Introduction to Quality Chapter 1 Introduction to Quality

The Business Imperative “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 As business and industry evolves, the terms “performance management” and “performance excellence” have begun to be used as synonyms for older terms, such as TQM and total quality. Quality, productivity, and cost remain imperatives for modern organizations.

Importance of Quality Quality is uniquely positioned to accelerate organizational growth through better execution and alignment Quality provides the voice of the customer critical to developing innovative products and services. Quality can provide an organization with a competitive edge “No quality, no sales. No sales, no profit. No profit, no jobs.” Quality is central to effective operation of these systems.

Quality Profile – Motorola, Inc. Leader in the U.S. quality revolution during the 1980s Pioneer in continual reduction of defects and cycle times Exceptional practices in managing human assets, sharing data and information with employees, customers, and suppliers, and aligning all its business processes with key organizational objectives. At Motorola, two key beliefs guide the culture of the firm: respect for people and uncompromising integrity. Motorola was a pioneer in continual reduction of defects and cycle times in all the company’s processes, from design, order entry, manufacturing, and marketing, to administrative functions.   Customers report high levels of satisfaction, and the division demonstrates strong financial, product quality, cycle time, and productivity performance. These results stem from exceptional practices in managing human assets, sharing data and information with employees, customers, and suppliers, and aligning all its business processes with key organizational objectives.

Quality Profile - MidwayUSA Catalog and Internet retailer offering “Just About Everything (SM)” for shooters, reloaders, gunsmiths, and hunters. Vision: “To be the best-run business in America for the benefit of our Customers.” Focus on customers has yielded impressive results. MidwayUSA leverages the fact that many in the company’s workforce have a deep passion for shooting, hunting, and outdoor sports, allowing them to use personal knowledge and insight to better serve their customers. All salaried employees (including senior leaders) spend one hour each week on the phone taking orders and answering customer requests. Employees are selected for leadership development based on their support of the company’s core value of “Customer-driven excellence” in addition to other performance-based criteria. Through its Web site, MidwayUSA directly solicits customer input on improving operations.

Defining Quality Perfection Fast delivery Providing a good, usable product Consistency Eliminating waste Doing it right the first time Delighting or pleasing customers Total customer service and satisfaction Compliance with policies and procedures

Formal Definitions of Quality Transcendent Perspective: excellence Product Perspective: quantities of product attributes User Perspective: fitness for intended use Value Perspective: quality vs. price Manufacturing Perspective: conformance to specifications Customer Perspective: meeting or exceeding customer expectations To focus on the multi-faceted definitions of quality. Definitions include transcendent (judgmental) quality, product- and value-based quality, fitness for use (user-based), conformance to specifications (manufacturing-based), and customer perspectives.

Customers Consumers External customers Internal customers Ultimate buyers of goods and services External customers Business-to-business Internal customers Anyone who receives goods or services from someone else within an organization To understand that the user-based perspective requires a definition of customers and related terms. Thus, customers also include consumers, who ultimately use a product; external customers, who may be intermediaries between the producer and the consumer; and internal customers, who are the recipients of goods and services from suppliers within the producing firm.

Quality Perspectives

History of Quality Management (1 of 4) Ancient History Zhou Dynasty in China The Age of Craftsmanship Skilled workers during the Middle Ages Industrial Revolution Early 20th Century Separate quality departments Ford Motor Company Statistical methods and quality assurance Professional societies and publications To review the evolution of quality from the 12th Century B.C. Zhou Dynasty in China, through the Craftsmanship era in the 1700’s, through the Japanese post-World War II challenge brought on by attention to quality and international competitiveness, to the “Quality revolution” in the U.S. and elsewhere in the 1980’s through the early 21st Century. The “revolution” came about as a result of consumer pressures, technological change, outmoded managerial thinking, and competitive pressures that changed the way that U.S. and managers around the world viewed the role of quality.

History of Quality Management (2 of 4) Post World War II Evolution of quality management in Japan W. Edwards Deming and Joseph Juran Introduction of statistical quality control techniques U.S. “Quality Revolution” Quality crisis around 1980 Growth of product quality awareness in manufacturing industries Early Successes Malcolm Baldrige National Quality Award (1987) Books, consulting, training

History of Quality Management (3 of 4) From Product Quality to Total Quality Management “Little Q” vs. “Big Q” and TQM Management Failures Cynicism and disinterest “No, TQM isn’t dead. TQM failures just prove that bad management is still alive and kicking.”

History of Quality Management (4 of 4) Performance Excellence Focus on customer value, organizational sustainability, improvement of effectiveness and capabilities, and organizational and personal learning Emergence of Six Sigma a customer-focused, results-oriented approach to business improvement Current and future challenges Continue to apply the principles of quality and performance excellence. Quality is “a race without a finish line.”

Growth of Modern Quality Management Manufacturing quality Improved product designs Service Performance excellence

Contemporary Influences on Quality Global Responsibility Consumer Awareness Globalization Increasing Rate of Change Workforce of the Future Aging Population Twenty-first Century Quality Innovation

Manufacturing Systems Quality management is rooted in manufacturing; therefore, that’s where we will begin. This figure illustrates a typical manufacturing system and key relationships among its functions. The quality concerns of each component of the system are described next.

Quality in Marketing Marketing and sales personnel are responsible for determining the needs and expectations of consumers. Marketing and sales involve much more than advertising and selling. Today, marketing and sales employees have important responsibilities for quality, such as learning the products and product features that consumers want and knowing the prices that consumers are willing to pay for them.

Quality in Product Design Product design and engineering functions develop technical specifications for products and production processes to meet the requirements determined by the marketing function. Under-engineered products – fails because they do not meet customer needs. Over-engineered that is, those that exceed the customer requirements, may not find a profitable market. Poorly designed manufacturing processes result in poor quality or higher costs. Good design can help to prevent manufacturing defects and service errors and to reduce the need for the non-value-adding inspection practices that have dominated much of U.S. industry.

Quality in Purchasing A purchasing agent should not simply be responsible for low-cost procurement, but should maintain a clear focus on the quality of purchased goods and materials. The purchasing department can help a firm achieve quality by: 1. Selecting quality conscious suppliers 2. Ensuring that purchase orders clearly define the quality requirements specified by product design and engineering 3. Bringing together technical staffs from both the buyers’ and suppliers’ company to design products and solve technical problems. 4. Establishing long-term supplier relationships based on trust 5. Providing quality-improvement training o suppliers 6. Informing suppliers of any problems encountered with their goods. 7, maintaining good communication with suppliers as quality requirements and design changes occur.

Quality in Production Planning & Scheduling Poor quality often results from time pressures caused by insufficient planning and scheduling. The correct materials, tools, and equipment must be available at the proper time and in the proper places in order to maintain a smooth flow of production.

Quality in Manufacturing and Assembly Both technology and people are essential to high-quality manufacturing. Manufacturing cannot do its job without a good product design and good process technology. NO defects should be acceptable. If and when they do occur, every effort must be made to identify their causes and eliminate them. Inspecting out already defective items is costly and wasteful

Quality in Process Design Manufacturing processes must be capable of producing output that meets specifications consistently. Industrial engineers and process designers must select appropriate technologies, equipment, and work methods for producing quality products. Industrial engineers also work on designing facilities and arranging equipment to achieve a smooth production flow and to reduce the opportunities for product damage.

Quality in Finished Goods Inspection and Testing The purposes of final product inspection are to judge the quality of manufacturing, to discover and help to resolve production problems that may arise, and to ensure that no defective items reach the customer.

Quality in Installation and Service Service after the sale is one of the most important factors in establishing customer perception of quality and customer loyalty.

Quality in Services Service is defined as “any primary or complementary activity that does not directly produce a physical product – that is, the non-goods part of the transaction between buyer (customer) and seller (provider).”

Critical Differences Between Service and Manufacturing (1 of 2) Customer needs and performance standards are more difficult to identify and measure Services requires a higher degree of customization Output is intangible

Critical Differences Between Service and Manufacturing (2 of 2) Services are produced and consumed simultaneously Customers are often involved in actual process Services are more labor-intensive than manufacturing Services handle large numbers of transactions

Components of Service Quality People “If we take care of our people, they will take care of our customers.” Technology Computers and information technology E-commerce

Quality in Business Support Functions Finance and Accounting Budgeting, cost of quality Legal Services Liability Quality Assurance Coaching and special studies Finance function is responsible for obtaining funds, controlling their use, analyzing investment opportunities, and ensuring that the firm operates cost-effectively and ideally0 profitably. Legal dept – attempt to guarantee that the firm complies with laws and regulation regarding such things as product labeling, packaging, safety, transportation; designs and words its warranties properly; satisfies its contractual requirements, and has proper procedures and documentation in place in the event of liability claim. QA dept – assist the managers. Provide guidance and support to everyone in the organization in order to achieve the quality goal.

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 CONFORMANCE – refers to the product of service meeting its technical specification Increased market share Increased revenues Higher profitability

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)

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!).