1. what is quality? - giz global campus 21 · 1. what is quality? authur r turner and irvings...

TRADE AFRICA Trade Promotion Program

An Export Guide for SMEs in Southern Africa 1

1. What is Quality?

Authur R Turner AND Irvings Detero define quality as: A basic business strategy that provides goods/services which completely satisfy both internal and external customers by meeting their explicit and implicit expectations. This strategy utilizes the all talents of all employees to the benefit of the organization in particular, society in general, and provides a positive financial return the stakeholders. GItlow/Gitlow/ Oppenheim /Oppenheim define quality as:

A judgement by customers or users of a product or service; it is the extent to

which the customers or users believe the product or service surpasses their

needs and expectations.

According to GItlow/Gitlow/ Oppenheim and Oppenheim Quality also

encompasses the never ending improvement of a firm’s extended process.

This term refers to the expansion of the organisation to include suppliers,

customers, investors, employees, and the community

The two definitions explicitly place customer satisfaction as the ultimate goal

of an organisation.

2. Types of Quality

Three types of quality to be considered are: Design, Conformance and

Performance.

Design: It is essential to determine the a product or service concept that

satisfies the customer – the form, size and colour of a product, does it fit to

current taste and design standards? Is it a modern design or more old

fashioned? The material used to build the product will also have an important

impact on the design. How flexible is the material, is the material liked by the



customers? Aspects of design also have to do with cultural issues. Certain

countries prefer certain colours – so there is no one good design in general,

but a good design for a specific target group.

Performance – does the product deliver what is promises continuously? Does

it have all the functions needed for this product. How often does the product

need a repair? How long does it last? Performance can be determined

through customer reaearch and service and sales call analysis

Conformance – are all the products the same? When you produce sweets – do

all sweets have the same ingredients in amount and quality. When you produce

a steel tool, do all tools have the same amount of steel used in production?

The need for Customer research

Consumer research is a collection of procedures implemented to clarify

customer needs. The study should be on going so that the organisation will

always be in touch with changing customer needs

3. Sources of Loss in Quality

A loss in quality may occur when a process generates products or services

whose specifications deviates from the needs of individuals in a market

segment. This can be redressed by increasing the number of market segments

and tailoring the product to consumer’s requirements.



A loss in quality also occurs when a process generates goods or services

whose quality characteristics are not uniform. Such variation causes a product

to function inconsistently for a given market segment.

The two sources of loss in quality should be determined in the quality of

performance assessment. This information should then be fed into the quality

of design stage and the quality of conformance stage.



4. Why Quality?

Quality is of major importance for any company, especially in export business.�

High quality of exports realises higher unit value��Quality has also become a

major issue in any business development project and in cooperation with large

companies. �

• BENEFITS OF IMPROVING QUALITY

Productivity rises

• Cost per good unit decreases

• Price can be cut

• Workers morale may improve because they are not seen as the problem

5. Who Defines Quality?

There are different national and international organisations defining quality

standards. One of the most known international standards it the ISO 9001 /

2000 standard. But there are other certifications CMM Levels (software

development) for specific industries. But, besides all standards in product

quality or processes, in the end, it is the customer that will define what quality

is by his needs and wishes.

Regional and International Institutions for Standards are:

SABS South Africa Bureau of Standards

TBS Tanzania Bureau of Standards

ZBS Zambia Bureau of Standards

MBS Malawi Bureau of Standards

INNOQ Mozambique Standards Bureau

ISO International Standards Organisation

6. Quality Assurance via ISO 9001



ISO 9001 / 2000 is an international quality assurance and certification system.

The ISO – the International Standardization Organization was founded in 1947

by the United Nations. Since then it has been working to develop and foster

standardization systems for all over the world.

ISO formulates all procedures and work processes for each company,

business and production process possible. How to do every step of the way in

the production and business cycle?

For example, a company producing steel frames receives a shipload of steel.

Now the handbook gives a whole set of procedures and steps that need to be

taken in order to test the material etc, before it goes into production. All of

these steps have to be followed with each shipload and all of these activities

have to be documented.

Every two years, ISO controllers will come to the company and check, whether

the company follows the work processes and procedures set up for this kind of

business and / or production and whether the documentation is correct.

ISO 9001 / 2000 also requires that all employees are aware of the processes,

know the handbook and have the current edition of the relevant handbook

available at their work place.

The main goal of ISO 9001 / 2000 is the improvement of product quality. In

comparison to other systems like TQM, ISO 9001 / 2000 it does not include the

management aspect or the inclusion of partners – e.g. suppliers.

Generally, the effect of ISO 9001 / 2000 certification is, that the production

processes are taking place on a more objective level, with more awareness to

what one is doing. The work processes are clearly defined. There is still the



danger, that unnecessary services/work are included, but if so, they are

definitely provided in a better quality.

The newest version of ISO 9001 / 2000 asks in addition to the former for a

continuous improvement of processes. So for the future certification ISO will

ask not only for a comparison of procedures and doing, but also for a

continuous checking and improving of these procedures and doing.

7. HOW TO IMPROVE QUALITY

Constancy of purpose:

A firm’s mission statement, operating philosophy and goals should provide a

framework for consistent action on day-to-day and long term basis. Everyone I

the extended process should be encouraged to cooperate and continually

improve quality and meet customer needs.

Quality Consciousness:

This refers to the rejection of commonly accepted levels of defects, rework and

poor service with the realization that defects are not for free- somebody makes

them and is paid for doing so, further more the organization. Defects detection

is the lowest form of quality consciousness since it entails the expectation of

making defects and the assumption that the defects will be found during

inspection and action taken afterwards.

Play the role of inspector and count the number of fs in the following passage.

FINISHED FILLES ARE THE RESULT OF YEARS OF SCIENTIFIC STUDY

COMBINED WITH THE EXPERIENCE OF MANY YEARS.



Did you find the six fs? This demonstrates the fallibility of 100% inspection. It

is therefore more convenient for an organization to adopt Defect prevention

which emphasizes improving the process so that defects are not made.

Quality in supplied goods

Many organizations purchase solely on the basis of price, without adequately

measuring quality. It is important to realize that for the end product to be of

quality all inputs should also be of quality.

8. Checklists

In order to improve the quality in your company’s work there are several

checklists, which will help you to start improving your companies quality. All of

the checklists will go by questions/questionnaires, which need to be answered

from the background of the work in your company.

3 MU checklist

6 W checklist

6 M checklist

3-Mu Checklist

The employees’ ability to solve problems will be improved via training. Content

wise the trainings should concentrate on the implementation of PDCA (Plan-

Do-Check-Act) cycle. For this, the following checklists are very helpful.

1. Waste (Muda)

2. Overloading (Muri)

3. Deviation (Mura)

concerning:

• Employees



• Technology

• Methods

• Time

• Possibility

• Tools and equipment

• Material

• Product volume

• Turn around

• Place

• Way to think

6-W-Checklist

What?

What needs to be done?

What is done right now?

What should be done?

What else can also be done?

What else also needs to be done?

What 3-Mu“ are done?

Why?

Why is it done?

Why should it be done?

Why is it done here?

Why is it not done differently?

Why is it done this way?

Are there the „3-Mu“ in the way to think?

How? (Unfortunately the translation from German does not work here)

How is it done?



How should it be done?

Could this method be used in different areas?

Is there anything else that could be done this way?

Are there the „3-Mu“ in this method?

Where?

Where should it be done?

Where is it done?

Where could it also be done?

Where should it also be done?

Where are the „3-Mu“ done?

Who?

Who is doing what?

Who is doing it right now?

Who should be doing it?

Who else could do it?

Who else should do it?

Who is doing the „3-Mu“?

When?

When is it done?

When is it really done?

When should it be done?

When could it also be done?

When should it also be done?

When are the three „3-Mu“ are done?

6-M Checklist

Mensch (Human)



Is he following the standards?

Is his work efficiency acceptable?

Does he think problem oriented?

Is he dependable?

Is he sufficiently qualified?

Does he have enough experience?

Is the work place appropriate for him?

Is he willing to improve?

Is he supportive to good relations with colleagues?

Is he healthy?

Machine

Does the machine fit to the needs of production?

Does the machine fit to the needs of the processes?

Is the machine regularly maintained?

Is the inspection and control done enough?

Are there problems (mechanical, electronic) which lead to a stand still of the

machinery often?

Does the machine work sufficiently accurate?

Does the machine produce unmoral sounds or materials?

Is the layout for the machine correct?

Are there enough machines?

Do they all stand in the right line for the way of production?

Material

Are there deviations with regard to volume?

Are there deviations with regard to quality?

Is it the right brand?

Does the material contain leftovers or dirt?

Is the amount of the turn around correct?

Is any material wasted?



Is the material transport right and efficient?

Is the turn around of material sufficiently checked?

Is the quality standard of the material sufficient?

(Working) Method

Are there appropriate work standards

Has this work standard been raised?

Is the method clear?

Does the method guarantee a good product?

Is the method efficient?

Does the follow up of work steps make sense?

Are the methods of work tuned to each other in a sensible form?

Are the methods known and used?

Is there enough contact between the different processes?

Measure

Are there fitting measurement procedures?

Do the measurement procedures fit to the needs of the processes?

Are measurements done regularly?

Is the measuring equipment in excellent condition?

Are there regular checks on the measurement equipment?

Is the amount of measurement equipment sufficient?

Is the measuring exact enough?

Is the measuring done efficiently?

Is there enough time to doe the measuring?

Is there a documentation of measuring data?

“Milieu”(surrounding)

Is the surrounding appropriate?

Is the lightning sufficient?

Is the air conditioning (ventilation) sufficient?



Are there disturbing vibrations?

Do temperature and humidity fit?

Is the air to breeze clean?

Are there enough rooms for breaks?

Does the working climate fit?

Are there any possibilities to exchange ideas and problems with colleagues

and superiors?



9. Quality Systems

There are different quality systems that are accepted internationally. Quality

systems are used to ensure that products or services being produced meet

customer expectations and international standards. Below is a historic

development of the quality systems:-

i. Innovator Quality System: The question of quality used to be solved

by innovations. It was innovations and new inventions that brought

an additional amount of quality to the production process and to the

products. This system was used for a long time until production

started in factories.

ii. Foreman Quality System: Quality was achieved by the control of the

foreman. The workers did not control their quality anymore as they

had done during the times of the innovator quality system but a

foreman in the factory controlled their work and ensured a certain

quality standard.

iii. Statistical Quality System: The statistical quality system evolved

with machinery and mass production. The quality of products was

now defined statistically.

iv. Quality Management: This refers ability of the management of a

company to ad hear to all aspects of quality. The quality of the

management was included into the definition of quality. Was a

company well managed and was it flexible?

v. Total Quality Management (TQM) is today a standard in quality

thinking. It does not only include the statistical elements of quality or

the management aspect but it also takes into account the needs of



the customer, all aspects of marketing and the production process

into the quality scheme.

10. Definition of Total Quality Management

Total Quality Management (TQM) is the most far-reaching approach towards

quality for a company anywhere in the world. It is much more than a pure

control of product quality, it includes every aspect of the company’s work.

Every letter of the short cut TQM underlines important aspects and contents of

the approach:

“T” as in Total

Means the integration of „everybody“ not only the employees but also the

customers and suppliers into the concept of quality. No more thinking in

isolated functional areas (such as quality in the production process) but an all

parts of the company including approach.

It means:

Integration and participation of customers

Integration and participation of employees

Integration and participation of suppliers

“Q” stands for Quality

It includes the quality of work, the quality of processes within the company and

the quality of the company itself, because out of these, the quality of the

products develops naturally. So,

Quality of work,

Quality of work processes,

Quality of the company,

= results into quality of the products / services of the company

“M“ stands for Management



This underlines the importance of leadership and management in the world of

quality. Quality has to be managed and also the management has to be of high

quality.

From the company perspective TQM can become a most central strategy to

lead the company, including:

Implementing and continuing quality leadership in all departments of the

company

High quality management (setting a positive example)

Support teamwork and additional competencies of employees

Showing persistence in implementation and control

The 12 Guiding Elements Towards TQM

1. Understanding and implementing the new perspective

2. Active support of the general management for TQM

3. Personnel development for leadership positions

4. Changes in Management Behaviour

5. Orientation towards employees

6. Orientation towards customers

7. Integration of suppliers

8. Strategic / general positioning of the company on the basis of general

values and goals of the company

9. Setting of goals and following them

10. Preventive measures to ensure quality

11. Continuous improvement on all levels

12. Quality controlling

10.1 Understanding and Implementing the New Perspective



What does that mean?

Better quality costs less and not more. Most of the time people believe, that

better quality cannot be achieved together with higher productivity. This is

wrong! But how does productivity increase and at the same time improving

quality?

The answer: Because of a better quality in processes, additional work,

unnecessary spending and mistakes are reduced. Quality is the key to

productivity.

Higher process quality means:

Machines are used more often, longer or more effectively

Shorter time spans for material to run through the production process

Fewer material storage

Better product quality

Fewer unshakeable products and additional work

Higher Product quality results in:

Improved functionality and reliability

Reduced cost in the warranty period

Lesser cost to remove mistakes / faults and

Increasing satisfaction of customers.

10.2 Active Support of the General Management for TQM

What does that mean?

The implementation of TQM is a strategic – a general decision for a company. It

can result into changes for all structures and departments of a company. Such

decisions can pop up opposition from various sides – employees and / or

management. The implementation of TQM has to be lead and fully supported

by the general management. It cannot be just delegated to a “quality manager”.

Only the general management has the necessary authority to implement

changes as such.



What does it actually mean, when the general management participates in the

process?

The general management takes over the function of a paragon, a positive

example. This is important for all employees as it gives the security and

assurance that their own work and input is correct.

The support and interaction of the general management ensures that there

will be an important „power“ within the company promoting this.

They show: quality is a topic for the general management and therefore for

everybody in the company.

10.3 Personnel Development for Leadership Positions

What does it mean?

TQM is a method to lead a company, which is based on support of all

personnel working in the organisation. So, leadership has to be designed, in

order to give all employees the possibility to participate.

Quality will be produced by the people working in the company; only when the

environment works will there be a possibility for them to provide full energy for

servicing the customers. It is the task of the management to provide this

surrounding for the employees.

A new positioning within the company develops out of this: the employee

becomes the customer of the general management.

And what is it these customers want? They need a surrounding that suffices

their needs; that supports their creativity and their engagement within their

work. They will ask for new forms of cooperation. They have to be part of the

process and taken into account.

These changes ask for an open relationship between all participants.

Openness is based on trust and trust can only develop, when the leadership



offers trust to the employees openly. The leader (no matter at what level) has to

be advisor, supporter and partner for his employees on the basis of a general

guideline, which speaks of respect for the personality of those involved.

Teamwork is necessary to use all the potential of the employees, also the

leadership has to be prepared for this new form of cooperation. Social

competence becomes even more important as much as the ability to

communicate and to moderate.

10.4 Changes in Management Behaviour

Change in Management

From To

Boss, Provider of orders

Trainer of a team, communicating

goals, explaining why decisions are

taken or actions are needed

Controller Supporter, positive example

Single leader Team member

Internally competing Internally cooperating and externally

competing

Closed, unapproachable Open, approachable

Owner mentality – this is my company,

you are working for me, I pay your

salary and you do what I say

Caretaker mentality – the company

has been given to me to take care of

it, I am responsible to create an

environment, where the personnel can



develop its potential most effectively

10. 5 Orientation Towards Employees

What does it mean?

Important for the orientation towards employees is how do you view your

employees? Every employee offers a potential of creativity and problem

solving capacity to the company. A company becomes to life through its

employees. Without employees the company does not function, even though

machinery is used more or less heavily. It is the employees who are most

important.

Orientation towards employees needs a work surrounding where the employee

has a chance become actively involved in the company, to be part of the

company. They should have the possibility to act independently, to gain

personnel satisfaction and to use their creativity for the good of the company.

10.6 Orientation Towards Customers

What does it mean?

The customer – not the company – defines what is actually meant by quality.

The bottom line for your quality standard is the satisfaction of your customers.

Satisfied customers are the basis of existence for your company and the only

instrument to ensure long-term survival and success of the company.

What is the result?

The goals of customer orientation are satisfied and even better enthusiastic

customers, who take along their friends. The customers need to be bound to

the company via their satisfaction and enthusiasm.



This offers several advantages:

The rate of reselling to a customer becomes higher, the more comfortable

and satisfied a customer is.

The costs for marketing and selling, which are necessary to keep up the

relation to this customer will decrease with time.

Old customers react less sensitive towards price increases than new

customers.

Satisfied customers will advise others on your company and support you by

word of mouth.

Looking at number, it works like this:

It is 600 % more expensive to gain new customers than to keep old ones.

There is a 300 % larger possibility with satisfied customers that they will order

again than with unsatisfied customers.

Nearly as big is the possibility that very satisfied customers will become the

100% best advertisers for the company – word of mouth.

95 % of the angry customers will stay with the company when the problem is

solved within five days.

75 % of those customers changing to competitors will do so because of

inadequate quality of service.

25 % of those customers changing to competitors are doing so because of low

product quality or high prices.

Guidelines for Customer Oriented Behaviour



• The customer always comes first – leave everything else when a

customer is there. The customer should never feel that he is disturbing

internal activities of the company - he does not disturb your work – he is

the reason for you working there at all.

• You are not doing a favour to the customer servicing him – it is the

customer doing you a favour when he allows you to serve him.

• Address the customer by his name – he is not a number, but a human

being with needs and feelings like you.

• Explain what you are doing – but do not act like a superior specialist, the

customer might know more than you.

• Excuse yourself if something went wrong, if the customer had to wait, if

. . . .

• Take up the responsibility if something went wrong – for your customer

you are the supplier. Do not search for other colleagues responsible or

for specific circumstances.

• The customer has to be the winner in a claim discussion – not you!

• Be open, if there is something you do not know – it makes you more

credibility than a judgement without knowledge.

• Do not discuss or argue with colleagues in front of customers – they are

not interested in these.

• The customer pays your salary. So he is not an outsider but the most

important part of your business.

Remember: Nobody has ever won an argument with a customer.

10.7 Integration of Suppliers

What does it mean?

The quality of the product you are delivering is not only depending on your

own work, but also on the quality of your supplier and the form of cooperation



with the supplier can be of central importance for the competitiveness of your

company.

Forms of cooperation

• Pure component delivery, supplier knows how to produce the parts

needed - he becomes a product specialist.

• Component delivery plus additional services, the supplier becomes a

partner in development, sets up its own development facilities for

module or system supply.

• Component delivery plus problem solving capacities (knowledge,

experience) for product and process innovation.

The third most intensive form of cooperation is only possible, when you have a

limited number of suppliers.

The intensive cooperation has several advantages compared to a more

competitive relationship with the suppliers. From the perspective of direct cost,

they are:

• The costs for searching and testing new suppliers will be reduced.

• The cost for discussions and the set up of quality measures with new

suppliers will be reduced.

• Cost for quality control will be reduced.

• Cost for needed changes and improvements in the ongoing business

relationship will be reduced.

• Possibility for „Just-in-Time delivery.

• The supplier has a chance to deliver a larger number of pieces and

therefore use its machinery more effectively.

10.8 Strategic / General Positioning of the Company on the Basis of

General Values and Goals of the Company



What does it mean?

To implement Total Quality Management is a strategic decision, which will

affect the whole company. Depending on the size of the company it will take up

to 3 to 7 years – the continuous development is a never-ending process. On the

way to TQM all structures and processes will be put into question, maybe

changed or remain. It is important for the employees to have a guideline in this

process of change, because they will ask where are we heading at?

When the only constant element in your work life is change, the management

has to provide support. This can be given via basic company values and a

clear company aim. These should not change but stay continuously. All

changes have to take place in accordance with these two.

Basic Values

Basic values are enduring and long lasting principles of the companies

working. Basic values define how the business in the company is to be done.

How the general community is seen from the perspective of the company and

what the role of the company is within the society.

10.9 Setting Goals and Following Them

Companies define strategic goals. They look at a time span of 5 to 10 years.

These goals need to be put into more concrete plans (with specifically defined

goals) on a yearly basis. This is done by a comparison of the current situation

and planned for status of the company. When comparing current situation and

planned for status, there will be differences naturally. These differences have

to be reduced through changes and improvements within the company.

The goals of the year concerned will be divided into part goals and those are

given to the various departments / sections of a company and combined with



the measures to be taken. With the specific measures, it will be possible for

everybody in the company to understand, what is his part in reaching the

overall goals. It is important here that the various parts of the company are

included into the planning process.

10.10 Preventive Measures to Ensure Quality

What does it mean?

Even 100% controls do not increase the quality. Dependency on these controls

is a sign that the production processes are not able to reach the specifications

set and that mistakes are even expected. Controls of the product come to late,

are ineffective and expensive, because if a mistake is found, the material and

the production time has already been spent. Quality cannot be controlled into

the product.

There need to be preventive measures to ensure quality. It has to start with the

product development, with the planning and realization of the production sites

and throughout the whole production process.

The key to preventive quality ensurance lies with the systematic using of

quality techniques. These have been developed to avoid mistakes from the

beginning. To name a few:

Quality Function Deployment,

Mistake potential and importance analysis

Design of Experiments

Statistical Process Control.

Its results?

Experience shows that app. 70 percent of all mistakes take place up to the

process planning and that 80% of the mistakes are taken out during controls

and while using the product.



10.11 Continuous Improvement at all Levels

What are we looking at?

The Japanese have the term of Kaizen, which actually stands for the strive for

continuous improvement. This is not a method to solve one existing problem

but a never-ending process of improvement.

The process is structured into various activities:

Planning (Plan)

Doing

Checking

Acting

This follow-up of activities is called PDCA Cycle. First a plan for the

improvement is made and planned for changes are defined, methods are

chosen and indicators are developed, potential obstacles are discussed. In the

next step the activities will be implemented.

The efficiency of the methods and measures will be controlled with the help of

the indicators (Check), good results will be standardized, developments and

results out of plan have to be analysed. The experiences and results are used

for the next process (Act). The improvement process itself will be improved.

What does it result in?

Results for the employee Result for the company

• Improved self confidence via joint

solving of problems

• Improved work processes

• Stronger identification with the • Improved cooperation between the



company due to participation

possibilities at work.

departments of the company

• Higher satisfaction due to active

involvement at work

• Reduction of

research/development and

production cost

• Reduced rate of sickness • Higher competitiveness

11.Quality Assurance via ISO 9001

ISO 9001 / 2000 is an international quality assurance and certification

system. The International Standards Organization (ISO) was founded

in 1947 by the United Nations. Since then it has been working to

develop and foster standardization systems all over the world.

ISO formulates all procedures and work processes for each company,

business and production process possible. For example if a company

producing steel frames receives a shipload of steel the handbook

gives a whole set of procedures and steps that need to be taken in

order to check the material if it conforms to laid down standards

before it goes into production. All of these steps have to be followed

with each shipload and all of these quality checks have to be

documented for future use in case of disputes.

Every two years ISO controllers (inspectors) may visit a selected

company to check if the company is following the work processes,

guidelines and procedures set up for this kind of business and / or

production and whether the documentation is correct.



ISO certification is internationally recognized and can be a powerful

marketing tool in international business. However, implementation

and its accreditation costs including testing costs are not easily

affordable by most companies including SMEs.

Regional and International Institutions for Standards

An exporter should always check with local standards bodies, which

from time to time produce standards that conform to international quality

requirements for a number of products and processes.

Some of the regional and International Institutions for Standards are:

SABS South Africa Bureau of Standards

TBS Tanzania Bureau of Standards

ZBS Zambia Bureau of Standards

MBS Malawi Bureau of Standards

INNOQ Mozambique Standards Bureau

ISO International Standards Organisation

1. what is quality? - giz global campus 21 · 1. what is quality? authur r turner and irvings...

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