Quality Management and Customer Relations

1. Quality Management and Customer Relations Chapter 1

2. Text: Quality Management 5th edition Authors: David Goetsch & Stanley Davis Where appropriate reference text page numbers will be on bottom of slides

3. Chapter One:The Total Quality Approachto Quality Management MAJOR TOPICS • What is Quality? • The Total Quality Approach Defined • Two Views of Quality • Key Elements of Total Quality • Total Quality Pioneers • Keys to Total Quality Success • Six Sigma Concept • How is Six Sigma Achieved? • The Future of Quality Management

4. What is Quality? • an essential and distinguishing attribute of something or someone; "the quality of mercy is not strained"--Shakespeare • a degree or grade of excellence or worth; "the quality of students has risen"; "an executive of low caliber" • a characteristic property that defines the apparent individual nature of something; "each town has a quality all its own"; "the radical character of our demands" • choice: of superior grade; "choice wines"; "prime beef"; "prize carnations"; "quality paper"; "select peaches" • timbre: (music) the distinctive property of a complex sound (a voice or noise or musical sound); "the timbre of her soprano was rich and lovely"; "the muffled tones of the broken bell summoned them to meet" • of high social status; "people of quality"; "a quality family"

5. What is Quality? • Philosophy and common sense tend to see quality as related either to subjective feelings or to objective facts. ... • Quality in business, engineering and manufacturing has a pragmatic interpretation as the non-inferiority or superiority of something. This is the most common interpretation of the term quality. • Level of excellence; A property or attribute that differentiates a thing or person; In a two-phase liquid-vapor mixture, the ratio of the mass of vapor present to the total mass of the mixture; High social position; The correspondence between a goal and its outcome -- between intent and ... • The degree of excellence of a wine, often judged by complexity, harmony and intensity. • The absence of any defect. The characteristics of a system that conforms to the original design. A system of quality would have the following characteristics: 1. Maintainability (easy to add new functions), 2. Conformance to specifications (fulfilling end user requirements)

6. Wikipedia • In the vernacular, quality can mean a high degree of excellence (“a quality product”), a degree of excellence or the lack of it (“work of average quality”), or a property of something (“the addictive quality of alcohol”).[1] Distinct from the vernacular, the subject of this article is the business interpretation of quality. • Degree of excellence/property of something

7. Wikipedia is not an acceptable source for research

8. The Gurus & Experts • ISO 9000: "Degree to which a set of inherent characteristic fulfills requirements.”The standard defines requirement as need or expectation. • Six Sigma: "Number of defects per million opportunities." The metric is tied in with a methodology and a management system. • Philip B. Crosby: "Conformance to requirements." The difficulty with this is that the requirements may not fully represent customer expectations; Crosby treats this as a separate problem. • Joseph M. Juran: "Fitness for use.” Fitness is defined by the customer. • Noriaki Kano and others, presenting a two-dimensional model of quality: "must-be quality" and "attractive quality." The former is near to the "fitness for use" and the latter is what the customer would love, but has not yet thought about. Supporters characterize this model more succinctly as: "Products and services that meet or exceed customers' expectations." • Gerald M. Weinberg: "Value to some person. • Robert Pirsig: "The result of care." • Genichi Taguchi, with two definitions: • a. "Uniformity around a target value." The idea is to lower the standard deviation in outcomes, and to keep the range of outcomes to a certain number of standard deviations, with rare exceptions. • b. "The loss a product imposes on society after it is shipped."This definition of quality is based on a more comprehensive view of the production system. • American Society for Quality: "a subjective term for which each person has his or her own definition. In technical usage, quality can have two meanings: • a. the characteristics of a product or service that bear on its ability to satisfy stated or implied needs; • b. a product or service free of deficiencies."

9. What is Quality? • Quality has been defined in a number of ways. When viewed from a consumer’s perspective, it means meeting or exceeding customer expectations. • Total quality is an approach to doing business that attempts to maximize an organization’s competitiveness through the continual improvement of the quality of its products, services, people, processes, and environments.

10. Wikipedia • Total quality management (TQM) is a management strategy aimed at embedding awareness of quality in all organizational processes. TQM has been widely used in manufacturing, education, call centers, government, and service industries, as well as NASA space and science programs. • TQM is composed of three paradigms: • Total: Involving the entire organization, supply chain, and/or product life cycle • Quality: With its usual Definitions, with all its complexities (External Definition) • Management: The system of managing with steps like Plan, Organize, Control, Lead, Staff, provisioning and the likes[citation needed]. • As defined by the International Organization for Standardization (ISO): • "TQM is a management approach for an organization, centered on quality, based on the participation of all its members and aiming at long-term success through customer satisfaction, and benefits to all members of the organization and to society." ISO 8402:1994

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12. Key Elements of Total Quality • Key characteristics of the total quality approach are as follows: strategically based, customer focus, obsession with quality, scientific approach, long-term commitment, teamwork, employee involvement and empowerment, continual process improvement, bottom-up education and training, freedom through control, and unity of purpose. • The rationale for total quality can be found in the need to compete in the global marketplace. Countries that are competing successfully in the global marketplace are seeing their quality of living improve. Those that cannot are seeing theirs decline. Page 12

13. Key Elements of Total Quality • Strategically based • Comprehensive strategic plan based on customer focus and continual improvement • Customer focus • The customer is the driver • Obsession with quality • All personnel at all levels must constantly be asking “how can we do this better?” • Scientific Approach • Data is used in decision making and problem solving • Long-Term Commitment • Long term commitment to change • Teamwork • Breaking down of barriers, rivalries & distrust Page 12

14. Key Elements of Total Quality • Continual process improvement • To exceed customer expectations, the systems and processes must be continually assessed and improved • Education and training • It is through education & training that employees who already know how to work hard, learn how to work smart • Freedom through control • The more control there is over a process, the more the employees can be empowered and free to spend time eliminating problems. • Unity of purpose. • Eliminate/reduce the adversarial relationship between labor and management Page 12

15. Defective parts per hundred Detection of problems Finished product inspection Passive employees who (blindly) follow orders Short term profits Productivity & quality in conflict Meeting customer specifications Establishing acceptable levels of nonconformance Quality is inspected in Defects are to be expected Quality is a separate function or department Employees blamed for poor quality Supplier relationships are short lived & cost driven Defective parts per million Prevention of problems Continual improvement Employees empowered to think and recommend improvements Long term profits Productivity gains are made as a result of Quality improvements Exceeding customer expectations Establishing benchmarks for customer satisfaction & continually improving Quality is achieved by product & process design & effective control techniques Defects are to be prevented Quality should be fully intergrated – it’s everybody’s responsibility 85% of quality problems are management’s fault Supplier relationships are long term and quality driven Two Views of Quality Total Quality Traditional Page 11

16. Total Quality Pioneers • W. Edward Deming is best known for his Fourteen Points, the Deming Cycle, and the Seven Deadly Diseases. • Joseph M. Juran is best known for Juran’s Three Basic Steps to Progress, Juran’s Ten Steps to Quality Improvement, the Pareto Principle, and the Juran Trilogy. • Philip Crosby is best known for his Four Absolutes of Quality Management Page 17

17. W. Edward Deming Fourteen Points • The 14 points may at first seem to be a collection of radical ideas, but the key to understanding most of them lies in Deming's focus on variation. Variation was seen by Deming as the disease that threatened US manufacturing. The more variation - in part dimensions, delivery times, prices, work practices, etc. - the more waste.

18. W. Edward Deming Fourteen Points 1."Create constancy of purpose towards improvement". Replace short-term reaction with long-term planning. 2."Adopt the new philosophy". The implication is that management should actually adopt his philosophy, rather than merely expect the workforce to do so. 3."Cease dependence on inspection". If variation is reduced, there is no need to inspect manufactured items for defects, because there won't be any. 4."Move towards a single supplier for any one item." Multiple suppliers mean variation between feedstocks. 5."Improve constantly and forever". Constantly strive to reduce variation. 6."Institute training on the job". If people are inadequately trained, they will not all work the same way, and this will introduce variation. 7."Institute leadership". Deming makes a distinction between leadership and mere supervision. The latter is quota- and target-based. Page 20

19. W. Edward Deming Fourteen Points 8."Drive out fear". Deming sees management by fear as counter- productive in the long term, because it prevents workers from acting in the organization's best interests. 9."Break down barriers between departments". Another idea central to TQM is the concept of the 'internal customer', that each department serves not the management, but the other departments that use its outputs. 10."Eliminate slogans". Another central TQM idea is that it's not people who make most mistakes - it's the process they are working within. Harassing the workforce without improving the processes they use is counter- productive. 11."Eliminate management by objectives". Deming saw production targets as encouraging the delivery of poor- quality goods. 12."Remove barriers to pride of workmanship". Many of the other problems outlined reduce worker satisfaction. 13."Institute education and self-improvement". 14."The transformation is everyone's job". Page 20

20. W. Edward Deming Fourteen Points • Deming has been criticized for putting forward a set of goals without providing any tools for managers to use to reach those goals (just the problem he identified in point 10). His inevitable response to this question was: "You're the manager, you figure it out."

21. Deming Cycle • W. Edwards Deming in the 1950's proposed that business processes should be analyzed and measured to identify sources of variations that cause products to deviate from customer requirements. He recommended that business processes be placed in a continuous feedback loop so that managers can identify and change the parts of the process that need improvements. Deming created a diagram to illustrate this continuous process, commonly known as the PDCA cycle for Plan, Do, Check, Act*: • PLAN: Design or revise business process components to improve results • DO: Implement the plan and measure its performance • CHECK: Assess the measurements and report the results to decision makers • ACT: Decide on changes needed to improve the process Page 19

22. DEMING'S SEVEN DEADLY DISEASES • 1. Lack of constancy of purpose to plan product and service that will have a market and keep the company in business, and provide jobs. • 2. Emphasis on short-term profits: short-term thinking (just the opposite of constancy of purpose to stay in business), fed by fear of unfriendly takeover, and by push from bankers and owners for dividends. • 3. Personal review systems, or evaluation of performance, merit rating, annual review, or annual appraisal, by whatever name, for people in management, the effects of which are devastating. Management by objective, on a go, no-go basis, without a method for accomplishment of the objective, is the same thing by another name. Management by fear would still be better. • 4. Mobility of management; job hopping. • 5. Use of visible figures only for management, with little or no consideration of figures that are unknown or unknowable. • 6. Excessive medical costs. • 7. Excessive costs of liability. Page 21

23. Juran Joseph M. Juran ranks close to Deming in terms of significant contributions to the quality movement. Juran has been most recognized as the person who added the human dimension to quality, broadening it from its statistical origins.

24. Juran’s Three Basic Steps to Progress The Three Basic Steps to Progress are broad steps that Juran feels companies must take if they are to achieve world-class quality. The Three Basic Steps are as follows: • Achieve structured improvements on a continual basis with dedication and a sense of urgency. • Establish an extensive training program. • Establish commitment and leadership on the part of higher management. Page 22

25. Juran’s Ten Steps to Quality Improvement • Build awareness of both the need for improvement and opportunities for improvement. • Set goals for improvement. • Organize to meet the goals that have been set. • Provide training. • Implement projects aimed at solving problems. • Report progress. • Give recognition. • Communicate results. • Keep score. • Maintain momentum by building improvement into the company’s regular systems. Page 23

26. Juran Trilogy • The Juran Trilogy summarizes the three primary functions of managers: quality planning, quality control, and quality improvement. Each primary function has several steps. • Quality planning • Quality control • Quality improvement Page 23

27. Juran Trilogy 1. Quality planning: • Determine who the customers are. • Identity customer needs. • Develop products with features that respond to customer needs. • Develop systems and processes that allow the organization to produce these features. • Deploy the plans to operational levels. 2. Quality control: • Assess actual quality performance. • Compare performance with goals. • Act on differences between performance and goals. 3. Quality improvement: The improvement of quality should be ongoing and continual. • Develop the infrastructure necessary to make annual quality improvements. • Identify specific areas in need of improvement, and implement improvement projects. • Establish a project team with responsibility for completing each improvement project. • Provide teams with what they need to be able to diagnose problems to determine root causes, develop solutions, and establish controls that will maintain gains made.

28. Philip Crosby’s Four Absolutes of Quality Management Phillip Crosby, PhD, former president of the American Society for Quality established four absolutes for quality performance. • Definition of quality is conformance to requirements, not goodness • System for causing quality is prevention, not appraisal • Performance standard is zero defects, not “that’s close enough” • Measurement of quality is the cost of nonconformance, not indexes Although "zero defects" may seem an impractical goal, it worthy ideal parameter. The broader point is to know what you are measuring and what the proper standard of measurement should be. Page 26

29. Key to Total Quality Success • The organization has to view Total Quality as a new way of doing business, and facilitate the cultural change which is necessary. • Never view it as a current or new management innovation, or a “quick fix” to production woes. Page 27

30. Common errors made when starting quality initiatives • Senior management delegation & poor leadership • Can not delegate leadership to the Quality department or an outside consultant. • Team mania • Teams will need to be established, but the approach needs to be learned. Teams will only be effective when a cultural change takes place • The deployment process • It can not be a directive from “the top”. Plan must be made for integration of the TQ principals into the organization and for the necessary cultural change • A narrow, dogmatic approach • Organizations need to tailor TQ to their individual needs. They can not simply take the Demming approach or the Juran approach, they need to take from all the models and get the best fit for their organization • Confusion about the differences among education, awareness, inspiration, and skill building • Training and skill building are two different things. Training can be done over a short period of time; skill building takes not only time but a cultural change to foster that growth. Page 27

31. Six Sigma Concept • Six Sigma is a concept introduced by Motorola in the mid-1980s that seeks to improve processes to the point that the defect rate is just 3.4 per million or less. • It involves a 6 step protocol • Identify characteristics wanted by customers • Classify the characteristics in terms of criticality • Determine if the characteristics are controlled • Determine the max allowable tolerances for each • Determine the process variation for each • Change the product design or process to achieve a 6 sigma output Page 28

32. Six Sigma Concept • The Six Sigma Concept is a subset of the broader concept of Total Quality • It is a strategy within the context of TQ that moves the target to a much higher level. • It is not a concept that replaces TQ, rather it is an innovative way to pursue a higher level of Quality under the TQ umbrella. Page 28

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35. How is Six Sigma Achieved? • Improve process performance • Robust Design • Design products that maintain their reliability & performance even when the component parts of the whole product of great variability of critical characteristics. • Design for Manufacture • Eliminate the possibility of manufacturing errors by simplifying and “error-proofing” the steps required to manufacture the product. Improving processes and rendering the process more efficient & foolproof are essential elements of TQM. Motorola set and achieved a previously thought impossible target. Page 31

36. The Future of Quality Management • Trends affecting the future of quality management include demanding global customers, shifting customer expectations, opposing economic pressures, and new approaches to management. • To succeed in the global market for now and in the future, organizations need to operate according to TQM principals. Page 33