Quality Management and Quality Techniques

QM
LESSON 7
Concept of Quality
1
CONCEPT OF QUALITY
CONTENTS
1.0 Aims and Objectives
1.1 Introduction
1.2 Concept of Quality
1.3 Vision of Quality
1.4 Evolution of Quality
1.4.1 From Inspection to Total Quality
1.5 Quality Mission
1.6 Quality Policy
1.6.1 Quality of Services
1.6.2 Customers’ Satisfaction
1.6.3 Preparedness and Satisfaction of Employees
1.6.4 Competence of the Organisation’s Management and Administration
1.7 Dimensions of Quality
1.7.1 Experience
1.7.2 Measurement
1.7.3 Relationships and Systems Thinking
1.7.4 Inter-connectivity and Paradigm Logic
1.7.5 Value Sharing
1.8 Quality as a Customer Delight
1.9 Quality as Meeting Standards
1.9.1 ISO Best Practices
1.10 Actual vs Perceived Quality
1.11 Let us Sum up
1.12 Lesson End Activity
1.13 Keywords
1.14 Questions for Discussion
1.15 Suggested Readings
1.0 AIMS AND OBJECTIVES

After studying this lesson, you should be able to:
z Define the concept of quality
z Discuss the vision of quality
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8 z Know the evolution of quality
Quality Management and
Quality Techniques z Describe the quality policy and mission
z Discuss the various dimensions of quality
z Explain quality as a customer delight and meeting standards
z Explain actual vs perceived quality
1.1 INTRODUCTION
In this lesson, we introduce the basic ideas and concepts of quality. The challenge
facing India's business executives in the new millennium is not simply to decide
whether to adopt any quality management programme, but to adopt one that best fits
their specific competitive business environment.
1.2 CONCEPT OF QUALITY

Quality is perceived differently by different people. Yet, everyone understands what is
meant by “quality.” In a manufactured product, the customer as a user recognizes the
quality of fit, finish, appearance, function and performance. The quality of service
may be rated based on the degree of satisfaction by the customer receiving the service.
The relevant dictionary meaning of quality is “the degree of excellence.” However,
this definition is relative in nature. The ultimate test in this evaluation process lies
with the consumer. The customer’s needs must be translated into measurable
characteristics in a product or service. Once the specifications are developed, ways to
measure and monitor the characteristics need to be found. This provides the basis for
continuous improvement in the product or service. The ultimate aim is to ensure that
the customer will be satisfied to pay for the product or service. This should result in a
reasonable profit for the producer or the service provider. The relationship with a
customer is a lasting one. The reliability of a product plays an important role in
developing this relationship.
There are many definitions of quality available in the literature. A definition attributed
to quality guru Crosby states the following:
Quality is conformance to requirements.
The preceding definition assumes that the specifications and requirements have
already been developed. The next thing to look for is conformance to these
requirements.
Another frequently used definition comes from Juran:
Quality is fitness for use.
This definition stresses the importance of the customer who will use the product.
W. Edwards Deming defined quality as follows:
Good quality means a predictable degree of uniformity and dependability with a
quality standard suited to the customer.
The underlying philosophy of all definitions is the same – consistency of conformance
and performance, and keeping the customer in mind.
Another definition that is widely accepted is:
Quality is the degree to which performance meets expectations.
This definition provides a means to assess quality using a relative measure.
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We provide here the definition adopted by the American Society for Quality (ASQ): 9
Concept of Quality
Quality denotes an excellence in goods and services, especially to the degree they
conform to requirements and satisfy customers.
This definition assimilates the previous ones and is our definition of choice.
1.3 VISION OF QUALITY

The Total Quality Management (TQM) process begins with a definition of the specific
quality objectives important to the client’s business. Assessments are conducted to
benchmark the business relative to standards agreed upon with the client.
Establishing objectives is serious business and requires close attention and great
understanding. They must be set within the process capability in order to drive
improvement.
The following five steps should be observed for writing the broad quality objectives
for an organization.
z Assemble input: The mission statements of the organization must be circulated
widely through out the organization and get the input from all stake holders as to
what we have to accomplish to fulfill the mission.
z Find the optimum input: Analyze the inputs received and take those that are in
tune with the organization’s mission and vision.
z Resolve differences: Discuss the proposed objectives in detail and resolve the
differences.
z Select the final objectives: After resolving the differences, finalize the list. The
objectives are then rewritten and edited to ensure that they are in tune with the
mission and vision of the organization.
z Publicize the objectives: Inform all the stakeholders the organization’s objectives.
Publish it with vision, mission and guiding principles.
A successful TQM environment requires a committed and well-trained workforce that
participates in quality improvement activities. Such participation is reinforced by
reward and recognition systems emphasizing the achievement of quality objectives.
Now develop the specific tactics for achieving the objectives.
Specific tactics are well-defined, finite projects and activities that are done to
accomplish the objectives. They have the following characteristics:
z They are specific in nature.
z They are measurable.
z They can be quantified.
z They can be achieved within the specified time.
z They can be assigned to a specified person or group.
z They are tied to a broad objective directly.
1.4 EVOLUTION OF QUALITY

Before the concepts and ideas of TQM were formalized, much work had taken place
over the centuries to reach this stage. This section charts the evolution, from
inspection through to the present day concepts of total quality.
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10 1.4.1 From Inspection to Total Quality
Quality Techniques During the early days of manufacturing, an operative’s work was inspected and a
decision made whether to accept or reject it. As businesses became larger, so too did
this role and full time inspection jobs were created. Accompanying the creation of
inspection functions, other problems arose:
z More technical problems occurred, requiring specialised skills, often not
possessed by production workers.
z The inspectors lacked training.
z Inspectors were ordered to accept defective goods, to increase output.
z Skilled workers were promoted into other roles, leaving less skilled workers to
perform the operational jobs, such as manufacturing.
These changes led to the birth of the separate inspection department with a “chief
inspector”, reporting to either the person in charge of manufacturing or the works
manager. With the creation of this new department, there came new services and
issues, e.g., standards, training, recording of data and the accuracy of measuring
equipment. It became clear that the responsibilities of the “chief inspector” were more
than just product acceptance, and a need to address defect prevention emerged.
Hence the quality control department evolved, in charge of which was a “quality
control manager”, with responsibility for the inspection services and quality control
engineering.
In the 1920’s statistical theory began to be applied effectively to quality control, and
in 1924 Shewhart made the first sketch of a modern control chart. His work was later
developed by Deming and the early work of Shewhart, Deming, Dodge and Romig
constitutes much of what today comprises the theory of statistical process control
(SPC). However, there was little use of these techniques in manufacturing companies
until the late 1940’s.
At that time, Japan’s industrial system was virtually destroyed, and it had a reputation
for cheap imitation products and an illiterate workforce. The Japanese recognised
these problems and set about solving them with the help of some notable quality gurus
– Juran, Deming and Feigenbaum.
In the early 1950’s, quality management practices developed rapidly in Japanese
plants, and become a major theme in Japanese management philosophy, such that, by
1960, quality control and management had become a national preoccupation.
By the late 1960’s/early 1970’s Japan’s imports into the USA and Europe increased
significantly, due to its cheaper, higher quality products, compared to the Western
counterparts. In 1969 the first international conference on quality control, sponsored
by Japan, America and Europe, was held in Tokyo. In a paper given by Feigenbaum,
the term “total quality” was used for the first time, and referred to wider issues such as
planning, organisation and management responsibility. Ishikawa gave a paper
explaining how “total quality control” in Japan was different, it meaning “company
wide quality control”, and describing how all employees, from top management to the
workers, must study and participate in quality control. Company wide quality
management was common in Japanese companies by the late 1970’s.
The quality revolution in the West was slow to follow, and did not begin until the
early 1980’s, when companies introduced their own quality programmes and
initiatives to counter the Japanese success. Total Quality Management (TQM) became
the centre of these drives in most cases.
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In a Department of Trade & Industry publication in 1982 it was stated that Britain’s 11
Concept of Quality
world trade share was declining and this was having a dramatic effect on the standard
of living in the country.
There was intense global competition and any country’s economic performance and
reputation for quality was made up of the reputations and performances of its
individual companies and products/services. The British Standard (BS) 5750 for
quality systems had been published in 1979, and in 1983 the National Quality
Campaign was launched, using BS5750 as its main theme. The aim was to bring to the
attention of industry the importance of quality for competitiveness and survival in the
world market place. Since then the International Standardisation Organisation (ISO)
9000 has become the internationally recognised standard for quality management
systems. It comprises a number of standards that specify the requirements for the
documentation, implementation and maintenance of a quality system.
TQM is now part of a much wider concept that addresses overall organizational
performance and recognizes the importance of processes. There is also extensive
research evidence that demonstrates the benefits from the approach. As we move into
the 21st century, TQM has developed in many countries into holistic frameworks,
aimed at helping organizations achieve excellent performance, particularly in
customer and business results. In Europe, a widely adopted framework is the so-called
“Business Excellence” or “Excellence” Model, promoted by the European Foundation
for Quality Management (EFQM), and in the UK by the “British Quality Foundation
(BQF).”
1.5 QUALITY MISSION

Quality mission of a company can be defined through its quality mission statement,
which may state it as the company’s mission.
For instance, a company’s quality mission may be, “To provide a quality product that
satisfies our customers’ needs and expectations the first time, every time!”
To elaborate the mission the company may add:
“Our goal is to satisfy our customers’ needs, whether it be through timely delivery;
providing the best value for the money; efficient and courteous service; or superior
quality, reliability and durability of our products.”
Companies may commit themselves to the following statements:
z Understanding and responding to their customers’ needs and expectations.
z Providing “proven design” products.
z Improving the systems of production to generate continuing quality and
productivity improvements.
z Developing a highly trained and motivated workforce with full accountability and
responsibility.
z Establishing long-term relations with suppliers.
z Continually improving on all of the above.
1.6 QUALITY POLICY

Any company’s quality edifice must stand on the following pillars:
z Total commitment for customer satisfaction.
z Protection and Advancement of Environment.
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12 z Market Leadership.
Quality Techniques z Strive for Quality Excellence.
z Sustainable Development of Stakeholders.
In its quality policy declaration a company may state as under:
“The company’s commitment to quality is unflinching, its hunger for growth is deep-
rooted and its capacity for details is amazing. Over the decades, the company has
demonstrated a rare resilience and fortitude. The company is determined to improve
productivity and focus continuously on innovation and up-gradation of its products
and people.”
In order to support good-quality fulfillment of its tasks, the Centre for Regional
Development has introduced a suitable and effective quality management system,
implemented following an internationally approved model of the ISO 9001:2000
standard, and has declared its quality policy which fully covers all the organisations’
activities and is binding for each employee and targeted as follows:
1.6.1 Quality of Services

z Services and products must be delivered in a highest professional quality, respect
the needs of customers, co-operating partners and Management Authorities of the
national state administration;
z Through continuously increasing the quality of its services and products, the CRD
CR aims at:
Achieving very good and stable evaluation of the organisation’s activities by
control and audit companies;
Achieving the very best evaluation of the organisation in main spheres of its
activities in the domestic and foreign markets.
1.6.2 Customers’ Satisfaction

z Customers’ satisfaction is the priority objective of quality policy. It rests on the
provision of high-quality services, products and information by responsible,
educated, professionally advanced and satisfied employees able to communicate
with customers in a positive way.
z A further objective is to eliminate serious complaints about the organisation’s
activities and its employees caused by their own mistakes.
1.6.3 Preparedness and Satisfaction of Employees

z Preparedness and satisfaction of employees and their responsible approach to
fulfilling tasks are linked to the sense of belonging to the organisation and
knowledge of personal development prospects.
z Employees are personally motivated to high-quality performance of the
organisation’s tasks entrusted to them. They bear full responsibility for their
proper fulfillment, which is reflected in their evaluation.
z In relation to their colleagues and customers, all employees apply principles of
positive communication at work.
z Employees bear personal responsibility for their professional growth and the
utilisation of conditions created by the organisation’s top management.
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1.6.4 Competence of the Organisation’s Management and Administration 13
Concept of Quality
z Top management continuously inform their employees about the organisation’s
objectives, tasks and its overall targeting.
z Top management have committed to implementing advanced information
technologies and creating working environment in their organisation leading to
sustainable high-quality work of employees.
z Top management, together with other managers, have committed to continuous
creating – through a training system, work meetings and support to informal
activities of the employees – conditions for increasing qualification of the
employees, strengthening team spirit and human relations.
z Managers continuously improve their management skills and professional
knowledge.
z The organisation’s managers bear personal responsibility for adhering to the
quality management system and creating jointly conditions for continuous
improvement of its efficiency.
It is of crucial importance to mention here that the relationship between specific
“bundles” of Human Resource Management (HRM) policies and practices and
organisational performance in the service industry is not well understood. Based on
open-ended interviews with managerial staff, and examination of management
documents, the human resource management policies and practices adopted by an
organisation in support of a strategic decision to enhance quality are considered in
order to shed light on the nature of the relationship between HRM bundles and
effectiveness in a quality-focused service context. The changes in service quality are
adopted to have measurable positive effects on the key indicators of service used by
the organisation.
Check Your Progress 1
Fill in the blanks:
1. A successful ………………. requires a committed and well-trained
workforce that participates in quality improvement activities.
2. In the early 1950’s, quality management practices developed rapidly in
………………. plants.
3. EFQM stands for ………………. .
1.7 DIMENSIONS OF QUALITY

Quality exists in five distinct dimensions. It is made up of
z Experience,
z Measurement,
z Relationships and Systems Thinking,
z Inter-connectivity and Paradigm Logic, and
z Value Sharing
1.7.1 Experience
Quality of a product or service will not exist unless and until it is translated into
experience. The ability to translate vision into reality is the primary impact of this
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14 dimension. Experience is the translation into reality of the true state of vision of the
Quality Techniques organization. Further, it provides learning. The successful organization is one that can
experiences learn from it.
1.7.2 Measurement
Measurement gives quality the first of its multidimensional characteristics. It provides
the ability to, not only assess experience, but also to determine how well or how
poorly it was done. This dimension provides the knowledge of the system. Examples
of this dimension are the use of statistical tools such as the check sheet, the Pareto
chart, the histogram, the run chart and the control chart.
1.7.3 Relationships and Systems Thinking

Systems thinking transform a quality system beyond a shallow, two-dimensional
system to one that is dynamic, integrated, and leveraged. The ability to see one set of
data plotted against another set of data reveals relationships and common threads.
From these, inferences can be drawn that begin to define the quality system and set its
parameters. It also addresses the impact of interpersonal relationships on trading
relationships.
1.7.4 Inter-connectivity and Paradigm Logic

The first three dimensions give us the ability to establish a system, as we measure the
results of relationships among various parts of the system and make modifications
necessary to produce the desired results. However, a system existing only in three
dimensions is a closed system. This dimension gives us the ability to look beyond
three-dimensional thinking to the inter-connectivity of all systems and processes. This
gives us the power to understand the paradigm, or set of rules or guiding principles,
upon which a system is based. The power of interconnectivity is that it provides a
foundation for quantum leaps in quality improvement.
1.7.5 Value Sharing

Value sharing is a universal paradigm that provides a foundation for a complete
quality system. An understanding of value sharing gives us the power to measure the
strength of relationships. The measure of this strength is in the willingness of
participants to consecrate resources to other participants or to a common good.
Value sharing is expressed in the phrase, “Delight the Customer.” In other words,
“Give the customer more than what the customer is paying for.”
As the relationship with the customer grows, there is mutual consecration of resources
by both parties as each share the value it derives from trade with the other party.
The five dimensions of value sharing involve the integration and fulfillment of all the
other dimensions with respect to all the participants.
Since quality means different things to different people, the dimension of quality is
also different. Dimensions of quality are also different for manufacturing and service
functions.
Example: Quality of Healthcare
Quality of care should be defined in light of both technical standards and patients'
expectations. While no single definition of health service quality applies in all
situations, the following common definitions are helpful guides:
Quality Assurance is that set of activities that are carried out to monitor and improve
performance so that the care provided is as effective and as safe as possible (Quality
Assurance Project, 1993).
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The application of medical science and technology in a way maximizes its benefits to 15
Concept of Quality
health without correspondingly increasing its risks. The degree of quality is, therefore,
the extent to which the care provided is expected to achieve the most favorable
balance of risks and benefits (Avedis Donabedian, 1982).
Proper performance (according to standards) of interventions that are known to be
safe, that are affordable to the society in question, and that have the ability to produce
an impact on mortality, morbidity, disability and malnutrition (M.I. Roemer and
C. Montoya Aguilar, WHO, 1983).
The most comprehensive and perhaps the simplest definition of quality is that used by
advocates of total quality management (W. Edwards Deming, 1982): "Doing the right
thing right, right away." Experts generally recognize several distinct dimensions of
quality that vary in importance depending on the context in which a QA effort takes
place. The following nine dimensions of quality have been developed from the
technical literature on quality and synthesize ideas from various QA experts. Together,
they provide a useful framework that helps health teams to define, analyze, and
measure the extent to which they are meeting program standards for clinical care and
for management services that support service delivery. While all of these dimensions
are relevant to developing country settings, not all nine deserve equal weight in every
program. Each should be defined according to the local context and specific programs.
z Technical performance: The degree to which the tasks carried out by health
workers and facilities meet expectations of technical quality (i.e., adhere to
standards).
z Access to services: The degree to which healthcare services are unrestricted by
geographic, economic, social, organizational, or linguistic barriers.
z Effectiveness of care: The degree to which desired results (outcomes) of care are
achieved.
z Efficiency of service delivery: The ratio of the outputs of services to the
associated costs of producing those services.
z Interpersonal relations: Trust, respect, confidentiality, courtesy, responsiveness,
empathy, effective listening, and communication between providers and clients.
z Continuity of services: Delivery of care by the same healthcare provider
throughout the course of care (when appropriate) and appropriate and timely
referral and communication between providers.
z Safety: The degree to which the risks of injury, infection, or other harmful side
effect are minimized.
z Physical infrastructure and comfort: The physical appearance of the facility,
cleanliness, comfort, privacy, and other aspects that is important to clients.
z Choice: As appropriate and feasible, client choice of provider, insurance plan, or
treatment.
1.8 QUALITY AS A CUSTOMER DELIGHT

Customers are the special particulars of the company that can be defined as above
mentioned. The companies are only relying on the product quality and the service
functions. Customer is also looking for the good quality products so that the company
reaches to the expectations of the customer and the customer is satisfied. Different
customers make different satisfaction about the same product so the company can
figure out it by segmentation. Although satisfying consumer is the basic need of the
companies Customer delight is a key to success. Customer delight refers to if the
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16 company reaches beyond the expectations of the customer and the customer exceeded
Quality Techniques quality, then the customer is delighted. Customer cannot be delighted if he/she is not
satisfied, the factor of delightedness comes after the factor of satisfying consumer
need. The delighted customer is more valuable for the company as it will help to the
companies to compete with the competitors. A delighted customer finds the largest
perceived value-cost gap.
1.9 QUALITY AS MEETING STANDARDS

ISO Compliance is no longer a matter of choice for competitive companies. Recent
research shows that ISO accredited companies have a distinct edge while competing
for international business and ensuring customer confidence. ISO compliance is
perceived by many as an important value addition by quality conscious buyers
worldwide. In particular, the ISO 9000 Series of Standards is the most widely
accepted quality assurance model in the world. Today, ISO 9000 boasts over 500,000
registrations, issued in 149 countries and economies according to The ISO Survey of
ISO 9001:2000 and ISO 14001 Certificates–2003.
The goal of these standards are to reduce waste and variation in product characteristics
and process parameters, address traceability issues and promote continual
improvement of the effectiveness of quality management systems. Adherence to ISO
9001 standards can be one of the most effective risk management tools organizations
can use to prevent, detect or control nonconforming products and services, and thus
increase sustained compliance.
ISO standards are categorized into several distinct “families” of standards. The quality
management family is defined by ISO 9000. This body of standards addresses all
quality management and continuous improvement standards to ensure compliance
with regulatory standards and guidelines that ultimately help enhance customer
satisfaction.
Environmental management is addressed through the ISO 14000 family. The goal of
this body of standards is to help minimize harmful effects on the environment caused
by its activities, and to achieve continual improvement of its environmental
performance.
To achieve compliance with ISO guidelines, organizations must establish an effective
system to facilitate the management of its core processes. Processes such as customer
satisfaction, product quality, compliance, or environmental all require effective
controls to meet ISO standards. Most forward-thinking companies have automated
critical procedures to help increase operational efficiency and reduce error, using the
latest technology solutions available on the market.
1.9.1 ISO Best Practices

To achieve compliance with ISO guidelines, the following best practices should form
the basis of all ISO programs:
z Establish clearly defined business processes: The first step in ISO compliance is
to clearly define business processes that are essential to quality control. Once
these processes are identified and documented, steps can be taken to optimize
processes for maximum efficiency.
z Conduct detailed internal audits and identify gaps: An internal audit of all
quality and business processes is a good first step towards ISO compliance. The
audit will reveal quality gaps and identify process inefficiencies. Once this
proactive step is taken, it is important to take corrective action to ensure that all
audit issues are addressed in a timely manner.
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z Conduct external quality audits: External audits serve as independent validation 17
Concept of Quality
and verification of your processes and are an essential requirement for ISO
compliance.
z Establish effective closed-loop corrective and preventive action processes: Once
processes are established, an effective closed-loop corrective and preventive
action process should be implemented for optimal results. The closed-loop nature
of the process ensures that all issues will be addressed and closed as is
appropriate.
z Define and publish quality control procedures: ISO mandates written quality
control procedures. These procedures should be written, approved, and distributed
throughout the organization to ensure compliance.
z Define quality monitoring processes: No ISO process is complete without an
effective way of monitoring processes. Monitoring is an essential requirement for
ISO because it ensures that guidelines are consistently being followed.
z Establish continuous improvement guidelines and procedures: The monitoring
process will reveal the need for continuous improvement of the product or process
governed. Continuous improvement guidelines should be established to ensure
that these issues are addressed in the most appropriate manner. These guidelines
should be published and distributed to ensure consistency and completeness.
z Establish and maintain an effective training program: ISO compliance also
mandates that all affected persons within an organization receive proper training.
This is essential to quality assurance and risk mitigation. It is current best practice
to automate the training and tracking process to ensure compliance with stated
training requirements. Most organizations use training tracking technology to
address these requirements.
z Implement quality process automation: As organizations mature in their
approach towards ISO compliance, they are seeking to automate ISO-related
processes. More importantly, they seek to do this without expensive software
customization and professional services, which are the bane of the industry.
Amadeus solutions empower organizations to achieve ISO compliance by
delivering solutions that address these requirements in the most comprehensive
manner. The Amadeus solution represents a “best practice” in and of itself as the
best way to achieve sustained compliance and establish a consistent approach
across the organization.
z Drive quality from the top down: Quality impacts every aspect of business and
ultimately affects the client or end user. Thus, it is current best practice to drive
ISO initiatives from the very top of the organization to ensure adequate resource
allocation where appropriate and enforcement of ISO policies.
1.10 ACTUAL VS PERCEIVED QUALITY

The battle between perceived quality and actual quality truly is an epic struggle.
Generally though, when we speak of this dichotomy, we aren’t talking about trying to
convince consumers that a bad product is good, as it might seem at first glance. First
of all, we have to own up to the reality that as much as we like to use such labels, no
products are completely good or bad; rather they all exist in varying degrees of grey
between the two. And second of all, no legitimate business with any long-term success
has ever set out to make an intentionally terrible product with the goal of selling it on
false merit, so banish any thoughts of evil corporations trying to trick you out of your
money, because it doesn’t factor into our equation.
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18 For the most part, companies worldwide are doing the best they can to create products
Quality Techniques that people want to buy. We may occasionally berate their massively misguided
attempts at doing so (Pontiac Aztek, Microsoft Zune, any cell phone by LG, etc.) but
if one were to step back and view these attempts objectively, even the worst products
satisfy the most basic set of functions that is required of them (the Aztek could be
driven, the Zune played MP3s if you could figure it out, and LG phones make calls
most of the time). Typically, the quality of a mass-produced product falls somewhere
between a C- and an A+, or in other words, very few companies are getting an F;
spending the type of money necessary to launch something, only to find out that it
doesn’t work at all.
If we continue the grading analogy, the curve is set fairly high for consumer products.
It’s very difficult to be the star student when everyone else in your class is getting the
same grades as you, and this is why the idea of perceived quality is so important.
The auto industry is one of the best examples of how perceived quality dominates
actual quality. Despite the fact that all cars share 99% of the same technology,
materials, and construction techniques, car companies move mountains to establish
characteristics that are perceived as being unique to each nameplate. For decades,
Toyota and Honda have been seen as the ultimate quality brands. Their cars outlast
any other on the road, and are light-years ahead of any other manufacturer when it
comes to dependability. Want to know who beat them in JD Power’s 2010
dependability rankings? – Lincoln, Buick, and Mercury (in addition to the slightly
less surprising Porsche, and Lexus; a division of Toyota). The interesting thing is not
that Honda and Toyota have been beat at their own game, but that their brand
positions, and in turn, their public perceptions remain unchanged.
Toyota and Honda place numbers 1 and 2, respectively, on ALG’s perceived quality
rankings, despite the host of recalls both have endured over the past year, while Buick
ranks 13th, Mercury falls to 20th, and Lincoln doesn’t even make the cut. Over the
years, both Japanese brands’ claims of quality have been backed up by their
customers’ real world experiences, and even now that they have lost a step and their
competition has leapfrogged them, that perception persists. Not even uncontested data
and widely publicized problems within the two companies have made a dent in their
brand armor.
But the word quality does not always have to mean the physical and functional
integrity of an item. ‘Quality’ can be replaced with ‘qualities’ to mean something
completely different. Within the same industry, each auto brand is trying to express a
vastly different set of qualities to persuade customers to choose them over their
competition. BMW is seen as one of the premier luxury brands, and its brand position
as ‘the Ultimate Driving Machine’ cannot be rivaled by any competitor. Again, this is
due to the fact that over several decades, sporty, stylish cars flowed out of Munich as
though a spigot could not be turned off. However in recent years, the company’s
prowess has been challenged not just by predictable competitors like Mercedes Benz,
Audi, and even Jaguar, but by the most unlikely of sources; Hyundai.
Customers are moving towards services and quality. Delighted customer can do a lot
in the favour of a company. On the other hand, a complaining customer can harm a
lot.
The Hyundai Genesis is being quietly lauded by auto publications as being a real
challenger to the BMW 5 series, Audi A6, Mercedes E Class, and Jaguar XF.
It handles comparably, shares many of the same features, and does so for nearly
$20,000 less. The challenge for Hyundai is that their perceived qualities do not live up
to the standard set by their actual qualities. BMW, Audi, Mecedes Benz, and Jaguar
all have brands that support their claims as being the top luxury carmaker in one way
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or another, while the vast majority of informed consumers would say that Hyundai 19
Concept of Quality
simply doesn’t belong in the same comparison test, despite the data saying otherwise.
What many companies fail to realize is that perception is reality. If consumers think a
product is made poorly, it doesn’t matter that it can be run over by an Abrahams Tank
and survive. The purveyors of such goods often treat their customer bases with
contempt, believing that they pulled the short straw and that they were simply the
victims of a fickle populous needing someone to be at the bottom of the pile, but the
reality is that brands all have the power to change the way that people think about the
products they offer, and sometimes that change can be as simple as adjusting the
context through which the product is showcased.
Fill in the blanks:
1. …………… satisfaction is the priority objective of quality policy.
2. …………… of a product or service will not exist unless and until it is
translated into experience.
3. …………… is a universal paradigm that provides a foundation for a
complete quality system.
1.11 LET US SUM UP

The quality movement has matured during the present millennium. Many experts have
contributed from the three continents. The achievements of Japan in particular are
noteworthy – where quality principles were first implemented in large industries.
In the West, production was started by people who became proficient in the processes.
They were later forgotten and stress was given to methods, techniques and technology.
Now workmen are again in the front, contributing to quality.
1.12 LESSON END ACTIVITY

Discuss why quality is so important everywhere from production to manufacturing,
sales to marketing, accounting to finance.
1.13 KEYWORDS
Plan: A specified course of action designed to attain a specified objective.
Prevention: A future-oriented approach to quality management that achieves quality
improvement through curative action on the process.
Quality: Quality denotes an excellence in goods and services, especially to the degree
they conform to requirements and satisfy customers.
1.14 QUESTIONS FOR DISCUSSION

1. Describe the objectives of quality.
2. Explain the need and importance of quality.
3. What are the determinants of quality?
4. Describe evolution of quality.
5. Distinguish between actual and perceived quality.
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21
LESSON Concept of Total Quality
2
CONCEPT OF TOTAL QUALITY
CONTENTS
2.1 Introduction
2.2 Concept of Total Quality
2.2.1 Quality Management
2.2.2 Design
2.2.3 Input
2.2.4 Process
2.2.5 Output
2.3 Need for Quality
2.4 Functions of Quality
2.5 Total Quality Model
2.5.1 Quality Management in State and Public Sectors
2.6 Enablers for Total Quality
2.7 Philosophy of Quality
2.7.1 Walter A. Shewhart (1891–1967)
2.7.2 Joseph M. Juran (born in 1904)
2.7.3 Armand V. Feigenbaum
2.7.4 Kaoru Ishikawa (1915–1989)
2.8 Old vs New Quality
2.9 Quality as a Problem and a Challenge
2.10 Let us Sum up
2.12 Keywords

z Define total quality
z Describe quality needs
z Know functions of quality
z Discuss total quality model
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22 z List the enablers for total quality
Quality Techniques z Explain quality philosophy
z Differentiate between old vs new quality
2.1 INTRODUCTION
The management control system in a TQM environment operates through "control
points" which are the measures of results. These are deployed down the line with great
care, thus clarifying roles and responsibilities. Information flow occurs with a clear
purpose, either to support control or decision-making. Advances in information
technology could facilitate these changes, but TQM does not need an over-skill with
information technology.
2.2 CONCEPT OF TOTAL QUALITY

Quality is a subjective term for which each person or sector has its own definition.
In technical usage, quality can have two meanings:
z The characteristics of a product or service that bear on its ability to satisfy stated
or implied needs
z A product or service free of deficiencies. According to Joseph Juran, quality
means “fitness for use;” according to Philip Crosby, it means “conformance to
requirements.”
2.2.1 Quality Management

Quality management is “the application of a quality management system in managing
a process to achieve maximum customer satisfaction at the lowest overall cost to the
organization while continuing to improve the process.”
“Quality as a concept is defined as an ability of a product or service to fulfill the
expectations set by the customers”. A prerequisite to quality creation is quality control
that includes a group of statistical quality improvement methods, quality systems and
systemization. To create sustainable competitive advantage from the created operative
quality, on the other hand, requires economical and strategic thinking. “If the goods
satisfy the customer and the process runs error-free, one should be able to turn this
capability into profit”.
The definition of quality will be bindingly determined by each industry. For instance,
there are legally binding quality definitions within the food industry (international
HACCP-Hygiene standards Hazard Analysis Critical Control Point) or the strong
quality standards of the automobile industry (e.g. in Germany the Standards of
Verbands der Automobilindustrie (VDA 6) or the norm ISO TS 16949, which defines
the standards of the European and American automobile industry. There are also other
in some countries, such as norms defined by the handy-crafts code. In these codes, one
can find sometime relatively precise descriptions such as technical rules. It is
important that the producer follows the generally accepted quality standard.
Otherwise, it is most possible that the producer will squeezed out of the market. The
slogan should be: The customer should come back not the product.
Quality management is concerned with getting things right. It may be critically
important to drive out all possibility of errors – or it may be acceptable to take
delivery of a product or service that is 'good enough'. For example, in construction it is
essential that prefabricated components will fit together exactly when a building is
constructed; quality in this context is about getting things right first time. However,
for the design of a new e-business service, there may be a number of prototypes that
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gradually improve as understanding of the customer requirement increases – this is 23
Concept of Total Quality
about achieving quality that is fit for purpose where it is recognized that perfection
cannot be achieved in one step. This briefing is in draft form and currently focuses on
quality management systems. In the next version it will include the wider context of
quality management.
There are many definitions of quality, such as "fitness for use", "fitness for purpose",
"customer satisfaction", "conformance to requirements". Each of these statements
represents a facet of quality and is incorporated into the international definition, given
below:
"The totality of features and characteristics of a product or service that bear on its
ability to satisfy stated or implied needs." ISO 8402–1986
A quality service, therefore, is one which is fit for its purpose and which satisfies
customer requirements both stated and implied.
Stated needs are those set out in the customer's specification of requirements. They
should include a complete, consistent and unambiguous set of functional and
non-functional requirements necessary to satisfy the customer's need. Non-functional
requirements usually include service characteristics such as: availability, reliability,
usability, maintainability, contingency, levels of support and constraints. All service
requirements should be defined clearly in terms of observable characteristics that can
be evaluated by the customer.
2.2.2 Design
Design is a strategic decision as the image and profit earning capacity of a small firm
depends largely on product design. Once the product to be produced is decided by the
entrepreneur the next step is to prepare its design. Product design consists of form and
function. The form designing includes decisions regarding its shape, size, color and
appearance of the product. The functional design involves the working conditions of
the product. Once a product is designed, it prevails for a long-time therefore various
factors are to be considered before designing it. These factors are listed below:
z Standardization
z Reliability
z Maintainability
z Servicing
z Reproducibility
z Sustainability
z Product simplification
z Quality Commensuration with cost
z Product value
z Consumer quality
z Needs and tastes of consumers.
Above all, the product design should be dictated by the market demand. It is an
important decision and therefore the entrepreneur should pay due effort, time, energy
and attention in order to get the best results.
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24 2.2.3 Input
Quality Techniques Input in quality management process includes:
z Quality policy
z Scope statement
z Product description
z Standards and regulations
z Other process
2.2.4 Process
According to TQM a quality product comes from a quality process. This means that
quality should be built into the process. Quality at the source is the belief that it is far
better to uncover the source of quality problems and correct it than to discard
defective items after production. If the source of the problem is not corrected, the
problem will continue. For example, if you are baking cookies you might find that
some of the cookies are burned. Simply throwing away the burned cookies will not
correct the problem. You will continue to have burned cookies and will lose money
when you throw them away. It will be far more effective to see where the problem is
and correct it. For example, the temperature setting may be too high; the pan may be
curved, placing some cookies closer to the heating element; or the oven may not be
distributing heat evenly.
Quality at the source exemplifies the difference between the old and new concepts of
quality. The old concept focused on inspecting goods after they were produced or after
a particular stage of production. If an inspection revealed defects, the defective
products were either discarded or sent back for reworking. All this cost the company
money, and these costs were passed on to the customer. The new concept of quality
focuses on identifying quality problems at the source and correcting them.
2.2.5 Output
Input in quality management process includes:
z Quality Management Plan
z Operational definitions
z Checklists
z Other processes
2.3 NEED FOR QUALITY

According to Juran, there remains need for quality as it involves “fitness for use as
seen by the user” (or, rather, something like “approximate fitness for use as seen by a
big enough group of users”). Put at its most simple, we define service quality
management as the processes and systems used to monitor and manage the service
provided by a company. We see it as part of an operator's OSS (operational support
system). An OSS is net of computerised systems that support the business and
operational processes peculiar to the online business industry. These are broadly:
z Order management
z Inventory and workforce management
z Mediation and service provisioning.
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According to industry insiders there are two schools of thought about managing 25
network quality. One view is that the network has inbuilt mechanisms to control and
heal itself–a view subscribed to by many network equipment vendors. On the other
hand, many feel that, from a business point of view, an overall system of control is
needed. Networks are composed of many desperate elements. Whilst they may well be
generating alarms and be able to heal themselves to some extent, this does not
necessarily take into account any knock-on effects or an unusual combinations of
events. One of the primary aims of network management is to be able to understand
the root cause of performance problems. There also remains a need for quality as
effective management of the service network brings with it a number of benefits:
z Improved performance
z Better return on investment by facilitating maximizing use of resources
z Revenue assurance
z Improved customer satisfaction
z Better forecasting.
Network management draws this information together into reports that are used for the
various activities. Some of these activities can happen automatically and some will
need human intervention. The network monitoring and management process entails
three activities:
z Collecting data from the network
z Sorting and analysing this data
z Presenting the findings as intelligible reports that provide visibility, in
understandable terms, of the behaviour of the networks and the services that ride
upon them.
This overall process is service quality management.
There has been considerable realignment in the service market through mergers,
acquisitions and divestments. This coupled with the development of new services,
means that operators are increasingly operating in a multi-vendor, multi-technology
environment. Their newly acquired companies may well be using equipment sourced
from different vendors, or may even be offering different services. Network
monitoring and management needs to have the ability to address this type of
environment, and all types of network – fixed, mobile, IP and cable, across all
domains including switching, transport and access. In this climate, the need and
importance of quality remains in benefiting the operators, in understanding the
network behaviour through effective use of the information generated from network
monitoring are broadly:
z Operations-related centred on protecting the service provider's infrastructure
whilst making the most of its assets and streamlining operations.
z Business-related reducing costs such as SLA penalties, maximising revenues and
satisfying customers.
z Understanding and controlling network performance.
z Keeping track of the growing complexity of networks.
Further, the importance of the Quality of Service Management approach lays in the
fact that, it:
z Allow you to quantify the monetary benefits of a particular configuration so that
you can obtain the maximum profit from that environment.
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26 z Allow you to predict when upgrades and enhancements will be required so they
Quality Techniques can be planned and achieved at lowest possible cost.
z Ensures that you can plan and prepare better Service Level Agreement targets,
confident in the knowledge that you can support them without penalty.
z Provides the means to measure and maximise the return on your investments
while minimising overall Total Cost of Ownership.
Today's growth in Service Level Agreements and the costs involved with entire
service networks are significant management challenges that need to be addressed.
2.4 FUNCTIONS OF QUALITY

The definition of quality depends on the role of the people defining it. Most
consumers have a difficult time defining quality, but they know it when they see it.
For example, although you probably have an opinion as to which manufacturer of
athletic shoes provides the highest quality; it would probably be difficult for you to
define your quality standard in precise terms. Also, your friends may have different
opinions regarding which athletic shoes are of highest quality. The difficulty in
defining quality exists regardless of product, and this is true for both manufacturing
and service organizations.
Fill in the blanks:

1. According to …………….., quality means “fitness for use”.
2. …………….. as a concept is defined as an ability of a product or service
to fulfill the expectations set by the customers.
3. According to industry …………….. there are two schools of thought
about managing network quality.
2.5 TOTAL QUALITY MODEL

There are many models of total quality management and it is really not necessary that
every organization should select and implement the same model. Following are the
various models of total quality management:
z Deming Application Prize
z Malcolm Baldrige Criteria for Performance Excellence
z European Foundation for Quality Management, and
z ISO quality management standards
The simplest model of TQM is shown in this figure 2.1. The model begins with
understanding customer needs. TQM organizations have processes that continuously
collect, analyze, and act on customer information. Activities are often extended to
understanding competitor's customers. Developing an intimate understanding of
customer needs allows TQM organizations to predict future customer behavior.
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27
Figure 2.1: TQM Model

TQM organizations integrate customer knowledge with other information and use the
planning process to orchestrate action throughout the organization to manage day to
day activities and achieve future goals. Plans are reviewed at periodic intervals and
adjusted as necessary. The planning process is the glue that holds together all TQM
activity.
TQM organizations understand that customers will only be satisfied if they
consistently receive products and services that meet their needs, are delivered when
expected, and are priced for value. TQM organizations use the techniques of process
management to develop cost-controlled processes that are stable and capable of
meeting customer expectations.
TQM organizations also understand that exceptional performance today may be
unacceptable performance in the future so they use the concepts of process
improvement to achieve both breakthrough gains and incremental continuous
improvement. Process improvement is even applied to the TQM system itself.
The final element of the TQM model is total participation. TQM organizations
understand that all work is performed through people. This begins with leadership. In
TQM organizations, top management takes personal responsibility for implementing,
nurturing, and refining all TQM activities. They make sure people are properly
trained, capable, and actively participate in achieving organizational success.
Management and employees work together to create an empowered environment
where people are valued. All of the TQM model's elements work together to achieve
results.
2.5.1 Quality Management in State and Public Sectors

In order to improve the quality of state management and the administrative abilities of
employees in the public sector specifically formulated quality assessment programs
are needed. Similarly, quality management models and methods for the improvement
and evaluation of the results of the activities carried out by these institutions are also
necessary. The widespread acceptance and use of quality management methods hinges
directly on society’s willingness to embrace this concept and fully appreciate its
benefits. Thus, the public needs to broaden its knowledge of issues relating to quality
and environmental management, competitive ability, regional EU and innovation
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28 politics, the creation of civil society, the general social responsibility of organisations,
Quality Techniques and so on. The quality and image-formation of national products and services and the
general improvement of the activities of organisations can only be secured through
cooperation between the state and businesses, the state and society, and among
businesses themselves. Fostering good-natured agreement between consumers,
employees and employers is also important.
These cooperative efforts depend on the attitudes of state management institutions and
initiatives that describe each party’s specific mission, quality policy, self-awareness
of their main product, indicators of its quality, and the expected consumers.
The cooperation of state management and community organisations along with the
guarantee of transparency and publicity of information creates a foundation from
which positive public opinion of the actions of state management organisations can be
formed. Their contribution to the improvement of the quality of life of all members of
society is then assured.
2.6 ENABLERS FOR TOTAL QUALITY

Information is the critical enabler of total quality management (TQM). More and more
successful companies agree that information technology and information systems
serve as keys to their quality success. Conversely, this component of TQM is
frequently the roadblock to improvement in many firms. In these firms, better quality
and productivity may not be the issue rather; the real issue may be better quality of
information.
Information and analysis criteria for performance excellence examine the selection,
management, and effectiveness of use of information and data to support company
processes and action plans and the company’s performance management system.
z Selection and use of information and data: The selection, management and use
of information and data to support overall business goals, with strong emphasis on
process management, action plans, and performance improvement. Overall, this
item represents a key foundation for a performance oriented company that
effectively utilizes non-financial and financial information and data.
z Selection and use of comparative information and data: External drivers of
improvement information and data related to competitive position and to best
practice. Such data might have both operational and strategic value.
z Analysis and review of company performance: The principal basis for guiding a
company’s process management toward key business results. Despite their
importance, individual facts and data do not usually provide a sound basis for
actions or priorities. Action depends upon understanding cause/effect relationships
between processes and business result.
A good quality management is essential for improving manufacturing
competitiveness. Most modern companies in the West have recognized the need to
alter their thinking in terms of quality and how that can improve their business
performance. Total quality management (TQM) has received considerable global
attention both from researchers and from practitioners. TQM has become an essential
strategy in both manufacturing and service organizations. This paper deals with the
implementation issues of TQM in a gas turbine company which is located in the UK.
The research involves studying the current quality problems in the company by
collecting and analysing the appropriate information through structured interviews of
employees.
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29
2.7 PHILOSOPHY OF QUALITY Concept of Total Quality
Various philosophers have presented their views with relation to quality. Some of
them are discussed below.
2.7.1 Walter A. Shewhart (1891–1967)

Born in Illinois, USA, Shewhart graduated University of Illinois and then he obtained
the doctorate in physics at University of California in 1917. Working at Western
Electric Company as an engineer, he was able to make a serious contribution to a
major problem: reliability of the equipment buried underground. Control charts
created by him were use to differentiate between assignable sources of variation and
pure chances of variation. Shewhart studied randomness and recognized variability
which exists in all manufacturing processes. In his opinion, reducing variability is
equivalent to quality improvement. Later Shewhart worked for Bell Telephone
Laboratories until his retirement in 1956. He wrote several articles and books, most
representative being Economic Control of Quality of Manufactured Product in 1931,
Statistical Method from the Viewpoint of Quality Control in 1939. One more thing
about Shewhart: he is considered to be the grandfather of quality control.
2.7.2 Joseph M. Juran (born in 1904)

Architect of Quality: The Autobiography of Joseph M. Juran (McGraw-Hill, 2003)...
"Juran, now 99 years old, begins his tale with his humble beginnings as a Romanian
peasant and his family’s immigration to the United States. He recounts how he
overcame poverty, anti-Semitism, bitterness and despair... This is a tale of how
education wins over ignorance, persistence prevails over complacence and, more than
anything else, and how faith (in God, in family, in humanity and in the American
dream) is rewarded."
The pattern for Juran’s life of hard work and dedication was set at an early age. "We
grew up with no fear of long hours or hard work," he writes. "We learned to seek out
opportunities and to use ingenuity to gain from them. We accepted the responsibility
for building our own safety nets. By enduring the heat of the fiery furnace, we
acquired a work ethic that served us the rest of our lives."
As a child, Juran endured the loss of his beloved mother, an indifferent father, bitter
winters, and the terror of anti-Semitism. Many residents of his native village in
Romania were perished in Nazi death camps and grinding poverty. Consequently, he
entered the working world bitter and socially inept, yet he was driven to succeed.
Juran’s story parallels many of the great events of the 20th century. He landed his first
job at Western Electric, which was the hot growth company of the 1920s. He
weathered the Great Depression, he served his adopted country during World War II
by working in the Lend-Lease Administration, he helped Japan rebuild its devastated
economy and he showed U.S. manufacturers how to compete successfully in the world
market.
Also remarkable is the success of Juran’s siblings. They, too, overcame their humble
beginnings and led successful lives. For example, his brother, Rudy, became a
successful bond trader; his brother, Nat, had a successful career in Hollywood, earning
an Academy Award; his sister, Minerva, earned a doctorate degree and became a
college professor – no small feat for a female Romanian immigrant."
Quality Digest issued an article which can be found at here. "No one in the last
hundred years has had more influence on the worldwide practice of quality in business
than Dr. Joseph Juran. In Architect of Quality, Juran recounts his fascinating life story,
revealing how he overcame dire poverty and childhood tragedy to make a profound
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30 impact on business and society. Juran retraces his inspiring life journey - from an
Quality Techniques impoverished, tragic childhood in a tar-papered shack to his career as the revered man
who helped invent and champion quality management systems, quality tools, and
teams long before they became standard practice. Architect of Quality delves deep
into Juran’s motivations, sharing for the first time how the early hardships he faced
and his relentless, aggressive spirit shaped his character and fueled his determination
to succeed."
Juran is considered to be after Deming the most important contributor to quality
management. He became well know after his book publishing Quality Control
Handbook in 1951. In Japan, Juran worked with manufacturers and taught classes on
quality. Even his philosophy is very similar to Deming's philosophy, there exists some
differences: while Deming emphasized the need for organizational transformation,
Juran believed that implementation of quality initiatives does not need dramatic
changes. Juran is the author of definition for quality: fitness for use, rather than simply
conformance to specifications. This way, Juran took into account the client, in terms
of his needs. Quality trilogy "quality planning, quality control and quality
improvement" represents another large contribution to quality. First part of trilogy is
concerned with identification of customers, product requirements and override of
business goals. The second part of trilogy implies the use of statistical control
methods. As for the third part, Juran believe is that improvement should be continual,
as well as breakthrough.
2.7.3 Armand V. Feigenbaum

Initiator of the concept of Total Quality Control, Feigenbaum published in 1961 one
of his referencing book, named Total Quality Control. An interesting aspect regarding
this book is that it was written when he was a doctoral student at MIT. The power of
his ideas was discovered by Japanese in 1950s, about the same time Juran visited
Japan. Quality principles set by Feigenbaum lay down on 40 keys. He promoted the
concept of a working environment where quality developments cover entire
organization; every single person in organization must have a truly commitment to
improve the quality. Learning from other's success story is essential.
In his book Quality Control: Principles, Practices and Administration, Feigenbaum
strove to move away from the then primary concern with technical methods of quality
control, to quality control as a business method. Thus he emphasized the
administrative viewpoint and considered human relations as a basic issue in quality
control activities. Individual methods, such as statistics or preventive maintenance, are
seen as only segments of a comprehensive quality control program.
Quality control itself is defined as: "An effective system for coordinating the quality
maintenance and quality improvement efforts of the various groups in an organization
so as to enable production at the most economical levels which allow for full customer
satisfaction". He stresses that quality does not mean "best" but "best for the customer
use and selling price". The word "control" in quality control represents a management
tool with 4 steps: Setting quality standards, Appraising conformance to these
standards, acting when standards are exceeded and Planning for improvements in the
standards.
Quality control is seen as entering into all phases of the industrial production process,
from customer specification and sale through design, engineering and assembly, and
ending with shipment of product to a customer who is happy with it. Effective control
over the factors affecting product quality is regarded as requiring controls at all
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important stages of the production process. These controls or jobs of quality control 31
can be classified as:
z New-design control,
z Incoming material control,
z Product control,
z Special process studies.
Feigenbaum argues that statistical methods are used in an overall quality control
program whenever and wherever they may be useful. However such methods are only
part of the overall administrative quality control system, they are not the system itself.
The statistical point of view, however, is seen as having a profound effect upon
Modern Quality Control at the concept level. Particularly, there is the recognition that
variation in product quality must be constantly studied within batches of product, on
processing equipment and between different lots of the same article by monitoring and
critical quality characteristics.
Modern Quality Control is seen by Feigenbaum as stimulating and building up
operator responsibility and interest in quality. The need for quality-mindedness
throughout all levels is emphasized, as is the need to "sell" the program to the entire
plant organization and the need for the complete support of top management.
Management must recognize that it is not a temporary quality cost-reduction activity.
From the human relations point of view, the quality control organization is seen as
both:
z A channel for communication for product-quality information,
z A means of participation in the overall plant quality program.
Finally, Feigenbaum argues that the program should be allowed to develop gradually
within a given plant or company. Feigenbaums preface to the third edition of Total
Quality Control in 1983 emphasizes the increased importance of buyers’ perceptions
of variation in quality between companies and also the variation in effectiveness
between the quality programs of companies. Quality is seen as having become the
single most important force leading to organizational success and company growth in
national and international markets. Further, it is argued that: "Quality is in its essence
a way of managing the organization" and that, like finance and marketing, quality has
now become an essential element of modern management.
Against this background, Total Quality Control is seen as providing the structure and
tools for managing quality so that there is a continuous emphasis throughout the
organization on quality leadership:
z Genuine investment in, and implementation of, modern technology for quality
throughout sales,
z Engineering and production: and top-to-bottom human commitment to quality and
productivity.
As Feigenbaum says: "In effect, quality and its costs are managed engineered and
motivated throughout the organization with the same thoroughness and depth.Wwith
which successful products and services are themselves managed and engineered and
produced and sold and serviced". Such Total Quality Control programs are highly
cost-effective because of their results in improved levels of customer satisfaction,
reduced operating costs, reduced operating losses and field service costs, and
improved utilization of resources. By-products such as sounder setting of time
standards for labour may also be most valuable. Thus a Total Quality System is
defined as: “The agreed company-wide and plant-wide operating work structure,
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32 documented in effective, integrated technical and managerial procedures, for guiding
Quality Techniques the coordinated actions of the people, the machines and the information of the
company and plant in the best and most practical ways to assure customer quality
satisfaction and economical costs of quality.” Operating quality costs are divided into:
z Prevention costs including quality planning
z Appraisal costs including inspection
z Internal failure costs including scrap and rework
z External failure costs including warranty costs, complaints, etc.
Reductions in operating quality costs result from setting up a total quality system for
two reasons:
z Lack of existing effective customer-orientated customer standards may mean
current quality of products is not optimal given use,
z Expenditure on prevention costs can lead to a several fold reduction in internal
and external failure costs.
2.7.4 Kaoru Ishikawa (1915–1989)

Ishikawa was a Japanese consultant, father of the scientific analysis of causes of
problems in industrial processes. One of his greatest contributions to quality was the
diagram which has his name "Ishikawa diagram" or Fishbone Diagram.
Professor Ishikawa was born in 1915 and graduated in 1939 from the Engineering
Department of Tokyo University having majored in applied chemistry. In 1947 he was
made an Assistant Professor at the University. He obtained his Doctorate of
Engineering and was promoted to Professor in 1960. He has been awarded the
Deming Prize and the Nihon Keizai Press Prize, the Industrial Standardization Prize
for his writings on Quality Control, and the Grant Award in 1971 from the American
Society for Quality Control for his education program on Quality Control.
While, perhaps ironically, the early origins of the now famous Quality Circles can be
traced to the United States in the 1950s, Professor Ishikawa is best known as a pioneer
of the Quality Circle movement in Japan in the early 1960s, which has now been
re-exported to the West. In a speech to mark the 1000th quality circle convention in
Japan in 1981, he described how his work took him in this direction. "I first
considered how best to get grassroots workers to understand and practice Quality
Control. The idea was to educate all people working at factories throughout the
country but this was asking too much. Therefore I thought of educating factory
foremen or on-the-spot leaders in the first place." In 1968, in his role as Chairman of
the Editorial Committee of Genba-To-QC (Quality Control for the Foreman)
magazine, Dr Ishikawa built upon quality control articles and exercises written by the
editorial committee for the magazine, to produce a "non-sophisticated" quality
analysis textbook for quality circle members. The book Guide to Quality Control was
subsequently translated into English in 1971, the most recent (2nd) edition being
published by the Asian Productivity Organization in 1986. Amongst other books, he
subsequently published “What is Total Quality Control? The Japanese Way” which
was again translated into English (Prentice Hall, 1985).
As with the other Japanese quality gurus, such as Genichi Taguchi, Kaoru Ishikawa
has paid particular attention to making technical statistical techniques used in quality
attainment accessible to those in industry. At the simplest technical level, his work has
emphasized good data collection and presentation, the use of Pareto Diagrams to
prioritize quality improvements and Cause-and-Effect (or Ishikawa or Fishbone)
Diagrams. Ishikawa sees the cause-and-effect diagram, like other tools, as a device to
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assist groups or quality circles in quality improvement. As such, he emphasizes open 33
group communication as critical to the construction of the diagrams. Ishikawa
diagrams are useful as systematic tools for finding, sorting out and documenting the
causes of variation of quality in production and organizing mutual relationships
between them. Other techniques Ishikawa has emphasized include control charts,
scatter diagrams, Binomial probability paper and sampling inspection.
Turning to organizational, rather than technical contributions to quality, Ishikawa is
associated with the Company-wide Quality Control movement that started in Japan in
the years 1955–1960 following the visits of Deming and Juran. Under this, quality
control in Japan is characterized by company-wide participation from top management
to the lower-ranking employees. Further, all study statistical methods. As well as
participation by the engineering, design, research and manufacturing departments, also
sales, materials and clerical or management departments (such as planning,
accounting, business and personnel) are involved. Quality control concepts and
methods are used for problem solving in the production process, for incoming material
control and new product design control, and also for analysis to help top management
decide policy, to verify policy is being carried out and for solving problems in sales,
personnel, labor management and in clerical departments. Quality Control Audits
internal as well as external form part of this activity.
To quote Ishikawa: "The results of these company-wide Quality Control activities are
remarkable, not only in ensuring the quality of industrial products but also in their
great contribution to the company’s overall business." Thus Ishikawa sees the
Company-wide Quality Control movement as implying that quality does not only
mean the quality of product, but also of after sales service, quality of management, the
company itself and the human being. This has the effect that:
z Product quality is improved and becomes uniform. Defects are reduced.
z Reliability of goods is improved.
z Cost is reduced.
z Quantity of production is increased, and it becomes possible to make rational
production schedules.
z Wasteful work and rework are reduced.
z Technique is established and improved.
z Expenses for inspection and testing are reduced.
z Contracts between vendor and vendee are rationalized.
z The sales market is enlarged.
z Better relationships are established between departments.
z False data and reports are reduced.
z Discussions are carried out more freely and democratically.
z Meetings are operated more smoothly.
z Repairs and installation of equipment and facilities are done more rationally.
z Human relations are improved.
One major characteristic of Japanese Company-Wide Quality Control is the Quality
Control Circle Movement started in 1962, with the first circle being registered with
the Nippon Telegraph and Telephone Public Corporation. Starting in industry in
Japan, these have now spread to banks and retailing, and been exported world-wide.
Success in the West has not been as extensive as in Japan; however, although even
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34 there have been limitations too. The nature and role of quality circles varies between
Quality Techniques companies. In Japan a quality circle is a typically voluntary group of some 5–10
workers from the same workshop, who meet regularly and are led by a foreman,
assistant foreman, work leader or one of the workers. The aims of the quality circle
activities are:
z To contribute to the improvement and development of the enterprise,
z To respect human relations and build a happy workshop offering job satisfaction,
z To deploy human capabilities fully and draw out infinite potential.
These aims are broader than is consistent with a narrow definition of quality as often
used in the West, and Circle activities reflect this. The members of the circle have
mastered statistical quality control and related methods and all utilize them to achieve
significant results in quality improvement, cost reduction, productivity and safety. The
seven tools of quality control are taught to all employees:
z Pareto charts
z Cause and effects diagrams
z Stratification
z Check sheets
z Histograms
z Scatter diagrams
z Shewharts control charts and graphs.
All members of the circle are continuously engaged in self-and-mutual development,
control and improvement whenever possible, the circles implement solutions
themselves, otherwise they put strong pressure on management to introduce them.
Since management is already committed to the circles, it is ready to listen or act.
Circle members receive no direct financial reward for their improvements.
The Japanese experience of quality circles itself provides an insight into the problems
of implementation in the West. Strangely enough, however, many companies in the
West have attempted to minimize or even cover up the Japanese origins, apparently to
avoid cultural rejection on antagonism to "Japanese workaholics" grounds. Even in
Japan many quality circles have collapsed, usually because of management’s lack of
interest or excessive intervention. However, many have worked. There are now more
than 10 million circle members there. The benefits are typically seen as being minor
from any one improvement introduced by a quality circle, but that added together they
represent substantial improvements to the company. Perhaps more importantly, greater
worker involvement and motivation is created through:
z An atmosphere where employees are continuously looking to resolve problems,
z Greater commercial awareness
z A change of shop floor attitude in aiming forever increasing goals.
Quality circles have been vigorously marketed in the West as a means of improving
quality. There seems to be agreement, however, that they cannot be used naively, and
take careful adoption for use in Western companies. Adoptions have been various and
of varying effectiveness; in some companies circles have been successful, or regarded
as such, in others they have failed. Many commentators, such as Philip Crosby, have
warned against the fashion for quality circles as a cure-all for poor employee
motivation or inadequate quality and productivity in either white-collar areas or on the
shop floor. The senior American Quality Guru Joseph Juran, in particular, has gone
further, in throwing doubts on their likely effectiveness in the West at all where few
company hierarchies are permitted with executives trained in quality management.
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35
2.8 OLD VS NEW QUALITY Concept of Total Quality
The difference between old and new quality lies in the fact that the old is the work of
craftsman, whereas the view is the work of a system. Old quality was created by a
few, for the few. New Quality is the work of many for many. The first is expensive in
terms of labour if not cash while the second, reduces cost. Old quality still matters
because it produces beautiful products. However, new quality can drive the economy
by making business more competitive and by serving the population with products and
services of a certain standards never before achieved. Table 2.1 states the differences
between old quality and new quality.
Table 2.1: Old versus New Quality
Old Quality New Quality
About products About organizations
Technical Strategic
For inspectors For everyone
Led by experts Led by management
High grade The appropriate grade
About control About improvement
Little “q” Big “Q”
According to the conventional view of quality products are manufactured exactly to

specifications. As per the new view of quality (total quality), products and services
totally satisfies customer needs and expectations in every respect on a continuous
basis.
2.9 QUALITY AS A PROBLEM AND A CHALLENGE

Quality as a Problem: A problem occurs when there is a difference between what
"should be" and what "is"; and it also occurs between the ideal and the actual
situation. A problem:
z Expresses the difference between the hoped for and the actual situation;
z Is directly or indirectly related to the health of the population;
z Is expressed in terms of processes, effects, impacts, and satisfaction.
Quality as a Challenge: Improve quality in our internal processes, thereby securing
cost leadership and improved customer perception of quality. We will invest in areas
that we believe will generate the highest return. For example, by making sure that we
handle the root cause of a problem for the customer, we can minimize the number of
calls to the call center, i.e. we can lower the customer care cost. This will help us not
only to achieve cost leadership, but also to deliver better and more consistent services
to our customers. We always prioritize according to the end user impact, when
focusing on internal processes.
Key Priorities:
z Review quality measures for relevance based on what customers say is important.
z Measure and manage relevant KPIs in critical areas in order to improve operating
efficiency and the quality of services delivered to customers.
z Develop a quality model by synchronizing people, processes, and systems around
customer experiences.
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38
Quality Techniques
LESSON
3
SIX SIGMA CONCEPT
CONTENTS
3.1 Introduction
3.2 Six Sigma
3.2.1 Historical Overview
3.2.2 Origin and Meaning of the Term "Six Sigma Process"
3.2.3 Methodology
3.2.4 Implementation Roles
3.2.5 Quality Management Methods used in Six Sigma
3.3 Six Sigma Roles and Responsibilities
3.4 Let us Sum up
3.6 Keywords

z Describe six sigma
z Identify six sigma roles and responsibilities
3.1 INTRODUCTION
Six Sigma is a process improvement methodology developed at Motorola in the1980’s
to reduce defects in its processes. Its goal was to achieve a level of performance equal
to a defect rate of 3.4 defects per million opportunities – this is a virtually defect free
environment i.e. Six Sigma performance. Similarly, Motorola Inc. Six Sigma
methodology emerged in the 1980s from Total Quality Management, a core element
of industrial engineering.
The roots of Six Sigma as a measurement standard can be traced back to Carl
Frederick Gauss (1777–1855) who introduced the concept of the normal curve. Six
Sigma as a measurement standard in product variation can be traced back to the 1920's
when Walter Shewhart showed that three sigma from the mean is the point where a
process requires correction. Many measurement standards (Cpk, Zero Defects, etc.)
later came on the scene, but credit for coining the term "Six Sigma" goes to a
Motorola engineer named Bill Smith.
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39
3.2 SIX SIGMA Six Sigma Concept
Six Sigma is a widely used methodology for measuring and improving an

organization’s operational performance through a rigorous analysis of its practices and
systems.
Six Sigma is a business management strategy, originally developed by Motorola that
today enjoys wide-spread application in many sectors of industry.
Six Sigma seeks to identify and remove the causes of defects and errors in
manufacturing and business processes. It uses a set of quality management methods,
including statistical methods, and creates a special infrastructure of people within the
organization ("Black Belts" etc.) who are experts in these methods. Each Six Sigma
project carried out within an organization follows a defined sequence of steps and has
quantified financial targets (cost reduction or profit increase).
3.2.1 Historical Overview

Six Sigma was originally developed as a set of practices designed to improve
manufacturing processes and eliminate defects, but its application was subsequently
extended to other types of business processes as well in Six Sigma, a defect is defined
as anything that could lead to customer dissatisfaction.
The particulars of the methodology were first formulated by Bill Smith at Motorola in
1986. Six Sigma was heavily inspired by six preceding decades of quality
improvement methodologies such as quality control, TQM, and Zero Defects, based
on the work of pioneers such as Shewhart, Deming, Juran, Ishikawa, Taguchi and
others.
Like its predecessors, Six Sigma asserts that:
z Continuous efforts to achieve stable and predictable process results (i.e. reduce
process variation) are of vital importance to business success.
z Manufacturing and business processes have characteristics that can be measured,
analyzed, improved and controlled.
z Achieving sustained quality improvement requires commitment from the entire
organization, particularly from top-level management.
Features that set Six Sigma apart from previous quality improvement initiatives
include:
z A clear focus on achieving measurable and quantifiable financial returns from any
Six Sigma project.
z An increased emphasis on strong and passionate management leadership and
support.
z A special infrastructure of "Champions", "Master Black Belts", "Black Belts" etc.
to lead and implement the Six Sigma approach.
z A clear commitment to making decisions on the basis of verifiable data, rather
than assumptions and guesswork.
The term "Six Sigma" derives from a field of statistics known as process capability
studies. Originally, it referred to the ability of manufacturing processes to produce a
very high proportion of output within specification. Processes that operate with "six
sigma quality" are assumed to produce defect levels below defects per million
opportunities (DPMO). Six Sigma's implicit goal is to improve all processes to that
level of quality or better.
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40 Six Sigma is a registered service mark and trademark of Motorola, Inc. Motorola has
Quality Techniques reported over US$17 billion in savings from Six Sigma as of 2006.
Other early adopters of Six Sigma who achieved well-publicized success include
Honeywell International (previously known as Allied Signal) and General Electric,
where the method was introduced by Jack Welch. By the late 1990s, about two-thirds
of the Fortune 500 organizations had begun Six Sigma initiatives with the aim of
reducing costs and improving quality.
In recent years, Six Sigma has sometimes been combined with lean manufacturing to
yield a methodology named Lean Six Sigma.
Graph of the normal distribution, which underlies the statistical assumptions of the Six
Sigma model. The Greek letter σ marks the distance on the horizontal axis between
the mean, µ, and the curve's point of inflection. The greater this distance is the greater
is the spread of values encountered. For the curve shown in red above, µ = 0 and
σ = 1. The other curves illustrate different values of µ and σ.
3.2.2 Origin and Meaning of the Term "Six Sigma Process"

The following outlines the statistical background of the term Six Sigma:
Sigma (the lower-case Greek letter σ) is used to represent the standard deviation
(a measure of variation) of a statistical population. The term "six sigma process"
comes from the notion that if one has six standard deviations between the mean of a
process and the nearest specification limit, there will be practically no items that fail to
meet the specifications. This is based on the calculation method employed in a process
capability study.
In a capability study, the number of standard deviations between the process mean and
the nearest specification limit is given in sigma units. As process standard deviation
goes up, or the mean of the process moves away from the center of the tolerance,
fewer standard deviations will fit between the mean and the nearest specification limit,
decreasing the sigma number.
Experience has shown that in the long-term, processes usually do not perform as well
as they do in the short. As a result, the number of sigmas that will fit between the
process mean and the nearest specification limit is likely to drop over time, compared
to an initial short-term study. To account for this real-life increase in process variation
over time, an empirically-based 1.5 sigma shift is introduced into the calculation.
According to this idea, a process that fits six sigmas between the process mean and the
nearest specification limit in a short-term study will in the long term only fit 4.5
sigmas – either because the process mean will move over time, or because the
long-term standard deviation of the process will be greater than that observed in the
short term, or both.
Hence the widely accepted definition of a six sigma process is one that produces 3.4
defective parts per million opportunities (DPMO). This is based on the fact that a
process that is normally distributed will have 3.4 parts per million beyond a point that
is 4.5 standard deviations above or below the mean (one-sided capability study).
So the 3.4 DPMO of a "Six Sigma" process in fact corresponds to 4.5 sigmas, namely
six sigmas minus the 1.5 sigma shift introduced to account for long-term variation.
This is designed to prevent overestimation of real-life process capability.
3.2.3 Methodology
Six Sigma has two key methodologies: DMAIC and DMADV both inspired by
Deming's Plan-Do-Check-Act Cycle. DMAIC is used to improve an existing business
process; DMADV is used to create new product or process designs.
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DMAIC 41
Six Sigma Concept
The basic methodology consists of the following five steps:
z Define process improvement goals that are consistent with customer demands and
the enterprise strategy.
z Measure key aspects of the current process and collect relevant data.
z Analyze the data to verify cause-and-effect relationships. Determine what the
relationships are, and attempt to ensure that all factors have been considered.
z Improve or optimize the process based upon data analysis using techniques like
Design of Experiments.
z Control to ensure that any deviations from target are corrected before they result
in defects. Set up pilot runs to establish process capability, move on to production,
set up control mechanisms and continuously monitor the process.
DMADV
The basic methodology consists of the following five steps:
z Define design goals that are consistent with customer demands and the enterprise
strategy.
z Measure and identify CTQs (characteristics that are Critical To Quality), product
capabilities, production process capability, and risks.
z Analyze to develop and design alternatives, create a high-level design and evaluate
design capability to select the best design.
z Design details, optimize the design, and plan for design verification. This phase
may require simulations.
z Verify the design, set up pilot runs, implement the production process and hand it
over to the process owners.
DMADV is also known as DFSS, an abbreviation of "Design For Six Sigma".
3.2.4 Implementation Roles

One of the key innovations of Six Sigma is the professionalizing of quality
management functions. Prior to Six Sigma, quality management in practice was
largely relegated to the production floor and to statisticians in a separate quality
department. Six Sigma borrows martial arts ranking terminology to define a hierarchy
(and career path) that cuts across all business functions and a promotion path straight
into the executive suite.
Six Sigma identifies several key roles for its successful implementation.
z Executive Leadership includes the CEO and other members of top management.
They are responsible for setting up a vision for Six Sigma implementation. They
also empower the other role holders with the freedom and resources to explore
new ideas for breakthrough improvements.
z Champions are responsible for Six Sigma implementation across the organization
in an integrated manner. The Executive Leadership draws them from upper
management. Champions also act as mentors to Black Belts.
z Master Black Belts, identified by champions, act as in-house coaches on Six
Sigma. They devote 100% of their time to Six Sigma. They assist champions and
guide Black Belts and Green Belts. Apart from statistical tasks, their time is spent
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42 on ensuring consistent application of Six Sigma across various functions and
Quality Techniques departments.
z Black Belts operate under Master Black Belts to apply Six Sigma methodology to
specific projects. They devote 100% of their time to Six Sigma. They primarily
focus on Six Sigma project execution, whereas Champions and Master Black
Belts focus on identifying projects/functions for Six Sigma.
z Green Belts are the employees who take up Six Sigma implementation along with
their other job responsibilities. They operate under the guidance of Black Belts
and support them in achieving the overall objectives.
z Yellow Belts are employees who have been trained in Six Sigma techniques as
part of a corporate-wide initiative, but have not completed a Six Sigma project and
are not expected to actively engage in quality improvement activities.
3.2.5 Quality Management Methods used in Six Sigma

Six Sigma makes use of a great number of established quality management methods
that are also used outside of Six Sigma. The following table shows an overview of the
main methods used.
• 5 Whys • Failure mode and effects analysis
• Analysis of variance • General linear model
• ANOVA Gage R&R • Histograms
• Axiomatic design • Homogeneity of variance
• Business process mapping • Pareto chart
• Catapult exercise on variability • Pick chart
• Cause & effects diagram (also known as • Process capability
fishbone or Ishikawa diagram) • Regression analysis
• Chi-square test of independence and fits • Run charts
• Control chart • SIPOC analysis (Suppliers, Inputs,
• Correlation Process, Outputs, Customers)
• Cost-benefit analysis • Stratification
• CTQ tree • Taguchi methods
• Customer survey • Thought process map
• Design of experiments • TRIZ
3.3 SIX SIGMA ROLES AND RESPONSIBILITIES

Successful implementation of Six Sigma is based on using sound personnel practices
as well as technical methodologies. The roles and responsibilities of different people
in a Six Sigma organization are shown in Exhibit 3.1.
Exhibit 3.1: Roles and Responsibilities in a Six Sigma Organization
To convey the need to vigorously attack problems, professionals are given martial arts titles
reflecting their skills and roles:
Quality Leader/Manager (QL/QM): The quality leader represents the needs of the customer.
The Quality function is independent from the manufacturing or transactional processing
functions to maintain impartiality. The quality leader is generally on the CEO's staff, and has
equal authority to all other direct reports.
Master Black Belt (MBB): Master Black Belts are typically assigned to a specific area or
function such as marketing or machine shop, die shop, etc. MBBs work very closely and share
information with the owners of the process to ensure that quality objectives and targets are set,
plans are determined, progress is tracked, and training is provided.
Contd…
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43
Six Sigma Concept
Process Owner (PO): Process owners are responsible for specific processes. For instance, in
the marketing department there is usually one person in charge of marketing the chief of
marketing is the process owner for marketing. Depending on the size of the business and core
activities, there may be process owners at lower levels of the organizational structure. For
example, in the marketing department there may be a head of marketing services: that's the
process owner.
Black Belt (BB): Black Belts are at the heart of the Six Sigma quality initiative. Their main
purpose is to lead quality projects and work full time until they are complete. Black Belts can
typically complete four to six projects per year. They also coach Green Belts on their projects.
Green Belt (GB): Green Belts are employees trained in Six Sigma who spend a portion of their
time completing projects, but maintain their regular work role and responsibilities.
Source: Adapted from 2000-2005 iSixSigma LLC
Six Sigma needs leaders and ‘champions’, truly committed to it, to promote it
throughout the organization. Corporate wide training in Six Sigma concepts and tools
is essential. Professionals in the organization need to be qualified in Six Sigma
techniques. MBBs receive in-depth training on statistical tools and process
improvement techniques. They must identify appropriate metrics early in the project.
They must make certain that the improvement effort focuses on business results that
are to be improved. They are the trainers of trainers.
Check Your Progress
Fill in the blanks:
1. Six Sigma is a business management strategy, originally developed by
……………. .
2. DPMO stands for ……………. .
3. Six Sigma has two key methodologies: DMAIC and ……………. .
4. CTO stands for ……………. .
5. DFSS stands for ……………. .
3.4 LET US SUM UP

The concept of Six Sigma is to improve the existing methodology or create a new,
defect-free methodology for production. This is achieved through a methodology
known as DMAIC, which is an acronym for Define opportunities, Measure
performance, Analyze opportunity, Improve performance, Control performance.
DFSS is the design for Six Sigma principles. Black and green belts evaluate the whole
system and various fixes are chosen to be implemented.
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LESSON 49
Introduction to Quality
Management
4
INTRODUCTION TO QUALITY MANAGEMENT
CONTENTS
4.1 Introduction
4.2 Why Quality Management?
4.3 Understand Some Basic Concepts
4.3.1 Concept of Quality
4.3.2 Dimensions of Quality
4.3.3 Dimensions of Quality for Goods
4.4 Quality Management Fundamentals
4.5 Evolution and Objectives
4.5.1 TQM Objectives
4.6 Planning for Quality
4.7 Process Steps in TQM
4.7.1 TQM as a Foundation
4.8 The Principles of TQM
4.9 TQM Framework to Quality Improvement
4.9.1 TQM Concepts in Context of IQ Improvement
4.9.2 A Triple Level Hierarchical Organization
4.9.3 Operations on IQ Customer Needs and Metrics
4.10 Let us Sum up
4.12 Keywords

z Know the need for quality management
z Define basic concepts and fundamentals of quality management
z Explain evolution and objectives of quality management
z Describe planning for quality
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50 z Explain the steps in TQM process
Quality Techniques z Know principles of TQM.
z Discuss TQM framework to quality management
4.1 INTRODUCTION
Quality and quality management does not have a formal definition, most agree that it
is an integration of all functions of a business to achieve high quality of products
through continuous improvement efforts of all employees. Quality revolves around the
concept of meeting or exceeding customer expectation applied to the product and
service. Achieving high quality is an ever changing, or continuous, process therefore
quality management emphasizes the ideas of working constantly toward improved
quality.
4.2 WHY QUALITY MANAGEMENT?

Total Quality Management (TQM) in its various forms appears to dominate business
life now a days. In the earlier days before the emergence of the Industrial Revolution,
quality did not pose any problem as the emphasis was on individual craftsmanship,
workmanship and skills. The era of mass production initiated the industrial revolution
and quality started getting attention. From then on, quality has been a problem
addressed for a long-time and has processed from stages of playing a purely reactive
role (inspection) to its present prominence in shaping the competitive strategy of
business. Figure 4.1 depicts this evolution. The development of quality management
through phases involved the work of pioneers such as Juran, Feingenbaum, Deming,
Crosby, Ishikawa and many others. We will learn more about the work of these
quality Gurus in the next unit as we go along. The quality movement has thus
progressed until the present day when quality has taken a central place in determining
the organisational objectives and competitive positives.
Figure 4.1: Evolution of Quality Management Concept

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It seems hat, besides the Japanese, the rest of the world has suddenly woken up from a 51
long sleep with eagerness and a sense of urgency to be updated on all the potential Management
benefits of quality which is being adopted as a way of conducting business. Let us
now look briefly at some of the important factors, which caused this realization. They
are:
z Question of survival in an intense competitive environment: The industrial
development in any society/country takes place in phase. In the initial phase,
subsequent to identifying a need, one or few suppliers emerge to provide the
product/service to satisfy the need of customers. This near-monopoly situation
dominated by the supplier creates a seller's market Lalebling the suppliers to
provide a product/service of the quality they are capable of providing without
bothering whether their products satisfy the need or not. However, soon in the
later phase, more and more suppliers looking for business opportunities emerge on
the scene creating a buyer's market enabling the customers to choose a supplier.
As you must have observed, over the last 10 years or so, phenomenal changes
have taken place in the economic scenario all over the world. By now, we are
sure, you are familiar with the terms "globalization" and "liberalization".
Economic barriers, which existed in many world economies, have broken down
and the whole world, economy-wise, has shrunk as one big market allowing
almost free exchange of goods and services. Suppliers now not only face
competition from domestic suppliers but also from the international ones. All the
suppliers try their best to retain and possibly increase their market share. We are
in the era of intense competition, and for suppliers all over the world it has
become a question of survival. Just conforming to specifications and satisfying the
needs of the customer is no more enough. The emphasis now is on delighting and
winning over customers. The earlier concepts of quality management have been
found inadequate to meet this objective, giving rise to the present concept of total
quality management.
z Increasing Customer Consciousness: Customers all over the world are becoming
increasingly conscious about getting more than just value for the money paid for
products and services they buy. Backed by government laws and regulations, a
number of agencies (governmental and non-governmental) have emerged which
are working for protection of consumer's interests. The needs of the customers
also keep on changing fast. Unless the suppliers are fast enough and are capable of
satisfying the changed needs, they just lose the customers, ultimately resulting in a
reduction in their market share.
z Need for earning profit instead of making profit: All business organizations have
to be profit-oriented as profits are essential for the very survival of the
organization and are also needed for its growth. In the earlier economic situation
of seller's market, organizations used to make profit through the age-old equation
of cost price (CP) + Profit (P) = Sales price (SP). The selling price used to be
fined in such a way that it automatically ensured making of as much profit as
desired by the supplier organization. In the present prevailing competitive buyer-
dominated situation, this equation is no more valid as the market forces now
determine the selling price. Therefore, if the supplier organization has to achieve
the profit objective, it has now to earn profit by controlling the cost price. As you
are aware, some of the major components which make up cost price are costs of
material, energy and human resources. You are also aware how all the three costs
keep on rising and the supplier organization has no control on the cost of these
inputs. So, for controlling the cost price, the only major way in the hands of the
supplier is to reduce what is known as 'quality cost' i.e. cost incurred by an
organization for making non-conforming products. The cost of repair,
reprocessing, regarding and/or scrapping non-conforming products form a big
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52 chunk of the total sales turnover – as much as 20% to 30% as revealed by way of
Quality Techniques case studies. You will learn more about quality cost as you go along. To reduce
the Quality Cost, the objective of the supplier should, therefore, be to make things
right first time and every time – a TQM approach.
z Organizational issues pointing to the need to focus on TQM:
That Leadership plays a very crucial role in the total business performance of
the organization has now been realized. The quality of an organisation is
largely influenced by the quality of its leader. And, therefore, it has to be a
major ingredient of quality management.
Human resource management is one issue that is receiving increasing
attention in organizations all, over the world. In fact, it has been a major factor
for many Japanese organizations to become world leaders. Though not
considered important enough earlier, it now forms another major component
of quality management.
The advent of revolution in information technology.
It intensifies the need for everyone in the organization to be computer literate.
The distribution of power relating to technical, problems solving, and
decision-making abilities in the organization through computer networks.
The speed, directness and immediacy of information exchange, both within
the organization at all level’s and between organizations and key external
stakeholders (suppliers and customers), is redefining business relationship and
responsibilities.
If you appreciate the factors listed above, you will realize the inadequacy of the
earlier static approach to quality management and the need for some dynamic
approach. This is provided by what has come to be known as Total Quality
Management approach (TQM). As per definition provided by the International
Organization for Standardization (ISO), TQM is a "management approach of an
organization, centered on quality, based on the participation of all its members and
aiming at long-term success through customer satisfaction, and benefits to all
numbers of the organization and to society".
4.3 UNDERSTAND SOME BASIC CONCEPTS

In this section, we will study about some basic concepts involved in quality
management.
4.3.1 Concept of Quality

Quality is defined as meeting or exceeding the needs and expectations of the
customer. It is necessary to give customers what they want, but customers may not be
willing to pay the price for features that vastly exceed their needs.
Quality can be defined as the degree to which a product is fit for the specific use.
It can be defined as products and services beyond present needs and expectations of
customers.
Quality simply means delivering to the customer what they expect. Thus, for example,
if a product:
z Has the right configuration/features,
z Does what it’s supposed to do,
z Is reliable,
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z Is delivered on time, and 53
z Is well supported, then……….. it’s a quality product! Management
Quality is defined as the totality of characteristics of an entity that bear on its ability to
satisfy stated or implied needs.
‘Quality is the ongoing process of building and sustaining relationships by assessing,
anticipating, and fulfilling stated and implied needs.’
The quality if a product is determined by how well it suits one’s needs in terms of:
z Reliability
z Durability
z Safety
z Maintainability
z Cost
4.3.2 Dimensions of Quality

Quality exists in five distinct dimensions. It is made up of
z Experience,
z Measurement,
z Relationships and Systems Thinking,
z Inter-connectivity and Paradigm Logic, and
z Value Sharing
Experience
Quality of a product or service will not exist unless and until it is translated into
experience. The ability to translate vision into reality is the primary impact of this
dimension. Experience is the translation into reality of the true state of vision of the
organization. Further, it provides learning. The successful organization is one that can
experiences learn from it.
Measurement
Measurement gives quality the first of its multidimensional characteristics. It provides
the ability to, not only assess experience, but also to determine how well or how
poorly it was done. This dimension provides the knowledge of the system. Examples
of this dimension are the use of statistical tools such as the check sheet, the Pareto
chart, the histogram, the run chart and the control chart.
Relationships and Systems Thinking

Systems thinking transform a quality system beyond a shallow, two-dimensional
system to one that is dynamic, integrated, and leveraged. The ability to see one set of
data plotted against another set of data reveals relationships and common threads.
From these, inferences can be drawn that begin to define the quality system and set its
parameters. It also addresses the impact of interpersonal relationships on trading
relationships.
Inter-connectivity and Paradigm Logic

The first three dimensions give us the ability to establish a system, as we measure the
results of relationships among various parts of the system and make modifications
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54 necessary to produce the desired results. However, a system existing only in three
Quality Techniques dimensions is a closed system. This dimension gives us the ability to look beyond
three-dimensional thinking to the inter-connectivity of all systems and processes. This
gives us the power to understand the paradigm, or set of rules or guiding principles,
upon which a system is based. The power of interconnectivity is that it provides a
foundation for quantum leaps in quality improvement.
Value Sharing
Value sharing is a universal paradigm that provides a foundation for a complete
quality system. An understanding of value sharing gives us the power to measure the
strength of relationships. The measure of this strength is in the willingness of
participants to consecrate resources to other participants or to a common good.
Value sharing is expressed in the phrase, “Delight the Customer.” In other words,
“Give the customer more than what the customer is paying for.”
As the relationship with the customer grows, there is mutual consecration of resources
by both parties as each share the value it derives from trade with the other party.
The five dimensions of value sharing involve the integration and fulfillment of all the
other dimensions with respect to all the participants.
Since quality means different things to different people, the dimension of quality is
also different. Dimensions of quality are also different for manufacturing and service
functions.
Example: Quality of Healthcare
Quality of care should be defined in light of both technical standards and patients'
expectations. While no single definition of health service quality applies in all
situations, the following common definitions are helpful guides:
Quality Assurance is that set of activities that are carried out to monitor and improve
performance so that the care provided is as effective and as safe as possible (Quality
Assurance Project, 1993).
The application of medical science and technology in a way maximizes its benefits to
health without correspondingly increasing its risks. The degree of quality is, therefore,
the extent to which the care provided is expected to achieve the most favorable
balance of risks and benefits (Avedis Donabedian, 1982).
Proper performance (according to standards) of interventions that are known to be
safe, that are affordable to the society in question, and that have the ability to produce
an impact on mortality, morbidity, disability, and malnutrition (M.I. Roemer and
C. Montoya Aguilar, WHO, 1983).
The most comprehensive and perhaps the simplest definition of quality is that used by
advocates of total quality management (W. Edwards Deming, 1982): "Doing the right
thing right, right away." Experts generally recognize several distinct dimensions of
quality that vary in importance depending on the context in which a QA effort takes
place. The following nine dimensions of quality have been developed from the
technical literature on quality and synthesize ideas from various QA experts. Together,
they provide a useful framework that helps health teams to define, analyze, and
measure the extent to which they are meeting program standards for clinical care and
for management services that support service delivery. While all of these dimensions
are relevant to developing country settings, not all nine deserve equal weight in every
program. Each should be defined according to the local context and specific programs.
z Technical performance: The degree to which the tasks carried out by health
workers and facilities meet expectations of technical quality (i.e., adhere to
standards).
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z Access to services: The degree to which healthcare services are unrestricted by 55
geographic, economic, social, organizational, or linguistic barriers. Management
z Effectiveness of care: The degree to which desired results (outcomes) of care are
achieved.
z Efficiency of service delivery: The ratio of the outputs of services to the
associated costs of producing those services.
z Interpersonal relations: Trust, respect, confidentiality, courtesy, responsiveness,
empathy, effective listening, and communication between providers and clients.
z Continuity of services: Delivery of care by the same healthcare provider
throughout the course of care (when appropriate) and appropriate and timely
referral and communication between providers.
z Safety: The degree to which the risks of injury, infection, or other harmful side
effect are minimized.
z Physical infrastructure and comfort: The physical appearance of the facility,
cleanliness, comfort, privacy, and other aspects those are important to clients.
z Choice: As appropriate and feasible, client choice of provider, insurance plan, or
treatment.
4.3.3 Dimensions of Quality for Goods

The dimensions of quality that can be explicitly defined and is exclusive of the other
dimensions of quality can be given as:
z Performance: It is the main or primary operating characteristics of the product.
Example: The mileage of a car.
z Features: Features are those secondary characteristics that supplement the
product’s basic functioning. These are the extra characteristics or the “extra” items
added to the basic features such as stereo CD in a car.
z Conformance: The degree to which the physical and performance characteristics
of a product match with pre-established standards.
z Reliability: The consistency of performance or the probability a product will
operate properly over a specified period of time under stated conditions.
Example: Usage of a fridge without repair for about seven years.
z Aesthetics: How a product looks, feels, tastes or smells. A dimension of quality
that refers to subjective sensory characteristics such as taste, sound, look and
smell.
z Durability: This includes useful life or life span of the product. It is the ability of
a product to function when subjected to hard and frequent use. It is measured as
the period or amount of use one gets from a product, before it physically
deteriorates or until replacement is preferable.
z Serviceability: This includes speed, courtesy and competence of repair. It
indicates the ability to repair a product quickly and easily including the courtesy
and competence of the repairer.
z Perceived Quality: Customer perception or subjective assessment resulting from
image, advertising or brand names.
z Safety: Assurance that the customer will not suffer injury or harm from a product.
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56 These dimensions of product quality provide a good conceptual framework for
Quality Techniques understanding the multidimensional nature of product quality. To determine the
dimensions of service quality is more difficult.
Fill in the blanks:
1. …………. plays a very crucial role in the total business performance of
the organization.
2. ISO stands for …………. .
3. …………. is the ongoing process of building and sustaining relationships
by assessing, anticipating, and fulfilling stated and implied needs.
4.4 QUALITY MANAGEMENT FUNDAMENTALS

Quality management is a tool that can help your enterprise to better fulfill your
customer's needs. The famous ISO 9001 standard is the formal expression of Best
Practices in business management: A well-implemented quality management system
will make business processes more efficient, reduce turnaround time and thus increase
job security.
Quality management systems can assist organizations in enhancing customer
satisfaction.
Customers require products with characteristics that satisfy their needs and
expectations. These needs and expectations are expressed in product specifications
and collectively referred to as customer requirements. Customer requirements may be
specified contractually by the customer or may be determined by the organization
itself. In either case, the customer ultimately determines the acceptability of the
product. As customer needs and expectations are changing. And because of
competitive pressures and technical advances, organizations are driven to improve
continually their products and processes.
The quality management system approach encourages organizations to analyse
customer requirements, define the processes that contribute to the achievement of a
product which is acceptable to the customer, and keep these processes under control.
A quality management system can provide the framework for continual improvement
to increase the probability of enhancing customer satisfaction and the satisfaction of
other interested parties. It provides confidence to the organization and its customers
that it is able to provide products that consistently fulfill requirements.
4.5 EVOLUTION AND OBJECTIVES

Quality management is a recent phenomenon. Advanced civilizations that supported
the arts and crafts allowed clients to choose goods meeting higher quality standards
than normal goods. In societies where arts and crafts are the responsibility of a master
craftsman or artist, they would lead their studio and train and supervise others. The
importance of craftsmen diminished as mass production and repetitive work practices
were instituted. The aim was to produce large numbers of the same goods. The first
proponent in the US for this approach was Eli Whitney who proposed
(interchangeable) parts manufacture for muskets, hence producing the identical
components and creating a musket assembly line. The next step forward was promoted
by several people including Frederick Winslow Taylor a mechanical engineer who
sought to improve industrial efficiency. He is sometimes called "the father of scientific
management." He was one of the intellectual leaders of the Efficiency Movement and
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part of his approach laid a further foundation for quality management, including 57
aspects like standardization and adopting improved practices. Henry Ford was also Management
important in bringing process and quality management practices into operation in his
assembly lines. In Germany, Karl Friedrich Benz, often called the inventor of the
motor car, was pursuing similar assembly and production practices, although real mass
production was properly initiated in Volkswagen after World War II. From this period
onwards, North American companies focused predominantly upon production against
lower cost with increased efficiency.
Walter A. Shewhart made a major step in the evolution towards quality management
by creating a method for quality control for production, using statistical methods, first
proposed in 1924. This became the foundation for his ongoing work on statistical
quality control. W. Edwards Deming later applied statistical process control methods
in the United States during World War II, thereby successfully improving quality in
the manufacture of munitions and other strategically important products.
Quality leadership from a national perspective has changed over the past five to six
decades. After the Second World War, Japan decided to make quality improvement a
national imperative as part of rebuilding their economy, and sought the help of
Shewhart, Deming and Juran, amongst others. W. Edwards Deming championed
Shewhart's ideas in Japan from 1950 onwards. He is probably best known for his
management philosophy establishing quality, productivity, and competitive position.
He has formulated 14 points of attention for managers, which are a high level
abstraction of many of his deep insights. They should be interpreted by learning and
understanding the deeper insights. These 14 points include key concepts such as:
z Break down barriers between departments.
z Management should learn their responsibilities, and take on leadership.
z Supervision should be to help people and machines and gadgets to do a better job.
z Improve constantly and forever the system of production and service.
z Institute a vigorous program of education and self-improvement.
In the 1950s and 1960s, Japanese goods were synonymous with cheapness and low
quality, but over time their quality initiatives began to be successful, with Japan
achieving very high levels of quality in products from the 1970s onward. For example,
Japanese cars regularly top the J.D. Power customer satisfaction ratings. In the 1980s
Deming was asked by Ford Motor Company to start a quality initiative after they
realized that they were falling behind Japanese manufacturers. A number of highly
successful quality initiatives have been invented by the Japanese (see for example on
this page: Genichi Taguchi, QFD, and Toyota Production System. Many of the
methods not only provide techniques but also have associated quality culture (i.e.
people factors). These methods are now adopted by the same western countries that
decades earlier derided Japanese methods.
Customers recognize that quality is an important attribute in products and services.
Suppliers recognize that quality can be an important differentiator between their own
offerings and those of competitors (quality differentiation is also called the quality
gap). In the past two decades this quality gap has been greatly reduced between
competitive products and services. This is partly due to the contracting (also called
outsourcing) of manufacture to countries like India and China, as well
internationalization of trade and competition. These countries amongst many others
have raised their own standards of quality in order to meet International standards and
customer demands. The ISO 9000 series of standards are probably the best known
International standards for quality management.
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58 There are a huge number of books available on quality management. In recent times
Quality Techniques some themes have become more significant including quality culture, the importance
of knowledge management, and the role of leadership in promoting and achieving
high quality. Disciplines like systems thinking are bringing more holistic approaches
to quality so that people, process and products are considered together rather than
independent factors in quality management.
4.5.1 TQM Objectives

A Total Quality-oriented organization must have at least following principal objective.
Organization should have many more additional specific objectives. These are as
follows:
z Customer focus, customer delight/satisfaction.
z Continuous improvement as a culture of the organization, which must be the way
of life.
z Focused, continuous and relentless cost reduction.
z Focused, continuous and relentless quality improvement.
z To create an organization whereby everyone is working towards making their
organization the best in its business, and to capitalize on the sense of achievement
and working in a world-class organization.
To achieve these objectives, TQM must include a ten dimensional-framework
Figure 4.2: An Integrated TQM Model

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59
4.6 PLANNING FOR QUALITY Introduction to Quality
Management
Having considered estimating for time and for costs, the third dimension of projects –
quality needs to be considered. The need to achieve a particular level of quality may
mean that more time must be spent completing certain tasks or that more resources
must be made available for a particular purpose. Once the time and cost estimates
have been made, review them to ensure that this estimate will allow an outcome of the
right quality.
Many organizations have corporate quality assurance systems in place, which have to
be applied to any project for which they are responsible. However, difficulties may
arise when several quality assurance systems are in operation in a multi-agency
project. In such a case, it would be possible to include the development of an
appropriate quality assurance framework as part of the project itself.
Part of the documentation for a project may include a ‘quality manual’ which
describes the aims of the project, how each part of the project system is organised
functionally, procedural documentation that states how each task is to be completed,
and any relevant technical specifications. The quality assurance process needs to be
monitored and communicated to stakeholders, with regular reviews built into the
reporting cycle.
4.7 PROCESS STEPS IN TQM

TQM comprises four process steps, namely:
z Kaizen: Focuses on "Continuous Process Improvement", to make processes
visible, repeatable and measurable.
z Atarimae Hinshitsu: The idea that "things will work as they are supposed to" (for
example, a pen will write).
z Kansei: Examining the way the user applies the product leads to improvement in
the product itself.
z Miryokuteki Hinshitsu: The idea that "things should have an aesthetic quality"
(for example, a pen will write in a way that is pleasing to the writer).
TQM requires that the company maintain this quality standard in all aspects of its
business. This requires ensuring that things are done right the first time and that
defects and waste are eliminated from operations.
4.7.1 TQM as a Foundation

TQM is the foundation for activities, which include:
z Meeting Customer Requirements
z Reducing Development Cycle Times
z Just in Time/Demand Flow Manufacturing
z Improvement Teams
z Reducing Product and Service Costs
z Improving Administrative Systems Training
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60
Quality Management and 4.8 THE PRINCIPLES OF TQM
Quality Techniques
The Principles of TQM are as follows:
z Quality can and must be managed.
z Everyone has a customer and is a supplier.
z Processes, not people are the problem.
z Every employee is responsible for quality.
z Problems must be prevented, not just fixed.
z Quality must be measured.
z Quality improvements must be continuous.
z The quality standard is defect free.
z Goals are based on requirements, not negotiated.
z Life cycle costs, not front end costs.
z Management must be involved and lead.
z Plan and organize for quality improvement.
4.9 TQM FRAMEWORK TO QUALITY IMPROVEMENT

Total Quality Management (TQM) is a management approach aimed at satisfying all
customer requirements, needs and expectations using a Continuous Improvement
approach. The TQM principles can be grouped into the following practical and
common sense concepts:
z Customer Focus (internal and external customers)
z Leadership (management role changes to active leadership)
z Teamwork (multi-disciplinary teams, including involvement of customers and
suppliers)
z Continuous Improvement of processes
z Measurement (the improvement process is based on quantitative and qualitative
metrics)
z Benchmarking as a driver to improvement in a competitive environment.
The framework is outlined in Figure 4.3. Its components are described in the
following section.
z The need to improve the quality of a certain portion of the company information is
identified, and an improvement process is INITIATED (1). This is activated by
any of the following information stakeholders: customers (users), providers,
solutions' suppliers, MIS organization, or company management.
z A TEAM (2) is formed. It includes representatives of the information customers
(users), information providers, information suppliers, information organization
and other stakeholders.
z The team uses the CONTINUOUS IMPROVEMENT cycle of PDCA (Plan Do
Check Act) as the backbone of the improvement process.
z In the PLAN phase (3), the customer needs are examined and translated into IQ
dimensions and then into IQ METRICS specifications (4), which become a
critical part of the information solution specification.
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z The team BENCHMARKS (5) IQ performance in external organizations/ 61
functions/information domains. This allows the team to set world – class and at Management
the same time realistic and achievable targets and has a motivational effect on the
team.
z In the DO (6) phase, information specifications are translated into a solution. IQ
targets, expressed as quantitative METRICS, are designed into the solution.
z In the CHECK (7) phase, the team uses the METRICS to compare solution
performance with a pre-defined target. Gaps between customer needs/expectations
and actual IQ are identified.
z In the ACT (8) phase, activities to close these gaps are agreed and implemented.
z A new PDCA cycle begins (9), in order to further improve the same information
or handle a different portion of the information used by the company.
z The process contributes to the organization IQ metrics and dimensions
KNOWLEDGE BASE (10). IQ dimensions, metrics' and performance
specifications are documented in order to be used in future PDCA cycles.
z The process is CUSTOMER FOCUSED (11), meaning that satisfaction of the
customer needs serves as the overall objective of the framework. The customer
plays an active role throughout the process.
z The LEADERSHIP (12) role is to deploy an IQ culture in which the
improvement process can flourish. Its responsibility includes: resource provision,
improvement process initiation, example setting in demanding, using and
providing high quality information.
Deploy IQ
culture
Figure 4.3: TQM Framework to IQ
4.9.1 TQM Concepts in Context of IQ Improvement

This section describes briefly the role of each concept in the proposed IQ
improvement process. A case study about Project Status Information accompanies this
section in order to demonstrate the relevance of each TQM concept to IQ. Project
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62 Status Information should provide a clear and updated picture of the status of all
Quality Techniques project activities. The information therein is critical to all of the project stakeholders.
In the case study, all opportunities to employ the TQM concepts to IQ were missed. It
is argued that the lack of disciplined IQ approach has resulted in unsatisfactory results,
namely no improvement in the quality of the Project Status information.
Leadership
Concept: Management should demonstrate leadership by:
z Recognizing IQ as a strategic issue,
z Allocating the appropriate resources to IQ improvement- capital, management
attention, vision and priorities.
z Setting an example as the first to require, use or provide better quality
information. This role is the responsibility of all management levels, from the
company president down to team leaders.
Customer Focus
The modern quality paradigms emphasize the importance of customer satisfaction as a
driver to the improvement process. IQ improvement efforts should focus on the
identification of users, specification of their true IQ needs, and fulfillment of these
requirements. The “voice of the customer” should lead the entire improvement
process.
Teamwork
Specification of IQ needs and metrics, as well as fulfillment control are based on
teamwork operation. All stakeholders are included in the team. A typical team hosts
representatives from the information users' group, information providers, information
solutions' suppliers, information organization and other relevant parties. A certain
level of management participation is required as well. All the above functions are
responsible for higher quality of information.
Measurement
IQ metrics are used to translate the information user needs into measurable
specifications. These specifications should be designed into the information solution.
Once the solution is provided, IQ metrics are used to assess the solution's actual
performance against the requirements, and effectively against user needs, due to the
special importance of this concept to the InfoQual methodology.
Benchmarking
In order to achieve "world class" IQ, it is necessary to explore what IQ levels are
achieved in the "external world". We refer here to other functions in your
organization, other organizations in your industry or even other industries and
professional domains. Benchmarking supports the IQ improvement team in setting
high but realistic targets that energize the process. Benchmarking is also a useful tool
to discover new and practicable metrics and methods to measure IQ.
Continuous Improvement
In the field of IQ, quality improvement efforts are not a one time effort. There are two
aspects to this concept: cultural and methodological.
z The cultural aspect: In a culture that promotes IQ continuous improvement, each
member deals with the following questions: What is the meaning of high quality
information? How is it defined and measured? Do I require, obtain and use high
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quality information? Do I provide such information? What must I do in order to 63
get or provide better information? Management
z The methodology aspect: The cultural aspects of IQ are beyond this paper's scope.
However, it should be noted that IQ culture cannot be achieved by having the
company president stating "Information is critical, let’s improve it continuously."
Rather, it should be deployed via a series of practicable improvement activities.
Implementing a methodology such as InfoQual can help create the common
language and behavioural habits of an IQ culture. The InfoQual methodology is
based on the PDCA (Plan Do Check Act) cycle, a popular model to organize the
improvement process (Hari, 1995). The cycle is based on four phases:
PLAN: Improvement objectives are identified, scope is agreed, metrics are
specified and targets are set.
DO: Here the actual improvement activities are conducted (e.g., introduction
of a new information solution).
CHECK: The performance of the new solution (i.e., the quality of
information) is checked against the pre-defined metrics.
ACT: The actions required to close the gaps between the required and actual
IQ performance are designed and conducted.
Once completed, the cycle is reiterated in order to achieve further improvements.
4.9.2 A Triple Level Hierarchical Organization

A triple level hierarchical organization is proposed here (Figure 4.4).
z Level A: User satisfaction, as the ultimate criteria to information quality. User
satisfaction can and should be measured directly, through customer satisfaction
surveys (Bailey and Pearson, 1983).
z Level B: IQ Users Needs, which reflect users' expectations. They are specified by
the user, in his words (voice of the customer). "Ease of Use" is a common
example. When there are many stated customer needs, they can be grouped in
order to allow easier manipulation.
z Level C: IQ Metrics, which translate the customer needs into technical
characteristics of the desired information solution. Ideally, but not in all cases,
they can be directly quantified (e.g., Number of Steps Required to Complete
operation X).
Figure 4.4: Hierarchical Organization of IQ Dimensions

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64 4.9.3 Operations on IQ Customer Needs and Metrics
Quality Techniques The InfoQual methodology is designed to support the team in defining, prioritizing
and performing other operations on these two object types, namely IQ Users Needs
and IQ Metrics. These operations are listed in Table 4.1.
Table 4.1: Operations on IQ Needs & Metrics
Operation Description Output Examples

EXTRACT needs Find out what are the users' IQ needs, Timeliness, Relevancy, Accuracy
expressed in his words (voice of customer)
TRANSLATE Translate abstract needs into concrete Need = Accuracy
needs metrics. Metrics = error rate, precision
DEFINE metrics Define how the metric will be measured Error rate, defined as % of
(definition, unit, scale, data source) documents with at least one
erroneous field
ANALYZE metrics Explore interdependencies between Tradeoff between Completeness &
metrics (tradeoffs, synergy) Response time
PRIORITIZE Rank metrics by importance, according to In application X importance order is:
metrics user needs and other considerations Response time, error rate, format
standardization
MEASURE current Measure the current IQ performance Response time= 8 days (average)
performance
BENCHMARK Explore IQ performance in other In company Y: Response time= 4
performance organizations. hours.
SET TARGETS Determine target values Response Time= 3 hours
values
NORMALIZE Each metric has different scale and unit. Performance Scale:
metrics This operation creates a common scale, in 5-outstanding 4-good,
order to enable the evaluation of the
overall IQ performance (integrated IQ 3-acceptable 2-poor
index)
COMMUNICATE Communication of metrics information to Graphical report
performance and all stakeholders, including management
targets

Fill in the blanks:
1. …………… is a management approach aimed at satisfying all customer
requirements, needs and expectations using a Continuous Improvement
approach.
2. PDCA stands for ……………
3. …………… are used to translate the information user needs into
measurable specifications.
4.10 LET US SUM UP

TQM based framework is designed for IQ improvement projects. Six TQM concepts
are integrated into an organized process that translates IQ customer needs into IQ
metrics and ensures their fulfillment. Metrics and measurement of information quality
are at the heart of the process. These metrics are manipulated through a set of
operations like selection, prioritization and presentation. Three tools that facilitate
these operations are integrated into the TQM framework.
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67
LESSON Statistical Process Control
5
STATISTICAL PROCESS CONTROL
CONTENTS
5.1 Introduction
5.2 Statistical Process Control (SPC)
5.2.1 Benefits of SPC
5.3 Statistical Quality Control (SQC)
5.3.1 Advantages of Statistical Quality Control
5.4 Company Wide Quality Control (CWQC)
5.5 Process Capability: A Discerning Measure of Process Performance
5.5.1 Control Limits are not an Indication of Capability
5.6 Let us Sum up
5.8 Keywords

z Explain statistical process control
z Describe statistical quality control
z Discuss companywide quality control
z Explain process capability
5.1 INTRODUCTION
The concept of TQM is basically very simple. Each part of the organization has
customers some external and many internal. Identifying what the customer
requirements are and setting about to meet them is the core of a total quality approach.
This requires a good management system, methods including statistical quality control
(SQC), and teamwork.
A well-operated, documented management system provides the necessary foundation
for the successful application of SQC. Note, however, that SQC is not just a collection
of techniques. It is a strategy for reducing variability, the root cause of many quality
problems. SQC refers to the use of statistical methods to improve or enhance quality
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68 for it customer satisfaction. However, this task is seldom trivial because real world
Quality Techniques processes are affected by numerous uncontrolled factors. For instance, within every
factory, conditions fluctuate with time. Variations occur in the incoming materials, in
machine conditions, in the environment and in operator performance. A steel plant, for
example, may purchase good quality ore from a mine, but the physical and chemical
characteristics of ore coming from different locations in the mine may vary. Thus,
everything isn't always "in control."
5.2 STATISTICAL PROCESS CONTROL (SPC)

The application of statistical techniques to control a process; often used
interchangeably with the term “statistical quality control.”
Statistical process control (SPC) involves using statistical techniques to measure and
analyze the variation in processes. Most often used for manufacturing processes, the
intent of SPC is to monitor product quality and maintain processes to fixed targets.
Statistical quality control refers to using statistical techniques for measuring and
improving the quality of processes and includes SPC in addition to other techniques,
such as sampling plans, experimental design, variation reduction, process capability
analysis, and process improvement plans.
SPC is used to monitor the consistency of processes used to manufacture a product as
designed. It aims to get and keep processes under control. No matter how good or
bad the design, SPC can ensure that the product is being manufactured as designed
and intended. Thus, SPC will not improve a poorly designed product's reliability, but
can be used to maintain the consistency of how the product is made and, therefore, of
the manufactured product itself and its as-designed reliability.
A primary tool used for SPC is the control chart, a graphical representation of certain
descriptive statistics for specific quantitative measurements of the manufacturing
process. These descriptive statistics are displayed in the control chart in comparison
to their "in-control" sampling distributions. The comparison detects any unusual
variation in the manufacturing process, which could indicate a problem with the
process. Several different descriptive statistics can be used in control charts and there
are several different types of control charts that can test for different causes, such as
how quickly major vs. minor shifts in process means are detected. Control charts are
also used with product measurements to analyze process capability and for continuous
process improvement efforts.
5.2.1 Benefits of SPC

z Provides surveillance and feedback for keeping processes in control
z Signals when a problem with the process has occurred
z Detects assignable causes of variation
z Accomplishes process characterization
z Reduces need for inspection
z Monitors process quality
z Provides mechanism to make process changes and track effects of those changes
z Once a process is stable (assignable causes of variation have been eliminated),
provides process capability analysis with comparison to the product tolerance.
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5.3 STATISTICAL QUALITY CONTROL (SQC) Statistical Process Control
The application of statistical techniques is mainly to control quality. Often used

interchangeably with the term “statistical process control,” although statistical quality
control includes acceptance sampling, which statistical process control does not?
It provides the methods and tools for the manufacturing manager to improve quality,
increase productivity, and enhance the competitive position of the manufacturing line.
It proposes potentially controversial methods of performance appraisals, operation
certification, line qualification, vendor certification, and just-in-time manufacturing.
Statistical quality control provides the statistical techniques necessary to assure and
improve the quality of products. Most of the statistical quality techniques used now
have been developed during the last century. Basic steps in statistical quality control
methodology are represented in Figure 5.1, which also lists the output of each step.
Figure 5.1: Statistical Quality Control
5.3.1 Advantages of Statistical Quality Control

Advantages of statistical quality control are:
z When the quality of a product is tested by destructive testing, then 100% testing
will spoil all the products. Under statistical quality control very few products will
be destructed in testing.
z It ensures control, maintenance and improvement in the quality standards.
z It provides better quality assurance at lower inspection cost.
z It reduces the wastage of time and material to the minimum. It reduces the
inspection and manufacturing cost and enhances profits.
5.4 COMPANY WIDE QUALITY CONTROL (CWQC)

CWQC is a system of activities to assure that quality products and services required
by customers are economically designed, produced and supplied while respecting the
principle of customer-orientation and the overall public well-being. These quality
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70 assurance activities involve market research, research and development, design,
Quality Techniques purchasing, production, inspection and sales, as well as other related activities inside
and outside the company. Through everyone in the company understanding both the
statistical concepts and methods, through their application to all the aspects of quality
assurance and through the repeating cycle of rational planning, implementation,
evaluation and action, CWQC aims to accomplish business objectives.
This definition will come as a surprise to people who consider that the Deming Prize
is just based on the application of statistical techniques to manufacturing processes.
Whereas the Baldrige Award and European Quality Award take a much deeper look at
customer satisfaction and service quality as excellence criteria, there is no doubt that
some of these principles are embedded in the Deming framework. The most recent
(1994) version of the framework has significant change of language away from
‘quality control’ to ‘total quality management’. It also introduces some of the features
of the Baldrige and EFQM frameworks, such as corporate social responsibility.
It is true, however, that the main strengths of the Deming Prize criteria are the focus
they have on top management leadership, process control, Kaizen improvement
activities and on future planning to ensure that the gains will be sustained. Kaizen is a
philosophy of continuous improvement of all the organization’s employees, so that
they can make an incremental contribution to continuous improvement each day.
The framework looks specifically at the role and effectiveness of the senior
management team. The term ‘control’ in Japanese implies management, and hence
‘Japanese’ quality control really means quality management. In the Western world we
have a different perception of the term ‘quality control’.
The purpose of the award, as first defined by JUSE, is:
“To award prizes to those companies that are recognized us having successfully
applied Company-wide Quality Control based on statistical control and are likely to
keep it up in the future.”
Consequently, criteria such as company policy and planning, results and future plans
are primarily concerned with quality assurance activities and quality results, especially
the elimination of defects.
Fill in the blanks:
1. SQC stands for ……………. .
2. SPC stands for ……………. .
3. CWQC stands for ……………. .
5.5 PROCESS CAPABILITY: A DISCERNING MEASURE

OF PROCESS PERFORMANCE
We introduce now an important concept employed in thinking statistically about real
life processes. Process capability is the range over which the "natural variation" of a
process occurs as determined by the system of common or random causes; that is,
process capability indicates what the process can deliver under "stable" conditions
when it is said to be under statistical control.
The capability of a process is the fraction of output that can be routinely found to be
within specifications (specs). A capable process has 99.73% or more of its output
within specifications (Figures 5.2 and 5.3).
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Statistical Process Control
Figure 5.2: A Capable Process: Natural Variation is within Specification Range
Figure 5.3: A Process that is not Capable: Natural Variation Exceeds Specification Range
Process capability refers to how capable a process is of making parts that are within
the range of engineering or customer specifications. Figure 5.2 shows the distribution
of the dimension of parts for a machining process whose output follows the
bell-shaped normal distribution. This process is capable because the distribution of its
output is wholly within the specific range. The process shown by Figure 5.3 is not
capable.
Process Control on the other hand refers to maintaining the performance of a process
at its current capability level. Process control involves a range or activities such as
sampling the process product, charting its performance, determining causes of any
excessive variation and taking corrective action.
As mentioned above, the capability of a process is an expression of the comparison of
product specs to the range of natural variability seen in the process. In simple terms,
process capability expresses the proportion or fractional output that a process can
routinely deliver within the specifications. A process when subjected to a capability
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72 study answers two key questions, "Does the process need to be improved?" and "How
Quality Techniques much the process need to does improved?"
Knowing process capability allows manufacturing and quality managers to predict,
quantitatively, how well a process will meet specs and to specify equipment
requirements and the level of control necessary to maintain the firm’s capability. For
example, if a design space require a length of metal tubing to be cut within one-tenth
of an inch, a process consisting of a worker using a ruler and hacksaw will probably
result in a large percentage of nonconforming products in that case the process, due to
its high inherent or natural variability, is not capable of meeting the design specs.
Management would face here three possible choices:
z Measure each piece of the non-conforming tubing,
z Develop a better process by investing in new technology,
z Change the specifications.
Such decisions are usually based on economics. Remember that under routine
production, the cost to produce one unit of the product (i.e., its unit cost) whether the
product ultimately ends up failing within or outside specs is the same. Rather, the firm
may be forced to raise the market price of the within-spec products (those that are
acceptable to customers) and thus weaken its competitive position.
"Scrap and/or rework out-of-spec or defective parts" is therefore a poor business
strategy since labour and materials have already been invested in the unacceptable
product produced. Additionally, inspection errors will probably allow some
non-conforming products to leave the production facility if the firm aims at making
parts that just meet the specs. On the other hand, new technology might require
substantial investment the firm cannot afford.
Changes in design, on the other hand, may sacrifice fitness-for-use requirements and
result in a lower quality product. Thus, these factors demonstrate the need to consider
process capability during product design and in the acceptance of new contracts. Many
firms now require process capability date from their vendors. Both IS0 9000 and QS
9000 quality management systems require a firm to determine its process capability.
Process capability has three important components: (1) the design specifications,
(2) the centering of the natural variation, and (3) the range, or spread, of variation.
Figures 5.4 to 5.5 illustrate four possible outcomes that can arise when natural process
variability is compared with product specs. In Figure 5.4 the specifications are wider
than the natural variation; one would therefore expect that this process will always
produce conforming products as long as it remains in control. It may even be possible
to reduce costs by investing in a cheaper technology that permits a larger variation in
the process output. In Figure 5.5, the natural variation and specifications are the same.
A small percentage of nonconforming products might be produced; thus, the process
should be closely monitored.
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Figure 5.4: A Capable Process: Output is Wholly within Specification Limits
Figure 5.5: A Process with Natural Variability Equal to Specification Range

In Figure 5.6, the range of natural variability is larger than the specification; thus, the
current process would not always meet specifications even when it is in control. This
situation often results from a lack of adequate communication between the design
department and manufacturing, a task entrusted to manufacturing engineers.
If the process is in control but cannot produce according to the design specifications,
the question should be raised whether the specifications have been correctly applied or
if they may be relaxed without adversely affected the assembly or subsequent use of
the product. If the specifications are realistic and firm, an effort must be made to
improve the process to the point where it is capable to producing consistently within
specifications.
Finally, in Figure 5.6, the capability is the same as in Figure 5.7, but the process
average is of-center.
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Quality Techniques
Figure 5.6: A Process with Natural Variability Wider than Specification Limits
(This Process in not Capable)
Figure 5.7: An Off-centered Process

Usually this can be corrected by a simple adjustment of a machine setting or
recalibrating the inspection equipment used to capture the measurements. If no action
is taken, however, a substantial portion of output will fall outside the spec limits even
though the process has the inherent capability to meet specifications.
We may define the study or process capability from another perspective. A capability
study is a technique for analyzing the random variability found in a production
process. In every manufacturing process there is some variability. This variability may
be large or small, but it is always present. It can be divided into two types:
z Variability due to common (random) causes
z Variability due to assignable (special) causes
The first type of variability is said to be inherent in the process and it can be expected
to occur naturally within a process. It is attributed to a multitude of factors which
behave like a constant system of the chances affecting the process. Called common or
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random causes, such factors include equipment vibration, passing traffic, atmospheric 75
pressure or temperature changes, electrical voltage or humidity fluctuations, changes
in operator's physical nr emotional conditions, etc. Such forces determine whether a
coin when tossed will end up, showing a head or tail when on the floor. Together,
however, these "chances” form a unique, stable and describable distribution. The
behaviour of a process operating under such conditions is predictable (Figure 5.8).
Figure 5.8: Common Causes of Variation Present, but no Assignable Causes

Inherent variability may be reduced by changing the environment or the technology,
but given a set of operating condition; this variability can never be completely
eliminated from a process. Variability due to assignable causes, on the other hand,
refers to the variation that can be linked to specific or special causes that disturb a
process. Examples are tool failure, power supply interruption, process controller
malfunction, adding wrong ingredients or wrong quantities, switching a vendor, etc.
Assignable causes are fewer in number and are usually identifiable through
investigation in the shop floor or an examination of process logs. The effect (i.e., the
variation in the process) caused by an assignable factor, however, is usually large and
detectable when compared with the inherent variability-seen in the process. If the
assignable causes are controlled properly, the total process variability associated with
them can be reduced and even eliminated. Still, the effect of assignable causes cannot
be described by a single distribution (Figure 5.9).
Figure 5.9: Both Common and Assignable Causes Affecting the Process
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76 A capability study measures the inherent variability or the performance potential of a
Quality Techniques process when no assignable causes are present (i.e. when the process is said to be its
statistical control). Since inherent variability can be described by a unique distribution,
usually a normal distribution, capability can be evaluated by utilizing the properties of
this distribution. Recall that capability is the proportion of routine process output that
remains within product specs.
Even approximate capability calculations done using histograms enable manufacturers
to take a preventive approach to defects. This approach is in contrast with the
traditional two-step process: production personnel make the product while QC
personnel inspect and screen out products that do not meet specifications. Such QC is
wasteful and expensive since it allows plant resources including time and materials to
be put into products that are not salable. It is also unreliable since even 100 percent
inspection would fail to catch all defective products. SPC aims at correcting
undesirable changes in the output of a process. Such changes may affect the centering
(or accuracy) of the process, or its variability (spread or precision). These effects are
graphically shown in Figure 5.10.
Figure 5.10 (a): Process Accuracy and Precision
Figure 5.10 (b): Process Accuracy and Precision

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5.5.1 Control Limits are not an Indication of Capability 77
Those new to SPC often have the misconception that they don't need to calculate
capability indices. Some even think that they can compare their control limits to the
spec limits. This is not true, because control limits look at the distribution of averages
(x-bar; p, np, u, etc.) while capability indices look at the distribution of individual
measurements (x). The distribution of x for a process will always be more spread out
than the distribution of its x-bar values (Figure 5.8). Therefore, the control limits are
often within the specification limits but the plus-and-minus 3-sigma distribution of
individual part dimensions (x) is not.
The statistical theory of the "central limit the6remn says that the averages, of samples
or subgroups {x-bar} follow more closely a normal distribution. This is why we can
easily construction control charts on process data that are themselves not normally
distributed. But averages-cannot be used for capability calculation/because capability
evaluates individual parts delivered by a process. After all, parts get shipped to
customers, not averages.
Fill in the blanks:
1. …………….. refers to how capable a process is of making parts that are
within the range of engineering or customer specifications.
2. Process capability has three important components: (1) the design
specifications, (2) the centering of the natural variation, and (3)
…………….. .
3. A …………….. study measures the inherent variability or the
performance potential of a process when no assignable causes are present.
5.6 LET US SUM UP

Even in an apparently stable production process, products produced are subject to
random variations. SPC aims at controlling the variability of process output using a
device called the control chart. On a control chart, a certain characteristic of the
product is plotted. Under normal conditions these plotted points are expected to vary
in a “usual way” on the chart. When abnormal points or patterns appear on the chart, it
is a statistical indication that the process parameters or production conditions might
have changed undesirably. At this point an investigation is conducted to discover
unusual and abnormal conditions (e.g. tool breakdown, use of wrong raw material,
temperature controller failure, etc.). Subsequently, corrective actions are taken to
remove the abnormality. In addition to the use of control charts, SPC also monitors
process capability an indicator of the adequacy of the manufacturing process to meet
customer requirements under routine operating conditions. In summary, SPC aims at
maintaining a stable, capable and predictable process.

Select, describe and critically use the main concepts and practices of statistics quality
control.
5.8 KEYWORDS
Design of Experiments: Application of statistical methods for producing high quality,
robust products and process designs.
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Quality Techniques
LESSON
6
ACCEPTANCE SAMPLING
CONTENTS
6.1 Introduction
6.2 Acceptance Sampling
6.3 Acceptance Sampling Plan
6.3.1 Sampling Plans
6.3.2 Characteristics of a Good Sampling Plan
6.3.3 Points to Remember while Using Acceptance Sampling
6.4 OC Curve
6.4.1 The Shape of the OC Curve
6.4.2 Some Specific Points on the OC Curve
6.4.3 A Stream of Lots and the Binomial Distribution
6.4.4 The Isolated Lot and the Hypergeometric Distribution
6.4.5 Single and Double Sample Plans
6.4.6 The c=0 Sampling Plans
6.5 Quality Assurance
6.5.1 The Shewhart Cycle
6.5.2 Four Steps of PDCA Cycle
6.5.3 Excellence in Every Component
6.5.4 Attention to Detail
6.6 Total Quality Management
6.6.1 Definition of TQM
6.6.2 Concept of TQM
6.7 Let us Sum up
6.9 Keywords

z Explain acceptance sampling
z Describe acceptance sampling plan
z Explain OC curve
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z Discuss quality assurance 81
Acceptance Sampling
z Know TQM
6.1 INTRODUCTION
Acceptance sampling is "the middle of the road" approach between no inspection and
100% inspection. There are two major classifications of acceptance plans: by
attributes ("go, no-go") and by variables. The attribute case is the most common for
acceptance sampling. Acceptance Sampling is used to make dispositions on accepting
or rejecting a lot (or batch) of product that has already been produced. A sample of
product is used to determine acceptability. It is most often used to evaluate products
that are received from outside sources and where it is not possible to implement
Statistical Process Control. Acceptance Sampling should be considered when the
testing required is destructive, 100% inspection isn’t feasible due to the cost or time
involved, there is a high probability of errors from 100% inspection, or if the supplier
has a strong history of supplying acceptable products. An Acceptance Sampling Plan
is created to define how many samples must be taken to verify the lot.
6.2 ACCEPTANCE SAMPLING

Acceptance sampling is a quality assurance technique used for inspecting incoming
material and outgoing (finished) products. It is a technique where decisions to accept
or reject products or services are taken on the basis of sampling inspection. It provides
only an indirect means for quality improvement.
Acceptance sampling is an important field of statistical quality control that was
popularized by Dodge and Roming and originally applied by the U.S. military to the
testing of bullets during World War II. If every bullet were tested in advance, no
bullets would be left to ship. If, on the other hand, none were tested, malfunctions
might occur in the filed of battle, with potentially disastrous results.
Dodge reasoned that a sample should be picked at random from the lot, and on the
basis of information that was yielded by the sample, a decision should be made
regarding the disposition of the lot. In general, the decision is either to accept or reject
the lot. This process is called Lot Acceptance Sampling or just Acceptance Sampling.
It is used to minimize the average total inspection (ATI) per lot product for a given
process average.
Acceptance sampling involves a system of principles and methods to define decision
rules to accept or reject product based on sample data. It depends on:
z The quality requirements of the product in the marketable place
z The capability of the process
z The cost and logistics of sample taken
Acceptance sampling is “the middle of the road” approach between no inspection and
100% inspection. There are two major classifications of acceptance plans: by
attributes and by variables. The attributes case is the most common for acceptance
sampling, and will be assumed for the rest of this section.
Acceptance sampling plans can be applied for inspection of:
z End items,
z Components,
z Raw materials,
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82 z Operations,
Quality Techniques z Materials in process,
z Supplies in storage,
z Maintenance operations,
z Data or record and administrative procedures.
Acceptance sampling plans are commonly used in manufacturing to decide whether to
accept or to reject lots of product. However, they can also be used during validation
to accept or to reject the process.
Acceptance sampling will require the selection of a sampling plan. Sampling plans
are used to make product disposition decisions. A sampling plan will determine the
size of a sample and the number of defectives permitted in the sample top determines
the acceptance or rejection of the population.
The two parameters of sampling plans are:
N = sample size (number of units in the sample)
C = Acceptance number (maximum number of defective units allowed in a sample to
decide the acceptance or rejection of the population)
z Types of acceptance sampling plans: This categorization depends on when the
inspection takes place. Outgoing inspection happens when the batches are
inspected before the product is shipped to the consumer. If the inspection is done
by the consumer, after they were received from the supplier, it is called incoming
inspection.
z Rectifying vs Outgoing inspections: This determines what is done with
non-conforming items that were found during the inspection. The cost of replacing
faulty items with new ones, or reworking them is accounted for, the sampling plan
is rectifying.
z Sampling by attributes vs sampling by variables: Sampling by attributes occurs
when the inspection of an item is done for an attribute and leads to binary result or
the numbers of nonconformities in an item are counted. When inspection is done
to a continuous measurement, then we are sampling by variables.
z Single, double, and multiple plans: The sampling procedure may consist of
drawing a single sample, or it may be done in two or more steps. A double
sampling procedure means that if the sample taken from the batch is not
informative enough, another sample is taken. In multiple sampling, additional
samples can be drawn after the second sample.
Following the acceptance by a sampling plan, one can make confidence statement
such as: “With 95% confidence, the defect rate is below 1% defective”. A point to
remember is that the main purpose of acceptance sampling is to decide whether or not
the lot is likely to be acceptable, not to estimate the quality of the lot.
For selecting statistically valid sampling plans, one must clearly define the objective
of the inspection and one must demonstrate that the sampling plan allows this
objective to be met.
The selection of a sampling plan must be guided by
z Cost of the inspection that will be incurred
z Protection provided to the producer and customer by the high efficiency of the
sampling.
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Ideally, a sampling plan should reject all “bad” lots while accepting all “good” lots. 83
Acceptance Sampling
However, because the sampling plan bases it decisions on a sample of the lot and not
the entire lot, these is always a chance of making an incorrect decision.
A well-designed sampling plan would help to achieve
z Higher productivity
z Avoiding production losses
z Reducing inspection cost
z Maintaining smooth business relations
z Healthy growth of business
The behaviour of a sampling of a sampling plan is described by the sampling plan’s
Operating Characteristic (OC) curve. Acceptance sampling makes use of standard
table such as the Dodge-Rowing Sampling Tables of Military Standards 105D (MIL
STD-105D).
6.3 ACCEPTANCE SAMPLING PLAN

Acceptance control charts are acceptance sampling plans that are converted into chart
form for implementation. They control he producer’s point and the consumer’s point
of the Operating Curve (OC-curve).
Harold Dodge pointed in 1969 that Acceptance Quality Control is not the same as
Acceptance Sampling. The latter depends on specific sampling plans, which when
implemented indicate the conditions for acceptance or rejection of the immediate lot
that is being inspected. The former may be implemented in the form of an Acceptance
Control Chart.
The control limits for the Acceptance Control Chart are computed using the
specification limits and the standard deviation of what is being monitored.
Acceptance charts provide a valid visible means for making acceptance-sampling
decisions. They can be in the case of variable (actual Measurements) data.
6.3.1 Sampling Plans

Sampling plans are used to make product disposition decisions. They decide which
lots of product to accept and release and which lots to reject and either rework or
discard. Ideally, a sampling plan should reject all “bad” lots while accepting all
“good” lots.
However, because the sampling plan bases it decision on a sample of the lot and not
the entire lot, there is always a chance of making an incorrect decision. The behaviour
of a sampling plan is described by the sampling plan’s Operating Characteristic (OC)
curve.
On the other side of the OC curve, the customer wishes to be protected from accepting
poor quality from the producer. So the consumer establishes a criterion, the lot
tolerance percent defective or LTPD. Here the idea is to only accept poor quality
product with a very low probability. MILSTD. Plans have been used for over 50 years
to achieve these goals. Sampling risks are affected by lot size, sample size and the
acceptance number.
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84 6.3.2 Characteristics of a Good Sampling Plan
Quality Techniques Some characteristics of a good sampling plan are as follows:
z The index AQL, used to define quality should reflect the needs of the consumer
and producer and not be chosen primarily for statistical convenience.
z The sampling risks should be quantified (OC Curve). The producer should have
adequate protection against rejection of good lots and the consumer should be
protected against acceptance of bad lots.
z Plan should minimize the total cost of inspection.
z The plan should make use of other knowledge of process capability, vendor
details, etc.
z The plan should have a built in flexibility to change in lot size etc.
z The measurement required by the plans should prove to be useful in estimating
individual lot quantity and long-term requirements.
z The plan should be simple to explain and administer.
6.3.3 Points to Remember while Using Acceptance Sampling

The following are the points to be remembered while using acceptance sampling:
z The protection level provided by a sampling plan is described by what it accepts
its AQL and what it rejects its LTPD.
z Selecting a statistically valid sampling plan requires stating the objective of the
inspection, selecting the appropriate AQL and LTPD, and then choosing a
sampling plan that provides the desired protection.
z Companies must know the AQL and LTPD are substantially equivalent
procedures, so costs can sometimes be reduced by using equivalent double,
multiple, or variables sampling plans as alternative to single sampling plans.
z SPC cannot serve as a replacement for an acceptance sampling. The two
techniques should be combined by using the same data to control the process and
to make product disposition decisions.
SPC does not eliminate the need for acceptance sampling. In Statistical Process
Control Charts are used to make process control and process improvement decisions,
and actions are taken on the process to ensure that future products are good. In
contrast, sampling plans are used to make product disposition decisions, and actions
are taken on previously produced lots to ensure the quality of released product.
In an ideal situation with SPC in place no defectives will ever be made and
Acceptance sampling will become unnecessary. However, in practice all processes
have some risk of failure, and thus quality of released product.
Fill in the blanks:
1. An …………….. Plan is created to define how many samples must be
taken to verify the lot.
2. ATI stands for …………….. .
3. OC Curve stands for …………….. .
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85
6.4 OC CURVE Acceptance Sampling
The Operating Characteristic (OC) curve describes the probability of accepting a lot as
a function of the lot’s quality. Figure 6.1 shows a typical OC Curve.
Figure 6.1: Typical Operating Characteristic (OC) Curve
6.4.1 The Shape of the OC Curve

The first thing to notice about the OC curve in Figure 6.1 is the shape; the curve is not
a straight line. Notice the roughly “S” shape. As the lot percent non-conforming
increases, the probability of acceptance decreases, just as you would expect.
Historically, acceptance sampling is part of the process between a part’s producer and
consumer. To help determine the quality of a process (or lot) the producer or
consumer can take a sample instead of inspecting the full lot. Sampling reduces costs,
because one needs to inspect or test fewer items than looking at the whole lot.
Sampling is based on the idea that the lots come from a process that has a certain
non-conformance rate (but there is another view described below). The concept is that
the consumer will accept all the producer’s lots as long as the process percent
non-conforming is below a prescribed level. This produces the, so called, ideal OC
curve shown in Figure 6.2.
When the process percent non-conforming is below the prescribed level, 4.0% in this
example, the probability of acceptance is 100%. For quality worse than this level,
higher than 4%, the probability of acceptance immediately drops to 0%. The dividing
line between 100% and 0% acceptance is called the Acceptable Quality Level (AQL).
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Quality Techniques
Figure 6.2: Ideal OC Curve

The only way to realize the ideal OC curve is 100% inspection. With sampling, we
can come close. In general, as the sample size increases, keeping the acceptance
number proportional, the OC curve approaches the ideal, as shown in Figure 6.3.
Figure 6.3: As n Increases the OC Curve Approaches the Ideal

Similarly, as the acceptance number, c, gets larger for a given sample size, n, the OC
curve approaches the ideal. Figure 6.4 illustrates the relationship.
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Acceptance Sampling
Figure 6.4: As c Increases, for Fixed n, the OC Curve Approaches the Ideal
6.4.2 Some Specific Points on the OC Curve

Because sampling doesn’t allow the ideal OC curve, we need to consider certain risks.
The first risk is that the consumer will reject a lot that satisfies the established
conditions, i.e., the process quality is acceptable, but, by the luck of the draw, there
are too many non-conforming items in the sample. This is called the producer’s risk,
and is denoted by the Greek letter α.
The second risk is that the consumer will accept a lot that doesn’t meet the conditions,
i.e., by the luck of the draw there are not many non-conforming items in the sample,
so the lot is accepted. This is the consumer’s risk and is denoted by the Greek letter β.
In a variety of typical values for α and β, but common values are 5% and 10%. When
we locate these values on the OC curve, expressed in terms of probability of
acceptance, we actually locate 1 – α.
These points correspond to specific values of lot quality and they have a variety of
names. The point associated with 1 – α is often called the Acceptable Quality Limit or
AQL. This is not necessarily the same AQL used to describe the ideal OC curve.
For an α of 5% this means a process operating at the AQL will have 95% of its lots
accepted by the sampling plan.
Similarly, the point associated with β is often called, in contrast, the Rejectable
Quality Limit or RQL. A process operating at the RQL will have 5% of its lots
accepted by the sampling plan.
Lastly, some authors consider the process quality where the lots have a 50%
probability of acceptance. This is called the Indifference Quality Limit or IQL.
Figure 6.5 illustrates these points.
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Quality Techniques
Figure 6.5: Specific Points on the OC Curve
6.4.3 A Stream of Lots and the Binomial Distribution

We described the OC curve in terms of a process that produces a series of lots. This
leads us to recognize that the underlying distribution is the binomial. In the binomial
distribution, there are two possible outcomes. The items in the sample are either
conforming or nonconforming. In addition, the probably of selecting a
non-conforming item doesn’t change as a result of the sample. Since we are sampling
from a process, the potentially infinite number of items is not impacted by taking the
sample.
When the producer presents lots for acceptance, they often come from a process that is
operating at some quality level, i.e., the process produces a certain percentage of
non-conforming items. The probability of obtaining a specified number of
non-conforming items, Pr(x), from a sample of n items with percent non-conforming,
denoted p, is given by the binomial distribution.
In a single sample plan we accept the lot if the number of nonconforming items is c or
less. This means we are interesting in the probability of 0, 1, …, c items. We write this
as
The probability of accepting the lot is the probability that there is c or fewer
non-conforming items in the sample. This is the equation above, and is what we plot
as the OC curve.
6.4.4 The Isolated Lot and the Hypergeometric Distribution

The binomial distribution applies when we consider lots coming from an ongoing
production process. Sometimes we consider isolated lots, or we are interested in a
specific lot. In these cases, we need to realize that taking the sample, because we
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sample without replacement, changes the probability of the next item in the sample. 89
Acceptance Sampling
In these cases, we need the hypergeometric distribution.
Here, N is the lot size, n is the sample size, and d is the number of non-conforming
items in the lot.
If we are interested in determining the probability of c or fewer non-conforming items
in the sample then we write:
We can use this equation to draw the OC curve for the isolated lot.
Often, the β risk is applied to each lot, instead of the stream of lots. In these cases, the
quality level corresponding to a probability of acceptance equal to β is called the Lot
Tolerance Percent Defective (LTPD).
6.4.5 Single and Double Sample Plans

The material above discusses sampling plans in which we draw one sample from the
lot. This is called a single sample plan. We describe the plan by a set of parameters:
n is the sample size,
c is the maximum number of non-conforming items allowed for acceptance, and
r is the minimum number of non-conforming items allowed for rejection.
In a single sample plan r and c differ by 1.
In contrast, there are double sampling plans in which we take the first sample and
make one of three decisions: accept, reject, or take a second sample. If we take the
second sample, we then make an accept/reject decision.
As described above the set of parameters used to describe a double sample plan are:
ni is the ith sample size,
ci is the maximum number of non-conforming items allowed for acceptance on the ith
sample, and
ri is the minimum number of non-conforming items allowed for rejection on the ith
sample.
For example, a single sample plan may be:
n = 20, c = 2, r = 3.
A double sample plan may be:
n1 = 20, c1 = 1, r1 = 4
n2 = 20, c2 = 4, r2 = 5
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90 In this example, if we had 2 non-conforming items on the first sample, we would draw
Quality Techniques the second sample. In total, we would have sampled 40 items.
We can calculate the probability of acceptance, the information we need to define the
OC curve, by the following equation.
The probabilities are, as described above, calculated using either the binomial or
hypergeometric distributions.
6.4.6 The c=0 Sampling Plans

Many practitioners are concerned that traditional lot acceptance sampling plans allow
nonconforming items in the sample. For example, the single sample plan n=20, c=2,
r=3 allows as many as two nonconforming items in the sample.
One solution is the use of plans that don’t allow any non-conforming items. One
example of plan is n=20, c=0, r=1. The consumer would reject the lot if any
nonconforming items appeared in the sample.
Sampling plans with c=0 don’t have the same kind of OC curve discussed above.
Instead of the classic “S” shape, that starts to approximate the ideal curve, c=0 OC
curves drop off sharply without the bend. Figure 6.6 shows the OC curves for these
two plans.
Figure 6.6: OC Curve Comparison Showing c=0 Effect

Notice how quickly the c=0 plan drops off. The figure also has dashed horizontal lines
at 5% and 95% probability of acceptance. The AQL and RQL for these plans are listed
below.
C=0 C=2
AQL 0.26% 4.21%
RQL 13.9% 28.3%
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It is easy to see that c=0 plan will accept many fewer lots than the corresponding c=2 91
Acceptance Sampling
plan. If your process cannot tolerate even a few nonconforming units, c=0 plans may
be a good approach. However, recognize that lot rejection incurs a transaction cost,
that may be high. The selection is a c=0 plan is certainly an economic decision.
6.5 QUALITY ASSURANCE

Quality assurance is a wide-ranging concept covering all matters that individually or
collectively influence the quality of a product. With regard to pharmaceuticals, quality
assurance can be divided into major areas: development, quality control, production,
distribution, and inspections.
Quality assurance (QA) is a process-centered approach to ensuring that a company or
organization is providing the best possible products or services. It is related to quality
control, which focuses on the end result, such as testing a sample of items from a
batch after production. Although these terms are sometimes used interchangeably,
quality assurance focuses on enhancing and improving the process that is used to
create the end result, rather than focusing on the result itself. Among the parts of the
process that are considered in QA are planning, design, development, production and
service.
6.5.1 The Shewhart Cycle

There are many QA tools that organizations can use and that will help guide them
through the steps that are needed to ensure that their processes are as efficient and
productive as possible. One of the most popular tools is called the Shewhart cycle,
which was developed by Dr. W. Edwards Deming, a 20th-century American
management consultant who named the tool after his associate, Walter A. Shewhart.
This cycle for quality assurance consists of four steps: Plan, Do, Check and Act
(PDCA). At the end of Shewhart cycle, which also is called the Deming cycle or
PDCA cycle, the steps are repeated to ensure that the process is being evaluated and
improved on a constant basis.
6.5.2 Four Steps of PDCA Cycle

During the first step of the PDCA cycle, Plan, the organization should establish its
objectives and determine the processes or changes in the processes that are required to
deliver the desired results. The second step, Do, is when the processes or changes are
developed and tested. In the third step, Check, the processes or changes are monitored
and evaluated to determine whether the results are meeting the predetermined
objectives. The final step, Act, is when actions that are necessary to achieve the
desired improvements are fully implemented into the process. The cycle can then be
repeated, beginning with new objectives being planned.
6.5.3 Excellence in Every Component

The Shewhart cycle can be an effective method for achieving quality assurance
because it analyzes the existing conditions and methods that are used to provide the
product or service to customers. The goal is to ensure that excellence is inherent in
every component of the process. Quality assurance also helps determine whether the
steps that are used to provide the product or service are appropriate for the time and
conditions. In addition, if the cycle is repeated throughout the lifetime of the product
or service, it helps improve the company's efficiency by ensuring that the process is
always being refined and improved.
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6.5.4 Attention to Detail
Quality Techniques Quality assurance demands a degree of detail in order to be fully implemented at
every step. Planning, for example, could include determining specific levels of quality
or measurable results that the organization wants to achieve. Checking could involve
testing and other objective measurements to determine whether the goals were met,
rather than mere subjective evaluation of quality. Acting could mean a total revision in
the manufacturing process to correct a technical or cosmetic flaw or very small
changes to improve efficiency or accuracy.
Competition to provide specialized products and services often results in
breakthroughs as well as long-term growth and change. Quality assurance verifies that
any customer offering, regardless whether it is new or evolved is produced and offered
with the best possible materials, in the most comprehensive way and with the highest
standards. The goal to exceed customer expectations in a measurable and accountable
process is provided by quality assurance.
6.6 TOTAL QUALITY MANAGEMENT

6.6.1 Definition of TQM
TQM is composed of Three Paradigms:
Total: Involving the entire organization, supply chain, and/or product life cycle.
Quality: With its usual Definitions, with all its complexities (External Definition).
Management: The system of managing with steps like Plan, Organize, Control, Lead,
Staff, provisioning and the likes.
As Defined by the International Organization for Standardization (ISO):
"TQM is a management approach for an organization, centered on quality, based on
the participation of all its members and aiming at long-term success through customer
satisfaction, and benefits to all members of the organization and to society."
One major aim is to reduce variation from every process so that greater consistency of
effort is obtained.
A Comprehensive Definition:
TQM Total Quality Management is the organization wide management of quality. We
know that management consists of planning, organizing, directing, control, and
assurance. Then, one has to define "total quality". Total quality is called total because
it consists of 3 qualities: Quality of return to satisfy the needs of the shareholders.
6.6.2 Concept of TQM

Total Quality Management (TQM), a buzzword phrase of the 1980's, has been killed
and resurrected on a number of occasions. The concept and principles, though simple
seem to be creeping back into existence by "bits and pieces" through the evolution of
the ISO9001 Management Quality System standard.
"Total Quality Control" was the key concept of Armand Feigenbaum's 1951 book,
Quality Control: Principles, Practice, and Administration, in a chapter titled "Total
Quality Control" Feigenbaum grabs on to an idea that sparked many scholars interest
in the following decades, that would later be catapulted from Total Quality Control to
Total Quality Management. W. Edwards Deming, Joseph Juran, Philip B. Crosby, and
Kaoru Ishikawa, known as the big four, also contributed to the body of knowledge
now known as Total Quality Management.
The American Society for Quality says that the term Total Quality Management was
used by the U.S. Naval Air Systems Command "to describe its Japanese-style
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management approach to quality improvement." This is consistent with the story that 93
Acceptance Sampling
the United States Navy Personnel Research and Development Center began
researching the use of statistical process control (SPC); the work of Juran, Crosby, and
Ishikawa; and the philosophy of W. Edwards Deming to make performance
improvements in 1984. This approach was first tested at the North Island Naval
Aviation Depot.
Companies who have implemented TQM include Ford Motor Company, Phillips
Semiconductor, SGL Carbon, Motorola and Toyota Motor Company.
The latest changes coming up for the ISO 9001:2000 standard’s "Process Model"
seem to complete the embodiment. TQM is the concept that quality can be managed
and that it is a process.
Total Quality Management (TQM) is a management strategy aimed at embedding
awareness of quality in all organizational processes. TQM has been widely used in
manufacturing, education, government, and service industries, as well as NASA space
and science programs.
Fill in the blanks:
1. LASP stands for ……………… .
2. AOL stands for ……………… .
3. ……………… is a process-centered approach to ensuring that a company
or organization is providing the best possible products or services.
6.7 LET US SUM UP

A lot acceptance sampling plan (LASP) is a sampling scheme and a set of rules for
making decisions. The decision, based on counting the number of defectives in a
sample, can be to accept the lot, reject the lot, or even, for multiple or sequential
sampling schemes, to take another sample and then repeat the decision process.
Making a final choice between single or multiple sampling plans that have acceptable
properties is a matter of deciding whether the average sampling savings gained by the
various multiple sampling plans justifies the additional complexity of these plans and
the uncertainty of not knowing how much sampling and inspection will be done on a
day-to-day basis.

Quality assurance is a wide-ranging concept covering all matters that individually or
collectively influence the quality of a product. Discuss.
6.9 KEYWORDS
Acceptance Sampling: Acceptance sampling is a quality assurance technique used for
inspecting incoming material and outgoing (finished) products.
Double Sampling Procedure: A double sampling procedure means that if the sample
taken from the batch is not informative enough, another sample is taken.
OC Curve: The Operating Characteristic (OC) curve describes the probability of
accepting a lot as a function of the lot’s quality.
Sampling Plan: Sampling plans are used to make product disposition decisions.
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LESSON 97
Quality and Productivity
7
QUALITY AND PRODUCTIVITY
CONTENTS
7.1 Introduction
7.2 Productivity – An Ambiguous Term
7.3 What is Productivity?
7.3.1 Partial Factor Productivity
7.3.2 Multifactor Productivity
7.3.3 Total Factor Productivity
7.4 Macro and Micro Factors of Productivity
7.4.1 Macro Factors
7.4.2 Micro Factors
7.5 Factors Influencing Productivity
7.5.1 Controllable Factors
7.5.2 Uncontrollable Factors
7.6 Productivity Benefit Model
7.7 Productivity Cycle
7.8 Factors Affecting Productivity
7.9 Improving Productivity
7.10 Productivity at the National Level
7.11 Let us Sum up
7.13 Keywords

z Explain the ambiguity of productivity
z Explain macro and micro factors of productivity
z Enumerate the factors influencing productivity
z Describe productivity cycle
z Explain productivity benefit model.
z Identify steps in improving productivity
z Describe productivity at national level
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98
Quality Management and 7.1 INTRODUCTION
Quality Techniques
Productivity has become a household word as almost everyone talks about it. Yet, the
term ‘productivity’ means different things to different persons. As a phenomenon, it
ranges from efficiency to effectiveness, to rates of turnover and absenteeism, to output
measures, to measure of client or consumer satisfaction, to intangibles such as
disruption in workflow and to further intangibles such as morale, loyalty and job
satisfaction. To put it bluntly, the definition of productivity is complex and this is
because it is both a technical and managerial concept. Productivity is a matter of
concern to government bodies, trade unions and other social institutions not minding
the disagreements over its conceptualization by different groups and individuals.
Hence, discussing productivity at all levels is common because of the direct
relationship between productivity and the standard of living of a people. It is
perceived that the more different are the goals of the different individuals, institutions
and bodies that have a stake in productivity as a problem, the more different their
definitions of productivity will be.
7.2 PRODUCTIVITY – AN AMBIGUOUS TERM

Despite the confusion on the subject, several characteristic features that represent the
concept of productivity have been identified within this research. Generally speaking,
productivity is in industrial engineering defined as the relation of output (i.e. produced
goods) to input (i.e. consumed resources) in the manufacturing transformation process.
Productivity is therefore, on the one hand, closely connected to the use and availability
of resources. This means in short that productivity is reduced if a company’s resources
are not properly used or if there is a lack of them. On the other hand, productivity is
strongly linked to the creation of value. Thus, high productivity is achieved when
activities and resources in the manufacturing transformation process add value to the
produced products. Furthermore, the opposite of productivity is represented by waste,
which must be eliminated in order to improve productivity.
So far the term productivity may seem rather easy to understand, however, there are
several implications which have caused much confusion. A common mistake is, for
instance, to use productivity synonymous to measures of production, which refers to
the amount of a product or service produced. As a result of this confusion, people tend
to believe that increased production means increased productivity. This is not
necessarily true. An important point to keep in mind is that productivity is a relative
concept, which can not be said to increase or decrease unless a comparison is made,
either of variations from competitors or other standards at a certain point in time or of
changes over time.
Basically, improvements in productivity can be caused by five different relationships:
z Output and input increases, but the increase in input is proportionally less than the
increase in output.
z Output increases while input stays the same.
z Output increases while input is reduced.
z Output stays the same while input decreases.
z Output decreases while input decreases even more.
It is also important to understand the ambiguous nature of productivity, since there
exist several types of productivity as well as different hierarchical levels which
productivity can be discussed within. Almost any transformation process within a
manufacturing company is fed with several types of input (e.g. labour, capital,
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material and energy) and emits more than one output (e.g. product A, product B). 99
In turn we must be able to separate partial productivity (i.e. output related to one type
of input) from total productivity (i.e. output related to multiple types of input).
Moreover, considering all the different hierarchical levels that exist in a company it is
not difficult to comprehend that, for example, the management’s strategical
perspective of productivity will usually differ from the more operational view of
productivity among operators at an assembly line.
7.3 WHAT IS PRODUCTIVITY?

In general the productivity is the relationship between the output generated by a
production or service system and the input provided to create this output. Thus,
productivity is defined as the efficient use of resources labor, capital, land, material,
energy, information in the production of various goods and services.
Higher productivity means accomplishing more with the same amount of resources or
achieving higher output in terms of terms of volume and quality for the same input.
This is usually stated as:
Output
= Productivity
Input
Productivity can also be defined as the relationship between results and the time it
takes to accomplish them. Time is often a good denominator since it is a universal
measurement, and it is beyond human control. The less time taken to achieve the
desired result, the more productive is the system.
Regardless of the type of production, economic or political system, the definition of
productivity remains the same. Thus, though productivity may mean different thins to
different people, the basic concept is always the relationship between the quantity and
quality of goods or services produced and the quantity of resources used to produce
them.
Productivity is a comparative tool for managers, industrial engineers, economists and
politicians. It compares production at different levels of the economic system
(individual and shop-floor, organizational, sectoral and national) with resources
consumed.
Sometimes productivity is viewed as a more intensive use of such resources as labour
and machines which should reliably indicate performance or efficiency if measured
accurately. However, it is important to separate productivity from intensity of labour,
because while labour productivity reflects the beneficial results of labour, its intensity
means excess effort and is no more than work “speed-up”. The essence of productivity
improvement is working more intelligently, not harder. Real productivity
improvement is not achieved by working harder this result in very limited increases in
productivity due to man’s physical limitations.
Productivity is an overall measure of the ability to produce a good or service. More
specifically, productivity is the measure of how specified resources are managed to
accomplish timely objectives as stated in terms of quantity and quality. Productivity
may also be defined as an index that measures output (goods and services) relative to
the input (labour, materials, energy, etc., used to produce the output). As such, it can
be expressed as:
Hence, there are two major ways to increase productivity: increase the numerator
(output) or decrease the denominator (input). Of course, a similar effect would be seen
if both input and output increased, but output increased faster than input; or if input
and output decreased, but input decreased faster than output.
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100 Organizations have many options for use of this formula, labor productivity, machine
Quality Techniques productivity, capital productivity, energy productivity, and so on. A productivity ratio
may be computed for a single operation, a department, a facility, an organization, or
even an entire country.
Productivity is an objective concept. As an objective concept it can be measured,
ideally against a universal standard. As such, organizations can monitor productivity
for strategic reasons such as corporate planning, organization improvement, or
comparison to competitors. It can also be used for tactical reasons such as project
control or controlling performance to budget.
Productivity is also a scientific concept, and hence can be logically defined and
empirically observed. It can also be measured in quantitative terms, which qualifies it
as a variable. Therefore, it can be defined and measured in absolute or relative terms.
However, an absolute definition of productivity is not very useful; it is much more
useful as a concept dealing with relative productivity or as a productivity factor.
Productivity is useful as a relative measure of actual output of production compared to
the actual input of resources, measured across time or against common entities.
As output increases for a level of input, or as the amount of input decreases for a
constant level of output, an increase in productivity occurs. Therefore, a "productivity
measure" describes how well the resources of an organization are being used to
produce input.
Productivity is often confused with efficiency. Efficiency is generally seen as the ratio
of the time needed to perform a task to some predetermined standard time. However,
doing unnecessary work efficiently is not exactly being productive. It would be more
correct to interpret productivity as a measure of effectiveness (doing the right thing
efficiently), which is outcome-oriented rather than output-oriented.
Productivity is usually expressed in one of three forms:
z Partial factor productivity
z Multifactor productivity
z Total productivity.
7.3.1 Partial Factor Productivity

The standard definition of productivity is actually what is known as a partial factor
measure of productivity, in the sense that it only considers a single input in the ratio.
The formula then for partial-factor productivity would be the ratio of total output to a
single input or:
Managers generally utilize partial productivity measures because the data is readily
available. Also, since the total of multifactor measures provides an aggregate
perspective, partial factor productivity measures are easier to relate to specific
processes. Labour-based hours (generally, readily available information) is a
frequently used input variable in the equation. When this is the case, it would seem
that productivity could be increased by substituting machinery for labour. However,
that may not necessarily be a wise decision. Labour-based measures do not include
mechanization and automation in the input; thus when automation replaces labour,
misinterpretation may occur.
Other partial factor measure options could appear as output/labor, output/machine,
output/capital, or output/energy. Terms applied to some other partial factor measures
include capital productivity (using machine hours or dollars invested), energy
productivity (using kilowatt hours), and materials productivity (using inventory
dollars).
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7.3.2 Multifactor Productivity 101
A multifactor productivity measure utilizes more than a single factor, for example,
both labour and capital. Hence, multifactor productivity is the ratio of total output to a
subset of inputs:
A subset of inputs might consist of only labour and materials or it could include
capital.
7.3.3 Total Factor Productivity

A broader gauge of productivity, total factor productivity is measured by combining
the effects of all the resources used in the production of goods and services (labour,
capital, raw material, energy, etc.) and dividing it into the output.
Total output must be expressed in the same unit of measure and total input must be
expressed in the same unit of measure. However, total output and total input need not
be expressed in the same unit of measure. Resources are often converted to dollars or
standard hours so that a single figure can be used as an aggregate measure of total
input or output. For example, total output could be expressed as the number of units
produced, and total input could be expressed in dollars, such as tons of steel produced
per dollar input. Other varieties of the measure may appear as dollar value of good or
service produced per dollar of input, or standard hours of output per actual hours of
input.
Total productivity ratios reflect simultaneous changes in outputs and inputs. As such,
total productivity ratios provide the most inclusive type of index for measuring
productivity and may be preferred in making comparisons of productivity. However,
they do not show the interaction between each input and output separately and are thus
too broad to be used as a tool for improving specific areas.
Total Factor Productivity is a measure favored by the Japanese, whereas labour
productivity is the measure favored by the United States. As such, the individual
"productivity" of the American employee tends to be the best in the world, in that an
American employee can purchase more eggs per one hour of work than anyone else in
the world. But as a measure of national productivity, the Japanese have, in the past,
tended to be better performers.
Fill in the blanks:
1. …………… is the relationship between the output generated by a
production or service system and the input provided to create this output.
2. Productivity is a comparative tool for managers, industrial engineers,
economists and …………….
3. A …………… productivity measure utilizes more than a single factor, for
example, both labour and capital.
7.4 MACRO AND MICRO FACTORS OF PRODUCTIVITY

Macro and Micro factors of productivity are discussed below:
7.4.1 Macro Factors

The macro factors determine the national environment in which a business is regulated
and the quality of resources available.
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102 The various macro factors of productivity are:
Quality Techniques z Infrastructure
z Free market policies
z Fiscal and monetary policies
z Social economic environment
z Work ethics
z Human resource development
Infrastructure
Infrastructure is the basic physical and organizational structures needed for the
operation of a society or enterprise, or the services and facilities necessary for an
economy to function. Infrastructure is generally structural elements that provide the
framework supporting an entire structure. The term has diverse meanings in different
fields, but is perhaps most widely understood to refer to roads, airports, and utilities.
Economically infrastructure could be seen to be the structural elements of an economy
which allow for production of goods and services without themselves being part of the
production process. For example, roads allow the transport of raw materials and
finished products.
Free Market Policies

Implementation of a hypothetical price-liberalization policy is shown to enhance the
total factor productivity of Greek agricultural crop industry. Utilization of a multiple
indicator multiple cause (MIMIC) model revealed that total factor productivity might
have grown five times during 1974 to 1989 if a price-liberalization policy is
implemented.
Fiscal and Monetary Policies

Fiscal policy refers to government attempts to influence the direction of the economy
through changes in government taxes, or through some spending (fiscal allowances).
It is the use of government spending and revenue collection to influence the economy.
Fiscal policy can be contrasted with the other main type of economic policy, monetary
policy, which attempts to stabilize the economy by controlling interest rates and the
supply of money. The two main instruments of fiscal policy are government spending
and taxation. Changes in the level and composition of taxation and government
spending can impact on the following variables in the economy:
z Aggregate demand and the level of economic activity
z The pattern of resource allocation
z The distribution of income.
Monetary policy is the process by which the government, central bank, or monetary
authority of a country controls (i) the supply of money, (ii) availability of money, and
(iii) cost of money or rate of interest, in order to attain a set of objectives-oriented
towards the growth and stability of the economy Monetary theory provides insight
into how to craft optimal monetary policy.
Monetary policy is referred to as either being an expansionary policy, or a
contractionary policy, where an expansionary policy increases the total supply of
money in the economy, and a contractionary policy decreases the total money supply.
Expansionary policy is traditionally used to combat unemployment in a recession by
lowering interest rates, while contractionary policy involves raising interest rates in
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order to combat inflation. Monetary policy should be contrasted with fiscal policy, 103
which refers to government borrowing, spending and taxation.
Social Economic Environment

Millions of years of evolution moulded human behaviour to serve the survival and
advantage of individuals and their family groups (clans) in the natural environment
(which included other, rival, groups of humans). There has been little or no time for it
to adapt to the much larger social units of civilisation, which only developed in the
last few thousand years, effectively replacing the natural environment with an
artificial socio-economic environment. This was a unique and profound development,
the consequences of which, because we are totally immersed in, familiar with and
dependent on them, we fail to recognize.
The most general and important consequence is that we naturally and automatically
give priority to the economy (the household of man and part of the socio-economic
environment) over ecology (the household of our planet, which constitutes the natural
environment), when it should be obvious (were we not blinded by our familiarity with
and dependency on the status quo) that for medium and long-term human survival it
has to be the other way around.
Work Ethics
Work ethic is a set of values based on hard work and diligence. It is also a belief in the
moral benefit of work and its ability to enhance character. An example would be the
Protestant work ethic. A work ethic may include being reliable, having initiative, or
maintaining social skills.
Workers exhibiting a good work ethic in theory (and ideally in practice) should be
selected for better positions, more responsibility and ultimately promotion. Workers
who fail to exhibit a good work ethic may be regarded as failing to provide fair value
for the wage the employer is paying them and should not be promoted or placed in
positions of greater responsibility.
The idea of a meritocracy is based somewhat on the work ethic, in that under a
meritocracy, workers who possess a good work ethic (work hard and play by the rules)
are to be rewarded and move ahead, and workers who do not have a good work ethic
are to be punished, or not be rewarded.
Human Resource Development

Increasingly, more importance is being given to “people” in organisations. This is
mainly because organisations are realising that human assets are the most important of
all assets. This emphasis can also be partly attributed to the new emerging values of
humanism and humanisation. Moreover, with the increased emphasis on creativity,
and autonomy, which people are increasingly acquiring and enjoying in the society,
the expectations of people are fast changing. People cannot be taken for granted any
more.
In the past, people working in organisations were given attention merely in
administering the necessary conditions of work. The traditional concept of personnel
management was based on a very narrow view of human motivation. The basic
assumption underlying that view was that human beings are primarily motivated by
comforts and salary, and necessary attention may be given to rationalise these, so that
people do not get dissatisfied. Most of the attention, therefore, was on administration
of salary and other benefits. It is now being increasingly realised that people working
in organisations are human beings. They have their own needs, motivation and
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104 expectations, and that their contribution to the organisation is much more than that of
Quality Techniques any other resource being used.
HRD is a process, not merely a set of mechanisms and techniques. The mechanisms
and techniques such as performance appraisal, counseling, training, and organisation
development interventions are used to initiate, facilitate, and promote this process in a
continuous way. Because the process has no limit, the mechanisms may need to be
examined periodically to see whether they are promoting or hindering the process.
Organisations can facilitate this process of development by planning for it, by
allocating organisational resources for the purpose, and by exemplifying an HRD
philosophy that values human beings and promotes their development.
7.4.2 Micro Factors

The micro factors refer to the competence of individual organizations in transforming
the available resources into value added products and services.
The various micro factors of productivity are:
z Production Capacity
z Company policies
z Corporate Management
z Organization and Administration
z Corporate culture
z Training and development
Production Capacity
Volume of products can be generated by a production plant or an enterprise in a given
period by using current resources.
For Example: Production capacity of a Textile Firm
For 100% Cotton and Poly Cotton (any blend) the production capacity is 50,000 meter
per day for Dyed fabric, 40,000 meters per day for Printed fabric, 40,000 meters for
Bleached White fabric.
For 100% Polyester or light shirting material on Jet Dyeing we have a capacity for
12,000 meters per day.
Total production capacity of a firm is 1,42,0000 meters per day
Company Policies
Employees respond well to an environment in which company policies are well
defined and equitably and consistently enforced. Therefore, having a written Policy
Manual and Procedure Manual can make a store a better employer and a stronger
profit maker. The Policy Manual will give the employees the information they need
concerning company regulations and policies and will support management in
enforcing them. A Procedure Manual will give the employees instructions on HOW to
do their job. It can be used both as a training manual and an on-going reference
manual.
There is much information concerning the company that employees need to know and
management is obligated to tell them. The best method for disseminating this
information is by providing it to the employees in the form of a written Policy
Manual.
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Corporate Management 105
Corporate management consists of a set of processes that help organizations optimize
their business performance. It provides a framework for organizing, automating and
analyzing business methodologies, metrics, processes and systems that drive business
performance.
Organization and Administration

An organization is a social arrangement which pursues collective goals, controls its
own performance, and has a boundary separating it from its environment.
Administration may refer to:
z The performance or management of business operations.
z The act of directing people towards accomplishing a goal.
z The highest administrative department of an organization.
Corporate Culture
Culture refers to an organization's values, beliefs, and behaviors. In general, it is
concerned with beliefs and values on the basis of which people interpret experiences
and behave, individually and in groups.
The culture of an organization is often expressed as "the way we do things around
here" and consists of largely unspoken values, norms, and behaviors that become the
natural way of doing things. An organization's culture may be more apparent to an
external observer than an internal practitioner. The first person to attempt a definition
of corporate culture was Edgar Schein, who said that it consisted of rules, procedures,
and processes that governed how things were done, as well as the philosophy that
guides the attitude of senior management toward staff and customers. The difficulty in
identifying the traits of culture and changing them is borne out by the fact that culture
is not merely climate, power, and politics, but all those things and more.
Training and Development

Training and development is a subsystem of an organization. It ensures that
randomness is reduced and learning or behavioural change takes place in structured
format.
The two modern approaches of training and development are:
z Traditional Approach: Most of the organizations before never used to believe in
training. They were holding the traditional view that managers are born and not
made. There were also some views that training is a very costly affair and not
worth. Organizations used to believe more in executive pinching. But now the
scenario seems to be changing.
z Modern Approach: The modern approach of training and development is that
Indian Organizations have realized the importance of corporate training. Training
is now considered as more of retention tool than a cost. The training system in
Indian Industry has been changed to create a smarter workforce and yield the best
results
Fill in the blanks:
1. …………… is generally structural elements that provide the framework
supporting an entire structure.
2. MIMIC stands for …………… .
3. Work ethic is a set of values based on hard work and …………… .
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106
Quality Management and 7.5 FACTORS INFLUENCING PRODUCTIVITY
Quality Techniques
Factors influencing productivity can be classified broadly into two categories:
z Controllable or internal factors
z Uncontrollable or external factors
7.5.1 Controllable Factors

The various controllable factors of productivity are:
z Product factor
z Plant and equipment
z Technology
z Material and energy
z Human factors
z Work methods
z Management Style
Product Factor
In terms of productivity means the extent to which the product meets output
requirements product is judged by its usefulness. The cost benefit factor of a product
can be enhanced by increasing the benefit at the same cost or by reducing cost for the
same benefit.
Plant and Equipment

These play a prominent role in enhancing the productivity. The increased availability
of the plant through proper maintenance and reduction of idle time increases the
productivity. Productivity can be increased by paying proper attention to utilization,
age, modernization, cost, investments, etc.
Technology
Innovative and latest technology improves productivity to a greater extent.
Automation and information technology helps to achieve improvements in material
handling, storage, communication system and quality control. The various aspects of
technology factors to be considered are:
z Size and capacity of the plant
z Timely supply and quality of inputs
z Production planning and control
z Repairs and maintenance
z Waste reduction
z Efficient material handling system.
Material and Energy

Efforts to reduce materials and energy consumption bring about considerable
improvement in productivity.
z Selection of quality material and right material
z Control of wastage and scrap
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z Effective stock control 107
z Development of source of supply
z Optimum energy utilization and energy savings.
Human Factors
Productivity is basically dependent upon human competence and skill. Ability to work
effectively is governed by various factors such as education, training, experience
aptitude etc., of the employees. Motivation of employees will influence productivity.
Work Methods
Improving the ways in which the work is done improves productivity, work study and
industrial engineering techniques and training are the areas which improve the work
methods, and such in term enhances the productivity.
Management Style
This influences the organizational design, communication in organization, policy and
procedures. A flexible and dynamic management styles is a better approach to achieve
higher productivity.
7.5.2 Uncontrollable Factors

The various uncontrollable factors of productivity are:
z Structural adjustments
z Natural resources
z Government and infrastructure
Structural Adjustments
Structural adjustments include both economic and social changes. Economic changes
that influence significantly are:
z Shift in employment from agriculture to manufacturing industry
z Import of technology
z Industrial competitiveness
Social changes such as women’s participation in the labour force, education, cultural
values, and attitudes are some of the factors that play a significant role in the
improvement of productivity.
Natural Resources
Manpower, land and raw materials are vital to the productivity improvement.
Government and Infrastructure

Government policies and programmes are significant to productivity practices of
government agencies, transport and communication power, and fiscal policies (interest
rates, taxes) influence productivity to the greater extent.
7.6 PRODUCTIVITY BENEFIT MODEL

The productivity model shown in figure 7.1 has been developed to give a schematic
view of how the different terms are suggested to be used. The model includes five
terms; productivity, profitability, performance, effectiveness and efficiency, and
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108 explains how they are related to each other. Through the Triple-P model, the main
Quality Techniques differences between these terms can easily be captured.
Figure 7.1: Productivity Model
Productivity
Productivity is the central part of the Triple P-model and has a rather straightforward
operational definition of productivity as a ratio of output quantity (i.e. number of
correctly produced products which fulfils their specifications) divided by input
quantity (i.e. all type of the resources that are consumed in the transformation
process).
Profitability
Profitability is also seen as the relation between output and input, but includes
influences from price-factors (i.e. price recovery).
Performance
Performance is the umbrella term of manufacturing excellence and includes
profitability as well as non-cost factors such as quality, speed, delivery and flexibility.
Effectiveness
Effectiveness is a term to be used when the output of the manufacturing
transformation process is focused, while efficiency represents how well the input of
the transformation process (i.e. resources) is utilised.
7.7 PRODUCTIVITY CYCLE

Productivity is a measure relating a quantity or quality of output to the inputs required
to produce it. Since business cycles have been one of the most attractive sources of
study for economists, for both developed and developing countries, the relation
between the business cycles and the productivity growth has an important role in
explaining the specifics of the cycles.
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RD
PL
A
W
AN
RE
FI
N O
IS D
H
Figure 7.2: Productivity Cycle

The figure 7.2 shows the cycle and is broken down into four sections and these
sections are:
z Plan
z Do
z Complete
z Reward
Plan
This is where our project begins. All but the most simple of tasks requires good
planning beforehand, especially if you want things to run smoothly in the other stages
of the cycle. At the very least we need to ask these four questions:
z Why are we doing it? We always need to ask ourselves why we are doing
something. If you have a clearly defined list of personal roles (father, home-
owner, you job), this should be easy to answer; does the task fit with your
responsibilities and if not is it really necessary to do? If you have it laid out, refer
to your 20,000ft level in the horizon of focus as mentioned in Getting Things
Done.
z When is it going to be done? When are we going to do the task? Having a clear
schedule is important for staying focused and minimizing procrastination. If you
don’t have a schedule clearly defined for the project, it will float around in your
mind as you second-guess when it is a good time to do it, and more often than not
you will end up doing the project at inappropriate times.
z How are we going to do it? How we are going to do a task is pretty
self-explanatory. What tools do we need? What research do we have to do? Who
do we have to talk to? What are the next actions you need to do that will see the
project move forward?
z What are we going to achieve? Define what the final goal will be from doing the
task. Like having a schedule you need to define what you want from the project
otherwise you will constantly be questioning yourself as to whether the task is
good enough, what the cut-off line should be, how far you should take it etc.
The danger with this stage is the temptation to get bogged down in planning. It’s
important to know where to draw the line and actually start using the preparatory
work. If you have too many tasks stuck in this phase, then they linger on the mind as
incompletes, and if GTD taught us anything it’s to get stuff off your mind.
Do
This is typically the largest chunk of any project and should be strongly tied to what
was laid down in the planning stage. Very commonly people get bogged down at this
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110 point due to lack of proper planning. If you don’t have a coherent plan tied to a solid
Quality Techniques schedule your mind has to fill it in for you and the problem with that approach is it
will result in fuzzy, unclear thinking.
Remember the circle can work anti-clockwise too. If you haven’t done enough
planning or the planning you have done turns out to be unsuitable go back to the first
stage again. At any time you get bogged down in a project; ask yourself what next
action you would have to do to move the project forward.
Complete
This section may be debatable to some but there is a clear distinction between doing,
actioning and working through the main bulk of a task and knowing when it is
complete and can be signed off. This relates strongly to the planning stage. If you have
it clearly defined what you want to achieve right from the beginning, you help to
avoid the situation that no doubt sounds similar to many of you, where you keep
tweaking bits and pieces, adding features and changing aspects of it when you don’t
really need to. You end up in that dangerous situation where you don’t know when to
stop and declare something as done.
Reward
A key element of this productivity circle is the reward. As mentioned in the planning
phase, ask yourself what the reward would be for completing the project, and if there
is none, come up with one. At the very least you need to acknowledge the completion
of the task. Congratulate yourself, pat yourself on the back. If you don’t reward
yourself, you will just jump straight into another project and that’s not a good habit.
The body is like a battery. Rewarding yourself for completing a project – besides
discouraging procrastination – also helps you to recharge and recharging yourself does
not just involve getting your energy levels back up, it also gives you that extra kick of
motivation and encouragement. You are then in the top physical and mental state to
start your next project and begin the productivity cycle again.
7.8 FACTORS AFFECTING PRODUCTIVITY

There is quite a variety of factors which can affect productivity, both positively and
negatively. These include:
z Capital investments in production
z Capital investments in technology
z Capital investments in equipment
z Capital investments in facilities
z Economies of scale
z Workforce knowledge and skill resulting from training and experience
z Technological changes
z Work methods
z Procedures
z Systems
z Quality of products
z Quality of processes
z Quality of management
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z Legislative and regulatory environment 111
z General levels of education
z Social environment
z Geographic factors
The first 12 factors are highly controllable at the company or project level. Numbers
13 and 14 are marginally controllable, at best. Numbers 15 and 16 are controllable
only at the national level, and 17 are uncontrollable.
7.9 IMPROVING PRODUCTIVITY

Productivity improvement can be achieved in a number of ways. If the level of output
is increased faster than that of input, productivity will increase. Conversely,
productivity will be increased if the level of input is decreased faster than that of
output. Also, an organization may realize a productivity increase from producing more
output with the same level of input. Finally, producing more output with a reduced
level of input will result in increased productivity.
Any of these scenarios may be realized through improved methods, investment in
machinery and technology, improved quality, and improvement techniques and
philosophies such as just-in-time, total quality management, lean production, supply
chain management principles, and theory of constraints.
A firm or department may undertake a number of key steps toward improving
productivity. The main steps involved into the productivity improvement are:
z Develop productivity measures for all operations; measurement is the first step in
managing and controlling an organization.
z Look at the system as a whole in deciding which operations are most critical; it is
over-all productivity that is important.
z Develop methods for achieving productivity improvement, such as soliciting ideas
from workers (perhaps organizing teams of workers, engineers, and managers),
studying how other firms have increased productivity, and reexamining the way
work is done.
z Establish reasonable goals for improvement.
z Make it clear that management supports and encourages productivity
improvement. Consider incentives to reward workers for contributions.
z Measure improvements and publicize them.
z Don't confuse productivity with efficiency. Efficiency is a narrower concept that
pertains to getting the most out of a given set of resources; productivity is a
broader concept that pertains to use of overall resources. For example, an
efficiency perspective on mowing the lawn given a hand mower would focus on
the best way to use the hand mower; a productivity perspective would include the
possibility of using a power mower.
As a cautionary word, organizations must be careful not to focus solely on
productivity as the driver for the organization. Organizations must consider overall
competitive ability. Firm success is categorized by quality, cycle time, reasonable lead
time, innovation, and a host of other factors directed at improving customer service
and satisfaction.
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112
Quality Management and 7.10 PRODUCTIVITY AT THE NATIONAL LEVEL
Quality Techniques
Since productivity is one of the basic variables governing economic production
activity some mention of national productivity concerns would be appropriate. As a
matter of fact, productivity may be the most important variable governing economic
production activity. It is the fundamental controllable factor in wealth production.
Since other economic variables depend on it, increasing productivity tends to have a
beneficial multiplying effect on other economic variables. This is generally true at
every level of economic aggregation.
Productivity growth in the United States lagged that of other leading industrial
countries in the 1970s and 1980s. This caused some concern among American
government officials and business leaders. Although, the United States' productivity
was still among the world's highest, it was losing ground to other nations, most
notably Japan, Korea, the United Kingdom, and West Germany.
Concern was especially great in the area of manufacturing; a significant portion of
American productivity could be attributed to high agricultural productivity, whereas
manufacturing tended to be lower. Productivity in services lagged that of both
agriculture and manufacturing. However, the picture may be changing. While the
United States' productivity growth slowed during the late twentieth century, it has
since increased. With the aspect of automation within service industries, service sector
productivity is continually on the increase.
Improving productivity is of national importance because, for a society to increase its
standard of living, it must first increase productivity. Overall productivity for
individual countries is calculated by dividing output, as measured by GDP or GNP, by
the country's total population. Thus, productivity is measured as the dollar value per
capita outputs. An increase in this measure of productivity means that each person in
the country, on average, produced more goods and services. Also if productivity
increases, then profits increase. The resulting profits can then be used to pay for wage
increases (inherent in inflation) without having to raise prices. In this way,
productivity gains actually help curb inflation.
It has been estimated that technology was responsible for at least half of the growth in
productivity in the United States between 1948 and 1966. It would appear, then, that if
the United States wants to continue to increase productivity, technology may be the
key. Extensive press attention has focused on the factory of the future, where factory
workers are being replaced in order to improve flexibility and productivity.
Apparently, the role and importance of productivity will not diminish any time soon.
Fill in the blanks:
1. Productivity is basically dependent upon human competence and
………… .
2. ………… is the umbrella term of manufacturing excellence and includes
profitability as well as non-cost factors such as quality, speed, delivery
and flexibility.
7.11 LET US SUM UP

Productivity is a measure of output from a production process, per unit of input.
For example, labour productivity is typically measured as a ratio of output per labour-
hour, an input. Productivity may be conceived of as a metric of the technical or
engineering efficiency of production. As such, the emphasis is on quantitative metrics
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115
LESSON Quality Cost
8
QUALITY COST
CONTENTS
8.1 Introduction
8.2 Costs of Quality
8.2.1 The Process Model
8.2.2 The PAF Model
8.2.3 The Life Cycle Model
8.3 Is Quality Free of Cost?
8.4 Economics of Quality
8.4.1 Economic Cost of Quality
8.4.2 Organisations and the Economic Cost of Quality
8.5 Quality Planning
8.5.1 Supervisory and Worker Levels
8.5.2 Multifunctional Systems
8.5.3 Major Programmes
8.6 Quality Information Feedback
8.7 Internal Customer Conflict
8.8 Let us Sum up
8.10 Keywords

z Explain cost of quality
z Discuss the process model
z Describe life cycle model
z Identify the cost and economics of quality
z Explain quality planning
z Define quality information feedback
z Discuss internal customer conflict
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116
Quality Techniques
Quality is an abstract concept. Without definition or specification, quality cannot be
assured. Thinkers and writers have been trying to tackle big abstract words like
knowledge and beauty for thousands of years. Quality depends upon various factors
and hence can be defined in a variety of ways. To start with, we can define it as a
product or service free of deficiencies, as the totality of characteristics of an entity that
depend on its ability to satisfy stated or implied needs. The customer defines quality.
For some, quality means excellence in all aspects. Here, the price or affordability
aspect is ignored and this is a major limiting factor. The Oxford English Dictionary
defines quality as “that aspect of things under which they are considered in thinking or
speaking of their nature, condition, or properties”. The Webster’s Dictionary defines it
as “degree of excellence”. Quality is the extent to which products, services, processes,
and relationships are free from defects, constraints, and items which do not add value
for customers. There are a variety of perspectives that can be taken into account when
defining quality (e.g. customer’s perspective, specification-based perspective).
8.2 COSTS OF QUALITY

Costs are not incurred or allocated, but rather caused. Cost information does not solve
quality problems. It also does not suggest specific solutions. Tracing the cause of a
quality deficiency solves problems.
The cost of Quality is defined as the sum of the costs that would not have been
required had everything been done right the first time. It is considered to be any cost
that the company would not have incurred if the quality of the product or service were
perfect.
Quality is more than meeting a product specification because a specification only
provides a minimum set of requirements. It has been estimated that the costs of poor
quality account for anything from 15% to 50% of all business costs. As most
businessmen do not keep reliable statistics, they do not know the actual amount of
their quality costs.
Feigenbaum proposed categorization of quality costs into prevention, appraisal and
failure costs. Crosby took an economic approach by evaluation of quality costs
associated with the production, identification and rectification of non-conforming
product.
Following are some of the approaches to the classification of costs:
z The process model
z The PAF model
z The life cycle model
8.2.1 The Process Model

The process model groups the costs as cost of conformity and cost of nonconformity.
Cost of conformity is the cot to fulfill all of the stated and implied needs of customers
in the absence of failure of the existing process. Cost of non-conformity is the cost
incurred due to failure of the existing process. The cost of quality is generally the sum
of conformance and non-conformance costs.
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8.2.2 The PAF Model 117
Quality Cost
The PAF model groups the cost under the four primary cost categories:
z Prevention
z Appraisal
z Internal failure
z External failure
Prevention Cost
The experience gained from the identification and elimination of specific cause of
failure and their costs is utilized to prevent the recurrence of the same or similar
failures in other products or services. The prevention costs of poor quality have been
defined to include the cost of all activities specifically designed for this purpose.
Corrective action that is directed toward elimination of the problem in the future may
be classified as prevention. They are investments made to keep nonconforming
products from occurring and reaching the customer. These could be:
z Quality planning costs – such as salaries of individuals associated with quality
planning and problem-solving teams, the development of new procedures, new
equipment design, and reliability studies.
z Process control costs – which include costs spent on analyzing production
processes and implementing process control plans.
z Information system costs – expended to develop data requirements and
measurements.
z Training and general management costs–including internal and external training
programs, clerical staff expenses, and miscellaneous supplies
z Costs associated with trying to prevent defects and errors in
Training for quality
Educating suppliers
Designing product for quality
Designing production system for quality
Preventive maintenance
Appraisal Costs
Appraisal costs of poor quality have been defined to include all costs incurred in the
planned conduct of product or service appraisals to determine compliance to
requirements. They are associated with efforts to ensure conformance to requirements,
generally through measurement and analysis of data to detect nonconformance. These
are
z Test and inspection costs – associated with incoming materials, WIP, and finished
goods, including equipment costs and salaries.
z Instruments maintenance costs – arising from calibration and repair of measuring
instruments.
z Process measurement and control costs – which involve the time spent by
workers to gather and analyze quality measurements.
z The first responsibility of a quality management system is assurance of the
acceptability of product or service as delivered to customers.
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118 Internal Failure
Quality Techniques Internal failure cost includes all the material and labour expenses that are lost or
wasted due to non-conforming or otherwise unacceptable work affecting the quality of
end products or service. It is the cost to fix a problem found internally when defects
are found before shipment/delivery to customer as:
z Labour and materials going into scrap
z Reworking and re-testing to correct defects
z Downtime of equipment and labor while waiting for repairs
z Yield losses.
External Failure
External failure cost includes all costs incurred due to actual or suspected
non-conforming product or service after delivery to the customer. These costs consist
primarily of costs associated with the product or service not meeting customers or user
requirements. It is the cost to fix a problem found after receipt by customer as:
z Loss of customer goodwill
z Recalls to correct problem
z Warranty, insurance, and legal suit settlements
z Lost sales
z Other indirect costs.
Generally, internal failure costs are less expensive than external failure costs.
Conformance costs include the costs of testing and measuring the environment to
determine whether it conforms to the expected quality standards. Non-conformance
costs are the costs associated with mistakes.
Total quality costs are the sum of Prevention costs, Appraisal costs, Failure costs, and
Intangible costs.
8.2.3 The Life Cycle Model

In the life cycle model, the costs are grouped under different phases of the life cycle of
the product. Quality costs increase over time.
Measuring the quality costs is important in order to manage them.
We must measure it first. Measures of quality costs provide the information needed to
analyze where the excess costs are occurring. We can then target improvement
projects to reduce them.
It can be seen from the above graph that quality costs increase over time. Hence it is
better to make the corrections at the earliest stage. That is Prevention.
Failure costs usually account for the major proportion of quality costs in companies
that do not have an effective quality program. Prevention costs are typically quite low.
When Quality Management is introduced one would expect prevention costs are to
increase and failure costs and appraisal costs to go down.
Quality measurement should begin with a system for documenting non-conformances.
Every time an item fails a test, a purchased item is rejected, a statistically controlled
process exceeds its limits, or a product is returned from a customer, the non-
conformance must be documented.
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Quality costs help to show the importance of quality – related activities to 119
Quality Cost
management. They identify opportunities for quality improvement and establish
funding priorities by means of Pareto analysis. This analysis allows the quality
improvement program to concentrate on the vital few quality problem areas.
Once corrective action has been completed, the quality costs will measure the
effectiveness of that action in monetary terms. Quality improvement is synonymous
with a reduction in the cost of poor quality. Every amount saved on quality cost has a
positive effect on profits.
Traditional systems do not measure quality costs. So management may not realize the
size and importance of these costs. Quality costs are part of a firm’s quality
management system. They require understanding customer requirements and
translating them into appropriate defect rates.
1. Define quality.
...……………………………………………………………………………
...……………………………………………………………………………
2. Define cost of quality.
...……………………………………………………………………………
...……………………………………………………………………………
8.3 IS QUALITY FREE OF COST?

Quality and cost will go hand in hand on to the merit or demerit of the company. The
biggest result of poor quality is loss of customer, when we talk of lowering cost of
production it means looking at ways of minimizing operational costs but only
interfering positively to quality in order to keep and make more customers.
Maintaining and improving the product quality involves costs-establishment of
Quality Management Systems, personnel training, Performance Audits, but the
company should recoup this from increased income as customer satisfaction comes
with more sales and new customers.
8.4 ECONOMICS OF QUALITY

Although the terms "economics of quality" and "quality costs" are often considered to
be synonymous, but there is the clear distinction between the two. The first we
interpret as economic analysis applied to Quality Control and the second we interpret
as the specific cost items attributable to quality improvement activities.
Generally speaking, there are two main approaches to dealing with the economics of
quality. Firstly, there are models which are supposed to reflect the 'economic cost of
quality'. Secondly, emerging developments have a basis in systems approaches to
quality costs. This lesson seeks to illustrate the problems which arise in collecting
appropriate data for a "cost of quality" exercise and evaluating the economic cost of
quality. The practical measurement of quality costs involves dealing with the attitudes
and approaches by management to exactly what constitutes a quality cost. Many
components of quality costs can only be estimated and this adds to the difficulty in
applying the economic models of analysis in an organisation. Turner (1969) explained
that there were too many variables to illustrate the situation graphically. Other writers
have commented on factors which have a bearing on the determination and use of
quality costs. For example, Bajpai and Willey (1989) indicated that since data on
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120 quality costs are elusive, many companies are unable to identify real benefits which
Quality Techniques can accrue from improving quality.
Organisations are likely to use accounting cost principles rather than economic cost
principles in deciding on their quality level. For example, opportunity costs will
generally not be taken into account. In quality terms, activities such as doing things
twice could be included as opportunity costs as the staff concerned are not available
for other tasks (there will be lost production) whilst they are correcting failures.
However, before the practitioner can use the model as a management tool, it is
essential that the subject organisation (department or company) is geared to providing
information. The problems identified in the two organisations featured in this lesson
include consistency in data collection, verification of the data collected and adding a
'real' value to the data.
8.4.1 Economic Cost of Quality

Juran (1951, p8) discussed the 'economics of quality of conformance' when he first
offered a model which showed the 'economics of quality'. He fully recognised the
economic dilemma:
"...the basic quality problem ... is to strike the optimum balance between cost of
quality and value of quality for each quality characteristic ..."
He argued that increased conformance reduces the losses due to defectives and states
that "the cost of the controls needed for greater conformance rises geometrically as
perfection is approached". This reflects the economist's perception of falling marginal
returns (to added quality effort) and from this we can deduce (when we also consider
that marginal benefits from added quality effort are likely also to decline) that
perfection will not be achievable – let alone optimal! Since Juran's paper there has
been a great proliferation of notional or conceptual models based on Juran's work and
these very often relate costs in dollars to the quality of conformance – from 100%
defective up to no defectives at all. There are, however, very few explanations as to
how the economic models are supposed to work in practice.
Gryna analyses the differences between Juran's early model and his later (1988)
model. Gryna's model suggests that perfection can almost be reached in an economic
manner in that the costs of appraisal plus prevention are finite not infinite.
Sittig (1963) not only explained 'the economics of quality', he also dealt with 'the
problem of optimal quality' and introduced aspects of 'the dynamics of quality'. He
says: "... the difference between 'production costs' and 'quality costs' is entirely
artificial. Quality costs do not exist as a category opposed to production costs and
therefore strictly speaking, do not exist at all. This does not mean that it is unimportant
to analyse the relationship between cost and quality. On the contrary this relationship
has been the pivot of our theoretical discussion ..."
A number of issues emerge from this investigation of the literature, including the lack
of real economic models of quality and cost – as most tend to be notional models
without supporting evidence.
Turner (1969), following methodologies from economics, illustrated the relationships
between 'quality of conformance' and 'dollars' as well as 'the amount of inspection and
quality control for operations' and 'unit cost - dollars'. Both of these illustrate that the
"optimum" point at maximum total cost is not the same as the break even point of the
other curves. Turner 's key contribution was to discuss quality costs in economic terms
such as marginal cost and marginal revenue but the quality cost curves, although
depicted this way, are rarely supported by evidence.
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As can be seen from Juran's initial models, the costs of improvement continue to rise 121
Quality Cost
whilst the costs of failure continue to fall (again this illustrates the principle of
diminishing marginal returns in both benefits and effort). For a regular decision about
how much to produce, the Marginal Cost curve illustrates the additional cost incurred
by the firm to produce one more unit of output. (In practice, the output units do not
have to be single and judgements have to be made in relation to unit or batch size.)
A firm should produce where Marginal Revenue is equal to Marginal Cost but when
profit is less than zero it may be preferable to shut down rather than continue. The shut
down rule is "if for every choice of output level the firm's average revenue is less than
its average cost, the firm should shut down" (Katz and Rosen, 1994).
The key point to this decision is, of course, the distinction that needs to be made
between short- and long-run costs and revenues. In the short-run losses may be
tolerated because of the expectation of making long-run profits but long-run losses can
be expected to lead to shut down.
8.4.2 Organisations and the Economic Cost of Quality

Aspects of the economics of quality include the attitudes and approaches by
management to the quality problem and this section outlines some of the
organisational factors which contribute to determining the optimal quality decision.
Gupta and Campbell (1995) explained that not all companies measure the costs of
quality. They showed that only five out of the 22 companies in the final round of the
1991 Malcolm Baldrige National Quality Award calculated quality costs. Most
importantly, they stressed that the barriers to introducing prevention programmes were
behavioural rather than economic because they "require vision, innovation and a
break from the status quo."
One underlying principle in dealing with the economic side of quality is that failure
costs are assumed to be higher than prevention (and appraisal) costs. Elshazly (1999)
dealt with accounting for quality costs and provided an outline of seven lessons from
the accounting aspect. One key lesson is that if a company wants to reduce its quality
costs and enhance its product and service quality, then it must be willing to spend
more money on prevention, because there is an obvious trade-off between prevention
and appraisal along with the internal and external failure costs. Elshazly explains that
the underlying premise that failure costs exceed prevention costs means that, as
prevention costs increase failure costs will drop. The main thrust of the argument is
that the accountant can help provide company-wide costs of quality in a number of
different ways, including management involvement and adapting accounting systems
meaningfully.
In his 1998 paper Kume states that "many companies treat the economic problems
pertaining to quality as quality costs". Kume explains that this is not the way things
happen in practice and management should not be concerned with these costs but
should try to minimise the loss using quality management. For example, changes in
what the workers were actually doing in a sub-process in a car manufacturer rendered
the whole process was sub-optimal. His view is that when loss prevention and the
development of new business and sales (which are just two parts of a company) are
well balanced, a company can maximise long-run profit.
State whether the following statements are True/False:
1. Prevention costs are typically quite low.
2. The practical measurement of quality costs involves dealing with the
attitudes and approaches by management to exactly what constitutes a
quality cost.
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122
Quality Management and 8.5 QUALITY PLANNING
Quality Techniques
One of the most difficult questions to be answered by managers in the process of
quality improvement is “Can Quality Improvement be identified just by looking at it
or they need concrete evidences to substantiate their decisions.”
Managers are required to take SMART Decisions for justifying their arguments.
SMART is one word which is used very freely in today’s economic world. The
strategic thinkers and policy makers talk about SMART organizations, which can
survive during times of uncertainty. The HR departments are always looking for
SMART individuals, who can drive the organisations forward. The production people
are always striving to have SMART products/services, which are readily accepted by
the customer. The marketing wizards are always involved in the process of innovating
SMART promotional strategies to outshine competition and attracting customers. The
financial number crunchers are always searching for SMART deployment of financial
resources to maximise the returns to the shareholders.
Further, SMART is the undercurrent of every organisation. Going into the depth of the
analysis one finds that SMART implies:
z Specific
z Measurable
z Attainable
z Realistic
z Timebound
Thus, we can see that the stress in every decision, whether it is for planning, for
control or for improvement is on being objective, which can be justified with proper
facts based on data and which is realistic and achievable during a given time-frame.
All types of quality plans are inter-related. Quality planning attempts to meet the
quality needs of the customers. In order to meet these customer needs a quality
planning road can be prepared which is depicted in Figure 8.1. The road may consist
of structured and sequential steps. Output of each preceding activity or step becomes
the input for the next step and so on.
This road map is universal in nature as it is applicable to quality planning throughout
the economy, to all industries in both the manufacturing and service sectors. It is
applicable at all levels in an organisation, such as corporate, division, department, and
job and in all functional areas such as marketing, finance, production/operations and
human resources.
The quality planning road map can be applied at the following levels:
z Supervisory and worker level
z Functional level
z Multifunctional systems
z Major programmes
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123
Quality Cost
Figure 8.1: The Quality Planning Road Map
8.5.1 Supervisory and Worker Levels

Each employee is assigned a job. Large number of jobs requires quality planning as
well as re-planning as the job may be dynamic. In some cases the employees
themselves are given training to plan their jobs. Some of the concepts and tools which
are used for quality planning at this stage are:
Self-control Concept
A person is said to be in the state of self-control, when work/job is organised in such a
manner so that the person can have full control as well as mastery over the attainment
of planned results. Such a person can be held responsible for the performance results.
In order that a person can achieve self-control he should be provided with:
z Knowledge of what he is supposed to do
z Knowledge of what others are doing
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124 z Means for regulating either of the two above if the failure to meet the objective
Quality Techniques results.
The Triple Role Concept

Each employee holding a job should be able to carry out the following three roles:
z As a customer
z As a processor
z As a supplier
This concept is depicted in Figure 8.2. Using this concept natural progression of
quality planning can be achieved.
Figure 8.2: The Triple Roles
Functional Level
Functional managers in charge of different areas undertake quality planning to manage
their performance in a better way. For example, planning for the marketing function
places major emphasis on the defined role of quality planning in marketing
department. In most cases the functional managers are not trained professionals in the
field of quality. Hence, either they can receive help and guidance from quality
specialist or they themselves can be trained in quality issues to become quality
professional. Training may be given in the field of skills and tools of planning for
quality.
8.5.2 Multifunctional Systems

Some systems such as Management Information Systems (MIS), Human Resources
and New Products Development are all pervasive. These systems have spread their
tentacles in many functional areas as they receive inputs from all major functional
areas. Inadequate quality planning may jeopardize the working of the systems.
Central quality planning is highly useful in achieving coordination among all the
functional areas involved. Various methods are available for achieving central
planning with emphasis on quality:
z A team (or committee) of functional managers.
z A team (or committee) of functional managers, with the assistance of quality
specialists.
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z A project management department. 125
Quality Cost
z The quality assurance department.
8.5.3 Major Programmes

The term major programmes is used here in the context of costly projects such as
nuclear power plants, development of a new weapon systen1, launching a satellite into
space etc. Each of these projects is so complex and unique that they require specific
quality planning for the major programmes in question. In these programmes it is
common for clients to specify the quality plans and also the product/project
performance specifications. For meeting these specifications the organizational
structure used by the contractors (i.e. suppliers of these programmes/projects) should
be the matrix type. Moreover, the contractor should provide assurance to the client
that all the specifications have been met as per the contract. The documentation part of
the contract may be very intensive. In addition to achieving the quality assurance, it
may be helpful in the event of legal battles.
8.6 QUALITY INFORMATION FEEDBACK

Customer feedback must be continually solicited and monitored. Customers
continually change. They change their minds, their expectations, and their supplier.
Customer feedback is not a one-time effort; it is an ongoing and active probing of the
customers’ mind. Feedback enables the organization to:
z Discover customer dissatisfaction.
z Discover relative priorities of quality.
z Compare performance with the competition.
z Identify customer’s needs.
z Determine opportunities for improvement.
Even in service industries, such as insurance and banking, customer feedback has
become so important that is drives new product development. There are programs to
identify and analyze errors, take corrective action, and make ongoing enhancements.
All these efforts are justified when the consumers’ expectation levels are very high.
Effective organizations take the time to listen to the voce of the customer and feed that
information back to the idea stage. For instance, listening to the voice of the customer
changed how the Internal Revenue Service does business. Previously, the IRS thought
that good customer service was mailing tax form out right after New Year’s Day.
Then, the IRS asked its customers what good customer service was. The IRS found
out that the customers wanted fast refunds and very little contact with the IRS. Now
about 20 million taxpayers can forget using the 1040EZ form and file on their touch-
tone phone. There is no contact with the risk, it takes about six minutes, and the phone
system does the math. Refunds are received within 21 days.
Listening to the voice of the customer can be accomplished by numerous information
collecting tools. The principal ones are comment cards, questionnaires, focus groups,
too-free telephone lines, customer visits, report cards, the Internet, employee
feedback, mass customization and the American Customer Satisfaction Index.
Fill in the blanks:
1. In SMART, “M” stands for ………….. .
2. MIS stands for ………….. .
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Quality Management and 8.7 INTERNAL CUSTOMER CONFLICT
Quality Techniques
Internal customers are also important in a TQM program. These are the people, the
activities, and the functions within the company that are the customers of other people,
activities, or functions. Hence, manufacturing is the customer of design, and several
departments may be customers of data processing.
Conflict frequently arises between the needs of internal and external customers. In
many cases, processes are designed to meet the needs of internal customers. Any
“customer” who has been admitted to a hospital or outpatient service understands this.
The registration process is designed to meet the needs of admitting department,
business office, or medical records. The result is a long wait to give information that
will be provided again and again to personnel who represent admitting, the laboratory,
finance, social work, and medicine. Who is the customer? Who is the beneficiary?
Who is the recipient of the output? The patient gets the impression that he or she is a
piece of raw material being moved along an amorphous assembly line known as
healthcare.
It is not too difficult to identify other example in both the private and public sectors.
How about a university? It has been said that of you want to find out what of
organization you are about to do business with, call on the phone!
A balance needs to be struck between the needs of these two customer groups. The
solution is to determine the real needs of each and design the process to meet both.
8.8 LET US SUM UP

Quality costs help to show the importance of quality – related activities to
management. They identify opportunities for quality improvement and establish
funding priorities by means of Pareto analysis. This analysis allows the quality
improvement program to concentrate on the vital few quality problem areas. Once
corrective action has been completed, the quality costs will measure the effectiveness
of that action in monetary terms. Quality improvement is synonymous with a
reduction in the cost of poor quality. Every amount saved on quality cost has a
positive effect on profits.

Discuss the relation between organization and economic cost of quality.
8.10 KEYWORDS
Persuasiveness: Good leaders are able to use their power and communication skills to
good use. They convert their power into influence.
Quality: It is defined as “that aspect of things under which they are considered in
thinking or speaking of their nature, condition, or properties”.
The Life Cycle Model: In the life cycle model, the costs are grouped under different
phases of the life cycle of the product. Quality costs increase over time.
Total Quality Costs: Total quality costs are the sum of Prevention costs, Appraisal
costs, Failure costs, and Intangible costs.

1. What do you mean by cost of quality?
2. Explain PAF model in detail.
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Quality Techniques
LESSON
9
BENEFITS OF QUALITY
CONTENTS
9.1 Introduction
9.2 Benefits of Quality
9.2.1 Customer Satisfaction
9.2.2 Employee Satisfaction
9.2.3 Product Improvement
9.2.4 Less Rework
9.3 Competition in Quality
9.4 Role of MNC’s in Emergence of Global Quality
9.4.1 MNCs and Indian Industries
9.5 Let us Sum up
9.7 Keywords

z Describe quality benefits
z Know quality competition
z Explain role of MNC’s in global quality
9.1 INTRODUCTION
With multinational approach, a firm is willing to make substantial commitment to a
foreign market. Normally, products or services are modified to meet the foreign
market demands, and in many cases, substantial fixed investments are made in plants
and equipment. The most common ways to become a multinational firm are to form
joint ventures or global strategic partnerships, or to establish wholly-owned
subsidiaries.
9.2 BENEFITS OF QUALITY

Quality is a very important aspect of project management. Quality is a culture. Al the
employees need to adopt it. The procedures and standards help achieve quality.
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Benefits of quality are: 129
Benefits of Quality
z Customer Satisfaction
z Employee Satisfaction
z Product Improvement
z Less Rework
9.2.1 Customer Satisfaction

People develop belief about what they expect to happen before they make a choice.
Customer satisfaction is a post-purchase or post-choice evaluation that results from a
comparison between those pre-purchase expectations and actual performance.
Fulfillment of an expectation is confirmation. If there is a disconfirmation
expectations are not met. Dissatisfied customers may complain, choose never to
purchase the transactional experience is thus seen to result in confirmation or
disconfirmation yet for most organizations, the goal is to measure and manage
customer satisfaction with the cumulative experiences customers have with the brand,
product, organization, or location.
Effective marketers try to understand if the discrepancy between expectations and
performance is large or small. The term delightful surprises has been use to describe
situations in which customer receive fulfillment that exceeds the satisfaction of
unexpected needs or wants. A delightful surprise may be a defining moment in which
a regular customer becomes a loyal advocate. Effective marketers likewise try to
understand the degree of discrepancy when marketers fail to meet expectations and the
causes of consumer dissatisfaction.
Satisfied customers may not be loyal customers. One explanation is that expectations,
which shape satisfaction, are complex and exist at different levels. People may
formulate expectations in terms of a desired level – what should be done – and in
terms of an adequate level – what will be done. Many marketers believe customers
have a zone of tolerance where expectations range from what they hope to receive to
what is minimally in a study of satisfaction. The company ranked satisfaction on a
5-point scale ranging from 1 for completely dissatisfied to 5 for completely satisfied.
It found that customers who rated their satisfaction as 4 were six times more likely to
switch to a competitive offering than those who marked 5 were. So, while satisfaction
is important in knowing what shapes loyalty, we have to go deeper to fully understand
loyalty.
Why do satisfied customers often switch brands or buy from other companies? There
are several explanations. The first is that a company’s satisfied customer might also
have a positive experience with and be equally satisfied with a competitor’s offering.
Thus relative satisfaction should be considered in the role that customer satisfaction
plays in shaping customer loyalty. Another has to do with familiarity and a need for
variety. People may simply opt for an experience because they get less and less
satisfaction from the old one. A third explanation is that new information changes
customer expectations about a previously untried offering.
9.2.2 Employee Satisfaction

Employee satisfaction is a measure of how happy workers are with their job and
working environment. Keeping morale high among workers can be of tremendous
benefit to any company, as happy workers will be more likely to produce more, take
fewer days off, and stay loyal to the company. There are many factors in improving or
maintaining high employee satisfaction, which wise employers would do well to
implement.
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130 To measure employee satisfaction, many companies will have mandatory surveys or
Quality Techniques face-to-face meetings with employees to gain information. Both of these tactics have
pros and cons, and should be chosen carefully. Surveys are often anonymous, allowing
workers more freedom to be honest without fear of repercussion. Interviews with
company management can feel intimidating, but if done correctly can let the worker
know that their voice has been heard and their concerns addressed by those in charge.
Surveys and meetings can truly get to the center of the data surrounding employee
satisfaction, and can be great tools to identify specific problems leading to lowered
morale.
Many experts believe that one of the best ways to maintain employee satisfaction is to
make workers feel like part of a family or team. Holding office events, such as parties
or group outings, can help build close bonds among workers. Many companies also
participate in team-building retreats that are designed to strengthen the working
relationship of the employees in a non-work related setting. Camping trips, paintball
wars and guided backpacking trips are versions of this type of team-building strategy,
with which many employers have found success.
Of course, few workers will not experience a boost in morale after receiving more
money. Raises and bonuses can seriously affect employee satisfaction, and should be
given when possible. Yet money cannot solve all morale issues, and if a company with
widespread problems for workers cannot improve their overall environment, a bonus
may be quickly forgotten as the daily stress of an unpleasant job continues to mount.
If possible, provide amenities to your workers to improve morale. Make certain they
have a comfortable, clean break room with basic necessities such as running water.
Keep facilities such as bathrooms clean and stocked with supplies. While an air of
professionalism is necessary for most businesses, allowing workers to keep family
photos or small trinkets on their desk can make them feel more comfortable and
nested at their workstation. Basic considerations like these can improve employee
satisfaction, as workers will feel well cared for by their employers.
The backbone of employee satisfaction is respect for workers and the job they
perform. In every interaction with management, employees should be treated with
courtesy and interest. An easy avenue for employees to discuss problems with upper
management should be maintained and carefully monitored. Even if management
cannot meet all the demands of employees, showing workers that they are being heard
and putting honest dedication into compromising will often help to improve morale.
9.2.3 Product Improvement

Product Improvement is a cross-functional effort between the Engineering,
Manufacturing, Quality and Marketing teams to monitor product quality/yield/cost
and then identify, prioritize and implement ongoing product improvement activities.
Can you answer the following questions for your current products? What about the
products currently in development?
z What are your top three quality improvement opportunities and how much do they
buy you?
z Does product quality vary as a function of volume? What happens to product
quality if volumes increase 100%, 500% or 1000%? What if you decrease volume
by 10%, 50% or even 75%?
z You have identified many product improvement opportunities but money and
resources are tight. Which should you pursue?
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z Your product requires a complex manufacturing process and the quality is not 131
Benefits of Quality
where it needs to be. How do you improve it?
z The product moves through a complex supply chain with value-added steps being
performed by multiple suppliers operating in multiple locations. What is the
product's true yield? What should it be?
The Product Improvement Workshop is an interactive session and is intended for
intact team involvement. Attendees will apply the concepts presented to develop
product improvement recommendations for an actual client product. A one-day
follow-up session is scheduled for 4-6 weeks after the workshop to assess team
progress.
z Failure Mode Effects Analysis
z Product improvement roadmaps
z Recommendation & 1 day post-workshop follow-up review.
9.2.4 Less Rework

Quality to the production worker means that his performance satisfies and provides to
him pride of workmanship.
9.3 COMPETITION IN QUALITY

The theoretical link between market competition and product quality is ambiguous is
an understatement. Intuitively, should not increasing competition provide an incentive
for a firm to increase product quality in order to garner the attention of consumers
facing a large choice of products? On the other hand, is a more concentrated industry
with firm market power necessary for economic profits to exist to cover fixed costs for
higher quality? But, in that case, will the decline in competitive pressure end up
reducing the incentives to satisfy consumers?
Companies that join forces with others will be able to quicken the pace of research and
development while cutting the costs connected with utilizing the latest technology.
Regardless of the kind of business a company is in, it must choose partners and
locations that possess an available work force to deal with the applicable technology.
Many companies have chosen Mexico and Mexican partners because they provide a
willing and capable work force. GM's plant in Arizpe, Mexico, rivals its North
American plants in quality.
The increased emphasis on quality has largely been attributed to increased competition
faced by U.S. firms, especially from Japanese competitors. Hayes et al. (1988), for
instance, state: ‘‘In virtually every industry in which American manufacturers lost
market share over the past decade, there was evidence that their products were
perceived by consumers as offering poorer quality than equivalently priced foreign
products.’’ The 1980s saw Japanese firms make dramatic gains in market share in
industries such as automobiles, semiconductors, and consumer electronics. A major
reason for the success of these firms was the superior quality and reliability of their
products. For example, in the automobile industry in 1979, Toyota averaged 0.71
defects per vehicle shipped, while Ford averaged 3.70 defects (Garvin 1988). This, in
turn, led to U.S. automobile firms’ improving the quality of their products.
If increased competition is the primary basis for the renewed focus on quality today, it
is important to understand how the quality improvement decision of a firm is linked to
its competitors’ choice of quality levels and the degree of competitive intensity
between the firms. Before we can investigate this link, however, we need to define
clearly what we mean by both ‘‘quality’’ and ‘‘competitive intensity.’’
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132 Quality is defined in many different forms in the operations management literature.
Quality Techniques A typical example, illustrative of what is frequently found in operations management
textbooks, is the following: ‘‘the quality of a product may be defined in the quality of
its design and the quality of its conformance to that design.’’ The intent behind quality
improvements is to make the product more attractive to the customers. In this study,
therefore, we will use the term ‘‘quality’’ to refer to both design and conformance
quality characteristics that are of interest to the customer when evaluating the product
offered by the firm. A higher quality level selected by a firm is reflected in our models
in an upward shift in the firm’s demand function and a downward shift in its
competitors’ demand functions.
9.4 ROLE OF MNC’S IN EMERGENCE OF GLOBAL

QUALITY
From the perspective of MNC subsidiaries in emerging markets, the preceding global
integration arguments would predict that MNC subsidiaries in emerging markets gain
low cost supplies from two sources: local and/or global sourcing. Local sourcing
means that the subsidiaries source supplies from local (host) markets. Local sourcing
saves costs because of the low labour costs in emerging markets. Alternatively,
the subsidiaries can also gain low cost supplies from global sourcing
(i.e., getting/sourcing supplies from parents’ integrated supplier channels). In fact,
MNC supplier channels may not need to locate in low-cost countries to be cost
competitive, because global economies of scale may lead to competitive costs. For
example, as developed countries frequently have superior technology and human
capital, sourcing from these countries may enable MNC subsidiaries in emerging
markets to enjoy better quality and lower defect rates that result from these global
economies of scale – thus reducing the overall sourcing costs.
MNCs are not new in India if we look in the past British East India Company and
Dutch East India companies were there which came to India for trade and by taking
advantage of political conditions of India gained power. After adopting new economic
policy by government of India in July 1991 many MNCs came in the Indian economic
scene because the government of India gave many incentives to the foreign investors.
So it is clear that government opened the doors of Indian market to MNCs. Now the
question is how the MNCs are affecting Indian economy whether they are useful for
our economy or not? Let us analyze some brief impacts of MNCs on different sectors
of the economy.
9.4.1 MNCs and Indian Industries

Some economists think that MNCs are helpful for Indian industrial sector they think
that Indian companies learn new technique of production and new management
techniques with the arrival of MNCs in the Indian economic scene. MNCs increase
competition in the industrial sector so when Indian companies compete with global
giants they also improve in their working. With the entrance of MNCs in India
demand for skilled persons increased to a great extent so more and more people are
becoming skillful and the problem of skilled persons is solved for Indian industries
also. MNCs also bring foreign capital in the country, which help to expand the market
and Indian industries also take benefit of it.
There are some economists who have some different opinion according to them the
technology transferred by them is not useful for countries like India because MNCs
use capital intensive technique and developing countries have scarce capital and
labour abundant so the technology they transfer is of little use. The competition
increased by MNCs is also disastrous for domestic industries only few strong
domestic industries have enough strength to face the competition with global giants.
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As well as skilled persons are concerned MNCs give higher salaries to the skilled 133
Benefits of Quality
persons and thus able to explore the services of the most skilled persons and the Indian
industries are still out of the services of these skilled people. No doubt MNCs bring
foreign capital in India but this capital later becomes the cause of reimbursement of
profit to the MNC's parent countries, which cause capital flight from the country.
Technological spillover is defined as transfer of knowledge and skills (technical and
organisational) from MNCs that result in an improvement in the performance of
MNCs partners, suppliers or competitor firms, as well as of the other agents that
interact with them (Vera-Cruz and Dutrénit, 2005). The technological spillover thus
generates productivity or efficiency benefits for the host country’s local non-affiliated
firms. The availability of new foreign knowledge through MNCs may benefit
domestic firms as they can learn the technology from them, which allow them to
upgrade their own production process, and as a result, improve their productivity.
The theoretical and empirical literature identifies two major concepts of technological
spillovers, which are rent-spillovers and knowledge-spillovers (Griliches, 1992). Rent
spillovers occur when new goods are purchased at prices below those that would fully
reflect the value of technological improvements from R&D investments. They can be
considered as a pecuniary externality from upstream industries, whose competitive
market structure may not allow firms to fully transform higher quality into higher
prices. Knowledge-spillovers occur when innovation by one firm is adopted by
“adjacent” firms, thus enhancing their productive and innovative capabilities.
Knowledge spillovers arise exclusively as an intangible transmission of ideas; in
principle, they are not embodied in traded goods, and thus they do not necessarily
require economic transactions.
Check Your Progress
Fill in the blanks:
1. Effective ……………… try to understand if the discrepancy between
expectations and performance is large or small.
2. ……………… satisfaction is a measure of how happy workers are with
their job and working environment.
3. Technological ……………… is defined as transfer of knowledge and
skills.
9.5 LET US SUM UP

As a result of the potential role of MNCs in accelerating growth and economic
transformation, many developing countries in general and Africa in particular, seek
this type of investment to accelerate their developmental efforts. This in turn has led
many African countries to put in place various measures that they hope will attract
MNCs to their economies, including improving their quality environment.

Discuss the benefits of quality in the way of customer satisfaction.
9.7 KEYWORDS
Customer Satisfaction: Customer satisfaction is defined as “the number of customers,
or percentage of total customers, whose reported experience with a firm, its products,
or its services (ratings) exceeds specified satisfaction goals”.
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LESSON 137
Quality System
10
QUALITY SYSTEM
CONTENTS
10.1 Introduction
10.2 Quality System
10.3 Quality Control
10.4 Total Quality Control System vs Total Quality Management System
10.4.1 Total Quality Control
10.4.2 Total Quality Management System
10.5 Let us Sum up
10.7 Keywords

z Define quality system
z Know quality control
z Compare total quality control system with total quality management system
10.1 INTRODUCTION
Quality is important not only as a measure of how competitive a business is, it also
determines the efficacy of sciences, technologies, state governance and other public
sector organisations, the stability of a nation’s economy, and the quality of life of its
citizens. This is why it is necessary to broaden our understanding of quality. The
model of interaction of the sciences, technologies, quality and economics is showed in
the article. Technologies and quality are the integrating and maintaining factors of the
engineering, economics and management systems.
10.2 QUALITY SYSTEM

Quality, quality management, quality control, etc. are not functions but products of
sound management. Principles and effective management of design, are – scope,
specification, documentation, cost, budgets and time. From inception to the
completion of a construction project, each function must be aimed at the achievement
of quality, whether the function is design, specification, documentation or
procurement. Furthermore, the element of competition and what it purports to achieve
must not be forgotten.
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138 The traditional approach to competitive tendering involves the calling of tenders
Quality Techniques addressed to a principal, which purports to carry out specified work and/or the supply
of goods in return for specified payment. In the evaluation of the tenders, the principal
will seek a tender that best suits the specific requirements of price, time and quality.
From time to time, other criteria may also apply. In recent South African experience,
tenders submitted to the various state bodies might also be evaluated on the basis of:
z Affirmative action
z Training
z Labour content
z Local materials
z Community involvement.
The appointment of professionals may also be classified as 'competitive' as the
consultant team should be able to produce a product meeting standard levels of
acceptability, manage the process and motivate the contractor to achieve the highest
levels of quality.
Taking the foregoing into account, the generation of quality products in construction is
influenced by the following determinants:
z Budgets
z Development cost plans
z Design and design management
z Specification
z Documentation
z Communication systems
z Total cost management and control
z Time scheduling and time management.
Quality is inherent in each of these processes, which should not be reactive, but rather
inherent in dynamic and proactive management of quality-achievement. At the risk of
subordinating the purposes and interests of those who use and live in buildings,
professionals, consultants, developers and contractors must realize the needs of the
market, the people and the community they serve. The danger is that through
"conceptual frameworks we risk isolating fragments of social reality,
decontextualising, and then recontextualising and, in so doing, creating a different
kind of world". In the final analysis, quality can only be achieved in a specific
context, within a specific environment, for a real community.
The determinants of quality are of importance to operations academics and managers,
and they provide the identification of the determinants of service quality. There are
some quality determinants that are predominantly satisfiers and others that are
predominantly dissatisfiers. It is found that the predominantly satisfying determinants
are attentiveness, responsiveness, care and friendliness; and the dissatisfiers are
integrity, reliability, responsiveness, availability and functionality. Responsiveness is
identified as a crucial determinant of quality as it is a frequent source of satisfaction,
and the lack of it is a major source of dissatisfaction. Contrary to the existing
literature, shows that the causes of dissatisfaction are not necessarily the obverse of
the causes of satisfaction and, furthermore, that reliability is predominantly a source of
dissatisfaction not satisfaction.
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Further, determinants of quality include the management activities of “control”, 139
Quality System
“improvement” and “the rest”. Using various examples, the use of people and data are
explained in the management of control and improvement. It is concluded that if
companies are to improve their service/ product's quality, they must review the needs
for improvement of data collection and presentation and the quality skills needed at all
managerial levels.
With the recent growing interest in service relationships in the industrial sector, a need
exists to investigate the underlying determinants for service quality for business-to-
business service encounters.
Example
Here is an example of the determinants of quality needs in the case of childcare:
There is consensus around the world that young children must experience high quality
services, not only to ensure the best possible future outcomes, but because children
have the right to the best possible present. All children are found to benefit from high
quality early childhood programs, but those from disadvantaged backgrounds
demonstrate stronger advantages. The catchphrase ‘the importance of the early years’
has now become a call to arms: it is recognized worldwide that we must provide the
best possible services to young children and their families.
However, there is not universal agreement as to what constitutes best possible early
childhood services. Understandings of quality are value-based and change as values
change.
Understandings are also different across cultures, religions, contexts and the person or
group making the judgment. Myers (2004, p.19) argues that ‘different cultures may
expect different kinds of children to emerge from early educational experience and
favour different strategies to obtain those goals’. There is not a universal definition of
quality: in different times and places different kinds of practices are valued as high
quality.
Despite this, within the Western world, professionals assume at least a basic common
understanding. The European Commission Childcare Network attempted to define
these commonalities and came up with 40 quality targets. Analysing the literature
from a range of European countries, Myers (2004) argues there is consensus around
quality components including safety, good hygiene, good nutrition, appropriate
opportunities for rest, quality of opportunity across diversity, opportunities for play,
opportunities for developing motor, social, cognitive and language skills, positive
interactions with adults, support of emotional development, and the provision of
support for positive peer interactions. However, performance indicators identifying
how these principles play out in practice differ in different contexts and with different
levels of expectations and resources.
What is clear is that quality is multidimensional, complex and multi-theoretical. Single
indicators of quality are ineffective, as quality outcomes for children are found to
relate to a complex interplay of many different factors. In this context of complexity
and uncertainty, researchers attempt to measure quality, and states attempt to regulate
for quality care. Research tools measuring quality tend to focus on particular
theoretical approaches to learning, for example the developmentally appropriate
practice approach. At state level, regulations are introduced addressing certain easily
measured aspects of care. There is general agreement that where regulations are strict,
quality is enhanced and outcomes for children are better, so the assumption remains
that regulations must be doing some good. O’Kane (2005) agrees, arguing that
regulations contribute to enhancing quality practice, but they are not solely
responsible as there are a number of other factors coming into play.
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Quality Management and 10.3 QUALITY CONTROL
Quality Techniques
The quality control has overall responsibility for continuous improvement. Quality
Council is a group of senior managers appointed to plan, administer, facilitate and
monitor the entire Quality Process. The quality council consists of the key people in
the top management team. It is better that the CEO is a part of it. The quality council
at management level is a good tool to initiate, institutionalize, facilitate and evaluate
quality improvement in a company.
Quality councils should be established at the corporate, division & product line levels.
The strategic planning process must be initiated by the organization’s management
and make sure it continues. A team is the best for carrying out actual planning.
Ideally, such a team must have a diagonal cross-section of people within the
organization to ensure that all interests are met.
The council sets quality policy and reviews performance goals within the
organization, and it is responsible for the continuous improvement effort, and provides
the best information about what is really happening in the organization.
Both Juran and Crosby have made the establishment of quality control as one of the
steps in TQM. In general, the duties of the quality council are to:
z Formulate the core values, vision statement, mission statement, quality
improvement policy, etc.
z Strategic planning of quality improvement projects with goals and the annual
quality improvement program with objectives.
z Establishing the quality multifunctional project and departmental or work group
teams.
z Allocating sufficient resources to each quality improvement project.
z Providing adequate education and training for teams.
z Monitoring the progress of the teams and supporting them to do their work and
provide a periodic critical review process for each project.
z Facilitating implementation of project results.
z Establishing quality metrics to measure progress for the organization, approve
those for the functional areas, and monitor them.
z Continually determine those projects that improve the processes, particularly those
that affect external and internal customer satisfaction.
z Provide for team and individual recognition to account for the new way of doing
business.
z Establish an appropriate reward system that reinforces teamwork.
Most organizations establish a leadership group that will guide and direct the quality
effort. The quality council meets regularly to deal with the major issues that arise
governing the deployment of TQM throughout the organization. The chairperson of
the council at all levels should be a manager having overall responsibility and
authority for that level.
A coordinator is necessary to assume some of the added duties that a quality
improvement activity requires. He must report directly to the CEO. He has lots of
responsibilities that include:
z Building trust among the people.
z Co-ordinate the activities of various teams and council.
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z Share the expectations of the council with the teams. 141
Quality System
z Brief the council on the progress of the teams.
He has to play an active role in making the teams aware of their responsibilities,
helping the team leaders to have regular meetings, share lessons learned among
teams, etc.
The Quality Council (QC) is the focal point of the Total Quality Management (TQM)
process. It’s important to include perspectives from men and women, newcomers and
established employees, people from different racial or ethnic backgrounds, and
different age groups. The plan’s validity is strengthened by the assurance that all
perspectives are involved in the creative process.
A planning team consisting of only top-level managers is not effective. Vital
information and perspectives from other levels is likely to be filtered out. Hence, such
team also must have people who perform hands-on work or have direct contact with
customers. The team must have people senior-level people who can provide a broad
view of the organization’s situation.
The quality of the planning process is enhanced by the planning group’s diversity.
An effective team will offer a balance of perspectives from within and without the
organization. Quality council helps to build quality into the culture. It also helps to
provide over all direction. It is the driver for the TQM engine.
The Quality Control shall promote and coordinate continuous improvement efforts by
supporting all employees in carrying out the mission statement of the organization to
ensure exceptional customer service through involvement, communication and
commitment.
The council may use the group problem solving techniques, such as brainstorming and
consensus decision-making for identifying barriers and driving forces to the quality
effort. It must stress the importance of relying on the knowledge, talents and skills of
everyone in the group. The council also uses some of the structured tools such as data
gathering, simple statistical analysis, and structured problem solving techniques.
The Quality Council initiates change for global problems as well as specific problems
by preparing charters and suggesting team members. It further assists by offering
guidance when teams get stuck on issues or require facilitation.
Once the quality manager obtains and agreement to initiate a strategic planning
process, he or she must assemble the right mix of people to form a planning team. The
quality manager must obtain assurance from other managers that team members will
be given adequate time to work on this process.
The quality manager will either facilitate the process or ensure that an experienced
facilitator leads it. Often, the manager needs to participate as a team member, in which
case it’s advisable to employ a neutral facilitator who will focus on the planning
process.
Many CEOs are aware that a quality council alone cannot bring about the attitude
changes necessary to sustain continuous quality improvements. People resist the
demands of continuous change because it creates uncertainty. Top management
support is definitely needed.
In a typical organization, the council is composed of CEO, the senior managers of the
functional areas, such as design, marketing, finance, production, and quality and a
coordinator or consultant. If there is a union, its representative must also be made on
the council.
Ideally, it is better that the CEO is the chairperson of the quality council. Practicality
suggests that there is a limit on the CEO’s time. Therefore, a senior Vice President
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142 may chair the council; the CEO’s time can be thus used effectively for reinforcement
Quality Techniques and recognition programs after the council becomes operational.
In large organizations, quality council is also established at lower level of the
corporation. Their duties are similar but related to that particular level in the
organization. The quality council is expected to operate as any other team formed in a
quality context.
Hence, initially these activities will require additional work by council members.
In the lone-term, their jobs will be easier. These councils are the instruments for
perpetuating the idea of never-ending quality improvement.
Once the TQM program is well established, a typical meeting agenda might have
following items:
z Progress report on teams.
z Customer satisfaction report.
z Progress on meeting goals.
z New project teams.
z Recognition dinner.
z Benchmarking report.
The quality council activities will become part of the culture of the organization in 3
to 5 years. Then they will become a regular part of the executive meeting. When this
state is achieved, a separate quality council is no longer needed. Quality becomes the
first item on the executive meeting agenda.
TQM has a universal appeal because it is an ongoing, long-term system to achieve
customer satisfaction by continuously improving the quality of a firm’s goods and
services.
10.4 TOTAL QUALITY CONTROL SYSTEM VS TOTAL

QUALITY MANAGEMENT SYSTEM
10.4.1 Total Quality Control
Total quality control is a system for integrating the quality development, maintenance,
and improvement efforts of the various groups in an organization so as to produce
marketing, engineering, production, and service at the most economical levels for full
customer satisfaction.
Total quality control focuses on examining the processes in an operation, to learn
where mistakes are being made, why they are happening and if it is possible, practical
and economically desirable to prevent them from recurring. Inspection has its place in
TQC, but it is inspection of the process, not the product.
10.4.2 Total Quality Management System

Quality Management is the system of establishing defect prevention action and
ensures within a company/organization on a permanent basis the purpose of
conforming products or services. Quality management includes conducting
measurement and appraisal activities of various functions of the company. Quality
Control is material and process oriented whereas Quality Management is people and
system oriented. The purpose of quality management is to make the company run
more smoothly and more profitably by preventing problems and thereby reducing the
energy and cost of the unproductive work. In many ways quality management served
as a catalyst bringing together activities with a common purpose and different
methods.
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Thus Quality Management ensures the quality of operation of all functions. When all 143
Quality System
disciplines contributing to the products or services accomplish high quality standards
in their operation, the quality is automatically built in the products or services.
Strategy of Quality Management

Quality Management basically organizes and assures that all departments are involved
in establishing and following their own operational quality control measures to ensure
quality in their jobs, rather than depending on Inspection Department to report the
deficiencies for taking corrective measures. Successful launching of such a system
requires the following commitments from the management:
z Management has to spell out a quality policy expressing how the company feels
about it and declare it boldly.
z Management has to select/re-orient the functional heads, so that they are
committed to the above idea and will be able to set the house in order, to fulfil the
company objective.
z To introduce a communication system to make all employees aware of the quality
requirements. The system should also ensure that the job performers at grass-root
level are approached to register their problems, in achieving quality.
z Readiness on the part of management to implement corrective measures to
eliminate problems of the job performers to build confidence among all.
z The effort initiated must be a continuous one and should not be left after partial
success or failure.
Check Your Progress
Fill in the blanks:
1. Determinants of quality include the management activities of control,
improvement and …………… .
2. …………… is a group of senior managers appointed to plan, administer,
facilitate and monitor the entire Quality Process.
3. A planning team consisting of only top-level managers is not
…………….
4. …………… includes conducting measurement and appraisal activities of
various functions of the company.
10.5 LET US SUM UP

Quality is important not only as a measure of how competitive a product or business
is, it also determines the efficacy of state governance and other public sector
organisations, the stability of a nation’s economy, and the quality of life its citizens
enjoy. This is why it is necessary to broaden our understanding of quality, so that
other aspects (e.g. social) are also covered.

Discuss the role of quality in the success of an organization.
10.7 KEYWORDS
Quality Control: The quality control has overall responsibility for continuous
improvement.
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145
LESSON Total Quality Control
11
TOTAL QUALITY CONTROL
CONTENTS
11.1 Introduction
11.2 Total Quality Control
11.2.1 TQC in Japan
11.2.2 TQC in US
11.2.3 TQC in Europe
11.3 Elements of TQC
11.3.1 Foundation
11.3.2 Building Bricks
11.3.3 Binding Mortar
11.3.4 Roof
11.4 Just-in-Time
11.4.1 Philosophy
11.4.2 Stocks
11.4.3 Transaction Cost Approach
11.4.4 Environmental Concerns
11.4.5 Price Volatility
11.4.6 Quality Volatility
11.4.7 Demand Stability
11.5 Let us Sum up
11.7 Keywords

z Know total quality control
z Describe elements of TQC
z Define just-in-time.
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146
Quality Techniques
All organizations, large or small, have an established way or system of doing business.
A quality management system is about how an organization manages its business
activities which are associated with quality of service. Quality management system
helps an organization to build systems which enable it to provide quality service
consistently. It may be clarified that characteristics of the service(s) and their
standards (norms) are defined in the respective service standards, and not in the
quality management standards. Therefore, quality management system standards are
not alternate to service standards. In fact, they are complementary to each other. The
use of service standards together with quality management system standards help in
not only maintaining but also continually improving quality of services, which may
result in enhancing customers' satisfaction and competitiveness.
11.2 TOTAL QUALITY CONTROL

Total Quality Control is a system that integrates quality development, maintenance
and improvement of the parts of an organization. It helps a company economically
manufacture its product and deliver its services.
Total Quality Control (TQC) is not a new concept, nor was it invented by the
Japanese. The original book entitled 'Total Quality Control' was written by Armand
Feigenbaum, in 1951, where he noted the universal importance of quality to
customers:
"Quality is the basic customer decision factor for an explosively growing number of
products and services today–whether the buyer is a housewife, an industrial
corporation, a government agency, a department store chain or a military defense
program."
As a result, he proposed that quality be move out of the factory floor, where it mostly
lived then, and into the rest of the company. In his words:
"Quality is in its essence a way of managing the organization."
It was thus an extension of Quality Control (QC) to the totality of the whole company.
The term TQC was not, however, a term that sat well with American management, so
some kind soul converted it into TQM, or Total Quality Management. The American
Management described it as:
'A management philosophy embracing all activities through which the needs and
expectations of the customer and the community and the objectives of the organization
are satisfied in the most efficient and cost effective way by maximizing the potential
of all employees in a continuing drive for improvement.'
11.2.1 TQC in Japan

Japan is world renowned for its incredible record for total quality control, quality
improvement process and lean management. Take a look at Japan’s journey to how it
got to where it is today. It depicts an inspiring story that illustrates that any country or
company can develop the skills and techniques to attain a quality improvement
process.
Process Improvement Japan Process Improvement Japan had the opportunity to sit
down with experts from The Toyota Group to discuss views on the value and origins
of QC circles and employee engagement (known as total participation at Toyota) –
The fundamentals of the Quality Improvement Process. Our contacts choose to remain
anonymous at this time.
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Historical Background to Japan’s Quality Improvement Process 147
Total Quality Control
When Japan started its rapid industrialization phase post World War II, there was a
lack of effective management skills. Japan learned from overseas how to control
management. They imported Statistical Quality Control (SQC) from the United States.
Statistical Quality Control began in the 1930’s with the industrial use of control
charts. In order to meet wartime conditions, the production systems of the times
needed to be revolutionized. By implementing SQC, the United States (and Britain)
was able to produce supplies at lower cost and in large quantity. This was the origins
of Statistical Quality Management and Japan’s quality improvement process journey.
Dr. Deming is recognized for introducing quality control to Japan.
The SQC system was implemented in Japan and proved effective. However, after
awhile, it was evident that this was not enough. It was realized that Statistical quality
control had to be shared and practiced company wide in order for companies to meet
their full production potential – from the top to the factory workers with total
participation.
11.2.2 TQC in US
At first, US manufacturers held onto to their assumption that Japanese success was
price-related and thus responded to Japanese competition with strategies aimed at
reducing domestic production costs and restricting imports. This, of course, did
nothing to improve American competitiveness in quality.
As years passed, price competition declined while quality competition continued to
increase. By the end of the 1970s, the American quality crisis reached major
proportions, attracting attention from national legislators, administrators and the
media. A 1980 NBC-TV News special report, “If Japan Can… Why Can’t We?”
highlighted how Japan had captured the world auto and electronics markets. Finally,
US organizations began to listen.
The chief executive officers of major US corporations stepped forward to provide
personal leadership in the quality movement. The U.S. response, emphasizing not only
statistics but approaches that embraced the entire organization, became known as
Total Quality Management (TQM).
Several other quality initiatives followed. The ISO 9000 series of quality-management
standards, for example, were published in 1987. The Baldrige National Quality
Program and Malcolm Baldrige National Quality Award were established by the U.S.
Congress the same year. American companies were at first slow to adopt the standards
but eventually came on board.
11.2.3 TQC in Europe

Total quality management (TQM) is the idea that controlling quality is not something
that is left exclusively to the “quality controller”, a person who stands at the end of a
production line checking final output. It is (or it should be) something that permeates
an organisation from the moment its raw materials arrive to the moment its finished
products leave.
TQM is a process-oriented system built on the belief that quality is a matter of
conforming to a customer's requirements. These requirements can be measured, and
deviations from them can then be prevented by means of process improvements or
redesigns.
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148 The European Foundation for Quality Management (EFQM) said that TQM strategies
Quality Techniques are characterised by the following:
z The excellence of all managerial, operational and administrative processes.
z A culture of continuous improvement in all aspects of the business.
z An understanding that quality improvement results in cost advantages and better
profit potential.
z The creation of more intensive relationships with customers and suppliers.
z The involvement of all personnel.
z Market-oriented organisational practices.
Total quality management was developed by a number of Japanese firms in the 1950s
and 1960s. But it was built largely on the teachings of W. Edwards Deming and
Joseph Juran, two Americans who had quietly developed the principles in the
aftermath of the Second World War. With the help of books and articles such as David
Garvin's 1983 description in Harvard Business Review of the way in which TQM and
other techniques were putting Japanese companies streets ahead of their foreign
competitors, the idea was later reclaimed by the United States and widely adopted by
American business.
Europe, which has at times looked left out of this game of American-Japanese
ping-pong, has also made occasional claims to be the fount of total quality. Raymond
Levy, chairman of Renault, a French car company, said in the early 1990s:
Quality is representative of a culture which we Europeans have no reason to let others
monopolise. The Europe of Descartes; the Europe of the Age of Reason and the
Enlightenment; the Europe of the industrial and technological revolution of the last
two centuries holds within itself all the elements of method and exactitude conveyed
by the term “total quality”.
Fill in the blanks:
1. TQC stands for ……………… .
2. SQC stands for ……………… .
3. EFQM stands for ……………… .
11.3 ELEMENTS OF TQC

Quality is an essential parameter which helps organizations outshine their competitors
and survive the fierce competition.
The success of total quality management depends on following eight elements which
are further classified into following four groups.
z Foundation
z Building Bricks
z Binding Mortar
z Roof
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11.3.1 Foundation 149
Foundation further includes Ethics, Integrity and Trust.
The entire process of Total Quality Management is built on a strong foundation of
Ethics, Integrity and Trust. Total Quality Management involves every single employee
irrespective of his designation and level in the hierarchy.
z Ethics: Ethics is an individual’s understanding of what is good and bad at the
workplace. A thin line of difference does exist between good and bad, which is for
you to decide. Ethics teach an individual to follow code of conduct of organization
and adhere to rules and regulations.
z Integrity: Integrity refers to honesty, values and an individual’s sincerity at
workplace. You need to respect your organization’s policies. Avoid spreading
unnecessary rumours about your fellow workers. Total Quality Management does
not work in an environment where employees criticize and backstab each other.
z Trust: Trust is one of the most important factors necessary for implementation of
total quality management. Employees need to trust each other to ensure
participation of each and every individual. Trust improves relationship among
employees and eventually helps in better decision making which further helps in
implementing total quality management successfully.
11.3.2 Building Bricks

Bricks are placed on a strong foundation to reach the roof of recognition. The
foundation needs to be strong enough to hold the bricks and support the roof.
z Training: Employees need to be trained on Total Quality Management. Managers
need to make their fellow workers aware of the benefits of total quality
management and how would it make a difference in their product quality and
eventually yield profits for their organization. Employees need to be trained on
interpersonal skills, the ability to work as a team member, technical know-how,
decision making skills, problem solving skills and so on. Training enables
employees to implement TQM effectively within their departments and also make
them indispensable resources.
z Teamwork: Team work is a crucial element of total quality management. Rather
than working individually, employees need to work in teams. When individuals
work in unison, they are in a position to brainstorm ideas and come up with
various solutions which would improve existing processes and systems. Team
members ought to help each other to find a solution and put into place.
z Leadership: Leadership provides a direction to the entire process of Total Quality
Management. Total Quality Management needs to have a supervisor who acts as a
strong source of inspiration for other members and can assist them in decision
making. A leader himself needs to believe in the entire process of TQM for others
to believe in the same. Proper downloads, briefs about TQM must be given from
to time to employees to help them in its successful implementation.
11.3.3 Binding Mortar

Binding Mortar binds all the elements together.
Communication: Communication binds employees and extracts the best out of them.
Information needs to be passed on from the sender to the recipient in its desired form.
Small misunderstandings in the beginning lead to major problems later on. Employees
need to interact with each other to come up with problems existing in the system and
find their solutions as well.
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150 Three types of Communication takes place between employees:
Quality Techniques z Downward Communication: Flow of information takes place from the
management to the employees
z Upward Communication: Flow of information takes place from the employees to
the top level management
z Sideways Communication: Communication also takes place between various
departments.
11.3.4 Roof
Recognition: Recognition is the final element of Total Quality Management.
Recognition is the most important factor which acts as a catalyst and drives employees
to work hard as a team and deliver their lever best. Every individual is hungry for
appreciation and recognition. Employees who come up with improvement ideas and
perform exceptionally well must be appreciated in front of all. They should be suitably
rewarded to expect a brilliant performance from them even the next time.
11.4 JUST-IN-TIME
Just-in-time (JIT) is an inventory strategy implemented to improve the return on
investment of a business by reducing in-process inventory and its associated carrying
costs. In order to achieve JIT the process must have signals of what is going on
elsewhere within the process. This means that the process is often driven by a series of
signals, which can be Kanban that tell production processes when to make the next
part. Kanban are usually 'tickets' but can be simple visual signals, such as the presence
or absence of a part on a shelf. When implemented correctly, JIT can lead to dramatic
improvements in a manufacturing organization's return on investment, quality, and
efficiency. Some have suggested that "Just on Time" would be a more appropriate
name since it emphasizes that production should create items that arrive when needed
and neither earlier nor later.
Quick communication of the consumption of old stock which triggers new stock to be
ordered is key to JIT and inventory reduction. This saves warehouse space and costs.
However since stock levels are determined by historical demand any sudden demand
rises above the historical average demand, the firm will deplete inventory faster than
usual and cause customer service issues. Some have suggested that recycling Kanban
faster can also help flex the system by as much as 10-30%. In recent years
manufacturers have touted a trailing 13 week average as a better predictor for JIT
planning than most forecasters could provide.
11.4.1 Philosophy
The philosophy of JIT is simple – inventory is defined to be waste. JIT inventory
systems expose the hidden causes of inventory keeping and are therefore not a simple
solution a company can adopt; there is a whole new way of working the company
must follow in order to manage its consequences. The ideas in this way of working
come from many different disciplines including statistics, industrial engineering,
production management and behavioral science. In the JIT inventory philosophy there
are views with respect to how inventory is looked upon, what it says about the
management within the company, and the main principle behind JIT.
Inventory is seen as incurring costs, or waste, instead of adding value, contrary to
traditional accounting. This does not mean to say JIT is implemented without an
awareness that removing inventory exposes pre-existing manufacturing issues. Under
this way of working, businesses are encouraged to eliminate inventory that does not
compensate for manufacturing issues, and then to constantly improve processes so that
QM
less inventory can be kept. Secondly, allowing any stock habituates the management 151
to stock keeping and it can then be a bit like a narcotic. Management is then tempted
to keep stock there to hide problems within the production system. These problems
include backups at work centres, machine reliability, process variability, lack of
flexibility of employees and equipment, and inadequate capacity among other things.
In short, the just-in-time inventory system is all about having “the right material, at the
right time, at the right place, and in the exact amount”, without the safety net of
inventory. The JIT system has implications of which are broad for the implementors.
11.4.2 Stocks
JIT emphasises inventory as one of the seven wastes (overproduction, waiting time,
transportation, inventory, processing, motion and product defect), and as such its
practice involves the philosophical aim of reducing input buffer inventory to zero.
Zero buffer inventory means that production is not protected from exogenous
(external) shocks. As a result, exogenous shocks reducing the supply of input can
easily slow or stop production with significant negative consequences. For example,
Toyota suffered a major supplier failure as a result of the 1997 Aisin fire which
rendered one of its suppliers incapable of fulfilling Toyota's orders. In the U.S., the
1992 railway strikes resulted in General Motors having to idle a 75,000-worker plant
because they had no supplies coming in.
11.4.3 Transaction Cost Approach

JIT reduces inventory in a firm. However, unless it is used throughout the supply
chain, it can be hypothesized that firms are simply outsourcing their input inventory to
suppliers (Naj 1993). This effect was investigated by Newman (1993), who found, on
average, suppliers in Japan charged JIT customers a 5% price premium.
11.4.4 Environmental Concerns

During the birth of JIT, multiple daily deliveries were often made by bicycle; with
increases in scale has come the adoption of vans and lorries (trucks) for these
deliveries. Cusumano (1994) has highlighted the potential and actual problems this
causes with regard to gridlock and the burning of fossil fuels. This violates three JIT
wastes:
1. Time; wasted in traffic jams
2. Inventory; specifically pipeline (in transport) inventory and
3. Scrap; with respect to petrol or diesel burned while not physically moving.
11.4.5 Price Volatility

JIT implicitly assumes a level of input price stability such that it is desirable to
inventory inputs at today's prices. Where input prices are expected to rise storing
inputs may be desirable.
11.4.6 Quality Volatility

JIT implicitly assumes the quality of available inputs remains constant over time. If
not, firms may benefit from hoarding high quality inputs.
11.4.7 Demand Stability

Karmarker (1989) highlights the importance of relatively stable demand which can
help ensure efficient capital utilisation rates. Karmarker argues without a significant
stable component of demand, JIT becomes untenable in high capital cost production.
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152 Check Your Progress 2
Quality Techniques Fill in the blanks:
1. …………… is representative of a culture which we Europeans have no
reason to let others monopolise.
2. Ethics is an individual’s understanding of what is good and ……………
at the workplace.
3. …………… is an inventory strategy implemented to improve the return
on investment of a business by reducing in-process inventory and its
associated carrying costs.
11.5 LET US SUM UP

Quality management systems standards take into consideration eight quality
management principles, namely, customer focus, leadership, involvement of people,
process approach, system approach to management, continual improvement, factual
approach to decision making, and mutually beneficial supplier relationships, which are
relevant and applicable to all organizations providing service.

Discuss “Japan is world renowned for its incredible record for total quality control,
quality improvement process and lean management”.
11.7 KEYWORDS
Ethics: Ethics is an individual’s understanding of what is good and bad at the
workplace.
Just-in-Time: Just-in-time (JIT) is an inventory strategy implemented to improve the
return on investment of a business by reducing in-process inventory and its associated
carrying costs.
Total Quality Control: A system that integrates quality development, maintenance
and improvement of the parts of an organization. It helps a company economically
manufacture its product and deliver its services.

1. What do you mean by total quality control?
2. Describe various elements of TQC.
3. Briefly explain just-in-time.
Check Your Progress: Model Answers

CYP 1
1. Total Quality Control
2. Statistical Quality Control
3. European Foundation for Quality Management.
Contd…
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154
Quality Techniques
LESSON
12
QUALITY CIRCLES
CONTENTS
12.1 Introduction
12.2 Quality Circles: Rationale and Brief History
12.2.1 Quality Circles: Essential Characteristics
12.3 Quality Circles
12.3.1 Key Elements of Quality Circles
12.3.2 Benefits of Quality Circles
12.3.3 Impediments to the Effective Working of Quality Circles
12.3.4 Quality Circles and the Trade Unions
12.3.5 Quality Circles in India
12.3.6 Areas of Success due to Quality Circle Activities in BHEL
12.4 Structural Organisation for QC Circles
12.5 Roles and Functions of QC Circle Organisation
12.5.1 Top Management
12.5.2 Steering Committee
12.5.3 Facilitator
12.5.4 Leader
12.5.5 Members
12.5.6 Coordinator
12.5.7 Middle Management
12.6 Quality Control Circle Process
12.7 QC Circle Techniques
12.7.1 Brainstorming
12.7.2 Pareto Analysis
12.7.3 Cause and Effect (Ishikawa) Diagram
12.7.4 Check Sheet
12.7.5 Histogram
12.7.6 Stratification
12.7.7 Control Charts
12.8 QC Circle – Implementation
Contd…
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12.9 Quality Teams 155
Quality Circles
12.9.1 A Quality Team
12.9.2 Achieving a Cooperative Team Structure
12.9.3 Essence of Team (Shared dreams/Shared directions)
12.10 Let us Sum up
12.12 Keywords

z Explain quality circle
z Describe structural organization for QC circles
z Discuss roles and functions of QC circle organisation
z Explain process of QC circles
z Describe QC circle techniques and implementation
12.1 INTRODUCTION
Total Quality Management (TQM) has 'employee involvement' as one of its basic
tenets. Such involvement does not mean only co-operation in carrying out tasks
assigned by supervisors and managers but something more than that. All employees
have basic intelligence and creativity. They acquire considerable amount of insights
about their tasks and other related matters while carrying out any work, day in and out.
The potentialities hidden within employees are normally not made use of. Quality
Circles, alternatively known as Quality Control (QC) Circles, are the means of getting
the potentialities utilized to solve problems that do arise in immediate work situations
of the employees. Japanese industry was the first to discover and make use of this
concept for very effectively bringing about the industrial recovery during the nineteen
fifties. Such formations became so successful and widespread that quality circles are
now said to be one of the sources of Japan's competitive advantages. Quality circles
are also said to be the seeds of Total Quality Control (TQC) movement that became
known as Total Quality Management (TQM) in the West.
12.2 QUALITY CIRCLES: RATIONALE AND BRIEF

HISTORY
The beginning of the Quality Control Circle (QC Circle) idea can be traced to the
Japanese drive for training and accomplishment in quality control, and their
conviction that effective quality control can only be achieved when the interest is
aroused among the employees. With such a background, the logic of extending
training to the workers was obvious. The Journal "Quality Control for the Foremann",
published by the Japanese Union of Scientists and Engineers (JUSE), has played a key
role in initiating the idea of QC Circles, to tap the immense potential for contribution
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156 by workers and first-line supervisors through training, motivation, and application of
Quality Techniques the techniques. The QC Circle idea was born around 1962. While the objective of QC
Circle may vary from company to company, the following are identified as basic
generalizations:
z To encourage first-line supervisory personnel to educate themselves, and to
develop leadership and supervisory capabilities.
z By including all workers, to raise the morale of the work force, to carry quality
control to the ultimate degree, and encourage and develop employees'
self-awareness of what quality is, what problems may arise, and what to do about
them.
z To serve as a means of unifying company-wide quality control activities and as a
nucleus within the shop, and work toward clarification of executive and
managerial policy, stabilization of work-place supervision and guaranteeing of
standards.
By June 1962, there were three Circles registered with the Japanese Union of
Scientists and Engineering (JUSE). As of August 1969, there were 24,000 QC circles
registered with a membership of 2,80,000 and the 'number was increasing by 700 to
1000 each month. By mid 1972, the Japanese estimated that the total QC Circles had
reached 5,00,000 with a membership of about 5 million. The QCC movement grew
very fast since then till the nineteen eighties. It is estimated that during 1961-82,
15 million projects had been completed.
The QC Circle concept has spread to USA. It has been mentioned that the spread of
QC Circle programmes throughout the American industries is unparalleled by any
other organisational improvement programme. The Wall Street Journal reported
(Sept. 1981) that about a thousand organisation had some form of Quality Circle
programme. As early as 1974 Lockheed Missile and Space Company initiated a large-
scale programme and during the years 1974-1977 the QC Circles had saved the
company approximately 3 million dollars. The ratio of savings to the cost of operating
the Circles was six to one, with great improvement in quality. Within the federal
sector, Navy was the first to implement a QC Circle programme in 1979 in its Norfolk
Naval Shipyard. By 1980 the shipyard claimed to have achieved a four-to-one
cost-benefit ratio. The Navy has since expanded its QC Circle programme to a number
of its bases and shipyards. In addition, a variety of other federal agencies (including
the Air Force, the Veteran's Administration, and the Public Health Service) have all
begun to experiment with their own QC Circle programmes. Interest in the QC Circle
process among federal agencies appears to be rapidly growing.
In India, Bharat Heavy Electrical Ltd. (BHEL) has made an impressive start in
introducing QC Circles (they call it Quality Circles). It began around 1980 in its
Hyderabad Unit. It is reported that the Hyderabad Unit has introduced 51 circles with
455 members. 83 circles are working BHEL units with about 700 employees
participating. The names of the organizations which have introduced or shown interest
are:
z Kirloskars
z Shriram Group
z Allwyns
z ECIL
z BEL and Heavy Engineering Corporation
z Durgapur Steel (of SAIL).
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12.2.1 Quality Circles: Essential Characteristics 157
Quality Circles
Several definitions of QC Circles have emerged over the years. QC Circle is a small
group of departmental work leaders and line operators who have volunteered to spend
time outside their regular hours to help solve departmental quality problems (Juran).
QC Circles is a small work group which meets regularly to perform quality control
activities voluntarily within the same workshop (Miyauchi). It is a small group of
people doing similar work who meet voluntarily on a regular basis under the
leadership of their supervisors to identify, discuss and analyze their work problems
and implement the solutions themselves if possible (attributed to Ishikawa).
While one can think of some special small p u p activities existing in an organization,
QC Circle group has some unique features which are not present in most of the
existing small groups or schemes. To understand the uniqueness of QC Circles, it is
necessary to analyze the definition.
z It is a small group of people who do similar works: This brings out that the group
is small; the members belong to the same area of work who do similar activities,
know their environment, know each other well, and therefore can participate and
contribute individually to the solution of problems on hand or for any other
improvements. The most important aspect to note is that every member can be an
active participant because of the structuring of the group.
z It meets voluntarily on a regular basis: Since the group is concerned with
problems of their own work, they meet regularly (once in a week for an hour or so
on company time or otherwise) and thrash but solutions. When circles have been
introduced properly this effect can be observed anywhere.
z QC Circles identify problems, analyse the cause and recommend solutions:
Because of the structuring of the group, it is in a position to identify problems
with suitable training, and can compile information and analyse the problem for
possible solution and motivation. The challenge in the job thus introduced both for
individual advancement and for working out possible solution. Upward
communication in the structure is a new innovation of the circles.
z Where possible, employees implement the solutions themselves: QC Circles are
not merely concerned in identifying problems, involved in analyzing and
providing solutions, but also implement them wherever possible, with of course, a
planned training efforts by the organization. The implementation by the group or
otherwise adds to the morale of the group and motivates them for improved
performance.
Though, initially, the QC Circles considered problems relating to quality, their success
has led to the broadening of the concept. One area of extension has been to deal with
non-quality problems e.g. productivity, safety, cost reduction etc. The most fruitful
area of broadening the concept that has emerged is strengthening the relationship
between the management and employees. Establishment of QC Circles is not only cost
effective but also improves morale, communications and attitudes in ways that
promote long-term benefits to the organization. In fact, in the Indian context this
aspect should be borne in mind.
The term Quality Control Circles in itself is interesting. It signifies the importance of
"Qua1ity"of products and services, the involvement of all concerned and its relevance
to the success and stability of organizations. It recognizes that it is only through
quality and customer satisfaction that profits can be achieved, and thus must be
reflected in all the activities within the organization. It recognizes excellence in
everything. Quality Control principles and approaches, particularly SQC techniques,
have been imbibed in the general management of the companies in Japan and strongly
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158 reflected by their use in the QC Circles. However, it is not confined to Quality Control
Quality Techniques Department or people alone, but used extensively for all kinds of problem solving;
they are, thus, managerial in nature.
12.3 QUALITY CIRCLES

Quality Circle is a participative philosophy woven around Quality Control and
Problem solving at the grass root level. Employer normally takes the initiative for the
same by setting aside a room for the sole use of the circle, equipped with notice-
boards, flip charts, audio-visual equipment, and so on.
Quality circles consist of around 4-12 people from the same work area, who hold 1-2
hour meetings voluntarily on a regular basis to solve their work-related problems.
Meetings are held in paid time and the circle leader is often the supervisor of the work
group involved.
Teamwork among the human resources is a critical factor in performance
effectiveness of any Organization. Quality circles were the first step to develop teams
as permanent parts of organizations. Dr. Shigeo credited quality circle activities for
the quality improvement in Japan.
The quality circles started with the objectives of improving quality of services, good
working conditions and job satisfaction to all employees, reducing stress, strain and
cost reduction. It recognizes the Fact that the workers know their job best. They can
better contribute in finding solutions to the routine work-related problems.
The main aim was to reduce human errors, enhance quality, inspire an effective
teamwork, increase employee motivation, leadership quality, communication building
and finally top develop greater safety awareness.
12.3.1 Key Elements of Quality Circles

The key elements of Quality Circles are:
z A people-Building Philosophy: In quality circles people know each other and
there is a feeling of “togetherness”. It inculcates group or teamwork.
z Voluntary in Nature: As the membership is voluntary it is left to the members to
take advantage of it or not. It is the worker’s own initiative which makes him join
the group. It is a way of life, and a continuous process.
z Participative nature: Everyone in the group Participates.
z Encourages creativity: Quality circle infuses among its members’ confidence, a
Problem preventing and problem solving attitude. Hence people are able to
present their ideas freely.
z Training is a must: Members need to be trained for using problem solving
techniques like Pareto diagram, cause and effect analysis, check sheets, etc.
z Management Support: Quality circles require support from top management in
the form of advice and commitment.
z Problems related to work: Problems have to be related to member’s own
department or work area.
Quality Circle has a progressive and systematic approach towards soling a problem
based on Identify, Select, Analyze and Solve using the following techniques:
z Brain storming
z Data collection
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z Pareto analysis 159
Quality Circles
z Cause and effect or Ishikawa Diagram.
12.3.2 Benefits of Quality Circles

Benefits of quality circles are as follows:
z Changes in attitude at all levels.
z Spreads of problem-solving ethic throughout the whole Organization.
z Develops supervisory performance especially in the areas of man-management
and communication.
z Optimum utilization of Human Resources.
z Reduction of Absenteeism and Grievances.
z Development of Quality Consciousness.
z Encourages leadership quality and personal development.
z Promote issues like Cost-reduction, Safety of workers and other day-to-day
work-related Problems.
12.3.3 Impediments to the Effective Working of Quality Circles

The following are the implements of the effective working of quality circles:
z Lack of Management support.
z Lack of enthusiasm from employees and their rigid attitudes.
z Caliber of members and leaders of Quality circle.
z Apathetic attitude of Trade unions.
z Structural defects and operational impediments.
z Lack of training to members as well as top management.
z Lack of planning and co-ordination when starting new projects.
z Running out of ideas to work on.
12.3.4 Quality Circles and the Trade Unions

Quality circles do not threaten unions as their membership is voluntary and they
discuss only work related problems within a specific area. They can in a way bring
unity among workers due to better understanding and thus pave way for better
relationship with the union as well as between union and management.
12.3.5 Quality Circles in India

Professional bodies like the Quality Circle Forum of India and Indian Association for
quality and Reliability had been formed to create an awareness of quality circle
movement in India as early as in 1970s. The first National Convention on Quality
Circle was held in India in 1987.
Bharat Heavy Electricals Ltd., at Ramachandrapuram, Hyderabad Unit introduced the
first quality circle in India in January 1981. There are over 500 organizations that have
set up quality circles all over the country.
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160
12.3.6 Areas of Success due to Quality Circle Activities in BHEL
Quality Techniques Areas of success due to quality circle activities in BHEL are as follows:
z Increased productivity and Production
z Improved quality
z Reduction in the percentage of absenteeism
z Increased motivation and support from employees
z Reduction in organizational hierarchies and red tapism.
Fill in the blanks:
1. JUSE stands for ………………
2. ……………… is a small work group which meets regularly to perform
quality control activities voluntarily within the same workshop.
3. Quality Circle is a participative philosophy woven around ………………
and Problem solving at the grass root level.
12.4 STRUCTURAL ORGANISATION FOR QC CIRCLES

As may be noted from the nature of QC Circles, it is participative, and experience
suggests that it takes time for any participative culture to take deep roots. Managers
and supervisors are generally impatient and look for quick results. Establishing
effective QC Circles require considerable time and therefore a suitable organizational
structure should be developed. Experience over the years suggests the use of steering
committee, facilitators, circle leaders and circle members in successfully introducing
and operating the QC Circles.
12.5 ROLES AND FUNCTIONS OF QC CIRCLE

ORGANISATION
This section will discuss about the roles and functions of QC circle organization.
12.5.1 Top Management

Top management, being at the highest executive level, should extend all the necessary
support to the activities of the QC circles. Through their personal presence at the
presentations and other major activities of QC circles, it can make its support seen and
felt by all concerned.
12.5.2 Steering Committee

This is an apex body at the highest level of the unit/division, which oversee the
functioning of QC circles in the unit/division and served as an advisory body. The
committee is headed by the chief executive of the Unit/Division and its meetings are
convened at least once in two/three months by the Manager of the co-ordinating
Department. Other members of the committee will include the heads of departments.
Special invitees to the meetings are facilitators, and representatives of Industrial
Engineering and Public Relations Departments. Scope and Activities of the Steering
Committee are:
z To take an overview of the operation of Quality Circles,
z To establish the programme objectives and resources,
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z To provide policy guidance and direction, 161
Quality Circles
z To promote Quality Circles in the organization,
z To obtain feedback from facilitators and review circles' activities,
z To meet regularly once in two months with the facilitators.
z To attend "Management Presentations" by Circles.
12.5.3 Facilitator
Facilitator is usually a Manager or Senior Manager of the shop/department/section.
Facilitator Roles
He is responsible for building and directing the activities of the Quality Control
Circles in his area and enthuse other executives also to get involved in supporting
Quality Circles activities.
Facilitator Functions
The various functions of facilitators are:
z To attend Quality Circle meetings, at least for brief periods,
z To assist the leader in the training of the members of the circles and reinforcing
the leaders skills,
z To guide the circles to focus attention on their work related problems and catalyse
circles activities,
z To coordinate and obtain the support and assistance from other functional areas
whenever required by the circles,
z To act as an intermediary in resolving circle problems,
z To work closely with the Steering Committee, as an invitee,
z To organize mid-term and top management presentations,
z To resolve operational problems/hurdles faced by the Quality Control circles,
z To catalyse other executives to facilitate the successful working of Quality
Control Circles.
12.5.4 Leader
A leader is chosen by the members of a Quality Control Circle among themselves and
could be the natural hierarchical foreman, supervisor or charge hand or any other
member. Members could also decide themselves to have rotation of leaders after each
project is completed, in order to provide leadership opportunities to every member, in
turn.
Leader Roles
A leader shall function as a first among equals and shall be responsible for the
effective performance of his circle.
Functions of Leader
The various functions of leaders are:
z To train the members with the assistance of the facilitator/co-ordinator,
z To maintain a high degree of cohesiveness in his team,
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162 z To involve every member in the circle meetings/activities,
Quality Techniques z To bring about a consensus approach in problem solving,
z To chalk out action plans and assign roles to members,
z To maintain progress records/minutes of circle meetings,
z To interact with other functional areas in problem solving,
z To review progress vis-a-vis goals/objectives set for themselves,
z To arrange for mid-term and top management presentations, and
z To catalyse non-members to join existing circles or start new ones.
12.5.5 Members
Members of a Quality Control Circle area small group of five to eight persons from
the same work area or doing similar type of work, who voluntarily from a Quality
Control Circle. Once a circle is formed they remain as permanent members of the
Circle, unless they leave the work area for good.
Roles of Members
The role of members is to contribute actively to the effective functioning of their QC
Circle, aiming at better performance of their work area in every way on an-on going
basis.
Functions of Members
The various functions of members are:
z To meet regularly (say, an hour in a week) and actively participate in circles
meetings.
z To assist the leader in data gathering, record-keeping and interacting with other
areas, etc.
z To catalyse generation of cohesive team working in the work-area.
z To strive for the highest standards of performance of the circle.
z To involve in the improvement of the total performance of the organization.
z To take part in the mid-term/top Management presentation.
12.5.6 Coordinator
Roles of Coordinator
To coordinate the activities of Quality Control Circles on behalf of the management
and carry out such functions as would make the operation of Quality Control Circler
smooth, effective and self-sustained.
Functions of Coordinator
The various functions of co-ordinator are:
z To register Quality Circles in the unit/division
z To liaise with the facilitators for ensuring regularly of circle meeting, a mid-term
presentation etc. and to analyze activity level charts.
z To convene Steering Committee meetings and circulate record notes thereof.
z To organize systematic documentation of quality circles case studies and publish
their compilation annually.
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z To organize top management presentations in co-ordination with the facilitators. 163
Quality Circles
z To give assistance to circles, whenever asked for.
z To conduct opinion surveys, to assess intangible gains from time to time.
z To publish newsletter on quality control circle activities in local language.
z To prepare training material for leaders/facilitators in conjunction with training
department.
z To organize training programmes for facilitators and leaders in collaboration with
the training department.
z To publish periodicals, pamphlets, etc. for the promotion of quality control circles.
z To provide display boards of quality control circles in the shops/areas where
quality control circles are functioning.
z To expose all employee at the grass-roots and different levels of executives to the
concept of quality control through audio-visual and lectures.
z To disseminate knowledge by circulating information and news on quality control
circles from journals/books.
z To develop schemes for the recognition of quality control circles for the
contributions made by them.
12.5.7 Middle Management

In the above structure, the middle management group has not found adequate place.
It is necessary to keep them in the picture and inform them about the activities of the
circles. It would thus help in implementing ideas of the circle without any resistance.
This group could be exposed to seminar and question and answer session on QC
circles to ensure their understanding and support.
12.6 QUALITY CONTROL CIRCLE PROCESS

Figure 12.1 illustrate the process of QC circles.
Figure 12.1: QC Circles Process

The problems may sometimes be suggested by management but most of the times they
are identified by the circle members themselves. For this purpose, they are trained. In
addition, they get the help and support from facilitator as well as from the Steering
Committee members, if required. After the solution is obtained, the results are
presented to the management who will convey their decisions regarding its
acceptance.
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164
Quality Management and 12.7 QC CIRCLE TECHNIQUES
Quality Techniques
The Quality Control Circles commonly use certain basic techniques in their
functioning. They are:
z Brainstorming
z Pareto Analysis
z Cause and Effect Diagram
z Check sheets
z Histogram
z Stratification
z Control Charts
These simple techniques are very powerful ones and they help the circles in
investigating the causes for their work related problems and find solutions. These
techniques do not require any ingenuity except sound common sense with some basic
knowledge of arithmetic.
12.7.1 Brainstorming
Of all the techniques of creative thinking, brainstorming is one of the most general
applications with the most widespread use. The technique was developed by Alex F
Osborn in the 1930s. It can be defined as: a means of getting a large number of ideas
from a group of people in a very short time.
Brainstorming is usually a group activity, although the principles can be practiced by
an individual on his own. A group of people not only provides a wider range of
experience, but also ensure cross-fertilization of ideas. In this, an idea from one
member sparks off further ideas in another and then to another and then to a real fly of
ideas. Most sessions do not take longer than a couple of hours.
One hundred ideas in twenty minutes is an average rate flow of ideas and this may be
exceeded in a really freewheeling sessions.
Brainstorming has four main stages:
z Stating the problem
z Restating the problem
z Brainstorming one or more of the restatements
z Evaluating the ideas produced
Stating the problem

The leader of the brainstorming session states the problem and explains it to those
taking part.
Restating the Problem

In this stage the problem is restated in a number of ways. Each restatement is prefaced
by the words, " How to.. . . . "when at least sizeable number of restatements has been
proposed, one or two are selected for brainstorming and written down for all to see.
Brainstorming the restatement of the Prob1em

This is the main part of the session in which' a free flow of ideas is stimulated with
quantity and not quality as the keynote. To stimulate a free wheeling atmosphere, a
short warming session is held.
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Evaluating the ideas produced 165
Quality Circles
All the ideas generated are then evaluated based on their feasibility, economics and
ease in implementation.
12.7.2 Pareto Analysis

Pareto, an Italian economist, discovered a universal relationship between value and
quantity and used this technique for assessing uneven distribution of wealth. His
technique has now come to be used for a wide array of problems needing decision-
making. It helps in the identification of the vital few from the trivia many at a glance
when projected using a column graph named after Pareto.
12.7.3 Cause and Effect (Ishikawa) Diagram

Cause and effect Diagram is an investigation tool. This is also called "Ishikawa" since
the technique was devised and popularized by Dr. Ishikawa, an important functionary
in the Japanese Union of Scientists and Engineers, Japan. As a mark of honour, it is
named after him.
In an Ishikawa diagram, a systematic arrangement of all possible causes which gives
rise to the effect, are made. Before taking up a problem for a detailed study, it is
necessary to list all the possible causes so that no important cause is missed. The
causes are first divided into major sources. Generally, they would come under what
are termed as ‘four MS’ viz man, machine, method and material. Then each source is
ultimately divided into sub-sources.
The effect is represented by a horizontal line with an arrow pointing towards the right.
The main sources are represented by vertical or slanting arrows meeting the horizontal
line. Sub-sources/causes are again horizontal arrows meeting the vertical or slating
lines. Thus a cause and effect diagram is constructed. An example is given in figure
12.2.
Figure 12.2: The Cause and Effect Diagram

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166 After an Ishikawa Diagram has been prepared, it is necessary to look into each of the
Quality Techniques causes in detail so that a short list of causes may be prepared for detailed study. Pareto
analysis will help in this respect.
12.7.4 Check Sheet

The check sheet is made to gather data easily and to make the same automatically
translated into easy to use form.
12.7.5 Histogram
It is a graphical representation of variations in measurement of any attribute of an
entity. For example, heights of individuals in a classroom of fifteen students could be
depicted as follows:
Figure 12.3: Histogram

Histograms thus bring out a data distribution showing a central tendency and whether
the data are within the standard specification if they do not satisfy our requirements.
Separate histograms should be preferred through stratification of data on workers,
machines and materials.
12.7.6 Stratification
Dividing a group of measurements or observations into several groups on the basis of
certain characteristics is called stratification. Stratification can be done according to:
z Source (Machine/Process)
z Raw Material quality (Supplier)
z Period
z Operators
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z Customer complaints 167
Quality Circles
z Processing conditions.
12.7.7 Control Charts

However much we try to strengthen manufacturing conditions and specifications in
the finished products, there will be deviations. These deviations can be divided into
two groups:
z The 'unavoidable' or allowable deviations' i.e. those which fall within a certain
range, barring accidents.
z The 'avoidable deviations' which are beyond that range.
The control chart, by setting the upper and lower limits of deviations, allows us to find
out whether production is stabilized or not and to control the productive process.
There are several kinds of control charts: the ‘X-R' type which shows data by
variables, the 'p' type which indicates data by attributes on a 'go' or 'no-go' (accept or
no-accept) and the 'c' type when data are on the number of defects per unit area.
Figure 12.4 is a typical representation of a Control Chart.
Figure 12.4: Control Chart

Fill in the blanks:
1. A ……………. shall function as a first among equals and shall be
responsible for the effective performance of his circle.
2. ……………. technique was developed by Alex F Osborn in the 1930s.
3. Pareto, an ……………. economist, discovered a universal relationship
between value and quantity and used this technique for assessing uneven
distribution of wealth.
12.8 QC CIRCLE – IMPLEMENTATION

QC Circles involve a basic change in outlook in most organizations. The management
practices usually expect/require workers, (or, lower level subordinates) to follow
orders only. In this sense there exists little room for employees to participate in
problem solving processes. Success of QC Circles requires a solid backing of
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168 executives on a continuous basis, rather than merely accepting or permitting to
Quality Techniques introduce the circles. It becomes necessary to spend a great deal of time and have
patience to achieve the involvement of workers. As the former Chairman and
Managing Director, BHEL of K.L. Puri, put it "the glow of pride and enthusiasm of
Quality Circle members when they present their findings are something to be seen,
only for belief". It essentially implies that the style of management should become
participative. QC Circles offer a strategy for changing the management culture slowly
by involving employees in a constructive way.
The broad steps in initiating QC Circles may be taken as under:
z The top management must initiate or conceive the idea of introducing circles
which paves the way for forming of the Steering Committee. The understanding
of QC Circles may be provided by outside specialists for the Steering Committee
members.
z Facilitators are chosen and trained, coordinate the work associated with QC
Circles.
z The facilitators and departmental managers meet, discuss and evolve an approach
for introducing the circles.
z When the Steering Committee and the facilitator(s) are ready to start work, several
supervisors who are good at interpersonal skills as shown by experience are
brought together and provided with an explanation of QC Circles. They are also
trained to act as Circle leaders.
z An orientation meeting should be held to acquaint all departmental employees
with the concept of QC Circles and the role employees can play. The employees
are then invited to form the circles; joining circles is voluntary. When a sufficient
number of employees volunteer, the circle is ready to start functioning.
z The first meeting of the circle is called. The members get acquainted, establish
objectives and get an understanding of the procedures involved and agree upon an
approach. The facilitator explains the tools and techniques used in problem
solving. Both facilitator and leader encourage discussions and participation, and
evaluate actions to be taken for gearing the members for fruitful involvement.
Records are maintained and agenda for the next meeting is drafted.
12.9 QUALITY TEAMS

In this section we will discuss the concept of a quality team and how a cooperative
team structure is achieved. Also, light is thrown on the essence of a team.
12.9.1 A Quality Team

z Has a clear understanding of its goals: overall and immediate.
z Is flexible in selecting its procedure as it works toward its goals.
z Has achieved a high degree of communication and understanding among its
members. Communication of personal feelings and attitudes as well as ideas
occurs in direct and open fashion because it is considered important to the work of
the Team.
z Is able to initiate and carry out an effective decision-making, carefully considering
minority viewpoints and securing the commitment of all members to important
decisions.
z Achieves an appropriate balance between Team productivity and the satisfaction
of individual needs.
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z Provides for sharing of leadership responsibilities. 169
Quality Circles
z Has a high degree of cohesiveness (attractiveness to its members).
z Makes intelligent use of the differing abilities if its members.
z Can be objective about reviewing its own processes. Can face problems and adjust
to needed modification.
z Maintains a balance between emotional and rational behaviour, channeling
emotionally into productive Team effort.
12.9.2 Achieving a Cooperative Team Structure

z Members must interact, give and receive help from one another, and share ideas,
information, and resources to help accomplish the Team's goals.
z The Team goal of getting the task done at the highest level possible must be
accepted by everyone, and members need to develop commitment to the Team
goal.
z Because the possibility exists of different Team members doing different
sub-tasks, Teams may divide the labour in various ways to accomplish their goals.
z Rewards, if any, must be based upon the quality and quantity of Team
performance, not individual performance.
12.9.3 Essence of Team (Shared Dreams/Shared Directions)

"We don't have to like each other... but we do need to work together to get the job
done." As we think about leadership teams and the impact they have on organization
performance and success, it is important to consider why alignment at the top is
needed and how people can work together to provide collective leadership.
The Webster's dictionary explains the word align as "to array on the side of or against
a party or cause." It also talks about "to be in or come into precise adjust or correct
relevant position." “As we read these descriptions, several images come to mind of
what this means in the corporate context.” To array on the side of a cause" by
implication means that being aligned is about being united by an over arching vision
for the organization. A shared dream of sustainable growth - whatever is the industry,
product or service. It is this common purpose and shared vision that enables people to
develop a set of shared values, beliefs and goals that they strive to live up to and
accomplish. This alignment needs to be visible at the very top. This burning ambition
for the organization needs to be demonstrated by all members of the top team if they
are to be able to drive it down deep through the organization for performance and
success. Yet, this talk about vision, dreams and common purpose seems "touchy-
feely" and almost elusive. To understand how real it is, let us spend a few minutes
talking about the role of top leadership.
There are four key roles of the top leadership team. First, they must be role models for
the behaviours and values important for the organization and the aspirations of the
company and provide a pathway to accomplish these. They must also establish
systems and processes to enable the work to support the accomplishment of these
goals. They must remove obstacles to effective implementation of systems and
processes. Finally, they must inspire and communicate, communicate, and
communicate!
While individual members of the top team may be responsible for specific functions,
divisions and performance cells, the collective responsibility of the team is to ensure
organizational effectiveness and success. Healthy debate and discussion must be
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170 encouraged, but a decision once taken is the collective decision of the team and must
Quality Techniques be communicated through the organization as such.
For this to be visible to the rest of the organization, members of the top team need to
demonstrate their cohesion through their behaviour. How they communicate their
support for each other in their functional teams and in wider forums are vitally
important. For instance, if we want to build an organization that works with speed and
responsiveness to customers' needs, then, the top team must demonstrate their ability
to be efficient. This means that they need to trust each other, make quick decisions and
follow through with passion and commitment once those decisions are reached. If we
want to build an organization where performance, results and positive accountability
are the norm then, members of the top team must hold each accountable for their
behaviours, the commitments they make and the way they lead their own teams for
agreed performance.
This demonstration of the shared values and beliefs is the most important ingredient
for building alignment. Without this, it is fair to say that an organization's efforts to
establish a culture; transform traditional ways of working will rarely succeed.
The next role of the top leadership team is to create the foundation for effective
systems and processes to support the goals. It is only by creating clarity of thought,
purpose and action for the organization that the leadership gets the desired results
through people. It is through this process that we can make success a habit for the
organization. When the organization is clear about the vision and the goals,
individuals are able to align their work, and their teams around what is important.
They find ways to work through across teams to deliver the goals. Using the
demonstrated behaviours of the top leadership team, they are able to work through
obstacles and difficulties.
Even as we empower teams down the line to work through their goals, it is imperative
for the leadership team to continuously assess organization effectiveness. By this we
mean that members of the leadership team, individually and collectively remain
responsible for understanding the reasons why goals are accomplished or not and are
therefore continuously in touch with reality. It is their responsibility then to quickly
modify or eliminate systems and processes, which hamper progress, reinforce the
systems that work and demonstrate flexibility to enable performance.
Thus, the process of creating organization clarity, and inducing flexibility and
"nimbleness" is a continuous and reiterative one – this helps the process of learning
and institutionalizing patterns for successful behaviour across the organization. .
Finally, all of this is possible only through consistent and continuous communication.
The process of communication, directly and frequently, repetitively, reinforces what is
important for the organization and inspires everybody through the organization to
understand and act in desired ways.
Relentless and consistent communication is essential. When instituted with a
continuous feedback mechanism, it leads to an effective understanding of informal
processes within the organization.
What factors should we consider as we put a top team together, and the underlying
pieces that hold these individuals together? It is imperative that we ensure a good
match between personal and organizational values. It is therefore critical that all the
supporting HR processes within the organization find ways of assessing the values
match of individuals at the top. There are many implications of having a group of
people with very disparate ways of thinking about goals, results, achievement and
growth. It is apparent from an analysis of highly successful organizations that values
are the unifying piece which determine the manner in which organizations meet their
goals and build sustainable capability
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While building a diverse workforce and leadership team makes eminent good business 171
Quality Circles
sense, it is important that we understand the organization, the business and the manner
in which they serve customers. Having too diverse a background and talent base often
means that the decision making process is slowed down, the ability to reach a
consensus is difficult, the pace and manner of implementation of agreed policies
varied. All of this is expensive for the organization, and creates a set of dysfunctional
dynamics that detract from the primary aim of serving customers.
In too many organizations we see that a place on the top leadership team is earned by
the length of service in the organization or by a proven track record in a functional
area. It is vitally important that people on the top team have a passion for excellence
demonstrated by performance and experience in at least two or three different
functions. Both depth and breadth of experience are important, and as we select people
to move into the top leadership slots, we should keep this in mind. What this brings to
the table is maturity of thought and action, ability to appreciate views of other
functions and perspectives, and above all ability to think laterally and generate
creative thought. Individuals need to have the ambition to move on and get further in
their careers; they must continue to demonstrate passion for learning and
improvement.
It is important to build in diversity of age and experience to ensure that various
schools of thought are adequately represented and that the team constructively
challenges direction, process and systems. It is important to consider how an
organization is able to encourage calculated risk taking to ensure optimum results. An
all-older people often lead to relatively traditional ways of working. Too young a team
may lead to a very radical approach. This balance of age and experience at the top is
also important to ensure that the various work groups within the organization are
represented effectively.
These factors become really important in getting top team alignment. What then are
the elements that hold people together? The first and foremost is trust. Too diverse a
team impacts the ability to generate trust and a shared vision for the present and the
future. The second is team working. If members of the group believe in the value of
working with each other to maximize skills and capabilities the message down the line
is loud and clear. The third piece is commitment – to the cause, to results, to
excellence and to coaching each other to deliver on the promise. The fourth is
constructive conflict management and the fifth is creating an environment of open,
honest feedback. Organizations that are able to nurture these elements will probably
be able to develop an environment of success for everyone who works there.
In difficult and turbulent times, the issue of top team alignment is critical and one that
causes organizations the most pain. Whether it is a start up organization or it is in the
way of transformation, the group at the top needs to perform as a team. Individually
and collectively, they have an onerous responsibility of steering people and the
organization towards sustainable growth and success. It calls for unlearning and
relearning new skills and capabilities. It requires a genuine understanding of the
people factors that affect performance. It requires an almost selfless focus on
including other people and making them a part of your own success. It is not easy but
it has to be done.
Where human beings are involved, success is never ensured. However, we can
through thoughtful actions and continuous improvements at least manage the risks
associated with leadership and organization building. In the words of Patrick Lencioni,
author of the "Four obsessions of an extraordinary executive", "an executive must
keep two things in mind if they are to make their organizations successful...first there
is nothing more important than making their organization healthy, and second there is
no substitute for discipline..." It is important for us to be relentless in the pursuit of
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172 alignment, for without this the organization flounders in a sea of conflict and despair -
Quality Techniques without hope and a chance to succeed.
Fill in the blanks:
1. QC Circles involve a basic change in ……………. in most organizations.
2. The seeds of Quality Circle were planted in NLC during ……………. .
12.10 LET US SUM UP

Quality Circles are small groups, within departments and sometimes across
departments of an organization to solve problems related to quality and productivity.
These groups are formed by about 7 to 8 workers under the leadership of their
supervisors to deal with their work related problems. Groups are facilitated by a
structure consisting of Steering Committee, Facilitators, and a Coordinator. Groups
use various simple tools and techniques. In order to compete successfully in the
emerging competitive market, an organization should always be concerned with its
business strategy, processes and products. It has to continuously review these aspects
to improve, and sometimes re-engineer to bring them in line with its capabilities with
market requirements.
Benchmarking, if carried out systematically, provides outside views and ideas and
thus triggers off creativity of the group to strengthen its competitive capability.

Explain the key elements of quality circles.
12.12 KEYWORDS
Coordinator: A role that acts as a secretariat to the steering committee.
Facilitator: A semi-formal role that catalyses development of quality circles in our
organization.
Leader: A role that leads the group in solving problems in a quality circle.
Steering Committee: A committee consisting of top management and functional heads
that oversee proper working of quality circles.

1. What is a quality circle? What are its principal objectives?
2. "Quality Circles do not work beyond Japan." Comment.
3. What is the, process that is followed by a quality circle in solving a particular
problem known as?
4. Explain the following techniques with the help of some examples that you know:
Brainstorming
Pareto Analysis
Control Charts.
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LESSON 179
Quality Improvement Techniques
13
QUALITY IMPROVEMENT TECHNIQUES
CONTENTS
13.1 Introduction
13.2 Tools of Quality Improvements
13.3 Check Sheet
13.3.1 Steps to Create a Check Sheet
13.4 Histograms
13.4.1 Steps in Constructing a Histogram
13.4.2 Uses of Histogram Chart
13.4.3 Examples of Typical Distributions
13.4.4 Limitations of Technique
13.5 Let us Sum up
13.7 Keywords

z Know quality improvement tools
z Describe check sheets
z Explain histograms
13.1 INTRODUCTION
One of the basic principles of TQM is management by facts. Management by facts call
for decisions based on relevant data and appropriate analysis and not by institution,
guts feeling and experience.
Management cannot expect employees to effectively participate in problem solving
and continuous improvement programs (i.e. to be empowered) unless they are
provided training in how to address problems.
The seven tools of quality make it easy for the collection and analysis of the data for
management by facts. They can assist the quality professional in root cause analysis.
They help organizations understand their processes in order to improve them.
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180 A picture can convey ideas better than many words. The seven tools of quality are the
Quality Techniques cause-and-effect diagram, check sheet, control chart, flowchart, histogram, Pareto
chart, and scatter diagram. They are simple but powerful tools that can be of
significant value throughout the problem solving and continuous improvements
processes.
13.2 TOOLS OF QUALITY IMPROVEMENTS

The seven classical tools for Quality and process improvements and their use are
given below:
Table 13.1: Tools of Quality Improvement and their Use
Tool Use
Check sheet Tabulates frequency of occurrence
Histogram Portrays the frequency of occurrence
Scatter Diagram Helps determine if two variables are related
Flow chart Flow charts are pictorial representations of a process. By flowcharts the
process down into its constituent steps, flowcharts can be useful in
identifying where errors are likely to be found in the system
Pareto Diagram Visually portrays problems and cause in order of severity or frequency.
Helps determine which problem or cause to tackle first
Control Chart Shows if a process has too much variation
Cause and Effect Diagram Portrays possible causes of a process problem. Helps determine root
cause
These tools, like physical tools exist to help to do a job. Each of them is some form of
chart for the collection and display of specific kind of data. They make the data
collected usefully by making them as information that can be used for problem solving
and enhance decision-making. They keep track of the work done and can even
anticipate future performance and problems.
These tools can be used at various stages of problem solving as under:
Table 13.2: Tools used in Various Stages of Problem Solving
Stage Tools used
I Process identification and objectives Flow chart
II Measurements Checks, histograms, Control Charts
III Identifying problem area Flow charts, Pareto Analysis and Scatter diagram
IV Finding root causes Cause and effect diagram, Scatter diagram
With the exception of process control charts, they do not require any knowledge of
statistics to be used effectively. And these tools are equally effective in both service
and manufacturing environments. Training in the use of these tools is often
incorporated into the early phases of employee empowerment training programs.
Each of these quality tools is simple and do not require any special theoretical
education to implement them. They organize data so nicely that the message can be
comprehended easily. These tools are usually used to complement each other, rather
than employed as stand-alone techniques.
13.3 CHECK SHEET

The check sheet is one of the seven tools of quality and is customized form, or tally
sheet, designed by the user. It is a data gathering and interpretation tool. It is a simple
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data-recording device custom-designed by the user that allows him or her to readily 181
interpret the results.
It is defined as a simple data collection form consisting of multiple categories with
definitions. Data are entered on the form with a simple tally mark each time one of the
categories occurs. It is a tool used to ensure that all important steps or actions in an
operation have been taken. Checklists contain items that are important or relevant to
an issue or situation.
The check sheet is set up to accept that data vary easily and at the same time display
useful information. It is a special data collection form from which results can be
interpreted directly without additional processing. Number of non-confirming items
can be observed easily if we include information like specification limits.
The main purpose of check sheets is to facilitate the collection and analysis of data by
operating personnel carefully and accurately. Operators need to be trained and
empowered to use them.
Data should be collected in such a manner that it can be quickly and easily used and
analyzed. The form of the check sheet is individualized for each situation and is
designed by the project team.
A check sheet is s simple means of data collection. The most straightforward check
sheet is simply to make a list of items that you expect will appear in a process and to
mark a check beside each item when it does appear.
This type of data collection can be used for almost anything, from checking off the
occurrence of particular types of defects to the counting of expected item (e.g. the
number of times the telephone rings before being answered).
Check sheet is used to physically track one or more specific events or problems.
Usually one mark is made per occurrence. They are simple to use visually display the
data to reveal underlying patterns. They are used top find the frequency and location
of area of failure. A simple check sheet is given below:
A III
B IIII III
C IIII IIII IIII III
D IIII IIII IIII IIII II
E IIII IIII II
F IIII
Figure 13.1: Check Sheet

Creatively plays a major role in the design of a check sheet. It should be user-friendly
and, whenever possible, include information on time and allocation. Whenever
possible, check sheets are also designed to show location.
13.3.1 Steps to Create a Check Sheet

Steps to create a check sheet are as follows:
z Clearly define the objective of the collection.
z Determine other information about the source of the data that should be recorded,
such as shift, date, or machine.
z Determine and define all categories of data to be collected.
z Determine the time period for data collected and who will collect the data.
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182 z Determine how instructions will be given to those involved in data collection.
Quality Techniques z Design a check sheet by listing categories to be counted.
z Pilot the check sheet to determine ease of use and reliability of results.
z Modify the check sheet based on results of the pilot.
A check Sheet is used for:
z Distinguishing between fact and opinion.
z Gathering data about how often a problem is occurring.
Tips for constructing Sheets:
z Use Ishikawa diagrams or Brainstorming to determine categories to be used on the
check sheet.
z Construct an operational definition of each category to ensure data collected is
consistent.
z Make check sheet as clear and easy to use as possible.
z Spend adequate time explaining the objective of the data collections to those
involved in recording the data to ensure the data will be reliable.
z Data collected in this format facilitates easy Pareto analysis.
Check sheets are often confused with data sheets and checklists. Checklist is a tool
used to ensure that all important steps or actions in an operation have been taken.
Checklists contain items that are important or relevant to an issue or situation.
13.4 HISTOGRAMS
Histogram is a fundamental statistical tool of SPC. It is a very effective graphical and
easily interpreted method for summarizing data.
A histogram is a graphic summary of variation in a set of data. The pictorial nature of
the histogram lets people see patterns that are difficult to see in a simple table of
numbers.
A histogram is a graphical representation of individual measured values according of
frequency or relative frequency of occurrence. Hence, they are also known as
frequency distribution diagrams. It is a type of Bar Chart – a graph where a discrete
variable (categories, items, ranges of data, etc.), on one axis (usually horizontal
X-axis) is compared to one or more values on the other axis.
Depending upon the particular variable, all of the data values may be represented.
Otherwise the values may be grouped into classes. The width of the bars is
proportional to the classes and the heights are proportional to the class frequencies.
The pictorial nature of histogram lets people see patterns that are difficult to see in a
simple table of numbers. It enables to find out useful information about the data, such
as:
z The average (mean) of the data
z The variation present in the data
z The pattern of variation
z Whether the process is within specifications
Histogram is useful tool for estimating the density (for random variables) or
probability mass function (for discrete random variables) of the population.
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Histogram provides clues about the characteristics of the population from which the 183
samples are taken.
Before constructing frequency distribution one must determine the number of classes
to be used. Though this is purely arbitrary, too few or two many classes will not
provide a clear a picture as can be obtained with some nearly optimum number of
classes.
Sturge’s rule may be used as a useful guide to determine the optimal numbers of
classes (K) given by
K = the smallest integer greater than or equal to 1 + 3.332 Log(n)
Where, K is the number of classes, Log is in base 10, and n is the total number of the
numerical values which comprise the data set.
Therefore, class width is: [(highest value – lowest value)/(1 + 3.332 Log (n))] where n
is the total number of item in the data set.
13.4.1 Steps in Constructing a Histogram

Steps in constructing a histogram are as follows:
1. Collect and tabulate data on a process, product or procedure.
2. Calculate the range of the data by subtracting the smallest number in the data set
from the larges. This is the range. Call this value R.
3. Decide on the number of bars to be displayed in the histogram. This is the number
of classes. Call this number K. This number should never be less than four and
seldom exceeds 12.
4. Determine the fixed width of each class by dividing the range, R by the number of
classes K. Round off this to a number ending in a zero. Let this be i.
5. Create a table of upper and lower class limits.
6. Sort, organize, or categorize the data in the way it is done for check sheet. These
are the frequency counts and will be plotted on the Y-axis of the histogram.
7. Create the framework for the horizontal and vertical axes of the histogram. On the
horizontal axis plot the lower and upper limits of each class determined above.
The scale on the vertical axis should run from zero to the number greater than the
largest than the largest frequency count determined above.
8. Plot the frequency data on the histogram framework by drawing vertical bars each
class. The height of each bar represents the number or frequency of values
occurring between the lower and upper limits of the class.
9. Interpret the histogram for skew and clustering problems:
The shape shows the nature of the distribution of the data.
The central tendency (average) and variability are easily seen.
Specification limits can be used to display the capability of the process.
Example: The data below are the number of defectives pieces from 20 samples (each
containing 200 units): 48,49,50,46,47,47,35,38,40,42,45,47,48,44,43,46,45,42,43,47.
The largest number is 50 and the smallest is 35. Thus, the range, R = 15. Using 5
classes, so K=5. The interval width I = R/K = 15/5 = 3.
Make the lowest value as the lower limit, the lower limit for the first class 35.
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184 Thus the first upper limit is 35 + 3 or 38. The second class will have a lower limit of
Quality Techniques 38 and as upper limit of 41. The completed table (with frequencies tabulated) will look
like the following.
Table 13.3: Completed Table with Tabulated Frequencies
Class Lower Limit Upper Limit Frequency
1 35 38 1
2 38 41 2
3 41 44 4
4 44 47 5
5 47 50 8
Frequency
Figure 13.2: Histogram Chart
13.4.2 Uses of Histogram Chart

A histogram is used for:
1. Making decisions about a process, product, or procedure that could be improved
after examining the variation.
2. Displays easily the variation the variation in the process.
3. Compare distributions.
4. Determine means and modes.
5. Identify population control limits mixtures, abnormally, or errors.
It is used for interpreting skew problems. Data may be skewed to the left or right.
If the histogram shows a long on the left side of the histogram, the data is termed left
or negatively skewed. If a tail appears on the right side, the data is termed right or
positively skewed. Decisions may need to be made to determine the appropriateness of
the direction of the skew.
It is used for interpreting clusters problems. Data may be clustered on opposite ends of
the scale or display two or more peaks indicating serious inconsistencies in the process
or procedure.
13.4.3 Examples of Typical Distributions

Normal
z Depicted by a bell-shaped curve:
Most frequent measurement appears as centre of distribution.
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Less frequent measurements taper gradually at both ends of distribution. 185
Indicates that a process is running normally (only common causes are present.
Bi-Modal
z Distribution appears to have two peaks.
z Many indicate that data from more than process are mixed together:
Materials may come from two separate vendors.
Sample may have come from two separate machines.
Cliff-lake
z Appears to end sharply or abruptly at one end.
z Indicates possible sorting or inspection of non-conforming parts.
Saw-Toothed
z Also commonly referred to as a comb distribution, appears as an alternating
jagged pattern.
z Often indicates a measuring problem.
z Improper gauge readings.
z Gauge not sensitive enough for readings.
Skewed
It appears as an uneven with values tapering to one side. The two types are skewed left
and skewed right.
13.4.4 Limitations of Technique

Histograms are limited in their use due to the random order in which samples are
taken and lack of information about the state of control of the process. Because
samples are gathered without regard to order, the time dependent or time-related
trends in the process are not captured. So, what may appear to be the central tendency
of the data may be deceiving.
Histogram gives no indication whether the process was operating at its best when the
data was collected. This lack of information on process control may lead to incorrect
conclusions being drawn and, hence, inappropriate decisions being made.
Histograms are effective only when the data is representative of typical process
conditions and the sample size is large enough to provide good conclusions.
Histograms are only effective for data that come from a process that is in a state of
statistical control (because trends can be masked).
In spite of all these limitations the histogram’s simplicity of construction and ease of
use make it an invaluable tool in the elementary stage of data analysis.
Check Your Progress
1. Define check sheet.
…………………………………………………………………………….
2. What is a histogram chart used for?
…………………………………………………………………………….
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186
Quality Management and 13.5 LET US SUM UP
Quality Techniques
Management cannot expect employees to effectively participate in problem solving
and continuous improvement programs (i.e. to be empowered) unless they are
provided training in how to address problems. The seven tools of quality make it easy
for the collection and analysis of the data for management by facts. They can assist the
quality professional in root cause analysis. They help organizations understand their
processes in order to improve them.

Discuss the roles of histogram in quality management.
13.7 KEYWORDS
Check Sheet: The check sheet is a form (document) used to collect data in real time at
the location where the data are generated. The data it captures can be quantitative or
qualitative.
Histograms: A histogram is a graphical representation showing a visual impression of
the distribution of data.

1. Describe the various tools for quality improvement.
2. What do you mean by check sheets?
3. Describe various steps used in constructing a histogram.

CYP
1. The check sheet is one of the seven tools of quality and is customized
form, or tally sheet, designed by the user. It is a data – gathering and
interpretation tool.
2. A histogram is used for making decisions about a process, product, or
procedure that could be improved after examining the variation.
13.9 SUGGESTED READINGS

Bailey, J.E., Pearson, S.W. (1983) “Development of a Tool for Measuring and Analyzing
Computer user Satisfaction.” Management Science.
Berk, Joseph and Berk, Susan (2000) Total Quality Management. Butterworth-Heinemann.
Creech, Bill. (1995) Five Pillars of TQM, Plume Publisher.
Delen, G.P.A.J. and Rijsenbrij, D.B. B. (1992) “A specification, Engineering and Measurement
of Information Systems Quality”. Journal of System Software.
Dr. S. Kumar Total Quality Management. USP Publishers.
Drucker, P.E. (1995) “The Information Executives Truly Need”, Harvard Business Review.
Fox, C., Levitin, A. and Redman, T. (1994) “The Notion of Data and its Quality Dimensions”,
Information Processing & Management.
George, Stephen & Weimerskirch, Arnold (1994) TQM Strategies and Techniques: strategies
and techniques proven at today's most successful companies. Wiley.
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Quality Techniques
LESSON
14
PARETO AND SCATTER DIAGRAMS
CONTENTS
14.1 Introduction
14.2 Pareto Diagrams
14.2.1 Steps in Constructing a Pareto Chart
14.3 Scatter Diagrams
14.3.1 Steps in Constructing a Scatter Diagram
14.3.2 Interpret the Data
14.3.3 Uses of Scatter Diagram
14.4 Control (Run) Charts
14.4.1 Steps for Developing Control Charts
14.4.2 Control Chart Properties
14.4.3 Patterns in Control Charts
14.5 Let us Sum up
14.7 Keywords

z Know Pareto diagrams
z Describe Scatter diagrams
z Explain control charts
14.1 INTRODUCTION
The Pareto Chart is named after Vilfredo Pareto, a 19th century economist who
postulated that a large share of wealth is owned by a small percentage of the
population. This basic principle translates well into quality problems. A Pareto Chart
is a series of bars whose heights reflect the frequency or impact of problems. The bars
are arranged in descending order of height from left to right. This means the categories
represented by the tall bars on the left are relatively more significant then those on the
right.
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189
14.2 PARETO DIAGRAMS Pareto and Scatter Diagrams
A Pareto Chart is a vertical bar graph showing problems in a prioritized order.

It is based on the Pareto principle, named after 19th century economist Vilfredo Pareto,
was first defined by J.M. Juran in 1950. The principle, suggests that most effects come
from relatively few causes; that is, 80% of the effects come from 20% of the possible
causes (the significant few). The Pareto chart is one of the important seven tools of
quality.
All the resources are limited and need to be utilized effectively to get the maximum
benefit. Pareto charts helps to achieve the same by revealing the significant few from
the useful many.
Pareto charts show the most frequently occurring factors. This diagram graphically
depicts Pareto’s empirical law of 80-20 rule. They are also called as Juran Diagrams
or Pareto (pah-ray-toe) Diagrams. They are histograms (i.e. bar charts) that help to
identify and prioritize problem areas.
Analysis of Pareto charts help to make best use of limited resources by targeting the
most important problems to tackle.
14.2.1 Steps in Constructing a Pareto Chart

Steps in constructing a Pareto Chart are as follows:
1. Use a check sheet or “brainstorm” to obtain data.
2. Determine the categories of problems or causes to be compared. Arrange the data
in order from the largest category to the smallest into a narrowed down list of 8 or
less categories.
3. Select a Standard Unit of Measurement and the Time Period to be studied.
Collect and summarize the Data. Create a four – column table with the headings of
“Problem category”, “Frequency”, and “Percent of total”, and the “cumulative
percentage” as given in the example below.
List the problems identified in first column. In the second column write the totals for
each of the categories over the designated period of time. In the third column, divide
each number in the “frequency” column by the total number of measurement. This
will provide the percentage of the total. Record the cumulative value in the last
column.
1. Create the horizontal and vertical axes of the Pareto Chart as under. The
horizontal axis will be the categories of problems ion descending order with the
most frequently occurring category on the far left.
The chart has two vertical axes. The one on the left shows frequency (as in a
histogram). The one on the right hand shows the cumulative percentage of
frequency curve identifies the few vital factors that warrant immediate managerial
attention.
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190
Quality Techniques
Figure 14.1: Pareto Chart

2. Plot the bars on the Pareto Chart. Draw the corresponding bars in decreasing
height from left to right using the frequency scale on the left vertical axis.
To plot the cumulative percentage line, place a dot above each bar at a height
corresponding to the scale on the right vertical axis. Then connect these dots from
left to right, ending with the 100% point at the top of the right vertical axis.
3. Interpret the Pareto Chart. The most frequent event is not always the most
important. Find out what has the most impact on the goals of the business and
customers. Investigate from all angles to help solve the problems.
4. Draw a vertical scale on the right and add a percentage (0 to 100 percent scale).
5. Plot a cumulative – percentage line.
Pareto analysis is often used as the first step of a quality improvement programme. It
can be used for many applications like identifying quality costs, customer complaint
analysis, supplier analysis, formulating specifications and so on. With the use of
computers, this has become all the easier.
14.3 SCATTER DIAGRAMS

A Scatter Diagram is the simplest of the seven tools and is used to interpret data by
graphically displaying the relationship between two variables. It is the graphical
component of regression analysis.
A common diagram of this type usually displays points representing the observed
value of another variable. It is a plot of two variables that can be used to identify any
potential relationship between them. The shape of the scatter diagram indicates the
type of relationship. It cannot determine the cause of such a relationship.
A cluster of points resembling a straight line indicates the strongest correlation
between the variables. The analysis produced by the Scatter Diagram is called
Regression Analysis.
Scatter Diagram is able to quantify the degree of co-variation between the variables
called correlation. The word correlation does not imply or mean causation. A
correlation simply means that two measures tend to vary another.
A perfect positive, one-to-one (1:1) correlation has s correlation of +1. A perfect 1:1
negative correlation has a correlation of -1. Since everything varies, one rarely sees a
perfect correlation.
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Two sets of data are plotted on a graph, with the y-axis being used for the variable to 191
Pareto and Scatter Diagrams
be predicted and the x-axis being used for the variable to make the prediction. The
graph will show possible relationship (although two variables might appear to be
related, they might not be: those who know most about the variables must make that
evolution). The scatter diagram one of the seven tools of quality.
14.3.1 Steps in Constructing a Scatter Diagram

Steps in constructing a Scatter Diagram are as follows:
1. Collect two pieces of data (a pair of numbers) on a process, or product. Create a
summary table of the data.
2. Draw a diagram labelling the horizontal and vertical axes. It is common that the
“cause” variable is labelled the horizontal (X) axis and the “effect” variable
labelled as the vertical (Y) axis. The scale on both the X and Y axes should be
sufficient to include both the largest and the smallest X and Y values in the table.
3. Plot the data pairs on the diagram by placing a dot at the intersections of the X and
Y coordinates for each data pair.
14.3.2 Interpret the Data

Scatter diagrams will generally show one of six possible correlations between the
variables:
Figure 14.2: Scatter Diagrams

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192 Strong Positive Correlation The value of Y clearly increases as the value of X increases.
Quality Techniques Strong Negative Correlation The value of Y clearly decreases as the value of X increases.
Weak Positive Correlation The value of Y increases slightly as the value of X increases.
Weak Negative Correlation The value of Y decreases slightly as the value of X increases.
Complex Correlation The value of Y seems to be related to the value of X, but the
relationship is not easily determined.
No Correlation There is no demonstrated connection between the two
variables.
Interpreting the direction: Data patterns may be positive, negative, or may display no
relationship. An ellipse of points that slopes upward indicates a positive relationship.
That means an increase in the cause variable also increases the effect variable.
An ellipse of points that slopes downward indicates a negative relationship. This
indicates that an increase in the cause variable results in a decrease in the effect
variable. When it is difficult or impossible to determine the trend, it indicates that this
is no relationship between the two variables.
Interpreting the strength: Data patterns should also be interpreted for strength by
examining the “tightness” of the clustered points. The more the points are clustered to
look like a straight line, the stronger is the relationship
14.3.3 Uses of Scatter Diagram

Uses of scatter diagram are as follows:
z Used to visualize relationship (correlation) between two variables.
z Displaying the direction of the relationship (positive, negative, etc.)
z Displaying the strength of the relationship
14.4 CONTROL (RUN) CHARTS

Statistical Quality Control (SQC) or Statistical Process Control (SPC) for repetitive,
high volume production began in the 1930’s when Shewart developed control charts.
The control chart is the fundamental tool of statistical process control, as it indicates
the range of variability that is built into a system (known as common cause variation).
Thus, it helps determine whether or not a process is operating consistently or if a
special cause has occurred to change the process mean or variance.
The principles behind the application of control charts are very simple and are based
on the combined use of run charts and hypothesis testing. Control charts are used to
detect whether a process is statistically stable. Control charts differentiate variations.
Control charts are decision-making tools. They provide an economic basis for
deciding whether to alter a process or leave it alone. Control charts are problem-
solving tools and provide a basis to formulate improvements actions.
They are trend charts with statistically determined upper and lower limits on either
side of the process average. The bounds of the control chart are marked by upper and
lower control limits that are calculated applying statistical formulas to data from the
process.
Data points that fall outside these bounds represent variations due to special cause,
which can typically be found and eliminated. On the other hand, improvements in
common cause variation require fundamental changes in the process.
Control charts are powerful aids to understanding the performance of a process over
time. They identify variation. They are time plots that also indicate the range of
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variation built into the system. They are used to monitor a process to see whether it is 193
in statistical control.
Control charts help us learn more about process variation. They determine whether a
process is in a state of statistical control or out-of-control. They are used to estimate
the process parameters (mean, variation) and assess the performance of a process or its
capability.
Control charts are outgrowth of run charts. Run chart records the output result of a
process over time and shows the trends. But they do not distinguish the type of
variations.
Walter Shewhart proposed Control Charts in 1924 that helps distinguish process
variations. There are two types of variation as under:
Table 14.1: Types of Variations
Types of Variation Variation Characteristics
Assignable Cause, also known as Special Cause Meaningful factors of process. Not always
present. Cause can be avoided and should be
investigated.
Unassignable Cause, also known as Common Factor caused by chance. Always present.
Cause or Chance Cause Unavoidable and inherent in a process. Normal
and expected with process.
Variations due to common causes:

z Have small effect on the process.
z Are inherent to the process because of:
The nature of the system
The way the system is managed
The way the process is organized and operated
z Can only be removed by:
Making modifications to the process
Changing the process
z Are the responsibility of higher management
Variations due to special causes are:
z Localized in nature
z Exceptions to the system
z Considered abnormalities
z Often specific to a:
Certain operator
Certain machine
Certain batch of material, etc
Investigation and removal of variations due to special causes are keys to process
improvement.
On a control chart, random points inside the chart indicate common cause variation. It
can only be changed by changing one of the 5 M’s (Men (includes women also),
Materials, Measuring Devices, Machinery, or Methods).
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194 Elements of a Control Chart: A control chart consists of:
Quality Techniques z A central line,
z An upper control limit,
z A lower control limit, and
z Process values plotted on the chart.
14.4.1 Steps for Developing Control Charts

Steps required for developing and using control charts are as follows:
1. Preparation:
Choose the variable or attribute to be measured
Determine the basis, size and frequency of sampling
Set up the control charts
2. Data Collection:
Record the data
Calculate relevant statistics: averages, ranges, proportions, and so on
Plot the statistics on the chart
3. Determination of trial control limit:
Draw the centre line (process average) on the chart
Compute the upper and lower control limits
4. Analysis and interpretation:
Investigate the chart for lack of control
Eliminate out-of-control points
Recompute control limits if necessary
5. Use as a problem-solving tool
Continue data collection and plotting
Identify out-of-control situations and take corrective action
6. The chart may contain other optional features, including:
Upper and lower warning limits, drawn as separate lines, typically two
standard deviations above and below the centre line
Division into zones, with the addition of rules governing frequencies of
observations in each zone
Annotation with events of interest, as determined by the Quality Engineer in
charge of the process's quality
However in the early stages of use the inclusion of these items may confuse
inexperienced chart interpreters.
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195
Figure 14.3: Control Chart

In general, the chart contains a Centerline that represents the mean value for the
in-control process. Two other horizontal lines, called the upper control limit (UCL)
and the Lower Limit (LCL) are also shown on the chart. These control limits are
chosen so that almost all of the data points will fall within these limits as long as the
process remains in-control.
Control limits are lines on the charts that represent the current acceptable level of
variation in the process. They are functions of the natural variability of the process.
They describe the process spread. They are usually chosen so that nearly all of the
sample points would fall between them in the absence of any special causes of
variation affecting the process.
The control limits represent the maximum amount that the average or range should
vary if the process does not change. A point outside the control limits indicates that
the process has changed. When the control chart identifies a change, an investigation
should be made as to the cause of the change.
If all process values are plotted within the upper and lower control limits and no
particular tendency is noted, the process is referred to as “In Control”. If the process
values are plotted outside the control limits or show a particular tendency the process
is referred to as “Out of Control”.
The determination of the control limits, along with the sample size and the sampling
frequency, is one of the most important tasks in designing a control chart.
If a single quality characteristic has been measured or computed from a sample, the
control chart shows the value of the quality characteristics versus the sample number
or versus time.
To monitor a process, we typically use two control charts; (1) mean (or some other
central tendency measure) and (2) variation (typically using range or standard
deviation). To monitor output, we use a control chart to check things like the mean,
range, standard deviation.
In a control chart, control limits are calculated by the following formula:
(Average Process Value) ± (3 × (Standard Deviation which represented by σ))
Where the standard deviation is due to unassigned variation only.
Control charts make assumptions about the plotted static, namely:
z It is independent, i.e., A value is not influenced by its past value and will not
affect future values.
z It is normally distributed, i.e. the data has a normal probability density function.
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196 Control charts work on the basis of “Six Sigma Control”. The six-sigma value is
Quality Techniques derived from looking at distance ± 3σ from the mean (µ), for a range of 6σ total.
When applying control charts it is common practice to establish the control limits
based on the process capability study and then use fix limits on the chart during
production. They should be reevaluated regularly depending on production volume,
but at least once every three months to minimize error in control chart analysis.
Control limits can be managed to prioritize the efforts of operators and help allocate
limited resources on the shop floor. This is done by setting control limits at three
sigma for critical characteristics and perhaps four or five sigma for less critical
characteristics.
14.4.2 Control Chart Properties

All control charts may be defined as having the following properties:
1. The x-axis is sequential. Usually a unit denoted the evolution of time.
2. The y-axis is the statistic that is being charted for each point in time.
3. Limits are defined for the statistic that is being plotted. These Control Limits are
statistically determined. Observing process behaviour, providing an indication of
the bounds of expected process behaviour, does this. They are never determined
using customer specifications or goals.
4. There may be variation in any process. The fluctuation of the points between the
control limits is due to the variation that is intrinsic (built in) to the process. This
variation is due to “common causes”. What causes them is not known. Their effect
on the process seems to be consistent over time. The process is in control. The
location (or measured value) of any of the points that lie between the control
limits is not useful information. To reduce this variation, or re-locate the process
centreline to a new location the process need to be redesigned.
5. When points go out of the control limits, the process must have shifted. Such
points outside the control limits can be attributed to a “special cause”. The control
chart is used to identify the occurrence of these special causes.
6. The limits are determined by estimating the “short-term” variation in the process.
The process stability (or process control) is defined when the short-term variation
is used to estimate the longer-term variation.
When a process is in statistical control, the points on a control chart fluctuate
randomly between the control limits with no recognizable pattern.
General rules for examining a process to determine if it is in control:
z No points are outside control limits.
z The number of points above and below the centre line are about the same.
z The points seem to fill randomly above and below the centre line.
z Most points, but not all, are near the centreline, and only a few close to the control
limits.
These rules are based assuming that the distribution of sample means is normal. For
small sample sizes, the distribution of the original data must be reasonably normal for
this assumption to hold.
The upper and lower control limits are computed to be three standard deviations from
the overall mean. Thus, the probability that any sample mean will fall outside control
limits is very small.
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A process is said to be out of control if 197
z A single point falls outside the 3 Sigma limit (beyond UCL and LCL).
z Two out of three successive points fall in between 2 sigma and UCL or beyond or
-2sigma and LCL or beyond, the odd point may be anywhere.
z Find out of Five successive points fall in between 1 sigma and 2 sigma or beyond,
or between – 1 sigma and 2 sigma or beyond the odd point may be anywhere.
z Eight successive points fall in between – sigma and sigma or beyond.
The seven run rule
The seven run rule is also used with control charts. Any seven consecutive varying
data points indicate a need to investigate the process being monitored. Any seven
consecutive increasing or decreasing measurements, regardless of where they begin or
end relative to the mean, indicates a need to inspect the process.
Also, any seven consecutive measurement that all above the mean or below the mean,
even if they are not all increasing or decreasing, indicate a need to inspect the process.
Depending on the number of process characteristics to be monitored, there are two
basic types of control charts.
z Univariate control chart is a graphical display (chart) of one quality characteristic.
z Multivariate control chart is a graphical display of a statistic that summarizes or
represents more than one quality characteristic.
z Control charts are constructed with two different basic types of measurements:
z Measured or continuous data (lengths, temperature, volume, pressure, voltage).
z Counted or discrete data (defects, typographical errors, mislabelled items,
occurrences).
14.4.3 Patterns in Control Charts
Patterns in control charts are as follows:
z One point outside control limits: indicates variation due to a special cause like a
sudden power surge, a broken tool, measurement error, or an incomplete or
omitted operation in the process.
z Sudden shifts in the process average: indicates sudden shifting of the process
average.
z Cycle: Short and repeated patterns in the chart with alternating high peaks and
how valleys called cycles are the result of cause that come and go on a regular
basis.
z Trends: A trend is the result of some cause that gradually affects the quality
characteristics of the product and causes the point on a control chart to gradually
move up or down from the centre line.
z Hugging the centre line: It occurs when nearly all the points fall close to the
centre line indicating that the control limits are too wide.
z Hugging the control limits: The pattern shows up when many points are near the
control limits with few in between.
Control charts are designed to be used by production operators rather than by
inspectors or quality control personnel. The use of control charts allows the operators
to react quickly to special cause of variation.
Control charts help to identify key input variables causing the process to shift and aid
in the reduction of the variation. Control charts are used to detect changes in the
process. They are also used as part of a capability study to demonstrate that the
process is stable or consistent.
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198 Check Your Progress
Quality Techniques Fill in the blanks:
1. The seven tools of quality make it easy for the collection and analysis of the
data for ………….. .
2. The ………….. sheet is set up to accept that data vary easily and at the same
time display useful information.
3. ………….. charts show the most frequently occurring factors.
4. ………….. records the output result of a process over time and shows the
trends.
14.5 LET US SUM UP

A scatter diagram is a tool for analyzing relationships between two variables. One
variable is plotted on the horizontal axis and the other is plotted on the vertical axis.
The pattern of their intersecting points can graphically show relationship patterns.
Most often a scatter diagram is used to prove or disprove cause-and-effect
relationships. While the diagram shows relationships, it does not by itself prove that
one variable causes the other.

“Pareto analysis is often used as the first step of a quality improvement programme.”
Discuss.
14.7 KEYWORDS
Control Charts: A control chart always has a central line for the average, an upper
line for the upper control limit and a lower line for the lower control limit.
Pareto Diagrams: A Pareto diagram is a simple bar chart that ranks related measures
in decreasing order of occurrence.
Scatter Diagram: A scatter diagram is composed of a horizontal axis containing the
measured values of one variable and a vertical axis representing the measurements of
the other variable.

1. What do you mean by Pareto diagram?
2. Describe control charts in detail.
3. What are the uses of scatter diagram?
4. Explain various steps used for developing control charts.
CYP
1. management by facts
2. Check
3. Pareto
4. Run chart
QM
200
Quality Techniques
LESSON
15
CAUSE AND EFFECT DIAGRAMS
CONTENTS
15.1 Introduction
15.2 Cause and Effect Diagrams
15.2.1 Steps in Constructing a Cause and Effect Diagram
15.2.2 Uses of Cause and Effect Diagram
15.2.3 Advantages of Cause and Effect Diagram
15.3 Flow Charts
15.3.1 Steps for Creating a Flow Chart
15.4 Process Mapping
15.5 Let us Sum up
15.7 Keywords

z Describe cause and effect diagrams
z Know flow charts
z Define process mapping
15.1 INTRODUCTION
A Cause and Effect Diagram is a tool that helps identify, sort, and display possible
causes of a specific problem or quality characteristic. It graphically illustrates the
relationship between a given outcome and all the factors that influence the outcome.
This type of diagram is sometimes called an "Ishikawa diagram" because it was
invented by Kaoru Ishikawa, or a "fishbone diagram" because of the way it looks.
15.2 CAUSE AND EFFECT DIAGRAMS

Cause and effect diagram is systematic arrangement of all possible causes and the
effects that results from them. It is also known as Ishikawa diagram after its
originator, Dr. Kaoru Ishikawa or Fish-bone diagram as the complete diagram
resembles a fish Skelton.
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Cause and effect diagrams can reveal important relationships among various variables 201
Cause and Effect Diagrams
and possible causes and provide additional insight into process behavior. They do not
have a statistical basis, but are excellent aids for problem solving and trouble-
shooting.
Teams of people widely divergent in expertise normally create the Cause and effect
diagram. They do so after brainstorming and developing the list of possible factors.
Missing links can be added and superfluous items are discarded as the diagram
develops.
The causes are derived either from brainstorming or checklists or checklists (or other
data collection mechanisms).
There are to major formats:
z Dispersion Analysis Type – Place cause within a major cause and applying the
5 Whys.
z Process Classification Type – uses the major steps of the process in place of the
major cause
The cause and effect diagram (or fishbone diagram or also Ishikawa diagram) are
diagrams, that shows the causes of a certain event. A common use of the Ishikawa
diagram is in product design, to identify desirable factors leading to an overall effect.
People Machine Milieu
Effect
Material Methods Message
Figure 15.1: Cause and Effect Diagram
15.2.1 Steps in Constructing a Cause and Effect Diagram

Steps in constructing a cause and effect diagram are as follows:
1. Have a project team
2. Prepare a flip chart as above
3. Write the issue (problem or process condition) on the right side of the Cause and
Effect Diagram.
4. Identify the major cause categories and write them in the four boxes on the Cause
and Effect Diagram. Summarize causes under categories like–Methods, Machines,
Materials, People, Milieu, message, etc.
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202 5. Brainstorm potential cause of the problem. Decide as a group where to place them
Quality Techniques on the Cause and Effect Diagram. It is acceptable to list a possible cause under
more than one major cause category.
6. Review each major cause category. Circle the most likely cause on the diagram.
7. Review the causes that rate circled and ask, “Why is this cause?” Asking “Why”
will help get to the root cause of the problem.
8. Reach an agreement on the most probable cause(s).
15.2.2 Uses of Cause and Effect Diagram

A cause and effect diagram is used for:
1. Identifying potential causes of a problem or issue in an orderly way (example:
Why has membership in the band decreased? Why isn’t the phone being answered
on time? Why is the production process suddenly producing so many defects?)
2. Summarizing major causes fewer than four categories (e.g. People, Machines,
Methods, and Materials or Policies, Procedures, People, and Plant)
15.2.3 Advantages of Cause and Effect Diagram

Advantages of CE diagram are:
z Making the diagram educates and trains personnel to make decisions and correct
problems autonomously.
z Results in active searches for causes and eliminate unwanted causes.
z Provides a guide for process analysis.
z Allows tracking of errors, efficient use of resources, lowers costs.
z Standardization of existing and proposed operations.
15.3 FLOW CHARTS

Flow charts are excellent visualization tools though they have no statistical basis.
They are graphical description of how work is done and are used to describe processes
that are to be improved.
These charts and diagrams may be examined using questioning techniques to
determine: purpose, place, sequence, people, and method, to eliminate, combine,
rearrange, or simplify process steps.
Flowcharts document processes and are useful in troubleshooting and in process
improvement. It is a graphical representation of the steps in a process. Flowcharts are
drawn to better understand processes.
Most flow charts are made up of three main types of symbol:
z Elongated circles, which signify the start or end of a process;
Start
z Rectangles, which show instructions or actions; and

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z Diamonds, which show decisions that must be made 203
Cause and Effect Diagrams
Within each symbol, write down what the symbol represents. This could be the start or
finish of the process, the action to be taken, or the decision to be made.
Symbols are connected one to the other by arrows, showing the flow of the process.
Example:
The example below shows part of a simple flow chart which helps receptionist’s route
incoming phone calls to the correct department in a company:
Start
Answer Phone
Product info. or
help placing order How can we Other
help?
Problems
Take name and Shipping What is Billing

company problem?
Problems with
product?
transfer to Sales Take name and

(ext. 2203) company
Finish Transfer to help desk

(ext. 2217)
Finish
Figure 15.2: An Example of Flow Chart Showing How to

Route Incoming Phone Calls
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204
Quality Management and Flow charts show the progress of work like the flow of material or information
Quality Techniques through a sequence of operations. Flow charts or process maps were used to visualize
the flow of product or documents through a series of process steps. It is a pictorial
representation showing all of the steps of a process. It is used for:
1. Defining and analyzing processes.
2. Building a step-by-step picture of the process for analysis, discussion, or
communication purposes.
3. Defining, standardizing, or finding areas for improvements in a process.
15.3.1 Steps for Creating a Flow Chart

Steps for creating a Flowchart are:
1. Familiarize the people with the flowchart symbols.
2. Brainstorm major process tasks.
3. Draw the process flowchart using the symbols on a flip chart or overhead
transparency. Every process will have a start and an end (shown by elongated
circles). All processes will have tasks and most will have decision points (shown
by a diamond).
4. Analyze the flowchart for such items as:
Time-per-event (reducing cycle time)
Process repeats (preventing rework)
Duplication of effort (identifying and eliminating duplicated tasks)
Unnecessary tasks (eliminating tasks that are in the process for no apparent
reason)
Value-added versus non-value-added tasks.
Flow charts are useful in an initial process analysis and should be complemented by
process flow sheets or process flow diagrams (more detailed) if available. Everyone
involved in the project should draw a flow chart of the process being studied so as to
reveal the different perceptions of how the process operated.
“Structured” flow diagrams are created using a single entry (with inputs), a single exit
(with outputs), and a combination of three building structure:
z Sequence – any series of 1 - n sequential steps can be represented as s single step.
z Choice – a decision between two or mire paths (structured sub paths) [e.g., if-then,
case/select].
z Loop – structured sub path (single entry and single exit) that is executed 0 – n
times.
Check Your Progress
Fill in the blanks:
1. Cause and effect diagrams can reveal important ……………. among
various variables and possible causes and provide additional insight into
process behaviour.
2. Elongated circles, which signify the ……………. or end of a process.
3. ……………. show the progress of work like the flow of material or
information through a sequence of operations.
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205
15.4 PROCESS MAPPING Cause and Effect Diagrams
A process Map is an adaptation of the Flow Diagram to document a process where

steps are aligned by role (or department). Usually the vertical axis defines the role
and the horizontal axis displays increasing time.
15.5 LET US SUM UP

A Cause and Effect Diagram is a tool that is useful for identifying and organizing the
known or possible causes of quality, or the lack of it. The structure provided by the
diagram helps team members think in a very systematic way.

Discuss uses of an effect diagram.
15.7 KEYWORDS
Cause and Effect Diagram: The Cause & Effect (CE) diagram, also sometimes called
the ‘fishbone’ diagram, is a tool for discovering all the possible causes for a particular
effect. The effect being examined is normally some troublesome aspect of product or
service quality, such as 'a machined part not to specification', 'delivery times varying
too widely', 'excessive number of bugs in software under development', and so on, but
the effect may also relate to internal processes such as 'high rate of team failures'.
Flow Charts: A flowchart is a type of diagram that represents an algorithm or process,
showing the steps as boxes of various kinds, and their order by connecting these with
arrows.
Process Mapping: Process mapping is a workflow diagram to bring forth a clearer
understanding of a process or series of parallel processes.

1. What do you mean by process mapping?
2. Briefly explain cause and effect diagram in detail.
3. Describe flow chart creation technique step by step.

CYP
1. relationships
2. start
3. Flow charts
15.9 SUGGESTED READINGS

Bailey, J.E., Pearson, S.W. (1983) “Development of a Tool for Measuring and Analyzing
Computer user Satisfaction.” Management Science.
Berk, Joseph and Berk, Susan (2000) Total Quality Management. Butterworth-Heinemann.
Creech, Bill. (1995) Five Pillars of TQM, Plume Publisher.
Delen, G.P.A.J. and Rijsenbrij, D.B. B. (1992) “A specification, Engineering and Measurement
of Information Systems Quality”. Journal of System Software.

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QM

1.0 AIMS AND OBJECTIVES

1.2 CONCEPT OF QUALITY

1.3 VISION OF QUALITY

1.4 EVOLUTION OF QUALITY

1.5 QUALITY MISSION

1.6 QUALITY POLICY

1.6.1 Quality of Services

1.6.2 Customers’ Satisfaction

1.6.3 Preparedness and Satisfaction of Employees

1.7 DIMENSIONS OF QUALITY

1.7.3 Relationships and Systems Thinking

1.7.4 Inter-connectivity and Paradigm Logic

1.7.5 Value Sharing

1.8 QUALITY AS A CUSTOMER DELIGHT

1.9 QUALITY AS MEETING STANDARDS

1.9.1 ISO Best Practices

1.10 ACTUAL VS PERCEIVED QUALITY

1.11 LET US SUM UP

1.12 LESSON END ACTIVITY

1.14 QUESTIONS FOR DISCUSSION

2.0 AIMS AND OBJECTIVES

2.2 CONCEPT OF TOTAL QUALITY

2.2.1 Quality Management

2.3 NEED FOR QUALITY

2.4 FUNCTIONS OF QUALITY

Fill in the blanks:

2.5 TOTAL QUALITY MODEL

Figure 2.1: TQM Model

2.5.1 Quality Management in State and Public Sectors

2.6 ENABLERS FOR TOTAL QUALITY

2.7.1 Walter A. Shewhart (1891–1967)

2.7.2 Joseph M. Juran (born in 1904)

2.7.3 Armand V. Feigenbaum

2.7.4 Kaoru Ishikawa (1915–1989)

According to the conventional view of quality products are manufactured exactly to

2.9 QUALITY AS A PROBLEM AND A CHALLENGE

3.0 AIMS AND OBJECTIVES

Six Sigma is a widely used methodology for measuring and improving an

3.2.1 Historical Overview

3.2.2 Origin and Meaning of the Term "Six Sigma Process"

3.2.4 Implementation Roles

3.2.5 Quality Management Methods used in Six Sigma

3.3 SIX SIGMA ROLES AND RESPONSIBILITIES

Source: Adapted from 2000-2005 iSixSigma LLC

3.4 LET US SUM UP

4.0 AIMS AND OBJECTIVES

4.2 WHY QUALITY MANAGEMENT?

Figure 4.1: Evolution of Quality Management Concept

4.3 UNDERSTAND SOME BASIC CONCEPTS

4.3.1 Concept of Quality

4.3.2 Dimensions of Quality

Relationships and Systems Thinking

Inter-connectivity and Paradigm Logic

4.3.3 Dimensions of Quality for Goods

4.4 QUALITY MANAGEMENT FUNDAMENTALS

4.5 EVOLUTION AND OBJECTIVES

4.5.1 TQM Objectives

Figure 4.2: An Integrated TQM Model

4.7 PROCESS STEPS IN TQM

4.7.1 TQM as a Foundation

4.9 TQM FRAMEWORK TO QUALITY IMPROVEMENT

Figure 4.3: TQM Framework to IQ