Quality Management Lecture 6.

Quality of Products and Services

Concept of quality 1 Totality of features and characteristics of a product or

service that bears upon its ability to satisfy stated or implied needs.

These needs can be Objective (determined in contracts, or in standards) – easy to

measure Subjective (usefulness) – it belongs to the custemer

What could be an objective and a subjective measure for the quality of a book? Book jacket Quality of the paper publisher Author contents

Concept of quality 2

Nowadays it has a strategic definition, because it not just mean the quality of a product, but it : „It is a basic business strategy, which means that products and services should totally meet both internal and external customers stated and latent needs.

Quality is defined as meeting customers requirements

5 Approaches to Defining Quality – Garvin 1 The Transcendent Approach: a quality cannot be defined

precisely, we learn to recognize it only through experience Innate excellence Pictures of Picasso:

5 Approaches to Defining Quality - Garvin 2 The Product-based Approach: quality is precise and

measurable variable, products can be ranked – quality products have more attributes (computer with more memory)

5 Approaches to Defining Quality - Garvin 3 The Manufacturing-based Approach : products or services meet

stated requirements, Manufacturing and engineering practise - Quality is measured by

the manufacturer’s ability to target the requirements consistently with little variability

5 Approaches to Defining Quality - Garvin 4 The User-based Approach : quality of a

product is determined by the consumer. There is widely varying individual preferences;

5 Approaches to Defining Quality - Garvin 5 The Value-based

Approach : quality is defined in costs and prices. How much is the benefit of the good or servce outweigh the cost?

Did the costumer get his or her money’s worth?

Quality of Products

Quality of design – determined before the product is produced, to meet costumers’ needs

Quality of conformance – producing a product to meet qualifications.

The abilities: Availability – continuity of a service to the customer Availability=uptime/(uptime+downtime) Reliability – the length of time that a product can be used before

it fails - MTBF Maintainability – restoration of a product to service once it has

failed – MTTRAvailability=MTBF/(MTBF+MTTR)

Field service or customer service – warrenty and repair or replacement of a produt after it has been sold

8 Dimensions of product quality - Garvin Performance – refers to a products’ primary operating

characteristics Features – „bells and whistles” added to a products Reliability – probability that the product will not fail in a specific

period of time (MTPF – mean time between failure) Conformance – the degree to which a product or service meets

its specifications Durability – a measure of the product life Serviceability – this is the speed, the competence and easy of

repair Aesthetics – how the product looks, feels, sounds, tastes and

smells. This is clearly a matter of personal judgment Perceived quality – images, advertising, and brand names can

be critical to give information about the product quality

Quality cycle

Engineering

Defines design concept

Prepares specifications

Defines quality characteristics

Marketing

Interprets Customer needs

Works with Customer to design product to fit operations

Customer

Specifies quality needs

Operations

Produces the product or service

Quality Control

Plans and monitors quality

Quality of Services

HIPI priciples

Heterogenity (variability in the quality of service because services are provided by people, and people perform inconsistently)

Intangibility (there is no specimen ) Perishability (vary in demand can occure

difficulty in supply) Inseparability (good service can’t be

separated from bad service)

SERQUAL - quality dimensions of services Reliability - service is performed with high accuracy and thoroughness

Responsiveness - the willingness of employees to provide the service and how fats the service is provided

Competence - possession of required skills, and knowledge Access - approachability and ease of contact Courtesy -comprises politeness, respect, friendliness Communication - informing the customers in an

understandable way and listening to them Credibility - trustworthiness and honesty Security - physical and financial safety Understanding the customer - steps to know customer better Tangibles - all physical products that are involved in service

delivery

RATER model

Reliability Assurance – Involves knowledge and courtesy of

employees and their ability to inspire trust and confidence

Tangibles – Empathy – Which is caring, individualized or

customized attention the organization provides its customers

ResponsivenessIt is an efficient model in helping an organization shape

up their efforts in bridging the gap between perceived and expected service.

GAP model GAP 1 (Knowledge Gap) – the difference between guest’s

expectation and management perceptions of those expectations, i. e. not knowing what consumer expect

GAP 2 (Standards Gap) – difference between managements perceptions of guest’s expectations and service quality

specifications , i.e. improper service quality standards GAP 3 (Delivery Gap) – difference between service quality

specifications and service actually delivered, i.e. the service performance gap

GAP 4 (Communication Gap) – difference between service delivery and the communications to the guests about service delivery, i.e. whether promised match delivery?

GAP 5 (Overall Gap) – the difference between guests expectation and perceieved service.

Developing of Quality Systems

Quality Check (QCh)

Method: testing product at the end of a process, compare with stated specifications

It regards to products Goals: detecting defections, a separate

refuse Result: prevent refuse from moving to

another step of production

Statistical Qualty Control (SQC) Goals: ensure that mistakes can not arise

again It regards to processes Method: continuous improvement of

processes: PDCA cycle – Plan, Do, Check, Act

Results: prevent mistakes from arising again,

Quality Management System (QMS) Goals: ensure that mistakes can not arise at

all It regards to the whole system: organization,

processes, resources, Method: regular audits, when compare the

whole system with specifications stated in documentations

Results: the product and operation are optimized to the customers’ requirements (the best possible soultion)

Total Quality Management - TQM Management approach for an organization General Principles of TQM:

Customer Focus: both actions and functions are designed and performed with the aim os meeting the needs of customers, this will ensure long-term success

Continouos process improvement Commitment and personnel involvement:

employees assume responsibilities to achive quality accomplishing their task, and actively take part in the process of continuous improvement.

International Standardization Organization - ISO ISO 9000 is a family of standards for quality

management systems. In 1994, 2000 and 2008 the rules are updated, as

the requirements motivate changes over time. It can be audited by internal or external experts.

Under the 1994 version, the question was broadly "Are you doing what the manual says you should be doing?", whereas under the 2000 version, the question is more "Will this process help you achieve your stated objectives? Is it a good process or is there a way to do it better?"

Cost of quality

Control Costs (CC)

related to the activities which remove defects from the production stream. Prevention: include activities such as quality

planning, new-product reviews, training, engineering analysis. These activities prevent defects before they occure.

Appraisal: eliminating deffects after they occure but before the product reach the customer

Failure Costs (FC)

internal faliure cost incurres during the production process. Include rework, quality downgradeing, machine downtime

external failure cost incurres after the product is shipped. Includes warranty charges, returned goods, allowances.

TC=CC+FC=PC+AC+IFC+EFC

Total Cost

Cost of failures

Total cost

Cost of control

Minimum cost

Number of defects produced

cost

Excercise

Cost of failure:

F=1500+40X Cost of control

C=3080/X

X-percent defective

What is the minimum cost of quality, and the optimal percent deffective?

Solution

TC=FC+CC= 1500+40X+3080/X TC/dX=40-3080/X2=0 40X2=3080 X2=77 X=8,77 TCmin=2202

F(x)=xn

F(x)/dx=n*x(n-1)

Seminar - Excercise

Scaling Procedure Based on the Method of Paired Comparsion Attributes of products are not equally

important for customers We have to discover the rank of these

features and thus we can focuse on the main needs of customers.

Exercise

Coffee: Hot (I1) Milky (I2) Sweet (I3) Strenght (I4)

Create pairs (1-2; 4-1; 3-2; 1-3;2-4; 3-4;) Rank them randomly or use Ross-method Compare them, underline the preferred item

Create Preference Matrix – this contains preferences. Both in the rows and in the cols the dimensons are presented. When someone prefer item in row to item in col there is 1, otherwise 0.

In the last col there is the sum of the value being in the row. This means how often the row item was preferred to the others.

I1 I2 I3 I4 a

I1 - 0 1 1 2

I2 1 - 0 1 2

I3 0 1 - 0 1

I4 0 0 1 - 1

Consistency test There are 3 item: A, B, C If A>B and B>C then A>C When decision maker is not consistent then this

statement is not true. Consistency coeeficient:

Where dmax is the maximum number of incosistent decisions

If n is odd number

If n is even number:

%100*)1(maxd

dK

24

43

max

nnd

24

)( 3

max

nnd

212

)12)(1( 2annnd

Example

dmax=(27-3)/24=1 d=4(4-1)(8-1)/12-

(4+4+4)/2=7-6=1 K=1-1/1=0% This is an inconsistent

decision maker. The decision maker

consistent when K>85%

I1 I2 I3 I4 a

I1 - 0 1 1 2

I2 1 - 0 1 2

I3 0 1 - 1 2

I4 0 0 0 - 0

Creation of weighted number

Preference fraction:

Where „m” is the number of decision makers.

To get the weighted number we have to transform Pa value into a normal distribution or simply calculate the percentage value of it.

if m=14

nm

ma

Pa *2

%100*minmax

min

aa

aai

PP

PP

Totalized preference matrix  I1 I2 I3 I4 I5 I6 I7 I8 I9 I10 a a+m/2 Pa

I1   2 13 7 7 2 0 1 7 6 45 52 0,37

I2 12   9 8 10 10 0 1 6 6 62 69 0,49

I3 1 5   0 0 2 1 0 1 0 10 17 0,12

I4 7 6 14   8 11 2 1 2 5 56 63 0,45

I5 7 4 14 6   5 0 1 0 1 38 45 0,32

I6 12 4 12 3 9   0 0 0 4 44 51 0,36

I7 14 14 13 12 14 14   13 14 14 122 129 0,92

I8 13 13 14 13 13 14 1   12 13 106 113 0,92

I9 7 8 13 12 14 14 0 2   1 71 78 0,55

I10 8 8 14 9 13 10 0 1 13   76 83 0,59

Rj 81 64 116 70 88 82 4 20 55 50 630  

18 1 53 7 25 19 -59 -43 -8 -13    

324 1 2809 49 625 361 3481 1849 64 169 9732  

jj RR 2)( jj RR

Kedall coefficient of concordance (W) Rj is the sum of the

colums in the totalized preference matrix

is the mean of Rj-s

Δ is the squared distance

m is the number of decision maker

n is the number of items

12

)( 32

max

nnm

j

jj RR 2)(

2

)1(

nmR j

max

W

jR

Meaning of the Kendall Coefficient Kendall's coefficient of concordance is used

traditionally in statistics for measuring agreement between k orderings.

If it is 1 there is total concordance. If it is 0 there is no concordance at all. But it

even occure in that case when there is two group of decision maker with opposite oppinion. Then cluster analyize should be used to discover the groups.

Thank You for Attention