Chapter 1- Introduction to Quality

After you read this chapter, you should be able to

 Uncover the basic concept of total quality.

 Define total quality management.
 Know the quality and competitive advantage.
 Describe the importance of TQM in manufacturing and service organization.
 Know the competitive advantage and personal values towards quality within the organization.
Core Values
“For I know the plans I have for you, declares the LORD, plans for welfare and not for evil, to give
you a future and a hope.” - Jeremiah 29:11

Learning Activities and resources

J.R. Evans, W.M. Lindsay. (2019). Total Quality Management. Cengage
DA Collier, J. Evans, W. Lindsay. (2020). Operations Management and Total Quality Management.
Cengage

Introduction
The first chapter provides an overview of the importance of quality in a rapidly changing business
environment. That has become a cliché. Perhaps we should use the phrase: “a chaotic business
environment.” Students at both the undergraduate and graduate level are likely to be taking this
course as an elective, so you may tend to assume that they are "self-motivated" by simply being
there. This is not necessarily the case. As business and industry evolves, the terms “performance
management” and “performance excellence” have begun to be used as synonyms for older terms,
such as TQM and total quality. Whatever the vocabulary, you should try to "hook" your students
on the excitement of quality and performance excellence by using a variety of teaching methods
and media.
This chapter also introduces the concept of quality in production and service systems and develops
the idea that quality is central to effective operation of these systems. Students should be
encouraged to develop an understanding of the fact that quality is not an "add-on" to
organizational processes, but that it is "a way of doing business."
The Business Imperative
“The first job we have is to turn out quality merchandise that consumers will buy and keep on
buying. If we produce it efficiently and economically, we will earn a profit, in which you will share.”
- William Cooper Procter
Importance of Quality

 Quality is uniquely positioned to accelerate organizational growth through better

execution and alignment
 Quality provides the voice of the customer critical to developing innovative products and
services.
 Quality can provide an organization with a competitive edge
 “No quality, no sales. No sales, no profit. No profit, no jobs.”

Quality Profile – Motorola, Inc.

 Leader in the U.S. quality revolution during the 1980s

 Pioneer in continual reduction of defects and cycle times
 Exceptional practices in managing human assets, sharing data and information with
employees, customers, and suppliers, and aligning all its business processes with key
organizational objectives.

What is quality?
Quality can be a confusing concept, partly because people view quality subjectively and in relation
to differing criteria based on their individual roles in the production-marketing value chain. In
addition, the meaning of quality continues to evolve as the quality profession grows and matures.
For example, one study that asked managers of 86 firms in the eastern United States to define
quality produced several dozen different responses, including the following.

 Perfection
 Consistency
 Eliminating waste
 Speed of delivery
 Compliance with policies and procedures
 Providing a good, usable product
 Doing it right the first time
 Delighting or pleasing customer
 Total customer service satisfaction
Formal Definitions of Quality

 Transcendent Perspective: excellence

 Product Perspective: quantities of product attributes
 User Perspective: fitness for intended use
 Value Perspective: quality vs. price
 Manufacturing Perspective: conformance to specifications
 Customer Perspective: meeting or exceeding customer expectations
Customers – Customer driven quality is fundamental to high-performing organizations. Clearly,
meeting the expectations of customers is the goal of any business.
1. Consumers
Ultimate buyers of goods and services
2. External customers
Business-to-business
3. Internal customers
Anyone who receives goods or services from someone else within an organization.

Integrating quality perspective in the value chain

Individuals in different business functions—for example, the designer, manufacturer or service

provider, distributor, or customer- speak different “languages”. Thus, different quality perspective
at different points in the value chain are important to ultimately create and deliver goods and
services that will satisfy customers need and expectations.

Quality Perspectives
History of Quality Management

As the philosopher George Santayana said, “those who cannot remember the past are condemned
to repeat it.’’ Thus, an understanding of the history of quality can be quite insightful. Quality has
been an important aspect of production operations throughout the history.

 Ancient History
 Zhou Dynasty in China
 The Age of Craftsmanship
 Skilled workers during the Middle Ages
 Industrial Revolution
 Early 20th Century
 Separate quality departments
 Ford Motor Company
 Statistical methods and quality assurance Professional societies and publications
 Post World War II
 Evolution of quality management in Japan
 W. Edwards Deming and Joseph Juran
 U.S. “Quality Revolution”
 Quality crisis around 1980
 Growth of product quality awareness in manufacturing industries
 Early Successes
 Malcolm Baldrige National Quality Award (1987)
 Books, consulting, training
 From Product Quality to Total Quality Management
 “Little Q” vs. “Big Q” and TQM
 Management Failures
 Cynicism and disinterest
 “No, TQM isn’t dead. TQM failures just prove that bad management is still alive and
kicking.”
 Performance Excellence
 Focus on customer value, organizational sustainability, improvement of
effectiveness and capabilities, and organizational and personal learning.
 Emergence of Six Sigma
 a customer-focused, results-oriented approach to business improvement
 Current and future challenges
 Continue to apply the principles of quality and performance excellence.
 Quality is “a race without a finish line.”
Growth of Modern Quality Management

Contemporary Influences on Quality

In 2011, the American Society for quality identified eight key forces that will influence the future
of quality.

1. Global Responsibility- an organization must be fully aware of global impact of its local
decisions and realize that as demand grows for the planet’s finite resources, waste is
increasingly unacceptable. Global responsibility also involves, labor practices, human
rights, consumer rights, fair operating practices, and contribution to society.
2. Consumer awareness- With today’s technology such as internet, twitter, facebook and
Instagram, consumer have access to a wealth information on which to make purchasing
decision.
3. Globalization- Globalization no longer means just an opportunity for organizations to enter
new markets. Today, firms must contend with a growing number of competitors and
sources of lower-cost labor and assume the risks associated with global supply chains.
4. Increasing rate of change- Technology has shifted the rate of change into an entirely new
gear, which brings with its opportunities and threats.
5. Workforce of the future- Competition for talent will increase, and along with technological
advances, will change how and where work is done.
6. Aging population- as people live longer, organizations face higher cost for healthcare and
social welfare program.
7. Twenty-first century quality- quality is not the same as it was 50 years ago, even five years
ago. Quality is moving beyond the organization’s walls to encompass a customer’s entire
experience either the organization rather that just the quality of the product or service.
8. Innovation- according to study, innovation is ‘’the pursuit of something different and
exciting.’’ Innovation lies at the heat of organizational survival. As the study states, “if the
innovation means the ability of a company to anticipate customer needs—expressed or
unexpressed, known or unknown—and bring products or services to the marketplace that
 excite customers, then clearly innovation in the fuel of growth in today’s changing world,
and more so tomorrow.”

These eight forces will impact how organizations configure themselves, how managers plan and
lead, and how all workers will perform to achieve quality. As ASQ noted “Quality should shape
society. Ultimately, quality methodology will be used to build a better world.”

Manufacturing Systems
Quality management is rooted in manufacturing; therefore, that is where we will begin. In image
below, it illustrates a typical manufacturing system and the key relationships among its function.

Quality in Marketing
Marketing and sales personnel are responsible for determining the needs and expectations of
consumers.

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.

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.
Quality in Production Planning and Scheduling
Poor quality often results from time pressures caused by insufficient planning and scheduling.

Quality in Manufacturing and Assembly

Both technology and people are essential to high-quality manufacturing.

Quality in Process Design

Manufacturing processes must be capable of producing output that meets specifications
consistently.

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.

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.

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).”

Critical Differences Between Service and Manufacturing

 Customer needs and performance standards are more difficult to identify and measure.
 Services requires a higher degree of customization.
 Output is intangible.
 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.

Components of Service Quality

 People
 “If we take care of our people, they will take care of our customers.”
 Technology
 Computers and information technology
 E-commerce

Quality in Business Support Functions

 Finance and Accounting. The finance function is responsible for obtaining fund, controlling
their use, analyzing investment opportunities, and ensuring that the firm operates cost-
effectively and ideally profitably. Financial and accounting personnel who have contacts
 with the customers can directly influence the service their company provides. For example,
in many countries, employees chart invoice accuracy, the time needed to process invoices,
and the time needed to pay bills. In addition, they can apply quality improvement
techniques to improve their own operations.

 Legal Services. A firm’s legal department attempts to guarantee that the firm complies with
laws and regulations regarding such things as product labeling, packaging, safety, and
transportation; designs and words its warranties properly; satisfies its contractual
requirements; and has proper procedures and documentation in place in the event of
liability claims against it. The rapid liability suits have made legal services and important
aspect of quality.

 Quality Assurance. Because some managers lack the technical expertise required for
performing needed statistical test or data analyses, technical specialist usually in the
“Quality Assurance Department’ they are the who assist the manger in these task. Quality
assurance specialist perform special statistical studies and analyses and may be assigned
to work with any of the manufacturing or business support functions. A customer driven
quality focus must involve every function in the organization, including manufacturing,
service and business support functions. Quality is needed everyone’s responsibility.

Competitive Advantage
Competitive Advantage denotes firm’s ability to achieve market superiority.
 Is driven by customer wants and needs.
 Makes significant contribution to business success.
 Matches organization’s unique resources with opportunities.
 Is durable and lasting.
 Provides basis for further improvement.
 Provides direction and motivation.
Quality supports each of these characteristics.
 Quality and Profitability

Quality and Business Results

 Hendricks and Singhal study of quality award winners
 Performance results of Baldrige Award recipients
Example: The overall Net Promoter (NP) scores (a loyalty metric defined by the level of repeat
sales and referrals) for MEDRAD, a manufacturer of medical imaging devices, were consistently 60
percent or higher compared to the 50 percent or higher marks for other organizations nationwide.
MEDRAD’s global customer satisfaction ratings using the NP system steadily increased from 50
percent to 63 percent, surpassing the best-in-class benchmark of 50 percent.

Quality and Personal Values

 Personal initiative has a positive impact on business success
 Quality-focused individuals often exceed customer expectations
 Quality begins with personal attitudes
 Attitudes can be changed through awareness and effort (e.g., personal quality checklists)

“Unless quality is internalized at the personal level, it will never become rooted in the culture of
an organization.”
“Thus, quality must begin at a personal level (and that means you!).”
Review Questions!

1. Discuss the importance of Quality in organization.

2. Discuss the manufacturing system.
3. Discuss the 8 Contemporary Influences on Quality.
4. Explain how each major function of a manufacturing system contributes to total quality.