non-physical characteristic that constitutes that basic

Self Assessment Questions: V

4 Two types of Customers are : ____________________ & _________________

1.5 Garvin’s Approach to Quality:

Five Approaches to Quality:

Eight Dimensions of Quality:

7. Aesthetics : Subjective assessment of look and feel; reflects the individual

b) Use market research to identify the product characteristics which can be

1.6 Berry’s 10 Dimensions of Service Quality:

1. Reliability : Consistency in Performance and dependability performing the right

9. Understanding the customer: Making the effort to understand the customer

1. Reliability (R): Ability to perform the promised service dependably and

Self Assessment Questions: VI

1.7 Quality Dimensions as per Juran:

a) Features: - Some of the examples are: Performance, reliability, accuracy,

b) Freedom from deficiencies: - Some of the examples are: Defect free

To summarize, the quality is defined by customer. Features and Freedom from

Self Assessment Questions: VII

1.8 Quality Control, Quality Assurance and Quality Management :

Self Assessment Questions: VIII

1.9 Total Quality Management (TQM):

TQM views an organization as a collection of processes. It maintains that organizations

 Commitment by senior management and all employees

Continuous Improvement through TQM

There are three major mechanisms of prevention:

Self Assessment Questions: IX

1.11 Terminal Questions:

1.12 Answers to SAQ’s and TQ’s

Answers to Terminal Questions:

Unit 2 Quality Approaches-Economic,

Quality management concern is to provide quality in every sphere, be it business,

What do we mean by „quality‟ and „quality system‟? Quality is often taken as

“Quality Management can be described as a strategic process of seamlessly integrating

continuous improvement of quality of goods and services”, the objective of quality

Quality approach is to achieve excellence on economical, social and ecological

Quality economical approach is to gain max. return on investment, customer satisfaction,

Quality shall be the essence of existence. As a human being we shall contribute to

2.2 Quality Management Approach

Quality management in every sphere is achievable if:

 To look and observe the process involve for betterment

 To change the process accordingly to meet the required goals

4 Two types of Customers are : ____ & _