Chapter 2

Total Quality in
Organizations
THE MANAGEMENT AND CONTROL OF QUALITY, 5e, 2002 South-Western/Thomson LearningTM

Growth of Modern
Quality Management
Performance
excellence

Service
quality

Improved
product designs
Manufacturing
quality

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, 2002 South-Western/Thomson LearningTM

Systems Thinking
A system is the functions or activities within
an organization that work together for the
aim of the organization.
Subsystems of an organization are linked
together as internal customers and
suppliers.
A systems perspective acknowledges the
importance of the interactions of
subsystems, not the actions of them
individually.
THE MANAGEMENT AND CONTROL OF QUALITY, 5e, 2002 South-Western/Thomson LearningTM

Manufacturing Systems (1 of 2)

Marketing and sales

Product design and engineering
Purchasing and receiving
Production planning and scheduling
Manufacturing and assembly
Tool engineering

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, 2002 South-Western/Thomson LearningTM

Manufacturing Systems (2 of 2)
Industrial engineering and process
design
Finished goods inspection and test
Packaging, shipping, and
warehousing
Installation and service
THE MANAGEMENT AND CONTROL OF QUALITY, 5e, 2002 South-Western/Thomson LearningTM

Quality in Business Support

Functions for Manufacturing

General management
Finance and accounting
Human resource management
Quality assurance
Legal services

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, 2002 South-Western/Thomson LearningTM

Quality in Services
Service is defined as any primary or
complementary activity that does not
directly produce a physical product
that is, the non-goods part of the
transaction between buyer (customer)
and seller (provider).

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, 2002 South-Western/Thomson LearningTM

Critical Differences between

Service and Manufacturing (1 of 2)
Customer needs and performance
standards are more difficult to identify
and measure
Services requires a higher degree of
customization
Output is intangible

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, 2002 South-Western/Thomson LearningTM

Critical Differences between Service

and Manufacturing (2 of 2)
Services are produced and consumed
simultaneously
Customers are often involved in actual
process
Services are more labor-intensive than
manufacturing
Services handle large numbers of
transactions
THE MANAGEMENT AND CONTROL OF QUALITY, 5e, 2002 South-Western/Thomson LearningTM

Components of Service
System Quality
Employees
Information technology

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The Ritz-Carlton Hotel Co.

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Quality in Health Care

Joint Commission on Accreditation of
Healthcare Organizations (JCAHO)
National Committee for Quality Assurance
(NCQA)
Institute for Healthcare Improvement (IHI)
1999 expansion of the Baldrige Award to
nonprofit health care organizations

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, 2002 South-Western/Thomson LearningTM

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Quality Issues in Health Care

Avoidable errors
Underutilization of services
Overuse of services
Variation in services

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, 2002 South-Western/Thomson LearningTM

13

Quality in Education
Koalaty Kid program
1999 expansion of the Baldrige Award
to nonprofit education organizations
Success stories
Mt. Edgecumbe High School
Brazosport ISD
Hunderton Central Regional HS
Pinellas County Schools
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14

Higher Education
as a Production System
Suppliers:
families, high
schools, colleges,
business

Design and
Redesign

Consumer
research
Customers:

Inputs:

Outputs:

students
faculty

able students
new knowledge

Teaching, counseling,
scientific research

business, families,
society, students

Processes
THE MANAGEMENT AND CONTROL OF QUALITY, 5e, 2002 South-Western/Thomson LearningTM

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Quality in the Public Sector

Quality in the Federal Government
State and Local Quality Efforts

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, 2002 South-Western/Thomson LearningTM

16

Chapter 2
Total Quality
in Organizations
THE MANAGEMENT AND CONTROL OF QUALITY, 5e, 2002 South-Western/Thomson LearningTM

17

Service Quality at the

Ritz-Carlton Hotel Company
1. What value does a focus on the Gold
Standards have for The Ritz-Carlton
Co.?
2. What must a company do to reduce job
offer processing times so dramatically?
3. How does information play a central role
in everything that The Ritz-Carlton Hotel
Co. does?
THE MANAGEMENT AND CONTROL OF QUALITY, 5e, 2002 South-Western/Thomson LearningTM

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Pinellas County Schools

1. Discuss how the practices at
Pinellas County Schools reflect
quality principles.
2. Thinking back on your own K-12
education, what things does Pinellas
County do differently?

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Shiny Hill Farms

1. Describe the scope of quality efforts in
this organization.
2. What is the role of the quality assurance
department at Shiny Hill Farms? Does it
promote the concept of total quality?
3. What suggestions do you have for
improving Shiny Hill Farms quality
effort?
THE MANAGEMENT AND CONTROL OF QUALITY, 5e, 2002 South-Western/Thomson LearningTM

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The Nightmare on Phone Street

1. Summarize the service failures
associated with this experience.
2. What might the travel agency have
done to guarantee a better service
experience for Mr. Harrington?

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