chapter 1 introduction to quality managing for quality and performance excellence, 7e, © 2008...

Chapter 1Chapter 1Chapter 1Chapter 1

Introduction to Quality

MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 1

Modern Importance of QualityModern Importance of QualityModern Importance of QualityModern 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


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.

Quality AssuranceQuality Assurance

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


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

Skilled craftsmanship during Middle AgesIndustrial Revolution: rise of inspection

and separate quality departmentsEarly 20th Century: statistical methods at

Bell SystemQuality control during World War IIPost-war Japan: evolution of quality

managementMANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 5


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

Malcolm Baldrige National Quality Award (1987)

Disappointments and criticism


Key IdeaKey Idea


Although 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.


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

Evolution of quality to performance excellence Growth and adoption of Six SigmaCurrent and future challenge: continue to apply

the principles of quality and performance excellence. Quality is “a race without a finish line.”


Contemporary Influences on Contemporary Influences on QualityQualityGlobalizationInnovation/creativity/changeOutsourcingConsumer sophisticationValue creationChanges in quality


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 customersTotal customer service and

satisfaction

Formal Definitions of QualityFormal Definitions of QualityFormal Definitions of QualityFormal Definitions of Quality

Transcendent definition: excellenceProduct-based definition: quantities of

product attributesUser-based definition: fitness for intended

useValue-based definition: quality vs. priceManufacturing-based definition:

conformance to specifications


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 flow

Product 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.

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

“Meeting or exceeding customer expectations”

Customers can be...◦Consumers◦External customers◦Internal customers


Total QualityTotal QualityPeople-focused management systemFocus on increasing customer

satisfaction and reducing costsA systems approach that integrates

organizational functions and the entire supply chain

Stresses learning and adaptation to change

Based on the scientific method


Principles of Total QualityPrinciples of Total Quality

Customer and stakeholder focusParticipation and teamworkProcess focus supported by continuous

improvement and learning


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

Customer and Stakeholder Customer and Stakeholder FocusFocus

Customer is principal judge of qualityOrganizations 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


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.

Participation and TeamworkParticipation 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


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.

Process Focus and Continuous Process Focus and Continuous ImprovementImprovement

A process is how work creates value for customers

Processes transform inputs (facilities, materials, capital, equipment, people, and energy) into outputs (goods and services)

Most processes are cross-functional


Key IdeaKey Idea


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

Continuous Improvement Continuous Improvement Enhancing value through new products

and servicesReducing errors, defects, waste, and

costsIncreasing productivity and effectivenessImproving responsiveness and cycle

time 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.

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 OUTPUTSFeedback

LearningLearning

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


Infrastructure, Practices, and Infrastructure, Practices, and ToolsTools


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

TQ InfrastructureTQ InfrastructureCustomer relationship managementLeadership and strategic planningHuman resources managementProcess managementInformation and knowledge management


Competitive AdvantageCompetitive AdvantageCompetitive AdvantageCompetitive Advantage

Is driven by customer wants and needsMakes significant contribution to business

successMatches organization’s unique resources with

opportunitiesIs durable and lastingProvides basis for further improvementProvides direction and motivation


Quality supports each of these characteristics

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 Results Quality and Business Results StudiesStudies

General Accounting Office study of Baldrige Award applicants

Hendricks and Singhal study of quality award winners

Performance results of Baldrige Award recipients


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.

Three Levels of QualityThree Levels of QualityOrganizational level: meeting external

customer requirementsProcess level: linking external and

internal customer requirementsPerformer/job level: meeting internal

customer requirements


Quality and Personal ValuesQuality and Personal ValuesQuality and Personal ValuesQuality and Personal ValuesPersonal initiative has a positive impact on

business success Quality-focused individuals often exceed

customer expectationsQuality begins with personal attitudesAttitudes can be changed through awareness and

effort (e.g., personal quality checklists)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!).


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.

chapter 1 introduction to quality managing for quality and performance excellence, 7e, © 2008...

Documents

educationevolution of

quality initiatives

quality awareness

principles of quality

quality merchandise

performance excellence

result of poor quality

little q