ASSIGNMENT DRIVE SUMMER 2014

PROGRAM Bachelor of Business Administration- BBA

SEMESTER 3
SUBJECT CODE & NAME BBA303: QUALITY MANAGEMENT
BK ID B1597 CREDIT & MARKS 4 CREDITS & 60 MARKS

Q. No 1 Define the term Quality management. What are the dimensions of quality?
Differentiate between Quality Control and Quality Assurance.
(Definition of Quality management, Dimensions of quality, Difference between Quality Control and
Quality Assurance) 2+4+4=10
Answer: Definition of Quality management:
Quality management is defined as management activities and functions involved in determination
of quality policy and its implementation through means such as quality planning and quality
assurance (including quality control). It involves activities needed to maintain a desired level of
excellence. Quality management is focused not only on product/service quality, but also the means to
achieve it. This includes creating and implementing quality planning and assurance, as well as
quality control and quality improvement. It also includes control of processes as well as products to
achieve more consistent quality.
Dimensions of quality:
Research work has suggested that customers are heavily influenced by different dimensions in
determining quality level of a product or services. In fact, quality symbolises many aspects of what a
customer perceives and wants. The definition of quality often becomes a debatable issue. The most
fundamental definition of a quality product is one that fulfills or exceeds expectation of the customer.
But it proves to be a bit inadequate to be considered all the time. Thus, to frame a comprehensive
meaning of quality, we may consider few significant dimensions as mentioned below.

Difference between Quality Control and Quality Assurance:

Comparison between QC and QA
Quality Control

Quality Assurance

Traditional approach

Modern approach

Designed to evaluate a developed Designed to ensure that a system will

work product
meet its objectives
Product-oriented

Process-oriented

Makes sure that the results of

Makes sure that you are doing the

what
you have done are what you
expected

right
thing, the right way

An inspection function

An audit function

Involves department (QC)

Involves everyone

Appraisal cost is very high as we Appraisal cost does not increase too
approach high level of quality
high even at high level of quality
Quality is an accident

Quality is a quest

Quality is inconsistent

Quality is consistent

Lower quality level is achieved

Higher quality level is achieved

Quality level is static

Quality continuously improves

An organisational initiative

A global initiative

Q.2:Differentiate between Mission and Vision Statements. Write a brief note on

quality objectives
a) Difference between Mission and Vision Statements
b) Quality Objectives
ANS:
a) Difference between Mission and Vision Statements:
Vision defines the way an organisation or enterprise looks into its future. Vision is a long-term
outlook that describes how the organisation would like to view itself in the competitive world in
which it operates. A vision statement outlines what the organisation wants to be in the future. It is a
major source of inspiration for the organisation. Mission defines the fundamental purpose of an
organisation or an enterprise, describing why it exists and what it does to achieve its vision. A
mission statement tells us the fundamental purpose of the organisation. It also defines the critical
processes of the organisation and informs us of the expected level of performance. An example of
vision and mission is that of World Health Organisation (WHO). WHO can adopt the vision of
having a healthy world. Many people mistake the vision statement for the mission statement. A
vision statement defines the purpose or broader goal for being in existence or for being in the
business. A mission statement is more specific to how the enterprise can achieve the objectives of
organisation.
b) Quality Objectives:

Quality objectives are the practical outline of the quality policy. It is a quality oriented goal. A quality
objective is something that an organisation aims for or tries to achieve. Quality objectives are an
expression of meeting certain requirements like zero defects for a certain product or a response-time
below a specified limit for a certain service. ISO 9000:2000 defines quality objectives as something
sought or aimed for, related to quality. Quality objectives are generally derived from an
organization's quality policy. The objectives must be consistent with the quality policy. They are
usually formulated at all relevant levels for all relevant functions within the organisation.ISO
9001:2008 requires that quality objectives should be established at each relevant function and level
within the organisation (i.e., everywhere in the organisation). The manner in which quality objectives
are established and managed will have an enormous impact on the organization's overall
performance. The quality objectives will either drive strategic improvements throughout the
organisation or they will simply become a meaningless exercise in data collection. Thus, it all
depends on how the task is carried out in the organisation.

3 Explain the following:

a) Kaizen
b) Benchmarking and its importance 5+5=10
Answer: a) Kaizen:
Kaizen is a Japanese word meaning improvement or change for the better. It, refers to the beliefs or
practices that focus on the continuous improvement of various processes. The word Kai refers to
change, and the word Zen means good. Kaizen, also sometimes referred to as continuous
improvement process, is defined as a guiding principle that introduces small and minute changes in
an operating business in order to enhance the importance and competence of the process. This
approach assumes that human resources are paramount for organizational enhancement and
improvement because they visualize the processes in action all the time. Few salient features of
Kaizen philosophy:

Kaizen focuses on identifying problems at their source, solving them at their source, and

changing standards to ensure the problems stay solved.

Improvements are based on many small changes, rather than a radical change that might

arise from research and development.

Kaizen is highly team based and cross functional.
As a few ideas originate from workers as well, they are less likely to be radically different, and
therefore easier to implement.

Small improvements are less likely to require major capital investment than major process

changes.
All employees will continue to seek ways to improve their own performance.

b) Benchmarking
A benchmark is a point of reference against which something is measured. Benchmarking is defined
as measuring performance against that of best-in class companies, determining how the best-inclass achieve those performance levels and using the information as a basis for our own companys
targets, strategies and implementation. Benchmarking is the search for industries best practices
that lead to superior performance.
According to D. T. Kearns of Xerox, benchmarking is the continuous process of measuring our
products, services and business practices against the toughest competitors or those companies
recognised as industry leaders.
Benchmarking is the process of setting goals by looking into competitors and finding out ways of
achieving these goals by improving the process. To do this, managers have to play a significant and
active role. They have to compare their companys performance with that of their competitors and
try to find out why their performance differs from that of their competitors. This will help them to
find different ways of improving their performance. Hence, benchmarking cannot be restricted to
only the end product. Rather, it can be applied to each and every aspect of business.
Importance of Benchmarking:
Following are some of the reasons why organisations need to benchmark themselves:
a) It is a technique to achieve business and competitive objectives by reducing weaknesses and
developing strengths.
b) Benchmarking calls for an external orientation. By doing this, the chances of being caught
unaware by the competition are greatly reduced as the organisation is able to predict its competitors
moves.
c) Benchmarking helps in developing best practices of an industry.
d) Benchmarking is time and cost efficient because the process involves adaptation rather than pure
invention. Hence, time and money are saved.
e) Benchmarking helps in developing healthy competition.
f) Benchmarking also helps an organisation to identify whether they have fallen behind in
competition or have they been able to take advantage of any technological developments that may
take place elsewhere in the industry.
g) Benchmarking enhances innovation by requiring its practitioners to continuously scan the
external environment to use the information obtained to improve the processes.

4 What is meant by Customer Focus? Describe in brief the concept of Customer

satisfaction and Customer delight.
(Meaning of Customer Focus, Concept of Customer satisfaction and Customer delight) 4+6
Answer: Meaning of Customer Focus:
Traditionally, the word customer is used to define those people external to the organisation who
purchase the organization's product. Today, however, the word customer is used more broadly and
includes even the people working in the organisation. A customer is any individual or group of
individuals who receives the companys products or services either directly or through a series of
intermediaries. The customer can be the final consumer or the one who buys for others use Focus
means concentration of energy. When someone focuses completely on a particular goal, that person
will soon achieve that goal. Similarly, for organizations too, focus provides the capability to bring
together their divergent energies by concentrating them towards the single-minded achievement of
desired goals. Thus, focus gives an organisation the powers not only to perform well, but also to
excel. For organizations, such focus should only be on the customer.
Customer Satisfaction and Customer Delight
Customer satisfaction is an outcome of three forces. They are:
Company processes
Company employees
Customer expectations
Company operational processes are important because product quality and performance are entirely
determined by these processes. Thus, a very definite product with consistent quality emerges when
KFC sells chicken to its customer. This happens because KFC has realised that quality is not what
they test in a product, but is what they build into it through validated operational processes.
Company employees who serve/deliver the product play a vital role in ensuring customer
satisfaction. None of us would like to be served an excellent meal of KFC chicken by a nasty, rude,
and quarrelsome employee. KFC, therefore, ensures a very definite behavioural pattern from its
employees through scientific recruitment and precise training programmes. Customer expectations
may be high or low. This has a strong bearing on customer satisfaction. If expectations are low, it is
rather easy to achieve customer satisfaction through modest products and modest services. But for a
customer with high expectations, the serving organisations need to put in the best possible.

Customer expectations are important because an organisations failure in meeting them means a
dissatisfied customer. The only option the organisation has is to provide consistent satisfaction to the
customer through optimum-level performance.
It is important to meet customer expectations and to ensure customer satisfaction because: (i)
satisfied customers bring more business directly or indirectly and (ii) a dissatisfied customer not
only stops buying an organisations product, but also dissuades others from buying the same.
This is particularly detrimental to the organisation because customers voice has been identified as
the most credible and convincing communication for other customers. If a company says something
and a customer says the opposite, prospective customers will act according to the opinion of the
customer.
Customer delight, as has been already mentioned, is an outcome of a situation when product
performance exceeds customer expectations. This is linked to the type of customer. Type A
customers have expectations of added value. When expectations are met, they achieve normal
expectations. If expectations are not met, they are dissatisfied. Type B customers, on other hand,
have no expectation of value addition. If value addition is not made, they are satisfied, but if value
addition is made, they are delighted.

5 Write Short notes on the following:

a) Cost of Quality
b) Productivity 5+5=10
Answer: a) cost of quality:
Cost of quality is defined as the expenditure incurred by the producer to achieve a particular level of
quality. It has been modified, and today it is defined as the expenditure incurred by the producer,
user, and community to achieve a particular level of quality. It is an important concept because
managers, before making any decision related to quality, must have clear understanding of the
implications of the decisions on cost. Quality cost details are also important for the following
reasons:

It is an important input while making capital budgeting and other investment decisions.
It helps in identifying outmoded systems.
It facilitates evaluation of profit-making opportunities.
It assists in establishing budgetary and profit planning objectives.
It ascertains overhead wastes related to activities not needed by the customer.

It supports objectivity of performance appraisal mechanisms.

Categories of Cost of Quality

The costs of quality include:

Failure costs
Appraisal costs
Prevention costs
Hidden costs

A) Failure costs
These costs are an outcome of the manufacturing and usage of products, which fail on quality
requirements. There are two types of failure costs: internal and external.
B) Appraisal costs
These are costs associated with routine quality control and information systems designed to provide
managerial control through measurement, evaluation, and audits of existing levels of quality of
manufactured components, products, and purchased raw material. Thus, the appraisal costs of
quality are defined to include all costs incurred in the planned conduct of product or service
appraisals to determine compliance to requirements.
C) Prevention costs
These costs arise while preventing bad quality in goods or services. Thus, prevention cost includes
the cost of all activities designed for the purpose of preventing occurrence or re-occurrence of
failures in products and services.

b) Meaning of productivity:
Productivity is the key survival component for any organisation. Productivity is perhaps the most
important variable in a national economy. It is the primary controllable feature in wealth production.
Since other economic variables are derived from it, enhancing productivity has a favorable
multiplying effect on other economic variables. Productivity has increased in the long run almost all
over the world. In rich countries, GDP went up mainly through productivity increase. Countries
having a low productivity increase are the poorest too. Productivity is measured as follows:

Productivity is useful as an objective concept. It is possible to make meaningful comparisons

between various individuals, industries, organizations, states, and countries. Productivity is useful as
a scientific concept also. It can be rationally defined, as well as empirically observed. Since it can be
measured in quantitative terms, it can be utilized as a variable. From it emerges that productivity can
be defined and measured in absolute terms, as well as relative terms.

Explanation of productivity factors:

Some of the factors and their corresponding productivity are as follows:

Land (Land Productivity): This is the most useful measure for evaluating agricultural
produce. Thus, if 5,000 kg of wheat is produced on one hectare of land in Punjab, and 3,500
kg of wheat is produced on one hectare of land in Madhya Pradesh, the productivity in

Punjab is 143 percent that of Madhya Pradesh.

Space (Space productivity): In regions where space costs are phenomenally high, space
productivity is an important measure. Stores and retails shops in expensive localities are

good examples.
Labor (Labor productivity): This is one of the most common productivity measures. This
is particularly useful in situations where labor cost is high. Software companies determine

productivity primarily on this basis.

Material (Material productivity): Organizations having high cost of material, such as in
the sugar, cement, and steel industry, finding material productivity a more appropriate

measure.
Capital (Capital productivity): Organizations that are capital intensive benefit more by

measuring capital productivity.

Machine (Machine productivity): Organizations that primarily dependent on expensive

machines utilize production per machine as a better tool to compare their productivity.
Overhead (Overhead Productivity): Organizations that primarily have office work, such
as government offices measure overhead productivity.

6 Define Quality Management System. Explain Quality Management Principles

(Definition of Quality Management System, Quality management principles) 2+8=10
Answer: Quality Management System
Quality Management Systems (QMS) provide a broad framework for organisations to implement
quality management within the organisation. The primary aim of quality management systems is to
ensure quality within an organisation in the most efficient and cost effective manner.
QMS in the simplest of terms is defined as:
The Quality Management System is the process of management of the system of an organization,
with regards to its Quality related activities, for meeting and enhancing customer satisfaction and
also taking care of all other interested parties such as legislative & regulatory bodies, shareholders,
suppliers, employees, etc.

Quality Management Principles:

1. Customer focused organisation
The ISO 9001:2008 standard lays great importance upon understanding the needs of the customers
i.e., customer requirements. Products and services must be designed and built around customer
needs. To become a customer centric organisation, businesses must adopt the following practices:
Identify customer needs
Design a product that meets those needs
Produce and deliver the product as per the design
Enhance after sales service and handle customer complaints quickly
Measure customer satisfaction
Improve quality to exceed customer expectations
2. Leadership
The ISO 9001 standard stresses that management support and participation is critical to ensure the
success of the quality management system. The standard specifies and highlights numerous tasks
and responsibilities of the management, such as creating a customer centric organisation,
communicating the importance of quality and driving quality initiatives within the entire
organisation. In the process the management must ensure employee participation and involvement.
3. Involvement of people
The ISO standard takes a broad view of quality management. It is viewed as enterprise wide initiative
and hence requires the participation and involvement of employees from all level i.e., top senior
management to frontline workers. Developing a participative work environment requires creating a
work culture focused on human resource development i.e., instituting employee education programs,
encourage team work, upgrading the skills, expertise and knowledge of the employees etc.
4. Process Approach
The ISO standard stresses that organisations should adopt process approach to management.
Process centric approach ensures the following on the part of the organisation.
Organisations will develop activities to attain objectives
These activities will be delegated to individuals and groups. It ensures clear responsibility and
delegation of activities.
These activities must be monitored and measured by the respective individuals.
Organisations will gradually come to adopt practices to ensure optimal performance of these
activities. They will improve methods, resource allocation and materials in carrying out these
processes.

 Organisations will assess the impact of these processes or activities on other stakeholders. They
will start adopting an enterprise wide view and assessment of processes resulting in improved value
chain of the organisation.
5. Systems approach to management
Organisations must view interrelated processes as a system. Such approach will enable an
organisation to organise and manage itself more effectively. It enables an organisation to evaluate
processes and integrate them in the best way to attain objectives. It enables them to identify key
processes and thereby improve it.
6. Continuous improvement
The essence of quality management is continuous improvement of its processes, products and
services, ultimately resulting in higher business and customer value. The ISO standard stresses that
organisations must be committed to continuous improvement and must develop and initiate
continuous improvement programs within the organisation.
7. Factual approach to decision making
The ISO 9001 standard like other quality control techniques places value on data and informed
decision making based on the analysis of data. It stresses that an organisation must collect data from
its performance. This data collection can take the form of records.
Factual approach to decision making enables better comparison and understanding of prior
decisions.
8. Mutually beneficial supplier relationship
Quality management requires that organisations extend quality management concepts and ideas to
include the external stakeholders i.e., suppliers, vendors, contractors, customers etc. Some of the
benefits resulting from such practices are lower costs, better product design, improved use of raw
materials, less wastage, reduced cycle time etc. This is viewed as critical to the success of the quality
management system as a whole.