Chapter 9

Introduction to Quality

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Different Ways to Define Quality

• User-based quality– defined by the customers and their

expectations

• Operations-based quality– degree to which an item conforms to

specifications provided by the designers

• Product-based quality– viewed as a precise and measurable

variable, i.e., fastest, biggest, smallest

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Dimensions of Quality (1 of 2)

• Performance - main characteristics of the product/service

• Aesthetics - appearance, feel, smell, taste

• Special features - extra characteristics

• Conformance - how well product or service conforms to customer’s expectations

• Safety - risk of injury

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Dimensions of Quality (2 of 2)

• Reliability - consistency of performance• Durability - useful life of the product or

service• Perceived quality - indirect evaluation of

quality (e.g. reputation)• Service after sale - handling of

customer complaints or checking on customer satisfaction

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Examples of Quality Dimensions (1 of 2)

Dimension

1. Performance 2. Aesthetics 3. Special features Convenience High tech 4. Safety

(Product) Automobile

Everything works, fit & finish Ride, handling, grade of materials used Interior design, soft touch Gauge/control placement Cellular phone, CD player Antilock brakes, airbags

(Service) Auto Repair

All work done, at agreed price Friendliness, courtesy, Competency, quickness Clean work/waiting area Location, call when ready Computer diagnostics Separate waiting area

Table 9-1

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Examples of Quality Dimensions (2 of 2)

Dimension

5. Reliability 6. Durability 7. Perceived quality 8. Service after sale

(Product) Automobile

Infrequency of breakdowns Useful life in miles, resistance to rust & corrosion Top-rated car Handling of complaints and/or requests for information

(Service) Auto Repair

Work done correctly, ready when promised Work holds up over time Award-winning service department Handling of complaints

Table 9-1

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Service

Design Ease ofuse

Conformance to design

Determinants of Quality

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Why Quality is Important to the Firm?

• Reduces costs and increases market share

• Improves company reputation

• Reduces chances of product liability suits

• International implications

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Some Consequences of Poor Quality

• Loss of business

• Liability

• Productivity

• Costs

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Costs of Quality (1 of 2)

• Failure Costs - costs incurred by defective parts/products or faulty services.– Internal Failure Costs

• Costs incurred to fix problems that are detected before the product/service is delivered to the customer.

– External Failure Costs• All costs incurred to fix problems that are

detected after the product/service is delivered to the customer.

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Costs of Quality (2 of 2)

• Appraisal Costs– All product and/or service quality

inspection costs.

• Prevention Costs– All quality training, quality planning,

customer assessment, process control, and quality improvement costs to prevent defects from occurring

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Key Contributors to Quality Management

Contributor

Deming Juran Crosby Ishikawa Taguchi

Known for

14 points; special & common causes of variation Quality is fitness for use; quality trilogy Quality is free; zero defects Cause-and effect diagrams; quality circles Loss function; robust design; design of experiments

Quality

Table 9-6

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Baldrige Award

Deming Prize

Quality Awards

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Malcolm Baldrige National Quality Award (1 of 2)

• Began in 1987• Recognizes achievements of

excellent organizations and provide examples to others– may give two awards in each category

• manufacturing• small business• service• health care• education

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Malcolm Baldrige National Quality Award (2 of 2)

• Establishes criteria for evaluating quality efforts

• Provides guidance for other American companies

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2001 MBNQA Categories and Scoring System

1.0 Leadership 1202.0 Strategic Planning 853.0 Customer and Market Focus 854.0 Information and Analysis 905.0 Human Resource Focus 856.0 Process Management 857.0 Business Results 4508.0 Global Market Development and

Competitiveness (optional) 100

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Deming Prize• Instituted 1951 by Union of Japanese

Scientists and Engineers (JUSE) honoring W. Edwards Deming

• Several categories including prizes for individuals, factories, small companies, and Deming application prize

• Japan’s highly coveted award• Main focus on statistical quality control• American company winners

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Quality CertificationISO 9000

• Set of international standards on quality management and quality assurance, critical to international business

• ISO 9000 series standards, briefly, require firms to document their quality-control systems at every step (incoming raw materials, product design, in-process monitoring and so forth) so that they’ll be able to identify those areas that are causing quality problems and correct them

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ISO 9000 Helps companies determine which standard of ISO 9001, 9002, and 9003 applies

ISO 9001 Outlines guidelines for companies that engaged in design, development, production, installation, and servicing of products or service. Now incorporates the former ISO 9002 and ISO 9003 standards.

ISO 9002 Similar to 9001, but excludes companies engaged in design and development

ISO 9003 Covers companies engaged in final inspection and testing

ISO 9004 The guidelines for applying the elements of the Quality Management System

ISO 9000: 2000 SeriesTable 9-7 modified

Combined with ISO 9001

Combined with ISO 9001

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ISO 9000 Registration Process (1 of 3)

• When an organization feels that its quality system is good enough, it may ask an accredited registrar or other third party audit team for pre-assessment

• Feedback is provided regarding how well the company’s systems meet certification standards

• The company makes adjustments based on this information

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ISO 9000 Registration Process (2 of 3)

• The final audit begins with a review of the company's quality manual, which the accredited registrar or third party audit team typically uses as its guide

• The audit team checks to see that the documented quality system meets the requirement of ISO 9000 and that the organization is practicing what is documented

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ISO 9000 Registration Process (3 of 3)

• When the registrar is satisfied with the favorable recommendation of the audit team, registration is granted

• This certification lasts three years during which the registrar periodically monitors the company

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ISO 14000

• ISO 14000 - A set of international standards for assessing a company’s environmental performance

• Standards in three major areas– Management systems– Operations– Environmental systems

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ISO 14000• Management systems

– Systems development and integration of environmental responsibilities into business planning

• Operations– Consumption of natural resources and

energy

• Environmental systems– Measuring, assessing and managing

emissions, effluents, and other waste