Quality Management for Organizational Excellence Lecture/Presentation Notes By: Dr. David L. Goetsch and Stanley Davis Based on the book Quality Management for Organizational Excellence (7Th Edition) Presented By; Dr. Rania A. M Shamah Associate Professor of Business Administration 1 One: The Total Quality Approach to Quality Management MAJOR TOPICS • What is Quality? • The Total Quality Approach Defined • Two Views of Quality • Key Elements of Total Quality • Total Quality Pioneers • Keys to Total Quality Success • How is Six Sigma Achieved? • The Future of Quality Management 2
One: The Total Quality Approach to Quality Management ? Quality has been defined in a number of ways. ? When viewed from a consumer’s perspective, it means meeting or exceeding customer expectations. ? Quality is a dynamic state associated with products, services, people, processes, and environments that meets or exceeds expectations. ? Total quality is an approach to doing business that attempts to maximize an organization’s competitiveness through the continual improvement of the quality of its ? products, services, people, processes, and environments. 3 The Consequences of Poor Quality Loss of business ? Productivity ? Costs Benefits of Good Quality ? Enhanced reputation for quality ? Ability to command higher prices ? Increased market share ? Greater customer loyalty ? Lower liability costs ? Fewer production or service problems ? Higher profits 4 Responsibility for Quality ? Everyone in the organization has some responsibility for quality, but certain areas of the organization are involved in activities that make them key areas of responsibility. ? Top management ? Design ? Procurement ? Production/operations ? Quality assurance ? Packaging and shipping ? Marketing and sales ?
Customer service 5 Costs of Quality ? Failure Costs – costs incurred by defective parts/products or faulty services. • Internal Failure Costs • Costs incurred to fix problems that are detected before the product/service is delivered to the customer. • External Failure Costs • All costs incurred to fix problems that are detected after the product/service is delivered to the customer • Appraisal Costs • Costs of activities designed to ensure quality or uncover defects All TQ training, TQ planning, customer assessment, process control, and quality improvement costs to prevent defects from occurring Prevention Costs • 6 Ethics and Quality ? Substandard work • • • • • Defective products Substandard service Poor designs Shoddy workmanship Substandard parts and materials Having knowledge of this and failing to correct and report it in a timely manner is unethical. 7 Total Quality Management T Q M ? A philosophy that involves everyone in an organization in a continual effort to improve quality and achieve customer satisfaction. ? Total quality is not just one individual concept. ? It is a number of related concepts pulled together to create a comprehensive approach to doing business. Many people contributed in meaningful ways to the development of the various concepts that are known collectively as total quality TQM Approach 1. Find out what the customer wants 2. Design a product or service that meets or exceeds customer wants 3. Design processes that facilitate doing the job right the first time 4. Keep track of results 5. Extend these concepts throughout the supply chain 8 TQM Elements 1. Continuous improvement 2. Competitive benchmarking 3. Employee empowerment 4. Team approach 5. Decision based on fact, not opinion 6. Knowledge of tools 7.
Supplier quality 8. Champion 9. Quality at the source 10. Suppliers are partners in the process 9 Continuous Improvement ? Continuous Improvement • Philosophy that seeks to make never-ending improvements to the process of converting inputs into outputs • Kaizen • Japanese word for continuous improvement. Quality at the Source ? The philosophy of making each worker responsible for the quality of his or her work • “Do it right” and “If it isn’t right, fix it” 10 The Total Quality Approach Defined Total Quality: What It Is and How It Is Achieved ?
Key characteristics of the total quality approach are as follows: strategically based, customer focus, obsession with quality, scientific approach, long-term commitment, teamwork, employee involvement and empowerment, continual process improvement, Each element is explained on slides (12- 14) ? 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. 11 The Total Quality Approach Defined
Total Quality: What It Is and How It Is Achieved Key characteristics of the total quality approach are as follows: ? Strategically-based ? Total quality organizations have a comprehensive strategic plan that contains at least the following elements: vision, mission, broad objectives, and activities that must be completed to accomplish the broad objectives. ? The strategic plan for a total quality organization is designed to give it a sustainable competitive advantage in the marketplace. ? Customer Focus ? In a total quality setting, the customer is the driver. This applies to both internal and external customers. ? Obsession with Quality ? This means all personnel at all levels approach all aspects of the job from the perspective of “How can we do this better? ” When an organization is obsessed with quality, good enough is never good enough. 12 The Total Quality Approach Defined Total Quality: What It Is and How It Is Achieved Key characteristics of the total quality approach are as follows: ? Scientific Approach ? While it is true that people skills, involvement, and empowerment are important in a total quality setting, they represent only a part of the equation. Another important part of the equation is the use of the scientific approach in structuring work and in decision making and problem solving that relates to the work. ? Long-Term Commitment ? Organizations that implement management innovations after attending short-term seminars often fail in their initial attempt to adopt the total quality approach. ? This is because they approach total quality as just another management innovation rather than as a whole new way of doing business that requires a whole new corporate culture. 13 The Total Quality Approach Defined
Total Quality: What It Is and How It Is Achieved ? Teamwork ? Internal competition tends to use energy that should be focused on improving quality, and, in turn, external competitiveness. ? Continual Improvement of Systems ? In order to continually improve the quality of products or services: which is a fundamental goal in a total quality setting. ? It is necessary to continually improve systems. ? Continual Process Improvement ? Products are developed and services are delivered by people using processes within environments (systems). To continually improve the quality of products and services-which is a fundamental goal in a total quality setting- it is necessary to continually improve the processes that make up the organization’s systems. 14 Three-Legged Stool of Total Quality Measures ? Statistical process control ? Benchmarking ? Quality tools People ? Quality is built in ? Quality is expected not inspected ? Employees are empowered Processes ? Continual improvement ? “Good enough” is never good enough 15 Perceived Quality Word of Mouth Personal Needs Expected Quality Past Experience Quality Dimensions ? ? ? ? ? Reliability Responsiveness Assurance Empathy Tangibles
Quality Assessment 1. Expectations exceeded ESPS (Unacceptable Quality) 16 Perceived Quality Defining Quality Quality is Satisfactory.. Dimensions of Quality • Reliability: The ability to Perform promised service dependably and accurately. • Responsiveness: Willingness to help customers and to provide prompt service. • Assurance: The knowledge and courtesy of employees as well as their ability to convey trust and confidence. • Empathy: The provision of caring , individualized attention to customers. Ability to be approachable. • Tangibles: The appearance of Physical facilities equipment, personnel, and ommunication materials.. 17 Quality Gap Model Customer Perceptions Managing the Evidence Communication GAP 4 Customer Satisfaction GAP 5 Customer Expectations Customer / Marketing Research GAP 1 Understanding the Customer Service Delivery Management Perceptions of Customer Expectations Design GAP 2 Conformance GAP 3 Conformance Service Standards Product Design 18 Customer Satisfaction • All customers want to be satisfied. • Customer loyalty is only due to the lack of a better alternative • Giving customers some extra value will delight them by exceeding their expectations and insure their return 19