CHAPTER -6

QUALITY MANAGEMENT
AND CONTROL
Ataklty Adugna (Ass. Professor)
Mekelle University
College of Business and
Economics
Department of Management
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 7.1. QUALITY MANAGEMENT
7.1.1. Introduction
• High-quality products are reliable, dependable, and
satisfying, they do the job they were designed for and
meet customer requirements.
• Managers seek to control and improve the quality of
their organization’s products for two fundamental
Reasons:
1) customers usually prefer a higher-quality product to a
lower-quality product.
2) The second reason for trying to boost product quality
is that higher product can increase efficiency and
thereby lower operating costs and boost profits.
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 Cont.
7.1.2. Meaning of Quality
 The notion of quality has been defined
in different ways by various authors.
 Garvin identified a framework of the
following eight attributes that may be
used to define quality: performance,
features, reliability, conformance,
durability, serviceability, aesthetics,
and perceived quality.
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 Cont.
• According to Crosby quality is conformance
to requirements or specifications and
• Juran defined quality as fitness for use.
• Fitness for use is related to benefits
received by the customer and to
customer satisfaction. Only the
customer, not the producer, can
determine it (Schroeder, 2000).
• According to Schroeder (2000), customer
satisfaction is a relative concept that varies
from one customer to another and from time
to time given a specified customer.
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 Cont.
• The implication for production managers is,
therefore, to first identify quality
specifications defined by customers and
continuously evaluate and monitor quality
performance of the products they produce.

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7.1.3. Determinants of Quality
• The degree to which a product or a
service successfully satisfies its
intended purpose has four primary
determinates.
• These are:
1. Design
2. How well it conforms to the design
3. Ease of use
4. Service after delivery
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 Cont’d
1. Design
• Design involves decision regarding
specific characteristics of a product or
service such as:
• Size
• shape
• Location
• color, and
• weight etc
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 Cont’d
2. How well it conforms to the design
• Quality of conformance refers to the degree
to which goods and services conform the
intent of the designers.
3. Ease of use
 The determination of quality does not stop
once the product or service has been sold or
delivered.
 Instruction
4. Service after delivery
• Warranty 8
 7.1.4. The Costs of Quality

1. Internal failure costs

2. External failure costs
3. Appraisal costs
4. Prevention costs

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 Costs of Quality
Appraisal Costs

Costs of
External Failure Quality Prevention Costs
Costs

Internal Failure
Costs
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 Cost of Quality
• Cost of Achieving Good Quality
– Prevention costs
• costs incurred during product design
– Appraisal costs
• costs of measuring, testing, and analyzing
• 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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 Prevention Costs
• Quality planning costs • Training costs
– costs of developing – costs of developing
and implementing and putting on quality
quality management training programs for
program
employees and
• Product-design costs management
– costs of designing
products with quality • Information costs
characteristics – costs of acquiring and
• Process costs maintaining data
– costs expended to related to quality, and
make sure productive development of
process conforms to reports on quality
quality specifications performance

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 Appraisal Costs
• Inspection and testing
– costs of testing and inspecting materials,
parts, and product at various stages and at
end of 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

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 Internal Failure Costs
• Scrap costs • Process downtime
– costs of poor-quality costs
products that must be – costs of shutting
discarded, including
labor, material, and down productive
indirect costs process to fix
• Rework costs problem
– costs of fixing defective • Price-downgrading
products to conform to
quality specifications costs
• Process failure costs – costs of discounting
– costs of determining poor-quality products
why production —that is, selling
process is producing products as
poor-quality products “seconds”
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 External Failure Costs
• Customer complaint • Product liability costs
costs – litigation costs
– costs of investigating resulting from product
and satisfactorily
responding to a liability and customer
customer complaint injury
resulting from a poor- • Lost sales costs
quality product
– costs incurred
• Product return costs because customers
– costs of handling and are dissatisfied with
replacing poor-quality poor quality products
products returned by and do not make
customer
additional purchases
• Warranty claims costs
– costs of complying with
product warranties
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7.1.5.Quality Circles and Quality Improvement
Teams
• A quality circle is a typical informal group of
people that consists of operators,
supervisors, managers, and so on, who get
together to improve ways to make the
product or deliver the service.
• The quality improvement team, on the other
hand, is cross-functional in nature and
involve people from various disciplines and
organized to identify feasible solutions to
quality problems.

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 7.1.6. International Quality Documentation
Standards (Documentation Standards)
• ISO 9000
• The purpose of the international organization for
standards (ISO) is to promote worldwide standards
that will
• improve operating efficiency,
• improve productivity and
• reduce costs.
• ISO 9000 series is a set of international standards on
quality management and quality assurance.
• ISO 9000 certification involves several steps starting
from identification of international quality standards
through certifying the producer.
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 Cont.
• A key requirement for registration is
that a company review, refine, and map
functions such as process control,
inspection, purchasing, training,
packaging, and delivery.
• Registered companies face an ongoing
series of audits, and they must be
registered every three years.

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7.1.7. ISO 14000- An Environmental
Management System

• The ISO 14000 documentation

standards require participating
companies to keep track of their raw
materials use and their generation,
treatment, and disposal of hazardous
wastes.

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 7.1.8. Total Quality Management
(TQM)
• TQM is a philosophy of perpetual
improvement. It is the foundation for
activities which include:
• Meeting customer requirements
• Reducing development cycle times
• Just in time/demand flow manufacturing
• Improvement teams
• Reducing product and service costs
• Improving administrative systems training
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 TQM has the following main principles:
• Quality can and must be managed.
• Everyone has a customer and is a supplier
• Processes, not people are the problem
• Every employee is responsible for quality
• Problems must be prevented, not just fixed.
• Quality must be measurable and measured
• Quality improvements must be continuous
• The quality standard is defect free
• Goals are based on requirements, not
negotiated.
• Management must be involved and lead
• Plan and organize for quality improvement
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 7.2.QUALITY CONTROL
Introduction:
• Quality control may generally be defined as a
system that is used to maintain a desired
level of quality in a product or service.
• This task may be achieved through different
measures such as planning, design use of
proper equipment and procedures,
inspection, and taking corrective action in
case a deviation is observed between the
product, service or process output and a
specified standard.
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7.2.2. Quality Control and Improvement

• Design of Quality Control Systems:

• Steps:
1.Identification of the process
• All quality control must start with the process
itself.
• A process can be an individual machine, a group
of machines, or any of the many clerical and
administrative processes that exist in the
organization.
• Each of these process has its own internal
customers and its own products or services that
are produced.

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 Cont’d
2. Identification of the critical control points
These can be identified where inspection or measurement
should take place.
• The control points can be the
• Inputs
• work in process and/or
• the outputs of the production system.
3. Deciding on the type of measurement to be used at
each inspection point
• There are two options:
• Measurement based either on variables or on
attributes.
a. Variable measurement: utilizes a continuous
scale by measuring for such factors as length, height
and weights.
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b. Attribute measurement
• uses a discrete scale by counting the number of
defective items or the number of defects per unit.
4. Deciding on the amount of inspection to use
 Sample vs Population inspection

5. Deciding who should do the inspection

 Internal vs external auditors

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 Process Quality Control

• Process quality control utilizes inspection (or

testing) of the product or service while it is
being produced.
• Periodic samples of the output of a
production process are taken.
• after inspection of the sample, there is
reason to believe that the process
quality characteristics have changed,
the process is stopped and a search is
made for an assignable cause.
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 Cont.
• This cause could be a change in the operator, the
machine, or the material.
• When the cause has been found and corrected, the
process is started again.
• A process can be brought to a state of control and
can be maintained in this state through the use of
quality control charts/also called process charts/ as
shown below:

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 Cont…
• Statistical process control methods extend the use
of descriptive statistics to monitor the quality of the
product and process.
• Using statistical process control, we want to
determine the amount of variation that is common
or normal.
• we want to make sure the process is in a state of
control.
• The most commonly used tool for monitoring the
production process is a control chart.

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 Developing Control Charts
• A control chart (also called process chart or
quality control chart) is a graph that shows
whether a sample of data falls within the
common or normal range of variation.
• A control chart has upper and lower control limits
that separate common from assignable causes
of variation.
• We say that a process is out of control when a
plot of data reveals that one or more samples fall
outside the control limits.

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Cont…

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 Types of Quality Control Charts

I. For Variables
 When variable measurement is used, two control charts are
needed: one for the central tendency, and the other for variability
of the process.

 Measures of such quality characteristics are assumed to form a

normal distribution and hence, have two parameters, mean and
variance.

 Measures of such quality characteristics have to be evaluated

using both parameters.

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 Mean Charts and Range charts

1. Mean Charts
Steps:
1. Determine the sample size to inspect
2. Determine the number of times you are to take the
predetermined sample size
3. Conduct the inspection by measuring the quality
characteristic for each unit in the sample
4. Calculate the average and range of quality
characteristic measures for each sample
5. Calculate the grand average: central line for both
parameters
6. Calculate the Upper and lower control limits for both
parameters
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Cont…

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Cont…

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Cont…

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Example

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 2. Range Charts
• .

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Example

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Cont…

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 2. FOR ATTRIBUTES

• Control charts for attributes are used to

measure quality characteristics that are
counted rather than measured.

• Attributes are discrete in nature and entail

simple yes-or-no decisions.

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i. P-Chart
• P-charts are used to measure the
proportion of items in a sample that are
defective.
• P-charts are appropriate when both the
number of defectives measured and the
size of the total sample can be counted.
• A proportion can then be computed and
used as the statistic of measurement.

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Cont…

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Cont…

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 ii. C-Chart
• C-charts are used to monitor the number of
defects per unit.
• The CL, UCL, and LCL are calculated as follows:

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Example

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.

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