UNIT I – INTRODUCTION

TQM is defined as both philosophy and a set of guiding principles that represent the
foundation of continuously improving organisation. It is the application of quantitative
methods and human resources to improve all the process within the organisation and exceed
customer needs now and in the future.

Definition of quality

Total Quality Management (TQM) refers to management methods used to enhance

quality and productivity in business organizations. TQM is a comprehensive management
approach that works horizontally across an organization, involving all departments and
employees and extending backward and forward to include both suppliers and
clients/customers. Total Quality Management (TQM) refers to management methods used to
enhance quality and productivity in business organizations. TQM is a comprehensive
management approach that works horizontally across an organization, involving all
departments and employees and extending backward and forward to include both suppliers
and clients/customers. Total Quality Management (TQM) refers to management methods
used to enhance quality and productivity in business organizations. TQM is a
comprehensive management approach that works horizontally across an organization,
involving all departments and employees and extending backward and forward to include
both suppliers and clients/customers.

One of the important issues that business has focused on in the last two decades is
quality. The other issues are cost and delivery. Quality has been widely considered as a
key element for success in business in the present competitive market. Quality refers to
meeting the needs and expectations of customers. It is important to understand that quality
is about more than a product simply working properly.

Quality refers to certain standards and the ways and means by which those standards
are achieved, maintained and improved. Quality is not just confined to products and
services. It is a homogeneous element of any aspect of doing things with high degree of
perfection. For example Business success depends on the quality decision making.

EVOLUTION OF QUALITY

Time Until 1960s Events

Quality is an art
Prior to the 20th century Demands overcome potential production
An era of workmanship
The scientific approach to management
[Link]
resulting in rationalization of work and its
1900s
break down leads to greater need for
 standardization, inspection and
supervision
Statistical beginnings and study of quality
Shewart control. In parallel, studies by R A Fisher
1930s on experimental design; the beginning of
control charts at western Electric in USA
Late Quality standards and approaches are
1930s introduced in France and Japan.
Beginning of SQC, reliability and
maintenance engineering
Seminal work by Deming at the ministry
of war in USA on quality control and
sampling
1942
Working group setup by Juran and Dodge
on SQC in US army
Concepts of acceptance sampling devised
Daodge and Deming carried out seminal
1944
research on acceptance sampling
Founding of the Japan standard
1945
association
1946 Founding of the ASQC
Visit of Deming in Japan at the invitation
1950
of K Ishikawa
1951 Quality assurance increasingly accepted
1954 TQC in Japan ; Book published 1956
Founding of European organization for the
1957
control of quality
After 1960s
The Martin Co in USA introduces the zero
defects approach while developing and
1961 producing Pershing Missiles. Quality
motivation is starting in the US and
integrated programmes begun
1962 Quality circles are started in Japan

Define Quality .

 Predictable degree of uniformity and dependability at low cost and suited

to the market -Deming
 Fitness for use-Juran
 Conformance to requirements - Crosby
  Minimum loss imparted by a product to society from the time the
product is shipped - Taguchi
 A way of managing tile organization -Feigenbaum
 Correcting and preventing loss, not living with loss - Hosffin .

 The totality of characteristics of an entity that bear on its ability to satisfy

stated and implied needs – ISO

QUANITIFICATION OF QUALITY
Q= P / E

P = Performance
E = Expectations
Q = Quality

DIMENSION OF QUALITY

Quality has 2 dimensions. These dimensions are product and service quality.

Dimensions of product quality:

1. Performance: primary product characteristics, e.g. picture brightness in TV.

2. Features: secondary characteristics, added features, e.g. remote control, picture-in-picture.
3. Usability: ease of use with minimum training.

4. Conformance: meeting specifications, industry standards,. (E.g. ISI specs., emission norms)
5. Reliability: consistency of performance over a specified time period under specified
conditions.
6. Durability: extent of useful life, sturdiness.
7. Maintainability/Serviceability: ease of attending to maintenance, repairs.
8. Efficiency: ratio of output to input. E.g. mileage, braking distance, processing time.

9. Aesthetics: sensory characteristics, e.g. appearance, exterior finish, texture, color, shape,
etc.

10. Reputation: subjective assessment based of past performance, brand image, industry
ranking.
11. Safety: in items like pressure cookers, electrical items, toys, cranes, etc.

Dimensions of service quality:

1. Time: how much time a customer must wait / undergo service.
2. Timeliness: whether service will be performed when promised.
3. Completeness: whether all items in the order are included.
 4. Consistency: consistent service every time, and for every customer. Reliability of
service.
5. Accessibility/Convenience: ease of obtaining the service.
6. Accuracy: absence of mistakes.
7. Responsiveness: quick response, resolution of unexpected problems.
8. Courtesy: cheerful, friendly service.
9. Competency/Expertise: In professions like doctors, lawyers, mechanics, etc.

DIMENSION OF QUALITY
Product quality Service quality
Performance Time
Features Timeliness
Usability Completeness
Conformance Consistency
Reliability Accessibility/Convenience
Durability Accuracy
Maintainability/Serviceability Responsiveness
Efficiency Courtesy
Aesthetics Competency/Expertise
Reputation
Safety

TQM BASIC CONCEPTS

1. Management Involvement – Participate in quality program, develop quality council,

direct participation

2. Focus on customer – who is the customer – internal and external, voice of the customer,
do it right first time and every time.
3. Involvement and utilization of entire work force – All levels of management

4. Continuous improvement – Quality never stops, placing orders, bill errors, delivery,
minimize wastage and scrap etc.
5. Treating suppliers as partners – no business exists without suppliers.
6. Performance measures – creating accountability in all levels

TQM DEFINITION

1. TQM is the management approach of an organization, centered on quality, based on me

participation of all its members and aiming at long-term success through customer
satisfaction. and benefits to all members of me organization and to society.- ISO

2. TQM is an integrated organizational approach in delighting customers (both internal and

external) by meeting their expectations on a continuous basis through everyone involved with
the organization working on continuous improvement in all products, services, and processes
along with proper problem solving methodology.

3. TQM is people - focused management system that aims at continual increase in customer
satisfaction at continually lower cost. TQM is a total system approach (not a separate area of
program), and an integral part of high level strategy. It works horizontally across functions
and departments, involving all employees, top to bottom, and exceeds backwards and forward
to include the supply chain and the customer chain.

TQM Framework

Contributions of Deming, Juran and Crosby

Deming’s 14 points for Management:

1. Create and publicize to all employees the aims and purposes of the organization.
2. Adopt the new philosophy (of customer satisfaction, continuous improvement, defect
prevention, management-labour cooperation, etc.).
3. Stop dependence on inspection to achieve quality. (Managers must understand how
variation affects their processes and take steps to reduce the causes of variation.
Workers must take responsibility for their own work).
4. End the practice of awarding business on the basis of price tag alone. (Costs due to
inferior materials/components increase costs in the later stages of production.
Suppliers themselves are part of the whole system and hence should be treated as
long-term partners).
 5. Improve constantly and forever the system of production and service .(Aim for small,
incremental, continuous improvements – not merely in the area of production but also
covering transportation, maintenance, sales, service, administration, etc. – all areas of
the organization).
6. Institute training. (Employees need the proper tools and knowledge to do a good job,
and it is management’s responsibility to provide these. Training not only improves
quality and productivity, but also enhances workers’ morale).
7. Adopt modern methods of supervision and leadership. (Managers, Supervisors should
act as coaches, facilitators and not as policemen).

8. Drive out fear. (Fear in work manifests as fear of reprisal, fear of failure, fear of
change, fear of the unknown. Fear encourages short-term, selfish thinking, not long-
term improvement for the benefit of all).
9. Break down barriers between departments and individuals. (Promote teamwork).
10. Eliminate the use of slogans and exhortations. (Workers cannot improve solely
through motivational methods when the system in which they work constrains their
performance. On the contrary, they will become frustrated, and their performance will
decrease further).
11. Eliminate work standards, numerical quotas, and MBO. (Numerical quotas reflect
short-term perspectives and do not encourage long-term improvement. Workers may
shortcut quality to reach the goal. The typical MBO system focuses on results, not
processes, and encourages short-term behavior).
12. Remove barriers to pride in workmanship. (Treating workers as commodities; giving
them monotonous jobs, inferior tools; performance appraisals, management assuming
it is smarter than workers and not using the workers’ knowledge and experience to the
fullest extent).
13. Encourage education and self-improvement for everyone.
14. Take action to achieve the transformation. (The TQ philosophy is a major cultural
change,and many firms find it difficult. Top management must take the initiative and
include everyone in it).

Contributions of Juran to TQM.

Biographical:

 Joseph M. Juran, Ph.D. (1904- ). Born in Romania. His parents migrated to the USA.
 Worked at Western Electric [Link] 1924 to 1941. There he got exposed to the concepts
of Shewhart.

Contributions:
 In 1951, he published ‘Quality Control Handbook’ which is still a standard reference for
quality control departments in organizations.
 Traveled to Japan in 1954 to teach quality management to the Japanese at the invitation of
the Japanese Union of Scientists and Engineers (JUSE). Juran and Deming introduced the
concept of SQC to the Japanese. Helped the Japanese to improve quality to
unprecedented levels.
 He popularized the concept of Fitness for Quality – comprising of Quality of Design,
Quality of Conformance, Availability (reliability), Safety and Field Service.
 Along with Deming, he introduced the concept of ‘Quality Assurance’.
 He formulated a Quality Planning Roadmap.
Quality Planning Roadmap.
1. Identify your customers,
2. Find out their needs,
3. Translate them into technical requirements,
4. Develop the product,
5. Develop and validate the process,
6. Translate the resulting plan to the operating personnel.
 He advocated the accounting and analysis of quality costs to focus attention on quality
problems.
 He emphasized that upper management in particular needed training and experience in
managing for quality. At the operational level, his focus was on increasing conformance
to specifications through the elimination of defects, supported by statistical analysis.
 Founded Juran Institute in 1979 to provide training, consulting services for improving
business performance and attaining quality leadership.
 His book ‘Managerial Breakthrough’ (1964) presented the concept of ‘Universal
Breakthrough Sequence (or Breakthrough improvement), which has now evolved
into Six Sigma, the basis for quality initiatives worldwide.
 Juran described quality from the customer perspective as having two aspects:
Higher quality means a greater number of features that meet customers’ needs.
Freedom from trouble’ – higher quality consists of fewer defects.
 Juran is recognized as the person who added the human dimension to quality – broadening
it from its statistical origins, and thus helping develop the concept of TQM.

BARRIERS IN TQM IMPLEMENTATION

Many organizations, especially small ones with niche products, are comfortable with
their current state. They are satisfied with their current level of performance and profits.
Organizations with this culture will see little need for TQM until they begin to lose market
share.
Awareness comes about when (a) the organization loses market share or (b) TQM is
mandated by the customer, or (c) management realizes that TQM is a better way to run a
business and compete in domestic and world markets.
Once an organization embarks on TQM, the following are some of the major obstacles
encountered in implementation:
 Lack of management commitment: Management does not allocate sufficient time and
resources for TQM implementation. The purpose is not clearly, consistently
communicated to all personnel. Management’s compensation is not linked to quality
goals such as failure costs, customer complaints, and cycle time reduction.
 Inability to change organizational culture: Even individuals resist change; changing
an organization’s culture is much more difficult and may require as much as 5 years
or more. Exhortations, speeches, slogans are effective only in the short run.
 Improper planning: Absence of two-way communication of ideas during the
development of the plan and its implementation.
 Lack of continuous training and education.
 Inadequate use of empowerment and teamwork.
 Lack of employee involvement.
 Non-cooperation of first-line managers and middle management.
 Lack of clarity in vision.
 Emphasis on short-term results.
 Setting of unmanageable, unrealistic goals.
 Bureaucratic system.
 TQM is considered as a quick-fix solution to current problems.
 Treating suppliers as adversaries to be manipulated, taken advantage of Adversarial relationship
between workers/unions and management. Motivating employees through fear of punishment.
 Failure to continually improve. Tendency to sit back and rest on one’s laurels. Rigidly sticking to one
‘success formula’. Lack of access to data and results. Paying inadequate attention to internal and
external customers. Ineffective measurement techniques for key characteristics of the organization.
Inability to understand the changing needs and expectations of customers. Absence of effective
feedback mechanism.

GE 6757 TOTAL QUALITY MANAGEMENT

LECTURE NOTES

UNIT 1
 1.1 Meaning of Quality

Quality referred as Grade of service / productreliability safetyconsistencyconsumer's

perception
Quality means "degree of excellence"implies "comparison “is not absolute
Quality – When a product or service meets or exceeds expectation considering the
intended use and the selling price.
Quality = performance / expectation

1.2 Dimensions of quality

1. Performance - Fulfilment of primary requirement

2. Features - Additional things that enhance performance
3. Conformance - Meeting specific standards set by the industry
4. Reliability - Consistence performance over a period of time
5. Durability - Long life and less maintenance
6. Service - Ease of repair, guarantee, and warranty
7. Response - Dealer customer relationship, human interface
8. Aesthetics - exteriors, packages
9. Reputation - Past performance, ranking, branding

1.3 Mission Statement, Vision Statement and Quality Policy

The mission statements answer the following questions: Who we are? Who are the
customers? What we do? Andhow we do it? It is the usually a one paragraph statement which
describes the function of the organization. It provides a clear statement of purpose for
employees, customers and suppliers.
Example: To meet customers ‘transportation and distribution needs by being the best at
moving their goods on time, safely and damage free. CANADIAN NATIONAL RAILWAYS

Vision Statement:
 It is a short declaration of what an organization aspires to be tomorrow. It is the ideal
state that might never reached but which you continuously strive to achieve.
Example: We will be the preferred provider of safe, reliable, and cost-effective products and
services that satisfy the electric-related needs of all customer segments.
FLORIDA POWER & LIGHT COMPANY

Quality Policy:
The Quality Policy is a guide for everyone in the organization as to how they should
provide products and service to the customers. The common characteristics are Quality is first
among equals. Meet the needs of the internal and external customers. Equal or exceed the
competition. Continually improve the quality. Include business and production practices. Utilize
the entire work force

1.4 Customer’s Satisfaction

Consumer's opinion of a product's (or a brand's) ability to fulfil his or her expectations. It
may have little or nothing to do with the actual excellence of the product, and is based on the
firms (or brand's) current public image (see corporate image), consumer's experience with the
firm's other products, and the influence of the opinion leaders, consumer's peer group, and
others.

Customer Satisfaction:
Customer – A person who buys the product or service or even a consumer who may
become future customer Satisfaction
1. Understanding customer needs
2. Defining quality
3. Teboul Model – Penetration
4. Customer satisfaction is a process never ending
Teboul Model – Penetration

Who is the customer

1. External customer – user of product or service, buyer and influencer
2. Internal customer – for his personal use only
Basic Requirement of Internal and External Customers
1. High level of quality – meeting all his needs
2. High degree of flexibility – product flexibility
3. High levels of service – maximum service
4. Low costs – value for money, customers pride is that he has bought for the lowest cost
5. Quick response – Less waiting period, demo, billing, packing, delivery
6. Little of no variability – minimum deviation from the target and expectation

1.5 Customer Perception of Quality

Before 1988 – Performance, Prize and service

After 1989 – Performance, service and prize ASQ – American Society for Quality
1. Performance – availability (ready for use), reliability (free from failure),
maintainability
2. Features – psychological and technical. Added feature along with main usage
3. Service – intangible, made up of many small things
4. Warranty – Vs guarantee. Customer feels comfortable with this
5. Price – value for money, ready to pay at the same time comparative study to be done
6. Reputation – Branding merges with quality. Good exp reaches 6 bad reaches 15

1.6 Customer Retention

It is the final result of customer satisfaction and customer loyalty

  Most cases what customer says or feels may vary from actual consumption or purchase
 Customer must refer more customers and increase the revenue
 External research must be done to feel the pulse of the customer
 Employee retention is proportional customer retention
Features of Feedback

 Finds dissatisfaction
 Dissatisfied customer normally tend to report and register complaint Priority for quality
 Match between organization perceptions of quality to that of customer Comparison with
competitors
 Evaluation by customers who would have known the competitors Customer needs
 The real needs of customers is known directly from the customer Scope for improvement
 Future enhancement in terms of quality
Sources of Feedback
1. Comment Card – card attached with the warranty to get the basic information. Asking reasons
for the purchase of product or service.
2. Questionnaire – Most popular. Mostly close ended and few open questions. Time consuming.
Analyze and interpret data.
3. Focus Group – Select few customer, call for a meeting and discuss and collect data from them.
Also ask them what their expectation is. Incentive for participation is assured in advance so that
the customer is comfortable and not forced to participate.

4. Toll Free Numbers – Free telephone customer can call for assistance, register complaints
5. Customer Visit – It is very effective as customer is put on top priority but at the same time
consuming, costly and customer interest.
6. Report Card – giving a grading sheet to the customer regarding the organization. Very
effective, customer is at pride that he could evaluate the product or service.
7. Internet – Online and email feedback. Though easy but not 100% reliable source and lot of
misrepresentation and lags seriousness on the part of the consumer.
8. Employee feedback – Untapped source of effective information. Customer says what is
happening employees say why it is happening. Reactive to proactive approach
9. Mass Customization – make instant changes to the requirement of the customer. Dress
materials, computer, furniture etc.

Complaints – Feedbacks are proactive complaints are reactive.

1. Organization must take complaints as a proactive device for the future.
2. All complaints must be acknowledge as early as possible
3. The complainant must get the information about the progress of the complaint
4. Dissatisfied customers complaints not adhered tend to move to the competitors
5. Small organization has the advantage of being in direct contact with the customer
 6. Frontline staffs get the direct complaint they must be trained to handle and take
decisions

Handling complaints
1. Investigate the complaint promptly both positive and negative
2. Develop procedure for complaints, recording, actions to be taken, inform the staffs
3. Categories the complaints – product, service, cost, ambience etc
4. Senior managers must have direct involvement
5. Communicate the process of handling the complaints to all staffs
6. Provide regular complaints reports – complaints received, decisions taken etc
7. Identify customer expectations before hand

1.7 Quality Cost

During the 1950‘s the concept of ―Quality Cost‖ emerged. Different people assigned
different meanings to the term. Some people equated quality cost with the cost of attaining
quality; some people equated the term with the extra incurred due to poor quality.
But, the widely accepted thing is ―Quality cost is the extra cost incurred due to poor or
bad quality of the product or service‖.
Quality costs are the costs associated with preventing, detecting, and remediating product
issues related to quality.
Quality costs do not involve simply upgrading the perceived value of a product to a
higher standard. Instead, quality is creating and delivering a product that meets the expectations
of a customer.
Thus, if a customer spends very little for an automobile, he will not expect leather seats
and air conditioning - but he will expect the vehicle to run properly.
Quality costs are generally considered to fall into four categories, which are:
Prevention costs.
The cost incurred in keeping failure and appraisal costs to a [Link] incur a
prevention cost in order to keep a quality problem from occurring. It is the least expensive type
of quality cost, and so is highly recommended.
Prevention costs can include proper employee training in assembling products and
statistical process control (for spotting processes that are beginning to generate defective goods),
as well as a robust product design and supplier certification.

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 cost incurred in determining the degree of conformance to quality
requirement. As was the case with a prevention cost, you incur an appraisal cost in order to keep
a quality problem from occurring. You do so through a variety of types of inspection. The least
expensive is having production workers inspect both incoming and outgoing parts to and from
their workstations, which catches problems faster than other types of inspection. Other appraisal
costs include the destruction of goods as part of the testing process, the depreciation of test
equipment, and supervision of the testing staff.

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

Internal failure costs. The cost associated with defects that are found prior to transfer of the
product to the customer. You incur an internal failure cost when a defective product is produced.
This appears in the form of scrapped or reworked goods.

Examples are the costs of:

 Scrap
 Rework
 Re-inspection
 Re-testing
  Material review
 Downgrading

External Failure costs. The cost associated with defects that are found after product is
shipped to the customer. You also incur an external failure cost when a defective product was
produced, but now the cost is much more extensive, because it includes the cost of product
recalls, warranty claims, field service, and potentially even the legal costs associated with
customer lawsuits. It also includes a relatively unquantifiable cost, which is the cost of losing
customers.

Examples are the costs of:

 Processing customer complaints

 Customer returns
 Warranty claims
 Product recalls

1.8 Meaning of TQM

TQM is defined as both philosophy and a set of guiding principles that represent the
foundation of continuously improving organisation. It is the application of quantitative methods
and human resources to improve all the process within the organisation and exceed customer
needs now and in the future.
Total Quality Management is an effective system for integrating the quality development,
quality maintenance and quality improvement efforts of various groups in an organization
continuously, so as to enable marketing, engineering, production and service at the most
economic levels which allow for full customer satisfaction.

1.8.1 TQM Basic Concepts

1. Management Involvement – Participate in quality program, develop quality council, direct

participation
2. Focus on customer – who is the customer – internal and external, voice of the customer, do it
right first time and every time.
3. Involvement and utilisation of entire work force – All levels of management
4. Continuous improvement – Quality never stops, placing orders, bill errors, delivery,
minimise wastage and scrap etc.
5. Treating suppliers as partners – no business exists without suppliers.
6. Performance measures – creating accountability in all levels
1.9 Barriers in TQM Implementation

1. Lack of commitment from top management – avoiding training for self

and employees,meetings
2. Lack of employee involvement – particularly at managerial level, supportive
attitude, trust [Link] of team work – Co-operation and co-ordination within
workers.
4. Lack of customer oriented approach – Know the customer need, demand, taste, shortcomings
5. Lack of attention to feedback and complaints
6. Supplier control – in terms of materials, cost, quality, delivery etc
7. Review quality procedures – up gradation, correct past errors. Learn from experience

1.10 Benefits of TQM

Customer satisfaction oriented benefits:

1. Improvement in product quality
2. Improvement in product design
3. Improvement in production flow
4. Improvement in employee morale and quality consciousness
5. Improvement in product service
6. Improvement in market place acceptance

Economic improvement oriented benefits :

1. Reduction in operating costs
2. Reduction in operating losses
3. Reduction in field service costs
4. Reduction in liability exposure

QUALITY AND BUSINESS PERFORMANCE

ATTITUDE AND INVOLVEMENT OF TOP MANAGEMENT

COMMUNICATION, CULTURE AND MANAGEMENT SYSTEMS

MANAGEMENT OF PROCESS QUALITY

QUALITY CONTROL – A BRIEF HISTORY

PRODUCT INSPECTION Vs PROCESS CONTROL

Importers new to the world of overseas manufacturing and quality control inspection are often
inundated with a variety of quality control terms that seem to have the same meaning.
For example, some importers confuse “product testing” with “product inspection”. And what’s
the difference between “inspection” and “quality control”? Don’t all of these processes involve
checking and examining a product?
Can you conduct both quality inspection and testing at the same time and location? Can your
supplier carry out both these processes for you, or do you need to manage either independently
(related: 4 Ways Importers Conduct Product Inspection [eBook])? How many units do you need
to check to get a reliable assessment of product quality?
In fact, product inspection and product testing generally refer to two different steps in a broader
quality control strategy. So let's explore the difference between these two quality management
options available to you and see how they might fit into your quality control plan.
HOW DO QUALITY INSPECTION AND TESTING DI FFER?
Product testing and product inspection address different quality concerns for importers evaluating
their product. Are there scratches on the screen of your tablet PC? Are there skipped stitches in
your woven garment? These are the kinds of questions product inspection can help answer about
your products.
Do you need to know the chemical composition of the paint your supplier is using to coat your
furniture? Or whether your children’s toy meets U.S. Consumer Product Safety
Commission standards? Product testing will likely be the relevant avenue for answering these
questions.
Product testing, often known as lab testing, typically involves testing a product against a specific
standard or regulation in a certified laboratory. Whereas product inspection often involves
checking a random sample of an order for compliance with a buyer’s requirements and
specifications.

What is product inspection?

Product inspection is the process of checking goods for compliance with your specifications and
requirements. Generally conducted at the factory manufacturing your product, the product
inspection process primarily focuses on checking the appearance, construction and basic function
of a product.

The other key purpose of product inspection is to help you identify and address any quality
defects in your products before they reach your customers. Inspectors often use an acceptance
 sampling method like AQL to inspect a random sample of the total order quantity. The inspector
can typically classify quality defects based on their severity and issue a clear “pass” or “fail”
result for the order using AQL.

Who can conduct product inspection?

When manufacturing abroad it’s easy for factory staff to misunderstand your requirements and
manufacture products that don’t meet your specifications. That’s why many importers find
that relying on their factory to conduct product inspections isn’t always a reliable way to manage
product quality.
Factories’ own internal QC staff rarely provide detailed reporting of the product inspection
process that importers need to assess an order. Instead, importers serious about managing product
quality usually turn to one of the following alternate methods:

 Hire a third-party inspection company: Independent inspection firms can often inspect a wide
range of products and issue a comprehensive report for a reasonable fee. They typically follow industry-
standard inspection processes and should have strict integrity policies to ensure reliable results.
 Hire full-time inspectors: These are local employees hired by your company and paid on a salary
basis to inspect your products. In order to hire local employees, you’ll often need the resources to legally
set up an office abroad.
 Send a company representative abroad or inspect yourself: You might feel you can inspect
products better according to your own standards and requirements. But high time and travel costs can make
this an impractical option if you need frequent inspections for large order volumes.

Most suppliers in Asia are familiar with each of the above product inspection approaches. Notify
your supplier about your inspection requirements when placing your order, including when
inspection must occur and who will conduct it. This will help your supplier to prepare for
inspection and minimize any pushback before shipment.

When should you conduct product inspection?

Final inspection, or pre-shipment inspection (PSI), occurs when your supplier has completed 80
percent or more of your order. This is the most common time to inspect and is the option QC
professionals typically recommend as the bare minimum for consumer products.

The main drawback of PSI is it often happens too late to address any of the quality defects or
issues the inspector finds in the shipment. Depending on the types of problems found and how
soon the goods need to leave the factory, there may not be enough time to replace or rework the
affected units. PSI also does little to prevent defects in an order.
Product inspection can offer different benefits at different production stages. Inspecting earlier in
production can help you identify any quality issues before they affect the majority of an
 order. Incoming quality control on raw materials or components and a during production
inspection when 15-80 percent of the goods are manufactured are two common options available
to importers.

What is product testing?

Product testing is often synonymous with lab testing in the quality control industry. This is
because product quality testing is typically performed at a certified third-party laboratory,
not at your supplier’s facility. On-site product testing can complement third-party inspection,
but it's not a substitute for testing in a professional lab.
Herein lies the key difference between product testing and product inspection processes. Product
inspection typically involves visiting your supplier’s facility, or sending an inspector on your
behalf, to check products on site. Whereas lab testing usually requires sending samples from your
supplier’s facility to a laboratory for more controlled testing.

Is lab testing necessary for your product type?

Product quality testing isn’t necessary for all importers. But it can provide you with certified
documentation attesting to your product’s safety and performance. And importers who need to
comply with a specific regulation or set of regulations governing their product type will typically
find product testing most helpful.

Consider the following when deciding whether to conduct product testing:

 Your product’s intended use and attributes: Some products inherently carry more risk than
others. Some examples are children’s products or products that will be ingested or come in contact with
food or beverages.
 Claims you’ve made in marketing your product: Have you made specific promises about your
product’s quality or performance? Samples can be rigorously tested for durability or performance in
comparison to leading competitors, also known as benchmarking.
 Regulations governing your product type in your market of sale: Mandatory safety regulations,
like REACH or CPSIA standards, govern products that can potentially cause serious harm to end users.
Compliance is a legal requirement in many markets.

Should you conduct product testing before or after production begins?

Importers commonly test two different types of samples at two different stages:

1. Pre-production samples provided by the supplier before mass production begins

2. Production units after mass production is underway
 As with product inspection, testing products earlier in production, or even before production
starts, can help you prevent issues from affecting the majority of your order.
Always request a product sample before mass production begins when working with a new
supplier or manufacturing a new product, regardless of whether you plan to test it in a lab.

Obtaining a product sample helps you ensure your supplier understands your requirements and
can meet your quality standards. Some importers even request a product sample when negotiating
with suppliers to assess and compare potential suppliers’ production capabilities.
If you plan to test units from mass production, quality control inspectors can often pull a few
production units during inspection and then either:

 Perform some basic on-site testing at that factory; or

 Seal and send the samples to a lab for testing there

Having your inspectors pull samples at the factory ensures the samples are truly random and
representative of the entire order. Relying on factory staff to pull samples carries the risk that
workers will “cherry pick” samples known to be compliant, in better condition or otherwise not
representative of the order.
Sending a product sample to a laboratory for testing can help you verify materials and components
used in the sample and assess safety and performance. You may need to test each SKU, especially
if they are manufactured with different materials. But testing just a few units of each SKU is
usually adequate, as materials and production processes are typically consistent across an order.

Can your supplier reliably perform lab testing at their own facility?
It’s true that some factories have sophisticated facilities to accommodate certain kinds of on-site
lab testing. But while valuable, it’s important not to overestimate the accuracy of these test results
from such a lab.
Factory labs usually are not certified by official accrediting bodies, such as the ANSI-ASQ
National Accreditation Board (ANAB) or the International Accreditation Service, and certainly
cannot be considered independent third parties. In several markets, like the EU and United States,
national governments require these accreditations for brands to import and sell products there.
Another important consideration is the competence and experience of the workers carrying out
testing. Factory employees generally won’t be as qualified and reliable as the skilled technicians
employed by more professional, accredited testing labs.
Fraudulent product testing results from a factory
Just as factory self-inspection presents a conflict of interests, so too does relying on your
manufacturer to test their own products. Factories might even forge favorable testing results or
desired certifications.

For example, one furniture importer we’ve worked with told us their factory openly suggested
applying fake labeling to “certify” their office chair cushions were flame retardant.
Testing laboratory TUV Rheinland has actually published a “blacklist” of such fraudulent
suppliers who have used their certification mark without authorization, falsified a test report or
created a fake report or certificate.

The dangers of relying on previous test reports

Your supplier might provide you with previous test reports or certificates as evidence of their
capabilities and compliance. It’s a great idea to ask for these reports and assess them when
choosing a supplier. But you should never rely on these previous reports for the actual compliance
of your products.
Aside from fraudulent concerns, there’s no guarantee that a supplier’s manufacturing processes or
materials haven’t changed since issuing a previous report. Testing your product samples in an
independent lab will help ensure the actual products you’re responsible for are compliant and safe
for use.
WHAT IS THE DIFFEREN CE BETWEEN INSPECTIO N AND
QUALITY CONTROL?
Now that we’ve established the difference between product inspection and product testing, how do
these two processes fit into a quality control plan? Is inspection or product quality testing alone
enough to manage product quality?
Quality control refers broadly to the process of managing product quality to meet a desired
standard. Inspection is only a part of this process used to identify quality defects in products.
Inspection can help you find any defects earlier in production before they affect the majority of a
shipment. But as quality is generally built into a product, it’s not something that can be added
after the fact.
For example, if your factory has used substandard leather to manufacture garments, no amount of
inspection will remedy that quality problem in those garments already manufactured. Instead,
inspection earlier in production helps alert you to the problem early so you can take steps to
prevent it from affecting the remaining order quantity.
 Quality control should be an ongoing process and a sum of regular actions, not a single one-off or
routine task like inspection can often be.
Aside from quality inspection and testing, key elements of a robust quality control strategy
include:

 Supplier qualification, often involving auditing suppliers for ISO9001 or other relevant
compliance frameworks and evaluating product samples
 Developing a quality manual that reflects customer and retailer standards
 Analyzing customer feedback, complaint and return data for ongoing quality improvement
 Taking corrective and preventative action to improve quality, for instance, through root cause
analysis and process improvement
 Managing any product recalls and liability risks

Quality inspection and testing are both essential for an overall effective quality control strategy.
But preventing quality issues in your products should start at the very beginning of sourcing and
negotiating with suppliers, well before inspection.
Now you have a clearer picture of the difference between product inspection and product testing
and between inspection and quality control. If you still have some uncertainties, don’t worry. The
reference table below outlines some of the major differences to help you keep
track.

Implementing quality inspection and testing will certainly come at an upfront cost to your
importing business. But most importers find the preventative cost of these pales in comparison to
the potential cost of a lawsuit or product recall resulting from quality issues they might otherwise
overlook.

STATISTICAL QUALITY CONTROL

Statistical quality control (SQC) is a part of quality control that uses statistical methods to
analyze data from quality control charts with the aim of detecting variation or defects that may
exist in items being produced by a process.

In statistical quality control, statistical techniques are used to prevent defects and improve the
process of manufacturing a certain item. The first step in preventing defects is through a process
known as inspection. Inspection involves visually looking over the product for any imperfections
or issues that may arise. Inspectors then determine if there will be any additional action taken on
the product. In order to ensure that no defective products make it to market, several of these
inspections must take place throughout the entire production process.

Statistical Quality Control?

A Statistical Quality control system performs inspection, testing and analysis to conclude
whether the quality of each product is as per laid quality standard or not. It’s called ‘‘Statistical
Quality Control’’ when statistical techniques are employed to control quality or to solve quality
control problem. SQC makes inspection more reliable and at the same time less costly. It controls
the quality levels of the outgoing products.

What is the Statistical Process Control?

Statistical process control is a technique of quality control which uses statistical approaches to
monitor and regulate a process. This helps to guarantee that the process runs effectively,
generating more criterion items with less wastage.

A procedure that evaluates output compared to a benchmark and taking appropriate action when
differences arise. SPC utilizes a variety of techniques, including run charts, control charts, an
emphasis towards continuous improvement, & experiment design.

Introduction to Statistical Quality Control

There are two major types of quality control: statistical and non-statistical. Statistical quality
control is the process of taking measurements in order to evaluate a manufacturing process. Non-
statistical quality control measures the end product itself to ensure it meets certain requirements.

Statistical Quality control is the process of identifying errors in a product or service and taking
steps to correct them. Quality control personnel are responsible for ensuring that everything
produced by an enterprise meets acceptable standards. Businesses use statistical methods to
analyze data, predict outcomes and improve performance.
SQC should be viewed as a kit of tools which may influence related to the function of
specification, production or inspection.

Statistical Quality Control Terminology

Statistics

Statistics entails a substantial quantity of data. Or simply, the joint study of collection, analysis,
interpretation and presentation of large quantities of data.

Statistical tools

Applications of statistical techniques in order to display, understand and predict consequences

over gathered data.

Quality

“a feature of technical feasibility at lowest possible cost” , or “degree of excellence that fits the
requirements of the clients”. Quality is described as “the sum total of qualities and behaviors of
goods and services that meet hidden and visible consumer expectations.”

Control

An method of measuring and inspecting a particular phenomena for a product or a

service, control recommends when to examine, and how much to inspect. The system provides
feedback to understand the reasons for low quality and required remedial actions. The control
system essentially determines the quality features of an item, compares the same with established
quality criteria and differentiates between defective goods and non-defectives ones.
Quality control

Quality control is a critical technique for ensuring that goods or services meet a predetermined
standard of quality. Quality control is becoming a significant instrument and essential element in
every successful enterprise to guarantee standard quality. Peters and Waterman identified quality
as an essential component of success in 1982.

Thus, quality control is the use of suitable methods and actions to achieve, maintain, and improve
the quality of goods and services, as well as to meet customer requirements for pricing, safety,
availability, dependability, and usability, among others.

The approach uses statistical methods based on probability theory to set standards of quality and
maintain them in the most affordable way.

Objectives of Quality Control

(1) To decide about the standard of Quality of a product that is easily acceptable to the customer.

(2) To check the variation during manufacturing.

(3) To prevent the poor quality products reaching to customer.

Advantages of Statistical Quality Control:

(1) Improvement of quality.

(2) Reduction of scrap and rework.

(3) Efficient use of men and machines.

(4) Economy in use of materials.

(5) Removing production bottle-necks.

(6) Decreased inspection costs.

(7) Reduction in cost/unit.

(8) Scientific evaluation of tolerance.

(9) Scientific evaluation of quality and production.

(10) Quality consciousness at all levels.

(11) Reduction in customer complaints.

Statistical Quality Control Techniques and Tools

The principle tools and techniques of statistical quality control are as follows :

(1) Frequency distribution.

(2) Control charts for measurement and attribute data.

(3) Acceptance sampling techniques.

(4) Regression and correlation analysis.

(5) Tests of significance.

(6) Design of experiments.

We are living in the world of statistics. Statistics are everywhere, even in sports, politics and
entertainment. Statistics is not only used to measure the success or failure of an event but also for
making critical decisions that can change the outcome of any project.

Statistics is a branch of mathematics dealing with data collection, analysis, interpretation,

presentation and organization. Statistical quality control (SQC) is a set of activities implemented
in production processes to ensure that products conform to established standards.

The quality of a product is important to the company that produces it. Quality control is the
measurement and comparison of characteristics (or parameters) of a product against pre-
established standards to ensure that the product meets requirements for use.

Statistical quality control involves analysis of data, both qualitative and quantitative, about
processes, products, suppliers or services to assess their degree of conformance to specifications
or standards. It also refers to the techniques used in the application of this analysis.

Statistical Quality Control using Minitab

Crayola is a well-known crayon manufacturer with a worldwide reputation, and they are often
regarded as the world’s top manufacturer of crayons and other art materials for children. The only
way Crayola has been able to achieve and retain this kind of notoriety is by ensuring that all of
their goods are of superior quality. They must maintain high quality standards for almost all of
their goods in order to retain their worldwide reputation as a leading company.
Now, something as basic as crayons is not the first thing that comes to mind when thinking of
high quality, but being the greatest at everything in the world takes meticulous attention to detail
as well as many rigorous procedures to ensure that the quality is maintained.

Crayola manufactures over 3 billion crayons each year, which equates to nearly 12 million
crayons produced per day on an annual basis. This is a disproportionately large number of crayons
especially goods that must adhere to very high quality requirements. Then, what is their method of
doing this?

Crayola’s Data-Driven Strategy for Keeping Their Product Quality High

One of the most important factors in ensuring that an organization as productive as Crayola may
keep running and produce goods that are always improving upon their high quality is to maintain
an information-driven strategy that would be concentrated on constant improvements.

For example, Crayola use Minitab Statistical Software to assist them in their data analysis so that
they may enhance their manufacturing line and procedures. Minitab assists the business in
maintaining a comprehensive statistical analysis of their data and in visualizing the data’s
progression.

Crayola adopted Lean Principles for their projects in 2008 and was able to save more than $1.5
million. Since then, the company has not looked back. Minitab has been used for a number of
years to analyze and improve their statistical quality control, and they have had tremendous
success with it.

CONTROL CHARTS AND ACCEPTANCE SAMPLING

Quality control charts depict measures of quality for processes or for products. They show the
deviation, if any, from the set, ideal standards or specifications for a product or a process.

The Importance of Quality Control

Quality control is an extremely important activity for any business that is engaged in
manufacturing products. If a company’s products are produced with uneven quality, it can
negatively impact the company’s sales.

For example, consider a company that makes and sells bottled beverages. Now think about what
might happen if a production machine that affixes the caps to the bottles gets a little bit out of
whack, so that it begins affixing approximately one-third of the bottle caps in such a way that it
becomes nearly impossible, or at least extremely difficult, for consumers to remove the cap from
the bottle. It doesn’t take too many instances of an occurrence such as that before the company
begins to lose a lot of customers.

Therefore, companies set rigorous specification standards for both manufacturing processes and
for the finished products that they produce. They then set in place quality control procedures. One
of the procedures is commonly to take random samples and create quality control charts that
reveal how much deviation exists from the specification standards for a product.
If significant deviations from specifications are revealed, the company can take whatever action is
needed to correct any problems – such as recalibrating a machine that affixes caps to bottles – and
restore the desired level of uniform quality.

Understanding Quality Control Charts

Quality control charts can be created and used to examine either a single variable or multiple
variables related to the desired quality of a product or process. For example, a toy manufacturing
company may wish to use quality control charts to monitor (1) the smoothness of the edges of the
toy and (2) the fit of the toy’s packaging.

A quality control examination will use random samples of the population to be

examined, comparing actual specifications found in the collected samples to the stated, ideal
specifications. Typically, a quality control chart will show a center line that represents the ideal
specification for whatever quality variable is being studied. The chart will also usually include
upper and lower quality control lines that represent acceptable, relatively insignificant levels of
deviation from the desired specification. Plotted on the chart will be the results of random samples
drawn for the quality control study.

As long as the samples show deviations that are only within the range bordered by the upper and
lower quality control lines, then that indicates good quality control, that products are being
produced with the desired level of uniform quality. It is referred to as being “in control.”

However, if the results show many samples with plot points above or below the upper or lower
quality control lines, respectively, it indicates significant variation in product or process quality
that needs to be addressed. Wide variations from specifications indicate being “out of control.”

Source

Uses of Quality Control Charts

While the use of quality control charts is most frequently associated with manufacturing processes
and manufactured products, they can be applied to many other things as well. Following are some
other potential applications for the use of quality control charts.
1. Employee Retention Rates

Finding, hiring, and training new employees is an expensive and time-consuming process for a
company. Therefore, it is to a company’s advantage to retain good employees as long as possible.
A quality control chart can be constructed that compares a company’s actual employee turnover
rate to its desired rate. If the chart reveals an excessively high turnover rate, then the company can
do further investigation to find the cause(s) of the high turnover rate, and then make changes
designed to reduce the rate.

2. Returns on Investments

Quality control can also be applied to examine returns on your investments, checking the extent to
which individual investments in your portfolio either outperform or underperform compared to
your expected investment returns.

Wide variations in investment results, either up or down, may indicate that your
current investment portfolio carries a higher degree of risk than the risk level that you are
comfortable with. Outperforming and underperforming investments can also be examined for
common characteristics that may help you identify future investments that offer a higher
probability of obtaining maximum profits.

3. E-commerce websites

Quality control charts can be used to monitor the processes and functionality of an e-commerce
website. For example, anyone engaged in such a business would do well to monitor the number of
instances where there is some type of glitch in the website’s operation that causes a customer to
abandon the process of making a purchase. By monitoring the quality of the website’s operational
performance, any problems or issues that arise can be quickly addressed before they lead to a
substantial decline in revenues.

Acceptance Sampling:
Sampling is the tool or technique of statistical quality control. Webster defined a sample as a
product to represent the quality of the whole lot. Frequently, we in our daily life come in contact
with sampling.

For example, if we purchase a bag of potatoes, only a few potatoes can be observed from the
whole bag however we draw an inference about the whole bag by only inspecting a few. If these
look alright, it is assumed that all the potatoes in that bag will be alright.
The basic concept of sampling lies in testing the samples for acceptance or rejection. Some
products such as electric bulbs, radio valves, razor blades, bolts etc. require to be subjected to
destructive tests so as to ascertain their life.

A cent percent inspection and destructive testing of such type of products cannot be possible and
also sometimes the cost of cent percent inspection is extremely high. So for such problems
acceptance sampling can be widely used.

In this method samples are collected at regular interval and subjected for inspection.

For the purpose of acceptance, inspection is carried out at many stages in the process of
manufacturing. These stages may be: inspection of incoming materials and parts, process in-
spection at various points in the manufacturing operations, final inspection by a manufacturer of
his own product and finally inspection of the finished product by the purchaser.

Inspection for acceptance is generally carried out on a sampling basis. The use of sampling
inspection to decide whether or not to accept the lot is known as Acceptance Sampling.

A sample from the inspection lot is inspected, and if the number of defective items is more than
the stated number (the number is decided using statistics after a decision is taken about confidence
level depending upon the place of application of the product and its criticality) known as
Acceptance Number, the whole lot is rejected.

The purpose of Acceptance Sampling is, therefore, to decide whether to accept or reject the lot. It
does not control the quality during the process of manufacturing.

Role of Acceptance Sampling:

Acceptance Sampling is very widely used in practice due to the following merits:

1. Acceptance Sampling is much less expensive than 100 percent inspection.

2. It is general experience that 100 percent inspection removes only 82 to 95 percent of defective
material. Very good 100 percent inspection may remove at the most 99 percent of the defectives,
but still cannot reach the level of 100 percent. Due to the effect of inspection fatigue involved in
100 percent inspection, a good sampling plan may actually give better results than that achieved
by 100 percent inspection.

3. Because of its economy, it is possible to carry out sample inspection at various stages.
Acceptance number is evaluated using sampling plan and confidence level.

4. The 100 percent inspection is not possible, where quality can be tested only by destroying the
items. In such case, sampling inspection is the only solution.

Quality Indices for Acceptance Sampling:

Quality indices for acceptance sampling plan are:

1. Acceptance Quality Level (AQL):

It is a fraction defective that can be tolerated without serious effect on further processing
operation or customer reaction. In other words, AQL is the maximum percent defective that, for
the purpose of sampling inspection, can be considered satisfactory as a process average. AQL can
also be termed as maximum number or percentage of defective pieces in a ‘good lot’.

2. Rejectable Quality Level (RQL):

This is also known as ‘lot tolerance percent defective (LTPD)’. It represents the percentage
defectives in a lot that can be tolerated in only as specified proportion of lots. By adopting a
sampling plan that will reject most of the lots offered that would cause too much unfavourable
reaction of the customer.

This, RQL helps in real protection against unsatisfactory material, reaching the customer. RQL or
LTPD can also be expressed by the minimum number or percentage of defective pieces in a “bad
lot”. This can also be termed as ‘Limiting Quality Level’ (LQL).

3. Average Outgoing Quality Limit (AOQL):

This is the limit of quality, worst than which a consumer will not get in any lot.