Total Quality in

Organizations

1
Leaders in the Quality Revolution
 W. Edwards Deming
 Joseph M. Juran
 Philip B. Crosby
 Armand V. Feigenbaum
 Kaoru Ishikawa
 Genichi Taguchi

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Deming Chain Reaction
Improve quality

Costs decrease

Productivity improves

Increase market share with better

quality and lower prices

Stay in business

Provide jobs and more jobs

3
Key Idea
The Deming philosophy focuses on
continual improvements in product and
service quality by reducing uncertainty
and variability in design, manufacturing,
and service processes, driven by the
leadership of top management.

4
Deming’s System of Profound
Knowledge
 Appreciation for a system
 Understanding variation
 Theory of knowledge
 Psychology

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Systems
 Most organizational processes are
cross-functional
 Parts of a system must work together
 Every system must have a purpose
 Management must optimize the
system as a whole

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Key Idea
The aim of any system should be for all
stakeholders—stockholders, employees,
customers, community, and the
environment—to benefit over the long
term.

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Variation
 Many sources of uncontrollable
variation exist in any process
 Excessive variation results in product
failures, unhappy customers, and
unnecessary costs
 Statistical methods can be used to
identify and quantify variation to help
understand it and lead to
improvements

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Theory of Knowledge
 Knowledge is not possible without
theory
 Experience alone does not establish
a theory, it only describes
 Theory shows cause-and-effect
relationships that can be used for
prediction

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Psychology
 People are motivated intrinsically
and extrinsically; intrinsic
motivation is the most powerful
 Fear is demotivating
 Managers should develop pride and
joy in work

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Deming’s 14 Points (Abridged) (1 of 2)
1. Create and publish a company mission
statement and commit to it.
2. Learn the new philosophy.
3. Understand the purpose of inspection.
4. End business practices driven by price alone.
5. Constantly improve system of production
and service.
6. Institute training.
7. Teach and institute leadership.
8. Drive out fear and create trust.

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Deming’s 14 Points (2 of 2)
9. Optimize team and individual efforts.
10. Eliminate exhortations for work force.
11. Eliminate numerical quotas and M.B.O.
Focus on improvement.
12. Remove barriers that rob people of pride
of workmanship.
13. Encourage education and self-improvement.
14. Take action to accomplish the transformation.

www.deming.org

12
Juran’s Quality Trilogy
 Quality planning
 Quality control
 Quality improvement

www.juran.com
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Key Idea
Juran proposed a simple definition of
quality: “fitness for use.” This definition of
quality suggests that it should be viewed
from both external and internal
perspectives; that is, quality is related to
“(1) product performance that results in
customer satisfaction; (2) freedom from
product deficiencies, which avoids
customer dissatisfaction.”

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Phillip B. Crosby
“Quality is free . . .
... It’s not a gift, but it is free. What
costs money are the unquality things -- all
the actions that involve not doing jobs
right the first time.”

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Crosby Philosophy
Absolutes of Quality Management:
 Quality means conformance to requirements
 Problems are functional in nature
 There is no optimum level of defects
 Cost of quality is the only useful measurement
 Zero defects is the only performance standard

www.philipcrosby.com

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A.V. Feigenbaum
 Three Steps to Quality
 Quality Leadership, with a strong focus on
planning
 Modern Quality Technology, involving the
entire work force
 Organizational Commitment, supported
by continuous training and motivation

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Kaoru Ishikawa
 Instrumental in developing Japanese
quality strategy
 Influenced participative approaches
involving all workers
 Advocated the use of simple visual
tools and statistical techniques

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Genichi Taguchi
 Pioneered a new perspective on quality based on
the economic value of being on target and
reducing variation and dispelling the traditional
view of conformance to specifications:

Loss No Loss Loss

0.480 0.500 0.520

Tolerance
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Growth of Modern Quality
Management

Service Performance
quality excellence
Improved
product designs

Manufacturing
quality

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Key Idea
As consumer expectations have risen, a
focus on quality has permeated other key
sectors of the economy, most notably
health care, education, not-for-profits,
and government.

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Manufacturing Systems (1 of 2)
 Marketing and sales
 Product design and engineering
 Purchasing and receiving
 Production planning and scheduling
 Manufacturing and assembly

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Manufacturing Systems (2 of 2)
 Tool engineering
 Industrial engineering and process
design
 Finished goods inspection and test
 Packaging, shipping, and warehousing
 Installation and service

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Key Idea
Traditional quality assurance systems in
manufacturing focus primarily on technical
issues such as equipment reliability,
inspection, defect measurement, and
process control.

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Relationships in a Typical
Manufacturing System (Fig.2.1)

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Quality in Marketing
Marketing and sales personnel are
responsible for determining the needs
and expectations of consumers.

26
Quality in Product Design
Product design and engineering functions
develop technical specifications for
products and production processes to
meet the requirements determined by the
marketing function.

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 Quality of Design

what was
what manufactured
marketing
suggested

As maintenance
what installed it
management
approved

what the
as designed by customer
engineering wanted
Quality in Purchasing
A purchasing agent should not simply be
responsible for low-cost procurement, but
should maintain a clear focus on the
quality of purchased goods and materials.

29
Quality in Production
Planning & Scheduling
Poor quality often results from time
pressures caused by insufficient
planning and scheduling.

30
Quality in Manufacturing and
Assembly
Both technology and people
are essential to high-quality
manufacturing.

31
Quality in Process Design

Manufacturing processes must be

capable of producing output that
meets specifications consistently.

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Quality in Finished Goods
Inspection and Testing
The purposes of final product inspection
are to judge the quality of manufacturing,
to discover and help to resolve production
problems that may arise, and to ensure
that no defective items reach the customer.

33
Quality in Installation and Service

Service after the sale is one of the

most important factors in establishing
customer perception of quality and
customer loyalty.

34
Quality in Business Support
Functions for Manufacturing
 Finance and accounting
 Quality assurance
 Legal services

35
Key Idea
In many organizations, quality is seldom
considered in financial analysis and
decision making.

36
Key Idea
Every manager is responsible for
studying and improving the quality of the
process for which he or she is
responsible; thus, every manager is a
quality manager.

37
Quality in Services
 Service is defined as “any primary or
complementary activity that does not
directly produce a physical product – that
is, the non-goods part of the transaction
between buyer (customer) and seller
(provider).”

38
Key Idea
In a survey it estimates that the average
company loses as many as 35 percent of
its customers each year, and that about
two-thirds of these are lost because of
poor customer service.

39
Critical Differences Between Service
and Manufacturing (1 of 2)
 Customer needs and performance
standards are more difficult to identify
and measure
 Services requires a higher degree of
customization
 Output is intangible

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Critical Differences Between Service
and Manufacturing (2 of 2)
 Services are produced and consumed
simultaneously
 Customers are often involved in actual
process
 Services are more labor-intensive than
manufacturing
 Services handle large numbers of
transactions

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Key Idea
These differences make it difficult for
many service organizations to apply total
quality principles, and foster misguided
perceptions that quality management
cannot be effectively accomplished in
services.

42
Components of Service System
Quality
 Employees
 Information technology

43
Key Idea
Researchers have repeatedly
demonstrated that when service employee
job satisfaction is high, customer
satisfaction is high, and that when job
satisfaction is low, customer satisfaction is
low.

44
Key Idea
Information technology is essential for
quality in modern service organizations
because of the high volumes of information
they must process and because customers
demand service at ever-increasing speeds.

45
Quality Issues in Health Care
 Avoidable errors
 Underutilization of services
 Overuse of services
 Variation in services

46
Key Idea
Although the national health care system
as a whole may need a sweeping
overhaul, many individual providers have
turned toward quality as a means of
achieving better performance and
customer satisfaction.

47
Quality in Higher Education
Business plays an important role in
fostering quality improvement efforts in
higher education by transferring
knowledge and expertise on quality
processes and implementation practices.

48
Quality in Small Business and
Not-for-Profits
 Slow to adopt quality approaches
 General lack of understanding and
knowledge about quality
 Focus on sales and market growth, cash flow,
and routine fire fighting
 Lack of resources for formal quality systems

49
Key Idea
Perhaps the most important factor in
successful quality initiatives in small
businesses is the recognition by the CEO
or president that a quality focus can be
beneficial and lead to achieving
organizational goals.

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Quality in the Public Sector
 Quality in the Federal Government
 National Quality Institute
 National Productivity Center
 Prime Minister’s Quality Award
 State and Local Quality Efforts

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Key Idea
Quality concepts and principles are
universal and can be applied in all types
of organizations. The difficulty, of
course, is developing an infrastructure
to make it happen and the discipline to
sustain efforts over time.

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