Chapter 1Chapter 1

Introduction to Quality

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Modern 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

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What is Quality?

"The totality of features and characteristics of a product or service that bears on its ability to satisfy given needs."

"Meeting or exceeding customer expectations.

Quality is grounded on three core principles: focus on customers;

participation and teamwork; and continuous improvement and

learning. These are supported by the organizational infrastructure that includes: customer relationship

management, leadership and strategic planning, human resources

management, process management, and data and information management,

as well as a set of management practices and tools.

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Quality Assurance

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

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Benchmarking

• Nordstrom vs. K-Mart

• L’ Avenue vs. La Caille

• Cliff Lodge vs. Motel 6

• Aerie’s vs. Chuckarama

• John Nash vs. Ted Bundy

• John Chambers vs. Albert Dunlap

• Tom Brokaw vs. Randal Carlisle

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History of Quality Assurance (1 of 2)History of Quality Assurance (1 of 2)

• Skilled craftsmanship during Middle Ages

• Industrial Revolution: rise of inspection and separate quality departments

• Statistical methods at Bell System

• Quality control during World War II

• Quality management in Japan

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

• Quality awareness in U.S. manufacturing industry during 1980s: “Total Quality Management”

• Malcolm Baldrige National Quality Award (1987)

• Quality in service industries, government, health care, and education

• Current and future challenge: keep progress in quality management alive

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Contemporary Influences on Quality

• Parterning• Learning systems• Adaptability and speed of change• Environmental sustainability• Globalization• Knowledge focus• Customization and differentiation• Shifting demographics

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Definitions of QualityDefinitions of Quality

• Transcendent definition: excellence• Product-based definition: quantities of

product attributes• User-based definition: fitness for intended

use• Value-based definition: quality vs. price• Manufacturing-based definition:

conformance to specifications

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Quality 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

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Customer-Driven QualityCustomer-Driven Quality

• “Meeting or exceeding customer expectations”

• Customers can be...– Consumers

– External customers

– Internal customers

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Total Quality

• People-focused management system• Focus on increasing customer satisfaction

and reducing costs• A systems approach that integrates

organizational functions and the entire supply chain

• Stresses learning and adaptation to change• Based on the scientific method

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Principles of Total Quality

• Customer and stakeholder focus• Participation and teamwork• Process focus and continuous

improvement

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

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Customer and Stakeholder Focus

• Customer is principal judge of quality• Organizations 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

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Participation 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

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Process Focus and Continuous Improvement

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

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Continuous Improvement

• Enhancing value through new products and services

• Reducing errors, defects, waste, and costs

• Increasing productivity and effectiveness

• Improving responsiveness and cycle time performance

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Deming’s View of a Production 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

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Learning• 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

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Infrastructure, Practices, and Tools

Leadership Strategic HRM Process Data and information Leadership Strategic HRM Process Data and information Planning mgt. managementPlanning mgt. management

Performance TrainingPerformance Training appraisalappraisal

Trend chartTrend chartToolsTools

PracticesPractices

InfrastructureInfrastructure

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TQ Infrastructure

• Customer relationship management• Leadership and strategic planning• Human resources management• Process management• Data and information management

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Competitive AdvantageCompetitive Advantage

• Is driven by customer wants and needs• Makes significant contribution to business

success• Matches organization’s unique resources with

opportunities• Is durable and lasting• Provides basis for further improvement• Provides direction and motivation

Quality supports each of these characteristics

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Quality 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

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Evidence that Quality Impacts Business Results

• General Accounting Office study of Baldrige Award applicants

• Baldrige stock study (see www.quality.nist.gov)

• Hendricks and Singhal study of quality award winners

• Performance results of Baldrige Award winners

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GAO TQ Model

Product andservice quality

Customersatisfaction

Leadership for continuous improvement

Quality systems andemployee involvement

Competitiveness

Organization benefits

Reliability

On-time delivery

Error/defects

Overall satisfaction

Customer retention

Complaints

CostsCycle timeTurnoverSatisfaction

Safety & health

Productivity

Market share

Profits

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Three Levels of Quality

• Organizational level: meeting external customer requirements

• Process level: linking external and internal customer requirements

• Performer/job level: meeting internal customer requirements

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Quality and Personal ValuesQuality and Personal Values

• Personal initiative has a positive impact on business success

• Quality begins with personal attitudes

• Quality-focused individuals often exceed customer expectations

• Attitudes can be changed through awareness and effort (e.g., personal quality checklists)