Administracion

Chapter 1: Quality Concepts

Profitability is one of the most important factors for any successful business enterprise. High profitability is determined by strong sales and overall low cost in the whole enterprise operation. Healthy sales are to a great extent determined by high quality and reasonable price; as a result, improving quality and reducing cost are among the most important tasks forany business enterprise. Six Sigma is a new wave of enterprise excellence initiative which would effectively improve quality and reduce cost and thus has received much attention in the business world. However, quality is a more intriguing concept than it appears to be. To master quality improvement, it is very important to understand exactly “what is quality.”

1.1 What Is Quality?

“Quality:An inherent or distinguishing characteristic, a degree or grade of excellence.”

(American Heritage Dictionary, 1996)

“Quality: The totality of characteristics of an entity that bear on its ability to satisfy stated and implied needs”

(ISO 8402)

“Quality: Do the right thing, and do things right all the time.”

When the word quality is used, we usually think in terms of an excellentproduct or service that fulfills or exceeds our expectations. These expectations are based on the intended use and the selling price. For example, the performance that a customer expects from a roadside motel is different from that of a five-star hotel because the prices and expected service levels are different. When a product or service surpasses our expectations, we consider that its quality isgood. Thus, quality is related to perception. Mathematically, quality can be quantified as follows:
|(1.1)  |[pic] |
|where Q |= quality |
|P |= performance |
|E |= expectations |

The perceived “performance” is actually “what this product can do for me” in the eyes of customers. The American Society forQuality (ASQ) defines quality as “A subjective term for which each person has his or her own definition. In technical usage, quality can have two meanings: 1. the characteristics of a product or service that bear on its ability to satisfy stated or implied needs. 2. a product or service free of deficiencies.”

By examining the ASQ’s quality definition, we can find that “on its ability to satisfystated or implied needs” means that the product or service should be able to deliver potential customers’ needs; we call it “doing the right things,” and “free of deficiencies” means that the product or service can deliver customers’ needs consistently. We can call this “Doing things right all the time.”

However, when we try to further define “what is quality” in detail, we would easily findthat quality is also an intangible, complicated concept. For different products or services, or different aspects thereof—for different people, such as producers, designers, management, and customers, even for different quality gurus—the perceived concepts of quality are quite different.

According to David A. Garvin (1988), quality has nine dimensions. Table 1.1 shows these nine dimensions ofquality with their meanings and explanations in terms of a slide projector.
|Table 1.1: The Dimension of Quality |
|Dimension |Meaning and example |
|Performance |Primary productcharacteristics, such as brightness of the picture |
|Features |Secondary characteristics, added features, such as remote control |
|Conformance |Meeting specifications or industry standards, quality of work |
|Reliability |Consistency of performance...