Deming’s philosophy is illustrated
Deming’s philosophy is illustrated by his well- known 14 points for the transformation of man- agement, shown in Table 4.2. Today, there is still confusion and disagreement about what is meant by some of Deming’s points; however, Deming’s basic premise notes that the system, not employees, causes defects. Management is responsible for changing the system, and must
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accept that responsibility instead of blaming employees when defects occur. Because of his background, Deming also stressed the use of statistical process control, and encour- aged training all employees in its use.
Source: Deming, W. E. Out of the crisis. Cambridge, MA: MIT Center for Advanced Engineering Study, 1986.
Joseph M. Juran, who was an active lecturer until 1995 when he retired, was also a col- league of Walter Shewhart, and lectured and taught in Japan after World War II. Some have argued that Juran’s contribution to Japan’s quality efforts was even greater than Deming’s. Like Deming, Juran emphasized management’s responsibility for ensuring quality. Juran, however, focused on the customer by defining quality as “fitness for use.”
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He also emphasized the need for continuous improvement and stressed that quality must be built on three elements: quality planning, quality control, and quality improvement.
Philip Crosby became internationally recognized with the publication of his 1979 book, Quality Is Free. In that book, and in later publications, he argues that failure costs are much greater than most companies had thought. By reducing failure costs, companies can save money, hence the title of Crosby’s book. Crosby is most often recognized for emphasizing the importance of considering all costs of quality. He is also responsible for promoting the idea that all errors must be eliminated, indicated by his slogan “do it right the first time,” and the concept of zero defects.
Japanese companies were among the world’s first to place a strong emphasis on quality, so it is not surprising that several people from Japan have made significant contributions to the field of quality. Genichi Taguchi’s ideas are particularly important. Taguchi first gained prominence shortly after World War II, working with research facilities to develop Japan’s telephone system. After noticing that considerable time and effort were expended in experimentation and testing, Taguchi developed procedures for designing experiments so that more information could be obtained with fewer experiments. Taguchi has also contributed an entire philosophy about how products should be designed, and that phi- losophy now forms an important part of quality management.
Taguchi argues that quality must be designed into a product. His point is that quality cannot be achieved through inspections after the good is made or the service is provided. Thus, an important part of Taguchi’s philosophy is based on the concept of robust design— designs that guarantee high quality regardless of variations (such as employee errors) that may occur during the processes that produce the product. For example, McDonald’s has designed a ketchup dispenser that puts precisely the right amount of ketchup on each burger, eliminating variations in product quality that may result from employees dispens- ing too much or too little.
Building Quality into Product Design for manufacture and assembly (DFMA) emphasizes that products should be designed so they are simple and inexpensive to produce. This concept has also been applied to service operations under the term design for operations (DFO). Both concepts underscore that the design of the product and the process by which the product is made are key factors when determining quality. Quality inspection does not improve the under- lying quality of the product or the process. Building quality into a product, rather than trying to inspect it into the product, is described in the following:
1. Product Design: This is how the product, either a good or a service, functions. It determines the features, functions, aesthetics, and performance of a product, which are essential parts of the product’s quality. For example, the capabilities of an electronic device such as a notebook computer are determined by product design. The product design determines the capability of the display, the size and
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performance of the processor, and Wi-Fi accessibility. Product design also deter- mines the reliability, durability, serviceability, and other key quality elements. The ability of Travelocity to provide robust and reliable service depends upon how it designs its servers, the user interface, and access to travel data. In large measure, the cost to produce the good or to provide the service is determined when the product is designed. Product design is one of the most important deci- sions a firm will make.
2. Process Design: This is how the product, either a good or a service, is produced. Process design includes the methods that the firm uses to transform the product ideas created in the product design into the good or service that the customer is purchasing. In manufacturing, process design includes selecting the materials, facilities, and equipment used to make the product as well as determining the labor skills needed to execute the process plan. In restaurants, decisions regard- ing the quality of the purchased food are important. In health care, facilities and equipment selection are also a very important decision. In banking, materials are really not an issue and facilities and equipment are limited to office space, ATMs, and basic office equipment. By their nature, process design for service operations heavily depends upon people skills. In many service operations, labor costs rep- resent 70% or more of the cost of providing a service.
3. Work Execution: This is the performance of the plan created in the product and process design. If the product design and the process design represent the foot- ball game plan, then playing the game is the work execution. The success of this depends on how well the plan is communicated to the workforce, whether the workforce has been selected so it has the basic skills to execute the plan, and how well the workforce has been trained to do the work. When these functions are performed well, the product and process designs should be well executed and a high-quality product should be produced.
4. Inspection: This is an assessment of the quality of the good or service. If the first three steps are properly performed, then inspection is, theoretically, unneces- sary. Inspection provides feedback about how well the product is designed and built. Its primary benefit is to identify quality problems and connect them to their sources. Defects may be caused by a poor product design (such as a defective software interface), a poor process design (such as equipment that is unsuitable for the product), or poor work execution (such as an untrained worker or poorly executed maintenance plan). Inspection does not increase the quality of the prod- ucts being produced, but it may prevent defective products from reaching the customer. The primary purpose of inspection is gaining information that helps the firm improve quality by changing design and work execution.
4.4
Total quality management (TQM) is an approach to quality management that origi-nated in Japan and was adopted successfully by many companies throughout the world, including American Express and GE. TQM is an organization-wide philoso- phy that embodies the following components:
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• Focus on the customer • Quality function
deployment • Responsibility for quality • Team problem solving • Employee training • Fact-based management • Philosophy of continuous
improvement
Each of these components is dis- cussed next, in detail. It should be stressed, however, that they apply to all aspects of a company’s opera- tion, from design of products and processes to distribution and after- the-sale service. Further, all parts of the company must be involved, including those which do not usu- ally interact with external custom- ers, but instead serve other parts of the company.
Customers are usually those outside a company, specifically the people or the organiza- tions that purchase the good or service the company produces. However, it is also possible to think of internal customers as parts of an organization that utilize information or other outputs from another functional area inside the organization, such as accounting. In a hos- pital, the laboratory could think of the physician who requests lab work as its customer. Thus, a customer can be anyone, whether inside or outside an organization, who receives the output from an activity or process.
Juran’s definition of quality as fitness for use provides the groundwork for focusing on the customer. Unfortunately, many companies in the past have identified what they thought the customer wanted without actually asking the customer. Companies that use TQM rely on what is called the voice of the customer.
The voice of the customer describes what customers want and what they like and do not like. Listening to the voice of the customer is essential to be successful. To do this, many companies get to know their customers personally. For example, some companies hold focus groups, in which customers are contacted to discuss their wants, needs, and expec- tations, and to respond to proposals to change the good or service produced. Companies ask questions about how the customer uses their product. If a company understands its customers, it can better meet or exceed their needs and expectations. Listening to the voice of the customer is more than providing customers with what they request. Simply stated, customers are likely to verbalize what it is with which they are familiar. If a new technol- ogy is available and customers are not aware of it, they will not know how to describe their need. If the company understands the customer and the customers’ wants, it may
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have ideas and technologies that could be applied to meet a future need. For example, which customers told Apple that they wanted a small portable device that could down- load and play music on the run (the iPod)? Apple has succeeded by anticipating what technology customers may want and how they could use these products.
The quality of a product, whether that product is a manufactured good or a service, is largely dependent upon how well the product and the processes for producing it were designed. Listening to the voice of the customer provides a company with valuable infor- mation. That information, however, usually describes the customer’s needs or expecta- tions, such as the need for transactions at a bank to be handled quickly and accurately, or the expectation that a room reserved at a hotel will be available when the guest arrives. Those needs and expectations must be transformed into design characteristics for the product and process. Quality function deployment (QFD) is one method that can be used to make that transformation by relating customer needs and expectations to specific design characteristics through a series of grids or matrices.
