1 Chapter 3 Chapter 3 Total Quality in Total Quality in Organizations Organizations
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Chapter 3Chapter 3
Total Quality inTotal Quality inOrganizationsOrganizations
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Growth of Modern Growth of Modern Quality ManagementQuality Management
Manufacturing quality
Improvedproduct designs
Servicequality
Performanceexcellence
Key IdeaKey Idea
As consumer expectations have risen, a focus on quality has permeated other key sectors of the economy, most notably health care, education, not-for-profits, and government.
SystemsSystems A A systemsystem is a set of functions or activities is a set of functions or activities
within an organization that work together within an organization that work together for the aim of the organization.for the aim of the organization.
Subsystems of an organization are linked Subsystems of an organization are linked together as internal customers and together as internal customers and suppliers.suppliers.
A systems perspective acknowledges the A systems perspective acknowledges the importance of the interactions of importance of the interactions of subsystems, not the actions of them subsystems, not the actions of them individually.individually.
Key IdeaKey Idea
Successful management relies on a systems perspective, one of the most important elements of total quality.
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Manufacturing Systems Manufacturing Systems (1 (1 of 2)of 2)
Marketing and salesMarketing and sales Product design and engineeringProduct design and engineering Purchasing and receivingPurchasing and receiving Production planning and Production planning and
schedulingscheduling Manufacturing and assemblyManufacturing and assembly Tool engineeringTool engineering
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Manufacturing Systems Manufacturing Systems (2 (2 of 2)of 2)
Industrial engineering and Industrial engineering and process designprocess design
Finished goods inspection and Finished goods inspection and testtest
Packaging, shipping, and Packaging, shipping, and warehousingwarehousing
Installation and serviceInstallation and service
Key IdeaKey Idea
Traditional quality assurance systems in manufacturing focus primarily on technical issues such as equipment reliability, inspection, defect measurement, and process control.
Relationships in a Typical Relationships in a Typical Manufacturing System Manufacturing System (Fig.2.1)(Fig.2.1)
Quality in MarketingQuality in Marketing
Marketing and sales personnel are responsible for determining the needs and expectations of consumers.
Quality in Product Quality in Product DesignDesign
Product design and engineering functions develop technical specifications for products and production processes to meet the requirements determined by the marketing function.
Quality in PurchasingQuality in Purchasing
A purchasing agent should not simply be responsible for low-cost procurement, but should maintain a clear focus on the quality of purchased goods and materials.
Quality in Production Quality in Production Planning & SchedulingPlanning & Scheduling
Poor quality often results from time pressures caused by insufficient planning and scheduling.
Quality in ManufacturingQuality in Manufacturingand Assemblyand Assembly
Both technology and people are essential to high-quality manufacturing.
Quality in Production Quality in Production Planning & SchedulingPlanning & Scheduling
Poor quality often results from time pressures caused by insufficient planning and scheduling.
Quality in Process Quality in Process DesignDesign
Manufacturing processes must be capable of producing output that meets specifications consistently.
Quality in Finished Goods Quality in Finished Goods Inspection and TestingInspection and Testing
The purposes of final product inspection are to judge the quality of manufacturing, to discover and help to resolve production problems that may arise, and to ensure that no defective items reach the customer.
Quality in Installation Quality in Installation and Serviceand Service
Service after the sale is one of the most important factors in establishing customer perception of quality and customer loyalty.
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Quality in Business Quality in Business Support Functions for Support Functions for ManufacturingManufacturing Finance and accountingFinance and accounting Quality assuranceQuality assurance Legal servicesLegal services
Key IdeaKey Idea
Every manager is responsible for studying and improving the quality of the process for which he or she is responsible; thus, every manager is a quality manager.
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Quality in ServicesQuality in Services
ServiceService is defined as “any is defined as “any primary or complementary primary or complementary activity that does not directly activity that does not directly produce a physical product – that produce a physical product – that is, the non-goods part of the is, the non-goods part of the transaction between buyer transaction between buyer (customer) and seller (provider).”(customer) and seller (provider).”
Key IdeaKey Idea
The American Management Association estimates that the average company loses as many as 35 percent of its customers each year, and that about two-thirds of these are lost because of poor customer service.
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Critical Differences Between Critical Differences Between Service and Manufacturing Service and Manufacturing (1 (1 of 2)of 2)
Customer needs and Customer needs and performance standards are performance standards are more difficult to identify and more difficult to identify and measuremeasure
Services requires a higher Services requires a higher degree of customizationdegree of customization
Output is intangibleOutput is intangible
Critical Differences Between Critical Differences Between Service and Manufacturing Service and Manufacturing (2 (2 of 2)of 2)
Services are produced and Services are produced and consumed simultaneouslyconsumed simultaneously
Customers are often involved in Customers are often involved in actual processactual process
Services are more labor-intensive Services are more labor-intensive than manufacturingthan manufacturing
Services handle large numbers of Services handle large numbers of transactionstransactions
Key IdeaKey Idea
These differences make it difficult for many service organizations to apply total quality principles, and foster misguided perceptions that quality management cannot be effectively accomplished in services.
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Components of Service Components of Service System QualitySystem Quality EmployeesEmployees Information technologyInformation technology
Key IdeaKey Idea
Researchers have repeatedly demonstrated that when service employee job satisfaction is high, customer satisfaction is high, and that when job satisfaction is low, customer satisfaction is low.
Key IdeaKey Idea
Information technology is essential for quality in modern service organizations because of the high volumes of information they must process and because customers demand service at ever-increasing speeds.
Quality in Health Care Quality in Health Care
Joint Commission on Accreditation of Joint Commission on Accreditation of Healthcare Organizations (JCAHO)Healthcare Organizations (JCAHO)
National Committee for Quality National Committee for Quality Assurance (NCQA)Assurance (NCQA)
Institute for Healthcare Institute for Healthcare Improvement (IHI)Improvement (IHI)
1999 expansion of the Baldrige 1999 expansion of the Baldrige Award to nonprofit health care Award to nonprofit health care organizationsorganizations
Quality Issues in Health Quality Issues in Health CareCare Avoidable errorsAvoidable errors Underutilization of servicesUnderutilization of services Overuse of servicesOveruse of services Variation in servicesVariation in services
Key IdeaKey Idea
Although the national health care system as a whole may need a sweeping overhaul, many individual providers have turned toward quality as a means of achieving better performance and customer satisfaction.
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Quality in EducationQuality in Education
Koalaty KidKoalaty Kid– Active involvement of whole Active involvement of whole
school communityschool community– Committed leadershipCommitted leadership– System for continuous System for continuous
improvementimprovement– Environment that celebrates Environment that celebrates
successsuccess
Quality in Higher Quality in Higher EducationEducation
Business plays an important role in fostering quality improvement efforts in higher education by transferring knowledge and expertise on quality processes and implementation practices.
Academic Quality Academic Quality Improvement Project Improvement Project (AQIP)(AQIP)AQIP criteria focuses on institutional practices for helping students learn, accomplishing other distinct objectives, understanding student and stakeholder needs, valuing people, leading and communicating, supporting institutional operations, measuring effectiveness, planning continuous improvement, and building collaborative relationships—all of which are key elements of TQ.
Quality in Small Business Quality in Small Business and Not-for-Profitsand Not-for-Profits Slow to adopt quality approachesSlow to adopt quality approaches
– General lack of understanding and General lack of understanding and knowledge about qualityknowledge about quality
– Focus on sales and market growth, Focus on sales and market growth, cash flow, and routine fire fightingcash flow, and routine fire fighting
– Lack of resources for formal quality Lack of resources for formal quality systemssystems
Key IdeaKey Idea
Perhaps the most important factor in successful quality initiatives in small businesses is the recognition by the CEO or president that a quality focus can be beneficial and lead to achieving organizational goals.
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Quality in the Public Quality in the Public SectorSector Quality in the Federal Quality in the Federal
GovernmentGovernment– Federal Quality InstituteFederal Quality Institute– President’s Quality AwardPresident’s Quality Award
State and Local Quality EffortsState and Local Quality Efforts
Key IdeaKey Idea
Quality concepts and principles are universal and can be applied in all types of organizations. The difficulty, of course, is developing an infrastructure to make it happen and the discipline to sustain efforts over time.
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