Slide 1.1 Chapter 1 Introduction to Quality

Slide 1.2 Importance of Quality u “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

Slide 1.3 u Quality Assurance is any action directed toward providing customers with goods and services of appropriate quality.

Slide 1.4 History of Quality Assurance (1 of 3) u The Age of Craftsmanship X Skilled craftsmanship during Middle Ages in Europe served both as manufacturer and inspector X Quality was built into the final product X The approach to quality was lost with the advent of unionization u The Early 20 th Century X Industrial Revolution: rise of inspection and separate quality departments X Fredrick W. Taylor, Father of Scientific Management, led this philosophy of production by separating the planning function from the execution function X Scientific Management led to wide-spread use of inspection

History of Quality Assurance (2 of 3) u Post-World War II (1940 – 1950) X Production output was the top priority of U.S. manufacturing X The term ‘quality assurance’ originated form Bell Telephone Laboratories X Joseph Juran and Edward Deming, consultants, introduced statistical quality control to the Japanese to aid them in their rebuilding X By the 1970s, Japanese companies made significant penetration into western markets Slide 1.5

Slide 1.6 History of Quality Assurance (2 of 2) u U.S. Quality Revolution X In the 1980s, the following factors helped ignite the U.S. quality revolution u A recognition that foreign import products possessed superior quality u The t.v. special entitled “If Japan Can, Why Can’t We?” u The space shuttle Challenger disaster X In the 1980s, U.S. companies began focusing on improving quality through management practices X Malcolm Baldrige National Quality Award (1987) was created X Quality in service industries, government, health care, and education

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 Slide 1.7

Slide 1.8 Definitions of Quality u Transcendent definition: X Recognizable, a mark of uncompromising standards and high achievement X Most difficult to measure and analyze X Example: Mercedes-Benz, Rolex watch u Product-based definition: X quantities of product attributes (the higher the price, the higher the quality) X Example: measuring the quality of a lap top by the type of microprocessor chip u User-based definition: X Quality is determined by what the customer wants X Fitness for intended use X How well the product performs its intended function X Example: Cadillac vs. Jeep

Definitions of Quality cont… u Value-based definition: X Quality vs. price X Example: purchasing generic medicine over brand-name u Manufacturing-based definition: X Conformance to specifications X Product specifications determined by designers of products and services X Example: Pistons, cams, etc.. Slide 1.9

Slide 1.10 Key Dimensions of Quality u Performance u Features u Reliability u Conformance u Durability u Serviceability u Aesthetics u Perceived quality

Slide 1.11 Quality Perspectives Customer Distribution products and andservices needs needs transcendent & product-baseduser-based manufacturing- based based value-based Marketing Design Manufacturing Information flow Product flow

Slide 1.12 Customer-Driven Quality u “Meeting or exceeding customer expectations” u Customers can be... X Consumers X External customers X Internal customers

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. Slide 1.13

Slide 1.14 Quality in Production Systems u Production is the process of converting resources into goods and services u Production systems consists of: X Inputs X Outputs X Processes

Slide 1.15 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

Slide 1.16 Three Levels of Quality u Organizational level: X Quality concerns should center on meeting external customer requirements X Top management is actively involved u Process level: X Linking external and internal customer requirements X Units are classified as functions or departments u Performer/job level: X Meeting internal customer requirements X Example: supervisor meeting with each of his/her workers to determine individual needs

Slide 1.17 Quality as Important Source of Competitive Advantage u Driven by customer wants and needs u Makes significant contribution to business success u Matches organization’s unique resources with opportunities u Is durable and lasting u Provides basis for further improvement u Provides direction and motivation

Slide 1.18 Quality and Profitability Improved quality of design of design Higher perceived value value Increased market share share Higherprices Increased revenues revenues Improved quality of conformance of conformance Lower Lower manufacturing manufacturing and service costs Higher profitability

Slide 1.19 Quality and Personal Values u Personal initiative has a positive impact on business success u Quality begins with personal attitudes u Quality-focused individuals often exceed customer expectations X Example: Walt Disney World/Retainer u Attitudes can be changed through awareness and effort (e.g., personal quality checklists)