appraisal costs The costs incurred to me
Individuals who have had a significant impact on the field of quality include W. Edwards Deming, Joseph Juran, Philip Crosby, and Genichi Taguchi.
• Design for manufacture and assembly (DFMA) and design for operations (DFO) are ways to focus on quality and cost during the design of goods and services. Product quality is a function of product design, process design, and employee execution. The better a firm is at these functions, the better it will be at building high-quality products. Inspection does not enhance quality; it provides feedback about the level of quality achieved and the potential source of quality problems.
• Every employee is responsible for quality. It should be an organization-wide effort. • Quality function deployment is used to translate the voice of the customer into
product and process design characteristics. • The components of TQM include a focus on the customer, quality function
deployment, responsibility for quality, team problem solving, employee training, fact-based management, and a philosophy of continuous improvement.
Memorial Hospital is a privately owned 600-bed facility. The hospital provides a broad range of health care services, including complete laboratory and X-ray facilities, an emer- gency room, an intensive care unit, a cardiac care unit, and a psychiatric ward. Most of these services are provided by several other hospitals in the metropolitan area. Memorial has purposely avoided getting involved in any specialized fields of medicine or obtaining very specialized diagnostic equipment because it was felt that such services would not be cost-effective. The General Hospital, located only a few miles from Memorial, is affiliated with the local School of Medicine and offers up-to-date services in those specialized areas. Instead of trying to compete with General Hospital to provide special services, Memorial Hospital has concentrated on offering high-quality general health care at an affordable price. Compared with the much larger General Hospital, Memorial stresses close personal attention to each patient from a nursing staff that cares about its work. In fact, the hospital has begun to place ads in newspapers and on television, stressing its patient-oriented care.
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CHAPTER 4Discussion Questions
However, the hospital’s administrator, Janice Fry, is concerned about whether the hospital can really deliver on its promises, and worries that failure to provide the level of health care patients expect could drive patients away. Janice met recently with the hospital’s managerial personnel to discuss her concerns. The meeting raised some questions about how the hospital’s quality of health care could be assured. Jessica Tu, director of nursing, raised the question, “How do we measure the quality of health care? Do we give patients a questionnaire when they leave, asking if they were happy here? That does not seem to answer the question because we could make a patient happy, but give them lousy health care.” Several other questions were asked concerning the hospital’s efforts to keep costs down. Some people were concerned that an emphasis on costs would be detrimental to quality. They argued that when a person’s life is at stake, costs should not be of concern.
After the meeting, Janice began thinking about these questions. She remembered reading recently that some companies were using total quality management (TQM) to improve their quality. She liked the idea—if it could be used in a hospital.
1. Discuss some ways that a hospital might measure quality. 2. What are the potential costs of quality for Memorial Hospital? How could the
value of a human life be included? 3. Are there any ideas or techniques from TQM that Janice could use to help Memo-
rial focus on providing quality health care? 4. What measures could Memorial use to assess the quality of health care it is
providing?
1. What are the similarities between internally and externally oriented definitions of quality?
2. Describe the approach that a company should use in order to understand cus- tomers’ expectations.
3. List the characteristics for service quality and those for manufacturing quality. What are the commonalities and differences?
4. What assumptions about the relationship between the company standards and those of the customer are made by internally-oriented definitions of quality?
5. What are the differences and similarities among the philosophies of Deming, Juran, Crosby, and Taguchi?
6. What important organizational activities enable a firm to build quality into its products? Explain each of these.
7. Is it possible for a company to implement TQM if top management delegates responsibility to middle managers? Why or why not?
8. List the components of quality management, and briefly describe a few of the ideas, concepts, or techniques that are included in each.
9. List some customer needs associated with home theater equipment, and group these together by category. Suggest some possible engineering characteristics that could measure achievement of these attributes.
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CHAPTER 4Key Terms
appraisal costs The costs incurred to mea- sure quality, assess customer satisfaction, inspect and test products.
benchmarking A process by which a company compares its performance and methods for a certain activity against that of a recognized leader or an outstanding competitor.
continuous improvement The concept that no matter how good a company is, it must always work to do better.
design for manufacture and assembly (DFMA) Designing products so they are easy to manufacture or assemble, resulting in high quality and low cost.
design for operations (DFO) Designing services so that operations function can provide high quality and low cost.
external failure costs Costs of quality incurred after a product has reached the customer.
!shbone chart A diagram that is used in problem-solving to list all the possible causes of a problem, usually divided into materials, equipment, methods, and personnel.
house of quality A diagram used to con- vert customer attributes desired in a prod- uct to engineering characteristics, parts characteristics, and process details.
internal failure costs Costs of quality associated with defects found before the product reaches the customer.
Plan-Do-Check-Act cycle A problem- solving process used for continuous improvement; also called Deming Wheel or Shewhart cycle.
poka-yoke An approach adopted by many companies to prevent defects. The term is a rough approximation of Japanese words that mean “mistake proo!ng.”
prevention costs Quality costs that result from activities to prevent defects from occurring, such as employee training, quality control procedures, special efforts in designing products, or administrative systems to prevent defects.
quality May have de!nitions that are either internal or external to a company, but de!ned most often as consistently meeting or exceeding customers’ needs and expectations.
quality function deployment (QFD) A procedure for spreading the voice of the customer throughout a company when determining how products should be designed and processes operated.
robust design Product design that guar- antees high quality regardless of variations that may occur during the processes that make the product and provide it to the customer.
10. One quality myth is that increased quality means increased costs. Use your own personal knowledge or experiences to describe how this may not be true.
11. List the three categories of quality costs, and briefly define each. 12. Explain how the idea of quality function deployment may be applied to a service
organization that is not providing a tangible good as its product.
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CHAPTER 4Key Terms
Six Sigma A measure of process perfor- mance that means only 3.4 defects will occur in every 1 million units produced, or 99.99966% error free. The term Six Sigma refers to a broad range of defect prevention strategies.
statistical process control (SPC) The use of statistical methods to determine when a process that produces a good or service is getting close to producing an unacceptable level of defects.
total quality management (TQM) An organizational commitment to continu- ously improve on meeting or exceeding customers’ needs and expectations.
value proposition A measure of what the buyer gives up compared to what the buyer receives. When the value proposi- tion is high, the bene!ts are signi!cantly greater than the costs.
voice of the customer A concept in prod- uct design to determine what the cus- tomer wants, likes, and doesn’t like in the product.
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