Quality Management

by
Dr. Harpreet Singh Bedi
Professor, Mittal School of Busienss, LPU
Mb. 9855267392; Email: harpreet.15604@lpu.co.in
 Quality Management
What does the term quality mean?
Quality is the ability of a product or service to consistently
meet or exceed customer expectations.
 Defining Quality

The totality of features and characteristics of a

product or service that bears on its ability to
satisfy stated or implied needs
American Society for Quality

Quality is consistent conformance to customers’ expectations.

 What is Quality?
https://www.youtube.com/watch?v=FWkXNN1Q4Cw
 Different Views

 User-based – better performance,

more features
 Manufacturing-based –
conformance to standards,
making it right the first time
 Implications of Quality

1. Company reputation
 Perception of new products
 Employment practices
 Supplier relations
2. Product liability
 Reduce risk
3. Global implications
 Improved ability to compete
Key Dimensions of Quality
 Dimensions of Quality

• Performance - main characteristics of the

product/service
• Aesthetics - appearance, feel, smell, taste
• Special Features - extra characteristics
• Conformance - how well product/service
conforms to customer’s expectations
• Reliability - consistency of performance
 Dimensions of Quality (Cont’d)

• Durability - useful life of the product/service

• Perceived Quality - indirect evaluation of
quality (e.g. reputation)
• Serviceability - service after sale
 Service Quality

• Convenience
• Reliability
• Responsiveness
• Time
• Assurance
• Courtesy
• Tangibles
 Examples of Service Quality
Dimension Examples
1. Convenience Was the service center conveniently located?

2. Reliability Was the problem fixed?

3. Responsiveness Were customer service personnel willing and able

to answer questions?
4. Time How long did the customer wait?

5. Assurance Did the customer service personnel seem

knowledgeable about the repair?
6. Courtesy Were customer service personnel and the cashier
friendly and courteous?
7. Tangibles Were the facilities clean, personnel neat?

9-11
 Challenges with Service Quality

• Customer expectations often

change
• Different customers have different
expectations
• Customer participation can affect
perception of quality
Determinants of Quality

Ease of
Design
use

Conforms
to design Service
 The Consequences of Poor Quality
• Loss of business
• Liability
• Productivity
• Costs
 Responsibility for Quality

• Top management
• Design
• Procurement
• Production/operations
• Quality assurance
• Packaging and shipping
• Marketing and sales
• Customer service
 Costs of Quality

Appraisal Costs

External Failure Costs of

Costs Prevention Costs
Quality

Internal Failure
Costs
 Costs of Quality
• Failure Costs - costs incurred by defective
parts/products or faulty services.
• Internal Failure Costs
– Costs incurred to fix problems that are detected
before the product/service is delivered to the
customer.
• External Failure Costs
– All costs incurred to fix problems that are detected
after the product/service is delivered to the
customer.
 Costs of Quality

• Appraisal Costs
– Costs of activities designed to ensure quality or
uncover defects
• Prevention Costs
– All TQ training, TQ planning, customer
assessment, process control, and quality
improvement costs to prevent defects from
occurring
 Quality Control &Assurance
Quality control-
1. Establishment of standard
2. Measure the actual quality
3. Comparison of actual with set standard
4. Finding out deviations
5. Taking corrective actions

Quality Assurance -Emphasis on finding and correcting

defects before reaching market & to minimize the
chances that output will be sub-standard
 Phases of Quality Assurance

Inspection and
Inspection of lots corrective Quality built
before/after action during into the
production production process

Acceptance Process Continuous

sampling control improvement

The least The most

progressive progressive
 Acceptance sampling
Method of accepting & rejecting a lot on the basis of a sample.

Advantages-
1. Save of time & money
2. Less staff required
3. Problem of inspection fatigue is eliminated
4. Results in quick inspection

Disadvantages-
1. Risk of making wrong inference about the quality of lot called
producer’s risk( go error) or consumer’s risk( drop error) may be
there.
 Inspection
It is the process of examining an object for checking it
for verification of quality & quantity in any of its
features.
In simple words , it means sorting out good products
from bad products.
Objectives –
1. To safeguard the quality of finished products
2. To locate the defective items
3. To reduce the risk of rejection by consumer
4. To detect the sources of weakness.
 Inspection

• How Much/How Often

• Where/When
• Centralized vs. On-site

Inputs Transformation Outputs

Acceptance Process Acceptance

sampling control sampling
Cost Inspection Costs

Total Cost
Cost of
inspection

Cost of
passing
defectives
Optimal
Amount of Inspection
 Steps for inspection

1. Parameters to be inspected must be carefully established

2. Decision regarding when & where inspection must take place is to
be taken
3. Find out how many items are to be inspected i.e. 100% or sampling
inspection. here the level of accuracy desired is taken into
consideration.
4. Sampling scheme for selection of items from the lots must be
selected
5. Specification limits for acceptance & rejection of items must be
formulated
 Statistical Control

• Statistical Process Control:

Statistical evaluation of the output of a process
during production
• Quality of Conformance:
A product or service conforms to
specifications
 Statistical Quality Control
The deviation in quality of product can of 2 types:

Chance causes-like sudden changes in temperature

Assignable causes—like difference among workers performance,
difference among machines.

SQC is a tool to determine whether the variation is due to chance

causes or due to assignable causes. If process is found to be
statistical control then it indicates that the variation in quality is
due to chance causes, otherwise the presence of assignable causes
is detected & some corrective action is taken. control charts are the
basis of SQC.
Advantages- Ensures rapid & efficient inspection at min cost; It
minimizes waste ,bias & judgment errors
 Control Chart
• Control Chart
– Purpose: to monitor process output to see if it
is random
– A time ordered plot representative sample
statistics obtained from an on going process
(e.g. sample means)
– Upper and lower control limits define the
range of acceptable variation
 Control Chart

Abnormal variation Out of

due to assignable sources control
UCL

Mean
Normal variation
due to chance
LCL
Abnormal variation
due to assignable sources

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Sample number
 Control charts
It is a chronological recording of data in a graphic form. Each
measurement recorded is represented by a point on a
graph. Thus, control charts are graphic comparison of
process performance data to compute statistical control
limits drawn as limits lines on the chart.
Advantages-
1. It gives indication whether the process is in control or not
2. It ensures a particular level of quality
3. It indicates warning limits
4. It helps in setting of tolerance limits
 Control Charts for Variables
Variables generate data that are measured.

• Mean control charts

– Used to monitor the central tendency of a process.
– X bar charts

• Range control charts

– Used to monitor the process dispersion
– R charts
 Mean and Range Charts

(process mean is
shifting upward)
Sampling
Distribution

UCL

x-Chart Detects shift

LCL

UCL

Does not
R-chart
detect shift
LCL
 Mean and Range Charts

Sampling
Distribution (process variability is increasing)

UCL

x-Chart Does not

LCL
reveal increase

UCL

R-chart Reveals increase

LCL
 Control Chart for Attributes

• p-Chart - Control chart used to monitor the

proportion of defectives in a process
• c-Chart - Control chart used to monitor the
number of defects per unit

Attributes generate data that are counted.

 Use of p-Charts

• When observations can be placed into two

categories.
– Good or bad
– Pass or fail
– Operate or don’t operate
• When the data consists of multiple
samples of several observations each
 Use of c-Charts

• Use only when the number of occurrences per

unit of measure can be counted; non-
occurrences cannot be counted.
– Scratches, chips, dents, or errors per item
– Cracks or faults per unit of distance
– Breaks or Tears per unit of area
– Bacteria or pollutants per unit of volume
– Calls, complaints, failures per unit of time
 Test your understanding
A quality inspector took 5 samples, each with four observations, of the length
of time for glue to dry. The analyst computed the mean of each sample. All
values are in minutes. Use this information to obtain three sigma (i.e., z=3)
control limits for means of future times. It is known from previous experience
that the standard deviation of the process is .02 minute.
Sample 1 2 3 4 5
Mean 15.10 15.12 15.11 15.10 15.12
 Test your understanding
Twenty samples of n = 8 have been taken from a clearing
operation. The average sample range for was 0.026 minutes, and
the average mean was 3 minutes. Determine three sigma control
limits for the process. Where A2 is .37 at 8 no. of observations
 Test your understanding
Twenty five samples of n =10 have been taken from a milling
process. The average sample range was .03 centimeter.
Determine upper and lower control limits for the sample. Where
D3 = .22 for n = 10 and D4 = 1.78 for n = 10
 Test your understanding
A Quality control inspector of Future Retail has inspected billing
statement of 20 stores of Punjab for the month of Sep. 2019.
From each store he has inspected 100 bills. He finds some errors
and presented the data of error to head office. Headoffice wants
to see the effectiveness of billing at various stores of Punjab.
Kindly draw an appropriate control chart describing 99.74
percent of chance variation in the process and help headoffice in
this process.

Store No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Number
of
4 10 12 3 9 11 10 22 13 10 8 12 9 10 21 10 8 12 10 16
Defective
bill
 Test your understanding
A quality control inspector at Krishna Auto, Jalandhar has
inspected 17 cars in the month of Sep. 2019. He finds some
scratches on each of the car and presented the data of error
(scratches) to head office. You are requested to kindly determine
if nonrandom pattern exist in the series. Use Up/Down runs with
Z value of 2.
Sample No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

No. of
4 10 12 3 9 11 7 13 5 6 17 14 16 21 15 8 2
scratches
 Revision
Which of the following is a measure of how closely a
product or service meets the specifications?

• a) Quality of Conformance
• b) Continuous improvement
• c) Competitive benchmarking
• d) Statistical process control
 Revision
All of the following are dimensions of service quality
Except:

A. Assurance
B. Responsiveness
C. Intangibles
D. Reliability
 Revision
Which of the following would not normally be
considered as a ‘costs of quality’.

A. Training costs
B. Prevention costs
C. Warranty costs
D. Inspection cost
E. Rand D costs
 Revision
Detecting non-randomness in errors can be done
using:

A. MSEs
B. MAPs
C. Control Charts
D. Correlation Coefficients
E. Strategies
 Revision
What type of control chart is used to monitor the
number of defects per unit?

A. P-chart
B. R-chart
C. C-chart
D. X-bar chart
 Basic Quality Tools
• 5W2H (What, Why, Where, When, Who, How, How
much?)
• Flowcharts
• Check sheets
• Histograms
• Pareto Charts
• Scatter diagrams
• Control charts
• Cause-and-effect diagrams
• PDCA Cycle (Plan – Do- Check – Act)
Flow Chart
 Check Sheet
Billing Errors Monday
Wrong Account

Wrong Amount

A/R Errors

Wrong Account

Wrong Amount

9-52
Histogram
Scatter Diagram
 Pareto Analysis
80% of the
problems
may be

Number of defects
attributed to
20% of the
causes.

Off Smeared Missing Loose Other

center print label
9-55
 Control Chart

1020
UCL
1010
1000
990
980
LCL

970
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

9-56
 Cause-and-Effect Diagram

Methods Materials
Cause
Cause
Cause
Cause
Cause Cause
Environment Effect
Cause Cause

Cause Cause
Cause Cause

People Equipment

9-57
PDCA Cycle
 Tracking Improvements

UCL UCL
UCL

LCL
LCL
Additional improvements
LCL Process centered made to the process
Process not centered and stable
and not stable

9-59
 Methods for Generating Ideas

• Brainstorming
• Quality circles
• Interviewing
• Benchmarking

9-60
 Quality Circles

• Team approach
– List reduction
– Balance sheet
– Paired comparisons

9-61
 Benchmarking Process

• Identify a critical process that needs

improving
• Identify an organization that excels in this
process
• Contact that organization
• Analyze the data
• Improve the critical process

9-62
Total Quality Management (TQM)
 Total Quality Management

A philosophy that involves everyone in an

organization in a continual effort to improve quality
and achieve customer satisfaction.
T Q M
 The TQM Approach

1.Find out what the customer wants

2.Design a product or service that meets
or exceeds customer wants
3.Design processes that facilitates doing
the job right the first time
4.Keep track of results
5.Extend these concepts to suppliers
 Elements of TQM
• Continual improvement
• Competitive benchmarking
• Employee empowerment
• Team approach
• Decisions based on facts
• Knowledge of tools
• Supplier quality
• Quality at the source
• Suppliers
 Quiz
Which of the following terms best defines the nature
of Total Quality Management?
• a) An art
• b) A philosophy
• c) A science
• d) A social activity
 Quiz
Which of the following is NOT an element of TQM?

• a) Leadership
• b) Perceived quality
• c) Employee empowerment
• d) Customer focus
6 C’s of TQM
 Continuous Improvement

• Philosophy that seeks to make never-

ending improvements to the process of
converting inputs into outputs.
• Kaizen: Japanese
word for continuous
improvement.
 Quality at the Source

The philosophy of making

each worker responsible for
the quality of his or her work.
 Six Sigma Quality

• A philosophy and set of

methods companies use to
eliminate defects in their
products and processes
• Seeks to reduce variation in
the processes that lead to
product defects
• The name, “six sigma” refers
to the variation that exists
within plus or minus three
standard deviations of the
process outputs
 Six Sigma Quality (Continued)
• Six Sigma allows managers to readily describe
process performance using a common metric:
Defects Per Million Opportunities (DPMO)

Numberof defects
DPMO  x 1,000,000
 Numberof 
 opportunities 
 forerrorper  x No.of units
 unit 
 
 Six Sigma Quality: DMAIC Cycle

1. Define (D) Customers and their priorities

2. Measure (M) Process and its performance

3. Analyze (A) Causes of defects

4. Improve (I) Remove causes of defects

5. Control (C) Maintain quality

Obstacles to Implementing TQM

• Lack of:
– Company-wide definition of quality
–Strategic plan for change
–Customer focus
–Real employee empowerment
–Strong strong motivation
–Time to devote to quality initiatives
–Leadership
 Obstacles to Implementing TQM

• Poor inter-organizational communication

• View of quality as a “quick fix”
• Emphasis on short-term financial results
• Internal political and “turf” wars
 ISO Certification
• International Standards Organization (ISO)
was formulated in 1946 in Geneva for
increasing awareness of people regarding
Quality
• ISO promote worldwide standards for the
improvement of quality, productivity,
operating efficiency through series of Quality
standards (ISO 9000, ISO 14000)
 ISO Certification
• ISO 9000 concerns what an organization does to ensure that it
products and services conforms to it customer requirement

• ISO 14000 concern what an organization does to minimize

harmful effects to the environment cause by the its
operations.

• Both standards relate to an organization processes rather than

its products and services for continuous improvement.
Questions?