UNIT I

INTRODUCTION TO QUALITY MANAGEMENT

INTRODUCTION

Today’s organization can gain importance on their products and services

embedded with quality .The quality tentacles could be seen everywhere in the
organization which is ultimately called as “Total Quality Management”. Customer is in
the fore front of the Total Quality Management process because the entire exercise is
focused towards customer satisfaction ultimately ending up with customer delight. The
Total Quality Management helps in shaping for the future. This unit deals with Quality
Management – Definitions, TQM framework, Benefits, Awareness and Obstacles,
Quality – Vision, Mission and Policy Statements, Customer Focus – Customer
Perception of Quality, Translating needs into requirements, Customer retention,
Dimensions of Product and Service Quality, Cost of quality.

LEARNING OBJECTIVES

Upon completion of this unit, you will be able to:

• Have a feel of Quality

• Get a framework on TQM
• Get an introduction on vision
• Understand the indispensability of the customer
• Identify the dimensions of product and service quality
1.1 QUALITY MANAGEMENT – DEFINITIONS

Principles and Philosophies of Quality Management

Quality management is becoming increasingly important to the leadership

and management of all organisations. It is necessary to identify Quality
Management as a distinct discipline of management and lay down universally
understood and accepted rules for this discipline.

The ISO technical committee working on the ISO9000 standards had

published a document detailing the quality management principles and
application guidelines. The latest revision (version 2000) of ISO9000 standards
are based on these principles.

Definition of Quality Management Principle

"A quality management principle is a comprehensive and fundamental

rule / belief, for leading and operating an organisation, aimed at continually
improving performance over the long term by focusing on customers while
addressing the needs of all other stake holders".

The eight principles are:

1. Customer-Focused Organisation
2. Leadership
3. Involvement of People
4. Process Approach
5. System Approach to Management
6. Continual Improvement
7. Factual Approach to Decision Making and
8. Mutually Beneficial Supplier Relationships.

Now let us examine the principles in detail.

Principle 1 - Customer-Focused Organisation

"Organisations depend on their customers and therefore should

understand current and future customer needs, meet customer requirements and
strive to exceed customer expectations".
Steps in application of this principle are:

1. Understand customer needs and expectations for products, delivery,

price, dependability, etc.
2. Ensure a balanced approach among customers and other stake holders
(owners, people, suppliers, local communities and society at large) needs
and expectations.
3. Communicate these needs and expectations throughout the organisation.
4. Measure customer satisfaction & act on results, and
5. Manage customer relationships.

Principle 2 - Leadership

"Leaders establish unity of purpose and direction of the organisation.

They should create and maintain the internal environment in which people can
become fully involved in achieving the organisation's objectives."

Steps in application of this principle are:

1. Be proactive and lead by example.

2. Understand and respond to changes in the external environment.
3. Consider the needs of all stake holders including customers, owners,
people, suppliers, local communities and society at large.
4. Establish a clear vision of the organisation's future.
5. Establish shared values and ethical role models at all levels of the
organisation.
6. Build trust and eliminate fear.
7. Provide people with the required resources and freedom to act with
responsibility and accountability.
8. Inspire, encourage and recognise people's contributions.
9. Promote open and honest communication.
10. Educate, train and coach people.
11. Set challenging goals and targets, and
12. Implement a strategy to achieve these goals and targets.

Principle 3 - Involvement of People

"People at all levels are the essence of an organisation and their full
involvement enables their abilities to be used for the organisation's benefit".
Steps in application of this principle are:

1. Accept ownership and responsibility to solve problems.

2. Actively seek opportunities to make improvements, and enhance
competencies, knowledge and experience.
3. Freely share knowledge & experience in teams.
4. Focus on the creation of value for customers.
5. Be innovative in furthering the organisation’s objectives.
6. Improve the way of representing the organisation to customers, local
communities and society at large.
7. Help people derive satisfaction from their work, and
8. Make people enthusiastic and proud to be part of the organisation.

Principle 4 - Process Approach

"A desired result is achieved more efficiently when related resources and
activities are managed as a process."

Steps in application of this principle are:

1. Define the process to achieve the desired result.

2. Identify and measure the inputs and outputs of the process.
3. Identify the interfaces of the process with the functions of the
organisation.
4. Evaluate possible risks, consequences and impacts of processes on
customers, suppliers and other stake holders of the process.
5. Establish clear responsibility, authority, and accountability for managing
the process.
6. Identify internal and external customers, suppliers and other stake holders
of the process, and
7. When designing processes, consider process steps, activities, flows,
control measures, training needs, equipment, methods, information,
materials and other resources to achieve the desired result.

Principle 5 - System Approach to Management

"Identifying, understanding and managing a system of interrelated

processes for a given objective improves the organisation's effectiveness and
efficiency."

Steps in application of this principle are:

 1. Define the system by identifying or developing the processes that affect a
given objective.
2. Structure the system to achieve the objective in the most efficient way.
3. Understand the interdependencies among the processes of the system.
4. Continually improve the system through measurement and evaluation,
and
5. Estimate the resource requirements and establish resource constraints
prior to action.

Principle 6 - Continual Improvement

"Continual improvement should be a permanent objective of the

organisation."

Steps in application of this principle are:

1. Make continual improvement of products, processes and systems an

objective for every individual in the organisation.
2. Apply the basic improvement concepts of incremental improvement and
breakthrough improvement.
3. Use periodic assessments against established criteria of excellence to
identify areas for potential improvement.
4. Continually improve the efficiency and effectiveness of all processes.
5. Promote prevention based activities.
6. Provide every member of the organisation with appropriate education
and training, on the methods and tools of continual improvement such as
the Plan-Do-Check-Act cycle, problem solving, process re-engineering,
and process innovation.
7. Establish measures and goals to guide and track improvements, and
8. Recognise improvements.

Principle 7 - Factual Approach to Decision Making

"Effective decisions are based on the analysis of data and information."

Steps in application of this principle are:

1. Take measurements and collect data and information relevant to the

objective.
2. Ensure that the data and information are sufficiently accurate, reliable and
accessible.
3. Analyse the data and information using valid methods.
4. Understand the value of appropriate statistical techniques, and
 5. Make decisions and take action based on the results of logical analysis
balanced with experience and intuition.

Principle 8 - Mutually Beneficial Supplier Relationships

"An organisation and its suppliers are interdependent, and a mutually

beneficial relationship enhances the ability of both to create value."

Steps in application of this principle are:

1. Identify and select key suppliers.

2. Establish supplier relationships that balance short-term gains with long-
term considerations for the organisation and society at large.
3. Create clear and open communications.
4. Initiate joint development and improvement of products and processes.
5. Jointly establish a clear understanding of customers' needs.
6. Share information and future plans, and
7. Recognise supplier improvements and achievements.

1.2 TQM FRAMEWORK, BENEFITS, AWARENESS AND OBSTACLES

Total Quality Management

FIGURE 1.1
 For organizations to survive and grow in today's challenging marketplace
they need true commitment to meeting customer needs through communication,
planning and continuous process improvement activities. Creating this culture
change can improve the products and services of your organization as well as
improve employee attitudes and enthusiasm. All of these help with the ultimate
goal of improved quality, productivity and customer satisfaction which is an
important competitive advantage in today's marketplace.

Total Quality Management (TQM) is a management strategy aimed at

embedding awareness of quality in all organizational processes. TQM has been
widely used in manufacturing, education, government, and service industries, as
well as NASA space and science programs. Total Quality provides an umbrella
under which everyone in the organization can strive and create customer
satisfaction. TQ is a people focused management system that aims at continual
increase in customer satisfaction at continually lower real costs.

Definition

TQM is composed of three paradigms:

• Total: Organization wide

• Quality: With its usual Definitions, with all its complexities (External
Definition)
• Management: The system of managing with steps like Plan, Organize,
Control, Lead, Staff, etc.

As defined by the International Organization for Standardization (ISO):

"TQM is a management approach for an organization, centered on quality, based

on the participation of all its members and aiming at long-term success through
customer satisfaction, and benefits to all members of the organization and to
society."

In Japan, TQM comprises four process steps, namely:

1. Kaizen – Focuses on Continuous Process Improvement, to make processes

visible, repeatable and measurable.
2. Atarimae Hinshitsu – The idea that things will work as they are supposed
to (e.g. a pen will write.).
3. Kansei – Examining the way the user applies the product leads to
improvement in the product itself.
4. Miryokuteki Hinshitsu – The idea that things should have an aesthetic
quality (e.g. a pen will write in a way that is pleasing to the writer.)
TQM requires that the company maintain this quality standard in all aspects of
its business. This requires ensuring that things are done right the first time and
that defects and waste are eliminated from operations.

Origins

"Total Quality Control" was the key concept of Armand Feigenbaum's

1951 book, Quality Control: Principles, Practice, and Administration, a book that was
subsequently released in 1961 under the title, Total Quality Control (ISBN 0-07-
020353-9). Joseph Juran, Philip B. Crosby, and Kaoru Ishikawa also contributed
to the body of knowledge now known as TQM.

The American Society for Quality says that the term Total Quality
Management was first used by the U.S. Naval Air Systems Command "to
describe its Japanese-style management approach to quality improvement." This
is consistent with the story that the United States Navy Personnel Research and
Development Center began researching the use of statistical process control
(SPC); the work of Juran, Crosby, and Ishikawa; and the philosophy of W.
Edwards Deming to make performance improvements in 1984. This approach
was first tested at the North Island Naval Aviation Depot.

In his paper, "The Making of TQM: History and Margins of the Hi(gh)-
Story" from 1994, Xu claims that "Total Quality Control" is translated incorrectly
from Japanese since there is no difference between the words "control" and
"management" in Japanese. William Golimski refers to Koji Kobayashi, former
CEO of NEC, being the first to use TQM, which he did during a speech when he
got the Deming Prize in 1974.

TQM in Manufacturing

Quality assurance through statistical methods is a key component in a

manufacturing organisation, where TQM generally starts by sampling a random
selection of the product. The sample can then be tested for things that matter
most to the end users. The causes of any failures are isolated, secondary
measures of the production process are designed, and then the causes of the
failure are corrected. The statistical distributions of important measurements are
tracked. When parts' measures drift into a defined "error band", the process is
fixed. The error band is usually a tighter distribution than the "failure band", so
that the production process is fixed before failing parts can be produced.

It is important to record not just the measurement ranges, but what

failures caused them to be chosen. In that way, cheaper fixes can be substituted
later (say, when the product is redesigned) with no loss of quality. After TQM
has been in use, it's very common for parts to be redesigned so that critical
measurements either cease to exist, or become much wider.

It took people a while to develop tests to find emergent problems. One

popular test is a "life test" in which the sample product is operated until a part
fails. Another popular test is called "shake and bake", in which the product is
mounted on a vibrator in an environmental oven, and operated at progressively
more extreme vibration and temperatures until something fails. The failure is
then isolated and engineers design an improvement.
A commonly-discovered failure is for the product to disintegrate. If fasteners fail,
the improvements might be to use measured-tension nutdrivers to ensure that
screws don't come off, or improved adhesives to ensure that parts remain glued.
If a gearbox wears out first, a typical engineering design improvement might be
to substitute a brushless stepper motor for a DC motor with a gearbox. The
improvement is that a stepper motor has no brushes or gears to wear out, so it
lasts ten or more times as long. The stepper motor is more expensive than a DC
motor, but cheaper than a DC motor combined with a gearbox. The electronics
are radically different, but equally expensive. One disadvantage might be that a
stepper motor can hum or whine, and usually needs noise-isolating mounts.

Often, a "TQMed" product is cheaper to produce because of

efficiency/performance improvements and because there's no need to repair
dead-on-arrival products, which represents an immensely more desirable
product.

TQM and contingency-based research

TQM has not been independent of its environment. In the context of

management accounting systems (MCSs), Sim and Killough (1998) show that
incentive pay enhanced the positive effects of TQM on customer and quality
performance. Ittner and Larcker (1995) demonstrated that product focused TQM
was linked to timely problem solving information and flexible revisions to
reward systems. Chendall (2003) summarizes the findings from contingency-
based research concerning management control systems and TQM by noting that
“TQM is associated with broadly based MCSs including timely, flexible,
externally focused information; close interactions between advanced
technologies and strategy; and non-financial performance measurement.”

TQM, just another Management fad?

Abrahamson (1996) argued that fashionable management discourse such

as Quality Circles tends to follow a lifecycle in the form of a bell curve. Ponzi and
Koenig (2002) showed that the same can be said about TQM, which peaked
between 1992 and 1996, while rapidly losing popularity in terms of citations after
these years. Dubois (2002) argued that the use of the term TQM in management
discourse created a positive utility regardless of what managers meant by it
(which showed a large variation), while in the late 1990s the usage of the term
TQM in implementation of reforms lost the positive utility attached to the mere
fact of using the term and sometimes associations with TQM became even
negative. Nevertheless, management concepts such as TQM leave their traces, as
their core ideas can be very valuable. For example, Dubois (2002) showed that
the core ideas behind the two management fads Reengineering and TQM,
without explicit usage of their names, can even work in a synergistic way.

Benefits of TQM

TQM as a slogan has been around since 1985. TQM provides a management
system, using various combinations of tools that have been in existence for much
longer. Each tool has its own use, with benefits that follow. TQM leads to a
synergy of benefits.

• Through the application of TQM, senior management will empower all

levels of management, including self management at worker level, to
manage quality systems.
• Outlined below are some advantages to be gained by a hotel, from the use
of TQM. These are split into the five key areas of TQM.
• Continuous Improvement. People wish to improve themselves and get a
better lifestyle. If the desire for individual improvement is transferred to
systems within the workplace, then these systems will improve.
• Management can, at times, be a restraint to innovation through relying on
historical systems. This will result in "always do what you have always
done and you will always get what you have always got".
• A good chef will know how best to prepare and present food. If given the
freedom to innovate then the standard of food will improve.
• When mistakes are made by staff, it is rarely through a desire to make a
mistake. The system used is at fault. With departments constantly striving
for improvement, hotel systems will improve, leading to reduced internal
costs and a better service for customers.
• Multifunctional Teams. Within the hotel, departments are customers and
suppliers for each other. A waiter is the chef's supplier giving information
on what has been ordered from the menu including any special requests
about how the food should be prepared (medium, well done etc). When
the food is ready, the roles are reversed. The chef becomes the waiter's
supplier providing the food.
• If the hotel's organization is structured in such a way, that people in
different departments work with each other to solve problems as a team,
 traditional inter departmental barriers will be removed. Inter
departmental communication on a day to day basis is essential for
effective management.
• Multifunctional teamwork allows the problems and requirements of each
department to be passed on at worker level, throughout the hotel. This
will lead to a better understanding of how the hotel systems work, by all
employees.
• Individuals will work with each other identifying causes of problems
rather than blaming each other for the results of a problem. This will
remove the blame culture.
• Reduction in Variation. Systems are influenced by many elements which
cause variation. For example, as new staffs are employed, they will do
their jobs in a different way to previous staff. This can lead to a change in
the service provided by the hotel. If such influences can be minimized,
then standards of service can be maintained.
• This can be achieved by documenting systems. Giving workers the
opportunity to own their processes by letting them do this documentation
boosts morale. Also, the documentation will accurately reflect what is
actually done rather than what management thinks is done. Initially this
will lead to guests receiving a known standard of service which will result
in repeat business.
• Once the standard is stabilized, changes made to improve the service can
be measured and directly linked to the improvement made.
• Supplier Integration. By involving your suppliers directly with your staff,
two way communications can be established. Your chef can explain the
standard of food required. Your supplier can explain the difficulties in
supplying such food. Any problems that arise can be solved jointly, using
your knowledge of hotel systems, the chef's knowledge of food and the
suppliers’ expertise in supply systems.
• This prevents waste through returned goods for the supplier. Expense
through:
• Obtaining replacements from another supplier.
• A drop in service by not being able to provide what was intended.
• Education and Training. Through education, management and staff are
given the tools to achieve all the above. Education provides for guided
innovation from all levels. Training, which is a cost, shows a commitment
by management to:
• Individual staff self improvement, which is a motivator.
• TQM.
• Summary. Staff will collectively provide continual improvement of hotel
systems. By working together, communication/departmental barriers will
be broken down. The standard of service can be set, maintained and then
improved. Suppliers will be working with rather than working for the
 hotel. The standard of staff and management will improve through
education. The adoption of a new attitude to work, by everyone
embracing the ideas of TQM.

The primary, long-term benefits of TQM in the public sector include better
services, reduced costs and satisfied customers. Progressive improvement in the
management systems and the quality of services offered result in increasingly
satisfied customers.

In addition a number of other benefits are:

• observable including improved skills,

• morale and confidence among public service staff,
• enhanced relationships between governments and its constituents,
• increased government accountability and transparency and
• Improved productivity and efficiency of public services.
• A philosophy that improves business from top to bottom
• A focused, systematic and structured approach to enhancing customer's
satisfaction
• Process improvement methods that reduce or eliminate problems i.e. non
conformance costs
• Tools and techniques for improvement - quality operating system
• Delivering what the customer wants’s in terms of service, product and the
whole experience
• Intrinsic motivation and improved attitudes throughout the workforce
• Workforce is proactive - prevention orientated
• Enhanced communication
• Reduction in waste and rework
• Increase in process ownership- employee involvement and empowerment
• Everyone from top to bottom educated
• Improved customer/supplier relationships (internally & externally)
• Market competitiveness
• Quality based management system for ISO 9001:2000 certification

1.3 Quality – Vision, Mission and Policy Statements

Vision

SAP's vision for quality management is to consistently deliver high-quality

solutions focused on improving customer satisfaction.
Mission

The mission of quality management at SAP is to:

ƒ Research and develop new methods and standards

ƒ Proactively communicate and share knowledge
ƒ Apply the knowledge to enhance our products, processes, and services
ƒ Continually monitor and improve our performance against set targets
ƒ Strive for prevention of failure, defect reduction, and increased customer
satisfaction

Policy

Quality is the basic requirement for the satisfaction of our customers and the
resulting competitiveness and economic success of SAP. The Executive Board
dedicates itself to implementing and monitoring the following global quality
policy principles:

ƒ SAP strives to further intensify the close cooperation with its internal and
external customers and partners, and the performance-oriented
communication with its suppliers.
ƒ The continual improvement of our products, processes, and services
combined with innovation is at the center of our endeavors. For this
purpose, we strive to further optimize our organizational, operational,
and technical processes. Quality management supports the business-
oriented behavior of all parties involved.
ƒ Promoting employee satisfaction and quality awareness are major
managerial functions in the entire company.
ƒ Commitment, professional competence, and personal responsibility are
required from all SAP employees to achieve the goals based on the global
quality policy principles. Employees know the input requirements to
comply with quality in their area. Internal education is provided to help
SAP employees fulfill their tasks.
ƒ The quality goals based on this policy are regularly defined, implemented,
and monitored by the responsible parties within the framework of quality
management at SAP.
Honeywell Technology Solutions Lab

HTSL Vision

Be the premier growth company delivering unsurpassed value to Honeywell customers

by providing Innovative Total Solutions and Services enhancing the safety, security,
comfort, energy efficiency and productivity of the environment where they live, work and
travel.

HTSL Mission

Maximize the value and impact on Honeywell businesses and customers

by providing Technology Product and Business Solutions and Services setting
standards of world class performance.

HTSL Quality Policy

To delight our customers by providing six sigma quality total solutions,

demonstrating value and continuous improvement through competent and
disciplined professionals.

Quality is the basis for the long-term profitability and growth of K-Tron.
In the industries we serve, we strive to be every customer’s first choice quality
supplier.

Our quality policy is based on:

Customer Satisfaction

Our organization is focused on our customers. We are committed to

satisfying the needs and expectations of our customers and other interested
parties, including their economic, social and environmental concerns.

Continual Improvements

We are committed to implementing continual improvements to every K-

Tron process, product, service and quality management system.

Quality Involvement

Top management reviews our quality policies and objectives to ensure

their continual suitability and the framework of the quality management system.
We believe that they complement our mission, vision and strategy. The quality
policies, objectives, resource needs and effectiveness of the quality management
system are communicated and understood within the organization.
 Employee awareness, development, involvement and self-responsibility
are essential to the effectiveness of our quality management system. All
employees are challenged to “do it right the first time.”

Adherence to our quality management system is a permanent

commitment of all employees, suppliers and partners of K-Tron. We obligate
ourselves to maintain a quality management system in accordance with ISO
9001:2000.

Mission and Vision

Vision

• Lead Defense Acquisition to meet DoD's needs with excellence every time

Mission

• Identify and develop best acquisition policies and practices to promote

flexibility and take advantage of the global marketplace
• Integrate policy creation, training, and communication to quickly and
effectively deliver new policies and practices to the community
• Provide timely and sound acquisition advice to Federal leadership and
DoD personnel as the DoD Acquisition Ombudsman
• Assist the acquisition community to obtain the best quality weapons,
equipment, and services for war fighters
• Lead the DoD acquisition, technology, and logistics community in
recruiting, retaining, and training — the right workforce with the right
skills in the right place at the right time with the right pay
• Leverage use of technology to provide best possible tools to the
acquisition workforce
• Continuously assess the results of our efforts and make improvements

1.4 CUSTOMER FOCUS – CUSTOMER PERCEPTION OF QUALITY,

TRANSLATING NEEDS INTO REQUIREMENTS, CUSTOMER
RETENTION

Customer perception of Quality

There are three key elements of quality: customer, process and employee.
Everything we do to remain a world-class quality company focuses on these
three essential elements.
… the customer

Delighting Customers

Customers are the center of GE's universe: they define quality. They expect
performance, reliability, competitive prices, on-time delivery, service, clear and
correct transaction processing and more. In every attribute that influences
customer perception, we know that just being good is not enough. Delighting our
customers is a necessity. Because if we don't do it, someone else will!

...the Process

Outside-In Thinking

Quality requires us to look at our business from the customer's perspective, not
ours. In other words, we must look at our processes from the outside-in. By
understanding the transaction lifecycle from the customer's needs and processes,
we can discover what they are seeing and feeling. With this knowledge, we can
identify areas where we can add significant value or improvement from their
perspective.

FIGURE 1.2

...the Employee

Leadership Commitment

People create results. Involving all employees is essential to GE's quality

approach. GE is committed to providing opportunities and incentives for
employees to focus their talents and energies on satisfying customers.
All GE employees are trained in the strategy, statistical tools and techniques of
Six Sigma quality. Training courses are offered at various levels:
• Quality Overview Seminars: basic Six Sigma awareness.
• Team Training: basic tool introduction to equip employees to participate
on Six Sigma teams.
• Master Black Belt, Black Belt and Green Belt Training: in-depth quality
 training that includes high-level statistical tools, basic quality control
tools, Change Acceleration Process and Flow technology tools.
Design for Six Sigma (DFSS) Training: prepares teams for the use of statistical
tools to design it right the first time.

Quality is the responsibility of every employee. Every employee must be

involved, motivated and knowledgeable if we are to succeed.

Our Customers Feel the Variance, Not the Mean

Often, our inside-out view of the business is based on average or mean-based

measures of our recent past. Customers don't judge us on averages, they feel the
variance in each transaction, each product we ship. Six Sigma focuses first on
reducing process variation and then on improving the process capability.

Customers value consistent, predictable business processes that deliver world-

class levels of quality. This is what Six Sigma strives to produce.

GE success with Six Sigma has exceeded our most optimistic predictions.
Across the company, GE associates embrace Six Sigma's customer-focused, data-
driven philosophy and apply it to everything we do. We are building on these
successes by sharing best practices across all of our businesses, putting the full
power of GE behind our quest for better, faster customer solutions.

Defining Relationships

Why define Relationships between Lists?

Relationships between Lists indicate how the two lists are related to each
other. They are generally used to prioritize one List based upon the priorities of
another list. Relationships can be defined by answering a particular question for
each cell in a Matrix. For example, the Relationships between Customer
Requirements and Design Measures might be defined by asking "To what degree
does this Measure predict the Customer's Satisfaction with this Requirement?"
By asking this same question consistently for each Measure and Requirement
combination, a set of Relationships will be defined in the Matrix which will help
to determine which Measures are most important to control in order to achieve a
desired level of Customer Satisfaction. Another question which can be asked in
order to define Relationships is "What percent of this Requirement is handled by
this Design Measure? The Relationships defined using this question would result
in the highest priority being assigned to the Measures which control most of the
functionality. These may not be the same as the Measures defined in order to
predict Customer Satisfaction. Given these examples, you can see that it is critical
that a team understand what question they are trying to answer before they start
defining Relationships. It is also critical that they use the same question
consistently. By doing so, the team will be able to prioritize the Output List
accurately.

How can Relationships be defined?

Relationships are defined within the Matrix Window of

QFD/CAPTURE. There are two different methods of defining the Relationships.
The Spreadsheet View provides a familiar format for entering the relationship
values. The Tree View provides a snapshot of the Relationship values for each
Input row, and makes it easier to assess each Relationship's value relative to the
other Relationships. The Spreadsheet View presents the Lists being related in a
Spreadsheet format. The entries in the Input Lists form the row headings and the
entries in the Output Lists form the column headings. The cells within the
spreadsheet contain the relationships between the Input and Output entries. The
Tree View presents all of the Output List Entries which are related to the
currently selected Input List Entry using a Tree structure. This allows the team to
consider the relative strength of the Relationships. It is equivalent to defining an
entire row of relationships across a Matrix.

What scales should we use?

The scales used to define the relationships can have a significant impact
on the Prioritization of the Output List Entries. The main consideration is the
tradeoff between the number of levels in a scale, the speed of relationship
definition, and the relative accuracy of the resulting Prioritization. In general, the
more levels in the scale, the more accurate the relative prioritization. The
different values of the scale allow the team to indicate the levels of relationships
that the Output List Entries have with the Input List Entries. For example, the
team may choose to use relationships with values of 1 through 10. Using this
scale a value of 6 would indicate that one Output List Entry is twice as important
to the satisfaction of an Input List Entry as an Output List Entry with a value of
3. Relationship definition usually goes much faster if the team limits their choices
of Relationship values to just a few. Standard QFD practice usually supports the
values 1, 3, and 9. This Standard QFD Scale accentuates the Strong Relationships
(value of 9). Output List Entries with several Strong Relationships to Input List
Entries will tend to be given a higher level of priority than Output List Entries
related to many Input List Entries with either moderate or weak values. Other
common scales include 1, 2, 3 and 1, 3, 5. With greater frequency, teams are
defining relationships using advanced methods such as the Analytic Hierarchy
Process to establish scales with an infinite number of levels. The resulting
relationship values usually represent the percent contribution of each Output
List Entry to the selected Input List Entry. QFD/CAPTURE supports all of these
different scales. Each time a new matrix is created, the user is given the
opportunity to specify which of the standard scales will be used for the
relationships. You may define your own unique scales as well. The software will
also allow the team to define relationship values as real numbers that represent
percentages.

Identifying Tradeoffs

Why evaluate Tradeoffs?

The tradeoffs, located in the "Roof" of the House of Quality, indicate the
synergistic or detrimental impacts of changes in the Design Measures. They are
used to identify critical compromises in the design. Since these compromises are
likely to be encountered sooner or later, they may as well be examined as part of
the QFD effort so that any required design changes are as inexpensive as
possible.

How should we evaluate Tradeoffs?

As with other matrices, the team should agree upon the question that they
will ask in order to define the Relationships of this Matrix. A common question
used is "If we improve our performance against this Measure, what is the impact
on this other Measure? The team will determine if improving performance of one
Measure helps or hurts the product's performance against another Measure.
Generally, positive and negative values are used to indicate the positive or
negative impact. The Tradeoffs Scale provided by QFD/CAPTURE can be used
as a scale for Relationships defined within this Matrix. QFD/CAPTURE allows a
team to capture the tradeoffs it identifies. A matrix is created to capture the
tradeoff information. One list forms both the input and the output of the matrix.

How should we document Actions?

If a tradeoff is identified, there is usually some Action which is required in

order to reduce the impact or work around the potential compromise. These
Actions can be documented in several ways. One approach is to create a
document within QFD/CAPTURE and record each action as a paragraph within
the document. Another approach would be to define a List of Actions. This
would give the team the opportunity to relate Actions with the Customer
Requirements, Design Measures, or any other List defined in the project. This
approach would support prioritization of the Actions based upon their affect on
the satisfaction of the related Input List.
1.5 DIMENSIONS OF PRODUCT AND SERVICE QUALITY

When it comes to measuring the quality of your services, it helps to

understand the concepts of product and service dimensions. Users may want a
keyboard that is durable and flexible for using on the wireless carts. Customers
may want a service desk assistant who is empathetic and resourceful when
reporting issues. Quality is multidimensional. Product and service quality are
comprised of a number of dimensions, which determine how customer
requirements are achieved. Therefore it is essential that you consider the entire
dimension that may be important to your customers.

Product quality has two dimensions

• Physical dimension - A product's physical dimension measures the

tangible product itself and includes such things as length, weight, and
temperature.
• Performance dimension - A product's performance dimension measures
how well a product works and includes such things as speed and capacity.

While performance dimensions are more difficult to measure and obtain

when compared to physical dimensions, but the efforts will provide more insight
into how the product satisfies the customer.

Like product quality, service quality has several dimensions

• Responsiveness - Responsiveness refers to the reaction time of the service.

• Assurance - Assurance refers to the level of certainty a customer has
regarding the quality of the service provided.
• Tangibles - Tangibles refers to a service's look or feel.
• Empathy - Empathy is when a service employee shows that she
understands and sympathizes with the customer's situation. The greater
the level of this understanding, the better. Some situations require more
empathy than others.
• Reliability - Reliability refers to the dependability of the service providers
and their ability to keep their promises.

The quality of products and services can be measured by their dimensions.

Evaluating all dimensions of a product or service helps to determine how well
the service stacks up against meeting the customer requirements.
Quality Framework

Garvin proposes eight critical dimensions or categories of quality that can

serve as a framework for strategic analysis: Performance, features, reliability,
conformance, durability, serviceability, aesthetics, and perceived quality.

1. Performance

Performance refers to a product's primary operating characteristics. For an

automobile, performance would include traits like acceleration, handling,
cruising speed, and comfort. Because this dimension of quality involves
measurable attributes, brands can usually be ranked objectively on individual
aspects of performance. Overall performance rankings, however, are more
difficult to develop, especially when they involve benefits that not every
customer needs.

2. Features

Features are usually the secondary aspects of performance, the "bells and
whistles" of products and services, and those characteristics that supplement
their basic functioning. The line separating primary performance characteristics
from secondary features is often difficult to draw. What is crucial is that features
involve objective and measurable attributes; objective individual needs, not
prejudices, affect their translation into quality differences.

3. Reliability

This dimension reflects the probability of a product malfunctioning or

failing within a specified time period. Among the most common measures of
reliability are the mean time to first failure, the mean time between failures, and
the failure rate per unit time. Because these measures require a product to be in
use for a specified period, they are more relevant to durable goods than to
products or services that are consumed instantly.

4. Conformance

Conformance is the degree to which a product's design and operating

characteristics meet established standards. The two most common measures of
failure in conformance are defect rates in the factory and, once a product is in the
hands of the customer, the incidence of service calls. These measures neglect
other deviations from standard, like misspelled labels or shoddy construction,
that do not lead to service or repair.
5. Durability

A measure of product life, durability has both economic and technical

dimensions. Technically, durability can be defined as the amount of use one gets
from a product before it deteriorates. Alternatively, it may be defined as the
amount of use one gets from a product before it breaks down and replacement is
preferable to continued repair.

6. Serviceability

Serviceability is the speed, courtesy, competence, and ease of repair.

Consumers are concerned not only about a product breaking down but also
about the time before service is restored, the timeliness with which service
appointments are kept, the nature of dealings with service personnel, and the
frequency with which service calls or repairs fail to correct outstanding
problems. In those cases where problems are not immediately resolved and
complaints are filed, a company's complaints handling procedures are also likely
to affect customers' ultimate evaluation of product and service quality.

7. Aesthetics

Aesthetics is a subjective dimension of quality. How a product looks, feels,

sounds, tastes, or smells is a matter of personal judgment and a reflection of
individual preference. On this dimension of quality it may be difficult to please
everyone.

8. Perceived Quality

Consumers do not always have complete information about a product's or

service's attributes; indirect measures may be their only basis for comparing
brands. A product's durability for example can seldom be observed directly; it
must usually be inferred from various tangible and intangible aspects of the
product. In such circumstances, images, advertising, and brand names -
inferences about quality rather than the reality itself - can be critical.

1.6 Cost of quality

The price of nonconformance (Philip Crosby) or the cost of poor quality

(Joseph Juran), the term 'Cost of Quality', refers to the costs associated with
providing poor quality product or service.
Why is it important?

Quality processes cannot be justified simply because "everyone else is

doing them" - but return on quality (ROQ) has dramatic impacts as companies
mature. Research shows that the costs of poor quality can range from 15%-40% of
business costs (e.g., rework, returns or complaints, reduced service levels, lost
revenue). Most businesses do not know what their quality costs are because they
do not keep reliable statistics. Finding and correcting mistakes consumes an
inordinately large portion resources. Typically, the cost to eliminate a failure in
the customer phase is five times greater than it is at the development or
manufacturing phase. Effective quality management decreases production costs
because the sooner an error is found and corrected, the less costly it will be.

When to use it?

Cost of quality comprises of four parts:

• External Failure Cost: cost associated with defects found after the
customer receives the product or service
ex: processing customer complaints, customer returns, warranty claims,
product recalls.
• Internal Failure Cost : cost associated with defects found before the
customer receives the product or service
ex: scrap, rework, re-inspection, re-testing, material review, material
downgrades.
• Inspection (appraisal) Cost: cost incurred to determine the degree of
conformance to quality requirements (measuring, evaluating or auditing)
ex: inspection, testing, process or service audits, calibration of measuring
and test equipment.
• Prevention Cost: Cost incurred to prevent (keep failure and appraisal cost
to a minimum) poor quality
ex: new product review, quality planning, supplier surveys, process
reviews, quality improvement teams, education and training.

How to use it?

Gather some basic information about the number of failures in the system, apply
some basic assumptions to that data in order to quantify the data, chart the data
based on the four elements listed above and study it, allocate resources to combat
the weak-spots, do this study on a regular basis and evaluate your performance
The Cost of Quality has other version too.

1. Like all things there is a price to pay for quality. This total cost can be split
into two fundamental areas:
• a. Non Conformance. This area covers the price paid by not having
quality systems or a quality product. Examples of this are:
(1) Rework. Doing the job over again because it wasn't right the
first time.
(2) Scrap. Throwing away the results of your work because it is
not up to the required standard.
(3) Waiting. Time wasted whilst waiting for other people.
(4) Down Time. Not being able to do your job because a
machine is broken.
• b. Conformance. Conformance is an aim of quality assurance. This
aim is achieved at a price. Examples of this are:
(1) Documentation. Writing work instructions, technical
instructions and producing paperwork.
(2) Training. On the job training, quality training, etc.
(3) Auditing. Internal, external and extrinsic.
(4) Planning. Prevention, do the right thing first time and poka
yoke.
(5) Inspection. Vehicles, equipment, buildings and people.
2. These two main areas can be split further as shown below:

FIGURE 1.3

This shows the four segments of quality costs:

a. Prevention. This area covers avoiding defects (poka yoke), planning,

preparation, training, preventative maintenance and evaluation.
b. Appraisal. This area covers finding defects by inspection (poka yoke),
audit, calibration, test and measurement.
c. Internal Failure. This area covers the costs that are borne by the
organisation itself such as scrap, rework, redesign, modifications,
corrective action, down time, concessions and overtime.
d. External Failure. This area covers the costs that are borne by the customer
such as equipment failure, down time, warranty, administrative cost in
dealing with failure and the loss of goodwill.

3. Whilst aiming to reduce failure through appraisal and prevention it

must be clear that these also cost as shown below:

Figure 1.4

4. The graph shows that there is a minimum Total Quality cost, which is a
combination of prevention, appraisal and failure. Reducing any of these
reduces the total. The key to minimum cost, is striking the correct balance
between the three.
5. Clearly prevention reduces both appraisal and failure costs, however
eventually the cost of prevention itself starts to increase the total cost and
so this must be controlled and set at an effective level.
6. The next graph shows that when Total Quality is initially introduced into
an organisation, there are huge savings that can be made:
 FIGURE 1.5

8. However when Total Quality is introduced into a well organised system,

that is using inspection as a major standard setter, then the benefits are not
so dramatic. The main benefits to be achieved are within management.
The fat of the organisation can then be cut.

FIGURE 1.6

9. The graph below shows the four stages of Total Quality acceptance /
implementation and what happens theoretically to the four segments of
the cost of quality:
 FIGURE 1.7

10. The minimum total cost, is shown below as being achieved at 98%
perfection. This percentage is also known as best practice. That is, the cost
of achieving an improvement outweighs the benefits of that improvement.

FIGURE 1.8

SUMMARY

The eight principle, which act as a base for defining Quality Management
is presented in detail. The Total Quality Management is presented framework
comprises of three paradigms and each one compliments the other .The process
quality, involvement of leaders and employee, culture of the organization will all
lead towards the establishment of TQM in organization, The benefits are many
and using an example of hotel, it is emphasized for the benefit of readers. Vision,
mission and policy Statements on quality are presented using examples of SAP,
Honeywell Technology Solutions Lab, Department of Defence, USA to give an
idea. The indispensability of the customer and the focus required to be is
emphasized are presented in detail. The quality dimensions of product and
service are deliberated in detail. The cost of quality, its importance, Application
areas are elaborated for the benefit of the learners.

REVIEW QUESTIONS

1. Enumerate various principles of quality management and explain

their usefulness to managers.
2. “THE TQM framework is dynamic and is fast changing”-Critically
examine.
3. Describe the benefit of TQM in streamlining the operations of an
organization.
4. Discuss the importance of vision, mission and policy statements
on quality in organizations. Describe the process of its evolution.
5. Explain the impact on quality due to non-retention of customers.
6. Explain various cost elements in achieving quality in an
organization. Demonstrate how to they interact with each other