1.

Introduction

Managing quality is crucial for every business. Quality products and services help to
maintain customer satisfaction and loyalty and reduce the risk and cost of replacing faulty
goods. Most businesses operate in competitive markets. Quality is a crucial parameter
which differentiates an organization from its competitors. Businesses are successful only
when they emphasize on quality rather than quantity.

The objective of this report is to examine the Product and Process Quality concepts
discussed under the course. This report will initially provide overview of Quality
Management. Next it will examine how the Quality concepts are used in manufacturing
and service industries to optimize their profits. Afterwards, my own understanding and
thoughts on the topic will be discussed.

2. Quality

The meaning of the quality differs depending on the circumstances and the perception.
For an instance, it differs when focusing on the product and process separately. The
meaning of quality is also time based or situational. (What is Quality, n.d.)Some
common meanings of quality are as follows:

Quality is fitness for use

Quality is meeting customer expectation

Quality is exceeding the customer expectations

Quality is superiority to competitors

Quality itself has been defined as fundamentally relational: "Quality is the on-going
process of building and sustaining relationships by assessing, anticipating, and fulfilling
stated and implied needs." (Organizational Orienteering, n.d.)

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 3. Quality Characteristics

Table 1: Product Quality Characteristics

For Products
Performance Serviceability Reliable
Reasonable Price Ease of Use Maintainability
Durability Simplicity of Design Aesthetics
Available Safe Ease of Disposal

Source : http://www.bexcellence.org/What-Is-Quality.html

Table 2: Service Quality Characteristics

For Service
Responsiveness Credibility Available
Reliable Safe Security
Understand the
Competence Accuracy
Customer
Completeness Timeliness Communication

Source : http://www.bexcellence.org/What-Is-Quality.html

4. Different Perspectives of Quality

The pressure of quality thinking has broaden to non-traditional implications of

manufacturing, widen into service sectors and into areas such as sales, marketing and
customer service. As per Professor David Garvin, there are six major perspectives on
quality which are described as follows.

4.1. Judgmental or Transcendent Perspective

The judgmental perspective is also known as transcendent perspective and philosophical

perspective. According to Shewhart, this perspective of quality is absolute and globally
recognizes an uncompromising point of standards and high achievement. Judgmental

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perspective is the basis from which all other perspectives of quality are derived. It is
easily estimated by looking at the product and there is no subjective judgment needed.

4.2. User-based Perspective

In user- based approach quality is elaborated as fitness for planned utilization. People
have different needs, desires and wants thus distinguish quality values. In user-based
approach of quality, the quality of a product is identified by the satisfaction of human
needs and wants. Deming emphasizes on the user-based approach by saying that a
product is never completely be considered as qualified until it fulfill both the concealed
and external wants.

The user-based perspective doesn't discard the manufacturing quality as a strategic

objective but offer framework for it. It is most popular with people in the field of
marketing which believe that quality exists in the mind of observer or the user of the
product rather than the manufacturer who set standards for the product.

4.3. Value-based Perspective

This perspective of quality place the quality of a product in the line of competing
products but try to sold the product at lesser price. Value-based perspective identifies the
relationship between the product quality and the product cost. Simply, a product is
classified as a high value product when it exhibits a high level of compliance and low
production cost. This approach also studies that lower cost will always demand for higher
consumption.

4.4. Manufacturing-based Perspective

This approach to quality defines in a way that is the expected effect of a manufacturing
and engineering practices otherwise compliance to specification. In simple words
engineering specification of products are vital. Garvin proposed that the manufacturing-
based approach of quality have relevance to a product's amount of obedience to design
and manufacturing specifications. Managers try to ensure the desire specification of
product quality by reducing and stabilizing variations. Shewhart emphasizes on the
manufacturing process that it can be studied through statistical data which can improve

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the control of quality. Such improvements will lead to less scrap, fewer defects and
eventually low cost.

4.5. Product-based Perspective

It is the combination of a precise, quantifiable variable and those distinctions in quality is

imitating variance in magnitude of several product characteristics.

Product-based perspective of quality actually suits engineers because mostly they are the
one concern with translating product necessities into physical dimension that can be
produced. Garvin (1988) states that if there will be any difference in the quality, it will
automatically affect the quantity of an attribute the product possess.

4.6. Social-loss or Customer based Perspective

This is the alternative perspective of quality which was developed by Taguchi. It suggest
that quality is a great loss to society by the product after being transported and other loss
causes by its built-in functions. The effects of losses are either the harmful side effects of
the product or the inconsistency in product functions. It primarily looks at a product in as
external perspective.

5. Drivers of Quality

Quality is function that needs the support of everyone related to the organization. As it is
said , Quality is not a destination. It is a Journey. In an organization, there should be a
proper definition to the quality of the outcome and the quality parameters can be defined
in many ways. Below mentioned are the main drivers of the quality.

5.1. Customers

In a customer-driven organization, quality is established with a focus on satisfying or

exceeding the requirements, expectations, needs, and preferences of customers.
Customer-driven quality is a common culture within many organizations.

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 5.2. Products / Services

A culture of product / service-driven quality was popular in the early stages of quality
improvement. Conformance to requirements and zero defect concepts have roots in
producing a product / service that meets stated or documented requirements.
In some cases, product / service requirements originate from customer requirements,
thereby creating a common link to customer-driven quality, but the focus of the culture is
on the quality of the product/ service.

If the customer requirements is accurately stated and designed into the production /
service delivery process, then as long as the product / service meet the requirements, the
customer should be satisfied. This approach is common in supporting the ISO 9001-based
quality management system.

5.3. Employee Satisfaction

This concept is that an organization takes care of employees needs so that they can be
free to worry only about the customer. Employee satisfaction is a primary measure of
success for this type of organization.

5.4. Organizational Focus

Some organizations tend to focus on total organizational quality while others are quite
successful at using a segmented approach to implementing quality.

6. Quality Gap

There can be many causes of gaps in the quality of a product or service. Understanding
the source of the problem is a big step on the way to closing the gap.

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Figure 1: Quality Gap Model

Source : http://www.open.ac.uk/cpdtasters/gb011/page3.htm

6.1. Gap 1 (The Knowledge Gap)

Gap between consumer expectation and management perception: arises when the
management or service provider does not correctly perceive what the customer wants or
needs. It is when customer wants or desires are incorrectly perceived by management.
The knowledge gap can be closed by learning customer expectations. It can be done
through researches, complaint analysis and customer panels. Upward communication
should be improved via direct interaction between managers and customers.

6.2. Gap 2 (The Policy Gap)

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Gap between management perception and service quality specification: arises when
management incorrectly translates the service polices of the company into guidelines for
employees, this falls into the policy gap. Some examples are a poor service design or an
ambiguous service design. Establishing right service quality standards can help in
minimizing the policy gap. Top management commitment is essential to reinforce
customer oriented service standards.

6.3. Gap 3 (The Delivery Gap)

Gap between service quality specification and service delivery: may arise pertaining to
the service personnel. This could arise due to there being poor training, incapability or
unwillingness to meet the set service standard. Delivery gap can be minimized by
ensuring that the service performance meets standards. It can be achieved via attracting
and selecting best employees and developing and supporting employees.

6.4. Gap 4 (The Customer Gap)

Gap between service delivery and external communication: consumer expectations are
highly influenced by statements made by company representatives and advertisements.
Some factors contributing to this one include insufficient marketing research and not
focusing on demand quality. Should ensure that the service delivery matches promises in
order to minimize or close the gap. Improving the communication between sales,
operations and customers will help on this.

6.5. Gap 5 (The Communication Gap)

Gap between expected service and experienced service: this gap arises when the
consumer misinterprets the service quality. There should be a proper communication in
order to minimize this gap. Consistent standards should be ensured in multi-site
operations. Advertising should be managed in a way which, it focuses on the service
characteristics that are important to customers.

7. Cost of Quality

Any cost that would not have been expended if quality were perfect is a cost of quality.
Quality costs are a measure of the costs specifically associated with the achievement or
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non-achievement of product or service quality. It is a methodology that allows an
organization to determine the extent to which its resources are used for activities that
prevent poor quality.

As defined by Philip B. Crosby in his book Quality Is Free, the cost of quality has two
main components: the cost of good quality (or the cost of conformance) and the cost of
poor quality (or the cost of non-conformance).

Figure 2: Cost of Quality

Cost of Quality

Cost of Poor Cost of Good

Quality Quality

Internal Failure
Appraisal Costs
Costs

External Failure
Prevention Costs
Costs

Source: Author

The cost of poor quality affects the internal and external costs resulting from failing to
meet requirements, while the cost of good quality affects the costs for investing in the
prevention of non-conformance to requirements and appraising a product or service for
conformance to requirements.

7.1. Internal Failure Costs

When the results of work fail to reach design quality standards, the cost incurred to
discover that defect before the product or service transferred to the customer is known as
internal failure costs. These internal costs are detected through the firm's inspection and
appraisal activities. Some of the Internal Failure Costs are,

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 Waste Holding of a stock as a result of errors, poor organization or
communication, performing unnecessary work

Scrap Defective product or material that cannot be repaired, used or sold.

Rework or Rectification Corrective actions on defective material or error

Failure Analysis Establishing the causes of internal product or service failure

7.2. External Failure Costs

Costs that are incurred when a product or service that is defective is delivered to a
customer are known as external failure costs. These costs include lost opportunities for
sales revenue. External failure costs include warranty, repairs and replacements, product
recalls, liability arising from legal actions against a company, and lost sales arising from a
reputation for poor quality. Such costs can decimate profits.

Repairs and servicing Both returned and those in the field

Warranty Claims Failed products that are replaced or services that are reformed
under a guarantee

Complaints Handling and servicing customer complaints

Returns Handling and investigation of rejected or recalled products

7.3. Prevention Costs

Cost of Prevention focuses on the actions taken to prevent the creation of defects.
Companies that pursue operation excellence track these costs and purposely allocate
money to this element. These companies spend more on prevention methods than the
other quality cost elements. Generally this is the most effective way to manage quality to
avoid having defects in the first place.

Product and service requirements Establishment of specifications for incoming

materials, processes, finished products and services

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 Quality Planning Creation of plans for quality, reliability, operations, production
and inspection

Quality Assurance Creation and maintenance of the quality system

Training Development, preparation and maintenance of the programs

7.4. Appraisal Costs

Appraisal costs are incurred to identify defective products before the products are shipped
to customers. These costs must be incurred in order to keep defective goods from being
sold to customers. Associated with suppliers and customers evaluation of purchased
materials, processes, products and services to ensure that they confirm the specifications.

Verification Checking of incoming materials, process setup and products against

agreed specifications

Quality Audis Confirming that the quality system id functioning correctly

Supplier Rating Assessment and approval of suppliers of products and services

8. Implementation of Quality

Successful organizations have figured out that customer satisfaction has a direct impact
on the bottom line. Quality has a great impact on customer satisfaction. Creating an
environment which supports a quality culture requires a structured, systematic process.

Total Quality Management (TQM) is a management approach to long-term success

through customer satisfaction. TQM focuses on the development of products and
services that meet the needs and exceed the expectations of key customer groups, the use
of quality concepts in manufacturing and service industries to optimize profits.

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 8.1. Evolution of Total Quality Management

Figure 3 : Evolution of total quality management

Quality Quality
Monitoring Assurance
Standards Process Management
Internally Organizational
Variation Based Oriented Motivated Culture Driven

Quality Quality Total Quality

Control Improvement Management

Source: Author

8.2.1. Quality Control

Quality control involves setting standards about how much variation is acceptable. The
aim is to ensure that a product is manufactured, or a service is provided, to meet the
specifications which ensure customer needs are met. At its simplest, quality control is
achieved through inspection.

8.1.1. Quality Assurance

Quality assurance involves defining activities and management processes that are done to
ensure that the products and services the project delivers are at the required quality level.
It is process driven and focused on the development of the product or delivery of the
service. Achieved through planning and implementing systematic processes.

8.1.2. Quality Improvement

Actions taken throughout the organization to increase the effectiveness of activities and
processes to provide added benefits to both the organization and its customers are known
as Quality Improvement. It is a process of changing standards. Quality Improvement is
achieved through a process of selection, analysis, corrective action on the standard or
process, education and training.

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 8.1.3. Quality Management

Quality Management is the management activities and functions involved in

determination of quality policy and its implementation. It is the act of overseeing all
activities and tasks needed to maintain a desired level of excellence.

8.1.4. Total Quality Management

A management philosophy that enables organizations to gain customer loyalty. It

integrates all organizational functions (marketing, finance, design, engineering, and
production, customer service, etc.) to focus on meeting customer needs and organizational
objectives.

8.2. Five Pillars of TQM

Figure 4: Five Pillars of TQM

Management Continous
Customer Focus Quality Costs Quality Systems
Commitment Improvement

Source: Author

An establishment that practices the principles of TQM delivers high levels of service and
high quality products at reasonable prices. It is an approach that involves all employees
across all departments and extends to suppliers and clients as well. Having an all-
encompassing approach, there are five main pillars which TQM is built on namely
Management Commitment, Customer Focus, Quality Costs, Quality Systems and
Continuous Improvement.

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Management Commitment helps an organization to gain higher productivity via
continuous improvement practices. Leaders involvement in the Plan, Do, Check and Act
cycle will help to strengthen the competitive image of the organization. With a direct
drive and support, organization will be able to adapt to changes and emerging market
conditions and have a better cost management. With the increased customer loyalty
because of the improved customer focus will help to gain business efficiency and
effectiveness through customer satisfaction.

8.3. Implementing TQM

1. Top Management Learns about and decides to be committed to TQM. It is identified

as one of the organizations strategies.

2. The organization assesses current culture, customer satisfaction and quality

management systems.

3. Identify core values and principles to be used

4. A TQM master plan is developed

5. Identifies and prioritize customer demands and aligns products and services to meet
those demands.

6. Maps the critical processes through which the organization meets its customer needs.

7. Oversees the formation of team for process improvement efforts.

8. Have a steering committee.

9. Managers contribute individually.

10. Daily process management and standardization

11. Progress is evaluated and plan is revised as needed.

12. Constant employee awareness and feedback on status.

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 8.4. TQM Tools

TQM tools help organizations to identify, analysis and assess qualitative and quantitative
data that is relevant to their businesses. These tools can identify procedures, ideas,
statistics, cause and effect concerns and other related issues.

Table 3: TQM Tools

Tool Use

Pie Chart and Bar Graph Identify and compare data units

Histogram Illustrate and examine various data elements

Run Chart Identify trends, shifts and patterns

Pareto Chart/ Analysis Grouping of qualitative data

Force Field Analysis Identify driving and restraining forces

Cause and Effect Diagram Illustrate multiple levels of potential causes

Focus Group Provide impartial feedback

Brainstorming and Affinity Diagram Identify various aspects surrounding an issue

Tree Diagram Identify various tasks involved in

Flow Chart Identify workflows

Scatter Diagram Discover Cause and effect Relationship

Relationship Diagram Understand relationship between entities

Source : Author

9. Quality in Manufacturing Industry

Because of the globalization and rapid advances in technology, todays manufacturing

environment is increasingly competitive. Manufacturers need to stay focused on finding
new ways to design, produce, sell and deliver products. Look for information targeted to
medical devices, food safety, pharma, aerospace, lean and supplier quality.

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In manufacturing, quality is an important component of all functions. For example,
effective market research is necessary to determine customer needs and identify
functional requirements for product designers. Purchasing must ensure that suppliers meet
quality requirements. Production planning and scheduling should not put undue pressure
on manufacturing that will degrade quality. Tool engineering and maintenance are
responsible for ensuring that tools, gages, and equipment are properly maintained.
Industrial engineering must select the appropriate technology that is capable of meeting
design requirements and developing appropriate work methods. Packaging, shipping, and
warehousing have the responsibility of ensuring the condition, availability, and timely
delivery of products in transit. Related functions such as finance, human resources, and
legal services support the quality effort by providing realistic budgets, a well-trained and
motivated workforce, and reviews of warranty, safety, and liability issues.

10. Quality in Service Industry

Many service organizations such as airlines, banks, and hotels have well developed
quality assurance systems. Most of them, however, are generally based on manufacturing
analogies and tend to be more product-oriented than service-oriented. For example, a
typical hotel's quality assurance system is focused on technical specifications such as
properly made-up rooms. However, service organizations have special requirements that
manufacturing systems cannot fulfill. Service organizations must look beyond product
orientation and pay significant attention to customer transactions and employee behavior.
The Ritz-Carlton Hotel Company, a 1992 winner of the Baldrige Award, pays
extraordinary attention to customers and employees.

The quality characteristics that should be controlled may not be the obvious ones.
Customer perceptions are critical, and it may be difficult to define what the customer
wants. Marketing and consumer research can play a significant role. The quality of
interaction is a vital factor in every service transaction that involves human contact. Top
management has the responsibility for shaping and guiding the image that the firm
projects. Setting service levels and measuring them may be difficult. Service standards,
particularly those relating to human behavior, are often set judgmentally and are difficult
to measure. In manufacturing, it is easy to measure output, scrap, and rework. Customer
attitudes and employee competence are not as easily measured. Quality control activity
may be required at times or in places where supervision and control personnel are not
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present. Work must often be performed at the convenience of the customer. Hence, more
training of employees and self-management are necessary.

11. Quality Management in Software Industry

In todays world, software has become an integral part of life. Hence quality has become
something crucial in software since inferior software can cause really big problems even
death.

Humans are prone to errors. Time pressure, complexity, technology etc. all these factors
(and many more) expose us to mistakes which eventually distract us and produce
bugs and eventually fail the product. Bugs (Fault, defect) itself will not cause failures but
if executed will do. Human beings are not the only cause for the failures of the products.
Environmental conditions such as pollution, radiation etc. will be a cause by changing the
H/W conditions.

Since both the causes and the outcome (Quality) is something that is unavoidable in
software, testing also becomes something unavoidable. Testing is something that has to be
maintained throughout the software development life cycle, from the requirement
gathering to maintenance. Testing will give the stakeholders an idea about the
proceedings of the product and a level of confidence. Learning is a kind of main objective
of testing. Improving quality through preventing reoccurring defects is a main aspect of
quality assurance. While maintaining quality we should make sure that the product meets
customer expectations. Otherwise our primary goal, Customer satisfaction through a
quality product will not be served.

When thinking of software quality, there are three main aspects which we have to stay
focus on. These three factors are considered as solid because one can be rarely changed
without impacting the others.

11.1. TSR Model

Figure 5: TSR Model

Cost

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 Scope Time

Source : Author

TSR model depicts the key attributes that must be handled effectively for successful
completion and closure of any project.

Scope=TimeResources

Project scope defines the completeness of the product. Scope creep is one of the main
risks of quality. It is where additional requirements are introduced after product execution
has begun. It affects both time and cost and ultimately product quality. Hence, scope
should be well managed in order to achieve a quality product.

Cost/ Resources are another factor we need to focus on. Reducing Cost will affect the
product scope and ultimately affect product quality. Cost is mainly associated with
resources. When more resources are assigned to a project to shorten the schedule or meet
increased scope, the more the cost will increase.

Time is non-recoverable. Changing the project schedule will affect either scope or cost. If
the project needs to be completed sooner, more resources need to be allocated. It will
increase the cost. Another solution is to reduce the scope where some desired features are
left out or deprioritized.

11.2. Verification and Validation

Verification and Validation is one of the main processes used in software projects, as a
quality measure.

Verification Are we building things right? (Requirements and Design

Specifications)
Validation Are we building right thing? (User Expectations)

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Figure 6 : Verification and Validation

Verification

Needs and Expectations of

Specifications Process Product
customer

Validation

Source : Author

Software verification takes place during the implementation, integration and testing
phases. Software verification should be completed before software release. It includes all
the activities associated with the producing high quality software: testing, inspection,
design analysis, specification analysis, etc. There are two fundamental approaches in
software verification.

Dynamic Verification Commonly known as testing. Performed while execution

of software.

Eg:- Unit Test, Integration Testing

Static Verification Also known as analysis. Inspecting the code before it runs.

Eg:- Style Checkers, Static Analysis, Proof of correctness, consistency Check

Software Validation can be described as verifying that you are building what the customer
wants. This is subjective. It measures how far it has addressed a real world need.
Validation includes, Prototyping, modeling, and specification inspection. When it comes
to testing, it associates with Validation also: Customer Acceptance Test, Usability Test.

Regression Testing, System Testing and Beta Testing are some testing types that are
involved in both Verification and Validation processes.

Software testing is a part of the Software Quality Assurance (SQA) process where it is
focused on software development process rather than just the artifacts such as

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documentation, code and systems. Software engineering process itself is examined and
changed to reduce the "defect rate". Software testing is a task intended to detect defects in
software by contrasting a computer program's expected results with its actual results for a
given set of inputs. This is called as Quality Controlling. By contrast, Quality Assurance
is the implementation of policies and procedures intended to prevent defects from
occurring in the first place.

12. Conclusion

Quality has been an important concept in business. Many people think of quality as some
level of superiority or innate excellence. Others view it as a lack of manufacturing
defects. We must be able to identify the features and characteristics of products and
services that determine customer satisfaction and form the basis for measurement and
control. The "ability to satisfy given needs" reflects the value of the product or service to
the customer, including the economic value, safety, reliability, and maintainability.

13. References

1. Cost of Quality: Not only Failure Costs. (2016). Retrieved from

https://www.isixsigma.com/implementation/financial-analysis/cost-quality-not-
only-failure-costs/
2. Cost of Quality Overview. (n.d). Retrieved From http://qualityamerica.com/LSS-
Knowledge-Center/qualitymanagement/cost_of_quality_overview.php
3. Different Perspectives of Quality Marketing Essay. (2013) Retrieved from
https://www.ukessays.com/essays/marketing/different-perspectives-of-quality-
marketing-essay.php

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4. Quality Assurance. (2007). Retrieved From
http://www.technologystudent.com/prddes1/ qual1.html
5. Quality Control . (2015). Retrieved From http://www.tutor2u.net/
business/reference /quality-control
6. The Gap Model, Boundless Marketing. (2016) Retrieved from
https://www.boundless.com/marketing/textbooks/ boundless-marketing-
textbook/services-marketing-6/service-quality-51/the-gap-model-254-4140/
7. What are some examples of the gap model of service quality? (2016). Retrieved
from https://www.reference.com/business-finance/examples-gap-model-service-
quality-6443c0f6f8256d59
8. What is Quality. (n.d.) Retrieved from http://www.bexcellence.org/What-Is-
Quality.html
9. Organizational Orienteering (n.d.) Retrieved from
http://www.ldri.com/articles/96orgrient .html

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