Quality management book @ bec doms bagalkot mba

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Quality management book @ bec doms bagalkot mba

  1. 1. 1QUALITY-MANAGEMENT BSPATIL
  2. 2. 2Unit – 1 Concept of Quality – Quality as customer delight – Quality as meeting standards – Actualvs Perceived quality – Concept of total quality – Design, inputs, process and output – Need forQuantity – Function of quality – Philosophy of quality – Old vs new – Quality as a problem and asa challenge – 6 sigma concept.Unit – 2Quality Management : Fundamentals evolution and objectives – Planning for quality – Qualityprocess – Statistical Process Control – (SPC) and acceptance sampling – Quality assurance – Totalquality management.Unit – 3Quality and Productivity – Quality and cost – Is quality of cost – Benefits of quality – Competitionin quality – Role of MNCs in emergence of global quality.Unit – 4Quality System – Total quality control system vs total quality management system – Total QualityControl (TQC) in Japan, US, Europe – Elements of TQC – Just in time, quality circles, quality teams.Unit – 5Total Quality Management (TQM) – Elements – TQM in global perspective – Global benchmarketing – Business Reengineering – Global standards – ISO 900 series – quality manual –Barriers to TQM.Unit – 6Total Quality Management and Leadership – Implementing TQM – Market choices – Marketingcustomer requirements – Maintaining competitive advantage - Core competence and strategicalliances for ensuring quality – Quality review, recognition and reward – Quality awards. BSPATIL
  3. 3. 3 QUALITY MANAGEMENT UNIT – 11.1Quality Quality, cost and productivity are still fundamental concerns for management worldwide. The concept of quality has been around us for a vary long time. The characters for quality appear in ancient Chinese and Indian writings. Quality is the vary essence of humanity. The concept of cost too has been around us for at least 10,000 years. Its beginning can be traced to the commencement of trade activities and bartering. Productivity, however, has been around us for only the past 200 years, with its beginnings, identified with the industrial revolution and reinforced with the advent of the Taylor system. A new awareness of quality has dawned in the Indian economy. Quality of both products and services in organizations is being felt as the need of the hour. This is more so with greater thrust on exports and liberalization in Indian economy. Secondly, quality practices are coming to the fore. There is a missionary zeal in implementing TQM and getting ISO 9000 certification. Competitive environment demands a better quality of product or service at lower rates. Only those organizations which manage productivity and quality on a continuous basis are in a position to compete in increasingly competitive global marketplace. The impact of poor quality on any organisation leads to: (i) low customer satisfaction and low market share; (ii) low productivity, revenue and profit; (iii) low morale of workforce; (iv) more rework, material and labour costs; (v) poor quality of goods and services; (vi) high inspection cost; (vii) high process bottlenecks and delay in product shipment; (viii) higher work-in-progress inventory; (ix) high analysis and repair costs; and (x) high material wastage and scarp. Quality is a customer’s determination and is certainly not a manufacturer’s determination. The modern view of quality is that products should totally satisfy the customer’s needs and expectations on a continuous basis. This new concept of quality calls for : (i) well designed products with functional perfection – right the first time (ii) prompt satisfaction of customer’s expectations, (iii) excellence in service4 and (iv) absolute empathy with customers.1.2HISTORICAL DEVELOPMENT The development of quality activities has spanned over the entire twentieth century. Curiously, significant changes in the approach to quality activities have taken place almost every 20 years. Quality activities have traversed a long path from operator’s inspection (1990s) to verification of quality by supervisors (1920) to establishment of quality control departments and 100 per cent inspection (1940s) to statistical quality control (1960s) to TQC with statistical control (1980s) to TQM and statistical problem solving (1990s) to self-managed teams and innovation (late 1990s). This historical development of the quality concepts is shown in Table – 1.1 TABLE : 1.1 QUALITY – HISTORICAL DEVELOPMENTS S. Evolving Quality Activities Period in Years No. 1 Operator inspection 1870 - 1890 2 Foreman verification 1890 – 1920 3 QC Department and 100 per inspection 1920 – 1940 4 QC Department and Statistical Quality Control (SQC) 1940 – 1960 5 Quality Assurance (QA) Department and Statistical 1960 – 1980 Process Control (SPC) BSPATIL
  4. 4. 4 6 TQM, QA Department, Statistical problem solving 1990 onwards and Statistical Process Control (SPC)1.3DEFINITION OF QUALITY A number of definitions of quality have been propounded by experts. Some of these, given by quality ‘Gurus’, are widely recognized as these have been evolved over a period of time. These are as follows: Quality is fitness for use or purpose - Joseph M. Juran Quality is conformance to requirements – Philip B. Crosby A predictable degree of uniformity an dependability at low cost and suited to market. – W. Edwards Deming ….. development, manufacture, administration and distribution of consistently low cost products and services that customers need and want. - Bill Conway. Total composite of product and service characteristics of marketing, engineering, manufacturing and maintenance through which the product and service in use will meet the expectations of the customer – Armand V. Feigenbaum. Quality is the degree of excellence at an acceptable price and control of variability at an acceptable cost – Broth. The totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs of customers – ISO 8402: Quality Vocabulary. None of the above definitions construed quality as synonymous with prestige or preciousness associated with quality of gem stones, for example. The well-worm analogy of he Rools-Royce and Maruti Esteem as both being cars is worth reiterating to differentiable the terms. A Rolls Royce is a motor car which meets a customer’s requirements for transporting people from one location to another but in a luxurious comfort arid in such a way so as to impress people on the way. A Maruti Esteem is no less a ‘quality’ car. Its purpose is to transport people from one location to another gut in as cost-effective manner as possible. Other factors such as reliability and safety, for example, are the characteristics which apply to both cars and are shared requirement of their respective customers. Thus most of the above given quality definitions (propounded by quality Gurus, pioneers or specialists in the field of total quality and quality standards) are combinations of the two themes – customer satisfaction and economic cost as explained In cars’ example. Since the advent of industrial society, the term ‘quality’ has in part related to ‘adequacy’ as in conforming adequately to expectations and requirements of use. Generally, an engineer created a set of specifications and if a production crew met these engineering specifications, a ‘quality’ product is said to be delivered. For a long time, producing quality products meant making sure that the product conformed to its specifications. This had some degree of credibility – the products were greatly fit for use and the customers were usually more or less satisfied. For our purpose, let us use the definition of quality as: Quality is one which satisfied customers needs and continuously keeps on performing its functions as desired by the customers as per specific standards. Quality is neither a topic of recent interest nor a fashion. It is, and has always been a problem of interest, essential for a firm’s and to a nation’s competitiveness. Colbert, the famed Minister of Louis the XIV, already in 1664 stated: BSPATIL
  5. 5. 5If our factories will impose through repeated efforts, the superior quality of their products,foreigners will find it advantageous to supplying themselves in France and their wealth willflow to the Kingdom of France. This is one example of many. The ‘American Industrial Way’ has traditionally been basedon excellence in manufacturing product innovation and a sensitivity to consumers. The test ofthe market, which brings some firms to profitability and others to oblivion, is also a pervasivepart of the American scene. It is these same market tests, expanded by a globalization ofbusiness, manufacturing technology and competition, that have raise4d the priority of qualityin industrial business strategies. In this chapter we shall be concerned with the definition of the concept of quality. Suchdefinitions are important, for it may mean different things to different things to differentpeople in various circumstances. The industrial notions of quality, although clear and wellstated, need not be true measures of quality. Although they are important and serve manypurposes, the are only part of a larger picture.The concept of quality Quality can be several things at the same time a may have various meanings, according tothe person, the measures applied and the context within which it is considered. Below, weshall consider below, several dimensions and approaches along which quality could bedefined. Those are based on both objective and subjective notions of quality, with bothtangible and intangible characteristics.‘Quality is the search for excellence’ ‘Citius, Altius, Fortius meaning ‘Faster, Higher, Stronger’, engraved on Olympic medals,symbolized the spirit of competition, seeking and ever greater excellence in man’sachievements. The ‘search for excellence’ is not new, however; it is inbred in a Darwinianphilosophy for the survival of the fittest. Quality is thus an expression of this excellence,which leads one firm’s product to dominate another, and to guarantee its survival byestablishing a new standard of quality. Over time, excellence creates an image of quality. Thisis how English clothes, German cameras, French wines and cheeses, and so on, have becomemarks of excellence. In this context, quality is a perpetual challenge which results both froma process of perpetual improvement and a domination over other, similar products.Of course, new technology can alter such domination. American cars, once an image ofexcellence, have been gradually been replaced by Japanese cars; for some in the TJS, Frenchwine is gradually being replaced by Californian wine, etc. in this sense, quality is a mark ofexcellence, persistent and maintained over long periods of time. Such excellence is, of course,a function of habits, culture and values, and may thus vary from person to person and fromtime to time.‘Anything you can do, I can do better’Are Japanese cars better than American? Do blades produced by Gillette last longer thanWilkinson’s? Such questions, although hard to answer, may in some cases be dealt with anapparent sense of objectivity. In other words, quality is defined by implication in terms ofattributes and some scales used to measure and combine these attributes. In some cases,these attributed may be observed and measured precisely, but they can also be difficult toobserve directly and impossible to measure with precision. ‘These situations are some of theingredients that make quality the intangible variable that firms have difficulties dealing with.Nevertheless, a combination of such attributes, in ‘various proportions’ can lead to thedefinition of a concept of quality. In this sense, quality is defined relative to available BSPATIL
  6. 6. 6alternatives, and can be measured and valued by some imputation associated with thesealternatives.‘Quality is in the eye of the beholder’ Do French perfumes have a better smell than American? Is French Chablis of a betterquality than California Chablis? Is French cheese tastier than comparable cheeses produced inthe US? Of course, tins is a matter of smell and taste! Quality is then in the eye of thebeholden, established over long periods of time by habits, culture and customs which havecreated ‘standards of quality’. In this case, quality is not what we think it is, but what thecustomer says it is. J.F.A. Sloet, President of KLM, while addressing the European Council forQuality stated that the essentials of quality is to do what you promised It is not relevant whatwe think quality is. The only quality that matters… is what our clients think. Peter Drucker,put it in the same terms by stating that it is not what the ‘supplier’ puts in, but what theconsumer takes out and is willing to pay for. This ‘downstream’ view of quality, emphasizinga sensitivity to consumers is in sharp contrast with the traditional ‘upstream’ conception ofquality. In the early 1980s, for example, American car manufacturers were satisfied that theywere producing quality cars, only to see consumers turn towards Japanese made cars.Similarly, at Renault, great efforts were put into developing more efficient engines, whileconsumers were valuing attributes to which Renault designers were oblivious. Of course,American and European car manufactures have since learned that in an open world, withglobal competition, quality cannot be poor long.‘Quality is the “Proof of he pudding”Quality is what the market says it is. In this sense, quality is only a term that we can define aposteriori, once consumers choices have been expressed relative to a range of potential andcompeting products. Of course, there may be many reasons for these choices, including eachand all of the reasons stated above. Nevertheless, the underlying fact is that we cannot apriorisay what quality is. The best of intentions to produce quality products or deliver qualityservices can falter. In this sense, quality is a variable which can at best be guessed apriori and,perhaps, through successive experimentation, learning and adaptation, it can be refined andimproved.‘Quality is Value Added’ Business preoccupation to measure and value its product and services leads to anotherview of quality. This view defines quality as value added. It is both what the consumer wantsand is willing to pay for. Such views are, of course, motivated by the need to value quality sothat sensible decisions regarding a firm’s quality supply can be reached. For example, howmuch is a firm willing to pay for shorter and more reliable supply delays of materials it uses ismanufacturing processes? This is, of course measure by what added the buyer gets by such asupply quality. Although difficult to assess, it might be possible to do so in some cases,Inventory stocks, reduced administration costs and smoother production flows may be only afew of the many facets the buyer may consider to value shorter and more reliable delays. Thevalue added in consuming well known label goods compared to unlabelled ones, althoughmuch more difficult to measure and define, do exist, since there is clearly a market for‘overpriced’ goods whose essential characteristic is their label. How else could we explain aChevignon Jacket or Hermes scarf costing three times the price of the same jacket and scarfwithout the label! As a result, quality is not a term that can be defined simply. Rather, it is composite terms,expressed in terms of attributes which define quality by implication. These attributes express: The relative desirable of products, items, services. BSPATIL
  7. 7. 7 The potential for substitutions and product differentiation, both objection and subjective. In this sense, the concept of quality is both objective and subjective, and is based on product and service differentiation, on substitution, as well as on buyer perception and heterogeneity. Substitution combined with subjective (or objective) differentiation thus provides some means that we can use in appreciating and valuing quality if it can be measured or estimated directly or indirectly in terms of other variables. If products are not substituted (meaning that they are not comparable), then quality as a variable used to compare these products is not relevant. Differentiation of products can be subjective, perceived differently by consumers. Beauty, taste, smell are perceived differently by buyers. In this sense, quality is a concept expressed by a consumer population’s heterogeneity, as we pointed out earlier. Thus, heterogeneity induces an unequal assessment of what is quality. If consumers are the same’ in terms of how they value and assess characteristics associated with a product, then they may be considered homogeneous, and the concept of quality would be well defined in terms of ‘agreed on’ properties. For example, the number of shaves one can have with a Gillette sensor blade compared to a standard one, the temperature tolerance of Titanium (needed to fabricate jet engines) compared to some other materials, the hardness of graphite steel compared to other types of steel, are all objective dimensions along which quality is measured.1.4WHO IS THE CUSTOMER?For an organisation seeking major improvement, the customer is the primary driving force.Obvously, the external customer who pays for the service is important for the reasons outlinedabove in winning and losing customers. But who he or she? Which one? Do we respond to theneeds of the big customer or the small one?.... the demanding one or the passive one?... theimmediate purchaser or the consumer? The reality is we will be dealing with many customers oncontinuous basis and they are all important. In a Quality organisatoin, the must have a customer– a person to tell us whether we have got it right or not. Without an identified customer, weshould why we are doing this activity. With an identified customer, we can find out what isneeded, if everyone is thinking ‘customer’ in this way, a strong movement for improvement iscreated.At the beginning of a Quality process, many companies define categories of customer to helppeople understand the need for customer-orientation. Distinctions are made between internalcustomers and external and sometimes between customers and consumers if both are supplied,e.g. a PC manufacturer who sells to the public as well as through dealers. Ultimately though thesame generic concept applies throughout – my customer is the person receiving this servicewhich I am providing now. Ian Valiance, Chairman of BT, thinks of his customers as constituents’’including the government, the public (he receives 20,000 letters a month), industrial users andthe people reporting to him. They are all his customers and he ruthlessly manages his time todevote appropriate attention to all of them.In fact, most managers and also staff have complex constituents like Ian Valiance. We will findthat we can categorise them as we under stand their needs better. For example, until the Qualitymovement hit the airlines, passengers were just passengers; now there are many subdivisionssuch as business travelers, vacationers, family visitors, children travelling without parents. Suchcategorization provides crucial focus on the differing needs and enabled British Airways, early onin their Quality process, to provide directly for each group, with, for example, the Young Fliersprogramme. BSPATIL
  8. 8. 8 Identifying market segments from which distinct customer requirements can becharacterized moves the supplier further away from ‘product-out’ thinking, where it is up to thecustomer to adjust his needs around our offering. Each customer category is still a compromisethough and the smaller and more sharply defined the grouping, the closer we are able to matcheach customer’s need. The customer concept can be used to challenge each business unit, eachwork team and each person in a Quality organisation to make the focus tighter and tighter until,ultimately, it is one person – the person being served now. As such, the customer concept, as with Quality itself, if both strategic and tactical. Weneed strategic customer focus in order to design the products to attract customer interest andalso to create the processes to deliver to their needs. But to really satisfy customers we have tobe albe to adjust tactically too. When it comes down to winning or losing customers, service ispersonal – one to one. The customer has no interest at all in our other customers. John Mitchell’scustomer felt as if there was no one more important to him than her and the stained dress.However both our company is, that is the feeling we should be giving each customer.1.5WINNING CUSTOMERSWe do not sell to customers today; they buy. that is, they call the tune; they have the choice andwill only buy from us if we make it easy for them or special for them. This applies whether theyare existing customers or new ones. Customers buy on the value to them. The value is aperceived balance of features against cost. The customer is buying for a need, which might be tofulfill the requirements of another customer, to make life easier or more interesting, to counter aconcern. The need is what determines the judgment of value of hence the attractiveness ofparticular features. The need may well be as much emotional as physical. Thus the judgment ofvalue is a complex one going way beyond point-in-time product or service attributes. The costelement of value is not simply the price tag either. The customer may well be weighing up thecost of use as well as purchase and the cost of doing business with us as opposed to someoneelse.Value is an individual judgment. What is important to one customer may be less so to another.Velcro USA President, Theodor Krantz, discovered this from Velcro’s better understanding oftheir customers’ needs as their Quality process took hold: ‘Quality is not absolute, it depends onthe customer’s perception and requirements. For textile customers, appearances are important,whereas in the medical business the concern is cleanliness. The auto makers want durability,reliability and capability. With government, the specifications are all-important.’ FIGURE: 1.1 VALUE vs. DISTINCTION Page No. 10Value is also a relative judgment. ‘In the shoe industry, the hook and loop on a pair of kidssneakers is not especially important since the goods are barely used for three months. But with a$600 knee brace, the quality of the hook and loop closure is very important.’ Relative value isequally influenced by competitive offerings and novelty. For this reason alone, we have to BSPATIL
  9. 9. 9continually upgrade our products and services. For many years, reliability has been a top factorin car buying. Today, most cars (not all) are very reliable and this factor is beginning to be takenfor granted. Like safety in airline travel. Car makers have to retain reliability because to lose itwould be disastrous, but have to provide many more new features as well. For US discovered thisa few years ago. They had spend many years of an intense Quality programme concentrating onthe vital need to raise reliability.Somewhat to their surprise, when they launched their highly successful Taurus, customers ratedthem pretty average on reliability but very god on extra thoughtful features. In fact, Ford had puta lot more effort into listening to what customers wanted and had built in some 1,200 itemsfrom a customers – wish list. These were quite mundane thins like cup holders or quietdoor-closing but they made a noticeable difference. Ford describe this success as focusing on‘the things that go right’ as well as ‘the things that go wrong’. Value is perishable and has to berenewed. When it comes to attracting new customers as opposed to retaining existing ones, thesupplier has to work even harder. Customers have the power to switch and may do so withoutcompunction when persuaded, but they are also lazy. They are not going to seek you out; youhave to attract them. This requires a distinctive offering in the market place to stand out from allthe others. Again this factor is perishable; what is distinctive one year is ordinary the next unlessit is continually upgraded.1.6DELIGHTING THE CUSTOMER Of course, we should be waiting for our problems to trigger our ability to impress thecustomer. If we4 are really managing our customer, we are watching for his problems and usingour talents to help. This brings us into that rarefied area of customer delight: doing somethingthat feels special to the customer – exceeding his expectations. Not necessarily surprising thecustomer, this can backfire, not going over the top, this may be impossible to repeat, but simplydoing that little bit better. Richard Branson’s dream was not really to run a world-beating record business, that was merely something he was good at; his real ambition was to run airline. Before starting Virgin Atlantic, he knew he would have to do that little bit better. He knew all about Laker and People’s Express, independent players who were unable to withstand the muscle of the airline giants. His first service across the Atlantic was indeed very similar to Laker, offering cut-price tickets which the majors followed. Gradually, Branson worked out a different strategy, adding entertainment (imported fro his record business) for his young adult customer base. This led him to his major break though, a superior service for business travelers. Business trade is the lucrative end of airline revenue because of the high and non-discounted ticket prices. Branson talked and listened to business travelers (literally, by regularly traveling himself and getting to know his fellow passengers) and built up a picture of the regular businessman’s likes and dislikes about air travel. Form this picture, he created Virgin Upper Class. Upper Class was the first with individual video players, something all the major airlines are copying – slowly because of the huge installation tasks for the big fleets. He set a style of service which was personal, empowering cabin crew to care for passengers in their own way, rather than to over-standardized patterns, again an advantage of being smaller and focused. He added neck massages and aromatherapy kits because his passengers were concerned about the effect of air travel on their bodies. He looked after his passengers way beyond the terminal, sending limousines to collect and deliver door to door. Richard Branson introduced all these features ahead of his big established competitors; indeed he did the whole thing a little better. As a result, he delighted his customers. They told others and Virgin Atlantic’s BSPATIL
  10. 10. 10success was assumed. In the early nineties, Upper Class is the service the other North Atlanticcarries are striving to better. Customer delight is a wonderful thing to achieve. The customer does the reverse ofspreading the bad news and tells his friends of his good judgment in finding this specialservice (as we’ve seen he won’t tell quite as many; good news doesn’t travel as far as bad butthe good feeling may last). The supplier and his team feel good about their work being valued.But it is a very delicate emotion. He cannot be thrilled every time, but he will miss it if werevert to ordinary service. We have raised his expecte4atoin and we have no choice but so setour sights higher and do something better. This is the true power of customer-orientation: toplease the customer, continuous improvement is mandatory.1.7 STANDARDS Standards crystallize past experience and knowledge. It would be no exaggeration to saythat industrial production efficiency depends on the number of effective standards set andutilized. However, some people believe that standards are enslaving and stifle creativity. Toset effective standards, it is first necessary to understand correctly what standards actuallyare.Standards based on scientific laws, versus business contracts The basic requirement of industrial production is to manufacture, as cheaply as possible,products that satisfy consumer demand. Ways of reducing costs include purchasing materialscheaply and making use of cheap labor. These are management devices, not technical ones.Technical measures might include lowering materials consumption per product unit or raisingper-capita value-adding productivity. Raising productivity through technology basically involved using scientific laws andprinciples in the production process. Modern industry is based on scientific progress, and theapplication of science to manufacturing has enabled the mass production of sophisticatedproducts that were previously unimaginable. Industrial production is achieved through awide-ranging application of known scientific laws and principles in such diverse fields asmechanics, thermodynamics, strength of materials, electro-magnetic, vibration science,metallurgy, chemistry, biology, and so on. Industrial production efficiency is determined by how skillfully these laws and principlesare applied to achieving specific objectives. Technical standards embody the most efficientmethods from all those methods technically feasible at any given time. Although they maychange when a more efficient method is discovered, until this happens they represent thebest methods known. Although work can still be accomplished even without adhering to standards, failure to doso inevitably leads to lowered efficiency. Trying to maintain efficiency also has an effect onquality. A technical standards enshrines current best practices; deviation from it can causeeither a drop in efficiency or deterioration in quality. Thus, work must be carried out inaccordance with the standards if the specified quality at maximum efficiency is to beproduced. Although human beings can discover and make use of the laws of nature, they cannotinvent or change them. Utilizing natural laws in industry therefore means manufacturing inaccordance with these laws. Work that fails to take them into account is bound to result inharm. The process of manufacturing a given product inevitably defines itself in the course ofpursuing greater efficiency. A process created in this way when becomes a standard, andmany standards relating to design, manufacturing technology, and production are of this type. BSPATIL
  11. 11. 11 While standards based on scientific laws a principles are naturally be fined by the pursuit of quality and efficiency, some standards are artificial conventions deliberately imposed by human beings. There is no natural law that makes such standards mandatory; people formulate and enforce them because they find it convenient to do so for social or business reasons. For example, it really does not matter whether people drive on the right or left side of the road, but there would be trouble if this was used as a reason for not stipulating which side people have to drive on. One side or the other must be specified. Various system of weights and measures also exist, such as the metric, imperial, and ancient Japanese systems. It would be convenient if the same system was used all over the world, and most countries have adopted the metric system as a standard. It would also be convenient if electricity supplies all over the world used the same voltage and frequency. Standards constituting social or business conventions are imposed for reasons of convenience or safety. Depending on what they cover, they are prescribed in the form of national, industrial, company, and divisional standards. Unlike standards based on natural lay, they are not absolute; with this type of standard, people are free to choose what is specified. The appropriateness of a standard of this type can be verified by weighing up the social disadvantages that would arise if it did not exist. If dispensing with such a standard would cause no problems, it is probably an meaningless restriction and ought to be abolished.Interchangeability The biggest advantage of standardization is interchangeability. When part of a system break down, it is extremely economical if the malfunctioning part can be replaced without having to renew the whole system. Interchangeability also makes dividsion of labour possible. For example, since the dimensions of light fittings are standardized, light-bulb manufactures can concentrate on makin light bulbs wile socked manufactures can specialize in making sockets, independently of each other. Nor are the benefits of interchangeability limited to material objects; when work is performed in accordance with design standards, operating standards and so on. The result is the same whoever is doing the job. This normally insulates an organization from the effect of changes in its personnel. Artistic creation is a strong expression of individuality, and it has a different purpose form economic manufacturing. In industrial production, people can not be allowed to disobey standards at a whim, Tape-recorder manufactures must conduct research into tape standards, and light-club manufactures can not ignore the standards for light-bulb fittings.Less time spent on thinking and communicating Formulas used in mathematics, physics and other sciences are a type of standard. Forexample, if the correct formula is known, a problem in dynamics can be solved even withoutunderstanding the underlying principles. If a standard drafting practice if prescribed, adraftsperson does not need to think about what drawing method to use. If strength calculationsare performed by applying a fixed formula, an engineer does not have to solve differentialequation each time. When standard parts are used their reliability is known without having to test them. Thus,much design and development work can be dispensed with and this permits designers to designhighly-reliable products by concentrating their efforts on new, untried parts and the interfacesbetween these and standard parts. There is also no need to show standard parts in drawings,because simply specifying the part number is sufficient. Likewise, if srandard test methods exist, this means that there is no need to think aboutthe test conditions each time. Another form of standard is a design manual, which is adistillation of the expertise of all pervious designers. It contains more technical experience thanany individual designer could use in a lifetime. BSPATIL
  12. 12. 12Production of more reliable products Novel products and processes are beset with reliability problems. Even Japan’s famousBullet Train network, which operated without serious mishap for 30 years after its inauguration,is no exception just after its inauguration, it was discovered that when it traveled in deep snowat the speed of 200 kilometers per hour. Problems occurred with the carriage wheels. The designengineers, renowned for their technical prowess and cautious approach, had failed to take intoaccount he effects of deep snow at high speeds. Even trying to think hard of everything issometimes less effective than conducting a single experiment. Standardized parts and processes are the fruits of past experience, and they are less likelyto cause problems though type may appear old-fashioned and unexciting. The greater thenumber of standardized parts and processes used, the fewer new ones are needed. This enablesdesigners, engineers, and others to concentrate on carefully testing the reliability of the newelements of products, permitting them to develop novel products with high overall reliability.Management by Standards When a fault appears in a product it is vital to trace its cause in order to prevent itsrecurrence. From the standardization viewpoint, there are three main causes of productmalfunction: 1) No standards were set; 2) Standards were set, but they were inadequate; 3) Standards were set, but they were not obeyed.When a product made to standards runs into trouble, something is wrong with the standard.Investingating a problem enables a better standard to be created. A company’s technology issupported by its engineers and its standards;’ as an organisation, its technology is stored withinits written standards. An organisation cannot make technical progress if mistakes result in nomore than are working of the faulty product or a learning experience for an individual engineer;improvement takes place and technical levels rise when standards are revised as a result ofmistakes. Although standardization is so important, some companies and divisions are slow topractice it. Preparing effective standards takes a certain amount of time, and it is difficult forpeople to find that time when they are fully occupied with the work at hand. Like planning,standardization is work for the future, but many managers are so engrossed in solving theirpresent problems that they show little interest in standardization. When trouble occurs, theyimmediately ask, “Whose fault is it?” rather than, “What caused it?”, searching for a scapegoatinstead of the cause. They then come down hard on whoever they think is to blame. In this situation, the managers’ subordinates give them distorted information the situationis incorrectly assessed, mistaken judgments are made, and one problem leads to another. It isvital management task to set and revise standards and ensure that the work is performed inaccordance with them. This must be done in order to stop fresh trouble in its tracks and preventproblems that do occur from cropping up again in the future. Management by standards meansconstantly referring back to the standards.1.7WHAT IS TOTAL QUALITY? In order to analyze and fully understand the term total quality, we may discuss somepopular definitions in the succeeding text. Total quality is defined as the mobilization of thewhole organisation to achieve quality continuously, economically and in entirety. BSPATIL
  13. 13. 13 According to Atkinson (1993) total quality is a strategic approach to product the bestproduct and service possible—through constant innovation. Concentration should not be only onthe production side but also on the service side of a business. General perception is thatimprovement in quality is possible only during production but total quality cannot be achievedwithout significant improvement in purchasing, marketing after sales service and a host of otherareas of business. Many companies may produce ‘zero defect’ products but the company’squality still is not right. There are other functions which can let the company down. The rightproduct delivered at the wrong time can have catastrophic impact on both buyer and seller. Aresearch report found that 95 percent of companies deliver their products late. This late deliverycan have just as bad impact upon future buying decision as can increasing the price of theproduct by 50 percent. Invoicing can also crate problems. Delivering the right product but invoicing incorrectlycan delay payment to the supplier for as much as 3 months or longer. Salesman promising theearth in back-up can leave the disappointed customer cold and indifferent to further tradingwith the company. Thus quality has to be 100 (not even 99.999…) percent and is theresponsibility of everybody. This quality with 100 percent utilization of all resources is what wecall total quality. Total quality not only satisfies but delights the customers by offering attractivefeatures in products and services. Total quality is needed to be supplied to customers by theIndian companies in their products and services.1.8Design The complexity of business problems, organizations, operational and service systems, thenumber of variables they involve, as well as the often chaotic environment to which they aresubjected make it difficult to use prior knowledge (in the form of mathematical models forexample) to construct and calibrate these systems. In these cases, experimentation is animportant approach to generate knowledge which can be used for effective analysis an decisionmaking. When a product is put to use, the number of intervening variables may be too large,some of which may also be uncontrollable. Further, experiments are usually costly: there nay bemany variables and potentially a great deal of experimental variation and errors, making theexperimental results obtained difficult to compare and analyze in a statistically acceptablemanner. For such situations, experimental design, when it is properly used, provides a set ofconsistent procedures and principles for collecting data so that an estimate of relationshipsbetween one set of variables, called explanatory a variables, and another, called dependentvariables, can be performed (even if there are experimental errors). For example, we might seekto build a relationship between supply delay (the dependent variable) and a number explanatoryvariables such as the number of transport trucks ( which can be controlled), weather conditionsand traffic intensity (which cannot be controlled). When variables can be controlled, this can beused to reduce the amount of experimental variation. In other cases, selection of the levelsassociated with these variables might be desired and valued in terms of some objectives function.‘The selection of variables’ levels is a design problem which we will consider at the end of thischapter. Both the experimental and design problems are extremely important and useful. Forexample, to test a production process in a factor, it might be possible to limit the number ofvariables (i.e. maintain them in control) which affect a product’s or a process’ performance bycontrolling some of the variables (e.g. the pressure, the temperature used in the process, and soon).Of course, experimental designs are not an end but a means to generate information analyzedata a make decisions. Even when such decisions are reached, they are based on forecasts, whichare in the best of circumstances only forecasts. There may be surprise4s and deviations fromstandards operating conditions. These deviations can be controlled through inspection andcontrol charts. Alternatively, it might be possible to design products or process (or both) which BSPATIL
  14. 14. 14would be insensitive to unexpected variations and perform equally well under a broad set ofconditions which we might not be able to control. When a product (or process) can perform insuch a manner over a large set of variations, it is said to be robust. Robust design then consistsof selecting controllable parameters which achieve a robust function (at a possibly lower cost). Arobust design implies ‘fitness to use’, even when there can be many unpredictable variations. Inthis sense, robustness is an essential feature of the design process, product or service, andseeks to ‘build quality in the product’. For this reason, robust design in often associated with‘off-line quality control’. This means that control is not performed on-line but off-line. To use experimental and robust design we require first that: (a) We define what we mean by quality in precise and operational terms; (b) We use TQM tools (such as Pareto charts, brainstorming, fishbone or cause – effect diagrams, data analysis techniques and other tools) to select the ‘vital few’ variables (which we will call factors, and that we will use in our experimental and robust design) which are most pertinent to our problem, both form economic and explanatory points of views. (c) We apply experimental design techniques to gather data which will be meaningful both statistically and economically. This data will be called experimental response. (d) Estimate a relationship between the response and the experimental factors (the independent variables). (e) Optimize the controllable parameters (i.e. the design factors) such that the system, the product or the production process being designed conforms to agreed upon desirable operating conditions and over a broad range of environmental and uncontrollable conditions. (f) Finally, we test, inspect and verify the product or process performance to ensure that it is operating in conformance to the defined standards, and leads to a business process optimization (measured in terms of profits, consumers satisfaction and their variability) Definition of quality Planning of Factors experiment definition Statistical analysis Economics criteria Design and Robust design robustness engineering efficiency Tests, SPC/ SQC, controls FIGURE : 1.2 THE CONCERNS OF QUALITY MANAGEMENT BSPATIL
  15. 15. 15In figure: 1.2, we summarize the concern for quality and the intensive use it makes of TQM tools,experimental design, statistical analysis, applying economic and robust design and, finally,inspecting and testing to verify that the results conform to the design intentions. To achieve meaningful experimental results, experimental design reduces experimentalerrors through a choice of experimental plans, the control of factors (by blocking them tospecific values) and the application of statistical techniques such as randomization, confoundingand replication.1.10 Attributes of a Good Design A good design reflect an optimal trade-off between cost and performance. A good designis one which as: Cheap; Operates well over a large range; Compatible with related precuts;Cheap and Simple It is easy to make a design more complicated, but it take genius to simplify a design. Thevirtues of simplicity are many. Simple designs are cheaper to produce than complex designs,because complexity requires precisions, and high precision is more difficult to achieve than lowprecision. Simplicity means minimizing the number of parts In a product. The number of parts innew generation dishwashers, cars and watches have been reduced by up to two-thirds comparedto old designs. Construction, too has been simplified. For example, instead of assembling partswith screws and fasteners, these can now be grouped into sub-assemblies and mounted uponmolded frames that snap together. Costs are reduced as a result of: Fewer suppliers, less administration and supplier supervision and fewer supplier-related problems. Quicker assembly and production. Increased robustness Reduced cost as a result of 1,2 and 3 and the benefits of standardization. Greater customer satisfaction as a result of 1,2,3 and 4.Integration and process capability Good design requires not only a clear customer focus, but must integrate with theorganization’s technology, culture, market orientation, and so forth. Product design should be anopportunity for the organisation lead from strength. This means that designers must take intoaccount the process capability of their organisation. Process capacity basically means: Can we doit? The time to discover whether capability exists is at the design stage. This is so obvious,and yet it is surprising just how many products and services are launched without the basiccapability to pursue them. Process capability analysis must cover all aspects of an organization’s activities. It is notonly an organization’s ability to produce a particular design which matters, but also whether Itcan distribute and market it. Where new products or services are envisaged the organization’sskill and knowledge base are critical factors: such capability has to be cultivated like a garden.Money alone is insufficient, as the large investment houses discovered when they entered thefinancial services markets following liberalization during 90’s. BSPATIL
  16. 16. 16 Investment houses tried to beat the competition by continuously poaching the ‘best’people and investing in computers, never acknowledging that no one really understood the newbusiness. Instead of developing capability through training and on-the job experience, manyinvestment houses spent years money to create incompetence. It is critically important that managers ensure that the necessary process capability existsor can be developed in time. Hard evidence is essential. A simple but powerful approach is todifferentiate between the following three categories of information: 1. Known 2. Unclear 3. Assumed There is, for example, a difference between obtaining confirmation that the bank will lend money to finance a project and assuming that it will oblige in this way. Assumptions are often unavoidable in decisions about process capability, but they become dangerous when people treat them as ‘knows’. Exposing assumptions is one of the most valuable roles a manager can play in capability analysis as people so easily forget that their ‘knowledge’ is but an assumption. We ‘know’ that the but will take us to Madras because it says ‘Madras’ on the destination board. Yet we cannot be certain that it will do so again, however reasonable the assumptions. 1.11 ACHIEVING A ROBUST DESIGN The variations a product experience in manufacturing are negligible compared with the variation it is subjected to once it passes to the customer. Whereas the concept of zero defects is based upon the Idea that reduced variation in the manufacturing processes leads to reduced variation or failure in the field. Designing in order to reduce product failure in the field simultaneously reduces the likelihood of defects in the manufacturing process. The logic of the argument is as follows. The zero defects approach focuses managerial attention upon ensuring that processes are within acceptable deviations from targets, for example, plus or minus 0.001 millimeter thickness. Any departure from the nominal value means a loss. A bar of chocolate which is slightly below the target value started on the wrapper results in a loss to the purchaser. The manufacturer too may suffer a loss. For instance, the cumulative effect of so many underweight bars may mean boxes cannot be packed as tightly as they should be, resulting in damage in transit. Loss is also incurred if the bars are slightly above the mid-value. For instance, a surplus of three grams multiplied by 1,00,000 bars in 3 kilos of raw material, plus additional handling costs. the customer too may suffer a loss. Taguchi, for instance, quotes the case of the person on a diet eating a product which is a three grams heavier than anticipated. Likewise, is some of the components of a car are above the mid-value the increased weight may result in greater fuel costs. The real weakness of the zero defects approach, however, is that in any batch of products, a significant number will be close to the outer limits of the tolerance levels. Further, many of the other components which comprise the finished product will be in a similar state. This can play havoc with quality. The consequences of variation in a system are potentially catarascopic. A jet aircraft manufactured within the tolerance limits might contain a large proportion of components which are virtually defective. The result is known as ‘tolerance stack-up’. BSPATIL
  17. 17. 17 Consistency reduces the probability of catastrophe ‘stack-up’ because components all vary. In the same way, even if they are all off-target. Conversely a product which conforms to plus or minus specifications is less robust, because the deviations are random and therefore unpredictable.1.12 SPEEDING UP THE DESIGN PROCESSThe Pressure : Product obsolescence is a major problem for many organizations. Theenormous pressure to innovate and market new products quickly means that the danger ofIll-consisdered designs passing into production is high. The problem is exacerbated in aphenomenon known as escalation. As Figure – 1.3 shows, costs increase exponentially once aproduct passes from the design phase into testing and production. The whole organisationbecomes involved, finance is raised, advertising campaigns are planned equipment is purchased,advance orders are taken, and so on. The process is extremely difficult to reverse and the longerit continues the greater the probability of bad designs becomes bad products. The problem fororganisatoins, therefore, is how to innovate quickly but soundly. COS Conc R&D Pre-Prod Produ FIGURE 1.3 COST BEHAVIOUR DURING DESIGN AND PRODUCTIONMarketing haste slowly Exhorting designers to work faster or to cut corners is counter productive. Although a‘ramped up’ organizational culture may help, the real solution is to recognize that whilst someparts of the design process can be speeded up, other parts need to be given more time. Concept design is the most important phase and the one which is least amenable topressure, at it requires originality and fresh thinking. They should be encouraged to feed theirintellect and imagination by undertaking travel, study visits and so forth, without the expectationof an immediate payback. Further, they need to work in an atmosphere where mistakes areregarded as progressive and where painstaking, high-quality work is valued. The research and development phase focuses upon new materials and new processesrequired to translate the design concept and ambitions into a workable model Product designinvolves translating the model into detailed specifications and drawings. These latter phases ofthe design process can be speeded up by; Integration Removing sources of delay Concurrent planning Each these is now discussed in turn.Integration BSPATIL
  18. 18. 18 Integration involves the creation of interdisciplinary terms encompassing design,manufacturing and marketing staffs. Engineers would develop the basic product. Once this wascomplete, designers then added the so-called ‘wrap-round’. Then the manufacturing section hadto work out how to product it. Incorporating these three functions in one departments andcarrying them out simultaneously has reduced the lead time for new products by over one year.Removing sources of delay Over-control is a major source of delay, so: Keep the brief clear and simple. Minimize the amount of detail in design specifications Ensure designers understand customer needs and production capabilities.The purpose of a design brief should be to liberate designers. It should therefore be confined toessentials, i.e. specifying a maximum of three or four variables.Concurrent planning Quality requires attention to all aspects of a product. Design must therefore consider awide range of issues, including: Customer performance specifications Design specifications Manufacturing specifications Sales specifications These, too, should concentrate on essentials, those features which are important to thecustomer. Beware of specifying even essentials too tightly. Fine tolerances are rarely necessary andonly make the problem of controlling variability needlessly difficult. Aim for ‘loose tolerances tightly enforced’, rather than ‘tight tolerances loosely enforced’. If a customer insist upon tight tolerances, ask why he needs them. Rapid specificationsare often a power ploy by which to ‘screw down’ the supplier.1.13 THE WORK PROCESS SYSTEM CONCEPT Production is carried out by a multitude of work process system. Figure- 1.4 schematicallydescribers such a system with inflowing resources, transformation processes, and out flowingproducts and services. Any productive system is embedded in an economic and socialenvironment with which it constantly interacts. In this context quality assurance has to be namedas one of the man subsystems of a process system. Other subsystems are the capital and cash flow system, manpower planning, managementinformation, and decision making systems. These subsystems are conceptually and practicallyinterdependent and interactive. One can also distinguish work process systems with reference tothe managerial levels of responsibility in a corporate production system in which the plants,branches and individuals jobs and operational systems are subordinated and integrated. Work process systems are not restricted to manufacturing industries, where materials,parts and suppliers are transformed into higher values goods. Practically any business orenterprise uses various resources in order to sell its products and services in the market.Therefore, retail stores, theaters, insurance agencies, and so on, are all to be considered asproductive systems. BSPATIL
  19. 19. 19 PROCESS OUTPUT INPUT FIGURE : 1.4 WORK PROCESS SYSTEMS1.14 CATEGORIES FOR WORK PROCESS SYSTEMS Categories for work process systems that aid their conceptualization and design are, forinstance: 1. Custom built: One in which customers place their order with the producer or supplier before actual production. This enables both partners to specify quality and other conditions, to meet the customer’s particular requirements. 2. Repeat orders: One in which customers place an order ‘for an Item that is already produced or fully designed and standardized. 3. Mass production: Product with standardized items differing form job shop production or production of custom – made items that use intermittent production processes. 4. Projects: They describe production of large items with considerable complexity and uniqueness. 5. Services: Production (provision) of services, normally with direct customer contact before and during production. Such services industries include transportation, public services, insurance, professional services, and the like. These are the main types of productive systems as they occur in reality. Other differentiations can be made such as between small and large businesses. Each type of system has certain aspects in common, and these help to plan products and production more adequately. Managers can orient themselves by common aspects of relevant types and thus simplify their planning. Once the overall production has been properly established, the design of a suitable quality assurance system is also greatly enhanced. Table 1.2 gives some examples of work process systems quite familiar to us. TABLE : 1.2 EXAMPLES OF WORK PROCESS SYSTEM Work Process Major Inputs Assembly Major output Systems Electronic Components, Assembly T V set assembly Sub-assembltes Printing Original Copy Editing, Proof, Book printing Management in Corporate goals Planning, Directives, general supervising, decisions, reports, BSPATIL
  20. 20. 20 recoding, information analyzing Quality assurance Quality Designing Satisfactory quality specification; inspecting, training image standards audit1.15 PLANNING AND CONTROL OF WORK PROCESS The planning and control work process more through the phases similar to thosedescribed for planning cycles. The main phases are the system design, the startup, themaintenance, and the termination. These phases describe the life cycle of a productive system. Ifthe productive system is associated with one particular product, as is usually the case in projecttype productions, then the product life directly determines the productive system’s existence. If,for instance, the quality of a directly determines the productive system’s existence. If, forinstance, the quality of a product builds a sound quality image in the market, then thesupporting productive system and its quality assurance subsystem are strengthened as well.Effectiveness of planning and control enhances growth and length of life. In order to plan andcontrol a productive system, each case must be clearly defined and delineated. A useful startingpoint is to determine the output (current or expected), because the purpose and objective definethe productive system. For instance, if the purpose is to assure the quality of a computer chip,the product would have to be specified with regard to application, design criteria, and so forth,along with quantity, delivery mode and timing, location of market, and production and resourcebases. By clarifying the output in terms of the material, time, and place dimensions, processcapacities and inputs can then also be determined. Once the work process is conceptualized in general aggregate terms, the varioussubsystems, such as the quality assurance system can be designed. Various aspects, such as themanagement system, subsystem, plants, departments, and specific markets or customers, eachhaving a direct relationship to the expected output, help to define the quality assurance systemunder consideration. There one can see that the systems view is a powerful management aid andbasic for any systematic planning and control of production and output quality. Each phase of the system life demands specific planning and control activities andmanagement involvements. Forecasts of developments and control information induce frequentreview and correction in design, startup and other aspects of production. These phases can havea multitude of complex detailed planning objects and problems. When phrase as questions,problems are more easily understood. Actually asking the right question at the right time to theright person, makes a manager and planner proficient.1.16 SIGNIFICANCE OF QUALITY Quality of a product or service to an organisation is as important as sound health to ahuman-being. If a person is not feeling well, it will affect the human-body. Similarly, the qualityis a vital factor in shaping the future – well being of an organisatoin. The quality of a productaffects an organization’s reputation and image, productivity, costs, profitability and its liability tothe customers. These factors are discussed as follows: (I) Reputation and Image: Consumer is the king of the market. He will decide the fate, future of the organisatoins. Consumers always desire qualitative products at a reasonable price prices. If an organisation manufactures products as per the expectations of the customers, the quality of the products will infuse image and reputation on the organisatoin. Therefore, the organisation has to devote adequate attention to quality of the products will infuse image and reputation on the BSPATIL
  21. 21. 21 organisation. Therefore, the organisation has to devote adequate attention to quality of its products and services, a failure in this regard can damage the organisatoin image and perhaps lead to a decreased share of the market in case of a profit making organizations or increased criticism or controls in the case of a government agency or non profit making organisation. (II) Costs Quality of a product or service is generally associated with the costs incurred by the organisation. Cost is also an important factor to increase the reputation, image and market share of the organisation. Poor quality increases certain costs like scrap and rework costs, replacement and repair costs after purchase, warranty costs, inspection costs, transportation costs, payments to customers and discounts offered to customers to offset the inferior quality. Thus costs are important factors affecting quality of a product or service. (III) Productivity Productivity generally refers to the relationship between and input and output.Productivity and quality are often closely associated. Poor quality can adversely affectproductivity during the manufacturing process if parts are defective and have to be reworked, orif an assembler has to try a number of parts before finding one that fits properly. Similarly, poorquality in tools and equipment can lead to injuries and defective output which must be reworkedor scraped, thereby reducing the amount of usable output for a given amount of input. (IV) Organization’s Liability Organisation is liable to the customers for the quality of it’s product or service. Organisatoin must pay special attention to their potential liability due to damages or injuries resulting fro either faulty design or poor workmanship. Thus, a poorly designed or improper assembly of steering arm on a car might cause the driver to loose control of the car. The organisatoin liability costs can often be substantial, especially if large numbers of items are involved, as in case in the automobile industry. The above factors indicates the importance of quality. Therefore the management has to devote adequate attention in designing the quality of the product, conformance of the product to the plan and so on. If he organisation fails to do so, the poor quality of a product and service will adversely affect the costs of products, reputation and image of the organisation, productivity and profitability and the liability to the customers.1.17 QUALITY OBJECTIVES An objective is a statement of the desired result to be achieved within a specified time.Whereas policies provide broad guidelines on company affairs, objectives define specific goals.These goals then from the basis of detailed planning of activities. Objectives can be short range(say, 1 year) or long range (say 5 years). The concept of management by objectives is widespread.Under this concept, managers participate in establishing objectives, which are then reduced towriting and become the basis planning for results. Objectives may be created for breakthrough or control. There are many reasons whycompanies create objectives for breakthrough: 1. They wish to attain or hold quality leadership. 2. They have identified some opportunities to improve income through superior fitness for use. 3. They are losing market share through lack of competitiveness. BSPATIL
  22. 22. 22 4. They have too many field troubles – failures, complaints, returns – and wish to reduce these as well as cutting the external costs resulting form guarantee charges, investigation expense, product discounts etc. 5. They have identified some projects which offer internal cost-reduction opportunities, e.g. improvement of process yields or reduction or scrap, rework, inspection, or testing. 6. They have a poor image with customers, vendors, the public, or other groups of outsiders. 7. To improve motivation and morale among the employees.1.18 SETTING OF OBJECTIVES Objectives serve as a guide for the decisions and actions necessary for theiraccomplishment. They are further described in the form of sub goals and subtasks. At the sametime, objectives themselves are decisions arrived at after careful consideration of the need,desirability, and feasibility for them in the given context.Some questions to be answered are the following: 1. What should the elements in such a program be? 2. What published quality program standard should be complied with? 3. Should the program include design assurance or should it just be a defect-corrective inspection system? 4. Should the program involve a radical change in current control practices and procedure (a breakthrough), or a more gradual change and improvement? 5. What individual projects and project goals would lead to development and implementation of such a quality control program? 6. Who should be in charge of such projects and who should participate? 7. What deadlines should be set for the accomplishment of the quality control program and for the individual milestones leading up to it?All these questions and many more, require answers that will lead to the formulation ofinstrumental goals and task assignments. The quality related hierarchy of objectives, goals, andtasks will follow the sequences. This kind of structuring provides for systematic delegation of responsibilities from the topdown to the operational functions in a company, and thus for wide participation in determiningtasks and responsibilities, and for constructive communication and rational decision making.Objectives for better quality and quality assurance can readily be understood by the companystaff, particularly when the need is obvious and the possibility of blaming others no longer exists. Corporate and senior management can use quality assurance objectives for the purpose ofachieving general improvement in operations and staff cooperation. The new and innovativequality control program will require major changes in production planning and control, newpurchasing procedures, introduction of quality and operation- related audits, and othermeasures that will have impact on the general work life in the company.Major Principles There are may principles that should be observed when setting quality assuranceobjectives: BSPATIL
  23. 23. 23 1. The need for greater quality assurance efforts should be convincingly demonstrated and analyzed. Otherwise, objectives will not be perceived as important challenges arid the probability for optimal attainment will be reduced. 2. Objectives must be realistic in view of the financial and human capacity of the company. Ends and means need to be tested as conflicts between them usually create frustration and disharmony. In working for quality assurance, such adversity can very quickly become counter – productive. 3. Objectives must be clear, acceptable, and aligned with policy statements. Visible management input and approval must exist at all times together and in compliance with: Existing codes and standards Facilitation of wide participation of all Allowance for independent decisions and partial goals setting Coordination of objectives, goals, and individual tasks for quality assurance. Translation of goals and tasks into fair and workable performance standards. Visible and meaningful recognition for goal achievement Fair and sufficient support in case of difficulties. Possible revision of tasks and goals and AdaptabilityRules and Procedures Most of the rules for sound goal setting seem to be common sense, although theirviolation frequently leads to just [conditions in a company that breed poor workmanship andpoor quality, The style of goal setting for quality assurance, as well as for other outcomes andachievements, depends on senior management policies arid the personalities involved. A chiefexecutive officer must see to it that laws, codes, regulations, and directives horn governmentsources are complied with. On the other hand, they must also represent the interests of thecompany and thus actively contribute to quality assurance, not only internally, but also externally.For instance, many major customers impose compliance with published quality assurancestandards, such as ISO-9000, ISI and so on. Corporate officers have ample opportunity toparticipate in the writing of these standards and to participate in setting quality assuranceobjectives in their industry.Methods and Practice Methods for goal setting range from independent conception, formulation, andcommunication by the boss to more participatory approaches. The latter type of approachinvolves the operational staff by the use of quality circles or the more conventional projecttreams. Through such dynamic goal setting at the grass roots levels, many problems obstructingproper task achievement and workmanship can be overcome without direct senior managementinvolvement. At the same time, more serious and general problems and opportunities forimprovement in current quality assurance can be monitored and brought to the attention ofsupervisory management. Active and comprehensive goal setting for better quality assuranceshould proceed from the top to the bottom and, to be realistic, also in the reverse order. The recently developed and most frequently applied institutional arrangement is theformation of project teams, each having been assigned specific goals and tasks. Such projectteams allow direct input and participations of senior, as well as other, managerial and BSPATIL
  24. 24. 24operational levels of staff. Depending upon the need and the environment, the formation andexecution of critical projects becomes a significant milestone in the improvement of quality. In many cases, special tailor-made planning is needed for each key project. The exactform of such a project is decided upon by a combination of the following: 1. Assessing the status quo. 2. Analyzing customers’ complaints 3. Analysis of major failures and defects, using histograms, and other similar methods. 4. Base line audits to determine strengths, weaknesses, and voids in current programmes. 5. Comparing the existing program with generic standards. 6. Deriving goals form existing corporate objectives and policies 7. Considering the setting of tasks and methods at the operator level.1.19 QUALITY AND UNCERTAINTY Uncertainty has several and simultaneous on quality, as will be studied later. Obviously, ifvalue added is quality, and if its is well defined, the measure of that value is what makes itpossible to distinguish between various qualities. When value added is uncertain or intangible,its measurement is more difficult, and therefore quality is harder to express. In this sense,uncertainty has an important effect on the definition, measurement and management of quality. How does uncertainty affect? First, a consumer may not be able to observe directly andclearly the attributes of a product. And, if and when he does so, this information is not alwaysfully known, nor true. Misinformation through false advertising, the unfortunate acquisition offaulty products, and poor experience in product consumption are some of the problems that maybeset an uninformed consumer. Similarly, some manufactures, although well informed of theirproducts’ attributes, may not always fully control the production of their products. Some itemsmay be faulty, the outcome of a manufacturing process’ complexity and the inherent difficultiesin controls. As a result, uncertainty regarding a product’s qualities induces a risk which isimposed on both the firm-producer and the buyer-consumer. This risk has a direct effect on thevalued added of quality, and is of course, a function of the presumed attitude towards risk. Theapproaches used to manage these risks, both for the firm-producer and the consumer-buyer,and how to share these risks, both for the firm-producer and the consumer-buyers, and how toshare these risks, is particularly important. Warranty contracts, services contracts, liability lawsand the statistical control of quality in a factory are some of the means available to manage theserisks, as we shall see throughout this book. Perceived risk has been envisioned as consisting of two essential components:consequences and uncertainty, for a consumer, uncertainty can be viewed as the ‘subjectivelymeasured probability of adverse consequences’. As such, we can postulate that the quality of aproduct is inversely related to its risk. A non-risky product, meaning a product having desirableconsequences with large subjective probabilities, is a quality product. For example, if we buy apart from some supplier, what would we consider quality? It may be several things, but generallyit will be defined in terms of an attribute of a part with desirable consequences, and littlevariation (i.e. high probability). Why were Japanese and European cars at one time consideredquality product? Buyers had the subjective estimation that these cars would not fail and requirerepairs, and with a high probability! In this sense, quality is consistent with an inductivereasoning which is reinforced once consumption experience of the product is registered. Forexample, Jacoby and Kaplan attempted to measure quality by asking ‘What is the likelihood thatthere will be something wrong with an unfamiliar brand of XXXX or that it will not workproperly?’ Quality was meant then to be a perceptive attribute which can, or course, be BSPATIL
  25. 25. 25influenced by the marketing mix, good management of the factory, post sales attention andservices. Ingene and Hughes claims that a brand is perceived as being risky and thereby of lowerquality) by a consumer if an only if that consumer is uncertain as to what level (of at least oneattribute about which he/she is concerned) will be obtained if the product is purchased) Uncertainty regarding product quality has led to intensive legislation on product labelingwhich seeks to protect consumers on the one band and to convey information on the other.There are a number of important questions which may be raised by buyers and seller alike, forexample, the fat content of cheeses and hamburgers sold in supermarkets, the alcohol in wine aswe4ll as the origin of products. These do not always indicate quality. Some wine growers believethat the alcohol content should not be put on the wine label. By doing so, alcohol is given animportance and a relevance to wine quality which it does not, in their opinion, have. Cheeses, ofall sorts, vary over the year and, therefore, the fat content of the mild is really a relative measure(to the time of the year in which it was produced as well as relative to the origin of the mild usedin its production). In the case of Normandy Camembert, there is further confusion since there arenot enough cows in Normally to produce even a fraction of the Camembert sold tinder this label!In other words, even a label of origin can be misleading. In the early 1950, for example, someJapanese products, suffering from a poor reputation, had a label of made in USA, meaning theJapanese products, suffering from a poor reputation, had a label of made in USA, meaning theJapanese city of USA. To simplify the labeling of products, colored labels are also used. A redlabel for chickens in a supermarket is a mark of quality, but under such labels there can be widevariety of chickens which need not have a uniform quality (even though they are all labeled withthe same color). In fact, a chicken ‘color’ may stand for similar origins, similar growing orfeeding conditions, or perhaps just cooperative marketing. Although uncertainty is not a property which defines quality, the measurement andperception of quality are directly affected by uncertainty, for this reason, an operational andeconomic definition of quality (which is the relevant one for businesses) is necessarily sensitiveto uncertainty. Due to the importance of this topic, we shall return to it subsequently. Next, weconsider manufacturing quality, which seeks to define the attributes of quality by themanufacturing processes. Such characterization is essential to appreciate the potential and thelimits of quality control in industrial and operations management.1.20 QUALITY IN MANUFACTURING Manufacturing quality, unlike the general concept of quality we sought to define above, iswell defined in terms of attributes which are associated to and required by a manufacturingprocess to operate without any fault. In this sense, quality is a characteristic and a requirementof the industrial apparatus. For example, a factory floor with machines that break down often,machinery that is unable to operate at the required levels of precision, or uniformity ofoperations, arid general manufacturing systems with a propensity to produce highlyheterogeneous quality products are an expression of a manufacturing unquality. Management ofoperations and quality control are thus the means used to ‘produce’ and control quality inmanufacturing.There may be several dimensions along which such manufacturing quality may be defined,including: 1. The propensity to maintain the manufacturing process in control, i.e. operating according to agreed on standards of manufacture. 2. The propensity of the manufacturing process to produce items or product faultlessly. BSPATIL
  26. 26. 263. The propensity to maintain (and or reduce) the manufacturing process variability, i.e. limit process instabilities by maintaining the process repetitively.Thus, agreed on standards, faultless production and repetitively and control of variations areused to define manufactured quality, in practice, manufacturing quality is easier to measure‘negatively’. In other words, it is a reflection of a negative performance (rather than a positiveone, which is, or should have been, the standard). As a result, the ideas underlying themanagement of quality in manufacturing relate to the management of the process and not tothe design of the product. This measure of quality is defined in terms of characteristics whichare important and related to the management of the manufacturing process. In this sense,the measurement of quality is also an incentive for the control of quality. Or course it ispossible, through appropriate integration of both product design and the manufacturingprocess, to let one facet of quality management (its conception and design) affect the other(the process of manufacturing the product). Although this is increasingly recognized as animportant activity known as ‘predictability’, or ‘concurrent engineering’, is has not yet fullymatured (albeit, it is the topic of intensive research today). In a conventional sense, a processin control would evidently results in products of a better quality than a process which is notcontrol. As a result, by improving the controls, we will be able to increase the propensity tomanufacture products of better quality. For example, in the manufacturing of certain high precision metallic items, there may bemany objective attributes which could be measured and tested for deviations from acceptablemanufacturing standards. These may include the location of holes, their sizes (which oftenrequire extremely high precision), concentricity, symmetry, and so on. These attributes aremeasured for the purpose of controlling the processes which are used in making up aproduct! In other words, measurements (tests) are made to detect causes of malfunctionneeded to control the manufacturing process. For these metallic parts, there may be manycause which contribute both to defective manufacturing or to excessive variations frommanufacturing standards. Lack of geometric perfection, stress factors, materials stability, theambient temperature, lack of perfect rigidity, etc. may be some of these factors. Themeasurement and detection of the sub-standard performance provides the incentive forcontrol and correction. Thus, just as conceptual or design quality, manufacturing quality is a complex conceptwhich should be clearly understood before trying to manage it. A comparison of severalaspects of quality are given in Table: 1.3 to provide some further comparisons betweenmanufacturing and design quality. TALE 1.3 DESIGN AND MANUFACTURING QUALITY Design quality Manufacturing quality Durability Reliability Esthetics Conformance to standards Attributes’ desirability Process variability Objective performance Consistency Intangibles TangiblesA manufacturer concerned with the production of quality products or services uses varioustools, statistical and otherwise, as we shall see later on. Statistical tools are used in particular BSPATIL
  27. 27. 27when uncertainty has an important effect on the manufacture of quality in such cases, poorquality is usually produced due to variations and uncertainties regarding the processoperations and performance. When performance variations are totally random, unaccountedfro by any malfunction or cause, they reflect a characteristic of the manufacturing process,the type of materials used and the process at hand. When product quality or their attributersto not deviate from a purely random pattern, the manufacturing process is said to be out ofcontrol. In this sense, the management of quality in manufacturing consists of determiningdepartures from a state of perfect randomness. The techniques called Statistical QualityControl (SQC) and Statistical Process Control (SPC) are used to elaborate and apply tests ofrandomness of various sorts to measure and predict departments from this state of perfectrandomness. The increased need to control statistical variations, and thereby the need to control amanufacturing process and its environment, have been ushered in by production conceptsdeveloped in the first industrial revolution. These concepts, although complex and numerous,presume that production standards and producing up to these standards ore essential toguarantee the substitutability of ports used in a moss production system. Takingresponsibility away from workers and their alienation at the beginning of the century inparticular has led to the necessity to control their work through work sampling and othermethods used to predict and manage the statistical variations which occur in manufacturing.These basic tenets of quality management have recently been subject to scrutiny, motivatedby a concern for a broader view of quality management, a view which takes account of thewhole manufacturing system, distribution, service and business processes, and seeks toproduce quality rather than to control some process variations (although this is also animportant part of this broader view). This emerging approach is called Total QualityManagement. In addition, and more recently, a ‘quality trauma’ has been ushered in by theincreased power of consumers, and by the fact that there can not longer be any justificationeconomic. Managerial and technological for producing poor quality. Japanese inroads intoquality control techniques made in the last two decades have been an example to this effectand it has led firms to re asses their priorities in terms of the control and management ofquality. Based on such premises, we can appreciate the inroads made towards improvedquality by corporate boards, and its integration into business strategies. Quality is Free(Crosby) and Quality on the Line (Garvin) are samples of work which highlights a growingconcern for re-valuing and re-evaluating the place and contribution of quality inmanufacturing and its control.As a result, basic and past tenets regarding quality in manufacturing have been questionedand revised. For example, it is currently believed that: Quality is not only a cost, it is also a potential benefit, a value added to the manufacturer which can be translated into added sales and profitability. There are, however, still difficulties in measuring the potential benefits of quality which are essential in including managers to take the proper courses of action to improve quality. Quality is not only process-specific but is total concept, involving everybody! This is the message of Total Quality Control (TQC). In other words, the problem is not only the control of statistical variations in a manufacturing process, but the basic question of producing quality in its broadest sense. In other words, the re-evaluation of quality in terms of its costs, tractability and integration has created an opportunity to re-design and reposition quality, quality improvement and control where they were always supposed to be this transformation has of course brought quality to people to the organisatoin, to processes, to services and, in the process, it is transforming production management both in design objectives and in BSPATIL
  28. 28. 28operational procedures. For example, from a ‘robotics notion of people to one based farmore on motivation. For example, from ‘robotics notion of people to one based far moreon motivation and incentives to perform from de-responsibilization to responsabilization.A reminder from Michelin’s workers’ book on profit sharing:The care brought by each worker in his work is the essential capital of the factory:Implies and recognizes (already prior to the turn of this last century) that quality is afunction of a worker’s involvement in the work process and the responsibility he isassuming, not only with respect to his own work (i.e. his auto-control), but also withrespect to the collective (i.e. Total Control). In a practical sense, the reconciliationconcordance and coherence of ‘auto and collective controls’ underlie approaches to thecontrol of quality. The emerging re-definitions of quality are of course leading to new objectives inprocess and product design. Terms such as robustness are also becoming much morefashionable and appropriate. A robust design will, for example, safeguard a standardoperating performance against departures from pre-specified conditions. In this vein, aproduct’s quality cannot be assessed in terms of its performance in a laboratoryenvironment, but in the ‘real world’, while it is being used by people who may or may nothow best how to use the product. Then, robustness is a measures of the latitude ofconformance of the product to the user and not to that of the process. For these reasonsquality in manufacturing is a fast changing concept which today seeks greater robustnessin the definition of what we ought to look for to improve and produce quality productsand services. The broader view of quality and the complexity of modern firms, combined with acommensurate need to define measures of quality, have of course led to an expansion ofthe dimensions along which the manufacture of quality ought to be considered.Presenting an integrated view, Garvin suggests eight dimensions: Product performance,Product Features, Reliability, Conformance, Durability, Serviceability, aesthetics andPerceived quality. For the management of quality it is essential to translate thesedimensions into economic values and Costs of Quality (COQ). These will include direct andindirect effects. Some internal costs we might consider include: Planning and Trainingquality programmes; Inspection and Testing; Failure and Scrap and Rework-Repair;Inventory added due to poor quality; Process and delay costs due to stoppages, Capacitylosses; Human relations related costs, External costs might include: Warranty and liabilitycosts; Servicing; Goodwill and sales; and finally, Costs due to regulatory agenciesinterventions. These costs, properly assessed and combined with the operational costs ofmanufacture and the potential contributions of quality to the firm competitiveness,provide notions of manufacture quality which must be understood and valued. In isthrough such comprehension and valuation that we can affect every facet of the firm andthereby make it possible for quality to become strategic and he managed. These problemsare of immense importance, so we shall return to their study in far greater detail insubsequent chapters.1.21 QUALITY AND SERVICES Quality in services exhibit special characteristics. Some of these characteristicsinclude: The quality of service generally involves not one but multiple services. For example, a gas station provides several services beyond the supply (usually at a regulated price) of fuel. Hotels provide a room and various associated services. BSPATIL

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