Chapter 3

Total Quality in
Organizations The
Management
& Control of
Quality, 7e
Dr. John V. Padua
1
Learning Objectives

At the end of this session, the students are all

expected to understand the following:

• The Systems and its importance

• Manufacturing Systems
• Quality in Different Areas
• Critical Quality Differences in Service and
Manufacturing

2
Key Idea

As consumer expectations have risen, a

focus on quality has permeated other key
sectors of the economy, most notably
health care, education, not-for-profits,
and government.

3
Systems

 A system is a set of functions or activities

within an organization that work together for
the aim of the organization.
 Subsystems of an organization are linked
together as internal customers and
suppliers.
 A systems perspective acknowledges the
importance of the interactions of
subsystems, not the actions of them
individually.
4
Manufacturing Systems (1 of 2)

 Marketing and sales

 Product design and engineering
 Purchasing and receiving
 Production planning and
scheduling
 Manufacturing and assembly
 Tool engineering
5
Manufacturing Systems (2 of
2)

 Industrial engineering and process

design
 Finished goods inspection and test

 Packaging, shipping, and

warehousing
 Installation and service

6
Key Idea

Traditional quality assurance systems in

manufacturing focus primarily on technical
issues such as equipment reliability,
inspection, defect measurement, and
process control.

7
Quality in Marketing

Marketing and sales personnel are

responsible for determining the needs
and expectations of consumers.

8
Quality in Product
Design

Product design and engineering functions

develop technical specifications for
products and production processes to
meet the requirements determined by the
marketing function.

9
Quality in Purchasing

A purchasing agent should not simply be

responsible for low-cost procurement, but
should maintain a clear focus on the
quality of purchased goods and materials.

10
Quality in Production
Planning & Scheduling

Poor quality often results from time

pressures caused by insufficient planning
and scheduling.

11
Quality in Manufacturing
and Assembly

Both technology and people are essential

to high-quality manufacturing.

12
Quality in Process
Design

Manufacturing processes must be

capable of producing output that meets
specifications consistently.

13
Quality in Finished Goods
Inspection and Testing

The purposes of final product inspection

are to judge the quality of manufacturing,
to discover and help to resolve production
problems that may arise, and to ensure
that no defective items reach the customer.

14
Quality in Installation and
Service

Service after the sale is one of the most

important factors in establishing customer
perception of quality and customer
loyalty.

15
Quality in Business
Support Functions for
Manufacturing
 Finance and accounting
 Quality assurance

 Legal services

16
Key Idea

Every manager is responsible for

studying and improving the quality of the
process for which he or she is
responsible; thus, every manager is a
quality manager.

17
Quality in Services

 Service is defined as “any primary or

complementary activity that does not
directly produce a physical product –
that is, the non-goods part of the
transaction between buyer (customer)
and seller (provider).”

18
Key Idea

The American Management Association

estimates that the average company
loses as many as 35 percent of its
customers each year, and that about two-
thirds of these are lost because of poor
customer service.

19
Critical Differences Between
Service and Manufacturing (1 of
2)

 Customer needs and performance

standards are more difficult to
identify and measure
 Services requires a higher degree of
customization
 Output is intangible

20
Critical Differences Between
Service and Manufacturing (2 of
2)

 Services are produced and consumed

simultaneously
 Customers are often involved in actual
process
 Services are more labor-intensive than
manufacturing
 Services handle large numbers of
transactions
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