Quality and

Quality
Management
1. Quality
QUALITY MANAGEMENT
Quality

Refers to the ability of a product or service to consistently

meet or exceed customer requirements or expectations.

Quality Management

Includes defining quality in operational terms, understanding

the costs and benefits of quality, recognizing the
consequences of poor quality, and recognizing the need for
ethical behavior. 3
2. Determinants of
Quality
4 Primary Determinants of Quality

1. Design - refers to the intention of designers to

include or exclude certain features in a product
or service.
2. Quality of Conformance - refers to the degree
to which goods and services conform to the
intent of the designers.
3. Ease of Use
4. Service After Delivery
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3. Benefits of Good
Quality
Benefits of Good Quality

▪ An enhanced reputation for quality.

▪ The ability to command premium prices.
▪ An increased market share.
▪ Greater customer loyalty.
▪ Lower liability costs.
▪ Fewer production or service problems

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4. Consequences of
Poor Quality
Consequences of Poor Quality

1. Loss of Business
2. Liability
3. Productivity
4. Costs

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5. Determinants of
Quality
Product Quality and Service
Quality
Product Quality

1. Performance — main characteristics of the

product.
2. Aesthetics — appearance, feel, smell,
taste.
3. Special features — extra characteristics.
4. Conformance — how well a product
corresponds to design specifications.
Product Quality

5. Reliability —dependable performance.

6. Durability —ability to perform over time.
7. Perceived quality —indirect evaluation of
quality (e.g., reputation).
8. Serviceability —handling of complaints or
repairs.

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Service Quality
1. Convenience — the availability and accessibility of
the service.
2. Reliability — the ability to perform a service
dependably, consistently, and accurately.
3. Responsiveness — the willingness of service
providers to help customers in unusual situations and
to deal with problems.
4. Time —the speed with which service is delivered.
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Service Quality

5. Assurance — the knowledge exhibited by personnel who

come into contact with a customer and their ability to
convey trust and confidence.
6. Courtesy — the way customers are treated by employees
who come into contact with them.
7. Tangibles — the physical appearance of facilities,
equipment, personnel, and communication materials.
8. Consistency —The ability to provide the same level of good
quality repeatedly.
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6. Costs of Quality

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3 Classifications of Quality Costs

1. Appraisal Costs
- relate to inspection, testing, and other
activities intended to uncover defective
products or services, or to assure that there are
none.
2. Prevention Costs
- relate to attempts to
prevent defects from occurring
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3 Classifications of Quality Costs

3. Failure costs
- incurred by defective parts or products or by faulty
services
a) Internal Failures b) External Failures
- those costs discovered - those costs discovered
during the production after delivery to the
process. customer.

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7. Quality Control
Process

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Overview of Quality Control
Quality Control

 a process that measures output relative

to a standard and takes corrective
action when output does not meet
standards.

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Inspection

 An appraisal activity that compares goods or services

to a standard.
 Can occur at three points: before production, during
production, and after production.
 Its purpose is to provide information on the degree to
which items conform to a standard.

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Inspection

Basic
Issues:
▪ 1. How much to inspect and how often.
▪ 2. At what points in the process inspection should occur.
▪ 3. Whether to inspect in a centralized or on-site location.
▪ 4. Whether to inspect attributes (i.e., count the number of
times something occurs) or variables (i.e., measure the
value of a characteristic)

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Statistical Process Control

 Used to evaluate process output to decide if a

process is “in control” or if corrective action is
needed.

 2 Basic Tools:
 Control Charts
 Run Tests

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Statistical Process Control

Control Charts - a time-ordered plot of sample statistics

used to distinguish between random variability and
nonrandom variability.
Control Charts for Variables Control Charts for Attributes

1. Mean Charts 1. P-Charts

2. Range Charts 2. C-Charts

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Statistical Process Control

Run Tests - A test for patterns in a sequence which

enables an analyst to do a better job of detecting
abnormalities in a process and provides insights into
correcting a process that is out of control.

1. Up/Down Test
2. Median Test

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Up/Down Test

Median Test

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8. Quality Awards

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The Baldrige Award

 Named after the late Malcolm Baldrige, an

industrialist and former secretary of commerce.
 Administered by the National Institute of Standards
and Technology.
 Its purpose is to stimulate efforts to improve quality,
to recognize quality achievements, and to publicize
successful programs.

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The Baldrige Award

Benefits of the Baldrige competition:

▪ Winners achieve financial success.
▪ Winners share their knowledge.
▪ The process motivates employees.
▪ The process provides a well-designed quality system.
▪ The process requires obtaining data.
▪ The process provides feedback.

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The European Quality Award

 Europe’s most prestigious award for organizational

excellence.

 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.

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The Deming Prize

 Named in honor of the late W. Edwards Deming.

 Japan’s highly coveted award recognizing successful
quality efforts.
 The major focus of judging is on statistical quality control,
making it much narrower in scope than the Baldrige
Award, which focuses more on customer satisfaction.

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9. Quality Certification

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International Organization for Standardization

 Promotes worldwide standards for the

improvement of quality, productivity, and
operating efficiency through a series of
standards and guidelines.

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ISO 9000

 Pertains to quality management.

 It concerns what an organization does to ensure
that its products or services conform to its
customers’ requirements.

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ISO 14000

 Concerns what an organization does to

minimize harmful effects to the environment
caused by its operations.

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ISO 24700

 Pertains to the quality and performance of office

equipment that contains reused components.

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10. Total Quality
Management

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Total Quality Management

 Refers to a quest for quality in an organization.

 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.
Total Quality Management

3 key philosophies in this approach:

▪ Never-ending push to improve — continuous
improvement;
▪ Involvement of everyone in the organization;
▪ Goal of customer satisfaction - meeting or
exceeding customer expectations.

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Other Important Elements of TQM

1. Continous Improvement
2. Competitive Benchmarking
3. Employee Empowerment
4. Team Approach
5. Decisions based on facts rather than
opinions

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Other Important Elements of TQM

6. Knowledge of tools
7. Supplier quality
8. Champion
9. Quality at the source
10.Suppliers

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