3 TQM Multiple Perspectives
Transcript of 3 TQM Multiple Perspectives
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Multiple Perspectives on Quality
Terry Nolan
Total Quality Management
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Quality what does it mean?
there is little agreement
on what constitutes
`quality' despite what the
dictionaries mightsuggest, and it appears
that the more we hear it
the more confusing its
meaning seems tobecome
Terry Nolan
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Quality has a wide scope
Terry Nolan
Narrowly interpreted, quality means quality ofproduct. Broadly interpreted, quality meansquality of work, quality of service, quality of
information, quality of process, quality ofdivision, quality of people, including workers,engineers, managers, and executives, qualityof systems, quality of company, quality ofobjectives, etc.
(Ishikawa, 1985, p. 45).
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Perspective 1 - Quality is
Excellence
Terry Nolan
Investment of the best skill and effort possibleto produce the finest and most admirable
results possible ... Quality is achieving or
reaching for the highest standard as against
being satisfied with the sloppy or fraudulent ...
It does not compromise with second-rate
(Tuchman, 1980, p. 39).
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Perspective 1 - Quality is
Excellence
Terry Nolan
Only 1 in 10 customers complain
Quality must be customer-driven not supplierdriven
Quality=Customers perceptionsnot our own!
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Perspective 2 - Quality is Value
Terry Nolan
Feigenbaum (1983) stated the following:
Quality does not have the popular meaning of
`best' in any absolute sense. It means `bestfor certain customer conditions'. These
conditions are (a) the actual use and (b) the
selling price of the product. Product quality
cannot be thought of as apart from productcost
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Perspective 2 - Quality is Value
Terry Nolan
Allows comparison to be made across widelydifferent objects and experiences, such as a
Eurostar train journey through the Channel
Tunnel to Paris versus a plane flight from London
to Paris.
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Perspective 3 Quality is
Conformance to Specifications
Terry Nolan
Juran (1951) proposed what have become the
two most commonly agreed definitions:
1. Conformance to specifications.
2. Fitness for Use
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Perspective 3 Quality is
Conformance to Specifications
Terry Nolan
Quality of conformance to design concerns
the extent to which the product or service
conforms to the design specifications
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Perspective 3 Quality is
Conformance to Specifications
Terry Nolan
The `conformance to specifications' view of
quality is a manufacturing-based outlook. It
implies that once a design or a specification has
been established by the producer, any deviation
from it, during production or downstream from
production, means a reduction in quality
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Perspective 3 Quality is
Conformance to Specifications
Terry Nolan
Historically, quality as `conformance-to-specifications' tended to be internally focused. Byusing this view of quality, organizations pay:
little attention to the link, in customers' minds,between quality and product characteristics otherthan conformance. Rather, quality is defined in amanner that simplifies engineering and productioncontrol. On the design side, that has led to an
emphasis on reliability engineering. On themanufacturing side, it has meant an emphasis onstatistical quality control(Garvin, 1988, p. 45).
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Perspective 4 - Quality is meeting and/or
exceeding customers' expectations
Terry Nolan
Jurans `fitness for use' definition - the
extent to which a product successfully
serves the purposes of the user, not themanufacturer, merchant or the repair
shop
it ensures that firms are more externallyfocused by paying greater attention to
the changes in the market.
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Cost of Quality (CoQ)
Terry Nolan
Quality costs do not readily appear in
the accounting journals
Large timing delays between qualitycosts and benefits create distortion
Accounting rules do not lend themselves
to measuring quality
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Difficulties in capturing the True
costs
Terry Nolan
Numerous cost estimates are needed
There are hidden costs never captured
Matching future costs with historicalcosts is necessary
A clear definition of quality needs to be
made before the costs associated withit can be measured.
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CoQ
Terry Nolan
The two definitions which are most commonlyagreed upon are:
1. Conformance Costs - comprising
Prevention costs and Appraisal costs
2. Non-Conformance Costs comprising
Internal Failure costs and External Failurecosts
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Prevention costsall activities designed
to prevent defects in products or services
Terry Nolan
Include direct and indirect costs related to: quality training and education,
pilot studies,
quality circles,
quality engineering, quality audits,
supplier capability surveys and so on. These costsare used to build awareness of the quality programme
and to keep the costs of appraisal and failure to aminimum
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Conformance Costs
Terry Nolan
Appraisal Costs - associated with measuring andevaluating the product or service quality to ensure
conformance. These include the cost of
inspection, test or audit of purchases,
manufacturing or process operations and finishedgoods or services.
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Nonconformance Costs: orfailure
costs
Terry Nolan
Internal Failure costs - these are incurred prior
to the final shipment of the product or the delivery
of the service. Costs include, defects that are
found prior to customer delivery, net cost of scrap,spoilage, rework, supplier rework, re-inspection
and retest, downtime due to poor quality etc.
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Nonconformance Costs: orfailure
costs
Terry Nolan
External failure cost the cost of discovereddefects occurring after product shipment or
service delivery. These include warranty
charges, customer complaint adjustments,
returned merchandise, product recalls,
allowances and product liability. They also
include the costs of labour and travel
associated with the investigation of customercomplaints
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Traditional Model of Quality Costs
Terry Nolan
TQ TQ
Total quality costs
Failure costs
Costs of appraisal
Plus prevention
0 Quality of Conformance 100
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Old Model Discredited
Terry Nolan
Nowadays, this is discredited for two reasons:
(i) appraisal and prevention costs probably
decrease through experience factors;
(ii) they must be continued any way to preserve
the earlier quality improvements.
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Emerging model of Quality costs
Terry Nolan
TotalQualityCosts
Cost Failure costs
perGood
Unitof
product costs of appraisal and
prevention
0 Quality of Conformance 100
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Four Cost of Quality Components
Terry Nolan
1. Prevention costs remain relatively consistent as theawareness of TQM is built and maintained.
2. Appraisal costs will initially increase as inspection
programs are initiated but should eventually level off
3. Internal failure costs will initially increase as the inspectionprograms are implemented but should then graduallydecrease with learning
4. External failure costs should continue to fall as various TQprograms are brought on line
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Limitations of Cost-of Quality concept
Terry Nolan
COQ measurements do not solve qualityproblems
Publication of the cost figures does not
stimulate cost reduction
COQ reports do not provide specific actions
COQ calculations do not capture all of the cost
Standard accounting conventions do not cater
for COQ needs Important costs can be easily omitted from the
COQ calculation
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Limitations of Cost-of Quality concept
Terry Nolan
There is a time delay between cause andeffect, and a COQ report may not capture all
the changes in the same period
Quality costs are subject to judgement andestimation, which can cause distortion
COQ has a tendency to be short term
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Summary
Terry Nolan
The various definitions discussed show that thereis no `one best' or `correct' definition for quality.
Sources:
Yong, J and Wilkinson, A. (2002) The long and windingroad: the evolution of quality management .TotalQuality Management , Jan. Vol.13 11 p101(21)
Rao, A. (1996) Total Quality Management: A CrossFunctional Perspective. Wiley & Sons