This document provides an overview of managing quality. It defines quality and its importance in ensuring conformance to internal specifications. It discusses quality philosophies from Deming, Juran and Crosby that focus on continuous improvement. The stages of managing quality include defining characteristics, setting standards, controlling quality, and making improvements. Tools like checklists, Pareto analysis, cause-and-effect diagrams, and control charts help improve quality. Total quality management requires changes to management philosophy, systems and culture to meet customer needs and expectations. Case studies show how companies implement quality improvement programs over many years.

2. Managing quality
Alex Hill and Terry
Hill

3. Learning
objectives
• Explain what QUALITY is and why it is IMPORTANT
• Understand the STAGES involved in managing quality
• Apply alternative TOOLS and TECHNIQUES to
improve quality conformance
• Critically evaluate the quality conformance LEVELS
within a business and suggest IMPROVEMENTS
• Understand the alternative APPROACHES to
managing quality
• Propose and substantiate quality IMPROVEMENTS
within a given operational context

4. Lecture outline
• INTRODUCTION
• Defining QUALITY and its role
• Quality PHILOSOPHIES
• STEPS to effectively managing quality
- TOOLS and TECHNIQUES
• APPROACHES to managing quality
• Critical REFLECTIONS
• SUMMARY

5. ©© AAlleexx H Hilli lal nadn dTe Trreyr Hryill Hill

6. Defining quality and its
role

7. Defining quality and its
rPoulrepose of managing
Ensures that the actual
service or product
CONFORMS to its
INTERNALLY SPECIFIED
quality level

8. > KEY IDEA
Quality conformance means
CONSISTENTLY delivering services and
products in line with their
DESIGN SPECIFICATIONS, which, in turn
need to reflect customer needs

9. CASE 10.1
THE IMPORTANCE OF
MANAGING QUALITY
1.How do the changes in
the fish batter
specification affect
customer SALES?
2.What are the market
ORDER-WINNERS and
QUALIFIERS?

10. CASE 10.1
Questio
n
THE IMPORTANCE OF
MANAGING QUALITY
Answer
Affect
sales
Order-winners
Qualifiers
• FISH is most significant part of purchase
• Reduced QUALITY conformance
- Will directly lead to LOSS of sales
• Product DESIGN
- FISH taste and texture
- CHIPS taste
• PRICE
• Delivery SPEED
• QUALITY conformance

11. CASE 10.2 CHANGING THE QUALITY OFFERING

12. CASE 10.2
Questio
n
CHANGING THE QUALITY OFFERING
Hampton Inn UPS
Changes
Benefits
• No quibble REFUND
• EMPOWERED all staff
to give refund
• Increased PRODUCT
specification
- E.g. iron and board
• More satisfied
EMPLOYEES
• Increased SALES
• Identified further service
DEVELOPMENTS
• Increased SERVICE
specification
- Solve questions and
queries
• Strengthened
customer
RELATIONSHIPS
• Increased SALES
• Identified further service
DEVELOPMENTS

13. Quality
philosophies
•W Edwards
DEMING
• Joseph M JURAN
• Philip B CROSBY

14. Quality
pDheimloinsgophies
IMPROVING QUALITY
• Clear quality VISION
• Focus on correcting SYSTEMS and PROCEDURES
• Drive to eliminate ERRORS
• Build LONG-TERM supplier relationships
• Continuously reduce WASTE
• Centre TRAINING on producing acceptable work
• LEAD rather than supervise
• Encourage QUESTIONS
• Use cross-functional TEAMS
• Give employees the right TOOLS to do the job
• Focus quotas and targets on QUALITY not output
• Encourage PRIDE in one’s work
• Continuously TRAIN people on new tools and
techniques
• Work CONTINUOUSLY on the other 13 points

15. Quality
philosophies
Juran
COSTS OF QUALITY
• INTERNAL cost of failure
- Defects, rework, yield losses, re-inspection,
disposal
• EXTERNAL cost of failure
- Complaints, returns, field service support,
repairs
• APPRAISAL costs
- Inspection, test, checks, assurance and control
• PREVENTION costs
- Planning, reviews, controls, analysis, reporting

16. Quality
philosophies Crosby
IMPROVING QUALITY
• Clear management COMMITMENT
• Improvement supported by MULTI-FUNCTIONAL team
• Quality MEASURES in place
• COST of quality includes non-conformance and
conformance
• Quality AWARENESS promoted throughout organisation
• Improvement ideas ACTIONED
• Goal is to achieve ZERO DEFECTS
• Improvement based on EDUCATION and TRAINING
• Specify a future date as ZERO DEFECTS DAY
• Set improvement GOALS
• Make EVERYONE responsible for identifying and fixing
errors
• Give programme public, non-financial RECOGNITION
• Form quality COUNCIL to help share knowledge
• CONTINUOUSLY improve quality by returning to step 1

17. Steps to effectively manage
quality
CONTROL
IMPROVEMEN
T

18. Steps to effectively manage
qCuoantlriotyl
1.Define quality CHARACTERISTICS
- E.g. reliability, durability, appearance
• Decide how to MEASURE
characteristics
- Variable vs. attribute data
• Set quality STANDARDS
• CONTROL quality against
standards

19. Steps to effectively manage
qCuoantlriotyl

20. Steps to effectively manage
qCuoantlriotyl
DECIDE HOW TO MEASURE CHARACTERISTICS
• VARIABLES
- Measured on a continuous
SCALE
- E.g. length, weight or time
• ATTRIBUTES
- Have TWO states
- Assessed by JUDGEMENT
- DESCRIPTIVE
- E.g. right/wrong, looks OK/NOT
OK

21. Steps to effectively manage
qCuoantlriotyl

22. Steps to effectively manage
qCuoantlriotyl

23. Steps to effectively manage
qCuoantlriotyl
SETTING QUALITY STANDARDS
That LEVEL of quality which
defines the boundary
between ACCEPTABLE and
unacceptable
E.g. customers should be
served within 90 seconds of
arriving

24. Steps to effectively manage
qCuoantlriotyl

25. > KEY IDEA
Quality conformance must be
CONTROLLED before it can be
IMPROVED

26. Steps to effectively manage
quality
CONTROL
Improvement
• Find and correct CAUSES of poor
quality
• CONTINUE to make improvements

27. > KEY IDEA
Organisations must
PROACTIVELY improve quality by
CONTINUALLY identifying what could go
wrong before it does and then
PREVENTING these problems from
occurring

28. CASE 10.3
REGAINING
CONSUMER
CONFIDENCE AT
COCA-COLA AND
PERRIER
1.How did they REACT to
the quality conformance
problems?
2.Was quality
conformance an
ORDER-WINNER or
QUALIFIER in their
markets?
3.How did this affect their
MARKETS?

29. REGAINING CONSUMER
CONFIDENCE AT COCA-COLA AND
PERRIER
Question Answer
Reaction
Order-winner
or
qualifier
Market
impact
• Lost consumer CONFIDENCE
• Lost SALES
- Perrier has never really regained market
share
CASE 10.3
• SLOW to react
• Initially DENIED that there was a
problem
• QUALIFIER

30. CASE 10.4
ON-TIME PASSENGER
FLIGHTS: IMPROVING
QUALITY
1. Why is the level of
DETAIL collected by the
bureau?
2.What are the REASONS
for the different levels of
on-time flights?

31. CASE 10.4 ON-TIME PASSENGER FLIGHTS:
Questio
n
IMPROVING QUALITY
Answer
Data
collected
Reasons
• HIGHLIGHT airline practice:
- GOOD and BAD
• Make available to CUSTOMERS:
- So aware of PERFORMANCE differences
• Put pressure on airlines to IMPROVE
• Main CATEGORIES:
- AIRCRAFT - availability, delays
- AIRPORT - inbound, loading
- PERSONNEL - passengers, cleaners,
crews
- PROCEDURES - announcements,
baggage
- OTHER - weather, traffic and control

32. HCAASVEIN 1G0 .T5HE RIGHT
TOOLS TO DO THE
JOB
1.What POINT is the CEO
trying to make?
2.Why is this IMPORTANT
to consider when
managing quality?

33. Question Answer
Point
Importanc
e
• One of the key FIRST STEPS in any
improvement programme must be to:
- EDUCATE staff in the use of quality
improvement TOOLS and TECHNIQUES
CASE 10.5
HAVING THE RIGHT
TOOLS TO DO THE
JOB
• Managers need to equip employees
with the right TOOLS to do the job
• It is NOT ENOUGH to simply motivate
and support them

34. Tools and
tEexcahmnpilqeuses
• CHECKLISTS
• PARETO analysis
• CAUSE and EFFECT
diagram
• GAP analysis

35. Tools and
tEexcahmnpilqeuses
• CHECKLISTS
• PARETO analysis
• CAUSE and EFFECT
diagram
• GAP analysis
• CONTROL charts
• Statistical process control
(SPC)
• SIX-SIGMA quality

36. > KEY IDEA
Quality conformance can be IMPROVED
by changing how services or products
are either
DESIGNED or DELIVERED
IMPROVED

37. Tools and
tCehcehcnkiliqstuses

38. > KEY IDEA
Checklists record
how OFTEN a problem occurs

39. Tools and
tPeacrehtnoi qanuaelyssis

40. > KEY IDEA
Pareto analyses identify the
MOST FREQUENT causes of a problem
and thereby help FOCUS improvement
activities and resource

41. Tools and
tCeacuhsnei aqnude esffect diagrams
1.Identify the PROBLEM to be
addressed
2.Identify the major CATEGORIES of
causes
3.List all the DETAILED causes
4.Identify the PRINCIPAL causes

42. Tools and
tCeacuhsnei aqnude esffect diagrams

43. Tools and
tCeacuhsnei aqnude esffect diagrams

44. Tools and
tCeacuhsnei aqnude esffect diagrams

45. > KEY IDEA
Cause and effect diagrams help identify
the
ROOT CAUSE of a problem

46. Tools and
Cteacuhsne iaqnude esffect diagrams
Five Easy
Pieces
(1970)
The diner

47. Tools and
tCeacuhsnei aqnude esffect diagrams
•What is the OUTCOME at the
diner?
•What are the CAUSES of this?

48. Tools and
tCeacuhsnei aqnude esffect diagrams
Film clip The Diner
Film
Title
Director
(year)
Five Easy Pieces
Rafelson (1970)
Clip Start
Finish
00:45:42
00:46:13
What clip shows A group of people being served in a diner
Key learning
objective
Identifying why the customers’ expectations
were not met

49. Tools and
techniques
Systems People
Materials Customer
Outcome
The Diner

50. Tools and
tTehceh Dniniqeur es
Systems People
Unprofessional
Not empowered
Inflexible Outcome
High expectation
Materials Customer
Customers do not eat
and leave upset
Low variety
Inflexible

51. Tools and
tCeacuhsnei aqnude esffect diagrams
Breakfast
at Tiffany’s
(1961)
Tiffany’s

52. Tools and
tCeacuhsnei aqnude esffect diagrams
•What is the OUTCOME at
Tiffany’s?
•What are the CAUSES of this?

53. Tools and
tCeacuhsnei aqnude esffect diagrams
Film clip Tiffany’s
Film
Title
Director
(year)
Breakfast at Tiffany’s
Edwards (1961)
Clip Start
Finish
01:05:41
01:09:49
What clip shows A couple being served in Tiffany’s
Key learning
objective
Identifying how the business identified and met
the customers’ expectations

54. Tools and
techniques
Systems People
Materials Customer
Outcome
Tiffany’s

55. Tools and
tTeifcfahnny’isques
Systems People
Skilled / professional
Empowered
Flexible Outcome
Low expectation
Materials Customer
Satisfied customers
will come again
High variety
Flexible

56. Tools and
tGeacph anniqaluyseiss
1.KNOWLEDGE gap
2.DESIGN gap
3.PERFORMANCE
gap
4.COMMUNICATION
gap
5.OVERALL gap

57. > KEY IDEA
Gap analysis helps identify why
customers’ PERCEPTIONS of the
quality of a service or product are LESS
THAN their EXPECTATIONS

58. Tools and
tCeocnhtrnoilq cuheasrts
•WHAT
- aspects of PERFORMANCE need to be
measured
•WHERE
-which POINT in the delivery system
•HOW
-which TYPE of control chart - attribute or
variable
- FREQUENCY of measurement
•By WHOM
-who will MEASURE performance
-who will take corrective ACTION when it
moves outside of its limits

59. Tools and
tCeocnhtrnoilq cuheasrts

60. Tools and
tCeocnhtrnoilq cuheasrts

61. Tools and
tSetacthisntiicqaul persocess control

62. > KEY IDEA
Control charts can be used to control a
process and ensure that it
PERFORMS within specified SPECIFIC
LIMITS

63. > KEY IDEA
These limits need to be
CONTINUALLY REVIEWED reviewed to
ensure that the performance of the
process is being SYSTEMATICALLY
IMPROVED

64. Tools and
tSeixc-hsingimqau eqsuality

65. CASE 10.6
GENERAL ELECTRIC’S
SIX SIGMA QUALITY
GOAL
1. What were the key
TASKS for GE to reach
its goal?
2.How did this change the
COMPETITIVE factors in
its market?
3.What strategic
ADVANTAGE resulted?

66. CASE 10.6 GENERAL ELECTRIC’S SIX
SIGMA QUALITY GOAL
Question Answer
Tasks
Changed
competitive
factors
Strategic
advantage
• Significant CULTURE change
• High INVESTMENT in:
- TRAINING
- Process IMPROVEMENT
• QUALITY conformance changed from:
- Being a QUALIFIER to
- Becoming an ORDER-WINNER
• GE was significantly AHEAD of its competition in:
- DEFINING and MEETING quality standards

67. Approaches to managing
quality
Management
PHILOSOPHY
SYSTEMS and
PROCEDURES

68. Approaches to managing
qToutaall iqtyuality management
MANAGEMENT PHILOSOPHY
• Meet CUSTOMER needs and
expectations
• Cover all FUNCTIONS
• Involve all LEVELS
• Examine the current COST of quality
• Deliver services and products RIGHT
first time
• Develop a quality management
APPROACH
• CONTINUOUSLY look for ways to
improve

69. Approaches to managing
qToutaall iqtyuality management
REDUCE QUALITY COSTS
• INTERNAL cost of failure
- Defects, rework, yield losses, re-inspection,
disposal
• EXTERNAL cost of failure
- Complaints, returns, field service support,
repairs
• APPRAISAL costs
- Inspection, test, checks, assurance and control
• PREVENTION costs
- Planning, reviews, controls, analysis, reporting

70. Approaches to managing
qToutaall iqtyuality management
IMPLEMENTATION
• Develop a quality STRATEGY
• Get top-management SUPPORT
• Use a TQM STEERING group
• Use improvement TEAMS
• RECOGNISE success
• Use quality TOOLS and
TECHNIQUES
• TRAIN staff in the aims and tools of
TQM

71. Approaches to managing
qToutaall iqtyuality management
CULTURE CHANGE
• Everyone RESPONSIBLE for their own
quality
• IMPROVEMENT a part of everyone’s job
• Everyone focus on meeting CUSTOMERS’
NEEDS
• Involve SUPPLIERS and CUSTOMERS
• Mistakes are OPPORTUNITY to improve

72. > KEY IDEA
To implement TQM, companies must
broaden their SKILLS and
be more INNOVATIVE.
This requires CHANGES in attitude,
behaviour and working practices

73. CASE 10.7
3M: COMMITTING TO
QUALITY
IMPROVEMENT
1.How should firms
INTRODUCE TQM?
2.Comment on the
APPROACH used by 3M

74. CASE 10.7 3M: COMMITTING TO
Questio
QUALITY IMPROVEMENT
n Answer
Introducin
g TQM
Approach
Commen
t
• It is a LONG journey
- Juran - 6 to 10 years to become industry
leader
- McNerney - 10 to 15 years to change DNA
• TRAIN all 2,800 staff
• Make 500 managers work full-time on
improvement PROGRAMMES for next 2
years
• These are the necessary BUILDING
BLOCKS for a successful introduction of
TQM
• Focusing on LONG-TERM gains

75. Approaches to managing
quality
Management
PHILOSOPHY
SYSTEMS and
PROCEDURES

76. Approaches to managing
qSyusatelimtys and procedures
• ISO 9000
• BALDRIGE award
• EFQM excellence
award

77. > KEY IDEA
A number of FRAMEWORKS are
available to help organisations
consistently
DESIGN and DELIVER services and
products

78. Approaches to managing
qISuOa 9li0ty00
HELPS CONTROL BUSINESS PROCESSES
• DESIGNING and DEVELOPING new services
and products
• Control MATERIALS
• DELIVER services and products
• INSPECT, MEASURE and TEST services and
products
• HANDLE, STORE and PACK products
• SERVICE products after installation
• Maintain and audit quality RECORDS for the
above

79. > KEY IDEA
The Baldrige award aims to
improve the PERFORMANCE of
US businesses

80. > KEY IDEA
The EFQM Excellence Award aims to
improve the PERFORMANCE of
EUROPEAN businesses

81. Approaches to managing
qQuuaallitiyty costs and management
philosophy
Terry Tate
Management philosophy
Brazil
(1985)
Central Services
Quality costs
Terry Tate
(2002)

82. Approaches to managing
qQuuaallitiyty costs
Film clip Central Services
Film
Title
Director
(year)
Brazil
Gilliam (1985)
Clip Start
Finish
00:01:08
00:10:24
What clip shows The government bringing in a man for
questioning
Key learning
objective The quality costs associated with a process

83. Approaches to managing
qMuaanlaigtyement philosophy
Film clip Terry Tate
Film
Title
Director
(year)
Terry Tate: Office Linebacker
Thurber (2002)
Clip Start
Finish
00:00:00
00:03:41
What clip shows A company employing an american footballer
to help improve productivity within the office
Key learning
objective
The benefits and issues associated with this
approach to improving quality within an
organisation

84. Approaches to managing
qQuuaallitiyty costs
•What are the steps in the
PROCESS?
•What are the QUALITY COSTS?

85. Approaches to managing
qQuuaallitiyty costs
Quality
cost
Example
External
failure
Internal failure
Appraisal
Prevention
• WRONG customer
• Customer COMPLAINT
• WRONG size plug for hole
• Need to complete process AGAIN
• LOST working time
• INSPECTION process steps
• Paperwork CONTROLS and CHECKS
• Quality SYSTEMS
• Quality PROCEDURES

86. Approaches to managing
qMuaanlaigtyement philosophy
•What is his management
PHILOSOPHY?
•What are the BENEFITS of this
philosophy?
•What are the ISSUES with this
philosophy?

87. Approaches to managing
qMuaanlaigtyement philosophy
Question Answer
Philosophy
Benefits
Issues
• MANAGEMENT decision
• Management through FEAR
• NO INVOLVEMENT of employees
• NO EXPLANATION of why change required
• Reduced NON-PRODUCTIVE time
• Increased EFFICIENCY
• RESISTANCE to change
• NO UNDERSTANDING of need for change
• Changes are not SUSTAINABLE

88. Critical
reflections
• Quality management has come FULL
CIRCLE
- Before INDUSTRIAL revolution, workers were
responsible for DELIVERY and QUALITY
- Have RETURNED to this philosophy
• Businesses must apply quality approaches
to other aspects of business
PERFORMANCE
- Companies that do this will PROSPER
- Companies that don’t will stumble and FAIL

90. Summar
y•
QUALITY conformance
- Either order-winner or qualifier in most markets
• MANAGING quality
- Characteristics, measures, levels and monitors
• Quality LEVELS must be
- Controlled before they can be improved
• TOOLS and TECHNIQUES for improving quality
- Checklists, Pareto analysis, cause and effect, gap
analysis
• Management PHILOSOPHY
- TQM
• SYSTEMS and PROCEDURES
- ISO 9000, Baldrige Award, EFQM Excellence Award

91. ©© AAlleexx H Hilli lal nadn dTe Trreyr Hryill Hill

92. Revision
questions
1 From an operations perspective, quality
concerns:
a) Determining customers’ needs and
embodying these in the design
specifications of services and products
b) Consistently meeting service and product
design specifications
c) Both a) and b)

93. Revision
questions
1 From an operations perspective, quality
concerns:
a) Determining customers’ needs and
embodying these in the design
specifications of services and products
b) Consistently meeting service and product
design specifications
c) Both a) and b)

94. Revision
questions
2 The first step in the quality conformance
procedure is to:
a) Identify the causes of below-standard
quality
b) Define the quality characteristics
c) Measure and control the quality
characteristics

95. Revision
questions
2 The first step in the quality conformance
procedure is to:
a) Identify the causes of below-standard
quality
b) Define the quality characteristics
c) Measure and control the quality
characteristics

96. Revision
questions
3 Which of the following is NOT a consideration
when setting quality levels:
a) Where in the operations process to check
conformance to the quality standards
b)Which variables to check
c) How to undertake the check(s)

97. Revision
questions
3 Which of the following is NOT a consideration
when setting quality levels:
a) Where in the operations process to check
conformance to the quality standards
b)Which variables to check
c) How to undertake the check(s)

98. Revision
questions
4 In general, quality tools and techniques can
be categorised as:
a) Design tools
b) Process tools
c) Both a) and b)

99. Revision
questions
4 In general, quality tools and techniques can
be categorised as:
a) Design tools
b) Process tools
c) Both a) and b)

100. Revision
questions
5 Which of the following is NOT an example of
a quality tool or technique:
a) Network analysis
b) Cause and effect diagrams
c) Checklist

101. Revision
questions
5 Which of the following is NOT an example of
a quality tool or technique:
a) Network analysis
b) Cause and effect diagrams
c) Checklist

102. Revision
questions
6 Implementing total quality management
(TQM) in a business requires the following
culture change:
a) Improvement is the responsibility of the
quality department
b)Mistakes should be criticised and
corrected
c) Suppliers and customers need to be part
of the improvement process

103. Revision
questions
6 Implementing total quality management
(TQM) in a business requires the following
culture change:
a) Improvement is the responsibility of the
quality department
b)Mistakes should be criticised and
corrected
c) Suppliers and customers need to be part
of the improvement process

104. Revision
questions
7 Which of the following is NOT an example of
a quality award:
a) Six sigma
b) ISO 9000
c) Baldrige

105. Revision
questions
7 Which of the following is NOT an example of
a quality award:
a) Six sigma
b) ISO 9000
c) Baldrige

106. CASE FOR TUTORIAL
CROWN HOTEL