QUALITY MANAGEMENT

An Introduction

John van Rijn

INDEVELOPMENT

INDEVELOPMENT:

Quality Management; An Introduction

QUALITY MANAGEMENT
An Introduction

Any part of this publication may be fully reproduced or translated provided that the source and
author are fully acknowledged.
Edition 2004.

INDEVELOPMENT:

Quality Management; An Introduction

Table of Contents:
1
2
3
4

Introduction ............................................................................................................... 4
Quality Inspection...................................................................................................... 5
Quality Assurance ..................................................................................................... 7
Improving Quality .................................................................................................... 12
4.1
Total Quality Costs ......................................................................................... 12
4.2
Total Quality Management ............................................................................. 13

INDEVELOPMENT:

Quality Management; An Introduction

1
Defining quality

INTRODUCTION

Workmanship and craftsmanship are probably the first words that come
to mind while describing quality of products. However there are various
definitions of quality. J.M. Juran defined quality as fitness for use and
takes the point of view of the user to evaluate quality. It is equally
possible to evaluate quality from the point of view of the customer, who
purchases the product. Customers want the best product for certain
customer conditions, like price. Customers are not always the users of
the products and services. Production equipment is purchased by the
management or directors but usually used by their workers.
Many customers want guarantees about the quality of the products and
services that they intent to purchase. The management of production
companies are always searching for options to gain a market
advantage over competitors. Improving the quality of their products is
one option they explore to gain confidence of potential buyers.
Obtaining certificates that indicate the quality is another.

Early quality control

The guilds (1300-1800) already protected their customers against bad

craftsmanship. They were the ones who first issued certificates about
the craftsmanship and quality for the products. Many professions
became protected. Controllers started to inspect the quality of the
products.

Quality Inspection

In the period between 1920 and 1950, quality management focussed

on inspecting of the products. The main objective of the inspections
was to satisfy the customers. Most companies included a special
inspection unit. The inspection results were seldom used to improve the
quality of the product or production process.

Quality assurance

During the second world war, the allied forces didnt want to rely on test
results alone and wanted guarantees that the bombs, ammunition etc
were produced under controlled circumstances. These demands
resulted in the emphasis on control of the production processes.

TQM

In the early 1950s Japanese firms and later after 1970s firms in the US
and Europe started to adopt a new approach to quality management,
moving away from just controlling the production processes to
continuously improving the products and production processes. This
approach is known as Total Quality Management (TQM).

INDEVELOPMENT:

Quality Management; An Introduction

QUALITY INSPECTION

Everything varies

Everything varies, even automatic production processes. Equipment

wear out and needs maintenance. The quality of the raw materials
varies and the composition of the staff differs. As a result the quality of
the products differ. Companies want to protect their customers against
inferior products or want to protect themselves against inferior raw
materials. As a result, in the 1920s companies started to inspect the
quality of outgoing and incoming products.

Test results

When test results of these inspections show that the quality of a (batch
of) products is unacceptable, there are various options:
Demolish and reproduce
Repair
Sorting
Sometimes it is possible to blend in the failing batch in a larger volume.
This is only possible when the production volume is very large and it is
possible to produce a very homogeneous product that meets the
specifications, e.g. with the production of paint. This technique cannot
be applied in the construction industry where all products are more or
less unique.
One of the main concerns of the producers is the effectiveness and
efficiency of the inspection process. For example instead of inspecting
all products it prefers to use sampling techniques and to measure
certain characteristics when it is relatively easy and cheap to do so. It is
far easier to inspect concrete sewer pipes in the factory than when they
are buried in the soil. It is also far easier to correct a leaking connection
prior refilling the trench.
There are two typical errors of inspection results:
Consumers risks
Producers risks

Consumers risk

The consumers are at risk when the batch should have been rejected
but was not. The consumers risk can be reduced by setting higher
standards for the sample than for the real batch. However this
increases the producers risk.

Producers risk

Producers risks are associated with situations in which the batch was
rejected where in fact it is perfectly acceptable.
The size of the sample influences the reliability of the measurements. A
large sample size will reduce the change on producers and consumers
risk. The sample size correlates with the quality standards for the batch.
Large samples can be very expensive, in particular when destructive
methods are used. Producers therefore search for options to reduce the
sample sizes, e.g. by formulating higher standards of the sample or by
reformulating the standards.
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INDEVELOPMENT:

Quality Management; An Introduction

Having said this, it is usually worthwhile to consider a large sample size

in the early stage of production. The sample size may be reduced after
analysis of the first test results, depending on these test results.

INDEVELOPMENT:

Quality Management; An Introduction

QUALITY ASSURANCE

Disadvantages of quality
inspection

Inspection of the products alone, have proven to be unsatisfactory for

the producers. Failing batches have to be destroyed, repaired or sorted
out. All expensive mechanism to retain the confidence of the
customers. The inspection techniques themselves are not cheap either.

The beginning of quality

assurance

Besides these internal motives, more and more clients are seeking
assurance from the supplier that the products are meeting the set
specifications. This started during the second world war, when the
production of new military equipment and ammunition expanded
rapidly, using relatively inexperienced workers to produce them. The
allied forces were seeking guarantees that their equipment would
operate under all circumstances and that the ammunition was reliable.
Much later in 1970 the NATO formulated these requirements in contract
clauses. Suppliers had to provide plausible evidence that its products
were manufactured under controlled circumstances and that the
product prior delivery had been tested.
Thus quality management moved from product inspection to production
control. The initial assumption was that control of the production
process would eliminate all possible causes of failures of the products
and therefore the products would meet the specifications.

Eliminating causes of
variation

In reality the control of the production processes focuses on eliminating

all causes of variation. Thus by controlling the variations of all inputs
and the production processes an attempt is made to control the
variations of the products/services quality.

Assignable causes

The production characteristics vary because the equipment wears out

but more importantly everybody operates differently. Over time, routineoperating teams will develop an attitude to deliver the minimum
acceptable, which they wrongly consider as the most efficient
operation. As a result the quality of the process reduces and eventually
the quality of the products. The management can easily correct these
so-called assignable causes of variations.

Common causes

However there are also common causes of variation. These causes are
inherent of the production process or their inputs. To get rid of these
causes the management has to change the production process or
choose for other inputs.

Standardisation

Quality Assurance focuses on controlling the assignable causes of

variation through standardisation and is therefore a way of coordinating
efforts between different operating and support units. The production
processes are described and formalised in procedures. These
processes are closely monitored and failures are described. When the
production process does not perform as described in the procedure

INDEVELOPMENT:

Quality Management; An Introduction

corrective actions are required. The monitoring often includes so-called

control charts.
Control chart

A control chart is simply a form, which is used to communicate

information about the production process. It can be compared with
logbooks. It registers a number of parameters like:
General information about the production, e.g. names of
operators, timing, batch number etc
Alarm parameters to prevent that failing equipment is used
Product characteristics that measure the actual performance of
the production process, similar to inspection results

Monitoring variation

The Control Chart is a means of monitoring variation in the

characteristics of a product or service by:
Focussing on time dimension
Studying the nature of the variability in the process

Identify causes

Besides earlier mentioned objectives, the principal goal of the control

chart is to separate assignable causes of variation from common
causes of variation.
The chart helps in preventing two types of errors:
The first type of error involves the belief that an observed value
represents assignable cause variation when in fact it is due to the
common cause variation of the process. The second type of error
involves treating assignable cause variation as if it were common cause
variation and thus not taking immediate corrective action when it is
necessary.

Control limits

It is necessary to specify the limits within which character values are in

control. In most statistical cases, control limits are set within the 3
standard deviation of the statistical measure of interest, e.g. average,
proportion, the range etc. (The variance of the products quality will
almost always have a normal distribution, as many independent factors
influence the performance of the production.)

Analysing control charts

Once the control limits are set, the control chart is evaluated from the
perspective of:
Any points outside the control limit
Patterns that might arise over time

Out-of-control

If there are any values outside the control limit, this means that the
production process is out-of-control. Out-of-control processes may
contain both common and assignable causes of variation. An in-controlprocess contains only common causes of variation.
Once a process is out-of-control, the assignable causes of variation that
are producing the out-of-control condition must be identified. If the
assignable causes are detrimental to the quality of the product or
service, plans to eliminate this source of variation must be
implemented. When an assignable cause increases quality, the process

INDEVELOPMENT:

Quality Management; An Introduction

should incorporate this positive feature into the process design.

Trends

Trends or patterns may provide useful information about the product

characteristic. For example if the quality is consequently higher than the
set standard (centreline) than it may be possible to increase the value
of the quality standard. Or when the value of the quality consequently
decreases, the pattern may indicate that management has to supervise
the production more severely to avoid an out-of-control situation in the
future.
It is not that easy to detect patterns, but there are two simple guidelines
that indicate patterns:
Eight consecutive points above/under the centre line
Eight consecutive points increasing/decreasing value

Need for pairing measures

of interest

Usually two measure of interest are used. One to monitor the variation
in the process, the other to monitor the process average.
For the process to be considered in control, the value of both measures
of interest must be within the specified control limits. Often control
charts for the range and the average are paired. However other pairs
are also possible.

Customer satisfaction

However processes that are in control are not a guarantee that the
customers are satisfied about the product or service. Too many
dissatisfied customers often lead to product and production process
changes. There are many ways to analyse customer satisfaction.

Percentage of products
meeting specifications

A straightforward way of analysing the capability of a process is to

estimate the percentage of product or service that is within
specifications on condition that production processes are in control.
Note that the upper and lower specification limits are not the same as
the upper and lower control limits. The control limits are statistical
devices and have no relation with the requirements of the product or
production process.

Procedures

The procedures have the objective to prevent variations in the

production process. The procedures formulise the production,
maintenance and management operations. The management has to
ensure that the procedures are followed; otherwise the procedures
have no or little value.

Designing procedures

There are different ways of developing procedures. Procedures of new

operations are often designed. Procedures of existing operations are
often based on a description of existing work practices. In both
situations it is important to focus on eliminating causes of variations in
product characteristics. Thus it is not necessary to control every single
aspect of the process.

INDEVELOPMENT:

Quality Management; An Introduction

Design criteria

The procedures of new operations are usually designed on basis of

criteria like:
Suitability & effectiveness to produce the specified goods
Acceptable to regulators and pressure groups
Efficiency
Ability to correct the production process in out-of-control
situations

Existing processes

The design of procedures for existing operations is merely a description

of current work practices, in which causes for variations are eliminated.
Usually the production floor is heavily involved in the development of
these procedures. When the management expects that there is
mismatch between the customers requirements and their
products/services, it often initiates projects to improve the products or
production process.

Presentation

It is important that the presentation of the procedures accommodates

the use at the work floor, where the procedures are needed. It may be
possible to present the procedures in the form of flow charts, manuals
or electronic documents. Only the relevant procedures should be made
available to the responsible officers or units. The procedures should be
as precise and concise as possible. Explanations should be attached to
the procedure, but not included in the main text.

Disseminating procedures

An important task of the management is to make the procedures

available and up to date at the operation levels. Furthermore they have
to ensure that every officer has read and understand all relevant
procedures and updates.

Risk management plans

Besides procedures for regular operations it is necessary to develop a

procedure for situations in which the production process is out-ofcontrol, a risk management plan. The risk management plan assists the
work floor and its management to take actions in times of crisis, when
they are under pressure. For more information about Risk Management
Plans, see also Project Management for Civil Engineers1.

Improvement procedure

The set of procedures should include a procedure to change

procedures in order to control the variability of operations better, and to
improve the effectiveness and efficiency of operations.

Audits

Quality assurance systems are not complete unless there are audits.
Internal audits provide information about the functioning of the quality
assurance system and the production process. On basis of audits the
quality assurance system can be changed. External audits by
independent organisations (e.g. ISO 9000 series) allow customers to
get confidence in the products and services. The independent
organisations provide objective evidence that the quality of the product
is of a certain standard. Most producers intend to sell their goods and
services to different clients. Every client has its own set of

Available on this website

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INDEVELOPMENT:

Quality Management; An Introduction

requirements. It is difficult and costly to design, produce each product

for each individual client. Mass production, through its economics of
scale reduces these costs but also the options to accommodate specific
customer attributes.
Mass products are therefore designed on basis of common shared
quality requirements of the target group. To provide detailed
information, accommodating the specific needs of individual customers
is equally expensive and most customers are not willing to pay for such
information about mass products. The certificates of the independent
organisations are a relative cheap measure to get customer confidence.
Quality assurance
techniques in projects

Quality assurance techniques have been successfully applied on all

sorts of routine operations, like mass production. It has been
recognised that it is far more difficult to apply the technique on design
or project operations. Project operations are characterised by high
uncertainty of the product, production process and required inputs.
Nonetheless an important task of project managers is to ensure the
quality of the project outputs. This often implies setting quality
standards for the different project activities and monitoring the
performance. Actions very similar to quality assurance actions for
routine operations. The mere difference is that it is difficult to audit the
project and to obtain certificates from external organisations.
Furthermore project managers have to build in potential variations to
explore unique options to address the customer demands.

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Quality Management; An Introduction

4
Motives for improving quality

Competition

IMPROVING QUALITY

Quality inspections and quality assurance techniques address the

prime motive to obtain customer confidence. The techniques are aimed
to prevent and signal failures in production. Many organisations also
make efforts to improve the quality of their products and services.
An important reason is to improve the efficiency of the production
processes through reduction of the quality related costs.
Competition among companies in the same industry or individuals in
the same field may be seen as the driving force for innovation.
Companies are constantly searching for opportunities to increase
profits and increase their market share. As a result they improve the
efficiency of their production processes, reduce the quality related costs
and develop new and better products. Lower retail prices and better
quality products of competitors affect the expectancy pattern of
potential customers. Companies have no choice but to innovate
continuously if they want to survive.
This chapter explains the concept of quality costs and describe a
philosophy about continuous quality improvements, Total Quality
Management.

4.1

TOTAL QUALITY COSTS

Total quality costs

Despite all the efforts to signal and prevent failures, companies still
incur costs due to inferior products (losses and waste). The cost related
to prevent, signal and as a result of failing products are the so-called
total quality costs.

Improvement projects

Improvement projects are initiated when the organisations wants less

corrective measures to eliminate deviations of the quality targets.
Insight in these quality costs are needed to assess the importance of
the quality related problems, for example by identifying recurring
problems.

Quality cost

Exogenous factors affecting

quality costs

Preventive measures to avoid failures are often said to reduce the total
quality costs and therefore the total production costs. In reality the total
quality costs are influenced by a number of external factors, like the
market, product developments, developments at suppliers, etc. The
quality improvement project may not result in a reduction of the total
quality costs. However without the project, most likely the total quality
costs would have increased proportionally.

Regulations

Cost reduction is not the only motive for companies to improve the
quality of the products. Government regulations with regard to liability of
occupational health and safety and environment protection forces
companies equally to control their production processes.

Need for records

To get insight in the quality costs the firms need to record its
expenditures with regard to its actions to prevent and signal failures

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Quality Management; An Introduction

and the consequences of the failures.

Consequences of failures

The internal consequences of the failures, e.g. repairs and waste, are
relatively easy to record but the external consequences, loss of clients,
reputations are difficult to estimate. Nonetheless estimates should be
made as the external consequences can be extremely high and easily
exceed all other quality costs together.

4.2

TOTAL QUALITY MANAGEMENT

Since 1970, Total Quality Management (TQM) has become an

important philosophy in many companies all over the world. The
management of Japanese companies and the Union of Japanese
Scientists and Engineers already adopted the ideas of American quality
management gurus, like Deming, Juran and Feigenbaum in the 1950s.
These gurus developed their ideas during the second world war. Prior
1950 Japan produced shoddy consumer products of poor quality. The
management of Japanese companies realised that quality is a vital
factor in being able to export consumer products successfully. As a
result in many industrial sectors Japanese companies were market
leaders by the end of the twentieth century.
Learning organisations

Although there are varies sub-schools, they all concentrate on

continues improvement of all aspects of the firm through two learning
processes:
1. Single loop learning; Improving the existing product and
production processes
2. Second order learning; Changing products and production
processes
Single loop learning is often the result of innovations from the work
floor, while second order learning is a result from R&D, marketing
studies and design studies.

Customer satisfaction

Total quality management measures its success on basis of customer

satisfaction with regard to all aspects of the product (quality, price and
availability). In most societies it is necessary to include the demands of
regulators and pressure group in the analysis of customer satisfaction.
The customer attributes are translated into measurable terms and
subsequently in the product designs and the production process.

Producers concerns

Besides customers satisfaction, the different TQM gurus focus on three

central themes: Effectiveness, efficiency (lean production) and control
of production process. These are the so-called producer concerns.

Organisation culture

Many explained the successes of Japanese companies because of its

strong cooperative culture, where the employees and management
have similar values and goals and are also strongly committed to
achieve these goals. Many gurus were quick to add this aspect in their
intervention mix. They emphasise the need for a progressive and

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Quality Management; An Introduction

innovative organisation culture and at the same time a culture of

working according the procedures.
Intervention mix

Thus total quality management is a mix of statistical process control,

design engineering and marketing and organisation culture
strengthening techniques.

Intra-organisation customers

An interesting feature in total quality management is the creation of

intra-organisation customers. This means that the different units
address each other as customer and producer. A unit that produces
sketch designs in a road authority not only has to meet the
requirements of the government, road users, and road authority, but
also that of the unit that uses the sketch design to develop the technical
design. This type of customer relationship is also applied when parts of
the work are subcontracted and the contractor uses semi-finished
products of the principal. The common view is that the principal is the
customer of the contractors product and has the right to evaluate the
quality of the product. However many contractors have to work with
semi-finished products of the principal and not always meet these semifinished products the quality expectations of the contractor.

Teamwork

Another important feature of TQM is the creation of teamwork and

breaking down the barriers between departments. This seems obvious.
You would be surprised to see a goalkeeper of Manchester United or
Real Madrid stepping away to let the opponent score because one his
teammates made a mistake earlier on. However in quite a few
organisations, some with only 10 officers, certain units are completely
inactive or non-cooperative when they feel that another unit made a
mistake. In particular admin & finance departments are notorious for
misusing their financial accountability responsibility.

Internal competition

Interestingly, some gurus emphasise the need for internal competition.

They consider internal competition as a force for innovation and
productivity increases, but many others feel that cooperation is more
effective that competition. Internal competition could lead to a negative
working environment. Colleagues backstabbing, sabotage, withholding
information and limited willingness to cooperate together are common
seen problems. Internal competitions often result in pleasing the boss
competitions, when evaluations are not based on objective criteria and
measurable performance indicators. The organisations should be
careful using and designing internal competitions. The competitors
should be exposed to equal circumstances and should be able to
autonomously influence their performance. When this is not possible
the competitors should compete against a standard, like a handicap in
golf. Furthermore the internal competitions should be relatively short in
duration and be fun for all competitors. To long competitions become a
routine and lose their incentive to innovate. When kept fun, internal
competitions tend to cultivate craftsmanship and pride among the
employees.

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INDEVELOPMENT:

Decentralisation &
Empowerment

Quality Management; An Introduction

According to Juran, authorities related to product and process quality

should be delegated to the operator level. Operator self-control means
that the operators have the responsibility, knowledge, skills, means,
and autonomy to inspect and control the quality. Deming adds that the
organisation culture should be open and allow staff to learn
unthreatened from mistakes. Many multinationals will emphasise that
employees have to make mistakes and failures. They consider that as
an indication for the workload of the employee. Mistakes are
considered legitimate when they are caused due to uncertainty and
unpredictability.

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