Chapter 3
Total Quality in
Organizations The
Management
& Control of
Quality, 7e
Dr. John V. Padua
1
Learning Objectives
At the end of this session, the students are all
expected to understand the following:
• The Systems and its importance
• Manufacturing Systems
• Quality in Different Areas
• Critical Quality Differences in Service and
Manufacturing
2
Key Idea
As consumer expectations have risen, a
focus on quality has permeated other key
sectors of the economy, most notably
health care, education, not-for-profits,
and government.
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Systems
A system is a set of functions or activities
within an organization that work together for
the aim of the organization.
Subsystems of an organization are linked
together as internal customers and
suppliers.
A systems perspective acknowledges the
importance of the interactions of
subsystems, not the actions of them
individually.
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Manufacturing Systems (1 of 2)
Marketing and sales
Product design and engineering
Purchasing and receiving
Production planning and
scheduling
Manufacturing and assembly
Tool engineering
5
Manufacturing Systems (2 of
2)
Industrial engineering and process
design
Finished goods inspection and test
Packaging, shipping, and
warehousing
Installation and service
6
Key Idea
Traditional quality assurance systems in
manufacturing focus primarily on technical
issues such as equipment reliability,
inspection, defect measurement, and
process control.
7
Quality in Marketing
Marketing and sales personnel are
responsible for determining the needs
and expectations of consumers.
8
Quality in Product
Design
Product design and engineering functions
develop technical specifications for
products and production processes to
meet the requirements determined by the
marketing function.
9
Quality in Purchasing
A purchasing agent should not simply be
responsible for low-cost procurement, but
should maintain a clear focus on the
quality of purchased goods and materials.
10
Quality in Production
Planning & Scheduling
Poor quality often results from time
pressures caused by insufficient planning
and scheduling.
11
Quality in Manufacturing
and Assembly
Both technology and people are essential
to high-quality manufacturing.
12
Quality in Process
Design
Manufacturing processes must be
capable of producing output that meets
specifications consistently.
13
Quality in Finished Goods
Inspection and Testing
The purposes of final product inspection
are to judge the quality of manufacturing,
to discover and help to resolve production
problems that may arise, and to ensure
that no defective items reach the customer.
14
Quality in Installation and
Service
Service after the sale is one of the most
important factors in establishing customer
perception of quality and customer
loyalty.
15
Quality in Business
Support Functions for
Manufacturing
Finance and accounting
Quality assurance
Legal services
16
Key Idea
Every manager is responsible for
studying and improving the quality of the
process for which he or she is
responsible; thus, every manager is a
quality manager.
17
Quality in Services
Service is 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).”
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Key Idea
The American Management Association
estimates that the average company
loses as many as 35 percent of its
customers each year, and that about two-
thirds of these are lost because of poor
customer service.
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Critical Differences Between
Service and Manufacturing (1 of
2)
Customer needs and performance
standards are more difficult to
identify and measure
Services requires a higher degree of
customization
Output is intangible
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Critical Differences Between
Service and Manufacturing (2 of
2)
Services are produced and consumed
simultaneously
Customers are often involved in actual
process
Services are more labor-intensive than
manufacturing
Services handle large numbers of
transactions
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