QUALITY MANAGEMENT PRINCIPLES & PRACTICES

 

I.      QUALITY MANAGEMENT PRINCIPLES

1.     Meeting Customer Expectations:

o   Detail: Quality is defined by how well a product or service meets the needs and expectations of customers. This means understanding what your customers value and ensuring your offerings align with those values.

o   Example: If you are developing a software product, quality means delivering a bug-free, user-friendly application that performs the functions your customers need. Regularly gathering customer feedback and making improvements based on their input is crucial.

 

2.     Everyone's Responsibility:

o   Detail: Quality is not just the responsibility of the quality assurance team; it involves every employee in the organization. Each person must ensure that their work meets the required standards and contributes to the overall quality.

o   Example: In your role, you might ensure that both software and hardware components meet quality standards. However, a developer must write clean, efficient code, and a product manager must clearly define requirements to ensure the final product meets customer expectations.

 

3.     Continuous Improvement:

o   Detail: Quality management is an ongoing process of making incremental improvements to products, services, and processes. This involves regularly assessing performance and making necessary adjustments to enhance quality.

o   Example: Implementing a continuous integration and continuous deployment (CI/CD) pipeline in your software development process can help catch issues early and ensure that each new release is an improvement over the last.

 

4.     Avoiding Over-Exceeding Expectations:

o   Detail: While it might seem beneficial to exceed customer expectations, it can lead to increased costs without a corresponding increase in customer satisfaction. It's important to balance meeting expectations with maintaining profitability and deliver the right features to customers.

o   Example: If your team starts adding extra features to a product that customers didn't ask for, it might delay the release and increase costs. Instead, focus on delivering what the customer needs and improving those features over time.

 

  

II.    QUALITY MANAGEMENT PRACTICES

 

DEMING CYCLE a.k.a PDCA (PLAN-DO-CHECK-ACT) CYCLE,

Plan-Do-Check-Act is a continuous improvement process.

 

1.     Plan: Identify a goal or purpose, formulate a theory, define success metrics, and put a plan into action.

2.     Do: Implement the plan on a small scale to test its effectiveness.

3.     Check: Monitor the outcomes to see if the desired results were achieved. Analyze the data and learn from the process.

4.     Act: If the plan was successful, implement it on a larger scale and continuously assess your results. If it wasn’t, refine the plan and repeat the cycle.

 

The cycle emphasizes ongoing improvement and learning, making it a cornerstone of effective quality management. By repeating this process, organizations can adapt and refine their strategies to achieve better results over time.

 BALDRIGE EXCELLENCE FRAMEWORK

·        Award Overview: The Malcolm Baldrige National Quality Award is the highest quality award in US.

·        Purpose: Focuses on understanding and managing quality, not just winning an award. Organizations learn by assessing their own processes and improvements over time.

·        Key Aspects:

o   Self-evaluation is crucial.

o   Full criteria and measurements can be downloaded for thorough understanding.

·        Focus on Customers:

o   Review core values found in high-performing companies.

o   Apply relevant core values to customer-related processes.

o   Evaluate key processes from four perspectives: business with customers, consistency across departments, improvement sharing, and integration of key processes.

o   Ensure processes like purchasing support procedures leading to customer satisfaction.

·        System View: The organization is seen as a system, so key processes must be integrated.

·        Evaluation of Results: Compare results to industry standards and look for positive trends.

·        Small Scale Testing: Implement the framework on a small scale by focusing on one critical area like customers or operations for analysis and improvement.

THE GAP FRAMEWORK

·        Quality Management: High quality means meeting customers' expectations consistently.

·        Purpose: Helps identify and address five distinct gaps in managing quality.

·        Five Gaps:

1.     Understanding Customer Wants: Management might misinterpret customer needs. Close this gap by staying close to customers and monitoring their changing needs through marketing and sales.

2.     Quality Goals vs. Specifications: There's a gap between high-level quality goals and the written specifications employees follow. Ensure that middle managers clarify and define quality goals in day-to-day processes.

3.     Following Specifications: When written specifications aren’t followed, it must be addressed or rewritten. First-level supervisors play a crucial role here.

4.     Promises vs. Delivery: The difference between what the company promises and what it delivers. Management must ensure that promises are realistic and consistently met.

5.     Customer Expectations vs. Perceptions: The most difficult gap to manage—the difference between what customers expect and their perception of the quality they receive. Manage this by minimizing the other four gaps.

·        Implementation: Evaluate overall quality programs or analyze a single process. Start by focusing on one customer-related process and compare it against the first four gaps to see how it stacks up against customer expectations.

ISO 9000

·        Overview: Originally required for doing business in Europe, ISO standards have now become truly international.

·        Quality Management Principles:

o   Focus on continuous improvement of processes.

o   Integrate processes as a system and base business decisions on facts.

o   Manage relationships with customers and suppliers.

·        Principle 7^th: Relationship Management:

o   Effective management of supplier relationships can result in a well-managed supply chain, providing a stable flow of goods and services.

o   Suppliers go beyond just providing parts; they supply finished products and complete delivery systems, helping to meet customer expectations.

o   Contracts focus on finding a mutually beneficial price point and building long-term partnerships.

o   Companies share information with suppliers and work towards mutual goals.

o   ISO has supported the partnership approach for decades, leading to a major shift in global business practices.

·        Implementation: The seven principles of quality management can be implemented at any level within an organization.

 

SERVQUAL MODEL

·        Purpose: Measures service quality based on five attributes identified by leading researchers.

·        Five Attributes:

1.     Tangibles: Physical aspects that customers can see and touch, such as a clean restaurant or well-delivered packages.

2.     Reliability: Dependability and accuracy of the service. Customers expect the service to be delivered as promised, on time.

3.     Responsiveness: How the service provider reacts to problems or special needs. Prompt and polite responses to issues can turn an unhappy customer into a satisfied one.

4.     Assurance: Customers’ trust and confidence in the company. This is influenced by the knowledge and courtesy of employees.

5.     Empathy: Showing care and providing personal attention to customers’ needs. Small gestures can significantly improve quality ratings.

·        Key Takeaway: The most important attribute is reliability. Customers want to be able to count on the service being delivered as promised.

 

PARETO ANALYSIS

        ·        Pareto Principle: States that approximately 80% of effects come from 20% of the causes. In many companies, 80% of profits come from 20% of the products. It is used to determine where to begin a quality improvement project.

·        Application:

o   Identify key areas where a few causes lead to most of the problems or benefits.

o   Improve quality and performance by focusing on the "vital few" rather than the "trivial many."

·        Example:

o   In a factory, most quality problems may come from a few specific machines.

o   Build a Pareto chart to identify these machines by analyzing the number of products scrapped or reworked.

o   Address the most common defects, such as operator errors, through targeted interventions like refresher training.

·        Broader Use: Apply Pareto analysis to various areas, including managing assignments at work to ensure time is spent on the most important tasks.

 

HOUSE OF QUALITY

 

·        Purpose: Helps create products and services that customers want to buy.

·        Steps to Creating a House of Quality:

1.     Determine Customer Wants: Identify customer expectations through surveys or feedback. Place these on the left side of the "house."

2.     Identify Product Features: List features of the product you plan to design (e.g., price, toppings for pizza). Place these at the top of the "house."

3.     Analyze Relationships: Evaluate the relationship between customer wants and product features in the matrix. Determine if the relationship is strong, weak, or nonexistent.

4.     Evaluate Feature Relationships: Analyze how changes in one feature affect other features and mark this on the roof of the "house."

5.     Determine Importance:

§  Evaluate how important each customer want is to the customer (scale of 1-5).

§  Evaluate how important each customer want is to you.

§  Evaluate the importance of each product feature to you during design.

6.     Conduct Competitive Evaluation: Assess how competitors prioritize features and customer wants. Use this information to make strategic decisions for product development.

 

ROOT CAUSE ANALYSIS

·        Purpose: To find the source of a problem and eliminate it for a permanent solution, rather than addressing only the symptoms.

·        Best Tool: The Five Why's approach.

o   Process:

§  Discover the problem and continuously ask "why" until the root cause is identified.

§  Typically, the root cause is found after asking "why" about five times.

§  Do not stop at the symptoms; continue to ask "why" until the actual root cause is found.

o   Example:

o   A workstation breaks down frequently. Initial fixes do not solve the problem permanently.

o   By asking "why" multiple times, the root cause is identified as the evaluation method of the supervisor, which prioritizes product completion over maintenance.

o   The permanent solution involves changing the supervisor's evaluation criteria to include meeting maintenance schedules.

o   Outcome: The Five Why's technique is simple, effective, and forms the foundation for continuous improvement programs.

LEAN QUALITY METHODS

·        Purpose: Streamline processes for efficiency, reduce waste, decrease cost, and improve quality.

·        Key Practices:

1.     Kaizen:

§  Means "improvement" in Japanese.

§  Focuses on small, incremental improvements made continuously over the long term.

§  Foundation of continuous improvement programs aimed at reducing errors and eliminating defects.

2.     Quality at the Source:

§  Each worker is their own inspector, ensuring nothing leaves the workstation unless it meets standards.

§  Catches defects before they happen by shutting down the workstation when standards are not met.

§  Eliminates the need for rework and inspection stations, streamlining the production process.

3.     Poka-Yoke (Mistake-Proofing):

§  Prevents errors from happening by designing processes that make it difficult to make mistakes.

§  Example: A factory provides bolts in packages of four, ensuring the task is complete when the package is empty.

§  Ensures quality by mistake-proofing various activities.

 

 

THE SIX SIGMA METHOD

·        Purpose: To provide reliable products and consistent services by reducing defects and errors to a very small number.

·        Method: DMAIC (Define, Measure, Analyze, Improve, Control)

o   Define: Identify the process you wish to improve.

o   Measure: Measure and analyze defects within the process.

o   Analyze: Find ways to improve the process by reducing defects.

o   Improve: Implement improvements to reduce variability and defects.

o   Control: Put control mechanisms in place to ensure lasting improvements.

·        Key Focus Areas:

1.     Defects: Aim for no more than 3.4 defects per million opportunities.

2.     Reducing Variability: Tighten processes to reduce natural variation and inconsistencies.

3.     Customer Focus: Prioritize processes that are critical to quality from the customer’s perspective.

·        Applications: Six Sigma can be applied to various areas, including reducing variability in shipments, improving supplier quality, and reducing errors in accounting practices. It can be implemented on any level and scale within an organization.

 

 

TOTAL QUALITY MANAGEMENT (TQM)

·        Definition: Everyone in the organization is committed to managing quality and improving processes, products, and services.

·        Goal: Continuously improve customer satisfaction.

·        Eight Principles: Defined by the American Society for Quality (refer to exercise files for details).

·        Principle Four: Emphasizes that a business organization is a system. Changes in one part can impact other parts.

o   Example:

§  A typical manufacturing company has a purchasing department, factory, and distribution center.

§  Each department manages its own processes, but key processes (e.g., order fulfillment) run horizontally across departments.

§  If the purchasing department changes its policy to contract with the lowest-priced suppliers, it could save money initially. However, if the low-cost supplier has delivery issues or inefficiencies, it can lead to factory delays, inventory shortages, and customer dissatisfaction.

·        System Effect: Changes in one department can impact the entire organization. Maintaining a systems mindset is crucial when managing key processes.

 

THE VOICE OF THE CUSTOMER (VOC)

·        Definition: Expresses what customers want in their own words.

·        Steps to Creating a VoC Program:

1.     Gather Information: Collect data directly from customers through surveys, feedback from sales staff, and other means.

2.     Analyze Data: Identify major complaints, positive feedback, and trends. Ensure to keep features that customers like and address any issues.

3.     Act: Address issues promptly and emphasize positive features to those involved in product design and service delivery. Continuously monitor and track results.

4.     Advanced Approach: The Heart of the Customer—directly observe how customers use the product to gain insights. Example: Proctor & Gamble developed cold water detergent after observing customer behavior in specific markets.

 

BENCHMARKING

·        Purpose: To compare your performance to competitors, industry leaders, and learn from companies with excellent quality.

·        Process:

1.     Gather Information: Collect data on your own performance using meaningful metrics to measure the quality of your products, services, and processes.

2.     Measure Against Best in Class: Use the same metrics to measure companies that are best in class. Trade magazines and industry conferences can provide valuable information about high-quality performers.

3.     Compare Performance: Determine where you stand in comparison to other companies' quality performance.

4.     Develop Business Plans: Use benchmarking information to develop business plans and strategies for managing quality. Focus on maintaining top rankings in categories where you excel and closing gaps in areas where you need improvement.

·        Benefits:

1.     Drives continuous improvement efforts.

2.     Helps develop future projects by providing a foundation for quality improvement.

3.     Ensures you stay ahead of competition by continuously learning and improving.

MEASURING THE COST OF QUALITY

·        Purpose: Provides a starting point for improvement projects by measuring the cost of quality.

·        Components of Cost:

1.     Prevention Costs: Expenses for training, planning, designing quality materials and processes, forming problem-solving teams, and similar activities aimed at preventing quality issues.

2.     Appraisal Costs: Costs for inspection and testing to ensure products meet quality standards. Investments in prevention and appraisal reduce the number of failures.

3.     Internal Failures: Costs for reworked or scrapped materials due to issues discovered before the product is delivered to the customer. These failures impact the ability to deliver orders on time. Lean principles like quality at the source help minimize internal failures.

4.     External Failures: Failures occurring after the product or service is delivered, often called failures in the field. These are the highest cost category as they involve replacing defective products and managing the returns process. Managing suppliers closely can help prevent external failures.

·        Focus: Collect data on external failures (e.g., customer service complaints, product returns) to understand common reasons for these failures and allocate resources to prevent them.