CHAPTER 1 Introduction to Quality and Performance Excellence

Defining Quality

1. Perfection
2. Consistency
3. Eliminating waste
4. Fast delivery
5. Compliance with policies and procedures
6. Providing a good, usable product
7. Doing it right the first time
8. Delighting or pleasing customers
9. Total customer service and satisfaction

Formal Definitions of Quality

-The totality of features and characteristics of a product or service that bears on its ability to satisfy
given needs – American Society for Quality.

 Fitness for use

 Meeting or exceeding customer expectations
 Conformance to specifications

Performance Excellence

 An integrated approach to organizational performance management that results in:

 -delivery of ever-improving value to customers and stakeholders, contributing toorganizational
sustainability.
 -Improvement of overall organizational effectiveness and capabilities.
 -Organizational and personal learning.
Importance of Quality

 -THE buzzword among business in the 1980s and 1990s.

 -Quality problems still abound in many industries, such as automotive.
 -Consumer expectations are high.

History of Quality Assurance

 -Skilled craftsmanship during Middle Ages.

 -Industrial Revolution: rise of inspection and separate quality departments.
 -Quality awareness in U.S. manufacturing industry during 1980s: from “Little Q” to “Big Q” -
Total Quality Management.
 -Disappointments and criticism.

Future Influences

1. Globalization
2. Social responsibility
3. New dimensions of quality
4. Aging population
5. Health care
6. Environmental concerns
7. 21st century technology

Quality Dimensions in Manufacturing:

1. Performance – primary operating characteristics.

2. Features – “bells and whistles”.
3. Reliability – probability of operating for specific time and conditions of use.
4. Conformance – degree to which characteristics match standards.
5. Durability - amount of use before deterioration or replacement.
6. Serviceability – speed, courtesy, and competence of repair.
7. Aesthetics – look, feel, sound, taste, smell.

Quality Dimensions in Services:

1. Time – how much time must a customer wait?

2. Timeliness – will a service be performed when promised?
3. Completeness – Are all items in the order included?
4. Courtesy – do frontline employees greet each customer cheerfully?
 5. Consistency – are services delivered in the same fashion for every customer, and every time for
the
6. same customer?
7. Accessibility and convenience – is the service easy to obtain?

Differences Between Manufacturing and Services

1. Customer needs and performance standards are often difficult to identify and measure.
2. The production of services typically requires a higher degree of customization
3. The output of many service systems is intangible.
4. Services are produced and consumed simultaneously.
5. Customers often are involved in the service process and present while it is being performed.

New Frontiers of Quality:

1. Health care
2. Education
3. Government
4. Not-for-Profits

Principles, Practices, and Techniques

1. Principles -are the foundation of the philosophy.

2. Practices -are activities by which the principles are implemented.
3. Techniques -are tools and approaches that help managers and employees make the practices
effective.

Principles of Total Quality

1. Customer and stakeholder focus.

2. Process orientation supported by continuous.
3. improvement and learning.
4. Employee engagement and teamwork.
5. Management by fact.
Customer and Stakeholder Focus

1. Customer is the principal judge of quality.

2. Organizations must build relationships.
3. with customers and increase customer engagement.
4. Organizations must understand customer needs and obtain feedback.
5. Customers are internal and external.

Process Orientation

-A process is a sequence of activities that is intended to achieve some result.

Cross-functional Perspective

Process-Focused Practices

1. Identify vital work processes that relate to an organization’s core competencies.

2. Determine key work-process requirements.
3. Design and innovate work processes to meet all requirements.

Continuous Improvement and Learning

 Incremental and breakthrough improvement enhancing value to the customer through new and
improved products and services;
 improving productivity and operational performance through better work processes and
reductions in errors, defects, and waste;
 improving flexibility, responsiveness, and cycle time performance; and
 improving organizational management processes through learning.

Learning

-why changes are successful through feedback between practices and results.
Learning Cycle

1. Planning.
2. Execution of plans.
3. Assessment of progress.
4. Revision of plans based upon assessment findings.

Employee Engagement and Teamwork

Engagement – workers have a strong emotional bond

to their organization, are actively involved in and

committed to their work, feel that their jobs are

important, know that their opinions and ideas have

value, and often go beyond their immediate

responsibilities for the good of the organization.

Empowerment – having the authority to make decisions.

Engagement-Focused Practices

1. Understand the key factors that drive workforce engagement, satisfaction, and motivation.
2. Design and manage work and jobs to promote engagement.
3. Create an environment that ensures and improves workplace health, safety, and security.

Teamwork

Vertical—teamwork between top management and lower-level employees.

Horizontal—teamwork within work groups and across functional lines (often called cross-functional
teams).

Interorganizational—partnerships with suppliers and customers.

Management by Fact

-Organizations need good performance measures to drive strategies and change, manage resources, and

continuously improve.

Data-Driven Practices

-Select, collect, align, and integrate data and information for tracking daily operations and overall
organizational performance.

-Select and ensure the effective use of comparative data and information.

-breakthrough improvement.

Strategic Focus

-Organizations must make long-term commitments to its stakeholders.

-Quality should drive strategic plans along with financial and marketing objectives.

-Long-term organizational sustainability and competitiveness are key strategic issues.

-Gather and analyze relevant data and information (SWOT).

Visionary Leadership

1. Leadership is the responsibility of top management.

2. Senior leaders should be role models for the entire organization.
3. An organization cannot sustain quality initiatives without strong leadership.

Leadership Practices

1. Setting organizational vision and values and deploying them through the organization’s
leadership system.
2. Demonstrating a commitment to organizational values.
3. Promoting an organizational environment that fosters,requires, and leads to legal and ethical
behavior.
4. Creating a sustainable organization.
5. Creating an environment for organizational performance improvement.
TQ and Agency Theory

 Agency relationship: a concept in which one party (the principal) engages another party (the
agent) to perform work.

 Key assumption: individuals in agency relationships are utility maximizers and will
always take actions to enhance their self-interests.

Contrast With TQ

-TQ views the management system as one based on social and human values, whereas agency theory is
based on an economic perspective that removes people from the equation.

-TQ takes a long-term perspective based on continuous improvement, whereas agency theory focuses
on short-term achievement of the contract between the principal and agent.
CHAPTER 2 Frameworks for Quality and Performance Excellence

Deming Philosophy

-The Deming philosophy focuses on continual improvements in product and service quality by reducing
uncertainty and variability in design, manufacturing, and service processes, driven by the leadership of
top management.

Deming’s System of Profound Knowledge

1. Appreciation for a system

2. Understanding variation
3. Theory of knowledge
4. Psychology

Systems

1. Most organizational processes are cross-functional.

2. Parts of a system must work together.
3. Every system must have a purpose.
4. Management must optimize the system as a whole.

Variation

1. Many sources of uncontrollable variation exist in any process.

2. Excessive variation results in product failures, unhappy customers, and unnecessary costs.
3. Statistical methods can be used to identify and quantify variation to help understand it and lead
to improvements.

Theory of Knowledge

 Knowledge is not possible without theory.

 Experience alone does not establish a theory, it only describes.
 Theory shows cause-and-effect relationships that can be used for prediction.
Psychology

 People are motivated intrinsically and extrinsically; intrinsic motivation is the most powerful.
 Fear is demotivating.
 Managers should develop pride and joy in work.

Deming’s 14 Points

1. Create and publish a company mission statement and commit to it.

2. Learn the new philosophy.

3. Understand the purpose of inspection.

4. End business practices driven by price alone.

5. Constantly improve system of production and service.

6. Institute training.

7. Teach and institute leadership.

8. Drive out fear and create trust.

9. Optimize team and individual efforts.

10. Eliminate exhortations for work force.

11. Eliminate numerical quotas and M.B.O. Focus on improvement.

12. Remove barriers that rob people of pride of workmanship.

13. Encourage education and self-improvement.

14. Take action to accomplish the transformation.

Juran Philosophy

-Juran proposed a simple definition of quality: “fitness for use.” This definition of quality suggests that it
should be viewed from both external and internal perspectives; that is, quality is related to “

 product performance that results in customer satisfaction; and

 freedom from product deficiencies, which avoids customer dissatisfaction.”
Juran’s Quality Trilogy

1. Quality planning
2. Quality control
3. Quality improvement

Crosby Philosophy

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.”

Crosby’s Absolutes of Quality Management

1. Quality means conformance to requirements.

2. Problems are functional in nature.
3. There is no optimum level of defects.
4. Cost of quality is the only useful measurement.
5. Zero defects is the only performance standard.

Malcolm Baldrige National Quality Award

 Help improve quality in U.S. companies.

 Recognize achievements of excellent firms and provide examples to others.

Criteria for Performance Excellence

1. Leadership
2. Strategic Planning
3. Customer Focus
4. Measurement, Analysis, and Knowledge Management
5. Workforce Focus
6. Process Management
7. Business Results

Baldrige Web Site

 Links to award recipients and application summaries

 Updated criteria versions
 CEO issue sheets
 Other information
Baldrige Award Evaluation Process

-Examiner review of application to identify strengths and opportunities for improvement and
preliminary scores.

-Consensus review by examiner teams to reach agreement on comments and scores.

-Judges’ selection of site-visited organizations.

Scoring and Evaluation

1. Approach - the methods the company uses to achieve the requirements addressed in each
category.
2. Deployment - the extent to which the approaches are applied to all requirements of the item.
3. Results - the outcomes and effects in achieving the purposes given in the item.

Impacts of the Baldrige Program

 Economic return on investment of 207:1.

 Changed the way organizations around the world manage themselves.
 Use of self-assessment.

International Quality Award Programs

 Deming Prize
 European Quality Award
 Canadian Awards for Business Excellence
 Australian Business Excellence Award

ISO 9000:2000 Quality Management Principles

1. -Customer Focus
2. Leadership
3. Involvement of People
4. Process Approach
5. System Approach to Management
6. Continual Improvement
7. Help improve quality in U.S. companies
8. Recognize achievements of excellent firms and provide examples to others

Six Sigma –

a business improvement approach that seeks to find and eliminate causes of defects and errors in
manufacturing and service processes by focusing on outputs that are critical to customers and a clear
financial return for the organization.
Key Concepts of Six Sigma

 Think in terms of key business processes, customer requirements, and overall strategic
objectives.
 Focus on corporate sponsors responsible for championing projects, support team activities, help
to overcome resistance to change, and obtaining resources.

Six Sigma as a Quality Framework

 TQ is based largely on worker empowerment and teams; Six Sigma is owned by business leader
champions.
 TQ activities generally occur within a function, process, or individual workplace; Six Sigma
projects are truly cross-functional.

Transactional Six Sigma

-Applications in service organizations

Issues:

-The culture of services is usually less scientific and service employees typically do not think in terms of
processes, measurements, and data. The processes are often invisible, complex, and not well defined or
well documented.

-The work typically requires considerable human intervention, such as customer interaction,
underwriting or approval decisions, or manual report generation.

TOPIC 3 POKA YOKE

 Product that needs to be assembled.

 Tabulate the itemized mistakes that you have encountered .
 Identify the new process that should be done to provide excellent step by step assembly
process.
 Steps that need to be performed and Design a process that requires a systematic approach to
come up with an excellent output of product assembly, this is related to your poka yoke activity.