OPERATION, PRODUCTION &

MATERIAL MANAGEMENT
 LEADERS OF THE QUALITY
MOVEMENT
 BY
 PHILLIP CROSBY

 Presentation by
 Kaustubh Chaphalkar
 Section- “A”
 Introduction Phillip Crosby

 Introduced the Zero Defects program at

Martin-Marietta in the early 1970s
 Published Quality Is Free in 1979 after
fourteen years as a vice president at
International Telephone & Telegraph
(ITT)
 Started the management consulting
group Philip Crosby Associates, Inc.
(PCA) in 1979
 TOPIC TO BE DISCUSS

Ø Quality Concepts.
Ø Quality Management Maturity Grid
Ø Fourteen-Step Quality Improvement
Program
Ø Real-Life Example
 What does “quality is free” mean?

vA quality program can save a

company more money than it
costs to implement
vProfitability is best accomplished
by reducing the cost of poor
quality and preventing defects
vCost savings include prevention,
appraisal, and failure costs.
 The Integrity Systems “Table”

Management participation and

attitude
Professional quality management
Original programs
Recognition
 Quality Management Maturity Grid

qFive stages of an organization’s

maturity
qSix measurement categories
Management understanding and
attitude
Quality organization status
Problem handling
Cost of quality as a percent of sales
Quality improvement actions

 Maturity Grid Stage I: Uncertainty
Quality is the responsibility of the quality
department.
Quality is hidden within manufacturing or
engineering; no inspection
The cost of quality is unknown. In reality it
is about 20%.
There are no organized quality
improvement activities.

 Maturity Grid Stage II: Awakening

While quality management may be valuable,

the organization is not willing to commit
resources.
A quality leader is appointed, but the
emphasis is on appraisal and moving the
product.
Teams address major problems, but long-
range solutions are not solicited.
The cost of quality is reported at 3%, but is
actually 18%.
Activities are limited to short-range,
motivational efforts.

Maturity Grid Stage III: Enlightenment
Management adopts a supportive and
helpful stance.
Quality is elevated to a functional level
equivalent to engineering, marketing, etc.
Problems are resolved openly and in an
orderly way.
The cost of quality is reported as 8%,
though it is really about 12% of sales.
The fourteen-step quality improvement
program is implemented.
 “We are identifying and resolving our
problems.”

 Maturity Grid Stage IV: Wisdom

Top management participates in and

understands quality.
The quality manager is an officer of the
company.
Problems are identified in early
development.
The cost of quality is reported as 6.5%. It
may be 8%.
The quality improvement program is
continual and accompanied by follow-up
training.
 “Defect prevention is a routine part of our
operation.”

 Maturity Grid Stage V: Certainty
Quality is an essential part of the
organization.
A quality manager serves on the board of
directors.
Problems are prevented.
The cost of quality is reported as 2.5%,
which is what it really is.
Quality improvement is normal and
continual.
 “We know why we do not have problems
with quality.”

 Fourteen Steps to Quality Improvement

 1. Management commitment with an

emphasis on defect prevention and
visibility
 2. Quality improvement teams composed on
members of each department or function—
all the necessary tools
 3. Quality measurement to monitor the
status and improvement of activities
 4. Cost of quality evaluation by the
comptroller for accurate figures.
 5. Quality awareness by communicating the
cost of quality, encouraging
discussion.
 Fourteen Steps to Quality Improvement
 6. Corrective action to ingrain a habit of
identifying problems and correcting
them.
 7. An ad hoc committee to advocate
“zero defects”.
 8. Supervisor training so that all
managers understand the programs and
can explain it.
 9. Zero Defects Day to establish “zero
defects” as the organizational standard.
 10. Goal setting as teams, specific and
measurable.
 Fourteen Steps to Quality Improvement
 11. Removing the causes of defects, as
described by individual workers, so that
the people know their problems are
heard and answered.
 12. Genuine recognition for achievement.
 13. Quality councils of quality
professionals and team chairs for
status information and ideas.
 14. Do it over again—repetition makes
the program perpetual.
 A Real World Example
 Alberto Wisbeck took the job of
top manager at Siemens’ worst
factory in Jinan, China.
 Production capacity was low and
the cost of raw materials was
67% of sales.
 If efficiency did not improve, the
factory would be closed.
 What did Wisbeck do?
 Wisbeck focused on improving quality
and meeting customer needs
 Following the 14-step quality
improvement program, he encouraged
workers and supervisors to identify the
processes and procedures that were
causing problems.
 Following training, top managers
implemented projects in their own work
areas.

 What were the results?
 By focusing on faulty work
processes, the managers avoided
reprimanding their workers—a
critical cultural requirement.
 Over 300 projects saved the company
$604,000 annually and the plant
rose to rank as Siemens' #2 plant.