QUALITY

MANAGEMENT
Quality and Profitability

Improved quality
of design
Improved quality
of conformance

Higher perceived
value Higher prices

Lower manufacturing
and service costs

Increased market Increased

share revenues

Higher profitability
Development of Quality Mgmt.
 Quality Inspection Stage
 Quality Control Stage
 Quality Assurance
 Total quality Management Stage
 Quality Evolution
Incorporates QC/QA activities into a
Proactive Approach company-wide system aimed at satisfying the
Total Quality
Management customer.
Prevention 4 (involves all organizational functions)
Stop defects at source.
Zero defects
Quality Planned and systematic actions to ensure that
Assurance products or services conform to company
3
requirements

Reactive Approach
Operational techniques to make
Quality inspection more efficient & to reduce
Control the costs of quality. (example: SPC)
Detection 2

Finding & Fixing

mistakes
Inspection Inspect products
1
Quality
 Quality – degree to which a product or service meets or
exceeds customer needs and expectations

 Quality Management – set of activities an organization

performs to improve and maintain the quality of its products
or services.
QUALITY PERSPECTIVES IN THE VALUE
CHAIN

Transcendent and Product-Based

User-Based

Needs
Customer Marketing

Design Value-Based
Products and
services
Distribution Manufacturing

Manufacturing -Based
Performance and Conformance
Performance quality
• Ability of a product or service to excel along one or more
performance dimensions
• How a product/service should perform
• Determined by design of product
Conformance quality
• Degree to which a product or service conforms to the
specifications
• What the customer actually gets
• Determined by design of operating system
Achieving Quality
Performance specifications
Product specifications
Design of the production process – machines, tools, instructions,
procedures
Performance
quality Disturbances

Product Product Process Process Actual

design specifications design operation product

Process Process/quality
settings control system
TOTAL QUALITY MANAGEMENT
Development of Quality Mgmt.
 Quality Inspection Stage
 Quality Control Stage
 Quality Assurance
 Total quality Management Stage
 Quality Evolution
Incorporates QC/QA activities into a
Proactive Approach company-wide system aimed at satisfying the
Total Quality
Management customer.
Prevention 4 (involves all organizational functions)
Stop defects at source.
Zero defects
Quality Planned and systematic actions to ensure that
Assurance products or services conform to company
3
requirements

Reactive Approach
Operational techniques to make
Quality inspection more efficient & to reduce
Control the costs of quality. (example: SPC)
Detection 2

Finding & Fixing

mistakes
Inspection Inspect products
1
Quality Control

▪ The purpose of quality control is to uncover defects and

have them corrected so that defect-free products will be
produced.
▪ Quality control is limited to looking at products .
▪ Quality control is testing the final product against product
quality standards.
▪ Quality control is operational techniques that are used to
fulfill requirements for product quality.
 Quality Assurance

▪ Quality assurance is oriented toward preventing defects.

▪ It is defined by those activities that modify the development processes to
prevent the introduction of defects.
▪ Quality assurance is more concerned with the processes that produce the
final product, and making sure that quality is part of each phase.
▪ QA is about maturing the process towards minimum defect.
▪ It is about balancing methodology, leadership, and technology.
▪ It is about taking into account human factors as well as technological
ones.
Evolution Of TQM
Criterion Inspection QC QA- TQM

Objective Measurement of Control of Distribution of Continuous

specifications processes quality quality
responsibility to improvement at
functional areas every level, at
every place and at
every stage
Focus Uniform product Reduction in Evaluation at all Customer
quality inspection work stages satisfaction
 Evolution Of TQM
Criterion Inspection QC QA TQM

•Tools Gauges and SQC tools and Quality planning Commitment,

measurement techniques documentation participation,
techniques and quality motivation,
systems education and
training
Responsibility for Inspection Production All departments Top management
quality department department leadership with
everyone in the
organization

Approach Inspection, Trouble Assuring to Strategic

sorting, shooting and bring quality by management, team
grading controlling the planning involvement and
quality programme action research
design and
programme
control
 TQM
A philosophy that
involves everyone in
A quest for quality that the organization in a
involves everybody in continual effort to
the organization improve quality and
achieve customer
satisfaction
TQM
Approach • Management led

Scope • Company wide

Scale • Everyone responsible for quality

Philosophy • Prevention and not detection

Standard • Right first time

Control • Cost of quality

Theme • Continuous improvement

 Principles of Total Quality

Focus on customers and

stakeholders

Process focus supported

Participation and by continuous
teamwork by everyone improvement and
learning
Organizations need to be viewed as whole and the
important organizational linkages among these
functions need to be concentrated on.
Eight key elements of TQM
Ethics
Integrity
Trust
Training
Teamwork
Leadership
Recognition
Communication
 Building Binding
Foundation Roof
Brick Mortar
elements element
Elements Element

ethics training

integrity teamwork Communication Recognition

trust leadership
QUALITY PHILOSOPHIES
 Deming, Juran and Crosby are regarded as “management
gurus” in the quality revolution.
W Edwards Deming
 Deming’s thinking went beyond mere statistics

 Preached the importance of top management

leadership, customer/supplier partnerships and
continuous improvement in product development
and manufacturing processes

 Deming did not lay out a quality improvement programme

 His goal was to radically change perspectives in management.

 Higher quality

Higher productivity

Long term
competitive strength
Deming’s PDCA Cycle
Deming’s Profound Knowledge
System
Appreciation of a system:
understanding the overall Knowledge of variation: the
processes involving suppliers, range and causes of variation
producers, and customers (or in quality, and use of statistical
recipients) of goods and sampling in measurements;
services

Theory of knowledge: the

concepts explaining Knowledge of psychology:
knowledge and the limits of concepts of human nature.
what can be known
Joseph Juran
 empowerment of the workforce
 quality linked to
human relations and teamwork
 key elements
• identifying customers and their needs
• creating measurements of quality
• planning processes to meet quality goals
• continuous improvements
Quality Trilogy
 • The process of designing products, services,
and processes to meet new breakthrough
Quality
Planning goals;

• The process of meeting goals during

Quality operations;
Control

• The process of creating breakthroughs to

Quality unprecedented levels of performance.
Improvement
Philip Crosby
 1992: “Quality, meaning getting everyone to do what they
have agreed to do and to do it right first time is the skeletal
structure of an organisation, finance is the nourishment and
relationships are the soul”

 Unlike Juran and Deming, Crosby’s approach was primarily

behavioural.
 Emphasized using management and organizational processes
rather than statistical techniques to change corporate culture
and attitudes.
 Crosby’s Four Absolutes of
Quality Management
the
quality is
the system for performance the
conformance
creating standard must measurement
to
quality is be Zero of quality is
requirements,
prevention, defects, not non-
not goodness
not appraisal that’s close conformance
or elegance
enough
Focusing on
Customers

1
Key Idea

To create satisfied customers, the

organization needs to identify customers’
needs, design the production and service
systems to meet those needs, and
measure the results as the basis for
improvement.
Importance of Customer Satisfaction
and Loyalty
• “Satisfaction is an attitude; loyalty is a behavior”
• Loyal customers spend more, are willing to pay
higher prices, refer new clients, and are less costly
to do business with.
• It costs five times more to find a new customer than
to keep an existing one happy.
• A firm cannot create loyal customers without first
creating satisfied customers.

3
Customer-Driven Quality Cycle
Customer needs and expectations
(expected quality)

Identification of customer needs

Translation into product/service specifications

(design quality)

Output (actual quality)

Customer perceptions (perceived quality)

measurement and feedback

PERCEIVED QUALITY is a comparison of ACTUAL
QUALITY to EXPECTED QUALITY 4
Leading Practices (1 of 2)

• Define and segment key customer groups and

markets
• Understand the voice of the customer (VOC)
• Understand linkages between VOC and
design, production, and delivery
Leading Practices (2 of 2)

• Build relationships through commitments,

provide accessibility to people and
information, set service standards, and
follow-up on transactions
• Effective complaint management processes
• Measure customer satisfaction for
improvement
Key Customer Groups

• Organization level
• consumers
• external customers
• employees
• society
• Process level
• internal customer units or groups
• Performer level
• individual internal customers
Identifying Internal Customers

• What products or services are produced?

• Who uses these products and services?
• Who do employees call, write to, or answer
questions for?
• Who supplies inputs to the process?
Customer Segmentation

• Demographics
• Geography
• Volumes
• Profit potential
Kano Model of Customer Needs

•Dissatisfiers: expected requirements

•Satisfiers: expressed requirements
•Exciters/delighters: unexpected features

10
Key Idea

As customers become familiar with them,

exciters/delighters become satisfiers over
time. Eventually, satisfiers become
dissatisfiers.
Customer Listening Posts

• Comment cards and formal surveys

• Focus groups
• Direct customer contact
• Field intelligence
• Complaint analysis
• Internet monitoring

12
Moments of Truth

• Every instance in which a customer comes in

contact with an employee of the company.
• Example (airline)
• Making a reservation
• Purchasing tickets
• Checking baggage
• Boarding a flight
• Ordering a beverage
• Requests a magazine
• Deplanes
• Picks up baggage
 Customer Relationship Management
• Accessibility and commitments
• Selecting and developing customer contact employees
• Relevant customer contact requirements
• Effective complaint management
• Strategic partnerships and alliances
• Exploiting CRM technology
Measuring Customer Satisfaction

• Discover customer perceptions of business effectiveness

• Compare company’s performance relative to competitors
• Identify areas for improvement
• Track trends to determine if changes result in improvements

15
Difficulties with Customer Satisfaction
Measurement

• Poor measurement schemes

• Failure to identify appropriate quality dimensions
• Failure to weight dimensions appropriately
• Lack of comparison with leading competitors
• Failure to measure potential and former customers
• Confusing loyalty with satisfaction
HR MANAGEMENT
Objectives of HRM
 To build
 a high-performance workplace and
 maintain an environment for quality excellence to enable
employees and the organization to achieve strategic objectives
and adapt to change.
 Teams
 Team –
 a small number of people
 with complementary skills
 who are committed to a common purpose, set of performance goals,
and approach for which they hold themselves mutually accountable
Types of Teams
 Management teams
 Natural work teams
 Self managed teams
 Virtual teams
 Quality circles
 Problem solving teams
 Project teams
Functions of Teams

Identify
problems Select
Implement
solutions problem

Identify
Develop Collect
follow-up Solve data
plan Analyze
Focus
Pick best attention
solution
Find
Develop causes
solutions
Team Life Cycle

The key stages of a team’s life cycle are called

forming, storming, norming, performing, and
adjourning.
Principles of High Performance
Workforce Management Practices
 Workforce Engagement
 Employee Involvement
 Motivation
High Performance Work Systems

Compensation
Work and Job Flexibility and recognition
Design
Innovation
Health and Knowledge and skill
safety sharing
Empowerment
Organizational
Suggestion
alignment
systems
Customer focus Employee
Training and Rapid response Involvement
Education
Teamwork and Cooperation
 Designing High Performance
Work Systems
 Work design - how employees are organized in formal and
informal units (departments, teams, etc.)
 Job design - responsibilities and tasks assigned to individuals
Hackman and Oldham Model
Critical
Core job psychological Outcomes
characteristics states

Skill variety Experienced

Task identity meaningfulness High motivation
Task significance of work
High satisfaction
Experienced
Autonomy responsibility
High work
Feedback effectiveness
Knowledge of
from job actual results
Enhancing Work Design
 Job enlargement – expanding workers’ jobs
 Job rotation – having workers learn several tasks and rotate
among them
 Job enrichment – granting more authority, responsibility, and
autonomy
Employee Involvement

 Employee Involvement - any

activity by which employees
participate in work-related decisions and
improvement activities, with the objectives of
tapping the creative energies of all employees and
improving their motivation
Performance Appraisal

 How you are measured is how you perform!

 Conventional appraisal systems
 Focus on short-term results and individual behavior; fail to
deal with uncontrollable factors
 New approaches
 Focus on company goals such as quality and behaviors like
teamwork
 360-degree feedback; mastery descriptions
Measuring Employee Satisfaction
and Effectiveness
 Satisfaction
 Quality of worklife, teamwork, communications, training,
leadership, compensation, benefits, internal suppliers and
customers
 Effectiveness
 Team and individual behaviors; cost, quality, and productivity
improvements; employee turnover; suggestions; training
effectiveness
PROCESS MANAGEMENT
• Planning and administering the activities necessary to
achieve a high level of performance
• Involves identifying opportunities for improving quality
and operational performance and ultimately customer
satisfaction
• Core processes are defined as those activities
that your customers are willing to pay for
because they add value to your product or
service.
• All of the other processes that occur within the
company are referred to as supporting
processes.
Core processes Support processes
• They drive the creation • Most important to an
of products and services organization’s value
• Critical to customer creation processes and
satisfaction daily operations
• Have a major impact on • Provide infrastructure for
the strategic goals of an core processes but
organization generally do not add
value directly
• Driven by external
customer needs • Driven by internal
customer needs
Process Management -Activities

Process Process Process

Design Control Improvement
Process Management
•Involves planning and administering
the activities necessary to achieve a
high level of performance
•Involves identifying opportunities
for improving quality and
operational performance and
ultimately customer satisfaction
Process Design

The goal of process design is to develop an efficient procedure to

satisfy both internal and external customer requirements

It begins with identifying and documenting the process

A good process design focuses on the prevention of poor quality

by ensuring meeting of customer requirements and that the
process is capable of achieving requisite level of performance
Control vs Improvement
Process Control

Control is the activity of ensuring conformance to

requirements and taking corrective action when
necessary to correct problems and maintain
stable performance

Three components of a control system are:

standard or goal, a means of measuring
accomplishment, comparison of actual results
with standard along with feedback
Process Improvement

Incremental improvements
• Kaizen
• Requires operating practices, total
involvement and training
Breakthrough Improvements
• Benchmarking
• reengineering