Chapter 9

Management of
Quality
 For your interest …

A Day in the Life: Machine Operator & Quality Assurance

Technician © Coca-Cola Beverages Northeast

Toyota Kaizen Clip © Expertivity Technologies

How Toyota Maintains 99.9999% Quality | Toyota Quality

Management System | Invensis Learning © Invensis Learning
© 2024 McGraw Hill Ltd. 3
 Chapter Outline
▪ Introduction
• Evolution of Quality Management
• Quality Gurus
• Dimensions of Quality
• Benefits of Good Quality, Costs of
Quality
• Taguchi Quality Loss Function
▪ Hazard Analysis Critical Control Point
▪ Total Quality Management
▪ Problem Solving and Continuous
Improvement
▪ Basic Quality Tools
KAIZEN | A Japanese Philosophy for
• Methods for Generating Ideas and Continuous Improvement (PDCA Cycle) ©
Reaching Consensus Vihan Chelliah

© 2024 McGraw Hill Ltd. 55

Introduction
• Quality is the ability of a product or service to
consistently meet or exceed customer expectations.

• Quality means getting what you pay for

• An operations manager’s objective is to build a total
quality management system that identifies and
satisfies customer needs

Quality Control is monitoring, testing, and correcting

quality problems after they occur.

Quality Assurance is providing confidence in a products

quality by preventing defects before they occur.

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 Evolution of Quality Management
Pre-Industrial Revolution
Craftsmanship: each craftsman responsible for quality.

Industrial Revolution
Division of labour: quality control shifts to full time inspectors

1950s
quality assurance

1970s
quality management systems

1980s
TQM, continuous improvement

Today
Six Sigma, statistical tools
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 Dimensions of Quality: Goods

Special
Performance Reliability Serviceability
Features

Aesthetics Conformance Durability

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 Quality Dimensions: Car

Dimension Examples
1. Performance Everything works, ride, handling, leg room

2. Aesthetics Interior design, soft touch, fit and finish, grade of

materials used
3. Special features
Convenience Placement of gauges and controls
High tech GPS, DVD player
Safety Antilock brakes, airbags
4. Conformance Car matches manufacturer’s specifications
5. Reliability No breakdowns in the first 5 years
6. Durability Long life, resistance to rust and corrosion
7. Perceived quality Top-rated car, e.g., Cadillac
8. Serviceability Warranty, handling of complaints, maintenance

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 Dimensions of Quality /Service Quality

Tangibles Reliability/ Time Courtesy

Consistency

Convenience Responsiveness Assurance

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 Service Quality Dimensions: Car Repair

Dimension Examples

1. Tangibles Clean facilities and neat personnel

Convenient location of repair shop and open
2. Convenience
evenings and weekends
3. Reliability Problem fixed right every time

4. Responsiveness Willing and able to answer questions

5. Time Reasonable wait time

6. Assurance Staff knowledgeable about the repair

Friendly and courteous treatment of
7. Courtesy/empathy
customers by staff

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 Two Ways Quality Improves Profitability

Sales Gains via

▪ Improved response
▪ Flexible pricing
▪ Improved reputation
Increased
Improved
Profits
Quality
Reduced Costs via

▪ Increased productivity
▪ Lower rework and scrap costs
▪ Lower warranty costs

Benefits of Good Quality

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 The Consequences of Poor Quality

▪ Loss of business
▪ Liability
▪ Productivity
▪ Costs

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 Costs of Quality (COQ)

A methodology to determine the resources used to prevent poor

quality, appraise the quality of the products, and deal with internal
and external failures.

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Cost of Quality (COQ)
COQ can be categorized into 4 categories:
Prevention Costs → Reducing the potential for defects
Appraisal Costs → Evaluating products, parts, and services
Internal Failure → Producing defective parts or service before delivery
External Costs → Defects discovered after delivery

Prevention Costs External Failure Costs

❑ quality planning costs ❑ loss of business
❑ product design costs ❑ consumer complaint costs product
❑ process costs return costs
❑ training costs ❑ warranty claims costs
❑ liability: litigation, injury, etc.

Appraisal Costs
❑ inspection costs Internal Failure Costs
❑ test equipment costs ❑ scrap, rework, diagnosis
❑ operator costs ❑ price down-grading
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Failure Costs Increase Over Time

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 Hidden Costs of Quality

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19
 The Quality Gurus

• 14 points • Fitness-as-use
• Mgmt must • Trilogy: planning,
fix system control &
• Reduce W. Edwards Deming improvement
variation • Continuous
• SPC, PDSA improvement
• Cost of quality
Joseph M. Juran

• “Total field” Armand Feigenbaum

• Quality at • Zero defects
the source • “Do it right the
first time.”
Philip B. Crosby • Quality is free

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 For your interest …

Deming, Juran & Crosby: Contributors to TQM

(Total Quality Management) © A Oktay

Group 3 Crosby Philosophy

W. Edwards Deming: The 14 Points

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 Deming’s 14 Steps to Quality

1. Create constancy of purpose toward improvement.

2. Management must adopt the TQM philosophy.
3. Cease dependence on inspection.
4. Award based on quality and price.
5. Find problems, Improve constantly and forever
6. Institute training.
7. Institute leadership to act on quality issues.
8. Drive out fear.
9. Work as a team. Break down barriers.
10. Eliminate exhortations and fix the system.
11. Eliminate work quota standards and MBO.
12. Remove barriers to pride of workmanship.
13. Institute education and self-improvement.
14. The transformation is everybody’s job.
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 For your interest …

Did you know?

In the 1980s and early 1990s, many large Japanese firms set up
manufacturing operations in North America. During this time, they
suffered from a competitive environment that caused consumers
to perceive North American goods as superior in quality to
Japanese firms.

To address this issue, Japanese firms sought manufacturing

methods to produce goods with a very high level of quality so that
they could penetrate the North American market.

Shiba’s Triangle, a TQM model created Total quality management was not invented in Japan, as one may
by Dr Shoji Shiba. suppose. Total quality management was invented in the America;
however, it was refined by the Japanese very effectively in the
1980s. Thus, the term has subsequently become associated with
Japanese management principles.

23

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 Total Quality Management (TQM)

A philosophy that Continuous

Improvement (Kaizen):
involves everyone in make never-ending Data driven
improvements to critical
an organization in a processes
continual effort to
improve quality and
achieve customer Employee
empowerment:
satisfaction. Giving workers Team Approach
responsibility and
training

Suppliers: encourage Fail-safing: designing

partnership and long in elements that
term relationships prevent errors

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The TQM Approach

1. Find out what the customer wants

2. Design a product or service that meets or

exceeds customer wants

3. Design processes that facilitates doing

the job right the first time

4. Keep track of results

5. Extend these concepts to suppliers

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Comparing TQM and Traditional Organizations

Aspect Traditional TQM

Overall mission Maximize return on investment Meet or exceed customer expectations

Objectives Emphasis on short term Balance of long term and short term

Management Not always open; at times Open; encourages employee input;

inconsistent objectives consistent objectives

Role of manager Issue orders; enforce Coach, remove barriers, build trust
Customer Not highest priority; may be Highest priority; important to identify
Requirements unclear and understand
Problems Assign blame; punish Identify and resolve
Problem solving Not systematic; individuals Systematic; teams

Improvement Erratic Continuous

Supplier relations Adversarial Partners
Jobs Narrow, specialized; much Broad, more general; much team effort
individual effort
Focus Product-oriented Process-oriented
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 If you are still confused…

Total Quality Management Principles: A

Comprehensive Overview © Leaders Talk

What is Total Quality Management – TQM ©

Gemba Academy

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 Problem Solving and Continuous Improvement

▪ Basic steps in problem Define problem and establish

improvement goals
solving.
Define measures and collect data

Analyze the problem

Generate potential solutions

Choose a solution

Implement the solution

Monitor solution to see if goals are

• The PDSA Cycle OR Shewart Cycle OR accomplished
Demin Wheel
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 PDSA Example

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The Seven Basic Quality Tools

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 Basic Quality Tools

1. Check Sheet:
An organized method of recording data

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 Basic Quality Tools

2. Scatter Diagram:
A graph of the value of one variable vs. another variable
Productivity

Productivity

Absenteeism distractions

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 Basic Quality Tools

3. Cause and Effect Diagram (fishbone or Ishikawa):

A tool that identifies process elements (causes) that might effect an
outcome

Cause

Materials Methods
Effect

Manpower Machinery

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 Basic Quality Tools

3. Cause and Effect Diagram (fishbone):

Cause

Service Food
Attitudes Chinese
of waiters Effect
Slow Mexico
delivery
Students dissatisfied with
restaurant
dirty

Shortage of
table food court

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 Basic Quality Tools

Distribution
4. Histogram:

Frequency
A distribution showing the
frequency of occurrence of
a variable

Repair time (minutes)

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 Basic Quality Tools

5. Pareto Charts:
A graph to identify and plot problems or defects in descending order of
frequency

80% of the problems

may be attributed to
20% of the causes.

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 Basic Quality Tools

6. Flow Charts (Process

Diagrams):

A chart that describes the

steps in a process

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 Basic Quality Tools

7. Statistical Process Control 0.58

Chart (run chart): 0.56

Diameter
0.54
0.52
A chart with time on the horizontal 0.5
axis to plot values of a statistic 0.48
0.46
0.44
1 2 3 4 5 6 7 8 9 10 11 12
T im e (Ho urs )
Time (Hours)

Upper control limit (UCL)

Target value

Lower control limit (LCL)

Time
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Methods for Generating Ideas

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Methods for Generating Ideas
▪ Brainstorming: Technique for generating a free flow of ideas in a group of
people

▪ Quality Circles: Groups of workers who meet to discuss ways of improving

products or processes

▪ Interviewing: Technique for identifying problems and collecting information

▪ Benchmarking: Process of measuring performance against the best in the

same or another industry

▪ The 5W2H Approach: A method of asking questions about a process/problem

that include what, why, where, who, how, and how much

▪ 5 Whys: Systematically drilling down to a real root cause of a problem by

asking “Why?” five times

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 Taguchi Quality Loss Function

The graphical representation of how an increase in deviation from the

target value leads to a faster rate of increase in customer
dissatisfaction.

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