11

Chapter 1Chapter 1Chapter 1Chapter 1

Introduction to Introduction to

QualityQuality

22

Modern Importance of Modern Importance of QualityQualityModern Importance of Modern Importance of QualityQuality

“ “The first job we have is to turn out The first job we have is to turn out quality merchandise that consumers quality merchandise that consumers will buy and keep on buying. If we will buy and keep on buying. If we produce it efficiently and produce it efficiently and economically, we will earn a profit, economically, we will earn a profit, in which you will share.” in which you will share.”

- William Cooper - William Cooper ProcterProcter

Key IdeaKey Idea

Building—and maintaining—quality into an organization’s goods and services, and more importantly, into the infrastructure of the organization itself, is not an easy task.

44

Quality AssuranceQuality Assurance

...is any action directed toward ...is any action directed toward providing customers with goods providing customers with goods and services of appropriate and services of appropriate quality.quality.

55

History of Quality History of Quality Assurance Assurance (1 of 3)(1 of 3)

History of Quality History of Quality Assurance Assurance (1 of 3)(1 of 3)

Skilled craftsmanship during Middle Skilled craftsmanship during Middle AgesAges

Industrial Revolution: rise of inspection Industrial Revolution: rise of inspection and separate quality departmentsand separate quality departments

Early 20Early 20thth Century: statistical methods Century: statistical methods at Bell Systemat Bell System

Quality control during World War IIQuality control during World War II Post-war Japan: evolution of quality Post-war Japan: evolution of quality

managementmanagement

66

History of Quality History of Quality Assurance Assurance (2 of 3)(2 of 3)

History of Quality History of Quality Assurance Assurance (2 of 3)(2 of 3)

Quality awareness in U.S. Quality awareness in U.S. manufacturing industry during manufacturing industry during 1980s: from “Little Q” to “Big Q” - 1980s: from “Little Q” to “Big Q” - Total Quality ManagementTotal Quality Management

Malcolm Baldrige National Quality Malcolm Baldrige National Quality Award (1987) Award (1987)

Disappointments and criticismDisappointments and criticism

77

History of Quality History of Quality Assurance Assurance (3 of 3)(3 of 3)

History of Quality History of Quality Assurance Assurance (3 of 3)(3 of 3)

Emergence of quality management Emergence of quality management in service industries, government, in service industries, government, health care, and educationhealth care, and education

Evolution of Six SigmaEvolution of Six Sigma Current and future challenge: keep Current and future challenge: keep

progress in quality management progress in quality management alivealive

Key IdeaKey Idea

While quality initiatives can lead to business success, they cannot guarantee it, and one must not infer that business failures or stock price dives are the result of poor quality.

Contemporary Influences Contemporary Influences on Qualityon Quality

PartneringPartnering Learning systemsLearning systems Adaptability and speed of changeAdaptability and speed of change Environmental sustainabilityEnvironmental sustainability GlobalizationGlobalization Knowledge focusKnowledge focus Customization and differentiationCustomization and differentiation Shifting demographicsShifting demographics

Defining QualityDefining Quality

Perfection

ConsistencyEliminating waste

Fast delivery

Compliance with policies and procedures

Providing a good, usable product

Doing it right the first time

Delighting or pleasing customers

Total customer service and satisfaction

1111

Formal Definitions of Formal Definitions of QualityQualityFormal Definitions of Formal Definitions of QualityQuality

Transcendent definitionTranscendent definition: excellence: excellence Product-based definitionProduct-based definition: quantities of : quantities of

product attributesproduct attributes User-based definitionUser-based definition: fitness for : fitness for

intended useintended use Value-based definitionValue-based definition: quality vs. : quality vs.

priceprice Manufacturing-based definitionManufacturing-based definition: :

conformance to specificationsconformance to specifications

1212

Quality PerspectivesQuality PerspectivesQuality PerspectivesQuality Perspectives

CustomerCustomer

DistributionDistribution

productsproducts and and servicesservices

needsneeds

transcendent &transcendent &product-basedproduct-based user-baseduser-based

manufacturing-manufacturing- basedbased

value-basedvalue-based

MarketingMarketing

DesignDesign

ManufacturingManufacturing

Information flowInformation flowProduct flowProduct flow

Key IdeaKey Idea

Because individuals in different business functions speak different “languages,” the need for different views of what constitutes quality at different points inside and outside an organization is necessary to create products of true quality that will satisfy customers’ needs.

1414

Customer-Driven QualityCustomer-Driven QualityCustomer-Driven QualityCustomer-Driven Quality

““Meeting or exceeding customer Meeting or exceeding customer expectations”expectations”

Customers can be...Customers can be...– ConsumersConsumers– External customersExternal customers– Internal customersInternal customers

Total QualityTotal Quality

People-focused management systemPeople-focused management system Focus on increasing customer Focus on increasing customer

satisfaction and reducing costssatisfaction and reducing costs A systems approach that integrates A systems approach that integrates

organizational functions and the organizational functions and the entire supply chainentire supply chain

Stresses learning and adaptation to Stresses learning and adaptation to changechange

Based on the scientific methodBased on the scientific method

1616

Principles of Total QualityPrinciples of Total Quality

Customer and stakeholder focusCustomer and stakeholder focus Participation and teamworkParticipation and teamwork Process focus supported by Process focus supported by

continuous improvement and continuous improvement and learninglearning

…all supported by an integrated organizational infrastructure, a set of management practices,and a set of tools and techniques

1717

Customer and Customer and Stakeholder FocusStakeholder Focus

Customer is principal judge of qualityCustomer is principal judge of quality Organizations must first understand Organizations must first understand

customers’ needs and expectations in customers’ needs and expectations in order to meet and exceed themorder to meet and exceed them

Organizations must build relationships Organizations must build relationships with customerswith customers

Customers include employees and Customers include employees and society at largesociety at large

Key IdeaKey Idea

To meet or exceed customer expectations, organizations must fully understand all product and service attributes that contribute to customer value and lead to satisfaction and loyalty.

1919

Participation and Participation and TeamworkTeamwork

Employees know their jobs best and Employees know their jobs best and therefore, how to improve themtherefore, how to improve them

Management must develop the Management must develop the systems and procedures that foster systems and procedures that foster participation and teamworkparticipation and teamwork

Empowerment better serves Empowerment better serves customers, and creates trust and customers, and creates trust and motivationmotivation

Teamwork and partnerships must exist Teamwork and partnerships must exist both horizontally and verticallyboth horizontally and vertically

Key IdeaKey Idea

In any organization, the person who best understands his or her job and how to improve both the product and the process is the one performing it.

2121

Process Focus and Process Focus and Continuous ImprovementContinuous Improvement

A A processprocess is a sequence of is a sequence of activities that is intended to activities that is intended to achieve some resultachieve some result

Continuous Improvement Continuous Improvement

Enhancing value through new Enhancing value through new products and servicesproducts and services

Reducing errors, defects, waste, and Reducing errors, defects, waste, and costscosts

Increasing productivity and Increasing productivity and effectivenesseffectiveness

Improving responsiveness and cycle Improving responsiveness and cycle time performancetime performance

Key IdeaKey Idea

Major improvements in response time may require significant simplification of work processes and often drive simultaneous improvements in quality and productivity.

2424

Deming’s View of aDeming’s View of aProduction SystemProduction System

Suppliers ofmaterials and equipment

Receipt and test of materials

Design and Redesign

Consumer research

ABCD

Production, assembly inspection

Tests of processes, machines, methods

Distribution

Consumers

INPUTS PROCESSES OUTPUTS

Feedback

LearningLearning

The foundation for improvement … The foundation for improvement … Understanding why changes are Understanding why changes are successful through feedback between successful through feedback between practices and results, which leads to new practices and results, which leads to new goals and approachesgoals and approaches

Learning cycleLearning cycle::– PlanningPlanning– Execution of plansExecution of plans– Assessment of progressAssessment of progress– Revision of plans based on assessment Revision of plans based on assessment

findingsfindings

2626

Infrastructure, Practices, Infrastructure, Practices, and Toolsand Tools

Leadership Strategic HRM Process Information and knowledgeLeadership Strategic HRM Process Information and knowledge Planning mgt. managementPlanning mgt. management

Performance TrainingPerformance Training appraisalappraisal

Trend chartTrend chartToolsTools

PracticesPractices

InfrastructureInfrastructure

2727

TQ InfrastructureTQ Infrastructure

Customer relationship managementCustomer relationship management Leadership and strategic planningLeadership and strategic planning Human resources managementHuman resources management Process managementProcess management Information and knowledge Information and knowledge

managementmanagement

2828

Competitive AdvantageCompetitive AdvantageCompetitive AdvantageCompetitive Advantage

Is driven by customer wants and needsIs driven by customer wants and needs Makes significant contribution to Makes significant contribution to

business successbusiness success Matches organization’s unique resources Matches organization’s unique resources

with opportunitieswith opportunities Is durable and lastingIs durable and lasting Provides basis for further improvementProvides basis for further improvement Provides direction and motivationProvides direction and motivation

Quality supports each of these characteristics

2929

Quality and ProfitabilityQuality and ProfitabilityQuality and ProfitabilityQuality 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

Key IdeaKey Idea

Considerable evidence exists that quality initiatives positively impact bottom-line results.

Quality and Business Quality and Business Results StudiesResults Studies

General Accounting Office study of General Accounting Office study of Baldrige Award applicantsBaldrige Award applicants

Baldrige stock study (see Baldrige stock study (see www.baldrige.org) www.baldrige.org)

Hendricks and Singhal study of quality Hendricks and Singhal study of quality award winnersaward winners

Performance results of Baldrige Award Performance results of Baldrige Award winnerswinners

Key IdeaKey Idea

An organization that is committed to total quality must apply it at three levels: the organizational level, the process level, and the performer/job level.

3333

Three Levels of QualityThree Levels of Quality

Organizational levelOrganizational level: meeting : meeting external customer requirementsexternal customer requirements

Process levelProcess level: linking external and : linking external and internal customer requirementsinternal customer requirements

Performer/job levelPerformer/job level: meeting : meeting internal customer requirementsinternal customer requirements

3434

Quality and Personal Quality and Personal ValuesValuesQuality and Personal Quality and Personal ValuesValues

Personal initiative has a positive Personal initiative has a positive impact on business success impact on business success

Quality begins with personal attitudesQuality begins with personal attitudes Quality-focused individuals often Quality-focused individuals often

exceed customer expectationsexceed customer expectations Attitudes can be changed through Attitudes can be changed through

awareness and effort (e.g., personal awareness and effort (e.g., personal quality checklists)quality checklists)

Key IdeaKey Idea

In the daily attempt to bring about change in the individual parts of the organizational universe, managers, employees, professors, and students can find that personal quality is the key to unlock the door to a wider understanding of what the concept really is all about. Unless quality is internalized at the personal level, it will never become rooted in the culture of an organization. Thus, quality must begin at a personal level (and that means you!).