Management Aspects of

Quality

Assoc. Prof. Ir. Dr. Cheong Kuan Yew

School of Materials & Mineral Resources
Engineering
Engineering Campus
Universiti Sains Malaysia

1
 Topic Outline
Quality Management System (QMS)


 Quality Planning
 Quality Assurance
 Quality Control & Improvement
Quality Models & Theories


 Quality Philosophies
 Quality Management Strategies
 Quality System & Standards
 Quality Performance Measurement
Legal Implication of Quality


2
 Topic Outcomes
 At the end of this lecture, students will be
able to:
1. Discuss the functions of quality planning,
quality assurance, and quality control &
improvement.
2. Describe and discuss some important quality
management models & theories.
3. Explain the relationship between quality and
cost.
3 4.
 Topic Outline
Quality Management System (QMS)


 Quality Planning
 Quality Assurance
 Quality Control & Improvement
Quality Models & Theories


 Quality Philosophies
 Quality Management Strategies
 Quality System & Standards
 Quality Performance Measurement
Legal Implication of Quality


4
 [A] Quality Management System
(QMS)
Knowledge Management
Integrates the Organization

D. Okes, “Corral your

organization’s knowledge” Quality
Progress, Oct 2005, p29.
5
 Effective QMS – 3 activities
Quality
Management Aspect

Quality Quality QC &

Planning Assurance Improve
(QA) ment

6
7
 (a) Quality Planning
Strategic activity  Strategic plan
Product development plan; financial

plan; marketing plan.

Purpose: In line with business goal

 Minimize wastage (time, money, effort)



8
 Activities involving a Quality Plan

8-D of Quality

Quality Improvement of the Products

9
 (b) Quality Assurance (QA)
The set of activities that ensures the quality
levels of products and services are
properly maintained and that supplier and
customer quality issues are properly
resolved.
Important QA function:
 Development, maintenance and control of
documentation.
 Tracking
 Customer complaints / corrective actions /
10
product recall
 i] Policy


 what is to be done & why

ii] Procedures


 methods & personnel that will implement

policy
iii] Work Instructions & Specifications


 product-, department oriented

iv] Records


 a way of documenting the policies,

procedures, and work instructions that
11 have been followed.
 (c) Quality Control &
Improvement
 The set of activities used to ensure that the
products and services meet requirements
and are improved on a continuous
basis.
  variability  statistical techniques.
 Quality improvement  Project-by-Project
basis  significant business impact  link
to overall business goal.


12
 How to do
that?
You need some tools to
help you.

13
Quality Management
Tools

(1)7 Classic QC Tools (problem solving

tools)
(2)7 New QC Tools (basic management
and planning tools)
(3)Process improvement tools
(4)Innovation and creativity tools
(creative decision making and
problem solving)
14
(5)Problem solving tools
  (1) 7 Classic QC Tools (problem solving
tools):
 Pareto Diagrams
 Cause & Effect Diagrams
 Graphs
 Histograms
 Scatter Diagrams
15
 Control Charts
  (2) 7 New QC Tools (basic
management and planning tools):
 Relation Diagrams*
 Affinity Diagrams*
 System Diagrams*
 Matrix Diagrams*
 PDPC Method*
 Arrow Diagrams*
16
 ????
  (3) Process improvement
tools:
 Root-cause analysis

 PDCA

 Six Sigma DMAIC model*

 Failure mode and effects

analysis (FMEA)*
 SPC

17
  (4) Innovation and creativity
tools (creative decision making and problem
solving):
 Brainstorming*
 Mind mapping*
 Lateral thinking*
 Critical thinking*
 Design for Six Sigma (DFSS)*

18
 Why Should Firms Focus on
Innovations?
To meet market demand
Globalization
Reduce product cost
Making incremental process
improvement

19
New added value to product
  (5) Problem Solving Tools
 List down techniques of problem
solving.
 Group Assignment.
 (6) Cost of quality


20
 Topic Outline
Quality Management System (QMS)


 Quality Planning
 Quality Assurance
 Quality Control & Improvement
Quality Models & Theories


 Quality Philosophies
 Quality Management Strategies
 Quality System & Standards
 Quality Performance Measurement
Legal Implication of Quality


21
 [B] Quality Models and
Theories

Quality philosophies

•Quality Planning
•QA
Quality Management

•QC &
Strategies Improvement

Quality system &



standards


22
 Quality
Philosophy
2 Quality


Philosophies
 Mindset-based
 Quality awareness.
 Zero defect

 Mindset
23
 Leaders (gurus) in the Quality


Revolution
 W. Edwards Deming

 Joseph.M. Juran

 Armand.V. Feigenbaum

 Philip B. Crosby

 Kaoru Ishikawa

24  Genichi Taguchi
 The Deming’s Philosophy:
An important framework for implementing
quality improvement (Deming Chain
Reaction)
Deming’s System of profound knowledge

14 points for senior management

25
 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

26
 Key Idea
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.
27
 Deming’s System of Profound
Knowledge

Appreciation for a system

Understanding variation

Theory of knowledge

Psychology

28
 Systems
Most organizational
processes are cross-
functional
Parts of a system must

work together
Every system must have a

purpose
29 Management must
 Key Idea (system)

The aim of any system should be for all

stakeholders—stockholders,
employees, customers, community, and
the environment—to benefit over the
long term.

30
 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

31 variation to help understand it
 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

32 for prediction
 Psychology
 People are motivated
intrinsically and extrinsically;
intrinsic motivation is the most
powerful
 Fear is demotivating
 Managers should develop pride
and joy in work
33
  Juran quality management
philosophy (Juran Trilogy) focus
on:
 Quality Planning (identify
customers and determining
needs)
 Quality Control (meet
requirements)
 Quality Improvement (achieve
performance and quality levels
higher than current levels;
34
project-by-project
www.juran.com basis)
 The Juran Trilogy Diagram

35
 Key Idea
Juran proposed a simple
definition of quality:
“fitness for use.”

36
 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;
satisfaction
(2) freedom from product deficiencies, which
avoids customer dissatisfaction.”
dissatisfaction

37
 Phillip B. Crosby

Quality is free . . .
“Quality is free. It’s not a gift, but it is
free. What costs money are the un-quality
things -- all the actions that involve not
doing jobs right the first time.”

38
 Absolutes of Quality Management:
Qualitymeans conformance to
requirements
Problems are functional in nature
There is no optimum level of defects
Costof quality is the only useful
measurement
Zero defects is the only performance
standard
39 www.philipcrosby.com
 Armand V. Feigenbaum


 First introduced the concept of company-

wide quality control in his historic book
– Total Quality Control (1951).
 Influenced much of early philosophy of
Japanese quality management (1950s)
– “total quality control” to describe
their efforts.
 3 steps approaches to improve quality:
 Quality leadership – strong focus on

planning
40  Quality technology – involve entire
 19 steps to improve process (step 17th :
statistical methods)
Technical capability be concentrated in

a specialized department (contrast to

the modern views – widespread of
knowledge)
A lot of management commitment.

41
 Common points of the Quality


Management pioneers:
 The importance of quality as an
essential competitive
weapon.
 The important role that
management must play in
implementing quality
improvement
42
 The importance of statistical
 Areas responsible for quality



Customer

Product
Service Marketing

Packaging & Quality Design

Storage Product Engineering

Inspection &
test Procurement

Process
Production
Design

D.H. Besterfield, Quality Control, 7th Edn, Prentice Hall, New York, 2004, p6.
43
 Topic Outline
Quality Management System (QMS)


 Quality Planning
 Quality Assurance
 Quality Control & Improvement
Quality Models & Theories


 Quality Philosophies
 Quality Management Strategies
 Quality System & Standards
 Quality Performance Measurement
Legal Implication of Quality


44
 Management
Strategies
(1) Total Quality Management (TQM)
A strategy for implementing and managing
quality improvement activities on an
organization-wide basis.
Early 1980s
Deming & Juran philosophies as the focal
point.
Broader spectrum
Only had moderate success for a variety of

45
reasons.
 By changing the actions of
management will the culture and
actions of an entire organization be
transformed (culture change).
Common sense & awareness of the

importance of quality.
TQM  the art of managing the whole

to achieve excellence.
 Total  Made up of the whole
 Quality  degree of excellence a
product provides
46
 Management  Act, art, or manner of
TQM:


 A philosophy and a set of guiding principles

that represent the foundation of a

continuously improving organization.
 An integration of fundamental
management techniques, existing
improvement efforts, and technical tools
under a disciplined approach.
 Requires 6 basic concepts:

 1. A committed and involved management to

provide long-term top-to-bottom
organizational support.
47

  3. Effective involvement and
utilization of the entire work force.
 4. Continuous improvement of the
business and production processes.
 5. Treating suppliers as partners.
 6. Establishing performance measures
for the processes.
These concepts outline an excellent


way to run a business.



48
  Scope of Total
Quality
Practices

Co


n
us

tin
oc

uo L
F

us ear
&
er

Im nin
om

pr g
PRINCIPLES
st

ov
Cu

em
en
t
Participation & Teamwork

Infrastructure Tools & Techniques

49
50
 (2) Six-Sigma Concept
Motorola (1989)
Popularized by the success of
General Electric
2 purposes:
Served as an objective
A focal point for process/product
improvement.
To reduce variability in key product
quality characteristics to the level
51
at which failure or defects are
extremely unlikely.
 3-sigma vs 6-sigma quality performance:


52
 3-sigma:
1 component: 0.9973 (good)
100 components: (0.9973)100 =
0.7631 (good)
6-sigma:
2 parts per billion nonconforming
0.9999998 (0.002 ppm)
Process not stable (mean and
sigma is not constant) process
performance cannot predicate.
Shift of process mean
53

54
55
 So, 6-Sigma can be seen as:
 A vision

 A philosophy

 A symbol

 A metric

 A goal

 A methodology

It is not:

 A cure for all ills

 A guarantee of success

 Just for manufacturing

 A simple tool
56
 Key Idea
Six Sigma can be described as a
business improvement approach that
seeks to find and eliminate causes of
defects and errors in manufacturing
and service processes by focusing
on outputs that are critical to
customers and a clear financial
57
return for the organization.
 Key Concepts of Six
Sigma
Think in terms of key business
processes, customer requirements,
and overall strategic objectives.
Focus on corporate sponsors
responsible for championing projects,
support team activities, help to
overcome resistance to change, and
obtaining resources.
Emphasize such quantifiable
58
measures as defects per million
 Ensure that appropriate metrics are
identified early and focus on
business results, thereby providing
incentives and accountability.
Provide extensive training followed
by project team deployment
Create highly qualified process
improvement experts (“green
belts,” “black belts,” and “master
black belts”) who can apply
59
improvement tools and lead teams.
Six Sigma Process
Improvement Methodology
DMAIC – use to improve an existing
business process.
DMADV – create new product design
or process design in such a way that
it results in a more predictable,
mature, and defect free
performance.
60
 Topic Outline
Quality Management System (QMS)


 Quality Planning
 Quality Assurance
 Quality Control & Improvement
Quality Models & Theories


 Quality Philosophies
 Quality Management Strategies
 Quality System & Standards
 Quality Performance Measurement
Legal Implication of Quality


61
 Quality Systems &
Standards
ISO 9000 series
Other third-party standards & industry-

specify standards:
 AS 9100 (aerospace industry)
 ISO/TS 16949 (automotive industry)
 QS 9000 (automotive industry)
 TL 9000 (telecommunication industry)


Check-list based Quality Phil.

62
 ISO 9000:2000

Quality system standards adopted

by International Organization for
Standardization in 1987; revised
in 1994 and 2000
Technical specifications and
criteria to be used as rules,
guidelines, or definitions of
characteristics to ensure that
materials, products, processes,
63
and services are fit for their
 Key Idea
ISO 9000 defines quality system
standards, based on the premise that
certain generic characteristics of
management practices can be
standardized, and that a well-designed,
well-implemented, and carefully managed
quality system provides confidence that
the out-puts will meet customer
expectations and requirements.

64
 Objectives of ISO
Standards
Achieve, maintain, and continuously
improve product quality
Improve quality of operations to continually
meet customers’ and stakeholders’ needs
Provide confidence to internal management
and other employees that quality
requirements are being fulfilled
Provide confidence to customers and other
stakeholders that quality requirements are
being achieved
Provide confidence that quality system
65 requirements are fulfilled
 Structure of ISO
9000:2000 Standards

21 elements organized into four

major sections:
Management Responsibility
Resource Management
Product Realization
Measurement, Analysis, and
improvement
66
 ISO 9000:2000
Quality Management
Principles
Customer Focus
Leadership
Involvement of People
Process Approach
System Approach to Management
Continual Improvement
Factual Approach to Decision Making
Mutually Beneficial Supplier Relationships

67
 ISO 9000 provides a set of
good basic practices for
initiating a quality system,
system
and is an excellent starting
point for companies with no
formal quality assurance
program.

68
 Documentation
 Document Structure
Quality Manual

Standard Operating
Procedure (SOP)
Work Instruction

Standards

Quality Plan

Quality Records
69
 Quality Manual
 Quality system manual for assurance of products
quality
 It must address the elements/requirements listed in
the ISO 9001: 2000 (Clauses 4 to 8).


70
 Standard Operating
Procedure (SOP)
Detail rules indicated in Quality Manual.


Document describes procedures, responsibilities,



control items, etc.

Examples:


 Management review
 Training
 SPC
 Internal Audit


71
 Work Instruction
 Particular job or task in detail and is referred to SOP.

Standards
•Documents describing established technical
specification, indications, and conditions
•ISO, JIS, MS, BS, etc.

Quality Plans
•Established plans for products manufacturing and
quality control
72
 Quality Records
•Documents containing recorded control data pertaining
to the rules required in SOP.

73
 More Information:
Notes on ISO 9000 Series

74
 Topic Outline
Quality Management System (QMS)


 Quality Planning
 Quality Assurance
 Quality Control & Improvement
Quality Models & Theories


 Quality Philosophies
 Quality Management Strategies
 Quality System & Standards
 Quality Performance Measurement
Legal Implication of Quality


75
 Quality Performance Measurement
 (1) The Malcolm Baldrige National Quality
Award (MBNQA)
 (2) Deming Prize
 (3) National Quality Awards
 Prime Minister Quality Award (PMQA),
Malaysia
 Quality Management Excellence Award
(QMEA)
76  Productivity Award (PA).
 Key Idea - MBNQA
The Baldrige criteria define both an
integrated infrastructure and a set
of fundamental practices for a
high-performance management
system.

77
 Approaches that organizations
use to address the Baldrige
criteria requirements need not
be formal or complex,
complex and
can easily be implemented by
small businesses.

78
 (2) Deming Prize
nInstituted1951 by Union of Japanese
Scientists and Engineers (JUSE)
nSeveral categories including prizes for
individuals, factories, small companies, and
Deming application prize
nAmerican company winners include Florida
Power & Light and AT&T Power Systems
Division

79
 (3) Prime Minister Quality
Award (PMQA), Malaysia
Private Sector
First introduced on 9 November
1990.
An annual national quality award
is given to organizations in
private sector in recognition for
their excellent achievement in
quality management
80
A proof of Organizational
 Objectives


 Promote Quality Awareness among

various organizations in the
private sector category.
 Promote the adoption of Quality
values in organizations.
 Encourage healthy competition
among organizations towards
continuous improvement of quality.
 Encourage Information Sharing on
81
successful performance strategies
  Who Can Participate?


Any organization registered

under the Malaysian Companies
Act 1965 is eligible to participate.


82
  Criteria
Participating organizations will be
judged / evaluated against the
following criteria:


 Top Management Leadership and

Management of Quality
 Use of Quality Data and Information
 Human Resource Management
 Customer Focus
 Quality Assurance of External
Suppliers
 Process Management
83
 Quality and Operational / Business
Results
 Process Flow

84
  The Award Recipient's
Responsibilities and
Contributions

The Award recipient is required to

share information of its successful
performance and quality strategies
with other Malaysian organizations.
However, the recipient is not required
to share proprietary information even
if such information is part of the
award application.
85
 Incentives


The recipient of the Award will

receive and enjoy the following
benefits:
 The Prime Minister Quality Award
(PMQA) Trophy.
 Cash prize of RM 30,000 (Ringgit
Malaysia: Thirty Thousand only).
 Certificate of Appreciation
86
 Eligible to use the Q Symbol for publicity
purposes for three years from the date
 Qualification Rules


Qualification Rules to apply this

award are:
 All companies registered under
Companies Act, Malaysia 1965.
 Completed Participation Form with
company's official stamp.
 Audited Financial Statement for the
previous year has to be attached.
 An organization awarded with PMQA is
not entitled to be nominated for the
duration of three years, starting from
87
the year of receiving the award.
 (4) Cost of Quality
Quality & Profitability
Improve quality Improve quality
of design of conformance

Higher Higher prices

perceived value
Lower
Increased Increased manufacturing
market share revenues and service
costs

Higher
profitability

88
  It’s a term that’s widely used – and
widely misunderstood.
 The “cost of quality” isn’t the price
of creating a quality product or
service. It’s the cost of NOT
creating a quality product or
service.
 Cost of Poor Quality
 Part of financial controls
89
(comparison of actual and
budgeted costs).
 Every time work is redone, the cost of


quality increases. Obvious examples

include:
 The reworking of a manufactured item.

 The retesting of an assembly.

 The rebuilding of a tool.

 The correction of a bank statement.

 The reworking of a service, such as the

reprocessing of a loan operation or the

replacement of a food order in a
restaurant.
90
In short, any cost that would not have been

 Why the cost of quality should be


considered:
 The increase in the cost of quality
(complexity of manufactured product
increased).
 Increasing awareness of life cycle costs
(maintenance, spare parts, etc.)
 Quality engineers and managers can
most effectively communicate quality
issues in a way that management
91
understands.

 4 categories of quality cost


(Total Quality Cost):

 Prevention Costs
 Appraisal Costs
 Internal Failure Costs
 External Failure Costs

92
 Prevention Costs
The costs of all activities specifically designed to
prevent poor quality in products or services.

Examples are the costs of:

Ø New product review
Ø Quality planning
Ø Supplier capability surveys
Ø Process capability evaluations
Ø Quality improvement team meetings
Ø Quality improvement projects
Ø Quality education and training

93
 Appraisal Costs
The costs associated with measuring, evaluating or auditing
products or services to assure conformance to quality
standards and performance requirements.

These include the costs of:

•Incoming and source inspection/test of purchased
material
•In-process and final inspection/test
•Product, process or service audits
•Calibration of measuring and test equipment
•Associated supplies and materials
94
 Failure Costs
The costs resulting from products or services not conforming to
requirements or customer/user needs.

Failure costs are divided into (a) internal and (b) external failure
categories.

(a) Internal Failure Costs

Failure costs occurring prior to delivery or shipment of the product,
or the furnishing of a service, to the customer.

Examples are the costs of:

•Scrap
•Rework
•Re-inspection
•Re-testing
•Material review
•Downgrading

95
(b) External Failure Costs

Failure costs occurring after delivery or shipment of the

product -- and during or after furnishing of a service -- to
the customer.

Examples are the costs of:

• Processing customer complaints
• Customer returns
• Warranty claims
• Product recalls

96
 Leverage Effect

Prevention Costs Internal failure Costs

Appraisal Costs External failure Costs

97
 Performance versus Importance in Driving
Satisfaction: Quadrant Map
100
Product
Performance (% satisfied)

Sales

Status quo Leverage

60
Ignore Add resources

Repairs
Billing

0 35 70
98 Importance
 Hidden Costs of Poor Quality

99
 Quality Cost
Analysis
 Objective:
 to determine opportunities
for quality improvement
 Generating the cost
 Reporting the cost
 Analyzing the cost
 Optimum the cost
100
 Other Quality
Awards
European Quality Award
Canadian Awards for Business
Excellence
Australian Business
Excellence Award

101
 Topic Outline
Quality Management System (QMS).


 Quality Planning
 Quality Assurance
 Quality Control & Improvement
Quality Models & Theories


 Quality Philosophies
 Quality Management Strategies
 Quality System & Standards
 Quality Performance Measurement
 Legal Implication of Quality
102
 [C] Legal implication of
Quality
Any (direct) rules & regulations?
Is it a must to display your Quality
Policy/Mission?
Compare with OHS?
Product liability
Consumer dissatisfaction
Consumer tolerance for minor
defects has decreased.
A strong QA program can HELP
103 management to reduced these
  Highly visible field failures often prompt the
questions of whether today’s products are
as good as their predecessors and
whether producers (manufacturers) are
really interested in quality.

 What is your opinion?

104
 Reflection

End of Topic

105