UNIT 1

INTRODUCTION TO QUALITY MANAGEMENT

Definition and importance of quality in business, Historical development of quality
management theories and philosophies, The Deming Cycle (PDCA) and the concept of
continuous improvement, Principles and core concepts of TQM, TQM tools and
techniques (e.g., Fishbone diagram, Pareto chart, 5 Whys), TQM in service industries,
Industry 4.0 and its implications for quality management.

1.1 Definition Quality Management

Quality management is the act of overseeing all activities and tasks that must be accomplished
to maintain a desired level of excellence. This includes the determination of a quality policy,
creating and implementing quality planning and assurance, and quality control and quality
improvement.
1.2 Importance of quality for a business
1.Meeting the expectations of the customers
Irrespective of the industry, customers will not choose a particular product merely based on the
price, nonetheless often on quality. According to some studies, customers are willing to pay a
higher price for a product or service if they consider it as a well-made product that surpasses
the quality standards.
2. Gaining competitive advantage
Companies want to attain competitiveness with differentiation. This happens when there are
distinctive qualities in a product that rivals cannot imitate. A distinctive product can be patented
in order to prevent other companies from replicating it for almost 20 years. This would mean
that a company can sustain its competitive advantage for a long time.
3. Quality is crucial for the satisfaction of customers
If an organisation fails to meet the expectations of its customers, then it will look for
replacements. Quality is essential to satisfy customers in order to retain their loyalty so that
they will be willing to buy in the future as well. Quality products make a significant impact on
revenues in the long run. Quality is what differentiates a company in a crammed market.
Apple can charge a higher price for its iPhone in comparison to its rivals in the industry. This
is because it has developed a long history of delivering high-quality products.
4. Quality develops reputation
Quality signals an organisation’s reputation. Nowadays, there is an increasing significance of
social media, which means that the customers can effortlessly share both positive and negative
opinions on the quality of a product/service on different platforms. Therefore, a sound
reputation for quality could be an essential factor that can differentiate an organisation in a
market that is highly competitive.
Poor quality products/services can lead to negative publicity and can harm the reputation. If
the organisation is constantly delivering what it has promised, then the customers will give
positive and constructive views on social media. This will create awareness for the brand and
make a wanted effect, and they wouldn’t want to miss out. The users on social networking sites
who view an organisation’s strong reputation will desire to be part of the product/service
offered, increasing sales.
5. Influence on sales volume
If a product matches the requirements of the customers, then the demand for that particular
product will increase, hence allowing the company to boost its profit levels. As people become
wealthier, their desire for good quality products also increases as they are not constricted by
their income.
6. Quality helps in managing costs effectively
Poor quality products escalate costs. If an organisation does not have an efficient quality control
system, they may have to bear expenses to assess peculiar products in order to evaluate the
leading causes. They may have to get rid of faulty products and incur extra production costs
for their replacement.
7. Greater productivity levels
When an organisation understands and follows the significance of quality in every aspect of its
operations, then there is an increase in the productivity of its employees. As they realise and
comprehend that they are working on a product that is exceptional and high on quality.
8. Boosted brand value
Every brand wants a more significant market share and a boosted brand value. It is through
following and comprehending the significance of quality that will support an organisation make
its brand value rise in comparison to its rivals in the industry
9.Reduced risk
The other facet that helps an organisation sustain its brand value is to diminish risks. Risks
simply befall business operations when an organisation do not follow the parameters of quality
10.Growth in revenues and profits
In current vigorous markets, there is ever-growing competition, it becomes challenging for an
organisation to make anticipated revenues to meet their short and long-run goals. An
organisation that follows quality management will have a greater level of satisfied customers,
higher brand value, and market share.
Concept of Quality
Quality is an important aspect for any organization. Government, non-government and private
sector organizations consider the quality of goods or services as a prerequisite for achieving
their stated objectives. The uniqueness of goods and services that give satisfaction to the
consumers or service recipients.
Quality is progressively focused on the production of goods and services at more competitive
prices. Quality is the totality of features and characteristics inherent in a product or service that
has the potential to satisfy a specified or implied need. The quality of a good or service is
assured compared to other goods or services. In this sense, quality can be both good and bad,
but overall quality is considered to be the good features and characteristics of a good or service.
Quality plays a crucial role in the marketing of goods and services. There is a close relationship
between the quality of the goods and services and the satisfaction of the consumer or the
customer. Similarly, if the quality of goods or services of the concerned organization is good,
it will directly help the organisation to achieve the expected achievements.

Dimensions of Quality

The dimensions mentioned by David A. Garvin regarding quality are as follows:

1. Performance: - The performance level of a goods or service determines the quality.
For example, the clarity of the picture on the television, the clarity of the sound on the
radio, etc., ensures the level of performance.
2. Features: - Features inherent in goods or services also contribute to quality. Such as -
disc brakes on motorbikes, automatic arrangements, etc.
3. Reliability: - Trust and reputation towards the goods or services also helps to ensure
quality.
4. Conformance: - The uniformity or similarity established in the structure, texture, etc.
of the goods or services determines the quality of the goods or services.
5. Durability: - Quality is determined on the basis of durability and sales of goods or
services in the market.
6. Serviceability: - If the goods or services can be used through proper repair and
maintenance, such goods or services are considered quality.
7. Aesthetics: - Goods and services that can attract more consumers also tend to be good
quality.
8. Perceived quality: - Concerning goods or services, the quality should be maintained
as expected by the customer, consumer or service recipient and such customers should
also have experienced the quality.
Importance of Quality
Quality is considered extremely important for any organization. It is only possible to satisfy
the consumers or the service recipients if the quality of the goods or services provided by the
government, non-government and private sector organisations is good. Some of the importance
of the quality are:
• Competition
• Productivity
 • Cost
• Support to marketing
• Reliability etc.

Factors Affecting Quality

The factors that affect the quality of goods or services produced by any organization are
as follows: -
1. Human Resources: - Maintaining the quality of goods or services depends on the
qualifications and efficiency of the employees working in the organization. It is only
possible to increase the quality of goods or services if performance of employees are
high.
2. Institutional Commitment: - It is necessary to have strong commitment from the
management and employees of the organization to maintain the desired quality of their
goods or services. Organizational culture should also be quality oriented.
3. Materials: - Goods used in the flow of goods and services also affect the quality
determination. Therefore, it is important to use good quality materials.
4. Machines and equipment: - The quality of the machines and tools used in the
production of goods and services is also affected by the use of new ones instead of the
old ones.
5. Procedures and technology: - The quality of goods or services can be determined by
the use of appropriate procedures and good mechanical technology.
6. New Innovation: - Innovative activities such as research, development and analysis
have an impact on determining the quality of goods or services.
7. Standards: - Standards can maintain the desired quality.
8. Control system: A positive control system can also achieve the desired quality.

1.3 The History of Quality

It’s easy to think of the concept of quality management as strictly a modern-day phenomenon.
In fact, some of the core concepts of quality control can be traced back as far as medieval
Europe, where 13th-century craftsmen’s guilds developed stringent product quality standards,
with compliant goods being marked with a special symbol by inspection committees. Similar
quality control methods remained in use for centuries, and were embedded into many systems
throughout the Industrial Revolution from the mid-1700s to the early 19th century. As
traditional craftsmen increasingly found employment as factory workers, quality in the
workplace was measured through audits and inspections, with defective end goods either
scrapped or reworked.
The Early 20th Century
Quality management systems, as we now think of them, first started to be developed in the
1920s, as statistical sampling techniques were introduced into quality control methodology,
pioneered by Walter A. Shewhart – sometimes referred to as the father of statistical quality
control. During this period an ever-increasing demand for greater and greater productivity saw
a breakdown in quality control, and it was clear there was a requirement to develop a more
robust, structured and logical approach to quality. Crucially, this would involve a shift from
simple end-product inspection to the development of quality practices aimed at actively
preventing defects by implementing checks and controls earlier in the production process. Key
to the development of the total quality management techniques that industries still rely on today
were experts such as Joseph M. Juran and W. Edwards Deming.
Joseph M. Juran
Dr. Joseph M. Juran is considered by many to be the father of many of the quality management
techniques still used in industry today. Born in Romania in 1904, after his family emigrated to
the United States he gained a degree in electrical engineering. In the years following World
War I he began working for the Bell System, which saw his introduction to statistical sampling
and quality control. During World War II, Juran served as an administrator in the government’s
Lend-Lease Administration, and at the war’s conclusion opted not to return to Bell, in favor of
furthering his work in the field of quality.
After taking a position at New York University’s Department of Industrial Engineering, Juran
spent the following years refining his theories on quality control while lecturing and consulting
extensively for businesses. He also began writing what would become his acclaimed Quality
Control Handbook, which was first published by McGraw-Hill in 1951. Juran’s handbook is
still in print – currently in its seventh edition and considerably expanded from the book’s
original publication – and is still widely regarded as the go-to text on quality control.
Dr. Juran’s reputation in the field of quality management spread not just nationally, but
worldwide. In 1954, the Union of Japanese Scientists and Engineers invited Juran to Japan to
discuss the theories and techniques he had developed over the years. While there, he held
sessions with senior and middle managers from various Japanese firms, explaining how to
incorporate quality control activities into their processes.
Juran’s visit to Japan helped to kick-start a change in attitude to quality control in the nation’s
industries, creating a culture within which, over the following years, quality processes became
ever more integrated into management thinking and everyday working practices. This allowed
Japanese industry to produce higher-quality exports at lower prices, giving it a considerable
advantage on the world stage. From the mid-1960s, Juran was highly influential in spreading
Japanese attitudes to quality to more widespread application in the United States.
Dr. Juran’s quality management approach is based on three key principles. The first is
application of the Pareto principle – also known as the “80/20 rule.” In the context of quality,
this means identifying “the vital few and the trivial many” – in other words, the small
percentage of root causes in manufacturing or service processes that account for the largest
effect in terms of defects or cost.
The second principle of Juran’s approach to quality is management theory. This involves a
change of thinking away from mere focus on the quality of the end product, to a wider
examination of the human dimension of quality management. Education and training for
managers in the workplace is as important as the nuts and bolts of the manufacturing process,
while other human factors such as resistance to change also need to be accounted for. Juran’s
management theory was fundamental in expanding quality management principles beyond the
factory floor to principles that could also be applied to service-related processes.
The final principle consists of three processes often known collectively as the Juran Trilogy.
These three elements are quality planning (the design stage), quality control (ongoing
inspections to ensure that processes are in control) and quality improvement (including
proactive refinement of processes to improve processes).
In addition to many decades of work on quality management and consulting with organizations
worldwide, in 1979 Dr. Juran founded The Juran Institute, with a mission to “create a global
community of practice to empower organizations and people to push beyond their limits.” Still
operating today as Juran, the institute he founded remains focused on equipping organizations
with the tools they need to achieve long-term solutions to everyday problems.
W. Edwards Deming
While Dr. Juran is often hailed as “the father of quality,” quality management as we understand
it today would likely not exist without the contributions of another key figure – W. Edwards
Deming. Deming was born in 1900, and by the age of 28 had gained degrees in in engineering,
mathematics and physics, and a doctorate in mathematical physics from Yale. He spent the
next decade writing and lecturing in the fields of math, physics and statistics, and during this
time became interested in the statistical quality control principles of Walter Shewhart.
Specifically, Deming was interested in expanding Shewhart’s techniques beyond
manufacturing, to administrative and management activities.
Deming worked with the US Census Bureau from 1939, and his development of Shewhart’s
statistical process control innovations resulted in a six-fold increase in productivity. After
World War II, Deming was posted to Japan as an adviser to the Japanese Census. In common
with Dr. Juran, Deming became involved with the Union of Japanese Scientists and Engineers,
and his contributions directly led to the development of what we now recognize as total quality
management becoming widespread in Japanese industry. His work is believed to have
contributed greatly to the reconstruction of Japan’s post-war economy, and in 1960 he was
awarded the Order of the Sacred Treasure for his services to the nation’s economic resurgence.
While Deming’s management principles weren’t widely adopted in the United States over the
next couple of decades, by the early 1980s it was evident that there was a gap in quality between
Japanese and American products. One of the first US companies to seek Deming’s input was
Ford Motor Company, which between 1979 and 1982 had incurred $3 billion in sales losses.
As a consultant, Deming asked tough questions about the company’s organizational and
management culture – ultimately claiming that management actions were responsible for 85%
of quality problems. As unwelcome as this message may have been, by 1985 the changes that
Deming had introduced contributed to Ford becoming the most profitable US auto company.
Edwards Deming died in 1993, but in the years before his death, he continued consulting, and
authored a number of seminal books, including Quality, Productivity, and Competitive Position
– later retitled Out of the Crisis – which outlined his critical “14 Points for Management.”
Shortly before his death, Deming founded the W. Edwards Deming Institute, which continues
to honour his legacies today.
The Quality Revolution
The modern quality revolution began in the 1970s, when the quality of Japanese goods
surpassed those of the US and Europe. Action was taken to combat the imbalance and the 1980s
saw a big emphasis on quality improvement, plus the adoption of new practices such as Just in
Time (JIT).
By the 1990s, quality improvement methodology that had proved successful in manufacturing
was being applied to the working practices of organizations. Toward the end of that decade,
Motorola developed the concept of Six Sigma, which asserts that all products and processes
must strive for perfection, and Juran’s method had been employed to create the data-driven
improvement cycle, DMAIC.
The 2000s saw the combination of Lean and Six Sigma, plus other continuous improvement
methods.
Finally, in the 2010s, Continuous Improvement and Quality 4.0 were introduced.

Certification – Evolution of Quality Management Certification Systems

The following is a timeline of key dates and events in the evolutionary process of quality
management certification systems.
1959: U.S. Dept. Defense MIL-Q 9858 Standard is established.
1969: MIL-Q 9858 is revised into the NATO (North Atlantic Treaty Organization)
AQAP (Allied Quality Assurance Publications) series of standards for quality assurance
systems.
1974: BSI (British Standards Institution) publishes the BS 5179 “Guidelines for Quality
Assurance.”
1979: BSI publishes the BS 5750 series of standards.
1987: ISO – the International Organization for Standardization – publishes the ISO
9001 standards, based on the BS 5750 series.
1994: ISO releases the first revision of the ISO 9001 standards.
2000: ISO releases a second revision and merges ISO 9002/3 into 9001.
2008: The third revision of ISO 9001 is released.
2015: ISO 9001:2015 is released and becomes a guideline for organization-level quality
management systems, and closer to a TQM model.
1.4 The Deming Cycle (or PDCA)
The Deming Cycle (or Plan-Do-Check-Act (PDCA)) is a four-step iterative technique used to
solve problems and to improve organizational processes. Dr. Walter A. Shewhart, the
renowned physicist and statistician from Western Electric and Bell Labs, developed the original
concept during the 1920s. His approach was a three-step linear problem-solving method.
Dr. W. Edwards Deming, the famous quality-control pioneer and author of Deming’s 14 Points,
popularized the technique in the 1950s and took She whart’s linear three-step process and
revised it to be the iterative four-step circle and cycle we know today. This then became known
as the Deming Cycle.
• Plan: In this step, you investigate the current situation in order to fully understand the
nature of the problem being solved. Be sure to develop a plan and a framework to work
from and specify the desired outcomes and results.
• Do: To identify the real problem by analyzing the data and defining and implementing
a solution plan. The PDCA cycle focuses on smaller, incremental changes that help
improve processes with minimal disruption. You should start with a small-scale pilot
so as not to disrupt the organization should the solution not work as expected.
• Check: To monitor the effect of the implementation plan and find countermeasures if
necessary to further improve the solution. You should do a check during
implementation to make sure that the project’s objectives are being met. Do a second
check upon completion to allow for successes and failures to be addressed, and for
future adjustments to be made based on lessons learned.
• Act: Implement your solutions and recommendations. Decide if the solution is
effective, and either integrate it into standard work practices or abandon it. If you
abandon it, you should ask what you’ve learned from the process and restart the cycle.
1.5 Benefits of the Deming Cycle
PDCA has been used for many decades because of its many benefits. Some of those are:
1. Facilitates continuous improvement: The fact that PDCA is an iterative cycle
encourages users to pursue ongoing and continuous improvement. The key is that it
requires a commitment from leadership because the Deming Cycle is not a one-time
event.
2. Flexibility: The Deming Cycle can be used for a wide array of organizational processes
regardless of the function.
3. Simple yet powerful: The concept and the steps are easy to understand. The tools
needed are basic. Yet, the outcomes and solutions coming from PDCA can have a
significant impact on the organization.
1.6 Importance of the Deming Cycle
Not only are the Deming Cycle and PDCA important to understand, they are also important to
implement and deploy in an organization.
 1. Organizations and leaders must understand that all processes can be improved. PDCA
is a great tool for starting on the journey to continuous improvement.
2. The Deming Cycle is a well-documented and proven methodology. There is no need to
start from scratch and reinvent the wheel when an effective solution already exists.
3. With this method, change can be quick and solutions implemented in a timely fashion
so that your organization can see benefits right away.
1.7 Quality Control
It involves a series of inspections, reviews, and tests used throughout the software process,
ensuring that each work product meets the requirements placed on it. Also includes a feedback
loop to the process that created the work product, which is essential in minimizing the errors
produced.
Combines measurement and feedback in order to adjust the process when product
specifications are not met; requires all work products to have defined, measurable
specifications to which practitioners may compare to the output of each process.
1.8 Quality Management
It serves as an umbrella activity that is applied throughout the software process, involves doing
the software development correctly versus doing it over again, it reduces the amount of rework
which results in lower costs and improved time to market. It encompasses
• A software quality assurance process
• Specific quality assurance and quality control tasks (including formal technical reviews
and a multi-tiered testing strategy)
• Effective software engineering practices (methods and tools)
• Control of all software work products and the changes made to them
• A procedure to ensure compliance with software development standards
• Measurement and reporting mechanisms
1.9 Quality Assurance Functions
It consists of a set of auditing and reporting functions that assess the effectiveness and
completeness of quality control activities; provide management personnel with data that
provides insight into the quality of the products, alerts management personnel to quality
problems so that they can apply the necessary resources to resolve quality issues.
Product
A product is any tangible output or service that is a result of a process. A product itself
may include hardware, software, documentation, or a combination of these; also note
that a service is included in the definition.
Process
A process is a set of activities performed for a given purpose, for example, a software
acquisition process. The quality of a product or service is dependent on the quality of
the process used to create it.
 Requirement
A requirement is a needed capability, condition, or property that must be possessed by
an entity to satisfy a contract, standard, specification, or other formally imposed
documents. A requirement is a way of characterizing a user’s need in a way that allows
a development team to implement that need in the product in a concrete way. The
achievement of the requirement is the yardstick by which we measure the quality of a
product or a service.
User
A user is either the customer or the end user. The user is either the customer (either
internal or external) or represented by a buyer or the user community.
Evaluation
It is defined as the process of determining the satisfaction of requirements. As defined
by Kenett is defines evaluation as “a process to evaluate the quality of products and to
evaluate associated documentation, processes, and activities that impact the quality of
the products”. Evaluation includes methods such as analyses, inspections, reviews, and
tests.
1.10 Measure and Measurement
Measure is to ascertain the characteristics or features (extent, dimension, quantity, capacity,
and capability) of something, especially by comparing with a standard. Measurement is a
dimension, capacity, quantity, or amount of something (e.g., 300 source lines of code or seven
document pages of design). Measurement is the process by which numbers or symbols are
assigned to attributes of entities in the real world in such a way as to characterize the attributes
by clearly defined rules.
Failure
A failure is said to occur whenever the external behaviour of a system does not conform
to that prescribed in the system specification.
Error
An error is a state of the system. In the absence of any corrective action by the system,
an error state could lead to a failure which would not be attributed to any event
subsequent to the error.
Fault
A fault is the adjudged cause of an error.
1.11 Cost of Quality
The “cost of quality” isn’t the price of creating a quality product or service. It’s the cost of not
creating a quality product or service. Every time work is redone, the cost of quality increases.
Cost of quality is the sum of various costs as that of appraisal costs, prevention costs, external
failure costs, and internal failure costs. It is generally believed that investing in prevention of
failure will decrease the cost of quality as failure costs and appraisal costs will be reduced.
Understanding the cost of quality helps organizations to develop quality conformance as a
useful strategic business tool that improves their product, services & brand image. This is vital
in achieving the objectives of a successful organization.
COQ is primarily used to understand, analyze & improve the quality performance. COQ can
be used by shop floor personnel as well as a management measure. It can also be used as a
standard measure to study an organization’s performance vis-à-vis another similar organisation
and can be used as a benchmarking index.
1.12 Various types of Quality Costs are
Appraisal Costs: The costs associated with measuring, evaluating or auditing products or
services to assure conformance to quality standards and performance requirements. These
include the costs of
Inspection of software requirements
In-process and final inspection
Product and process audits
Prevention costs: Prevention Costs are any costs that are incurred in an effort to minimize
appraisal and failure costs. This category is where most quality professionals want to live. They
say an ounce of prevention is worth a pound of cure and they are what this category is all about.
This includes the activities that contribute to creation of the overall quality plan and the
numerous specialized plans. Examples are costs associated with Quality planning, formal
technical reviews, test equipment, training.

Failure costs: The costs resulting from products or services not conforming to requirements
or customer/user needs. Failure costs are divided into internal and external failure categories.
Internal failure costs: Incurred when an error is detected in a product prior to shipment;
Include rework, repair, and failure mode analysis
External failure costs: Involves defects found after the product has been shipped
Include complaint resolution, product return and replacement, help line support, and warranty
work.
Examples of the various costs are
Prevention – Training Programme, Preventive Maintenance
Appraisal – Depreciation of Test/ Measuring Equipment, Inspection Contracts
Internal Failure – Scrap, Rework, Downtime, Overtime
External Failure – Warranty, Allowances, Customer Returns, Customer Complaints,
Product Liability, Lawsuits, Lost Sales
Identifying COQ can have several benefits, as
It provides a standard measure across the organisation & also inter-organisation
 It builds awareness of the importance of quality
It identifies improvement opportunities
1.13 Some of the factors which result in poor-quality software are
Lack of domain knowledge: Most developers are not experts in the business domain served
by their applications, be it telecommunications, banking, energy, supply chain, retail, or others.
The best way to mitigate this is to provide access to domain experts from the business,
proactively train developers in the business domain, and conduct peer reviews with those
possessing more domain experience.
Lack of technology knowledge: Most developers are proficient in several computer languages
and technologies. However, modern multi-tier business applications are a complex tangle of
many computer languages and different software platforms. These tiers include user interface,
business logic, and data management, and they may interact through middleware with
enterprise resource systems and legacy applications written in archaic languages. Few
developers know all of these languages and technologies, and their incorrect assumptions about
how other technologies work is a prime source of the non-functional defects that cause
damaging outages, data corruption, and security breaches during operation. The best way to
mitigate this cause is to cross-train developers in different application technologies, conduct
peer reviews with developers working in other application tiers, and perform static and
dynamic analyses of the code.
Badly engineered software: Two-thirds or more of most software development activity
involves changing or enhancing existing code. Unnecessarily complex code is often
impenetrable and modifying it leads to numerous mistakes and unanticipated negative side
effects. These newly injected defects cause expensive rework and delayed releases. The best
way to mitigate this cause is to re-factor critical portions of the code guided by information
from architectural and static code analyses.
Unrealistic schedules: When working at breakneck pace, stressed developers make more
mistakes and have less time to find them. The only way to mitigate these death march travesties
is through enforcing strong project management practices. Controlling commitments through
planning, tracking progress to identify problems, and controlling endless requirements changes
are critical practices for providing a professional environment for software development.
1.14 Customer View of Quality
From the customer’s perspective, satisfaction after the delivering of the product is the ultimate
validation of the product quality. It is clear that the concept of quality must involve customers
or, simply put, quality is conformance to customers’ expectations and requirements
Customer views the software as a quality product if it satisfies the below mentioned
criteria
The product received is able to perform the task for which is was purchased
All the requirements and the needs are being met by the product
During the transaction they received a treatment which maintained their integrity and
respect.
1.15 Principles
The International Standard for Quality management (ISO 9001:2008) adopts a number of
management principles that can be used by top management to guide their organizations
towards improved performance.
Customer focus
Since the organizations depend on their customers, they should understand current and
future customer needs, should meet customer requirements and should try to exceed the
expectations of customers. An organization attains customer focus when all people in
the organization know both the internal and external customers and also what customer
requirements must be met to ensure that both the internal and external customers are
satisfied.
Leadership
Leaders of an organization establish unity of purpose and direction of it. They should
go for the creation and maintenance of such an internal environment, in which people
can become fully involved in achieving the organization’s quality objective.
Involvement of people
People at all levels of an organization are the essence of it. Their complete involvement
enables their abilities to be used for the benefit of the organization; however, the
ultimate key decisions are made by the project manager.
Process approach
The desired result can be achieved when activities and related resources are managed
in an organization as a process.
System approach to management
An organization’s effectiveness and efficiency in achieving its quality objectives are
contributed by identifying, understanding and managing all interrelated processes as a
system. Quality Control involves checking transformed and transforming resources in
all stages of production process.
Continual improvement
One of the permanent quality objectives of an organization should be the continual
improvement of its overall performance, leveraging clear and concise PPMs (Process
Performance Measures).
Factual approach to decision-making
Effective decisions are always based on the data analysis and information.
Mutually beneficial supplier relationships
Since an organization and its suppliers are interdependent, therefore a mutually
beneficial relationship between them increases the ability of both to add value.
1.16 Total Quality Management (TQM)
The concept of TQM, formulated by American scholar Edward Deming, was applied in Japan
in 1965, in the United States in 1980, and in the United Kingdom in 1985. According to the
concept of TQM, quality is the factor of overall development of the organization. TQM
emphasizes continuous improvement methods, participatory management and team work.
Total quality management (TQM) is a way of managing to improve the effectiveness,
flexibility and competitiveness of a business as a whole. It involves whole companies getting
organized in each department, each activity, and each person, at each level. For an organization
to be truly effective, every single part of it must work properly together, because every person
and every activity affects and in turn is affected by others. It is in this way that Japanese
companies have become so competitive and so successful.
Total quality management is also a method of removing waste, by involving everyone
in improving the way things are done. TQM must be applied throughout an organization so that
people from different department, with different priorities and abilities, communicate with and
help each other. The method is useful in finance, design, research and development,
purchasing, personnel and production/ operation.
Total quality management (TQM) is a management method used to maintain and enhance the
quality of goods and services. It is also a management philosophy that constantly helps to
improve the quality of the product or service provided to satisfy the customer, consumer or
service recipients. TQM is the commitment of the top management and the diligence of the
staff to continuously improve the quality of goods and services provided by the organization.
Reducing errors in production and distribution is also a way to continuously improve quality.
Quality service delivery is seen as a strategy of the organization. The goal of TQM is the
complete satisfaction of the customer or service recipient.
TQM is an organizational approach that continuously improves the quality of all processes,
goods and services of the organization. Similarly, TQM is a tool or method to enhance customer
satisfaction through continuous customer support. It is also a method of achieving high-quality
products or services through continuous improvement.
1.17 Features of Total Quality Management (TQM)
1. The top management is fully committed to maintain the required quality in the goods
and services that are produced and processed by the concerned organization.
2. Quality is given an important place in the strategic plan of the organization.
3. Quality management work is adopted as a continuous practice.
4. During TQM, attention is paid to the overall development of the organization.
5. Quality is enhanced by making effective and maximum use of resources. Also improved
materials are used.
6. Participatory concept is implemented for TQM.
7. Continuous improved by measuring the existing quality.
8. The highest satisfaction of customer, consumer or service recipient is the main basis of
TQM.
9. In addition to the use of new technologies, modern communication and information
technology is used in the quality management and marketing process.
10. Production process and method will be changed.
1.18 Elements of Total Quality Management (TQM)
• System Approach
• Accurate Measurement
• Customer Focus
• Employee Participation Commitment of Management

1.19 Tools and Techniques for Total Quality Management (TQM)

Project Managers rely on several tools and techniques for total quality management. They are
Tools and Techniques of TQM
Right First Time: Employees ensure quality while they work. They do the right things first
time. They aim for zero defect.
Benchmarking: It is the process of learning from best practices of other projects that produce
superior performance. They do exceptionally high quality things.
Outsourcing: It is subcontracting services and operations to outside firms who can do them
cheaper and better.
ISO 9000: They are set of quality standards created by International Organization for
Standardization (ISO). Organizations obtain certification form ISO for product testing,
employee training, record keeping, supplier relations and repair policies and procedures.
Statistical Quality Control: It includes a set of specific statistical tools that can be used to
monitor quality. It is based on sampling.
Just-in-Time Inventory Management (JIT): Inventories are received just-in-time to be used
up by production. They are not stored.
Speed: Speed is the time needed to get the activities accomplished. TQM increases speed.
Speed becomes a part of project culture.
Training: Employees are provided continuous training in quality matters. Quality circles also
serve as training grounds for TQM.
1.20 There are several kinds of root cause analysis techniques. These include:
• Pareto Chart
• 5 Whys
• Fishbone Diagram
• Scatter Plot Diagram
• Failure Mode and Effects Analysis (FMEA)
• Fault Tree Analysis
we will compare and analyse Pareto Chart, 5 Whys, and Fishbone diagram and discuss their
pros and cons as a root cause analysis method.
Comparing the Pros and Cons of Pareto, 5 Whys, and Fishbone Methods of RCA for
Driving Quality Performance
What Is a Pareto Chart: A Pareto chart represents the frequency or the impact of problems
in descending order from left to right in the form of a bar chart. This helps the quality team
identify problems that need attention on priority. It works on Pareto’s law that lays down the
80/20 rule, where 20% of inputs are known to cause 80% of the results.
5 Why: In the 5 Why method, the question ‘why’ is asked repeatedly at every level, helping to
dig deeper and identify the true cause of an issue. It is a simple tool and doesn’t need advanced
data. This further enhances the understanding derived from the Pareto chart.
Fishbone Diagram: A fishbone diagram is also known as a cause-and-effect or Ishikawa
diagram. It helps to categorize the suspected causes and can be subdivided into multiple levels,
going deep into the problem.
1.21 Application of the Three RCA Techniques in Quality Management
If a problem has many root causes, the Fishbone diagram and 5 Whys can help to unearth them.
While Fishbone enables grouping them into different categories, 5 Why helps to dig deeper
into each root cause. The 5 Whys method is especially useful when there is no evident root
cause, while Pareto helps to grade the known causes and prioritise the response to each.
Fishbone and 5 Why also allow links to be established between different events and their
causes, which helps to identify the appropriate, meaningful, and impactful solution. The two
can also be used together to visualize the several causes of a problem and organize them for
further analysis and data gathering.
Fishbone is especially useful in facilitating collaboration between the different stakeholders,
representing their ideas visually, stimulating and broadening thoughts on the causes and their
solutions, and coming to a consensus.
The 5 Whys can enhance the impact of these insights by allowing every cause to be drilled
down further. Pareto can help with prioritizing the causes and addressing each in the order of
severity for continuous improvement.
1.22 Pros and Cons of the 3 RCA Techniques
Below is a table providing the advantages and disadvantages of the three RCA techniques.

Technique Advantages Disadvantages

* Represents only qualitative data that

* Identify and determine the main
cannot be quantified. So, assessing
cause by ranking them in the order of
severity is a challenge
Pareto their severity
* Focuses on past data after the damage
*Helps prioritize solution-
has already happened. This may be
identification
irrelevant to predict future scenarios
 * Assess the cumulative impact of a * Its application is limited to some
defect over a long period of time situations only
* Improves problem-solving skills of
the team

* It is simple, elegant, and easy to * May be too basic

apply
* Depends on the capability of the
* Discovers deeper issues rather than investigator or investigators
5 Whys assign blame
* Results may be subjective and cannot be
* Helps to identify solutions replicated
*Facilitates collaboration for * May be effective for simple problems
continuous improvement only

* Risk of digression and confusion due to

* Determine the cause-and-effect
accommodating too many ideas
relationship between problems and
processes * Can become complicated due to handling
Fishbone
multiple factors
Diagram * Facilitate collaboration for problem-
solving * Categorization and subcategorization
can add further complexity, making the
* Generate innovative solutions
problem larger than it is

The three root cause analysis methods are very useful in providing insights into the root cause,
the relationship between the different causes, the root cause that needs to be addressed first,
and in enabling collaboration for finding an effective solution. It can help with triggering
CAPA to address the current issue and prevent future issues. But each has its own limitations
and may be effective together.
1.23 FISHBONE DIAGRAM PROCEDURE

Fishbone Diagram Example

Materials needed: marking pens and flipcharts or whiteboard.
1. Agree on a problem statement (effect). Write it at the center right of the flipchart or
whiteboard. Draw a box around it and draw a horizontal arrow running to it.
 2. Brainstorm the major categories of causes of the problem. If this is difficult use generic
headings:
▪ Methods
▪ Machines (equipment)
▪ People (manpower)
▪ Materials
▪ Measurement
▪ Environment
3. Write the categories of causes as branches from the main arrow.
4. Brainstorm all the possible causes of the problem. Ask "Why does this happen?" As
each idea is given, the facilitator writes it as a branch from the appropriate category.
Causes can be written in several places if they relate to several categories.
5. Again ask "Why does this happen?" about each cause. Write sub-causes branching off
the causes. Continue to ask "Why?" and generate deeper levels of causes. Layers of
branches indicate causal relationships.
6. When the group runs out of ideas, focus attention to places on the chart where ideas are
few.
FISHBONE DIAGRAM EXAMPLE
This fishbone diagram was drawn by a manufacturing team to try to understand the source of
periodic iron contamination. The team used the six generic headings to prompt ideas. Layers
of branches show thorough thinking about the causes of the problem.

Fishbone Diagram Example

For example, under the heading "Machines," the idea "materials of construction" shows four
kinds of equipment and then several specific machine numbers.
Note that some ideas appear in two different places. "Calibration" shows up under "Methods"
as a factor in the analytical procedure, and also under "Measurement" as a cause of lab error.
"Iron tools" can be considered a "Methods" problem when taking samples or a "Manpower"
problem with maintenance personnel.
1.24 TQM and Service Sector
Total Quality Management (TQM), a holistic approach to quality management, encourages
businesses to pursue excellence across the board. It includes the full spectrum of tasks, from
preparation and design to creation, service provision, and client satisfaction.
TQM focuses on customer happiness, process improvement, cost cutting, and enhanced
efficiency to improve the quality of products and services in service industries. The strategy
considers all parties involved, including partners, suppliers, customers, and other stakeholders.
TQM promotes continual process and performance improvement by making sure that everyone
in the organization collaborates to achieve excellence.
Theoretical Model of TQM
TQM implements quality management principles across the entire organization, including all
divisions and personnel. TQM is founded on a set of values intended to establish and uphold
excellence across a business. These values include staff involvement, process control,
continuous improvement, and customer emphasis. The success of every service industry
depends on each of the following factors &miuns;
Customer Focus − Businesses must put the requirements of the customer first by
identifying those needs and implementing processes to address them. Customers must
be informed of how well their procedures are working, and improvements must be made
as necessary.
Ongoing Improvement − To be competitive, organizations must continuously assess
and enhance their procedures. This includes monitoring performance and altering
procedures as needed.
Process Control − Businesses need to monitor their processes to make sure they adhere
to best practices and satisfy client requirements. This entails standard-setting,
performance evaluation, and process and procedure documentation.
Employee Involvement − For the process to be successful, employees must be
involved. This entails delivering quality management training, promoting candid
communication between staff and management, and putting in place quality assurance
procedures.
If properly applied, TQM can be a potent instrument for enhancing operations in the service
sector. Organizations can develop a culture of quality that will guarantee success by
concentrating on customer needs, continuously improving processes, managing processes, and
involving people.
1.25 Factors of TQM in A Service Sector
TQM can be used in any company or sector, but it is crucial in the service sector because of
how much customers depend on the calibre of the services they receive. Businesses including
restaurants, hotels, banks, retail stores, and transportation providers are all part of the service
industry. When applying TQM in the service sector, it is important to consider a few key
factors.
Employee Engagement
Engagement among employees is the primary factor. Employee participation in
decision-making, problem-solving, and idea-sharing is required under TQM. This will
guarantee that staff members are knowledgeable about client wants and expectations
and have the abilities needed to deliver high-quality service.
Customer Comments
Customer input is the second aspect to take into account while implementing TQM in
the service industry. Customers' comments can give businesses insight into areas that
need development as well as what the public thinks of their products and services. This
enables businesses to modify their goods or services to better satisfy client needs.
Process Development
Process improvement is the third element to take into account while using TQM in the
service industry. Process improvement entails evaluating current practices and making
adjustments that boost effectiveness and lower errors. Organisations can improve
service delivery and lower the costs of doing so by implementing process improvement.
Businesses can raise customer satisfaction and enhance overall performance by taking these
three elements into account when implementing TQM in the service sector. Additionally,
implementing TQM in the service industry can benefit businesses by saving them time and
money, which eventually increases profitability.
1.25 Implementation of TQM in A Service Sector
Businesses can enhance their operations, goods, and services, enhancing customer happiness
and overall performance, by applying TQM in the service industry. The following steps can be
followed to implement TQM in a service sector −
Formulation of Service Quality Strategy
A well-defined aim, patience, and discipline are required to achieve comprehensive
service quality. Analysis of customer expectations, control parameters, feedback
mechanisms, and assessment are all important when establishing a continuous
improvement approach. Based on the results of this analysis, a quality improvement
strategy should be created. It should include a mission and vision statement toward
customers, a framework to support customer service requirements, a customer
satisfaction feedback program, and a set of performance standards to which
comparisons can be made.
Analysis of Service Process and Formulation of Quality Measures
To ensure proper implementation and evaluation, the method by which service
functions operate must be accurately identified. To do this, elaborate flow process
diagrams for inputs, process activities, and outputs must be created. The analysis must
also have high-quality dimensions. It takes into account how long it takes to complete
 a service, how much it costs to satisfy the consumer, and how many mistakes are made.
Organizations should evaluate current measurements, documentation, and reporting
systems before adopting new, efficient measures that incorporate feedback from
customers.
Establishment of A Control System
Process controls must be established to continuously monitor the service process.
Analyzing the current process to identify critical performance areas, gathering data, and
creating a trial control system are crucial steps in this process. Understanding what has
to be monitored and regulated to satisfy consumer demands should be the main goal.
Identifying Gaps and Setting Measures for Improvement
This step focuses on identifying internal process issues that affect customer satisfaction
and expenses and exploring the potential for process improvement. This can be
accomplished by gathering and analyzing data on process performance. Drawing cause-
and-effect diagrams will help you pinpoint the origins of waste or subpar quality. This
procedure can assist in identifying persistent problem areas, considering options for
improvement, and selecting improvement projects.
Improvement in The Overall Service Quality
A new level of process performance must be attained and maintained during the
involvement stage. This necessitates regular reviews of quality management
performance and possibilities for quality improvement with all personnel. It should then
establish action plans, test them, and put them into practice. The method must put a
strong emphasis on sustaining widespread management participation and involvement.
1.26 TQM (Total Quality Management) in a Quality 4.0 – meaning and role
TQM stands for Total Quality Management. It is an approach to management that focuses on
continuously improving organizational processes, products, and services. TQM aims to meet
or exceed customer expectations and customer experience by involving all employees in the
quality improvement approach.
TQM strives to achieve optimal customer satisfaction by ensuring that every aspect of an
organization’s operations is geared toward delivering high-quality products or services. This
includes everything from product design and development to production, distribution, and
customer service.
TQM stands for Total Quality Management
TQM is a holistic approach involving all organizational levels, from senior management to
frontline workers. It involves using data and statistical analysis to identify and measure quality
problems and monitor progress toward continuous improvement (also sometimes called
‘Kaizen’) goals. Organizations can improve quality, reduce costs, increase efficiency, and
enhance customer satisfaction through this approach. It’s clear that TQM is oriented on long-
term success, not quick fixes or the short term. A look at the meaning of TQM today and how
it relates to IT and digital transformation with Industry 4.0 and the related notion of Quality
4.0.
1.27 The critical role of IT in TQM
Information technology (IT) obviously has become vital for TQM as it provides tools and
technologies that enable organizations to manage and improve the quality of their products and
services. Moreover, digital technologies and the whole datasphere nowadays play a crucial role
in virtually all organizational operations and the activities of employees on all levels. Here are
some of the functions that IT plays in TQM:
• Data collection and analysis: IT can provide systems for collecting and analyzing data
related to quality metrics, such as defect rates, customer complaints, and process
performance. This data can be used to identify areas for improvement and track
progress toward quality goals.
• Quality management systems: IT can provide software for managing quality
processes, such as document control, corrective and preventive action, and audit
management. These systems can help ensure that quality procedures are standardized
and consistently applied across the organization.
• Automation of quality processes: IT can automate quality processes, such as
inspection and testing, to reduce errors and improve efficiency. This can help ensure
that products and services meet or exceed customer expectations.
• Communication and collaboration: IT can facilitate communication and cooperation
between departments and teams involved in quality management. This can help ensure
that everyone is working towards the same quality goals and that information is shared
effectively.
• Customer feedback: IT can provide systems for collecting and analysing customer
feedback, such as surveys, social media monitoring, and customer metrics on levels
such as customer satisfaction and customer-centricity. This can help organisations
understand customer needs and preferences and identify opportunities for
improvement.
In summary, IT can help organisations implement TQM by providing tools and technologies
that support data analysis, quality management, automation, communication, collaboration,
and customer feedback.
1.28 TQM - a brief overview with principles and methods
TQM has its roots in the quality management practices that emerged in Japan in the 1950s and
1960s. At that time, Japanese companies competed in a global market that American and
European firms dominated. To stay competitive, Japanese companies began to focus on
improving the quality of their products and services.
TQM and continuous improvement – the famous PDCA cycle (Plan-Do-Check-Act), also
known in lean manufacturing and Six Sigma
This Deming method, also known as the Deming cycle or PDCA cycle, consists of four
steps, which form the acronym PDCA:
1. Plan: In this step, the organization identifies a problem or opportunity for improvement,
sets objectives, and develops a plan to achieve those objectives.
2. Do: In this step, the plan is implemented, and data is collected to measure the
effectiveness of the plan.
3. Check: In this step, the data collected in the previous step is analyzed to determine if
the plan effectively achieved the objectives.
4. Act: In this step, the organization takes action based on data analysis. If the plan was
effective, it is standardized and integrated into the organization’s processes. If the plan
is ineffective, the organization revises the plan and repeats the PDCA cycle.
The Deming method emphasizes the importance of continuous improvement and the use of
data to drive decision-making. It is widely used in quality management and process
improvement initiatives. It also is important in lean manufacturing and Six Sigma, two quality
control concepts that came after TQM and became more popular but have a lot in common
with it. Deming also was a strong believer in the role that all employees, more ‘ordinary
workers’ included, played in quality control.
To achieve fitness for use, a three-step process:
1. Identify customer needs and expectations: This involves understanding the needs and
expectations of customers through market research, surveys, and other feedback
mechanisms.
2. Translate customer needs into product or service requirements: This involves
translating customer needs and expectations into specific, measurable requirements that
can be used to design and produce the product or service.
 3. Develop and produce the product or service: This involves designing and producing
the product or service to meet the identified requirements and continuously monitoring
and improving the process to ensure that the product or service remains fit for use over
time.
1.29 The link between TQM and Industry 4.0
TQM and Industry 4.0 are closely linked, as both approaches focus on improving quality
and efficiency through technology and data.
Industry 4.0 refers to the automation and data exchange trend in manufacturing technologies
focusing on digitization and digital transformation, whereby ecosystems play an important
role. It leverages various technologies such as Industrial IoT, big data and analytics, AI and
machine learning, robotics, cloud computing etc. to create “smart factories” and build digital
supply chains that are more efficient, flexible, and responsive to customer and partner needs.
TQM and Industry 4.0 share several common goals, such as improving quality, reducing waste,
and enhancing customer satisfaction. However, Industry 4.0 provides new opportunities for
TQM by enabling the collection and analysis of real-time data from manufacturing processes,
which can be used to identify quality issues and optimize production.
For example, in an Industry 4.0-enabled factory, smart sensors can collect data on production
processes, such as temperature, pressure, and vibration. This data can be analyzed in real-time
to identify quality issues and optimize the production process. This enables organizations to
detect quality problems before they become more severe and costly to fix.
Moreover, Industry 4.0 can also help organizations to enhance customer satisfaction by
enabling more customized products and services. For example, with advanced technologies,
manufacturers can offer products tailored to individual customer needs, improving customer
satisfaction and loyalty.
In summary, TQM and Industry 4.0 are closely linked, as both approaches aim to improve
quality and efficiency through technology and data. By leveraging the opportunities provided
by Industry 4.0, organizations can enhance their TQM practices and achieve better outcomes
for their customers and stakeholders.
Quality 4.0: integrating digital technologies and quality management systems
Regarding quality management and Industry 4.0, we often see the term Quality 4.0 (just as
some people talk about Logistics 4.0, etc.). So, Quality 4.0 is a term used to describe the
integration of digital technologies and quality management systems.
It is a concept based on the principles of Industry 4.0 and uses the aforementioned digital
technologies (artificial intelligence, the Internet of Things, big data analytics, cloud and other
related technologies such as digital twins) to enhance quality management processes.
Quality 4.0 aims to improve quality management systems by enabling real-time
monitoring, predictive maintenance, and data-driven decision-making. It also aims to increase
efficiency and reduce costs by automating quality control processes and facilitating continuous
improvement through data analysis.
In essence, Quality 4.0 represents a shift from reactive quality control to proactive quality
assurance, where quality management systems are integrated with digital technologies to
enable a more agile, efficient, and effective quality management process.

1.30 The principles of TQM in a nutshell

The principles of Total Quality Management (TQM) are:
• Customer focus: The primary focus of TQM is to meet or exceed customer
expectations. Organizations must understand the needs and expectations of their
customers and strive to deliver high-quality products and services that meet those needs.
• Continuous improvement (Kaizen): TQM is an ongoing improvement process.
Organizations must continually strive to improve their products, services, and processes
to meet changing customer needs and expectations.
• Employee involvement: Total Quality Management means that ALL employees are
involved in the quality improvement process. Staff at all levels of the organization
should be involved in identifying quality problems, developing solutions, and
implementing improvements.
• Process orientation: TQM focuses on improving the quality of organizational
processes. Organizations can reduce defects, waste, and costs by improving efficiency
and effectiveness.
• Data-driven decision making: TQM relies on data and statistical analysis to identify
quality problems and measure progress towards improvement goals. Organizations
must collect, analyze, and use data to make informed decisions about quality
improvements.
• Leadership involvement: TQM requires leadership commitment and involvement.
Senior management must provide the necessary resources and support for quality
improvement initiatives and be actively involved in driving the TQM process.
• Supplier partnerships: TQM involves developing partnerships with suppliers to
ensure they provide high-quality inputs that meet the organization’s needs.
Organizations must work with suppliers and ecosystems to improve their quality and
reliability.
• Strategic planning: TQM requires strategic planning to ensure that quality
improvement initiatives are aligned with the organisation’s overall goals and
objectives.
 QUESTIONS

PART-I
1. Elucidate the concept of Quality Management.
2. Define the term Appraisal Cost.
3. Enumerate four significant roles of quality in business operations.
4. Identify the fundamental elements of Total Quality Management (TQM).
5. Explain the concept of ISO 9000.
6. Describe Deming’s Cycle.
7. Define Failure Mode and Effects Analysis (FMEA).
8. Provide a brief explanation of a Pareto Chart.
9. Recall Total Quality Management
10. List two advantages of the PDCA Cycle.

PART-II
1. What does the Kaizen technique entail??
2. List the factors that influence quality.
3. Discuss the significance of Deming’s Cycle.
4. Differentiate between Quality Control and Quality Management.
5. Explain the concept of the PDCA Cycle.
6. Identify factors contributing to poor quality software.
7. Define the terms ‘measure’ and ‘measurement.
8. Outline a three-step process for achieving fitness for use.
9. Discuss Pareto chart and Fishbone diagram.
10. Recall Process Orientation.

PART-III
1. Discuss the functions of Quality Assurance.
2. List the dimensions of quality as proposed by David Garvin
3. Enumerate the various types of quality costs and explain their implications on
organizational resources and performance.
4. Recapitulate the critical importance of maintaining high-quality standards in
business operations.
5. Describe the principles stipulated in ISO 9001:2008 and their role in
establishing a robust quality management system.
6. Analyze the pros and cons of the 3RCA technique in identifying and resolving
quality-related issues.
7. Explain TQM and its features.
8. Explain the critical role of Information Technology (IT) in facilitating and
enhancing Total Quality Management (TQM) practices.
9. Explain the principles underpinning Total Quality Management.
10. Illustrate how TQM and Industry 4.0 are interconnected
Unit 2: Six Sigma & Lean Management
Introduction to Six Sigma methodology, DMAIC (Define, Measure, Analyze, Improve,
Control) process Role of Black Belts and Green Belts in Six Sigma implementation, Lean
principles and their application in reducing waste, Value stream mapping and process
optimization, Lean implementation in manufacturing and service sectors.

2.1 What is Six Sigma?

Six Sigma has its roots in a 19th-century mathematical theory but found its way into today’s
mainstream business world through the efforts of an engineer at Motorola in the 1980s. Now
heralded as one of the foremost methodological practices for improving customer satisfaction
and business processes, Six Sigma has been refined and perfected over the years into what we
see today.
2.2 How Six Sigma Began
In the 19th century, German mathematician and physicist Carl Fredrich Gauss developed the
bell curve. By creating the concept of what a normal distribution looks like, the bell curve
became an early tool for finding errors and defects in a process.
In the 1920s, American physicist, engineer and statistician Walter Shewhart expanded on this
idea and demonstrated that “sigma implies where a process needs improvement,” according
to “The Complete Business Process Handbook: Body of Knowledge From Process Modeling
to BPM Vol. 1” by Mark von Rosing, August-Wilhelm Scheer and Henrik von Scheel.
In the 1980s, Motorola brought Six Sigma into the mainstream by using the methodology to
create more consistent quality in the company’s products, according to “Six Sigma” by Mikel
Harry and Richard Schroeder.

What Six Sigma Means

Experts credit Shewhart with first developing the idea that any part of the process that deviates
three sigma from the mean requires improvement. One sigma is one standard deviation.
The Six Sigma methodology calls for bringing operations to a “Six Sigma” level, which means
3.4 defects for every one million opportunities. The goal is continuous process improvement
and refining processes until they produce stable and predictable results.
Six Sigma is a data-driven methodology that provides tools and techniques to define and
evaluate each step of a process. It offers methods to improve efficiencies in a business structure,
improve the quality of the process and increase the bottom-line profit.
2.3 Importance of People in Six Sigma
A key component of successful Six Sigma implementation is buy-in and support from
executives. The methodology does not work well when the entire organisation has not bought
in.
Another critical factor is the training of personnel at all levels of the organisation. White Belts
and Yellow Belts are typically introduced to process improvement theories and Six Sigma
terminology. Green Belts typically work for Black Belts on projects, helping with data
collection and analysis. Black Belts lead projects, while Master Black Belts look for ways to
apply Six Sigma across an organisation.
2.4 The Importance of Six Sigma
Six Sigma proponents claim its business strategy benefits include up to 50% process cost
reduction, cycle-time improvement, less waste of materials, a better understanding of customer
requirements, increased customer satisfaction and value stream, and more reliable products and
services.
Motorola holds the federal trademark for Six Sigma, and it is generally acknowledged that Six
Sigma can be costly to implement and can take several years before a company begins to see
bottom-line results.
2.5 The key principles of Six Sigma
The key sigma principles are the following:
• Customer focus
• Use data
• Improve continuously
• Involve people
2. 6 Methodologies of Six Sigma
Six Sigma's primary methodologies are used in five sections, according to the 2005 book
“JURAN Institute Six Sigma Breakthrough and Beyond” by Joseph A. De Feo and William
Barnard.
DMAIC: The DMAIC method is used primarily for improving existing business processes.
The letters stand for:
• Define the problem and the project goals
• Measure in detail the various aspects of the current process
• Analyze data to, among other things, find the root defects in a process
• Improve the process
• Control how the process is done in the future
• Be thorough
The above principles can be applied with one of two improvement methodologies: Six
Sigma DMAIC and Six Sigma DMADV. Each term's name is derived from the significant
steps in its process, but each has its use.
• DMAIC (define, measure, analyse, improve, control) is used to correct an existing
process.
• DMADV (define, measure, analyse, design, validate) is used to create a new process.
DMAIC
Here is a step-by-step breakdown of Six Sigma DMAIC:
1. Define: Identify the project goals and all customer deliverables.
2. Measure: Understand current performance.
3. Analyze: Determine the root causes of any defects.
4. Improve: Establish ways to eliminate defects and correct the process.
5. Control: Manage future process performance.

Step-by-step DMAIC process breakdown.

DMADV
Here is a step-by-step breakdown of Six Sigma DMADV. The first three steps of this
methodology are identical to DMAIC. Because the two acronyms are so similar, some
companies use the acronym DFSS (design for Six Sigma) instead of DMADV.
1. Define: Identify the project scope and all customer deliverables.
2. Measure: Understand current performance.
3. Analyze: Determine the root causes of any defects.
4. Design: Create a process that meets customer needs and expectations.
5. Verify: Ensure the process designed meets customer needs and performs adequately.

Step-by-step Six Sigma DMADV process breakdown.

When contemplating Six Sigma DMAIC versus DMADV, it is essential to understand the
circumstances in which each should be used.
The DMAIC methodology should be used when an existing product or service is not meeting
customer needs or performing to its highest standards.
The DMADV methodology should be used when an organisation develops a new product or
service or uses DMAIC for a current project, or process fails.
2.7 How to implement Six Sigma
The first step to implement Six Sigma within an organisation is to properly make the case for
statistical tools like Six Sigma and its potential benefits to get stakeholder buy-in.
Additionally, it's essential to set the expectation that being entirely defect-free is unrealistic.
However, some best practices can help to ensure the making of as much improvement as
possible.
Once management understands the potential behind Six Sigma, the following eight steps can
help to implement a Sigma project and ensure a clean rollout.
• Step 1: Motivate stakeholders by highlighting quality losses.
• Step 2: Implement project management and obtain the necessary resources.
• Step 3: Educate team members on the Six Sigma management method.
• Step 4: Create a quality control chart and identify priorities.
• Step 5: Assign ownership to all team members involved.
 • Step 6: Ensure measurement of the right metrics and indicators.
• Step 7: Perform a root cause analysis to understand the defect.
• Step 8: Govern the program to ensure proper implementation and continuous
improvement.
Please note that these steps may vary depending on whether you utilise Six Sigma or Lean Six
Sigma.
2.8 The difference between Six Sigma vs. Lean Six Sigma.
The purposes of Six Sigma and Lean Six Sigma are different.
The Six Sigma method is focused on limiting fluctuation within business processes and quality
management of process output by implementing problem-solving statistical methods.
Conversely, the primary focus of Lean Six Sigma is to eliminate waste and improve existing
processes.
2.9 Six Sigma certification and resources
All Six Sigma processes are executed by the following:
• Six Sigma White Belts
• Six Sigma Yellow Belts
• Six Sigma Green Belts
• Six Sigma Black Belts
Sigma programs are overseen by a Six Sigma Master Black Belt, per the terms created by
Motorola.

Hierarchy for Six Sigma implementation, as dictated by Motorola.

The International Association for Six Sigma Certification (IASSC) is one organisation that
provides a certification program.
At IASSC, yellow, green and black belt exams are designed to measure a person's knowledge
of topics contained within IASSC's Universally Accepted Lean Six Sigma Body of Knowledge.
2.10 Six Sigma Roles and Responsibilities
Many organizations have implemented the following roles in their Six Sigma.
• Black Belts
• Executive Sponsors
• Master Black Belts
• Champions
• Green Belts
• Process Owners
Black Belts
Six Sigma black belts are most effective in full-time process improvement positions. The term
black belt is borrowed from the martial arts, where the black belt is the expert who coaches and
trains others as well as demonstrates a mastery of the art. Similarly, six sigma black belts are
individuals who have studied and demonstrated skill in implementing the principles, practices,
and techniques of Six Sigma for maximum cost reduction and profit improvement. Black belts
demonstrate their skills through significant financial gain and customer benefits on multiple
projects. Black belts may be utilized as team leaders responsible for measuring, analyzing,
improving, and controlling key processes that influence customer satisfaction and/or
productivity growth.
Black belts may also operate as internal consultants, working with a number of teams at once.
They may also be utilized as instructors for problem solving and statistics classes. Black belts
are encouraged to mentor green belt and black belt candidates. Potential black belts often
undertake four weeks of instruction over three or four months. Specific elements will differ,
but all stress an understanding of variation reduction, training, and project management. Black
belts often receive coaching from a master black belt to guide them through projects.
Black belts have the following duties in their company:
• Mentor: Have a network of six sigma individuals in the company
• Teacher: Train local personnel
• Coach: Provide support to personnel on local projects
• Identifier: Discover opportunities for improvement
• influencer: Be an advocate of Six Sigma tools and strategy
Master Black Belts:
Six Sigma master black belts are typically in full-time process improvement positions. They
are, first and foremost, teachers who mentor black belts and review their projects. Selection
criteria for master black belts include both quantitative skills and the ability to teach and
mentor. For master black belt recognition, an individual must be an active black belt who
continues to demonstrate skill through significant positive -financial impact and customer
benefits on projects. The ability to teach and mentor is evaluated by reviewing the number and
caliber of people they have developed. Teaching may also be demonstrated in classroom
environments.
Green Belts:
Six Sigma Green Belts are not usually in full-time process improvement positions. The term
green belt is also borrowed from the martial arts, referring to an individual who has mastered
the basic skills but has less experience than black belts. Green belts must demonstrate
proficiency with statistical tools by using them for positive financial impact and customer
benefits. Individuals may remain green belts or, with experience, they may become black belts.
Green belts operate under the supervision and guidance of a black belt or master black belt.
Executive Sponsors:
Executive sponsorship is a critical element of an effective black belt program. Executive
leadership sets the direction and priorities for the organization. The executive team is
comprised of the leaders that will communicate, lead, and direct the company’s overall
objectives towards successful and profitable six sigma deployment. Executives typically
receive training that includes a six sigma program overview, examples of successful
deployment and strategies, and tools and methods for definition, measurement, analysis,
improvement, and control.
Champions and Process Owners
Six Sigma champions are typically upper-level managers that control and allocate resources to
promote process improvements and black belt development. Champions are trained in the core
concepts of six sigma and deployment strategies used by their organization. Six Sigma
champions lead the implementation of the six sigma program. Champions also work with black
belts to ensure senior management is aware of the status of six sigma deployment. Champions
ensure that resources are available for training and project completion.
Process Owners:
Key processes should have a process owner. A process owner coordinates process
improvement activities and monitors progress regularly. Process owners work with black belts
to improve the processes for which they are responsible. Process owners should have basic
training in the core statistical tools but will typically only gain proficiency with those
techniques used to improve their processes. In some organizations, process owners may be six
sigma champions.
2.11 What Are Lean Tools?
The Japanese word for waste is muda, which is defined as “uselessness.” Lean tools are
designed to reduce Muda in organizations and improve quality control. In other words, Lean
tools seek to eliminate processes that aren’t valuable.
Lean tools are utilized across many industries—from manufacturing to engineering to
finance— and organizations often leverage them with Six Sigma methods. Though there are
some differences between the two frameworks, the underlying philosophies behind Lean and
Six Sigma complement each other exceptionally well: Lean tools are designed to eliminate
invaluable processes, while Six Sigma focuses on lessening variation within a process. When
used together, the two are referred to as Lean Six Sigma, a process that reduces and manages
different types of waste in organizations.
Though there are several different types of Lean tools, this article will focus on seven of them,
and how they can be applied.

Lean Tools Summary

Bottleneck Analysis Structured way of looking at workflows

Just-in-Time (JIT) On-demand system of production

Value Stream Mapping Analyzing and optimizing a process

Overall Equipment Effectiveness Measure of productive time

(OEE)
Plan-Do-Check-Act (PDCA) Method to manage change

Error Proofing Analysis tool based on prevention

Root Cause Analysis (RCA) Method to get the foundation of an issue

Lean Tools and Their Applications

Bottleneck Analysis
How many times have your projects gotten stuck somewhere between development and
delivery? Bottleneck analysis is a structured way of looking at the processes and
workflows for developing a product or service. Bottleneck analysis is also used to
address both present and future issues, by identifying and addressing operational and
process challenges.
Just-in-Time (JIT)
Just-in-time manufacturing is an on-demand system that allows manufacturers to go
into production only after the customer has requested a product. This means that
companies do not have to stock up on unnecessary inventory, lowering the risk of some
components or products being overstocked or damaged while being stored.
Value Stream Mapping
Value stream mapping is a technique developed from Lean manufacturing.
Organizations use it to create a visual guide of all the components necessary to deliver
a product or service to analyze and optimize the entire process.
Value stream mapping is used in a variety of industries, including manufacturing,
finance and healthcare. This principle takes all the necessary people, processes,
information and inventory, and displays them in a flow chart to get an overview of the
business.
 Applications
Value stream mapping can be applied to your organisation by methods such as:
• Encouraging continuous improvement in processes
• Enabling culture change within an organisation
• Facilitating apparent collaboration and communication
Overall Equipment Effectiveness (OEE)
Overall equipment effectiveness (or OEE) measures how much planned productive
time is productive. For example, imagine you’re planning to work on a project for an
hour, but then spending 20 minutes of that time answering a client call, meaning your
OEE would be about 67% (40 minutes of actual production time, divided by 60 minutes
of planned production time).
In terms of manufacturing, OEE takes into account the percentage of “good parts”
produced (“good parts” being the parts that meet the quality standards of that particular
company). In the example above, if your project has parts that are poorly constructed,
those would not count towards the “good parts” or overall OEE score.
According to oee.com, overall equipment effectiveness can be calculated by
multiplying the following three factors:
• Availability
• Performance
• Quality
These three factors are defined as follows:
• Availability = Run Time Divided by Total Planned Production Time
• Performance = (Ideal Cycle Time Multiplied by Total Count) Divided By Run
Time
• Quality = Good Count Divided by Total Count
Plan-Do-Check-Act (PDCA)
Plan-Do-Check-Act is a scientific method used to manage change, and is also known
as the Deming Cycle. It was developed by Dr. W Edwards Deming in the 1950s. The
PDCA cycle involves four parts:
1. Plan – Recognize an opportunity or process that needs improvement.
2. Do – Create a small test.
3. Check – Analyze the results of the test.
4. Act – Move forward based on those results.
Error Proofing
Error proofing—also known as poka-yoke—is a common process analysis tool that is based on
the idea of prevention. As stated by Business Map, a project management software company,
poka-yoke focuses on ensuring the right conditions exist before any process is put in place.
This step lessens the chance of defects and human error happening.
Applications
There are a few steps companies can take to implement root cause analysis successfully:
1. Recognize the issue you are trying to solve.
2. Learn details about how long the problem has been going on and how it specifically
affects your process/business.
3. Collect data about the problem and identify as many potential causes as possible.
4. Once you have data, decide what the source of the problem is.
5. Decide how to lessen the chances of the problem happening again.

Value stream mapping vs. process mapping:

• Value stream mapping provides a high-level overview of your organisation’s value
delivery and lays the groundwork for value stream management.
• Process mapping, frequently used by engineering teams, offers deeper insights into
individual processes, empowering organizations to optimize their existing operations.

Value Stream Mapping

Value stream mapping increases organizational efficiency through a better understanding of
how the process stream flows. Imagine a physical stream: blockages, turbulence, or rapids may
occur. A boat might pass through some areas of the stream quite quickly but take more time to
navigate others.
For software development companies, a value stream map presents all the stages between the
project’s planning and release. This value stream map isolates each product stage into a discrete
and concrete step that can be process mapped. Notably, a value stream map will encompass
multiple departments and isolate the value derived from each.

Value stream mapping encompasses the organisation’s delivery process from end to end. An
organization’s value stream map should quickly reveal areas where the organization could
improve. Begin building a value stream map by breaking delivery into small, iterative steps.

Most businesses already have access to all the information a value stream map can provide.
But organizing, reading, and gleaning actionable information from the data presented is
frequently the challenge. A value stream map provides the simplest possible view of a complex
sequence of processes, with opportunities to improve.
Value Stream Management
Organizations can use their value stream maps to make critical decisions — this is known
as value stream management. Value stream management ensures your software development
processes align with your business goals and identifies ways to deliver value faster. To achieve
this, organizations use value stream management to drive process change, identify
inefficiencies, and reduce waste.
Value stream management is an offshoot of Lean production. Lean follows five major
principles:
1. Identify value.
2. Map the value stream.
3. Create flow.
4. Establish pull.
5. Seek perfection.
As you can see, value stream mapping is integral to this Lean production technique. Without
mapping the value stream, the organization cannot identify disruption in the process flow. By
revealing the stream, companies may create flow, establish pull and engage in continuous
improvement — principles that align neatly with the DevOps framework and CI/CD practices.
Value stream management occurs at the highest levels of the overall product delivery and
integrates key process data. Once a value stream map is fully developed, the organization can
identify areas that require improvement. Use a value stream mapping as an overall assessment
of the organization’s time management and strengths — as well as a critical tool to drive
change.
From these maps, value stream management creates metrics by which a company can:
• Coordinate processes and workflows.
• Eliminate communication silos.
• Facilitate cross-department collaboration.
• Deliver more value faster.
Process Mapping
Process mapping describes the flow of a known process. While value stream mapping occurs
at a high level, process mapping occurs at the lowest level. Developers and engineers frequently
use process mapping to identify core inefficiencies, redundancies, and gaps in their tasks.

Value stream mapping and process mapping can work together to identify inefficiencies within
the organization’s pipeline. When used alone, process mapping will only offer an overview of
how individualized processes work. However, these insights can be quite powerful when
optimizing and sequencing individual tasks.
Ideally, value stream mapping and value stream management should come first. Value stream
management empowers developers to intelligently remove, modify and replace the
organization’s current processes and strategies. Because process mapping only identifies
inefficiencies in existing processes, you want to make sure those processes are aligned with
your business goals. Value stream mapping and value stream management can facilitate large-
scale changes to the organization’s process strategies.
Value Stream Mapping vs. Process Mapping
Value stream mapping and process mapping yield unique insights and create separate
challenges. Value stream mapping is inherently more complex, requiring a macro-level
understanding of business and development processes. While process mapping is more
straightforward and faster, process mapping can only dig deeper into existing processes.
For production environments, value stream mapping will identify potential growth areas and
bottlenecks to avoid. Value stream mapping highlights the organisation's idle time and
promotes faster, busier pipelines. Process mapping may highlight potential gaps or
redundancies in core business processes or inter-department communications.
Lean implementation in the service industry is the most common challenges
Poor implementation can be pretty challenging in a service organisation. While the principles
and learnings from Lean manufacturing are also conceptually applicable to the service
business, Lean implementation needs to be done differently in the service industry because of
the context under which service processes operate.

A few of the many challenges are:

Processes Are Not Visible
Even with process management or process person within the company, many processes
are not visible and standardized, making Lean tools challenging to apply. But, there is
a bright perspective, with so many unstandardized processes, there is lot of
opportunities for improvement projects and process design!
Processes Are Large and Complex
If we passed the first challenge, we will see why the processes were not standardized
and mapped- processes are Large and complex, therefore improvement must be joint
action of multiple departments. This challenge becomes joint improvement project but
also some kind of team building activity in different departments. All perspectives are
taken into analysis and therefore process standardization is real, and not just piece of
paper.
Processes Are Technology Dependent
Most of the service processes are Technology depend, you can look at this fact as a
challenge or like a business opportunity- Business Continuity Management starts to be
 must have in service providing organizations (not just banks). Because of this DR
location and BCM starts to be new service to be added to our clients in Outsourcing
industry.
The benefits of implementing Lean in a service industry.
Implementing Lean in a service industry can bring many benefits, such as improved customer
satisfaction, increased efficiency and productivity, reduced costs and waste, and enhanced
employee engagement and empowerment. Lean can help to enhance the customer experience
and loyalty by eliminating waste and delivering value faster, better, and cheaper. Additionally,
Lean can optimize the use of resources and time by streamlining the process and reducing
variation, as well as lower operating expenses and environmental impact by eliminating non-
value-added activities and defects. Finally, Lean can foster a culture of teamwork, innovation,
and ownership by involving employees in the improvement process and giving them autonomy
and feedback.
The challenges of implementing Lean in a service industry.
Implementing Lean in a service industry can come with various challenges, such as managing
customer expectations and variability, aligning organizational culture and leadership, and
measuring and sustaining results. To successfully apply Lean principles, one must understand
the customer's voice and value, as well as design flexible and responsive processes that can
adapt to different situations. Additionally, the organizational culture and leadership must be
willing to shift from a top-down approach to a bottom-up, customer-centric, and collaborative
approach. Lastly, performance indicators should be aligned with Lean goals, while
improvements should be standardized and sustained over time. Although implementing Lean
in a service industry may be difficult, it can create more value for customers and the
organization while reducing waste and costs.
 QUESTIONS

PART-I
1. Define Six Sigma.
2. Identify the key principles of six sigma.
3. Define DMAIC in the context of Six Sigma.
4. Explain JIT.
5. What does Poka-Yoke refer to?
6. List three types of Six Sigma certifications.
7. Define lean six sigma
8. What is value stream management.
9. Enumerate the responsibilities of a Black Belt in their organization.
10. Explain the role of an Executive Sponsor in Six Sigma.

PART-II
1. Outline the steps to implement Six Sigma in an organization
2. Write a brief note on OEE.
3. Differentiate between Six Sigma and Lean Six Sigma.
4. Discuss the benefits of implementing Lean in the service industry.
5. Explain Value Stream Mapping and its significance.
6. Name five tools used in Lean methodology.
7. Describe the role and responsibilities of a Black Belt in Six Sigma
8. Analyze the application of Value Stream Mapping in process improvement.
9. Discuss the fundamental principles of Lean production.
10. Determine and discuss the roles and responsibilities in a Six Sigma project.

PART-III
1. Identify and analyze the key challenges of implementing Lean in service
businesses..
2. Define and summarize process mapping, emphasizing its role in improving and
optimizing processes.
3. Discuss four key roles in a Six Sigma project and their responsibilities.
4. Define Lean tools and enumerate them in detail, emphasizing their applications
in process improvement and waste reduction.
5. Describe Overall Equipment Effectiveness (OEE) and its calculation factors.
6. Compare and contrast Value Stream Mapping (VSM) and process mapping,
highlighting their respective advantages and applications.
7. Explain in detail the principles of Lean production and their role in achieving
operational efficiency and customer satisfaction.
8. Discuss how Six Sigma can be integrated with other quality improvement
methodologies like TQM and ISO 9000
9. Discuss Industry 4.0’s impact on Lean Six Sigma implementation.
10. Explain how Lean Six Sigma supports sustainability and environmental
responsibility
 Unit 3
Quality Control, Quality Assurance and ISO Standards
Statistical tools for quality control (e.g., control charts, process capability
analysis), Balancing inspection and prevention in quality control, ISO 9000
series and its significance in quality management, Designing and
implementing a Quality Management System (QMS), and Certification and
auditing for ISO compliance.

STATISTICAL QUALITY CONTROL (SQC)

In the highly competitive market today, the main objective of manufacturers
or producers is to achieve quality assurance in manufacturing and service
organisations. Different statistical tools have been developed to achieve this
objective, which helps control the quality of products vis-avis the
specifications or standard. The technique of using statistical tools for
maintaining product quality vis-a-vis the specifications is known as Statistical
Quality Control (SQC).
Statistical quality control is defined as applying statistical methods based on
the theory of probability and sampling to establish quality standards and
maintain them most economically.
Let us now outline the elements that constitute SQC.
1.3.1 Elements of SQC
The following are the main elements of SQC:
a) Sample Inspection
We know that 100% inspection needs enormous time, money, labour and
resources. Further, if the nature of the product is such that it is destroyed
during the inspection process, e.g., a bulb, candle, ammunition, food, etc.,
100% inspection is not practicable. Therefore, SQC is based on sampling
inspection. In the sampling inspection method, some items or units (called
samples) are randomly selected from the process, and then every sample unit
is inspected.
b) Use of Statistical Methods
Some commonly used statistical tools such as random sampling, mean,
range, standard deviation, mean deviation, standard error and concepts such
as probability, binomial distribution, Poisson distribution, normal
distribution, etc., are used in SQC. Since quality control involves extensive
use of statistics, it is termed Statistical Quality Control.
c) Fundamental Objective
The fundamental objective of SQC is to decide whether the unit produced is
according to its specifications. Suppose the unit produced is different from its
specifications, and there is a variation in quality. In that case, it becomes
necessary to trace the causes of variation and eliminate them if possible.
d) Decision Making
With the help of SQC, we decide whether the quality of the product or the
process of manufacturing/producing goods is under control.
e) Specifications, Production and Inspection
SQC method helps decide about the specifications, production and inspection
of a product.
We now describe the techniques of statistical quality control.
1.3.2 Techniques of Statistical Quality Control
The essential techniques used for statistical quality control can be broadly
classified into two categories:
Statistical Process Control (SPC) or simply Process Control and
Product Control.
These techniques are further classified into different categories, as shown in
Fig: - Classification of SQC techniques.
Let us discuss both categories of SQC techniques in some detail.
1.3.3 Statistical Process Control (SPC)
Statistical Process Control (SPC), or simply process control (PC), is the first
part of SQC. To understand SPC, first of all, we should understand the
concept of process in quality control.
A process is a series of operations or actions that transform input to output.
It is said to be stable or repeatable if the resulting output product is of the
given specifications or standard quality. But sometimes, the regular process
could be better due to specific causes such as poor quality of raw material,
changes in the machine settings, use of the unskilled workforce, improper
machines, etc.
We require a tool or technique to control the process in such situations. This
technique is known as statistical process control (SPC).
Statistical process control is a technique used for understanding and
monitoring the process by periodically collecting data on quality
characteristics from the process, analysing them and taking suitable actions
whenever there is a difference between actual quality and the specifications
or standard.
Statistical process control technique is widely used in almost all
manufacturing processes to achieve stability and improve product quality. Its
primary tools are:
1. Histogram
2. Check sheet
3. Pareto chart
4. Cause and effect diagram
5. Process flow diagram
6. Scatter diagram
7. Control chart
Of these seven tools, we shall describe only the “control chart” technique given
by W.A. Shewhart in 1924 because it is the most preferred technique today.
It is probably an outstanding technique for controlling and improving quality.
1.3.4 Product Control
The product is so complex in many situations that a manufacturer can only
make some components or parts. Therefore, one or more component (s) of a
product are purchased from outside agents or suppliers, and the
manufacturer does not have direct control over the quality of such component
(s). In such situations, the manufacturer faces the problem of controlling
component quality (s) sourced from elsewhere. In addition, the manufacturer
needs to maintain the quality of the final product. So, they also need to ensure
that the final product meets its specifications and that various lots contain a
manageable number of defective items. Such types of problems come under
the category of product control.
Product control means controlling the products to be free from defects and
conform to their specifications.
Initially, product control was done by 100% inspection, meaning every unit
produced or received from outside suppliers was inspected.
This type of inspection gives complete assurance that all defective units have
been eliminated from the inspected lot. However, it is time-consuming and
costly. Also, if a product is destroyed under inspection, e.g., a light bulb,
crackers, ammunition, picture tube of the TV, etc., 100% inspection is
impossible.
Sampling inspection or acceptance sampling was developed as an alternative
to 100% inspection.
Acceptance sampling is a technique in which a small part or fraction of
items/units is selected randomly from a lot, and the selected items/units are
inspected to decide whether the lot should be accepted or rejected based on
the information obtained from sample inspection. This is how product control
is achieved through acceptance sampling.

INSPECTION AND QUALITY CONTROL

Inspection means the acceptability of a manufactured product. It measures
the qualities of a product or service in terms of predefined standards. Product
quality may be specified by strength, hardness, shape, surface finish,
dimensions, etc.
Quality control (QC) is a procedure or set of procedures intended to ensure
that a manufactured product or performed service adheres to a defined group
of quality criteria or meets the client's or customer's requirements.
TYPES OF INSPECTION:
FLOOR INSPECTION:
In this system, the inspection is performed at the place of production.
It suggests checking materials in process at the machine or production
time by patrolling inspectors. These inspectors move from device to
machine and from one to the other work centres. Inspectors have to be
highly skilled.
CENTRALISED INSPECTION:
Inspection is carried out in a central place with all testing equipment;
sensitive equipment is housed in an air-conditioned area. Samples are
brought to the inspection floor for checking. Centralised inspection may
be located in one or more places in the manufacturing industry.
COMBINED INSPECTION:
Combination of two methods, whatever may be the method of
inspection, whether floor or central. The main objective is to locate and
prevent defects that may not repeat in subsequent operations to see
whether any corrective measure is required and, finally, to maintain
quality economically.
FUNCTIONAL INSPECTION:
This system only checks for the primary function the product is
expected to perform. Thus, an electrical motor can be checked for the
specified speed and load characteristics. It does not reveal the variation
of individual parts but can assure the combined satisfactory
performance of all aspects.
FIRST PIECE INSPECTION:
The first piece of the shift or lot is inspected. This is mainly used where
automatic machines are employed. Any discrepancy from the operator
as a machine tool can be checked to see that the product is within
control limits.
 PILOT PIECE INSPECTION:
This is done immediately after a new design or product is developed. If
production is affected to a large extent, the product is manufactured in
a pilot plant. This is suitable for mass production and products
involving many components, such as automobiles, aeroplanes, etc., and
design or manufacturing process modification is done until satisfactory
performance is assured or established.
FINAL INSPECTION:
This is also similar to functional or assembly inspection. This inspection
is done only after completion of work. This is widely employed in process
industries that are not possible, such as electroplating or anodising
products. This is done in conjunction with incoming material
inspection.
FACTORS INFLUENCING THE QUALITY OF MANUFACTURE:
MONEY:
The most important factor affecting the quality of a product is the
money involved in the production itself. In the present day of tough and
cut throat competition, companies are forced to invest a lot in
maintaining the quality of products.
MATERIALS:
To turn out a high-quality product, the raw materials involved in the
production process must be of high quality.
MANAGEMENT:
Quality control and maintenance programmes should have support
from top management. If the management is quality-conscious rather
than merely quantity-conscious, an organisation can maintain
adequate quality of products.
PEOPLE:
People in production and designing the products must have knowledge
and experience in their respective areas.
MARKET:
The product market must exist before the product's quality is
emphasised by management. It is useless to talk about the quality when
the need for the product is lacking. For example, there is no demand
for woollen garments in hot climates (e.g., Southern part of India).
MACHINES AND METHODS:
To maintain high standards, companies are investing in new machines
and following new procedures and methods.
STATISTICAL QUALITY CONTROL:
Statistical quality control refers to using statistical methods to monitor and
maintain the quality of products and services. One way, referred to as
acceptance sampling, can be used when a decision must be made to accept
or reject a group of parts or items based on the quality found in a sample. A
second method, or statistical process control, uses graphical displays known
as control charts to determine whether a process should be continued or
adjusted to achieve the desired quality.
CONTROL CHARTS:
A control chart is a graphical representation of the collected information. The
information pertains to the items' measured or otherwise judged quality
characteristics of the samples. A control chart detects processing variations
and warns if any departure is from the specified tolerance limits.
What Is An ISO 9000?
ISO 9000 is a series of international standards concerning quality management
and assurance developed to help organisations establish and maintain an
effective quality management system (QMS). The criteria can help business
entities fulfil regulatory requirements, improve continuously, and ensure
customer satisfaction.

ISO 9000 Requirements

1. Customer Focus
Organisations must understand the requirements of existing and future
customers and aim to exceed their expectations. They can ask for
feedback from customers and monitor complaints.
2. Engagement
 Everyone at every level of an organisation should improve the
business’s capability to create customer value.
3. Leadership
A company’s leaders should establish a unity of direction throughout
the organisation to equip and empower the employees to achieve
quality-related objectives.
4. Process
Organisations must manage their activities as interrelated processes
that work as a well-organized system. Moreover, they must utilise
process analysis tools to measure their capability and spot relations
between activities to improve the processes.
5. Evidence-based Decision Making
Companies must make all decisions after thoroughly analysing and
evaluating the necessary data and information for the best results. One
must remember to balance data analysis with qualitative evidence and
practical experience.
6. Relationship Management
For short-term and long-term success, business entities must manage
their relationships with related parties, such as vendors, partners, and
contractors.
7. Continuous Improvement
Organisations must adopt an approach that focuses on continuous
improvement and empowers workers to improve and celebrate the
same. Moreover, they must measure the improvements consistently.
Principles of the ISO 9000
1. A Customer Focus
As stated before, the customer is the primary focus of a business. By
understanding and responding to customers' needs, an organisation can
correctly target critical demographics and increase revenue by delivering the
products and services the customer wants. With knowledge of customer
needs, resources can be allocated appropriately and efficiently. Most
importantly, the customer will recognise a business’s dedication, creating
customer loyalty. Customer loyalty is return business.
2. Good Leadership
A team of good leaders will establish unity and direction quickly in a business
environment. Their goal is to motivate everyone working on the project, and
successful leaders will minimise miscommunication within and between
departments. Their role is intimately intertwined with the following ISO 9000
principle.
3. Involvement of people
The inclusion of everyone on a business team is critical to its success.
Involvement of substance will lead to a personal investment in a project and,
in turn, create motivated, committed workers. These people will tend towards
innovation and creativity and utilise their full abilities to complete tasks. If
people are vested in performance, they will be eager to participate in the
continual improvement that ISO 9000 facilitates.
4. Process approach to quality management
The best results are achieved when activities and resources are managed
together. This process approach to quality management can lower costs by
effectively using resources, personnel, and time. If a process is controlled,
management can focus on goals important to the big picture and prioritise
objectives to maximise effectiveness.
5. Management system approach
Combining management groups may seem like a dangerous clash of titans,
but if done correctly, it can result in an efficient and effective management
system. If leaders are dedicated to the goals of an organisation, they will aid
each other to achieve improved productivity. Some results include the
integration and alignment of critical processes. Additionally, interested
parties will recognise a management system's consistency, effectiveness, and
efficiency. Both suppliers and customers will gain confidence in a business’s
abilities.
6. Continual Improvement
The importance of this principle is paramount and should be a permanent
objective of every organisation. A company can increase profits and gain an
advantage through improved performance. If a whole business is dedicated to
continual improvement, improvement activities will be aligned, leading to
faster and more efficient development.
Ready for improvement and change, businesses will have the flexibility to
react quickly to new opportunities.
7. Factual approach to decision making
Effective decisions are based on the analysis and interpretation of information
and data. By making informed decisions, an organisation will be more likely
to make the right decision. As companies make this a habit, they can
demonstrate the effectiveness of past decisions. This will put confidence in
current and future decisions.
8. Supplier relationships
Establishing a mutually beneficial supplier a relationship creates value for
both parties. A supplier that recognises a mutually beneficial relationship will
quickly react when a business needs to respond to customer needs or market
changes. Through close contact and interaction with a supplier, both
organisations will be able to optimise resources and costs.

Designing and implementing a quality management system

Design and implementation will occur at two levels - the firm-wide-system
level and the engagement level. Firms will naturally concentrate their
attention first on designing and implementing a quality management system
to meet the requirements of ISQM1, the scope of which then dictates the need
for policies regarding the quality reviews required by ISQM2.

Changes at the engagement level required by ISA 220 will then need to be
addressed within audit methodologies, either by in-house teams or
methodology providers.
The most significant task facing each firm is developing a quality management
system which complies with the new standards. This system must be
developed through a detailed risk assessment process, which includes three
steps
Step 1 - Establishing quality objectives
Quality objectives must be established across the following six components

• Governance and leadership Creating the environment that supports the

quality management system, including culture, leadership,
organisational structure, and resourcing
• Relevant ethical requirements Fulfilling ethical requirements, including
independence.
• Acceptance and continuance: Addressing the acceptance and
continuance of client relationships and specific engagements.
• Engagement performance: Performing high-quality engagements.
• Resources Obtaining, developing, using, maintaining, and assigning
resources – which includes human and technological resources
 • Information and communication: Obtaining, generating, or using
information and communicating this within the firm and externally.
Firms must establish further quality objectives beyond these areas, as
necessary, to achieve the overall goals of the quality management system.

Step 2: Identifying and assessing quality risks

Next, firms must identify and assess the risks which would cause failure of
the defined quality objectives.
This requires understanding and accounting for the circumstances relevant
to the firm and the engagements performed by the firm.
Step 3: Designing and implementing responses to those risks
Firms must then design and implement responses to address the quality risks
identified and assessed.
Finally, firms must include additional responses dictated by the standards -
to develop policies and procedures covering ethical requirements, complaints,
external communication regarding quality management, and engagement
quality reviews.
Designing a monitoring process
A monitoring process is required to support the operation of the quality
management system and identify deficiencies. Monitoring activities must be
established to inform whether the responses designed in Step 3 are operating
effectively, as well as whether the set quality objectives and quality risks
identified and assessed in Steps 1 and 2 remain appropriate and complete.
Firms must also include the inspection of completed engagements within their
monitoring activities.
Documentation
The firm’s quality management system must be documented with the
following items included:

While documentation requirements can be satisfied with the simplistic use of

documents and spreadsheets, an integrated technology solution will provide
a much more robust and valuable quality management system with less
reliance on manual processes.
To learn more about the new quality management standards, check out our
complete explanatory guide, or understand how technology can help your firm
implement a new quality management system.

How to implement a quality management system

Implementing a quality management system (QMS) into a business is not
always simple. Here are some key guidelines for getting a QMS started.

Steps to quality management system implementation

Creating a quality management system requires input from employees at all
levels of an organisation, starting with top management. Their firm
commitment to change and improvement is vital to the success of system
implementation.
After securing the support of top management, you should follow these key
steps to implement a quality management system:
1. Analyse your business by breaking it down into key areas. These will
often be areas that are crucial to your customer's satisfaction. Senior
staff should determine the needs of the business and design the system
around these.
2. Plan your approach by deciding which resources you need and
discussing the effectiveness of existing processes with staff. Conduct a
gap analysis to determine current processes and how they need to
change. Assemble your team and develop an implementation plan. See
the project plan for ISO 9001 implementation.
3. Inform and train employees. Decide if new processes are necessary
and tell staff about them. Provide training and explain how the new
system will benefit staff and customers.
4. Consider supporting documentation, such as quality policies,
procedures, training materials, work instructions, etc. Use version
control documents to keep your documentation in order. If you seek
ISO certification, you must keep specific documentation to meet the
requirements—Download ISO 9001:2015 documented information
guidance (PDF, 273K).
5. Deploy the system and check that the processes are working.
Give someone the responsibility for the design and ensure proper
procedures are followed. Set targets for how each function contributes
to the success of business goals. Control, measure and monitor your
outputs to ensure they meet the expected quality levels.
6. Review and revise processes where necessary—schedule routine
product or process audits to monitor compliance with policies and
procedures, and any certification requirements. Continue to audit and
review regularly to ensure continuous improvement.

An ISO certification
1. Ensures Quality Satisfaction
ISO certification ensures your customers that whatever Goods or Services you
provide are top-notch quality and is best in class. This will build trust and
confidence in customers and this ultimately build brand value for the
business
2. International Recognition
The International Organization for Standardization (ISO) is recognised
worldwide as the authority on quality management. ISO 9001:2015
certification is today's passport for your organisation to grab international
business
3. Increased Revenue
Studies have shown that ISO QMS-certified companies experience increased
productivity and improved financial performance compared to uncertified
companies.
4. Supplier Relationships
Mutually beneficial supplier relationships are one of the key attractions to ISO
certification.
5. Meet Government Tender Eligibility
ISO certification is now mandatory in most government tenders to qualify.
6. Improves credibility
A fundamental feature of ISO Certifications is quality management.
Continuously serving committed quality product and services help a business
improve its credibility and image of your business in the market.
7. Better customer experience
Customer satisfaction is one of the primary concerns of the ISO Certification.
It is a main principle under the ISO 9001 standard to enhance customer
satisfaction by improving the ways and focusing on customer needs and
expectations. A happy and satisfied customer is the basic desire of almost
every business enterprise, which indirectly induces more customers.
8. Continual improvement of business process
ISO Certification demands the continual improvement of an organisation; it
is also a way to improve your business's performance consistently. The
certification gets you higher business opportunities, eventually resulting in
continual business improvement, improving year after year.
9. Better Integration of Process
Process integration is one of the main activities in a whole business model.
The process approach of ISO Certification is highly efficient in improving cost
savings. All efficiencies and errors can be eliminated to drive better process
integration in a business. The standard thus helps in better Process
Integration for any organisation.
10. Better Marketing opportunities
Well, the market is a significant term to describe as a whole. But certainly, it
runs on an organisation or business entity's credibility and reputation. ISO
certification culminates in a better set of marketing opportunities. It does
enhance the quality of products and services of the business. This catalyses
the growth of a good business reputation and brings more opportunities.
The Types of ISO Audits
There are three types of ISO audits: internal audits (first-party audits),
supplier audits (second-party audits), and external audits (third-party
audits). Your choice of audit type will alter depending on your compliance and
certification goals, scope, scale, and budget. Remember that ISO certification
can only be achieved by partnering with an external, third-party auditor with
the appropriate credentials to perform the audit.
While several ISO standards can be audited against, it is always important to
specify the scope and objective of an audit project. An audit designed to
evaluate an organisation’s quality system, QMS, and quality policies may not
be the best place to audit for other regulatory requirements. A well-planned
audit can significantly knock multiple birds out with one stone if controls
overlap. Don’t neglect to assess the compatibility of one standard with another
— it might save you and your organisation time, hours, and money to combine
compatible compliance efforts.
1. Internal Audits (First-Party Audits)
A designated auditor within your company can conduct an internal ISO
audit. If ISO compliance is your goal, an internal audit may be
satisfactory for ensuring your company adopts ISO standards as a
model for best practices. Use an internal audit checklist to see how your
organisation’s systems meet ISO guidelines. Internal audits are also
vital preparation for certification, surveillance, or recertification audits.
Like with all interior audit projects, an organisation should seek
management review over the audit's outcome, take corrective action
wherever possible and needed, and keep leadership abreast of
compliance efforts. In general, audit results can and should be
communicated to the appropriate stakeholders to encourage a culture
of continuous improvement — this applies to all audits, not simply
internal ones.
2. Supplier Audits (Second-Party Audits)
Supplier audits are undertaken by a purchasing company over
suppliers or supply-chain providers. These audits are critical in an
interconnected world where many businesses rely on others to provide
essential services, materials, and products. Risks from a supplier can
easily translate to risks for the purchasing company, especially if they
have a long-term relationship with the compromised or non-compliant
supplier. Many of the recent cybersecurity breaches of the near past
have resulted from compromises, not of the target organisation, but of
their suppliers. Performing supplier audits may be necessary for
attaining and maintaining ISO compliance and is a great best practice
for organisations that rely heavily on suppliers for day-to-day
operations.
3. External Audits
Third-party auditors conduct external audits to assess an
organisation’s ISO compliance. There are a few types of external audits
concerning ISO standards, which often require compliance by all supply
chain members. Certification and surveillance audits also fall under the
“external audit.”

.
 QUESTIONS

PART-I
1. Explain the concept of sampling inspection in Statistical Quality Control.
2. Define Statistical Quality Control (SQC) and its objective in manufacturing.
3. Name two essential components of quality objectives in risk assessment.
4. What is the significance of documentation in a firm's QMS?
5. Differentiate between 100% inspection and acceptance sampling in product
control
6. What are the two levels at which the designing and implementation of a quality
management system occur?
7. Briefly describe SPC as a technique within SQC.
8. How does Statistical Quality Control aid in decision-making for product quality?
9. What is the purpose of a monitoring process in a QMS?
10. Define Product Control and explain its purpose in quality management.

PART-II
1. Elaborate on the key elements constituting Statistical Quality Control.
2. Discuss the importance of continual improvement in business due to ISO
certification
3. Describe the steps in implementing a QMS in an organisation.
4. Discuss the requirements and principles of ISO 9000 in quality management.
5. Discuss the factors influencing the quality of manufacturing in detail
6. Explain how ISO certification ensures quality and international recognition for
an organisation.
7. Discuss how SQC aids in achieving and maintaining product quality in a
competitive market.
8. Explore types of inspection in quality control and their benefits.
9. Describe the techniques of Statistical Quality Control (SQC) and their
classification
10. Explain the significance of control charts in Statistical Quality Control.

PART-III
1. Discuss the role of data-driven decision-making in quality control, emphasising
its importance and impact on organisational performance.
2. Discuss the steps and considerations in designing and implementing a QMS
per ISQM1 and ISQM2 requirements.
3. Evaluate the impact of leadership and employee involvement in achieving
quality objectives as per ISO 9000.
4. Explore the significance of a well-planned audit in achieving ISO compliance.
5. Compare and contrast Statistical Process Control (SPC) and Product Control,
highlighting their applications and benefits in quality management
.
6. Analyse the role of SQC in modern manufacturing and service industries,
considering its elements and techniques.
7. Investigate the role of the monitoring process in maintaining and improving the
QMS, detailing its components and contribution to system effectiveness.
8. Analyze an organisation's benefits and challenges when implementing a QMS,
providing real-world examples and strategies to overcome potential hurdles.
9. Examine the impact of ISO certification on a company's reputation, market
opportunities, and customer satisfaction, emphasizing continual improvement and
credibility in the market.
10. Analyze factors influencing product quality and how companies can effectively
manage these factors to maintain high-quality standards and customer satisfaction
Unit 4: Customer Satisfaction and Quality & Quality in Supply Chain
Management
Understanding customer needs and expectations, Customer feedback
and its role in continuous improvement, Building customer-centric
quality strategies, Managing supplier relationships and supplier quality,
The role of quality management in supply chain optimization, Ensuring
quality consistency across the supply chain.

4.1 WHAT IS CUSTOMER SATISFACTION?

Customer satisfaction is defined as a measurement that determines how
happy customers are with a company’s products, services, and capabilities.
Customer satisfaction information, including surveys and ratings, can help a
company determine how to best improve or changes its products and services.
An organization’s main focus must be to satisfy its customers. This applies to
industrial firms, retail and wholesale businesses, government bodies, service
companies, nonprofit organizations, and every subgroup within an
organization.

Model of Customer Satisfaction

There are two important questions to ask when establishing customer
satisfaction:
1. Who are the customers?
2. What does it take to satisfy them?
WHO ARE THE CUSTOMERS?
Customers include anyone the organization supplies with products or
services. The table below illustrates some supplier-customer relationships.
Note: that many organizations are both customers and suppliers.
WHAT DOES IT TAKE TO SATISFY THE CUSTOMER?

Supplier-customer relationship examples

Supplier Customer Product or Service

Automobile Individual customers Cars

manufacturer

Automobile Car dealer Sales literature

manufacturer

Bank Checking account holders Secure check handling

High school Students and parents Education

Hospital Patients Healthcare

Hospital Insurance company Data on patients

Insurance company Hospital Payment for services

Steel cutting Punch press department Steel sheets

department

Punch press Spot weld department Shaped parts

department

All departments Payroll department Data on hours worked

Organizations should not assume they know what the customer wants.

Instead, it is important to understand the voice of the customer, using tools

such as customer surveys, focus groups, and polling. Using these tools,
organizations can gain detailed insights as to what their customers want and
better tailor their services or products to meet or exceed customer
expectations.
Customer Satisfaction Process Improvement
4.2 Why is customer satisfaction important?
Customer satisfaction is important because it means your customer base
likes what you are doing. Research shows that customer satisfaction leads to
greater customer retention, higher lifetime value and a stronger brand
reputation.
5 reasons customer satisfaction is important
• Customer loyalty
• Customer satisfaction measurement
• Repeat purchases
• Customer lifetime value
• New customer acquisition
4.3 Quality in Supply Chain Management
Supply Chain Management (SCM) is a holistic approach to managing
the entire supply chain from end to end in order to maximize customer value
and gain a competitive advantage. It involves coordinating and integrating all
activities within an organization, as well as collaborating with channel
partners, which can be suppliers, intermediaries, third-party service
providers, and customers.

The focus of SCM is on improved product/service delivery at lower cost while

maintaining high levels of quality and customer satisfaction. In other words,
it seeks to optimize resources across the different areas of the supply chain
including purchasing, inventory management, and logistics.
Importance of Quality in Supply Chain Management
The success of any business is largely dependent upon the quality of its
supply chain management. As such, it is important to ensure that each link
in the supply chain is managed properly and efficiently in order to achieve
optimal results. Quality control plays a vital role in this process, as it ensures
that products meet customer expectations and requirements.
Without adequate quality control procedures, businesses are likely to suffer
from increased costs due to defective or low-quality components entering their
system. Furthermore, poor quality processes can result in delays within the
supply chain which can ultimately cause customer dissatisfaction and
decreased profitability for companies.
Therefore, investing time and resources into a comprehensive quality
assurance program should be a priority for any organization looking to
optimize its entire supply chain operation.

Steps to Ensure Quality in Supply Chain Management

Establishing Quality Standards
The first step in quality assurance is setting up standards. These standards
should include a clear definition of the product or service that meets customer
needs and expectations. They should be documented and reviewed regularly
to ensure they are up-to-date and relevant to current market conditions.
Quality Control Measures: Once quality standards have been set, it’s
important to create processes for ensuring that those standards are met
throughout the supply chain.
This can include implementing procedures for inspecting products as soon as
they come into your facility, conducting routine audits of suppliers, or
instituting regular testing protocols at each stage of the production process.
Continuous Improvement: Quality assurance isn’t just about preventing
mistakes—it’s also about improving processes over time to increase efficiency
and reduce costs. To this end, companies should strive towards continuous
improvement initiatives such as Lean Manufacturing or Six Sigma
methodologies which emphasize waste reduction and streamlining operations
where possible.

Communication with Suppliers & Customers: In order to maintain high

levels of quality control, communication between all parties involved in the
supply chain must remain open and effective.
4.4 Selecting Suppliers and Vendors
One of the most important steps in quality management is selecting the right
suppliers and vendors. It’s essential that they have a solid reputation, a good
track record, and reliable quality assurance methods. This includes ensuring
that all their materials meet the required specifications and are free from any
defects or contaminants.
Additionally, it is important to vet their supply chain practices to ensure they
maintain ethical standards when it comes to labor rights and environmental
sustainability. Once you have selected your supplier or vendor partner(s),
establish a long-term relationship with them so there is mutual trust between
both parties.
Developing Quality Assurance Processes The next step in supply chain
management for quality assurance involves developing processes that ensure
product uniformity throughout the entire production process.
This includes evaluating raw materials prior to use, controlling production
operations through rigorous testing protocols before packaging and delivery,
as well as conducting regular audits of suppliers and vendors for accuracy in
compliance with industry regulations.
4.5 Implementing Quality Checks
Quality checks are essential for ensuring that all products and services from
the supply chain meet their intended standards. Quality assurance measures
should be taken at each stage of the supply chain process, beginning with
sourcing materials to ensure that they meet necessary specifications, through
production processes and delivery of goods to customers.
Organizations should establish quality objectives for their suppliers and
regularly monitor supplier performance in order to ensure compliance with
these requirements. Additionally, organizations can implement routine
auditing practices or conduct external reviews in order to measure supplier
performance against established criteria.
Organizations may also need to install quality control systems such as
Statistical Process Control (SPC) or Total Quality Management (TQM) systems
in order to track product defects throughout the supply chain process.
These systems enable companies to identify problems quickly so they can take
corrective action before goods become defective or non-compliant with
regulations governing safety or health concerns.

4.6 Ensuring Compliance with Regulatory Standards

The success of a supply chain management system depends on the ability to
adhere to regulations that are put in place by the government, industry, and
other organizations. Companies must make sure that all their suppliers,
vendors, and partners comply with these standards both domestically and
internationally if they want to provide quality service throughout the entire
process. Here are some steps companies can take to ensure compliance −
Stay informed: Make sure you keep up-to-date with any new or changing
regulations issued for your industry. Make sure you understand how the
changes may affect your business processes so you can remain compliant.
Develop strong relationships with suppliers or vendors: The better
relationship you have with your supplier or vendor, the easier it will be for
them to stay updated on changes in regulation as well as help ensure
compliance when needed. Keeping an open line of communication is
important here so issues can be prevented before they arise.
Establish internal policies and procedures: Create clear guidelines within
your organization regarding regulatory standards and protocols surrounding
supply chain management operations – this should include expectations from
employees working in related areas of the company such as purchasing,
logistics, etc.
4.7 Continuous Improvement of Quality Processes
The success of a business depends on its ability to identify and address
quality issues in the supply chain. Quality in the supply chain is an essential
element that ensures customers receive goods that are defect-free, safe,
reliable, and consistent.
To ensure quality, it is important for businesses to have a comprehensive
approach to managing their supply chain processes. Here are five steps
businesses can take to ensure quality throughout their supply chain
4.8 Why are customer needs important?
Anticipating customer needs will help you cater to customers before they feel
the need to put in a request for a new feature, product, or solution for you. If
companies can begin to make changes before their customers' needs aren't
fulfilled, this can ultimately lead to growth, innovation, and retention.
Creating a customer-centric company that truly listens to customer needs can
be daunting, and there's a steep learning curve if you haven't paid close
attention to customers before.
Common Types of Customer Needs
The types of product needs can be split into two categories: product and
service.
Product Needs
1. Functionality
Customers need your product or service to function the way they need
in order to solve their problem or desire.
2. Price
Customers have unique budgets with which they can purchase a
product or service.
3. Convenience
Your product or service needs to be a convenient solution to the
function your customers are trying to meet.
4. Experience
The experience using your product or service needs to be easy — or at
least clear — so as not to create more work for your customers.
5. Design
Along the lines of experience, the product or service needs a slick design
to make it relatively easy and intuitive to use.
6. Reliability
The product or service needs to reliably function as advertised every
time the customer wants to use it.
7. Performance
The product or service needs to perform correctly so the customer can
achieve their goals.
8. Efficiency
The product or service needs to be efficient for the customer by
streamlining an otherwise time-consuming process.
9. Compatibility
The product or service needs to be compatible with other products your
customer is already using.
10. Empathy
When your customers get in touch with customer service, they want
empathy and understanding from the people assisting them.
11. Fairness
From pricing to terms of service to contract length, customers expect
fairness from a company.
12. Transparency
Customers expect transparency from a company they're doing business
with. Service outages, pricing changes, and things breaking happen,
and customers deserve openness from the businesses they give money
to.
13. Control
 Customers need to feel like they're in control of the business interaction
from start to finish and beyond, and customer empowerment shouldn't
end with the sale. Make it easy for them to return products, change
subscriptions, adjust terms, etc.
14. Options
Customers need options when they're getting ready to make a purchase
from a company. Offer a variety of product, subscription, and payment
options to provide that freedom of choice.
15. Information
Customers need information, from the moment they start interacting
with your brand to days and months after making a purchase.
Businesses should invest in educational blog content, instructional
knowledge base content, and regular communication so customers
have the information they need to successfully use a product or service.
16. Accessibility
Customers need to be able to access your service and support teams.
This means providing multiple channels for customer service. We'll talk
a little more about these options later.

4.9 KEY DRIVERS BEHIND RISING CUSTOMER DEMANDS

1. Personalisation and Product Diversity
Offerings and products are expected to be tailored to each customer now more
than ever. With the rise of e-commerce, customers can customise their
purchases with ease, such as choosing the model, colour, size, and even
engraving. Across various industries, customisation is now a standard
expectation, prompting a need for dynamic and flexible supply chain
management.
2. Rapid Delivery
Prompt deliveries have become the new norm, especially with retailers
providing speedy, same-day delivery options. Customers expect their orders
within two days or less, and this expectation has created pressure on supply
chain management to accelerate its processes, plan efficient routes, and
reduce lead times.
3. Sustainability and Ethics
Customers are increasingly voicing concern over practices such as carbon
emissions, child labour, and animal cruelty in their supply chain. This shift
in consumer perception is creating a need for sustainable and ethical supply
chain practices.
4. Transparency and Real-Time Information
With the rise of the internet and social media, customers demand
transparency, accountability, and real-time information about their orders.
Consumers expect to receive updates on their order status, delivery timings,
and any issues or concerns. This expectation has driven many organisations
to develop digital initiatives to give customers real-time updates on their
orders.
5. Collaborative and Agile Supply Chains
To meet customer expectations, many organisations are seeking to adopt agile
and collaborative supply chain practices. This allows for increased flexibility
and responsiveness through open communication and collaboration with
suppliers and third-party logistics service providers.

4.10 STRATEGIES FOR MEETING EVOLVING CUSTOMER

EXPECTATIONS
1. Automation and Digitisation
As customer demands become increasingly complex and unpredictable,
organisations must leverage technology to meet them. Automating processes
such as order tracking, inventory management, and delivery scheduling can
help create transparency across the supply chain and enable companies to
respond quickly to changing customer needs. Digitising data acquisition into
a single, integrated platform can also help streamline logistics operations and
make it easier to manage customer expectations.
2. Forecasting and Predictive Analytics
Organisations must be proactive in their approach to forecasting customer
demand so they can prepare for rapid changes before they occur. Predictive
analytics tools can help supply chain managers anticipate customer needs
and develop strategies to meet them. This includes forecasting customer
demand, understanding the competitive landscape, and optimising inventory
levels.
3. Collaboration across Stakeholders
Collaboration across stakeholders is essential for meeting changing customer
demands in a timely manner. Companies must work closely with suppliers,
distributors, and third-party logistics service providers to ensure they’re able
to deliver on customer expectations. This collaboration enables more efficient
supply chain operations and improved performance.
4. Establishing Sustainability Practices
Organisations must also establish sustainable practices to meet consumer
expectations for transparency and ethical sourcing. This includes
environmental sustainability initiatives such as reducing carbon emissions,
waste, and energy use, as well as ethical sourcing practices such as fair
labour standards and animal welfare.
5. Developing a Customer-Centric Culture
Lastly, supply chain managers must create a customer-centric culture across
their organisation to ensure customer needs are at the heart of all decision-
making. This includes providing employees with the tools and training to
respond quickly and effectively to customer inquiries, as well as encouraging
a culture of continuous improvement.
4.11 What is customer feedback?
Customer feedback is the information, insights, issues, and input
shared by your community about their experiences with your company,
product, or services. This feedback guides improvements of the customer
experience and can empower positive change in any business — even (and
especially) when it’s negative.
Importance of customer feedback
Customer feedback is important because it serves as a guiding resource
for the growth of your company. Don’t you want to know what you’re getting
right — and wrong — as a business in the eyes of your customers?
Within the good and the bad, you can find gems that make it easier to
adjust and adapt the customer experience over time. In short, feedback is the
way to keep your community at the heart of everything you do.
Effective customer feedback methods
Before you begin collecting feedback from customers, you need to
pinpoint why you’re seeking their input. Identifying your desired outcomes
and outlining the process for getting there sets the groundwork for a
worthwhile investment of your time — and your customers’ time.

Without a clear intention, your feedback may not serve anyone.

Jot down the answers to these questions and talk about them with your team
before getting started:

• What part of the customer experience would you like to improve

(onboarding, content marketing)? Target the aspect of the customer
journey that would most benefit from customer insights.
• What’s your plan for the data you collect? There’s no reason to gather
customer feedback unless it leads to actionable change. Let’s say your
customer survey reveals that your product’s UI is confusing. Ensure
that you’re willing to invest in fixing it before collecting feedback.
• Which customer feedback channel works best for your goals?
• Don’t worry about that last question. By the end of this post, you’ll have
all the information you need to answer it.
1. Customer feedback surveys
Developing a useful customer survey may be more challenging than you think.
There are a ton of questions you could ask customers. The good news: you
can choose between short slider surveys (which help you target specific
issues) that pop up on your site or longer, traditional surveys.
If you want customers to follow through on completing a survey, make sure
you follow some simple best practices.

• Only ask questions that help you meet your goals.

• Write thoughtful open-ended questions.
• Create consistent rating scales.
• Avoid leading or loaded questions.
2. Email and customer contact forms
Email is one of the easiest ways to gather candid customer feedback. Because
it’s a support channel for most companies, you can use each interaction as
an opportunity to gather feedback. To maximize the likelihood of hearing back
from a customer, do these three things:
Set clear expectations
Sometimes, customers don’t offer important feedback because they
don’t think anyone cares. Is it any wonder most companies don’t hear
from unhappy customers? Many of those same customers may be
willing to leave feedback if they knew they’d hear back — and exactly
when to expect a response.

Consider adding a short sentence to your emails that tells people how
soon they can anticipate hearing back from you. “We’ll get back to
within X hours/days” will go a long way to set expectations and build
trust with your community.
Organize email feedback
At Help Scout, we use Trello to create “boards” your whole team can
access and contribute to with great customer feedback. It’s a clear
process ensuring that no helpful insights slip through the cracks.
Here's the system:
• Create boards within Trello titled “Product Ideas” (feature requests), “Up
Next” (what’s being worked on) and “Roadmap” (what you plan to work
on).
• Build individual cards within each board to categorize requests. For our
Product Ideas board, we use sections like “Inbox” (new ideas), “Rejected”
(discarded ideas), “Someday/Maybe” (good ideas, but not urgent), and
“Apps” (integration requests).
• Add email addresses within cards for the people who requested the idea.
For instance, anyone who asked us for Reports upgrades will be added
 to a list within a card so that they can be notified when the upgrade is
complete. Here’s an example card (with emails blocked out for privacy):

3. Usability tests
For usability testing to bring deep insights to your company, it requires more
upfront planning. With a clear strategy, though, you can uncover challenges
that customers don’t know they’re facing and actionable insights that make
their experiences better.
4. Exploratory customer interviews
Does direct outreach translate to beneficial feedback from customers?
Absolutely! Reaching out to customers directly opens up conversations that
otherwise wouldn’t happen.
Qualitative stories from customers bring color and nuance to quantitative
feedback (data). These personal experiences help a team understand the
feelings behind customer decisions and the community response to a
company’s brand or decisions.
When you conduct customer interviews, you create the opportunity to
challenge false assumptions that developed over time.
Keep the following tips in mind when you sit down to talk to customers:

• Start an open-ended dialogue. When you’re talking to customers,

open-ended questions are your best friend. These queries give your
customers the flexibility to dig into their experiences with more detail.
Plus, they’re less likely to be biased or leading questions.
• Get more specific as you go. Begin the conversation with wider
impressions and get more detailed in your questions as the dialogue
evolves. Every piece of feedback they give you is an opportunity for
another more specific follow-up.
• Practice active listening. To receive insights that can help your team,
you need to be open and receptive. Maintain eye contact and mirror
back the key takeaways you’re hearing from clients, always keeping the
spotlight on them.
5. Social media
Social listening can give you access to an otherwise untapped reservoir of
candid feedback from customers. Direct comments or mentions on social
networks aren’t the only way for your business to collect customer feedback
either — many networks include built-in polling tools. Look at this quick poll
on Instagram:
6. On-site activity (via analytics)
Analytics reveal what customers don’t know about how they use your product.
Especially if you sell a digital product or service, you benefit from leveraging
analytics to understand how users interact with your company.
7. Instant feedback from your website
With an embeddable on-site widget like Beacon, you can collect instant
customer feedback without asking the customer any questions.
At Help Scout, for example, we pulled nine articles into a webpage that could
be valuable to potential customers on the page. Instead of asking customers
which articles they preferred, Beacon collected the data on the most popular
articles. If none of the articles helped, the customer could email the team —
and that’s valuable information, too.
Collecting customer feedback is crucial
Customers can transform every aspect of your company for the better if you
listen to their feedback. Think about your most pressing goals and start with
one clear, simple method for collecting customer feedback before expanding
out to more complex tactics like usability testing and analytics.
Customer support channels are the ideal place to begin — your support team
brings more value when they approach every interaction as an opportunity to
collect quantitative and qualitative feedback on real experiences with your
company
4.12 Steps to Building a Customer-Centric Strategy
Companies are continually trying to find new ways to become more customer-
centric, and the results speak for themselves. Research from Deloitte and
Touche shows that customer-centric companies are up to 60% more profitable
than competitors. Creating a genuinely customer-centric culture is no easy
task and requires building a comprehensive strategy with buy-in from every
department and team.
The goal of a customer-centric strategy should be to prioritize the customer
experience. It goes beyond any individual interaction and must include the
entire scope of a customer’s journey with your brand. A well-designed
customer-centric strategy will review the necessary steps before, during, and
after a product or service is purchased. Developing a customer-centric culture
is the best way to make your changes permanent.
1. Regularly Collect Customer Feedback
Listening to customer feedback can help your team members and your
company as a whole better understand your customers' needs and how
they change over time. You can start by creating engaging surveys to
share after important interactions. The possibilities are nearly endless,
and you can ask a wide range of questions to help you define what
customer-centric means for your particular audience.
2. Hire Employees with the Right Mindset
A customer-centric team should understand how to put customer needs
first and embody the behaviors that genuinely help customers. During
your interview process, try to ask at least one question that enables you
to understand the candidate's customer orientation. Some people seem
to have a customer-centric and service-oriented mindset built into how
they think. Others lack essential soft skills, like empathy and patience,
that are necessary for a customer-centric culture.
3. Use Customer Data Effectively
Making data-based decisions rooted in facts and not opinions can
drastically improve your chances of success on your customer-centric
journey. A good rule-of-thumb is to focus on collecting better data,
rather than merely striving to collect as much data as possible.
Many customer service, support, and experience metrics are difficult to
measure and can overlap in many respects. Therefore, it's helpful to
focus on the metrics and data that represent customer behaviors and
provide a clear picture of your ability to fulfill customer needs. One final
point is to distribute your data widely among the organization so that
everyone can share in the vision as well as celebrate the progress.
4. Invest in Ongoing Customer Service Training
Training customer service resources in a customer-centric company
should involve a lot of focus on the concept of empathy. When your
service agents can empathize with the customer’s position, they will
genuinely want to make the situation better. A training program that
reinforces complementary skills like active listening and how to ask
thoughtful questions can make a huge difference in customer
satisfaction.
5. Develop Products Based on Customer Needs
When developing your products or services, one way to become more
customer-centric is to supplement your development data with an
understanding of the Voice of the Customer (VOC). Customers may not
always state what they want clearly and concisely, but they can share
insights that will help you design better products and services.
Try to engage with customers early in your product development
process to hear their thoughts about design concepts and product
features. Doing so can often help avoid creating unpopular features and
allow you to collect new ideas that your team had not considered. A
customer-centric strategy that enables customers to play an active role
in the product creation process is likely to have a more robust pipeline
of offerings.
6. Optimize Your Marketing Strategy
Similar to your product development strategy, your marketing efforts
should also focus on customer needs. A marketing team should use
 data, industry knowledge, and a deep understanding of the customer
to set the right priorities. With a better sense of customer needs and
behaviors, there are many ways to optimize a marketing strategy.
One of the most significant risks for marketing and sales efforts is that
you will spend time and resources sharing a message with an audience
that doesn’t care or misses your point. A customer-centric company
seeks to understand the real needs of customers and their motivations
right upfront.
7. Reward Loyal Customers and Employees
It is always important to remind yourself that employees are really at
the center of any customer-centric culture. Indeed, it's a best practice
to have a loyalty program to reward your best customers, but you
should also consider how you recognize your staff. Create some rewards
that reinforce the desired behaviors and reinforce the idea that
customer needs come first.
When employees go above and beyond to make a customer happy, take
the opportunity to recognize their excellent performance. Offering
incentives such as bonuses and sharing employees' success with the
rest of the team or the company at large are excellent ways to reward
your team members' hard work. Don't forget to reward behind-the-
scenes team members for making an impact in addition to those in
customer-facing positions.
Building an effective customer-centric strategy will require input from
customers, employees, and management at all levels. As you can see, you can
take several proven steps to strengthen relationships, collect better data, and
make more informed decisions that benefit your customers. If done well, these
efforts could lead to increased sales and a more engaging customer
experience.
4.13 What is Supplier Relationship Management?
Supplier relationship management (SRM) deals with and manages third-party
suppliers who supply your company with goods, materials, and services. To
optimize the value of the business relationship, you choose suppliers who are
both cost-effective and easy to work with.
It’s far more intricate than that, as with most current corporate procedures.
Because of technological advancements and the global scope of the economy,
supplier management has seen a significant transformation in recent years.
It’s challenging to find the best supplier when you have so many options, but
applying innovative ideas to streamline your supplier management system
might assist a lot.
Who is a Supplier?
A supplier is a company that provides goods or services to another company.
The term is most commonly used in the business world, where businesses
purchase raw materials or finished products from other businesses. A
supplier can also be an individual, such as a freelance writer or graphic
designer, who provides services or products to another individual or business.
The term supplier is often used interchangeably with the vendor in the
business world.
However, there is a distinction between the two terms. A vendor is a company
that sells goods or services to another company without providing any
additional services, such as installation or customer support. On the other
hand, a supplier not only provides goods or services to another company but
may also be involved in the manufacturing process or provide additional
services, such as installation or customer support.
Why is Supplier Relationship Management so Important?
The importance of the supplier side is equal to that of the consumer side. At
its most basic level, a company needs suppliers to provide resources for the
products or services it sells and resources to manage the company.
Supplier relationship management
The main benefit of having good, healthy supplier relationships is getting more
value from your company. The better you know your suppliers and they know
you, the more likely you will receive personalized service, discounted prices,
and special conditions. Your supply chain will become more efficient, cost-
effective, and productive due to this.
Supplier relationship management (SRM) is the proactive management of
supplier relationships to improve quality, cost, delivery, and innovation
performance. SRM goes beyond traditional procurement activities and
includes supplier selection, supplier development, and supplier performance
management. A successful SRM program requires a close partnership
between the purchasing organization and its suppliers. The goal of SRM is to
create a relationship in which both parties work together to improve the
other’s performance. This partnership requires trust and mutual respect.
4.14 Impact of Supplier Relationship Management
SRM can have a significant impact on an organization’s bottom line. For
example, SRM can help to reduce the cost of goods and services, improve
quality, and increase innovation. In addition, SRM can help build and
maintain relationships with strategic suppliers. These relationships can
provide an organization with a competitive advantage. There are many
benefits of SRM, but it is essential to remember that SRM is a long-term
investment. SRM requires time, effort, and resources. It is essential to
carefully consider whether SRM is the right decision for your organization.
Thinking about procurement other than the technicalities of buy agreements
and contracts is necessary for building solid relationships with suppliers. The
emphasis on how you engage with suppliers differs from supply chain
management’s logistical focus.
It’s rarely as simple as signing a contract and sitting back while a procedure
takes care of itself. People management and the added value that human
aspects of the business may provide to operations are at the heart of supplier
management. Keeping this side of things going well helps guarantee that the
two sides work fast to handle concerns, search for ways to improve operations,
and assist each other in reaping the benefits of the partnership.
Following are some of the ways to layout a good foundation for building better
relationships with suppliers:

• Good communication
• Mutual respect
• Openness
• Fairness
• Trust
• Flexibility
Benefits of Supplier Relationship Management
1. Improved quality of goods and services
SRM can help to improve the quality of goods and services by establishing
and maintaining relationships with high-performing suppliers. This can lead
to improved communication and collaboration, which can, in turn, lead to
better quality products and services.
2. Reduced costs
SRM can help reduce costs by negotiating better prices with suppliers and
improving efficiencies in the supply chain.
3. Improved supplier performance
SRM can help to improve supplier performance by setting clear expectations
and providing feedback on supplier performance. This can lead to improved
communication and collaboration, which can, in turn, lead to better quality
products and services.
4. Greater transparency and visibility
SRM can help to improve transparency and visibility into the supply chain by
providing visibility into supplier performance and establishing clear
communication channels.
5. Improved communication and collaboration
SRM can help improve communication and collaboration between a company
and its suppliers, leading to improved quality products and services.
6. Greater innovation
SRM can help drive innovation by establishing relationships with creative and
innovative suppliers. This can lead to new products and services that can help
a company gain a competitive advantage.
7. Increased customer satisfaction
SRM can help to increase customer satisfaction by ensuring that customers
receive the products and services they need when they need them.
8. Improved risk management
SRM can help improve risk management by identifying and mitigating risks
in the supply chain. This can lead to improved quality products and services.
9. Greater agility
SRM can help to improve agility by establishing relationships with suppliers
that are flexible and responsive to change. This can lead to improved quality
products and services.
10. Improved business continuity
SRM can help improve business continuity by establishing reliable
relationships with reliable suppliers and having a good track record. This can
lead to improved quality products and services.
What is Supply Chain Optimization?
Supply chain optimization is the adjustment of a supply chain’s
operations to ensure it is at its peak of efficiency. Such optimization is based
on certain key performance indicators that include overall operating expenses
and returns on the company’s inventory. The aim is to provide customers with
the products at the lowest total cost possible while retaining the highest profit
margins. To achieve these goals, managers have to balance costs incurred in
manufacturing, inventory management, transportation, and fulfillment of
customer expectations.
Considering how complex supply chain optimization is, it’s best to
tackle this business process as a long-term activity. What works is a blend of
cost and service changes over time that take into account variations in
resource costs, carrier changes, customer demographics, and other factors
that require constant examination.
Process of Supply Chain Optimization
The supply chain optimization process begins with a systematic and in-
depth analysis based on forecast demand. This step is followed by creating a
production and inventory plan based on the existing forecast. The entire
exercise considers incoming raw materials or elements, the manufacturing
process, transportation, and distribution. During this step, organizations
should also examine every possibility for better e-commerce integration via
omnichannel strategies.
There are three phases to a successful supply chain optimization
process:
1. Design
This phase focuses on network design processes such as the location of
warehouse facilities, the flow of products to and from suppliers and
customers, and all the strategic objectives of manufacturing operations,
including demand forecasting, supply establishment, planning, and
scheduling.
2. Planning
This phase focuses on creating a strategic deployment, planning inventory,
and coordinating assets to optimize the delivery of products, services, and
information that flow from suppliers to customers. The purpose of this phase
is to balance supply and demand.
3. Execution
This phase addresses all execution-based applications and systems such as
warehouse and inventory management, management of transportation
facilities and efficiency, and international trade management. It also
investigates execution-based applications that play a support role in the
supply chain process, including real-time decision-based support systems,
supply chain visibility, and order placement management systems.
A supply chain network is a dynamic ecosystem. As it grows, so does the risk
and uncertainty associated with activities across the supply chain. The factors
that affect performance may be internal or external; they could be
competition-driven or environmental. Considering the wide range of factors,
numerous supply chain models have arisen. The model an organization
chooses is based on specific supply chain optimization issues that are
business-specific.
There are a number of components that commonly make up an organization’s
supply chain optimization model:

• Inventory
• Receipt of product and their storage
• Processing orders
• Despatching and distribution
• Customer support and service systems
When placed together, these elements allow a business to tackle most supply
chain optimization issues and create a well-rounded, seamless operation,
ensuring work with all trade partners goes smoothly.

Benefits of Supply Chain Optimization

There are many benefits a business can expect from quality supply chain
optimization software:
Cost Reductions
With supply chain optimization, many unnecessary costs can be
eliminated, streamlining expenses of business operations. All repetitive
or ineffective processes can also be eliminated or automated as needed.
The focus can be moved to meeting customer needs with timely,
accurate deliveries. With supply chain cost optimization, a company
can have a lower inventory which helps free funds prevent stock from
becoming obsolete. Additionally, supply chain infrastructure expenses
can be better managed by optimizing delivery processes, logistics, and
warehousing capabilities.
Increased Revenues and Profits
With supply chain optimization tools, managers can get an insight into
all activities and work on speeding up supply chain processes. The
customer is likely to be more invested in the process and can have a
better experience. Orders are accurately delivered, on time, and the
company becomes more responsive to customer requirements. The
result is a reduced investment-to-return-on-investment cycle and quick
settlement of invoices, which supports customer loyalty.
Better Supplier Performance
Digitizing the supply chain enables access to real-time insights into the
supply chain. Suppliers’ performance can be evaluated, which paves
the way for improved performance where needed and rewards it, too,
where appropriate. It lays the foundation for a system of continuous
supplier performance improvement that’s essential to strategic sourcing
decisions.
Enhanced Supply Chain Collaboration
The organizational ecosystem comprises suppliers, partners, vendors,
and all the interfaces connected to them. Bringing these entities
together in a single supply chain optimization solution enables better
collaboration and innovation.
Every stakeholder can access updated information, and as an
integrated team, they can make smarter business decisions, supporting
better supply chain continuity and avoiding risks.
Integrated Supply Chain Management
With supply chain optimization software, you can integrate and manage
all supply chain capabilities from a single point. Companies can gather
insights on a host of elements that are part of the supply chain system–
from its visibility to sales forecasting, management of cash flow,
customer loyalty, timely delivery, and credit control. Such end-to-end
 visibility of the whole supply chain system allows for transparent
operations.
Better Quality
Managing quality in a supply chain involves an end-to-end production
system from procuring raw materials to product delivery. Supply chain
optimization techniques help organizations bring in quality at each
stage, allowing for improved efficiency and waste reduction. These
techniques also provide a foundation to support supply chain planning
optimization, ensuring the process follows established quality
standards at every stage.

Supply Chain Optimization Techniques

There are several techniques to optimize the supply chain:
Cost Optimization
Cost optimization involves a mix of short-term operational refinement
and longer-term transformative changes. Every cost segment in the
supply chain system is investigated to see where a reduction or saving
may be possible. Costs can be related to orders and their payments,
storage of raw material or products, transportation, and waste.
Inventory Optimization
Inventory optimization helps organizations gauge the ideal inventory
level they need to maintain to ensure customer satisfaction, and where,
along the supply chain, inventory optimization should happen. It uses
advanced algorithms to examine and quantify the causes behind
demand-supply uncertainties. This evaluation occurs across a multi-
level supply chain and offers possible solutions. With supply chain
inventory optimization methods, a company determines the least
quantity of inventory needed across the whole supply chain network.
Network Optimization
To stay a step ahead of the competition and to ensure operations are at
the highest possible profitability, companies must constantly examine
how their supply chains will handle any change they may undergo. With
network optimization, companies can compare their current supply
chain systems to a range of possible scenarios and ascertain how they
will react. Based on this, organizations can set strategic plans and
goals, and on-board the right suppliers to achieve these goals. The
outcome of supply chain network optimization is that an organization
should be able to execute supply chain strategies at reduced cost and
risk.
4.15 Ensuring quality consistency
Ensuring quality consistency across the supply chain is crucial for businesses
to maintain customer satisfaction, brand reputation, and operational
efficiency. Here are several key strategies to achieve quality consistency:
1. Supplier Selection and Qualification: Choose suppliers who meet
strict quality standards and have a history of delivering consistent
quality. Conduct regular supplier audits and evaluations to ensure they
continue to meet your quality requirements.
2. Clear Quality Standards: Clearly define quality standards and
specifications for all products or components sourced from suppliers.
Make sure both you and your suppliers have a shared understanding
of these standards.
3. Supplier Training: Provide training and resources to suppliers to help
them meet your quality expectations. This may include technical
training, process improvement guidance, or access to quality
management tools.
4. Quality Agreements: Establish formal quality agreements or contracts
with suppliers that outline quality expectations, inspection processes,
and consequences for non-compliance.
5. Quality Control and Inspection: Implement quality control processes
at various points along the supply chain. This may involve incoming
inspections of raw materials, in-process inspections during production,
and outgoing inspections before products leave your facility.
6. Technology and Automation: Utilize technology such as sensors, IoT
devices, and quality management software to monitor and control
quality in real-time. Automation can help reduce human error and
enhance consistency.
7. Data Analytics: Collect and analyze data related to quality
performance. Use data insights to identify trends, potential issues, and
areas for improvement within the supply chain.
8. Continuous Improvement: Implement a culture of continuous
improvement within your organization and among your suppliers.
Regularly review and refine processes to eliminate defects and enhance
quality.
9. Collaboration and Communication: Foster open communication with
suppliers. Encourage them to report quality issues promptly, and be
responsive to their feedback and concerns. Collaboration can help
address issues more effectively.
10. Quality Audits: Conduct regular quality audits of your supply
chain. These audits should not only focus on product quality but also
on the quality management systems in place at both your facility and
your suppliers' facilities.
 11. Traceability: Implement traceability systems that allow you to
track products and components throughout the supply chain. This can
help you quickly identify and isolate quality issues when they arise.
12. Risk Management: Identify potential risks to quality within the
supply chain and develop mitigation plans. This could include
contingency plans for sourcing from alternate suppliers in case of
quality issues.
13. Supplier Feedback and Incentives: Provide feedback to
suppliers about their performance and offer incentives for meeting or
exceeding quality standards. Recognizing and rewarding good
performance can motivate suppliers to maintain consistency.
14. Customer Feedback: Solicit and incorporate customer feedback
into your quality improvement efforts. Customers can provide valuable
insights into the quality of your products and services.
15. Regulatory Compliance: Ensure that your supply chain
processes comply with relevant industry regulations and standards.
Non-compliance can result in quality issues and legal repercussions.
By implementing these strategies and maintaining a strong commitment to
quality throughout your supply chain, you can enhance consistency and build
a reputation for delivering high-quality products and services to your
customers.
 QUESTIONS

PART-I
1. How is customer satisfaction defined?
2. What tools aid understanding the voice of the customer?
3. List benefits of Supplier Relationship Management?
4. State five reasons for customer satisfaction's importance?
5. Name three key supply chain optimization phases.
6. What's the focus of SCM?
7. Why is quality control crucial in the supply chain?
8. What are the steps to ensure quality in supply chain management?
9. What is the Significance of communication in supply chain quality control
10. What are the considerations when selecting suppliers and vendors for quality
management?

PART-II

1. How can businesses anticipate and meet customer needs proactively?

2. What are the key drivers behind the rising demands of customers?
3 How can companies optimize their marketing strategy to align with customer
needs?
4. What is the primary goal of a customer-centric strategy, and why is it important?
5. Why is it crucial to invest in ongoing customer service training for a customer-
centric company.
6. Discuss the significance of data analytics and continuous improvement in
ensuring quality consistency in the supply chain.
7. Discuss the key components of an organization's supply chain optimization
model and their significance.
8. How does Supply Chain Optimization contribute to cost reduction and
increased revenues for a business?
9. Explain the techniques involved in Supply Chain Optimization, focusing on
inventory and network optimization.
10. Strategies to meet evolving customer expectations in the supply chain?

PART-III

1. How can businesses utilize customer feedback to enhance offerings and overall
customer experience?
2. Discuss techniques in Supply Chain Optimization, focusing on cost, inventory,
and network optimization, and their impact on efficiency.
3. Describe strategies to ensure quality consistency in the supply chain, covering
steps, technologies, and collaboration?
4. What strategies help businesses meet evolving customer expectations in the
supply chain?
5. Discuss the significance of supply chain traceability and risk management in
maintaining quality consistency.
6. Discuss the impact of strong relationships with suppliers on supply chain
efficiency and effectiveness.
7. Describe the process of Supply Chain Optimization, highlighting its phases and
how they contribute to overall efficiency.
8. How does Supplier Relationship Management (SRM) affect a company's
operations and profitability?
9. Discuss the significance of supply chain traceability and risk management in
maintaining quality consistency.
10. What key principles and strategies foster a customer-centric culture within
organizations?.
Unit 5
Leadership and Quality Culture, Ethics and Social Responsibility in
Quality Management
Leadership's role in promoting a culture of quality, Empowering employees
for quality improvement initiatives, Leading change for quality enhancement,
Ethical considerations in quality assurance and product safety, Quality's
impact on consumer rights and satisfaction, Sustainable and socially
responsible quality practices.

How Does Leadership Play a Role in Quality Management?

Effective leadership is critical to the success of a company's quality

management. A good leader can inspire employees to prioritise quality and
continuous improvement, resulting in improved overall performance and
outperformance of the competition.

Leaders are also critical in fostering a quality culture within the organisation
by establishing clear quality goals, allocating resources for quality
improvement initiatives, and rewarding employees for their contributions. The
impact of leadership style on quality management outcomes, on the other
hand, varies, with more collaborative leaders achieving better results.

In order to provide high-quality customer service, which can lead to increased

customer satisfaction and overall success, effective leadership is also
required. Building a strong quality and management team requires strong
leadership that inspires and motivates, communicates effectively, delegate
tasks, and collaborates.

The Importance of Leadership in Quality Management

Leadership is crucial in quality management. A good leader encourages and

drives employees towards quality and improvement, while a poor one
discourages and stymies effort.

Companies with strong management are 13 times more likely to outperform

their rivals in quality, according to research published in Forbes. This
demonstrates why effective leadership is crucial for quality management. A
leader who places a premium on quality and leads by example can help shape
a winning culture and propel an organisation forward.

How Leaders Foster a Culture of Quality in Organizations

Organizational leaders play a pivotal role in developing a high-standards

culture. They establish a culture where quality is valued and prioritized,
setting an example for the rest of the company to follow. When leaders put an
emphasis on quality, productivity rises.

One statistic highlighting the role of leadership in quality management

indicates that organisations with strong leaders are three times more likely to
have high-quality organisational cultures than those with weak leaders
(McKinsey & Company). This shows how crucial leadership is to create a high-
quality work environment for employees.

Leaders can help cultivate a quality mindset by modeling it themselves and

repeatedly stressing the significance of quality. This can be aided by
establishing well-defined quality objectives, allocating sufficient resources to
quality improvement efforts, and rewarding staff members for their
participation in such efforts.
The Role of Leadership in Driving Continuous Improvement in Quality
Management

Leadership is crucial for the continuous improvement of quality management.

Leaders who succeed in setting a standard of excellence for their
organisations inspire their teams to do the same. Strong leadership increases
an organisation's likelihood of meeting its quality objectives by a factor of four,
according to research by the American Society for Quality.

Therefore, it is imperative that leaders take part in quality management

processes, provide assistance to staff members implementing quality
improvement initiatives, and foster a culture of continuous improvement. This
has the potential to boost product quality, customer satisfaction, and the
bottom line.

The Impact of Leadership Style on Quality Management Outcomes

The manner in which a leader leads their team can have an impact on the
quality management outcomes. Quality management is concerned with
ensuring that the products or services offered by a company are of high
quality.

There are various leadership styles, and each has a unique impact on quality
management. For example, a leader who is extremely strict and expects
everyone to strictly follow the rules may create a stressful and uncomfortable
work environment for employees. A leader who is more relaxed and
encourages creativity, on the other hand, may have a more motivated and
engaged team.

According to an American Society for Quality study, 73% of companies with a

more collaborative leadership style also had better quality management
outcomes. This implies that leaders who collaborate closely with their teams
and involve them in decision-making are more likely to achieve high-quality
management outcomes.

The Connection between Effective Leadership and Quality Customer

Service

A leader's management style can have a significant effect on the quality of

service provided to customers. High-quality customer service is impossible
without strong leadership.
Research shows that customer satisfaction is higher at companies with strong
leadership. One study found that companies with high employee engagement
(often the result of good leadership) saw a 10% increase in customer
satisfaction compared to those with low employee engagement.

Therefore, leaders must prioritise team member involvement and customer

happiness to succeed at quality management.

Building a Strong Quality

Building a strong quality means ensuring that the products or services you
provide are of high quality and meet your customers' needs. To accomplish
this, leaders must instill a quality culture throughout the organisation.
Setting clear quality standards, training employees to meet those standards,
and continuously monitoring and improving processes are all part of this.

According to a McKinsey study, companies that prioritise quality management

outperform their peers in terms of profitability by up to 6%. This demonstrates
that investing in quality management can have a significant impact on a
company's success.

Management Team through Effective Leadership

The efficiency and effectiveness of a business rely heavily on the efforts of its
management team. It takes strong leadership to assemble a competent
management team that can steer the organisation to success.

The management group is responsible for shaping the organisation's

principles, priorities, and goals. They need to make sure that everyone in the
company is working towards the same goals and that they have the means to
do so.

Building a solid management team requires decisive direction from the top.
The best leaders inspire and motivate their teams to work together to achieve
their objectives. They should have excellent communication skills, be able to
delegate tasks efficiently, and offer appropriate direction and assistance. A
good leader is also someone who can assess their team members' abilities and
work with them to improve their areas of weakness.

Effective management requires a cohesive group of individuals. The success

of any team depends on the members' ability to work together and
communicate clearly and effectively. They need to be able to make the tough
calls that are best for the organization, no matter how unpopular they may be
at the time.

CONCEPT AND THEORY OF EMPLOYEE EMPOWERMENT

Meaning
Empowerment is the process of enabling or authorizing an individual to think,
behave, act, and control work and decision-making in autonomous ways.
Definition
• According to Richard Kath Nelson, ’Empowerment is the process coming to
feel and behave as if one is in power and to feel as if they owned the firm.’
• According to Bowen and Lawler, ’Employee empowerment refers to the
management strategies for sharing decision-making power.’
Concept
Empowerment is the ongoing process of providing the tools, infrastructure,
training, resources, encouragement and motivation your workers need to
perform at the optimum level. If you focus on employee empowerment, it will
speed up processes with quality production and services. An employee feels
much more control in their work life since authority is given to an individual
to make decisions. There is hidden potential among employees, which can be
revealed through empowerment.
Theoretical Approaches to Empowerment
Study of empowerment can be done in three theoretical approaches:
The Socio-structural perspective concentrates on redesigning or advancing
organizational policies, practices, and structures to provide power, authority,
and influence over their work to employees.
The Psychological approach concentrates on empowering employee
effectiveness by developing their competence and self-determination
The Critical perspective challenges the concept of employee empowerment
and argues that empowerment leads to less precise control over employees.
Principle of Employee Empowerment
The principle of employee empowerment applicable to management allowing
employees to make decisions that affect their jobs rather than having to clear
everything with managers. Two of the key elements of employee empowerment
are efficient hiring system and constant training.
MANAGEMENT’S ROLE IN EMPOWERMENT
Everything management does to promote empowerment should have the goal
of establishing a creative, open, non-threatening environment in which
involved, motivated, dedicated employees can flourish. The three words that
perfectly describe management’s role in empowerment are commitment,
leadership, and facilitation. The manager’s role in empowerment consists of
exhibiting a supportive attitude, being a role model, being a mentor, being a
trainer, being a facilitator, practicing management by walking around, taking
quick action on recommendations, and recognizing the accomplishments of
employees.
Brainstorming
Employees are motivated to share their views and ideas. All ideas suggested
are recorded then after evaluation process begins. They are asked to go
through the list, assessing the relative merits of each. The process is repeated
until the group narrows the choices to a specified number.
Quality Circles
A quality circle is a group of employees that assembles regularly and make
group decisions regarding improvements of the organization. The main
difference between quality circles and brainstorming is that quality circle
members are volunteers who summon themselves and conduct their own
meetings. Quality circles assemble regularly before, during, or after a shift to
discuss their work, predict problems, propose workplace improvements, set
goals, and make plans.
Walking and Talking MBWA (Management by Walking Around):
Simply walking around the workplace and talking with employees can be an
effective way to solicit input. An effective way to prompt employee input is to
ask the right questions and to use open-ended questions.
Following are a few things leaders can do to build an environment that
empowers people.
1) Give power to those who have demonstrated the capacity to handle the
responsibility.
2) Create a favorable environment in which people are encouraged to grow
their skills.
3) Don’t second-guess others’ decisions and ideas unless it’s necessary. This
only undermines their confidence and keeps them from sharing future ideas
with you.
4) Give people discretion and autonomy over their tasks and resources
Empowerment has become necessary due to the following reasons
Empowerment of employees helps an organization to assign different projects
to hone the competence of employees.
Motivation
A work team can avoid the inspection of the organization if it continually
performs above the organization expectations, and without disturbance. To
do that, the group develops ways to motivate itself and develops methods for
staying efficient.
For example, team members will often take it upon themselves to remind the
rest of the group of the benefits of high productivity, including pay raises and
management recognition. An empowered group will cross-train each and
every member of their group to do the basics of each other’s jobs. Thus, the
team can still be productive even a team member is ever out.
Creativity
When an employee feels a sense of accomplishment and feels valued, he is
more likely to get attached in critical and creative thinking. He will feel more
capable and inspired to deal situations in unconventional ways, which can
lead to better production. Empowering an employee make himself to think
and take the initiative and may find unique ways to add worth to the
organization and revise processes or policies that no longer are efficient. This
removes some of the pressure on management to stay innovate and stay
ahead of the industry
Job Satisfaction
Empowerment provides the employee with a sense of autonomy, which will
increase one’s job satisfaction. They will be more comfortable at work because
it enhances confidence. A happy employee provides the best customer service,
and that results in leaving a good impact on an organization.
Decision-Making
Rapid growth in technology provides customers in finding information about
products and services in increasingly diverse ways; employees need to make
quick and apt decisions that benefit your organization. And decision making
should be taken in a quicker manner to find new ways to meet customer
demands. Independent decision-making can enhance self-confidence among
the employees.
Loyalty
An employee exhibits loyalty if supported, respected, listened to and valued.
He is more likely to work hard and promote the organization when the
opportunity arises.
Cost Savings
Employees who perform their tasks on a regular basis have an intimate
understanding of how their jobs are done. According to Chapter 18 of “The
Reinventor’s Field book” titled “Employee Empowerment,” by empowering
employees to determine their work methods, organizations can benefit from
the years of experience each employee has. By allowing employees to suggest
and make procedural changes that make their jobs more efficient,
organizations benefit by saving money.
Morale
Employees who are empowered in their jobs have a greater responsibility.
Putting employees in charge of their results will boost up the morale of the
employees. Empowered employees know that their ideas matter to the success
of the organization, so they tend to take a greater interest in creating a more
efficient and profitable organization. This all has a positive effect on the
organization bottom line.
Management-Employee Relationship
Employee empowerment can help to strengthen the bond between managers
and employees, according to the article titled “Employee Empowerment:
Management Giving Power to the People” published on the Thinking Managers
website. Managers are coaches with an utmost interest in the success of their
employees in contrast with those that dictate policy and give commands.
Managers and employees learn to depend on one another for getting things
done.
Direct Accountability
Empowered employees are accountable for their jobs as they make their own
decisions. This is advantageous for organizations because instead of
harnessing managers with the responsibility for all decisions, employees
handle some of the decision-making slack. Thus, it would be easy to identify
the exact sources of consequences. Organizations can offer training to specific
employees to improve themselves as opposed to spending time and money on
training entire departments.
Job Duties
The experienced employee has the ability to do a job in a most effective way.
The organization can benefit from allowing experienced employees to alter job
duties that make the organization more productive. For example, an employee
may notice that the basic maintenance on a particular machine once a week,
as opposed to once a month, enhances the output of that machine and
extends the life time of equipment. The employee then consults the
management and alters the job duties of his position to include weekly
maintenance on the machine instead of monthly. Empowered employees help
to evolve job descriptions to make them more relevant to upcoming employees
and the organization’s success.
Team Structure
Empowered employee groups are encouraged to create their own structure so
that they can feel comfortable in the way it works and increase its
productivity. The manager observes the team performance but only interferes
if necessary. Thus, created structure on its own dictates how the team
processes information and how the team efficiently executes its duties.

MEASURING EMPOWERMENT
After all, there is a need to measure how well employees are empowered.
Regarding this point, Employee Empowerment Inventory (EEI) has been
developed. It is an “inventory” rather than a survey as it is trying to measure
the current state of everyone in the organization.
The inventory is usually scheduled to be issued every six months so that an
organization can track its progress.
The general form of the inventory is as follows:
• Does the employee feel empowered by their direct supervisor?
• Which of the five components, if any, is the major barrier to their
empowerment?
• Does the employee have the knowledge necessary to accomplish the job
• What is the most important barrier to attaining the knowledge necessary to
accomplish the job?
• Does the employee have the tools necessary to accomplish the job?
• What is the most important barrier to attaining the tools necessary to
accomplish the job?
• Does the employee understand the responsibilities necessary to accomplish
the job?
• What is the most important barrier to attaining an understanding of the
responsibilities necessary to accomplish the job?
• Does the employee and others around them have the accountability
necessary to accomplish the job?
• What is the most important barrier to attaining the accountability necessary
to accomplish the job?
• Does the employee have the authority necessary to accomplish the job?
• What is the most important barrier to attaining the authority necessary to
accomplish the job?
• Beyond the control of the direct supervisor, is the employee empowered?
• Beyond the control of the direct supervisor, what barriers exist to being
empowered?
• (Optional) What percent of the employee’s time is spent in crises or
unplanned activities that are not part of their job?
• (Optional) What percent of the employee’s time do they spend in meetings
that are a waste of their time?
Empowerment in Strategic Planning
Sometimes empowerment will be addressed in the strategic plan. This implies
that the difference between where you are and where you want to be will
require special activities outside the usual day-to-day work. In the strategic
planning process, empowerment has a unique status.
If a situation raises that if an organization has a high proportion of employees
who report that they are not empowered to do their job, it is going to be
difficult to get much done in other areas of strategic improvement that are
required to achieve the organization’s long-term objectives. If people do not
think they have what is necessary to do their jobs, how effective can they be
at making big enhancements in other areas? In such cases, it is likely that
improving employee empowerment will end up being a strategic intent across
the organization. It is positioned somewhat differently than other initiatives,
THE PROS & CONS OF EMPOWERMENT IN AN ORGANIZATION
Now-a-days, empowerment has become a popular word in the business
environment. Empowerment refers to the management practice of giving
authority to employees in making decisions regarding their work, in contrast
with a traditional environment in which the boss gives orders. While
contemporary business theory often argues that the empowerment style of
leadership is more productive. Like all leadership styles, it has its pros and
cons.
Pros:
1) Increased Productivity and Morale
Empowering employees to make decisions on their own can increase
productivity. When employees don’t have to wait for approval from a manager
or supervisor, the workflow doesn’t slow down or stop. Employees solve their
own issues, and they keep moving. Employees who feel confident that their
input will be valued, listened to and acted upon will be more likely to share
their views and ideas, benefiting employee as well as the employer. John Zink
of the PHCC Educational Foundation says, “Sometimes it takes an employee
stepping outside of their authority to show the benefits of employee
empowerment an owner.”
2) Improved Quality
Providing employees with tools and guidelines and proper training to make
independent decisions often encourages them to produce quality work and
helping your organization meet its goals. A 1999 study of Canadian hospitals
conducted by the University of Alberta found that a culture of employee
empowerment and ownership is a key to reach quality improvement goals and
maintain quality standards. When properly trained employees are empowered
to solve problems, take risks or be creative in their approach to work, they are
more likely to assume authority on the tasks. Whether the job is caring for ill
patients, developing an entire product line or simply selling movie tickets,
empowered employees often feel the sense of authority in the organization and
their work and struggle consistently to produce quality results.
3) Better Customer Service
Simon Sinek, a blogger who writes “The Empowered Employee,” says that
empowered employees provide exceptional service and he’s experienced this
first-hand. “Empowered employees have the power to make decisions without
a supervisor. They are entitled to go off script, bend the rules, do what they
see fit if they believe it is the right thing to do for the customer.
More than any other kind of employee, the empowered employee can create a
feeling of true customer service that ultimately yields much greater customer
loyalty,” he says. Organizations that give employees the freedom to make
decisions on the spot, which may even sometimes fly in the face of established
rules and protocol, often find that service to internal and external customers
is improved.
4) Embracing change
Empowered employees are always free to change and challenge the status quo
that is considerably quite critical for organizations that are fast changing and
technology based environment. Organizations which feel uncomfortable about
questioning their status quo will most probably stay stagnant since other
organizations may swiftly get past them. By establishing an environment
where the employees are feeling free to ask, offer and challenge new ideas may
avoid such a problem and help the employers and employees in the same
process
5) Collaboration
Since employees have been treated and empower as essential components
within the organization, they gain a lot of self-confidence as well as their
abilities to influence the organization. They feel comfortable in exchanging
their new views and ideas, and collaborating with colleagues in an honest and
broad manner. The behavior boosts their team work, promote and increase
involvement in supporting main goals of the organization. Thus, collaboration
plays a key role in attaining a lot more than any individual can attain on their
own in the organization.
6) Communication is boosted
Being less prominent in knowing the changes in the organization is not a good
to feel thing for employees. To overcome that, managers should keep the
employees informed regarding environment and jobs. The management
should be receptive when it comes to intake of employees and gives them a
better sense of control over the strategic and financial decision. This culture
makes employees feel more comfortable and share their ideas with
management and improve the morale of the workplace. In return, the
employees will become more receptive towards any positive training from the
management.
7) Clients will be much happier
When the clients have been given power, they feel very happy and satisfied
with their position. They become more enthusiastic and feel better. This
happens to be a key area when financial improvements have been realized
from empowering their employees. The clients always communicate with the
attentive and friendly staff, regardless of their enterprise! And the empowered
personnel will take a much more personal approach with their clients and
focus on creative and better ways to solve problems that appear much less
tied to the policy of the organization. In turn, the organization will feel
increased concern and improve retention and loyalty.
Cons:
Like all leadership styles employee empowerment also is likely to have some
disadvantages. It leads to decrease in efficiency because of non-uniform
decisions that are unoptimized for organizational goals. It can also create
issues with collaboration throughout the organization because decisions are
decentralized and not managed at the top. Manager and employee
relationships can become tense as the boundaries of authority blurred.
1) Abusing power
When the empowered employees are given powers to make decisions in their
own way most of them tend to abuse their power. There is a slight chance and
a huge possibility of taking advantage of the empowered for better and even
more personal gain. This implies the employees may become less responsible
for efficient based decisions they have made. For example, the employee tends
to spend time on non-work related things such as breaks and committee
meetings rather than on work.
2) Interpersonal relations
The complication in interpersonal relations arises with empowering
employees. The power they got to make decisions is being rooted to this
complexity that could bring conflicts and misunderstanding between staff and
management. In the trail of accepting the better culture of employee
empowerment, the management is facing a tough time in any organization.
These conflicts could result in any environment where the management and
employees cannot have proper working relations. Even when empowerment
could provide you with subordinate employees as well as job satisfaction, it
could deprive their managers at the same time.
3) Additional costs of training
Empowering employees trained well for educating them regarding
assertiveness, leadership skills, and group dynamics. The additional costs, as
well as time, are to be incurred by the organization to make it happen to
accept the fact that training will get you positive results.
4) Poor knowledge and understanding
Even though the ability to make decisions could be considered capable, it
comes with a few negative points as well. Lack of proper knowledge in taking
a decision regarding various business fields undermine the success of the
organization and may cause more interrelation conflicts. Lack of proper
training could be the cause.
5) Arrogance
The confidence level of an empowered employee is highly increased as they
are provided with sufficient power. That could be considerable, but too much
of confidence is not an even good thing. Increased levels of confidence could
lead to arrogance behavior. Handling such employees is quite difficult which
does become insubordinate in the future.
6) Risks of security and confidentiality
Employees are empowered by sharing information that is not supposed to be
shared with others. There is a lot of information that exchanges freely among
employees within the organization which can increase risk while considering
the security and confidentiality when leaked to others who usually don’t have
any access to that type of information.
Introduction of Quality Assurance
Quality assurance (QA) refers to the processes and procedures implemented
by a company to ensure that its products or services meet a certain level of
quality. The goal of quality assurance is to identify and fix any defects or
errors before the products or services are released to the customers.
Definition Quality assurance
Quality assurance (QA) can be defined as a set of activities designed to ensure
that a product or service meets the specified requirements and quality
standards. This involves the establishment of standards and procedures, the
monitoring of processes and the implementation of corrective actions when
necessary.
Quality assurance process
The quality assurance process can be complicated, and the list of steps can
be very long. In order to simplify it, we can integrate it with the Plan-Do-
Check-Act (PDCA) model, which is a common tool used for the management
of continuous process improvement. Here's how stages of the quality
assurance process can be mapped to the PDCA model:
Stage 1: Plan
 In this first crucial stage, a quality assurance technician or manager
will determine clear-cut goals to produce high-quality products and
suggest suitable processes to execute those objectives. At this stage, the
business can predict any potential problems.
Stage 2: Do
As the name suggests, this stage allows the implementation of the
processes identified in the previous phase. The organization carries out
its quality plan, which includes establishing procedures, training staff,
and implementing quality controls.
Stage 3: Check
In Stage 3, the results of the tests are checked and compared to what
was expected. This helps to see if the products meet the required
standards. If they do, then the experts move to the final stage. But if
they don't, they go back to the first stage to make necessary
improvements.
Stage 4: Act/Adjust
In this final stage, the organization takes action to improve the quality
plan based on the results of the previous stage. This involves making
changes to the quality plan, implementing new procedures, and
continuing to monitor the quality results.

Quality assurance methods

QA (Quality Assurance) methods and tools are techniques and instruments
utilized to ensure that products and services meet or exceed established
quality standards. To commonly used quality assurance methods, we include:
Identifying processes
Quality audit
Control charts
Benchmarking
Cause and effect diagrams
Other more advanced tools include six sigma, failure mode and effects
analysis, root cause analysis and poka-yoke (error-proofing) method.
Identifying processes
Identifying processes involves defining organizational processes and
standards at the beginning of a project to ensure that the development team
follows the right path.
Quality audit
Quality audit is a systematic method used to determine how the outlined
processes and standards perform during the development and design period.
For example, a quality audit might involve reviewing the design documents to
ensure that they meet the project requirements.
Control charts
Quality assurance engineers typically use control charts to view process
changes and assess whether they are stable in comparison to historical data.
These charts can provide a foundation for predicting potential results and
ascertaining whether a project should make basic alterations or avoid specific
problems. For example, a control chart might be used to track the defect rate
for a product over time.
Benchmarking
Benchmarking is a common quality improvement tool that utilizes major
performance metrics to find the strengths and weaknesses of procedures. It
involves comparing the organization's performance with industry or market
standards. Benchmarking can also evaluate prevailing processes in
comparison to that of rivals/historic data and hence assist quality assurance
experts in recommending suitable actions for improving quality. For example,
a company might benchmark its manufacturing processes against those of its
competitors to identify areas for improvement.
Cause and effect diagrams
Cause and effect diagrams, also called Fishbone or Ishikawa diagrams,
require members to brainstorm and outline all the possible causes of a
problem. These diagrams can be useful for identifying root causes of problems
and developing solutions. For example, a cause and effect diagram might be
used to identify the various factors that contribute to a particular defect in a
product.
Advantages and disadvantages of quality assurance
Quality assurance helps to ensure that products and services meet or exceed
customer expectations. While there are various advantages to implementing
quality assurance processes, there are also some potential drawbacks to
consider. In this regard, below are some advantages and disadvantages of
quality assurance that businesses should be aware of.

Advantages of quality assurance

• Consistent and predictable quality of products or services

• Reduction in defects, waste, and errors
• Increased customer satisfaction and loyalty
• Improved efficiency and productivity
• Identification of areas for process improvement
• Compliance with regulations and standards
Disadvantages of quality assurance
• High initial investment in resources and training
• Time-consuming and complex process
• May create a bureaucratic and rigid system
• Can be difficult to measure the effectiveness of quality assurance
• May not be suitable for all industries or types of projects
• Can lead to a false sense of security and complacency
Quality assurance vs quality control
The main difference between quality assurance and quality control is that QA
focuses on developing processes to achieve the expected level of quality and
avoid defects, while QC is the process of identifying defects and verifying the
quality.

The following table shows the difference between quality assurance and
quality control.
Quality assurance (QA) Quality control (QC)

• The objective of QA is to avoid • The objective of QC is the

defects. identification and
• QA is a method to manage improvement of defects.
quality. • QC is a technique for the
• QA does not include the verification of quality.
execution of the program. • QC always includes the
• QA for instance: verification execution of the program.
• QA ensures that the right • QC for instance: validation
thing is being done. • QC ensures the results of what
is being done are what is
anticipated.

Over time, organisations have acknowledged the importance of quality

assurance. Every organisation wants to deliver the best possible high-quality
product to its customers. Quality assurance assists organisations in
achieving this, thereby facilitating a loyal customer base
Introduction of Consumer Rights
As consumers, we rely on the goods and services we purchase to meet our
needs and improve our lives. However, not all businesses operate ethically,
and this can result in situations where consumers are taken advantage of or
even harmed. To address these issues, governments around the world have
implemented consumer protection laws, which provide consumers with
certain rights and protections when purchasing goods and services. In this
blog, we will explore the advantages of consumer rights and how they
empower consumers while driving business accountability.
Protection against Unsafe Products
One of the primary advantages of consumer rights is that they protect
consumers against unsafe products. Governments have established
safety standards that products must meet before they can be sold to
consumers. These standards apply to everything from children’s toys to
household appliances, and they ensure that products are safe for
consumers to use. Additionally, manufacturers are required to provide
warnings about potential hazards associated with their products. For
example, a medication may have side effects that could harm some
users, and manufacturers must provide information about these side
effects so that consumers can make informed decisions about whether
or not to use the product.
Redress for Defective Products
Another advantage of consumer rights is that they provide consumers
with a means of seeking redress for defective products. If a product does
not perform as advertised or fails to meet the standards set by the
government, consumers have the right to return it for a refund or
exchange. This provides consumers with a measure of protection
against unscrupulous businesses that may try to sell defective
products.
Protection against Fraudulent Practices
Consumer rights also protect consumers against fraudulent practices.
For example, businesses may make false or misleading claims about
the benefits of their products or engage in deceptive advertising
practices to lure consumers into purchasing their products. Consumer
protection laws prohibit these practices and provide consumers with
legal recourse if they have been misled or deceived by a business.
Access to Information
Consumer rights also provide consumers with access to information
about the products they purchase. For example, manufacturers are
required to provide detailed information about the ingredients in their
products, as well as any potential side effects or risks associated with
their use. This allows consumers to make informed decisions about the
products they purchase and use.
Empowerment of Consumers
Perhaps the most significant advantage of consumer rights is that they
empower consumers. By providing consumers with rights and
protections, consumer protection laws give consumers the confidence
 to purchase products and services without fear of being taken
advantage of or harmed. This empowerment of consumers can also lead
to increased competition among businesses, as businesses that provide
high-quality products and services will attract more customers than
those that do not.
How do you achieve customer satisfaction?
The benefits of focusing on customer satisfaction are clear. But actually
making customers happy can take some trial and error. The key is
persistence. Always aim to go above and beyond for customers, and lean on
other departments to help boost your customer experience.

• How to improve customer satisfaction

• Customer feedback
• Convenience
• Speed.
• Build a customer-focused culture
• Empathy
1. Become obsessed with customer feedback
Become a student of your customer feedback. Do not just collect it: Analyse
it and apply it to what your customers are saying. Commit to learning about
buyers’ pain points and then make a plan to alleviate them in ways that set
you apart from competitors.
A great way to do this is to use Zendesk’s feedback feature. The tool includes
analytics for agent performance and customer surveys, so you can study
complaints and compliments regarding your services.

Even without a CRM like Zendesk, you can still keep close tabs on customer
feedback. Social media and online review boards are especially good places to
monitor buyer attitudes. Search for mentions of your brand name or your
dedicated hashtags on social sites to see what people are saying.
2. Create a sense of convenience
The most successful physical stores are all about buyer convenience.
Customers enjoy places with flexible hours that fit their schedules. Think of
the success Walmart, 24-hour drug stores and gas stations have with that
model. We are also more likely to shop at places close to us.
To build the same sense of convenience as a brick-and-mortar store online,
you need to have a digital presence on the platforms and services your
customers already use. Use SEO-optimised blog posts and social content to
be front and centre in Google searches and social media feeds. And make a
point to be easily accessible for support questions on your customers’
channels of choice.
Offering support via messaging apps (like WhatsApp, Twitter and Facebook)
helps businesses create that same sense of 24-hour availability. These are the
same channels customers use to interact with friends and family, so it gives
you a chance to meet them where they already are.
You should also offer opportunities for customers to help themselves. Many
customers prefer the hands-off convenience of a knowledge base, where they
can search for information without having to interact with customer support
reps.
3. Deliver fast responses
In our Trends Report, we asked customers what matters most to them when
resolving an issue with a company. 73 percent said "they resolve my issue
quickly" and 59 percent said "they respond quickly." In a constantly
connected world, customers don't want to have to wait a day or even more
than a few hours, for a response. Here are some tips for delivering faster
responses:
Pre-written responses ensure agents do not have to write common answers
repeatedly
Messaging channels enable agents to help more customers at once because
they are asynchronous. In fact, support teams that have the fastest resolution
times are 42 percent more likely to be messaging with their customers.
AI-powered bots can intercept would-be tickets when agents are off the clock
Bots can also gather details upfront, such as city or account type, before an
agent takes over
4. Make customer satisfaction a company-wide focus
To improve overall customer satisfaction, you have to put time and effort into
a business strategy that puts customers first.
Using a tool like the balanced scorecard is a great first step. The balanced
scorecard guides companies in thinking about their operations from four
different perspectives:

• Financial
• Internal business
• Customer
• Innovation and learning
It also helps companies consider how all their activities are working toward
the goal of high customer satisfaction.
The balanced scorecard is just one way to incorporate customer satisfaction
into company goals. You can (and should) incorporate customer satisfaction
into your company mission and value proposition, too. That keeps it top-of-
mind with every employee, regardless of their position.
5. Lead with empathy
If there is one thing the pandemic taught us, it’s that empathy is an essential
skill for support professionals— it is even more valuable than customer
service experience. In fact, nearly half of customers want to interact with an
empathetic customer service representative. Support leaders can provide
empathy training, but it is also a good idea to hire support reps who can
already put themselves in an angry customer’s shoes and communicate that
understanding to the customer. Businesses might also consider allowing
agents to make exceptions to certain policies in situations that require
empathy.
Social Responsibility
Social responsibility is a moral obligation on a company or an individual to
take decisions or actions that is in favour and useful to society. Social
responsibility in business is commonly known as Corporate Social
Responsibility or CSR. For any company, this responsibility indicates that
they acknowledge and appreciate the goals of the society, and therefore, would
support them to achieve these goals.
The 3 Pillars of Sustainability
The concept of sustainability is composed of three pillars: environmental,
social and economic—also known informally as profits, planet, and people.
These are in particular relevant to corporate sustainability, and efforts made
by companies.
Environmental protection is the most frequently discussed element.
It is concerned with the reduction of carbon footprints, water usage,
non-decomposable packaging, and wasteful processes as part of a
supply chain. These processes can often be cost-effective, and
financially useful as well as important for environmental sustainability.
Social development is about treating employees fairly and ensuring
responsible, ethical, and sustainable treatment of employees,
stakeholders, and the community in which a business operates. This
may be achieved through more responsive benefits, like better
maternity and paternity benefits, flexible scheduling, and learning and
development opportunities. For example, business should operate
using sustainable labour, which involves fairly-paid, adult employees
who can operate in a safe environment.
Economic development is probably the simplest form of
sustainability. To be economically sustainable, a business must be
profitable and produce enough revenues to be continued into the
future. The challenge with this form of sustainability is achieving an
equilibrium. Rather than making money at any cost, companies should
attempt to generate profit in accordance with other elements of
sustainability.
Focussing on social and environmental sustainability in addition to economic
performance is an approach frequently referred to as the Triple Bottom Line.
Advantages of Social Responsibility
A company can boost its morale and enhance work culture when they can
engage their employees with some social causes. There are many factors that
can have a positive impact on the business while delivering social
responsibilities. Such few factors are

• Justification for existence and growth

• The long-term interest of the firm
• Avoidance of government regulation
• Maintenance of society
• Availability of resources with business
• Converting problems into opportunities
• A better environment for doing business
• Holding business responsible for social problems
Disadvantages of Social Responsibility
Like there are many advantages of social responsibility there are similarly
many disadvantages for business. Few factors are mentioned below.

• Violation of profit maximization objective

• Burden on consumers
• Lack of social skills
• Lack of broad public support
QUESTIONS
1) What is employee empowerment? Discuss the theories associated with it
citing examples.
2) Enlist various employee empowerment techniques that are used by
organisations. Describe them with illustration.
3) Explain how the employee empowerment inventory is measured?

Reference
1. Luthans, Fred (2016), Organistional Behaviour, McGrawHill
Publications, Indian Edition.
2. Robbins, Stephens P (2014), Organisational Behaviour, Pearson
Publications, Indian Edition.
PART-A

1. What is the role of leadership in quality management?

2. How does employee empowerment contribute to strategic planning?
3. What is the main difference between quality circles and brainstorming in
employee engagement?
4. How can employee empowerment be measured??
5. How does leadership style impact quality management outcomes?
6. How can leadership effectively encourage employee idea-sharing?
7. Is there a connection between effective leadership and quality customer
service?
8. How is Management by Walking Around (MBWA) used for employee input?
9. What is the primary objective of quality assurance (QA) in a company?
10. What is the balanced scorecard, and how can it help make customer
satisfaction a company-wide focus?

PART-B

11. How does empowerment contribute to quality improvement?

12. What are some examples of how employee empowerment can lead to
improved business outcomes?
13. Discuss the role of employee empowerment in sustainable and socially
responsible business practices
14. How can leaders promote sustainable and socially responsible quality
practices?
15. In what ways can employee empowerment enhance quality??
16. How does effective leadership impact product safety and ethical
considerations in quality management?
17. Compare and contrast the benefits and drawbacks of employee
empowerment in different types of organizations.
18. What is the role of the PDCA model in quality assurance, and what are
its key steps?
19. How do consumer rights protect against unsafe products, provide
redress for defective products, and address fraudulent practices?
20. Describe the three pillars of sustainability and their relevance to
corporate sustainability.
PART-C.

21. Discuss the importance of employee empowerment for leadership and

quality management.
22. Develop a quality assurance plan for a new product launch.
23. What is the influence of empowerment on accountability, job roles,
and strategic planning?
24. Discuss the challenges of implementing employee empowerment and
how leaders can overcome them
25. How can organizations effectively measure and assess employee
empowerment, and what role does measurement play in strategic planning?
26. Discuss the potential risks and costs associated with implementing
employee empowerment, including training and information security?
27. What is the role of quality assurance in maintaining product or service
quality, and what are the key components of a quality assurance process?
28. How can a company incorporate social responsibility into its core
values and mission?
29. How can businesses turn potential disadvantages of social
responsibility, into growth opportunities?
30. Develop a customer service strategy for a new online business that
focuses on convenience and speed.