1 quality awareness. 2 introduction to quality 3 modern importance of quality “the first job we...

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Quality Awareness

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Introduction to Quality

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Modern Importance of QualityModern 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

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Quality Assurance

Quality Assurance refers to the process used to create the appropriate deliverables, and can be performed by a manager, client, or even a third-party reviewer.

Examples of quality assurance include process checklists, visual aids, and project audits, mistake proofing, etc.

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Quality Control• Quality Control refers to quality related

activities associated with the project deliverables • Quality control is used to verify that

deliverables are of acceptable quality and that they are complete and correct.

• Examples of quality control activities include inspection, audit and the testing process.

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Qualitative vs. Subjective

• Qualitative quality can be measured, and compared using values that are specific, black and white

• Subjective quality cannot be measured, and comparisons are intuitive, gut level, hard to define

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Workshop

Quality Comparison

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Mikasa fine china : $70.00 for 5 piece place setting

Corelle dinnerware : $30.00 for 16 piece place setting

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2004 Hyundai Sonata

$18,000

2004 Jaguar XJ8

$64,000

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History of Quality AssuranceHistory of Quality Assurance

• 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

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History of Quality Assurance (2 of 2)History of Quality Assurance (2 of 2)

• 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

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Contemporary Influences on Quality

• Partnering• Learning systems• Adaptability and speed of change• Environmental sustainability• Globalization• Knowledge focus• Customization and differentiation• Shifting demographics

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Leaders in the Quality Revolution

• W. Edwards Deming• Joseph M. Juran• Philip B. Crosby• Armand V. Feigenbaum• Kaoru Ishikawa• Genichi Taguchi

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Deming Chain ReactionImprove quality

Costs decrease

Productivity improves

Increase market share with better quality and lower prices

Stay in business

Provide jobs and more jobs

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Deming’s System of Profound Knowledge

• Appreciation for a system• Understanding variation• Theory of knowledge• Psychology

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Systems

• Most organizational processes are cross-functional

• Parts of a system must work together• Every system must have a purpose• Management must optimize the

system as a whole

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Variation• Many sources of uncontrollable variation

exist in any process• Excessive variation results in product

failures, unhappy customers, and unnecessary costs

• Statistical methods can be used to identify and quantify variation to help understand it and lead to improvements

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Theory of Knowledge

• Knowledge is not possible without theory

• Experience alone does not establish a theory, it only describes

• Theory shows cause-and-effect relationships that can be used for prediction

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Psychology

• People are motivated intrinsically and extrinsically

• Fear is demotivating • Managers should develop pride and joy

in work

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Deming’s 14 Points (Abridged) (1 of 2)

1. Create and publish a company mission statement and commit to it.2. Learn the new philosophy.3. Understand the purpose of inspection.4. End business practices driven by price alone.5. Constantly improve system of production and service.6. Institute training.7. Teach and institute leadership.8. Drive out fear and create trust.

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Deming’s 14 Points (2 of 2)

9. Optimize team and individual efforts.10. Eliminate exhortations for work force.11. Eliminate numerical quotas and M.B.O. Focus on improvement.12. Remove barriers that rob people of pride of workmanship.13. Encourage education and self-improvement.14. Take action to accomplish the transformation.

www.deming.org

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Juran’s Quality Trilogy

• Quality planning (Assurance)• Quality control (Control)• Quality improvement (CI)

www.juran.com

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• Quality Handbook

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Phillip B. Crosby

Quality is free . . . :“Quality is free. It’s not a gift, but it is free. What costs money are the un-quality things -- all the actions that involve not doing jobs right the first time.”

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Philip B. Crosby

Absolutes of Quality Management:• Quality means conformance to requirements• Problems are functional in nature• There is no optimum level of defects• Cost of quality is the only useful measurement• Zero defects is the only performance standard

www.philipcrosby.com

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A.V. Feigenbaum

• Three Steps to Quality

• Quality Leadership, with a strong focus on planning

• Modern Quality Technology, involving the entire work force

• Organizational Commitment, supported by continuous training and motivation

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• Total Quality

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Kaoru Ishikawa

• Instrumental in developing Japanese quality strategy

• Influenced participative approaches involving all workers

• Advocated the use of simple visual tools and statistical techniques

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Genichi Taguchi

• Pioneered a new perspective on quality based on the economic value of being on target and reducing variation and dispelling the traditional view of conformance to specifications:

No Loss LossLoss

Tolerance

0.500 0.5200.480

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Why Quality?

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Workshop

Why Quality?

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If you settle for 99.9% quality

• One hour per month has unsafe drinking water• Over 20,000 wrong prescriptions per year• 500 wrong surgical operations per week• 16,000 lost articles of mail every hour• 22,000 checks from wrong accounts per hour• 32,000 missed heartbeats per year per individual• 2 long or short landing everyday at each major airport• 50 babies dropped by the doctor each day• No electricity for 2 hours each month

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Competitive AdvantageCompetitive Advantage

• 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

Quality supports each of these characteristics

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Quality and ProfitabilityQuality and Profitability

Improved quality of design

Higher perceived value

Increased market share

Higher prices

Increased revenues

Improved quality of conformance

Lower manufacturing and

service costs

Higher profitability

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Evidence that Quality Impacts Business Results

• General Accounting Office study of Baldrige Award applicants

• Baldrige stock study (see www.quality.nist.gov) • Hendricks and Singhal study of quality

award winners• Performance results of Baldrige Award

winners

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GAO TQ Model

Product andservice quality

Customersatisfaction

Leadership for continuous improvement

Quality systems andemployee involvement

Competitiveness

Organization benefits

Reliability

On-time delivery

Error/defects

Overall satisfaction

Customer retention

Complaints

CostsCycle timeTurnoverSatisfaction

Safety & health

Productivity

Market share

Profits

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What is Quality?

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Workshop

What is Quality

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Quality is Not!

• 100% inspection• Management fad• Statistical Process Control• Employee involvement• Another excuse for a “management retreat”• Only applies to manufacturing

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Quality is…

• A philosophic way of thinking

• All things can be looked at from a quality perspective

• Manufacturing• Managing• Driving• Using• Living• Etc., etc., etc.

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Dimensions of Quality

• Definitions of Quality Quality means fitness for use

- quality of design

- quality of conformance

Quality is inversely proportional to variability.

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Dimensions of Quality

• Quality Improvement

Quality improvement is the reduction of variability in processes and products.

Alternatively, quality improvement is also seen as “waste reduction”.

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Dimensions of Quality – Transmission Example

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Quality Terminology

Quality Characteristics

• Physical - length, weight, voltage, viscosity• Sensory - taste, appearance, color• Time Orientation - reliability, durability,

serviceability

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Quality Terminology

Quality engineering is the set of operational, managerial, and engineering activities that a company uses to ensure that the quality characteristics of a product are at the nominal or required levels.

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Quality Terminology

Two types of data

• Attributes Data - discrete data, often in the form of counts.

• Variables Data - continuous measurements such as length, weight.

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Quality Terminology

Specifications Quality characteristics being measured are

often compared to standards or specifications.

• Nominal or target value• Upper Specification Limit (USL)• Lower Specification Limit (LSL)

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Quality Terminology

• When a component or product does not meet specifications, they are considered to be nonconforming.

• A nonconforming product is considered defective if it has one or more defects.

• Defects are nonconformities that may seriously affect the safe or effective use of the product.

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Quality Terminology

• Concurrent Engineering

Team approach to design. Specialists from manufacturing, quality engineering, management, etc. work together for product or process improvement.

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Definitions of QualityDefinitions 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

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Quality PerspectivesQuality Perspectives

CustomerCustomer

DistributionDistribution

productsproducts and and servicesservices

needsneeds

transcendenttranscendent &&product-basedproduct-based user-baseduser-based

manufacturing-manufacturing- basedbased

value-basedvalue-based

MarketingMarketing

DesignDesign

ManufacturingManufacturing

Information flowInformation flowProduct flowProduct flow

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Customer-Driven QualityCustomer-Driven Quality

• “Meeting or exceeding customer expectations”

• Customers can be...

• Consumers

• External customers

• Internal customers

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Dimensions of Quality

• Performance• Reliability• Convenience and

Accessibility• Features• Empathy• Conformance to

Standards

• Serviceability• Durability• Aesthetics• Consistency• Assurance• Responsiveness• Perceived Quality

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Dimensions of Quality ( 1 of 6)

• PERFORMANCE

How well the output does what it is

supposed to do.

• RELIABILITY

The ability of the output (and its provider) to

function as promised

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Dimensions of Quality (2 of 6)

• CONVENIENCE and ACCESSIBILITY

How easy it is for a customer to use the product

or service.

• FEATURES

The characteristics of the output that exceed the

output’s basic functions.

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• EMPATHY

The demonstration of caring and individual

attention to customers.

• CONFORMANCE

The degree to which an output meets

specifications or requirements.

Dimensions of Quality (3 of 6)

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• SERVICEABILITY

How easy it is for you or the customer to fix the output with minimum downtime or cost.

• DURABILITY

How long the output lasts.

• AESTHETICS

How a product looks, feels, tastes, etc.

Dimensions of Quality (4 of 6)

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• CONSISTENCY

The degree to which the performance changes

over time.

• ASSURANCE

The knowledge and courtesy of the employees

and their ability to elicit trust and confidence.

Dimensions of Quality (5 of 6)

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• RESPONSIVENESS

Willingness and ability of employees to help

customers and provide proper services.

• PERCEIVED QUALITY

The relative quality level of the output in the

eyes of the customers.

Dimensions of Quality (6 of 6)

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Why Is Quality Important?

• Profit and market share

• Competitiveness

• Company’s reputation

• Customer expectations

• Product/service complexity

• Potential liability

• Employee satisfaction

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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

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Principles of Total Quality

• Customer and stakeholder focus• Participation and teamwork• Process focus and continuous

improvement...supported by an integrated organizational infrastructure, a set of management practices,and a set of tools and techniques

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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

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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

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Process Focus and Continuous Improvement

• A process is a sequence of activities that is intended to achieve some result

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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

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Deming’s View of a Production System

Suppliers ofmaterials and equipment

Receipt and test of materials

Design and Redesign

Consumer research

ABCD

Production, assembly inspection

Tests of processes, machines, methods

Distribution

Consumers

INPUTS PROCESSES OUTPUTS

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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

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Infrastructure, Practices, and Tools

Leadership Strategic HRM Process Data and information Leadership Strategic HRM Process Data and information Planning mgt. managementPlanning mgt. management

Performance TrainingPerformance Training appraisalappraisal

Trend chartTrend chartToolsTools

PracticesPractices

InfrastructureInfrastructure

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TQ Infrastructure

• Customer relationship management• Leadership and strategic planning• Human resources management• Process management• Data and information management

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Three Levels of Quality

• Organizational level: meeting external customer requirements

• Process level: linking external and internal customer requirements

• Performer/job level: meeting internal customer requirements

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Quality and Personal ValuesQuality and Personal Values• 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)

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Growth of Modern Quality Management

Manufacturing quality

Improvedproduct designs

Servicequality

Performanceexcellence

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The Costs of Quality

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Workshop

Cost

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The Cost of Quality (COQ)

• COQ – the cost of avoiding poor quality, or incurred as a result of poor quality

• Translates defects, errors, etc. into the “language of management” – $$$

• Provides a basis for identifying improvement opportunities and success of improvement programs

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Quality Cost Classification

• Prevention• Appraisal• Internal failure• External failure

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Quality Cost Management Tools

• Cost indexes• Pareto analysis• Sampling and work measurement• Activity-based costing

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Return on Quality (ROQ) • ROQ – measure of revenue gains against

costs associated with quality efforts• Principles

• Quality is an investment

• Quality efforts must be made financially accountable

• It is possible to spend too much on quality

• Not all quality expenditures are equally valid

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Managing Data and Information

• Validity – Does the indicator measure what it says it does?

• Reliability – How well does an indicator consistently measure the “true value” of the characteristic?

• Accessibility – Do the right people have access to the data?

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Analysis• Statistical summaries and charts• Trends over time• Comparisons with key benchmarks• Aggregate summaries and indexes• Cause-and-effect linkages and

correlations (interlinking)• Data mining

Basic

Advanced

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Interlinking

• Quantitative modeling of cause and effect relationships between external and internal performance criteria

customersatisfactionrating

time on hold (telephone)

* * * * *

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Communication

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Workshop

Listening

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Listening

• The most difficult thing to do

• We have not been taught to listen

• We have a preset bias

• We drift to things that have happened to us

• We apply our experiences to another

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• Vertical communication• Horizontal communication• Multi-communicaation

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Barriers to communication

• Differences in perception • Differences in listening ability• Differences in interpretation of words/symbols• Differences in status• Personal bias due to race, sex or nationality• Psychological climate or communication environment• Lack of clarity• Lack of definite communication plans• Language or reading barriers

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Huddles

• Conduct day-to-day communications and business

• Make a decision• Correct a problem or problems• Assign duties• Confer and make an adjustment

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Communication Cycle

• Communicate• Receive• Interpret• Action• Receive

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Balancing Quality

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Workshop

Balancing Act

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• The Golden Goose

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When is there too much Quality

• The cost of quality erodes the profit• The quality is too far exceeding customer

expectations• Rational turns to Irrational

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Risk Analysis• 1. Define the problem or issue for the group• 2. Evaluate the issue’s importance in light of time, other team priorities

and the deadline for making the decision• 3. Collect data• 4. Analyze the data• 5. Generate ideas for solutions to the issue• 6. Select a mutually agreeable option for a decision or solution to the

issue• 7. Develop and agree on an action plan, including the assignment of

team member responsibilities for implementing the team’s decision or solution

• 8. New teams pass on the decision and action plan to the Leadership Team

• 9. Implement the action plan• 10. Evaluate the outcome• 11. If the results are negative, return to original scenario and revisit step

6.

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Balancing the Customer and Company

• Setting up a Review Board• When a Board should be used• Decision making

• Rules of decision making

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Review Boards

• Present each areas perspectives on the problem

• Allow each to weigh the severity and repercussion of decision

• See if there is a resolution that will ensure the problem will never happen again.

• Determine if the resolution has value

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Meeting Customers Expectation

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Workshop

Who is the Customer?

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Importance of Customer Satisfaction and Loyalty

• “Satisfaction is an attitude; loyalty is a behavior”• Loyal customers spend more, are willing to pay

higher prices, refer new clients, and are less costly to do business with.

• It costs five times more to find a new customer than to keep an existing one happy.

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American Customer Satisfaction Index

• Measures customer satisfaction at national level• Introduced in 1994 by University of Michigan

and American Society for Quality• Continual decline in index from 1994 through

1998 with a small improvement into 2000 suggests that quality improvements have not kept pace with consumer expectations

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ACSI Model of Customer Satisfaction

Perceivedquality

Customercomplaints

Perceivedvalue

Customer satisfaction

Customerexpectations Customer

loyalty

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Customer-Driven Quality Cycle

measurement and feedback

Customer needs and expectations (expected quality)

Identification of customer needs

Translation into product/service specifications (design quality)

Output (actual quality)

Customer perceptions (perceived quality)

PERCEIVED QUALITY = ACTUAL - EXPECTED

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Leading Practices (1 of 2)

• Define and segment key customer groups and markets

• Understand the voice of the customer (VOC)

• Understand linkages between VOC and design, production, and delivery

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Leading Practices (2 of 2)

• Build relationships through commitments, provide accessibility to people and information, set service standards, and follow-up on transactions

• Effective complaint management processes• Measure customer satisfaction for

improvement

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Key Customer Groups

• Organization level• consumers• external customers• employees • society

• Process level• internal customer units or groups

• Performer level• individual internal customers

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Identifying Internal Customers• What products or services are produced?• Who uses these products and services?• Who do employees call, write to, or answer

questions for?• Who supplies inputs to the process?

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AT&T Customer-Supplier Model

Requirementsand feedback

Requirementsand feedback

Your Suppliers

YourProcesses

YourCustomers

Inputs Outputs

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Kano Model of Customer Needs

• Dissatisfiers: expected requirements• Satisfiers: expressed requirements• Exciters/delighters: unexpected features

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Customer Satisfied

Customer Dissatisfied

Product Dysfunctional Product Functional

Must Be

Attractive

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Customer Relationship Management

• Accessibility and commitments• Selecting and developing customer contact

employees• Relevant customer contact requirements• Effective complaint management• Strategic partnerships and alliances

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Measuring Customer Satisfaction

• Discover customer perceptions of business effectiveness

• Compare company’s performance relative to competitors

• Identify areas for improvement• Track trends to determine if changes

result in improvements

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Performance-Importance Analysis

Performance

Importance

Low High

Low

High

Who cares? Overkill

Vulnerable Strengths

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Difficulties with Customer Satisfaction Measurement

• Poor measurement schemes• Failure to identify appropriate quality

dimensions• Failure to weight dimensions appropriately• Lack of comparison with leading competitors• Failure to measure potential and former

customers• Confusing loyalty with satisfaction

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Continuous Improvement

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Workshop

Improving the Process

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Sources of Variation in Production Processes

Materials

Tools

Operators Methods Measurement Instruments

HumanInspectionPerformance

EnvironmentMachines

INPUTS PROCESS OUTPUTS

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Variation• Many sources of uncontrollable variation

exist (common causes)• Special (assignable) causes of variation

can be recognized and controlled• Failure to understand these differences

can increase variation in a system

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Importance of Understanding Variation

time

PREDICTABLE

?UNPREDICTABLE

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Two Fundamental Management Mistakes

1. Treating as a special cause any fault, complaint, mistake, breakdown, accident or shortage when it actually is due to common causes

2. Attributing to common causes any fault, complaint, mistake, breakdown, accident or shortage when it actually is due to a special cause

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Creative Problem Solving

• Mess Finding – identify symptoms• Fact Finding – gather data; operational

definitions• Problem Finding – find the root cause• Idea Finding – brainstorming • Solution Finding – evaluate ideas and

proposals• Implementation – make the solution work