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11
Chapter 2Chapter 2
Total Quality inTotal Quality in
OrganizationsOrganizations The
Management
& Control of
Quality, 7e
2
Growth of Modern QualityGrowth of Modern Quality
ManagementManagement
Manufacturing
quality
Improved
product designs
Service
quality
Performance
excellence
Key IdeaKey Idea
As consumer expectations have risen, a
focus on quality has permeated other key
sectors of the economy, most notably
health care, education, not-for-profits,
and government.
SystemsSystems
 AA systemsystem is a set of functions or activitiesis a set of functions or activities
within an organization that work together forwithin an organization that work together for
the aim of the organization.the aim of the organization.
 Subsystems of an organization are linkedSubsystems of an organization are linked
together as internal customers andtogether as internal customers and
suppliers.suppliers.
 A systems perspective acknowledges theA systems perspective acknowledges the
importance of the interactions ofimportance of the interactions of
subsystems, not the actions of themsubsystems, not the actions of them
individually.individually.
Key IdeaKey Idea
Successful management relies on a
systems perspective, one of the most
important elements of total quality.
6
Manufacturing SystemsManufacturing Systems (1 of 2)(1 of 2)
 Marketing and salesMarketing and sales
 Product design and engineeringProduct design and engineering
 Purchasing and receivingPurchasing and receiving
 Production planning andProduction planning and
schedulingscheduling
 Manufacturing and assemblyManufacturing and assembly
 Tool engineeringTool engineering
7
Manufacturing SystemsManufacturing Systems (2 of(2 of
2)2)
 Industrial engineering and processIndustrial engineering and process
designdesign
 Finished goods inspection and testFinished goods inspection and test
 Packaging, shipping, andPackaging, shipping, and
warehousingwarehousing
 Installation and serviceInstallation and service
Key IdeaKey Idea
Traditional quality assurance systems in
manufacturing focus primarily on technical
issues such as equipment reliability,
inspection, defect measurement, and
process control.
Relationships in a TypicalRelationships in a Typical
Manufacturing SystemManufacturing System
(Fig.2.1)(Fig.2.1)
Quality in MarketingQuality in Marketing
Marketing and sales personnel are
responsible for determining the needs
and expectations of consumers.
Quality in ProductQuality in Product
DesignDesign
Product design and engineering functions
develop technical specifications for
products and production processes to
meet the requirements determined by the
marketing function.
Quality in PurchasingQuality in Purchasing
A purchasing agent should not simply be
responsible for low-cost procurement, but
should maintain a clear focus on the
quality of purchased goods and materials.
Quality in ProductionQuality in Production
Planning & SchedulingPlanning & Scheduling
Poor quality often results from time
pressures caused by insufficient planning
and scheduling.
Quality in ManufacturingQuality in Manufacturing
and Assemblyand Assembly
Both technology and people are essential
to high-quality manufacturing.
Quality in ProductionQuality in Production
Planning & SchedulingPlanning & Scheduling
Poor quality often results from time
pressures caused by insufficient planning
and scheduling.
Quality in ProcessQuality in Process
DesignDesign
Manufacturing processes must be
capable of producing output that meets
specifications consistently.
Quality in Finished GoodsQuality in Finished Goods
Inspection and TestingInspection and Testing
The purposes of final product inspection
are to judge the quality of manufacturing,
to discover and help to resolve production
problems that may arise, and to ensure
that no defective items reach the customer.
Quality in Installation andQuality in Installation and
ServiceService
Service after the sale is one of the most
important factors in establishing customer
perception of quality and customer
loyalty.
19
Quality in BusinessQuality in Business
Support Functions forSupport Functions for
ManufacturingManufacturing
 Finance and accountingFinance and accounting
 Quality assuranceQuality assurance
 Legal servicesLegal services
Key IdeaKey Idea
Every manager is responsible for
studying and improving the quality of the
process for which he or she is
responsible; thus, every manager is a
quality manager.
21
Quality in ServicesQuality in Services
 ServiceService is defined as “any primary oris defined as “any primary or
complementary activity that does notcomplementary activity that does not
directly produce a physical product –directly produce a physical product –
that is, the non-goods part of thethat is, the non-goods part of the
transaction between buyer (customer)transaction between buyer (customer)
and seller (provider).”and seller (provider).”
Key IdeaKey Idea
The American Management Association
estimates that the average company
loses as many as 35 percent of its
customers each year, and that about two-
thirds of these are lost because of poor
customer service.
23
Critical Differences BetweenCritical Differences Between
Service and ManufacturingService and Manufacturing (1 of(1 of
2)2)
 Customer needs and performanceCustomer needs and performance
standards are more difficult tostandards are more difficult to
identify and measureidentify and measure
 Services requires a higher degree ofServices requires a higher degree of
customizationcustomization
 Output is intangibleOutput is intangible
Critical Differences BetweenCritical Differences Between
Service and ManufacturingService and Manufacturing (2 of(2 of
2)2)
 Services are produced and consumedServices are produced and consumed
simultaneouslysimultaneously
 Customers are often involved in actualCustomers are often involved in actual
processprocess
 Services are more labor-intensive thanServices are more labor-intensive than
manufacturingmanufacturing
 Services handle large numbers ofServices handle large numbers of
transactionstransactions
Key IdeaKey Idea
These differences make it difficult for
many service organizations to apply total
quality principles, and foster misguided
perceptions that quality management
cannot be effectively accomplished in
services.
26
Components of ServiceComponents of Service
System QualitySystem Quality
 EmployeesEmployees
 Information technologyInformation technology
Key IdeaKey Idea
Researchers have repeatedly
demonstrated that when service employee
job satisfaction is high, customer
satisfaction is high, and that when job
satisfaction is low, customer satisfaction is
low.
Key IdeaKey Idea
Information technology is essential for
quality in modern service organizations
because of the high volumes of information
they must process and because customers
demand service at ever-increasing speeds.
Quality in Health CareQuality in Health Care
 Joint Commission on Accreditation ofJoint Commission on Accreditation of
Healthcare Organizations (JCAHO)Healthcare Organizations (JCAHO)
 National Committee for QualityNational Committee for Quality
Assurance (NCQA)Assurance (NCQA)
 Institute for Healthcare ImprovementInstitute for Healthcare Improvement
(IHI)(IHI)
 1999 expansion of the Baldrige Award1999 expansion of the Baldrige Award
to nonprofit health care organizationsto nonprofit health care organizations
Quality Issues in HealthQuality Issues in Health
CareCare
 Avoidable errorsAvoidable errors
 Underutilization of servicesUnderutilization of services
 Overuse of servicesOveruse of services
 Variation in servicesVariation in services
Key IdeaKey Idea
Although the national health care system
as a whole may need a sweeping
overhaul, many individual providers have
turned toward quality as a means of
achieving better performance and
customer satisfaction.
32
Quality in EducationQuality in Education
 Koalaty KidKoalaty Kid
– Active involvement of whole schoolActive involvement of whole school
communitycommunity
– Committed leadershipCommitted leadership
– System for continuous improvementSystem for continuous improvement
– Environment that celebrates successEnvironment that celebrates success
Quality in Higher EducationQuality in Higher Education
Business plays an important role in
fostering quality improvement efforts in
higher education by transferring
knowledge and expertise on quality
processes and implementation practices.
Academic QualityAcademic Quality
Improvement Project (AQIP)Improvement Project (AQIP)
AQIP criteria focuses on institutional practices
for helping students learn, accomplishing other
distinct objectives, understanding student and
stakeholder needs, valuing people, leading
and communicating, supporting institutional
operations, measuring effectiveness, planning
continuous improvement, and building
collaborative relationships—all of which are
key elements of TQ.
Quality in Small BusinessQuality in Small Business
and Not-for-Profitsand Not-for-Profits
 Slow to adopt quality approachesSlow to adopt quality approaches
– General lack of understanding andGeneral lack of understanding and
knowledge about qualityknowledge about quality
– Focus on sales and market growth, cashFocus on sales and market growth, cash
flow, and routine fire fightingflow, and routine fire fighting
– Lack of resources for formal qualityLack of resources for formal quality
systemssystems
Key IdeaKey Idea
Perhaps the most important factor in
successful quality initiatives in small
businesses is the recognition by the CEO
or president that a quality focus can be
beneficial and lead to achieving
organizational goals.
37
Quality in the Public SectorQuality in the Public Sector
 Quality in the Federal GovernmentQuality in the Federal Government
– Federal Quality InstituteFederal Quality Institute
– President’s Quality AwardPresident’s Quality Award
 State and Local Quality EffortsState and Local Quality Efforts
Key IdeaKey Idea
Quality concepts and principles are
universal and can be applied in all types
of organizations. The difficulty, of
course, is developing an infrastructure
to make it happen and the discipline to
sustain efforts over time.

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Ch02 evans mcq_aise[1]

  • 1. 11 Chapter 2Chapter 2 Total Quality inTotal Quality in OrganizationsOrganizations The Management & Control of Quality, 7e
  • 2. 2 Growth of Modern QualityGrowth of Modern Quality ManagementManagement Manufacturing quality Improved product designs Service quality Performance excellence
  • 3. Key IdeaKey Idea As consumer expectations have risen, a focus on quality has permeated other key sectors of the economy, most notably health care, education, not-for-profits, and government.
  • 4. SystemsSystems  AA systemsystem is a set of functions or activitiesis a set of functions or activities within an organization that work together forwithin an organization that work together for the aim of the organization.the aim of the organization.  Subsystems of an organization are linkedSubsystems of an organization are linked together as internal customers andtogether as internal customers and suppliers.suppliers.  A systems perspective acknowledges theA systems perspective acknowledges the importance of the interactions ofimportance of the interactions of subsystems, not the actions of themsubsystems, not the actions of them individually.individually.
  • 5. Key IdeaKey Idea Successful management relies on a systems perspective, one of the most important elements of total quality.
  • 6. 6 Manufacturing SystemsManufacturing Systems (1 of 2)(1 of 2)  Marketing and salesMarketing and sales  Product design and engineeringProduct design and engineering  Purchasing and receivingPurchasing and receiving  Production planning andProduction planning and schedulingscheduling  Manufacturing and assemblyManufacturing and assembly  Tool engineeringTool engineering
  • 7. 7 Manufacturing SystemsManufacturing Systems (2 of(2 of 2)2)  Industrial engineering and processIndustrial engineering and process designdesign  Finished goods inspection and testFinished goods inspection and test  Packaging, shipping, andPackaging, shipping, and warehousingwarehousing  Installation and serviceInstallation and service
  • 8. Key IdeaKey Idea Traditional quality assurance systems in manufacturing focus primarily on technical issues such as equipment reliability, inspection, defect measurement, and process control.
  • 9. Relationships in a TypicalRelationships in a Typical Manufacturing SystemManufacturing System (Fig.2.1)(Fig.2.1)
  • 10. Quality in MarketingQuality in Marketing Marketing and sales personnel are responsible for determining the needs and expectations of consumers.
  • 11. Quality in ProductQuality in Product DesignDesign Product design and engineering functions develop technical specifications for products and production processes to meet the requirements determined by the marketing function.
  • 12. Quality in PurchasingQuality in Purchasing A purchasing agent should not simply be responsible for low-cost procurement, but should maintain a clear focus on the quality of purchased goods and materials.
  • 13. Quality in ProductionQuality in Production Planning & SchedulingPlanning & Scheduling Poor quality often results from time pressures caused by insufficient planning and scheduling.
  • 14. Quality in ManufacturingQuality in Manufacturing and Assemblyand Assembly Both technology and people are essential to high-quality manufacturing.
  • 15. Quality in ProductionQuality in Production Planning & SchedulingPlanning & Scheduling Poor quality often results from time pressures caused by insufficient planning and scheduling.
  • 16. Quality in ProcessQuality in Process DesignDesign Manufacturing processes must be capable of producing output that meets specifications consistently.
  • 17. Quality in Finished GoodsQuality in Finished Goods Inspection and TestingInspection and Testing The purposes of final product inspection are to judge the quality of manufacturing, to discover and help to resolve production problems that may arise, and to ensure that no defective items reach the customer.
  • 18. Quality in Installation andQuality in Installation and ServiceService Service after the sale is one of the most important factors in establishing customer perception of quality and customer loyalty.
  • 19. 19 Quality in BusinessQuality in Business Support Functions forSupport Functions for ManufacturingManufacturing  Finance and accountingFinance and accounting  Quality assuranceQuality assurance  Legal servicesLegal services
  • 20. Key IdeaKey Idea Every manager is responsible for studying and improving the quality of the process for which he or she is responsible; thus, every manager is a quality manager.
  • 21. 21 Quality in ServicesQuality in Services  ServiceService is defined as “any primary oris defined as “any primary or complementary activity that does notcomplementary activity that does not directly produce a physical product –directly produce a physical product – that is, the non-goods part of thethat is, the non-goods part of the transaction between buyer (customer)transaction between buyer (customer) and seller (provider).”and seller (provider).”
  • 22. Key IdeaKey Idea The American Management Association estimates that the average company loses as many as 35 percent of its customers each year, and that about two- thirds of these are lost because of poor customer service.
  • 23. 23 Critical Differences BetweenCritical Differences Between Service and ManufacturingService and Manufacturing (1 of(1 of 2)2)  Customer needs and performanceCustomer needs and performance standards are more difficult tostandards are more difficult to identify and measureidentify and measure  Services requires a higher degree ofServices requires a higher degree of customizationcustomization  Output is intangibleOutput is intangible
  • 24. Critical Differences BetweenCritical Differences Between Service and ManufacturingService and Manufacturing (2 of(2 of 2)2)  Services are produced and consumedServices are produced and consumed simultaneouslysimultaneously  Customers are often involved in actualCustomers are often involved in actual processprocess  Services are more labor-intensive thanServices are more labor-intensive than manufacturingmanufacturing  Services handle large numbers ofServices handle large numbers of transactionstransactions
  • 25. Key IdeaKey Idea These differences make it difficult for many service organizations to apply total quality principles, and foster misguided perceptions that quality management cannot be effectively accomplished in services.
  • 26. 26 Components of ServiceComponents of Service System QualitySystem Quality  EmployeesEmployees  Information technologyInformation technology
  • 27. Key IdeaKey Idea Researchers have repeatedly demonstrated that when service employee job satisfaction is high, customer satisfaction is high, and that when job satisfaction is low, customer satisfaction is low.
  • 28. Key IdeaKey Idea Information technology is essential for quality in modern service organizations because of the high volumes of information they must process and because customers demand service at ever-increasing speeds.
  • 29. Quality in Health CareQuality in Health Care  Joint Commission on Accreditation ofJoint Commission on Accreditation of Healthcare Organizations (JCAHO)Healthcare Organizations (JCAHO)  National Committee for QualityNational Committee for Quality Assurance (NCQA)Assurance (NCQA)  Institute for Healthcare ImprovementInstitute for Healthcare Improvement (IHI)(IHI)  1999 expansion of the Baldrige Award1999 expansion of the Baldrige Award to nonprofit health care organizationsto nonprofit health care organizations
  • 30. Quality Issues in HealthQuality Issues in Health CareCare  Avoidable errorsAvoidable errors  Underutilization of servicesUnderutilization of services  Overuse of servicesOveruse of services  Variation in servicesVariation in services
  • 31. Key IdeaKey Idea Although the national health care system as a whole may need a sweeping overhaul, many individual providers have turned toward quality as a means of achieving better performance and customer satisfaction.
  • 32. 32 Quality in EducationQuality in Education  Koalaty KidKoalaty Kid – Active involvement of whole schoolActive involvement of whole school communitycommunity – Committed leadershipCommitted leadership – System for continuous improvementSystem for continuous improvement – Environment that celebrates successEnvironment that celebrates success
  • 33. Quality in Higher EducationQuality in Higher Education Business plays an important role in fostering quality improvement efforts in higher education by transferring knowledge and expertise on quality processes and implementation practices.
  • 34. Academic QualityAcademic Quality Improvement Project (AQIP)Improvement Project (AQIP) AQIP criteria focuses on institutional practices for helping students learn, accomplishing other distinct objectives, understanding student and stakeholder needs, valuing people, leading and communicating, supporting institutional operations, measuring effectiveness, planning continuous improvement, and building collaborative relationships—all of which are key elements of TQ.
  • 35. Quality in Small BusinessQuality in Small Business and Not-for-Profitsand Not-for-Profits  Slow to adopt quality approachesSlow to adopt quality approaches – General lack of understanding andGeneral lack of understanding and knowledge about qualityknowledge about quality – Focus on sales and market growth, cashFocus on sales and market growth, cash flow, and routine fire fightingflow, and routine fire fighting – Lack of resources for formal qualityLack of resources for formal quality systemssystems
  • 36. Key IdeaKey Idea Perhaps the most important factor in successful quality initiatives in small businesses is the recognition by the CEO or president that a quality focus can be beneficial and lead to achieving organizational goals.
  • 37. 37 Quality in the Public SectorQuality in the Public Sector  Quality in the Federal GovernmentQuality in the Federal Government – Federal Quality InstituteFederal Quality Institute – President’s Quality AwardPresident’s Quality Award  State and Local Quality EffortsState and Local Quality Efforts
  • 38. Key IdeaKey Idea Quality concepts and principles are universal and can be applied in all types of organizations. The difficulty, of course, is developing an infrastructure to make it happen and the discipline to sustain efforts over time.