Quality Management

Defining Quality Conformance to Requirements Fitness for Use Customer Satisfaction

Conformance to Requirements High quality is often synonymous with meeting specifications. Manufacturing frequently takes this approach since it is closely linked to defect and scrap rates. It is also very important to highly-regulated industries, e.g., health care.

Fitness for Use This approach is user-oriented. it suggests that quality lies in the eye of the beholder. Different users have different needs, and to the extent that a product or service meets those needs, it is deemed to be of high quality.

Customer Satisfaction Customer satisfaction is a common measure for service quality. Customer satisfaction not only measures quality, but also influences future purchasing decisions. Customer satisfaction is determined by the gap between perception and expectation.

Quality Dimensions Instead of a simple, uniform concept, quality needs to be defined in specific terms (dimensions) for a product or service. An organization needs to focus on one or few quality dimensions. The selection of quality dimensions depends on the basic business strategy.

Examples of Product Dimensions Performance Features Reliability Conformance Durability Serviceability Aesthetics Perceived quality

Examples of Service Dimensions Reliability Accessibility Convenience Empathy Responsiveness Aesthetics Performance Perceived quality

Strategic Consideration in Quality Management Compete on quality (qualifier or order winner) Link quality to strategic planning Define quality from customers’ view Link quality to financial performance Define clear quality measures

Minimizing the Costs of Quality Prevention and Appraisal Costs rise during the initial phase of quality improvement. Internal and External Failure Costs should fall as quality improves. Appraisal Cost should fall as quality improves. Total Cost of Quality should fall as quality improves.

Key Elements of Quality Management Top Management Commitment Customer Focus Continuous Improvement Employee Commitment and Involvement

Malcolm Baldridge Awards Designed to recognize organizations which have achieved excellence in quality and to identify “role models” for other organizations. Includes five categories: manufacturing, service, small business, health care, and education. Internet web site: www.quality.nist.gov/

The Baldrige Framework – A Systems Perspective Organizational Profile: Environment, Relationships, and Challenges 2 Strategic Planning 5 Human Resource Focus 1 Leadership 7 Business Results The framework is the 30,000 foot view of the Criteria. [Note: Education and Health Care Criteria have slightly different nomenclature.] The building blocks, or Categories, are essential -- performance in the Baldrige categories is the cost of entry -- but excellence in the linkages will be the mark of competitive leadership. The arrows point to excellence. The umbrella over strategy and action plans: It is the set of customer and market focused company-level requirements. These are derived from short- and long-term planning. They are the things that must be done well for the strategy to succeed. The action plans “bring the strategy to life.” They guide overall resource decisions. They drive the alignment of measures for all work units to ensure customer satisfaction and market success. The system: The leadership triad -- leadership, strategic planning, customer & market focus -- emphasizes the importance of a leadership focus on strategy and customers. The results triad is HR focus, process management, and business results. Its focus is on the employees and key processes that accomplish the work of the organization that yields results. ALL company actions point toward results. The large arrow in the center connects the leadership and results triads -- a critical linkage for company success -- and shows the role leaders must play in driving results improvement. Information and analysis are critical to a fact-based system; they are the foundation for the performance management system. 3 Customer & Market Focus 6 Process Management 4 Measurement, Analysis, and Knowledge Management

ISO 9000:2000 Quality system standards adopted in 1987 by International Organization for Standardization; revised in 1994 and 2000 Technical specifications and criteria to be used as rules, guidelines, or definitions of characteristics to ensure that materials, products, processes, and services are fit for their purpose.

ISO 9000 Key Characteristics Establishes a quality management system (QMS) to facilitates consistency It is not prescriptive; does not say “how” to do anything; specifies “what” processes need to be in place It is not a product standard It is not TQM It is site specific

Major Potential Benefits of ISO 9000Registration Documentation of quality management system Reduction of variation Help develop and expand business Reduction or elimination of customer audit Increased profitability/reduced costs Elimination of duplication of quality systems

Major Problems with ISO 9000 Registration Does not assure high quality Costs - application and maintenance Time - application and maintenance Level of internal expertise and use of consultants Executive commitment Selection of registration

What Are the Methods to Improve Quality?

Key Methods for Quality Improvement Process Improvement Business Process Reengineering Benchmarking Six Sigma

Process Improvement Uses a systematic process to improve the performance of a process Employees are the key contributors Uses intra- or inter-functional teams to carry out improvement initiatives Management provides critical resources and support

Business Process Reengineering (BPR) Seeks radical (breakthrough) improvement in process performance Relies heavily on experts, not regular employees Uses technology to re-design a process Requires significant financial investment A high-risk, high potential reward method

Benchmarking A method to learn and adopt “best practices” Best practices can come from a specific competitors or industry, or from any industry Requires significant time and resources Benchmarking should be followed by internal innovation

Six Sigma A quality improvement methodology that focuses on eliminating defects through reduction of variation in a process Defect – A measurable outcome that is not within acceptable (specification) limits The goal is to reduce cost and improve quality simultaneously.

Requirements for Implementing Quality Management Commitment to and involvement in quality from management Personal accountability and rewards for quality improvement Effective training on improvement tools A culture that promotes empowerment and quality improvement