CHAPTER 5

QUALITY MANAGEMENT
JJ619 INDUSTRIAL MANAGEMENT

JABATAN KEJURUTERAAN MEKANIKAL

POLISAS
COURSE LEARNING OUTCOMES
Students should be able to :
1.0 Apply the basic concept of industrial
management system in industry.
2.0 Identify the suitable concept industrial
management system in related
industry by group.
 TOPIC OUTLINE
1.0 Identify quality management
2.0 Compare quality certification
3.0 Understand Total Quality
Management
INTRODUCTION
Quality the ability of a product or service to
consistently meet or exceed customer expectations.
Quality is more than just a statistical analysis tool for
manufacturing lines. When done right, quality should
encompass the entire enterprise.
Quality has become a systems approach, rather than
focusing on one part a time and whether its
dimensionally correct. Quality is continuous
improvement.
- Ron Atkinson
INTRODUCTION (cont.)
Quality can be many-fold. Quality can be how conforming my
product is with the customer expectations, but quality is defined
differently in a call center, so the first questions to ask are, What
is my quality? What are we going to measure? What do we want
to improve?.
- Juergen Boenisch
This can be, an aspect of product design, engineering or
equipment tolerances, but also can be service-centric, and have
as much to do with talent and human capital management as
precise and rigorous tolerance-testing mechanisms.

QUALITY MANAGEMENT
Quality management is a management activities and functions
involved in determination of quality policy and its
implementation through means such as quality planning and
quality assurance (including quality control).
Quality management is an organisation-wide approach to
understanding precisely what customers need and consistently
delivering accurate solutions within budget, on time and with
the minimum loss to society.
Quality management will ensure the effective design of processes
that verify customer needs, plan product life cycle and design,
produce and deliver the product or service (incorporates
measuring all process elements, the analysis of performance and
the continual improvement of the products, services and
processes that deliver them to the customer).
QUALITY MANAGEMENT (cont.)
Eight quality management principles form the
basis of the latest version of ISO 9000 :
A customer focus.
Leadership.
Involvement of people.
A process approach.
A system approach to management.
Continual improvement.
Use of a factual approach to decision making.
Mutually beneficial supplier relationships.
THE FOUNDATIONS OF MODERN QUALITY
MANAGEMENT
THE EVOLUTION OF QUALITY
Industrial revolution - smaller jobs, more specialization and less
responsibility for the final product
. Early 1900s - product inspection introduced -Fredrick Winslow
Taylor
. 1924 - statistical control charts - W. Shewhart of Bell Laboratories
. 1930, - acceptance sampling - H.F. Dodge & H.G. Roming of Bell Labs
. WWII - statistical methods began to be more widely accepted,
especially in statistical sampling techniques
. 1950s - quality assurance, statistical quality control methods
introduced to the Japanese - W. Edwards Deming
- cost of quality concepts - Joseph Juran
- total quality control including product design and materials - Armand
Feigenbaum
. 1960s - zero defects emphasize employee performance - P. Crosby
. 1970s - quality assurance methods throughout the entire process
INSIGHT ON QUALITY MANAGEMENT
Successful management of quality requires that
managers have insights on various aspects of
quality. These include :
defining quality in operational terms
The product quality dimensions,
The service quality dimensions,
The determinants of quality.
understanding the costs and benefits of quality,
recognizing the consequences of poor quality,
and
recognizing the need for ethical behavior.
PRODUCT QUALITY DIMENSIONS
1. Performance
Refers to the efficiency with which a product achieves its
intended purpose.
2. Features
Attributes of a product that supplement a products basic
performance.
3. Reliability
The propensity for a product to perform consistently over
its useful design life.
4. Conformance ( specifications and tolerance)
Numerical dimensions for a products performance, such
as capacity, speed, size, durability, color, or the like (easily
quantified and difficult for a service to conform).
PRODUCT QUALITY DIMENSIONS (CONT.)
5. Durability
The degree to which a product tolerates stress or trauma
without failing.
6. Serviceability
Ease of repair easily and cheaply. If service is rapid,
courteous, easy to acquire, and competent, then the
product have good serviceability.
7. Aesthetics
Subjective sensory characteristics such as taste, feel,
sound, look, and smell. We measure quality as the
degree to which product attributes are matched to
consumer preferences.
PRODUCT QUALITY DIMENSIONS (CONT.)
8. Perceived Quality
Quality is as the customer perceives it. Customers imbue
products and services with their understanding of their
goodness. This is perceived quality.
Dimension Example
1.Performance Everythingworks;ridehandling,legroom
2.Aesthetics Interiordesign,softtouch,fitandfinish,gradeof
materialused
3.SpecialfeaturesConvenience PlacementofgaugesandcontrolsGPS,DVDplayer
Hightech
4.Safety/conformance Antilockbrakes,airbags
5.Reliability Infrequencyofbreakdowns
6.Durability Longlife,resistancetorustandcorrosion
7.Perceivedquality Topratedcar,e.g.Cadillac
8.Serviceaftersale Warranties,handlingofcomplaints,maintenance
SERVICE QUALITY DIMENSIONS
1. Tangibles
Include the physical appearance of the service facility, the
equipment, the personnel, and the communication
material.
2. Service Reliability
Differs from product reliability in that it relates to the ability
of the service provider to perform the promised service
dependably and accurately.
3. Responsiveness
The willingness of the service provider to be helpful and
prompt in providing service.
4. Assurance
The knowledge and courtesy of employees and their ability
to inspire trust and confidence.
SERVICE QUALITY DIMENSIONS (CONT.)
5. Time
the speed with which service is delivered.
6. Convenience
the availability and accessibility of the service.
7. Courtesy
the way customer are treated by employees who
come into contact with them.
8. Consistency
the ability to provide the same level of good quality
repeatedly.
SERVICE QUALITY DIMENSIONS (CONT.)
Dimension Example
1.Tangibles Werethefacilitiesclean?Werepersonnelneat?
2.Convenience Wastheservicecentreconvenientlylocated?
3.Reliability Wastheproblemfixed?
4.Responsiveness Werecustomerservicepersonnelwillingandableto
answerthequestions?
5.Time Howlongdidthecustomerhavetowait?
6.Assurance Didthecustomerservicepersonnelseemknowledgeable
abouttherepair?
7.Courtesy Werecustomerservicepersonnelandthecashier
friendlyandcourteous?
8.Consistency Wastheservicequalitygood,andwasitconsistentwith
previousvisits?
DETERMINANTS OF QUALITY
Design
Quality of Design: Characteristics designers specify
for a product or service.
Conformity
Quality of Conformance: The degree to which goods
or services conform to the specifications of the
designers.
Ease of use
Good instructions and labels.
Service after delivery
Recall, repair, replacement, refund.
COST OF QUALITY
Quality affects all aspects of the organization
Quality has dramatic cost implications of;
Quality control costs

Prevention costs costs of preparing and implementing a

quality plan.
Examples : quality improvement programs, training,

monitoring, data collection and analysis, and design

cost.
Appraisal costs cost related to measuring, evaluating,

and auditing materials, parts, products, and services to

assess conformance with quality standards.
Examples : costs of testing, labs, evaluating, inspecting

quality, and the interruption of production to take

samples.
COST OF QUALITY (CONT.)
Quality failure costs
Internal failure costs costs related to detective

products or services before they are delivered to

customer.
Examples : costs of scrap, rework, problem solving ,

material and product losses.

External failure costs costs related to delivering

substandard products or services to customers.

costs of failure at customer site, including returns,

repairs, and recalls.

BENEFIT OF QUALITY
Greater customer Creates a more efficient,
loyalty effective operation
Improvements market Increases customer
share satisfaction and retention
Higher stock prices Reduces audits
Reduced service calls Enhances marketing
Higher prices Improves employee
Greater productivity motivation, awareness, and
and cost reduction morale
Increases profit
THE CONSEQUENCES OF POOR QUALITY
It is important for management to recognize the
different ways in which the quality of a firms products
or services can affect the organization and to take
these into account in developing and maintaining a
quality assurance program.
Some of the major areas affected by quality are :
THE CONSEQUENCES OF POOR QUALITY
Failures will occur. The prevailing quality philosophy is
that prevention is the best cure for quality problems.
(An ounce of prevention is worth a pound of cure).
Poor quality risks injuries, lawsuits, recalls, and regulation.
THE NEED FOR ETHICAL BEHAVIOR
Ethical behavior - what is accepted as good and right in the context of
the governing moral code.
Ethical behavior is a key aspect of Total Quality Management. A clue
to the reason for this may be the importance of participation by the
whole workforce.
Trusting and gaining trust are critical to willing participation.

TRUST
Achieving quality through the efforts of people either involves
supervising them relentlessly; or it involves trusting them.
Employees who trust management are more likely to commit
themselves to the organisations goals.
There is either a virtuous or a vicious cycle at work
Trusting invites trust and commitment.
Suspicion invites grudging acceptance or rebellion.
THE NEED FOR ETHICAL BEHAVIOR (CONT.)
Substandard work
Defective products
Substandard service
Poor designs
Shoddy workmanship
Substandard parts and materials
INTRODUCTION OF ISO
International Organization for Standardization (ISO) is the world's
largest developer of International Standards.
ISO is a network of the national standards institutes of 162
countries, one member per country.
ISO is a non-governmental organization that forms a bridge between
the public and private sectors;
Many of its member institutes are part of the governmental
structure of their countries, or are mandated by their government,
Other members have their roots uniquely in the private sector,
having been set up by national partnerships of industry
associations.
This enables ISO to reach a consensus on solutions that meet both
the requirements of business and the broader needs of society.
INTRODUCTION OF ISO (CONT.)
ISO 9000 is a family of standards for quality management
systems
The ISO 9002 and ISO 9003 are to be discontinued (but
can still be used by those organisations certified against
them during the three year transition period),
ISO 9001 and ISO 9004 are designed to be used together,
but can be used independently.
The ISO Series can form the means by which a holistic
management system can be implemented, into which
quality, health and safety and environmental responsibility
can be integrated, with the audits carried out either
separately or in combination.
QUALITY CERTIFICATION
Certification is known in some countries as registration.
It means that an independent, external body has
audited an organization's management system and verified
that it conforms to the requirements specified in the
standard (ISO 9001 or ISO 14001).
ISO does not carry out certification and does not issue
or approve certificates.
Its promote worldwide standards that will improve
operating efficiency, improve productivity, and reduce costs
Truly international in scope
Certification required by many foreign firms
QUALITY CERTIFICATION (CONT.)

ISO 9000 series - quality management and

assurance
ISO 9001 ~ Suppliers and Designers
ISO 9002 ~ Production
ISO 9003 ~ Inspection and Test
ISO 9004 ~ Quality Management
ISO 14000 - environmental performance
TYPES OF QUALITY STANDARD
ISO 9001
Is named " Quality System - Model for quality assurance in
design / development, production, installation and
servicing."
ISO 9002
Is named " Quality System - Model for quality assurance in
production, installation and servicing."
ISO 9003
ISO 9003 is obsolete.
ISO 9003 Model for quality assurance in final inspection and
test covered only the final inspection of finished product,
with no concern for how the product was produced.
ISO 9000 STRUCTURE
ISO 9001
Quality System Model for
Quality Assurance in design,
development, production,
installation and service
ISO 9000
ISO 9002
Quality System Model for
Quality Assurance in production,
installation, and servicing
ISO 9003
Quality System Model for
Quality Assurance in final
inspection and test
APPLICATION CONCEPT IN QUALITY STANDARD
ISO 9001
ISO 9001 sets out the requirements for an organization
whose business processes range all the way from design and
development, to production, installation and servicing;
ISO 9001 applies in situations when:
a) design is required and the product requirements are
stated principally in performance terms, or they need to be
established, and
b) confidence in product conformance can be attained by
adequate demonstration of a supplier's capabilities in
design, development, production, installation and
servicing.
APPLICATION CONCEPT IN QUALITY STANDARD
(CONT.)
ISO 9002
for an organization which does not carry out design and
development, ISO 9002 is the appropriate standard, since it
does not include the design control requirements of ISO
9001 otherwise, its requirements are identical;
ISO 9002 applies in situations when:
a) the specified requirements for product are stated in
terms of an established design or specification, and
b) confidence in product conformance can be attained by
adequate demonstration of a supplier's capabilities in
production, installation and servicing.
APPLICATION CONCEPT IN QUALITY STANDARD
(CONT.)
ISO 9003
ISO 9003 is the appropriate standard for an organization whose
business processes do not include design control, process control,
purchasing or servicing, and which basically uses inspection and
testing to ensure that final products and services meet specified
requirements.
ISO 9001, ISO 9002, and ISO 9003 are standards in the family,
containing requirements on a supplier
ISO 9002 and ISO 9003 are subsets of ISO 9001
ISO 9002 applies when there is no design
ISO 9003 applies when there is neither design nor production

ISO 9004
ISO 9004 is a comprehensive guideline to the use of the ISO
9000 standards.
ISO 9000 PRINCIPLES
Standard for quality systems.
Documentation is at the core of ISO
9000 conformance.
Universal standard.
Emphasize the prevention of the
problem.
TOTAL QUALITY MANAGEMENT (TQM)
TQM is a management approach that aims for long term success by
focusing on customer satisfaction. TQM based on the participation
of all members of an organization in improving processes,
products, services and the culture in which they work.
TQM may be defined as managing the entire organization so that it
excels on all dimensions of products and services that are
important to the customer.
Marketing, sales, R&D
Engineering
Purchasing
Personnel
Management
Packing, storing, shipping
Customer service
TQM PHILOSOPHY
TQM is a philosophy which applies equally to all parts of
the organization.
TQM can be viewed as an extension of the traditional
approach to quality.
TQM places the customer at the forefront of quality
decision making.
Greater emphasis on the roles and responsibilities of every
member of staff within an organization to influence quality.
All staff are empowered.
TQM Focuses on identifying quality problem root causes.
Encompasses the entire organization
Involves the technical as well as people.
TQM PHILOSOPHY (CONT.)
Relies on seven basic concepts of
Customer focus

Continuous improvement

Employee empowerment

Use of quality tools

Product design

Process management

Managing supplier quality

TQM PHILOSOPHY (CONT.)
Focus on Customer
Identify and meet customer needs

Stay tuned to changing needs, e.g. fashion styles

Continuous Improvement
Continuous learning and problem solving, e.g.

Benchmarking

Employee Empowerment
Empower all employees; external and internal

customers
Team Approach
Teams formed around processes 8 to 10 people

Meet weekly to analyze and solve problems.

TQM PHILOSOPHY (CONT.)
Understanding Quality Tools
Ongoing training on analysis, assessment, and

correction, & implementation tools

Studying practices at best in class companies

Plan-Do-Study-Act
BENEFIT IMPLEMENT TQM
Elimination of non-confirmation and repetitive
work.
Elimination of waste costs and reject products.
Elimination of repairs and reworks.
Reduced warranty and customer support costs.
Process efficiency leading to improved profit per
product or service.
Fiscal discipline through elimination of
unnecessary steps and wasteful expenditure.
TQM CONCEPT IN INDUSTRY
Continuous improvement
Six Sigma
Employee empowerment
Benchmarking
Just-in-time (JIT)
Taguchi concepts
Knowledge of TQM tools
CONTINUOUS IMPROVEMENT
Represents continual improvement of all processes
Involves all operations and work centers including
suppliers and customers
People, Equipment, Materials, Procedures.
Build a small group quality circle (QCC, ICC, QIT)
Group of employees who meet regularly to solve
problems.
Trained in planning, problem solving, and
statistical methods.
Often led by a facilitator.
Very effective when done properly.
QUALITY CIRCLES
Organization
8-10 members
Same area
Supervisor/moderator

Training
Presentation Group processes
Implementation Data collection
Monitoring Problem analysis

Quality Circle
Problem
Solution Identification
Problem results List alternatives
Consensus
Problem Brainstorming
Analysis
Cause and effect
Data collection
and analysis
PROCESS IMPROVEMENT STEPS
Plan a change aimed at improvement
Define the problem and establish an improvement goal
Collect data (Process Mapping)
Analyse the problem
Generate potential solutions
Choose a solution (Redesign the Process)
Do
Implement the solution.
Study/Check
Monitor the solution. Did it work?
Act
Institutionalize the change or abandon or do it again.
DEMING WHEEL: PDCA CYCLE
PROCESS MAPPING
Process Mapping involves the following steps:
Collect information about the process, identify each step
in the process, and for each step determine:
The inputs and outputs, the people involved, all
decisions that are made document such measures as
time, cost, space used, waste, employee morale,
employee turnover, accidents, safety hazards, working
conditions, revenues, profits / (losses), quality and
customer satisfaction
Prepare a flowchart of the process that accurately depicts
the process with not too much or too little information.
Make sure that key activities and decisions are represented.
PROCESS MAPPING (CONT.)
Once the information is collected:
Ask these questions about the process
.. Is the flow logical?
.. Are there any steps or activities missing?
.. Are there any duplications?
Ask these questions about each step
.. Is the step necessary?
.. Does the step add value?
.. Does any waste occur at this step?
.. Could the time be shortened?
.. Could the cost to perform the step be reduced?
.. Could two (or more) steps be combined?
REDESIGN THE PROCESS
Using the results of the above steps, redesign the
process if possible.
Document the improvements; potential
measures include:
Reductions in time, cost, space, waste,
employee turnover, accidents, safety hazards,
and
Increases/improvements in employee morale,
working conditions, revenues/profits, quality
and customer satisfaction
SIX SIGMA
Statistical methodologies for achieving continual process
improvement and reducing process variability
Basically these are the same concept which are designed
to reduce process variability
Program designed to reduce defects
Requires the use of certain tools and techniques
Statistically process variability (standard deviation) is
such that
Six sigma: no more than 3.4 defects per million
Three sigma: no more than 2.7 defects per thousand
SIX SIGMA - DMAIC APPROACH
1. Define critical outputs and identify gaps for
improvement
DMAIC Approach
2. Measure the work and
collect process data
3. Analyze the data
4. Improve the process
5. Control the new process to make sure new
performance is maintained
EMPLOYEE EMPOWERMENT
Getting employees involved in product and process
improvements
85% of quality problems are due to process and
material
Techniques
Build communication networks that include
employees
Develop open, supportive supervisors
Move responsibility to employees
Build a high-morale organization
Create formal team structures
BENCHMARKING
Selecting best practices to use as a standard for
performance
e rnal
int king if
Determine what to s e
U mar
h o ugh
c n
benchmark ben e big e
r
you
Form a benchmark team
Identify benchmarking partners
Collect and analyze benchmarking
information
Take action to match or exceed the
benchmark
JUST-IN-TIME (JIT)
Relationship to quality:
JIT cuts the cost of quality.
JIT improves quality.
Better quality means less inventory and better, easier-to-
employ JIT system.
Pull system of production scheduling including supply
management
Production only when signaled.
Allows reduced inventory levels
Inventory costs money and hides process and
material problems.
Encourages improved process and product quality.
TAGUCHI CONCEPTS
Experimental design methods to improve
product and process design
Identify key component and process variables
affecting product variation
Taguchi Concepts
Quality robustness
Quality loss function
Target-oriented quality
TOOLS OF TQM
Tools for Generating Ideas
Check sheets
Scatter diagrams
Cause and effect diagrams
Tools to Organize the Data
Pareto charts
Flow charts
Tools for Identifying Problems
Histogram
Statistical process control chart
TOOLS FOR GENERATING IDEAS
Check sheet Cause and effect diagrams

Scatter diagram
 Po Percent from each cause
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TOOLS TO ORGANIZE THE DATA
Flow charts
TOOLS FOR IDENTIFYING PROBLEMS
Histogram Statistical process control chart

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