Chapter 1

1. Chapter 1 Introduction to Quality

2. Modern 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

3. Key Idea Building—and maintaining—quality into an organization’s goods and services, and more importantly, into the infrastructure of the organization itself, is not an easy task.

4. Quality Assurance ...is any action directed toward providing customers with goods and services of appropriate quality.

5. History of Quality Assurance (1 of 3) • Skilled craftsmanship during Middle Ages • Industrial Revolution: rise of inspection and separate quality departments • Early 20th Century: statistical methods at Bell System • Quality control during World War II • Post-war Japan: evolution of quality management

6. History of Quality Assurance (2 of 3) • Quality awareness in U.S. manufacturing industry during 1980s: from “Little Q” to “Big Q” - Total Quality Management • Malcolm Baldrige National Quality Award (1987) • Disappointments and criticism

7. History of Quality Assurance (3 of 3) • Emergence of quality management in service industries, government, health care, and education • Evolution of Six Sigma • Current and future challenge: keep progress in quality management alive

8. Key Idea While quality initiatives can lead to business success, they cannot guarantee it, and one must not infer that business failures or stock price dives are the result of poor quality.

9. Contemporary Influences on Quality • Partnering • Learning systems • Adaptability and speed of change • Environmental sustainability • Globalization • Knowledge focus • Customization and differentiation • Shifting demographics

10. 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

11. Formal Definitions of Quality • Transcendent definition: excellence • Product-based definition: quantities of product attributes • User-based definition: fitness for intended use • Value-based definition: quality vs. price • Manufacturing-based definition: conformance to specifications

12. Quality Perspectives transcendent & product-based user-based needs Marketing Customer value-based Design products and services manufacturing- based Manufacturing Distribution Information flow Product flow

13. Key Idea Because individuals in different business functions speak different “languages,” the need for different views of what constitutes quality at different points inside and outside an organization is necessary to create products of true quality that will satisfy customers’ needs.

14. Customer-Driven Quality • “Meeting or exceeding customer expectations” • Customers can be... • Consumers • External customers • Internal customers

15. Total Quality • People-focused management system • Focus on increasing customer satisfaction and reducing costs • A systems approach that integrates organizational functions and the entire supply chain • Stresses learning and adaptation to change • Based on the scientific method

16. Principles of Total Quality • Customer and stakeholder focus • Participation and teamwork • Process focus supported by continuous improvement and learning …all supported by an integrated organizational infrastructure, a set of management practices, and a set of tools and techniques

17. Customer and Stakeholder Focus • Customer is principal judge of quality • Organizations must first understand customers’ needs and expectations in order to meet and exceed them • Organizations must build relationships with customers • Customers include employees and society at large

18. 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.

19. Participation and Teamwork • Employees know their jobs best and therefore, how to improve them • Management must develop the systems and procedures that foster participation and teamwork • Empowerment better serves customers, and creates trust and motivation • Teamwork and partnerships must exist both horizontally and vertically

20. Key Idea In any organization, the person who best understands his or her job and how to improve both the product and the process is the one performing it.

21. Process Focus and Continuous Improvement • A process is a sequence of activities that is intended to achieve some result

22. Continuous Improvement • Enhancing value through new products and services • Reducing errors, defects, waste, and costs • Increasing productivity and effectiveness • Improving responsiveness and cycle time performance

23. Key Idea Major improvements in response time may require significant simplification of work processes and often drive simultaneous improvements in quality and productivity.

24. Deming’s View of aProduction System Suppliers of materials and equipment Design and Redesign Consumer research Receipt and test of materials Consumers A B C D Production, assembly inspection Distribution Tests of processes, machines, methods INPUTS PROCESSES OUTPUTS Feedback

25. Learning • The foundation for improvement … Understanding why changes are successful through feedback between practices and results, which leads to new goals and approaches • Learning cycle: • Planning • Execution of plans • Assessment of progress • Revision of plans based on assessment findings

26. Infrastructure, Practices, and Tools Infrastructure Leadership Strategic HRM Process Information and knowledge Planning mgt. management Practices Performance Training appraisal Tools Trend chart

27. TQ Infrastructure • Customer relationship management • Leadership and strategic planning • Human resources management • Process management • Information and knowledge management

28. Competitive Advantage • Is 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 supports each of these characteristics

29. Quality and Profitability Improved quality of design Improved quality of conformance Higher perceived value Higher prices Lower manufacturing and service costs Increased market share Increased revenues Higher profitability

30. Key Idea Considerable evidence exists that quality initiatives positively impact bottom-line results.

31. Quality and Business Results Studies • General Accounting Office study of Baldrige Award applicants • Baldrige stock study (see www.baldrige.org) • Hendricks and Singhal study of quality award winners • Performance results of Baldrige Award winners

32. Key Idea An organization that is committed to total quality must apply it at three levels: the organizational level, the process level, and the performer/job level.

33. Three Levels of Quality • Organizational level: meeting external customer requirements • Process level: linking external and internal customer requirements • Performer/job level: meeting internal customer requirements

34. 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 • Attitudes can be changed through awareness and effort (e.g., personal quality checklists)

35. Key Idea In the daily attempt to bring about change in the individual parts of the organizational universe, managers, employees, professors, and students can find that personal quality is the key to unlock the door to a wider understanding of what the concept really is all about. Unless quality is internalized at the personal level, it will never become rooted in the culture of an organization. Thus, quality must begin at a personal level (and that means you!).