Concept of Quality

Wilds Definition: Providing broad framework

Quality of Design:
The degree of excellence, which is a function of a
products specifications.
Example: Compare a Cadillac Seville with a Honda Civic. The Seville is
a luxury car with specially designed features and the Civic is an
economy car with standard features. Both are designed to provide
transportation but the design quality are obviously different.

Quality of Conformance/Process:
The degree of excellence, which is a measure of how
well the product meets its specifications.
Example: If the Honda Civic does what it is designed to do and does it
well, quality exists. If an economy car is designed to provide reliable,
low-cost, low-maintenance transportation, the desired quality exists.
Why we measure quality?
The benefits of measuring quality include:

You will be able to identify where service/product needs
improving in the view of your users.

It will enable you to provide a service/product that is
more closely aligned with the expectations of your
users.

Measuring the quality
Gravins Product Quality (eight
determinants)
1. Performance
2. Features
3. Reliability
4. Conformance
5. Durability
6. Serviceability
7. Aesthetics
8. Perceived Quality

Parasuramans Service Quality
(ten determinants)
1. Tangibles
2. Reliability
3. Responsiveness
4. Assurance
5. Empathy
6. Availability
7. Professionalism
8. Timeliness
9. Completeness
10. Pleasantness
Follows the evolution of quality management.
Quality Inspection:
Does not create quality but it helps to control it.
Aim is to prevent nonconformities by
Finding and
Eliminating
the causes of non-conformance
Achieve a basic level of quality.
Quality Control
A system used to maintain a desired level of quality in a product/service.
Compare the output of a product, service or process with a specified standard and
take remedial actions in case of discrepancy between two.
Goal is to prevent defects at the very source.
Relies on effective
Feedback system and
Procedure for corrective action

Both the Quality inspection and Quality control are detection approach
Hierarchy of quality
Quality Assurance:
Aimed at preventing the mistakes.
Develop a formal system that continually survey the effectiveness of quality philosophy of
the company.
The quality assurance team thus audits various departments and assist in
meeting their responsibilities for producing quality product
All those planned or systematic activities needed to provide adequate confidence that a
product/service will fulfill the requirements for quality.
Total Quality Management
Management based approach towards quality.
Based on the participation of all its members.
Aim is to achieve a long-term success through
customer satisfaction, and
benefits to all members of the organisation and society.
Quality is the responsibility of all the employees and departments
Workers >> run the system,
Manager >> design and improve the system,
Top management >> provide leadership and team spirit
Hierarchy of quality Contd
Inpection
Checking work
after the even.
Identify sources
of non-
conformance.
Take corrective
action.




Quality control
Self-inspection.
Quality planning
and procedure.
Use of basic
statistics.
Quality manual.
Use of process
performance data.



Quality assurance
Develop quality
systems.
Use of quality cost.
Quality planning.
Use of statistical
process control.
Involve non-
operations function.


TQM
Teamwork.
Employee
involvement.
Process
management.
Performance
measurement.
Involves:
o All functions
o Suppliers
o Customer
Hierarchy of quality .contd
Source: Hill(2000) and Wright (1999)
Cost of Quality
Achieving quality is not enough.
A true measure of quality effort.
For a competitive product/service, there should be a balance between quality and cost
factors.
Analysis of cost of quality is a significant management tool
a method of assessing and monitoring the effectiveness of quality management
a means of determining the problem areas and action priorities
Like the costs of other activities, these costs can be budgeted, monitored and analyzed.
Costs of those activities associated with the quality and can be classified as (The American
Society for Quality Control in 1971)
Prevention cost
Appraisal cost
Failure cost
o Internal failure cost
o External failure cost
Cost of Quality: Prevention Costs
These are associated with
Design
Implementation and
Maintenance
of quality management system
Prevention costs are planned and incurred prior to production or operation.

Prevention activities includes:
Product or service requirements:
Determination of the requirements and setting of the corresponding specifications
Quality planning:
Creation of quality, reliability, production, supervision, process control, inspection, and other
special plans required to obtain quality objectives
Quality assurance:
Creation and maintenance of quality management system
Inspection Equipment:
Design, development and/or purchase of equipments for use in inspection work
Training
Development, preparation, and maintenance of quality training for operators, supervisors and
managers to both achieve and maintain capability.

Prevention activities results in the cost of getting a product/service right the first time
Cost of Quality: Appraisal Costs
These are associated with
Suppliers and
Customers
evaluation of purchased material, processes, intermediate and finished product/ service to assure
conformance with the specified requirements.

Appraisal activities includes:
Verification:
Incoming material, process, setup, running process, intermediate and finished product/service
Product/service performance appraisal against the agreed specification.
Quality audits:
Checking if the quality management system is performing satisfactorily.
Vendor rating:
Assessment and approval of all the suppliers - of both product and service
Inspection Equipment:
Calibration and maintenance of equipment used in all inspection activities

Appraisal activities results in cost of checking product/service is right
Cost of Quality: Internal Failure Costs
These costs occur when the product/service fails to reach the designed standard
Detected before the transferring product to customer
Internal failures include:
Scrap:
Defective products that can not be repaired, used or sold.
Rework or rectification:
The correction of defective material or errors to meet the requirements.
Reinspection:
The re-examination of the product or work that has been rectified.
Downgrading:
Product is usable but does not meet the specifications and sold as second quality at a lower
price.
Waste:
Activities of doing unnecessary work or holding the stock as a result of errors, poor organization,
wrong material and generally accepted losses etc.
Failure analysis:
Activities required to establish the causes of internal product and service failures.
Cost of Quality: External Failure Costs
These costs occur when the product/service fails to reach the designed standard
Not detected until product is transferred to customer

External failures include:
Repair and servicing:
either of returned product or those in the field.
Warranty:
Failed products which are replaced or service redone under guarantee.
Complaints:
All work and cost associated with the servicing of customers complaints.
Returns:
The handling and investigation of rejected products, including transport costs.
Liability:
The result of product liability litigation and other claim, which may include change of
contract.
Loss of goodwill:
Impact on reputation and image which impinges directly on future prospects for sales.

External and internal failures result in cost of getting the product wrong
Measuring and Reporting
Quality Costs
Index numbers
ratios that measure quality costs against a base
value
labor index
ratio of quality cost to labor hours
cost index
ratio of quality cost to manufacturing cost
sales index
ratio of quality cost to sales
production index
ratio of quality cost to units of final product
QualityCost Relationship
Cost of quality
Difference between price of nonconformance and
conformance
Cost of doing things wrong
20 to 35% of revenues
Cost of doing things right
3 to 4% of revenues
Profitability
In the long run, quality is free
Quality Management and
Productivity
Productivity
ratio of output to input
Yield: a measure of productivity



Yield=(total input)(% good units) + (total input)(1-%good units)(% reworked)
or
Y=(I)(%G)+(I)(1-%G)(%R)
Product Cost
Y
R K I K
r d
) )( ( ) )( (

Product Cost
where:
K
d
= direct manufacturing cost per unit
I = input
K
r
= rework cost per unit
R = reworked units
Y = yield
Computing Product
Yield for Multistage Processes
Y = (I)(%g
1
)(%g
2
) (%g
n
)
where:
I = input of items to the production process that will result in
finished products
g
i
= good-quality, work-in-process products at stage i
QualityProductivity Ratio
QPR
productivity index that includes productivity and quality
costs
QPR =
(non-defective units)
(input) (processing cost) + (defective units) (reworked cost)
Cost of Quality: Relationship between quality cost and organization
capability
Organization capability:
Ability to make a quality product or
service acceptable to customers
Where the organization
capability is low;
Total direct quality costs are
high
Failure costs predominate
As the ability is improved;
Both the failure costs and
total costs drop steeply
Total direct cost and their
divisions vary considerably;
from industry to industry, and
from site to site
Failure
Cost
Appraisal
Cost
Prevention
Cost
Organization Capability
I
n
c
r
e
a
s
i
n
g

Q
u
a
l
i
t
y

C
o
s
t

Relatioship between cost of quality and
organizational capability
Quality, Productivity and Profitability
Productivity:
Measures the efficiency of a production system.
Higher productivity means.
Producing more from a given amount of input or
Producing a given amount with a minimum level of input
Quality:
Conformance to specification or standard or
Making a product right the first time
Reduction of scrap, rework and hence,
Total cost involved and resources used
More time for making defect free output
Improved
Quality
Reduced
Internal
Failure cost
Improved
Efficiency of
Operation
Reduced
Appraisal
cost
Reduced
External
Failure cost
Increased
Conforming
Output
R
e
d
u
c
e
d

C
o
s
t

Increased
Productivity
I
n
c
r
e
a
s
e
d

P
r
o
f
i
t
a
b
i
l
i
t
y

Quality Pioneers: Quality Gurus!
Walter A. Shewart
Pioneer of Modern Quality Control.
Recognized the need to separate variation into assignable and
unassignable causes.
Founder of the control chart.
Originator of the plan-do-check-act cycle.
Perhaps the first to successfully integrate statistics, engineering, and
economics.
Defined quality in terms of objective and subjective quality.
Objective quality
Subjective Quality

Quality Pioneers: Quality Gurus! ....Contd
W. Edward Deming (1900 - 1993)
Key to quality: reducing variation
All processes are vulnerable to loss of quality through variation: if levels of variation are managed, they
can be decreased and quality raised
Studied under Shewart at bell laboratory.
Demings main contributions:
Theory of variance: controllable and uncontrollable variance.
PDCA cycle: Core element is Management Team
Plan what is needed
Do it (what has been planned)
Check that it (plan) works
Act to correct any problems or improve performance
Fourteen points for quality and productivity.
Seven deadly sins and diseases.
Out of Crisis (1984)
Having a satisfied customer is not enough.
Profit in the business comes from
repeat customers
customers that boast about your product and service
customers that bring friends with them
Necessary to anticipate customer needs

Quality Pioneers: Quality Gurus! ....Contd
Joseph M Juran (1904 - 2008)
Companywide quality management cannot be delegated
Well known for helping Japanese companies to improve quality.
Jurans contributions:
Defined quality as fitness of use and categorized the cost of quality
Developed quality habit: a four-step process
Define a specific goal
Make plan to achieve that goal
Assign clear responsibilities
Base the award on the result
Developed the juran trilogy
for quality management
Quality planning
Quality control and
Quality improvement
Quality
Control
Quality
Planning
Quality
Improvement
Holding gain
Pareto
Analysis
Breakthrough
Project-by-project
Juran
Trilogy
Quality Pioneers: Quality Gurus! ....Contd
Jurans contributions (Contd):
Structured CWQM concept
essential for senior managers to
involve themselves
define the goals
assign responsibilities
measure progress
empowerment of the workforce
quality linked to human relations and teamwork
key elements
identifying customers and their needs
creating measurements of quality
planning processes to meet quality goals
continuous improvements
Enlightened the world on the concept of the vital few, trivial many which is
the foundation of Pareto charts
Quality Pioneers: Quality Gurus! ....Contd
Philip Crosby (1926 2001)

Crosbys contributions:
Well known for his concept of quality is free and zero defect
Quality management: four absolutes of quality
quality is defined as conformance to requirements, not as goodness or elegance
the system for creating quality is prevention, not appraisal
the performance standard must be Zero defects, not thats close enough
the measurement of quality is the Price of Nonconformance, not indexes
Developed fourteen steps to quality improvement

1992: Quality, meaning getting everyone to do what they have agreed to do and to do it
right first time, is the skeletal structure of an organization, finance is the nourishment
and relationships are the soul

Quality Pioneers: Quality Gurus! ....Contd
Kaoro Ishikawa (1915 1989)
Ishikawas contributions:
Developed concept of true and substitute quality characteristics
True characteristics are the customers view of product performance.
Substitute characteristics are the producers view of product performance.
Degree of match between true and substitute ultimately determines customer
satisfaction.
Developed cause and effect diagram and assembly.
Advocate of the use of seven basic tools of quality control.
Pareto Analysis which are the big problems?
Cause and effect diagram what causes the problem?
Stratification how is the data made up?
Check sheets how often it occurs or is done
Histograms what do overall variations look like?
Scatter charts what do the relationships between factors?
Process control charts which variations to control and how?
Quality Pioneers: Quality Gurus! ....Contd
Kaoro Ishikawa (Contd)
Ishikawas contributions:
Advanced use of quality circle
Developed the Japanese Total Quality Control. It contains six fundamental principles:
Quality first not short-term profits first.
Consumer orientation not the producer orientation (thinking from stand point of
other party)
Next process is your customer breaking down the barrier of sectionalism.
Use facts and data to make presentations utilization of statistical method.
Respect for humanity as a management philosophy participation of all the
employees of the organization in quality control
Cross functional management by divisions and functions.

Quality Pioneers: Quality Gurus! ....Contd
Genichi Taguchi (1924 2012)
Taguchis contributions:
Emphasized an engineering approach to quality - producing target goal or requirements
with minimal product performance variation in customers environment.
Identified three distinct types of noise (variation in product performance):
External Noise variables in environments or condition of use (temperature,
humidity, dust) that disturbs product function.
Internal Noise changes that occur as a result of wear or storage.
Unit-to-unit Noise differences between individuals products that manufactured to
the same specifications.
Defined three basic forms of loss functions (deviation from target is loss to society):
Smaller is better (impurity level, defect counts, tool wear, weld width)
Bigger is better (process yield, fuel efficiency, weld strength, tool life)
Nominal is best ( outside-inside diameter, humidity)

Quality Pioneers: Quality Gurus! ....Contd

Taguchis contributions:
Focused on design for quality by defining three design levels:
System design (primary) functional design focused on relevant technology or
architectures.
Parameter design (secondary) a means of both reducing cost and improving
performance without removing causes of variation.
Tolerance design (tertiary) a means of reducing variation by controlling causes,
but at an increased cost.

Recognition of, and strategies for dealing with, parameter design is a major
contribution

Quality Pioneers: Quality Gurus! ....Contd
Shigeo Shingo (1909 1990)
Statistical quality control can lower, but not eliminate, defects.
Shingos contributions:
Proposed the poka-yoke (mistake-proofing) system to totally eliminate defects.
A human- or machine-sensor-based system of 100 percent source inspection, self-
check or successive checks:
to detect errors when or as they occur and
to correct them on the current unit of production as well as systemwide.
Zero Quality Control System consists of four fundamental principles:
Use source inspection application of control functions at the stages where defect
originates.
Always use 100 percent source inspection rather than using sampling inspection.
Minimize time to carry out corrective action when errors appear.
Set up poka-yoke devices such as sensors, monitors according to product and
process requirements.

Demings Quality Chain Reaction
Shewharts broad quality concept leading to
chain reaction
Higher quality, leads to higher productivity, which
in turn leads to long term competitive strength.
How it works!
If you focus on quality and improve the quality,
customer satisfaction goes up. That results in
increased market share and companies can
lower prices.
This is what is external to organization
and viewed by the world.
Internally if quality goes up , productivity
increases. As productivity increases the costs
goes down.
This point is what most could not visualize
or accept easily.
With reduced costs and reduced prices the
profits go up.
Quality
Costs
Productivity
Improves
Market
Share
Prices
Profits
Customer
Satisfaction
External
Internal
Demings 14 Principles for Quality and Productivity
1. Create constancy of purpose towards improvement
create and publish to employees a statement of the aims and purposes of the company. The
management must demonstrate constantly their commitment to this statement.
2. Adopt the new philosophy.
Adopt new philosophy and put it into a practice by teaching it to employees, customers and suppliers.
i.e. management should adopt his philosophy rather than merely expect the workforce to do so. For
an example:
folklore: quality and productivity have inverse relationship (Outmoded relationship):



Now ask the workers: why does productivity increases as the quality improves?
less rework, fewer mistakes, fewer delay, better use of machine time and material etc.
True relationship between quality and productivity (modern view of the relationship):



3. Cease dependence on mass inspection to achieve quality.
If variation is reduced, there is no need to inspect manufactured items for defects, because there
won't be any. Implication is that improve processes and build quality into the product in the first place.
Quality
Productivity
Quality
Productivity
Demings 14 Principles for Quality and Productivity .....Contd
4. End the practice of awarding business on the basis of price tag alone
Instead, minimize total cost in the long run (low bids do not always ensure quality). Reduce
the number of suppliers for the same item by eliminating those that do not qualify with
statistical evidence of quality. Move toward a single supplier for any one item, based on a
long-term relationship of loyalty and trust.
Promotes mistrust between buyer and vendor and thereby, creates a short-term price-
dependent relationship.
Increased total cost due to multiple vendors for the same items
Increased variability in incoming quality due to intervendor variability
The security of the long-term relationship allows the supplier to innovate/change its
process to meet the need of the need of the buyer
5. Improve constantly, and forever, the system of production, service
Constantly strive to reduce variation by eliminating the special causes and reducing the
effect of common causes. This improves quality which, in turn, improved the productivity,
and thus constantly decrease costs. It is management's job to work continually on the
system (design, incoming materials, maintenance, improvements of machines, training,
supervision, retraining).
Defect prevention and process improvement are carried out by the use of statitistical
methods.
Continuous cycle of process improvement is based on a scientific method called
demings cycle (PDCA cycle).
Demings 14 Principles for Quality and Productivity .....Contd
6. Institute more thorough, better job-related training
training is for skills, unlike education, which is for knowledge. New skills are required to
keep up with changes in materials, methods, product design, machinery, techniques and
service.
Institute modern methods of training on the job for all, including management, to make
better use of every employee.
Statistical thinking will one day be as necessary for efficient citizenship as the ability
to read and write H.G. Wells

7. Adopt and institute leadership for the management of people, recognizing their different
abilities, capabilities, and aspiration.
The aim of leadership should be to help people, machines, and gadgets do a better job.
Leadership of management is in need of overhaul, as well as leadership of production
workers.
The responsibility of managers and supervisors must be changed from sheer numbers to
quality.
Management must ensure that immediate action is taken on reports of
inherited defects, maintenance requirements, poor tools, fuzzy operational definitions,
and other conditions
detrimental to quality.