Quality Management

1
Quality Management

• MGMT 309
• Professor Alysse Morton

2
Quality Management

• What is quality?
• One definitionThe integrity in delivering what
  a customer has a legitimate right to expect in
  view of what was promised at the time of the
  agreement to purchase. - Myron Tribus

3
Eight Dimensions of Quality

• PerformanceA products primary operating
  characteristics
• FeaturesBells and whistles
• ReliabilityProbability of a product
  malfunctioning or failing within a specified time
• ConformanceDegree to which product design meets
  standards

• DurabilityMeasure of useful product life
• ServiceabilitySpeed, courtesy, competence, and
  ease of repair
• AestheticsHow product appeals to consumers
  senses
• Perceived QualityReputation based on perception

Source Competing on the Eight Dimensions of
Quality, Garvin, Harvard Business Review,
November-December 1987
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Five Views of Quality

• Transcendental
• Product-based
• User-based
• Manufacturing-based
• Value-based

Source Managing Quality, Garvin, New York Free
Press, 1988, pp. 40-41.
5
Levels of Quality (User-Based)

• Indifferent qualityQuality that the customer
  does not notice or appreciate
• Expected qualityQuality that the customer
  expects and demands
• One-dimensional qualityQuality that the customer
  expects, but that does not create an order loser
  when lacking
• Exciting qualityQuality that exceeds the
  customers expectations, attracting favorable
  attention

6
Quality Gurus

• W. Edwards Deming
• Use of statistical methods
• Management must get involved
• Train to reduce defectives
• Environment must encourage employees to report
  problems and recommend solutions

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PDCA Cycle (Deming Wheel)
4. Institutionalize the change or abandon or do
it again.
1. Plan a change aimed at improvement.
2. Execute the change.
3. Study the results did it work?
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Quality Gurus

• Joseph Juran
• Quality defined as fitness for use
• Quality trilogy
• Quality planning
• Quality control
• Analyze the results
• Costs of quality
• Internal failure
• External failure
• Appraisal costs
• Prevention costs

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Costs of Quality

• Internal failure
• Scrap
• Rework
• Retest
• Downtime
• Yield losses
• Disposition

• External failure
• Complaint adjustment
• Returned material
• Product recall
• Warranty charges
• Allowances
• Litigation
• Loss of goodwill

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Costs of Quality

• Appraisal costs
• Incoming material inspection
• Inspection and testing
• Maintaining accuracy of test equipment
• Materials and services consumed
• Evaluation of stocks

• Prevention costs
• Quality planning
• New products review
• Training and work force development
• Process control
• Quality data acquisition and analysis
• Quality reporting
• Improvement projects
• Supplier programs

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Costs of Quality
To
To
?
?
Total Quality Costs
Internal External Failure Costs
Cost Per Good Unit of Product
Minimal COQ
Cost of Appraisal Plus Prevention
Quality Level
100 Defective
100 Good
Optimal Level
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Quality Gurus

• Phillip Crosby
• Quality is free!
• Costs of poor performance quality outweigh the
  costs of reducing defectives
• Zero defects
• Management Maturity Grid
• Uncertainty
• Awakening
• Enlightenment
• Wisdom
• Certainty

13
Quality Gurus

• Armand Feigenbaum
• Total quality controlquality at the source
• Genichi Taguchi
• Quality engineering
• Wisdom
• Certainty

14
Quality Management Methods

• Quality assurance groups
• Marketing interface
• Training programs
• Monetary incentives
• Quality circles
• Product design and process design for quality
• Purchasing function
• Poka yoke

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Baldridge Criteria forPerformance Excellence
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Malcolm BaldrigeNational Quality Award

• Leadership (125 points)
• Strategic Planning (85 points)
• Customer and Market Focus (85 points)
• Information and Analysis (85 points)
• Human Resource Development and Management (85
  Points)
• Process Management (85 points)
• Business Results (450 points)

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Categories for the Baldrige Award

• Manufacturing companies or subsidiaries that
• produce and sell manufactured products or
  manufacturing processes or
• produce agricultural, mining, or construction
  products.
• Service companies or subsidiaries that sell
  service
• Small businesses
• Health care organizations
• Educational institutions

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Select Malcolm BaldrigeNational Quality Award
Winners

• 3M Dental Products Division (1997)
• ATT Universal Card Services (1992)
• Boeing Airlift and Tanker (AT) Programs (1998)
• Cadillac Motor Car Company (1990)
• Clarke American Checks, Inc. (2001)
• Eastman Chemical Company (1993)

• Federal Express Corporation (1990)
• GTE Directories Corporation (1994)
• The Ritz-Carlton Hotel Company (1999, 1992)
• SSM Health Care (2002)
• Xerox Business Services (1997)
• Xerox Corporation - Business Products Systems
  (1989)

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ISO 9000 International Quality

• 9001
• Model for Quality Assurance in Design, Production
  Installation, and Servicing.
• 9002
• Model for Quality Assurance in Production and
  Installation
• 9003
• Model for Quality Assurance in Final Inspection
  Test

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Focus of ISO 90012000

• Customer focus
• Leadership
• Involvement of people
• Process approach
• System approach to management
• Continual improvement
• Factual approach to decision making, and
• Mutually beneficial supplier relationships

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ISO 9000 International Quality

• Forms of Certification
• First partyA firm audits itself against ISO 9000
  standards.
• Second partyA customer audits its supplier.
• Third partyA "qualified" national or
  international standards or certifying agency
  serves as auditor.