Chapter 09 – Management of Quality
CHAPTER 09
MANAGEMENT OF QUALITY
Teaching Notes
This chapter is devoted to quality management. It presents a definition of quality, discusses the
importance of quality and the determinations of quality, highlights the views of leading experts on
modern quality management, and describes the total quality management approach. A later chapter is
devoted to quality control procedures and quality improvement.
Total Quality Management (TQM) is a popular approach that:
1. Promotes understanding and fulfilling the needs of customers.
2. Defines quality in terms of customer requirements.
3. Views quality improvement as a never-ending quest to improve the process.
4. Uses statistical reasoning with data to solve problems and to improve the process.
5. Emphasizes the role of leadership systems in improving quality.
6. Utilizes appropriate education and training for everyone in the organization in a continuous
fashion.
7. Views quality as not only a technical operational issue but also views it from a strategic
orientation that leads to enhanced long-term planning.
8. Encourages empowerment of the employees in the workplace to improve job design, job
performance, and continuous improvement in all aspects of the organization.
TQM is an approach that views quality improvement as a never-ending quest to improve the
conversion process so that the level of customer satisfaction continually rises. Because the Japanese
have been so successful in continuously improving the quality of their products and services, Kaizen,
or continuous improvement, has become an extremely popular and widely accepted managerial
approach to improve quality on a daily basis. The old adage, “if it ain’t broke, don’t fix it,” has a rather
hollow ring to it these days. A more appropriate message today would be “just because it ain’t broke
doesn’t mean it can’t be improved.”
The material in this chapter is divided into the following major topics:
1. Overview of TQM
2. Problem Solving
3. Continuous Process Improvement
4. Seven Quality Tools
a. Check Sheets
b. Flowcharts
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2. Design quality refers to the intention of designers to include or exclude certain features in a
3. a. The reputation and image of an organization will suffer from poor quality products or
services.
b. Organizations must pay special attention to their potential liability due to damages or
4.
Dimension
Television Set
Performance
On/off, sound, color, and picture
Aesthetics
Shiny black cabinet
Special features
Remote control, inset picture, and stereo sound
Conformance
Conforms to design specifications for size, pixels, etc.
Reliability
Infrequency of breakdowns and repair work
Durability
Useful life in terms of time and use
Perceived quality
UL approved and high Consumer Reports rating
Serviceability
Handling of complaints, requests for information, and repair
work (cost, time, reliability, courtesy, and trust)
Consistency
Quality of each set does not vary
Dimension
Restaurant Meal (Product)
Performance
Taste, smell, color, arrangement of food, cleanliness, and
tableware
Aesthetics
Looks appetizing
Special features
Specialties of the house: wines, cocktails, desserts, etc.
Conformance
Meets or exceeds customer expectations
Reliability
Meals are consistently delicious and cooked properly
Durability
Meal ingredients maintain freshness and flavor
Perceived quality
Appearance of meal leads customers to believe food is good
Serviceability
Complaints handled quickly
Consistency
Quality of each meal does not vary
Chapter 09 – Management of Quality
Dimension
Restaurant Meal (Service)
Convenience
Easy entry into facility and available hours meet customer
needs
Reliability
Servers take and serve orders dependably, consistently, and
accurately
Responsiveness
Servers are able to handle special meal and drink requests
and to take care of problems quickly
Time
Meals are cooked and served quickly
Assurance
Servers are knowledgeable about all menu items
Courtesy
Servers and managers treat customers with respect
Tangibles
Facility is clean, equipment is in good working order, and
servers are dressed properly and have good hygiene
Consistency
The restaurant consistently serves good food
Expectations
The restaurant consistently meets or exceeds customer
expectations
Dimension
Painting a House (Service)
Convenience
Painters are able to work around homeowner’s schedule
Reliability
Painters always finish jobs on time with good results
Responsiveness
Painters and/or manager are willing and able to handle
special requests and to take care of problems (spills, runs,
etc.)
Time
Painters are able to complete two coats of paint in a timely
manner
Assurance
Painters are able to answer questions about paint coverage,
the ability of the paint to prevent mold, etc.
Courtesy
Painters are respectful to homeowners
Tangibles
Painters are dressed professionally, and equipment is in good
working order
Consistency
Painters perform the same quality job each time
Expectations
The painters meet or exceed customer expectations
Chapter 09 – Management of Quality
Dimension
Surgery and Post-Surgery Care (Service)
Convenience
Timing of surgery works with patient’s schedule
Reliability
Surgeon makes the same type of incisions, follows the same
steps each surgery, and correctly diagnoses and fixes patient
ailments
Responsiveness
Surgeon is willing to move up surgery for a patient with
excessive pain
Time
Patient is scheduled for surgery quickly, and surgeon
completes the surgery quickly given the complexity of the
procedure
Assurance
Surgeon is able to answer all patient questions regarding
surgery and recovery
Courtesy
Surgeon is respectful to the patient and explains procedures
in a friendly, caring manner
Tangibles
Hospital surgery room and equipment are sanitary
Consistency
Surgeon provides the same quality each surgery
Expectations
Surgeon meets or exceeds patients’ requirements for range of
motion, speed of recovery, etc.
5. a. Various student responses are possible regarding whether product reviews (negative or
positive) influence their purchasing decisions.
6. A major component of the quality-ethics interface involves firms knowingly allowing
substandard products to be manufactured and sold or organizations knowingly providing
substandard service to customers.
The substandard production can take place as a result of poor workmanship, improper or
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7. Quality Gurus:
W. Edwards Deming: Deming is known as the senior quality guru. He was a statistics
professor at New York University. He went to Japan to assist the Japanese in improving
quality and productivity. As a result of his successful accomplishments in Japan, the Japanese
d. Psychology (management must find a way to motivate workers).
8. a. ISO 9000 is a set of international standards on quality management. The International
Organization for Standardization (ISO) promotes worldwide standards that will improve
efficiency and productivity. The ISO 9000 standards are important for doing business
internationally, especially in Europe. Over 40,000 companies are certified by ISO. To
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13. There are four basic steps in the plan-do-study-act cycle:
Plan. Begin by studying the current process. Document that process. Then, collect data to
identify problems. Next, analyze data and develop a plan for improvement. Specify measures
14. Steps of Problem Solving:
a. Define the problem and establish an improvement goal
15. a. Pareto Analysis: Assume that a company has just been bought by another company. Based
on an initial study, it has been established that the organization is suffering from numerous
quality problems. A committee is formed to study the quality-related problems. One of the
first tasks of the committee is to enumerate the various problems experienced by this
layout.
Chapter 09 – Management of Quality
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d. Scatter Diagram: A drug manufacturer wants to determine if there is a significant
relationship between the dosage of its new drug and a patient’s body temperature. It
collects information from 12 patients that were administered several different drug
dosages. Plotting the scatter diagram will show the degree and the direction of the
relationship between the two variables.
16. Steps of process improvement:
a. Map the process: Identify each step in the process along with its input and outputs, the
people involved, and the decisions that are made. Document measures such as time, cost,
17. Flowchart: A manager trying to improve a process could start with a flowchart to determine
possible points in the process where problems occur.
Check Sheet: After determining where defects occur, the manager could use a check sheet to
record the different defects generated at the various points in the process.
Pareto Analysis: The manager could take the results from the check sheet and arrange the
defects in order of frequency.
Cause-and-Effect Diagram: The manager could take the most frequently occurring problem
and study that problem in greater detail using a cause-and-effect diagram.
Taking Stock
1. The tradeoff involved in deciding whether to offer a product or service guarantee is increased
revenue vs. increased cost. The guarantee should drive more business and revenue. However,
2. Setting priorities for quality improvement needs to transcend the entire organization.
Therefore, at the macro level, upper management needs to be involved heavily in determining
the desired level of quality. Obviously, the marketing department, due to its close contact with
the customers, can provide valuable information when defining quality. Upper-level manager
involved in strategic planning, due to their knowledge of competition, should be involved. Of
course, engineering, production, and the quality control department will not only be able to
3. Technology has had a profound impact on quality. Improvement in measurement systems has
drastically improved the measurement of quality. Computer technology has enabled many
companies to perform on-line, real-time statistical process control, which has enabled them to
Chapter 09 – Management of Quality
artificial intelligence systems forewarn potential problems before they occur. Due to
computerized equipment, processes are able to hold tighter tolerances also.
Critical Thinking Exercises
1. It may be possible that customers noticed the additional repair personnel in the shop and
assumed (wrongly) that the manager had raised prices to pay the wages of the additional repair
2. Customer retention is important because it typically costs much less to retain current
customers than it does to attract new customers. One possible reason that “satisfied
customers” leave is that “customer satisfaction” is not enough. Retention may require
3. Compared to decentralized processing facilities, a single processing facility would entail more
transportation to and from the facility, thus leading to more chances for contamination as well
4. Student answers will vary. Some possible answers are listed below:
a. Knowingly producing and shipping defective products would violate the Utilitarian
principle (due to increased failure costs) and the Virtue Principle.