Quality
Quality is the extent (sigma value of the process) to which a firm’s product or service consistently (again and again) conforms to customer’s requirement and expectations.
Textbook definition – Ability of a product / service to consistently meet or exceed customer expectation (Should be an integral part of product / service).
Quality may be defined as the extent to which a firm’s product or service consistently conforms to customer’s requirements and expectations. To manage quality, it should be specific and measurable – what can’t be measured, can’t be managed.
Product Quality parameters
Performance – Main characteristics of the product / service
Aesthetics – Appearance, feel, smell, taste
Special features – Extra characteristics
Conformance – How well a product or service corresponds to design specifications
Reliability – Consistency of performance
Durability – The useful life of the product or service
Perceived Quality – Indirect evaluation of quality (Example – Reputation)
Serviceability – Handling of complaints / repairs
Service Quality parameters
Convenience – The availability and accessibility of the service
Reliability – The ability to perform a service dependably, consistently and accurately
Responsiveness – The willingness of service providers to help customers in unusual situations and to deal with problems
Time – The speed with which service is delivered
Assurance – The knowledge exhibited by personnel who come into contact with a customer and their ability to convey trust and confidence
Courtesy – The way customers are treated by employees who come into contact with them
Tangibles – The physical appearance of facilities, equipment, personnel and communication materials
COST OF QUALITY
Cost of Quality: Any cost that would not have been expended if quality was perfect (It is not the price of creating a quality product or service). Every time a rework is done, the cost of quality increases.
The price of non-conformance (Philip Crosby) and cost of poor quality (Joseph Juran)
· Cost of Conformance
o Preventive costs (Proactive): The cost of all activities specifically designed to prevent poor quality in products or services. Example- Periodic preventive maintenance of machines, training, product/ process design effort.
§ New product review, quality planning, supplier capability survey, process capability evaluations, quality education and trainings.
o Appraisal costs (Reactive): The costs associated with measuring, evaluating or auditing products or services to assure conformance to quality standards and performance requirements. Example- Policy cost (Inspection), Inspection of raw material, external inspection / audits, debugging.
§ Incoming and source inspection / test of purchased material
§ In-process and final inspection / test
§ Calibration of measuring and test equipments.
· Cost of Non-conformance
o Internal failure cost: Failure costs occurring prior to the delivery or shipment of the product, or the furnishing of a service, to the customer. (Producing defective product, but I detect the product before it goes out of company’s premises).Example- Rework / Repair before dispatch, overtime work, scrapping defective output.
§ Scrap
§ Rework
§ Re-inspection
§ Re-testing
§ Material review
§ Downgrading
o External failure costs: Failure costs occurring after delivery of the product or during or after the furnishing of the service to the customer. (Defective product reaches the customer). Example: Toyota recall, i-phone antenna problem, products falling within warranty, litigation with customer, loss of goodwill.
§ Processing customer complaints
§ Customer returns
§ Warranty claims
§ Product recalls
Critical to Quality factors
· Factors of CTQ
· Metric
· Unit of measurement
· Target Value
· Tolerance (acceptable)
· Definition of defect
CTQ
They are derived from customer needs. Customer delight may be add-on while deriving CTQ parameters. For cost considerations, one may remain focused to customer needs at the initial stage.
They are key measurable characteristics of a product or process whose performance standards or specifications limits must be met in order to satisfy the customer. They align improvement or design efforts with customer requirements.
It represents the product / service characteristics that are defined by the customer (internal / external). They may include the upper or lower specification limits or any other factors related to the product or service.
Definition: They are the spoken needs of the customer…..what customer expects from the product. The customer may express it in plain English, but it is upto the CTQ expert to convert them to measurable terms using tools such as DFMEA (How can product design fail in real world)
| Expense Details | Notes |
| Legal expenses to handle customer complaints / notices | External failure costs |
| Overtime | Internal failure costs |
| Inspection of incoming materials from vendors | Appraisal costs |
| Consultant’s fees for advising on latest quality systems | Prevention costs |
| Product rejections by customers | External failure costs |
| Product inspected out of delivery consignments by quality inspection staff | Appraisal costs |
| TQM and 6-sigma training | Prevention costs |
| Poka Yoke process design development (Mistake proofing device) | Prevention costs |
| In-house laboratory testing of materials, WIP, finished goods | Appraisal costs |
| External agency testing and certification of finished goods | Appraisal costs |
| Transportation of rejected products from customer’s premises | External failure costs |
| Transportation of reworked products back to customers (means customer already received defective product earlier) | External failure costs |
| Rework – materials, labor and overheads – after defects noticed in final product | Internal failure costs |
| Servicing of defective products within warranty period | External failure costs |
| Printing of quality training manuals | Prevention costs |
