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Introduction to Quality Management

Presented By: Zein Al-Abbadi

Prepared for: D. Ali Jebein

1.2 Quality Definition:

Jurans definition of quality as Quality is Fitness for Use (Juran, 1998, 2.2) is
widely recognized today as one of the more useful so quality must be
defined relevant to the customers needs and expectations (Bisgaard, 2008, 393).

Quality
Fitness for Use

Features Freedom from

Deficiencies

FIGURE 1: Quality defined by Juran as Fitness for Use and his two subsidiary
definitions as features and deficiencies.

Juran provides two subsidiary definitions to quality: (a) features and (b)
freedom from deficiencies as illustrated in Figure 1. Features have to do with
the design of the product, or service. It is what we intend to deliver.
Deficiencies have to do with the actual delivery. This profound distinction is
only slowly gaining popularity but is important, especially in the context of
Design for Six Sigma. More importantly, the distinction is key to
understanding the economic reasons for pursuing quality as a strategic
objective.
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To Crosby, quality means conformance to requirements. But older

definitions of quality such as conformance to specifications requirements
are no longer adequate at the highest conceptual level. Quality must be
defined relative to the customers needs and expectations.

Quality also define as the ability of an organization, an activity, a person, or

a system to deliver products and/or services. Quality is the degree to which a
set of inherent characteristics fulfils requirements. "quality is meeting
customer needs and expectations at a price which they are willing to pay".

Table I: Quality Definitions

Source Quality Definitions

Deming, 1986 Quality can be defined only in terms of the agent. ..In the
mind of the production worker, he produces quality if he can
take pride in his work... [and] quality to the plant manager
means to get the numbers out and to meet specifications.
Juran, 1988 "Quality is 'fitness for use'"
Crosby, 1984 "Quality has to be defined as conformance to requirements"
Feigenbaurn1, 983 "Quality is the total composite product and service
characteristics of market in & engineering, manufacturing
and maintenance through which the product and service in
use will meet the expectation by the customer"
ISO 8402,1986 "Quality is the totality of features and characteristics of a
product or service that bear upon its ability to satisfy stated
or implied needs"
Lewis, 1989, Moore, "Quality is consistently meeting or exceeding customer's
1987, Creedom, 1988 expectations"
acDonald and Piggott "Quality is delighting the customer by continuously meeting
and improving upon agreed requirements
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1990,

Collier, 1990 "Quality is the distinctive tangible and intangible properties

of a product and/or service that are perceived by the
customer as being better than the Competition
Ansell, 1993 Quality is conforming fully, without error, to the customer's
requirements

1.3 Quality: the Financial Effects:

Quality Costing was first introduced in the 1950s by Juran (1951) and
Feigenbaum (1956), Crosby (1979) defined it as the expense of
nonconformance, the cost of doing things wrong ( Kerfai&Ghadhab, 2016, 589).

Quality cost is the cost of all efforts made by a company, in order to produce
a product that can meet the necessary requirements and the customers need.
Crosby (1979) defined it as the expense of non-conformance, the cost of
doing things wrong (Chtzipetrou&Moschidis, 2016, 616).

In attempt to define the optimal level of quality costs, Juran and Ludvall
(1951) developed the so-called Prevention Appraisal Failures model,
which predicts the existence of a positive optimum in the relationship
between prevention + evaluation costs and failure costs and is still widely
used. (Sousa & Junior, 2016, 633).

The basic idea originated from the need to organize all costs related to the
quality system and the inspection of products, as well as all costs incurred
when the product failed to meet the requirements. Juran (1951) and
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Feigenbaum (1956, 1991) set the basis for a cost quality system, which can
be analyzed in four basic constituents:

1. prevention costs, which depict the costs of all activities, specifically

designed to prevent poor quality, i.e. costs relevant to the design
process of a quality system or the employee training program;
2. appraisal costs, which are costs associated with measuring, evaluating
or auditing products or services, in order to ensure that product quality
will satisfy customers demands, i.e. inspection/test of purchased
material, calibration of measuring and test equipment;
3. internal failure costs, which describe the costs that occur before a
defective product reaches the customer, that is, the costs of scrap,
rework, re-inspection; and
4. external failure costs, which are the costs that occur after the delivery
of the product to the customer i.e. costs in relation to returns,
complaints, warranty claims, etc.

The decision-making process on investment/disinvestment is of a

quantitative and dynamic nature. In this sense, new dynamic models that are
consistent with the main concepts of PAF models could guide decision
making better (Sousa & Junior, 2016, 634).

Later, criticism came to this model from the continuous quality

improvement defenders, including Crosby and Deming, then the original
model was reviewed by Juran and Gryna, creating the so-called new PAF
model where the optimum of the zero defects (ZDs).
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Although there are an alternative to the (PAF) approach has been introduced
by Crosby (1979) as the Crosbys Model, who proposes the costing of the
processes that ensure customer satisfaction (prevention and appraisal costs)
and are identified as conformance costs. The rest of the costs, associated
to low-quality products (internal and external failure costs), are called non-
conformance costs .

one may categories the cost of quality models into five generic models: P-A-
F model, Crosby model, opportunity or intangible cost model, process cost
model and activity based costing (ABC) model (Omar, 2014, 396).

Taguchi Methods were introduced as an answer to the gap that existed

between the design of a product and its manufacturability. The proposed
quality loss function represents the economic loss that exists when the
performance of a product deviates from a pre-set nominal value. In order to
reduce a products variation from the target value, Taguchi suggests three
design measures: system design, parameter design and tolerance design. ).

Studies concluded that any endeavor to improve quality will lead to an

increase of cost of the product or service since improving quality has its own
costs. As a result, measuring the cost of quality is important because it
provides information about the financial consequences of adopting quality
improvement programs. Feigenbaum (1991) categorized the model into two
major areas: costs of control (costs of conformance) and costs of failure of
controls (costs of non-conformance), which since then used by numerous
research studies (Omar, 2014, 395-396).
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As manufacturers continue to improve their factories, they discover that

existing cost measures have to be updated and no matter how sophisticated
and reliable these economic evaluation measures may be, problems still
remain unreliable if cost of quality information is not obtained as inputs for
these economic evaluations (Omar, 2014, 396).

The above cost of quality models have also been the target of extensive
criticism. The P-A-F model, in particular, has been characterized as
limited and inadequate, although it is the origin of all subsequent work on
quality costing. An extensive overview of P-A-F models major restrictions
is given by Dale and Plunkett (1999). Furthermore, Kim and Nakhai (2008)
and Freiesleben (2004) describe the existing models as static and old,
respectively, and propose modified or new descriptive models in order to
examine the aspects of quality costing that the traditional models fail to
address. Chiadamrong (2003) identifies further weaknesses of the traditional
cost of quality models, and presents an empirical model as a function of two
main components: traditional P-A-F expenses and hidden-opportunity
quality loss costs. (Chatzipetrou&Moschidis, 2016, 618).

The Effect on Costs is the cost of poor quality consists of all costs that
would disappear if there were no deficiencies no errors, no rework, no
field failures, and so on. Deficiencies that occur prior to sale obviously add
to producers costs. Deficiencies that occur after sale add to customers costs
as well as to producers costs. In addition, they reduce producers repeat
sales. Quality and Costs, is devoted to the ways in which quality can
influence costs (Juran, 1998, 2.4-2.5).
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Cost of poor quality perhaps the most obvious tangible benefit of quality
improvement is the reduction of costs associated with non- quality. If we
have to throw a product away when we have made an error in its
manufacture, it is clear that there is an immediate financial impact as all the
costs sunk into the product are lost. Similarly, doing an incorrect operation
over again absorbs cost (operation time, power, additional materials, etc,.

As we discussed above, the PAF model concept is not the only one used for
the cost of quality since other models found as illustrated in Table II:

Table II: Quality Cost Models

Generic model Cost/activity categories Examples of publications

describing, analyzing or
developing the model
P-A-F models Prevention appraisal failure Feigenbaum (1956), Merino (1988),
Chang et al. (1996), Tatikonda and
Tatikonda (1996),, Israeli and
Fisher (1991), Dawes(1989),
Sumanth and Arora (1992),
Morse(1983), etc.

Crosbys model Conformance + non- Suminsky (1994), Denton and

conformance Kowalski (1988).
Prevention + appraisal + Sandoval-Chavez and Beruvides
failure + opportunity (1998), Modarres and Ansari
Opportunity or (1987)
intangible cost Conformance + Carr (1992), Malchi and McGurk
models (2001), Ramudhin et al. (2008)
non-conformance +
opportunity
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Tangibles + intangibles Juran et al. (1975)

P-A-F (failure cost includes Heagy (1991), Chiadamrong (2003)

opportunity cost)
Process cost models Conformance + non-
conformance
ABC models Value added + non-valueadded
Taguchi loss Loss of sales revenue due to
function model poor quality + process
inefficiencies + losses when a
quality characteristic deviates
from a target
Ross (1977), Marsh (1989),
Goulden and Rawlins (1995),
Crossfield and Dale (1990)
Cooper (1988), Cooper and Kaplan
(1988), Tsai (1998), Jorgenson and
Enkerlin (1992),
Soumaya and Jacqueline (1998),
Chin-C et al. (1998), Jia (2007),
Johannes (2008),
Naidu (2008)

Source: An improved model for the cost of quality Mohamed Khaled Omar 2014, 397.

The difficulty to measure cost of quality is because there is a lack of

adequate methods for determining the financial consequences of poor
quality.

1.4 How to Manage for Quality:

To attain quality, it is begin by establishing the vision for the organization,

along with policies and goals. Conversion of goals into results is then done
through managerial processessequences of activities that produce the
intended results. Managing for quality makes extensive use of three such
managerial processes: quality planning, quality control and quality
improvement. These processes are now known as the Juran trilogy. They
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parallel the processes long used to manage for finance (Juran, 1998, 2.5: Abusa,
2011, 17).

1.5 Quality Control and Quality Assurance:

Quality Control is a universal managerial process for conducting operations

so as to provide stabilityto prevent adverse change and to "maintain the
status quo (Juran, 1998, 4.2). Organization management should recognize the
aspects of quality control and quality assurance requires two duties to be
undertaken:

First, refer to the process whereby measures are taken to make sure defects
in services are not part of the final output, and that the output meets quality.
Second, one may observe that quality assurance entails overlooking all
aspects, including design, development, service, installation, as well as
documentation (Jarrett, 2016, 25-26)..

Quality control and quality assurance have much in common. Each evaluates
performance. Each compares performance (actual quality) to quality goals.
Each stimulates corrective action as needed. Each acts on the
difference(Juran, 1998, 2.13).

However they also differ from each other. Quality control has as its primary
purpose to maintain control. And serve those who are directly responsible
for conducting operations. Performance is evaluated during operations, and
performance is compared to goals during operations. The resulting
information is received and used by the operating forces.
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Quality assurances main purpose is to verify that control is being

maintained. And serve those who are not directly responsible for conducting
operations and, hopefully, to be assured that all is well. Performance is
evaluated after operations, and the resulting information is provided to both
the operating forces and others who have a need to know. Others may
include plant, functional, or senior management; corporate staffs; regulatory
bodies; customers; and the general public(Juran, 1998, 4.3).

Organization managers, vary substantially in developing and implementing

quality assurance policies. An applied approaches include accreditation,
quality management systems, audit, organization guidelines, performance
indicators/measurement, systems for obtaining customer views and
expectations. Successful quality assurance policy implementation and
effectiveness in organization depends largely on a supportive regulatory and
competitive environment, legislation, customer focus, alignment with
financial incentives and organizational leadership(Hashjin, 2015, 344).

In this sense, quality assurance has a similarity to insurance. Each involves

spending a small sumto secure protection against a large loss. In the case of
quality assurance, the protection consists ofan early warning that may avoid
the large loss. The protection in insurance consists of compensation after the
loss (Juran, 1998, 2.13).

1.6 Quality Spheres:

The three spheres of quality are quality control, quality assurance, and
quality management. (Foster, 2017).
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Quality control: based on the scientific method, which includes the

phases of analysis, relation, and generalization (Kerfai&Ghadhab,
589, 2016). Measures are taken to make sure defects in products are
not part of the final output, and that the output meets quality and
acceptable product standards.
Quality assurance: refers to activities associated with guaranteeing the
quality of a product or service. Often, these activities are design-
related.
Management processes: that overarch and tie together the control and
assurance activities make up quality management.

2.1 Total Quality Management:

Globalization, competition and technological development are factors which

govern the companys growth. Considering these challenges, the company
needs to maintain a continuous improvement process in order to grow. One
of the applied approaches used to achieve growth is total quality
management (TQM). The TQM is based on continuous improvement,
control and performance measurement system.

2.2 Total Quality Management Definition:

There is no single or commonly accepted definition of the TQM concept. So

different definitions of TQM have been presented over the years. Authors
found that the TQM concept did not appear until the second half of the
1980s, where it replaced total quality (TQ) and quality management (QM)
(wiklicki, 2015, 57).TQM is a form of business management for the whole

organization (Longo, 1997, 50).

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TQM is an evolving system of practices, tools, and training methods for

managing companies to provide customer satisfaction in a rapidly changing
world (Kenneth, 2012, 13). TQM definition is a system of quality management
consisting of the five pillars of management commitment, customer focus,
quality costs, quality systems and continuous improvement to ensure that a
company meets customer requirements at the lowest cost and continually
improves its processes, products and services via the use of creative
techniques and innovation (Langoh, 2000 ,40).TQM is a management
approach to long term success through customer satisfaction. TQM is based
on all members of an organization participating in improving processes,
products, services and the culture in which they work (wiklicki, 2015, 57).

TQM emphasizes the creation of an inner environment to support

innovation, creativity, and risk-taking in meeting the customers' demands by
all the managers, employees, and customers (Wang, 2017, 130).

2.3 The Importance of Total Quality Management:

Quality is considered as one of the solutions to competitiveness in todays

international marketplace. The importance of TQM has significantly boosted
over the last decades. With modern quality solutions, cost drops, quality
increases and average price decreases. Thus organizations which implement
quality technology become beneficiated of these investments. The
organization that invests more in quality associated technology delivers
better products, rates a higher price and earns higher profits than rivals. In
addition the firms quality, cost and profit benefits persevere in the future
and the firm value enhances when customer satisfaction is applied as an aim.
There are anecdotal and empirical findings that support TQM as a
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worldwide business strategy. Although many studies found that TQM can
create economic value to the firm, not all TQM adopters are able to
accomplish it (Honarpour and Jusoh, 2017, 91).

The almost universally accepted goals or importance of TQM are lower

costs, higher revenues, delighted customers, and empowered
employees(Juran, 1998, 14.4).

The benefits derived from TQM implementation in service organizations by

focusing on items describing product, processes and service quality,
employee service quality, employee satisfaction, customer satisfaction and
supplier performance. Authors studied a set of TQM outcomes in service
companies, including product and service outcomes, customer-focused
outcomes, financial and market outcomes, human resource outcomes,
organizational effectiveness outcomes, and social responsibility outcomes.
Furthermore excellence in public government agencies should encompass
stakeholder satisfaction and overall service quality (Psomas, Vouzas, Bouranta,
&Tasiou, 2017, 6).

2.4 Total Quality Management as a Philosophy:

The TQM philosophy in its holistic approach as described previously, it

embraces both technical and behavioral aspects of an organization as well as
the environment surrounding the organization. Authors argued that it is vital
for organizations to realize the notion that TQM is holistic in its
approach(Longo, 1997, 54).

TQM has been considered as a philosophy that provides the basis of a

continuously advancing organization. The TQM strategic plan captures the
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vision and values defined in the companys philosophy then transforms these
fundamentals into long run goals. It combines basic management methods,
current improvement initiatives and technical tools in a well-organized
solution(Honarpour&Jusoh, 2017, 91-92).

The practices from organization refer to customer oriented approaches,

quality measurement, performance- related pay, continuous process
improvement, quality of information. All these practices fall under the
banner of TQM philosophy, which aims at improving operational processes
to enhance customers satisfaction (Psomas, Vouzas, Bouranta, &Tasiou, 2017, 3).

TQM implementation implies obtaining stability between conformance to

customer satisfaction and internal process improvement, without reducing
flexibility and inventiveness in operation. TQM is responsible for all
modification processes throughout the organization in order to achieve
higher fulfillment of customers needs in the most cost-effective way. TQM
is founded on internal, or self-control, that is used in every unit of
organization (technology and people). By spreading problem solving and
decision making down in the organization it enables all of the personnel to
either assess or adopt corrective activities to provide a product or service
that satisfies the needs of their customers (Honarpour and Jusoh, 2017, 92).

TQM philosophy involves everyone in an organization in a continual effort

to improve quality and achieve customer satisfaction (Wang, 2017, 130).

Continuous improving

Involvement of everyone
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Customer satisfaction

Thus, not only a positive attitude toward TQM philosophy is desirable from
the top management but also the employee involvement is necessary (Psomas,
Vouzas, Bouranta, &Tasiou, 2017, 12).

The TQM philosophy adoption requires also a cultural change, a redesign of

organizational structures and work as well as the learning of new skills by
managers and employees (Psomas, Vouzas, Bouranta, &Tasiou, 2017, 12).

2.5 HRM Versus TQHRM

The major differences between traditional human resource management and

total quality human resource management. How does total quality human
resource management transcend traditional human resource management in
regard to providing an environment that is supportive of quality concerns?

The table below lays out the question succinctly. HRM versus TQHRM

HRM versus TQHRM

Traditional HRM TQHRM

Process characteristics Unilateral role Consulting role

Centralization Decentralization

Pull Release

Administrative Developmental

Content characteristics Nomothetic Pluralistic

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Compartmentalized Holistic

Worker-oriented System-oriented

Performance measures Satisfaction measures

Job-based Person-base

Source: Foster, S. Thomas; Sampson, Scott E.; Wallin, Cynthia; Webb, Scott W,
Managing Supply Chain And Operations: An Integrative Approach, 1st Ed., 2016, p.15.
Reprinted and Electronically reproduced by permission of Pearson Education, Inc., New
York, NY.

Two critical success factors of TQM, human resource management and

process management, were found to have a significant impact on improving
performance of organization. The investigated the effects of TQM practices
on performance outcomes. Indicated that different TQM practices have
significantly affected different outcomes. For example, knowledge and
process management practices are positively related to inventory
management performance and innovation performance, while training is
positively related to operational performance ().