Chapter 9: Management of

Quality
Quality
-

The ability of a product or

service to consistently meet or
exceed customer expectations

Dimensions of Product Quality

1. Performance
o Everything is working
o Basic operating
characteristics of products
and services
2. Features
o Extra items added to basic
features
o E.g. Convenience, hightech
3. Reliability
o Probability product will
operate over time
o Consistency of
performance
4. Durability
o Life span before
replacement
5. Serviceability
o Handling complaints
o Ease of getting repairs and
speed and competence of
repairs
6. Aesthetics
o Design, appearance
o Look, feel, sound, smell,
taste
7. Safety
o Free from injury or harm
8. Other perceptions
- Subjective perceptions
- Reputation

Dimensions of Service Quality

1. Time & timeliness
o Customer waiting time,
completed on time
2. Completeness
o Customers get what they
asked for
3. Courtesy
o Treatment to customers by
employees
4. Consistency
o Same level of service for
customers
5. Accessibility and convenience
o Ease of obtaining service
o Availability of service
6. Accuracy
- Performed right every time
7. Responsiveness
- Reactions to unusual situations
- Helping in unusual situations
8. Tangibles
- Physical appearance of facilities,
equipment, personnel
*Dimensions must be specific,
measurable
Dimensions of Web Quality
1. Ease of use
2. Clarity of information and
instructions
3. Service reliability
4. Speed of page loading
5. Transaction time
6. Aesthetics
7. Privacy and security
8. Domain name
9. Human backup
10.
Transaction reliability

Responsibility for Quality

-

Top management
o Ultimate responsibility for
quality
Design
o Attention to processes
required to deliver services
Procurement
o Obtaining goods and
services detract from
quality
Quality assurance
o Gather problems and solve
Customer service
Production/ operations
o Ensure processes yield
products and services
Marketing/ sales
o Determine customer needs
Packaging/ shipping

Consequences of Poor Quality

-

Loss of business
o Damage reputation
o Lead to decreased share of
market/ increased criticism
Liability
o Due to damages resulting
from faulty design/ poor
workmanship
o Written warranties
guarantee the product safe
Productivity
o If parts are defective and
have to be reworked
o Lead to injuries and
defective output
Costs
o Cheaper cost, earlier
problem is identified

Costs of Quality
1. Appraisal costs
- Inspection, testing, and other
activities to uncover defective
products or services
- Cost of inspectors, testing, test
equipment, labs, quality audits,
and field testing
- Evaluating products and parts
2. Prevention costs
- Reducing potential for defects
- Costs: Planning and
administration systems, working
with vendors, training, quality
control, and extra attention in
design and production phases
3. Failure costs
- Incurred by defective parts
- Internal failure/cost
o During production process
o Rework costs, problem
solving, production losses
scrap
- External failures/cost
o After delivery to the
customer
o Warranty costs, returned
goods, reworking costs
Quality Awards and Certifications
1. Malcolm Baldridge Award
- Administered by National
Institute of Standards and
Technology
- Stimulate efforts to improve
quality, to recognize
achievements, and to publicize
successful programs
- Focuses on customer
satisfaction
2. The Deming Prize

Japans highly coveted award

and recognizing successful
quality efforts
To any company that meets the
awards standards
Focuses on statistical quality
control

Quality Certification
-

ISO (International Organization

for Standardization) promotes
worldwide standards for
improvement of quality,
productivity and operating
efficiency through standards and
guidelines
ISO 9000 and 14000 relate to
organizations processes
ISO 9000
o International in scope
o Certification required by
many foreign firms
o Quality management
o What an organization does
to ensure products or
services conform to
customer requirements
o ISO 9001 suppliers &
designers
o ISO 9002 production
o ISO 9003 inspection &
test
o ISO 9004 quality
management
ISO 14000
o What an organization does
to minimize harmful effects
to the environment caused
by its operations
o CORE ELEMENTS:
Environmental
management

Auditing
Performance
evaluation
Labeling
Life cycle assessment

Total Quality Management

-

Quest for quality in an

organization
Philosophy that involves
everyone in an organization in a
continual effort to improve
quality and achieve customer
satisfaction
Looking at the quality of every
ASPECT of the process

Three key philosophies

1. Continuous improvement
2. Involvement of everyone in the
organization
3. Customer satisfaction
Other elements of TQM
1. Kaizen/ continuous improvement
- Improve all factors related to
converting inputs to outputs
- Involves all operations and work
systems including suppliers and
customers
- People, equipment, materials,
procedures
2. Benchmarking
- Identifying organizations best at
something and studying how
they do it to improve
3. Employee empowerment
- Workers have responsibility for
improvements and authority to
make changes
4. Team Approach

5.
6.
7.
-

8.
-

Use of teams for problem solving

and achieving consensus
Decisions based on facts rather
than opinions
Management gathers and
analyzes data
Knowledge of tools
Suppliers and Supplier quality
Suppliers must be included in
quality assurance and quality
improvement efforts
Champion
Promote value and importance
of TQM in company

9. Quality at the Source

- Philosophy of making each
worker responsible for the
quality of his work
Six Sigma
-

Statistical definition: Process

that has no more than 3.4
defects per million opportunities
Program designed to reduce
defects, lower costs, and
improve customer satisfaction