QUALITY MANAGEMENT

Date: 26th May 2021

 What is Quality?
 The concept of quality is subjective and difficult
to define

 Certain aspects of quality can be identified

 Ultimately, the judgement of quality rests with

the customer
 CUSTOMER-DRIVEN QUALITY

 A simpler, more powerful definition came

up….

“ Quality is meeting or exceeding

customer expectations ”
 What is Quality?
The International Organization for Standardization (ISO)
defines quality as the totality of characteristics of an entity
that bear on its ability to satisfy stated (confirmed) or
Implied (indirect) needs.
 Quality
means
pleasing consumers

not
just protecting them
from annoyances
 Quality
is an ever-changing state
(i.e., what is considered
quality today may not be good
enough to be considered
quality tomorrow!)
 Quality Evolution in Japan
Determining the customer’s
needs before the customer Fitness to Latent
becomes aware of them Requirements

Fitness to
Cost

To build a product that Obtain high quality & low cost

Fitness to by effective designing of both
meets the needs of
Use the product & processes.
customer.

Fitness to
Standards
To build a product that meets
the specifications set by the
designer.
 PRINCIPAL QUALITY
DIMENSIONS
1. Performance
2. Features
3. Reliability
4. Conformance
5. Durability
6. Serviceability
7. Aesthetics
8. Perceived quality
PRINCIPAL QUALITY DIMENSIONS

 Performance:
 a product’s primary operating
characteristics. Example: A car’s
acceleration, braking distance,
steering and handling
 PRINCIPAL QUALITY
DIMENSIONS
 Features:
 the “bells and whistles” of a product.
A car may have power options, a tape
or CD deck, antilock brakes, and
reclining seats
PRINCIPAL QUALITY DIMENSIONS

 Reliability:
 the probability of a product’s surviving
over a specified period of time under
stated conditions of use. A car’s ability
to start on cold days and frequency of
failures are reliability factors
PRINCIPAL QUALITY DIMENSIONS

 Conformance:
 the degree to which physical and
performance characteristics of a
product match pre-established
standards.
 car’s fit/finish, freedom from noises
can reflect this.
PRINCIPAL QUALITY DIMENSIONS

 Durability:
 the amount of use one gets from a
product before it physically
deteriorates or until replacement is
preferable.
 For car - corrosion resistance & long
wear of upholstery fabric
PRINCIPAL QUALITY DIMENSIONS

 Serviceability:
 speed, courtesy, competence of
repair work.
 auto owner -access to spare parts.
PRINCIPAL QUALITY DIMENSIONS

 Aesthetics:
 how a product looks, feels, sounds,
tastes, or smells.
 car’s color, instrument panel design
and “feel of road” –
 make aesthetically pleasing
PRINCIPAL QUALITY DIMENSIONS

 Perceived Quality:
 Subjective assessment of quality
resulting from image, advertising, or
brand names.
 car, - shaped by magazine reviews-
manufacturers’ brochures
 CUSTOMER-DRIVEN
QUALITY IN THE 1980s
 Quality was defined as…

“ The totality of features and

characteristics of a product or service
that bears on its ability to satisfy
given needs ”
 CUSTOMER-DRIVEN
QUALITY IN THE 1990s
 A simpler, more powerful definition came
up….

“ Quality is meeting or exceeding

customer expectations ”
 QUALITY ASSURANCE
DEMING’S PDCA CYCLE

PLAN

WHAT IS NEEDED?

ACTION DO

WHAT HAVE YOU CARRY OUT SMALL CHANGES

LEARNED?
CHECK

AUDIT WHAT HAS OCCURED

 A Manager Who Fails To Provide
Resources And Time For Prevention
Activities Is Practicing False Economy
Concentrate on Prevention, Not Correction

Prevention
Correction

Quality

Prevention has more leverage when improving quality

 QUALITY IS FREE !
According to Crosby:

 Quality is not only free, it is profit maker

 Increase of 5% -10% in profitability by
concentrating on quality
 Quality provides a lot of money for free
 Cost of Poor Quality
 Prevention costs
 build it right the first time

 Appraisal costs
 inspection and testing

 Internal failure costs

 scrap and rework

 External failure costs

 warranty claims, recalls, lost business
 Cost of Poor Quality

 Prevention costs:
 These are planned costs an organization incurs to ensure that
errors are not made at any stage during the Production and
ultimately delivery process of that product or service to a
customer.
 Examples: Quality planning costs, education and training costs,
quality administration staff costs, process control costs, market
research costs, field testing costs and preventive maintenance
costs.
 The costs of preventing mistakes are always much lesser than the
costs of inspection and correction.
 Cost of Poor Quality

 Appraisal costs:
 These include the costs of verifying, checking or evaluating a
product or service during the delivery process.

 Examples: internal production audit costs, test and inspection

costs, instrument maintenance costs, supplier evaluation costs,
and audit report costs.
 Cost of Poor Quality

 Failure costs:
 A company incurs these costs because the product or service did
not meet the requirements and had to be fixed or replaced, or the
service had to be repeated.
 These failure costs can be further subdivided into two groups:
 Internal Failures:
 Internal failures include all costs resulting from the failures found
before the product or service reaches the customer.
 Examples: scrap and rework costs, repair costs, and corrective
action costs from nonconforming product or service.
 Cost of Poor Quality

 External failures:

 External failures occur when the customer finds the failure.

 Examples: warranty claim costs, customer complaint costs,

shipping costs, and customer follow-up costs.

 Cost of Poor Quality

 Total Quality cost, is a combination of prevention,

appraisal & failure. Reducing any of these reduces total.

 Key to minimum cost, is striking correct balance b/w

three.
 Clearly prevention reduces both appraisal and failure
costs
 COMPARATIVE COST OF QUALITY

Most
costly
$ Less
costly $
Least
costly $
The company’s quality
The customer The manufacturer mgmt system is
finds defects Or service org. designed, planned,
in delivered Finds & corrects & organized for
parts/ services defects internally defect prevention &
continuous quality
improvement.