THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson Learning TM Introduction to Quality 1

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson Learning TM “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 2

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson Learning TM...is any action directed toward providing customers with goods and services of appropriate quality. 3

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson Learning TM  Skilled craftsmanship during Middle Ages  Industrial Revolution: rise of inspection and separate quality departments  Statistical methods at Bell System  Quality control during World War II  Quality management in Japan 4

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson Learning TM  Quality awareness in U.S. manufacturing industry during 1980s: “Total Quality Management”  Malcolm Baldrige National Quality Award (1987)  Quality in service industries, government, health care, and education  Current and future challenge: keep progress in quality management alive 5

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson Learning TM  Parterning  Learning systems  Adaptability and speed of change  Environmental sustainability  Globalization  Knowledge focus  Customization and differentiation  Shifting demographics 6

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson Learning TM  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 7

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson Learning TM 8 Customer Distribution products and andservices needs needs transcendent & product-baseduser-based manufacturing- based based value-based Marketing Design Manufacturing Information flow Product flow

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson Learning TM  “Meeting or exceeding customer expectations”  Customers can be...  Consumers  External customers  Internal customers 9

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson Learning TM  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 10

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson Learning TM  Customer and stakeholder focus  Participation and teamwork  Process focus and continuous improvement 11...supported by an integrated organizational infrastructure, a set of management practices, and a set of tools and techniques

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson Learning TM  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 12

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson Learning TM  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 13

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson Learning TM  A process is a sequence of activities that is intended to achieve some result 14

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson Learning TM  Enhancing value through new products and services  Reducing errors, defects, waste, and costs  Increasing productivity and effectiveness  Improving responsiveness and cycle time performance 15

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson Learning TM  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 16

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson Learning TM 17 Leadership Strategic HRM Process Data and information Planning mgt. management Planning mgt. management Performance Training appraisal appraisal Trend chart Tools Practices Infrastructure

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson Learning TM  Customer relationship management  Leadership and strategic planning  Human resources management  Process management  Data and information management 18

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson Learning TM  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 19 Quality supports each of these characteristics

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson Learning TM  General Accounting Office study of Baldrige Award applicants  Baldrige stock study (see  Hendricks and Singhal study of quality award winners  Performance results of Baldrige Award winners 20

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson Learning TM  Organizational level: meeting external customer requirements  Process level: linking external and internal customer requirements  Performer/job level: meeting internal customer requirements 21

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson Learning TM  Personal initiative has a positive impact on business success  Quality begins with personal attitudes  Quality-focused individuals often exceed customer expectations  Attitudes can be changed through awareness and effort (e.g., personal quality checklists) 22