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141107 PRODUCTIVITY AND QUALITY MANAGEMENT

Productivity
• • Measurement of output related to inputs Yield – Ratio

Project – Exercise – given on 1st lecture ( 30 ) to be done individually. Quality
• Different definitions – o Conventional – one that wears well, well constructed and will last for a long time.Therefore, will meet cost requirement

We will deal with various other definitions later – Before that let us try & trace the History of Quality Management History of Quality Management
The issue of Quality of Goods and services is not new. Throughout history – say 1700 BC King Hummurabi of Babylon – introduced the concept of product quality and liability into the building industry declaring o “.. if the building falls into pieces and the owner is killed, then the builder shall also be put to death. If the owner’s children die, then the builder’s children also die.” Industrial revolution: o Early-mid 19th century o Many technological advances – (Do you remember our discussion on “The Race”) o Invention of steam engine o Standardization of engineering components as screw threads o Advent of mass production – early 20th century o Increased demand / control of product quality o 1920-30 – Walter Steward at AT&T – Bell Laboratories - Used statistics for Industrial process

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His book “The economic control of Quality of manufactured products” was considered as landmark contribution to the efforts to improve the quality of mfd. Goods. He reported • Variations could be understood through application of simple statistical tools, such as sampling and probability analysis. His basis was “Use of Statistics to processes” to provide an early warning and allow products to be adjusted prior to producing defective products”. He developed “control Charts” to track performance over time.

o 1920 o The concept of quality emerged in 1920’s in the USA. o W. Edwards Deming: (disciple of Schewart) - Went one step ahead. • By shifting the theory of checking Q by statisticians from Inspection stage to Inception stage. - Deming was regarded as father of TQM. - He believed Q concerns everybody o Before WW II, US / Europe felt Deming’s theory as a useless pursuit. They were more concerned with “cutting costs” and selling. All their management attention was pointed towards reduction in human labor. o Now, Japan (post WWII) was a shattered economy. Gen. McArthur (Governor of Japan) brought Deming to Japan, o The Japanese listened – felt it was a natural way “to prevent waste” o Their willingness to heed boosted Deming’s exhortation. o 1954 o Again in 1954 JURAN visited Japan, helped Japanese manufacturers restructure – gave way to tremendous exports potential – thrust upon them Q concepts and tools – earlier these concepts were designed primarily for factory – later became the basis for an overall “Management process” o 1979 - Philip Crosby (started a Quality Consultancy firm) • He said “Quality is Free” – Zero defects • Product should be in “complete conformance to defined Q parameters and not AQL – • Quality is achieved by prevention, not appraisal

o 1970-80 - Japan hit the globe (with Deming & Jurans) ideas o Japanese created the leading edge in manufacturing - First with basic technology (steel, aluminum, ship building - Then, with increasingly sophisticated products like motorcycles, cameras, TVs, semi conductors, appliances - They invaded the world market - They told the world “Throw traditional thinking – face bitter moments of truth” • For example, JIT (Taichi oheno / Shgeo Shingo) is a revolutionary shift in paradigm • Reverses workflow from Supplier – Manufacturer – customer to Customer – Manufacturer – Supplier. • This shall strip away all “Inventories” o Genuchi Taguchi - Cut the “noise” level at design stage – to get uniformity from product to product o Kauro Ishikawa - “Fish Bone diagram” (identifying possible causes of problems) - And, Quality Circles. - Important: • Inverts traditional management thinking – through bottom up problem solving. o 1980 - NBC, USA • “If Japanese can do it why can’t we?” • Struck a public chord • And unlike 1970s – US companies took Quality serious • By 1990 virtually all US companies were on a quality revolution o E.g. Motorola – six sigma concept o Statistical improvement in output o Everything that is done has to be 99.99997% correct o Later – six sigma – 0.334% - defect not > 1ppm. o India - Not lagging behind – due competitive pressures, -M&M, C&G, Amtrex, Stanchart, HLL, Philips (I), Godrej, many others.

(Q is no more a tool for competitive advantage – A threshold limit and a Qualifier)

-------------------------------------------------------------------------------------Definitions:
• Webster dictionary o Quality is physical or non-physical. Characteristics that constitutes the basic nature of a thing or one of its distinguishing attributes / features Radford: o Characteristics or grade or combination of characteristics which distinguishes one article from another, or goods of one manufacturer from competition, or one grade for product from a certain factory from another grade out by the same factory. Juran o Quality is fitness for use Grant & Leavenworth: o It is convenient to think of all matters related to Q of manufactured product in terms of these functions of --specification, production and inspection Philips Crosby o Quality is conformance to requirement o Quality is respect to Humanity Deming o Quality should be aimed at the needs of the consumer present and future Feigenbaum o Quality is the total product and service characteristics of marketing, engineering, manufacturing and maintenance through which the product and service in use will meet the expectation of the customer. Mizuno o Product quality encompasses those charactierstics which the product must p0ssess, if it is to be used in the intended manner Teguchi

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o Quality is the loss (from function variation and harmful effects) a product causes to society after being shipped, other than any losses caused by its intrinsic functions.

ISO 9000 o QA, all those planned and systematic actions necessary to provide adequate confidence that a product or service will satisfy given requirements for quality. American National Standards Institute o QC is the operational techniques and the activities which sustain a quality of a product or service that will satisfy given needs, also the use of such techniques and activities. o TQC is an effective system for integrating the quality development, quality maintenance, and quality improvement efforts of various groups in an organization, so as to enable marketing, engineering production and service at the most economical levels which allow full customer satisfaction. David Garvin (Harvard Business School) o Describes it as different purposes, stage(s) of product development, product develop type, type of product or process and company strategy. He talked about 5 approaches: • 1) Transendent approach: Q is recognized through learning and experience defined in terms of innate excellence • 2) Product based approach: Quality is precise and measurable, it can be ranked on various attributes and is an inherent part of the product • 3) User based approach: Q reflects personal view, reflected in consumer demand curves, in marketing quality is the ideal combination of attributes for maximizing consumer satisfaction. • 4) Manufacturing based approach: focus on engineering and manufacturing practices; quality is defined as conformance to specs, decreased costs by decreasing no. of deviations. • 5) Value based approach: Quality is defined as performance or conformation at an acceptable cost, “noion of “affordable excellence”.

Definitions of Quality Gurus (some more insights)
Give here to the students the Comparison table (handwritten) W. Edward Deming - Developed Juran’s “road map” to quality - 85% of quality problems are due to poor system - 15% only employees – Systems provides a common language - Heart of Q strategy is SQC – to identify special causes and common causes of variation - Categorized “Personnel performance evaluation” as “management by fear” - His 14 points – and 7 deadly sins are widely applauded

o 7 deadly sins:
        Lack of constancy of purpose Emphasis on short-term profits Evaluating performance, merit rating or annual review Mobility of management (commitment to the organization impacted?) Management by visible figures Excessive medical costs Excessive costs of liability Create and publish to all employees a statement of aims and purpose of the Company. Mgmt. must demonstrate constantly their commitment to this statement. Learn the new philosophy – by top M and everybody U/stand the purpose of inspection for improvement of processes and reduction of cost. End the practice of awarding business on the basis of price tag alone Improve constantly and forever the system of production and service Institute training (for skills). Teach and institute leadership Drive out fear, create trust and a climate for innovation Optimize toward the aims/purposes of Co. Eliminate exhortations for workforce - Eliminate quotas / MBO – instead learn capabilities of process and how to improve them. Remove barriers that rob people of pride / ownership Encourage education and self improvement Take action to accomplish the transformation.

o 14 points

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Joseph P. Juran
Quality is “fitness for use of customer’ Full management commitment to Q effort – not just a leadership role, but “hands on” involvement His “universal process of Q improvement” requires studying symptoms, diagnosing causes, and applying remedies” Juran’s Trilogy o Quality Planning:  Process, identify customers requirement from the product, service features the customer expect, the process that will delivery those products with correct attributes, and then facilitates the transfer of this know how to the producing arm of the organization

o Quality Control:  Process where product is actually examined and evaluated against original requirement – expectations of customer, problem detected – corrected.

o Quality improvement:  Process – sustaining mechanisms are put in place, so that quality can be achieved on a continuous basis. Includes, allocating resources, assigning people to pursue quality projects, and in general establishing a permanent structure to pursue Q and maintain the gains secured.

Juran recommended project-by-project improvements in which projects are selected on the basis of their projected return on investment.

Armand V. Feigenbaum
TQC – everyone’s responsibility Said: Responsibility should be beyond design and mfg. He abhorred poorly designed – inefficiently distributed, incorrectly marketed, etc.

- His 9 Ms of Quality
o Market o Money o Management o Men o Motivation o Materials o Machines and mechanism o Modern Info. Methods o Meeting product requirements

- His 10 principles
o General Management involvement o Serious consideration of employee ideas o Long term continuity o Involvement – Office – factory o Clear, simple programs o Careful initial preparation o Purposeful involvement o Fresh, relevant o Line operation leadership o Company wide QC

Kaoru Ishikawa
Customers’ view of product performance and producer’s view His 6 principles are: o Quality first o Consumer orientation o Breaking down the barrier of sectionalism o Utilization of statistical method o Participatory management o X functional management He suggested the following tools o Cause – Effect o Stratification o Check Sheet o Histogram o Scatter diagram o Pareto charts o Graphs / SQC

Shigeo Shingo
Poka Yoke devices

Genichi Taguchi
System Design (primary) Secondary design (secondary) Tolerances design (tertiary)

Gravin’s 8 dimensions of quality:
• (shift the approach as product moves from design – manufacturing – market place. o 1. Performance: Industry reactions to objective characteristics (User) o 2. Features: “bells and whistles” or product /secondary to basic function and less central to user o 3. Reliability: Problem of product failing within a given period of time period, more relevant to durable goods o 4. Conformance: degree design / operational characteristics match specification; related to reliability; factory (defects); field (recalls – repairs) o 5. Durability: Meausre of product life; technology, amount of use before it deteriorates; repair costs, trade off between repairs and replacement – personal and economic cost) o 6. Serviceability: speed, courtesy, competency. Rapid repair with quality o 7. Aesthetics: subjective assessment of look, feel, or sound, individual preferences o 8. Perceived quality: individual measures, brand image, names often used when other info. Is not available. • To avoid confusion, Garvin suggested 3 step process to address quality from its own perspective o Use market resources to identify quality which connote quality to customers. o Translate these user-based characteristics into identifiable product attributes o Organize the manufacturing process to ensure products are o made to specs.

Determinants of Service Quality 1.
Reliability: • Performing the right service, at the right time, consistency, dependability 2. Responsiveness: • 3. Competence: Possessing skills / knowledge to perform 4. Access, approachability, ease, waiting time, hours of operations 5. Courtesy: politeness, respect, consideration, friendliness 6. Communication: language one can understand, listening, adjusting, explaining the subject, cost, and how problems will be handled. 7. Credibility: trustworthy, believable, honesty; company reputation, 8. 8. Security: freedom from danger, risk, or doubt, physical safety, financial security, confidentiality 9. Understanding the customer: efforts, his needs, his requirements, individual attention, recognizing the regular user Willingness / readiness to provide help

QUALITY FROM BUSINESS IMPERATIVES POINT OF VIEW
Historically, “hitting specs..” “fitness requirements. Also Crosby says this. The question is: Let us talk about specifications: There are numerical target of components/measures to run the business, and which a firm must make: e.g. part shall be X cm by Y cm, and order shall be processed within X days, hours, minutes etc. Does the customer really wants to know this? e.g. You go to a store to buy a set of tyres. The salesman tells you “this is the price, and the tires will last for 50000 miles” But it wears out after just 35000 miles – how do you as a customer feel? An emotion “south of delight” LET DOWN. Let us see another case of similar nature: You are shown to the same set of tires. The salesman tells you the price, and says the tires will last 25000 miles. But in goods shape, they last even up to 35000 miles. What would be your “feeling” here. ‘CUSTOMER DELIGHT” These are the same set of tires – same specifications. As a customer u r not worried about details (specs).. You just say, hee is the money, tell me how long the function will last? In the example above, your feel for the quality of tyres has changed dramatically. for use”, “conformance to

OWING TO THE TIRES PERFORMANCE – RELATIVE TO YOUR EXPLECATIONS. This leads us to a refinement of standard definition of quality: Quality is that which meets the customers expectations. Does this mean the definitions are wrong? NO. They are not. In final analysis: Question is what the customer says it is. Company makes quality judgment not on a detailed reading of suppliers operations specs, but on “Impressionist scale” e.g. Did you or did ou not given me what I thought I was paying you for? Did you or did you not meet my expectations? IF YOU DOUBT THIS, Consider how u make decisions. Exercise -- Take some product Now CONSIDER THE ROLE, expectations play in determining your level of satisfaction. Why meet expectations only? Why not > expectations? Let us take the example of: a LAMP “Which lamp is more on?” One can certainly go beyond expectations and this way you have delivered more of something. But this is not more of quality – but more of something else. That something else is “Value” – again customer perspective “The ratio of what I got to “What it cost me”. Value = Got/Cost (denominator) R we saying a firm has to provide or focus on “added value” And forget quality. The concept of “addl. Value” makes sense once we have got out quality house in order. This way Q becomes the foundation on which to build and deliver “additional value”.

FIVE PARADIGMS OF QUALITY
Evolved with time – emanating due to changes in technology, society, etc. 1. Custom Craft Paradigm: - Clear communication between the customer – craftsman - Focus on product and product performance relative to demands - Made exactly the way customer wants (tailor, bank loans, furniture) 2. Mass Production P: - Post mechanization – focus on production rates. - No direct involvement of customer, although the product and production is defined with customer in mind - Product performance low (e.g. rework, repair/scrap) - Delivery time low - Sales from stock (labor intensive in some cases) – e.g. readymade garments, auto parts. 3. Statistical QC paradigm: Mass production may be, but focus is on process – together with mechanized production SPC applied – to obtain less generation of scrap / rework and production cost per unit lo E.g. auto parts, electronic components, pharma)

4. TQM paradigm Mass production + SQC – focus on customer + supplier Production lines may be same, but customer lays a part in product definition, creation and performance evaluation. Key tenets: o Employee involvement, empowerment, customer focus, continuous improvement, top management commitment, training, team work, -- result – high quality product, low cost, faster delivery o Rework, scrap low o Customer tells, firm produces – reactive strategies

5. Techno craft paradigm - Frontier of quality? – requires high level of product and process flexibility, requires integration of man-machine (autocad etc). - Each unit is designed and say customer built (software, apparel, auto etc.)

Types of Quality
Quality of design, Quality of conformance, quality of performance 1. Quality of design: - Focus on development of products that are suited to customer needs at a given cost QoD begins with consumer response, sales call analysis and leads to determination of product that meets customer requirement This is followed by development of adequate specs. This process demands effective cross-pollination of ideas among marketing, sales, services, manufacturing, R&D, Customer sales. Service call analysis is really the heart of the process. Customer – prognosis of needs present and future sales calls – Idea of how people purchase. Service calls – deals with problems users have with the product performance. 2. Quality of conformance - Refers to the extent to which a firm and its suppliers can produce products with a predictable degree of uniformity and dependability, at a given cost in keeping with quality requirement determined in the QoD study. Once the specs are decided at QoD stage, it is followed by organization installing a Kaizen (continuous improvement) process. 3. Quality of Performance: - Studies focus on determining how the Quality characteristics determined in QoD (improved and innovated) and Quality of performance are performing the market place. The major tools used are study of after sales service, sales callanalysis These tools evaluate why consumers LIKE or DISLIKE a product.

Bring here the chart of Quality Evolution (p9 of written draft)