Quality Focus Approach to Management
“There are really only three types of people: those who make things happen, those who watch things happen, and those who say, ‘What happened?”
The total quality concept as an approach to doing business began to gain wide acceptance in the west in the late 1980s and early 1990s. However, individual elements of the concept – such as the use of statistical data, teamwork, continual improvement, customer satisfaction, and employee involvement – have been used by visionary organizations for years. It is the pulling together and coordinated use of these and other previously disparate elements that gave birth to the comprehensive concept known as total quality.
Why Focus on Quality?
People deal with the issue of quality continually in their daily lives.
We concern ourselves with quality when grocery shopping, eating in a restaurant, and making a major purchase such as an automobile, a home, a television, or a personal computer. Perceived quality is a major factor by which people make distinctions in the market place. Whether we articulate them openly or keep them in the back of our minds. We all apply a number of criteria when making a purchase. The extent to which a purchase meets these criteria determines its quality in our eyes.
We concern ourselves with quality when grocery shopping, eating in a restaurant, and making a major purchase such as an automobile, a home, a television, or a personal computer. Perceived quality is a major factor by which people make distinctions in the market place. Whether we articulate them openly or keep them in the back of our minds. We all apply a number of criteria when making a purchase. The extent to which a purchase meets these criteria determines its quality in our eyes.
One way to understand quality as a consumer-driven concept is to consider the example of eating at a restaurant. How will you judge the quality of the restaurant? Most people apply such criteria as the following:
♦ Service ♦ Response time ♦ Food preparation
♦ Environment/atmosphere ♦ Price ♦ Selection
The Historic Development of Total Quality
The total quality movement had its roots in the time and motion studies conducted by Frederick Taylor in the 1920s. Taylor
The most fundamental aspect of scientific management was the separation of planning and execution. Although the division of labor spawned tremendous leaps forward in productivity, it virtually eliminated the old concept of craftsmanship in which one highly skilled individual performed all the tasks required to produce a quality product. In a sense, a craftsman was CEO, production worker, and quality controller all rolled into one person. Taylor
As the volume and complexity of manufacturing grew, quality became an increasingly difficult issue. Volume and complexity together gave birth to quality engineering in the 1920s and reliability engineering in the 1950s. Quality engineering, in turn, resulted in the use of statistical methods in the control of quality, which eventually led to the concepts of control charts and statistical process control, which are now fundamental aspects of the total quality approach.
There four era of development of TQM are as:
Formalizing the Inspection Function
By the early 1900s, gauging had become more refined, and inspection was even more important. It was prominent in Henry Ford’s moving assembly line and Frederick W. Taylor’s system of shop floor management. In 1922, G.S. Radford formally linked inspection to quality control. For the first time, quality was regarded as an independent function and a distinct management responsibility. Radford defined quality in term of conformance to “established requirements” and emphasized inspection. He also suggested some lasting quality principles, such as getting designers involved early, closely coordinating various departments, and achieving the quality improvement results of increased output nd lower costs.
The Statistical Quality Control Era
In 1931, Walter A. Shewhart gave quality a scientific footing with the publication of his book Economic Control of Quality of Manufactured Product. Shewhart was one of a group of people at Bell Laboratories investigating problems of quality. The statistical quality control approach that Shewhart advocated is based on his views of quality. Statistical quality control requires that numbers derived from measures of processes or products be analyzed according to a theory of variation that links outcomes to uses.
The Quality Assurance Era
During the quality assurance era, the concept of quality in the United States
Total Quality Control and Customer Driven Quality
The beginning of the 20th century marked the inclusion of “processes” in quality practices. A “process” is defined as a group of activities that takes an input, adds value to it and provides an output, such as when a chef transforms a pile of ingredients into a meal.
In 1956, Armand Feigenbaum extended this principle by suggesting that high-quality products are more likely to be produced through total quality control than when manufacturing works in isolation:
TRADITIONAL MANAGEMENT AND QUALITY MANAGEMENT:
Twentieth-century management has been strongly influenced by Taylor
While there had been competition, competitors often played according to a “live and let live” strategy. Because monopolies were precluded by law, companies had little incentive to completely drive competitors from the marketplace.
Even when new product technologies created new markets, such as plastics in the 1950s, management practices changed very little. Managers set goals for productivity, efficiency, and profitability, using management set goals for productivity, efficiency, and profitability, using management by objectives (MBO) to link strategy and operations through the hierarchy. Managers motivated employees to fulfill those goals by inducements such as profit sharing, stock options, and bonuses, or other rewards such as job enrichment or participative management. However, the job of management remained much the same: set goals, define roles, provide technologies, and motivate employees. Accounting, marketing, engineering, and manufacturing practices also did not change. Occasionally, new techniques were introduced within the traditional functions, such as quality control in manufacturing. But such changes went largely unnoticed by the rest of the organization.
No one challenged this approach to management as long as it served society well. While managers in Japan U.S. US
The Stage of Replacement:
Themes of the New Paradigm
The differences between the new and the old paradigm are organized around three themes:
customer value strategy, cross-functional systems, and continuous improvement.
Theme 1: Customer Value Strategy
Customer value is defined as the combination of benefits derived from using a product (or service) and the sacrifices required of the customer. The customer value strategy is the business plan for offering value to customers, including product characteristics, attributes, mode of delivery, support services, and so on. The theme of customer value strategy may be addressed in many topics, including quality, measurement, positioning, key stakeholder, and product design.
Theme 2: Organizational Systems
Organizational systems are the means that provide customer value. These systems broadly include material and human inputs, process technology, operating methods and work practices, streams of work activity, information flows, and decision making. The approaches to managing these systems in the old and new paradigms are discussed below.
Theme 3: Continuous Improvement
To keep pace with the changes in the external environment, managers have to change the organization. Managers have always made improvements. However, with rates of change increasing in the external environment, managers must improve differently and more frequently than in the past. They must pursue continuous improvement, which is a constant striving to change and make things better.
TQM dimension to access quality:
Quality in Manufacturing
Well-developed quality systems have existed in manufacturing for some time. However, these systems focused primarily on technical issues such as equipment reliability, inspections, defect measurement, and process control. The transition to a customer-driven organization has caused fundamental changes in manufacturing practices, changes that are particularly evident in areas such as product design, human resource management, and supplier relations.
Manufactured products have several quality dimensions including the following:
1. Performance: a product’s primary operating characteristics.
2. Feature: the “bells and whistles” of a product.
3. Reliability: the probability of a product’s surviving over a specified period of time under stated conditions of use.
4. Conformance: the degree to which physical and performance characteristics of a product match pre-established standards.
5. Durability: the amount of use one gets from a product before it physically deteriorates or until replacement is preferable.
6. Serviceability: the ability to repair a product quickly and easily.
7. Aesthetics: how a product looks, feels, sounds, tastes, or smells.
8. Perceived quality: subjective assessment resulting from image, advertising, or brand names.
Most of these dimensions revolve around the design of the product.
Quality control in manufacturing is usually based on conformance, specifically conformance to
specifications. Specifications are targets and tolerances determined by designers of products and
services. Targets are the ideal values for which production strives; tolerances are acceptable deviations from these ideal values. For example, a computer chip manufacturer might specify that the distance between pins on a computer chip should be 0.095 + 0.005 inches. The value 0.090 and 0.100 would be acceptable.
Quality in Services
Service can be defined as “any primary or complementary activity that does not directly produce a physical product–that is, the non goods part of the transaction between buyer (customer) and seller (provider).” A service might be as simple as handling a complaint or as complex as approving a home mortgage. Service organizations include hotels; health, legal, engineering, and other professional services; educational institutions; financial services; retailers; transportation; and public utilities.
The most important dimensions of service quality include the following; you may remember the
most important ones by RATER:
• Reliability: How much reliable is the service provider?
• Accessibility and convenience: Is the service easy to obtain?
• Timeliness: Will a service be performed when promised?
• Completeness: Are all items in the order included?
• Consistency: Are services delivered in the same fashion for every customer, and every time for the same customer?
• Tangibility: after the service is over, is there any thing to take home to remind the service experience?
• Empathy or Courtesy: Do frontline employees greet each customer cheerfully?
• Responsiveness: Can service personnel react quickly and resolve unexpected problems?
Service organizations must look beyond product orientation and pay significant attention to customer transactions and employee behavior.
Principles of Total Quality
A definition of total quality was endorsed in 1992 by the chairs and CEOs of nine major U.S.
corporations in cooperation with deans of business and engineering departments of major universities, and recognized consultants:
Total Quality (TQ) is a people-focused management system that aims at continual increase in customer satisfaction at continually lower real cost. TQ is a total system approach (not a separate area or program) and an integral part of high-level strategy; it works horizontally across functions and departments, involves all employees, top to bottom, and extends backward and forward to include the supply chain and the customer chain . TQ stresses learning and adaptation to continual change as keys to organizational success.
The foundation of total quality is philosophical: TQ includes systems, methods, and tools. The systems permit change; the philosophy stays the same. TQ is anchored in values that stress the dignity of the individual and the power of community action.
There probably are as many different approaches to TQ as there are businesses. However, most share some basic elements: (1) customer focus, (2) a process orientation, (3) continuous improvement and learning, (4) empowerment and teamwork, (5) management by fact, and (6) leadership and strategic planning.
Quality Costs—general description
Prevention Costs
The costs of all activities specifically designed to prevent poor quality in products or services.
Examples are the costs of:
• New product review
• Quality planning
• Supplier capability surveys
• Process capability evaluations
• Quality improvement team meetings
• Quality improvement projects
• Quality education and training
Appraisal Costs
The costs associated with measuring, evaluating or auditing products or services to assure conformance to quality standards and performance requirements.
These include the costs of:
• Incoming and source inspection/test of purchased material
• In-process and final inspection/test
• Product, process or service audits
• Calibration of measuring and test
equipment
• Associated supplies and materials
Failure Costs
The costs resulting from products or services not conforming to requirements or customer/user needs.
Failure costs are divided into internal and external failure categories.
Internal Failure Costs
Failure costs occurring prior to delivery or shipment of the product, or the furnishing of a service, to the
customer.
Examples are the costs of:
• Scrap • Rework • Re-inspection
• Re-testing • Material review
• Downgrading
External Failure Costs Failure costs occurring after delivery or shipment of the product -- and during or after furnishing of a service -- to the customer.
Examples are the costs of:
• Processing customer complaints
• Customer returns • Warranty claims
• Product recalls
Total Quality Costs:
The sum of the above costs. This represents the difference between the actual cost of a product or service and what the reduced cost would be if there was no possibility of substandard service, failure of
products or defects in their manufacture.
Deming Quality Cycle
Deming cycle is a tool for continuous improvement and it is a tool for an ongoing effort to improve
products, services or processes. These efforts can seek “incremental” improvement over time or
“breakthrough” improvement all at once.
Among the most widely used tools for continuous improvement is a four-step quality model—the plando-
check-act (PDCA) cycle, also known as Deming Cycle or Shewhart Cycle:
• Plan: Identify an opportunity and plan for change.
• Do: Implement the change on a small scale.
• Check: Use data and facts to analyze the results of the change and determine whether it made a
difference.
• Act: If the change was successful, implement it on a wider scale and continuously assess your
results. If the change did not work, begin the cycle again.
Deming cycle was developed to link the production of a product with consumer needs and focus the
resources of all departments (research, design, production, and marketing) in a cooperative effort to
meet those needs. The Deming Cycle proceeds as follows:
1. Conduct consumer research and use it in planning the product (PLAN).
2. Produce the product (DO).
3. Check the product to make sure it was produced in accordance with the plan (CHECK).
4. Market the product (ACT).
5. Analyze how the product is received in the marketplace in terms of quality, cost, and other
criteria (ANALYZE).
DEMING CYCLE
Juran’s Contribution
Juran is best known for the following contributions to the quality philosophy:
♦ Juran’s Three Basic Steps to Progress
♦ Juran’s Ten Steps to Quality Improvement
♦ The Juran Trilogy
Juran’s Three Basic Steps to Progress
I. Achieve structured improvements on a continual basis combined with dedication and a sense of urgency.
II. Establish an extensive training program.
III. Establish commitment and leadership on the part of higher management
Juran’s Ten Steps to Quality Improvement
Examining Juran’s Ten Steps to Quality Improvement, you will see some overlap between them and
Deming’s Fourteen Points. They also mesh well with the philosophy of other quality experts.
1. Build awareness of both the need for improvement and opportunities for improvement.
2. Set goals for improvement.
3. Organize to meet the goals that have been set.
4. Provide training.
5. Implement projects aimed at solving problems.
6. Report progress.
7. Give recognition.
8. Communicate results.
9. Keep score.
10. Maintain momentum by building improvement into the company’s regular systems.
The Juran Trilogy
The Juran Trilogy summarizes the three primary managerial functions.
Quality Planning, Quality Control, and Quality Improvement
Quality Improvement: The improvement of quality should be ongoing continual:
1. Develop the infrastructure necessary to make annual quality improvements.
2. Identify specific areas in need of improvement, and implement improvement projects.
3. Establish a project team with responsibility for completing each improvement project.
4. Provide teams with what they need to be able to diagnose problems to determine root causes develop solutions, and establish control that will maintain gains made.
Juran’s assessment of most companies is that quality control is far and away the top priority among the trilogy and most companies feel they are strong in this category. Quality planning and quality
improvement, however, are not important priorities and are significantly weaker in most organizations.
He feels that more effort needs to be placed on quality planning and even more on quality improvement.
Japanese efforts at quality improvement were supported by massive training programs and top
management leadership. Training in managerial quality-oriented concepts as well as training in the tools for quality improvement, cost reduction, data collection, and analysis is one of the most important components of Juran’s philosophy. Juran maintains that the Japanese experience leaves little doubt as to the significance of the return on quality training in competitive advantage, reduced failure costs, higher productivity, smaller inventories, and better delivery performance.
International Quality Awards
A focus on total quality has permeated organizations throughout the world. Numerous countries and
regions of the world have established awards and award criteria.
The Malcolm Baldrige National Quality Award (MBNQA) has been one of the most powerful catalysts
of total quality n the United States
Criteria for Performance excellence establishes a framework for integrating total quality principles and practices in any organization. Many other award programs are similar in nature to the Baldrige criteria.
The Deming Prize
The Deming Application Prize was instituted in 1951 by the Union of Japanese Scientists and Engineers
(JUSE) in recognition and appreciation of W. Edwards Deming’s achievements in statistical quality control and his friendship with the Japanese people. The Deming Prize has several categories, including prizes for individuals, factories, and small companies, and the Deming application prize, which is an annual award presented to a company or a division of a company that has achieved distinctive
performance improvements through the application of Company-wide Quality Control (CWQC). As
defined by JUSE, CWQC is
A system of activities to assure that quality products and services required by customers are economically designed produced and supplied while respecting the principle of
customer-orientation and the overall public well-being. These quality assurance activities involve market research, research and development, design, purchasing, production, inspection and sales, as well as all other related activities inside and outside the company. Through everyone in the company understanding both statistical concepts and methods, through their application to all the aspects of quality assurance and through repeating the cycle of rational planning, implementation, evaluation and action, CWQC aims to accomplish business objectives.23
The judging criteria consist of a checklist of 10 major categories: policies, the organization and its
operations, education and dissemination, information gathering, communication and its utilization,
analysis, standardization, control/management, quality assurance, effects, and future plans. Each major category is divided into subcategories, or “checking points.” For example, the policy category includes policies pursued for management, quality, and quality control; methods for establishing policies; appropriateness and consistency of policies; utilization of statistical methods; communication and dissemination of policies; checks of policies and the status of their achievement; and the relationship
between policies and long- and short-term plans. Each category is weighted equally.
ISO 9000: what it is
The International Organization for Standardization (ISO) is a federation of the national standards bodies
of nations from around the world. ISO 9000 is about standardizing the systemic approach organizations
everywhere take to managing and improving the processes that ultimately result in their products and
services. Specifically, ISO 9000 establishes the requirements for quality management systems (QMS)
that must be employed by all organizations registered to the standard. Registered organizations should enjoy:
• Wider customer acceptance of products and services
• Improved effectiveness and reliability of its processes
• Improved quality of products and services
• Improved organizational performance and competitiveness
Since ISO 9000 was first released in 1987 it has evolved through two revisions, the first in 1994 and the
most recent at the end of 2000. This evolution has aligned it more closely with the Total Quality
Management philosophy. It seemed to many observers, including the authors, that the 1987 and 1994
versions shied away from association with TQM, or from acknowledging its existence. Even the 2000
version, which borrows heavily from TQM, scarcely acknowledges it. The fact is, of course, that with
the tutelage of W. Edwards Deming and Joseph Juran, the Japanese started the development of the
management system we now know as TQM in 1950. Over the years several Japanese experts – Kaoru Ishikawa, Shigeo Shingo, Taiichi Ono, and others – emerged, and by the early 1970s TQM had been widely accepted in Japan
that ISO’s Technical Committee 176 (TC 176), which was charged with ISO 9000’s development, borrowed some TQM elements, most notably its documentation requirements. ISO 9000: 1994 moved a bit closer to TQM, at least mentioning (though not requiring) continual improvement. But any acknowledgement of TQM’s influence or superiority seemed to be deliberately avoided. ISO 9000:2000
made a giant leap in comparison, especially in the area of continual improvement, which has gone from
receiving just cursory treatment to becoming a firm requirement.
Competitive Advantage on basis of Quality Strategy
• A firm has many options in defining its long-terms goals and objectives, the customers it wants
to serve, the products and services it produces and delivers, and the design of the production and service system to meet these objectives. Strategic planning is the process by which the members of an organization envision its future and develop the necessary procedures and operations to carry out that vision. Strategy – the result of strategic planning – is the patter of decisions that determines and reveals a company’s goals, polices, and plans to meet the needs of its stakeholders. An effective strategy allows a business to create a sustainable competitive advantage.
Competitive advantage denotes a firm’s ability to achieve market superiority over its competitors. In the long run, a sustainable competitive advantage provides above-average performance. A strong
competitive advantage has six characteristics:
1. It is driven by customer wants and needs. A company provides value to its customers that
competitors do not.
2. It makes a significant contribution to the success of the business.
3. It matches the organization’s unique resources with the opportunities in the environment.
No two companies have the same resources; a good strategy uses them effectively.
4. It is durable and lasting and difficult for competitors to copy. A superior research and
development department, for example, can consistently develop new products or processes
to remain ahead of competitors.
5. It provides a basis for further improvement.
6. It provides direction and motivation to the entire organization.
No comments:
Post a Comment