is based on four “absolutes of quality management”:
1 Quality is defined as conformance to requirements (a product that meets the specifications), not as “goodness” or “elegance.”
2 The system for causing quality is prevention (eliminating both special and common causes by using SPC tools), not appraisal.
3 The performance standard must be zero defects, not “close enough.”
4 The measurement of quality is the price of nonconformance (producing defective parts, or parts that do not meet specifications), not indices.
Thus, to implement quality improvement, top management should follow these absolutes. Management must also implement training for workers so that they understand how to use all the tools of SPC and thus can avoid any issues that infiltrate the system. Management must make sure that supplier(s) also understand that quality improvement is an ongoing part of the company's policy and get assurance from suppliers that they will also use SPC tools to maintain the quality of everything they supply.
1.4 Managing Quality Improvement
Managing quality improvement requires accountability, daily defect analysis, preventive measures, data‐driven quality, teamwork, training, and optimizing process variables.
Managing quality improvement is as important as achieving improved quality. Managing quality improvement becomes part of implementing quality improvement. Quality management plays a key role in the success of achieving total quality.
Hiring a consulting firm that “specializes in quality improvement” and not taking control into their own hands is the biggest mistake made by top management of any organization. Hiring a consulting firm means top management is relinquishing their responsibility for sending the important message to their employees that quality improvement is a never‐ending policy of the company.
Top management should play an important role in team building and, as much as possible, should be part of the teams. Top management and supervisors should understand the entire process of quality improvement so that they can guide their employees appropriately on how to be the team players. Teamwork can succeed only if management supports it and makes teamwork part of their new policy. Forming a team helps to achieve quality improvement, and establishing plans is essential: it is part of the job or process of managing quality improvement.
Another part of quality improvement is that management must provide the necessary resources and practical tools to employees who are participating in any project to achieve quality improvement. Arranging 5‐ or 10‐day seminars on quality improvement for employees without giving them any practical training and other resources is not good management practice.
1.4.1 Management and Their Responsibilities
The management of a company must create an environment of good communication so that everyone in the company knows their duties and goals or purpose. Management must make sure the purpose remains steadfast and does not change if a top manager leaves the company. Management must keep the communication lines with employees open so that they know which direction the business is moving and what their responsibilities are to take the business where it would like to be in 5 or 10 years. In discussing his 14 points, Deming says, “Adopt the new philosophy. We are in a new economic age created by Japan. Western management must awaken to the challenge, must learn their responsibility, and take on leadership for change.”
It is the responsibility of management to have a continuous dialogue with customers and suppliers. Both customers and suppliers play an important role in achieving quality improvement. Management must make a commitment to sustained quality improvement by providing resources for education and practical training on the job and showing their leadership. This can be done if they are willing to increase their understanding and knowledge about every process that is taking place to improve quality. Leadership that just passes on orders but doesn't understand anything about the processes that are in the works or under consideration for the future will be disappointed and will also disappoint their customers and investors.
1.4.2 Management and Quality
In this modern era, management and quality go hand in hand. Global customers are not only looking at the quality of the product they buy but also are looking at who manufactured it and how much they are committed to backing it up. Customers are also interested in determining the reliability of that commitment. Global competition puts so much pressure on management that they must make quality their top priority for the company. Managers can no longer satisfy employees, customers, or investors with just encouraging words: they must show solid outcomes, such as how much sales have gone up, how many new customers have been attracted, and the retention rate of old customers. All of this will fall in line only if management has made quality an important ongoing process.
Furthermore, management must understand that the customer defines quality, so management must make commitments to customers about the increased quality and value of the company’s products. In addition, management should understand that it is the employees who build the quality into products. Thus, management must make commitments to employees and give them the resources and tools they need. Management must also obtain the same kind of commitments from suppliers. Any sloppiness on the part of suppliers can ruin all the plans for ongoing process improvement or quality improvement. In the modern economic age, only companies and managements that make such commitments and follow through on them can assure themselves a bright future, job guarantees, and better compensation for their employees.
Management and quality are a two‐way street. Any company with good management delivers better quality, and having better quality means there is good management.
1.4.3 Risks Associated with Making Bad Decisions
It is important to note that whenever decisions are made based on samples, you risk making bad decisions. Bad decisions in practice lead to difficulties and problems for producers as well as consumers. These bad decisions in statistical terms are referred to as type I and type II errors as well as alpha (α) and beta (β) risks, respectively. It is important to know the following key points about these risks:
Sooner or later, a bad decision will be made.
The risks associated with making bad decisions are quantified in probabilistic terms.
α and β risks added together do not equal 1.
Even though α and β go in the opposite direction (that is, if α increases, β decreases), there is no direct relationship between α and β.
The values of α and β can be kept as low as you want by increasing the sample size.
Figure 1.3 Detecting practical and statistical differences.
Definition 1.2
Producer risk is the risk of failing to pass a product or service delivery transaction on to a customer when, in fact, the product or service delivery transaction meets customer quality expectations. The probability of making a producer risk error is quantified in terms of α.
Definition 1.3
Consumer risk is the risk of passing a product or service delivery transaction on to a customer under the assumption that the product or service delivery transaction meets customer quality expectations when, in fact, the product or service delivery is defective or unsatisfactory. The probability of making a consumer risk error is quantified in terms of β.
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