© 2008 prentice hall, inc.6 – 1 managing quality

© 2008 Prentice Hall, Inc. 6 – 1

Managing QualityManaging Quality


Quality and StrategyQuality and Strategy

Defining QualityDefining Quality Implications of QualityImplications of Quality

Cost of Quality (COQ)Cost of Quality (COQ)

Ethics and Quality ManagementEthics and Quality Management


International Quality StandardsInternational Quality Standards ISO 9000ISO 9000

ISO14000ISO14000

Think!! Think!! Why Quality StandardsWhy Quality Standards

Are Important ? Are Important ?


Total Quality ManagementTotal Quality Management Continuous ImprovementContinuous Improvement

Six SigmaSix Sigma

Employee EmpowermentEmployee Empowerment

BenchmarkingBenchmarking

Just-in-Time (JIT)Just-in-Time (JIT)

Taguchi ConceptsTaguchi Concepts

Knowledge of TQM ToolsKnowledge of TQM Tools

You should have done couple of them in prerequisite! You should have done couple of them in prerequisite!


Tools of TQMTools of TQM Check SheetsCheck Sheets

Scatter Diagrams Scatter Diagrams

Cause-and-Effect DiagramsCause-and-Effect Diagrams

Pareto ChartsPareto Charts

FlowchartsFlowcharts

HistogramsHistograms

Statistical Process Control (SPC)Statistical Process Control (SPC)

Distinguish! What falls under TQM and What are tools for TQM (last Distinguish! What falls under TQM and What are tools for TQM (last slide & this slide) – Midterm slide & this slide) – Midterm


The Role of InspectionThe Role of Inspection When and Where to InspectWhen and Where to Inspect

Source InspectionSource Inspection

Service Industry InspectionService Industry Inspection

Inspection of Attributes versus Inspection of Attributes versus VariablesVariables

TQM in ServicesTQM in Services

Is inspection important? Remember the discussion we had in class Is inspection important? Remember the discussion we had in class as you go through this slide – Midterm as you go through this slide – Midterm


Google these concepts – read around them !! Please! Link with class Discussion! Google these concepts – read around them !! Please! Link with class Discussion!

Define quality and TQMDefine quality and TQM

Describe the ISO international Describe the ISO international quality standardsquality standards

Explain how benchmarking is used Explain how benchmarking is used

Use the seven tools of TQMUse the seven tools of TQM


Quality and Strategy – Quality and Strategy – Remember the Remember the

strategy discussion we had in class – Midterm strategy discussion we had in class – Midterm

Managing quality supports Managing quality supports differentiation, low cost, and differentiation, low cost, and response strategiesresponse strategies

Quality helps firms increase sales Quality helps firms increase sales and reduce costsand reduce costs

Building a quality organization is Building a quality organization is a demanding taska demanding task


Strategic Implications Strategic Implications of TQMof TQM

• Strong leadershipStrong leadership

• Goals, vision, or missionGoals, vision, or mission

• Operational plans and policiesOperational plans and policies

• Mechanism for feedbackMechanism for feedback


Two Ways Quality Two Ways Quality Improves Profitability – Improves Profitability – Midterm Midterm

Improved Improved QualityQuality

Increased Increased ProfitsProfits

Increased productivity

Lower rework and scrap costs

Lower warranty costs

Reduced Costs via

Improved response

Flexible pricing

Improved reputation

Sales Gains via

Figure 6.1Figure 6.1


The Flow of Activities – The Flow of Activities – Midterm Midterm

Organizational PracticesLeadership, Mission statement, Effective operating procedures, Staff support, TrainingYields: What is important and what is to be

accomplished

Quality PrinciplesCustomer focus, Continuous improvement, Benchmarking, Just-in-time, Tools of TQMYields: How to do what is important and to be

accomplished

Employee FulfillmentEmpowerment, Organizational commitmentYields: Employee attitudes that can accomplish

what is importantCustomer SatisfactionWinning orders, Repeat customersYields: An effective organization with

a competitive advantage


Defining Quality – Defining Quality – You guys defined it well in class!! You guys defined it well in class!!

The totality of features and The totality of features and characteristics of a product or characteristics of a product or

service that bears on its ability to service that bears on its ability to satisfy stated or implied needssatisfy stated or implied needs

American Society for QualityAmerican Society for Quality


Different Views – Different Views – Think why conformance is important – Think why conformance is important –

link with next slide!!link with next slide!!

User-based – better performance, User-based – better performance, more featuresmore features

Manufacturing-based – Manufacturing-based – conformance to standards, conformance to standards, making it right the first timemaking it right the first time


Quality of ConformanceQuality of Conformance

Making sure a product or service is Making sure a product or service is produced according to designproduced according to design

if new tires do not conform to if new tires do not conform to specifications, they wobblespecifications, they wobble

if a hotel room is not clean when a if a hotel room is not clean when a guest checks in, the hotel is not guest checks in, the hotel is not functioning according to functioning according to specifications of its designspecifications of its design

© 2008 Prentice Hall, Inc. 6 – 153-15

Meaning of Quality:Meaning of Quality:Consumer’s Perspective – Consumer’s Perspective – We discussed in class how quality can be different for different We discussed in class how quality can be different for different

people (e.g. their needs)people (e.g. their needs)

Fitness for useFitness for use how well product or how well product or

service does what it is service does what it is supposed tosupposed to

Quality of designQuality of design designing quality designing quality

characteristics into a characteristics into a product or serviceproduct or service

A Mercedes and a Ford are A Mercedes and a Ford are equally “fit for use,” but equally “fit for use,” but with different design with different design dimensionsdimensions


Implications of Quality – Implications of Quality – You guys You guys

identified many implications during class discussion – well done identified many implications during class discussion – well done

1.1. Company reputationCompany reputation Perception of new productsPerception of new products

Employment practicesEmployment practices

Supplier relationsSupplier relations

2.2. Global implicationsGlobal implications Improved ability to competeImproved ability to compete


Key Dimensions of Quality – Key Dimensions of Quality – Can you add more to this slide – You know more Can you add more to this slide – You know more

Key Dimensions of Quality – Key Dimensions of Quality – Can you add more to this slide – You know more Can you add more to this slide – You know more

PerformancePerformance

FeaturesFeatures

ReliabilityReliability

ConformanceConformance

DurabilityDurability

ServiceabilityServiceability

AestheticsAesthetics

Perceived qualityPerceived quality

ValueValue


Dimensions of Quality:Dimensions of Quality:Manufactured ProductsManufactured Products

Performance Performance basic operating characteristics of a product; basic operating characteristics of a product;

how well a car is handled or its gas mileagehow well a car is handled or its gas mileage

Features Features ““extra” items added to basic features, such extra” items added to basic features, such

as a stereo CD or a leather interior in a caras a stereo CD or a leather interior in a car

ReliabilityReliability probability that a product will operate probability that a product will operate

properly within an expected time frame; that properly within an expected time frame; that is, a TV will work without repair for about is, a TV will work without repair for about seven yearsseven years


ConformanceConformance degree to which a product meets pre–degree to which a product meets pre–

established standardsestablished standards

DurabilityDurability how long product lasts before replacementhow long product lasts before replacement

ServiceabilityServiceability ease of getting repairs, speed of repairs, ease of getting repairs, speed of repairs,

courtesy and competence of repair personcourtesy and competence of repair person

Dimensions of Quality:Dimensions of Quality:Manufactured Products Manufactured Products

(cont.)(cont.)


AestheticsAesthetics how a product looks, feels, sounds, smells, how a product looks, feels, sounds, smells,

or tastesor tastes

Safety Safety assurance that customer will not suffer assurance that customer will not suffer

injury or harm from a product; an especially injury or harm from a product; an especially important consideration for automobilesimportant consideration for automobiles

PerceptionsPerceptions subjective perceptions based on brand subjective perceptions based on brand

name, advertising, and the likename, advertising, and the like

Dimensions of Quality:Dimensions of Quality:Manufactured Products Manufactured Products

(cont.)(cont.)


Cost of QualityCost of Quality• Cost of Achieving Good QualityCost of Achieving Good Quality

– Prevention costsPrevention costs

• costs incurred during product designcosts incurred during product design

– Appraisal costsAppraisal costs

• costs of measuring, testing, and costs of measuring, testing, and analyzinganalyzing

• Cost of Poor QualityCost of Poor Quality

– Internal failure costsInternal failure costs

• include scrap, rework, process failure, include scrap, rework, process failure, downtime, and price reductionsdowntime, and price reductions

– External failure costsExternal failure costs

• include complaints, returns, warranty include complaints, returns, warranty claims, liability, and lost salesclaims, liability, and lost sales


Prevention CostsPrevention Costs

• Quality planning costsQuality planning costs– costs of developing and costs of developing and

implementing quality implementing quality management programmanagement program

• Product-design costsProduct-design costs– costs of designing costs of designing

products with quality products with quality characteristicscharacteristics

• Process costsProcess costs– costs expended to costs expended to

make sure productive make sure productive process conforms to process conforms to quality specificationsquality specifications

• Training costsTraining costs– costs of developing costs of developing

and putting on quality and putting on quality training programs for training programs for employees and employees and managementmanagement

• Information costsInformation costs– costs of acquiring and costs of acquiring and

maintaining data maintaining data related to quality, and related to quality, and development of reports development of reports on quality performanceon quality performance


Appraisal CostsAppraisal Costs• Inspection and testingInspection and testing

– costs of testing and inspecting materials, costs of testing and inspecting materials, parts, and product at various stages and parts, and product at various stages and at the end of a processat the end of a process

• Test equipment costsTest equipment costs

– costs of maintaining equipment used in costs of maintaining equipment used in testing quality characteristics of productstesting quality characteristics of products

• Operator costsOperator costs

– costs of time spent by operators to gather costs of time spent by operators to gather data for testing product quality, to make data for testing product quality, to make equipment adjustments to maintain equipment adjustments to maintain quality, and to stop work to assess qualityquality, and to stop work to assess quality


Internal Failure CostsInternal Failure Costs• Scrap costsScrap costs

– costs of poor-quality costs of poor-quality products that must be products that must be discarded, including discarded, including labor, material, and labor, material, and indirect costsindirect costs

• Rework costsRework costs– costs of fixing defective costs of fixing defective

products to conform to products to conform to quality specificationsquality specifications

• Process failure costsProcess failure costs– costs of determining why costs of determining why

production process is production process is producing poor-quality producing poor-quality productsproducts

• Process downtime Process downtime costscosts– costs of shutting down costs of shutting down

productive process to productive process to fix problemfix problem

• Price-downgrading Price-downgrading costscosts– costs of discounting costs of discounting

poor-quality productspoor-quality products—that is, selling —that is, selling products as “seconds”products as “seconds”


External Failure CostsExternal Failure Costs• Customer complaint costsCustomer complaint costs

– costs of investigating and costs of investigating and satisfactorily responding to satisfactorily responding to a customer complaint a customer complaint resulting from a poor-quality resulting from a poor-quality productproduct

• Product return costsProduct return costs– costs of handling and costs of handling and

replacing poor-quality replacing poor-quality products returned by products returned by customercustomer

• Warranty claims costsWarranty claims costs– costs of complying with costs of complying with

product warrantiesproduct warranties

• Product liability Product liability costscosts– litigation costs litigation costs

resulting from resulting from product liability and product liability and customer injurycustomer injury

• Lost sales costsLost sales costs– costs incurred costs incurred

because customers because customers are dissatisfied with are dissatisfied with poor quality poor quality products and do not products and do not make additional make additional purchasespurchases


Hidden costs of poor Hidden costs of poor QualityQuality


Costs of Poor Costs of Poor Process PerformanceProcess Performance

• DefectsDefects: Any instance when a process fails to : Any instance when a process fails to satisfy its customer.satisfy its customer.

• Prevention costsPrevention costs are associated with preventing are associated with preventing defects before they happen.defects before they happen.

• Appraisal costsAppraisal costs are incurred when the firm are incurred when the firm assesses the performance level of its processes.assesses the performance level of its processes.

• Internal failureInternal failure costscosts result from defects that are result from defects that are discovered during production of services or discovered during production of services or products.products.

• External failureExternal failure costscosts arise when a defect is arise when a defect is discovered after the customer receives the discovered after the customer receives the service or product.service or product.


How can we Improve a How can we Improve a Process? Process?

• Reduce errorsReduce errors

• Meet or exceed expectations of Meet or exceed expectations of internal/external customersinternal/external customers

• Make the process saferMake the process safer

• Make the process more satisfying to Make the process more satisfying to the person doing it.the person doing it.


Leaders in Quality Leaders in Quality

W. Edwards DemingW. Edwards Deming 14 Points for 14 Points for ManagementManagement

Joseph M. JuranJoseph M. Juran Top management Top management commitment, commitment, fitness for usefitness for use

Armand FeigenbaumArmand Feigenbaum Total Quality Total Quality ControlControl

Philip B. CrosbyPhilip B. Crosby Quality is Free Quality is Free (Why (Why

he said that)he said that), , zero zero defectsdefects


Ethics and Quality Ethics and Quality ManagementManagement

Managers must deliver healthy, safe, Managers must deliver healthy, safe, quality products and servicesquality products and services

Poor quality risks injuries, lawsuits, Poor quality risks injuries, lawsuits, recalls, and regulationrecalls, and regulation

Organizations are judged by how Organizations are judged by how they respond to problemsthey respond to problems


TQMTQM

Encompasses entire organization, Encompasses entire organization, from supplier to customerfrom supplier to customer

Stresses a commitment by Stresses a commitment by management to have a continuing, management to have a continuing,

companywide drive toward companywide drive toward excellence in all aspects of products excellence in all aspects of products

and services that are important to and services that are important to the customerthe customer


Seven Concepts of TQMSeven Concepts of TQM

Continuous improvementContinuous improvement

Six SigmaSix Sigma

Employee empowermentEmployee empowerment


Just-in-time (JIT)Just-in-time (JIT)

Taguchi conceptsTaguchi concepts

Knowledge of TQM toolsKnowledge of TQM tools


Continuous ImprovementContinuous Improvement

Represents continual Represents continual improvement of all processes improvement of all processes

Involves all operations and work Involves all operations and work centers including suppliers and centers including suppliers and customerscustomersPeople, Equipment, Materials, People, Equipment, Materials,

ProceduresProcedures


Employee EmpowermentEmployee Empowerment

Getting employees involved in product Getting employees involved in product and process improvementsand process improvements 85% of quality problems are due 85% of quality problems are due

to process and materialto process and material TechniquesTechniques

Build communication networks Build communication networks that include employeesthat include employees

Develop open, supportive supervisorsDevelop open, supportive supervisors Move responsibility to employeesMove responsibility to employees Build a high-morale organizationBuild a high-morale organization Create formal team structuresCreate formal team structures



Selecting best practices to use as a Selecting best practices to use as a standard for performancestandard for performance

Determine what to Determine what to benchmarkbenchmark

Collect and analyze benchmarking Collect and analyze benchmarking informationinformation

Take action to match or exceed the Take action to match or exceed the benchmarkbenchmark


Is Resolving Customer Is Resolving Customer Complaints Important ? Complaints Important ?

Some best practices! Some best practices! (Can you think of any other (Can you think of any other ?) ?)

Make it easy for clients to complainMake it easy for clients to complain

Respond quickly to complaintsRespond quickly to complaints

Resolve complaints on first contactResolve complaints on first contact

Use computers to manage Use computers to manage complaintscomplaints

Recruit the best for customer Recruit the best for customer service jobsservice jobs



Relationship to quality?Relationship to quality?



Allows reduced inventory levelsAllows reduced inventory levels Inventory costs money and hides process Inventory costs money and hides process

and material problemsand material problems

Encourages improved process and Encourages improved process and product qualityproduct quality


Tools of TQM – Tools of TQM – Midterm Midterm

Tools for Generating IdeasTools for Generating IdeasCheck sheetsCheck sheetsScatter diagramsScatter diagramsCause-and-effect diagramsCause-and-effect diagrams

Tools to Organize the DataTools to Organize the DataPareto chartsPareto chartsFlowchartsFlowcharts

Tools for Identifying ProblemsTools for Identifying ProblemsHistogramHistogramStatistical process control chartStatistical process control chart


Statistical Process Control Statistical Process Control (SPC) (SPC) (Midterm (Midterm ))

Uses statistics and control charts to Uses statistics and control charts to tell when to take corrective actiontell when to take corrective action

Drives process improvementDrives process improvement


An SPC ChartAn SPC Chart

Upper control limitUpper control limit

Coach’s target valueCoach’s target value

Lower control limitLower control limit

Game numberGame number

| | | | | | | | |

11 22 33 44 55 66 77 88 99

20%20%

10%10%

0%0%

Plots the percent of free throws missedPlots the percent of free throws missed

Figure 6.8Figure 6.8


InspectionInspection

Involves examining items to see if Involves examining items to see if an item is good or defectivean item is good or defective

Detect a defective productDetect a defective product Does not correct deficiencies in Does not correct deficiencies in

process or productprocess or product It is expensiveIt is expensive

IssuesIssues When to inspectWhen to inspect Where in process to inspectWhere in process to inspect


When and Where to InspectWhen and Where to Inspect

1.1. At the supplier’s plant while the supplier is At the supplier’s plant while the supplier is producingproducing

2.2. At your facility upon receipt of goods from At your facility upon receipt of goods from the supplierthe supplier

3.3. Before costly or irreversible processesBefore costly or irreversible processes

4.4. During the step-by-step production During the step-by-step production processprocess

5.5. When production or service is completeWhen production or service is complete

6.6. Before delivery to your customerBefore delivery to your customer

7.7. At the point of customer contactAt the point of customer contact


Source Inspection Source Inspection (You guys made good comments here! )(You guys made good comments here! )

Also known as source controlAlso known as source control

The next step in the process is The next step in the process is your customeryour customer

Ensure perfect product Ensure perfect product to your customerto your customer



OrganizationOrganization What is What is InspectedInspected StandardStandard

Hotel Hotel Reception Reception deskdesk

DoormanDoorman

RoomRoom

MinibarMinibar

Use customer’s nameUse customer’s name

Greet guest in less than 30 Greet guest in less than 30 secondsseconds

All lights working, spotless All lights working, spotless bathroombathroom

Restocked and charges Restocked and charges accurately posted to billaccurately posted to bill

Table 6.5Table 6.5




HospitalHospital BillingBilling

PharmacyPharmacy

LabLab

NursesNurses

AdmissionsAdmissions

Accurate, timely, and Accurate, timely, and correct formatcorrect format

Prescription accuracy, Prescription accuracy, inventory accuracyinventory accuracy

Audit for lab-test accuracyAudit for lab-test accuracy

Charts immediately Charts immediately updatedupdated

Data entered correctly and Data entered correctly and completelycompletely

Table 6.5Table 6.5




Restaurant Restaurant (Add More (Add More under what is inspected & under what is inspected & standard standard ))

WaiterWaiter Knows and suggest Knows and suggest specials, dessertsspecials, desserts

Table 6.5Table 6.5




Department Department StoreStore

Display areasDisplay areas

StockroomsStockrooms

SalesclerksSalesclerks

Attractive, well-organized, Attractive, well-organized, stocked, good lightingstocked, good lighting

Rotation of goods, Rotation of goods, organized, cleanorganized, clean

Neat, courteous, very Neat, courteous, very knowledgeableknowledgeable

Table 6.5Table 6.5


ServiceServiceSpecificationsSpecifications

at UPSat UPS

© 2008 Prentice Hall, Inc. 6 – 51© 2011 Pearson Education, Inc. publishing as Prentice Hall

Determinants of Service Determinants of Service QualityQuality

Reliability Consistency of performance and dependability

Responsiveness Willingness or readiness of employees

Competence Required skills and knowledge

Access Approachability and ease of contact

Courtesy Politeness, respect, consideration, friendliness

Communication Keeping customers informed

Credibility Trustworthiness, believability, honesty

Security Freedom from danger, risk, or doubt

Understanding/ knowing the customer Understand the customer’s needs

Tangibles Physical evidence of the service

Table 6.5


Long Waiting Times May Indicate Need Long Waiting Times May Indicate Need for Service Process Redesign for Service Process Redesign (Think – what you can do to (Think – what you can do to

redesign following process?)redesign following process?)


Service Recovery Strategy – Service Recovery Strategy – (Think - why recovery strategy is important? What is its relationship with Productivity & Quality?)(Think - why recovery strategy is important? What is its relationship with Productivity & Quality?)

Managers should have a plan for Managers should have a plan for when services failwhen services fail

Marriott’s LEARN routineMarriott’s LEARN routine ListenListen

EmpathizeEmpathize

ApologizeApologize

ReactReact

NotifyNotify


Questions - When Developing Strategies Questions - When Developing Strategies to Improve Service Productivityto Improve Service Productivity

How to transform inputs into outputs efficiently? Will improving productivity hurt quality? Will improving quality hurt productivity?Add other question from 1st week’s discussion


You guys start great debate there!! Quanity vs Quality & linking it You guys start great debate there!! Quanity vs Quality & linking it with market dynamics! Well done with market dynamics! Well done


Managing for Productivity Managing for Productivity

WHAT IS PRODUCTIVITY?WHAT IS PRODUCTIVITY?

•ProductivityProductivity is defined as outputs divided by is defined as outputs divided by inputsinputs

where: where: outputsoutputs are the goods and services are the goods and services produced, and produced, and inputsinputs are labor, capital, are labor, capital, materials, and energymaterials, and energy

•Productivity is important because it determines Productivity is important because it determines whether a company will make a profit and whether a company will make a profit and affects a country’s standard of livingaffects a country’s standard of living

•Maintaining productivity depends on Maintaining productivity depends on controlcontrol


Managing for ProductivityManaging for Productivity

Managing for Productivity and ResultsManaging for Productivity and Results


Control: When Managers Control: When Managers Monitor Performance – Monitor Performance – Midterm Midterm

WHY IS CONTROL IMPORTANT?WHY IS CONTROL IMPORTANT?

•Control Control is making something happen the way it was is making something happen the way it was planned to happen, while planned to happen, while controlling controlling is monitoring is monitoring performance, comparing it with goals, and taking performance, comparing it with goals, and taking corrective action as needed corrective action as needed

•RecallRecall that: that:

•--planningplanning is setting goals and deciding how to achieve is setting goals and deciding how to achieve themthem

•--organizingorganizing is arranging tasks, people, and other is arranging tasks, people, and other resources to accomplish the workresources to accomplish the work

•--leadingleading is motivating people to work hard to achieve is motivating people to work hard to achieve the organization’s goalsthe organization’s goals

•--controllingcontrolling is making sure performance meets is making sure performance meets objectivesobjectives


Why Control is Needed ? Why Control is Needed ? (This is some explanation continued (This is some explanation continued

from our first interaction)from our first interaction)

•There are There are six reasons six reasons why control is needed:why control is needed:

1.1. To adapt to change & uncertaintyTo adapt to change & uncertainty - - organizations need to be able to deal with organizations need to be able to deal with change and uncertainty in the environmentchange and uncertainty in the environment

2. To discover irregularities and errors2. To discover irregularities and errors - - without checks and balances, companies without checks and balances, companies might not survivemight not survive

3. To reduce costs, increase productivity, or 3. To reduce costs, increase productivity, or add valueadd value - control systems can reduce costs, - control systems can reduce costs, increase output, and add value to a productincrease output, and add value to a product


4. To detect opportunities4. To detect opportunities - controls can help - controls can help firms identify opportunities that might firms identify opportunities that might otherwise go unnoticedotherwise go unnoticed

5. To deal with complexity5. To deal with complexity - controls help - controls help firms deal with the complexities of multiple firms deal with the complexities of multiple product lines, customer bases, and so onproduct lines, customer bases, and so on

6. To decentralize decision making & facilitate 6. To decentralize decision making & facilitate teamworkteamwork - controls allow top managers to - controls allow top managers to decentralize control to lower levels and decentralize control to lower levels and encourage teamworkencourage teamwork

Now think why these six pointers are important & how they can help in improving productivity/quality!! E.g. #1 is Now think why these six pointers are important & how they can help in improving productivity/quality!! E.g. #1 is about managing change! Why is that important? about managing change! Why is that important?

Tip: We said in first class that markets are dynamic (change in constant)! Tip: We said in first class that markets are dynamic (change in constant)!

Think about all pointers, please! Think about all pointers, please!


Four steps in the Four steps in the control processcontrol process: : Set standard, Set standard,

measure performance, compare them, measure performance, compare them, if performance greater than standard or maybe upgrade your standard! if performance greater than standard or maybe upgrade your standard!

1. Establish Standards1. Establish Standards

•The desired performance level for a given The desired performance level for a given goal is a goal is a control standardcontrol standard, or , or performance performance standardstandard

•Standards can be broad or narrow Standards can be broad or narrow

2. Measure Performance2. Measure Performance

•Performance is measured using three Performance is measured using three sources: written reports, oral reports, and sources: written reports, oral reports, and personal observationpersonal observation


3. Compare Performance To Standards3. Compare Performance To Standards

•Measured performance is compared to established Measured performance is compared to established standardsstandards

•The amount of deviation acceptable depends on The amount of deviation acceptable depends on the predetermined range of variationthe predetermined range of variation

•Some firms follow Some firms follow management by exceptionmanagement by exception where managers are informed of a situation only if where managers are informed of a situation only if data show a significant deviation from standards data show a significant deviation from standards

4. Take Corrective Action, If Necessary4. Take Corrective Action, If Necessary

•Firms can make no changes to the current Firms can make no changes to the current situation, recognize and reinforce positive situation, recognize and reinforce positive performance, or take action to correct negative performance, or take action to correct negative performanceperformance


Steps in the Control ProcessSteps in the Control Process


Quality and Productivity Quality and Productivity helps you in achieving market gains & cost savings! What else helps you in achieving market gains & cost savings! What else

Improved:•Performance•Reliability•Features•etc.

Improved reputation for quality

Increased Market share

Higher PricesIncreased Profits

I. Market Gains


Quality and ProductivityQuality and Productivity

Improved reliability or conformance

Increasedproductivity Lower

manufacturing costs

Lower service costs

Lower warranty and product liability costs

Increased Profits

II. Cost Savings

Lower rework and scrap costs


Not just Quality but Manage Total Quality (TQM)Not just Quality but Manage Total Quality (TQM)I hope we got fair overview of Productivity & Quality ManagementI hope we got fair overview of Productivity & Quality Management

PleasePlease read around the concepts read around the concepts

© 2008 prentice hall, inc.6 – 1 managing quality

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