|
QUALITY IN PROJECT MANAGEMENT
BROAD CONTENTS
What is Quality?
Quality from Different Perspective
Quality Dimensions
Competitive Advantage
Quality Evolution and Quality Stages in Japan
TQM (Total Quality Management) and Its Philosophy
34.1 WHAT IS QUALITY?
Quality is by no menus a new concept in modern business. In
October 1887, William Cooper
Procter, grandson of the founder of Procter and Gamble, told his
employees, "The first job we
have is to him out quality merchandise that consumers will buy
and keep on buying. If we
produce it efficiently and economically, we will earn a profit,
in which you will share." Procter's
statement addresses three issues that are critical to managers
of manufacturing and service
organizations: productivity, cost, and quality. Productivity
(the measure of efficiency defined as
the amount of output achieved per unit of input), the cost of
operations, and the quality of the
goods and services that create customer satisfaction all
contribute to profitability. Of these three
determinants of profitability, the most significant factor in
determining the long-run
success or failure of any organization is quality. High quality
goods and services can
provide an organization wi th a competitive edge. High quality
reduces costs due to
returns, rework, and scrap. It increases productivity, profits,
and other measures of
success. Most importantly, high quality generates satisfied
customers, who reward the
organization with continued patronage and word-of-mouth
advertising.
Quality can be a confusing concept, partly because people view
quality in relation to
differing criteria based on their individual roles in the
production-marketing value
chain. In addition, the meaning of quality continues to evolve
as the quality profession
grows and matures. Neither consultants nor business
professionals agree on a universal
definition. A study that asked managers of 86 firms in the
eastern United States to define
quality produced several dozen different responses, including
the following:
- Perfection
- Consistency
- Eliminating waste
- Speed of delivery
- Compliance w i th policies and procedures
- Providing a good, usable product
- Doing it right the first time
- Delighting or pleasing customers
- Total customer service and satisfaction
Thus, it is important to understand the various perspectives
from which quality is
viewed in order to ful ly appreciate the role it plays in the
many pails of a business
organization.
The concept of quality is subjective and difficult to define.
While certain aspects of quality can
be identified, ultimately, the “judgement of quality” rests with
the customer.
Judgmental
Perspective:
One common notion of quality, used by consumers, is that it is
synonymous with
superiority or excellence. In 1931 Walter Shewhart first defined
quality as the goodness
of a product. This view is referred to as the
transcended (to
rise above or extend notably
beyond ordinary limits),
definition of quality. In
this sense, quality is "both absolute
and universally recognizable, a mark of uncompromising standards
and high
achievement." As such, it cannot he defined precisely—you just
know it when you see
it. It is often loosely related to a comparison of features and
characteristics of products
and promulgated by marketing efforts aimed at developing quality
as an image
variable in the minds of consumers. Common examples of products
attributed with
this image are Kolex watches and BMW and Lexus automobiles.
Product-Based
Perspective:
Another definition of quality is that it is a function of a
specific, measurable variable and
that differences in qua l i ty reflect differences in quant i ty
of product attribute, such as
in the number of stitches per inch on a shirt or in the number
of cylinders in an engine.
This assessment implies that higher levels or amounts of product
characteristics are
equivalent to higher quality, As a result, quality is often
mistakenly assumed to be
related to price: the higher the price, the higher the quality.
Just consider the case of a
Florida man who purchased a $262,000 Lamborghini only to find a
leaky roof, a battery
that quit without notice, a sunroof that detached when the car
hit a bump, and doors that
jammed " However, a product refer to either a manufactured good
or a service—need not
be expensive to be considered a quality product by consumers.
Also, as with the notion of
excellence, the assessment of product attributes may vary
considerably among
individuals.
User-Based
Perspective:
A third definition of quality is based on the presumption that
quality is determined by
what a customer wants. Individuals have different wants and
needs and, hence, different
quality standards, which leads to a user-based definition:
quality is defined as fitness for
intended use,
or how well the product performs its
intended function. Both a Cadillac
sedan and a Jeep Cherokee arc fit for use, for example, but they
serve different needs and
different groups of customers. If you want a highway-touring
vehicle with luxury
amenities, then a Cadillac may better satisfy your needs. If you
want a vehicle for
camping, fishing, or skiing trips, a Jeep might be viewed as
having better quality.
250
Value-Based
Perspective:
A fourth approach to defining quality is based on
value;
that is, the relationship of
usefulness or satisfaction to price. From this perspective, a
quality product is one that is
as useful as competing products and is sold at a lower price, or
one that offers greater
usefulness or satisfaction at a comparable price. Thus, one
might purchase a generic
product, rather than a brand name one, if it performs as well as
the brand-name
product at a lower price. An example of this perspective in
practice is evident in a
comparison of the U.S. and Japanese automobile markets. A
Chrysler marketing
executive noted "one of the main reasons that the loading
Japanese brands—Toyota
and Honda—don't offer the huge incentives of the big Three
(General Motors, Ford,
and Chrysler) is that they have a much better reputation for
long-term durability." In
essence, incentives and rebates are payments to customers lo
compensate for lower
quality.
Manufacturing-Based Perspective:
A fifth view of quality is manufacturing-based and defines
quality as the desirable
outcome of engineering and manufacturing practice, or conformance to specifications.
Specifications are targets and tolerances determined by
designers of products and
services. Targets are the ideal values for which production is
to strive; tolerances are
specified because designer’s recognize that it is impossible to
meet targets all of the
time in manufacturing. For example, a part dimension might be
specified as "0.236 i
0.003 cm." These measurements would mean that the target, or
ideal value, is 0.236
centimeters, and that the allowable variation is (MHB
centimeters from the target (a
tolerance of 0.006 cm.). Thus, any dimension in the range 0.233
to 0.239 centimeters is
deemed acceptable and is said to conform lo specifications.
Likewise, in services,
"on-time arrival" for an airplane might be specified as w i
thin'15 minutes of the
scheduled arrival time. The target is the scheduled time, and
the tolerance is specified
to be 15 minutes.
Integrating
Perspectives on Quality:
Although product quality should be important to all individuals
throughout the value
chain, how quality is viewed may depend on one's position in the
value chain, that is,
whether one is the designer, manufacturer or service provider,
distributor, or
customer. The customer is the driving force for the production
of goods and services,
and customers generally view quality from either the
transcendent or the productbased
perspective. The goods and services produced should meet
customers' needs;
indeed, business organizations’ existences depend upon meeting
customer needs. It is
the rule of the marketing function to determine these needs. A
product that meets
customer needs can rightly be described as a quality product.
Hence, the user-based
definition of quality is meaningful to people who work in
marketing.
The manufacturer must translate customer requirements into
detailed product and
process specifications. Making this translation is the role of
research and development,
product design, and engineering. Product specifications might
address such
attributes as size, form, finish, taste, dimensions, tolerances,
materials, operational
characteristics, and safety features. Process specifications
indicate the types of
equipment, tools, and facilities to be used in production.
Product designers must
balance performance and cost to meet marketing objectives; thus,
the value-based
definition of quality is most useful at this stage.
Customer-Driven Quality: I
The American National Standards Institute (ANSI) and the
American Society for
Quality (ASQ) standardized official definitions of quality
terminology in 1978. These
groups defined quality as
the totality of features and
characteristics of a product or
service that bears on its ability to satisfy given needs.
This definition draws heavily
on the product- and user-based approaches and is driven by the
need to contribute
value to customers and thus to influence satisfaction and
preference. By the end of the
1980s, many companies had begun using a simpler, yet powerful,
customer-driven
definition of quality that remains popular today:
“Quality is meeting or exceeding customer expectations”
34.3 QUALITY
DIMENSIONS:
Following are the “principal quality dimensions”:
• Performance
–
a product’s primary operating
characteristics. For example: A car’s
acceleration, braking distance, steering and handling.
• Features – the
“bells and whistles” of a product. A car may have power options, a tape or
CD (compact disk) player, antilock brakes, reclining seats.
• Reliability –
the probability of a product’s surviving over a specified period of time under
stated “conditions of use”. Examples of reliability factors
could be a car’s ability to start on
cold days and frequency of failures.
• Conformance –
the degree to which physical and performance characteristics of a product
match with the pre-established standards. For example, car’s
fit/finish, freedom from noises
can reflect this.
• Durability –
the amount of use one gets from a product before it physically deteriorates or
until replacement is preferable. If we take the example of a car
its corrosion resistance and
long wear of upholstery fabric reflects this.
• Serviceability
– this refers to the speed, courtesy, competence of repair work. Auto owner
access to spare parts also comes under serviceability.
• Aesthetics –
refers to how a product looks, feels, sounds, tastes, or smells. Car’s color,
instrument panel design and “feel of road” make it aesthetically
pleasing.
• Perceived
quality – the “subjective assessment of quality” resulting from image. For
example: Advertising, or brand names. car, shaped by magazine
reviews-manufacturers’
brochures.
• Affordability,
Variety, simplicity etc. are also the principal quality dimensions.
34.4 COMPETITIVE ADVANTAGE:
When a firm sustains profits that exceed the average for its
industry, the firm is said to possess a
competitive advantage
over its rivals. The goal of much of
business strategy is to achieve a
sustainable competitive advantage.
Michael Porter identified two basic types of competitive
advantage:
• Cost advantage
• Differentiation
advantage
A competitive advantage exists when the firm is able to deliver
the same benefits as competitors
but at a lower cost (cost advantage), or deliver benefits that
exceed those of competing products
(differentiation advantage). Thus, a competitive advantage
enables the firm to create superior
value for its customers and superior profits for itself.
Cost and differentiation advantages are known as
positional advantages
since they describe the
firm's position in the industry as a leader in either cost or
differentiation.
A resource-based
view emphasizes that a firm
utilizes its resources and capabilities to create a
competitive advantage that ultimately results in superior value
creation.
252
34.5 QUALITY
EVOLUTION AND QUALITY STAGES IN JAPAN:
34.6 TOTAL
QUALITY MANAGEMENT (TQM) AND ITS PHILOSOPHY:
34.6.1 Quality as a Management Framework:
In the 1970s a General Electric (GE) task force studied consumer
perceptions of
the quality of various GE product lines. Lines with relatively
poor reputations
for quality were found to deemphasize customer's viewpoint,
regard quality as
synonymous with tolerance and conformance to specifications, tic
quality
objectives to manufacturing flow, express quality objectives as
the number of
defects per unit, and use formal quality control systems only in
manufacturing. In
contrast, product lines that received customer praise were found
to emphasize
satisfying customer expectations, determine customer needs
through market
research, use customer-based quality performance measures, and
have formalized
quality control systems in place for all business functions, not
just for
manufacturing. The task force concluded that quality must not be
viewed solely
as a technical discipline, but rather as a management
discipline. That is, quality
issues permeate all aspects of business enterprise: design,
marketing,
manufacturing, human resource management, supplier relations,
and financial
management, to name just a few.
As companies came to recognize the broad scope of quality, the
concept of total
quality (TQ) emerged. A definition of total quality was
endorsee! In 1992 by the
chairs and CUOs of nine major U.S. corporations in cooperation
with deans of
business and engineering departments of major universities, and
recognized
consultants:
Total Quality (TQ) is a people-focused management system that
aims at
continual increase in customer satisfaction at continually lower
real cost. TQ
is a total system approach (not a separate area or program) and
an integral
pan of high-level strategy; it works horizontally across
functions and
departments, involves all employees, top to bottom, and extends
backward and
forward to include the supply chain and the customer chain. TQ
stresses
learning and adaptation to continual change as keys to
organizational
success.
253
The foundation of total quality is philosophical: the scientific
method. TQ
includes systems, methods, and tools. The systems permit change,
the
philosophy stays the same. TQ is anchored in values that stress
the
dignity of the individual and the power of community action.
Procter and Gamble uses a concise definition: Total quality is
the unyielding
and continually improving effort by everyone in an organization
to
understand, meet, and exceed the expectations of customers.
Actually, the concept of TQ has been around for some time. A. V.
Feigenbaum
recognized the importance of a comprehensive approach to quality
in the 1950s
and coined the term Total quality control. Feigenbaum observed
that the
quality of products and services is directly influenced by what
he terms the 9
Ms: markets, money, management, men and women, motivation,
materials,
machines and mechanization, modern information methods, and
mounting
product requirements. Although he developed his ideas from an
engineering
perspective, his concepts apply more broadly to general
management.
The Japanese adopted Feigenbaum’s concept and renamed it
companywide
quality control. Wayne S. Keiker listed five aspects of total
quality control
practiced in Japan:
1. Quality emphasis extends through market analysis, design, and
customer
service rather than only the production stages of making a
product.
2. Quality emphasis is directed toward operations in every
department from
executives to clerical personnel.
3. Quality is the responsibility of live individual and the work
group, not
sonic other group, such as inspection.
4. The two types of quality characteristics as viewed by
customers are those
that satisfy and those that motivate. Only the latter are
strongly related to
repeat sales and a "quality" image.
5. The first customer for a part or piece of information is
usually the next
department in the production process.
The term total
quality management was
developed by the Naval Air Systems
Command to describe its Japanese-style approach to quality
improvement and
became popular with businesses in the United States during the
1980s. As we
noted earlier, TQM has fallen out of favor, and many people
simply use TQ.
34.6.2 Principles of Total Quality:
Whatever the language, total quality is based on three
fundamental
principles:
1. A focus on customers and stakeholders.
2. Participation and teamwork by everyone in the organization.
3. A process focus supported by continuous improvement and
learning.
Despite their obvious simplicity, these principles are quite
different from
traditional management practices. Historically, companies did
little to
understand external customer requirements, much less those of
internal
customers. Managers and specialists controlled and directed
production
systems; workers told what to do and how to do it, and rarely
were asked for
their input. Teamwork was virtually nonexistent. As certain
amount of waste
and error was tolerable and was controlled by postproduction
inspection.
Improvements in quality generally resulted from technological
breakthroughs instead
of a relentless mindset of continuous improvement. With total
quality, an
organization actively seeks to identify customer needs and
expectations, to build
quality into work processes by tapping the knowledge and
experience of its
workforce/ and to continually improve every facet of the
organization.
254
Customer and Stakeholder Focus the customer is the principal
judge of quality. Perceptions
of value and satisfaction are influenced by many factors
throughout the customer's
overall purchase, ownership, and service experiences. To
accomplish this
task, a company's efforts need to extend well beyond merely
meeting specifications,
reducing defects and errors, or resolving complaints. They must
include both
designing new products that truly delight the customer and
responding rapidly to
changing consumer and market demands. A company close to its
customer knows
what the customer wants, how the customer uses its products, and
anticipates needs
that the customer may not even be able to express. It also
continually develops new
ways of enhancing customer relationships. A firm also must
recognize that internal
customers are as important in assuring quality as are external
customers who purchase
the product. Employees who view themselves as both customers of
and
suppliers to other employees understand how their work links to
the final
product. After all, the responsibility of any supplier is to
understand and meet
customer requirements in the most efficient and effective way
possible.
Customer focus extends beyond the consumer and internal customer
relationships,
however. Employees and society represent important stakeholders.
An organization's
success depends on the knowledge, skills, creativity, and
motivation of its
employees and partners. Therefore, a TQ organization must
demonstrate commitment
to employees, provide opportunities for development and growth,
provide
recognition beyond normal compensation systems, share knowledge,
and encourage
risk taking. Viewing society as a stakeholder is an attribute of
a world-class
organization. Bus-mess ethics, public health and safety, the
environment, and
community and professional support are necessary activities that
fall under social
responsibility.
Participation and Teamwork Joseph Juran credited Japanese
managers' full use of the
knowledge and creativity of the entire workforce as one of the
reasons for Japan's
rapid quality achievements. When managers give employees the
tools to make good
decisions and the freedom and encouragement to make
contributions, they virtually
guarantee that better quality products and production processes
will result.
Employees who are allowed to participate—both individually and
in teams—in
decisions that affect their jobs and customer can make
substantial contributions to
quality. His attitude represents a profound shift in the typical
philosophy of senior
management; the traditional view was that the workforce should
be "managed"—or
to put it less formally, the workforce should leave their brains
at the door. Good
intentions alone are not enough to encourage employee
involvement. Management's
task includes formulating the systems and procedures and then
putting them in place
to ensure that participation becomes a part of the culture. |