Introduction to Quality Chapter 1 Introduction to Quality

Modern Importance of Quality “The first job we have is to turn out quality merchandise that consumers will buy and keep on buying. If we produce it efficiently and economically, we will earn a profit, in which you will share.” - William Cooper Procter

What is Quality? "The totality of features and characteristics of a product or service that bears on its ability to satisfy given needs." "Meeting or exceeding customer expectations.

Quality is grounded on three core principles: focus on customers; participation and teamwork; and continuous improvement and learning. These are supported by the organizational infrastructure that includes: customer relationship management, leadership and strategic planning, human resources management, process management, and data and information management, as well as a set of management practices and tools.

Quality Assurance ...is any action directed toward providing customers with goods and services of appropriate quality.

Benchmarking Nordstrom vs. K-Mart L’ Avenue vs. La Caille Cliff Lodge vs. Motel 6 Aerie’s vs. Chuckarama John Nash vs. Ted Bundy John Chambers vs. Albert Dunlap Tom Brokaw vs. Randal Carlisle

History of Quality Assurance (1 of 2) Skilled craftsmanship during Middle Ages Industrial Revolution: rise of inspection and separate quality departments Statistical methods at Bell System Quality control during World War II Quality management in Japan

History of Quality Assurance (2 of 2) Quality awareness in U.S. manufacturing industry during 1980s: “Total Quality Management” Malcolm Baldrige National Quality Award (1987) Quality in service industries, government, health care, and education Current and future challenge: keep progress in quality management alive

Contemporary Influences on Quality Parterning Learning systems Adaptability and speed of change Environmental sustainability Globalization Knowledge focus Customization and differentiation Shifting demographics

Definitions of Quality Transcendent definition: excellence Product-based definition: quantities of product attributes User-based definition: fitness for intended use Value-based definition: quality vs. price Manufacturing-based definition: conformance to specifications

Quality Perspectives transcendent & product-based user-based Customer Distribution products and services needs transcendent & product-based user-based manufacturing- based value-based Marketing Design Manufacturing Information flow Product flow

Customer-Driven Quality “Meeting or exceeding customer expectations” Customers can be... Consumers External customers Internal customers

Total Quality People-focused management system Focus on increasing customer satisfaction and reducing costs A systems approach that integrates organizational functions and the entire supply chain Stresses learning and adaptation to change Based on the scientific method

Principles of Total Quality Customer and stakeholder focus Participation and teamwork Process focus and continuous improvement ...supported by an integrated organizational infrastructure, a set of management practices, and a set of tools and techniques

Customer and Stakeholder Focus Customer is principal judge of quality Organizations must first understand customers’ needs and expectations in order to meet and exceed them Organizations must build relationships with customers Customers include employees and society at large

Participation and Teamwork Employees know their jobs best and therefore, how to improve them Management must develop the systems and procedures that foster participation and teamwork Empowerment better serves customers, and creates trust and motivation Teamwork and partnerships must exist both horizontally and vertically

Process Focus and Continuous Improvement A process is a sequence of activities that is intended to achieve some result

Continuous Improvement Enhancing value through new products and services Reducing errors, defects, waste, and costs Increasing productivity and effectiveness Improving responsiveness and cycle time performance

Deming’s View of a Production System Suppliers of materials and equipment Receipt and test of materials Design and Redesign Consumer research A B C D Production, assembly inspection Tests of processes, machines, methods Distribution Consumers INPUTS PROCESSES OUTPUTS

Learning The foundation for improvement … Understanding why changes are successful through feedback between practices and results, which leads to new goals and approaches Learning cycle: Planning Execution of plans Assessment of progress Revision of plans based on assessment findings

Infrastructure, Practices, and Tools Leadership Strategic HRM Process Data and information Planning mgt. management Practices Performance Training appraisal Tools Trend chart

TQ Infrastructure Customer relationship management Leadership and strategic planning Human resources management Process management Data and information management

Competitive Advantage Is driven by customer wants and needs Makes significant contribution to business success Matches organization’s unique resources with opportunities Is durable and lasting Provides basis for further improvement Provides direction and motivation Quality supports each of these characteristics

Quality and Profitability Improved quality of design Improved quality of conformance Higher perceived value Higher prices Lower manufacturing and service costs Increased market share Increased revenues Higher profitability

Evidence that Quality Impacts Business Results General Accounting Office study of Baldrige Award applicants Baldrige stock study (see www.quality.nist.gov) Hendricks and Singhal study of quality award winners Performance results of Baldrige Award winners

GAO TQ Model Product and service quality Customer satisfaction Leadership for continuous improvement Quality systems and employee involvement Competitiveness Organization benefits Reliability On-time delivery Error/defects Overall satisfaction Customer retention Complaints Costs Cycle time Turnover Satisfaction Safety & health Productivity Market share Profits

Three Levels of Quality Organizational level: meeting external customer requirements Process level: linking external and internal customer requirements Performer/job level: meeting internal customer requirements

Quality and Personal Values Personal initiative has a positive impact on business success Quality begins with personal attitudes Quality-focused individuals often exceed customer expectations Attitudes can be changed through awareness and effort (e.g., personal quality checklists)