Quality Management Philosophy Concepts 2014 Part 1 ST - Ver.

QUALITY
MANAGEMENT
January 2014
Quality Management
QUALITY MANAGEMENT
Introduction
Philosophy & Concepts
Tools and Techniques used in Total Quality
management
International Quality Standards and Awards
January 2014
Quality Management
Literature
Quality Management for Organizational
Excellence
by David L.Goetsch and Stanley B.Davis
Jurans Quality Handbook

by Joseph M. Juran and Joseph A De Feo
January 2014
Quality Management
QM Philosophy & Concepts
The Total Quality Approach

Quality and Global Competitiveness
Strategic Management
Ethics
Partnering
Quality Culture
Customer Satisfaction
Employee Empowerment
Leadership and Change
Teambuilding and Teamwork
Effective Communication
Training
January 2014
Quality Management


Ethics
Partnering
Quality Culture
Training
January 2014
Quality Management
What is Quality?
January 2014
Quality Management
Definition of Quality
Joseph M.Juran:"Fitness for use."
Philip B. Crosby: "Conformance to requirements.
Peter Drucker: "Quality in a product or service is not what
the supplier puts in. It is what the customer gets out and is
willing to pay for
ISO 9000: "Degree to which a set of inherent
characteristics fulfills requirements
Six Sigma: "Number of defects per million opportunities.
American Society for Quality:
a. The characteristics of a product or service that bear on its
ability to satisfy stated or implied needs;
b. A product or service free of deficiencies.
January 2014
Quality Management
Quality
Quality has been defined in a number of ways.
When viewed from a consumers perspective,
it means meeting or exceeding customer
expectations.
..providing him with superior value
January 2014
Quality Management
Dimensions of Quality
Dimension
Performance
Features
Conformance
Reliability
Durability
Serviceability
Response
Aesthetics
Reputation
January 2014
Product example
Mobile phone
Signal, Battery charge
Internet, camera,......
Workmanship
Mean-time-to-failure
Useful life
Ease of repair
Courtesy of dealer
Surface finish
Customer report ranking
Quality Management
Two Views of Quality

How well the features of a product or service
meet the customer need and therefore
provide them with satisfaction => higher
quality costs (usually) more
Freedom from failures => higher quality costs
(usually) less
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10
Total Quality
Total quality is an approach to doing business
that attempts to maximize an organizations
competitiveness through the continual
improvement of the quality of its products,
services, people, processes, and
environments.
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11
Managing for Quality (Juran)

A set of universal methods that any
organization, whether a business, an agency, a
university or a hospital can use to attain
superior results by designing, continuously
improving and ensuring that all products,
services and processes meet customer and
stakeholder needs.
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Jurans trilogy
Designing and planning for Quality
Compliance, controlling and assuring
quality
Improving quality
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13
Jurans trilogy
Creating processes to design goods and services
to meet needs of the stakeholders (internal and
external). Understand needs of customers
Creating processes to control quality. Ensure
compliance to design criteria
Creating a systematic approach to improve
continuously. Failures must be discovered and
remedied.
=> Create functions and skills to do the things
above
January 2014
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Financial trilogy
Financial planning
Annual financial and operational budgets (revenues, costs and
profits)
Financial goals for the organization and its divisions
Financial control
Evaluation of actual financial performance and taking action on
the differences
Cost control, expense control, risk management, inventory
control, etc.
Financial improvement
Improvement of financial results
Cost reduction projects, new facilities, new product
development, M &A, joint ventures, etc
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Quality planning
Establish the project and design goals
Identify the customers
Discover the customer needs
Develop the product or service features
Develop the process features
Develop the controls and transfer to operations
=> Customer customer needs- product features
process features- process control features
January 2014
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Quality planning tools
Benchmarking
Brainstorming
Competitive analysis
Control charts
FMEA
Flow diagram
Process capability
Scatter diagram
Etc.
January 2014
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17
Quality Control
Assure Repeatable and Compliant Processes
January 2014
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18
Quality Control Tools

SPC (Statistical Process Control)
Problem Solving methods
Poka Yoke
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19
Quality Improvement
Create breakthroughs in Performance
January 2014
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20
Quality Improvement Tools

Six Sigma
RDMAIC process
January 2014
Recognize
Define
Measure
Analyze
Improve
Control
Quality Management
21
Jurans trilogy
January 2014
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22
The Total Quality Approach to

Quality Management
Key characteristics of the total quality approach are
as follows:
strategically based,
customer focus,
long-term commitment,
teamwork,
employee involvement and empowerment,
continual process improvement,
education and training,
January 2014
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23
The Total Quality Approach to

Quality Management
The rationale for total quality can be found in the

need to compete in the global marketplace.
Countries that are competing successfully in the
global marketplace are seeing their quality of living
improve. Those that cannot are seeing theirs
decline.
January 2014
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24
The Total Quality Pioneers

W. Edward Deming is best known for his Fourteen Points, the
Deming Cycle
Joseph M. Juran is best known for the Pareto Principle, and the
Juran Trilogy.
Armand V. Feigenbaum is best known for his Total Quality
Control.
Philip B. Crosby is best known for his Quality is Free and the
Zero Defects program
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Ethics
Partnering
Quality Culture
Training
January 2014
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26

Several factors can inhibit competitiveness,
including those related to business and
government, family, and education.
In a global marketplace quality is the key to

competitiveness.
Total Quality approach minimizes the Cost of
Quality, making products or services more
competitive
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Costs of Quality
Prevention
Appraisal and inspection
Internal failure
External failure
COPQ
COPQ = Costs of Poor Quality
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Prevention Costs
Quality Planning activities
FMEA analysis
Control Plans
Quality training
Product design Verification
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Appraisal and Inspection Costs
Testing product
Reviewing documents
Inspecting equipment and supplies
End of line inspection
Product audits
Etc.
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Internal Failure Costs
Rework on product
Scrap of non conforming product
Correcting database errors
Stocking extra parts to replace defective
components
Etc,
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External Failure Costs

Warranty claims
Product (safety) recalls
Investigating complaints
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Direct Cost of Poor

Quality (4 8% of
Sales)
Scrap
Rework
Warranty
Customer Return
Loss of Customer Loyalty

Engineering change
Excessive inventory
Late delivery
Excessive overtime
Excessive employee turnover
Expediting costs
Indirect Cost of Poor

Quality (15 25% of
Sales)
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Cost of Quality
Costs
Total
Failure
Appraisal & Prevention

Freedom from failures
100%
Jurans Cost of Quality

January 2014
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Cost of Quality
Cost of Quality
Quality Costs
Junk
Zone
Excess
Quality
Profit
Zone
Customer Value
of Quality
Freedom from Failures
January 2014
Quality Management
100%
35
Quality Cost as % of Sales
January 2014
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36
Cost distribution as a % of total cost of

Quality
3,5 %
2,5 %
26 %
Appraisal
Internal Failure
68 %
January 2014
Prevention
External Failure
Quality Management
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COPQ - Product Safety Recalls - USA
Number of Recalls by Product Category

Home Products 1541
Child Products (not including toys) 1267
Toys 889
Sports and Recreation Products 846
Outdoor Products 509
Specialty Products 43
January 2014
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Number of Product Recalls By Hazard Percent

Fire and Fire-Related Burns 1562
Choking 837
Laceration 503
Fall Hazard 489
Electrocution / Electric Shock 392
Vehicle Accident 361
Lead 343
Strangulation 276
Burn (Non-Fire Related) 231
Entrapment 181
January 2014
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Strollers Recalled by Britax Due to Partial Fingertip Amputation Hazard

The hinge on the folding mechanism on B-Agile single and double strollers and BOB Motion
strollers can injure consumers when consumers fold the strollers. January 30, 2014
Fred & Friends Recalls Infant Pacifiers Due to Choking Hazard

The Chill Baby Artiste, Volume and Panic pacifiers fail to meet federal safety standards. January
30, 2014
West Marine Recalls Folding Bicycles; Frames Can Break Causing Riders to
Fall
West Marine Jetty Express 2 and Port Runner 2 bicycle frames can break. Bikes are used in and
around docks and marinas. January 30, 2014
Gree Expands Dehumidifier Recall to Include GE Brand Dehumidifiers Due

to Serious Fire and Burn Hazards
The dehumidifiers can overheat, smoke and catch fire. Fires reported. January 29, 2014
IKEA Expands Recall of Junior Beds that Pose Laceration Hazard

The metal rod connecting the guard rail to the bed can break in use. January 28, 2014
Bodum USA Recalls Coffee Presses Sold Exclusively at Starbucks Due to

Laceration and Burn Hazards
The glass carafe can fall out of the metal frame and plastic base of the coffee press and break or
shatter. January 28, 2014
Reebok-CCM Recalls Senior Hockey Elbow Pads Due to Risk of Elbow

Injury
Foam padding inside the elbow pads can crack, fracture or split. January 28, 2014
System Sensor Recalls Reflected Beam Smoke Detectors Due To Failure to

Alert Consumers in a Fire (Recall Alert)
When used with certain power supplies, the smoke detectors, used mostly in commercial
January 2014 buildings, can fail to send a signal Quality
to the Management
fire alarm control panel that sounds the alarm
40
Number of Product Recalls by Country of Origin

China 2,124
United States 685
Taiwan 299
Mexico 106
Hong Kong 91
Canada 74
Japan 70
Thailand 64
India 61
Korea 57
January 2014
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COPQ car recalls USA

Automakers recalled about 15.5 million vehicles in 2011 compared with 20 million in
2010, according to figures released by the National Highway Traffic Safety
Administration. The figure was the fourth lowest in the last decade.
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COPQ car recalls USA

January 30, 2013
Toyota Motor on Wednesday announced recalls involving

more than 1 million vehicles in the U.S
Combined, it's one of the largest recalls so far this year
Most are Corollas, some are Lexus IS sedans
One recall involves airbags and the other focuses on wipers
Last month, Toyota agreed to pay more than $1 billion in

the U.S. to settle lawsuits where vehicle owners said the
value of their cars and SUVs plummeted after the company
recalled millions of vehicles because of sudden-acceleration
issues
January 2014
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Investment in Quality Cost
January 2014
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The most important key in maximizing competitiveness is the

human resource.
The Competitive Edge is in the Quality of the People
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Ethics
Partnering
Quality Culture
Training
January 2014
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Strategic management is management that bases
all actions, activities, and decisions on what is
most likely to ensure successful performance in
the marketplace.
The two major components of strategic
management are strategic planning and strategic
execution.
Part of strategic planning is thinking creatively to
eliminate sacred cows that work against
competitiveness.
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Strategic planning
Who are we?

Where are we going?
How will we get there?
What do we hope to accomplish?
What are our core competencies?
What are our strengths and weaknesses?
What are our opportunities and threats?
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Strategic Planning Process

Step 1
SWOT Analysis
Step 2
Develop the Vision
Step 3
Develop the Mission
Step 4
Develop the Guiding Principles
Step 5
Develop the Broad Strategic Objectives
Step 6
Develop the Specific Tactics
January 2014
(environmental assessment)
Quality Management
(action plan)
49
SWOT analysis
SWOT analysis is defined as a structured
approach to evaluating the strategic position
of a business by identifying its strengths,
weaknesses, opportunities and threats
SWOT analysis identifies the core
competencies of the organization
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Core competencies
Core competencies are things an organization

does so well they can be viewed as providing a
competitive advantage.
January 2014
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SWOT analysis
Opportunities
Threats
=> apply to External Factors
Strengths
Weaknesses
=> apply to Internal Factors
January 2014
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SWOT example
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SWOT analysis
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Vision
An organizations vision is its guiding force,

the dream of what it wants to become and
its reason for being.
January 2014
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Vision Statement Apple

Apple is committed to bringing the best
personal computing experience to students,
educators, creative professionals and
consumers around the world through its
innovative hardware, software and Internet
offerings
January 2014
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Vision Statement JC
JC will be recognized by its customers as

global and diversified technology and
industrial leader
January 2014
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Mission
An organizations mission describes who an

organization is, what it does, and where it is
going.
January 2014
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Mission Statement Apple

Apple Computer is committed to protecting the
environment, health and safety of our employees,
customers and the global communities where we operate.
We recognize that by integrating sound environmental,
health and safety management practices into all aspects of
our business, we can offer technologically innovative
products and services while conserving and enhancing
recourses for future generations.
Apple strives for continuous improvement in our
environmental, health and safety management systems and
in the environmental quality of our products, processes and
services
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Mission Statement JC
Exceeding Our Customers Increasing
Expectations
Customers are the reason we are in business. They
are at the core of our reputation. Our focus must
be to help them be successful.
Our Mission is founded on quality, innovation,
productivity and responsiveness.
January 2014
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Guiding Principles
An organizations guiding principles establish
the framework within which it will pursue its
mission. Together, the guiding principles
summarize an organizations value system,
the things it believes are most important.
January 2014
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JC Values (Guiding Principles)

Integrity
We act with honesty, fairness, respect and safety, furthering a culture of

unquestioned integrity. This strengthens relationships across businesses and
functions.
Our future depends on us serving as customer advocates and increasing our

customers success. We are proactive, hard-driving and easy to work with. We
offer expert knowledge and practical solutions. We deliver on our promises.
Employee Engagement
As we grow, so will our people. We foster a culture that promotes excellent

performance, teamwork, inclusion, leadership and growth. Our employee and
leader diversity will mirror our global markets and population.
January 2014
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JC Values (Guiding Principles)

Innovation
We believe there is always a better way. We encourage change and seek

the opportunities it brings. We will commercialize innovations globally at
an accelerating pace.
Sustainability
Through our products, services, operations and community involvement, we

promote the efficient use of resources to benefit all people and our planet. The
environment and sustainability are key elements of our business proposition
January 2014
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Broad strategic objectives

An organizations broad strategic objectives
translate its mission into more specific terms
that represent actual targets at which the
organization aims. The objectives are more
specific than the mission, but they are still
broad.
January 2014
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JC (Automotive) Broad Strategic

Objectives
Global presence
Diversified customer and product portfolio
Vertical integration of components across all vehicle
segments
Established market leader in rapidly emerging Chinese
market
Investing in technology and advanced development
Progressing long-term strategy of building customer
value and profitable growth by transforming into a
technology company
January 2014
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Action plan
Well defined, finite projects and activities
undertaken for the purpose of specific desired
outcomes in support of the broad objectives.
January 2014
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Strategic Planning Process

Step 1
SWOT Analysis
Step 2
Develop the Vision
Step 3
Develop the Mission
Step 4
Develop the Guiding Principles
Step 5
Develop the Broad Strategic Objectives
Step 6
Develop the Specific Tactics
January 2014
(environmental assessment)
Quality Management
(action plan)
67
Strategies that organizations can adopt for gaining a
sustainable competitive advantage are
cost leadership,
differentiation, and
market-niche strategies.
Total Quality can be the most effective cost

leadership or differentiation strategy
improve efficiency, cut costs
continuous improvement of the product features

January 2014
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Integration of Quality programs in strategic
plan is important for their success
This includes annual quality goals and
subgoals
January 2014
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Strategic Execution
Even the best strategic plan will serve no
purpose unless it is effectively executed.
Progress of achieving goals is measured
by:
KPIs (Key Process Indicators)
Quantitative reports on performance
Audits
January 2014
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Ethics
Partnering
Quality Culture
Training
January 2014
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71
Ethics
Ethics is about doing the right thing within a
moral framework.
The most common impediment to ethical
conduct is human nature because people
tend to behave according to perceived
personal interest.
January 2014
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Ethics
The Total Quality approach cannot be
successfully implemented in an organization
that fails to subscribe to high standards of
ethical behavior
January 2014
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Ethics
Many of the fundamental elements of total quality
depend on trust and ethical behavior, including
communication,
interpersonal relations,
conflict management,
problem solving, teamwork,
employee involvement and empowerment, and
customer focus.
January 2014
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Ethics
Sarbannes Oxley (SOX) Federal law in the US.
Top management must now individually
certify the accuracy of financial information.
Penalties for fraudulent financial activity are
much more severe
January 2014
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Ethics
Partnering
Quality Culture
Training
January 2014
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Partnering
Partnering means working together for mutual
benefit. It involves pooling resources, sharing costs,
and cooperating in ways that mutually benefit all
parties involved in the partnership.
Partnerships may be formed
internally (among departments) and
externally with suppliers, customers
January 2014
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Partnering with suppliers

85% of the added value comes from suppliers
(automotive industry)
Traditional model (based on price only)
Total Quality model partnership from design
to delivery
January 2014
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Partnering with Customers

The rationale for forming customer
partnerships is customer satisfaction.
The best way to ensure customer satisfaction
is to involve customers as partners in the
product development process.
Doing so is, in turn, the best way to ensure
competitiveness.
Customer-defined quality is a fundamental
aspect of total quality.
January 2014
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Partnering with Suppliers &

Customers
Invisible wall
Suppliers
Suppliers
January 2014
Customer
Customer
Quality Management
End Users
End Users
80

Ethics & Corporate Social Responsibility
Partnering and Strategic Alliances
Quality Culture
Training
January 2014
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Quality Culture
One of the greatest obstacles in implementing Total Quality is the
cultural behavior
Why?
Successful Total Quality implementation requires cultural change
People do not like to change!
Resisting change is natural human behavior
Fear
Uncertainty
Loss of control
More work
Emotional transition
January 2014
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Total Quality culture
Short vs long term objectives

Managers as coaches vs bosses
Finger pointing vs problem solving
Supplier cooperation
Continuous improvement
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Behaviour matches slogans
Customer input is actively sought and used to
continually improve quality
Employees are both involved and empowered
Work is done in teams
Executive level managers are both committed and
involved, responsibility for quality is NOT delegated
Sufficient resources are made available where and
when they are needed to ensure the continuous
improvement of quality
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Education and training are provided to ensure that
employees at all levels have the knowledge and skills
needed to continuously improve quality
Reward and promotion systems are based on
contributions to the continual improvement of
quality
Fellow employees are treated as internal customers
Suppliers are treated as partners
January 2014
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QUALITY

Jurans Quality Handbook

QM Philosophy & Concepts

The Total Quality Approach

QM Philosophy & Concepts

Quality and Global Competitiveness

Two Views of Quality

Managing for Quality (Juran)

Quality planning tools

Quality Control Tools

Quality Improvement Tools

The Total Quality Approach to

The Total Quality Approach to

The rationale for total quality can be found in the

The Total Quality Pioneers

QM Philosophy & Concepts

Quality and Global Competitiveness

Quality and Global Competitiveness

In a global marketplace quality is the key to

COPQ = Costs of Poor Quality

Appraisal and Inspection Costs

Internal Failure Costs

External Failure Costs

Direct Cost of Poor

Loss of Customer Loyalty

Indirect Cost of Poor

Appraisal & Prevention

Jurans Cost of Quality

Quality Cost as % of Sales

Cost distribution as a % of total cost of

COPQ - Product Safety Recalls - USA

Number of Recalls by Product Category

COPQ - Product Safety Recalls - USA

Number of Product Recalls By Hazard Percent

Strollers Recalled by Britax Due to Partial Fingertip Amputation Hazard

Fred & Friends Recalls Infant Pacifiers Due to Choking Hazard

Gree Expands Dehumidifier Recall to Include GE Brand Dehumidifiers Due

IKEA Expands Recall of Junior Beds that Pose Laceration Hazard

Bodum USA Recalls Coffee Presses Sold Exclusively at Starbucks Due to

Reebok-CCM Recalls Senior Hockey Elbow Pads Due to Risk of Elbow

System Sensor Recalls Reflected Beam Smoke Detectors Due To Failure to

COPQ - Product Safety Recalls - USA

Number of Product Recalls by Country of Origin

COPQ car recalls USA

COPQ car recalls USA

Toyota Motor on Wednesday announced recalls involving

Last month, Toyota agreed to pay more than $1 billion in

Investment in Quality Cost

Quality and Global Competitiveness

The most important key in maximizing competitiveness is the

QM Philosophy & Concepts

Who are we?

Strategic Planning Process

Develop the Vision

Develop the Mission

Develop the Guiding Principles

Develop the Broad Strategic Objectives

Develop the Specific Tactics

Core competencies are things an organization

An organizations vision is its guiding force,

Vision Statement Apple

JC will be recognized by its customers as

An organizations mission describes who an