CHAPTER FIVE

QUALITY MANAGEMENT AND CONTROL

Complied by Asmamaw T. (PhD)

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 Introduction
 Quality is a very frequently used term by almost all of us.

However, it is very difficult to define quality in a unique

way.
 Some believe that quality products are invariably

costly products.
 For some quality signifies the degree of perfection.

 But technically speaking, Quality is the totality of

features and characteristics of a product or service that

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bear on its ability to satisfy stated or implied needs.
 It is not always true that a product with high quality will also be costly.

 Conversely, many times an expensive product is low in quality.

 Example, A cup of tea or coffee taken in a highway cafe may taste

better than what one gets in a five star hotel-though the cost in the
two places will be remarkably different.
 A high quality product is often expensive because more time and efforts go

into manufacturing such product with its close tolerances and fewer defects.
 Product quality level also reflects the image of the company that produces it.

 For example, some companies in the electronic fields (e.g. Philips, Sony,

etc.) leave an imprint on users’ minds as ‘first class companies’ while

others are not seen in favorable lights and are considered as mediocre
companies.
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There are many definitions of quality:
1. The operation’s view of quality
 Here we define it as ‘consistent conformance to customers’
expectations’.
 The use of the word ‘conformance’ implies that there is a need to meet a
clear specification.
 Conformance to specification means producing a product or providing a
service to its design specification.
 Ensuring a product or service conforms to specification is a key operations
task.
 ‘Consistent’ implies that conformance to specification is not an ad hoc
event but that the product or service meets the specification because
quality requirements are used to design and run the processes that produce
products and services.
 The use of ‘customers’ expectations’ recognizes that the product or service
must take the views of customers into account, which may be influenced
by price.
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 2. Customers’ view of quality
 Past experiences, individual knowledge and history will all
shape customers’ expectations.
 Furthermore, customers may each perceive a product or
service in different ways.
 One person may perceive a long-haul flight as an exciting part
of a holiday; the person on the next seat may see it as a
necessary chore to get to a business meeting.
 So quality needs to be understood from a customer’s point of
view because, to the customer, the quality of a particular
product or service is whatever he or she perceives it to be.

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 Also customers may be unable to judge the ‘technical’
specification of the service or product and so use
substitute measures as a basis for their perception of
quality.
For example, a customer may find it difficult to judge the
technical quality of dental treatment, except insofar as it
does not give any more trouble.
The customer may therefore perceive quality in terms the
clothing and behavior of the dentist and technician, décor
of the surgery, and how they were treated.

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 Reconciling the operation’s and the customer’s views of
quality
The operation’s view of quality is concerned with trying to
meet customer expectations.
The customer’s view of quality is what he or she perceives
the product or service to be.
To create a unified view, quality can be defined as the
degree of fit between customers’ expectations and
customer perception of the product or service.
Using this idea allows us to see the customers’ view of
quality of (and, therefore, satisfaction with) the product or
service as the result of the customers comparing their
expectations of the product or service with their perception
of how it performs.
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 This is not always straightforward;
Also, if the product or service experience was better than
expected then the customer is satisfied and quality is
perceived to be high. If the product or service was less
than his or her expectations then quality is low and the
customer may be dissatisfied.
If the product or service matches expectations then the
perceived quality of the product or service is seen to be
acceptable.

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 Both customers’ expectations and perceptions are
influenced by a number of factors: some of which cannot
be controlled by the operation and some of which, to a
certain extent, can be managed.
The following figure shows some of the factors that will
influence the gap between expectations and perceptions.
This model of customer-perceived quality can help us
understand how operations can manage quality and
identifies some of the problems in so doing.
The bottom part of the diagram represents the operation’s
‘domain’ of quality and the top part the customer’s
‘domain’.
These two domains meet in the actual product or service,
which is provided by the organization and experienced by
10 the customer.
 Within the operation’s domain, management is responsible
for designing the product or service and providing a
specification of the quality to which the product or service
has to be created.
Within the customer’s domain, his or her expectations are
shaped by such factors as previous experiences with the
particular product or service, the marketing image
provided by the organization And word-of-mouth
information from other users.
These expectations are internalized as a set of quality
characteristics.

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 Diagnosing quality problems
The above figure shows how quality problems can be
diagnosed.
If the perceived quality gap is such that customers’ perceptions
of the product or service fail to match their expectations of it,
then the reason (or reasons) must lie in other gaps elsewhere in
the model as follows.
Gap 1: The customer’s specification–operation’s specification
gap. Perceived quality could be poor because there may be a
mismatch between the organization’s own internal quality
specification and the specification which is expected by the
customer.
For example, a car may be designed to need servicing every
10,000 kilometres but the customer may expect 15,000-
kilometre service intervals.
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Gap 2: The concept–specification gap: Perceived quality could
be poor because there is a mismatch between the product or
service concept and the way the organization has specified
quality internally.
For example, the concept of a car might have been for an
inexpensive, energy-efficient means of transportation, but the
inclusion of a climate control system may have both added to
its cost and made it less energy-efficient.
Gap 3: The quality-specification–actual-quality gap: Perceived
quality could be poor because there is a mismatch between actual
quality and the internal quality specification (often called
‘conformance to specification’).
 For example, the internal quality specification for a car may be that
the gap between its doors and body, when closed, must not exceed
7 mm. However, because of inadequate equipment, the gap in
reality is 9 mm.
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 Gap 4: The actual-quality–communicated-image gap: Perceived
quality could be poor because there is a gap between the
organization’s external communications or market image and
the actual quality delivered to the customer. This may be
because the marketing function has set unachievable
expectations or operations is not capable of the level of
quality expected by the customer.
For example, an advertising campaign for an airline might

show a cabin attendant offering to replace a customer’s shirt

on which food or drink has been spilt, whereas such a service
15 may not in fact be available should this happen.
 Why More Concern to Quality today?
 Cost of poor quality which cause:

 Reworking

 Performance failure

 Maintenance requirement (time & cost)

 Customer dissatisfaction

 Damage to a society

 Loss of market share

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 Quality Misconception
Better quality requires higher cost
Quality is innately perceived as separating good from bad.
Increased quality can be achieved through investment in
technology
Quality is confined to the product and therefore
manufacturing process
Quality is responsibility of quality manager and his
department.
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 INSPECTION- What is it?
 Inspection-

 is the art of determining actual conformity of

product/service to the specifications laid down for it.

 It is a tool to control the quality of a product.

 Thus, inspection means checking the acceptability of

the manufactured product.

 Those, it measures the quality of a product or service in

terms of predefined standards.

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TYPES OF INSPECTION
 Inspection can be either Preventive or Corrective.

 Preventive Inspection- concerned with discovering defects, the cause of defects,

and helping in the removal of such causes.

 Corrective (remedial) Inspection- deals with sorting out good parts from the bad

ones.
 Its primary purpose is to discover the defective parts that have already

been manufactured and prevent their use in the final product.

 Many firms use both types of inspection, but the emphasis is often on preventive

inspection.
 The idea is to prevent the inferior parts from further processing down
the production line.

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 This, in turn, will reduce the labor cost.
 PURPOSE OF INSPECTIONS

It separates defective components from non-defective ones and thus

ensures the adequate quality of products.

It locates the defects in raw materials and flaws in process which

otherwise cause problems at the final stage.

It prevents further work being done on semi-finished products already

detected as spoiled.

It ensures that the product works without hurting anybody.

It detects sources of weakness and trouble in the finished products and

thus checks the work of designers.

It builds up the reputation of the company with the customers by

reducing the number of complaints from them.
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 STASTICAL QUALITY CONTROL (SQC)
 Inspecting all the items is very time consuming and costly affair.

 An alternative to this is statistical control which is a type of

inspection based on probability and mathematical techniques.

 In many instances it may be used in place of ordinary inspection

procedures.
 Its objective, like that of inspection, is to control quality level of

product without doing 100 percent inspection.

 SQC uses statistical methods to gather and analyze data in the

determination and control of quality.

 It is based on sampling, probability, and statistical inference,

21  i.e., judging an entire lot by the characteristics of a sample.

 STISTICAL QUALITY CONTROL (SQC)..,
 The question often raised is-

‘whether a sample always reflects the true characteristics of the

production lot’.
 The answer is No.

 However, the sampling may be the only way to estimate the quality

of a lot.
 For example, the only way to determine the life of an electric

bulb is to burn it until it burns out.

 In this, inspection is destructive, and sampling is obviously

required if the product is to be marketed.

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 ACCEPTANCE SAMPLING
 In a nutshell, acceptance sampling is a system that determines

whether an entire lot of goods should be accepted or rejected.

 In the simplest case of acceptance sampling, we draw a random

sample of size n from the total lot N and decide whether or not
to accept the entire lot based upon the sample.
 I.e. if the sample signals to reject the lot, it may then either-

 be subjected to 100 % inspection, sorting out bad parts, or

 to be returned to the original supplier, which may be a vendor or

another department within the organization.

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 Procedures for Quality Management
It is usually seen as the most important contribution that
operations management can make to the customer’s
perception of quality. We shall examine how it can be
achieved in the remainder of this chapter by describing
quality management as six sequential steps.
Step 1 Define the quality characteristics of the product or
service.
Step 2 Decide how to measure each quality characteristic.
Step 3 Set quality standards for each quality characteristic.
Step 4 Control quality against those standards.
Step 5 Find and correct causes of poor quality.
Step 6 Continue to make improvements.
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 Step 1 Define the quality characteristics of the product or
service: Much of the ‘quality’ of a product or service will
have been specified in its design. But not all the design
details are useful in controlling quality.

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 Step 2 Decide how to measure each quality characteristic.
These characteristics must be defined in such a way as to enable
them to be measured and then controlled.
This involves taking a very general quality characteristic such as
‘appearance’ and breaking it down, as far as one can, into its
constituent elements.
‘Appearance’ is difficult to measure as such, but ‘colour match’,
‘surface finish’ and ‘number of visible scratches’ are all capable of
being described in a more objective manner.
They may even be quantifiable.
Other quality characteristics pose more difficulty. The ‘politeness’
of airline staff, for example, has no objective quantified measure.
Yet operations with high customer contact, such as airlines, place a
great deal of importance on the need to ensure politeness in their
staff.
In cases like this, the operation will have to attempt to measure
28 customer perceptions of politeness.
 Variables and attributes
The measures used by operations to describe quality
characteristics are of two types: variables and attributes.
Variable measures are those that can be measured on a
continuously variable scale (for example, length, diameter,
weight or time).
Attributes are those which are assessed by judgement and
are dichotomous, i.e. have two states (for example, right
or wrong, works or does not work, looks OK or not OK).
The following table categorizes some of the measures
which might be used for the quality characteristics of the
car and the airline journey.

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Step 3 – Set quality standards
 When operations managers have identified how any quality characteristic
can be measured, they need a quality standard against which it can be
checked; otherwise they will not know whether it indicates good or bad
performance.
 The quality standard is that level of quality which defines the boundary
between acceptable and unacceptable.
 Quality judgements can be difficult. If one airline passenger out of every
10,000 complains about the food, is that good because 9,999 passengers
out of 10,000 are satisfied? Or is it bad because, if one passenger
complains, there must be others who, although dissatisfied, did not bother
to complain?
 And if that level of complaint is similar for other airlines, should it regard
its quality as satisfactory?

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 Step 4 – Control quality against those standards
After setting up appropriate standards the operation will then

need to check that the products or services conform to those

standards: doing things right, first time, every time. This
involves three decisions:

1. Where in the operation should they check that it is

conforming to standards?

2. Should they check every product or service or take a sample?

3. How should the checks be performed?

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 Where should the checks take place?
At the start of the process incoming resources may be
inspected to make sure that they are to the correct
specification.
For example, a car manufacturer will check that
components are of the right specification.
A university will screen applicants to try to ensure that they
have a high chance of getting through the programme.
During the process checks may take place before a
particularly costly process, prior to ‘difficult to check’,
immediately after a process with a high defective rate,
before potential damage or distress might be caused, and so
on.
Checks may also take place after the process itself to ensure
33 that customers do not experience non-conformance.
Check every product and service or take a sample?
While it might seem ideal to check every single product or
service, a sample may be more practical for a number of
reasons.
It might be dangerous to inspect everything. A doctor, for
example, checks just a small sample of blood rather than taking
all of a patient’s blood!
The characteristics of this sample are taken to represent those of
the rest of the patient’s blood.
Checking everything might destroy the product or interfere with
the service. Not every light bulb is checked for how long it lasts
– it would destroy every bulb. Waiters do not check that
customers are enjoying the meal every 30 seconds.
Checking everything can be time-consuming and costly. It may
not be feasible to check all output from a high-volume machine
34 or to check the feelings of every bus commuter every day.
 How should the checks be performed?
In practice most operations will use some form of sampling to
check the quality of their products or services. The decision then is
what kind of sample procedure to adopt.
There are two different methods in common use for checking the
quality of a sample product or service so as to make inferences
about all the output from an operation.
Both methods take into account the statistical risks involved in
sampling.
The first, and by far the best known, is the procedure called
statistical process control (SPC). SPC is concerned with
sampling the process during the production of the goods or the
delivery of service. Based on this sample, decisions are made as to
whether the process is ‘in control’, that is, operating as it should be.
The second method is called acceptance sampling and is more
concerned with whether to regard an incoming or outgoing batch
35 of materials or customers as acceptable or not.
 Cost of Quality
 Cost of Achieving Good Quality
Prevention costs
costs incurred during product design
Appraisal costs
costs of measuring, testing, and analyzing
 Cost of Poor Quality
Internal failure costs
include scrap, rework, process failure,
downtime, and price reductions
External failure costs
include complaints, returns, warranty claims,
liability, and lost sales

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 Prevention Costs
 Quality
Trainingplanning
costs costs

 costs
costs of
of developing
developing and
and implementing quality
putting on quality management
training programsprogram
for
 Product-design costs
employees and management
 costs of designing products with quality characteristics
 Information costs
 Process
 costs ofcosts
acquiring and maintaining data related to quality, and
 costs expended
development to make
and sure
analysis ofproductive processperformance
reports on quality conforms to quality
specifications

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 Appraisal Costs
 Inspection and testing
costs of testing and inspecting materials, parts,
and product at various stages and at end of
process
 Test equipment costs
costs of maintaining equipment used in testing
quality characteristics of products
 Operator costs
costs of time spent by operators to gather data
for testing product quality, to make equipment
adjustments to maintain quality, and to stop work
to assess quality

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 Internal Failure Costs
 Process
 Scrap costs downtime costs
costs of poor-quality
costs products
of shutting down productive process to fix
thatproblem
must be discarded,
including labor, material, and
 Price-downgrading
indirect costs costs
 Rework costs
costs of discounting poor-quality products—that is,
costs of fixing
selling defective
products as “seconds”
products to conform to quality
specifications
 Process failure costs
costs of determining why
production process is
producing poor-quality
products

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 External Failure Costs
 Customer complaint costs
costs of investigating and
satisfactorily responding to a
customer complaint resulting
from a poor-quality product
 Product return costs
costs of handling and
replacing poor-quality
products returned by
customer
 Warranty claims costs
costs of complying with
product warranties
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 Product liability costs
litigation costs
resulting from product
liability and customer
injury
 Lost sales costs
costs incurred because
customers are
dissatisfied with poor-
quality products and
do not make
additional purchases
 Measuring and Reporting Quality Costs
 Index numbers
ratios that measure quality costs against a base
value
labor index
 ratio of quality cost to labor hours
cost index
 ratio of quality cost to manufacturing cost
sales index
 ratio of quality cost to sales
production index
 ratio of quality cost to units of final product

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 Total Quality Management

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 Why TQM?
Ford Motor Company had operating losses of $3.3
billion between 1980 and 1982.
Xerox market share dropped from 93% in 1971 to 40%
in 1981.
 Attention to quality was seen as a way to combat the
competition.

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 TQM: A “Buzzword” Losing Popularity
For many companies, the term TQM is associated with
corporate programs (mid 1980s ~ early 1990s) aimed
at implementing employee teams and statistical
process control.
Unfortunately, many companies were dissatisfied with
the perceived results of these programs, concluding
TQM does not work.
Question: Why were they dissatisfied?
Were they justified?

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 TQM
Total - made up of the whole
Quality - degree of excellence a product or service
provides
Management - act, art or manner of planning,
controlling, directing,….
Therefore, TQM is the art of managing the whole to
achieve excellence.

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 What’s the goal of TQM?

“Do the right things right the first time, every

time.”

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 Another way to put it
At it’s simplest, TQM is all managers leading and
facilitating all contributors in everyone’s two main
objectives:
 (1) total client satisfaction through quality products and
services; and
 (2) continuous improvements to processes, systems,
people, suppliers, partners, products, and services.

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 Productivity and TQM
Traditional view:
Quality cannot be improved without significant
losses in productivity.
TQM view:
Improved quality leads to improved productivity.

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 Basic Tenets of TQM
1. The customer makes the ultimate determination of quality.
2. Top management must provide leadership and support for
all quality initiatives.
3. Preventing variability is the key to producing high quality.
4. Quality goals are a moving target, thereby requiring a
commitment toward continuous improvement.
5. Improving quality requires the establishment of effective
metrics. We must speak with data and facts not just
opinions.

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 The three aspects of TQM

Tools, techniques, and training in their use

Counting for analyzing, understanding, and solving
quality problems

Customers Quality for the customer as a

driving force and central concern.

Shared values and beliefs, expressed by

Culture leaders, that define and support quality.

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Total Quality Management and Continuous Improvement

TQM is the management process used to make

continuous improvements to all functions.
TQM represents an ongoing, continuous commitment
to improvement.
The foundation of total quality is a management
philosophy that supports meeting customer
requirements through continuous improvement.

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 Continuous Improvement versus Traditional Approach
Traditional Approach Continuous Improvement
Market-share focus Customer focus
Individuals Cross-functional teams
Focus on ‘who” and “why” Focus on “what” and “how”
Short-term focus Long-term focus
Status quo focus Continuous improvement
Product focus Process improvement focus
Innovation Incremental improvements
Fire fighting Problem solving

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 Quality Throughout
“A Customer’s impression of quality begins with the initial
contact with the company and continues through the life of
the product.”
Customers look to the total package - sales, service
during the sale, packaging, deliver, and service after the
sale.
Quality extends to how the receptionist answers the
phone, how managers treat subordinates, how courteous
sales and repair people are, and how the product is
serviced after the sale.
“All departments of the company must strive to improve the
quality of their operations.”
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 Value-based Approach
Manufacturing Service Dimensions
Dimensions Reliability
Performance Responsiveness
Features Assurance
Reliability Empathy
Conformance Tangibles
Durability
Serviceability
Aesthetics
Perceived quality

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 The TQM System
Objective Continuous
Improvement

Principles Customer Process Total

Focus Improvement Involvement

Leadership
Elements Education and Training Supportive structure
Communications Reward and recognition
Measurement

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 If you have inquiries please contact me via:
Mob: +251(0)942200644
Mail: ase2034@gmail.com

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 The end !

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