Operations Management

Lesson 9: Quality Management

Quality Management
• Why worry about quality?
• How should we treat our customers?
• What is new in quality management?
• Beware of anti-quality policies
• What is Total Quality Management?
• What is Six Sigma?
• What is ISO Certification?
• What is Benchmarking?
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Why worry about quality?

• Quality is a silent salesman

• Quality is a peacemaker
• Quality is the most profitable investment
• Quality is the winning global strategy
• Quality is a timeless theme
• Quality is a total ideology to all goals

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Treating the external customers

Is the customer always right?

• Customer demands unreasonable quality,
time, price
• Customer misuses the product
• Customer refuses to pay
• Customer wants everything
• Customer gets mad at you
• Customer wants you to cheat
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Treating the internal Customer

• Your internal customer is always right

• Customer is king
• Do not argue with your customer
• Satisfy, delight and surprise your customer
• Settle conflicts between departments by letting the
department closer to the external customer more right

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What is New in Quality?
Discard the OLD and embrace a NEW mindset

• Quality is conformance to specification

• Quality is satisfying the external customers
• Quality is what the inspector checks
• Quality is doing something right
• To err is human, to forgive is divine
• Pass or fail examination attitude
• Quality costs money

• Doing the right thing right the first time and doing it
better and better –Continuous Improvement 6
Beware of anti-quality policies

• Overemphasize profits and sales only

• Distrust customers and subordinates
• Profile customers
• Hand-offs management procedures
• Over-rely on bosses’ evaluation
• Allow product downgrade and rework
• Separate rework/complaint area
• Choose on lowest bid
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Total Quality Management

 Total Quality Management is a philosophy to

involve everyone in an organization in a
continual effort to improve quality and customer
satisfaction.
 Pioneered by Quality Gurus such as Crosby,
Deming, and Juran

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Elements of TQM

• CEO as champion
• Promote teamwork company-wide
• Employee empowerment
• Train employees in a set of improvement techniques
• Continual improvement
• Competitive benchmarking
• Decisions based on facts
• Involve suppliers in quality improvement
• Quality at the source
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Six Sigma

• Six Sigma is a program to improve quality,

reduce costs, and increase customer satisfaction.
• Pioneered by General Electric and Motorola
• Seek to reduce variability in processes that leads
to defects
• Ultimate goal is a defect rate of 3.4 parts per
million.

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Elements of Six Sigma

• Involve top management to appoint program

champions for leadership
• Select projects that are likely to succeed
• Select and train people to execute the projects
• Steps in each project involve Define the
performance metrics, Measure, Analyze,
Improve and Control.

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ISO Certification
• ISO Certification is a series of standards or best practices
agreed by the International Organization for
Standardization (ISO) and various national organizations
• Adopted by more than 100 countries
• A prerequisite for global trade and business
• A big part of ISO directs you to "document what you do
and do as you documented"
• Increasing emphasize on continual improvement
• Certification by a “qualified” national or international
certifying agency and auditor
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External Benchmarking

• Identify a critical process that needs improvement

• Identify a firm that is the leader in performing the
process
• Contact managers of that company and make personal
visits to learn from its managers and workers
• Analyze the data to improve your own process

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Key Points to Excel in Quality

• Top-down: Top management to visibly lead and support

quality improvement both financially and emotionally
• Bottom-up: Educate and involve all managers and
workers to learn and apply the concepts, tools and
techniques for quality improvement
• Continuous pursuit of quality by all as a company
culture

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