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Chapter 1

Chapter 1. Introduction to Quality. Modern 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.”

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Chapter 1

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  1. Chapter 1 Introduction to Quality

  2. Modern 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

  3. What is Quality? • "The totality of features and characteristics of a product or service that bears on its ability to satisfy given needs." • "Meeting or exceeding customer expectations.

  4. Quality is grounded on three core principles: focus on customers; participation and teamwork; and continuous improvement and learning. These are supported by the organizational infrastructure that includes: customer relationship management, leadership and strategic planning, human resources management, process management, and data and information management, as well as a set of management practices and tools.

  5. Quality Assurance ...is any action directed toward providing customers with goods and services of appropriate quality.

  6. Benchmarking • Nordstrom vs. K-Mart • L’ Avenue vs. La Caille • Cliff Lodge vs. Motel 6 • Aerie’s vs. Chuckarama • John Nash vs. Ted Bundy • John Chambers vs. Albert Dunlap • Tom Brokaw vs. Randal Carlisle

  7. History of Quality Assurance (1 of 2) • 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

  8. 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

  9. Contemporary Influences on Quality • Parterning • Learning systems • Adaptability and speed of change • Environmental sustainability • Globalization • Knowledge focus • Customization and differentiation • Shifting demographics

  10. Definitions 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

  11. transcendent & product-based user-based needs Marketing Customer value-based Design products and services manufacturing- based Manufacturing Distribution Information flow Product flow Quality Perspectives

  12. Customer-Driven Quality • “Meeting or exceeding customer expectations” • Customers can be... • Consumers • External customers • Internal customers

  13. 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

  14. 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

  15. 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

  16. 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

  17. Process Focus and Continuous Improvement • A process is a sequence of activities that is intended to achieve some result

  18. 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

  19. Suppliers of materials and equipment Design and Redesign Consumer research Receipt and test of materials Consumers A B C D Production, assembly inspection Distribution Tests of processes, machines, methods INPUTSPROCESSESOUTPUTS Deming’s View of a Production System

  20. 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

  21. Infrastructure, Practices, and Tools Infrastructure Leadership Strategic HRM Process Data and information Planning mgt. management Performance Training appraisal Practices Trend chart Tools

  22. TQ Infrastructure • Customer relationship management • Leadership and strategic planning • Human resources management • Process management • Data and information management

  23. Competitive 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

  24. Quality and Profitability Improved quality of design Improved quality of conformance Higher perceived value Higher prices Lower manufacturing and service costs Increased market share Increased revenues Higher profitability

  25. 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

  26. Reliability Overall satisfaction Product and service quality Customer satisfaction On-time delivery Customer retention Error/defects Complaints Leadership for continuous improvement Market share Competitiveness Profits Costs Quality systems and employee involvement Cycle time Organization benefits Turnover Satisfaction Safety & health Productivity GAO TQ Model

  27. 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

  28. Quality 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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