Understanding Big Q

UG Course – Operations Management

Department of Management Studies
Quality?
 Quality - Meaning and Definition
The term quality has different meanings and has been variously defined as
• value (Feigenbaum, 1951),
• conformance to specifications (Levitt 1972, Gilmore, 1974),
• conformance to requirements (Crosby, 1979),
• loss avoidance (Taguchi, 1979),
• defect avoidance (Crosby, 1979),
• excellence (Peters and Waterman, 1982),
• meeting or exceeding customers’ expectations (Gronroos 1983)
• fitness for use (Juran and Gryna, 1988),
 Different Views

► User-based: better performance, more features

► Manufacturing-based: conformance to standards,

making it right the first time

► Product-based: specific and measurable attributes of

the product
 Defining Quality

The totality of features/characteristics of a product or

service that bears on its ability to satisfy stated or
implied needs
American Society for Quality

Needs: No defects, functionality, performance, reliability, safety, durability, etc.

 Defect
Anything that dissatisfies the Customer (internal or external)
 Customer requirements are dynamic
 Lower the Defects
 Lower Cycle time (Delivery in time)
 Lower Cost of Manufacturing
 Higher Customer Satisfaction
 Higher People Satisfaction
 Higher Profits
 Eight Dimensions of Product Quality
1. Performance: A product's primary operating characteristics.
2. Features: The "bells and whistles" of the product.
3. Reliability: The probability that a product will operate properly over a specified
period under stated conditions of use.
4. Conformance: The degree to which physical and performance characteristics of
a product match pre-established standards.
5. Durability: The amount of use one gets from a product before it physically
deteriorates or until replacement is preferable.
6. Serviceability: The speed, courtesy, and competence of repair.
7. Aesthetics: How a product looks, feels, sounds, tastes, or smells.
8. Perceived quality: Subjective assessment resulting from brand image.
 Quality Improves Profitability
Sales Gains via
• Improved response
• Flexible pricing
• Improved reputation

Improved Increased
Quality Profits
Reduced Costs via
• Increased productivity
• Lower rework and scrap costs
• Lower warranty costs
 Implications of Quality
1. Company Reputation
► Perception of new products
► Employment practices
► Supplier relations
2. Product Liability
► Reduce risk
3. Global Implications
► Improved ability to compete
 Costs of Quality
► Prevention costs: reducing the potential for defects

► Appraisal costs: evaluating products, parts, and services

► Internal failure costs: producing defective parts/service before

delivery

► External failure costs: defects discovered after delivery

 Costs of Quality

Total Total Cost

Cost
External Failure

Internal Failure

Prevention

Appraisal
Quality Improvement

Amit Upadhyay IITR 11

Costs of Quality

Source: Juran’s quality control handbook

 7QC Tools
► Tools to Organize the Data
► Check Sheet
► Pareto Chart
► Flowchart (Process Diagram)
► Tools for Generating Ideas
► Scatter Diagram
► Cause-and-Effect Diagram
► Tools for Identifying Problems
► Histogram
► Statistical Process Control Chart
1. Check Sheet: An organized method of recording data
 Seven QC Tools
2. Scatter Diagram: Graph of the value of one variable vs. another

Productivity

Absenteeism
3. Cause-and-Effect Diagram
 Cause-and-Effect Diagrams
Material Method
(ball) (shooting process)
Grain/Feel Aiming point
(grip)
Size of ball
Air pressure Bend knees
Hand position
Balance
Lopsidedness
Follow-through
Missed
Training
free-throws
Rim size

Conditioning Motivation Rim height

Consistency Rim alignment Backboard

stability
Concentration

Machine
Manpower (hoop &
(shooter) backboard)
 4. Pareto Chart

A graph to describe problems

or defects in descending
order of frequency

A bar graph that shows which

factors are more significant.

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 Pareto Charts
Data for October
– 100
70 – – 93
– 88
60 – 54
Frequency (number)

Cumulative percent
– 72
50 –
40 –
Number of
30 – occurrences
20 –
12
10 –
4 3 2
0 –
Room svc Check-in Pool hours Minibar Misc.
72% 16% 5% 4% 3%
Causes and percent of the total

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 5. Flowchart (Process Diagram)

A chart that describes the steps in a process

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 Flow Charts
MRI Flowchart
1. Physician schedules MRI 7. If unsatisfactory, repeat
2. Patient taken to MRI 8. Patient taken back to room
3. Patient signs in 9. MRI read by radiologist
4. Patient is prepped 10. MRI report transferred to
5. Technician carries out MRI physician
6. Technician inspects film 11. Patient and physician
discuss

8
80%
1 2 3 4 5 6 7 11
9 10
20%

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 6. Histogram
A frequency distribution shows how often each different value in a set of data occurs

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 7. Process Control Chart
► A chart with time on
the horizontal axis to Upper control limit
40%
plot values of a
statistic
► Uses statistics and Target value
20%
control charts to tell
when to take | | | | | | |
corrective action Lower control limit
0% | |
► Drives process 1 2 3 4 5 6 7
improvement
 A Paradigm Shift in Thinking

From Microscope to Telescope

To see the FLOW

Money making
process

X
Unsustainable
strategy
Money making process

Sustainable
Strategy

To GET, you must

first GIVE or to reap
you must first sow
Process

Output:
Class 1 eggs

Input
Output
. . . .
. .
.

.
.
.
. .
. .
.
.

. .

.
.
.
.
. . .
 TQM Origin

In the 1950s, American industry enjoyed a boom. Whatever was

made could be sold. Few industrialists heeded Deming's work
and ideas about Total Quality.
However, things were different in Japan. The Japanese economy
was depressed, and goods made in Japan were known for their
poor quality and high prices.
Japanese industrialists were very receptive to Deming's ideas on
TQM and set about implementing them. By the mid-70s, Japan
was beginning to seriously undermine its American and other
Western competitors, first in cars, then in a whole range of goods,
including videos, Hi-fi, and computers. The rest is history. The
whole world started taking TQM seriously.
 TQM: Deming Philosophy
• The aim of continuous improvement is not just a goal. It is a
fundamental principle that should reflect in an organization’s strategy.
• Zero defects. Defects are expensive and unnecessary.
• Organizations should aim to improve their systems for better quality
rather than depend upon inspections.
• Organizations must stop awarding business contracts solely based
on price tags. Lower prices only come with sacrificed quality.
• Institute training on the job.
• Make everyone in the organization work to accomplish the
transformation.
 Total
All Stakeholders of the Organization (internal or external)
 Total Commitment of CMD & Board
 Total Commitment of All Stakeholders
 Total Top Management Team
 All Executives, Supervisors, Workers
 All Suppliers (Internal & External)
 All Functions
 All Processes
 All Activities
 Management
Managing the Total Quality Culture
 Facts & Data-based Decisions
 Inspirational Leadership
 Rewards
 Recognition
 Aspirational Targets Setting
 Facilitation
 Continuous Training
 New Skills Development
 Innovation
Total Quality Management - Dimensions

Total : Balancing and Satisfying

needs of all Stake Holders

Quality : Sustained Customer Focus

Management : Continuous Improvement

with Fact and Data based
decisions in a Planned &
Systematic way

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 Total Quality Management
• Continuously maximizing Customer
Satisfaction
• Continuously identifying and eliminating Non-
Value Adding activities
• Continuously harnessing Human, Material, and
other Resources of an Organisation in most
effective way to achieve Company Objectives
• Embedding a culture of Continuous
Improvement in all areas of operation with
Customer focus

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TQM Means

v Improvement

v Improvements over
Improvement

Continuous Improvement
To achieve Excellence
Continuous Improvement of What?
¨ Customer Results

¨ People Results

¨ Business Results
§Non financial
§ Financial
¨ Society Results
 Customer
Satisfaction
Quality • Key to success in
winning orders.
Cost
• Ensure Customer
Delivery Loyalty
Service after Sales

International competition determines

Customer expectations
 Current Scenario
• Increasing Globalisation
• Emergence of New Partnerships
• Mergers and Acquisitions
• Rapid growth in IT and Communication Networks
• Reduced technological gap between developed and developing
world
• The key concern is not mere customer satisfaction but
Customer retention

Companies worldwide have adopted Standards like ISO 9001, ISO 14001,
and OHSAS 18001 to focus on sustainability and improvements.
Current Scenario “Three most
important things
you need to
measure
in the business
are
Customer
Satisfaction,
Employee
Satisfaction,
and
Cash Flow.”
- Jack Welch
 Total Quality Culture
The aim of TQM is to get everyone to take personal
responsibility for the quality of their own work. No one blames
others for defective work, as “the buck stops at Self.”

However, if management insists that, in spite of a company-

wide commitment to TQM, the faulty work should be passed, it
is not TQM but PQM.

If the company succeeds in changing employees' attitudes, the

people concerned will not allow defective work to go ahead of
their work area. This will make it an organisational priority to
address the root cause of fault, underlining the urgency and
significance of this action in the new TQ culture.
TQM…..
is the belief in human progress. It is the
training of mind and development of
attitudes of the people as a whole which
determines whether the nation will
realize high productivity and an affluent
life or low productivity and poverty.

The
future of mankind
demands excellence,
know-how and quality of life

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 WORLD-CLASS
means

BEST OF BEST
Any Where in the World
... Dr. Robert
C Camp
THANK YOU