SPIRAL OF PROGRESS OF QUALITY

(Spiral of Quality)

Spiral of Progress of Quality

Joseph Juran.

was a concept given by

Through this concept, he tried to shift the quality thinking from

just Inspection and Testing to all those functions which affect
quality.
According to Juran, if Quality is to be attained, a wide variety of
identifiable activities, called Quality Tasks/ Work
Elements have to be performed, e.g. studying the customers
quality needs, product designing, product testing, complaint
analysis etc.
If a firm is small, these different quality tasks or work elements can
be performed by a few persons. As the firm grows, each specific
task
becomes
so
time
consuming
that
specialized
departments have to be created to perform each task. This is
when departments are introduced viz. design, PPC, purchase, etc.

SPIRAL OF PROGRESS OF QUALITY

(Spiral of Quality)
These different work elements or quality tasks or activities
required to attain quality, follow a particular sequence
of events called, Spiral of Progress of Quality.
Work Elements/ Quality Tasks/ Activities shown in the Spiral
include: Market Research, PDD, Specifications, Purchasing,
Production Planning, Production and Process Control, Inspection and
Testing, Marketing, Customer Service, Feedback.
In addition to the activities shown in the Spiral, many other
administrative and support activities viz. finance, HR, data
processing, etc. are also required.
The different activities combined together can be called as Quality
Function. Quality Function can be defined as the entire

collection of activities required to attain Fitness for Use.

SPIRAL OF PROGRESS OF QUALITY

(Spiral

of

Quality)

The network of activities under the Spiral of Quality or Quality Function when well defined and
coordinated become a unified system which carries out the intended quality objectives.

Changing Scope of Quality

Activities
Content of Little q
Area

The scope of quality activities

has undergone a radical
change in the past few
decades.
Initially, quality activities used
to focus on the quality of
physical products in the
manufacturing industry only
(Little q) but now quality
activities include application of
quality
concepts
to
all
products,
all
functional
activities, and all types of
industries (Big Q).
The traditional (Little q) versus
modern quality (Big Q) activities
are compared in the table.

(Traditional Quality)

Content of Big Q
(Modern Quality)

Output

Only Products

Both, Products as
well as Services

Processes

Only those processes

which are related to
Manufacturing of the
Product

All
Processes:
Manufacturing,
Support Functions
(Process
Planning,
MPS, MRP, CP, IC),
Business Functions
(Forecasting,
Customer
Billing,
etc.)

Industry

Only Manufacturing

All
Types:
Manufacturing,
Service, Government,
NGOs etc.

Ishikawas Quality Tools/ The Seven Basic

Quality Tools
There are several tools and techniques which are used to detect, solve, and
analyze quality related problems (for troubleshooting issues related to
quality).
Dr Karou Ishikawa put forward seven basic visual tools of quality so that even an
average person (with little formal training in statistics) could analyze and interpret
data.
These tools are used world wide by companies, their managers and employees at all levels.

The SEVEN QUALITY TOOLS are

i.
ii.
iii.
iv.
v.
vi.
vii.

Histograms
Pareto Charts
Cause and Effect Diagrams
Run Charts
Scatter Diagrams
Flow Diagrams
Control Charts

Dr. Karou Ishikawa

Ishikawas Quality Tools/ The Seven Basic

Quality Tools
1.

HISTOGRAMS

Given by Karl Pearson.

Unorganized data can be meaningless. Histogram is a visual tool

to organize data to describe its characteristics.

Frequency distribution shows how often each value contained in a

data set occurs.

Histogram is the most commonly used graph to show frequency

distributions.

A histogram is, a representation of a frequency distribution

by means of rectangles whose widths represent class

intervals (bins) and whose heights are proportional to the
corresponding frequencies.

Ishikawas Quality Tools/ The Seven Basic

Quality Tools
1. HISTOGRAM

Data
Value

Frequenc
y

HISTOGRAM

BAR GRAPH

Bar graph is generally drawn when frequencies have not been given for continuous data i.e.
frequencies are given for different categories of data e.g. population of different states being
compared through a bar graph.
Histogram is generally used when frequencies have been given for a particular category of data i.e.
data is continuous. In histograms, the horizontal scale is numerical, whereas in bar graph, it is
categorical.

Ishikawas Quality Tools/

The Seven Basic Quality Tools:
HISTOGRAMS
Consider the data set {3,11,12,19,
22,23,24,27,29,35,36,37,45,49}

CLASS INTERVAL FREQUENCY

0-10

10-20

20-30

30-40

40-50

Ishikawas Quality Tools/

The Seven Basic Quality Tools:
HISTOGRAMS

APPLICATIONS OF HISTOGRAMS
Histograms allow to analyse extremely large data sets by
reducing them to a single graph that can
1.
2.

Communicate the shape of data quickly to others e.g. symmetrical,

skewed right, skewed left, peaked, bimodal etc.
Show primary, secondary, and tertiary peaks in data as well as give
a visual representation of the statistical significance of those peaks
(some idea about the mean and how is data distributed about the
mean etc.).

Ishikawas Quality Tools/ The Seven Basic

Quality Tools
2. PARETO CHARTS (Pareto Analysis)
Vilfredo Pareto (1848-1923), an Italian Economist, conducted extensive
studies (initially in Italy and then throughout Europe) to determine the
distribution of wealth in population. Through his studies he concluded that a few
people had a lot of money and a lot of people had little money. This unequal
distribution of wealth became an integral part of economic theories. To quantify
this, Pareto stated that 20% of the population had 80% of the wealth. The
principle started being known as PARETO PRINCIPLE or 80/20 Rule.
Dr. Juran recognized this concept to be universal which could be applied to
many fields including QUALITY ENGINEERING. Juran, thus coined the term,
VITAL FEW TRIVIAL MANY. Juran stated that 20% of the quality problems
cause 80% of the monitory loss. He further stated that, 80% of the quality
problems are created by approximately 20% of the causes.
Examples of VITAL FEW:
a) a few non-conformities account for majority of the customer
complaints.
b) a few processes account for majority of the scrap/ rework
Pareto chart is a BAR GRAPH/ HISTOGRAM aided by the 80/20 rule. The
bars are arranged with the highest bar on the left and the shortest on the right.
It visually depicts, as to which situations are more significant (VITAL FEW).

 A Pareto chart is usually used to identify the principle

PARETO
ANALYSIS (continued)
drivers to a problem. Pareto charts are used to identify

and prioritize problems to be solved. Pareto Charts are

used when products are suffering from different defects
but the defects are occurring at a different frequency, or
only a few account for most of the defects present, or
different defects incur different costs. The manufacturer
could concentrate on reducing the defects which make up
a bigger percentage of all the defects or focus on
eliminating the defects that cause major monetary loss.

A check sheet is used to count how often a particular item

occurs usually as a cause to a problem. The items are then
charted by the percentage of the occurrences in
decreasing order. They are actually histograms/ bar graphs
aided by the 80/20 rule adapted by Joseph Juran. The
resulting chart shows which items have the most influence
on the problem. This goes along with the 80-20 rule.

CONSTRUCTION
PARETO
ANALYSIS (continued)

1.Form a table, listing the various categories of causes and their respective
frequency i.e. count of occurrence. Add two more columns, one for percentage
frequency of each category, and the other for cumulative percentage frequency.

For example:
CATEGORY

FREQUENCY

PERCENTAGE
FREQUENCY

CUMULATIVE
PERCENTAGE
FREQUENCY

Broken Link

35

37

37

Spelling Error

30

32

69

Missing Image

25

26

95

Script Error

05

05

100

F = 95

2. Plot a graph with categories on the X-axis and Percentage Frequency on

the Y-axis. May be also, cumulative percentage frequency on the right side of Y-axis.

PARETO ANALYSIS (continued)

70

(64)

60
50
40
30
(13)

rt s

(6)

(3)

ca
ne

tiv
e

pa

sio
ec

di
m

en

De
f

M
ac
hi

ro
ng

rD

es
ig
n

ns

10

(2)

(2)

lib
ra
pe
ti o
ra
ns
to
re
rro
De
rs
fe
ct
ive
m
Su
at
er
rfa
ia
ce
ls
ab
ra
sio
ns

(10)

20

Po
o

Percent from each cause

3. Put the percentage frequencies on the graph in descending order from left to
right.

Causes of poor quality

PARETO ANALYSIS (continued)

4. Draw the cumulative line graph, moving from left to right.

5. Draw a horizontal line from 80% mark on Y-axis till it intersects a point on the line graph.
Then, drop a perpendicular on the X-axis from this point of intersection. This point on the Xaxis separates the vital few (on left) from the trivial many. Mark these two labels on the
X-axis.

3. RUN CHARTS (TIME SERIES PLOT)

Example:

An organization desires
that its product is delivered
to the customer on time.
However, it has noticed that
it doesnt take the same
amount of time on each day
of the week. They decided
to monitor the amount of
time it takes to deliver their
product over the next few
weeks.

Often, some measure of central tendency of data (say, average of data), or some threshold limit is
indicated by a horizontal dashed line, called the REFERENCE LINE.

RUN
CHARTS
(TIME
SERIES
PLOT)
Run charts
are generally
helpful
in noting:
a.Shifts in the location of a production process e.g.
statics/points moving away from the reference line or moving
to a new location as compared to the preceding points.
b. upward and downward trends, cycles. Each of these
situations indicate either an increase in variability or shift in
the location of the production process.
Both (a) and (b) can be used as a basis to initiate investigations
to find reasons behind such behaviours.

4. SCATTER DIAGRAMS

Scatter Diagram is a graph which shows relationship between paired data

(two variables).

It is a graphical tool to determine whether a cause and effect relationship

exists between two variables (Scatter Diagram is used to study and identify the
possible relationship between the changes observed in two different sets of
variables).

The graph is drawn by taking the independent variable (cause variable)

along the X-axis and the dependent variable (effect variable) on the Y-axis.

Examples of paired data which have a cause and effect relationship:

a.
b.
c.

Cutting speed during machining and tool life.

Equipment age and breakdown time
Training hours and errors made

4. SCATTER DIAGRAMS (continued)

Constructing a Scatter Diagram

i.

Collect two pieces of data and tabulate the data as ordered

pairs (x, y).

ii.

Plot these ordered pairs, taking cause variable (independent

variable) along the X-axis and effect variable (dependent
variable) along the Y-axis.

i.

Interpret the scatter diagram for direction and strength of

relationship. The different types of relationships between data
pairs are as follows:

Positive correlation
- Negative correlation
- No correlation
- Correlation by stratification
-

(Stratified pattern represents different causes for the

same effect. For example, fuel mileage with vehicle moving in the
when moving at a given speed in a

- Curvilinear correlation
If

direction of wind versus

direction opposite to the direction of wind)

a characteristic pattern is obtained on the scatter diagram depicting a significant

correlation between the two variables, some regression or correlation analysis can
be carried out. If nothing can be concluded from the scatter diagram, go to Step(iv).

4. SCATTER DIAGRAMS
Constructing a Scatter Diagram (continued)
iv.Divide the scatter diagram into four quadrants. For this, the following steps are
followed. Suppose X points are plotted on the graph.
a) At count of X/2 points from top to bottom, draw a horizontal line (in case
the number of points are odd in number, draw the line through the middle
point).
b) At count of X/2 points from left to right, draw a vertical line (in case the
number of points are odd in number, draw the line through the middle
point).
v.Count the points in each of the four quadrants (do not count points on a line).
vi.Add points in the diagonally opposite quadrants and obtain their sum. Let the
sums be called A and B respectively.
A = sum of (points in the upper left quadrant and points in the lower right
quadrant)
B = sum of (points in the upper right quadrant and points in the lower left
quadrant)
N=A+B
Q = the smaller of A and B
a)From the Scatter Diagram Trend Test table, see the value of Limit
corresponding to N. If Q is less than the Limit (Q < Limit), the two variables
have a significant correlation.

Charts Defined
5.Flow
FLOW
CHARTS / FLOW DIAGRAM
A flow chart is a pictorial representation showing all of the steps
of a process. It is a graphical description of how work is done.
Used to describe processes
investigated, improved etc.

that

are

to

be

understood,

Creating a Flow Chart

First, familiarize the participants with the flow chart symbols.
Draw the process flow chart and fill it out in detail about each
element.
Analyze the flow chart. Determine which steps add value and
which dont in the process of simplifying the work.

FLOWCHARTS / FLOW DIAGRAM

Activity

Decision

No

Yes

Start or Stop

FLOW CHARTS / FLOW DIAGRAM

FLOWCHART
An Example: Statistical Process Control Steps

Start

Produce Good
Provide Service
Take Sample

No
Assign.
Causes?
Yes

Inspect Sample

Stop Process

Create
Control Chart

Find Out Why

Process Charts

Operations
Inspection
Transportation
Delay
Storage

Process: Apple Sauce

Description
of
process

Unload apples from truck

Move to inspection station

Weigh, inspect, sort

Move to storage

Wait until needed

Move to peeler

Apples peeled and cored

15

Soak in water until needed

20

Place in conveyor

10

Move to mixing area

11

Weigh, inspect, sort

Distance
(feet)

Operation
Transport
Inspect
Delay
Storage

Step

Date: 03-09-08

Location: Kullu Mountain

Time
(min)

Process Chart

20
100 ft
30
50 ft
360
20 ft

20 ft
30
Total

480

190 ft

Control Charts
Control charts are used to determine whether a process will
produce a product or service
with consistent measurable
properties. It tells whether the process is in control or going out
of control.

Control Chart
27
24
UCL = 23.35

Number of defects

21

c = 12.67

18
15
12
9
6

LCL = 1.99

3
2

10

12

Sample number

14

16

Cause and Effect Diagram (Fishbone Diagram

or Ishikawa Diagram)
Cause and Effect diagrams were developed by Dr. Karou Ishikiwi in 1963.
These diagrams when made resemble the bones of a fish skeleton and
so are referred to as Fishbone diagrams.

Purpose and Definition:

Cause and Effect diagrams are used to find the possible causes of an
effect i.e. problem. If a company is facing quality relating problem, it can
use this quality tool to identify the various probable reasons or causes
creating that problem. Thus CAUSE AND EFFECT diagram gives the
relationship between the PROBLEM and its POSSIBLE CAUSES.

Dr. Ishikawa and Dr. W. Edwards Deming used this diagram extensively
as one of the first tools in Quality Management Process. Deming taught
TQM in Japan since World War II and also gave the PDCA concept.
Definitions:
1.
It is a graphical representation of different factors (causes) that
contribute to an effect. The effect is usually a problem to be resolved.
2.
It is a problem analysis technique which attempts to identify the root
causes for a problem thereby allowing a group to work towards solving
the real problems and not just symptoms.
3.
This diagram represents the relationship between some effect and all
the possible causes. For every effect, there are likely to be several
major causes. These major causes might be summarized under men,
method, machine and material.
4.
A graphical method to record and classify a chain of causes and effects
in order to resolve a quality problem.

Cause and Effect Diagram (Fishbone

Diagram or Ishikawa Diagram)
Procedure to draw the Fishbone Diagram
1.

The problem to be solved is stated clearly. The problem statement

should be well defined and agreed upon by all group members. The
problem should have a narrow focus, otherwise the diagram would
become too large. If possible a numerical measurement should be
established for the problem against which subsequent improvement
can be measured.
A line is drawn in the middle of a sheet of paper to a box on the right
hand side. In this box, the problem statement is written. The line can be
called as the backbone of the fish and the box, the head of the fish.

STEPS TO CONSTRUCT Cause & Effect DIAGRAM

(Backbone or Spine)

Quality Problem
(Problem Statement)
(Fish Head)

STEPS TO CONSTRUCT Cause & Effect DIAGRAM

2.

In this step, a brainstorming session of the group members is held to

identify the broad areas of the problem i.e. the major categories of the
causes are identified. Generally these Broad Areas/ Major Categories are:

For

Manufacturing:

MEN,

MACHINES,

METHODS

and

MATERIALS

For Services: MEN, EQUIPMENT, PROCEDURES and

POLICIES
These Broad Areas/ Major Categories are represented in boxes as the
main bones of the fish skeleton. They are joined to the backbone of the
fish skeleton through sloping lines as shown in the figure.

Major Cause/
Major Category/
Broad Area 1

Major Cause/
Major Category/
Broad Area 2

Main Bones

Problem
Statement
Backbone or Spine
Fish Head

Major Cause/
Major Category/
Broad Area 3

Major Cause/
Major Category/
Broad Area 4

MEN

MACHINERY

Problem
Statement related
to Manufacturing
Industry

METHOD

MATERIAL

MEN

EQUIPMENT

Problem
Statement related
to Service
Industry

PROCEDURES

POLICIES

STEPS TO CONSTRUCT Cause & Effect DIAGRAM

3. In this step, again a brainstorming session of the group members is held to
identify the causes/ issues under each problem area/ major categories of
cause. For this, under each category, look for the things that have
changed, deviations from norms or patterns.

List the responses as branches off the main bones i.e. major causes.
The causes identified for each major category are called Level 1 causes.
Similarly Level 1 causes are found for each main cause.

In the next stage, for each level 1 cause, find the possible sub-causes which
would be called Level 2 causes. For each level 2 cause, find the possible
sub-causes which would be called Level 3 causes. One can go up to Level
4 or 5.

The resulting structure after completion looks like a tree or a fish

skeleton and hence the name Fishbone Diagram.

Major Cause 2

Major Cause 1

Level 2 Cause
Level 3
Level 1 Cause

Level 1 Cause
Supporting
Ideas

Major Cause 3

Why
students
earn poor
grades?

Major Cause 4

Measurement
Faulty testing equipment
Incorrect specifications
Improper methods

Inaccurate
temperature
control
Dust and
Dirt

Environment

Human

Machines
Out of adjustment

Poor supervision
Lack of concentration

Tooling problems
Old / worn

Inadequate training

Quality
Problem
Defective from vendor
Not to specifications
Materialhandling problems

Materials

Poor process
design
Ineffective quality
management
Deficiencies
in product
design

Process

Fishbone Chart:

Airline Customer Service

Cause-and-Effect Chart for Flight Departure Delay (Fishbone

Chart)
Equipment

Personnel

Aircraft late to gate

Late arrival
Gate occupied

Other
Weather
Air traffic

Mechanical failures
Late pushback tug

Gate agents cannot process passengers quickly enough

Too few agents
Agents undertrained
Agents undermotivated
Agents arrive at gate late
Late cabin cleaners
Late or unavailable cabin crews
Late or unavailable cockpit crews
Poor announcement of departures
Weight an balance sheet late

Late baggage to aircraft

Late fuel
Late food service

Delayed checkin procedure

Confused seat selection
Passengers bypass checkin counter
Checking oversize baggage
Issuance of boarding pass
Acceptance of late passengers
Cutoff too close to departure time
Desire to protect late passengers
Desire to help companys income
Poor gate locations

Material
Procedure

Delayed
Flight
Departure on
Avg. by 10 min

STEPS TO CONSTRUCT Cause &

Effect DIAGRAM
4.

In this step, the different causes are quantified i.e. data is

collected to show that the causes being shown on the diagram are
real. The quantification is represented with the help of Pareto or any
other tool, to fix the priority in which different causes would be
eliminated.

5.

Implement appropriate solutions to eliminate or reduce the causes of

problems. Measure the Improvement level.

Quality Circles (Quality Control

Circles)
Quality Circles is a small group of workforce level employees in the
same work area who meet voluntarily for about half an hour every
week to address work related problems.
It is a volunteer group of workers or even a group of students now-adays who meet together to discuss workplace improvement and make
presentations to the management with their ideas. Typical topics are
improving the safety, product design and manufacturing
processes. This not only improves the performance of the
organization, but also motivates and enriches the work life of the
employees.

Professor John Oakland, a leading authority on quality, defines Quality

Circles as a group of workers who do similar work and who meet
voluntarily, regularly, in normal working time, under leadership of their
supervisor to identify, analyze and solve work related problems to
recommend solutions to the management.

Underlying Principle
Quality Circle is based on participative philosophy woven about quality
control and problem solving techniques at the bottom level. This concept
enables the grass root level employees to play a significant and
meaningful role in their organization. The main purpose of quality circles is to
build the people and produce quality people towards making quality
products or providing quality services.
The concept of Quality Circles is primarily based upon the recognition of the
value of the worker as a human being , as someone who activises on
his job, his wisdom, intelligence, experience, attitude and feelings.
It is based on Human Resource Management considered as one of the key
factors in the improvement of product quality and productivity. Quality Circle
concept is based on the principle that employee participation in decision making
and problem solving improves the quality of work.

Quality Circle concept has three major attributes.

Quality Circle is a form of participation management.

It is a HRD technique.
It is a form of problem solving technique.

The Origin
The concept of Quality Circles was initiated in the U.S in 1950s but
was not successful.
Quality Circles, as we know today, were developed in Japan in 1963
by Dr. Karou Ishikawa. He started this concept to tap the creative
potential of the bottom level employees.
The concept was re-exported to U.S in 1970s. 1980s saw the
development of TQM and reduction in the use Quality Circles.
But even today, Quality Circles are very useful in solving work
related problems. These have now evolved into Kaizen teams (but
these are multi-functional). Quality Circles have been extremely
successful in Japan but only partially successful in U.S. In U.S, teams
called Product Development Teams have been more successful.

Characteristic Features of Quality

Circles
Strength of Group: The optimum number of members, in a Quality

Circle is 6 to 12. If the number of members is very small (say<6), the circle
becomes inactive and if the number of members is too large (say>12),
there is lack of active participation by some group members.

Composition of the Group: The members of the Quality Circle are

workforce level employees. Their designations need not be same but

they should be engaged in common work i.e. should be from the same
department.
One of the members is made the leader who coordinates the activities
of the group. All members of the quality circle (whether operator,
supervisor, lineman etc.) have equal status in the group. The members
select their own projects, set own rules and priorities. All decisions
are made by consensus of the group members.

Voluntary Team: The members of the Quality Circle join it voluntarily.

There is no pressure on them to join. Also, no one can be barred from

joining a Quality Circle by virtue of his being a Union Leader or due to
lack of qualification etc.

Characteristic Features of Quality

Circles

Place and Time: The Quality Circle meeting should be held away from the

work area so that the group members are free from distractions. The members
meet generally during working hours but can meet beyond the normal
working hours also.
The members of the Quality Circle can meet for one hour per week if the
group is relatively new. Normally they meet for half an hour per week.
Practically, the length and frequency of Q.C meetings will vary according to
quality problems to be solved. There should be minimum pressure on the
team members to solve problems within a set of time frame.

Nature of Problems Solved: Quality Circles address two type of

problems: Those relating to well being of the workers.
Those relating to well being of the company.
The problem areas are generally improvement in safety features, product
design and improvement in manufacturing processes being used. It should be
remembered that Quality Circles deal with only work related problems and not
with grievances or demands.

Working of a Quality Circle

A Quality Circle comprising of 6-12 voluntary members belonging to one functional department is
formed.
The Quality Circle is given a name by the members and a leader is chosen from amongst them.
The Q.C members decide the rules and regulations of the functioning of group through consensus of its
members. Quality Circle leader should make sure that each meeting has a clear agenda and objectives.

The members of the Quality Circle identify various work related problems of their area through a
brainstorming session.

After problems have been identified, priorities are set to decide the order in which the problems would
be undertaken for solution.
Each problem is analyzed by the Q.C using simple problem solving techniques like brainstorming etc
and quality tools like Run charts, Ishikawa diagram, Pareto charts etc. Care should be taken that each
member has received proper training on these techniques before Q.C starts working on problems.
So with the help of different techniques, alternative solutions are obtained to solve a problem.
The group members discuss and evaluate different solutions and select one solution for the problem.
An action plan is prepared by the Q.C team and sent for managements approval. On obtaining the
approval, action plan is implemented to solve the problem. The circle should not hesitate to avail
outside/ expert help whenever deemed necessary.

Identify a number of problems

Problem Identification

Problem Selection

Selection of the
problem to be
solved
after
setting priorities
for all identified
problems

Problem Analysis

Generate Alternative
Solutions

Select the most

Appropriate Solution

Prepare Plan of Action

Problem is analyzed
using simple problems
solving techniques viz.
Brain
Storming,
Quality tools etc.

Discussing and evaluating

different solutions to choose
the most effective one.
Implementation of the
Solution

Objectives/ Benefits of Quality

Circles
The benefits of Quality Circles fall into three categories:
A)

INDIVIDUAL CHARACTERISTICS:
i.
As said earlier, quality circle is a form of participative
management. It improves the capabilities of an individual
because of group participation. Group participation brings out
the hidden potential of employees.
ii. It also improves the personality characteristics of employees
e.g. Shyness etc. It increases the level of skill of employees
because of training received prior to becoming a member of Q.C.

B)

INDIVIDUAL RELATION WITH OTHERS:

i.

ii.

It leads to the development of team spirit. The workers

attitude changes from,
I could not do to We can do.
It increases managements respect for workers.

Objectives/ Benefits of Quality

Circles
C) WORKERS ATTITUDE TOWARDS THEIR ORGANIZATION
i.

ii.
iii.

Quality Circles can change some

workers negative
attitude from, I dont care to I do care. It leads to
continuous improvement in the quality of work life
through humanization of work.
It makes the workers understand the importance of
product quality.
It makes the workers appreciate why some problems
cant be solved quickly.

Some Important Points Regarding Quality

Circles
Voluntary group of employees who work on similar tasks or share an area of
responsibility. They agree to work on a regular basis to discuss and solve
problems related to work..

For success of any Q.C, top management support is essential.

Scope of projects need to be small enough to be capably addressed by the
team.
Success of other Q.C teams must be communicated to all. Success of other
teams has positive peer pressure effect.
All members require to receive training on smple tools and techniques to solve
quality related problems.
Members to be empowered.

Problems with Q.C

Inadequate training.
Unsure of purpose.
Not truly voluntary.
Lack of Management interest.
Employee empowerment not there.

Quality Costs

All organizations generally identify the costs required to carry out

different functions viz. product design, manufacturing, marketing etc.
Until 1950s. this concept had not been extended to quality function,
except for the departmental activities of inspection and testing.
There were many other quality related costs but they were scattered
under different cost accounts, especially overheads.

During 1950s the concept of QUALITY COSTS started evolving.

QUALITY COSTS can have two meanings:

a) Cost of attaining quality.
b) Cost incurred because of poor quality.

Classification- Quality Costs

Quality Costs are classified into four broad categories:

Internal Failure Costs

External Failure Costs

Appraisal Costs

Prevention Costs

Quality Costs - Internal Failure

Costs

Costs associated with defects, errors or non-conformities

present in products which are detected before the product
is shipped to the external customer. These costs can be
saved if no defects are present in products before
shipment.
Scrap (Spoilage, Waste): Defective products can't be
economically repaired. Scrap costs include labor,
material and other costs in producing the scrap.
Rework: Non-conforming items which can be
economically repaired. Costs include expenses of
correcting the non-conformities.
Failure Analysis: Cost of analyzing
the
conforming products and determine causes.

non-

Non-Conforming Supplies: Cost of scrap and rework

because of non-conforming items received from
supplier.

Quality Costs -

Costs

Internal Failure

Sorting Costs: Costs involved in 100% inspection

of lots containing unacceptable levels of
defectives.
Re-inspection and Re-testing: Cost of reinspecting and re-testing the reworked items.
Avoidable Process Losses: Cost of losses which
occur
even
with
conforming
products
(overfilled containers because of variability in
filling and measuring equipment; leakage).
Downgrading: If products are of poor quality,
their selling price is to be reduced. Downgrading
costs are losses because of difference between
normal and reduced selling price.

Quality Costs - External Failure

Costs

Costs associated with defects, errors or non-conformities present in

products which are detected after the product is shipped to the
external customer.

Warranty Charges: Cost of repairing the product, cost of spares,

cost of investigation and adjustment of complaints.

Returned Material: Cost of receiving and replacing defective

products received from field.

Allowances/ Downgrading: Concessions made to customer to

accept a sub-standard product or concessions given even for a
conforming product which does not meet fitness-for-use
requirements.

Quality Costs - Appraisal

Costs

Costs associated with determining the level of

conformance to specifications for manufactured products.
Inspection and Testing: Cost of carrying out
incoming (purchased), process (semi-finished) and
outgoing (completed) inspection.
Maintaining accuracy of Testing Equipment: Cost of
calibration and maintaining accuracy of measuring
equipment.
Evaluation of Stock: Cost of evaluating quality of
stock stored in warehouse or as inventory in factory,
to determine the degree of degradation.
Quality Audits: Cost of performing audits.

Quality Costs - Prevention Costs

sts incurred to keep failure and appraisal costs at a minimum.

Quality Planning: Costs of all quality related activities

performed before manufacturing starts. Includes identifying
customers, their needs, determining product features, design
process etc.
New-Product Review: New product before launching is to be
tested for reliability, performance evaluation through prototype
testing etc.
Process Control: Costs involved in determining the status of
the production process. Cost of collecting data, calculating
control limits, sampling plans, analyzing results, making
decisions.
Supplier Quality Evaluation: Costs of evaluating different
suppliers before selection, during contract and after selection.
Training: Cost of preparing and conducting quality related
training programs.

WHY to evaluate Quality

1. QUANTIFY THE SIZE OF QUALITY PROBLEMS
Costs?
To quantify the size of quality problems in terms of money. This

helps in improving the communication between middle

managers and upper managers. Some managers say, We
do not need to spend time to translate defects into rupees. We
realize that quality is important and we already know what the major
problem areas are. But typically when a study is done, the managers
are surprised by two results:

a. The quality costs are much higher than what managers

otherwise anticipate. In some industries, these are more than 20% of
the sales revenue.
a. The distribution of quality costs, confirm some known problem areas but
also generally reveal areas not previously recognized or thought of.
2. IDENTIFY MAJOR OPPORTUNITIES FOR COST REDUCTION
The quality costs are evaluated to identify the major opportunities for cost
reduction. When quality costs are evaluated, we see that there are
different segments, each traceable to some specific cause. These
segments are unequal in size, and a relatively few of the segments account
for bulk of the costs. Identification of these vital few segments is
very helpful in reducing quality costs .

Hidden Quality Costs

The Quality costs discussed earlier are called obvious quality costs. There are
some other quality costs not covered under the obvious costs (the four categories
discussed earlier). These costs are incurred because of the poor quality of
product or service and are called Hidden Quality Costs.
Potential Lost sales: Because of the poor quality of products, company can
lose orders in future or can loss its goodwill. The cost incurred by the company
because of the lost customers is a hidden cost called Potential Lost Sales.
One method to partially measure this cost is to determine the number of
booked orders cancelled and convert the orders into rupees. The cancellation
of the orders can be because of many reasons, but it is a reflection of less than
satisfactory performance.
Redesigning : The cost of redesigning a product if it was not working
satisfactorily with the original design.
Changing
Process: The cost incurred in changing the manufacturing
processes or redesigning them if the product is not meeting quality
requirements with the existing manufacturing processes.
Carrying and Storage Costs : The storage costs and the carrying costs in
handling the inventory of defective products (Space, Overtime). The cost of
carrying extra or obsolete inventory. All these costs are termed as Extra
Manufacturing Costs.
Incorrect Orders Supplied.