1

KENYA METHODIST UNIVERSITY

Distance Learning Material

SCHOOL OF BUSINESS

DEPARTMENT OF BUSINESS ADMINISTRATION

PSCM 431

QUALITY MANAGEMENT

2

PSCM 431 Quality management

Prerequisite:

Purpose

This subject examines quality management as an integration of the customer oriented

aspects of product/service, process and people in procurement and supply chain service in

organizations.

Expected Learning Outcomes

1. Examine the concepts and development of completive product and service quality

in the in value/supply chain context.

2. Analyze the design and implementation of quality management systems for

ensuring conformance and continuous improvement of quality.

3. Outline the quality culture development process with reference to human resource

management practice and leadership in organization.

Course description

Concepts of quality and study framework for quality management in transport industries;

dimensions and attributes of product and service quality in transport and logistics; Service

quality improvement in a value/supply chain context; product/service design in transport

and logistics service organization; supplier quality audit and partnership for control in

logistics outsourcing; variability control in quality awards; implementation of quality

management systems in the shipping and logistics industries; quality culture and service

quality behavior; leadership and human resource management for quality performance.

Service industry

Auto industry.

Teaching and learning approaches

Lectures

Group presentations

Assignments

3

Guest speakers

Instructional materials/equipment

Case studies

Articles form professional organizations

Assessment and examinations

Assignments 10%

CATs 20%

Semester exam 70%

100%

Core textbooks

Bicheno, J. (2002). The Quality 75: Six Sigma Performance in service and manufacturing,

PICSIE Books.

Recommended readings

Cianfrani, C. A., Tsiakals, J. J. and West, J. E. (2009), ISO9001: 2008 Explained, ASQ

Quality Press.

Evans, J. R. and Lindsay, W. M. (2008), Managing for Quality and Performance

Excellence, Thomson south Western.

Foster, S. T. (2007), Managing Quality, Integrating the Supply Chain, Prentice Hall.

Goetsch, D. L. and Davis, S. B. (2010), Quality Management for Organizational

Excellence, Prentice Hall.

Wegner, S. M. and Busse, C. (Eds.) (2008), Managing Innovation: The New Competitive

Edge for Logistics Service

4

PSCM 431 - Quality management

LESSON 1

1.) Concept of quality

Meaning of quality and what it stands for?

Seven faces of quality

Types of quality

Benefits of quality

What are the various quality management philosophies

2.) Quality management in transport industries shipping industries, public transport

industry, air transport.

3.) Quality improvement in a value chain context.

Product/service design in transport logistics servicing organization.

4.) Supplier quality audit and partnership for control in logistic sourcing.

5.) Variability control in production and service operation.

6.) Distribution quality and performance audit.

7.) ISO goal; 2008 and quality awards.

8.) Improvement of quality management system in the shipping and logistic industries.

9.) Quality culture and service quality behavior.

10.) Leadership and human resource management for quality performance.

1.) Concept of quality

Its cross functional in nature and involves the entire organization.

Need to produce a quality product for the customer.

2.) Meaning of quality

It is production of goods and services which meets the standards approved in terms of

reliability durability, conformity, perfection, consistency to the customers needs.

What is quality?

Quality is meeting customers requirement now and in the future.

Meeting or exceeding customers expectation.

5

Quality issued for continuous improvement

Its conformity to the standards required and needs of a customer.

Its giving the best now in future and forever interms of product or service.

It is what is in the eyes of the customer zero defects.

3.) What quality stands for?

Q - Need for excellence

U - Understanding customers needs.

A - Action required to achieve customers appreciation

L - Dissemination to be a better leader.

I - Involve all people.

T - The team sport to work to achieve a common goal.

Y - Its the yardstick to measure the progress of perfection.

Seven faces of quality

1.) Needs for performance how well the product or service performs the customers

intended use.

2.) Features the special attributes that appeals to the customers.

3.) The availability: Does the product need repair.

4.) Service ability: Is it serviceable and how many times and the cost and the maintenance

needs.

5.) Durability: The length of time before need to be repaired or replaced.

6.) Appearances: The taste the feel and smell etc.

7.) Customer service: The treatment received by the customer before during and after the

use.

8.) Safety: How well the product protects users before, during and after the service.

Types of quality

Indifferent: Its equality that the customer doesnt notice/appreciate.

Expected quality: what customer expects and demand e.g. cars to be safe and reliable,

rooms to be clean and neat.

6

One dimensional quality: Its the quality that the customer does not demand when

lacking e.g. restaurant poor service

Exciting quality service: It is the one that exceeds customers satisfaction e.g. quality

experienced when you drive a Mazdezbenz hence a BMW.

Benefits of quality

Brings higher returns

Increased market share

Improved reputation

Improved brand image

Improved company image

It creates easier selling

Concept of quality involves:

Perfection

Customer satisfaction

Conformity to performs the requirements

Quality and reliability management.

Doing right

Totaling of characteristics

Compliance to standards

Doing it to perfection

Consistent with the standards

Speed in delivery without waste of time.

Providing the best usable products

Pleasing customers in their needs

Total customer focus.

QUALITY MANAGEMENT PHILOSOPHIES

Quality management principles/philosophies involves.

7

1.) Customer focus they need to address the future current needs of their customers their

requirement internal and external customers.

2.) Leadership needs to establish the team spirit of unity of purpose and direction.

3.) Involving people at all levels in decision making for the achievement of organization

goals and objectives.

4.) Control and management of organizations resource and activities and managed as a

process.

5.) System approach where the departments works together as one system where processes

work together.

- It acts as a source of value to a product

- Improves productivity

- It creates employers pride

- Helps to have a quest for improvement

- Its the key to success in business

- It helps to achieve maximum customer satisfaction.

- High employee morale

- Better competitive ability

- Reaction overall costs

- Reduce product/service ability cost.

6.) Need for quality continuity improvement.

7.) Effective decision making while should be based on information and analysis of data.

8.) Mutual benefit between the supplies and the organization since both work hand in hand.

Principle 1

Need for customer satisfaction by keeping new customers.

Good transit systems attracts new customers hence increased market share.

Cost reduction by meeting customer expectation hence lowering operating costs.

There in need to know the customer.

Ned to respond to customer expectations.

Operators behavior also keeps and attracts new customers.

8

Principle 2

Manage and improve processes in terms of effectiveness and efficiency.

Through minimizing waste and operating efficiency.

There is need for efficiency effectiveness due to quality.

Need for quality.

Manage by facts (through bench marking

Through market research

Competitive bench marking

Process bench marking

IT e.g. through technology satellites modems

Continuous learning

Principle 3

Cultivate organizational learning

Continuous learning is necessary in terms of engineering processes requires learning.

Train and empower employees through recognition.

Improve labor management teamwork.

9

LESSON 2

SERVICE QUALITY IMPROVEMENT

Its a way of planning; organizing, coordinating quality management is the level of

excellence required in delivering of services to the customer and creation value.

It involves four components

Quality planning: There continuous improvement through review processes

Quality control

Quality assurance

Quality improvement

For quality to be upheld the following requirement/attribute save a necessary:

There should be focus to customers needs current and future.

The management should be strong in support.

There should be people involvement through synergy both internally and externally.

There is need for proper facts to curve up with a solid judgment.

The need to improve on the product/service the company offers.

There is need for supplier relationship with the organization with the product they offer

and the needs of what customer expect in a service product.

There should be a social system where the human resource works in conducive

environment with the employees through training development.

There is need for customer feedback.

Benefits of quality management in the service industry

Improved services systems and processes.

Increased Revenue due to the customer demand for better services

There is competitive advantage among those who over the same services/substitutes.

Good company image

There is pricing in quality where the more the superior product/quality the higher the

price.

10

There is customer satisfaction since they get value for their money.

Improved supplier relationship since they become part of the organization.

Disadvantages of quality management in the service industry

Too much expense in maintaining quality.

Time consuming to get the best through connection of errors step by step systems.

The decision is for the fop management no down to top communication.

There is resistance to change by employees to accommodate the new changes.

Consultant charges due to hiring of expert to produce the best.

11

LESSON 3

Quality management in transportation industries

There is need to perform and need to care for customers

There is concern for productivity.

There is need for concern on people.

Concept of quality management in transport industries

Needs for speed in delivery

Need of reliability

Need for conformity to the standards set

The cost factor

Speed factor

Consistency in time; the duration of time required.

Transportation cost and quality of service should be looked into e.g. low cost and slow

transportation.

Need for good packaging.

Air transport services are a major boost in human and natural resources in efficiency used

in modern society. It connects long distance travel and connects remote areas to the rest of

the world. Its dependable for perishable goods.

It acts as a catalyst in industrial development.

There is fare price efficient service.

It is quicker and avoids lead time.

It moves goods to very long distance

There is market flexibility since any writing can reach its market very quickly.

There is less damage due to good packaging.

Quality management in Air industry

12

The airline is a critical area in maintaining quality standards, quality assurance, quality

control planning and continuous improvement.

This is due to the role the air transport plays in customer satisfaction and their lives.

Examples of air transport

Airline, air ports, shipping companies, cargo agents.

Why do we require quality systems in the air transport.

Its cost saving through provision of effective and efficient quality management.

There is need for risk assessments risk management and reporting.

Quality management in shipping sector

Top management commitments

Quality information and performance measurements.

Employee training empowerment

Customer satisfaction through customer focus.

Developed fractural instruments to measure quality.

Ship transport advantages

It carries bulky goods and large package for long distance.

Disadvantages of ship transport

It lacks speed for perishable goods.

There is delay in discharge from the port.

Damages for both product and packages.

Its risky for perishable goods.

Road transport

Advantages

Provide quick service

13

Its less costly than other mode of transport e.g. air.

There is less damage due to proper packaging.

There is minimum cost.

There is little risk e.g. shocks than other mode of transport.

Its flexible since it can be scheduled.

Disadvantages

Not conducive for perishable goods.

Its more costly than railway transport.

Its more risky than railway transport.

Limited transport volume.

Traffic jams.

Legal restructures.

Effects of weather.

Air transport

Disadvantages

Inability to provide public goods

In line with the societies preference

There is imperfect competition

Financial constrain due to lack of proper technical skills in terms of personnel.

Competition in air space.

Carries goods in small quantities.

Its costly than other mode of transport.

There is airport congestion and handling customs delays plus more paperwork.

Non cooperation of staff

Maximization of risks due to terrorism.

Railway transport

Its less costly

14

Its suitable for long distance

In terms of containers its better

It helps in transfer of bulky goods

No effect on climate

No congestion traffic.

Capital requirement is high.

Lack of maintenance personnel

High cost of maintenance.

Road

Use different routes to reach their destination

Does door to door service

High safety for the large

One can select the carrier to carry the luggage.

15

LESSON 4

What is service quality behavior?

This entails retention of customers to ascertain service. The behavior of a customer

portrays the level of satisfaction towards a particular service. The delivery of a quality of

service is the major survival of a company due to the increased competition among

various competitors in the market.

Benefits of good service quality

Increased in profit

Customer loyalty

Good company image

Increased market share

Customer satisfaction

Enhancement of staff morale

Effect of service quality on behavior intentions

If a service is of high standard and conforms to the customer specification the behavior

of the customer will bring the following benefits

A lot of good recommendation about the customers companies services.

Recommendations of a company services to other people.

More money is spent by customers in the service given by the company

If a company produces poor quality service there will be negative altitude about the

company.

There is switching of customers to a better competitive company that offer the same

services but in a better service.

Complains to external agencies that are in relation to the company.

Less business is due with the company

16

LESSON 6

What is quality culture?

For a company to have culture it plays a great rule in its performance management.

The various elements found in a company culture are:

The way they do their things

Work group norms through synergy

Their main values which influences altitudes and behavior rules of the game in getting

along with others in the company

Atmosphere created by the physical layout and then environment decorations.

Corporate culture plays a big role in company success and quality is a combination of

the elements of successful companies.

The basic values are:

There is a believe of the company being the best

The need to do the job well

The importance of employees as individuals

A belief in the superior quality and service

Need for trust

There is need for an organization to have innovators and incase of any failure it should

be taken positively.

Informal communication encouraged

What are the best practices for total quality culture in an organization?

Inequality in the work place to the quality in the employees lives.

Need to eliminate communication barriers on workers/leaders

Replace incentives for a duty attractive pay package

Train workers and managers for quality together

Use quality to eliminate waste and reduce uneccessa4y costs

Use total quality management to continue quality practices.

17

Make workers to be in the fore front to individual customers requirements.

Quality management implementations upheld in logistic adjustment industry becomes

successful due to the following factors:

The top management is committed to the process and participate fully in the process.

Good quality information with dependable data also brings implementation successful.

Performance measurements among various departments.

There is need to train the employees in logistic processes and quality

Empowerment of individuals e.g. through business, recognizing.

The customer focuses where customers are valued as the king his/her needs are met.

Factors that makes quality Management implementation in the shipping industry a

success are:

Customer focus and satisfaction due to good products and services offered.

Employees training to be skilled in dealing with the process

Leadership and top man agent commitment through synergy.

Teamwork amongst the various departmental functions.

Focusing on the most profitable area and focus attention in by practicing proper quality.

18

LESSON 7

How is quality management implemented in the shipping and logistics industries?

What is quality culture and service quality behavior

Leadership and culture for quality performance.

Contact to customers

Effective leadership is a necessity

There is need for leaders to flows inequality commitment and quality improvement

Requirement of quality leadership

In any organization quality is a necessity and quality leadership is the driving force for

quality to improve in an organization

There is need for quality leadership which includes:

He/she sees leadership as responsibility not a career.

He/she earns trust by his followers

He/she motivates groups to achieve and give guidance to others

He/she listens to his followers and remove blocks which can block the improvement of

an organization

He/she take the initiative and employees follow.

He/she demonstrates commitments

One who satisfies a customers needs.

He/she should have commitment to quality

He/she create an environment of development of employees.

Importance of leadership in implementation of total quality management in an

organization

This comes as a result of visionary leadership.

A leader must be visible in the process committed and knowledge of what is required in

quality management. The leader employs on quality and is in the picture of how a

company is doing.

Personal involvement in educating training and giving recognition to his/her employees

19

Need for personal contact with suppliers, customers and the employees.

The leaders create a mission of promoting quality outside the organization.

The leaders set targets by introducing different processes and improving different

processes and improving processes

The leaders emphasize on zero defects to drive improvement thus bringing customer

satisfaction and quality improvements.

The leaders insist of communication of values change, written process mission

statement and statements of quality values.

Leaders act as coaches rather necessary where interaction between the lower levels is

encouraged.

20

LESSON 8

Role of human resource management in quality management

There is need for a flat organization structure where employees have a say to the

process like the leaders.

There is need to embrace good communication which is in formal between employees

and the management

There is need to educate a quality improvement

Training and development is necessary to make employees the day to days trends on

quality as it s advancing in improvement due to quality awards.

There is need to reward and recognize the employee on what they have done in quality

management.

Need to promote employees and improve on their pay package.

Organization culture involves values, beliefs norms and informal practices shared by

employees culture plays the role of competitive edge and organization performance.

Barriers to quality implementation

Lack of readiness to accept change

A concern of quality it lacking

why organization succeeds

Need to supervise quality

Create product and processes that meets customer needs

Quality is primary goal

Quality commitment

Use statement which supports culture

Support by top management

Focus on the customer

Improvement in all business practices

Breaking down of organ barriers

Improving companys objective

21

Realigning rewards and measurement

Barriers to quality implementation

No communication

No participation in decision making

Lack of trust among all employees

A sense of ownership and responsibility

22

LESSON 9

1. Reasons of outsourcing logistics

It helps a company to concentrate on core competencies

There lowering of cost in transport

It creates flexibility in an organization since it allows change in production

There creation of innovation to the organization

There is improvement in quality of product and service

What are the advantages of outsourcing major activities in an organization?

There is sharing of various risks

There is efficiency in material flow in value chain and supply chain process

It helps the organization to concentrate in core competencies

There saving of time since the outsourced is efficient in meeting the

What is service quality behavior?

This entails retention of customers to ascertain service. The behavior of a customer

portrays the level of satisfaction towards a particular service. The delivery of a quality of

service is the major survival of a company due to the increased competition among

various competitors in the market.

Benefits of good service quality

Increased in profit

Customer loyalty

Good company image

Increased market share

Customer satisfaction

Enhancement of staff morale

Effect of service quality on behavior intentions

23

If a service is of high standard and conforms to the customer specification the behavior

of the customer will bring the following benefits

A lot of good recommendation about the customers companies services.

Recommendations of a company services to other people.

More money is spent by customers in the service given by the company

If a company produces poor quality service there will be negative altitude about the

company.

There is switching of customers to a better competitive company that offer the same

services but in a better service.

Complains to external agencies that are in relation to the company.

Less business is due with the company

What is quality culture?

For a company to have culture it plays a great rule in its performance management.

The various elements found in a company culture are:

The way they do their things

Work group norms through synergy

Their main values which influences altitudes and behavior rules of the game in getting

along with others in the company

atmosphere created by the physical layout and then environment decorations.

Corporate culture plays a big role in company success and quality is a combination of

the elements of successful companies.

The basic values are:

There is a believe of the company being the best

The need to do the job well

The importance of employees as individuals

A belief in the superior quality and service

Need for trust

24

There is need for an organization to have innovators and incase of any failure it should

be taken positively.

Informal communication encouraged

What are the best practices for total quality culture in an organization?

Inequality in the work place to the quality in the employees lives.

Need to eliminate communication barriers on workers/leaders

Replace incentives for a duty attractive pay package

Train workers and managers for quality together

Use quality to eliminate waste and reduce uneccessa4y costs

Use total quality management to continue quality practices.

Make workers to be in the fore front to individual customers requirements.

25

LESSON 10

Quality management implementations upheld in logistic adjustment industry becomes

successful due to the following factors:

The top management is committed to the process and participate fully in the process.

Good quality information with dependable data also brings implementation successful.

Performance measurements among various departments.

There is need to train the employees in logistic processes and quality

Empowerment of individuals e.g. through business, recognizing.

The customer focuses where customers are valued as the king his/her needs are met.

Factors that makes quality Management implementation in the shipping industry a

success are:

Customer focus and satisfaction due to good products and services offered.

Employees training to be skilled in dealing with the process

Leadership and top man agent commitment through synergy.

Teamwork amongst the various departmental functions.

Focusing on the most profitable area and focus attention in by practicing proper

quality..

How is quality management implemented in the shipping

Contact to customers

Effective leadership is a necessity

There is need for leaders to flows inequality commitment and quality improvement

26

LESSON 11

Requirement of quality leadership

In any organization quality is a necessity and quality leadership is the driving force for

quality to improve in an organization

There is need for quality leadership which includes:

He/she sees leadership as responsibility not a career.

He/she earns trust by his followers

He/she motivates groups to achieve and give guidance to others

He/she listens to his followers and remove blocks which can block the improvement of

an organization

He/she take the initiative and employees follow.

He/she demonstrates commitments

One who satisfies a customers needs.

He/she should have commitment to quality

He/she create an environment of development of employees.

Importance of leadership in implementation of total quality management in an

organization

This comes as a result of visionary leadership.

A leader must be visible in the process committed and knowledge of what is required in

quality management. The leader employs on quality and is in the picture of how a

company is doing.

Personal involvement in educating training and giving recognition to his/her employees

Need for personal contact with suppliers, customers and the employees.

The leaders create a mission of promoting quality outside the organization.

The leaders set targets by introducing different processes and improving different

processes and improving processes

The leaders emphasize on zero defects to drive improvement thus bringing customer

satisfaction and quality improvements.

27

The leaders insist of communication of values change, written process mission

statement and statements of quality values.

Leaders act as coaches rather necessary where interaction between the lower levels is

encouraged.

Role of human resource management in quality management

There is need for a flat organization structure where employees have a say to the process

like the leaders.

There is need to embrace good communication which is in formal between employees

and the management

There is need to educate a quality improvement

Training and development is necessary to make employees the day to days trends on

quality as it s advancing in improvement due to quality awards.

There is need to reward and recognize the employee on what they have done in quality

management.

Need to promote employees and improve on their pay package.

Organization culture involves values, beliefs norms and informal practices shared by

employees culture plays the role of competitive edge and organization performance.

Barriers to quality implementation

Lack of readiness to accept change

A concern of quality it lacking why organization succeeds

Need to supervise quality

Create product and processes that meets customer needs

Quality is primary goal

Quality commitment

Use statement which supports culture

Support by top management

Focus on the customer

Improvement in all business practices

28

Breaking down of organ barriers

Improving companys objective

Realigning rewards and measurement

No communication

No participation in decision making

Lack of trust among all employees

A sense of ownership and responsibility

29

LESSON 12

2. Reasons of outsourcing logistics

It helps a company to concentrate on core competencies

There lowering of cost in transport

It creates flexibility in an organization since it allows change in production

There creation of innovation to the organization

There is improvement in quality of product and service

What are the advantages of outsourcing major activities in an organization?

There is sharing of various risks

There is efficiency in material flow in value chain and supply chain process

It helps the organization to concentrate in core competencies

There saving of time since the outsourced company is efficient in meeting the quality

requirements to maintain the contract

There is good coordination of material flow from the inbound to the end user s who are

the customers

There is efficient monitoring of stock out and lead time periods

DISADVANTAGES OF OUTSOURCING OTSOURCING MAJOR ACTIVITES IN

AN ORGANISATION

1 There is risk of revealing of company secrets to the outsourcing company.

2 Some outsource activities may fail to meet the requirement of quality.

3 The employees become resistant to change since they become incompetent in their skills

What is supplier quality audit

This is the process in which a supplier is checked by various stake holders to ensure quality

delivery procedures and policies are followed and kept on being reviewed often.

A supplier should be able to meet the manufacturers requirements

Product evaluation is necessary

There is need to meet the high level assembly requirements

30

There is need to be signs of stability

There is need to establish the suppliers capability

There is need to have suppliers quality systems

There is need for training

There should be volumes commitments without variations

There is need for documentation of the process flow

The supplier manufacturer relationship

The manufacturer should access the capability of each supplier

The suppliers should also be involved in product development

There should be communication between the supplier and the manufacturer on the service

and product quality

The supplier should understand the product development cycle

There is need for the parties to provide quality to the customers

There is need for quality improvement

Need to have on time deliveries

There is need to review written procedures and quality assurance systems

What is performance audit

This is the system proves used in assessing the process in an organization to test whether

things are done ,resources are utilized and managed in an efficient manner leading to

improvement.

Purpose of performance audit

To increase effectiveness through performance measurements

It helps in improvement of performance through achieving of goals and set objectives