SREENIVASA INSTITUTE OF ENGINEERING AND TECHNOLOGY

TOPIC: ROLE OF QUALITY IN BUSINESS

DEPARTMENT OF MANAGEMENT STUDIES

SUBMITTED BY : Jithu Philip

I MBA

Register no. : 1058088

Roll no. :

ROLE OF QUALITY IN BUSINESS

Quality

If a product fulfils the customer’s expectations, the customer will be pleased and consider

that the product is of acceptable or even high quality. If his or her expectations are not fulfilled,

the customer will consider that the product is of low quality. This means that the quality of a

product may be defined as “its ability to fulfill the customer’s needs and expectations”.

Quality needs to be defined firstly in terms of parameters or characteristics, which vary

from product to product. For example, for a mechanical or electronic product these are

performance, reliability, safety and appearance. For pharmaceutical products, parameters such as

physical and chemical characteristics, medicinal effect, toxicity, taste and shelf life may be

important. For a food product they will include taste, nutritional properties, texture, shelf life and

so on.

Definitions

The common element of the business definitions is that the quality of a product or service

refers to the perception of the degree to which the product or service meets the customer's

expectations. Quality has no specific meaning unless related to a specific function and/or object.

Quality is a perceptual, conditional and somewhat subjective attribute.

The business meanings of quality have developed over time. Various interpretations are given

below:

ISO 9000 : "Degree to which a set of inherent characteristics fulfills requirements." The

standard defines requirement as need or expectation.

Six Sigma : "Number of defects per million opportunities."

Subir Chowdhury : "Quality combines people power and process power."

Philip B. Crosby : "Conformance to requirements.” The requirements may not fully

represent customer expectations; Crosby treats this as a separate problem.

Joseph M. Juran : "Fitness for use." Fitness is defined by the customer.

Noriaki Kano and others, present a two-dimensional model of quality: "must-be quality"

and "attractive quality." The former is near to "fitness for use" and the latter is what the

customer would love, but has not yet thought about. Supporters characterize this model

more succinctly as: "Products and services that meet or exceed customers' expectations."

Robert Pirsig : "The result of care.”

Genichi Taguch i , with two definitions:

a. "Uniformity around a target value." The idea is to lower the standard deviation in

outcomes, and to keep the range of outcomes to a certain number of standard deviations,

with rare exceptions.

b. "The loss a product imposes on society after it is shipped." [9] This definition of quality

is based on a more comprehensive view of the production system.

American Society for Quality : "A subjective term for which each person has his or her

own definition. In technical usage, quality can have two meanings:

a. The characteristics of a product or service that bear on its ability to satisfy stated or

implied needs;

b. A product or service free of deficiencies."[5]

Peter Drucke r : "Quality in a product or service is not what the supplier puts in. It is

what the customer gets out and is willing to pay for."[10]

W. Edwards Deming : concentrating on "the efficient production of the quality that the

market expects,"[11] and he linked quality and management: "Costs go down and

productivity goes up as improvement of quality is accomplished by better management of

design, engineering, testing and by improvement of processes."[12]

Gerald M. Weinberg : "Value to some person".

Without quality no product can’t catch the customers mind. All business firms aim is to

make customer satisfaction through their products, because of it they fix the primary object is

to make quality product as their customer’s wish.

Business

A business (also known as company, enterprise, or firm) is a legally recognized

organization designed to provide goods, services, or both to consumers or tertiary business in

exchange for money.[1] Businesses are predominant in capitalist economies, in which most

businesses are privately owned and typically formed to earn profit that will increase the wealth of

its owners. The owners and operators of private, for-profit businesses have as one of their main

objectives the receipt or generation of a financial return in exchange for work and acceptance of

risk. Businesses can also be formed not-for-profit or be state-owned.

The role of Quality in business

The current Quality drive has brought many areas of expertise together. We see, for

example, operations research, project management, economics, statistics, systems analysis,

various branches of engineering, marketing, general and strategic management, financial

management, and many others coming together to achieve the best output for the organization.

The aim of the drive to improve and sustain Quality is primarily to improve business performance

(through reducing poor quality and related costs) and to develop a conducive corporate culture to

do this.

Modern computer communication gives even the smallest business the means to rapidly

access information and advice through the Internet. For those interested in developing or

improving a quality control program, I recommend "Welcome to Quality Management

Principles" on the Worldwide Web at http://wineasy.se/qmp/. This informative web page is

maintained by Krister Forsberg of Ericsson, the Swedish telecommunications equipment

manufacturer.

Forsberg's brief summary of quality management principles follows:

Principle 1 - Customer-Focused Organization. Organizations depend on their

customers and therefore should understand current and future customer needs,

meet customer requirements, and strive to exceed customer expectations.

Principle 2 - Leadership. Leaders establish unity of purpose, direction, and the

internal environment of an organization. They create that environment in which

people can become fully involved in achieving the organization's

objectives.

Principle 3 - Involvement of People. People at all levels are the essence of an

organization and their full involvement enables their abilities to be used for the

organization's benefit.

Principle 4 - Process Approach. A desired result is achieved more efficiently

when related resources and activities are managed as a process.

Principle 5 - System Approach to Management. Identifying, understanding, and

managing a system of interrelated processes for a given objective contributes to

the effectiveness and efficiency of the organization.

Principle 6 - Continual Improvement. Continual improvement is a permanent

objective of the organization.

Principle 7 - Factual Approach to Decision Making. Effective decisions and

actions are based on the logical and intuitive analysis of data and information.

Principle 8 - Mutually Beneficial Supplier Relationships. Mutually beneficial

relationships between the organization and its supplier enhance the ability of both

organizations to create value.

THE IMPORTANCE OF QUALITY CONTROL

According to Jim Heaphy’s article: Successful businesses inevitably place great emphasis

on managing quality control - carefully planned steps taken to ensure that the products and

services offered to their customers are consistent and reliable and truly meet their customers'

needs. Multinational corporations have entire departments of highly trained specialists to design

and implement their quality assurance programs. For a custom countertop fabricator, as for other

small businesses that make unique, handcrafted products, quality control is also essential. Such

companies cannot rely on a staff of trained experts or the standardization inherent in mass

production to take care of quality control. One or a handful of managers must handle it

themselves, along with every other management function. That is part of being a small business

person. It is all too often true, though, that fabricators fail to institute their own carefully planned

quality control procedures. I would like to suggest a few simple steps that can help a countertop

fabricator or any similar small business improve the quality of its products and services. It is said

that when the Japanese business that later became Sony Corporation was founded, the co-founder

Mr. Ibuka established the company philosophy by stating that "If it were possible to establish

conditions where persons could become united with a firm spirit of teamwork and exercise to

their hearts' desire their technological capacity, then such an organization could bring untold

pleasure and untold benefits." For decades, Japanese businesses have pioneered management

techniques intended to improve quality continuously. American and European companies have

spent years catching up.

He suggested few programs that countertop fabricators can implement, guided by these

principles, to improve quality and customer satisfaction: Call each and every customer a few days

after completion of an installation to ask whether the customer is fully satisfied. Act promptly to

resolve customer concerns. Enclose a brief survey form with the final invoice requesting

information on the customer's opinions and expectations. Listen with great care to every one of

your customer's ideas and suggestions, and thank them for their input. All management personnel,

starting with the owner, must understand and agree that quality management is essential to the

success of the business. Once that agreement has been reached, every employee must be involved

in the process. All too often, employees are reluctant to report quality problems, feeling that they

would be "rocking the boat" or seen as criticizing co-workers to management. Every effort must

be made to convince each employee that jobs and prosperity depend on quality products and

services, and that teamwork and cooperation are essential in ensuring quality.

Every process required to satisfy a customer needs to be analyzed with the goal of improving

customer satisfaction. Profitability will inevitably follow. Functions such as sales, extending

credit, ordering materials, measuring and tem plating, shop fabrication, delivery, installation,

billing and collection can't be seen as separate, unrelated functions. Problems resulting in

customer dissatisfaction or financial losses most often occur when information is being passed

from one such process to another. Special care must be taken to ensure that every process

connects reliably to the adjacent processes.

Most thoughtful analysis should be lavished on any chronic problem areas. For example, if

several customers have recently complained about visible seams, then the whole process of

assembling seams needs to be analyzed in detail, with absolutely nothing taken for granted. An

itemized checklist identifying every conceivable factor that could affect seam quality should be

developed, with actual observations being made every step along the way. This sort of systematic

approach will help develop effective solutions much more quickly and reliably than more

haphazard methods. The attitude that says, "We've always done it that way" is the enemy of

continuous quality improvement. Instead, every employee should be encouraged to think, "There

is no aspect of how we do our jobs that can't be improved in some way. Together, let's figure out

how to do it." Keep accurate records, and more importantly, analyze that data. Again, in this era

of sophisticated $2,000 computers, not even the smallest business has any excuse to avoid

analyzing factual information that can be used to improve the quality of its products and services.

Job costing is the basic function that is still ignored by many fabricators who bid based on what

they think their competitors will bid, rather than on their actual history of costs in completing

similar projects. When you can quickly quote an accurate, competitive price on custom work, you

are providing an important aspect of quality to your customer - and an assurance that you will

remain in business as a profit-making venture able to meet their needs in years to come. Rely on

the training and technical support offered by the manufacturers of your materials and machinery.

Read the technical bulletins and manuals, attend and stay awake during the seminars, view the

videos, and listen carefully to what their sales representatives have to tell you. Your suppliers are

part of the team that enables you to satisfy the needs of your customers.

It seems that I'm describing very basic principles here. I can assure you that the level of

quality analysis used in the product development departments of large high-tech companies is

difficult for a layman to comprehend. In our small business settings, though, much of it simply

seems like common sense. Unfortunately, many well meaning fabricators all too often disregard

these principles. As a result, they produce poor quality work, lose customers, perhaps get sued

and then go out of business. Don't be among them. Be a survivor. Put quality first.

Measuring Quality and performance

To be able to have a tangible effect on improving business performance, Quality strategy

must determine what is being done and then suggest ways of bettering it. This involves different

methods of measuring performance. Some of these methods are:

measurement against internal standards

measurement against customer needs

business performance measurements in financial terms

benchmarking internally and externally to set best standards

Quality measurements that are holistic and seek determining of total performance.

We will now briefly consider each of these methods and outline what they imply.

Internal standards:

The elements that these would typically look at include the direct cost of maintaining quality:

warranty

cost of failure to perform to specifications

costs of setting up and maintaining measures to prevent failure

inspection costs

on time delivery

success of first performance

value added

manpower costs, including cost of not having suitable personnel

inventory levels and turnover

profit from performance.

Customer needs:

The most often used methods of measuring customer satisfaction are to measure

complaints and claims. There is a fundamental problem with this system of measurement

because it is widely reported that only 4% of dissatisfied customers actually take the

trouble to complain (see for example Bergman and Klefsjo 1994, p. 287). However, each

dissatisfied customer will speak to 11 others about his experience, while a satisfied

customer speaks to only three (this in itself is a measure of how we have come to expect

Quality in our daily dealings). The implication of all this is to actually carry out customer

focused studies to get a true picture of customer sentiment.

Business performance:

The basics of measuring business performance are to determine corporate

against set goals. In measuring performance against goals, it is important to take into

account factors like changes in the market, the business performing its functions as

designed, the response to changing market needs, the time taken to respond to such

changes, and the outcomes, measured both in financial and market share terms. Key to

studying business performance is to include the identification and study of any failures to

improve future performance. The measuring function should include input from the

customers, employees, business partners (suppliers, sub-contractors), as well as financial

and non-financial returns.

Benchmarking:

The aim of benchmarking should be to improve performance and enhance

competitive advantage through a process of identifying ways to improve processes. This

can lead to identifying new, or better use of, technology or management techniques. The

most important areas of benchmarking are to identify the right areas to benchmark, the

right organizations/areas, define the questions to which answers are sought, and define

ways of recording, analyzing and implementing the information obtained. For any

benchmarking effort to be successful, the commitment of everyone from senior

management to the front line workers to implement the lessons learnt and improve the

processes is critical. The essential outcome from benchmarking will often be some

desired change to the existing situation. This change can attract resistance from within the

organization. Good communication of the intentions, processes and benefits will help in

adoption of the change.

Quality measurements:

This is probably the most difficult to measure because it is meant to be a measure of

all activities carried out by the organization, including the impact on the community

within which the organization performs. Various Quality philosophies have their own

systems of measurement ranging from the readily quantifiable systems of ISO 9000 to

more holistic and probing systems like TQM, Six Sigma and the Malcolm Bald ridge

award. The differences emerge because of the roots of Quality systems, which are traced

to engineering processes. The further the philosophy has moved to conceptual recognition

of Quality, as discussed in the first half of this chapter, the more probing are the

measurements. Broadly, the measurements reflect the Quality system that is

implemented, the extent and formality of the system in the organization, and the purpose

to which the outcome of the measurement will be put.

Customer prefer to by quality product for their satisfaction. No business can’t success

without producing quality products to their customer because in the market customer is the king,

so if the customer is not satisfied in the no business can’t in their field

The Future of Quality Control

Despite the growing importance of quality control in the United States, there is still room

for improvement in many areas. One of the most important is the attitude towards teams,

especially cross-functional ones. Teams are recognized by quality experts as one of the best ways

to increase speed to market and improve quality. Slowly, as American firms adopt other quality

measures, they are also adopting the team philosophy. Still, improvements must be made. Too

many firms still rely on the old styles of product development and production, handing off

responsibility for a product from one department to the next with no interaction between the

departments.

Another problem to be overcome in the future is downsizing. One of the key business

principles of the 1990s, downsizing means improving technology and work processes so that the

same amount of work can be done with fewer employees. While the move to downsize has

improved the bottom line at many companies, it has also raised quality concerns. Some believe

that there has been a marked reduction in the quality of some products because too many firms

engaged in downsizing without making sure that their internal processes and infrastructure was

adequately equipped to handle the loss of employees.

PRODUCT QUALITY

Product quality should have precise limits of acceptability so that the production team

can manufacture the product strictly according to specification and drawings. To achieve the

above, those responsible for design, production and quality should be consulted from the sales

negotiation stage onwards. The overall design of any product is made up of many individual

characteristics.

For example these may be:

Dimensions, such as length, diameter, thickness or area;

Physical properties, such as weight, volume or strength;

Electrical properties, such as resistance, voltage or current;

Appearance, such as finish, colour or texture;

Functional qualities, such as output or kilometer per liter;

Effects on service, such as taste, feel or noise level. Manufacturing drawings and

specifications are prepared by the designers and these should indicate to the production team

precisely what quality is required and what raw materials should be used.

Fixing product specifications

A specification is the minimum requirement according to which a producer or service

provider makes and delivers the product and service to the customer. In setting specification

limits, the following should be considered: The user’s and/or customer’s needs. Requirements

relating to product safety and health hazards provided for in the statutory and regulatory

requirements. Requirements provided for in national and/or international standards. The

competitor’s product specifications, in order to gain marketing advantages In designing the

product, the capacity of processes and machines should be kept in mind. It is also necessary to

maintain a balance between cost and value realization. The clearer the specification, the better the

possibility of creating and delivering quality products.

Preparing product design

The specifications and drawings produced by the designer should show the quality

standard demanded by the customer or marketplace in clear and precise terms. Every dimension

should have realistic tolerances and other performance requirements

Correction of quality deficiencies

In spite of all the efforts made, the required quality will sometimes not be attained and

one may be faced with a pile of scrap and rework. This means that something has gone wrong

during the quality planning and maybe also during the manufacturing process. The reason for the

trouble must be located and permanently corrected so that it cannot happen again.

The following are obvious possibilities:

The shop-floor operators had no clear idea what standard of quality was required;

The method was such that it was very difficult to get the job right, but very easy to get it

wrong;

The machine and equipment were incapable of achieving the tolerances required;

The incoming materials and components were unsatisfactory;

The operators were untrained and not up to the job;

Shop-floor quality control was either not properly planned or not properly executed,

or both.

Preparation for manufacture

After the design, including the manufacturing drawings, has been reviewed and finalized,

it is time to plan for manufacture. This will include the following steps:

(a) Deciding on the method of manufacture.

Methods must be devised that permit the operators and processes to make the product in the

quickest, easiest and most foolproof way, including preparation of manufacturing instructions,

setting up procedures, listing various operations and so on;

(b) Providing the necessary machines, plant, tooling and other equipment.

Everything that is required for manufacture must be selected, taking care that all the elements

are capable of achieving the standard of quality demanded;

(c) Obtaining satisfactory raw materials.

No one can make a good product from unsatisfactory raw materials, so every material must have

a precise written buying specification so that the purchasing department can buy exactly what is

required. Often purchasers are expected to buy from suppliers who have been assessed and

approved by them and when supplies arrive the goods should be checked before acceptance into

stores. Quality requirements and manufacturing processes should be discussed with the suppliers,

as well as the inspection activities to be carried out by the purchaser on the goods on arrival;

(d) Obtaining and training suitable operators

. Operators who are willing and able to do the work in a satisfactory manner must be chosen and

given whatever training they need;

(e) Planning inspection and shop floor quality control.

Plans for inspection activities should be prepared, proper workplaces provided for inspection

staff, written inspection procedures prepared, inspection equipment provided, checking and

calibration of inspection equipment planned for, inspection personnel selected and trained and

prep lot and pilot runs carried out. One should never attempt to solve a quality problem by

carrying out more inspections.

Manufacture

Once the design and planning for manufacture have been completed, the manufacturing

can begin. If the planning has been well done, there should not be too many problems. During

manufacture the following are the most common factors that can

affect quality:

(a) Set-up.

Some processes, such as punching, cutting, printing and labeling, are so consistent that, if

the initial set-up is correct, the whole lot will conform to the specifications. However, the initial

set-up has to be checked by carrying out first-piece inspection;

(b) Machines and tools.

From time to time changes can occur in machine or tool settings, which can then lead to

defects. Processes of this type include machining, resistance welding and filling. Here it is

necessary to carry out periodic checks by patrol inspection;

(c) Operator.

There are some processes where the result depends on the skill and attention of the

operator, such as welding, hand soldering and painting processes. For such processes it is

necessary at the Manufacture planning stage for the operator’s working methods to be decided

upon;

(d) Materials and components.

It is important to ensure the quality of raw materials and components by undertaking

regular checks on the suppliers’ processes and also where necessary by carrying out incoming

inspection.

Coordination

It is obvious from the above steps that everybody in the company, that is, the salesmen,

designers, purchasing, stores and methods staff, plant engineers, jigs and tool personnel,

production planning and production staff, operators, inspection and testing staff, packaging,

dispatch and so on, are responsible for product quality. Indeed, quality is everybody’s business.

Unfortunately, if care is not taken, it ends up being nobody’s business. It is therefore important to

ensure that everyone is quality-conscious and that they all work together on matters related to

quality

The ISO 9000 series

This is a series of standards that addresses organizational structures, management

procedures and work processes such that the customer is assured that certain standards of quality

are being met through documentation of policies and procedures. Nowhere does the standard

indicate achieving a quality higher than necessary.

The following table, taken from the ISO website, explains the numbering and context of

each of the component standards in the ISO 9000 family.

The ISO series are:

Standards and guidelines Purpose

ISO 9000:2000, Quality management

systems - Fundamentals and vocabulary

Establishes a starting point for understanding the

standards and defines the fundamental terms and

definitions used in the ISO 9000 family which you need

to avoid misunderstandings in their use.

ISO 9001:2000, Quality management

systems - Requirements

This is the requirement standard you use to assess your

ability to meet customer and applicable regulatory

requirements and thereby address customer satisfaction.

It is now the only standard in the ISO 9000 family against

which third-party certification can be carried.

ISO 9004:2000, Quality management

systems - Guidelines for performance

improvements

This guideline standard provides guidance for continual

improvement of your quality management system to

benefit all parties through sustained customer

satisfaction.

ISO 19011, Guidelines on Quality and/or

Environmental Management Systems

Auditing (currently under development)

Provides you with guidelines for verifying the system's

ability to achieve defined quality objectives. You can use

this standard internally or for auditing your suppliers.

ISO 10005:1995, Quality management –

Guidelines for quality plans

Provides guidelines to assist in the preparation, review,

acceptance and revision of quality plans.

ISO 10006:1997, Quality management - Guidelines to help you ensure the quality of both the

Guidelines to quality in project mgt project processes and the project products.

ISO 10007:1995, Quality management -

Guidelines for configuration management

Gives you guidelines to ensure that a complex product

continues to function when components are changed

individually.

ISO/DIS 10012, Quality assurance

requirements for measuring equipment -

Part 1: Metrological confirmation system

for measuring equipment

Give you guidelines on the main features of a calibration

system to ensure that measurements are made with the

intended accuracy.

ISO 10012-2:1997, Quality assurance for

measuring equipment - Part 2: Guidelines

for control of measurement of processes

Provides supplementary guidance on the application of

statistical process control when this is appropriate for

achieving the objectives of Part 1.

ISO 10013:1995, Guidelines for developing

quality manuals

Provides guidelines for the development, and

maintenance of quality manuals, tailored to your specific

needs.

ISO/TR 10014:1998, Guidelines for

managing the economics of quality

Provides guidance on how to achieve economic benefits

from the application of quality management.

ISO 10015:1999, Quality management -

Guidelines for training

Provides guidance on the development, implementation,

maintenance and improvement of strategies and systems

for training that affects the quality of products.

ISO/TS 16949:1999, Quality systems -

Automotive suppliers - Particular

requirements for the application of ISO

9001:1994

Sector specific guidance to the application of ISO 9001 in

the automotive industry.

Source

The ISO 9000 is based upon eight principles of management, which are expected

to guide organizations towards improved performance. It is important to note that the first

principle is customer focus. In the other principles, we see a focus on processes and

people.

Conclusion

Only a business can success through their customer satisfaction. Customer satisfy only in

quality product because of it the first aim of every business concern is to make quality product as

per their customers wish.

Reference:

http://en.wikipedia.org/wiki/Quality_(business)

http://wineasy.se/qmp/

http://www.iso.ch/iso/en/iso900014000/iso9000/selectionuse/iso9000family.html