ENTREPRENEURSHIP Lecture No: 27 Resource Person: Malik Jawad Saboor Assistant Professor Department of Management Sciences COMSATS Institute of Information Technology Islamabad.

Previous Lecture Review Stakeholder’s Management

OBJECTIVES History and Importance of Quality Defining Quality Principles & Practices, 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

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.

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

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

History of Quality Assurance (2 of 3) Quality awareness in U.S. manufacturing industry during 1980s: from “Little Q” to “Big Q” - Total Quality Management Malcolm Baldrige National Quality Award (1987) Disappointments and criticism

History of Quality Assurance (3 of 3) Emergence of quality management in service industries, government, health care, and education Evolution of Six Sigma Current and future challenge: keep progress in quality management alive

Key Idea While 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.

Contemporary Influences on Quality Globalization Social Responsibility New Dimension of Qaulity- Innovation Environmental sustainability 21 st Century Technology Changing Demographics

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

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

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

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.

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 supported by continuous improvement and learning … all 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

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.

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

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.

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

Key Idea Major improvements in response time may require significant simplification of work processes and often drive simultaneous improvements in quality and productivity.

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

TQM Infrastructure Customer relationship management Leadership and strategic planning Human resources management Process management Information and knowledge management

Lecture Review Reference: Evans, James R. et. al, The Management and Control of Quality, 8 th edition History and Importance of Quality Defining Quality Principles & Practices, Quality