MODULE 8

MANAGEMENT OF QUALITY

Introduction

Quality, broadly speaking, is the capacity of a good or service to consistently meet or

exceed the needs or expectations of the consumer. However, as different clients will have
different needs, a practical definition of quality will vary depending on the client. Quality was a
major corporate priority for around ten years. However, over time, quality can be defined as a
product's or service's capacity to regularly meet or exceed customer expectations. Quality started
to lose importance as other considerations took precedence. However, the demand for excellent
attention has increased recently. This has been mostly motivated by the costs and negative
publicity that have recently been involved with extensive recalls of things like cars, ground beef,
toys, fruit, and dogs.

Learning Outcomes

After completing the module, the student should be able to:

1. define the term quality as it relates to products and as it relates to services;
2. identify the determinants of quality;
3. explain why quality is important and the consequences of poor quality;
4. compare the quality awards;
5. discuss the quality certification; and
6. describe the total quality management.
Lesson 1. Insights on Quality Management (Stevenson, 2018)

Managers who are successful in managing quality must have knowledge of numerous
areas of quality. These include defining quality operationally, comprehending the costs and
advantages of quality, appreciating the repercussions of poor quality, and appreciating the
necessity of ethical conduct. To start, let's define quality.

Defining Quality: The Dimensions Quality

The degree to which a product or service meets or exceeds customer expectations is one
way to think about quality. It is really interesting to note how these two differ in terms of
performance expectations. If there is no discrepancy between these two measurements,
expectations have been satisfied. When the difference is positive, performance has exceeded
customers' expectations, but when it is negative, expectations have not been reached.
Customers can divide their expectations into various categories, or dimensions, that they
use to assess the value of a good or service. In order to meet or exceed customer expectations,
businesses benefit from understanding these. The dimensions used for goods and services are
somewhat dissimilar.

Product Quality. Product quality is often judged on nine dimensions of quality:

Performance-main characteristics of the product
Aesthetics-appearance, feel, smell, taste
Special features-extra characteristics
Conformance how well a product corresponds to design specifications
Reliability-dependable performance
Durability-ability to perform over time
Perceived quality-indirect evaluation of quality (e.g., reputation)
Serviceability-handling of complaints or repairs
Consistency-quality doesn't vary

Service Quality. The dimensions of product quality don't adequately describe service quality.
Instead, service quality is often described using the following dimensions:
Convenience -the availability and accessibility of the service
 Reliability-the ability to perform a service dependably, consistently, and accurately
Responsiveness-the willingness of service providers to help customers in unusual
situations and to deal with problems Time the speed with which service is delivered
Assurance -the knowledge exhibited by personnel who come into contact with a
customer and their ability to convey trust and confidence
Courtesy-the way customers are treated by employees who come into contact with them
Tangibles the physical appearance of facilities, equipment, personnel, and communication
materials
Consistency-the ability to provide the same level of good quality repeatedly
Expectations -meet (or exceed) customer expectations

Even though the dimensions of product and service quality provide a conceptual
framework for thinking about quality, they are too abstract to be practically applied to the design
of products or services, or to the actual production or provision of those products or services.
They have to be expressed in terms of distinct, quantifiable features. For instance, a consumer
would logically be interested in the car's performance while purchasing one. What does that
signify, though? More specifically, it might be used to describe a car's estimated miles per gallon,
its acceleration time from 0 to 60 mph, or its stopping distance at 60 mph. All of these can be
expressed in numerical terms. For each of the additional product dimensions as well as the
service dimensions, comparable measurable features are frequently found. To create and
manufacture high-quality goods and services, this kind of precise information is required.
Posing difficulties for service quality management and design. Customers could use
adjectives like cordial, considerate, and expert to express the sort of behavior they anticipate
from service providers. It can be challenging to translate these and comparable descriptors into
precise service standards. Additionally, client demands are frequently industry-specific. Therefore,
the expectations for health care and dry cleaning would be very dissimilar. Additionally, unrelated
factors like a customer's mood or general health or the weather may contribute to their
complaints.

The Determinants of Quality

The degree to which a product or a service successfully satisfies its intended purpose has
four primary determinants:
1. Design
 2. How well the product or service conforms to the design
3. Ease of use
4. Service after delivery

Benefits of Good Quality

Business organizations with good or excellent quality typically benefit in a variety of ways:
an enhanced reputation for quality, the ability to command premium prices, an increased market
share, greater customer loyalty, lower liability costs, and fewer production or service problems-
which yields higher productivity, fewer complaints from customers, lower production costs, and
higher profits. Annual studies by the National Institute of Standards indicate that winners of the
Baldrige quality award, described later in the chapter, outperform the S&P 500 Index by a
significant amount."

The Consequences of Poor Quality

It is important for management to recognize the different ways in which the quality of a
firm's products or services can affect the organization and to take these into account in
developing and maintaining a quality assurance program. Some of the major areas affected by
quality are
1. Loss of business
2. Liability
3. Productivity
4. Costs

Poor designs or defective products or services can result in loss of business. Failure to
devote adequate attention to quality can damage a profit-oriented organization's reputation and
lead to a decreased share of the market, or it can lead to increased criticism and/or controls for a
government agency or nonprofit organization.

Lesson 2. Quality Awards (Stevenson, 2018)

Quality awards have been established to generate improvement in quality. The Malcolm
Baldrige Award, the European Quality Award, and the Deming Prize are well-known awards given
annually to recognize firms that have integrated quality management into their operations.
The Baldrige Award
Named after the late Malcolm Baldrige, an industrialist and former secretary of
commerce, the annual Baldrige Award is administered by the National Institute of Standards and
Technology. The purpose of the award competition is to stimulate efforts to improve quality, to
recognize quality achievements, and to publicize successful programs.

The European Quality Award

The European Quality Award is Europe's most prestigious award for organizational
excellence. The European Quality Award sits at the top of regional and national quality awards,
and applicants have often won one or more of those awards prior to applying for the European
Quality Award.

The Deming Prize

The Deming Prize, named in honor of the late W. Edwards Deming, is Japan's highly
coveted award recognizing successful quality efforts. It is given annually to any company that
meets the award's standards.

Lesson 3. Quality Certification (Stevenson, 2018)

ISO 9000, 14000, and 24700

The International Organization for Standardization (ISO) promotes worldwide standards
for the improvement of quality, productivity, and operating efficiency through a series of
standards and guidelines. Used by industrial and business organizations, regulatory agencies,
governments, and trade organizations, the standards have important economic and social
benefits. Not only are they tremendously important for designers, manufacturers, suppliers,
service providers, and customers, but the standards making a tremendous contribution to society
in general: They increase the levels of quality and reliability, productivity, and safety, while making
products and services affordable.
The standards help facilitate international trade. They provide governments with a basis
for health, safety, and environmental legislation. And they aid in transferring technology to
developing countries.
 Two of the most well-known of these are ISO 9000 and ISO 14000. ISO 9000 pertains to
quality management. It concerns what an organization does to ensure that its products or
services conform to its customers' requirements. ISO 14000 concerns what an organization does
to minimize harmful effects to the environment caused by its operations.

Lesson 4.Quality and the Supply Chain(Stevenson, 2018)

Business leaders are increasingly recognizing the importance of their supply chains in
achieving their quality goals. Achievement requires measuring customer perceptions of quality,
identifying problem areas, and correcting those problems.
When dealing with supplier quality in global supply chains, companies are finding a wide
range in the degree of sophistication concerning quality assurance. Although developed
countries often have a fair level of sophistication, little or no awareness of modern quality
practices may be found in some less-developed countries. This poses important liability issues for
companies that outsource to those areas.

Lesson 5.Total Quality Management (Stevenson, 2018)

A primary role of management is to lead an organization in its daily operation and to

maintain it as a viable entity into the future. Quality has become an important factor in both of
these objectives. The term total quality management (TQM) refers to a quest for quality in an
organization. There are three key philosophies in this approach. One is a never-ending push to
improve, which is referred to as continuous improvement; the second is the involvement of
everyone in the organization; and the third is a goal of customer satisfaction, which means
meeting or exceeding customer expectations.
TQM expands the traditional view of quality looking only at the quality of the final
product or services to looking at the quality of every aspect of the process that produces the
product or service. TQM systems are intended to prevent poor quality from occurring.
We can describe the TQM approach as follows:
1. Find out what customers want. This might involve the use of surveys, focus groups,
interviews, or some other technique that integrates the customer’s voice in the decision-
making process. Be sure to include the internal customer (the next person in the process)
as well as the external customer (the final customer).
 2. Design a product or service that will meet (or exceed) what customers want. Make it easy
to use and easy to produce.
3. Design processes that facilitate doing the job right the first time. Determine where
mistakes are likely to occur and try to prevent them. When mistakes do occur, find out
why So that they are less likely to occur again. Strive to make the process "mistake-proof”.
This is sometimes referred to as a fail-safing: Elements are incorporated in product or
service design that makes it virtually impossible for an employee (or sometimes a
customer) to do something incorrectly. The Japanese term for this is pokayoke.
Examples include parts that fit together one way only and appliance plugs that can be
inserted into a wall outlet the correct way only. Another term that is sometimes used is
foolproofing, but use of this term may be taken to imply that employees (or customers)
are fools -not a wise choice!
4. Keep track of results, and use them to guide improvement in the system. Never stop
trying to improve.
5. Extend these concepts throughout the supply chain.
6. Top management must be involved and committed. Otherwise, TQM will just be another
fad that fails and fades away.

Many companies have successfully implemented TQM programs. Successful TQM

programs are built through the dedication and combined efforts of everyone in the organization.

Reference
Stevenson (2018). Operations Management. 13 Edition. McGraw-Hill Education.Philippines
th