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UNIT-I
INTRODUCTION
PART-A
1. Give the Objectives of TQM?
 To develop a conceptual understanding of the basic principles and methods associated
with TQM;
 To develop an understanding of how these principles and methods have been put into effect in
a variety of organizations;
 To develop an understanding of the relationship between TQM principles and the theories and
models studied in traditional management.

2. Explain the need for quality.


 To survive domestic and worldwide competition
 To prevent product, service and process problems
 Quality and productivity go hand in hand

3. Define Total Quality Management? [M/J’15]


TQM is an enhancement to the traditional way of doing business. It is the art of managing the
whole to achieve excellence. It is defined both a philosophy and a set of guiding principles that
represent the foundation of a continuously improving organization. It is the application of
quantitative methods and human resources to improve all the processes within an organization and
exceed needs now and in the future. It integrates fundamental management techniques, existing
improvement efforts, and technical tools under a disciplined approach.

4. Give the Principles of TQM? [N/D’ 16]


1. Constancy of purpose: short range and long range objectives aligned
2. Identify the customer(s); Customer orientation
3. Identification of internal and external customers
4. Continuous improvement
5. Workflow as customer transactions
6. Empower front-line worker as leader
7. Quality is everybody’s business
8. For a service industry, some elements of quality are:
a. Empathy
b. Trust; i.e. expertise, integrity, courtesy
c. Responsiveness
d. Tangible product attractiveness (curb appeal)
e. Reliability, on time, no interruptions
9. Customer orientation to child care services, a marketing perspective
10. Barriers that exist to a customer orientation
11. How do we find out what customers want?
12. Present Art Emlen findings on flexibility

5. Analyze TQM?
 Total Made up of the whole.
 Quality Degree of excellence of a product or service provides.
 Management Act, art or manner of handling, controlling, directing etc.
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6. Explain quality by design.


Quality by design is the practice of using a multidisciplinary team to conduct Conceptual
thinking, product design and production planning all at one time. It is also known as concurrent
engineering. The team consists specialists from business, engineering, production and customer
base in addition to suppliers.

7. What is quality of conformance? [A/M’18]


Freedom from deficiencies refers to quality of conformance. Deficiencies are stated in different
units such as errors, defects, failures and off specifications. Deficiencies result in product failure or
product dissatisfaction.

8. What is quality of performance? [A/M’18]


 It is the primary operating characteristics of the product. It indicates how well
 The product performs the customer’s intended use. The signal coverage and audio quality of
a mobile phone can be given as an example.

9. Explain the term quality of service.[OR]Give notes on service quality[N/D-19]


 The aspects on which the service quality is judged by customers are reliability,
 Responsiveness, assurance, empathy, tangibles, timeliness, courtesy, consistency,
competency and access.

10. Define Quality? [A/M’14, 19, &N/D’15,] [N/D’19]


Quality = Performance / Expectations
It can be defined in three ways:
 Quality is conformance to requirements or specification-Crosby
 Quality is fitness for use-Juran
 Quality is the totality of features and characteristics of a product or service that bear on its
ability to satisfy given needs-

11. What are the Dimensions of Quality? [M/J’12, 13,N/D’17]


 Performance
 Features
 Conformance
 Reliability
 Durability
 Service
 Response
 Aesthetics
 Reputation

12. List out the dimensions of service quality.


Quality of customer service, Quality of service design, Quality of delivery
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13. What are the important habits of quality leader? [N/D’11]


1. People, Paradoxically, need security and independence at the same time.
2. People are sensitive to external and punishments and yet are also strongly self - motivated.
3. People like to hear a kind word of praise. Catch people doing something right, so you can pat
them on the back.
4. People can process only a few facts at a time; thus, a leader needs to keep things simple.
5. People trust their gut reaction more than statistical data.
6. People distrust a leader’s rhetoric if the words are inconsistent with the leader’s actions.

14. Give the Basic Concepts of TQM? [M/J’12, N/D’12,13]


 A committed and involved management to provide long-term top-to bottom Organizational
support.
 An unwavering focus on the customer, both internally and externally.
 Effective involvement and utilization of the entire work force.
 Continuous improvement of the business and production process.
 Treating suppliers as partners.
 Establish performance measures for the processes.

15. State Deming Philosophy?


 Create and publish the aims and purposes of the organization.
 Learn the new philosophy.
 Understand the purpose of inspection.
 Stop awarding business based on price alone.
 Improve constantly and forever the system.
 Institute training.
 Teach and institute leadership.
 Drive out fear, create trust and create a climate for innovation.
 Optimize the efforts of teams, groups and staff areas.
 Eliminate exhortations for the work force.
 Eliminate numerical quotes for the work force.
 Eliminate management by objective.
 Remove barriers that rob people of pride of workmanship.
 Encourage education and self-improvement for everyone.
 Take action for accomplish the transformation.

16. List the key elements of TQM? [A/M’10, M/J’13, N/D’14]


 Ethics
 Integrity
 Trust
 Training
 Team work
 Leadership
 Communication & Recognition

17. State the Quality Improvement Strategy?


 Reduce failure costs by problem solving
 Invest in the “right” prevention activities
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 Reduce appraisal costs where appropriate and in a statistically sound manner


 Continuously evaluate and redirect the prevention effort to gain further quality
improvement.

18. What are the benefits of TQM? [N/D’11]


(or) What are the advantages of implementing TQM in a Manufacturing Organization?
[N/D’14]
 Improved quality
 Employee participation
 Team work
 Working relationships
 Customer satisfaction
 Employee satisfaction
 Productivity
 Communication
 Profitability
 Market share

19. Mention the barriers involved in TQM implementing. [N/D’13 M/J’13,15]


 Lack of commitment
 Inability to change organizational culture
 Improper planning
 Lack of continuous training and education
 Incompatible organizational Structure
 Ineffective Measurement techniques
 Inadequate attention to internal and external customers
 Inadequate use of empowerment and teamwork
 Failure to continually improve

20. Give the Obstacles associated with TQM Implementation?


 Lack of management commitment
 Inability to change organizational culture
 Improper planning
 Lack of continuous training and education
 Incompatible organizational structure and isolated individuals and departments
 Ineffective measurement techniques and lack of access to data and results.
 Paying inadequate attention to internal and external customers.
 Inadequate use of empowerment and teamwork.

21. List the gurus of TQM?


Shewhart - Control chart theory PDCA Cycle
Deming - Statistical Process Control
Juran - Concepts of Shewhart
Return on Investment
Feiganbaum - Total Quality Control
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Management involvement
Employee involvement
Company wide quality control
Ishikawa - Cause and Effect diagram
Quality circle concept
Crosby - Quality is Free
Conformance to requirement
Taguchi - Loss function concept
Design of Experiments

22. What are quality statements? (or) What is quality statement? [N/D’17]
Quality statements:
 Vision statement.
 Mission statement.
 Quality policy statement.
Vision: desired future state of organization.
Mission: What business we are in.
Policy: Commitment to customer.

23. What is quality planning? [N/D’11]


 Determine internal & external customers.
 Their needs are discovered.
 Develop product / service features.
 Develop the processes able to produce the product / service features.
 Transfer plans to operations.

24. Why quality policy is made as a requirement in ISO/QS9000?


Quality policy requirement in ISO/QS9000:
 The section I requirements includes the exact text of ISO 9001 with the addition of
automotive / heavy trucking requirements.
 Section II specific requirements are, production-part approved process, continuous
improvement & manufacturing capabilities.
 Section III deals with specific requirement of each customer over and above the
requirements specified in section II.

25. Who are internal and external customers?


The customers inside the company are called internal customers, whereas the customers outside
the company are called external customers.
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26. Draw the Customer Organizational Diagram.

27. What are the customer’s perceptions on quality?


The six important customer’s perceptions are:
 Performance
 Features
 Service
 Warranty
 Price and
 Reputation.

28. List the various tools used for collecting customer complaints.
(or)
Name any 4 methods of receiving customer complaints[A/M’18]
The various tools used are:
1. Comment card.
2. Customer questionnaire
3. Focus groups
4. Toll-free telephone numbers
5. Report cards
6. The Internet and computer etc.

29. What is meant by customer retention? [N/D’12,14]


Customer retention is the process of retaining the existing customers.

30. What is Customer Satisfaction? [N/D’19]


Customer satisfaction seems simple enough, and yet it is far from simple. Customer satisfaction
is not an objective statistic but more of a feeling or attitude. Although certain statistical patterns
can be developed to represent customer satisfaction, it is best to remember that people’s opinions
and attitudes are subjective by nature.
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31. What are the different ways to create customer oriented culture in an industry?
[N/D’16]
1. Start at the top
2. Hire people who fit
3. Get everyone involved
4. Trust your team
5. Establish good lines of communication

32. Give the Analysis Techniques for Quality Costs?


 Trend Analysis
 Pareto Analysis

33. Define Quality Costs? [N/D’18] (or) What do you mean by cost of quality?
Quality Costs are defined as those costs associated with the non achievement of product or
service quality as defined by the requirements established by the organization and its contracts
with customers and society.

34. Give the primary categories of Quality cost? [N/D’16]


 Preventive cost category
 Appraisal cost category
 Internal failure cost category
 External failure cost category

35. Give the sub-elements of Preventive cost category?


 Marketing/Customer/User
 Product/Service/Design development
 Purchasing
 Operations
 Quality Administration
 Other Prevention Costs

36. Give the sub-elements of Appraisal cost category?


 Purchasing appraisal cost
 Operations appraisal cost
 External appraisal cost
 Review of test and application data
 Miscellaneous quality evaluations

37. Give the sub-elements of Internal failure cost category?


 Product or Service Design costs (Internal)
 Purchasing failure costs
 Operations failure costs
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38. Give the sub-elements of External failure cost category?


 Complaint investigations of customer or user service
 Returned goods
 Retrofit and recall costs
 Warranty claims
 Liability costs
 Penalties
 Customer or user goodwill
 Lost sales
 Other external failure costs

39. Give the typical cost bases?


 Labor
 Production
 Unit
 Sales

40. How will you determine the optimum cost?


 Make comparison with other organizations
 Optimize the individual categories
 Analyze the relationships among the cost categories

41. What are the four absolutes of quality defined by Crosby? [A/M’ 17][A/M’19]
 The definition of quality is conformance to requirements.
 The system of quality is prevention.
 The performance standard is zero defects.
 The measurement of quality is the price of nonconformance.

42. Define quality policy statements? [A/M’ 17]


In quality management system, a quality policy is a document developed by management to
express the directive of the top management with respect to quality. Section 5.1 of the ISO
9001:2015 standard requires a written, well defined quality policy that is communicated and
understood within an organization.

43. What is quality circle? [N/D’17,18]


A group of employees who meet regularly to consider ways of resolving problems and
improving production in their organization.

44. List Down the Contributions Of Juran’s [A/M-19]


1. Juran’s trilogy
a. Quality planning,
b. Quality control,
c. Quality improvement.
2. Juran’s 10 steps to quality improvement
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PART-B
1. GIVE THE DIFFERENT DEFINITIONS FOR QUALITY. [M/J’14]
The dictionary has many definitions of “quality”. A short definition that has achieved acceptance is :
 “Quality is Customer Satisfaction”. Here, customer means anyone who is impacted by the product or
process.
 Quality is “a predictable degree of uniformity and dependability, at low cost and suited to the
market”.
 Quality is a relative term, generally used with reference to the end-use of a product. Quality should
be aimed at the needs of the consumer, present and future.
According to ISO 8402, quality is “the totality of features and characteristics of a product or service that
bear on its ability to satisfy stated or implied needs”.
Broadly quality is:
a) Fitness for use
b) Grade
c) Degree of preference
d) Degree of excellence
e) Conformity to requirements
 When the expression ‘quality’ is used, it will be think in terms of an excellent product or service
that fulfils or exceeds our expectations. These expectations are based on the intended use and the
selling price.
 Quality can be quantified as follows:
Q = P/E
Where q = quality, P = performance, E = expectations.
 If Q is greater than 1.0, then the customer has a good feeling about the product or Service.

2. DISCUSS ABOUT THE DIMENSIONS OF QUALITY. [M/J’11, N/D’13 & 16, M/J’14,17]
Quality has nine dimensions. These are independent, therefore, a product can be excellent;
therefore, a product and average or poor in another. Very few, if any,. Products excel ion all nine
dimensions. For example, Japanese were cited for high-quality cars in 1970’s based only on the
dimensions of reliability, conformance and aesthetes. Quality products can be determined by using
a few of the dimensions of quality. Marketing has the responsibility of identifying the relative
importance of each dimension of quality. These dimensions are then translated into the
requirements for the development of a few new products or the improvement of an existing one.
-------------------------------------------------------------------------------------------------------------------------------
Dimension Meaning and Example
-------------------------------------------------------------------------------------------------------------------------------
Performance Primary product characteristics, such as the brightness of the picture
Features Secondary characteristics, added features, such as remote control
Conformance Meeting specifications or industry standards, workmanship
Reliability Consistency of performance over time, average time of the unit to fail
Durability Useful life, includes repair
Service Resolution of problems and complaints, ease of repair
Response Human – to – human interface, such as the courtesy of the dealer
Aesthetics Sensory characteristics, such as exterior finish
Reputation Past performance and other intangibles, such as being ranked first
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3. WHAT ARE THE CUSTOMER PERCEPTIONS OF QUALITY? EXPLAIN. [N/D’17]


Dimensions of Service Quality
Like quality of products, it is not possible to define quality of services in terms of physical and
functional characteristics alone. Quality of service is judged by the customers on many dimensions
in addition to the physical and functional characteristics associated with the service.
The various aspects or dimensions of service which are found to be very important in
determining customer perception of service quality include:
1. Reliability
2. Responsiveness
3. Assurance
4. Empathy
5. Tangibles
6. Other dimensions
1. Reliability
 Reliability refers to the dependability of the service providers and their ability to keep their
promises.
 It is the extent to which the services performed matches implicity or explicity promises made
by the service provider regarding the nature of service.
 For example, the basic quality of room decor, food, and facilities provided in a hotel
2. Responsiveness
 Responsiveness refers to the reaction time of the service.
 It is the willingness to help the customer promptly m case of special and unforeseen
requirements.
 For example, helping customers who fall sick when staying. in the hotel.
3. Assurance
 Assurance refers to the level of certainty a customer has regarding the quality of the service
provided.
 It is the extent to which the service provider and the staff is able to inspire trust and
confidence.
 For example, the customer dining in a restaurant may not be able to directly judge the level of
hygiene maintained by the restaurants. Here it is not only important to actually provide
hygienic food but also to inspire confidence that the food is hygienic.
 The assurance is regarding giving the customer peace of mind that everything will be taken
care of as required, rather than just actually taking care when the need arises. For example,
a doctor with MD degree may inspire more assurance than a doctor with just an MBBS
degree, although the basic treatment provided by them may be of same quality.
4. Empathy
 Empathy is being able to understand the needs of the customer as an individual and meet the
special requirements of the customer.
 This is more about customizing the service and the general service provider behaviour for
each customer, rather than providing a uniform high quality treatment to all.
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 Many companies try to create this sense of empathy by employing tactics like addressing each
customer by name. However, true empathy means understanding the special characteristics
and needs of individual customer, and modifying service to them accordingly.
5. Tangibles
 Tangibles refers to a service's look or feel.
 Tangibles similar to the physical characteristics of quality of products. This refers to the
physical characteristics of facilities, equipments, consumable goods and personnel used in
or associated with the service provided .
 However the quality is judged, not by some uniform specifications in terms of physical
characteristics, but by the impact these physical characteristics have on customer
assessment of the service quality.
6. Other Dimensions
The additional dimensions of service quality include:
(i) Time: Time the customer waits for the service.
(ii) Timeliness: Will the service meet time commitments?
(iii) Completeness: Are all commitments met?
(iv) Courtesy: Politeness, consideration, and friendliness of service personnel.
(v) Consistency: Are services delivered in the same manner for every customer, and every
time for the same customer?
(vi) Accessibility and convenience: Is the service easy to obtain?
(vii) Accuracy: Is the service performed right the first time?
(viii) Competence: Possession of skills and knowledge required to perform the service.
(ix) Access: Approachability and ease of contact of service personnel.
(x) Communication: Educating and informing customers in language they can
understand; listening to customers.
(xi) Credibility: Trustworthiness, belief, having customer's best interest at heart.
(xii) Security: Freedom from danger, risk, or doubt.

4. QUALITY MANAGEMENT IS ONLY APPLICABLE TO FIRMS IN THE MANUFACTURING


SECTOR AND NOT IN THE PUBLIC OR SERVICE INDUSTRY. GIVE ARGUMENT FOR OR AGAINST
THIS ASSERTION AND DISCUSS THE DIMENSION OF SERVICE QUALITY [A/M-19]
I argue for this argument that Quality management is only applicable to firms in the
manufacturing sector and not in the public or service industry.
Quality assurance is the process of using systems and methodologies that ensure that the
manufactured products meet the required quality standards consistently. The aim of QA is to
produce goods right at the first time, without any rework. Organizations, usually, have a separate
department to assure the quality of their products. For this they may also use the services of the
consultants.
QA is crucial for the manufacturing industry. With so much competition and such few margins,
no manufacturing industry can afford to spend time and money on rework. Every activity in the
industry costs money and so does rework, but customers do not pay for rework. Customers pay for
the value addition by the company and if they see more valuable additions by some other company
being offered at same or lower costs, they move to that company. Hence to assure good quality to
customers, quality assurance plays a significant role.
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The notions of total quality management and manufacturing have a deep connection as in the
context of the manufacturing services industry the system of total quality management has
continued to be important. The importance of total quality management lies in the fact that it has
been used in order to iron out the shortcomings in a particular manufacturing process.
Relation of Total Quality Management and Manufacturing
There is a high correlation between the concepts of total quality management and
manufacturing as the system of total quality management is pretty important in the context of the
manufacturing industry. It has been observed in the case of a lot of the manufacturing services
industry that it is extremely important to provide quality assurance by way of employing statistical
means.
Total Quality Management Process in Manufacturing
There is a certain way in which the concept of total quality management functions in case of the
manufacturing industry. The process is usually initiated by trying out a random group of products
of a particular manufacturing company. The samples are collected mainly for the purpose of
checking them. It is seen if they would be able to measure up to the expectations of the consumers.
In this case the various shortcomings of the particular samples are analyzed. After this the
production processes that need to be followed at the secondary level are created.
The statistical distributions of the business measures that are crucial are determined. The main
stress of the application of total quality management in case of the manufacturing services industry
is to make sure that the production process runs smoothly. The emphasis is also on minimizing the
amount of products that are of an inferior quality. It may be opined that total quality management
process is extremely important in case of the manufacturing industry.
Benefits of Quality Assurance in the Manufacturing Industry
Some of the benefits the organization derives from this role are:
Improve Quality
QA professionals are involved in all critical activities of the organizations like design,
manufacturing, material procurement, packaging, logistics etc. Since all the processes are being
tracked and monitored properly, there are fewer chances of bad quality or non-compliance of
products with respect to the requirements. These requirements could be standard requirements,
customer requirements, or even legal requirements.
Low Cost
It reduces the overall costs to the organization. When the product is right the first time, there
are no rework costs, no wastage of material, no wastage of manpower, and no disruptions in the
production process. There are fewer claims for warranties and guaranties. In short, the cost of poor
quality goes down. All this reduces the operating costs of the organizations and hence results in
increased operating profits.
Reputation
Since the organizations are able to manufacture good quality products that are made according
to the requirements of the customers, the market reputation of those organizations improves. This
helps the organizations to retain the existing customers and get more business from them. At the
same time this also helps them in attracting new customers. These in turn increase the revenue
and profit of the organizations.
Reduce Execution Time
The systems implemented to improve quality reduce the cycle time i.e. time taken for the
execution of the orders. If the quality of products is bad then there will be more customer
complaints and more production downtime. This results in huge loss of time and resources. Hence,
if QA systems are implemented properly in the organization, the order execution time
automatically gets reduced.
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Compliance to Standards
It ensures that the organizations meet all the standards and guidelines required for different
quality management systems like ISO and other quality certifications awarded to it.
In short, to meet customer requirements effectively and consistently, it is very important for
every manufacturing industry to have a QA department. This will ensure that the efforts and
processes are moving in right direction so that the end product not only meets but exceeds the
customers’ expectations.
However,
Quality in Services
The importance of quality in services cannot also be underestimated. Service is a "social act
which takes place in direct contact between the customer and representatives of the service
company" (Norman, 1984). Technical Assistance Research Programs, Inc. has conducted studies
that reveal the following:
The average company never hears from 96 percent of its unhappy customers. For every
complaint received, the company has 24 customers with problems, 6 of which are serious. Of the
customers who make a complaint, more than half will do business again with that organization if
their complaint is resolved. If the customer feels that the complaint was resolved quickly, this
figure jumps to 95 percent. The average customer who has had a problem will tell 9 or 10 others
about it. Customers who have had complaints resolved satisfactorily will tell only about 5 others.
(Albrecht & Zemke, 1985)
Dimensions of service quality
The concept of quality includes not only the product and service attributes that meet basic
requirements, but also those that enhance and differentiate them from competing offerings.
However, not every firm needs to compete along the same dimensions of quality. David A. Garvin
(1984) observes that quality consists of eight basic dimensions:
1. Performance: A product's primary operating characteristics.
2. Features: The "bells and whistles" of the product.
3. Reliability: The probability that a product will operate properly over a specified period of
time under stated conditions of use.
4. Conformance: The degree to which physical and performance characteristics of a product
match pre-established standards.
5. Durability: The amount of use one gets from a product before it physically deteriorates or
until replacement is preferable.
6. Serviceability: The speed, courtesy, and competence of repair.
7. Aesthetics: How a product looks, feels, sounds, tastes, or smells.
8. Perceived quality: Subjective assessment resulting from image, advertising, or brand
name. Garvin has further suggested that a company can create a niche in the marketplace by
focusing only on a few of these dimensions that competitors ignore (1987). For example,
Japanese automobiles initially emphasized reliability and conformance ("fit and finish"),
which were not very well achieved by domestic automobiles at the time.
A word of caution. While quality was a significant source of competitive advantage in the 1970s
and 1980s, the recognition of the importance of quality and the rapid rate at which businesses have
improved quality has made it a "given" rather than a distinctive source of competitive advantage.
In particular, dimensions such as conformance, reliability, and durability are taken for granted by
Japanese firms. In one Chrysler television commercial in the late 1980s, Lee Iacocca touted that
"Our cars are every bit as good as the Japanese." Mazda's chairman contends that "any
manufacturer can produce according to statistics." In a defect-free world, the Japanese argue, it is
the fine touches that will impress consumers. (Business Week, October 22, 1990). Companies that
do not pay significant attention to all dimensions of quality will simply not be able to compete.
Total quality management represents a basic business strategy.
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5. DISCUSS THE NEED AND BASIC CONCEPTS OF TQM? (N/D’15, 18)[A/M-19]


Total Quality Management (TQM) is an approach that organizations use to improve their
internal processes and increase customer satisfaction.
Why do we need TQM
A primary focus of TQM and most Quality Management Systems is to improve customer
satisfaction by having a customer focus and consistently meeting customer expectations. ... it
emphasizes the need for your business to clearly communicate to the customers exactly what you
will deliver to avoid misunderstandings.
TQM Basic Concepts:
(i). A Committed and involved management to provide long-term top-to-bottom
organizational support.
Management must participate in the quality program. A quality council must be established
to develop a clear vision, set long-term goals, and direct the program. Quality goals are included
in the business plan. An annual quality improvement program is established and involves input
from their entire work force. Managers participate on quality improvement teams and also act
as coaches to other teams. TQM is a continual activity that must be entrenched in the culture it
is not just a one shot program. TQM must be communicated to all people.
(ii). An unwavering focuses on the customer, both internally and externally.
The key to an effective TQM program is its focus on the customer. An excellent place to start
is by satisfying internal customers. We must listen to the voice of customer and emphasize
design and defect prevention. Do it right the first time and every time, for customer satisfaction
is the important consideration.
(iii). Effective involvement and utilization of the entire work force.
TQM is an organization, wide challenge that is everyone’s responsibility. All personal must
be trained in TQM, statistical process control (SPC), and other appropriate quality
improvement skills so they can effectively participate on project teams. Including internal
customers and, for that matter, the internal supplier on project teams is an excellent approach.
Those affected by the plan must be involved in its development and implementation. They
understand the process better than anyone else. Changing behavior is the goal. People must
come to work not only to do their jobs, but also that think about how to improve their jobs.
People must be empowered at the lowest possible level to perform processes in an optimum
manner.
(iv). Continuous improvement of the business and production process.
There must be a continual striving to improve all business and production processes.
Quality improvement projects, such as on-time delivery, order entry efficiently, billing error
rate, customer satisfaction, cycle time, scrap reduction and supplier management are good
places to begin. Technical techniques such as SPC, benchmarking, QFD, ISO 9000, and designed
experiments are excellent for problem solving.
(v). Treating suppliers as partners.
On the average 40% of the sales dollar is purchased product or service; therefore, the
supplier quality must be outstanding. A partnering relationship rather them an adversarial one
must be developed. Both parties have as much to gain or lose based on the success or failure of
the product or service. The focus should be on quality and life-cycle costs rather than price.
Suppliers should be few in number so that true partnering can occur.
(vi). Establish performance measure for the processes.
Performance measures such as uptime, percent nonconforming absenteeism, and customer
satisfaction should be determined for each functional area. These measures should be posted
for everyone to see. Quantitative data are necessary to measure the continuous quality
improvement activity.
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6. GIVE DEFINITION FOR TQM.


Total  Made up of the whole
Quality  Degree of excellence a product of service provides
Management  Act, art of manner of handling, controlling, directing etc
 Therefore TQM is the art of managing the whole to achieve excellence.
 The golden rule is simple but effective way to explain it: Do unto as you would have them do
unto you.
 TQM is defined as both a philosophy and a set of guiding principles that represent the
foundation of a continuously improving organization.
 It is the application of quantitative methods and human resources to improve all the processes
within an organization and exceed customer needs now and in the future.
 TQM integrates fundamental management techniques, existing improvement efforts, and
technical tools under a disciplined approach.

7. ENUMERATE ON THE FRAMEWORK OF TQM. [M/J’,N/D’15][N/D’19]


TQM is an umberalla under which the management includes everything that it consider
important for its success. Most of the elements are common to all TQM programmes and the list of
elements can be divided into two groups are:
1. TQM principles and practices
2. TQM tools and techniques.

TQM

Managing the entire organization so that it excels in all dimensions of


products and services that are important to the customer

Generic Tools SPC tools;


 Process flow charts
 Check sheets -
 Pareto analysis and histogram Tools of the QC Department
Philosophical Element  Cause and effect (or fishbone)  SQC methods:
 Customer driven quality diagrams  Sampling plans
 Leadership  Run charts  Process capability
 Continuous improvement  Scatter diagrams  Process capability
 Employee  Control charts  Taguchi methods
participation  Quality function deployment  Benchmarking
and New seven management tools  Total preventive
development Affinity diagram Relationship maintenance
 Quick response diagram Tree diagram Matrix
 Design quality and diagram Arrow diagram PDPC
prevention  Matrix data analysis diagram
 Management by fact
 Partnership development  Failure mode and effort analysis
 Quality management
systems
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8. EXPLAIN THE ROLE OF SENIOR LEVEL MANAGEMENT IN TQM IMPLEMENTATION? N/D’16]


Senior Management:
Senior management is generally a team of individuals at the highest level of
organizational management who have the day to-day responsibilities of managing a
corporation. There are most often higher levels of responsibility, such as a board of directors
and those who own the company (shareholders), but they focus on managing the senior
management instead of the day-to-day activities of the business. They are sometimes referred
to, within corporations, as top management, upper management, or simply seniors.
Role of Senior Management in TQM Implementation:
The first thing which senior management must realize from the outset is that TQM is a long-
term business strategy. The senior management should start TQM implementation because
they are the primary internal change agent for quality improvement.
In this situation, the senior management has two major roles; they are shaping
organizational values and establishing a managerial infrastructure to bring about change. They
must prepare themselves with knowledge about the criteria of TQM and put in their mind the
TQM agenda.
TQM is the management process used to make continuous improvement to all functions in
organizations. The ideal continuous improvement process is the ones that begin with and have
genuine senior management involvement. On the other hand, Leonard and McAdam believe
TQM implementation needs commitment to quality and continuously improving from all levels
of staff.

9. EXPLAIN THE 14 PRINCIPLES OF DEMING. [A/M-13, 19 15, N/D-13,14,17,18] [N/D’19]


Deming’s philosophy is given in his 14 points
1. Create and publish the Aims and purposes of the organizations
Management must demonstrate constantly their commitment to this statement. It must
include investors, customers, suppliers, employees, and the community and quality philosophy.
The statement is a forever – changing document that requires input from everyone.
Organizations must develop a long – term view of atleast 10 years and plan to stay range goal.
Resources must be allocated for resources, training and continuing education to achieve the
goals. Innovation is promoted to ensure that the product or service does not become obsolete.
A family organizational philosophy is developed to send the message that everyone is part of
the organization.
2. Learn the New philosophy
Top management and everyone must learn the new philosophy. Organizations must seek
never – ending improvement and refuse to accept nonconformance. Customer satisfaction is
the number one priority, because dissatisfied customers will not continue to purchase
nonconforming products services. The organization must concentrate on defect prevention
rather than defect detection. By improving the process, the quality and productivity will
improve. Everyone in the organization, including the union, must be involved in the quality
journey and change his or her attitude about quality. The supplier must be helped to improve
quality by requiring statistical evidence of conformance and shared information relative to
customer expectations.
3. Understand the purpose of inspection
Management must understand that the purpose of inspection to improve the process and
reduce its cost. For the most part, mass inspection is costly and unreliable. Where appropriate,
it should be replaced by never – ending improvement using statistical techniques. Statistical
evidence is required of self and supplier. Every effort should be made to reduce and then
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eliminate acceptance sampling. Mass inspection is managing for failure and defect prevention is
managing for success.
4. Stop Awarding Business Based on Price Alone
The organization must stop awarding business based on the low bid, because price has no
meaning without quality. The goal is to have single suppliers for each item to develop a long.
Term relationship of loyalty and trust, thereby providing improved products and services.
Purchasing agent must be trained in SPC and require it from suppliers. They must follow the
materials throughout the entire lifecycle in order to examine how customer expectations are
affected and provide feedback to the supplier regarding the quality.
5. Improve Constantly and Forever the System
Management must take more responsibility for problems by actively finding and correcting
problems so that quality and productivity are continually and permanently improved and costs
are reduced. The focus is on preventing problems before they happen. Variation is expected,
but there must be a continual striving for its reduction using control charts. Responsibilities are
assigned to team tom remove the causes of problems and continually improve the process.
6. Institute Training
Each employee must be oriented to the organizations philosophy of commitment to never-
ending improvement. Management must allocate resources to train employees to perform their
jobs in the best manner possible. Everyone should be trained in statistical methods, should be
used to monitor the need for further training.
7. Teach and Institute Leadership
Improving supervision is management’s responsibility. They must provide supervision with
training in statistical methods and these 14 points so the new philosophy can be implemented.
Instead of focusing on a negative, fault-finding atmosphere, supervisors should create a
positive, supportive one where pride in workmanship can flourish. All communication must be
clear from top management to supervisors to operators.
8. Drive out Fear, Create Trust and create a climate for innovation
Management must encourage open, effective communication and team work. Fear is caused
by a general feeling of being powerless to control important aspects of one’s life. It is caused by
a lack of job security, possible physical harm, performance appraisals, and ignorance of
organization goals, poor supervision, and not knowing the job. Driving fear out of the
workspace involves managing for success. Management can begin by providing workers with
adequate training, good supervision, and proper tools to do the job, as well as removing
physical dangers. When people are treated with dignity, fear can be eliminated and people will
work for the general good to the organization. In this climate, they will provide ideas for
improvement.
9. Optimize the efforts of teams, groups and staff areas
Management must optimize the efforts of team, workgroups, and staff areas to achieve the
aims and purpose of the organizations. Barriers exist internally among levels of management
among department with in departments and among shifts. Externally they exist between the
organization and its customers and suppliers. These barriers exist because of poor
communications, ignorance of the organization mission, competition, fear and personal grudges
or jealousies. To break down the barriers, management will need a long-term perspective. All
the different areas must work together. Attitudes need to be changes; communication channels
opened; project teams organized; and training in teamwork implemented. Multifunctional
teams, such as used in concurrent engineering, are an excellent method.
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10. Eliminate Exhortations for the work force


Exhortations that ask for increased productivity without providing specific improvement
methods can handicap an organization. They do nothing but express management’s desires.
They do not produce a better products or service, because the workers are limited by the
system. Goals should be set that the achievable and are committed to the long term success of
the organization. Improvement in the process cannot be made unless the tools and methods are
available.
11.a. Eliminate Numerical Quotas for the Work Force
Instead of Quotas, management must learn and institute methods for improvement. Quotas
and work standards focus on quantity rather than quality. They encourage poor workmanship
in order to meet their quotas. Quotas should be replaced with statistical methods of process
control. Management must provide and implement a strategy for never-ending improvements
and work with the workforce to reflect the new policies.
11 b. Eliminate Management by objective
Instead of management by objective, management must learn the capabilities of the
processes and how to improve them. Internal goals set by management, without methods, area
a burlesque. Management by numerical goal is an attempt to manage without knowledge of
what to do.
12. Remove Barriers That rob people of pride of workmanship
Loss of pride in workmanship exists throughput organizations because
1) Workers do not know how to relate to the organization’s mission.
2) They are being blamed for system problems.
3) Poor design lead to the production of “junk”.
4) Inadequate training is provided.
5) Punitive supervision exists
6) Inadequate or ineffective equipment is provided for performing the required work.
Restoring pride will require a long-term commitment by management. When workers are
proud of their work, they will grow to the fullest extent of their job. Management must give
employees operational job descriptions, provide the proper tools and materials, and stress the
worker’s understanding of their role in the total process. By restoring pride, everyone in the
organization will be working for the common good. A barrier for people on salary is the annual
rating of performance.
13. Encourage Education and self-improvement for everyone
What an organization need is people who are improving with the education. A long-term
commitment to continuously train and educate people must be made by management. Deming
14 points and the organization’s mission should be foundation of the education program.
Everyone should be retrained as the organization requirement changing environment.
14. Take Action to Accomplish the Transformation
Management has to accept the primary responsibility for the never-ending improvement of
the process. It has to create a corporate structure to implement the philosophy. A cultural
change is required from the previous “Business as usual” attitude. Management must be
committed, involved and accessible if the organization is to succeed in implementing the new
philosophy.
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10. EXPLAIN JURAN'S TRILOGY IN DETAIL. [M/J’13,14,N/D’15] (OR)


DESCRIBE JOSEPH M.JURAN’S CONTRIBUTION TOWARDS TQM [A/M’18]
1. PLANNING
 Determine internal & external customers.
 Their needs are discovered.
 Develop product / service features.
 Develop the processes able to produce the product / service features.
 Transfer plans to operations.

2. CONTROL
 Control is used by operating forces to help meet the product, process and service
requirements.
 It consists of the following steps:
 Determine items to be controlled.
 Set goals for the controls.
 Measure actual performance.
 Compare actual performance to goals.
 Act on the difference.

3. IMPROVEMENT
 Aims to attain levels of performance that are higher than current levels.
 It consists of the following steps:
 Establishment of quality council.
 Identify the improvement projects.
 Establish the project teams with a project leader.
 Provide the team with the resources.

Juran’s ten steps to quality improvement were:


1. Build awareness of the need and opportunity for improvement.
2. Set goals for improvement.
3. Organize to reach the goals (establish a quality council, identify problems, select
projects, appoint teams, designate facilitators).
4. Provide training.
5. Carry out projects to solve problems.
6. Report progress.
7. Give recognition.
8. Communicate results.
9. Keep score.
10. Maintain momentum by making annual improvement part of the regular systems and
processes of the company.
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11. ELABORATE THE FOURTEEN STEPS INVOLVED IN CROSBY’S TOTAL QUALITY APPROACH.
[M/J’17] (OR) EXPLAIN ABOUT THE CONTRIBUTIONS OF CROSBY FOR TQM.
Crosby's approach to quality was unambiguous. In his view, good, bad, high, and low quality are
meaningless concepts in the abstract; the meaning of quality is "conformance to requirements."
What that means is that a product should conform to the requirements that the company has
itself established based on its customers' needs. He also believed that the prime responsibility for
poor quality lies with management, not with the workers.
Management sets the tone for the quality initiative from the top. Nonconforming products are
ones that management has failed to specify or control. The cost of nonconformance equals the cost
of not doing it right first time, and not rooting out any defects in processes.
"Zero defects" does not mean that people never make mistakes, but that companies should not
begin with "allowances" or substandard targets with mistakes as an inbuilt expectation. Instead,
work should be seen as a series of activities or processes, defined by clear requirements and
carried out to produce identified outcomes.
Systems that allow things to go wrong and that result in those things having to be done again
can cost organizations between 20% and 35% of their revenues, in Crosby's estimation.
His seminal approach to quality was set out in Quality is Free, and is often summarized as the
"Fourteen Steps."
1. Management commitment it: the need for quality improvement must be recognized and
accepted by management, who then draw up a quality improvement program with an emphasis
on the need for defect prevention. Quality improvement equates to profit improvement. A
quality policy is needed which states that "...each individual is expected to perform exactly like
the requirement or cause the requirement to be officially changed to what we and the customer
really need."
2. The quality improvement team: representatives from each department or function should
be brought together to form a quality improvement team. Its members should be people who
have sufficient authority to commit the area they represent to action.
3. Quality measurement: the status of quality should be determined throughout the company.
This means establishing and recording quality measures for each area of activity in order to
show where improvement is possible and where corrective action is necessary. Crosby
advocated delegation of this task to the people who actually do the job, thus setting the stage
for defect prevention on the job, where it really counts.
4. The cost of quality evaluation: the cost of quality is not an absolute performance
measurement, but an indication of where the action necessary to correct a defect will result in
greater profitability.
5. Quality awareness: this involves making employees aware of the cost to the company of
defects, through training and information, and the provision of visible evidence of the results of
a concern for quality improvement. Crosby stresses that this sharing process is a key, or even
the key, step in the progress of an organization toward quality.
6. Corrective action: discussion of problems will result in the finding of solutions and also
bring to light other elements that are in need of improvement. People need to see that problems
are regularly being resolved. Corrective action should then become a habit.
7. Establishing an ad hoc committee for the zero defects program: zero defects is not a
motivation program: its purpose is to communicate and instill the notion that everyone should
do things right first time.
8. Supervisor training: all managers should undergo formal training on the Fourteen Steps
before they are implemented. Managers should understand each of the Fourteen Steps well
enough to be able to explain them to their people.
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9. Zero defects day: it is important that the commitment to zero defects as the performance
standard of the company makes an impact, and that everyone gets the same message in the
same way. Zero defects day, when supervisors explain the program to their people, should
make a lasting impression as a "new attitude" day.
10. Goal setting: all supervisors ask their people to establish specific, measurable goals that
they can strive for. Usually, these comprise 30-, 60-, and 90-day goals.
11. Error cause removal: employees are asked to describe, on a simple, one-page form, any
problems that prevent them from carrying out error-free work. Problems should be
acknowledged and begin to be addressed within 24 hours by the function or unit to which they
begin to grow more confident that their problems will be attended to and dealt with.
12. Recognition: it is important to recognize those who meet their goals or perform
outstanding acts with a prize or award, although this should not be in financial form. The act of
recognition itself is what is important.
13. Quality councils: the quality professionals and team leaders should meet regularly to
discuss improvements and upgrades to the quality program.
14. Doing it over again: during the course of a typical program lasting from 12 to 18 months,
turnover and change will dissipate much of the educational process. It is important to set up a
new team of representatives and begin the program again from the beginning, starting with
zero defects day. This "starting over again" helps quality to become ingrained in the
organization.
CROSBY‘S four absolutes of quality:
1. The definition of quality is conformance to requirements.
2. The system of quality is prevention.
3. The performance standard is zero defects.
4. The measurement of quality is the price of nonconformance.

12. EXPLAIN THE BARRIERS FOR IMPLEMENTING TQM. OR EXPLAIN ABOUT THE OBSTACLES
TO IMPLEMENTATION OF TQM [N/D’13,14,15, A/M-19]
There are many barriers for implementing TQM. These include:
1. Lack of commitment
The top management only provides lip service and no substantial
management commitment is evidenced. The obsessive commitment should not only be
demonstrated by the management but the same should be effectively communicated to all
employees.
2. Inability to change organizational culture
Changing an organization’s culture is very difficult and long drawn process.
Individuals resist change; they become accustomed to doing a particular process and it
becomes the preferred way. Organizations that spend more time planning for the cultural
aspects of implementing a TQM program will improve their chance is success.
3. Improper planning
All constituents of the organization must be involved in the development of
the implementation plan and any modifications that occur as the plan evolves. Emphasis
should be on comprehensive and complete planning covering all factors and including
customer requirements.
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4. Lack of continuous training and education


Training and education should be an ongoing process covering everyone in
the organization. Training needs should be determined and structured training should be
imparted to achieve these needs.
5. Incompatible organizational Structure
Difference between departments and individuals can create implementation
problems. Restructuring to make the organization more responsive to customer needs may
be needed.
6. Ineffective Measurement techniques
Key characteristics of the organization should be measured so that effective
decisions can be made. In order to improve a process one needs to measure the effect of
improvement ideas. Access to data and quick retrieval is necessary for effective processes.
7. Inadequate attention to internal and external customers
Organizations need to understand the changing needs and expectations of
their customers – both external and internal. Effective feedback mechanisms that provide
data for decision making are necessary for this understanding.
8. Inadequate use of empowerment and teamwork
Individuals should be trained and empowered to make decisions that affect
the efficiency of their processes or the satisfaction of their customers.
9. Failure to continually improve
It is tempting to sit back and rest on your laurels. However, a lack of
continuous improvement of the processes, product and or service will even leave the
industry leader to slip and fail.

13. EXPLAIN THE ISSUES RELATED TO CUSTOMER'S COMPLAINTS AND RETENTION. (OR)
EXPLAIN THE COMMON CUSTOMER FEEDBACK COLLECTION TOOLS [M/J’15,17]
Customer complaints (Customer feedback):-
Why is Customer feedback or customer complaint necessary?
Customer feedback or customer complaint is required:
 To discover customer dissatisfaction,
 To identify customer’s needs,
 To discover relative priorities of quality,
 To compare performance with the competition, and
 To determine opportunities, for improvement.
Tools Used for collecting customer complaints are:
1. Comment card: it is a card normally attached to the warranty card, issued with the
product at the time of sale.
2. Customer questionnaire: It includes:
a. Surveys through mail, or
b. Surveys through E-Mail, or
c. Surveys through telephone.
3. Focus group: It includes customer meetings, word associations, discussions,
relaxation techniques, etc…
4. Toll-free telephone numbers,
5. Customer visits:i.e., visits to a customer’s place
6. Report cards,
7. The Internet and computer: It includes newsgroups, electronic bulletin boards,
mailing lists, etc…
8. Employee feedback
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Customer Complaints Flow Chart

The above flow chart shows the customer complaint and feedback system and is explained as
follows…
1. Complaints can be collected from all sources viz., letters, phone calls, meetings and verbal
inputs.
2. Data should be collected via a Customer Complaint and Feedback from the formal Corrective
Action Request (CAR) form may be used.
3. Complaints must be resolved as quickly as possible and customer must be contracted and
informed.
4. All customers should be given a response within 15 days. The response may be a simple
‘thank you’ or a solution for a complaint.
5. All the local issues should be resolved locally, preferably on the complaint site.
6. Issues beyond the control of the local entity must be resolved at the central coordinator or
analyst level that will further analyze the issue and propose a solution.
7. On a regular basis, data must be analyzed and systematic issues must be identified, resolve
and eliminated.
8. Performance measures should be identified and monitored.
9. There must be a regular promotion and facilitation system for conduct nurturing of
complaints.
Thus the customer complaints and feedback system is must for any organization to be successful.
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CUSTOMER RETENTION:
 Customer retention is the process of retaining the existing customers. It is obvious that
customer retention is more powerful and effective than customer satisfaction.
 Customer care can be defined as every activity which occurs within an organization that
ensures that a customer is not only satisfied but also retained.
 Customer retention represents the activities that produce the necessary customer
satisfaction that creates customer loyalty.

14. EXPLAIN THE ELEMENTS OF CUSTOMER SERVICE.


Organization
1. Identify each segment – where the organization needs to concentrate on quality
2. Write down requirement – Proper documentation of quality policy in the form of a
handbook
3. Communicate requirements – Inform its importance to all levels in the organization
4. Organize process – create a systematic process as it is ongoing and never ending process
5. Organize physical spaces – aesthetics, atmosphere, room space, recreation, wifi etc
Customer Care
1. Meet the customer's expectation – treat all customers alike, respond quickly
2. Get the customer‘s point of view – think in the point of view of a customer
3. Deliver what is promised – keep up promise at any cost
4. Make the customer feel valued – customer must feel that due respect and importance is given
to him 5. Respond to all complaints – minimize complaints and eradicate similar and repeated
complaints
6. Over-respond to customer – make him feel he is cloud nine
7. Provide clean and comfortable reception area – cleanliness, spacious, dress code, weather etc
Communication
All forms of communication written, verbal, advt, web site must prove quality
1. Optimize trade off between time and personal attention
2. Minimize the number of contact points – channels and levels
3. Provide pleasant and knowledgeable enthusiastic employees
4. Write document in customer friendly language – simple and point blank
Front-line people
The people who have first and direct contact or interaction with the customer
1. Hire people who like people – train groom them
2. Challenge them to develop better methods – small changes in packing, billing etc
3. Give them authority to solve problems – give discounts, free gifts etc
4. Serve them as internal customers
5. Make sure they are adequately trained – written and oral communication, body language etc
6. Recognize and reward performance - Nordstorm example obsess with the customer.
Leadership
1. Lead by example – spend time with all level, dealers and suppliers. Like having food , using co
product
2. Listen to front line people
3. Strive for continuous process improvement
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15. EXPLAIN ABOUT CUSTOMER RETENTION (OR) ILLUSTRATE THE VARIOUS STEPS
INVOLVED IN CUSTOMER SATISFACTION PROCESS. [N/D’16]
 It means “retaining the customer” to support the business. It is more powerful and effective
than customer satisfaction.
 For Customer Retention, we need to have both “Customer satisfaction & Customer loyalty”.
The following steps are important for customer retention.
1. Top management commitment to the customer satisfaction.
2. Identify and understand the customers what they like and dislike about the organization.
3. Develop standards of quality service and performance.
4. Recruit, train and reward good staff.
5. Always stay in touch with customer.
6. Work towards continuous improvement of customer service and customer retention.
7. Reward service accomplishments by the front-line staff.
8. Customer Retention moves customer satisfaction to the next level by determining what is
truly important to the customers.
9. Customer satisfaction is the connection between customer satisfaction and bottom line.

16. WHY TO MEASURE QUALITY COSTS? CLASSIFY THE VARIOUS TYPES OF QUALITY COSTS
AND GIVE EXAMPLES. (OR) WHAT IS QUALITY COST? EXPLAIN THE DIFFERENT CATEGORIES
AND ELEMENTS OF COQ. HOW IT IS USEFUL AS A PERFORMANCE MEASURE?
[N/D’17,A/M’18]
Concept:
Quality-related costs are costs incurred by an organisation to ensure that the
products/services it provides conform to customer requirements. In other words, quality
costs are the sum of money spent on ensuring that customer requirements are met and also
the costs wasted through failing to achieve the desired level of quality. Thus quality cost is
the cost of not meeting the customer's requirement. i.e., the cost of doing things wrong.
Definition:
Quality costs are defined as those costs associated with the non achievement of
product/service quality as defined by the requirements established by the organisation and
its contracts with customers and society.
In simple words, quality cost is the cost of poor products or services.
Measurement of QUALITY COSTS
Through the measurement of quality costs, management can be alerted to the potential
impact of poor quality on the financial performance of the company. Moreover, management can
also determine the types of activities that are more beneficial in reducing quality costs. Dale and
Plunkett (1991) reported that, despite the great quantity of literature discussing quality cost, there
was no uniform view of what quality cost means and how it can be measured. Many researchers
proposed various approaches to measuring and classifying quality costs.
Elements of Quality Costs
The American Society for Quality Control (ASQC) divides quality costs into four categories, .as
shown below.
• Preventive cost category
• Appraisal cost category
•Internal failure cost category
• External failure cost category
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Typical cost bases


• Labor
• Production
• Unit
• Sales

These cost categories allow the use of quality cost data for a variety 0f purposes. Quality costs can
be used for measuring progress, analyzing problems, or budgeting.
By analyzing the relative size of the cost categories, the company can determine if its resources are
properly allocated.
1. Costs of Prevention
 Prevention costs are the costs that occur when a company is performing activities
designed to prevent quality problems from arising in products or services.
 Prevention costs relate to efforts to prevent failures .
Costs of prevention include:
1. Cost of quality planning: It includes the costs associated with creating an overall
quality plan, the cost of market research and product development, inspection plan,
reliability plan, etc.
2. Cost of documenting: It includes cost of preparation of required documents such
as manuals, procedures, policies, etc.
3. Process control cost: It is the cost associated with implementing the quality plans
and procedures to achieve the stated purpose.
4. Cost of training: It includes the costs of conducting training programmes.
5. Costs associated with preventing recurring defects: It is the engineering,
technical and supervisory costs for preventing the reoccurring defects.
6. Costs of investigation, analysis and correction of causes of defects by quality
control and engineering departments.
7. Cost of quality awareness programme.
2. Costs of Appraisal
 Appraisal costs are associated with measuring, evaluating, or auditing products or
services to ensure that they conform to specifications or requirements.
 Appraisal costs relate to testing, execution, and examination to assess whether Specified
quality is being maintained.
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Costs of appraisal include:


1. Cost of receiving test and inspection.
2. Cost of laboratory acceptance testing.
3. Cost of installation testing.
4. Cost of installation and commissioning.
5. Cost of maintenance and calibration of testing ~ inspecting equipments.
6. Cost of test equipment depreciation.
7. Cost of analysis of reporting of tests and inspection results.
8. Cost of line quality engineering.
9. Cost of vendor rejects.
3. Costs of Internal Failure
 Internal failure costs arise due to internal failures.
 These costs are linked to correcting mistakes before delivery of the product, such as: scrap,
rework, remaking, reinspection, retesting, and sales discounts for inferior products.f
 In other words, internal failure costs are costs associated with product nonconformities (or
service failures) found before the product is shipped (or the service is provided) to the
customer.
Costs of internal failure include:
1. Cost associated' with scrap and rejects.
2. Cost of repair and rework.
3. Cost of design changes.
4. Cost of trouble-shooting or defect failure analysis.
5. Cost of reinspect ion and retesting.
6. Cost of sales discounts for inferior products.
7. Cost of downgrading.
8. Cost of downtime.
4. Costs of External Failure
 External failure costs arise from the rejection of the products/services by the customers due
to poor quality.
 In other words, the external failure costs are tests that occur when nonconforming product
or service reaches the customer.
 These costs are associated with the adjustments of malfunctions after delivery of the
product, such as: repair costs, travel and lodging expenses, replacement costs, stock spare
parts, lost goodwill of customer, guarantee and warranty costs, and dispatchment costs.
Costs of external failure include:
1. Cost of processing complaints from customers.
2. Cost of commissioning failures.
3. Cost of servicing or replacing the defective items.
4. Cost of guarantee and warranty claims.
5. Cost of lost goodwill of customer.
6. Cost of product reliability compensation (voluntary or legal).
7. Cost of loss of sales.
8. Cost of concessions offered to customers (due to substandard products being accepted by
customers).

DRM Software Review