Chapter 1.

CONCEPTS OF QUALITY & TQM

OBJECTIVES
After this chapter, students should be able to
 explain the definition, dimensions, and cost of quality;
 recognize the contributions of quality gurus in the development of TQM;
 identify measures to reduce/eliminate the costs of quality; and
 evaluate the barriers affecting the success of TQM implementation.

Definition of Quality

When the expression "quality" is used, we usually think in terms of an excellent product or
service that fulfills or exceeds our expectations. These expectations are based on the intended use
and the selling price. Quality can be quantified as follows:
Q=P/E
where: Q = quality,
P = performance, and
E = expectations.
If Q is greater than l.0, then the customer has a good feeling about the product or service. Of
course, the determination of P and E will most likely be based on perception with the organization
determining performance and the customer determining expectations. Quality is concerned with
meeting or exceeding customer expectations. (Parasuraman et al., 1985)

Joseph M. Juran, one of the quality gurus, defined quality as fitness for use (Juran, 1989) a very
concise definition indeed for a term that has so many dimensions. Quality of a product or service
in simple terms is its suitability for use by the customer. Quality has to be perceived by the
customer. Perception of the supplier is also important, but the customer experience of quality of a
product or service is more important. Quality does not mean an expensive product; on the
contrary, it is fitness for use of the customer.

International Organization for Standardization (ISO), the world body for standards formulation, is
known all over the world because of its path breaking standard ISO 9000. The definition of
quality as per ISO 9000 standard is: "The totality of features and characteristics of a product or
service that bear on its ability to satisfy a given or implied need".

Thus, the standard definition of quality is common to both products and services. It is essentially
satisfying the customer needs, both stated and unstated (implied). The latter is more dominant in a
service. When there is a contract for supply of a product or service, the needs will be specified
clearly. In other situations, it is the responsibility of the supplier to identify and define them.

Quality of a product or services is its ability to satisfy the needs and expectations of the customer.

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 Meaning of Quality

Producer’s Perspective Consumer’s Perspective

Quality of Conformance Quality of Design

* Conformance to * Quality characteristics
specifications * Price
* Cost

Production Marketing
Fitness for Consumer Use

Figure1.1 Meaning of quality from the producers and consumers perspective.

Quality is approach from two perspectives, producers and consumer’s perspectives. The
final determination of quality is fitness for use, which is the consumer’s view of quality.

Dimensions of Quality

Quality has many dimensions. Table l.1 shows the common dimensions of quality with their
meanings and explanations in terms of LED television.

Table 1.1 The dimensions of quality.

PRODUCT EXAMPLE
DIMENSION MEANING
(LED Television)
Performance Primary product characteristics Resolution/brightness of the
picture
Features Added/extra/secondary characteristics Remote control

Conformance Meeting specifications or pre-established ISO certification

industry standards/workmanship
Reliability Consistency of performance over time, average Without repair for about 5 years
time for the unit to fail (Mean time between failures)
Expected life
Durability Useful life, Estimated time before
Continue function even subjected to frequent use replacement
Serviceability Ease of repair, Availability of authorized service
Repairable parts centers
Aesthetics Sensory characteristics Flat screen,
(appearance, feel, smell, taste, etc.) Exterior finish/color
Reputation Past performance, Brand name recognition,
Perceived quality, Endorsed by users,
Indirect evaluation of quality Rank first
SOURCE: Garvin, David A., Eight dimensions of product quality, 2008.

These dimensions are somewhat independent; therefore, a product can be excellent in one
dimension and average or poor in another. Very few, if any, products excel in all eight dimensions. For
example, the Japanese were cited for high-quality cars in the l970s based only on the dimensions of
reliability, conformance, and aesthetics. Therefore, quality products can be determined by utilizing a
few of the dimensions of quality.

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Product/Service Quality

Quality has a number of dimensions for product/service, among which are the following:

1. Aesthetics
A product or service should not only perform well but also appear attractive. Aesthetics is not
limited to the external finish or appearance, feel, smell, taste pleasing to the senses. Customers
will buy only those refrigerators or TV receivers or music systems, which look good.

2. Conformance
Product or service should conform to the stated and implied requirements/specifications of customers.
Conformance is the precision with which the product or service meets the specified standards.
Where applicable, they should conform to applicable standards such as national standards,
international standards and industry standards.

3. Durability
Durability measures the length of a product's life. It refers to the ability of a product to continue to
function even when subjected to extensive wear and frequent use. When the product can be
repaired, estimating durability is more complicated. The item will be used until it is no longer
economical to operate it. This happens when the repair rate and the associated costs increase
significantly.

4. Efficiency
This is applicable to most products. Efficiency is the ratio of output to input. If a car gives a
mileage of 20 kilometers per liter of gasoline and another car with identical features gives 15
kilometers per liter, then the former is more efficient than the latter. Another example is the
brightness of a lamp at a given input voltage.

5. Functionality
Functionality refers to the core features and characteristics of a product. "Functionality is a set of
attributes that bear on the existence of a set of functions and their specified properties". (definition
as per ISO/IEC 9126: 1991).The functions are those that satisfy stated or implied needs. For
instance, a car has to have a seating capacity for five persons, a steering wheel, an accelerator, a
brake, a clutch, head lights, gears, four wheels, etc.

6. Features
Features are secondary characteristics that enhance the appeal of the product or service to the
user. Identifiable features of a product or service are psychological, time oriented, contractual,
ethical and technological. For example the primary function of an automobile is transportation,
whereas stereo system is a feature.

7. Maintainability
Maintainability refers to the ease with which a product can be returned to its operating condition
after it has failed. It should be repairable so as to retain the original quality of the product at the
lowest cost at the earliest possible time. This applies to software, automobiles, household items
such as refrigerator, air conditioners, personal computer, etc. For instance, when we use a
flashlight we may need to change the batteries periodically.

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8. Performance
Performance involves "fitness for use" — a phrase that indicates that the product and service is
ready for customer’s use at the time of sale. Performance refers to a product’s primary operating
characteristics. This dimension of quality involves measurable attributes; brands can usually be
ranked objectively on individual aspects of performance.

9. Price
Customer pays for the value in what they buy. Value is the sum of the benefits the customer receives
and can be more than the product itself. Customers are constantly evaluating one organization’s
products and services against those of its competitors to determine who provides the greatest value.

10. Reliability
Reliability of a product is defined as the probability that it will perform its intended functions for
a specified period of time, under the stated operating conditions. Reliability means consistency of
performance. Reliability is measured by the length of time a product can be used before it fails.
For instance, a car can be specified as 1,000 hours of running or 10,000 kilometers.

11. Reputation/Perceived Quality

Customers are willing to pay a premium for a known trusted brand name and often become
customer for life. Customer retention is an important economic strategy for an organization.
Perceived quality is the quality attributed to a product or service based on indirect measures or
past performance.

12. Serviceability
Serviceability is the speed with which the product can be put into service when it breaks down, as
well as the competence and the behaviour of the serviceperson. An intangible generally made up of
a number of things such as availability, speed of service, courtesy, and competence of personnel.

13. Timeliness/Availability
Delivery on schedule as per requirements of the customer is a must both in the product sector as
well as in service sector. No customer likes waiting. Timeliness is critical for many products and
services. Delay in arrival of aircrafts or trains are instances of poor quality of the services
encountered in day-to-day life. Timeliness/availability is the probability that a product will
operate when needed.

14. Usability
A product should be easily usable. The customer should be able to use the product easily without
the help of experts. For instance, repairing a car may need the help of a mechanic, but the car can
be driven by the owner himself, it he/she is trained accordingly. Thus, each product should be
made so that a person can use it with minimum training. Usability can also be measured by the
time taken for training an operator for error-free operation of a system.

15. Warranty
The product warranty represents an organization’s public promise to back-up its product with a
guarantee of customer satisfaction. A warranty generates feedback by providing customer
definition of product and service quality. It also forces the organization to develop a corrective
action system.

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Cost of Quality (COQ)

Cost of Quality (COQ) is the sum of costs incurred by an organization in preventing poor quality.
As defined by Philip B. Crosby in his book Quality Is Free, the cost of quality has two main
components: the cost of good quality (or the cost of conformance) and the cost of poor quality (or
the cost of non-conformance) as shown in the figure below:
Appraisal
Cost of Good Costs
Quality
Prevention
Cost of Costs
Quality
Internal
Cost of Poor Failure
Quality
External
Failure
Figure 1.2 Cost of quality.

There are essentially two types of quality costs:

1. Cost of Conformance (Cost of Good Quality)
a. Prevention Costs are the planned costs incurred by an organization to ensure that no
defects occur in any of the stages such as design, development, production and delivery of
a product or service. They are incurred to reduce the inspection as well as the failure costs.
The expenditure on account of TQM implementation is a prevention cost. Prevention costs
include education and training of employees, process improvement efforts, process
control, market research, product qualification, field testing, preventive maintenance,
calibration of instruments, audits, quality assurance staff, etc.
b. Appraisal Costs are incurred in verifying, checking or evaluating a product or service at
various stages during manufacturing or delivering. They are incurred due to lack of
confidence in the quality of the product or service either due to the incoming material or
due to the process. For instance, the incoming materials are inspected, because, the
receiver is not sure about the quality of the incoming goods. During the process, a number
of inspections take place, since the quality of the process is in doubt. Therefore, if quality
improves in the organization as well as among the vendors, inspection cost can be
reduced. Appraisal costs include incoming inspection, internal product audit, supplier
evaluation and audit, inspection during process, and final inspection, etc.
2. Cost of Non-Conformance (Cost of Poor Quality)
a. Internal Failure Costs. Includes costs of every failure that takes place before the product
is delivered to the customers. It accumulates due to defective processes. The following
accounts for internal failures: rejected material supplied by vendor; rejected pieces of sub-
assemblies; rejected products at final inspection; scrap on account of poor workmanship;
overtime to rework non-conforming products.
b. External Failure Costs. These are on cost of failure of the product after its delivery to the
customers. Examples of external failure are: warranty costs; free replacements given due
to failure of items supplied; cost incurred to travel to customer’s site for repair; cost of
products returned; cost of customer complaint administration; cost of customer follow up
and field service department.
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Evolution of Quality

The strategy for quality evolved with time is given in the figure below:
Inspection

Pre- World War II

QC
________________ ___ ___ ___ ___ ___ ___ ___ ___ __

Post- World War II

QA

QM

TQM
SOURCE: Ramasamy,Subburaj, 2012.

Figure 1.3 Evolution of quality.

The above figure is the chronology of evolution of methodologies for quality. In simple
terms, QC is inspection or appraisal of products and services to ensure that the stated
requirements are fulfilled. This was the only technique practiced during World War II. Since it
was found that QC was essential but not sufficient, Quality Assurance techniques were developed
after the war.

QUALITY CONTROL (QC)

Quality Control (QC) may be defined as the operational techniques and activities that are used to
fulfill the requirements for quality.
Juran gives three steps of Quality Control:
1. Evaluate actual operating performance
2. Compare actual performance to goals
3. Act on the difference
Quality Control are those activities which ensure that quality creation is performed in such a
manner that the resulting product will in fact perform the intended function. (Definition from
"The Handbook of Industrial Engineering and Management").
Quality control is a set of activities intended to ensure that quality requirements are actually being
met.

QUALITY ASSURANCE (QA)

Quality assurance covers all activities from designing, development, production, installation,
servicing and documentation. This introduced the rules: "fit for purpose" and "do it right the first
time" (DIRFT). It includes the regulation of the quality of raw materials, assemblies, products and
components; services related to production; and management, production, and inspection
processes.
Quality assurance is a set of activities intended to establish confidence that quality requirements
will be met.
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In this sense, Quality Assurance strives to achieve several goals as follows:
o to ensure that the product characteristics selected will achieve the intended result.
o to ensure that the items produced will be manufactured to the desired quality level.
o to evaluate the safety performance.

The definition of quality assurance is: All the planned and systematic activities
implemented within the quality system, and demonstrated as needed, to provide adequate
confidence that an entity will fulfill the requirements for quality. Quality Assurance is much more
involved activity than mere inspection. In fact QC is one of the activities of QA.

The purpose of QA is to fulfill the quality requirements of an entity, i.e. product or

service, with adequate confidence by the supplier. This requires implementation of all the
activities planned for building quality into the product. Such planned activities are to be
implemented systematically within the scope of a documented quality system. J.M. Juran
identified and popularized "fitness of quality" which requires the following:
1. Quality of Design
It refers to how well the product or service has been designed to meet the current and
future requirements of customers and add value to all the stakeholders. The stakeholders
for any organization are customers, employees, suppliers, owners and society. Quality of
design involves all activities that will result in a successful design. It necessarily includes
finding out the customer’s requirements.
2. Quality of Conformance
This indicates the consistency in delivering the designed product. Product quality in turn
depends on the quality of all processes in the organization. Therefore, it involves all
activities that will ensure the conformance of the products to its requirements consistently.
3. Quality of Performance
It is an indicator of the performance of the end product. This in turn depends on the quality
of design (including the reliability of the product) and quality of conformance.
4. Quality of Service
Selling a product is not the end of the business. It is the quality of associated services
rendered that adds value to the product. Quality of service involves all activities that will
enable the customer to procure and use the product without any hassles.

QUALITY MANAGEMENT (QM)

According to ISO 9000 standards, Quality management comprises "All activities of the overall
management function that determine the quality policy, objectives and responsibilities and
implement them by means such as quality planning, quality control, quality assurance and quality
improvement within the quality system."
The quality system consists of the organizational structure, procedures, processes and resources
needed to implement quality management. The above brings out the following:
o The company must have an objective and policy for quality of the products and services.
o The organization should plan for meeting the objective.
o The plan should include QA, QC and methodology for improvement.
o There must be a clear organizational structure for building quality into the products and
services with necessary resources.
The quality management should be implemented formally with well-defined processes and
procedures and trained resources.
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Table 1.2 TQM timeline.

Timeline Quality Gurus & Their Contributions

Walter A. Shewhart developed the methods for statistical analysis, control of
1924 quality and Acceptable Quality Level (AQL). "Father of Statistical Quality
Control" (SQC). Introduced the PDSA cycle for continuous improvement.

Philip B. Crosby’s promotion of "Zero Defects (ZD)" paved the way for quality
1926 improvement in many companies. Absolutes of quality includes
"Quality is conformance to requirements". "Performance standard must be
Zero Defect (ZD) and not Acceptable Quality Level (AQL)".
Kaoru Ishikawa’s synthesis of the philosophy contributed to Japan’s ascendancy
1943 as a quality leader. Developed the Fishbone diagram or Ishikawa diagram for cause
and effect analysis. The Japanese named their approach to total quality
companywide quality control. Developed the first "Quality Circles" in Japan.
Deming W. Edwards developed the concept of cost of quality. "Father of Quality
1950 Control" (QC). Modified PDSA cycle to PDCA cycle. Introduced "fourteen
points for quality management".

Joseph M. Juran taught the concepts of controlling quality and managerial

1951 breakthrough. "Quality is fitness for use" as defined from Juran’s Quality Control
handbook. His quality trilogy for TQM consists of "quality planning, quality
control and quality improvement".
Armand V. Feigenbaum’s methodology for cycle time reduction applicable to
1951 every business. "Quality in its essence a way of managing the organization".
Introduced the concept of Total Quality Control (TQC).

TQM is the name for the philosophy of a broad and systemic approach to
managing organizational quality.
Today
Quality standards such as the ISO 9000 series and quality award programs

Definition of TQM

Total Quality Management (TQM) is a management approach centered on quality, based on the
participation of an organization’s people and aiming at long term success (ISO 8402:1994). This
is a long-term success through customer satisfaction and benefits to all members of the
organization and society.

TQM is a management philosophy embracing all activities through which the needs and
expectations of the customer and community, and the objectives of the organization are satisfied
in the most efficient and cost effective manner by maximizing the potential of all employees in a
continuing drive for improvement. (According to British Standards Institution. BS4778:1991)
 TQM is based on the participation of all members of an organization in improving processes,
products, services, and the culture they work in. (According to the ninth edition of the APICS
Dictionary). This is an approach in improving both customer satisfaction and the way
organizations do business. TQM brings together all of the quality and customer-related process
improvement ideas. It is people oriented.

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Scope of TQM
TQM

Principles & Practices Tools & Techniques

Leadership Quantitative Non-quantitative

Customer Satisfaction
SPC ISO 9000

Employee Involvement
FMEA ISO 14000

Continuous Process Improvement

Principles & Practices TrainingPRELIMINARY SCREENING QFD Benchmarking

Supplier Partnership TPM

Performance Measures Management Tools

Figure 1.4 Scope of TQM activity.

Barriers to TQM Implementation

Once an organization embarks on TQM, there could be many barriers to its successful
implementation. Some of the commonly encountered barriers or obstacles are listed below:
o Non-cooperation of first line managers and middle management
o Lack of consistency and persistence by the management
o Lack of top management commitment
o Ineffective measurement technique of performance
o Resistance to change at all levels
o Not investing adequate resources
o Looking for immediate gains
o Lack of clarity in vision
o Adhoc organization
o Not properly staffed—too many or too less number of employees
o Lack of continuous training and education
 o Lack of employee involvement
o Ineffective TQM facilitator and wrong consultant
o Tough competition leading to frequent price war
o Not involving customers and suppliers

The barriers can be overcome by dedicated work force with a strong and committed leadership.

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Worksheet No. 1.1 DIMENSIONS OF QUALITY

Name: ______________________________ Date: __________

Course/Major: _____________

Instructions: Identify a certain product. Describe the quality dimensions that influence
purchases of the given product.

Name of Product: Name of Product:

DIMENSIONS: 1.______________________ 2._______________________

Performance:
Reliability

Maintainability

Features

Aesthetics

Conformance
to standards

Warranty

Reputation/
 Perceived quality

Price

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Worksheet No. 1.2 COST OF QUALITY

Name: ______________________________ Date: __________

Course/Major: _____________

Instructions: Fill in the table below with the different actions to reduce or eliminate the cost of
quality.

Cost of Quality Classification Prevention/Reduction

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