Section 5-35 (Domain 3): Quality Principles

Tim Naugler, August 11, 2001

Study notes:

Concept of Quality: Foundation for understanding of continuous process improvement

Core components of quality philosophies:

• Quality if based on customer satisfaction
• Must define quality before achieving quality
• Management must lead improvement efforts

Five perspectives of quality:

• Transcendent (Know it when we see it)
• Processed-based (possesses desired features)
• User-based (fitness for use)
• Development/manufacturing based (conformance to requirements)
• Value-based (acceptable cost)

Peter R Scholtes:
• Effectiveness: doing the right things (understanding the customer’s expectations)
• Efficiency: doing the right things right (exceeding the customer’s expectations)
Quality organizations must be both effective and efficient.

Patrick Townsend views quality in two parts: fact (supplier), and perception (customer).
Quality in fact:
• Doing the right thing
• Doing it the right way
• Doing it right the first time
• Doing it on time

Quality in perception:
• Delivering the right product
• Satisfying the customer’s needs
• Meeting the customer’s expectations
• Treating every customer with integrity, courtesy, and respect

The most important person in any process is the customer.

Customer satisfaction is the essence of a quality product.
Excellence is a measure or degree of quality.

Customers:
• External: those using the product or services provided by the organization
 • Internal: person or group receiving the results or outputs of any individual’s work
The organization must be dedicated to exceeding both internal and external customer’s
expectations.

Why concentrate on Quality?

Quality is the most important factor affecting an organization’s long-term performance.

Deming on Quality:
• Improves productivity
• Improves competitive position
• Ensures organization will stay in business

MONEY:
• Cost of poor quality: 15 – 50 % of the cost of doing business.
• Quality SAVES, it does not COST
• Quality is a solution, not the problem
• Reducing cost of poor quality directly affects the bottom line
• Improving quality is the most direct way for an organization to increase profit

How does quality lead to improved profits?

Townsend: Reducing rework directly reduces costs and increases productivity.

Quality Philosophies:

QAI stresses the importance of continuous process improvement in striving for quality.
Edwards Deming is the main guru of this continuous improvement approach.

Personalities:

Big players:
Edwards Deming: Generally known as the father of TQM, continuous process
management. Insisted on the necessity for companies to use statistical methods to control
and monitor quality. Related that Quality is 85% the responsibility of Management and
15% the responsibility of employees. Invented the Deming, or PDCA (Plan, Do, Check,
Action) cycle. Ideas made up of continuous improvement, using statistics, and being
customer-centric.

Joseph Juran: Insisted on the major role of management in implementing TQM, but put
less emphasis on statistical methods. Juran stated that quality does not happen by
accident, it must be planned. He believes that the majority of quality problems are the
fault of poor management, rather than poor workmanship on the shop floor. Stresses
breakthroughs, large jumps in quality.

Philip Crosby: Known for creating the zero defect movement. Originated the “Quality Is
Free'' concept. The performance standard must be Zero Defects, not “that’s close
enough.” Stresses defect prevention and conformance to requirements. Pegs senior
management as responsible for product quality.

Others:
Armand Feigenbaum: Known for writing Total Quality Control. Stated that the customer
is the one that defines quality. Argued that quality should be company-wide, not
contained to the quality control departments. The word 'control' in quality control
represents a management tool with 4 steps: Setting quality standards, appraising
conformance to these standards, acting when standards are exceeded, and planning for
improvements in the standards. Strove to move away from the then primary concern with
technical methods of quality control, to quality control as a business method.

Karou Ishikawa: Focused on internal and external customers as variables of a TQM

system. At the simplest technical level, his work has emphasised good data collection
and presentation, the use of Pareto Diagrams to prioritise quality improvements and
Cause-and-Effect (or Ishikawa or Fishbone) Diagrams.

Genishi Tagushi: Created the Loss Function that demonstrates a formula to determine the
cost of a lack of quality. In contrast to Western definitions, Taguchi works in terms of
quality loss rather than quality. This is defined as 'loss imparted by the product to society
from the time the product is shipped'.

Good information on the Gurus of TQM is at:

http://www.dti.gov.uk/mbp/bpgt/m9ja00001/m9ja000011.html

Restating Deming's 14 Points:

1. Create constancy of purpose to improve product and service.

2. Adopt new philosophy for new economic age by management learning
responsibilities and taking leadership for change.
3. Cease dependence on inspection to achieve quality; eliminate the need for mass
inspection by building quality into the product.
4. End awarding business on price; instead minimize total cost and move towards
single suppliers for items.
5. Improve constantly and forever the system of production and service to improve
quality and productivity and to decrease costs.
6. Institute training on the job.
7. Institute leadership; supervision should be to help do a better job; overhaul
supervision of management and production workers.
 8. Drive out fear so that all may work effectively for the organization.
9. Break down barriers between departments; research, design, sales and production
must work together to foresee problems in production and use.
10. Eliminate slogans, exhortations and numerical targets for the workforce, such as
'zero defects' or new productivity levels. Such exhortations are diversory as the
bulk of the problems belong to the system and are beyond the power of the
workforce.
11. Eliminate quotas or work standards, and management by objectives or numerical
goals; substitute leadership.
12. Remove barriers that rob people of their right to pride of workmanship; hourly
workers, management and engineering; eliminate annual or merit ratings and
management by objective.
13. Institute a vigorous education and self-improvement program.
14. Put everyone in the company to work to accomplish the transformation.

Another way to see Deming’s fourteen points, through Tveite’s Classification and
Grouping, is to see that there are five areas of commonality in Deming’s points.
Deming’s points also come down to two actions: stop focusing on judgment results, and
start focusing on improving processes. (The definition of management by process?)

Purpose:
• Create constancy and purpose
• Put everyone to work to accomplish the transformation

Leadership:
• Eliminate numerical goals and quotas
• Remove barriers to pride of work
• Drive out fear
• Institute leadership

Cooperation:
• Break down barriers between departments
• End the practice of awarding business on the basis of price alone
• Adopt a new philosophy

Training and education:

• Institute training on the job
• Institute a vigorous program of education and self-improvement

Improvement and Process

• Cease dependence on inspection to achieve quality
• Eliminate slogans and exhortations
• Improve constantly and forever the system of production and service
The Scientific Method:

Incorporating statistical methods with a logical approach to problem solving and process
improvement. Key method, but rarely used enough for quality improvement.
(Management by fact comes into play here – must have metrics in place to measure a
process, and decisions should be based on hard evidence.)

Employee Involvement:

Employee involvement is a key idea for process improvement. Creating teams is a way
in which employees are encouraged to participate and contribute to process improvement.

Vocabulary:

Client: The customer that pays for the product received and receives the benefit from use
of the product

Customer: The individual or organization, internal or external to the producing

organization that receives the product.

Empowerment: Giving people the knowledge, skills, and authority to act within their
area of expertise to do the work and also improve the process

Leadership: The ability to lead including inspiring others in a shared vision of what can
be, taking risks, serving as a role model, reinforcing and rewarding the accomplishments
of others, and helping others to act.

Management: A team or individuals who manage(s) resources at any level of the

organization.

Outputs: Products, services, or information supplied to meet customer needs.

Policy: Managerial desires and intents concerning either process (intended objectives) or
products (desired attributes).

Process: (1) The work effort that produces a product. This includes efforts of people and
equipment guided by policies, standards, and procedures. (2) The process or set of
processes used by an organization or project to plan, manage, execute, monitor, control,
and improve its software related activities. A set of activities and tasks [ISO/IEC12207-
1]. A statement of purpose and an essential set of practices (activities) that address that
purpose.
Process Improvement: A change to a process to make the process produce a given product
faster, more economically, or of higher quality. Such changes may require the product to
be changed. The defect rate must be maintained or reduced.

Product / Services: The output of a process, the work product. There are three useful
classes of products: Manufactured Products (standard and custom),
Administrative/Information Products (invoices, letters, etc…) and Service Products
(physical, intellectual, psychological, and physiological). Products are defined by a
statement of requirements; they are produced by one or more people working in a
process.

Product Improvement: To change the statement of requirements that defines a product to

make the product more satisfying and attractive to the customer (more competitive).
Such changes frequently require the process to be changed. This process may result in an
entirely new product.

Productivity: The ratio of the output of a process to the input, usually measured in the
same units. It is useful to compare the value added to a product by a process, to the value
of the input resources required (using fair market values for both input and output).

Quality: A product is a quality product if it is defect free. To the producer, a product is a

quality product if it meets or conforms to the statement of requirements that defines the
product. This statement is usually shortened to: quality means “meets requirements.”
From a customer’s perspective, quality means “fit for use.”

Quality Improvement: To change a production process so that the rate at which defective
products (defects) are produced is reduced. Some process changes may require the
product to be changed.

Requirement: A formal statement of: 1) an attribute to be possessed by the product or a

function to be performed by the product; 2) the performance standard for the attribute or
function; and/or 3) the measuring process to be used in verifying that the standard has
been met.

Statistical Process Control: The use of statistical techniques and tools to measure an
ongoing process for change or stability.

Supplier: An individual or organization that supplies inputs needed to generate a product,

service, or information to a customer.

Values (Sociology): The ideals, customs, instructions, etc… of a society toward which
the people have an affective regard. These values may be positive, as cleanliness,
freedom, or education, or may be negative, as cruelty, crime, or blasphemy. Any object
or quality desired as a means of as an end in itself.

Vision: A statement that describes the desired future state of a unit.

Side Note on TQM:
(Dilbert strikes again. Don’t let this happen to you…)

http://www.qs9000.com/ubb/Forum42/HTML/000026.html

From: "PaulR"
Newsgroups: misc.industry.quality
Subject: Re: Does it really pay?
Date: Tue, 01 Aug 2000 02:08:18 GMT

Maybe I'm a burnout case, but here goes:

First, the basic principles of TQM are, IMHO, definitely sound. So are the principles of
all of the alphabet soup that keeps coming down the pike. SPC, TQM, PxP, 6Sigma,
CRM, QFD, BPR, and, for all I know, EIEIO. Not only are they sound, but if you don't
interpret any of them too narrowly, they're all the same. They all offer the same
potential benefit: higher quality, lower cost, improved customer satisfaction, lower
scrap/rework rates, etc. etc.

But every one of these requires management commitment, management investment,

and time. Unfortunately, financial management is focused on the next quarter.
Managers are focused on keeping short-term costs down (including head-count), and
they have the attention span of six year olds. In my company, we've calculated an
MTBF (mean-time-between-fads) of about 30 months.

Consider what this means: Every one of these programs has the costs front-loaded,
(training, consultants, meetings) with the benefits coming on the back end. A short
MTBF means that companies are perpetually standing the costs of these programs
and never reaping the benefits. Some managers seem to get tired of the whole thing
and go back to traditional inspection quality plans (along with beating up on people
when these plans don't work). Others embrace each new Acronym with a religious
ferver, hoping that something, ANYTHING, will be THE ANSWER. None of them are
willing to make the long term commitments needed to make any of these programs
succeed.

Oh yes. The "enablers" are the consultants who promote each of these variants as
"the next big thing." After 24 months when consultant-lead training starts to let up,
the consultants go back to their trainers for six months. At the end of the 30 month
MTBF period, they're back with a new "next big thing."

Ah well. Keep the faith.

Paul R