9-1

McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
Chapters 9
Management of Quality
9-2
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
Quality Management
What does the term quality mean?

Quality is the ability of a product or
service to consistently meet or
exceed customer expectations.
9-3
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
Dimensions of Quality
Performance - main characteristics of the
product/service
Aesthetics - appearance, feel, smell, taste
Special features - extra characteristics
Conformance - how well product/service
conforms to customers expectations
Safety - Risk of injury
Reliability - consistency of performance

9-4
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
Dimensions of Quality (Contd)
Durability - useful life of the
product/service
Perceived Quality - indirect evaluation of
quality (e.g. reputation)
Service after sale - handling of customer
complaints or checking on customer
satisfaction
9-5
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
Examples of Quality Dimensions
Dimension
1. Performance
2. Aesthetics
3. Special features
Convenience
High tech
4. Safety
(Product)
Automobile
Everything works, fit &
finish
Ride, handling, grade of
materials used
Interior design, soft touch
Gauge/control placement
Cellular phone, CD
player
Antilock brakes, airbags
(Service)
Auto Repair
All work done, at agreed
price
Friendliness, courtesy,
Competency, quickness
Clean work/waiting area
Location, call when ready
Computer diagnostics
Separate waiting area
Table 9-1
9-6
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
Examples of Quality Dimensions (Contd)
Dimension
5. Reliability
6. Durability
7. Perceived
quality
8. Service after
sale
(Product)
Automobile
Infrequency of breakdowns
Useful life in miles, resistance
to rust & corrosion
Top-rated car
Handling of

complaints and/or
requests for information
(Service)
Auto Repair
Work done correctly,
ready when promised
Work holds up over
time
Award-winning service
department
Handling of complaints
Table 9-1
9-7
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
TOTAL QUALITY INTERFACES
QUALITY
QUALITY OF PERFORMANCE
QUALITY OF DESIGN
QUALITY OF CONFORMANCE
CONSUMER NEEDS/REQUIREMENTS
WORK PROCESS/SYSTEM
9-8
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
The Costs of Poor
Quality
Prevention Costs
Appraisal Costs
Internal Failure Costs
External Failure Costs
9-9
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
Costs of quality assurance
Prevention Costs
QC administration and systems planning
Quality training
Quality planning (QC engineering work) Incoming, in-
process, final inspection
Special processes planning
Quality data analysis
Procurement planning
Vendor surveys
Reliability studies
Quality measurement and control equipment
Qualification of material
Source: Adapted form J. W. Gavett, Production and Operations Management (New York: Harcourt Brace Jovanovich
9-10
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
Costs of quality assurance
Appraisal Costs
Testing
Inspection
Quality audits
Incoming test and inspection and laboratory
acceptance
Checking labor
Laboratory or other measurement service
Setup for test and inspection
Test and inspection material
Outside endorsement
Maintenance and calibration
Product engineering review and shipping release
Field testing



Source: Adapted form J. W. Gavett, Production and Operations Management (New York: Harcourt Brace Jovanovich
9-11
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
Costs of quality assurance
Internal Failure Costs
Scrap, at full shop cost
Rework, at full shop cost
Scrap and rework , fault of vendor
Material procurement
Factory contact engineering
QC investigations (of failures)
Material review activity
Repair and troubleshooting



Source: Adapted form J. W. Gavett, Production and Operations Management (New York: Harcourt Brace Jovanovich
9-12
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
Costs of quality assurance
External Failure Costs
Complaints and loss of customer goodwill
Warranty costs
Field maintenance and product service
Returned material processing and repair
Replacement inventories
Strained distributor relations




Source: Adapted form J. W. Gavett, Production and Operations Management (New York: Harcourt Brace Jovanovich
9-13
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
Costs of Detecting Defects
C
o
s
t

o
f

d
e
t
e
c
t
i
o
n

a
n
d

c
o
r
r
e
c
t
i
o
n

Process Final testing Customer
Where defect is detected
Figure 6.3
9-14
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
Percentage Cost Distribution by Category:
Watches
External failure
52%
Internal failure
29%
Appraisal
16%
Prevention
3%
Fourth-Quarter Indexes
9-15
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
Hidden costs of poor Quality
9-16
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
Total Quality Management
A philosophy that involves everyone
in an organization in a continual
effort to improve quality and achieve
customer satisfaction.
9-17
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
Find out what the customer wants
Design a product or service that meets
or exceeds customer wants
Design processes that facilitates doing
the job right the first time
Keep track of results
Extend these concepts to suppliers
The TQM Approach
9-18
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
TQM
Wheel
Customer
satisfaction
Figure 6.1
9-19
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
Elements of TQM
Continual improvement
Competitive benchmarking
Employee empowerment
Team approach
Decisions based on facts
Knowledge of tools
Supplier quality
Champion
9-20
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
Continuous Improvement
Philosophy that seeks to make
never-ending improvements to the
process of converting inputs into
outputs.
Kaizen: Japanese
word for continuous
improvement.
9-21
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
Benchmarking
Benchmarking is the process of
measuring an organizations
performance against that best in the
same or another industry.

Types of benchmarking
Internal
Competitive
Functional
9-22
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
Six Sigma Management
Providing strong leadership
Defining performance metris
Selecting projects likely to succeed
Selecting and training appropriate
people
9-23
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
Six Sigma Technical
Improving process performance
Reducing variation
Utilizing statistical models
Designing a structured improvement
strategy
9-24
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
Six Sigma Team
Top management
Program champions
Master black belts
Black belts
Green belts
9-25
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
Six Sigma Process
Define
Measure
Analyze
Improve
Control

DMAIC
9-26
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
Basic Steps in Problem Solving
Define the problem and establish an
improvement goal
Collect data
Analyze the problem
Generate potential solutions
Choose a solution
Implement the solution
Monitor the solution to see if it
accomplishes the goal
9-27
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
A
(Act)
P
(Plan)
(Check)
C
(Do)
D
Quality
Continuous Improvement
The Deming (PDCA) Cycle
9-28
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
Process Improvement: A systematic
approach to improving a process
9-29
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
The Process Improvement Cycle
Implement the
Improved process
Select a
process
Study/document
Seek ways to
Improve it
Design an
Improved process
Evaluate
Document
9-30
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
Process Improvement and Tools
Process improvement - a systematic
approach to improving a process
Process mapping
Analyze the process
Redesign the process
Tools
There are a number of tools that can be
used for problem solving and process
improvement
Tools aid in data collection and
interpretation, and provide the basis for
decision making

9-31
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
Basic Quality Tools
Flowcharts
Check sheets
Histograms
Pareto Charts
Scatter diagrams
Control charts
Cause-and-effect diagrams
Run charts
9-32
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
Pareto Charts
Figure 4.10
9-33
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
Checker Board Airlines
Passenger processing at gate
Late cabin cleaners
Unavailable cockpit crew
Late cabin crew
Personnel
Aircraft late to gate
Mechanical failures
Equipment
Procedures
Waiting for late passengers
Weight/balance sheet late
Poor announcement of departures
Delayed check-in procedure
Delayed
flight
departures
Materials
Late food service
Late fuel
Late baggage to aircraft
Contractor not provided
updated schedule
Figure 4.11
Weather
Air traffic delays
Other
Source: Adapted from D. Daryl Wyckoff, New Tools for Achieving Service Quality. The Cornell Hotel and Restaurant
Administration Quarterly, November 1984, pg. 89. 1984 Cornell H.R.A. Quarterly. Used by permission. All rights reserved.
9-34
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
Quality Awards
Baldrige Award
Deming Prize
9-35
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
Malcolm Baldrige National Quality Award
1.0 Leadership
2.0 Strategic Planning
3.0 Customer and Market Focus
4.0 Information and Analysis
5.0 Human Resource Development and
Management
6.0 Process Management
7.0 Business Results
Table 9-7
9-36
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
The Deming Prize
Honoring W. Edwards Deming
Japans highly coveted award
Main focus on statistical quality
control
9-37
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
Quality Certification
ISO 9000
Set of international standards on quality
management and Quality assurance, critical to
international Business
ISO 9000 series standards, briefly, require firms
to document their quality-control systems at every
step (incoming raw materials, product design, in-
process monitoring and so forth) so that theyll be
able to identify those areas that are causing
quality problems and correct them.

9-38
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
The ISO 9000 Series Standards
ISO 9000 requires companies to
document everything they do that
affects the quality of goods and
services.
Hierarchical approach to documentation
of the Quality Management System
9-39
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction to Quality
ISO 14000 - A set of international
standards for assessing a companys
environmental performance
Standards in three major areas
Management systems
Operations
Environmental systems
ISO 14000