Quality Management

• Meaning
• Dimensions of quality
• Determinants of quality
• The consequence of poor quality
• The cost of quality
• Quality Gurus
• Quality awards
• Quality certification:ISO-9000
 Quality
• Quality is the ability of a product or service to
consistently meet or exceed customer
expectations.
 Dimensions(Expectations) 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
• Durability - useful life of the product/service
• Perceived Quality - indirect evaluation of
quality (e.g. reputation)
• Serviceability - service after sale
Examples of Quality Dimensions
Determinants of Quality

Ease of
Design use

Conforms
to design
Service
 Determinants of Quality (cont’d

• Quality of design
– Intention of designers to include or exclude
features in a product or service
• Quality of conformance
– The degree to which goods or services conform to
the intent of the designers
 The Consequences of Poor Quality

• Loss of business
• Liability
• Productivity
• 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 (continued
• 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 Gurus
⦿W.Edward Deming
› 14 points i.e.
● constancy of purpose
● Drive out fear
● Breakdown barriers
● Eliminate numerical goals
● Institute modern methods of training on the job
⦿Joseph M. Juran
› Trilogy such as
● Quality planning
● Quality control
● Quality improvement
 Quality Gurus
• Phil B. Crosby
– Do it right the first time
• Top mgt must demonstrate its commitment
• Mgt must be persistent in effort to achieve good
quality
• Mgt must spell out what wants in term of quality and
what workers must do to achieve that
• Make it right the first time.
 Quality Gurus
• Kaoru Ishikawa
– Cause and effect diagram for problem solving
– Quality circle

• Walter Shewhart
– Statistical quality Control
Quality Awards

Baldrige Award

Deming Prize
 Malcolm Baldrige National Quality
Award
1.0 Leadership (125 points)
2.0 Strategic Planning (85 points)
3.0 Customer and Market Focus (85 points)
4.0 Information and Analysis (85 points)
5.0 Human Resource Focus (85 points)
6.0 Process Management (85 points)
7.0 Business Results (450 points)
 The Deming Prize
• Honoring W. Edwards Deming

• Japan’s highly coveted award

• Main focus on statistical quality control

 Quality Certification
• ISO 9000
– Set of international standards on quality
management and quality assurance, critical to
international business

• Consists of five primary parts numbered as

9000 through 9004
 ISO 9000
• ISO 9001; Model for quality assurance in
design,procurement, production, installation
and servicing
• ISO 9002:model for quality assurance in
production and installation
• ISO9003:Model for quality assurance in final
inspection test.
 ISO9000
• ISO 9000 and ISO 9004 guidelines for use
 ISO14000
• ISO 14000
– A set of international standards for assessing a
company’s environmental performance
 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
i. Philosophical element
1. Continuous improvement
2. Competitive benchmarking
3. Employee empowerment
4. Team approach
ii. Generic tools
1. Process flow chart
2. Check sheets
3. Cause and Effect Diagram
4. Pareto analysis
5. Run Chart
6. Scatter diagram
7. Control chart
iii. Tools of the QC dept (SQC methods)
1. Sampling plan
2. Process capability
3. Taguchi methods
 Elements of TQM( Philosophical)
1. Continuous improvement
2. Competitive benchmarking
3. Employee empowerment
4. Team approach
5. Decisions based on facts
6. Knowledge of tools
7. Supplier quality
8. Champion
9. Quality at the source
10. Suppliers
 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
• Jidoka
 Six Sigma
• Statistically
– Having no more than 3.4 defects per million
• Conceptually
– Program designed to reduce defects
– Requires the use of certain tools and techniques

• Six sigma: A business process for improving

quality, reducing costs, and increasing
customer satisfaction.
 Six Sigma Programs
• Six Sigma programs
– Improve quality
– Save time
– Cut costs
• Employed in
– Design
– Production
– Service
– Inventory management
– Delivery
 Six Sigma Management
• Providing strong leadership
• Defining performance metrics
• Selecting projects likely to succeed
• Selecting and training appropriate people
 Six Sigma Technical
• Improving process performance
• Reducing variation
• Utilizing statistical models
• Designing a structured improvement strategy
 Six Sigma Team
• Top management
• Program champions
• Master “black belts”
• “Black belts”
• “Green belts”
 Six Sigma Process
• Define
• Measure
• Analyze DMAIC
• Improve
• Control
 Obstacles to Implementing TQM

• Lack of:
– Company-wide definition of quality
– Strategic plan for change
– Customer focus
– Real employee empowerment
– 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
 Criticisms of TQM
1. Blind pursuit of TQM programs
2. Programs may not be linked to strategies
3. Quality-related decisions may not be tied to
market performance
4. Failure to carefully plan a program
 Basic Quality Tools
• Flowcharts
• Check sheets
• Histograms
• Pareto Charts
• Scatter diagrams
• Control charts
• Cause-and-effect diagrams
• Run charts
 Check Sheet
Monday
Billing Errors

Wrong Account

Wrong Amount

A/R Errors

Wrong Account

Wrong Amount
 Pareto Analysis

80% problems Number of defects

may be
attributed
to 20%
of causes

Off Smeared Missing Loose Other

center print label
 Control Chart
• Time sequence chart showing the plotted
values of statistics.
102
0 UCL
101
0
100
0
99
0 LCL
98
0
97
0 0 1 2 3 4 5 6 7 8 9 1 1 1 1 1 1
0 1 2 3 4 5
 Cause-and-Effect Diagram

Method Materials
s Cause Cause
Cause
Cause
Cause Cause
Environment Effec
Cause Cause t
Cause Cause
Cause Cause

People Equipment
 Run Chart
• Time sequence chart showing the plotted values of a characteristics.
Diameter

Time (Hours)
 Quality Circles
• Team approach
– List reduction
– Balance sheet
– Paired comparisons
 Statistical quality control method

• Can be divided into acceptance sampling and

process control.
• Acceptance Sampling involves testing a
random sample of existing goods, and decide
whether to accept an entire lot based on the
quality of random sampling.
• Process control: involves testing a random
sample of output from a process to determine
whether the process is producing items with
in a pre selected range.
 Acceptance sampling: Design of a single
sampling plan

• A single sample plan is defined by n and c,

where n is no of units in the sample and c is
the acceptance number.
• c denotes maximum no of defective items
that can be found in the sample before the lot
is rejected.
• Values of n and c are determined by the
interaction of AQL, alpha, LTPD, and beta
 Acceptance sampling : Design of a single sampling
plan

⦿ AQL= acceptable quality level: Lots are defined as high

quality if they contain no more than a specified level of
defectives terms AQL

⦿ LTPD= lot tolerance percent defects: Lots are low quality if

the percentage of defective is greater than a specified
amount term LTPD.

⦿ Alpha= producer risk of rejecting good quality lot

⦿ Beta= consumer risk of accepting bad quality lot.

• Example: Hi tech purchases circuit board from a vendor. The
vendor produces the board to an AQL of 2 % defective and is
willing to run 5% risk (alpha).Hi tech consider lots of 8% or
more defective LTPD unacceptable and wants to ensure that
it will accept such poor quality lots no more than 10 % of time
(beta).A large shipment has just been delivered. Find the
appropriate sampling plan for the lot.
• The parameters of the problem are AQL=.02 alpha=.05, LTPD=.08 and
Beta=.10, We can use the table to find c and n
• First divide LTPD by AQL (.08/.02)=4. Then, find the ratio in column 2 that
equal to or just grater than the amount. This value is 4.057 which is
associated with c=4

• Finally, find the value in column 3 that is in the same row as c=4 and
divide that quantity by AQL to obtain n i.e. n*AQL=1.970 or
n=1.970/.02=98.5
• The appropriate sampling plan is c=4 and n= 99
Excerpt from a sampling plan table

c LTPD/AQL n*AQL
0 44.890 .052
1 10.946 .355
2 6.509 .818
3 4.890 1.366
4 4.057 1.970
5 3.549 2.613
 Process control procedure
• Concerned with monitoring quality while the
product or service is being produced
• Objective of process control plans are to
provide timely information on whether
currently produced items are meeting design
specification.
• And to detect shifts in the process that signal
that future product may not meet
specification
 Process control with attribute
measurements: Using p chart

• Measurement by attributes means taking samples and using a

single decision- the item is good or bad.

• Create p charts with an UCL and LCL.

• P¯= total no of defects from all samples

no of samples*sample size

• Sp=√P¯(1-¯P)/n (where n is sample size)

• UCL= P¯+z Sp
• LCL= P¯-z Sp
 Process control with attribute measurements:
Using p chart

• Where p is the fraction defective, sp is the std deviation, n is

the sample size and z is the no of std deviations for a specific
confidence.Typically z= 3(99.7) % confidence or z= 2.58(99%)
confidence are used.
• Example: An insurance company were sampled on a daily
basis as a check against the quality performance of that
department. To establish a tentative norm for the dept, one
sample of 100 units was collected each day for 15 days with
these result.
• A. develop a p chart using 95% confidence interval (1.96 Sp )
• Plot the 15 sample collected
• What comments can you make about the process.
 Process control with attribute measurements: Using p chart

sample Sample size No of forms with error

1 100 4
2 100 3
3 100 5
4 100 0
5 100 2
6 100 8
7 100 1
8 100 3
9 100 4
10 100 2
11 100 7
12 100 2
13 100 1
14 100 3
15 100 1
 Solution
• P¯=46/15(100)=.0307

• Sp=√P¯(1-¯P)/n= √.0307(1-.0307)/100=
√.0003=.017

• UCL= P¯+z Sp =.031+1.96*.017=.064

• LCL= P¯- z Sp =.031-1.96*.017=-.003 or zero

 Solution
• B. The defectives are plotted below

• C. Of the 15 samples 2 were out of the control

limits. Since the control limits were
established as 95% or 1 out of 20, we would
say that the process is out of control. It needs
to be examined to find the cause of such wide
spread variation.