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CHAPTER 1
Introduction to Quality
Teaching Notes
In the first class session, we typically provide a few introductory remarks about the importance
Chapter 1 Overview and Key Objective
The first chapter provides an overview of the importance of quality in a rapidly changing
business environment. Actually, that has become a cliché. Perhaps we should use the phrase: “a
chaotic business environment.” Students at both the undergraduate and graduate level are likely
to be taking this course as an elective, so you may have a tendency to assume that they are “self–
motivated” by simply being there. This is not necessarily the case. As business and industry
evolves, the terms “performance management” and “performance excellence” have begun to be
Key objectives for Chapter 1 should include:
• To emphasize that of the three important concepts of performance excellence –
productivity, cost, and quality – the most significant factor in determining the long-run
success or failure of any organization is quality.
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• To focus on the multi-faceted definitions of quality. Definitions include transcendent
• To understand that the user-based perspective requires a definition of customers and
related terms. Thus, customers also include consumers, who ultimately use a product;
• To review the evolution of quality from the 12th Century B.C. Zou Dynasty in China,
through the Craftsmanship era in the 1700’s, through the Japanese post-World War II
challenge brought on by attention to quality and international competitiveness, to the
• To introduce the concept of quality assurance — providing consumers with goods and
services of appropriate quality, as a point of reference. Statistical quality control (SQC)
is the application of statistical methods for controlling quality. SQC was vital to military
• To show how aligning and integrating quality principles into all fundamental business
activities underlies the concept of performance excellence, characterized by delivery of
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• To develop the view of a production and service systems that focuses on lateral
• To investigate the future of quality and reinforce the concept that managers must better
prepare and train employees in the philosophy and tools of quality management, and that
business leaders must also take responsibility and be held accountable for quality
outcomes.
• To provide quality definitions and terminology to be used throughout the text, including
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ANSWERS TO QUALITY IN PRACTICE KEY ISSUES
The Evolution of Quality at Xerox: From Leadership Through Quality to Lean Six Sigma
Although Xerox has fallen on hard times in the early 21st Century, that should not prevent you
from using their remarkable turn-around in quality in the 1990’s as a lesson in management
commitment and focus, which is still having an impact. Instructors may want to point out that
Xerox is a prime example of companies that have let “other business issues” blind them to the
need for a continued emphasis on quality. Despite thorough training of managers and workers at
every level, Xerox failed to maintain the organizational focus that had pulled them from the
brink of disaster. Eight years after the burst of the “dot-com bubble” began, and in the midst of
the prolonged economic downturn of 2008-12, it still remains to be seen whether the new
management team at Xerox can turn the company around, once again, in their rapidly changing
technological environment. However, it is not because the company and its current management
are not trying.
1. In the 1980’s, after stumbling badly, Xerox made a remarkable turn-around in quality by
developing principles that were very similar to the core principles in this chapter. They
incorporated the core principles of: 1) a focus on customer satisfaction; 2) striving for
continuous improvement; and 3) encouraging the full involvement of the workforce by
their three objectives of Leadership Through Quality These could be summarized as:
• Quality improvement is everyone’s job.
The current Lean Six Sigma endeavor differs from earlier initiatives in that while it still
incorporates the “old” Leadership Through Quality approach, it places a new emphasis
on:
1. Customer-focused employees
2. Participation and teamwork to attain speed and agility
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2. The lessons that are evident in this experience are that excellence in quality requires
excellence in management, that you “can’t take your eye off the ball” if you aspire to
high levels of quality, and that new competitive challenges require new approaches.
In Xerox’s first lesson, a repeat of what happened in the early 1980’s with different
players, there were a number of management problems that occurred at Xerox in the late
1990’s and early 2000’s that distracted them from what was happening with customers,
employees, and the competitive environment. As a result (the second lesson), not much
attention was paid to maintaining, much less improving, quality approaches that had been
so successful several years earlier. Results were spotty, and efforts were pointed toward
“making the bottom line look good.” The third lesson that became painfully clear was
that simply training employees, without management commitment and involvement no
longer worked.
A Business Week article on March 5, 2001 detailed the many woes of Xerox,
especially as it related to top management power struggles and failures to adapt to a
rapidly changing technological environment. If one accepts the premise that changing
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3. By saying that Quality is a race without a finish line, a slogan that Xerox management
has recently revived, there is a focus on two things: a) quality must not be just a
“program” that will fade out in a year or two; and b) to embrace the idea of continuous
improvement, people must assume that there will always be better ways found to do
Quality in Practice: Quality Practices in Modern China
1. There are obvious parallels between today’s China and post-World War II Japan. The
Chinese have used their abundant human resources to produce low-cost goods sold
around the world. They have borrowed (some would say “copied”) technology from the
2. China has a significant opportunity to leverage the learning and take advantage of
progress made in quality in Japan and the West over the past half-century. Western
companies, as well as Japanese ones, are eager to develop partnerships and access to the
ANSWERS TO REVIEW QUESTIONS
1. There have been several factors contributing to increased awareness of quality including
gaps between U.S. and international competitors’ quality levels, product recalls, and
massive quality failures. The realization of the superior quality of Japanese, German, and
other products from non-U.S. firms in the 1970’s, ‘80’s and up to the present (Then, in
initial quality levels; today, in long–term product reliability) was a “wake–up call” about
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the lack of U.S. quality. In the last 20 years periodic quality issues have arisen, such as
the extensive product recalls by the Consumer Product Safety Commission in the early
2. At Motorola, two key beliefs guide the culture of the firm: respect for people and
uncompromising integrity. Motorola was a pioneer in continual reduction of defects and
cycle times in all the company’s processes, from design, order entry, manufacturing, and
marketing, to administrative functions.
Customers report high levels of satisfaction, and the division demonstrates strong
financial, product quality, cycle time, and productivity performance. These results stem
3. The six perspectives are: the transcendent, product, user, value, manufacturing, and
customer perspectives. The customer is the driving force for the production of goods and
services, and customers generally view quality from either the transcendent or the
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The user perspective of quality is meaningful to people who work in marketing. This
leads to a user-based definition of quality – fitness for intended use, or how well the
product performs its intended function. The manufacturer must translate customer
requirements into detailed product and process specifications. Making this translation is
4. Consumers are the final purchasers of a product or service. In the case of fast-food
restaurants, such as Chipotle, they are the everyday people who buy and consume the
restaurant’s ready-made tacos, barritos, etc. External customers are companies within a
“chain of customers,” a chain of many firms who work together to produce the final
5. Webster’s definition of quality is vague and simplistic. “(Quality is) that which makes
something what it is; characteristic element.” The ANSI/ASQC A3-1978, Quality
Systems Terminology defines quality as “the totality of features and characteristics of a
product or service that bears on its ability to satisfy given needs.” This definition draws
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heavily on the product and user definitions and is driven by the need to create satisfied
customers. By the end of the 1980s, many organizations had begun using a simpler, yet
6. Evidence of the search for quality dates back to ancient Egypt, as indicated in the
precision and uniformity of methods used in the construction of the pyramids. The
craftsperson of the Middle Ages took special care to ensure quality in his/her product, a
necessary step since he/she dealt directly with the customer. In the late 18th Century, Eli
7. Definitions of the following terms are:
a. quality assurance – any planned and systematic activity directed toward providing
consumers with products (goods and services) of appropriate quality, along with the
confidence that products meet consumers’ requirements.
b. total quality – the concept of total quality includes the three fundamental principles of:
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problems from employees at every level, and to continuously look for, test, implement,
and evaluate new ways to perform organizational processes, better.
c. performance excellence – an integrated approach to organizational performance
management that results in:
8. Quality concerns of each major function within a manufacturing system vary. Thus, each
major function contributes to total quality in various ways, as follows:
Marketing and Sales – Effective market research and solicitation of customer feedback
are necessary for developing quality products.
Product Design and Process Engineering – Here, designers and technicians must make
sure products are not over- or under-engineered. Over-engineering results in ineffective
use of a firm’s resources and products. Under-engineered products poor process designs
result in lower quality as well.
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Industrial Engineering and Process Design – Team members from these areas must work
9. Service is defined as: “any primary or complementary activity that does not directly
produce a physical product — that is, the nongoods part of the transaction between buyer
(customer) and seller (provider).” Service firms are organizations in industries and
sectors including: hotels and lodging places, and establishments providing personal,
business, repair, and amusement services; health, legal, engineering and other
professional services; membership organizations. Real estate, financial services, retailers,
transportation, and public utility organizations are generally considered service firms.
10. Differences between manufacturing and service organizations are significant, yet both
types have activities that fall into manufacturing and service categories. The contrasts
between service and manufacturing quality include:
• Customer needs and performance standards are difficult to quantify in services.
• The production of services often requires a high degree of customization.
• The output of many services is intangible, unlike manufactured goods.
• Services are produced and consumed simultaneously.
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11. Employees need information technology as a tool for providing quality service in today’s
fast-moving business environment. Information technology is essential in modern service
organizations because of the high volumes of information they must process and because
customers demand service at ever-increasing speeds. Intelligent use of information
12. Business support activities must aid in quality production in their own separate ways, but
still remain aligned with the organizations purpose, objectives, goals, and plans. Support
activities help to provide for specialized handling of non-core processes. Thus, team
members in the core activities can focus on quality issues in their own areas. Key
business support activities play a role in sustaining quality as follows:
– Financial studies can help expose the costs of poor quality and ways of reducing it.
Accounting data are useful for identifying areas for quality improvement and tracking the
progress of quality improvement. Financial and accounting personnel can also apply
quality improvement techniques to improve their own operations.
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13. A firm’s competitive advantage lies in its ability to achieve market superiority. It is a)
driven by customer wants and needs; b) makes a significant contribution to the success of
the organization; c) matches the organization’s unique resources with opportunities in the
14. The late Philip Crosby made the point that “quality is free” because he wanted to
emphasize the savings and benefits that have since been more fully (see answer to
15. A product’s value in the marketplace, and hence, its profitability, is influenced by the
quality of its design. Improvements in performance, features, and reliability within the
product will differentiate it from its competitors, improving the firm’s quality reputation
16. The evidence to counter the claim that “quality does not pay” is mounting. For example,
the Department of Commerce studies of Malcolm Baldrige Award winners through 2002
showed that an investment in common stock of the winners would have produced a 3.8 to
1 advantage over a similar investment in the S&P 500. However, in 2003, for the first
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17. Personal quality is an often-neglected area, which, if emphasized, can have a significant
impact on individuals and organizations. Simply by recording defects in specific
ANSWERS TO DISCUSSION QUESTIONS
1. Students should have numerous personal examples of how good and poor quality has
affected them. Often, they are harder pressed to come up with an example of good quality
than one of poor quality. For example, one of the authors experienced outstanding quality
2. Quality has been a topic of national interest in the U.S. as well as to countries around the
globe since the discovery in the early 1970’s that many goods and services produced in
certain quality-focused countries, or by specific companies, have higher quality standards
in production and better track records with consumers. In the past, American negligence
3. In the Business Week (July 9 & 16, 2007, p. 16) article, the reader said: “Americans have
switched from Detroit Big Three vehicles to Honda and Toyota vehicles not for visual
design features but for durability, reliability, good fuel consumption, and low full cost of
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4. Answers may vary. For example, if a student chooses an iPad, he or she may point to its
transcendent quality. The student might say, “I just like the ‘look and feel’ of the IPad.
When you look at it, it’s obvious that it’s a quality product.” In speaking of product-and
5. As in question 4, students might choose any one of dozens of products or services to
illustrate. Fitness for intended use should answer questions such as: Does the product
perform as advertised? Is the product user-friendly, and affordable for both consumers
AND the manufacturer? Is the product durable? How does the product stack up against
other competitive products, which may have different features?
For example, they might choose to discuss purchase of a used car to drive to school and
work. The list of fitness for use criteria might include initial price, cost to operate and
6. The Ford executive’s statement that: “You can’t have great value unless you have great
quality” ‘rings true’ because quality of design and quality of conformance go hand–in–