© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.. 1 Introduction to Quality

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 2 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 Quality, productivity, and cost remain imperatives for modern organizations.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Key Idea Building—and maintaining—quality into an organization’s goods and services, and more importantly, into the infrastructure of the organization itself, is not an easy task.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 4 Quality Assurance...is any planned and systematic activity directed toward providing customers with goods and services of appropriate quality, along with the confidence that products meet consumers’ requirements.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 5 History of Quality Assurance (1 of 3) Skilled craftsmanship during Middle Ages Industrial Revolution: rise of inspection and separate quality departments Early 20 th Century: statistical methods at Bell System Quality control during World War II Post-war Japan: evolution of quality management as promoted by Deming and Juran

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 6 History of Quality Assurance (2 of 3) US quality crisis around 1980; growth of product quality awareness in manufacturing industries Quality as a management discipline: from “Little Q” to “Big Q” – emergence of Total Quality Management Malcolm Baldrige National Quality Award (1987) Disappointments and criticism

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 7 History of Quality Assurance (3 of 3) Emergence of quality management in service industries, government, health care, and education Evolution of quality to the broader concept of performance excellence Growth and adoption of Six Sigma Current and future challenge: continue to apply the principles of quality and performance excellence. Quality is “a race without a finish line.”

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 8 Key Idea Although quality initiatives can lead to business success, they cannot guarantee it, and one must not infer that business failures or stock price dives are the result of poor quality.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 9 Contemporary Influences on Quality Globalization Social responsibility New dimensions of quality Aging population Health care Environmental concerns 21 st century technology

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Defining Quality Perfection Consistency Eliminating waste Fast delivery Compliance with policies and procedures Providing a good, usable product Doing it right the first time Delighting or pleasing customers Total customer service and satisfaction 10

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 11 Formal 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

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 12 Quality Perspectives Customer Distribution products and services needs transcendent & product-based user-based manufacturing- based value-based Marketing Design Manufacturing Information flow Product flow

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 13 Key Idea Because individuals in different business functions speak different “languages,” the need for different views of what constitutes quality at different points inside and outside an organization is necessary to create products of true quality that will satisfy customers’ needs.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14 Customer-Driven Quality “Meeting or exceeding customer expectations” Customers can be... Consumers External customers Internal customers

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 15 Total Quality Principles – foundation of the philosophy Practices – activities by which principles are implemented Techniques – tools and approaches to make practices effective

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 16 Principles of Total Quality Customer and stakeholder focus Employee engagement and teamwork Process focus supported by continuous improvement and learning

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 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

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 18 Key Idea To meet or exceed customer expectations, organizations must fully understand all product and service attributes that contribute to customer value and lead to satisfaction and loyalty.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 19 Employee Engagement and Teamwork Employees know their jobs best and therefore, how to improve them Management must develop the systems and procedures that foster participation Empowerment better serves customers, and creates trust and motivation Teamwork and partnerships must exist both horizontally and vertically

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 20 Key Idea In any organization, the person who best understands his or her job and how to improve both the product and the process is the one performing it.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 21 Process Focus and Continuous Improvement A process is how work creates value for customers Processes transform inputs (facilities, materials, capital, equipment, people, and energy) into outputs (goods and services) Most processes are cross-functional

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 22 Key Idea A process is a sequence of activities that is intended to achieve some result

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Process Versus Function 23

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 24 Continuous Improvement Incremental changes as well as larger, rapid improvements. Examples: Enhancing value through new products and services Reducing errors, defects, waste, and costs Increasing productivity and effectiveness Improving responsiveness and cycle time performance

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 25 Key Idea Major improvements in response time may require significant simplification of work processes and often drive simultaneous improvements in quality and productivity.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 26 Deming’s View of a Production System Suppliers of materials and equipment Receipt and test of materials Design and Redesign Consumer research ABCDABCD Production, assembly inspection Tests of processes, machines, methods Distribution Consumers INPUTS PROCESSES OUTPUTS Feedback

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 27 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

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 28 TQ Practices Strategic planning and design of organizational and work systems Customer engagement and knowledge acquisition Workforce management Process management Information and knowledge management Leadership

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. TQ Techniques Statistical methods Visual aids for problem solving, such as flowcharts Techniques specific to quality assurance activities, such as control charts, measurement systems analysis, reliability models, and so on. 29

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 30 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

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 31 Quality and Profitability Improved quality of design Higher perceived value Increased market share Higher prices Increased revenues Improved quality of conformance Lower manufacturing and service costs Higher profitability

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 32 Key Idea Considerable evidence exists that quality initiatives positively impact bottom-line results.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 33 Quality and Business Results Studies General Accounting Office study of Baldrige Award applicants Hendricks and Singhal study of quality award winners Performance results of Baldrige Award recipients

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 34 Key Idea An organization that is committed to total quality must apply it at three levels: the organizational level, the process level, and the performer/job level.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 35 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

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 36 Quality and Personal Values Personal initiative has a positive impact on business success Quality-focused individuals often exceed customer expectations Quality begins with personal attitudes Attitudes can be changed through awareness and effort (e.g., personal quality checklists)

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 37 Key Idea Unless quality is internalized at the personal level, it will never become rooted in the culture of an organization. Thus, quality must begin at a personal level (and that means you!).

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 38 Key Idea In the daily attempt to bring about change in the individual parts of the organizational universe, managers, employees, professors, and students can find that personal quality is the key to unlock the door to a wider understanding of what the concept really is all about.