Quality Management

What is Quality?

Quality Defined...
Quality is the ability of a product or service to meet customer needs.

Quality Defined...(contd.)
However, others believe that definitions of quality fall into several categories , customer defined quality as:
Conformance to specifications - How well a product

or service meets the targets and tolerances determined by its designers. Fitness for use - A definition of quality that evaluates how well the product performs for its intended use

Quality Defined...(contd.)
Value for price paid - Quality defined in terms of

product or service usefulness for the price paid.

Support services - Quality defined in terms of the

support provided after the product or service is purchased.

Psychological criteria - A way of defining quality

that focuses on judgmental evaluations of what constitutes product or service excellence.

Implications of Quality
In addition to being a critical element in operation, quality has other implications. Here are three (3) other reasons why quality is important: Company Reputation An organization can expect its reputation for quality, be it good or bad. Quality will show up in perceptions about the firms new products, employment practices and supplier relation. Product Liability The court increasingly hold organizations that design, produce or distribute faulty products or services liable for damages or injuries resulting from their use.

Implications of Quality
Global Implications In this technological age, quality

is an international as well as operation management concern. For both country and company to compete effectively in the global economy, products must meet global quality, design, and price expectations.

Cost of Quality
Four (4) major categories of costs are associated with quality. They are:
1. Prevention costs cost associated with reducing

the potential for defective parts or services (e.g. Training, quality improvement programs).

2. Appraisal Costs Cost related to evaluating products, processes, parts, and services (e.g. Testing, labs, inspectors).

Cost of Quality
3. Internal Failure Costs cost that result from production of defective parts or services before delivery to customers (e.g. Rework, scrap, downtime)
4. External Failure Costs cost that occur after

delivery of defective parts or services. (e.g. rework, returned goods, liabilities, lost goodwill, costs to society)

Quality Awards and Standards

Malcolm Baldrige National Quality Award

An award given annually to companies that demonstrate quality excellence and establish best-practice standards in industry. The award is named after the former Secretary of Commerce,Malcolm Baldrige, and is intended to reward and stimulate quality initiatives. It is designed to recognize companies that establish and demonstrate high quality standards. The award is given to no more than two companies in each of three categories: manufacturing, service, and small business. Past winners include Motorola Corporation, Xerox, FedEx, 3M, IBM, and the Ritz-Carlton.

Quality Awards and Standards (contd.)

Deming Prize

A Japanese award given to companies to recognize efforts in quality improvement. The award is named after W. Edwards Deming, who visited Japan after World War II upon the request of Japanese industrial leaders and engineers. While there, he gave a series of lectures on quality. The Japanese considered him such an important quality guru that they named the quality award after him. The award has been given by the Union of Japanese Scientists and Engineers (JUSE) since 1951. Competition for the Deming Prize was opened to foreign companies in 1984. In 1989 Florida Power & Light was the first U.S. company to receive the award.

Quality Awards and Standards (contd.)

Increases in international trade during the 1980s

created a need for the development of universal standards of quality. Universal standards were seen as necessary in order for companies to be able to objectively document their quality practices around the world. Then in 1987 the International Organization for Standardization (ISO) published its first set of standards for quality management called ISO 9000.

Quality Awards and Standards (contd.)

ISO 9000

A set of international quality standards and a certification demonstrating that companies have met all the standards specified. ISO 9000:2000Quality Management Systems Fundamentals and Standards: Provides the terminology and definitions used in the standards. It is the starting point for understanding the system of standards.

Quality Awards and Standards (contd.)

ISO 9001:2000Quality Management SystemsRequirements:

This is the standard used for the certification of a firms quality management system. It is used to demonstrate the conformity of quality management systems to meet customer requirements. ISO 9004:2000Quality Management SystemsGuidelines for Performance: Provides guidelines for establishing a quality management system. It focuses not only on meeting customer requirements but also on improving performance. These three standards are the most widely used and apply to the majority of companies. However, ten more published standards and guidelines exist as part of the ISO 9000 family of standards.

Quality Awards and Standards (contd.)

The need for standardization of quality created an impetus for the development of other standards. In 1996 the International Standards Organization introduced:
ISO 14000 - A set of international standards and a

certification focusing on a companys environmental responsibility. These standards focus on three major areas:

Quality Awards and Standards (contd.)

Management systems standards measure systems

development and integration of environmental responsibility into the overall business. Operations standards include the measurement of consumption of natural resources and energy. Environmental systems standards measure emissions, effluents, and other waste systems.

With greater interest in green manufacturing and more awareness of environmental concerns, ISO 14000 may become an important set of standards for promoting environmental responsibility.

Total Quality Management (TQM)

Total Quality Management

Total Quality Management (TQM)

management of an entire organization so that it excels in all aspects of products and services that are important to the customer.

Quality Gurus and their Contributions

Quality Guru Walter A. Shewhart Main Contribution -Contributed to understanding of process variability. Developed concept of statistical control charts. Stressed managements responsibility for quality. Developed 14 Points to guide companies in quality improvement. Defined quality as fitness for use. Developed concept of cost of quality.

W. Edwards Deming

Joseph M. Juran

Quality Gurus and their Contributions

Quality Guru Armand V. Feigenbaum Philip B. Crosby Kaoru Ishikawa Main Contribution . Introduced concept of total quality control. Coined phrase quality is free. Introduced concept of zero defects. Developed cause-and-effect diagrams. Identified concept of internal customer. Focused on product design quality. Developed Taguchi loss function

Genichi Taguchi

Concepts of the TQM Philosophy

Concept Customer focus Main Idea Goal is to identify and meet customer needs.

Continuous improvement
Employee empowerment Use of quality tools Product design Process management

A philosophy of never-ending improvement.

Employees are expected to seek out, identify, and correct quality problems. Ongoing employee training in the use of quality tools. Products need to be designed to meet customer expectations. Quality should be built into the process; sources of quality problems should be identified and corrected. Quality concepts must extend to a companys supplier

Managing supplier quality

PDCA Cycle/Diagram
A PDCA (plan, do, check, act) is a cycle or diagram that describes the activities that need to be performed to incorporate continuous improvement into the operation, it was developed by Walter Shewhart, a pioneer in quality management

PDCA Cycle
Act Implement the plan Plan Identify the improvement & make a plan

4
3
Check Is the plan working

1
2
Do Test the plan

Tools of Total Quality Management (TQM)

Tools of Total Quality Management (TQM)

To empower employees and implement TQM as a

continuing effort, everyone in the organization must be trained in the technique of TQM. There are seven tools that are particularly helpful in the TQM.

1. Cause-and-effect diagram A chart that identifies potential causes of particular quality problems.

2. Flowchart A schematic of the sequence of steps involved in an operation or process.

3. Checklists A list of common defects and the number of observed occurrences of these defects.

4. Control Charts Charts used to evaluate whether a process is operating within set expectations.

5. Scatter diagrams Graphs that show how two variables are related to each other.

6. Pareto Chart A technique used to identify quality problems based on their degree of importance.

7. Histogram A chart that shows the frequency distribution of observed values of a variable.

Score

End of Presentation
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