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Chapter 9 Textbook and lecture notes

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Global Management Studies
GMS 401
Wally Whistance- Smith

Chapter 9: Management Quality Quality: The quality of a product or service is a customer’s perception of the degree to which the product or service meets his or her expectations. Nature of Quality: – Dimensions of Quality – Determinants of Quality – Costs of Quality Dimensions of quality: – Performance: main characteristics or function of the product. – Features: extra characteristics. – Reliability: consistency of performance. – Serviceability: – Durability: the useful life of the product or service. – Appearance: aesthetics, feel, smell, taste. – Customer service: warranties, maintenance and handling complaints. – Safety: elimination or reduction of risk of injury or harm. Determinants of Quality: – Quality of design: characteristics designers specify for a product or a service. – Quality capability of production processes – Quality of conformance: the degree to which goods and services conform to the specifications of the designers. – Quality of customer service – Organizational quality culture The Consequences of Poor Quality – Loss of business – Liability: when it comes to injury from the product. – Productivity: poor quality slows down productivity as some items have to be reworked. – Costs Benefits of Good Quality – Enhanced reputation for quality – Ability to command higher prices – Increased market share – Greater customer loyalty – Lower liability costs – Fewer production or service problems – Higher profits Responsibility for Quality Everyone in the organization has some responsibility for quality, but certain areas of the organization are involved in activities that make them key areas of responsibility. Costs of Quality: Scrap and rework: rescheduling, repairing, retesting ....Internal failures. Defective products in the hands of the customer: recalls, warranty claims, law suits, lost business ....external failures. Detecting defects: inspection, testing ….Appraisal costs. Preventing defects: training, product/process redesign ….Prevention costs. Quality drives the productivity machine: if production does it right the first time and produces products and services that are defect-free, waste is eliminated and costs are reduced. Quality management programs today are viewed by many companies as productivity improvement programs. Other aspects of the quality picture – Just-In-Time (JIT) manufacturing – Product standardization – Automated equipment – Preventive maintenance TQM: a philosophy that involves everyone in an organization in continual effort to improve quality and achieve customer satisfaction. Elements of TQM: Develop supplier partnerships. Customer service, distribution and installation. Building teams of empowered employees. Benchmarking and continuous improvement – Find out what customers want, surveys, focus groups, interviews. – Design a product or a service that will meet and exceed customer’s needs. Make it easy to use and produce. – Design processes that facilitate doing the job the first time. Predict mistakes. Involve workers. – Keep track of results – Extend these concepts to suppliers and to distribution. Top management commitment and involvement – Support must be genuine or TQM will be seen as just another passing fad – Fundamental changes must occur in the culture of the organization – Such fundamental changes are not easy, but are impossible without top management’s commitment and involvement Designing Products for Quality Designing for Robustness: Product will perform as intended even if undesirable conditions occur in production or in field. Designing for Manuf
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