Introduction to Total
Quality in Organizations
Chee-Cheng Chen
Dec., 2012
1
Total Quality
• A comprehensive, organization-wide effort to
improve the quality of products and services
– Manufacturing and service
– Large and small
– Profit and not-for-profit
History of Quality Assurance
(1 of 3)
• Skilled craftsmanship during Middle Ages
• Industrial Revolution: rise of inspection
and separate quality departments
• Early 20th Century: statistical methods at
Bell System
• Quality control during World War II
• Post-war Japan: evolution of quality
management
3
History of Quality Assurance
(2 of 3)
• Quality awareness in U.S.
manufacturing industry during 1980s:
from “Little Q” to “Big Q” - Total Quality
Management
• Malcolm Baldrige National Quality
Award (1987)
• Disappointments and criticism
4
History of Quality Assurance
(3 of 3)
• Emergence of quality management in service
industries, government, health care, and
education
• Evolution of Six Sigma
• Current and future challenge: keep progress
in quality management alive
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Defining Quality
Perfection
Fast delivery
Providing a good, usable product
Eliminating waste
Consistency
Doing it right the first time
Delighting or pleasing customers
Total customer service and satisfaction
Compliance with policies and procedures
Formal Definitions of Quality
• The totality of features and
characteristics of a product or service
that bears on its ability to satisfy given
needs – American Society for Quality
– Fitness for use
– Meeting or exceeding customer
expectations
– Conformance to specifications
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Quality in Manufacturing
• Performance – primary operating characteristics
• Features – “bells and whistles”
• Reliability – probability of operating for specific
time and conditions of use
• Conformance – degree to which characteristics
match standards
• Durability - amount of use before deterioration or
replacement
• Serviceability – speed, courtesy, and
competence of repair
• Aesthetics – look, feel, sound, taste, smell
Key Dimensions of Service
Quality
• Time – how much time must a customer wait?
• Timeliness – will a service be performed when
promised?
• Completeness – Are all items in the order included?
• Courtesy – do frontline employees greet each
customer cheerfully?
• Consistency – are services delivered in the same
fashion for every customer, and every time for the
same customer?
• Accessibility and convenience – is the service easy
to obtain?
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Differences Between Manufacturing
and Services
• Customer needs and performance standards are
often difficult to identify and measure
• The production of services typically requires a
higher degree of customization
• The output of many service systems is intangible
• Services are produced and consumed
simultaneously
• Customers often are involved in the service
process and present while it is being performed
• Services are generally labor intensive
• Many service organizations must handle very
large numbers of customer transactions.
Quality and E-commerce
• Customer expectations
– Valuable content that is intuitive and
understandable, accurate, and current
– Speed and reliability
– Ease of use and ability to meet
expectations
Deming Philosophy
The Deming philosophy focuses on continual
improvements in product and service quality by
reducing uncertainty and variability in design,
manufacturing, and service processes, driven by
the leadership of top management.
Deming Chain Reaction
Improve quality
Costs decrease
Productivity improves
Increase market share with better
quality and lower prices
Stay in business
Provide jobs and more jobs
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Deming’s System of Profound Knowledge
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•
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•
Appreciation for a system
Understanding variation
Theory of knowledge
Psychology
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Systems
• Most organizational processes are
cross-functional
• Parts of a system must work together
• Every system must have a purpose
• Management must optimize the
system as a whole
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Variation
• Many sources of uncontrollable
variation exist in any process
• Excessive variation results in product
failures, unhappy customers, and
unnecessary costs
• Statistical methods can be used to
identify and quantify variation to help
understand it and lead to
improvements
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Theory of Knowledge
• Knowledge is not possible without
theory
• Experience alone does not establish
a theory, it only describes
• Theory shows cause-and-effect
relationships that can be used for
prediction
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Psychology
• People are motivated intrinsically and
extrinsically; intrinsic motivation is the
most powerful
• Fear is demotivating
• Managers should develop pride and joy in
work
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Deming’s 14 Points (Abridged)
(1 of 2)
1. Create and publish a company mission
statement and commit to it.
2. Learn the new philosophy.
3. Understand the purpose of inspection.
4. End business practices driven by price alone.
5. Constantly improve system of production
and service.
6. Institute training.
7. Teach and institute leadership.
8. Drive out fear and create trust.
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Deming’s 14 Points (2 of 2)
9. Optimize team and individual efforts.
10. Eliminate exhortations for work force.
11. Eliminate numerical quotas and M.B.O.
Focus on improvement.
12. Remove barriers that rob people of pride
of workmanship.
13. Encourage education and self-improvement.
14. Take action to accomplish the transformation.
www.deming.org
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Juran Philosophy
Juran proposed a simple definition of
quality: “fitness for use.” This definition
of quality suggests that it should be
viewed from both external and internal
perspectives; that is, quality is related
to “(1) product performance that results
in customer satisfaction; (2) freedom
from product deficiencies, which avoids
customer dissatisfaction.”
Juran’s Quality Trilogy
• Quality planning
• Quality control
• Quality improvement
www.juran.com
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Crosby Philosophy
Quality is free . . .
“Quality is free. It’s not a gift, but it is
free. What costs money are the unquality
things -- all the actions that involve not
doing jobs right the first time.”
Crosby’s Absolutes of Quality
Management
•
•
•
•
Quality means conformance to requirements
Problems are functional in nature
There is no optimum level of defects
Cost of quality is the only useful
measurement
• Zero defects is the only performance
standard
www.philipcrosby.com
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Principles of Total Quality
•
•
•
•
•
•
Customer and stakeholder focus
Process orientation
Continuous improvement and learning
Empowerment and teamwork
Management by fact
Visionary leadership that views TQ as a
strategic organizational asset
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Customer and Stakeholder
Focus
•
•
•
•
Customer is principal judge of
quality
Organizations must first understand
customers’ needs and expectations
in order to meet and exceed them
Organizations must build
relationships with customers
Customers are internal and external
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Process Orientation
•
A process is a sequence of activities that is
intended to achieve some result
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Cross-functional Perspective
Continuous Improvement and
Learning
• Incremental and breakthrough
improvement
– Products and services
– Work processes
– Flexibility, responsiveness, and cycle time
• Learning – why changes are successful
through feedback between practices and
results
Learning Cycle
1.
2.
3.
4.
Planning
Execution of plans
Assessment of progress
Revision of plans based upon
assessment findings
Empowerment and Teamwork
•
•
•
•
Empowerment – giving people authority to
make decisions and promote change
Employees know their jobs best and
therefore, how to improve them
Empowerment better serves customers, and
creates trust and motivation
Teamwork must exist vertically, horizontally,
and interorganizationally
31
Management by Fact
• Organizations need good performance
measures to drive strategies and change,
manage resources, and continuously improve
• Data and information support analysis at all
levels
• Typical measures: customer, product and
service, market, competitive comparisons,
supplier, employee, cost and financial
Visionary Leadership and Strategic
Orientation
• Leadership is the responsibility of top
management
• Senior leaders should be role models for
the entire organization
• Leaders must make long-term
commitments to key stakeholders
• Quality should drive strategic plans
TQ and Agency Theory
• Agency relationship: a concept in which
one party (the principal) engages another
party (the agent) to perform work
• Key assumption: individuals in agency
relationships are utility maximizers and will
always take actions to enhance their selfinterests.
Contrast With TQ
(1 OF 2)
• TQ views the management system as one
based on social and human values, whereas
agency theory is based on an economic
perspective that removes people from the
equation.
• Agency theory profounds the belief that people
are self-interested and opportunistic and that
their rights are conditional and proportional to
the value they add to the organization. TQ
suggests that people are also motivated by
interests other than self, and that people have
an innate right to be respected.
Contrast With TQ (2 OF 2)
• Agency theory assumes an inherent conflict of goals
between agents and principals, and that agent goals are
aligned with principal goals through formal contracts. In
TQ, everyone in the organization shares common goals
and a continuous improvement philosophy, and goals are
aligned through adoption of TQ practices and culture.
• TQ takes a long-term perspective based on continuous
improvement, whereas agency theory focuses on shortterm achievement of the contract between the principal
and agent.
• TQ leaders provide a quality vision and play a strategic
role in the organization; leaders in agency theory develop
control mechanisms and engage in monitoring.
TQ and Organizational Models