QUALITY IS FREE

The Art of Making Quality Certain

[ By Philip B. Crosby ]
Compiled by
Gaudana R.G.
ABOUT THE AUTHOR, PHILIP CROSBY

 Introduced the Zero Defects program at Martin-

Marietta in the early 1970s
 Published Quality Is Free in 1979 after fourteen
years as a vice president at International
Telephone & Telegraph (ITT)
 Started the management consulting group
Philip Crosby Associates, Inc. (PCA) in 1979
 WHAT WILL BE COVERED

Quality Concepts and Principles

Quality Management Maturity Grid
Fourteen-Step Quality Improvement Program
Real-Life Example
Hands-On Exercise
 WHAT DOES “QUALITY IS FREE”
MEAN?
 A quality program can save a company more
money than it costs to implement
 Profitability is best accomplished by reducing
the cost of poor quality and preventing defects
 Cost savings include prevention, appraisal, and
failure costs.
THE INTEGRITY SYSTEMS “TABLE”

 Management participation and attitude

 Professional quality management
 Original programs
 Recognition
 THE FIVE ERRONEOUS ASSUMPTIONS
 Quality means goodness,
elegance
 Quality is intangible, not
measurable
 The “economics of quality”
are prohibitive, not relevant
 Quality problems originate
with the workers
 Quality is the responsibility of
the quality department
 Quality is conformance to
requirements
 Quality is measured by the
cost of nonconformance
 It is cheaper to do things right
the first time
 Most problems start in
planning and development
 Quality is shared by every
function and department
ESSENTIAL TRAITS OF A QUALITY
MANAGER

 Listening  Implementing

 Cooperating  Learning

 Helping  Leading

 Transmitting  Following

 Creating  Pretending
HOW CAN CROSBY’S CONCEPTS BE
PUT TO USE?

 Evaluate your organization’s position on the

Quality Management Maturity Grid
 Implement the fourteen-step Quality
Improvement Program
QUALITY MANAGEMENT MATURITY
GRID
 Five stages of an organization’s maturity
 Six measurement categories
 Management understanding and attitude
 Quality organization status
 Problem handling
 Cost of quality as a percent of sales
 Quality improvement actions
 Characteristic statement
 MATURITY GRID STAGE I:
UNCERTAINTY
 Quality is the responsibility of the quality department
 Quality is hidden within manufacturing or engineering;
no inspection
 Problems are fought as they occur.
 The cost of quality is unknown. In reality it is about 20%.
 There are no organized quality improvement activities.
 “We don’t know why we have problems with quality.”
 MATURITY GRID STAGE II:
AWAKENING
 While quality management may be valuable, the
organization is not willing to commit resources.
 A quality leader is appointed, but the emphasis is
on appraisal and moving the product.
 Teams address major problems, but long-range
solutions are not solicited.
 The cost of quality is reported at 3%, but is actually
18%.
 Activities are limited to short-range, motivational
efforts.
 “Why do we always have problems with quality?”
 MATURITY GRID STAGE III:
ENLIGHTENMENT
 Management adopts a supportive and helpful stance.
 Quality is elevated to a functional level equivalent to
engineering, marketing, etc.
 Problems are resolved openly and in an orderly way.
 The cost of quality is reported as 8%, though it is really
about 12% of sales.
 The fourteen-step quality improvement program is
implemented.
 “We are identifying and resolving our problems.”
MATURITY GRID STAGE IV: WISDOM

 Top management participates in and understands

quality.
 The quality manager is an officer of the company.
 Problems are identified in early development.
 The cost of quality is reported as 6.5%. It may be 8%.
 The quality improvement program is continual and
accompanied by follow-up training.
 “Defect prevention is a routine part of our operation.”
 MATURITY GRID STAGE V:
CERTAINTY
 Quality is an essential part of the organization.
 A quality manager serves on the board of directors.
 Problems are prevented.
 The cost of quality is reported as 2.5%, which is
what it really is.
 Quality improvement is normal and continual.
 “We know why we do not have problems with
quality.”
MANAGEMENT UNDERSTANDING
AND ATTITUDE
 “Improvement itself is never the real difficulty.
Once individuals recognize and agree on their
position, it is never difficult to improve.”
 “What works in one industry to improve quality
will work in others—if you take the time to
understand quality and its content.”
QUALITY ORGANIZATIONAL STATUS

 “A lot of problems will be avoided if you lay out

a clear policy covering the entire quality
operation…Keep it simple, and you will have the
reasonable expectation of having someone
read it.”
 “Quality operations should always report at the
same level as those departments they are
charged with evaluating.”
 HANDLING ….. PROBLEMS

 “Operations that truly want to handle problems,

for the purpose of solving them must create an
open society within their walls that is imbued
with the basic concepts of integrity and
objectivity.”
 “Objectivity comes with not placing the blame
for problems on individuals. Aim the questions
and probing at the job.”
 COST OF QUALITY (COQ)

 “Quality is free, but no one is ever going to

know it if there isn’t some sort of agreed-on
system of measurement.”
 “The purpose of calculating COQ is really only to
get management’s attention and to provide a
measurement base for seeing how quality
improvement is doing.”
 FOURTEEN STEPS TO QUALITY
IMPROVEMENT
1. Management commitment with an emphasis
on defect prevention and visibility
2. Quality improvement teams composed on
members of each department or function—all
the necessary tools
3. Quality measurement to monitor the status
and improvement of activities
 FOURTEEN STEPS TO QUALITY
IMPROVEMENT
4. Cost of quality evaluation by the comptroller
for accurate figures
5. Quality awareness by communicating the cost
of quality, encouraging discussion
6. Corrective action to ingrain a habit of
identifying problems and correcting them
 FOURTEEN STEPS TO QUALITY
IMPROVEMENT
7. An ad hoc committee to advocate “zero
defects”
8. Supervisor training so that all managers
understand the programs and can explain it
9. Zero Defects Day to establish “zero defects”
as the organizational standard
10. Goal setting as teams, specific and
measurable
 FOURTEEN STEPS TO QUALITY
IMPROVEMENT
11. Removing the causes of defects, as described
by individual workers, so that the people
know their problems are heard and answered
12. Genuine recognition for achievement
13. Quality councils of quality professionals and
team chairs for status information and ideas
14. Do it over again—repetition makes the
program perpetual
 A REAL WORLD EXAMPLE

 Alberto Wisbeck took the job of top manager at

Siemens’ worst factory in Jinan, China.
 Production capacity was low and the cost of
raw materials was 67% of sales.
 If efficiency did not improve, the factory would
be closed.
 WHAT DID WISBECK DO?

 Wisbeck focused on improving quality and

meeting customer needs
 Following the 14-step quality improvement
program, he encouraged workers and
supervisors to identify the processes and
procedures that were causing problems.
 Following training, top managers implemented
projects in their own work areas
 WHAT WERE THE RESULTS?

 By focusing on faulty work processes, the

managers avoided reprimanding their workers—
a critical cultural requirement.
 Over 300 projects saved the company
$604,000 annually and the plant rose to rank
as Siemen’s #2 plant.
 PRACTICE ….. EXERCISE

 Cost of quality is a necessary measurement

 To persuade management to address quality issues
 To monitor the progress of improvement programs
 Do you know the cost of quality in your unit or
division? Can you calculate it as a percentage of
sales?
 PRACTICE…….. EXERCISE

 Remember, the cost of quality includes

prevention, appraisal, and failures.
 If your organizations does not currently
measure and report cost of quality, it may
actually equal 20% of sales
 SUMMARY

 Quality is free, but it is not a gift. It is hard work.

 Quality improvement has as much to do with
converting people as solving problems.
 Managers can use Crosby’s Quality
Management Maturity Grid and 14-Step Quality
Improvement Program to help their people
prevent and eliminate defects.