MGT 162

FUNDAMENTALS OF MANAGEMENT

CHAPTER 9:
QUALITY
 LEARNING OBJECTIVES

After completing this chapter, students

should be able to:
 Define quality and TQM
 Discuss the important of quality
 Explain the tools of TQM
 DEFINITION OF QUALITY

The totality of features and

characteristics of a product or
service that bear on its ability to
satisfy stated or implied needs.
-Griffin-

MGT162
 8 DIMENSIONS OF QUALITY

 1. Performance
Product primary characteristic- speed of car, picture clarity- TV

 2. Features
Supplement to a product’s basic function – Car: power windows.

 3. Reliability
Probability of not functioning during specified period.

 4. Conformance
Product design and operating characteristics not meet established
standards.

MGT162
 8 DIMENSIONS OF QUALITY
 5. Durability
Measure of product life.

 6.Service ability
Speed and ease of repair.

 7.Aesthetic
How product looks, feels, tastes and smells.

 8. Perceived Quality
As seen by customer.
 PERSPECTIVES OF QUALITY

Consumer Perspective
Quality can be defined as the degree to which the
product or service meets the expectations of the
customer.

Producer Perspective
Quality can be defined as the degree to which the
product or service conforms to design specifications.

MGT162
DEFINITION OF TOTAL QUALITY MANAGEMENT (TQM)

A strategic commitment by top

management to make quality a guiding
factor in everything it does.

-Griffin-

MGT162
 INTRODUCTION TO TQM

 Total Quality Management = TQM

 TQM- Creating an organizational culture
committed to the continuous improvement of skills,
teamwork, processes, product and service quality,
and customer satisfaction.
 Four Principles of TQM
 Do it right the first time.
 Be customer-centered.
 Make continuous improvement a way of life.
 Build teamwork and empowerment.

MGT162
 TQM AS TOOL FOR GLOBAL COMPETITION

Customer-driven standards

Management and labor commitment

Organization and coordination of effects

Employee participation

MGT162
 TQM – TOOL FOR GLOBAL COMPETITION

1.Customer-Driven Standards

External customer
 User of an item who is not a part of the organization that
supplies the item.

Internal customer
 User of an item who is a member of, or employee of, the
organization that supplies the item.

MGT162
 TQM – TOOL FOR GLOBAL COMPETITION

2. Management and Labor Commitment

 Management must develop an organizational culture in

which all workers are committed to the philosophy.

• If all parts of the organization are to coordinate toward a

common goal, then this goal must be:
 Embraced by top leaders
 Communicated by leaders throughout the organization
 Have commitment to goal demonstrated through actions, policies
and decisions.

MGT162
 TQM – TOOL FOR GLOBAL COMPETITION

3.Organization and Coordination of Effects

 Benchmarking
 The process of comparing one’s own products, services, or
processes against those of industry leaders for the purpose
of improvement.

 Kaizen
 Japanese term referring to the total quality management
principle of continuous improvement.

MGT162
 TQM – TOOL FOR GLOBAL COMPETITION

4.Employee Participation

 Quality Circle
 A work team that meets regularly to identify, analyze, and
solve problems related to its work area.

 Special-Purpose Team
 A temporary team formed to solve a special or
non-recurring problem.

MGT162
 THE IMPORTANT OF QUALITY

Competition

Productivity

Cost

MGT162
 Achieving Quality
(Prominent Quality Management Philosophers)

W. Edwards Deming
 Perhaps the most prominent quality philosopher, he devised
a 14-points plan to summarize his philosophy on quality
improvement.

Joseph Juran
 Observed that over 80 percent of quality defects are caused
by factors controllable by management.
 Developed a trilogy of planning, control, and implementation.

MGT162
 Achieving Quality
(Prominent Quality Management Philosophers)

Armand Feigenbaum
 Introduced the concept of total quality control.

Kaoru Ishikawa
 Introduced quality control circles.

Philip Crosby
 Introduced the philosophy that “quality is free.”

MGT162
 TQM Gurus’
2.0 TQM Gurus' Ideas Ideas

Dr. Edward W. Deming

(managment philodsophy and
systems)

Dr. Joseph M. Juran

(quality trilogy)

Dr. Philip Crosby

(zero defects and cost of quality)

Dr. Kaoru Ishikawa

(simple tools, QCC, company-wide
quality)

MGT162
 Deming’s 14 Points

1. Create a constancy of purpose toward improvement

 Become more competitive, stay in business, and provide
jobs
2. Adopt the new philosophy
 Better to improve now than to react to problems later

3. Stop depending on inspection to achieve quality -- build in

quality from the start
 Inspection to find defects at the end of production is too
late
4. Stop awarding contracts on the basis of low bids
 Better to build long-run purchaser/supplier relationships
 Deming’s 14 Points
(continued)

5. Improve the system continuously to improve quality and

thus constantly reduce costs
6. Institute training on the job
 Workers and managers must know the difference between
common cause and special cause variation
7. Institute leadership
 Know the difference between leadership and supervision

8. Drive out fear so that everyone may work effectively.

9. Break down barriers between departments so that people
can work as a team.
 Deming’s 14 Points
(continued)

10. Eliminate slogans and targets for the workforce

 They can create adversarial relationships

11. Eliminate quotas and management by objectives

12. Remove barriers to pride of workmanship
13. Institute a strong program of education and self-
improvement
14. Make the transformation everyone’s job
 The Deming Cycle

Plan

The
Act Deming Do
Cycle

The key is a
continuous cycle
Study of improvement
 Juran’s 10 Steps to Quality Improvement

1. Build awareness of both the need for

improvement and the opportunity for
improvement
2. Set goals for improvement
3. Organize to meet the goals that have been set
4. Provide training
5. Implement projects aimed at solving problems
Juran’s 10 Steps to Quality Improvement
(continued)

6. Report progress
7. Give recognition
8. Communicate the results
9. Keep score
10. Maintain momentum by building
improvement into the company’s regular
systems
 TOOLS FOR TQM

 FISHBONE
 BENCHMARKING

MGT162
 TOOLS FOR TQM

1. FISHBONE ( Kaoru Ishikawa Diagram)

 Diagram used to organize and show visually the
possible causes of a problem.

2. BENCHMARKING
 Process of finding the best available product
features, processes, and services.
 Using them as a standard for improving a
company’s own products processes and services.

MGT162
 Major Cause Major Cause

Supporting
Ideas Why
students
earn poor
grades?

Major Cause Major Cause

MGT162
 THE TOOLS OF TQM

Machinery Methods

Maintenance Autofeed speed incorrect

Problems Frequent breakdowns
Power variability Manual feed
High variability
Ball Bearing
Steel rods Scheduling Defects
Off size problems
Needed rods
sizes not Poor Training
available Materials Manpower
 Causes Effect
Cause & Effect Diagram
(Fishbone Diagram) Major Major
Cause Cause
The Cause & Effect Diagram or Fishbone Diagram is also called
the Ishikawa Diagram, named after Dr. Kaoru Ishikawa who
first introduced this tool. More information about Dr. Supporting
Ishikawa is on the back of this sheet. Ideas Why
students
This diagram represents the relationship between some earn
“effect” and all the possible “causes.” The effect or problem is poor
stated on the right side of the chart and the major influences or grades?
causes are listed on the left.
Fishbone Diagrams are drawn to clearly illustrate the various
causes affecting a process by sorting out and relating the Major Major
causes. For every effect, there are likely to be several major Cause Cause
categories of causes. The major causes might be summarized
under categories referred to as People, Methods, Materials,
Procedures, Machinery, Environment, and/or Policies.
However, you may use any major category that emerges or Tips for using the Fishbone Diagram
helps people think creatively.
Try not to go far beyond the area of control of the
A well-detailed Cause & Effect Diagram will take on the shape group in order to minimize frustration.
of a fish skeleton and hence the alternate name, Fishbone
Diagram. From this well-defined list of possible causes, the If ideas are slow in coming, use the major cause
most likely are identified and selected for further analysis. categories as catalysts, e.g., “What in materials is
When examining each cause, look for things that have causing…?”
changed, deviations from the norm or patterns. For each Make sure everyone agrees completely on the
cause, ask, Why does it happen?” and list the responses as problem statement.
branches off the major causes. Look for causes that appear
Remember you don’t have to swallow the whole fish!
repeatedly. Reach a team consensus. Gather data to
After fleshing out each bone on the diagram, you only
determine the relative frequencies of the different causes.
have to “bite-off” what you can chew.

MGT162
Dr. Kaoru Ishikawa
The career of Kaoru Ishikawa is some ways parallels the
economic history of contemporary Japan. Ishikawa, like
Japan as a whole, learned the basics of statistical quality
control developed by Americans.
Perhaps Ishikawa’s most important contribution has been
his key role in the development of a specifically Japanese
quality strategy. The hallmark of the Japanese approach is
broad involvement in quality, not only top to bottom within
the organization, but also start to finish in the product life
cycle.
The bottom-up approach is best exemplified by the quality
circle. As a member of the editorial board of Quality
Control for the Foreman, as chief executive director of
Quality Control Circle Headquarters at the Union of
Japanese Scientists and Engineers (JUSE), and as editor
of JUSE’s two books on quality circles (QC Circle Koryo
and How to Operate QC Circle Activities), Ishikawa played
a major role in the growth of quality circle.
Dr. Kaoru
Ishikawa
MGT162
One of Ishikawa's early achievements contributed to the success
of quality circles. The cause-and-effect diagram—often called
the Ishikawa diagram and perhaps the achievement for which he
is best known—has provided a powerful tool that can easily be
used by non-specialists to analyze and solve problems.
Although the quality circle was developed in Japan, it spread to
more than 50 countries, a development Ishikawa never foresaw.
Originally, Ishikawa believed circle depended on two factors
unique to Japanese society. But after seeing circles thrive in
Taiwan and South Korea, he theorized that circles could succeed
in any country that used the Chinese alphabet. Ishikawa’s
reasoning was that the Chinese alphabet, one of the most
difficult writing systems in the world, can be mastered only after
a great deal of study; thus, hard work and the desire for
education became part of the character of those nations. Within
a few years, however, the success of circles around the world
led him to a new conclusion: Circles work because they appeal
to the democratic nature of humankind – “Wherever they are,
human beings are human beings,” wrote Ishikawa in 1980. The
American Society for Quality (ASQ) established the Ishikawa
Medal in 1993 in honor of an individual or team for outstanding
leadership in improving the human aspects of quality.
The wide acceptance of many of Ishikawa’s ideas – and the
numerous honors he has received from around the world show
how successful his revolution has been.
Sources:
American Society for Quality: About: Kaoru Ishikawa
The Memory Jogger for
Education, GOAL/QPC Future Force KIDS
THAT WANT TO, CAN, AND DO!, McClanahan and Wicks
 BENCHMARKING

1. Competitive benchmarking
 Studying products, processes, or business performance of competitors
in the same industry in the aspects of pricing, quality, and technical
features.

2. Process benchmarking
 Studying the aspects of distribution, order entry, or employee training. It
compares companies across any industry.

3. Strategic benchmarking
 How a company competes and seeks the winning strategies that
have proven to bring successes.

MGT162
The end…