QUALITY MANAGEMENTQUALITY MANAGEMENT

INTRODUCTION TO QUALITYINTRODUCTION TO QUALITY

Participation(the use of terms)

• Motivation• Quality circles• QIT’s

Participation(the use of terms)

• Motivation• Quality circles• QIT’s

Practice(the application of

thought)

• Principles• Process • Barriers• Benefits

Practice(the application of

thought)

• Principles• Process • Barriers• Benefits

Philosophy(the power of thinking)

• Definitions• Perceptions• Brief history• Gurus

Philosophy(the power of thinking)

• Definitions• Perceptions• Brief history• Gurus

DEFINITIONS OF QUALITYDEFINITIONS OF QUALITY• A degree of excellence A degree of excellence ((Oxford DictionaryOxford Dictionary)) • Fitness for use Fitness for use ((Dr Joseph M JuranDr Joseph M Juran))• Conformance to requirements Conformance to requirements ((P CrosbyP Crosby))• Quality should be aimed at the needs of the Quality should be aimed at the needs of the

consumer, present and future consumer, present and future ((Dr W E DemingDr W E Deming))• The total composite product and service The total composite product and service

characteristics of marketing, engineering, characteristics of marketing, engineering, manufacture and maintenance through which the manufacture and maintenance through which the product and service will meet the expectations of the product and service will meet the expectations of the consumer consumer ((Dr Armand V FeigenbaumDr Armand V Feigenbaum))

• The totality of features and characteristics of a The totality of features and characteristics of a product or service that bear on its ability to satisfy product or service that bear on its ability to satisfy stated or implied needs stated or implied needs ((ANSI/ASQANSI/ASQ))

• Produce and deliver products which meet and exceed Produce and deliver products which meet and exceed customers expectations continuouslycustomers expectations continuously

• Performance exceeding expectations (Performance exceeding expectations (Q = P/EQ = P/E))

QUALITY ADVOCATESQUALITY ADVOCATES• To become familiar with seven quality masters and To become familiar with seven quality masters and

their philosophies of quality management and their philosophies of quality management and continuous improvementcontinuous improvement

• To understand the concepts of managing a total To understand the concepts of managing a total quality environment in order to improve quality, quality environment in order to improve quality, increase productivity and reduce costsincrease productivity and reduce costs

• To learn the basic involved in the creation of a To learn the basic involved in the creation of a system to support an overall quality environmentsystem to support an overall quality environment

““Most individuals are motivated to do the best they Most individuals are motivated to do the best they can. Sometimes though, the goal seems too far away can. Sometimes though, the goal seems too far away and too hard to reach. The problem appears too big and too hard to reach. The problem appears too big to tackle. How does a company deal with these to tackle. How does a company deal with these issues? How can managers enable their employees issues? How can managers enable their employees to do their best?to do their best?””

Dr. Walter Shewhart (1891-1967)Dr. Walter Shewhart (1891-1967)• Two aspect of quality (writing)Two aspect of quality (writing)- Customer wants (Customer wants (subjective aspectsubjective aspect))- Physical properties of the goods or service (Physical properties of the goods or service (objective objective

aspectaspect))• Another important aspect of quality is the value received Another important aspect of quality is the value received

for the price paidfor the price paid• Create statistical methods to control and improve the Create statistical methods to control and improve the

quality of the processes that provides goods and servicesquality of the processes that provides goods and services• Working at Bell Laboratories in the 1920s and 1930s, he the Working at Bell Laboratories in the 1920s and 1930s, he the

first to encourage the use of statistics to identify, monitor, first to encourage the use of statistics to identify, monitor, and eventually remove the sources of variation found in and eventually remove the sources of variation found in repetitive processesrepetitive processes

• Identified two sources of variationIdentified two sources of variation- Controlled variationControlled variation (common causes) is (common causes) is variation present variation present

in a process due to the very nature of the processin a process due to the very nature of the process- Uncontrolled variationUncontrolled variation (special or assignable causes) (special or assignable causes) comes comes

from sources external to the processfrom sources external to the process

Dr. Walter Shewhart (1891-1967)Dr. Walter Shewhart (1891-1967)• Forth fundamental principleForth fundamental principle- A process under controlA process under control- Exhibiting only controlled variationExhibiting only controlled variation- Future process performance can be predicted Future process performance can be predicted

1) within limits1) within limits2) on the basis of past performance2) on the basis of past performance

• Develop the formulas and a table of constants used to Develop the formulas and a table of constants used to create the most widely utilized statistical control charts in create the most widely utilized statistical control charts in qualityquality

• Figure 1Figure 1 control chart ( control chart (X-bar and R chartX-bar and R chart) appeared on 16 ) appeared on 16 May 1924May 1924

• Control charts have three purposeControl charts have three purpose- To define standards for the processTo define standards for the process- To aid in problem-solving efforts to attain the standardsTo aid in problem-solving efforts to attain the standards- To serve to judge if the standards have been metTo serve to judge if the standards have been met

Tiger Woods used control charts for their training in golf Tiger Woods used control charts for their training in golf shootingshooting

Dr. Walter Shewhart (1891-1967)Dr. Walter Shewhart (1891-1967)

Figure 1: Typical X-bar and R ChartsFigure 1: Typical X-bar and R Charts

Dr. Walter Shewhart (1891-1967)Dr. Walter Shewhart (1891-1967)

Dr. W. Edwards Deming (1900-1993)Dr. W. Edwards Deming (1900-1993)• To teach optimal management strategies and practices for To teach optimal management strategies and practices for

organizations focused on qualityorganizations focused on quality• Encourage top-level management to get involved in the Encourage top-level management to get involved in the

process of creating an environment that supports continuous process of creating an environment that supports continuous improvementimprovement

• Graduate from Yale University 1928 – his message/ideas was Graduate from Yale University 1928 – his message/ideas was not accepted in the United Statesnot accepted in the United States

• Help turn Japan into an industrial force to be reckoned Help turn Japan into an industrial force to be reckoned • Considered improving quality leads to decreased costs, fewer Considered improving quality leads to decreased costs, fewer

mistakes, fewer delay, and better use of resources;mistakes, fewer delay, and better use of resources;- which in turn leads to improved productivity- which in turn leads to improved productivity- which enables a company to capture more of the marketwhich enables a company to capture more of the market- which enables the company to stay in businesswhich enables the company to stay in business- which results in providing more jobs which results in providing more jobs • QualityQuality must defined in terms of must defined in terms of customer satisfactioncustomer satisfaction• Focus on management involvement, continuous improvement, Focus on management involvement, continuous improvement,

statistical analysis, goal setting, and communicationstatistical analysis, goal setting, and communication• Deming’s philosophy encourage company leaders to dedicate Deming’s philosophy encourage company leaders to dedicate

themselves and their companies to the long-term improvement themselves and their companies to the long-term improvement of the quality of their products or servicesof the quality of their products or services

Dr. W. Edwards Deming (1900-1993)Dr. W. Edwards Deming (1900-1993)Aimed primarily at management with his 14 points as a guidelineAimed primarily at management with his 14 points as a guideline1.1. Create a constancy of purpose toward improvement of product and Create a constancy of purpose toward improvement of product and

service, with the aim to become competitive and to stay in business service, with the aim to become competitive and to stay in business and to provide jobsand to provide jobs

2. Adopt the new philosophy2. Adopt the new philosophy3. Cease dependence on inspection to achieve quality3. Cease dependence on inspection to achieve quality4. End the practice of awarding business on the basis of price tag 4. End the practice of awarding business on the basis of price tag

alone. Instead minimize total cost alone. Instead minimize total cost 5. Constantly and forever improve the system of production and 5. Constantly and forever improve the system of production and

serviceservice6. 6. Institute training on the jobInstitute training on the job7. 7. Institute leadershipInstitute leadership8. 8. Drive out fearDrive out fear9.9. Break down barriers between departmentsBreak down barriers between departments10.Eliminate slogans, exhortations, and targets for the work force10.Eliminate slogans, exhortations, and targets for the work force11.Eliminate arbitrary work standards and numerical quotas. Substitute 11.Eliminate arbitrary work standards and numerical quotas. Substitute

leadershipleadership12.Remove barriers that rob people of their right to pride of 12.Remove barriers that rob people of their right to pride of

workmanshipworkmanship13.Institute a vigorous program of education and self-improvement13.Institute a vigorous program of education and self-improvement14.Put everybody in the company to work to accomplish the 14.Put everybody in the company to work to accomplish the

transformationtransformation

Dr. W. Edwards Deming (1900-Dr. W. Edwards Deming (1900-1993)1993)

• Deming’s point about driving out fear and removing barriers Deming’s point about driving out fear and removing barriers stress the importance of communicationstress the importance of communication

• Improved management-employee interaction as well as Improved management-employee interaction as well as increased communication between departments will lead to increased communication between departments will lead to more effective solutions to the challenges of creating a product more effective solutions to the challenges of creating a product or providing a serviceor providing a service

• Use statistics and quality technique espoused by Dr. Shewhart Use statistics and quality technique espoused by Dr. Shewhart to reducing the variation present in a process. to reducing the variation present in a process.

• Process improvement is best carried out in three stages;Process improvement is best carried out in three stages;-- Get the process under control by identifying and eliminating Get the process under control by identifying and eliminating

the sources of uncontrolled variation. Remove the special the sources of uncontrolled variation. Remove the special causes responsible for this variationcauses responsible for this variation

- Once the special cause have been removed and the process is Once the special cause have been removed and the process is stable, improve the process. Tackle the common cause stable, improve the process. Tackle the common cause responsible for the controlled variation present in the process. responsible for the controlled variation present in the process. Determine if process changes can remove them from the Determine if process changes can remove them from the process. Investigate whether or not waste exists in the processprocess. Investigate whether or not waste exists in the process

- Monitor the improved process to determine if the changes that Monitor the improved process to determine if the changes that were made are workingwere made are working

Dr. W. Edwards Deming (1900-Dr. W. Edwards Deming (1900-1993)1993)

• Dr. Deming encouraged the use of the Plan-Do-Study-Act Dr. Deming encouraged the use of the Plan-Do-Study-Act ((PDSAPDSA) cycle – systematic approach to problem solving) cycle – systematic approach to problem solving

• Many of the concepts and ideas he espoused can be found Many of the concepts and ideas he espoused can be found in today’s continuous improvement program and in today’s continuous improvement program and international standards (international standards (e.g. ISO 9000:2000 versione.g. ISO 9000:2000 version))

• Companies must continuously strive to improve; after all, Companies must continuously strive to improve; after all, the competition isn’t going to wait for us to catch up!the competition isn’t going to wait for us to catch up!

Dr. Joseph M. Juran (1904 – xxxx)Dr. Joseph M. Juran (1904 – xxxx)• Approach involves creating awareness of the need to Approach involves creating awareness of the need to

improve, making quality improvement an integral part of improve, making quality improvement an integral part of each job, providing training in quality methods, establishing each job, providing training in quality methods, establishing team problem solving, and recognizing resultsteam problem solving, and recognizing results

• Quality is a concept that needs to be found in all aspects of Quality is a concept that needs to be found in all aspects of a businessa business

• Companies can reduce the costs associated with poor Companies can reduce the costs associated with poor quality and remove chronic waste from their organizationquality and remove chronic waste from their organization

• Three managerial processes (Three managerial processes (Juran Trilogy ProgramJuran Trilogy Program););

1.1. Quality PlanningQuality Planning encourages the development of methods encourages the development of methods to stay in tune with customer’s needs and expectationsto stay in tune with customer’s needs and expectations

2.2. Quality ControlQuality Control involves comparing products produced with involves comparing products produced with goals and specificationsgoals and specifications

3.3. Quality ImprovementQuality Improvement involves the ongoing process of involves the ongoing process of improvement necessary for the company’s continued improvement necessary for the company’s continued successsuccess

Dr. Joseph M. Juran (1904 – xxxx)Dr. Joseph M. Juran (1904 – xxxx)

Dr. Joseph M. Juran (1904 – xxxx)Dr. Joseph M. Juran (1904 – xxxx)• Forth fundamentals (Forth fundamentals (Juran on Leadership for Quality: An Juran on Leadership for Quality: An

Executive HandbookExecutive Handbook))

1.1. Upper management leadershipUpper management leadership

2. 2. Continuous educationContinuous education

3. Annual planning for quality improvement and3. Annual planning for quality improvement and

4.4. Cost reductionCost reduction• Successful improvement efforts encourage breakthroughs in Successful improvement efforts encourage breakthroughs in

knowledge and attitudesknowledge and attitudes• Project-by-ProjectProject-by-Project implementation procedure, project teams implementation procedure, project teams

are set up to investigate and solve specific problems (are set up to investigate and solve specific problems (Figure Figure 22))

• The project teams should be composed of individuals with The project teams should be composed of individuals with diverse backgroundsdiverse backgrounds

• Diversified group also aids in implementing the solutions Diversified group also aids in implementing the solutions foundfound

Dr. Joseph M. Juran (1904 – xxxx)Dr. Joseph M. Juran (1904 – xxxx)

Juran’s Journey from Symptom to Cause: Juran’s Journey from Symptom to Cause:

Quality Improvement in ActionQuality Improvement in Action

Dr. Armand Feigenbaum (1920 – xxxx)Dr. Armand Feigenbaum (1920 – xxxx)• Considered to be the originator of the total quality movementConsidered to be the originator of the total quality movement• Defined quality based on a customer’s actual experience with Defined quality based on a customer’s actual experience with

the product or servicethe product or service• Graduate from MIT and published Total Quality Control in 1951Graduate from MIT and published Total Quality Control in 1951• He predicted that quality would become a significant customer-He predicted that quality would become a significant customer-

satisfaction issue – consumers have come to expert quality to satisfaction issue – consumers have come to expert quality to be an essential dimension of the product or service they are be an essential dimension of the product or service they are purchasingpurchasing

• Quality is not a factor to be managed but a method of Quality is not a factor to be managed but a method of ““managing, operating, and integrating the marketing, managing, operating, and integrating the marketing, technology, production, information, and finance areas technology, production, information, and finance areas throughout a company’s quality value chain with the throughout a company’s quality value chain with the subsequent favorable impact on manufacturing and service subsequent favorable impact on manufacturing and service effectivenesseffectiveness” (” (article Changing Concepts and Management of article Changing Concepts and Management of Quality Worldwide, Dec. 1997Quality Worldwide, Dec. 1997) )

• Quality systemQuality system are a method of are a method of managing an organizationmanaging an organization to to achieve customer satisfaction, lower overall costs, higher achieve customer satisfaction, lower overall costs, higher profits, and greater employeeprofits, and greater employee

• Statistical methodsStatistical methods and and problem-solvingproblem-solving techniques should be techniques should be utilized to effectively utilized to effectively support businesssupport business strategies aimed at strategies aimed at achieve customer satisfaction achieve customer satisfaction

Philip Crosby (1926 – 2001)Philip Crosby (1926 – 2001)

• Four absolutes of quality management set expectations Four absolutes of quality management set expectations for a continuous improvement process to meetfor a continuous improvement process to meet

1.1. Quality DefinitionQuality Definition : Conformance to : Conformance to requirementsrequirements

- - Customer requirements must define the products or Customer requirements must define the products or service in terms of measurable characteristicsservice in terms of measurable characteristics

2. Quality System2. Quality System : Prevention of Defects: Prevention of Defects-- The system that needs to be in place in order to ensure The system that needs to be in place in order to ensure

that the products or services provided by a company meet that the products or services provided by a company meet the requirements of the customerthe requirements of the customer

3. Quality Performance Standard : Zero Defects3. Quality Performance Standard : Zero Defects-- Refers to making products correctly the first time, with no Refers to making products correctly the first time, with no

imperfectionsimperfections4. Quality Management4. Quality Management : Cost of Quality: Cost of Quality-- Cost associated with providing customers with a product Cost associated with providing customers with a product

or service that conforms to their expectationsor service that conforms to their expectations

Dr. Kaoru Ishikawa (1915-1989) Dr. Kaoru Ishikawa (1915-1989) • One of the first individuals to encourage total quality controlOne of the first individuals to encourage total quality control• Quality must be defined broadly and focused in every aspects Quality must be defined broadly and focused in every aspects

of an organization, including the quality of information, of an organization, including the quality of information, processes, service, price, systems, and peopleprocesses, service, price, systems, and people

• All individuals employed by a company should become All individuals employed by a company should become involved in quality problem solvinginvolved in quality problem solving

• He advocated the use of seven quality tools (He advocated the use of seven quality tools (Figure 3Figure 3))• Ishikawa developed the Ishikawa developed the cause-and-effect diagramcause-and-effect diagram ( (early 1950searly 1950s))- Used to find the root cause of problemsUsed to find the root cause of problems- Also called the Also called the Ishikawa diagramIshikawa diagram or or fish-bone diagramfish-bone diagram• Also promoted the use of Also promoted the use of quality circlesquality circles, , teams that meet to teams that meet to

solve quality problems related to their own worksolve quality problems related to their own work• Participants receive training in the seven tools, determine Participants receive training in the seven tools, determine

appropriate problems to work on, develop solutions, and appropriate problems to work on, develop solutions, and establish new procedures to lock in quality improvementsestablish new procedures to lock in quality improvements

Dr. Kaoru Ishikawa (1915-1989)Dr. Kaoru Ishikawa (1915-1989)

Figure 3: Seven Tools of QualityFigure 3: Seven Tools of Quality

Dr. Genichi Taguchi (1924 – xxxx)Dr. Genichi Taguchi (1924 – xxxx)• Developed methods that seek to improve quality and Developed methods that seek to improve quality and

consistency, lower losses, and identify key product and process consistency, lower losses, and identify key product and process characteristics before productioncharacteristics before production

• Taguchi method emphasize consistency of performance and Taguchi method emphasize consistency of performance and significantly reduced variationsignificantly reduced variation

• Taguchi methods design the experiment to systematically weed Taguchi methods design the experiment to systematically weed out a product’s or process’s insignificant elementsout a product’s or process’s insignificant elements

There are four basic steps;There are four basic steps;

1.1. Select the process/product to be studiedSelect the process/product to be studied

2.2. Identify the important variablesIdentify the important variables

3. Reduce variation on the important variables through redesign, 3. Reduce variation on the important variables through redesign, process improvement, and toleranceprocess improvement, and tolerance

4.4. Open up tolerances on unimportant variablesOpen up tolerances on unimportant variables

Summarizes each Quality Summarizes each Quality Advocate’sAdvocate’s

QUALITY DIMENSIONS (Garvin, 1998)QUALITY DIMENSIONS (Garvin, 1998)DimensionsDimensions MeaningMeaning

PerformancePerformance Primary product characteristicsPrimary product characteristicsFeaturesFeatures Secondary characteristics added featuresSecondary characteristics added featuresConformanceConformance Meet specification or industry standards, Meet specification or industry standards,

workmanshipworkmanshipReliabilityReliability Consistency of performance overtimeConsistency of performance overtimeDurabilityDurability Useful lifeUseful lifeServiceService Resolution of problems and complaints, Resolution of problems and complaints,

ease ease of repairof repairResponseResponse Human-to-human interfaceHuman-to-human interfaceAestheticsAesthetics Sensory characteristicsSensory characteristicsReputationReputation Past performance, ranking firstPast performance, ranking first

• Independent dimensionsIndependent dimensions• Focus on a few dimensionsFocus on a few dimensions

(e.g. Japanese Cars – reliability, conformance, and aesthetics) (e.g. Japanese Cars – reliability, conformance, and aesthetics)

PERCEPTIONS OF QUALITYPERCEPTIONS OF QUALITY

• JAPAN – JAPAN – SONY, TOYOTASONY, TOYOTA

• GERMANY – GERMANY – BMW, MERCEDESBMW, MERCEDES

• SWITZELAND – SWITZELAND – ROLEX, SWISS ARMYROLEX, SWISS ARMY

• HOLLAND – HOLLAND – SHELL, DUTCH LADYSHELL, DUTCH LADY

• KOREA – KOREA – SAMSUNG, HYUNDAISAMSUNG, HYUNDAI

• FINLAND – FINLAND – NOKIANOKIA

• USA – USA – MOTOROLA, INTELMOTOROLA, INTEL

• SWEDEN – SWEDEN – ERICSSON, VOLVOERICSSON, VOLVO

• CHINA – CHINA – SILKSILK

HISTORICAL REVIEWHISTORICAL REVIEW• Middle age – Craft – Guilds (training) – the person Middle age – Craft – Guilds (training) – the person

providing the service dealt directly with the customerproviding the service dealt directly with the customer• Industrial Revolution – Specialization of laborIndustrial Revolution – Specialization of labor• Decline in workmanship, product still not complicated Decline in workmanship, product still not complicated

– still 100% inspection– still 100% inspection• 1900’s – Frederick Taylor legitimized the use of 1900’s – Frederick Taylor legitimized the use of

inspectors to ensure the quality of finished productinspectors to ensure the quality of finished product• 1924 – Walter Shewhart developed statistical chart 1924 – Walter Shewhart developed statistical chart

(Book: Economic Control of Quality of Manufactured (Book: Economic Control of Quality of Manufactured Product)Product)

• Dodge & Romig developed acceptance sampling as a Dodge & Romig developed acceptance sampling as a substitute for 100% inspectionsubstitute for 100% inspection

• 1942 – US Managers failed to recognize value of SQC1942 – US Managers failed to recognize value of SQC• 1946 – ASQC (now ASQ) was formed1946 – ASQC (now ASQ) was formed• 1950 – W E Deming lectures CEOs in Japan on SQC1950 – W E Deming lectures CEOs in Japan on SQC

HISTORICAL REVIEWHISTORICAL REVIEW• 1954 – Joseph Juran went to Japan – Management’s 1954 – Joseph Juran went to Japan – Management’s

responsibility for qualityresponsibility for quality• 1960 – Quality Control Circle (QCC) formed in Japan – 1960 – Quality Control Circle (QCC) formed in Japan –

quality improvementquality improvement• 1980’s – US Quality Movement, TQM concepts 1980’s – US Quality Movement, TQM concepts

publishedpublished• Late 1980’s – Automotive industry emphasize SPC, Late 1980’s – Automotive industry emphasize SPC,

suppliers required to use Malcolm Balridge Award suppliers required to use Malcolm Balridge Award established (to measure TQM implementation), established (to measure TQM implementation), Taguchi method, Design of Experiments (DOE)Taguchi method, Design of Experiments (DOE)

• 1990’s – ISO 9000 series became Global QA 1990’s – ISO 9000 series became Global QA standard, QS 9000 introduced by automotive standard, QS 9000 introduced by automotive industry customer satisfaction ISO 14000industry customer satisfaction ISO 14000

• 2000 – New ISO 9000:2000 version, Six Sigma 2000 – New ISO 9000:2000 version, Six Sigma Program introduce information technologyProgram introduce information technology

EVOLUTION OF QUALITYEVOLUTION OF QUALITY

InspectionInspection• An activity which involves measuring, examining, testing one An activity which involves measuring, examining, testing one

or more product or service characteristics and comparing these or more product or service characteristics and comparing these with specified requirement to determine conformity (with specified requirement to determine conformity (ISO 8402ISO 8402))

• Inspection refers to those activities designed to detect or find Inspection refers to those activities designed to detect or find nonconformance's existing in already completed products and nonconformance's existing in already completed products and services (services (Donna C S Summers, 2003Donna C S Summers, 2003))

• Expensive and fallibleExpensive and fallible

EVOLUTION OF QUALITYEVOLUTION OF QUALITY

Quality ControlQuality Control• Use techniques and activities to achieve, sustain and improve Use techniques and activities to achieve, sustain and improve

quality of products or service (quality of products or service (ISO 8402ISO 8402))• Involves paperwork and procedures control system, self Involves paperwork and procedures control system, self

inspection by operators, product testing, etc.inspection by operators, product testing, etc.• Both Both inspectioninspection and and qualityquality controlcontrol are operating in a detection are operating in a detection

modemode• The focus tends to be on switching the blame to othersThe focus tends to be on switching the blame to others• The aim should be towards quality improvementThe aim should be towards quality improvementStatistical Quality Control (SQC)Statistical Quality Control (SQC)• Part of Total Quality Management (TQM)Part of Total Quality Management (TQM)• Collection, analysis and interpretation of data for QC activities.Collection, analysis and interpretation of data for QC activities.• Two major parts of SQC its Two major parts of SQC its Statistical Process Control (SPC)Statistical Process Control (SPC) and and

Acceptance SamplingAcceptance Sampling

CUSTOMERBUSINESS PROCESS

SQC

EVOLUTION OF QUALITYEVOLUTION OF QUALITY

Quality AssuranceQuality Assurance• All those planned or systematic actions necessary to All those planned or systematic actions necessary to

provide adequate confidence that a product or service will provide adequate confidence that a product or service will satisfy given requirements for qualitysatisfy given requirements for quality ( (ISO 8402ISO 8402))

• Need systems and procedures to ensure consistency in Need systems and procedures to ensure consistency in methods for producing productsmethods for producing products

• It is a prevention based approach rather than detectionIt is a prevention based approach rather than detection• ISO standards are part of quality assurance systemISO standards are part of quality assurance system

EVOLUTION OF QUALITYEVOLUTION OF QUALITY

Total Quality Management (TQM)Total Quality Management (TQM)• ““A management philosophy embracing all activities through A management philosophy embracing all activities through

which the needs and expectations of the CUSTOMER and which the needs and expectations of the CUSTOMER and COMMUNITY, and the objective of the organization are COMMUNITY, and the objective of the organization are satisfied in the most efficient and cost effective manner by satisfied in the most efficient and cost effective manner by maximizing the potential of ALL employees in a continuing maximizing the potential of ALL employees in a continuing drive for improvement” (drive for improvement” (Definition of TQM [BS 4778]Definition of TQM [BS 4778]))

• The way of managing organization to achieve excellentThe way of managing organization to achieve excellent

Total – everythingTotal – everything

Quality – degree of excellentQuality – degree of excellent

Management – art, act or way of organizing, controlling, Management – art, act or way of organizing, controlling, planning, directing to achieve certain goalsplanning, directing to achieve certain goals

TQM

QA

QC

I

EVOLUTION OF QUALITYEVOLUTION OF QUALITY• Requires cultural change – Requires cultural change –

prevention not detection, pro-prevention not detection, pro-active versus fire-fighting, life-active versus fire-fighting, life-cycle cost not price, etc.cycle cost not price, etc.

• Many companies will not start Many companies will not start this transformation unless faced this transformation unless faced with disaster/problems or forced with disaster/problems or forced by customersby customers

TQM Six Basic ConceptsTQM Six Basic Concepts1. Leadership1. Leadership2.2. Customer SatisfactionCustomer Satisfaction3. Employee Involvement3. Employee Involvement4. Supplier Partnership4. Supplier Partnership5.5. Continuous Process Continuous Process

ImprovementImprovement6. Performance Measures6. Performance Measures((All these present an excellent wayAll these present an excellent wayto run a businessto run a business))

RESPONSIBILITY FOR QUALITYRESPONSIBILITY FOR QUALITY• Quality not responsibility of any one person or department – Quality not responsibility of any one person or department –

everyone’s job (everyone’s job (operator to CEOoperator to CEO))• Start from marketing – determine customer requirement Start from marketing – determine customer requirement

until product received by satisfied customeruntil product received by satisfied customer• Delegated to areas with authority to make decisionsDelegated to areas with authority to make decisions

Are ResponsibleAre Responsible1. Marketing1. Marketing2. Design Engineering2. Design Engineering3. Procurement (Purchasing)3. Procurement (Purchasing)4. Process Design4. Process Design5. Production5. Production6. Inspection & Test6. Inspection & Test7. Packing & Storage7. Packing & Storage8. Product Service8. Product Service9. Quality Assurance9. Quality Assurance

EFFECT OF TQM EFFECT OF TQM (QUALITY IMPROVEMENT)(QUALITY IMPROVEMENT)

Improve Quality (Product/Service)Improve Quality (Product/Service)

Increase Productivity (Less Rejects, Faster Job)Increase Productivity (Less Rejects, Faster Job)

Lower Costs and Higher ProfitLower Costs and Higher Profit

Business Growth, Competitive, Jobs, InvestmentBusiness Growth, Competitive, Jobs, Investment

QUALITY IMPROVEMENT QUALITY IMPROVEMENT STRATEGYSTRATEGY

• All failures/problems has All failures/problems has ROOT CAUSEROOT CAUSE• Causes are preventableCauses are preventable• Prevention cheaper than curePrevention cheaper than cure

Based on the three concepts, strategy used as follow;Based on the three concepts, strategy used as follow;

1. Reduce failure costs by problem solving1. Reduce failure costs by problem solving

2. Invest in the ‘right’ prevention actions2. Invest in the ‘right’ prevention actions

3. Reduce appraisal costs where appropriate ~ statistically 3. Reduce appraisal costs where appropriate ~ statistically soundsound

4. Continuously evaluate & redirect prevention effort to gain 4. Continuously evaluate & redirect prevention effort to gain further improvementfurther improvement

COMPUTERS AND QUALITY COMPUTERS AND QUALITY CONTROLCONTROL

Need computers and software as tools to assist QualityNeed computers and software as tools to assist Qualityfunctionfunction

• Data collectionData collection• Data analysis and reporting Data analysis and reporting • Statistical analysisStatistical analysis• Process controlProcess control• Test and Inspection (e.g. automated test)Test and Inspection (e.g. automated test)• System designSystem design

Examples commonly statistical packageExamples commonly statistical packageMinitab (engineering based)Minitab (engineering based)SPSS (more for survey questionnaire)SPSS (more for survey questionnaire)

QUALITY COSTQUALITY COST• Final analysis – value of QC/QA/TQM initiative and Final analysis – value of QC/QA/TQM initiative and

program's based on ability to contribute to profitsprogram's based on ability to contribute to profits• Therefore, most effective performance measure is cost of Therefore, most effective performance measure is cost of

poor qualitypoor quality• Efficiency of any business measured in RM, $ (Efficiency of any business measured in RM, $ (monetary monetary

valuevalue))• Cost of poor quality can be found – same as for cost of Cost of poor quality can be found – same as for cost of

maintenance, production, design, inspection, etc.maintenance, production, design, inspection, etc.• Measure, program, analyze and budget the cost of poor Measure, program, analyze and budget the cost of poor

quality (quality (COPQCOPQ) or () or (PONCPONC))• COSTS , PROFITCOSTS , PROFIT• Quality costs involves all department; purchasing, design, Quality costs involves all department; purchasing, design,

etc.etc.

QUALITY COSTQUALITY COSTWhat is Quality Costs ?What is Quality Costs ? Cost of poor quality are “those costsCost of poor quality are “those costsassociated with non-achievement of product/service quality associated with non-achievement of product/service quality defined by the requirements”defined by the requirements”• Quality cost – used in pursuit of quality improvement, Quality cost – used in pursuit of quality improvement,

market share, customer satisfaction, and basic data for market share, customer satisfaction, and basic data for TQMTQM

• High quality cost – inefficient, ineffective managementHigh quality cost – inefficient, ineffective management• Quality Cost Program quantifies magnitude quality problem Quality Cost Program quantifies magnitude quality problem

in mgmt. language ($);in mgmt. language ($);- 20% of sales dollars in manufacturing20% of sales dollars in manufacturing- 35% of sales dollars in service35% of sales dollars in service• Develop Quality Cost ProgramDevelop Quality Cost Program- Identify opportunities for improvementIdentify opportunities for improvement- Justification for corrective actionJustification for corrective action- Every sen saved profitsEvery sen saved profits

Take care of the penny and penny will take care of itself!!!Take care of the penny and penny will take care of itself!!!

QUALITY COSTQUALITY COST• Final analysis – value of QC/QA/TQM initiative and program's Final analysis – value of QC/QA/TQM initiative and program's

based on ability to contribute to profitsbased on ability to contribute to profits• Therefore, most effective performance measure is cost of poor Therefore, most effective performance measure is cost of poor

qualityquality• Efficiency of any business measured in RM, $ (Efficiency of any business measured in RM, $ (monetary valuemonetary value))• Cost of poor quality can be found – same as for cost of Cost of poor quality can be found – same as for cost of

maintenance, production, design, inspection, etc.maintenance, production, design, inspection, etc.• Measure, program, analyze and budget the cost of poor quality Measure, program, analyze and budget the cost of poor quality

((COPQCOPQ) or () or (PONCPONC))• COSTS , PROFITCOSTS , PROFIT• Quality costs involves all department; purchasing, design, etc.Quality costs involves all department; purchasing, design, etc.• Principle advantage – identify hidden costs which is not able to Principle advantage – identify hidden costs which is not able to

detect in operationdetect in operation• Program – comprehensive and not ‘fire-fighting’ problemProgram – comprehensive and not ‘fire-fighting’ problem• Real improvement occurs – Real improvement occurs – ROOT CAUSE OF PROBLEMROOT CAUSE OF PROBLEM

identified and eliminatedidentified and eliminated

QUALITY COSTQUALITY COSTQUALITY COST CATEGORIES & ELEMENTSQUALITY COST CATEGORIES & ELEMENTS• PreventionPrevention- Prevention achieved by examining experience gained from Prevention achieved by examining experience gained from

identification of specific causes of failures, and developing identification of specific causes of failures, and developing specific activities for incorporation into basic management specific activities for incorporation into basic management system that make it difficult or impossible for error/failure to system that make it difficult or impossible for error/failure to occur againoccur again

• AppraisalAppraisal- Cost incurred to determine degree on conformance to quality Cost incurred to determine degree on conformance to quality

requirements (e.g. incoming inspection, source inspection, etc.)requirements (e.g. incoming inspection, source inspection, etc.)• FailuresFailures;; 1) Internal1) Internal 2) External2) External- Cost incurred when products/services, components, materials, Cost incurred when products/services, components, materials,

fail to meet requirements 1) before, 2) after transfer of fail to meet requirements 1) before, 2) after transfer of ownership to customerownership to customer

- Internal ~ purchasing errors, rework, repair, scrap, etc.Internal ~ purchasing errors, rework, repair, scrap, etc.- External ~ complaint investigation, returned good, warranty External ~ complaint investigation, returned good, warranty

costs, etc.costs, etc.

TYPICAL QUALITY COST PROFILETYPICAL QUALITY COST PROFILE

Overall Reduction (both appraisal & failure reduced)

Original QualityCost Profile

After Increase In Prevention Costs

Failure Cost

Appraisal CostPrevention Cost