LEARNING ABOUT QUALITY AND APPROACHES FROM QUALITY PHILOSOPHIES

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Total Quality Management MGT510

Lesson # 12

LEARNING ABOUT QUALITY AND APPROACHES FROM QUALITY PHILOSOPHIES

Many individuals have made substantial contributions to the theory and practice of quality management.

These include the well-known "gurus": W. Edwards Deming, Joseph M. Juran, and Philip B. Crosby, as

well as many other consultants, business executives, and academic researchers. Their philosophical

writings and lectures have helped shape management thought as well as provide the foundation for

practical management frameworks designed around quality.

Total quality requires a set of guiding principles. Such principles have been promoted by the three

"quality gurus" Deming, Juran, and Crosby. Their insights on measuring, managing, and improving

quality have had profound impacts on countless managers and entire corporations around the world.

Deming has generated the most interest and controversy. A discussion of his philosophy, which is

actually more about management than quality, follows.

The Deming Management Philosophy

Deming was trained as statistician and worked for Western Electric during its pioneering era of

statistical quality control development in the 1920s and 1930s. During World War II he taught quality

control courses as part of the national defense effort. Although Deming taught many engineers in the

United States, he was not able to reach upper management. After the war, Deming was invited to Japan

to teach statistical quality control concepts. Top managers there were eager to learn, and he addressed

21 to executives who collectively resented 80 percent of the county's capital. They embraced Deming's

message and transformed their industries. By the mid-1970s, the quality of Japanese products exceeded

that of Western manufacturers, and Japanese companies had made significant penetration into Western

markets.

Deming's contributions were recognized early by the Japanese. The Deming Application Prize was

instituted in 1951 by the Union of Japanese Scientists and Engineers in recognition and appreciation for

his achievements in statistical quality control. Deming also received the nation's highest honor, the

Royal Order of the Sacred Treasure, from the emperor of Japan. The former chairman of NEC

Electronics once said, "There is not a day I don't think about what Dr. Deming meant to us."

Deming was virtually unknown in the United States until 1980 where NBC aired a white paper entitled

"If Japan Can . . . Why Can't We?" This program made Deming a household name among corporate

executives, and companies such as Ford invited him to assist them in revolutionizing their quality

approaches. Deming worked with passion until his death in December 1993 at the age of 93, knowing

he had little time left to make a difference in his home country. When asked how he would like to be

remembered, Deming replied, "I probably won't even by remembered in my home country USA" Then

after a long pause, he added, "Well, maybe.... As someone who spent his life trying to keep America

from committing suicide."

Unlike other management gurus and consultants, Deming never defined or described quality precisely.

In his last book, he stated, "A product or a service possesses quality if it helps somebody and enjoys a

good and sustainable market." Deming's philosophy is based on improving products and services by

reducing uncertainty and variability in the design and manufacturing processes. In Deming's view,

variation is the chief culprit of poor quality. In mechanical assemblies, for example, variations from

specifications for part dimensions lead to inconsistent performance and premature wear and failure.

Likewise, inconsistencies in service frustrate customers and damage a firm's image. To achieve reduced

variation, he advocates a never-ending cycle of product design, manufacture, test, and sales, followed by

market surveys, then redesign, and so forth.

Deming has summarized his philosophy in what he calls "A system of Profound Knowledge."

Total Quality Management MGT510

System of Profound Knowledge

Profound knowledge consists of four parts: (1) appreciation for a system, (2) some knowledge of the

theory of variation, (3) theory of knowledge, and (4) psychology.

Appreciation for a System

A system is a set of functions or activities within an organization that work together to achieve

organizational goals. For example, McDonald's restaurant can be viewed as a system. It consists of the

order-taker/cashier subsystem, grill and food preparation subsystem, drive-through subsystem, and so

on.

The components of any system must work together for the system to be effective. When parts of a

system interact, the system as a while cannot be understood or managed solely in terms of its parts. To

run any system, manager must understand the interrelationships among all subsystems and the people

that work in them. One example is performance appraisal. The following are some of the factor within a

system that affects the individual performance of an employee:

Training received

Information and resources provided

Leadership of supervisors and managers

Disruptions on the job

Management policies and practices

According to Deming, however, most performance appraisals do not recognize these factors.

Management must have an aim, a purpose to which the system continually strives. Deming believes that

the aim of any system is for everybody stockholders, employees, customers, community, the

environment to gain over the long term. Stockholders can realize financial benefits, employees can

have opportunities for training and education, customers can receive products and services that meet

their needs and create satisfaction, the community can benefit from business leadership, and the

environment can benefit from socially responsible management.

Deming emphasizes that management's job is to optimize the system. By making decisions that are best

for only a small part of the system (often encouraged by competition), we sub-optimize. Sub-

optimization results in a loss to everybody in the system. For example, a common practice is to purchase

materials or services at the lowest bid. Inexpensive material may be of such inferior quality that they

will cause excessive costs in adjustment and repair during manufacture and assembly. Although the

purchasing department's track record might look good, the overall system will suffer.

This theory applies to managing people also. Pitting individuals or departments against each other for

resources is self-destructive. The individuals or departments will perform to maximize their expected

gain, not that of the firm as a whole. Employees must cooperate with each other. Likewise, sales quotas

or arbitrary cost reduction goals do not motivate people to improve the system and, ultimately, customer

satisfaction; workers will perform only to meet the quotas and goals.

Theory of Variation

The second part of Profound Knowledge some understands of statistical theory, particularly as it applies

to variation. Just as no two pizzas or "Qeema Nans" are exactly alike, no two outputs from any

production process are exactly alike. A production process contains many sources of variation. Different

lots of martial will vary in strength, thickness, or moisture content, for example. Cutting tools will have

inherent variation in strength and composition. During manufacturing, tools will experience wear,

machine vibrations will cause changes in settings, and electrical fluctuations will cause variations in

power. Operators may not position parts on fixtures consistently.

Total Quality Management MGT510

The complex interaction of all these variations in materials, tools, machines, operators, and the

environment cannot be understood. Variation due to any individual source appears random; however,

their combined effect is stable and can usually be predicted statically. Factors that are present as a

natural part of a process are called common causes of variation.

Common causes generally account for about 80 to 90 percent of the observed variation in a production

process. The remaining 10 to 20 percent result from special causes of variation, often called assignable

causes. Special causes arise from external sources that are not inherent in the process. A bad batch or

material purchased from a supplier, poorly trained operator, excessive tools wear, or mis-calibration of

measuring instruments are examples of special causes. Special causes result in unnatural variations that

disrupt the random pattern of common causes. Hence they are generally easy to detect using statistical

methods, and it is usually economical to remove them.

A system governed only by common causes is said to be stable. Understanding a stable system and the

differences between special and common causes of variation is essential for managing nay system.

Management can make two fundamental mistakes in attempting to improve a process:

To treat as special cause any fault, complaint, mistake, breakdown, accident, or shortage when it

actually came from common causes.

To attribute to common causes any fault, complaint, mistake, breakdown, accident, or shortage

when it actually came from a special cause.

In the first case, tampering with a stable system will actually increase the variation in the system. In the

second case, we can miss the opportunity to eliminate unwanted variation by assuming that it is not

controllable. Changing a system on the basis of a special cause can damage the system and add cost.

Variation should be minimized. The producer and consumer both benefit from reduced variation. The

producer benefits by having less need for inspection, less scrap and rework, and higher productivity.

The consumer is assured that all products have similar quality characteristics; this especially important

when the consumer is another firm using large quantities of the product in its own manufacturing or

service operation.

Variation increases the cost of doing business. The only way to reduce variation due to common causes

is to change the technology of the process -the machines, people, materials, methods, or measurement

system. The process is under the control of management, not the production operators. Pressuring

operators to perform at higher quality levels may not be possible and may be counterproductive.

Variation due to special causes can be identified through the use of control charts, which shall be

introduced latter.

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