Quality Management in Business

1. Chapter No.37
Business Studies
BY:- ISRAR K. RAJA.
Preston University, Islamabad.

2. Chapter Objectives
 Understanding of the different approaches to Quality
 The Statistical approach to quality control
 New approaches to quality
 Modern Quality Concepts

4. Quality Management
 The act of overseeing all activities and tasks needed to
maintain a desired level of excellence.
 This includes creating and implementing quality
planning and assurance, as well as quality control and
quality improvement.
 It is also referred to as total quality
management (TQM).

7. Quality
 It is totality of features and characteristics of a product
or service that bear on its ability to satisfy stated or
implied needs
 It is in terms of fitness for purpose and safety in use.
 It is a crucial issue at the interface between marketing
and production.
 Quality is not only central to profitability but crucial to
business survival.

8. Aspects of Quality
 Quality of Design:-suitable for the purpose to which
they will be put and meet the requirement or
perception of the customers.
 Quality of Conformance:-Extent to which goods are
produced conform to the specifications and cosistancy
to meet the standards.

9. How to ensure quality
Type of Process Task Resposibility for Quality
Jobbing task & quality integrated.Depends on the skill persons performing task
of the people doing & supervising the work and supervision
Batch and Line work has been de-skilled separate QC and inspection
Continuous Process Quality determined by the process built into the process.
quality reintegrated into the task Monitoring becomes the res-
-ponsibility of those perform-
-ing other aspects of task

10. Proactive or Reactive control
 Preventive Or Feed forward Control:-focused on
inputs like human resource, machinery and material.
 Concurrent Control:- focus on ongoing activities to
ensure quality
 Feedback or post –action control:-focus on output

11. Statistical Quality control
 Is based on the assumption that perfect quality is
unattainable and / or too expensive.
 Is a trade-off between the costs associated with the
maintenance of quality and the cost of failure due to
lack of quality

12. Statistical Quality control
Cost of lack of quality Cost of quality
 Scrape
 Reworking
 Downgrading/seconds
 Inspection
 Waste material
 Warranty claims
 Complaints
 Lost sales opportunities
 Loss of customer goodwill
 Legal claims
 Product liability
 Verification costs
 Inspection costs
 Quality audit
 Appraisal equipment
 Prevention cost
 Additional maintenance
 Training
 Special investigation
 Quality planning

13. Statistical Quality control
 It can be divided into acceptance sampling and process control.
 Acceptance Sampling:-testing a random sample of existing goods
and deciding whether or not to accept an entire lot.
 Statistical process control:-testing a random sample of output
from a process to determine whether or not to accept the process.
 Acceptable Quality Level (AQL):- the maximum number of
defective goods per 100.
 Lot Tolerance Percentage Defective (LTPD):-if the percentage of
defective goods is greater than a specified amount.
 Consumers’ Risk:-probability of accepting low quality lot.
 Producers’ Risk:-probability of rejecting of satisfactory goods.

14. Stages of Quality Control
 The average no. of defectives expected in each batch.
 Standard deviation of the distribution
 Probability of different numbers of defective goods
 Fix the risk levels-AQL-LTPD, producers’ risk and
consumers’ risk
 Set the control limits
 Implement

15. Control By Variables
 Take a succession of random samples
 Calculate means value of samples-normal distribution
 Standard deviation of error
 Determine level of risk
 Draw up a control chart

16. Control chart

17. Quality Control
Old Philosophy New Philosophy
 Second to profit
 higher cost
 Minimize defects
 Only quality controller
 Result of poor workmanship
 Should be caught n remedied
 Ensure profit
 Lower cost
 Zero defects
 Everyone control quality
 Poor management
 Should be eliminated

18. Total Quality Control (TQM)
 Mission statement
 Top to bottom learn new philosophy
 Inspection for improvement
 Suppliers selected for quality
 Continuous improvement in production process
 Adequate training
 Participatory leadership
 Trust climate
 Cross the board approach
 Improve customer satisfaction
 No target in production only methods of improvement
 Pride in each worker’s own work
 Education and self improvement
 Climate of quality improvement

19. Juran’s Ten Steps to Quality Improvement
• Build awareness of the need and opportunity for improvement
• Set goals for improvement
• Organize to reach the goals
• Provide training
• Carry out projects to solve problems
• Report progress
• Give recognition
• Communicate results
• Keep score
• Maintain momentum by making annual improvement part of
the regular systems and processes of the company

20. Crosby's 4 Steps to Quality Improvement
• Management is committed to quality – and this is clear to
all
• Create quality improvement teams – with (senior)
representatives from all departments.
• Measure processes to determine current and potential
quality issues.
• Calculate the cost of (poor) quality

21. Total Quality Control (TQM)
The Benefits of TQM Requirements for Success
 Improved quality
 Increased productivity
 Increased market share
 Competitive advantage
 A release of employee
potential
 A motivated workforce
 Increased profits
 Reduced waste as a result of
zero defects
 Leadership from the top
 Patience to carry through a
long-term strategy
 Communication skills
 A change in culture
 A recognition of quality in all
aspects of management
 Recognition and reward

22. A Cultural Change in Organization
 The customer is the driver of change
 Continuous improvement
 Employee participation
 Partnership with employees
 Commitment from the top management
 Trust in workers’ abilities
 Flexibility
 Training for the workforce
 Acceptance of responsibility
 Willingness to contribute