Chapter 2: Quality

Defining Quality

• Definition of quality is dependent on the people defining it

• There is no single, universal definition of quality

Defining Quality – 5 common definitions include:

Conformance to specifications

• Does product/service meet targets and tolerances define by designers?

Fitness for use

• Evaluates performance for intended use

Value for price paid

• Evaluation of usefulness vs. price paid

Support services

• Quality of support after sale

Psychological

• Ambiance, prestige, friendly staff

Manufacturing Quality

Manufacturing quality focuses on tangible product features

– Conformance, performance, reliability, features

Service Quality

Service organizations produce intangible products that must be experienced

– Quality often defined by perceptional factors like courtesy, friendliness, promptness, waiting time,
consistency

Quality then is simply meeting the customer requirements.

Defining TQM

-TQM is integration of all functions and processes within an organization in order to achieve continuous
improvement of the quality of goods and services.

-The goal is customer satisfaction.

-It means thinking about quality in terms of all functions of the enterprise and is a start-to-finish process
that integrates interrelated functions at all levels.

-The watchword for TQM is “continuous improvement”.

Cost of Quality

 Quality affects all aspects of the organization

 Quality has dramatic cost implications of:
 – Quality control costs

• Prevention costs

• Appraisal costs

– Quality failure costs

• Internal failure costs

• External failure costs

Prevention Costs Costs of preparing and implementing a quality plan

Appraisal Costs Costs of testing, evaluating, and inspecting quality
Internal failure costs Costs of scrap, rework, and material losses
External failure costs Costs of failure at customer site, including returns, repairs, and recalls

Early detection/prevention is less costly.

Evolution of TQM

Chapter 3: TQM Philosophies

Leaders in the Quality Revolution

• W. Edwards Deming

• Joseph M. Juran

• Philip B. Crosby

• Armand V. Feigenbaum

• Kaoru Ishikawa

• Genichi Taguchi

Edward Deming

Quality is “uniformity and dependability”

 Focus on SPC and statistical tools

 “14 Points” for management
 PDCA method
 1900-1993
 Ph.D.’s in Physics and Statistics
 Western Electric—Statistical techniques
 DEMING PRIZE started by Union of Scientists and Engineers in Japan
 In 1980, NBC broadcast a TV program, and it led to his becoming an overnight celebrity
 “out of the crisis” ---book

“I probably won’t even be remembered.”

“Well, maybe… as someone who spent his life trying to keep America from committing suicide.”

Deming Chain Reaction

 Improve quality
 Costs decrease
 Productivity improves
 Increase market share with better quality and lower prices
 Stay in business
 Provide jobs and more jobs

Deming’s 14 Points

1. Management commitment
2. Learn the new philosophy.
3. Understand inspection.
4. End price tag decision.
5. Improve constantly.
6. Institute training.
7. Institute leadership.
8. Drive out fear
9. Optimize team efforts.
10. Eliminate exhortations.
11. Eliminate quotas and M.B.O.
12. Remove barriers to pride in workmanship.
13. Institute education.
14. Act

Deming’s System of Profound Knowledge

Appreciation for a System

 Most organizational processes are cross-functional

 Parts of a system must work together
 Every system must have a purpose
 Management must optimize the system as a whole

Variation

 Chief culprit of poor quality

 Many sources of uncontrollable variation exist in any process
 Excessive variation results in product failures, unhappy customers, and unnecessary costs

Theory of Knowledge

 Management decisions should be driven by facts, data and theories.

 Experience alone does not establish a theory, it only describes.
 But, good theories supported by data can establish a cause-and-effect relationship that can be used for
prediction.

Psychology
  People are motivated intrinsically and extrinsically
 No leader can manage well without understanding these factors

Joseph Juran

Quality is “fitness for use”

 Pareto Principle
 Cost of Quality
 General management approach as well as statistics

Juran’s Quality Trilogy

 1951----” QUALITY CONTROL HANDBOOK”

 Quality planning
 Quality control
 Quality improvement
 Employees at different levels of an organization speak in different “languages”
 Quality as “fitness for use”

Fitness for use

 Quality of design: market research, product concept, and design specifications

 Quality of conformance: technology, manpower and management
 Availability: reliability, maintainability, logistical support
 Field service quality: promptness, competence

Joseph M. Juran’s 10 steps to quality improvement

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.

Philip B. Crosby

 Known for concepts of “Quality is free” and “Zero Defects”

 His quality improvement is based on his absolutes of quality

Quality is free . . .:

“Quality is free. It’s not a gift, but it is free. What costs money are the unquality things -- all the actions
that involve not doing jobs right the first time.”

Absolutes of Quality Management:

 Quality means conformance to requirements

 Problems are functional in nature
 There is no optimum level of defects
 Cost of quality is the only useful measurement
 Zero defects are the only performance standard
o Definition – conformance to requirements.
o System – prevention.
o Performance standard – zero defects.
o Measurement – price of non-conformance

Basic Elements of Improvement

 Determination
 Education
 Implementation

Comparison of American TQM Gurus

A.V. Feigenbaum

”TOTAL QUALITY CONTROL” in his book published in 1951

---Japanese used this to set up “Company wide quality control”

Three Steps to Quality

1. Quality Leadership, with a strong focus on planning

2. Modern Quality Technology, involving the entire work force
3. Organizational Commitment, supported by continuous training and motivation

Kaoru Ishikawa

 quality guru in Japan

 Quality Circles
 Tools such as Fishbone Charts etc.
 Instrumental in developing Japanese quality strategy
 Influenced participative approaches involving all workers
 Advocated the use of simple visual tools and statistical techniques

Genichi Taguchi
Pioneered a new perspective on quality based on the economic value of being on target and reducing
variation and dispelling the traditional vision

TQM Philosophy

 TQM Focuses on identifying quality problem root causes

 Encompasses the entire organization
 Involves the technical as well as people
 Relies on basic concepts of:
– Customer focus
– Continuous improvement
– Employee empowerment
– Use of quality tools
– Product design

Focus on Customer

 Identify and meet customer needs

 Stay tuned to changing needs, e.g. fashion styles

Continuous Improvement

 Continuous learning and problem solving, e.g. Kaizen, 6 sigma

 Plan-Do-Study-Act (PDSA)
– Kaizen describes the ongoing process of unending improvement
– TQM and zero defects also used to describe continuous improvement

Six Sigma DMAIC Approach

1. Defines the project’s purpose, scope, and outputs, identifies the required process information
keeping in mind the customer’s definition of quality

2. Measures the process and collects data

3. Analyzes the data ensuring repeatability and reproducibility

4. Improves by modifying or redesigning existing processes and procedures

5. Controls the new process to make sure performance levels are maintained

Six Sigma

 Two meanings
 Statistical definition of a process that is 99.9997% capable, 3.4 defects per million opportunities
(DPMO)
 A program designed to reduce defects, lower costs, save time, and improve customer satisfaction
 A comprehensive system for achieving and sustaining business success

Plan-Do-Study-Act Cycle (PDSA)

 Also called the Deming Wheel after originator

 Circular, never-ending problem-solving process

Seven Tools of Quality Control

 Tools typically taught to problem solving teams

Quality Function Deployment

 Used to translate customer preferences to design

PDSA Details

 Plan
– Evaluate current process
– Collect procedures, data, identify problems
– Develop an improvement plan, performance objectives

 Do

– Implement the plan – trial basis

 Study

– Collect data and evaluate against objectives

 Act

– Communicate the results from trial

– If successful, implement new process

PDSA Details

 Cycle is repeated

– After act phase, start planning and repeat process

Employee Empowerment

 Getting employees involved in product and process improvements

 85% of quality problems are due to process and material
 Techniques
 Build communication networks that include employees
 Develop open, supportive supervisors
 Move responsibility to employees
 Build a high-morale organization
 Create formal team structures

Use of Quality Tools

 Ongoing training on analysis, assessment, and correction, & implementation tools

 Studying practices at “best in class” companies

Product Design - Quality Function Deployment

 Critical to ensure product design meets customer expectations

 Useful tool for translating customer specifications into technical requirements is Quality Function
Deployment (QFD)

 QFD encompasses

– Customer requirements
– Competitive evaluation
– Product characteristics
– Relationship matrix
– Trade-off matrix
 – Setting Targets

Product Design - Quality Function Deployment

Process used to ensure that the product meets customer specifications

Chapter 4: TQM Models and Frameworks

• Malcolm Baldrige National Quality Award (MBNQA)

• The Deming Prize

• ISO 9000 Certification

• ISO 14000 Standards

Malcolm Baldrige National Quality Award (MBNQA)

 Established in 1988 by the U.S. government

 Designed to promote TQM practices

 Recent winners include

 Lockheed Martin Missiles and Fire Control, MESA Products Inc., North Mississippi Health
Services, City of Irving, Concordia Publishing House, Henry Ford Health System, MEDRAD,
Nestlé Purina PetCare Co., Montgomery County Public Schools

Baldrige Criteria

Applicants are evaluated on

CATEGORIES POINTS

Leadership 120

Strategic Planning 85

Customer Focus 85

Measurement, Analysis, and

90
Knowledge Management

Workforce Focus 85

Operations Focus 85

Results 450
The Baldrige Framework –A Systems Perspective

1. Leadership (120 pts.)

Addresses Senior Leaders’ Roles, Governance, and Citizenship

1.1 Organizational Leadership (70 pts.)

1.2 Social Responsibility (50 pts.)

2. Strategic Planning (85 pts.)

Addresses Strategic and Action Planning and Deployment of Plans

2.1 Strategy Development (40 pts.)

2.2 Strategy Deployment (45 pts.)

3. Customer and Market Focus (85 pts.)

Addresses How an Organization Seeks Knowledge, Satisfaction, and Loyalty of Customers

3.1 Customer and Market Knowledge (40 pts.)

3.2 Customer Relationships and Satisfaction (45 pts.)

4. Measurement, Analysis, and Knowledge Management (90 pts.)

Addresses Analysis and Management of Data, Information, and Knowledge Assets

4.1 Measurement and Analysis of Organizational Performance (45 pts.)

4.2 Information and Knowledge Management (45 pts.)

5. Human Resource Focus (85 pts.)

Addresses Key Human Resource Practices

5.1 Work Systems (35 pts.)

5.2 Employee Learning and Motivation (25 pts.)

5.3 Employee Well-Being and Satisfaction (25 pts.)

6. Process Management (85 pts.)

Addresses Key Work Processes and Process Management

6.1 Value Creation Processes (50 pts.)

6.2 Support Processes (35 pts.)

7. Business Results (450 pts.)

Addresses Progress on Results—Including

Levels, Trends, and Comparative Data

7.1 Customer-Focused Results (75 pts.)

7.2 Product and Service Results (75 pts.)

7.3 Financial and Market Results (75 pts.)

7.4 Human Resource Results (75 pts.)

7.5 Organizational Effectiveness Results (75 pts.)

7.6 Governance and Social Responsibility Results (75 pts.)

The Deming Prize

• Given by the Union of Japanese Scientists and Engineers since 1951

• Named after W. Edwards Deming who worked to improve Japanese quality after WWII

• Not open to foreign companies until 1984

• Florida P & L was first US company winner

• The purpose of the Deming Prize was to recognize those who excelled in quality control and as a
way of driving quality control. It was also established to thank Dr. Deming for his
accomplishments and impact in the Japanese industry.

Deming Prize Concentrates on:

• Policy

• Organization and operations

• Collection and use of information

• Analysis

• Planning for future

• Education and training

• Quality assurance

• Quality effects

• Standardization

• Control

ISO Standards
 ISO 9000 Standards:

– Certification developed by International Organization for Standardization

– Set of internationally recognized quality standards

– Companies are periodically audited & certified

– ISO 9000:2000 QMS – Fundamentals and Standards

– ISO 9001:2000 QMS – Requirements

– ISO 9004:2000 QMS - Guidelines for Performance

– More than 40,000 companies have been certified

• ISO 14000:

– Focuses on a company’s environmental responsibility

ISO 9000 Characteristics

• Leadership demonstrates commitment to customer requirements.

• Policy and measurable quality objectives are set and renewed.

• Processes are identified, analyzed, and managed.

• Customer satisfaction is measured.

• Data are collected, analyzed, and used.

• System effectiveness is continually improved.

ISO Process Approach

• Company must identify and manage numerous linked activities.

• An activity uses resources, is managed in order to enable the transformation of inputs into
outputs.
The ISO 9000 family

• ISO 9001 is the standard that gives the requirements for a quality management system.

• ISO 9001:2008 is the latest, improved version.

• It is the only standard in the ISO 9000 family that can be used for certification.

• There are 16 other standards in the family that can help an organization on specific aspects
such as performance improvement, auditing, training…

The ISO 14000 family

• ISO 14001 is the standard that gives the requirements for an environmental management
system.

• ISO 14001:2004 is the latest, improved version.

• It is the only standard in the ISO 14000 family that can be used for certification.

• The ISO 14000 family includes 21 other standards that can help an organization specific
aspects such as auditing, environmental labelling, life cycle analysis…

Benefits of ISO 9001 and ISO 14001

• International, expert consensus on state-of-the-art practices for quality and environmental

management.

• Common language for dealing with customers and suppliers worldwide in B2B.

• Increase efficiency and effectiveness.

• Model for continual improvement.

• Model for satisfying customers and other stakeholders.

• Build quality into products and services from design onwards.

• Address environmental concerns of customers and public, and comply with government
regulations.

• Integrate with global economy.

• Sustainable business

• Unifying base for industry sectors

• Qualify suppliers for global supply chains

• Technical support for regulations

• Transfer of good practice to developing countries

• Tools for new economic players

• Regional integration

• Facilitate rise of services

What is an environmental management system?

 An environmental management system helps organizations identify, manage, monitor and control their
environmental issues in a holistic manner.
 Like other ISO management systems, it uses a High-Level Structure. This means it can be integrated
easily into any existing ISO management system.
 It also includes the need for continual improvement of an organization’s systems and approach to
environmental concerns.

Chapter 5: TQM Tool

 Pareto Chart
 Flowchart (Process Diagram)

Tools for Identifying Problems

 Histogram
 Statistical Process Control Chart

1. Check Sheet

An organized method of recording data

Simple data check-off sheet designed to identify type of quality problems at each work station; per shift,
per machine, per operator

2. Scatter Diagram

• A graph that shows how two variables are related to one another

• Data can be used in a regression analysis to establish equation for the relationship
3. Cause-and-Effect Diagram

• A tool that identifies process elements (causes) that might affect an outcome

• Called Fishbone diagram

4. Pareto Chart

• Technique that displays the degree of importance for each element

• Named after the 19th century Italian economist; often called the 80-20 Rule

• Principle is that quality problems are the result of only a few problems e.g. 80% of the problems
caused by 20% of causes

5. Flowchart (Process Diagram)

A chart

that describes the steps in a process

Ex: MRI Flowchart

1. Physician schedules MRI

2. Patient taken to MRI

3. Patient signs in
 4. Patient is prepped

5. Technician carries out MRI

6. Technician inspects film

7. If unsatisfactory, repeat

8. Patient taken back to room

9. MRI read by radiologist

10. MRI report transferred to physician

11. Patient and physician discuss

6. Histogram

A distribution showing the frequency of occurrences of a variable

7. Statistical Process Control Chart

• A chart with time on the horizontal axis to plot values of a statistic

• The UCL and LCL are calculated limits used to show when process is in or out of control