141107

PRODUCTIVITY AND QUALITY MANAGEMENT

Productivity
• Measurement of output related to inputs
• Yield – Ratio

Project – Exercise – given on 1st lecture ( 30 ) to be done individually.

Quality
• Different definitions –
o Conventional – one that wears well, well constructed and will
last for a long time.Therefore, will meet cost requirement

We will deal with various other definitions later –

Before that let us try & trace the History of Quality Management

History of Quality Management

- The issue of Quality of Goods and services is not new. Throughout

history – say 1700 BC King Hummurabi of Babylon – introduced the
concept of product quality and liability into the building industry
declaring

o “.. if the building falls into pieces and the owner is killed, then
the builder shall also be put to death. If the owner’s children
die, then the builder’s children also die.”

- Industrial revolution:
o Early-mid 19th century
o Many technological advances – (Do you remember our
discussion on “The Race”)
o Invention of steam engine
o Standardization of engineering components as screw threads
o Advent of mass production – early 20th century
o Increased demand / control of product quality
o 1920-30 – Walter Steward at AT&T – Bell Laboratories
- Used statistics for Industrial process
 - His book “The economic control of Quality of
manufactured products” was considered as landmark
contribution to the efforts to improve the quality of mfd.
Goods. He reported
• Variations could be understood through
application of simple statistical tools, such as
sampling and probability analysis. His basis was
“Use of Statistics to processes” to provide an
early warning and allow products to be adjusted
prior to producing defective products”.
- He developed “control Charts” to track performance
over time.
o 1920
o The concept of quality emerged in 1920’s in the USA.
o W. Edwards Deming: (disciple of Schewart)
- Went one step ahead.
• By shifting the theory of checking Q by
statisticians from Inspection stage to Inception
stage.
- Deming was regarded as father of TQM.
- He believed Q concerns everybody
o Before WW II, US / Europe felt Deming’s theory as a useless
pursuit. They were more concerned with “cutting costs” and
selling. All their management attention was pointed towards
reduction in human labor.
o Now, Japan (post WWII) was a shattered economy. Gen.
McArthur (Governor of Japan) brought Deming to Japan,
o The Japanese listened – felt it was a natural way “to prevent
waste”
o Their willingness to heed boosted Deming’s exhortation.

o 1954
o Again in 1954 JURAN visited Japan, helped Japanese
manufacturers restructure – gave way to tremendous exports
potential – thrust upon them Q concepts and tools – earlier
these concepts were designed primarily for factory – later
became the basis for an overall “Management process”

o 1979
- Philip Crosby (started a Quality Consultancy firm)
• He said “Quality is Free” – Zero defects
• Product should be in “complete conformance to
defined Q parameters and not AQL –
• Quality is achieved by prevention, not appraisal
o 1970-80 - Japan hit the globe (with Deming & Jurans) ideas
o Japanese created the leading edge in manufacturing
- First with basic technology (steel, aluminum, ship
building
- Then, with increasingly sophisticated products like
motorcycles, cameras, TVs, semi conductors,
appliances
- They invaded the world market
- They told the world “Throw traditional thinking – face
bitter moments of truth”
• For example, JIT (Taichi oheno / Shgeo Shingo) is
a revolutionary shift in paradigm
• Reverses workflow from Supplier – Manufacturer
– customer to Customer – Manufacturer –
Supplier.
• This shall strip away all “Inventories”
o Genuchi Taguchi
- Cut the “noise” level at design stage – to get uniformity
from product to product
o Kauro Ishikawa
- “Fish Bone diagram” (identifying possible causes of
problems)
- And, Quality Circles.
- Important:
• Inverts traditional management thinking – through
bottom up problem solving.
o 1980 - NBC, USA
• “If Japanese can do it why can’t we?”
• Struck a public chord
• And unlike 1970s – US companies took Quality
serious
• By 1990 virtually all US companies were on a
quality revolution
o E.g. Motorola – six sigma concept
o Statistical improvement in output
o Everything that is done has to be
99.99997% correct
o Later – six sigma – 0.334% - defect not >
1ppm.
o India
- Not lagging behind – due competitive pressures, --
M&M, C&G, Amtrex, Stanchart, HLL, Philips (I), Godrej,
many others.
(Q is no more a tool for competitive advantage – A threshold
limit and a Qualifier)
--------------------------------------------------------------------------------------

Definitions:
• Webster dictionary
o Quality is physical or non-physical. Characteristics that
constitutes the basic nature of a thing or one of its
distinguishing attributes / features

• Radford:
o Characteristics or grade or combination of characteristics
which distinguishes one article from another, or goods of one
manufacturer from competition, or one grade for product from
a certain factory from another grade out by the same factory.

• Juran
o Quality is fitness for use

• Grant & Leavenworth:

o It is convenient to think of all matters related to Q of
manufactured product in terms of these functions of ---
specification, production and inspection

• Philips Crosby
o Quality is conformance to requirement
o Quality is respect to Humanity

• Deming
o Quality should be aimed at the needs of the consumer present
and future

• Feigenbaum
o Quality is the total product and service characteristics of
marketing, engineering, manufacturing and maintenance
through which the product and service in use will meet the
expectation of the customer.

• Mizuno
o Product quality encompasses those charactierstics which the
product must p0ssess, if it is to be used in the intended
manner

• Teguchi
o Quality is the loss (from function variation and harmful effects)
a product causes to society after being shipped, other than
any losses caused by its intrinsic functions.
• ISO 9000
o QA, all those planned and systematic actions necessary to
provide adequate confidence that a product or service will
satisfy given requirements for quality.

• American National Standards Institute

o QC is the operational techniques and the activities which
sustain a quality of a product or service that will satisfy given
needs, also the use of such techniques and activities.
o TQC is an effective system for integrating the quality
development, quality maintenance, and quality improvement
efforts of various groups in an organization, so as to enable
marketing, engineering production and service at the most
economical levels which allow full customer satisfaction.

• David Garvin (Harvard Business School)

o Describes it as different purposes, stage(s) of product
development, product develop type, type of product or
process and company strategy. He talked about 5 approaches:
• 1) Transendent approach: Q is recognized through
learning and experience defined in terms of innate
excellence
• 2) Product based approach: Quality is precise and
measurable, it can be ranked on various attributes and
is an inherent part of the product
• 3) User based approach: Q reflects personal view,
reflected in consumer demand curves, in marketing
quality is the ideal combination of attributes for
maximizing consumer satisfaction.
• 4) Manufacturing based approach: focus on engineering
and manufacturing practices; quality is defined as
conformance to specs, decreased costs by decreasing
no. of deviations.
• 5) Value based approach: Quality is defined as
performance or conformation at an acceptable cost,
“noion of “affordable excellence”.
Definitions of Quality Gurus (some more insights)
Give here to the students the Comparison table (handwritten)

W. Edward Deming
- Developed Juran’s “road map” to quality
- 85% of quality problems are due to poor system
- 15% only employees – Systems provides a common language
- Heart of Q strategy is SQC – to identify special causes and common
causes of variation
- Categorized “Personnel performance evaluation” as “management
by fear”
- His 14 points – and 7 deadly sins are widely applauded
o 7 deadly sins:
 Lack of constancy of purpose
 Emphasis on short-term profits
 Evaluating performance, merit rating or annual review
 Mobility of management (commitment to the
organization impacted?)
 Management by visible figures
 Excessive medical costs
 Excessive costs of liability
o 14 points
 Create and publish to all employees a statement of aims
and purpose of the Company. Mgmt. must demonstrate
constantly their commitment to this statement.
 Learn the new philosophy – by top M and everybody
 U/stand the purpose of inspection for improvement of
processes and reduction of cost.
 End the practice of awarding business on the basis of
price tag alone
 Improve constantly and forever the system of
production and service
 Institute training (for skills).
 Teach and institute leadership
 Drive out fear, create trust and a climate for innovation
 Optimize toward the aims/purposes of Co.
 Eliminate exhortations for workforce - Eliminate quotas /
MBO – instead learn capabilities of process and how to
improve them.
 Remove barriers that rob people of pride / ownership
 Encourage education and self improvement
 Take action to accomplish the transformation.
Joseph P. Juran

- Quality is “fitness for use of customer’

- Full management commitment to Q effort – not just a leadership role,
but “hands on” involvement
- His “universal process of Q improvement” requires studying
symptoms, diagnosing causes, and applying remedies”

- Juran’s Trilogy

o Quality Planning:

 Process, identify customers requirement from the

product, service features the customer expect, the
process that will delivery those products with correct
attributes, and then facilitates the transfer of this know
how to the producing arm of the organization

o Quality Control:

 Process where product is actually examined and

evaluated against original requirement – expectations of
customer, problem detected – corrected.

o Quality improvement:

 Process – sustaining mechanisms are put in place, so

that quality can be achieved on a continuous basis.
Includes, allocating resources, assigning people to
pursue quality projects, and in general establishing a
permanent structure to pursue Q and maintain the gains
secured.

Juran recommended project-by-project improvements in which projects

are selected on the basis of their projected return on investment.
Armand V. Feigenbaum

- TQC – everyone’s responsibility

- Said: Responsibility should be beyond design and mfg.
- He abhorred poorly designed – inefficiently distributed,
incorrectly marketed, etc.
- His 9 Ms of Quality

o Market
o Money
o Management
o Men
o Motivation
o Materials
o Machines and mechanism
o Modern Info. Methods
o Meeting product requirements

- His 10 principles

o General Management involvement

o Serious consideration of employee ideas
o Long term continuity
o Involvement – Office – factory
o Clear, simple programs
o Careful initial preparation
o Purposeful involvement
o Fresh, relevant
o Line operation leadership
o Company wide QC
Kaoru Ishikawa
- Customers’ view of product performance and producer’s view
- His 6 principles are:
o Quality first
o Consumer orientation
o Breaking down the barrier of sectionalism
o Utilization of statistical method
o Participatory management
o X functional management
- He suggested the following tools
o Cause – Effect
o Stratification
o Check Sheet
o Histogram
o Scatter diagram
o Pareto charts
o Graphs / SQC

Shigeo Shingo
- Poka Yoke devices

Genichi Taguchi
- System Design (primary)
- Secondary design (secondary)
- Tolerances design (tertiary)
Gravin’s 8 dimensions of quality:
• (shift the approach as product moves from design – manufacturing –
market place.
o 1. Performance: Industry reactions to objective characteristics
(User)
o 2. Features: “bells and whistles” or product /secondary to
basic function and less central to user
o 3. Reliability: Problem of product failing within a given period
of time period, more relevant to durable goods
o 4. Conformance: degree design / operational characteristics
match specification; related to reliability; factory (defects);
field (recalls – repairs)
o 5. Durability: Meausre of product life; technology, amount of
use before it deteriorates; repair costs, trade off between
repairs and replacement – personal and economic cost)
o 6. Serviceability: speed, courtesy, competency. Rapid repair
with quality
o 7. Aesthetics: subjective assessment of look, feel, or sound,
individual preferences
o 8. Perceived quality: individual measures, brand image, names
often used when other info. Is not available.

• To avoid confusion, Garvin suggested 3 step process to address

quality from its own perspective

o Use market resources to identify quality which connote quality

to customers.
o Translate these user-based characteristics into identifiable
product attributes
o Organize the manufacturing process to ensure products are
o made to specs.
Determinants of Service Quality

1.
Reliability:
• Performing the right service, at the right time, consistency,
dependability

2.
Responsiveness:
• Willingness / readiness to provide help

3.
Competence: Possessing skills / knowledge to perform
4.
Access, approachability, ease, waiting time, hours of operations

5.
Courtesy: politeness, respect, consideration, friendliness
6.
Communication: language one can understand, listening, adjusting,
explaining the subject, cost, and how problems will be handled.
7.
Credibility: trustworthy, believable, honesty; company reputation, 8.
8.
Security: freedom from danger, risk, or doubt, physical safety, financial
security, confidentiality
9.
Understanding the customer: efforts, his needs, his requirements,
individual attention, recognizing the regular user
QUALITY FROM BUSINESS IMPERATIVES POINT OF VIEW

Historically, “hitting specs..” “fitness for use”, “conformance to

requirements. Also Crosby says this.

The question is:

Let us talk about specifications:
There are numerical target of components / measures to run the business,
and which a firm must make:
e.g. part shall be X cm by Y cm, and order shall be processed within X
days, hours, minutes etc.

Does the customer really wants to know this?

e.g. You go to a store to buy a set of tyres. The salesman tells you “this is
the price, and the tires will last for 50000 miles”

But it wears out after just 35000 miles – how do you as a customer feel?
An emotion “south of delight” LET DOWN.

Let us see another case of similar nature:

You are shown to the same set of tires. The salesman tells you the price,
and says the tires will last 25000 miles. But in goods shape, they last even
up to 35000 miles.

What would be your “feeling” here. ‘CUSTOMER DELIGHT”

These are the same set of tires – same specifications.

As a customer u r not worried about details (specs)..

You just say, hee is the money, tell me how long the function will last?

In the example above, your feel for the quality of tyres has changed
dramatically.
OWING TO THE TIRES PERFORMANCE – RELATIVE TO YOUR
EXPLECATIONS.

This leads us to a refinement of standard definition of quality:

Quality is that which meets the customers expectations.
Does this mean the definitions are wrong? NO.
They are not. In final analysis:
Question is what the customer says it is.
Company makes quality judgment not on a detailed reading of suppliers
operations specs, but on “Impressionist scale” e.g.
Did you or did you not given me what I thought I was paying you for? Did
you or did you not meet my expectations?

IF YOU DOUBT THIS, Consider how u make decisions.

Now CONSIDER THE ROLE, expectations play in determining your level of
satisfaction, from your own several experiences.

Why meet expectations only? Why not > expectations?

One can certainly go beyond expectations and this way you have delivered
more of something.
But this is not more of quality – but more of something else.
That something else is “Value” – again customer perspective
“The ratio of what I got to “What it cost me”.
Value = Got/Cost (denominator)
R we saying a firm has to provide or focus on “added value”
And forget quality.
The concept of “addl. Value” makes sense once we have got our quality
house in order.
This way Q becomes the foundation on which to build and deliver
“additional value”.
FIVE PARADIGMS OF QUALITY

Evolved with time – emanating due to changes in technology, society, etc.

1. Custom Craft Paradigm:

- Clear communication between the customer – craftsman
- Focus on product and product performance relative to demands
- Made exactly the way customer wants (tailor, bank loans, furniture)

2. Mass Production P:
- Post mechanization – focus on production rates.
- No direct involvement of customer, although the product and
production is defined with customer in mind
- Product performance low (e.g. rework, repair/scrap)
- Delivery time low
- Sales from stock (labor intensive in some cases) – e.g. readymade
garments, auto parts.

3. Statistical QC paradigm:

- Mass production may be, but focus is on process – together with

mechanized production
- SPC applied – to obtain less generation of scrap / rework and
production cost per unit lo
- E.g. auto parts, electronic components, pharma)

4. TQM paradigm

- Mass production + SQC – focus on customer + supplier

- Production lines may be same, but customer plays a part in product
definition, creation and performance evaluation.
- Key tenets:
o Employee involvement, empowerment, customer focus,
continuous improvement, top management commitment,
training, team work, -- result – high quality product, low cost,
faster delivery
o Rework, scrap low
o Customer tells, firm produces – reactive strategies

5. Techno craft paradigm

- Frontier of quality? – requires high level of product and process
flexibility, requires integration of man-machine (autocad etc).
- Each unit is designed and say customer built (software, apparel, auto
etc.)
Types of Quality
Quality of design, Quality of conformance, quality of performance

1. Quality of design:
- Focus on development of products that are suited to customer needs
at a given cost
- QoD begins with consumer response, sales call analysis and leads
to determination of product that meets customer requirement
- This is followed by development of adequate specs.
- This process demands effective cross-pollination of ideas among
marketing, sales, services, manufacturing, R&D, Customer sales.
Service call analysis is really the heart of the process.
- Customer – prognosis of needs present and future.
- sales calls – Idea of how people purchase.
- Service calls – deals with problems users have with the product
performance.
2. Quality of conformance
- Refers to the extent to which a firm and its suppliers can produce
products with a predictable degree of uniformity and dependability,
at a given cost in keeping with quality requirement determined in the
QoD study.
- Once the specs are decided at QoD stage, it is followed by
organization installing a Kaizen (continuous improvement) process.
3. Quality of Performance:
- Studies focus on determining how the Quality characteristics
determined in QoD (improved and innovated) and Quality of
performance are performing in the market place.
- The major tools used are study of after sales service, sales call
analysis
- These tools evaluate why consumers LIKE or DISLIKE a product.

Bring here the chart of Quality Evolution (p9 of written draft)

Business Process Reengineering:

Why?
Today, ever increasing competition makes it imperative for
companies to respond, and react to customers, suppliers
speedily.

BPR and IT together can exploit each other’s capabilities leading

to a general improvement.
BPR advocates keeping the design of process flexible, for easy
modification (CPI.)

Philosophy of BPR – eliminated wasteful activities.

o In manufacturing and non-mfg. environments
(Offices)
BPR focus helps with “focus on customer”
o Prevent errors – rework less
o Cost decreased with higher productivity thru,
decreased cycle time
o Adaptability / flexibility

Business Process – Pre-industrialization:

o One man shops – small customer base – concept developed to

accomplish a task only – processes neglected, ignored.

o Demand / population then grew – as a result organization

grew, and responsibilities and processes were divided (Labor
etc.), giving rise to specialized functions.

o Factories began appearing - 80-20 Men-Machine ratio

o “Taylorism” appeared when business grew further

o Era of Post industrialization

o He brought in “Systems Approach” – Scientific Management

o Systems approach – FW Taylor stressed on

 Division of Labor / Specialization / Functional

Responsibilities / with some checks and balances
 With functional responsibilities “little pools of
bureaucracy grew”, which were self or inward focused.
 Functional silos – e.g. Marketing / production /
engineering / materials / quality / finance
 Along the way FOCUS ON External CUSTOMER WAS
LOST, and its impact unseen – not measured.
 This gave rise to “Conflicts” – as to which is important –
Production process or Business Process.
 The thinking was BP – no direct contribution to output –
Mass production was important.
 The business was on a ‘PUSH” mode – “Anyway goods
were sold!!” (Sellers market)
 Belief that BP do not cost organization as much as
production process.
 No gains achieved thru BP
 It was like an “Albatross” on the neck (Deck)
 Processes – were antiquated, ineffective, burdened,
time-consuming.
 WHAT ARE BUSINESS PROCESSES?

• A Business Process can be defined as a set of logically

related tasks performed to achieve a defined business
outcome.
o E.g. recruiting, or 5 year strategic plan.
o A Set of processes forms a Business System, i.e. the
way in which a BU or a collection of units carries out
its business.

• It can be represented as a Customer-Supplier Chain with

internal departments, external customers and suppliers as
links
o Importance of accountability

• BP can be of various types like inter-organization, inter-

personal and inter-functional.
o Defining tasks (responsibilities) accountability, each
link a supplier for the next customer.

• Inter-organizational BP takes place between 2 or more

business organizations or business units of the same
organization.

• Inter-functional BP takes place within the organization but

across several functions or divisions in the organization
o E.g. new product planning, production planning,
recruiting, after-sales service, manpower planning,
HR training, customer need analysis etc.

• Inter-personal BP are those which involve tasks within and

across the small work groups within the organization

• 3 characteristics:
o Receives inputs
o It yields a definite result – Product or service
 o A process is independent of functional areas. Can
span multiple functions. (both external and internal)
• BPR – Levels of Maturity stages from Chaos to optimized
(TQM) – Draw a Pyramid

o Chaotic (initial period)

 Things in total disarray.
 No formal procedures or management mechanisms to
ensure procedures are followed.
 Designed to increase speed only (Info. Tech)
 Obviously, only hackneyed processes speeded up! This
logic was used to avoid IT
 Focus on external factors not considered
 They were supposed to be not “dynamic”

o Repeatable Processes (Elementary)

 Process no documented
 Individuals dependent
 Brief successors the modalities (what happens when he
resigns without telling colleagues the modalities)

o Defined Processes
 Here processes are not dependant on individuals, some
modalities established, input-output of procedures
documented,
 So, when someone leaves, the procedures can be
executed.

o Managed Processes
 Processes / procedures not only defined / documented,
but “measured and quantified.
 Processes have customer related measurement, targets,
known cycle times, formalized change procedures etc.

o Optimized
 What BPR aims for can reach this stage only if they are
understood and redesigned for optimization – i.e.
Quest: A stage where continuous process
improvement (CPI) is possible (TQM) – never
ending.

TODAY 50% of organizations are in Stage 1. !!!

FIVE STAGES OF MATURITY MODEL –
 CHECKLIST ON WHY FOCUS ON BPR

• Antiquated and ineffective BP have made organizations were

bureaucratic
• Inefficient BP hamper an organization’s ability to compete
• BPR aims at re-engineering these processes to make them time-
effective, cost-efficient and customer oriented
• BPR thus improves the Quality and productivity of an organization to
enhance its ability to compete
• BPR pass through 5 stages of increasing maturity. Higher levels of
maturity signify greater stability and efficiency of the process.
• The 5 levels of the stages of Maturity Model are “Chaotic,
Repeatable, Defined, Managed and Optimized”
• TQM enables an organization to have the appropriate culture for
continuous process improvement, which is a prerequisite for a
process to be in level 5.

o Corresponding to the above

o Early stages, progressive BPR stages

 There were functions / departments working

independently, no clear modalities
 Then came about importance on consistency of
whatever you are doing, followed by
 Accountability of process consistency (deviations
explained) – beginning of change control
 Documentation then took shape (earlier process was by
practice and not on procedural documentation)
 Documentation led to “defined process” with control
mechanisms established, KRAs established.
 Followed by a CPI initiatives
 Measurement was practicable on
• Quality, Productivity time, Cost effectiveness)
dh
 How do we go about redesigning a BPR?
• Corporate Strategy
• Develop a business vision and the objectives of processes
 Earlier, jut used to remove bottlenecks / inefficiencies
 Now, cost reduction time compression, enhance quality of
output.
• E.g. customizable products rather than stand
alone products, requires cross functional
integration (Design-engineering – production –
marketing – customer)
• Improve communication between the above
departments.
• Select processes to be redefined
 Priority established or critical success factor
 Time availability, criticality, significant cost reduction,
sales increase.
• Understand and Measure existing process –
 Fix parameters
 Baseline for future and current success
 Process map – flow chart
 ERD (Entity relationship Diagram)
 “Dependency analysis – Product to customer”
 Lay down process modalities and evaluate the means for
measuring efficiency
• Redesign the process & build prototype of the new process
 Use ‘tools and techniques’
 Design ‘case’ products primarily to draw process models
 Use ‘computer codes’
 Look into earlier “designed” – stores in PC. Just modify
 Do “what if” analysis (alternates AMAP)

• Design metrics for measurement

 Establish SPC – benchmark – productivity
• Stabilize / optimize
 Involves a constant redesign of process till “they
stabilize. After stabilization, constant monitoring and
scanning to be done to find use of new technology – can
they be fitted in existing product – IT or manual methods.
• CPI (Kaizen)
 Happens when above cycle is “institutionalized”

BPR – Info. Engineering – TQM :

 Inter-connected, inter-related, overlaps one another

QUALITY MEASUREMENT IN MANUFACTURING

What is Quality?

Quality is the performance of the product as per the commitment

made by the producer to the consumer .The performance of the
product relates to ultimate functions and services which the
final product must give to the consumer . A product is a quality
product only when it satisfies the various criteria for its
functioning. In addition to physical criteria, there is also a
service and time dimension to quality. The same quality of
physical should be available over a reasonable length of time.
Thus, time is also an important aspect of quality.
Quality is either a written or non written commitment to a known
or unknown consumer in the market. Since the market or the
market target itself, is decided by the company that is to which
type of consumer to cater to quality is a strategic marketing
decision taken by the company at the outset .It can be said that
the quality of products to be decided is a corporate level
decision of a corporation. It is based on various marketing
considerations, production constraints, manpower or personnel
constraints, and equipment or technology constraints. The
decisions regarding quality are not really in the realm of one
functional manager as this involves overall strategic decisions
for the running of the business of a corporation
Once such a strategic decision regarding quality is taken, it is
the job of all functional managers, including the production and
operations manager, to see that such strategic objectives and
goals are implemented.
In this, the purchasing department has as much contribution to
make to the quality as the production department that produces
the goods, and the warehousing department that stores the
goods, and the transport department that ensures the proper
shipment of goods to the customer.
Consumers judge quality every time they make a purchase.
Quality does not necessarily mean ‘the best that can possibly
produced’ because high cost would then make product
unsaleable. Organizations of all types and sizes have come to
realize that their main focus must be to satisfy their customers.
For this they have to implement certain quality measurement
techniques. The minimum standard demanded by consumers is
that the product should ‘work’ - that it is fit for the purpose
intended.
A washing machine that does not operate, or a clothes line that
breaks will be of no value to consumers whatever the price,
Beyond this minimum quality level, consumers will expect more
if they pay a higher price. Quality can also be assessed in terms
of the original specifications for the product. When designing a
product or introducing a new service a firm will specify certain
quality standards, such as exact size, weight, performance
standards, reliability, customer service times and so on.
Advantages:

Easier to create customer loyalty.

Saves on costs associated with customer complaints, for
example, compensation, replacing defective products and loss
of consumer goodwill
Longer life cycles
Less advertising necessary
Higher price- a price premium- could be charged for such goods
and services.

Techniques.
Effective quality control involves three stages.

1. Prevention: This is the most effective way of improving

quality. Quality should be designed into the product.
2. Inspection: Traditionally the most important stage, however, it
is very expensive. It can be reduced by ‘zero –defect’
manufacturing.
3. Correction & Improvement: This involves not only correction
of the faulty product but also the correction of the process due
to which the product has rendered faulty.
Cost of quality
Quality management is not only concerned with maintaining the
quality characteristics of a product but also with doing the same
at least cost. There are basically three categories of cost of
quality.

Cost of appraisal
These are cost of inspection, testing and such checking
operations are necessary to maintain the product quality. This
includes the cost of quality, and also the cost of monitoring and
control.

Costs of prevention
These are the costs to prevent the production of bad quality
output. These include the cost of activity such as quality
planning which tries to ensure that proper precautions have
been taken to avoid wrong sampling plans being made or bad
quality of raw materials entering into plant or improper methods
and processes being followed in the plant.

Costs of failure
In spite of prevention and appraisal, there will still be losses due
to rejects, reworks, spoilage, etc. to some extent. These, as well
as the costs of attending to customer complaints and providing
product service, are included under category of costs of failures.
The costs of quality can be analyzed in two different ways:

1.
Category to category comparison:
Comparing the relative amounts spent on each of the above
mentioned cost categories, i.e. how much is spent on planning?
How much on appraisal? And, how much on failure?
2.
Time to time comparison: for instance ,
comparing one quarter’s operation with the previous quarter’s
operation

Quality as a corporate strategy

Quality is an important dimension of production and operations

management of an organization. In today’s world, it is not
enough to produce goods or services in the right quantity and at
at the right time, but, it is also important to ensure that the
goods and services produced are of the right quality. The
consumer of the final product of a company needs a certain
quantity of products of a quality appropriate to his needs.
Without quality, the other dimensions of quantity and time have
little relevance.

Quality management ,which includes ensuring proper quality for

a company’s output is important not only for its survival but also
to expand its market or when it wants to enter into a new
product line and various other marketing ventures . If a
country’s products are to make an impact in the international
market, it is vital that the quality of its exports should be at par
with, if not better than, similar products for the other nations.
Quality management is thus an important long term decision
and a marketing strategy as well .for developing countries ,such
as India ,this aspect assumes greater importance since in the
international market they have to compete with products of
advanced countries with established brands and brand loyalties.
To make a dent on such a market, it might sometimes be
necessary for our products to be one step better than the
already established products of other advanced countries.
Looking at it from another angle, it is necessary that we try to
improve the quality of our products and services for even
domestic consumption, so that Indian consumers get better
service in terms of improved products. This is the social aspect
of quality.

The advantages of producing good quality products and

services are -:
Easier to create customer loyalty.
Saves on the costs associated with customer complaints.
For e.g:- compensation, replacing defective products and loss of
consumer goodwill.
Longer life cycles.
Less advertising may be necessary as the brand will establish a
quality image through the performance of the products.
A higher price- a price premium – could be charged for such
quality goods and services.
Quality can therefore be profitable.

Modern approaches to achieving quality

Total quality management (TQM)

This is not a technique; it is a philosophy of quality being

everyone’s responsibility. The aim is to make all workers at all
levels accept that the quality of the work they perform is
important. In addition, they should be empowered with the
responsibility of checking this quality level before passing their
work on to the next production stage. This approach fits in well
with the Herzberg principles of job enrichment.

TQM should almost eliminate the need for a separate quality

control department with inspectors divorced from the
production line itself.

TQM uses the concept of the internal customer. The internal

customer is the next department in the production process. If
the work from the previous processes below standard, then it
will be rejected - just as a customer would reject it. Each
department is therefore aiming to satisfy the next department
(the internal customer) by passing on the best quality products.
Every department is obliged to meet the standards expected by
its customer(s). These departmental relationships are
sometimes known as quality chains. All businesses can
therefore be described as a series of supplier and customer
relationships. TQM aims to cut the costs of faulty or defective
products by encouraging all staff to ‘get it right first time’. This
is in contrast to traditional inspected quality methods that
considered quality control as being a cost centre of the
business. Under TQM, if quality is improved and guaranteed
then reject costs should fall and the demand for the products
rises over time. However, TQM will only work effectively if
everyone in the firm is committed to the idea. It cannot just be
introduced into one section of a business of defective products
coming from other sections will not be reduced. The philosophy
requires a commitment from senior management to allow the
workforce authority and empowerment, as TQM will not operate
well in a rigid and authoritarian structure.

Benchmarking
The full title for benchmarking is ‘best practice benchmarking’. It
involves management identifying the best firms in the industry
and then comparing the performance standards - including
quality - of these businesses with those of their own business.
This comparison will identify areas of the business that need to
improve to meet the standards of quality and productivity of the
best firms.

Stages in the benchmarking process:

1. Identify the aspects of the business to be benchmarked. This
could be decided by interviewing customers and finding out
what they consider to be most important. For example, research
may reveal that the most important factors are reliability of the
product, speed of delivery and after· sales service. These are the
areas that the firm would first benchmark

2 Measure performances in these areas, for example reliability

records, delivery records and the number of customer
complaints

3 Identify the firms in the industry that are considered to be the

best. This process might be assessed by management
consultants or by benchmarking schemes operated by
government or industry organizations

4 Use comparative data from the best firms to establish the main
weaknesses in the business. These data might be obtained from
firms by mutual agreement, from published accounts, specialist
industry publications and contact with customers/ suppliers.
5. Set standards for improvement. These might be the standards
set by the best firms or they could be set even higher to create a
competitive advantage.
6. Change process to achieve the standards. This may require
nothing more than a different way of performing one task, but
more substantial change may be necessary.
7. Re-measurement. The change to the process need to be
checked to see if the new, higher standards are being reached.

Inspection For Quality - Pros & Cons

Quality inspection is very important, even though it is very
expensive.
Qualified engineers have to be used to inspect the quality of the
product.
Such checks can also result in damaging the product. For
example, dropping computers to see if they still work!

Weaknesses of Inspecting for quality

1. It is looking for problems and therefore is negative in its
culture. It can cause resentment amongst workers as the
inspector believes that he has been ‘successful’ when he finds
faults. In addition, the workers are likely to look upon inspectors
as management employees who are there just to check on
output and to find problems with the work. Workers may
consider it satisfying to get a faulty product passed by this team
of inspectors. This may create a high level of mistrust which is
unhealthy for the organization
2. The job of inspection can be tedious, so inspectors become
demotivated and may not carry out the tasks given to them
effectively
3. If checking only takes place at specific points in the
production process then faulty products may pass through
several production stages before being picked up. This could
lead to a lot of time being wasted finding the sources of the fault
between quality check points.

4. The main drawback is that it takes away from the workers the
responsibility for quality. As the inspectors have full authority
for checking products, the workers will not see quality as their
responsibility and will not feel that it is part of their task to
ensure that it is maintained.

Quality Assurance

Quality Control is about checking to ensure that the products

and services come up to an agreed standard.

Quality assurance is setting and agreeing those standards

throughout the organization and making sure that they are
compiled with so that customers’ satisfaction is achieved.
All the areas of the firm have to be taken into consideration,
such as

Product Design:
Will the product meet the needs of the customer?

Quality of Inputs:
Quality must not be let down by bought in components.

Production Quality:
This can be assured by TQM i.e. Total Quality Management.

Delivery Systems:
Customers need goods and services delivered at times
convenient to them

Customer Service including after sales service

Continued customer satisfaction will depend on the quality of
contact with customers with purchase.
 WORK STUDY & METHOD STUDY

Work study is a technique used in systematic examination of human

work in all its context leading to investigation of all the factors which affect
the efficiency / effectiveness, in order to effect improvement.

Method Study is defined as systematic recording and critical

examination of existing and proposed ways of doing work, as a means of
developing easier and more effective methods at reduced costs. (Sounds
familiar?)

Everyone needs to improve his / her SOL (standard of living) i.e. if quality,
quantity and distribution of G/S (goods and services) produced in a society
is continuously increased.

There are two ways of increasing the amount of G/S produced. One is to
increase employment, and the other to increase productivity. (Which one
will you prefer?) Both!

Higher productivity helps in raising General SOL due:

larger supplies of consumer / capital goods at lower costs / higher REAL

earnings (i.e. inflationary impact discounted), improvements in working
and living conditions, including shorter hours of work, and general
strengthening of economic foundations.

WS generally deals with improvement in working conditions: (to improve

productivity - of course) - certainly a cost is involved, but it will be worth it,
if it is compensated by more than adequate OUTPUT (making RoI feasible) -
so it has to have a measurement against convenience and inconvenience)

For example,

Housekeeping / Good design and layout of plant and office / decent

facilities (basically to reduce the effort and fatigue of workers and provide
better working conditions)

Adequate space (not crowded)

Comfortable seating / standing arrangements / good ambience, congenial
atmosphere / good lighting
Quicker reach to accessories / tools, free movement, spacing of work
hours (breaks in between) - reducing monotony of repeated work
Recreational facilities (of course after office hours), utilities (lunch room /
tea / snakes
Both W/M Study is involved in increasing the amount of G/S produced by
increasing productivity.

Thus an increasing in productivity could be due to higher output using the

same amount of input, OR EVEN LESSER INPUT than previously used.
So, an increase in production does not necessarily increase in productivity.

MS / WS objectives:
• improve process - procedures, improve factory, shop and work place
layout along with design of plant and equipment
• Economic human effort by reducing unnecessary movement and
fatigue - general improvement
• Overall improvement in Environment.

Sequence of Method Study

MS being a systematic and logical investigation has certain defined

sequence:
• SELECT / RECORD / EXAMINE / DEVELOP / DEFINE / INSTALL /
MAINTAIN
• (some explanation for each given below --)

• 1. Select:

o The work to be studied it has 3 considerations:

o Economic / Technical / Human
 Economic –
• Problems like bottlenecks in production, bulk
material movement, repetitive type of work
 Technical –
• Do you have adequate technical knowledge first,
to carry out the study. The study should also be
technically and economically feasible.
 Human:
• Human reactions are most difficult to foretell. So
early MS should be on topics which bring
confidence and gain cooperation for subsequent
studies.
• Are we doing something which provokes negative
reaction - especially you tell someone that "What
he has been doing so far needs to be changed".
• 2. Record:
o Success of MS depends on carefully and accurately recorded
facts of an existing process. Don't omit even minor details.
o May be here instead of cumbersome recording by writing
sequence, one can use Symbols and Charts. Process Chart /
Symbols classify all activities taking place in any industry.
Given below are symbols to depict each activity.
o Operation
 Indicates the main steps in process, method or
procedure. It takes the material, component or service a
step further towards completion.
o Inspection
 Indicates an examination for quality and check for
quantity.
 Can be eliminated, if systems and operations are
established quality-proof.
 Saves inspection costs.
o Transport
 Indicates the movement of workers, materials
equipment from one place to another place.()normally
considered a Non-Value adding activity, unless
otherwise proved, it is essential.
o Delay
 Indicates a break in the sequence of performance of a
process. Delay means WAITING -- while you wait
(Inventory or any asset including human asset) incurs
costs, and to that extent meeting Customer Response
Time is less possible.
o Stores
 Indicates a controlled storage area in which material is
received into ir issued from a particular location under
requisition (you have been told enough about all types
of requisitions - Indents for procurement -- Requisitions
for sampling, requisitions for issue for production -- All
requisitions should have adequate approval and
authority as stipulated in Company Manuals /
Procedures). Store indicates a combined activity of
operation and inspection.
• 3.Critical Examination
o Subject each activity to a systematic and progressive series of
questions.
o Those in which something is actually happening to the work
piece or those in which material is either in storage or
suffering a delay.
 o Those in which something is actually happening could be
Make Ready Activity (which involves preparing the material or
work piece for further processing - Transportation or
Inspection Symbols.)
o Do Activity (essentially an operation taking a work piece for
completion -- e.g. conversion, change in shape, chemical
composition or physical properties), and
o Put Away Activity ( moving the workplace away from a
machine to another workplace - represented by Transportation
and Inspection symbols).
o OBVIOUSLY, one should increase Do activities, and reduce Put
away and Make Ready activity. Because, only do activities are
productive.
o For Critical Examination, take the help of 5 W and 1 H ( I must
have bored you all enough on this).
o Use these friends to find answers for
 Purpose (What is done etc),
 Place,(Where),
 Sequence, (When and Why)
 Person, (Who& Why)
 Means (How)
 Why ( basic questioning, Ask Why 5 times.
• Some primary & some secondary questions.
• 4. Develop
o Asking the Right question you can find half the answer.
o Ask the secondary questions like after What?
o Why -- correct answers to the last question is the basic
prerequisite for development. e.g. Purpose:
o What is done (Primary),
o Why is it done,
o what else should or might be done,
o PLACE:: where is it done, why is it done here, were also might
it be done> where should it be done, etc.)
• 5. Define
o Written Standard Practice (Standard Operating Procedures)
in simple terms and definition is the next step.
o A WSP , or SOP contains details of tools and equipments,
general operating conditions, method description and a
diagram of workplace layout, or
o Merely Sequence (Steps) of activities in a procedural form.
• 6. Install
o The improved new method by gaining acceptance of all
concerned, approval for change. Gain acceptance of change
by involved workers and their representatives, maintain close
 contact with the progress of job until targeted performance is
obtained. And lastly,
• 7. Maintain
o The new process, and do not allow it to slip back into old
methods or introduce external elements.
o Movements of elements layout and tools required must be
clearly specified beyond risk of misinterpretation.
o (Specifying Requirements into the new method -- and its
importance)
o The work study department must act as an external control for
attaining the improved method although it is a primary
responsibility of the connected Department to do so.

Finally,

Could this new method be applicable to some other operations? So let

others know about it, and if they can find a way to use this new method in
their own respective work areas or workplace, do so.

THIS IS FOLLOWED BY WORK MEASUREMENT –

to compare the efficiency of alternative methods. (AGAIN, Cost, Delivery,
Quality & Service, of course TIME COMPRESSION).

Bring here metrics of SC.

Or, see the other PPP
JA 4-2-06 - Stores

Quality Circles – X Functional Pilot Projects

QC
Composition: - Voluntary Group – 3-4 ideal
Problem Solving Group – Group selects a problem and analyse
Group usually from within one Section / Department
Successful if well planned and supported by Management and
corresponding training where necessary can be provided. (especially
in TQM techniques/tools)
(IIMM can organize one for Stores as required.)
Benefits : Process refined, measurable savings, improvement in the
attitudes and behavior of members.
Improves members personal capabilities, enhances his skills, better
relationship and interaction with others.
Even shy persons becomes outgoing
Member becomes aware of supervisors problems, burdens and
demands. Negative attitudes disappear.
Increases mutual respect of Managers & workmen
Reduces conflicts stemming from work environment. Removes
frustrations.
Involvement in the process encourages innovative approach.
Better appreciation of “Total Quality” concepts, with focus on ultimate
customer.
Normally, there are no “rewards” for this voluntary group. But if
associated with specific Co. announced Cost Improvement
Programs” measurable improvements and a % of potential savings
Identified and implement able can be considered.
Over a period of time, when “fatigued” different X functional projects
can be identified and assigned to selected group.
-
contd – page 2

Page 2

X Functional – Pilot Projects

Team – How many ? depends on problem analyzed – but not more

than 5 or 6
Focus : Issues relatively important, and relevant to either
Internal/External Customers – process related
Membership: Take employees who are influencers among peer
group – as ambassadors for total quality.
Voluntary requests are okay, with obvious advantages, but essential
and practical if right people rather than wrong people, no matter how
enthusiastic.
Resources: Admin. And other necessary resources shd be made
available to complete the task. Time, experimental resources, trial
costs. Etc.
Guidance : Mentoring from Sr. manager, to break any logjams,
provide political “air cover”, ensure access to senior people.
Freedom: freedom/ licence to experiment should be provided,
challenge the “sacred cow” as it were; otherwise it may end in
frustration.
Task: Realism vs challenge – task shd be realistic- e.g. even if one
that had been attacked for several years w/o success, vs. some
challenge thrown, and some degree of difficulty. Task too easy
without motivation of learning and solving shd be avoided. Should be
able to complete the task say within 6 months, and project time
should not be too lengthy.
Significant payoff: Result should be significant – otherwise challenge
will be lacking.
Celebrate real success only. A token appreciation.
Make sure the learnings is shared with others , and process are
revised, and new standards put in place. Sharing helps other groups,
functional to sort their problems in a similar manner.

Contd.

Page 3 QC

Feedback : Pilot team to keep management abreast of status and

management in turn – where they stand, provide guidance and help –
what the leaders think about their work, keep motivating. Leaders
should be visible to the team, capturing commitment, encouraging
them.

Root Cause Analysis : Members should be encouraged to go to the

root cause of the problem, keep asking Why, Why, Why several times
Solutions to be propagandized so that similar problems could use the
methods used. New process to be standardized for consistency,
until further improvement (continuous improvement) is popularized.

Membership: 3-4 if within a functional area. If involves cross

functional group, max. 6, one or two from each function with max. 2
from the problem related function.

Rewards: Can be offered, if associated with company announced

Cost Improvement or Suggestion Scheme programs.