UNIT I – BASIC CONCEPTS

OF QUALITY
Principle of Quality Management
 Total – Made up of the whole.
 Quality – Degree of excellence a product or
service provides.
 Management – Act, art or manner of handling,
controlling, directing etc.
 TQM is the art of managing the whole to
achieve excellence.
 TQM is defined as both a philosophy and a set
of guiding principles that represent the
foundation of a continuously improving
organization.
 It is the application of quantitative methods

and human resources to improve all the

processes within an organization.
Basic concepts of TQM
 A committed and involved management to provide
long-term top-to-bottom organizational support.
 An unwavering focus on the customer, both
internally and externally.
 Effective involvement and utilization of the entire
work force.
 Continuous improvement of the business and
production process.
 Treating suppliers as partners.
 Establish performance measures for the processes.
Purpose of TQM
 The purpose of TQM is to provide a quality
product and/or service to customers along with cost
reduction.
 With a higher quality product and lower price,
competitive position in the marketplace will be
enhanced.
 It will allow the organization to achieve the
objectives of profit and growth with greater ease.
 The work force will have job security, which will
create a satisfying place to work.
New and Old Cultures
Quality Element Previous State TQM
Definition Product oriented Customer oriented
Priorities Second to service and cost Equal to service and cost
Decisions Short-term Long-term
Emphasis Detection Prevention
Errors Operations System
Responsibility Quality Control Everyone
Problem Solving Managers Teams
Procurement Price Partnership
Manager’s role Plan, assign, control and Delegate, coach, facilitate
enforce and mentor
Quality
 Quality is used in terms of an excellent product
or service that fulfils or exceeds our
expectations.
 It is intangible based on perception.
 Q = P/E
where,
Q = quality
P = performance
E = expectations
 If Q is greater than 1, then the customer has a
good feeling about the product or service.
 Definition of quality according to ISO
9000:2000
 It is defined as the degree to which a set of inherent
characteristics fulfills requirements.
 Degree means that quality can be used with adjectives
such as poor, good and excellent.
 Inherent is defined as existing in something, especially
as a permanent characteristic.
 Characteristics can be quantitative or qualitative.
 Requirement is a need or expectation that is stated.
Dimensions of quality (9
dimensions)
Dimension Meaning and Example
Performance Primary product characteristics, such as the
brightness of the picture
Features Secondary characteristics, added features, such
as remote control
Conformance Meeting specifications or industry standards
Reliability Consistency of performance over time
Durability Useful life, includes repair
Service Resolution of problems and complaints, ease of
repair
Response Human-to-human interface such as the courtesy
of the dealer
Aesthetics Sensory characteristics, such as exterior finish
Reputation Past performance and other intangibles
Juran’s quality trilogy
 Developed by Dr. Joseph Juran.
 It has three components:

 Planning
 Control
 Improvement
 Planning
 Begins with external customers.
 Marketing determines the external customers.
 All organizational personnel determine the internal
customers.
 Once the customers are determined, their needs are
discovered.
 Real needs may differ from stated needs.
 One might discover these needs by:
 Being a user of the product or service.
 Communicating with customers through product or
service satisfaction and dissatisfaction information.
 The next step in the planning process is to develop
product and/or service features that respond to
customer needs, meet the needs of the organization
and are competitive.
 It is important that the design team, rather than a
single department, approve the final design and that
the team be composed of all functional areas within
an organization as well as customers and suppliers.
 The fourth step is to develop the processes able to
produce the product and/or service features.
 Process validation is necessary to ensure that a
process will consistently produce a product or service
meeting requirements.
 Transferring plans to operations is the final step of
the planning process.
 Control
 It is used to meet the product, process and service
requirements.
 It used the feedback loop and consists of the
following steps:
 Determine items to be controlled.
 Set goals for the controls.
 Measure actual performance.
 Compare actual performance to goals.
 Act on the difference.
 Statistical process control is the primary technique
for achieving control.
 The basic statistical process control (SPC) tools are
pareto diagrams, cause-and-effect diagrams, control
charts etc.
 Improvement
 It aims to attain levels of performance that are
significantly higher than current levels.
 Process improvements begin with the establishment
of an effective infrastructure such as the quality
council.
 Two of the duties of the council are to identify the
improvement projects and establish the project teams
with a project owner.
 The problem-solving method may be applied to
improve the process, while the quality council is the
driver that ensures that improvement is continuous
and never ending.
 Process improvement can be incremental or
breakthrough.
 Juran provides a distinction between sporadic waste
and chronic waste.
 The sporadic waste can be identified and corrected
through quality control.
 The chronic waste requires an improvement process.
Deming’s 14 principles
 1. Create and publish the aims and purposes
of the organization.
 A long-term view must be developed of at least
ten years and plan to stay in business by setting
long-range goals.
 2. Learn the new philosophy
 Organizations must seek never-ending
improvement.
 Customer satisfaction is the number one priority.
 The organization must concentrate on defect
prevention rather than defect detection.
 3. Understand the purpose of inspection
 The purpose of inspection is to improve the process
and reduce its cost.
 Mass inspection is costly and unreliable.
 Defect prevention is important for success.
 4. Stop awarding business based on price alone.
 Awarding business must be stopped on the basis of
low bid, because price has no meaning without
quality.
 Goal is to have single supplier for each item to
develop a long-term relationship of loyalty and trust.
 5. Improve constantly and forever the system
 Finding and correcting problems so that quality
and productivity are continually improved and
costs are reduced.
 Focus is on preventing problems before they
happen.
 Responsibilities are assigned to teams to remove
the causes of problems and continually improve
the process.
 6. Institute training
 Management must allocate resources to train employees
to perform their jobs in the best possible manner.
 Everyone should be trained in statistical methods.
 7. Teach and institute leadership
 Supervisors must be provided training in statistical
methods.
 Instead of focussing on a negative, fault-finding
atmosphere, supervisors should create a positive and
supportive atmosphere.
 All communication must be clear from top management
to supervisors to operators.
 8. Drive out fear, create trust and create a
climate for Innovation
 Management must encourage open, effective
communication and teamwork.
 When people are treated with dignity, fear can be
eliminated and people will work for the general good
of the organization.
 In this climate, they will provide ideas for
improvement.
 9. Optimize the efforts of teams, groups and
staff areas
 Communication channels must be opened, project
teams must be organized and training in team work
implemented.
 10. Eliminate exhortations for the work force
 Exhortations that ask for increased productivity without
providing specific improvement methods are good for
nothing.
 Goals should be set that are achievable and are
committed to the long-term success of the organization.
 11. (a) Eliminate numerical quotas for the work
force
 Instead of quotas, management must learn and
institute methods for improvement.
 Quotas focus on quantity rather than quality.
 Statistical methods of process control should be
performed.
 11. (b) Eliminate management by objective
 Instead of management by objective, management
must learn the capabilities of the processes and how
to improve them.
 12. Remove barriers that rob people of pride of
workmanship
 Loss of pride in workmanship exists throughout
organizations because:
 Workers do not know how to relate to the organization’s
mission
 They are being blamed for system problems
 Poor designs lead to the production of “Junk”
 Inadequate training is provided.
 Inadequate or ineffective equipment is provided for
performing the required work.
 13. Encourage education and self-improvement
for everyone
 People must improve with education
 A long-term commitment to continuously train and
educate people must be made by management
 14. Take action to accomplish the
transformation
 Management has to accept the primary responsibility
for the never-ending improvement of the process.
 Management must be committed, involved and
accessible if the organization is to succeed in
Crosby’s 14 point programme
 1. Management Commitment
 Top management must become convinced of the need for
quality improvement and must make its commitment
clear to the entire company.
 This should be accompanied by a written quality policy,
stating that each person is expected to perform exactly
like the requirement.
 2. Quality improvement team
 Management must form a team of department heads to
oversee quality improvement.
 The team’s role is to see that needed actions take place in
its departments and in the company as a whole.
 3. Quality measurement
 Quality measures that are appropriate to every activity
must be established to identify areas needing
improvement.
 4. Cost of quality evaluation
 The controller’s office should make an estimate of the
costs of quality to identify areas where quality
improvements would be profitable.
 5. Quality awareness
 Quality awareness must be raised among employees.
 They must understand the importance of product
conformance and the costs of non-conformance.
 6. Corrective action
 Opportunities for correction are generated by measuring
quality as well as by discussion among employees
 These ideas should be brought to the supervisory level
and resolve there, if possible.
 7. Zero defects planning
 An ad hoc zero defects committee should be formed from
members of the quality improvement team.
 This committee should start planning a zero defects
programme appropriate to the company and its culture.
 8. Supervisor training
 Early in the process, all levels of management must be
trained to implement their part of quality improvement
programme.
 9. Zero defects day
 A Zero defects day should be scheduled to signal to
employees that the company has a new performance
standard.
 10. Goal Setting
 To turn commitment into action, individuals must
establish improvement goals for themselves and their
groups.
 Supervisors should meet with their people and ask them
to set goals that are specific and measurable.
 Meetings should be held to discuss progress.
 11. Error cause removal
 Employees should be encouraged to inform management
of any problems that prevent them from performing error-
free work.
 Employees need not do anything about these problems
themselves; they should simply report them.
 Management within 24 hours must then acknowledge
reported problems.
 12. Recognition
 Public, non-financial appreciation must be given to those
who meet their quality goals or perform outstandingly.
 13. Quality Councils
 Quality professionals and team chairpersons should meet
regularly to share experiences, problems and ideas.
 14. Do it all over again
 To emphasize the never-ending process of quality
improvement, the programme (Step 1-13) must be
repeated. This renews the commitment of old employees
and bring new ones into the process.
Service v/s Product Quality
 Customer service can be considered a major
dimension of competitiveness.
 Defining and controlling the quality of service is
more difficult than quality assurance of products.
 Unlike manufacturing, service industries share
unique characteristics that make the process of
quality control less manageable.
 Service company operations are affected by
several characteristics, including the intangible
nature of output and the inability to store the
output.
 There are other distinguishing characteristics as
well:
 Behaviour of the delivery person.
 Image of the organization.
 The measure of output is difficult to define.
 The most significant problem with the delivery of
services is that it is typically measured at the
customer interface.
Quality and business performance
 The relationship between quality, profitability and
market share is quite evident.
 Quality drives market share and growth.
 When superior quality and large market share are
both present, profitability is virtually guaranteed.
 Business with a superior product/service offering
clearly outperforms that with inferior quality.
 Quality can also reduce the costs.
 There are two types of quality:
 Customer-driven quality.
 Conformance or internal specification quality.
 Improving both internal (conformance) quality
and external (customer perceived) quality serves
as a driver for growth, market share and
profitability.
 This provides a means for further investment in
quality improvements such as research and
development.
 The cycle goes on.
 Attaining quality superiority produces the
following organizational benefits:
 Greater customer loyalty.
 Market share improvements.
 Higher stock prices.
 Greater productivity.
Mission Statement
 A statement of the purpose of a company and
its reason for existing.
 A written declaration of an organization’s core

purpose and focus.

 It is also called as company mission, corporate

mission or corporate purpose.

 Mission statement helps clarify what business

you are in and your goals.

 Crafting a mission statement requires time,

thought and planning.

 Mission statement should be conveyed to
others, inside and outside the business.
 The mission statement should guide the

actions of the organizations, spell out its

overall goal, provide a path and guide
decision-making.
Characteristics of properly crafted
Mission Statement
 Serve as filter to separate what is important
and what is not.
 Clearly state which markets will be served and

how.
 Communicate a sense of intended direction to

the entire organization.

How to make a good mission
statement
 It’s important to answer some questions before
crafting mission statement:
 Why are you in business?
 Who are your customers?
 What image of your business do you want to
convey?
 What is the nature of your products and
services?
 What level of service do you provide?
 What roles do you and your employees play?
 What kind of relationships will you maintain
with your suppliers?
 How do you differ from your competitors?
Examples of Mission Statement
 Coca-Cola India
Our Road map starts with our mission, which is
enduring. It declares our purpose as a Company
and serves as the standard against which we
weigh our actions and decisions.
• To refresh the world...
• To inspire moments of optimism and happiness...
• To create value and make a difference
 Tata Motors
To be passionate in anticipating and providing
the best vehicles and experiences that excite
our customers globally.
Vision Statement
 An aspirational description what an
organization would like to achieve or
accomplish in the mid-term or long-term
future.
 A vision statement is sometimes called a

picture of the company in the future.

 A vision statement may apply to an entire

company or to a single division of that

company.
 A vision statement is for the employer and
employees, not for the customers and clients.
 Vision statements are dynamic and can change

over time.
Characteristics of a Vision
Statement
 Vision statement should provide a sense of
aspiration and imagination.
 A good vision statement should have clear

direction for the company and its employees.

Examples of Vision Statement
 Coca-Cola India
Our vision serves as the framework for our Road
map and guides every aspect of our business by
describing what we need to accomplish in order
to continue achieving sustainable, quality
growth.
• People: Be a great place to work where people
are inspired to be the best they can be.
• Portfolio: Bring to the world a portfolio of
quality beverage brands that anticipate and satisfy
people’s desires and needs.
• Partners: Nurture a winning network of
customers and suppliers, together we create
mutual, enduring value.
• Planet: Be a responsible citizen that makes a
difference by helping build and support
sustainable communities.
• Profit: Maximize long-term return to share
owners while being mindful of our overall
responsibilities.
• Productivity: Be a highly effective, lean and
fast-moving organization.
 Tata Motors
Most admired by our customers, employees,
business partners and shareholders for the
experience and value they enjoy from being
with us.
Vision statement v/s Mission
Statement
 Mission is the cause and Vision is the effect.
 Mission is something to be accomplished
whereas a Vision is something to be pursued for
that accomplishment.
 Mission statements are present-based statements
designed to convey a sense of why the company
exists to both members of the company and the
external community.
 Vision statements are future-based and are meant
to inspire and give direction to the employees of
the company, not anyone outside the company.
 A mission statement answers the question,
“Why does my business exist?”
 A vision statement answers the question,
“Where do I see my business going?”
Quality Policy
 The Quality Policy is a guide for everyone in
the organization as to how they should provide
products and service to the customers.
 It should be written by the top management
personnel like CEO with feedback from the
work force.
 The Quality Policy Statement should be
approved by the Quality Council.
 A Quality Policy is a requirement of ISO/QS
9000.
Characteristics of Quality Policy
 Quality is given the top priority.
 Meet the needs of the internal and external
customers.
 Equal or exceed the competition.
 Continually improve the quality.
 Include business and production practices.
 The quality policy consists of the core values of
the organization.
Examples
 Zensar Technologies - "We are committed
to meet customers' needs and expectations
by delivering competitive services and
solutions through continual improvement of
our systems“.
Quality Objectives:
 Deliver services and solutions that meet customer
requirements.
 Continually enhance external and internal customer
satisfaction.
 Improve productivity and reduce rework.
 IIT Madras - To pursue global standards of
excellence in all our endeavors namely
teaching, research, and consultancy and
continuing education and to remain 
accountable in our core and support functions,
through processes of self-evaluation and
continuous improvement.