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QUALITY MANAGEMENT FOR

ORGANIZATIONAL EXCELLENCE
Introduction to Total Quality
Ninth Edition

David L. Goetsch

Stanley B. Davis

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Library of Congress Cataloging-in-Publication Data


Names: Goetsch, David L., author. | Davis, Stanley B.
Title: Quality management for organizational excellence : Introduction to
  total quality / David L. Goetsch, Stanley B. Davis.
Description: Ninth edition. | Boston : Pearson, [2021] | Includes
  bibliographical references and index.
Identifiers: LCCN 2019008777 | ISBN 24575698 | ISBN 9780135577325
Subjects: LCSH: Total quality management.
Classification: LCC HD62.15 .G64 2021 | DDC 658.4/013—dc23
LC record available at https://lccn.loc.gov/2019008777
ScoutAutomatedPrintCode

ISBN 10: 0-13-557732-2


ISBN 13: 978-0-13-557732-5

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BRIEF CONTENTS

I
PHILOSOPHY AND CONCEPTS  1

1 The Total Quality Approach to Quality Management: Achieving Organizational


­Excellence  2
2 Quality and Global Competitiveness  19
3 Strategic Management: Planning and Execution for Competitive Advantage  34
4 Quality Management, Ethics, and Corporate Social Responsibility  50
5 Partnering and Strategic Alliances  66
6 Quality Culture: Changing Hearts, Minds, and Attitudes  80
7 Customer Satisfaction, Retention, and Loyalty  94
8 Employee Empowerment  111
9 Leadership and Change  122
10 Team Building and Teamwork  145
11 Effective Communication 162
12 Education and Training  180
13 Overcoming Politics, Negativity, and Conflict in the Workplace  203
14 ISO 9000 and Total Quality: The Relationship  226

II TOOLS AND TECHNIQUES  237

15 Overview of Total Quality Tools  238


16 Problem Solving and Decision Making  271
17 Quality Function Deployment  289
18 Optimizing and Controlling Processes Through Statistical Process Control  305
19 Continual Improvement Methods with Six Sigma, Lean, Lean Six Sigma,
and More  333
20 Benchmarking 359
21 Just-in-Time/Lean Manufacturing (JIT/Lean)  374
22 Implementing Total Quality Management  404

Index 429

iii

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CONTENTS

Preface xi Factors Inhibiting Competitiveness  22


Acknowledgments xii Comparisons of International
About the Authors  xiii Competitors 26
Human Resources and Competitiveness  26
I PHILOSOPHY AND CONCEPTS 1 Characteristics of World-Class
Organizations 27
1 The Total Quality Approach to Quality Management-by-Accounting: Antithesis of Total
Management: Achieving Organizational Quality 29
Excellence 2 U.S. Companies: Global Strengths and
What Is Quality?  2 Weaknesses 29
The Total Quality Approach Defined  3 Quality Management Practices in Asian
Quality and Competitive Advantage  5 Countries 31
Two Views of Quality  6 Summary 31
Key Elements of Total Quality  7 Key Terms and Concepts  32
Total Quality Pioneers  8 Factual Review Questions  32
Updating Deming’s Fourteen Points  10 Critical Thinking Activity  32
Feigenbaum’s Contributions  12 Discussion Assignment 2.1   33
Managers, Quality, and Organizational Discussion Assignment 2.2   33
Excellence 13 Endnotes 33
Keys to Total Quality Success  13
The Future of Quality Management in the 3 Strategic Management: Planning
­Twenty-First Century  14
and Execution for Competitive
Quality Certifications  15
Advantage 34
Other Quality Certifications  16
What Is Strategic Management?  34
Summary 17
Competitive Strategy  34
Key Terms and Concepts  17
Core Competencies and Competitive
Factual Review Questions  17 Advantage 35
Critical Thinking Activity   17 Components of Strategic Management  35
Discussion Assignment 1.1   17 Strategic Planning Overview  35
Discussion Assignment 1.2   18 Executing the Strategic Plan  44
Endnotes 18 Strategic Planning in Action: A “Real-World”
Case 46
2 Quality and Global Competitiveness 19 Summary 48
The Relationship Between Quality and Key Terms and Concepts  49
Competitiveness 19 Factual Review Questions  49
Cost of Poor Quality  20 Critical Thinking Activity   49
Competitiveness and the U.S. Economy  21 Endnote 49

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vi Contents

4 Quality Management, Ethics, and Activating Cultural Change  83


Corporate Social Responsibility 50 Changing Leaders to Activate Change  83
Definition and Overview of Ethics  50 Laying the Foundation for a Quality
Culture 84
Trust and Total Quality  52
Learning What a Quality Culture Looks
Values and Total Quality  54 Like 85
Integrity and Total Quality  54 Countering Resistance to Cultural Change  85
Responsibility and Total Quality  54 Establishing a Quality Culture  88
Manager’s Role in Ethics  55 Maintaining a Quality Culture  90
Organization’s Role in Ethics  55 Behavior-Based Quality Culture  91
Handling Ethical Dilemmas  56 Summary 91
Ethics Training and Codes of Business Key Terms and Concepts  92
Conduct 56
Factual Review Questions  92
Models for Making Ethical Decisions  57
Critical Thinking Activity   92
Beliefs Versus Behavior: Why the Disparity?  58
Discussion Assignment 6.1   93
Ethical Dilemmas: Cases  59
Endnotes 93
Corporate Social Responsibility Defined  62
Summary 63
Key Terms and Concepts  64 7 Customer Satisfaction, Retention, and
Factual Review Questions  64
Loyalty 94
Critical Thinking Activity   64 Understanding Who Is a Customer  94
Discussion Assignment 4.1   64 Understanding Customer-Defined Quality  95
Endnotes 65 Identifying External Customer Needs  96
Communicating with Customers  97
5 Partnering and Strategic Alliances 66 Customer Satisfaction Process  99
Partnering or Strategic Alliances  66 Customer-Defined Value  99
Innovative Alliances and Partnerships  69 Customer Retention  100
Internal Partnering  70 Establishing a Customer Focus  102
Partnering with Suppliers  70 Recognizing the Customer-Driven
Organization 103
Partnering with Customers  73
Value Perception and Customer Loyalty  103
Partnering with Potential Competitors  74
Customer Loyalty Model  103
Global Partnering  76
Customer Loyalty Versus Customer
Education and Business Partnerships  77 Profitability 104
Summary 77 Customers as Innovation Partners  105
Key Terms and Concepts  78 Strategies for Customer Loyalty
Factual Review Questions  78 and Retention  106
Critical Thinking Activity   78 Product Innovation Model for Customer
Discussion Assignment 5.1   79 Retention 107
Discussion Assignment 5.2   79 Summary 108
Endnotes 79 Key Terms and Concepts  109
Factual Review Questions  109
6 Quality Culture: Changing Hearts, Minds, Critical Thinking Activity   109
and Attitudes 80 Discussion Assignment 7.1   109
Understanding What a Quality Culture Is  80 Discussion Assignment 7.2   110
Quality Culture Versus Traditional Cultures  81 Endnotes 110

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Contents
vii

8 Employee Empowerment 111 Handling Conflict in Teams  154


Structural Inhibitors of Teamwork  156
Employee Empowerment Defined  111
Rewarding Team and Individual Performance  157
Rationale for Empowerment  112
Recognizing Teamwork and Team Players  159
Inhibitors of Empowerment  113
Leading Multicultural Teams  159
Management’s Role in Empowerment  115
Summary 160
Implementing Empowerment  116
Key Terms and Concepts  161
How to Recognize Empowered Employees  118
Factual Review Questions  161
Empowerment Errors to Avoid  118
Critical Thinking Activity  161
Beyond Empowerment to Enlistment  119
Discussion Assignment 10.1 161
Summary 120
Endnotes 161
Key Terms and Concepts  120
Factual Review Questions  120
11 Effective Communication 162
Critical Thinking Activity  120
Discussion Assignment 8.1 121 Defining Communication  162
Discussion Assignment 8.2 121 Understanding the Role of Communication in Total
Quality 163
Discussion Assignment 8.3 121
Understanding Communication as a Process  164
Endnotes 121
Recognizing Inhibitors of Communication  164
Establishing a Conducive Communication
9 Leadership and Change 122 Climate 166
Leadership Defined  122 Communicating by Listening  166
Leadership for Quality  125 Understanding Nonverbal Communication
Leadership Styles  127 Factors 170
Building and Maintaining a Following  128 Communicating Verbally  171
Leadership Versus Management  130 Communicating in Writing  172
Restructuring and Change  131 Communicating Corrective Feedback  174
How to Lead Change  132 Improving Communication  175
Leading for Innovation in a Quality Culture  135 How Interpersonal Skills Affect
Lessons from Distinguished Leaders  135 Communication 176
Servant Leadership and Stewardship  140 Personality and Communication  177
Negative Influences on Leaders: How to Counter Summary 178
Them 140 Key Terms and Concepts  178
Leaders as Mentors  141 Factual Review Questions  179
Summary 143 Critical Thinking Activity  179
Key Terms and Concepts  143 Discussion Assignment 11.1   179
Factual Review Questions  143 Endnotes 179
Critical Thinking Activity  144
Discussion Assignment 9.1 144 12 Education and Training 180
Discussion Assignment 9.2 144 Overview of Education, Training, and Learning  180
Endnotes 144 Rationale for Training  184
Training Needs Assessment  186
10 Team Building and Teamwork 145 Providing Training  188
Overview of Team Building and Teamwork  145 Evaluating Training  189
Building Teams and Making Them Work  147 Managers as Trainers  191
Four-Step Approach to Team Building  149 Workforce Literacy  195
Character Traits and Teamwork  151 Why Training Sometimes Fails  197
Teams Are Coached—Not Bossed  152 Quality Training Curriculum  197

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viii Contents

Orientation Training  197 Management Motivation for Registration to


Customer Training  198 ISO 9001  233
Ethics Training  199 ISO 9000 and Total Quality Management
Working Together  233
Making E-Learning Work  199
The Future of ISO 9000  234
Summary 199
ISO 9000: Past Versions  235
Key Terms and Concepts  200
Summary 235
Factual Review Questions  200
Key Terms and Concepts  236
Critical Thinking Activity  201
Factual Review Questions  236
Discussion Assignment 12.1 201
Critical Thinking Activity  236
Discussion Assignment 12.2 201
Discussion Assignment 14.1 236
Endnotes 201

13 Overcoming Politics, Negativity, and


Conflict in the Workplace 203 II TOOLS AND TECHNIQUES 237
Internal Politics Defined  203 15 Overview of Total Quality Tools 238
Organizational Structure and Internal Politics  205 Total Quality Tools Defined  238
Internal Politics in Action  207 Pareto Charts  239
Internal Politicians and Their Methods  210 Cause-and-Effect Diagrams  241
Impact of Internal Politics on Quality  213 Check Sheets  243
Controlling Internal Politics in Organizations  214 Histograms 246
Overcoming Negativity in Organizations  219 Scatter Diagrams  252
Overcoming Territorial Behavior in Run Charts and Control Charts  255
Organizations 220
Stratification 256
Managing Conflict in Organizations  221
Some Other Important Tools Introduced  258
Summary 224
Management’s Role in Tool Deployment  264
Key Terms and Concepts  224
Selecting the Right Tool for the Job  266
Factual Review Questions  224
Summary 267
Critical Thinking Activity  224
Key Terms and Concepts  267
Discussion Assignment 13.1 225
Factual Review Questions  268
Discussion Assignment 13.2 225
Critical Thinking Activities  268
Endnotes 225
Discussion Assignment 15.1   269
Endnotes 270
14 ISO 9000 and Total Quality: The
Relationship 226
ISO 9000: The International Standard for Quality 16 Problem Solving and Decision
Management Systems  226 Making 271
ISO 9000’s Objective  227 Problem Solving for Total Quality  271
How ISO 9000 Is Applied to Organizations  227 Two Models for Solving and Preventing
ISO 9000 Quality Management System: A Problems 272
Definition 228 Human Error as a Root Cause  278
Authority for Certification/Registration  229 Problem-Solving and Decision-Making
ISO 9001 and Industry-Specific Applications  230 Tools 278
Organizational Registration to ISO 9001  230 Common Errors in Problem Solving  278
The Benefits of ISO 9000  231 Decision Making for Total Quality  279
The Origin of ISO 9000  231 The Decision-Making Process  279
Comparative Scope of ISO 9000 and Total Quality Objective Versus Subjective Decision
Management 231 Making 281

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Contents
ix

Scientific Decision Making and Problem Summary 327


Solving 282 Key Terms and Concepts  328
Employee Involvement in Problem Solving and Factual Review Questions  328
Decision Making  282
Critical Thinking Activity  328
Role of Information in Decision Making  283
Discussion Assignment 18.1 328
Creativity in Decision Making  284
Discussion Assignment 18.2 332
Summary 285
Discussion Assignment 18.3 332
Key Terms and Concepts  286
Endnotes 332
Factual Review Questions  286
Critical Thinking Activity  286 19 Continual Improvement Methods with
Discussion Assignment 16.1   287 Six Sigma, Lean, Lean Six Sigma,
Discussion Assignment 16.2   287 and More 333
Endnotes 288
Rationale for Continual Improvement  333
Management’s Role in Continual
17 Quality Function Deployment 289 Improvement 334
What Is Quality Function Deployment?  289 Essential Improvement Activities  334
Introducing Quality Function Deployment’s House of Structure for Quality Improvement  335
Quality 290 The Scientific Approach  335
Developing the Set of Customer Needs (WHATs): Identification of Improvement Needs  336
House of Quality Matrix Number 1  291 Development of Improvement Plans  336
Planning the Improvement Strategy: House of Quality Common Improvement Strategies  337
Matrix Number 2  293
The Kaizen Approach  340
Selecting the Technical Requirements (HOWs):
House of Quality Matrix Number 3  295 The CEDAC Approach  343
Evaluating Interrelationships Between WHATs and The Lean Approach  345
HOWs: House of Quality Matrix Number 4  295 The Six Sigma Approach  347
Evaluating the Direction of Correlation Between The Lean Six Sigma Approach  353
HOWs: House of Quality Matrix Number 5  297 Why Some Lean Six Sigma Projects Succeed
Selecting the Design Targets (Values) of the HOWs: While Others Fail  354
House of Quality Matrix Number 6  298 Future of Six Sigma: Version 2.0  354
Summary 303 The Theory of Constraints and Integrated TOC,
Key Terms and Concepts  303 Lean, Six Sigma (ITLS) Approach  354
Factual Review Questions  303 Risk Priority Numbers and Continual
Critical Thinking Activity  303 Improvement 355
Discussion Assignment 17.1 303 Summary 356
Key Terms and Concepts  356
18 Optimizing and Controlling Processes Factual Review Questions  357
Through Statistical Process Critical Thinking Activity   357
Control 305 Endnotes 357

Statistical Process Control Defined  305


Rationale for SPC  306
20 Benchmarking 359
Control Chart Development  310 Benchmarking Defined  359
Management’s Role in SPC  319 Prerequisites to Benchmarking  362
Role of the Total Quality Tools  320 Obstacles to Successful Benchmarking  363
Authority over Processes and Production  321 Role of Management in Benchmarking  364
Implementation and Deployment of SPC  321 Benchmarking Approach and Process  365
Inhibitors of SPC  325 Making Full Use of Benchmarking Data  368

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x Contents

Perpetual Benchmarking  369 Discussion Assignment 21.1 403


Benchmarking Resources  369 Endnotes 403
Summary 370
Key Terms and Concepts  370 22 Implementing Total Quality
Factual Review Questions  370 Management 404
Critical Thinking Activity  370 Rationale for Change  405
Discussion Assignment 20.1   372 Requirements for Implementation  407
Discussion Assignment 20.2   372 Role of Top Management: Leadership  414
Endnote 373 Implementation Variation Among
Organizations 416
Implementation Approaches to Be Avoided  418
21 Just-in-Time/Lean Manufacturing An Implementation Approach that Works  419
(JIT/Lean) 374 Getting on with It  423
JIT/Lean Defined  374 What to Do in the Absence of Commitment
Rationale for JIT/Lean  376 from the Top  423
Development of JIT/Lean  377 Implementation Strategies: ISO 9000 and
Relationship of JIT/Lean to Total Quality and Baldrige 424
­World-Class Manufacturing  381 Summary 426
Benefits of JIT/Lean  383 Key Terms and Concepts  426
Requirements of JIT/Lean  389 Factual Review Questions  426
Automation and JIT/Lean  401 Critical Thinking Activities  427
Summary 401 Discussion Assignment 22.1   427
Key Terms and Concepts  402 Endnotes 428
Factual Review Questions  402
Critical Thinking Activities  402 Index 429

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PREFACE

BACKGROUND ent format that allows the reader to understand both the
big picture and the specific details of quality management.
At one time in history, Great Britain was the world’s leader It is intended for use in universities, colleges, community
in commerce and industry. Eventually, the United States colleges, corporate environments, and any other settings in
emerged as a major friendly competitor. Then, following which people want to learn to be effective agents of quality
World War II, the United States took over as the undisputed management. Students enrolled in technology, engineering,
world leader of commerce and industry. During these post- and management programs will find this book both valuable
war years, while the United States was enjoying unparalleled and easy to use. Practitioners in corporate settings will find it
prosperity, Japan and Germany were rebuilding from the a valuable guide in understanding and implementing quality
ashes of the war. With a great deal of help from the United management.
States, Japan was able to rebound and during the 1970s began The direct, straightforward presentation of material
to challenge the United States in such key manufacturing focuses on making the theories and principles of quality
sectors as automobiles, computers, and consumer electron- management practical and useful in a real-world setting.
ics. By 1980, Japan had emerged as a world-class competi- Up-to-date research has been integrated throughout in a
tor and a global leader in selected areas of commerce and down-to-earth manner.
industry. German industry had also reemerged by this time.
By 2000, Korea, China, and the Pacific Rim nations had also
emerged as global competitors. ORGANIZATION OF THIS BOOK
As a result, the United States found itself losing mar-
ket share in economic sectors it had dominated (and taken The text consists of 22 chapters, organized in two parts. Part I
for granted) for decades. At first, industrialists in the United explains the philosophy and concepts of quality management.
States turned their backs on the lesson their counterparts in Part II covers the tools and techniques of quality manage-
other industrialized nations had learned. This lesson was ment. A standard format is used throughout the book. Each
that the key to competing in the international marketplace chapter begins with a list of objectives and provides a com-
was to simultaneously improve quality and productivity on prehensive summary. Key terms and concepts, factual review
a continual basis. However, as more and more market share questions, a critical thinking activity, discussion assignments,
slipped away, the message started to sink in for the United and endnotes are found at the end. The endnotes provide
States. This belated awareness gave rise to a quality move- readers with comprehensive lists of additional reading and
ment that began to take hold. Its progress was slow at first. research material that can be pursued at the ­discretion of the
However, an approach to doing business known as quality student and/or the instructor. The other materials encourage
management has caught on and is now widely practiced as review, stimulate additional thought, promote discussion, and
a way to achieve organizational excellence. Organizational facilitate additional research.
excellence is a combination of peak performance, superior
quality, and continual improvement.
This book advocates an approach to doing business USING THIS BOOK FOR ONE
that focuses all the resources of an organization on the COURSE OR TWO
continual and simultaneous improvement of quality and Some professors use this book for one course and some
productivity. The purpose of this approach is to continu- use it for two courses. Those who use the book for one
ally improve the organization’s performance and, in turn, course cover all or most of the chapters and make decisions
competitiveness. concerning any chapters that are not covered on the basis
of local considerations. Those who use the book for two
WHY WAS THIS BOOK WRITTEN courses typically cover Chapters 1–14 in the first course
and Chapters 15–22 in the second course. Although this
AND FOR WHOM?
approach to dividing the content is not balanced in terms
This book was written in response to the need for a practical of the number of chapters, it is balanced in terms of the
teaching resource that encompasses all of the various ele- time required to cover the material. Feedback from most
ments of quality management, including Lean, Six Sigma, professors indicates that the degree of difficulty of the con-
and Lean Six Sigma, and pulls them together in a coher- tent of Chapters 15–22 requires them to spend more time

xi

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xii Preface

on these chapters than is required to cover any of the first ■■ Chapter 7: Added a new section on customer loyalty and
14 chapters. Consequently, in terms of time requirements, retention strategies.
dividing the book at Chapter 14 results in two courses of ■■ Chapter 9: Added a new section on ensuring compatibil-
equal length. Feedback from the classroom has been posi- ity of quality and innovation.
tive concerning both of these approaches.
■■ Chapter 14: Rewritten to bring it up to date with ISO
9000-2015.
HOW THIS BOOK DIFFERS ■■ Chapter 15: Added a seven-step process for implement-
FROM OTHERS ing Design of Experiments (DOE).
Most books in the market deal with one of the several ­elements ■■ Chapter 16: Added material to the section on applying the
of quality management, such as teamwork, just-in-time man- Five Whys to problem solving, explaining contributing
ufacturing, scientific measurement (SPC or quality tools), versus root causes, a new section of human error as a root
­continual improvement, and employee i­nvolvement. Many of cause and applicable cautions, and common errors made
the books available were developed with the advanced-level in problem solving.
practitioner in mind rather than the beginner. Few of the books ■■ Chapter 19: Added a new section on why some Lean Six
in the market were formatted for use in a classroom setting. Sigma projects fail when other succeed and a new section
This book was written to provide both comprehensive and in- on Risk Priority Numbers (RPNs) and continual improve-
depth coverage of quality management. All the elements of ment. Download Instructor Resources from the Instructor
quality management are covered, including several that receive Resource Center.
little or no attention in other quality management books (e.g.,
peak performance, continual improvement, superior value, To access supplementary materials online, ­instructors
partnering, manufact­uring networks, quality culture, and how need to request an instructor access code. Go to www.
to implement total q­ uality). These subjects are covered in suf- pearsonhighered.com/irc to register for an instructor access
ficient depth to allow a beginner to learn everything necessary code. Within 48 hours of registering, you will receive a con-
to understand and implement total quality without having to firming e-mail including an instructor access code. Once
look to any other source of information. you have received your code, locate your text in the online
catalog and click on the Instructor Resources button on the
New in the Ninth Edition left side of the catalog product page. Select a supplement,
and a login page will appear. Once you have logged in, you
The ninth edition contains major improvements that reflect can access instructor material for all Pearson textbooks. If
the ongoing evolution of quality management, as well as rec- you have any difficulties accessing the Web site or down-
ommendations from reviewers and users of the text. These loading a supplement, please contact Customer Service at
improvements include the following: http://247pearsoned.custhelp.com/.
■■ Chapter 1: Added new content on quality and competi-
tiveness, Deming’s 14 points as updated for contemporary
times, Armand V. Feigenbaum’s pioneering contribution ACKNOWLEDGMENTS
to quality management, role of managers in achieving The authors would like to thank the following reviewers for
organizational excellence, and the impact of technology the helpful insights:
on the future of quality management.
Kristopher Blanchard
■■ Chapter 2: Added new content on inhibitors of competi-
Upper Iowa University
tiveness.
■■ Chapter 4: Expanded the section of corporate social Lynda Fuller
responsibility including coverage of “greenwashing.” Wilmington University
■■ Chapter 6: Added a new section on behavior-based ­quality Melissa Weathersby
culture. Alamo Colleges District

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ABOUT THE AUTHORS

David L. Goetsch is the Vice President Emeritus and Stanley B. Davis was a manufacturing executive with Harris
Professor at Northwest Florida State College. Prior to en- Corporation until his retirement in 1992. He was the found-
tering higher education full time, Dr. Goetsch had a career ing managing director of The Quality Institute and is a well-
in the private sector that included positions in quality man- known expert in the areas of total quality management and
agement, safety management, and project management with its implementation, statistical process control, just-in-time
engineering, manufacturing, and construction firms. Dr. manufacturing, Six Sigma, benchmarking, quality manage-
Goetsch is the founder of The Quality Institute, a partnership ment systems, and environmental management systems.
of Northwest Florida State College and the Okaloosa Eco- He currently serves as Professor of Quality at the institute
nomic D ­ evelopment Council, and the Leadership Institute and heads his own consulting firm, Stan Davis Consulting,
of Northwest Florida State College. Dr. Goetsch has been which is dedicated to assisting private industry and public
selected as Professor of the Year at Northwest Florida State organizations throughout North America achieve world-
College and the Emerald Coast Campus of the University of class performance and competitiveness.
West Florida (five times). He was selected as Florida’s Out-
standing Technical Instructor of the Year and his program at
Northwest Florida State College was selected as the recipi-
ent of the U.S. Secretary of Education’s Outstanding Techni-
cal Program in the United States for Region 10.

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