Module: 2
QUALITY
MANAGEMENT
Learning Outcomes
Upon completion of this topic, you should be able to:
1. Discuss and define the dimensions of quality.
2. Articulate the benefits and costs of good quality, and the costs
of poor quality.
3. Explain how quality management systems have evolved.
4. Utilize quality tools and the DMAIC methodology in problem
solving.
5. Explain the philosophy and magnitude of Six Sigma quality.
6. Recognize quality awards and ISO certifications.
Module 2 QUALITY MANAGEMENT
OVERVIEW
What is Quality? Dimensions of Quality Gurus
Product and Service
Problem
Quality Quality Cost of Quality
Management
Systems (TQM, ISO, Tools for Quality Approaches to
Six Sigma) Improvement Defining Quality
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QUALITY
In today’s business environment, quality can be broadly
defined as the extent to which a product or service meets
or exceeds a customer’s expectations.
For any product, the quality of that product is determined
by two primary factors. These are DESIGN quality and
PROCESS quality.
Module 2 Quality Management
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Page 04
TWO PRIMARY
FACTORS
DESIGN PROCESS
QUALITY QUALITY
Process quality refers to the
Design quality can be ability of the organization to
described as the quality that a produce the good or service
product has in terms of the having perfect quality at each
actual characteristics of the stage of the process, or in other
product. words, manufacturing defect-
free products.
05
DESIGN QUALITY
Page
Module 2 Quality Management
DIMENSIONS OF DESIGN QUALITY
A Suzuki Jimny and a Ford raptor are equally “fit
for use,” but with different design dimensions for different customer markets that result in
significantly different purchase prices.
Module 2 Quality Management
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PROCESS QUALITY
QUALITY GURUS
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Walter Shewmart Edward Deming Joseph Juran Philip Crosby Armand Fiegenbaum
Much of the field of Quality originated from several individuals who spent their
careers researching, teaching and developing the field of Quality.
Page 08 Module 2 Quality Management
WALTER SHEWMART
(1891-1967
Dr. Shewhart was an American physicist, engineer and
statistician. He is known as the father of statistical quality
control and spent much of his career researching variation and
is credited with the creation of the first control chart. His work
focused around the need to reduce variation in order to
improve quality.
Module 2 Quality Management Page 09
EDWARD DEMING
(1900-1993)
Dr. Deming is likely the most well known of the Quality Gurus.
He was an American engineer, statistician, professor and
author. Dr. Deming has an extensive list of published works but
is likely most well known for Deming’s 14 points and the
Deming Cycle.
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DEMING CYCLE
The Deming Cycle or
Deming Wheel is also known
as PDCA, or “Plan, Do, Check,
Act.” It is a version of
continuous improvement
that emphasizes the
continuous nature of process
improvement.
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JOSEPH JURAN
(1904-2008)
Juran was a Romanian-born American engineer. He is best known
for the Quality Control Handbook, which was first published in 1951.
He emphasized the importance of three specific factors which
came to be known as the quality trilogy: quality planning, quality
control and quality improvement. He is responsible for creating the
concept known today the cost of quality.
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Joseph Juran also came upon the work of Vilfredo Pareto (1848-
1923) and made the Pareto Principle, also known as the 80/20 rule,
well known today as a tool for problem solving and continuous
improvement.
Other examples of the 80/20 rule
• 80% of a company’s profits are generated by 20% of the products
or services sold.
• 80% of the continuous improvement ideas are generated by 20%
of the employees.
Module 2 Quality Management
Module 2 Quality Management Page 13
PHILIP CROSBY
(1926-2001)
Crosby was an American businessman and author. He published
Quality is Free in 1979. He believed that the costs of quality are
often understated. He coined the phrase zero defects and felt that
there was no reason for any errors. He taught that it is less
expensive to do it right the first time rather than to pay for extra
inspection, scrap, rework and repairs.
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ARMAND FIEGENBAUM
(1920-2014)
Dr. Feigenbaum was an American quality engineer and
businessman. He was the Director of Manufacturing Operations at
General Electric from 1958-1968. He devised the concept of total
quality control, which later became total quality management
(TQM).
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COST OF QUALITY
The various costs of quality can be broken down into the following four categories: prevention costs,
appraisal costs, and failure costs, which are further classified as internal failure costs and external failure
costs.
Prevention Appraisal Cost Internal External
Cost Failure Cost Failure
Prevention costs include all All money spent in checking Once a defect has been Once a defective product has
the funds spent to prevent and testing of product during produced, with any luck the been shipped to the
the occurrence of defects. the production process would organization will detect the customer, the costs then
Examples include quality be considered Appraisal costs. error before it leaves the become external failure costs.
improvement initiatives, Wages of inspectors when building and is sent to the Replacement product,
employee training, defined as part of the process, customer. Often, defective expedited shipping, potential
upgrading of equipment, testing labs and equipment, products can be repaired, but law suits, product recalls, and
implementing quality gauging, and process control, all of the extra time spent on of course loss of future
procedures and making would be included in this the rework is considered business are all external
proactive design changes. category. internal failure costs. failure costs.
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QUALITY SYSTEMS
Three common quality systems that many organizations use in
order to manage their quality are:
• Total Quality Management (TQM)
• International Organization for Standardization (ISO)
• Six Sigma
1. Costumer Satisfaction
TOTAL QUALITY Companies that are committed to TQM understand that
the purpose of a business is to generate a profit by
MANAGEMENT satisfying customer needs. They encourage customers to
tell them how to make the right products, both goods
and services, that work the right way.
To compete today, companies must deliver 2. Employee Involvement
quality goods and services that satisfy In many companies, employees who perform similar jobs
customers’ needs. This is the objective of work as teams, sometimes called quality circles, to identify
quality, efficiency, and other work-related problems, to
quality management. Total quality
propose solutions, and to work with management in
management (TQM), or quality assurance,
implementing their recommendations.
includes all the steps that a company takes to
ensure that its goods or services meet or
3. Continuous Improvement
exceed the customers defined specifications
An integral part of TQM is continuous improvement: the
and are of sufficiently high quality to meet
commitment to making constant improvements in the
customers’ needs. Generally speaking, a design, production, and delivery of goods and services.
company adheres to TQM principles by Improvements can almost always be made to increase
focusing on three tasks: efficiency, reduce costs, and improve customer service
and satisfaction. Everyone in the organization is
constantly on the lookout for ways to do things better.
ISO
The International Organization for Standardization (ISO) is an international standard-
setting body composed of representatives from various standards organizations.
Founded on 23 February 1947, the organization promotes worldwide proprietary, industrial
and commercial standards. It is headquartered in Geneva, Switzerland, and works in 164
countries.
ISO is an independent, non- governmental organization and is the largest developer of
voluntary international standards. Use of these standards assists organization to create
products and services that are safe, reliable and of good quality. The standards help
businesses increase productivity while minimizing errors and waste.
Module 2 Quality Management
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SIX SIGMA Page 19
Six Sigma is a set of techniques and tools for process improvement. It was
introduced by engineer Bill Smith while working at Motorola in 1980. It is a
comprehensive quality system for achieving business success by minimizing
variation in business processes.
Unique to Six Sigma is the DMAIC Improvement Model. In Six Sigma, improvements are
made by the use of project teams. A team may be assembled in order to fix a quality
issue, to streamline an old process or to develop a new process. The team will use the
DMAIC model, which is an acronym that stands for Define, Measure, Analyze Improve
and Control.
Module 2 Quality Management
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D
Define the problem, improvement activity,
opportunity for improvement, the project goals, and
customer (internal and external) requirements.
M Measure process performance.
A Analyze the process to determine root causes of
variation and poor performance (defects).
I Improve process performance by addressing and
eliminating the root causes.
C Control the improved process and future process
performance.
Module 2 QUALITY MANAGEMENT
TOOLS FOR QUALITY
IMPROVEMENT
Check sheets
Problem Control Charts Scatter Diagrams
Cause and Effect
Histograms Pareto Charts
Diagrams
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CHECK SHEETS
This is a custom designed
form used to record the
number of occurrences of a
particular outcome of
interest. It may collect basic
information such as how
many incidents occurred,
the timing, or the
measurement that was
non-conforming.
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Page 23 HISTOGRAMS
Raw data from a check
sheet may be put into a
histogram. Data that is
continuous in nature can
be put into a Histogram
that contains ranges of the
data. It will show an
accurate representation of
the distribution of the data
CONTROL CHARTS
In order to monitor the
performance of a process
over time, a control chart
is the appropriate tool. A
Control Chart includes an
Upper Control limit and a
lower Control limit, which
are used to control the
quality dimension that is
measured.
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Page 25 PARETO CHART
A special type of bar chart
that shows the number of
occurrences of a particular
characteristic, ordered from
highest to lowest. A Pareto
analysis helps us focus our
attention on the defects
that occur the most
frequently and to allocate
the resources accordingly.
SCATTER DIAGRAM
A simple diagram helps to
figure out if there is a
relationship between two
variables.
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Page 27 CAUSE & EFFECT
DIAGRAM
Also known as a Fishbone
diagram, it was developed
by Dr. Ishikawa to help
identify the causes of a
problem.