WGU C215 BEST GUIDE 1
TOTAL QUALITY MANAGEMENT
DEFINING QUALITY- The difficulty in defining quality exists regardless of product, and this is true for both manufacturing and service
organizations. Today, there is no single, universal definition of quality. Some people view quality as “performance to standards.” Others view it
as “meeting the customer’s needs” or “satisfying the customer.”
Conformance to specifications measures how well the product or service meets the targets and tolerances determined by its designers. The
wait for hotel room service may be specified as 20 minutes, but there may be an acceptable delay of an additional 10 minutes. Fitness for
use focuses on how well the product performs its intended function or use. You can also see that fitness for use is a user-based definition in
that it is intended to meet the needs of a specific user group. Value for price paid is a definition of quality that consumers often use for
product or service usefulness. This is the only definition that combines economics with consumer criteria; it assumes that the definition of
quality is price sensitive. If you take the less expensive seminar, you will feel that you have received greater value for the price. Support
services provided are often how the quality of a product or service is judged. Psychological criteria is a subjective definition that focuses on
the judgmental evaluation of what constitutes product or service quality. Different factors contribute to the evaluation, such as the atmosphere
of the environment or the perceived prestige of the product.
Differences between Manufacturing and Service Organizations- Manufacturing organizations produce a tangible product that can be seen,
touched, and directly measured. Examples include cars, CD players. Quality definitions in manufacturing usually focus on tangible product
features.
The relative importance of these manufacturing quality definitions is based on the preferences of each individual customer.
In contrast to manufacturing, service organizations produce a product that is intangible. Usually, the complete product cannot be seen or
touched.
Conformance to specifications Intangible factors
Degree to which product characteristic meets preset standards. service is experienced, perceptions can be highly subjective.
Performance Consistency
such as acceleration of a vehicle degree to which the service is the same each time
Reliability Responsiveness to customer needs
product will function as expected without failure
Features Courtesy/friendliness
extras that are included beyond the basic characteristics
Durability Timeliness/promptness
expected operational life of the product
Serviceability Atmosphere
how readily a product can be repaired
COST OF QUALITY-The reason quality has gained such prominence is that organizations have gained an understanding of the high cost of
poor quality.
The most obvious consequence occurs when poor quality creates dissatisfied customers and eventually leads to loss of business. However,
quality has many other costs, which can be divided into two categories. The first category consists of costs necessary for achieving high
quality, which are called quality control costs. These are of two types: prevention costs and appraisal costs. The second category consists of
the cost consequences of poor quality, which are called quality failure costs. These include external failure costs and internal failure costs.
Prevention costs are all costs incurred in the process of preventing poor quality from occurring. They include quality planning costs, such as
the costs of developing and implementing a quality plan. Employee training, and maintaining records.
Appraisal costs are incurred in the process of uncovering defects. They include the cost of quality inspections, product testing, Also the costs
of worker time spend measuring quality. Internal failure costs are associated with discovering poor product quality before the product
reaches the customer site. One type of internal failure cost is rework, which is the cost of correcting the defective item. Sometimes the item is
so defective that it cannot be corrected and must be thrown away. This is called scrap, and its costs include all the material, labor, and
machine cost spent in producing the defective product.
External failure costs are associated with quality problems that occur at the customer site. These costs can be particularly damaging
because customer faith and loyalty can be difficult to regain. From customer complaints, product returns, and repairs to warranty claims,
recalls, and even litigation costs resulting from product liability issues. A final component of this cost is lost sales and lost customers.
Cost of defect increases from product design to product production to the max at the customer site.
Prevent internal and external failure costs. The earlier defects are found, the less costly they are to correct. External failure costs tend to be
particularly high for service organizations. The reason is that with a service the customer spends much time in the service delivery system,
and there are fewer opportunities to correct defects than there are in manufacturing. Examples of external failure in services include
overbooking airline flights, long delays in airline service, and lost luggage.
THE EVOLUTION OF TOTAL QUALITY MANAGEMENT (TQM)
, WGU C215 BEST GUIDE 2
Taguchi is known for applying a concept called design of experiment to product design. This method is an engineering approach based on
developing robust design, a design that results in products that can perform over a wide range of conditions. The idea is that it is easier to
design a product that can perform over a wide range of environmental conditions than it is to control the environmental conditions.
Taguchi loss function- Costs of quality increase as a quadratic function as conformance values move away from the target.
THE PHILOSOPHY OF TQM- TQM is the focus on identifying root causes of quality problems and correcting them at the source, as
opposed to inspecting the product after it has been made.
Continuous improvement, called kaizen by the Japanese, requires that the company continually strive to be better through learning and
problem solving. Because we can never achieve perfection, we must always evaluate our performance and take measures to improve it.
The Plan–Do–Study–Act Cycle
Plan The first step in the PDSA cycle is to plan. Managers must evaluate the current process and make plans based on any problems they find.
They need to document all current procedures, collect data, and identify problems.
Do The next step in the cycle is implementing the plan (do).
Study The third step is to study the data collected in the previous phase. The data are evaluated.
Act The last phase of the cycle is to act on the basis of the results of the first three phases.
Benchmarking
Another way companies implement continuous improvement is by studying business practices of companies considered “best in class.” This is
called benchmarking. The ability to learn and study how others do things is an important part of continuous improvement. Company does not
need to be in the same industry.
Employee Empowerment- TQM differentiates between external and internal customers. External customers are those that purchase the
company’s goods and services. Internal customers are employees of the organization who receive goods or services from others in the
company.
Team Approach-One of the most common types of teams is the quality circle, a team of volunteer production employees and their supervisors
whose purpose is to solve quality problems.
Use of Quality Tools
Cause-and-effect diagrams identify potential causes of particular quality problems. A flowchart is a schematic diagram of the sequence of
steps involved in an operation or process. A checklist is a list of common defects and the number of observed occurrences of these defects. It
is a simple yet effective fact-finding tool that allows the worker to collect specific information regarding the defects observed. Control
charts are a very important quality control tool. These charts are used to evaluate whether a process is operating within expectations relative
to some measured value such as weight, width, or volume. Scatter diagrams are graphs that show how two variables are related to one
another. They are particularly useful in detecting the amount of correlation, or the degree of linear relationship, between two variables.
Pareto analysis is a technique used to identify quality problems based on their degree of importance. The logic behind Pareto analysis is that
only a few quality problems are important, whereas many others are not critical. A histogram is a chart that shows frequency distribution of
observed values of a variable. We can see from the plot what type of distribution a particular variable displays, such as whether it has a
normal distribution & whether distribution is symmetrical.
Product Design- A useful tool for translating the voice of the customer into specific technical requirements is quality function deployment
(QFD).
QFD begins by identifying important customer requirements, which typically come from the marketing department. These requirements are
numerically scored based on their importance, and scores are translated into specific product characteristics. Evaluations are then made of
, WGU C215 BEST GUIDE 3
how the product compares with its main competitors relative to the identified characteristics. Finally, specific goals are set to address the
identified problems. The resulting matrix looks like a picture of a house and is often called the house of quality.
Customer Requirements - survey our customers. Competitive Evaluation On the far right of our relationship matrix is an evaluation of
how our product compares to those of competitors. Product Characteristics include the number of zippers and compartments, the weight of
the backpack, the strength of the backpack. The Relationship Matrix The strength of the relationship between customer requirements and
product characteristics. The Trade-off Matrix. Setting Targets The last step in constructing the house of quality is to evaluate competitors’
products relative to the specific product characteristics and to set targets for our own product.
Reliability, the probability that a product, service, or part will perform as intended for a specified period of time under normal conditions.
One way to increase product reliability is to build redundancy into the product design in the form of backup parts.
Process Management
Quality at the source is the belief that it is far better to uncover the source of quality problems and correct it than to discard defective items
after production. TQM extends the concept of quality to a company’s suppliers. Traditionally, companies tended to have numerous suppliers
who engaged in competitive price bidding.
The Malcolm Baldrige National Quality Award (MBNQA)- The Malcolm Baldrige National Quality Award An award given annually to
companies that demonstrate quality excellence and establish best practice standards in industry.
The Deming Prize- The Deming Prize is a Japanese award given to companies to recognize their efforts in quality improvement.
ISO 9000 Standards- A set of international quality standards and a certification demonstrating that companies have met all the standards
specified.
ISO 14000 Standards- A set of international standards and a certification focusing on a company’s environmental responsibility.
• Management systems standards measure systems development and integration of environmental responsibility into the overall
business. Operations standards include the measurement of consumption of natural resources and energy. Environmental systems standards
measure emissions, effluents, and other waste systems.
WHY TQM EFFORTS FAIL
• Lack of a genuine quality culture. Lack of top management support and commitment. Over- and underreliance on statistical
process control (SPC) methods
TOTAL QUALITY MANAGEMENT (TQM) ACROSS THE ORGANIZATION
Marketing’s to understand changing needs and wants of customers by working closely with them. Solid identification of target markets and
who the product is intended for. Finance - for monitoring the financial impact of quality efforts and can be a great motivator. Accounting -
need for exact costing. Human resources - hire employees with the skills necessary. Information systems (IS) increased need for
information accessible to teams throughout the organization.
CHAPTER 6: Statistical Quality Control
TQM focuses on customer-driven quality standards, managerial leadership, continuous improvement, quality built into product and process design, ident ifying
quality problems at the source, and making quality everyone’s responsibility. Statistical quality control (SQC) is the term used to describe the set of statistical
tools used by quality professionals. Statistical quality control can be divided into three broad categories:
Descriptive statistics are used to describe quality characteristics and relationships. Included are statistics such as the mean, the standard deviat ion, the range,
and a measure of the distribution of data. Statistical process control (SPC) involves inspecting a random sample of the output from a process and deciding
whether the process is producing products with characteristics that fall within a predetermined range. SPC an swers the question of whether or not the process is
functioning properly. Acceptance sampling is the process of randomly inspecting a sample of goods and deciding whether to accept the entire lot based on the
results. Acceptance sampling determines whether a batch of goods should be accepted or rejected.
Descriptive statistics are used to describe certain quality characteristics, such as the central te ndency and variability of observed data. Acceptance sampling can
help us do this. It helps us decide whether desirable quality has been achieved for a batch of products and whether to accept or reject the items produced.
Although this information is helpful in making the quality acceptance decision after the product has been produced, it does not help us identify and catch a quality
problem during the production process. For this we need tools in the statistical process co ntrol (SPC) category. However, statistical process control (SPC) tools are
used most frequently because they identify quality problems during the production process. Variation in the production proces s leads to quality defects and lack of
product consistency.
SOURCES OF VARIATION: COMMON AND ASSIGNABLE CAUSES- Common causes of variation are based on random causes that we cannot identify. These
types of variation are unavoidable and are due to slight differences in processing. An important task in quality co ntrol is to find out the range of natural random
variation in a process. 16 ounces of liquid, we may determine that the amount of natural variation is between 15.8 and 16.2 o unces. Assignable causes of variation
- involves those where the causes can be precisely identified and eliminated. Bottles filled with 15.6 ounces of liquid would s ignal a problem. The machine may
need to be readjusted, an assignable cause of variation. Can assign the variation to a particular cause (machine needs to be readjusted) and we can correct th e
problem (readjust the machine).
DESCRIPTIVE STATISTICS- The arithmetic average, or the mean, is a statistic that measures the central tendency of a set of data.
To compute the mean, we simply sum all the observations and divide by the total number of observations.
The Range and Standard Deviation
The first measure is the range, which is the difference between the largest and smallest observations. In example, 15.8 and 16.2 oz. Subtracting them, we get 0.4
oz. Standard deviation- A statistic that measures the amount of data dispersion around the mean.
TOTAL QUALITY MANAGEMENT
DEFINING QUALITY- The difficulty in defining quality exists regardless of product, and this is true for both manufacturing and service
organizations. Today, there is no single, universal definition of quality. Some people view quality as “performance to standards.” Others view it
as “meeting the customer’s needs” or “satisfying the customer.”
Conformance to specifications measures how well the product or service meets the targets and tolerances determined by its designers. The
wait for hotel room service may be specified as 20 minutes, but there may be an acceptable delay of an additional 10 minutes. Fitness for
use focuses on how well the product performs its intended function or use. You can also see that fitness for use is a user-based definition in
that it is intended to meet the needs of a specific user group. Value for price paid is a definition of quality that consumers often use for
product or service usefulness. This is the only definition that combines economics with consumer criteria; it assumes that the definition of
quality is price sensitive. If you take the less expensive seminar, you will feel that you have received greater value for the price. Support
services provided are often how the quality of a product or service is judged. Psychological criteria is a subjective definition that focuses on
the judgmental evaluation of what constitutes product or service quality. Different factors contribute to the evaluation, such as the atmosphere
of the environment or the perceived prestige of the product.
Differences between Manufacturing and Service Organizations- Manufacturing organizations produce a tangible product that can be seen,
touched, and directly measured. Examples include cars, CD players. Quality definitions in manufacturing usually focus on tangible product
features.
The relative importance of these manufacturing quality definitions is based on the preferences of each individual customer.
In contrast to manufacturing, service organizations produce a product that is intangible. Usually, the complete product cannot be seen or
touched.
Conformance to specifications Intangible factors
Degree to which product characteristic meets preset standards. service is experienced, perceptions can be highly subjective.
Performance Consistency
such as acceleration of a vehicle degree to which the service is the same each time
Reliability Responsiveness to customer needs
product will function as expected without failure
Features Courtesy/friendliness
extras that are included beyond the basic characteristics
Durability Timeliness/promptness
expected operational life of the product
Serviceability Atmosphere
how readily a product can be repaired
COST OF QUALITY-The reason quality has gained such prominence is that organizations have gained an understanding of the high cost of
poor quality.
The most obvious consequence occurs when poor quality creates dissatisfied customers and eventually leads to loss of business. However,
quality has many other costs, which can be divided into two categories. The first category consists of costs necessary for achieving high
quality, which are called quality control costs. These are of two types: prevention costs and appraisal costs. The second category consists of
the cost consequences of poor quality, which are called quality failure costs. These include external failure costs and internal failure costs.
Prevention costs are all costs incurred in the process of preventing poor quality from occurring. They include quality planning costs, such as
the costs of developing and implementing a quality plan. Employee training, and maintaining records.
Appraisal costs are incurred in the process of uncovering defects. They include the cost of quality inspections, product testing, Also the costs
of worker time spend measuring quality. Internal failure costs are associated with discovering poor product quality before the product
reaches the customer site. One type of internal failure cost is rework, which is the cost of correcting the defective item. Sometimes the item is
so defective that it cannot be corrected and must be thrown away. This is called scrap, and its costs include all the material, labor, and
machine cost spent in producing the defective product.
External failure costs are associated with quality problems that occur at the customer site. These costs can be particularly damaging
because customer faith and loyalty can be difficult to regain. From customer complaints, product returns, and repairs to warranty claims,
recalls, and even litigation costs resulting from product liability issues. A final component of this cost is lost sales and lost customers.
Cost of defect increases from product design to product production to the max at the customer site.
Prevent internal and external failure costs. The earlier defects are found, the less costly they are to correct. External failure costs tend to be
particularly high for service organizations. The reason is that with a service the customer spends much time in the service delivery system,
and there are fewer opportunities to correct defects than there are in manufacturing. Examples of external failure in services include
overbooking airline flights, long delays in airline service, and lost luggage.
THE EVOLUTION OF TOTAL QUALITY MANAGEMENT (TQM)
, WGU C215 BEST GUIDE 2
Taguchi is known for applying a concept called design of experiment to product design. This method is an engineering approach based on
developing robust design, a design that results in products that can perform over a wide range of conditions. The idea is that it is easier to
design a product that can perform over a wide range of environmental conditions than it is to control the environmental conditions.
Taguchi loss function- Costs of quality increase as a quadratic function as conformance values move away from the target.
THE PHILOSOPHY OF TQM- TQM is the focus on identifying root causes of quality problems and correcting them at the source, as
opposed to inspecting the product after it has been made.
Continuous improvement, called kaizen by the Japanese, requires that the company continually strive to be better through learning and
problem solving. Because we can never achieve perfection, we must always evaluate our performance and take measures to improve it.
The Plan–Do–Study–Act Cycle
Plan The first step in the PDSA cycle is to plan. Managers must evaluate the current process and make plans based on any problems they find.
They need to document all current procedures, collect data, and identify problems.
Do The next step in the cycle is implementing the plan (do).
Study The third step is to study the data collected in the previous phase. The data are evaluated.
Act The last phase of the cycle is to act on the basis of the results of the first three phases.
Benchmarking
Another way companies implement continuous improvement is by studying business practices of companies considered “best in class.” This is
called benchmarking. The ability to learn and study how others do things is an important part of continuous improvement. Company does not
need to be in the same industry.
Employee Empowerment- TQM differentiates between external and internal customers. External customers are those that purchase the
company’s goods and services. Internal customers are employees of the organization who receive goods or services from others in the
company.
Team Approach-One of the most common types of teams is the quality circle, a team of volunteer production employees and their supervisors
whose purpose is to solve quality problems.
Use of Quality Tools
Cause-and-effect diagrams identify potential causes of particular quality problems. A flowchart is a schematic diagram of the sequence of
steps involved in an operation or process. A checklist is a list of common defects and the number of observed occurrences of these defects. It
is a simple yet effective fact-finding tool that allows the worker to collect specific information regarding the defects observed. Control
charts are a very important quality control tool. These charts are used to evaluate whether a process is operating within expectations relative
to some measured value such as weight, width, or volume. Scatter diagrams are graphs that show how two variables are related to one
another. They are particularly useful in detecting the amount of correlation, or the degree of linear relationship, between two variables.
Pareto analysis is a technique used to identify quality problems based on their degree of importance. The logic behind Pareto analysis is that
only a few quality problems are important, whereas many others are not critical. A histogram is a chart that shows frequency distribution of
observed values of a variable. We can see from the plot what type of distribution a particular variable displays, such as whether it has a
normal distribution & whether distribution is symmetrical.
Product Design- A useful tool for translating the voice of the customer into specific technical requirements is quality function deployment
(QFD).
QFD begins by identifying important customer requirements, which typically come from the marketing department. These requirements are
numerically scored based on their importance, and scores are translated into specific product characteristics. Evaluations are then made of
, WGU C215 BEST GUIDE 3
how the product compares with its main competitors relative to the identified characteristics. Finally, specific goals are set to address the
identified problems. The resulting matrix looks like a picture of a house and is often called the house of quality.
Customer Requirements - survey our customers. Competitive Evaluation On the far right of our relationship matrix is an evaluation of
how our product compares to those of competitors. Product Characteristics include the number of zippers and compartments, the weight of
the backpack, the strength of the backpack. The Relationship Matrix The strength of the relationship between customer requirements and
product characteristics. The Trade-off Matrix. Setting Targets The last step in constructing the house of quality is to evaluate competitors’
products relative to the specific product characteristics and to set targets for our own product.
Reliability, the probability that a product, service, or part will perform as intended for a specified period of time under normal conditions.
One way to increase product reliability is to build redundancy into the product design in the form of backup parts.
Process Management
Quality at the source is the belief that it is far better to uncover the source of quality problems and correct it than to discard defective items
after production. TQM extends the concept of quality to a company’s suppliers. Traditionally, companies tended to have numerous suppliers
who engaged in competitive price bidding.
The Malcolm Baldrige National Quality Award (MBNQA)- The Malcolm Baldrige National Quality Award An award given annually to
companies that demonstrate quality excellence and establish best practice standards in industry.
The Deming Prize- The Deming Prize is a Japanese award given to companies to recognize their efforts in quality improvement.
ISO 9000 Standards- A set of international quality standards and a certification demonstrating that companies have met all the standards
specified.
ISO 14000 Standards- A set of international standards and a certification focusing on a company’s environmental responsibility.
• Management systems standards measure systems development and integration of environmental responsibility into the overall
business. Operations standards include the measurement of consumption of natural resources and energy. Environmental systems standards
measure emissions, effluents, and other waste systems.
WHY TQM EFFORTS FAIL
• Lack of a genuine quality culture. Lack of top management support and commitment. Over- and underreliance on statistical
process control (SPC) methods
TOTAL QUALITY MANAGEMENT (TQM) ACROSS THE ORGANIZATION
Marketing’s to understand changing needs and wants of customers by working closely with them. Solid identification of target markets and
who the product is intended for. Finance - for monitoring the financial impact of quality efforts and can be a great motivator. Accounting -
need for exact costing. Human resources - hire employees with the skills necessary. Information systems (IS) increased need for
information accessible to teams throughout the organization.
CHAPTER 6: Statistical Quality Control
TQM focuses on customer-driven quality standards, managerial leadership, continuous improvement, quality built into product and process design, ident ifying
quality problems at the source, and making quality everyone’s responsibility. Statistical quality control (SQC) is the term used to describe the set of statistical
tools used by quality professionals. Statistical quality control can be divided into three broad categories:
Descriptive statistics are used to describe quality characteristics and relationships. Included are statistics such as the mean, the standard deviat ion, the range,
and a measure of the distribution of data. Statistical process control (SPC) involves inspecting a random sample of the output from a process and deciding
whether the process is producing products with characteristics that fall within a predetermined range. SPC an swers the question of whether or not the process is
functioning properly. Acceptance sampling is the process of randomly inspecting a sample of goods and deciding whether to accept the entire lot based on the
results. Acceptance sampling determines whether a batch of goods should be accepted or rejected.
Descriptive statistics are used to describe certain quality characteristics, such as the central te ndency and variability of observed data. Acceptance sampling can
help us do this. It helps us decide whether desirable quality has been achieved for a batch of products and whether to accept or reject the items produced.
Although this information is helpful in making the quality acceptance decision after the product has been produced, it does not help us identify and catch a quality
problem during the production process. For this we need tools in the statistical process co ntrol (SPC) category. However, statistical process control (SPC) tools are
used most frequently because they identify quality problems during the production process. Variation in the production proces s leads to quality defects and lack of
product consistency.
SOURCES OF VARIATION: COMMON AND ASSIGNABLE CAUSES- Common causes of variation are based on random causes that we cannot identify. These
types of variation are unavoidable and are due to slight differences in processing. An important task in quality co ntrol is to find out the range of natural random
variation in a process. 16 ounces of liquid, we may determine that the amount of natural variation is between 15.8 and 16.2 o unces. Assignable causes of variation
- involves those where the causes can be precisely identified and eliminated. Bottles filled with 15.6 ounces of liquid would s ignal a problem. The machine may
need to be readjusted, an assignable cause of variation. Can assign the variation to a particular cause (machine needs to be readjusted) and we can correct th e
problem (readjust the machine).
DESCRIPTIVE STATISTICS- The arithmetic average, or the mean, is a statistic that measures the central tendency of a set of data.
To compute the mean, we simply sum all the observations and divide by the total number of observations.
The Range and Standard Deviation
The first measure is the range, which is the difference between the largest and smallest observations. In example, 15.8 and 16.2 oz. Subtracting them, we get 0.4
oz. Standard deviation- A statistic that measures the amount of data dispersion around the mean.
