Understanding Quality

“The dedication to quality adn excellence is more than good business; it’s a way of life.” - George H. W. Bush

The best definition of quality is always focus on meeting customers’ expectations.

Be careful about exceeding customer’s expectations. Customers are not willing to pay extra for features or services they don’t require, so exceeding their needs can quickly cutdown the profits.

How a department views, measures, and manages quality must align with the other company departments and the company’s overall goals so-called “intent of quality”.

What suppliers want?

  • Clear expectations
  • Reasonable time to produce products
  • Efficient processes
  • Support

To create an effective quality management program for your company, it’s critical that the external views (customer and supplier) be carefully integrated with the internal views of quality (purchasing, operations, logistics, administration).

“The biggest cost of poor quality is when your customer buys it from someone else because they didn’t like yours.” - W. Edwards Deming

The biggest cost of poor quality is the cost of lost business.

Frameworks for Quality Management

Deming’s 14 Points

When you hear “Made in Japan” in the 1950s, you might think of cheap, low-quality products. But by the 1980s, “Made in Japan” was synonymous with quality. Dr. W. Edwards Deming was a big part of that change, who introduced his philosophy for managing quality.

Dr. W. Edwards Deming’s philosophy focuses on reducing variability. The thought is that the consistency can not only help company design more reliable products and services, they can also lower costs.

Deming believed management must drive every quality program.

Deming’s 14 points are a set of guidelines for improving quality in an organization.

The point 5 of Deming philosophy is Improve constantly and forever. If you’re familiar with lean principles, this is foundations of kaizen, Japanese word of continuous improvement. In business, Kaizen means to continuously make small improvements to every process. To accomplish this, Japanese companies adopted a four-step model, called the Deming cycle.

Deming Cycle (Plan-Do-Check-Act, PDCA):

  • Plan: Identify the problem and plan a solution.
  • Do: Implement the plan.
  • Check: Evaluate the results.
  • Act: Take action based on the results.

Deming Cycle

Juran’s Planning for Quality

Quality products do what they’re designed to do. Juran’s philosophy is that the quality of a product is defined by how well it meets customer needs.

Juran’s view of quality:

  • Develop an effective product
  • Meet customer needs
  • Measure results
    • Top managers: measure return of dollars, like revenue, profits.
    • Middle managers: work as translators between top managers and workers, to make sure all measurements are being met.
    • Workers: measure return of things, like time, materials, and effort.
  • Know cost of quality
    • Prevention costs: costs to prevent defects.
    • Appraisal costs: costs to detect defects.
    • Internal failure costs: costs when defects are found before delivery.
    • External failure costs: costs when defects are found after delivery.
    • The goal is to reduce the cost of quality.

Crosby’s “Quality is Free”

Crosby’s philosophy is that quality is free. He believed that the cost of poor quality is higher than the cost of preventing it. Crosby’s view of quality is that it’s about conformance to requirements. He believed that quality is:

  • Aim for zero defects
    • The quality goal should always be zero defects. Keep in mind that it’s a goal, not always possible to be perfect every day and everything you do.
    • Put measures in place to prevent defects instead of fixing them after you find them.
    • There’s no such thing as a quality problem, poor quality is caused by a process error, or an incorrect accounting practice, or a product design issue.
  • Find the root cause of problems
    • Investigate the root cause of problems, not just fix the symptoms.
    • Use tools like the fishbone diagram to identify the root cause of problems.
    • Use the 80/20 rule: 80% of problems are caused by 20% of the causes.
    • Use the 5 Whys: ask “why” five times to get to the root cause of a problem.
  • Do the job right the first time
    • It’s always cheaper to do it right the first time than to fix it later, and it’s free, if not when will you have time to do it over?
    • Use checklists to ensure that all steps are completed.
    • Use standard operating procedures (SOPs) to ensure consistency.

You can see Crosby’s approach in every continuous improvement program today. Make sure your processes focus on preventing mistakes, rather than fixing them.

The Baldrige Excellence Framework

In the United States, the highest award for quality an organization can receive is the Malcolm Baldrige National Quality Award. The award is named after Malcolm Baldrige, who was the Secretary of Commerce under President Ronald Reagan.

The Baldrige Excellence Framework is a set of criteria that organizations can use to improve their performance. The framework starts with the seven critical areas, where you should strive for excellence:

  • Leadership
  • Strategy
  • Customers
    • Choose core value to address
    • Evaluate your process according to value
      • Approach
      • Deployment
      • Learning
      • Integration
    • Evaluate your results
  • Measurement, analysis, and knowledge management
  • Workforce
  • Operations
  • Results

The Baldrige Excellence Framework is a great tool for organizations that want to improve their performance and achieve excellence. It provides a systematic way to assess an organization’s performance and identify areas for improvement.

The Gap Framework

It’s pretty easy to mismanage quality. The Gap Framework is a way to identify the gaps between what customers expect and what they actually get. The Gap Model is a useful tool for understanding the customer’s perspective and identifying the areas where you need to improve.

Quality Gaps:

  • Management and customer
  • Individual and company goals
  • Procedure and execution
  • Company promise and follow-through
  • Customer expectation and experience

It’s really hard to manage how someone perceives quality, but it’s also really important, because customers make future buying decisions based on their perception of your performance today. So you manage gap five by minimizing the other four gaps.

Be close to your customers, so you know their needs and requirements, even as they change. Make sure that written procedures are correct, are followed, and properly express the company’s quality goals, and don’t make promises you can’t meet.

ISO 9000

What ISO quality principles include:

  • Customers
  • Leadership
  • Employees
  • Process
  • Improvement
  • Data based decisions

SERVQUAL

How do you measure quality when you don’t have an actual product to inspect? SERVQUAL is a model came up with five things when evaluating service quality. Do each of these well and your customers will feel they’ve received excellent service.

The five dimensions of service quality:

  • Tangibles: What a customer can see and touch.
  • Reliability: Dependable and accurate service.
  • Responsiveness: Employee’s reaction to customer’s needs
  • Assurance: Customer’s trust and confidence in your company
  • Empathy: How much you care

Do what you say you’ll do when you say you’ll do it. If you can’t, let the customer know as soon as possible.

The SERVQUAL model is a useful tool for organizations that want to improve their service quality and meet customer expectations.

Tools for Quality Management

Pareto Analysis

The Pareto Principle, also known as the 80/20 rule, states that 80% of the effects come from 20% of the causes. In quality management, the Pareto Principle is often used to identify the most significant causes of defects or problems.

Examples:

  • 80% of customer complaints come from 20% of the customers.
  • 80% of the defects come from 20% of the causes.
  • 80% of the sales come from 20% of the customers.
  • 80% of the profits come from 20% of the products.
  • 80% of the problems come from 20% of the employees.
  • 80% of the delays come from 20% of the suppliers.
  • 80% of the accidents come from 20% of the hazards.
  • …

The beauty of this model tells us exactly where to start a quality-improvement project, and where to focus our efforts.

House of Quality

The House of Quality is a tool used in quality management to translate customer requirements into technical specifications. It is a part of the Quality Function Deployment (QFD) process, which is a systematic approach to ensuring that customer needs are met throughout the product development process.

No discussion of quality management would be complete without mentioning the House of Quality. Because this model helps you create products and services that your customers want to buy.

There are 6 steps to creating a house of quality:

  • Identify customer needs
  • Identify product features
  • Analyze the relationship between customer needs and product features
    • Strong relationship
    • Weak relationship
    • No relationship
  • Prioritize customer needs
    • Identify the most important customer needs
  • Competitors’ view of the product
    • Identify competitors
    • Figure out how they prioritize the features of the product and how they view what the customer wants

House of Quality for a New Pizza Product

As you can probably tell this can be a pretty in-depth analysis, but it can help you design a product or service that your customers wants to buy. In a long run, the house of quality could save your company a lof of time and money.

Root Cause Analysis

When you have a problem, you really want the permanent solution. You want to find the source of that problem, so that, if possible, it can be eliminated. Many times, we address the symptoms of a problem, but not the root cause, that only provides a short-term fix. This is called “whack-a-mole” management, you fix one problem, and another one pops.

The best tool for a root cause analysis is the 5 Whys approach. The 5 Whys is a simple, once you discover the problem, you continue to ask why until you find what is actually causing the problem. The goal is to get to the root cause of the problem, not just the symptoms.

By average, you’ll find the root cause of a problem after asking “why” five times. But don’t be surprised if you have to ask “why” more than five times. The

  1. Symptom: the 1st why is only review the symptom of the problem. And unfortunately, this is where most people stop, they apply a short-term fix and think the problem is solved.
  2. …
  3. You must continue to ask “why” until you sort through all the symptoms and get the root cause of the problem.
  4. …
  5. Root

Example:

You notice that one key workstation in the factory breaks down soon after the day shift begins. It seems to happen three or four times a week. And the machine is usually down about one hour for repairs.

  • Why? According to the technician, a 15-minute daily maintenance is scheduled on the night shift, but it’s not being done. Well, this can be easily fixed by telling the night shift technician that this maintenance must be completed every night. But you did it before, the problem goes away for a week and then it’s right back again. Because not meeting the maintenance schedule is only the symptom of the problem. It’s not the root cause, you must keep asking why.
  • Why was the maintenance not being done? Because the night shift operator runs the machine right to the end of the shift.
  • Why? Because the supervisor told him to do so.
  • Why? Because the supervisor is evaluated by the number of products completed during his shift.

The problem is caused by the way performance is evaluated. To permanently remove the root cause of the problem, the supervisor should also be evaluated for meeting equipment maintenance schedules. Collect some data about how much production is lost each day when the machine breaks down. And the factory manager will certainly approve this change.

Lean Quality Methods

Lean methods can reduce defects and improve your overall quality level. Lean is a systematic approach to eliminating waste and improving efficiency in a process.

Lean quality methods include:

  • Kaizen: Continuous, small improvements over time
    • The goal is to make small, incremental changes to a process over time, rather than making large, radical changes all at once.
    • Kaizen is a Japanese word that means “change for the better.”
    • Kaizen is a philosophy that encourages everyone in an organization to participate in continuous improvement.
  • Quality at the Source: Each employee inspects their own work
    • It catches defects before they happen, because each employee is inspecting for quality, and the minute a worker sees their output doesn’t meet standards, the workstation is shut down until the problem is fixed, no more defective products are make.
    • This is a great way to get employees involved in the quality process.
    • Quality at the source is a Japanese term called “jidoka.” Jidoka is a Japanese word that means “automation with a human touch.”
  • Poka-yoke: Preventing errors from happening
    • Mistake-proofing, or error-proofing, is a method of preventing defects by designing processes that make it impossible to make mistakes.
    • Poka-yoke is a Japanese word that means “mistake-proofing.”
    • Poka-yoke devices are simple, inexpensive devices that help prevent errors from occurring.
    • For example, a simple device that prevents a worker from inserting a part into a machine in the wrong way.

The Six Sigma Method

The goal of Six Sigma is to provide reliable products and consistent services to your customers. You’re not looking to eliminate all defects and errors, but to reduce the number of defects and errors to a level that is acceptable to your customers.

You accomplish this by following a very specific method for improving the quality of key processes within your business. The method is called DMAIC, which stands for:

  • Define: Define the problem and the goals of the project.
  • Measure: Measure the current performance of the process.
  • Analyze: Analyze the data to identify the root cause within the process.
  • Improve: Improve the process by implementing solutions to the root cause.
    • This is the most important step in the Six Sigma process. It’s where you actually make the changes to the process to improve quality.
    • Process improvements focus on three things:
      • Defects: You don’t want more than 3.4 defects per million opportunities.
      • Reducing Variability: All processes have some natural variation that’s acceptable, you’re working towards reducing inconsistencies and the natural result is fewer defects.
      • Strong emphasis on Your Customers: What does the customer think is critical to quality? Thanks to that customer focus.
  • Control: Control the process to ensure that the improvements are sustained.

Total Quality Management

Everyone is committed to managing and improving quality. Total Quality Management (TQM) is a management approach that focuses on continuous improvement and customer satisfaction. TQM is based on the idea that quality is everyone’s responsibility, and that everyone in the organization should be involved in the quality improvement process.

The American Society for Quality (ASQ) defines 8 principles of TQM:

  • Customer focus: The customer is the most important part of the process.
  • Leadership involvement: Leaders should create a culture of quality.
  • Involvement of people: Everyone should be involved in the quality process.
  • Process approach: A process is a series of steps that transform inputs into outputs.
  • System approach to management: A system is a set of interrelated processes.
  • Continual improvement: Continuous improvement is a never-ending process.
  • Factual approach to decision making: Decisions should be based on facts, not opinions.
  • Mutually beneficial supplier relationships: Suppliers are partners in the quality process.

Examples:

  • A company that manufactures car parts has a TQM program in place. The program includes regular training for employees on quality management principles, and encourages employees to identify and report quality issues. The company also has a system in place for tracking and analyzing quality data, and uses this data to make decisions about process improvements.
  • A hospital has a TQM program in place that focuses on patient safety and satisfaction. The program includes regular training for employees on quality management principles, and encourages employees to identify and report quality issues. The hospital also has a system in place for tracking and analyzing quality data, and uses this data to make decisions about process improvements.
  • …

Quality Strategies

The Voice of the Customer

The Voice of the Customer (VoC) is a term used to describe the needs and wants of customers. It is important to understand the VoC in order to develop products and services that meet customer needs.

Create a VoC program to gather customer feedback. The VoC program should include:

  • Collect information
    • Identify the target audience
    • Determine the best methods for gathering feedback
      • Surveys
      • Focus groups
      • Interviews
      • Social media
  • Analyze it
    • Identify trends and patterns in the data
    • Use statistical analysis tools to analyze the data
  • Act quickly
    • Implement changes based on the feedback
  • Keep an eye on results
    • Monitor the results of the changes
  • Others
    • Communicate the changes to customers
    • Continuously improve the VoC program
    • Repeat the process

Benchmarking

Benchmarking is the process of comparing your performance to the performance of competitors or industry leaders. It is a way to identify best practices and areas for improvement.

Benchmarking is really a question of:

  • Where am I?
  • Where do I want to be?
  • How do I get there?

The steps to benchmarking are:

  • Gather information on your own performance
    • Identify the key performance indicators (KPIs) that are important to your organization.
    • Collect data on your own performance in these areas.
  • Compare performance measurements

Benchmarking offers direction for your quality program. To stay ahead of your competition, this must be a continuous improvement effort. It can help you to close the gap with your competition.

Measuring the Cost of Quality

“If you can’t measure it, you can’t manage it.” - Peter Drucker (the father of modern management)

The measurement of quality gives you the starting point for your improvement project. But how do you measure quality? The cost of quality (CoQ) is a way to measure the cost of poor quality. It is a way to quantify the cost of defects and errors, and to identify areas for improvement.

The CoQ is divided into four categories:

  • Prevention costs: The costs associated with preventing defects and errors.
    • Examples: Training, process improvement, quality planning.
  • Appraisal costs: The costs associated with measuring and evaluating quality.
    • Examples: Inspection, testing, quality audits.
  • Internal failure costs: The costs associated with defects and errors that are discovered before the product is delivered to the customer.
    • Examples: Scrap, rework, re-inspection.
  • External failure costs: The costs associated with defects and errors that are discovered after the product is delivered to the customer.
    • Examples: Warranty claims, returns, lost sales.

Conclusion

Quality management is a systematic approach to ensuring that products and services meet customer expectations. It involves a combination of tools, techniques, and strategies to improve quality and reduce defects. By understanding the principles of quality management and implementing effective quality management programs, organizations can improve their performance and achieve excellence.

References