2/3/2023

Chapter 1 6

Chapter 1 7

1
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Discussion question 1

If you were a factory owner, which basic criteria will

help you to get customers and maintain profit?

QCD triangle

Gain nothing if just focus on Quality

Lose everything if no quality

Customer only pay for On time delivery

what valuable to them, Short lead time
they do not pay for waste => Key criteria for factory
Reduce cost by competency
eliminate or minimize
wastes

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Chapter 1 10

Learning Objectives
1. Define and discuss quality and quality improvement
2. Discuss the different dimensions of quality
3. Discuss the evolution of modern quality improvement methods
4. Discuss the role that variability and statistical methods play in
controlling and improving quality
5. Describe the quality management philosophies of W. Edwards
Deming, Joseph M. Juran, and Armand V. Feigenbaum
6. Discuss total quality management, the Malcolm Baldrige National
Quality Award, Six Sigma, and quality systems and standards
7. Explain the links between quality and productivity and between
quality and cost
8. Discuss product liability
9. Discuss the three functions: quality planning, quality assurance,
and quality control and improvement

Chapter 1 11

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1.1 Definitions – Meaning of Quality and

Quality Improvement
1.1.1 The Eight Dimensions of Quality

Chapter 1 12

1.1 Definitions – Meaning of Quality and

Quality Improvement
1.1.1 The Eight Dimensions of Quality
1. Performance: Will the product do the intended job?
2. Reliability: How often does the product fail?
3. Durability: How long does the product last?
4. Serviceability: How easy is it to repair the
product?
5. Aesthetics: What does the product look like?
6. Features: What does the product do?
7. Perceived Quality: What is the reputation of the
company or its product?
8. Conformance to Standards: Is the product made
exactly as the designer intended?
13

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AIC IN 05 MINUTES!
ACCORDING YOUR IDEA, WHICH ONE IS THE
BEST QUALITY!

14

AIC! 05 minutes
You have your own handphone!

Please tell us why you choose it (on quality

aspects)!

15

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1.1 Definitions – Meaning of Quality and

Quality Improvement
1.1.1 Dimensions of Quality in Service industry
1. Responsiveness:
 How long they did it take the service provider to
reply to your request for service?
 How willing to be helpful was the service provider?
 How promptly was your request handled?
2. Professionalism: This is the knowledge and skills of
the service provider
3. Attentiveness: Customers generally want caring
and personalized attention from their service
providers 16

 This is a traditional definition

 Quality of design
 Quality of conformance

Chapter 1 17

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Defining Quality
• ASQ - “quality is a subjective term for which
each person has his or her own definition”

What’s your definition?

18

Defining Quality
• In technical usage, quality can have two
meanings:
– the characteristics of a product or service that
bear on its ability to satisfy stated or implied
needs, and
– a product or service free of deficiencies

19

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Defining Quality - “Gurus”

• Deming - “non-faulty systems”
– Out of the Crisis
• Juran - “fitness for use”
– Quality Control Handbook
• Crosby - “conformance to requirements”
– Quality is Free

20

Defining Quality- Different Views

• Customer’s view (more subjective)
– the quality of the design (look, feel, function)
– product does what’s intended and lasts
• Producer’s view
– conformance to requirements (Crosby)
– costs of quality (prevention, scrap, warranty)
– increasing conformance raises profits
• Government’s view
– products should be safe
– not harmful to environment

21

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Stout’s View

Quality = Performance
Expectation

22

Value-based Approach
• Manufacturing • Service dimensions
dimensions – Reliability
– Performance – Responsiveness
– Features – Assurance
– Reliability – Empathy
– Conformance – Tangibles
– Durability
– Serviceability
– Aesthetics
– Perceived quality
23

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Shift to Quality

Isolated Global
Economies Period of Economy
change from
Focus on quantity to Focus on
quantity quality quality

Pre-World War II 1945 1990’s

24

This is a modern definition of quality

Chapter 1 25

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The Transmission Example

Chapter 1 26

An equivalent definition is that quality improvement is

the elimination of waste. This is useful in service or
transactional businesses.

Chapter 1 27

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Six Sigma Concept

Every Human Activity Has Variability...
Customer
Specification
Customer
Specification

defects
Target

Reducing Variability is the Key to Understanding Six Sigma

28

Six Sigma Concept

Parking Your Car in the Garage
Has Variability...

Customer Customer
Specification Target Specification

defects defects

29

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Six Sigma Concept

A 3s process because 3 standard deviations
fit between target and spec
Before
Target Customer
3s Specification

1s

2s

3s
After

Target
6s ! Customer
Specification

By reducing the variability,

we improve the process 1s No Defects!
3s

6s

30

Chapter 1 31

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Game!

Chapter 1 32

Who is the best Team!

Penalty shootout:

- Each team have 05 times to “push” the ball into the goal!

- In the case, if the teams have the same highest points,

they would play “sudden death”, one – by – one!

Chapter 1 33

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1-1.2 Terminology
Quality characteristics (critical-to-quality (CTQ):
describe what the user or consumer thinks of as quality
1. Physical: length, weight, voltage, viscosity
2. Sensory: taste, appearance, color
3. Time orientation: reliability, durability,
serviceability

Data on quality characteristics are classified as either

attributes or variables data
Variables data are usually continuous
measurements, such as length, voltage, or viscosity
Attributes data, on the other hand, are usually
discrete data, often taking the form of counts
Chapter 1 34

Terminology cont’d
• Specifications
– Lower specification limit
– Upper specification limit
– Target or nominal values
• Defective or nonconforming product
• Defect or nonconformity
• Not all products containing a defect are
necessarily defective

Chapter 1 35

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1.2. History of Quality Improvement

Chapter 1 36

Chapter 1 37

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Chapter 1 38

Chapter 1 39

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1.3 Statistical Methods for Quality

Control and Improvement

Chapter 1 40

Statistical Methods
• Statistical process control (SPC)
– Control charts, plus other problem-solving tools
– Useful in monitoring processes, reducing variability
through elimination of assignable causes
– On-line technique
• Designed experiments (DOX)
– Discovering the key factors that influence process
performance
– Process optimization
– Off-line technique
• Acceptance Sampling
Chapter 1 41

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Walter A. Shewart (1891-1967)

• Trained in engineering and physics
• Long career at Bell Labs
• Developed the first control chart
about 1924

Chapter 1 42

Statistical Methods
• Statistical process control (SPC)
– Control charts, plus other problem-solving tools
– Useful in monitoring processes, reducing variability
through elimination of assignable causes
– On-line technique
• Designed experiments (DOX)
– Discovering the key factors that influence process
performance
– Process optimization
– Off-line technique
• Acceptance Sampling
Chapter 1 43

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Chapter 1 44

Statistical Methods
• Statistical process control (SPC)
– Control charts, plus other problem-solving tools
– Useful in monitoring processes, reducing variability
through elimination of assignable causes
– On-line technique
• Designed experiments (DOX)
– Discovering the key factors that influence process
performance
– Process optimization
– Off-line technique
• Acceptance Sampling
Chapter 1 45

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Chapter 1 46

Statistical Methods

Chapter 1 47

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1.4 Management Aspects of

Quality Improvement

Effective management of quality requires the

execution of three activities:
1. Quality Planning
2. Quality Assurance
3. Quality Control and Improvement

Chapter 1 48

1. Quality Planning
Quality planning:
- is a strategic activity
- vital to an organization’s longterm business
success
- involves identifying customers, and their needs
(voice of the customer (VOC)) products or
services that meet or exceed customer
expectations must be developed.
- Planning for quality improvement on a
specific, systematic basis
Chapter 1 49

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2. Quality Assurance
Quality assurance:
- ensures the quality levels of products and services are
properly maintained.
- Documentation of the quality system is an important
component.
- Quality system documentation involves four components:
policy, procedures, work instructions and specifications,
and records.
 Policy generally deals with what is to be done and why,
 Procedures focus on the methods and personnel that will implement policy.
 Work instructions and specifications are usually product-, department-, tool-,
or machine-oriented.
 Records are away of documenting the policies, procedures, and work
instructions that have been followed.

Chapter 1 50

3. Quality Control and Improvement

Quality control and improvement:
- Ensure that the products and services meet requirements and
are improved on a continuous basis.
- Statistical techniques, including SPC and designed
experiments are the major tools of quality control and
improvement.
- Quality improvement is often done on a project-by-project
basis and involves teams led by personnel with specialized
knowledge of statistical methods and experience in applying
them.
- Projects should be selected so that they have significant
business impact and are linked with the overall business goals
for quality identified during the planning process.
.
Chapter 1 51

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1.4.1 Quality Philosophy and Management Strategy

W. Edwards Deming

• Taught engineering, physics in the

1920s, finished PhD in 1928
• Met Walter Shewhart at Western
Electric
• Long career in government
statistics, USDA, Bureau of the
Census
• During WWII, he worked with US
defense contractors, deploying
statistical methods
• Sent to Japan after WWII to work
on the census
Chapter 1 52

Deming’s 14 Points
The Deming philosophy is an important framework for
implementing quality and productivity improvement.
1. Create constancy of purpose toward improvement
2. Adopt a new philosophy, recognize that we are in a time of
change, a new economic age
3. Do not rely on mass inspection to “control” quality
4. Do not award business to suppliers on the basis of price alone,
but also consider quality.
5. Improve constantly and forever the system of production and
service
6. Practice modern training methods and invest in on-the-job
training for all employees.
7. Improve leadership, recognize that the aim of supervision is
help people and equipment to do a better job
8. Drive out fear
9. Break down barriers between departments
Chapter 1 53

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14 Points cont’d
10. Eliminate targets, slogans, and numerical goals
for the workforce such as zero defects.
11. Eliminate numerical quotas and work standards
12. Remove the barriers that discourage employees
from doing their jobs
13. Institute an ongoing program of education for all
employees
14. Put everyone to work to accomplish the
transformation

Note that the 14 points are about change

Chapter 1 54

Deming’s Deadly Diseases

1. Lack of constancy of purpose
2. Emphasis on short-term profits
3. Performance evaluation, merit rating, annual
reviews
4. Mobility of management
5. Running a company on visible figures alone
6. Excessive medical costs for employee health care
7. Excessive costs of warrantees

Chapter 1 55

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Chapter 1 56

Deming’s Obstacles to Success

1. The belief that automation, computers, and new
machinery will solve problems.
2. Searching for examples—trying to copy existing solutions.
3. The “our problems are different” excuse and not realizing
that the principles that will solve them are universal.
4. Obsolete schools, particularly business schools, where
graduates have not been taught how to successfully run
businesses.
5. Poor teaching of statistical methods in industry: Teaching
tools without a framework for using them is going to be
unsuccessful.
6. Reliance on inspection to produce quality.
7. Reliance on the “quality control department” to take care
of all quality problems.
8. Blaming the workforce for problems.
Chapter 1 57

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Deming’s Obstacles to Success

10. False starts, such as broad teaching of statistical methods without a plan as to
how to use them, quality circles, employee suggestion systems, and other forms
of “instant pudding.”
11. The fallacy of zero defects: Companies fail even though they produce products
and services without defects. Meeting the specifications isn’t the complete
story in an business.
12. Inadequate testing of prototypes: A prototype may be a one-off article, with
artificially good dimensions, but without knowledge of variability, testing a
prototype tells very little. This is a symptom of inadequate understanding of
product design, development, and the overall activity of technology
commercialization.
13. “Anyone that comes to help us must understand all about our business.”
This is bizarre thinking: There already are competent people in the organization
who know everything about the business—except how to improve it. New
knowledge and ideas (often from the outside) must be fused with existing
business expertise to bring about change and improvement.

Chapter 1 58

The Deming Chain Reaction

Costs Decrease:
Improve (Less rework, Productivity
Quality fewer mistakes, Improves
less scrap)

Achieve Greater
Provide Jobs Market Share
Stay in
and (higher quality
Business
More Jobs products at less cost)

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Joseph M. Juran
• Born in Romania (1904-
2008), immigrated to the US
• Worked at Western Electric,
influenced by Walter
Shewhart
• Emphasizes a more
strategic and planning
oriented approach to
quality than does Deming
• Juran Institute is still an
active organization
promoting the Juran
philosophy and quality
improvement practices

Chapter 1 60

The Juran Trilogy

1. Planning
2. Control
3. Improvement

• These three processes are

interrelated
• Control versus
breakthrough
• Project-by-project
improvement

Chapter 1 61

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Armand Feigenbaum
– Author of Total Quality
Control, promoted overall
organizational involvement
in quality,
– Three-step approach
emphasized:
quality leadership,
quality technology,
and organizational
commitment

Chapter 1 62

Total Quality Management (TQM)

• Started in the early 1980s, Deming/Juran
philosophy as the focal point
• Emphasis on widespread training, quality
awareness
• Training often turned over to HR function
• Not enough emphasis on quality control and
improvement tools, poor follow-through, no
project-by-project implementation strategy
• TQM was largely unsuccessful
Chapter 1 63

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Total Quality Management (TQM)

• TQM is “just another program”
• Value engineering
• Zero defects
• “Quality is free”

Recipes for Ineffectiveness and maybe Disaster

Chapter 1 64

Quality Systems and Standards

The International Standards Organization (founded in 1946 in
Geneva, Switzerland), known as ISO, has developed a series of
standards for quality systems. The first standards were issued in
1987. The current version of

The ISO certification process focuses

heavily on quality assurance,
without sufficient weight given to
quality planning and quality control
and improvement

Chapter 1 65

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The Malcolm Baldrige National Quality Award

The Malcolm Baldrige National Quality Award

(MBNQA) was created by the U.S. Congress
in 1987. It is given annually to recognize U.S.
organizations for performance excellence.
Awards are given to organizations in five
categories: manufacturing, service, small
business, health care, and education. Three
awards may be given each year in each
category. Many organizations compete for the
awards, and many companies use the
performance excellence criteria for self-
assessment. The award is administered by
NIST (the National Institute of Standards and
Technology).
• The MBNQA process is a valuable assessment tool

Chapter 1 66

The criteria are directed towards

results, where results are a
composite of customer satisfaction
and retention, market share and
new market development,
product/service quality,
productivity and operational
effectiveness, human resources
development, supplier
performance, and public/corporate
citizenship. The criteria are
nonprescriptive—that is, the focus
is on results, not the use of specific
procedures or tools

Chapter 1 67

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Chapter 1 68

Need for a New Strategy

 Foreign markets have grown
• Import barriers and protection are not the
answer.
 Consumers are offered more choices
• They have become more discriminating.
 Consumers are more sophisticated
• They demand new and better products.

69

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Why Quality Improvement?

 Global Competition
• Economic and political boundaries are
slowly vanishing
• The 1950’s slogan “Built by Americans for
Americans” is very far from reality in the
2000’s.

70

Why Quality Improvement?

 It pays
• Less rework, fewer mistakes, fewer
delays, and better use of time and
materials
• In United States today, 15 to 20% of
the production costs are incurred in
finding and correcting mistakes.

71

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How Do Organizations Compete?

 Most common competitive measures:
• Quality (both real and perceived)
• Cost
• Delivery (lead time and accuracy)
 Other measures
• safety,
• employee morale,
• product development (time-to-market,
innovative products)
72

Contrasting Approaches
 Passive /  Proactive / Preventive
Reactive • Design quality in
• Setting products and processes
acceptable • Identify sources of
quality levels variation (processes
• Inspecting to and materials)
measure • Monitor process
compliance performance

73

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The Quality Hierarchy

Incorporates QA/QC activities
Total Quality into company-wide system
aimed
Prevention Management
at satisfying the customer
SPC
Actions to insure products or
Quality Assurance services conform to company
requirements
Operational techniques to make
Quality Control
inspection more efficient and to
Detection SQC reduce the costs of quality.

Inspection Inspect products

74

Six Sigma
• Use of statistics & other analytical tools has grown
steadily for over 80 years
– Statistical quality control (origins in 1920, explosive
growth during WW II, 1950s)
– Operations research (1940s)
– FDA (Food and Drug Administration), EPA
(Environmental Protection Agency) in the 1970’s
– TQM (Total Quality Management) movement in the 1980’s
– Reengineering of business processes (late 1980’s)
– Six-Sigma (origins at Motorola in 1987, expanded impact
during 1990s to present)

Chapter 1 75

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Focus of Six Sigma is on Process Improvement

with an Emphasis on Achieving Significant
Business Impact
• A process is an organized sequence of activities that
produces an output that adds value to the organization
• All work is performed in (interconnected) processes
– Easy to see in some situations (manufacturing)
– Harder in others
• Any process can be improved
• An organized approach to improvement is necessary
• The process focus is essential to Six Sigma
Chapter 1 76

Chapter 1 77

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Why “Quality Improvement” is Important:

A Simple Example
• A visit to a fast-food store: Hamburger (bun, meat, special sauce,
cheese, pickle, onion, lettuce, tomato), fries, and drink.

• This product has 10 components - is 99% good okay?

P{Single meal good}  (0.99)10  0.9044

Family of four, once a month: P{All meals good}  (0.9044) 4  0.6690
P{All visits during the year good}  (0.6690)12  0.0080

P{single meal good}  (0.999)10  0.9900, P{Monthly visit good}  (0.99) 4  0.9607
P{All visits in the year good}  (0.9607)12  0.6186

Chapter 1 78

Six Sigma Focus

• Initially in manufacturing
• Commercial applications
– Banking
– Finance
– Public sector
– Services
• DFSS – Design for Six Sigma
– Only so much improvement can be wrung out of an
existing system
– New process design
– New product design (engineering)

Chapter 1 79

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Some Commercial Applications

• Reducing average and variation of days outstanding on
accounts receivable
• Managing costs of consultants (public accountants,
lawyers)
• Skip tracing
• Credit scoring
• Closing the books (faster, less variation)
• Audit accuracy, account reconciliation
• Forecasting
• Inventory management
• Tax filing
• Payroll accuracy
Chapter 1 80

Six Sigma
• A disciplined and analytical approach to process
and product improvement
• Specialized roles for people; Champions, Master
Black belts, Black Belts, Green Belts
• Top-down driven (Champions from each business)
• BBs and MBBs have responsibility (project
definition, leadership, training/mentoring, team
facilitation)
• Involves a five-step process (DMAIC) :
– Define
– Measure
– Analyze
– Improve
– Control
Chapter 1 81

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What Makes it Work?

• Successful implementations characterized by:
– Committed leadership
– Use of top talent
– Supporting infrastructure
• Formal project selection process
• Formal project review process
• Dedicated resources
• Financial system integration
• Project-by-project improvement strategy
(borrowed from Juran)
Chapter 1 82

Chapter 1 83

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Design for Six Sigma (DFSS)

Taking variability reduction upstream from manufacturing (or
operational six sigma) into product design and development
Every design decision is a business decision

Chapter 1 84

DFSS Matches Customer Needs

with Capability
• Mean and variability affects product performance and cost
– Designers can predict costs and yields in the design phase
• Consider mean and variability in the design phase
– Establish top level mean, variability and failure rate targets for
a design
– Rationally allocate mean, variability, and failure rate targets to
subsystem and component levels
– Match requirements against process capability and identify gaps
– Close gaps to optimize a producible design
– Identify variability drivers and optimize designs or make designs robust
to variability
• Process capability impact design decisions
DFSS enhances product design methods.
Chapter 1 85

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DFSS Matches Customer Needs

with Capability
DFSS process following points:
■ Is the product concept well identified?
■ Are customers real?
■ Will customers buy this product?
■ Can the company make this product at competitive cost?
■ Are the financial returns acceptable?
■ Does this product fit with the overall business strategy?
■ Is the risk assessment acceptable?
■ Can the company make this product better than the competition can?
■ Can product reliability, maintainability goals be met?
■ Has a plan for transfer to manufacturing been developed and verified?
Chapter 1 86

DMAIC Solves Problems by Using

Six Sigma Tools
• DMAIC is a problem solving methodology
• Closely related to the Shewhart Cycle
• Use this method to solve problems:
– Define problems in processes
– Measure performance
– Analyze causes of problems
– Improve processes  remove variations and non-
value-added activities
– Control processes so problems do not recur

Chapter 1 Introduction to Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 87

Copyright (c) 2012 John Wiley & Sons, Inc. 11

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Lean Six Sigma processes

The Customer

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Customer Approach
 “the customer defines quality.”
 “the customer is always right.”
 “the customer always comes first.”
 “the customer is king.”
 “quality begins and ends with the
customer”

Types of Customers
 External - outside the organization
(people who pay the bills.)
• End-user customers
• Manufacturer (OEM) for suppliers.
 Internal - people within your organization
who receive your work
 In many situations, producers have
multiple customers and therefore find it
useful to identify “core customers”

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Some Data on Customer

Attitudes and Loyalty
(Source: Winning Back Angry Customers, Quality
Progress, 1993)
 An average customer with a complaint tells 9-10

people; if it is resolved he/she only tells 5 people.

 For every complaint received, there are twenty others

that are not reported.

 It costs 5-10 times more in resources to replace a

customer than it does to retain one.

 Companies spend 95% of service time redressing

problems and only 5% trying to figure out what made

the customer angry.

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Methods to Collect
Customer Satisfaction Data
 Negative Feedback Analysis
• customer complaints, warranty claims, repair records…
• focus on problems
• concern: many dissatisfied customers do not complain (1/20
complain).
 Proactive Feedback (ask customers for their opinions)
• examples: customer surveys, focus groups, “employees” as
customers.
• advantage: identify key product features and assess levels of
performance.
 Analysis of Competitor Products
• examples: Benchmarking, “War Rooms” or Tear Down
Analysis
• advantage: “Know thy competitor, know thyself”

Identifying Customer Needs

Possible solutions
 focus-group discussions
 individual and group interviews
 surveys
 comment cards
 study repair and return data
 customer complaints
 warranty claims
 analyze competitor products

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Identifying and resolving

quality problems
 Quality problems transcend individual
and functional boundaries.
 Companies need multi-discipline problem
solving.

Organizational approaches for

multidiscipline problem solving
 Form cross functional teams.
• Quality improvement teams
• Quality circles
 Adopt matrix versus functional
organizational structure.
 Co-locate engineering resources to open
communication channels.
• Engineering technical centers/Centers of
expertise

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Coordinating quality
requirements with suppliers
 Importance of supply chain management
• Many quality problems are caused by
defective purchased material (Crosby 50%).
• Suppliers often represent a large % of
manufacturing costs.

Strategies for supplier

relationships
Criteria Traditional Long Term
Approach Partnership
Philosophy "keep suppliers on their toes" "mutual dependence"
Supply base Large supply base Few suppliers - "single
sourcing"
Contract length Often short term contracts Often long term contracts
Awarding Low cost bid Negotiated
contracts
Supplier costs Either company or supplier Share cost savings (win-
wins win)
Cooperation Cooperation as needed; Frequent joint problem
company protects knowledge solving

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Lean Systems
• Focuses on elimination of waste
– Long cycle times
– Long queues – in-process inventory
– Inadequate throughput
– Rework
– Non-value-added work activities
• Makes use of many of the tools of operations
research and industrial engineering

Chapter 1 100

Chapter 1 101

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Little’s Law

Chapter 1 102

Lean Focuses on Waste Elimination

Definition
• A set of methods and tools used to eliminate waste in
a process
• Lean helps identify anything not absolutely required
to deliver a quality product on time.

Benefits of using Lean

• Lean methods help reduce inventory, lead time, and
cost
• Lean methods increase productivity, quality, on time
delivery, capacity, and sales

Chapter 1 103

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Chapter 1 104

The Link Between Quality and Productivity

• Effective quality improvement can be instrumental in increasing productivity
and reducing cost.
Example: Consider the manufacture of a mechanical component used in a copier
machine. The parts are manufactured in a machining process at a rate of approximately
100 parts per day. For various reasons, the process is operating at a first-pass yield of
about 75%. (That is, about 75% of the process output conforms to specifications, and
about 25% of the output is nonconforming.) About 60% of the fallout (the 25%
nonconforming) can be reworked into an acceptable product, and the rest must be
scrapped. The direct manufacturing cost through this stage of productionper part is
approximately $20. Parts that can be reworked incur an additional processing charge of
$4. Therefore, the manufacturing cost per good part produced is

Note that the total yield from this process, after reworking, is 90 good parts per day.
An engineering study of this process reveals that excessive process variability is
responsible for the extremely high fallout. A new statistical process-control procedure is
implemented that reduces variability, and consequently the process fallout decreases from
25% to 5%. Of the 5% fallout produced, about 60% can be reworked, and 40% are
scrapped. After the process control program is implemented, the manufacturing cost per
good part produced is

Chapter 1 105

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The supply chain often represents a significant component of the total

value of the organization’s products or services

Failures in the supply chain have potentially huge impact on the

organization

Chapter 1 106

Key Supply Chain Processes

• Service management
• Demand management
• Order fulfillment
• Quality
• Manufacturing flow management
• Supplier relationship management
• Logistics and distribution
• Returns management
Chapter 1 107

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Key Supply Chain Management (SCM)

Activities:

• Supplier qualification or certification

• Supplier development
• Supplier audits

Chapter 1 108

Returns Management
Costs attributable to poor supplier quality

Chapter 1 109

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Quality Costs

Chapter 1 110

The Hidden Factory (or Office)

Chapter 1 111

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Legal Aspects of Quality

• Product liability exposure

• Concept of strict liability

1. Responsibility of both manufacturer and
seller/distributor
2. Advertising must be supported by valid data

Chapter 1 112

Implementing Quality Improvement

•A strategic management process, focused along the
eight dimension of quality

•Suppliers and supply chain management must be involved

•Must focus on all three components: Quality Planning,
Quality Assurance, and Quality Control and Improvement
Chapter 1 113

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Quality Improvement
Teams
Organizing for Quality

Roles for QI teams

In addition to solving quality problems, QI
teams help:
 provide a means of participation for

employees in quality decision-making.

 aid employee development: leadership,

problem-solving skills.
 lead to quality awareness which is essential

for organizational culture change.

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Types of quality improvement

teams

 Project teams

 Quality circles

Project team characteristics

 Teams address key organizational issues
• concurrent engineering
• ISO 9000 implementation…
 membership - generally mandatory
 temporary in nature
 participation is cross-functional
 team leaders have varying degrees of
authority

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Quality circle
characteristics
 Voluntary groups of 6-8 members
 Quality circle teams are semi-permanent
 Teams are from single functional
department
 Members have equal status and select
their own project
 Minimum pressure to solve problems with
a set time frame

Implementing quality circles

 Quality circles require top management
support
 Personal characteristics of facilitators are
critical
 Scope of project needs to be small enough
to be capably addressed by the team
 Success of other teams has positive peer
pressure effect

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Learning Objectives

Chapter 1 120

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