Introduction of Quality

2. Outline
 What is Quality?
 Why Quality?
 Cost of Quality
 Types of Quality Costs
 History of quality management
 The Three Quality Gurus

3. What does the word “quality” mean to you?
Think about a product you bought.
How can you define its “quality”?

4. Quality in different areas
Area Examples
• Airlines On-time, comfortable, low-cost service
• Health Care Correct diagnosis, minimum wait time, lower cost
• Food Services Good product, fast delivery, good environment
• Postal Services fast delivery, correct delivery, cost containment
• Consumer Products Properly made, defect-free, cost effective
• Automotive Defect-free
• Communications Clearer, faster, cheaper service

5. What is Quality?-Definition
 Cconformance to specifications (British Defense Industries Quality Assurance
Panel)
 Cconformance to requirements (Philip Crosby)
 Fitness for purpose or use (Juran)
 A predictable degree of uniformity and dependability, at low cost and
suited to the market (Edward Deming)
 Meeting the (stated) requirements of the customer- now and in the
future (Mike Robinson)
 The totality of features and characteristics of a product or service that
bears on its ability to satisfy stated or implied needs” – ISO 8402

6. More about Quality
Getting things RIGHT FIRST
TIME
‘It costs less to prevent a
problem than it does to
correct it’

7.  Quality is not fine-tuning your product at the
final stage of manufacturing, before packaging
and shipping .
 Quality is in-built into the product at every
stage from conceiving –specification & design
stages to prototyping –testing and
manufacturing stages.
More about Quality

8. Why Quality?
Reasons for quality becoming a cardinal priority for most
organizations:
 Competition – Today’s market demand high quality products at
low cost. Having `high quality’ reputation is not enough!
Internal cost of maintaining the reputation should be less.
 Changing customer – The new customer is not only
commanding priority based on volume but is more demanding
about the “quality system.”
 Changing product mix – The shift from low volume, high price
to high volume, low price have resulted in a need to reduce
the internal cost of poor quality.

9.  Product complexity – As systems have become more complex,
the reliability requirements for suppliers of components have
become more stringent.
 Higher levels of customer satisfaction – Customers
expectations are getting spawned by increasing competition.
Relatively simpler approaches to quality viz. product
inspection for quality control and incorporation of internal cost
of poor quality into the selling price, might not work for
today’s complex market environment.
Why Quality?

10. Quality costs are those incurred
in excess of those that would
have been incurred if the product
were built or the service
performed exactly right the first
time.
Cost of Quality

11. The cost of quality is generally classified into four
categories
1. Cost of Prevention
2. Cost of Appraisal
3. Cost of Internal Failure
4. Cost of External Failure
Types of Quality Costs

12. Quality Costs
Cost of Prevention
 Prevention costs include those activities which remove and
prevent defects from occurring in the production process.
 Included are such activities as quality planning, production
reviews, training, and engineering analysis, which are incurred
to ensure that poor quality is not produced.
Appraisal
 Those costs incurred to identify poor quality products after
they occur but before shipment to customers. e.g. Inspection
activity.

13. Quality Costs
Internal Failure
 Those incurred during the production process.
 Include such items as machine downtime, poor quality
materials, scrap, and rework.
External Failure
 Those incurred after the product is shipped.
 External failure costs include returns and allowances, warranty
costs, and hidden costs of customer dissatisfaction and lost
market share.

14. Quality is Central for Business
 Quality is Central to
protecting and
enhancing the “Brand
Reputation” of
Business.
 Quality issues can
have a huge impact
on profitability and in
the worst cases even
the survival of a
Business.

15. 15
History of quality management
…To know the future, know the past!
 Before Industrial Revolution, skilled craftsmen served both as
manufacturers and inspectors, building quality into their
products through their considerable pride in their
workmanship.
 Industrial Revolution changed this basic concept to
interchangeable parts. Likes of Thomas Jefferson and F. W.
Taylor (“scientific management” fame) emphasized on
production efficiency and decomposed jobs into smaller work
tasks. Holistic nature of manufacturing rejected!

16. 16
 Statistical approaches to quality control started at Western
Electric with the separation of inspection division. Pioneers
like Walter Shewhart, George Edwards, W. Edwards Deming
and Joseph M. Juran were all employees of Western Electric.
 After World War II, under General MacArthur's Japan
rebuilding plan, Deming and Juran went to Japan.
 Deming and Juran introduced statistical quality control theory
to Japanese industry.
 The difference between approaches to quality in USA and
Japan: Deming and Juran were able to convince the top
managers the importance of quality.
History of quality management

17. 17
 Next 20 odd years, when top managers in USA focused on
marketing, production quantity and financial performance,
Japanese managers improved quality at an unprecedented
rate.
 Market started preferring Japanese products and American
companies suffered immensely.
 America woke up to the quality revolution in early 1980s. Ford
Motor Company consulted Dr. Deming to help transform its
operations.
(By then, 80-year-old Deming was virtually unknown in USA.
Whereas Japanese government had instituted The Deming
Prize for Quality in 1950.)
History of quality management

18. 18
 Managers started to realize that “quality of management” is
more important than “management of quality.” Birth of the
term Total Quality Management (TQM).
 TQM – Integration of quality principles into organization’s
management systems.
 Early 1990s: Quality management principles started finding
their way in service industry. FedEx, The Ritz-Carton Hotel
Company were the quality leaders.
 TQM recognized worldwide: Countries like Korea, India, Spain
and Brazil are mounting efforts to increase quality awareness.
History of quality management

19. The Three Quality Gurus- Deming
 William Edwards Deming was an American engineer and
management consultant.
 The best known of the “early” pioneers, is credited with
popularizing quality control in Japan in early 1950s.Today, he is
regarded as a national hero in that country and is the father of
the world famous Deming prize for quality.
1900-1993
Focus on SPC and statistical tools
“14 Points” for management
PDCA method

20.  Joseph Moses Juran was a Romanian-born American engineer
and management consultant.
 Juran, like Deming was invited to Japan in 1954 by the union of
Japanese Scientists and engineers.
 Juran defines quality as fitness for use in terms of design,
conformance, availability, safety and field use. He focuses on
top-down management and technical methods rather than
worker pride and satisfaction.
The Three Quality Gurus- Joseph Juran
1904 - 2008
Pareto Principle
Cost of Quality
General management approach as well as
statistics

21.  Philip Bayard Crosby was a businessman who contributed to
management theory and quality management practices
initiated the Zero Defects program at the Martin Company.
 Quality is defined as conformance to requirements, not
“goodness”
 The system for achieving quality is prevention, not appraisal.
 The performance standard is zero defects, not “that’s close
enough”
The Three Quality Gurus- Philip Crosby:
1926 - 2001

22. THANK YOU