After completing this module, you will be able

to:
1. Define quality
2. Explain how to manage a quality management
program in an organization
3. Understand Six Sigma, TQM and other
approaches to Manage Quality
4. Use various Quality Management Tools
5. Participate/Lead quality certification (such as, ISO
9000) efforts in an organization

Concept Demonstrated:
1. Variation (inconsistency) Causes Poor Quality

2. Two Causes of Variability

Chance Causesattributed to the causes inherent in the

system.
Assignable Causes or special causes

Two Causes of Variability

Chance Causes: attributed to the system

The Management is primarily responsible to
control/improve the system

Assignable Causes or special causes

Typically, the front line employees take care of this
category.

Responses can be varied

Two broad perspectives:
Consumers perceptive
Fitness for use
Value
Quality Characteristics

Producers perceptive
Conformance to specification

Products
Performance
Durability
Aesthetics

--Features
--Safety
--Serviceability

--Reliability
--Conformance
--Perception

Service

Time/Timeliness
Courtesy
Accuracy
Responsiveness

--Completeness
--Consistency
--Accessibility/Convenience

A basic business strategy that provides goods

and services that completely satisfy both
internal and external customers by meeting
their implicit and explicit needs (Tennor &
DeToro, 1992)

Deligh
t
Delight

Requirements

Base Expectation
Source: Tenner & DeToro, 1992

Implicit (Absence of
these dissatisfaction)
Explicit (customer
demands explicitly)
Latent/Delight
(customer didnt
demand but is delighted
to have)

Two primary sets of costs are involved in

quality:
control costs
failure costs

Costs broken into four categories:

Prevention costs
Appraisal costs
Internal costs of defects
External costs of defects

Prevention
Planning
Training
Process Control
Maintenance, etc

Quality Cost Classification

Appraisal
Internal Failure
Test
Inspect, etc.

Scrap
Rework
Corrective
Action, etc.

External Failure
Goodwill Loss
Recall
Warranty
Returns
Law suites, etc.

The Good: Prevention

The Bad:

Appraisal and Internal Failure

The Ugly: External Failure

Dr. Shewart began using statistical control

at the Bell Institute in 1930s
Military standards developed in 1950s
After World War II, Japanese Union of
Scientist and Engineers began consulting
with Deming
Deming Prize introduced in Japan in 1951

Quality assurance concept proposed in

1952
Juran makes first trip to Japan in 1954
Quality becomes Japans national slogan
in 1956
First quality circles created in 1957
10,000 quality circles by 1966
100,000 quality circles by 1977
First U.S. quality circle 1974

1980The USA learns about Deming through a

NBC documentaryIf Japan Can, Why Cant We?
1986 Bill Smith of Motorola develops the SixSigma concept
International Organization for Standards (ISO)
published the ISO 9000 series in 1987; later
modified in 2000.
1988Malcolm Baldrige National Quality Award
is instituted
1990sTQM becomes a buzz word
Late 1990sISO 9000/14000 become de facto
requirement for most businesses world-wide.
2000sService Industry/Government/Education
Institutions also embrace Quality Management
(leading ones are Hospital and hospitality
industry)

1. Deming:

Management is responsible for most quality

problems;
advocated use of statistics

2. Juran:

Quality trilogy
Quality planning,
quality control, and
quality improvement

3. Feigenbaum:

Total quality control (TQC/M)

Quality is responsibility of all.

4. Ishikawa: Total company involvement (Fishbone

diagram)
5. Crosby: Quality is free; zero defect; doing the job
right the first time.

Better to produce item right the first time

than to try to inspect quality in
Quality at the source - responsibility shifted
from quality control department to workers
Continuous Improvement
Minor, incremental, everyday improvement (Kaizen)
Break-through improvement

Determine what customers want

Develop products and services
Develop production system
Monitor the system
Include customers and suppliers

 Customer

Focus
Process
Improvement
Total
Involvement

Continuous
Improvement

Customer
Focus

Process
Improvement

Total
Involvement

Leadership
Education and Training
Supportive Structure
Communication
Reward and Recognition
Measurements

The Six Sigma concept was developed by

Bill Smith, a senior engineer at Motorola,
in 1986 as a way to standardize the way
defects were tallied.
Sigma is the Greek symbol used in
statistics to refer to standard deviation
which is a measure of variation.
Adding six to sigma combines a
measure of process performance (sigma)
with the goal of nearly perfect quality.

In the popular book The Six Sigma Way, Six

Sigma is defined as:
a comprehensive and flexible system for

achieving, sustaining and maximizing business

success. Six Sigma is uniquely driven by close
understanding of customer needs, disciplined
use of facts, data, and statistical analysis, and
diligent attention to managing, improving, and
reinventing business processes. (p. xi)

Six Sigma projects generally follow a well

defined process consisting of five phases.
define
measure
analyze
improve
control
pronounced dey-MAY-ihk

The define phase of a DMAIC project

focuses on clearly specifying the problem
or opportunity, what the goals are for the
process improvement project, and what
the scope of the project is. Identifying
who the customer is and their
requirements is also critical given that the
overarching goal for all Six Sigma
projects is improving the organizations
ability to meet the needs of its
customers.

Conformance to specifications
Performance
Quick response
Quick-change expertise
Features
Reliability
Durability
Serviceability
Aesthetics
Perceived quality
Humanity
Value

Definition:
Search for a better way of doing things by
observing others (perhaps the best-in-class
performer)
Continuous search for new ideas, methods,
practices, and procedures (Robert Camp)

Successful organizations have a

systematic, written procedure for
benchmarking:
Rank the functions, activities, and processes that
need to be improved. Focus on high ranked
items; develop a plan for internal/external
benchmarking.
Identify the key cost, time or quality
performance indicators (related to customer
needs)
Identify sources for benchmarking (most difficult
step)

 Measure the performance of the indicators (step 2)

for the potential benchmark sources. Compare
them to your own.
Improve your own process, activities, function to
meet and exceed the best benchmark.

Pitfall

Dont just benchmark within the same

industry; otherwise you will just play catch
up.

A related concept--Reverse Engineering

Carefully dismantling a competitors product to
improve ones own product (not to be confused
with stealing)

Reverse engineering is somewhat simple as it

is product-oriented.
Benchmarking is process oriented and not so
straight forward.

Two key drivers of an organizations longterm competitive success are the extent to
which its new products or services meet
customers needs, and having the
organizational capabilities to develop and
deliver such new products and services.
Tools for helping translate customer desires
directly into product service attributes.

Output Planning Matrix

Customer requirements to Technical
Requirements

Output Specification Matrix

Technical Requirements to Component
Characteristics

Process Planning Matrix

Component Characteristics to Process
Requirements

Process Deployment Matrix

Process Requirements to Process Activities

The measure phase begins with the

identification of the key process
performance metrics.
Once the key process performance
metrics have been specified, related
process and customer data is collected.
Two commonly used process
performance measures, namely, Defects
per Million Opportunities (DPMO) and
Process Sigma.

Earlier it was noted that a literal

interpretation of Six Sigma is 3.4 defects per
million opportunities (DPMO).

How sigma itself can be used to measure the

performance of a process.
One way to measure the performance of a process
is to calculate the number of standard deviations
the customer requirements are from the process
mean or target value.

In this phase the objective is to utilize the

data that has been collected to develop and
test theories related to the root causes of
existing gaps between the process current
performance and its desired performance.

Alfredo Pareto, an Italian economist, noted

concentrated distribution of wealth.
Juran noted: 80% of problems are created by
20% of causes.
These 20% of causes (the vital few) are more
critical than the remaining 80% of causes (the
trivial many).

1.
2.

3.

4.
5.

Categorize problem causes.

Determine how relative importance must
be judged (e.g., Frequency of occurrences,
dollar value).
Rank the categories form most important
to least important.
Compute percentage attributed to each
problem cause.
Plot a bar graph for pictorial
representation.

Problem: Hospital Emergency Admission

Categories

Occurances

Lack of medication
Lack of Parking spaces
Physician not on duty

17
3
2

Lack of Nursing Staff

Bed not available
Lack of registration staff

4
36
8

*Resemblance to any actual situation at any hospital is coincidental .

Categories

Occurances Percentage Cummulative %

Bed not available

Lack of medication
Lack of registration staff
Lack of Nursing Staff
Lack of Parking spaces
Physician not on duty
Sum

36
17
8
4
3
2
70

51.4%
24.3%
11.4%
5.7%
4.3%
2.9%

120.0%
100.0%
80.0%
60.0%
40.0%
20.0%
0.0%

51.4%
75.7%
87.1%
92.9%
97.1%
100.0%

Percentage

Physician

Registration
Staff
Nursing
Staff
Parking
Spaces

Medicatio

Bed

Cummulative
%

Bed not available and Lack of medication

are the two vital problem areas
The rest are trivial many (maybe useful
many).
The hospital must explore these two
problems first.
It should yield biggest bang for the buck.

A structured approach to search for possible

cause(s) of a problem.
A.K.A.Fishbone, Ishikawa, feather, or
enumeration diagram.
Developed through brainstorming.
It organizes the ideas generated during the
brainstorming session (typically).

1.
2.

3.

4.

Identify effect: it is a specific problem

(it can also be a desired goal).
Identify major cause categories: may
use the 6 Ms or other generic
categories. Money, Wo(manpower),
methods, machines, material,
management.
Identify specific minor causes: 5 Ws
and how can help here. Who-whatwhen-where-why-how.
Analysis: determine those causes that
lead to greatest potential benefits.

Example: Bed not available

Environmental Services

Emergency Department

Bed not
Available

Med/Sug Unit

Admitting Process

Example continued
Environmental Services

Emergency Department
High
Volume

Broken Bed Switch

Unclear
responsibilities

Time of Discharge

Admitting Communication

communication

RN not available

Time of day

Multiple Transfers

Communication

Bed Preference
Unit Clerk
Responsibility

Med/Sug Unit

Bed not
Available

Policy

Admitting Process

Time of Discharge

Improve the target process by designing

creative solutions to fix and prevent
problems.
Create innovate solutions using technology
and discipline
Develop and deploy implementation plan
(Source: http://www.isixsigma.com/dictionary/DMAIC-57.htm)

Please watch the process improvement

immediately following this video clip.

Statistical Quality Control

Chance variation is variability built into the

Assignable variation occurs because some

system.

element of the system or some operating

condition is out of control.
Quality control seeks to identify when
assignable variation is present so that
corrective action can be taken.

Inspection for Variables: measuring a

variable that can be scaled such as weight,

length, temperature, and diameter.
Inspection of Attributes: determining the
existence of a characteristic such as
acceptable-defective, timely-late, and
right-wrong.

Developed in 1920s to distinguish between

chance variation in a system and variation
caused by the systems being out of control assignable variation.

Repetitive operation will not produce

exactly the same outputs.
Pattern of variability often described by
normal distribution.
Random samples that fully represent the
population being checked are taken.
Sample data plotted on control charts to
determine if the process is still under
control.

Observation should be spread out on either

side of the center line, representing the 68%,
95% and 99.7% rule.
No perceivable pattern

Flow process charts

Run charts
Cause-and-effect chart
Pareto Analysis
Histogram
Control Chart
Scatter Diagram

SUBJECT: Customer Order fulfillment (Fast food)

Dist (ft) Time (min) Symbol
Description
D Take order
18

D Walk to cup Storage

D Pick right cup
30
D Walk to dispenser
= Operation; = Transport; = Inspect; D = Delay; = Storage

Take Order

Plot of Sample Data Over Time

Sample Value

80
Sample
Value
UCL

60
40

Average

20

LCL

0
1

13
Time

17

21

ML Dispensed

Time (Hours)

Reaction time in Minutes

60
40
Y
20
0
0

10

Medication in mg

15

Billing Errors
Wrong Account
Wrong Amount

A/R Errors
Wrong Account
Wrong Amount

Monday

Malcolm Baldrige Award

Deming Award
ISO 9000

ISO 14000

Establish quality through detailed documentation,

work instructions and recordkeeping.
Process (NOT product) Certification.
ISO= equal or uniform in Greek
Environment management standard

Process Certification (not product)

International Organization for Standards (ISO)
published the ISO 9000 series in 1987
De facto requirement in Europe
Adopted by EC in 1989
US companies are adopting the standard at a
rapid rate now (though resistance and
criticisms are abundant)

Principle 1: Customer focus

Principle 2: Leadership
Principle 3: Involvement of people
Principle 4: Process approach
Principle 5: System approach to management
Principle 6: Continual improvement
Principle 7: Factual approach to decision making
Principle 8: Mutually beneficial supplier
relationships

Understand customer needs and strive to

meet/exceed
Benefits:
Enhanced customer satisfaction, loyalty, and
repeat business

Must:

organization objectives linked to customer needs

and communicated throughout the organization
Measure customer satisfaction and act
Balanced approach to satisfying customers as
well as other stakeholder

Establish unity of purpose and direction

Create environment that encourages people
to become fully committed to organization
goals.
Benefits:

Must:

Motivated people; activates are evaluated, aligned

and implemented in a unified way.
Create challenging goals/targets
Inspire, encourage and recognize peoples
contribution
Establish trust and eliminate fear

Involve everyone fully

Benefits:

Motivated, committed people

Self accountability and eagerness for continual
improvement

Must:

People understand the worth of their contribution

People accept ownership of problems and
responsibility to solve them
People actively enhance their competence
People freely share knowledge and experience

Activities and resources to be managed as a

process
Benefits:
Lower cost, effective use of resources
Improved results

Must:

Establish clear responsibilities

Analyze and measure capabilities of key activities
Focus on resources, methods, and material to
improve key activities

Managing interrelated processes for

effectiveness and efficiency
Benefit:
Integration and alignment of processes will lead
to desired results
Ability to focus on the key processes

Must
Functional integration (local vs. global
optimization)
Must understand interdependencies between
processes

It is a never-ending process
Benefits:

Improved capabilities
Flexibility to react quickly
Improved value to the customer

Must:

Use organization-wide approach to continual

improvement
Continual improvement of product, process and
systemeveryones responsibility
Provide training and tools of continuous
improvement

Effective decisions are based on data and

information
Benefits:

Better and informed decision

Increased ability to review, challenge and change
opinions and decisions

Must:

Accurate/reliable data and information is

maintained
Valid data analysis methods are used.
Balance between factual analysis and
experience/intuition.

Organization and its suppliers are

interdependent and can together create
value
Benefits:

Flexibility and speed to handle changing

customer needs
Cost optimization (price-minus rather than costplus pricing)

Must:

Carefully select key supplier; long-term

relationship
Sharing mutual information
Partnership rather than we vs. them.

Management
Responsibility
Measurement
Analysis &
Improvement

Resource
Management
Product/
Service
Realization

Outp
ut