Lesson 8 - CAPM - Prep - Quality Management - V2 PDF

CAPM® Certification
Lesson 8—Project Quality Management
CAPM® & PMBOK® are registered trademarks of the Project Management Institute, Inc. Copyright 2014, Simplilearn, All rights reserved.
1 Copyright 2014, Simplilearn, All rights reserved.

Objectives
After completing this ● Define quality and quality management

lesson, you will be able ● Differentiate between quality planning, quality assurance and quality control
to:
● Explain cost of quality and its categories
● Describe the Project Quality Management processes
● Explain the seven basic tools of quality
● Explain Six Sigma

Project Management Process Map

Quality
In a project, meeting the quality expectation is the responsibility of not only the project manager, but everyone
involved.
The definition of quality is as follows:
Quality is the degree to which a set of inherent characteristics fulfills requirements.[1]
A project is said to meet quality expectations, when all the project requirements agreed in the beginning of the project
are met, and the resulting product is usable.

Quality Related Terms
The following terms are related to the concept of quality:
Customer
Conformance to requirements and fitness for use.
Satisfaction
Grade Classification based on technical characteristics.
Precision Granularity of measurement; how fine the outcome can be measured.
Accuracy Correctness; being close to the desired value.

Optimal Level of Quality
Achieving quality involves cost. Increased efforts and costs can increase the quality of output. But, a ceiling on this
investment has to be fixed.
● The investment on quality is determined by identifying the

optimal level of quality of a project.
● Optimal level of quality is achieved when the incremental cost
Optimal level
of achieving the quality is equal to the incremental revenue
from such improvements.
The sales of a toy manufacturer is at an all time low because of poor quality. To improve the quality,
investments are made on identifying demand, sharing samples, and collecting feedback. Following this,
parents are enticed to buy the product. However, the additional investment may increase the cost of
the toy, making it prohibitive for the parents to buy. Optimal level of quality is reached at a point where
the toy manufacturer gets the maximum number of buyers for the toys manufactured.

Quality Management
Quality management includes creating and following policies and procedures that meet the project’s defined quality
needs. This is to ensure that the specified approach to quality is implemented on the project. The three key activities of
quality management are as follows:
Quality
Quality related activities of the project are planned.
Planning
Quality Quality assurance is carried out to ensure the process is carried out as per the
Assurance quality management plan.
Quality
Periodic checks are conducted to ensure quality improvements.
Control

Quality Planning vs. Quality Assurance vs. Quality Control
The differences between quality planning, quality assurance and quality control are as follows:
A project was planned to be completed within plus or minus 10 percent of the budget. Three months back, the project was over
budget by 20 percent. The most recent measurement done one day back shows the budget overrun by 15 percent.
Since there is an improvement of 5 percent, it is quite likely that over next 3 months the cost would reduce and the project could
get completed within the planned limit. If the cost does not decrease, but increases further, corrective and preventive actions
have to be taken to bring the project within the agreed limits. This is quality control.
Quality Management Concepts
Following concepts are often used in quality management:
Total Quality Management (TQM) Kaizen (change for better)
An integrated management A philosophy that looks for small

philosophy around quality and and continuous improvements in
continuous improvement. the process.
Deming Cycle Kanban

( Plan – Do – Check – Act)
A pull-based inventory
A framework for process control management system based on the
and improvement. principle of just-in-time (JIT).

Cost of Quality
Cost of quality includes all costs incurred over the life of the product by investment in preventing non-conformance to
requirements and ensuring that the product conforms to requirements.[2]
Cost of quality can be categorized as follows:
Concept based questions on cost of quality can be expected in the exam.

Exam Tips
Project Quality Management Processes
Given below are the Project Quality Management processes:

Plan Quality Management
Plan Quality Management is the process of identifying quality requirements or standards for the project or product,
and documenting how the project will demonstrate compliance. [3] It is part of the Planning Process Group.
Aim of this process is to identify the standards and determine the work to be done to meet these standards.
An understanding of planning quality management may be useful while answering the exam.
Exam Tips
Perform Quality Assurance
Perform Quality Assurance is the process of auditing the quality requirements and the results from quality control
measures, to ensure that appropriate quality standards and operational definitions are used. [4] It is part of the
Executing Process Group.
Understanding characteristics of quality assurance tools and techniques may be useful while
answering the exam.
Exam Tips
Control Quality
Control Quality is the process of monitoring and recording results of executing the quality activities to assess
performance and recommend necessary changes. [5] It is part of the Monitoring and Controlling Process Group.
PROJECT QUALITY MANAGEMENT Verified deliverables

Deliverables
Validated changes
Work performance data Quality metrics Quality checklists
Work performance
information
Project management plan
Control Quality Change requests
Approved change
requests
Organizational process
Project documents assets updates
Project management plan
Organizational process Quality control
updates
assets measurements
Project documents
updates
Legend
Input Seven basic quality Statistical sampling Inspection
Output tools
Tools & Techniques Approved change
Monitoring & Controlling requests review

Business Scenario—Problem Statement
Q You wrapped up a project 4 months ago that produced parts for an automotive company’s special
initiative. Managing the project went well because your parts consistently met your quality metrics,
fitness for use tests and passed all control charts. There was no indication of issues with quality and
grade that would prompt a need for change. Part of your shipping process is to conduct a quick
inspection and test of a sample of parts prior to shipping to the customer to ensure there are no
issues. Unfortunately, the last shipment does not pass the test and the results could be a safety issue
to the customer and their final customer. What should you do?

Business Scenario—Solution
A Although you are no longer working on the project, you are still responsible for the outcome of the
project to the stakeholders. Therefore, the first thing to do is to meet with the sponsor of the
project so the customer can be informed. In an attempt to minimize non-conformance costs and its
impact, a recall of all parts needs to be executed. Then the team needs to be reassembled to
evaluate the failed test and find out the root cause of the failure and then its effect by using the
fishbone diagram. This will help the team determine how to move forward in terms of corrective
action.

Seven Basic Quality Tools
The seven basic quality control tools are as follows:
Seven Basic Quality Tools Dashboard
Cause and Effect Histogram

Control Charts Flowcharting
Diagram
Pareto Diagram Check Sheets Scatter Diagram

Control Charts
Control chart helps to determine if the process is within

acceptable limit.
● They are useful to monitor project performance in
2
terms of cost, schedule or variance.
3
● Upper and lower control limits have to be set and the
1
actual schedule variation over time has to be plotted.
● If the values are within the control limits, the project is
4
on track.
● If the schedule variance goes out of these limits,
project is out of control and investigations and Control Chart
corrective actions need to be done.

Cause and Effect Diagram
Cause and effect diagram is also called the fishbone

or Ishikawa diagram.
● It is used in both quality planning and quality
control tool.
● It is used to organize thoughts or ideas and also
to identify root cause of a problem.
● To draw fishbone diagram, first identify the
broad level reasons and then try to find specific
reasons under each category.
Fishbone Diagram
Practice Cause and effect diagram for various business scenarios. This will be useful while answering
Cause and effect diagram based questions.
Exam Tips
Flowcharting
Flowcharts are graphical representations that show how a process or system flows from beginning to end, and how the
elements interrelate.
● They represent the process and help analyze where the problems occur.
● Flowcharts are also used to identify redundancies and bottlenecks.
Customer

Histogram
Histogram is a vertical bar chart showing the

frequency of occurrence of a particular variable.
The height of each column represents the relative

frequency of the variable.
Histogram

Pareto Diagram
Pareto diagrams are vertical bar charts that identify the

critical few from the uncritical many.
● It is based on the 80/20 rule. 80 percent of the
problems are caused by 20 percent reasons.
● It helps focus attention on the most critical issues.
● It prioritizes potential causes of the problem.
Pareto Diagram

Check Sheets
Check sheets, also known as tally sheets, are checklists

Defect Frequency of Issues (Tally)
used for collecting data. Descri
ption Process Process Process Process Total
● It ensures that the relevant data or relevant steps of a 1 2 3 4
process are captured and executed. Defect |||| | ||| |||| 13
1
● It is also useful during inspections.
Defect || ||| || |||| 11
2
Defect || ||| || || 9
3
Defect ||| || |||| ||| 12
4
Total 11 9 11 14 45
Check Sheet

Scatter Diagram
Scatter diagram tracks two variables to see if they are

correlated or have no relationship.
If the two variables are related, scatter diagrams are used

to observe the changes in one variable due to a change in
the other.

Six Sigma
The concept of Six Sigma is used to produce near defect free products
and services consistently.
● If large volume of data is plotted, the graph takes form of a bell
curve and such distribution is called normal distribution.
● The line corresponding to the top of the bell curve is the median of
the data sample.
● Standard deviation or Sigma is used to measure how far the data is
from the mean.
● One Sigma above and below the mean covers 68% data.
● At Six Sigma, the distribution covers 99.99966% of the data.

Six Sigma
A tire manufacturing company produces 100,000 units per day. Generally, random samples of these units
are verified to ensure they are defect free.
Thickness of the tires is a parameter to measure defects. A tire with thickness more or less than 10mm is
considered to be defective. If the actual thickness of all the 100,000 tires are plotted on a graph, normal
distribution or bell curve is obtained.
One standard deviation from the mean covers 68% of the data, i.e., 68,000 tires lie within one standard
deviation of the mean. If the company operates at Six Sigma level, there would be only three defects out
of a million tires manufactured as 99.999966% of the data would be covered.

Quiz

QUIZ
Which of the following tools and techniques is most likely used in quality assurance?
1
a. Fishbone diagram
b. Flowchart
c. Inspection
d. Process analysis

QUIZ
Which of the following tools and techniques is most likely used in quality assurance?
1
a. Fishbone diagram
b. Flowchart
c. Inspection
d. Process analysis
Answer: d.
Explanation: Inspection is a quality control tool. Flowchart and Fishbone diagrams are part of the seven
basic quality tools which are tools and techniques used for planning and control. Process analysis is used in
quality assurance, which focuses on the process rather than the product.

QUIZ The management wants to ensure that a project is following defined quality standards. Which of the
2 following should be used by the management?
a. Risk management plan
b. Work Breakdown Structure (WBS)

c. Statement of work
d. Quality audit

QUIZ The management wants to ensure that a project is following defined quality standards. Which of the
2 following should be used by the management?
a. Risk management plan
b. Work Breakdown Structure (WBS)

c. Statement of work
d. Quality audit
Answer: d.
Explanation: A quality audit periodically reviews quality management activities and assures that the project
deliverables meet the expected quality standards.

QUIZ
As a project manager, which would you give the highest priority: quality, cost, or schedule?
3
a. It would depend upon the prevailing circumstances of the project.
b. Quality is most important. Cost and schedule comes later.

c. Cost is most important. Everything else comes after.
d. Completing the project on schedule is most important.

QUIZ
As a project manager, which would you give the highest priority: quality, cost, or schedule?
3
a. It would depend upon the prevailing circumstances of the project.
b. Quality is most important. Cost and schedule comes later.

c. Cost is most important. Everything else comes after.
d. Completing the project on schedule is most important.
Answer: a.
Explanation: Since quality, cost, and schedule are part of the project constraints, they are equally
important. However, depending on the specific circumstances of the project, one may take precedence over
the others.

QUIZ A project manager is encountering numerous problems on his project. He wants to identify the root
causes of the problems so he can focus his attention on those causes. Which of the following tools
4 should he use?
a. Fishbone diagram
b. Control chart
c. Pareto diagram
d. Histogram

QUIZ A project manager is encountering numerous problems on his project. He wants to identify the root
causes of the problems so he can focus his attention on those causes. Which of the following tools
4 should he use?
a. Fishbone diagram
b. Control chart
c. Pareto diagram
d. Histogram
Answer: a.
Explanation: Fishbone diagram tool specifically helps in understanding the root cause of the problems.

QUIZ As a project manager, you are ensuring that quality standards are followed on your project. In which
5 process are the quality standards identified?
a. Develop Project Charter
b. Collect Requirements
c. Plan Quality Management
d. Perform Quality Assurance

QUIZ As a project manager, you are ensuring that quality standards are followed on your project. In which
5 process are the quality standards identified?
a. Develop Project Charter
b. Collect Requirements
c. Plan Quality Management
d. Perform Quality Assurance
Answer: c.
Explanation: Plan Quality Management defines what quality standards should be chosen for the project
and how to satisfy them.

QUIZ
Which of the following is an example of cost of conformance?
6
a. Quality Training
b. Cost of rework
c. Warranty cost
d. Scrap

QUIZ
Which of the following is an example of cost of conformance?
6
a. Quality Training
b. Cost of rework
c. Warranty cost
d. Scrap
Answer: a.
Explanation: Training helps to increase productivity and reduces the probability of errors occurring, i.e.,
helps in prevention. Hence, it can be classified as the cost of conformance.

Summary
Here is a quick recap of ● A project is said to meet quality expectations, when all the project requirements agreed
what was covered in in the beginning of the project are met, and the resulting product is usable
this lesson:
● Quality management includes creating and following policies and procedures that meet
the project’s defined quality needs
● Quality planning defines the standards, templates, policies, and procedures; quality
assurance determines if the project is complying with the policies and procedures;
quality control measures specific project results against standards
● Plan Quality Management, Perform Quality Assurance, and Control Quality are the three
Project Quality Management processes
● Seven basic quality tools are used to plan and achieve the desired levels of quality
● At Six Sigma level, there would be only three defects out of a million units manufactured

Thank You
CAPM® & PMBOK® are registered trademarks of the Project Management Institute, Inc. Copyright 2014, Simplilearn, All rights reserved.

References
[1] Definitions taken from the Glossary of the Project Management Institute, A Guide to the Project Management Body
of Knowledge, (PMBOK® Guide) – Fifth Edition, Project Management Institute, Inc., 2013.
[2] Adapted from Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK®
Guide) – Fifth Edition, Project Management Institute, Inc., 2013, Page 235.
[3] Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK® Guide) – Fifth
Edition, Project Management Institute, Inc., 2013, Page 231.

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CAPM® Certification

Lesson 8—Project Quality Management

1 Copyright 2014, Simplilearn, All rights reserved.

After completing this ● Define quality and quality management

2 Copyright 2014, Simplilearn, All rights reserved.

3 Copyright 2014, Simplilearn, All rights reserved.

The definition of quality is as follows:

Quality is the degree to which a set of inherent characteristics fulfills requirements.[1]

4 Copyright 2014, Simplilearn, All rights reserved.

The following terms are related to the concept of quality:

Grade Classification based on technical characteristics.

Precision Granularity of measurement; how fine the outcome can be measured.

Accuracy Correctness; being close to the desired value.

5 Copyright 2014, Simplilearn, All rights reserved.

● The investment on quality is determined by identifying the

6 Copyright 2014, Simplilearn, All rights reserved.

7 Copyright 2014, Simplilearn, All rights reserved.

Following concepts are often used in quality management:

Total Quality Management (TQM) Kaizen (change for better)

An integrated management A philosophy that looks for small

Deming Cycle Kanban

9 Copyright 2014, Simplilearn, All rights reserved.

Cost of quality can be categorized as follows:

Concept based questions on cost of quality can be expected in the exam.

Given below are the Project Quality Management processes:

11 Copyright 2014, Simplilearn, All rights reserved.

PROJECT QUALITY MANAGEMENT Verified deliverables

14 Copyright 2014, Simplilearn, All rights reserved.

15 Copyright 2014, Simplilearn, All rights reserved.

16 Copyright 2014, Simplilearn, All rights reserved.

The seven basic quality control tools are as follows:

Seven Basic Quality Tools Dashboard

Cause and Effect Histogram

Pareto Diagram Check Sheets Scatter Diagram

17 Copyright 2014, Simplilearn, All rights reserved.

Control chart helps to determine if the process is within

18 Copyright 2014, Simplilearn, All rights reserved.

Cause and effect diagram is also called the fishbone

20 Copyright 2014, Simplilearn, All rights reserved.

Histogram is a vertical bar chart showing the

The height of each column represents the relative

21 Copyright 2014, Simplilearn, All rights reserved.

Pareto diagrams are vertical bar charts that identify the

22 Copyright 2014, Simplilearn, All rights reserved.

Check sheets, also known as tally sheets, are checklists

23 Copyright 2014, Simplilearn, All rights reserved.

Scatter diagram tracks two variables to see if they are

If the two variables are related, scatter diagrams are used

24 Copyright 2014, Simplilearn, All rights reserved.

25 Copyright 2014, Simplilearn, All rights reserved.

26 Copyright 2014, Simplilearn, All rights reserved.

27 Copyright 2014, Simplilearn, All rights reserved.

28 Copyright 2014, Simplilearn, All rights reserved.

29 Copyright 2014, Simplilearn, All rights reserved.

a. Risk management plan

b. Work Breakdown Structure (WBS)

30 Copyright 2014, Simplilearn, All rights reserved.

a. Risk management plan

b. Work Breakdown Structure (WBS)

31 Copyright 2014, Simplilearn, All rights reserved.

a. It would depend upon the prevailing circumstances of the project.

b. Quality is most important. Cost and schedule comes later.

d. Completing the project on schedule is most important.