CHAPTER SEVEN

Quality Management
7.1. Meaning and nature of quality
The definition of quality depends on the point of view of the people defining it. Today, there is no single
universal definition of quality. Some people view quality as “performance to standards. “Others view
it as “meeting the customer’s needs” or “satisfying the customer. Quality management is the act of
overseeing all activities and tasks needed to maintain a desired level of excellence.” Let’s look at
some of the more common definitions of quality.
1. Conformance to specifications: - measures how well the product or service meets the targets
and patience determined by its designers.
2. Fitness for use: - focuses on how well the product performs its intended function or use.
3. Value for price paid: - is a definition of quality that consumers often use for product or service
usefulness.
o This is the only definition that combines economics with consumer criteria; it assumes that
the definition of quality is price sensitive.
4. Support services provided are often how the quality of a product or service is judged.
5. Psychological criteria: is a subjective definition that focuses on the judgmental evaluation of
what constitutes product or service quality.
o Different factors contribute to the evaluation, such as the atmosphere of the environment or
the perceived prestige of the product.
7.2. Cost of quality
The reason quality has gained such prominence is that organizations have gained an
understanding of the high cost of poor quality.
Quality affects all aspects of the organization and has dramatic cost implications.
The most obvious consequence occurs when poor quality creates dissatisfied customers and
eventually leads to loss of business. However, quality has many other costs, which can be
divided into two categories.
A. The first category consists of costs necessary for achieving high quality, which are called
quality control costs. These are of two types: prevention costs and appraisal costs.
B. The second category consists of the cost consequences of poor quality, which are called quality
failure costs. These include external failure costs and internal failure costs.
1. Prevention costs are all costs incurred in the process of preventing poor quality from occurring.

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 They include quality planning costs, such as the costs of developing & implementing a
quality plan.
Also included are the costs of product and process design, from collecting customer
information to designing processes that achieve conformance to specifications.
Employee training in quality measurement is included as part of this cost, as well as the
costs of maintaining records of information and data related to quality.
2. Appraisal costs are incurred in the process of uncovering defects.
the cost of quality inspections, product testing, and performing audits to make sure that
quality standards are being met.
The costs of worker time spent measuring quality and the cost of equipment used for
quality appraisal.
3. Internal failure costs are associated with discovering poor product quality before the product
reaches the customer site.
One type of internal failure cost is rework, which is the cost of correcting the defective
item.
Sometimes the item is so defective that it cannot be corrected and must be thrown away.
This is called scrap, and its costs include all the material, labor, and machine cost spent in
producing the defective product.
Other types of internal failure costs include the cost of machine downtime due to failures in
the process and the costs of discounting defective items for salvage value.
4. External failure costs are associated with quality problems that occur at the customer site.
These costs can be particularly damaging because customer faith & loyalty can be difficult
to regain.
They include everything from customer complaints, product returns, and repairs, to
warranty claims, recalls, and even litigation costs resulting from product liability issues.
A final component of this cost is lost sales and lost customers.
External failure can sometimes put a company out of business almost overnight.
NB. Companies that consider quality important invest heavily in prevention and appraisal costs in order
to prevent internal and external failure costs.
The earlier defects are found, the less costly they are to correct.
For example, detecting and correcting defects during product design and product production is
considerably less expensive than when the defects are found at the customer site.

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 To sum up, the cost of quality summarized as follows
Prevention costs Costs of preparing and implementing a quality plan.
Appraisal costs Costs of testing, evaluating, and inspecting quality.
Internal failure costs Costs of scrap, rework (amend, modify), and material losses.
External failure costs Costs of failure at customer site, including returns and repairs.

7.3. Dimensions of Quality

7.3.1. Dimensions of quality for manufacturing (product)
1. Performance: is a measure of basic operating characteristics of a product (a product’s primary
operating characteristics.) Performance quality measures to what extent a product or service meets
the expectations of the customer.
2. Features: “extra” items added to basic features. It might not be the primary product
characteristics.
3. Reliability: probability that a product will operate properly within an expected time frame.
Reliability is defined as the probability that a system will perform its required function without
failure over time.
4. Conformance: the products conformance to the design specification. The degree to which a product
and its individual component meets pre–established standards. Conformance requirements are the
expression that conveys the criteria to be fulfilled in an implementation of a specification [ISO
Guide 2]. The conformance requirements are stated in a conformance clause or statements within
the specification
5. Durability: relates to the expected operational life of the product. How long product lasts before
replacement.
6. Serviceability: Ease of getting repairs, speed of repairs, courtesy and competence of repair
person.
7. Aesthetics: how a product looks, feels, sounds, smells, or tastes. It is highly subjective and
judgmental.
8. Perceived quality: subjective perceptions based on brand name, advertising, and the like. Customer
rely on the past performance and reputation of the firm making the product.

7.3.2. Dimensions of quality for service

1. Tangibility: Is the physical evidence of services. Restaurant waiter’s staff wears and cleanness of
the uniform are some of the tangible that you observe when you go to eat.

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2. Reliability/ Consistency: relates to the consistency of the performance. The same level of service
provided to each customers.
3. Competence: relates to workers having the required skill and knowledge to properly perform
the services.
4. Courtesy: this refers to the politeness, respect and consideration, and friendliness of contact
person.
a. How are customers treated by employees?
b. Are catalogue phone operators nice and are their voices pleasant?
5. Credibility: refers to the characteristics of truth worthiness, believability, and honest of the
service worker. It is the degree of trust you place on the service worker.
6. Accessibility and convenience
a. How easy is it to obtain service?
b. Does a service representative answer you calls quickly? How difficult to find repair
service for your computer.
7. Security: it refers to freedom from any danger or risks.
8. Understanding customers: refers to how well the service workers make the effort to understand
the specific needs of each customer.
9. Responsiveness: refers to the willingness and readiness of employee to provide services.
a. How well does the company react to unusual situations?
b. How well is a telephone operator able to respond to a customer’s questions?
ASSESSING SERVICE QUALITY
SERVQUAL: - A widely used tool for assessing service quality. It is an instrument designed to obtain
feedback on an organization’s ability to provide quality service to customers. According to the
SERVQUAL model, a service provider must be able to provide five critical elements of service:
reliability, responsiveness, tangibility, assurance, and empathy. These five elements can be abbreviated
as RATER. It focuses on five service dimensions that influence customers’ perceptions of service
quality: SERVQUAL is a measure of service quality based on the five service dimensions. This
includes
R = Reliability
A= Assurance
T = Tangibles
E = Empathy
R = Responsiveness

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 Tangibles refers to physical facilities, equipment and appearance of personnel
Reliability is the firm’s ability to perform the promise service accurately and dependably
Responsiveness is the firm’s willingness to help customer and provide prompt service
Assurance is knowledge and courtesy of employees and their ability to inspire trust and
confidence
Empathy is caring and individualized attention paid to customers

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 7.4. Quality Gurus (leader, experts, specialist)
People, who have established themselves and profiled philosophical trends in quality, are the gurus of
quality [1]. The gurus extensively made substantial contribution to quality management by their theories
in improving quality. TQM techniques and tools could be innovated by these theories [2].To fully
understand the TQM movement, we need to look at the philosophies of notable (famous, outstanding)
individuals who have shaped the evolution of TQM. [3].
Their individual contributions are summarized as follows
Walter A. Shewhart Contributed to understanding of process variability.
Developed concept of statistical control charts.
W. Edwards Deming Stressed management’s responsibility for quality
Developed “14 Points” to guide companies in quality improvement
Joseph M. Juran Defined quality as “fitness for use.”
Developed concept of cost of quality.
Armand V. Feigenbaum Introduced concept of total quality control.
Philip B. Crosby Coined phrase “quality is free.”
Introduced concept of zero defects.
Kaoru Ishikawa Developed cause-and-effect diagrams.
Identified concept of “internal customer.”
Genichi Taguchi Focused on product design quality.
Developed Taguchi loss function.

7.5. Concepts of Total Quality Management

Total: - Quality involves everyone and all activities in the company/ made up of the whole.

Quality: - Conformance to Requirements / degree of excellence product/service provides

Management: - Quality can and must be managed/ act, art manner, planning, controlling and directing.

TQM: - An integrated effort designed to improve quality performance at every level of the organization.

TQM: - A process for managing quality; it must be a continuous way of life; a philosophy of perpetual
improvement in everything we do or QM is the art of managing the whole to achieve excellence

TQM is viewed from many angles – as a philosophy, as an approach and journey towards
excellence.

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 The main thrust is to achieve customer satisfaction by involving everybody in the organization
across all functions with continuous improvement driving all activities.
It is systems are designed to prevent poor quality from occurring.
It is a mgmt. philosophy that seeks to integrate all organizational function (purchasing,
marketing, production, etc.) to focus on meeting customers’ needs & organizational objectives.

Timeline showing the differences between old and new concepts of quality
Early
Time 1900s 1940s 1960s 1980 and Beyond
Focus Inspection Statistical sampling Organizational quality focus Customer driven quality

Old Concept of quality: New concept of quality

Inspect for quality after production Build quality in to process
Identify and correct causes of quality
problem

The Seven basic elements that capture the essence of the TQM philosophy:-
 TQM is the focus on identifying root causes of quality problems and correcting them at the
source, as opposed to inspecting the product after it has been made.
 Not only does TQM encompass the entire organization, but it stresses that quality is customer
driven.
 TQM attempts to embed quality in every aspect of the organization.
 It is concerned with technical aspects of quality as well as the involvement of people in quality,
such as customers, company employees, and suppliers.
A. Customer Focus
 The first, and overriding, feature of TQM is the company’s focus on its customers.
 Quality is defined as meeting or exceeding customer expectations.
 The goal is to first identify and then meet customer needs.
 Therefore, we can say that quality is customer driven.
B. Continuous Improvement
 Another concept of the TQM philosophy is the focus on continuous improvement.

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 Kaizen: A Japanese term that describes the notion of a company continually striving to be
better through learning and problem solving.
Some successful implementations use the approach known as Kaizen (the translation of kai
(“change”) zen (“good).
Kaizen : is based on the philosophy that what we do today should be better than yesterday,
what we do tomorrow should be better than today, never resting process.
Kaizen focus on small, gradual and frequent improvement over the long term benefit with
minimum financial investment and with participation by everyone.
C. Employee Empowerment
 Part of the TQM philosophy is to empower all employees to seek out quality problems
and correct them.
 Workers are empowered to make decisions relative to quality in the production process.
 They are considered a vital element of the effort to achieve high quality. Their
contributions are highly valued, and their suggestions are implemented.
D. Use of Quality Tools
 They need to understand how to assess quality by using a variety of quality control tools,
how to interpret findings, and how to correct problems.
 In this section we look at seven different quality tools, often called the seven tools of
quality control.
What is quality control? Quality control (QC) is a procedure or set of procedures intended to ensure that
a manufactured product or performed service adheres to a defined set of quality criteria or meets the
requirements of the client or customer. (seven quality control tools are )
1. Cause-and-effect diagrams- A chart that identifies potential causes of particular quality
problems.
2. Flowchart - A schematic of the sequence of steps involved in an operation or process.
3. Checklist -A list of common defects and the number of observed occurrences of these defects.
4. Control charts - Charts used to evaluate whether a process is operating within set expectations.
5. Scatter diagrams- Graphs that show how two variables are related to each other.
6. Pareto analysis - A technique used to identify quality problems based on their degree of
importance.
7. Histogram- A chart (diagram, table, and map) that shows the frequency distribution of observed
values of a variable.

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 E. Product Design
 Function Deployment a critical aspect of building quality into a product is to ensure that
the product design meets customer expectations.
 Customers often speak in everyday language. For example, a product can be described as
“attractive,” “strong,” or “safe.
F. Process Management
 Quality at the source: The belief that it is best to uncover the source of quality problems
& eliminate it. According to TQM, a quality product comes from a quality process. This
means that quality should be built into the process.
 Quality at the source is the belief that it is far better to uncover the source of quality
problems and correct it than to discard defective items after production.
G. Managing Supplier Quality
 TQM extends the concept of quality to a company’s suppliers.
 The philosophy of TQM extends the concept of quality to suppliers and ensures that they
engage in the same quality practices.
Generally, the Concepts of the TQM Philosophies are summarized as follows.
Concept Main idea
Customer focus The goal is to identify customer needs
Continuous improvement A philosophy of never – ending improvement
Employee empowerment Employees are expected to seek out, identify & correct quality problems
Use of quality tools Ongoing employee training and the use of quality tools
Product design Products need to be designed
Process management Quality should be built in to the process; source of quality problems
should be identified and corrected.
Managing supplier quality Quality concepts must be extend to a company’s supplier

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