CHAPTER 1

Introduction to Quality

Slide 1.1
INTRODUCTION
 What is quality?
Dictionary has many definitions: “Essential
characteristic,” “Superior,” etc.
Some definitions that have gained wide acceptance
in various organizations: “Quality is customer
satisfaction,” “Quality is Fitness for Use.”

 The American National Standards Institute (ANSI)

and the American Society for Quality (ASQ) define
quality as:
“The totality of features and characteristics of a
product or service that bears on its ability to satisfy
given needs.” 2
WHY QUALITY?
Reasons for quality becoming a cardinal priority for
most organizations:
 Competition – Today’s market demand high quality
products at low cost. Having `high quality’ reputation
is not enough! Internal cost of maintaining the
reputation should be less.
 Changing customer – The new customer is not only
commanding priority based on volume but is more
demanding about the “quality system.”
 Changing product mix – The shift from low volume,
high price to high volume, low price have resulted in
3
a need to reduce the internal cost of poor quality.
WHY QUALITY?
 Product complexity – As systems have
become more complex, the reliability
requirements for suppliers of components
have become more stringent.
 Higher levels of customer satisfaction –
Higher customers expectations are getting
spawned by increasing competition.

Relatively simpler approaches to quality viz.

product inspection for quality control and
incorporation of internal cost of poor quality
into the selling price, might not work for
today’s complex market environment. 4
 Defining Quality
Perfection Fast delivery
Providing a good, usable product
Consistency
Eliminating waste
Doing it right the first time
Delighting or pleasing customers

Total customer service and satisfaction

Compliance with policies and procedures

KEY DIMENSIONS OF QUALITY

Performance Durability
Features Serviceability
Reliability Aesthetics
Conformance Perceived quality
DEFINITIONS OF QUALITY
Transcendent definition:
Most difficult to measure and analyze
“goodness of a product.”
Shewhart’s transcendental definition
of quality – “absolute and universally
recognizable, a mark of
uncompromising standards and high
achievement.”
Examples of products attributing to
this image: Rolex watches, Lexus
cars, Mercedes-Benz
Product-based definition:
quantities of product attributes (the
higher the price, the higher the quality)
“function of a specific, measurable
variable and that differences in quality
reflect differences in quantity of some
product attributes.”
Quality and price perceived
relationship.
Example: measuring the quality of a lap top
by the type of microprocessor chip
 User-based definition:
Quality is determined by what the customer
wants
How well the product performs its intended
function
“fitness for intended use.”
Individuals have different needs and wants,
and hence different quality standards.
Example – Nissan offering ‘dud’ models in
US markets under the brand name Datson
which the US customer didn’t prefer.
Example: Cadillac vs. Jeep
Value-based definition:
Quality vs. price
Example: purchasing generic medicine over
brand-name
“quality product is the one that is as useful
as competing products and is sold at a lesser
price.”
US auto market – Incentives offered by the
Big Three are perceived to be compensation
for lower quality.
Manufacturing-based definition:
Conformance to specifications
Product specifications determined by designers
of products and services
“the desirable outcome of an engineering and
manufacturing practice, or conformance to
specification.”
Engineering specifications are the key!
Example: Coca-cola – “quality is about
manufacturing a product that people can depend
on every time they reach for it.”
QUALITY PERSPECTIVES
transcendent &
product-based user-based
needs
Marketing
Customer
value-based

products Design
and Customer
manufacturing-
services based
Manufacturing
Distribution

Information flow
Product flow
WHAT IS TQM?
A comprehensive,
organization-wide effort to
improve the quality of
products and services,
applicable to all organizations.

13
WHAT IS A CUSTOMER?
Anyone who is impacted by the product
or process delivered by an organization.
External customer: The end user as well
as intermediate processors. Other external
customers may not be purchasers but may
have some connection with the product.
Internal customer: Other divisions of the
company that receive the processed
product.
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WHAT IS A PRODUCT?
The output of the process
carried out by the organization.
It may be goods (e.g.
automobiles, missile), software
(e.g. a computer code, a
report) or service (e.g.
banking, insurance)
 HOW IS CUSTOMER SATISFACTION ACHIEVED?
 Two dimensions: Product features and Freedom
from deficiencies.
 Product features – Refers to quality of design.

Examples in manufacturing industry: Performance,

Reliability, Durability, Ease of use, Aesthetics etc.
Examples in service industry: Accuracy, Timeliness,
Friendliness and courtesy, Knowledge of server etc.
 Freedom from deficiencies – Refers to quality of
conformance.
Higher conformance means fewer complaints and
increased customer satisfaction. 16
CUSTOMER-DRIVEN QUALITY

“Meeting or exceeding customer

expectations”
Customers can be...
Consumers
External customers
Internal customers
IMPORTANCE OF QUALITY
 “The first job we have is to turn out
quality merchandise that consumers will
buy and keep on buying. If we produce it
efficiently and economically, we will earn
a profit, in which you will share.”
- William Cooper Procter
HISTORY OF QUALITY
MANAGEMENT
…To know the future, know the past!
The Age of Craftsmanship
Before Industrial Revolution, skilled
craftsmen served both as
manufacturers and inspectors,
building quality into their products
through their considerable pride in
their workmanship. 19
THE EARLY 20TH CENTURY

Industrial Revolution changed this basic

concept to interchangeable parts. Likes
of Thomas Jefferson and F. W. Taylor
(“scientific management” fame)
emphasized on production efficiency and
decomposed jobs into smaller work
tasks. Holistic nature of manufacturing
rejected!
POST-WORLD WAR II (1940 – 1950)
 After World War II, under General MacArthur's Japan
rebuilding plan, Deming and Juran went to Japan.
 Deming and Juran introduced statistical quality control
theory to Japanese industry.
 The difference between approaches to quality in USA
and Japan: Deming and Juran were able to convince
the top managers the importance of quality.
 Statistical approaches to quality control started at
Western Electric with the separation of inspection
division. Pioneers like Walter Shewhart, George
Edwards, W. Edwards Deming and Joseph M. Juran
were all employees of Western Electric.
Next 20 odd years, when top managers
in USA focused on marketing,
production quantity and financial
performance, Japanese managers
improved quality at an unprecedented
rate.
Market started preferring Japanese
products and American companies
suffered immensely.
22
U.S. Quality Revolution
 America woke up to the quality revolution in early
1980s. Ford Motor Company consulted Dr. Deming to
help transform its operations.
(By then, 80-year-old Deming was virtually unknown in
USA. Whereas Japanese government had instituted The
Deming Prize for Quality in 1950.)
In the 1980s, the following factors helped ignite the U.S.
quality revolution
A recognition that foreign import products possessed

superior quality
The t.v. special entitled “If Japan Can, Why Can’t

We?” 23

The space shuttle Challenger disaster

 Managers started to realize that “quality of
management” is more important than
“management of quality.” Birth of the term Total
Quality Management (TQM).
 TQM – Integration of quality principles into
organization’s management systems.
 Early 1990s: Quality management principles
started finding their way in service industry.
FedEx, The Ritz-Carton Hotel Company were the
quality leaders.
 TQM recognized worldwide: Countries like Korea,
India, Spain and Brazil are mounting efforts to 24
increase quality awareness.
 Key Idea

To meet or exceed customer

expectations, organizations must
fully understand all product and
service attributes that contribute to
customer value and lead to
satisfaction and loyalty.
 FROM PRODUCT QUALITY TO TQM
 In 1970s,General Electric task force studied
consumer perceptions of the quality of various GE
product lines
 Quality must not be viewed only as a technical
discipline but as a management discipline
 “Quality of Management is as important with
Management of Quality
 TQ is a people-focused management system that
aims at a continual increase in customer
satisfaction at continually lower real cost
“TQ is the unyielding and continually
improving effort by everyone in an
organization to understand, meet and
exceed the expectations of customers”

-Procter & Gamble

Total Quality Control- coined by A.V.
Feigenbaum
Company-wide Quality Control- renamed
by Japanese
Total Quality Management- developed by
US Naval Air Systems Command
MANAGEMENT FAILURES

“No, TQM isn’t dead. TQM

failures just prove that bad
management is still alive and
kicking”

-Quality Digest Editor-

PERFORMANCE EXCELLENCE
 Integrated approach to organizational
performance management that results in:
1. Delivery of ever-improving value to customers
and stakeholders, contributing to
organizational sustainability,
2. Improvement of overall organizational
effectiveness and capabilities, and
3. Organizational and personal learning
“Quality is a race
without finish line”
-David Kearns, former XEROX president
various countries put effort in
spreading awareness about quality
Quality requires persistence,
discipline & steadfast leadership
committed to excellence
8 KEY FORCES THAT WILL INFLUENCE
THE FUTURE OF QUALITY -ASQ-
1. Global Responsibility
2. Consumer Awareness
3. Globalization
4. Increasing Rate of Change
5. Workforce of the future
6. Aging Population
7. 21st Century Quality
8. Innovations
QUALITY IN MANUFACTURING
o QM is rooted in manufacturing Functional

Relationship in a typical manufacturing system

 QUALITY IN SERVICE ORGANIZATIONS
o Lag 10 years behind manufacturing in
implementing quality
o The cost of acquiring new customers is

much higher than the cost of retaining

customers
o High employee turn-over rate makes

establishing a culture for quality more

difficult
 CONTRAST WITH MANUFACTURING
1. Customer needs and performance standards are difficult to
identify and measure
2. Production of service requires high customization not
uniformity
3. Intangible output cannot be recalled, just apologies
4. Services are produced and consumed simultaneously,
cannot be inspected before delivery
5. Customers are involved in the service process
6. Service is labor-intensive, human interaction is vital
7. Handle large number of customer transactions, hence more
tendency for error
COMPONENTS OF SERVICE QUALITY

1. People
2. Technology

“If we take care of our people, they will

take care of our customers”
-service organization motto-
QUALITY IN BUSINESS SUPPORT
FUNCTIONS

1. Finance and Accounting

2. Legal Services
3. Quality Assurance
 QUALITY AS IMPORTANT SOURCE OF
COMPETITIVE ADVANTAGE
 Driven by customer wants and needs
 Makes significant contribution to business
success
 Matches organization’s unique resources with
opportunities
 Is durable and lasting
 Provides basis for further improvement
 Provides direction and motivation
QUALITY AND PROFITABILITY

Improved quality Improved quality

of design of conformance

Higher perceived Higher Lower

value prices manufacturing
and service costs
Increased market Increased
share revenues

Higher profitability
QUALITY AND PERSONAL VALUES

 Personal initiative has a positive impact on

business success
 Quality begins with personal attitudes
 Quality-focused individuals often exceed
customer expectations
Example: Walt Disney World/Retainer
 Attitudescan be changed through awareness
and effort (e.g., personal quality checklists)
Thank you…

GOD bless