2Chapter Overview Slide 1 of 2 Recognizing Different Perspectives on QualityWhat is Quality?Differing Perspectives on QualityIs Quality Management Its Own Functional Discipline?The Three Spheres of Quality
3Chapter Overview Slide 2 of 2 Other Perspectives on QualityArriving at a Common Understanding of Quality using a Contingency Perspective of Quality
4The reasons perceptions differ is 1. Backgrounds2. Tastes and preferences3. Attitudes and feelings
5Recognizing Different Perspectives on Quality Slide 1 of 3 There are many different definitions and dimensions of quality.For the present, you should view quality as a measure of goodness that is inherent to a product or service.Employees working for the same firm often view quality differently as illustrated in the next slide.
6Recognizing Different Perspectives on Quality Slide 2 of 3 Different View of Quality that can Exist in the Same FirmEngineeringMarketingAccountingA marketing executive might associate quality with quick design timeA product engineer might associate quality with product designAn accountant might associate quality with low product cost
7Recognizing Different Perspectives on Quality Slide 3 of 3 As Illustrated in the Proceeding Slide, Perceptions on Quality Can VaryIn order to communicate effectively about quality, managers need to recognize that differences in perceptions of quality exist.
8Recognizing Different Perspectives on Quality Page 4A Closer look at Quality 1.1Which are Better, CDs or LPs?What is clear is that the meaning of quality varies drastically from person to person.It is left to each of us to decide.Which do we like best?
9Recognizing Different Perspectives on Quality Perceptions affect every aspect of our world – including the business world.Managers need to recognize that differences in perceptions of quality exist.Many managers have strong opinions about what quality is.These opinions can be variance with the beliefs of the majority of their customers.This may hurt the competitiveness.
10Product Quality Dimensions (David Garvin) Slide 1 of 2 1. Transcendent DefinitionQuality is something that is intuitively understood but nearly impossible to communicate such as beauty or love.2. Product-Based DefinitionQuality is found in the components and attributes of a product.3. User-Based DefinitionIf the customer is satisfied, the product has good quality.
11Product Quality Dimensions Slide 2 of 2 4. Manufacturing-Based DefinitionIf the product conforms to design specifications, it has good quality.5. Value-Based DefinitionIf the product is perceived as providing good value for the price, it has good quality.
13Garvin’s Product Quality Dimensions (David Garvin) Slide 2 of 4 1. PerformanceRefers to the efficiency with which a product achieves its intended purpose.2. FeaturesAttributes of a product that supplement a product’s basic performance.3. ReliabilityThe propensity for a product to perform consistently over its useful design life.
14Garvin’s Product Quality Dimensions Slide 3 of 4 4. Conformance ( specifications and tolerance)Numerical dimensions for a product’s performance, such as capacity, speed, size, durability, color, or the like.( easily quantified and difficult for a service to conform)5. DurabilityThe degree to which a product tolerates stress or trauma without failing.
15Garvin’s Product Quality Dimensions 6. ServiceabilityEase of repair easily and cheaply. If service is rapid, courteous, easy to acquire, and competent, then the product have good serviceability.7. AestheticsSubjective sensory characteristics such as taste, feel, sound, look, and smell. We measure quality as the degree to which product attributes are matched to consumer preferences.
16Garvin’s Product Quality Dimensions Slide 4 of 4 8. Perceived QualityQuality is as the customer perceives it. Customers imbue products and services with their understanding of their goodness. This is perceived quality.
17Quality DimensionsThe Garvin list of quality dimensions, although it is the most widely cited and used, is not exhaustive.Carol King identified dimensions of service quality such as responsiveness, competence, access, courtesy, communication, credibility, security, and understanding.
18Service QualityService quality is even more difficult to define than product quality.This often results from wide variation created by high customer involvement.The example is fountain pen and food service.
19Service Quality Dimensions ( Table 1.2) Slide 1 of 3 ( See Chapter 8 ) Parasuraman, Zeithamel, and Berry’s ( PZB) Service Quality Dimensions1. Tangibles6. Availability2. Service Reliability7. Professionalism8. Timeliness3. Responsiveness4. Assurance9. Completeness5. Empathy10. Pleasantness
20Service Quality Dimensions Slide 2 of 3 1. TangiblesInclude the physical appearance of the service facility, the equipment, the personnel, and the communication material.2. Service ReliabilityDiffers from product reliability in that it relates to the ability of the service provider to perform the promised service dependably and accurately.
21Service Quality Dimensions Slide 3 of 3 3. ResponsivenessThe willingness of the service provider to be helpful and prompt in providing service.4. AssuranceThe knowledge and courtesy of employees and their ability to inspire trust and confidence.
22Service Quality Dimensions 5. Empathythe customer desires caring, individual attention paid to customers by the service firm.
23Service Quality Dimensions 6. There are several other dimensions of service quality ( please see above).7. It should be noted that service design strives to address these different service dimensions simultaneously.8. It is not sufficient for a service firm to provide only empathy if responsiveness and service reliability are inadequate.
24Why Does It Matter That Difference Definitions of Quality Exist? Understanding that definitions and dimensions of quality exist allows measures to be taken to provide a better basis for communication and planning in a firm.
25Why Does It Matter That Difference Definitions of Quality Exist? By sharing a common definition of quality, each department within a company can work toward a common goal.Understanding the multiple dimensions of quality desired by customers can lead to improved product and service design.HP embarked on a “customer one-on-one” program that emphasized customer interaction with production workers.
26Differing Functional Perspectives on Quality One of the important determinants of how we perceive quality is the functional role we fulfill organizationally.It is difficult to communicate with information systems users and internal managers for several reasons.User system requirements differ from analyst system requirements.
27Differing Functional Perspectives on Quality This difference in the nature of the work performed by users and analyst causes them to see quality issues differently.Differences between users and analysts are only one instance of different perspectives created by functional differences.Firm must constantly improve their communication.
28Differing Functional Perspectives on Quality Recognizing fundamental differences between difference function view quality is an important first step in understanding and resolving problems associated with mismatches of quality perceptions within organization.Experience with cross-functional teams has been difficult for many firms because of poor communication skills among team members.
29Differing Functional Perspectives on Quality An Engineering PerspectiveAn Operations PerspectiveA Strategic Management PerspectiveA Marketing PerspectiveA Financial PerspectiveThe Human Resources Perspective
30Engineering Perspective on Quality Slide 1 of 4 Nature of Engineering PerspectiveEngineers are interested in applying mathematical problem solving skills and models to the problems of business and industry – Operational Research.R. A. Fisher expanded the field of mathematical statistics to problems related to variation experienced in the production area.Two of the major emphases in engineering are the areas of product design and process design.
31Engineering Perspective on Quality Nature of Engineering Perspective- More and more engineers are being hired into services firms requiring a strong technical component.- Two of the major emphases in engineering are the areas of product design and process design.
32Engineering Perspective on Quality Slide 2 of 4 Product Design EngineeringInvolves all of those activities associated with developing a product from concept development to final design and implementation.The next slide ( Figure 1.1) demonstrates the six steps in the engineering life cycle for the design of products.
33Engineering Perspective on Quality Slide 3 of 4 Design Life Cycle ( Figure 1.1)IdeaGenerationPrototype IterationsPreliminaryDesignPrototypeDevelopmentFinalDefinitionProductDesign &EvaluationImplementation
34Engineering Perspective on Quality Product Design EngineeringConcurrent engineering refers to the simultaneous performance of product and process design activities.Engineers have also applied statistical thinking to the problem of reliability.Reliability engineers use probability theory to determine the rate of failure a product will experience over its useful life.
35Engineering Perspective on Quality Slide 4 of 4 Related ConceptsLife TestingIt is a facet of reliability engineering that concerns itself with determining whether a product will fail under controlled conditions during a specified life.If a component has a relatively high probability for failure that will affect the overall function of a product, then redundancy is applied so that backup system can take over for the failed primary system.
36Engineering Perspective on Quality Related ConceptsAnother engineering-related contribution to quality management is the field of Statistical Process Control (SPC).SPC is concerned with monitoring process capability ( meet specification) and process stability ( only exhibit random or common variation).The control process as specified by Shewhart is shown in Figure 1.2.
37Engineering Perspective on Quality Statistical Method from the Viewpoint of Quality Control by Shewhart (Figure 1.2)1. Specify Hypothesis3. Inspect Data for Consistency with Hypothesis2. Produce Data by Performing an Experiment
38Engineering Perspective on Quality In summary, the engineering view of quality is technically oriented, focusing on statistics and technical specification.Only recently have engineers begun to interact with customers in meaningful ways.
39Operations Perspective on Quality Slide 1 of 6 Nature of Operations PerspectiveThe operations management view of quality is rooted in the engineering approach.
40Operations Perspective on Quality Nature of Operations PerspectiveLike engineers, operations managers are very concerned about product and process design. However, rather than focusing on only the technical aspects of these activities, operations concentrates of the management of these activities.
41Operations Perspective on Quality Nature of Operations Perspective- Today, operations management has developed into an integrative field, combining concepts from engineering, operations research, organizational theory, organizational behavior, and strategic management.
42Operations Perspective on Quality Slide 2 of 6 Systems ViewOperations management (OM) utilizes the systems view that underlies modern quality management thinking ( see Figure 1.3).The systems view involves the understanding that product quality is the result of the interactions of several variables such as machines, labor, procedures, planning, and management.
43The Conversion Systems Model of Operation Management ( Figure 1.3) Operations Perspective on Quality-- The Systems View of Operation Management Slide 3 of 6The Conversion Systems Model of Operation Management ( Figure 1.3)PlanningOrganizingInputsConversionProcessOutputsCustomerProcessControlControllingCustomer Feedback
44Operations Perspective on Quality-- The Systems View of Operation Management This systems view focuses on interactions between the various components that combine to produce a product or service.The systems view also focuses management on the system as the cause of quality problems.
45Operations Perspective on Quality Slide 4 of 6 Operations/Marketing InterfaceIn recent years, a major advance in operations management has been the improved understanding of the operations/marketing interface.The interface has resulted in an increased focus on the customer.
46Operations Perspective on Quality Operations/Marketing Interface- This has helped operations manager externalize their views to the customer as well by making the customers part of the design process.
47Operations Perspective on Quality Slide 5 of 6 Strategic View of Operations ManagementAmong the recent advances in operations management has been a migration towards a more strategic view.Ferdows and Demeyer linked this strategic view of operations management to quality management by proposing the model shown in Figure 1.4.
48Operations Perspective on Quality--Strategic View of Operations Management An Operations Management Competence Model --The Sand Cone Model ( Figure 1.4)Cost EfficiencySpeedDependabilityQuality
49Operations Perspective on Quality--Strategic View of Operations Management This strategic view of OM to quality management identified quality as base on which lasting improvement in other competitive dimensions established.This strategic view has also led to a better understanding of the relationship between quality and other competitive variables such as profitability, cost leadership, and operational success.
50OM has elevated quality management as a key area of business study. Operations Perspective on Quality--Strategic View of Operations ManagementOne common complaint among critics of operations management is that too much credence is given to fads of the day rather than honestly improving the fundamentals of the business.OM has elevated quality management as a key area of business study.
51Strategic Management Perspective on Quality Slide 1 of 3 Nature of the Strategic Management PerspectiveWhen the concept of strategic planning first arose practitioners treated quality-related strategic planning as if it were a separate exercise from firm-level strategic planning.However, we soon realized that quality management, to become pervasive in a firm, needed to be included in all of the firm’s business practices, including strategic planning.
52Strategic Management Perspective on Quality Company strategies are rooted in the building blocks of mission and core values.An organization’s mission states why the organization exists.The core values of an organization refers to guiding operating principles that simplify decision making in the organization.
53Strategic Management Perspective on Quality Companies go to great effort to establish, communicate, and reinforce a sense of mission and values in an organization, because mission and values strongly influence organizational culture.Organizational culture is often seen as a major determinant to the successful implementation of quality improvement.The quality movement has greatly influenced strategy process in recent years.Figure 1.5 shows a generic strategic planning process and its components.
54Strategic Management Perspective on Quality Slide 2 of 3 A Generic Strategic Planning Process ( Figure 1.5)Firm Missionand GoalsExternalAnalysisInternalAnalysisStrategicOptionsBusiness LevelStrategyCorporate LevelStrategyOperationalSubplansOrganizationalDesignOrg. RewardSystemsConflict Politicsand ChangeStrategic AlignmentBetweenStructure and Goals
55Strategic Management Perspective on Quality Slide 3 of 3 Goal of Strategic Quality PlanningThe ultimate goal of strategic quality planning is to aid an organization to achieve sustainable competitive advantage.
56Strategic Management Perspective on Quality In many markets, like the auto industry, it is becoming difficult to sustain a competitive advantage based on quality alone.The quality/cost combination can be used as an order winner.Madu and Kuei propose a strategy process based on plan-do-check-act (see Figure 1.6).
57Strategic Management Perspective on Quality Page 15, Figure 1.6 A Plan-Do-Check-Act Approach to Strategic Quality Planning
58Strategic Management Perspective on Quality As quality has become integral to competitiveness, strategic planning for quality has become more important.Research shows that quality is still the major competitive concern of CEOs.Quality Highlight 1.1 (page 16) show how General Electric has made quality a key strategic imperative.
59Marketing Perspective on Quality In a trend known as relationship management , marketing has directed its attention toward satisfying the customer and delivering value to the customer.Studies show that the value of the loyal customer is much greater than an individual transaction.If all customers are satisfied, sales increase exponentially!This increases the importance of high levels of customer service and after-sales support.
60Marketing Perspective on Quality Slide 1 of 3 Nature of Marketing PerspectiveMarketing efforts are often focused on managing perceptions of quality.The primary tools for influencing customer perceptions of quality are price and advertising.
61Marketing Perspective on Quality The link between price and quality could be significant if all products were priced based on cost of materials and production only.The relationship between advertising and quality is not as straightforward as one would hope.Marketing is also concerned about systems.The marketing system involves the interactions between the producing organization, the intermediary, and the final consumer ( see Figure 1.7).
62Marketing Perspective on Quality Slide 2 of 3 A Marketing System ( Figure 1.7)OrganizationOfferingPaymentIntermediaryOfferingPaymentOfferingPaymentCustomer
63Marketing Perspective on Quality Because of the relationship, it is often very difficult for firms and organizations to agree on who the customer is.Although it might always seem obvious who the customer is to the casual observer, it is not always clear to those who are involved with the business.
64Marketing Perspective on Quality Slide 3 of 3 Focus on ServiceAnother important contribution of the marketing perspective has been the focus on service.This focus is on service at the time of the transaction and after-sales support.Customer service surveys are important tools for assessing the multiple dimensions of quality.
65Marketing Perspective on Quality The role of marketing in design has been to bring the voice of the customer into the design process.Customer service surveys are important tools for assessing the multiple dimensions of quality.
66Marketing Perspective on Quality The marketing perspective on quality is unique because the customer is the focus of marketing-related quality improvement.In trying to satisfy customer needs, marketing often wants to develop specialized products for different customers to perfectly satisfy customer needs.This can make life more difficult for producers.
67Financial Perspective on Quality Slide 1 of 4 Nature of the Financial PerspectiveOne of the most commonly asked questions about quality management is “will it pay us financial benefits?”The Answer to this question is an unqualified”maybe”.Management was pursuing quality improvement as a means of reducing waste and increasing profitability.
68Financial Perspective on Quality Nature of the Financial Perspective- Implemented correctly, improved quality reduce waster and can lead to reduce cost and improved profitability.- However, these returns tend to be long term rather than short term.
69Financial Perspective on Quality Nature of the Financial PerspectiveW. Edwards Deming made the first theoretical attempt to link quality improvements to financial results through the “Deming Value Chain.” ( see Figure 1.8)
70Financial Perspective on Quality Slide 2 of 4 The Deming Value Chain ( Figure 1.8)ImproveQualityCost decrease( see next slide)ProductivityImprovesCapturetheMarketStay inBusinessProvide Jobsand More Jobs
71Financial Perspective on Quality--The Deming Value Chain ( Figure 1.8) - Deming linked quality improvement to reduction of defects and improved organizational performance.- He also stressed quality as a way to increase employment.- Cost decrease because of less rework, fewer mistakes, fewer delays, snags; better use of machine-time and materials
72Financial Perspective on Quality The goal of finance is to maximize return for a given level of risk.Juran stated that “the language of management is money.”One way to translate quality concerns is to identify and measure the costs of quality.Trade-off and break-even analyses can be performed using the various costs of quality.
73Financial Perspective on Quality The relationship between quality improvement and financial success is confounded by several intervening variables.Top management involvement that is limited to lip service often results in great expenditure, and great effort, but eventually failure.The pursuit of quality does not safeguard a company against bad management.
74Financial Perspective on Quality Another concept that affects financial officers’ perceptions of quality improvement is the law of diminishing marginal returns.
75Financial Perspective on Quality Slide 3 of 4 Law of Diminishing Marginal ReturnsAccording to this law, there is a point at which investments in quality improvement will become uneconomical.The figure on the next slide ( Figure 1.9) shows a quadratic economic quality level model.We will resolution this issues for chapter 4.
76Financial Perspective on Quality Slide 4 of 4 Basic Economic Quality Level Model ( Figure 1.9)CostTotal Quality Costs = Sum of Losses and CostsMinimumCostLosses due to poor qualityCosts of Improving QualityOptimum Quality LevelQuality
78Financial Perspective on Quality According to this law, the pursuit of higher levels of quality will result in higher expenditures.To invest beyond the minimum cost level will result in non-economic decisions.In summary, the financial perspective on quality relies more on quantified, measurable, result-oriented thinking.
79Human Resource Perspective on Quality Slide 1 of 3 Nature of Human Resource PerspectiveUnderstanding the human resource perspective on quality is essential as it is impossible to implement quality without the commitment and action of employees.
80Human Resource Perspective on Quality Nature of Human Resource Perspective- Although leadership is an important antecedent to successful quality efforts, the involvement and participation of employees is just as key.
81Human Resource Perspective on Quality Slide 2 of 3 Related ConceptsEmployee EmpowermentEmpowering employees involves moving decision making to the lowest level in the organization.The topic of empowerment is closely related to Organizational Design.Quality management flourishes where the workers’ and the company’s needs are closely aligned.
82Human Resource Perspective on Quality Related ConceptsJob AnalysisInvolves collecting detailed information about a particular job.The information is used to define a job description that is used in setting pay levels.
83Human Resource Perspective on Quality Training allows firms to standardize the approaches their employees use in solving unstructured problems.Vertical deployment of quality management – top manager and low-ranking employees within a department will use similar processes for solving problems.Horizontal deployment of quality management – Different departments and units within a firm will use similar approaches to solving problems,
84Human Resource Perspective on Quality Slide 3 of 3 Related Concepts (continued)360-Degree EvaluationHuman resources departments typically administer and oversee performance appraisal and evaluation.Although some critics , such as Deming , have found this system ineffective ,many companies believe performance evaluations are a key method for motivating employees.
85Human Resource Perspective on Quality Related Concepts (continued)360-Degree EvaluationA performance measurement system in which an employee’s peers, supervisors, and subordinates are involved in evaluating the worker’s performance.This approach seems to be effective in improving teaching performance.
86Human Resource Perspective on Quality Related Concepts (continued)Total Quality Human Resource Management (TQHRM)Table 1.3 shows differences between traditional HR and TQHRM.TQHRM involves many of the concepts of quality management to provide a more supportive and empowered environment.
87Human Resource Perspective on Quality Table 1.3 HRM versus TQHRMTraditional HRM TQHRMUnilateral roleCentralizationPullAdministrativeConsulting roleDecentralizationReleaseDevelopmentalProcessCharacteristicsContentCharacteristicsNomotheticCompartmentalizedWorker-orientedPerformance measuresJob-basedPluralisticHolisticSystem-orientedSatisfaction measuresPerson-based
88Is quality management its own functional discipline? Wall Street Journal reveal job openings for quality managers and engineers.The role of these departments and specialists are changing in the new century of quality.Historically, the quality management department performed a policing function in the firm.Quality managers will responsible for quality conformance and spent their time ferreting out causes of defects.
89Is quality management its own functional discipline? In the late 1950s, Armand Feigenbaum and others showed the limitations of this approach.The movement began toward the total involvement of employees spawning total quality management (TQM).With total involvement, the role of the quality department moved from a technical, inspection role to a supportive training and coaching role.
90Is quality management its own functional discipline? As a manager or a quality specialist, you will be ask to either arrange or perform quality-related training.The ability to conduct effective training and to facilitate teams are important tools for the quality professional.
91Is quality management its own functional discipline? Is quality management its own discipline? Yes and no.Consultants, quality engineers, trainers, coaches, and managers are still needed.A strong knowledge of quality is best coupled with technical experts in other areas such as materials management, finance, accounting, operations management, human resources management, strategy, industrial engineering, or myriad other disciplines.
92The Three Spheres of Quality One way to conceptualize the field of quality management is known as three spheres of quality.These spheres are quality control, quality assurance, and quality management, and their functions overlap as seen in Figure 1.10.
93The Three Spheres of Quality Slide 1 of 4 ( Figure 1.10) Quality ManagementQuality AssuranceQuality Control
94The Three Spheres of Quality Slide 2 of 4 Quality ControlThe control process is based on the scientific methods.Includes phases of analysis, relation, and generalization.Activities relating to quality control include:Monitoring process capability and stabilityMeasuring process performanceReducing process variabilityOptimizing processes to nominal measuresPerforming acceptance samplingDeveloping and maintaining control charts
95The Three Spheres of Quality Slide 3 of 4 Quality AssuranceRefers to activities associated with guaranteeing the quality of a product or service.These activities are design-related.Quality control is reactive rather than proactive by detecting quality problems after they occur.The best way to assure quality is in the design of product, service, and processes.
96The Three Spheres of Quality Quality Assurance- Quality assurance activities include tasks such as:Failure mode and effects analysisConcurrent engineeringExperimental DesignProcess improvementsDesign team formation and managementOff-line experimentationReliability/durability product testing
97The Three Spheres of Quality Slide 4 of 4 Quality ManagementThe management processes that overarch and tie together the control and assurance activities make up quality management.Quality Highlight 1.2 ( see page 24) is an example of a company with effective quality management.Quality is the responsibility of all management, not just quality managers.
98The Three Spheres of Quality Quality Management- For this reason, a variety of managers, supervisors, and employees are involved in quality management activities such as next slide.
99The Three Spheres of Quality Activities of Quality Management- Planning for quality improvement- Creating a quality organizational culture- Providing leadership and support- Providing training and retraining- Designing an organizational system that reinforces quality ideals- Providing employee recognition- Facilitating organizational communication
100Other Perspectives on Quality Slide 1 of 2 The Value-Added Perspective on QualityA customer-based perspective on quality that is utilized by services, manufacturing, and public sector organizations involves the concept of value.Involves a subjective assessment of the efficacy of every step of the process for the customer.
101Other Perspectives on Quality The Value-Added Perspective on Quality- A value-added activity can be pinpointed by asking, “would this activity matter to the customer?”- A value-added activity will have economic value to the customer.
102Other Perspectives on Quality Slide 2 of 2 Cultural Perspectives on QualityInternational marketers have long noted that there are differences in tastes and preferences between cultures and nations.As a result, approaches to quality improvement may differ across culture.
103Other Perspectives on Quality Cultural Perspectives on QualityIt is not so obvious that approaches to quality improvement may differ according to culture.Cultures that are more class-conscious or command-and-control oriented might have trouble delegating decision making to lower levels of employees.
104Contingency Approach to Quality Arriving at a Common Understanding of Quality Using a Contingency ApproachContingency theory presupposes that there is no theory or method for operating a business that can be applied in all situations.As a result, a coherent quality strategy will need to address key environmental variables.