Session 5

Quality Management

Basic Quality Concepts

What is Quality?

‘Degree to which a set of inherent

characteristics fulfils requirements’

ISO 9000:2005
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 Basic Quality Concepts

What is ‘Grade’ ?

‘The category or rank given to different quality

requirements for products, processes or systems
having the same functional use’

ISO 9000:2005
Session 5 Quality Management

Basic Quality Concepts

Quality
Conformance with
users’ requirements
Relative
Moving
target

Higher quality of
Higher grade conformance

Higher cost Lower cost

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 How Quality is achieved

Customer

Product Service Marketing

Packaging and Shipping Product Engineering

Inspection and Test Purchasing

Manufacturing Manufacturing Engineering

Session 5 Quality Management

Basic Quality Concepts

High cost of “hidden plant”

Customer

Concept of Everyone in the

Triple role Processor
organization is:

Supplier

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 The Quality Chain

SC upplier

SC
SC Organization

SC
SC ustomer

Session 5 Quality Management

Evolution of Quality Management

Quality
Management

Quality
Assurance
Evolution

Quality Control

Inspection

1880 1900 1920 1940 1960 1980 2000 2020

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 What is ‘Quality Management’ ?

‘Coordinated activities to direct and

control an organization
with regard to quality’

ISO 9000:2005
Session 5 Quality Management

Deming’s PDCA cycle

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Illustration of gain in productivity with improved quality (1)

Session 5 Quality Management

Illustration of gain in productivity with improved quality (2)

Before improvement After improvement

Item 11% defective 5% defective

Total cost 100 100

Spent to make 89 95
good units
Spent to make 11 5
defective units

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 Deming’s Chain Reaction

Improve Improve Decrease

Quality Productivity Costs

Decrease Increase Stay in

Prices Market Business

Provides
jobs and Return on
more jobs Investment

Session 5 Quality Management

Quality Cost (1)

Prevention costs
¾Quality planning Appraisal costs
¾Supplier capability
surveys ¾Inspection
¾Quality improvement ¾Testing
meetings/projects ¾Audits
¾Quality education
¾Training
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 Quality Cost (2)
Internal failure costs
External failure costs
¾Scrap
¾Re-inspection ¾Customer complaints
¾Re-testing ¾Customer returns
¾Rework ¾Product recalls
¾Downgrading ¾Guarantees
¾Material review ¾Allowances

‘Hidden’ Quality Cost

Session 5 Quality Management

External
Costs of Poor Quality

Failures
2%
Quality Costs (11%)

PROFITS
(6%)

Internal
RESEARCH

Failures
4%

Inspection
3% An example of
quality cost
Prevention figures
2%

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 Product Quality = Fitness for use
as seen by the user

Do we deliver products which Do we deliver quality products

Company success
satisfy customer needs? in an economical way?

Quality Audit Quality Costs

Clarifying and Classifying defects Clarifying and Dividing Quality Costs

in products : 1. Critical defects in four groups: 1. Preventive costs
2. Major defects 2. Appraisal costs
3. Minor defects 3. Internal failure costs
4. External failure costs
Objectives, goals and operations
for eliminating defects
Objectives, goals and operations
for minimizing quality costs
Larger volume of sales and
higher prices Lower production costs

Product Quality: A way to customer satisfaction and company success

Session 5 Quality Management

Quality Problems
• 40/30/30 rule of Japanese

40% of quality problems • Poor product design and

engineering
30% of quality problems • Errors made during the
manufacturing process
30% of quality problems • Nonconforming materials
purchased from suppliers
• 85/15 rule

85% of quality problems • Responsibility of managers

(system problems)
15% of quality problems • Responsibility of workers
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 Statistical Process Control (1)

Can we make it OK? CAPABILITY

Are we making it OK? CONTROL

Have we made it OK? Q.ASSURANCE

Could we make it better? Q.IMPROVEMENT

Session 5 Quality Management

Statistical Process Control (2)

Control charts

Special causes
Common causes

WORKERS MANAGERS/
SUPERVISORS

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 Quality Improvement (1)

Improved production of stockings

Session 5 Quality Management

Quality Improvement (2)

Charts for three Operators
Excellent
operator
Per cent defective

Management
policy with
respect to
examination
of eyes

Proper
instructions
about
looping

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 Quality Improvement (3)

Improved production of stockings

Session 5 Quality Management

Control vs. Improvement

Sporadic
Level of waste

Quality
Spike Improve-
ment

Original zone of
quality control

New zone
of quality
control

Time

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 Human Aspects of Quality

9Treat workers decently and fairly

9Believe in the capability of your workers
9Adopt a factual approach to decision-making
9Establish quality circles and
encourage teamwork
9Empower your workers
9Make everyone implement the
concept of triple role
Session 5 Quality Management

Management System Standards

•Consistency in product quality

ISO 9000 •Minimizes non-conforming products
•Continual improvement
•Control of food safety hazards
ISO 22000 •Safety of food at the time of
human consumption
•New approach to environmental
ISO 14000 protection (based on prevention)
•Continual improvement
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 ISO 9000 series of standards

• ISO 9000 QMS - Fundamentals and vocabulary

• ISO 9001 QMS – Requirements
• ISO 9004 QMS - Guidelines for performance
improvements
• ISO 19011 Guidelines on quality and/or
environmental auditing

Generic in nature Applicable to all sectors

(manufacturing and service) and organizations
Session 5 Quality Management

Quality Management

Customer Involvement
focus Leadership of people
Process
approach
Mutually beneficial Main
le s
supplier relationships princip

Systems approach
to management
Factual approach
to decision making Continual
improvement

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 Continual improvement of the
Quality management system

Customers Management
responsibility Customers

Resource Measurement,
management analysis and Satis-
improvement faction

Require- Product Product

ments realization
Input Output
Value-adding activities
Information flow
Model of a process-based quality management system
Session 5 Quality Management

ISO 9000 series of Standards

Specifies WHAT is to be done
Not HOW it should be done

Control of Corrective
documents action
Documented Preventive
Control of procedures action
records
Control of
Internal nonconforming
audits product
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 ISO 9000 QMS setup (1)

Step 1: Evaluate the organization’s need and goals

for implementing a QMS

Step 2: Obtain information about the

ISO 9000 family

Step 3: Appoint a consultant if necessary

Step 4: Awareness and training

Session 5 Quality Management

ISO 9000 QMS setup (2)

Step 5: Gap analysis

Step 6: Product realization processes

Step 7: Staffing

Step 8: Planning a time-frame

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 ISO 9000 QMS setup (3)

Step 9: Draft a quality manual

Step 10: Carry out internal audits

Step 11: Apply for certification

Step 12: Conduct periodic evaluation

Session 5 Quality Management

ISO 9000 Certification

¾Implementation of an ISO 9000 QMS and/or

certification is
-Voluntary
-Requirement of some buyers
-A means of compliance with regulatory requirements
which specify a QMS
¾End of 2005: at least 776,608 ISO 9001:2000
certificates had been issued in 161 countries

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 Common problems in implementing ISO 9000 (1)
Lack of Inappropriate
top management documentation
commitment
Continual
Inadequate improvement not
internal audit implemented

ISO 9000 not Lack of

integrated in company information &
operations training
Session 5 Quality Management

Common problems in implementing ISO 9000 (2)

Inadequate Inadequate
consultancy or costly calibration
services

Resistance to
change

Lack of High cost of

proper planning certification

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 Cost of implementing ISO 9000 QMS
Direct costs Indirect costs
•Time spent in
•Hiring consultants developing the system
or trainers •Reorganization/impro-
•Send personnel for vement of the process
external training •External calibration
•Acquiring standards charges
•Acquiring additional •Time spent by internal
equipm., instrum. auditors
and resources •Corrective actions
•Preventive actions
Session 5 Quality Management

Benefits of ISO 9000 QMS (1)

Internal Benefits
•Improved management commitment and
customer focus
•Better working conditions for employees
•Increased motivation of employees
•Reduced cost of internal failures and external
failures
•Continual improvement of the
quality management system
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 Benefits of ISO 9000 QMS (2)

External Benefits

•Improved customer satisfaction

•Improved image of the organization
•More confidence that company’s products meet
regulatory requirements
•Better objective evidence to defend
product liability charges

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