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UNIT I

INTRODUCTION TO QUALITY MANAGEMENT

INTRODUCTION

Todays organization can gain importance on their products and services

embedded with quality .The quality tentacles could be seen everywhere in the

organization which is ultimately called as Total Quality Management. Customer is in

the fore front of the Total Quality Management process because the entire exercise is

focused towards customer satisfaction ultimately ending up with customer delight. The

Total Quality Management helps in shaping for the future. This unit deals with QualityManagement Definitions, TQM framework, Benefits, Awareness and Obstacles,Quality Vision, Mission and Policy Statements, Customer Focus CustomerPerception of Quality, Translating needs into requirements, Customer retention,

Dimensions of Product and Service Quality, Cost of quality.

LEARNING OBJECTIVES

Upon completion of this unit, you will be able to:

Have a feel of Quality Get a framework on TQM Get an introduction on vision Understand the indispensability of the customer Identify the dimensions of product and service quality

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1.1 QUALITY MANAGEMENT DEFINITIONSPrinciples and Philosophies of Quality Management

Quality management is becoming increasingly important to the leadership

and management of all organisations. It is necessary to identify QualityManagement as a distinct discipline of management and lay down universallyunderstood and accepted rules for this discipline.

The ISO technical committee working on the ISO9000 standards hadpublished a document detailing the quality management principles andapplication guidelines. The latest revision (version 2000) of ISO9000 standardsare based on these principles.

Definition of Quality Management Principle

"A quality management principle is a comprehensive and fundamentalrule / belief, for leading and operating an organisation, aimed at continuallyimproving performance over the long term by focusing on customers whileaddressing the needs of all other stake holders".

The eight principles are:

1. Customer-Focused Organisation2. Leadership3. Involvement of People4. Process Approach5. System Approach to Management6. Continual Improvement7. Factual Approach to Decision Making and8. Mutually Beneficial Supplier Relationships.

Now let us examine the principles in detail.

Principle 1 - Customer-Focused Organisation

"Organisations depend on their customers and therefore shouldunderstand current and future customer needs, meet customer requirements andstrive to exceed customer expectations".
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Steps in application of this principle are:

1. Understand customer needs and expectations for products, delivery,price, dependability, etc.

2. Ensure a balanced approach among customers and other stake holders(owners, people, suppliers, local communities and society at large) needsand expectations.

3. Communicate these needs and expectations throughout the organisation.4. Measure customer satisfaction & act on results, and5. Manage customer relationships.

Principle 2 - Leadership

"Leaders establish unity of purpose and direction of the organisation.They should create and maintain the internal environment in which people can

become fully involved in achieving the organisation's objectives."


1. Be proactive and lead by example.2. Understand and respond to changes in the external environment.3. Consider the needs of all stake holders including customers, owners,

people, suppliers, local communities and society at large.4. Establish a clear vision of the organisation's future.5. Establish shared values and ethical role models at all levels of the

organisation.6. Build trust and eliminate fear.7. Provide people with the required resources and freedom to act with

responsibility and accountability.8. Inspire, encourage and recognise people's contributions.9. Promote open and honest communication.10.Educate, train and coach people.11.Set challenging goals and targets, and12.Implement a strategy to achieve these goals and targets.

Principle 3 - Involvement of People

"People at all levels are the essence of an organisation and their fullinvolvement enables their abilities to be used for the organisation's benefit".

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1. Accept ownership and responsibility to solve problems.2. Actively seek opportunities to make improvements, and enhance

competencies, knowledge and experience.

3. Freely share knowledge & experience in teams.4. Focus on the creation of value for customers.5. Be innovative in furthering the organisations objectives.6. Improve the way of representing the organisation to customers, local

communities and society at large.7. Help people derive satisfaction from their work, and8. Make people enthusiastic and proud to be part of the organisation.

Principle 4 - Process Approach

"A desired result is achieved more efficiently when related resources andactivities are managed as a process."


1. Define the process to achieve the desired result.2. Identify and measure the inputs and outputs of the process.3. Identify the interfaces of the process with the functions of the

organisation.4. Evaluate possible risks, consequences and impacts of processes on

customers, suppliers and other stake holders of the process.5. Establish clear responsibility, authority, and accountability for managingthe process.

6. Identify internal and external customers, suppliers and other stake holdersof the process, and

7. When designing processes, consider process steps, activities, flows,control measures, training needs, equipment, methods, information,materials and other resources to achieve the desired result.

Principle 5 - System Approach to Management

"Identifying, understanding and managing a system of interrelatedprocesses for a given objective improves the organisation's effectiveness andefficiency."


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1. Define the system by identifying or developing the processes that affect agiven objective.

2. Structure the system to achieve the objective in the most efficient way.3. Understand the interdependencies among the processes of the system.4. Continually improve the system through measurement and evaluation,

and5. Estimate the resource requirements and establish resource constraints

prior to action.

Principle 6 - Continual Improvement

"Continual improvement should be a permanent objective of theorganisation."


1. Make continual improvement of products, processes and systems anobjective for every individual in the organisation.

2. Apply the basic improvement concepts of incremental improvement andbreakthrough improvement.

3. Use periodic assessments against established criteria of excellence toidentify areas for potential improvement.

4. Continually improve the efficiency and effectiveness of all processes.5. Promote prevention based activities.6. Provide every member of the organisation with appropriate education

and training, on the methods and tools of continual improvement such asthe Plan-Do-Check-Act cycle, problem solving, process re-engineering,and process innovation.

7. Establish measures and goals to guide and track improvements, and8. Recognise improvements.

Principle 7 -Factual Approach to Decision Making

"Effective decisions are based on the analysis of data and information."


1. Take measurements and collect data and information relevant to theobjective.

2. Ensure that the data and information are sufficiently accurate, reliable andaccessible.

3. Analyse the data and information using valid methods.4. Understand the value of appropriate statistical techniques, and

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5. Make decisions and take action based on the results of logical analysisbalanced with experience and intuition.

Principle 8 - Mutually Beneficial Supplier Relationships

"An organisation and its suppliers are interdependent, and a mutuallybeneficial relationship enhances the ability of both to create value."


1. Identify and select key suppliers.2. Establish supplier relationships that balance short-term gains with long-

term considerations for the organisation and society at large.3. Create clear and open communications.4. Initiate joint development and improvement of products and processes.5. Jointly establish a clear understanding of customers' needs.6. Share information and future plans, and7. Recognise supplier improvements and achievements.

1.2 TQM FRAMEWORK, BENEFITS, AWARENESS AND OBSTACLESTotal Quality Management

FIGURE 1.1

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TQM requires that the company maintain this quality standard in all aspects ofits business. This requires ensuring that things are done right the first time andthat defects and waste are eliminated from operations.

Origins

"Total Quality Control" was the key concept of Armand Feigenbaum's1951 book, Quality Control: Principles, Practice, and Administration, a book that wassubsequently released in 1961 under the title, Total Quality Control (ISBN 0-07-020353-9). Joseph Juran, Philip B. Crosby, and Kaoru Ishikawa also contributedto the body of knowledge now known as TQM.

The American Society for Quality says that the term Total QualityManagement was first used by the U.S. Naval Air Systems Command "todescribe its Japanese-style management approach to quality improvement." Thisis consistent with the story that the United StatesNavyPersonnel Research andDevelopment Center began researching the use of statistical process control(SPC); the work of Juran, Crosby, and Ishikawa; and the philosophy of W.Edwards Deming to make performance improvements in 1984. This approachwas first tested at the North Island Naval Aviation Depot.

In his paper, "The Making of TQM: History and Margins of the Hi(gh)-Story" from 1994, Xu claims that "Total Quality Control" is translated incorrectlyfrom Japanese since there is no difference between the words "control" and"management" in Japanese. William Golimski refers to Koji Kobayashi, former

CEO of NEC, being the first to use TQM, which he did during a speech when hegot the Deming Prize in 1974.

TQM in Manufacturing

Quality assurance through statistical methods is a key component in amanufacturing organisation, where TQM generally starts by sampling a randomselection of the product. The sample can then be tested for things that mattermost to the end users. The causes of any failures are isolated, secondarymeasures of the production process are designed, and then the causes of the

failure are corrected. The statistical distributions of important measurements aretracked. When parts' measures drift into a defined "error band", the process isfixed. The error band is usually a tighter distribution than the "failure band", sothat the production process is fixed before failing parts can be produced.

It is important to record not just the measurement ranges, but whatfailures caused them to be chosen. In that way, cheaper fixes can be substitutedlater (say, when the product is redesigned) with no loss of quality. After TQM
http://en.wikipedia.org/wiki/Quality_standardhttp://en.wikipedia.org/wiki/Armand_Feigenbaumhttp://en.wikipedia.org/w/index.php?title=Special:Booksources&isbn=0070203539http://en.wikipedia.org/w/index.php?title=Special:Booksources&isbn=0070203539http://en.wikipedia.org/wiki/Joseph_Juranhttp://en.wikipedia.org/wiki/Philip_B._Crosbyhttp://en.wikipedia.org/wiki/Kaoru_Ishikawahttp://en.wikipedia.org/wiki/American_Society_for_Qualityhttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Department_of_the_Navyhttp://en.wikipedia.org/w/index.php?title=Personnel_Research_and_Development_Center&action=edithttp://en.wikipedia.org/w/index.php?title=Personnel_Research_and_Development_Center&action=edithttp://en.wikipedia.org/wiki/Statistical_process_controlhttp://en.wikipedia.org/wiki/W._Edwards_Deminghttp://en.wikipedia.org/wiki/W._Edwards_Deminghttp://en.wikipedia.org/w/index.php?title=North_Island_Naval_Aviation_Depot&action=edithttp://en.wikipedia.org/wiki/1994http://en.wikipedia.org/w/index.php?title=William_Golimski&action=edithttp://en.wikipedia.org/w/index.php?title=Koji_Kobayashi&action=edithttp://en.wikipedia.org/wiki/NEC_Corporationhttp://en.wikipedia.org/wiki/Deming_Prizehttp://en.wikipedia.org/wiki/1974http://en.wikipedia.org/wiki/Quality_assurancehttp://en.wikipedia.org/wiki/Statistical_methodhttp://en.wikipedia.org/wiki/Sampling_%28statistics%29http://en.wikipedia.org/wiki/Failurehttp://en.wikipedia.org/wiki/Statistical_distributionhttp://en.wikipedia.org/wiki/Errorhttp://en.wikipedia.org/wiki/Errorhttp://en.wikipedia.org/wiki/Statistical_distributionhttp://en.wikipedia.org/wiki/Failurehttp://en.wikipedia.org/wiki/Sampling_%28statistics%29http://en.wikipedia.org/wiki/Statistical_methodhttp://en.wikipedia.org/wiki/Quality_assurancehttp://en.wikipedia.org/wiki/1974http://en.wikipedia.org/wiki/Deming_Prizehttp://en.wikipedia.org/wiki/NEC_Corporationhttp://en.wikipedia.org/w/index.php?title=Koji_Kobayashi&action=edithttp://en.wikipedia.org/w/index.php?title=William_Golimski&action=edithttp://en.wikipedia.org/wiki/1994http://en.wikipedia.org/w/index.php?title=North_Island_Naval_Aviation_Depot&action=edithttp://en.wikipedia.org/wiki/W._Edwards_Deminghttp://en.wikipedia.org/wiki/W._Edwards_Deminghttp://en.wikipedia.org/wiki/Statistical_process_controlhttp://en.wikipedia.org/w/index.php?title=Personnel_Research_and_Development_Center&action=edithttp://en.wikipedia.org/w/index.php?title=Personnel_Research_and_Development_Center&action=edithttp://en.wikipedia.org/wiki/Department_of_the_Navyhttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/American_Society_for_Qualityhttp://en.wikipedia.org/wiki/Kaoru_Ishikawahttp://en.wikipedia.org/wiki/Philip_B._Crosbyhttp://en.wikipedia.org/wiki/Joseph_Juranhttp://en.wikipedia.org/w/index.php?title=Special:Booksources&isbn=0070203539http://en.wikipedia.org/w/index.php?title=Special:Booksources&isbn=0070203539http://en.wikipedia.org/wiki/Armand_Feigenbaumhttp://en.wikipedia.org/wiki/Quality_standard

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has been in use, it's very common for parts to be redesigned so that criticalmeasurements either cease to exist, or become much wider.

It took people a while to develop tests to find emergent problems. Onepopular test is a "life test" in which the sample product is operated until a part

fails. Another popular test is called "shake and bake", in which the product ismounted on a vibrator in an environmental oven, and operated at progressivelymore extreme vibration and temperatures until something fails. The failure isthen isolated and engineers design an improvement.A commonly-discovered failure is for the product to disintegrate. If fasteners fail,the improvements might be to use measured-tension nutdrivers to ensure thatscrews don't come off, or improved adhesives to ensure that parts remain glued.If a gearbox wears out first, a typical engineering design improvement might beto substitute a brushless stepper motor for a DC motor with a gearbox. Theimprovement is that a stepper motor has no brushes or gears to wear out, so it

lasts ten or more times as long. The stepper motor is more expensive than a DCmotor, but cheaper than a DC motor combined with a gearbox. The electronicsare radically different, but equally expensive. One disadvantage might be that astepper motor can hum or whine, and usually needs noise-isolating mounts.

Often, a "TQMed" product is cheaper to produce because ofefficiency/performance improvements and because there's no need to repairdead-on-arrival products, which represents an immensely more desirableproduct.

TQM and contingency-based research

TQM has not been independent of its environment. In the context ofmanagement accounting systems (MCSs), Sim and Killough (1998) show thatincentive pay enhanced the positive effects of TQM on customer and qualityperformance. Ittner and Larcker (1995) demonstrated that product focused TQMwas linked to timely problem solving information and flexible revisions toreward systems. Chendall (2003) summarizes the findings from contingency-based research concerning management control systems and TQM by noting thatTQM is associated with broadly based MCSs including timely, flexible,externally focused information; close interactions between advanced

technologies and strategy; and non-financial performance measurement.

TQM, just another Management fad?

Abrahamson (1996) argued that fashionable management discourse suchas Quality Circles tends to follow a lifecycle in the form of a bell curve. Ponzi andKoenig (2002) showed that the same can be said about TQM, which peaked
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between 1992 and 1996, while rapidly losing popularity in terms of citations afterthese years. Dubois (2002) argued that the use of the term TQM in managementdiscourse created a positive utility regardless of what managers meant by it(which showed a large variation), while in the late 1990s the usage of the termTQM in implementation of reforms lost the positive utility attached to the mere

fact of using the term and sometimes associations with TQM became evennegative. Nevertheless, management concepts such as TQM leave their traces, astheir core ideas can be very valuable. For example, Dubois (2002) showed thatthe core ideas behind the two management fads Reengineering and TQM,without explicit usage of their names, can even work in a synergistic way.

Benefits of TQM

TQM as a slogan has been around since 1985. TQM provides a managementsystem, using various combinations of tools that have been in existence for much

longer. Each tool has its own use, with benefits that follow. TQM leads to asynergy of benefits.

Through the application of TQM, senior management will empower alllevels of management, including self management at worker level, tomanage quality systems.

Outlined below are some advantages to be gained by a hotel, from the useof TQM. These are split into the five key areas of TQM.

Continuous Improvement. People wish to improve themselves and get abetter lifestyle. If the desire for individual improvement is transferred tosystems within the workplace, then these systems will improve.

Management can, at times, be a restraint to innovation through relying onhistorical systems. This will result in "always do what you have alwaysdone and you will always get what you have always got".

A good chef will know how best to prepare and present food. If given thefreedom to innovate then the standard of food will improve.

When mistakes are made by staff, it is rarely through a desire to make amistake. The system used is at fault. With departments constantly strivingfor improvement, hotel systems will improve, leading to reduced internalcosts and a better service for customers.

Multifunctional Teams. Within the hotel, departments are customers andsuppliers for each other. A waiter is the chef's supplier giving informationon what has been ordered from the menu including any special requestsabout how the food should be prepared (medium, well done etc). Whenthe food is ready, the roles are reversed. The chef becomes the waiter'ssupplier providing the food.

If the hotel's organization is structured in such a way, that people indifferent departments work with each other to solve problems as a team,
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traditional inter departmental barriers will be removed. Interdepartmental communication on a day to day basis is essential foreffective management.

Multifunctional teamwork allows the problems and requirements of eachdepartment to be passed on at worker level, throughout the hotel. This

will lead to a better understanding of how the hotel systems work, by allemployees.

Individuals will work with each other identifying causes of problemsrather than blaming each other for the results of a problem. This willremove the blame culture.

Reduction in Variation. Systems are influenced by many elements whichcause variation. For example, as new staffs are employed, they will dotheir jobs in a different way to previous staff. This can lead to a change inthe service provided by the hotel. If such influences can be minimized,then standards of service can be maintained.

This can be achieved by documenting systems. Giving workers theopportunity to own their processes by letting them do this documentationboosts morale. Also, the documentation will accurately reflect what isactually done rather than what management thinks is done. Initially thiswill lead to guests receiving a known standard of service which will resultin repeat business.

Once the standard is stabilized, changes made to improve the service canbe measured and directly linked to the improvement made.

Supplier Integration. By involving your suppliers directly with your staff,two way communications can be established. Your chef can explain the

standard of food required. Your supplier can explain the difficulties insupplying such food. Any problems that arise can be solved jointly, usingyour knowledge of hotel systems, the chef's knowledge of food and thesuppliers expertise in supply systems.

This prevents waste through returned goods for the supplier. Expensethrough:

Obtaining replacements from another supplier. A drop in service by not being able to provide what was intended. Education and Training. Through education, management and staff are

given the tools to achieve all the above. Education provides for guidedinnovation from all levels. Training, which is a cost, shows a commitmentby management to:

Individual staff self improvement, which is a motivator. TQM. Summary. Staff will collectively provide continual improvement of hotel

systems. By working together, communication/departmental barriers willbe broken down. The standard of service can be set, maintained and thenimproved. Suppliers will be working with rather than working for the

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hotel. The standard of staff and management will improve througheducation. The adoption of a new attitude to work, by everyoneembracing the ideas of TQM.

The primary, long-term benefits of TQM in the public sector include better

services, reduced costs and satisfied customers. Progressive improvement in themanagement systems and the quality of services offered result in increasinglysatisfied customers.

In addition a number of other benefits are:

observable including improved skills, morale and confidence among public service staff, enhanced relationships between governments and its constituents, increased government accountability and transparency and Improved productivity and efficiency of public services. A philosophy that improves business from top to bottom A focused, systematic and structured approach to enhancing customer's

satisfaction

Process improvement methods that reduce or eliminate problems i.e. nonconformance costs

Tools and techniques for improvement - quality operating system Delivering what the customer wantss in terms of service, product and the

whole experience

Intrinsic motivation and improved attitudes throughout the workforce Workforce is proactive - prevention orientated Enhanced communication Reduction in waste and rework Increase in process ownership- employee involvement and empowerment Everyone from top to bottom educated Improved customer/supplier relationships (internally & externally) Market competitiveness Quality based management system for ISO 9001:2000 certification

1.3 Quality Vision, Mission and Policy StatementsVision

SAP's vision for quality management is to consistently deliver high-qualitysolutions focused on improving customer satisfaction.

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Mission

The mission of quality management at SAP is to:

Research and develop new methods and standards Proactively communicate and share knowledge Apply the knowledge to enhance our products, processes, and services Continually monitor and improve our performance against set targets Strive for prevention of failure, defect reduction, and increased customer

satisfaction

Policy

Quality is the basic requirement for the satisfaction of our customers and the

resulting competitiveness and economic success of SAP. The Executive Boarddedicates itself to implementing and monitoring the following global qualitypolicy principles:

SAP strives to further intensify the close cooperation with its internal andexternal customers and partners, and the performance-orientedcommunication with its suppliers.

The continual improvement of our products, processes, and servicescombined with innovation is at the center of our endeavors. For thispurpose, we strive to further optimize our organizational, operational,

and technical processes. Quality management supports the business-oriented behavior of all parties involved.

Promoting employee satisfaction and quality awareness are majormanagerial functions in the entire company.

Commitment, professional competence, and personal responsibility arerequired from all SAP employees to achieve the goals based on the globalquality policy principles. Employees know the input requirements tocomply with quality in their area. Internal education is provided to helpSAP employees fulfill their tasks.

The quality goals based on this policy are regularly defined, implemented,and monitored by the responsible parties within the framework of qualitymanagement at SAP.

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Honeywell Technology Solutions Lab

HTSL Vision

Be the premier growth company delivering unsurpassed value to Honeywell customers

by providing Innovative Total Solutions and Services enhancing the safety, security,comfort, energy efficiency and productivity of the environment where they live, work and

travel.

HTSL Mission

Maximize the value and impact on Honeywell businesses and customersby providing Technology Product and Business Solutions and Services settingstandards of world class performance.

HTSL Quality Policy

To delight our customers by providing six sigma quality total solutions,demonstrating value and continuous improvement through competent anddisciplined professionals.

Quality is the basis for the long-term profitability and growth of K-Tron.In the industries we serve, we strive to be every customers first choice qualitysupplier.

Our quality policy is based on:

Customer Satisfaction

Our organization is focused on our customers. We are committed tosatisfying the needs and expectations of our customers and other interestedparties, including their economic, social and environmental concerns.

Continual Improvements

We are committed to implementing continual improvements to every K-Tron process, product, service and quality management system.

Quality Involvement

Top management reviews our quality policies and objectives to ensuretheir continual suitability and the framework of the quality management system.We believe that they complement our mission, vision and strategy. The qualitypolicies, objectives, resource needs and effectiveness of the quality managementsystem are communicated and understood within the organization.

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Employee awareness, development, involvement and self-responsibilityare essential to the effectiveness of our quality management system. Allemployees are challenged to do it right the first time.

Adherence to our quality management system is a permanent

commitment of all employees, suppliers and partners of K-Tron. We obligateourselves to maintain a quality management system in accordance with ISO9001:2000.

Mission and Vision

Vision

Lead Defense Acquisition to meet DoD's needs with excellence every timeMission

Identify and develop best acquisition policies and practices to promoteflexibility and take advantage of the global marketplace

Integrate policy creation, training, and communication to quickly andeffectively deliver new policies and practices to the community

Provide timely and sound acquisition advice to Federal leadership andDoD personnel as the DoD Acquisition Ombudsman

Assist the acquisition community to obtain the best quality weapons,equipment, and services for war fighters

Lead the DoD acquisition, technology, and logistics community inrecruiting, retaining, and training the right workforce with the rightskills in the right place at the right time with the right pay

Leverage use of technology to provide best possible tools to theacquisition workforce

Continuously assess the results of our efforts and make improvements1.4 CUSTOMER FOCUS CUSTOMER PERCEPTION OF QUALITY,TRANSLATING NEEDS INTO REQUIREMENTS, CUSTOMERRETENTION

Customer perception of Quality

There are three key elements of quality: customer, process and employee.Everything we do to remain a world-class quality company focuses on thesethree essential elements.

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the customer

Delighting Customers

Customers are the center of GE's universe: they define quality. They expect

performance, reliability, competitive prices, on-time delivery, service, clear andcorrect transaction processing and more. In every attribute that influencescustomer perception, we know that just being good is not enough. Delighting ourcustomers is a necessity. Because if we don't do it, someone else will!

...the Process

Outside-In Thinking

Quality requires us to look at our business from the customer's perspective, not

ours. In other words, we must look at our processes from the outside-in. Byunderstanding the transaction lifecycle from the customer's needs and processes,we can discover what they are seeing and feeling. With this knowledge, we canidentify areas where we can add significant value or improvement from theirperspective.

FIGURE 1.2

...the Employee

Leadership Commitment

People create results. Involving all employees is essential to GE's qualityapproach. GE is committed to providing opportunities and incentives foremployees to focus their talents and energies on satisfying customers.All GE employees are trained in the strategy, statistical tools and techniques ofSix Sigma quality. Training courses are offered at various levels:

Quality Overview Seminars: basic Six Sigma awareness. Team Training: basic tool introduction to equip employees to participate

on Six Sigma teams. Master Black Belt, Black Belt and Green Belt Training: in-depth quality

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training that includes high-level statistical tools, basic quality controltools, Change Acceleration Process and Flow technology tools.

Design for Six Sigma (DFSS) Training: prepares teams for the use of statisticaltools to design it right the first time.

Quality is the responsibility of every employee. Every employee must beinvolved, motivated and knowledgeable if we are to succeed.

Our Customers Feel the Variance, Not the Mean

Often, our inside-out view of the business is based on average or mean-basedmeasures of our recent past. Customers don't judge us on averages, they feel thevariance in each transaction, each product we ship. Six Sigma focuses first onreducing process variation and then on improving the process capability.

Customers value consistent, predictable business processes that deliver world-class levels of quality. This is what Six Sigma strives to produce.

GE success with Six Sigma has exceeded our most optimistic predictions.Across the company, GE associates embrace Six Sigma's customer-focused, data-driven philosophy and apply it to everything we do. We are building on thesesuccesses by sharing best practices across all of our businesses, putting the fullpower of GE behind our quest for better, faster customer solutions.

Defining Relationships

Why define Relationships between Lists?

Relationships between Lists indicate how the two lists are related to eachother. They are generally used to prioritize one List based upon the priorities ofanother list. Relationships can be defined by answering a particular question foreach cell in a Matrix. For example, the Relationships between CustomerRequirements and Design Measures might be defined by asking "To what degreedoes this Measure predict the Customer's Satisfaction with this Requirement?"By asking this same question consistently for each Measure and Requirementcombination, a set of Relationships will be defined in the Matrix which will helpto determine which Measures are most important to control in order to achieve adesired level of Customer Satisfaction. Another question which can be asked inorder to define Relationships is "What percent of this Requirement is handled bythis Design Measure? The Relationships defined using this question would resultin the highest priority being assigned to the Measures which control most of thefunctionality. These may not be the same as the Measures defined in order topredict Customer Satisfaction. Given these examples, you can see that it is critical

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that a team understand what question they are trying to answer before they startdefining Relationships. It is also critical that they use the same questionconsistently. By doing so, the team will be able to prioritize the Output Listaccurately.

How can Relationships be defined?

Relationships are defined within the Matrix Window ofQFD/CAPTURE. There are two different methods of defining the Relationships.The Spreadsheet View provides a familiar format for entering the relationshipvalues. The Tree View provides a snapshot of the Relationship values for eachInput row, and makes it easier to assess each Relationship's value relative to theother Relationships. The Spreadsheet View presents the Lists being related in aSpreadsheet format. The entries in the Input Lists form the row headings and theentries in the Output Lists form the column headings. The cells within the

spreadsheet contain the relationships between the Input and Output entries. TheTree View presents all of the Output List Entries which are related to thecurrently selected Input List Entry using a Tree structure. This allows the team toconsider the relative strength of the Relationships. It is equivalent to defining anentire row of relationships across a Matrix.

What scales should we use?

The scales used to define the relationships can have a significant impacton the Prioritization of the Output List Entries. The main consideration is thetradeoff between the number of levels in a scale, the speed of relationshipdefinition, and the relative accuracy of the resulting Prioritization. In general, themore levels in the scale, the more accurate the relative prioritization. Thedifferent values of the scale allow the team to indicate the levels of relationshipsthat the Output List Entries have with the Input List Entries. For example, theteam may choose to use relationships with values of 1 through 10. Using thisscale a value of 6 would indicate that one Output List Entry is twice as importantto the satisfaction of an Input List Entry as an Output List Entry with a value of3. Relationship definition usually goes much faster if the team limits their choicesof Relationship values to just a few. Standard QFD practice usually supports thevalues 1, 3, and 9. This Standard QFD Scale accentuates the Strong Relationships

(value of 9). Output List Entries with several Strong Relationships to Input ListEntries will tend to be given a higher level of priority than Output List Entriesrelated to many Input List Entries with either moderate or weak values. Othercommon scales include 1, 2, 3 and 1, 3, 5. With greater frequency, teams aredefining relationships using advanced methods such as the Analytic HierarchyProcess to establish scales with an infinite number of levels. The resultingrelationship values usually represent the percent contribution of each Output

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List Entry to the selected Input List Entry. QFD/CAPTURE supports all of thesedifferent scales. Each time a new matrix is created, the user is given theopportunity to specify which of the standard scales will be used for therelationships. You may define your own unique scales as well. The software willalso allow the team to define relationship values as real numbers that represent

percentages.

Identifying Tradeoffs

Why evaluate Tradeoffs?

The tradeoffs, located in the "Roof" of the House of Quality, indicate thesynergistic or detrimental impacts of changes in the Design Measures. They areused to identify critical compromises in the design. Since these compromises arelikely to be encountered sooner or later, they may as well be examined as part of

the QFD effort so that any required design changes are as inexpensive aspossible.

How should we evaluate Tradeoffs?

As with other matrices, the team should agree upon the question that theywill ask in order to define the Relationships of this Matrix. A common questionused is "If we improve our performance against this Measure, what is the impacton this other Measure? The team will determine if improving performance of oneMeasure helps or hurts the product's performance against another Measure.Generally, positive and negative values are used to indicate the positive ornegative impact. The Tradeoffs Scale provided by QFD/CAPTURE can be usedas a scale for Relationships defined within this Matrix. QFD/CAPTURE allows ateam to capture the tradeoffs it identifies. A matrix is created to capture thetradeoff information. One list forms both the input and the output of the matrix.

How should we document Actions?

If a tradeoff is identified, there is usually some Action which is required inorder to reduce the impact or work around the potential compromise. TheseActions can be documented in several ways. One approach is to create a

document within QFD/CAPTURE and record each action as a paragraph withinthe document. Another approach would be to define a List of Actions. Thiswould give the team the opportunity to relate Actions with the CustomerRequirements, Design Measures, or any other List defined in the project. Thisapproach would support prioritization of the Actions based upon their affect onthe satisfaction of the related Input List.

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1.5 DIMENSIONS OF PRODUCT AND SERVICE QUALITY

When it comes to measuring the quality of your services, it helps tounderstand the concepts of product and service dimensions. Users may want akeyboard that is durable and flexible for using on the wireless carts. Customers

may want a service desk assistant who is empathetic and resourceful whenreporting issues. Quality is multidimensional. Product and service quality arecomprised of a number of dimensions, which determine how customerrequirements are achieved. Therefore it is essential that you consider the entiredimension that may be important to your customers.

Product quality has two dimensions

Physical dimension - A product's physical dimension measures thetangible product itself and includes such things as length, weight, and

temperature. Performance dimension - A product's performance dimension measures

how well a product works and includes such things as speed and capacity.

While performance dimensions are more difficult to measure and obtainwhen compared to physical dimensions, but the efforts will provide more insightinto how the product satisfies the customer.

Like product quality, service quality has several dimensions

Responsiveness - Responsiveness refers to the reaction time of the service.

Assurance - Assurance refers to the level of certainty a customer hasregarding the quality of the service provided.

Tangibles - Tangibles refers to a service's look or feel. Empathy - Empathy is when a service employee shows that she

understands and sympathizes with the customer's situation. The greaterthe level of this understanding, the better. Some situations require moreempathy than others.

Reliability - Reliability refers to the dependability of the service providersand their ability to keep their promises.

The quality of products and services can be measured by their dimensions.Evaluating all dimensions of a product or service helps to determine how wellthe service stacks up against meeting the customer requirements.

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Quality Framework

Garvin proposes eight critical dimensions or categories of quality that canserve as a framework for strategic analysis: Performance, features, reliability,conformance, durability, serviceability, aesthetics, and perceived quality.

1. Performance

Performance refers to a product's primary operating characteristics. For anautomobile, performance would include traits like acceleration, handling,cruising speed, and comfort. Because this dimension of quality involvesmeasurable attributes, brands can usually be ranked objectively on individualaspects of performance. Overall performance rankings, however, are moredifficult to develop, especially when they involve benefits that not everycustomer needs.

2. Features

Features are usually the secondary aspects of performance, the "bells andwhistles" of products and services, and those characteristics that supplementtheir basic functioning. The line separating primary performance characteristicsfrom secondary features is often difficult to draw. What is crucial is that featuresinvolve objective and measurable attributes; objective individual needs, notprejudices, affect their translation into quality differences.

3. Reliability

This dimension reflects the probability of a product malfunctioning orfailing within a specified time period. Among the most common measures ofreliability are the mean time to first failure, the mean time between failures, andthe failure rate per unit time. Because these measures require a product to be inuse for a specified period, they are more relevant to durable goods than toproducts or services that are consumed instantly.

4. Conformance

Conformance is the degree to which a product's design and operatingcharacteristics meet established standards. The two most common measures offailure in conformance are defect rates in the factory and, once a product is in thehands of the customer, the incidence of service calls. These measures neglectother deviations from standard, like misspelled labels or shoddy construction,that do not lead to service or repair.

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5. Durability

A measure of product life, durability has both economic and technicaldimensions. Technically, durability can be defined as the amount of use one gets

from a product before it deteriorates. Alternatively, it may be defined as theamount of use one gets from a product before it breaks down and replacement ispreferable to continued repair.

6. Serviceability

Serviceability is the speed, courtesy, competence, and ease of repair.Consumers are concerned not only about a product breaking down but alsoabout the time before service is restored, the timeliness with which serviceappointments are kept, the nature of dealings with service personnel, and the

frequency with which service calls or repairs fail to correct outstandingproblems. In those cases where problems are not immediately resolved andcomplaints are filed, a company's complaints handling procedures are also likelyto affect customers' ultimate evaluation of product and service quality.

7. Aesthetics

Aesthetics is a subjective dimension of quality. How a product looks, feels,sounds, tastes, or smells is a matter of personal judgment and a reflection ofindividual preference. On this dimension of quality it may be difficult to pleaseeveryone.

8. Perceived Quality

Consumers do not always have complete information about a product's orservice's attributes; indirect measures may be their only basis for comparingbrands. A product's durability for example can seldom be observed directly; itmust usually be inferred from various tangible and intangible aspects of theproduct. In such circumstances, images, advertising, and brand names -inferences about quality rather than the reality itself - can be critical.

1.6 Cost of qualityThe price of nonconformance (Philip Crosby) or the cost of poor quality

(Joseph Juran), the term 'Cost of Quality', refers to the costs associated withproviding poor quality product or service.

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Why is it important?

Quality processes cannot be justified simply because "everyone else isdoing them" - but return on quality (ROQ) has dramatic impacts as companiesmature. Research shows that the costs of poor quality can range from 15%-40% of

business costs (e.g., rework, returns or complaints, reduced service levels, lostrevenue). Most businesses do not know what their quality costs are because theydo not keep reliable statistics. Finding and correcting mistakes consumes aninordinately large portion resources. Typically, the cost to eliminate a failure inthe customer phase is five times greater than it is at the development ormanufacturing phase. Effective quality management decreases production costsbecause the sooner an error is found and corrected, the less costly it will be.

When to use it?

Cost of quality comprises of four parts:

External Failure Cost: cost associated with defects found after thecustomer receives the product or serviceex: processing customer complaints, customer returns, warranty claims,product recalls.

Internal Failure Cost : cost associated with defects found before thecustomer receives the product or serviceex: scrap, rework, re-inspection, re-testing, material review, materialdowngrades.

Inspection (appraisal) Cost: cost incurred to determine the degree ofconformance to quality requirements (measuring, evaluating or auditing)ex: inspection, testing, process or service audits, calibration of measuringand test equipment.

Prevention Cost: Cost incurred to prevent (keep failure and appraisal costto a minimum) poor qualityex: new product review, quality planning, supplier surveys, processreviews, quality improvement teams, education and training.

How to use it?

Gather some basic information about the number of failures in the system, applysome basic assumptions to that data in order to quantify the data, chart the databased on the four elements listed above and study it, allocate resources to combatthe weak-spots, do this study on a regular basis and evaluate your performance

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c. Internal Failure. This area covers the costs that are borne by theorganisation itself such as scrap, rework, redesign, modifications,corrective action, down time, concessions and overtime.

d. External Failure. This area covers the costs that are borne by the customersuch as equipment failure, down time, warranty, administrative cost in

dealing with failure and the loss of goodwill.

3. Whilst aiming to reduce failure through appraisal and prevention itmust be clear that these also cost as shown below:

Figure 1.4

4. The graph shows that there is a minimum Total Quality cost, which is acombination of prevention, appraisal and failure. Reducing any of thesereduces the total. The key to minimum cost, is striking the correct balancebetween the three.

5. Clearly prevention reduces both appraisal and failure costs, howevereventually the cost of prevention itself starts to increase the total cost andso this must be controlled and set at an effective level.

6. The next graph shows that when Total Quality is initially introduced intoan organisation, there are huge savings that can be made:

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FIGURE 1.5

8. However when Total Quality is introduced into a well organised system,that is using inspection as a major standard setter, then the benefits are notso dramatic. The main benefits to be achieved are within management.The fat of the organisation can then be cut.

FIGURE 1.6

9. The graph below shows the four stages of Total Quality acceptance /implementation and what happens theoretically to the four segments of

the cost of quality:

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FIGURE 1.7

10.The minimum total cost, is shown below as being achieved at 98%perfection. This percentage is also known as best practice. That is, the costof achieving an improvement outweighs the benefits of that improvement.

FIGURE 1.8

SUMMARY

The eight principle, which act as a base for defining Quality Managementis presented in detail. The Total Quality Management is presented frameworkcomprises of three paradigms and each one compliments the other .The processquality, involvement of leaders and employee, culture of the organization will all

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lead towards the establishment of TQM in organization, The benefits are manyand using an example of hotel, it is emphasized for the benefit of readers. Vision,mission and policy Statements on quality are presented using examples of SAP,Honeywell Technology Solutions Lab, Department of Defence, USA to give anidea. The indispensability of the customer and the focus required to be is

emphasized are presented in detail. The quality dimensions of product andservice are deliberated in detail. The cost of quality, its importance, Applicationareas are elaborated for the benefit of the learners.

REVIEW QUESTIONS

1. Enumerate various principles of quality management and explaintheir usefulness to managers.

2. THE TQM framework is dynamic and is fast changing-Criticallyexamine.

3.

Describe the benefit of TQM in streamlining the operations of anorganization.4. Discuss the importance of vision, mission and policy statements

on quality in organizations. Describe the process of its evolution.5. Explain the impact on quality due to non-retention of customers.6. Explain various cost elements in achieving quality in an

organization. Demonstrate how to they interact with each other

QLTY 1

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