Quality management book @ bec doms bagalkot mba

1. 1
QUALITY-MANAGEMENT
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Unit – 1
Concept of Quality – Quality as customer delight – Quality as meeting standards – Actual
vs Perceived quality – Concept of total quality – Design, inputs, process and output – Need for
Quantity – Function of quality – Philosophy of quality – Old vs new – Quality as a problem and as
a challenge – 6 sigma concept.
Unit – 2
Quality Management : Fundamentals evolution and objectives – Planning for quality – Quality
process – Statistical Process Control – (SPC) and acceptance sampling – Quality assurance – Total
quality management.
Unit – 3
Quality and Productivity – Quality and cost – Is quality of cost – Benefits of quality – Competition
in quality – Role of MNCs in emergence of global quality.
Unit – 4
Quality System – Total quality control system vs total quality management system – Total Quality
Control (TQC) in Japan, US, Europe – Elements of TQC – Just in time, quality circles, quality teams.
Unit – 5
Total Quality Management (TQM) – Elements – TQM in global perspective – Global bench
marketing – Business Reengineering – Global standards – ISO 900 series – quality manual –
Barriers to TQM.
Unit – 6
Total Quality Management and Leadership – Implementing TQM – Market choices – Marketing
customer requirements – Maintaining competitive advantage - Core competence and strategic
alliances for ensuring quality – Quality review, recognition and reward – Quality awards.
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QUALITY MANAGEMENT
UNIT – 1
1.1Quality
Quality, cost and productivity are still fundamental concerns for management worldwide. The
concept of quality has been around us for a vary long time. The characters for quality appear
in ancient Chinese and Indian writings. Quality is the vary essence of humanity. The concept
of cost too has been around us for at least 10,000 years. Its beginning can be traced to the
commencement of trade activities and bartering. Productivity, however, has been around us
for only the past 200 years, with its beginnings, identified with the industrial revolution and
reinforced with the advent of the Taylor system.
A new awareness of quality has dawned in the Indian economy. Quality of both products and
services in organizations is being felt as the need of the hour. This is more so with greater
thrust on exports and liberalization in Indian economy. Secondly, quality practices are coming
to the fore. There is a missionary zeal in implementing TQM and getting ISO 9000
certification. Competitive environment demands a better quality of product or service at lower
rates. Only those organizations which manage productivity and quality on a continuous basis
are in a position to compete in increasingly competitive global marketplace. The impact of
poor quality on any organisation leads to: (i) low customer satisfaction and low market share;
(ii) low productivity, revenue and profit; (iii) low morale of workforce; (iv) more rework,
material and labour costs; (v) poor quality of goods and services; (vi) high inspection cost; (vii)
high process bottlenecks and delay in product shipment; (viii) higher work-in-progress
inventory; (ix) high analysis and repair costs; and (x) high material wastage and scarp.
Quality is a customer’s determination and is certainly not a manufacturer’s determination.
The modern view of quality is that products should totally satisfy the customer’s needs and
expectations on a continuous basis. This new concept of quality calls for : (i) well designed
products with functional perfection – right the first time (ii) prompt satisfaction of customer’s
expectations, (iii) excellence in service4 and (iv) absolute empathy with customers.
1.2HISTORICAL DEVELOPMENT
The development of quality activities has spanned over the entire twentieth century. Curiously,
significant changes in the approach to quality activities have taken place almost every 20
years. Quality activities have traversed a long path from operator’s inspection (1990s) to
verification of quality by supervisors (1920) to establishment of quality control departments
and 100 per cent inspection (1940s) to statistical quality control (1960s) to TQC with
statistical control (1980s) to TQM and statistical problem solving (1990s) to self-managed
teams and innovation (late 1990s). This historical development of the quality concepts is
shown in Table – 1.1
TABLE : 1.1 QUALITY – HISTORICAL DEVELOPMENTS
S. Evolving Quality Activities Period in Years
No.
1 Operator inspection 1870 - 1890
2 Foreman verification 1890 – 1920
3 QC Department and 100 per inspection 1920 – 1940
4 QC Department and Statistical Quality Control (SQC) 1940 – 1960
5 Quality Assurance (QA) Department and Statistical 1960 – 1980
Process Control (SPC)
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6 TQM, QA Department, Statistical problem solving 1990 onwards
and Statistical Process Control (SPC)
1.3DEFINITION OF QUALITY
A number of definitions of quality have been propounded by experts. Some of these, given by
quality ‘Gurus’, are widely recognized as these have been evolved over a period of time.
These are as follows:
Quality is fitness for use or purpose - Joseph M. Juran
Quality is conformance to requirements – Philip B. Crosby
A predictable degree of uniformity an dependability at low cost and suited to market. – W.
Edwards Deming
….. development, manufacture, administration and distribution of consistently low cost
products and services that customers need and want. - Bill Conway.
Total composite of product and service characteristics of marketing, engineering,
manufacturing and maintenance through which the product and service in use will meet
the expectations of the customer – Armand V. Feigenbaum.
Quality is the degree of excellence at an acceptable price and control of variability at an
acceptable cost – Broth.
The totality of features and characteristics of a product or service that bear on its ability to
satisfy stated or implied needs of customers – ISO 8402: Quality Vocabulary.
None of the above definitions construed quality as synonymous with prestige or preciousness
associated with quality of gem stones, for example. The well-worm analogy of he
Rools-Royce and Maruti Esteem as both being cars is worth reiterating to differentiable the
terms. A Rolls Royce is a motor car which meets a customer’s requirements for transporting
people from one location to another but in a luxurious comfort arid in such a way so as to
impress people on the way. A Maruti Esteem is no less a ‘quality’ car. Its purpose is to
transport people from one location to another gut in as cost-effective manner as possible.
Other factors such as reliability and safety, for example, are the characteristics which apply to
both cars and are shared requirement of their respective customers.
Thus most of the above given quality definitions (propounded by quality Gurus, pioneers
or specialists in the field of total quality and quality standards) are combinations of the two
themes – customer satisfaction and economic cost as explained In cars’ example.
Since the advent of industrial society, the term ‘quality’ has in part related to ‘adequacy’
as in conforming adequately to expectations and requirements of use.
Generally, an engineer created a set of specifications and if a production crew met these
engineering specifications, a ‘quality’ product is said to be delivered. For a long time,
producing quality products meant making sure that the product conformed to its
specifications. This had some degree of credibility – the products were greatly fit for use and
the customers were usually more or less satisfied. For our purpose, let us use the definition
of quality as: Quality is one which satisfied customers needs and continuously keeps on
performing its functions as desired by the customers as per specific standards.
Quality is neither a topic of recent interest nor a fashion. It is, and has always been a
problem of interest, essential for a firm’s and to a nation’s competitiveness. Colbert, the
famed Minister of Louis the XIV, already in 1664 stated:
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If our factories will impose through repeated efforts, the superior quality of their products,
foreigners will find it advantageous to supplying themselves in France and their wealth will
flow to the Kingdom of France.
This is one example of many. The ‘American Industrial Way’ has traditionally been based
on excellence in manufacturing product innovation and a sensitivity to consumers. The test of
the market, which brings some firms to profitability and others to oblivion, is also a pervasive
part of the American scene. It is these same market tests, expanded by a globalization of
business, manufacturing technology and competition, that have raise4d the priority of quality
in industrial business strategies.
In this chapter we shall be concerned with the definition of the concept of quality. Such
definitions are important, for it may mean different things to different things to different
people in various circumstances. The industrial notions of quality, although clear and well
stated, need not be true measures of quality. Although they are important and serve many
purposes, the are only part of a larger picture.
The concept of quality
Quality can be several things at the same time a may have various meanings, according to
the person, the measures applied and the context within which it is considered. Below, we
shall consider below, several dimensions and approaches along which quality could be
defined. Those are based on both objective and subjective notions of quality, with both
tangible and intangible characteristics.
‘Quality is the search for excellence’
‘Citius, Altius, Fortius meaning ‘Faster, Higher, Stronger’, engraved on Olympic medals,
symbolized the spirit of competition, seeking and ever greater excellence in man’s
achievements. The ‘search for excellence’ is not new, however; it is inbred in a Darwinian
philosophy for the survival of the fittest. Quality is thus an expression of this excellence,
which leads one firm’s product to dominate another, and to guarantee its survival by
establishing a new standard of quality. Over time, excellence creates an image of quality. This
is how English clothes, German cameras, French wines and cheeses, and so on, have become
marks of excellence. In this context, quality is a perpetual challenge which results both from
a process of perpetual improvement and a domination over other, similar products.
Of course, new technology can alter such domination. American cars, once an image of
excellence, have been gradually been replaced by Japanese cars; for some in the TJS, French
wine is gradually being replaced by Californian wine, etc. in this sense, quality is a mark of
excellence, persistent and maintained over long periods of time. Such excellence is, of course,
a function of habits, culture and values, and may thus vary from person to person and from
time to time.
‘Anything you can do, I can do better’
Are Japanese cars better than American? Do blades produced by Gillette last longer than
Wilkinson’s? Such questions, although hard to answer, may in some cases be dealt with an
apparent sense of objectivity. In other words, quality is defined by implication in terms of
attributes and some scales used to measure and combine these attributes. In some cases,
these attributed may be observed and measured precisely, but they can also be difficult to
observe directly and impossible to measure with precision. ‘These situations are some of the
ingredients that make quality the intangible variable that firms have difficulties dealing with.
Nevertheless, a combination of such attributes, in ‘various proportions’ can lead to the
definition of a concept of quality. In this sense, quality is defined relative to available
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alternatives, and can be measured and valued by some imputation associated with these
alternatives.
‘Quality is in the eye of the beholder’
Do French perfumes have a better smell than American? Is French Chablis of a better
quality than California Chablis? Is French cheese tastier than comparable cheeses produced in
the US? Of course, tins is a matter of smell and taste! Quality is then in the eye of the
beholden, established over long periods of time by habits, culture and customs which have
created ‘standards of quality’. In this case, quality is not what we think it is, but what the
customer says it is. J.F.A. Sloet, President of KLM, while addressing the European Council for
Quality stated that the essentials of quality is to do what you promised It is not relevant what
we think quality is. The only quality that matters… is what our clients think. Peter Drucker,
put it in the same terms by stating that it is not what the ‘supplier’ puts in, but what the
consumer takes out and is willing to pay for. This ‘downstream’ view of quality, emphasizing
a sensitivity to consumers is in sharp contrast with the traditional ‘upstream’ conception of
quality. In the early 1980s, for example, American car manufacturers were satisfied that they
were producing quality cars, only to see consumers turn towards Japanese made cars.
Similarly, at Renault, great efforts were put into developing more efficient engines, while
consumers were valuing attributes to which Renault designers were oblivious. Of course,
American and European car manufactures have since learned that in an open world, with
global competition, quality cannot be poor long.
‘Quality is the “Proof of he pudding”
Quality is what the market says it is. In this sense, quality is only a term that we can define a
posteriori, once consumers choices have been expressed relative to a range of potential and
competing products. Of course, there may be many reasons for these choices, including each
and all of the reasons stated above. Nevertheless, the underlying fact is that we cannot apriori
say what quality is. The best of intentions to produce quality products or deliver quality
services can falter. In this sense, quality is a variable which can at best be guessed apriori and,
perhaps, through successive experimentation, learning and adaptation, it can be refined and
improved.
‘Quality is Value Added’
Business preoccupation to measure and value its product and services leads to another
view of quality. This view defines quality as value added. It is both what the consumer wants
and is willing to pay for. Such views are, of course, motivated by the need to value quality so
that sensible decisions regarding a firm’s quality supply can be reached. For example, how
much is a firm willing to pay for shorter and more reliable supply delays of materials it uses is
manufacturing processes? This is, of course measure by what added the buyer gets by such a
supply quality. Although difficult to assess, it might be possible to do so in some cases,
Inventory stocks, reduced administration costs and smoother production flows may be only a
few of the many facets the buyer may consider to value shorter and more reliable delays. The
value added in consuming well known label goods compared to unlabelled ones, although
much more difficult to measure and define, do exist, since there is clearly a market for
‘overpriced’ goods whose essential characteristic is their label. How else could we explain a
Chevignon Jacket or Hermes scarf costing three times the price of the same jacket and scarf
without the label!
As a result, quality is not a term that can be defined simply. Rather, it is composite terms,
expressed in terms of attributes which define quality by implication. These attributes express:
The relative desirable of products, items, services.
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The potential for substitutions and product differentiation, both objection and
subjective.
In this sense, the concept of quality is both objective and subjective, and is based on
product and service differentiation, on substitution, as well as on buyer perception and
heterogeneity. Substitution combined with subjective (or objective) differentiation thus
provides some means that we can use in appreciating and valuing quality if it can be
measured or estimated directly or indirectly in terms of other variables. If products are not
substituted (meaning that they are not comparable), then quality as a variable used to
compare these products is not relevant. Differentiation of products can be subjective,
perceived differently by consumers. Beauty, taste, smell are perceived differently by
buyers. In this sense, quality is a concept expressed by a consumer population’s
heterogeneity, as we pointed out earlier. Thus, heterogeneity induces an unequal
assessment of what is quality. If consumers are the same’ in terms of how they value and
assess characteristics associated with a product, then they may be considered
homogeneous, and the concept of quality would be well defined in terms of ‘agreed on’
properties. For example, the number of shaves one can have with a Gillette sensor blade
compared to a standard one, the temperature tolerance of Titanium (needed to fabricate
jet engines) compared to some other materials, the hardness of graphite steel compared
to other types of steel, are all objective dimensions along which quality is measured.
1.4WHO IS THE CUSTOMER?
For an organisation seeking major improvement, the customer is the primary driving force.
Obvously, the external customer who pays for the service is important for the reasons outlined
above in winning and losing customers. But who he or she? Which one? Do we respond to the
needs of the big customer or the small one?.... the demanding one or the passive one?... the
immediate purchaser or the consumer? The reality is we will be dealing with many customers on
continuous basis and they are all important. In a Quality organisatoin, the must have a customer
– a person to tell us whether we have got it right or not. Without an identified customer, we
should why we are doing this activity. With an identified customer, we can find out what is
needed, if everyone is thinking ‘customer’ in this way, a strong movement for improvement is
created.
At the beginning of a Quality process, many companies define categories of customer to help
people understand the need for customer-orientation. Distinctions are made between internal
customers and external and sometimes between customers and consumers if both are supplied,
e.g. a PC manufacturer who sells to the public as well as through dealers. Ultimately though the
same generic concept applies throughout – my customer is the person receiving this service
which I am providing now. Ian Valiance, Chairman of BT, thinks of his customers as constituents’’
including the government, the public (he receives 20,000 letters a month), industrial users and
the people reporting to him. They are all his customers and he ruthlessly manages his time to
devote appropriate attention to all of them.
In fact, most managers and also staff have complex constituents like Ian Valiance. We will find
that we can categorise them as we under stand their needs better. For example, until the Quality
movement hit the airlines, passengers were just passengers; now there are many subdivisions
such as business travelers, vacationers, family visitors, children travelling without parents. Such
categorization provides crucial focus on the differing needs and enabled British Airways, early on
in their Quality process, to provide directly for each group, with, for example, the Young Fliers
programme.
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Identifying market segments from which distinct customer requirements can be
characterized moves the supplier further away from ‘product-out’ thinking, where it is up to the
customer to adjust his needs around our offering. Each customer category is still a compromise
though and the smaller and more sharply defined the grouping, the closer we are able to match
each customer’s need. The customer concept can be used to challenge each business unit, each
work team and each person in a Quality organisation to make the focus tighter and tighter until,
ultimately, it is one person – the person being served now.
As such, the customer concept, as with Quality itself, if both strategic and tactical. We
need strategic customer focus in order to design the products to attract customer interest and
also to create the processes to deliver to their needs. But to really satisfy customers we have to
be albe to adjust tactically too. When it comes down to winning or losing customers, service is
personal – one to one. The customer has no interest at all in our other customers. John Mitchell’s
customer felt as if there was no one more important to him than her and the stained dress.
However both our company is, that is the feeling we should be giving each customer.
1.5WINNING CUSTOMERS
We do not sell to customers today; they buy. that is, they call the tune; they have the choice and
will only buy from us if we make it easy for them or special for them. This applies whether they
are existing customers or new ones. Customers buy on the value to them. The value is a
perceived balance of features against cost. The customer is buying for a need, which might be to
fulfill the requirements of another customer, to make life easier or more interesting, to counter a
concern. The need is what determines the judgment of value of hence the attractiveness of
particular features. The need may well be as much emotional as physical. Thus the judgment of
value is a complex one going way beyond point-in-time product or service attributes. The cost
element of value is not simply the price tag either. The customer may well be weighing up the
cost of use as well as purchase and the cost of doing business with us as opposed to someone
else.
Value is an individual judgment. What is important to one customer may be less so to another.
Velcro USA President, Theodor Krantz, discovered this from Velcro’s better understanding of
their customers’ needs as their Quality process took hold: ‘Quality is not absolute, it depends on
the customer’s perception and requirements. For textile customers, appearances are important,
whereas in the medical business the concern is cleanliness. The auto makers want durability,
reliability and capability. With government, the specifications are all-important.’
FIGURE: 1.1 VALUE vs. DISTINCTION Page No. 10
Value is also a relative judgment. ‘In the shoe industry, the hook and loop on a pair of kids
sneakers is not especially important since the goods are barely used for three months. But with a
$600 knee brace, the quality of the hook and loop closure is very important.’ Relative value is
equally influenced by competitive offerings and novelty. For this reason alone, we have to
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continually upgrade our products and services. For many years, reliability has been a top factor
in car buying. Today, most cars (not all) are very reliable and this factor is beginning to be taken
for granted. Like safety in airline travel. Car makers have to retain reliability because to lose it
would be disastrous, but have to provide many more new features as well. For US discovered this
a few years ago. They had spend many years of an intense Quality programme concentrating on
the vital need to raise reliability.
Somewhat to their surprise, when they launched their highly successful Taurus, customers rated
them pretty average on reliability but very god on extra thoughtful features. In fact, Ford had put
a lot more effort into listening to what customers wanted and had built in some 1,200 items
from a customers – wish list. These were quite mundane thins like cup holders or quiet
door-closing but they made a noticeable difference. Ford describe this success as focusing on
‘the things that go right’ as well as ‘the things that go wrong’. Value is perishable and has to be
renewed.
When it comes to attracting new customers as opposed to retaining existing ones, the
supplier has to work even harder. Customers have the power to switch and may do so without
compunction when persuaded, but they are also lazy. They are not going to seek you out; you
have to attract them. This requires a distinctive offering in the market place to stand out from all
the others. Again this factor is perishable; what is distinctive one year is ordinary the next unless
it is continually upgraded.
1.6DELIGHTING THE CUSTOMER
Of course, we should be waiting for our problems to trigger our ability to impress the
customer. If we4 are really managing our customer, we are watching for his problems and using
our talents to help. This brings us into that rarefied area of customer delight: doing something
that feels special to the customer – exceeding his expectations. Not necessarily surprising the
customer, this can backfire, not going over the top, this may be impossible to repeat, but simply
doing that little bit better.
Richard Branson’s dream was not really to run a world-beating record business, that was
merely something he was good at; his real ambition was to run airline. Before starting Virgin
Atlantic, he knew he would have to do that little bit better. He knew all about Laker and
People’s Express, independent players who were unable to withstand the muscle of the airline
giants. His first service across the Atlantic was indeed very similar to Laker, offering cut-price
tickets which the majors followed. Gradually, Branson worked out a different strategy, adding
entertainment (imported fro his record business) for his young adult customer base. This led
him to his major break though, a superior service for business travelers. Business trade is the
lucrative end of airline revenue because of the high and non-discounted ticket prices.
Branson talked and listened to business travelers (literally, by regularly traveling himself and
getting to know his fellow passengers) and built up a picture of the regular businessman’s
likes and dislikes about air travel. Form this picture, he created Virgin Upper Class.
Upper Class was the first with individual video players, something all the major airlines are
copying – slowly because of the huge installation tasks for the big fleets. He set a style of
service which was personal, empowering cabin crew to care for passengers in their own way,
rather than to over-standardized patterns, again an advantage of being smaller and focused.
He added neck massages and aromatherapy kits because his passengers were concerned
about the effect of air travel on their bodies. He looked after his passengers way beyond the
terminal, sending limousines to collect and deliver door to door. Richard Branson introduced
all these features ahead of his big established competitors; indeed he did the whole thing a
little better. As a result, he delighted his customers. They told others and Virgin Atlantic’s
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success was assumed. In the early nineties, Upper Class is the service the other North Atlantic
carries are striving to better.
Customer delight is a wonderful thing to achieve. The customer does the reverse of
spreading the bad news and tells his friends of his good judgment in finding this special
service (as we’ve seen he won’t tell quite as many; good news doesn’t travel as far as bad but
the good feeling may last). The supplier and his team feel good about their work being valued.
But it is a very delicate emotion. He cannot be thrilled every time, but he will miss it if we
revert to ordinary service. We have raised his expecte4atoin and we have no choice but so set
our sights higher and do something better. This is the true power of customer-orientation: to
please the customer, continuous improvement is mandatory.
1.7 STANDARDS
Standards crystallize past experience and knowledge. It would be no exaggeration to say
that industrial production efficiency depends on the number of effective standards set and
utilized. However, some people believe that standards are enslaving and stifle creativity. To
set effective standards, it is first necessary to understand correctly what standards actually
are.
Standards based on scientific laws, versus business contracts
The basic requirement of industrial production is to manufacture, as cheaply as possible,
products that satisfy consumer demand. Ways of reducing costs include purchasing materials
cheaply and making use of cheap labor. These are management devices, not technical ones.
Technical measures might include lowering materials consumption per product unit or raising
per-capita value-adding productivity.
Raising productivity through technology basically involved using scientific laws and
principles in the production process. Modern industry is based on scientific progress, and the
application of science to manufacturing has enabled the mass production of sophisticated
products that were previously unimaginable. Industrial production is achieved through a
wide-ranging application of known scientific laws and principles in such diverse fields as
mechanics, thermodynamics, strength of materials, electro-magnetic, vibration science,
metallurgy, chemistry, biology, and so on.
Industrial production efficiency is determined by how skillfully these laws and principles
are applied to achieving specific objectives. Technical standards embody the most efficient
methods from all those methods technically feasible at any given time. Although they may
change when a more efficient method is discovered, until this happens they represent the
best methods known.
Although work can still be accomplished even without adhering to standards, failure to do
so inevitably leads to lowered efficiency. Trying to maintain efficiency also has an effect on
quality. A technical standards enshrines current best practices; deviation from it can cause
either a drop in efficiency or deterioration in quality. Thus, work must be carried out in
accordance with the standards if the specified quality at maximum efficiency is to be
produced.
Although human beings can discover and make use of the laws of nature, they cannot
invent or change them. Utilizing natural laws in industry therefore means manufacturing in
accordance with these laws. Work that fails to take them into account is bound to result in
harm. The process of manufacturing a given product inevitably defines itself in the course of
pursuing greater efficiency. A process created in this way when becomes a standard, and
many standards relating to design, manufacturing technology, and production are of this type.
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While standards based on scientific laws a principles are naturally be fined by the pursuit
of quality and efficiency, some standards are artificial conventions deliberately imposed by
human beings. There is no natural law that makes such standards mandatory; people
formulate and enforce them because they find it convenient to do so for social or business
reasons. For example, it really does not matter whether people drive on the right or left side
of the road, but there would be trouble if this was used as a reason for not stipulating which
side people have to drive on. One side or the other must be specified. Various system of
weights and measures also exist, such as the metric, imperial, and ancient Japanese systems.
It would be convenient if the same system was used all over the world, and most countries
have adopted the metric system as a standard. It would also be convenient if electricity
supplies all over the world used the same voltage and frequency.
Standards constituting social or business conventions are imposed for reasons of
convenience or safety. Depending on what they cover, they are prescribed in the form of
national, industrial, company, and divisional standards. Unlike standards based on natural lay,
they are not absolute; with this type of standard, people are free to choose what is specified.
The appropriateness of a standard of this type can be verified by weighing up the social
disadvantages that would arise if it did not exist. If dispensing with such a standard would
cause no problems, it is probably an meaningless restriction and ought to be abolished.
Interchangeability
The biggest advantage of standardization is interchangeability. When part of a system
break down, it is extremely economical if the malfunctioning part can be replaced without
having to renew the whole system. Interchangeability also makes dividsion of labour possible.
For example, since the dimensions of light fittings are standardized, light-bulb manufactures
can concentrate on makin light bulbs wile socked manufactures can specialize in making
sockets, independently of each other. Nor are the benefits of interchangeability limited to
material objects; when work is performed in accordance with design standards, operating
standards and so on. The result is the same whoever is doing the job. This normally insulates
an organization from the effect of changes in its personnel.
Artistic creation is a strong expression of individuality, and it has a different purpose form
economic manufacturing. In industrial production, people can not be allowed to disobey
standards at a whim, Tape-recorder manufactures must conduct research into tape standards,
and light-club manufactures can not ignore the standards for light-bulb fittings.
Less time spent on thinking and communicating
Formulas used in mathematics, physics and other sciences are a type of standard. For
example, if the correct formula is known, a problem in dynamics can be solved even without
understanding the underlying principles. If a standard drafting practice if prescribed, a
draftsperson does not need to think about what drawing method to use. If strength calculations
are performed by applying a fixed formula, an engineer does not have to solve differential
equation each time.
When standard parts are used their reliability is known without having to test them. Thus,
much design and development work can be dispensed with and this permits designers to design
highly-reliable products by concentrating their efforts on new, untried parts and the interfaces
between these and standard parts. There is also no need to show standard parts in drawings,
because simply specifying the part number is sufficient.
Likewise, if srandard test methods exist, this means that there is no need to think about
the test conditions each time. Another form of standard is a design manual, which is a
distillation of the expertise of all pervious designers. It contains more technical experience than
any individual designer could use in a lifetime.
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Production of more reliable products
Novel products and processes are beset with reliability problems. Even Japan’s famous
Bullet Train network, which operated without serious mishap for 30 years after its inauguration,
is no exception just after its inauguration, it was discovered that when it traveled in deep snow
at the speed of 200 kilometers per hour. Problems occurred with the carriage wheels. The design
engineers, renowned for their technical prowess and cautious approach, had failed to take into
account he effects of deep snow at high speeds. Even trying to think hard of everything is
sometimes less effective than conducting a single experiment.
Standardized parts and processes are the fruits of past experience, and they are less likely
to cause problems though type may appear old-fashioned and unexciting. The greater the
number of standardized parts and processes used, the fewer new ones are needed. This enables
designers, engineers, and others to concentrate on carefully testing the reliability of the new
elements of products, permitting them to develop novel products with high overall reliability.
Management by Standards
When a fault appears in a product it is vital to trace its cause in order to prevent its
recurrence. From the standardization viewpoint, there are three main causes of product
malfunction:
1) No standards were set;
2) Standards were set, but they were inadequate;
3) Standards were set, but they were not obeyed.
When a product made to standards runs into trouble, something is wrong with the standard.
Investingating a problem enables a better standard to be created. A company’s technology is
supported by its engineers and its standards;’ as an organisation, its technology is stored within
its written standards. An organisation cannot make technical progress if mistakes result in no
more than are working of the faulty product or a learning experience for an individual engineer;
improvement takes place and technical levels rise when standards are revised as a result of
mistakes.
Although standardization is so important, some companies and divisions are slow to
practice it. Preparing effective standards takes a certain amount of time, and it is difficult for
people to find that time when they are fully occupied with the work at hand. Like planning,
standardization is work for the future, but many managers are so engrossed in solving their
present problems that they show little interest in standardization. When trouble occurs, they
immediately ask, “Whose fault is it?” rather than, “What caused it?”, searching for a scapegoat
instead of the cause. They then come down hard on whoever they think is to blame.
In this situation, the managers’ subordinates give them distorted information the situation
is incorrectly assessed, mistaken judgments are made, and one problem leads to another. It is
vital management task to set and revise standards and ensure that the work is performed in
accordance with them. This must be done in order to stop fresh trouble in its tracks and prevent
problems that do occur from cropping up again in the future. Management by standards means
constantly referring back to the standards.
1.7WHAT IS TOTAL QUALITY?
In order to analyze and fully understand the term total quality, we may discuss some
popular definitions in the succeeding text. Total quality is defined as the mobilization of the
whole organisation to achieve quality continuously, economically and in entirety.
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According to Atkinson (1993) total quality is a strategic approach to product the best
product and service possible—through constant innovation. Concentration should not be only on
the production side but also on the service side of a business. General perception is that
improvement in quality is possible only during production but total quality cannot be achieved
without significant improvement in purchasing, marketing after sales service and a host of other
areas of business. Many companies may produce ‘zero defect’ products but the company’s
quality still is not right. There are other functions which can let the company down. The right
product delivered at the wrong time can have catastrophic impact on both buyer and seller. A
research report found that 95 percent of companies deliver their products late. This late delivery
can have just as bad impact upon future buying decision as can increasing the price of the
product by 50 percent.
Invoicing can also crate problems. Delivering the right product but invoicing incorrectly
can delay payment to the supplier for as much as 3 months or longer. Salesman promising the
earth in back-up can leave the disappointed customer cold and indifferent to further trading
with the company. Thus quality has to be 100 (not even 99.999…) percent and is the
responsibility of everybody. This quality with 100 percent utilization of all resources is what we
call total quality. Total quality not only satisfies but delights the customers by offering attractive
features in products and services. Total quality is needed to be supplied to customers by the
Indian companies in their products and services.
1.8Design
The complexity of business problems, organizations, operational and service systems, the
number of variables they involve, as well as the often chaotic environment to which they are
subjected make it difficult to use prior knowledge (in the form of mathematical models for
example) to construct and calibrate these systems. In these cases, experimentation is an
important approach to generate knowledge which can be used for effective analysis an decision
making. When a product is put to use, the number of intervening variables may be too large,
some of which may also be uncontrollable. Further, experiments are usually costly: there nay be
many variables and potentially a great deal of experimental variation and errors, making the
experimental results obtained difficult to compare and analyze in a statistically acceptable
manner. For such situations, experimental design, when it is properly used, provides a set of
consistent procedures and principles for collecting data so that an estimate of relationships
between one set of variables, called explanatory a variables, and another, called dependent
variables, can be performed (even if there are experimental errors). For example, we might seek
to build a relationship between supply delay (the dependent variable) and a number explanatory
variables such as the number of transport trucks ( which can be controlled), weather conditions
and traffic intensity (which cannot be controlled). When variables can be controlled, this can be
used to reduce the amount of experimental variation. In other cases, selection of the levels
associated with these variables might be desired and valued in terms of some objectives function.
‘The selection of variables’ levels is a design problem which we will consider at the end of this
chapter. Both the experimental and design problems are extremely important and useful. For
example, to test a production process in a factor, it might be possible to limit the number of
variables (i.e. maintain them in control) which affect a product’s or a process’ performance by
controlling some of the variables (e.g. the pressure, the temperature used in the process, and so
on).
Of course, experimental designs are not an end but a means to generate information analyze
data a make decisions. Even when such decisions are reached, they are based on forecasts, which
are in the best of circumstances only forecasts. There may be surprise4s and deviations from
standards operating conditions. These deviations can be controlled through inspection and
control charts. Alternatively, it might be possible to design products or process (or both) which
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would be insensitive to unexpected variations and perform equally well under a broad set of
conditions which we might not be able to control. When a product (or process) can perform in
such a manner over a large set of variations, it is said to be robust. Robust design then consists
of selecting controllable parameters which achieve a robust function (at a possibly lower cost). A
robust design implies ‘fitness to use’, even when there can be many unpredictable variations. In
this sense, robustness is an essential feature of the design process, product or service, and
seeks to ‘build quality in the product’. For this reason, robust design in often associated with
‘off-line quality control’. This means that control is not performed on-line but off-line.
To use experimental and robust design we require first that:
(a) We define what we mean by quality in precise and operational terms;
(b) We use TQM tools (such as Pareto charts, brainstorming, fishbone or cause – effect
diagrams, data analysis techniques and other tools) to select the ‘vital few’ variables
(which we will call factors, and that we will use in our experimental and robust design)
which are most pertinent to our problem, both form economic and explanatory points of
views.
(c) We apply experimental design techniques to gather data which will be meaningful both
statistically and economically. This data will be called experimental response.
(d) Estimate a relationship between the response and the experimental factors (the
independent variables).
(e) Optimize the controllable parameters (i.e. the design factors) such that the system, the
product or the production process being designed conforms to agreed upon desirable
operating conditions and over a broad range of environmental and uncontrollable
conditions.
(f) Finally, we test, inspect and verify the product or process performance to ensure that it is
operating in conformance to the defined standards, and leads to a business process
optimization (measured in terms of profits, consumers satisfaction and their variability)
Definition
of quality
Planning of Factors
experiment definition
Statistical
analysis
Economics criteria
Design and Robust design
robustness
engineering
efficiency
Tests, SPC/
SQC,
controls
FIGURE : 1.2 THE CONCERNS OF QUALITY MANAGEMENT
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In figure: 1.2, we summarize the concern for quality and the intensive use it makes of TQM tools,
experimental design, statistical analysis, applying economic and robust design and, finally,
inspecting and testing to verify that the results conform to the design intentions.
To achieve meaningful experimental results, experimental design reduces experimental
errors through a choice of experimental plans, the control of factors (by blocking them to
specific values) and the application of statistical techniques such as randomization, confounding
and replication.
1.10 Attributes of a Good Design
A good design reflect an optimal trade-off between cost and performance. A good design
is one which as:
Cheap;
Operates well over a large range;
Compatible with related precuts;
Cheap and Simple
It is easy to make a design more complicated, but it take genius to simplify a design. The
virtues of simplicity are many. Simple designs are cheaper to produce than complex designs,
because complexity requires precisions, and high precision is more difficult to achieve than low
precision. Simplicity means minimizing the number of parts In a product. The number of parts in
new generation dishwashers, cars and watches have been reduced by up to two-thirds compared
to old designs. Construction, too has been simplified. For example, instead of assembling parts
with screws and fasteners, these can now be grouped into sub-assemblies and mounted upon
molded frames that snap together. Costs are reduced as a result of:
Fewer suppliers, less administration and supplier supervision and fewer
supplier-related problems.
Quicker assembly and production.
Increased robustness
Reduced cost as a result of 1,2 and 3 and the benefits of standardization.
Greater customer satisfaction as a result of 1,2,3 and 4.
Integration and process capability
Good design requires not only a clear customer focus, but must integrate with the
organization’s technology, culture, market orientation, and so forth. Product design should be an
opportunity for the organisation lead from strength. This means that designers must take into
account the process capability of their organisation. Process capacity basically means: Can we do
it?
The time to discover whether capability exists is at the design stage. This is so obvious,
and yet it is surprising just how many products and services are launched without the basic
capability to pursue them.
Process capability analysis must cover all aspects of an organization’s activities. It is not
only an organization’s ability to produce a particular design which matters, but also whether It
can distribute and market it. Where new products or services are envisaged the organization’s
skill and knowledge base are critical factors: such capability has to be cultivated like a garden.
Money alone is insufficient, as the large investment houses discovered when they entered the
financial services markets following liberalization during 90’s.
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Investment houses tried to beat the competition by continuously poaching the ‘best’
people and investing in computers, never acknowledging that no one really understood the new
business. Instead of developing capability through training and on-the job experience, many
investment houses spent years money to create incompetence.
It is critically important that managers ensure that the necessary process capability exists
or can be developed in time. Hard evidence is essential. A simple but powerful approach is to
differentiate between the following three categories of information:
1. Known
2. Unclear
3. Assumed
There is, for example, a difference between obtaining confirmation that the bank will lend
money to finance a project and assuming that it will oblige in this way. Assumptions are often
unavoidable in decisions about process capability, but they become dangerous when people
treat them as ‘knows’. Exposing assumptions is one of the most valuable roles a manager can
play in capability analysis as people so easily forget that their ‘knowledge’ is but an
assumption. We ‘know’ that the but will take us to Madras because it says ‘Madras’ on the
destination board. Yet we cannot be certain that it will do so again, however reasonable the
assumptions.
1.11 ACHIEVING A ROBUST DESIGN
The variations a product experience in manufacturing are negligible compared with the
variation it is subjected to once it passes to the customer. Whereas the concept of zero
defects is based upon the Idea that reduced variation in the manufacturing processes leads to
reduced variation or failure in the field.
Designing in order to reduce product failure in the field simultaneously reduces the
likelihood of defects in the manufacturing process.
The logic of the argument is as follows. The zero defects approach focuses managerial
attention upon ensuring that processes are within acceptable deviations from targets, for
example, plus or minus 0.001 millimeter thickness. Any departure from the nominal value
means a loss. A bar of chocolate which is slightly below the target value started on the
wrapper results in a loss to the purchaser. The manufacturer too may suffer a loss. For
instance, the cumulative effect of so many underweight bars may mean boxes cannot be
packed as tightly as they should be, resulting in damage in transit. Loss is also incurred if the
bars are slightly above the mid-value. For instance, a surplus of three grams multiplied by
1,00,000 bars in 3 kilos of raw material, plus additional handling costs. the customer too may
suffer a loss. Taguchi, for instance, quotes the case of the person on a diet eating a product
which is a three grams heavier than anticipated.
Likewise, is some of the components of a car are above the mid-value the increased
weight may result in greater fuel costs.
The real weakness of the zero defects approach, however, is that in any batch of products,
a significant number will be close to the outer limits of the tolerance levels. Further, many of
the other components which comprise the finished product will be in a similar state. This can
play havoc with quality.
The consequences of variation in a system are potentially catarascopic. A jet aircraft
manufactured within the tolerance limits might contain a large proportion of components
which are virtually defective. The result is known as ‘tolerance stack-up’.
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Consistency reduces the probability of catastrophe ‘stack-up’ because components all
vary. In the same way, even if they are all off-target. Conversely a product which conforms to
plus or minus specifications is less robust, because the deviations are random and therefore
unpredictable.
1.12 SPEEDING UP THE DESIGN PROCESS
The Pressure : Product obsolescence is a major problem for many organizations. The
enormous pressure to innovate and market new products quickly means that the danger of
Ill-consisdered designs passing into production is high. The problem is exacerbated in a
phenomenon known as escalation. As Figure – 1.3 shows, costs increase exponentially once a
product passes from the design phase into testing and production. The whole organisation
becomes involved, finance is raised, advertising campaigns are planned equipment is purchased,
advance orders are taken, and so on. The process is extremely difficult to reverse and the longer
it continues the greater the probability of bad designs becomes bad products. The problem for
organisatoins, therefore, is how to innovate quickly but soundly.
COS
Conc R&D Pre-Prod Produ
FIGURE 1.3 COST BEHAVIOUR DURING DESIGN AND PRODUCTION
Marketing haste slowly
Exhorting designers to work faster or to cut corners is counter productive. Although a
‘ramped up’ organizational culture may help, the real solution is to recognize that whilst some
parts of the design process can be speeded up, other parts need to be given more time.
Concept design is the most important phase and the one which is least amenable to
pressure, at it requires originality and fresh thinking. They should be encouraged to feed their
intellect and imagination by undertaking travel, study visits and so forth, without the expectation
of an immediate payback. Further, they need to work in an atmosphere where mistakes are
regarded as progressive and where painstaking, high-quality work is valued.
The research and development phase focuses upon new materials and new processes
required to translate the design concept and ambitions into a workable model Product design
involves translating the model into detailed specifications and drawings. These latter phases of
the design process can be speeded up by;
Integration
Removing sources of delay
Concurrent planning
Each these is now discussed in turn.
Integration
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Integration involves the creation of interdisciplinary terms encompassing design,
manufacturing and marketing staffs. Engineers would develop the basic product. Once this was
complete, designers then added the so-called ‘wrap-round’. Then the manufacturing section had
to work out how to product it. Incorporating these three functions in one departments and
carrying them out simultaneously has reduced the lead time for new products by over one year.
Removing sources of delay
Over-control is a major source of delay, so:
Keep the brief clear and simple.
Minimize the amount of detail in design specifications
Ensure designers understand customer needs and production capabilities.
The purpose of a design brief should be to liberate designers. It should therefore be confined to
essentials, i.e. specifying a maximum of three or four variables.
Concurrent planning
Quality requires attention to all aspects of a product. Design must therefore consider a
wide range of issues, including:
Customer performance specifications
Design specifications
Manufacturing specifications
Sales specifications
These, too, should concentrate on essentials, those features which are important to the
customer.
Beware of specifying even essentials too tightly. Fine tolerances are rarely necessary and
only make the problem of controlling variability needlessly difficult.
Aim for ‘loose tolerances tightly enforced’, rather than ‘tight tolerances loosely enforced’.
If a customer insist upon tight tolerances, ask why he needs them. Rapid specifications
are often a power ploy by which to ‘screw down’ the supplier.
1.13 THE WORK PROCESS SYSTEM CONCEPT
Production is carried out by a multitude of work process system. Figure- 1.4 schematically
describers such a system with inflowing resources, transformation processes, and out flowing
products and services. Any productive system is embedded in an economic and social
environment with which it constantly interacts. In this context quality assurance has to be named
as one of the man subsystems of a process system.
Other subsystems are the capital and cash flow system, manpower planning, management
information, and decision making systems. These subsystems are conceptually and practically
interdependent and interactive. One can also distinguish work process systems with reference to
the managerial levels of responsibility in a corporate production system in which the plants,
branches and individuals jobs and operational systems are subordinated and integrated.
Work process systems are not restricted to manufacturing industries, where materials,
parts and suppliers are transformed into higher values goods. Practically any business or
enterprise uses various resources in order to sell its products and services in the market.
Therefore, retail stores, theaters, insurance agencies, and so on, are all to be considered as
productive systems.
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PROCESS
OUTPUT
INPUT
FIGURE : 1.4 WORK PROCESS SYSTEMS
1.14 CATEGORIES FOR WORK PROCESS SYSTEMS
Categories for work process systems that aid their conceptualization and design are, for
instance:
1. Custom built: One in which customers place their order with the producer or supplier
before actual production. This enables both partners to specify quality and other
conditions, to meet the customer’s particular requirements.
2. Repeat orders: One in which customers place an order ‘for an Item that is already
produced or fully designed and standardized.
3. Mass production: Product with standardized items differing form job shop production or
production of custom – made items that use intermittent production processes.
4. Projects: They describe production of large items with considerable complexity and
uniqueness.
5. Services: Production (provision) of services, normally with direct customer contact before
and during production. Such services industries include transportation, public services,
insurance, professional services, and the like.
These are the main types of productive systems as they occur in reality. Other differentiations
can be made such as between small and large businesses. Each type of system has certain
aspects in common, and these help to plan products and production more adequately.
Managers can orient themselves by common aspects of relevant types and thus simplify their
planning. Once the overall production has been properly established, the design of a suitable
quality assurance system is also greatly enhanced. Table 1.2 gives some examples of work
process systems quite familiar to us.
TABLE : 1.2 EXAMPLES OF WORK PROCESS SYSTEM
Work Process Major Inputs Assembly Major output
Systems
Electronic Components, Assembly T V set
assembly Sub-assembltes
Printing Original Copy Editing, Proof, Book
printing
Management in Corporate goals Planning, Directives,
general supervising, decisions, reports,
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recoding, information
analyzing
Quality assurance Quality Designing Satisfactory quality
specification; inspecting, training image
standards audit
1.15 PLANNING AND CONTROL OF WORK PROCESS
The planning and control work process more through the phases similar to those
described for planning cycles. The main phases are the system design, the startup, the
maintenance, and the termination. These phases describe the life cycle of a productive system. If
the productive system is associated with one particular product, as is usually the case in project
type productions, then the product life directly determines the productive system’s existence. If,
for instance, the quality of a directly determines the productive system’s existence. If, for
instance, the quality of a product builds a sound quality image in the market, then the
supporting productive system and its quality assurance subsystem are strengthened as well.
Effectiveness of planning and control enhances growth and length of life. In order to plan and
control a productive system, each case must be clearly defined and delineated. A useful starting
point is to determine the output (current or expected), because the purpose and objective define
the productive system. For instance, if the purpose is to assure the quality of a computer chip,
the product would have to be specified with regard to application, design criteria, and so forth,
along with quantity, delivery mode and timing, location of market, and production and resource
bases. By clarifying the output in terms of the material, time, and place dimensions, process
capacities and inputs can then also be determined.
Once the work process is conceptualized in general aggregate terms, the various
subsystems, such as the quality assurance system can be designed. Various aspects, such as the
management system, subsystem, plants, departments, and specific markets or customers, each
having a direct relationship to the expected output, help to define the quality assurance system
under consideration. There one can see that the systems view is a powerful management aid and
basic for any systematic planning and control of production and output quality.
Each phase of the system life demands specific planning and control activities and
management involvements. Forecasts of developments and control information induce frequent
review and correction in design, startup and other aspects of production. These phases can have
a multitude of complex detailed planning objects and problems. When phrase as questions,
problems are more easily understood. Actually asking the right question at the right time to the
right person, makes a manager and planner proficient.
1.16 SIGNIFICANCE OF QUALITY
Quality of a product or service to an organisation is as important as sound health to a
human-being. If a person is not feeling well, it will affect the human-body. Similarly, the quality
is a vital factor in shaping the future – well being of an organisatoin. The quality of a product
affects an organization’s reputation and image, productivity, costs, profitability and its liability to
the customers. These factors are discussed as follows:
(I) Reputation and Image:
Consumer is the king of the market. He will decide the fate, future of the organisatoins.
Consumers always desire qualitative products at a reasonable price prices. If an organisation
manufactures products as per the expectations of the customers, the quality of the products
will infuse image and reputation on the organisatoin. Therefore, the organisation has to
devote adequate attention to quality of the products will infuse image and reputation on the
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organisation. Therefore, the organisation has to devote adequate attention to quality of its
products and services, a failure in this regard can damage the organisatoin image and
perhaps lead to a decreased share of the market in case of a profit making organizations or
increased criticism or controls in the case of a government agency or non profit making
organisation.
(II) Costs
Quality of a product or service is generally associated with the costs incurred by the
organisation. Cost is also an important factor to increase the reputation, image and market
share of the organisation. Poor quality increases certain costs like scrap and rework costs,
replacement and repair costs after purchase, warranty costs, inspection costs, transportation
costs, payments to customers and discounts offered to customers to offset the inferior
quality. Thus costs are important factors affecting quality of a product or service.
(III) Productivity
Productivity generally refers to the relationship between and input and output.
Productivity and quality are often closely associated. Poor quality can adversely affect
productivity during the manufacturing process if parts are defective and have to be reworked, or
if an assembler has to try a number of parts before finding one that fits properly. Similarly, poor
quality in tools and equipment can lead to injuries and defective output which must be reworked
or scraped, thereby reducing the amount of usable output for a given amount of input.
(IV) Organization’s Liability
Organisation is liable to the customers for the quality of it’s product or service. Organisatoin
must pay special attention to their potential liability due to damages or injuries resulting fro
either faulty design or poor workmanship. Thus, a poorly designed or improper assembly of
steering arm on a car might cause the driver to loose control of the car. The organisatoin
liability costs can often be substantial, especially if large numbers of items are involved, as in
case in the automobile industry.
The above factors indicates the importance of quality. Therefore the management has to
devote adequate attention in designing the quality of the product, conformance of the
product to the plan and so on. If he organisation fails to do so, the poor quality of a product
and service will adversely affect the costs of products, reputation and image of the
organisation, productivity and profitability and the liability to the customers.
1.17 QUALITY OBJECTIVES
An objective is a statement of the desired result to be achieved within a specified time.
Whereas policies provide broad guidelines on company affairs, objectives define specific goals.
These goals then from the basis of detailed planning of activities. Objectives can be short range
(say, 1 year) or long range (say 5 years). The concept of management by objectives is widespread.
Under this concept, managers participate in establishing objectives, which are then reduced to
writing and become the basis planning for results.
Objectives may be created for breakthrough or control. There are many reasons why
companies create objectives for breakthrough:
1. They wish to attain or hold quality leadership.
2. They have identified some opportunities to improve income through superior fitness for
use.
3. They are losing market share through lack of competitiveness.
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4. They have too many field troubles – failures, complaints, returns – and wish to reduce
these as well as cutting the external costs resulting form guarantee charges, investigation
expense, product discounts etc.
5. They have identified some projects which offer internal cost-reduction opportunities, e.g.
improvement of process yields or reduction or scrap, rework, inspection, or testing.
6. They have a poor image with customers, vendors, the public, or other groups of outsiders.
7. To improve motivation and morale among the employees.
1.18 SETTING OF OBJECTIVES
Objectives serve as a guide for the decisions and actions necessary for their
accomplishment. They are further described in the form of sub goals and subtasks. At the same
time, objectives themselves are decisions arrived at after careful consideration of the need,
desirability, and feasibility for them in the given context.
Some questions to be answered are the following:
1. What should the elements in such a program be?
2. What published quality program standard should be complied with?
3. Should the program include design assurance or should it just be a defect-corrective
inspection system?
4. Should the program involve a radical change in current control practices and procedure (a
breakthrough), or a more gradual change and improvement?
5. What individual projects and project goals would lead to development and implementation
of such a quality control program?
6. Who should be in charge of such projects and who should participate?
7. What deadlines should be set for the accomplishment of the quality control program and
for the individual milestones leading up to it?
All these questions and many more, require answers that will lead to the formulation of
instrumental goals and task assignments. The quality related hierarchy of objectives, goals, and
tasks will follow the sequences.
This kind of structuring provides for systematic delegation of responsibilities from the top
down to the operational functions in a company, and thus for wide participation in determining
tasks and responsibilities, and for constructive communication and rational decision making.
Objectives for better quality and quality assurance can readily be understood by the company
staff, particularly when the need is obvious and the possibility of blaming others no longer exists.
Corporate and senior management can use quality assurance objectives for the purpose of
achieving general improvement in operations and staff cooperation. The new and innovative
quality control program will require major changes in production planning and control, new
purchasing procedures, introduction of quality and operation- related audits, and other
measures that will have impact on the general work life in the company.
Major Principles
There are may principles that should be observed when setting quality assurance
objectives:
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1. The need for greater quality assurance efforts should be convincingly demonstrated and
analyzed. Otherwise, objectives will not be perceived as important challenges arid the
probability for optimal attainment will be reduced.
2. Objectives must be realistic in view of the financial and human capacity of the company.
Ends and means need to be tested as conflicts between them usually create frustration
and disharmony. In working for quality assurance, such adversity can very quickly become
counter – productive.
3. Objectives must be clear, acceptable, and aligned with policy statements. Visible
management input and approval must exist at all times together and in compliance with:
Existing codes and standards
Facilitation of wide participation of all
Allowance for independent decisions and partial goals setting
Coordination of objectives, goals, and individual tasks for quality assurance.
Translation of goals and tasks into fair and workable performance standards.
Visible and meaningful recognition for goal achievement
Fair and sufficient support in case of difficulties.
Possible revision of tasks and goals and
Adaptability
Rules and Procedures
Most of the rules for sound goal setting seem to be common sense, although their
violation frequently leads to just [conditions in a company that breed poor workmanship and
poor quality, The style of goal setting for quality assurance, as well as for other outcomes and
achievements, depends on senior management policies arid the personalities involved. A chief
executive officer must see to it that laws, codes, regulations, and directives horn government
sources are complied with. On the other hand, they must also represent the interests of the
company and thus actively contribute to quality assurance, not only internally, but also externally.
For instance, many major customers impose compliance with published quality assurance
standards, such as ISO-9000, ISI and so on. Corporate officers have ample opportunity to
participate in the writing of these standards and to participate in setting quality assurance
objectives in their industry.
Methods and Practice
Methods for goal setting range from independent conception, formulation, and
communication by the boss to more participatory approaches. The latter type of approach
involves the operational staff by the use of quality circles or the more conventional project
treams. Through such dynamic goal setting at the grass roots levels, many problems obstructing
proper task achievement and workmanship can be overcome without direct senior management
involvement. At the same time, more serious and general problems and opportunities for
improvement in current quality assurance can be monitored and brought to the attention of
supervisory management. Active and comprehensive goal setting for better quality assurance
should proceed from the top to the bottom and, to be realistic, also in the reverse order.
The recently developed and most frequently applied institutional arrangement is the
formation of project teams, each having been assigned specific goals and tasks. Such project
teams allow direct input and participations of senior, as well as other, managerial and
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operational levels of staff. Depending upon the need and the environment, the formation and
execution of critical projects becomes a significant milestone in the improvement of quality.
In many cases, special tailor-made planning is needed for each key project. The exact
form of such a project is decided upon by a combination of the following:
1. Assessing the status quo.
2. Analyzing customers’ complaints
3. Analysis of major failures and defects, using histograms, and other similar methods.
4. Base line audits to determine strengths, weaknesses, and voids in current programmes.
5. Comparing the existing program with generic standards.
6. Deriving goals form existing corporate objectives and policies
7. Considering the setting of tasks and methods at the operator level.
1.19 QUALITY AND UNCERTAINTY
Uncertainty has several and simultaneous on quality, as will be studied later. Obviously, if
value added is quality, and if its is well defined, the measure of that value is what makes it
possible to distinguish between various qualities. When value added is uncertain or intangible,
its measurement is more difficult, and therefore quality is harder to express. In this sense,
uncertainty has an important effect on the definition, measurement and management of quality.
How does uncertainty affect? First, a consumer may not be able to observe directly and
clearly the attributes of a product. And, if and when he does so, this information is not always
fully known, nor true. Misinformation through false advertising, the unfortunate acquisition of
faulty products, and poor experience in product consumption are some of the problems that may
beset an uninformed consumer. Similarly, some manufactures, although well informed of their
products’ attributes, may not always fully control the production of their products. Some items
may be faulty, the outcome of a manufacturing process’ complexity and the inherent difficulties
in controls. As a result, uncertainty regarding a product’s qualities induces a risk which is
imposed on both the firm-producer and the buyer-consumer. This risk has a direct effect on the
valued added of quality, and is of course, a function of the presumed attitude towards risk. The
approaches used to manage these risks, both for the firm-producer and the consumer-buyer,
and how to share these risks, both for the firm-producer and the consumer-buyers, and how to
share these risks, is particularly important. Warranty contracts, services contracts, liability laws
and the statistical control of quality in a factory are some of the means available to manage these
risks, as we shall see throughout this book.
Perceived risk has been envisioned as consisting of two essential components:
consequences and uncertainty, for a consumer, uncertainty can be viewed as the ‘subjectively
measured probability of adverse consequences’. As such, we can postulate that the quality of a
product is inversely related to its risk. A non-risky product, meaning a product having desirable
consequences with large subjective probabilities, is a quality product. For example, if we buy a
part from some supplier, what would we consider quality? It may be several things, but generally
it will be defined in terms of an attribute of a part with desirable consequences, and little
variation (i.e. high probability). Why were Japanese and European cars at one time considered
quality product? Buyers had the subjective estimation that these cars would not fail and require
repairs, and with a high probability! In this sense, quality is consistent with an inductive
reasoning which is reinforced once consumption experience of the product is registered. For
example, Jacoby and Kaplan attempted to measure quality by asking ‘What is the likelihood that
there will be something wrong with an unfamiliar brand of XXXX or that it will not work
properly?’ Quality was meant then to be a perceptive attribute which can, or course, be
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influenced by the marketing mix, good management of the factory, post sales attention and
services. Ingene and Hughes claims that a brand is perceived as being risky and thereby of lower
quality) by a consumer if an only if that consumer is uncertain as to what level (of at least one
attribute about which he/she is concerned) will be obtained if the product is purchased)
Uncertainty regarding product quality has led to intensive legislation on product labeling
which seeks to protect consumers on the one band and to convey information on the other.
There are a number of important questions which may be raised by buyers and seller alike, for
example, the fat content of cheeses and hamburgers sold in supermarkets, the alcohol in wine as
we4ll as the origin of products. These do not always indicate quality. Some wine growers believe
that the alcohol content should not be put on the wine label. By doing so, alcohol is given an
importance and a relevance to wine quality which it does not, in their opinion, have. Cheeses, of
all sorts, vary over the year and, therefore, the fat content of the mild is really a relative measure
(to the time of the year in which it was produced as well as relative to the origin of the mild used
in its production). In the case of Normandy Camembert, there is further confusion since there are
not enough cows in Normally to produce even a fraction of the Camembert sold tinder this label!
In other words, even a label of origin can be misleading. In the early 1950, for example, some
Japanese products, suffering from a poor reputation, had a label of made in USA, meaning the
Japanese products, suffering from a poor reputation, had a label of made in USA, meaning the
Japanese city of USA. To simplify the labeling of products, colored labels are also used. A red
label for chickens in a supermarket is a mark of quality, but under such labels there can be wide
variety of chickens which need not have a uniform quality (even though they are all labeled with
the same color). In fact, a chicken ‘color’ may stand for similar origins, similar growing or
feeding conditions, or perhaps just cooperative marketing.
Although uncertainty is not a property which defines quality, the measurement and
perception of quality are directly affected by uncertainty, for this reason, an operational and
economic definition of quality (which is the relevant one for businesses) is necessarily sensitive
to uncertainty. Due to the importance of this topic, we shall return to it subsequently. Next, we
consider manufacturing quality, which seeks to define the attributes of quality by the
manufacturing processes. Such characterization is essential to appreciate the potential and the
limits of quality control in industrial and operations management.
1.20 QUALITY IN MANUFACTURING
Manufacturing quality, unlike the general concept of quality we sought to define above, is
well defined in terms of attributes which are associated to and required by a manufacturing
process to operate without any fault. In this sense, quality is a characteristic and a requirement
of the industrial apparatus. For example, a factory floor with machines that break down often,
machinery that is unable to operate at the required levels of precision, or uniformity of
operations, arid general manufacturing systems with a propensity to produce highly
heterogeneous quality products are an expression of a manufacturing unquality. Management of
operations and quality control are thus the means used to ‘produce’ and control quality in
manufacturing.
There may be several dimensions along which such manufacturing quality may be defined,
including:
1. The propensity to maintain the manufacturing process in control, i.e. operating according
to agreed on standards of manufacture.
2. The propensity of the manufacturing process to produce items or product faultlessly.
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3. The propensity to maintain (and or reduce) the manufacturing process variability, i.e. limit
process instabilities by maintaining the process repetitively.
Thus, agreed on standards, faultless production and repetitively and control of variations are
used to define manufactured quality, in practice, manufacturing quality is easier to measure
‘negatively’. In other words, it is a reflection of a negative performance (rather than a positive
one, which is, or should have been, the standard). As a result, the ideas underlying the
management of quality in manufacturing relate to the management of the process and not to
the design of the product. This measure of quality is defined in terms of characteristics which
are important and related to the management of the manufacturing process. In this sense,
the measurement of quality is also an incentive for the control of quality. Or course it is
possible, through appropriate integration of both product design and the manufacturing
process, to let one facet of quality management (its conception and design) affect the other
(the process of manufacturing the product). Although this is increasingly recognized as an
important activity known as ‘predictability’, or ‘concurrent engineering’, is has not yet fully
matured (albeit, it is the topic of intensive research today). In a conventional sense, a process
in control would evidently results in products of a better quality than a process which is not
control. As a result, by improving the controls, we will be able to increase the propensity to
manufacture products of better quality.
For example, in the manufacturing of certain high precision metallic items, there may be
many objective attributes which could be measured and tested for deviations from acceptable
manufacturing standards. These may include the location of holes, their sizes (which often
require extremely high precision), concentricity, symmetry, and so on. These attributes are
measured for the purpose of controlling the processes which are used in making up a
product! In other words, measurements (tests) are made to detect causes of malfunction
needed to control the manufacturing process. For these metallic parts, there may be many
cause which contribute both to defective manufacturing or to excessive variations from
manufacturing standards. Lack of geometric perfection, stress factors, materials stability, the
ambient temperature, lack of perfect rigidity, etc. may be some of these factors. The
measurement and detection of the sub-standard performance provides the incentive for
control and correction.
Thus, just as conceptual or design quality, manufacturing quality is a complex concept
which should be clearly understood before trying to manage it. A comparison of several
aspects of quality are given in Table: 1.3 to provide some further comparisons between
manufacturing and design quality.
TALE 1.3 DESIGN AND MANUFACTURING QUALITY
Design quality Manufacturing quality
Durability Reliability
Esthetics Conformance to standards
Attributes’ desirability Process variability
Objective performance Consistency
Intangibles Tangibles
A manufacturer concerned with the production of quality products or services uses various
tools, statistical and otherwise, as we shall see later on. Statistical tools are used in particular
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when uncertainty has an important effect on the manufacture of quality in such cases, poor
quality is usually produced due to variations and uncertainties regarding the process
operations and performance. When performance variations are totally random, unaccounted
fro by any malfunction or cause, they reflect a characteristic of the manufacturing process,
the type of materials used and the process at hand. When product quality or their attributers
to not deviate from a purely random pattern, the manufacturing process is said to be out of
control. In this sense, the management of quality in manufacturing consists of determining
departures from a state of perfect randomness. The techniques called Statistical Quality
Control (SQC) and Statistical Process Control (SPC) are used to elaborate and apply tests of
randomness of various sorts to measure and predict departments from this state of perfect
randomness.
The increased need to control statistical variations, and thereby the need to control a
manufacturing process and its environment, have been ushered in by production concepts
developed in the first industrial revolution. These concepts, although complex and numerous,
presume that production standards and producing up to these standards ore essential to
guarantee the substitutability of ports used in a moss production system. Taking
responsibility away from workers and their alienation at the beginning of the century in
particular has led to the necessity to control their work through work sampling and other
methods used to predict and manage the statistical variations which occur in manufacturing.
These basic tenets of quality management have recently been subject to scrutiny, motivated
by a concern for a broader view of quality management, a view which takes account of the
whole manufacturing system, distribution, service and business processes, and seeks to
produce quality rather than to control some process variations (although this is also an
important part of this broader view). This emerging approach is called Total Quality
Management. In addition, and more recently, a ‘quality trauma’ has been ushered in by the
increased power of consumers, and by the fact that there can not longer be any justification
economic. Managerial and technological for producing poor quality. Japanese inroads into
quality control techniques made in the last two decades have been an example to this effect
and it has led firms to re asses their priorities in terms of the control and management of
quality. Based on such premises, we can appreciate the inroads made towards improved
quality by corporate boards, and its integration into business strategies. Quality is Free
(Crosby) and Quality on the Line (Garvin) are samples of work which highlights a growing
concern for re-valuing and re-evaluating the place and contribution of quality in
manufacturing and its control.
As a result, basic and past tenets regarding quality in manufacturing have been questioned
and revised. For example, it is currently believed that:
Quality is not only a cost, it is also a potential benefit, a value added to the
manufacturer which can be translated into added sales and profitability. There are,
however, still difficulties in measuring the potential benefits of quality which are
essential in including managers to take the proper courses of action to improve quality.
Quality is not only process-specific but is total concept, involving everybody! This is
the message of Total Quality Control (TQC). In other words, the problem is not only the
control of statistical variations in a manufacturing process, but the basic question of
producing quality in its broadest sense.
In other words, the re-evaluation of quality in terms of its costs, tractability and
integration has created an opportunity to re-design and reposition quality, quality
improvement and control where they were always supposed to be this transformation has
of course brought quality to people to the organisatoin, to processes, to services and, in
the process, it is transforming production management both in design objectives and in
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operational procedures. For example, from a ‘robotics notion of people to one based far
more on motivation. For example, from ‘robotics notion of people to one based far more
on motivation and incentives to perform from de-responsibilization to responsabilization.
A reminder from Michelin’s workers’ book on profit sharing:
The care brought by each worker in his work is the essential capital of the factory:
Implies and recognizes (already prior to the turn of this last century) that quality is a
function of a worker’s involvement in the work process and the responsibility he is
assuming, not only with respect to his own work (i.e. his auto-control), but also with
respect to the collective (i.e. Total Control). In a practical sense, the reconciliation
concordance and coherence of ‘auto and collective controls’ underlie approaches to the
control of quality.
The emerging re-definitions of quality are of course leading to new objectives in
process and product design. Terms such as robustness are also becoming much more
fashionable and appropriate. A robust design will, for example, safeguard a standard
operating performance against departures from pre-specified conditions. In this vein, a
product’s quality cannot be assessed in terms of its performance in a laboratory
environment, but in the ‘real world’, while it is being used by people who may or may not
how best how to use the product. Then, robustness is a measures of the latitude of
conformance of the product to the user and not to that of the process. For these reasons
quality in manufacturing is a fast changing concept which today seeks greater robustness
in the definition of what we ought to look for to improve and produce quality products
and services.
The broader view of quality and the complexity of modern firms, combined with a
commensurate need to define measures of quality, have of course led to an expansion of
the dimensions along which the manufacture of quality ought to be considered.
Presenting an integrated view, Garvin suggests eight dimensions: Product performance,
Product Features, Reliability, Conformance, Durability, Serviceability, aesthetics and
Perceived quality. For the management of quality it is essential to translate these
dimensions into economic values and Costs of Quality (COQ). These will include direct and
indirect effects. Some internal costs we might consider include: Planning and Training
quality programmes; Inspection and Testing; Failure and Scrap and Rework-Repair;
Inventory added due to poor quality; Process and delay costs due to stoppages, Capacity
losses; Human relations related costs, External costs might include: Warranty and liability
costs; Servicing; Goodwill and sales; and finally, Costs due to regulatory agencies
interventions.
These costs, properly assessed and combined with the operational costs of
manufacture and the potential contributions of quality to the firm competitiveness,
provide notions of manufacture quality which must be understood and valued. In is
through such comprehension and valuation that we can affect every facet of the firm and
thereby make it possible for quality to become strategic and he managed. These problems
are of immense importance, so we shall return to their study in far greater detail in
subsequent chapters.
1.21 QUALITY AND SERVICES
Quality in services exhibit special characteristics. Some of these characteristics
include:
The quality of service generally involves not one but multiple services. For example, a
gas station provides several services beyond the supply (usually at a regulated price) of
fuel. Hotels provide a room and various associated services.
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