Total Quality in

1
Chapter 2

• Total Quality in
• Organizations

2
Growth of Modern Quality Management
3
Key Idea
As consumer expectations have risen, a focus on
quality has permeated other key sectors of the
economy, most notably health care, education,
not-for-profits, and government.
4
Systems

• A system is a set of 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.

5
Key Idea
Successful management relies on a systems
perspective, one of the most important elements
of total quality.
6
Manufacturing Systems (1 of 2)

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

7
Manufacturing Systems (2 of 2)

• Industrial engineering and process design
• Finished goods inspection and test
• Packaging, shipping, and warehousing
• Installation and service

8
Key Idea
Traditional quality assurance systems in
manufacturing focus primarily on technical issues
such as equipment reliability, inspection, defect
measurement, and process control.
9
Relationships in a Typical Manufacturing System
(Fig.2.1)
10
Quality in Marketing
Marketing and sales personnel are responsible for
determining the needs and expectations of
consumers.
11
Quality in Product Design
Product design and engineering functions develop
technical specifications for products and
production processes to meet the requirements
determined by the marketing function.
12
Quality in Purchasing
A purchasing agent should not simply be
responsible for low-cost procurement, but should
maintain a clear focus on the quality of
purchased goods and materials.
13
Quality in Production Planning Scheduling
Poor quality often results from time pressures
caused by insufficient planning and scheduling.
14
Quality in Manufacturingand Assembly
Both technology and people are essential to
high-quality manufacturing.
15
Quality in Production Planning Scheduling
Poor quality often results from time pressures
caused by insufficient planning and scheduling.
16
Quality in Process Design
Manufacturing processes must be capable of
producing output that meets specifications
consistently.
17
Quality in Finished Goods Inspection and Testing
The purposes of final product inspection are to
judge the quality of manufacturing, to discover
and help to resolve production problems that may
arise, and to ensure that no defective items
reach the customer.
18
Quality in Installation and Service
Service after the sale is one of the most
important factors in establishing customer
perception of quality and customer loyalty.
19
Quality in Business Support Functions for
Manufacturing

• Finance and accounting
• Quality assurance
• Legal services

20
Key Idea
Every manager is responsible for studying and
improving the quality of the process for which he
or she is responsible thus, every manager is a
quality manager.
21
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).

22
Key Idea
The American Management Association estimates
that the average company loses as many as 35
percent of its customers each year, and that
about two-thirds of these are lost because of
poor customer service.
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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

24
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

25
Key Idea
These differences make it difficult for many
service organizations to apply total quality
principles, and foster misguided perceptions that
quality management cannot be effectively
accomplished in services.
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Components of Service System Quality

• Employees
• Information technology

27
Key Idea
Researchers have repeatedly demonstrated that
when service employee job satisfaction is high,
customer satisfaction is high, and that when job
satisfaction is low, customer satisfaction is low.
28
Key Idea
Information technology is essential for quality
in modern service organizations because of the
high volumes of information they must process and
because customers demand service at
ever-increasing speeds.
29
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

30
Quality Issues in Health Care

• Avoidable errors
• Underutilization of services
• Overuse of services
• Variation in services

31
Key Idea
Although the national health care system as a
whole may need a sweeping overhaul, many
individual providers have turned toward quality
as a means of achieving better performance and
customer satisfaction.
32
Quality in Education

• Koalaty Kid
• Active involvement of whole school community
• Committed leadership
• System for continuous improvement
• Environment that celebrates success

33
Quality in Higher Education
Business plays an important role in fostering
quality improvement efforts in higher education
by transferring knowledge and expertise on
quality processes and implementation practices.
34
Academic Quality Improvement Project (AQIP)
AQIP criteria focuses on institutional practices
for helping students learn, accomplishing other
distinct objectives, understanding student and
stakeholder needs, valuing people, leading and
communicating, supporting institutional
operations, measuring effectiveness, planning
continuous improvement, and building
collaborative relationshipsall of which are key
elements of TQ.
35
Quality in Small Business and Not-for-Profits

• Slow to adopt quality approaches
• General lack of understanding and knowledge about
  quality
• Focus on sales and market growth, cash flow, and
  routine fire fighting
• Lack of resources for formal quality systems

36
Key Idea
Perhaps the most important factor in successful
quality initiatives in small businesses is the
recognition by the CEO or president that a
quality focus can be beneficial and lead to
achieving organizational goals.
37
Quality in the Public Sector

• Quality in the Federal Government
• Federal Quality Institute
• Presidents Quality Award
• State and Local Quality Efforts

38
Key Idea
Quality concepts and principles are universal and
can be applied in all types of organizations. The
difficulty, of course, is developing an
infrastructure to make it happen and the
discipline to sustain efforts over time.