MODULE NO.

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CONCEPT, HISTORY AND PHILOSOPHY OF QUALITY MANAGEMENT

Lesson 1: An Overview of Quality Management

DURATION: 1 week

INTRODUCTION
This lesson focuses on introducing the basic concepts and principles of quality
management together with the scale and changing criteria of quality. At the end of this
lesson, students will know and understand the importance of quality management in
manufacturing and service firms.

LEARNING OBJECTIVES
When the students completed this lesson, they should be able to:
a. Define Quality and Quality Management
b. Explain the Concepts and Principles of Quality Management
c. Understand the Importance of Quality Management

LESSON PROPER

1. What is Quality?
There are several definitions of quality. Some are related to objective
facts while others to more subjective feelings, but they are interdependent. Quality
experts define it in different way depending on their environment and criteria.
Quality defined by American Society for Quality as “the totality of
features and characteristics of a product or service that bears on its ability to satisfy
stated or implied needs.” Furthermore, the quality of a good or service is the customer
perception. It is a customer’s mind-set who accepts specific good or service and
acknowledges its ability to exceed his or her expectations and satisfy them.

Product Features
One of the definitions of quality relates to product features. For example, a
smartphone designed, stylish display, technology used, memory capacity, camera
features, battery capacity and connectivity features are some of the concerns of
customers in regard of choosing and buying a smartphone. In this case, product
features will have a major effect on company revenues because higher quality can
result to higher price.

Freedom from deficiencies

Another definition of quality is as product or service free from deficiencies.
Following the smartphone example, battery has no defects, high water and dust
resistance. Freedom from deficiencies lead to reducing the company costs because
higher quality in this case means less rework, fewer warranty claims and no customer
complaints.

Production perspective
Quality can also be defined as conformance to specifications. The degree to
which a product meets the design specifications and fulfills all the customer need.
Products are manufactured and controlled based on standards, as in case of an
inspection by regulatory body, the product proves that it meets the requirements
established by the said body.

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 In manufacturing, quality can be a measure of excellence, free from defects
and variations. Quality is accomplished by strict and consistent commitment to certain
standards to achieve product uniformity in order to satisfy customer requirements. If a
smartphone company finds a battery defect in one of their units and makes a product
recall, production will decrease because of customer trust will be lost in the
smartphone’s quality.

Value perspective
Quality means providing value to the customers, that meet or exceed
customer’s expectations, yet still affordable. Quality also takes into account the
reduction of waste that a product or service may cause to environment, yet still
allowing manufacturing and service firms maintain customer satisfaction.

Other definitions from recognized organizations and experts in the world of quality are:
§ “Quality is the degree to which an object or entity satisfies a specified set of
attributes or requirements.”
§ “The quality of something can be determined by comparing a set of inherent
characteristics with a set of requirements. If those inherent characteristics
meet all requirements, high or excellent quality is achieved. If those
characteristics do not meet all requirements, a low or poor level of quality is
achieved.”
§ “Quality is the degree to which a set of inherent characteristics fulfils
requirements.”
§ “A subjective term for which each a person or sector has its own definition. In
technical usage, quality can have two meanings: (a) the characteristics of a
product or service that bear on its ability to satisfy stated or implied needs; (b)
a product or service free of deficiencies.”
§ According to Joseph Juran, quality means “fitness for use.”
§ According to Philip Crosby, it means “conformance to requirements.”

Finally, quality is an outcome, a characteristic of a good and services provided to

customers, and the advantage of an organization which has satisfied all its
stakeholders. Customer requirements are the core ideal behind all quality definitions.

“20th century was a century of manufacturing and 21st

century is the century of Quality.”
-Joseph M. Juran

“Quality is everybody’s responsibility.”

-Edward Deming

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The table below shows the different dimensions of product quality.

Table 1.1. Dimensions of Product Quality

Performance Basic operating characteristics

Features ‘Extra” items added to basic features
Reliability Probability product will operate over time
Conformance Meeting pre-established standards
Durability Life span before replacement
Ease of getting repairs, speed and competence of
Serviceability repairs
Aesthetics Look, feel, sound, smell or taste
Safety Freedom from injury or harm
Subjective perceptions based on brand name,
Other perceptions
advertising, etc.

Table 1.2. shows the different dimensions of service quality.

Table 1.2. Dimensions of Service Quality

Involves consistency of performance and

Reliability
dependability
Concerns the willingness or readiness of
Responsiveness
employees to provide service
Means possession of the required skills and
Competence
knowledge to perform the service
Access Involves approachability and ease of contact
Involves politeness, respect, consideration,
Courtesy
and friendliness
Means keeping customers informed and
Communication
listening to them
Involves trustworthiness, believability and
Credibility
honesty
Security Is the freedom from danger, risk or doubt
Understanding/knowing the Involves making the effort to understand the
customer customer’s needs.
Tangibles Include the physical evidence of the service

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 2. The Scale of Quality
Companies was able to identify their quality levels to precise detail. The general
objective is to achieve customer satisfaction economically, rather than costly over-
perfection. The figure below shows the different scales of quality by attributes.

Table 1.3. Scale of Quality

QUALITY CUSTOMER OPINION COST

ATTRIBUTE
LEVEL ON QUALITY LEVEL FACTOR

18 Meticulous

17 Fantastic

16 Amazing 7 Sigma Level

Costly
15 Outstanding

14 Exceptional 6 Sigma Level

13 Excellent

12 Very Good 5 Sigma Level

11 Good
Optimal
10 Acceptable 4 Sigma Level

9 Fair

8 Troublesome 3 Sigma Level

7 Poor

6 Extremely Poor 2 Sigma Level

Cheap
5 Nonexistent

4 Shocking 1 Sigma Level

3 Hopeless
Bankruptcy
2 Disastrous 0 Sigma Level

1 Catastrophic

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 3. Changing Criteria of Quality
For several years, concept of quality has been evolved. Table 1.4. shows the
development of these concepts.

Table 1.4. Criteria of Quality

CRITERION CONCEPT OF PAST TODAY’S CONCEPT

Definition of Quality Product Quality Customer Requirement
Focus on Product and Focus on all Business
Quality Focus
Services Tasks
With inspection/quality
Quality Responsibility With all employees
control department
Organization Quality is a function Quality is a strategy
Result, or how you
Result is important Process is important
achieve the result?
Quality is measured by Quality is measured by
Measurement
product attributes the cost of quality
Quality champions were Quality champions are
Quality Champions
quality employees top management teams
Both systems and the
System is the main
Human Involvement human component are
focus
the main focus
Quality is considered a Quality is process
Concept
tool philosophy

4. What is Quality Management?

According to Adam Barone, “Quality management is the act of overseeing all
activities and tasks needed to maintain a desired level of excellence. Quality
management includes the determination of a quality policy, creating and
implementing quality planning and assurance, and quality control and quality
improvement.”

Seven Quality Management Principles

1. Customer Focus : Meet and exceed customer expectations

2. Leadership : Provide purpose, direction and engagement
3. Engagement of People : Recognition, empowerment and
enhancement of skills and knowledge
4. Process Approach : Understand processes to optimize
performance
5. Improvement : Maintain current performance and to create
new opportunities
6. Evidence-based
Decision Making : Facts, evidences and data analysis for
decision making.
7. Relationship
Management : Manage relationship with interested parties
to optimize performance

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 Customer Focus

Relaionship
Management Leadership

Evidence-based Engagement of
Decision Making People

Improvement Process
Approach

Figure 1.1. Quality Management Principles

5. What is the Importance of Quality Management?

Quality management plays a crucial role in an organization’s performance and
growth. It is also a key resource in the competition for customer relationships, striving
to deliver a greater experience. In order to succeed an organization, quality should be
maintained at every level. Organizations can implement a set of procedures to ensure
their products and services meet the highest quality standards and perform optimally.
The end goal is to enhance customer satisfaction and drive business growth.

More Consistent Products and Increased Efficiency

Quality management value lies in its ability to help companies improve their
products’ reliability, durability and performance. These factors differentiate an
organization from its competitors. Better products equal happier customers and higher
revenue. Also, it ensures clear communication structures, responsibilities and tasks
across all departments. This results in higher employee morale, improved
performance and increased efficiency.

Greater Customer Satisfaction

Organizations cannot ignore the cost of bad customer relations. If the products
and services fail to meet customer expectations, brand revenue of the organization
will suffer.
In today’s market, customers are more demanding than ever. They can choose
from thousands of brands and have access to millions of online stores. If the
organization wants to stand out, it’s critical to exceed customer’s expectations. Quality
management can help your organization to turn prospects into loyal customers. It does
so by continuously improving the products and services, incorporating changes and
eliminating defects. Furthermore, it provides organizations with the information they
need to develop goods and services that customers want. In the long run, this helps
increase market share and gives competitive advantage.

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Lower Costs, Increased Profits
Organizations can implement quality management practices to identify areas of
improvement in a variety of sectors, such as: Sales and Marketing, Research and
Development, Production and Operations, Finance, Management Information System
and Administration.
When quality management consistently applied over time, these processes can
reduce costs and increase profit. For example, a quality product will require less
rework, leading to cost savings.

Reduced Risks
Once the products leave the building, there are plenty of risks to consider.
Product recalls, for instance, can result in significant long-term financial losses and
affect the customer experience. As the business owner, the organization is responsible
for bearing the costs of product recalls. In some worst-case scenario, organizations
may have to deal lawsuits and even file for bankruptcy. In this reason, organizations
cannot ignore or overlook the importance of quality management.

Fewer Human Errors

Quality management practices can reduce human error and improve
productivity. Employees will have a set of guidelines to follow during day-to-day
operations, which helps eliminate presumption and ensures compliance.

Keep Up with the Competition

Small organizations must do everything in order to keep up with their larger
competitors. Delivering superior products and services is the ultimate goal. Quality
management provides the information and guidelines for doing things correctly. Also,
it can help the organization by achieving optimum cost, efficiency and utilization of
available resources.
In the long run, these practices strengthen the organization’s brand, and raising
your level against to your competitors. Eventually it will lead to stronger market
position.

REFLECTION/LEARNING INSIGHTS
In one to two paragraphs write down the knowledge you have learned in this
lesson.

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ASSESSMENT
1. Explain in your own words, what is meant by quality.
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2. Explain how improving quality can lead to reduced costs.

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3. How will you differentiate product quality to service quality?

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SUMMARY
§ Quality is a term that means different things to different people. We define
quality as “the totality of features and characteristics of a product and services
that bears on its ability to satisfy stated or implied needs.” Defining quality
expectations is critical to effective and efficient operations.
§ Quality management is the act of overseeing all activities and tasks needed to
maintain a desired level of excellence. Quality management includes the
determination of a quality policy, creating and implementing quality planning
and assurance, and quality control and quality improvement.
§ The seven quality management principles: Customer Focus, Leadership,
Engagement of People, Process Approach, Improvement, Evidence-based
Decision Making, Relationship Management.
§ Some of the importance of Quality Management are: More Consistent
Products and Increased Efficiency, Greater Customer Satisfaction Lower
Costs, Increased Profits, Reduced Risks, Fewer Human Errors Keep Up with
the Competition

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REFERENCES

Diaz, Enrique (2014), What is your definition of Quality? Geneva Business

News

Heizer, Jay, (2017), Operations Management: Sustainability and Supply

Chain Management 12th Edition, Pearson

Kiran, D.R. (2017), Total Quality Management: Key Concepts and Case
Studies, BS Publications

Picincu, Andrea (2018), The Importance of Quality Management

https://www.investopedia.com/terms/q/quality-management.asp

www. qualitygurus.com