This document discusses total quality in organizations. It covers key topics like systems thinking, manufacturing systems, quality in different business areas like marketing and product design, and critical differences between quality in services and manufacturing. The main ideas are that a systems perspective acknowledges interactions between subsystems, every manager is responsible for quality in their area, and quality is important not just in manufacturing but also in services, healthcare, education and more.

1. 11
Chapter 3Chapter 3
Total Quality inTotal Quality in
OrganizationsOrganizations
Dr. John V. PaduaDr. John V. Padua
The
Management
& Control of
Quality, 7e

2. Learning ObjectivesLearning Objectives
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At the end of this session, the students are all
expected to understand the following:
• The Systems and its importance
• Manufacturing Systems
• Quality in Different Areas
• Critical Quality Differences in Service and
Manufacturing

3. Key IdeaKey Idea
As consumer expectations have risen, a
focus on quality has permeated other key
sectors of the economy, most notably
health care, education, not-for-profits,
and government.
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4. SystemsSystems
 AA systemsystem is a set of functions or activitiesis a set of functions or activities
within an organization that work together forwithin an organization that work together for
the aim of the organization.the aim of the organization.
 Subsystems of an organization are linkedSubsystems of an organization are linked
together as internal customers andtogether as internal customers and
suppliers.suppliers.
 A systems perspective acknowledges theA systems perspective acknowledges the
importance of the interactions ofimportance of the interactions of
subsystems, not the actions of themsubsystems, not the actions of them
individually.individually.
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5. 55
Manufacturing SystemsManufacturing Systems (1 of 2)(1 of 2)
 Marketing and salesMarketing and sales
 Product design and engineeringProduct design and engineering
 Purchasing and receivingPurchasing and receiving
 Production planning andProduction planning and
schedulingscheduling
 Manufacturing and assemblyManufacturing and assembly
 Tool engineeringTool engineering

6. 66
Manufacturing SystemsManufacturing Systems (2 of(2 of
2)2)
 Industrial engineering and processIndustrial engineering and process
designdesign
 Finished goods inspection and testFinished goods inspection and test
 Packaging, shipping, andPackaging, shipping, and
warehousingwarehousing
 Installation and serviceInstallation and service

7. Key IdeaKey Idea
Traditional quality assurance systems in
manufacturing focus primarily on technical
issues such as equipment reliability,
inspection, defect measurement, and
process control.
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8. Quality in MarketingQuality in Marketing
Marketing and sales personnel are
responsible for determining the needs
and expectations of consumers.
88

9. Quality in ProductQuality in Product
DesignDesign
Product design and engineering functions
develop technical specifications for
products and production processes to
meet the requirements determined by the
marketing function.
99

10. Quality in PurchasingQuality in Purchasing
A purchasing agent should not simply be
responsible for low-cost procurement, but
should maintain a clear focus on the
quality of purchased goods and materials.
1010

11. Quality in ProductionQuality in Production
Planning & SchedulingPlanning & Scheduling
Poor quality often results from time
pressures caused by insufficient planning
and scheduling.
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12. Quality in ManufacturingQuality in Manufacturing
and Assemblyand Assembly
Both technology and people are essential
to high-quality manufacturing.
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13. Quality in ProcessQuality in Process
DesignDesign
Manufacturing processes must be
capable of producing output that meets
specifications consistently.
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14. Quality in Finished GoodsQuality in Finished Goods
Inspection and TestingInspection and Testing
The purposes of final product inspection
are to judge the quality of manufacturing,
to discover and help to resolve production
problems that may arise, and to ensure
that no defective items reach the customer.
1414

15. Quality in Installation andQuality in Installation and
ServiceService
Service after the sale is one of the most
important factors in establishing customer
perception of quality and customer
loyalty.
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16. 1616
Quality in BusinessQuality in Business
Support Functions forSupport Functions for
ManufacturingManufacturing
 Finance and accountingFinance and accounting
 Quality assuranceQuality assurance
 Legal servicesLegal services

17. Key IdeaKey Idea
Every manager is responsible for
studying and improving the quality of the
process for which he or she is
responsible; thus, every manager is a
quality manager.
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Quality in ServicesQuality in Services
 ServiceService is defined as “any primary oris defined as “any primary or
complementary activity that does notcomplementary activity that does not
directly produce a physical product –directly produce a physical product –
that is, the non-goods part of thethat is, the non-goods part of the
transaction between buyer (customer)transaction between buyer (customer)
and seller (provider).”and seller (provider).”

19. Key IdeaKey Idea
The American Management Association
estimates that the average company
loses as many as 35 percent of its
customers each year, and that about two-
thirds of these are lost because of poor
customer service.
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20. 2020
Critical Differences BetweenCritical Differences Between
Service and ManufacturingService and Manufacturing (1 of(1 of
2)2)
 Customer needs and performanceCustomer needs and performance
standards are more difficult tostandards are more difficult to
identify and measureidentify and measure
 Services requires a higher degree ofServices requires a higher degree of
customizationcustomization
 Output is intangibleOutput is intangible

21. Critical Differences BetweenCritical Differences Between
Service and ManufacturingService and Manufacturing (2 of(2 of
2)2)
 Services are produced and consumedServices are produced and consumed
simultaneouslysimultaneously
 Customers are often involved in actualCustomers are often involved in actual
processprocess
 Services are more labor-intensive thanServices are more labor-intensive than
manufacturingmanufacturing
 Services handle large numbers ofServices handle large numbers of
transactionstransactions
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