BUSPRO-Module-2.pdf

Module 2 Objectives  Differentiate the philosophies and frameworks relating to quality  Determine the contribution of the philosophies to the quality revolution Introduction This chapter focuses on the "founding fathers" of total quality management -- Deming, Juran, Crosby, Feigenb...

Module 2 Objectives  Differentiate the philosophies and frameworks relating to quality  Determine the contribution of the philosophies to the quality revolution Introduction This chapter focuses on the "founding fathers" of total quality management -- Deming, Juran, Crosby, Feigenbaum, Ishikawa and Taguchi. The chapter does not give in-depth biographical sketches of the quality "gurus," but summarizes their philosophies and principles on which they believe that quality rests. Much like any concept in management, various people contributed to the concept of quality that we now know. To be better understand the concept of quality, we need to dig deeper into the said philosophies and principles. Deming’s Chain Reaction Theory The Deming "chain reaction" theory states that by (a) improving quality, a firm can (b) decrease costs because of less rework, fewer mistakes, delays, and snags, and better use of time and materials, thus (c) improving productivity. The firm will therefore be able to (d) capture the market with better quality and lower prices, and thus, not only (e) stay in business, but also (f) provide and create more jobs.  According to Deming, investing to improve the quality of a product or service is not an expense for it contributes directly to the bottom line or income of the business and keeps the business alive. Companies that continuously follow the virtuous cycle of the Deming chain reaction will benefit in the present and even in the future. What if a company does not follow the Deming chain reaction? Let’s have an example scenario. Company Ace is a computer brand making laptops and personal computers. In order to compete with the current market leader, Company Ace focused on lower quality materials with lower costs for it to sell their product at a cheaper price. Due to the lower quality of their materials, a lot of their products have defects during and after production. Thinking that the customers would not notice much of the defects, they still sell some of the defective products and just gave a warranty instead of improving quality. A few customers experienced problems with their computers right after they bought them from the Ace store. Though there was a warranty for free repair for the computer, it took almost a month to replace the defective parts. Dismayed by the company’s products, customers started ranting in their FB about the bad product and service of Ace. As more people experienced the defective products or heard about the defective products of Ace, more and more people shy away from buying from the said brand. Customers of Ace started to dwindle down and eventually the company was not able to make enough sales to make a profit. Eventually, the company closed down and went bankrupt. In short, it is more costly and expensive to not have quality instead of spending money to improve quality. Deming never actually gave a definition of quality. However, if he had explicitly defined quality, he might have said: Quality is the result of action taken by management, acting as leaders, with the willing cooperation of knowledgeable workers, to constantly and forever improve products and services by reducing variability and uncertainty in processes, thereby remaining competitive and providing profits and enough jobs for everyone. To understand this definition better, we need to study the Deming’s System of Profound Knowledge Deming's System of Profound Knowledge consists of four interrelated parts: (1) appreciation for a system; (2) understanding of variation; (3) theory of knowledge; and (4) psychology. Appreciating a system involves understanding how each component of the system works to produce the end product or service, and understanding how the system may be optimized for better or smoother performance. For example, no matter how fast the CPU of a computer, if one other component like the RAM is slow, it will definitely affect the performance of the computer. All other parts of the computer should be compatible and able to bear the load of the fast CPU in order for it to function in its optimum capacity. Understanding of variation involves knowing and anticipating factors (i.e. increasing personnel, the wearing out of tools) that may cause the system to change, for better or worse. Variations in producing a product or service in inevitable. However, understand where variations occur will help managers minimize the variations thus improving quality. Theory of knowledge involves understanding the system and current and possible variations within, to the point where past and present events and performance can suggest possible outcomes of future courses of action within the system. Knowledge or information is the main drivers of quality today. The past knowledge combined with the present information will help companies create products and services of better and better quality.  Psychology involves understanding what motivates people, including the facts that people must enjoy their work, be treated with respect, work within a system that promotes dignity and self-esteem, receive adequate recognition, not just financial remuneration, and feel that they are part of a winning, high quality team that makes a difference. For at the end of the day, companies are still composed of people and understanding them will help companies create a culture of quality. As Scholtes explained, lack of understanding of the components of Profound Knowledge can have a profound impact on the health of organizations. To briefly summarize the multiple points that Scholtes made is difficult. However, he pointed out that when people don’t understand systems, they basically don’t understand that incidents, interventions, and control are the net result of many actions and interdependent forces. When people don't understand variation, they don’t understand the difference between prediction, forecasting, and guesswork, thus being unable to distinguish between fact and opinion. When people don’t understand psychology, they don’t understand motivation or why people do what they do, which causes them to misunderstand change and resistance to it. When people don’t understand the theory of knowledge, they don’t know how to plan, accomplish learning, improve, change, or solve problems, despite their best efforts. Juran’s Quality Trilogy Juran's "Quality Trilogy," like most trilogies these days, consists of three parts: Quality planning--the process for preparing to meet quality goals; quality control--the process for meeting quality goals during operations; and quality improvement--the process for breaking through to unprecedented levels of performance. Quality planning begins with identifying customers, both external and internal, determining their needs, and developing product features that respond to customer needs. Quality goals are then established that meet the needs of customers and suppliers alike, and do so at a minimum combined cost. Quality control involves determining what to control, establishing units of measurement so that data may be objectively evaluated, establishing standards of performance, measuring actual performance, interpreting the difference between actual performance and the standard, and taking action on the difference. Juran specifies a program for quality improvement which involves proving the need for improvement, identifying specific projects for improvement, organizing guidance for the projects, diagnosing the causes, providing remedies for the causes, proving that the remedies are effective under operating conditions, and providing control to maintain improvements. Crosby's Absolutes of Quality Management Quality means conformance to requirements, not elegance. Crosby sees requirements as being ironclad; they are communication devices which must be clearly stated so that they cannot be misunderstood. Once this is done, a company can take measurements to determine conformance to those requirements. Crosby maintains there is no such thing as a quality problem. Those individuals or departments that cause them, so there are accounting problems, manufacturing problems, logic problems, etc, must identify problems. There is no such thing as the economics of quality; it is always cheaper to do the job right the first time. Most of us will remember this one as a frequent and sometime annoying axiom, used by our mothers every time we had to perform some complicated chore. Crosby supports the premise that "economics of quality" has no meaning. Quality is free. What costs money are all actions that involve not doing jobs right the first time.  The only performance measurement is the cost of quality. The cost of quality is the expense of nonconformance. Crosby's program calls for measuring and publicizing the cost of poor quality. The only performance standard is "Zero Defects." Zero Defects is a performance standard, NOT a motivational program. The idea behind ZD is to do it right the first time, to concentrate on preventing defects rather than just finding and fixing them. Crosby's Basic Elements of Improvement include determination, education, and implementation. According to Crosby, most human error is caused by lack of attention rather than lack of knowledge. Lack of attention is created when we assume that error is inevitable. By determination, Crosby means that top management must be serious about quality improvement. Everyone must understand the Absolutes; this can be accomplished only through education. Finally, every member of the management team must understand the implementation process. A.V. Feigenbaum is primarily known for three contributions to quality -- his international promotion of the quality ethic, his development of the concept of total quality control, and his development of the quality cost classification. Kaoru Ishikawa was instrumental in the development of the broad outlines of Japanese quality strategy, the concept of CWQC, the audit process used for determining whether a company will be selected to receive the Deming award, the quality control circle, and cause-and-effect diagrams--a principle tool for quality management. Taguchi’s contributions were centered on explaining the economic value of reducing variation. He maintained that the manufacturing-based definition of quality as conformance to specification limits is inherently flawed. He also contributed to improving engineering approaches to product design. By designing a product that is insensitive to variation in manufacture, specification limits become meaningless. Taguchi advocated certain techniques of experimental design to identify the most important design variables in order to minimize the effects of uncontrollable factors on product variation. Thus, his approaches attacked quality problems early in the design stage rather than react to problems that might arise later in production. Review Questions: 1. Summarize the different philosophies discussed in the module: ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ 2. What were the common themes about quality that were available in each philosophy? ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________