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1439813809Quality ManagementС

1439813809Quality ManagementС

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Quality

Management
Theory and Application
PETER D. MAUCH
© 2010 by Taylor and Francis Group, LLC
CRC Press
Taylor & Francis Group
6000 Broken Sound Parkway NW, Suite 300
Boca Raton, FL 33487-2742
© 2010 by Taylor and Francis Group, LLC
CRC Press is an imprint of Taylor & Francis Group, an Informa business
No claim to original U.S. Government works
Printed in the United States of America on acid-free paper
10 9 8 7 6 5 4 3 2 1
International Standard Book Number: 978-1-4398-1380-5 (Hardback)
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have been made to publish reliable data and information, but the author and publisher cannot assume
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Trademark Notice: Product or corporate names may be trademarks or registered trademarks, and are
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Library of Congress Cataloging-in-Publication Data
Mauch, Peter D., 1954-
Quality management : theory and application / Peter D. Mauch.
p. cm.
Includes bibliographical references and index.
ISBN 978-1-4398-1380-5 (hardcover : alk. paper)
1. Total quality management. 2. Quality control. I. Title.
HD62.15.M377 2009
658.4’013--dc22 2009042044
Visit the Taylor & Francis Web site at
http://www.taylorandfrancis.com
and the CRC Press Web site at
http://www.crcpress.com
© 2010 by Taylor and Francis Group, LLC
v
Dedication
Tis book is dedicated to those quality professionals, past, present, and
future, who seek to advance the quality sciences through traditional
education and scientifc research. Tis book is also dedicated to my
close friends and family members, who gave and did not take, built
and did not destroy. Especially to my wife Julie, who believed in me.
© 2010 by Taylor and Francis Group, LLC
vii
Epigraph
The Thinker
Back of the beating hammer
By which the steel is wrought,
Back of the workshop’s clamor
Te seeker may fnd the Tought—
Te Tought that is ever master
Of iron and steam and steel,
Tat rises above disaster
And tramples it under heel!
Te drudge may fret and tinker
Or labor with lusty blows,
But back of him stands the Tinker,
Te clear-eyed man who knows;
For into each plow or saber,
Each piece and part and whole,
Must go the Brains of Labor,
Which gives the work a soul!
Back of the motors humming,
Back of the belts that sing,
Back of the hammers drumming,
Back of the cranes that swing,
Tere is the eye which scans them
Watching through stress and strain,
Tere is the Mind which plans them—
Back of the brawn, the Brain!
Might of the roaring boiler,
Force of the engine’s thrust,
Strength of the sweating toiler—
Greatly in these we trust.
But back of them stands the Schemer,
Te thinker who drives things through;
Back of the Job—the Dreamer
Who’s making the dreams come true!
Berton Braley
© 2010 by Taylor and Francis Group, LLC
ix
Contents
List of Figures .....................................................................................xvii
List of Tables ........................................................................................ xix
Preface .................................................................................................. xxi
1 Chapter Organizing for Quality ...................................................... 1
Objectives .....................................................................................1
Terminology .................................................................................1
Introduction .................................................................................2
Categorizing Duties ....................................................................2
Leadership ................................................................................3
Product or Service Producing ...............................................3
Support .....................................................................................4
Incongruence ...........................................................................4
Breaking Categories into Classifcations ..................................5
Leadership Classifcations .....................................................5
Product- or Service-Producing Classifcations...................5
Support Classifcations ..........................................................6
Basic Functional Structure .........................................................6
Quality Function Considerations .........................................7
Authority, Accountability, and Responsibility ........................8
Authority Principles ....................................................................9
Revise and Adjust ........................................................................9
Communication .........................................................................10
Summary ....................................................................................10
Review Questions ......................................................................10
2 Chapter Planning for Quality ........................................................ 13
Objectives ...................................................................................13
Terminology ...............................................................................13
Introduction ...............................................................................14
Business Quality Planning .......................................................15
Elements of an Efective Quality System ...........................15
© 2010 by Taylor and Francis Group, LLC
x  •  Contents
Marketing ..............................................................................15
Setting Objectives .................................................................15
Long- and Short-Range Objectives ....................................17
Setting Business Metrics...........................................................19
Process Quality Planning .........................................................19
General Information ........................................................... 20
Details ................................................................................... 20
Failure Modes ........................................................................21
Control ...................................................................................22
Project Planning ........................................................................24
General Information ............................................................24
Status Reporting ...................................................................26
Detail ......................................................................................26
Product Quality Planning ........................................................26
General Information ............................................................26
Detail ......................................................................................27
Product Verifcation and Validation Planning ..................... 28
Responsibility and Interfaces ............................................. 28
Information Accessibility ................................................... 28
Files and Records ..................................................................29
Validation Facilities ..............................................................29
Validation Personnel ........................................................... 30
Validation Procedures ......................................................... 30
Scheduling and Revising Validation Plans ...................... 30
Policies, Procedures, and Objectives ..................................... 30
Policies ....................................................................................31
Procedures and Rules ...........................................................32
Forms and Records ....................................................................32
Blueprints (Product Specifcations) ........................................33
Process Flowcharting ................................................................33
Standardization of Symbols ................................................35
Normal Logic Flow ...............................................................35
Process Flow ..........................................................................35
Communication .........................................................................36
Summary ....................................................................................36
Review Questions ......................................................................37
© 2010 by Taylor and Francis Group, LLC
Contents  •  xi
3 Chapter Controlling for Quality.................................................... 39
Objectives ...................................................................................39
Terminology ...............................................................................39
Introduction .............................................................................. 40
Long-Range Objectives ....................................................... 40
Short-Range Objectives ....................................................... 40
A Cascade Approach ............................................................41
Concerns of Control .............................................................41
Written Reports ................................................................... 42
Preparing Reports ................................................................ 42
Correcting for Deviations................................................... 42
Importance of Value ............................................................ 42
Basic Concepts .......................................................................... 43
Organizational Responsibility ................................................ 43
Te Role of Quality Management ...........................................45
Introduction to Quality-Reporting Basics .............................45
Te Business Quality Report .................................................. 46
Underlying Concepts ............................................................... 48
Activity Reporting .....................................................................49
Journalizing Procedure.............................................................51
Posting ....................................................................................... 54
Product Performance Reporting .............................................55
Analysis ...................................................................................... 56
Ranked Order Analysis ....................................................... 56
Fishbone Diagram ................................................................57
Controlling Nonconformance Identifcation ........................58
Identifcation during Work .................................................58
Completion of Work .............................................................58
Inspection ..............................................................................58
Identifcation of Nonconforming Product ........................58
Segregation .................................................................................58
Short-Run Production ..........................................................58
Long-Run Production ..........................................................59
Risk .........................................................................................59
Disposition .................................................................................59
Responsibilities for Disposition ..........................................59
© 2010 by Taylor and Francis Group, LLC
xii  •  Contents
Corrective and Preventive Action (CAPA) Methodology .. 60
Immediate Action Required .............................................. 60
Magnitude of the Nonconformity ..................................... 60
CAPA Methodology ............................................................ 60
Summary ....................................................................................61
Review Questions ......................................................................62
4 Chapter Staffing for Quality .......................................................... 63
Objectives ...................................................................................63
Terminology ...............................................................................63
Forecasting Human Resources Needs ................................... 64
Job Descriptions.........................................................................67
Job Analysis ...........................................................................67
Methods ............................................................................ 68
Results ................................................................................69
Position Requirement ...........................................................69
Education and Training ............................................................70
Systems of Formal Education ..............................................70
Primary Education ..........................................................70
Secondary Education .......................................................71
Higher Education .............................................................71
Adult Education ...............................................................72
Alternative Education .....................................................72
Training ......................................................................................73
Training Records ..................................................................74
Summary ....................................................................................76
Review Questions ......................................................................76
5 Chapter Motivating for Quality ..................................................... 77
Objectives ...................................................................................77
Terminology ...............................................................................77
Lead, Coach, and Guide ...........................................................78
Leadership Styles ..................................................................81
Autocratic ..........................................................................81
Paternalistic ......................................................................81
Democratic........................................................................82
© 2010 by Taylor and Francis Group, LLC
Contents  •  xiii
Laissez-Faire .....................................................................82
Rewards Based upon Performance .........................................82
Praise and Censure Fairly ........................................................83
Performance Appraisals ......................................................83
Provide a Motivating Environment ........................................85
Defciency Needs ..................................................................85
Physiological Needs ..............................................................85
Safety Needs ......................................................................... 86
Social Needs...........................................................................87
Esteem Needs ........................................................................87
Self-Actualization ................................................................ 88
Summary ................................................................................... 90
Review Questions ......................................................................91
6 Chapter Special Topics in Quality ................................................. 93
Overview of Statistical Methods .............................................93
History....................................................................................93
Overview ................................................................................94
Statistical Methods ...............................................................95
Experimental and Observational Studies .....................95
Levels of Measurement ....................................................97
History of SPC .....................................................................102
General .................................................................................102
Risk Analysis ............................................................................106
Risk Analysis and the Risk Workshop ............................107
Facilitated Risk Analysis Process .....................................109
Reliability Engineering ...........................................................110
Reliability Teory ...............................................................110
Reliability Program Plan ................................................... 111
Reliability Requirements ................................................... 111
System Reliability Parameters ......................................112
Reliability Modeling ...........................................................112
Reliability Test Requirements ...........................................113
Requirements for Reliability Tasks .................................. 114
Design for Reliability .........................................................115
Fault Tree Diagrams ...........................................................115
Reliability Testing ............................................................... 116
© 2010 by Taylor and Francis Group, LLC
xiv  •  Contents
A Reliability Sequential Test Plan ................................ 116
Accelerated Testing............................................................. 118
Sofware Reliability ............................................................ 118
Reliability Operational Assessment ................................ 120
Reliability Organizations ...................................................121
Certifcation ....................................................................121
Reliability Engineering Education .................................. 122
Systems Analysis ..................................................................... 122
Characterization of Systems ............................................. 122
LTI Systems ..........................................................................125
Auditing ....................................................................................125
Audit Planning and Scheduling ...................................... 126
Auditor Education and Training ................................ 126
Audit Initiation ............................................................. 126
Audit Scope .................................................................... 126
Audit Objective ............................................................. 126
Frequency and Timing ................................................. 128
Long-Term Planning..................................................... 128
Pre-Audit Review of System ........................................ 128
Working Papers ............................................................. 128
Result ................................................................................... 128
Sampling Plans .............................................................. 128
Audit Implementation Steps .........................................130
Notifcation to Auditee..................................................131
Opening Meeting ...........................................................131
Information, Verifcation, and Evaluation .................131
Audit Observations ........................................................131
Audit Supervision ..........................................................132
Audit Follow-Up ............................................................132
Preparation of the Report .............................................132
Content of the Report ....................................................132
Reporting the Audit ...........................................................132
Review and Distribution ...............................................132
Audit Completion ..........................................................133
Record Retention............................................................133
Cost of Quality .........................................................................133
Origins ................................................................................ 134
© 2010 by Taylor and Francis Group, LLC
Contents  •  xv
Appendix A: Business Quality Plan .................................................. 137
Appendix B: Process Quality Plan .................................................... 139
Appendix C: Product Quality Plan ................................................... 141
Bibliography ........................................................................................ 143
© 2010 by Taylor and Francis Group, LLC
xvii
List of Figures
Figure 1.1 Product- or service-producing activities. .................................3
Figure 1.2 Support activities. ........................................................................4
Figure 1.3 Line and staf organization. .......................................................7
Figure 2.1 Interaction of objectives, policy, and procedures. ................31
Figure 2.2 Te quality-planning process. .................................................36
Figure 3.1 Business quality report. ............................................................47
Figure 3.2 Performance diagram. ............................................................. 48
Figure 3.3 Reporting fow. ..........................................................................50
Figure 3.4 Basic activity report. .................................................................51
Figure 3.5 Posting to the business quality report. ...................................55
Figure 3.6 Fishbone diagram. .....................................................................57
Figure 4.1 Organizational breakdown of positions. ................................70
Figure 4.2 Employee training record. .......................................................75
Figure 6.1 Normal curve. ..........................................................................103
Figure 6.2 Audit plan and report. ............................................................127
Figure 6.3 Audit working paper. ..............................................................129
Figure 6.4 C = 0 sampling plan. ...............................................................130
Figure 6.5 Audit steps: Any process ........................................................131
© 2010 by Taylor and Francis Group, LLC
xix
List of Tables
Table 1.1 Responsibility Matrix ....................................................................8
Table 2.1 Formal versus Informal Planning .............................................14
Table 2.2 QMS Responsibility Matrix .......................................................16
Table 2.3 Business Quality Plan .................................................................18
Table 2.4 Process Quality Plan: General Information ........................... 20
Table 2.5 Process Quality Planning: Partial Detail .................................21
Table 2.6 Process Quality Planning: Failure Modes ...............................22
Table 2.7 Process Quality Planning: Control ...........................................23
Table 2.8 Project Planning: Gantt Chart ..................................................25
Table 2.9 Product Quality Plan ..................................................................27
Table 2.10 Flowcharting Symbols ............................................................... 34
Table 2.11 Basic Process Flows .....................................................................35
Table 3.1 Ranked Order Analysis ............................................................. 56
Table 4.1 Personnel Forecasting ................................................................ 66
Table 5.1 Maslow and Herzberg Comparison ......................................... 90
Table 6.1 Statistical Formulas .....................................................................98
Table 6.2 Statistical Methods Applied to Operations ...........................104
Table 6.3 SPC Constants ...........................................................................104
Table 6.4 Quality-Engineering Formulas ...............................................105
Table 6.5 Statistical Sampling Plan ..........................................................106
Table 6.6 Cost-of-Quality Statement ...................................................... 134
© 2010 by Taylor and Francis Group, LLC
xxi
Preface
Te rise of the quality profession as a specialty within business coincided
with the increased complexity of business enterprises. In simpler times,
when goods and services were provided by individual artisans, elaborate
quality systems were unnecessary. An individual producer could simply
compare customer requirements to his or her work and estimate its value.
Te rise of complex and large enterprises produced the need for the
development of objective and equitable quality procedures for the deter-
mination of value so the owners could assure the efciency of their opera-
tions. Traditional quality management concerned itself with developing
procedures to determine product conformance or nonconformance
(inspection).
Unfortunately, in too many cases, the study of (inspection) proce-
dures became an end in itself. Businesses lost sight of the objectives of
the procedures. “Acceptable” techniques were applied whether they were
appropriate or not. Tis in turn led to criticism of quality management
as a discipline that provided a great deal of largely irrelevant data to
management.
Fortunately, the discipline is changing. Quality professionals are becom-
ing much more concerned with providing information that will help
management meet the frm’s goals. In this book, I hope to continue the
movement toward consideration of the objectives of quality management
and value reporting.
In quality management, fairness and objectivity play an almost equal
role with relevance in the determination of the appropriate quality pro-
cedures. Te American National Standards Institute (ANSI) specifes
activities that must be followed as generally accepted quality principles
and practices (GAQP) known as ISO 9000. In some cases, the opinions
of groups with regard to these practices are backed only by the accepted
stature of the promulgating organizations, whereas in others, the imposed
requirements carry the weight of law behind them. In nearly every case,
the intent of the suggested (or required) practice is to promote fairness in
quality and the reporting of quality performance information to a diverse
management audience.
© 2010 by Taylor and Francis Group, LLC
xxii  •  Preface
A quality management system (QMS) is a performance-reporting system
and is defned as a formal system of accumulating and reporting data useful
for the achievement of management’s objectives. Whether we are concerned
with a not-for-proft institution or any other organization, there are general
characteristics that the performance-reporting system must possess. In the
following chapters, we will explore the implementation and application of a
quality management system.
© 2010 by Taylor and Francis Group, LLC
1
1
Organizing for Quality
Objectives
1. To introduce the quality organization function.
2. To discuss the quality management delegation process.
3. To present diferent quality organizational structures.
terminOlOgy
Attribute: A characteristic inherent in or ascribed to something.
Authority: Te right to command and expend resources.
Category: A group of similar classifcations that contain the same
( multiple) attributes.
Centralized organization: An organization in which little or no authority
is delegated.
Classifcation: A group of items in a category that contain the same
(single) attribute.
Management: A process or form of work that involves the guidance
or direction of a group of people toward organizational objectives,
goals, or requirements.
Organization: People working together in groups to attain objectives.
Organizing: Categorizing and classifying activities, under a manager,
necessary to attain objectives.
© 2010 by Taylor and Francis Group, LLC
2  •  Quality Management: Teory and Application
Performance measurement: Te use of statistical evidence to determine
progress toward specifcally defned organizational objectives, goals,
or standards.
Quality: Meeting customer needs.
Responsibility: Accountability for obtainment of an objective through
the utilization of resources and adherence to policies.
Span of control: Te number of subordinates that can be efectively
managed.
Variable: A continuous or discrete measurable factor, characteristic, or
attribute of an item, process, or system; some factor that might be
expected to vary over time or between objects.
intrOductiOn
Te purpose of organizing is to establish lines of authority. A line of appro-
priate authority creates order within the company. Tis is necessary in
order to prevent chaos where everybody is trying to do everything at once.
To create synergism, departments and individuals need to work together
in a coordinated efort resulting in higher efciency. In efect, three people
working together can do more work than ten people working separately.
Another beneft of organizing the business is more efcient communica-
tion and reduced confict by ensuring that authority and responsibility
coincide.
categOrizing duties
Organizing can be viewed as categorizing activities in a business by some
meaningful attributes. In most cases, business activities can be categorized
into leadership, product or service producing, and support. A category is a
responsibility center with an activity or collection of activities controlled
by a single individual. In the quality organization and planning process,
objectives are proposed for each responsibility center. Te responsibility
center then becomes the focal point for planning and control.
© 2010 by Taylor and Francis Group, LLC
Organizing for Quality  •  3
leadership
Te leadership category comprises those individuals who provide direc-
tion and guidance within the company. Tis includes establishing policies,
goals, objectives, and standards. Tis group has authority and responsi-
bility throughout the organization, from the overall system down to its
individual processes. In general, the highest level of leadership (execu-
tive management) in the company is responsible for the overall direction
(objectives) of the business. Individual process leaders (departmental
managers) in turn are responsible for the procedures needed to achieve
a given objective. Each individual with decision-making authority in an
organization has responsibility for some aspect of achieving the compa-
ny’s objectives. It is essential to recognize this through the development
of the quality management system. Tat is, the focus of the performance-
reporting system is on responsibility centers.
Product or service Producing
A product- or service-producing center (see Figure 1.1) is also called a
product realization center if the person responsible has authority for pro-
ducing or providing products or services to the customer.
Te product- or service-producing category contains those individuals
who are directly engaged in providing an output to the customer. Tis
encompasses sales, engineering, and production activities. Ironically, the
perceived order of importance of these activities is in reverse order. Tat is,
production activities are the most visible, whereas engineering and sales
are indirectly perceived as impacting the overall output. Te opposite is
Customer
Sales Engineering
Operations
Shipping
Customer
Raw
Material
Inventory
Receiving
Inspection
Purchasing
Supplier
– Vendors
– Scheduling
– Production
– Traceability
– Identification
– Orders
Figure 1.1
Product- or service-producing activities.
© 2010 by Taylor and Francis Group, LLC
4  •  Quality Management: Teory and Application
actually true. If the need for the product or service was not defned prop-
erly, the error will be propagated to the engineering and production func-
tions. Te same is true for poor product or service designs.
support
A support center (see Figure 1.2) is a category in which the manager has
authority only for providing management information or internal services
within the organization with regard to product realization activities’ ef-
ciency and efectiveness.
Individuals involved in providing the leadership group with informa-
tion used to make decisions regarding the efciency and efectiveness of
the business are considered support staf. Tis would include accounting,
human resources, and quality. Tese individuals provide information and
resources with regard to business performance. Tis can be in the form of
a fnancial report, employee training, or efciency reports.
incongruence
Product- or service-producing and support categories cannot be inter-
mixed. If a support activity is wrongfully placed into a product or service
function, it produces group incongruence resulting in negative entropy.
Eventually the magnitude of the incongruence can become so great that
it may result in system (business) failure. For example, having fnance
reports written under sales would cause a confict that would create chaos
because they have diametrically opposed purposes. Te same would be
true if you placed the quality group under production.
Business Organization and Planning Business Improvement
Quality Management System Equipment Calibration
Measurement, Analysis and
Improvement
Management Responsibility
Resource Management
Figure 1.2
Support activities.
© 2010 by Taylor and Francis Group, LLC
Organizing for Quality  •  5
breaking categOries intO classiFicatiOns
leadership classifications
Te structure of the classifcations under the leadership category can vary
slightly from company to company. Te main component of these clas-
sifcations revolves around the principle of the span of control. Tis refers
to the number of subordinates a manager can efectively manage. Te
number of people who should report directly to any one person should be
based upon the complexity, variety, and proximity of the work.
In practice, this turns out to be a ratio of 1:5 or 1:7. Terefore, every
fve to seven workers would report to a lead person; in turn, fve to seven
leads would report to a supervisor (5
n
); and so on. Tis would mean that
a supervisor would be able to efectively manage twenty-fve workers; a
manager could lead 125, and a director 625 in each department or group.
Te higher levels of management (directors and managers) should be
spending the majority of their time organizing and planning the activi-
ties in their respective departments, while the lower levels of manage-
ment (leads and supervisors) are predominantly involved in worker
motivation and control. Examples of managerial-level classifcations are
as follows:
President •
Vice president •
Director •
Manager •
Supervisor •
Lead •
Product- or service-Producing classifications
Te product- or service-producing categories’ associated classifcations
are those activities that are related to providing product to the customer.
Tis includes transformation processes where raw material is turned
into fnished goods. In some cases, this may mean writing a sales order,
scheduling production, issuing a purchasing document to purchase raw
materials, or manufacturing a product. Examples of product realization
classifcations are as follows:
© 2010 by Taylor and Francis Group, LLC
6  •  Quality Management: Teory and Application
Customer-related processes (sales) •
Design control (engineering) •
Purchasing (production) •
Customer-supplied property (production) •
Product identifcation and traceability (production) •
Process control (production) •
Preservation of product (shipping and receiving) •
Servicing •
support classifications
A support center is a category in which the manager has authority only
for providing management information or internal services, with regard
to a product realization center’s efciency and efectiveness. Teir related
classifcations are associated with the administration of the business. In
some cases, this may mean writing business performance statements or
fnancial statements, or providing training to employees. Examples of sup-
port classifcations are as follows:
Control of documents •
Monitoring and measurement of product •
Monitoring and measurement of processes •
Calibration •
Control of nonconforming product •
Corrective and preventative action •
Control of quality records •
Internal quality audits •
Human resources •
Finance (accounting) •
basic FunctiOnal structure
From Figure 1.3, you can see the basic line and staf organizational struc-
ture. Te organizational departments are defned by the nature of the work
they perform. President refers to the individual who establishes the broad
company policies, objectives, goals, and standards. It is expected that the
individuals in the leadership group provide monthly or weekly reports to
© 2010 by Taylor and Francis Group, LLC
Organizing for Quality  •  7
the support functions with respect to the outputs of their departments
showing progress toward goal attainment. An example of this would be an
expense report given to accounting, training records to human resources,
or yield reports to quality.
Sales refers to the function that defnes product features, product pro-
motion (including inside and outside sales), distribution (product mar-
ket placement), and product pricing. Te engineering function designs a
product based upon product features and pricing, among other things. Te
operations function is responsible for reproducing the design in quantities
necessary to meet customer demand. Collectively, these are the product-
or service-producing functions.
Te quality, accounting (fnance), and human resources (personnel)
functions perform support activities and provide management with infor-
mation and reports with respect to company efciency and efectiveness.
Te accounting department issues a monthly report called a proft and loss
statement (P&L statement) showing fnancial efectiveness. Te quality
department issues a business quality report (BQR) that shows the perfor-
mance of the organization in meeting customer needs, whereas the human
resources group issues a human factor utilization report. Combined, they
provide a picture of the health of the organization. For example, the P&L
statement only reports the results of fnancial transactions, whereas the
BQR shows the performance of the transactions. Collectively, these are
the support functions.
Quality Function considerations
Te role of the quality department is to identify, analyze, summarize, and
report the efciency of business operations in meeting customer require-
ments. Additionally, the quality department may be called upon to manage
PRESIDENT
SALES ENGINEERING OPERATIONS QUALITY PERSONNEL FINANCE
Figure 1.3
Line and staf organization.
© 2010 by Taylor and Francis Group, LLC
8  •  Quality Management: Teory and Application
certain quality projects to improve the efciency of business operations. Te
need to understand the role of the quality department is an essential step in
efective utilization of its resources. Te following are some basic assertions:
1. Company management is responsible for quality (the fnancial and
operational efciency is senior management’s responsibility).
2. Company management cannot delegate responsibility for quality (busi-
ness efciency starts and stays at the top); it is not a bottom-up process.
3. Te quality department is not responsible for ensuring quality (senior
management must take actions with regard to operational efciency,
i.e., allocate resources, goals, and performance appraisals).
4. Te quality department’s activities are similar to those of accounting:
they only report performance, and it is up to management to act. For
example, if sales are of, you would not reproach the accounting group.
5. Quality management encompasses the entire business, not just one
department.
authOrity, accOuntability, and resPOnsibility
Table 1.1 shows a responsibility matrix that clearly defnes operational
authority, accountability, and responsibility. Te frst column identifes
table 1.1
Responsibility Matrix
1. Categories and Classifcations 2. Department
3. Responsibility
Primary Alternate
Product or Service
Customer-related processes Sales Tom Alice
Design control Engineering Mary Jim
Purchasing Production Sue Alice
Customer-supplied property Production Sue Alice
Product identifcation and
traceability
Production Mary Alice
Process control Production Mary Alice
Preservation of product Shipping and
receiving
Hal Sam
Servicing Quality Sally Andy
© 2010 by Taylor and Francis Group, LLC
Organizing for Quality  •  9
the organization’s functional categories and associated classifcations.
Te next column identifes the department responsible for performing
and managing the classifed activities. Te last column identifes specifc
individual responsibility (leadership). Tese individuals are accountable
for the performance of their identifed functional areas. It is senior man-
agement’s responsibility to hold these individuals accountable for their
respective areas. Tese individuals have the right to command and expend
resources in their functional areas.
authOrity PrinciPles
Delegation: Tere is little debate about delegation of authority. When
management successfully delegates, their time is freed to pursue
more important tasks, and subordinates gain feelings of belonging
and added. Tis produces genuine feelings of commitment by work-
ers and is the best method for development.
Unity of command: Workers should have one and only one immedi-
ate supervisor. Te difculties in servicing more than one supervisor
have been well established for the last 3,000 years. In fact, almost 30
percent of all personnel problems can be related to disunity.
Scalar: Te authority in an organization fows one link at a time,
through the various management links. Tis is based upon the need
for communications; circumventing the process may cause pertinent
and vital information to be missed.
Exception: Tis principle states that managers should concentrate their
eforts on matters which deviate from the norm and should allow
subordinates to handle routine matters. It is believed that abnormal
issues require more of the manager’s abilities. Additionally, this pre-
vents managers from becoming bogged down in routine tasks.
revise and adjust
Due to the organic nature of the organizational structure, it should
be reviewed and revised as the complexity of the company changes.
© 2010 by Taylor and Francis Group, LLC
10  •  Quality Management: Teory and Application
From time to time, senior management may need to add or delete a
classifcation, department, or individual responsibility. Tese changes
should not occur more than once per year. To do this any more frequently
would be evidence of a dysfunctional organization.
cOmmunicatiOn
Once the organizational process has been completed by senior manage-
ment, it must be published and enforced. Tere should be no overlapping
responsibilities or departmental incongruence with respect to functional
categories and classifcations. Te responsibility matrix in Table 1.1 shows
the internal communication path for specifc roles and responsibilities. For
example, for sales questions you would talk to Tom or Alice, not Sally.
summary
Paying attention to the specifc categorization and classifcation of tasks
performed, and grouping those into departments should prevent incon-
gruence and chaos in the business. Tis process is vital because it forms
the foundation and basis for planning. Tere is no sense in establishing
short- or long-term plans when departmental and individual managerial
roles have not been properly defned. Distinguishing between product-
producing and support groups should be a priority. Mixing the two would
cause negative entropy and, in a worst-case scenario, business failure due
to a highly dysfunctional operation.
review QuestiOns
1. What is the purpose of organization?
2. Describe the diferent categories in the organization.
3. Defne the leadership category.
4. Defne the basic functional structure of a business.
© 2010 by Taylor and Francis Group, LLC
Organizing for Quality  •  11
5. Describe organizational incongruence.
6. Describe how individual accountability, responsibility, and author-
ity are identifed.
7. Describe the principles of authority.
8. Describe the role of the quality department.
9. Defne the support group.
10. Explain the following:
A. Product or service function
B. Support function
C. Leadership functions
© 2010 by Taylor and Francis Group, LLC
13
2
Planning for Quality
Objectives
1. To emphasize the importance of planning in the quality manage-
ment system.
2. To compare and contrast formal and informal planning.
3. To provide a systematic approach to planning.
terminOlOgy
Formal plan: A written, documented plan developed through an
identifable process.
Functional plans: Plans that originate from the functional areas of an
organization, such as production, sales, and personnel.
Goal: (used interchangeably with objective) A statement that gives the
organization or its departments direction and purpose.
Long-range plans: Plans that pertain to a period of time beyond the
current year.
Objective: (used interchangeably with goal) A statement that gives the
organization or its departments direction and purpose.
Planning: A process of deciding what objectives to pursue in the future
and in what order to achieve them.
© 2010 by Taylor and Francis Group, LLC
14  •  Quality Management: Teory and Application
Policies: Broad guidelines for action which are interrelated with goal
attainment.
Procedures: A series of related tasks expressed in chronological order to
achieve policies.
Short-range plans: Plans that cover the current year.
Strategic planning: Planning that covers multiple years.
Tactical planning: Planning that presupposes a set of goals handed
down from upper management.
intrOductiOn
Planning is the management function that produces and integrates
objectives, strategies, and policies. Te planning process answers three
basic questions:
1. Where are we now?
2. Where do we want to be?
3. How can we get there from here?
Planning is concerned with future actions and decisions of manage-
ment. By setting objectives and establishing a course of action, manage-
ment commits to “making it happen.” Planning is the easiest where change
happens the least. Planning is the most useful where change is the greatest.
Most planning is carried out on an informal basis. Tis occurs when man-
agement does not record their thoughts and instead carries them around
table 2.1
Formal versus Informal Planning
Planning
Formal informal
Rational Emotional
Systematic Disorganized
Reviewed and updated Sporadic
Used for improvement Mostly for show
Documented Memory based
© 2010 by Taylor and Francis Group, LLC
Planning for Quality  •  15
in their heads. Table 2.1 shows the contrast between formal and informal
planning.
business Quality Planning
elements of an effective Quality system
Te quality management system (QMS) assumes that each group performs
their intended responsibilities (see Table 2.2). A worst-case scenario would
be where executive management performs the role of lower-level manage-
ment, leaving the company leaderless and dysfunctional.
marketing
Management should identify the current market position of the com-
pany: where is the customer, and how and what do they buy? Tis would
entail the identifcation of the market scope and depth of the products or
services being ofered. Additionally, management should be able to dis-
cern the market share they hold in contrast to that of their competition.
A vital step is to identify current and future customer needs in terms of
product features and benefts by surveying the marketplace. Tis step is
critical to the organization’s success. Te major steps in marketing are
as follows:
1. Identify the customer(s). (Market)
2. Identify the customer’s product and service needs. (Product
features)
3. Identify how much the customer is willing to pay. (Pricing)
4. Identify where the customer goes to buy. (Placement)
5. Identify how the customer hears about companies like yours.
(Promotion and sales)
setting Objectives
Setting objectives requires a cascade approach down through the com-
pany hierarchy as follows:
© 2010 by Taylor and Francis Group, LLC
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QMS Responsibility Matrix
Level Organizing Planning Control Stafng Motivation
Executive (System) Develops the company
organizational
structure
Establishes the
departmental policies
and objectives
Monitors summary
reports showing
progress toward
objectives
Identifes and recruits
the management staf
for the various
departments
Meeting overall
company objectives
(monthly
efectiveness) BQR
Management (Process) Develops
departmental groups
responsible for
specifc tasks
Develops group
objectives,
requirements, and
procedures to
achieve executive
objectives
Reports and monitors
group progress
(output) toward
objectives
Identifes and recruits
associates for the
various groups
capable of achieving
objectives
Meeting departmental
objectives (weekly
efciency) activity
report
Associate (Product) Works within a group
established by
management
Regulates their tasks
to ensure that work is
done in a consistent
manner
Records data related
to the department’s
output requirements
Collaborates work
with others in the
group
Ensuring the accuracy
of the output
produced daily
(recordkeeping
forms)
© 2010 by Taylor and Francis Group, LLC
Planning for Quality  •  17
1. It begins at the top with a clear statement of what you are in busi-
ness for.
2. Long-range goals are formulated for this statement.
3. Te long-range goals provide the bases for short-term objectives (they
are linked).
4. Objectives are established at every relevant level and function in the
company.
5. Tis process continues down throughout the entire company.
Tis goal-setting process does not imply any specifc management style.
It does ensure that all departments and functions are in step with the
major company objectives and that there is no incongruence.
long- and short-range Objectives
Long-range objectives usually extend beyond the current year. Tese
objectives must support the organizational purpose. Short-range objec-
tives should be derived from an analysis of the long-range objectives. Te
analysis should result in an establishment of priorities that apply at all the
various levels in the company and are synchronized with each other and
the long-range objectives. Te major steps in establishing objectives are as
follows:
1. Formulate long-term goals.
2. Develop overall objectives.
3. Establish departmental objectives.
4. Formulate functional quality plans.
5. Establish performance metrics.
6. Implement.
7. Review performance.
Afer the goals have been established, an action plan for achieving the
goals should be developed as follows:
1. Determine major activities needed to meet the objectives.
2. Determine subactivities under the major activities.
3. Assign responsibility for each activity.
4. Identify resources required to meet goals.
© 2010 by Taylor and Francis Group, LLC
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Business Quality Plan
1. Categories and
Classifcations 2. Department
3. Responsibility
4. Tracking 5. Goal or Objective Primary Alternate
Product or service
Customer-related
processes
Sales Tom Alice Sales revenue per
month (invoicing)
> Last month
Design control Engineering Mary Jim Project hours and
cost
Per project
Purchasing Production Sue Alice Budget returns and
allowances
<= Last month < 2%
Customer-supplied
property
Production Sue Alice Inventory Zero spoilage
Product identifcation
and traceability
Production Mary Alice N/A N/A
Process control Production Mary Alice Rates and yields
Direct cost Per quote
Preservation of
product
Shipping and
receiving
Hal Sam Back orders/On-time
delivery
<= 5%/95%
Servicing Quality Sally Andy Time and material Per quote
© 2010 by Taylor and Francis Group, LLC
Planning for Quality  •  19
Te frst three steps were identifed in the responsibility matrix shown
in Table 2.2 under business organization. Establishing and allocating the
goals are discussed next.
setting business metrics
Te process of determining objectives and goals is directly related to the
functional categories (see Table 2.2) in the business, starting with the
product- or service-producing activities. Tese activities are critical for
the survival of the organization, where nonconformities have an immedi-
ate impact on cash fow. Some of these activities are revenue centers, while
others are cost centers. Te objective should be established to maximize
revenue and/or reduce (or control) cost.
In Table 2.3, sales would be a revenue center (we take money in), where we
would try to establish a realistic maximum goal or objective. Purchasing,
on the other hand, is a cost center (we pay money out), where we would
want to establish a realistic minimum (or control) goal or objective. It is
senior management’s responsibility to fnd the optimum balance between
revenue, cost, and expected market share while setting objectives. Tere
is always a cost associated with operating a business, and it is unrealistic
to assume there isn’t. Terefore, fxed costs based upon functional area
throughput should always be considered a normal part of the process.
Te very nature of the strategy- and goal-setting process is dynamic
and interactive. For the most part, we would be tracking actual results
and comparing them to the plan (actual/plan) in order to determine our
progress and performance. Te results of the current goals may change
and lead to a revised strategy.
PrOcess Quality Planning
Each of the classifcations or subactivities can be further analyzed and
planned for their respective requirements. Tis is done by identifying the
process tasks in chronological order. In short, this is a task listing without
any of the detail. Detailing each task or step would require an explanation
of how each step is accomplished. However, in process planning we only
© 2010 by Taylor and Francis Group, LLC
20  •  Quality Management: Teory and Application
need to know what steps or tasks are performed, not the actual “how-to”
information. An example of this is shown in Table 2.4.
general information
Table 2.4 shows the general information section of the process quality plan
(PQP). It is derived from the business quality plan shown in Table 2.2.
Each process plan is assigned a unique number for cross-reference and
identifcation purposes. Ten the classifcation and process step is identi-
fed, along with the efective date of the plan. Te planning phase is iden-
tifed; design is where the plan is in the process of development, review is
when the plan is awaiting approval, and production is when the plan is in
efect. Additionally, the plan identifes the departmental responsibilities,
including performance tracking and goal(s). Tis last step is important,
because this information will be used to update and revise the plan as
necessary. It will also be used for the establishment of the performance
measurement system and control.
details
Te details of the PQP begin with a simple procedural analysis fowchart
(Table 2.5, column 1). Procedural analysis fowcharts are a useful means
of making a “step-by-step” analysis of processes. Te details of present
(or proposed) procedures can be recorded, which will help point out
duplications of efort, time delays, excessive inspection, and transpor-
tation. Analysis of existing systems can stimulate an analysis of major
process changes. Adjacent to each symbol, each task is described with a
title (column 2). Next to each description, we would identify any product
or process requirement (column 3) as shown in Table 2.5.
table 2.4
Process Quality Plan: General Information
General Information
No.100 Classifcation (Process): Sales Date
xx/xx/xxxx
Phase: Design Review
Production
Contact Name: PDM Phone: 999-9999 x999
Department: Sales Primary: Tom Alternate: Alice
Tracking: Sales revenue per month (invoicing) Goal: > Last month
© 2010 by Taylor and Francis Group, LLC
Planning for Quality  •  21
Failure modes
Since there are no perfect processes, it will be necessary to identify prob-
lems early to control or eliminate them from happening. To do this we must
determine what possible problems we may encounter during each process
step (see Table 2.6). Of course, through our experience or from performing
experiments, we can deduce the cause of these problems. Whenever pos-
sible, we should design the process in such a way as to reduce or eliminate
all possible problems. Realistically, the elimination of all problems is not
possible, but we can reduce their impact and have contingencies for their
occurrence. Tis brings up a point: why do we have problems? Usually the
reason there are problems in a process is because it was designed that way.
If the process was put together ad hoc and informally, the output will be
erratic. Couple this with inconsistent or poor management leadership, and
it is truly amazing that any work gets accomplished.
Te planning process provides consistency in purpose and direction
of action to the accomplishment of departmental goals. In short, a good
quality management system rewards actions, not words. Tis is the vital
table 2.5
Process Quality Planning: Partial Detail
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1. Flowchart
2. Process Step
Description
3. Requirement
(Product or Process)
Select next sales
order.
Check salesperson’s math.
Oldest date
Correct price
N/A Walk to accounts
receivable le.
Find customer’s balance. Name and account number
Record customer’s
balance.
Correct amount
© 2010 by Taylor and Francis Group, LLC
22  •  Quality Management: Teory and Application
diference between a professional business manager and a novice. A nov-
ice relies upon hearsay, heightens unimportant issues, and makes deci-
sions on gut feelings and emotions. A professional relies on information
derived from statistical analysis with regard to the process for which he or
she has responsibility. As you can see from Table 2.6, careful consideration
is given in the design of a process to make it foolproof against error. If you
want to keep problems away, you had better plan.
control
Te fnal step in process quality planning is to determine the internal controls
for process stability. In Chapter 3, we will take an in-depth look at control
systems. For our purposes here, we will explore how errors are sensed. In
Table 2.7, we begin to describe how defciencies are detected (call sensors).
Errors can be detected directly or indirectly. Tose that can be directly sensed
are done so by making observations of the object, or error in this case. Tis
can be done visually by looking at it or through a test instrument applied
to the object. Test instruments may include rulers, micrometers, calipers,
table 2.6
Process Quality Planning: Failure Modes
1. Flowchart
2. Process Step
Description
Select next
sales order.
Check
salesperson’s
math.
Walk to accounts
receivable fle.
Find customer’s
balance.
Record
customer’s
balance.
File not found
Correct
amount
Balance wrong Calculation
incorrect
Salesperson
failed to identify
new customer
Name and
account
number
Orders mixed
up
Wrong amount Salesperson
calculated
wrong
Salesperson
rushed
Oldest date
Correct price
N/A N/A N/A
3.
Requirement
(Product or
Process)
4. Possible
Problems
5. Possible
Causes O
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table 2.7
Process Quality Planning: Control
1. Flowchart
3.
Requirement
(Product or
Process)
4.
Possible
Problems
5.
Possible
Causes
6.
Sensor
7. Methods
8.
Document
9.
Reaction
Plan Sample Frequency
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2.
Process
Step
Description
Select next
sales order.
Check
salesperson’s
math.
Walk to accounts
receivable fle.
Find
customer’s
balance.
Record
customer’s
balance.
Correct
amount
Balance
wrong
Calculation
incorrect
Calculator 1
Name and
account
number
File not
found
Salesperson
failed to
identify
new
customer
Visual 1 *
*
*
= All.
File
File
Call
manager.
Call
manager.
Correct price Wrong
amount
Salesperson
calculated
wrong
Calculator 1 * Sales
order
Call
manager.
Oldest date Orders
mixed up
Salesperson
rushed
Visual 1 * Sales
order
Call
manager.
N/A N/A N/A N/A N/A N/A N/A N/A
© 2010 by Taylor and Francis Group, LLC
24  •  Quality Management: Teory and Application
gauges, microscopes, viscosity tubes or cups, thermocouples, odometers,
and hydrometers, to name a few. All these devices make direct measure-
ments on objects. Te measurements can be compared to requirements to
determine if the process is operating within defned limits.
Indirect measurements are those which monitor the efect of an object.
Test instruments for indirect measurement are multimeters, oscilloscopes,
volt meters, amp meters, air speed gauges, gravimetric meters, dosimeters,
and spectrum analyzers, to name a few. Tese devices measure the efects
of the objects they measure and the object itself.
In Table 2.7, we describe the measurement method (sensor) along with
the sample size and frequency. Both of these are derived statistically. Also
included are provisions for the identifcation of any procedures or records
used in the task. Last, when errors do occur, the last column describes
what steps to take to remediate the problem.
PrOject Planning
While the process quality plan is established for those activities which are
an integral part of the business, there are those times when planning occurs
for short-duration processes. When this occurs, we must apply the concepts
of project planning. A project plan (see Table 2.8) is made up of signifcant
events or milestones that must occur in some time sequence in order for a
project to be completed. A project plan is a schedule of tasks over the dura-
tion of the project. Project plans are an efective means of depicting a project
schedule and reporting progress as it occurs. Te type of plan most ofen
used is a Gantt-type chart, as shown in Table 2.8. When viewing this plan,
you should remember that the responsible manager should have a list of all
the projects under his or her control along with their associated status. In
turn, each project on the list is then delegated to a project manager.
general information
Te general information section of the plan again identifes the responsible
parties for the project, along with associated departmental responsibility
and accountability. Tis helps ensure organizational integrity, line of com-
munication, and structure.
© 2010 by Taylor and Francis Group, LLC
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table 2.8
Project Planning: Gantt Chart
General Information
1. Activity or Document 2. % Completed 3. Status 1 2 3 4 5 6 7 8 9 10 11 12
4. Period Ending (Week)
No. 100 Project Name: Demo
Project Manager: PDM
Department: Engineering
Planned Hours: 100
Planned Cost: $3,750
Start Date: 99/99/9999
Study phase
Initial market analysis
Product scope and depth
Team feasibility report
Feature listing
Functional requirement
Capability report
Note: = completed, = incomplete,
100
50
0
0
0
100
45
Stop Date: 99/99/9999 Status Date: 99/99/9999 SI:1.02
Actual Hours: 50
Actual Cost: $1,850 CI: 0.49
AI: 0.5
Primary: Tom Alternate: Alice
Phone: 999-9999 x999
Date 99/99/9999
© 2010 by Taylor and Francis Group, LLC
26  •  Quality Management: Teory and Application
status reporting
Te next few blocks on the project plan in Table 2.8 are status blocks,
which are used to track the project’s progress as well as to record the
planned and actual, time and cost. Te Achievement Index (AI) is calcu-
lated by dividing the actual hours by the planned hours. An AI value of
less than 1.00 represents underachievement. Accordingly, the Cost Index
(CI) is calculated by dividing the actual cost (time and material) by the
planned cost. A CI value greater than 1.00 represents overexpenditure.
Te overall Status Index (SI) is calculated by dividing the AI by the CI. An
SI between .9 and 1.1 is normal; greater 1.3 or less than .7 would require
immediate attention.
detail
In the body of the Gantt chart, the frst column is used to identify the tasks
to be performed. Tis may require you to break down a task into constituent
parts called parent-child relationships. Tis can be seen in Table 2.8, where
the study phase task is the parent and the steps below are the children belong-
ing to this task. Adjacent to each step is a reporting column for percentage
completed, where we would designate what percentage of the step has been
fnished. Next to this is a column which provides a graphical status indica-
tor. Te plot portion of the chart shows a bar for the duration of the task or
step in which black represents completion and gray indicates the scheduled
time allotted. Te bar turns black as the project progresses based upon the
percentage completed. From Table 2.9, you can see that the feature listing
step has not been started, even though it was scheduled to start in week 7.
PrOduct Quality Planning
general information
At last, we have come to the actual product or service itself. Product quality
planning (see Table 2.9) is by no means the last step; in fact, it starts when
the product is being designed. Tis should be part of the design test phase
outputs prior to the actual design testing. Typically, this plan is developed
conjointly with the product illustrations (e.g., drawings and schematics),
bill of materials, and production work order. Tese plans are utilized in raw
© 2010 by Taylor and Francis Group, LLC
Planning for Quality  •  27
material, work-in-process components, and fnished goods. Tese plans are
used to perform product verifcation and validation. In some cases, these
are called test plans or specifcations. From Table 2.9, you can see there is a
general information area called subject where part information is entered,
as well as room for efective dates and approval and control numbers.
Additionally, there is an area for special instructions where necessary.
detail
In the body of Table 2.9 is a column called No., which is used to count
the rows on the form and also serves to reference a characteristic on the
table 2.9
Product Quality Plan
Subject: Efective
Date:
Number:
99999
Part Number: 999-9999 Revision A Supersedes:
99/99//99
Page:
9 of 9
Approved By: ZZZZZZ
Instructions:
Inspect the product to the characteristics listed below (also see drawing and/or
inspection and test work instructions). Use a C = 0 sampling plan with an acceptable
quality level of 10 unless otherwise specifed below. Record the results of the inspection
on the appropriate inspection report or log. In the event of a nonconformity, follow work
instructions.
No.
Characteristics to
Be Measured
or Inspected
Specifcation
and
Tolerance (±)
Acceptable
Quality
Level
Inspection
or
Measuring
Equipment
or
Method Comments
Overall length 12” .25 1.0 Caliper
Inside diameter hole A .25” .005 Micrometer
Inside diameter hole B .25” .005 Micrometer
Hole A location 1.5” .010 Caliper
Hole B location 2.5” .010 Caliper
Overall width 6” .250 Caliper
Tickness .250” .005 Caliper
Overall height 3.0” .025 Caliper
Color: tan — — Visual
© 2010 by Taylor and Francis Group, LLC
28  •  Quality Management: Teory and Application
product illustrations (e.g., drawings or schematics). Tis number can be
annotated on the illustration to correspond to the characteristics being
specifed in the product quality plan. Adjacent to each number is a descrip-
tion of the characteristic to be measured, which can be either a discrete or
continuous variable. For continuous characteristics, we need to identify a
target value with an upper and lower limit.
Tere may be occasions where you would need to specify an acceptable
quality level (AQL) for a particular characteristic. Te term AQL refers to
the percentage nonconforming and is used for determining an appropri-
ate sample size. Since not all characteristics are created equally, some are
more critical than others. Tose with lesser criticality may be assigned a
higher AQL than those that are more critical.
For each characteristic, we should identify the type of measurement
method or equipment to use. Tis will help inspection and test planning
as well as help determine the competency requirements for personnel per-
forming the tests. It also provides congruence with suppliers of raw mate-
rial with regard to testing methods. Of course, you could also identify a
documented test procedure in this column. Last, there is a column for
making any additional comments.
PrOduct veriFicatiOn and validatiOn Planning
responsibility and interfaces
Responsibility within the company for the validation planning should be
established. As part of validation planning, responsibilities for validation
activities and functions for supporting and interfacing departments should
be determined. Typically, supporting and interfacing departments include
manufacturing, engineering, purchasing, and others. Arrangements for
coordination with other validation groups or departments should also be
identifed.
information accessibility
Project information, such as contracts, schedules, work orders, specifca-
tions, drawings, manuals, procedures, confguration of operating equip-
ment, and purchase orders, should be available to the personnel who plan
© 2010 by Taylor and Francis Group, LLC
Planning for Quality  •  29
for validation. Requests for quotes and bid proposals may be obtained if
they contain information useful to the validation-planning function.
Files and records
Facilities and fles for maintaining forms, including tags, hard copy, and
computers, should be available. Capability for obtaining and maintaining
relevant specifcations, drawings, contracts, and other documents in read-
ily accessible fles should be established. Capability for validation records
storage and protection for established retention periods and retrieval from
fles should also be established. Additionally, there should be access to
referenced documents such as standards (such as those of the American
National Standards Institute [ANSI] or ASTM International [ASTM])
that set forth acceptance criteria, texts on validation sampling, and other
pertinent documents, including applicable codes.
validation Facilities
Facilities and validation equipment required for performing validations
should be determined and provided as necessary. Consider some of the
following:
1. Space and equipment (surface plates, tools, gauges, etc.) for valida-
tion, afording environmental conditions (e.g., appropriate lighting
level, temperature and humidity control, and cleanliness level) con-
sistent with handling and validation needs of products and services
2. Facilities for receiving and handling items being validated (shelving,
storage areas)
3. Facilities for taking verifcation samples and for containing test
results to validate signifcant characteristics
4. Facilities for maintenance of archived samples where critical materi-
als are involved
5. Physical validation systems and equipment for performing valida-
tion and testing, including dimensional, electrical, mechanical, and
pneumatic examination; nondestructive examination (NDE); and
destructive examination (DE)
6. Facilities or alternate provisions for calibration of measuring
equipment
© 2010 by Taylor and Francis Group, LLC
30  •  Quality Management: Teory and Application
validation Personnel
Te validation-planning system should consider the availability of prod-
uct analysts with the capability (education and technical training) to per-
form the types of validations required. Typically, broad-based capabilities
for dimensional, optical, nondestructive, and destructive evaluation and
testing provide the greatest versatility.
validation Procedures
Product analysts should be provided detailed guidelines, checklists,
instructions, or procedures when necessary to supplement the drawings,
specifcations, and other applicable documents.
scheduling and revising validation Plans
Te validation-planning process should include a process for determining
the need for validation plans and for initiating such plans. Tese should
be developed in conjunction with the manufacturing and construction
operation process plans.
POlicies, PrOcedures, and Objectives
Organizational goals, policies, and procedures are not mutually exclu-
sive components (see Figure 2.1). Each is related to the other; for example,
policies relate to objectives, while procedures relate to policies. Similarly,
they are an integral part of the organizational structure. Policies identify
what departments do, whereas procedures tell us how to do it. Goals are
achieved through policies and procedures.
In and of themselves, they can do nothing unless senior management is
dedicated to making them happen. Tere are many cases where compa-
nies have failed to follow the correct course of action. Tis is due in large
part to senior management becoming self-focused, where their own well-
being and self-interest take priority over those of the organization. Policies,
procedures, and goals then become imaginary rather than realistic. Being
imaginary, the objectives become negative motivators destroying the cred-
itability of senior management. A lack of integrity leads to a dysfunctional
© 2010 by Taylor and Francis Group, LLC
Planning for Quality  •  31
organization. In fact, any organization that operates on the premise of
“What’s in it for me?” will fnd it difcult to achieve true quality results.
Policies
Te frst step in establishing company policies is to identify the customer,
how the customer buys, and how the customer can be reached. Second, top
management must determine customer needs. Top management should
determine what the present and future business should be. Te next step
is to establish organizational responsibility, authority, and resources as
follows:
1. Determine major activities in the company.
2. Determine subactivities.
3. Assign primary and alternate responsibilities.
4. Identify the resources needed.
Policies exist at all levels of the organization. A typical organization
has policies that relate to everyone in the company. Policies outline a gen-
eral course (or framework) of action to be followed and do not precisely
describe how to achieve specifc objectives.
A general outline for writing a policy statement is as follows:
1. Describe the major activities and subactivities.
2. Identify the objective.
3. Defne the department that is responsible.
4. Identify the associated procedure.
5. State the policy.
Policy Procedure
Objective
Figure 2.1
Interaction of objectives, policy, and procedures.
© 2010 by Taylor and Francis Group, LLC
32  •  Quality Management: Teory and Application
In most cases, the policy statements are grouped together into a manual
(e.g., a quality policy manual). Tis manual is typically assigned a control
number for reference, and is dated and approved by senior management.
Procedures and rules
Procedures and rules defne in step-by-step fashion the methods through
which policies are achieved. Tey outline the manner in which a recurring
activity must be accomplished. Procedures should allow for fexibility and
deviation.
Rules require that specifc actions be taken with respect to a given
situation (step). Rules leave little doubt concerning what is to be done.
Tey permit no fexibility or deviation. Unlike procedures, rules do not
necessarily specify a sequence.
A basic outline for a procedure is as follows:
1. No. (control number assigned for reference)
2. From (the person approving the procedure)
3. To (the person responsible for executing the procedure)
4. Date (the date the procedure was approved)
5. Subject (major activity)
6. Regarding (subactivity)
7. CC: (carbon copy list)
8. Procedure steps and rules
Typically a master list is maintained that identifes all the procedures
used by the organization along with the approval date.
FOrms and recOrds
Te task of designing forms for quality is the responsibility of the quality
management. Te management representative must know (1) what data
the user wants to collect, and (2) how the form is going to be used in the
quality system.
Te basic parts of a form are as follows:
1. Title (identifes the form)
© 2010 by Taylor and Francis Group, LLC
Planning for Quality  •  33
2. Instructions (tells how to complete the form)
3. Heading (contains all the general data)
4. Body (specifc data the form is designed to collect)
5. Conclusion (contains approvals, signatures, and summary data)
Tere are two basic styles of forms: open style and boxed style. Te open
style is the simplest. It consists of headings and open areas in which data
can be collected. Te boxed style allocates space to each data item. Each
box is clearly identifed by name or by a brief description. Forms are sel-
dom purely “open” or purely “boxed.” Tey are usually described as pre-
dominantly open or boxed, or as a combination of both. Completed forms
are considered records.
Typical control of the forms requires a number to be assigned to the
form. Tis number is usually found in the footer section of the form. A
date is commonly found next to this number signifying the date the form
was placed into use. Tese forms are then listed on the document master
list. Te storage location, fling method, and retention times must be iden-
tifed for completed forms (or records).
bluePrints (PrOduct sPeciFicatiOns)
Product specifcations developed internally should be identifed along
with a revision letter code which can be cross-referenced in some man-
ner to a defnition of what changed. Normally, there is a list showing the
history of revisions for each part. In most cases, these specifcations are
maintained in a fling system.
PrOcess FlOwcharting
Flowcharting is a graphical technique specifcally developed for use in
computer science. It is a pictorial representation that uses predefned sym-
bols to describe data fow in a business, or the logic of a computer program
or process. Te symbols shown in Table 2.10 are “predefned”; their shapes
identify data and communicate what is happening to the data.
© 2010 by Taylor and Francis Group, LLC
34  •  Quality Management: Teory and Application
Flowcharts help quality professionals to describe and communicate
complex sets of processes and data in three principle ways:
1. Analyze existing processes.
2. Synthesize new processes.
3. Communicate with others.
Table 2.10
Flowcharting Symbols
Symbol Description
Terminal symbol indicates the start, stop, halt, pause,
or interruption in a process.
Process symbol is a representation of a task performed in
the processes.
Decision symbol is used for operations that determine
which of two or more alternative paths will be followed
in a process.
On-page connector is used to connect or link other
fowchart symbols.
Of-page connector is used when the fowchart is
continued on another page.
Document symbol is used to describe any input or
output that is a paper document.
© 2010 by Taylor and Francis Group, LLC
Planning for Quality  •  35
standardization of symbols
National and international eforts to develop standard symbols began
in the early 1960s. Te eforts in the United States resulted in the set of
symbols adopted by the ANSI. See Table 2.10.
normal logic Flow
Te normal logic fow is downward and by columns from lef to right.
Process Flow
As shown in Table 2.11, there are three basic process fows that have been
identifed in processes: (1) sequential, (2) loop, and (3) if-then-else. Tese
fows appear the most ofen when one is describing processes. Your process
can be a combination of any of these. As you will notice, for the most
part each symbol has one input and one output, except in the case of the
decision symbol, where there are two outputs (true or false).
table 2.11
Basic Process Flows
Sequential Loop If-Ten-Else
Start
Stop
100
101
102
Start
100
101
102
Stop
Start
100
101
102 103
a
Stop
© 2010 by Taylor and Francis Group, LLC
36  •  Quality Management: Teory and Application
cOmmunicatiOn
Te business quality plan in Table 2.2 is the frst plan to be developed.
Te process quality plan in Table 2.6 is derived from the business quality
plan, ideally for each activity listed. For short-term processes a project
plan (Table 2.8) is used, while a product quality plan is made for each
type of material used from raw material to fnished goods. Tese plans can
then be revised as needed. Te axiom “Measure twice and cut once” more
than applies when it comes to planning. Tese plans are communicated
from the senior management down throughout the entire organization
and provide the basis for meaningful dialogue within the company.
summary
From Figure 2.2, you can see that the planning process starts with the
business quality plan, from which in turn the process quality plans are
derived. Additionally, product and project plans are generated based upon
the process quality plan. Projects can be in the form of design control
for new product development, or the implementation of corrective or pre-
ventive actions. Te product quality plans defne the features, functions,
and characteristics of the product and/or its components. Tese plans are
integral to each other and cannot be performed separately. Nor can these
plans start with the product and work backward. Doing so would indicate
a lack of management commitment and overdelegation.
Business Quality
Plan
Process Quality
Plan
Product Quality
Plan
Project
Planning
Figure 2.2
Te quality-planning process.
© 2010 by Taylor and Francis Group, LLC
Planning for Quality  •  37
review QuestiOns
1. What is the purpose of organizational planning?
2. Describe the diferent types of plans.
3. Defne the business quality plan.
4. Defne the basic process and product plans.
5. Describe goal incongruence.
6. Describe how the various plans relate to each other.
7. Describe the principles of project planning.
8. Describe how goals are defned.
9. Defne how plans are communicated.
10. Explain the following:
A. Te business-planning function
B. Te process-planning function
C. Te product- and project-planning functions
© 2010 by Taylor and Francis Group, LLC
39
3
Controlling for Quality
Objectives
1. Defne the control process, and discuss the elements of reporting.
2. Develop an appreciation for business, process, and product perfor-
mance reporting.
3. Introduce and describe the various reporting structures.
terminOlOgy
Defect: A departure of a quality characteristic from its intended level
or state that occurs with a severity sufcient to cause an associated
product or service not to satisfy intended normal, or foreseeable,
usage requirements.
Management: A process or form of work that involves the guidance or direc-
tion of a group of people toward organizational goals or objectives.
Management (quality) control: A process for setting goals, monitoring
performance, and correcting for deviations.
Nonconformity: A departure of a quality characteristic from its intended
level or state that occurs with a severity sufcient to cause an associ-
ated product or service not to meet a specifcation requirement.
Objective: A statement (used interchangeably with goal) designed to
give an organization and its members direction and purpose.
© 2010 by Taylor and Francis Group, LLC
40  •  Quality Management: Teory and Application
Policies: Broad, general guidelines for action which relate to goal
attainment.
Procedures: A series of related steps or tasks expressed in chronological
order to achieve a specifc purpose.
Process approach to management: An approach to the study of manage-
ment that focuses on the management functions of planning, con-
trolling, organizing, stafng, and motivating.
Rules or requirements: Guidelines that require specifc and defnite
actions be taken with respect to a given situation or task.
Systems approach to management: A philosophy, popularized by
Frederick Taylor, concerning the relationship between people and
work that seeks to increase productivity and simultaneously make
work easier by scientifcally studying work methods and establishing
standards rather than depending on tradition and custom.
intrOductiOn
Defning the organizational purpose is critical with regard to control.
Management must identify the customer, where the customer is, how the
customer buys, and how the customer can be reached. Next, management
must determine what the customer buys.
In addition to defning the present business, management must also
identify what future business will be and what it should be.
long-range Objectives
Long-range objectives generally extend beyond the fscal year of the orga-
nization. Long-range objectives must support and not be in confict with
the stated organizational purpose. However, long-range objectives may be
quite diferent from the organizational purpose and still support it.
short-range Objectives
Short-range objectives should be derived from in-depth evaluation of long-
range objectives. Such an evaluation should result in a listing of priorities of
the long-range objectives. Once the priorities have been established, short-
range objectives can be set to help achieve the long-range objectives.
© 2010 by Taylor and Francis Group, LLC
Controlling for Quality  •  41
a cascade approach
One approach to setting objectives is to have the objectives “cascade” down
through the organizational hierarchy. Te objective-setting process begins
at the top with a clear, concise statement of the central purpose of the
organization. Long-range organizational goals are formulated from this
statement. Te long-range goals lead to the establishment of more short-
range performance objectives for the organization. Derivative objectives
are then developed for each major division or department. Objectives are
then established for the various subunits in each major division or depart-
ment. Te process continues on down through the organization.
Te following items represent potential areas for establishing objectives
in most organizations:
1. Proftability
2. Markets
3. Productivity
4. Product
5. Financial resources
6. Physical facilities
7. Research and innovation
8. Organization
9. Human resources
10. Customer service
concerns of control
In order to maintain stability, the manager must be sure that the organiza-
tion is operating within its established boundaries of constraint. Te next
concern is objective realization, which requires continual monitoring to
ensure that adequate progress is being made toward the accomplishment
of established objectives.
At top management levels, a problem occurs whenever the organization’s
objectives are not being met. At middle and lower levels of management, a
problem occurs whenever the objectives for which the manager is respon-
sible are not being met. All forms of management control are designed to
provide the manager with information regarding progress. Once the man-
ager has this information, it can be used for several purposes:
© 2010 by Taylor and Francis Group, LLC
42  •  Quality Management: Teory and Application
1. To prevent crises
2. To standardize output
3. To appraise employee performance
4. To update plans
5. To protect an organization’s assets
written reports
Tere are two basic types of written reports, analytical and informational.
Analytical reports interpret the facts they present. Informational reports
only present the facts.
Preparing reports
Preparing a report is a four- or fve-step process depending on whether it
is informational or analytical.
1. Planning the attack
2. Collecting the facts
3. Organizing the facts
4. Interpreting the facts (analytical only)
5. Writing the report
correcting for deviations
All too ofen, managers set standards and monitor results but do not fol-
low up with appropriate corrective actions. Te frst two steps are of little
value if corrective action is not taken. Te steps for efective corrective
actions are as follows:
1. Identify the problem.
2. Perform an investigation to determine the cause of the problem.
3. State the cause of the problem.
4. Determine a solution for the cause and implement it.
5. Prove the solution removed the cause.
importance of value
Persons conducting a business do so with the expectation of increasing
value. To accomplish this, they use their outputs to produce goods and
© 2010 by Taylor and Francis Group, LLC
Controlling for Quality  •  43
services that are demanded in the marketplace. Tey sell their products
and services and, in return, use outputs to produce more goods and ser-
vices. To be successful, they must sell their goods or services to their cus-
tomers for an amount greater than the cost of producing them. To do this,
they must ensure the value of the outputs produced. Te relationship of the
value to the owner’s outputs may be expressed by the following equation:
Value = Outputs – Nonconformance
Most businesspeople fnd that they are unable to conduct their business
satisfactorily using only fnancial measures.
basic cOncePts
An organization should have a set of objectives. Management of an orga-
nization will require information for determining how well these objec-
tives have been achieved.
Tis focuses on two factors:
1. Whether the goals have been met (efectiveness)
2. Whether they were able to provide products and services with mini-
mal nonconformities (efciency)
In general, the purpose in measuring value is to help management
control the activities of the frm.
OrganizatiOnal resPOnsibility
Each individual with decision-making authority in an organization has
responsibility for some aspect of achieving his or her company’s objec-
tives. It is essential to recognize this through the development of the per-
formance-logging system. Tat is, the focus of the value-logging system is
on responsibility centers. A responsibility center is an activity or collec-
tion of activities controlled by a single individual. In the quality-planning
© 2010 by Taylor and Francis Group, LLC
44  •  Quality Management: Teory and Application
process, objectives are proposed for each responsibility center. Te respon-
sibility center then becomes the focal point for control.
Te type of responsibility the person in charge can exert classifes
responsibility centers. A center is a primary or product-producing center
if the person responsible has authority only for producing or provid-
ing products or services to the customer. In some cases, this may mean
writing a sales order, issuing a purchasing document to purchase raw
materials, or producing a product. Examples of primary centers are as
follows:
1. Contract review
2. Design control
3. Purchasing
4. Customer-supplied product
5. Product identifcation and traceability
6. Process control
7. Handling, packaging, storage, preservation, and delivery
8. Servicing
A support center is a center in which the manager has authority only
for providing management information or internal services, with regard
to primary centers’ efciency and efectiveness, within the organization.
In some cases, this may mean writing business performance statements
or fnancial statements, or providing training to employees. Examples of
support centers are as follows:
1. Document control
2. Inspection and testing
3. Control of inspection, and measuring and testing equipment
4. Inspection and test status
5. Control of nonconforming product
6. Corrective and preventative action
7. Control of quality records
8. Internal quality audits
9. Training
In measuring value, a distinction is made between the performance
of a responsibility center and the performance of its manager. For
© 2010 by Taylor and Francis Group, LLC
Controlling for Quality  •  45
decisions concerning whether the organization should continue to
provide a product or service, all outputs and nonconformance for a
responsibility center are accumulated. This practice allows manage-
ment to make such decisions as whether the company should continue
the process or not.
In contrast, only a subset of activity outputs and nonconformance is
accumulated for measuring managerial performance. Only those noncon-
formities over which the manager can exert infuence are included in the
log for managerial performance. Managerial performance is then mea-
sured in part by comparing levels of controllable nonconformance against
management’s objectives. In this way, a manager may be judged to have
performed efciently for a given activity.
the rOle OF Quality management
Te role of the quality professional has changed dramatically from the
days when the quality control manager was simply responsible for the
inspection of product. Quality managers are now largely responsible for
preparing detailed performance statements; they are asked to help in
measuring the efectiveness of operations and suggesting improvements;
and they are involved in identifying and proposing solutions to emerging
problems. Quality professionals are primarily responsible for designing
the frm’s performance information system and assuring compliance with
quality-logging requirements.
In light of the expanding duties involved, the importance of the quality
function is usually recognized in a frm’s organizational chart by having
the quality executive report directly to the president.
intrOductiOn tO Quality-rePOrting basics
To be useful, performance logging must be assembled and logged objec-
tively. Tose who must rely on such information have a right to be assured
that the data are free from bias and inconsistency, whether deliberate
or not. For this reason, performance-logging systems rely on certain
© 2010 by Taylor and Francis Group, LLC
46  •  Quality Management: Teory and Application
standards or guides that have proved useful over the years in impart-
ing valued information. Tese standards (ISO 9000) are called generally
accepted quality principles (GAQP). Because quality is more an art than
a science, these principles are not immutable laws like those in the physi-
cal sciences. Instead, they are guides to action and may change over time.
Sometimes specifc principles must be altered or new principles must be
formulated to ft circumstances or changes in business practices.
Because quality principles are based on a combination of theory and
practice, there has always been, and probably always will be, some contro-
versy about their propriety.
A principle report resulting from the process of accumulating quality
information is the business performance or quality report. Te business
quality report portrays the operating results of primary and support cen-
ter activities for a period of time. Tis log is prepared monthly.
Another basic log is called an activity report or log and is generally
required in logging responsibility center activities. Tis log will be dis-
cussed later.
Quality professionals log company transactions, which are the result of
an activity in relationship to the amount of nonconformities, to determine
performance.
the business Quality rePOrt
Te business quality report (also known as a performance report) is a list-
ing of the frm’s primary and support responsibility centers’ activities on a
given date (see Figure 3.1).
Te body of the statement contains four major sections: center activities,
number of outputs (assets) generated, amount of nonconformance (nc),
and calculated value (percentage).
Outputs (or assets) are the resources of the business that can be expressed
as the output of an activity. Outputs can take many forms. Some out-
puts may have readily identifable characteristics. Others may simply
represent information used to communicate customer requirements
throughout the organization. Examples are sales orders, purchasing
© 2010 by Taylor and Francis Group, LLC
Controlling for Quality  •  47
documents, equipment calibration records, and nonconformance
logs. Outputs are usually recorded at the acquisition.
Nonconformities are departures of an asset from its intended require-
ment, or a state that occurs with a severity sufcient to cause the
asset not to satisfy customer requirements.
Value is the result of comparing outputs to nonconformance to determine
percent performance for a given activity. Value is calculated as follows:

1 100 −










Nonconformances
Assets
×
Business performance is the collective value of all the activities within a
responsibility center. Figure 3.2 shows the diferent product-produc-
ing departments’ scope of performance and where they all intersect.
Tis intersection is where all activities are in 100 percent coincidence
with each other. Tis means that each function provided exactly
what the other function required in order to have a usable output.
Tis is the optimum performance area of the business. Te larger the
Red Bead Company Performance Report January 30, 20XX
Primary Centers Assests Nc Value (%)
RAW MATERIAL INVENTORY
4.6 Purchasing
Vendor Assessment 150 12 92%
Purchasing Data 300 5 98%
WORK IN PROCESS 450 17 96%
4.3 Contract Review 500 3 99%
4.4 Design Control 25 2 92%
Department A 25000 1500 94%
Department B 12000 150 99%
Department C 5000 250 95%
42000 1900 95%
FINISHED GOODS INVENTORY
4.15 Delivery 250 11 96%
Figure 3.1
Business quality report.
© 2010 by Taylor and Francis Group, LLC
48  •  Quality Management: Teory and Application
intersection, the better the performance. If all these functions com-
pletely overlapped, the organization would be 100 percent efcient.
In practice, this is rarely the case; studies have shown that there is an
inherent 3–7 percent error rate no matter what you do.

Performance S E O =
( )
U U
Example: From the Red Bead Company report, overall primary perfor-
mance is calculated as follows:

Pp = × × × × = (. . . . . ) . 99 92 96 95 96 80 (or 80 percent).
underlying cOncePts
Certain fundamental concepts provide a framework for recording and
logging performance. Tese concepts have been developed over time to
provide general guidelines for making business quality reports as objec-
tive and as useful as possible.
Any business is an individual unit, separate and distinct from other
activities. A separate business quality report would be maintained for each
separate business. Outputs are recorded and logged on activity reports or
logs to provide a “historical record” of events. Performance activities and
Sales
Engineering
Operations
Figure 3.2
Performance diagram.
© 2010 by Taylor and Francis Group, LLC
Controlling for Quality  •  49
their results appearing in business quality reports are expressed in terms
of units generated.
A performance activity is a business activity that requires quality rec-
ognition. Terefore, an event that afects any of the elements in the value
equation (outputs or nonconformance) must be logged.
activity rePOrting
Te ultimate objective of performance logging is to record the correct
number of outputs generated by an activity and the amount of non-
conformance. However, for practical reasons there is a very important
quality-logging function, preceding the recording of outputs and non-
conformance. Te outputs and nonconformance are frst entered in a pre-
liminary record called an activity report or log. Te process of recording
outputs and nonconformance is called journalizing. Afer the outputs and
nonconformance have been journalized, they are totaled and posted to the
performance report or log.
Some of the reasons for activity reporting or logging are as follows:
1. It provides a chronological record of all outputs and nonconfor-
mance generated by an activity.
2. It fulflls the need for recording in one place all outputs and noncon-
formance for a responsibility center.
3. It provides more information, such as a detailed explanation of
nonconformance, than can conveniently be recorded on individual
records.
Te original sources of information concerning most outputs and non-
conformance are quality records. Examples are sales orders, purchasing
documents, production logs, and various other types of business papers.
Such records are called source documents. Information obtained from
source documents helps in determining the number of outputs generated
and amount of nonconformance found. Te source documents also pro-
vide valuable evidence to support the accuracy of the performance log.
Te purpose of the activity report or log is to provide a chronological
record of all outputs and nonconformance for a given quality activity. It
© 2010 by Taylor and Francis Group, LLC
50  •  Quality Management: Teory and Application
includes the date in which the outputs and nonconformance were gen-
erated, a description of the nonconformance, and the source document
from which the information was collected. Te fow of information for
performance logging is as follows.
As shown in Figure 3.3, the source documents (quality records) provide
the basic information concerning the outputs and nonconformance of
each responsibility center activity. Te activity report or log represents the
frst point where data are formally entered in the performance-logging
system. Various activity reports or logs may be used, depending on the
size of the frm and the nature of their operations.
Te simplest form used is a multicolumn form, called an activity report or log
(see Figure 3.4). It has columns for the date on which outputs were generated,
asset description, total outputs generated, total nonconformance, descrip-
tion of nonconformance, and totals for each nonconformance description.
Te basic form for the activity report or log is illustrated as follows:
Department block. Te name of the department generating the activity
report or log is entered into the department block. Tis is the respon-
sibility center for the control of quality.
Activity block. Te name of the activity being logged is entered into
the activity block, such as subcontractor assessment or production
department.
Record used. Te name of the source document from which data were
taken is entered into the record used block, such as purchase order,
sale order, or inspection log.
Source Documents
Provides data
Concerning
Assets and
Nonconformances
Provides
Chronological
Shows the
Performance
Results of
Activities
Record
Activity Log Performance
Report
Figure 3.3
Reporting fow.
© 2010 by Taylor and Francis Group, LLC
Controlling for Quality  •  51
Date column. Te date the asset was generated is entered in the date
column. Te date is entered on the frst row for each asset activity.
Description column. Te description column is used to record the asset
activity or an explanation of the activity.
Total column. Te total number (or sample size taken) of outputs gener-
ated by the activity is entered in the total column.
Nc column. Te total amount of nonconformance found in the outputs
is entered in the Nc column.
Description of nonconformance. Descriptions of the nonconformance are
entered in the columns below the title description of nonconformance.
Nonconformance columns. Te quantities of the total nonconformance
that are attributed to the nonconformance are entered under each
nonconformance description.
jOurnalizing PrOcedure
To illustrate the recording of activities in the activity report or log, assume
that on May 1, 20xx, John Doe of the Red Bead Company Sales Department
took 500 orders from customers. Upon review of these orders, three non-
conformities were found. Tis activity is recorded on the frst page of the
activity report or log as follows:
activity lOg Page:
Department: Description of Nonconformance
Activity:
Record Used:
Date: Description Total Nc
Figure 3.4
Basic activity report.
© 2010 by Taylor and Francis Group, LLC
52  •  Quality Management: Teory and Application
Te recording of the outputs (sales taken) and nonconformance (includ-
ing description of the nonconformance) provides a summary of each day’s
activities, which is a valuable reference if there is some future question
about the activity.
For example, the Red Bead Company completed the following addi-
tional activities during May.
Activity: May 2, 20xx, the Purchasing department wrote 150 purchase
orders for raw material purchases and 12 nonconformities were
found.
Activity: May 3, 20xx, Department A produced 25,000 units and 1,500
nonconformities were found.
activity rePOrt Page: 1
Department: Sales Description of Nonconformance
Activity: Order Entry
Wrong
Price
Wrong
Part
Number
Record Used: Sale Orders
Date: Description Total Nc
5/1/xx Sales Taken 500 3 2 1
activity lOg Page: 1
Department: Production Description of Nonconformance
Activity: Purchasing
Wrong
Quantity
Ordered
Wrong
Part
Number
Record Used: Purchase Orders
Date: Description Total Nc
5/1/xx Orders Made 150 12 10 2
© 2010 by Taylor and Francis Group, LLC
Controlling for Quality  •  53
Activity: May 4, 20xx, Department B made 12,000 units and 150 non-
conformities were found.
Activity: May 10, 20xx, Department C produced 5,000 units with
250 nonconformities.
activity lOg Page: 1
Department: Production Description of Nonconformance
Activity: Department B Wrong
Size
<.001”
Out of
Tolerance
> .005”
Record Used: Production Work Orders
Date: Description Total Nc
5/1/xx P/N 536 12000 150 125 25
activity lOg Page: 1
Department: Production Description of Nonconformance
Activity: Department C
Cracked Fading
Record Used: Production Work Orders
Date: Description Total Nc
5/1/xx P/N 345 5000 250 175 75
activity lOg Page: 1
Department: Production Description of Nonconformance
Activity: Department A Wrong
Color
(Blue)
Out of
Tolerance
> .05”
Record Used: Production Work Orders
Date: Description Total Nc
5/1/xx P/N 12345 25000 1500 1200 300
© 2010 by Taylor and Francis Group, LLC
54  •  Quality Management: Teory and Application
Activity: May 12, 20xx, Shipping & Receiving shipped 250 units and
11 shipments were found nonconforming.
In the activities recorded above, there was only one entry. Many business
activities require the use of more than one entry. Any entry on the activity
report or log requiring more than one entry is added to the next available
line until the record is complete. Tese logs are usually completed by the
responsibility center manager and given to the quality organization for
posting in the performance log.
POsting
Te process by which the outputs and nonconformance are summarized
and transferred to activities on the performance log is called posting. It
consists of transferring totals for the outputs (total) column and the non-
conformance (nc) column on the individual activity reports or logs to the
performance log. Tis is usually performed once a month by the quality
organization.
In most businesses, the posting is done either manually or by data-
processing methods. Te conversion to paperless information systems
has become very common among businesses. Posting is illustrated in
Figure 3.5.
activity lOg Page: 1
Department: Shipping & Receiving Description of Nonconformance
Activity: Delivery
Raw
Mat’l
Delay’d
Date
Change
Made
Record Used: Packing Slips
Date: Description Total Nc
5/1/xx Shipments 250 11 10 1
© 2010 by Taylor and Francis Group, LLC
Controlling for Quality  •  55
PrOduct PerFOrmance rePOrting
Inspection records should be maintained that are identifable to batch, lot,
serial number, or work order number. When data are to be taken, defne
the number of data points and specify the appropriate format for record-
ing the data. An activity report or log is maintained providing a chronol-
ogy of the inspections performed.
Te inspection records should contain the following:
Activity Report
Department: Sales
5/1/×× Sales Taken 500
4.3 Contract Review
4.4 Design Control
4.6 Purchasing
Vendor Assesment
Purchasing Data
4.9 Process Control
Department A
Department B
Department C
4.15 Delivery
Primary Performance
25 2
500
150
300
450
25000 1500
150
250
1900
12000
5000
42000
250 11
12
5
17
3 99%
92%
96%
95%
96%
80%
3 2 1
500 Totals 3 2 1
Wrong
Price
Wrong
Part
Number
Order Entry
Sale Order
Activity:
Record Used:
Date: Description
Red Bead Company
Performance Report
May 30, 20××
Primary centers Assets Nc Value (%)
Total Nc
Description of Nonconformance
Figure 3.5
Posting to the business quality report.
© 2010 by Taylor and Francis Group, LLC
56  •  Quality Management: Teory and Application
1. Inspection data and results compared to acceptance criteria. An
acceptance decision should be reached for each inspection identi-
fying whether or not compliance with acceptance criteria has been
achieved. Tis acceptance or rejection decision should be recorded,
dated, signed, and made available for review.
2. Written disposition, waivers, or deviations from authorized organi-
zations (e.g., a material review board) for release of nonconforming
items and services.
3. Inspection data, including descriptions of any nonconforming items,
provided on a timely basis to responsible functions as feedback to be
used for trend analysis or process improvement.
analysis
ranked Order analysis
Te business quality report and activity reports provide a basis for estab-
lishing frequency distributions. Te nonconformities become class boun-
ties, and the numbers of nonconformities are the cumulative frequency
of occurrence. Te nonconforming class can then be arranged with the
highest-occurring nonconformity at the top on down to the lowest, as
shown in Table 3.1.
From Table 3.1, it should be obvious that cracked is the most frequently
occurring nonconformity. Hence, this should be the frst problem to be
corrected.
table 3.1
Ranked Order Analysis
Rank
Description of
Nonconformity Tally f %
1 Cracked IIIII 5 .33
2 Loosened IIII 4 .27
3 Leaking III 3 .20
4 Sticking II 2 .13
5 Fractured I 1 .07
Summary 15 1.00
© 2010 by Taylor and Francis Group, LLC
Controlling for Quality  •  57
Fishbone diagram
Te fshbone diagram shown in Figure 3.6 is used to determine causes
and efects which relate to a nonconformity. Te major branches of the
fshbone diagram are used to determine the major infuences that would
result in the problem outcome. Te braches are as follows:
1. Method: Tis is the branch where you would describe those factors
in the process that would afect the output with regard to the current
practices.
2. Machine: Here you would identify those factors which are related to
the equipment used in the process.
3. Material: Here you would identify those factors related to the mate-
rial used in the process.
4. People: Here you would identify those factors related to the people
working within the process.
Tis technique has proven to be useful in determining the causes of
problems. It is interesting to note here that changing any variable in the
process will result in a change in the output regardless of whether it is the
actual cause.
Method
Material People
Problem
Machine
Gauges
Maintenance
Lack off training
Brittle material
Figure 3.6
Fishbone diagram.
© 2010 by Taylor and Francis Group, LLC
58  •  Quality Management: Teory and Application
cOntrOlling nOncOnFOrmance identiFicatiOn
identification during work
When operators are engaged in an activity to produce a product, the act
of regulating or making modifcations is considered a component of that
activity. In essence, any changes made during the manufacture of a prod-
uct are not considered a nonconformity.
completion of work
Nonconformities are usually detected afer the completion of work.
Tis occurs when the completed product (which is the result of work) is
inspected with regard to preestablished requirements.
inspection
Te purpose of inspection with respect to products is as follows:
1. To provide a basis for action for the product already on hand
2. To decide if the product meets requirements
3. To provide a basis for action with regard to the process
4. To decide if the process requires action
identification of nonconforming Product
When in the course of inspection (by the operator or independent inspec-
tor) nonconforming product is detected, it should be identifed by some
suitable means (e.g., tags, markings, or location).
segregatiOn
short-run Production
Tere are cases where the lot or batch integrity must be maintained. In
such circumstances, the nonconforming units must be appropriately iden-
tifed to ensure against their use. Where integrity of the lot is not an issue,
© 2010 by Taylor and Francis Group, LLC
Controlling for Quality  •  59
units should be isolated or removed from the fow of production to prevent
unintended use.
long-run Production
In the case of mass production (or continuous, homogeneous fow), non-
conforming units must be removed from the process for disposition.
Nonconforming units must be separated from other materials to prevent
unintended use.
risk
Associated nonconformance risk levels are defned as follows:
1. Critical: A nonconformity that may cause bodily harm, injury, or
death, and/or prevents the product from performing its intended
function.
2. Major: A nonconformity that may reduce the life of the product and/
or is readily noticeable by the customer.
3. Minor: A nonconformity that is neither critical nor major.
disPOsitiOn
responsibilities for disposition
Over the years, there have been many ways to determine how to dispose of
nonconforming material; the following are some current practices:
1. Material review boards: In some cases, organizations have opted to
establish a group of top managers to review nonconforming material
for disposition. Tis requires the consensus of all the managers in
the disposition decision.
2. Management: Other organizations have delegated the responsibility
for disposition of nonconforming product to a specifc departmental
manager or managers.
© 2010 by Taylor and Francis Group, LLC
60  •  Quality Management: Teory and Application
3. Operators: In some cases, due to the nature of the noncon-
formity, the operator can dispose of nonconforming material
immediately.
cOrrective and Preventive actiOn
(caPa) methOdOlOgy
immediate action required
When the nonconformity has an associated risk of critical or major, correc-
tive action should be taken immediately. If the nonconformity is detected
while the product is in transit to the customer or storage, the customer
must be notifed at once and the material placed in quarantine.
magnitude of the nonconformity
An analysis should be made of the nonconformities by product to detect
statistical trends. Tis is done using ranked order analysis (see Table 3.1)
to determine the most frequently occurring nonconformity for corrective
action.
caPa methodology
When performing either corrective or preventive action, the steps are the
same. It should be noted that corrective actions are always product-based,
whereas preventive actions are process- or system-based. Te steps are as
follows:
1. Investigate the cause of nonconformities relating to the product, pro-
cess, and quality system, and record the results of the investigation.
2. Identify the root cause of issues requiring corrective or preven-
tive action.
3. Determine the steps needed to deal with any problems requiring
corrective or preventive action.
4. Implement corrective and preventive actions.
© 2010 by Taylor and Francis Group, LLC
Controlling for Quality  •  61
5. Apply controls to ensure that corrective and preventive action is
taken.
6. Initiate controls to ensure that actions taken are efective.
7. Confrm that relevant information on actions taken is submitted for
management review.
summary
Departmental managers are primarily concerned with the efciency
of certain activities in their department which are indicators of their
overall performance. By monitoring these activities, departmental
managers can prevent, reduce, or eliminate nonconformities, resulting
in improved overall value. To do this, they must determine the out-
put of each activity and its interrelationship with regard to providing
value to the customer. Some activities provide support to achieving the
desired output, while others are directly related to or incorporated into
the output itself.
Each activity usually has a source document related to the output. Tis
could be a purchase order, packing list, or training record. Te documents
provide a record of the event in writing, which preserves the knowledge
of the transaction. In this way, key data are collected to provide useful
information to management.
Once the data have been collected on records, these records must be
categorized and summarized to provide a chronology of events related to
the department’s output. Tis chronology usually provides the following
information:
1. Number of outputs produced
2. Number of nonconformities found
3. Description of the nonconformities
Te departmental managers should establish goals and requirements
in writing which are consistent with the overall company performance.
In addition, departmental managers should identify the record used to
collect pertinent data.
© 2010 by Taylor and Francis Group, LLC
62  •  Quality Management: Teory and Application
review QuestiOns
1. What is the purpose of the business quality report?
2. Describe the diferent types of centers.
3. Defne the business quality report.
4. Defne the basic activity-reporting process.
5. Describe how overall business performance is calculated.
6. Describe how value is calculated.
7. Describe the three principles of quality control.
8. Describe how goals are defned.
9. Defne how the reports are communicated.
10. Explain the following:
A. Te business-reporting structure
B. Journalizing and posting
C. Te product- and project-planning function
© 2010 by Taylor and Francis Group, LLC
63
4
Staffng for Quality
Objectives
1. Defne the employee-forecasting process, and discuss the elements of
resource planning.
2. Develop a scheme for the development of job descriptions and
requirements.
3. Describe the various education and training methodologies.
terminOlOgy
Education: Te act or process of imparting or acquiring knowledge,
skill, or judgment.
Experience: Te application of education.
Research: Research is a human activity based on intellectual investi-
gation and aimed at discovering, interpreting, and revising human
knowledge on diferent aspects of the world. Research can use the
scientifc method, but need not do so. Scientifc research relies on
the application of the scientifc method, a harnessing of curiosity.
Tis research provides scientifc information and theories for the
explanation of the nature and the properties of humans. It makes
practical applications possible. Scientifc research is funded by
public authorities, by charitable organizations, and by private groups,
© 2010 by Taylor and Francis Group, LLC
64  •  Quality Management: Teory and Application
including many companies. Scientifc research can be subdivided
into diferent classifcations.
Speculation: Contemplation or consideration of a subject; meditation. A
conclusion, opinion, or fact reached by conjecture. Reasoning based
on inconclusive evidence; conjecture or supposition. Engagement
in risky business transactions on the chance of quick and/or con-
siderable proft. A commercial or fnancial transaction involving
speculation.
Teory: A set of statements or principles devised to explain a group of
facts or phenomena, especially one that has been repeatedly tested
or is widely accepted and can be used to make predictions about
natural phenomena. Te branch of a science or art consisting of its
explanatory statements, accepted principles, and methods of anal-
ysis, as opposed to practice: for example, a fne musician who had
never studied theory.
FOrecasting human resOurces needs
Forecasting and/or scenario analysis is a process of analyzing possible
future stafng events by considering alternative possible outcomes (scenar-
ios). Te analysis is designed to allow improved decision making by allow-
ing more complete consideration of outcomes and their implications.
For example, in economics and fnance, a fnancial institution might
attempt to forecast several possible scenarios for the economy (e.g., rapid
growth, moderate growth, and slow growth), and it might also attempt
to forecast fnancial market returns (for bonds, stocks, and cash) in each
of those scenarios. Te institution might consider subsets of each of the
possibilities. It might further seek to determine correlations and assign
probabilities to the scenarios (and subsets, if any). Ten it will be in a
position to consider how to distribute assets between asset types (i.e.,
asset allocation); the institution can also calculate the scenario-weighted
expected return (this fgure will indicate the overall attractiveness of the
fnancial environment).
Depending on the complexity of the fnancial environment, economic
and fnance scenario analysis can be a demanding exercise. It can be dif-
fcult to foresee what the future holds (e.g., the actual future outcome may
© 2010 by Taylor and Francis Group, LLC
Stafng for Quality  •  65
be entirely unexpected), that is, to foresee what the scenarios are, and to
assign probabilities to them; and this is true of the general forecasts, never
mind the implied fnancial market returns. Te outcomes can be mod-
eled mathematically and statistically (e.g., taking account of possible vari-
ability within single scenarios as well as possible relationships between
scenarios).
Financial institutions can take the analysis further by relating the asset
allocation that the above calculations suggest to the industry or peer group
distribution of assets. In so doing, the fnancial institution seeks to control
its business risk rather than the client’s portfolio risk.
In politics or geopolitics, scenario analysis involves modeling the pos-
sible alternative paths of a social or political environment, and possi-
bly diplomatic and war risks. For example, in the recent Iraq War, the
Pentagon certainly had to model alternative possibilities that might arise
in the war situation and had to position material and troops accordingly.
Te difculty of such forecasting is highlighted in that case by the fact
that it is arguable that the Pentagon failed to foresee the lawlessness and
insecurity of the postwar situation and the level of hostility shown toward
the occupying forces.
Scenario analysis can also be used to illuminate “wild cards.” For exam-
ple, analysis of the possibility of the earth being struck by a large celestial
object (a meteor) suggests that while the probability is low, the damage
inficted would be so high that the event is much more important (threat-
ening) than the low probability (in any one year) alone would suggest.
However, this possibility is usually disregarded by organizations using
scenario analysis to develop a strategic plan, since it has such overarch-
ing repercussions. In the case of personnel planning (see Table 4.1), the
amount of additional resources that are needed can be estimated based
upon the current stafng level and projected increase or decrease on the
output of each process. Additionally, the required management staf can
be estimated based upon the 1:5 to 1:7 ratio discussed in Chapter 1.
From Table 4.1, the current stafng and projected stafng calculated
based upon expected process output increase at some future period in
time. Tis is done by determining the current outputs based upon the busi-
ness quality report (see Figure 3.1), organizational responsibility (see 4),
and calculating the total hours worked by the associates (i.e., 2 associ-
ates × 160 hours per month = 320 hours total), then calculating the output
rate (i.e., 230 output/320 total hours = 0.718 each). Using the projected
© 2010 by Taylor and Francis Group, LLC
6
6



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Personnel Forecasting
1. Organizational Responsibility 2. Current Resources 3. Process Output [BQR] 4. Forecasted Resources
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Customer related
processes
Sales Tom Alice 2 1 1 1 - - 250 320 0.78 50 0.40 2.40 0.48 0.10 0.02 0.00 0.00
Design control Engineering Mary Jim 5 1 1 1 - - 10 800 0.01 2 1.00 6.00 1.20 0.24 0.05 0.01 0.00
Purchasing Production Sue Alice 3 1 1 1 - - 500 480 1.04 25 0.15 3.15 0.63 0.13 0.03 0.01 0.00
Customer
supplied
property
Production Sue Alice 1 1 1 1 - - 500 160 3.13 150 0.30 1.30 0.26 0.05 0.01 0.00 0.00
Identifcation Production Mary Alice 1 1 1 1 - - 100 160 0.63 20 0.20 1.20 0.24 0.05 0.01 0.00 0.00
Process control Production Mary Alice 30 1 1 1 - - 25,000 4,800 5.21 10,000 12.00 42.00 8.40 1.68 0.34 0.07 0.01
Preservation of
product
Shipping/
receiving
Hal Sam 2 1 1 1 - - 5,000 320 15.63 1,500 0.60 2.60 0.52 0.10 0.02 0.00 0.00
Servicing Quality Sally Andy 1 1 1 1 - - 100 160 0.63 25 0.25 1.25 0.25 0.05 0.01 0.00 0.00
Total 45 8 8 8 - - 14.90 59.90 11.98 2.40 0.48 0.10 0.02
© 2010 by Taylor and Francis Group, LLC
Stafng for Quality  •  67
increase in output, we can calculate the expected personnel increase (i.e.,
50 increase × 0.718 rate = 0.40 additional). When this addition is added
to the existing number of associates, the total number of associates can
be calculated (i.e., 2 current associates + 0.4 additional = 2.4 total associ-
ates required). By dividing the total number of associates by 5, we can
derive the number of leads required (i.e., 2.4 associates/5 = 0.48 leads).
Tis is done for each subsequent management level to determine the most
efcient number of managerial levels required. For this case, there would
be no need for a level higher than supervisory.
By comparing current and projected stafng needs at the various levels,
an imbalance between associates and management becomes clear. In this
case, there are far too many managerial personnel (too many cooks spoil
the broth) and not enough associates. Tis organization will require a shif
in responsibilities and stafng.
jOb descriPtiOns
job analysis
Te general purpose of job analysis is to document the requirements of a
job and the work performed. Job analysis is performed as a preliminary to
successive actions, including defning a job domain, writing a job descrip-
tion, creating performance appraisals, selection and promotion, training
needs assessment, determining compensation, and organizational analy-
sis and planning.
In the felds of human resources (HR) and industrial psychology, job
analysis is ofen used to gather information for use in personnel selection,
training, classifcation, and/or compensation.
Te feld of vocational rehabilitation uses job analysis to determine the
physical requirements of a job to determine whether an individual who
has sufered some diminished capacity is capable of performing the job
with, or without, some accommodation.
Professionals developing certifcation exams should use job analysis
(ofen called something slightly diferent, such as task analysis) to deter-
mine the elements of the domain which must be sampled in order to create
a content-valid exam. When a job analysis is conducted for the purpose
© 2010 by Taylor and Francis Group, LLC
68  •  Quality Management: Teory and Application
of valuing the job (i.e., determining the appropriate compensation for
incumbents), this is called job evaluation.
Methods
Tere are several ways to conduct a job analysis, including interviews
with incumbents and supervisors, questionnaires (structured, open-
ended, or both), observation, and gathering background information such
as duty statements or classifcation specifcations. In job analysis con-
ducted by HR professionals, it is common to use more than one of these
methods.
For example, the job analysts may tour the job site and observe work-
ers performing their jobs. During the tour, the analyst may collect mate-
rials that directly or indirectly indicate required skills (duty statements,
instructions, safety manuals, quality charts, etc.).
Te analyst may then meet with a group of workers or incumbents. And,
fnally, a survey may be administered. In these cases, job analysts typically
are industrial psychologists or have been trained by, and are acting under
the supervision of, an industrial psychologist.
In the context of vocational rehabilitation, the primary method is
direct observation and may even include video recordings of incum-
bents involved in the work. It is common for such job analysts to use
scales and other apparatus to collect precise measures of the amount of
strength or force required for various tasks. Accurate, factual evidence
of the degree of strength required for job performance is needed to
justify that a disabled worker is legitimately qualifed for disability status.
In the United States, billions of dollars are paid to disabled workers
by private insurers and the federal government (primarily through the
Social Security Administration). Disability determination is, therefore,
ofen a fairly “high-stakes” decision. Job analysts in these contexts typi-
cally come from a health occupation such as occupational or physical
therapy.
Questionnaires are the most common methodology employed by certi-
fcation test developers, although the content of the questionnaires (ofen
lists of tasks that might be performed) is gathered through interviews or
focus groups. Job analysts in this area typically operate under the supervi-
sion of a psychologist.
© 2010 by Taylor and Francis Group, LLC
Stafng for Quality  •  69
Results
Job analysis or descriptions can result in a description of common duties,
or tasks, performed on the job, as well as descriptions of the knowledge,
skills, abilities, and other characteristics (KSAOs) required for performing
those tasks. In addition, job analysis can uncover tools and technologies
commonly used on the job, working conditions (e.g., a cubicle-based envi-
ronment, or outdoor work), and a variety of other aspects that characterize
work performed in the position(s). When used as a precursor to personnel
selection (a commonly suggested approach), job analysis should be per-
formed in such a way as to meet the professional and legal guidelines that
have been established (e.g., in the United States, the Uniform Guidelines
on Employee Selection Procedures).
In certifcation testing, the results of the job analysis lead to a document
for candidates laying out the specifc areas that will be tested (named in
various ways, such as exam objectives), and to a content specifcation for
item writers and other technical members of the exam development team.
Te content specifcation outlines the specifc content areas of the exam
and the percentage (i.e., the number) of items that must be included on the
exam from that content area.
Position requirement
As a minimum, you should identify each title in the business through the
use of the organizational chart (see Figure 1.3). Ten, for each title (see
Figure 4.1), you should describe the education and experience required
and the tasks performed. Once the analysis is done, the various positions
in the company should be stafed by competent employees as defned by
the requirements.
From Figure 4.1, the department has been identifed: sales in this case
and one of the positions under sales. Tis position is further broken down
into education required, experience required, and tasks. Te tasks category
has been further broken down into the individual steps. Tese in turn are
then documented as position requirements for a given title. Note that you
can have several people with the same title; therefore, the number of titles
should not exceed the number of employees. In fact, there should be very
few titles in the organization.
© 2010 by Taylor and Francis Group, LLC
70  •  Quality Management: Teory and Application
educatiOn and training
systems of Formal education
Educational systems are established to provide education and training,
in most cases for children and the young. A curriculum defnes what stu-
dents should know, understand, and be able to do as the result of edu-
cation. A teaching professional delivers teaching which enables learning,
and a system of policies, regulations, examinations, structures, and fund-
ing enables teachers to teach to the best of their abilities. Education is a
broad concept; it refers to all the experiences in which people can learn
something. Instruction refers to the intentional facilitating of learning
toward identifed goals, delivered either by an instructor or in other forms.
Teaching refers to learning facilitated by a real live instructor. Training
refers to learning that prepares learners with specifc knowledge, skills, or
abilities that can be applied immediately.
Primary Education
Primary (or elementary) education consists of the frst years of formal,
structured education. In general, primary education consists of six
or seven years of schooling starting at the age of fve or six, although
this varies between and sometimes within countries. Globally, around
Sales Department
(See Org. Chart)
Inside sales
(Group)
Order Entry
(Position)
Education
Experience
Tasks Review Orders
Handle Inquiries
Handle Changes
Sales Person
(Position)
Figure 4.1
Organizational breakdown of positions.
© 2010 by Taylor and Francis Group, LLC
Stafng for Quality  •  71
70 percent of primary-age children are enrolled in primary education,
and this proportion is rising. Under the Education for All programs
driven by UNESCO, most countries have committed to achieving uni-
versal enrollment in primary education by 2015, and in many countries,
it is compulsory for children to receive primary education. Te division
between primary and secondary education is somewhat arbitrary, but it
generally occurs at about eleven or twelve years of age. Some educational
systems have separate middle schools, with the transition to the fnal
stage of secondary education taking place at around the age of fourteen.
In the United States and Canada, schools which provide primary educa-
tion are referred to as primary schools. Primary schools in these countries
are ofen subdivided into infant schools and junior schools.
Secondary Education
In most contemporary educational systems of the world, secondary edu-
cation consists of the years of formal education that occur during ado-
lescence. Secondary education is characterized by being the transition
from the typically compulsory, comprehensive primary education for
minors, to the optional, selective tertiary, postsecondary, or higher educa-
tion (e.g., university or vocational school) for adults. Depending on the
system, schools for this period or a part of it may be called secondary or
high schools, gymnasiums, lyceums, middle schools, colleges, or vocational
schools. Te exact meaning of any of these terms varies between the sys-
tems. Te exact boundary between primary and secondary education var-
ies from country to country and even within them, but is generally around
the seventh to the tenth year of schooling. Secondary education occurs
mainly during the teenage years. In the United States and Canada, pri-
mary and secondary education together are sometimes referred to as K–12
education, and in New Zealand Year 1–13 is used. Te purpose of second-
ary education is to give common knowledge, and to prepare for higher
education or to train directly in a profession.
Higher Education
Higher education, also called tertiary, third-stage, or postsecondary edu-
cation, is the noncompulsory educational level following the comple-
tion of a school providing a secondary education, such as a high school,
© 2010 by Taylor and Francis Group, LLC
72  •  Quality Management: Teory and Application
secondary school, or gymnasium. Tertiary education normally includes
undergraduate and postgraduate education, as well as vocational educa-
tion and training. Colleges and universities are the main institutions that
provide tertiary education. Tertiary education generally results in the
receipt of certifcates, diplomas, or academic degrees.
Higher education includes the teaching, research, and social services
activities of universities, and within the realm of teaching, it includes
both the undergraduate level (sometimes referred to as tertiary education)
and the graduate (or postgraduate) level (sometimes referred to as gradu-
ate school). Higher education in the United States and Canada generally
involves work toward a degree-level or foundation degree qualifcation.
In most developed countries, a high proportion of the population (up to
50 percent) now enters higher education at some time in their lives. Higher
education is very important to national economies, both as a signifcant
industry in its own right, and as a source of trained and educated person-
nel for the rest of the economy; for example, the following is a list of aca-
demic program levels:
1. Associate degree: Requires 60 credits
2. Bachelor degree: Requires 120 credits
3. Master degree: Requires 30 credits (bachelor degree or assessment
equivalency required)
4. Master of business administration: Requires 40 credits (bachelor
degree or assessment equivalency required)
5. Doctorate: Requires 60 credits (master’s degree or assessment equiv-
alency required)
Adult Education
Lifelong learning, or adult education, has become widespread in many
countries. Adult education takes on many forms, from formal class-based
learning to self-directed learning.
Alternative Education
Alternative education, also known as nontraditional education or edu-
cational alternative, is a broad term which may be used to refer to all
© 2010 by Taylor and Francis Group, LLC
Stafng for Quality  •  73
forms of education outside of traditional education (for all age groups
and levels of education). Tis may include both forms of education
designed for students with special needs (ranging from teenage preg-
nancy to intellectual disability), and forms of education designed for
a general audience which employ alternative educational philosophies
and/or methods.
Alternatives of the latter type are ofen the result of education reform
and are rooted in various philosophies that are commonly fundamentally
diferent from those of traditional compulsory education. While some
have strong political, scholarly, or philosophical orientations, others are
more informal associations of teachers and students dissatisfed with cer-
tain aspects of traditional education. Tese alternatives, which include
charter schools, alternative schools, independent schools, and home-
based learning, vary widely but ofen emphasize the value of small class
size, close relationships between students and teachers, and a sense of
community.
List of Adult Alternative Educational Methods
1. Degrees by assessment: Portfolio assessment of knowledge acquired
through experience and prior learning.
2. Degrees by research: Independent study, academic projects, and
assignments.
3. Degrees by exam: “Testing out,” passing online exams such as the
College Level Examination Program (CLEP).
4. Degrees by distance courses: Distance learning programs ofer accel-
erated coursework-based degrees for busy individuals who want a
high-quality education without interrupting their present careers or
family responsibilities.
5. On-the-job training (OJT).
training
Training refers to the acquisition of knowledge, skills, and competencies
as a result of the teaching of vocational or practical skills and knowledge
that relate to specifc competencies. It is the core of apprenticeships and
provides the backbone of content at technical colleges and polytechnics.
© 2010 by Taylor and Francis Group, LLC
74  •  Quality Management: Teory and Application
In addition to the basic training required for a trade, occupation, or
profession, observers of the labor market recognize the need to continue
training beyond initial qualifcations in order to maintain, upgrade,
and update skills throughout a person’s working life. People in many
professions and occupations refer to this sort of training as professional
development.
Some people use a similar term for workplace learning to improve per-
formance: training and development. One can generally categorize such
training as on-the-job or of-the-job:
1. On-the-job training takes place in a normal working situation, using
the actual tools, equipment, documents, or materials that trainees
will use when fully trained.
2. On-the-job training has a general reputation as most efective for
vocational work.
3. Of-the-job training takes place away from normal work situations—
implying that the employee does not count as a directly productive
worker while such training takes place.
4. Of-the-job training has the advantage that it allows people to get
away from work and concentrate more thoroughly on the training
itself. Tis type of training has proven more efective in inculcating
concepts and ideas.
Training has specifc goals of improving one’s capability, capacity, and
performance.
training records
Each employee (exempt or not) should have a title. An individual training
record should be maintained, as shown in Figure 4.2. Te record identifes
the employee by frst and last name. Te record also identifes the title of
the individual, as well as his or her highest level of education and initial
hire date. A log is provided to list all training received and the date. Tis
information should be verifed with a copy of a diploma, certifcate, or
school transcript which is attached to the record. Additionally, there is a
column for the name or initials of the person who verifed the training or
education.
© 2010 by Taylor and Francis Group, LLC
Stafng for Quality  •  75
EMPLOyEE TRAINING RECORD
Last Name: First Name: Title:
Highest Educational Level Achieved: Date Hired:
Date Description of Skills, Training or Education Received Verifed by
Figure 4.2
Employee training record.
© 2010 by Taylor and Francis Group, LLC
76  •  Quality Management: Teory and Application
summary
Te stafng function is a direct derivative of the organizing function. Te
company must frst establish the organizational structure and identify
how activity will be carried out under planning. Once planning has been
performed, then organizational control is its natural extension. During
the planning and control process, we identifed the tasks, tracking, and
objectives that are to be met. Tis in turn leads to the stafng function
to accomplish the company’s mission. A personnel forecast is developed
based upon expected process output. Te forecast defnes the personnel
requirements at all levels in the organization. Position requirements are
then established to identify education, experience, and tasks performed.
Once the position requirements have been defned, the organization
develops education and training requirements, including records of these
activities.
review QuestiOns
1. What is the purpose of the personnel forecast?
2. Describe the job analysis process.
3. Defne how titles are identifed.
4. Defne the basic position requirements for a given title.
5. Describe the diferent levels of education.
6. Describe adult education.
7. Describe the alternative methods of education.
8. Describe on-the-job training.
9. Defne diferent levels of postsecondary education.
10. Explain the following:
A. Te training record
B. How training is verifed
C. Experience
© 2010 by Taylor and Francis Group, LLC
77
5
Motivating for Quality
Objectives
1. To develop an understanding of the motivation process.
2. To identify leadership and management styles.
3. To explore how motivation impacts performance.
terminOlOgy
Goodwill: A kindly feeling of approval and support; benevolent interest
or concern; the favor or advantage that a business has acquired,
especially through its brands and its good reputation.
Happiness: A state of well-being and contentment.
Job: Something produced by or as if by work (did a nice job).
Leader: Person who directs a group or unit; a person who has
commanding authority or infuence.
Morale: Te mental and emotional condition (as of enthusiasm,
confdence, or loyalty) of an individual or group with regard to the
function or tasks at hand.
Motivation: A compelling force, stimulus, or infuence.
Satisfaction: Fulfllment of a need or want.
© 2010 by Taylor and Francis Group, LLC
78  •  Quality Management: Teory and Application
lead, cOach, and guide
Leadership is closely linked with the idea of management. Te two are
synonymous; management is a subset of leadership. With this premise,
you can view leadership as follows:
1. Centralized or decentralized
2. Broad or focused
3. Decision-oriented or morale-centered
4. Intrinsic or derived from some authority
Any of the bipolar labels traditionally ascribed to management styles
could also apply to leadership styles. Hersey and Blanchard (1982) use
this approach: they claim that management merely consists of leader-
ship applied to business situations, or in other words, management
forms a subset of the broader process of leadership. Tey put it this
way: “Leadership occurs any time one attempts to infuence the behav-
ior of an individual or group, regardless of the reason. Management is
a kind of leadership in which the achievement of organizational goals is
paramount.”
However, a clear distinction between management and leadership may
nevertheless prove useful. Tis would allow for a reciprocal relationship
between leadership and management, implying that an efective manager
should possess leadership skills, and an efective leader should demonstrate
management skills. One clear distinction could provide the following
defnition:
1. Management involves power by position.
2. Leadership involves power by infuence.
Abraham Zaleznik (1977), for example, delineated diferences between
leadership and management. He saw leaders as inspiring visionaries
concerned about substance, while viewing managers as planners who
have concerns with process. Warren Bennis (1989) further explicated a
dichotomy between managers and leaders. He drew twelve distinctions
between the two groups:
© 2010 by Taylor and Francis Group, LLC
Motivating for Quality  •  79
1. Managers administer; leaders innovate.
2. Managers ask how and when; leaders ask what and why.
3. Managers focus on systems; leaders focus on people.
4. Managers do things right; leaders do the right things.
5. Managers maintain; leaders develop.
6. Managers rely on control; leaders inspire trust.
7. Managers have a short-term perspective; leaders have a longer-term
perspective.
8. Managers accept the status quo; leaders challenge the status quo.
9. Managers have an eye on the bottom line; leaders have an eye on the
horizon.
10. Managers imitate; leaders originate.
11. Managers emulate the classic good soldier; leaders are their own
person.
12. Managers copy; leaders show originality.
Paul Birch (1999) also sees a distinction between leadership and man-
agement. He observes that, as a broad generalization, managers concern
themselves with tasks, while leaders concern themselves with people. Birch
does not suggest that leaders do not focus on “the task.” Indeed, the things
that characterize a great leader include the fact that they achieve. Efective
leaders create and sustain competitive advantage through the attainment
of cost leadership, revenue leadership, time leadership, and market value
leadership. Managers typically follow and realize a leader’s vision. Te dif-
ference lies in the leader realizing that the achievement of the task comes
about through the goodwill and support of others ( infuence), while the
manager may not.
Tis goodwill and support originate in the leader seeing people as
people, not as another resource for deployment in support of “the task.”
Te manager ofen has the role of organizing resources to get something
done. People form one of these resources, and many of the worst managers
treat people as just another interchangeable item. A leader has the role of
motivating others to follow a path he or she has laid out, or a vision he or
she has articulated in order to achieve a task. Ofen, people see the task as
subordinate to the vision. For instance, an organization might have the
overall task of generating proft, but good leaders may see proft as a by-
product that fows from whatever aspect of their vision that diferentiates
their company from the competition.
© 2010 by Taylor and Francis Group, LLC
80  •  Quality Management: Teory and Application
Leadership does not only manifest itself as purely a business phenom-
enon. Many people can think of an inspiring leader they have encountered
who has nothing whatever to do with business: a politician, an ofcer in
the armed forces, a Scout or Guide leader, a teacher, and so on. Similarly,
management does not occur only in the context of business. Again, we can
think of examples of people who we have met who fll the management
niche in nonbusiness organizations. Nonbusiness organizations should
fnd it easier to articulate a non-money-driven inspiring vision that will
support true leadership. However, ofen this does not occur.
Diferences in the mix of leadership and management can defne various
management styles. Some management styles tend to deemphasize leader-
ship. Included in this group, one could include participatory management,
democratic management, and collaborative management styles. Other
management styles, such as authoritarian management, micromanage-
ment, and top-down management, depend more on a leader to provide
direction. Note, however, that just because an organization has no single
leader giving it direction, this does not mean it necessarily has weak
leadership. In many cases, group leadership (multiple leaders) can prove
efective. Having a single leader (as in a dictatorship) allows for quick and
decisive decision making when needed, as well as when not needed. Group
decision making sometimes earns the derisive label committee-itis because
of the longer times required to make decisions, but group leadership can
bring more expertise, experience, and perspectives through a democratic
process.
Patricia Pitcher (1994) has challenged the division into leaders and man-
agers. She used a factor analysis (in marketing) technique on data collected
over eight years and concluded that three types of leaders exist, each with
very diferent psychological profles: artists were imaginative, inspiring,
visionary, entrepreneurial, intuitive, daring, and emotional; crafsmen
were well-balanced, steady, reasonable, sensible, predictable, and trust-
worthy; and technocrats were cerebral, detail-oriented, fastidious, uncom-
promising, and hard-headed. She speculates that no one profle ofers a
preferred leadership style. She claims that if we want to build, we should
fnd an “artist leader”; if we want to solidify our position, we should fnd a
“crafsman leader”; and if we have an ugly job that needs to get done like
downsizing, we should fnd a “technocratic leader.” Pitcher also observes
that a balanced leader exhibiting all three sets of traits occurs extremely
rarely: she found none in her study.
© 2010 by Taylor and Francis Group, LLC
Motivating for Quality  •  81
Bruce Lynn postulates a diferentiation between leadership and man-
agement based on approaches to risk. Specifcally, “A Leader optimizes
upside opportunity; a Manager minimizes downside risk” ( ). He argues
that successful executives need to apply both disciplines in a balance
appropriate to the enterprise and its context. Leadership without man-
agement yields steps forward, but as many (if not more) steps backward.
Management without leadership avoids any steps backward, but doesn’t
move forward.
leadership styles
Autocratic
An autocratic or authoritarian manager makes all the decisions, keeping
the information and decision making among the senior management.
Objectives and tasks are set, and the workforce is expected to do exactly
as required. Te communication involved with this method is mainly
downward, from the leader to the subordinate. Critics such as Elton Mayo
have argued that this method can lead to a decrease in motivation from
the employee’s point of view. Te main advantage of this style is that the
direction of the business will remain constant, and the decisions will all
be similar; this in turn can project an image of a confdent, well-managed
business. On the other hand, subordinates may become highly dependent
upon the leaders and increased supervision may be needed.
Paternalistic
A more paternalistic form is also essentially dictatorial; however, the deci-
sions tend to be in the best interests of the employees rather than the busi-
ness. A good example of this would be David Brent running the business
in the British version of the fctional television show Te Ofce. Te leader
explains most decisions to the employees and ensures that their social
and leisure needs are always met. Tis can help balance out the lack of
worker motivation caused by an autocratic management style. Feedback
is again generally downward; however, feedback to the management will
occur in order for the employees to be kept happy. Tis style can be highly
advantageous, and can engender loyalty from the employees, leading to a
lower labor turnover rate, thanks to the emphasis on social needs. It shares
© 2010 by Taylor and Francis Group, LLC
82  •  Quality Management: Teory and Application
similar disadvantages to an authoritarian style though, with employees
becoming highly dependent on the leader. If the wrong decisions are made,
then all employees may become dissatisfed with the leader.
Democratic
In a democratic style, the manager allows the employees to take part in deci-
sion making; therefore, everything is agreed on by the majority. Te com-
munication is extensive in both directions (from subordinates to leaders
and vice versa). Tis style can be particularly useful when complex decisions
need to be made that require a range of specialist skills: for example, when
a new information and communication technologies (ICT) system needs
to be put in place and the upper management of the business is computer
illiterate. From the overall business’ point of view, job satisfaction and qual-
ity of work will improve. However, the decision-making process is severely
slowed down, and the need for a consensus may lead to not taking the “best”
decision for the business. It can go against a better choice of action.
Laissez-Faire
In a laissez-faire leadership style, the leader’s role is peripheral and staf man-
ages their own areas of the business; the leader therefore evades the duties of
management, and uncoordinated delegation occurs. Te communication in
this style is horizontal, meaning that it is equal in both directions; however,
very little communication occurs in comparison with other styles. Te style
brings out the best in highly professional and creative groups of employees;
however, in many cases it is not deliberate and is simply a result of poor
management. Tis leads to a lack of staf focus and sense of direction, which
in turn leads to much dissatisfaction and a poor company image.
rewards based uPOn PerFOrmance
A psychological reward is a process that reinforces behavior—something
that, when ofered, causes a behavior to increase in intensity. Reward is
an operational concept for describing the positive value an individual
ascribes to an object, behavioral act, or internal physical state. Primary
© 2010 by Taylor and Francis Group, LLC
Motivating for Quality  •  83
rewards include those that are necessary for the survival of the species,
such as food, water, and sex. Some people include shelter as a primary
reward. Secondary rewards derive their value from the primary rewards
and include money, pleasant touch, beautiful faces, music, and the like.
Te functions of rewards are based directly on the modifcation of behav-
ior and less directly on the physical and sensory properties of rewards. For
instance, altruism may induce a larger psychological reward, although it
doesn’t cause physical or sensory sensations, thus favoring such behav-
ior, also known as psychological egoism. Rewards are generally considered
more efective than punishment in enforcing positive behavior. Rewards
induce learning, approach behavior, and feelings of positive emotions.
Praise and censure Fairly
In its common usage, praise is the act of making positive statements about
a person, object, or idea, either in public or privately. Praise is ofen con-
trasted with criticism, where the latter is held to mean exclusively negative
statements made about something, although this is not technically correct.
Most people are responsive to praise and their self-esteem or confdence will
increase if a suitable amount of praise is received—in fact, some psychologi-
cal theories hold that a person’s life is composed largely of attempts to win
praise for his or her actions. Other people are less afected by or even averse
to praise, for example people with autism or schizoid personality disorder.
Performance appraisals
A performance appraisal is a regular review of employee performance
within organizations. Generally, the aims of such a scheme are as follows:
1. Give feedback on performance to employees in meeting group goals
and objectives.
2. Identify employee training needs.
3. Document criteria used to allocate organizational rewards.
4. Form a basis for personnel decisions: salary increases, promotions,
disciplinary actions, and so on.
5. Provide the opportunity for organizational diagnosis and development.
© 2010 by Taylor and Francis Group, LLC
84  •  Quality Management: Teory and Application
6. Facilitate communication between employee and administrator.
7. Validate selection techniques and human resources policies to meet
federal Equal Employment Opportunity requirements.
A common approach to assessing performance is to use a numerical or
scalar rating system whereby managers are asked to score an individual
against a number of group or departmental objectives or attributes. In some
companies, employees receive assessments from their manager, peers, sub-
ordinates, and customers while also performing a self-assessment.
Te most popular methods that are being used as performance appraisal
processes are as follows:
1. Management by objectives (MBO)
2. Behavioral Observation Scale (BOS)
3. Behaviorally Anchored Rating Scale (BARS)
Trait-based systems, which rely on factors such as integrity and consci-
entiousness, are also commonly used by businesses. Te scientifc litera-
ture on the subject provides evidence that assessing employees on factors
such as these should be avoided. Te reasons for this are twofold:
1. Because trait-based systems are by defnition based on personality
traits, they make it difcult for a manager to provide feedback that can
cause positive change in employee performance. Tis is caused by the
fact that personality dimensions are for the most part static, and while
an employee can change a specifc behavior, he cannot change his per-
sonality. For example, a person who lacks integrity may stop lying to
a manager because she has been caught, but she still has low integrity
and is likely to lie again when the threat of being caught is gone.
2. Trait-based systems, because they are vague, are more easily infuenced
by ofce politics, causing them to be less reliable as a source of infor-
mation on an employee’s true performance. Te vagueness of these
instruments allows managers to fll them out based on who they want
to give a raise to, or feel should get a raise, rather than basing scores
on specifc behaviors that employees should or should not be engag-
ing in. Tese systems are also more likely to leave a company open to
discrimination claims because a manager can make biased decisions
without having to back them up with specifc behavioral information.
© 2010 by Taylor and Francis Group, LLC
Motivating for Quality  •  85
PrOvide a mOtivating envirOnment
Maslow’s hierarchy of needs is ofen depicted as a pyramid consisting of
fve levels: the four lower levels are grouped together as being associated
with physiological needs, while the top level is termed growth needs asso-
ciated with psychological needs. Defciency needs must be met frst. Once
these are met, seeking to satisfy growth needs drives personal growth. Te
higher needs in this hierarchy only come into focus when the lower needs
in the pyramid are satisfed. Once an individual has moved upward to the
next level, needs in the lower level will no longer be prioritized. If a lower
set of needs is no longer being met, the individual will temporarily repri-
oritize those needs by focusing attention on the unfulflled needs, but will
not permanently regress to the lower level. For instance, a businessman at
the esteem level who is diagnosed with cancer will spend a great deal of
time concentrating on his health (physiological needs), but will continue
to value his work performance (esteem needs) and will likely return to
work during periods of remission.
deficiency needs
Te frst four layers of the pyramid are what Maslow called “defciency
needs,” or “D-needs”: if they are not met, the body gives no indication of it
physically, but the individual feels anxious and tense. Te defciency needs
are survival needs, safety and security, love and belonging, and esteem.
Physiological needs
Tese are the basic human needs for such things as food, warmth, water,
and other bodily needs. If a person is hungry or thirsty or her body is
chemically unbalanced, all of her energies turn toward remedying these
defciencies and other needs remain inactive. Maslow explains, “Anyone
who attempts to make an emergency picture into a typical one and who
will measure all of man’s goals and desires by his [or her] behavior during
extreme physiological deprivation, is certainly blind to many things. It is
quite true that man [i.e., people] live(s) by bread alone—when there is no
bread.”
© 2010 by Taylor and Francis Group, LLC
86  •  Quality Management: Teory and Application
Te physiological needs of the organism (those enabling homeostasis)
take frst precedence. Tese consist mainly of the following (in order of
importance):
1. Breathing
2. Drinking
3. Eating
4. Excretion
If some needs are not fulflled, a person’s physiological needs take the
highest priority. Physiological needs can control thoughts and behaviors
and can cause people to feel sickness, pain, and discomfort.
safety needs
With their physical needs relatively satisfed, people’s safety needs take
over and dominate their behavior. Tese needs have to do with people’s
yearning for a predictable, orderly world in which injustice and inconsis-
tency are under control, the familiar frequent, and the unfamiliar rare. In
the world of work, these safety needs manifest themselves in such things
as a preference for job security, grievance procedures for protecting the
individual from unilateral authority, savings accounts, insurance policies,
and the like.
For the most part, physiological and safety needs are reasonably well
satisfed in the frst world. Te obvious exceptions, of course, are people
outside the mainstream—the poor and the disadvantaged. If frustration
has not led to apathy and weakness, such people still struggle to satisfy
the basic physiological and safety needs. Tey are primarily concerned
with survival: obtaining adequate food, clothing, and shelter, and seeking
justice from the dominant societal groups.
Safety and security needs include the following:
1. Personal security from crime
2. Financial security
3. Health and well-being
4. Safety net against accidents and illness and the adverse impacts
© 2010 by Taylor and Francis Group, LLC
Motivating for Quality  •  87
social needs
Afer physiological and safety needs are fulflled, the third layer of human
needs is social. Tis psychological aspect of Maslow’s hierarchy involves
emotionally based relationships in general, such as the following:
1. Friendship
2. Intimacy
3. Having a supportive and communicative family
Humans need to feel a sense of belonging and acceptance, whether it
comes from a large social group, such as clubs, ofce culture, religious
groups, professional organizations, sports teams, or gangs (“safety in
numbers”), or small social connections (family members, intimate part-
ners, mentors, close colleagues, and confdants). Tey need to love and be
loved (sexually and nonsexually) by others. In the absence of these ele-
ments, many people become susceptible to loneliness, social anxiety, and
depression. Tis need for belonging can ofen overcome the physiological
and security needs, depending on the strength of the peer pressure (e.g.,
an anorexic ignores the need to eat and the security of health for a feeling
of control and belonging).
esteem needs
All humans have a need to be respected, to have self-esteem, to respect
themselves, and to respect others. People need to engage themselves to
gain recognition and have an activity or activities that give them a sense
of contribution, and to feel accepted and self-valued, be it in a profession
or hobby. Imbalances at this level can result in low self-esteem and infe-
riority complexes. People with low self-esteem need respect from others.
Tey may seek fame or glory, which again depends on others. However,
confdence, competence, and achievement only need one person, the
self, and everyone else is inconsequential to one’s own success. It may be
noted, however, that many people with low self-esteem will not be able to
improve their view of themselves simply by receiving fame, respect, and
glory externally, but must frst accept themselves internally. Psychological
imbalances such as depression can also prevent one from obtaining self-
esteem on both levels.
© 2010 by Taylor and Francis Group, LLC
88  •  Quality Management: Teory and Application
Growth needs • : Tough the defciency needs may be seen as “basic,”
and can be met and neutralized (i.e., they stop being motivators
in one’s life), self-actualization and transcendence are “being” or
“growth needs” (also termed B-needs), that is, they are enduring
motivations or drivers of behavior.
Cognitive needs • : Maslow believed that humans have the need to
increase their intelligence and thereby chase knowledge. Cognitive
needs are the expression of people’s natural need to learn, explore,
discover, and create to get a better understanding of the world
around them.
Aesthetic needs • : Based on Maslow’s beliefs, it is stated in the hierar-
chy that humans need beautiful imagery or something new and aes-
thetically pleasing to continue up toward self-actualization. Humans
need to refresh themselves in the presence and beauty of nature while
carefully absorbing and observing their surroundings to extract the
beauty the world has to ofer.
self-actualization
Self-actualization—a concept Maslow attributed to Kurt Goldstein, one of
his mentors—is the instinctual need of humans to make the most of their
abilities and to strive to be the best they can. It is working toward fulflling
our potential, toward becoming all that we are capable of becoming.
In Maslow’s scheme, the fnal stage of psychological development comes
when the individual feels assured that his physiological, security, aflia-
tion and afection, self-respect, and recognition needs have been satisfed.
As these become dormant, he becomes flled with a desire to realize all of
his potential for being an efective, creative, mature human being. “What
a man can be, he must be” is the way Maslow expresses it.
Maslow’s need hierarchy is set forth as a general proposition and does
not imply that everyone’s needs follow the same rigid pattern. For some
people, self-esteem seems to be a stronger motivation than love. Italian
dictator Benito Mussolini, for example, alienated his closest friends by
undertaking reckless military adventures to achieve status as a conqueror.
(Tis example can also be used to illustrate the means-to-an-end dilemma
of human motivation. Tat is, Mussolini may have reached for status as
a means of gaining the afection of Adolf Hitler. More will be said about
this problem later.) For some people, the need to create is ofen a stronger
© 2010 by Taylor and Francis Group, LLC
Motivating for Quality  •  89
motivation than the need for food and safety. Tus, the artist living in
poverty is a classic example of reversing the standard hierarchy of needs.
Similarly, persons who have sufered hunger or some other deprivation
for protracted periods may live happily for the rest of their lives if only
they can get enough of what they lacked. In this case, the level of aspi-
ration may have become permanently lowered and the higher-order, less
proponent needs may never become active. Tere are also cases of people
martyring themselves for causes and sufering all kinds of deprivations,
particularly in the physiological, safety, and sometimes social categories,
to achieve their goals.
Herzberg proposed the motivation-hygiene theory, also known as the
two-factor theory (1959) of job satisfaction. According to his theory, people
are infuenced by two factors:
1. Satisfaction, is primarily the result of the motivator factors.
Tese factors help increase satisfaction but have little efect on
dissatisfaction.
A. Motivator factors
I. Achievement
II. Recognition
III. Work itself
IV. Responsibility
V. Promotion
VI. Growth
2. Dissatisfaction is primarily the result of hygiene factors. Tese fac-
tors, if absent or inadequate, cause dissatisfaction, but their presence
has little efect on long-term satisfaction.
A. Hygiene factors
I. Pay and benefts
II. Company policy and administration
III. Relationships with coworkers
IV. Physical environment
V. Supervision
VI. Status
VII. Job security
See Table 5.1 for a comparison of Maslow’s and Herzberg’s theories.
© 2010 by Taylor and Francis Group, LLC
90  •  Quality Management: Teory and Application
summary
Te motivation process begins with proper leadership. Leadership should
lead to an appropriate motivating environment which provides consis-
tency in purpose and sincerity, and where goals are realistic and there are
no hidden agendas. Management needs to be aware that each individual
has diferent needs depending on her stage in life and should be treated
accordingly. Operator dissatisfaction will be refected in her work when
these needs are not recognized.
When management communicates in only one direction to employees,
mostly through threats and very few rewards, employees will form
informal objectives that are diametrically opposed to those of the organi-
zation, resulting in ever-decreasing levels of output value.
table 5.1
Maslow and Herzberg Comparison
Maslow Need Hierarchy Teory Herzberg Motivation-Hygiene Teory
Self-actualization
M
o
t
i
v
a
t
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n
a
l
Work itself
– Self-fulfllment Achievement
– Challenge Growth
Esteem (ego) Advancement
– Recognition Recognition
– Confdence Status
Social
M
a
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n
t
e
n
a
n
c
e
Interpersonal relations
– Acceptance – Supervisor
– Belonging – Subordinates
– Afection – Peers
– Participation Supervision
Safety Company policy and administration
– Security Job security
– Protection Working conditions
Physiological Salary
– Food, water, and sleep Personal life
© 2010 by Taylor and Francis Group, LLC
Motivating for Quality  •  91
review QuestiOns
1. What is the purpose of management?
2. Describe leadership.
3. Defne diferent types of leadership and management styles.
4. Defne performance appraisal and its purpose.
5. Describe the diferent levels of Maslow’s hierarchy.
6. Describe Herzberg’s motivation-hygiene theory.
7. Describe the diferences between Maslow and Herzberg.
© 2010 by Taylor and Francis Group, LLC
93
6
Special Topics in Quality
Overview OF statistical methOds
Statistics is a mathematical science pertaining to the collection, analysis,
interpretation or explanation, and presentation of data. It is applicable to a
wide variety of academic disciplines, from the natural and social sciences
to the humanities, and to government and business.
Statistical methods can be used to summarize or describe a collection
of data; this is called descriptive statistics. In addition, patterns in the data
may be modeled in a way that accounts for randomness and uncertainty
in the observations, and then used to draw inferences about the process or
population being studied; this is called inferential statistics. Both descrip-
tive and inferential statistics comprise applied statistics. Tere is also
a discipline called mathematical statistics, which is concerned with the
theoretical basis of the subject.
Te word statistics is also the plural of statistic (singular), which refers to
the result of applying a statistical algorithm to a set of data, as in economic
statistics, crime statistics, and so on.
history
Some scholars pinpoint the origin of statistics to 1662, with the publication
of “Observations on the Bills of Mortality” by John Graunt. Early applica-
tions of statistical thinking revolved around the needs of states to base
policy on demographic and economic data. Te scope of the discipline of
statistics broadened in the early nineteenth century to include the collection
© 2010 by Taylor and Francis Group, LLC
94  •  Quality Management: Teory and Application
and analysis of data in general. Today, statistics is widely employed in gov-
ernment, business, and the natural and social sciences.
Because of its empirical roots and its applications, statistics is generally
considered not to be a subfeld of pure mathematics, but rather a distinct
branch of applied mathematics. Its mathematical foundations were laid
in the seventeenth century with the development of probability theory
by Blaise Pascal and Pierre de Fermat. Probability theory arose from the
study of games of chance. Te method of least squares was frst described
by Carl Friedrich Gauss around 1794. Te use of modern computers has
expedited large-scale statistical computation, and has also made possible
new methods that are impractical to perform manually.
Overview
In applying statistics to a scientifc, industrial, or societal problem,
one begins with a process or population to be studied. Tis might be a
population of people in a country, of crystal grains in a rock, or of goods
manufactured by a particular factory during a given period. It may instead
be a process observed at various times; data collected about this kind of
“population” constitute what is called a time series.
For practical reasons, rather than compiling data about an entire pop-
ulation, one usually studies a chosen subset of the population, called a
sample. Data are collected about the sample in an observational or experi-
mental setting. Te data are then subjected to statistical analysis, which
serves two related purposes: description and inference.
Descriptive statistics can be used to summarize the data, either numeri-
cally or graphically, to describe the sample. Basic examples of numerical
descriptors include the mean and standard deviation. Graphical summa-
rizations include various kinds of charts and graphs.
Inferential statistics is used to model patterns in the data, accounting for
randomness and drawing inferences about the larger population. Tese
inferences may take the form of answers to yes/no questions (hypothesis
testing), estimates of numerical characteristics (estimation), descriptions
of association (correlation), or modeling of relationships (regression).
Other modeling techniques include analysis of variance (ANOVA), time
series, and data mining.
Te concept of correlation is particularly noteworthy. Statistical analysis
of a data set may reveal that two variables (that is, two properties of the
© 2010 by Taylor and Francis Group, LLC
Special Topics in Quality  •  95
population under consideration) tend to vary together, as if they are
connected. For example, a study of annual income and age of death among
people might fnd that poor people tend to have shorter lives than afuent
people. Te two variables are said to be correlated (which is a positive
correlation in this case). However, one cannot immediately infer the exis-
tence of a causal relationship between the two variables. Te correlated
phenomena could be caused by a third, previously unconsidered phenom-
enon, called a lurking variable or confounding variable.
If the sample is representative of the population, then inferences and
conclusions made from the sample can be extended to the population as a
whole. A major problem lies in determining the extent to which the cho-
sen sample is representative. Statistics ofers methods to estimate and cor-
rect for randomness in the sample and in the data collection procedure,
as well as methods for designing robust experiments in the frst place.
Te fundamental mathematical concept employed in understanding such
randomness is probability. Mathematical statistics (also called statistical
theory) is the branch of applied mathematics that uses probability theory
and analysis to examine the theoretical basis of statistics.
Te use of any statistical method is valid only when the system or popu-
lation under consideration satisfes the basic mathematical assumptions
of the method. Misuse of statistics can produce subtle but serious errors
in description and interpretation—subtle in the sense that even experi-
enced professionals sometimes make such errors, and serious in the sense
that they may afect, for instance, social policy, medical practice, and the
reliability of structures such as bridges. Even when statistics is correctly
applied, the results can be difcult for the nonexpert to interpret. For
example, the statistical signifcance of a trend in the data, which measures
the extent to which the trend could be caused by random variation in the
sample, may not agree with one’s intuitive sense of its signifcance. Te set
of basic statistical skills (and skepticism) needed by people to deal with
information in their everyday lives is referred to as statistical literacy.
statistical methods
Experimental and Observational Studies
A common goal for a statistical research project is to investigate causal-
ity, and in particular to draw a conclusion on the efect of changes in the
© 2010 by Taylor and Francis Group, LLC
96  •  Quality Management: Teory and Application
values of predictors or independent variables on response or dependent
variables. Tere are two major types of causal statistical studies, experi-
mental studies and observational studies. In both types of studies, the
efects of diferences of an independent variable (or variables) on the
behavior of the dependent variable are observed. Te diference between
the two types lies in how the study is actually conducted. Each can be
very efective.
An experimental study involves taking measurements of the system under
study, manipulating the system, and then taking additional measurements
using the same procedure to determine if the manipulation has modifed
the values of the measurements. In contrast, an observational study does
not involve experimental manipulation. Instead, data are gathered and
correlations between predictors and response are investigated.
An example of an experimental study is the famous Hawthorne studies,
which attempted to test the changes to the working environment at the
Hawthorne plant of the Western Electric Company. Te researchers were
interested in determining whether increased illumination would increase
the productivity of the assembly line workers. Te researchers frst mea-
sured the productivity in the plant, then modifed the illumination in an
area of the plant and checked if the changes in illumination afected the
productivity. It turned out that the productivity indeed improved (under
the experimental conditions). However, the study is heavily criticized
today for errors in experimental procedures, specifcally for the lack of a
control group and blindedness.
An example of an observational study is a study which explores the
correlation between smoking and lung cancer. Tis type of study typically
uses a survey to collect observations about the area of interest, and then
performs statistical analysis of the observational data. In this case, the
researchers would collect observations of both smokers and nonsmokers,
perhaps through a case-control study, and then look for the number of
cases of lung cancer in each group.
Te basic steps of an experiment are as follows:
Planning the research, including determining information sources, •
research subject selection, and ethical considerations for the
proposed research and method
Designing experiments, concentrating on the system model and the •
interaction of independent and dependent variables
© 2010 by Taylor and Francis Group, LLC
Special Topics in Quality  •  97
Summarizing a collection of observations to feature their common- •
ality by suppressing details (descriptive statistics)
Reaching consensus about what the observations tell about the world •
being observed (statistical inference)
Documenting and presenting the results of the study •
Levels of Measurement
Tere are four types of measurements, levels of measurement, or measure-
ment scales used in statistics: nominal, ordinal, interval, and ratio. Tey have
diferent degrees of usefulness in statistical research. Ratio measurements
have both a zero value and the distances between diferent measurements
defned; they provide the greatest fexibility in statistical methods that can
be used for analyzing the data. Interval measurements have meaningful dis-
tances between measurements defned, but have no meaningful zero value
(as in the case with IQ measurements or with temperature measurements
in Fahrenheit). Ordinal measurements have imprecise diferences between
consecutive values, but have a meaningful order to those values. Nominal
measurements have no meaningful rank order among values.
Since variables conforming only to nominal or ordinal measurements
cannot be reasonably measured numerically, sometimes they are referred
to as categorical variables, whereas ratio and interval measurements are
grouped together as quantitative or continuous variables due to their
numerical nature.
Statistical process control (SPC) is an efective method of monitoring a
process through the use of control charts. Control charts enable the use of
objective criteria for distinguishing background variation from events of
signifcance based on statistical techniques. Much of SPC’s power lies in
the ability to monitor both the process center and its variation about that
center. By collecting data from samples at various points within the pro-
cess, variations in the process that may afect the quality of the end product
or service can be detected and corrected, thus reducing waste as well as
the likelihood that problems will be passed on to the customer. With its
emphasis on early detection and prevention of problems, SPC has a distinct
advantage over quality methods such as inspection, that apply resources to
detecting and correcting problems in the end product or service.
In addition to reducing waste, SPC can lead to a reduction in the time
required to produce the product or provide the service from end to end.
© 2010 by Taylor and Francis Group, LLC
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table 6.1
Statistical Formulas
Statistic Formula Used for
continuous statistics
Mean
µ
∑ x
n
Te center of a set of data
Range
r x x −
max min
Te dispersion of data around the center
Variance
σ
µ
2
2
1


( )


x
n
Te dispersion of data around the center
Standard Deviation
σ
µ


( )


n
n
2
1
Te dispersion of data around the center
Normal Distribution
f x e
x
( )


− ¸
¸

_
,

1
2
1
2
2
σ π
µ
σ
Used to perform estimations
Standard Normal Value
z
x

− µ
σ
Used to determine normalcy
Hypothesis Test of
Means z
n

− µ µ
σ
1 2
Used to determine diferences
© 2010 by Taylor and Francis Group, LLC
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9
9
t Test
t
x x
s
n n
p


( )
− −
( )
+
¸
¸

_
,

1 2 1 2
2
1 2
1 1
µ µ

where
s
n s n s
n n
p
2
1 1
2
2 2
2
1 2
1 1
2


( )
− −
( )
+ −
df n n + −
1 2
2
Used to determine diferences
Regression
r
xy
x y
n
x
x
n
y
y


( )( )

( )

¸

1
]
1
1
1
− −
( )
∑ ∑


∑ ∑
2
2
2
22

¸

1
]
1
1
1
n
Used to determine diferences
Confdence Limits
µ
σ
± z
n
where n ≥ 30;
or
µ
σ
±t
n

where n < 30
Used to determine diferences
Continued
© 2010 by Taylor and Francis Group, LLC
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table 6.1. (continued)
Statistical Formulas
Statistic Formula Used for
discrete statistics
Proportion
p
r
x



Used to determine percentage nonconforming
Binomial Distribution
µ

( )
− ( )
n
r n r
p q
r
n r
!
! !
Used to determine average percentage
nonconforming
Poisson Distribution
µ
λ
λ

− x
e
x !
Used to determine average percentage
nonconforming
Hypergeometric
Distribution
µ


C C
C
d
D
n d
N D
n
N
where n = sample size, N = lot size,
D = number of failures, and d = probability of a failure
Used in statistical sampling
p p
0

Hypothesis Test
µ


( )
ˆ
p p
p p
n
0
0 0
1
Used to determine diferences
© 2010 by Taylor and Francis Group, LLC
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1
0
1
p p
1 2
0 −
Hypothesis Test
µ

( )


( )
+
¸
¸

_
,

) )
) )
p p
p p
n n
1 2
1 2
0
1
1 1
where n p ×
)
and n p 1−
( )
)

are at least 5
Used to determine diferences
Chi-Square Distribution
x
O E
E
i i
i
2
2


( )

Where E
R C
n
i
i


1
Used to analyze survey data
Confdence
Limits
µ

( )
z
p p
n
ˆ
1
)

where np
)
and n p 1−
( )
)
are at least 5
Used to determine diferences
© 2010 by Taylor and Francis Group, LLC
102  •  Quality Management: Teory and Application
Tis is partially due to a diminished likelihood that the fnal product will
have to be reworked, but it may also result from using SPC data to identify
bottlenecks, wait times, and other sources of delays within the process.
Process cycle time reductions coupled with improvements in yield have
made SPC a valuable tool from both a cost reduction and a customer
satisfaction standpoint.
history of sPc
Statistical process control was pioneered by Walter A. Shewhart in the
early 1920s. W. Edwards Deming later applied SPC methods in the United
States during World War II, thereby successfully improving quality in the
manufacture of munitions and other strategically important products.
Deming was also instrumental in introducing SPC methods to Japanese
industry afer the war had ended.
Shewhart created the basis for the control chart and the concept of
a state of statistical control by carefully designed experiments. While
Dr. Shewhart drew from pure mathematical statistical theories, he
understood that data from physical processes seldom produce a normal
distribution curve (a Gaussian distribution, also commonly referred to
as a bell curve). He discovered that observed variation in manufactur-
ing data did not always behave the same way as with data in nature (for
example, Brownian motion of particles). Dr. Shewhart concluded that
while every process displays variation, some processes display controlled
variation that is natural to the process (common causes of variation),
while others display uncontrolled variation that is not present in the pro-
cess causal system at all times (special causes of variation).
general
Te following description relates to manufacturing rather than to the ser-
vice industry, although the principles of SPC can be successfully applied
to either. SPC has also been successfully applied to detecting changes in
organizational behavior, with social network change detection introduced
by McCulloh (2007).
In mass manufacturing, the quality of the fnished article was tradi-
tionally achieved through postmanufacturing inspection of the product,
accepting or rejecting each article (or samples from a production lot) based
© 2010 by Taylor and Francis Group, LLC
Special Topics in Quality  •  103
on how well it met its design specifcations. In contrast, SPC uses statisti-
cal tools to observe the performance of the production process in order to
predict signifcant deviations that may later result in rejected product.
Two kinds of variations occur in all manufacturing processes; both
these process variations cause subsequent variations in the fnal product:
Te frst are known as natural or common causes of variation and may
be variations in temperature, specifcations of raw materials or electrical
current, and so on. Tese variations are small, and are generally near to
the average value. Te pattern of variation will be similar to those found
in nature, and the distribution forms the bell-shaped normal distribution
curve (see Figure 6.1). Te second kind is known as special causes, and
happens less frequently than the frst.
For example, a breakfast cereal–packaging line may be designed to
fll each cereal box with 500 grams of product, but some boxes will have
slightly more than 500 grams, and some will have slightly less, in accor-
dance with a distribution of net weights. If the production process, its
inputs, or its environment changes (for example, the machines doing the
manufacture begin to wear), this distribution can change. For example,
as its cams and pulleys wear out, the cereal-flling machine may start put-
ting more cereal into each box than specifed. If this change is allowed
to continue unchecked, more and more product will be produced that
falls outside the tolerances of the manufacturer or consumer, resulting in
waste. While in this case, the waste is in the form of “free” product for the
consumer, typically waste consists of rework or scrap.
Series 1
–3s –2s –1s X 1s 2s 3s
0.3
0.25
0.15
0.05
0.2
0.1
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
68.26%
95.46%
99.73%
Figure 6.1
Normal curve.
© 2010 by Taylor and Francis Group, LLC
104  •  Quality Management: Teory and Application
By observing at the right time what happened in the process that led to
a change, the quality engineer or any member of the team responsible for
the production line can troubleshoot the root cause of the variation that
has crept into the process and correct the problem.
table 6.2
Statistical Methods Applied to Operations
Statistic Formula Used For
attribute control charts
P Chart
CL p
p p
n
±

( )
3
1
Process; tracking
proportion
nonconforming
C Chart
CL c c ±
v v
3
Process: tracking
nonconformities
Np Chart
CL np np p ± −
( )
3 1
Process: tracking multiple
nonconformities per unit
U Chart
CL u
u
n
± 3
Process: tracking multiple
nonconformities per
sample
variable control charts
X Chart
CL X A R ±
2
Product: tracking product
consistency and accuracy
R Chart CL D R
4
Product: tracking product
consistency and accuracy
X
s
Chart CL X A S ±
3
Product: tracking product
consistency and accuracy
S Chart CL B S
4
Product: tracking product
consistency and accuracy
Where n = sample size, = average of sample standard deviations, A B D
2 4 4
,
,
= constants,
X = average of samples averages, and R = average of sample ranges.
table 6.3
SPC Constants
N D4 B4 A2 k1 k2 d2
2 3.268 3.267 1.860 4.56 3.65 1.128
3 2.574 2.568 1.023 3.05 2.70 1.693
4 2.282 2.266 0.729 2.50 2.30 2.059
5 2.115 2.089 0.577 2.326
6 2.004 1.970 0.483 2.534
© 2010 by Taylor and Francis Group, LLC
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Quality-Engineering Formulas
Name Equation Used For
Process Capability
Cp
US LS



Product design versus process
Upper Capability
Cp
US X
u


3
)
σ
Product design versus process
Lower Capability
Cp
X LS
L


3
)
σ
Product design versus process
Sigma Estimation
)
σ
R
d
2
Product design versus process
Part per Million
PPM
R
n
e
×1 000 000 , ,
Process
Repeatability and
Reproducibility
R R R k X k
R k
n r
diff
& ×
( )
+ ×
( )

×
( )
×
( )

¸

1
]
1
1
2
2
2
1
2
11
% &
&
R R
R R
US LS

( )

( )
¸
¸

_
,

100

σ σ σ
c a b

( )
+
( )
2 2
Measurement analysis
Where US = upper specifcation, LS = lower specifcation, n = number of parts, r = number of trials, R
e
= number of nonconformities, and k
1
, k
2
, and
d
2
= constants.
© 2010 by Taylor and Francis Group, LLC
106  •  Quality Management: Teory and Application
SPC indicates when an action should be taken in a process, but it also
indicates when no action should be taken. An example is a person who
would like to maintain a constant body weight and takes weight measure-
ments weekly. A person who does not understand SPC concepts might
start dieting every time his or her weight increased, or eat more every
time his or her weight decreased. Tis type of action could be harmful and
possibly generate even more variation in body weight. SPC would account
for normal weight variation and better indicate when the person is in fact
gaining or losing weight.
risk analysis
Risk analysis is the science of risks and their probability and evaluation.
Te term cindynics (from the Greek kindunos, “danger”) has been
proposed for this feld. Tis term is used in France, but has not been widely
table 6.5
Statistical Sampling Plan
Lot Size Acceptable Nonconformance Levels and Sample Sizes
From To 2.5% 4.0% 6.5% 10%
2 8 5 3 2 2
9 15 5 3 2 2
16 25 5 3 3 2
26 50 5 5 5 3
51 90 7 6 5 4
91 150 11 7 6 5
151 280 13 10 7 6
281 500 16 11 9 7
501 1,200 19 15 11 8
1,201 3,200 23 18 13 9
3,201 10,000 29 22 15 9
10,001 35,000 35 29 15 9
35,001 150,000 40 29 15 9
150,001 500,000 40 29 15 9
500,001 >500,001 40 29 15 9
Reject on one nonconformity and accept on zero nonconformities.
© 2010 by Taylor and Francis Group, LLC
Special Topics in Quality  •  107
adopted in the English-speaking world. Probabilistic risk assessment is
the analysis strategy usually employed in science and engineering.
risk analysis and the risk workshop
As part of the risk management process, risk analysis for each project
should be performed. Te data from this would be based on risk discus-
sion workshops to identify potential issues and risks ahead of time before
these were to pose negative cost and/or schedule impacts (see the article
on cost contingency for a discussion of the estimation of cost impacts).
Te risk workshops should be chaired by a small group, ideally between
6 and 10 individuals from the various departmental functions (e.g., proj-
ect manager, construction manager, site superintendent, and representa-
tives from operations, procurement, [project] controls, etc.) so as to cover
every risk element from diferent perspectives.
Te outcome of the risk analysis would be the creation and review of the
risk register to identify and quantify risk elements to the project and their
potential impact.
Given that risk management is a continuous and iterative process, the
risk workshop members would regroup at regular intervals and project
milestones to review the risk register mitigation plans, make changes to
it as appropriate, and, following those changes, rerun the risk model. By
constantly monitoring risks, they can successfully mitigate them, resulting
in a cost and schedule savings with a positive impact on the project.
Probabilistic risk assessment (PRA) (or probabilistic safety assessment
or analysis) is a systematic and comprehensive methodology to evaluate
risks associated with a complex engineered technological entity (such as
airliners or nuclear power plants). Risk in a PRA is defned as a feasible
detrimental outcome of an activity or action. In a PRA, risk is character-
ized by two quantities:
Te magnitude (severity) of the possible adverse consequence(s)
Te likelihood (probability) of occurrence of each consequence
Consequences are expressed numerically (e.g., the number of peo-
ple potentially hurt or killed), and their likelihoods of occurrence are
expressed as probabilities or frequencies (i.e., the number of occurrences
© 2010 by Taylor and Francis Group, LLC
108  •  Quality Management: Teory and Application
or the probability of occurrence per unit time). Te total risk is the sum
of the products of the consequences multiplied by their probabilities. Te
spectrums of risks across classes of events are also of concern, and are
usually controlled in licensing processes (it would be of concern if rare but
high-consequence events were found to dominate the overall risk).
Probabilistic risk assessment usually answers three basic questions:
What can go wrong with the studied technological entity, or what are
the initiators or initiating events (undesirable starting events) that
lead to adverse consequence(s)?
What and how severe are the potential detriments or the adverse con-
sequences that the technological entity may be eventually subjected
to as a result of the occurrence of the initiator?
How likely to occur are these undesirable consequences, or what are
their probabilities or frequencies?
Two common methods of answering this last question are event tree
analysis and fault tree analysis—for explanations of these, see safety
engineering.
In addition to the above methods, PRA studies require special but ofen
very important analysis tools like human reliability analysis (HRA) and
common cause or failure (CCF) analysis. HRA deals with methods for
modeling human error, while CCF analysis deals with methods for evalu-
ating the efect of intersystem and intrasystem dependencies which tend
to cause simultaneous failures and thus signifcant increases in overall
risk.
PRA studies have been successfully performed for complex techno-
logical systems at all phases of the life cycle from concept defnition and
predesign through safe removal from operation. For example, the Nuclear
Regulatory Commission (NRC) required that each nuclear power plant in
the United States perform an individual plant examination (IPE) to identify
and quantify plant vulnerabilities to hardware failures and human faults in
design and operation. Although no method was specifed for performing
such an evaluation, the NRC requires risk analysis (Business).
Risk analysis is a technique to identify and assess factors that may jeop-
ardize the success of a project or the achievement of a goal. Tis technique
also helps to defne preventive measures to reduce the probability of these
factors from occurring, as well as identify countermeasures to successfully
© 2010 by Taylor and Francis Group, LLC
Special Topics in Quality  •  109
deal with these constraints when they develop to avert possible negative
efects on the competitiveness of the company.
One of the more popular methods to perform a risk analysis in the com-
puter feld is called the facilitated risk analysis process (FRAP).
Facilitated risk analysis Process
FRAP analyzes one system, application, or segment of business
processes at a time.
Practitioners of FRAP believe that additional eforts to develop pre-
cisely quantifed risks are not cost-efective because
such estimates are time-consuming;
risk documentation becomes too voluminous for practical use; and
specifc loss estimates are generally not needed to determine if
controls are needed.
Afer identifying and categorizing risks, the FRAP team identifes the
controls that could mitigate the risk. Te decision for what controls are
needed lies with the business manager. Te team’s conclusions as to what
risks exist and what controls are needed are documented, along with a
related action plan for control implementation.
Tree of the most important risks a sofware company faces are unex-
pected changes in (1) revenue, (2) costs from those budgeted, and (3) the
amount of specialization of the sofware planned. Risks that afect rev-
enues can be unanticipated competition, privacy, intellectual property
rights problems, and unit sales that are less than forecasted; unexpected
development costs also create risk that can be in the form of more rework
than anticipated, security holes, and privacy invasions.
Narrow specialization of sofware with a large amount of research and
development expenditures can lead to both business and technologi-
cal risks, since specialization does not lead to lower unit costs of sofware
(Messerschmidt and Szyperski 2004). Combined with the decrease in
the potential customer base, specialization risk can be signifcant for a sof-
ware frm. Afer probabilities of scenarios have been calculated with risk
analysis, the process of risk management can be applied to help manage the
risk.
Methods like applied information economics add to and improve on
risk analysis methods by introducing procedures to adjust subjective
© 2010 by Taylor and Francis Group, LLC
110  •  Quality Management: Teory and Application
probabilities, compute the value of additional information, and use the
results in part of a larger portfolio management problem.
reliability engineering
reliability theory
Reliability theory is the foundation of reliability engineering. For engi-
neering purposes, reliability is defned as the probability that a device will
perform its intended function during a specifed period of time under
stated conditions.
Mathematically, this may be expressed as
R f x dx
t
t
( )

( )

where f x
( )
is the failure probability density function, and t is the length
of the period (which is assumed to start from time zero).
Reliability engineering is concerned with four key elements of this
defnition:
First, reliability is a probability. Tis means that failure is regarded as
a random phenomenon: it is a recurring event, and we do not express
any information on individual failures, the causes of failures, or
relationships between failures, except that the likelihood for failures
to occur varies over time according to the given probability function.
Reliability engineering is concerned with meeting the specifed
probability of success, at a specifed statistical confdence level.
Second, reliability is predicated on “intended function”: generally, this
is taken to mean operation without failure. However, even if no
individual part of the system fails, but the system as a whole does
not do what was intended, then the failure is still charged against
the system reliability. Te system requirements specifcation is the
criterion against which reliability is measured.
Tird, reliability applies to a specifed period of time. In practical terms,
this means that a system has a specifed chance that it will operate
© 2010 by Taylor and Francis Group, LLC
Special Topics in Quality  •  111
without failure before a specifed time. Reliability engineering ensures
that components and materials will meet the requirements during the
specifed time. Units other than time may sometimes be used: the
automotive industry might specify reliability in terms of miles;
the military might specify reliability of a gun for a certain number
of rounds fred; or a piece of mechanical equipment may have a
reliability rating value in terms of cycles of use.
Fourth, reliability is restricted to operation under stated conditions.
Tis constraint is necessary because it is impossible to design a
system for unlimited conditions. A Mars Rover will have diferent
specifed conditions than the family car. Te operating environment
must be addressed during design and testing.
reliability Program Plan
Many tasks, methods, and tools can be used to achieve reliability. Every
system requires a diferent level of reliability. A commercial airliner must
operate under a wide range of conditions. Te consequences of failure are
grave, but there is a correspondingly higher budget. A pencil sharpener
may be more reliable than an airliner, but it has a much diferent set of
operational conditions, insignifcant consequences of failure, and a much
lower budget.
A reliability program plan is used to document exactly what tasks, meth-
ods, tools, analyses, and tests are required for a particular system. For com-
plex systems, the reliability program plan is a separate document. For simple
systems, it may be combined with the systems engineering management
plan. Te reliability program plan is essential for a successful reliability pro-
gram and is developed early during system development. It specifes not
only what the reliability engineer does, but also the tasks performed by oth-
ers. Te reliability program plan is approved by top program management.
reliability requirements
For any system, one of the frst tasks of reliability engineering is to
adequately specify the reliability requirements. Reliability requirements
address the system itself, test and assessment requirements, and associated
tasks and documentation. Reliability requirements are included in the
appropriate system and subsystem requirement specifcations, test plans,
and contract statements.
© 2010 by Taylor and Francis Group, LLC
112  •  Quality Management: Teory and Application
System Reliability Parameters
Requirements are specifed using reliability parameters. Te most common
reliability parameter is mean time between failure (MTBF), which can
also be specifed as the failure rate or the number of failures during a given
period. Tese parameters are very useful for systems that are operated on a
regular basis, such as most vehicles, machinery, and electronic equipment.
Reliability increases as the MTBF increases. Te MTBF is usually speci-
fed in hours, but can also be used with other units of measurement such
as miles or cycles.
In other cases, reliability is specifed as the probability of mission
success. For example, reliability of a scheduled aircraf fight can be
specifed as a dimensionless probability or a percentage.
A special case of mission success is the single-shot device or system.
Tese are devices or systems that remain relatively dormant and operate
only once. Examples include automobile airbags, thermal batteries, and
missiles. Single-shot reliability is specifed as a probability of success, or is
subsumed into a related parameter. Single-shot missile reliability may be
incorporated into a requirement for the probability of hit.
For such systems, the probability of failure on demand (PFD) is the reli-
ability measure. Tis PFD is derived from failure rate and mission time
for nonrepairable systems. For repairable systems, it is obtained from
failure rate and mean time to recovery (MTTR) and test interval. Tis
measure may not be unique for a given system, as the measure depends on
the kind of demand. In addition to system-level requirements, reliability
requirements may be specifed for critical subsystems. In all cases, reli-
ability parameters are specifed with appropriate statistical confdence
intervals.
reliability modeling
Reliability modeling is the process of predicting or understanding the
reliability of a component or system. Two separate felds of investigation
are common: the physics of failure approach uses an understanding of
the failure mechanisms involved, such as crack propagation or chemical
corrosion; and the parts stress modeling approach is an empirical method
for prediction based on counting the number and type of components of
the system, and the stress they undergo during operation.
© 2010 by Taylor and Francis Group, LLC
Special Topics in Quality  •  113
For systems with a clearly defned failure time (which is sometimes not
given for systems with a drifing parameter), the empirical distribution
function of these failure times can be determined. Tis is done in general
in an accelerated experiment with increased stress. Tese experiments can
be divided into two main categories.
Early failure rate studies determine the distribution with a decreasing
failure rate over the frst part of the bathtub curve. Here, in general, only
moderate stress is necessary. Te stress is applied for a limited period
of time in what is called a censored test. Terefore, only the part of the
distribution with early failures can be determined.
In so-called zero-defect experiments, only limited information about the
failure distribution is acquired. Here the stress, stress time, or the sample
size is so low that not a single failure occurs. Due to the insufcient sample
size, only an upper limit of the early failure rate can be determined. At any
rate, it looks good for the customer if there are no failures.
In a study of the intrinsic failure distribution, which is ofen a material
property, higher stresses are necessary to achieve failure in a reasonable
period of time. Several degrees of stress have to be applied to determine an
acceleration model. Te empirical failure distribution is ofen parameter-
ized with a Weibull or a log-normal model.
It is a general praxis to model the early failure rate with an exponen-
tial distribution. Tis less complex model for the failure distribution has
only one parameter: the constant failure rate. In such cases, the chi-square
distribution can be used to fnd the goodness of ft for the estimated fail-
ure rate. Compared to a model with a decreasing failure rate, this is quite
pessimistic. Combined with a zero-defect experiment, this becomes even
more pessimistic. Te efort is greatly reduced in this case: one does not
have to determine a second model parameter (e.g., the shape parameter
of a Weibull distribution) or its confdence interval (e.g., by a maximum
likelihood approach, or MLE), and the sample size is much smaller.
reliability test requirements
Because reliability is a probability, even highly reliable systems have some
chance of failure. However, testing reliability requirements is problem-
atic for several reasons. A single test is insufcient to generate enough
statistical data. Multiple tests or long-duration tests are usually very
expensive. Some tests are simply impractical. Reliability engineering
© 2010 by Taylor and Francis Group, LLC
114  •  Quality Management: Teory and Application
is used to design a realistic and afordable test program that provides
enough evidence that the system meets its requirements. Statistical
confdence levels are used to address some of these concerns. A certain
parameter is expressed along with a corresponding confdence level: for
example, an MTBF of 1,000 hours at a 90 percent confdence level. From
this specifcation, the reliability engineer can design a test with explicit
criteria for the number of hours and number of failures until the require-
ment is met or failed.
Actual mean time between failures is calculated as follows:

MTBF
units hours
Failures

×
∑ ∑


(60% failure rate)
System survivability is calculated as follows:

R e
s
t
MTBF


( )

where –t is the operational hours of concern and e = 2.18.
Te combination of reliability parameter value and confdence level
greatly afects the development cost and the risk to both the customer and
producer. Care is needed to select the best combination of requirements.
Reliability testing may be performed at various levels, such as the compo-
nent, subsystem, and system levels. Also, many factors must be addressed
during testing, such as extreme temperature and humidity, shock, vibra-
tion, and heat. Reliability engineering determines an efective test strategy
so that all parts are exercised in relevant environments. For systems that
must last many years, reliability engineering may be used to design an
accelerated life test.
requirements for reliability tasks
Reliability engineering must also address requirements for various reli-
ability tasks and documentation during system development, testing,
production, and operation. Tese requirements are generally specifed in
the contract statement of work and depend on how much leeway the cus-
tomer wishes to provide to the contractor. Reliability tasks include various
© 2010 by Taylor and Francis Group, LLC
Special Topics in Quality  •  115
analyses, planning, and failure reporting. Task selection depends on the
criticality of the system as well as cost. A critical system may require a
formal failure-reporting and failure review process throughout develop-
ment, whereas a noncritical system may rely on fnal test reports. Te most
common reliability program tasks are documented in reliability program
standards, such as MIL-STD-785 (U.S. Air Force 1986) and IEEE 1332
(Institute of Electrical and Electronics Engineers 1998).
design for reliability
Design for reliability (DFR) is an emerging discipline that refers to the
process of designing reliability into products. Tis process encompasses
several tools and practices, and describes the order of their deployment
that an organization needs to have in place in order to drive reliability
into their products. Typically, the frst step in the DFR process is to set the
system’s reliability requirements. Reliability must be “designed into” the
system. During system design, the top-level reliability requirements are
then allocated to subsystems by design and reliability engineers working
together.
Reliability design begins with the development of a model. Reliability
models use block diagrams and fault trees to provide a graphical means of
evaluating the relationships between diferent parts of the system. Tese
models incorporate predictions based on parts-count failure rates taken
from historical data. While the predictions are ofen not accurate in an
absolute sense, they are valuable to assess relative diferences in design
alternatives.
Fault tree diagrams
One of the most important design techniques is redundancy. Tis means
that if one part of the system fails, there is an alternate success path,
such as a backup system. An automobile brake light might use two light
bulbs. If one bulb fails, the brake light still operates using the other bulb.
Redundancy signifcantly increases system reliability, and is ofen the only
viable means of doing so. However, redundancy is difcult and expensive,
and is therefore limited to critical parts of the system. Another design
technique, the physics of failure, relies on understanding the physical pro-
cesses of stress, strength, and failure at a very detailed level. Te material
© 2010 by Taylor and Francis Group, LLC
116  •  Quality Management: Teory and Application
or component can then be redesigned to reduce the probability of failure.
Another common design technique is component derating: selecting
components whose tolerance signifcantly exceeds the expected stress,
as by using a heavier gauge wire that exceeds the normal specifcation for
the expected electrical current.
Many tasks, techniques, and analyses are specifc to particular indus-
tries and applications. Commonly these include the following:
Built-in test (BIT)
Failure mode and efects analysis (FMEA)
Reliability simulation modeling
Termal analysis
Reliability block diagram analysis
Fault tree analysis
Sneak circuit analysis
Accelerated testing
Reliability growth analysis
Weibull analysis
Electromagnetic analysis
Statistical interference
Results are presented during the system design reviews and logistics
reviews. Reliability is just one requirement among many system require-
ments. Engineering trade studies are used to determine the optimum
balance between reliability and other requirements and constraints.
reliability testing
A Reliability Sequential Test Plan
Te purpose of reliability testing is to discover potential problems with
the design as early as possible and, ultimately, provide confdence that the
system meets its reliability requirements.
Reliability testing may be performed at several levels. Complex sys-
tems may be tested at the component, circuit board, unit, assembly, sub-
system, and system levels. (Te test-level nomenclature varies among
applications.) For example, performing environmental stress–screening
tests at lower levels, such as with piece parts or small assemblies, catches
© 2010 by Taylor and Francis Group, LLC
Special Topics in Quality  •  117
problems before they cause failures at higher levels. Testing proceeds dur-
ing each level of integration through full-up system testing, developmen-
tal testing, and operational testing, thereby reducing program risk. System
reliability is calculated at each test level. Reliability growth techniques and
failure-reporting, analysis, and corrective action systems (FRACAS) are
ofen employed to improve reliability as testing progresses. Te drawbacks
to such extensive testing are time and expense. Customers may choose to
accept more risk by eliminating some or all lower levels of testing.
It is not always feasible to test all system requirements. Some systems
are prohibitively expensive to test; some failure modes may take years to
observe; some complex interactions result in a huge number of possible
test cases; and some tests require the use of limited test ranges or other
resources. In such cases, diferent approaches to testing can be used, such
as accelerated life testing, the design of experiments, and simulations.
Te desired level of statistical confdence also plays an important role
in reliability testing. Statistical confdence is increased by increasing
either the test time or the number of items tested. Reliability test plans are
designed to achieve the specifed reliability at the specifed confdence level
with the minimum number of test units and test time. Diferent test plans
result in diferent levels of risk to the producer and consumer. Te desired
reliability, statistical confdence, and risk levels for each side infuence the
ultimate test plan. Good test requirements ensure that the customer and
developer agree in advance on how reliability requirements will be tested.
A key aspect of reliability testing is to defne failure. Although this may
seem obvious, there are many situations where it is not clear whether
a failure is really the fault of the system. Variations in test conditions,
operator diferences, weather, and unexpected situations create difer-
ences between the customer and the system developer. One strategy to
address this issue is to use a scoring conference process. A scoring confer-
ence includes representatives from the customer, the developer, the test
organization, and the reliability organization, and sometimes indepen-
dent observers. Te scoring conference process is defned in the state-
ment of work. Each test case is considered by the group and “scored” as a
success or failure. Tis scoring is the ofcial result used by the reliability
engineer.
As part of the requirements phase, the reliability engineer develops a test
strategy with the customer. Te test strategy makes trade-ofs between the
needs of the reliability organization, which wants as much data as possible,
© 2010 by Taylor and Francis Group, LLC
118  •  Quality Management: Teory and Application
and constraints such as cost, schedule, and available resources. Test plans
and procedures are developed for each reliability test, and results are doc-
umented in ofcial reports.
accelerated testing
Te purpose of accelerated life testing is to induce feld failure in the
laboratory at a much faster rate by providing a harsher, but nonetheless
representative, environment. In such a test, the product is expected to fail
in the lab just as it would have failed in the feld—but in much less time.
Te main objective of an accelerated test is either of the following:
To discover failure modes
To predict the normal feld life from the high-stress lab life
Accelerated testing needs planning as follows:
Defne the objective and scope of the test.
Collect required information about the product.
Identify the stress(es).
Determine the level of stress(es).
Conduct the accelerated test, and analyze the accelerated data.
Common ways to determine a life stress relationship are the following:
Arrhenius model
Eyring model
Inverse power law model
Temperature-humidity model
Temperature nonthermal model
software reliability
Sofware reliability is a special aspect of reliability engineering. System
reliability, by defnition, includes all parts of the system, including
hardware, sofware, operators, and procedures. Traditionally, reliabil-
ity engineering focuses on critical hardware parts of the system. Since
the widespread use of digital integrated circuit technology, sofware
© 2010 by Taylor and Francis Group, LLC
Special Topics in Quality  •  119
has become an increasingly critical part of most electronics and, hence,
nearly all present-day systems. Tere are signifcant diferences, how-
ever, in how sofware and hardware behave. Most hardware unreliability
is the result of a component or material failure that results in the sys-
tem not performing its intended function. Repairing or replacing the
hardware component restores the system to its original unfailed state.
However, sofware does not fail in the same sense that hardware fails.
Instead, sofware unreliability is the result of unanticipated results of
sofware operations. Even relatively small sofware programs can have
astronomically large combinations of inputs and states that are infea-
sible to exhaustively test. Restoring sofware to its original state only
works until the same combination of inputs and states results in the
same unintended result. Sofware reliability engineering must take this
into account.
Despite this diference in the source of failure between sofware and
hardware—sofware doesn’t wear out—some in the sofware reliability–en-
gineering community believe statistical models used in hardware reliability
are nevertheless useful as a measure of sofware reliability, describing what
we experience with sofware: the longer you run sofware, the higher the
probability you’ll eventually use it in an untested manner and fnd a latent
defect that results in a failure (Shooman 1987; Musa 2005; Denney 2005).
As with hardware, sofware reliability depends on good requirements,
design, and implementation. Sofware reliability engineering relies heav-
ily on a disciplined sofware-engineering process to anticipate and design
against unintended consequences. Tere is more overlap between sofware
quality engineering and sofware reliability engineering than between
hardware quality and reliability. A good sofware development plan is a
key aspect of the sofware reliability program. Te sofware development
plan describes the design and coding standards, peer reviews, unit tests,
confguration management, sofware metrics, and sofware models to be
used during sofware development.
A common reliability metric is the number of sofware faults, usu-
ally expressed as faults per thousand lines of code. Tis metric, along
with sofware execution time, is key to most sofware reliability models
and estimates. Te theory is that the sofware reliability increases as the
number of faults (or fault density) goes down. Establishing a direct con-
nection between fault density and MTBF is difcult, however, because
of the way sofware faults are distributed in the code, their severity, and
© 2010 by Taylor and Francis Group, LLC
120  •  Quality Management: Teory and Application
the probability of the combination of inputs necessary to encounter the
fault. Nevertheless, fault density serves as a useful indicator for the reli-
ability engineer. Other sofware metrics, such as complexity, are also
used.
Testing is even more important for sofware than hardware. Even the
best sofware development process results in some sofware faults that
are nearly undetectable until tested. As with hardware, sofware is tested
at several levels, starting with individual units, through integration and
full-up system testing. Unlike with hardware, it is inadvisable to skip lev-
els of sofware testing. During all phases of testing, sofware faults are dis-
covered, corrected, and retested. Reliability estimates are updated based
on the fault density and other metrics. At the system level, MTBF data are
collected and used to estimate reliability. Unlike with hardware, perform-
ing the exact same test on the exact same sofware confguration does not
provide increased statistical confdence. Instead, sofware reliability uses
diferent metrics such as test coverage.
Eventually, the sofware is integrated with the hardware in the top-level
system, and sofware reliability is subsumed by system reliability. Te
Sofware Engineering Institute’s capability maturity model is a common
means of assessing the overall sofware development process for reliability
and quality purposes.
reliability Operational assessment
Afer a system is produced, reliability engineering during the system oper-
ation phase monitors, assesses, and corrects defciencies. Data collection
and analysis are the primary tools used. When possible, system failures
and corrective actions are reported to the reliability engineering organi-
zation. Te data are constantly analyzed using statistical techniques, such
as Weibull analysis and linear regression, to ensure the system reliability
meets the specifcation. Reliability data and estimates are also key inputs
for system logistics. Data collection is highly dependent on the nature
of the system. Most large organizations have quality control groups that
collect failure data on vehicles, equipment, and machinery. Consumer
product failures are ofen tracked by the number of returns. For systems
in dormant storage or on standby, it is necessary to establish a formal
surveillance program to inspect and test random samples. Any changes
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Special Topics in Quality  •  121
to the system, such as feld upgrades or recall repairs, require additional
reliability testing to ensure the reliability of the modifcation.
reliability Organizations
Systems of any signifcant complexity are developed by organizations of
people, such as a commercial company or a government agency. Te reli-
ability-engineering organization must be consistent with the company’s
organizational structure. For small, noncritical systems, reliability engi-
neering may be informal. As complexity grows, the need arises for a formal
reliability function. Because reliability is important to the customer, the
customer may even specify certain aspects of the reliability organization.
Tere are several common types of reliability organizations. Te project
manager or chief engineer may employ one or more reliability engineers
directly. In larger organizations, there is usually a product assurance or
specialty-engineering organization, which may include reliability, main-
tainability, quality, safety, human factors, logistics, and so on. In such
case, the reliability engineer reports to the product assurance manager or
specialty-engineering manager.
In some cases, a company may wish to establish an independent reli-
ability organization. Tis is desirable to ensure that the system reliability,
testing of which is ofen expensive and time-consuming, is not unduly
slighted due to budget and schedule pressures. In such cases, the reliabil-
ity engineer works on the project on a day-to-day basis, but is actually
employed and paid by a separate organization within the company.
Because reliability engineering is critical to early system design, it has
become common for reliability engineers; however, the organization is
structured to work as part of an integrated product team.
Certification
Te American Society for Quality (ASQ) has a program to become a
certifed reliability engineer, or CRE. Certifcation is based on education,
experience, and a certifcation test; periodic recertifcation is required. Te
body of knowledge for the test includes reliability management, design
evaluation, product safety, statistical tools, design and development,
modeling, reliability testing, collecting and using data, and so on.
© 2010 by Taylor and Francis Group, LLC
122  •  Quality Management: Teory and Application
reliability engineering education
Some universities ofer graduate degrees in reliability engineering (e.g.,
the University of Maryland). Reliability engineers typically have an
engineering degree, which can be in any feld of engineering, from an
accredited university or college program. Many engineering programs
ofer reliability courses, and some universities have entire reliability-
engineering programs. A reliability engineer may be registered as a pro-
fessional engineer by the state, but this is not required by most employers.
Tere are many professional conferences and industry training programs
available for reliability engineers. Several professional organizations exist
for reliability engineers, including the IEEE Reliability Society, the ASQ,
and the Society of Reliability Engineers (SRE).
systems analysis
System analysis is the branch of electrical engineering that characterizes
electrical systems and their properties. Although many of the methods
of system analysis can be applied to nonelectrical systems, it is a subject
ofen studied by electrical engineers because it has direct relevance to
many other areas of their discipline, most notably signal processing and
communication systems.
characterization of systems
A system is characterized by how it responds to input signals. In general,
a system has one or more input signals and one or more output signals.
Terefore, one natural characterization of systems is by how many inputs
and outputs they have:
Single input, single output (SISO)
Single input, multiple outputs (SIMO)
Multiple inputs, single output (MISO)
Multiple inputs, multiple outputs (MIMO)
It is ofen useful (or necessary) to break up a system into smaller pieces
for analysis. Terefore, we can regard a SIMO system as multiple SISO
© 2010 by Taylor and Francis Group, LLC
Special Topics in Quality  •  123
systems (one for each output), and the same applies for a MIMO system.
By far, the greatest amount of work in system analysis has been with SISO
systems, although many parts inside SISO systems have multiple inputs
(such as adders).
Signals can be continuous or discrete in time, as well as continuous or
discrete in the values they take at any given time:
Signals that are continuous in time and continuous in value are •
known as analog signals.
Signals that are discrete in time and discrete in value are known as •
digital signals.
Signals that are discrete in time and continuous in value are called •
discrete time signals. While important mathematically, systems that
process discrete time signals are difcult to physically realize. Te
methods developed for analyzing discrete time signals and systems
are usually applied to digital and analog signals and systems.
Signals that are continuous in time and discrete in value are some- •
times seen in the timing analysis of logic circuits, but have little to
no use in system analysis.
With this categorization of signals, a system can then be characterized
as to which type of signals it deals with:
A system that has analog input and analog output is known as an •
analog system.
A system that has digital input and digital output is known as a •
digital system.
Systems with analog input and digital output or digital input and analog
output are possible. However, it is usually easiest to break up these systems
into their analog and digital parts for analysis, as well as the necessary
analog-to-digital or digital-to-analog converter.
Another way to characterize systems is by whether their output at any
given time depends only on the input at that time, or perhaps on the input
at some time in the past (or in the future!).
Memoryless systems do not depend on any past input.
Systems with memory do depend on past input.
Causal systems do not depend on any future input.
Noncausal or anticipatory systems do depend on future input.
© 2010 by Taylor and Francis Group, LLC
124  •  Quality Management: Teory and Application
Note: It is not possible to physically realize a noncausal system operating
in “real time.” However, from the standpoint of analysis, these systems are
important for two reasons. First, the ideal system for a given application is
ofen a noncausal system, which although not physically possible, can give
insight into the design of a derivated causal system to accomplish a similar
purpose. Second, there are instances when a system does not operate in
“real time” but rather is simulated “ofine” by a computer.
Analog systems with memory may be further classifed as lumped or
distributed. Te diference can be explained by considering the meaning
of memory in a system. Future output of a system with memory depends
on future input and a number of state variables, such as values of the input
or output at various times in the past. If the number of state variables
necessary to describe future output is fnite, the system is lumped; if it is
infnite, the system is distributed.
Finally, systems may be characterized by certain properties which
facilitate their analysis:
A system is linear if it has superposition and scaling properties.
A system that is not linear is nonlinear.
If the output of a system does not depend explicitly on time, the system
is said to be time-invariant; otherwise, it is time-variant,
A system that will always produce the same output for a given input is
said to be deterministic.
A system that will produce diferent outputs for a given input is said to
be stochastic.
Tere are many methods of analysis developed specifcally for linear
time-invariant (LTI) deterministic systems. Unfortunately, in the case
of analog systems, none of these properties are ever perfectly achieved.
Linearity implies that operation of a system can be scaled to arbitrarily
large magnitudes, which is not possible. Time-invariance is violated by
aging efects that can change the outputs of analog systems over time
(usually years or even decades). Termal noise and other random phe-
nomena ensure that the operation of any analog system will have some
degree of stochastic behavior. Despite these limitations, however, it is
usually reasonable to assume that deviations from these ideals will be
small.
© 2010 by Taylor and Francis Group, LLC
Special Topics in Quality  •  125
lti systems
As mentioned above, there are many methods of analysis developed specif-
cally for LTI systems. Tis is due to their simplicity of specifcation. An LTI
system is completely specifed by its transfer function (which is a rational
function for digital and lumped analog LTI systems). Alternatively, we can
think of an LTI system as being completely specifed by its frequency response.
A third way to specify an LTI system is by its characteristic linear diferential
equation (for analog systems) or linear diference equation (for digital sys-
tems). Which description is most useful depends on the application.
Te distinction between lumped and distributed LTI systems is impor-
tant. A lumped LTI system is specifed by a fnite number of parameters,
be it the zeros and poles of its transfer function, or the coefcients of its
diferential equation, whereas specifcation of a distributed LTI system
requires a complete function.
auditing
Quality audit is the process of systematic examination of a quality system
carried out by an internal or external quality auditor or an audit team. It
is an important part of an organization’s quality management system and
is a key element in the ISO quality system standard, ISO 9001.
Quality audits are typically performed at predefned time intervals and
ensure that the institution has clearly defned internal quality-monitoring
procedures linked to efective action. Tis can help determine if the orga-
nization complies with the defned quality system processes and can
involve procedural or results-based assessment criteria.
With the upgrade of the ISO 9000 series of standards from the 1994
to 2000 series, the focus of the audits has shifed from purely procedural
adherence toward measurement of the actual efectiveness of the qual-
ity management system (QMS) and the results that have been achieved
through the implementation of a QMS.
Quality audits can be an integral part of compliance for regulatory
requirements. One example is the U.S. Food and Drug Administration,
which requires quality auditing to be performed as part of its Quality
System Regulation (QSR) for medical devices (Title 21 of the U.S. Code of
Federal Regulations, part 820).
© 2010 by Taylor and Francis Group, LLC
126  •  Quality Management: Teory and Application
Several countries have adopted quality audits in their higher educa-
tion system (New Zealand, Australia, Sweden, Finland, Norway, and the
United States). Initiated in the UK, the process of quality audit in the edu-
cation system focused primarily on procedural issues rather than on the
results or the efciency of a quality system implementation.
Audits can also be used for safety purposes. Evans and Parker (2008)
describe auditing as one of the most powerful safety-monitoring tech-
niques and “an efective way to avoid complacency and highlight slowly
deteriorating conditions,” especially when the auditing focuses not just on
compliance but also on efectiveness.
audit Planning and scheduling
Auditor Education and Training
An auditor must possess and maintain sufcient basic education and
training in order to perform audits in a professional manner.
Audit Initiation
Audits are initiated by the client either by request or through approval of
a program of audits submitted by the auditing department or group. Te
audit must be assigned to and be accepted by a qualifed auditor.
Audit Scope
Te scope of audits depends on the need as determined by the client and/
or auditing organization. In most cases, the scope of the quality system is
defned in the top-level quality manual.
Audit Objective
Audits determine compliance or noncompliance with established stan-
dards and assess the efectiveness of such standards. Te secondary
objective of a quality audit can be to determine opportunities and needs
for improvements in the operation and control systems, review perfor-
mances and results, and facilitate communication. Te intent of an audit
is that the auditor obtains sufcient evidence to draw conclusions relative
to the stated audit objective.
© 2010 by Taylor and Francis Group, LLC
Special Topics in Quality  •  127
Plan, schedule, and results
1. Audit plan 2. Schedule 3. Report (Result)
Element
Auditor(s)
Assigned
Date(s)
Audited
Next
Audit
Conformed?
N/A yes No AR
4.22 Quality manual
4.2.3 Control of documents
4.2.4 Control of records
5.1 Management
commitment
5.2 Customer focus
5.3 Quality focus
5.4.1 Quality objectives
5.4.2 Quality planning
5.5.1 Responsibility and
authority
5.5.3 Internal
communications
5.6 Management review
6.2.2 Competence awareness
and training
6.3 Infrastructure
7.2 Customer related process
7.3 Design and development
7.4 Purchasing
7.5.1 Production provision
7.5.2 Validation of process
7.5.3 Indentifcation and
traceablity
7.5.4.Customer property
7.5.5 Preservation of product
7.6 Calibration
8.2.1 Customer satisfaction
8.2.2 Internal audit
8.2.3 Monitoring and
measurement of processes
8.2.4 Monitoring and
measurement of product
8.4 Analysis of data
8.5.3. Preventative action
cOmments & ObservatiOns
Figure 6.2
Audit plan and report.
© 2010 by Taylor and Francis Group, LLC
128  •  Quality Management: Teory and Application
Frequency and Timing
Audit frequency may be determined by law or regulation, by the audit
program, by standards, or by the need of the client.
Te timing should be chosen with due regard to availability of evidential
material, unbiased observations, adequate cooperation and support from
the auditee, sufciency of the audit resources, and least cost.
Long-term planning provides a framework for an annual audit program.
Te individual audit assignments in the program must be further planned
in detail.
Long-Term Planning
Tis is usually carried out by the audit department or group. Te resulting
plan or program (see Figure 6.2) should be approved by the client. Te plan,
or program, should include the name of the organizational unit, the object
of the audit, and the expected duration and timing of each audit element.
Pre-Audit Review of System
Audits should be planned and carried out only where a quality system is
established. Pre-audit reviews are to verify the existence of a system or
individual documented procedure that can be audited.
Te planning should be conducted by the auditor, or lead auditor
with the assistance of the auditors assigned to the team. Audit elements
assigned to the individual auditors should be coordinated and integrated
in the audit plan.
Working Papers
Tese are all of the documents required for an efective and orderly execu-
tion of the audit plan (see Figure 6.3).
result
Sampling Plans
Sampling plans are used in the audit to ensure applicability, validity, and
reliability of the observation being made (see Figure 6.4).
© 2010 by Taylor and Francis Group, LLC
Special Topics in Quality  •  129
AUDITOR
Activity
Quality management system
4.1. General requirements
Te organization shall establish, document, implement,
and maintain a quality management system and
continually improve its effectiveness in accordance with
the requirements of this International Standard.
Te organization shall
a) Identify the processes needed for the quality
management system and their application
throughout organization (see 12).
b) Determine the sequence and interaction of
these processes.
c) Determine criteria and methods needed to
ensure that both the operation and control
of these processes are effective.
d) Ensure the availibility of resources and
information necessary to support the operation
and monitoring of these processes.
e) Monitor, measure and analyze these processes.
f) Implement actions necessary to achieve planned
results and continual improvement of these processes.
Tese processes shall be managed by the
organization in accordance with the
requirements of this International Standard.
When an organization chooses to outsource any
process that affects product conformity with
requirements, the organization shall ensure control
over such processes. Control of such outsource
processes shall be identified within the quality
management system.
Note: Process needed for the quality mangement
system referred to above should include processes for
management activities.
Comments
DATE:
Rating
Figure 6.3
Audit working paper.
© 2010 by Taylor and Francis Group, LLC
130  •  Quality Management: Teory and Application
Audit Implementation Steps
Te audit plan should be implemented through the following steps:
Notifcation to the auditee
Orientation of auditors and auditee
Examination
Follow-up and close-out
Reporting of results (management review)
C=0 SAMPLING PLAN
Tis table is read starting at the lef-hand column, reading down and to the right, and
fnding the correct sample size under the appropriate AQL. Te lot is rejected if one
non-conformance is found.
LOT SIZE AQLs/SAMPLE SIZES
FROM TO 2.2 4 6.5 10
2 8 5 3 2 2
9 15 5 3 2 2
16 25 5 3 3 2
26 50 5 5 5 3
51 90 7 6 5 4
91 150 11 7 6 5
151 280 13 10 7 6
281 500 16 11 9 7
501 1,200 19 15 11 8
1,201 3,200 23 18 13 9
3,201 10,000 29 22 15 9
10,001 35,000 35 29 15 9
35,001 150,000 40 29 15 9
150,001 500,000 40 29 15 9
500,001 >500,001 40 29 15 9
Figure 6.4
C = 0 sampling plan.
© 2010 by Taylor and Francis Group, LLC
Special Topics in Quality  •  131
Notification to Auditee
Advance notifcation allows the auditee to make fnal preparations for the
audit. Te audit plan should be forwarded with the notifcation.
Opening Meeting
Te audit team should meet when fnal preparation and decisions need to
be made. A brief meeting with the management of the organization to be
audited serves for clarifcation of the audit plan, introduction of the audi-
tors, and fnalization of procedures and meetings.
Information, Verification, and Evaluation
Te auditor must obtain sufcient, relevant information and evidence that
permit a valid and reliable verifcation and evaluation (see Figure 6.5).
Audit Observations
Audit observations are signifcant conclusions and results of the
examination.
Quality Auditing
Determine Objective
Determine Report
Associated Records
Validate Report
Interview for Requirements
Figure 6.5
Audit steps: Any process.
© 2010 by Taylor and Francis Group, LLC
132  •  Quality Management: Teory and Application
Audit Supervision
At the conclusion of the audit and prior to preparing the audit report,
a meeting should be held by the auditor or lead auditor with the audi-
tee’s senior management. Te main purpose of the meeting is to present
and clarify all audit observations to be reported, along with supporting
evidence, so that the auditee can initiate necessary corrective action efec-
tively without delay.
Audit Follow-Up
Follow-up consists of verifcation of corrective action resulting from
observations.
Preparation of the Report
Standards for the form and content of the report should be established
and followed.
Content of the Report
Te audit report should include the following:
Purpose, objective, and scope of the audit
Details of the audit plan, auditors, dates, and organization audited
Standards used
Observations and evidence
Noteworthy comments and recommendations
Follow-up corrective actions
reporting the audit
Review and Distribution
Management of the auditing organization should review and approve the
report prior to submitting it to the client. Te client decides on the distri-
bution of copies of the report.
© 2010 by Taylor and Francis Group, LLC
Special Topics in Quality  •  133
Audit Completion
An audit assignment is completed upon submission of the audit report to
the client, except in special circumstances when verifcation of corrective
action is explicitly included in the audit assignment and plan.
Record Retention
Te auditor, lead auditor, or audit organization is responsible for custody
and retention of audit documents and records.
cOst OF Quality
In management accounting, cost accounting is the process of tracking,
recording, and analyzing costs associated with the products or activities of
an organization. Managers use cost accounting to support decision mak-
ing to reduce a company’s costs and improve its proftability. As a form of
management accounting, cost accounting need not follow standards such
as generally accepted accounting principles (GAAP), because its primary
use is for internal managers, rather than external users, and what to com-
pute is instead decided pragmatically.
Costs are measured in units of nominal currency by convention. Cost
accounting can be viewed as translating the supply chain (the series of
events in the production process that, in concert, result in a product) into
fnancial values.
Tere are at least four approaches:
Standardized cost accounting
Activity-based costing
Troughput accounting
Marginal costing, or cost-volume-proft analysis
Classical cost elements are as follows:
Raw materials
Labor
Allocated overhead
© 2010 by Taylor and Francis Group, LLC
134  •  Quality Management: Teory and Application
Origins
Cost accounting has long been used to help managers understand the
costs of running a business. Modern cost accounting originated during
the Industrial Revolution, when the complexities of running a large-scale
business led to the development of systems for recording and tracking
costs to help business owners and managers make decisions.
In the early industrial age, most of the costs incurred by a business were
what modern accountants call variable costs because they varied directly
with the amount of production. Money was spent on labor, raw materi-
als, power to run a factory, and so on, in direct proportion to production.
Managers could simply total the variable costs for a product and use this
as a rough guide for decision-making processes.
Some costs tend to remain the same even during busy periods, unlike
variable costs, which rise and fall with volume of work. Over time, the
importance of these “fxed costs” has become more important to managers.
table 6.6
Cost-of-Quality Statement
Cost Subtotal
Failure costs
Raw material
nonconformance
$3,276
Repairs $70,299
Scrap $2,000
Returns $300,000
Rework $20,000
$395,575
appraisal costs
Product audits $32,000
Receiving
inspection
$25,000
In-process
inspection
$25,000
Final inspection $50,000
$132,000
Prevention costs
Design reviews $9,000
Quality assurance $25,000
$34,000
total $561,575
© 2010 by Taylor and Francis Group, LLC
Special Topics in Quality  •  135
Examples of fxed costs include the depreciation of plant and equipment,
and the cost of departments such as maintenance, tooling, production
control, purchasing, quality control, storage and handling, plant supervi-
sion, and engineering. In the early twentieth century, these costs were of
little importance to most businesses. However, in the twenty-frst century,
these costs are ofen more important than the variable cost of a product,
and allocating them to a broad range of products can lead to bad decision
making. Managers must understand fxed costs in order to make decisions
about products and pricing.
Te concept of quality costs (see Table 6.6) is a means to quantify the
total cost of quality-related eforts and defciencies. It was frst described
by Armand V. Feigenbaum in a 1956 Harvard Business Review article.
Prior to its introduction, the general perception was that higher qual-
ity requires higher costs, either by buying better materials or machines,
or by hiring more labor. Furthermore, while cost accounting had evolved
to categorize fnancial transactions into revenues, expenses, and changes
in shareholder equity, it had not attempted to categorize costs relevant
to quality. By classifying quality-related entries from a company’s general
ledger, management and quality managers can evaluate investments in
quality based on cost improvement and proft enhancement.
Internal failure costs: Tese are costs associated with nonconformities
that are found during receiving, in-process inspection, and fnished-
goods inventory prior to shipping to the customer. Examples would be the
following:
Scrap
Rework
Supplier scrap or rework
Sorting
Retest and reinspection
Regrading
External failure costs: Tese are costs associated with nonconformities
that are found by the customer. Examples would be the following:
Warranty charges
Service time and material allowances
Returned material costs
© 2010 by Taylor and Francis Group, LLC
136  •  Quality Management: Teory and Application
Appraisal costs: Tese are the costs associated with product verifcation
and validation. Examples would be as follows:
Product audits
Receiving inspection
In-process inspection
Final inspection
Calibration
Prevention costs: Tese are the costs associated with activities associated
with preventing nonconformities from occurring. Examples would be as
follows:
Planning
Reviews
Management controls
Organizing
Internal audits
Supplier audits
Training
© 2010 by Taylor and Francis Group, LLC
137
Appendix A: Business
Quality Plan
Organization Objective and Goals
1. Categories and
Classifcations 2. Department
3. Responsibility
4. Tracking
5. Goal or
Objective
Primary Alternate
© 2010 by Taylor and Francis Group, LLC
139
Appendix B: Process
Quality Plan
General Information
No.
Classifcation (Process): Date:
Phase: Design Review Production
Contact Name: Phone:
Department:
Primary: Alternate:
Tracking:
Goal:
1. Flowchart
2
.

P
r
o
c
e
s
s

S
t
e
p

D
e
s
c
r
i
p
t
i
o
n
3
.

R
e
q
u
i
r
e
m
e
n
t

(
P
r
o
d
u
c
t

o
r

P
r
o
c
e
s
s
)
4
.

P
o
s
s
i
b
l
e

P
r
o
b
l
e
m
s
5
.

P
o
s
s
i
b
l
e

C
a
u
s
e
s
6
.

S
e
n
s
o
r
7.
Methods
8
.

D
o
c
u
m
e
n
t
9
.

R
e
a
c
t
i
o
n

P
l
a
n
O
p
e
r
a
t
i
o
n
T
r
a
n
s
p
o
r
t
a
t
i
o
n
I
n
s
p
e
c
t
i
o
n
D
e
l
a
y
S
t
o
r
a
g
e
S
a
m
p
l
e
F
r
e
q
u
e
n
c
y
receiving (input)
Process (wiP)
Final (Output)
© 2010 by Taylor and Francis Group, LLC
141
Appendix C: Product
Quality Plan
Inspection Plan For: Efective Date: Number:
Supersedes: Page:
of
Approved By:
Instructions:
Inspect the product with regard to the characteristics listed below (also see inspection
and test work instructions). Use a C = 0 sampling plan with an AQL of 10 unless
otherwise specifed below. Record the results of the inspection on the appropriate
inspection report or log. In the event of a nonconformity, follow work instruction.
No.
Characteristics
to Be Measured
or Inspected
Specifcation and
Tolerance (±) AQL
Inspection or
Measuring
Equipment or
Method Comments
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
© 2010 by Taylor and Francis Group, LLC
142  •  Quality Management: Teory and Application
21
22
23
24
25
26
28
29
© 2010 by Taylor and Francis Group, LLC
143
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Quality Management
Theory and Application

PETER D. MAUCH

© 2010 by Taylor and Francis Group, LLC

CRC Press Taylor & Francis Group 6000 Broken Sound Parkway NW, Suite 300 Boca Raton, FL 33487-2742 © 2010 by Taylor and Francis Group, LLC CRC Press is an imprint of Taylor & Francis Group, an Informa business No claim to original U.S. Government works Printed in the United States of America on acid-free paper 10 9 8 7 6 5 4 3 2 1 International Standard Book Number: 978-1-4398-1380-5 (Hardback) This book contains information obtained from authentic and highly regarded sources. Reasonable efforts have been made to publish reliable data and information, but the author and publisher cannot assume responsibility for the validity of all materials or the consequences of their use. The authors and publishers have attempted to trace the copyright holders of all material reproduced in this publication and apologize to copyright holders if permission to publish in this form has not been obtained. If any copyright material has not been acknowledged please write and let us know so we may rectify in any future reprint. Except as permitted under U.S. Copyright Law, no part of this book may be reprinted, reproduced, transmitted, or utilized in any form by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying, microfilming, and recording, or in any information storage or retrieval system, without written permission from the publishers. For permission to photocopy or use material electronically from this work, please access www.copyright. com (http://www.copyright.com/) or contact the Copyright Clearance Center, Inc. (CCC), 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400. CCC is a not-for-profit organization that provides licenses and registration for a variety of users. For organizations that have been granted a photocopy license by the CCC, a separate system of payment has been arranged. Trademark Notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. Library of Congress Cataloging-in-Publication Data Mauch, Peter D., 1954Quality management : theory and application / Peter D. Mauch. p. cm. Includes bibliographical references and index. ISBN 978-1-4398-1380-5 (hardcover : alk. paper) 1. Total quality management. 2. Quality control. I. Title. HD62.15.M377 2009 658.4’013--dc22 Visit the Taylor & Francis Web site at http://www.taylorandfrancis.com and the CRC Press Web site at http://www.crcpress.com 2009042044

© 2010 by Taylor and Francis Group, LLC

who seek to advance the quality sciences through traditional education and scientific research. and future. past. v © 2010 by Taylor and Francis Group. LLC . Especially to my wife Julie. who believed in me. This book is also dedicated to my close friends and family members. built and did not destroy. who gave and did not take. present.Dedication This book is dedicated to those quality professionals.

Back of the hammers drumming. Back of the belts that sing. the Brain! Might of the roaring boiler. Back of the workshop’s clamor The seeker may find the Thought— The Thought that is ever master Of iron and steam and steel. That rises above disaster And tramples it under heel! The drudge may fret and tinker Or labor with lusty blows. There is the eye which scans them Watching through stress and strain. But back of him stands the Thinker. Back of the cranes that swing. For into each plow or saber. Force of the engine’s thrust.Epigraph The Thinker Back of the beating hammer By which the steel is wrought. But back of them stands the Schemer. The thinker who drives things through. Must go the Brains of Labor. Which gives the work a soul! Back of the motors humming. Back of the Job—the Dreamer Who’s making the dreams come true! Berton Braley vii © 2010 by Taylor and Francis Group. LLC . Strength of the sweating toiler— Greatly in these we trust. Each piece and part and whole. There is the Mind which plans them— Back of the brawn. The clear-eyed man who knows.

.......................................................................................... LLC ........................................................................................................................................3 Support ......................or Service-Producing Classifications.....................................6 Basic Functional Structure ........Contents List of Figures .............................................................................xxi Chapter 1 Organizing for Quality ........................................................................2 Categorizing Duties ...................................14 Business Quality Planning ......................10 Review Questions ...............................................10 Chapter 2 Planning for Quality ............15 Elements of an Effective Quality System ...........................................................................................................................................................xvii List of Tables .....................9 Communication................................7 Authority..................................................................5 Leadership Classifications ..........................................1 Introduction ................................13 Terminology ......................................................................................................... 1 Objectives .......................................3 Product or Service Producing ............................................................................................................................................................................................................................................10 Summary ...........6 Quality Function Considerations ................................8 Authority Principles .....................................13 Introduction ........................9 Revise and Adjust ........................................... Accountability........................................................................................................................................................................................ and Responsibility ..............................2 Leadership.............................................5 Support Classifications .........4 Breaking Categories into Classifications........................................................................4 Incongruence.............................5 Product.................... 13 Objectives ......................................................15 ix © 2010 by Taylor and Francis Group.............................xix Preface ..1 Terminology .........................................................

............................ 30 Policies............. 28 Information Accessibility ..................................................................................................32 Forms and Records......................................................................... 28 Files and Records .... 20 Details .................................................x  •  Contents Marketing ............................................... 28 Responsibility and Interfaces ...33 Standardization of Symbols ..................................................................................................................................................................................................... and Objectives ..........................35 Normal Logic Flow .......32 Blueprints (Product Specifications) ......................... Procedures..............................29 Validation Personnel ......................22 Project Planning .........................................................15 Setting Objectives ..........35 Communication.............33 Process Flowcharting .................................................................... LLC .19 Process Quality Planning ......................................................36 Review Questions ................................21 Control .......................31 Procedures and Rules ................................................................................................................................................................................................36 Summary ..........26 General Information .............19 General Information ....37 © 2010 by Taylor and Francis Group...................................... 30 Policies..........................................................................................26 Product Quality Planning .................................................................................................24 Status Reporting ....26 Detail ...................................................................................................29 Validation Facilities .............................................................................. 30 Scheduling and Revising Validation Plans ........................................................ 20 Failure Modes ............................................................................................................................................................................................................................................................................ 30 Validation Procedures ..............................24 General Information .........................15 Long..................................35 Process Flow .............................................................................................................................27 Product Verification and Validation Planning....................................................................................17 Setting Business Metrics...................................and Short-Range Objectives ...................26 Detail ..................................................

.................................................................45 The Business Quality Report ........................................................ 42 Correcting for Deviations................ 43 The Role of Quality Management ............ 39 Objectives .......................................................................................................................................................................................................58 Identification during Work ................................45 Introduction to Quality-Reporting Basics ..........................58 Identification of Nonconforming Product ......................................................49 Journalizing Procedure................41 Concerns of Control ...................58 Segregation .............................................................................. 43 Organizational Responsibility ...............................................................................................................................................39 Terminology ................................................................................................................................................. 40 A Cascade Approach ...........................................59 © 2010 by Taylor and Francis Group.............................58 Short-Run Production........................................... 48 Activity Reporting......................................................................... LLC ............ 42 Importance of Value .......................................................... 54 Product Performance Reporting ........................................................................................................55 Analysis ........59 Risk ............. 40 Long-Range Objectives ......................................................39 Introduction .......................... 56 Ranked Order Analysis.................................................57 Controlling Nonconformance Identification ....................................................................................................................................................................... 40 Short-Range Objectives.........................................59 Disposition .......................................................................................................................................... 56 Fishbone Diagram ..........................................................................41 Written Reports ....51 Posting ........ 46 Underlying Concepts ..........................58 Inspection ...................................................................................................................................................Contents  •  xi Chapter 3 Controlling for Quality...58 Long-Run Production .......................... 42 Basic Concepts ........59 Responsibilities for Disposition ................................................................................................................................ 42 Preparing Reports.........................................58 Completion of Work..

..........71 Adult Education ..................................................... 63 Objectives .........................................................71 Higher Education ...............70 Secondary Education.62 Chapter 4 Staffing for Quality .......82 © 2010 by Taylor and Francis Group..............81 Paternalistic ....... 77 Objectives ....................................................73 Training Records ...............................................78 Leadership Styles ..............63 Terminology .............. 60 Immediate Action Required ............................................................................................................................ 60 Magnitude of the Nonconformity .....................................................................67 Job Analysis ............................................................................................76 Review Questions ..................... LLC ....................76 Chapter 5 Motivating for Quality ....................................................................................72 Training .............................................................................................................................................81 Autocratic...................................................................................................................................................................................................61 Review Questions ..............................................................................................................................................67 Methods.................................................xii  •  Contents Corrective and Preventive Action (CAPA) Methodology ..............................................................................................................................................................................................................................72 Alternative Education .....74 Summary ......................................81 Democratic.................................. 68 Results..............................................70 Primary Education .........................77 Lead..............................................77 Terminology .......................................................... 64 Job Descriptions.................................................70 Systems of Formal Education............................................................................69 Position Requirement...................................................................63 Forecasting Human Resources Needs .................................. 60 CAPA Methodology ............................ Coach............................69 Education and Training........................................ 60 Summary ..................... and Guide ......................................................................................................................................

.........................................................................................................93 History.......................116 © 2010 by Taylor and Francis Group......94 Statistical Methods .....................................115 Reliability Testing .................................83 Provide a Motivating Environment ......110 Reliability Program Plan ..102 General ......87 Esteem Needs .............................................................91 Chapter 6 Special Topics in Quality ...............................................................................................................................................................................................................112 Reliability Modeling .................................................................................................................................................................82 Rewards Based upon Performance ......................................................87 Self-Actualization ........................ 86 Social Needs........................................114 Design for Reliability ...106 Risk Analysis and the Risk Workshop .....................................................................................................................85 Safety Needs .............107 Facilitated Risk Analysis Process ........95 Experimental and Observational Studies.......................97 History of SPC.........................................................................................112 Reliability Test Requirements ........111 System Reliability Parameters ............................102 Risk Analysis ..............95 Levels of Measurement....................................................................................93 Overview .......................113 Requirements for Reliability Tasks ...................................... 93 Overview of Statistical Methods .110 Reliability Theory ..........................................................................................85 Physiological Needs .........................................................................................................................................................................................................83 Performance Appraisals ...............................82 Praise and Censure Fairly ..............................................................85 Deficiency Needs ..................................................................................................................................................................................... 90 Review Questions ....................................................................................................................................109 Reliability Engineering ..........111 Reliability Requirements ............................................................................................. LLC ..............................115 Fault Tree Diagrams ........... 88 Summary ...........Contents  •  xiii Laissez-Faire .......................

............... 122 Characterization of Systems.......................................133 Origins ............ 128 Pre-Audit Review of System ...................................116 Accelerated Testing..................................132 Reporting the Audit ...................................................................................................131 Audit Observations ........................................................ 122 Systems Analysis......132 Audit Completion ........................ 128 Sampling Plans ............................................................................................ Verification.................................................................................................................................................................................... 126 Auditor Education and Training ............................................ 134 © 2010 by Taylor and Francis Group....125 Auditing ..................... and Evaluation ...................132 Preparation of the Report ...............................................118 Reliability Operational Assessment ....................121 Certification ..................................................................... 128 Result ...........125 Audit Planning and Scheduling ..................... 126 Audit Objective .............132 Review and Distribution .................................................................... 122 LTI Systems..............131 Opening Meeting ......................... LLC ...........................................................................132 Content of the Report .....133 Record Retention.................................................................................................. 126 Audit Scope ........ 128 Long-Term Planning.................................................121 Reliability Engineering Education ...............................................................130 Notification to Auditee.............................131 Information...................xiv  •  Contents A Reliability Sequential Test Plan................... 126 Frequency and Timing .............................................................118 Software Reliability ............................................................................................133 Cost of Quality.................................................................................................................... 126 Audit Initiation .................................................................................................................................................................................................................................................. 128 Audit Implementation Steps........132 Audit Follow-Up .................................................................................................................................131 Audit Supervision ......................... 128 Working Papers .. 120 Reliability Organizations .............................

.... 141 Bibliography .............................................................................................................. 139 Appendix C: Product Quality Plan ......................................... LLC ......................Contents  •  xv Appendix A: Business Quality Plan ......................................................... 137 Appendix B: Process Quality Plan ....... 143 © 2010 by Taylor and Francis Group..

.1 Organizational breakdown of positions......1 Business quality report..............50 Figure 3.......................................................4 Basic activity report............130 Figure 6.............4 C = 0 sampling plan..............75 Figure 6..........5 Posting to the business quality report...6 Fishbone diagram............................36 Figure 3.............. ...............2 The quality-planning process.... policy.........................3 Product........2 Employee training record.... .......... .3 Support activities...........................51 Figure 3........1 Figure 1........ ... .................4 Line and staff organization......................................................................................2 Audit plan and report........................129 Figure 6............... ..5 Audit steps: Any process .........31 Figure 2..... ...................................55 Figure 3............ ....................................... ......103 Figure 6... .................or service-producing activities...........7 Figure 2................127 Figure 6...............70 Figure 4..........................3 Reporting flow....................47 Figure 3...........................................3 Audit working paper...................................................................List of Figures Figure 1......................... ...........2 Performance diagram.. ........57 Figure 4...............................2 Figure 1...........1 Normal curve.................... and procedures.............. ...............1 Interaction of objectives................................................. LLC .....131 xvii © 2010 by Taylor and Francis Group.................................................... 48 Figure 3.....................................

20 Process Quality Planning: Partial Detail.........................................98 Statistical Methods Applied to Operations ...................................................1 Table 2......................................3 Table 6..................27 Table 2..... 134 xix © 2010 by Taylor and Francis Group... 66 Maslow and Herzberg Comparison ..................................................6 Ranked Order Analysis ...16 Business Quality Plan ..............4 Table 2......................9 Responsibility Matrix..........................................25 Product Quality Plan .....................................11 Basic Process Flows .... 34 Table 2.....................................104 SPC Constants .....105 Statistical Sampling Plan......... LLC .6 Table 2........................................................................35 Table 3.....................3 Table 2.....................18 Process Quality Plan: General Information ......List of Tables Table 1...........................................14 QMS Responsibility Matrix .............................................................................1 Table 4...........21 Process Quality Planning: Failure Modes ............................................5 Table 2...1 Table 6..........1 Table 5........1 Table 6............................................. 90 Statistical Formulas .........................................................................................................................23 Project Planning: Gantt Chart ............................7 Table 2............2 Table 6...1 Table 2................8 Table 2.....5 Table 6.........................106 Cost-of-Quality Statement ..4 Table 6...........................104 Quality-Engineering Formulas ................................10 Flowcharting Symbols ................................................................22 Process Quality Planning: Control .....................................2 Table 2..8 Formal versus Informal Planning .. 56 Personnel Forecasting .................

LLC . The American National Standards Institute (ANSI) specifies activities that must be followed as generally accepted quality principles and practices (GAQP) known as ISO 9000. This in turn led to criticism of quality management as a discipline that provided a great deal of largely irrelevant data to management. in too many cases. I hope to continue the movement toward consideration of the objectives of quality management and value reporting. An individual producer could simply compare customer requirements to his or her work and estimate its value. Unfortunately. In some cases.Preface The rise of the quality profession as a specialty within business coincided with the increased complexity of business enterprises. In quality management. Traditional quality management concerned itself with developing procedures to determine product conformance or nonconformance (inspection). xxi © 2010 by Taylor and Francis Group. The rise of complex and large enterprises produced the need for the development of objective and equitable quality procedures for the determination of value so the owners could assure the efficiency of their operations. the discipline is changing. when goods and services were provided by individual artisans. Fortunately. fairness and objectivity play an almost equal role with relevance in the determination of the appropriate quality procedures. Quality professionals are becoming much more concerned with providing information that will help management meet the firm’s goals. the study of (inspection) procedures became an end in itself. In nearly every case. “Acceptable” techniques were applied whether they were appropriate or not. whereas in others. In this book. elaborate quality systems were unnecessary. Businesses lost sight of the objectives of the procedures. In simpler times. the opinions of groups with regard to these practices are backed only by the accepted stature of the promulgating organizations. the imposed requirements carry the weight of law behind them. the intent of the suggested (or required) practice is to promote fairness in quality and the reporting of quality performance information to a diverse management audience.

we will explore the implementation and application of a quality management system. there are general characteristics that the performance-reporting system must possess.xxii  •  Preface A quality management system (QMS) is a performance-reporting system and is defined as a formal system of accumulating and reporting data useful for the achievement of management’s objectives. In the following chapters. © 2010 by Taylor and Francis Group. LLC . Whether we are concerned with a not-for-profit institution or any other organization.

goals. Management: A process or form of work that involves the guidance or direction of a group of people toward organizational objectives. Organizing: Categorizing and classifying activities. Organization: People working together in groups to attain objectives. under a manager. Centralized organization: An organization in which little or no authority is delegated. 1 © 2010 by Taylor and Francis Group. Authority: The right to command and expend resources. 3. To present different quality organizational structures. To discuss the quality management delegation process. terminOlOgy Attribute: A characteristic inherent in or ascribed to something. or requirements. necessary to attain objectives. To introduce the quality organization function. Category: A group of similar classifications that contain the same (multiple) attributes. LLC . Classification: A group of items in a category that contain the same (single) attribute. 2.1 Organizing for Quality Objectives 1.

product or service producing. This is necessary in order to prevent chaos where everybody is trying to do everything at once. LLC . and support. Variable: A continuous or discrete measurable factor.2  •  Quality Management: Theory and Application Performance measurement: The use of statistical evidence to determine progress toward specifically defined organizational objectives. categOrizing duties Organizing can be viewed as categorizing activities in a business by some meaningful attributes. In the quality organization and planning process. or system. three people working together can do more work than ten people working separately. In effect. Responsibility: Accountability for obtainment of an objective through the utilization of resources and adherence to policies. In most cases. process. business activities can be categorized into leadership. Another benefit of organizing the business is more efficient communication and reduced conflict by ensuring that authority and responsibility coincide. objectives are proposed for each responsibility center. goals. The responsibility center then becomes the focal point for planning and control. A category is a responsibility center with an activity or collection of activities controlled by a single individual. or attribute of an item. To create synergism. Span of control: The number of subordinates that can be effectively managed. characteristic. departments and individuals need to work together in a coordinated effort resulting in higher efficiency. © 2010 by Taylor and Francis Group. or standards. some factor that might be expected to vary over time or between objects. Quality: Meeting customer needs. A line of appropriate authority creates order within the company. intrOductiOn The purpose of organizing is to establish lines of authority.

This includes establishing policies. Individual process leaders (departmental managers) in turn are responsible for the procedures needed to achieve a given objective. That is. and standards.1) is also called a product realization center if the person responsible has authority for producing or providing products or services to the customer. objectives. goals. the highest level of leadership (executive management) in the company is responsible for the overall direction (objectives) of the business.or service-producing activities. Product or service Producing A product. The product. Ironically. LLC . engineering. whereas engineering and sales are indirectly perceived as impacting the overall output. This encompasses sales. the focus of the performancereporting system is on responsibility centers. This group has authority and responsibility throughout the organization. and production activities. That is. It is essential to recognize this through the development of the quality management system.Organizing for Quality  •  3 leadership The leadership category comprises those individuals who provide direction and guidance within the company.or service-producing center (see Figure 1. production activities are the most visible. In general. Each individual with decision-making authority in an organization has responsibility for some aspect of achieving the company’s objectives. The opposite is Customer Sales Engineering Supplier Receiving Inspection Purchasing – Vendors – Orders Raw Material Inventory Operations – Scheduling – Production – Traceability – Identification Shipping Customer Figure 1. from the overall system down to its individual processes.or service-producing category contains those individuals who are directly engaged in providing an output to the customer. © 2010 by Taylor and Francis Group.1 Product. the perceived order of importance of these activities is in reverse order.

incongruence Product.4  •  Quality Management: Theory and Application actually true. and quality. This can be in the form of a financial report. the error will be propagated to the engineering and production functions. employee training.2) is a category in which the manager has authority only for providing management information or internal services within the organization with regard to product realization activities’ efficiency and effectiveness. Analysis and Improvement Figure 1. or efficiency reports. LLC . If the need for the product or service was not defined properly. The same is true for poor product or service designs. These individuals provide information and resources with regard to business performance. having finance reports written under sales would cause a conflict that would create chaos because they have diametrically opposed purposes.2 Support activities. If a support activity is wrongfully placed into a product or service function. Eventually the magnitude of the incongruence can become so great that it may result in system (business) failure. support A support center (see Figure 1. human resources. it produces group incongruence resulting in negative entropy. Business Organization and Planning Quality Management System Management Responsibility Resource Management Business Improvement Equipment Calibration Measurement. For example. Individuals involved in providing the leadership group with information used to make decisions regarding the efficiency and effectiveness of the business are considered support staff. © 2010 by Taylor and Francis Group.or service-producing and support categories cannot be intermixed. The same would be true if you placed the quality group under production. This would include accounting.

every five to seven workers would report to a lead person. In some cases.or service-Producing classifications The product. five to seven leads would report to a supervisor (5n). This refers to the number of subordinates a manager can effectively manage. LLC . Examples of managerial-level classifications are as follows: • • • • • • President Vice president Director Manager Supervisor Lead Product. variety. The number of people who should report directly to any one person should be based upon the complexity. in turn. this may mean writing a sales order. or manufacturing a product. issuing a purchasing document to purchase raw materials. In practice.or service-producing categories’ associated classifications are those activities that are related to providing product to the customer. This would mean that a supervisor would be able to effectively manage twenty-five workers.Organizing for Quality  •  5 breaking categOries intO classiFicatiOns leadership classifications The structure of the classifications under the leadership category can vary slightly from company to company. and a director 625 in each department or group. The main component of these classifications revolves around the principle of the span of control. The higher levels of management (directors and managers) should be spending the majority of their time organizing and planning the activities in their respective departments. and so on. a manager could lead 125. This includes transformation processes where raw material is turned into finished goods. and proximity of the work. Examples of product realization classifications are as follows: © 2010 by Taylor and Francis Group. while the lower levels of management (leads and supervisors) are predominantly involved in worker motivation and control. this turns out to be a ratio of 1:5 or 1:7. scheduling production. Therefore.

6  •  Quality Management: Theory and Application • • • • • • • • Customer-related processes (sales) Design control (engineering) Purchasing (production) Customer-supplied property (production) Product identification and traceability (production) Process control (production) Preservation of product (shipping and receiving) Servicing support classifications A support center is a category in which the manager has authority only for providing management information or internal services. LLC .3. In some cases. It is expected that the individuals in the leadership group provide monthly or weekly reports to © 2010 by Taylor and Francis Group. you can see the basic line and staff organizational structure. Their related classifications are associated with the administration of the business. goals. objectives. Examples of support classifications are as follows: • • • • • • • • • • Control of documents Monitoring and measurement of product Monitoring and measurement of processes Calibration Control of nonconforming product Corrective and preventative action Control of quality records Internal quality audits Human resources Finance (accounting) basic FunctiOnal structure From Figure 1. The organizational departments are defined by the nature of the work they perform. this may mean writing business performance statements or financial statements. or providing training to employees. President refers to the individual who establishes the broad company policies. with regard to a product realization center’s efficiency and effectiveness. and standards.

whereas the human resources group issues a human factor utilization report. and human resources (personnel) functions perform support activities and provide management with information and reports with respect to company efficiency and effectiveness. Quality Function considerations The role of the quality department is to identify. the P&L statement only reports the results of financial transactions. summarize. Collectively. these are the support functions. Combined. product promotion (including inside and outside sales). The accounting department issues a monthly report called a profit and loss statement (P&L statement) showing financial effectiveness. The quality. Sales refers to the function that defines product features. accounting (finance). the support functions with respect to the outputs of their departments showing progress toward goal attainment. they provide a picture of the health of the organization. among other things. distribution (product market placement).3 Line and staff organization. and product pricing. or yield reports to quality. The quality department issues a business quality report (BQR) that shows the performance of the organization in meeting customer needs. training records to human resources. whereas the BQR shows the performance of the transactions. Collectively. these are the productor service-producing functions. The operations function is responsible for reproducing the design in quantities necessary to meet customer demand.Organizing for Quality  •  7 PRESIDENT SALES ENGINEERING OPERATIONS QUALITY PERSONNEL FINANCE Figure 1. An example of this would be an expense report given to accounting. LLC . the quality department may be called upon to manage © 2010 by Taylor and Francis Group. analyze. Additionally. and report the efficiency of business operations in meeting customer requirements. The engineering function designs a product based upon product features and pricing. For example.

e. 3. accountability. The quality department is not responsible for ensuring quality (senior management must take actions with regard to operational efficiency. 4. accOuntability. Company management is responsible for quality (the financial and operational efficiency is senior management’s responsibility). not just one department. The following are some basic assertions: 1. 2. you would not reproach the accounting group. Company management cannot delegate responsibility for quality (business efficiency starts and stays at the top). and performance appraisals). it is not a bottom-up process.8  •  Quality Management: Theory and Application certain quality projects to improve the efficiency of business operations. The quality department’s activities are similar to those of accounting: they only report performance.. and responsibility. if sales are off. For example.1 shows a responsibility matrix that clearly defines operational authority. 5. i. goals. allocate resources. Quality management encompasses the entire business. and it is up to management to act. Department Sales Engineering Production Production Production Production Shipping and receiving Quality Primary Tom Mary Sue Sue Mary Mary Hal Sally Alternate Alice Jim Alice Alice Alice Alice Sam Andy © 2010 by Taylor and Francis Group. The first column identifies table 1. Categories and Classifications Product or Service Customer-related processes Design control Purchasing Customer-supplied property Product identification and traceability Process control Preservation of product Servicing 2. Responsibility 1. LLC . The need to understand the role of the quality department is an essential step in effective utilization of its resources.1 Responsibility Matrix 3. authOrity. and resPOnsibility Table 1.

Organizing for Quality  •  9 the organization’s functional categories and associated classifications. The next column identifies the department responsible for performing and managing the classified activities. The last column identifies specific individual responsibility (leadership). These individuals are accountable for the performance of their identified functional areas. It is senior management’s responsibility to hold these individuals accountable for their respective areas. These individuals have the right to command and expend resources in their functional areas.

authOrity PrinciPles
Delegation: There is little debate about delegation of authority. When management successfully delegates, their time is freed to pursue more important tasks, and subordinates gain feelings of belonging and added. This produces genuine feelings of commitment by workers and is the best method for development. Unity of command: Workers should have one and only one immediate supervisor. The difficulties in servicing more than one supervisor have been well established for the last 3,000 years. In fact, almost 30 percent of all personnel problems can be related to disunity. Scalar: The authority in an organization flows one link at a time, through the various management links. This is based upon the need for communications; circumventing the process may cause pertinent and vital information to be missed. Exception: This principle states that managers should concentrate their efforts on matters which deviate from the norm and should allow subordinates to handle routine matters. It is believed that abnormal issues require more of the manager’s abilities. Additionally, this prevents managers from becoming bogged down in routine tasks.

revise and adjust
Due to the organic nature of the organizational structure, it should be reviewed and revised as the complexity of the company changes.

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10  •  Quality Management: Theory and Application From time to time, senior management may need to add or delete a classification, department, or individual responsibility. These changes should not occur more than once per year. To do this any more frequently would be evidence of a dysfunctional organization.

cOmmunicatiOn
Once the organizational process has been completed by senior management, it must be published and enforced. There should be no overlapping responsibilities or departmental incongruence with respect to functional categories and classifications. The responsibility matrix in Table 1.1 shows the internal communication path for specific roles and responsibilities. For example, for sales questions you would talk to Tom or Alice, not Sally.

summary
Paying attention to the specific categorization and classification of tasks performed, and grouping those into departments should prevent incongruence and chaos in the business. This process is vital because it forms the foundation and basis for planning. There is no sense in establishing short- or long-term plans when departmental and individual managerial roles have not been properly defined. Distinguishing between productproducing and support groups should be a priority. Mixing the two would cause negative entropy and, in a worst-case scenario, business failure due to a highly dysfunctional operation.

review QuestiOns
1. 2. 3. 4. What is the purpose of organization? Describe the different categories in the organization. Define the leadership category. Define the basic functional structure of a business.

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Organizing for Quality  •  11 5. Describe organizational incongruence. 6. Describe how individual accountability, responsibility, and authority are identified. 7. Describe the principles of authority. 8. Describe the role of the quality department. 9. Define the support group. 10. Explain the following: A. Product or service function B. Support function C. Leadership functions

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documented plan developed through an identifiable process. Goal: (used interchangeably with objective) A statement that gives the organization or its departments direction and purpose. To emphasize the importance of planning in the quality management system. 2. sales. To compare and contrast formal and informal planning. Functional plans: Plans that originate from the functional areas of an organization. Long-range plans: Plans that pertain to a period of time beyond the current year. Objective: (used interchangeably with goal) A statement that gives the organization or its departments direction and purpose. 3. terminOlOgy Formal plan: A written. and personnel. Planning: A process of deciding what objectives to pursue in the future and in what order to achieve them. 13 © 2010 by Taylor and Francis Group. To provide a systematic approach to planning. LLC .2 Planning for Quality Objectives 1. such as production.

Where do we want to be? 3.14  •  Quality Management: Theory and Application Policies: Broad guidelines for action which are interrelated with goal attainment. The planning process answers three basic questions: 1. Short-range plans: Plans that cover the current year. Tactical planning: Planning that presupposes a set of goals handed down from upper management. strategies. By setting objectives and establishing a course of action.” Planning is the easiest where change happens the least. LLC . Strategic planning: Planning that covers multiple years. and policies. intrOductiOn Planning is the management function that produces and integrates objectives. management commits to “making it happen.1 Formal versus Informal Planning Planning Formal Rational Systematic Reviewed and updated Used for improvement Documented informal Emotional Disorganized Sporadic Mostly for show Memory based © 2010 by Taylor and Francis Group. Most planning is carried out on an informal basis. How can we get there from here? Planning is concerned with future actions and decisions of management. This occurs when management does not record their thoughts and instead carries them around table 2. Planning is the most useful where change is the greatest. Procedures: A series of related tasks expressed in chronological order to achieve policies. Where are we now? 2.

The major steps in marketing are as follows: 1. Identify how the customer hears about companies like yours. LLC . Identify the customer(s). Identify where the customer goes to buy. A vital step is to identify current and future customer needs in terms of product features and benefits by surveying the marketplace. leaving the company leaderless and dysfunctional. Table 2. This step is critical to the organization’s success. (Promotion and sales) setting Objectives Setting objectives requires a cascade approach down through the company hierarchy as follows: © 2010 by Taylor and Francis Group. management should be able to discern the market share they hold in contrast to that of their competition. Identify how much the customer is willing to pay. (Product features) 3. A worst-case scenario would be where executive management performs the role of lower-level management.Planning for Quality  •  15 in their heads. (Pricing) 4. (Market) 2.1 shows the contrast between formal and informal planning. marketing Management should identify the current market position of the company: where is the customer. and how and what do they buy? This would entail the identification of the market scope and depth of the products or services being offered. (Placement) 5.2). Identify the customer’s product and service needs. Additionally. business Quality Planning elements of an effective Quality system The quality management system (QMS) assumes that each group performs their intended responsibilities (see Table 2.

and (output) toward specific tasks procedures to objectives achieve executive objectives Associate (Product) Works within a group Regulates their tasks Records data related established by to ensure that work is to the department’s management done in a consistent output requirements manner Identifies and recruits Meeting overall the management staff company objectives for the various (monthly departments effectiveness) BQR Identifies and recruits Meeting departmental associates for the objectives (weekly various groups efficiency) activity capable of achieving report objectives Collaborates work with others in the group Ensuring the accuracy of the output produced daily (recordkeeping forms) © 2010 by Taylor and Francis Group. group progress responsible for requirements.2 QMS Responsibility Matrix Level Executive (System) Organizing Planning Control Staffing Motivation Develops the company Establishes the Monitors summary organizational departmental policies reports showing structure and objectives progress toward objectives Management (Process) Develops Develops group Reports and monitors departmental groups objectives. LLC .16  •  Quality Management: Theory and Application table 2.

Determine subactivities under the major activities. After the goals have been established. It begins at the top with a clear statement of what you are in business for. Establish departmental objectives. Determine major activities needed to meet the objectives. 5. an action plan for achieving the goals should be developed as follows: 1. The major steps in establishing objectives are as follows: 1. 2. 2. It does ensure that all departments and functions are in step with the major company objectives and that there is no incongruence. Identify resources required to meet goals. LLC . These objectives must support the organizational purpose. The long-range goals provide the bases for short-term objectives (they are linked). 5. Develop overall objectives. 3.Planning for Quality  •  17 1. 7.and short-range Objectives Long-range objectives usually extend beyond the current year. 2. Implement. Establish performance metrics. 3. © 2010 by Taylor and Francis Group. 4. Formulate functional quality plans. long. This process continues down throughout the entire company. 4. Long-range goals are formulated for this statement. The analysis should result in an establishment of priorities that apply at all the various levels in the company and are synchronized with each other and the long-range objectives. Short-range objectives should be derived from an analysis of the long-range objectives. 3. Assign responsibility for each activity. Review performance. Objectives are established at every relevant level and function in the company. This goal-setting process does not imply any specific management style. 4. 6. Formulate long-term goals.

Goal or Objective > Last month Per project <= Last month < 2% Zero spoilage N/A © 2010 by Taylor and Francis Group.18  •  Quality Management: Theory and Application table 2. LLC . Department Sales Engineering Production Production Production Production Per quote Shipping and receiving Quality Primary Tom Mary Sue Sue Mary Mary Hal Sally Alternate Alice Jim Alice Alice Alice Alice Sam Andy 4. Tracking Sales revenue per month (invoicing) Project hours and cost Budget returns and allowances Inventory N/A Rates and yields Back orders/On-time delivery Time and material <= 5%/95% Per quote 5. Responsibility 2.3 Business Quality Plan 1. Categories and Classifications Product or service Customer-related processes Design control Purchasing Customer-supplied property Product identification and traceability Process control Direct cost Preservation of product Servicing 3.

where we would want to establish a realistic minimum (or control) goal or objective. we would be tracking actual results and comparing them to the plan (actual/plan) in order to determine our progress and performance. Purchasing. The very nature of the strategy.and goal-setting process is dynamic and interactive. where nonconformities have an immediate impact on cash flow. Therefore. These activities are critical for the survival of the organization. starting with the product. fixed costs based upon functional area throughput should always be considered a normal part of the process. Detailing each task or step would require an explanation of how each step is accomplished.2) in the business. and expected market share while setting objectives. In Table 2. It is senior management’s responsibility to find the optimum balance between revenue. Some of these activities are revenue centers.3. This is done by identifying the process tasks in chronological order. setting business metrics The process of determining objectives and goals is directly related to the functional categories (see Table 2. is a cost center (we pay money out). this is a task listing without any of the detail. There is always a cost associated with operating a business.Planning for Quality  •  19 The first three steps were identified in the responsibility matrix shown in Table 2. sales would be a revenue center (we take money in). cost. where we would try to establish a realistic maximum goal or objective. However. PrOcess Quality Planning Each of the classifications or subactivities can be further analyzed and planned for their respective requirements. In short. and it is unrealistic to assume there isn’t. while others are cost centers.2 under business organization. in process planning we only © 2010 by Taylor and Francis Group. on the other hand. Establishing and allocating the goals are discussed next. The objective should be established to maximize revenue and/or reduce (or control) cost. The results of the current goals may change and lead to a revised strategy.or service-producing activities. LLC . For the most part.

An example of this is shown in Table 2. Procedural analysis flowcharts are a useful means of making a “step-by-step” analysis of processes. Analysis of existing systems can stimulate an analysis of major process changes.5.4. It is derived from the business quality plan shown in Table 2. general information Table 2. which will help point out duplications of effort. Then the classification and process step is identified. including performance tracking and goal(s). along with the effective date of the plan. It will also be used for the establishment of the performance measurement system and control. and transportation. Each process plan is assigned a unique number for cross-reference and identification purposes. Additionally. The details of present (or proposed) procedures can be recorded. excessive inspection. each task is described with a title (column 2).20  •  Quality Management: Theory and Application table 2.5. because this information will be used to update and revise the plan as necessary. The planning phase is identified. LLC . not the actual “how-to” information. © 2010 by Taylor and Francis Group. This last step is important. we would identify any product or process requirement (column 3) as shown in Table 2. and production is when the plan is in effect. review is when the plan is awaiting approval. Adjacent to each symbol.100 Classification (Process): Sales Review Contact Name: PDM Date xx/xx/xxxx Phone: 999-9999 x999 Alternate: Alice Goal: > Last month Phase: Design Production Department: Sales Primary: Tom Tracking: Sales revenue per month (invoicing) need to know what steps or tasks are performed. Next to each description. time delays.2. column 1). design is where the plan is in the process of development. details The details of the PQP begin with a simple procedural analysis flowchart (Table 2.4 Process Quality Plan: General Information General Information No.4 shows the general information section of the process quality plan (PQP). the plan identifies the departmental responsibilities.

In short. the output will be erratic.Planning for Quality  •  21 table 2. Whenever possible. To do this we must determine what possible problems we may encounter during each process step (see Table 2. but we can reduce their impact and have contingencies for their occurrence. This is the vital © 2010 by Taylor and Francis Group. Realistically. the elimination of all problems is not possible. Find customer’s balance. Flowchart Transportation Inspection Operation Storage Delay 2. The planning process provides consistency in purpose and direction of action to the accomplishment of departmental goals. This brings up a point: why do we have problems? Usually the reason there are problems in a process is because it was designed that way. it will be necessary to identify problems early to control or eliminate them from happening. and it is truly amazing that any work gets accomplished. we can deduce the cause of these problems. through our experience or from performing experiments. LLC .5 Process Quality Planning: Partial Detail 1. Process Step Description Select next sales order. N/A Name and account number Correct amount Failure modes Since there are no perfect processes. we should design the process in such a way as to reduce or eliminate all possible problems. Of course. Couple this with inconsistent or poor management leadership.6). Requirement (Product or Process) Oldest date Check salesperson’s math. a good quality management system rewards actions. not words. Record customer’s balance. If the process was put together ad hoc and informally. Correct price Walk to accounts receivable le. 3.

we begin to describe how deficiencies are detected (call sensors). Test instruments may include rulers. Possible Causes Orders mixed Salesperson rushed up Wrong amount Salesperson calculated wrong N/A N/A File not found Salesperson failed to identify new customer Balance wrong Calculation incorrect difference between a professional business manager and a novice. In Chapter 3. we will take an in-depth look at control systems.6. Those that can be directly sensed are done so by making observations of the object. careful consideration is given in the design of a process to make it foolproof against error. As you can see from Table 2. or error in this case. Requirement (Product or Process) Oldest date Correct price N/A Name and account number Correct amount 2. Record customer’s balance. If you want to keep problems away. A professional relies on information derived from statistical analysis with regard to the process for which he or she has responsibility. Possible Problems 5. you had better plan. © 2010 by Taylor and Francis Group. Walk to accounts receivable file.22  •  Quality Management: Theory and Application table 2. Flowchart Operation Transportation Inspection Delay Storage 3. LLC . heightens unimportant issues. Find customer’s balance. 4. Errors can be detected directly or indirectly.7. Process Step Description Select next sales order. In Table 2. For our purposes here. and makes decisions on gut feelings and emotions. control The final step in process quality planning is to determine the internal controls for process stability.6 Process Quality Planning: Failure Modes 1. This can be done visually by looking at it or through a test instrument applied to the object. we will explore how errors are sensed. micrometers. calipers. A novice relies upon hearsay. Check salesperson’s math.

Check salesperson’s math. Process Step Description 3. Find customer’s balance.table 2. Requirement (Product or Process) Inspection Operation 4. * = All. Possible Causes 6. Methods 2. © 2010 by Taylor and Francis Group. Reaction Sample Frequency Document Plan Storage Delay Select next sales order. Flowchart Transportation 7. Possible Problems 5. Oldest date Orders Salesperson mixed up rushed Salesperson calculated wrong N/A Salesperson failed to identify new customer Calculation incorrect Visual Calculator 1 1 * * Sales order Sales order N/A File Call manager. Call manager. Name and account number N/A Visual N/A 1 N/A * Planning for Quality  •  23 Call manager. 8. Record customer’s balance. N/A Correct price Wrong amount N/A File not found Walk to accounts N/A receivable file.7 Process Quality Planning: Control 1. Correct amount Balance wrong Calculator 1 * File Call manager. Sensor 9. LLC .

Last. This helps ensure organizational integrity. In turn. you should remember that the responsible manager should have a list of all the projects under his or her control along with their associated status. microscopes. amp meters. and spectrum analyzers. Project plans are an effective means of depicting a project schedule and reporting progress as it occurs. gravimetric meters. dosimeters. Both of these are derived statistically. When this occurs. The measurements can be compared to requirements to determine if the process is operating within defined limits. When viewing this plan. general information The general information section of the plan again identifies the responsible parties for the project. These devices measure the effects of the objects they measure and the object itself. Also included are provisions for the identification of any procedures or records used in the task.8) is made up of significant events or milestones that must occur in some time sequence in order for a project to be completed. we describe the measurement method (sensor) along with the sample size and frequency. line of communication. when errors do occur. the last column describes what steps to take to remediate the problem. to name a few.24  •  Quality Management: Theory and Application gauges. LLC . oscilloscopes. there are those times when planning occurs for short-duration processes. A project plan (see Table 2. Indirect measurements are those which monitor the effect of an object. viscosity tubes or cups. The type of plan most often used is a Gantt-type chart. each project on the list is then delegated to a project manager. along with associated departmental responsibility and accountability. In Table 2. and hydrometers. as shown in Table 2. to name a few. Test instruments for indirect measurement are multimeters. A project plan is a schedule of tasks over the duration of the project.7. © 2010 by Taylor and Francis Group. PrOject Planning While the process quality plan is established for those activities which are an integral part of the business. odometers.8. volt meters. All these devices make direct measurements on objects. we must apply the concepts of project planning. thermocouples. air speed gauges. and structure.

850 Stop Date: 99/99/9999 Date 99/99/9999 Phone: 999-9999 x999 Alternate: Alice AI: 0.table 2.02 4.5 CI: 0. LLC . 100 Project Name: Demo Primary: Tom Actual Hours: 50 Actual Cost: $1. Period Ending (Week) 1.49 Status Date: 99/99/9999 SI:1. 3. Activity or Document Study phase Initial market analysis Product scope and depth Team feasibility report Feature listing Functional requirement Capability report 2.750 Start Date: 99/99/9999 Planning for Quality  •  25 Note: = completed.8 Project Planning: Gantt Chart General Information No. © 2010 by Taylor and Francis Group. Status 1 2 3 4 5 6 7 8 9 10 11 12 Project Manager: PDM Department: Engineering Planned Hours: 100 Planned Cost: $3. % Completed 45 100 100 50 0 0 0 = incomplete.

where we would designate what percentage of the step has been finished. PrOduct Quality Planning general information At last. From Table 2.8 are status blocks.1 is normal. and production work order.3 or less than .. These plans are utilized in raw © 2010 by Taylor and Francis Group. which are used to track the project’s progress as well as to record the planned and actual. time and cost.00 represents overexpenditure.8. This should be part of the design test phase outputs prior to the actual design testing. it starts when the product is being designed. bill of materials. The Achievement Index (AI) is calculated by dividing the actual hours by the planned hours. we have come to the actual product or service itself. This can be seen in Table 2. greater 1. Next to this is a column which provides a graphical status indicator. The overall Status Index (SI) is calculated by dividing the AI by the CI. An AI value of less than 1. Typically. drawings and schematics). LLC . The plot portion of the chart shows a bar for the duration of the task or step in which black represents completion and gray indicates the scheduled time allotted. The bar turns black as the project progresses based upon the percentage completed.g. Adjacent to each step is a reporting column for percentage completed. Product quality planning (see Table 2. This may require you to break down a task into constituent parts called parent-child relationships.26  •  Quality Management: Theory and Application status reporting The next few blocks on the project plan in Table 2. A CI value greater than 1. where the study phase task is the parent and the steps below are the children belonging to this task. in fact. this plan is developed conjointly with the product illustrations (e. even though it was scheduled to start in week 7. the Cost Index (CI) is calculated by dividing the actual cost (time and material) by the planned cost. Accordingly. detail In the body of the Gantt chart. An SI between .7 would require immediate attention.9) is by no means the last step.9. you can see that the feature listing step has not been started.00 represents underachievement. the first column is used to identify the tasks to be performed.9 and 1.

From Table 2.25 . Characteristics to Be Measured or Inspected Overall length Inside diameter hole A Inside diameter hole B Hole A location Hole B location Overall width Thickness Overall height Color: tan Specification Acceptable and Quality Tolerance (±) Level 12” .025 — 1. as well as room for effective dates and approval and control numbers.0” — .5” 6” .5” 2. LLC . these are called test plans or specifications.0 Comments material.9 Product Quality Plan Subject: Part Number: 999-9999 Revision A Effective Date: Supersedes: 99/99//99 Number: 99999 Page: 9 of 9 Approved By: ZZZZZZ Instructions: Inspect the product to the characteristics listed below (also see drawing and/or inspection and test work instructions).010 . Inspection or Measuring Equipment or Method Caliper Micrometer Micrometer Caliper Caliper Caliper Caliper Caliper Visual No. In the event of a nonconformity.9. Record the results of the inspection on the appropriate inspection report or log.250” 3. which is used to count the rows on the form and also serves to reference a characteristic on the © 2010 by Taylor and Francis Group.010 .005 ..Planning for Quality  •  27 table 2.250 . Additionally.25” . Use a C = 0 sampling plan with an acceptable quality level of 10 unless otherwise specified below.9 is a column called No.25” 1.005 . follow work instructions. detail In the body of Table 2. and finished goods. work-in-process components.005 . there is an area for special instructions where necessary. These plans are used to perform product verification and validation. In some cases. you can see there is a general information area called subject where part information is entered.

g. we should identify the type of measurement method or equipment to use. Last. LLC . Arrangements for coordination with other validation groups or departments should also be identified. For continuous characteristics. such as contracts. we need to identify a target value with an upper and lower limit.28  •  Quality Management: Theory and Application product illustrations (e. drawings or schematics). manuals. configuration of operating equipment. and others. procedures. The term AQL refers to the percentage nonconforming and is used for determining an appropriate sample size. information accessibility Project information. Those with lesser criticality may be assigned a higher AQL than those that are more critical. This will help inspection and test planning as well as help determine the competency requirements for personnel performing the tests. drawings. engineering. Typically. PrOduct veriFicatiOn and validatiOn Planning responsibility and interfaces Responsibility within the company for the validation planning should be established. there is a column for making any additional comments. some are more critical than others. As part of validation planning. responsibilities for validation activities and functions for supporting and interfacing departments should be determined. should be available to the personnel who plan © 2010 by Taylor and Francis Group. This number can be annotated on the illustration to correspond to the characteristics being specified in the product quality plan. supporting and interfacing departments include manufacturing. which can be either a discrete or continuous variable.. Of course. It also provides congruence with suppliers of raw material with regard to testing methods. specifications. work orders. purchasing. Since not all characteristics are created equally. There may be occasions where you would need to specify an acceptable quality level (AQL) for a particular characteristic. For each characteristic. Adjacent to each number is a description of the characteristic to be measured. schedules. you could also identify a documented test procedure in this column. and purchase orders.

and pneumatic examination.g. affording environmental conditions (e. and computers. electrical. Facilities for taking verification samples and for containing test results to validate significant characteristics 4. Consider some of the following: 1. there should be access to referenced documents such as standards (such as those of the American National Standards Institute [ANSI] or ASTM International [ASTM]) that set forth acceptance criteria. contracts. storage areas) 3. gauges. and destructive examination (DE) 6. including dimensional. Files and records Facilities and files for maintaining forms. nondestructive examination (NDE). Capability for obtaining and maintaining relevant specifications.Planning for Quality  •  29 for validation. Facilities or alternate provisions for calibration of measuring equipment © 2010 by Taylor and Francis Group. including applicable codes. Requests for quotes and bid proposals may be obtained if they contain information useful to the validation-planning function. and other documents in readily accessible files should be established. drawings. including tags. tools. Facilities for receiving and handling items being validated (shelving. etc. Facilities for maintenance of archived samples where critical materials are involved 5. LLC . appropriate lighting level. hard copy. Space and equipment (surface plates. and cleanliness level) consistent with handling and validation needs of products and services 2. validation Facilities Facilities and validation equipment required for performing validations should be determined and provided as necessary. temperature and humidity control. Additionally. Capability for validation records storage and protection for established retention periods and retrieval from files should also be established. should be available. mechanical. and other pertinent documents.) for validation. texts on validation sampling. Physical validation systems and equipment for performing validation and testing..

and procedures are not mutually exclusive components (see Figure 2. or procedures when necessary to supplement the drawings. LLC . This is due in large part to senior management becoming self-focused. where their own wellbeing and self-interest take priority over those of the organization.1). There are many cases where companies have failed to follow the correct course of action. Similarly. and goals then become imaginary rather than realistic. broad-based capabilities for dimensional. and other applicable documents. In and of themselves. nondestructive. they can do nothing unless senior management is dedicated to making them happen.30  •  Quality Management: Theory and Application validation Personnel The validation-planning system should consider the availability of product analysts with the capability (education and technical training) to perform the types of validations required. instructions. while procedures relate to policies. optical. policies relate to objectives. policies. the objectives become negative motivators destroying the creditability of senior management. Being imaginary. validation Procedures Product analysts should be provided detailed guidelines. and Objectives Organizational goals. procedures. whereas procedures tell us how to do it. and destructive evaluation and testing provide the greatest versatility. specifications. scheduling and revising validation Plans The validation-planning process should include a process for determining the need for validation plans and for initiating such plans. Each is related to the other. Typically. These should be developed in conjunction with the manufacturing and construction operation process plans. PrOcedures. for example. checklists. POlicies. Policies. A lack of integrity leads to a dysfunctional © 2010 by Taylor and Francis Group. Goals are achieved through policies and procedures. they are an integral part of the organizational structure. Policies identify what departments do.

Policies exist at all levels of the organization. 3. top management must determine customer needs. The next step is to establish organizational responsibility. Determine major activities in the company. Describe the major activities and subactivities. Policies The first step in establishing company policies is to identify the customer. © 2010 by Taylor and Francis Group. Policies outline a general course (or framework) of action to be followed and do not precisely describe how to achieve specific objectives. 4.Planning for Quality  •  31 Objective Procedure Figure 2. 2. A general outline for writing a policy statement is as follows: 1. 2. policy. Determine subactivities. and resources as follows: 1. 4.1 Policy Interaction of objectives. and procedures. In fact. any organization that operates on the premise of “What’s in it for me?” will find it difficult to achieve true quality results. Top management should determine what the present and future business should be. Identify the objective. authority. Identify the resources needed. Second. Assign primary and alternate responsibilities. A typical organization has policies that relate to everyone in the company. 5. organization. State the policy. and how the customer can be reached. how the customer buys. Define the department that is responsible. 3. Identify the associated procedure. LLC .

the policy statements are grouped together into a manual (e. The basic parts of a form are as follows: 1. This manual is typically assigned a control number for reference. Procedures should allow for flexibility and deviation. 8. and (2) how the form is going to be used in the quality system.g. Title (identifies the form) © 2010 by Taylor and Francis Group. a quality policy manual). The management representative must know (1) what data the user wants to collect.32  •  Quality Management: Theory and Application In most cases. 6. 4. No. 2. LLC . Procedures and rules Procedures and rules define in step-by-step fashion the methods through which policies are achieved. A basic outline for a procedure is as follows: 1. They permit no flexibility or deviation. (control number assigned for reference) From (the person approving the procedure) To (the person responsible for executing the procedure) Date (the date the procedure was approved) Subject (major activity) Regarding (subactivity) CC: (carbon copy list) Procedure steps and rules Typically a master list is maintained that identifies all the procedures used by the organization along with the approval date. 3. Rules leave little doubt concerning what is to be done. Unlike procedures. 5. Rules require that specific actions be taken with respect to a given situation (step). FOrms and recOrds The task of designing forms for quality is the responsibility of the quality management. They outline the manner in which a recurring activity must be accomplished. rules do not necessarily specify a sequence.. 7. and is dated and approved by senior management.

LLC .” They are usually described as predominantly open or boxed. It is a pictorial representation that uses predefined symbols to describe data flow in a business. The boxed style allocates space to each data item. or the logic of a computer program or process. filing method. Forms are seldom purely “open” or purely “boxed. Completed forms are considered records. Typical control of the forms requires a number to be assigned to the form. The symbols shown in Table 2. 3. signatures. or as a combination of both. The open style is the simplest. Normally. A date is commonly found next to this number signifying the date the form was placed into use. and retention times must be identified for completed forms (or records). It consists of headings and open areas in which data can be collected. This number is usually found in the footer section of the form. and summary data) There are two basic styles of forms: open style and boxed style. bluePrints (PrOduct sPeciFicatiOns) Product specifications developed internally should be identified along with a revision letter code which can be cross-referenced in some manner to a definition of what changed. In most cases.10 are “predefined”. These forms are then listed on the document master list. 5.Planning for Quality  •  33 2. there is a list showing the history of revisions for each part. these specifications are maintained in a filing system. 4. PrOcess FlOwcharting Flowcharting is a graphical technique specifically developed for use in computer science. Instructions (tells how to complete the form) Heading (contains all the general data) Body (specific data the form is designed to collect) Conclusion (contains approvals. their shapes identify data and communicate what is happening to the data. Each box is clearly identified by name or by a brief description. The storage location. © 2010 by Taylor and Francis Group.

2. or interruption in a process. © 2010 by Taylor and Francis Group. halt. Synthesize new processes.34  •  Quality Management: Theory and Application Table 2. 3. Document symbol is used to describe any input or output that is a paper document. Flowcharts help quality professionals to describe and communicate complex sets of processes and data in three principle ways: 1. stop.10 Flowcharting Symbols Symbol Description Terminal symbol indicates the start. Off-page connector is used when the flowchart is continued on another page. Process symbol is a representation of a task performed in the processes. pause. Analyze existing processes. Decision symbol is used for operations that determine which of two or more alternative paths will be followed in a process. On-page connector is used to connect or link other flowchart symbols. Communicate with others. LLC .

table 2. Process Flow As shown in Table 2. normal logic Flow The normal logic flow is downward and by columns from left to right. LLC . (2) loop. except in the case of the decision symbol. and (3) if-then-else. for the most part each symbol has one input and one output. See Table 2. These flows appear the most often when one is describing processes. The efforts in the United States resulted in the set of symbols adopted by the ANSI.11.10.Planning for Quality  •  35 standardization of symbols National and international efforts to develop standard symbols began in the early 1960s.11 Basic Process Flows Sequential Loop If-Then-Else Start Start Start 100 100 100 101 101 102 101 103 102 102 a Stop Stop Stop © 2010 by Taylor and Francis Group. Your process can be a combination of any of these. there are three basic process flows that have been identified in processes: (1) sequential. As you will notice. where there are two outputs (true or false).

These plans are communicated from the senior management down throughout the entire organization and provide the basis for meaningful dialogue within the company. The product quality plans define the features. For short-term processes a project plan (Table 2. and characteristics of the product and/or its components. Additionally.8) is used. © 2010 by Taylor and Francis Group.36  •  Quality Management: Theory and Application Product Quality Plan Business Quality Plan Process Quality Plan Project Planning Figure 2. while a product quality plan is made for each type of material used from raw material to finished goods. you can see that the planning process starts with the business quality plan. Projects can be in the form of design control for new product development.2. Doing so would indicate a lack of management commitment and overdelegation. Nor can these plans start with the product and work backward. cOmmunicatiOn The business quality plan in Table 2. LLC . These plans are integral to each other and cannot be performed separately. summary From Figure 2.2 The quality-planning process.6 is derived from the business quality plan. functions. These plans can then be revised as needed. from which in turn the process quality plans are derived. The process quality plan in Table 2.2 is the first plan to be developed. or the implementation of corrective or preventive actions. The axiom “Measure twice and cut once” more than applies when it comes to planning. product and project plans are generated based upon the process quality plan. ideally for each activity listed.

2. 7. Describe goal incongruence. 10. Describe how the various plans relate to each other. 6. The product. 4. 3. Describe the principles of project planning. 5. Explain the following: A. 8.Planning for Quality  •  37 review QuestiOns 1. Define how plans are communicated. Describe how goals are defined. 9. LLC . Define the business quality plan. The process-planning function C. The business-planning function B.and project-planning functions © 2010 by Taylor and Francis Group. Define the basic process and product plans. What is the purpose of organizational planning? Describe the different types of plans.

Nonconformity: A departure of a quality characteristic from its intended level or state that occurs with a severity sufficient to cause an associated product or service not to meet a specification requirement. usage requirements.3 Controlling for Quality Objectives 1. Introduce and describe the various reporting structures. and product performance reporting. 2. Management (quality) control: A process for setting goals. Define the control process. monitoring performance. and discuss the elements of reporting. Objective: A statement (used interchangeably with goal) designed to give an organization and its members direction and purpose. Management: A process or form of work that involves the guidance or direction of a group of people toward organizational goals or objectives. terminOlOgy Defect: A departure of a quality characteristic from its intended level or state that occurs with a severity sufficient to cause an associated product or service not to satisfy intended normal. 39 © 2010 by Taylor and Francis Group. or foreseeable. LLC . Develop an appreciation for business. and correcting for deviations. process. 3.

In addition to defining the present business. intrOductiOn Defining the organizational purpose is critical with regard to control. popularized by Frederick Taylor. Once the priorities have been established. short-range Objectives Short-range objectives should be derived from in-depth evaluation of longrange objectives. Rules or requirements: Guidelines that require specific and definite actions be taken with respect to a given situation or task. how the customer buys.40  •  Quality Management: Theory and Application Policies: Broad. LLC . Procedures: A series of related steps or tasks expressed in chronological order to achieve a specific purpose. and motivating. Long-range objectives must support and not be in conflict with the stated organizational purpose. concerning the relationship between people and work that seeks to increase productivity and simultaneously make work easier by scientifically studying work methods and establishing standards rather than depending on tradition and custom. where the customer is. However. long-range objectives may be quite different from the organizational purpose and still support it. general guidelines for action which relate to goal attainment. management must determine what the customer buys. Such an evaluation should result in a listing of priorities of the long-range objectives. shortrange objectives can be set to help achieve the long-range objectives. Systems approach to management: A philosophy. and how the customer can be reached. staffing. Management must identify the customer. controlling. Next. organizing. management must also identify what future business will be and what it should be. long-range Objectives Long-range objectives generally extend beyond the fiscal year of the organization. Process approach to management: An approach to the study of management that focuses on the management functions of planning. © 2010 by Taylor and Francis Group.

it can be used for several purposes: © 2010 by Taylor and Francis Group. 4. Once the manager has this information. Profitability Markets Productivity Product Financial resources Physical facilities Research and innovation Organization Human resources Customer service concerns of control In order to maintain stability. a problem occurs whenever the organization’s objectives are not being met.Controlling for Quality  •  41 a cascade approach One approach to setting objectives is to have the objectives “cascade” down through the organizational hierarchy. The objective-setting process begins at the top with a clear. The process continues on down through the organization. 5. 9. 6. Objectives are then established for the various subunits in each major division or department. At middle and lower levels of management. 3. The long-range goals lead to the establishment of more shortrange performance objectives for the organization. The next concern is objective realization. concise statement of the central purpose of the organization. which requires continual monitoring to ensure that adequate progress is being made toward the accomplishment of established objectives. 7. 8. All forms of management control are designed to provide the manager with information regarding progress. The following items represent potential areas for establishing objectives in most organizations: 1. 2. the manager must be sure that the organization is operating within its established boundaries of constraint. LLC . Derivative objectives are then developed for each major division or department. At top management levels. 10. Long-range organizational goals are formulated from this statement. a problem occurs whenever the objectives for which the manager is responsible are not being met.

LLC . State the cause of the problem. To prevent crises To standardize output To appraise employee performance To update plans To protect an organization’s assets written reports There are two basic types of written reports. 3. 4. The steps for effective corrective actions are as follows: 1. 5. managers set standards and monitor results but do not follow up with appropriate corrective actions. Planning the attack Collecting the facts Organizing the facts Interpreting the facts (analytical only) Writing the report correcting for deviations All too often. 2. 3. 1. 2. Analytical reports interpret the facts they present. Informational reports only present the facts. Preparing reports Preparing a report is a four. The first two steps are of little value if corrective action is not taken.or five-step process depending on whether it is informational or analytical.42  •  Quality Management: Theory and Application 1. Determine a solution for the cause and implement it. 4. 3. importance of value Persons conducting a business do so with the expectation of increasing value. analytical and informational. Prove the solution removed the cause. 5. Perform an investigation to determine the cause of the problem. To accomplish this. 4. Identify the problem. 5. 2. they use their outputs to produce goods and © 2010 by Taylor and Francis Group.

in return. In the quality-planning © 2010 by Taylor and Francis Group. That is. they must ensure the value of the outputs produced. Management of an organization will require information for determining how well these objectives have been achieved. To do this. It is essential to recognize this through the development of the performance-logging system. the focus of the value-logging system is on responsibility centers. use outputs to produce more goods and services. This focuses on two factors: 1. Whether the goals have been met (effectiveness) 2. LLC . They sell their products and services and. the purpose in measuring value is to help management control the activities of the firm. Whether they were able to provide products and services with minimal nonconformities (efficiency) In general. they must sell their goods or services to their customers for an amount greater than the cost of producing them. A responsibility center is an activity or collection of activities controlled by a single individual. The relationship of the value to the owner’s outputs may be expressed by the following equation: Value = Outputs – Nonconformance Most businesspeople find that they are unable to conduct their business satisfactorily using only financial measures. To be successful. basic cOncePts An organization should have a set of objectives. OrganizatiOnal resPOnsibility Each individual with decision-making authority in an organization has responsibility for some aspect of achieving his or her company’s objectives.Controlling for Quality  •  43 services that are demanded in the marketplace.

4. A center is a primary or product-producing center if the person responsible has authority only for producing or providing products or services to the customer. 2. In some cases. and delivery Servicing A support center is a center in which the manager has authority only for providing management information or internal services. and measuring and testing equipment Inspection and test status Control of nonconforming product Corrective and preventative action Control of quality records Internal quality audits Training In measuring value. 6. 7. 2. or producing a product. this may mean writing a sales order. a distinction is made between the performance of a responsibility center and the performance of its manager. 4. 5. 8. LLC . preservation. 6. 5. within the organization. this may mean writing business performance statements or financial statements. Contract review Design control Purchasing Customer-supplied product Product identification and traceability Process control Handling. or providing training to employees. Document control Inspection and testing Control of inspection. 9. For © 2010 by Taylor and Francis Group. storage. objectives are proposed for each responsibility center. The responsibility center then becomes the focal point for control. packaging.44  •  Quality Management: Theory and Application process. 3. The type of responsibility the person in charge can exert classifies responsibility centers. with regard to primary centers’ efficiency and effectiveness. In some cases. Examples of support centers are as follows: 1. issuing a purchasing document to purchase raw materials. Examples of primary centers are as follows: 1. 3. 8. 7.

Controlling for Quality  •  45 decisions concerning whether the organization should continue to provide a product or service. Only those nonconformities over which the manager can exert influence are included in the log for managerial performance. In light of the expanding duties involved. Quality managers are now largely responsible for preparing detailed performance statements. performance-logging systems rely on certain © 2010 by Taylor and Francis Group. the rOle OF Quality management The role of the quality professional has changed dramatically from the days when the quality control manager was simply responsible for the inspection of product. all outputs and nonconformance for a responsibility center are accumulated. In this way. the importance of the quality function is usually recognized in a firm’s organizational chart by having the quality executive report directly to the president. For this reason. they are asked to help in measuring the effectiveness of operations and suggesting improvements. This practice allows management to make such decisions as whether the company should continue the process or not. and they are involved in identifying and proposing solutions to emerging problems. a manager may be judged to have performed efficiently for a given activity. LLC . whether deliberate or not. only a subset of activity outputs and nonconformance is accumulated for measuring managerial performance. intrOductiOn tO Quality-rePOrting basics To be useful. performance logging must be assembled and logged objectively. In contrast. Quality professionals are primarily responsible for designing the firm’s performance information system and assuring compliance with quality-logging requirements. Managerial performance is then measured in part by comparing levels of controllable nonconformance against management’s objectives. Those who must rely on such information have a right to be assured that the data are free from bias and inconsistency.

Outputs can take many forms. these principles are not immutable laws like those in the physical sciences. A principle report resulting from the process of accumulating quality information is the business performance or quality report. Sometimes specific principles must be altered or new principles must be formulated to fit circumstances or changes in business practices. Others may simply represent information used to communicate customer requirements throughout the organization. Instead. The body of the statement contains four major sections: center activities. Another basic log is called an activity report or log and is generally required in logging responsibility center activities. Because quality principles are based on a combination of theory and practice. and calculated value (percentage). Examples are sales orders.1). Because quality is more an art than a science. LLC . Some outputs may have readily identifiable characteristics. some controversy about their propriety. purchasing © 2010 by Taylor and Francis Group. These standards (ISO 9000) are called generally accepted quality principles (GAQP). there has always been. The business quality report portrays the operating results of primary and support center activities for a period of time. which are the result of an activity in relationship to the amount of nonconformities. and probably always will be. amount of nonconformance (nc).46  •  Quality Management: Theory and Application standards or guides that have proved useful over the years in imparting valued information. Outputs (or assets) are the resources of the business that can be expressed as the output of an activity. to determine performance. the business Quality rePOrt The business quality report (also known as a performance report) is a listing of the firm’s primary and support responsibility centers’ activities on a given date (see Figure 3. This log will be discussed later. they are guides to action and may change over time. number of outputs (assets) generated. This log is prepared monthly. Quality professionals log company transactions.

2 shows the different product-producing departments’ scope of performance and where they all intersect. The larger the © 2010 by Taylor and Francis Group. documents.1 Assests Nc Value (%) 150 300 450 500 25 25000 12000 5000 42000 250 12 5 17 3 2 1500 150 250 1900 11 92% 98% 96% 99% 92% 94% 99% 95% 95% 96% Business quality report. This means that each function provided exactly what the other function required in order to have a usable output. equipment calibration records.6 Purchasing Vendor Assessment Purchasing Data WORK IN PROCESS 4. Value is the result of comparing outputs to nonconformance to determine percent performance for a given activity. and nonconformance logs. Nonconformities are departures of an asset from its intended requirement. 20XX Primary Centers RAW MATERIAL INVENTORY 4. or a state that occurs with a severity sufficient to cause the asset not to satisfy customer requirements. Value is calculated as follows:  1 −   ∑ Nonconformances  ×100 ∑ Assets  Business performance is the collective value of all the activities within a responsibility center.Controlling for Quality  •  47 Red Bead Company Performance Report January 30. Outputs are usually recorded at the acquisition.3 Contract Review 4. LLC . This is the optimum performance area of the business.4 Design Control Department A Department B Department C FINISHED GOODS INVENTORY 4.15 Delivery Figure 3. This intersection is where all activities are in 100 percent coincidence with each other. Figure 3.

LLC . Any business is an individual unit. this is rarely the case. separate and distinct from other activities. overall primary performance is calculated as follows: Pp = (. intersection.92 × .96 × . These concepts have been developed over time to provide general guidelines for making business quality reports as objective and as useful as possible. In practice.48  •  Quality Management: Theory and Application Sales Engineering Operations Figure 3. A separate business quality report would be maintained for each separate business.80 (or 80 percent). Outputs are recorded and logged on activity reports or logs to provide a “historical record” of events. underlying cOncePts Certain fundamental concepts provide a framework for recording and logging performance. If all these functions completely overlapped. Performance = ( S U E U O ) Example: From the Red Bead Company report. the better the performance. studies have shown that there is an inherent 3–7 percent error rate no matter what you do.2 Performance diagram. Performance activities and © 2010 by Taylor and Francis Group.99 × .96) = . the organization would be 100 percent efficient.95 × .

It © 2010 by Taylor and Francis Group. 2. an event that affects any of the elements in the value equation (outputs or nonconformance) must be logged. Therefore. It provides a chronological record of all outputs and nonconformance generated by an activity. However. 3. activity rePOrting The ultimate objective of performance logging is to record the correct number of outputs generated by an activity and the amount of nonconformance. It provides more information. and various other types of business papers. A performance activity is a business activity that requires quality recognition. The source documents also provide valuable evidence to support the accuracy of the performance log. Information obtained from source documents helps in determining the number of outputs generated and amount of nonconformance found. Some of the reasons for activity reporting or logging are as follows: 1. preceding the recording of outputs and nonconformance. The purpose of the activity report or log is to provide a chronological record of all outputs and nonconformance for a given quality activity. The process of recording outputs and nonconformance is called journalizing. production logs. Such records are called source documents. It fulfills the need for recording in one place all outputs and nonconformance for a responsibility center. After the outputs and nonconformance have been journalized. LLC . purchasing documents. they are totaled and posted to the performance report or log. than can conveniently be recorded on individual records. The outputs and nonconformance are first entered in a preliminary record called an activity report or log. for practical reasons there is a very important quality-logging function. Examples are sales orders.Controlling for Quality  •  49 their results appearing in business quality reports are expressed in terms of units generated. The original sources of information concerning most outputs and nonconformance are quality records. such as a detailed explanation of nonconformance.

LLC . Activity block. description of nonconformance. and totals for each nonconformance description. The simplest form used is a multicolumn form. Record used. such as subcontractor assessment or production department. sale order. This is the responsibility center for the control of quality. The basic form for the activity report or log is illustrated as follows: Department block. total outputs generated. such as purchase order. Source Documents Activity Log Performance Report Shows the Performance Results of Activities Provides data Concerning Assets and Nonconformances Provides Chronological Record Figure 3. The activity report or log represents the first point where data are formally entered in the performance-logging system. asset description. total nonconformance.50  •  Quality Management: Theory and Application includes the date in which the outputs and nonconformance were generated.4). The name of the source document from which data were taken is entered into the record used block. The name of the department generating the activity report or log is entered into the department block. It has columns for the date on which outputs were generated.3. The flow of information for performance logging is as follows. called an activity report or log (see Figure 3. or inspection log.3 Reporting flow. The name of the activity being logged is entered into the activity block. the source documents (quality records) provide the basic information concerning the outputs and nonconformance of each responsibility center activity. As shown in Figure 3. Various activity reports or logs may be used. depending on the size of the firm and the nature of their operations. © 2010 by Taylor and Francis Group. and the source document from which the information was collected. a description of the nonconformance.

Description column. This activity is recorded on the first page of the activity report or log as follows: © 2010 by Taylor and Francis Group. Descriptions of the nonconformance are entered in the columns below the title description of nonconformance.Controlling for Quality  •  51 activity lOg Department: Activity: Record Used: Date: Description Total Nc Page: Description of Nonconformance Figure 3. The description column is used to record the asset activity or an explanation of the activity.4 Basic activity report. Upon review of these orders. 20xx. assume that on May 1. three nonconformities were found. The date is entered on the first row for each asset activity. The total amount of nonconformance found in the outputs is entered in the Nc column. Description of nonconformance. The total number (or sample size taken) of outputs generated by the activity is entered in the total column. John Doe of the Red Bead Company Sales Department took 500 orders from customers. Date column. jOurnalizing PrOcedure To illustrate the recording of activities in the activity report or log. Nc column. Total column. Nonconformance columns. The date the asset was generated is entered in the date column. The quantities of the total nonconformance that are attributed to the nonconformance are entered under each nonconformance description. LLC .

which is a valuable reference if there is some future question about the activity.52  •  Quality Management: Theory and Application activity rePOrt Department: Activity: Record Used: Date: 5/1/xx Sales Order Entry Sale Orders Total 500 Nc 3 Description Sales Taken Wrong Price 2 Page: 1 Description of Nonconformance Wrong Part Number 1 The recording of the outputs (sales taken) and nonconformance (including description of the nonconformance) provides a summary of each day’s activities. © 2010 by Taylor and Francis Group. the Purchasing department wrote 150 purchase orders for raw material purchases and 12 nonconformities were found.500 nonconformities were found. Department A produced 25. 20xx. LLC .000 units and 1. activity lOg Department: Activity: Record Used: Date: 5/1/xx Production Purchasing Purchase Orders Total 150 Nc 12 Description Orders Made Wrong Quantity Ordered 10 Page: 1 Description of Nonconformance Wrong Part Number 2 Activity: May 3. For example. Activity: May 2. the Red Bead Company completed the following additional activities during May. 20xx.

005” 25 Activity: May 10.000 units with 250 nonconformities. Department C produced 5. activity lOg Department: Activity: Record Used: Date: 5/1/xx Production Department B Production Work Orders Total 12000 Nc 150 P/N 536 Description Wrong Size <.000 units and 150 nonconformities were found. Department B made 12.05” 300 Activity: May 4.001” 125 Page: 1 Description of Nonconformance Out of Tolerance > . activity lOg Department: Activity: Record Used: Date: 5/1/xx Production Department C Production Work Orders Total 5000 Nc 250 Cracked 175 Fading 75 P/N 345 Description Page: 1 Description of Nonconformance © 2010 by Taylor and Francis Group. 20xx. LLC .Controlling for Quality  •  53 activity lOg Department: Activity: Record Used: Date: 5/1/xx Production Department A Production Work Orders Total 25000 Nc 1500 Description P/N 12345 Wrong Color (Blue) 1200 Page: 1 Description of Nonconformance Out of Tolerance > . 20xx.

the posting is done either manually or by dataprocessing methods. LLC . 20xx. It consists of transferring totals for the outputs (total) column and the nonconformance (nc) column on the individual activity reports or logs to the performance log. Many business activities require the use of more than one entry.54  •  Quality Management: Theory and Application Activity: May 12. These logs are usually completed by the responsibility center manager and given to the quality organization for posting in the performance log. there was only one entry. The conversion to paperless information systems has become very common among businesses. This is usually performed once a month by the quality organization. Posting is illustrated in Figure 3. activity lOg Department: Activity: Record Used: Date: 5/1/xx Shipping & Receiving Delivery Packing Slips Total 250 Nc 11 Description Shipments Raw Mat’l Delay’d 10 Page: 1 Description of Nonconformance Date Change Made 1 In the activities recorded above. POsting The process by which the outputs and nonconformance are summarized and transferred to activities on the performance log is called posting. © 2010 by Taylor and Francis Group. Shipping & Receiving shipped 250 units and 11 shipments were found nonconforming. Any entry on the activity report or log requiring more than one entry is added to the next available line until the record is complete. In most businesses.5.

define the number of data points and specify the appropriate format for recording the data. PrOduct PerFOrmance rePOrting Inspection records should be maintained that are identifiable to batch. An activity report or log is maintained providing a chronology of the inspections performed. LLC . or work order number.4 Design Control 4.5 Posting to the business quality report. The inspection records should contain the following: © 2010 by Taylor and Francis Group. When data are to be taken.Controlling for Quality  •  55 Activity Report Department: Activity: Record Used: Date: 5/1/×× Sales Order Entry Sale Order Description Sales Taken Description of Nonconformance Wrong Wrong Price Part Number 2 1 T otal 500 Nc 3 T otals 500 3 2 1 Red Bead Company Performance Report May 30.15 Delivery Primary Performance 250 Nc 3 2 12 5 17 1500 150 250 1900 11 95% 96% 80% 96% Value (%) 99% 92% Figure 3.3 Contract Review 4. 20×× Primary centers 4. serial number. lot.6 Purchasing Vendor Assesment Purchasing Data 4.9 Process Control Department A Department B Department C Assets 500 25 150 300 450 25000 12000 5000 42000 4.

07 1.00 © 2010 by Taylor and Francis Group. 3. waivers. The nonconformities become class bounties. The nonconforming class can then be arranged with the highest-occurring nonconformity at the top on down to the lowest. and made available for review. and the numbers of nonconformities are the cumulative frequency of occurrence. dated.g. LLC .56  •  Quality Management: Theory and Application 1.33 .13 .. From Table 3. provided on a timely basis to responsible functions as feedback to be used for trend analysis or process improvement.1. Written disposition. analysis ranked Order analysis The business quality report and activity reports provide a basis for establishing frequency distributions.27 . as shown in Table 3. An acceptance decision should be reached for each inspection identifying whether or not compliance with acceptance criteria has been achieved. it should be obvious that cracked is the most frequently occurring nonconformity. Inspection data and results compared to acceptance criteria.1 Ranked Order Analysis Rank 1 2 3 4 5 Summary Description of Nonconformity Cracked Loosened Leaking Sticking Fractured Tally IIIII IIII III II I f 5 4 3 2 1 15 % . Hence. signed. 2. including descriptions of any nonconforming items.20 . this should be the first problem to be corrected. a material review board) for release of nonconforming items and services. table 3. This acceptance or rejection decision should be recorded. Inspection data. or deviations from authorized organizations (e.1.

The major branches of the fishbone diagram are used to determine the major influences that would result in the problem outcome.6 People Fishbone diagram.Controlling for Quality  •  57 Fishbone diagram The fishbone diagram shown in Figure 3.6 is used to determine causes and effects which relate to a nonconformity. 4. Method Gauges Machine Maintenance Problem Lack off training Brittle material Material Figure 3. LLC . 3. It is interesting to note here that changing any variable in the process will result in a change in the output regardless of whether it is the actual cause. 2. Material: Here you would identify those factors related to the material used in the process. This technique has proven to be useful in determining the causes of problems. Method: This is the branch where you would describe those factors in the process that would affect the output with regard to the current practices. The braches are as follows: 1. Machine: Here you would identify those factors which are related to the equipment used in the process. © 2010 by Taylor and Francis Group. People: Here you would identify those factors related to the people working within the process.

58  •  Quality Management: Theory and Application cOntrOlling nOncOnFOrmance identiFicatiOn identification during work When operators are engaged in an activity to produce a product. In essence. 2. markings. © 2010 by Taylor and Francis Group. 3. LLC . the nonconforming units must be appropriately identified to ensure against their use. To provide a basis for action for the product already on hand To decide if the product meets requirements To provide a basis for action with regard to the process To decide if the process requires action identification of nonconforming Product When in the course of inspection (by the operator or independent inspector) nonconforming product is detected. tags. the act of regulating or making modifications is considered a component of that activity. segregatiOn short-run Production There are cases where the lot or batch integrity must be maintained. Where integrity of the lot is not an issue.. inspection The purpose of inspection with respect to products is as follows: 1. or location). completion of work Nonconformities are usually detected after the completion of work. it should be identified by some suitable means (e.g. 4. In such circumstances. any changes made during the manufacture of a product are not considered a nonconformity. This occurs when the completed product (which is the result of work) is inspected with regard to preestablished requirements.

disPOsitiOn responsibilities for disposition Over the years. This requires the consensus of all the managers in the disposition decision. 3. risk Associated nonconformance risk levels are defined as follows: 1. © 2010 by Taylor and Francis Group. LLC . Material review boards: In some cases. Nonconforming units must be separated from other materials to prevent unintended use. Critical: A nonconformity that may cause bodily harm. Minor: A nonconformity that is neither critical nor major. injury. Major: A nonconformity that may reduce the life of the product and/ or is readily noticeable by the customer. 2. nonconforming units must be removed from the process for disposition. the following are some current practices: 1. homogeneous flow). there have been many ways to determine how to dispose of nonconforming material. Management: Other organizations have delegated the responsibility for disposition of nonconforming product to a specific departmental manager or managers. 2. and/or prevents the product from performing its intended function. or death.Controlling for Quality  •  59 units should be isolated or removed from the flow of production to prevent unintended use. organizations have opted to establish a group of top managers to review nonconforming material for disposition. long-run Production In the case of mass production (or continuous.

magnitude of the nonconformity An analysis should be made of the nonconformities by product to detect statistical trends. Investigate the cause of nonconformities relating to the product.or system-based. due to the nature of the nonconformity. 4. the customer must be notified at once and the material placed in quarantine. This is done using ranked order analysis (see Table 3. 2. process.60  •  Quality Management: Theory and Application 3.1) to determine the most frequently occurring nonconformity for corrective action. If the nonconformity is detected while the product is in transit to the customer or storage. the operator can dispose of nonconforming material immediately. Implement corrective and preventive actions. Identify the root cause of issues requiring corrective or preventive action. Operators: In some cases. corrective action should be taken immediately. 3. cOrrective and Preventive actiOn (caPa) methOdOlOgy immediate action required When the nonconformity has an associated risk of critical or major. the steps are the same. and quality system. whereas preventive actions are process. © 2010 by Taylor and Francis Group. and record the results of the investigation. It should be noted that corrective actions are always product-based. The steps are as follows: 1. Determine the steps needed to deal with any problems requiring corrective or preventive action. LLC . caPa methodology When performing either corrective or preventive action.

resulting in improved overall value. these records must be categorized and summarized to provide a chronology of events related to the department’s output. or training record. This could be a purchase order. © 2010 by Taylor and Francis Group. Once the data have been collected on records.Controlling for Quality  •  61 5. In this way. Initiate controls to ensure that actions taken are effective. summary Departmental managers are primarily concerned with the efficiency of certain activities in their department which are indicators of their overall performance. Each activity usually has a source document related to the output. Number of outputs produced 2. The documents provide a record of the event in writing. they must determine the output of each activity and its interrelationship with regard to providing value to the customer. Apply controls to ensure that corrective and preventive action is taken. LLC . while others are directly related to or incorporated into the output itself. departmental managers should identify the record used to collect pertinent data. In addition. packing list. 6. Some activities provide support to achieving the desired output. 7. By monitoring these activities. This chronology usually provides the following information: 1. To do this. key data are collected to provide useful information to management. Number of nonconformities found 3. or eliminate nonconformities. reduce. Description of the nonconformities The departmental managers should establish goals and requirements in writing which are consistent with the overall company performance. departmental managers can prevent. Confirm that relevant information on actions taken is submitted for management review. which preserves the knowledge of the transaction.

9. 7. Describe how overall business performance is calculated. Explain the following: A. 3. What is the purpose of the business quality report? Describe the different types of centers. 5. The business-reporting structure B. Define the basic activity-reporting process. Describe the three principles of quality control. 8. 4. Describe how goals are defined. Describe how value is calculated. Define the business quality report. LLC .62  •  Quality Management: Theory and Application review QuestiOns 1. 2. The product. 6. Journalizing and posting C. Define how the reports are communicated.and project-planning function © 2010 by Taylor and Francis Group. 10.

4
Staffing for Quality

Objectives
1. Define the employee-forecasting process, and discuss the elements of resource planning. 2. Develop a scheme for the development of job descriptions and requirements. 3. Describe the various education and training methodologies.

terminOlOgy
Education: The act or process of imparting or acquiring knowledge, skill, or judgment. Experience: The application of education. Research: Research is a human activity based on intellectual investigation and aimed at discovering, interpreting, and revising human knowledge on different aspects of the world. Research can use the scientific method, but need not do so. Scientific research relies on the application of the scientific method, a harnessing of curiosity. This research provides scientific information and theories for the explanation of the nature and the properties of humans. It makes practical applications possible. Scientific research is funded by public authorities, by charitable organizations, and by private groups, 63
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64  •  Quality Management: Theory and Application including many companies. Scientific research can be subdivided into different classifications. Speculation: Contemplation or consideration of a subject; meditation. A conclusion, opinion, or fact reached by conjecture. Reasoning based on inconclusive evidence; conjecture or supposition. Engagement in risky business transactions on the chance of quick and/or considerable profit. A commercial or financial transaction involving speculation. Theory: A set of statements or principles devised to explain a group of facts or phenomena, especially one that has been repeatedly tested or is widely accepted and can be used to make predictions about natural phenomena. The branch of a science or art consisting of its explanatory statements, accepted principles, and methods of analysis, as opposed to practice: for example, a fine musician who had never studied theory.

FOrecasting human resOurces needs
Forecasting and/or scenario analysis is a process of analyzing possible future staffing events by considering alternative possible outcomes (scenarios). The analysis is designed to allow improved decision making by allowing more complete consideration of outcomes and their implications. For example, in economics and finance, a financial institution might attempt to forecast several possible scenarios for the economy (e.g., rapid growth, moderate growth, and slow growth), and it might also attempt to forecast financial market returns (for bonds, stocks, and cash) in each of those scenarios. The institution might consider subsets of each of the possibilities. It might further seek to determine correlations and assign probabilities to the scenarios (and subsets, if any). Then it will be in a position to consider how to distribute assets between asset types (i.e., asset allocation); the institution can also calculate the scenario-weighted expected return (this figure will indicate the overall attractiveness of the financial environment). Depending on the complexity of the financial environment, economic and finance scenario analysis can be a demanding exercise. It can be difficult to foresee what the future holds (e.g., the actual future outcome may

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Staffing for Quality  •  65 be entirely unexpected), that is, to foresee what the scenarios are, and to assign probabilities to them; and this is true of the general forecasts, never mind the implied financial market returns. The outcomes can be modeled mathematically and statistically (e.g., taking account of possible variability within single scenarios as well as possible relationships between scenarios). Financial institutions can take the analysis further by relating the asset allocation that the above calculations suggest to the industry or peer group distribution of assets. In so doing, the financial institution seeks to control its business risk rather than the client’s portfolio risk. In politics or geopolitics, scenario analysis involves modeling the possible alternative paths of a social or political environment, and possibly diplomatic and war risks. For example, in the recent Iraq War, the Pentagon certainly had to model alternative possibilities that might arise in the war situation and had to position material and troops accordingly. The difficulty of such forecasting is highlighted in that case by the fact that it is arguable that the Pentagon failed to foresee the lawlessness and insecurity of the postwar situation and the level of hostility shown toward the occupying forces. Scenario analysis can also be used to illuminate “wild cards.” For example, analysis of the possibility of the earth being struck by a large celestial object (a meteor) suggests that while the probability is low, the damage inflicted would be so high that the event is much more important (threatening) than the low probability (in any one year) alone would suggest. However, this possibility is usually disregarded by organizations using scenario analysis to develop a strategic plan, since it has such overarching repercussions. In the case of personnel planning (see Table 4.1), the amount of additional resources that are needed can be estimated based upon the current staffing level and projected increase or decrease on the output of each process. Additionally, the required management staff can be estimated based upon the 1:5 to 1:7 ratio discussed in Chapter 1. From Table 4.1, the current staffing and projected staffing calculated based upon expected process output increase at some future period in time. This is done by determining the current outputs based upon the business quality report (see Figure 3.1), organizational responsibility (see 4), and calculating the total hours worked by the associates (i.e., 2 associates × 160 hours per month = 320 hours total), then calculating the output rate (i.e., 230 output/320 total hours = 0.718 each). Using the projected

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40 1.00 Engineering Mary Jim Production Sue Alice Production Sue Alice 1 1 1 1 1 1 Production Production Shipping/ receiving Quality Mary Alice Mary Alice Hal Sam 1 1 30 1 2 1 1 1 1 1 1 1 1 1 8 8 - - 100 160 0.00 0.01 0.00 42.40 2.25 0.000 320 15.00 6.13 50 2 25 150 0.60 100 160 0.48 0.02 0.00 0.00 0.15 3.66  •  Quality Management: Theory and Application table 4.000 12.00 Sally Andy 1 1 Total 45 8 0.10 0.01 0. Current Resources Vice Presidents Supervisors 3.01 0.13 0.01 0.000 4. [1:5] Primary Leads Rate .26 0.00 8.00 0.20 1.00 14.04 3.48 0.00 0.60 2.21 10.10 0.07 0.500 0.30 0.25 0.00 0.40 1.40 0.98 2.63 0.05 0.52 0.02 0.90 59.800 5. Forecasted Resources Managers [1:5] Directors [1:5] Supervisors [1:5] Additional Leads[1:5] Associates Associates Managers Directors Alternate Requirement Customer related processes Design control Purchasing Customer supplied property Identification Process control Preservation of product Servicing Sales Tom Alice 2 1 5 1 3 1 1 1 1 1 - - 250 10 500 500 320 0.24 0.10 0.05 0. P.20 25.02 © 2010 by Taylor and Francis Group. Process Output [BQR] Projected Output Increase Current Output Total Hours 4.63 25 0.01 1.63 1.1 Personnel Forecasting 1.30 1. Organizational Responsibility Department Responsible 2.24 0.05 0.00 1.05 0.63 20 0.68 0. LLC V.90 11.00 0.78 800 480 160 0.01 0.03 0.00 5.34 0.01 0.20 0.25 1.00 0.15 0.

40 additional). the total number of associates can be calculated (i. In the fields of human resources (HR) and industrial psychology. training needs assessment. there would be no need for a level higher than supervisory. When a job analysis is conducted for the purpose © 2010 by Taylor and Francis Group.48 leads). Job analysis is performed as a preliminary to successive actions. and organizational analysis and planning. some accommodation. we can calculate the expected personnel increase (i.. For this case. an imbalance between associates and management becomes clear. such as task analysis) to determine the elements of the domain which must be sampled in order to create a content-valid exam. writing a job description. selection and promotion.Staffing for Quality  •  67 increase in output. LLC ..4 total associates required). determining compensation. or without. job analysis is often used to gather information for use in personnel selection. 2. 2 current associates + 0.718 rate = 0. When this addition is added to the existing number of associates.e. This is done for each subsequent management level to determine the most efficient number of managerial levels required. Professionals developing certification exams should use job analysis (often called something slightly different..e. classification. 50 increase × 0.4 additional = 2. including defining a job domain.e. By dividing the total number of associates by 5. This organization will require a shift in responsibilities and staffing. creating performance appraisals. The field of vocational rehabilitation uses job analysis to determine the physical requirements of a job to determine whether an individual who has suffered some diminished capacity is capable of performing the job with. In this case. there are far too many managerial personnel (too many cooks spoil the broth) and not enough associates. we can derive the number of leads required (i. training. jOb descriPtiOns job analysis The general purpose of job analysis is to document the requirements of a job and the work performed. By comparing current and projected staffing needs at the various levels.4 associates/5 = 0. and/or compensation.

therefore. instructions. Questionnaires are the most common methodology employed by certification test developers. Job analysts in these contexts typically come from a health occupation such as occupational or physical therapy. it is common to use more than one of these methods. LLC . factual evidence of the degree of strength required for job performance is needed to justify that a disabled worker is legitimately qualified for disability status. © 2010 by Taylor and Francis Group. Methods There are several ways to conduct a job analysis. questionnaires (structured. or both). observation. In job analysis conducted by HR professionals. During the tour. In the United States. including interviews with incumbents and supervisors. the job analysts may tour the job site and observe workers performing their jobs. and gathering background information such as duty statements or classification specifications. openended. Accurate. although the content of the questionnaires (often lists of tasks that might be performed) is gathered through interviews or focus groups. etc. the primary method is direct observation and may even include video recordings of incumbents involved in the work. and are acting under the supervision of. often a fairly “high-stakes” decision.68  •  Quality Management: Theory and Application of valuing the job (i. finally. And. In the context of vocational rehabilitation. It is common for such job analysts to use scales and other apparatus to collect precise measures of the amount of strength or force required for various tasks. quality charts. this is called job evaluation. job analysts typically are industrial psychologists or have been trained by.. The analyst may then meet with a group of workers or incumbents. the analyst may collect materials that directly or indirectly indicate required skills (duty statements.e. safety manuals. Job analysts in this area typically operate under the supervision of a psychologist. a survey may be administered. billions of dollars are paid to disabled workers by private insurers and the federal government (primarily through the Social Security Administration). an industrial psychologist. determining the appropriate compensation for incumbents). For example. Disability determination is.). In these cases.

In fact. skills. and to a content specification for item writers and other technical members of the exam development team. abilities.. the number) of items that must be included on the exam from that content area. From Figure 4. as well as descriptions of the knowledge. the various positions in the company should be staffed by competent employees as defined by the requirements. Then. in the United States. performed on the job.. This position is further broken down into education required. the Uniform Guidelines on Employee Selection Procedures). LLC . and other characteristics (KSAOs) required for performing those tasks. These in turn are then documented as position requirements for a given title. In addition.1). Once the analysis is done.e. for each title (see Figure 4. or tasks. and tasks. working conditions (e. Position requirement As a minimum. The tasks category has been further broken down into the individual steps. you should describe the education and experience required and the tasks performed.g. therefore.g.. In certification testing. you should identify each title in the business through the use of the organizational chart (see Figure 1. and a variety of other aspects that characterize work performed in the position(s). there should be very few titles in the organization. experience required.3). job analysis can uncover tools and technologies commonly used on the job. the results of the job analysis lead to a document for candidates laying out the specific areas that will be tested (named in various ways. the number of titles should not exceed the number of employees. such as exam objectives). © 2010 by Taylor and Francis Group.Staffing for Quality  •  69 Results Job analysis or descriptions can result in a description of common duties.1. job analysis should be performed in such a way as to meet the professional and legal guidelines that have been established (e. When used as a precursor to personnel selection (a commonly suggested approach). the department has been identified: sales in this case and one of the positions under sales. Note that you can have several people with the same title. a cubicle-based environment. The content specification outlines the specific content areas of the exam and the percentage (i. or outdoor work).

educatiOn and training systems of Formal education Educational systems are established to provide education and training. Teaching refers to learning facilitated by a real live instructor. Education is a broad concept. although this varies between and sometimes within countries. understand. In general. Primary Education Primary (or elementary) education consists of the first years of formal. LLC . A teaching professional delivers teaching which enables learning. and be able to do as the result of education.70  •  Quality Management: Theory and Application Sales Department (See Org. Globally. primary education consists of six or seven years of schooling starting at the age of five or six. regulations. structured education. delivered either by an instructor or in other forms.1 Organizational breakdown of positions. in most cases for children and the young. around © 2010 by Taylor and Francis Group. and funding enables teachers to teach to the best of their abilities. examinations. Training refers to learning that prepares learners with specific knowledge. Chart) Inside sales (Group) Order Entry (Position) Education Experience Tasks Sales Person (Position) Review Orders Handle Inquiries Handle Changes Figure 4. skills. and a system of policies. A curriculum defines what students should know. Instruction refers to the intentional facilitating of learning toward identified goals. or abilities that can be applied immediately. it refers to all the experiences in which people can learn something. structures.

The exact meaning of any of these terms varies between the systems. lyceums. is the noncompulsory educational level following the completion of a school providing a secondary education. middle schools. Secondary education is characterized by being the transition from the typically compulsory. also called tertiary. postsecondary. but is generally around the seventh to the tenth year of schooling. Primary schools in these countries are often subdivided into infant schools and junior schools. The division between primary and secondary education is somewhat arbitrary. schools for this period or a part of it may be called secondary or high schools. © 2010 by Taylor and Francis Group. The purpose of secondary education is to give common knowledge. colleges. primary and secondary education together are sometimes referred to as K–12 education. LLC . with the transition to the final stage of secondary education taking place at around the age of fourteen. Depending on the system. and to prepare for higher education or to train directly in a profession. The exact boundary between primary and secondary education varies from country to country and even within them. third-stage. comprehensive primary education for minors. or vocational schools. Secondary education occurs mainly during the teenage years.. secondary education consists of the years of formal education that occur during adolescence. to the optional. Secondary Education In most contemporary educational systems of the world. it is compulsory for children to receive primary education. but it generally occurs at about eleven or twelve years of age. schools which provide primary education are referred to as primary schools.Staffing for Quality  •  71 70 percent of primary-age children are enrolled in primary education. most countries have committed to achieving universal enrollment in primary education by 2015. Some educational systems have separate middle schools. such as a high school.g. or postsecondary education. In the United States and Canada. selective tertiary. gymnasiums. and in many countries. Higher Education Higher education. Under the Education for All programs driven by UNESCO. university or vocational school) for adults. and this proportion is rising. In the United States and Canada. and in New Zealand Year 1–13 is used. or higher education (e.

Higher education in the United States and Canada generally involves work toward a degree-level or foundation degree qualification. a high proportion of the population (up to 50 percent) now enters higher education at some time in their lives. has become widespread in many countries. for example. Alternative Education Alternative education. and as a source of trained and educated personnel for the rest of the economy. diplomas.72  •  Quality Management: Theory and Application secondary school. the following is a list of academic program levels: 1. Master degree: Requires 30 credits (bachelor degree or assessment equivalency required) 4. Doctorate: Requires 60 credits (master’s degree or assessment equivalency required) Adult Education Lifelong learning. or gymnasium. also known as nontraditional education or educational alternative. Adult education takes on many forms. or academic degrees. is a broad term which may be used to refer to all © 2010 by Taylor and Francis Group. as well as vocational education and training. In most developed countries. both as a significant industry in its own right. Tertiary education generally results in the receipt of certificates. LLC . research. it includes both the undergraduate level (sometimes referred to as tertiary education) and the graduate (or postgraduate) level (sometimes referred to as graduate school). and within the realm of teaching. Higher education includes the teaching. from formal class-based learning to self-directed learning. or adult education. Tertiary education normally includes undergraduate and postgraduate education. Higher education is very important to national economies. Master of business administration: Requires 40 credits (bachelor degree or assessment equivalency required) 5. Bachelor degree: Requires 120 credits 3. Associate degree: Requires 60 credits 2. and social services activities of universities. Colleges and universities are the main institutions that provide tertiary education.

Alternatives of the latter type are often the result of education reform and are rooted in various philosophies that are commonly fundamentally different from those of traditional compulsory education. training Training refers to the acquisition of knowledge. This may include both forms of education designed for students with special needs (ranging from teenage pregnancy to intellectual disability). Degrees by distance courses: Distance learning programs offer accelerated coursework-based degrees for busy individuals who want a high-quality education without interrupting their present careers or family responsibilities. Degrees by assessment: Portfolio assessment of knowledge acquired through experience and prior learning. 5. and assignments. vary widely but often emphasize the value of small class size.Staffing for Quality  •  73 forms of education outside of traditional education (for all age groups and levels of education). 2. close relationships between students and teachers. academic projects. 4. independent schools. others are more informal associations of teachers and students dissatisfied with certain aspects of traditional education. scholarly. and competencies as a result of the teaching of vocational or practical skills and knowledge that relate to specific competencies. 3. or philosophical orientations. Degrees by exam: “Testing out. LLC . and homebased learning. Degrees by research: Independent study. and forms of education designed for a general audience which employ alternative educational philosophies and/or methods. skills.” passing online exams such as the College Level Examination Program (CLEP). and a sense of community. which include charter schools. alternative schools. While some have strong political. It is the core of apprenticeships and provides the backbone of content at technical colleges and polytechnics. List of Adult Alternative Educational Methods 1. © 2010 by Taylor and Francis Group. On-the-job training (OJT). These alternatives.

On-the-job training has a general reputation as most effective for vocational work. Off-the-job training has the advantage that it allows people to get away from work and concentrate more thoroughly on the training itself. equipment. capacity. A log is provided to list all training received and the date. The record also identifies the title of the individual. This type of training has proven more effective in inculcating concepts and ideas. Additionally. LLC . as well as his or her highest level of education and initial hire date. An individual training record should be maintained. and update skills throughout a person’s working life. 3. observers of the labor market recognize the need to continue training beyond initial qualifications in order to maintain. using the actual tools. documents. 2. People in many professions and occupations refer to this sort of training as professional development. or profession. as shown in Figure 4.2. On-the-job training takes place in a normal working situation. Off-the-job training takes place away from normal work situations— implying that the employee does not count as a directly productive worker while such training takes place. upgrade. there is a column for the name or initials of the person who verified the training or education. This information should be verified with a copy of a diploma.74  •  Quality Management: Theory and Application In addition to the basic training required for a trade. certificate. occupation. or school transcript which is attached to the record. Some people use a similar term for workplace learning to improve performance: training and development. © 2010 by Taylor and Francis Group. training records Each employee (exempt or not) should have a title. 4. and performance. Training has specific goals of improving one’s capability. One can generally categorize such training as on-the-job or off-the-job: 1. or materials that trainees will use when fully trained. The record identifies the employee by first and last name.

Staffing for Quality  •  75
EMPLOyEE TRAINING RECORD
Last Name: First Name: Title: Date Hired: Verified by

Highest Educational Level Achieved: Date

Description of Skills, Training or Education Received

Figure 4.2

Employee training record.

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76  •  Quality Management: Theory and Application

summary
The staffing function is a direct derivative of the organizing function. The company must first establish the organizational structure and identify how activity will be carried out under planning. Once planning has been performed, then organizational control is its natural extension. During the planning and control process, we identified the tasks, tracking, and objectives that are to be met. This in turn leads to the staffing function to accomplish the company’s mission. A personnel forecast is developed based upon expected process output. The forecast defines the personnel requirements at all levels in the organization. Position requirements are then established to identify education, experience, and tasks performed. Once the position requirements have been defined, the organization develops education and training requirements, including records of these activities.

review QuestiOns
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. What is the purpose of the personnel forecast? Describe the job analysis process. Define how titles are identified. Define the basic position requirements for a given title. Describe the different levels of education. Describe adult education. Describe the alternative methods of education. Describe on-the-job training. Define different levels of postsecondary education. Explain the following: A. The training record B. How training is verified C. Experience

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5
Motivating for Quality

Objectives
1. To develop an understanding of the motivation process. 2. To identify leadership and management styles. 3. To explore how motivation impacts performance.

terminOlOgy
Goodwill: A kindly feeling of approval and support; benevolent interest or concern; the favor or advantage that a business has acquired, especially through its brands and its good reputation. Happiness: A state of well-being and contentment. Job: Something produced by or as if by work (did a nice job). Leader: Person who directs a group or unit; a person who has commanding authority or influence. Morale: The mental and emotional condition (as of enthusiasm, confidence, or loyalty) of an individual or group with regard to the function or tasks at hand. Motivation: A compelling force, stimulus, or influence. Satisfaction: Fulfillment of a need or want.

77
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He drew twelve distinctions between the two groups: © 2010 by Taylor and Francis Group. Abraham Zaleznik (1977). regardless of the reason. 4. 3. He saw leaders as inspiring visionaries concerned about substance. a clear distinction between management and leadership may nevertheless prove useful. With this premise. implying that an effective manager should possess leadership skills. management forms a subset of the broader process of leadership. They put it this way: “Leadership occurs any time one attempts to influence the behavior of an individual or group. Management is a kind of leadership in which the achievement of organizational goals is paramount. 2. you can view leadership as follows: 1.78  •  Quality Management: Theory and Application lead. Warren Bennis (1989) further explicated a dichotomy between managers and leaders. for example. Management involves power by position. and guide Leadership is closely linked with the idea of management. The two are synonymous. management is a subset of leadership. or in other words. Hersey and Blanchard (1982) use this approach: they claim that management merely consists of leadership applied to business situations. cOach. 2. Centralized or decentralized Broad or focused Decision-oriented or morale-centered Intrinsic or derived from some authority Any of the bipolar labels traditionally ascribed to management styles could also apply to leadership styles. One clear distinction could provide the following definition: 1. and an effective leader should demonstrate management skills. delineated differences between leadership and management. Leadership involves power by influence. This would allow for a reciprocal relationship between leadership and management. while viewing managers as planners who have concerns with process.” However. LLC .

Paul Birch (1999) also sees a distinction between leadership and management. leaders ask what and why. and market value leadership. Managers imitate. leaders are their own person. managers concern themselves with tasks. Managers rely on control. The difference lies in the leader realizing that the achievement of the task comes about through the goodwill and support of others (influence). time leadership. while leaders concern themselves with people.” Indeed. as a broad generalization. 2. while the manager may not. the things that characterize a great leader include the fact that they achieve. but good leaders may see profit as a byproduct that flows from whatever aspect of their vision that differentiates their company from the competition. leaders show originality. 8. LLC . 3. He observes that. leaders inspire trust. 4. and many of the worst managers treat people as just another interchangeable item. an organization might have the overall task of generating profit. revenue leadership. This goodwill and support originate in the leader seeing people as people. Managers typically follow and realize a leader’s vision. leaders develop. 10. or a vision he or she has articulated in order to achieve a task. Managers accept the status quo. people see the task as subordinate to the vision. 5. leaders originate. People form one of these resources. leaders do the right things. 7. 11. Managers do things right. 9. Managers ask how and when. Managers have an eye on the bottom line. Managers have a short-term perspective.Motivating for Quality  •  79 1. © 2010 by Taylor and Francis Group. Managers administer. A leader has the role of motivating others to follow a path he or she has laid out.” The manager often has the role of organizing resources to get something done. leaders challenge the status quo. 6. 12. Often. Managers copy. Managers maintain. leaders innovate. not as another resource for deployment in support of “the task. leaders have an eye on the horizon. For instance. Managers emulate the classic good soldier. Effective leaders create and sustain competitive advantage through the attainment of cost leadership. Managers focus on systems. Birch does not suggest that leaders do not focus on “the task. leaders focus on people. leaders have a longer-term perspective.

Again.” Pitcher also observes that a balanced leader exhibiting all three sets of traits occurs extremely rarely: she found none in her study. but group leadership can bring more expertise. inspiring. and hard-headed. a teacher. visionary. However. one could include participatory management. Similarly. Group decision making sometimes earns the derisive label committee-itis because of the longer times required to make decisions. and perspectives through a democratic process. sensible. and so on. She speculates that no one profile offers a preferred leadership style. In many cases. Some management styles tend to deemphasize leadership. as well as when not needed. steady. and technocrats were cerebral. intuitive. democratic management. and trustworthy. Nonbusiness organizations should find it easier to articulate a non-money-driven inspiring vision that will support true leadership. often this does not occur. micromanagement. and emotional. reasonable. Patricia Pitcher (1994) has challenged the division into leaders and managers. depend more on a leader to provide direction. Other management styles. Differences in the mix of leadership and management can define various management styles. group leadership (multiple leaders) can prove effective. and if we have an ugly job that needs to get done like downsizing. a Scout or Guide leader. an officer in the armed forces. She claims that if we want to build.80  •  Quality Management: Theory and Application Leadership does not only manifest itself as purely a business phenomenon. Many people can think of an inspiring leader they have encountered who has nothing whatever to do with business: a politician. if we want to solidify our position. Note. we should find an “artist leader”. we should find a “technocratic leader. © 2010 by Taylor and Francis Group. She used a factor analysis (in marketing) technique on data collected over eight years and concluded that three types of leaders exist. craftsmen were well-balanced. management does not occur only in the context of business. and top-down management. LLC . we can think of examples of people who we have met who fill the management niche in nonbusiness organizations. uncompromising. predictable. Included in this group. however. Having a single leader (as in a dictatorship) allows for quick and decisive decision making when needed. such as authoritarian management. detail-oriented. this does not mean it necessarily has weak leadership. daring. we should find a “craftsman leader”. experience. and collaborative management styles. each with very different psychological profiles: artists were imaginative. entrepreneurial. fastidious. that just because an organization has no single leader giving it direction.

Objectives and tasks are set. and can engender loyalty from the employees. Feedback is again generally downward. a Manager minimizes downside risk” ( ). Paternalistic A more paternalistic form is also essentially dictatorial.Motivating for Quality  •  81 Bruce Lynn postulates a differentiation between leadership and management based on approaches to risk. leadership styles Autocratic An autocratic or authoritarian manager makes all the decisions. but doesn’t move forward. Management without leadership avoids any steps backward. leading to a lower labor turnover rate. keeping the information and decision making among the senior management. and the decisions will all be similar. On the other hand. The leader explains most decisions to the employees and ensures that their social and leisure needs are always met. Specifically. well-managed business. the decisions tend to be in the best interests of the employees rather than the business. but as many (if not more) steps backward. this in turn can project an image of a confident. Leadership without management yields steps forward. The communication involved with this method is mainly downward. however. “A Leader optimizes upside opportunity. however. thanks to the emphasis on social needs. This style can be highly advantageous. A good example of this would be David Brent running the business in the British version of the fictional television show The Office. feedback to the management will occur in order for the employees to be kept happy. subordinates may become highly dependent upon the leaders and increased supervision may be needed. It shares © 2010 by Taylor and Francis Group. He argues that successful executives need to apply both disciplines in a balance appropriate to the enterprise and its context. This can help balance out the lack of worker motivation caused by an autocratic management style. and the workforce is expected to do exactly as required. The main advantage of this style is that the direction of the business will remain constant. LLC . Critics such as Elton Mayo have argued that this method can lead to a decrease in motivation from the employee’s point of view. from the leader to the subordinate.

when offered. Laissez-Faire In a laissez-faire leadership style. rewards based uPOn PerFOrmance A psychological reward is a process that reinforces behavior—something that. job satisfaction and quality of work will improve. This style can be particularly useful when complex decisions need to be made that require a range of specialist skills: for example. behavioral act. Reward is an operational concept for describing the positive value an individual ascribes to an object. The style brings out the best in highly professional and creative groups of employees. the leader therefore evades the duties of management. meaning that it is equal in both directions. however. The communication in this style is horizontal. However. the decision-making process is severely slowed down.82  •  Quality Management: Theory and Application similar disadvantages to an authoritarian style though. the manager allows the employees to take part in decision making. which in turn leads to much dissatisfaction and a poor company image. when a new information and communication technologies (ICT) system needs to be put in place and the upper management of the business is computer illiterate. Democratic In a democratic style. causes a behavior to increase in intensity. therefore. LLC . Primary © 2010 by Taylor and Francis Group. with employees becoming highly dependent on the leader. The communication is extensive in both directions (from subordinates to leaders and vice versa). This leads to a lack of staff focus and sense of direction. very little communication occurs in comparison with other styles. and uncoordinated delegation occurs. or internal physical state. in many cases it is not deliberate and is simply a result of poor management. It can go against a better choice of action. then all employees may become dissatisfied with the leader. the leader’s role is peripheral and staff manages their own areas of the business. From the overall business’ point of view. and the need for a consensus may lead to not taking the “best” decision for the business. If the wrong decisions are made. everything is agreed on by the majority. however.

promotions. for example people with autism or schizoid personality disorder. Rewards induce learning. Generally. For instance. some psychological theories hold that a person’s life is composed largely of attempts to win praise for his or her actions. such as food. © 2010 by Taylor and Francis Group. the aims of such a scheme are as follows: 1. music. Identify employee training needs. approach behavior. disciplinary actions. where the latter is held to mean exclusively negative statements made about something. Most people are responsive to praise and their self-esteem or confidence will increase if a suitable amount of praise is received—in fact. 3. Give feedback on performance to employees in meeting group goals and objectives. LLC . and sex. Other people are less affected by or even averse to praise. and feelings of positive emotions. and the like. 2. 5. thus favoring such behavior.Motivating for Quality  •  83 rewards include those that are necessary for the survival of the species. Praise is often contrasted with criticism. 4. Praise and censure Fairly In its common usage. Provide the opportunity for organizational diagnosis and development. pleasant touch. Form a basis for personnel decisions: salary increases. water. Document criteria used to allocate organizational rewards. although this is not technically correct. or idea. either in public or privately. beautiful faces. altruism may induce a larger psychological reward. Rewards are generally considered more effective than punishment in enforcing positive behavior. Secondary rewards derive their value from the primary rewards and include money. although it doesn’t cause physical or sensory sensations. Performance appraisals A performance appraisal is a regular review of employee performance within organizations. also known as psychological egoism. praise is the act of making positive statements about a person. Some people include shelter as a primary reward. The functions of rewards are based directly on the modification of behavior and less directly on the physical and sensory properties of rewards. and so on. object.

Behavioral Observation Scale (BOS) 3. 7. rather than basing scores on specific behaviors that employees should or should not be engaging in. Behaviorally Anchored Rating Scale (BARS) Trait-based systems. which rely on factors such as integrity and conscientiousness.84  •  Quality Management: Theory and Application 6. For example. are also commonly used by businesses. The scientific literature on the subject provides evidence that assessing employees on factors such as these should be avoided. Facilitate communication between employee and administrator. © 2010 by Taylor and Francis Group. This is caused by the fact that personality dimensions are for the most part static. Trait-based systems. and while an employee can change a specific behavior. 2. causing them to be less reliable as a source of information on an employee’s true performance. Because trait-based systems are by definition based on personality traits. The most popular methods that are being used as performance appraisal processes are as follows: 1. LLC . Management by objectives (MBO) 2. are more easily influenced by office politics. because they are vague. subordinates. The vagueness of these instruments allows managers to fill them out based on who they want to give a raise to. but she still has low integrity and is likely to lie again when the threat of being caught is gone. a person who lacks integrity may stop lying to a manager because she has been caught. Validate selection techniques and human resources policies to meet federal Equal Employment Opportunity requirements. employees receive assessments from their manager. These systems are also more likely to leave a company open to discrimination claims because a manager can make biased decisions without having to back them up with specific behavioral information. In some companies. and customers while also performing a self-assessment. peers. A common approach to assessing performance is to use a numerical or scalar rating system whereby managers are asked to score an individual against a number of group or departmental objectives or attributes. The reasons for this are twofold: 1. he cannot change his personality. or feel should get a raise. they make it difficult for a manager to provide feedback that can cause positive change in employee performance.

people] live(s) by bread alone—when there is no bread. deficiency needs The first four layers of the pyramid are what Maslow called “deficiency needs. but will not permanently regress to the lower level. warmth. needs in the lower level will no longer be prioritized. and other bodily needs. a businessman at the esteem level who is diagnosed with cancer will spend a great deal of time concentrating on his health (physiological needs). Once these are met. while the top level is termed growth needs associated with psychological needs. the individual will temporarily reprioritize those needs by focusing attention on the unfulfilled needs.Motivating for Quality  •  85 PrOvide a mOtivating envirOnment Maslow’s hierarchy of needs is often depicted as a pyramid consisting of five levels: the four lower levels are grouped together as being associated with physiological needs.. but will continue to value his work performance (esteem needs) and will likely return to work during periods of remission. LLC . safety and security. If a person is hungry or thirsty or her body is chemically unbalanced.” © 2010 by Taylor and Francis Group. all of her energies turn toward remedying these deficiencies and other needs remain inactive. Physiological needs These are the basic human needs for such things as food. “Anyone who attempts to make an emergency picture into a typical one and who will measure all of man’s goals and desires by his [or her] behavior during extreme physiological deprivation. Once an individual has moved upward to the next level. The higher needs in this hierarchy only come into focus when the lower needs in the pyramid are satisfied. For instance. the body gives no indication of it physically. water.” or “D-needs”: if they are not met.e. seeking to satisfy growth needs drives personal growth. If a lower set of needs is no longer being met. love and belonging. is certainly blind to many things. Maslow explains. but the individual feels anxious and tense. Deficiency needs must be met first. The deficiency needs are survival needs. It is quite true that man [i. and esteem.

In the world of work. Personal security from crime Financial security Health and well-being Safety net against accidents and illness and the adverse impacts © 2010 by Taylor and Francis Group. the familiar frequent. The obvious exceptions. such people still struggle to satisfy the basic physiological and safety needs. clothing. and discomfort. pain. 4. insurance policies. Physiological needs can control thoughts and behaviors and can cause people to feel sickness. safety needs With their physical needs relatively satisfied. and shelter. These consist mainly of the following (in order of importance): 1. Breathing Drinking Eating Excretion If some needs are not fulfilled. are people outside the mainstream—the poor and the disadvantaged. They are primarily concerned with survival: obtaining adequate food. a person’s physiological needs take the highest priority. and the unfamiliar rare. Safety and security needs include the following: 1. grievance procedures for protecting the individual from unilateral authority.86  •  Quality Management: Theory and Application The physiological needs of the organism (those enabling homeostasis) take first precedence. and the like. of course. and seeking justice from the dominant societal groups. For the most part. 2. physiological and safety needs are reasonably well satisfied in the first world. 2. 4. LLC . people’s safety needs take over and dominate their behavior. savings accounts. 3. these safety needs manifest themselves in such things as a preference for job security. These needs have to do with people’s yearning for a predictable. orderly world in which injustice and inconsistency are under control. If frustration has not led to apathy and weakness. 3.

and depression. to respect themselves. They may seek fame or glory. However. however. respect. and everyone else is inconsequential to one’s own success. and to feel accepted and self-valued. LLC . religious groups. or gangs (“safety in numbers”). the self. whether it comes from a large social group.Motivating for Quality  •  87 social needs After physiological and safety needs are fulfilled. and to respect others. In the absence of these elements. Intimacy 3. but must first accept themselves internally. such as clubs. sports teams. close colleagues. office culture. be it in a profession or hobby. the third layer of human needs is social. This need for belonging can often overcome the physiological and security needs. This psychological aspect of Maslow’s hierarchy involves emotionally based relationships in general. to have self-esteem. many people become susceptible to loneliness. Having a supportive and communicative family Humans need to feel a sense of belonging and acceptance. professional organizations. People with low self-esteem need respect from others. that many people with low self-esteem will not be able to improve their view of themselves simply by receiving fame. © 2010 by Taylor and Francis Group. It may be noted. competence. or small social connections (family members. which again depends on others. and glory externally. mentors. such as the following: 1. esteem needs All humans have a need to be respected. depending on the strength of the peer pressure (e. People need to engage themselves to gain recognition and have an activity or activities that give them a sense of contribution. They need to love and be loved (sexually and nonsexually) by others. Psychological imbalances such as depression can also prevent one from obtaining selfesteem on both levels. confidence. Friendship 2.g. intimate partners. and achievement only need one person. social anxiety.. Imbalances at this level can result in low self-esteem and inferiority complexes. an anorexic ignores the need to eat and the security of health for a feeling of control and belonging). and confidants).

mature human being. he becomes filled with a desire to realize all of his potential for being an effective. toward becoming all that we are capable of becoming. affiliation and affection. Cognitive needs are the expression of people’s natural need to learn. “What a man can be. alienated his closest friends by undertaking reckless military adventures to achieve status as a conqueror. discover. it is stated in the hierarchy that humans need beautiful imagery or something new and aesthetically pleasing to continue up toward self-actualization. security. LLC . the need to create is often a stronger © 2010 by Taylor and Francis Group. creative. For some people. that is. explore. Humans need to refresh themselves in the presence and beauty of nature while carefully absorbing and observing their surroundings to extract the beauty the world has to offer. and create to get a better understanding of the world around them. As these become dormant. (This example can also be used to illustrate the means-to-an-end dilemma of human motivation. • Aesthetic needs: Based on Maslow’s beliefs.” and can be met and neutralized (i. one of his mentors—is the instinctual need of humans to make the most of their abilities and to strive to be the best they can. More will be said about this problem later. and recognition needs have been satisfied.88  •  Quality Management: Theory and Application • Growth needs: Though the deficiency needs may be seen as “basic. Maslow’s need hierarchy is set forth as a general proposition and does not imply that everyone’s needs follow the same rigid pattern. self-respect. That is. they stop being motivators in one’s life). self-actualization and transcendence are “being” or “growth needs” (also termed B-needs). • Cognitive needs: Maslow believed that humans have the need to increase their intelligence and thereby chase knowledge. the final stage of psychological development comes when the individual feels assured that his physiological. for example. Mussolini may have reached for status as a means of gaining the affection of Adolf Hitler. self-esteem seems to be a stronger motivation than love. they are enduring motivations or drivers of behavior. It is working toward fulfilling our potential. Italian dictator Benito Mussolini..e. self-actualization Self-actualization—a concept Maslow attributed to Kurt Goldstein. he must be” is the way Maslow expresses it.) For some people. In Maslow’s scheme.

to achieve their goals. people are influenced by two factors: 1. Achievement II. Physical environment V. A. Job security See Table 5. persons who have suffered hunger or some other deprivation for protracted periods may live happily for the rest of their lives if only they can get enough of what they lacked. Promotion VI. These factors help increase satisfaction but have little effect on dissatisfaction. and sometimes social categories. LLC . also known as the two-factor theory (1959) of job satisfaction. Responsibility V. Company policy and administration III. the level of aspiration may have become permanently lowered and the higher-order. © 2010 by Taylor and Francis Group. Status VII. Similarly. the artist living in poverty is a classic example of reversing the standard hierarchy of needs. safety. Herzberg proposed the motivation-hygiene theory.Motivating for Quality  •  89 motivation than the need for food and safety. Supervision VI. but their presence has little effect on long-term satisfaction. Motivator factors I. Thus. cause dissatisfaction. According to his theory. Growth 2. Satisfaction. less proponent needs may never become active. In this case. if absent or inadequate. Recognition III. Hygiene factors I. Pay and benefits II. There are also cases of people martyring themselves for causes and suffering all kinds of deprivations. particularly in the physiological. These factors. is primarily the result of the motivator factors. A. Relationships with coworkers IV. Dissatisfaction is primarily the result of hygiene factors.1 for a comparison of Maslow’s and Herzberg’s theories. Work itself IV.

employees will form informal objectives that are diametrically opposed to those of the organization. resulting in ever-decreasing levels of output value. When management communicates in only one direction to employees. LLC . and sleep Herzberg Motivation-Hygiene Theory Work itself Achievement Growth Advancement Recognition Status Interpersonal relations – Supervisor – Subordinates – Peers Supervision Company policy and administration Job security Working conditions Salary Personal life Motivational Maintenance summary The motivation process begins with proper leadership. mostly through threats and very few rewards.1 Maslow and Herzberg Comparison Maslow Need Hierarchy Theory Self-actualization – Self-fulfillment – Challenge Esteem (ego) – Recognition – Confidence Social – Acceptance – Belonging – Affection – Participation Safety – Security – Protection Physiological – Food. water. © 2010 by Taylor and Francis Group. and where goals are realistic and there are no hidden agendas. Operator dissatisfaction will be reflected in her work when these needs are not recognized. Management needs to be aware that each individual has different needs depending on her stage in life and should be treated accordingly. Leadership should lead to an appropriate motivating environment which provides consistency in purpose and sincerity.90  •  Quality Management: Theory and Application table 5.

Define different types of leadership and management styles. 7. Describe the differences between Maslow and Herzberg. 4. © 2010 by Taylor and Francis Group. 3.Motivating for Quality  •  91 review QuestiOns 1. LLC . 6. Define performance appraisal and its purpose. What is the purpose of management? Describe leadership. Describe Herzberg’s motivation-hygiene theory. Describe the different levels of Maslow’s hierarchy. 5. 2.

and to government and business. and so on. LLC . Early applications of statistical thinking revolved around the needs of states to base policy on demographic and economic data. which is concerned with the theoretical basis of the subject. and then used to draw inferences about the process or population being studied. from the natural and social sciences to the humanities. and presentation of data. this is called descriptive statistics. Statistical methods can be used to summarize or describe a collection of data. crime statistics.6 Special Topics in Quality Overview OF statistical methOds Statistics is a mathematical science pertaining to the collection. history Some scholars pinpoint the origin of statistics to 1662. patterns in the data may be modeled in a way that accounts for randomness and uncertainty in the observations. The scope of the discipline of statistics broadened in the early nineteenth century to include the collection 93 © 2010 by Taylor and Francis Group. Both descriptive and inferential statistics comprise applied statistics. There is also a discipline called mathematical statistics. It is applicable to a wide variety of academic disciplines. which refers to the result of applying a statistical algorithm to a set of data. interpretation or explanation. as in economic statistics. In addition. this is called inferential statistics. The word statistics is also the plural of statistic (singular). analysis. with the publication of “Observations on the Bills of Mortality” by John Graunt.

accounting for randomness and drawing inferences about the larger population. one begins with a process or population to be studied. two properties of the © 2010 by Taylor and Francis Group. This might be a population of people in a country. For practical reasons. Overview In applying statistics to a scientific. of crystal grains in a rock. but rather a distinct branch of applied mathematics. Probability theory arose from the study of games of chance. Other modeling techniques include analysis of variance (ANOVA). statistics is generally considered not to be a subfield of pure mathematics. time series. or of goods manufactured by a particular factory during a given period. The use of modern computers has expedited large-scale statistical computation. statistics is widely employed in government. These inferences may take the form of answers to yes/no questions (hypothesis testing). and has also made possible new methods that are impractical to perform manually. Inferential statistics is used to model patterns in the data.94  •  Quality Management: Theory and Application and analysis of data in general. The method of least squares was first described by Carl Friedrich Gauss around 1794. either numerically or graphically. which serves two related purposes: description and inference. Its mathematical foundations were laid in the seventeenth century with the development of probability theory by Blaise Pascal and Pierre de Fermat. one usually studies a chosen subset of the population. and the natural and social sciences. rather than compiling data about an entire population. estimates of numerical characteristics (estimation). The data are then subjected to statistical analysis. Data are collected about the sample in an observational or experimental setting. business. called a sample. and data mining. Basic examples of numerical descriptors include the mean and standard deviation. descriptions of association (correlation). Because of its empirical roots and its applications. Graphical summarizations include various kinds of charts and graphs. data collected about this kind of “population” constitute what is called a time series. Descriptive statistics can be used to summarize the data. or modeling of relationships (regression). industrial. It may instead be a process observed at various times. LLC . Today. Statistical analysis of a data set may reveal that two variables (that is. to describe the sample. or societal problem. The concept of correlation is particularly noteworthy.

Mathematical statistics (also called statistical theory) is the branch of applied mathematics that uses probability theory and analysis to examine the theoretical basis of statistics. However. The set of basic statistical skills (and skepticism) needed by people to deal with information in their everyday lives is referred to as statistical literacy. the results can be difficult for the nonexpert to interpret. The fundamental mathematical concept employed in understanding such randomness is probability. as well as methods for designing robust experiments in the first place. medical practice. The correlated phenomena could be caused by a third. If the sample is representative of the population. For example. may not agree with one’s intuitive sense of its significance. one cannot immediately infer the existence of a causal relationship between the two variables. then inferences and conclusions made from the sample can be extended to the population as a whole. as if they are connected. and in particular to draw a conclusion on the effect of changes in the © 2010 by Taylor and Francis Group. A major problem lies in determining the extent to which the chosen sample is representative. and serious in the sense that they may affect. which measures the extent to which the trend could be caused by random variation in the sample. called a lurking variable or confounding variable. Even when statistics is correctly applied. the statistical significance of a trend in the data. and the reliability of structures such as bridges. for instance. Misuse of statistics can produce subtle but serious errors in description and interpretation—subtle in the sense that even experienced professionals sometimes make such errors. LLC . a study of annual income and age of death among people might find that poor people tend to have shorter lives than affluent people.Special Topics in Quality  •  95 population under consideration) tend to vary together. The two variables are said to be correlated (which is a positive correlation in this case). previously unconsidered phenomenon. Statistics offers methods to estimate and correct for randomness in the sample and in the data collection procedure. The use of any statistical method is valid only when the system or population under consideration satisfies the basic mathematical assumptions of the method. social policy. statistical methods Experimental and Observational Studies A common goal for a statistical research project is to investigate causality. For example.

However. In this case.96  •  Quality Management: Theory and Application values of predictors or independent variables on response or dependent variables. and then look for the number of cases of lung cancer in each group. The researchers were interested in determining whether increased illumination would increase the productivity of the assembly line workers. This type of study typically uses a survey to collect observations about the area of interest. the researchers would collect observations of both smokers and nonsmokers. An example of an observational study is a study which explores the correlation between smoking and lung cancer. concentrating on the system model and the interaction of independent and dependent variables © 2010 by Taylor and Francis Group. including determining information sources. which attempted to test the changes to the working environment at the Hawthorne plant of the Western Electric Company. and then taking additional measurements using the same procedure to determine if the manipulation has modified the values of the measurements. specifically for the lack of a control group and blindedness. An experimental study involves taking measurements of the system under study. research subject selection. then modified the illumination in an area of the plant and checked if the changes in illumination affected the productivity. an observational study does not involve experimental manipulation. LLC . and ethical considerations for the proposed research and method • Designing experiments. An example of an experimental study is the famous Hawthorne studies. manipulating the system. The basic steps of an experiment are as follows: • Planning the research. Each can be very effective. The difference between the two types lies in how the study is actually conducted. In both types of studies. In contrast. perhaps through a case-control study. and then performs statistical analysis of the observational data. data are gathered and correlations between predictors and response are investigated. There are two major types of causal statistical studies. the study is heavily criticized today for errors in experimental procedures. the effects of differences of an independent variable (or variables) on the behavior of the dependent variable are observed. It turned out that the productivity indeed improved (under the experimental conditions). experimental studies and observational studies. Instead. The researchers first measured the productivity in the plant.

variations in the process that may affect the quality of the end product or service can be detected and corrected. Control charts enable the use of objective criteria for distinguishing background variation from events of significance based on statistical techniques. Ratio measurements have both a zero value and the distances between different measurements defined. or measurement scales used in statistics: nominal. With its emphasis on early detection and prevention of problems. thus reducing waste as well as the likelihood that problems will be passed on to the customer. interval. sometimes they are referred to as categorical variables. but have a meaningful order to those values. SPC can lead to a reduction in the time required to produce the product or provide the service from end to end. They have different degrees of usefulness in statistical research. Statistical process control (SPC) is an effective method of monitoring a process through the use of control charts. ordinal. SPC has a distinct advantage over quality methods such as inspection. Since variables conforming only to nominal or ordinal measurements cannot be reasonably measured numerically. levels of measurement. Nominal measurements have no meaningful rank order among values. LLC . and ratio. Interval measurements have meaningful distances between measurements defined. that apply resources to detecting and correcting problems in the end product or service. they provide the greatest flexibility in statistical methods that can be used for analyzing the data. whereas ratio and interval measurements are grouped together as quantitative or continuous variables due to their numerical nature. In addition to reducing waste. © 2010 by Taylor and Francis Group. By collecting data from samples at various points within the process. but have no meaningful zero value (as in the case with IQ measurements or with temperature measurements in Fahrenheit). Ordinal measurements have imprecise differences between consecutive values. Much of SPC’s power lies in the ability to monitor both the process center and its variation about that center.Special Topics in Quality  •  97 • Summarizing a collection of observations to feature their commonality by suppressing details (descriptive statistics) • Reaching consensus about what the observations tell about the world being observed (statistical inference) • Documenting and presenting the results of the study Levels of Measurement There are four types of measurements.

98  •  Quality Management: Theory and Application table 6.1 Statistical Formulas Statistic continuous statistics Mean Range Variance Formula Used for The center of a set of data The dispersion of data around the center 2 µ= ∑x n r = x max − x min σ 2 ∑(µ − x ) = n −1 n −1 1 σ 2π The dispersion of data around the center Standard Deviation σ= Normal Distribution 2 ∑(µ − n ) The dispersion of data around the center f ( x) = z= z= •e 1  µ− x  −   2 σ  2 Used to perform estimations Standard Normal Value µ− x σ µ1 − µ 2 σ n Used to determine normalcy Hypothesis Test of Means Used to determine differences © 2010 by Taylor and Francis Group. LLC .

t Test ( x1 − x 2 ) − (µ1 − µ2 ) t= 1 1 s2  +  p  n1 n2  where Used to determine differences s2 = p (n1 − 1) s12 − (n2 − 1) s22 n1 + n2 − 2 df = n1 + n2 − 2 Regression r= ∑ n  ∑( x )  − ∑ y − ∑( y )   x −    ∑ n n 2 2 2 2 (∑ x )(∑ y ) xy −     Used to determine differences Special Topics in Quality  •  99   Confidence Limits   Used to determine differences µ±z or σ n σ n where n ≥ 30. LLC . µ±t where n < 30 Continued © 2010 by Taylor and Francis Group.

100  •  Quality Management: Theory and Application table 6. (continued) Statistical Formulas Statistic discrete statistics Proportion Formula Used for Used to determine percentage nonconforming ∑r p= ∑x µ= n! n−r pr q( ) r !( n − r ) ! λ x e −λ x! µ= Binomial Distribution Used to determine average percentage nonconforming Used to determine average percentage nonconforming Used in statistical sampling Poisson Distribution Hypergeometric Distribution N C D Cn − D µ = d N−d Cn where n = sample size. D = number of failures. N = lot size. and d = probability of a failure Hypothesis Test p = p0 µ= p0 (1 − p0 ) n ˆ p − p0 Used to determine differences © 2010 by Taylor and Francis Group.1. LLC .

Hypothesis Test p1 − p2 = 0 µ= ) ) ( p − p )− 0 ) ) 1 1 p (1 − p )  +  n n  1 2 1 2 Used to determine differences where n × p and n 1− p are at least 5 Chi-Square Distribution ) ( ) ) x = 2 ∑ (Oi − Ei ) 2 Ei R1 • Ci n Used to analyze survey data Confidence Limits Where Ei = n ) ) where np and n 1− p are at least 5 µ=z ) ˆ p 1− p ( ) ( ) Used to determine differences Special Topics in Quality  •  101 © 2010 by Taylor and Francis Group. LLC .

Shewhart concluded that while every process displays variation. W. thereby successfully improving quality in the manufacture of munitions and other strategically important products. history of sPc Statistical process control was pioneered by Walter A. general The following description relates to manufacturing rather than to the service industry. Edwards Deming later applied SPC methods in the United States during World War II. he understood that data from physical processes seldom produce a normal distribution curve (a Gaussian distribution. also commonly referred to as a bell curve). some processes display controlled variation that is natural to the process (common causes of variation). Shewhart in the early 1920s. Process cycle time reductions coupled with improvements in yield have made SPC a valuable tool from both a cost reduction and a customer satisfaction standpoint. the quality of the finished article was traditionally achieved through postmanufacturing inspection of the product. although the principles of SPC can be successfully applied to either. LLC . Shewhart drew from pure mathematical statistical theories. wait times. Shewhart created the basis for the control chart and the concept of a state of statistical control by carefully designed experiments. with social network change detection introduced by McCulloh (2007). He discovered that observed variation in manufacturing data did not always behave the same way as with data in nature (for example. and other sources of delays within the process.102  •  Quality Management: Theory and Application This is partially due to a diminished likelihood that the final product will have to be reworked. but it may also result from using SPC data to identify bottlenecks. Deming was also instrumental in introducing SPC methods to Japanese industry after the war had ended. accepting or rejecting each article (or samples from a production lot) based © 2010 by Taylor and Francis Group. Dr. SPC has also been successfully applied to detecting changes in organizational behavior. In mass manufacturing. Brownian motion of particles). While Dr. while others display uncontrolled variation that is not present in the process causal system at all times (special causes of variation).

1 0. a breakfast cereal–packaging line may be designed to fill each cereal box with 500 grams of product.Special Topics in Quality  •  103 on how well it met its design specifications.15 0. more and more product will be produced that falls outside the tolerances of the manufacturer or consumer. If this change is allowed to continue unchecked. For example. in accordance with a distribution of net weights. typically waste consists of rework or scrap. If the production process. as its cams and pulleys wear out.25 0. In contrast. While in this case. and the distribution forms the bell-shaped normal distribution curve (see Figure 6. 0. © 2010 by Taylor and Francis Group.26% Series 1 95. both these process variations cause subsequent variations in the final product: The first are known as natural or common causes of variation and may be variations in temperature. and so on.05 0 1 2 3 4 5 –3s 6 7 –2s 8 9 10 11 –1s X 12 13 14 15 16 17 1s 2s 3s 18 19 20 21 68.46% 99. The second kind is known as special causes. specifications of raw materials or electrical current.1). or its environment changes (for example.3 0.2 0. These variations are small. and some will have slightly less. but some boxes will have slightly more than 500 grams. resulting in waste. this distribution can change. LLC . The pattern of variation will be similar to those found in nature.1 Normal curve. and are generally near to the average value. For example. the cereal-filling machine may start putting more cereal into each box than specified. Two kinds of variations occur in all manufacturing processes. and happens less frequently than the first.73% Figure 6. its inputs. the waste is in the form of “free” product for the consumer. the machines doing the manufacture begin to wear). SPC uses statistical tools to observe the performance of the production process in order to predict significant deviations that may later result in rejected product.

483 k1 4.729 0.004 B4 3.128 1.268 2.2 Statistical Methods Applied to Operations Statistic attribute control charts P Chart Formula Used For Process. = average of sample standard deviations.534 By observing at the right time what happened in the process that led to a change.104  •  Quality Management: Theory and Application table 6.05 2. A2 .266 2. the quality engineer or any member of the team responsible for the production line can troubleshoot the root cause of the variation that has crept into the process and correct the problem.023 0.56 3. and R = average of sample ranges.568 2. D4 = constants. B4 .577 0.059 2. © 2010 by Taylor and Francis Group.693 2. LLC .50 k2 3.282 2.970 A2 1.65 2.30 d2 1.3 SPC Constants N 2 3 4 5 6 D4 3.267 2.70 2.089 1.326 2. table 6. X = average of samples averages.860 1. tracking proportion nonconforming Process: tracking nonconformities Process: tracking multiple nonconformities per unit Process: tracking multiple nonconformities per sample Product: tracking product consistency and accuracy Product: tracking product consistency and accuracy Product: tracking product consistency and accuracy Product: tracking product consistency and accuracy CL = p ± 3 C Chart Np Chart U Chart p (1 − p ) n v v CL = c ± 3 c CL = np ± 3 np (1 − p ) u CL = u ± 3 n CL = X ± A2 R CL = D4 R CL = X ± A 3 S CL = B4 S variable control charts X Chart R Chart X s Chart S Chart Where n = sample size.574 2.115 2.

© 2010 by Taylor and Francis Group. n = number of parts. 000. and k1. LLC . and d2 = constants. 000 n Product design versus process Lower Capability Product design versus process Sigma Estimation Part per Million Repeatability and Reproducibility ) σ= R Product design versus process Process Measurement analysis Special Topics in Quality  •  105 PPM = R& R = (R×k ) + 2 1 (X diff × k2 ) ( 2  R×k 1 −   σc = ) 2   (n × r )   ( R & R)  % R & R = 100  (US − LS )   ( σ a )2 + ( σ b )2 Where US = upper specification. Re = number of nonconformities.4 Quality-Engineering Formulas Name Process Capability Equation Used For Product design versus process Cp = US − LS 6σ Upper Capability US − X Cpu = ) 3σ CpL = X − LS ) 3σ d2 Re ×1.table 6. r = number of trials. k2. LS = lower specification.

5 Statistical Sampling Plan Lot Size From To Acceptable Nonconformance Levels and Sample Sizes 2.000 35 29 15 35.200 23 18 13 3.000 40 29 15 500. This type of action could be harmful and possibly generate even more variation in body weight. SPC indicates when an action should be taken in a process. The term cindynics (from the Greek kindunos. An example is a person who would like to maintain a constant body weight and takes weight measurements weekly.000 29 22 15 10.201 10.001 35. SPC would account for normal weight variation and better indicate when the person is in fact gaining or losing weight.001 >500.201 3.5% 4.5% 10% 2 2 2 3 4 5 6 7 8 9 9 9 9 9 9 2 8 5 3 2 9 15 5 3 2 16 25 5 3 3 26 50 5 5 5 51 90 7 6 5 91 150 11 7 6 151 280 13 10 7 281 500 16 11 9 501 1. A person who does not understand SPC concepts might start dieting every time his or her weight increased.000 40 29 15 150. This term is used in France.0% 6. but has not been widely © 2010 by Taylor and Francis Group. risk analysis Risk analysis is the science of risks and their probability and evaluation. but it also indicates when no action should be taken.200 19 15 11 1.106  •  Quality Management: Theory and Application table 6.001 500.001 150.001 40 29 15 Reject on one nonconformity and accept on zero nonconformities. or eat more every time his or her weight decreased. “danger”) has been proposed for this field. LLC .

Special Topics in Quality  •  107 adopted in the English-speaking world. Probabilistic risk assessment is the analysis strategy usually employed in science and engineering. risk analysis and the risk workshop As part of the risk management process, risk analysis for each project should be performed. The data from this would be based on risk discussion workshops to identify potential issues and risks ahead of time before these were to pose negative cost and/or schedule impacts (see the article on cost contingency for a discussion of the estimation of cost impacts). The risk workshops should be chaired by a small group, ideally between 6 and 10 individuals from the various departmental functions (e.g., project manager, construction manager, site superintendent, and representatives from operations, procurement, [project] controls, etc.) so as to cover every risk element from different perspectives. The outcome of the risk analysis would be the creation and review of the risk register to identify and quantify risk elements to the project and their potential impact. Given that risk management is a continuous and iterative process, the risk workshop members would regroup at regular intervals and project milestones to review the risk register mitigation plans, make changes to it as appropriate, and, following those changes, rerun the risk model. By constantly monitoring risks, they can successfully mitigate them, resulting in a cost and schedule savings with a positive impact on the project. Probabilistic risk assessment (PRA) (or probabilistic safety assessment or analysis) is a systematic and comprehensive methodology to evaluate risks associated with a complex engineered technological entity (such as airliners or nuclear power plants). Risk in a PRA is defined as a feasible detrimental outcome of an activity or action. In a PRA, risk is characterized by two quantities: The magnitude (severity) of the possible adverse consequence(s) The likelihood (probability) of occurrence of each consequence Consequences are expressed numerically (e.g., the number of people potentially hurt or killed), and their likelihoods of occurrence are expressed as probabilities or frequencies (i.e., the number of occurrences

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108  •  Quality Management: Theory and Application or the probability of occurrence per unit time). The total risk is the sum of the products of the consequences multiplied by their probabilities. The spectrums of risks across classes of events are also of concern, and are usually controlled in licensing processes (it would be of concern if rare but high-consequence events were found to dominate the overall risk). Probabilistic risk assessment usually answers three basic questions: What can go wrong with the studied technological entity, or what are the initiators or initiating events (undesirable starting events) that lead to adverse consequence(s)? What and how severe are the potential detriments or the adverse consequences that the technological entity may be eventually subjected to as a result of the occurrence of the initiator? How likely to occur are these undesirable consequences, or what are their probabilities or frequencies? Two common methods of answering this last question are event tree analysis and fault tree analysis—for explanations of these, see safety engineering. In addition to the above methods, PRA studies require special but often very important analysis tools like human reliability analysis (HRA) and common cause or failure (CCF) analysis. HRA deals with methods for modeling human error, while CCF analysis deals with methods for evaluating the effect of intersystem and intrasystem dependencies which tend to cause simultaneous failures and thus significant increases in overall risk. PRA studies have been successfully performed for complex technological systems at all phases of the life cycle from concept definition and predesign through safe removal from operation. For example, the Nuclear Regulatory Commission (NRC) required that each nuclear power plant in the United States perform an individual plant examination (IPE) to identify and quantify plant vulnerabilities to hardware failures and human faults in design and operation. Although no method was specified for performing such an evaluation, the NRC requires risk analysis (Business). Risk analysis is a technique to identify and assess factors that may jeopardize the success of a project or the achievement of a goal. This technique also helps to define preventive measures to reduce the probability of these factors from occurring, as well as identify countermeasures to successfully

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Special Topics in Quality  •  109 deal with these constraints when they develop to avert possible negative effects on the competitiveness of the company. One of the more popular methods to perform a risk analysis in the computer field is called the facilitated risk analysis process (FRAP). Facilitated risk analysis Process FRAP analyzes one system, application, or segment of business processes at a time. Practitioners of FRAP believe that additional efforts to develop precisely quantified risks are not cost-effective because such estimates are time-consuming; risk documentation becomes too voluminous for practical use; and specific loss estimates are generally not needed to determine if controls are needed. After identifying and categorizing risks, the FRAP team identifies the controls that could mitigate the risk. The decision for what controls are needed lies with the business manager. The team’s conclusions as to what risks exist and what controls are needed are documented, along with a related action plan for control implementation. Three of the most important risks a software company faces are unexpected changes in (1) revenue, (2) costs from those budgeted, and (3) the amount of specialization of the software planned. Risks that affect revenues can be unanticipated competition, privacy, intellectual property rights problems, and unit sales that are less than forecasted; unexpected development costs also create risk that can be in the form of more rework than anticipated, security holes, and privacy invasions. Narrow specialization of software with a large amount of research and development expenditures can lead to both business and technological risks, since specialization does not lead to lower unit costs of software (Messerschmidt and Szyperski 2004). Combined with the decrease in the potential customer base, specialization risk can be significant for a software firm. After probabilities of scenarios have been calculated with risk analysis, the process of risk management can be applied to help manage the risk. Methods like applied information economics add to and improve on risk analysis methods by introducing procedures to adjust subjective

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the causes of failures. LLC . except that the likelihood for failures to occur varies over time according to the given probability function. However. but the system as a whole does not do what was intended. this is taken to mean operation without failure. In practical terms. reliability engineering reliability theory Reliability theory is the foundation of reliability engineering. The system requirements specification is the criterion against which reliability is measured. Reliability engineering is concerned with four key elements of this definition: First.110  •  Quality Management: Theory and Application probabilities. Third. reliability is defined as the probability that a device will perform its intended function during a specified period of time under stated conditions. this means that a system has a specified chance that it will operate © 2010 by Taylor and Francis Group. This means that failure is regarded as a random phenomenon: it is a recurring event. and t is the length of the period (which is assumed to start from time zero). Second. Mathematically. For engineering purposes. this may be expressed as R(t ) = ∫ ∞ t f ( x ) dx where f ( x ) is the failure probability density function. then the failure is still charged against the system reliability. reliability is predicated on “intended function”: generally. and we do not express any information on individual failures. and use the results in part of a larger portfolio management problem. or relationships between failures. compute the value of additional information. even if no individual part of the system fails. reliability is a probability. Reliability engineering is concerned with meeting the specified probability of success. at a specified statistical confidence level. reliability applies to a specified period of time.

Reliability engineering ensures that components and materials will meet the requirements during the specified time. methods.Special Topics in Quality  •  111 without failure before a specified time. reliability Program Plan Many tasks. Every system requires a different level of reliability. and contract statements. test plans. and tests are required for a particular system. © 2010 by Taylor and Francis Group. This constraint is necessary because it is impossible to design a system for unlimited conditions. or a piece of mechanical equipment may have a reliability rating value in terms of cycles of use. For complex systems. Reliability requirements are included in the appropriate system and subsystem requirement specifications. analyses. reliability requirements For any system. and associated tasks and documentation. but it has a much different set of operational conditions. and tools can be used to achieve reliability. the reliability program plan is a separate document. Reliability requirements address the system itself. insignificant consequences of failure. The reliability program plan is essential for a successful reliability program and is developed early during system development. Fourth. The operating environment must be addressed during design and testing. tools. one of the first tasks of reliability engineering is to adequately specify the reliability requirements. It specifies not only what the reliability engineer does. the military might specify reliability of a gun for a certain number of rounds fired. but there is a correspondingly higher budget. Units other than time may sometimes be used: the automotive industry might specify reliability in terms of miles. A Mars Rover will have different specified conditions than the family car. it may be combined with the systems engineering management plan. reliability is restricted to operation under stated conditions. test and assessment requirements. A pencil sharpener may be more reliable than an airliner. The consequences of failure are grave. and a much lower budget. but also the tasks performed by others. methods. A commercial airliner must operate under a wide range of conditions. LLC . For simple systems. The reliability program plan is approved by top program management. A reliability program plan is used to document exactly what tasks.

© 2010 by Taylor and Francis Group. and the parts stress modeling approach is an empirical method for prediction based on counting the number and type of components of the system. For such systems. This PFD is derived from failure rate and mission time for nonrepairable systems. such as crack propagation or chemical corrosion. reliability modeling Reliability modeling is the process of predicting or understanding the reliability of a component or system. For example. and electronic equipment. For repairable systems. and missiles. The most common reliability parameter is mean time between failure (MTBF). These are devices or systems that remain relatively dormant and operate only once. reliability parameters are specified with appropriate statistical confidence intervals. Two separate fields of investigation are common: the physics of failure approach uses an understanding of the failure mechanisms involved. and the stress they undergo during operation. Examples include automobile airbags. such as most vehicles. A special case of mission success is the single-shot device or system. reliability of a scheduled aircraft flight can be specified as a dimensionless probability or a percentage. it is obtained from failure rate and mean time to recovery (MTTR) and test interval. Single-shot missile reliability may be incorporated into a requirement for the probability of hit. This measure may not be unique for a given system. In addition to system-level requirements. the probability of failure on demand (PFD) is the reliability measure. which can also be specified as the failure rate or the number of failures during a given period. thermal batteries. In all cases. In other cases. as the measure depends on the kind of demand. but can also be used with other units of measurement such as miles or cycles. or is subsumed into a related parameter. Reliability increases as the MTBF increases. The MTBF is usually specified in hours. machinery. LLC . reliability requirements may be specified for critical subsystems. Single-shot reliability is specified as a probability of success. reliability is specified as the probability of mission success. These parameters are very useful for systems that are operated on a regular basis.112  •  Quality Management: Theory and Application System Reliability Parameters Requirements are specified using reliability parameters.

Several degrees of stress have to be applied to determine an acceleration model.. reliability test requirements Because reliability is a probability. Due to the insufficient sample size. Therefore. the chi-square distribution can be used to find the goodness of fit for the estimated failure rate. This is done in general in an accelerated experiment with increased stress. At any rate. or the sample size is so low that not a single failure occurs.g. These experiments can be divided into two main categories. only moderate stress is necessary. in general. stress time. The stress is applied for a limited period of time in what is called a censored test. Early failure rate studies determine the distribution with a decreasing failure rate over the first part of the bathtub curve.. the empirical distribution function of these failure times can be determined. It is a general praxis to model the early failure rate with an exponential distribution. even highly reliable systems have some chance of failure. Some tests are simply impractical. only the part of the distribution with early failures can be determined. Reliability engineering © 2010 by Taylor and Francis Group. Compared to a model with a decreasing failure rate. and the sample size is much smaller. However.g. or MLE). higher stresses are necessary to achieve failure in a reasonable period of time. which is often a material property. A single test is insufficient to generate enough statistical data. it looks good for the customer if there are no failures. This less complex model for the failure distribution has only one parameter: the constant failure rate. this becomes even more pessimistic. only limited information about the failure distribution is acquired. The empirical failure distribution is often parameterized with a Weibull or a log-normal model. Multiple tests or long-duration tests are usually very expensive. LLC . the shape parameter of a Weibull distribution) or its confidence interval (e.Special Topics in Quality  •  113 For systems with a clearly defined failure time (which is sometimes not given for systems with a drifting parameter). only an upper limit of the early failure rate can be determined. Combined with a zero-defect experiment. by a maximum likelihood approach. this is quite pessimistic. Here the stress. The effort is greatly reduced in this case: one does not have to determine a second model parameter (e. In a study of the intrinsic failure distribution. In so-called zero-defect experiments. Here. testing reliability requirements is problematic for several reasons. In such cases.

18. requirements for reliability tasks Reliability engineering must also address requirements for various reliability tasks and documentation during system development. Statistical confidence levels are used to address some of these concerns. The combination of reliability parameter value and confidence level greatly affects the development cost and the risk to both the customer and producer.114  •  Quality Management: Theory and Application is used to design a realistic and affordable test program that provides enough evidence that the system meets its requirements. the reliability engineer can design a test with explicit criteria for the number of hours and number of failures until the requirement is met or failed. Care is needed to select the best combination of requirements. Reliability tasks include various © 2010 by Taylor and Francis Group. From this specification. an MTBF of 1. and system levels. These requirements are generally specified in the contract statement of work and depend on how much leeway the customer wishes to provide to the contractor. and operation. reliability engineering may be used to design an accelerated life test. such as the component. A certain parameter is expressed along with a corresponding confidence level: for example. vibration. shock. Reliability engineering determines an effective test strategy so that all parts are exercised in relevant environments. Reliability testing may be performed at various levels. subsystem. For systems that must last many years. LLC . many factors must be addressed during testing. Also.000 hours at a 90 percent confidence level. such as extreme temperature and humidity. testing. and heat. production. Actual mean time between failures is calculated as follows: MTBF = ∑units × ∑hours (60% failure rate) ∑ Failures (− t MTBF ) System survivability is calculated as follows: Rs = e where –t is the operational hours of concern and e = 2.

This process encompasses several tools and practices. and failure reporting. However. the first step in the DFR process is to set the system’s reliability requirements. Another design technique. the physics of failure. This means that if one part of the system fails. A critical system may require a formal failure-reporting and failure review process throughout development. Fault tree diagrams One of the most important design techniques is redundancy. redundancy is difficult and expensive. Redundancy significantly increases system reliability. Reliability must be “designed into” the system. Reliability design begins with the development of a model. Typically. The material © 2010 by Taylor and Francis Group. If one bulb fails. Air Force 1986) and IEEE 1332 (Institute of Electrical and Electronics Engineers 1998).Special Topics in Quality  •  115 analyses. LLC . An automobile brake light might use two light bulbs. Task selection depends on the criticality of the system as well as cost. the top-level reliability requirements are then allocated to subsystems by design and reliability engineers working together. such as a backup system. The most common reliability program tasks are documented in reliability program standards.S. and describes the order of their deployment that an organization needs to have in place in order to drive reliability into their products. During system design. Reliability models use block diagrams and fault trees to provide a graphical means of evaluating the relationships between different parts of the system. such as MIL-STD-785 (U. planning. whereas a noncritical system may rely on final test reports. relies on understanding the physical processes of stress. and failure at a very detailed level. they are valuable to assess relative differences in design alternatives. design for reliability Design for reliability (DFR) is an emerging discipline that refers to the process of designing reliability into products. there is an alternate success path. strength. These models incorporate predictions based on parts-count failure rates taken from historical data. and is therefore limited to critical parts of the system. and is often the only viable means of doing so. While the predictions are often not accurate in an absolute sense. the brake light still operates using the other bulb.

such as with piece parts or small assemblies.) For example. subsystem. performing environmental stress–screening tests at lower levels. reliability testing A Reliability Sequential Test Plan The purpose of reliability testing is to discover potential problems with the design as early as possible and. techniques. circuit board. as by using a heavier gauge wire that exceeds the normal specification for the expected electrical current. Another common design technique is component derating: selecting components whose tolerance significantly exceeds the expected stress. Engineering trade studies are used to determine the optimum balance between reliability and other requirements and constraints. Complex systems may be tested at the component. and analyses are specific to particular industries and applications. LLC . catches © 2010 by Taylor and Francis Group. and system levels. Reliability testing may be performed at several levels.116  •  Quality Management: Theory and Application or component can then be redesigned to reduce the probability of failure. Many tasks. assembly. (The test-level nomenclature varies among applications. Commonly these include the following: Built-in test (BIT) Failure mode and effects analysis (FMEA) Reliability simulation modeling Thermal analysis Reliability block diagram analysis Fault tree analysis Sneak circuit analysis Accelerated testing Reliability growth analysis Weibull analysis Electromagnetic analysis Statistical interference Results are presented during the system design reviews and logistics reviews. unit. provide confidence that the system meets its reliability requirements. ultimately. Reliability is just one requirement among many system requirements.

Some systems are prohibitively expensive to test. The scoring conference process is defined in the statement of work. the developer. In such cases. Reliability test plans are designed to achieve the specified reliability at the specified confidence level with the minimum number of test units and test time. A key aspect of reliability testing is to define failure. Variations in test conditions. Although this may seem obvious. Good test requirements ensure that the customer and developer agree in advance on how reliability requirements will be tested. The drawbacks to such extensive testing are time and expense. As part of the requirements phase. the reliability engineer develops a test strategy with the customer. developmental testing. and some tests require the use of limited test ranges or other resources. and simulations. Each test case is considered by the group and “scored” as a success or failure. analysis. Customers may choose to accept more risk by eliminating some or all lower levels of testing. operator differences. LLC . The desired level of statistical confidence also plays an important role in reliability testing. It is not always feasible to test all system requirements. The test strategy makes trade-offs between the needs of the reliability organization. and unexpected situations create differences between the customer and the system developer. weather. Reliability growth techniques and failure-reporting. One strategy to address this issue is to use a scoring conference process. and risk levels for each side influence the ultimate test plan. and the reliability organization. The desired reliability. Different test plans result in different levels of risk to the producer and consumer. such as accelerated life testing. Testing proceeds during each level of integration through full-up system testing. the design of experiments. statistical confidence. some failure modes may take years to observe. there are many situations where it is not clear whether a failure is really the fault of the system. © 2010 by Taylor and Francis Group. thereby reducing program risk. some complex interactions result in a huge number of possible test cases. System reliability is calculated at each test level. This scoring is the official result used by the reliability engineer. and corrective action systems (FRACAS) are often employed to improve reliability as testing progresses. A scoring conference includes representatives from the customer. and sometimes independent observers. the test organization.Special Topics in Quality  •  117 problems before they cause failures at higher levels. which wants as much data as possible. different approaches to testing can be used. and operational testing. Statistical confidence is increased by increasing either the test time or the number of items tested.

118  •  Quality Management: Theory and Application and constraints such as cost. and results are documented in official reports. software. the product is expected to fail in the lab just as it would have failed in the field—but in much less time. Determine the level of stress(es). reliability engineering focuses on critical hardware parts of the system. Common ways to determine a life stress relationship are the following: Arrhenius model Eyring model Inverse power law model Temperature-humidity model Temperature nonthermal model software reliability Software reliability is a special aspect of reliability engineering. accelerated testing The purpose of accelerated life testing is to induce field failure in the laboratory at a much faster rate by providing a harsher. schedule. System reliability. The main objective of an accelerated test is either of the following: To discover failure modes To predict the normal field life from the high-stress lab life Accelerated testing needs planning as follows: Define the objective and scope of the test. Identify the stress(es). includes all parts of the system. Collect required information about the product. including hardware. Conduct the accelerated test. by definition. In such a test. and available resources. software © 2010 by Taylor and Francis Group. Since the widespread use of digital integrated circuit technology. LLC . Test plans and procedures are developed for each reliability test. but nonetheless representative. Traditionally. operators. environment. and analyze the accelerated data. and procedures.

peer reviews. This metric. However. is key to most software reliability models and estimates. There is more overlap between software quality engineering and software reliability engineering than between hardware quality and reliability. however. along with software execution time. A good software development plan is a key aspect of the software reliability program. Denney 2005). describing what we experience with software: the longer you run software. Restoring software to its original state only works until the same combination of inputs and states results in the same unintended result. software unreliability is the result of unanticipated results of software operations. design. however. unit tests. their severity. because of the way software faults are distributed in the code. and © 2010 by Taylor and Francis Group. As with hardware.Special Topics in Quality  •  119 has become an increasingly critical part of most electronics and. hence. LLC . Even relatively small software programs can have astronomically large combinations of inputs and states that are infeasible to exhaustively test. The theory is that the software reliability increases as the number of faults (or fault density) goes down. Despite this difference in the source of failure between software and hardware—software doesn’t wear out—some in the software reliability–engineering community believe statistical models used in hardware reliability are nevertheless useful as a measure of software reliability. Establishing a direct connection between fault density and MTBF is difficult. the higher the probability you’ll eventually use it in an untested manner and find a latent defect that results in a failure (Shooman 1987. There are significant differences. Software reliability engineering must take this into account. Repairing or replacing the hardware component restores the system to its original unfailed state. A common reliability metric is the number of software faults. in how software and hardware behave. nearly all present-day systems. and implementation. software metrics. and software models to be used during software development. The software development plan describes the design and coding standards. Software reliability engineering relies heavily on a disciplined software-engineering process to anticipate and design against unintended consequences. configuration management. usually expressed as faults per thousand lines of code. software does not fail in the same sense that hardware fails. Instead. Musa 2005. Most hardware unreliability is the result of a component or material failure that results in the system not performing its intended function. software reliability depends on good requirements.

Even the best software development process results in some software faults that are nearly undetectable until tested. and corrects deficiencies. Unlike with hardware. corrected. reliability engineering during the system operation phase monitors. For systems in dormant storage or on standby. Reliability estimates are updated based on the fault density and other metrics. the software is integrated with the hardware in the top-level system. are also used. Data collection is highly dependent on the nature of the system. software faults are discovered. fault density serves as a useful indicator for the reliability engineer. The data are constantly analyzed using statistical techniques. it is inadvisable to skip levels of software testing. to ensure the system reliability meets the specification. such as Weibull analysis and linear regression. Most large organizations have quality control groups that collect failure data on vehicles. it is necessary to establish a formal surveillance program to inspect and test random samples. LLC . and machinery. through integration and full-up system testing. reliability Operational assessment After a system is produced. Consumer product failures are often tracked by the number of returns. software reliability uses different metrics such as test coverage. When possible. As with hardware. Eventually. At the system level. system failures and corrective actions are reported to the reliability engineering organization. Instead. and retested. equipment. and software reliability is subsumed by system reliability. Reliability data and estimates are also key inputs for system logistics. Testing is even more important for software than hardware. Any changes © 2010 by Taylor and Francis Group. MTBF data are collected and used to estimate reliability.120  •  Quality Management: Theory and Application the probability of the combination of inputs necessary to encounter the fault. Other software metrics. software is tested at several levels. performing the exact same test on the exact same software configuration does not provide increased statistical confidence. During all phases of testing. The Software Engineering Institute’s capability maturity model is a common means of assessing the overall software development process for reliability and quality purposes. Nevertheless. starting with individual units. Data collection and analysis are the primary tools used. assesses. Unlike with hardware. such as complexity.

noncritical systems. product safety. the organization is structured to work as part of an integrated product team. Because reliability engineering is critical to early system design. There are several common types of reliability organizations. which may include reliability. and so on. design evaluation. however. is not unduly slighted due to budget and schedule pressures.Special Topics in Quality  •  121 to the system. a company may wish to establish an independent reliability organization. but is actually employed and paid by a separate organization within the company. The project manager or chief engineer may employ one or more reliability engineers directly. reliability testing. The reliability-engineering organization must be consistent with the company’s organizational structure. the need arises for a formal reliability function. In larger organizations. there is usually a product assurance or specialty-engineering organization. As complexity grows. the reliability engineer works on the project on a day-to-day basis. reliability Organizations Systems of any significant complexity are developed by organizations of people. or CRE. experience. collecting and using data. testing of which is often expensive and time-consuming. logistics. the customer may even specify certain aspects of the reliability organization. This is desirable to ensure that the system reliability. Certification The American Society for Quality (ASQ) has a program to become a certified reliability engineer. safety. such as field upgrades or recall repairs. LLC . such as a commercial company or a government agency. In some cases. statistical tools. maintainability. quality. and a certification test. the reliability engineer reports to the product assurance manager or specialty-engineering manager. In such case. Certification is based on education. © 2010 by Taylor and Francis Group. it has become common for reliability engineers. Because reliability is important to the customer. require additional reliability testing to ensure the reliability of the modification. human factors. and so on. In such cases. modeling. The body of knowledge for the test includes reliability management. design and development. reliability engineering may be informal. periodic recertification is required. For small.

single output (MISO) Multiple inputs. and some universities have entire reliabilityengineering programs. it is a subject often studied by electrical engineers because it has direct relevance to many other areas of their discipline.. the University of Maryland). a system has one or more input signals and one or more output signals. the ASQ. Although many of the methods of system analysis can be applied to nonelectrical systems. Therefore. which can be in any field of engineering. Many engineering programs offer reliability courses. Several professional organizations exist for reliability engineers. and the Society of Reliability Engineers (SRE). we can regard a SIMO system as multiple SISO © 2010 by Taylor and Francis Group. Therefore. characterization of systems A system is characterized by how it responds to input signals. Reliability engineers typically have an engineering degree. single output (SISO) Single input. but this is not required by most employers. multiple outputs (SIMO) Multiple inputs. most notably signal processing and communication systems. In general. A reliability engineer may be registered as a professional engineer by the state.g. multiple outputs (MIMO) It is often useful (or necessary) to break up a system into smaller pieces for analysis.122  •  Quality Management: Theory and Application reliability engineering education Some universities offer graduate degrees in reliability engineering (e. There are many professional conferences and industry training programs available for reliability engineers. systems analysis System analysis is the branch of electrical engineering that characterizes electrical systems and their properties. including the IEEE Reliability Society. one natural characterization of systems is by how many inputs and outputs they have: Single input. LLC . from an accredited university or college program.

as well as the necessary analog-to-digital or digital-to-analog converter. While important mathematically. By far. a system can then be characterized as to which type of signals it deals with: • A system that has analog input and analog output is known as an analog system. although many parts inside SISO systems have multiple inputs (such as adders). and the same applies for a MIMO system. it is usually easiest to break up these systems into their analog and digital parts for analysis. • Signals that are discrete in time and discrete in value are known as digital signals. • Signals that are continuous in time and discrete in value are sometimes seen in the timing analysis of logic circuits. Signals can be continuous or discrete in time. the greatest amount of work in system analysis has been with SISO systems. Systems with analog input and digital output or digital input and analog output are possible. • Signals that are discrete in time and continuous in value are called discrete time signals. Memoryless systems do not depend on any past input. Another way to characterize systems is by whether their output at any given time depends only on the input at that time. With this categorization of signals. Noncausal or anticipatory systems do depend on future input.Special Topics in Quality  •  123 systems (one for each output). Causal systems do not depend on any future input. However. LLC . The methods developed for analyzing discrete time signals and systems are usually applied to digital and analog signals and systems. • A system that has digital input and digital output is known as a digital system. systems that process discrete time signals are difficult to physically realize. © 2010 by Taylor and Francis Group. but have little to no use in system analysis. Systems with memory do depend on past input. or perhaps on the input at some time in the past (or in the future!). as well as continuous or discrete in the values they take at any given time: • Signals that are continuous in time and continuous in value are known as analog signals.

First. Linearity implies that operation of a system can be scaled to arbitrarily large magnitudes. such as values of the input or output at various times in the past. the system is distributed. the system is said to be time-invariant. systems may be characterized by certain properties which facilitate their analysis: A system is linear if it has superposition and scaling properties. it is time-variant. which is not possible. in the case of analog systems. none of these properties are ever perfectly achieved. otherwise. LLC . Analog systems with memory may be further classified as lumped or distributed. There are many methods of analysis developed specifically for linear time-invariant (LTI) deterministic systems. If the output of a system does not depend explicitly on time. A system that will produce different outputs for a given input is said to be stochastic. the ideal system for a given application is often a noncausal system. can give insight into the design of a derivated causal system to accomplish a similar purpose. Finally. Thermal noise and other random phenomena ensure that the operation of any analog system will have some degree of stochastic behavior. however. it is usually reasonable to assume that deviations from these ideals will be small. Despite these limitations. If the number of state variables necessary to describe future output is finite.” However. from the standpoint of analysis. The difference can be explained by considering the meaning of memory in a system. Second. A system that is not linear is nonlinear. © 2010 by Taylor and Francis Group. A system that will always produce the same output for a given input is said to be deterministic. which although not physically possible. the system is lumped. Time-invariance is violated by aging effects that can change the outputs of analog systems over time (usually years or even decades). these systems are important for two reasons. if it is infinite. Unfortunately. Future output of a system with memory depends on future input and a number of state variables. there are instances when a system does not operate in “real time” but rather is simulated “offline” by a computer.124  •  Quality Management: Theory and Application Note: It is not possible to physically realize a noncausal system operating in “real time.

A lumped LTI system is specified by a finite number of parameters. or the coefficients of its differential equation. Quality audits are typically performed at predefined time intervals and ensure that the institution has clearly defined internal quality-monitoring procedures linked to effective action. With the upgrade of the ISO 9000 series of standards from the 1994 to 2000 series. A third way to specify an LTI system is by its characteristic linear differential equation (for analog systems) or linear difference equation (for digital systems).S. Code of Federal Regulations. part 820). the focus of the audits has shifted from purely procedural adherence toward measurement of the actual effectiveness of the quality management system (QMS) and the results that have been achieved through the implementation of a QMS. This is due to their simplicity of specification. LLC . One example is the U. there are many methods of analysis developed specifically for LTI systems. Food and Drug Administration. Alternatively. © 2010 by Taylor and Francis Group. which requires quality auditing to be performed as part of its Quality System Regulation (QSR) for medical devices (Title 21 of the U. whereas specification of a distributed LTI system requires a complete function. we can think of an LTI system as being completely specified by its frequency response. The distinction between lumped and distributed LTI systems is important. It is an important part of an organization’s quality management system and is a key element in the ISO quality system standard.Special Topics in Quality  •  125 lti systems As mentioned above.S. Quality audits can be an integral part of compliance for regulatory requirements. Which description is most useful depends on the application. ISO 9001. This can help determine if the organization complies with the defined quality system processes and can involve procedural or results-based assessment criteria. An LTI system is completely specified by its transfer function (which is a rational function for digital and lumped analog LTI systems). auditing Quality audit is the process of systematic examination of a quality system carried out by an internal or external quality auditor or an audit team. be it the zeros and poles of its transfer function.

Sweden. Audits can also be used for safety purposes. Norway. Audit Initiation Audits are initiated by the client either by request or through approval of a program of audits submitted by the auditing department or group. Initiated in the UK. Audit Objective Audits determine compliance or noncompliance with established standards and assess the effectiveness of such standards. and facilitate communication. review performances and results. Australia. audit Planning and scheduling Auditor Education and Training An auditor must possess and maintain sufficient basic education and training in order to perform audits in a professional manner. LLC . © 2010 by Taylor and Francis Group. Audit Scope The scope of audits depends on the need as determined by the client and/ or auditing organization.126  •  Quality Management: Theory and Application Several countries have adopted quality audits in their higher education system (New Zealand. The secondary objective of a quality audit can be to determine opportunities and needs for improvements in the operation and control systems. and the United States).” especially when the auditing focuses not just on compliance but also on effectiveness. In most cases. The audit must be assigned to and be accepted by a qualified auditor. Finland. The intent of an audit is that the auditor obtains sufficient evidence to draw conclusions relative to the stated audit objective. Evans and Parker (2008) describe auditing as one of the most powerful safety-monitoring techniques and “an effective way to avoid complacency and highlight slowly deteriorating conditions. the process of quality audit in the education system focused primarily on procedural issues rather than on the results or the efficiency of a quality system implementation. the scope of the quality system is defined in the top-level quality manual.

3 Indentification and traceablity 7.3 Monitoring and measurement of processes 8.1 Production provision 7.4.2.Special Topics in Quality  •  127 Plan.2 Quality planning 5.5.1 Quality objectives 5.3.3 Control of documents 4.1 Responsibility and authority 5.6 Calibration 8.4 Purchasing 7.3 Quality focus 5.5. © 2010 by Taylor and Francis Group. Preventative action cOmments & ObservatiOns Figure 6.6 Management review 6.2.5.2.Customer property 7.1 Management commitment 5. Audit plan Element 4.4 Monitoring and measurement of product 8.5.5.22 Quality manual 4.2.2 Customer related process 7.2 2.4 Analysis of data 8.3 Design and development 7. and results 1. Schedule Auditor(s) Date(s) Next Assigned Audited Audit 3.2.4.3 Infrastructure 7.5 Preservation of product 7.5.2 Customer focus 5. LLC . Report (Result) Conformed? N/A yes No AR Audit plan and report.1 Customer satisfaction 8.2.2 Internal audit 8. schedule.2 Validation of process 7.4 Control of records 5.5.4.5.3 Internal communications 5.2.2 Competence awareness and training 6.

validity. The timing should be chosen with due regard to availability of evidential material. © 2010 by Taylor and Francis Group. by standards. by the audit program. Long-term planning provides a framework for an annual audit program. Pre-audit reviews are to verify the existence of a system or individual documented procedure that can be audited. The planning should be conducted by the auditor. Audit elements assigned to the individual auditors should be coordinated and integrated in the audit plan.4). and the expected duration and timing of each audit element. Long-Term Planning This is usually carried out by the audit department or group. and reliability of the observation being made (see Figure 6. Pre-Audit Review of System Audits should be planned and carried out only where a quality system is established. or program. sufficiency of the audit resources. The individual audit assignments in the program must be further planned in detail. result Sampling Plans Sampling plans are used in the audit to ensure applicability. The resulting plan or program (see Figure 6. unbiased observations. should include the name of the organizational unit. Working Papers These are all of the documents required for an effective and orderly execution of the audit plan (see Figure 6. LLC .128  •  Quality Management: Theory and Application Frequency and Timing Audit frequency may be determined by law or regulation. or lead auditor with the assistance of the auditors assigned to the team.3). The plan. or by the need of the client. and least cost. adequate cooperation and support from the auditee.2) should be approved by the client. the object of the audit.

implement. These processes shall be managed by the organization in accordance with the requirements of this International Standard. Note: Process needed for the quality mangement system referred to above should include processes for management activities. d) Ensure the availibility of resources and information necessary to support the operation and monitoring of these processes. When an organization chooses to outsource any process that affects product conformity with requirements. c) Determine criteria and methods needed to ensure that both the operation and control of these processes are effective. The organization shall a) Identify the processes needed for the quality management system and their application throughout organization (see 12). f) Implement actions necessary to achieve planned results and continual improvement of these processes. document. Control of such outsource processes shall be identified within the quality management system. Figure 6. b) Determine the sequence and interaction of these processes. measure and analyze these processes. © 2010 by Taylor and Francis Group. General requirements The organization shall establish.3 Audit working paper. e) Monitor. the organization shall ensure control over such processes.Special Topics in Quality  •  129 AUDITOR DATE: Comments Activity Rating Quality management system 4. LLC . and maintain a quality management system and continually improve its effectiveness in accordance with the requirements of this International Standard.1.

001 500. and finding the correct sample size under the appropriate AQL. LOT SIZE FROM 2 9 16 26 51 91 151 281 501 1.201 10.000 35.000 >500. Audit Implementation Steps The audit plan should be implemented through the following steps: Notification to the auditee Orientation of auditors and auditee Examination Follow-up and close-out Reporting of results (management review) © 2010 by Taylor and Francis Group.001 35.200 3.130  •  Quality Management: Theory and Application C=0 SAMPLING PLAN This table is read starting at the left-hand column.4 AQLs/SAMPLE SIZES TO 8 15 25 50 90 150 280 500 2.2 5 5 5 5 7 11 13 16 19 23 29 35 40 40 40 4 3 3 3 5 6 7 10 11 15 18 22 29 29 29 29 6.000 150.200 10. The lot is rejected if one non-conformance is found. LLC .000 500.001 C = 0 sampling plan.001 Figure 6. reading down and to the right.001 150.5 2 2 3 5 5 6 7 9 11 13 15 15 15 15 15 10 2 2 2 3 4 5 6 7 8 9 9 9 9 9 9 1.201 3.

A brief meeting with the management of the organization to be audited serves for clarification of the audit plan. Information. Verification. Audit Observations Audit observations are significant conclusions and results of the examination. LLC . and finalization of procedures and meetings. introduction of the auditors. and Evaluation The auditor must obtain sufficient. Opening Meeting The audit team should meet when final preparation and decisions need to be made. Quality Auditing Determine Objective Determine Report Associated Records Validate Report Interview for Requirements Figure 6.5).5 Audit steps: Any process. The audit plan should be forwarded with the notification. © 2010 by Taylor and Francis Group. relevant information and evidence that permit a valid and reliable verification and evaluation (see Figure 6.Special Topics in Quality  •  131 Notification to Auditee Advance notification allows the auditee to make final preparations for the audit.

dates. and organization audited Standards used Observations and evidence Noteworthy comments and recommendations Follow-up corrective actions reporting the audit Review and Distribution Management of the auditing organization should review and approve the report prior to submitting it to the client. a meeting should be held by the auditor or lead auditor with the auditee’s senior management. Audit Follow-Up Follow-up consists of verification of corrective action resulting from observations. © 2010 by Taylor and Francis Group. so that the auditee can initiate necessary corrective action effectively without delay. Content of the Report The audit report should include the following: Purpose. and scope of the audit Details of the audit plan. auditors. The main purpose of the meeting is to present and clarify all audit observations to be reported. Preparation of the Report Standards for the form and content of the report should be established and followed.132  •  Quality Management: Theory and Application Audit Supervision At the conclusion of the audit and prior to preparing the audit report. LLC . The client decides on the distribution of copies of the report. along with supporting evidence. objective.

Costs are measured in units of nominal currency by convention. rather than external users. or cost-volume-profit analysis Classical cost elements are as follows: Raw materials Labor Allocated overhead © 2010 by Taylor and Francis Group. result in a product) into financial values. except in special circumstances when verification of corrective action is explicitly included in the audit assignment and plan. recording. As a form of management accounting. cOst OF Quality In management accounting. and analyzing costs associated with the products or activities of an organization. or audit organization is responsible for custody and retention of audit documents and records. and what to compute is instead decided pragmatically.Special Topics in Quality  •  133 Audit Completion An audit assignment is completed upon submission of the audit report to the client. There are at least four approaches: Standardized cost accounting Activity-based costing Throughput accounting Marginal costing. cost accounting is the process of tracking. Cost accounting can be viewed as translating the supply chain (the series of events in the production process that. cost accounting need not follow standards such as generally accepted accounting principles (GAAP). lead auditor. Managers use cost accounting to support decision making to reduce a company’s costs and improve its profitability. Record Retention The auditor. LLC . because its primary use is for internal managers. in concert.

000 $50. In the early industrial age. Modern cost accounting originated during the Industrial Revolution.000 $25. most of the costs incurred by a business were what modern accountants call variable costs because they varied directly with the amount of production. and so on.000 $132.000 $561.000 $3.000 $25. when the complexities of running a large-scale business led to the development of systems for recording and tracking costs to help business owners and managers make decisions. Managers could simply total the variable costs for a product and use this as a rough guide for decision-making processes. in direct proportion to production. Money was spent on labor.000 $34.000 $300.276 $70. power to run a factory. the importance of these “fixed costs” has become more important to managers.000 $395.000 $25.000 $20.299 $2. Over time. Some costs tend to remain the same even during busy periods. unlike variable costs. raw materials.134  •  Quality Management: Theory and Application table 6. © 2010 by Taylor and Francis Group. which rise and fall with volume of work.6 Cost-of-Quality Statement Cost Failure costs Raw material nonconformance Repairs Scrap Returns Rework appraisal costs Product audits Receiving inspection In-process inspection Final inspection Prevention costs Design reviews Quality assurance total $9. LLC .575 $32.575 Subtotal Origins Cost accounting has long been used to help managers understand the costs of running a business.

and engineering. Feigenbaum in a 1956 Harvard Business Review article. plant supervision. storage and handling. Furthermore. in the twenty-first century. in-process inspection. these costs were of little importance to most businesses. However. Managers must understand fixed costs in order to make decisions about products and pricing.6) is a means to quantify the total cost of quality-related efforts and deficiencies. LLC . management and quality managers can evaluate investments in quality based on cost improvement and profit enhancement. and changes in shareholder equity. expenses. and finishedgoods inventory prior to shipping to the customer. purchasing. while cost accounting had evolved to categorize financial transactions into revenues. or by hiring more labor. The concept of quality costs (see Table 6. tooling.Special Topics in Quality  •  135 Examples of fixed costs include the depreciation of plant and equipment. the general perception was that higher quality requires higher costs. Examples would be the following: Warranty charges Service time and material allowances Returned material costs © 2010 by Taylor and Francis Group. and the cost of departments such as maintenance. Prior to its introduction. production control. Examples would be the following: Scrap Rework Supplier scrap or rework Sorting Retest and reinspection Regrading External failure costs: These are costs associated with nonconformities that are found by the customer. it had not attempted to categorize costs relevant to quality. In the early twentieth century. quality control. and allocating them to a broad range of products can lead to bad decision making. It was first described by Armand V. Internal failure costs: These are costs associated with nonconformities that are found during receiving. these costs are often more important than the variable cost of a product. By classifying quality-related entries from a company’s general ledger. either by buying better materials or machines.

Examples would be as follows: Product audits Receiving inspection In-process inspection Final inspection Calibration Prevention costs: These are the costs associated with activities associated with preventing nonconformities from occurring. LLC . Examples would be as follows: Planning Reviews Management controls Organizing Internal audits Supplier audits Training © 2010 by Taylor and Francis Group.136  •  Quality Management: Theory and Application Appraisal costs: These are the costs associated with product verification and validation.

Tracking Objective and Goals 5. Department Primary Alternate 4.Appendix A: Business Quality Plan Organization 1. Responsibility 2. Categories and Classifications 3. Goal or Objective 137 © 2010 by Taylor and Francis Group. LLC .

Document Inspection receiving (input) Process (wiP) Final (Output) Frequency Operation 6. Sensor Storage Sample Delay 139 © 2010 by Taylor and Francis Group. Methods 9. Possible Causes 7.Appendix B: Process Quality Plan General Information No. Flowchart Transportation 2. Possible Problems 5. LLC . Phase: Classification (Process): Design Review Production Primary: Contact Name: Date: Phone: Department: Tracking: 1. Reaction Plan 8. Requirement (Product or Process) 4. Process Step Description Alternate: Goal: 3.

In the event of a nonconformity. Record the results of the inspection on the appropriate inspection report or log. or Inspected Tolerance (±) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Inspection or Measuring Equipment or Method Number: Page: of AQL Comments 141 © 2010 by Taylor and Francis Group.Appendix C: Product Quality Plan Inspection Plan For: Effective Date: Supersedes: Approved By: Instructions: Inspect the product with regard to the characteristics listed below (also see inspection and test work instructions). follow work instruction. Characteristics to Be Measured Specification and No. Use a C = 0 sampling plan with an AQL of 10 unless otherwise specified below. LLC .

LLC .142  •  Quality Management: Theory and Application 21 22 23 24 25 26 28 29 © 2010 by Taylor and Francis Group.

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