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Description

Identify an organisation you are familiar. Discuss how this organisation can apply any 2 TQM concepts discussed in SU3 and SU4, to improve business performance.

Instructions:

1. Use this discussion board to present a concise discussion on the topic presented.

2. Submit this discussion as a GBA team submission.

3. The discussion should not exceed 400 words.

BUS363 Total Quality Management
Seminar 3
Linkage of TQM Topics
What new products/services SU3
should I provide for my • Voice of the Customer
• Voice of the Market
customers?
How do I assure quality in my
new products/ services ?
SU4
• QFD
• FMEA
• SERVQUAL
• Service Blueprinting
How do I manage quality in the SU5/6
• Lean Six Sigma
production/delivery
processes
for my products/ services?
Introduction
The following topics will be covered:
SU4: Designing Quality in Products and Services

Overview of Quality Function Deployment (QFD)

Overview and Construction of Failure Mode and Effects Analysis (FMEA)
Study Unit 4: Designing Quality in Products
and Services
Part I:
QFD
Introduction to QFD

Quality Function Deployment

After determining the customer needs, QFD is a
method for translating customer requirements
into functional product design.
The primary
planning tool is the House of Quality that
translate the VOC into design requirements.

Sometimes this process of translation is referred
to as the voice of the customer.
Benefits of QFD
ReVelle, Moran and Cox (1998) highlighted the benefits of QFD:
Benefits of Quality Function Deployment
Intangible Benefits
Tangible Benefits
1
Reduces product / service
development time
5
Increases customer satisfaction
2
Eliminates most late
engineering changes
6
Facilitates cross‐functional
teamwork
3
Allows early identification of
high‐risk areas
7
Establishes documentation on
product / service development
4
Allows more efficient allocation
of resources
8
Provides a basis for
improvement planning
House of Quality
House of Quality of an automaker
Source: Hauser and
Clausing (1988), “The
House of Quality’, HBR
May-June 1988.
Developing a House of Quality
Eight steps:
1. Develop a list of customer requirements
2. Develop a list of technical requirements along the roof of the
house
3. Demonstrate the relationships between the customer
requirements and technical requirements
4. Identify the correlations between technical requirements in the
roof of the house
5. Perform a competitive assessment of the customer and
technical requirements
6. Prioritise customer requirements
7. Prioritise technical requirements
8. Final evaluation to determine design changes
Group Activity 1: Applying the QFD
Applying the QFD
Based on your company for your GBA:

Translate three customer requirement into three technical requirement (or
“design elements” in the case of a service). Explain each point.

Example: in order to provide reliable and secure payment process
(customer requirement) to its customers, Deliveroo, a food delivery service,
shall ensure its payment gateway and servers are fast and secure (design
elements) so that payments made through its website can be completed
reliably.
Time: 30 minutes
Introduction to Kano Analysis

Kano Analysis is a complementary technique
used together with QFD.

Kano analysis helps an organisation to classify
and prioritise customer requirements into three
categories:



Dissatisfiers / Basic Requirements
Satisfiers / Variable Requirements
Delighter / Latent Requirements
Categories of the Kano Model
1 Dissatisfiers/Basic Requirements
•
•
These features or performance requirements represent the minimum
expectations of customers. Doing them well does not guarantee success but
doing them poorly leads to customer dissatisfaction.
E.g. If coffee is served hot, customer does not notice it.
2 Satisfiers/Variable Requirements
•
•
3
The better or worse these requirements are performed, the higher or lower
will be customer satisfaction level.
E.g. The faster the delivery is made, the more the customer likes it.
Delighters/Latent Requirements
•
•
These are features or factors that go beyond the expectations of customers.
They are difficult to discover. Their absence does not dissatisfy; their
presence excites.
E.g. Complimentary basket of fruits can delight a hotel guest.
Kano Model
Group Activity 2: Applying the Kano Model
Applying the KANO Model
Based on your company for your GBA:

Identify one feature or factor each for Dissatisfiers, Satisfiers and
Delighters based on the KANO Model.

Example: an example of a Satisfier for Deliveroo, a food delivery service, is
the faster the delivery of the ordered food, the more the customer likes it.
If it is slower, then the customer dislikes it.
Time: 30 minutes
Break Time
Break
Time:
15 Mins
Study Unit 4: Designing Quality in Products
and Services
Part II:
FMEA
Introduction to FMEA

Failure Mode and Effects Analysis

Provides a structured and systematic approach to
identify ways in which a system can fail so that
necessary and timely corrective and preventive
actions can be taken to counteract them, and
reduce or eliminate the risks

Answers the question: “how do the systems and
components fail?”
Benefits of FMEA
Foster (2016) explained the follow benefits:
• FMEA enables a systematic review and assessment of component
failure modes to ensure that any failure produces minimal damage to
the product or process, thus assuring the safety of customers using the
product, and employees managing the process.
• FMEA can help to uncover potential oversights, misjudgements, and
errors, which allows for timely prevention and corrective actions to be
identified and implemented.
• FMEA can help to reduce development time and cost by eliminating
many potential failure modes prior to operation of the process, thus
improving product or service reliability.
• The documentation prepared for FMEA can serve as a training tool
for new employees, and can also act as a communication tool for other
professionals who may encounter similar problems, or manage similar
processes.
• The development of an FMEA promotes cross-functional teamwork in
an organisation.
Developing an FMEA
Components in an FMEA include:
Failure Modes and Effects Analysis
1
Potential Failure Modes
4
Ratings
2
Potential Effects
5
Current Controls
3
Potential Causes
6
Recommended Actions
Developing an FMEA
Terms explained:
• Potential Failure Modes: all the potential ways in which the
process, product, service, etc. could fail to perform its
intended function.
• Potential Effects: potential consequences for each failure mode.
• Potential Causes: potential causes of each failure mode.
• Current Controls: existing detection and prevention controls.
• Severity (S): assesses the impact/effect of failure (10 – most
severe)
• Occurrence (O): assesses the likeliness of the cause occurring
(10 – most likely to occur)
• Detection (D): assesses the effectiveness of the controls (10 –
least likely to notice/detect failures)
• Risk Priority Number (RPN): RPN = S x O x D
• Actions Taken: based on RPN, identify the high-priority failure
modes so that actions can be taken to reduce or eliminate the
risks associated
Developing an FMEA
FMEA Template:
Developing an FMEA
Ratings are made to determine risk levels
Severity
(SEV)
Occurrence
(OCC)
Detection
(DET)
How severe is
What is the
What is the
the effect of the
likelihood of the
probability of
failure mode?
failure
the failure being
occurring?
detected before
the impact of
the effect is
realised?
Risk
Priority
Number
RPN
Group Activity 3: Constructing a FMEA
Constructing an FMEA
Based on your company for your GBA:

Identify ONE area (function) in the service it provides that can potentially
fail.

Based on this area, address any ONE potential failure mode by constructing
a FMEA using the FMEA template.

SDP Discussion: Can technology / artificial intelligence be used to
determine potential failures and their related corrective actions?
Time: 40 minutes
Thank You.
BUS363 Total Quality Management
Seminar 4
Linkage of TQM Topics
What new products/services SU3
should I provide for my • Voice of the Customer
• Voice of the Market
customers?
How do I assure quality in my
new products/ services ?
SU4
• QFD
• FMEA
• SERVQUAL
• Service Blueprinting
How do I manage quality in the SU5/6
• Lean Six Sigma
production/delivery
processes
for my products/ services?
Introduction
The following topics will be covered:
SU4: Designing Quality in Products and Services

SERVQUAL

Service Blueprinting
Study Unit 4: Designing Quality in Products
and Services
Part I:
SERVQUAL
Introduction to SERVQUAL

SERVQUAL is developed by Parasuraman, Zeithamel,
and Berry for assessing service quality along with the
five service quality dimensions: tangibles, service
reliability, responsiveness, assurance and empathy.

SERVQUAL considers both customer expectations
and customer perceptions. Both are measured
through a expectations survey and a perceptions
survey, and then assess the gap between the two.

This gap analysis allows an organisation to identify
ways to improve customer satisfaction.
Benefits of SERVQUAL
Foster (2016) highlighted the benefits of SERVQUAL:
Benefits of SERVQUAL
1
Widely accepted as a standard for assessing different dimensions of
service quality
2
Shown to be valid for a variety of service situations
3
Demonstrated to be reliable, meaning different readers interpret the
questions similarly
4
Each SERVQUAL survey is parsimonious in that they have only 22 items
‐ it can be filled out quickly by customers
5
Has a standardised analysis procedure to aid interpretation and analysis
SERVQUAL Analysis
Example of a service provider administering both surveys to 100
customers and the average scores are computed:
Dimension
Perception
Expectation
Difference
(Perception ‐
Expectation
Tangibles
(Item 1‐ 4)
6.60
6.40
0.20
Reliability
(Item 5 – 9)
3.50
6.00
‐2.50
Responsiveness
(Item 10 – 13)
5.50
2.50
3.00
Assurance
(Item 14 – 17)
4.50
3.50
1.00
Empathy
(Item 18 – 22)
3.00
5.00
‐2.00
Based on the tabulation, reliability has the greatest mismatch and
followed by empathy
Group Activity 1: Applying SERVQUAL
Applying SERVQUAL
Based on the example of SERVQUAL Analysis:

Two dimensions identified to have negative readings are: reliability and
empathy.

Applying this situation to your company for your GBA, identify one initiative
each to improve reliability and empathy.
Time: 30 minutes
Break Time
Break
Time:
15 Mins
Study Unit 4: Designing Quality in Products
and Services
Part II:
Service Blueprinting
Introduction to Service Blueprinting

Service Blueprinting helps organisations to think
about
the
service
delivery
process
from
the
customer’s perspective.

The service blueprint is a visual diagram of the
service delivery process.

The diagram shows steps of the service delivery
process as well as the interaction of a customer with
the service system
Benefits of Service Blueprinting
Benefits of Service Blueprinting:
Benefits of Service Blueprinting
1
Provides a general yet precise view of the service delivery process
2
Helps identify potential fail points
3
Can be used to measure the costs of service delivery
4
Helps organisations to understand the impact on customers of failed
service delivery
Service Blueprint
Service Blueprint for a parts painting service
Developing a Service Blueprint
Process of developing a service blueprint
1. Identify processes – process are flowcharted
2. Isolate fail points – identify where service delivery can go wrong and
build in fail-safe measures
3. Establish a time frame – establish a standard execution time and also
consider deviations
4. Analyse profitability – analyse the time-of-service execution standard
that precludes unprofitable business and maintain profitability
Group Activity 2: Flowcharting a Service
Blueprint
Flowcharting a service blueprint
Based on your company for your GBA:

Identify ONE process in the service offered by the organisation.

Based on this service, construct a simple service blueprint of this service.

SDP Discussion: What are the needs of the customer? Does service
blueprinting take into consideration the needs of the customer?
Time: 40 minutes
Thank You.
Course Development Team
Head of Programme
: Assoc Prof Huong Ha
Course Developer(s)
: Chan Yew Pang Dion
Technical Writer
: Lynn Lim, ETP
Video Production
: Mohd Jufrie Bin Ramli, ETP
©
2021 Singapore University of Social Sciences. All rights reserved.
No part of this material may be reproduced in any form or by any means without
permission in writing from the Educational Technology & Production, Singapore
University of Social Sciences.
ISBN 978-981-4787-07-9
Educational Technology & Production
Singapore University of Social Sciences
463 Clementi Road
Singapore 599494
How to cite this Study Guide (APA):
Dion, C. Y. P. (2021). BUS363 Total quality management (study guide). Singapore: Singapore
University of Social Sciences.
Release V1.7
Build S1.0.5, T1.5.21
Table of Contents
Table of Contents
Course Guide
1. Welcome…………………………………………………………………………………………………… CG-2
2. Course Description and Aims…………………………………………………………………. CG-3
3. Learning Outcomes…………………………………………………………………………………. CG-4
4. Learning Material……………………………………………………………………………………. CG-5
5. Assessment Overview……………………………………………………………………………… CG-6
6. Course Schedule………………………………………………………………………………………. CG-9
Study Unit 1: Quality Concepts
Learning Outcomes……………………………………………………………………………………. SU1-2
Overview……………………………………………………………………………………………………. SU1-3
Chapter 1: Quality Concepts………………………………………………………………………. SU1-4
Chapter 2: Quality Gurus…………………………………………………………………………. SU1-12
Summary………………………………………………………………………………………………….. SU1-20
Formative Assessment……………………………………………………………………………… SU1-21
References………………………………………………………………………………………………… SU1-31
Study Unit 2: Total Quality Management (TQM) in the Workplace
Learning Outcomes……………………………………………………………………………………. SU2-2
Overview……………………………………………………………………………………………………. SU2-3
Chapter 3: Total Quality Management……………………………………………………….. SU2-4
i
Table of Contents
Chapter 4: Quality Awards And Standards………………………………………………. SU2-12
Summary………………………………………………………………………………………………….. SU2-20
Formative Assessment……………………………………………………………………………… SU2-21
References………………………………………………………………………………………………… SU2-29
Study Unit 3: Voice of the Customer and Voice of the Market
Learning Outcomes……………………………………………………………………………………. SU3-2
Overview……………………………………………………………………………………………………. SU3-3
Chapter 5: Voice Of The Customer…………………………………………………………….. SU3-4
Chapter 6: Voice Of The Market……………………………………………………………….. SU3-11
Summary………………………………………………………………………………………………….. SU3-17
Formative Assessment……………………………………………………………………………… SU3-18
References………………………………………………………………………………………………… SU3-29
Study Unit 4: Designing Quality in Products and Services
Learning Outcomes……………………………………………………………………………………. SU4-2
Overview……………………………………………………………………………………………………. SU4-3
Chapter 7: QFD…………………………………………………………………………………………… SU4-4
Chapter 8: FMEA……………………………………………………………………………………….. SU4-8
Chapter 9: SERVQUAL…………………………………………………………………………….. SU4-12
Chapter 10: Service Blueprinting………………………………………………………………. SU4-19
Summary………………………………………………………………………………………………….. SU4-26
Formative Assessment……………………………………………………………………………… SU4-27
References………………………………………………………………………………………………… SU4-37
ii
Table of Contents
Study Unit 5: Improving Quality in Products and Services Part I
Learning Outcomes……………………………………………………………………………………. SU5-2
Overview……………………………………………………………………………………………………. SU5-3
Chapter 11: Lean Six Sigma………………………………………………………………………… SU5-4
Chapter 12: Toolkit For Define Phase……………………………………………………….. SU5-14
Chapter 13: Toolkit For Measure Phase…………………………………………………….. SU5-20
Summary………………………………………………………………………………………………….. SU5-32
Formative Assessment……………………………………………………………………………… SU5-33
References………………………………………………………………………………………………… SU5-42
Study Unit 6: Improving Quality in Products and Services Part II
Learning Outcomes……………………………………………………………………………………. SU6-2
Overview……………………………………………………………………………………………………. SU6-3
Chapter 14: Toolkit For Analyse Phase………………………………………………………. SU6-4
Chapter 15: Toolkit For Improve Phase…………………………………………………….. SU6-13
Chapter 16: Toolkit For Control Phase……………………………………………………… SU6-20
Summary………………………………………………………………………………………………….. SU6-26
Formative Assessment……………………………………………………………………………… SU6-27
References………………………………………………………………………………………………… SU6-36
iii
Table of Contents
iv
List of Tables
List of Tables
Table 1.1 Garvin’s Dimensions of Product Quality…………………………………………. SU1-5
Table 1.2 PZ&B’s Dimensions of Service Quality……………………………………………. SU1-7
Table 4.1 PZ&B’s Dimensions of Service Quality………………………………………….. SU4-12
Table 4.2 SERVQUAL Items and Dimensions (Foster, 2016)………………………….. SU4-14
Table 4.3 Calculating the Gaps between Perceptions and Expectations…………. SU4-15
Table 5.1 Lean Six Sigma Applications…………………………………………………………. SU5-11
Table 5.2 Considerations when Collecting Discrete and Continuous Data…….. SU5-21
Table 5.3 Check Sheet…………………………………………………………………………………… SU5-25
Table 5.4 Histogram Patterns and Interpretation………………………………………….. SU5-27
Table 5.5 Defects Record for Product A………………………………………………………… SU5-30
Table 5.6 Sigma Level Conversion Table………………………………………………………. SU5-30
Table 6.1 Symbols used in Process Mapping………………………………………………….. SU6-5
Table 6.2 Types of Service Problems……………………………………………………………….. SU6-8
v
List of Tables
vi
List of Figures
List of Figures
Figure 1.1 Costs of Defects……………………………………………………………………………… SU1-9
Figure 3.1 Reactive Customer-Driven Quality Model…………………………………….. SU3-5
Figure 4.1 Kano Model…………………………………………………………………………………… SU4-6
Figure 4.2 FMEA Worksheet…………………………………………………………………………. SU4-10
Figure 4.3 Gap Analysis using SERVQUAL………………………………………………….. SU4-16
Figure 4.4 Service Blueprint………………………………………………………………………….. SU4-20
Figure 4.5 Profitability Analysis……………………………………………………………………. SU4-24
Figure 5.1 DMAIC………………………………………………………………………………………….. SU5-5
Figure 5.2 Lean Six Sigma Organisational Structure……………………………………….. SU5-6
Figure 5.3 Project Charter……………………………………………………………………………… SU5-15
Figure 5.4 CTQ Tree……………………………………………………………………………………… SU5-18
Figure 5.5 SIPOC for Order Confirmation…………………………………………………….. SU5-19
Figure 5.6 Data Collection Plan…………………………………………………………………….. SU5-20
Figure 5.7 Input, Process and Output Measures…………………………………………… SU5-23
Figure 5.8 Standard Sampling Notations………………………………………………………. SU5-24
Figure 5.9 Histogram…………………………………………………………………………………….. SU5-27
Figure 6.1 AS-IS Process Map…………………………………………………………………………. SU6-5
Figure 6.2 Spaghetti Diagram…………………………………………………………………………. SU6-7
vii
List of Figures
Figure 6.3 Pareto Chart…………………………………………………………………………………… SU6-8
Figure 6.4 Fishbone Diagram………………………………………………………………………….. SU6-9
Figure 6.5 Interrelationship Digraph…………………………………………………………….. SU6-10
Figure 6.6 Scatter Diagram of Processing and Training Times………………………. SU6-11
Figure 6.7 Affinity Diagram………………………………………………………………………….. SU6-14
Figure 6.8 Tree Diagram……………………………………………………………………………….. SU6-15
Figure 6.9 Prioritisation Grid………………………………………………………………………… SU6-16
Figure 6.10 Impact/Effort Matrix………………………………………………………………….. SU6-17
Figure 6.11 Process Decision Programme Chart……………………………………………. SU6-18
Figure 6.12 Features of a Control Chart………………………………………………………… SU6-21
Figure 6.13 provides an overview of common tests for special causes…………… SU6-22
Figure 6.14 Control Charts Selection Tree……………………………………………………… SU6-23
Figure 6.15 Process Management Plan………………………………………………………….. SU6-24
Figure 6.16 Management Dashboard…………………………………………………………….. SU6-25
viii
List of Lesson Recordings
List of Lesson Recordings
Quality Concepts…………………………………………………………………………………………… SU1-11
Quality Gurus……………………………………………………………………………………………….. SU1-19
Total Quality Management……………………………………………………………………………. SU2-11
Quality Awards and Standards…………………………………………………………………….. SU2-19
Voice of the Customer…………………………………………………………………………………… SU3-10
Voice of the Market………………………………………………………………………………………. SU3-16
QFD………………………………………………………………………………………………………………… SU4-7
FMEA……………………………………………………………………………………………………………. SU4-11
SERVQUAL…………………………………………………………………………………………………… SU4-18
Service Blueprinting……………………………………………………………………………………… SU4-25
Lean Six Sigma……………………………………………………………………………………………… SU5-13
Toolkit for the DEFINE Phase………………………………………………………………………. SU5-19
Toolkit for the MEASURE Phase…………………………………………………………………… SU5-31
Toolkit for the ANALYSE Phase……………………………………………………………………. SU6-12
Toolkit for the IMPROVE Phase……………………………………………………………………. SU6-19
Toolkit for the CONTROL Phase………………………………………………………………….. SU6-25
ix
List of Lesson Recordings
x
Course
Guide
Total Quality Management
BUS363
Course Guide
1. Welcome
Presenter: Chan Yew Pang Dion
This streaming video requires Internet connection. Access it via Wi-Fi to
avoid incurring data charges on your personal mobile plan.
Click here to watch the video. i
Welcome to your study of BUS363 Total Quality Management, a 5 credit unit (CU) course.
This Study Guide is divided into two sections – the Course Guide and Study Units.
The Course Guide provides a structure for the entire course. As the phrase implies, the
Course Guide aims to guide you through the learning experience. In other words, it may
be seen as a roadmap through which you are introduced to the different topics within
the broader subject. This Guide has been prepared to help you understand the aims and
learning outcomes of the course. In addition, it explains how the various materials and
resources are organised and how they may be used, how your learning will be assessed,
and how to get help if you need it.
i


CG-2
BUS363
Course Guide
2. Course Description and Aims
Total Quality Management (TQM) is an enhancement to the traditional way of doing
business. TQM focuses on increasing customer satisfaction along with improving business
processes, and uses the goal of customer satisfaction to generate the organisation’s
strategies.
This course provides students with an understanding of the fundamental principles,
concepts and techniques relating to Total Quality Management. This course will first focus
on quality concepts and the contributions of various quality gurus to quality management.
Next, we will explore the implementation process of TQM and the major quality awards
and certifications sought after by organisations in their quest for performance excellence.
This will be followed by the management of the Voice of the Customer and the Voice of
the Market. We will then explore the different techniques that can be used to design and
improve quality in products and services.
CG-3
BUS363
Course Guide
3. Learning Outcomes
Knowledge & Understanding (Theory Component)
By the end of this course, you should be able to:
• Demonstrate the use of quality concepts in the workplace.
• Construct an implementation plan of a Total Quality Management (TQM)
programme in the workplace.
• Examine the importance of managing the Voice of the Customer and Voice of the
Market in the workplace.
• Propose suitable quality techniques to design quality in products and services in
the workplace.
• Evaluate various quality techniques and select suitable techniques to improve
quality in products and services in the workplace.
Key Skills (Practical Component)
By the end of this course, you should be able to:
• Appraise the quality techniques and use them to improve business processes.
• Develop the essential knowledge and interpersonal skills to work effectively in a
team.
• Show well-developed written proficiency.
• Practise giving oral presentations in class and on recorded video in areas related to
Total Quality Management.
CG-4
BUS363
Course Guide
4. Learning Material
The following is a list of the required learning materials to complete this course.
Required Textbook(s)
Foster, S. T. (2016). Managing quality: Integrating the supply chain (6th ed.). Pearson
Education Limited.
CG-5
BUS363
Course Guide
5. Assessment Overview
The overall assessment weighting for the evening classes for this course is as follows:
Assessment
Assignment 1
Description
Weight Allocation
Pre-Course Quiz 01
2%
Pre-Class Quiz 01
2%
Pre-Class Quiz 02
2%
Assignment 2
Tutor-Marked Assignment
18%
Assignment 3
Group-based Assignment
20%
Class Participation
Participation
6%
during
seminars
ECA
End of Course Assessment
Total
50%
100%
The overall assessment weighting for the full online classes for this course is as follows:
Assessment
Assignments
Description
Weight Allocation
Pre-Course Quiz
2%
Quiz 1
2%
Quiz 2
2%
CG-6
BUS363
Course Guide
Assessment
End
of
Course
Description
Weight Allocation
Discussion
10%
Participation
6%
Tutor-Marked Assignment
18%
Group-based Assignment
10%
End of Course Assessment
50%
Assessment
Total
100%
SUSS’s assessment strategy consists of two components: The Overall Continuous
Assessment Score (OCAS) and the Overall Examinable Score (OES), which make up the
overall course assessment score.
a.
OCAS: OCAS constitutes 50% of the final grade for this course.
b.
OES: The End of Course Assessment constitute 50% of the final grade.
To be sure of a pass result, you need to achieve scores of 40% or above in each component.
Your overall rank score is the weighted average of both components.
Passing Mark:
To successfully pass the course, you must obtain at least a mark of 40 percent for the OCAS
and also at least a mark of 40 percent for the OES. For detailed information on the Course
grading policy, please refer to The Student Handbook (‘Award of Grades’ section under
Assessment and Examination Regulations). The Student Handbook is available from the
Student Portal.
CG-7
BUS363
Course Guide
Non-graded Learning Activities:
Activities for the purpose of self-learning are present in each study unit. These learning
activities are meant to enable you to assess your understanding and achievement of the
learning outcomes. The types of activities can be in the form of Formative Assessment,
Quiz, Review Questions, Application-Based Questions or similar. You are expected to
complete the suggested activities either independently and/or in groups.
CG-8
BUS363
Course Guide
6. Course Schedule
To help monitor your study progress, you should pay special attention to your
Course Schedule. It contains study unit related activities including Assignments, Selfassessments, and Examinations. Please refer to the Course Timetable in the Student Portal
for the updated Course Schedule.
Note: You should always make it a point to check the Student Portal for any
announcements and latest updates.
You need to ensure you fully understand the contents of each Study Unit listed in the
Course Schedule. You are expected to complete the suggested activities independently
and/or in groups. It is imperative that you read through your Assignment questions and
submission instructions before embarking on your Assignment. It is also important you
comprehend the Assessment Overview Weighting of your course listed in this Guide.
Manage your time well so you can meet given deadlines and do regular revisions after
completing each unit of study. They will help you retain the knowledge garnered and
prepare you for any required formal assessment. If your course requires an end-ofsemester examination, do look through the Specimen or Past Year Exam Paper which is
available on Canvas.
Although flexible learning – learning at your own pace, space and time – is a hallmark
at SUSS, you are encouraged to engage your instructor and fellow students in online
discussion forums. A sharing of ideas through meaningful debates will help broaden your
learning and crystallise your thinking.
CG-9
BUS363
Course Guide
CG-10
Study
Unit
Quality Concepts
1
BUS363
Quality Concepts
Learning Outcomes
At the end of this unit, you are expected to:
• Apply Garvin’s quality dimensions to assess product quality in the workplace.
• Apply PZ&B’s quality dimensions to assess service quality in the workplace.
• Explain the impact of quality on business performance.
• Interpret the contributions of quality gurus to quality management.
SU1-2
BUS363
Quality Concepts
Overview
This study unit provides the context for understanding quality concepts and the
contributions of various quality gurus to quality management.
Chapter 1 provides an overview of quality concepts. We start by highlighting the different
definitions of quality. We will then cover the dimensions of product quality and service
quality. We will end this chapter with the costs of quality and the impact of quality on
business performance.
Chapter 2 presents the contributions of several quality gurus to quality management. In
this chapter, we will highlight the following contributions:
• 14 Points of Management by W. Edwards Deming
• Juran Trilogy by Joseph M. Juran
• Absolutes of Quality by Philip Crosby
• Seven Tools of Quality Control by Kaoru Ishikawa
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Chapter 1: Quality Concepts
This chapter provides an overview of quality concepts. We start by highlighting the
different definitions of quality. We will then cover the dimensions of product quality and
service quality. We will end this chapter with the costs of quality and the impact of quality
on business performance.
Read
Pages 27 – 30 of Managing Quality: Integrating the Supply Chain, 2016.
1.1 Defining Quality
Quality is such a popular management concept that it should logically possess a clear and
agreed-upon definition. However, this definition proves to be highly elusive. In fact, there
is no single universal definition of quality today. Let us explore some of the more common
definitions of quality.
• Quality means conformance to specifications: Conformance to specifications measures
how well the product or service meets the targets and tolerances determined by its
designers, taking into account of the requirements of customers. Once specifications
have been established, any deviation implies a reduction in quality.
• Quality is fitness for use: Fitness for use focuses on how well a product or service
performs what it is intended to do for a specific user group. Products or services that
best satisfy the needs or wants of a user are regarded as having the highest quality.
• Quality is the degree of excellence at an acceptable price and the control of variability at an
acceptable cost: Quality is defined in terms of product or service usefulness for the
price paid; it assumes the definition of quality is price sensitive. A quality product
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or service is one that provides performance at an acceptable price or conformance
at an acceptable cost.
• Differences in the quantity of some desired ingredient or attribute amount to differences in
quality: Quality is viewed as a precise and measurable variable; products or services
can be ranked according to the amount of the desired attribute that they possess.
• Quality is defined in terms of the support provided after the product or service is purchased:
Quality does not only apply to the product or service itself; it also applies to the
people, processes, and organisational environment associated with it.
Depending on the perspective and approach taken to define quality, you may end up
defining quality differently. Despite the potential conflicts that could arise from the
different definitions of quality, it is important for organisations to leverage on these
different perspectives to produce high quality products and services.
1.2 Assessing Product Quality
Garvin (1984) proposed a framework of eight quality dimensions to assess the quality of
a product. These dimensions are explained in Table 1.1.
Table 1.1 Garvin’s Dimensions of Product Quality
Dimension
Description
Performance
Refers
to
the
primary
operating
characteristics of a product
Features
Attributes of a product that supplement
the product’s basic functioning
Reliability
Probability of a product malfunctioning
within a specified period of time
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Dimension
Description
Conformance
Degree to which a product’s design
and operating characteristics match preestablished standards
Durability
Degree to which a product tolerates stress
or trauma without failing
Serviceability
Ease of repair for a product
Aesthetics
How a product tastes, feels, sounds, looks
and smells
Perceived Quality
Reputation and other indirect measures of
quality
These dimensions were proposed to facilitate strategic quality analysis through a multidimensional approach so that companies can identify the quality niches to compete.
Garvin went on further to explain that a company that chooses to compete on the basis
of quality need not pursue all dimensions at once. Instead, this company may employ a
segmentation strategy, with a few dimensions singled out for special attention. In fact,
companies may not have other choices if competitors have already established broad
reputations for excellence. In such cases, new entrants may only be able to secure a
defensible position if they focus on an as yet untapped dimension of quality.
1.3 Assessing Service Quality
Manufacturing organisations produce a tangible product that can be seen, touched and
directly measured. This means that quality definitions in manufacturing usually focus on
tangible product features, and we can apply Garvin’s quality dimensions to assess product
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quality. Defining quality in service organisations is different from that of manufacturing
organisations in the following aspects:
• Many service attributes are intangible. This means that they cannot be inventoried
or carried in stock over long periods of time.
• Outputs of services are heterogeneous. This means that for many companies, no
two services are exactly alike.
• Production and consumption of services often occur simultaneously. This means
that customers will receive the service exactly at the same time it is produced.
• There is a higher level of customer involvement in the production of services than
it is in the production of goods.
A widely recognised set of service quality dimensions is compiled by Parasuraman,
Zeithamel, and Berry (1985), as illustrated in Table 1.2. These PZ&B’s dimensions have
been used in many service organisations to assess service quality.
Table 1.2 PZ&B’s Dimensions of Service Quality
Dimension
Description
Tangibles
Include the physical appearance of
the
service
facility,
the
equipment,
the personnel, and the communication
materials
Service Reliability
The ability of the service provider to
perform the promised service dependably
and accurately
Responsiveness
The willingness of the service provider
to be helpful and prompt in providing
service
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Dimension
Description
Assurance
The
knowledge
and
courtesy
of
employees and their ability to inspire trust
and confidence
Empathy
The
provision
of
caring
and
individualised attention from the service
organisation
1.4 Costs of Quality
Attaining and missing the desired level of quality in a product or service incur costs. These
costs are referred to as costs of quality. These may include the costs of preventing quality
problems, measuring quality levels, controlling and/or inspecting quality levels, or failing
to accomplish the desired quality levels.
There are three broad categories of costs of quality:
• Prevention Costs: Refer to costs associated with preventing defects and imperfections
from occurring. Prevention costs include costs such as training, quality planning,
process engineering and other costs associated with assuring quality beforehand.
• Appraisal Costs: Refer to costs associated with the direct costs of measuring quality.
In other words, these are costs incurred to determine whether a product or service
is conforming to specifications or customer needs. These can include a variety of
activities such as lab testing, inspection, test equipment and materials, and costs
associated with assessments for quality awards and certifications.
• Failure Costs: Failure costs are roughly categorised into two areas of costs: internal
failure costs and external failure costs.
â—¦ Internal failure costs are associated with on-line failures; these costs are
incurred because products or services do not conform to specifications or
customer needs. This non-conformance is detected prior to being shipped
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or delivered to outside parties. Examples of internal failure costs are
costs associated with scrap, rework, reinspection and retesting. These costs
disappear if no defects exist.
â—¦ External failure costs are incurred because products or services fail to conform
to specifications or customer needs after being delivered to customers.
Examples of external failure costs are costs associated with warranties,
product liabilities, customer dissatisfaction and lost market share.
Companies should invest heavily in prevention and appraisal costs in order to prevent
failure costs. The earlier defects are found in the product lifecycle, the less costly they are
to correct. Figure 1.1 illustrates that detecting and correcting defects during the product
design phase is considerably less expensive than when found at the customer site.
Figure 1.1 Costs of Defects
1.5 Impact of Quality on Business Performance
When implemented correctly, improved quality reduces waste and can lead to reduced
cost and improved profitability over the long-term. This is the essence of a quality chain
reaction described by W. Edwards Deming. Deming, viewed by many as the father of
the quality movement, first proposed the relationship between quality improvement and
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business success in the 1950s through the Deming Value Chain. Through the Deming
Value Chain, he linked quality improvement to reduction in defects and improved
organisational performance. He also stressed quality as a way to increase employment.
Other than business success, implementing quality improvement can also bring about
additional potential benefits over the long-term to a company, its employees and its
customers:
• Benefits to the company:
â—¦ Better financial position due to improved operating efficiencies
â—¦ Improved brand recognition and reputation, leading to greater market share
• Benefits to its employees:
â—¦ Improved communication and teamwork across functions and departments
â—¦ Elimination of the need for rework
â—¦ Increased job satisfaction through employee empowerment
• Benefits to its customers:
â—¦ Customers have a business partner they can count on for the required
products and services
â—¦ Customers can be assured of getting quality products and services repeatedly
at a great value
Review Questions
1.
What are the Garvin’s dimensions of product quality?
2.
What are the PZ&B’s dimensions of service quality?
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Activity 1.1
Select a local service provider and assess the service quality level of that service
provider using the PZ&B’s dimensions of service quality.
Lesson Recording
Quality Concepts
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Chapter 2: Quality Gurus
In this chapter, we will briefly review the contributions of several quality gurus who have
shaped the direction of quality management:
• W. Edwards Deming
• Joseph M. Juran
• Philip Crosby
• Kaoru Ishikawa
Read
Pages 51 – 60 of Managing Quality: Integrating the Supply Chain, 2016.
2.1 W. Edwards Deming
Deming was widely accepted as the world’s preeminent authority on quality management
prior to his death in 1993. Deming is best known for initiating a transformation in the
Japanese manufacturing sector in the aftermath of World War II, which enabled it to
become a major player in the world market. One of his key contributions to quality
management was his 14 Points for Management, which can be summarised as follows:
Point 1: Create constancy of purpose towards improvement of product and service with the aim to
become competitive, stay in business and provide jobs.
Constancy of purpose means that the management has to commit resources over the long
haul to see that the quality job is done.
Point 2: Adopt a new philosophy. We are in a new economic age.
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Now that many organisations have achieved excellent quality at a reasonable cost, service
quality is the next key focus for these organisations. Specification measurements are being
replaced by customer service metrics as important measures of quality.
Point 3: Cease dependence on mass inspection to improve quality.
Organisations should focus on building quality into the product and service in the first
place, rather than depending on inspection on a mass basis to detect quality defects or
imperfections.
Point 4: End the practice of awarding business on the basis of price tag alone.
Organisations should move towards a single supplier for any one item, based on a longterm relationship of loyalty and trust.
Point 5: Improve constantly and forever the system of production and service, to improve quality
and productivity, and thus decrease cost.
This system includes product and process design, training, tools, machines, process flows,
and a myriad of other variables which affect the system of production and service. It is
the responsibility of the management to optimise this system.
Point 6: Institute training on the job.
People must have the necessary training and knowledge to perform their work. The design
of effective training is important to quality improvement.
Point 7: Improve leadership.
It is upper management that has the monetary and organisational authority to oversee
the implementation of quality improvement. In other words, strong management support
and leadership in an organisation is a key factor for successful implementation of quality
improvement efforts.
Point 8: Drive out fear so that everyone may work effectively for the company.
Companies must constantly seek ways to increase value to their customers. To do this,
employees who seek to create change should be most prized, and not considered as
troublemakers. Also, companies should address the fears of employees that quality
improvement efforts are disguised excuses for major layoffs and downsizing.
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Point 9: Break down barriers between departments.
Employees in different departments or functions such as research, design, sales, and
production must work as a team to foresee problems of production and use that may be
encountered with the product or service.
Point 10: Eliminate slogans, exhortations, and targets for the workforce asking for zero defects and
new levels of productivity.
The majority of the causes of low quality and low productivity can be attributed to poor
management of the system, which is thus beyond the power of the workforce. Thus, such
exhortations would only create adversarial relationships. Instead, organisations should
provide means and resources for employees to achieve higher levels of performance such
as empowering employees to make process decisions, and to provide a strategic structure
that ensures alignment of key strategic goals and operational sub-goals.
Point 11: Eliminate work standards on the factory floor.
Management has to provide effective and efficient systems that allow employees to attain
organisational goals.
Point 12: Remove barriers that rob workers of their right to pride in the quality of their work.
The responsibility of supervisors must be changed from striving for sheer numbers
to striving for quality. Employees should also be trusted with decisions and selfdetermination.
Point 13: Institute a vigorous programme of education and self-improvement.
While Point 6 refers to training on the job, Point 13 relates to more generalised education.
A structure that reinforces and rewards learning should be implemented to promote
organisational learning.
Point 14: Put everybody in the company to work to accomplish the transformation.
The transformation is everybody’s job. Point 14 reinforces the fact that everyone in the
organisation is responsible for improving quality.
Students are encouraged to refer to Chapter 2: Quality Theory by Foster (2016) for an indepth discussion of these 14 points.
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2.2 Joseph M. Juran
Joseph Juran was a contemporary of Deming. Like Deming, Juran made unsuccessful
attempts to persuade American managers to focus on quality during the post-World War
II economic boom. When Americans ignored their teachings, the two scholars took their
theories on quality management to Japan and were warmly welcomed and received. Both
Deming and Juran helped to revolutionise the quality of Japan’s industries, and after many
years, they are finally getting much deserved recognition and attention from American
managers.
Juran Trilogy
One of Juran’s major contributions to quality management was his Juran Trilogy, which
enables organisations to achieve breakthroughs in their quality levels. Let us take a closer
look at the three major quality processes in the Juran Trilogy as explained by Evans and
Lindsay (2013):
• Quality Planning
• Quality Control
• Quality Improvement
Quality Planning: The process of preparing to meet quality goals
Quality planning begins with identifying customers, both external and internal,
determining their needs, setting quality goals based on meeting the needs of customers
and suppliers alike at a minimum combined cost, developing product features that
respond to those needs, and developing the processes capable of producing the product
or delivering the service. If quality planning is deficient, then chronic waste occurs.
Quality Control: The process of meeting quality goals during operations
Quality control is used to prevent things from getting worse. Juran stated that quality
control involves determining what to control, establishing units of measurements and
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standards of performance, interpreting the difference between actual performance and the
standard, and taking action on the difference.
Quality Improvement: The process of breaking through to unprecedented levels of
performance
Chronic waste should be considered as an opportunity for quality improvement, which
is the third element of the Juran Trilogy. Juran formalised the breakthrough sequence for
quality improvement, which Evans and Lindsay (2013) highlighted as follows:
• “Proof of the need: To gain the support and commitment from top management to
drive quality improvement within an organisation, information on poor quality
and low productivity could be translated into the language of money, which is the
universal language of top management.
• Project identification: Breakthroughs in quality improvement can only be achieved
via a project-by-project approach. This approach enables a conversion of an
atmosphere of defensiveness or blame into one of constructive action. Participation
in a project also increases the likelihood that the participant will act on the results.
• Organisation for breakthrough: The path from problem to solution consists of two
journeys which must be performed by different individuals with the appropriate
skills:
â—¦ Diagnostic journey (from symptom to cause): Diagnosticians skilled in data
collection, statistics, and other problem-solving tools are needed at this stage.
â—¦ Remedial journey: The remedial journey consists of selecting alternatives
that optimise total cost, implementing remedial action, and dealing with
resistance to change.
• Holding the gains: This final step involves implementing the new standards and
procedures, training the workforce, and instituting controls to make sure that the
breakthroughs do not die over time.”
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2.3 Philip Crosby
Evans and Lindsay (2013) highlighted Philip Crosby’s Absolutes of Quality Management
as follows:
• “Quality means conformance to requirements, not elegance. Requirements must be
clearly stated so that they cannot be misunderstood. Once requirements have
been established, then one can take measurements to determine conformance to
those requirements. The non-conformance detected is the absence of quality. These
requirements must be clearly defined by management and not left by default to
front-line personnel.
• There is no such thing as a quality problem. Quality originates in functional
departments, not in the quality department. Therefore, the burden of responsibility
for such problems falls on these functional departments, and not the quality
department. The quality department should measure conformance, report results,
and lead the drive to develop a positive attitude towards quality improvement.
• There is no such thing as the economics of quality; doing the job right the first time is always
cheaper. 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, which is the expense of
non-conformance. Crosby noted that most companies spend 15% to 20% of their
sales dollars on quality costs. A company with a well-run quality management
programme can achieve a cost of quality that is less than 2.5% of sales, primarily
in the prevention and appraisal categories. Through measuring and publicising
quality cost data, management will be able to identify problems, to select
opportunities for corrective action, and to track quality improvement over time.
• The only performance standard is “Zero Defects (ZD)”. This simply represents the
philosophy of preventing defects in goods and services rather than finding them
after the fact and fixing them.”
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2.4 Kaoru Ishikawa
Ishikawa was the foremost Japanese leader in the Japanese quality movement, until his
death in 1989. He was instrumental in both applying and expanding quality management
concepts from Deming and Juran in Japan. Ishikawa emphasised on quality as a way of
management. He influenced the development of participative, bottom-up view of quality,
which became the trademark of the Japanese approach to quality management.
Seven Tools of Quality Control
One of Ishikawa’s key contributions to quality management was the development and
dissemination of the basic seven quality tools. These seven quality tools are:
• Process Map
• Check Sheet
• Histogram
• Scatter Diagram
• Control Chart
• Cause and Effect Diagram
• Pareto Chart
These quality tools are used for the continuous improvement of processes in an
organisation. We will be examining the use of these tools towards the end of this study
guide.
2.5 The Contingency Perspective
With the various views and perspectives to approach quality management, Foster
(2016) suggests that organisations could adopt a contingency approach, which means
organisations adopt aspects of each of the various approaches that can be used to help
them improve.
The keys to the contingency approach are an understanding of various quality
philosophies, an understanding of the business, and the creative application of the
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appropriate philosophies to the business. The optimal strategy would then be to apply
quality philosophies and approaches to business on a contingency approach.
Review Questions
1.
What are Deming’s 14 Points of Management?
2.
What are the three major quality processes in the Juran Trilogy?
3.
What are Crosby’s Absolutes of Quality Management?
4.
What are Ishikawa’s seven tools of quality control?
Activity 1.2
Discuss the ways in which you can apply the various quality philosophies in your
workplace, in terms of the extent of application and potential implementation pitfalls.
Lesson Recording
Quality Gurus
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Summary
In this study unit, we have provided the context for understanding quality concepts and
the contributions of various quality gurus to quality management.
In Chapter 1, we have provided an overview of quality concepts. We started by
highlighting the different definitions of quality. We then covered the dimensions of
product quality and service quality. We ended this chapter with the costs of quality and
the impact of quality on business performance.
In Chapter 2, we presented the contributions of several quality gurus to quality
management. In this chapter, we highlighted the following contributions:
• 14 Points of Management by W. Edwards Deming
• Juran Trilogy by Joseph M. Juran
• Absolutes of Quality Management by Philip Crosby
• Seven Tools of Quality Control by Kaoru Ishikawa
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Formative Assessment
1.
Fitness for use refers to how well the product meets the targets determined by its
designers, taking into account of the requirements of customers.
a. True
b. False
2.
Under the framework of eight product quality dimensions by Garvin, the dimension
“Performance” refers to the primary operating characteristics of a product.
a. True
b. False
3.
Under the framework of eight product quality dimensions by Garvin, the dimension
“Reliability” refers to the probability of a product malfunctioning within a specified
period of time
a. True
b. False
4.
Under the framework of PZ&B service quality dimensions, the dimension
“Serviceability” refers to the physical appearance of the service facility, the
equipment, the personnel and the communication materials
a. True
b. False
5.
Prevention costs refer to the costs associated with the direct costs of measuring
quality.
a. True
b. False
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6.
Quality Concepts
One of Deming’s key contributions to quality management was his 14 Points of
Management.
a. True
b. False
7.
Quality Planning is a major quality process in the Juran Trilogy.
a. True
b. False
8.
In the Absolutes of Quality Management, Zero Defects is not the only performance
standard.
a. True
b. False
9.
Ishikawa is known for democratising statistics.
a. True
b. False.
10. Pareto Chart is a part of the seven tools of quality control.
a. True
b. False.
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Solutions or Suggested Answers
Chapter 1 Review Questions
1.
What are the Garvin’s dimensions of product quality?
Dimension
Description
Performance
Refers to the primary operating
characteristics of a product
Features
Attributes
of
supplement
a
the
product
product’s
that
basic
functioning
Reliability
Probability
of
a
product
malfunctioning within a specified
period of time
Conformance
Degree to which a product’s design
and operating characteristics match
pre-established standards
Durability
Degree to which a product tolerates
stress or trauma without failing
Serviceability
Ease of repair for a product
Aesthetics
How a product tastes, feels, sounds,
looks and smells
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Dimension
Description
Perceived Quality
Reputation
and
other
indirect
measures of quality
2.
What are the PZ&B’s dimensions of service quality?
Dimension
Description
Tangibles
Include the physical appearance of
the service facility, the equipment,
the personnel, and the communication
materials
Service Reliability
The ability of the service provider
to perform the promised service
dependably and accurately
Responsiveness
The
willingness
of
the
service
provider to be helpful and prompt in
providing service
Assurance
The knowledge and courtesy of
employees and their ability to inspire
trust and confidence
Empathy
The
provision
of
caring
and
individualised attention from the
service organisation
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Chapter 2 Review Questions
1.
What are Deming’s 14 Points of Management?
Deming’s 14 Points of Management
1.
Create constancy of purpose.
2.
Adopt new philosophy. We are in a new economic age.
3.
Cease dependence on mass inspection to improve quality.
4.
End awarding business on the basis of price tag alone.
5.
Constantly improve the system.
6.
Institute training on the job.
7.
Improve leadership.
8.
Drive out fear so that everyone may work effectively for the
company.
9.
Break down barriers between departments.
10.
Eliminate slogans, exhortations and targets for the workforce.
11.
Eliminate work standards on the factory floor.
12.
Remove barriers that rob workers of their right to pride in the quality
of their work.
13.
Institute a vigorous programme of education and self-improvement.
14.
Put everybody in the company to work to accomplish the
transformation.
2.
What are the three major quality processes in the Juran Trilogy?
• Quality Planning: The process of preparing to meet quality goals
• Quality Control: The process of meeting quality goals during operations
• Quality Improvement: The process of breaking through to unprecedented
levels of performance
3.
What are Crosby’s Absolutes of Quality Management?
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• Quality means conformance to requirements, not elegance.
• There is no such thing as a quality problem.
• There is no such thing as the economics of quality; doing the job right the
first time is always cheaper.
• The only performance measurement is the cost of quality, which is the
expense of non-conformance.
• The only performance standard is “Zero Defects (ZD)”. This simply
represents the philosophy of preventing defects in goods and services rather
than finding them after the fact and fixing them.
4.
What are Ishikawa’s seven tools of quality control?
• Process Map
• Check Sheet
• Histogram
• Scatter Diagram
• Control Chart
• Cause and Effect Diagram
• Pareto Chart
Formative Assessment
1.
Fitness for use refers to how well the product meets the targets determined by its
designers, taking into account of the requirements of customers.
a.
True
Incorrect. Conformance to specifications refers to how well the product
meets the targets determined by its designers, taking into account of the
requirements of customers. Refer to Section 1.1 of the Study Guide.
b.
False
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Correct. Fitness for use focuses on how well a product or service performs
what it is intended to do for a specific user group. Refer to Section 1.1 of
the Study Guide.
2.
Under the framework of eight product quality dimensions by Garvin, the dimension
“Performance” refers to the primary operating characteristics of a product.
a.
True
Correct. “Performance” refers to the primary operating characteristics of a
product. Refer to Section 1.2 of the Study Guide.
b.
False
Incorrect. “Performance” refers to the primary operating characteristics of a
product. Refer to Section 1.2 of the Study Guide.
3.
Under the framework of eight product quality dimensions by Garvin, the dimension
“Reliability” refers to the probability of a product malfunctioning within a specified
period of time
a.
True
Correct. “Reliability” refers to the probability of a product malfunctioning
within a specified period of time. Refer to Section 1.2 of the Study Guide.
b.
False
Incorrect! “Reliability” refers to the probability of a product malfunctioning
within a specified period of time. Refer to Section 1.2 of the Study Guide.
4.
Under the framework of PZ&B service quality dimensions, the dimension
“Serviceability” refers to the physical appearance of the service facility, the
equipment, the personnel and the communication materials
a.
True
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Incorrect. “Serviceability” is not a PZ&B service quality dimension. Refer to
Section 1.3 of the Study Guide.
b.
False
Correct. “Tangibles” refers to the physical appearance of the service
facility, the equipment, the personnel and the communication materials.
Refer to Section 1.3 of the Study Guide.
5.
Prevention costs refer to the costs associated with the direct costs of measuring
quality.
a.
True
Incorrect. Prevention costs refer to the costs associated with preventing
defects from occurring. Refer to Section 1.4 of the Study Guide.
b.
False
Correct. Prevention costs refer to the costs associated with preventing
defects from occurring. Refer to Section 1.4 of the Study Guide.
6.
One of Deming’s key contributions to quality management was his 14 Points of
Management.
a.
True
Correct. His 14 Points of Management is one of Deming’s key
contributions to quality management. Refer to Section 2.1 of the Study
Guide.
b.
False
Incorrect. His 14 Points of Management is one of Deming’s key contributions
to quality management. Refer to Section 2.1 of the Study Guide.
7.
Quality Planning is a major quality process in the Juran Trilogy.
a.
True
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Correct. Quality Planning is a major quality process in the Juran Trilogy.
Refer to Section 2.2 of the Study Guide.
b.
False
Incorrect. Quality Planning is a major quality process in the Juran Trilogy.
Refer to Section 2.2 of the Study Guide.
8.
In the Absolutes of Quality Management, Zero Defects is not the only performance
standard.
a.
True
Incorrect. The only performance standard is “Zero Defects” in Crosby’s
Absolutes of Quality Management. Refer to Section 2.3 of the Study Guide.
b.
False
Correct. The only performance standard is “Zero Defects” in Crosby’s
Absolutes of Quality Management. Refer to Section 2.3 of the Study Guide.
9.
Ishikawa is known for democratising statistics.
a.
True
Correct. As the developer of the Seven Tools of Quality Control, Ishikawa
is known for democratising statistics. Refer to Section 2.4 of the Study
Guide.
b.
False.
Incorrect. As the developer of the Seven Tools of Quality Control, Ishikawa
is known for democratising statistics. Refer to Section 2.4 of the Study Guide.
10. Pareto Chart is a part of the seven tools of quality control.
a.
True
Correct. Pareto Chart is one of the seven tools of quality control. Refer to
Secton 2.4 of the Study Guide.
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b.
False.
Incorrect. Pareto Chart is one of the seven tools of quality control. Refer to
Secton 2.4 of the Study Guide.
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References
Evans, J. R., & Lindsay, W. M. (2013). Managing for quality and performance excellence.
Cengage Learning.
Foster, S. T. (2016). Managing quality: Integrating the supply chain. Pearson Education
Limited.
Garvin, D. A. (1984). What does ‘Product Quality’ really mean? MIT Sloan Management
Review (pre-1986), 26(1), 25-44.
Parasuraman, A., Zeithamel, V. A., & Berry, L. L. (1985). A conceptual model of service
quality and its implications for future research. Journal of Marketing, 49(Fall),
41-50.
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Unit
2
Total Quality Management (TQM)
in the Workplace
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Learning Outcomes
At the end of this unit, you are expected to:
• Propose the components of a TQM programme.
• Discuss the pitfalls that could be encountered when implementing TQM in the
workplace.
• Demonstrate the use of quality awards to manage quality.
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Overview
In this study unit, we will cover the implementation process of Total Quality Management
(TQM) and the major quality awards and certifications sought after by organisations in
their quest for performance excellence.
Chapter 3 explores the implementation process of TQM. We start by discovering the
different definitions of TQM. Next, we will highlight the principles of TQM and the
different strategies of implementing TQM. We will end this chapter with the pitfalls that
could be encountered when implementing TQM in an organisation.
Chapter 4 explores the various quality awards and standards organisations can strive
for in their journey towards business excellence. We will first highlight the major quality
awards, namely the Deming Prize, the Malcolm Baldrige National Quality Award and
the Singapore Quality Award. We will conclude this chapter with a discussion of ISO
9000:2015.
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Chapter 3: Total Quality Management
This chapter explores the implementation process of Total Quality Management (TQM).
We start by discovering the different definitions of TQM. Next, we will highlight the
principles of TQM and the different strategies of implementing TQM. We will end this
chapter with the pitfalls that could be encountered when implementing TQM in an
organisation.
3.1 Defining Total Quality Management (TQM)
Total Quality Management (TQM) is an enhancement to the traditional way of doing
business. TQM focuses on increasing customer satisfaction along with improving business
processes, and uses the goal of customer satisfaction to generate the organisation’s
strategies. We will begin this chapter with the various definitions of TQM.
The British Quality Association (1989) defines TQM as:
“…a corporate business management philosophy which recognises that customer
needs and business goals are inseparable. It is applicable to both industry and
commerce. It ensures maximum effectiveness and efficiency within a business
and secures commercial leadership by putting in place processes and systems
which will promote excellence, prevent errors and ensure that every aspect of
the business is aligned to customer needs and the advancement of business goals
without duplication or waste of effort. The commitment to TQM originates at
the Chief Executive level in a business and is promoted in all human activities.
The accomplishment of quality is thus achieved by personal involvement and
accountability, devoted to a continuous improvement process, with measurable
levels of performance by all concerned. It involves every department, function
and process in a business and the active commitment of all employees to meeting
customer needs. In this regard, the customers of each employee are separately and
individually identified.”
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John Oakland (1989) defines TQM as:
“…a way of managing to improve the effectiveness, flexibility and competitiveness
of a business as a whole. It applies just as much to service industries as it does to
manufacturing. It involves whole companies getting organised in every department,
every activity and every single person at every level.”
Besterfield et al. (2002) define TQM as:
“…a proven technique to guarantee survival in world-class competition. Only
by changing the actions of management will culture and actions of an entire
organisation be transformed. TQM is the art of managing the whole to achieve
excellence.”
Different people define TQM differently. At a high level, we can view TQM as a global
approach (rather than a piece-meal approach) to focusing the goals of employees at all
levels and in all business areas of an organisation on the same objective: achieving quality,
as defined by their customers, in a timely and cost-effective manner.
3.2 Principles of TQM
TQM principles include (but are not limited to):
• A Focus on the Customer: The key to an effective TQM programme is its focus on the
customer. Managers and employees have to continually find new ways to meet or
exceed expectations of their customers, both internally and externally, in order to
achieve customer satisfaction. In other words, the concept of customer satisfaction
applies equally to not only the external customers who buy an organisation’s
products or services, but also to the internal customers within the organisation.
• Top Management Support and Direction: Top management must drive TQM in the
organisation. Senior managers must exhibit personal support by using quality
improvement concepts in their management style, incorporating quality in their
strategic planning processes, facilitating employee empowerment, and providing
resources for employees to participate in the TQM programme.
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• Long-Term Commitment: TQM is the responsibility of everyone in the organisation.
It requires a long-term commitment to achieving total quality and customer
satisfaction, from the top management which then cascades down throughout the
entire organisation.
• Employee Involvement: TQM seeks to encourage people to view the organisation as
a whole system made up of many interrelated processes, all of which focus on the
common goal of satisfying the customers’ expectations in a timely and cost-effective
manner. This often entails deploying cross-functional project teams to improve
business processes or solving quality problems. The fact that they represent
different functional areas helps not only to bring new data and perspectives
to the resolution of a business issue, but also to improve the likelihood of
implementing subsequent improvement solutions. Not only should management
facilitate and encourage cross-functional teamwork in the organisation, investment
in training should also be made to support the TQM implementation efforts in the
organisation.
• Effective and Renewed Communication: Regular and meaningful communication from
all levels must occur to reinforce the commitment of TQM in the organisation.
• Process Management: A quality product comes from a quality process. If the source of
quality problems is from the management of the process, it is far better to uncover
the source of quality problems and correct it than to discard defective items after
production. Else, the problem will continue.
• Continual Improvement: An organisation must continually strive to improve all
business processes. Continual improvement drives an organisation to be both
analytical and creative in finding ways to become more competitive, effective and
efficient at meeting or exceeding customer expectations.
• Reliance on Standards and Measures: Performance measures such as uptime,
percent nonconforming, defect rate and customer satisfaction should be identified,
determined and monitored in order for the organisation to initiate corrective
actions, set priorities and evaluate progress. Standards and measures should reflect
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customers’ requirements. The emphasis is on “doing the right things right the first
time”.
• Managing Supplier Quality: Traditionally, suppliers have only been viewed as a
source of business inputs and organisations are simply looking for ways to continue
to drive costs down – typically by demanding lower prices from suppliers. When
materials arrive from suppliers, an inspection is carried out to assess their quality.
TQM extends the concept of quality to suppliers and ensures that they engage in the
same quality practices. If suppliers meet the required quality standards, materials
should not have to be inspected upon arrival.
These principles are considered so essential to TQM that many organisations define them
as a set of core values on which the organisation is to operate.
3.3 Implementing TQM
For the purpose of this module, we may consider that TQM implementation goes through
two key phases:
Diagnosis
Top management commitment and support for implementing TQM in the organisation
needs to be first developed and confirmed. This will drive the following aspects of TQM
implementation:
• Customer needs are identified and prioritised. The organisation will then establish
how it will meet those needs through its products, services and processes.
• Burning issues are identified and pilot project teams are formed to resolve these
issues. Also, this allows the management to assess the magnitude of the resources
needed and the level of management involvement required to implement TQM in
an organisation on a small scale.
This phase ends with the top management setting a multi-year TQM implementation plan
for strategic breakthrough in terms of product and service quality improvement.
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Implementation
This phase focuses on managing and driving TQM momentum by organising and
coordinating an organisation-wide implementation of the multi-year plan developed in
the first phase. This can be supported by:
• Ensuring organisation-wide support and commitment for the TQM programme in
all levels of the organisation.
• Ensuring that each employee understands the work processes with which he or
she works, and knows the needs and demands of the customers of those processes.
With this knowledge, everyone can undertake continuous improvement of those
processes and monitor improvements after changes have been made in those
processes.
• Utilising both functional and cross-functional teams to tackle business issues with
varying complexity levels. Lower levels of management and existing teams can
identify problem areas which the teams can tackle.
• Implementing an ongoing evaluation of the progress of TQM implementation
and the incorporation of improvements and “lessons learned” into the TQM
programme for future years.
Strategies to support TQM implementation in an organisation may include:
• Guru approach: This method takes the teachings and writings of a quality thinker
and use them as a benchmark to determine where the organisation has deficiencies
and then to begin to make appropriate changes to remedy those deficiencies. For
example, an organisation may use the Deming’s 14 points as basis for implementing
a TQM programme.
• Prize Criteria Approach: An organisation uses the criteria of quality awards such as
the Deming Prize, the Malcolm Baldrige National Quality Award and the Singapore
Quality Award as a basis of developing a framework for TQM implementation.
TQM implementation under this approach is focused on meeting the criteria
benchmarks of the respective quality awards.
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• Company Model Approach: In this approach, organisational teams would visit “bestin-class” companies to learn best practices and integrate these practices into their
own organisational model which is adapted for their specific organisations.
• Ad-hoc Approach: In this approach, organisations may select and incorporate
relevant aspects from different methodologies and concepts to design and develop
their own organisational model of implementing TQM.
3.4 Pitfalls When Implementing TQM
Identifying and avoiding the common pitfalls when implementing TQM can keep a TQM
programme from running aground. These pitfalls can include:
• Lack of management support: TQM requires a long-term commitment to achieving
total quality and customer satisfaction, from the top management which then
cascades down throughout the entire organisation. Implementing TQM without the
support and commitment of top management would result in a lack of direction
and potential failure of the programme.
• Inability to change organisational culture: While it is difficult for individuals to change
their way of doing things, it is even more difficult for an organisation to make
a cultural change. Motivational slogans, speeches and campaigns may only be
effective to a certain extent or for a short period of time. Organisations need to
spend time planning for the cultural aspects of implementing a TQM programme
to increase their chances of success.
• Failure to continually improve: Continual improvement is a major thrust of TQM.
Organisations must continually strive to become more competitive, effective and
efficient at meeting or exceeding customer expectations. A lack of continual
improvement of the processes, products, and services in an organisation will even
leave the leader of the pack in the dust.
• Inadequate teamwork: TQM often entails deploying cross-functional project teams
to improve business processes or solving quality problems. If the company is
organised around functional silos with little communication taking place between
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organisational functions, it would result in a potential misalignment of business
goals and objectives, leading to a failure of the TQM programme. This could also
happen if the management does not facilitate or even encourage cross-functional
teamwork in the organisation.
• Lack of continuous training and education: Training and education is an ongoing
process for everyone in the organisation. For TQM to succeed, management would
need to invest in training not only on the principles of TQM, but also in areas such as
communication skills, quality improvement tools, and problem-solving techniques.
• Failure to start small and learn from pilot programmes: Starting small has two
advantages:
â—¦ It can quickly show success, and because it is a small project, improvements
can be seen relatively faster, thus motivating people to do more and support
the TQM programme in the organisation.
â—¦ It allows the management to identify the pitfalls and difficulties during the
implementation.
• Lack of access to data and results: Performance measures reflecting customers’
requirements should be identified, determined and monitored in order for the
organisation to initiate corrective actions, set priorities and evaluate progress.
Without access to data or quick retrieval of data, effective and timely decisions
cannot be made.
Review Questions
1.
List the principles of TQM.
2.
List the strategies of implementing TQM.
3.
Explain the potential pitfalls that could be encountered by organisations when
implementing TQM.
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Lesson Recording
Total Quality Management
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Chapter 4: Quality Awards And Standards
In this chapter, we will explore the various quality awards and standards organisations
can strive for in their journey towards business excellence. We will first highlight the major
quality awards, namely the Deming Prize, the Malcolm Baldrige National Quality Award
and the Singapore Quality Award. We will conclude this chapter with a discussion of
ISO 9000:2015. Detailed discussions on each award and standard are beyond the scope
of this module, and students are encouraged to consult the relevant literature for further
reference.
Read
Pages 78 – 95 of Managing Quality: Integrating the Supply Chain, 2016.
4.1 Overview
Today’s customers demand and expect high quality. Organisations need to make quality
a key business priority. Else they would risk long-run survival. The importance of
quality has given rise to national quality awards and certifications sought after by many
organisations. These organisations have realised the necessity to assess themselves against
the criteria of these quality awards, if not to enter for the awards or prizes, then certainly as
an excellent basis for self-audit and review, to highlight areas for priority attention and to
provide internal and external benchmarking. To many of these organisations, the ability to
judge progress against an accepted set of criteria would be most valuable and informative.
4.2 Deming Prize
The source of information for this section on the Deming Prize is from “The Deming Prize
Committee” and “Japanese Union of Scientists and Engineers (JUSE)”.
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The Deming Prize was established in 1951 by the Japanese Union of Scientists and
Engineers (JUSE) in commemoration of W. Edwards Deming for his contribution to the
post-war Japanese economy. The Deming Prize is awarded to individuals, groups or
organisations that have contributed to the field of Total Quality Management.
The examination and award process is performed under the direction of the JUSE Deming
Award Committee. There are 4 principal categories:
• The Deming Prize: This prize is awarded to organisations (such as companies,
institutes, divisions of organisations, etc.) which have implemented TQM
suitable for their management philosophies, scope/type/scale of business, and
management environment.
• The Deming Prize for Individuals: This prize is awarded to individuals or groups
who have made outstanding contributions to the study of TQM or statistical
methods used for TQM, or those who have made outstanding contributions in the
dissemination of TQM.
• The Deming Distinguished Service Award for Dissemination and Promotion (Overseas):
This prize is awarded to individuals whose primary activities are outside Japan,
and who have made outstanding contributions in the dissemination and promotion
of TQM.
• Deming Grand Prize: This prize is given to organisations that had received the
Deming Prize or the Deming Grand Prize, and have maintained and further
enhanced the level of TQM for more than three years after the winning of the
Deming Prize or the Deming Grand Prize.
Under the evaluation criteria of the Deming Prize, JUSE explains that there are six basic
categories being evaluated:
• “Management policies and their deployment regarding quality management: Under clear
management policies that reflect its management principles, industry, business,
scope and business environment, the organisation has established challenging,
quality-oriented, customer-driven business objectives and strategies. Management
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policies are deployed throughout the organisation and implemented in a united
way.
• New product development and/or work process innovation: The organisation actively
develops new products (including services), or innovates work processes. New
products need to satisfy customers’ requirements. In the case of work process
innovation, it must contribute greatly to the efficiency of business management.
• Maintenance and improvement of product and operational qualities: Under the aspect
of daily work management, through standardisation and education/training, the
organisation rarely has troubles in daily work and major operations in each
department have been stabilised. Under the aspect of continuous improvement, the
organisation makes improvements on quality and other aspects of its business in a
planned and continual manner.
• Establishment of systems for managing quality, quantity, delivery, costs, etc.: The
organisation has established the necessary systems among the ones listed and
utilising them effectively.
• Collection and analysis of quality information and utilisation of information technology:
The organisation collects quality information from the market and within its
organisation in an organised manner and utilises it effectively. Together with
the use of statistical methods and information technology, such information is
utilised effectively for developing new products and maintaining and improving
operational qualities.
• Human resources development: The organisation educates and develops its human
resources in a planned manner resulting in maintaining and improving product
and operational qualities.”
As stated by JUSE, the Deming Prize examination does not require applicants to conform
to a model provided by the Deming Prize Committee. Instead, the applicants are expected
to understand their current situation, establish their own themes and objectives and
improve and transform themselves organisation-wide. Students are advised to refer to the
latest version of the Application Guide of the Deming Prize for further reference.
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4.3 Malcolm Baldrige National Quality Awards
The Malcolm Baldrige National Quality Award (MBNQA) was established in 1987 and
named after the former U.S. Secretary of Commerce, Malcolm Baldrige, who was a
proponent of quality management as a key to U.S. prosperity and long-term strength.
The MBNQA is the highest level of national recognition for performance excellence that a
U.S. organisation can achieve. It is designed to recognise organisations that establish and
demonstrate high quality standards.
The evaluation categories of this award can be listed as follows:
• Leadership: Evaluates the extent to which top management is personally involved
in creating and reinforcing goals, values, directions, customer involvement, and a
variety of other issues.
• Strategic Planning: Focuses on how the company establishes strategic directions and
how it sets tactical action plans to implement the strategic plans.
• Customer Focus: Addresses how well a company collects market and customer
information, and acts on this information.
• Measurement, Analysis and Knowledge Management: Relates to the organisation’s
selection, management, and use of information to support company processes and
to improve the organisational performance.
• Workforce Focus: Addresses the management of human resources in the
organisation.
• Operation Focus: Examines key aspects such as customer focus in design, work
system, design for services and products, support processes, and processes relating
to partners.
• Results: Documents the results of the other categories and requires a series of
tables and graphs that demonstrate the operational and business results of the
organisation.
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The Baldrige criteria have evolved from simple award criteria to a general framework
for quality evaluation. Many organisations use these criteria to evaluate their own
performance and set quality targets even if they are not planning to formally compete for
the award. More information about the Malcolm Baldrige National Quality Award can be
found at http://www.nist.gov/baldrige/.
4.4 Singapore Quality Award for Business Excellence
This section has been compiled from the website http://www.spring.gov.sg on the
Business Excellence Initiative by SPRING Singapore.
The Business Excellence Framework
The Business Excellence initiative was launched to help organisations strengthen their
management systems and processes for high performance through the adoption of the
Business Excellence framework, which is internationally benchmarked with business
excellence frameworks such as the Malcolm Baldrige National Quality Award and the
Deming Prize. It helps organisations know where they are on the excellence journey and
what they need to do to achieve a higher level of performance, through the use of various
business excellence standards in this framework.
In the framework, there are seven categories used to assess an organisation:
• Leadership: This category focuses on the organisation’s leadership, mission, vision
and values, governance system as well as responsibility to the community and the
environment.
• Customers: This category focuses on how the organisation understands market and
customer requirements, and future trends to build relationships with customers
and create superior customer experiences.
• Strategy: This category focuses on the development and implementation of strategic
plans based on the organisation’s external environment and internal capabilities.
The plans should address current and future challenges as well as the organisation’s
mission and vision.
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• People: This category focuses on how the potential of employees is effectively
harnessed to achieve excellence in the organisation.
• Processes: This category focuses on the management of key and support processes
to achieve the organisation’s strategic goals.
• Knowledge: This category focuses on how the organisation harnesses information for
learning, planning and decision-making, which includes competitive analysis and
benchmarking. This helps the organisation to determine performance and drive
improvement and innovation for superior performance.
• Results: This category focuses on the organisation’s performance in key areas.
This includes qualitative and quantitative results, as well as comparative data and
competitive analysis. The indicators should go beyond current levels to include
relevant indicators of future success.
Certifications and awards under this business excellence initiative include:
• Singapore Quality Class (SQC): The SQC is the certification for the overall business
excellence standard. The SQC recognises organisations that have attained robust
business fundamentals and met standards for good business performance.
• Singapore Quality Award (SQA): The SQA is the most prestigious award conferred
on organisations in Singapore in recognition of their attainment of world-class
standards of performance excellence.
• Singapore Quality Award with Special Commendation: This award recognises past SQA
winners for scaling greater heights of business excellence and for demonstrating
sustainable global leadership in key business areas, products or services as
compared to when they first won the SQA.
4.5 ISO 9000:2015
This section has been compiled from the website https://www.iso.org on ISO:
International Organisation for Standardisation.
The ISO 9000 family of standards addresses various aspects of quality management and
provides guidance and tools for organisations who want to ensure that their products
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and services consistently meet customers’ requirements, and that quality is consistently
improved.
The following seven principles provide the foundation for ISO 9000:2015:
1.
“Customer focus: The primary focus of quality management is to meet customer
requirements and to strive to exceed customer expectations.
2.
Leadership: Leaders at all levels establish unity of purpose and direction and
create conditions in which people are engaged in achieving the organisation’s
quality objectives.
3.
Engagement of people: Competent, empowered and engaged people at all levels
throughout the organisation are essential to enhance its capability to create and
deliver value.
4.
Process approach: Consistent and predictable results are achieved more effectively
and efficiently when activities are understood and managed as interrelated
processes that function as a coherent system.
5.
Improvement: Successful organisations have an ongoing focus on improvement.
6.
Evidence-based decision making: Decisions based on the analysis and evaluation of
data and information are more likely to produce desired results.
7.
Relationship management: For sustained success, an organisation manages its
relationships with interested parties, such as suppliers.”
Note the similarities between these principles and the evaluation categories of the quality
awards thus covered so far
Review Questions
1.
List the categories being evaluated under the Deming Prize.
2.
List the categories being evaluated under the Malcolm Baldrige National Quality
Award.
3.
List the categories being evaluated under the Singapore Quality Award.
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List the principles that provide the foundation for ISO 9000:2015.
Lesson Recording
Quality Awards and Standards
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Summary
In this study unit, we covered the implementation process of Total Quality Management
(TQM) and the major quality awards and certifications sought after by organisations in
their quests for performance excellence.
In Chapter 3, we started by discovering the different definitions of TQM. Next, we
highlighted the principles of TQM and the strategies of implementing TQM, before ending
the chapter with the pitfalls that could be encountered when implementing TQM in an
organisation.
In Chapter 4, we highlighted the major quality awards, namely the Deming Prize,
the Malcolm Baldrige National Quality Award and the Singapore Quality Award. We
concluded this chapter with a discussion of ISO 9000:2015.
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Formative Assessment
1.
TQM stands for Total Quality Management.
a. True
b. False
2.
The concept of customer satisfaction applies equally to not only the external
customers who buy an organisation’s products or services, but also to the internal
customers within the organisation.
a. True
b. False
3.
For TQM implementation to be successful, top management needs to drive TQM in
the organisation.
a. True
b. False
4.
TQM is not the responsibility of everyone in the organisation.
a. True
b. False
5.
TQM extends the concept of quality to suppliers and ensures that they engage in the
same quality practices.
a. True
b. False
6.
For TQM implementation to be successful, there must be organisation-wide support
and commitment for the TQM program in all levels of the organisation.
a. True
b. False
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The Deming Prize was established in 1951 by JUSE.
a. True
b. False
8.
The Malcolm Baldrige National Quality Award is the highest level of national
recognition for performance excellence that a U.S. organisation can achieve.
a. True
b. False
9.
The Singapore Quality Award is not the most prestigious award conferred on
organisations in Singapore in recognition of their attainment of world-class sta…
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