By: Gerline Mae Ocampo Pableo

TOPIC: Management of quality

Part 1: Introduction

“Quality management” ensures superior quality products and services. Quality of a

product can be measured in terms of performance, reliability and durability. Quality is

a crucial parameter which differentiates an organization from its competitors. Quality

management tools ensure changes in the systems and processes which eventually

result in superior quality products and services. Quality management methods such

as Total Quality management or Six Sigma have a common goal - to deliver a high

quality product. Quality management is essential to create superior quality products

which not only meet but also exceed customer satisfaction. Customers need to be

satisfied with the brand. Business marketers are successful only when they

emphasize on quality rather than quantity. Quality products ensure that they survive

the cut throat competition with a smile.

Part 2: Summary of the topics/Topics Digest

Quality is the ability of a product or service to consistently meet or exceed customer

requirements or expectations based on Frederick Winslow Taylor, Father of

Scientific Management. He gave new emphasis to quality by including product

inspection and gauging in his list of fundamental areas. Around World War II, the US

government began to require vendors to use statistical quality control procedures.

Managers must have insights on various aspects of quality including defining quality

in operational terms, understanding the costs/benefits of quality, recognizing

consequences of poor quality, and recognizing the need for ethical behavior.

Defining quality is the degree of quality to which performance of a product/service

meets or exceeds customer expectations. The difference between performance and

expectations is of great interest because, if the difference is 0, expectations have

By: Gerline Mae Ocampo Pableo

been met, if the difference is negative, expectations have not been met, if the

difference is positive, expectations have been exceeded. There are nine dimensions

of product quality: performance, aesthetics, special features, conformance, reliability,

durability, perceived quality, serviceability, consistency. There are also dimensions of

service quality: convenience, reliability, responsiveness, time, assurance, courtesy,

tangibles, consistency, and expectations. The dimensions of product and service

quality establish a conceptual framework for thinking about quality. Measurable,

detailed information (ex. MPG) is needed to both design and produce high-quality

goods and services. The SERVQUAL model is a widely used tool for assessing

service quality; instrument is designed to obtain feedback on an organization's ability

to provide quality service to customers. This focuses on tangibles, reliability,

responsiveness, assurance, and empathy. The degree to which a product/service

successfully satisfies its intended purpose has four primary determinants: design,

how well the product/service conforms to design, ease of use and service after

delivery. Design involves decisions about the specific characteristics of a

product/service such as size, shape, and location. Quality of design is the intention

of designers to include/exclude certain features in a product/service. Quality of

conformance is the degree to which goods/services conform to the intent of

designers. One important key to quality is reducing the variability in process outputs.

The determination of quality doesn’t stop once a product/service has been

sold/delivered. Certain parts of an organization have key areas of responsibility for

quality: top management (ultimately responsible), design (quality begins with

design), procurement (responsible for obtaining goods/services that will add to

quality), production/operations (responsible for ensuring that processes yield quality

goods/services), quality assurance (responsible for gathering/analyzing data to solve

By: Gerline Mae Ocampo Pableo

problems), packaging/shipping (goods aren’t damaged, etc), marketing/sales

(determining customer needs), and customer service (communicating quality

concerns). The benefits of good quality are: enhanced reputation, ability to command

premium prices, increased market share, customer loyalty, lower liability costs, fewer

production issues, fewer complaints, higher productivity, lower costs, higher profits.

There are also consequences of poor quality: loss of business, liability

(damages/injuries), productivity, and costs. Appraisal costs refers to the inspection,

testing, other activities intended to uncover defective products/services or to assure

there are none. Prevention costs attempt to prevent defects from occurring. Failure

costs are incurred by defective parts/products or by faulty services. This includes

internal failure discovered during the production process. External failures are those

costs that are discovered after delivery to the customer. All members of an

organization have an obligation to perform their duties in an ethical manner,

including maintaining quality standards. In the 80s and 90s, quality awards were

established to generate improvement in quality. The Baldridge award is named after

Malcolm Baldridge, the purpose of the award is to identidy and recognize role-model

organizations, establish criteria for evaluating improvement efforts, and disseminate

and share best practices. Applicants for the baldridge award are evaluated in 7 main

areas: leadership, strategy, customers, measurement/analysis/knowledge

management, workforce, operations, results. The Deming prize is coined after W.

Edwards Deming. The Japans award is given annually to a company that meets the

awards standards. The focus is on statistical quality control. The International

organization for standardization (ISO) promotes worldwide standards for the

improvement of quality, productivity, and operating efficiency through a series of

standards and guidelines. ISO increases the levels of quality and reliability,
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productivity, and safety, while making products and services affordable. ISO 9000

pertains to quality management, and concerns what an organization does to ensure

its products or services conform to its customers' requirements. ISO 14000 concerns

what an organization does to minimize harmful effects to the environment caused by

its operations. Achievement requires measuring customer perceptions of quality,

identifying problem areas, and correcting those problems. Less developed nations

have almost little or no awareness of modern quality practices, this poses an

important problem for companies that outsource. Total quality management (TQM) is

a quest for quality in an organization. The three key philosophies in this approach

includes: a never-ending push to improve (continuous improvement), involvement of

everyone in the organization and the goal of customer satisfaction. TQM expands

the traditional view of quality (looking only at the quality of the final product/service)

to looking at the quality of every aspect of the process that produces the product or

service. The approach to TQM includes: find out what customers want (internal AND

external customers), design a product/service that will meet/exceed what customers

want, design processes that facilitate doing the job right the first time, keep track of

results, extend concepts throughout the supply chain and top management must be

involved/committed. The term fail-safing means elements are incorporated in product

or service design that make it virtually impossible for an employee to do something

incorrectly. TQM is more of a culture than a one-time thing. The barriers to

implementing TQM are: lack of a companywide definition of quality, lack of a

strategic plan for change, lack of a customer focus, poor communication, lack of

employee empowerment, view of quality as a ‘quick fix’, emphasis on short-term,

internal politics, no motivation, lack of time, lack of leadership. The major criticisms

of TQM are: overzealous people may pursue TQM blindly, programs may not be
By: Gerline Mae Ocampo Pableo

meaningful, quality-related decisions may not be tied to market performance, there

are falsestarts/employee confusion/meaningless results, dramatic rather than

continuous improvement may be needed and quality efforts may not be tied to

results. The basic steps in the TQM problem-solving process are: define the problem

and establish an improvement goal, develop performance measures and collect

data, analyze the problem, generate potential solutions. choose a solution,

implement the solution and monitor the solution to see if it accomplishes the goal.

The Plan-do-study-act (PDSA) cycle is a conceptual basis for problem-solving

activities. The four basic steps are plan, do, study, and act. Process improvement is

a systematic approach to improving a process. It involves

documentation/measurement/analysis for the purpose of improving the functioning of

a process. The six sigma has several meanings; statistically, it means having no

more than 3.4 defects per million opportunities in any process/product/service.

Conceptually this refers to a program designed to reduce the occurrence of defects

to achieve lower costs and improved customer satisfaction. It is important for six

sigma projects to be aligned with organizational strategy. The seven basic quality

tools are the: flowchart, check sheet, histogram, pareto chart, scatter diagram,

control chart and cause-and-effect diagram. The flowchart is a visual representation

of a process. This can help managers identify possible points in a process where

problems occur. The diamond shapes are the decision point and the rectangular

shapes are the procedures. The check sheet is a simple tool, frequently used for

problem identification. This provides a format that enables users to record and

organize data in a way that facilitates collection and analysis. This is useful in getting

a sense of the distribution of observed values. Pareto analysis is a technique for

focusing attention on the most important problem areas. The concept states that
By: Gerline Mae Ocampo Pableo

80% of the problems come from 20% of the items. This is basically a chart that just

arranges the data from highest to lowest frequency. The scatter diagram can be

useful in deciding if there is a correlation between the values of two variables. The

higher the correlation between the two variables, the less scatter in the points, the

points will tend to line up. The control chart can be used to monitor a process to see

if the process output is random. It can help detect the presence of correctable

causes of variation. Cause and effect diagram is a structured approach to the search

for possible causes of a problem. The run chart can be used to track the values of a

variable over time. Additional tools that are useful for problem solving/process

improvement are the: brainstorming, quality circles and benchmarking. Brainstorming

is a technique in which a group of people share thoughts and ideas on problems in a

relaxed atmosphere that encourages unrestrained, collective thinking. Quality circles

are circles that comprise a number of workers who get together periodically to

discuss ways of improving products and processes. Benchmarking is a process of

measuring an organization's performance on a key customer requirement against the

best in the industry, or against the best in any industry. There is a positive link

between quality and productivity, giving an additional incentive for achieving high

quality and being able to present that image to current and potential customers. Top

management needs to be visibly involved and needs to be supportive, both

financially and emotionally. Managers and workers need to be educated in the

concepts, tools, and procedures of quality.

Part 3: Recommendations

Customers would return to the organization only if they are satisfied with the

products and services. The key is to make sure the end-user is happy with the

product. Remember, a customer would be happy and satisfied only when the product
By: Gerline Mae Ocampo Pableo

meets his expectations and fulfills his needs. First, is understanding what the

customer expects from the company. Find out what actually his need is. Collect

relevant data which would give more insight into customer’s needs and demands.

Customer feedback should be collected on a regular basis and carefully monitored.

Quality management ensures high quality products and services by eliminating

defects and incorporating continuous changes and improvements in the system.

High quality products in turn lead to loyal and satisfied customers who bring ten new

customers along with them. Do not forget that the company saves some money by

ignoring quality management processes but ultimately loses out on major customers,

thus incurring huge losses. Quality management ensures that products are delivered

as per promises made to the customers through various modes of promotions.

Quality management tools help an organization to design and create a product which

the customer actually wants and desires. Quality Management ensures increased

revenues and higher productivity for the organization. Remember, if an organization

is earning, employees are also earning. Employees are frustrated only when their

salaries or other payments are not released on time. Yes, money is a strong

motivating factor. Salaries are released on time only when there is free cash flow.

Implementing Quality management tools ensure high customer loyalty, thus better

business, increased cash flow, satisfied employees, healthy workplace and so on.

Quality management processes make the organization a better place to work.

Remove unnecessary processes which merely waste employee’s time and do not

contribute much to the organization’s productivity. Quality management enables

employees to deliver more work in less time. Quality management helps

organizations to reduce waste and inventory. It enables employees to work closely

with suppliers and incorporate “Just in Time” Philosophy. Quality management

By: Gerline Mae Ocampo Pableo

ensures close coordination between employees of an organization. It inculcates a

strong feeling of teamwork in the employees.

Part 4: Conclusions

The bottomline of this chapter is that quality management in businesses is vital to

ensure consistency in its processes, as well as in its products and services. In

business, customer satisfaction is key. As a customer’s main concern is the quality

of the products or services they purchase, the supplier’s main goal should always be

to ensure that what they produce is of consistent and fine quality.