Quality Management

Diep Quoc Bao, PhD.

Email: baodq@ueh.edu.vn
 Course Desription

This course is designed to provide the fundamental knowledge of total

quality approach in driving business success. It is also equipped with the
advanced quality assessment methods and quality management
techniques. The focus of this course will be to expose the students with
the contemporary quality management principles, practices and systems
help enhance their skills and abilities to identify, analyse and understand
the impacts of quality management systems on performance excellence
in any organisation.

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 Learning Outcomes

• Understand the total quality approach to quality management

• Analyze the principles and elements of total quality management
• Apply key quality management techniques in practice
• Employ key measurement methods in quality measurement in practice
• Identify the essence of ISO 9000 quality management system
• Enhance teamwork, presentation, and critical thinking skills

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 Student Responsibilities

Respect
Teamwork
Activeness
Engagement
Responsibility

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 Contents

Topic 1: Quality and the Total Quality Approach

Topic 2: Quality Management (QM)
Topic 3: Quality Assessment and QM Techniques
Topic 4: QM System and Customer-Focused Organization
Topic 5: ISO 9000 Quality Management System

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 Quality and the
Topic 1 Total Quality Approach

╸ What is Quality?
╸ Two Views of Quality
╸ Product Quality Attributes
╸ Quality Cycle
╸ Fundamental Factors Affecting Quality
╸ Quality Costs

6
“ “Customer Experience (CX) Trends In 2024
ᵜ Generative AI In CX
ᵜ Subscriptions Get Smart
ᵜ CX-Driven Value
ᵜ Omnichannel Evolved
ᵜ The Rise Of The Synthetic Customer
ᵜ Sustainable CX
ᵜ Security-Centric CX
ᵜ Chatbots That Enable Rather Than Annoy
ᵜ Immersive CX
ᵜ Sentiment-Driven CX”

Source: www.forbes.com
7
 The Role of Quality Management in Business Success

• Increasing global competition

• Increasing global expectations
• Opposing economic pressures
• New approaches to management

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 The Role of Quality Management in Business Success

The tranformative trends

ᵜ Transaction  Relationship
ᵜ Manufactured quality  Perceived quality
ᵜ Products  Experiences
ᵜ Value-added  Value Co-creation
ᵜ Value delivery  Value propositions
ᵜ Goods  Services
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 The Role of Quality Management in Business Success

ᵜ Quality is uniquely positioned to accelerate organizational growth

through better execution and alignment
ᵜ Quality provides the voice of the customer critical to developing
innovative products and services.
ᵜ Quality can provide an organization with a competitive edge
ᵜ “No quality, no sales. No sales, no profit. No profit, no jobs.”

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Product?
Product is understood
as the results of
activities and processes
inside and outside
organization.

11
 Perfection Fast delivery

Providing a good, usable product

What is Quality?
Eliminating waste
Doing it right the first time

Delighting or pleasing customers

Consistency
Total customer service and satisfaction

Compliance with policies and procedures

12
 What is Quality?

 Transcendent Perspective: excellence

 Product Perspective: quantities of product attributes
 User Perspective: fitness for intended use
 Value Perspective: quality vs. price
 Manufacturing Perspective: conformance to specifications
 Customer Perspective: meeting or exceeding customer expectations

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 What is Quality?

“Quality is the degree to which a set of inherent characteristics

fullfils requirements”

Notes:
 Requirement is need or expectation that is stated, generally
implied or obligatory
 Requirement of customer, organization, and interested parties

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 Two Views of Quality
The Traditional View vs The Total Quality Perspective:
ᵜ Productivity vs Quality
ᵜ How quality is defined
ᵜ How quality is measured
ᵜ How quality is achieved
ᵜ Attitude toward defects
ᵜ Quality as a function
ᵜ Responsibility for quality
ᵜ Supplier relationship

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 Total Quality Approach

- With total quality, the emphasis is on continual improvement of

products, processes, and people in order to prevent problems before they
occur.
- Employees are empowered to think and make recommendations for
continual improvement.
- The total quality approach focuses on long-term profits and continual
improvement.
 Total Quality concerns quality in the broadest sense, including quality of
products, services, people, processes, and environments…

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Total Quality Approach

Competitive Advantage:
• Is driven by customer wants and needs
• Makes significant contribution to business success
• Matches organization’s unique resources with opportunities
• Is durable and lasting
• Provides basis for further improvement
• Provides direction and motivation
Quality supports each of these charateristics.

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 Quality and Profitability

Improved quality Improved quality

of design of conformance

Higher perceived Higher Lower

value prices manufacturing and
service costs
Increased market Increased
share revenues

Higher profitability

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 Quality Attributes

“Soft” Attributes
Emotional attributes
“Hard” Attributes
Functional attributes

19
 Quality Determinants
3P
Performance QCDSS
Price Quality
Punctuality Cost
Delivery
Service
Safety

20
 Quality Progress in Manufacturing Systems

Quality in Marketing
Marketing and sales personnel are responsible for determining the needs
and expectations of consumers

Quality in Product Design

Product design and engineering functions develop technical specifications
for products and production processes to meet the requirements
determined by the marketing function.

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 Quality Progress in Manufacturing Systems

Quality in Purchasing
A purchasing agent should not simply be responsible for low-cost
procurement, but should maintain a clear focus on the quality of
purchased goods and materials
Quality in Production Planning & Scheduling
Poor quality often results from time pressures caused by insufficient
planning and scheduling
Quality in Manufacturing and Assembly
Both technology and people are essential to high-quality manufacturing

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 Quality Progress in Manufacturing Systems

Quality in Process Design

Manufacturing processes must be capable of producing output that meets
specifications consistently

Quality in Finished Goods Inspection and Testing

The purposes of final product inspection are to judge the quality of
manufacturing, to discover and help to resolve production problems that
may arise, and to ensure that no defective items reach the customer

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 Quality Progress in Manufacturing Systems

Quality in Installation and Service

Service after the sale is one of the most important factors in establishing
customer perception of quality and customer loyalty

Quality in Services
Service is defined as “any primary or complementary activity that does not
directly produce a physical product – that is, the non-goods part of the
transaction between buyer (customer) and seller (provider).”

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 Quality Gaps

Product cycle
Research & Design
phase

Production & Operation

phase Distribution & Consumption
phase

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External Factors Internal Factors

(Technological development - Men

& innovation; Economic
environment; Socio-cutural - Method
factors; Government - Material
management mechanism..)
- Machine

Factors
Affecting
Quality

26
 Cost of Quality

Sum of costs incurred in maintaining acceptable quality levels plus the cost
of failure to maintain that level (cost of poor quality)

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 Cost of Quality

Prevention Costs
Prevention costs are incurred to prevent or avoid quality
problems. These costs are associated with the design,
implementation, and maintenance of the quality
management system

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 Cost of Quality

Prevention costs are planned and incurred before actual operation, and
they could include:
• Product or service requirements: establishment of specifications for
incoming materials, processes, finished products, and services
• Quality planning: creation of plans for quality, reliability, operations,
production, and inspection
• Quality assurance: creation and maintenance of the quality system
• Training: development, preparation, and maintenance of programs

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 Cost of Quality

Appraisal Costs
Appraisal costs are associated with measuring and monitoring activities
related to quality. These costs are associated with the suppliers’ and
customers’ evaluation of purchased materials, processes, products, and
services to ensure that they conform to specifications

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 Cost of Quality

Appraisal Costs include:

• Verification: checking of incoming material, process setup, and
products against agreed specifications
• Quality audits: confirmation that the quality system is
functioning correctly
• Supplier rating: assessment and approval of suppliers of
products and services

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 Cost of Quality

Internal Failure Costs

Internal failure costs are incurred to remedy defects discovered before
the product or service is delivered to the customer. These costs occur
when the results of work fail to reach design quality standards and are
detected before they are transferred to the customer.

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 Cost of Quality

Internal Failure Costs include:

• Waste: performance of unnecessary work or holding of stock as a
result of errors, poor organization, or communication
• Scrap: defective product or material that cannot be repaired,
used, or sold
• Rework or rectification: correction of defective material or errors
• Failure analysis: activity required to establish the causes of
internal product or service failure

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 Cost of Quality

External Failure Costs

External failure costs are incurred to remedy defects discovered
by customers. These costs occur when products or services that
fail to reach design quality standards are not detected until
after transfer to the customer

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 Cost of Quality

External Failure Costs include:

• Repairs and servicing - of both returned products and those in the field
• Warranty claims - failed products that are replaced or services that are
re-performed under a guarantee
• Complaints - all work and costs associated with handling and servicing
customers’ complaints
• Returns - handling and investigation of rejected or recalled products,
including transport costs

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 Cost of Quality

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Topic 2 Quality Management

╸ Quality Gurus
╸ Growth of Quality Management Approaches
╸ Principles of Quality Management
╸ Quality Management Implementation

37
 Leaders in the Quality Revolution

• W. Edwards Deming
• Joseph M. Juran
• Philip B. Crosby
• Armand V. Feigenbaum
• Kaoru Ishikawa

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Quality Management

Quality management is a management function

that determines quality policy, objectives, and
responsibilities. This is accomplished through
quality planning, quality assurance (QA), quality
control (QC), and quality improvement within
the system.

39
 Product Quality Inspection

Product Quality Inspection are activities such as measuring,

examining, testing or gauging one or more characteristics of a
product or service, and comparing the results with specified
requirements in order to establish whether conformity is
achieved for each characteristic

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 Quality Control

Quality Control are the operational techniques and

activities that are used to satisfy quality requirements

 Focus on fullfilling quality requirements

 Aim to check to detect errors and prevention of errors

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 Quality Assurance

Quality Assurrance is the assembly of all planned and

systematic actions necessary to provide adequate confidence
that a product, process, or service will satisfy given quality
requirements

 Focus on providing confidence that quality requirements

will be fulfilled

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 Total Quality Control

Total Quality Control (TQC) is about application

of the quality management principles to the
business processes from the designing stage to
delivery of goods to the end users to increase
productivity of the organization and decrease
costs of poor quality as well as optimize the
structure of quality costs.

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 Total Quality Management (TQM)

TQM is a management philosophy

embracing all activities through which
the needs and expectations of the
customer and the community and the
objectives of the organization are
satisfied in the most efficient and cost
effective way by maximizing the
potential of all employees in a
continuing drive for improvement

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Quality Management • 45
 Common Errors / Lessons Learned

ᵜ Taking a narrow, dogmatic approach

ᵜ High quality requires high costs
ᵜ Senior management delegation and poor leadership
ᵜ Quality is achieved by inspection
ᵜ Quality is unable to be measured

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 Principles of Total Quality Management

1. Customer focus
2. Leadership
3. Engagement of people
4. Process approach
5. Continual improvement
6. Evidence-based decision making
7. Relationship management

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 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

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 1. Customer Focus
• Researching and understanding customer needs and
expectations
• Ensuring that objectives of the organization are linked to
customer needs and expectations
• Measuring customer satisfaction and acting on the results
• Ensuring a balanced approach between satisfying customers
and other interested parties
• ………

Quality Management • 49
 Understanding Customers

 Consumers - those people who ultimately purchase and use a

company’s products.
 Internal customers - the recipient of another’s output (which could
be a product, service or information)
 External customers - those who fall between the organization and
the consumer, but are not part of the organization.

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 Understanding Customers

The natural customer-supplier linkages among individuals,

departments, and functions build up the “chain of customers”
throughout an organization that connect every individual and
function to the external customers and consumers, thus
characterizing the organization’s value chain.

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 Understanding Customers
Customer Segmentation:
 Demographics
 Geography
 Volumes
 “Vital few” and “useful many”
 Profit potential

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 Communicating with Customers

Voice of customers (VOC)

• …customer requirements, as expressed in the customer’s own terms
• Organizations use a variety of methods, or “listening posts,” to collect
information about customer needs and expectations, their
importance, and customer satisfaction with the company’s
performance on these measures.

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 Communicating with Customers

Customer Listening Posts

• Comment cards and formal surveys
• Focus groups
• Direct customer contact
• Field intelligence
• Complaints
• Internet and social media monitoring

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 Satisfying Customers

To meet or exceed customer expectations, organizations must fully

understand all product and service attributes that contribute to customer
value and lead to satisfaction and loyalty.
• Meeting specifications, reducing defects and errors, and resolving
complaints.
• Designing new products that truly delight the customer
• Responding rapidly to changing consumer and market demands
• Developing new ways of enhancing customer relationships

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 Customer Engagement

.. customers’ investment in or commitment to a brand and product

offerings.
Characteristics:
 Customer retention and loyalty,
 Customers’ willingness to make an effort to do business with the
organization, and
 Customers’ willingness to actively advocate for and recommend the
brand and product offerings.

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 Customer Retention
To retain customers over the long term,
organizations must turn them into partners and
proactively seek their input rather than waiting for
and reacting to feedback provided after a problem
has occurred.
 Be Proactive - Get Out in Front of Customer
Complaints
 Collect Both Registered and Unregistered
Complaints

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 Complaint Resolution

• Acknowledge that a customer had a problem (“We’re sorry you had a

problem”)
• Express empathy for the inconvenience that the customer encountered;
willingly accepting the complaint (“Thanks for letting us know about it”)
• Describe corrective action concisely and clearly (“Here’s what we’re
going to do about it”)
• Appeal to the customer for continued loyalty (“We’d appreciate you
giving us another chance”).

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 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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 2. Leadership
• Considering the needs of all interested parties as a whole.
• Establishing a clear vision of the organization’s future.
• Setting challenging goals and targets.
• Creating and sustaining shared values, fairness and ethical role
models at all levels of the organization.
• Providing people with the required resources, training Inspiring,
encouraging, and recognizing people’s contributions
• ………

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 Leadership

…the ability to positively influence people and systems

under one’s authority to have a meaningful impact and
achieve important results…

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 Leadership in Quality Management
Foster a sustainable organization by creating: (1) an environment for
organizational performance improvement, the accomplishment of the
organization’s mission and strategic objectives, innovation, competitive or
role-model performance leadership, and organizational agility; (2) an
environment for organizational and workforce learning; (3) a culture that
fosters customer engagement; and developing and enhancing leadership
skills and developing future organizational leaders.

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3. Engagement 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

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 Employee Involvement

Any activity by which employees participate in work-related

decisions and improvement activities, with the objectives of
tapping the creative energies of all employees and improving
their motivation.

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 3. Engagement of People
• People understanding the importance of their contribution and role
in the organization.
• People identifying constraints to their performance.
• People actively seeking opportunities to enhance their competence,
knowledge, and experience.
• People freely sharing knowledge and experience.
• People openly discussing problems and issues
• ………

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 4. Process Approach
A desired result is achieved more efficiently when activities and
related resources are managed as a process

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 4. Process Approach
• Systematically defining the activities necessary to obtain a
desired result.
• Establishing clear responsibility and accountability for
managing key activities.
• Analyzing and measuring of the capability of key activities.
• Focusing on the factors such as resources, methods, and
materials that will improve key activities of the organization.
• ………

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 5. Evidence-based Decision Making

Effective decisions are based

on the analysis of data and
information

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 5. Evidence-based Decision Making

• Ensuring that data and information are sufficiently

accurate and reliable.
• Making data accessible to those who need it.
• Analyzing data and information using valid methods.
• Making decisions and taking action based on factual
analysis, balanced with experience and intuition.

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 6. Continual Improvement
Continual improvement of the organization’s overall
performance should be a permanent objective of
the organization

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 6. Continual Improvement
• Employing a consistent organization-wide approach to continual
improvement of the organization’s performance.
• Providing people with training in the methods and tools of
continual improvement.
• Making continual improvement of products, processes, and
systems an objective for every individual in the organization.
• Establishing goals to guide, and measures to track, continual
improvement.
• Recognizing and acknowledging improvements.

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 7. Relationship Management

An organization and its

suppliers are interdependent
and a mutually beneficial
relationship enhances the
ability of both to create value

Quality Management • 72
 7. Relationship Management
• Establishing relationships that balance short-term gains with
long-term considerations.
• Pooling of expertise and resources with partners.
• Identifying and selecting key suppliers.
• Clear and open communication.
• Sharing information and future plans.
• Establishing joint development and improvement activities.
• ………

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Topic 3
Quality Assessment and
Quality Management Techniques

╸ Quality Assessment Methods

╸ Quality Management Techniques
╶ Process Focus
╶ Statistical Process Control (SPC)
╶ Five-S

74
Quality Assessment Methods

- Laboratory method
- Recording method
- Calculation method
- Sensory method
- Sociological method
- Expert method

75
 Coefficient of Quality Level (Kq)

The coefficient of quality level is the

relative characteristic of the entity's quality
compared to the standard quality
Ka ∑Civi
Kq = =
K0a ∑C0ivi

Standard quality: Designed standards,

requirements, customer needs and demands…
76
Shadow Cost of Production (SCP)

Shadow cost of production = Cost of

non-conformance:
SCP = (1 – Kq) x 100%

77
“ Quality Management Techniques

╸ Process Focus
╸ Statistical Process Control (SPC)
╸ Five-S Program

- 78 -
 Process Management
 A process is a sequence of linked activities that is intended to
achieve some result.
 Processes involve combinations of people, machines, tools,
techniques, materials, and improvements in a defined series of
steps or actions.
 Examples:
o machining
o mixing
o assembly
o filling orders,
o approving loans

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 Process Management

Key Process Management Principles

• Identify vital work processes that relate to core competencies and
deliver customer value, profitability, organizational success, and
sustainability.
• Determine key work process requirements, incorporating input from
customers, suppliers, partners, and collaborators.
• Design and innovate work processes to meet all requirements,
incorporating new technology, organizational knowledge, cycle time,
productivity, cost control, and other efficiency and effectiveness factors.

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 Process Management

Key Process Management Principles

• Seek ways to prevent defects, service errors, and rework and minimize
costs associated with inspections, tests, and process or performance
audits.
• Implement work processes and control their day-to-day operation to
ensure that they meet design requirements, using appropriate
performance measures along with customer, supplier, partner, and
collaborator input as needed.

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 Process Management
Key Process Management Principles
• Improve work processes to achieve better performance, reduce
variability, improve products and services, and keep processes
current with business needs and directions, and share
improvements with other organizational units and processes to
drive organizational learning and innovation.
• Incorporate effective process management practices in the
overall supply chain.

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 Process Management

…involves planning and administering the activities necessary to achieve

a high level of performance in key business processes, and identifying
opportunities for improving quality and operational performance, and
ultimately, customer satisfaction.

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 Deming’s View of a Production System

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 Statistical Process Control - SPC

• Statistics is a science concerned with “the collection, organization,

analysis, interpretation, and presentation of data.”
• Statistics is essential for quality and for implementing a continuous
improvement philosophy.
• Statistical methods help managers make sense of data and gaain insight
about the nature of variation in the processes they manage

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 Statistical Process Control - SPC
Statistical Process Control - SPC – is the application of Statistics for the
collection, organization, analysis, interpretation, and presentation of data
related to organization’s working processes that can be used to solve
problems, enhance decision making, keep track of work being done, and
even predict future performance and problems.

Quality Management • 86
 Statistical Process Control - SPC

The Basic Seven Tools of SPC

1. Check Sheet
2. Flowchart / Process Map
3. Pareto Chart
4. Cause-and-Effect Diagram
5. Control Chart
6. Histogram
7. Scatter Diagram

Quality Management • 87
 Check Sheet

• The check sheet is a tool that facilitates collection of relevant data,

displaying it in a visual form easily understood by the brain. Check
sheets make it easy to collect data for specific purposes and to present it
in a way that automatically converts it into useful information.

Quality Management • 88
 Flowcharts / Process Map

A Process Map (flowchart)

describes the specific steps
in a process

Quality Management • 89
Quality Management • 90
 Developing Flow Chart/Process Map

1. Begin with the process output and ask, “What is the last essential
subprocess that produces the output of the process?”
2. For that subprocess, ask, “What input does it need to produce the
process output?” For each input, test its value to ensure that it is
required.
3. For each input, identify its source. In many cases, the input will be the
output of the previous subprocess. In some cases, the input may come
from external suppliers.
4. Continue backward, one subprocess at a time, until each input comes
from an external supplier

Quality Management • 91
 Analyzing Process Map

• Are the steps in the process arranged in logical sequence?

• Do all steps add value? Can some steps be eliminated and should others
be added in order to improve quality or operational performance? Can
some be combined? Should some be reordered?
• Are capacities of each step in balance; that is, do bottlenecks exist for
which customers will incur excessive waiting time?
• What skills, equipment, and tools are required at each step of the
process? Should some steps be automated?

Quality Management • 92
 Analyzing Process Map

• At which points in the system might errors occur that would result in
customer dissatisfaction, and how might these errors be corrected?
• At which point or points should quality be measured?
• Where interaction with the customer occurs, what procedures and
guidelines should employees follow to present a positive image?

Quality Management • 93
 Cause-and-Effect Diagram

The cause-and-effect diagram was developed by the late Dr. Kaoru

Ishikawa, a noted Japanese quality expert; others have thus called it the
Ishikawa diagram (or fishbone diagram). Its purpose is to help identify and
isolate the causes of problems.

Quality Management • 94
 Cause-and-Effect Diagram
Six major groupings of causes

Quality Management • 95
Cause and
Effect
Diagram

Adapted from: Jochen Wirtz (2018), Winning in Sevice Markets

Series, World Scientific Professional - 96 -
 Pareto Chart

• Pareto charts are useful for separating the important from the trivial.
They are named after Italian economist and sociologist Vilfredo Pareto.
Pareto charts are important because they can help an organization
decide where to focus limited resources.
• The Pareto Principle holds that a few significant causes lead to the
majority of problems.

Quality Management • 97
 Pareto Chart
Steps in developing Pareto chart
Step 1: Determining the methods of data classification and collection
Step 2: Collecting the data
Step 3: Sorting the data from highest number to lowest number
Step 4: Calculating the frequency and accummulated frequency
Step 5: Delineating Pareto chart
Step 6: Determining the most significant causes/defects (based on
80/20 principles)

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 Pareto Chart - Example

Defects Sources Number of defects Percentage of Accumulated

(unit) defects (%) percentage (%)

A Function 1 87 31,1 31,1

B Function 2 75 26,8 57,9
C Function 3 40 14,3 72,2
D Function 4 30 10,7 82,9
E Function 5 25 8,9 91,8
F Function 6 23 8,2 100
Total 280 100

Quality Management • 99
 Pareto Chart - Example

ofT defects
80% 10 0 %
10 0 .0 %
250 9 1.8 %
TAÄT

8 2 .9 %

T TAÄT
80%

defects
200 7 2 .1%
SP KHUYEÁ

60%

%%SPofKHUYEÁ
15 0 5 7 .9 %
Number

3 1.1% 40%
10 0
87
SOÁ

50 75 20%
30 25 23
40
0 0%
A B C D E F
DAÏ NGDefects
KHUYEÁ T TAÄ T

Quality Management • 100

 Quality Circle
The idea of the quality circle
was first introduced by a
number of large Japanese firms
in a systematic attempt to
involve all their employees, at
every level, in their
organisation's drive for quality.

Quality Management • 101

 Quality Circle

A quality circle is a small group of between three and 12 people who do

the same or similar work, voluntarily meeting together regularly for
about one hour per week in paid time, usually under the leadership of
their own supervisor, and trained to identify, analyse and solve some of
the problems in their work, presenting solutions to management and,
where possible, implementing solutions themselves.

Quality Management • 102

 Five-S

• Five-S is considered as essential to continual improvement.

• Five-S is used to eliminate waste and reduce errors, defects, and injuries.
• The five S’s were originally conceived in Japanese, as represented by five
words beginning with the letter “s”; five-S required some “adjustment”
in order to make sense in English

Quality Management • 103

 Five-S

Quality Management • 104

 Five-S
❶ Sort: to sort through items in the workplace to determine
which are useful and which are not.
 The objectives are the elimination of unnecessary items from
the workplace and the elimination of time wasted in
continually having to search through or work around clutter in
order to do the job.

Quality Management • 105

 Five-S

❷ Store: The things remaining, the

useful items, must be stored in such a
manner that they are visible and
immediately available to the workforce.
 The objective is elimination of time
wasted looking for tools, parts, and so
on by having it easily at hand and
visible every time it is needed.

Quality Management • 106

 Five-S
❸ Shine: he work area and everything in it must shine; that
is, it must be kept clean at all times.
 The objective is reduced errors and defects that result from
defective tools and equipment and from contamination.

Quality Management • 107

 Five-S

❹ Standardize: develop the rules and

procedures for the work area,
standardizing on the best practices (the
best known way of doing something).
 The objective is reduced errors and
improved consistency and reliability of
work, while being alert to discovering or
inventing process improvements.

Quality Management • 108

 Five-S
❺ Sustain: establish the discipline necessary to follow the
rules and practices, improve upon them, and thereby
sustain the gains made through five-S
 The objective of Sustain is to keep five-S alive,
functioning, and improving

Quality Management • 109

110
111
Topic 4 Quality Management System
and Customer-focused
Organization
- Quality Management System
- Quality Culture
- Workforce Focus and Workforce Engagement
- Motivation and Leadership
- Customer-focused Organization

112
 Quality Management System
• Quality Management System (QMS) - a mechanism for managing
and continuously improving core processes to "achieve maximum
customer satisfaction at the lowest overall cost to the organization.”
Objectives
• Higher product conformity and less variation.
• Fewer defects, waste, rework, and human error.
• Improved productivity, efficiency, and effectiveness.

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 Quality Management System

Focus on:
 Workforce focus
 High performance work system
 Role of leadership

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 Workforce

• …everyone who is actively involved in accomplishing the work of an

organization. This encompasses paid employees as well as volunteers
and contract employees, and includes team leaders, supervisors, and
managers at all levels.
• Many companies refer to their employees as “associates” or
“partners” to signify the importance that people have in driving
business performance.

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Key Workforce-Focused Practices for Performance Excellence

• Understand the key factors that drive workforce engagement,

satisfaction, and motivation.
• Design and manage work and jobs to promote effective
communication, cooperation, skill sharing, empowerment,
innovation, and the ability to benefit from diverse ideas and
thinking of employees and develop an organizational culture
conducive to high performance and motivation.

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Key Workforce-Focused Practices for Performance Excellence

• Make appropriate investments in development and learning, both for

the workforce and the organization’s leaders.
• Create an environment that ensures and improves workplace health,
safety, and security, and supports the workforce via policies, services,
and benefits.
• Develop a performance management system based on compensation,
recognition, reward, and incentives that supports high performance
work and workforce engagement.

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Key Workforce-Focused Practices for Performance Excellence

• Assess workforce engagement and satisfaction and use results for

improvement.
• Assess workforce capability and capacity needs and use the results
to capitalize on core competencies, address strategic challenges,
recruit and retain skilled and competent people, and accomplish the
work of the organization.
• Manage career progression for the entire workforce and succession
planning for management and leadership positions.

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 High Performance Work Culture

o Performance - the extent to which an individual contributes to

achieving the goals and objectives of an organization.
o High-performance work - work approaches used to systematically
pursue ever-higher levels of overall organizational and human
performance.

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 High Performance Work Culture

• Characterized by:
ᵜ flexibility
ᵜ innovation
ᵜ knowledge and skill sharing
ᵜ alignment with organizational directions,
customer focus, and rapid response to
changing business needs and marketplace
requirements

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 High Performance Work Culture

“Conditions of Collaboration”
ᵜ Respect
ᵜ Aligned values
ᵜ Shared purpose
ᵜ Communication
ᵜ Trust

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 Quality Culture

“A quality culture is an organizational

value system that results in an
environment that is conducive to the
establishment and continual
improvement of quality. It consists of
values, traditions, procedures, and
expectations that promote quality”

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 Quality Culture
Maintaining a quality culture:
ᵜ Maintain an awareness of quality as a key cultural issue.
ᵜ Make sure that there is plenty of evidence of the
management’s leadership
ᵜ Empower employees and encourage self-development and self-
initiative among them
ᵜ Keep employees involved
ᵜ Recognize and reward the behaviors that tend to nurture and
maintain the quality culture

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 Workforce Engagement
• … the extent of workforce commitment, both emotional and
intellectual, to accomplishing the work, mission, and vision of the
organization. Engaged workers
‐ find personal meaning and motivation in their work,
‐ have a strong emotional bond to their organization, are actively
involved in and committed to their work,
‐ feel that their jobs are important, know that their opinions and ideas
have value, and
‐ often go beyond their immediate job responsibilities for the good of
the organization.

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 Top Drivers of Workforce Engagement

1. Commitment to organizational values.

2. Knowing that customers are satisfied with products and services.
3. Belief that opinions count.
4. Clearly understanding work expectations.
5. Understanding of how personal contributions help meet customer needs.
6. Being recognized and rewarded fairly.
7. Knowing that senior leaders value the workforce.
8. Being treated equally with respect.
9. Being able to concentrate on the job and work processes.
10. Alignment of personal work objectives to work plans.

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 Sustaining High-Performance Work Systems

Regular assessment of
 workforce capability and capacity needs;
 hiring, training and retention of employees;
 career progression and succession planning.

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 Workforce Capability and Capacity

Workforce capability refers to an organization’s ability to accomplish its

work processes through the knowledge, skills, abilities, and competencies
of its people.
Workforce capacity refers to an organization’s ability to ensure sufficient
staffing levels to accomplish its work processes and successfully deliver
products and services to customers, including the ability to meet seasonal
or varying demand levels.

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 Leadership for Quality
Leadership for quality is about applying the principles of
leadership in continually improving performance of people,
processes, and products wil, in turn, improve the following:
• Quality
• Value
• Productivity
• Service
• Market share
• Business expansion …

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 Leadership for Quality

The key elements of leadership for quality are: customer

focus, obsession with quality, recognition of the structure
of work, freedom through control, unity of purpose,
looking for faults in the systems, teamwork, continuing
education and training, and emphasis on best
practices/peak performance.

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 Leadership for Quality

The Juran Trilogy

 Quality planning
 Quality control
 Quality improvement

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 Leadership for Quality

Quality planning
Quality planning consists of the folowing steps: identify customers,
identify the needs of customers, develop products based on customer
needs, develop work methods and processes that can produce products
that meet or exceed customer expectations, and convert the results of
planning into action.

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 Leadership for Quality

Quality control
Quality control consists of the following steps: evaluate actual
performance, compare actual performance with performance goals, and
take immediate steps to resolve differences between planned
performance and actual performance.

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 Leadership for Quality

Quality improvement
Continual improvement involves: establish an infrastructure for
accomplishing continual quality improvement; identify specific processes
or methods in need of improvement; set up teams responsible for specific
improvement projects; and provide improvement teams with the
resources and training needed to diagnose problems and identify causes,
decide on a remedy, and standardize the improvements once they have
been made.

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 Leadership Styles for Quality

Transformational Leadership
Transformational leadership theory suggests that leaders adopt behaviors
such as: idealized influence, individualized consideration, inspirational
motivation, and intellectual stimulation, and have a long-term perspective,
focus on customers, promote a shared vision and values, work to stimulate
their organizations intellectually, invest in training, take some risks, and
treat employees as individuals.
 Transformational leadership is more aligned with organizational change
required by total quality and performance excellence models.

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 Leadership styles for Quality

In another approach, common leadership styles include the

following: democratic, participative, goal-oriented, and
situational. The appropriate leadership style in a total quality
setting is participative taken to a higher level.

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 Leadership styles for Quality

Servant leadership and stewardship go beyond employee empowerment

to employee autonomy and seek to create an environment in which
employees perform out of the spirit of ownership and commitment.

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 Customer Loyalty

The best way to generate customer loyalty is to consistently provide

customers with superior value. Superior value is a combination of superior
quality, superior cost, and superior service.
Customer loyalty model:
(1) Business performance
(2) Global perceptions
(3) Loyalty behaviors
(4) Financial outcomes

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 Customer Loyalty

(1) Business performance

 Product quality (e.g., attributes, features, usability, compatibility,
reliability)
 Service quality (e.g., sales, after-purchase service, billing)
 Relationship quality (e.g., communication, availability, responsiveness)
 Image strength (e.g., when other performance indicators are equal, the
organization’s image can be an important consideration)
 Price perceptions (e.g., initial purchase price, cost of maintenance and
repairs, cost of upgrades)

Quality Management • 138

 Customer Loyalty

(2) Global perceptions

 Based on its evaluation of an organization, a customer will form
global perceptions about that organization.
 If the perceptions formed by customers in these and other pertinent
areas are positive, they can lead to loyalty behaviors on the part of
those customers.

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 Customer Loyalty

(3) Loyalty behaviors

• Overall satisfaction
• Likelihood of a first-time purchaser to repurchase
• Likelihood to recommend
• Likelihood to continue purchasing the same products
• Likelihood to purchase different products
• Likelihood to increase frequency of purchasing
• Likelihood to switch to a different provider

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 Customer Loyalty
(4) Financial outcomes
1. Market share - High customer loyalty leads to a larger
market share, which, in turn, leads to better financial
outcomes
2. Reduced costs - Repeat customers cost less to deal with than
new customers, which means that customer loyalty
decreases the cost of doing business
3. Employee attitudes - Positive employee attitudes promote
positive customer relations
4. Profit - Increased market share can result in increased
profits, provided the cost of doing business is held level or
even decreased by customer loyalty
5. Shareholder value - Customer loyalty can result in higher
profits, which, in turn, are a key driver of shareholder value

Quality Management • 141

 Building a Customer-Focused Organization

ᵜ The key to establishing a customer focus is to put employees in touch

with customers so that customer needs are known and understood.
ᵜ Customer satisfaction or dissatisfaction takes place during moments of
truth—every interaction between a customer and the organization

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 Building a Customer-Focused Organization

• Identify the most important customers, and segment the customer base
to better meet differing needs
• Understand both near-term and longer-term customer needs and
expectations (the “voice of the customer”) to obtain actionable
information about products and customer support
• Understand the linkages between the voice of the customer and design,
production, and delivery processes

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 Building a Customer-Focused Organization

• Create an organizational culture and support framework that allows

customers to easily contact
• Manage customer relationships that build loyalty, enhance satisfaction
and engagement, and lead to the acquisition of new customers
• Measure customer satisfaction, engagement, and dissatisfaction to
evaluate and improve organizational processes.

Quality Management • 144

Topic 5 ISO 9000
Quality Management System

╸ ISO 9000 Quality Management System (QMS)

╸ Introduction of ISO 9000
╸ The requirements of ISO 9001 QMS
╸ The Relationship between ISO 9000 and TQM

145
 ISO 9000 Quality Management System

The ISO 9000 is a family of standards and guidelines related to the quality
management system (QMS). It sets the requirements for the assurance of
quality and for management’s involvement.

• The overall aim of ISO 9000 is to make registered organizations more

competitive.
• ISO 9000 is applied to organizations on a volunteer basis. It tells the
organization what they must do to conform but not how to do it.

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 ISO 9000 Quality Management System

• The quality management system must include the following: a

quality policy, the quality manual, quality objectives, and forms and
records.
• In order for an organization to become an ISO 9000 registrar, it must
be approved by an accrediting body such as the International
Accreditation Forum (IAF).

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 ISO 9000 Quality Management System

• A quality policy. This statement describes how the organization

approaches quality.
• The quality manual. This must address each clause of the ISO 9001
standard. It will also typically include an organization chart, or some
such device, illustrating management responsibility for operating the
quality system. Quality procedures may be part of this manual, or they
may be referenced.

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 ISO 9000 Quality Management System

• Quality objectives. These are the goals related to quality and must be in
harmony with the quality policy. Quality objectives are assigned to the
relevant organizational functions and levels and are tracked by top
management.
• Quality procedures. These describe step by step what the company
does to meet the quality policy. As a minimum, there will be a
procedure for each of the ISO 9001 clauses outlining requirements.
There may also be procedures for any processes that can impact quality.
• Forms, records, and so on. These provide proof of activities for the firm
and for the auditors.

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 ISO 9000 - Objectives

1. Achieve, maintain, and seek to continuously improve product quality

(including services) in relationship to requirements.
2. Improve the quality of operations to continually meet customers’ and
stakeholders’ stated and implied needs.
3. Provide confidence to internal management and other employees that
quality requirements are being fulfilled and that improvement is taking
place.
4. Provide confidence to customers and other stakeholders that quality
requirements are being achieved in the delivered product.
5. Provide confidence that quality system requirements are fulfilled.

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 Benefits of ISO 9000

• It provides discipline. The ISO 9001 requirement for audits forces an

organization to review its quality system on a routine basis.
• It contains the basics of a good quality system. These include
understanding customer requirements, ensuring the ability to meet
them, ensuring people resources capable of doing the work that affects
quality, ensuring physical resources and support services needed to
meet product requirements, and ensuring that problems are identified
and corrected.
• It offers a marketing program. ISO certified organizations can use their
status to differentiate themselves in the eyes of customers.

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 ISO 9000:2000 Documents

• ISO 9000:2005—Fundamentals and vocabulary: This document

provides fundamental background information and establishes
definitions of key terms used in the standards.
• ISO 9001:2008—Requirements: This is the core document that provides
the specific requirements for a quality management system to help
organizations consistently provide products that meet customer and
other regulatory requirements.
• ISO 9004:2009—Guidelines for Performance Improvements: This
document provides guidelines to assist organizations in improving and
sustaining their quality management systems.

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 ISO 9000 Quality Management System

• The various updates to ISO 9000 are ISO

9000-1987, ISO 9000-1994, ISO 9001-2000,
ISO 9001-2008, and ISO 9001-2015.
• The key issue in the 2015 update is “risk.”

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HỆ THỐNG QLCL THEO TIÊU CHUẨN ISO 9000

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 The Relationship between ISO 9000 and TQM

• ISO 9000 and TQM are not completely interchangeable: ISO 9000 is
compatible with, and can be a subset of TQM; ISO 9000 is frequently
implemented in a non-TQM environment; ISO 9000 can improve
operations in a traditional environment; ISO 9000 may be redundant in
a mature TQM environment; and ISO 9000 and TQM are not in
competition.

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 The Relationship between ISO 9000 and TQM

• The origins of ISO 9000 and total quality management are vastly
different. ISO 9000 was developed in response to the need to
harmonize dozens of national and international standards relating to
quality. Total quality got its start in Japan around 1950 as a way to help
that nation compete in the international marketplace.

Quality Management • 156

 The Relationship between ISO 9000 and TQM
• The new aim of ISO 9000 is to enable organizations to better serve
their customers and to be more competitive through adherence to
the standard’s eight quality management principles.
• Appropriate motivations for implementing ISO 9000 are as follows:
 To improve operations
 To improve or create a quality management system
 To improve the consistency of quality
 To improve customer satisfaction
 To improve competitive posture
 To conform to the requirements of customers

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 The Relationship between ISO 9000 and TQM
• The appropriate motivation for implementing TQM is a
desire to continually improve all aspects of an
organization.
• ISO 9000 and TQM are compatible in that ISO 9000 can be
a complementary subset of TQM. ISO 9000 can give an
organization a head start in implementing TQM.

Quality Management • 158

 The contents of ISO 9001:2015
Clause 1: Scope
Clause 2: Normative Reference
Clause 3: Terms and Definitions
Clause 4: Context of the organization
Clause 5: Leadership
Clause 6: Planning
Clause 7: Support
Clause 8: Operation
Clause 9: Performance Evaluation
Clause 10: Improvement
Quality Management • 159
“
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