Quality is the ability of a product or service to consistently meet or exceed customer

expectations.

Quality Management

• Performance - main characteristics of the product/service

• Special features - extra characteristics

• Conformance - how well product/service match to customer’s expectations

• Aesthetics - appearance, feel, smell, taste

• Durability - useful life of the product/service

• Reliability - consistency of performance• Service after sale - handling of customer complaints or checking

on customer satisfaction

Dimensions of Quality

Dimension

1. Performance

2. Aesthetics

3. Special features Convenience High tech

4. Safety

(Product)AutomobileEverything works,Ride, handling, grade ofmaterials used

Interior design, soft touch

Cellular phone, CDplayer

Antilock brakes, airbags

(Service)Auto RepairAll work done, at agreedpriceFriendliness, courtesy,Competency, quicknessClean work/waiting area

Location, call when readyComputer diagnostics

Separate waiting area

Examples : Dimensions of Quality

Dimension

5. Reliability

6. Durability

7. Perceived quality

8. Service after sale

(Product)AutomobileInfrequency of breakdowns

Useful life in miles, resistanceto rust & corrosion

Top-rated car

Handling of complaints and/orrequests for information

(Service)Auto RepairWork done correctly,ready when promised

Work holds up overtime

Award-winning servicedepartment

Handling of complaints

Examples : Dimensions of Quality

The Consequences of Poor Quality

• Loss of business

• Liability

• Low productivity

• Failure Costs – Internal

– External

• Appraisal Cost

• Prevention Costs

Costs of Quality

• Failure Costs - costs incurred by defective parts/products or faulty services.

• Internal Failure CostsCosts incurred to fix problems that are detected before the

product/service is delivered to the customer. Examples; Material, labor and capacity loss, scheduling difficulties for re-work

• External Failure CostsAll costs incurred to fix problems that are detected after the

product/service is delivered to the customer. Examples; Returned products, loss of goodwill, liability, claims

Costs of Quality

• Appraisal Costs

Cost of inspecting material, parts, and products

to to ensure their conformance with quality standardsExample; labor and material cost of inspecting

equipment, cost of interruption in production

• Prevention Costs

Cost of preventing defects from occurringExample; Total Quality Management costs

Costs of Quality

Contributor Deming

Juran

Crosby

Ishikawa

Known for 14 points; special & common causes ofvariation

Quality is fitness for use; quality trilogy

Quality is free; zero defects

Cause-and effect diagrams; qualitycircles

Quality

Key Contributors to Quality Management

Deming

A professor of statistics in 1940s. Went to Japan after WWII to assist Japanese in improving quality and productivity.

Japanese established Deming prize for quality. Deming was unknown in his home country until 80s

He developed a famous list of 14 points he believed were key for quality in organizations.

His message was; System is the cause for inefficiency and poor quality not employees. It is management’s responsibility to improve the system.

The essence of his 14 points are; Constancy of purpose, continuous improvement, profound knowledge.

Deming : Profound Knowledge

Profound knowledge is; appreciation for the system, theory of variation, theory of knowledge, and psychology.

Appreciation for the system;.Every one in the organization working to achieve overall optimization. Management most eliminate internal competition.

Theory of Variation; Variation reduction is an important key to quality. There are two types of variations; random and correctable. We should concentrate on the later.

Theory of Knowledge; Knowledge comes from theory. Learning can not occur in an organization without a theory of knowledge.

Psychology; Workers want to create and learn. Management’s greatest challenge is to motivate workers to contribute their common effort to achieve a common goal.

Deming’s 14 Points

1.Constancy of purpose toward improvement.2.We can no longer live with defects and delays.3.Forget mass inspection, rely on statistical process control (SPC).4. Eliminate unqualified suppliers. Not just price, but Price + quality.5.Work continually on the system, identify problems, resolve them.6.Institute modern methods of training on jobs.7.Responsibility of foremen is not productivity but quality, which in turn improves productivity. Management takes immediate action on foremen requests regarding improvement in elements of the system.8.Drive out fear, so that every one may work effectively for the company.9.Break down barriers between departments. Motivate team work.10.Do not ask for more productivity, without providing methods.11.Eliminate work standards that prescribe numerical quotas.12.Break down barriers between hourly and permanent workers.13.Institute a vigorous program for education and retraining.14.Top management will push every day on the above 13 points.

Juran

He made his first trip to Japan after publication of his Quality Control Handbook in 1951.His method is close to that of Deming, but with two main differences. 1) Management of quality is not very difficult. 2) He places less emphasize on SPC. His initiatives; Quality begins by knowing what customer wants. Quality is fitness-for use.Almost 80% of quality defects can be controlled by commitment of management to continuos improvement.Quality management is 1) quality planning, 2) quality control, and 3) quality improvement.He showed high cost of low quality, and potentials of cost reduction through quality improvement.

Baldrige Award

Deming Prize

Quality Awards

1 Leadership (110 points)

2 Strategic Planning (80 points)

3 Customer and Market Focus (80 points)

4 Information and Analysis (80 points)

5. Human Resource Development and Management (100 Points)

6 Process Management (100 points)

7 Business Results (450 points)

TOTAL = 1000

Malcolm Baldrige National Quality Award

Baldrige Award

• The companies formulated a vision of what they thought quality was and how they would achieve it.

• Senior management was actively involved.

• Companies carefully planned and organized their quality effort to be sure it would be effectively initiated.

• They vigorously controlled the overall process.

Characteristics of Baldrige Award Winners

• Honoring W. Edwards Deming

• Japan’s highly coveted award

• Main focus on statistical quality control

The Deming Prize

Deming Prize

• ISO Series

• Set of international standards on quality management and Quality assurance that are critical to international business

• Requires firms to document every thing they do that affects the quality of goods and services.

• Document every step (incoming raw materials, product design, in-process monitoring and so forth) to be able to identify those areas that are causing quality problems and correct them.

International Organization for Standardization

• When an organization feels that its quality system is good enough, it may ask for assessment.

• The audit begins with a review of the company's quality manual. The audit team checks to see that the documented quality system meets the requirement of ISO 9000 and that the organization is practicing what is documented.

• When the registrar is satisfied with the recommendation of the audit team, it issues a registration document to the company.

ISO 9000 Registration Process

ISO 9000 Helps companies determine which standard of ISO 9001, 9002, and 9003 applies

ISO 9001 Outlines guidelines for companies that engaged in design, development, production, installation,

and servicing of products or serviceISO 9002 Similar to 9001, but excludes companies engaged in design and developmentISO 9003 Covers companies engaged in final inspection and testingISO 9004 The guidelines for applying the elements of the

quality management system

ISO 9000 Series

Reading The cost of quality, 401-402Quality gurus 402-406