CHAPTER FIVE

QUALITY MANAGEMENT AND CONTROL

5.1. MEANING AND NATURE OF QUALITY

Different meaning could be attached to the word quality under different circumstances. The word
quality does not mean the quality of manufactured product only. It may refer to the quality of the
process (i.e., men, material, and machines) and even that of management. Where the quality
manufactured product referred as or defined as “Quality of product as the degree in which it
fulfills the requirement of the customer. It is not absolute but it judged or realized by comparing
it with some standards”.

Quality begins with the design of a product in accordance with the customer specification further
it involved the established measurement standards, the use of proper material, selection of
suitable manufacturing process etc., quality is a relative term and it is generally used with
reference to the end use of the product.
Crosby defined as “Quality is conformance to requirement or specifications”.
Juran defined as “Quality is fitness for use”. “The Quality of a product or service is the
fitness of that product or service for meeting or exceeding its intended use as required by the
customer.”

While quality management is cross functional in nature and involves the entire organization,
operations have special responsibility to produce a quality product for the customer. This
requires the cooperation of the entire organization and careful attention to management and
control of quality.

Quality can be defined in a number of different ways.

In an article entitled “what does product quality really mean?” David Garvin, discuss five
approaches to define quality:
F He state that a common notion of quality is that it is synonymous with ‘superiority’ or
‘innate excellence’. From this view point, quality cannot be precisely defined but can only be
recognized through experience.

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F The second view point is that quality is precise and measurable concept and that differences
in quality reflect differences in quantity of some product attributes. For instance, high quality
ice cream has high butterfat content. According to this approach, quality can be ranked based
on the amounts of the desired attributes they possess. (Product based view)
F The third view is that quality is determined by what a customer wants and is willing to pay.
According to this view the goods and services that best satisfy individual consumer’s unique
needs or wants are regarded as having the highest quality. Thus, quality can be defined as
fitness for intended use, or in other words, how well the product performs its intended
functions. (user based view)
F The fourth definition of quality arises from the unique perspective of manufacturing
operations. In this setting quality is associated with engineering and manufacturing practices;
hence, the perspective of quality is synonymous with conformance to specification. Quality
conformance can be defined as, how well manufacturing is able to meet design specification.
(manufacturing view)
F Finally the value based approach to quality defines it in terms of cost and price. In this sense,
a quality product is one that provides a predetermined level of performance at an acceptable
price or provide conformance to design specification at an acceptable cost. (Value based
approach)
In considering all these approaches to quality, it is clear that the meaning of quality depends on
one’s view point and places in the organization. Thus different definitions are needed. More over
it is necessary to shift one’s perspective of quality as products move from their design stage to
market. All of the viewpoints just presented are necessary in order to result in an overall quality
product.

Quality Assurance Vs Strategic Approach

Quality Assurance is concerned with the entire range of production, beginning with
product or service design, continuing through the transformation process and extended to
service after delivery. It emphasis on finding and correcting defects before reaching
market.
Strategic approach is proactive, focusing on preventive mistakes from occurring.
Greater emphasis on customer satisfaction
Dimensions of Quality
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- Performance: main characteristics of the product or services.
- Aesthetics: appearance, feel, smell, taste
- Special feature: extra characteristics.
- Conformance: how well a product or service corresponds to the customer's expectation
- Safety: risk of injury or harm
- Reliability: consistency of performance.
- Durability: the useful life of the product or service.
- Perceived quality: indirect evaluation of quality (e.g. reputation)
- Service after sale: handling of complaints or checking on customer satisfaction.
Dimension of Quality: Service
- Time and timeliness: How long a customer waits for service, and is it completed on time?
- Completeness: is everything customer asked for provided?
- Courtesy: involves politeness, respect, consideration, and friendliness of contact personal
(including receptionists, telephone operators, etc). How are customers treated by employees?
E.g. Are catalogue phone operators nice and are their voices pleasant?
- Consistency: Is the same level of service provided to each customer each time?
- Accessibility and convenience: -involves approachability and ease of contact.
- How easy is it to obtain service?
- Does a service representative answer your calls quickly?
- Accuracy: is the service performed right every time?
- Responsiveness: how well does the company reach to unusual situation?
5.2. OVERVIEW OF TQM
Total Quality Management is a philosophy that involves each and every individual in an
organization in a continual effort to improve quality and achieve customer satisfaction. Total
quality management (TQM) is an integrated organizational effort designed to improve quality at
every level.
The TQM Approach
TQM is not called philosophy for nothing. It is that common viewpoint as well as attitude shared
by the whole organization that helps the organization achieves its prime objective of increase in
revenue as well as a continuous relationship with the customer, by providing a quality based
service which fulfills the customer’s needs and requirements.

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If we apply the TQM approach we can identify the role played by various departments and
interfaces of the organization. These roles at the functional and departmental levels if not in line
with the organizational strategy would not allow the organization to pursue TQM.

The Evolution of Total Quality Management (TQM)

The concept of quality has existed for many years, though its meaning has changed and evolved
over time. In the early twentieth century, quality management meant inspecting products to
ensure that they met specifications. In the 1940s, during World War II, quality became more
statistical in nature. Statistical sampling techniques were used to evaluate quality, and quality
control charts were used to monitor the production process. In the 1960s, with the help of so-
called “quality gurus,” the concept took on a broader meaning. Quality began to be viewed as
something that encompassed the entire organization, not only the production process. Since all
functions were responsible for product quality and all shared the costs of poor quality, quality
was seen as a concept that affected the entire organization.

The meaning of quality for businesses changed dramatically in the late 1970s. Before then
quality was still viewed as something that needed to be inspected and corrected. However, in the
1970s and 1980s many U.S. industries lost market share to foreign competition. In the auto
industry, manufacturers such as Toyota and Honda became major players. In the consumer goods
market, companies such as Toshiba and Sony led the way. These foreign competitors were
producing lower-priced products with considerably higher quality.

To survive, companies had to make major changes in their quality programs. Many hired
consultants and instituted quality training programs for their employees. A new concept of
quality was emerging. One result is that quality began to have a strategic meaning. Today,
successful companies understand that quality provides a competitive advantage. They put the
customer first and define quality as meeting or exceeding customer expectations.

Since the 1970s, competition based on quality has grown in importance and has generated
tremendous interest, concern, and enthusiasm. Companies in every line of business are focusing
on improving quality in order to be more competitive. In many industries quality excellence has
become a standard for doing business. Companies that do not meet this standard simply will not

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 survive. As you will see later in the chapter, the importance of quality is demonstrated by
national quality awards and quality certifications that are coveted by businesses.

The term used for today’s new concept of quality is total quality management or TQM. Figure
presents a timeline of the old and new concepts of quality. You can see that the old concept is
reactive, designed to correct quality problems after they occur. The new concept is proactive,
designed to build quality into the product and process design.
Time Early 1900s 1940s 1960s 1980s and Beyond
FOCUS Inspection Statistical Organizational Customer driven quality
Sampling quality focus

Old Concept of Quality: New Concept of Quality:

Inspect for quality after production Build quality into the process. Identify
and correct causes of quality problems.
Figure 5-1 Timeline showing the differences between old and new concepts of quality
5.3. COST OF QUALITY
A new idea in the quality area is to calculate and control the cost of quality. The cost of quality
may be divided in to two components: control cost and failure cost. The control costs are related
to activities which remove defects in the production stream. This can be done in two ways: by
prevention and by appraisal.

A. Control cost
i. The prevention cost
Prevention costs are costs associated with preventing defects before they happen. Such costs
include:
F Cost of providing quality engineering, and quality planning services for ensuring correct
specifications of materials, use of right methods and process, preparing company standards,
preparing sampling procedures and so on.
F Information Costs: Costs of acquiring and maintaining data related to quality and
development of reports on quality performance.
F Cost involved with training and retraining of operators, supervisors and other staffs.
F Cost of research and development efforts, so as to maintain high quality products.

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 F The cost of redesigning the process to remove the cause of poor quality.
F Cost incurred in the organization of quality circles and other techniques with the objectives
of creating interests and involvements of workers and staffs in their work motivate them and
high quality of work life. These activities occur prior to production and are aimed at
preventing defects before they occur.
ii. The appraisal (inspection)
Appraisal costs are costs incurred in assessing the level of quality attended by the operating
system. Appraisal helps management identify quality problem. Such costs include:
 Cost of testing or inspecting incoming raw materials, including the cost of their movement
for the purpose of inspection testing at regular interval
 Cost of providing and maintaining laboratory services for the purpose of inspection
 Cost of process control test or stage inspection.
 Cost of product inspection, such as mechanical testing, non destructive testing, cost of
carrying out field trials etc.
 Cost of maintenance and calibration of test and inspection equipment and apparatus at
regular interval.
 Expenditure incurred in vendor rating when any of the materials required for the product are
procured from outside sources.
B. Failure Cost
The failure costs are incurred either during the production process (internal) or after the
production is shipped (external).
i. The internal failure
Internal failure costs result from defects that are discovered during the production of a product
or services. Such costs include:
 Cost of scrap or rejections produced which cannot be passed on to, or which will not be
accepted by the customer and which becomes a total cost. It will include the cost of power
and various in process materials spent in producing the rejection.
 Cost of rework or corrective operations, in case of such items which have not been passed
during inspection but which can be made acceptable after certain rework or repair such as
welding, brazing, pressing, filling, re-heat treatment, rough machining etc.

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 Cost involved in fault investigation, trouble –shootings, defect analysis. It may also entail
cost of re-examination, and testing, test methods, change of material specification or method
of production etc.
 Loss in capacity of production because of the rejection produced.
ii. The external failure cost
External failure costs arise when a defect is discovered after the customer has received defective
products or services. Such costs include product:
 Loss of future orders to the company owing to loss in its prestige caused by high rejection or
poor performance in services. The customer may even withhold payments and the relation
may be impaired which may be difficult to improve again. The customers may permanently
withdraw placing order.
 Cost involved in attending to customers complaints and providing customer services,
including warranty charges (the cost of refund, repair, or replace), returned merchandises
(cost related to returning goods to sellers including transportation), losses of taxes and duties,
allowance (cost of concession), complaints (the cost of setting customer complaints) and the
like.
 Litigation costs which include not only legal fees but also the time and effort of employees
who must appear for the company in court.
The total cost of quality can thus be expressed as the sum of the following cost:
Total cost=control cost + failure cost , that is
(Prevention cost+ appraisal cost)+(internal failure cost +external failure cost )

The total cost of quality can be minimized by observing the relationship between the cost of
quality and degree of conformance. When the degree of conformance is very high (low defects)
the cost of failure are low but the cost of control are quite high. When the degree of conformance
is low (high defect) the opposite situation exist. Good quality management requires the proper
balance between appraisal and prevention costs, so that total control costs are at the minimum.

5.4. Continuous Improvement

Because of advances in process capability, nonconformity prevention eventually loses its appeals
as focus quality improvement efforts. The ability to satisfy customer’s requirement today,
however, does not imply an ability to satisfy customer’s expectation in the future, because

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customer expectation change over time. Nor does the fact that, a process is capable of producing
without non conformities means it cannot be improved. Finally, processes that are not improving
may be eroding.

For all these reasons, the focus of quality improvement efforts may eventually shift from
prevention to ongoing and continuous improvement. Focusing on ongoing improvement is a way
of preparing to meet customer’s future expectations, whether it can be anticipated or not. Even
when future customer’s expectations are unforeseen and unforeseeable, a focus on continual
improvement can lead to the development of capabilities that will prepare a firm to meet new
expectations. Ongoing, continuous improvement of processes requires a company to establish a
climate in which everyone focuses on delighting the customers. Thus, the tools and methods that
are used to foster ongoing improvement are meant not just for quality professional, but for
everyone. They are most useful in the context of an organization wide focus on customer
satisfaction consistent with four commitment of total quality management.

5.5. Statistical Quality Controls

One of the cornerstones of quality control is the use of statistical methods to determine how
much inspection to use. Statistical quality controls are the general category of statistical tools
used to evaluate organizational quality. In many case a great deal can be saved by taking a
sample rather than making 100 percent inspection. In other cases there is no alternative but to
take a sample. For example, destructive testing. Two distinct types of statistical methods are
available: acceptance sampling and process control. Consider each in the following discussion.
i. Acceptance sampling
Applies to lot inspection where a decision to accept or reject a lot of materials is made on the
basis of random sample drawn from the lot. This type of inspection is frequently used for
incoming raw materials or for finished goods prior to shipment.

Generally it can be defined as taking one or more samples at random from a lot of items,
inspecting each of the items in the sample (s) and deciding – on the basis of inspection result-
whether to accept or reject the entire lot. This type of inspection can be used by the customers to
ensure that quality standards are met prior to shipments. Acceptance sampling is used in

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 preference to 100% inspection where ever the cost of inspection is high in relation to the cost of
passing defective items to the customer.

In a single acceptance sampling, one sample is taken from a lot and the decision whether to
accept or reject the lot is made after the sample is inspected and compared with standards.
Formally, we let: n= sample size, c= acceptance number, x= number of defective units found in
the sample. For single sampling, the decision rule whether to accept or reject the lot after
inspecting the sample is as follows:
If x  c, accept the lot
If xc, reject the lot
For example, suppose we have a lot of 10,000 items and we decided to take a random sample of
100 items (n=100). We inspect the 100 items and find 3 defectives(x=3). Assume the acceptance
number in this case is 2(c=2). Since the number of defective units in the sample exceeds the
acceptance number, the lot of 10,000 units will be rejected. Note that very good lots or very bad
lots will usually require only one sample and lots of medium quality may require two or more
samples to reach a decision.

ii. Process quality control system

No two products or services are exactly alike because the processes used to produce them
contain many sources of variation, even if the processes are working as intended. For example,
the time required to process a credit card application varies because of the load on the credit
department, the financial background of the applicant, and the skill & attitude of the employees.
Nothing can be done to eliminate variation in process output completely, but management can
investigate the cause of variation. Generally, the source of variation can be common or random
causes of variation and assignable causes.
a. Common causes of variation
Common causes of variation are purely random, unidentifiable sources of variation that are
unavoidable with the current process. No matter how perfectly the process is designed, there will
be some variability in quality characteristics from one unit to the next. For example, a machine
filling cereal boxes will not deposit exactly the same weight in each boxes; the amount filled will
vary around some average figure. The aim of process control is to find the range of natural

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variation of the process and to then ensure that production stays within this range. Natural
variation is usually under the state of control.
b. Assignable causes
The second category of variation is assignable sources of variation also called special cases
includes any abnormal variations which are not usually found in a state of control. Assignable
causes of variation are any variation causing factor that can be identified and eliminated.
Assignable causes that results abnormal variation may include: lax (careless) procedures,
untrained operators, improper machine maintenance. The first job of process control manager is
to seek out these sources of unnecessary variation and bring the process under statistical control,
where the remaining variation is due to random causes.

A process can be brought to a state of control and can be maintained in this state through the use
of quality control charts –also called process chart or control chart. In the control chart shown
below the Y axis represents the quality characteristics which is being controlled while the X axis
represent time or particular sample taken from the process. The center line of the chart is the
average quality characteristic being measured. The upper control limit represents the maximum
acceptable random variations and the lower control limit indicates the minimum acceptable
random variation when a state of control exists. Generally speaking, the upper and lower control
limits are set at + three standard deviations from the mean. If normal probability distribution is
assumed, these control limits will include 99.7 % of the random variations observed.
Process control chart
Stop the process.
Look for assignable cause

Average +3 upper control limits (UCL)

SD

Quality central line (CL)

Measurement
Average

Average -3 SD lower control limits (LCL) stop the process.

Look for assignable

After a process has been brought to steady state operation, periodic samples are taken and plotted
on the control chart. When the measurement falls within the control limits, the process is

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continued. If the measurement falls outside the control limits, the process is stopped and a search
is made for an assignable causes. Through this procedure, the process is maintained in a constant
state of statistical control and there is only natural variation in the processes output.

Quality measures: to detect abnormal variation, inspectors must be able to measure quality
characteristics. Quality can be evaluated in two ways. One way is to measure variables i.e.
product or service characteristics such as weight, length, volume or time that can be measured.
Another way to evaluate quality is to measure attributes- i.e. product or service characteristics
that can be quickly counted for acceptable quality. Generally, quality can be measured for
control charts by attributes or by variables.

5.6. International quality standards /quality certifications/

Quality so important globally that the world is uniting around a single standards. This standard is
known as (ISO) many firms that do businesses internationally recognized the importance of
quality certification. These certifications include:
F ISO 9000 (it was founded in1946 in Geneva, Switzerland) is a series of International standards
on quality management and quality assurance. The idea behind the standards is defects can be
prevented through the planning and application of best practices at every stage of business
from design through manufacturing and Installation and servicing. These standards focus on
identifying criteria by which any organization, regardless of whether it is manufacturing or
service oriented, can ensure the products leaving its facility meets the requirements of its
customers.
F ISO 14000: is intended to assess a company's performance in terms of environmental
responsibility. The standards for certifications bear up on three major areas:
- Management systems: Systems development and integration of environmental
responsibility.
- Operations consumption of natural resources and energy.
- Environmental systems: Measuring, assessing and managing emission, effluents and other
waste streams

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