1

Quality

 Ability of a product or service to consistently meet or exceed customers need

 Relative term
 Producer’s POV - Objective
 Customer’s POV – Subjective
 It is also
o Quality of Design
o Conformance to specifications
o Fitness for use
o Value for price paid
o Support services
o Psychology

A good quality management program

 involve both these dimensions simultaneously

 user interests + standards
 standards must come from customer expectations
 transfer of customer expectation into product specifications

Product Quality is often judged on Service Quality is often judged on eight

eight dimensions of quality (PASCRDPS) dimensions of quality (CCCARRTT)
Cost
 Performance  Convenience
of
2 a) What are the dimensions of
 Aesthetics  Reliability
service quality. (3)
 Special Features  Responsiveness
 Conformance  Time b) Why are they difficult to
 Reliability  Assurance measure? (3)
 Durability  Courtesy
c) What would be the important
 Perceived Quality  Tangibles
dimensions of service quality for a
 Serviceability  Consistency
Hotel/ Resort? and how will you
measure any one of them (4)
quality
2015-17, 20-22
 Appraisal cost
 Prevention cost
 Internal failure cost
 External Failures

What do mean by “Cost of Quality”? Why is it important for managers?

Why is Cost of Quality important for managers. Highlight any 2 quality related costs that apply to
your college/Institute.
Evolution of TQM
1. INSPECTION
a. Error detection
b. Rectification
2. QUALITY CONTROL
a. Quality standards
b. Statistical quality techniques
c. Process performance
d. Treating quality problems
3. QUALITY ASSURANCE
a. Quality systems (ISO 9000)
b. Quality planning
c. Quality policy
d. Quality costing
e. Problem solving
4. TOTAL QUALITY MANAGEMENT
a. Involvement of all employees, customers and suppliers
b. Empowered employees
c. Teamwork
d. Quality strategy based upon a common mission and vision
e. Process oriented
Total Quality Management

 organized scientific approach

 continuous and systematic improvement of quality
 involving everyone in the organization
 aimed towards total customer satisfaction
 philosophy and;
 set of guiding principle
Concepts/Philosophies
1. Identifying root cause
2. Encompass entire organization
3. Provides guidance to improve
4. Relies on 7 basic Concepts
 Customer focus
 Continuous improvement
 Employee empowerment`
 Use of quality tools
 Product design
 Process management (Kaizen & PDCA)
 Managing supplier quality
7 Tools of quality control
Write Short notes on
 Cause-and-Effect Diagrams – Fish bone diagram  7 QC Tools
 Flowcharts  Histogram as a QC Tool
 Checklists
 Control Charts
 Scatter Diagrams
 Pareto Analysis
 Histograms
Kaizen Philosophy

 Incremental Improvement of yourself, your work and your organization.

 Embedded in TQM
 Encompasses continuous and gradual improvement of all employees
 Leads to improvement in employees’ personal output
 Can be applied to any area of business or an individual level
 10 principles of Kaizen
o Let go of assumptions.
o Be proactive about solving problems.
o Don't accept the status quo.
o Let go of perfectionism and take an attitude of iterative, adaptive change.
o Look for solutions as you find mistakes.
o Create an environment in which everyone feels empowered to contribute.
o Don't accept the obvious issue; instead, ask "why" five times to get to the
root cause.
o Cull information and opinions from multiple people.
o Use creativity to find low-cost, small improvements.
o Never stop improving.
 Deming wheel is central
o Consists of a cycle of activities necessary for quality improvement
o PDCA – Plan, Do, Check and Act
PDCA
Plan

 Evaluate current process

 Collect procedures and data
 Identify problems or areas of improvement
 Develop an improvement plan, performance objectives
 Estimate the expected results
Do

 Implement the plan or processes on a small scale

 Train all involved employees in the use of quality improvement methods and
techniques.
 Gather the results
Check

 Monitor and measure the processes and product against plan and objectives
 Verify whether the improvement has been successful
Act

 Take action to continuously improve process performance

 Improvements are documented in standard procedures so all employees are well
informed on how to handle in future.
 Implement the best solution
 Quality Principles
1. Customer focus and customer involvement
2. Involvement of all employees
3. Consistency of purpose
4. Act according to facts
5. Process oriented
6. Focus on continuous improvement
TQM Principles
The quality principles form the foundation of TQM and are expressed in the four pillars of
the TQM-house
1. Problem solving Discipline State the principles on which TQM is based. What
2. Interpersonal skills do you think are the barriers in implementing
3. Teamwork TQM in Indian companies/institutions?
4. Quality improvement process.

Total Quality Management

Problem Interpersonal Teamwork Quality

solving Skills. improvement
discipline process

Employee involvement, Structured, Stepwise, Discipline, Consistency.

Success of TQM depends on what?

1. Top management
2. Quality organization
3. Strategic action plan
4. Customer oriented company
5. Trained employees
6. Total employee involvement
7. Prevention based systems
8. Teamwork and rewards and recognition
 Prerequisites for success of TQM Possible Actions
 Customer surveys
1. Know your customers, both external  Functional analysis
and internal  Quality cost analysis
 Quality function deployment
 Customer surveys
2. Know your competitors  Competitor analysis
 Bench marking
 Quality cost analysis
3. Know the cost of non-conformance
 Functional analysis
 Customer surveys
4. Measure performance against key
 Competitor analysis
customer driven parameters
 Bench marking
5. Make sure that each employee  Functional analysis
understands and commits themselves  Education and training
to the quality objectives of the business.  Communication
 Quality cost analysis
6. Top Management commitment to the
 Functional analysis
continual improvement of quality
 Education and training
within the business.
 Communication.
7. Define the purpose of each department
and activity in terms of satisfying  Functional analysis
customer requirements.
 Education and training
 Communication
 Corrective action task force, corrective
actions group.
8. Enable the employees to fulfil their
 Error cause removal schemes.
commitment to quality by influencing
 Quality circles
the programme of continuous
 Problem solving
improvement.
 Statistical process control
 Recognition of performance
 Suggestion programme
 Self-inspection programme
 Quality cost analysis
 Functional analysis
9. Wherever possible replace the
 Quality Management Systems
inspection and correction techniques of
 Error Cause removal schemes
quality control with effective preventive
 Quality Circles
actions.
 Problem solving
 Suggestion programme
 Quality Cost Analysis
10. Never accept a non-conforming output
 Functional Analysis
in the form of a product for external or
 Education and Training
internal customer.
 Communication.
11. Plan effectively before undertaking any
 Quality Improvement Team
actions.
SPC
SPC: Set of tools & techniques used to develop a quality assurance system when business
processes exhibit variations is known as Statistical Process Control (SPC)

 Variations
o Chance Variations
 Due to random events
 Cannot be controlled
 Also called as common causes of variations
o Assignable causes
 Due to some perceptible changes
 Possible to identify and take CA
 System Drifts from desired level of performance
Possibilities of Assignable causes

 Average could shift, leading to skewness

 Variance can increase significantly, leading to wider spread
3 measures
1. Mean – average distance between the values of data
2. Median – middle value
3. Mode - the value that occurs with the greatest frequency
Standard Deviation

 the average amount of variability in your data set

 low standard deviation indicates that the data points tend to be very close to
the mean
 a high standard deviation indicates that the data points are spread out over a large
range of values

How do we ensure that random events are indeed harmless?

2 Important characteristics
1. Centre - indicated by mean
2. Spread - Range and Average spread
If observed samples are within +- 3 sigma, then it means that 99.7 % probability that the
variations are due to random events

Designed Standard Status of process

 Centre of specification limits
(Target)
 Upper Specification Limit (USL)
 Lower Specification Limit (LSL)
 (USL – LSL): Desired tolerance
 Centre of the process (Process
Average)
 Upper Control Limit (UCL)
 Lower Control Limit (LCL)
 (UCL – LCL): Spread of the process

This represents the voice of the This represents the voice of the process
customer
Desired Average is called Nominal Value
Control Chart

 It is a time-ordered plot of sample statistics.

 It shows variation in a production process and it contains information, which can be
used to detect the presence of special-cause variation
 Used to distinguish between random and non-random variability
 Control Limits, UCL and LCL: Define the range of acceptable variation for the sample
statistics

Setting up a Process Control System

Step 1
Characteristics to measure
1. Measurable and observable characteristics
2. Should impact monetary, criticality
3. Example: viscosity of the Resin in the PVC plant
In a hotel, impatience of the guest at check in counter
Step 2
Measurement Methods

Attribute Based Variable Based

 Simple Clustering into few categories  Detailed observation of the characteristic
 measurements are easy to make, quick  measurement will be expensive and
& less expensive more time consuming but will provide
more information about the process
 Attribute based control chart  Variable based control chart
P chart X bar and R Charts
C chart
 Examples: No. of objects in a collection  Examples: length, diameter, weight
 Count Data  Measurement Data

Step 3
Sampling Procedure
Examples

 Random Sampling
 Snowball Sampling
 Systematic Sampling
 Convenience Sampling
 Etc

Step 4
Choose the type of Control Chart

 X and R chart
o Mean Monitors the central tendency of a process
o Range monitors the dispersion of a process
o Based on Normal Distribution
 P - chart
 c – chart
 Variable measures
 Mean - X
Notations and computations used in control charts
 Range – R
Attribute measures
Notation
 Proportion of defects – p
Step 5 n
 No. of defects – c
Calculate Control Limits measures m
Variable
 Mean
1. Determine - X
the sub-group size n, i.e., each sub-group contains n observations
 Range – R
2. Compute the sub-group measures Variable measures
Attribute measures
 Mean - X  
a. X and R for variable
Proportion data
of defects –p X
b. p,No.
c forofattribute
defects –data
c m
m the number of sub-groups, say sample lots,
3. Determine mR
 Range – R 
4. Calculate the process average (centre line) of the respective m control chart
a. For variable Attribute measures
Variable measures
Criterion
Sub-group size n  Proportion of defects –
Notations and computations used in control charts

Notation
Each
Explanation
sub-group consists of n

 Mean - X  
observations

p
Sub-group measures Variable measures Based on the n observations, each of

X
 Mean - X these measures can be computed for
 Range – R each sub-group
Attribute measures
 Pr opor tion of defects – p
 No. of defects – c
Number of sub- m m measurements are used for

p
groups establishing the sampling
distribution and control chart
Mean of the Variable measures These means are nothing but the

m m
sampling distribution
of the sub-groups  Mean - X  X process average (center line) of the
respective control charts formed
m
using each of these measures.
 Range – R 
R
m

 Range – R  
Attribute measures

 No. of defects - c  
 Pr opor tion of defects –
p

R
p 

c
m

 No. of defects - c 
c
m
Standard deviation of Attribute measures Three standard deviations on either
the sampling  Pr opor tion of defects – side of the center line are the control
distribution of the p (1  p ) limits for the respective charts.
sub-groups  p 
n

m m
 No. of defects -  c  c

b. For Attribute
Attribute measures Attribute measures
 Proportion of defects –  Proportion of defects –
p
p p 
p(1  p)
m n

 No. of defects - c  
c  No. of defects -  c  c
m
Attribute
5. Setting Control measures
Limits
a.  Proportion of defects
For Variable Data–
p(1  p)
p 
chart n R
X and
 No. of defects -  c  c

For X For R
 UCL = X́ + A2 R  UCL = D4 R
 LCL = X́ - A2 R  LCL = D3 R
Step 6
Plot the Graph

X-bar Chart
Sample Means Centre Line UCL LCL
12.50
12.49
12.48
12.47
12.46
Mean Diameter (cms)

12.45
12.44
12.43
12.42
12.41
12.40
12.39
12.38
12.37
12.36
12.35
12.34
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Sample Number

R Chart
Sample Range Centre Line UCL LCL
0.28
0.26
0.24
0.22
0.20
Mean Range (cms)

0.18
0.16
0.14
0.12
0.10
0.08
0.06
0.04
0.02
0.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Sample Number
Even though the process may be in control, if there are patterns or trends occurring quality
manager should stop the process and study the peculiar behaviour / pattern
When must a process be stopped for investigations?
Reliability
While quality is defined as “conformance to the requirement at the start of use” by the
customer, the question remains “how many of these units still meet the specifications after
a week of operation, or after a month, or at the end of one year warranty period”?

 It is the probability of a device performing its purpose satisfactorily for the period of
time intended under operating conditions encountered.
 It is the ability of the plant and equipment to continue to be fit for the intended purpose
and not to breakdown in operation
 Amount of plant maintenance work will depend upon the reliability of the system.
 Reliability = (Number of units survived till the specified time limit)
(Numbers of units inspected)
 It is invariably associated with the performance of the product.
o Numerical Value – indicates the element of probability that makes measurement
of reliability possible.
o Life- indicates the age of the product through which it must be performing to
satisfaction.
o Intended function- the product must perform a certain function or do a certain
job for which it is designed, when required.
o Environmental conditions- Even the storage and transport conditions, have a
significant effect on product reliability.
Need for reliability

 Profitability
 Warranty Period
 Inventory of spare parts
 Avoid Contractual penalties
 To gain Competitive advantage

System Reliability

 A system is an assembly of a number of parts or components of similar or different types

 They may be connected in series or parallel or both
 Series Systems
o two or more components operate in series
o If either component fails, the system itself fails

R1 R2 R3

A B
 o The effective reliability of the system between points A and B is RAB =R1 x R2 x R3
where R1, R2 and R3 are the reliabilities of the three components or more.
o RTotal = R1.R2.R3…..RN
o The disadvantage of this series is that as more processes or machineries are added,
the reliability of the entire system decreases.
Parallel Systems/Standby Systems

 In this system two or more components operate in parallel.

R1

A B

R2

R3

 If either component fails, the system continues to operate but at a reduced performance
 The whole system will fail only if all the components so connected fails
 the system reliability is greater than the reliability of the individual components.
 The effective reliability of the system between two points A and B is R AB= 1-(1-R1) (1-R2)
(1-R3)
 Or more generally Rtotal = 1- (1-R1) (1-R2) (1-R3)……(1-RN)
Mixed Systems

 It is a mixture of series and parallels systems

 It helps increase the reliability of the product

R1 R1

A B

R1 R1
Process Capability
Sampling Distribution and Process Distribution

 Both have same mean

 Variability of Sampling < Variability of Process
 Sampling Distribution is normal (even if process distribution is not)
Process Capability

 It is the ability of a process to produce output within specification limits and

satisfying customer needs
 “6 sigma process" means, if one has six standard deviations between the process
mean and the nearest specification limit, practically no items will fail to meet
specifications.
 Thus, Process capability = 6 σ (where σ = standard deviation) and is a measure of the
spread of the process called natural tolerance.
 Using process capability, it is possible to know the % of products which will be
produced within limits of ±3 σ on either side of mean x (bar).
 The capability analysis determines whether the variability inherent in the output of a
process that is in control, falls within the acceptable range of variability allowed by
the design specifications.
 Process capability and specifications may or may not match. There are 3 possible
cases
o Process variability matches specifications

Process is capable, as
99.73% of the goods will be
within the specifications

Lower Upper
specification specification
 o Process variability well within specifications

Lower Upper
specification specification

o Process Variability exceeds specifications

Lower Upper
specification specification

Possible Solutions
 Redesign the process
 Use alternative process
 Retain the current process and eliminate unacceptable output by inspection
 Examine whether specifications could be relaxed

Process Capability Ratio

 It is a statistical measure of process capability Cp
 It is used to assess the ability of a process to meet specifications

 Cp = 1, Barely capable
 Cp < 1, Not capable
 Cp > 1, Capable… Ideally it should be at least 1.33

If the process is not centred, we use a slightly different measure to compute the capability of the
process. This is represented by the symbol Cpk
Quality function Deployment

 Process used to ensure that the product meets customer specifications

 QFD is a tool for translating customer specifications into technical requirements
 Customer requirements or voice of customers (VOC) are gathered into a visual
document
 Provides opportunity to make sure you have a good product before even designing
and implementing
 Preventive tool
 QFD encompasses
o Customer requirements
o Competitive evaluation
o Product characteristics
o Relationship matrix
o Trade-off matrix
o Setting Targets

Questions to be asked during product design

1. What functions do customers want?
2. What are the capabilities of current product?
3. What are the limitations of the material we have selected?
4. Are there better materials available?
5. What price must be set for the product to be successful in the market place?
6. What must the product cost to make?
Phases of QFD
1. Product Design (Design Life Cycle)
a. Define and prioritize customer needs
b. Analyse Competitive opportunities
c. Plan a product to respond to needs and opportunities
d. Establish critical characteristics target values
2. Product Planning including HOQ (Requirements Engineering Life Cycle)
a. Identify critical parts and assemblies
b. Flow down critical product characteristics
c. Translate into critical part/assembly characteristics and target values
3. Process Planning (Implementation Life Cycle)
a. Determine Critical Processes and process flow
b. Develop production equipment requirements
c. Establish critical process parameters
4. Process Control (Testing Life Cycle)
a. Determine critical parts and process characteristics
b. Establish process control methods and parameters
c. Establish inspection methods and test parameters
FMEA – Failure Mode and Effect Analysis

 It is a method designed
o to identify potential failure modes for a product or process,
o to assess the risk associated with those failure modes
o to rank the issues in terms of importance; and
o to identify corrective actions to address the most serious concerns.

 Failure Mode – the manner in which a system, subsystem, or component fails to meet
the intended purpose or function
 Failure Effect – impact a failure has caused when not prevented or corrected SEVERITY
 Failure Cause – the how or why that leads to a failure mode, factors contributing to the
failure mode. OCCURENCE
 Failure Control – the methods used to detect or control the failure cause. DETECTABILITY

Severity (S) Occurrence (O) Detectability (D)

Rating the extent of damage The likeliness of the stated The easier it is to detect the
that is likely to occur in case Deviation in day-to-day better it is for us. The
the Deviation occurs. operations difficult it is to detect, the
longer it could take to be
identified/ corrected
1 – No effect 1 – Fairly Unlikely 1 – Proven methods
10 – Hazardous Effect 10 – Fairly Certain available
10 – No technique available

 Criticality
o Relative measure of the combined influence of the failure mode and its
frequency. (S x O)
 RPN
o It is the mathematical product of the numerical Severity, Occurrence, and
Detectability ratings
o S x O x D = RPN
o It is used to rank order potential system failures
o It defines the priority of the failure
 Benefits of FMEA
o Make output error free
o Better Safety of the product
o Better Quality
o Better Reliability
o Improves Customer Satisfaction
o Reduces Risk & warranty concerns

 When FMEA needs to be carried out?

o New products, processes and systems
o Redesign product and processes
o Existing designs and processes in the new application or environment
o After a problem-solving study to prevent the recurrence of the problem
 Used in
o Initial Scoping Stage
o Improve Stage
o Control Stage

Acceptance Sampling

 It is a SQC process
 Process of randomly inspecting a certain number of items from a lot or a batch in
order to decide whether to accept or reject the entire batch based on
predetermined standards
 It is either done before or after the process, hence different from SPC
 Used where inspection is expensive, volume is high, or inspection is destructive
 Can be used on either variable or attribute measures, but more commonly used for
attributes
Sampling Plan

 Specify the Lot Size (N)

 Decide the sample size (n)
 Specify the Acceptance/Rejection Criteria (c)
 Depending on the nature of the inspection required, we may select different
sampling plan
o Single Sampling Plan
o Double Sampling Plan
o Multiple Sampling Plan

Single Sampling Plan

Double Sampling Plan

 Lower and upper levels of acceptance and rejection, c1 and c2 resp.

 For first sample
o If the number of defective items are < c1; good lot; sampling terminated
o If the number of defective items are > c2; bad lot; sampling terminated
o If the number of defective items are c1 < d < c2; it is compared to 3rd value c3;
If the combined number of defectives does not exceed c3, the lot is accepted;
otherwise, it is rejected.

Multiple Sampling Plan

 Used when cost of rejection is high

 More than two sample may be required
 The plan will specify each sample size and two limits for each sample
 Values increase with the number of samples
 The process continues similar to double sampling until the lot is either accepted or
rejected
Operating Characteristics (OC) Curves

 Acceptable Quality Level (AQL): the percent defect that the buyer is willing to
tolerate in the lot delivered by the supplier
 Lot Tolerance Percent Defective (LTPD): the worst quality beyond which the
manufacturer is not willing to accept the incoming lot
 Producer’s risk: the risk supplier faces in getting his/her lot rejected when indeed it
was conforming to the agreed terms
 Consumer’s risk: the risk that a manufacturer faces of accepting a lot with poor
quality beyond his/her tolerance level
Operating Characteristics (OC) Curve

 A graphical representation of a sampling plan

 It reveals the above aspects of a sampling plan
  Probability Curve - follows Poisson's distribution which is the excellent
approximation to the binomial distribution.
 Shows the probabilities of accepting lots with various fraction defectives
 The degree to which a sampling plan discriminates between good and bad lots is a
function of the steepness of the graphs OC curve, i.e.,
o Steeper the curve, more the discriminating the sampling plan
 The probability of acceptance is just the probability that 'd' (defectives) is less than
or equal to 'c'.

Taguchi Loss Function

 Common thinking around specification limit is that the customer is satisfied as long as
the variation stays within the specification limits

 Variation exceeds the limits, then the customer immediately feels dissatisfied

 The specification limits divide satisfaction from dissatisfaction.
However,

 Specification limits do not cleanly separate satisfaction levels for the customer
 Taguchi states that any variation away from the nominal (target) performance will
begin to incur customer dissatisfaction.

 The quality does not suddenly plummet once the limits are exceeded, rather it is a
gradual degradation as the measurements get closer to the limits.
 As the variation increases, the customer will gradually (exponentially) become
dissatisfied
 The goal of a company should be to achieve the target performance with minimal
variation. That will minimize the customer dissatisfaction.
  Taguchi loss function is the graphical depiction of loss to describe a phenomenon
affecting the value of products produced by the company.
 It emphasizes the need for incorporating quality and reliability at the design stage,
prior to production
According to Taguchi, the loss is directly proportional to the square of the deviation from
the target.

Taguchi measured quality as the variation from the target value of a design specification,
and then translated that variation into an economic “loss function” that expresses the cost
of variation in monetary terms.

NUMERICAL
Six Sigma 6σ
Definition

 provides a set of tools and techniques and an organizational framework to eliminate

defects from any business process
 Business Definition: It is a strategy
o to significantly improve customer satisfaction and shareholder value
o by reducing variability in every aspect of business
 Technical Definition: It means having no more than 3.4 defects per million
opportunities DPMO
Purpose/Objectives
To

 improving quality
 reduce costs
 reduce defects
 reduce product/process variability
 reduce delivery time
 increase productivity
 improve customer satisfaction
Why 6 sigma? – 99.99974%
If things were only at 3 Sigma Quality (99.73% or 2.7 defects per 1,000 operations):

With 99.73 % With Six Sigma

Quality
Quality

For every 300000 1,000 missed 1 missed delivery

letters delivered deliveries

For every week of TV 1.68 hours of 1.8 seconds of

broadcasting per dead air dead air
channel

Out of every 500,000 4100 crashes Less than 2

computer restarts crashes

How to find DPMO?

1. Specify the area under question
2. Specify the VOC
3. Determine CTQ and its measurable unit
4. Determine CTQ specifications
5. Specify the defect and its unit
6. Determine Opportunities per defect per unit
7. Determine the total defects
8. Determine the total number of units produced
9. Calculate DPMO using
DPMO = Total number of defects detected * 1000000 _
Number of units produced x Opportunities of defects per unit
Methodology
Six Sigma employs many statistical tools in a systematic project-oriented fashion through
DMAIC cycle
1. Define D
2. Measure M
3. Analyse A
4. Improve I
5. Control C

Define: Define the problem/voice of Customer

 Identify, evaluate and select areas for improvement

 Set goals
 Form teams
Measure: Measure current process & collect data

 Collect data on size of the selected problem,

 identify key customer requirements,
 Determine key product and process characteristic.
Analyse: Analyse & find out root causes of the defects

 Analyse data, establish and confirm the “possible causes for bad quality.
 Identify areas of improvement
 Statistical graphical tools used
Improve: Improve current process using different tools

 Improvement strategy
 Develop ideas to remove root causes
 Design and carry out experiments,
 Optimize the process.
 Final solutions
Control: Control future process so that any deviations are corrected before defects are
formed

 Establish standards to maintain process;

 Design the controls, implement and monitor.
 Evaluate financial impact of the project
SERVQUAL Model
TQM IN SERVICE SECTOR

 Services are performances that one party offers to another

 Intangible – cannot be easily measured, tested or verified in advance
 Perishable in nature
 Does not result in transfer of ownership
 Outcome of Service is as important as process of delivery
 Heterogeneous because performances vary from producer to producer & consumer
to consumer
 Have an element of Simultaneity because, unlike a product, services are not
manufactured in a plant and then delivered to customer
 Hence, measure of service quality involves perceptions of the customer and the
service provider
Dimensions of Service Quality

 Accessibility/approachability
 Communicating to keep customers informed in their language
 Competence to perform service
 Courtesy & politeness towards people
 Credibility & honesty of purpose-financial ratings, Image
 Reliability-honouring promise
 Responsiveness to provide services beyond specified-speed
 Security- Ability to dispel risk
 Tangibles-physical delivery
 Listening to their customers & understanding their needs
Gap analysis / ServQual Model

 effective diagnostic tool for uncovering broad areas of a company’s service quality
shortfalls and strengths. Used to analyse the gaps influencing customer perception
 Company’s perception of service outcome should match customer's expectation. If it
fails, there is a service gap.
 The gap between expected and perceived service is a measure of service quality
 Expectation < Service perceived = Exceptional Quality,
 Expectations > Service perceived = Unacceptable Quality
 Expectations = Service perceived = Satisfactory Quality
 Offers the potential to determine the relative importance of the 5 major service
quality dimensions-- Reliability, Responsiveness, Assurance, Tangibles, and Empathy
-- and to track service quality performance over time
 We can use data on customer priorities to feed into the House of Quality (QFD)
Gap 1: Not knowing what customers expect

 Also called as listening gap

 There is inconsistency b/w customers expectations of service and company’s
understanding of those expectations
 Reasons
o Inadequate market research
o Lack of upward communication
o Inadequate service recovery
o Lack of customer focus

Gap 2: Wrong service quality standards

 Mismatch between manager’s expectations of customer’s service quality and service

quality specifications
 Represents inability of management to translate customers’ expectations to service
quality specifications
 Reasons
o Resource constraints
o Lack of Management commitment
o Absence of Customer-driven standards
o Inappropriate physical evidence
 o Absence of goal setting

Gap 3: The Service-performance Gap

 Difficult to adhere to formal standards or specifications

 Reasons
o Poor employee-job fit
o Poor technology-job fit
o Inappropriate supervisory control
o Lack of perceived control
o Lack of team work

Gap 4: Promises do not match actual delivery

 Service delivery and what the organisation promises through external

communications and/or the absence of information about service delivery aspects
 Reasons
o inadequate horizontal communications
o propensity to over-promise

Gap 5: The discrepancy between customer expectations and their perceptions of the service
delivered

 Most Important
 Reasons
o Differences in understanding of customer expectations between managers
and service providers

21 Items for rating

1. Providing services as promised
2. Dependability in handling customers' service problems
Reliability
3. Performing services right the first time
4. Providing services at the promised time
5. Keeping customers informed about when services will be performed
6. Prompt service to customers
Responsiveness 7. Willingness to help customers
8. Readiness to respond to customers' requests
9. Employees who instil confidence in customers
10. Making customers feel safe in their transactions
Assurance
11. Employees who are consistently courteous
12. Employees who have the knowledge to answer customer questions
13. Giving customers individual attention
14. Employees who deal with customers in a caring fashion
Empathy
15. Having the customer's best interest at heart
16.Employees who understand the needs of their customers
Tangibles 17. Modern equipment
18. Visually appealing facilities
19. Employees who have professional appearance
20. Visually appealing materials
 21. Convenient business hours

Process model for continuous measurement and improvement of service quality

Cost Of quality

 Cost of Conformance
o Prevention Costs – approx. 5% of the total
o Appraisals costs – approx. 25% of the total
 Cost of non-conformance approx. 70% of the total
o Internal failure costs
o External failure costs

Prevention costs: Costs aimed at preventing defects and building acceptable quality into
products & services

 Job-related training for employees

 Customer interface to understand expectations
 Certifying Suppliers
 Development & maintenance costs as well as quality planning cost.
 Quality Training & Audit cost
 Process Improvements
 Prevention is avoidable activity and should be replaced by TQM which advocates
cost of building acceptable quality.
Appraisal costs: Costs incurred to measure extent of conformance

 Measuring, Inspecting, Testing & auditing to determine conformance with Standards.

 Inspecting costs of incoming Raw materials.
 In process testing/SPC & final product testing costs.
 Production trials costs
 Materials consumed during inspection & testing.
 Maintenance & calibration of equipment costs.
Internal Failure Costs: Costs associated with defects in products and processes that are
found prior to delivery to customers

 Scrapping
 Rework
 Reinspecting / Retesting
 Loss of productive time
 Opportunity loss
 Billing errors
External Failure: Costs associated with defects in products and processes that are detected
after delivery to customers

 Scrapping
 Rework, Reinspecting / Retesting
 Damage in transit – theft
 Break-down during warranty period

Why Cost of Quality is important?

  It provides ability to enhance corporate profit
 Improves purchasing and supplier related costs
 Helps to identify waste in activities
 Helps to identify quality problems
 COQ is critical for judgment of process effectiveness
 Quality costs are directly proportional to the conformance of the product
 Measurement of these costs helps to identify areas needing improvement.
Nonconforming vs Defective

 Non-conforming is when intended purpose is met but some specifications are not
met. E.g., Seconds garments
 Defective is when intended purpose is not met and product is unfit to be used for
intended purposes and scrap is the ultimate of defective goods
Steps for dealing with non-conformity

 Discovery
 Identification
 Segregation
 Analysis
 Approval
 Action
 Tracking