QUALITY MANAGEMENT

OBJECTIVES

Understand dimensions of design quality, process quality and

service quality.
Describe the quality gurus that contributed to the modern field
of quality.
Discuss the costs of quality.
Understand and Differentiate between TQM, ISO9001 and Six
Sigma.
• Describe the tools used in quality improvement projects.
 OBJECTIVES

Understand and Differentiate between TQM, ISO9001

and Six Sigma.
• Describe the tools used in quality improvement
projects.
• In 1980 quality was not the main priority in north
America manufacturer. Compaired to Japan,
North American manufacturer slowly have fallen
behindand customer preferred Japanese product
due to its superior level of quality Especially in
automotive markets
 2 PRIMARY FACTORS

Quality of any product is determined by

these two
• Design quality
• Process quality
 DESIGN QUALITY

• Refers to the actual characteristics of the product

• Example
• Think about the design of your favourite cell
phone. The decisions made by Marketing as well
as the Design team will determine the way your
phone will operate, the quality of the sound, the
features it has, not to mention the way it looks
and feels.
 PROCESS QUALITY

• Refers to the ability of the organization to produce

the good or service having perfect quality at each
stage of the process, or in other words,
manufacturing defect-free products.
 SERVICE QUALITY

• Each customer has a certain

performance level in mind from which to
compare or evaluate a service.
• Things to consider in measuring service
quality
 GURUS OF QUALITY

INDIDUALS WHO SPENT THEIR CAREERS RESEARCHING,

TEACHING AND DEVELOPING THE FIELD OF QUALITY.

• Walter Shewhart Philip Crosby

• Edwards Deming • Armand Fiegenbaum
• Joseph Juran
 WALTER SHEWHART
(1891-1967)

• Dr. Shewhart was an American physicist, engineer and

statistician. He is known as the father of statistical quality
control and spent much of his career researching
variation and is credited with the creation of the first
control chart. His work focused around the need to reduce
variation in order to improve quality. He is responsible for
the concepts of assignable and common variation.
 ASSIGNABLE VARIATION

• The type of variation where the cause can be

clearly identified and corrected or managed.
• Example
• an error made by an employee, a software glitch,
or a tool breakage.
 EDWARDS DEMING
(1900-1993)

• An American engineer, statistician, professor and

author. Dr. Deming was recruited to Japan after
WWII to assist with their national census. Beginning
in 1950 Deming trained thousands of Japanese
engineers, managers, and scholars in basic
statistical process control.
• He is credited with guiding the rise of Japanese
superior quality. In appreciation for Deming’s
guidance the Japanese named their highest
quality award after Dr. Deming (The Deming
Prize).
• Dr. Deming has an extensive list of published
works but is likely most well known for Deming’s
14 points and the Deming Cycle.
 EDWARDS DEMING’S “14 POINTS:”

1. Create constancy of purpose toward improvement

of product and service, with the aim to become
competitive, to stay in business and to provide jobs.
2. Adopt the new philosophy. We are in a new
economic age. Western management must awaken to
the challenge, must learn their responsibilities, and
take on leadership for change.
3. Cease dependence on inspection to achieve
quality. Eliminate the need for massive inspection by
building quality into the product in the first place.
4. End the practice of awarding business on the basis
of a price tag. Instead, minimize total cost. Move
towards a single supplier for any one item, on a long-
term relationship of loyalty and trust.
5. Improve constantly and forever the system of
production and service, to improve quality and
productivity, and thus constantly decrease costs.
6. Institute training on the job.
7. Institute leadership The aim of supervision should be to
help people and machines and gadgets do a better job.
Supervision of management is in need of overhaul, as well
as supervision of production workers.
8. Drive out fear, so that everyone may work effectively
for the company.
9. Break down barriers between departments. People in
research, design, sales, and production must work as a
team, to foresee problems of production and usage that
may be encountered with the product or service.
10. Eliminate slogans, exhortations, and targets for the
work force asking for zero defects and new levels of
productivity. Such exhortations only create adversarial
relationships, as the bulk of the causes of low quality and
low productivity belong to the system and thus lie
beyond the power of the work force.
Eliminate work standards (quotas) on the factory floor.
Substitute with leadership.
1.Eliminate management by objective. Eliminate
management by numbers and numerical goals.
Instead substitute with leadership.
11. Remove barriers that rob the hourly worker of his
right to pride of workmanship. The responsibility of
supervisors must be changed from sheer numbers to
quality.
12. Remove barriers that rob people in management
and in engineering of their right to pride of
workmanship.
13. Institute a vigorous program of education and self-
improvement.
14. Put everybody in the company to work to
accomplish the transformation. The transformation is
everybody’s job.
 DEMING
CYCLE OR
DEMING
WHEEL

Also know as PDCA

“PLAN, DO, CHECK,
ACT”
 JOSEPH JURAN
(1904-2008)

• Juran was a Romanian-born American engineer.

• He is best known for the Quality Control Handbook,
which was first published in 1951.
• He emphasized the importance of three specific
factors which came to be known as the quality
trilogy: quality planning, quality control and quality
improvement.
• He authored hundreds of papers and 12 books.
• He is responsible for creating the concept known
today the cost of quality. The Juran Institute in the
U.S. is a leader in training and research in quality.
• Joseph Juran also came upon the work of Vilfredo
Pareto (1848-1923) and made the Pareto Principle,
also known as the 80/20 rule, well known today as
a tool for problem solving and continuous
improvement.
• Pareto was an Italian economist and sociologist
who noticed that 80% of the land in Italy was
owned by about 20% of the population.
• This Pareto principle is alive and well today in
the field of quality and continuous improvement.
It is generally accepted that 80% of defects can
be traced to a small number (20%) of the
causes. Firms need to ensure that they are
concentrating on fixing the correct or “root”
causes.
• Other examples of the 80/20 rule
• 80% of a company’s profits are generated by
20% of the products or services sold
• 80% of the continuous improvement ideas are
generated by 20% of the employees
 PHILIP CROSBY
(1926-2001)

• Crosby was an American businessman and author.

He published Quality is Free in 1979. He believed
that the costs of quality are often understated. He
coined the phrase zero defects and felt that there
was no reason for any errors. He taught that it is less
expensive to do it right the first time rather than to
pay for extra inspection, scrap, rework and repairs.
 ARMAND FIEGENBAUM
(1920-2014)

• .Dr.Feigenbaum was an American quality engineer and

businessman. He was the Director of Manufacturing
Operations at General Electric from 1958-1968. He devised
the concept of total quality control, which later became
total quality management (TQM). He is also known for his
concept of a “hidden plant.” He felt that a large portion of
a plant’s capacity is wasted due to the large amount of
failures and defects.
 COST OF QUALITY

• This variation can be broken down into four

categories which are the prevention costs, appraisal
costs, and failure costs, which are further classified
as internal failure costs and external failure costs.
 PREVENTION COST

• Prevention costs include all the funds spent to prevent

the occurrence of defects.
Example
• Quality improvement initiatives, employee
training, upgrading of equipment, implementing
quality procedures and making proactive design
changes.
 APPRAISAL COSTS

• All money spent in checking and testing of product

during the production process would be considered
Appraisal costs. Wages of inspectors when defined
as part of the process, testing labs and equipment,
gauging, and process control, would be included in
this category.
 INTERNAL FAILURE COSTS

• Once a defect has been produced, with any luck

the organization will detect the error before it
leaves the building and is sent to the customer.
Often, defective products can be repaired, but all of
the extra time spent on the rework is considered
internal failure costs. Product that is unable to be
repaired is classified as scrap that is also
considered as internal Failure costs.
• This can cause many other problems because
customers still expect on-time deliveries. Often
other orders may have to be remanufactured and
expedited in order to compensate for products
that are scrap. The customer is often not aware of
these issues.
 EXTERNAL FAILURE COSTS

• Once a defective product has been shipped to the

customer, the costs then become external failure costs.
Replacement product, expedited shipping, potential law
suits, product recalls, and of course loss of future business
are all external failure costs. It is impossible to predict the
actual external failure costs since there is no way of
gauging the impact of dissatisfied customers on future
business.
 QUALITY SYSTEMS

• Three common quality systems that many

organizations use in order to manage their quality
are total quality management (TQM), ISO9001, and
Six Sigma.
 TOTAL QUALITY MANAGEMENT
(TQM)

• Total quality management (TQM), or quality

assurance, includes all the steps that a company
takes to ensure that its goods or services meet or
exceed the customers defined specifications and
are of sufficiently high quality to meet customers’
needs.
• Generally speaking, a company adheres
to TQM principles by focusing on three
tasks:
• Customer satisfaction
• Employee involvement
• Continuous improvement
 CUSTOMER SATISFACTION

• Companies that are committed to TQM understand that

the purpose of a business is to generate a profit by
satisfying customer needs. Thus, they let their customers
define quality by identifying and offering those product
features that satisfy customer needs. They encourage
customers to tell them how to make the right products,
both goods and services, that work the right way.
• Armed with this knowledge, they take steps to
make sure that providing quality is a factor in every
facet of their operations from design, to product
planning and control, to sales and service. To get
feedback on how well they’re doing, many
companies routinely use surveys and other
methods to monitor customer satisfaction. By
tracking the results of feedback over time, they can
see where they need to improve.
 EMPLOYEE INVOLVEMENT

• Successful TQM requires that everyone in the

organization, not simply upper-level management,
commits to satisfying the customer.
• Example
• A defective DVD isn’t solely the responsibility of
the manufacturer’s quality control department;
it’s the responsibility of every employee involved
in its design, production, and even shipping.
• To get everyone involved in the drive for quality
assurance, managers must communicate the
importance of quality to subordinates and motivate
them to focus on customer satisfaction. Employees
have to be properly trained not only to do their jobs
but also to detect and correct quality problems.
 CONTINUOUS IMPROVEMENT

• An integral part of TQM is continuous improvement: the

commitment to making constant improvements in the
design, production, and delivery of goods and services.
Improvements can almost always be made to increase
efficiency, reduce costs, and improve customer service
and satisfaction. Everyone in the organization is
constantly on the lookout for ways to do things better.
 ISO

• The International Organization for Standardization

(ISO) is an international standard-setting body
composed of representatives from various standards
organizations.
• Founded on 23 February 1947, the organization
promotes worldwide proprietary, industrial and
commercial standards. It is headquartered in
Geneva, Switzerland, and works in 164 countries.
• ISO is an independent, non- governmental
organization and is the largest developer of voluntary
international standards. Use of these standards
assists organization to create products and services
that are safe, reliable and of good quality.
 STEPS IN OBTAINING ISO
CERTIFICATION

A firm must initially begin by documenting and

implementing their systems for quality management.
Add: These documents must include Policy,
Procedures and work instructions. This is no small
task. This documentation may take a great deal of
time, effort and collaboration by all of their
employees. In addition to this, the company will
develop a Quality Manual that outlines how they will
assure the quality of their goods and service.
Training of all employees involved with these
processes must take place. The employees must
gain full understanding and be comfortable with
these new work procedures and documents
• An audit must take place. The organization must
arrange to have a certification body come to
complete the audit. There are many different
private companies that have been granted (by
ISO) the authority to grant ISO9000 certification.
These private companies are themselves
accredited by ISO.
 HAZARD ANALYSIS CRITICAL
CONTROL POINT (HACCP)

• HACCP is a quality management system for

organizations in the food processing industry.
• By implementing a HACCP program, the following
results will be obtained:
• Gain customer confidence
• sharpen your competitive edge and develop new
export opportunities
• achieve more rigorous quality control
• reduce waste and spoilage
• control contamination risks and recall processes
• build awareness of hygiene and safety for
employees
• eliminate potential allergen issues
 SIX SIGMA

• Six Sigma is a set of techniques and tools for

process improvement.
• It was introduced by engineer Bill Smith while
working at Motorola in 1980. It is a comprehensive
quality system for achieving business success by
minimizing variation in business processes.
DMAIC
MODEL
Define the problem, improvement activity,
opportunity for improvement, the project goals, and
customer (internal and external) requirements.
Measure process performance.
Analyze the process to determine root causes of
variation and poor performance (defects).
Improve process performance by addressing and
eliminating the root causes.
1.Control the improved process and future process
performance.
 TOOLS FOR QUALITY IMPROVEMENT

• There are a number of basic generic tools that are

most commonly used. These tools include check
sheets, histograms, control charts, Pareto charts,
scatter diagrams, as well as cause and effect
diagrams.
 CHECK SHEETS

• This is a custom designed form used to record the

number of occurrences of a particular outcome of
interest. It may collect basic information such as
how many incidents occurred, the timing, or the
measurement that was non-conforming.
 HISTOGRAMS

• Raw data from a check

sheet may be put into
a histogram. Data that
is continuous in nature
can be put into a
Histogram that
contains ranges of the
data. It will show an
accurate
representation of the
distribution of the
data.
 CONTROL
CHARTS

• In order to monitor the

performance of a
process over time, a
control chart is the
appropriate tool. A
Control Chart includes
an Upper Control limit
and a lower Control
limit, which are used
to control the quality
dimension that is
measured. As long as
points seem to appear
randomly on both
sides of the mean and
they fall between the
upper and lower
 PARETO CHARTS

• A special type of bar chart that shows the number of

occurrences of a particular characteristic, ordered
from highest to lowest. The X axis represents each
characteristic and the Y axis is the number of times
this occurrence was recorded. In addition, a
cumulative percent line shows the cumulative
percentage that each category represents. The Y axis
on the right hand side of the chart corresponds to the
percentage on this line.
• In the management of quality, managers must
allocate resources to rectify the most frequently
occurring problems. A Pareto analysis helps us focus
our attention on the defects that occur the most
frequently and to allocate the resources accordingly.
• Steps in a Pareto Analysis:
1. Collect your raw data and put it into a simple table in
descending order. Sum the total number of results at the
bottom of the column.
Complaints Number
Long wait time 81
food not hot 48
Server unknowledgeable 20
bill inaccurate 16
floor not clean 9
• Menu items sold out 7
2 Include a cumulative column and calculate the cumulative
percentage of each
Complaints Number Cumulative Cumulative Percent
wait time long 81 81 44.8
food not hot 48 129 71.3
Server unknowledgeable 20 149 82.3
bill inaccurate 16 165 91.2
floor not clean 9 174 96.1
• Menu items sold out 7 181 100.0
3 In EXCEL,
your Pareto
analysis will
look like this.
 SCATTER
DIAGRAMS

A simple diagram
helps to figure out if
there is a
relationship
between two
 CAUSE AND EFFECT DIAGRAMS

• Also known as a Fishbone diagram, it was developed

by Dr. Ishikawa to help identify the causes of a
problem. The overall shape is that of a fish. The
pointy end points to the ‘effect’ or the problem. Each
of the ribs represents a major cause, or category that
is a potential contributor to the problem. Commonly,
the rib bones tend to be categories such as the man,
method, material, machine, and environment. The
actual factors that fall under each category are