1. Total Quality in Organizations
Chapter 2
Total Quality in
Organizations
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

2. Growth of Modern Quality Management
Manufacturing
quality
Improved
product designs
Service
Performance
excellence
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

3. Key Idea
As consumer expectations have risen, a focus on quality has permeated other key sectors of the economy, most notably health care, education, not-for-profits, and government.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

4. Systems Thinking
A system is a set of functions or activities within an organization that work together for the aim of the organization.
Subsystems of an organization are linked together as internal customers and suppliers.
A systems perspective acknowledges the importance of the interactions of subsystems, not the actions of them individually.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

5. Key Idea
Successful management relies on a systems perspective, one of the most important elements of total quality.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

6. Manufacturing Systems (1 of 2)
Marketing and sales
Product design and engineering
Purchasing and receiving
Production planning and scheduling
Manufacturing and assembly
Tool engineering
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

7. Manufacturing Systems (2 of 2)
Industrial engineering and process design
Finished goods inspection and test
Packaging, shipping, and warehousing
Installation and service
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

8. Key Idea
Traditional quality assurance systems in manufacturing focus primarily on technical issues such as equipment reliability, inspection, defect measurement, and process control.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

9. Relationships in a Typical Manufacturing System (Fig.2.1)
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

10. Quality in Marketing
Marketing and sales personnel are responsible for determining the needs and expectations of consumers.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

11. 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.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

12. 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.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

13. Quality in Production Planning & Scheduling
Poor quality often results from time pressures caused by insufficient planning and scheduling.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

14. Quality in Manufacturing and Assembly
Both technology and people are essential to high-quality manufacturing.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

15. Quality in Production Planning & Scheduling
Poor quality often results from time pressures caused by insufficient planning and scheduling.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

16. Quality in Process Design
Manufacturing processes must be capable of producing output that meets specifications consistently.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

17. 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.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

18. 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.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

19. Quality in Business Support Functions for Manufacturing
Finance and accounting
Quality assurance
Legal services
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

20. Key Idea
Every manager is responsible for studying and improving the quality of the process for which he or she is responsible; thus, every manager is a quality manager.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

21. 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).”
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

22. Key Idea
The American Management Association estimates that the average company loses as many as 35 percent of its customers each year, and that about two-thirds of these are lost because of poor customer service.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

23. 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
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

24. 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
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

25. Key Idea
These differences make it difficult for many service organizations to apply total quality principles, and foster misguided perceptions that quality management cannot be effectively accomplished in services.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

26. Components of Service System Quality
Employees
Information technology
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

27. Key Idea
Researchers have repeatedly demonstrated that when service employee job satisfaction is high, customer satisfaction is high, and that when job satisfaction is low, customer satisfaction is low.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

28. Key Idea
Information technology is essential for quality in modern service organizations because of the high volumes of information they must process and because customers demand service at ever-increasing speeds.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

29. Quality in Health Care
Joint Commission on Accreditation of Healthcare Organizations (JCAHO)
National Committee for Quality Assurance (NCQA)
Institute for Healthcare Improvement (IHI)
1999 expansion of the Baldrige Award to nonprofit health care organizations
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

30. Quality Issues in Health Care
Avoidable errors
Underutilization of services
Overuse of services
Variation in services
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

31. Key Idea
Although the national health care system as a whole may need a sweeping overhaul, many individual providers have turned toward quality as a means of achieving better performance and customer satisfaction.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

32. Quality in Education Koalaty Kid
Active involvement of whole school community
Committed leadership
System for continuous improvement
Environment that celebrates success
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

33. Quality in Higher Education
Business plays an important role in fostering quality improvement efforts in higher education by transferring knowledge and expertise on quality processes and implementation practices.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

34. Academic Quality Improvement Project (AQIP)
AQIP criteria focuses on institutional practices for helping students learn, accomplishing other distinct objectives, understanding student and stakeholder needs, valuing people, leading and communicating, supporting institutional operations, measuring effectiveness, planning continuous improvement, and building collaborative relationships—all of which are key elements of TQ.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

35. Quality in Small Business and Not-for-Profits
Slow to adopt quality approaches
General lack of understanding and knowledge about quality
Focus on sales and market growth, cash flow, and routine fire fighting
Lack of resources for formal quality systems
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

36. Key Idea
Perhaps the most important factor in successful quality initiatives in small businesses is the recognition by the CEO or president that a quality focus can be beneficial and lead to achieving organizational goals.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

37. Quality in the Public Sector
Quality in the Federal Government
Federal Quality Institute
President’s Quality Award
State and Local Quality Efforts
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

38. Key Idea
Quality concepts and principles are universal and can be applied in all types of organizations. The difficulty, of course, is developing an infrastructure to make it happen and the discipline to sustain efforts over time.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing