LESSON

11

MANAGING FOR QUALITY

CONTENTS
11.0 Aims and Objectives 11.1 Introduction 11.2 Quality Management Principles 11.2.1 Quality Principles 11.2.2 Customer Focus 11.2.3 Design Quality and Conformance Quality 11.2.4 Nature of Customers 11.2.5 Partnering with Customers 11.2.6 Measuring Customer Satisfaction 11.2.7 Manage Customer Relationships 11.2.8 Leadership 11.2.9 Develop a Strategy 11.2.10 PDCA Cycle 11.2.11 Quality Council 11.2.12 Vital Few and the Useful Many 11.2.13 Quality and Organizational Culture 11.2.14 Involvement of People 11.3 ISO Quality Certification and Types 11.3.1 Standards under ISO 9001:2000 Quality Management System 11.3.2 How to obtain Licence? 11.3.3 Grant of Licence 11.4 Quality Assurance 11.4.1 Quality Loop 11.5 Six Sigma Concept 11.5.1 What is Six Sigma? 11.5.2 Six Sigma 11.5.3 Six Sigma Roles and Responsibilities 11.5.4 Six Sigma Methodology
Contd....

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11.5.5 Failure Mode and Effect Analysis 11.5.6 Design of Experiment (DOE) 11.6 Let us Sum up 11.7 Lesson End Activity 11.8 Keywords 11.9 Questions for Discussion 11.10 Suggested Readings

11.0 AIMS AND OBJECTIVES

After studying this lesson, you should be able to:
l Understand how to manage quality l Have knowledge about ISO quality certification and types l Know about how to manage quality assurance l Learn about the use of six sigma concept in maintaining quality of production

11.1 INTRODUCTION
Companies offering a powerful combination of low prices and high quality are capturing the hearts and wallets of consumers. Today as value driven companies are growing in number, they are moving from competing on price to providing quality, service and convenience. As value players gain share, at varying speeds, across economies, they change the nature of competition by transforming consumer attitudes about trade-offs between price and quality. Today, quality is considered an order qualifying and not an 'order winning' attribute of the product or service. How do you, as a consumer, evaluate quality? One approach which customers use to evaluate quality is to cite attributes of the product or its product delivery process. For example, if someone were to ask you to judge the quality of a personal computer, you might reply by citing such things as: the way it looks, how long it took to set up, how long it takes to boot up, and whether or not it has Intel Inside. If the product is a service, such as a meal, the determinants of quality might include: the meal itself, its presentation, the manner in which it was delivered, and quite possibly the behaviour of the people at the next table. In effect, you are citing attributes of quality, i.e., the traits associated with quality that can be identified and, more importantly, measured. Attributes, however, are not the same as quality. Identifying every attribute of quality for a product would not describe that product's quality level. Some attributes used to help define quality are:

l Freshness: Some products are perishable, i.e., the quality declines over time.

Vegetables fall into this category. Fashion items also are subject to obsolescence. At the other extreme, the value associated with some products increases with age, as is the case with antiques and red wine.

l Reliability: The quality associated with a product often increases with the

dependability of the product customer experience. Patients expect the hospitals to have competent staff. Customers expect telephones to work. Ni-Cd Batteries manufactured by ECIL should be as reliable as other internationally manufactured batteries. conditions. Evereadys Red commercials are designed to convey the durability of its batteries. goods or service. What is safe can be a controversial issue. For instance, is a gun with a safety clip safe? Is the packaging of a product tamper proof?

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l Durability: The quality attribute that implies product performance under adverse

l Safety: This is an attribute of quality that measures the likelihood of harm from

l Environmental Friendly: As is the case with safety, this quality attribute has both

societal aspects and is individual specific. The requirements for being considered an environmental friendly product are becoming more stringent. For example, firms must now also focus on how a product is disposed off after its useful life. a product after the sale has been made. Products are now being increasingly designed so that they do not need service, such as car batteries. But many others do require service and this capability must be both designed into the product and the post-sale service system. This is especially important for consumer durables. ECIL, perhaps, has not been able to convey that it has an adequate service organization for the televisions it manufactures. aesthetics. Aesthetics are hard to define; it is customer specific and sometimes situation specific. What is aesthetically pleasing to one individual may be considered ugly by another. consistent. It would make little sense to build a Maruti 800 with airfoils, or a biodegradable cigarette filter. Products with inconsistent combinations of features aren't likely to match the needs of their buyers.

l Serviceability: This attribute relates to the ease and cost associated with servicing

l Aesthetics: A product's appearance, feel, sound, taste, or smell reflects its

l Attribute Consistency: The attributes associated with a product should be internally

To a certain degree, the functionality and the quality overlap. Products with excellent designs will excel in attributes that matter. These in turn increase the functionality of the product. Definition of Quality Concepts of what constitutes quality have changed over the last decade. Traditional definitions focused on conformance to standards. Such definitions were based on the customers perception of quality. The new definition of quality that has emerged focuses on achieving value entitlement. Quality is a state in which value entitlement is realized for the customer and provider in every aspect of the business relationship. Value represents economic worth, practical utility and availability for both the customer and the company that creates the product or service. This definition accepts the fact that the quality of products or services rarely consist of a single element. means: 1. For the customer: A rightful level of expectation to buy high-quality products at the lowest possible cost.

Value

entitlement

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2. For the provider: A rightful level of expectation to produce quality products at the highest possible profits. The philosophical leaders of the quality movement, notably Phillip Crosby, W. Edward Deming and Joseph S. Juran provide different perceptions to the concept of quality. This is because they use different frameworks for defining quality.

11.2 QUALITY MANAGEMENT PRINCIPLES

Sumantra Ghoshal in his book Managing Radical Change talks about the Indian mentality of 'chalta hai' or 'satisfactory underperformance'. This type of company could expect as much as 7 per cent of the goods it received and an equal percentage of products it shipped out to be defective. This type of company, when asked what poor quality costs them, their guess would be about 3-5 per cent of sales. But expert opinions actually calculate the costs of poor quality more like 20-30 per cent.
Table 11.1: Cost of Quality Assurance
Prevention Costs Appraisal Costs Internal Failure Costs External Failure Costs QC administration and systems planning Quality training Quality planning Special processes planning Quality data analysis Procurement planning Vendor surveys Reliability studies Quality measurement and control equipment Qualification of material New Product review Process control Quality audits Scrap, at full shop cost Complaints and loss of In-process testing Rework, at full shop cost customer goodwill Checking labour Scrap and rework. Fault Warranty costs Laboratory or other of vendor Field maintenance and measurement services Material procurement product service Calibration & Set up forFactor contact Returned material test and inspection engineering processing and repair Test and inspection QC investigations (of Replacement material failures) inventories Outside endorsements Material review activity Strained distributor Maintenance and Repair and relations calibration troubleshooting Trade Concessions Field testing Incoming, in process, final inspection

Can such companies compete with todays value driven companies? They would find it very difficult to compete. Today, the best companies do not count their defects per hundred but per million! Philip Crosby states that the correct cost for a well run quality management program should be under 2.5 per cent. This is happening with a large number of professionally run quality conscious firms, as the following example will show. When Matsushita bought over the TV plant run by Motorola at Quasar, the plant had been running at a rate of 150-180 defects per 100 TV sets. Three years later, under the new management, Matsushita was running the plant at a rate of 3-4 defects per 100 sets. The cost of poor quality dropped from $ 22 million to less than $ 4 million annually, making the loss-making plant profitable. All this did not cost much. Quality improvement was achieved through marginal investments but primarily by innovative employee relations and workplace reorganization. Though customers consider quality a trade-off, companies that offer low prices with high quality, do not see the trade-off. This is because they do not attribute cost to quality. The consensus is that quality increases profits and reduces costs. The typical activities of quality assurance that cost the organization are shown in Table 11.1. Costs of poor quality are generally classified into four broad categories.

Juran defines three quality zones relative to the point of minimum total quality costs. The zone of improvement projects lies below the optimum quality level, while the zone of perfectionism lies above it. Between them, and in the area of the minimum total quality costs, lies the zone of indifference. He identifies the boundary of the zone of perfectionism as lying typically at a quality level where failure costs amount to 40 per cent of the total quality cost. The costs include: (a) Internal Failure Costs, (b) External Failure Costs, (c) Appraisal Costs, (d) Prevention Costs.

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Figure 11.1: Jurans Model of Optimum Quality Costs

As can be seen from Jurans model shown in Figure 11.1, the costs of improvement continue to rise whilst the costs of failure continue to fall. Juran suggests relaxing prevention efforts and allowing (even encouraging) increased defect rates in the zone of perfectionism. The principle of diminishing marginal returns in both benefits and effort suggest that a firm should produce where Marginal Revenue is equal to Marginal Cost; but when profit is less than zero, it may be preferable to decrease efforts rather than continue. (In practice, the output units do not have to be single and judgments have to be made in relation to unit or batch size.)

11.2.1 Quality Principles

Eight quality management principles have been enunciated by the International Standards Institute (ISO) on which the quality management system standards are based. We will use these principles as our framework to discuss the subject. The principles that have been derived by the ISO, the Technical Committee on quality management are based on hearings of the committee and from the collective experience and knowledge of international experts. These are given below: Principle 1 - Customer focus: Organizations depend on their customers and therefore should understand current and future customer needs, should meet customer requirements and strive to exceed customer expectations. Principle 2 - Leadership: Leaders establish unity of purpose and direction of the organization. They should create and maintain the internal environment in which people can become fully involved in achieving the organization's objectives.

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Principle 3 - Involvement of people: People at all levels are the essence of an organization and their full involvement enables their abilities to be used for the organization's benefit. Principle 4 - Process approach: A desired result is achieved more efficiently when activities and related resources are managed as a process. Principle 5 - System approach to management: Identifying, understanding and managing interrelated processes as a system contributes to the organization's effectiveness and efficiency in achieving its objectives. Principle 6 - Continual improvement: Continual improvement of the organizations overall performance should be a permanent objective of the organization. Principle 7 - Factual approach to decision making: Effective decisions are based on the analysis of data and information. Principle 8 - Mutually beneficial supplier relationships: An organization and its suppliers are interdependent and a mutually beneficial relationship enhances the ability of both to create value. These principles give an overview of total quality management and show how, collectively, they can form a basis for performance improvement and organizational excellence. There are many different ways of applying these quality management principles. The nature of the organization and the specific challenges it faces will determine how to implement them. We will discuss many of these aspects in the succeeding sections.

11.2.2 Customer Focus

Customer focus is more than putting customers first, or finding mutually satisfactory solutions to shared problems, or a dedication to excellence in every sale or service encounter. It also requires commitment to forging long-term relationships that create synergies of knowledge, security, and adaptability for both parties. This is true from the quality concept point of view because quality is defined as what the customer wants. Quality is the perception of the customer of the degree to which the product meets expectations. As different customers have different perceptions, quality means different things to different peopleit has many dimensions. Customers often evaluate quality citing the attributes of the product or its product delivery process. These are attributes of quality, i.e., the traits associated with quality that can be identified. Quality attributes of customers can also be divided into two categories: (a) Hard Attributes: These are those attributes that must be met by the delivered product or service if it is to be considered satisfactory. There are objective measures to these attributes, e.g., size, colour, weight, cost, reliability, etc. and (b) Soft Attributes: These are those attributes that are desirable and have no hard measures. These attributes are based on the sense. For example, Jet Airways 'approachable, warm and friendly staff', being treated as an individual. Sometimes, it may be the type and reputation of company one is doing business with. Attributes, however, are not the same as quality. Identifying every attribute of quality for a product would not, perhaps, describe that product's quality level.

11.2.3 Design Quality and Conformance Quality

Though quality has many dimensions, two terms are commonly used in this context: Design quality is the inherent quality of the product or service in the marketplace.

Conformance quality refers to the degree to which the product or service design specifications are met. Freedom from deficiencies refers to the quality of conformance. Increasing the quality of conformance usually results in lower costs, fewer complaints and increased customer satisfaction. Both the quality of design and the quality of conformance should provide products that meet the customers objectives for those products. Design quality and conformance quality differ in that design quality is proactive, while conformance quality is reactive. Philip Crosby, the quality guru, believes that ensuring quality should occur primarily at the design phase, i.e., it should be proactive rather than reactive. Rather than spending time and money on finding and fixing mistakes and errors, Crosby advocates doing a job right at the first time. Crosby challenges organizations to think of how processes can be designed or redesigned to reduce errors and defects to reach a goal of zero defects. Crosby coined the phrase quality is free, meaning that the absence or lack of quality is costly to an organization. Some dimensions of quality, with description, are given in Table 11.2 along with the measures of conformance quality both for a manufactured product and a service.
Table 11.2: Dimensions of Quality and Conformance Quality
Measures Product (Stereo Service (Jet Airline) Amplifier) Performance It is the primary operating Noise to Signal Check-in; System characteristics that determine Ratio, Power reliability; Baggage how well the product handling; On-time performs the intended record, Safety record function. Features These are qualities that appeal Remote Control; Customer-contact areas; to the customer. Automatic Lounges; Reservations; Balance; City check-in; Through Microphone Check-in Durability The time before the product Useful life needs replacement or has to be repaired. This quality attribute implies product performance under adverse conditions. Reliability Expected period of fault free Mean time to Punctuality; Delay service. The quality associated failure handling; with a product often increases with the customers experience of the dependability of the product. Serviceability Convenience and cost of Modular Design, Availability of airline repairs that is related to the Service Centers staff; Responsiveness to ease in resolving customer individual needs complaints Aesthetics A products appearance, feel, Streamlined Aircraft cleaning; Staff sound, taste, or smell reflects Appearance; who are attentive and its aesthetics. Aesthetics are Range of bright ready to help; hard to define; it is customer colors, attractive Polite staff specific and sometimes controls situation specific. Consistency The attributes associated with Conformance with Ticketing (Conformance) a product should be internally standards; consistent. Matching with documentation Contd.... Dimensions Description

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Uniformity Degree of variations among different products of the same type. Safety This is an attribute of quality that measures the likelihood of harm from a good or service, its impact on health and the environment Timeliness The timeliness for providing the product or service. Some products are perishable, i.e., the quality declines over time. Vegetables fall into this category. Customer Treatment received by the Service customer relating to the product before, during, and after completion of the sales transaction.

Standard Specifications Toxicity of materials used, Level of insulation, Power System Controls Off-the-shelf availability in Stores

Appearance
Maintenance; Age of Aircraft; ISO 9000

On-time performance

Ease and cost associated with servicing a product after the sale has been made.

Sales; Being treated as an individual; Approachable warm and friendly staff; Pleasant on-flight Service.

Performance quality is the most easy to define and customer service is the most difficult to define, both these are crucial components to the long-term survival of most organizations.

11.2.4 Nature of Customers

A supplier-customer is forged when an output changes hands and becomes the input of another. All activities within a firm are often made up of a series of supplier-customer relationships. Based on this view, there are two types of customers: (a) Internal customers are the receivers of output transactions that take place within the organization, and (b) External customers are the customers that buy the final product, which pays the organizations bills. It is only by meeting the needs of the internal customers that the needs of the external customers can be met. The success of an organization is when it can bring the concept of the internal customer to reality in the organization. Unless the facts and data of the internal customers are debated openly, the process will fail.

11.2.5 Partnering with Customers

Partnering with customers represents the firms capacity to anticipate what customers need even before they know they need it. It increases the organizations revenue and market share through flexible and fast responses to market opportunities. For example, Nike using the philosophy of creating a partnership with its customers discovered that its customers apart from needing running shoes and apparel also needed sports watches, MP3 players, and heart monitors. Nike developed these offerings and their equipment business sales grew in excess of US $ 400 million within a few years. BMW uses a different approach; in partnership with its customers and external innovators, it is constantly seeking new technologies and design features to put into future cars. Car fans communicate their ideas through the BMW Website, with additional on-line discussions with the relevant counterparts in BMW. Using this strategy, BMW solicits ideas from its customers and enthusiasts around the world. This creates a partnership between the company and its customers.

Satisfied versus Loyal Customer Base There is a big difference between satisfied customers and loyal customers. The former, if they have a choice, can easily switch to another supplier, while loyal customers would stay longer with the organization and its products.
l Specifications play an important role in satisfying customers on attributes they

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value, those that deliver superior value and turn them into loyal customers. so that there is improved customer loyalty leading to repeat business. The Kano model was discussed earlier, which identified customer requirements on three scales. model.

l Organizations need to research and understand customer needs and expectations

l The organization should try to meet exciting requirements on the basis of this l Loyal customers demonstrate less price sensitivity and often recommend the

company's products or services to others.

11.2.6 Measuring Customer Satisfaction

To make the satisfaction of the customer an essential part of the corporate culture and produce empowered and motivated employees who are committed to ever higher standards of customer service and satisfaction, the company must demonstrate continuously that the customer comes before anything else in the company's order of priorities.
l You must communicate customer needs and expectations throughout the

organization.

l Measure customer satisfaction and act on the results. l Increased effectiveness in the use of the organization's resources can be used to

enhance customer satisfaction.

11.2.7 Manage Customer Relationships

The customer is the foundation of success of all business organizations. Competition today forces companies to become much more creative and flexible in their dealings with customers to give them exactly what they want faster.
l Creating a relationship with customers will help organizations maintain the focus to

make good decisions.

l It is important to ensure that the objectives of the organization are linked to customer

needs and expectations.

l A firm requires to systematically manage customer relationships, ensuring a balanced

approach between satisfying customers and other stakeholders (such as owners, employees, suppliers, financiers, local communities and society as a whole).

11.2.8 Leadership
According to Steve Forte, the CEO of Jet Airways, In the service industry, especially the competitive airline industry, knowing WHAT to do is not difficult; the HOW and convincing the team of the WHY is more often the problem..Doing all the things right in the service profit chain is required. One has to only look at the number of start-up airlines who have not made it in India or anywhere else in the world over the last few years (to understand this).Without the vision and drive of its founder and Chairman, Naresh Goyal, Jet Airways could easily have been one of the failures.

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Quality has often been likened to a state of mind. You may have the best equipment but may not be providing a quality product. The job of management is leadership. It is the leaders who establish unity of purpose and direction of the organization. Management has to create and maintain the internal environment in which people can become fully involved in achieving the organization's quality objectives. It has to lay down the standards with clear responsibility and authority for implementation of the quality program.

11.2.9 Develop a Strategy

The quality strategy of the organization has to be based on the resources of the organization. The strategy should be designed to provide competitive advantage. Effective leaders are knowledgeable about the work being done and understand the environment and complexities with which their workers must contend. They also know the needs of all interested parties including customers, owners, employees, suppliers, financiers, local communities and society as a whole. Leaders should think outside the box; as they think about quality, they should look at the bigger picture. The policy statement should provide top management insight into the overall intentions and direction of organization, and reflect the strategy of the organization. It should tell where the organization stands with reference to the requirements of quality and how far it has got towards conforming to these requirements. Top management's ability to influence people to proactively take actions necessary for realizing a positive outcome is critical to the success of the strategy.
Table 11.3: Framework of Statement of Policy
QUALITY POLICY Top management shall ensure that the quality policy: is appropriate to the purpose of the organization, includes a commitment to comply with requirements and continually improve the effectiveness of the quality management system, provides a framework for establishing and reviewing quality objectives, is communicated and understood within the organization, is reviewed for continuing suitability.

Table 11.3 identifies the requirements of the quality policy. The policy statement should:
l Establish a clear vision of the organizations future. l Set challenging goals and targets. l Create and sustain shared values, fairness and ethical role models at all levels of

the organization. objectives.

l People will understand and be motivated towards the organization's goals and

Deming suggested using PDCA cycle as the basis for forming and implementing the quality strategy, while Juran suggested the 'Quality Council' to design and implement the overall quality strategy and 'Vital Few and the Useful Many' concept to identify areas of improvements. These are discussed in this section.

11.2.10 PDCA Cycle

Deming began working in Japan in 1950 and was instrumental in building the Japanese industry into an economic world power. His philosophy was based on the idea that problems

in a production process are due to flaws in the design of the system, as opposed to being rooted in the motivation or professional commitment of the workforce. Under Deming's approach, quality is maintained and improved when leaders, managers and the workforce understand and commit to constant customer satisfaction through continuous quality improvement.

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Plan Act

Do Check

Figure 11.2: PDCA Cycle

To facilitate achieving quality goals, Deming and his colleague, Shewhart, promoted the PDCA cyclea plan of action to lead the quality movement:
l Plan l Do l Check

l Act Plan to implement a policy to improve quality and/or decrease the cost of providing services. After the plan is developed, we do it by putting the plan into action and then check to see if our plan has worked. Finally, we act either to stabilize the improvement that occurred or to determine what went wrong if the gains we planned for did not materialize. PDCA is a continuous cycle; any improvement realized by carrying out one PDCA cycle will become the baseline for an improvement target on the next PDCA cycle. The process of improvement (PDCA) is never ending, although the dramatic improvements of initial PDCA efforts may be hard to sustain.

11.2.11 Quality Council

Juran developed the idea of instituting a leadership group or "Quality Council", consisting of the organization's senior executive staff and senior management. Responsibilities of the Quality Council
l The Quality Council is typically charged with the responsibility for designing the

overall strategy for quality planning, control and improvement.

l It establishes trust and eliminates fear amongst the employees and ensures

miscommunication between the various levels of an organization is minimized. to act with responsibility and accountability.

l It ensures that it provides people with the required resources, training and freedom l Quality Improvement activities are seen as important as other management tasks

(e.g., budgeting, human resource management, purchasing and training), and leaders can integrate Quality Improvement into every aspect of their operations.

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l Activities are evaluated, aligned and implemented in a unified way. The involvement

of senior management advances the objective of the council by inspiring, encouraging and recognizing peoples contributions.

11.2.12 Vital Few and the Useful Many

Juran also proposed the idea of the Vital Few and the Useful Many. The idea is to prioritize which Quality Improvement projects should be undertaken by the organization. In any organization, there can be a lengthy list of possible ideas for improvement. Since the resources to actually implement new ideas are limited, leaders must choose those vital few projects that will have the greatest impact. The criteria for selecting the projects, according to Juran, should be based on its potential impact on meeting customer needs, cutting waste, or marshaling the necessary resources required by the project.

11.2.13 Quality and Organizational Culture

Quality is not a program; it is an outcome that evolves from an organizational culture. It is focused on the customer and on achieving organizational excellence. Leaders have a powerful, vital, and decisive role in creating a quality culture. Leaders have to be concerned with success as much as with failures in creating this culture. They have to focus not only on understanding substandard, but also super-standard performance. The effective leader creates opportunities for below- and above-average performers to interact and identify opportunities for improvement. The overall quality will not continue to improve unless leaders continue to improve. Quality leadership and management are requisite to improving and sustaining systemic performance results and improvement. Therefore leaders must value, cultivate, and model the core values and concepts for quality leadership in themselves and their coworkers.

11.2.14 Involvement of People

The Japanese have a saying: Every defect is a treasure. The meaning of this maxim is that errors and failures are opportunities for improvement. Errors or problems can help identify more fundamental or systemic root causes and ways to improve the system. Yet, fear of identifying problems is often seen as an admission that the current way of doing things is flawed or that those responsible are poor performers. Managers can make sure that it is understood failures contribute to improvement and are opportunities for quality improvements. Check Your Progress 1 State whether the following statements are true or false: 1. Quality is not a programme; but it is an outcome that evolves from an organizational culture. 2. Quality is focused on the customer and not on achieving organizational excellence. 3. Leaders have a powerful vital and decisive role in creating a quality culture. 4. The overall quality will not improve unless leaders continue to improve.

11.3 ISO QUALITY CERTIFICATION AND TYPES

ISO stands for International Organisation for Standards. ISO-9000 is a series of international standards for quality systems. It is a practical standard for quality applicable both to the manufacturing and service industry. These standards were first published in India in 1987 and subsequently revised in 1994. These standards have made a dramatic impact on business around the world and have become the regular (a must) for doing business in the world market. Indian, British and European Equivalent Standards are: INDIAN : IS:9000 BRITISH : BS:5750 EUROPEAN : EN:29000 ISO9000 sets out that the company can establish, document and maintain an effective and economic quality system which will demonstrate to the customers that the company is committed to quality and is able to meet their quality needs. These standards answer concisely: ISO 9000 : What is Quality management?

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How to sum a Quality Assurance System? ISO 9001 These systems (9001-9003) describe about the quality aspects coveredand are known as module-1, module-2 & module-3 respectively. ISO 9002 ISO 9003 ISO 9004 : What sort of Quality Operations are appropriate to a Project? These are internationally accepted standards and laid down in an organised way. The standards have been split into 20 Sections (called Elements) to enable users to implement it easily, effectively and efficiently (3 es). They provide an opportunity to have a complete record of all the 20 elements, based on their company standards for use within their own industry. The standards have been written in general terms with the Product manufacturer in mind but the standards are equally applicable to the service industries such as banking, hospitals, hotels and restaurants, educational institutions etc.

11.3.1 Standards under ISO 9001:2000 Quality Management System

Note that the previous members of the ISO 9000 family, 9001, 9002 and 9003, have all been integrated into 9001. In most cases, an organization claiming to be "ISO 9000 registered" is referring to ISO 9001. Summary of ISO 9001:2000 in informal language
l The quality policy is a formal statement from management, closely linked to the

business and marketing plan and to customer needs. The quality policy is understood and followed at all levels and by all employees. Each employee needs measurable objectives to work towards. is regularly audited and evaluated for conformance and effectiveness.

l Decisions about the quality system are made based on recorded data and the system

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l Records should show how and where raw materials and products were processed,

to allow products and problems to be traced to the source.

l You need a documented procedure to control quality documents in your company.

Everyone must have access to up-to-date documents and be aware of how to use them. suitable infrastructure, resources, information, equipment, measuring and monitoring devices, and environmental conditions. measurement and analysis; and ensure that product quality objectives are met. If you can't monitor a process by measurement, then make sure the process is well enough defined that you can make adjustments if the product does not meet user needs.

l To maintain the quality system and produce conforming product, you need to provide

l You need to map out all key processes in your company; control them by monitoring,

l For each product your company makes, you need to establish quality objectives;

plan processes; and document and measure results to use as a tool for improvement. For each process, determine what kind of procedural documentation is required (note: a "product" is hardware, software, services, processed materials, or a combination of these).
l You need to determine key points where each process requires monitoring and

measurement, and ensure that all monitoring and measuring devices are properly maintained and calibrated.
l You need to have clear requirements for purchased product. l You need to determine customer requirements and create systems for communicating

with customers about product information, inquiries, contracts, orders, feedback and complaints. appropriate testing at each stage. You need to test and document whether the product meets design requirements, regulatory requirements and user needs. Determine whether the quality system is working and what improvements can be made. Deal with past problems and potential problems. Keep records of these activities and the resulting decisions, and monitor their effectiveness (note: you need a documented procedure for internal audits).

l When developing new products, you need to plan the stages of development, with

l You need to regularly review performance through internal audits and meetings.

l You need documented procedures for dealing with actual and potential

nonconformances (problems involving suppliers or customers, or internal problems). Make sure no one uses bad product, determine what to do with bad product, deal with the root cause of the problem and keep records to use as a tool to improve the system. 2000 version ISO 9001:2000 combines the three standards 9001, 9002, and 9003 into one, called 9001. Design and development procedures are required only if a company does in fact engage in the creation of new products. The 2000 version sought to make a radical change in thinking by actually placing the concept of process management front and center ("Process management" was the monitoring and optimizing of a company's tasks and activities, instead of just inspecting the final product). The 2000 version also demands involvement by upper executives, in order to integrate quality into the business system and avoid

delegation of quality functions to junior administrators. Another goal is to improve effectiveness via process performance metrics - numerical measurement of the effectiveness of tasks and activities. Expectations of continual process improvement and tracking customer satisfaction were made explicit. The ISO 9000 standard is continually being revised by standing technical committees and advisory groups, who receive feedback from those professionals who are implementing the standard. 2008 version ISO 9001:2008 only introduces clarifications to the existing requirements of ISO 9001:2000 and some changes intended to improve consistency with ISO14001:2004. There are no new requirements. A quality management system being upgraded just needs to be checked to see if it is following the clarifications introduced in the amended version. Certification ISO does not itself certify organizations. Many countries have formed accreditation bodies to authorize certification bodies, which audit organizations applying for ISO 9001 compliance certification. Although commonly referred to as ISO 9000:2000 certification, the actual standard to which an organization's quality management can be certified is ISO 9001:2000. Both the accreditation bodies and the certification bodies charge fees for their services. The various accreditation bodies have mutual agreements with each other to ensure that certificates issued by one of the Accredited Certification Bodies (CB) are accepted worldwide. The applying organization is assessed based on an extensive sample of its sites, functions, products, services and processes; a list of problems ("action requests" or "noncompliances") is made known to the management. If there are no major problems on this list, the certification body will issue an ISO 9001 certificate for each geographical site it has visited, once it receives a satisfactory improvement plan from the management showing how any problems will be resolved. An ISO certificate is not a once-and-for-all award, but must be renewed at regular intervals recommended by the certification body, usually around three years. In contrast to the Capability Maturity Model there are no grades of competence within ISO 9001. Auditing Two types of auditing are required to become registered to the standard: auditing by an external certification body (external audit) and audits by internal staff trained for this process (internal audits). The aim is a continual process of review and assessment, to verify that the system is working as it's supposed to, find out where it can improve and to correct or prevent problems identified. It is considered healthier for internal auditors to audit outside their usual management line, so as to bring a degree of independence to their judgments. Under the 1994 standard, the auditing process could be adequately addressed by performing "compliance auditing":
l Tell me what you do (describe the business process) l Show me where it says that (reference the procedure manuals)

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l Prove that that is what happened (exhibit evidence in documented records) How this led to preventive actions was not clear.

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The 2000 standard uses the process approach. While auditors perform similar functions, they are expected to go beyond mere auditing for rote "compliance" by focusing on risk, status and importance. This means they are expected to make more judgments on what is effective, rather than merely adhering to what is formally prescribed. The difference from the previous standard can be explained thus: Under the 1994 version, the question was broadly "Are you doing what the manual says you should be doing?", whereas under the 2000 version, the question is more "Will this process help you achieve your stated objectives? Is it a good process or is there a way to do it better?". The ISO 19011 standard for auditing applies to ISO 9001 besides other management systems like EMS ( ISO 14001), FSMS (ISO 22000) etc. Industry-specific interpretations The ISO 9001 standard is generalized and abstract. Its parts must be carefully interpreted, to make sense within a particular organization. Developing software is not like making cheese or offering counseling services; yet the ISO 9001 guidelines, because they are business management guidelines, can be applied to each of these. Diverse organizationspolice departments (US), professional soccer teams (Mexico) and city councils (UK)have successfully implemented ISO 9001:2000 systems. Over time, various industry sectors have wanted to standardize their interpretations of the guidelines within their own marketplace. This is partly to ensure that their versions of ISO 9000 have their specific requirements, but also to try and ensure that more appropriately trained and experienced auditors are sent to assess them.
l The Ticket guidelines are an interpretation of ISO 9000 produced by the UK Board

of Trade to suit the processes of the information technology industry, especially software development. developed by major aerospace manufacturers. Those major manufacturers include AlliedSignal, Allison Engine, Boeing, General Electric Aircraft Engines, LockheedMartin, McDonnell Douglas, Northrop Grumman, Pratt & Whitney, RockwellCollins, Sikorsky Aircraft, and Sundstrand. The current version is AS 9100. The Pharmaceutical Quality Group (PQG) of the Institute of Quality Assurance (IQA) has developed PS 9000:2001. It aims to provide a widely accepted baseline GMP framework of best practice within the pharmaceutical packaging supply industry. It applies ISO 9001: 2000 to pharmaceutical printed and contact packaging materials. Ford, Chrysler). It includes techniques such as FMEA and APQP. QS 9000 is now replaced by ISO/TS 16949. manufacturers (American and European manufacturers); the latest version is based on ISO 9001:2000. The emphasis on a process approach is stronger than in ISO 9001:2000. ISO/TS 16949:2002 contains the full text of ISO 9001:2000 and automotive industry-specific requirements. an interpretation developed by the telecom consortium, QuEST Forum. The current

l AS 9000 is the Aerospace Basic Quality System Standard, an interpretation

l PS 9000 is an application of the standard for Pharmaceutical Packaging Materials.

l QS 9000 is an interpretation agreed upon by major automotive manufacturers (GM,

l ISO/TS 16949:2002 is an interpretation agreed upon by major automotive

l TL 9000 is the Telecom Quality Management and Measurement System Standard,

version is 4.0 and unlike ISO 9001 or the above sector standards, TL 9000 includes standardized product measurements that can be benchmarked. In 1998 QuEST Forum developed the TL 9000 Quality Management System to meet the supply chain quality requirements of the worldwide telecommunications industry.
l ISO 13485:2003 is the medical industry's equivalent of ISO 9001:2000. Whereas

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the standards it replaces were interpretations of how to apply ISO 9001 and ISO 9002 to medical devices, ISO 13485:2003 is a stand-alone standard. Compliance with ISO 13485 does not necessarily mean compliance with ISO 9001:2000.

Problems A common criticism of ISO 9001 is the amount of money, time and paperwork required for registration. According to Barnes, "Opponents claim that it is only for documentation. Proponents believe that if a company has documented its quality systems, then most of the paperwork has already been completed." According to Seddon, ISO 9001 promotes specification, control, and procedures rather than understanding and improvement. Wade argues that ISO 9000 is effective as a guideline, but that promoting it as a standard "helps to mislead companies into thinking that certification means better quality, ... [undermining] the need for an organization to set its own quality standards." Paraphrased, Wade's argument is that total, blind reliance on the specifications of ISO 9001 does not guarantee a successful quality system. The standard is seen as especially prone to failure when a company is interested in certification before quality. Certifications are in fact often based on customer contractual requirements rather than a desire to actually improve quality. "If you just want the certificate on the wall, chances are, you will create a paper system that doesn't have much to do with the way you actually run your business," said ISO's Roger Frost. Certification by an independent auditor is often seen as the problem area, and according to Barnes, "has become a vehicle to increase consulting services." In fact, ISO itself advises that ISO 9001 can be implemented without certification, simply for the quality benefits that can be achieved. Another problem reported is the competition among the numerous certifying bodies, leading to a softer approach to the defects noticed in the operation of the Quality System of a firm.

11.3.2 How to Obtain Licence?

Stage I: Application and its Processing 1. Firms interested in obtaining licence for quality system as for IS/ISO 1000 family or Standards, should ensure that they are operating quality system in accordance with relevant standard. 2. They should apply on the prescribed proforma in .....(Form III) at the nearest regional office of BIS (or any other credited agency) along with prescribed application fee as applicable (The schedule of fee is given here below). 3. The application is to be signed by the proprietor, partner or the Chief Executive Officer (CEO) of the firm or other person authorised to sign any declaration on behalf of the firm. The name and designation of the person signing the application must be recorded legibly in a space set apart for the purpose in the application form.

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4. Each application must be accompanied by a supplementary questionnaire (Form IV) duly filled in along with the, Documented Quality System the requisite of the relevant quality system standard. If the application is rejected by BIS Reasons shall be given therein: 1. Application Fee not accompanying the application. 2. Application Form III or IV is incomplete. 3. Annexures to the application are not clear. BIS will acknowledge the receipt of application/application fee. Every applicant will be given a serial number to be known as Application Number. In all future correspondence, reference of Application Number is a must.

Stage II: Adequacy Audit 1. After the application has been accepted, the Documented Quality System (Quality Manual/Quality Plan etc.) shall be examined by the BIS for verifying the conformance to relevant standard (001/002/003). 2. Any significant omission or deviation from the prescribed requirements situated by BIS will have to be corrected by the applicant. Stage III: Preliminary Visit & Assessment BIS official(s) may make a visit to the premises of the applicant to acquaint himself/ themselves of the size, nature of operation & firms readiness for the audit. The assessment will comprise the following sequence: a) Opening Meeting: The meeting will be conducted by the leader if the audit team in which the CEO of the company, MR (Managerial Representative) and Heads of all departments being audited are expected to be present. During this meeting, the leader will explain the scope and extent of the audit and the important terms used in the audit. b) Conduct of Assessment: Each auditor should be accompanied by a guide who is conversant with the activities of the deptt(s). The auditor is auditing. Observations recorded by the auditors must be signed by the guide as a token of acceptance. c) Closing Meeting and Report: 1. All the members present in the opening meeting should preferably be present in the closing meeting as well, when the audit team will present their findings to the firm. 2. The Non-conformities (as ..... to established system) observed by the audit team will be handed over to the firm at the end of each day for necessary corrective action. 3. These frames for the corrective action(s) will be decided by the firm. 4. The Non-conformity report will be signed by the Managerial Representative who is the manager, agent or representative for the Quality Implementation System as a token of acceptance.

Responsibility of Applicant during the Audit The firms expected to provide the following assistance to the audit team: 1. Arrangement of stay/local guidance and travel agents etc. 2. CEO & MR must be present during the opening and closing meetings. As far as possible all head lines audited. 3. In the interest of the firm all effort should be made that the time of audit team is not wasted on account of relevant personnel, document, record, being audited. 4. The firm will arrange a place or room where members of the audit team can meet and discuss during the day and at the end of the day to exchange their notes and findings.

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11.3.3 Grant of Licence

1. Before the licence is granted, corrective actions taken by the firm on the nonconformities observed during the audit will have to be verified by BIS. 2. The applicant shall give the following undertaking and we shall make no claim direct or implied that the licence to be granted relates to any product or processes other than those that will be set out in the licence and schedule. 3. Based on the findings of the Audit Team and Satisfactory report, the firm will be granted a licence by BIS. 4. The licence shall be granted for a period of three years. 5. Grant of licence will be followed by survillace visits, once in six months by the author(s) of BIS to verify the effective implementation & maintenance of the quality system established by the firm. 6. During the operation of the licence, if the licencer fails to observe the creditors of the Quality System Certificate Scheme the licence of the firm is liable to be suspended and may call for special visit for which firm is liable to pay special visit charges, as per schedule of fees. Renewal, Deferment, Expiry and Cancellation of Licence 1. Any licence granted to 3 years expires automatically at the end of three years. 2. A renewal notice will be issued by BIS at least four months before the expiry of the current operating period. 3. The Licence is required to submit the Renewal Application along with the original copy of the licence at least three months in advance, before the expiry of the licence. 4. The Renewal Application will be followed by a complete audit of quality system of the firm. 5. If any discrepancies/non-conformities are observed during the audit, the licence will be to take corrective action. 6. After the Licence taken necessary action to remove discrepancies, the Quality System of Certification Licence will be renewed for period of three years. Privileges of Licensee The privileges enjoyed by BIS licensees include: i) Original Quality System Certification Licence which can be demonstrated by the licensees to anyone concerned. If need be, it can be photocopied & displayed at various locations.

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ii) A very attractive plaque containing details of certification is presented as a compliment at the time of award of certificate. Additional plaques can be provided by BIS on actual cost payment basis. iii) Use of Quality Systems Certification mark, on letter heads in advertisements, brochures, complementaries & for other promotional purpose. Standard Mark, . . ., shall not be directly marked on the product and its packaging (As Product is not certifying this mark, but the System). iv) Each licence shall be listed in the register monitored by BIS. ISO 9000 Standards.

11.4 QUALITY ASSURANCE

Quality is never by an accident, It is always the result of an intelligent effort. John Ruskin Quality is never by an accident, It has always to be pre-planned. Juran The quest for efficiency is eternal to mankind. In industrial parlance, efficiency means maximising production of quality products at optimal cost. Quality has been defined in different ways by different persons, such as:
l Degree of Excellence l Life of Product l Cost of Product l Fitness for use l Conformance to requirements

l Customer s satisfaction These need based definitions represent only certain facets of quality. The achievement of satisfactory quality involves all stages of the quality loop as a whole e.g.,
l Quality due to definition of needs (as defined above) l Quality due to product design l Quality due to conformance and product support throughout its life time

11.4.1 Quality Loop

From this it is evident that quality cannot be built into the product during manufacturing alone and instead it has to be built into the product right from the stage of assessing the marketing conditions to design, procurement, manufacturing, sales and distribution and finally after-sales-service to the customer. The concept has led the industry to shift emphasis from Quality Control (QC) to Quality Assurance (QA) and ISO-9000 System is the outcome of the quest of the industry to meet challenges of technology upgradation and ever increasing competition in the International market.

Check Your Progress 2 State whether the following statements are true or false: 1. ISO does not stand for international organisation for standards. 2. ISO-9000 is not a series of international standards for quality systems. 3. The ISO-9000 series of standards are basically Quality Assurance Standards and not product standards. 4. Six is not a disciplines, data driven approach and methodology for eliminating defects in any processfrom manufacturing of transactional and from product to service. 5. Internal customers are the receivers of output transactions that take place within the organisation.

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11.5 SIX SIGMA CONCEPT

Six Sigma has become a new mantra in quality management. It is for this reason that we are discussing it outside the framework of chapter.

11.5.1 What is Six Sigma?

Six Sigma refers to a disciplined, data-driven approach and methodology for eliminating defects in any processfrom manufacturing to transactional and from product to service. A defect is a component that does not fall within the customer's specification limits. For example, in administrative processes, Six Sigma may mean optimizing response time to inquiries, maximizing the speed and accuracy with which inventory and materials are supplied, and fool proofing such support processes from errors, inaccuracies and inefficiency.

11.5.2 Six Sigma

Traditional quality programs focus on detecting and correcting defects. However, Six Sigma programs seek to reduce the variation in the processes that lead to these defects. One of the most important measures of variation is the standard deviation. The standard deviation ('s') of a set of sample scores is a measure of variation of scores about the mean, and is defined by the following formula: s Where: x is the value of the attribute x is the mean value, and n is the number of readings The philosophy underlying Six Sigma is to reduce process output variation. The performance of a process in terms of its variability is compared with different processes using a common metric. This metric is Defects Per Million Opportunities (DPMO). This calculation requires three pieces of data: 1. Unit. The item produced or being serviced. 2. Defect. Any item or event that does not meet the customer's requirements. 3. Opportunity. A chance for a defect to occur.

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A calculation is made using the following formula. DPMO = (Number of defects x 1,000,000)/Number of opportunities for error per unit x Number of units As we have already studied, the control limit of acceptable error of any stream of numbers is 3 s (s being the standard deviation). A product is considered acceptable if the variation is 3 s on the normal specification. This limits in specifications permit 66,738 defects per million. In Six Sigma, on a long-term basis, no more than 3.4 defect parts per million or 3.4 defects per million opportunities (DPMO) are permitted. For a Six Sigma process with only one specification limit (upper or lower), there are six process standard deviations between the mean of the process and the customer's specification limit. This is the origin of the name Six Sigma. For a process with two specification limits (upper and lower), this translates to slightly more than six process standard deviations between the mean and each specification limit such that the total defect rate corresponds to equivalent of six process standard deviations. This relationship is shown graphically in Figure 11.3.

LSL Target

Shifted 6 Sigma Process: 3.4 Total Defects of One Million Opportunities Below The LSL

3 Sigma Process Centered Around The Target: 66,738 Million Opportunities Outside the Lower and Upper Specification Limits

USL

Figure 11.3: Six Sigma A Statistical Representation

A process that is in Six Sigma control will produce no more than two defects out of every billion units. Often, this is stated as four defects per million units which is true if the process is only running somewhere within one sigma of the target specification. The overall performance of a process, as the customer views it, might be 3.4 DPMO. However, a process could indeed be capable of producing a near perfect output. As the process sigma value increases from zero to six, the variation of the process around the mean value decreases. With a high enough value of process sigma, the process approaches zero variation and is known as zero defects. There are two aspects to Six Sigma programs: the people side and the methodology side. We will take this up in order.

11.5.3 Six Sigma Roles and Responsibilities

Successful implementation of Six Sigma is based on using sound personnel practices as well as technical methodologies. The roles and responsibilities of different people in a Six Sigma organization are shown in Box 11.1.

Box 11.1: Roles and Responsibilities in a Six Sigma Organization To convey the need to vigorously attack problems, professionals are given martial arts titles reflecting their skills and roles: Quality Leader/Manager (QL/QM) - The quality leader represents the needs of the customer. The Quality function is independent from the manufacturing or transactional processing functions to maintain impartiality. The quality leader is generally on the CEO's staff, and has equal authority to all other direct reports. Master Black Belt (MBB) - Master Black Belts are typically assigned to a specific area or function such as marketing or machine shop, die shop, etc. MBBs work very closely and share information with the owners of the process to ensure that quality objectives and targets are set, plans are determined, progress is tracked, and training is provided. Process Owner (PO) - Process owners are responsible for specific processes. For instance, in the marketing department there is usually one person in charge of marketing the chief of marketing is the process owner for marketing. Depending on the size of the business and core activities, there may be process owners at lower levels of the organizational structure. For example, in the marketing department there may be a head of marketing services: that's the process owner. Black Belt (BB) - Black Belts are at the heart of the Six Sigma quality initiative. Their main purpose is to lead quality projects and work full time until they are complete. Black Belts can typically complete four to six projects per year. They also coach Green Belts on their projects. Green Belt (GB) - Green Belts are employees trained in Six Sigma who spend a portion of their time completing projects, but maintain their regular work role and responsibilities. Adapted from 2000-2005 iSixSigma LLC

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Six Sigma needs leaders and champions, truly committed to it, to promote it throughout the organization. Corporate wide training in Six Sigma concepts and tools is essential. Professionals in the organization need to be qualified in Six Sigma techniques. MBBs receive in-depth training on statistical tools and process improvement techniques. They must identify appropriate metrics early in the project. They must make certain that the improvement effort focuses on business results that are to be improved. They are the trainers of trainers.

11.5.4 Six Sigma Methodology

While Six Sigma's methods include many of the statistical tools that are employed in other quality movements, DMAIC and DMADV are both special tools developed for Six Sigma applications:
l Six Sigma methodologies used to drive defects to less than 3.4 per million

opportunities.
l Data intensive solution approaches. l Implemented by Green Belts, Black Belts and Master Black Belts. l Ways to help meet the business/financial bottom-line numbers. l Implemented with the support of a champion and process owner.

The Differences of DMAIC and DMADV: DMAIC and DMADV sound very similar, but operate differently. The two methodologies are compared in Table 11.4.

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Table 11.4: Differences between DMAIC and DMADV

DMAIC Define Measure Analyze Improve Control Identify customers and their priorities. Define the project goals and customer (internal and external) deliverables. Identify CTQs (critical-to-quality characteristics) that the customer considers to have the most impact on quality. Measure the process to determine current performance. Identify the key internal processes that influence CTQs and measure the defects currently generated relative to those processes. Analyze and determine the root cause(s) of the defects. Improve the process by eliminating defects. Control future process performance. DMADV Define Analyze Design Verify 1 Identify customers and their priorities. deliverables. Identify CTQs. 3 Measure and determine customer needs and specifications. 4 Identify the key internal processes that influence CTQs and measure the defects currently generated relative to those processes. 5 Analyze the process options to meet the customer needs. 6 Design (detailed) the process to meet the customer needs. 7 Verify the design performance and ability to meet customer needs

Measure 2 Define the project goals and customer (internal and external)

When to use DMAIC: The DMAIC cycle is a more detailed version of the Deming PCDA cycle, which consists of four steps plan, do, check, and act that underlie continuous improvement. The DMAIC methodology, instead of the DMADV methodology, should be used when a product or process is in existence at your company but is not meeting customer specification or is not performing adequately. The objective here is to modify the process to stay within acceptable range. Determine the control parameters and how to maintain the improvements. Put tools in place to ensure that the key variables remain within the maximum acceptance ranges under the modified process. When to use DMADV: The DMADV methodology, instead of the DMAIC methodology, should be used when:
l A product or process is not in existence and the company one needs to be developed. l The existing product or process exists and has been optimized (using either DMAIC

or not) and still doesn't meet the level of customer specification or Six Sigma level.

The objectives of the DMADV methodology finds application in product and process design, or re-engineering that have been discussed in earlier chapters. The design parameters are determined and tools put in place to ensure that the key variables remain within the maximum acceptance ranges under the new or re-engineered process.

11.5.5 Failure Mode and Effect Analysis

Failure Modes and Effects Analysis (FMEA) is methodology used in Six Sigma for analyzing potential reliability problems early in the development cycle where it is easier to take actions to overcome these issues, thereby enhancing reliability through design. FMEA is used to identify potential failure modes, determine their effect on the operation of the product, and identify actions to mitigate the failures. It follows a structured approach

to identify estimate prioritize and evaluate risk of possible failures at each stage of a process. There are several types of FMEAs; some are used much more often than others. The types of FMEA are:
l System - focuses on global system functions l Design - focuses on components and subsystems l Process - focuses on manufacturing and assembly processes l Service - focuses on service functions

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l Software - focuses on software functions A Risk Priority Number (RPN) is calculated for each failure mode. It is an index used to measure the rank importance of the items listed in the FMEA chart. It begins with identifying each element, assembly, or part of the process and listing the potential failure modes, potential causes, and effects of each failure. A crucial step is anticipating what might go wrong with a product. While anticipating every failure mode is not possible, the development team should formulate as extensive a list of potential failure modes as possible. The challenge is to design in quality and reliability early in the development cycle.

11.5.6 Design of Experiment (DOE)

A Design of Experiment (DOE) is also a specialized tool used in Six Sigma. It is a structured, organized method for determining the relationship between factors (Xs) affecting a process and the output of that process (Y). DOE is sometimes also referred to as multivariate testing. It is a system of cost-driven quality engineering that emphasizes the effective applications of engineering strategies rather than advanced statistical techniques. It includes both off-line and on-line quality engineering. Off-line methods efficiently use small-scale experiments to reduce variability and find cost-effective, robust designs for large-scale production and the marketplace. On-line techniques provide cost-based, real-time methods for monitoring and maintaining quality in production. This method allows efficient acquisition of technical information to design and produce low-cost, high-quality products and reliable processes. In contrast to standard statistical tests, which require changing each individual variable, DOE permits experimentation with many variables simultaneously through carefully selecting a subset of them. Its most advanced applications allow engineers to develop flexible technology for the production of families of high-quality products, greatly reducing research, development and delivery time.

11.6 LET US SUM UP

So far, we have been talking of generic problems relating to quality. However, that is only one part of it. Internal linkages of the organizations managers, employees, materials, facilities, processes, and equipment all affect quality. Dr. Joseph Juran and Dr. W. Edwards Deming believed that as variations in quality are individually determined, as much as 85 per cent of the quality problems are management problems. We can understand this by looking at the components that cause quality variations. Product quality variations are generally attributed to: (a) Variations in basic raw materials;

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(b) Variations in machines and tooling; and (c) Variations in set up, machine operators and inspectors. The raw materials entering a process vary in form and composition. They are products of nature and as such they are never uniform. Therefore, identical processing can often not yield identical units of products. You have to realize that poor quality is expensive even when the raw materials wasted are cheap. One cannot waste cheap raw materials without simultaneously wasting other resources that are perhaps expensive. Similarly, machines are set up with jigs, fixtures, dies and tooling. Even machines of the same kind differ due to age, tooling, wear and tear, etc. This makes identical processing very difficult. Set ups are seldom the same; the tooling changes, the jigs and fixtures may change. Machine operators also contribute to product quality variations; for example, if there is a fault in the computer system the operator may bypass the system, or as a last resort even cheat on it. Inspectors, similarly, are only human and often fail to perform their function perfectly. There can be errors of judgment; using worn out or out-of-adjustment gauges can be sources of error; and the monotony of repetition can often induce errors; etc. Quality control, therefore, will always remain a challenge. Different quality gurus have different prescriptions. According to Deming, the responsibility for quality improvement lies management's doorstep. The system is generally the cause for inefficiency and low quality, and it is management's responsibility to work on the system. He stresses variation as a major manufacturing problem and proposes the use of control charts to assist in evaluating variation. Dr. Juran focuses on issues such as rationality, analysis, and management processes in order to get at problems in quality. Although he uses statistical analysis freely, his primary objective is to get top management to help the company's management team develop the habit of annual improvement. Phil Crosby's approach is based on conformance to requirements, prevention, the proper attitude toward quality, and measuring quality as a cost of quality. His approach is based on attitudes and awareness; he focuses on management's role in using this approach to improve quality.

11.7 LESSON END ACTIVITY

Write a note on ISO 9000 and the way to get a licence.

11.8 KEYWORDS
Quality is a state in which value entitlement is realized for the customer and provider in every aspect of the business relationship. Hard Attributes are those attributes that must be met by the delivered product or service if it is to be considered satisfactory. Soft Attributes are those attributes that are desirable and have no hard measures. Design quality is the inherent quality of the product or service in the marketplace. Conformance quality refers to the degree to which the product or service design specifications are met. Freedom from deficiencies refers to the quality of conformance.

Internal customers are the receivers of output transactions that take place within the organization. External customers are the customers that buy the final product, which pays the organization's bills. Total Quality Management can be defined as managing the entire organization so that it excels in all dimensions of products and services that are important to the customer. Benchmarking is a continuous systematic process for evaluating the products, services and work of organizations that are recognized as representing best practices for the purpose of organizational improvement. Six Sigma is a disciplined, data-driven approach and methodology for eliminating defects in any process-from manufacturing to transactional and from product to service.

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11.9 QUESTIONS FOR DISCUSSION

1. What is quality? What are the principles of quality? Discuss. 2. What is ISO 9000? What are the certification requirements and why do manufacturers get certified? Does it control quality? If so, how? 3. Quality Deployment Function has been widely regarded as a breakthrough in the quality function. Discuss.

Check Your Progress: Model Answers

CYP 1 1. T, 2. T, 3. T, 4. T CYP 2 1. False, 2. False, 3. True, 4. False, 5. True.

11.10 SUGGESTED READINGS

Productions and Operations Management, Upendra Kachru, Excel Books, New Delhi. Productions and Operations Management, Everest E Adam & Albert, PHI Publications, IVth Ed. Operations Management (Theory & Problems), Joseph G. Monks, McGraw Hill Intl. Productions and Operations Management, S.N. Chary, TMH Publications. Productions and Operations Management, Chunawala and Patil, Himalaya.