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Quality Management

IEng 5181
CHAPTER ONE
DEFINITIONS OF QUALITY IN GENERAL

Prepared by: Temegen H/G.


1.1. Introduction

Main concerns of manufacturers and customers in any industry are:


Manufacturer Customer
Quality -Quality
Cost - Price
Productivity - Availability

Concerns of manufacturer and customer are generally not the same.


 Customer usually has no concern for company productivity and
cost.
 Quality is the only common concern and it is the most significant
factor in determining the long range success or failure of an
organization is quality.
Good quality of product and service can provide:
 Competitive edge

 Reduce cost due to returns, reworks, and scrap

 Productivity and profits

 Generates satisfied customers


The meaning of quality has stretched to include all employees from
the top firm’s management through the entire organization as
well as vendors.

 Quality has become a tool of providing a continuous feedback to


the organizational production and business systems with the
objective of producing products with:
 high quality and minimum cost, and thus finished products, but
also to the quality of the processes that go into those products.
Quality and competitiveness
1.1 Quality Definitions In General
Quality has been defined in different ways by various authors.
 Degree of Excellence (Dictionary)

 As value (or what the customer says it is) ( Feigenbaum)

 As meeting and/or exceeding customers’ expectations (Buzzell & Gale)

 Garvin (1984) divides the definition of quality in to five categories


1.Transcendent - Superior in quality or achievement / excellence
2. Product-based - quantities of product attributes
3. User-based – fitness for intended use
4. Manufacturing-based –conformance to specifications
5. Value-based –quality vs. Price

Crosby (1979)
 Quality is conformance to requirements or specifications
Juran (1974)
 Quality is fitness for use or purpose
 ISO 9000:2000
Quality is the degree to which a set of inherent characteristics fulfills requirements
 The totality of features and characteristics of product or service that bears
on its ability to satisfy stated needs. (ANSI and ASQC
(American National Standards Institute/American Society of Quality Control)
 Quantified

Q=P/E where P-Performance


E-Expectations

W.Edwards Deming
 A predictable degree of uniformity and dependability at low cost and suited to
market

Bill Conway
 Development, manufacture, administration and distribution of consistently low cost
products and services that customers need and want.
 Quality of a product or service is the fitness of that product or service for
meeting or exceeding the intended use as required by the customer.
Continued..................
In general, managing for quality has become the overall management function to
assure that customer requirements are identified and met with satisfaction
conforming to the requirements.
 The needs of the customer may change with time and implies a periodic
review of the requirements for quality.
 As all business start with the customer, enterprises small, medium and large
everywhere are increasingly conscious of the competitive potential of quality.
 A customer buying a product has certain expectations which are determined by
several factors, and the intended use, appearance, and performance that affects
these expectations.
 Thus the Quality of a product depends on its ability to fulfill the customer’s
expectation.
Evolution of quality Era

TQM (1990-2000’s) years


TQC (1980-1990’s)

SQC (1960-1980’s)
Inspection (1940-1960’s)

Foreman (1920-1940’s)
Craftsman (1900-1920’s)
Evolution of quality –Means & Focus
1975 1980 1985 1990 1995 2000

Total
Productivity Quality TQC/TQM
Quality

Quality of work Quality


life circle Self Self
Employee Employee Directed Directed/Man
Involvement Involvement Teams aged Teams

Operation Customers Innovations


Dimensions of Quality

Conformance Durability
Reliability Serviceability

Features Aesthetic

Performance

Product
Service

Accuracy Consistency

Responsiveness Access

Completeness Waiting Time


Courtesy Timeliness

Perceived Quality
04/01/2022
Eight Dimensions of Quality
A. Product
The quality of a product can be evaluated in several ways. It is often very
important to differentiate these different dimensions of quality. Garvin
(1987) provides an excellent discussion of eight components of dimensions
of quality. The key points concerning these dimensions of quality are:

1. Performance (will the product do the intended job?)


Potential customers usually evaluate a product to determine if it will
perform certain specific functions and determine how well it performs them.

2. Reliability (how often does the product fail?)


Complex products, such as many appliances, automobiles, or airplanes, will
usually require some repair over their service life. For example, you should
expect that an automobile will require occasional repair, but if the car
requires frequent repair, we say that it is unreliable. This is an industry in
which the customer’s view of quality is greatly impacted by the reliable
dimension of quality.
3. Durability (how long does the product last?)
This is the effective service life of the product. Customers obviously want
products that perform satisfactorily over a long period of time. Again, the
automobile and major appliance industries are examples of business where
this dimensions of quality is very important to most customers.

4. Serviceability (how easy is it to repair the product?)


There are many industries where the customer’s view of quality is directly
influenced by how quickly and economically a repair of routine
maintenance activity can be accomplished. Examples include the appliance
and automobile industries and many types of service industries (how long
did it take a credit card company to correct an error in your bill?). As much
as possible, products should not be complicated.

5. Aesthetics (what does the product look like?)


This is the visual appeal of the product, often taking into account factors
such as style, color, shape, packaging alternatives, tactile characteristics,
and other sensory features. For example, soft drink beverage manufacturers
have relied on visual appeal of their packaging to differentiate their product
from other competitors.
6. Features (what does the product do?)
Usually, customers associate high quality with products that have added
features; that is those that have features beyond this basic performance of
the competition. For example, you might consider a spreadsheet software
package to be of superior quality if it hand built-in statistical analysis
features while its competitors did not.

7. Perceived Quality (what is the reputation of the company or its product?)


In many cases, customers rely on the past reputation of the company
concerning quality of its products. This reputation is directly influenced by
failures of the products that are highly visible to the public or that require
product recalls, and by how the customer is treated. Perceived quality,
customers loyalty, and repeated business are closely interconnected.
Example: Trips using a particular airline, and the flight almost always
arrives on time and no lose or damage in luggage, will probably be
preferred to fly on that carrier instead of its competitors.
8. Conformance to standards (Is the product made exactly as the designer
intended?)
We usually think of a high-quality product as one that exactly meets the
requirements placed on it. This is the degree to which the product’s
appearance and function conform to pre-established standards. A product of
excellent physical appearance can’t compete for the market unless it gives
the expected service to the customers. For example, how well does the hood
fit on a new car? Is it perfectly flush with the fender height and the gap
exactly the same in all sides? Manufactured parts that do not exactly meet
the designer’s requirements can cause significant quality problems when
they are used as the components of a more complex assembly.

We see from the foregoing discussion that quality is indeed a


multifaceted entity. Consequently, a simple answer to questions such
as “what is quality?” or what is quality improvement?” is not easy.
The traditional definition of quality is based on the viewpoint that
products and service must meet the requirements of those who use
them.
 Dimensions of Quality
Example: product- TV
1. Performance - Primary Characteristics, such as brightness
2. Features– Secondary Characteristics, Remote Control
3. Conformance- Meeting Specifications or Standards
4. Reliability– Consistency of Performance over time-fail
5. Durability- Useful life, include repair.
6. Service - Resolution of problems, ease of repair.
7. Response - Human relations with Customers.
8. Aesthetics - Sensory Features.
9. Reputation - Past performance, Company Image
Dimensions of Quality:
B. Service
 Time and Timeliness/promptness:
 How long must a customer wait for service,
and is it completed on time?
 Is an overnight package delivered overnight?
 Completeness:
 Is everything customer asked for provided?
 Is a mail order from a catalogue company
complete when delivered?

16
Dimensions of Quality: Service (cont.)

 Courtesy/friendliness:
 How are customers treated by employees?

 Are catalogue phone operators nice and are their voices


pleasant?

 Consistency
 Is the same level of service provided to each customer
each time?
17
 Is your newspaper delivered on time every morning?
Dimensions of Quality: Service (cont.)

 Accessibility and convenience


 How easy is it to obtain service?
 Does a service representative answer you calls quickly?
 Accuracy
 Is the service performed right every time?
 Is your bank or credit card statement correct every month?
 Responsiveness
 How well does the company react to unusual situations?
 How well is a telephone operator able to respond to a
customer’s questions?

18
Quality Characteristics
 Physical - length, weight, voltage, viscosity

 Sensory - taste, appearance, color

 Time Orientation - reliability, durability, serviceability

Specifications

Quality characteristics being measured are often compared to standards or

specifications.

 Nominal or target value

 Upper Specification Limit (USL)

 Lower Specification Limit (LSL) 04/01/2022


Management quality problems

 Quality become a question only at the final assembly, rather than at


the early design stage
 The employees in the organization lack understanding of customer
requirements
 Quality issues fail to gain much attention until problems developed
 Management seemed willing to sacrifice quality when it conflicts
with cost and schedule
 Operators lacked sufficient training in their work and in quality
issues
 Suppliers contribute to the quality problem of the producer
 High quality costs are common (cost of poor quality)
 Employee-employer and producer-supplier are always blaming
each other
1.2. Total Quality Management and Statistical Process Control

What is Total Quality Management (TQM)???


The elements of TQM as the name suggests are :
 Total implies - Complete - 100%
 All areas and functions
 All activities
 All employees – everyone
 All time - always
 Quality target is 100%, not even 99.9% because even 99.9%
might mean many dissatisfied customers every year, defective
components entering assembly, accidents etc.
Quality definition:
 Old view : Quality relates to products manufactured
exactly to specifications.
 New view : Total Quality relates to products that totally
satisfy our customer needs and expectations in every
respect on a continuous basis.
 Quality then is to satisfy customer needs....it is in fact to
delight customers.
Who is our customer?
 The next person(individual or functional group) in the
workplace; the receiver of output and the next to act on it.
 A customer may be either external or internal.
Example: Next in process customer
 Marketing Design
 Design Manufacturing
 Manufacturing Sales
 Machine Shop Assembly
 Assembly Testing
 Testing Dispatch (Sales)
 Sales Product user
 Management implies : Quality does not happen on its own.
It requires to be planned and managed. It is a management
function, though it involves everyone. Therefore it needs a
systematic approach.
TQM = Sum of TOTAL + QUALITY + MANAGEMENT
TOTAL QUALITY MANAGEMENT is a thought revolution in
management
where the entire business is operated with customer orientation
in all activities all the time by every one in the organization.
 TQM is an integrated system and methodology throughout the
organization that help to design, produce and service quality
products or services which are most economical for their
value, most useful and always satisfactory to the customer.
 Total quality management is, the company wide effort
which lay on the full involvement of the entire workforce
to satisfy the customer and focus on continuous
improvement.
This shows us that the quality is possible by the:
 People inside the organization,
 Suppliers involvement
 Customer involvement
 Technology used,
 Communication in the organization,
Basic Approach
 A committed and involved management to provide long-term top - to -
bottom organizational support.
 An unwavering focus on the customer, both internally and externally.
 Effective involvement and utilization of the entire work force.
 Continuous improvement of the business and production process.
 Treating supplier as partners.
 Establish performance measures for the processes.
Goals of TQM
 To satisfy the customer needs
 Prevent of loss of quality rather than correcting problems
 Develop an attitude of continuous improvement
 Be able to measure performance to exploit opportunities
 Elimination of chronic sources of inefficiency and costs
Traditional Quality Control

 Wide spread use of statistical quality control (SQC), in which inferences are

made about the quality of the population of manufactured parts and products

based on a sample.

 Two principal sampling methods in SQC

I) Control charts

 Graphical technique used to track measured variable of interest over time

II) Acceptance sampling

 If the sample passes, the batch is accepted


04/01/2022
Continu …
Typical management principles and practices:

 Customers are external to the organization

 The sales and marketing department are responsible for customers

 Company is organized by functional departments

 Inspection department is responsible for quality

 Inspection follows production

 Knowledge of SQC techniques resides only in the minds of the QC experts

in the organization 04/01/2022


Modern View of Quality Control

High quality is achieved by a combination of:

 Good management – three objectives of “total quality management”:

1. Achieving customer satisfaction

2. Continuous improvement

3. Encouraging involvement of entire work force

 Good technology – traditional statistical tools combined with modern

measurement and inspection technologies


04/01/2022
Total Quality Management (TQM)

Typical management principles and practices:

 Quality is focused on customer satisfaction

- Internal customers and external customers

 Quality goals are driven by top management

 Quality must be built into the product, not inspected in afterward

- Production workers must inspect their own work

 Continuous improvement

- A never ending chase to design and produce better products


TQM in Old and New Cultures
TQM
Quality Element Old New
Definition Product Customer
Priorities Service and cost Quality
Decisions Short term Long term
Emphasis Detection Prevention
Errors Operations System
Responsibility Quality control Everybody
Problem solving Managers Teams
Procurement Price Partners/JIT
Managers role Plan Delegate
>> Assign Coach
>> Enforce Mentor
Statistical Process Control
 Statistical Process Control (SPC) can be thought of as the
application of statistical methods for the purposes of
quality control and improvement.
 A methodology for monitoring a process to identify special
causes of variation and signal the need to take corrective
action when appropriate.
 Strategy that focuses on quantifying, classifying, and reducing
variability in the process.
 Based on the philosophy that making the right product in the
first place is better than trying to rework the wrong product.
 Quality Improvement is perhaps foremost among all areas in
business for application of statistical methods.
Traditional Quality Control vs. Statistical Process Control

 Traditional quality control focuses on the product


 Monitor product quality
 Rework or scrap off-spec product
 Statistical process control focuses on the process
 Monitor process behavior (including product quality)
 Adjust the process to eliminate off-spec production
 Traditional quality control focuses on the values
 A value outside specifications is a signal that the product must be
reworked or scrapped
 Statistical process control focuses on the variability
 Variation outside usual limits in any process measurement is a
signal that the process should be adjusted to prevent production
of unacceptable product
Comparing the three quality philosophies
Item Deming Crosby Juran
Definition of quality Predictable uniformity of Confromance to requirements( the Fitness of products for their
products, (emphasize the use of zero defect implies that the set intended use
control charts, focus on the process requirements should be met)
but not much on the customer)

The importance of Shared


management commitment

Strategic approach to quality Strategy for top management involves Sequencial The quality council guides the
system in creating the structure to quality system
continually promote the first 13
points in a none ending cycle

Measurement of quality All of them believe that quality is measurable but from different angles

Never-ending process of Shared belief


improvement

Training and education 6th and 13th points, emphasis on The 8th step, more emphasis on the Didn’t explicitly call for education
statistical training creation of conductive environmental
climate

Goal formation Arbitrarly established numerical The 10th point deals with th Recommend annual quality
goals should be avoided, no need for importance of employee improvement programs with
short term goals involvement to set measurable specified goals
goals

Structural plan Top-down approach Bottop-up approach Project by prroject approach


1.4. Definition of Quality improvement

 Quality improvement is the reduction of variability in

processes and products.

 Excessive variability in process performance often results

in waste.

 Quality improvement is the reduction of waste.

35
2. Cost of quality
“Cost of quality is the expense of non conformance – the
cost of doing things wrong.”

Quality costs are those categories of costs that are


associated with producing, identifying, avoiding, or
repairing products that do not meet requirements.

36
Understand Quality Costs

Quality costs are real and estimated at:


 25% of costs in manufacturing
 35% of costs in service industry
Quality costs can be categorised to enable
better understanding

37
Two Big Categories of Cost of Quality

1. Cost of Achieving Good Quality


– Prevention costs
• costs incurred during the product design
– Appraisal costs
• costs of measuring, testing, and analyzing
2. Cost of Poor Quality
– Internal failure costs
• include scrap, rework, process failure, downtime,
and price reductions
– External failure costs
• include complaints, returns, warranty claims,
liability, and lost sales
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2.1. Cost of Achieving Good Quality
2.1.1. Prevention Costs
Quality planning costs Training costs
costs of developing and costs of developing
implementing quality and putting on
management program quality training
programs for
Product-design costs employees and
management
costs of designing
products with quality Information costs
characteristics – costs of acquiring
and maintaining data
Process costs related to quality,
– costs expended to make and development of
sure productive process reports on quality
conforms to quality performance
39
specifications
2.1.2. Appraisal Costs
Inspection and testing
costs of testing and inspecting materials, parts, and
product at various stages and at the end of a process
Test equipment costs
costs of maintaining equipment used in testing
quality characteristics of products
Operator costs
– costs of time spent by operators to gather data for
testing product quality, to make equipment
adjustments to maintain quality, and to stop work to
assess quality

40
2.2. Cost of Poor Quality
2.2.1. Internal Failure Costs
• Scrap costs • Process downtime
– costs of poor-quality products costs
that must be discarded,
including labor, material, and – costs of shutting
indirect costs down productive
• Rework costs process to fix
– costs of fixing defective problem
products to conform to • Price-downgrading costs
quality specifications – costs of discounting
• Process failure costs poor-quality
– costs of determining why products—that is,
production process is selling products as
producing poor-quality
products ―seconds‖
41
2.2.2. External Failure Costs

Customer complaint costs Product liability costs


costs of investigating and litigation costs
satisfactorily responding to resulting from
a customer complaint product liability and
resulting from a poor- customer injury
quality product
Product return costs Lost sales costs
costs of handling and – costs incurred
replacing poor-quality because customers are
products returned by dissatisfied with poor
customer
Warranty claims costs quality products and
do not make
– costs of complying with additional purchases
42 product warranties
Preventing Poor Quality Pays
Prevention Costs

Benefit
Appraisal Costs

$ Repair Costs Prevention Costs

Failure Costs Appraisal Costs


• Internal Repair Costs
• External
Failure Costs

Before Quality After Quality


Cost Cost
Alignment Alignment
43
2.3 Measuring and Reporting Quality Costs

 Index numbers
– ratios that measure quality costs against a base value
– labor index
• ratio of quality cost to labor hours
– cost index
• ratio of quality cost to manufacturing cost
– sales index
• ratio of quality cost to sales
– production index
• ratio of quality cost to units of final product

44
2.3.1 Why Measure Quality Costs?

 Helps to identify quality problems and opportunities

 Helps to evaluate relative importance of quality programs

 Demonstrate the worth of improvement programs

 Aid in budgeting quality costs

 Evaluate company’s success in achieving quality goals

45
2.3.2. Quality–Cost Relationship
Cost of quality
– Difference between price of non conformance and
conformance

– Cost of doing things wrong


• 20 to 35% of revenues

– Cost of doing things right


• 3 to 4% of revenues

– Profitability

46
• In the long run, quality is free
2.3.3.Quality Management and Productivity

Productivity
 ratio of output to input
Yield: a measure of productivity
Yield=(total input)(% good units) + (total input)(1-%good units)(% reworked)

or

Y=(I)(%G)+(I)(1-%G)(%R)

47
Product Cost

Product Cost  ( K d )( I )  ( K r )( R )
Y
where:
Kd = direct manufacturing cost per unit
I = input
Kr = rework cost per unit
R = reworked units
Y = yield

48
Computing Product Yield for Multi stage Processes

Y = (I)(%g1)(%g2) … (%gn)

where:
I = input of items to the production process that
will result in finished products
gi = good-quality, work-in-process products at
stage i

49
Quality–Productivity Ratio

QPR
productivity index that includes productivity and quality costs

(non-defective units)
QPR =
(input) (processing cost) + (defective units) (reworked cost)

50
2.3.4 How to Prevent Poor Quality

Prepare to measure costs of quality


Determine categories of quality costs
Create measurement system that captures
categories of quality costs
Assign responsibility to collect data
Analyze collected data

51
Management is Responsible
Management decides what to produce in terms
of Products (goods and / or services)
Management assigns responsibilities to produce
products
Management is accountable for effectively using
resources to produce products

52
Summary
Understand quality costs enables you to:
- Understand hidden costs
- Reduce and eliminate unnecessary cost
- Prevent problems from happening

53
Independent work

 Evaluate your companies quality efforts vis -a -vis the quality


principles.
 List top four causes of poor product/service quality in your
company.

54
Individual assignment

Assignment 1.
 Prepare a brief note on the history, basic tents and approaches to
quality management of the following Quality Gurus.
1.Joseph M. Juran
2.Edwards Deming
3.Armand V.Feigenbaum
4.Philip B.Crosby
5.Kaoru Ishikawa
6.GenichiTaguchi
 Submission date: 26/04/2014
The End!!!!

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