Module

The Management of Lean and Agile

Organisations
6ME015

Dr Jose Reyes

Week 16

Management of Quality
Week 16

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 Contents

• Definition of quality
• Importance of quality

• The continuum of quality

• Quality planning and control

WHAT ARE YOUR

OWN DEFINITIONS
OF QUALITY?

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 Quality can be defined from different perspectives and it
may mean different things for different people
Hilton Hotel
For my wife to consider a
Quality Hotel it needs to be (or
have)
• Elegant
• Near to shopping area
• Courteous staff
• Quiet at night
Disney Hotel Ibis Hotel
For my little nice to consider a For me to consider a Quality
Quality Hotel it needs to be (or Hotel it needs to be (or have)
have)
• Cheap
• Fun
• Good location/easy to reach
• Plenty of game areas
• Good an early breakfast
• Tingerbell at the entrance
saying “hello” • Car park

Professor David Garvin has categorised the definition of Quality

into five approaches

1. The transcendent approach

• Quality is being defined as the absolute – the best possible in terms
of product’s or service’s specification.
• For example: a ‘quality’ car is a Rolls Royce; a ‘quality’ watch is a
Rolex; a ‘quality’ flight is that provided by Singapore Airlines.

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2. The manufacturing-based approach

• It is concerned with making products or providing services that are free

of errors and that conform precisely to their design specifications.

• For example, a car which is less expensive that a Rolls Royce, or a

Swatch watch or an economic flight although not necessarily the ‘best’
available, is defined as ‘quality’ product provided that it has been built or
delivered precisely to its design specifications.

3. The user-based approach – customers perception of quality

• It is about making sure that the product or service is fit for its purpose.
This definition is not only concerned with the adherence to the product’s
specifications but also with the appropriateness of that specification for
the customer.
• For example, a watch that is manufactured precisely to its design
specification yet falls to pieces after two days is clearly not ‘fit for its
purpose’.

Gap Gap
Customers’ Customers’ Customers’
expectation expectation perception

Customers’ Customers’
Customers’
perception expectation
perception

Expectations > perception Expectations = perception Expectations < perception

Perceived quality is poor Perceived quality is good

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4. The product-based approach

• It views quality as a precise and measurable set of characteristics that

are required to satisfy the customer.

• For example, a watch may be designed to run, without the need of

servicing, for at least five years while keeping time correct to within five
seconds.

5. The value-based approach

• This approach contends that quality should be perceived in relation to
price. A customer may be willing to accept something of a lower quality,
if the price is low.
• For example, a simple and inexpensive watch may give good value by
performing quite satisfactorily for a reasonable period of time.

Higher

Value Map Inferior Premium

Quality for
Value price line
Relative
Price Average

Superior
Economy Value
Lower
Inferior Relative Quality Superior

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Quality Gurus have tried to defined “Quality”

• Quality should be aimed at the needs of customer, present and future

(Deming, 1986) – user based approach

• Conformance to requirements (Crosby, 1979) – manufacturing based approach

• The total composite product and service characteristics of marketing,

engineering, manufacture, and maintenance through which the product
and service will meet expectations of the customer (Feigenbaum, 1983) –
user based approach

• Conformance to specifications (Juran, 1988) – manufacturing based approach

• The totality of features and characteristics of a product or service that
bear on its ability to satisfy stated or implied needs (ISO 8402:1986)

• Surpassing customers’ needs and expectations throughout the life of

the product or service (Deming, 1987) – user based approach

Why is quality so
important?

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 Quality Up

Service Rework
Inspection Inventory
cost down and scrap
and test down
cost down Processing
cost down
Image time down
up Complaint
and
Sales warranty
volume cost down
up
Scale Capital
economies Productivity
Price cost down
up up
competition
down
Revenue
Operations
up
cost down

Profits Up

THE CONTINUUM OF
QUALITY
Inspection,
Quality Control,
Quality Assurance
and
Total Quality Mgt

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The quality continuum:

Total Quality Management

Quality Assurance

Quality Control

Inspection

Inspection
“...is essentially the activities
and techniques employed to
judge the conformance
to specifications of a product,
process or service.”
It confines itself to
monitoring activity

Adapted from: John Oakland. TOTAL QUALITY CONTROL Butterworth Heinemann. 1993. p 15 - 16.

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 Where should the inspection take place?

Manufacturing Process

Complete
A B C D Process

At the start of the process
• The raw material can be
inspected to make sure that
they are to the correct
specification
During the process After the process
• Before a particularly costly part of the process • To ensure that the
product conforms to its
• Before a series of processes during which
specification
checking may be difficult
• Immediately after part of the process with a
high defective rate
• Before a change in functional responsibility

100% inspection or sample inspection?

While it might seem ideal to inspect every single product being

produced, there are many reasons why this might not be sensible

• It may be dangerous to inspect the whole item. For example: a doctor

checks only a small sample of blood

• The inspection might destroy the product. For example: it would be

inappropriate for a light bulb manufacturer to inspect the length of life of every single
bulb that leaves the factory

• Checking every product can be both time-consuming and costly. For

example: it just might not be feasible to check every single item from a high-volume
plastic moulding machine

• 100% inspection does not guarantee that all defects or problems will
be identified. For example: staff may become fatigued over a period of time, when
inspecting repetitive items where it is easy to make mistakes

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For these reasons, in practice, most operations
and production processes will use some form of
inspection sampling to check the quality of their
products
Sample inspection is referred as Quality Control

Quality
Control
It includes monitoring
“...is essentially the activities activity, but is also
concerned with finding
and techniques employed to and eliminating causes
achieve and maintain the of quality problems so
quality of a product, process that the requirements of
or service.” the customer are
continually met.
The most commonly used
method for inspecting and
controlling the quality of a
sampled product is SPC

Adapted from: John Oakland. TOTAL QUALITY CONTROL Butterworth Heinemann. 1993. p 15 - 16.

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Statistical Process Control (SPC) uses control charts to measure the
performance of a product over time
Question: Because even the most tightly controlled processes
“Why do we do this?” experience variation over time
A process can present two types of variations
Common cause variation – these are Assignable cause variation – these are large
inherent in the process and can only be variations caused by “extraordinary” situations
reduced by changes to the system and usually or events (e.g. operator error, broken tool,
requires management action (e.g. upgrading a defective raw material, etc.) – What to do? -
machine, controlling room temperature, etc) – remove
operations performance

What to do? - just monitor

Some measure of

Time

Statistical Process Control (SPC) uses control charts to measure the

performance of a product over time (cont’d)
The last point plotted on this chart seems to be unusually low.
How do we know if this is just a common variation or the result of
some change in the process which we should investigate?
Some kind of ‘guidelines’ or ‘control limits’ would be useful

Assignable cause variation - REMOVE

Common cause variation – MONITOR (don’t take action)
(UCL)
Elapsed time of call

(LCL)

Time

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Statistical Process Control (SPC) uses control charts to measure the
performance of a product over time (cont’d)

In addition to points falling outside the control limits, other

unlikely sequences of points should be investigated.

UCL 377 ml

Process Mean 375 ml

LCL 373 ml

Alternating and erratic behaviour – investigate!

Statistical Process Control (SPC) uses control charts to measure the

performance of a product over time (cont’d)

In addition to points falling outside the control limits, other

unlikely sequences of points should be investigated.

UCL 377 ml

Process Mean 375 ml

LCL 373 ml

Suspiciously average behaviour – investigate!

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Statistical Process Control (SPC) uses control charts to measure the
performance of a product over time (cont’d)

In addition to points falling outside the control limits, other

unlikely sequences of points should be investigated.

UCL 377 ml

Process Mean 375 ml

LCL
373 ml

Two points near control limit – investigate!

Statistical Process Control (SPC) uses control charts to measure the

performance of a product over time (cont’d)

In addition to points falling outside the control limits, other

unlikely sequences of points should be investigated.

UCL 377 ml

Process Mean 375 ml

LCL 373 ml

Five points on one side of centre line – investigate!

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 Statistical Process Control (SPC) uses control charts to measure the
performance of a product over time (cont’d)

In addition to points falling outside the control limits, other

unlikely sequences of points should be investigated.

UCL 377 ml

Process Mean 375 ml

LCL
373 ml

Apparent trend in one direction – investigate!

Statistical Process Control (SPC) uses control charts to measure the

performance of a product over time (cont’d)

In addition to points falling outside the control limits, other

unlikely sequences of points should be investigated.

UCL 377 ml

Process Mean 375 ml

LCL 373 ml

Sudden change in level – investigate!

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 Quality
Assurance
“...is the prevention of
quality problems through These will include the
planned and systematic establishment of a good
activities.” quality management
system and the
assessment of its
adequacy, the audit of the
operation of the system,
and the review of the
system itself.

Adapted from: John Oakland. TOTAL QUALITY CONTROL Butterworth Heinemann. 1993. p 15 - 16.

Quality Assurance Systems

International
Organization for
Standardization

ISO 9000

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The accepted rule of thumb:
As long as you document what you
do, do what you document, and
produce the quality of product you say
you will, you can be registered under
ISO 9000

How quality problems are prevented by a quality

assurance system - 1
Typical quality problem How ISO 9000 solves the problem

Staff make mistakes because they You ensure that everyone knows what
haven’t been properly trained their job is, and how to do it

Different people make the same

You adopt best practice in doing a job,
product or provide the same service in
and consistently use it
their own way, causing variations in
product quality

People produce the wrong goods or You ensure that everyone uses the
give the wrong information because current version of a document
they are using an out-of-date
specification

Mistakes are made because the You specify who will be

right person wasn’t involved in the responsible for quality.
decision

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How quality problems are prevented by a quality
assurance system - 2
Typical quality problem How ISO 9000 solves the problem

Different departments don’t talk to You ensure communication and

each other (for example, cooperation between staff
marketing and operations)

You place responsibility for quality on

People don’t see quality as their those who produce the product or
responsibility provide the service

Faulty goods or unacceptable

service are delivered to the You carry out proper inspection
customer checks

When found, mistakes go You analyse faults and problems,

uncorrected, and the same correct them, and try to prevent them
mistakes are regularly made happening again

Total Quality
“...an effective system for
integrating the quality
Management
development, quality
maintenance and quality
improvement efforts of the
various groups in an These will involve
organisation to enable customers and
production and service at the suppliers, whole
most economical levels which organisation
allow for full customer involvement, quality
strategy, team work
satisfaction.” and staff
empowerment.

Source: Feigenbaum, a.v., (1986) Total Quality Controll, McGraw-Hill. and Slack et al.

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 Quality Planning and Control

Quality characteristics of products and services

Functionality – how well the product or service does the

job for which it was intended

Appearance – the aesthetic appeal, look, feel, sound

and smell of the product or service

Reliability – the consistency of performance of the

product or service over time

Durability – the total useful life of the product or service

Recovery – the ease with which problems with the

product or service can be rectified or resolved

Contact – the nature of the person-to-person contacts

that take place

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Quality planning and control can be divided into six sequential
steps
Step 1. Define the “specific” quality characteristics of the product or
service

Car Air journey

Functionality Speed, acceleration, fuel Safety and duration of journey,

consumption, ride quality, onboard meals and drinks
etc.
Appearance Aesthetics, shape, finish, etc, Décor and cleanliness of aircraft,
lounges and crew
Reliability Mean time between failure Keeping to the published
flight times
Durability Useful life (with repair) Keeping up with trends in
the industry
Recovery Ease of repair Resolution of service failures

Contact Knowledge and courtesy Knowledge, courtesy and

of sales staff sensitivity of airline staff

Step 2. Decide how to measure each characteristic

Car

Quality characteristic How to measure

Speed, acceleration, fuel miles/hr, gallons/miles,

Functionality
consumption, ride quality, satisfactory ride?
etc. Number of blemishes visible
Appearance Aesthetics, shape, finish, etc, on car, is the colour to
specification?
Reliability Mean time between failure Average time between
faults
Durability Life of the car Useful life (with repair)

Time from fault

Recovery Ease of repair discovered to fault repair

Knowledge and courtesy Level of help provided by

Contact
of sales staff sales staff (1 to 5 scale)

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 Step 2. Decide how to measure each characteristic (cont’d)
Air journey
How to measure
Quality characteristic
Functionality Safety and duration of journey, Number of journeys that
onboard meals and drinks arrived to destination,
acceptable food?

Appearance Décor and cleanliness of aircraft, Number of seats not clean

lounges and crew satisfactorily, crew well
dressed?

Reliability Keeping to the published % journeys on time, were

flight times there complaints?

Durability Keeping up with trends in Number of times service

the industry innovations lagged
competitors
Recovery Resolution of service failures % of service failures
resolved satisfactorily
Contact Knowledge, courtesy and Extent of customers
sensitivity of airline staff satisfaction (1 to 5 scale)

Boundary between acceptable and

Step 3. Set quality standards unacceptable

Car
Quality characteristic How to measure Quality Standard

Functionality Speed, miles/hr, gallons/miles, No less than 150 m/hr

acceleration, fuel satisfactory ride? as maximum speed
consumption, ride No less than 10 g/mile
quality, etc. Yes - No
Number of blemishes 2 blemish/100cars
Appearance Aesthetics, shape, visible on car, is the as maximum
finish, etc, colour to specification? accepted
Yes - No
Reliability Mean time between Average time between No less than 2000 hr
failure faults as minimum accepted
Durability Life of the car Useful life (with repair) No less than 20 years
Time from fault as minimum accepted
Recovery Ease of repair
discovered to fault repair No more than 4 hrs
Contact Knowledge and Level of help provided by No less than 3
courtesy of sales staff sales staff (1 to 5 scale)

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Step 4. Control quality against the standards previously defined

• Using Statistical Process Control (SPC)

• Acceptance sampling
• Process Capability Analysis (PCA)

Step 5. Find and correct causes of poor quality (next week)

Step 6. Continue to make improvements (next week)

Questions

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