Quality Management

Chapter 8
QUALITY MANAGEMENT
‘The problem is at the top; management is the problem’

- W. E. Deming
Industrial Engineering and Management, BME III/II
Course outline
 Evolution of quality
management.
 Quality – definitions.
 Total Quality Management
“Quality is everyone's responsibility.”

W. Edwards Deming
Industrial Engineering and Management, BME III/I
By: Khem Gyanwali, Thapathali Campus, IOE,TU 2
Quality Management
‘The first job we have to turn out quality
merchandise that consumers will buy and keep on
buying. If we produce it efficiently and effectively
and economically, we will earn a profit, in which
you will share.’
- William Cooper Procter
Meaning of Quality
 Webster’s Dictionary
 degree of excellence of a thing
 American Society for Quality
 totality of features and characteristics that satisfy
needs

By: Khem Gyanwali, Thapathali Campus, IOE,TU
3
1. Evolution of Quality Management
• Qualitative analysis has been from time immemorial

but quantitative base involving statistical principles to
control quality is a modern concept.
• Egyptian wall painting (1450 B.C.), construction of their
pyramids, Greeks high standard in arts and crafts
affected the subsequent architectural constructions of
Rome (some quality assurance activities).
• Operator Quality Control Period (middle age and up to
1800s): The production was confined to a single
individual or small group of individuals who served
both as manufacturer and inspector. They were both
responsible for producing and determining the quality
that would conform to standards.

4
• Foreman Quality Control Period (18th – 19th century):

An individual was responsible not for the production of
the entire product but rather for only a portion of it. A
supervisor who directed the operation now had the
task of ensuring that quality was achieved.
• Inspection Quality Control (1920 – 1940): Inspectors
were designated to check the quality of a product after
certain operations. Standards were set and inspectors
compared the quality of the produced item with those
standards. Manufacturing companies created separate
quality departments and non conforming item were
either re-worked or were discarded.

5
• Statistical Quality Control Period (1940 – 1960): The

development of control charts, acceptance sampling
methods and coined the term as Quality Assurance. Since
100 percent was often not feasible the principle of
sampling plans gained acceptance. A set of sampling
inspection plans (MIL – SID) was developed.
• Total Quality Control (1960s): The gradual involvement of
several departments and management personnel in the
quality control process and the quality control
responsibility was given to inspection department. The
concept of zero defects and quality circles developed.
– Quality circles is based on the participative style of
management. It assumes that productivity will improve through
uplift of morale and motivation, which are in turn achieved
through consultation and discussion in informal sub groups.

6
• Total Quality Phase (1970s): The participation of

everyone in the company from the operator to the
first-line supervisor, manager and even the chief
executive officer.
“A quality system is the agreed on companywide and
plant-wide operating work structure, documented in
effective, integrated technical and managerial
procedures, for guiding the coordinated actions of the
people, the machines and the informations of the
company and the plant is the best and most practical
ways to assure customer quality satisfaction and
economical costs of quality.”
- Feigenbaum

7
• Deming and Juran outlined the principles of Quality

Management.
• Tai-ichi Ohno applies them in Toyota Motors Corp.
• Japan has its National Quality Award (1951).
• U.S. and European firms begin to implement Quality
Management programs (1980’s).
• U.S. establishes the Malcolm Baldridge National
Quality Award (1987).
• Today, quality is an imperative for any business.

8
2.Quality - definitions
A. Judgmental perspective
• Quality is synonymous with superiority and excellence.
Quality is goodness of a product. E.g. Ferrari.
B. Product – based perspective
• Quality is function of specific, measurable variables. The
higher the level or the amount of characteristics supplied
the higher the product’s quality. These attributes are
accepted as the benchmark of quality by the industry.
C. Value – based perspective
• Quality is viewed in context of price. Quality is the value
which compares the usefulness or satisfaction with price.
E.g.. DVD

9
2.Quality - definitions
D. Consumer’s Perspective
 Fitness for use
 how well product or service
does what it is supposed to
 Quality of design
 designing quality
characteristics into a
product or service
 A Mercedes and a Ford are
equally “fit for use,” but with
different design dimensions

10
2. Quality - definitions
Dimensions of quality
1. Performance
 basic operating characteristics of a product; how well a car
is handled or its gas mileage
2. Features
 “extra” items added to basic features, such as a stereo CD
or a leather interior in a car
3. Reliability
 probability that a product will operate properly within an
expected time frame; that is, a TV will work without repair
for about seven years
4. Conformance
 degree to which a product meets pre–established
standards

11
5. Durability
 how long product lasts before replacement
6. Serviceability
 ease of getting repairs, speed of repairs, courtesy and
competence of repair person
7. Aesthetics
 how a product looks, feels, sounds, smells, or tastes
8. Perceived Quality
 Resulting from advertisement, image, brand name,
earlier use

12
E. Producer’s Perspective
 Quality of Conformance
 Making sure a product or service is produced
according to design
 if new tires do not conform to specifications, they
wobble
 if a hotel room is not clean when a guest checks in, the
hotel is not functioning according to specifications of
its design

13
Meaning of Quality: A Final Perspective

 Consumer’s and producer’s perspectives
depend on each other
 Consumer’s perspective: PRICE
 Producer’s perspective: COST
 Consumer’s view must dominate

14
Meaning of Quality
Producer’s Perspective Consumer’s Perspective
Quality of Conformance Quality of Design
Production • Conformance to • Quality characteristics Marketing

specifications • Price
• Cost
Fitness for
Consumer Use

15
Quality Gurus
• Walter Shewart
– In 1920s, developed control charts
– Introduced the term “quality assurance”
• W. Edwards Deming
– Developed courses during World War II to teach statistical quality-
control techniques to engineers and executives of companies that
were military suppliers
– After the war, began teaching statistical quality control to Japanese
companies
• Joseph M. Juran
– Followed Deming to Japan in 1954
– Focused on strategic quality planning

16
 Armand V. Feigenbaum
 In 1951, introduced concepts of total quality control and continuous
quality improvement
 Philip Crosby
 In 1979, emphasized that costs of poor quality far outweigh the cost of
preventing poor quality
 In 1984, defined absolutes of quality management—conformance to
requirements, prevention, and “zero defects”
 Kaoru Ishikawa
 Promoted use of quality circles
 Developed “fishbone” diagram
 Emphasized importance of internal customer

17
W. E. Deming
• Emphasizes the role of management.
• 85% of the problems, faced by industry can be solved
by management.
• The idea is to plan for the long run and provide a
course of action for short run.
System of Profound Knowledge

1. Appreciation of the system.
2. Knowledge of the variation.
3. Theory of knowledge.
4. Knowledge of psychology.

18
Deming’s 14 points
1. Create constancy of purpose

2. Adopt philosophy of prevention
3. Cease mass inspection
4. Select a few suppliers based on
quality
5. Constantly improve system and
workers
19
6. Institute worker training

7. Instill leadership among supervisors
8. Eliminate fear among employees
9. Eliminate barriers between
departments
10. Eliminate slogans

20
11. Remove numerical quotas

12. Enhance worker pride
13. Institute vigorous training and
education programs
14. Develop a commitment from top
management to implement above 13
points

21
Deming Wheel: PDCA Cycle
4. Act 1. Plan
Institutionalize Identify
improvement; problem and
continue cycle. develop plan
for
improvement.
3. Study/Check 2. Do
Assess plan; is it Implement plan
working? on a test basis.

22
Deming’s deadly disease

1. Management by visible figures only.
2. Lack of constancy of purpose.
3. Performance appraisal by the numbers.
4. A short-term orientation.
5. Mobility of management.

23
Joseph M Juran
• Management has to adopt a unified approach
to quality. Quality is defined as ‘fitness for
use’. The focus is on customer.
Quality Trilogy Process

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

24
Philip B Crosby
• In order to understand the meaning of quality,
Crosby has identified four absolutes of quality
management.
1. Definition of quality
2. System for achievement of quality
3. Performance standards
4. Measurement

25
Crosby has a 14 step plan to help business

implement a quality improvement program.
1. Management commitment
2. Quality improvement plan
3. Quality measurement
4. Cost of quality evaluation
5. Quality awareness
6. Corrective action

26
7. Ad hoc committee for the zero defects

program.
8. Supervisor training
9. Zero defect day
10. Goal setting
11. Error cause removal
12. Recognition
13. Quality councils
14. Do it over again

27
3. Total Quality Management
• Commitment to quality throughout organization
• Principles of TQM
– Customer-oriented
– Leadership
– Strategic planning
– Employee responsibility
– Continuous improvement
– Cooperation
– Statistical methods
– Training and education

28
Statistical Process Control

• If you cannot measure it, you cannot manage it.
• Don’t inspect the products, inspect the process.
• TQM tools (statistical

methods)
– Flow chart
– Check sheet
– Histograms
– Pareto diagrams
– Cause and effect diagrams
– Scatter diagram
– Control chats

29
Flow chart
Start/
Finish Operation Operation Decision Operation
Operation Operation
Decision Start/
Finish

30
Check sheet
COMPONENTS REPLACED BY LAB
TIME PERIOD: 22 Feb to 27 Feb 2002
REPAIR TECHNICIAN: Bob
TV SET MODEL 1013

Integrated Circuits ||||
Capacitors |||| |||| |||| |||| |||| ||
Resistors ||
Transformers ||||
Commands
CRT |

31
Histograms
20
15
10
0
1 2 6 13 10 16 19 17 12 16 20 17 13 5 6 2 1

32
Pareto Analysis
NUMBER OF
CAUSE DEFECTS PERCENTAGE
Poor design 80 64 %
Wrong part dimensions 16 13
Defective parts 12 10
Incorrect machine calibration 7 6
Operator errors 4 3
Defective material 3 2
Surface abrasions 3 2
125 100 %

33
70
60
(64)
Pareto Chart
Percent from each cause
50
40
30
20
(13)
(10)
10 (6)
(3) (2) (2)
0
Causes of poor quality

34
Cause and effect diagram

Measurement Human Machines
Faulty
testing equipment Poor supervision Out of adjustment
Incorrect specifications Lack of concentration Tooling problems
Improper methods Inadequate training Old / worn
Quality
Inaccurate Problem
temperature
control Defective from vendor Poor process design
Ineffective quality
Not to specifications management
Dust and Dirt Material- Deficiencies
handling problems in product design
Environment Materials Process

35
Scatter diagram
Y
X
36
Case: shortening telephone waiting time…

• A bank is employing a call answering service
• The main goal in terms of quality is “zero waiting time”

- customers get a bad impression
- company vision to be friendly and easy access
• The question is how to analyze the situation and improve quality

37
The current process
Customer Receiving
Operator
A Party
Customer B
How can we reduce waiting time?

38
Fishbone diagram analysis

Absent receiving party Working system of
operators
Absent Too many phone calls
Out of office Lunchtime
Not at desk Absent

Makes
customer
Not giving receiving wait
party’s coordinates Does not
Lengthy talk understand
Does not know customer
Complaining organization well
Leaving a Takes too much time to

message explain
Customer Operator

39
Reasons why customers have to wait

(12-day analysis with check sheet)

40
Pareto Analysis: reasons why customers have to wait.

Frequency Percentage
300 87.1%
250 71.2%
200
49%
150
100
0%
A B C D E F

41
Ideas for improvement
1. Taking lunches on three different shifts

2. Ask all employees to leave messages when leaving desks
3. Compiling a directory where next to personnel’s name
appears her/his title

42
Results of implementing the recommendations

Before… After…
Frequency Percentage Frequency Percentage
100%
300 87.1% 300
71.2%
Improvement
200 200
49%
100 100 100%
0% 0%
A B C D E F B C A D E F

43
Control charts
• It a graphical tool for monitoring the activity of an ongoing
process.
• Center line: It is the average value or center of the process.
It can be a target or desired value.
• Control limits: These are two extreme values below and

above the center line. These limits are chosen such that the
probability of sample falling outside these limits of a
process under control is 0.26% (3σ in a normal value).
• It helps management to compare process with target value.

• It helps to determine when to take corrective action and
type of remedial action.
44
24
UCL = 23.35
21
Number of defects
18 c = 12.67
15
12
6
LCL = 1.99
3
2 4 6 8 10 12 14 16
Sample number

45
In order to measure variation we need…

The average (mean) of the observations:
N
1
X 
N
x
i 1
i
The standard deviation of the observations:
 i
( x  X ) 2
  i 1
N
46
Capability Index (Cpk)

It shows how well the performance measure fits
the design specification based on a given
tolerance level.
A process is k capable if
X  k  UTL and X  k  LTL
UTL  X X  LTL
1 and 1
k k

47
Capability Index (Cpk)

Another way of writing this is to calculate the
capability index:
 X  LTL UTL  X 
C pk  min  , 
 k k 
Cpk < 1 means process is not capable at the k level
Cpk >= 1 means process is capable at the k level

48
• We say that a process is accurate if its mean

is close to the target T.
• We say that a process is consistent if its
standard deviation is low.

49
Two Types of Control Charts

X/R Chart
This is a plot of averages and ranges over time
(used for performance measures that are variables)
p Chart
This is a plot of proportions over time (used for
performance measures that are yes/no attributes)

50
Statistical Process Control with p Charts
When should we use p charts?
1. When decisions are simple “yes” or “no” by inspection
2. When the sample sizes are large enough (>50)

51

Let’s assume that we take t samples of size n …
total number of "defects"
p
(number of samples)  (sample size)
p (1  p )
sp 
n
UCL  p  zs p
LCL  p  zs p

52

80 1
p   0.066
6  200 15
0.066(1  0.066)
sp   0.017
200
UCL  0.066  3 0.017  0.117

LCL  0.066  3 0.017  0.015
53
UCL = 0.117
p = 0.066
LCL = 0.015

54
Statistical Process Control with X/R Charts
When should we use X/R charts?
1. It is not possible to label “good” or “bad”
2. If we have relatively smaller sample sizes (<20)
Take t samples of size n (sample size should be 5 or more)
1 n
X   xi
n i 1
X is the mean for each sample
R  max{xi }  min {xi }

R is the range between the highest and the lowest for each sample

55
Statistical Process Control with X/R Charts

1 t
X  Xj 1 t
R   Rj
t j 1 t j 1
X is the average of the averages. R is the average of the ranges
UCLX  X  A2 R UCLR  D4 R
LCLX  X  A2 R LCLR  D3 R
Read A2, D3, D4 from Table

56
Example: SPC for bottle filling…

57
Then,
X  12.00
R  0.15
UCLX  12.00  0.58  0.15  12.09

LCLX  12.00  0.58  0.15  11.91
UCLR  2.11 0.15  1.22

LCLR  0  0.15  0

58
The X Chart
UCL = 12.10
X = 12.00
LCL = 11.90

59
The R Chart
UCL = 0.32
R = 0.15
LCL = 0.00

60
Attributes control charts

Attributes: An attribute is a quality characteristics for which
control is required but cannot be measured in a numerical
value. It is measured in terms of occurrence of some
characteristics defects. E.g. taste of food items, diameter of
shaft within the limit or not, functioning or not.
Advantages Disadvantages
1. Some quality characteristics 1. It does not state the degree to
cannot be measured in which specification are met or
variables. not.
2. Attribute charts provide less
2. Easy, used for limitations such information on performance of
as time, money, worker the process.
availability. 3. Attributes charts cannot indicate
3. Few charts cannot be used in the upcoming conditions (analysis
comparison to variable chart. of patterns).
4. Effective at plant level 4. Attribute charts require larger
sample sizes than variable charts.

61
Acceptance Sampling
It is a process of inspecting the product to find out whether it confirms to the
specification or not by taking samples.
It can be performed on incoming materials, components, sub-assemblies, in-
process operations or final product inspection.
It is used when transferring products between suppliers and manufacturers ,
manufacturer and customer or between departments or divisions.
An acceptance criteria must be defined so as to satisfy both customer and
supplier. The supplier wishes for all lots to be accepted. The customer wishes
no lots that contain defective items.
3 alternatives
• Accept the lot without additional inspection.
• Control 100% of the products.
• Acceptance sampling (use one or more samples to find the information
about the lot).

62
Advantages Disadvantages
1. If the inspection is 1. Less information about
destructive, 100% the product and the
inspection is not feasible. process.
2. Sampling is more 2. Risk of rejecting ‘good’
economical and causes lots or accepting ‘poor’
less damages due to lots.
handling. 3. Needs more time and
3. Sampling reduces effort in planning and
inspection error. documentation.
4. Sampling provides strong
motivation to improve
quality.
5. Sampling require less
resource and time
63
Risk and quality level

1. Producer’s risk (α): This is the risk associated with rejecting a lot of
‘good’ quality.
2. Consumer’s risk (β): This is the risk of accepting lot of ‘poor’
quality.
3. Acceptance Quality Level (AQL): It is given by maximum
percentage of non-conforming items in a lot that can be
considered acceptable.
4. Limiting Quality Level (LQL): It is given by the percentage of non-
conforming items in a lot that can be considered unacceptable.
We state that the producer’s risk is 10% for an AQL of 2%. It means
that we consider batches that are 2% non-conforming to be good and
prefer to reject such batches no more than 5% of time.

64
Sampling Plans
Single Sampling Plan: The information obtained from one sample is used to
make a decision to accept or reject the lot.
N = lot size, n = sample size, c = acceptance number
A random sample of size n is selected from the batch with N items. If the
number of non-conforming items is less than or equal to c, then the batch is
accepted otherwise rejected.
Double Sampling Plan: A double sampling plan involves making a decision to

accept the lot, reject the lot, or take a second sample.
N = 500, n1 = 40, c1 = 1, r1 = 4;
n2 = 60, c2 = 5, r2 = 6.
From the first sample, if defect ≤ 1, the lot is accepted. If defect ≥ 4, the lot is
rejected. If defect is between 1 and 4, we take second sample.
From second sample, if combined defect ≤ 5, the lot is accepted. If combined
defect ≥ 6, the lot is rejected.

65
Multiple Sampling Plan: It is the extension of double sampling

plan. Many samples are taken if no interference can be taken
from first or second sample.
N = 4000, n1 = 20, c1 = 0, r1 = 3;
n2 = 20, c2 = 1, r2 = 4;
n3 = 20, c3 = 4, r3 = 5.
Comparison:
1. Single sampling plan is the most simple one.
2. Administrative costs are the least for single sampling plan.
3. On average, the number of items inspected is higher for
single plan (higher inspection cost).
4. More information can be found with single sampling plan.

66
Quality Circle Organization

8-10 members
Same area
Supervisor/moderator
Training
Presentation Group processes
Implementation Data collection
Monitoring Problem analysis
Problem
Solution Identification
Problem results List alternatives
Consensus
Brainstorming
Problem Analysis
Cause and effect
Data collection and
analysis

67
Is 99% Quality Good Enough?
• 22,000 cheques will be deducted from the wrong

bank accounts in the next 60 minutes.
• 20,000 incorrect drug prescriptions will be written in

the next 12 months.
• 12 babies will be given to the wrong parents each

day.

68
Six Sigma Quality

The objective of Six Sigma quality is 3.4
defects per million opportunities!
(Number of Standard Deviations) 3 Sigma 4 Sigma 5 Sigma 6 Sigma
0.0 2700 63 0.57 0.002
0.5 6440 236 3.4 0.019
1.0 22832 1350 32 0.019
1.5 66803 6200 233 3.4
2.0 158,700 22800 1300 32

69
Six Sigma
• A process for developing and delivering near perfect
products and services
• Measure of how much a process deviates from
perfection
• 3.4 defects per million opportunities
• Champion
– an executive responsible for project success

70
Six Sigma
• Black Belt
– project leader
• Master Black Belt
– a teacher and
mentor for Black
Belts
• Green Belts
– project team
members

71
Six Sigma: DMAIC
DEFINE MEASURE ANALYZE IMPROVE CONTROL
67,000 DPMO
cost = 25% of
sales 3.4 DPMO

72
Industrial Engineering and Management, BME III/II 73

Quality Management

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Quality Management

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Chapter 8

‘The problem is at the top; management is the problem’

“Quality is everyone's responsibility.”

Industrial Engineering and Management, BME III/I

• Qualitative analysis has been from time immemorial

Industrial Engineering and Management, BME III/I

• Foreman Quality Control Period (18th – 19th century):

Industrial Engineering and Management, BME III/I

• Statistical Quality Control Period (1940 – 1960): The

Industrial Engineering and Management, BME III/I

• Total Quality Phase (1970s): The participation of

Industrial Engineering and Management, BME III/I

• Deming and Juran outlined the principles of Quality

Industrial Engineering and Management, BME III/I

Industrial Engineering and Management, BME III/I

Industrial Engineering and Management, BME III/I

Industrial Engineering and Management, BME III/I

Industrial Engineering and Management, BME III/I

Industrial Engineering and Management, BME III/I

Meaning of Quality: A Final Perspective

Industrial Engineering and Management, BME III/I

Producer’s Perspective Consumer’s Perspective

Quality of Conformance Quality of Design

Production • Conformance to • Quality characteristics Marketing

Industrial Engineering and Management, BME III/I

Industrial Engineering and Management, BME III/I

Industrial Engineering and Management, BME III/I

System of Profound Knowledge

Industrial Engineering and Management, BME III/I

1. Create constancy of purpose

6. Institute worker training

Industrial Engineering and Management, BME III/I

11. Remove numerical quotas

Industrial Engineering and Management, BME III/I

Deming Wheel: PDCA Cycle

Industrial Engineering and Management, BME III/I

Deming’s deadly disease

Industrial Engineering and Management, BME III/I

Quality Trilogy Process

Industrial Engineering and Management, BME III/I

Industrial Engineering and Management, BME III/I

Crosby has a 14 step plan to help business

Industrial Engineering and Management, BME III/I

7. Ad hoc committee for the zero defects

Industrial Engineering and Management, BME III/I

• Commitment to quality throughout organization

Industrial Engineering and Management, BME III/I

Statistical Process Control

• TQM tools (statistical

Industrial Engineering and Management, BME III/I

Industrial Engineering and Management, BME III/I

TV SET MODEL 1013

Industrial Engineering and Management, BME III/I

Industrial Engineering and Management, BME III/I

Industrial Engineering and Management, BME III/I

Causes of poor quality

Industrial Engineering and Management, BME III/I

Cause and effect diagram

Incorrect specifications Lack of concentration Tooling problems

Improper methods Inadequate training Old / worn

Environment Materials Process

Industrial Engineering and Management, BME III/I

Case: shortening telephone waiting time…