Quality management book @ bec doms bagalkot mba

1. 1
QUALITY-MANAGEMENT
BSPATIL

2. 2
Unit – 1
Concept of Quality – Quality as customer delight – Quality as meeting standards – Actual vs Perceived
quality – Concept of total quality – Design, inputs, process and output – Need for Quantity – Function of quality –
Philosophy of quality – Old vs new – Quality as a problem and as a challenge – 6 sigma concept.
Unit – 2
Quality Management : Fundamentals evolution and objectives – Planning for quality – Quality process – Statistical
Process Control – (SPC) and acceptance sampling – Quality assurance – Total quality management.
Unit – 3
Quality and Productivity – Quality and cost – Is quality of cost – Benefits of quality – Competition in quality – Role
of MNCs in emergence of global quality.
Unit – 4
Quality System – Total quality control system vs total quality management system – Total Quality Control (TQC) in
Japan, US, Europe – Elements of TQC – Just in time, quality circles, quality teams.
Unit – 5
Total Quality Management (TQM) – Elements – TQM in global perspective – Global bench marketing – Business
Reengineering – Global standards – ISO 900 series – quality manual – Barriers to TQM.
Unit – 6
Total Quality Management and Leadership – Implementing TQM – Market choices – Marketing customer
requirements – Maintaining competitive advantage - Core competence and strategic alliances for ensuring quality –
Quality review, recognition and reward – Quality awards.
BSPATIL

3. 3
QUALITY MANAGEMENT
UNIT – 1
1.1 Quality
Quality, cost and productivity are still fundamental concerns for management worldwide. The concept of quality
has been around us for a vary long time. The characters for quality appear in ancient Chinese and Indian writings.
Quality is the vary essence of humanity. The concept of cost too has been around us for at least 10,000 years. Its
beginning can be traced to the commencement of trade activities and bartering. Productivity, however, has been
around us for only the past 200 years, with its beginnings, identified with the industrial revolution and reinforced
with the advent of the Taylor system.
A new awareness of quality has dawned in the Indian economy. Quality of both products and services in
organizations is being felt as the need of the hour. This is more so with greater thrust on exports and liberalization
in Indian economy. Secondly, quality practices are coming to the fore. There is a missionary zeal in implementing
TQM and getting ISO 9000 certification. Competitive environment demands a better quality of product or service
at lower rates. Only those organizations which manage productivity and quality on a continuous basis are in a
position to compete in increasingly competitive global marketplace. The impact of poor quality on any
organisation leads to: (i) low customer satisfaction and low market share; (ii) low productivity, revenue and
profit; (iii) low morale of workforce; (iv) more rework, material and labour costs; (v) poor quality of goods and
services; (vi) high inspection cost; (vii) high process bottlenecks and delay in product shipment; (viii) higher
work-in-progress inventory; (ix) high analysis and repair costs; and (x) high material wastage and scarp.
Quality is a customer’s determination and is certainly not a manufacturer’s determination. The modern
view of quality is that products should totally satisfy the customer’s needs and expectations on a continuous basis.
This new concept of quality calls for : (i) well designed products with functional perfection – right the first time
(ii) prompt satisfaction of customer’s expectations, (iii) excellence in service4 and (iv) absolute empathy with
customers.
1.2 HISTORICAL DEVELOPMENT
The development of quality activities has spanned over the entire twentieth century. Curiously, significant
changes in the approach to quality activities have taken place almost every 20 years. Quality activities have
traversed a long path from operator’s inspection (1990s) to verification of quality by supervisors (1920) to
establishment of quality control departments and 100 per cent inspection (1940s) to statistical quality control
(1960s) to TQC with statistical control (1980s) to TQM and statistical problem solving (1990s) to self-managed
teams and innovation (late 1990s). This historical development of the quality concepts is shown in Table – 1.1
TABLE : 1.1 QUALITY – HISTORICAL DEVELOPMENTS
S. No. Evolving Quality Activities Period in Years
1 Operator inspection 1870 - 1890
2 Foreman verification 1890 – 1920
3 QC Department and 100 per inspection 1920 – 1940
4 QC Department and Statistical Quality Control (SQC) 1940 – 1960
5 Quality Assurance (QA) Department and Statistical Process 1960 – 1980
Control (SPC)
6 TQM, QA Department, Statistical problem solving and 1990 onwards
Statistical Process Control (SPC)
1.3 DEFINITION OF QUALITY
A number of definitions of quality have been propounded by experts. Some of these, given by quality ‘Gurus’, are
widely recognized as these have been evolved over a period of time. These are as follows:
• Quality is fitness for use or purpose - Joseph M. Juran
BSPATIL

4. 4
• Quality is conformance to requirements – Philip B. Crosby
• A predictable degree of uniformity an dependability at low cost and suited to market. – W. Edwards Deming
• ….. development, manufacture, administration and distribution of consistently low cost products and services
that customers need and want. - Bill Conway.
• Total composite of product and service characteristics of marketing, engineering, manufacturing and
maintenance through which the product and service in use will meet the expectations of the customer –
Armand V. Feigenbaum.
• Quality is the degree of excellence at an acceptable price and control of variability at an acceptable cost –
Broth.
• The totality of features and characteristics of a product or service that bear on its ability to satisfy stated or
implied needs of customers – ISO 8402: Quality Vocabulary.
None of the above definitions construed quality as synonymous with prestige or preciousness associated with
quality of gem stones, for example. The well-worm analogy of he Rools-Royce and Maruti Esteem as both being
cars is worth reiterating to differentiable the terms. A Rolls Royce is a motor car which meets a customer’s
requirements for transporting people from one location to another but in a luxurious comfort arid in such a way so
as to impress people on the way. A Maruti Esteem is no less a ‘quality’ car. Its purpose is to transport people from
one location to another gut in as cost-effective manner as possible. Other factors such as reliability and safety, for
example, are the characteristics which apply to both cars and are shared requirement of their respective
customers.
Thus most of the above given quality definitions (propounded by quality Gurus, pioneers or specialists in
the field of total quality and quality standards) are combinations of the two themes – customer satisfaction and
economic cost as explained In cars’ example.
Since the advent of industrial society, the term ‘quality’ has in part related to ‘adequacy’ as in conforming
adequately to expectations and requirements of use.
Generally, an engineer created a set of specifications and if a production crew met these engineering
specifications, a ‘quality’ product is said to be delivered. For a long time, producing quality products meant
making sure that the product conformed to its specifications. This had some degree of credibility – the products
were greatly fit for use and the customers were usually more or less satisfied. For our purpose, let us use the
definition of quality as: Quality is one which satisfied customers needs and continuously keeps on performing its
functions as desired by the customers as per specific standards.
Quality is neither a topic of recent interest nor a fashion. It is, and has always been a problem of interest,
essential for a firm’s and to a nation’s competitiveness. Colbert, the famed Minister of Louis the XIV, already in
1664 stated:
If our factories will impose through repeated efforts, the superior quality of their products, foreigners will find it
advantageous to supplying themselves in France and their wealth will flow to the Kingdom of France.
This is one example of many. The ‘American Industrial Way’ has traditionally been based on excellence
in manufacturing product innovation and a sensitivity to consumers. The test of the market, which brings some
firms to profitability and others to oblivion, is also a pervasive part of the American scene. It is these same market
tests, expanded by a globalization of business, manufacturing technology and competition, that have raise4d the
priority of quality in industrial business strategies.
In this chapter we shall be concerned with the definition of the concept of quality. Such definitions are
important, for it may mean different things to different things to different people in various circumstances. The
industrial notions of quality, although clear and well stated, need not be true measures of quality. Although they
are important and serve many purposes, the are only part of a larger picture.
The concept of quality
Quality can be several things at the same time a may have various meanings, according to the person, the
BSPATIL

5. 5
measures applied and the context within which it is considered. Below, we shall consider below, several
dimensions and approaches along which quality could be defined. Those are based on both objective and
subjective notions of quality, with both tangible and intangible characteristics.
‘Quality is the search for excellence’
‘Citius, Altius, Fortius meaning ‘Faster, Higher, Stronger’, engraved on Olympic medals, symbolized the
spirit of competition, seeking and ever greater excellence in man’s achievements. The ‘search for excellence’ is
not new, however; it is inbred in a Darwinian philosophy for the survival of the fittest. Quality is thus an
expression of this excellence, which leads one firm’s product to dominate another, and to guarantee its survival by
establishing a new standard of quality. Over time, excellence creates an image of quality. This is how English
clothes, German cameras, French wines and cheeses, and so on, have become marks of excellence. In this context,
quality is a perpetual challenge which results both from a process of perpetual improvement and a domination
over other, similar products.
Of course, new technology can alter such domination. American cars, once an image of excellence, have been
gradually been replaced by Japanese cars; for some in the TJS, French wine is gradually being replaced by
Californian wine, etc. in this sense, quality is a mark of excellence, persistent and maintained over long periods of
time. Such excellence is, of course, a function of habits, culture and values, and may thus vary from person to
person and from time to time.
‘Anything you can do, I can do better’
Are Japanese cars better than American? Do blades produced by Gillette last longer than Wilkinson’s? Such
questions, although hard to answer, may in some cases be dealt with an apparent sense of objectivity. In other
words, quality is defined by implication in terms of attributes and some scales used to measure and combine these
attributes. In some cases, these attributed may be observed and measured precisely, but they can also be difficult
to observe directly and impossible to measure with precision. ‘These situations are some of the ingredients that
make quality the intangible variable that firms have difficulties dealing with. Nevertheless, a combination of such
attributes, in ‘various proportions’ can lead to the definition of a concept of quality. In this sense, quality is
defined relative to available alternatives, and can be measured and valued by some imputation associated with
these alternatives.
‘Quality is in the eye of the beholder’
Do French perfumes have a better smell than American? Is French Chablis of a better quality than
California Chablis? Is French cheese tastier than comparable cheeses produced in the US? Of course, tins is a
matter of smell and taste! Quality is then in the eye of the beholden, established over long periods of time by
habits, culture and customs which have created ‘standards of quality’. In this case, quality is not what we think it
is, but what the customer says it is. J.F.A. Sloet, President of KLM, while addressing the European Council for
Quality stated that the essentials of quality is to do what you promised It is not relevant what we think quality is.
The only quality that matters… is what our clients think. Peter Drucker, put it in the same terms by stating that it
is not what the ‘supplier’ puts in, but what the consumer takes out and is willing to pay for. This ‘downstream’
view of quality, emphasizing a sensitivity to consumers is in sharp contrast with the traditional ‘upstream’
conception of quality. In the early 1980s, for example, American car manufacturers were satisfied that they were
producing quality cars, only to see consumers turn towards Japanese made cars. Similarly, at Renault, great
efforts were put into developing more efficient engines, while consumers were valuing attributes to which
Renault designers were oblivious. Of course, American and European car manufactures have since learned that in
an open world, with global competition, quality cannot be poor long.
‘Quality is the “Proof of he pudding”
Quality is what the market says it is. In this sense, quality is only a term that we can define a posteriori, once
consumers choices have been expressed relative to a range of potential and competing products. Of course, there
may be many reasons for these choices, including each and all of the reasons stated above. Nevertheless, the
underlying fact is that we cannot apriori say what quality is. The best of intentions to produce quality products or
deliver quality services can falter. In this sense, quality is a variable which can at best be guessed apriori and,
perhaps, through successive experimentation, learning and adaptation, it can be refined and improved.
BSPATIL

6. 6
‘Quality is Value Added’
Business preoccupation to measure and value its product and services leads to another view of quality.
This view defines quality as value added. It is both what the consumer wants and is willing to pay for. Such views
are, of course, motivated by the need to value quality so that sensible decisions regarding a firm’s quality supply
can be reached. For example, how much is a firm willing to pay for shorter and more reliable supply delays of
materials it uses is manufacturing processes? This is, of course measure by what added the buyer gets by such a
supply quality. Although difficult to assess, it might be possible to do so in some cases, Inventory stocks, reduced
administration costs and smoother production flows may be only a few of the many facets the buyer may consider
to value shorter and more reliable delays. The value added in consuming well known label goods compared to
unlabelled ones, although much more difficult to measure and define, do exist, since there is clearly a market for
‘overpriced’ goods whose essential characteristic is their label. How else could we explain a Chevignon Jacket or
Hermes scarf costing three times the price of the same jacket and scarf without the label!
As a result, quality is not a term that can be defined simply. Rather, it is composite terms, expressed in
terms of attributes which define quality by implication. These attributes express:
• The relative desirable of products, items, services.
• The potential for substitutions and product differentiation, both objection and subjective.
In this sense, the concept of quality is both objective and subjective, and is based on product and service
differentiation, on substitution, as well as on buyer perception and heterogeneity. Substitution combined with
subjective (or objective) differentiation thus provides some means that we can use in appreciating and valuing
quality if it can be measured or estimated directly or indirectly in terms of other variables. If products are not
substituted (meaning that they are not comparable), then quality as a variable used to compare these products
is not relevant. Differentiation of products can be subjective, perceived differently by consumers. Beauty,
taste, smell are perceived differently by buyers. In this sense, quality is a concept expressed by a consumer
population’s heterogeneity, as we pointed out earlier. Thus, heterogeneity induces an unequal assessment of
what is quality. If consumers are the same’ in terms of how they value and assess characteristics associated
with a product, then they may be considered homogeneous, and the concept of quality would be well defined
in terms of ‘agreed on’ properties. For example, the number of shaves one can have with a Gillette sensor
blade compared to a standard one, the temperature tolerance of Titanium (needed to fabricate jet engines)
compared to some other materials, the hardness of graphite steel compared to other types of steel, are all
objective dimensions along which quality is measured.
1.4 WHO IS THE CUSTOMER?
For an organisation seeking major improvement, the customer is the primary driving force. Obvously, the external
customer who pays for the service is important for the reasons outlined above in winning and losing customers. But
who he or she? Which one? Do we respond to the needs of the big customer or the small one?.... the demanding one
or the passive one?... the immediate purchaser or the consumer? The reality is we will be dealing with many
customers on continuous basis and they are all important. In a Quality organisatoin, the must have a customer – a
person to tell us whether we have got it right or not. Without an identified customer, we should why we are doing this
activity. With an identified customer, we can find out what is needed, if everyone is thinking ‘customer’ in this way, a
strong movement for improvement is created.
At the beginning of a Quality process, many companies define categories of customer to help people understand the
need for customer-orientation. Distinctions are made between internal customers and external and sometimes between
customers and consumers if both are supplied, e.g. a PC manufacturer who sells to the public as well as through
dealers. Ultimately though the same generic concept applies throughout – my customer is the person receiving this
service which I am providing now. Ian Valiance, Chairman of BT, thinks of his customers as constituents’’ including
the government, the public (he receives 20,000 letters a month), industrial users and the people reporting to him. They
are all his customers and he ruthlessly manages his time to devote appropriate attention to all of them.
In fact, most managers and also staff have complex constituents like Ian Valiance. We will find that we can categorise
them as we under stand their needs better. For example, until the Quality movement hit the airlines, passengers were
BSPATIL

7. 7
just passengers; now there are many subdivisions such as business travelers, vacationers, family visitors, children
travelling without parents. Such categorization provides crucial focus on the differing needs and enabled British
Airways, early on in their Quality process, to provide directly for each group, with, for example, the Young Fliers
programme.
Identifying market segments from which distinct customer requirements can be characterized moves the
supplier further away from ‘product-out’ thinking, where it is up to the customer to adjust his needs around our
offering. Each customer category is still a compromise though and the smaller and more sharply defined the grouping,
the closer we are able to match each customer’s need. The customer concept can be used to challenge each business
unit, each work team and each person in a Quality organisation to make the focus tighter and tighter until, ultimately,
it is one person – the person being served now.
As such, the customer concept, as with Quality itself, if both strategic and tactical. We need strategic
customer focus in order to design the products to attract customer interest and also to create the processes to deliver to
their needs. But to really satisfy customers we have to be albe to adjust tactically too. When it comes down to winning
or losing customers, service is personal – one to one. The customer has no interest at all in our other customers. John
Mitchell’s customer felt as if there was no one more important to him than her and the stained dress. However both
our company is, that is the feeling we should be giving each customer.
1.5 WINNING CUSTOMERS
We do not sell to customers today; they buy. that is, they call the tune; they have the choice and will only buy from us
if we make it easy for them or special for them. This applies whether they are existing customers or new ones.
Customers buy on the value to them. The value is a perceived balance of features against cost. The customer is buying
for a need, which might be to fulfill the requirements of another customer, to make life easier or more interesting, to
counter a concern. The need is what determines the judgment of value of hence the attractiveness of particular
features. The need may well be as much emotional as physical. Thus the judgment of value is a complex one going
way beyond point-in-time product or service attributes. The cost element of value is not simply the price tag either.
The customer may well be weighing up the cost of use as well as purchase and the cost of doing business with us as
opposed to someone else.
Value is an individual judgment. What is important to one customer may be less so to another. Velcro USA President,
Theodor Krantz, discovered this from Velcro’s better understanding of their customers’ needs as their Quality process
took hold: ‘Quality is not absolute, it depends on the customer’s perception and requirements. For textile customers,
appearances are important, whereas in the medical business the concern is cleanliness. The auto makers want
durability, reliability and capability. With government, the specifications are all-important.’
FIGURE: 1.1 VALUE vs. DISTINCTION Page No. 10
Value is also a relative judgment. ‘In the shoe industry, the hook and loop on a pair of kids sneakers is not especially
important since the goods are barely used for three months. But with a $600 knee brace, the quality of the hook and
loop closure is very important.’ Relative value is equally influenced by competitive offerings and novelty. For this
reason alone, we have to continually upgrade our products and services. For many years, reliability has been a top
factor in car buying. Today, most cars (not all) are very reliable and this factor is beginning to be taken for granted.
Like safety in airline travel. Car makers have to retain reliability because to lose it would be disastrous, but have to
provide many more new features as well. For US discovered this a few years ago. They had spend many years of an
BSPATIL

8. 8
intense Quality programme concentrating on the vital need to raise reliability.
Somewhat to their surprise, when they launched their highly successful Taurus, customers rated them pretty average
on reliability but very god on extra thoughtful features. In fact, Ford had put a lot more effort into listening to what
customers wanted and had built in some 1,200 items from a customers – wish list. These were quite mundane thins
like cup holders or quiet door-closing but they made a noticeable difference. Ford describe this success as focusing on
‘the things that go right’ as well as ‘the things that go wrong’. Value is perishable and has to be renewed.
When it comes to attracting new customers as opposed to retaining existing ones, the supplier has to work
even harder. Customers have the power to switch and may do so without compunction when persuaded, but they are
also lazy. They are not going to seek you out; you have to attract them. This requires a distinctive offering in the
market place to stand out from all the others. Again this factor is perishable; what is distinctive one year is ordinary
the next unless it is continually upgraded.
1.6 DELIGHTING THE CUSTOMER
Of course, we should be waiting for our problems to trigger our ability to impress the customer. If we4 are
really managing our customer, we are watching for his problems and using our talents to help. This brings us into that
rarefied area of customer delight: doing something that feels special to the customer – exceeding his expectations. Not
necessarily surprising the customer, this can backfire, not going over the top, this may be impossible to repeat, but
simply doing that little bit better.
Richard Branson’s dream was not really to run a world-beating record business, that was merely something he
was good at; his real ambition was to run airline. Before starting Virgin Atlantic, he knew he would have to do
that little bit better. He knew all about Laker and People’s Express, independent players who were unable to
withstand the muscle of the airline giants. His first service across the Atlantic was indeed very similar to Laker,
offering cut-price tickets which the majors followed. Gradually, Branson worked out a different strategy, adding
entertainment (imported fro his record business) for his young adult customer base. This led him to his major
break though, a superior service for business travelers. Business trade is the lucrative end of airline revenue
because of the high and non-discounted ticket prices. Branson talked and listened to business travelers (literally,
by regularly traveling himself and getting to know his fellow passengers) and built up a picture of the regular
businessman’s likes and dislikes about air travel. Form this picture, he created Virgin Upper Class.
Upper Class was the first with individual video players, something all the major airlines are copying –
slowly because of the huge installation tasks for the big fleets. He set a style of service which was personal,
empowering cabin crew to care for passengers in their own way, rather than to over-standardized patterns, again
an advantage of being smaller and focused. He added neck massages and aromatherapy kits because his
passengers were concerned about the effect of air travel on their bodies. He looked after his passengers way
beyond the terminal, sending limousines to collect and deliver door to door. Richard Branson introduced all these
features ahead of his big established competitors; indeed he did the whole thing a little better. As a result, he
delighted his customers. They told others and Virgin Atlantic’s success was assumed. In the early nineties, Upper
Class is the service the other North Atlantic carries are striving to better.
Customer delight is a wonderful thing to achieve. The customer does the reverse of spreading the bad
news and tells his friends of his good judgment in finding this special service (as we’ve seen he won’t tell quite as
many; good news doesn’t travel as far as bad but the good feeling may last). The supplier and his team feel good
about their work being valued. But it is a very delicate emotion. He cannot be thrilled every time, but he will miss
it if we revert to ordinary service. We have raised his expecte4atoin and we have no choice but so set our sights
higher and do something better. This is the true power of customer-orientation: to please the customer, continuous
improvement is mandatory.
1.7 STANDARDS
Standards crystallize past experience and knowledge. It would be no exaggeration to say that industrial
production efficiency depends on the number of effective standards set and utilized. However, some people
believe that standards are enslaving and stifle creativity. To set effective standards, it is first necessary to
understand correctly what standards actually are.
Standards based on scientific laws, versus business contracts
BSPATIL

9. 9
The basic requirement of industrial production is to manufacture, as cheaply as possible, products that
satisfy consumer demand. Ways of reducing costs include purchasing materials cheaply and making use of cheap
labor. These are management devices, not technical ones. Technical measures might include lowering materials
consumption per product unit or raising per-capita value-adding productivity.
Raising productivity through technology basically involved using scientific laws and principles in the
production process. Modern industry is based on scientific progress, and the application of science to
manufacturing has enabled the mass production of sophisticated products that were previously unimaginable.
Industrial production is achieved through a wide-ranging application of known scientific laws and principles in
such diverse fields as mechanics, thermodynamics, strength of materials, electro-magnetic, vibration science,
metallurgy, chemistry, biology, and so on.
Industrial production efficiency is determined by how skillfully these laws and principles are applied to
achieving specific objectives. Technical standards embody the most efficient methods from all those methods
technically feasible at any given time. Although they may change when a more efficient method is discovered,
until this happens they represent the best methods known.
Although work can still be accomplished even without adhering to standards, failure to do so inevitably leads
to lowered efficiency. Trying to maintain efficiency also has an effect on quality. A technical standards enshrines
current best practices; deviation from it can cause either a drop in efficiency or deterioration in quality. Thus,
work must be carried out in accordance with the standards if the specified quality at maximum efficiency is to be
produced.
Although human beings can discover and make use of the laws of nature, they cannot invent or change them.
Utilizing natural laws in industry therefore means manufacturing in accordance with these laws. Work that fails to
take them into account is bound to result in harm. The process of manufacturing a given product inevitably
defines itself in the course of pursuing greater efficiency. A process created in this way when becomes a standard,
and many standards relating to design, manufacturing technology, and production are of this type.
While standards based on scientific laws a principles are naturally be fined by the pursuit of quality and
efficiency, some standards are artificial conventions deliberately imposed by human beings. There is no natural
law that makes such standards mandatory; people formulate and enforce them because they find it convenient to
do so for social or business reasons. For example, it really does not matter whether people drive on the right or
left side of the road, but there would be trouble if this was used as a reason for not stipulating which side people
have to drive on. One side or the other must be specified. Various system of weights and measures also exist, such
as the metric, imperial, and ancient Japanese systems. It would be convenient if the same system was used all
over the world, and most countries have adopted the metric system as a standard. It would also be convenient if
electricity supplies all over the world used the same voltage and frequency.
Standards constituting social or business conventions are imposed for reasons of convenience or safety.
Depending on what they cover, they are prescribed in the form of national, industrial, company, and divisional
standards. Unlike standards based on natural lay, they are not absolute; with this type of standard, people are free
to choose what is specified. The appropriateness of a standard of this type can be verified by weighing up the
social disadvantages that would arise if it did not exist. If dispensing with such a standard would cause no
problems, it is probably an meaningless restriction and ought to be abolished.
Interchangeability
The biggest advantage of standardization is interchangeability. When part of a system break down, it is
extremely economical if the malfunctioning part can be replaced without having to renew the whole system.
Interchangeability also makes dividsion of labour possible. For example, since the dimensions of light fittings are
standardized, light-bulb manufactures can concentrate on makin light bulbs wile socked manufactures can
specialize in making sockets, independently of each other. Nor are the benefits of interchangeability limited to
material objects; when work is performed in accordance with design standards, operating standards and so on.
The result is the same whoever is doing the job. This normally insulates an organization from the effect of
changes in its personnel.
Artistic creation is a strong expression of individuality, and it has a different purpose form economic
manufacturing. In industrial production, people can not be allowed to disobey standards at a whim, Tape-recorder
BSPATIL

10. 10
manufactures must conduct research into tape standards, and light-club manufactures can not ignore the standards
for light-bulb fittings.
Less time spent on thinking and communicating
Formulas used in mathematics, physics and other sciences are a type of standard. For example, if the correct
formula is known, a problem in dynamics can be solved even without understanding the underlying principles. If a
standard drafting practice if prescribed, a draftsperson does not need to think about what drawing method to use. If
strength calculations are performed by applying a fixed formula, an engineer does not have to solve differential
equation each time.
When standard parts are used their reliability is known without having to test them. Thus, much design and
development work can be dispensed with and this permits designers to design highly-reliable products by
concentrating their efforts on new, untried parts and the interfaces between these and standard parts. There is also no
need to show standard parts in drawings, because simply specifying the part number is sufficient.
Likewise, if srandard test methods exist, this means that there is no need to think about the test conditions
each time. Another form of standard is a design manual, which is a distillation of the expertise of all pervious
designers. It contains more technical experience than any individual designer could use in a lifetime.
Production of more reliable products
Novel products and processes are beset with reliability problems. Even Japan’s famous Bullet Train network,
which operated without serious mishap for 30 years after its inauguration, is no exception just after its inauguration, it
was discovered that when it traveled in deep snow at the speed of 200 kilometers per hour. Problems occurred with
the carriage wheels. The design engineers, renowned for their technical prowess and cautious approach, had failed to
take into account he effects of deep snow at high speeds. Even trying to think hard of everything is sometimes less
effective than conducting a single experiment.
Standardized parts and processes are the fruits of past experience, and they are less likely to cause problems
though type may appear old-fashioned and unexciting. The greater the number of standardized parts and processes
used, the fewer new ones are needed. This enables designers, engineers, and others to concentrate on carefully testing
the reliability of the new elements of products, permitting them to develop novel products with high overall
reliability.
Management by Standards
When a fault appears in a product it is vital to trace its cause in order to prevent its recurrence. From the
standardization viewpoint, there are three main causes of product malfunction:
1) No standards were set;
2) Standards were set, but they were inadequate;
3) Standards were set, but they were not obeyed.
When a product made to standards runs into trouble, something is wrong with the standard. Investingating a problem
enables a better standard to be created. A company’s technology is supported by its engineers and its standards;’ as an
organisation, its technology is stored within its written standards. An organisation cannot make technical progress if
mistakes result in no more than are working of the faulty product or a learning experience for an individual engineer;
improvement takes place and technical levels rise when standards are revised as a result of mistakes.
Although standardization is so important, some companies and divisions are slow to practice it. Preparing
effective standards takes a certain amount of time, and it is difficult for people to find that time when they are fully
occupied with the work at hand. Like planning, standardization is work for the future, but many managers are so
engrossed in solving their present problems that they show little interest in standardization. When trouble occurs, they
immediately ask, “Whose fault is it?” rather than, “What caused it?”, searching for a scapegoat instead of the cause.
They then come down hard on whoever they think is to blame.
In this situation, the managers’ subordinates give them distorted information the situation is incorrectly
assessed, mistaken judgments are made, and one problem leads to another. It is vital management task to set and
revise standards and ensure that the work is performed in accordance with them. This must be done in order to stop
BSPATIL

11. 11
fresh trouble in its tracks and prevent problems that do occur from cropping up again in the future. Management by
standards means constantly referring back to the standards.
1.7 WHAT IS TOTAL QUALITY?
In order to analyze and fully understand the term total quality, we may discuss some popular definitions in the
succeeding text. Total quality is defined as the mobilization of the whole organisation to achieve quality continuously,
economically and in entirety.
According to Atkinson (1993) total quality is a strategic approach to product the best product and service
possible—through constant innovation. Concentration should not be only on the production side but also on the
service side of a business. General perception is that improvement in quality is possible only during production but
total quality cannot be achieved without significant improvement in purchasing, marketing after sales service and a
host of other areas of business. Many companies may produce ‘zero defect’ products but the company’s quality still is
not right. There are other functions which can let the company down. The right product delivered at the wrong time
can have catastrophic impact on both buyer and seller. A research report found that 95 percent of companies deliver
their products late. This late delivery can have just as bad impact upon future buying decision as can increasing the
price of the product by 50 percent.
Invoicing can also crate problems. Delivering the right product but invoicing incorrectly can delay payment to
the supplier for as much as 3 months or longer. Salesman promising the earth in back-up can leave the disappointed
customer cold and indifferent to further trading with the company. Thus quality has to be 100 (not even 99.999…)
percent and is the responsibility of everybody. This quality with 100 percent utilization of all resources is what we
call total quality. Total quality not only satisfies but delights the customers by offering attractive features in products
and services. Total quality is needed to be supplied to customers by the Indian companies in their products and
services.
1.8 Design
The complexity of business problems, organizations, operational and service systems, the number of variables
they involve, as well as the often chaotic environment to which they are subjected make it difficult to use prior
knowledge (in the form of mathematical models for example) to construct and calibrate these systems. In these cases,
experimentation is an important approach to generate knowledge which can be used for effective analysis an decision
making. When a product is put to use, the number of intervening variables may be too large, some of which may also
be uncontrollable. Further, experiments are usually costly: there nay be many variables and potentially a great deal of
experimental variation and errors, making the experimental results obtained difficult to compare and analyze in a
statistically acceptable manner. For such situations, experimental design, when it is properly used, provides a set of
consistent procedures and principles for collecting data so that an estimate of relationships between one set of
variables, called explanatory a variables, and another, called dependent variables, can be performed (even if there are
experimental errors). For example, we might seek to build a relationship between supply delay (the dependent
variable) and a number explanatory variables such as the number of transport trucks ( which can be controlled),
weather conditions and traffic intensity (which cannot be controlled). When variables can be controlled, this can be
used to reduce the amount of experimental variation. In other cases, selection of the levels associated with these
variables might be desired and valued in terms of some objectives function. ‘The selection of variables’ levels is a
design problem which we will consider at the end of this chapter. Both the experimental and design problems are
extremely important and useful. For example, to test a production process in a factor, it might be possible to limit the
number of variables (i.e. maintain them in control) which affect a product’s or a process’ performance by controlling
some of the variables (e.g. the pressure, the temperature used in the process, and so on).
Of course, experimental designs are not an end but a means to generate information analyze data a make decisions.
Even when such decisions are reached, they are based on forecasts, which are in the best of circumstances only
forecasts. There may be surprise4s and deviations from standards operating conditions. These deviations can be
controlled through inspection and control charts. Alternatively, it might be possible to design products or process (or
both) which would be insensitive to unexpected variations and perform equally well under a broad set of conditions
which we might not be able to control. When a product (or process) can perform in such a manner over a large set of
variations, it is said to be robust. Robust design then consists of selecting controllable parameters which achieve a
robust function (at a possibly lower cost). A robust design implies ‘fitness to use’, even when there can be many
BSPATIL

12. 12
unpredictable variations. In this sense, robustness is an essential feature of the design process, product or service, and
seeks to ‘build quality in the product’. For this reason, robust design in often associated with ‘off-line quality control’.
This means that control is not performed on-line but off-line.
To use experimental and robust design we require first that:
(a) We define what we mean by quality in precise and operational terms;
(b) We use TQM tools (such as Pareto charts, brainstorming, fishbone or cause – effect diagrams, data analysis
techniques and other tools) to select the ‘vital few’ variables (which we will call factors, and that we will use
in our experimental and robust design) which are most pertinent to our problem, both form economic and
explanatory points of views.
(c) We apply experimental design techniques to gather data which will be meaningful both statistically and
economically. This data will be called experimental response.
(d) Estimate a relationship between the response and the experimental factors (the independent variables).
(e) Optimize the controllable parameters (i.e. the design factors) such that the system, the product or the
production process being designed conforms to agreed upon desirable operating conditions and over a broad
range of environmental and uncontrollable conditions.
(f) Finally, we test, inspect and verify the product or process performance to ensure that it is operating in
conformance to the defined standards, and leads to a business process optimization (measured in terms of
profits, consumers satisfaction and their variability)
FIGURE : 1.2 THE CONCERNS OF QUALITY MANAGEMENT
In figure: 1.2, we summarize the concern for quality and the intensive use it makes of TQM tools, experimental
design, statistical analysis, applying economic and robust design and, finally, inspecting and testing to verify that the
results conform to the design intentions.
To achieve meaningful experimental results, experimental design reduces experimental errors through a
choice of experimental plans, the control of factors (by blocking them to specific values) and the application of
statistical techniques such as randomization, confounding and replication.
1.10 Attributes of a Good Design
A good design reflect an optimal trade-off between cost and performance. A good design is one which as:
• Cheap;
BSPATIL

13. 13
• Operates well over a large range;
• Compatible with related precuts;
Cheap and Simple
It is easy to make a design more complicated, but it take genius to simplify a design. The virtues of simplicity
are many. Simple designs are cheaper to produce than complex designs, because complexity requires precisions, and
high precision is more difficult to achieve than low precision. Simplicity means minimizing the number of parts In a
product. The number of parts in new generation dishwashers, cars and watches have been reduced by up to two-thirds
compared to old designs. Construction, too has been simplified. For example, instead of assembling parts with screws
and fasteners, these can now be grouped into sub-assemblies and mounted upon molded frames that snap together.
Costs are reduced as a result of:
• Fewer suppliers, less administration and supplier supervision and fewer supplier-related problems.
• Quicker assembly and production.
• Increased robustness
• Reduced cost as a result of 1,2 and 3 and the benefits of standardization.
• Greater customer satisfaction as a result of 1,2,3 and 4.
Integration and process capability
Good design requires not only a clear customer focus, but must integrate with the organization’s technology,
culture, market orientation, and so forth. Product design should be an opportunity for the organisation lead from
strength. This means that designers must take into account the process capability of their organisation. Process
capacity basically means: Can we do it?
The time to discover whether capability exists is at the design stage. This is so obvious, and yet it is surprising
just how many products and services are launched without the basic capability to pursue them.
Process capability analysis must cover all aspects of an organization’s activities. It is not only an
organization’s ability to produce a particular design which matters, but also whether It can distribute and market it.
Where new products or services are envisaged the organization’s skill and knowledge base are critical factors: such
capability has to be cultivated like a garden. Money alone is insufficient, as the large investment houses discovered
when they entered the financial services markets following liberalization during 90’s.
Investment houses tried to beat the competition by continuously poaching the ‘best’ people and investing in
computers, never acknowledging that no one really understood the new business. Instead of developing capability
through training and on-the job experience, many investment houses spent years money to create incompetence.
It is critically important that managers ensure that the necessary process capability exists or can be developed
in time. Hard evidence is essential. A simple but powerful approach is to differentiate between the following three
categories of information:
1. Known
2. Unclear
3. Assumed
There is, for example, a difference between obtaining confirmation that the bank will lend money to finance a
project and assuming that it will oblige in this way. Assumptions are often unavoidable in decisions about process
capability, but they become dangerous when people treat them as ‘knows’. Exposing assumptions is one of the
most valuable roles a manager can play in capability analysis as people so easily forget that their ‘knowledge’ is
but an assumption. We ‘know’ that the but will take us to Madras because it says ‘Madras’ on the destination
board. Yet we cannot be certain that it will do so again, however reasonable the assumptions.
1.11 ACHIEVING A ROBUST DESIGN
The variations a product experience in manufacturing are negligible compared with the variation it is
BSPATIL

14. 14
subjected to once it passes to the customer. Whereas the concept of zero defects is based upon the Idea that
reduced variation in the manufacturing processes leads to reduced variation or failure in the field.
Designing in order to reduce product failure in the field simultaneously reduces the likelihood of defects
in the manufacturing process.
The logic of the argument is as follows. The zero defects approach focuses managerial attention upon
ensuring that processes are within acceptable deviations from targets, for example, plus or minus 0.001 millimeter
thickness. Any departure from the nominal value means a loss. A bar of chocolate which is slightly below the
target value started on the wrapper results in a loss to the purchaser. The manufacturer too may suffer a loss. For
instance, the cumulative effect of so many underweight bars may mean boxes cannot be packed as tightly as they
should be, resulting in damage in transit. Loss is also incurred if the bars are slightly above the mid-value. For
instance, a surplus of three grams multiplied by 1,00,000 bars in 3 kilos of raw material, plus additional handling
costs. the customer too may suffer a loss. Taguchi, for instance, quotes the case of the person on a diet eating a
product which is a three grams heavier than anticipated.
Likewise, is some of the components of a car are above the mid-value the increased weight may result in
greater fuel costs.
The real weakness of the zero defects approach, however, is that in any batch of products, a significant
number will be close to the outer limits of the tolerance levels. Further, many of the other components which
comprise the finished product will be in a similar state. This can play havoc with quality.
The consequences of variation in a system are potentially catarascopic. A jet aircraft manufactured within the
tolerance limits might contain a large proportion of components which are virtually defective. The result is known
as ‘tolerance stack-up’.
Consistency reduces the probability of catastrophe ‘stack-up’ because components all vary. In the same way,
even if they are all off-target. Conversely a product which conforms to plus or minus specifications is less robust,
because the deviations are random and therefore unpredictable.
1.12 SPEEDING UP THE DESIGN PROCESS
The Pressure : Product obsolescence is a major problem for many organizations. The enormous pressure to innovate
and market new products quickly means that the danger of Ill-consisdered designs passing into production is high.
The problem is exacerbated in a phenomenon known as escalation. As Figure – 1.3 shows, costs increase
exponentially once a product passes from the design phase into testing and production. The whole organisation
becomes involved, finance is raised, advertising campaigns are planned equipment is purchased, advance orders are
taken, and so on. The process is extremely difficult to reverse and the longer it continues the greater the probability of
bad designs becomes bad products. The problem for organisatoins, therefore, is how to innovate quickly but soundly.
FIGURE 1.3 COST BEHAVIOUR DURING DESIGN AND PRODUCTION
Marketing haste slowly
Exhorting designers to work faster or to cut corners is counter productive. Although a ‘ramped up’
organizational culture may help, the real solution is to recognize that whilst some parts of the design process can be
speeded up, other parts need to be given more time.
BSPATIL

15. 15
Concept design is the most important phase and the one which is least amenable to pressure, at it requires
originality and fresh thinking. They should be encouraged to feed their intellect and imagination by undertaking
travel, study visits and so forth, without the expectation of an immediate payback. Further, they need to work in an
atmosphere where mistakes are regarded as progressive and where painstaking, high-quality work is valued.
The research and development phase focuses upon new materials and new processes required to translate the
design concept and ambitions into a workable model Product design involves translating the model into detailed
specifications and drawings. These latter phases of the design process can be speeded up by;
• Integration
• Removing sources of delay
• Concurrent planning
• Each these is now discussed in turn.
Integration
Integration involves the creation of interdisciplinary terms encompassing design, manufacturing and
marketing staffs. Engineers would develop the basic product. Once this was complete, designers then added the so-
called ‘wrap-round’. Then the manufacturing section had to work out how to product it. Incorporating these three
functions in one departments and carrying them out simultaneously has reduced the lead time for new products by
over one year.
Removing sources of delay
Over-control is a major source of delay, so:
• Keep the brief clear and simple.
• Minimize the amount of detail in design specifications
• Ensure designers understand customer needs and production capabilities.
The purpose of a design brief should be to liberate designers. It should therefore be confined to essentials, i.e.
specifying a maximum of three or four variables.
Concurrent planning
Quality requires attention to all aspects of a product. Design must therefore consider a wide range of issues,
including:
• Customer performance specifications
• Design specifications
• Manufacturing specifications
• Sales specifications
These, too, should concentrate on essentials, those features which are important to the customer.
Beware of specifying even essentials too tightly. Fine tolerances are rarely necessary and only make the
problem of controlling variability needlessly difficult.
Aim for ‘loose tolerances tightly enforced’, rather than ‘tight tolerances loosely enforced’.
If a customer insist upon tight tolerances, ask why he needs them. Rapid specifications are often a power ploy
by which to ‘screw down’ the supplier.
1.13 THE WORK PROCESS SYSTEM CONCEPT
Production is carried out by a multitude of work process system. Figure- 1.4 schematically describers such a
system with inflowing resources, transformation processes, and out flowing products and services. Any productive
system is embedded in an economic and social environment with which it constantly interacts. In this context quality
BSPATIL

16. 16
assurance has to be named as one of the man subsystems of a process system.
Other subsystems are the capital and cash flow system, manpower planning, management information, and
decision making systems. These subsystems are conceptually and practically interdependent and interactive. One can
also distinguish work process systems with reference to the managerial levels of responsibility in a corporate
production system in which the plants, branches and individuals jobs and operational systems are subordinated and
integrated.
Work process systems are not restricted to manufacturing industries, where materials, parts and suppliers are
transformed into higher values goods. Practically any business or enterprise uses various resources in order to sell its
products and services in the market. Therefore, retail stores, theaters, insurance agencies, and so on, are all to be
considered as productive systems.
PROCESS
OUTPUT
INPUT
FIGURE : 1.4 WORK PROCESS SYSTEMS
1.14 CATEGORIES FOR WORK PROCESS SYSTEMS
Categories for work process systems that aid their conceptualization and design are, for instance:
1. Custom built: One in which customers place their order with the producer or supplier before actual
production. This enables both partners to specify quality and other conditions, to meet the customer’s
particular requirements.
2. Repeat orders: One in which customers place an order ‘for an Item that is already produced or fully designed
and standardized.
3. Mass production: Product with standardized items differing form job shop production or production of
custom – made items that use intermittent production processes.
4. Projects: They describe production of large items with considerable complexity and uniqueness.
5. Services: Production (provision) of services, normally with direct customer contact before and during
production. Such services industries include transportation, public services, insurance, professional services,
and the like.
These are the main types of productive systems as they occur in reality. Other differentiations can be made such
as between small and large businesses. Each type of system has certain aspects in common, and these help to plan
products and production more adequately. Managers can orient themselves by common aspects of relevant types
and thus simplify their planning. Once the overall production has been properly established, the design of a
suitable quality assurance system is also greatly enhanced. Table 1.2 gives some examples of work process
systems quite familiar to us.
TABLE : 1.2 EXAMPLES OF WORK PROCESS SYSTEM
Work Process Systems Major Inputs Assembly Major output
Electronic assembly Components, Sub- Assembly T V set
BSPATIL

17. 17
assembltes
Printing Original Copy Editing, Proof, printing Book
Management in general Corporate goals Planning, supervising, Directives, decisions,
recoding, analyzing reports, information
Quality assurance Quality specification; Designing inspecting, Satisfactory quality
standards training audit image
1.15 PLANNING AND CONTROL OF WORK PROCESS
The planning and control work process more through the phases similar to those described for planning
cycles. The main phases are the system design, the startup, the maintenance, and the termination. These phases
describe the life cycle of a productive system. If the productive system is associated with one particular product, as is
usually the case in project type productions, then the product life directly determines the productive system’s
existence. If, for instance, the quality of a directly determines the productive system’s existence. If, for instance, the
quality of a product builds a sound quality image in the market, then the supporting productive system and its quality
assurance subsystem are strengthened as well. Effectiveness of planning and control enhances growth and length of
life. In order to plan and control a productive system, each case must be clearly defined and delineated. A useful
starting point is to determine the output (current or expected), because the purpose and objective define the productive
system. For instance, if the purpose is to assure the quality of a computer chip, the product would have to be specified
with regard to application, design criteria, and so forth, along with quantity, delivery mode and timing, location of
market, and production and resource bases. By clarifying the output in terms of the material, time, and place
dimensions, process capacities and inputs can then also be determined.
Once the work process is conceptualized in general aggregate terms, the various subsystems, such as the
quality assurance system can be designed. Various aspects, such as the management system, subsystem, plants,
departments, and specific markets or customers, each having a direct relationship to the expected output, help to
define the quality assurance system under consideration. There one can see that the systems view is a powerful
management aid and basic for any systematic planning and control of production and output quality.
Each phase of the system life demands specific planning and control activities and management
involvements. Forecasts of developments and control information induce frequent review and correction in design,
startup and other aspects of production. These phases can have a multitude of complex detailed planning objects and
problems. When phrase as questions, problems are more easily understood. Actually asking the right question at the
right time to the right person, makes a manager and planner proficient.
1.16 SIGNIFICANCE OF QUALITY
Quality of a product or service to an organisation is as important as sound health to a human-being. If a
person is not feeling well, it will affect the human-body. Similarly, the quality is a vital factor in shaping the future –
well being of an organisatoin. The quality of a product affects an organization’s reputation and image, productivity,
costs, profitability and its liability to the customers. These factors are discussed as follows:
(I) Reputation and Image:
Consumer is the king of the market. He will decide the fate, future of the organisatoins. Consumers always desire
qualitative products at a reasonable price prices. If an organisation manufactures products as per the expectations
of the customers, the quality of the products will infuse image and reputation on the organisatoin. Therefore, the
organisation has to devote adequate attention to quality of the products will infuse image and reputation on the
organisation. Therefore, the organisation has to devote adequate attention to quality of its products and services, a
failure in this regard can damage the organisatoin image and perhaps lead to a decreased share of the market in
case of a profit making organizations or increased criticism or controls in the case of a government agency or non
profit making organisation.
(II) Costs
Quality of a product or service is generally associated with the costs incurred by the organisation. Cost is
BSPATIL

18. 18
also an important factor to increase the reputation, image and market share of the organisation. Poor quality
increases certain costs like scrap and rework costs, replacement and repair costs after purchase, warranty costs,
inspection costs, transportation costs, payments to customers and discounts offered to customers to offset the
inferior quality. Thus costs are important factors affecting quality of a product or service.
(III) Productivity
Productivity generally refers to the relationship between and input and output. Productivity and quality are
often closely associated. Poor quality can adversely affect productivity during the manufacturing process if parts are
defective and have to be reworked, or if an assembler has to try a number of parts before finding one that fits
properly. Similarly, poor quality in tools and equipment can lead to injuries and defective output which must be
reworked or scraped, thereby reducing the amount of usable output for a given amount of input.
(IV) Organization’s Liability
Organisation is liable to the customers for the quality of it’s product or service. Organisatoin must pay special
attention to their potential liability due to damages or injuries resulting fro either faulty design or poor
workmanship. Thus, a poorly designed or improper assembly of steering arm on a car might cause the driver to
loose control of the car. The organisatoin liability costs can often be substantial, especially if large numbers of
items are involved, as in case in the automobile industry.
The above factors indicates the importance of quality. Therefore the management has to devote adequate attention
in designing the quality of the product, conformance of the product to the plan and so on. If he organisation fails
to do so, the poor quality of a product and service will adversely affect the costs of products, reputation and image
of the organisation, productivity and profitability and the liability to the customers.
1.17 QUALITY OBJECTIVES
An objective is a statement of the desired result to be achieved within a specified time. Whereas policies
provide broad guidelines on company affairs, objectives define specific goals. These goals then from the basis of
detailed planning of activities. Objectives can be short range (say, 1 year) or long range (say 5 years). The concept of
management by objectives is widespread. Under this concept, managers participate in establishing objectives, which
are then reduced to writing and become the basis planning for results.
Objectives may be created for breakthrough or control. There are many reasons why companies create
objectives for breakthrough:
1. They wish to attain or hold quality leadership.
2. They have identified some opportunities to improve income through superior fitness for use.
3. They are losing market share through lack of competitiveness.
4. They have too many field troubles – failures, complaints, returns – and wish to reduce these as well as cutting
the external costs resulting form guarantee charges, investigation expense, product discounts etc.
5. They have identified some projects which offer internal cost-reduction opportunities, e.g. improvement of
process yields or reduction or scrap, rework, inspection, or testing.
6. They have a poor image with customers, vendors, the public, or other groups of outsiders.
7. To improve motivation and morale among the employees.
1.18 SETTING OF OBJECTIVES
Objectives serve as a guide for the decisions and actions necessary for their accomplishment. They are further
described in the form of sub goals and subtasks. At the same time, objectives themselves are decisions arrived at after
careful consideration of the need, desirability, and feasibility for them in the given context.
Some questions to be answered are the following:
1. What should the elements in such a program be?
2. What published quality program standard should be complied with?
BSPATIL

19. 19
3. Should the program include design assurance or should it just be a defect-corrective inspection system?
4. Should the program involve a radical change in current control practices and procedure (a breakthrough), or a
more gradual change and improvement?
5. What individual projects and project goals would lead to development and implementation of such a quality
control program?
6. Who should be in charge of such projects and who should participate?
7. What deadlines should be set for the accomplishment of the quality control program and for the individual
milestones leading up to it?
All these questions and many more, require answers that will lead to the formulation of instrumental goals and task
assignments. The quality related hierarchy of objectives, goals, and tasks will follow the sequences.
This kind of structuring provides for systematic delegation of responsibilities from the top down to the
operational functions in a company, and thus for wide participation in determining tasks and responsibilities, and for
constructive communication and rational decision making. Objectives for better quality and quality assurance can
readily be understood by the company staff, particularly when the need is obvious and the possibility of blaming
others no longer exists.
Corporate and senior management can use quality assurance objectives for the purpose of achieving general
improvement in operations and staff cooperation. The new and innovative quality control program will require major
changes in production planning and control, new purchasing procedures, introduction of quality and operation- related
audits, and other measures that will have impact on the general work life in the company.
Major Principles
There are may principles that should be observed when setting quality assurance objectives:
1. The need for greater quality assurance efforts should be convincingly demonstrated and analyzed. Otherwise,
objectives will not be perceived as important challenges arid the probability for optimal attainment will be
reduced.
2. Objectives must be realistic in view of the financial and human capacity of the company. Ends and means
need to be tested as conflicts between them usually create frustration and disharmony. In working for quality
assurance, such adversity can very quickly become counter – productive.
3. Objectives must be clear, acceptable, and aligned with policy statements. Visible management input and
approval must exist at all times together and in compliance with:
• Existing codes and standards
• Facilitation of wide participation of all
• Allowance for independent decisions and partial goals setting
• Coordination of objectives, goals, and individual tasks for quality assurance.
• Translation of goals and tasks into fair and workable performance standards.
• Visible and meaningful recognition for goal achievement
• Fair and sufficient support in case of difficulties.
• Possible revision of tasks and goals and
• Adaptability
Rules and Procedures
Most of the rules for sound goal setting seem to be common sense, although their violation frequently leads to
just [conditions in a company that breed poor workmanship and poor quality, The style of goal setting for quality
assurance, as well as for other outcomes and achievements, depends on senior management policies arid the
BSPATIL

20. 20
personalities involved. A chief executive officer must see to it that laws, codes, regulations, and directives horn
government sources are complied with. On the other hand, they must also represent the interests of the company and
thus actively contribute to quality assurance, not only internally, but also externally. For instance, many major
customers impose compliance with published quality assurance standards, such as ISO-9000, ISI and so on. Corporate
officers have ample opportunity to participate in the writing of these standards and to participate in setting quality
assurance objectives in their industry.
Methods and Practice
Methods for goal setting range from independent conception, formulation, and communication by the boss to
more participatory approaches. The latter type of approach involves the operational staff by the use of quality circles
or the more conventional project treams. Through such dynamic goal setting at the grass roots levels, many problems
obstructing proper task achievement and workmanship can be overcome without direct senior management
involvement. At the same time, more serious and general problems and opportunities for improvement in current
quality assurance can be monitored and brought to the attention of supervisory management. Active and
comprehensive goal setting for better quality assurance should proceed from the top to the bottom and, to be realistic,
also in the reverse order.
The recently developed and most frequently applied institutional arrangement is the formation of project
teams, each having been assigned specific goals and tasks. Such project teams allow direct input and participations of
senior, as well as other, managerial and operational levels of staff. Depending upon the need and the environment, the
formation and execution of critical projects becomes a significant milestone in the improvement of quality.
In many cases, special tailor-made planning is needed for each key project. The exact form of such a project
is decided upon by a combination of the following:
1. Assessing the status quo.
2. Analyzing customers’ complaints
3. Analysis of major failures and defects, using histograms, and other similar methods.
4. Base line audits to determine strengths, weaknesses, and voids in current programmes.
5. Comparing the existing program with generic standards.
6. Deriving goals form existing corporate objectives and policies
7. Considering the setting of tasks and methods at the operator level.
1.19 QUALITY AND UNCERTAINTY
Uncertainty has several and simultaneous on quality, as will be studied later. Obviously, if value added is
quality, and if its is well defined, the measure of that value is what makes it possible to distinguish between various
qualities. When value added is uncertain or intangible, its measurement is more difficult, and therefore quality is
harder to express. In this sense, uncertainty has an important effect on the definition, measurement and management
of quality.
How does uncertainty affect? First, a consumer may not be able to observe directly and clearly the attributes
of a product. And, if and when he does so, this information is not always fully known, nor true. Misinformation
through false advertising, the unfortunate acquisition of faulty products, and poor experience in product consumption
are some of the problems that may beset an uninformed consumer. Similarly, some manufactures, although well
informed of their products’ attributes, may not always fully control the production of their products. Some items may
be faulty, the outcome of a manufacturing process’ complexity and the inherent difficulties in controls. As a result,
uncertainty regarding a product’s qualities induces a risk which is imposed on both the firm-producer and the buyer-
consumer. This risk has a direct effect on the valued added of quality, and is of course, a function of the presumed
attitude towards risk. The approaches used to manage these risks, both for the firm-producer and the consumer-buyer,
and how to share these risks, both for the firm-producer and the consumer-buyers, and how to share these risks, is
particularly important. Warranty contracts, services contracts, liability laws and the statistical control of quality in a
factory are some of the means available to manage these risks, as we shall see throughout this book.
Perceived risk has been envisioned as consisting of two essential components: consequences and uncertainty,
BSPATIL

21. 21
for a consumer, uncertainty can be viewed as the ‘subjectively measured probability of adverse consequences’. As
such, we can postulate that the quality of a product is inversely related to its risk. A non-risky product, meaning a
product having desirable consequences with large subjective probabilities, is a quality product. For example, if we
buy a part from some supplier, what would we consider quality? It may be several things, but generally it will be
defined in terms of an attribute of a part with desirable consequences, and little variation (i.e. high probability). Why
were Japanese and European cars at one time considered quality product? Buyers had the subjective estimation that
these cars would not fail and require repairs, and with a high probability! In this sense, quality is consistent with an
inductive reasoning which is reinforced once consumption experience of the product is registered. For example,
Jacoby and Kaplan attempted to measure quality by asking ‘What is the likelihood that there will be something wrong
with an unfamiliar brand of XXXX or that it will not work properly?’ Quality was meant then to be a perceptive
attribute which can, or course, be influenced by the marketing mix, good management of the factory, post sales
attention and services. Ingene and Hughes claims that a brand is perceived as being risky and thereby of lower
quality) by a consumer if an only if that consumer is uncertain as to what level (of at least one attribute about which
he/she is concerned) will be obtained if the product is purchased)
Uncertainty regarding product quality has led to intensive legislation on product labeling which seeks to
protect consumers on the one band and to convey information on the other. There are a number of important
questions which may be raised by buyers and seller alike, for example, the fat content of cheeses and hamburgers sold
in supermarkets, the alcohol in wine as we4ll as the origin of products. These do not always indicate quality. Some
wine growers believe that the alcohol content should not be put on the wine label. By doing so, alcohol is given an
importance and a relevance to wine quality which it does not, in their opinion, have. Cheeses, of all sorts, vary over
the year and, therefore, the fat content of the mild is really a relative measure (to the time of the year in which it was
produced as well as relative to the origin of the mild used in its production). In the case of Normandy Camembert,
there is further confusion since there are not enough cows in Normally to produce even a fraction of the Camembert
sold tinder this label! In other words, even a label of origin can be misleading. In the early 1950, for example, some
Japanese products, suffering from a poor reputation, had a label of made in USA, meaning the Japanese products,
suffering from a poor reputation, had a label of made in USA, meaning the Japanese city of USA. To simplify the
labeling of products, colored labels are also used. A red label for chickens in a supermarket is a mark of quality, but
under such labels there can be wide variety of chickens which need not have a uniform quality (even though they are
all labeled with the same color). In fact, a chicken ‘color’ may stand for similar origins, similar growing or feeding
conditions, or perhaps just cooperative marketing.
Although uncertainty is not a property which defines quality, the measurement and perception of quality are
directly affected by uncertainty, for this reason, an operational and economic definition of quality (which is the
relevant one for businesses) is necessarily sensitive to uncertainty. Due to the importance of this topic, we shall return
to it subsequently. Next, we consider manufacturing quality, which seeks to define the attributes of quality by the
manufacturing processes. Such characterization is essential to appreciate the potential and the limits of quality control
in industrial and operations management.
1.20 QUALITY IN MANUFACTURING
Manufacturing quality, unlike the general concept of quality we sought to define above, is well defined in
terms of attributes which are associated to and required by a manufacturing process to operate without any fault. In
this sense, quality is a characteristic and a requirement of the industrial apparatus. For example, a factory floor with
machines that break down often, machinery that is unable to operate at the required levels of precision, or uniformity
of operations, arid general manufacturing systems with a propensity to produce highly heterogeneous quality products
are an expression of a manufacturing unquality. Management of operations and quality control are thus the means
used to ‘produce’ and control quality in manufacturing.
There may be several dimensions along which such manufacturing quality may be defined, including:
1. The propensity to maintain the manufacturing process in control, i.e. operating according to agreed on
standards of manufacture.
2. The propensity of the manufacturing process to produce items or product faultlessly.
BSPATIL

22. 22
3. The propensity to maintain (and or reduce) the manufacturing process variability, i.e. limit process
instabilities by maintaining the process repetitively.
Thus, agreed on standards, faultless production and repetitively and control of variations are used to define
manufactured quality, in practice, manufacturing quality is easier to measure ‘negatively’. In other words, it is a
reflection of a negative performance (rather than a positive one, which is, or should have been, the standard). As a
result, the ideas underlying the management of quality in manufacturing relate to the management of the process
and not to the design of the product. This measure of quality is defined in terms of characteristics which are
important and related to the management of the manufacturing process. In this sense, the measurement of quality
is also an incentive for the control of quality. Or course it is possible, through appropriate integration of both
product design and the manufacturing process, to let one facet of quality management (its conception and design)
affect the other (the process of manufacturing the product). Although this is increasingly recognized as an
important activity known as ‘predictability’, or ‘concurrent engineering’, is has not yet fully matured (albeit, it is
the topic of intensive research today). In a conventional sense, a process in control would evidently results in
products of a better quality than a process which is not control. As a result, by improving the controls, we will be
able to increase the propensity to manufacture products of better quality.
For example, in the manufacturing of certain high precision metallic items, there may be many objective
attributes which could be measured and tested for deviations from acceptable manufacturing standards. These
may include the location of holes, their sizes (which often require extremely high precision), concentricity,
symmetry, and so on. These attributes are measured for the purpose of controlling the processes which are used in
making up a product! In other words, measurements (tests) are made to detect causes of malfunction needed to
control the manufacturing process. For these metallic parts, there may be many cause which contribute both to
defective manufacturing or to excessive variations from manufacturing standards. Lack of geometric perfection,
stress factors, materials stability, the ambient temperature, lack of perfect rigidity, etc. may be some of these
factors. The measurement and detection of the sub-standard performance provides the incentive for control and
correction.
Thus, just as conceptual or design quality, manufacturing quality is a complex concept which should be
clearly understood before trying to manage it. A comparison of several aspects of quality are given in Table: 1.3
to provide some further comparisons between manufacturing and design quality.
TALE 1.3 DESIGN AND MANUFACTURING QUALITY
Design quality Manufacturing quality
Durability Reliability
Esthetics Conformance to standards
Attributes’ desirability Process variability
Objective performance Consistency
Intangibles Tangibles
A manufacturer concerned with the production of quality products or services uses various tools, statistical and
otherwise, as we shall see later on. Statistical tools are used in particular when uncertainty has an important effect
on the manufacture of quality in such cases, poor quality is usually produced due to variations and uncertainties
regarding the process operations and performance. When performance variations are totally random, unaccounted
fro by any malfunction or cause, they reflect a characteristic of the manufacturing process, the type of materials
used and the process at hand. When product quality or their attributers to not deviate from a purely random
pattern, the manufacturing process is said to be out of control. In this sense, the management of quality in
manufacturing consists of determining departures from a state of perfect randomness. The techniques called
Statistical Quality Control (SQC) and Statistical Process Control (SPC) are used to elaborate and apply tests of
randomness of various sorts to measure and predict departments from this state of perfect randomness.
BSPATIL

23. 23
The increased need to control statistical variations, and thereby the need to control a manufacturing
process and its environment, have been ushered in by production concepts developed in the first industrial
revolution. These concepts, although complex and numerous, presume that production standards and producing
up to these standards ore essential to guarantee the substitutability of ports used in a moss production system.
Taking responsibility away from workers and their alienation at the beginning of the century in particular has led
to the necessity to control their work through work sampling and other methods used to predict and manage the
statistical variations which occur in manufacturing. These basic tenets of quality management have recently been
subject to scrutiny, motivated by a concern for a broader view of quality management, a view which takes
account of the whole manufacturing system, distribution, service and business processes, and seeks to produce
quality rather than to control some process variations (although this is also an important part of this broader
view). This emerging approach is called Total Quality Management. In addition, and more recently, a ‘quality
trauma’ has been ushered in by the increased power of consumers, and by the fact that there can not longer be any
justification economic. Managerial and technological for producing poor quality. Japanese inroads into quality
control techniques made in the last two decades have been an example to this effect and it has led firms to re asses
their priorities in terms of the control and management of quality. Based on such premises, we can appreciate the
inroads made towards improved quality by corporate boards, and its integration into business strategies. Quality is
Free (Crosby) and Quality on the Line (Garvin) are samples of work which highlights a growing concern for re-
valuing and re-evaluating the place and contribution of quality in manufacturing and its control.
As a result, basic and past tenets regarding quality in manufacturing have been questioned and revised. For
example, it is currently believed that:
• Quality is not only a cost, it is also a potential benefit, a value added to the manufacturer which can be
translated into added sales and profitability. There are, however, still difficulties in measuring the
potential benefits of quality which are essential in including managers to take the proper courses of action
to improve quality.
• Quality is not only process-specific but is total concept, involving everybody! This is the message of
Total Quality Control (TQC). In other words, the problem is not only the control of statistical variations
in a manufacturing process, but the basic question of producing quality in its broadest sense.
In other words, the re-evaluation of quality in terms of its costs, tractability and integration has created an
opportunity to re-design and reposition quality, quality improvement and control where they were always
supposed to be this transformation has of course brought quality to people to the organisatoin, to processes, to
services and, in the process, it is transforming production management both in design objectives and in
operational procedures. For example, from a ‘robotics notion of people to one based far more on motivation.
For example, from ‘robotics notion of people to one based far more on motivation and incentives to perform
from de-responsibilization to responsabilization. A reminder from Michelin’s workers’ book on profit
sharing:
The care brought by each worker in his work is the essential capital of the factory:
Implies and recognizes (already prior to the turn of this last century) that quality is a function of a worker’s
involvement in the work process and the responsibility he is assuming, not only with respect to his own work
(i.e. his auto-control), but also with respect to the collective (i.e. Total Control). In a practical sense, the
reconciliation concordance and coherence of ‘auto and collective controls’ underlie approaches to the control
of quality.
The emerging re-definitions of quality are of course leading to new objectives in process and product
design. Terms such as robustness are also becoming much more fashionable and appropriate. A robust design
will, for example, safeguard a standard operating performance against departures from pre-specified
conditions. In this vein, a product’s quality cannot be assessed in terms of its performance in a laboratory
environment, but in the ‘real world’, while it is being used by people who may or may not how best how to
use the product. Then, robustness is a measures of the latitude of conformance of the product to the user and
not to that of the process. For these reasons quality in manufacturing is a fast changing concept which today
seeks greater robustness in the definition of what we ought to look for to improve and produce quality
products and services.
BSPATIL

24. 24
The broader view of quality and the complexity of modern firms, combined with a commensurate
need to define measures of quality, have of course led to an expansion of the dimensions along which the
manufacture of quality ought to be considered. Presenting an integrated view, Garvin suggests eight
dimensions: Product performance, Product Features, Reliability, Conformance, Durability, Serviceability,
aesthetics and Perceived quality. For the management of quality it is essential to translate these dimensions
into economic values and Costs of Quality (COQ). These will include direct and indirect effects. Some
internal costs we might consider include: Planning and Training quality programmes; Inspection and Testing;
Failure and Scrap and Rework-Repair; Inventory added due to poor quality; Process and delay costs due to
stoppages, Capacity losses; Human relations related costs, External costs might include: Warranty and
liability costs; Servicing; Goodwill and sales; and finally, Costs due to regulatory agencies interventions.
These costs, properly assessed and combined with the operational costs of manufacture and the
potential contributions of quality to the firm competitiveness, provide notions of manufacture quality which
must be understood and valued. In is through such comprehension and valuation that we can affect every
facet of the firm and thereby make it possible for quality to become strategic and he managed. These
problems are of immense importance, so we shall return to their study in far greater detail in subsequent
chapters.
1.21 QUALITY AND SERVICES
Quality in services exhibit special characteristics. Some of these characteristics include:
• The quality of service generally involves not one but multiple services. For example, a gas station
provides several services beyond the supply (usually at a regulated price) of fuel. Hotels provide a room
and various associated services.
• Services are mostly intangible, often subjective, and are therefore difficult to define.
• Unlike quality in manufacturing, the quality of services depends both on the ‘server’ and the ‘serviced’.
Poor service is usually defined by the dissatisfaction of the latter. Further, service delivery, either good or
faulty, need not be consistent. Comparable notions of server breakdowns in industry such as machine
breakdown or improperly performed functions (and the storability of poorly performed operations) are
not applicable in services, as the former is tangible, expressed in some characteristics which are
measurable objectively.
• The quality of service and its measurements are dependent. A server who is inspected might improve the
quality of service delivery, for example, while a server who feels there are no controls might provide poor
service. Such behaviour introduces a natural bias in the measurement of service efficiency and its quality.
• A service is not storable, unlike products that can be sampled and tested for quality.
For these reasons, the definition of service quality is elusive. There are several approaches, as we shall see
next. The American Society for Logistics (ASLOG) suggests that service quality be defined in terms of
Communication, Time, Organisation, Flexibility, Reliability and Post Sales Service. Communication might be
measured byt eh opportunity for errors, document errors, billing, client follow through and information
exchange. Time relates to delays of various sorts (supply responses, routing, conformance and distribution).
Organisation includes the range of services delivered and agreed upon, security in transport and stocking, as
well as organizational forms such as subcontracting and franchises. Flexibility is the potential to meet
demands under various circumstances and to adapt to a broad range of operational and service conditions.
Reliability refers to the consistency of the service supplied, its timing and so forth. Finally, Post Sales Service
applies to maintainability, repairability, service proximity and availability as well as response time to post
sales failures.
BSPATIL