1.0 Introduction Everyone has had experiences of poor quality when dealing with business organizations. These experiences might involve an airline that has lost a passenger’s luggage, a dry cleaner that has left clothes wrinkled or stained, poor course offerings and scheduling at your college, a purchased product that is damaged or broken, or a pizza delivery service that is often late or delivers the wrong order. The experience of poor quality is exacerbated when employees of the company either are not empowered to correct quality inadequacies or do not seem willing to do so. We have all encountered service employees who do not seem to care. The consequences of such an attitude are lost customers and opportunities for competitors to take advantage of the market need. Successful companies understand the powerful impact customer-defined quality can have on business. For this reason many competitive firms continually increase their quality standards. For example, both the Ford Motor Company and the Honda Motor Company have recently announced that they are making customer satisfaction their number one priority. Ford is focusing on tightening already strict standards in their production process and implementing a quality program called Six-Sigma. Honda, on the other hand, is focused on improving customer-driven product design. Although both firms have been leaders in implementing high quality standards, they believe that customer satisfaction is still what matters most [1]. 1.1 Total Quality Management In making quality as a priority means putting customer needs first. It means meeting and exceeding customer expectations by involving everyone in the organization through an integrated effort [1]. Total Quality Management (TQM) is an approach that seeks to improve quality and performance which will meet or exceed customer expectations. This can be 1
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Transcript
1.0 Introduction
Everyone has had experiences of poor quality when dealing with business organizations.
These experiences might involve an airline that has lost a passenger’s luggage, a dry
cleaner that has left clothes wrinkled or stained, poor course offerings and scheduling at your
college, a purchased product that is damaged or broken, or a pizza delivery service that is
often late or delivers the wrong order. The experience of poor quality is exacerbated when
employees of the company either are not empowered to correct quality inadequacies or do
not seem willing to do so. We have all encountered service employees who do not seem to
care. The consequences of such an attitude are lost customers and opportunities for
competitors to take advantage of the market need. Successful companies understand the
powerful impact customer-defined quality can have on business. For this reason many
competitive firms continually increase their quality standards. For example, both the Ford
Motor Company and the Honda Motor Company have recently announced that they are
making customer satisfaction their number one priority. Ford is focusing on tightening already
strict standards in their production process and implementing a quality program called Six-
Sigma. Honda, on the other hand, is focused on improving customer-driven product design.
Although both firms have been leaders in implementing high quality standards, they believe
that customer satisfaction is still what matters most [1].
1.1 Total Quality Management
In making quality as a priority means putting customer needs first. It means meeting and
exceeding customer expectations by involving everyone in the organization through an
integrated effort [1]. Total Quality Management (TQM) is an approach that seeks to improve
quality and performance which will meet or exceed customer expectations. This can be
achieved by integrating all quality-related functions and processes throughout the company.
TQM looks at the overall quality measures used by a company including managing quality
design and development, quality control and maintenance, quality improvement, and quality
assurance. TQM takes into account all quality measures taken at all levels and involving all
company employees [2].
1.2 Principles of TQM
TQM can be defined as the management of initiatives and procedures that are aimed at
achieving the delivery of quality products and services. A number of key principles can be
identified in defining TQM, including [2]:
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Executive Management – Top management should act as the main driver for TQM
and create an environment that ensures its success.
Training – Employees should receive regular training on the methods and concepts of
quality.
Customer Focus – Improvements in quality should improve customer satisfaction.
Decision Making – Quality decisions should be made based on measurements.
Methodology and Tools – Use of appropriate methodology and tools ensures that
non-conformances are identified, measured and responded to consistently.
Continuous Improvement – Companies should continuously work towards improving
manufacturing and quality procedures.
Company Culture – The culture of the company should aim at developing employees
ability to work together to improve quality.
Employee Involvement – Employees should be encouraged to be pro-active in
identifying and addressing quality related problems.
2.0 Quality Management
QUALITY is the ability of a product or service to consistently meet or exceed customer
expectations [3].
2.1 Traditional vs. Modern Concept of Quality Control
Traditional Modern
Usually involve one person or in small
group
Includes everyone from raw material,
productivity, design, process, top
management
The objective is to detect mistakes
after completion or at the end of line
of production.
The objective is to detect the
mistakes which it might occur during
the production line before completion
No specific methods, based on
experience of the quality examiner
Use statistical value; control charts to
monitor the quality of the product or
service
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2.2 Dimension of Quality
Customer expectation can be broken down into a number of categories, or dimensions,
that customers use to judge the quality of a product or service. The dimensions used for
goods are somewhat different from those used for services.
Product quality is often judged on eight dimensions of quality below:
Performance – main characteristics of the product or service
o I.e.; everything works: fit and finish, ride, handling, acceleration
Special Features – extra characteristics
o I.e.; Convenience: placement of gauges, High tech: cell phone, DVD player,
Safety: anti-skid, airbags
Conformance – how well a product or service corresponds to design expectation
o I.e.; Car matches manufacturer’s specifications
Reliability – consistency of performance without breakdown
o I.e.; Infrequent need for repair
Durability – the useful life of the product or service
o I.e.; Useful life in miles, resistance to rust
Perceived quality – indirect evaluation of quality (e.g., reputation)
o I.e.; Top-rated
Aesthetics – appearance, feel, smell, taste
o I.e.; Exterior and interior design
Serviceability – handling of complaints or repairs
o I.e.; Service after sale
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Instead, service quality is often described using following dimensions
Convenience – availability and accessibility of the service
o I.e.; Was the service center conveniently located?
Responsiveness – willingness of service providers to help customers and to deal with
the problems
o I.e.; Were customer service personnel willing and able to answer question?
Time – speed which the service is delivered
o I.e.; How long did the customer have to wait?
Reliability – consistency to perform a service dependably, consistently, and
accurately
o I.e.; Was the problem fixed?
Assurance – the knowledge shown by the personnel
o I.e.; Did the customer service personnel seem knowledgeable about the
repair?
Courtesy – the way customer are treated by employees
o I.e.; Were customer service personnel and the cashier friendly and courteous?
Tangibles – the physical appearance of facilities, equipment, personal and
communication materials
o I.e; Were the facilities clean? Were personnel neat?
2.3 Consequences of Poor Quality
Poor design or defective products or services can result in loss of business. Failure to
devote adequate attention to quality can damage a profit-oriented organization’s reputation
and leads to a decreased share of the market, or it can lead to increased criticism and
controls for a government agency or non-profit organization. Furthermore the company’s
image will suffer horribly.
Organization must pay special attention to their potential liability due to injury, damage or
even death resulting from either faulty design or poor workmanship. This applies for both
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products and services. Liability for poor quality has been well established in the courts. An
organization’s liability costs can often be substantial, especially if large numbers of items are
involved (e.g., an accident at a nuclear power plant)
Productivity and quality are often closely related. Poor quality can adversely affect
productivity during the manufacturing process if parts are defective and have to be reworked
or if an assembler has to try a number of parts before finding one that fits properly. Also, poor
quality in tool and equipment can lead to injuries and defective outputs, which must be
reworked or scrapped, thereby reducing the amount of usable output for a given amount of
input. Similarly, poor service can mean having to redo the service and reduce service
productivity.
Cost to remedy a problem is a major consideration in quality management. The
earlier a problem is identified in the process, the cheaper the cost to fix it. It has been
estimated that the cost to fix a problem at the customer end is about five times the cost to fix
a problem at the design or production stage.
2.4 Responsibility for Quality
All members of an organization have some responsibility for quality, these are some key
areas of those responsibility:
Top management has the ultimate for quality, they must institute programs to
improve the quality; guide, direct, and motivate managers and workers.
Designers which the quality product and service begins with them. This includes
the features of the product or service, attention to the required process to
manufacture a product and the service that will required delivering the service to
the customers.
Procurement department has responsibility for obtaining goods and services that
will not detract from the quality of the organization’s goods and services.
Production/operations have the responsibility to ensure that processes yield
products and services that conform to design specification. Monitoring processes
and finding and correcting root causes of problems are important aspects of this
responsibility.
Quality assurance is responsible for gathering and analyzing data on problems
and working with operations to solve problems.
Packaging and shipping department must ensure that goods are not damaged in
transit, which packages are clearly labeled, and that instructions are included, that
all parts are included, and shipping occurs on schedule.
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Marketing and sales department has the responsibility to determine customer
needs and to communicate them to appropriate areas of the organization. In
addition, it has the responsibility to report any problems with the products or
services.
Customer service is often the first department to learn of problems. It has the
responsibility to communicate the information to appropriates departments, deals
in a reasonable manner with the customers, work to resolve problems, and follow
up to confirm that the situation has been effectively remedied
2.5 Cost of Quality
a) Internal Cost
Failure cost: results from production of defective parts before delivery (rework,