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Quality management

 
Business Encyclopedia: Quality Management
 
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Quality management (QM), also called total quality management (TQM), evolved from many different management practices and improvement processes. Quality management is not specific to managing people, but rather is related to improving the quality of goods and services that are produced in order to satisfy customer demands. Quality management permeates the entire organization as it is being implemented.

TQM has its roots in the quality movement that has made Japan such a strong force in the world economy. The Japanese philosophy of quality initially emphasized product and performance and only later shifted concern to customer satisfaction.

The quality improvement movement began in both the United States and Japan before World War II. Throughout the war, Americans continued to improve concepts related to manufacturing productivity. After the war, the Japanese pursued the idea of quality improvement. It was W. Edwards Deming, an American, who helped the Japanese focus on their fixation with quality.

Rather than trying to inspect the quality of products and services after they have been completed, TQM instills a philosophy of doing the job correctly the first time. It all sounds simple, but implementing the process requires an organizational culture and climate that are often alien and intimidating. Changes that must occur in the organization are so significant that it takes time and patience to complete the process. Just as the process does not occur overnight, the results may not be seen for a long period of time. Some experts say that it takes up to ten years to fully realize the results of implementing quality management.

The Process

There are several steps that must be taken in the process of shifting to quality management in an organization:

  1. Provide a QM environment. A QM environment is one in which the management-driven culture disappears and a participative culture takes its place. The basic tenets of QM are that employees must be involved and that there must be teamwork. Managers must be willing to involve workers in the decision-making process. Workers who function as a team have much more to offer collectively than do individual workers. Pooled resources are more valuable than just one person's contribution.
  2. Modify reward systems. Reward systems need to be overhauled so as to recognize and encourage teamwork and innovation. The team, not the individual, is the foundation for TQM companies. If a company continues to use traditional compensation plans that create competition between workers, the team concept cannot be implemented. Traditional pay plans are often based on seniority, not on quality and performance. With QM, pay systems focus on team incentives. Each person is paid based on the team's performance. If one person on the team doesn't perform at the level expected, the team members will normally handle the situation. In some cases, payment is based on the performance of the entire company, which requires an even greater team effort.
  3. Prepare workers for TQM. Workers must constantly be trained with the tools that are needed to upgrade the company's quality. Workers must understand the philosophy of QM before the tools can be used effectively. Managers must be dedicated to transforming their companies into "learning organizations" in which workers want to upgrade their skills and take advantage of the opportunities and incentives to do so. Companies that are successful with TQM allocate up to about 5 percent of their employees' time on training. Some of this training time might include cross-training, that is, schooling workers in the skills to do a different job in the organization.
  4. Prepare employees to measure quality. To ensure gains in quality, the results must be measured objectively as the company progresses toward its quality objectives. This requires that employees be trained to use statistical process control techniques. Without knowledgeable workers using quantitative tools, the organization cannot achieve the intended TQM results.
  5. Identify the appropriate starting place. One of the most difficult tasks in the beginning phases of implementing QM is to determine where to start. One approach to this beginning is to assume that 80 percent of all the company's problems stem from 20 percent of the company's processes (Pareto's Law). By identifying the problematic processes that fall in this 20 percent category, one can begin to focus on what needs attention first. Focusing attention on these problems first will return bigger payoffs and build momentum for the future.
  6. Share information with everyone. If a team approach is to be used and if employees are expected to be involved in the decision-making process, it is imperative that information be shared with everyone. The decision-making process requires that workers be fully informed.
  7. Include quality as an element of design. From beginning to end, customer satisfaction should be the focus of the quality management system. That means that the goal of customer satisfaction must be included in the planning processes and then maintained day in and day out.
  8. Make error prevention the norm. One approach to producing quality products is to have a group of inspectors who will find the defective items and get rid of them. This is not the QM approach. With QM, the approach is continuous improvement of quality to assure that there are no products that are defective. The quality is built into the manufacturing process, and workers are continually improving products and processes. This approach is more cost-effective for the organization because it eliminates the waste of materials and workers' time.
  9. Encourage cooperation and teamwork. If mistakes are made, it is the fault of a team of workers, not just one worker. In many organizations that do not use TQM, managers are often on the hunt for someone to blame for problems that are found. This type of environment creates unhealthy stress and discourages innovative thought and practices by workers. The combination of a team approach and QM means seeking to improve the system when problems arise.
  10. Make continuous improvement the goal. Processes and products should continually be improved. There is no end to the improvement process. This is true for even the best of the best companies. Total quality management never ends.

W. Edwards Deming created fourteen points for management, which are condensed on the Website of the Deming Institute (http://www.deming.org/deminghtml/teachings/html) and adapted here:

  1. Create constancy of purpose toward improvement of product and service, with the aim to become competitive, to stay in business, and to provide jobs.
  2. Adopt a new philosophy. We are in a new economic age. Western management must awaken to the challenge, must learn their responsibilities, and must take on leadership for change.
  3. Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place.
  4. End the practice of awarding business on the basis of the price tag. Instead, minimize total cost. Move toward a single supplier for any one item, based on a long-term relationship of loyalty and trust.
  5. Improve constantly and forever the system of production and service, in order to improve quality and productivity, and thus constantly decrease costs.
  6. Institute training on the job.
  7. Institute leadership. The aim of supervision should be to help people, machines, and gadgets to do a better job. Supervision of management is in need of overhaul, as is supervision of production workers.
  8. Drive out fear, so that everyone may work effectively for the company.
  9. Break down barriers between departments. People in research, design, sales, and production must work as a team, in order to foresee problems in production and in use that may be encountered with the product or service.
  10. Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, since the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force. Eliminate work standards (quotas) on the factory floor, substituting leadership. Eliminate management by objective, by numbers, and by numeric goals, also substituting leadership.
  11. Remove barriers that rob hourly workers of their right to pride of workmanship. The goals of supervisors must be changed from sheer numbers to quality.
  12. Remove barriers that rob people in management and in engineering of their right to pride of workmanship. This means, interalia, abolishment of the annual or merit rating and of management by objective.
  13. Institute a vigorous program of education and self-improvement.
  14. Put everybody in the company to work to accomplish the transformation. The transformation is everybody's job.

It is readily apparent that the process of implementing a quality management system in an organization is closely aligned with the thinking of Deming. A more detailed description of the Deming approach is found in his publication Out of Crisis (1986).

Recognition

The importance of quality is emphasized with the awards that are presented to companies that achieve high standards of quality. The Malcolm Baldridge National Quality Award was one of the first given. The 1991 award application identified several categories that companies must address to receive the award. It must be noted that very few awards are presented. Companies are rated on leadership, information and analysis, strategic quality planning, human resources utilization, quality assurance of products and services, quality results, and customer satisfaction. It is a very prestigious honor for a company to be recognized with this award.

Other awards and certifications are also presented. However, they constantly change and new ones are added regularly, so they will not be discussed here. Quality management has become an important philosophy in businesses around the world, and this approach to building better products and services will continue.

Bibliography

Deming, W. Edwards. (1986). Out of Crisis. W. Edwards Deming Institute.

Saylor, James H. (1992). TQM Field Manual. New York: McGraw-Hill.

Scarborough, Norman M., and Zimmerer, Thomas W. (2000). Effective Small Business Management: An Entrepreneurial Approach. Upper Saddle River. NJ: Prentice Hall.

Svenson, Ray, Wallace, K., Wexler, G., and Wexler, Bruce. (1994). The Quality Roadmap: How to Get Your Company on the Quality Track And Keep it There. New York: AMACOM.

Weiss, Alan. (2000). "Good Enough" Isn't Enough… Nine Challenges for Companies That Choose to Be Great. New York: AMACOM.

[Article by: ROGER LUFT]

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Wikipedia: Quality management
 
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Quality management can be considered to have three main components: quality control, quality assurance and quality improvement. Quality management is focused not only on product quality, but also the means to achieve it. Quality management therefore uses quality assurance and control of processes as well as products to achieve more consistent quality.

Contents

Quality management evolution

Quality management is a recent phenomenon. Advanced civilizations that supported the arts and crafts allowed clients to choose goods meeting higher quality standards than normal goods. In societies where art and craft (and craftsmanship) were valued, one of the responsibilities of a master craftsman (and similarly for artists) was to lead their studio, train and supervise the work of their craftsmen and apprentices. The master craftsman set standards, reviewed the work of others and ordered rework and revision as necessary. One of the limitations of the craft approach was that relatively few goods could be produced, on the other hand an advantage was that each item produced could be individually shaped to suit the client. This craft based approach to quality and the practices used were major inputs when quality management was created as a management science.

During the industrial revolution, the importance of craftsmen was diminished as mass production and repetitive work practices were instituted. The aim was to produce large numbers of the same goods. The first proponent in the US for this approach was Eli Whitney who proposed (interchangeable) parts manufacture for muskets, hence producing the identical components and creating a musket assembly line. The next step forward was promoted by several people including Frederick Winslow Taylor a mechanical engineer who sought to improve industrial efficiency. He is sometimes called "the father of scientific management." He was one of the intellectual leaders of the Efficiency Movement and part of his approach laid a further foundation for quality management, including aspects like standardization and adopting improved practices. Henry Ford also was important in bringing process and quality management practices into operation in his assembly lines. In Germany, Karl Friedrich Benz, often called the inventor of the motor car, was pursuing similar assembly and production practices, although real mass production was properly initiated in Volkswagen after world war two. From this period onwards, North American companies focused predominantly upon production against lower cost with increased efficiency.

Walter A. Shewhart made a major step in the evolution towards quality management by creating a method for quality control for production, using statistical methods, first proposed in 1924. This became the foundation for his ongoing work on statistical quality control. W. Edwards Deming later applied statistical process control methods in the United States during World War II, thereby successfully improving quality in the manufacture of munitions and other strategically important products.

Quality leadership from a national perspective has changed over the past five to six decades. After the second world war, Japan decided to make quality improvement a national imperative as part of rebuilding their economy, and sought the help of Shewhart, Deming and Juran, amongst others. W. Edwards Deming championed Shewhart's ideas in Japan from 1950 onwards. He is probably best known for his management philosophy establishing quality, productivity, and competitive position. He has formulated 14 points of attention for managers, which are a high level abstraction of many of his deep insights. They should be interpreted by learning and understanding the deeper insights and include:

  • Break down barriers between departments
  • Management should learn their responsibilities, and take on leadership
  • Improve constantly
  • Institute a programme of education and self-improvement

In the 1950s and 1960s, Japanese goods were synonymous with cheapness and low quality, but over time their quality initiatives began to be successful, with Japan achieving very high levels of quality in products from the 1970s onward. For example, Japanese cars regularly top the J.D. Power customer satisfaction ratings. In the 1980s Deming was asked by Ford Motor Company to start a quality initiative after they realized that they were falling behind Japanese manufacturers. A number of highly successful quality initiatives have been invented by the Japanese (see for example on this page: Taguchi, QFD, Toyota Production System. Many of the methods not only provide techniques but also have associated quality culture (i.e. people factors). These methods are now adopted by the same western countries that decades earlier derided Japanese methods.

Customers recognize that quality is an important attribute in products and services. Suppliers recognize that quality can be an important differentiator between their own offerings and those of competitors (quality differentiation is also called the quality gap). In the past two decades this quality gap has been greatly reduced between competitive products and services. This is partly due to the contracting (also called outsourcing) of manufacture to countries like India and China, as well internationalization of trade and competition. These countries amongst many others have raised their own standards of quality in order to meet International standards and customer demands. The ISO 9000 series of standards are probably the best known International standards for quality management.

There are a huge number of books available on quality. In recent times some themes have become more significant including quality culture, the importance of knowledge management, and the role of leadership in promoting and achieving high quality. Disciplines like systems thinking are bringing more holistic approaches to quality so that people, process and products are considered together rather than independent factors in quality management.

The influence of quality thinking has spread to non-traditional applications outside of walls of manufacturing, extending into service sectors and into areas such as sales, marketing and customer service[1].

Quality improvement

There are many methods for quality improvement. These cover product improvement, process improvement and people based improvement. In the following list are methods of quality management and techniques that incorporate and drive quality improvement—

  1. ISO 9004:2000 — Guidelines for performance improvement.
  2. ISO 15504-4: 2005 — Information technology — Process assessment — Part 4: Guidance on use for process improvement and process capability determination.
  3. QFD — Quality Function Deployment, also known as the House of Quality approach.
  4. Kaizen — 改善, Japanese for change for the better; the common English usage is continual improvement.
  5. Zero Defect Program — created by NEC Corporation of Japan, based upon Statistical Process Control and one of the inputs for the inventors of Six Sigma.
  6. Six Sigma — 6σ, Six Sigma combines established methods such as Statistical Process Control, Design of Experiments and FMEA in an overall framework.
  7. PDCA — Plan, Do, Check, Act cycle for quality control purposes. (Six Sigma's DMAIC method (Design, Measure, Analyze, Improve, Control) may be viewed as a particular implementation of this.)
  8. Quality circle — a group (people oriented) approach to improvement.
  9. Taguchi methods — statistical oriented methods including Quality robustness, Quality loss function and Target specifications.
  10. The Toyota Production System — reworked in the west into Lean Manufacturing.
  11. Kansei Engineering — an approach that focuses on capturing customer emotional feedback about products to drive improvement.
  12. TQM — Total Quality Management is a management strategy aimed at embedding awareness of quality in all organizational processes. First promoted in Japan with the Deming prize which was adopted and adapted in USA as the Malcolm Baldrige National Quality Award and in Europe as the European Foundation for Quality Management award (each with their own variations).
  13. TRIZ — meaning "Theory of inventive problem solving"
  14. BPR — Business process reengineering, a management approach aiming at 'clean slate' improvements (That is, ignoring existing practices).

Proponents of each approach have sought to improve them as well as apply them to enterprise types not originally targeted. For example, Six Sigma was designed for manufacturing but has spread to service enterprises. Each of these approaches and methods has met with success but also with failures.

Some of the common differentiators between success and failure include commitment, knowledge and expertise to guide improvement, scope of change/improvement desired (Big Bang type changes tend to fail more often compared to smaller changes) and adaption to enterprise cultures. For example, quality circles do not work well in every enterprise (and are even discouraged by some managers), and relatively few TQM-participating enterprises have won the national quality awards.

There has been well publicized failures of BPR, as well as Six Sigma. Enterprises therefore need to consider carefully which quality improvement methods to adopt, and certainly should not adopt all those listed here.

It is important not to underestimate the people factors, such as culture, in selecting a quality improvement approach. Any improvement (change) takes time to implement, gain acceptance and stabilize as accepted practice. Improvement must allow pauses between implementing new changes so that the change is stabilized and assessed as a real improvement, before the next improvement is made (hence continual improvement, not continuous improvement).

Improvements that change the culture take longer as they have to overcome greater resistance to change. It is easier and often more effective to work within the existing cultural boundaries and make small improvements (that is Kaizen) than to make major transformational changes. Use of Kaizen in Japan was a major reason for the creation of Japanese industrial and economic strength.

On the other hand, transformational change works best when an enterprise faces a crisis and needs to make major changes in order to survive. In Japan, the land of Kaizen, Carlos Ghosn led a transformational change at Nissan Motor Company which was in a financial and operational crisis. Well organized quality improvement programs take all these factors into account when selecting the quality improvement methods.

Quality standards

The International Organization for Standardization (ISO) created the Quality Management System (QMS) standards in 1987. They were the ISO 9000:1987 series of standards comprising ISO 9001:1987, ISO 9002:1987 and ISO 9003:1987; which were applicable in different types of industries, based on the type of activity or process: designing, production or service delivery.

The standards are reviewed every few years by the International Organization for Standardization. The version in 1994 was called the ISO 9000:1994 series; comprising of the ISO 9001:1994, 9002:1994 and 9003:1994 versions.

The last major revision was in the year 2000 and the series was called ISO 9000:2000 series. The ISO 9002 and 9003 standards were integrated into one single certifiable standard: ISO 9001:2000. After December 2003, organizations holding ISO 9002 or 9003 standards had to complete a transition to the new standard.

ISO released a minor revision, ISO 9001:2008 on 14 October 2008. It contains no new requirements. Many of the changes were to improve consistency in grammar, facilitating translation of the standard into other languages for use by over 950,000 certified organisations in the 175 countries (as at Dec 2007) that use the standard.

The ISO 9004:2000 document gives guidelines for performance improvement over and above the basic standard (ISO 9001:2000). This standard provides a measurement framework for improved quality management, similar to and based upon the measurement framework for process assessment.

The Quality Management System standards created by ISO are meant to certify the processes and the system of an organization, not the product or service itself. ISO 9000 standards do not certify the quality of the product or service.

In 2005 the International Organization for Standardization released a standard, ISO 22000, meant for the food industry. This standard covers the values and principles of ISO 9000 and the HACCP standards. It gives one single integrated standard for the food industry and is expected to become more popular in the coming years in such industry.

ISO has also released standards for other industries. For example Technical Standard TS 16949 defines requirements in addition to those in ISO 9001:2008 specifically for the automotive industry.

ISO has a number of standards that support quality management. One group describes processes (including ISO 12207 & ISO 15288) and another describes process assessment and improvement ISO 15504.

The Software Engineering Institute has its own process assessment and improvement methods, called CMMi (Capability Maturity Model — integrated) and IDEAL respectively.

Quality terms

  • Quality Improvement can be distinguished from Quality Control in that Quality Improvement is the purposeful change of a process to improve the reliability of achieving an outcome.
  • Quality Control is the ongoing effort to maintain the integrity of a process to maintain the reliability of achieving an outcome.
  • Quality Assurance is the planned or systematic actions necessary to provide enough confidence that a product or service will satisfy the given requirements for quality.

Academic resources

  • International Journal of Productivity and Quality Management, ISSN 1746-6474, Inderscience
  • International Journal of Quality & Reliability Management, ISSN: 0265-671X, Emerald Publishing Group

See also

External links

References

  1. ^ Paul H. Selden (December 1998). "Sales Process Engineering: An Emerging Quality Application". Quality Progress: 59-63. 
  • Pyzdek, T, "Quality Engineering Handbook", 2003, ISBN 0824746147
  • Godfrey, A. B., "Juran's Quality Handbook", 1999, ISBN 007034003
  • Process Assessment and Improvement ISBN 0-387-23182-X
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Business Encyclopedia. Encyclopedia of Business and Finance. Copyright © 2001 by The Gale Group, Inc. All rights reserved.  Read more
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