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Introduction to Quality and Performance Excellence


Chapter 1 Introduction to Quality and Performance Excellence Defining Quality Formal Definitions of Quality The totality of features and characteristics of a product ... – PowerPoint PPT presentation

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Title: Introduction to Quality and Performance Excellence

Chapter 1
  • Introduction to Quality and Performance Excellence

Defining Quality
Fast delivery
Providing a good, usable product
Eliminating waste
Doing it right the first time
Delighting or pleasing customers
Total customer service and satisfaction
Compliance with policies and procedures
Formal Definitions of Quality
  • The totality of features and characteristics of a
    product or service that bears on its ability to
    satisfy given needs American Society for
  • Fitness for use
  • Meeting or exceeding customer expectations
  • Conformance to specifications

Performance Excellence
  • An integrated approach to organizational
    performance management that results in
  • delivery of ever-improving value to customers and
    stakeholders, contributing to organizational
  • improvement of overall organizational
    effectiveness and capabilities, and
  • organizational and personal learning.

Importance of Quality
  • THE buzzword among business in the 1980s and
  • Quality problems still abound in many industries,
    such as automotive
  • Consumer expectations are high
  • Weve made dependence on the quality of our
    technology a part of life Joseph Juran

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
  • Quality control during World War II
  • Post-war Japan evolution of quality management

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

History of Quality Assurance (3 of 3)
  • Emergence of quality management in service
    industries, government, health care, and
  • Evolution of Six Sigma
  • Current and future challenge maintain commitment
    to performance excellence

Quality Dimensions in Manufacturing
  • Performance primary operating characteristics
  • Features bells and whistles
  • Reliability probability of operating for
    specific time and conditions of use
  • Conformance degree to which characteristics
    match standards
  • Durability - amount of use before deterioration
    or replacement
  • Serviceability speed, courtesy, and competence
    of repair
  • Aesthetics look, feel, sound, taste, smell

Quality Dimensions in Services
  • Time how much time must a customer wait?
  • Timeliness will a service be performed when
  • Completeness Are all items in the order
  • Courtesy do frontline employees greet each
    customer cheerfully?
  • Consistency are services delivered in the same
    fashion for every customer, and every time for
    the same customer?
  • Accessibility and convenience is the service
    easy to obtain?

Differences Between Manufacturing and Services
  • Customer needs and performance standards are
    often difficult to identify and measure
  • The production of services typically requires a
    higher degree of customization
  • The output of many service systems is intangible
  • Services are produced and consumed simultaneously
  • Customers often are involved in the service
    process and present while it is being performed
  • Services are generally labor intensive
  • Many service organizations must handle very large
    numbers of customer transactions.

New Frontiers of Quality
  • Health care
  • Education
  • Government
  • Not-for-Profits

Deming Philosophy
The Deming philosophy focuses on continual
improvements in product and service quality by
reducing uncertainty and variability in design,
manufacturing, and service processes, driven by
the leadership of top management.
Deming Chain Reaction
Improve quality
Costs decrease
Productivity improves
Increase market share with better quality and
lower prices
Stay in business
Provide jobs and more jobs
Demings System of Profound Knowledge
  • Appreciation for a system
  • Understanding variation
  • Theory of knowledge
  • Psychology

  • Most organizational processes are
  • Parts of a system must work together
  • Every system must have a purpose
  • Management must optimize the system as a whole

  • Many sources of uncontrollable variation exist in
    any process
  • Excessive variation results in product failures,
    unhappy customers, and unnecessary costs
  • Statistical methods can be used to identify and
    quantify variation to help understand it and lead
    to improvements

Theory of Knowledge
  • Knowledge is not possible without theory
  • Experience alone does not establish a theory, it
    only describes
  • Theory shows cause-and-effect relationships that
    can be used for prediction

  • People are motivated intrinsically and
    extrinsically intrinsic motivation is the most
  • Fear is demotivating
  • Managers should develop pride and joy in work

Demings 14 Points (Abridged) (1 of 2)
1. Create and publish a company mission
statement and commit to it. 2. Learn the new
philosophy. 3. Understand the purpose of
inspection. 4. End business practices driven by
price alone. 5. Constantly improve system of
production and service. 6. Institute
training. 7. Teach and institute leadership. 8.
Drive out fear and create trust.
Demings 14 Points (2 of 2)
9. Optimize team and individual efforts. 10.
Eliminate exhortations for work force. 11.
Eliminate numerical quotas and M.B.O.
Focus on improvement. 12. Remove barriers that
rob people of pride of workmanship. 13.
Encourage education and self-improvement. 14.
Take action to accomplish the transformation.
Juran Philosophy
Juran proposed a simple definition of quality
fitness for use. This definition of quality
suggests that it should be viewed from both
external and internal perspectives that is,
quality is related to (1) product performance
that results in customer satisfaction (2)
freedom from product deficiencies, which avoids
customer dissatisfaction.
Jurans Quality Trilogy
  • Quality planning
  • Quality control
  • Quality improvement
Crosby Philosophy
Quality is free . . . Quality is free. Its
not a gift, but it is free. What costs money are
the unquality things -- all the actions that
involve not doing jobs right the first time.
Crosbys Absolutes of Quality Management
  • Quality means conformance to requirements
  • Problems are functional in nature
  • There is no optimum level of defects
  • Cost of quality is the only useful measurement
  • Zero defects is the only performance standard
Principles of Total Quality
  • Customer and stakeholder focus
  • Process orientation
  • Continuous improvement and learning
  • Employee engagement and teamwork
  • Management by fact
  • Visionary leadership and a strategic orientation

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 are internal and external

Process Orientation
  • A process is a sequence of activities that is
    intended to achieve some result

Cross-functional Perspective
Continuous Improvement and Learning
  • Incremental and breakthrough improvement
  • Products and services
  • Work processes
  • Flexibility, responsiveness, and cycle time
  • Learning why changes are successful through
    feedback between practices and results

Learning Cycle
  1. Planning
  2. Execution of plans
  3. Assessment of progress
  4. Revision of plans based upon assessment findings

Employee Engagement and Teamwork
  • Engagement workers have a strong emotional bond
    to their organization, are actively involved in
    and committed to their work, feel that their jobs
    are important, know that their opinions and ideas
    have value, and often go beyond their immediate
    responsibilities for the good of the organization
  • Teamwork must exist vertically, horizontally, and

Management by Fact
  • Organizations need good performance measures to
    drive strategies and change, manage resources,
    and continuously improve
  • Data and information support analysis at all
  • Typical measures customer, product and service,
    market, competitive comparisons, supplier,
    employee, cost and financial

Visionary Leadership and a Strategic Orientation
  • Leadership is the responsibility of top
  • Senior leaders should be role models for the
    entire organization
  • Leaders must make long-term commitments to key
  • Quality should drive strategic plans

TQ and Agency Theory
  • Agency relationship a concept in which one party
    (the principal) engages another party (the agent)
    to perform work
  • Key assumption individuals in agency
    relationships are utility maximizers and will
    always take actions to enhance their

Contrast With TQ (1 OF 2)
  • TQ views the management system as one based on
    social and human values, whereas agency theory is
    based on an economic perspective that removes
    people from the equation.
  • Agency theory propounds the belief that people
    are self-interested and opportunistic and that
    their rights are conditional and proportional to
    the value they add to the organization. TQ
    suggests that people are also motivated by
    interests other than self, and that people have
    an innate right to be respected.

Contrast With TQ (2 OF 2)
  • Agency theory assumes an inherent conflict of
    goals between agents and principals, and that
    agent goals are aligned with principal goals
    through formal contracts. In TQ, everyone in the
    organization shares common goals and a continuous
    improvement philosophy, and goals are aligned
    through adoption of TQ practices and culture.
  • TQ takes a long-term perspective based on
    continuous improvement, whereas agency theory
    focuses on short-term achievement of the contract
    between the principal and agent.
  • TQ leaders provide a quality vision and play a
    strategic role in the organization leaders in
    agency theory develop control mechanisms and
    engage in monitoring.

TQ and Organizational Models