1. Quality management systems – Requirements3
Terms and definitions
Definition of Quality – Value-Based View
Value-based quality is defined in terms of costs and prices as well as a number of other attributes. Thus, the consumer’s purchase decision is based on quality (however it is defined) at the acceptable price.
There are different definitions of quality. Each has its own way of describing customer-supplier relationship. We are going to use value definition of quality because this definition is going to help us do discover contradictions that might block or destroy customer-supplier relationship. Even when quality is number one priority by the customer, we must also take into consideration value (for the customer), price and cost (for supplier).
More definitions of Quality can be found at:

2. Building customer supplier relation
1. We have a problem …
3. It looks like it’s possible to do business with this person.
2. We shall do our best to help you solve your problem …
The organization shall increase its’ competitiveness by increasing certainty and added value while saving money and time. Building customer supplier relation (both with internal and external customers) is extremely important because first the relationship should be established and only then the transaction can be completed. As Bengt Stenberg in [2] said: “We have to remember that business takes place between human beings”.
Reference:
1. ISO 9001:2015 clause General b) the consideration of processes in terms of added value;
2. Bengt Stenberg, M.Sc., Alfa-Laval Quality Bulletin Issue No.1/1988
Requirements
Supplier
Customer

3. The two parties have different value scales
In order to fulfill customer requirements, we have to provide a solution. Cost of our solution is C1.
Supplier
Customer
Supplier value scale
Customer value scale
Specifications
The ground for negotiations is that two parties have different value scales. Both VALUE and COST have to be very different to supplier and customer. C1

4. Value and cost are different to supplier and customer
We estimate the value of our solution to be V1. If customer pays V1 then our benefit will be V1 – C1.
Supplier
Customer
In real business environment we have to consider competition too. Customers usually look at several alternatives and chooses the one which is the best for him. The supplier must be able to define the value and the cost for himself and for the customer in a way to be more appealing for the customer than the competition. V1 C2 C1

5. Value and cost are different to supplier and customer
The value of their solution to our problem is V2 which is well above the price We will have to pay C2 for solution.
The price of our solution is V1.
Supplier
Customer C1 V1 C2 V2
Both parties in a customer – supplier relationship will define their agreement in a contract. They can agree about something which is good for both parties (green arrows).

6. Win – win situation We made a god deal since (V2 – C2) >0
We made a god profit since
(V1 – C1) >>0
You provided a good solution.
Supplier
Customer C1 V1 C2 V2
The parties each estimate their net value (V – C) of all qualities combined. The larger these differences, the better.

7. Value definition of Quality
Our satisfaction will be higher in case where (V2 – C2)>>0
To improve quality we should create steeper arrow from left to right.
Q = V2 C1
Supplier
Customer C1 V1 C2 V2
The decisive factor in negotiation is not the price decrease but the increased net value for the customer.

8. Value definition of Quality
This supplier is providing us high quality solutions.
For improvement we reduce cost on the left and to increase the value to the right. Now we are even more competitive. If necessary we can even reduce price.
We are looking forward to do business with you.
Q = V2 C1
Supplier
Customer C1 V1 C2 V2
Customer-supplier relation will be good if following condition is fulfilled:
(V2 >> C2) & (V1 >> C1)
This means that both parties has benefited from the relation. And they would like to keep this situation on as long as possible.

9. Quality (Q), Ideality (I) and Return on Investmet (ROI)
There are similarities between these expressions!
Q =
Vcustomer
Csupplier
V =
∑F useful
Ccustomer
I =
∑F useful
∑F harmful + ∑Costs
ROI of improvement =
∑Cost before – Cost after
Investment
This presentation will show us how to use relations defined in formulas above for Quality improvement and what TRIZ does for the quality manager.
Q = quality
V = value
C = cost
I = ideality
F = function
ROI = return on invesmentt