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GMS 401 Lecture Notes - Histogram, Frederick Winslow Taylor, Supplier Relationship Management

Global Management Studies
Course Code
GMS 401
Wally Whistance- Smith

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Chapter 9 – Management of Qualitity
Quality: The ability of a product or service to consistently meet or exceed customer expectations
Prior to the increased level of Japanese competition in the North American marketplace in the 1980s, quality
was not very important. Leading Japanese manufacturers Toyota, Honda, and Nissan have build a reputation for
quality and reliability in their vehicles.
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
Best In-Class and World-Class
Customers’ expectations of quality are not the same for different classes of products or services.
Best-in-class quality means being the best product or service in a particular class of products or services.
Being a world-class company means that each of its products and services are considered best-in-class by its
Ethics and Quality
Substandard work - Defective products, Substandard service, Poor designs, Shoddy workmanship, Substandard
parts and materials
Having knowledge of these and failing to correct and report it in a timely manner is unethical
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
Customer Involvement
Mechanisms to involve customer- Focus groups, Mkt surveys, Customer questionnaires, Mkt research programs
Quality Function Deployment (QFD) - Formal system for identifying customer wants
- Eliminate wasteful product features and activities that do not contribute
Designing Products for Quality
Designing for Robustness - Product will perform as intended even if undesirable conditions occur in production
or in field.
Designing for Manufacturability (DFM) - Products typically have fewer parts and can be assembled quickly,
easily, and error-free.

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Designing for Reliability - Manufacturing parts to closer tolerances. Redundant components where necessary
Designing and Controlling Production Processes
The responsibility of producing products of high quality rests with the workers producing the product
Two types of factors introduce variation in production processes
- Controllable factors - can be reduced by workers and management
- Uncontrollable factors - reduced only by redesigning or replacing existing processes
Prior to the industrial revolution, in most cases skilled craftsmen performed all stages of production.
Workmanship and reputation often provided motivation for a job to be done right.
Division of labour accompanies the industrial revolution, each worker was responsible for a small portion
Frederick Winslow Taylor, the β€œFather” of scientific management gave new emphasis to quality control
including product inspection and gauging in his list of fundamental areas of manufacturing management
1924 - Statistical process control charts – used to monitor production
1930 - Tables for acceptance sampling -
1940’s - Statistical sampling techniques
1950’s - Quality assurance/TQC – primary focus to include marketing, product design, and after sale service.
1960’s - Zero defects – focused on managements role, and the expectation of perfection from each employee
1970’s - Quality assurance in services
Dimensions of Product Quality include;
Performance – main characteristic of function of the product (everything works, ride, handling, leg room)
Aesthetics – appearance, feel, smell, taste (interior design, soft touch)
Special features – extra characteristics or secondary functions (convenience, high tech)
Safety – reduction or elimination of risk of injury or harm (airbags)
Reliability – consistency of performance (infrequency of breakdowns)
Durability – the useful life of the product or service (long life, resistance to rust and corrosion)
Perceived Quality – subjective evaluation of quality (e.g. reputation, image, top rated car - cadillac)
Service after Sale – warrantees, maintenance, and handling of complaints
Dimensions of Service Quality include;
Tangibles – the physical appearance of facilitates, equipment, personnel, and communication materials
Convenience – the ability and accessibility of the service
Reliability – the ability to perform a service dependably, consistently, and accurately
Responsiveness – the willingness of providers to help customers in unusual situations & to deal with problems
Time – the speed with which service is delivered
Assurance – the knowledge exhibited by personnel, and their ability to convey trust and confidence
Courtesy – the way customers are treated by employees who come into contact with them

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All dimensions must be stated in terms of specific, measureable characteristics (e.g. when buying a car, you
want to know how many clicks it has) otherwise they are too abstract to be applied operationally
The Determinants of Quality
Design, capability of production processes, How well it conforms to the design in production, Ease of use,
Service after delivery, Customer service, Organizational quality culture
Quality of Design: Characteristics designers specify for a product or service
Design characteristics must take into consideration customer wants, production capabilities, safety, costs, etc
A poor design can result in difficulties in production or service
Quality of Conformance: The degree to which goods or services conform to the specification of the designers
The is affected by factors such as characteristics of material, capability of equipment used, skills and training,
monitoring process to assess conformance, and the taking of corrective actions.
Ease of use and user instructions are important. They increase the chance that a product will be used for its
intended purpose, and function properly and safely.
Service After Delivery - When products/services to not perform as expected, it is important to remedy the
situation through recall/repair, replacement, or refund to satisfy the customer
The Consequences of Poor Quality
Loss of business, Liability, Productivity loss, Costs
The Costs of Quality
classified into 4 categories οƒ  Internal Failure Costs, External Failure Costs, Appraisal Costs, Prevention Costs
Failure Costs: caused by defective parts or products or by faulty services
Internal Failures: discovered during production – caused by defective material, faulty equipment, etc
Costs include lost production time, scrap and rework, investigation costs, possible equipment damage, and
possible employee injury.
External Failures: discovered after delivery to the customer. Costs include warranty work, handling of
complaints, replacements, liability/litigation, payments to customers, loss of customer goodwill, opportunity
costs related to lost sales.
Appraisal Cost: costs of inspection and testing. Include costs of inspectors, testing, test equipment, labs,
quality audits, and field testing.
Prevention Costs: Costs of preventing defects from occurring. Include costs such as quality planning and
admin systems, working with vendors, training, quality control procedures, extra attention in both design and
production phases to decrease the probability of defective workmanship.
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