Description
Introduction
As we wrap up this course, we look at what is required to be a leader in Quality Management. The roles, responsibilities, duties and qualities of a good leader will be explored, as will the methods that a leader employs to set a strategy for the sustainable improvement of quality in an organization.
Finally, we will explore the very important concept of ethics, what it entails, and how it relates to quality management. We will end the lesson, and the course, with this thought: “a good company delivers excellent products and services; a great company delivers excellent products and services and strives to make the world a better place.”
Reading Assignment
Quality Management (Knowles) Chapters 7,8 – pp. 59-89, Chapter 12 – pp. 137-149
Learning Journal
In the learning journal, you should record your activities, and record problems you may have encountered, as well as your notes and thoughts about the material. In addition, you should consider the following questions for reflection:
Which ethical and social responsibilities do companies have when it comes to quality? Can you think of an example where poor quality had some serious social consequences? Does the quest for quality respond to a sense of responsibility, or to the need to maximize profits for shareholders?
Please answer these questions in 300 words or more. Your answer should reflect your personal experience and should be thoughtful and introspective.
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Quality Management
Graeme Knowles
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Graeme Knowles
Quality Management
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Quality Management
© 2011 Graeme Knowles & bookboon.com
ISBN 978-87-7681-875-3
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Quality Management
Contents
Contents
1
Introduction
9
2
Background and History
10
2.1
Definition of Quality
10
2.2
Understanding Quality Management
11
2.3
Development of Quality Thinking
12
2.4
Summary
17
3
Why Quality Management?
18
3.1
Introduction
18
3.2
What is Wrong with Traditional Approaches?
18
3.3
Tangible Benefits
21
3.4
Intangible Benefits
28
3.5
Summary and impact
28
4 The Contribution of Dr. W. Edwards Deming
30
4.1
Introduction
30
4.2
The 14 Points
30
4.3
The Deadly Diseases
33
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Quality Management
Contents
4.4
The System of Profound Knowledge (SoPK)
35
4.5
Summary
37
5
Standards and Models
38
5.1
Why Do we Need Standards and Models?
38
5.2
ISO 9000 Series Standards
38
5.3
Self- Assessment Models of Quality
43
6
Customers
51
6.1
Introduction
51
6.2
Customers and Quality: The Myths
51
6.3
Internal and External Customers
55
6.4
Requirements Gathering and Value Analysis
55
6.5
Summary
58
7
Leadership in Quality Management
59
7.1
Introduction
59
7.2
Principles of Leadership for Quality
60
7.3
Leadership Decision Making
69
7.4
Summary and impact
79
8
Strategic Quality Management
80
8.1
Introduction
80
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Quality Management
Contents
8.2
Vision, Mission and Values
80
8.3
Strategic Objectives
82
8.4
Hoshin Kanri
85
8.5
Summary
89
9
Processes
90
9.1
Introduction
90
9.2
Business Processes: The Reality
92
9.3
Process Planning
93
9.4
Process Control
94
9.5
Process Capability
102
9.6
Managing Variation Reduction Using SPC
106
9.7
Benefits of SPC
108
9.8
Summary
108
10
Partnerships and Resources
110
10.1
Introduction
110
10.2
The ‘Transactional’ Supplier Relationship Model
110
10.3
The Supplier Partnership Model
113
10.4
Partnering Beyond the Supply Chain
115
10.5
Resources
116
10.6
Summary and Impact
116
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Quality Management
Contents
11
People in Quality Management
117
11.1
Introduction
117
11.2
Respect for the Individual
117
11.3
Empowerment, Motivation and Participation
117
11.4
Teamwork
119
11.5
Developing People
125
11.6
Reward and Recognition: Performance Appraisal and Performance Related Pay
126
11.7
Summary and impact
136
12 Ethics and Corporate Social Responsibility
137
12.1
Introduction and Conceptual Foundations
137
12.2
Ethical Models
138
12.3
Ethics and Communication
142
12.4
Benefits and Risks of Ethical Behaviour
147
12.5
Creating an Ethical Environment
148
12.6
Corporate Social Responsibility
148
12.7
Summary
148
13 Learning, Change and Process Improvement
150
13.1
Introduction
150
13.2
Process Improvement
150
13.3
Change and Change Management
153
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Quality Management
Contents
13.4
Organizational Learning
160
13.5
Summary and impact
165
14
Service Quality
167
14.1
Introduction
167
14.2
The Dimensions of Service Quality
167
14.3
Measuring Service Quality
169
14.4
Service Quality Gaps
170
14.5
Delivering Service Quality
171
14.6
Summary and Significance
176
15 Implementing Quality Management
177
15.1
Introduction
177
15.2
Will-Focus-Capability
177
15.3
Prepare the Organization for Transformation
178
15.4
Take Action to Achieve Transformation
181
15.5
Communicate, Review, Diagnose and Revitalise
183
15.6
Critical Success Factors
184
References
185
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Quality Management
Introduction
1 Introduction
This study guide is designed to provide an overview of the key elements, important historical context and current debates
in the field of Quality Management. It aims to give a coherent view of the underlying principles of quality management,
and how these relate to practical application in a range of organizations. The tools and techniques which support the
principles are not covered in detail in this guide, More information on these can be found in the companion guide: “Six
Sigma: Principles and Practices” also available at Bookboon.com.
The guide starts with a development of the theory in each area and then provides a contextualisation which considers what
the theory might mean for organizational practice. Due to the complexity of many of the issues addressed, it is possible
to write much more on any single topic, but I have tried to cover most of the key points in order to provide a foundation,
and further literature linked from the text allows the reader to investigate any topic in more depth if they wish. Finally,
at the end of each chapter there are a number of questions for you to develop your thinking in the area.
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Quality Management
Background and History
2 Background and History
2.1
Definition of Quality
Before we study the subject of Quality in any depth, we must be clear on what we mean by the term “Quality”. When
talking to others about Quality we must be sure that we have the same understanding of the term. Consider the following
definitions:
•
A degree of excellence – The Concise Oxford Dictionary
•
Fitness for purpose – Defoe and Juran (2010)
•
The totality of features and characteristics that bear on the ability of a product or service to satisfy a given need
– British Standard 4778 (British Standards Institution; 1991)
•
The total composite product and service characteristics of marketing, engineering, manufacture, and
maintenance through which the product and service will meet the expectations of the customer – Feigenbaum
(1961)
•
Conformance to requirements – Crosby (1979)
•
Quality is a dynamic state associated with products, services, people, processes, and environments that meets or
exceeds expectations and helps produce superior value – Goetsch and Davis (2010)
The dictionary definition of quality is interesting, but does not really help in studying the area as it is too vague. This perhaps
fits with the general perception of quality which often confuses quality with specification. According to this definition we
might be tempted to believe that a high specification car (say, for example, a Rolls Royce) is, inherently of higher quality
than a lower specification vehicle (such as a Volkswagen Beetle). Juran’s simple definition of quality, on the other hand,
suggests that if both vehicles satisfy the purpose for which they were purchased, they can both be quality products, and
a differentiation in quality cannot be assessed merely in terms of features that one product enjoys over the other.
Feigenbaum’s definition of quality is interesting because it brings into consideration departments other than manufacturing
which contribute to the quality of product and service provided by the company to meet the expectations of the customer.
It is perhaps worth contemplating whether meeting the expectations of the customer is a higher level of achievement
than providing a product or service that is fit for purpose. Customers expectations would reasonably include a product
or service meeting any declared ‘purpose’; however, as we shall see later, there may be things that the customer does not
explicitly state, but that nevertheless form a legitimate part of their expectations. We might think here of the styling of
the product or level of reliability.
Crosby’s definition can be contrasted to the often-held belief that a product/service that meets specification can be regarded
as a quality item. Conformance to specification implies that the specification, if achieved, will meet the requirements of
the customer. It is clear that if market research is flawed or out of date, products/services derived from such information
are unlikely to meet customers’ requirements no matter how closely they have been produced to specification.
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Quality Management
Background and History
Our understanding of the word quality can and arguably should be associated with achieving or exceeding expectations,
meeting requirements that the customer had not actually stipulated, but once offered become the expectation of everyone.
Providing products/services that are only fit for purpose may mean that a company is placed in a position of declining
market share if its competitors are exceeding the expectations of the market place.
The Goetsch and Davis definition is a reasonable attempt to draw together the themes of a number of definitions of quality
and create a unifying definition. The most noteworthy addition to the previous discussion is the idea of dynamism. By
this they mean that acceptable levels of quality are not fixed, but change with customers’ experiences and view of the
world. In summary:
•
Quality is defined by the customer, and as such will change over time, often in unpredictable ways.
•
Quality is associated with creating customer value.
•
A quality good or service meets or exceeds the whole range of customer expectations, some of which may be
unspoken.
•
2.2
As a complex concept, quality can only be addressed by the whole organization working together.
Understanding Quality Management
If ‘Quality’ is the end point, then ‘Quality Management’ is the approach and process for getting there. Accordingly, we
need also to develop an appropriate understanding of what this idea means. In this context there is no simple definition
which encapsulates the area; instead we need to consider the key principles which are central to the topic.
If we are concerned with providing ‘value’ to customers we must consider how we can improve customer value. There are
a number of principles which are central to the practice of Quality Management (all of which will be discussed further
later in the book):
•
Customer Focus: If we wish to create value for our customers we need to become obsessive about
understanding our customers and their requirements and expectations.
•
Strategic Focus: Quality Management must be a strategic undertaking. If companies survive and thrive
through delivering value to their customers, then they must treat this as a key strategic objective, creating a
strategic vision and deploying this throughout the company in associated goals and actions. This implies a
long-term commitment and focus.
•
Leadership Focus: Nothing happens in any organization without commitment of leaders, their active driving
of the strategy, and constant positive engagement with its application.
•
Process Focus: For too long organizations have been obsessed with outcomes. Outcomes are driven by
the effective application of appropriate processes. Emphasis needs to move from assessment of outcome
performance to the development and control of processes to deliver customer value. In particular it should
be recognised that organizational processes flow across departmental boundaries and management focus on
departmental outcomes will often have a detrimental effect on the overall business process.
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Quality Management
•
Background and History
People Focus: Quality Management is fundamentally about people. Processes are only effective in delivering
customer value if they are associated with appropriate behaviours from the individuals involved. An
excellent process can be let down by a demotivated or poorly trained member of staff. An important aspect
of managing quality is the creation of a motivated and empowered workforce able to work with and on
processes to maximise customer value.
•
Scientific Focus: Quality management is fundamentally based on the Scientific Method – Plan, Do, Study,
Act. – where decisions are evaluated based on evidence and data, and these evaluations are, in turn, used
to drive further iterations of action. This is supported by the appropriate use of analytical tools to derive
maximum information from the data available.
•
Continual Improvement, Innovation and Learning: At the heart of Quality Management is dissatisfaction
with the status quo. Process improvement in such an organization is not simply about responding to
problems (although this is necessary) it is about proactively seeking to learn about customers, processes and
behaviours; and to improve upon existing practices, or to innovate in developing new markets, processes and
practices.
•
Systems Thinking: Senge (1999) had ‘Systems Thinking’ as his ‘Fifth Discipline’ because of its integrative
qualities. By integrating the key concepts and seeing the organization in a holistic way we can create
synergies between the elements of the thinking and deliver a whole which is much greater than the sum of
the parts.
2.3
Development of Quality Thinking
Figure 2.1 indicates the new ideas which arrived in quality at various point in history. The advent of a new era does not
necessarily mean that the practices and principles espoused by earlier eras died out; in fact many examples of craftsmanship
or quality assurance can be found today. Nor is the beginning of each era meant to represent the first articulation of
theories or approaches, but where they became mainstream. The bands indicate, broadly, times when those ideas were
pre-eminent in the quality domain.
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Quality Management
Background and History
Figure 2.1. A Quality Timeline
2.3.1
The Craftsmanship Era (Up to 1900)
Before the Industrial Revolution it was usual that people who made things also sold them directly to their customers who
were generally from the same vicinity. Services also were less sophisticated and the person providing the service dealt
directly with the customer. If a craftsman were particularly good at his work, he would sometimes attract custom from
other localities through word of mouth advertising. Quality – meeting the needs of the customer – was very personal in
those days and because of a lack of far-reaching distribution systems, it was particularly important to achieve and retain
a local reputation for good work at a fair price. The development of Guilds of craftsman developed this thinking further
with established ‘masters’ assessing candidates for membership.
2.3.2
Standardisation, Mass Production and Quality Assurance (1900 – 1930)
With the formation of factories and increasing automation, work became progressively de-skilled and more repetitive. The
supplier/end-user relationship was lost and with it the pride in workmanship associated with the skilled craftsman. This
became a self-sustaining cycle; the less factory jobs required the skills of traditional craftsmen, the more they attracted
unskilled people. In America in the early 20th century the concentration of semi and unskilled workers in the factories
was compounded by the diversity of the spoken language of immigrant workers. The solution to communication problems
and only paying piecework rates for good product was to employ inspectors who could differentiate between conforming
and non-conforming items. Figure 2.1 shows the general situation in which inspectors check the output of an operation
and decide whether the product is good, consigned to scrap or returned to the manufacturing operation for rework.
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Quality Management
Background and History
Rework
Input
I
Process
Customer
Scrap
Figure 2.2. The introduction of inspection to the business process.
The effect of the introduction of inspection was to prove dramatic. This system tells the individual worker that if they
are not sure whether or not their work is conforming, it does not really matter because the inspectors’ job is to make
that decision. Thus, responsibility for the quality of work is removed from the individual and placed with the Quality
Department that employs the inspectors. The worker is being paid for the amount of product produced and, therefore, the
primary aim of the production process is to manufacture the volume of product required by management. The inspector
becomes the barrier between the production operation and the customer – the part of the operation that ensures that
the customer receives a quality product. The last vestiges of worker self-respect are removed when management discuss
production problems with supervisors and inspectors, but not the workers who are part of the process under discussion.
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Quality Management
Background and History
It was the work of Frederick Winslow Taylor in the early 1900s that legitimised the use of inspectors to ensure adequate
quality of finished product. He was to become known as the father of the so-called Scientific Management; his emphasis
was on work output, labour efficiency and the introduction of work-study. With the accent purely on output, labour
efficiency and the introduction of Work Study and Work Measurement, quality was treated as an afterthought. In his book,
Taylor describes the answer to poor quality of output as the rigorous application of more and more inspectors, who in
themselves were now seen as specialists. He was hugely successful at what he did and, it could be argued that he met the
needs of his time. This is, of course, not to suggest that ‘Quality Assurance’ has died out. The Make-Test-Deliver process
is still with us and is, arguably, the dominant approach to delivering quality products in the world.
2.3.3
Quality Control Era (1930 – 1950)
A number of thinkers began to see that Scientific Management and associated approaches de-humanised the work place;
workers were not paid to think, but to carry out to the letter the work instructions of supervision and management.
After a while the workers gave up any attempt to correct things that were wrong in the production operation and began
to disassociate themselves from the success of the organisation. Apart from the human aspects of the inspection-based
organisation, routine 100% inspection quite simply does not work. It is inevitable that an inspection process will lead to
products that should have been scrapped or returned for rework being despatched to the customer, and good products
will be scrapped or returned for rework. Each of the adverse outcomes of inspection is serious; customers quite rightly
do not like to receive sub-standard products and if sufficiently upset will take their business elsewhere. Rework lines
receiving good or scrap product believe that the hapless inspectors deserve the poor reputation that they have on the
shop floor. The key issue is that inspection is an activity that takes place after a defective product is made. At best the
defective product is not despatched to the customer. However, quality cannot be inspected into a product – quality has
to be built into each process.
By as early as the 1920s, Walter A Shewhart, an American statistician who worked for the Bell Telephone Company,
became involved in the manufacture of millions of telephone relays, and he realised that inspection after the event was
not a good way of ensuring quality. He studied how the manufacturing process could be monitored in such a way as
to prevent non-conforming items being produced and in 1924 he invented the control chart. In 1931 he published the
world’s first book on quality control “Economic Control of Quality of Manufactured Product” (Shewhart, 1980) and his
work forms the basis of all teaching on Statistical Process Control today.
Dr William Edwards Deming had been a student of Walter Shewhart and he spent his early years as a Government employee,
mainly in the Department of Agriculture and the Bureau of Census. Following the Second World War the US Government
played a significant role in rebuilding Japanese industry, and Deming was invited to apply his statistical knowledge to
the Japanese situation. He taught them to apply the statistical method and team approach to quality improvement that
has transformed Japan into market leaders of virtually every form of manufactured goods. He has been referred to as the
father of the Third Industrial Revolution.
The principal focus of the quality control era was to replace inspection with more informative process control systems
which aimed to reduce variation in outputs (be they product or service) and deliver more consistency by focusing on
inputs. Its modern day incarnation is Six Sigma.
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Quality Management
2.3.4
Background and History
The Total Quality Management (TQM) Era (1950 – 1970)
In addition to his work with SPC, Deming was strongly convinced of the need to build the human element into quality. His
14 points are an attempt to define the transformation of Western style of management to accomplish the necessary change.
Also in the early 1950s, Dr Joseph M Juran participated in the quality movement in Japan and, like Deming, has been
bestowed with Imperial honours in recognition of his contribution to Japan’s industrial success. Juran believed in the
management of Quality and thus concentrated his efforts on executive and senior management who he believed to be
responsible for the majority of quality problems. In 1951 he published the first edition of The Quality Control Handbook;
it is now in its 6th edition (Defoe and Juran, 2010) and it still is regarded as the practitioners Quality Bible, being full of
management and planning techniques as well as the technical aspects of quality.
Another well respected American quality specialist, Dr Armand V Feigenbaum, first published in 1961 a book entitled
Total Quality Control which was the first to express the view that quality was not just about manufacturing, but could be
applied to departments such as Engineering, Development, Sales and Service. “Quality is from the cradle to the grave,
from the womb to the tomb!” He also developed the technique of measuring the cost of quality, showing that by adopting
preventive techniques an improvement in Quality Costs can be achieved.
More recently, and also from America, came to prominence Philip Crosby, ex Vice President for Quality with ITT who
founded a Quality College in Florida and later one in Europe. He is thought to be the world’s leading consultant on quality
improvement; his view is that quality is free and he promotes the concept of “Right first Time” as a way to change the
management culture of an organisation. His four Absolutes of Quality Management are seen as a good starting point for
any company embarking on quality improvement action.
The enduring strength of the humanist approach to quality sees it now enshrined in most companies’ vision and mission
statements (“people are our most important asset”), and much that was originally heretical- involvement, empowerment,
trust and respect are now seen as the norm; in theory if not always in practice.
2.3.5
Standards and Awards (1970 – 1990)
The strength of TQM was in the principles it laid down for how to transform an organization. Its weakness was the need
for interpretation and the wide range of approaches from the good to the bad, and even the ugly which it spawned. The
variability of results seen by customers attested to this.
Over the years a need for standardisation was felt; to homogenise not the approach, but at least the principles. BS5750
and ISO 9000 Quality Systems Standards have been the most successful elements of this approach. They are externally
audited and accredited standards which have been joined in more recent years by Quality or Excellence Awards which
are recognitions of company approaches and performance relying more on self-assessment.
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Quality Management
2.3.6
Background and History
Initiatives (1990 – present)
The final trend has been the appearance of mega-initiatives, of which Lean and Six Sigma are probably the most prevalent.
These have both been around since before the 1990s but have come to prominence from that period due to aggressive
marketing from consultancies. The merits of these systems will be discussed later, but the susceptibility of senior
management teams in a wide variety of sectors and sizes of organizations to hard selling of ‘silver-bullet’ approaches is,
perhaps the most worrying trend of all.
2.4
Summary
This section has clarified our understanding of the rather abstract concepts of both “Quality” and “Quality Management”.
Perhaps the most important point to note is the integrated nature of the elements of Quality Management; all of the ideas
are useful individually, but it is only when they are integrated into a holistic approach that their transformative power is
fully harnessed.
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Quality Management
Why Quality Management?
3 Why Quality Management?
3.1
Introduction
Before we look at what constitutes a Quality Management initiative, and how we might implement it, we need to understand
the rationale for doing so, because the amount of effort involved in such change is very significant. The rationale presented
by the proponents of Quality Management tends, as with most arguments for change to fall into two categories:
•
A critique of existing practices to demonstrate why the status quo is not a viable option
•
A list of benefits to be derived from the change.
3.2
What is Wrong with Traditional Approaches?
3.2.1
Lack of Leadership
Leadership is not management. Management is concerned with producing order and consistency through actions such
as planning, budgeting, organizing and controlling, while leadership is concerned with producing change and movement
by vision building, motivating, aligning people and communicating (Kotter, 1990). This is not to imply that leadership is
‘good’ and management ‘bad’ but to recognise that they serve different purposes and require different skills. Management
serves us well in static situations (one might think of the situation of Ford in the early 20th Century) however, more
dynamic situations require leadership.
Traditional organizations have tended to emphasise control and organization (management) over vision and motivation
(leadership). This results in static organizations good at doing what they have always done, and focused on ensuring
management instructions are carried out, but poor at responding to changing environments and developing situations
which are increasingly the norm in the modern business environment.
3.2.2
Short Term Focus
“For 60 years we have been the victims of Keynesian economics. Everything has to have a payback in the next quarter or the
next year, or it cannot be justified.” Goetsch and Davis (2010)
They note that Most organizations are unable to take a long term view. This is often driven by the stock market where
companies are expected to declare a profit for the year, half-year, or even quarter. With share prices, liquidity and seniormanagement bonuses dependent on these results it is inevitable that short-term priorities win out. An investment which
pays off dramatically in 3 years will be overlooked in favour of one which delivers much more modest results but within
the current financial year. This can also lead to ‘cost-cutting’ measures which save money in the short term at the expense
of higher costs in the future. For example, an organization may choose not to shut down for maintenance of key assets in
a particular year, saving on lost production, and labour or material costs associated with the maintenance. However, the
decision may lead to catastrophic machine breakdown, with much higher costs in terms of lost productivity or labour
and material costs to fix the problem.
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Quality Management
3.2.3
Why Quality Management?
Lack of Customer Focus
Shiba, et al. (1993) note the difference between the traditional ‘Product-Out’ concept, where the company works to a set of
standards and a ‘good’ product is one which conforms to the company standards, and the ‘Market-In’ concept where the
focus is on satisfying the customer. As long as the standards are aligned with the customer requirements, it may be argued,
there is no conflict in these two approaches. However, the difference lies in the behavioural implications. A ‘ProductOut’ mentality will lead to adherence to standard despite unhappy customers – “It meets our standard so it must be OK”.
This approach will be compromised with an unexpected change to customer expectations, and has lead to the demise of
many organizations when a better alternative hits the market causing customers to suddenly expect more of the product.
An example might be the advent of smart phones and the problems Nokia have experienced (search the web for the Nokia
“burning platforms” memo) in their market share since Apple launched the iPhone, and radically changed the market.
Playing catch-up when the market changes suddenly is very difficult and expensive, as Nokia has discovered. A ‘MarketIn’ approach encourages the active engagement with customers which makes it less likely that companies will stick to
outmoded specifications, or miss coming trends for too long.
There is also a degree of arrogance which can set in with the ‘Product-Out’ mentality. An assumption (often expressed by
designers) that the customer does not know what they want. Whether this is true or not is largely a moot point. A quote
attributed to Ford is often used to illustrate this idea:
“If I had asked my customers what they wanted, they would have said a faster horse.”
Of cours
