Quality Management An Overview - NICMAR - October 2007

QUALITY MANAGEMENT AN OVERVIEW PEM 2007-09 NICMAR October 2007

One of the most important issues that businesses have focused on in the last 20-30 years has been quality .

As markets have become much more competitive - quality has become widely regarded as a key ingredient for success in business.

Meaning of Quality

Webster’s Dictionary

degree of excellence of a thing

American Society for Quality

totality of features and characteristics that satisfy needs

Consumer’s and Producer’s Perspective

This is a modern definition of quality

This is a traditional definition

Quality of design

Quality of conformance

What is quality?

Quality is first and foremost about meeting the needs and expectations of customers. It is important to understand that quality is about more than a product simply "working properly".

QUALITY

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

“ Quality is defined as meeting or exceeding

customers requirements now and in the

future,

i.e. the product or service is fit for the

customer’s use.”

quality as representing all the features of a product or service that affect its ability to meet customer needs.

If the product or service meets all those needs - then it passes the quality test. If it doesn't, then it is sub-standard.

What is Quality?

Fitness for Use

Conformance to Specifications

Producing the Very Best Products

Excellence in Products and Services

Total Customer Satisfaction

Exceeding Customer Expectations

Quality improvement starts with reducing Product VARIABILITY.

1 What is Quality?

Inspection (Detection)

Quality Control (Detection using statistics)

Quality Assurance (Prevention)

Zero Defects e.g. ISO 900 1 :2000

Total Quality Management

e.g. EFQM Excellence Model

Statistical Quality Control (SQC)

The application of statistical techniques to the control of quality (SPC, Acceptance Sampling, etc.)

Statistical Process Control (SPC)

The application of statistical techniques to the control of processes (sometimes considered a subset of SQC)

Total Quality Management (TQM)

An all-encompassing approach to quality consistent with Deming’s “14 points”

Some definitions- Definitions from Quality Systems Terminology , American Society for Quality Control, ANSI/ASQC A3-1987

Statistical Process Control

How do we reduce Product Variability?

We use Statistical Process Control ! (SPC)

Statistical Process Control : The application of statistical techniques to the control and improvement of processes.

Meaning of Quality: Consumer’s Perspective

Fitness for use

how well product or service does what it is supposed to

Quality of design

designing quality characteristics into a product or service

A Mercedes and a Ford are equally “fit for use,” but with different design dimensions

Dimensions of Quality: Manufactured Products

Performance

basic operating characteristics of a product; how well a car is handled or its gas mileage

Features

“ extra” items added to basic features, such as a stereo CD or a leather interior in a car

Reliability

probability that a product will operate properly within an expected time frame; that is, a TV will work without repair for about seven years

Dimensions of Quality: Manufactured Products (cont.)

Conformance

degree to which a product meets pre–established standards

Durability

how long product lasts before replacement

Serviceability

ease of getting repairs, speed of repairs, courtesy and competence of repair person

Dimensions of Quality: Manufactured Products (cont.)

Aesthetics

how a product looks, feels, sounds, smells, or tastes

Safety

assurance that customer will not suffer injury or harm from a product; an especially important consideration for automobiles

Perceptions

subjective perceptions based on brand name, advertising, and the like

Dimensions of Quality: Service

Time and Timeliness

How long must a customer wait for service, and is it completed on time?

Is an overnight package delivered overnight?

Completeness:

Is everything customer asked for provided?

Is a mail order from a catalogue company complete when delivered?

Dimensions of Quality: Service (cont.)

Courtesy:

How are customers treated by employees?

Are catalogue phone operators nice and are their voices pleasant?

Consistency

Is the same level of service provided to each customer each time?

Is your newspaper delivered on time every morning?

Dimensions of Quality: Service (cont.)

Accessibility and convenience

How easy is it to obtain service?

Does a service representative answer you calls quickly?

Accuracy

Is the service performed right every time?

Is your bank or credit card statement correct every month?

Responsiveness

How well does the company react to unusual situations?

How well is a telephone operator able to respond to a customer’s questions?

Meaning of Quality: Producer’s Perspective

Quality of Conformance

Making sure a product or service is produced according to design

if new tires do not conform to specifications, they wobble

if a hotel room is not clean when a guest checks in, the hotel is not functioning according to specifications of its design

Meaning of Quality: A Final Perspective

Consumer’s and producer’s perspectives depend on each other

Consumer’s perspective: PRICE

Producer’s perspective: COST

Consumer’s view must dominate

Meaning of Quality Fitness for Consumer Use Producer’s Perspective Consumer’s Perspective Quality of Conformance

Conformance to specifications

Cost

Quality of Design

Quality characteristics

Price

Marketing Production Meaning of Quality

Quality Gurus

Walter Shewart

In 1920s, developed control charts

Introduced the term “ quality assurance”

W. Edwards Deming

Developed courses during World War II to teach statistical quality-control techniques to engineers and executives of companies that were military suppliers

After the war, began teaching statistical quality control to Japanese companies

Joseph M. Juran

Followed Deming to Japan in 1954

Focused on strategic quality planning

Quality Gurus (cont.)

Armand V. Feigenbaum

In 1951, introduced concepts of total quality control and continuous quality improvement

Philip Crosby

In 1979, emphasized that costs of poor quality far outweigh the cost of preventing poor quality

In 1984, defined absolutes of quality management—conformance to requirements, prevention, and “zero defects”

Kaoru Ishikawa

Promoted use of quality circles

Developed “fishbone” diagram

Emphasized importance of internal customer

Evolution of Quality Management

1924 - Statistical process control charts

1930 - Tables for acceptance sampling

1940’s - Statistical sampling techniques

1950’s - Quality assurance/TQC

1960’s - Zero defects

1970’s - Quality assurance in services

Gurus!

The Quality Gurus

Walter Shewhart

“ Father of statistical quality control”

W. Edwards Deming

Joseph M. Juran

Armand Feignbaum

Philip B. Crosby

Kaoru Ishikawa

Genichi Taguchi

Key Contributors to Quality Management Table 9.2

The early 50s

Three gurus who took the message to Japan

Deming

Juran

Feigenbaum

Guru summaries adapted from Prof Tony Bendell Available at: www.cems.uwe.ac.uk/~jmcobby/industrialstats/qualitygurus.pdf and from http://www.qmtzone.f9.co.uk/html/guru.html

Dr W Edwards Deming

Deming (1900-1994) is arguably the most famous of all the Quality Gurus and is often credited with Japan's rise to industrial dominance.

He was born in 1900 and was awarded a doctorate in mathematical physics in 1928 by Yale University.

His approach to quality draws heavily on Shewhart's concept of statistical process control.

Deming's work had initially no impact in America primarily because in the postwar booming market, everything built was sold.

Dr W Edwards Deming

For many years at the start of his career he worked as a

statistician for the US Government Service, specialising in statistical sampling techniques.

After the war, in 1946, he went to Japan as an Adviser to the Japanese Census. The Union of Japanese Scientists and Engineers (JUSE) invited him to lecture on quality control techniques to engineers and senior managers. His contribution to rebuilding the Japanese economy was recognized by the Emperor who awarded him the Second Order of the Sacred Treasure (Bendell, 1991).

Dr W Edwards Deming

His main message to the Japanese was that variability is inherent in any process and is due to two types of causes, namely, special causes which are easily assignable, identifiable and solvable by operators themselves, and common causes which are due to design and operation and only management can eliminate. Deming argues that 94 per cent of the quality problems are the responsibility of management

Dr W Edwards Deming

Throughout the 1950s, Deming conducted many lectures in Japan on statistical methods. Included in these lectures were many of the principles now constituting the "company-wide" approach or TQM. Whilst much of Deming's message to the Japanese reflected his statistical background, his work extended far beyond statistical methods.

Dr W Edwards Deming

He encouraged the Japanese to adopt a systematic approach to problem solving, later to become known as the PDCA (Plan, Do, Check, Action) cycle. He also urged senior managers to become more actively involved in quality improvement programmes. It was not until the 1970s that managers in the West began to consider whether Deming's methods could do for their companies what they had done for the Japanese.

Dr W Edwards Deming

The PDCA cycle

PLAN DO CHECK ACT

Dr Joseph Juran

Born 1904 in the Balkans, naturalised American

Went to Japan in the early 50s

Highly respected internationally, particularly in Japan

Concerned with the wider aspects of management, beyond quality

Dr Joseph Juran

Manufacturing-based approach

Introduced the concept of the internal customer

See Kelemen p28 for his 8 step planning map.

Dr Joseph Juran

Quality trilogy

Quality Control Quality Planning Quality Improvement Holding the gains Breakthrough Pareto analysis Project by project

Dr Armand Feigenbaum

Two key texts:

‘ Quality Control: Principles, Practice and Administration’ 1951

‘ Total Quality Control: Engineering and Management’ 1961

Value-based approach

“ best for the customer use at the right selling price” (in Kelemen 2005 p29)

Total quality:

“ Quality is neither a department, nor a technique, nor a philosophy. It is a fundamental way of managing. Central to this is the recognition that, without quality, your customers…are simply not going to buy from you.”

www.managementfirst.com/quality/interviews/feigenbaum

Costing quality:

Prevention costs – planning systems and processes to avoid defects before they happen

Appraisal costs – inspection and quality control

Internal failure costs – scrap, rework

External failure costs – warranty costs, complaints

From the late 50s

Three Japanese gurus who developed the message

Ishikawa

Taguchi

Shingo

Dr Kaoru Ishikawa

Professor Ishikawa (1915-1989) studied Applied Chemistry at the Engineering Department of Tokyo University. During his life he was awarded many prizes for his work and writings on Quality Control and is best known as the pioneer of the Quality Circle movement in Japan during the 1960s.

Dr Kaoru Ishikawa

Like many of the Japanese "gurus", Ishikawa was keen to promote the use of statistical techniques in commerce and industry. In particular, Ishikawa believed that all employees should have a basic training in techniques such as: * Bar Charts and Histograms * Pareto Analysis * Scatter Diagrams * Cause and Effect Analysis

Quality circles:

A voluntary group of some 5-10 workers from the same workshop who meet regularly and are led by a foreman, assistant foreman, work leader or one of the workers.

Their aim is to:

contribute to the improvement and development of the enterprise by dealing with problems and looking for ways to improve the quality of the process and product

Respect human relations and build a happy workshop

offer job satisfaction via the drawing out of each person’s capabilities to achieve their potential.

Dr Kaoru Ishikawa

The ‘Fishbone’ or ‘Ishikawa’ diagram

Methods Equipment Materials People Result

Dr Kaoru Ishikawa

Away from his technical contributions, Ishikawa was a strong advocate of the Company-Wide movement. He saw this approach as implying that: "quality does not only mean the quality of the product, but also of after-sales services, management, the company itself and the human beings who work in it".

Dr Genichi Taguchi

During the Second World War he worked in the Navigation Institute of the Imperial Japanese Navy and then the Institute of Statistical Mathematics at the Ministry of Education. In 1950 he joined the Nippon Telephone and Telegraph Company and during his 12 year stay developed many of his methods.

Dr Genichi Taguchi

In the early 1970s Taguchi developed the concept of the "Quality Loss Function" and by the end of that decade was highly acclaimed in his own country. It was not until 1980 that Western companies, particularly in the USA began to implement Taguchi's methods. The most notable of these being Xerox, Ford and ITT. Taguchi had made little impact in Europe until the Institute of Statisticians organised a conference in London in 1987 to discuss his methods.

Dr Genichi Taguchi

The UK Taguchi Club, (now the Quality Methods Association) was formed later that year. Taguchi's methodology is geared towards pushing the concepts of quality and reliability back into the design stage, ie, prior to manufacturing. His method provides an efficient technique for designing product tests prior to beginning manufacturing. Taguchi methodology is fundamentally a prototyping technique that enables engineers/designers to produce a robust design which can survive repetitive manufacturing in order to deliver the functionality required by the customer.

Shigeo Shingo

Shigeo Shingo is the least known Japanese quality writer in the West. His approach emphasizes production rather than organizational issues, and it is thus manufacturing-based. He believed that statistical methods detect errors too late in the manufacturing process. Shingo's method emphasises 'zero defects' through good engineering and process investigation and rectification (Shingo, 1986).

Shigeo Shingo

His method, poka-yoke or zero defects, stops the process whenever a defect occurs, defines the cause and prevents the recurring source of the defect. The method relies on a process of continuously monitoring potential sources of error. The machines used in this process are equipped with feedback instrumentation that identifies errors before they become defects, so remedial action can be taken.

From the 70s

Later American gurus

Crosby

Peters

Phil Crosby

Philip Crosby is perhaps the most well marketed and charismatic of the American Quality Gurus. He is a graduate of the Western Reserve University, and after serving with the US Navy in the Korean war, he held a variety of quality control jobs. He spent fourteen years working his way up within ITT, eventually becoming Corporate VP and Director of Quality, with worldwide responsibilities.

Phil Crosby

In 1979 Crosby published his famous "Quality is Free" book, and as a result of that success, left ITT to form his own company, Philip Crosby Associates Inc. Crosby's name is most strongly associated with the "Do it Right First Time" and "Zero Defects" concepts. Crosby believes that most companies spend up to 5% of their operating revenues in correcting mistakes which need not have been made in the first place.

Phil Crosby

He does not subscribe to the view that workers should take primary responsibility for quality. He places great emphasis on the "top-down" approach, stressing that senior management is entirely responsible for quality

Phil Crosby

Crosby defines quality as conformance to requirements which the company itself has established for its products based directly on its customers' needs. Quality is an inherent characteristic of the product, not an added element. Crosby argues that management is to blame for the vast majority of the quality problems within an organization. Moreover, the most important performance measurement within an organization is the cost of quality and it is cheaper to get things right first time.

Phil Crosby

Crosby defines Four Absolutes of Quality Management:

Quality is defined as conformance to requirements, not "goodness" or "elegance".

The system for causing quality is prevention, not appraisal.

The performance standard must be Zero Defects, not "that's close enough".

The measurement of quality is the price of non-conformance.

See Kelemen p37 for his 14 steps to quality improvement

Tom Peters

Tom Peters is an American consultant who has researched into the secrets of most successful American companies. In his most popular book, In Search of Excellence (with Waterman, 1982) he presents Excellence as a universal icon that can guide businesses and sift through winners and losers. Excellence is synonymous with quality yet it is indefinable through objective and rational methods of research.

Tom Peters

In a second book, A Passion for Excellence (1985), Peters and Austin identify leadership as central to the quality improvement process. They see management by walking about (MBWA) as the basis of leadership for it enables the leader to keep in touch with the workers, customers and suppliers.

Tom Peters

In his third book, Thriving on Chaos (1987) he prescribes ways of bringing about a management revolution in the West. Such ways tend to focus on the end-user as the most important factor in judging quality efforts.

Quality management

Quality management is concerned with controlling activities with the aim of ensuring that products and services are fit for their purpose and meet the specifications.

Quality assurance

Quality assurance is about how a business can design the way a product of service is produced or delivered to minimize the chances that output will be sub-standard. The focus of quality assurance is, therefore on the product design/development stage.

QUALITY ASSURANCE

Why focus on these stages? The idea is that - if the processes and procedures used to produce a product or service are tightly controlled - then quality will be "built-in". This will make the production process much more reliable, so there will be less need to inspect production output (quality control).

QUALITY ASSURANCE

Quality assurance involves developing close relationships with customers and suppliers. A business will want to make sure that the suppliers to its production process understand exactly what is required - and deliver!

Quality Assurance vs. Strategic Approach

Quality Assurance

Emphasis on finding and correcting defects before reaching market

Strategic Approach

Proactive, focusing on preventing mistakes from occurring

Greater emphasis on customer satisfaction

Dimensions of quality QUALITY Performance Features Reliability Aesthetics Response Serviceability Durability Conformance

Dimensions of Quality

Performance - main characteristics of the product/service

Aesthetics - appearance, feel, smell, taste

Special Features - extra characteristics

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

Reliability - consistency of performance

Dimensions of Quality (Cont’d)

Durability - useful life of the product/service

Perceived Quality - indirect evaluation of quality (e.g. reputation)

Serviceability - service after sale

Examples of Quality Dimensions

Examples of Quality Dimensions (Cont’d)

Service Quality

Tangibles

Convenience

Reliability

Responsiveness

Time

Assurance

Courtesy

Examples of Service Quality Dimension Examples 1. Tangibles Were the facilities clean, personnel neat? 2. Convenience Was the service center conveniently located? 3. Reliability Was the problem fixed? 4. Responsiveness Were customer service personnel willing and able to answer questions? 5. Time How long did the customer wait? 6. Assurance Did the customer service personnel seem knowledgeable about the repair? 7. Courtesy Were customer service personnel and the cashierfriendly and courteous?

Determinants of Quality (cont’d)

Quality of design

Intension of designers to include or exclude features in a product or service

Quality of conformance

The degree to which goods or services conform to the intent of the designers

The Consequences of Poor Quality

Loss of business

Liability

Productivity

Costs

The Quality System Information Management Purchasing & Inventory Assessment Occurrence Management Process Improvement Customer Service Facilities & Safety Organization Personnel Equipment Documents & Records Process Control (QC & EQA) & Specimen Management

Competitive Advantage

The terminology used in the field

of strategic management that might possibly garner the prize for the most overworked and least understood catch-phrase is "competitive advantage."

The extension of that phrase into "sustainable competitive advantage" is currently an elaboration of ambiguity.

that which one firm can do better than another to satisfy customer requirements.

Some benefit value provided by a product or company, often unique to the organization concerned, that gives it superiority in the market place.

Condition which enables a company to operate in a more efficient otherwise higher-quality manner than the companies it competes with, and which results in benefits accruing to that company.

process by which a company studies the actions of its major competitors in order to determine what specific strategies they are following and how those strategies affect its own; also used by marketers as they try to develop competitive advantage s, ...

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