Course Notes Operations Management Intro to Quality

9:Introduction to Quality

Charles E. Oyibo

Introduction

Broadly defined, quality is the ability of a product or service to consistently meet or exceed customer expectations.

The Dimensions of Quality

• Performance: main characteristics of the product or service
• Aesthetics: appearance, feel, taste, smell
• Special Features: extra characteristics
• Conformance: how well a product or service corresponds to design specifications, and to the customer's expectations
• Safety: risk of injury or harm
• Reliability: consistence of performance
• Durability: the useful life of the product or service
• Perceived Quality: indirect evaluation of quality (e.g. reputation)
• Service after sale: handling of complaints or checking on customer satisfaction

When referring to a product, a customer sometimes judges the first four dimensions by its fitness for use.

The Determinants of Quality

The degree to which a product or service successfully satisfied its intended purpose has four primary determinants. They are:

1. Design. Quality of design refers to the intention of the designers to include or exclude certain features from a product or service. Design decisions must take into account customer wants, production or service capabilities, safety and liability (both during production and after delivery), costs, etc.
2. How well it conforms to design. Quality of conformance refers to the degree to which goods and services conform to (i.e. achieve) the intent of the designers. This is affected by factors such as the capability of equipment used; the skills, training, and motivation of workers; the extent to which the design lends itself to production; the monitoring process to assess conformance; and the taking of corrective action when necessary.
3. Ease of use (and user instructions) increase the chances, but do not guarantee, that a product will be used for its intended purpose and in such a way that it will continue to function properly and safely. With services, customers must be clearly informed on what they should or should not do; otherwise there is the danger that they will take some action that will adversely affect quality.
4. Service after delivery. It is important from the quality standpoint to remedy the situation--if products do not always perform as expected, or services do not always yield the desired result--through recall and repair of the product, adjustment, replacement or buyback, or reevaluation of service, and doing whatever is necessary to being the product or service up to standard.

The Consequences of Poor Quality

1. Loss of business
2. Liability
3. Productivity
4. Costs

Benefits of Good Quality

1. Enhanced reputation for quality
2. Increased market share
3. Greater customer loyalty
4. Lower liability Costs
5. Fewer production and service problems

All leading to...

1. Higher productivity
2. Fewer complaints from customers
3. Lower production costs
4. Higher profits

Responsibility for Quality

While all members of an organization have some responsibility for quality, certain areas of the organization are involved in activities that make them key areas of responsibility. They are:

1. Top management.
2. Design (product and process).
3. Procurement.
4. Production/operations.
5. Quality Assurance.
6. Packaging and shipping.
7. Marketing and sales.
8. Customer service.

The Costs of Quality

Failure costs are incurred by defective parts or products or by faulty services. Internal failures are those discovered during the production process; external failures are those discovered after delivery to the customer. The costs of internal failures include:

• lost production time,
• scrap and rework,
• investigation costs,
• possible equipment damage,
• possible employee injury, etc

The costs of external failures include:

• warrantee work,
• handling or complaints,
• replacements,
• liability/litigation,
• loss of customer goodwill,
• opportunity costs related to lost sales

Appraisal costs relate to inspection, testing, and other activities intended to uncover defected products or services, or to assure that there are none. They include the costs of:

• inspectors,
• test equipments,
• labs,
• quality audits,
• field testing, etc.

Prevention costs relate to attempts to prevent defects from occuring. They include costs such as:

• planning and administration systems,
• working with vendors
• training
• quality control procedures
• extra attention in both the design and production phases to decrease the probability of defects

Observe that internal and external (failure) costs represent costs related to poor quality, whereas appraisal and prevension costs represent investments for achieving good quality.

Ethics and Quality

As a manager, having knowledge substandard work, defective products, poor design and/or workmanship, substandard parts and/or raw materials, and failing to correct and report it in a timely manner is unethical and can lead to the negative consequences enumerated in consequences of poor quality section above.

Quality "Gurus"

W. Edwards Deming

• Compiled a list of 14 points he believed were the prescription needed to achieve quality in an organization.
• His message was that the cause of inefficiency and poor quality is the system not the employees.
• Argued that it was management's responsibility to correct the system to achieve the desired results.
• Stressed the need to reduce variation in output (deviation from a standard), which can be accomplished by distinguishing between special causes of variation (i.e., correctable) and common causes of variation (i.e., random)
• The key elements of Deming's 14 points are:
  • constancy of purpose,
  • continual improvement, and
• profound knowledge, which involves:
  1. an appreciation for a system (everyone in the organization working to achieve optimization; eliminating internal competition),
  2. a theory of variation (differentiating between random variation and correctable variation, and focusin on reducing the later),
  3. a theory of knowledge ("knowledge comes from theory", and "learning cannot occur within an organization without a theory of knowledge"), and
  4. psychology (the most powerful element of profound knowledge).

Joseph M. Juran

• Published Quality Control Handbook, 1951
• "Quality begins by knowing what the customer wants."
• Views quality as "fitness-for-use"
• Believes that roughly 80% of quality defects are management controllable; thus, management has the responsibility to control this deficiency
• Describes quality management in terms of a trilogy consisting of
  1. quality planning ( to establish process that are capable of meeting quality standards),
  2. quality control (to know when corrective action is needed), and
  3. quality improvement (to find better ways of doing things)
• Reducing the cost of quality leads to increased profits
• Proposed 10 steps for quality improvement.

Armand Feigenbaum

• Advanced the "cost of nonconformance" approach as a reason for managemnet to commit to quality
• Published Total Quality Control, 1961, in which he propounded quality principle in 40 steps
• "The customer defines quality." [Deming would disagree: companies should get to know their customers so well that they can anticipate future needs].

Philip B. Crosby

• Developed the concept of zero defects and popularized the phrase, "Do it right the first time."
• Stressed prevention, and argued against the idea that their will always be some level of defectives."
• Published Quality Is Free, 1979 and Quality without Tears: The Art of Hassle-Free Management, 1984
  • Quality is Free: the costs of poor quality are much greater than traditionally defined; so, rather than view quality efforts as costs, they should be viewed as a way to reduce costs...
• Believes that any level of defect is too high

Kaoru Ishikawa

• Developed the cause-and-effect (fishbone) diagram for problem solveing
• Implemented quality circles, which involve workers in quality improvement
• Called attention to the internal customer--the next person in the (production) process

Genuchi Taguchi

• Known for the Taguchi loss function, whcih involves a formula for determing the cost of poor quality (the deviation of a part from a standard causes a loss, and the combined effect of deviation of all parts from their standards can be large, even though each individual deviation is small

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