Unit 2 (QM)
Unit 2 (QM)
Unit 2 (QM)
What is prototype?
A prototype is a preliminary version or model of a product, system, or concept that is created to test and
evaluate its design, functionality, and feasibility before full-scale production or implementation. It serves
as a tangible representation of the final product, allowing designers, engineers, and stakeholders to
visualize and interact with it in a real-world context.
The organization structure and design of quality management play a crucial role in
ensuring that quality objectives are effectively implemented, monitored, and maintained
throughout an organization. Here's a note on the organization structure and design of
quality management:
Organization Structure:
Organization Design:
Explain the following with example: (i). quality value and contribution, (ii). Quality cost and its
optimization.
Quality value refers to the benefits or added value that high-quality products or services
provide to customers. It encompasses factors such as reliability, performance,
durability, and customer satisfaction. Quality contribution, on the other hand, refers to
the impact of quality on business performance, including factors such as profitability,
market share, and competitive advantage.
Example: Consider a smartphone manufacturer that produces two models: Model A and
Model B. Model A is of higher quality, with a longer battery life, faster processing speed,
and more durable construction compared to Model B, which is of lower quality.
● Quality Value: Customers perceive Model A as offering higher value due to its
superior features and performance. They are willing to pay a premium price for
Model A because they believe it provides better value for their money in terms of
reliability, functionality, and user experience.
● Quality Contribution: By producing high-quality products like Model A, the
smartphone manufacturer gains a competitive advantage in the market.
Customers prefer Model A over competitors' products, leading to increased sales,
market share, and brand reputation. As a result, the company achieves higher
profitability and sustainable growth compared to if it had focused solely on
producing lower-quality products like Model B.
In this example, quality value is reflected in the superior features and performance of
Model A, while quality contribution is demonstrated by the positive impact of
high-quality products on the company's market position and financial performance.
Quality cost refers to the total cost incurred by an organization to ensure product or
service quality throughout the entire production process. It includes both the costs of
preventing defects and the costs of correcting defects. Quality cost optimization
involves minimizing these costs while maximizing the overall quality of products or
services.
1. Prevention Costs: These are costs incurred to prevent defects from occurring in
the first place. Examples include training employees on quality control
procedures, implementing quality management systems, conducting quality
audits, and performing supplier evaluations.
2. Appraisal Costs: These are costs incurred to assess and evaluate product quality
during and after production. Examples include inspection and testing activities,
quality control equipment and tools, and quality assurance personnel salaries.
3. Internal Failure Costs: These are costs incurred as a result of defects found
before products are delivered to customers. Examples include rework, scrap,
warranty repairs, and product recalls.
4. External Failure Costs: These are costs incurred as a result of defects found after
products are delivered to customers. Examples include customer complaints,
returns, repairs, replacements, legal liabilities, and damage to brand reputation.
The House of Quality (HOQ) is a powerful tool used in Quality Function Deployment
(QFD) to translate customer needs into actionable product or service design features.
It's essentially a roadmap that bridges the gap between what customers desire and the
technical specifications required to deliver it. Let's delve deeper into its structure and
how it facilitates product development:
Enumerate the various steps to be taken in the planning of cost reduction programs.
1. Identify Cost Drivers: Analyze the organization's expenses to identify the major
cost drivers or areas where costs are highest. This could include materials, labor,
overhead, utilities, transportation, etc.
2. Set Clear Objectives: Define specific, measurable, achievable, relevant, and
time-bound (SMART) objectives for the cost reduction program. Determine the
target cost savings and timeline for implementation.
3. Conduct Cost Analysis: Conduct a detailed analysis of current expenses to
understand where costs can be reduced. This may involve reviewing financial
statements, budget reports, operational processes, and procurement practices.
4. Prioritize Opportunities: Prioritize cost reduction opportunities based on their
potential impact and feasibility. Focus on areas where cost reductions can be
achieved with minimal disruption to operations and customer satisfaction.
5. Engage Stakeholders: Involve key stakeholders, including management,
department heads, employees, and suppliers, in the planning process. Gain their
input and support to ensure buy-in and collaboration throughout the cost
reduction initiative.
6. Brainstorm Solutions: Facilitate brainstorming sessions or workshops to
generate ideas for cost reduction. Encourage creative thinking and
problem-solving to identify innovative solutions and cost-saving opportunities.
7. Evaluate Alternatives: Evaluate different cost reduction strategies and
alternatives based on their effectiveness, feasibility, and potential risks. Consider
both short-term and long-term implications of each option.
8. Develop Action Plans: Develop detailed action plans outlining specific tasks,
responsibilities, timelines, and resources required for implementing cost
reduction initiatives. Assign accountability for each task and monitor progress
regularly.
9. Implement Changes: Implement the identified cost reduction measures and
initiatives according to the action plans. Communicate changes to employees
and stakeholders and provide necessary training or support to ensure successful
implementation.
10.Monitor and Measure Results: Continuously monitor and measure the results of
the cost reduction program against established objectives and targets. Track key
performance indicators (KPIs) to assess progress and identify areas for further
improvement.
11.Adjust and Adapt: Be flexible and responsive to changing circumstances and
market conditions. Adjust the cost reduction strategies and tactics as needed to
address emerging challenges and opportunities.
12.Celebrate Successes: Recognize and celebrate achievements and milestones
reached throughout the cost reduction program. Acknowledge the contributions
of individuals and teams involved in driving cost savings and sustaining
improvements.
1. Quality Function:
● Definition: The quality function refers to the organizational structure,
processes, and activities put in place to ensure that products or services
meet or exceed customer expectations.
● Concept:
1. Establishing quality objectives and standards: Clearly defining
what constitutes quality for the organization.
2. Implementing quality control measures: Monitoring and inspecting
processes to identify and rectify defects or deviations from
standards.
3. Continuous improvement: Adopting methodologies like Six Sigma
or Total Quality Management (TQM) to continuously enhance
quality.
4. Customer focus: Placing emphasis on meeting customer needs
and expectations.
5. Cross-functional collaboration: Involving various departments in
quality-related activities to ensure holistic improvement.
6. Training and development: Providing employees with the necessary
skills and knowledge to maintain quality standards.
7. Quality assurance: Implementing systems and processes to
prevent defects rather than detecting and correcting them.
8. Feedback loop: Gathering and analyzing data on quality
performance to identify areas for improvement.
9. Supplier management: Ensuring that suppliers adhere to quality
standards to maintain product consistency.
10.Leadership commitment: Top management demonstrating a
commitment to quality through resource allocation and support.
2. Decentralization:
● Definition: Decentralization refers to the distribution of decision-making
authority across various levels of an organization rather than
concentrating it at the top.
● Concept:
1. Empowerment: Delegating decision-making power to lower-level
employees to promote autonomy and initiative.
2. Flexibility: Allowing departments or divisions to respond quickly to
local needs and changes in the market.
3. Faster decision-making: Decisions can be made more promptly as
they don't need to go through multiple layers of hierarchy.
4. Innovation: Encouraging innovation by giving employees the
freedom to experiment and try new approaches.
5. Accountability: Holding individuals or teams accountable for their
decisions and outcomes.
6. Risk management: Spreading decision-making authority can
mitigate risks by avoiding dependence on a single point of failure.
7. Customer focus: Departments can tailor their decisions and actions
to better meet the needs of specific customer segments.
8. Organizational learning: Encouraging learning and development at
all levels of the organization by allowing individuals to make
decisions and learn from their experiences.
9. Adaptability: Facilitating adaptation to changes in the external
environment by enabling quick responses at various levels.
10.Coordination mechanisms: Implementing systems and processes
to ensure coordination and coherence across decentralized units.
3. Designing and Fitting:
● Definition: Designing and fitting involve creating products or services that
align with customer needs and preferences while also ensuring that they
can be produced efficiently and effectively.
● Concept:
1. Market research: Conducting thorough research to understand
customer needs, preferences, and trends.
2. Product design: Developing product specifications that fulfill
customer requirements while considering factors like functionality,
aesthetics, and cost.
3. Prototyping: Building prototypes to test and refine product designs
before full-scale production.
4. Manufacturing process design: Designing production processes
that optimize efficiency, minimize waste, and ensure quality.
5. Supply chain integration: Collaborating with suppliers to ensure the
availability of materials and components that meet design
specifications.
6. Cost optimization: Balancing product features and quality with
production costs to maximize value for customers and profitability
for the company.
7. Customization: Offering customization options to cater to diverse
customer needs and preferences.
8. Technology adoption: Leveraging technology to streamline design
processes, enhance product functionality, and improve
manufacturing efficiency.
9. Sustainability: Integrating sustainable design principles to minimize
environmental impact throughout the product lifecycle.
10.Continuous improvement: Iteratively refining product designs and
production processes based on feedback from customers, market
trends, and internal performance metrics.
4. Organization for Different Types of Products and Companies:
● Definition: Organizing for different types of products and companies
involves structuring the organization in a way that best supports the
specific characteristics and requirements of the products or services
offered and the industry in which the company operates.
● Concept:
1. Functional structure: Organizing departments based on specialized
functions such as marketing, production, and finance.
2. Product-based structure: Structuring the organization around
product lines or categories to focus resources and expertise on
specific product offerings.
3. Matrix structure: Combining functional and product-based
structures to facilitate collaboration and resource sharing across
different units.
4. Divisional structure: Dividing the organization into
semi-autonomous divisions or business units, each responsible for
its own products, markets, or geographic regions.
5. Hybrid structure: Adopting a flexible organizational structure that
adapts to the unique needs and dynamics of the products and
markets served.
6. Agile organization: Embracing agility and flexibility to respond
quickly to changes in market demand and technology.
7. Scalability: Designing the organization to accommodate growth
and expansion into new markets or product categories.
8. Customer-centricity: Organizing around customer segments or
market segments to better serve diverse customer needs and
preferences.
9. Industry-specific expertise: Building specialized teams or units
with deep industry knowledge and experience to address the
unique challenges and opportunities of specific industries.
10.Continuous evaluation and adaptation: Regularly assessing the
effectiveness of the organizational structure and making
adjustments as needed to ensure alignment with business goals
and market conditions.
5. Economics of Quality Value and Contribution:
● Definition: The economics of quality value and contribution refer to the
economic principles and calculations used to assess the costs and
benefits of quality management initiatives.
● Concept:
1. Cost of quality (COQ) analysis: Identifying and categorizing the
costs associated with achieving and maintaining product quality,
including prevention costs, appraisal costs, internal failure costs,
and external failure costs.
2. Return on investment (ROI) of quality: Evaluating the financial
returns generated by investments in quality improvement initiatives,
such as increased customer satisfaction, higher market share, and
reduced warranty claims.
3. Total cost of ownership (TCO): Considering the total cost incurred
over the entire lifecycle of a product or service, including
acquisition costs, operating costs, maintenance costs, and disposal
costs, to make informed decisions about quality investments.
4. Value-based pricing: Setting prices based on the perceived value of
the product or service to customers, taking into account factors
such as quality, features, and brand reputation.
5. Customer lifetime value (CLV): Estimating the value of a customer
to the business over the entire duration of the customer
relationship, considering factors such as purchase frequency,
average transaction value, and customer retention rates.
6. Cost-benefit analysis: Comparing the costs of implementing quality
improvement initiatives with the anticipated benefits, such as
reduced defects, increased productivity, and higher customer
loyalty, to determine the feasibility and profitability of quality
investments.
7. Opportunity cost: Considering the potential benefits foregone by
choosing one quality initiative over another, or by allocating
resources to quality improvement efforts instead of other strategic
priorities.
8. Competitive advantage: Recognizing the role of quality in
differentiating products or services from competitors and attracting
customers willing to pay a premium for superior quality.
9. Risk management: Assessing the financial risks associated with
poor quality, such as product recalls, legal liabilities, and damage to
brand reputation, to justify investments in quality assurance and
risk mitigation.
10.Continuous monitoring and adjustment: Regularly reviewing and
updating economic evaluations of quality initiatives based on
changes in market conditions, technological advancements, and
competitive dynamics.
6. Quality Cost:
● Definition: Quality costs refer to the expenses incurred by a company in
ensuring that its products or services meet predefined quality standards.
● Concept:
1. Prevention costs: Expenses associated with activities aimed at
preventing defects from occurring in the first place, such as quality
planning, training, process improvement, and supplier quality
management.
2. Appraisal costs: Costs incurred to assess the level of conformance
to quality standards, including inspection, testing, calibration of
equipment, and audits.
3. Internal failure costs: Costs resulting from defects or
non-conformities discovered before products are delivered to
customers, such as rework, scrap, repair, and downtime.
4. External failure costs: Costs arising from defects or
non-conformities discovered after products have been delivered to
customers, including warranty claims, product recalls, customer
complaints, and loss of goodwill.
5. Cost of poor quality (COPQ): The sum of internal failure costs and
external failure costs, representing the total cost incurred as a
result of quality-related issues.
6. Cost of good quality (COGQ): The sum of prevention costs and
appraisal costs, representing the total cost incurred to achieve and
maintain conformance to quality standards.
7. Trade-off analysis: Balancing the costs of prevention and appraisal
with the costs of internal and external failures to optimize the
overall cost of quality.
8. Cost allocation: Allocating quality costs to specific products,
processes, or departments to identify areas of improvement and
measure the effectiveness of quality management efforts.
9. Cost reduction strategies: Implementing initiatives to minimize
quality costs, such as defect prevention, process optimization,
supplier collaboration, and continuous improvement.
10.Cost-benefit analysis: Evaluating the financial impact of quality
costs on overall profitability and competitiveness, considering both
short-term expenses and long-term benefits.
7. Optimizing Quality Cost:
● Definition: Optimizing quality costs involves minimizing the total cost of
quality while maximizing the value delivered to customers and the
profitability of the organization.
● Concept:
1. Cost-benefit analysis: Evaluating the costs and benefits of quality
improvement initiatives to identify opportunities for cost
optimization.
2. Root cause analysis: Identifying the underlying causes of
quality-related issues to implement targeted interventions that
address the root causes and prevent recurrence.
3. Continuous improvement: Implementing a culture of continuous
improvement to systematically identify inefficiencies, reduce waste,
and enhance quality across all aspects of the organization.
4. Process optimization: Streamlining processes to eliminate
redundant steps, reduce cycle times, and improve efficiency without
compromising quality.
5. Supplier collaboration: Working closely with suppliers to ensure the
timely delivery of high-quality materials and components at
competitive prices.
6. Lean principles: Applying lean principles such as value stream
mapping, 5S, and just-in-time production to eliminate waste and
optimize resource utilization.
7. Six Sigma methodologies: Utilizing Six Sigma methodologies such
as DMAIC (Define, Measure, Analyze, Improve, Control) and DFSS
(Design for Six Sigma) to systematically improve processes and
reduce variation.
8. Total quality management (TQM): Implementing TQM principles
such as employee empowerment, customer focus, and continuous
learning to drive quality improvement initiatives.
9. Cost-effective technology adoption: Leveraging technology
solutions such as automation, data analytics, and digitalization to
improve quality and efficiency while minimizing costs.
10.Performance measurement and feedback: Establishing key
performance indicators (KPIs) to monitor quality-related metrics
and provide feedback for ongoing improvement efforts.
8. Seduction Program:
● Definition: A seduction program refers to a strategic initiative aimed at
enticing customers to choose a particular product or service over
competitors' offerings through persuasive marketing tactics and value
propositions.
● Concept:
1. Market segmentation: Identifying and targeting specific customer
segments with tailored marketing messages and offers based on
their needs, preferences, and behavior.
2. Value proposition: Communicating the unique value that the
product or service offers to customers, highlighting features,
benefits, and advantages over competing alternatives.
3. Branding and positioning: Establishing a strong brand identity and
positioning the product or service in the minds of customers as the
preferred choice within its category.
4. Promotion and advertising: Creating compelling promotional
campaigns and advertising materials to generate awareness,
interest, and desire among target customers.
5. Pricing strategy: Pricing the product or service competitively while
also emphasizing its value proposition to justify premium pricing if
applicable.
6. Distribution channels: Selecting distribution channels that reach
target customers effectively and provide convenient access to the
product or service.
7. Customer experience: Ensuring a positive and memorable
customer experience at every touchpoint, from initial engagement
to post-purchase support.
8. Relationship building: Building long-term relationships with
customers through personalized interactions, loyalty programs, and
customer relationship management (CRM) initiatives.
9. Differentiation: Highlighting unique features or attributes of the
product or service that set it apart from competitors and appeal to
target customers.
10.Continuous improvement: Monitoring customer feedback and
market trends to refine the seduction program and adapt to
changing customer needs and preferences.
9. Attitude of Top Management:
● Definition: The attitude of top management refers to the beliefs, values,
and behaviors exhibited by senior leaders within an organization regarding
the importance of quality management and their commitment to fostering
a culture of quality throughout the organization.
● Explanation:
1. Leadership by example: Top management sets the tone for quality
management by demonstrating their commitment to quality
through their actions and decisions.
2. Resource allocation: Management allocates adequate resources,
including financial, human, and technological resources, to support
quality improvement initiatives.
3. Communication of vision: Top management communicates a clear
vision and mission statement emphasizing the organization's
commitment to delivering high-quality products or services.
4. Establishment of policies and objectives: Management establishes
quality policies and objectives that align with organizational goals
and demonstrate a commitment to meeting customer needs and
expectations.
5. Support for continuous improvement: Management encourages
and supports initiatives aimed at continuous improvement in
quality management processes, products, and services.
6. Recognition and reward: Management acknowledges and rewards
individuals and teams for their contributions to quality
improvement, reinforcing the importance of quality throughout the
organization.
7. Accountability: Management holds themselves accountable for
quality performance and takes responsibility for addressing any
shortcomings or failures in quality management.
8. Openness to feedback: Management fosters an environment where
employees feel comfortable providing feedback and raising
concerns related to quality issues without fear of retribution.
9. Training and development: Management invests in training and
development programs to enhance employees' understanding of
quality management principles and practices.
10. Continuous monitoring and review: Management regularly
monitors and reviews quality performance metrics to assess
progress toward quality objectives and identify areas for
improvement.
10.Cooperation of Groups:
● Definition: Cooperation of groups refers to the collaboration and
teamwork among different departments, teams, and individuals within an
organization to achieve common quality objectives and deliver high-quality
products or services.
● Explanation:
1. Cross-functional collaboration: Departments and teams work
together across functional boundaries to address quality-related
issues and improve processes.
2. Shared goals and objectives: Groups align their goals and
objectives with the overall quality objectives of the organization to
ensure consistency and synergy.
3. Clear communication: Open and transparent communication
channels facilitate the exchange of information and ideas among
groups, enabling better coordination and problem-solving.
4. Respect for diverse perspectives: Recognizing and valuing the
unique skills, experiences, and viewpoints of individuals and teams
contribute to a culture of collaboration and mutual respect.
5. Conflict resolution: Effective conflict resolution mechanisms help
address disagreements or disputes that may arise during
collaborative efforts, allowing groups to move forward toward
shared goals.
6. Role clarity: Clearly defined roles and responsibilities within groups
prevent confusion and duplication of efforts, enabling efficient
collaboration.
7. Supportive leadership: Leaders promote a culture of cooperation
by providing guidance, support, and resources to facilitate
teamwork and collaboration.
8. Shared accountability: Groups hold themselves collectively
accountable for achieving quality objectives and delivering results,
fostering a sense of ownership and responsibility.
9. Celebrating successes: Recognizing and celebrating achievements
and milestones reached through collaborative efforts reinforce the
importance of teamwork and cooperation.
10. Continuous improvement: Groups regularly assess their
collaborative processes and practices to identify opportunities for
improvement and enhance effectiveness in achieving quality goals.
11.Operator's Attitude:
● Definition: The operator's attitude refers to the mindset, beliefs, and
behaviors exhibited by frontline employees responsible for executing
quality management processes and procedures in their daily tasks.
● Explanation:
1. Commitment to quality: Operators demonstrate a strong
commitment to delivering high-quality products or services and
take pride in their workmanship.
2. Attention to detail: Operators pay close attention to detail and
follow standard operating procedures meticulously to ensure
consistency and accuracy in their work.
3. Proactive problem-solving: Operators take initiative to identify and
address potential quality issues before they escalate, contributing
to a culture of continuous improvement.
4. Accountability: Operators take ownership of their actions and
decisions, recognizing their role in ensuring product quality and
customer satisfaction.
5. Adaptability: Operators remain flexible and adaptable in response
to changing requirements or unexpected challenges, maintaining
quality standards under varying circumstances.
6. Openness to feedback: Operators welcome feedback from
supervisors, colleagues, and customers as an opportunity for
learning and improvement, rather than as criticism.
7. Communication skills: Operators effectively communicate with
team members and supervisors to convey information, share
insights, and collaborate on quality-related issues.
8. Respect for standards: Operators adhere to established quality
standards and protocols, understanding their importance in
maintaining product integrity and customer trust.
9. Training and development: Operators engage in ongoing training
and development programs to enhance their knowledge and skills
in quality management practices and techniques.
10. Motivation and morale: Operators feel motivated and empowered
by supportive leadership, recognition for their contributions, and
opportunities for growth and advancement, which positively impact
their attitude towards quality.
12.Responsibility:
● Definition: Responsibility in quality management refers to the obligation
and accountability of individuals and groups within an organization to
ensure that products or services meet predefined quality standards and
customer expectations.
● Explanation:
1. Individual accountability: Each employee takes personal
responsibility for the quality of their work and its impact on overall
product or service quality.
2. Role-specific responsibilities: Individuals understand and fulfill
their specific roles and responsibilities related to quality
management processes, procedures, and tasks.
3. Clear expectations: Management communicates clear
expectations regarding quality standards, performance targets, and
responsibilities to ensure alignment and understanding among
employees.
4. Ownership of outcomes: Individuals take ownership of quality
outcomes and strive to achieve excellence in their respective areas
of responsibility.
5. Problem-solving orientation: Employees proactively identify and
address quality issues within their sphere of responsibility, seeking
solutions rather than assigning blame.
6. Collaboration and support: Individuals collaborate with colleagues
and seek support from supervisors or cross-functional teams when
faced with challenges that impact quality.
7. Continuous improvement mindset: Employees embrace a mindset
of continuous improvement, constantly seeking ways to enhance
quality processes, products, and services.
8. Performance measurement: Quality performance metrics are used
to evaluate individual and group performance against predefined
quality objectives and targets, fostering accountability.
9. Recognition and reward: Individuals and teams are recognized and
rewarded for their contributions to quality improvement initiatives,
reinforcing a culture of responsibility and excellence.
10. Feedback and learning: Employees receive regular feedback on
their performance related to quality management and use it as an
opportunity for learning and growth.