Chapter 9: Management of Quality

Chapter 9 focuses on the importance of quality. It discusses various concepts and tools that can be used to achieve high quality and continuous improvement. Broadly defined, quality refers to the ability of a product or service to consistently meet or exceed customer requirements or expectations. Different customers will have different expectations, so a working definition of quality is customer-dependent. When discussing quality one must consider design, production, and service. In a culmination of efforts, it begins with careful assessment of what the customers want, then translating this information into technical specifications to which goods or services must conform. The specifications guide product and service design, process design, production of goods and delivery of services, and service after the sale or delivery.
Some of these consequences of poor quality include loss of business, liability, decreased productivity, and increased costs. However, good quality has its own costs, including prevention, appraisal, and failure. A recent and more effective approach is discovering ways to prevent problems, instead of trying to fix them once they occur.This will ultimately decrease the cost of good quality in the long run.

There are several costs associated with quality:
Appraisal costs – costs of activities designed to ensure quality or uncover defects
Prevention costs – costs of prevention defects from occurring
Failure costs – Costs caused by defective parts or products or by faulty services
Internal failures – failures discovered during production
External failures – failures discovered after delivery to the customer
Return on quality (ROQ) – an approach that evaluates the financial return of investments in quality

Chapter 9 discusses key contributors of quality management and several awards for companies who possess traits of excellent quality management. This chapter defines total quality management (TQM) as a philosophy that involves everyone in the organization in a continual effort to improve quality and achieve customer satisfaction. This philosophy concentrates on continuous improvement and quality at the source. Six sigma is a concept that stresses improving quality, reducing costs, and increasing customer satisfaction. Lastly, this chapter gives several examples of quality tools, which include flowcharts, check sheets, histograms, pareto analysis, scatter diagrams, controls charts, and cause-and-effect diagrams.

Successful management of quality requires that managers have insights on various aspects of quality. These include defining quality in operational terms, understanding the costs and benefits of quality, recognizing the consequences of poor quality and recognizing the need for ethical behavior.
Understanding dimensions that customers use to judge the quality of a product or service helps organizations meet customer expectations.

Dimensions of Product Quality
• Performance– main characteristics of the product
• Aesthetics– appearance, feel, smell, taste
• Special features– extra characteristics
• Conformance– how well the product conforms to design specifications
• Reliability– consistency of performance
• Durability– the useful life of the product
• Perceived quality– indirect evaluation of quality
• Service-ability– handling of complaints or repairs

Dimensions of Service Quality
• Convenience– the availability and accessibility of the service
• Reliability– ability to perform a service dependably, consistently, and accurately
• Responsiveness– willingness to help customers in unusual situations and to deal with problems
• Time–the speed with which the service is delivered
• Assurance–knowledge exhibited by personnel and their ability to convey trust and confidence
• Courtesy–the way customers are treated by employees
• Tangibles–the physical appearance of facilities, equipment, personnel, and communication materials
• Consistency–the ability to provide the same level of good quality repeatedly

The Determinants of Quality
Quality of Design – intention of designers to include or exclude features in a product or service. The starting point of producing quality in products begins in the “design phase”. Designing decisions may involve product or service size, shape and location. When making designs, designers must keep in mind customer wants, production or service capabilities, safety and liability, costs, and other similar considerations.
Quality of conformance- refers to the degree to which goods and services conform to the intent of the designer. Quality of conformance can easily be affected by factors like: capability of equipment used, skills, training, and motivation of workers, extent to which the design lends itself to production, the monitoring process to assess conformance, and the taking of corrective action.
Ease of use – refers to the ease of usage of the product or services for the customers. The term “ease of use” refers to user instructions. Designing a product with “ease of use” increases the chances that the product will be used in its intended design and it will continue to function properly and safely. Without ease of use, companies may lose customers, face sales returns, or legal problems from product injuries. Ease of use also applies to services. Manufacturers must make sure that directions for unpacking, assembling, using, maintaining, and adjusting the product are included. Directions for “What to do when something goes wrong” should also be included. Ease of use makes a consumer very happy and can help retain customers.
Services offered to the customer after delivery. There will be times when products may fail or problems with usage may occur. This is when “Service after delivery” is important through recall and repairs of the product, adjustment, replacement or buys back, or reevaluation of a service.

Having good quality is a competitive advantage against others who offer similar products or services in the marketplace.
In addition, good quality can:

• Raise Company’s Reputation
• Rationalize Premium Prices
• Decrease Liability Costs
• Increase Productivity
• Increase Customer Loyalty
• Increase Customer Satisfaction

Consequence’s include:

• loss of business and existing market share
• legal liability
• lack of productivity
• increased costs

Failure to meet quality standards can damage a company’s image, reputation or lead to external criticism. In the manufacturing field, the quality of raw materials or equipment can affect the whole manufacturing process. If defects or poor quality are not detected on time, companies may face various costs to solve problems. Discovering and fixing problems on time reduces costs. Quality costs include prevention (prevent defects from occurring by planning system, training and control procedures), appraisal (ensure quality or uncover defects by inspections, testings and audits), and failure (caused by defective parts, products or by faulty services discovered during the production process – internal or after delivery to the customer – external).

Three well- known awards given annually to recognize quality are:

1. Baldrige Award (given by the U.S. government)

2. European Quality Award

3. Deming Prize (established by the Japanese).

There are also worldwide known quality certifications like ISO 9000 (which is a set of international standards on quality management and quality assurance, critical to international business) and ISO 14000 (a set of international standards for assessing a company’s environmental performance).

Total quality management (TQM) is a constant pursuit of quality that involves everyone in an organization. The driving force is customer satisfaction; a key philosophy is continuous improvement. The Japanese use the term kaizen to refer to continuous improvement. Training of managers and workers in quality concepts, tools, and procedures is an important aspect of TQM. Teams are an integral part of TQM. Two major aspects of the TQM approach are problem solving and process improvement. Six-sigma programs are a form of TQM. A six-sigma improvement project typically has one or more objectives such as: reducing delivery time, increasing productivity, or improving customer satisfaction. They emphasize the use of statistical and management science tools on selected projects to achieve business results. There are seven basic quality tools that an organization can use for problem solving and process improvements. A flowchart is a visual representation of a process. As a problem-solving tool, a flowchart can help investigators in identifying possible points in a process where problems occur. The diamond shapes in the flowchart represent decision points in the process, and the rectangular shapes represent procedures. They show the direction of “flow” of the steps in the process.arrows

A check sheet is a simple tool frequently used for problem identification. Check sheets provide a format that enables users to record and organize data in a way that facilitates collection and analysis.

A histogram can be useful in getting a sense of the distribution of observed values. It is a chart of an empirical frequency distribution.

Pareto analysis is a technique for focusing attention on the most important problem areas. The idea is to classify the cases according to degree of importance, and focus on resolving the most important, leaving the less important. A scatter diagram can be useful in deciding if there is a correlation between the values of two variables. It is a graph that shows the degree and direction of relationship between two variables. A correlation may point to a cause of a problem. A control chart can be used to monitor a process to see if the process output is random. It can help detect the presence of correctable causes of variation. It is a statistical chart of time-ordered values of sample statistic. A cause-and-effect diagram offers a structured approach to the search for the possible cause(s) of a problem. It is also known as a fishbone diagram because of its shape, or an Ishikawa diagram, after the Japanese professor who developed the approach to aid workers overwhelmed by the number of possible sources of problems when problem solving. This helps to organize problem-solving efforts by identifying categories of factors that might be causing problems. A run chart can be used to track the values of a variable over time. This can aid in identifying trends or other patterns that may be occurring.

Important People in Quality
• Walter Shewart
– “father of statistical quality control”
– Control charts
– Variance reduction
• W. Edwards Deming
– Special vs. common cause variation
– The 14 points
— Deming Prize– Prize estabolished by the Japanese and awarded annually to firms that distinguish themselves with quality management programs.
• Joseph Juran
– Quality Control Handbook, 1951
– Viewed quality as fitness-for-use
– Quality trilogy– quality planning, quality control, quality improvement
• Armand Feigenbaum
– Quality is a “total field”
– The customer defines quality
• Philip B. Crosby
– Zero defects
– Quality is Free, 1979
• Kaoru Ishikawa
– Cause-and-effect diagram
– Quality circles
– Recognized the internal customer
• Genichi Taguchi
– Taguchi loss function
• Taiichi Ohno and Shigeo Shingo
– Developed philosophy and methods of kaizen

DIMENSIONS OF QUALITY

An emphasis on quality control heightened during WWII. Quality control then evolved to quality assurance and is now better known as a Strategic Approach, a tool for improving not only products but also processes and services. Quality can be thought of as the degree to which performance of a product or service meets or exceeds expectations. Quality should be measured differently for products and services, and therefore product and service quality are judged on their own set of dimensions. Responsibility for overall quality lies with top management. Top management must establish strategies, institute programs for quality, and motivate managers and workers. Most times managers are on a quest for the quality of an organization as a whole; this is referred to as Total Quality Management (TQM). TQM involves a continual effort for quality improvement by everyone in an organization. So in essence, for an organization to meet and exceed goals of quality control the entire supply chain needs to be involved.

Consequences of poor quality
There are numerous consequences with poor quality products which can affect a business and a customer in many different ways. Whether it is a small or large problem, the magnitude of the problem always affects someone at some point. When a product is designed poorly or lacks in quality, customers recognize that very quickly, and it can quickly lead to a problem for the business. It does not matter whether the company is a product or a service oriented company because poor quality will always, most likely, create negative affects for the firm. Eventaully, the low cost input in the R&D department and the using cheaper materials will lead to loss of business . Therefore, due to the cost associated with satisfying the customer, it is best to fix problems in the design phase rather than dealing with it after it’s in the hands of a customer. The sooner the problem with a product or service is identified and remedied, the better!

Methods for Generating Ideas
Additional tools that are useful for problem solving and process control include:

• Brainstorming
• Affinity diagram
• Quality circles
• Interviewing
• Benchmarking
• 5W2H approach
  • Who
  • What
  • When
  • Where
  • Why
  • How
  • How much

Brainstorming is used to communicate thoughts and ideas without any criticism. Everyone has equal input and ideas are shared in order to facilitate problem solving.
Affinity Diagram is used to arrange data into categories that may be analyzed. One of its uses is to group many responses to similar ideas. It uses the right side of the brain (generates ideas) and the left side of brain (analyze and organize).
Quality Circles are usually informal meetings between employees to exchange ideas and concerns about processes.
Interviewing is a tool used by managers to find information from employees through Q & A sessions.
Benchmarking is tool for companies to set standards. It attempts to compare itself to the best in the industry in order to meet or exceed the standard set. Usually uses these steps: 1. Identify process for improvement. 2. Identify organization that is the best at that process. 3. Study that organization. 4. Analyze data. 5. Improve process at your organization.
5W2H approach asks the questions what, why, where, when, who, how, and how much (5 W words and 2 H words). Its purpose is to ask the questions that will lead to improving processes.

Responsibility for Quality

Top Management– has the ultimate responsibility for quality. While they establish strategies for quality, they also institute programs to improve quality; guide, direct, and motivate managers and workers; and set an example by being involved in quality initiatives.
Design– Quality products and services begin with design.

Sales can be lost when the products are not designed well and do not function correctly. Customers get turned off when that happens and may not want to risk buying the same brand again. Liability is an important area because there is the potential for damages or injures that could reflect badly on the company and then damage control will need to be done to repair the company image and reputation. Productivity can be slowed when there are defects and poor quality because time must be spent to redo and fix these issues. Costs can be reduced by up to five times if problems are caught early on in the process, compared to later in the production stages.

Questions to the chapter
1.Which quality certification pertains to set of international standard on quality management and quality assurance?
a) ISO 14000
b) ISO 24700
c) ISO 9000
d). ISO 27000
e) None of the above

2.Whose key contribution included the cause-and-effect diagram (fishbone diagram)?
a) Joseph M. Juran
b) Kaoru Ishikawa
c) Armand Feigenbaum
d) Walter Shewhart
e) Genichi Taguchi

3.Which cost of quality involves the cost of preventing a defect from occurring?
a) Appraisal Costs
b) Failure Costs
c) Fixing Costs
d) Prevention Costs
e) Internal Costs

4.Which failures are discovered after delivery to customer?
a) External
b) Internal
c) Prevention
d) Quality
e) None of the above

5.Which method for generating ideas is a tool used to organize data into logical categories?
a)Brainstorming
b) Affinity Diagram
c) Quality Circles
d) Interviewing
e) Benchmarking

6. Which of the following is a consequence of poor quality?
a) loss of business
b) liability
c) productivity
d) costs
e) all of the above are correct

7. Which of the following is true of the benefits of good quality?
a) enhanced reputation for quality
b) reduced productivity
c) lower liability cost
d) higher liability cots
e) both a & c are correct

8. The cost to fix a problem at the design or production stage, compared to at an earlier stage costs how many times more?
a) one time
b) two times
c) three times
d) four times
e) five times

10. Productivity is closely related to which of the following?:
a) liability
b) costs
c) quality
d) express written warranties
e) defective products

11. What are the three costs that are associated with quality?
a) Appraisal costs, Prevention costs, Labor costs.
b) Appraisal costs, Prevention costs, Failure costs.
c) Appraisal costs, Prevention costs, Internal Failures costs.
d) Appraisal costs, Prevention costs, Total Costs.
e) Appraisal costs, Prevention costs, Overhead cost.

12. Which of the following are two major aspects of the TQM approach?
a) Continuous improvement and process improvement.
b) Six-sigma and continuous improvement.
c) Problem solving and process improvement.
d) Problem solving and continuous improvement.
e) All of the above.

13. What is the Japanese term for continuous improvement?
a) kaizen
b) Ishikawa
c) fishbone
d) a. and c. are correct answers,
e) None of the above.

14. What are the four basic steps in the PDSA cycle?
a) Problem, Decision, Solution, Award.
b) Design, Study, Plan, Do, Act.
c) Plan, Design, Check, Act.
d) Plan, Do, Study, Act.
e) None of the above.

15. Which basic quality tool is focused on resolving the most important problem?
a) Scatter diagram
b) Control chart
c) Pareto analysis
d) Cause-and-effect diagram
e) Fishbone diagram

16. Which of the following is a Determinant of Product Quality?
a) Design
b) Product/Service conformity to design
c) Ease of Use
d) Service after delivery
e) All of the Above

17. Which of the following doesn’t refer to the term “Ease of Use”?
a) Increases the chances that product will be used for intended design
b) Product conforms to the intended designs
c) Instructions are included in the product
d) Product continues to function safely and properly
e) All of the above refers to “Ease of Use”

18. Which is NOT a Consequence of Poor Quality
a) Productivity
b) Loss of Business
c) Costs
d) Legal Liability
e) None of the Above

19. The consequences of poor quality products or services may result in:
a) Less Liability
b) Baldrige
c) Injuries and defective output
d) Lower costs
e) Faster Productivity

20. One of the things Designers should consider when making a product is…
a) Customer preference
b) Company Costs
c) Production capabilities
d) A and C
e) All of the Above

21. Although closely associated with quality, this name is not on the list of quality gurus:
a) W. Edwards Deming
b) Philip Crosby
c) Malcolm Baldrige
d) J. M. Juran
e) Kaoru Ishikawa

22. Which name is associated with management responsibility?
a) Deming
b) Crosby
c) Juran
d) Feigenbaum
e) Ishikawa

23. Which quality pioneer compiled a list of 14 points that he believed were imperative to achieve quality in an organization?
a) Deming
b) Crosby
c) Baldrige
d) Juran
e) Ishiikawa

24. Which one of these is a tool for gathering data?
a) Control chart
b) Fishbone diagram
c) Scatter diagram
d) Flowchart
e) Checksheet

25. Which one of these is a tool for problem solving?
a) Benchmarking
b) Cause-and-effect diagram
c) Histograms
d) Scatter diagrams
e) Control charts

26. Which of these people are not considered one of the “gurus” who mapped out some of the foundations of modern quality management?
a) Walter Shewhart
b) W. Edwards Deming
c) Joseph M Juran
d) Philip B. Crosby
e) Charles P. Bonini

27. What is Six Sigma best defined as:
a) A Japanese term for continuous improvement
b) A business process for improving quality, reducing costs and increasing customer satisfaction
c) Framework for problem solving and improvement activities
d) A diagram of the steps in a process
e) None of the Above

28. Which of the following is not a dimension of product quality?
a) Performance
b) Special features
c) Consistency
d) Conformance
e) Reliability

29. Philip B. Crosby identified key points in his concept of zero defects, which of the below is one of his key points?
a) Management must be persistent in efforts to achieve good quality
b) Institute modern methods of training on the job
c) Quality products and services begin with design
d) Cost to remedy a problem is a major concern in quality management
e) All the above.

30. Reducing one or more steps in a supply chain by cutting out one or more intermediaries is known as:
a) Delayed differentiation
b) Cross-docking
c) Avoidance
d) Disintermediation
e) Reverse logistics

31. What are the key elements of Deming’s 14 points?
a) Constancy of purpose
b) Continual improvement
c) Profound knowledge
d) Decreasing labor costs
e) Only a, b, and c

32. By how many times is it more costly to fix a problem at the customer end compared to the design stage?
a) 1x
b) 5x
c) 3x
d) 2x
e) 4x

33.Costs of activities designed to ensure quality or uncover defects are costs associated with?
a) external failures
b) failure costs
c) appraisal costs
d) prevention costs
e) internal failures

35. What is known as performance, aesthetics, special features, conformance, reliability, durability, perceived quality, and serviceability?
a) quality of design
b) quality of conformance
c) return on quality
d) dimensions of quality
e) Deming prize

36.Which technique uses groups of people to share thoughts and ideas without any criticism?
a) Process Improvement
b) Benchmarking
c) Brainstorming
d) Interviewing
e) 5WH2

37. Benchmarking uses which of the following to improve standards?
a) Larger companies
b) Smaller companies
c) Competitors
d) Suppliers
e) Industry Leaders

38.Which methods asks 7 questions to improve processes?
a) 5W2H
b) Affinity Diagram
c) Quality circles
d) Benchmarking
e) Brainstorming

39. Control charts have which of the following features?
a) Tabulated categories
b) Diagrams
c) Lower control limits
d) Upper control limits
e) Both C and D

40. A Scatter diagram is useful when there is
a) One variable
b) Correlation between variables
c) Multiple variables
d) NO Correlation between variables
e) Variation

41.What is NOT the primary determinants of qualiy, which a product or a service successfully satisfies its intended purpose?
a) Ease of use
b) Cost
c) Design
d) Service after delivery
e) Design Conformity

42.What is the correct definition of an appraisal cost?
a) cost of preventing defects from occurring
b) cost caused by defective parts or products or by faulty services
c) An approach that evaluates the financial return of investments in quality
d) cost of activities designed to ensure quality or uncover defects
e) all of the above

43.Which quality tool can be useful in getting a sense of the distribution of observed values?
a) histogram
b) check sheet
c) scatter diagram
d) control chart
e) flow chart

44. What step comes after “develop performance measures and collect data” and before “generate potential solutions” in the TQM problem-solving process?
a) define the problem and establish an improvement goal
b) analyze the problem
c) choose a solution
d) implement the solution
e) monitor the solution to see if it accomplishes the goal

46. Who is known as the “father of statistical quality control?”
a) W. Edwards Deming
b) Walter Shewhart
c) Philip B. Crosby
d) Joseph M. Juran
e) Genichi Taguchi

47. Which of the following isNOTa dimension of quality?
a) Performance
b) Durability
c) Aesthetics
d) Investment
e) Conformance

49. A statistical chart of time-ordered values of a sample statistic is a:
a) Flowchart
b) Check sheet
c) Scatter Diagram
d) Cause-and-effect diagram
e) Control chart

50. What question is not included in the 5W2H approach?
a) Which
b) What
c) Why
d) Where
e) When

51. Which are included in the product quality?
a) Reliability
b) Durability
c) Convenience
d) a and b
e) All of the above

52. What are the determinants of quality?
a) Design
b) Ease of use
c)Service after delivery
d) The wellness of product to design
e) All of the above

53.Which of the following is not a consequence of poor quality?
a) productivity
b) liability
c) costs
d) speed
e) All of the above

54. The appraisal costs means:
a) costs of preventing defects from occurring
b) costs caused by defective parts or products or by faulty services
c) costs of activities designed to ensure quality or uncover defects
d) costs related to defective products
e) neither one is correct.

55. A set of international standards for assessing a company’s environmental performance is
a) ISO 14000
b) ISO 24700
c) IEC 24700
d) ISO 9000
e) None of the above

56. Which tool uses a diagram of the steps as a visual representation of a process?
a) PDSA Cycle
b) Flow Chart
c) Check Sheet
d) Histogram
e) Scatter diagram

57. A run chart shows performance over
a) speed
b) quantity
c) productivity
d) time
e) quality

59. All of the following are affected by poor quality EXCEPT — One more choice needed.
a. Loss of Business
b. Increased Liability
c. Decreased Costs
d. Increased Productivity
e. Customer loyalty

60. The Baldrige Award is an award given out for doing what?
a. Stimulate Efforts to improve quality
b. Recognize quality achievements
c. Publicize successful programs
d. All of the above (ABC)
e. None of the above

61. Dimensions of quality include: Performance, Special Features, Reliability, Durability, Perceived quality, and ___.
a. Tested Quality, Usefulness
b. Ease of use, Aesthetics,
c. Conformance, Price
d. Aesthetics, Conformance
e. None of the above

62. Which quality tool uses a technique for classifying problem areas according to degree of importance, and focusing on the most important.
a. Pareto Analysis
b. Scatter Diagram
c. Control Chart
d. Histogram
e. None of the above

63.) Which quality management principle(s) form the basis of the latest version of ISO 9000:

A.) A customer focus
B.) Leadership
C.) A process approach
D.) Continual improvement
E.) All of the above

64.) Which is the annual award given by the US government to recognize quality achievements of US companies?

A.) European Quality Award
B.) Deming Prize
C.) Baldrige Award
D.) Carlton Award
E.) Cadillac Award

65) Problem solving, material and product losses, scrap, and downtime are examples of:

A) Appraisal costs
B) Prevention costs
C) Internal failure costs
D) External failure costs
E) None of the above

66. One of the quality dimentions is this same for product and service. Which one?
a) special features
b) serviceability
c) reliability
d) courtesy
e)convenience

67. Six sigma is a process to :
a) improve quality
b) increase customer satisfaction
c) reduce costs
d) all of the above
e) none of the above

68.
Who contributed the continuous improvement aspect of quality?

a) Juran
b) Crosby
c) Ohno and Shingo
d) Ishikawa
e) Feigenbaum

69.
All of the following are consequences of Poor Quality EXCEPT

a) Liability
b) Loss of business
c) Cost
d) Direct feedback
e) a and d

70.
PDSA stands for

a) Plan Direct Study Act
b) Plan Direct Simplify Act
c) Plan Do Study Act
d) Participate Do Satisfy Act
e) None of the above

71.
Which annual award is given by the U.S. government to recognize quality achievements of U.S. companies?

a) Deming Prize
b) Baldrige Award
c) Juran Award
d) Taguchi Award
e) None of the above

72.
Which type of cost relates to attempts to prevent defects from occurring?

a) Prevention Costs
b) Foreseeable Costs
c) Appraisal Costs
d) Failure Costs
e) None of the above