10 -managing_quality

Managing qualityAlex Hill and Terry Hill

Learning objectives

• Explain what QUALITY is and why it is IMPORTANT

• Understand the STAGES involved in managing quality

• Apply alternative TOOLS and TECHNIQUES to improve quality conformance

• Critically evaluate the quality conformance LEVELS within a business and suggest IMPROVEMENTS

• Understand the alternative APPROACHES to managing quality

• Propose and substantiate quality IMPROVEMENTS within a given operational context

Lecture outline

• INTRODUCTION

• Defining QUALITY and its role

• Quality PHILOSOPHIES

• STEPS to effectively managing quality- TOOLS and TECHNIQUES

• APPROACHES to managing quality

• Critical REFLECTIONS

• SUMMARY

Defining quality and its role

Ensures that the actualservice or product CONFORMS to its INTERNALLY SPECIFIED

quality level

Defining quality and its rolePurpose of managing

> KEY IDEA

Quality conformance meansCONSISTENTLY delivering services and products in line with theirDESIGN SPECIFICATIONS, which, in turn need to reflect customer needs

CASE 10.1

THE IMPORTANCE OF MANAGING QUALITY

1.How do the changes in the fish batter specification affect customer SALES?

2.What are the market ORDER-WINNERS and QUALIFIERS?

CASE 10.1

Question

Answer

Affect sales

Order-winners

Qualifiers

• PRICE• Delivery SPEED• QUALITY conformance

• FISH is most significant part of purchase• Reduced QUALITY conformance- Will directly lead to LOSS of sales

• Product DESIGN- FISH taste and texture- CHIPS taste

THE IMPORTANCE OF MANAGING QUALITY

CASE 10.2 CHANGING THE QUALITY OFFERING

Question

Hampton Inn UPS

Changes

Benefits

CASE 10.2

• No quibble REFUND• EMPOWERED all staff to

give refund• Increased PRODUCT

specification- E.g. iron and board

• More satisfied EMPLOYEES

• Increased SALES• Identified further

service DEVELOPMENTS

• Strengthened customer RELATIONSHIPS

• Increased SALES• Identified further

service DEVELOPMENTS

• Increased SERVICE specification

- Solve questions and queries

CHANGING THE QUALITY OFFERING

Quality philosophies

•W Edwards DEMING

•Joseph M JURAN•Philip B CROSBY


Deming• Clear quality VISION• Focus on correcting SYSTEMS and PROCEDURES• Drive to eliminate ERRORS• Build LONG-TERM supplier relationships• Continuously reduce WASTE• Centre TRAINING on producing acceptable work• LEAD rather than supervise• Encourage QUESTIONS• Use cross-functional TEAMS• Give employees the right TOOLS to do the job• Focus quotas and targets on QUALITY not output• Encourage PRIDE in one’s work• Continuously TRAIN people on new tools and

techniques• Work CONTINUOUSLY on the other 13 points

IMPROVING QUALITY


Juran

• INTERNAL cost of failure- Defects, rework, yield losses, re-inspection,

disposal• EXTERNAL cost of failure- Complaints, returns, field service support,

repairs• APPRAISAL costs- Inspection, test, checks, assurance and control• PREVENTION costs- Planning, reviews, controls, analysis, reporting

COSTS OF QUALITY


Crosby• Clear management COMMITMENT• Improvement supported by MULTI-FUNCTIONAL team• Quality MEASURES in place• COST of quality includes non-conformance and

conformance• Quality AWARENESS promoted throughout organisation• Improvement ideas ACTIONED• Goal is to achieve ZERO DEFECTS• Improvement based on EDUCATION and TRAINING• Specify a future date as ZERO DEFECTS DAY• Set improvement GOALS• Make EVERYONE responsible for identifying and fixing

errors• Give programme public, non-financial RECOGNITION• Form quality COUNCIL to help share knowledge• CONTINUOUSLY improve quality by returning to step 1

IMPROVING QUALITY

Steps to effectively manage quality

CONTROL

IMPROVEMENT

Steps to effectively manage qualityControl

1.Define quality CHARACTERISTICS- E.g. reliability, durability,

appearance•Decide how to MEASURE

characteristics- Variable vs. attribute data•Set quality STANDARDS•CONTROL quality against

standards


DECIDE HOW TO MEASURE CHARACTERISTICS

•VARIABLES- Measured on a continuous

SCALE- E.g. length, weight or time•ATTRIBUTES- Have TWO states- Assessed by JUDGEMENT- DESCRIPTIVE- E.g. right/wrong, looks OK/NOT

OK


SETTING QUALITY STANDARDS

E.g. customers should be served within 90 seconds of

arriving

That LEVEL of quality whichdefines the boundary

between ACCEPTABLE and unacceptable

> KEY IDEA

Quality conformance must beCONTROLLED before it can beIMPROVED

Steps to effectively manage quality

CONTROL

•Find and correct CAUSES of poor quality

•CONTINUE to make improvements

Improvement

> KEY IDEA

Organisations mustPROACTIVELY improve quality byCONTINUALLY identifying what could go wrong before it does and thenPREVENTING these problems from occurring

CASE 10.3

REGAINING CONSUMER CONFIDENCE AT COCA-COLA AND PERRIER

1.How did they REACT to the quality conformance problems?

2.Was quality conformance an ORDER-WINNER or QUALIFIER in their markets?

3.How did this affect their MARKETS?

Question Answer

Reaction

Order-winner or qualifier

Market impact

• Lost consumer CONFIDENCE• Lost SALES- Perrier has never really regained market

share

CASE 10.3

• SLOW to react• Initially DENIED that there was a

problem

REGAINING CONSUMER CONFIDENCE AT COCA-COLA AND PERRIER

• QUALIFIER

CASE 10.4

ON-TIME PASSENGER FLIGHTS: IMPROVING QUALITY

1.Why is the level of DETAIL collected by the bureau?

2.What are the REASONS for the different levels of on-time flights?

Question

Answer

Data collected

Reasons

• Main CATEGORIES:- AIRCRAFT - availability, delays- AIRPORT - inbound, loading- PERSONNEL - passengers, cleaners,

crews- PROCEDURES - announcements,

baggage- OTHER - weather, traffic and control

• HIGHLIGHT airline practice:- GOOD and BAD• Make available to CUSTOMERS:- So aware of PERFORMANCE differences• Put pressure on airlines to IMPROVE

CASE 10.4 ON-TIME PASSENGER FLIGHTS:

IMPROVING QUALITY

CASE 10.5

HAVING THE RIGHT TOOLS TO DO THE JOB

1.What POINT is the CEO trying to make?

2.Why is this IMPORTANT to consider when managing quality?

Question Answer

Point

Importance

• One of the key FIRST STEPS in any improvement programme must be to:

- EDUCATE staff in the use of quality improvement TOOLS and TECHNIQUES

CASE 10.5 HAVING THE RIGHT

TOOLS TO DO THE JOB

• Managers need to equip employees with the right TOOLS to do the job

• It is NOT ENOUGH to simply motivate and support them

Tools and techniquesExamples

•CHECKLISTS•PARETO analysis•CAUSE and EFFECT

diagram•GAP analysis

Tools and techniquesExamples

•CHECKLISTS•PARETO analysis•CAUSE and EFFECT

diagram•GAP analysis•CONTROL charts•Statistical process control

(SPC)•SIX-SIGMA quality

> KEY IDEAQuality conformance can be IMPROVED by changing how services or products are eitherDESIGNED or DELIVEREDIMPROVED

Tools and techniquesChecklists

> KEY IDEA

Checklists recordhow OFTEN a problem occurs

Tools and techniquesPareto analysis

> KEY IDEA

Pareto analyses identify theMOST FREQUENT causes of a problem and thereby help FOCUS improvement activities and resource

Tools and techniquesCause and effect diagrams

1.Identify the PROBLEM to be addressed

2.Identify the major CATEGORIES of causes

3.List all the DETAILED causes4.Identify the PRINCIPAL causes

> KEY IDEACause and effect diagrams help identify theROOT CAUSE of a problem

The diner


Five Easy Pieces(1970)


•What is the OUTCOME at the diner?

•What are the CAUSES of this?

Film clip The Diner

FilmTitleDirector (year)

Five Easy PiecesRafelson (1970)

ClipStartFinish

00:45:4200:46:13

What clip shows A group of people being served in a diner

Key learning objective

Identifying why the customers’ expectations were not met


Tools and techniques

PeopleSystems

Materials Customer

Outcome

The Diner

Tools and techniquesThe Diner

PeopleSystems

Materials Customer

OutcomeInflexible

Unprofessional

Not empowered

High expectation

Customers do not eat and leave upset

Low variety

Inflexible

Tiffany’s


Breakfast at Tiffany’s

(1961)


•What is the OUTCOME at Tiffany’s?

•What are the CAUSES of this?

Film clip Tiffany’s


Breakfast at Tiffany’sEdwards (1961)

ClipStartFinish

01:05:4101:09:49

What clip shows A couple being served in Tiffany’s


Identifying how the business identified and met the customers’ expectations


Tools and techniques

PeopleSystems

Materials Customer

Outcome

Tiffany’s

Tools and techniquesTiffany’s

PeopleSystems

Materials Customer

OutcomeFlexible

Skilled / professional

Empowered

Low expectation

Satisfied customers will come again

High variety

Flexible

Tools and techniquesGap analysis

1.KNOWLEDGE gap2.DESIGN gap3.PERFORMANCE gap4.COMMUNICATION

gap5.OVERALL gap

> KEY IDEA

Gap analysis helps identify why customers’ PERCEPTIONS of the quality of a service or product are LESS THAN their EXPECTATIONS

Tools and techniquesControl charts

•WHAT- aspects of PERFORMANCE need to be

measured•WHERE- which POINT in the delivery system•HOW- which TYPE of control chart - attribute or

variable- FREQUENCY of measurement•By WHOM- who will MEASURE performance- who will take corrective ACTION when it

moves outside of its limits

Tools and techniquesControl charts

Tools and techniquesStatistical process control

> KEY IDEA

Control charts can be used to control a process and ensure that itPERFORMS within specified SPECIFIC LIMITS

> KEY IDEAThese limits need to beCONTINUALLY REVIEWED reviewed to ensure that the performance of the process is being SYSTEMATICALLY IMPROVED

Tools and techniquesSix-sigma quality

CASE 10.6

GENERAL ELECTRIC’S SIX SIGMA QUALITY GOAL

1.What were the key TASKS for GE to reach its goal?

2.How did this change the COMPETITIVE factors in its market?

3.What strategic ADVANTAGE resulted?

Question Answer

Tasks

Changed competitive factors

Strategic advantage

• GE was significantly AHEAD of its competition in:- DEFINING and MEETING quality standards

• Significant CULTURE change• High INVESTMENT in:- TRAINING- Process IMPROVEMENT

CASE 10.6 GENERAL ELECTRIC’S SIX SIGMA

QUALITY GOAL

• QUALITY conformance changed from:- Being a QUALIFIER to- Becoming an ORDER-WINNER

Approaches to managing quality

Management PHILOSOPHY

SYSTEMS and PROCEDURES

Approaches to managing qualityTotal quality management

MANAGEMENT PHILOSOPHY

•Meet CUSTOMER needs and expectations

•Cover all FUNCTIONS•Involve all LEVELS•Examine the current COST of quality•Deliver services and products RIGHT

first time•Develop a quality management

APPROACH•CONTINUOUSLY look for ways to

improve


REDUCE QUALITY COSTS

•INTERNAL cost of failure- Defects, rework, yield losses, re-inspection,

disposal•EXTERNAL cost of failure- Complaints, returns, field service support,

repairs•APPRAISAL costs- Inspection, test, checks, assurance and control•PREVENTION costs- Planning, reviews, controls, analysis, reporting


IMPLEMENTATION

•Develop a quality STRATEGY•Get top-management SUPPORT•Use a TQM STEERING group•Use improvement TEAMS•RECOGNISE success•Use quality TOOLS and

TECHNIQUES•TRAIN staff in the aims and tools of

TQM


CULTURE CHANGE

•Everyone RESPONSIBLE for their own quality

•IMPROVEMENT a part of everyone’s job•Everyone focus on meeting CUSTOMERS’

NEEDS•Involve SUPPLIERS and CUSTOMERS•Mistakes are OPPORTUNITY to improve

> KEY IDEA

To implement TQM, companies mustbroaden their SKILLS andbe more INNOVATIVE.This requires CHANGES in attitude, behaviour and working practices

CASE 10.7

3M: COMMITTING TO QUALITY IMPROVEMENT

1.How should firms INTRODUCE TQM?

2.Comment on the APPROACH used by 3M

Question

Answer

Introducing TQM

Approach

Comment

• It is a LONG journey- Juran - 6 to 10 years to become industry

leader- McNerney - 10 to 15 years to change DNA

• TRAIN all 2,800 staff• Make 500 managers work full-time on

improvement PROGRAMMES for next 2 years

CASE 10.7 3M: COMMITTING TO

QUALITY IMPROVEMENT

• These are the necessary BUILDING BLOCKS for a successful introduction of TQM

• Focusing on LONG-TERM gains

Approaches to managing quality

Management PHILOSOPHY

SYSTEMS and PROCEDURES

Approaches to managing qualitySystems and procedures

•ISO 9000•BALDRIGE award•EFQM excellence

award

> KEY IDEAA number of FRAMEWORKS are available to help organisations consistentlyDESIGN and DELIVER services and products

Approaches to managing qualityISO 9000

HELPS CONTROL BUSINESS PROCESSES

•DESIGNING and DEVELOPING new services and products

•Control MATERIALS•DELIVER services and products•INSPECT, MEASURE and TEST services and

products •HANDLE, STORE and PACK products•SERVICE products after installation•Maintain and audit quality RECORDS for the

above

> KEY IDEA

The Baldrige award aims toimprove the PERFORMANCE ofUS businesses

> KEY IDEA

The EFQM Excellence Award aims toimprove the PERFORMANCE ofEUROPEAN businesses

Terry Tate Management philosophy

Central Services Quality costs

Approaches to managing qualityQuality costs and management philosophy

Brazil(1985)

Terry Tate(2002)

Film clip Central Services


BrazilGilliam (1985)

ClipStartFinish

00:01:0800:10:24

What clip showsThe government bringing in a man for questioning


The quality costs associated with a process

Approaches to managing qualityQuality costs

Film clip Terry Tate


Terry Tate: Office LinebackerThurber (2002)

ClipStartFinish

00:00:0000:03:41

What clip showsA company employing an american footballer to help improve productivity within the office


The benefits and issues associated with this approach to improving quality within an organisation

Approaches to managing qualityManagement philosophy

•What are the steps in the PROCESS?

•What are the QUALITY COSTS?


Quality cost

Example

External failure

Internal failure

Appraisal

Prevention


• WRONG customer• Customer COMPLAINT

• WRONG size plug for hole• Need to complete process AGAIN • LOST working time

• INSPECTION process steps• Paperwork CONTROLS and CHECKS

• Quality SYSTEMS• Quality PROCEDURES

•What is his management PHILOSOPHY?

•What are the BENEFITS of this philosophy?

•What are the ISSUES with this philosophy?


Question Answer

Philosophy

Benefits

Issues


• Reduced NON-PRODUCTIVE time• Increased EFFICIENCY

• MANAGEMENT decision• Management through FEAR• NO INVOLVEMENT of employees• NO EXPLANATION of why change required

• RESISTANCE to change• NO UNDERSTANDING of need for change• Changes are not SUSTAINABLE

Critical reflections

• Quality management has come FULL CIRCLE

- Before INDUSTRIAL revolution, workers were responsible for DELIVERY and QUALITY

- Have RETURNED to this philosophy

• Businesses must apply quality approaches to other aspects of business PERFORMANCE

- Companies that do this will PROSPER- Companies that don’t will stumble and FAIL

Summary

• QUALITY conformance- Either order-winner or qualifier in most markets

• MANAGING quality- Characteristics, measures, levels and monitors

• Quality LEVELS must be- Controlled before they can be improved

• TOOLS and TECHNIQUES for improving quality- Checklists, Pareto analysis, cause and effect, gap

analysis

• Management PHILOSOPHY- TQM

• SYSTEMS and PROCEDURES- ISO 9000, Baldrige Award, EFQM Excellence Award

Revision questions

1 From an operations perspective, quality concerns:a) Determining customers’ needs and

embodying these in the design specifications of services and products

b) Consistently meeting service and product design specifications

c) Both a) and b)

Revision questions

2 The first step in the quality conformance procedure is to:a) Identify the causes of below-standard

qualityb) Define the quality characteristicsc) Measure and control the quality

characteristics

Revision questions

3 Which of the following is NOT a consideration when setting quality levels:

a) Where in the operations process to check conformance to the quality standards

b) Which variables to check

c) How to undertake the check(s)

Revision questions

4 In general, quality tools and techniques can be categorised as:

a) Design tools

b) Process tools

c) Both a) and b)

Revision questions

5 Which of the following is NOT an example of a quality tool or technique:

a) Network analysis

b) Cause and effect diagrams

c) Checklist

Revision questions

6 Implementing total quality management (TQM) in a business requires the following culture change:a) Improvement is the responsibility of the

quality departmentb) Mistakes should be criticised and

correctedc) Suppliers and customers need to be part

of the improvement process

Revision questions

7 Which of the following is NOT an example of a quality award:

a) Six sigma

b) ISO 9000

c) Baldrige

CASE FOR TUTORIAL

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