This document provides an overview of quality management. It discusses the history of quality assurance from skilled craftsmanship to modern total quality management practices. Key aspects of quality covered include definitions of quality, perspectives on quality including customer-driven and manufacturing-based views, principles of total quality such as customer focus and continuous improvement, and evidence that quality impacts business results and profitability. The relationship between quality and competitive advantage is also examined.

1. 1THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Chapter 1
Introduction to Quality

2. 2THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Modern Importance of Quality
“The first job we have is to turn out quality
merchandise that consumers will buy and keep
on buying. If we produce it efficiently and
economically, we will earn a profit, in which
you will share.”
- William Cooper Procter

3. 3THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Quality Assurance
...is any action directed toward providing
customers with goods and services of
appropriate quality.

4. 4THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
History of Quality Assurance (1 of 2)
• Skilled craftsmanship during Middle Ages
• Industrial Revolution: rise of inspection and
separate quality departments
• Statistical methods at Bell System
• Quality control during World War II
• Quality management in Japan

5. 5THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
History of Quality Assurance (2 of 2)
• Quality awareness in U.S. manufacturing
industry during 1980s: “Total Quality
Management”
• Malcolm Baldrige National Quality Award
(1987)
• Quality in service industries, government,
health care, and education
• Current and future challenge: keep progress in
quality management alive

6. 6THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Contemporary Influences on
Quality
• Parterning
• Learning systems
• Adaptability and speed of change
• Environmental sustainability
• Globalization
• Knowledge focus
• Customization and differentiation
• Shifting demographics

7. 7THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Definitions of Quality
• Transcendent definition: excellence
• Product-based definition: quantities of
product attributes
• User-based definition: fitness for intended
use
• Value-based definition: quality vs. price
• Manufacturing-based definition:
conformance to specifications

8. 8THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Quality Perspectives
CustomerCustomer
DistributionDistribution
productsproducts
andand
servicesservices
needsneeds
transcendent &transcendent &
product-basedproduct-based user-baseduser-based
manufacturing-manufacturing-
basedbased
value-basedvalue-based
MarketingMarketing
DesignDesign
ManufacturingManufacturing
Information flowInformation flow
Product flowProduct flow

9. 9THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Customer-Driven Quality
• “Meeting or exceeding customer
expectations”
• Customers can be...
– Consumers
– External customers
– Internal customers

10. 10THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Total Quality
• People-focused management system
• Focus on increasing customer satisfaction
and reducing costs
• A systems approach that integrates
organizational functions and the entire
supply chain
• Stresses learning and adaptation to change
• Based on the scientific method

11. 11THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Principles of Total Quality
• Customer and stakeholder focus
• Participation and teamwork
• Process focus and continuous
improvement
...supported by an integrated organizational
infrastructure, a set of management practices,
and a set of tools and techniques

12. 12THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Customer and Stakeholder Focus
• Customer is principal judge of quality
• Organizations must first understand
customers’ needs and expectations in order
to meet and exceed them
• Organizations must build relationships with
customers
• Customers include employees and society at
large

13. 13THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Participation and Teamwork
• Employees know their jobs best and
therefore, how to improve them
• Management must develop the systems and
procedures that foster participation and
teamwork
• Empowerment better serves customers, and
creates trust and motivation
• Teamwork and partnerships must exist both
horizontally and vertically

14. 14THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Process Focus and Continuous
Improvement
• A process is a sequence of activities
that is intended to achieve some result

15. 15THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Continuous Improvement
• Enhancing value through new products and
services
• Reducing errors, defects, waste, and costs
• Increasing productivity and effectiveness
• Improving responsiveness and cycle time
performance

16. 16THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Deming’s View of a
Production System
Suppliers of
materials and
equipment
Receipt and test
of materials
Design and
Redesign
Consumer
research
A
B
C
D
Production, assembly
inspection
Tests of processes, machines, methods
Distribution
Consumers
INPUTS PROCESSES OUTPUTS

17. 17THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Learning
• The foundation for improvement …
Understanding why changes are successful
through feedback between practices and
results, which leads to new goals and
approaches
• Learning cycle:
– Planning
– Execution of plans
– Assessment of progress
– Revision of plans based on assessment findings

18. 18THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Infrastructure, Practices, and
Tools
Leadership Strategic HRM Process Data and informationLeadership Strategic HRM Process Data and information
Planning mgt. managementPlanning mgt. management
Performance TrainingPerformance Training
appraisalappraisal
Trend chartTrend chartToolsTools
PracticesPractices
InfrastructureInfrastructure

19. 19THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
TQ Infrastructure
• Customer relationship management
• Leadership and strategic planning
• Human resources management
• Process management
• Data and information management

20. 20THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Competitive Advantage
• Is driven by customer wants and needs
• Makes significant contribution to business
success
• Matches organization’s unique resources with
opportunities
• Is durable and lasting
• Provides basis for further improvement
• Provides direction and motivation
Quality supports each of these characteristics

21. 21THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Quality and Profitability
Improved quality
of design
Higher perceived
value
Increased market
share
Higher
prices
Increased
revenues
Improved quality
of conformance
Lower
manufacturing and
service costs
Higher profitability

22. 22THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Evidence that Quality Impacts
Business Results
• General Accounting Office study of
Baldrige Award applicants
• Baldrige stock study (see
www.quality.nist.gov)
• Hendricks and Singhal study of quality
award winners
• Performance results of Baldrige Award
winners

23. 23THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
GAO TQ Model
Product and
service quality
Customer
satisfaction
Leadership for
continuous
improvement
Quality systems and
employee involvement
Competitiveness
Organization
benefits
Reliability
On-time delivery
Error/defects
Overall satisfaction
Customer retention
Complaints
Costs
Cycle time
Turnover
Satisfaction
Safety & health
Productivity
Market share
Profits

24. 24THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Three Levels of Quality
• Organizational level: meeting external
customer requirements
• Process level: linking external and
internal customer requirements
• Performer/job level: meeting internal
customer requirements

25. 25THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
Quality and Personal Values
• Personal initiative has a positive impact
on business success
• Quality begins with personal attitudes
• Quality-focused individuals often exceed
customer expectations
• Attitudes can be changed through
awareness and effort (e.g., personal
quality checklists)