5/4/2023

MGT1116E QUALITY MANAGEMENT

U N I V E R S I T Y O F E C O N O M I C S & F I N AN C E

UNIVERSITY OF ECONOMICS & FINANCE

QUALITY MANAGEMENT

Lecturer: Phạm Quốc Luyến, PhD.M, PhD.EdM., DBA.

Phone: 091 931 6865 093 899 6865

Email: pqluyen@gmail.com
FB: Colin Phạm

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UNIVERSITY OF ECONOMICS & FINANCE

QUALITY MANAGEMENT

Course ID: MGT1116E

Course tittle: Quality Management
Credits: 3
Pre-requisite: None

Materials

Main:
Oakland S.J. (2014). Total Quality Management and Operational
Excellence Text with Cases, 4th Edition. London: Routledge.
eBook ISBN 9781315815725
Other:
Goetsch, D.L., & Davis, S.B. (2016). Quality Management for organizational
excellence - Introduction to Total Quality, 8th Edition. NJ: Pearson Education.
ISBN 10: 0-13-379185-8; ISBN 13: 978-0-13-379185-3
Arnold J.R.T, Chapman S.M., & Clive L.M. (2012). Introduction to Materials
Management, 7th Edition, Prentice Hall.

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Content

Lecture 1. Introduction to Quality Concepts (Chapter 1)

Lecture 2. Total Quality Management (chapter 2)
Lecture 3. Leadership and Commitment (Chapter 3)
Lecture 4. Policy, Strategy and Goal Deployment (Chapter 4)
Lecture 5. Quality Assessment (Chapter 7+9)
Lecture 6. Continuous Improvement (Chapter 13+15)

Requirements

Before going to class, students must read corresponding

chapters in the textbook at home.
Complete individual/group exercises and assignments.
Participate in group activities to solve problems, write reports
and deliver presentations on each topic (if any).

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Group activities

Each group consists of 5-7 students, led by a group leader

(maximum 6 groups).
Members must follow the direction/lead of the leader. If the
leader notices that any member of the group is not
contributing, the lecturer must be informed so that it can be
resolved in the following week.
Each member in the group will evaluate the other members’
participation in group activities (a form will be provided) at
the end of the term.

Course Evaluation

Participation 10%
Class activities, Group assignment/presentation (class 20%
sessions: 5 - 11)
Midterm test – Case study presentation (class session 13 20%
or 15)
Final course examination 50%

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Group Assignments
Class
Topic Group
session
5 William Edwards Deming and his philosophy of quality management 1
6 Joseph Moses Juran and his philosophy of quality management 2
7 Philip Bayard Crosby and his philosophy of quality management 3
8 The TQM Model 4
9 The Malcolm Baldrige National Quality Award (MBNQA) 5
10 The European Foundation for Quality Management (EFQM) model 6
11 ISO quality management standards 7
(res.)

Total Quality Management and

Operational Excellence
Today there is a plethora of performance improvement frameworks
including Baldrige, EFQM (European Foundation for Quality
Management), Lean, Six Sigma and ISO 9001,
John Oakland’s famous TQM model, in many ways a precursor to
above frameworks, has evolved to become the ultimate holistic
overview of performance improvement strategy.
Oakland’s famous TQM model redefines Quality by:
1. accelerating change
2. reducing cost
3. protecting reputation.

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Cases
Case 1 TQM objectives management process in Nissan
Case 2 Sustainable business improvement in a global corporation – Shell
Services
Case 3 Lloyd’s Register improvement program – group business
Case 4 TQM implementation and policy deployment at STMicroelectronics
Case 5 Business process management within TNT Express
Case 6 Process management and improvement at the heart of Fujitsu UK &
Ireland BMS
Case 7 Simplifying business processes to secure competitive advantage for Car
Care Plan (not use)
Case 8 Building quality and operational excellence across ABB
Case 9 The EADS (Airbus Group) Lean Six Sigma approach to performance
improvement
Case 10 Establishing a capability for continuous quality improvement in the NHS

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Part One
The Foundations of TQM
CHAPTER 1. UNDERSTANDING QUALITY

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Chapter Outline

1.1 Quality, competitiveness and customers

1.2 Understanding and building the quality chains
1.3 Managing Quality
1.4 Quality Starts with Understanding the Needs
1.5 Quality in all functions

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1.1 Quality, competitiveness and customers

Reputation
for quality, reliability, price, and delivery – all things we compete on
Lessons to be learned about reputation from this story:
1. Competitive elements of quality, reliability, delivery, and price
(Reputation is built upon the competitive elements of
being ‘On-Quality; On-Time; On-Cost’).
2. It takes a long time to change the poor reputation for quality.
3. Reputations, good or bad, can quickly become national
reputations
4. The management of the competitive weapons can be learned
and used to turn round a poor reputation.

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1.1 Quality, competitiveness and customers

What is quality?
▪ Dictionary has many definitions: “Essential characteristic,”
“Superior,” etc.
▪ Some definitions that are accepted in various organizations:
▪ “Quality is customer satisfaction,”
▪ Quality is excellence that is better than a minimum standard. It is
conformance to standards and ‘fitness of purpose’
▪ ISO 9000:2000 definition of quality - It is the degree to which a set of
inherent characteristics fulfills requirements (meeting the customer
requirements).
▪ Quality is ‘fitness for use’ of the product – Joseph Juran.

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Quality - Definitions

What is reliability?
▪ “It is the ability of product and service to continue to meet the
customer requirements”
▪ Quality is meeting the customer requirements, and this is not
restricted to the functional characteristics of the product or
services.

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Quality and customer

expectations

Quality is also defined as excellence in the product or service

that fulfills or exceeds the expectations of the customer.
There are 9 dimensions of quality that may be found in
products that produce customer-satisfaction.
Though quality is an abstract perception, it has a quantitative
measure:
𝑃
𝑄=
𝐸
where Q = quality, P = performance (as measured by the
Mfgr.), and E = expectations (of the customer).

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The 9 Dimensions of Quality

▪ Performance
▪ Features
▪ Conformance Performance
-----------------------------
▪ Reliability
▪ Durability
▪ Service
-----------------------------
▪ Response - of Dealer/ Mfgr. Cost
to Customer
▪ Aesthetics – of product
Service Features
▪ Reputation- of Mfgr./Dealer

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Quality

Quality is not fine-tuning your product at the final stage of

manufacturing, before packaging and shipping.
Quality is in-built into the product at every stage from
conceiving – specification & design stages to prototyping –
testing and manufacturing stages.
TQM philosophy and guiding principles continuously
improve the Organization processes and result in customer
satisfaction.

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Concepts
How is customer satisfaction achieved?
Two dimensions: Product features and Freedom from deficiencies.
▪ Product features – Refers to quality of design.
Examples in manufacturing industry: Performance, Reliability, Durability,
Ease of use, Esthetics etc.
Examples in service industry: Accuracy, Timeliness, Friendliness and
courtesy, Knowledge of server etc.
▪ Freedom from deficiencies – Refers to quality of conformance.
Higher conformance means fewer complaints and increased customer
satisfaction. (This is related to free from defects.)

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Why Quality?
Reasons for quality becoming a cardinal priority for most
organizations:
▪ Competition – Today’s market demand high quality products at
low cost. Having ‘high quality’ reputation is not enough! Internal
cost of maintaining the reputation should be less.
▪ Changing customer – The new customer is not only commanding
priority based on volume but is more demanding about the
“quality system.”
▪ Changing product mix – The shift from low volume, high price
to high volume, low price have resulted in a need to reduce the
internal cost of poor quality.

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Why Quality?
▪ Product complexity – As systems have become more complex,
the reliability requirements for suppliers of components have
become more stringent.
▪ Higher levels of customer satisfaction – Higher customers
expectations are getting spawned by increasing competition.

Relatively simpler approaches to quality viz. product inspection for

quality control and incorporation of internal cost of poor quality into
the selling price, might not work for today’s complex market
environment.

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1.1 Quality, competitiveness and customers

Research shows that focus on customer loyalty can provide

several commercial advantages:
▪ Customers cost less to retain than acquire.
▪ The longer the relationship with the customer, the higher the
profitability.
▪ A loyal customer will commit more spend to its chosen supplier.
▪ About half of new customers come through referrals from existing
clients (indirectly reducing acquisition costs).

Many companies use measures of customer loyalty to

identify customers which are ‘completely satisfied’, would
‘definitely recommend’ and would ‘definitely repurchase’

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Quality perspectives
Everyone defines Quality based on their own perspective of it.
Typical responses about the definition of quality would
include:
1. Perfection
2. Consistency
3. Eliminating waste
4. Speed of delivery
5. Compliance with policies and procedures
6. Doing it right the first time
7. Delighting or pleasing customers
8. Total customer satisfaction and service

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Quality levels
At organizational level, we need to ask following questions:
▪ Which products and services meet your expectations?
▪ Which products and services you need that you are not currently
receiving?

At process level, we need to ask:

▪ What products and services are most important to the external
customer?
▪ What processes produce those products and services?
▪ What are the key inputs to those processes?
▪ Which processes have most significant effects on the organization’s
performance standards?

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Additional Views of Quality in Services

Technical Quality versus Functional Quality

▪ Technical quality—the core element of the good or service.
▪ Functional quality—customer perception of how the good
functions or the service is delivered.
Expectations and Perceptions
▪ Customers’ prior expectations (generalized and specific service
experiences) and their perception of service performance affect
their satisfaction with a service.

Satisfaction = (Perception of Performance) – (Expectation)

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1.2 Understanding and building the quality

chains
Meeting the customer requirements within the organization.
Failure (QC manager and others)
Failure➔ not doing it right the first time at every stage of the
process.
Throughout and beyond all organizations -manufacturing &
service- there is a series of quality chains of customer and supplier.
Quality chains may be broken at any point, customer ➔ not
satisfied.

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1.2 Understanding and building the quality

chains
The concept of internal and external customers/suppliers forms the
core of total quality.
Quality has to be managed – it will not just happen.
Failure to meet the requirements in any part of quality chain leads
to yet more failure.
The price of quality is the continual examination of the
requirements and our ability to meet them ➔ “continuing
improvement” philosophy.

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1.2 Understanding and building the quality

chains

Figure 1.1 - The

quality chains

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1.2 Understanding and building the quality

chains
Meeting the requirements
▪ the first item on the list of things to do is find out what
requirements are.
▪ If we are dealing with a customer/supplier relationship, the
supplier must understand not only the needs of the customer but
also the ability of his own organization to meet them.
▪ Internal supplier/customer relationships are often the most
difficult to manage in terms of establishing the requirements.

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1.2 Understanding and building the quality

chains
▪ To achieve quality throughout an organization, each person in the
quality chain must interrogate every interface as follows:
Customers:
▪ who are my immediate customers?
▪ what are their true requirements?
▪ How do or can I find out what the requirements are?
▪ How can I measure my ability to meet the requirements?
▪ Do I have the necessary capability to meet the requirements? (If not, then
what must change to improve the capability?)
▪ Do I continually meet the requirements? (If not, then what prevents this
from happening, when the capability exists?)
▪ How do I monitor changes in the requirements?

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1.2 Understanding and building the quality

chains
▪ To achieve quality throughout an organization, each person in the
quality chain must interrogate every interface as follows:
Suppliers:
▪ who are my immediate suppliers?
▪ what are my true requirements?
▪ How do I communicate my requirements?
▪ How do I, or they, measure their ability to meet the requirements?
▪ Do my suppliers have the capability to meet the requirements?
▪ Do my suppliers continually meet the requirements?
▪ How do I inform them of changes in the requirements?

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1.2 Understanding and building the quality

chains
To understand how quality may be built into a product or service,
at any stage, it is necessary to examine the two distinct, but
interrelated aspects of quality:
1. Quality of design
2. Quality of conformance to design

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1.2 Understanding and building the quality

chains
Quality of design
▪ TV chair example
▪ Quality of design is a measure of how well the product or service is
designed to achieve the agreed requirements.
▪ The most important feature of the design, with regard to achieving
quality, is the specification.
▪ Specifications must also exist at the internal supplier/customer
interfaces.
▪ There must be an agreement that the operating departments can
achieve that requirement.

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Figure 1.2 - Quality of design

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1.2 Understanding and building the quality

chains
Quality of conformance to
design
▪ What the customer actually
receives should conform to the
design.
▪ The conformance check makes
sure that things go according to
plan.
▪ Organizations may use the
simple matrix to assess how
much time spent doing the right
things right.

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1.3 Managing processes

Have we done the job correctly?

▪ This is not quality control, it is detection.
▪ This process –detection- happens at the end of the processes.

Are we capable of doing the job correctly?

▪ We should realize that an answer will only be obtained by means
of satisfactory methods, materials, equipment, skills and
instruction, and a satisfactory ‘process’.

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1.3 Managing processes

What is a process?
▪ A process is the transformation of a set of inputs, which can
include actions, methods and operations, into outputs that satisfy
customer needs and expectations, in the form of products,
information, services or –generally- results.
▪ To produce an output meets the requirements, it is necessary to
define, monitor and control the inputs to the process.
▪ Every single task throughout an organization must be viewed as a
process.

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1.3 Managing processes

Figure 1.4 - A process – SIPOC

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1.3 Managing processes

If our process is capable of meeting the requirements, “Do we

continue to do the job correctly?”, this needs to monitor and
control the process.

Have we done Are we capable of Do we continue

the job correctly? doing the job correctly? to do the job correctly?

Detection Prevention

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1.3 Managing processes

Quality control
▪ The activities and techniques employed to achieve and maintain the
quality of a product, process, or service.
▪ It is concerned with finding and eliminating causes of quality problem.

Quality assurance
▪ The prevention of quality problems through planned and systematic
activities (including documentation).

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1.4 QUALITY STARTS WITH UNDERSTANDING

THE NEEDS (Quality starts with ‘Marketing’)

Marketing is responsible for determining the key characteristics

that determine the suitability of the product or service in the eyes of
the customer.
Excellent communication between customers and suppliers is the
key to total quality.
Requirements must be communicated properly throughout the
organization in the form of specifications which can be used as the
basis for the design .

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1.4 QUALITY STARTS WITH UNDERSTANDING

THE NEEDS (Quality starts with ‘Marketing’)

The information requirements include:

1.Characteristics of performance & reliability
2.Aesthetic characteristics
3.Any obligatory regulations or standards governing the nature of the
product or service
Marketing must also establish systems for feedback of customer
information and reaction, and these systems should be designed
on a continuous monitoring.

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1.4 QUALITY STARTS WITH UNDERSTANDING

THE NEEDS (Quality starts with ‘Marketing’)

In reviewing of market readiness of a new product or service.

Items that require some attention include assessment of:
1. The suitability of the distribution & customer-service system
2. training of personnel in the field
3. Availability of spare parts or staff support
4. Evidence that the organization is capable of meeting customer
requirements

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1.5 Quality in all functions

For an organization to be truly effective, each part of it must work

properly together.
Errors have a way of multiplying.
Business employs so many different specialist skills that everyone
has to rely on the activities of others in doing their jobs.
The commitment of all members of an organization is a
requirement of ‘company-wide quality improvement’.

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CHAPTER HIGHLIGHTS

Quality, competitiveness and customers

▪ The reputation enjoyed by an organization is built by quality,
reliability, delivery and price. Quality is perhaps the most important of
these competitive weapons.
▪ Reputations for poor quality last for a long time, and good or bad
reputations can become national or international. The management of
quality can be learned and used to improve reputation.
▪ Quality is meeting the customer requirements, and this is not restricted
to the functional characteristics of the product or service.
▪ Reliability is the ability of the product or service to continue to meet
the customer requirements over time.
▪ Organizations ‘delight’ the customer by consistently meeting customer
requirements, and then achieve a reputation of ‘excellence’ and
customer loyalty.

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CHAPTER HIGHLIGHTS

Understanding and building the quality chains

▪ Throughout all organizations there are a series of internal
suppliers and customers. These form the so-called ‘quality
chains’, the core of ‘company-wide quality improvement’.
▪ The internal customer/supplier relationships must be managed by
interrogation, i.e. using a set of questions at every interface.
Measurement of capability is vital.
▪ There are two distinct but interrelated aspects of quality, design
and conformance to design. Quality of design is a measure of
how well the product or service is designed to achieve the agreed
requirements. Quality of conformance to design is the extent to
which the product or service achieves the design. Organizations
should assess how much time they spend doing the right things
right.

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CHAPTER HIGHLIGHTS
Managing quality
▪ Asking the question ‘Have we done the job correctly?’ should be
replaced by asking ‘Are we capable of doing the job correctly?’ and
‘Do we continue to do the job correctly?’
▪ Asking the questions in the right order replaces a strategy of detection
with one of prevention.
▪ Everything we do is a process, which is the transformation of a set of
inputs into the desired outputs.
▪ In every organization there are some core business processes that must
be performed especially well if the mission and objectives are to be
achieved. They are defined by SIPOC – suppliers-inputs-process-
outputs-customers.
▪ Inspection is not quality control. The latter is the employment of
activities and techniques to achieve and maintain the quality of a
product, process or service.
▪ Quality assurance is the prevention of quality problems through
planned and systematic activities.

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CHAPTER HIGHLIGHTS

Quality starts with understanding the needs

▪ Marketing processes establish the true requirements for the
product or service. These must be communicated properly
throughout the organization in the form of specifications.
▪ Excellent communications between customers and suppliers is
the key to a total quality performance – the organization must
establish feedback systems, such as CRM, to gather customer
information.
▪ Appropriate research techniques should be used to understand
the ‘market’ and keep close to customers and maintain the
external perspective.

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CHAPTER HIGHLIGHTS

Quality in all functions

▪ All members of an organization need to work together on
organization-wide quality improvement. The co-operation of
everyone at every interface is necessary to achieve improvements
in performance, which can only happen if the top management is
really committed.

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