Chapter 1 ©2001 Prentice-Hall S. Thomas Foster, Jr. Boise State University Slides Prepared by Bruce...

Chapter 1Chapter 1

©2001 ©2001 Prentice-HallPrentice-Hall©2001 ©2001 Prentice-HallPrentice-Hall

S. Thomas Foster, Jr.S. Thomas Foster, Jr.Boise State UniversityBoise State University

Slides Prepared bySlides Prepared byBruce R. BarringerBruce R. Barringer

University of Central FloridaUniversity of Central Florida

S. Thomas Foster, Jr.S. Thomas Foster, Jr.Boise State UniversityBoise State University

Slides Prepared bySlides Prepared byBruce R. BarringerBruce R. Barringer

University of Central FloridaUniversity of Central Florida

Differing Perspectives on QualityDiffering Perspectives on Quality

Transparency 1-2Transparency 1-2© 2001 Prentice-Hall© 2001 Prentice-Hall

Chapter OverviewSlide 1 of 2


• Recognizing Different Perspectives on Quality

• What is Quality?

• Differing Perspectives on Quality

• Is Quality Management Its Own Functional Discipline?

• The Three Spheres of Quality




• Other Perspectives on Quality

• Arriving at a Common Understanding of Quality using a Contingency Perspective of Quality


The reasons perceptions differ isThe reasons perceptions differ is

1. Backgrounds

2. Tastes and preferences

3. Attitudes and feelings


Recognizing Different Perspectives on QualitySlide 1 of 3


• Different Perspectives on Quality– There are many different definitions and

dimensions of quality.– For the present, you should view quality

as a measure of goodness that is inherent to a product or service.

– Employees working for the same firm often view quality differently as illustrated in the next slide.




Different View of Quality that can Exist in the Same Firm

Engineering Marketing Accounting

A product engineer might associate quality with product design

A marketing executive might associate quality with quick design time

An accountant might associate quality with low product cost




• As Illustrated in the Proceeding Slide, Perceptions on Quality Can Vary– In order to communicate effectively

about quality, managers need to recognize that differences in perceptions of quality exist.


Recognizing Different Perspectives on Quality


• Page 4

• A Closer look at Quality 1.1

• Which are Better, CDs or LPs?

• What is clear is that the meaning of quality varies drastically from person to person.

• It is left to each of us to decide.

• Which do we like best?




• Perceptions affect every aspect of our world – including the business world.

• Managers need to recognize that differences in perceptions of quality exist.

• Many managers have strong opinions about what quality is.

• These opinions can be variance with the beliefs of the majority of their customers.

• This may hurt the competitiveness.


Product Quality Dimensions(David Garvin) Slide 1 of 2

Product Quality Dimensions(David Garvin) Slide 1 of 2

1. Transcendent Definition– Quality is something that is intuitively understood

but nearly impossible to communicate such as beauty or love.

2. Product-Based Definition– Quality is found in the components and attributes

of a product.

3. User-Based Definition– If the customer is satisfied, the product has

good quality.


Product Quality Dimensions Slide 2 of 2

Product Quality Dimensions Slide 2 of 2

4. Manufacturing-Based Definition– If the product conforms to design

specifications, it has good quality.

5. Value-Based Definition– If the product is perceived as

providing good value for the price, it has good quality.


Garvin’s Product Quality Dimensions (David Garvin) Slide 1 of 4 ( Table 1.1)

Garvin’s Product Quality Dimensions (David Garvin) Slide 1 of 4 ( Table 1.1)

1. Performance

2. Features

3. Reliability

4. Conformance

5. Durability

6. Serviceability

7. Aesthetics

8. Perceived Quality


Garvin’s Product Quality Dimensions (David Garvin) Slide 2 of 4

Garvin’s Product Quality Dimensions (David Garvin) Slide 2 of 4

1. Performance– Refers to the efficiency with which a product

achieves its intended purpose.

2. Features– Attributes of a product that supplement a

product’s basic performance.

3. Reliability– The propensity for a product to perform

consistently over its useful design life.


Garvin’s Product Quality DimensionsSlide 3 of 4


4. Conformance ( specifications and tolerance)– Numerical dimensions for a product’s

performance, such as capacity, speed, size, durability, color, or the like.( easily quantified and difficult for a service to conform)

5. Durability– The degree to which a product tolerates stress

or trauma without failing.


Garvin’s Product Quality Dimensions

Garvin’s Product Quality Dimensions

6. Serviceability– Ease of repair easily and cheaply. If service is rapid,

courteous, easy to acquire, and competent, then the product have good serviceability.

7. Aesthetics– Subjective sensory characteristics such as taste, feel,

sound, look, and smell. We measure quality as the degree to which product attributes are matched to consumer preferences.




8. Perceived Quality– Quality is as the customer perceives it.

Customers imbue products and services with their understanding of their goodness. This is perceived quality.


Quality DimensionsQuality Dimensions

• The Garvin list of quality dimensions, although it is the most widely cited and used, is not exhaustive.

• Carol King identified dimensions of service quality such as responsiveness, competence, access, courtesy, communication, credibility, security, and understanding.


Service QualityService Quality

• Service quality is even more difficult to define than product quality.

• This often results from wide variation created by high customer involvement.

• The example is fountain pen and food service.


Service Quality Dimensions ( Table 1.2)Slide 1 of 3 ( See Chapter 8 )

Service Quality Dimensions ( Table 1.2)Slide 1 of 3 ( See Chapter 8 )

Parasuraman, Zeithamel, and Berry’s ( PZB) Service Quality Dimensions

1. Tangibles

2. Service Reliability

6. Availability

7. Professionalism

10. Pleasantness

3. Responsiveness

4. Assurance

5. Empathy

8. Timeliness

9. Completeness


Service Quality DimensionsSlide 2 of 3


1. Tangibles– Include the physical appearance of the

service facility, the equipment, the personnel, and the communication material.

2. Service Reliability– Differs from product reliability in that it

relates to the ability of the service provider to perform the promised service dependably and accurately.




3. Responsiveness– The willingness of the service provider to be

helpful and prompt in providing service.

4. Assurance– The knowledge and courtesy of employees

and their ability to inspire trust and confidence.


Service Quality DimensionsService Quality Dimensions

5. Empathy– the customer desires caring, individual

attention paid to customers by the service firm.


Service Quality DimensionsService Quality Dimensions

6. There are several other dimensions of service quality ( please see above).

7. It should be noted that service design strives to address these different service dimensions simultaneously.

8. It is not sufficient for a service firm to provide only empathy if responsiveness and service reliability are inadequate.


Why Does It Matter That Difference Definitions of Quality Exist?


Understanding that definitions and dimensions of quality exist allows measures to be taken to provide a better basis for communication and planning in a firm.




• By sharing a common definition of quality, each department within a company can work toward a common goal.

• Understanding the multiple dimensions of quality desired by customers can lead to improved product and service design.

• HP embarked on a “customer one-on-one” program that emphasized customer interaction with production workers.


Differing Functional Perspectives on Quality


• One of the important determinants of how we perceive quality is the functional role we fulfill organizationally.

• It is difficult to communicate with information systems users and internal managers for several reasons.

• User system requirements differ from analyst system requirements.




• This difference in the nature of the work performed by users and analyst causes them to see quality issues differently.

• Differences between users and analysts are only one instance of different perspectives created by functional differences.

• Firm must constantly improve their communication.




• Recognizing fundamental differences between difference function view quality is an important first step in understanding and resolving problems associated with mismatches of quality perceptions within organization.

• Experience with cross-functional teams has been difficult for many firms because of poor communication skills among team members.




• An Engineering Perspective

• An Operations Perspective

• A Strategic Management Perspective

• A Marketing Perspective

• A Financial Perspective

• The Human Resources Perspective


Engineering Perspective on QualitySlide 1 of 4


• Nature of Engineering Perspective– Engineers are interested in applying mathematical

problem solving skills and models to the problems of business and industry – Operational Research.

– R. A. Fisher expanded the field of mathematical statistics to problems related to variation experienced in the production area.

– Two of the major emphases in engineering are the areas of product design and process design.


Engineering Perspective on QualityEngineering Perspective on Quality

• Nature of Engineering Perspective

- More and more engineers are being hired into services firms requiring a strong technical component.

- Two of the major emphases in engineering are the areas of product design and process design.




• Product Design Engineering– Involves all of those activities associated

with developing a product from concept development to final design and implementation.

– The next slide ( Figure 1.1) demonstrates the six steps in the engineering life cycle for the design of products.


Engineering Perspective on Quality Slide 3 of 4

Engineering Perspective on Quality Slide 3 of 4

IdeaGeneration

PreliminaryDesign

Final Definition

ProductDesign &

Evaluation

Implementation

Design Life Cycle ( Figure 1.1)

PrototypeDevelopment

Prototype Iterations



• Product Design Engineering– Concurrent engineering refers to the

simultaneous performance of product and process design activities.

– Engineers have also applied statistical thinking to the problem of reliability.

– Reliability engineers use probability theory to determine the rate of failure a product will experience over its useful life.




• Related Concepts– Life Testing

• It is a facet of reliability engineering that concerns itself with determining whether a product will fail under controlled conditions during a specified life.

• If a component has a relatively high probability for failure that will affect the overall function of a product, then redundancy is applied so that backup system can take over for the failed primary system.



• Related Concepts– Another engineering-related contribution to

quality management is the field of Statistical Process Control (SPC).

– SPC is concerned with monitoring process capability ( meet specification) and process stability ( only exhibit random or common variation).

– The control process as specified by Shewhart is shown in Figure 1.2.



• Statistical Method from the Viewpoint of Quality Control by Shewhart (Figure 1.2)

1. Specify Hypothesis

3. Inspect Data for Consistency with Hypothesis

2. Produce Data by Performing an Experiment



• In summary, the engineering view of quality is technically oriented, focusing on statistics and technical specification.

• Only recently have engineers begun to interact with customers in meaningful ways.


Operations Perspective on QualitySlide 1 of 6


• Nature of Operations Perspective– The operations management view of

quality is rooted in the engineering approach.


Operations Perspective on QualityOperations Perspective on Quality

• Nature of Operations Perspective

– Like engineers, operations managers are very concerned about product and process design. However, rather than focusing on only the technical aspects of these activities, operations concentrates of the management of these activities.



• Nature of Operations Perspective

- Today, operations management has developed into an integrative field, combining concepts from engineering, operations research, organizational theory, organizational behavior, and strategic management.




• Systems View– Operations management (OM) utilizes the

systems view that underlies modern quality management thinking ( see Figure 1.3).

– The systems view involves the understanding that product quality is the result of the interactions of several variables such as machines, labor, procedures, planning, and management.


Operations Perspective on Quality-- The Systems View of Operation Management

Slide 3 of 6


Slide 3 of 6

The Conversion Systems Model of Operation Management ( Figure 1.3)

Planning Organizing

Controlling

InputsConversion

ProcessOutputs Customer

Customer Feedback

Process Control




• This systems view focuses on interactions between the various components that combine to produce a product or service.

• The systems view also focuses management on the system as the cause of quality problems.




• Operations/Marketing Interface– In recent years, a major advance in

operations management has been the improved understanding of the operations/marketing interface.

– The interface has resulted in an increased focus on the customer.



• Operations/Marketing Interface - This has helped operations manager

externalize their views to the customer as well by making the customers part of the design process.




• Strategic View of Operations Management– Among the recent advances in operations

management has been a migration towards a more strategic view.

– Ferdows and Demeyer linked this strategic view of operations management to quality management by proposing the model shown in Figure 1.4.


Operations Perspective on Quality--Strategic View of Operations Management


An Operations Management Competence Model --The Sand Cone Model ( Figure 1.4)

Quality

Dependability

Cost Efficiency

Speed




• This strategic view of OM to quality management identified quality as base on which lasting improvement in other competitive dimensions established.

• This strategic view has also led to a better understanding of the relationship between quality and other competitive variables such as profitability, cost leadership, and operational success.




• One common complaint among critics of operations management is that too much credence is given to fads of the day rather than honestly improving the fundamentals of the business.

• OM has elevated quality management as a key area of business study.


Strategic Management Perspective on QualitySlide 1 of 3


• Nature of the Strategic Management Perspective– When the concept of strategic planning first arose

practitioners treated quality-related strategic planning as if it were a separate exercise from firm-level strategic planning.

– However, we soon realized that quality management, to become pervasive in a firm, needed to be included in all of the firm’s business practices, including strategic planning.


Strategic Management Perspective on Quality


• Company strategies are rooted in the building blocks of mission and core values.

• An organization’s mission states why the organization exists.

• The core values of an organization refers to guiding operating principles that simplify decision making in the organization.




• Companies go to great effort to establish, communicate, and reinforce a sense of mission and values in an organization, because mission and values strongly influence organizational culture.

• Organizational culture is often seen as a major determinant to the successful implementation of quality improvement.

• The quality movement has greatly influenced strategy process in recent years.

• Figure 1.5 shows a generic strategic planning process and its components.


Strategic Management Perspective on Quality Slide 2 of 3

Strategic Management Perspective on Quality Slide 2 of 3

A Generic Strategic Planning Process ( Figure 1.5)Firm Mission

and Goals

Strategic Options

Conflict Politicsand Change

Strategic AlignmentBetween

Structure and Goals

Org. RewardSystems

OrganizationalDesign

InternalAnalysis

ExternalAnalysis

Business Level Strategy

Corporate Level Strategy

Operational

Subplans




• Goal of Strategic Quality Planning– The ultimate goal of strategic quality

planning is to aid an organization to achieve sustainable competitive advantage.




• In many markets, like the auto industry, it is becoming difficult to sustain a competitive advantage based on quality alone.

• The quality/cost combination can be used as an order winner.

• Madu and Kuei propose a strategy process based on plan-do-check-act (see Figure 1.6).




• Page 15, Figure 1.6 A Plan-Do-Check-Act Approach to Strategic Quality Planning




• As quality has become integral to competitiveness, strategic planning for quality has become more important.

• Research shows that quality is still the major competitive concern of CEOs.

• Quality Highlight 1.1 (page 16) show how General Electric has made quality a key strategic imperative.


Marketing Perspective on QualityMarketing Perspective on Quality

• In a trend known as relationship management , marketing has directed its attention toward satisfying the customer and delivering value to the customer.

• Studies show that the value of the loyal customer is much greater than an individual transaction.

• If all customers are satisfied, sales increase exponentially!

• This increases the importance of high levels of customer service and after-sales support.


Marketing Perspective on QualitySlide 1 of 3


• Nature of Marketing Perspective– Marketing efforts are often focused on

managing perceptions of quality.

– The primary tools for influencing customer perceptions of quality are price and advertising.



• The link between price and quality could be significant if all products were priced based on cost of materials and production only.

• The relationship between advertising and quality is not as straightforward as one would hope.

• Marketing is also concerned about systems.• The marketing system involves the interactions

between the producing organization, the intermediary, and the final consumer ( see Figure 1.7).


OrganizationOrganization



A Marketing System ( Figure 1.7)

IntermediaryIntermediary

CustomerCustomer

PaymentOffering

Offering

Offering

Payment

Payment



• Because of the relationship, it is often very difficult for firms and organizations to agree on who the customer is.

• Although it might always seem obvious who the customer is to the casual observer, it is not always clear to those who are involved with the business.




• Focus on Service– Another important contribution of the

marketing perspective has been the focus on service.

– This focus is on service at the time of the transaction and after-sales support.

– Customer service surveys are important tools for assessing the multiple dimensions of quality.



• The role of marketing in design has been to bring the voice of the customer into the design process.

• Customer service surveys are important tools for assessing the multiple dimensions of quality.



• The marketing perspective on quality is unique because the customer is the focus of marketing-related quality improvement.

• In trying to satisfy customer needs, marketing often wants to develop specialized products for different customers to perfectly satisfy customer needs.

• This can make life more difficult for producers.


Financial Perspective on QualitySlide 1 of 4


• Nature of the Financial Perspective– One of the most commonly asked questions

about quality management is “will it pay us financial benefits?”

– The Answer to this question is an unqualified”maybe”.

– Management was pursuing quality improvement as a means of reducing waste and increasing profitability.


Financial Perspective on QualityFinancial Perspective on Quality

• Nature of the Financial Perspective

- Implemented correctly, improved quality reduce waster and can lead to reduce cost and improved profitability.

- However, these returns tend to be long term rather than short term.



• Nature of the Financial Perspective– W. Edwards Deming made the first

theoretical attempt to link quality improvements to financial results through the “Deming Value Chain.” ( see Figure 1.8)




The Deming Value Chain ( Figure 1.8)

ImproveQuality

ProductivityImproves

Capturethe

Market

Provide Jobsand More Jobs

Stay inBusiness

Cost decrease ( see next slide)


Financial Perspective on Quality--The Deming Value Chain ( Figure 1.8)

Financial Perspective on Quality--The Deming Value Chain ( Figure 1.8)

- Deming linked quality improvement to reduction of defects and improved organizational performance.

- He also stressed quality as a way to increase employment.

- Cost decrease because of less rework, fewer mistakes, fewer delays, snags; better use of machine-time and materials



• The goal of finance is to maximize return for a given level of risk.

• Juran stated that “the language of management is money.”

• One way to translate quality concerns is to identify and measure the costs of quality.

• Trade-off and break-even analyses can be performed using the various costs of quality.



• The relationship between quality improvement and financial success is confounded by several intervening variables.

• Top management involvement that is limited to lip service often results in great expenditure, and great effort, but eventually failure.

• The pursuit of quality does not safeguard a company against bad management.



• Another concept that affects financial officers’ perceptions of quality improvement is the law of diminishing marginal returns.




• Law of Diminishing Marginal Returns– According to this law, there is a point at

which investments in quality improvement will become uneconomical.

– The figure on the next slide ( Figure 1.9) shows a quadratic economic quality level model.

– We will resolution this issues for chapter 4.


Financial Perspective on Quality

Slide 4 of 4


Slide 4 of 4Basic Economic Quality Level Model ( Figure 1.9)

Quality

Cost

Costs of Improving

Quality

Losses due to poor quality

Total Quality Costs = Sum of Losses and Costs

Optimum Quality Level

MinimumCost




• According to this law, the pursuit of higher levels of quality will result in higher expenditures.

• To invest beyond the minimum cost level will result in non-economic decisions.

• In summary, the financial perspective on quality relies more on quantified, measurable, result-oriented thinking.


Human Resource Perspective on QualitySlide 1 of 3


• Nature of Human Resource Perspective– Understanding the human resource

perspective on quality is essential as it is impossible to implement quality without the commitment and action of employees.


Human Resource Perspective on QualityHuman Resource Perspective on Quality

• Nature of Human Resource Perspective

- Although leadership is an important antecedent to successful quality efforts, the involvement and participation of employees is just as key.




• Related Concepts– Employee Empowerment

• Empowering employees involves moving decision making to the lowest level in the organization.

• The topic of empowerment is closely related to Organizational Design.

• Quality management flourishes where the workers’ and the company’s needs are closely aligned.



• Related Concepts– Job Analysis

• Involves collecting detailed information about a particular job.

• The information is used to define a job description that is used in setting pay levels.



• Training allows firms to standardize the approaches their employees use in solving unstructured problems.

• Vertical deployment of quality management – top manager and low-ranking employees within a department will use similar processes for solving problems.

• Horizontal deployment of quality management – Different departments and units within a firm will use similar approaches to solving problems,




• Related Concepts (continued)

– 360-Degree Evaluation

• Human resources departments typically administer and oversee performance appraisal and evaluation.

• Although some critics , such as Deming , have found this system ineffective ,many companies believe performance evaluations are a key method for motivating employees.




– 360-Degree Evaluation

• A performance measurement system in which an employee’s peers, supervisors, and subordinates are involved in evaluating the worker’s performance.

• This approach seems to be effective in improving teaching performance.




– Total Quality Human Resource Management (TQHRM)

• Table 1.3 shows differences between traditional HR and TQHRM.

• TQHRM involves many of the concepts of quality management to provide a more supportive and empowered environment.



• Table 1.3 HRM versus TQHRM

Traditional HRM TQHRM

ProcessCharacteristics

ContentCharacteristics

Unilateral roleCentralizationPullAdministrative

NomotheticCompartmentalizedWorker-orientedPerformance measuresJob-based

Consulting roleDecentralizationReleaseDevelopmental

PluralisticHolisticSystem-orientedSatisfaction measuresPerson-based


Is quality management its own functional discipline?


• Wall Street Journal reveal job openings for quality managers and engineers.

• The role of these departments and specialists are changing in the new century of quality.

• Historically, the quality management department performed a policing function in the firm.

• Quality managers will responsible for quality conformance and spent their time ferreting out causes of defects.




• In the late 1950s, Armand Feigenbaum and others showed the limitations of this approach.

• The movement began toward the total involvement of employees spawning total quality management (TQM).

• With total involvement, the role of the quality department moved from a technical, inspection role to a supportive training and coaching role.




• As a manager or a quality specialist, you will be ask to either arrange or perform quality-related training.

• The ability to conduct effective training and to facilitate teams are important tools for the quality professional.




• Is quality management its own discipline? Yes and no.

• Consultants, quality engineers, trainers, coaches, and managers are still needed.

• A strong knowledge of quality is best coupled with technical experts in other areas such as materials management, finance, accounting, operations management, human resources management, strategy, industrial engineering, or myriad other disciplines.


The Three Spheres of QualityThe Three Spheres of Quality

• One way to conceptualize the field of quality management is known as three spheres of quality.

• These spheres are quality control, quality assurance, and quality management, and their functions overlap as seen in Figure 1.10.


The Three Spheres of QualitySlide 1 of 4 ( Figure 1.10)

The Three Spheres of QualitySlide 1 of 4 ( Figure 1.10)

Quality Management

Quality Assurance

Quality Control


The Three Spheres of QualitySlide 2 of 4


• Quality Control– The control process is based on the scientific methods.– Includes phases of analysis, relation, and

generalization. – Activities relating to quality control include:

• Monitoring process capability and stability

• Measuring process performance

• Reducing process variability

• Optimizing processes to nominal measures

• Performing acceptance sampling

• Developing and maintaining control charts




• Quality Assurance– Refers to activities associated with

guaranteeing the quality of a product or service.

– These activities are design-related.– Quality control is reactive rather than

proactive by detecting quality problems after they occur.

– The best way to assure quality is in the design of product, service, and processes.



• Quality Assurance- Quality assurance activities include tasks

such as:• Failure mode and effects analysis• Concurrent engineering• Experimental Design• Process improvements• Design team formation and management • Off-line experimentation• Reliability/durability product testing




• Quality Management– The management processes that overarch and

tie together the control and assurance activities make up quality management.

– Quality Highlight 1.2 ( see page 24) is an example of a company with effective quality management.

– Quality is the responsibility of all management, not just quality managers.



• Quality Management- For this reason, a variety of managers,

supervisors, and employees are involved in quality management activities such as next slide.



• Activities of Quality Management - Planning for quality improvement - Creating a quality organizational culture - Providing leadership and support - Providing training and retraining - Designing an organizational system that

reinforces quality ideals - Providing employee recognition - Facilitating organizational communication


Other Perspectives on QualitySlide 1 of 2


• The Value-Added Perspective on Quality– A customer-based perspective on quality

that is utilized by services, manufacturing, and public sector organizations involves the concept of value.

– Involves a subjective assessment of the efficacy of every step of the process for the customer.


Other Perspectives on Quality Other Perspectives on Quality

• The Value-Added Perspective on Quality - A value-added activity can be pinpointed by

asking, “would this activity matter to the customer?”

- A value-added activity will have economic value to the customer.




• Cultural Perspectives on Quality– International marketers have long noted

that there are differences in tastes and preferences between cultures and nations.

– As a result, approaches to quality improvement may differ across culture.


Other Perspectives on QualityOther Perspectives on Quality

• Cultural Perspectives on Quality– It is not so obvious that approaches to

quality improvement may differ according to culture.

– Cultures that are more class-conscious or command-and-control oriented might have trouble delegating decision making to lower levels of employees.


Contingency Approach to Quality Contingency Approach to Quality

• Arriving at a Common Understanding of Quality Using a Contingency Approach– Contingency theory presupposes that there

is no theory or method for operating a business that can be applied in all situations.

– As a result, a coherent quality strategy will need to address key environmental variables.

Chapter 1 ©2001 Prentice-Hall S. Thomas Foster, Jr. Boise State University Slides Prepared by Bruce...

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