Discussion Question 11

It has been said the quality management is really a “people” system, more than technical system. If this is true, what conditions must first be in place for a firm to be successful with quality management? What are the possible repercussions for the firm if the employees are not committed to the quality management program? (125-150 words)

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Due: 9/19

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Chapter 6

Managing Quality

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Learning Objectives

6-1 Explain what the concepts of product quality
and quality management entail.

6-2 Explain the roles that operations and other
functional managers play in determining product
quality.

6-3 Apply the core values and typical practices
associated with quality management.

6-4 Perform a cost of quality analysis.

6-5 Apply the Six Sigma DMAIC approach to quality
improvement.

6-6 Compare and contrast various quality standards
and certification programs.

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Learning Objective 6-1

Brand Turnaround at Hyundai—What
Hyundai Did

1. Increased the number of workers on the quality control
team from 100 to more than 850.

2. Instituted mandatory seminars for all workers on the
importance of quality.

3. Invoked the direct involvement of its CEO in twice-
monthly meetings comparing Hyundai quality with that of
its rivals.

4. Made capital investments in problem areas, including $30
million invested in a computer center to test electronic
systems.

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Learning Objective 6-1

Brand Turnaround at Hyundai—Results of
Changes

1. Brand loyalty for Hyundai surpassed that of Honda
and Toyota to take the No. 1 spot.

2. Five Hyundai cars among Cars.com’s “Best Bets” for
safety, reliability, and fuel efficiency.

3. Sonata and Genesis models made Hyundai a strong
competitor in the luxury market, where excellent
quality is imperative.

4. In 2018 Hyundai and its sister company Kia averaged
122 and 124 problems per 100 vehicles, which
placed them in the top 10 for car quality.

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Learning Objective 6-1

Quality Definitions

• Product Quality: fitness for consumption in
meeting customers’ needs and desires

• Design Quality: match between designed
features and customer requirements

• Conformance Quality: meeting design
specifications

• Quality Management: organizationwide quality
focus

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Learning Objective 6-1

Dimensions of Quality for Goods and
Services

•

Quality

– Performance

– Features

– Reliability

– Durability

– Conformance

– Aesthetics

– Support/responsiveness

– Perceived quality

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Learning Objective 6-2

Functional Influences on Product Quality
(1 of 3)

Table 6-2 Functional Influences on Product Quality

Functional Personnel
Decisions and Activities with Potential Impact on Product

Quality

Marketing managers

Choices of market to pursue and product features to offer

Design of advertising and other programs that communicate
product attribute to customers

Development of new product testing programs

Sales managers

Setting of sales targets

Interactions with customers

Interpretations of customers’ needs and desires

Product engineers

Design of product specifications, service elements, dimensional
tolerances, etc.

Design of product prototyping procedures

Process engineers

Design of manufacturing and service processes

Choices of technology and associated capabilities and capacity
limits

Design of quality assurance tests and procedures

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Learning Objective 6-2

Functional Influences on Product Quality
(2 of 3)

Table 6-2 Functional Influences on Product Quality

Functional Personnel
Decisions and Activities with Potential Impact on Product

Quality

Finance and accounting
managers

Setting of restrictions for equipment purchases

Establishing goals for utilization of facilities and working capital

Design of measures used to assess efficiency and productivity

Human resources
managers

Design of hiring criteria and training and development programs

Setting of compensation schemes and incentives

Manufacturing and service
operations managers

Design and execution of processing procedures

Design of work policies

Interactions with customers

Management of facilities and equipment

Scheduling of work

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Learning Objective 6-2

Functional Influences on Product Quality
(3 of 3)

Table 6-2 Functional Influences on Product Quality

Functional Personnel
Decisions and Activities with Potential Impact on

Product Quality

Supply managers

Description of purchase requirements

Selection of suppliers

Establishment of contracts and associated incentives and
penalties

Management of and interactions with suppliers

Logistics managers

Selection of transportation providers

Development of tracking and other information systems

Design of packaging, storage, and material handling
processes

Management of and interaction with transportation providers

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Learning Objective 6-2

Student Activity (1 of 3)

Ask a marketing professor, a supply chain
operations professor, a finance professor, and
an engineering professor to give you their
definitions of product quality. Compare and
contrast the definitions you receive.

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Learning Objective 6-3

Quality Thought Leaders (1 of 2)

• Deming

– Holistic view of responsibility for quality

– Variability as source of most problems

– Importance of customer

• Juran

– Broadened definition of quality

– Focus on change management

– Cost of quality analysis

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Learning Objective 6-3

Quality Thought Leaders (2 of 2)

• Crosby

– Quality is free

– Zero defects

– Focus on incremental change

• Imai

– Kaizen system of continuous improvement

– Intense process-oriented view

– Heavy dependence on frontline worker insights

– Emphasis on worker training and development

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TQM: A “Total” View of Quality

Total Quality Management (TQM): an integrated
business management strategy aimed at embedding
awareness of quality. The word total has important
connotations:

1. A product’s quality is determined by customer’s
acceptance and use

2. Quality management is a total, organizationwide
activity, rather than a technical task

3. Quality improvement requires a total commitment
from all employees

Learning Objective 6-3

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Learning Objective 6-4

Cost of Quality (COQ)

• Prevention Costs

– Costs associated with preventing defects and limiting failure
and appraisal costs (e.g., training, improvement projects,
data gathering, analysis)

• Appraisal Costs

– Costs associated with inspection to assess quality levels (e.g.,
staff, tools, training, etc.)

• Internal Failure Costs

– Costs from defects found before delivery to the customer
(e.g., rework, scrap, etc.)

• External Failure Costs

– Costs associated with defects found after delivery to customer
(e.g., warranty, recall, etc.)

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Learning Objective 6-4

Inverted View of Management

Figure 6-1 Traditional versus Quality Management View of
Organizational Structure

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Learning Objective 6-4

TQM Values and Success Factors

Table 6-4 TQM Values and Success Factors

Values that Characterize TQM Factors Affecting the Success of TQM

Holistic view of product quality
and its impacts Strong, charismatic leadership

Emphasis on customer
requirements

Trust between labor and management

Extended process view of
operations

Crisis situation or compelling reason for change

Emphasis on prevention rather
than inspection

Adequate resourcing of training and improvement projects

Disdain for variability Clear, well communicated, uncomplicated change process

Data-based decision making (not
opinion-based)

Unquestionable success of early efforts

Employee empowerment

Top management support

Supplier involvement

Continuous improvement

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Quality Goes Digital

• Walmart is using the Internet of Things and
blockchain to provide visibility of food quality

• Digital developments are changing the cost of
quality by raising the cost of external failures

• Using social media, one can post experiences to
be read by many viewers

Learning Objective 6-4

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Student Activity (2 of 3)

Search various social media sites and see if
you can find posts that address the four
different costs included in the cost of quality
framework. What is interesting about these
postings? How would these postings affect
you as a potential customer?

Learning Objective 6-4

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Learning Objective 6-5

Guiding Methodologies: PDCA

Figure 6-2 PDCA in Action

Plan: identify problem and actions for improvement

Do: implement formulated plan

Check: monitor results

Act: take corrective action and institutionalize changes

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Learning Objective 6-5

Guiding Methodologies: Six Sigma (1 of 3)

• Six Sigma: quality improvement through
elimination of defects and variation

• Standard Deviation: statistical measure of
variation

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Learning Objective 6-5

Guiding Methodologies: Six Sigma (2 of 3)

Table 6-5 How Quality Relates to Sigma

Sigma Level
Defects per Million

Units

2σ 308,770

3σ 66,810

4σ 6,209

5σ 233

6σ 3.4

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Learning Objective 6-5

Guiding Methodologies: Six Sigma (3 of 3)

Figure 6-3 The DMAIC Process
Source: Copyright © 2009 Dynamic Diagrams.

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Student Activity (3 of 3)

For a candy such as M&Ms, identify the
important critical-to-quality characteristics.
How would you measure these
characteristics objectively? Which of these
measures pertain to the physical product
itself? Which of these measures relate to the
packaging or the services surrounding the
good?

Learning Objective 6-5

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Learning Objective 6-5

Guiding Methodologies: DMAIC

DMAIC example: See the cough drop production DMAIC
example in your text

• Define: determine critical-to-quality (CTQ) characteristics
from customer’s perspective

• Measure: gather data on CTQ processes

• Analyze: determine cause of defects

• Improve: modify processes

• Control: ensure improvements are maintained

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Learning Objective 6-6

Guiding Methodologies: ISO 9000

• ISO 9000: internationally accepted standards for
business quality management systems

• ISO 9000 requires:

– fulfilling the customer’s quality requirements, and

– meeting applicable regulatory requirements, while

– enhancing customer satisfaction, and

– achieving continuous improvement of its
performance in pursuit of these objectives

http://www.iso.org

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Learning Objective 6-6

The ISO 9001: 2015 Certification Structure (1 of 3)

Table 6-6 The ISO 9001: 2015 Certification Structure

Section Focus/Description

4 Context of the organization

4.1 Understanding the organization and its context.

4.2
Understanding the needs and expectations of interested
parties.

4.3 Determining the scope of the quality management system.

4.4 Quality management system and its processes.

5 Leadership

5.1 Leadership and commitment.

5.2 Policy.

5.3 Organizational roles, responsibilities, and opportunities.

6 Planning

6.1 Actions to address risks and opportunities.

6.2 Quality objectives and planning to achieve them.

6.3 Planning of changes.

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Learning Objective 6-6

The ISO 9001: 2015 Certification Structure (2 of 3)

Table 6-6 The ISO 9001: 2015 Certification Structure

Section Focus/Description

7 Support

7.1 Resources.

7.2 Competence.

7.3 Awareness.

7.4 Communication.

7.5 Documented information.

8 Operation

8.1 Operational planning and control.

8.2 Requirements for products and services.

8.3 Design and development of products and services.

8.4
Control of externally provided processes, products, and
services.

8.5 Production and service provision.

8.6 Release of products and services.

8.7 Control nonconforming outputs.

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Learning Objective 6-6

The ISO 9001: 2015 Certification Structure (3 of 3)

Table 6-6 The ISO 9001: 2015 Certification Structure

Section Focus/Description

9 Performance evaluation

9.1 Monitoring, measurement analysis, and evaluation.

9.2 Internal audit.

9.3 Management review.

10 Improvement

10.1 General

10.2 Nonconformity and corrective action.

10.3 Continual improvement.

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Managing Quality Summary

1. Quality management strives to achieve superior
quality.

2. It is important to integrate quality management into
the firm’s strategic activities.

3. Formal certifications confirm that a firm’s major
processes have been documented and followed.

4. Many firms use award guidelines to assess the
performance of their quality management systems.

5. Service quality management must take into
consideration the interpersonal interactions of service
providers and customers.

6. Core TQM values are the critical aspects to make
quality improvement a success.