Quality

Management
Techniques: AEM 6102

By
Dr. Prianka Binte Zaman
Associate Professor
Department of IPE, BUET
The first question to ask–

What is ?
What is Quality?
 Quality refers to the characteristic of a product or service that
defines its ability to consistently meet or exceed customer
expectations.
 Webster’s Dictionary: “The degree of excellence of a thing”.
 Oxford dictionary: “the standard of something when it is
compared to other things”.
 Philip B. Crosby: Quality is “conformance to
requirements”. This defination assumes that the
specifications and requirements have already been
developed. The next thing to look for is conformance
to these requirements.
 W. Edwards Deming: “Good quality means a
predictable degree of uniformity and dependability
with a quality standard suited to the customer”.
What is Quality?
 Joseph M. Juran: "Fitness for use". Fitness
is defined by the customer. Which typically
means its Performance, Conformance,
Durability, Safety and Reliability. This
definition stresses the importance of the
customer who will use the product.
 American Society for Quality: “Quality
denotes an excellence in goods and services,
especially to the degree they conform to
requirements and satisfy customers”.

 ISO 9000: "Degree to which a set of inherent

characteristics fulfills requirements” The
standard defines requirement as need or
expectation.
What is Quality?
Meaning of Quality:
Consumer’s Perspective
 Quality of design: It is the quality which
the producer or supplier is intending to
offer to the customer.
 Edeward defines quality in terms of
the capacity to satisfy needs.
 Gilmore defines quality as the degree
to which a specific product satisfies
the wants of a specific consumer.
 Fitness for use: how well product or
service does what it is supposed to.
 Juran defines quality as fitness for
use.
A Mercedes and a Ford are equally “fit for
use,” but with different design
dimensions.
Meaning of Quality:
Producer’s Perspective
 Quality of Conformance: Degree to which the product or
service design specifications are met
 Crosby defines quality as the means to conform to
standards, specifications or requirements.
 Parasuraman defines quality as the concerned with
meeting or exceeding customer expectations.
Meaning of Quality:
A Final Perspective
Consumer Quality Producer

 Consumer’s and producer’s perspectives depend on

each other
 Products can have high design quality but low
conformance quality, and vice versa
 Both design quality and conformance quality should
provide products that meet customer objectives
 This is often termed fitness for use
 Entails identifying the dimensions of product (or
service) that the customer wants i.e., the voice of
the customer
 Developing a quality control program
 Meaning of Quality

Meaning of Quality

Quality of Conformance Quality of Design

• Conformance to • Quality
Production specifications characteristics Marketing
• Cost • Price

Fitness for
Consumer Use
Dimensions/aspects of Quality:
Tangible Products
Performance
 basic operating characteristics of a product; how well
a car is handled or its gas mileage
Features
 “extra” items added to basic features, such as a
stereo CD or a leather interior in a car
Reliability
 probability that a product will operate properly within
an expected time frame; that is, a TV will work
without repair for about seven years
Conformance
 degree to which a product meets pre–established
standards
Dimensions/aspects of Quality:
Tangible Products (cont.)
Durability
 how long product lasts before replacement
Serviceability
 ease of getting repairs, speed of repairs, courtesy
and competence of repair person
Aesthetics
 how a product looks, feels, sounds, smells, or tastes
Safety
 assurance that customer will not suffer injury or
harm from a product; an especially important
consideration for automobiles
Dimensions/aspects of Quality:
Intangible Products/Service
Timeliness
 How long must a customer wait for
service, and is it completed on time?
 Is an overnight package delivered
overnight?
Completeness
 Is everything customer asked for
provided?
 Is a mail order from a catalogue
company complete when delivered? “quickest, friendliest,
Courtesy most accurate
 How are customers treated by service
employees?
available.”
 Are catalogue phone operators nice
and are their voices pleasant?
Dimensions/aspects of Quality:
Intangible Products/Service(cont.)
Consistency
 Is the same level of service provided to each customer each
time?
 Is your newspaper delivered on time every morning?
Accessibility and convenience
 How easy is it to obtain service?
 Does a service representative answer you calls quickly?
Accuracy
 Is the service performed right every time?
 Is your bank or credit card statement correct every month?
Responsiveness
 How well does the company react to unusual situations?
 How well is a telephone operator able to respond to a
customer’s questions?
Implications of Quality
There are several things which have direct implications with
quality. Either they want it and use it, or they are responsible
for delivering it. In other words, these are the key elements
that have direct relation with quality. The basic elements those
have implications with quality are of four categories:
 Customers/Consumers: They are the ultimate user or direct
beneficiaries of quality. So, any quality management drive
should focus on this element while preparing a quality plan.
 Processes: This element is responsible for transforming the
input to quality output. Traditionally, people used to think that
the process is the only factor which needs to be controlled for
ensuring quality. But modern quality management views that
employees and materials (thus suppliers too) should also be
held responsible for quality.
Implications of Quality
 Employees: Now-a-days, role of employee in delivering
quality product is valued highly. They are considered as
internal customer, who need to kept satisfied in order to
deliver quality product. Thus they should be trained
regularly, with high degree of motivation and skill.
 Materials: Role of suppliers in delivering quality goods is
now well recognized. A good manufacturing process does
not have much to contribute to quality if supplied
materials are not of good quality. That’s why the
Japanese producers now extend their quality activities
up to the supplier’ premises.
Quality Control
 To achieve outstanding quality requires:
 quality leadership from senior management,
 a customer focus,
 total involvement of the workforce, and
 continuous improvement based upon rigorous analysis of
processes.
Four steps of quality control
 Setting benchmarks: Determine the required quality target in
terms of a trade-off between cost and quality aspects. While
setting benchmark, or standards, manufacturability of
machineries and equipment and skill of manpower need to be
taken into account.
 Appraising conformance: Regular monitoring and evaluation
are essential for measuring key characteristics of quality,
preferably in quantitative terms, which should be followed by
appraisal for ensuring conformance as per specifications.
Quality Control
 Acting when necessary: If conformance appraisal shows
deviation from the bench marks, or stipulated output,
necessary correct measures should be taken in order to avoid
such occurrence. Necessary diagnosis must be performed to
identify and subsequently remove their causes throughout the
complete value chain function, such as, procurement, design,
production, maintenance, delivery, logistics, etc., which
influence customer satisfaction.
 Planning for improvements: As control functions have
significant impact on quality, necessary plans must be
formulated for future better quality control.

This seems fairly similar to (Plan-Do-Check-Act) PDCA cycle of

TQM. Efficient and effective control is the key in management
success. If control fails, the organization fails to operate.
Benefits of Quality
 Higher customer satisfaction
 Reliable products/services
 Better efficiency of operations
 More productivity & profit
 Better morale of work force
 Less wastage costs
 Less Inspection costs
 Improved process
 More market share
 Spread of happiness & prosperity
 Better quality of life for all.
Consequences of Poor Quality
 Lower Productivity: productivity and quality are closely
related, thus, inseparable. Since, poor quality means
rework and rejection, it adversely affects productivity in
manufacturing process.
 Loss of Production Time: Productivity in Japanese
industries is very high for many reason, one being the
philosophy-’Right the first time’, which means no
defectives at all, even no loss of time through trial and
error.
 Loss of Material: In many cases, the defective products
can not be reworked for future use. This may mean
rejection, which not only means loss of material, but also
loss of other resoources and usefull time spent in
producing those products.
Consequences of Poor Quality
 Loss of business: The most severe problem of bad
quality is loss of business. Failure of a product while in
use can severely damage the organization’s image,
which is detrimental for business. A satisfied customer
tells a few people about the good product, but a
dissatisfied customer will tell an average of 19 people. It
must be remembered that image or brand is created
over the years of reputation, while one or two defective
products may destroy the image in a moment.
 Liability: Poor quality increases certain other costs.
These include liability costs in terms of warranty,
replacement, repair cost after purchase and any other
costs expended in transportation, inspection in the field,
and payment to customers or discounts used to offset
the inferior quality.
Expressing Dissatisfaction
Public action

Seeking redress directly from

Takes the firm
action
Taking legal action
A dissatisfied
A complaint to business, private,
customer or governmental agencies

Private action
Stop buying the product or
boycott the seller
Takes Warn friends about the product
no action and/or seller
Iceberg
The ‘Iceberg’ theory –
how much is immediately visible?
Cost of Quality
 COQ offers managers a financial method to evaluate the level
of their quality and the costs associated with different levels
of quality.

 Cost of quality-’for achieving it’ as well as for ‘loosing it’.

 This total cost can be split into two fundamental areas:

1. Conformance cost: Cost of Achieving Good Quality

 Prevention costs
 Appraisal costs

2. Nonconformance cost: Cost of Poor Quality

 Internal failure costs
 External failure costs
Prevention Costs
 Costs associated with all activities designed to prevent defects
in product or service.
 These costs are used to build awareness of the quality
program and to keep the costs of appraisal and failure to a
minimum.
 Prevention costs are all costs incurred in an effort to “make
it right the first time”.
 This cost occurs for the following reasons:

 Quality planning costs: costs of developing and

implementing quality management program
 Training costs: costs of developing and putting on quality
training programs for employees and management
 Information costs: costs of acquiring and maintaining data
related to quality, and development of reports on quality
performance
Appraisal Costs
 The costs associated with measuring and evaluating the
product or service quality to ensure conformance.

 This cost occurs for the following reasons:

 Inspection and testing: costs of testing and inspecting

materials, parts, and product at various stages and at
the end of a process
 Test equipment costs: costs of maintaining equipment
used in testing quality characteristics of products
 Operator costs: costs of time spent by operators to gar
data for testing product quality, to make equipment
adjustments to maintain quality, and to stop work to
assess quality
Internal Failure Costs
 Costs incurred prior to the shipment of the product or the
delivery of the service.
 These costs are associated with defects that are found prior to
customer delivery.
 This cost occurs for the following reasons:
 Scrap costs: costs of poor-quality products that must be
discarded, including labor, material, and indirect costs
 Rework costs: costs of fixing defective products to conform
to quality specifications
 Process downtime costs: costs of shutting down
productive process to fix problem
 Downgrading cost: the price differential between the
normal selling price and any selling price that might be
obtained for a product that does not meet the customer’s
requirements. Downgrading is common in the textile,
apparel goods, electronics, and carpet industries.
External Failure Costs
 The costs of discovered defects occurring after product
shipment or service delivery.

 This cost occurs for the following reasons:

 Customer complaint costs: costs of investigating and
satisfactorily responding to a customer complaint
resulting from a poor-quality product
 Product return costs: costs of handling and replacing
poor-quality products returned by customer
 Warranty claims costs: costs of complying with product
warranties
 Loss of good-will; loss of business reputation; loss of
future business; loss of market share.