Quality

A Brief History
A aha Maslo ’s Hie a h of Needs
Self
Actualization
Personal Growth,
Fulfillment
Esteem Needs
Achievement, status,
responsibility, reputation

1908-1970 Social Needs

Family, Affections, Work group etc

Safety Needs
Physical & economic security: Protection, Security,
Stability etc

Physiological Needs
Basic Life needs - foods, air, water, shelter, clothing, sleep etc

Business & Corporate Analogy ? What Drives Business ?

 Why Emphasis on Quality

• Why Quality is relevant and important

– Global competition
– Rising expectation of customers
– Quality is a (or the) differentiator
– Increasing complexity & sophistication of products
– Quality improvement is cost reduction -> Profit
– …………
 Defining Quality

Perfection Fast delivery

Providing a good, usable product

Eliminating waste Consistency

Doing it right the first time
Delighting or pleasing customers

Total customer service and satisfaction

Compliance with policies and procedures
 What is Quality
• Definition: ?

• Quality is associated or with reference to 2

factors
1. Product (output of a process)
• Product can be goods, software, service
• Product has features (attributes) or hierarchy of product
features
2. Customer
• External (primary important)
• Internal
• Various Definitions
1. ISO
2. ASQ
3. Juran
4. Crosby
5. Taguchi
6. JUSE
……
 Definition of Quality
• ISO, an international body for formulating standards,
ISO 9000:2000 defined quality as:
• the deg ee to hi h a set of i he e t ha a te isti s
fulfils e ui e e ts
– Degree:
• refers to a level to which a product or service satisfies. So, depending
upon the level of satisfaction, a product may be termed as excellent, good
or poor quality product
– Inherent characteristics:
• those features that are a part of the product and are responsible to
achieve satisfaction
– Requirements:
• refer to the needs of customer, needs of organization & those of other
interested parties (e.g. regulatory bodies, suppliers, employees,
community & environment)
• the expectations that may be stated, generally implied or obligatory
 Definition of Quality
ASQ : Quality:
– A subjective term for which each person or sector has its
own definition. In technical usage, quality can have two
meanings:
1. the characteristics of a product or service that bear on its
ability to satisfy stated or implied needs
2. a product or service free of deficiencies
• According to Joseph Juran, ualit ea s fit ess fo
use
• A o di g to Philip C os , it ea s o fo a e to
e ui e e ts

• In 2010, Ju a ’s Quality Handbook, 6th Edition page 5,

Qualit is e-defi ed as fit ess fo pu pose
 Definition of Quality
• According to Genichi Taguchi - "quality is the loss a product
causes to society after being shipped, other than losses
caused by its intrinsic functions.

• A o di g to JU“E: Qualit efe s to the usability (in

functional and psychological aspect), reliability, and safety.
Also, in defining "quality", influence on the third parties,
society, environment, and future generations needs to be
considered

• Other versions, quality is

– eeti g a d e eedi g usto e e pe tatio s
– o fo a e to spe ifi atio s
 Definitions of Quality (Value Chain)
• Transcendent definition: excellence
• Product-based definition: quantities of
product attributes
• User-based definition: fitness for
intended use
• Value-based definition: quality vs. price
• Manufacturing-based : conformance to
specifications
(can one defines all specifications?)
Quality is Customer-driven (both external & Internal)
What is the Definition ?
 Quality Perspective in Value Chain
• Where are you in the value chain?
• What is your perspective of Quality?

Needs
Marketing Customer
Retailor

Customer
R&D/Design Support
Distribution

Finance,
Purchasing. Manufacturing
Fa ilit , HR…

What about Finance, F&B Industry?

 Dimensions of Quality
Pe D A Ga i Co peti g i the Eight Di e sio s of Qualit , Ha a d Busi ess Review,
Sept-Oct 1987
Dimension Meaning
1 Performance Primary product/service characteristics
2 Reliability Consistency of performance over time
3 Durability Effective service life
4 Serviceability Ease and economics of repair and routine maintenance
5 Aesthetics Visual and sensory appeal
6 Features Secondary product characteristics
7 Perceived Quality Reputation of past performance & other intangibles
8 Conformance Compliance with industrial & product specifications or standards
For Service, Transactional Business (e.g. banking, healthcare, customer service business
9 Responsiveness Promptness of service request fulfilment
10 Professionalism Competency, knowledge, skill to provide required service
11 Attentiveness Empathy, caring & render feeling of importance to customer
 Service vs Manufacturing
1. Customer needs and measurement
2. Service involves high degree of customization
• E.g. edi al, legal, food & e e age…
3. Service output may not be well defined, i.e.
intangible
• e.g. e pe tatio , satisfa tio , …..
4. Service often involves instant gratification or
response vs manufacturing
5. Service is labor intensive
6. Attributes of good service – many aspects
 Quality ?
• Product/Service
• Customers
• Dimensions/Aspects
• Position in Value Chain
Quality is Customer-driven (both external & Internal)
What is the Definition ?
From
Most Important Customer -> Progressively Different Levels
Dominated by the Most Important Customer
 Does Quality costs More to
Organization?
Higher quality means
• Better customer satisfaction
• More marketable
• More sales/market share
• Better profit margin
• Beat competition
• Charge premium
• Less warranty cost/risk
Main effect is on revenue
Higher Quality means higher revenue
e.g. Ferrari, RR, wine, Luxury home
Higher quality means
• Less defects
• Less rework, waste
• Less warranty cost
• Higher yield
• Improve throughput, capacity
• Less customer rejects/complaints
• Shorter time to delivery, time to
market
Main effect is on cost
Higher quality means lower cost
e.g. manufacturing environment
 Quality and Profitability
Improve Quality of Design Improve Quality of Conformance

Improve/Increase Features Lower Deficiencies

Higher Perceived Value Lower Rejects

Higher Higher Higher Lower Lower

Price Market Share Throughput warranty Waste

Higher Revenue Lower Cost

Higher Profit
 Quality – A Brief History
Quality, Quality Control, Quality Assurance
– Typically focus on design, making & delivery of
goods and services needed
– Early means often involved some form of
inspection and measurement (or comparison)
– Probably evolved as early as Division of Labor in
human society whereby demands for quantity of
si ila ualit goods e e e ui ed
– From village > marketplace > commerce >
government law
 Egypt Ancient Examples
Egypt - New Kingdom era (1550-1069 BC) and probably earlier
– Length
• Cubit (length from elbow to middle finger tip, approx )
– Weight
• Deben as unit of weight for precious metal (roughly 91
gm, changed over time)
Standards changed from era, but measurements
were widely used in stone size control for pyramid
building and trade
 China Ancient Examples
• Zhou Dynasty (12th century BC)
– Special government departments were created & responsible
for production, inventory, distribution, formulating & execution
of quality standards, supervision & inspection across China
– The control included production of utensils, cart, cotton and
silk; prohibiting sales of non-conforming, inferior and sub-
standard products

• Qin Dynasty (221 – 206 BC)

– Standardization of shape & dimension, weight

• Ancient craftsmen marked names/seals on bricks

(evidence on ancient walls & building) and tools for
traceability of quality & conformance, punishable for not
compliance
 Middle Age Europe Craftsmanship
• Craftsmen in Medieval time served both as
manufacturer and inspector
• Pride in workmanship
• Craftsman made the entire product
• Skill & knowledge transferred via apprenticeship,
later Craft Guilds to up hold standards
– hierarchy master, journeyman, apprentice
• Examples are utensils, woodcraft, farming tools,
weapons (armor, swords etc)
 Concept of Interchangeable Parts
• Venetian Arsenal (Arsenale di Venezia) was a state owned complex of
shipyards and armouries during the Venice Republican era
• First constructed around 1104, by 1320 with Arsenale Nuovo, it was the
largest European pre-Industrial Revolution complex and possibly the world
largest ship building site at that era, 110 acres in size
• Estimated employed 16,000 people and capable of building ONE large ship
per day
• At Arsenale Nuovo, developed mass production method of frame first
system instead of the old Roman hull first method. Frames, planks, cabins
were prepared before assembly
• The sheer efficiency of the merchant & warship building enlarged the
Venetian fleet size to over 3000 ships, created tremendous wealth for the
merchant families and noblemen
• The site, in addition, provided service, repair and maintenance
• The production system surpassed the guild system, and is quite analogous
to ode da of o siste t sta da d pa ts fo asse l a d effi ie t
inventory management
Picture of Venetian Arsenal
Google Earth
Interchangeable Manufacturing Concept
• Around 1439, Johannes Gutenberg invented the movable
type printing using mass-producing print types

• Modern interchangeable part manufacturing evolved

around weapons of war, guns (early days muskets), that
required in large quantity – Industrial Revolution era
– French gunsmith Honore Blanc (1736-1801) used gauges & hand
filing jigs to duplicate master copy of parts to ensure sufficient
interchangeability
– Thomas Jefferson, then American Ambassador to France,
brought the idea to America, attempting to reduce the
dependency on Europe for military equipment. Approved by
George Washington and in 1798, a 2-year contract was awarded
to Eli Whitney (1765- 1825, inventor of cotton gin) to supply 10K
muskets, using interchangeable manufacturing concept.
• It took more than 10 years for Eli Whitney to fulfill the contract,
plagued by variation in production processes
 Early 20th Century
• Frederick Winslow Taylor, father of Scientific
Management, in early 1900s, separated the planning
function from the execution function in production.
» Managers & Engineers – planning
» Supervisors & workers – execution
» Factories were able to ship good quality
products at great cost of screening by inspection
to reject non-conforming parts
» Eventually, leading to forming of Quality
Department, separating production workers
from inspection
1856-1915
 Assembly Line Mass Production
• Henry Ford – popularized the development of assembly
line technique of mass production, mechanizing
processes, minimizing worker assembly movement,
standardized processes and standard parts, resulting
• higher productivity
• Higher quality
• Lower cost

1863-1947

• Taylorism & the Factory System led to the

dest u tio of aft , de-leverage the high wage
craftsmen and supply of labor
 Industrial Statistical Quality Control
• Western Electric Company, equipment manufacturing arm of AT&T or Bell System,
achieved high quality through massive inspection of finished products, removing
defective items
• Dr Walter Shewhart (1891-1967) joined its Inspection Engineering Dept, Hawthorne,
Illinois, in 1918
• In 1920s, employees in the Inspection Dept were transferred to Bell Labs, duties
included development of new theories & methods of inspection to improve quality
• The team included
– Walter Shewhart (1891-1967, in 1924 originator of the basic concept of control chart and statistical
control, coined assignable cause, chance cause or natural variation; also Shewhart Cycle of PDCA
popularized by Deming in Japan)
– Harold Dodge ( 1893-1976, noted for acceptance sampling concept)
– W. Edwards Deming (1900-1993, worked with Shewhart, application of SPC to industrial production and
a age e t, g eat o t i utio to Japa ’s ualit a d i dust ial e uild afte WW
– George D Edward (1890-1974, boss of Shewhart, Head of Bell’s I spe tio Dept, Director of Quality
Assurance, a term he coined; 1st President of ASQ)
– Joseph M Juran (1904-2008, joined WEC in 1924, promoted to Head of Inspection Statistic Dept, resigned
before end of WW2 to become freelance consultant and adjunct prof in New York University. Focused on
Quality Management, invited & taught courses to Japan top and middle management, contributor to
Japa ’s Qualit effo ts a d ha ged a age e t attitude to a d ualit
And many others like Harry Romig
 Photo Gallery

Walter Shewhart Harold Dodge George D Edwards

Joseph M Juran W Edwards Deming

 World War 2
• During WW2, US military introduced statistical quality control procedure
using control charts, acceptance sampling procedure & tables (Mil-Std
105) developed by Shewhart, Dodge and Romig for procurement

• After WW2, 1950s and 1960s, US was top of the world in manufacturing.
High demands & lack of competitions, top management of many
companies lack of interests in quality improvement

• In 1950s, Japanese rebuild, Deming and Juran introduced PDCA cycle, SPC
techniques and quality management to Japanese top management. Kaizen
culture or Continuous Process Improvement or Continuous Improvement
Program took root. By 1970s, Japanese quality surpassed western
manufacturers . Japan started gaining markets in electronic & automobile
industries
• Japan Union of Scientists & Engineers, non-profit org, established in 1946. Deming
first invited to Japan by JUSE in 1950; Juran in 1954
• Dec 1951, in honor of Deming contribution, Japan Union of Scientists & Engineers
established Deming Prize to reward Japanese companies for major advancement in
quality control company wide
• Japan Quality Award, Baldrige model, established 1995, managed by Japan
Productivity Center
 US/Europe Quality Drive
• In 1980s, progress in global trade, quality gained attention for competition
reasons and needs for purchasing trust assurance

• 1987 Aug, US passed the Malcolm Baldrige National Quality Improvement

Act, establishing the Malcolm Baldrige National Quality Award, the only
award to be given by the President of US, named after the Malcolm
Baldrige, the Secretary of Commerce under Reagan administration who
died in rodeo accident in 1987

– In 2010, the award was enlarged from focusing on product, service and
customer quality to broader strategic & organizational quality
– It is managed by the US National Institute of Standards & Technology (NIST),
an agency of the Department of Commerce, ASQ is contracted by NIST to
assist
– 6 categories of awards - manufacturing, service, small business, education,
health care and non-profit

• Notice the emphasis progressing from product quality to quality

assurance, customer satisfaction, quality management and present form
of encompassing entire business organization
 Europe & International
• In Europe, various practices existed in various countries in
earlier days
• 1987, ISO 9000 series of standards published, evolving from
British Standard and US Mil-standards, subsequent
e isio s i , ,… ….
In 1994 the series was updated to an ANSI/ISO/ASQ standard and
US companies could become certified to the standard

• ISO 9000 – Quality Management Systems, Fundamentals &

Vocabulary. Core ISO 9001
• Used by i te al and external parties, including certification bodies,
to assess the organization's ability to meet customer, statutory and
regulatory requirements applicable to the product, and the
organization's own e ui e e ts – ISO
• Widely implemented world wide for obvious reason
• Vigorously audited for certification, renew 3 yearly for compliance
 EFQM
Formed in 1988 by 14 European CEOs to develop management tools (EFQM
Excellence Model) to increase competitiveness of European organizations,
closing the gaps with USA and Japan
• Supported by European Commission, European Quality Promotion Policy
• Non-prescriptive, holistic, self-assessment for organization seeking to excel
• EFQM Excellence Award was established in Oct 1991 to recognize
companies with excellent and sustainable results across all aspects of the
Model
 Other National Awards
• UK Excellence Award, established in 1994, run by British Quality
Foundation, EFQM Excellence model. Patron HRH Princess Royal

• German National Quality Award (Ludwig-Erhard-Preis), established

in 1997, named after former Germany Minister of Economics (1949-
1963), Chancellor (1963-1966) , managed jointly by Deutsche
Gesellschaft für Qualität (German Society for Quality) and Verein
Deutscher Ingenieure (Assn. of German Engineers), EFQM Model

• Singapore Quality Award, established 1994, patron Prime Minister,

managed by SPRING, Balridge & EFQM models
– Manufacturing Excellence Award (MAXA Award) of Singapore for
manufacturing excellence, established in 2006, managed jointly by
EDB, Singapore-MIT Alliance (MIT-NUS-NTU), Singapore
Ma ufa tu e s’ Fede atio SMa)
 TQM, Six Sigma, Lean
• In 1970s, it was recognized that quality could not be viewed from solely from
quality technical techniques perspective (Little q), it should include management
and permeate across the entire business enterprise (Big Q)
• Subsequently, the TQM concept developed by Armand V Feigenbaum became
recognized in 1992 – total system approach: across all functional & dept, top to
bottom, suppliers to customers
• It as fi st pu lished i , Qualit o t ol, p i iples, p a ti e a d ad i ist atio ; su se ue tl
i , the ook Total Qualit Co t ol
• Japa ese adopted the o ept a d a ed it o pa ide ualit o t ol
• I , the U“ Na al Ai “ ste s Co a d oi ed the te Total Qualit “ ste to des i e the
Japanese style quality improvement approach that involves all members of the organization in
improving quality in goods, services and company culture
• TQM became the buzz word. However, it failed to flourish and many companies
started the program failed miserably due to inability or unwillingness to change
• Ne s eek, “ep , , a ti le The Cost of Qualit –
Well, maybe copying the Japanese isn't such a good idea after all. Consider Douglas Aircraft, the troubled subsidiary
of McDonnell Douglas Corp. Plagued by poor earnings and richer competitors, the aircraft maker three years ago
embraced "Total Quality Management," a Japanese import that had become the American business cult of the 1980s.
TQM, as it is known, depends on small teams of workers-all the way down to the factory floor-to clean up poor
procedures and work habits. That appealed to Douglas, which dispatched 8,000 employees in Long Beach, Calif., to
two-week training seminars. They also spent weeks preparing for TQM on the job. But in less than two years,
Douglas's version of quality management was a shambles, largely because the program's advocates hadn't
anticipated the massive layoffs that poisoned labor-management relations. At Douglas, TQM appeared to be just one
more hothouse Japanese flower never meant to grow on rocky American ground.

• The Wall “t eet Jou al, Ma , , Qualit P og a s “ho “hodd Results

• NY Ti es, Ma , , The Le i gs Who Lo e Total Qualit
• Mo e ala ed state e t as Qualit Digest put it, , No, TQM is ’t dead.
TQM failu es just p o e that ad a age e t is still ali e a d ki ki g
• After the setbacks of TQM. In the quest of result oriented, sustainable
improvement, Six Sigma approach appeared in late 1990s

• Six Sigma concept developed after a long quality improvement efforts inside
Motorola
• , du i g o pa offi e s eeti g, CEO Bo Gal i asked What’s o g ith out
o pa ? , A t “u d , a sales a age of the ost p ofita le usi ess at that ti e,
spoke …ou ualit sti ks! a d ig ited the o pa ualit i p o e e t effo ts
• , Bill “ ith, Moto ola e gi ee oi ed the te si sig a fo desig a gi a d
product quality requirement
• 1986, Mikel Ha , pu lished hite pape The Natu e of “i “ig a Qualit
• 1987, Motorola adopted 2 year 10X improvement, 4 year 100X goal and Six Sigma by
1992; Mikel Harry invented the Black Belt naming convention
• 1988, Motorola training program formerly recognized as US Navy Best Manufacturing
Practices Program, also won the first Malcolm Balridge National Quality Award
• 1990, Motorola Six Sigma Research Institute was founded & directed by Mikel Harry,
formalized partnership with IBM, Kodak, Digital, ABB and TI in 1992
• 1993, Bill Smith published Six Sigma Design in IEEE Spectrum, Sep 1993; he died of heart
attack in the same year in Motorola cafetaria
• 1994, Mikel Harry founded Six Sigma Academy and provided training to Allied Signal
(now Honeywell) and ABB. In 1995 engaged by GE
• 1996, GE announced Six Sigma as global strategic business initiative. 1999 reported
US$2B benefit
• Six Sigma is a top down, customer-focus, data & measurement
driven, result-oriented approach to business with bottom-line
deliverables. It integrated many traditional quality improvement
tools and techniques.
– Emphasis is on behaviors and leadership to drive performance excellence. It
stipulates dedicated infrastructure and resource commitment (Black Belts) to
tackle critically selected customer-focus, value link projects tied to business
strategies & objectives.
– Many companies embraces the approach to re-energize their quality management
effort & improvement in competitive edge

• The success & steady growth of Toyota caught attention of the

world on its management philosophies and practices, viz the
To ota P odu tio “ ste . O igi all Just-in-Ti e , late
e a ed as Lea Ma ufa tu i g ith the e phasis o
efficiency improvement and waste reduction with a set of lean
tools developed, enhanced in the company over many years.
Lean was later integrated with Six Sigma as popularly known as
Lean Six Sigma to tackle many business challenges
 Shape of Future
• Global trade, hence competition, incentivizes organization
to continuously review its practices to enhance the
competitive advantages
• Quality has changed from merely product quality control
to quality assurance and management
• Quality principles starting to engrain into every aspects of
business management in all industries, evolving into the
concept of Performance Excellence, Business Excellence,
i.e. quality benchmarking in every business activities
• Change & Adaptation to new business environment is
inevitable – Survival of the Fittest and Most Adaptable
– Innovate, change, adapt & grow
 History of Quality Improvement
Source: D C Montgomery, Statistical Quality Control-A Modern Introduction
 Reading & Assignment
• Chapter 1 – Introduction
– The Management and Control of Quality, JR Evans
& WM Lindsay, 8th Edition, 9th or 10th Edition

• Assignment (5 marks)
– Building Trust Through Quality at Gerber
 MISC
Discussion Cases
Case - The Nightmare on Telecom Street
• H. James Harrington, a noted quality consultant, related the
following story in Quality Digest magazine:
• “ou e: H. Ja es Ha i gto , Looki g fo a Little “e i e,
Quality Digest, May 2000; http://www.qualitydigest.com.
I called to make a flight reservation just an hour ago. The telephone rang five times before a recorded
voice answered. “Thank you for calling ABC Travel Services,” it said. “To ensure the highest level of
customer service, this call may be recorded for future analysis.” Next, I was asked to select from one of the
following three choices: “If the trip is related to company business, press 1. Personal business, press 2.
Group travel, press 3.” I pressed 1.
I was then asked to select from the following four choices: “If this is a trip within the United States,
press 1. International, press 2. Scheduled training, press 3. Related to a conference, press 4.” Because I
was going to Canada, I pressed 2.
Now two minutes into my telephone call, I was instructed to be sure that I had my customer
identification card available. A few seconds passed and a very sweet voice came on, saying, “All
international operators are busy, but please hold because you are a very important customer.” The voice
was then replaced by music. About two minutes later, another recorded message said, “Our operators are
still busy, but please hold and the first available operator will take care of you.” More music. Then yet
another message: “Our operators are still busy, but please hold. Your business is important to us.” More
bad music. Finally the sweet voice returned, stating, “To speed up your service, enter your 19-digit
customer service number.” I frantically searched for their card, hoping that I could find it before I was cut
off. I was lucky; I found it and entered the number in time.
 The same sweet voice came back to me, saying, “To confirm your customer service number, enter the
last four digits of your social security number.” I pushed the four numbers on the keypad. The voice said:
“Thank you. An operator will be with you shortly. If your call is an emergency, you can call 1-800-CAL-
HELP, or push all of the buttons on the telephone at the same time. Otherwise, please hold, as you are a
very important customer.” This time, in place of music, I heard a commercial about the service that the
company provides.
At last, a real person answered the telephone and asked, “Can I help you?” I replied, “Yes, oh yes.”
He answered, “Please give me your 19-digit customer service number, followed by the last four digits of
your social security number so I can verify who you are.” (I thought I gave these numbers in the first
place to speed up service. Why do I have to rattle them off again?)
I was now convinced that he would call me Mr. 5523-3675-0714-1313-040. But, to my surprise, he
said: “Yes, Mr. Harrington. Where do you want to go and when?” I explained that I wanted to go to
Montreal the following Monday morning. He replied: “I only handle domestic reservations. Our
international desk has a new telephone number: 1-800-1WE-GOTU. I’ll transfer you.” A few clicks later
a message came on, saying: “All of our international operators are busy. Please hold and your call will
be answered in the order it was received. Do not hang up or redial, as it will only delay our response to
your call. Please continue to hold, as your business is important to us.”
Discussion

1. Rate your customer satisfaction level (0-Bad, 10-Vert Satisfied)

2. Summarize the service failures associated with this experience.
3. What might the travel agency do to improve its customers’ service experience?