Department of Business Administration

JUC-Male Branch

Dr. Ishaq Kalanther, PhD

Assistant Professor of Business Administration

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 Total Quality Management
Chapter 1

Introduction to Quality

MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 10E, © 2017 Cengage Publishing,
The Business Imperative
“The first job we have is to turn out quality
merchandise that consumers will buy and keep
on buying. If we produce it efficiently and
economically, we will earn a profit, in which
you will share.”
- William Cooper Procter

Quality, productivity, and cost remain imperatives for modern organizations.

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 Importance of Quality
Quality is uniquely positioned to accelerate
organizational growth through better execution
and alignment
Quality provides the voice of the customer
critical to developing innovative products and
services.
Quality can provide an organization with a
competitive edge
“No quality, no sales. No sales, no profit. No
profit, no jobs.”

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Quality Profile – Motorola, Inc.
Leader in the U.S. quality revolution during the
1980s
Pioneer in continual reduction of defects and
cycle times
Exceptional practices in managing human assets,
sharing data and information with employees,
customers, and suppliers, and aligning all its
business processes with key organizational
objectives.

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Quality Profile – PricewaterhouseCoopers
Public Sector Practice (Consultation firm)
Business advisory services, including risk
consulting, management consulting, and
technology consulting.
Four strategic goals focused on profit, workforce,
customers, and operations, which are aligned to
strategic objectives, strategic advantages, strategic
challenges, short- and long-term plans, and
performance projections/targets.
High customer loyalty and low workforce turnover
results.
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 Defining Quality
Perfection Fast delivery
Providing a good, usable product
Eliminating waste Consistency
Doing it right the first time
Delighting or pleasing customers

Total customer service and satisfaction

Compliance with policies and procedures
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Formal Definitions of Quality
Transcendent Perspective: excellence
Product Perspective: quantities of product
attributes
User Perspective: fitness for intended use
Value Perspective: quality vs. price
Manufacturing Perspective: conformance to
specifications
Customer Perspective: meeting or exceeding
customer expectations
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 Customers
Consumers
Ultimate buyers of goods and services
External customers
Business-to-business
Internal customers
Anyone who receives goods or services from
someone else within an organization

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 History of Quality Management
(1 of 4)

Ancient History
Zhou Dynasty in China (Empire/Ruler)
The Age of Craftsmanship
Skilled workers during the Middle Ages
Industrial Revolution
Early 20th Century
Separate quality departments
Ford Motor Company
Statistical methods and quality assurance
Professional societies and publications

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History of Quality Management
(2 of 4)

Post World War II

Evolution of quality management in Japan
W. Edwards Deming and Joseph Juran
U.S. “Quality Revolution”
Quality crisis around 1980
Growth of product quality awareness in
manufacturing industries
Rapid Growth in Business
Malcolm Baldrige National Quality Award (1987)
Books, consulting, training
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 History of Quality Management
(3 of 4)
From Product Quality to Total Quality Management
“Little Q” vs. “Big Q” and TQM Early Management
Failures
Cynicism (distrust) and disinterest
“No, TQM isn’t dead. TQM failures just prove that bad
management is still alive and kicking.”
Performance Excellence
Focus on customer value, organizational sustainability,
improvement of effectiveness and capabilities, and
organizational and personal learning
(Big Q is about a broad, strategic and complex perspective and little q is about a
micro aspect an operational issue such as quality control).

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History of Quality Management
(4 of 4)

Emergence of Six Sigma

a customer-focused, results-oriented approach to
business improvement
Globalization of Quality
National quality efforts
No significant differences among regions around the
world
Current and future challenges
Continue to apply the principles of quality and
performance excellence.
Quality is “a race without a finish line.”

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Growth of Modern Quality Management

Performance
Service
excellence
quality

Improved
product designs

Manufacturing
quality

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Contemporary Influences on Quality
Global Responsibility
Consumer Awareness
Globalization
Increasing Rate of Change
Workforce of the Future
Aging Population
Twenty-first Century Quality
Innovation

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 Quality in Marketing
Marketing and sales personnel are
responsible for determining the
needs and expectations of
consumers.

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 Quality in Product Design
 Product design and engineering
functions develop technical
specifications for products and
 Production processes to meet the
requirements determined by the
marketing function.

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 Quality in Purchasing
A purchasing agent should not
simply be responsible for low-cost
procurement, but should maintain a
clear focus on the quality of
purchased goods and materials.

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 Quality in Production
Planning & Scheduling

Poor quality often results from time

pressures caused by insufficient
planning and scheduling.
(Defects, stoppage of production, injuries, delivery delay, customer
loss, profit loss, unnecessary maintenance, high cost . . . .)

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Quality in Manufacturing and
Assembly

Both technology and

people are essential to
high-quality
manufacturing.

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Quality in Process Design

Manufacturing processes
must be capable of
producing output that meets
specifications consistently.

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Quality in Finished Goods Inspection and
Testing
The purposes of final product inspection
are to judge the quality of manufacturing,
to discover and help to resolve production
problems that may arise, and to ensure
that no defective items reach the customer.

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Quality in Installation and Service

Service after the sale is one of the

most important factors in
establishing customer perception of
quality and customer loyalty.
(After sale service and customer satisfaction is
very important to have customer loyalty)

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 Quality in Services
Service is defined as “any primary
or complementary activity that does
not directly produce a physical
product – that is, the non-goods
part of the transaction between
buyer (customer) and seller
(provider).”

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Critical Differences Between Service and
Manufacturing (1 of 2)
Customer needs and performance
standards are more difficult to identify
and measure
Services requires a higher degree of
customization
Output is intangible

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Critical Differences Between Service and
Manufacturing (2 of 2)
Services are produced and consumed
simultaneously.
Customers are often involved in actual process
Services are more labor-intensive than
manufacturing
Services handle large numbers of transactions

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Components of Service Quality
People
“If we take care of our people, they will
take care of our customers.”
Technology
Computers and information technology
E-commerce

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Quality in Business Support Functions
Finance and Accounting
Budgeting, cost of quality
Legal Services
Liability
Quality Assurance
Coaching and special studies

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 Competitive Advantage
Is driven by customer wants and needs
Makes significant contribution to business
success
Matches organization’s unique resources with
opportunities
Is durable and lasting
Provides basis for further improvement
Provides direction and motivation

Quality supports each of these characteristics

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 Quality and Business Results
Hendricks and Singhal study of quality award
winners
Performance results of Baldrige Award recipients
Example: The overall Net Promoter (NP) scores (a loyalty
metric defined by the level of repeat sales and referrals) for
MEDRAD, a manufacturer of medical imaging devices,
were consistently 60 percent or higher compared to the 50
percent or higher marks for other organizations
nationwide. MEDRAD’s global customer satisfaction
ratings using the NP system steadily increased from 50
percent to 63 percent, surpassing the best-in-class
benchmark of 50 percent.

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Quality and Personal Values
Personal initiative has a positive impact
on business success
Quality-focused individuals often exceed
customer expectations
Quality begins with personal attitudes
Attitudes can be changed through
awareness and effort (e.g., personal
quality checklists)

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Unless quality is internalized at the
personal level, it will never become
rooted in the culture of an organization.

Thus, quality must begin at a personal

level (and that means you!).

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Any Question

Thank You

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