SUMMARY OF TEXTBOOK CONTENT FOR MNO2602

MNO 2602
Study Unit 1 – Chapter 1: Defining perspectives on quality ....................................................................................... 11
1.1 Introduction .................................................................................................................................................... 11
1.2 What is quality? .............................................................................................................................................. 11
a) Product quality definitions & Dimensions ...................................................................................................... 11
b) Service Quality Dimensions............................................................................................................................. 12
1.3 Recognising different perspectives on quality ................................................................................................ 12
Why does it matter that different definitions of quality exist .................................................................................... 12
1.4 Differing functional perspectives .................................................................................................................... 12
1) Supply Chain Perspective ................................................................................................................................ 12
2) Engineering perspective.................................................................................................................................. 13
3) Operations perspective ................................................................................................................................... 14
4) Strategic Management perspective ................................................................................................................ 14
5) Marketing perspective .................................................................................................................................... 16
6) Financial perspective....................................................................................................................................... 16
7) Human Resources perspective........................................................................................................................ 17
8) Quality Management as its own functional discipline .................................................................................... 17
1.5 The 3 Spheres of quality.................................................................................................................................. 18
1.6 Other perspectives of quality.......................................................................................................................... 19
1.7 Common understanding of contingency theory ............................................................................................. 19
Study Unit 2 – Chapter 2: Quality Theory ....................................................................................................................... 20
2.1 What is theory................................................................................................................................................. 20
• Definition of theory......................................................................................................................................... 20
• Four elements of theory ................................................................................................................................. 20
• Twos ways of establishing theory ................................................................................................................... 20
• Is there a theory of quality management? ..................................................................................................... 20
• Managers must apply what fits....................................................................................................................... 20
2.2 Leading contributors to Quality Theory .......................................................................................................... 21
• W Deming........................................................................................................................................................ 21
• Joseph M Juran ............................................................................................................................................... 22
• Kaoru Ishikawa ................................................................................................................................................ 23
• Armand Feigenbaum ....................................................................................................................................... 24
• Philp Crosby .................................................................................................................................................... 24
• Genichi Taguchi ............................................................................................................................................... 25

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, • The rest ........................................................................................................................................................... 25
2.4 Viewing quality theory from a Contingency perspective ................................................................................ 26
2.5 Resolving the difference in quality approaches: An integrative view ............................................................ 26
2.6 Theoretical Framework for quality management ........................................................................................... 27
Unit 3: Global Supply Chain Quality and International Standards .................................................................................. 28
3.1 Managing Quality for the multinational firm (MNF)....................................................................................... 28
3.2 Quality Improvement: The American Way ..................................................................................................... 30
3.2.1 The Baldridge Performance excellence program ............................................................................................ 30
3.3 Quality Improvement: The Japanese way....................................................................................................... 32
3.3.1 Deming Prize ................................................................................................................................................... 32
3.3.2 Other Japanese contributions to Quality thought .......................................................................................... 32
3.3.3 Lean Production .............................................................................................................................................. 32
3.3.4 Japanese Total Quality Control (TQC) ............................................................................................................. 32
a) Visibility ........................................................................................................................................................... 32
b) In-process inspection ...................................................................................................................................... 32
c) N= 2 Technique ............................................................................................................................................... 32
d) Total involvement of workforce...................................................................................................................... 32
e) The five S’s ...................................................................................................................................................... 33
f) Preventative Maintenance (PM) ..................................................................................................................... 33
3.4 Quality Improvement: The European way ...................................................................................................... 33
3.4.1 European Quality Award ................................................................................................................................. 33
3.4.2 ISO 9000:2008 ................................................................................................................................................. 33
3.4.3 Quality Management Principles Underlying ISO 9000:2008........................................................................... 34
3.4.4 The ISO 9000:2008 Process ............................................................................................................................. 34
3.4.5 ISO 4000 .......................................................................................................................................................... 35
3.5 Quality Improvement: The Chinese way ......................................................................................................... 35
3.5.1 Does Chinese Quality Management exist? ..................................................................................................... 35
3.6 Are Quality Approaches influenced by Culture? ............................................................................................. 35
Unit 4: Strategic Quality Planning ................................................................................................................................... 36
4.1 Introduction .................................................................................................................................................... 36
4.2 Strategy Content ............................................................................................................................................. 36
4.3 The Importance of time in quality improvement ........................................................................................... 36
4.4 Leadership for Quality..................................................................................................................................... 36
4.4.1 Leadership Dimensions ................................................................................................................................... 37
4.5 Quality and Ethics ........................................................................................................................................... 37
4.6 Quality as Strategy .......................................................................................................................................... 37

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, 4.6.1 Costs of Quality ............................................................................................................................................... 37
4.6.2 PAF Paradigm .................................................................................................................................................. 38
4.6.3 Lundvall-Juran Quality Cost model ................................................................................................................. 39
4.6.4 Focus through quality ..................................................................................................................................... 39
4.6.5 Order Winners................................................................................................................................................. 40
4.6.6 Quality as core competency............................................................................................................................ 40
4.7 Quality Strategy Process ................................................................................................................................. 40
4.8 Deploying Quality (Hoshin Kanri) .................................................................................................................... 41
4.9 Does Quality lead to better business results .................................................................................................. 42
4.9.1 Quality and Price ............................................................................................................................................. 42
4.9.2 Quality and Cost .............................................................................................................................................. 42
4.9.3 Quality and productivity ................................................................................................................................. 42
4.9.4 Quality and Profitability .................................................................................................................................. 42
4.9.5 Quality and Sustainability ............................................................................................................................... 42
4.10 Supply Chain Strategy ..................................................................................................................................... 43
Unit 5: The Voice of the Customer.................................................................................................................................. 44
5.1 Introduction .................................................................................................................................................... 44
5.2 Customer-driven Quality ................................................................................................................................. 44
5.2.1 The pitfalls of reactive customer-driven quality ............................................................................................. 44
5.3 Customer-relationship Management.............................................................................................................. 44
5.3.1 Compliant resolution ...................................................................................................................................... 45
5.3.2 Feedback ......................................................................................................................................................... 45
5.3.3 Guarantees ...................................................................................................................................................... 45
5.3.4 Corrective Action ............................................................................................................................................ 45
5.4 The “GAPS” approach to design...................................................................................................................... 46
5.5 Segmenting Customers and Markets .............................................................................................................. 46
5.6 Strategic Supply Chain Alliances between customers and suppliers .............................................................. 47
5.6.1 The role of the customer in the supply chain ................................................................................................. 47
5.7 Communicating Downstream ......................................................................................................................... 47
5.8 Actively soliciting Customer-feedback approaches ........................................................................................ 47
5.7.1 Telephone contact .......................................................................................................................................... 47
5.7.2 Focus groups ................................................................................................................................................... 47
5.7.3 Customer Service Surveys ............................................................................................................................... 48
5.9 Passively solicited customer feedback approaches ........................................................................................ 48
5.8.1 Customer research cards ................................................................................................................................ 48
5.8.2 Customer response line and web sites ........................................................................................................... 48

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, 5.10 Managing Customer Retention and loyalty .................................................................................................... 48
5.11 Customer-relationship Management system ................................................................................................. 49
5.12 A word on excellence design........................................................................................................................... 49
Unit 6: The Voice of the Market...................................................................................................................................... 50
6.1 What do we mean by the voice of the market? ............................................................................................. 50
6.2 Gaining insight through benchmarking........................................................................................................... 50
6.3.1 Process benchmarking .................................................................................................................................... 51
6.3.2 Financial benchmarking .................................................................................................................................. 51
6.3.3 Performance benchmarking............................................................................................................................ 51
6.3.4 Product benchmarking .................................................................................................................................... 51
6.3.5 Strategic Benchmarking .................................................................................................................................. 51
6.3.6 Functional Benchmarking ............................................................................................................................... 51
6.3 Purposes of Benchmarking ............................................................................................................................. 51
6.4 Difficulties in monitoring and measuring performance .................................................................................. 51
6.5 Commonly benchmarked performance measures ......................................................................................... 52
6.6.1 Why collect all these measures ...................................................................................................................... 52
6.6.2 Key Business Factors ....................................................................................................................................... 52
6.6 Business Process Benchmarking ..................................................................................................................... 52
6.7.1 Robert Camp’s Business process benchmarking process ............................................................................... 52
6.7 Leading and Managing the benchmarking effort............................................................................................ 53
6.8.1 Training ........................................................................................................................................................... 53
6.8 Baselining and reengineering .......................................................................................................................... 53
6.9 Problems with benchmarking ......................................................................................................................... 54
Unit 7: Quality and Innovation in Product and Process Design ...................................................................................... 55
7.1 Designing products for quality ........................................................................................................................ 55
7.2 The Design process ......................................................................................................................................... 55
7.3 Quality Function Deployment ......................................................................................................................... 56
7.4 Technology in design....................................................................................................................................... 56
7.5 Other Design Methodologies .......................................................................................................................... 56
7.5.1 Organising the design team ............................................................................................................................ 56
7.5.2 The Product life cycle ...................................................................................................................................... 56
7.5.3 Product families and the product life cycle .................................................................................................... 57
7.5.4 Designing products that work ......................................................................................................................... 57
7.5.5 Design for Manufacture method .................................................................................................................... 57
7.5.6 Design for maintainability ............................................................................................................................... 57
7.6 Designing for reliability ................................................................................................................................... 57

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, 7.6.1 Reliability analysis tools .................................................................................................................................. 57
7.6.2 Failure modes and effects analysis (FMEA) .................................................................................................... 58
7.6.3 How FMEA works ............................................................................................................................................ 58
7.6.4 Fault-tree analysis ........................................................................................................................................... 58
7.6.5 Failure modes, effects and criticality analysis................................................................................................. 58
7.7 Environmental Considerations in Design ........................................................................................................ 59
Unit 8: Designing Quality Services .................................................................................................................................. 60
8.1 Differences between service and manufacturing ........................................................................................... 60
8.1.1 Internal vs External Services ........................................................................................................................... 60
8.1.2 Voluntary vs involuntary services ................................................................................................................... 60
8.1.3 How are service quality issues different from those of manufacturing? ....................................................... 60
8.1.4 How are service quality issues similar to manufacturing?.............................................................................. 60
8.2 What do services customers want? ................................................................................................................ 60
8.3 SERVQUAL ....................................................................................................................................................... 60
8.3.1 Gap Analysis .................................................................................................................................................... 61
8.3.2 Assessing differences in expectations and perceptions by using differences technique ............................... 62
8.4 Designing and improving the services transaction ......................................................................................... 62
8.4.1 Service blueprinting ........................................................................................................................................ 62
8.4.2 Moments of truth ........................................................................................................................................... 62
8.4.3 Poka-yoke ........................................................................................................................................................ 62
8.5 The Customer Benefits package...................................................................................................................... 62
8.6 Service transaction Analysis (STA) .................................................................................................................. 63
8.7 Improving customer service in government ................................................................................................... 63
8.8 Quality in Health care ..................................................................................................................................... 63
8.9 Supply Chain Quality in services ..................................................................................................................... 63
8.10 A theory for service quality management ...................................................................................................... 63
Unit 9: Managing Supplier Quality in the Supply Chain .................................................................................................. 64
9.1 The Value Chain .............................................................................................................................................. 64
9.1.1 The Chain of customers .................................................................................................................................. 64
9.1.2 Managing the Supply Chain ............................................................................................................................ 64
9.2 Supplier Alliances ............................................................................................................................................ 64
9.3 Single-sourcing ................................................................................................................................................ 64
9.4 Supplier Development .................................................................................................................................... 65
9.5 Supplier Relationship Management Systems (SRMS) ..................................................................................... 65
9.6 A supplier development program: ISO/TS 16949:2009 .................................................................................. 66
9.7 ISO/TS 16949:2009.......................................................................................................................................... 66

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, 9.7.1 Quality Management System.......................................................................................................................... 66
9.7.2 Management Responsibility ........................................................................................................................... 66
9.7.3 Resource Management ................................................................................................................................... 66
9.7.4 Product Realisation ......................................................................................................................................... 66
9.7.5 Measurement, Analysis and Improvement..................................................................................................... 66
9.8 Acceptance Sampling and statistical sampling techniques............................................................................. 66
9.9 Building an understanding of supply chain quality Management .................................................................. 66
Unit 10: The Tools of Quality .......................................................................................................................................... 67
10.1 Improving the system ..................................................................................................................................... 67
10.2 Ishikawa’s basic 7 tools for quality ................................................................................................................. 67
10.2.1 Process maps................................................................................................................................................... 67
10.2.2 Check Sheets ................................................................................................................................................... 68
10.2.3 Histograms ...................................................................................................................................................... 68
10.2.4 Scatter Diagram............................................................................................................................................... 68
10.2.5 Control Charts ................................................................................................................................................. 68
10.2.6 Cause and effect (Ishikawa) Diagram .............................................................................................................. 68
10.2.7 Pareto Charts .................................................................................................................................................. 68
10.3 The Seven new tools for improvement........................................................................................................... 69
10.3.1 The affinity diagram ........................................................................................................................................ 69
10.3.2 The interrelationship Digraph ......................................................................................................................... 69
10.3.3 Tree Diagrams ................................................................................................................................................. 69
10.3.4 Prioritization Grid ............................................................................................................................................ 69
10.3.5 Matrix Diagram ............................................................................................................................................... 69
10.3.6 Process decision program chart ...................................................................................................................... 69
10.3.7 Activity Network Diagram ............................................................................................................................... 69
10.3.8 Reflections on the Managerial N7 Tools ......................................................................................................... 69
10.4 Other tools for performance measurement ................................................................................................... 69
10.4.1 Spider charts ................................................................................................................................................... 69
10.4.2 Balanced scorecards........................................................................................................................................ 69
Unit 11: Statistically based Quality Improvement for variables ..................................................................................... 70
11.1 Statistical fundamentals.................................................................................................................................. 70
11.1.1 What is statistical thinking? ............................................................................................................................ 70
11.1.2 Why do statistics sometimes fail in the workplace? ....................................................................................... 70
11.1.3 Understanding process variation .................................................................................................................... 70
11.1.4 Process Stability .............................................................................................................................................. 70
11.1.5 Sampling Methods .......................................................................................................................................... 70

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, 11.1.6 Random Sample inspection ............................................................................................................................ 70
11.1.7 Systematic samples ......................................................................................................................................... 70
11.1.8 Sampling by rational subgroups ...................................................................................................................... 70
11.1.9 Planning for inspection ................................................................................................................................... 70
11.1.10 Control Plans ........................................................................................................................................... 71
11.2 Process control Charts .................................................................................................................................... 71
11.2.1 Variables and attributes control charts .......................................................................................................... 71
11.2.2 A generalised procedure for developing process charts ................................................................................ 71
11.2.3 X and R charts.................................................................................................................................................. 71
11.2.4 Interpreting control charts.............................................................................................................................. 72
11.2.5 X and Moving range (MR) charts for population data .................................................................................... 72
11.2.6 Median charts ................................................................................................................................................. 72
11.2.7 X Bar and s charts ............................................................................................................................................ 72
11.2.8 Moving average chart ..................................................................................................................................... 72
11.2.9 Cusum Chart .................................................................................................................................................... 72
11.3 Some Control chart concepts for variables ..................................................................................................... 73
11.3.1 Corrective action ............................................................................................................................................. 73
11.3.2 How do we use Control charts to continuously improve? .............................................................................. 73
11.4 Process capability for variables ....................................................................................................................... 73
11.4.1 Population vs sampling distributions .............................................................................................................. 73
11.4.2 Capability studies ............................................................................................................................................ 73
11.4.3 PPK .................................................................................................................................................................. 73
11.4.4 The difference between capability and stability ............................................................................................. 73
11.5 Other Statistical Techniques in quality management ..................................................................................... 74
Unit 12: Statistically based quality improvement for attributes .................................................................................... 75
12.1 Introduction .................................................................................................................................................... 75
12.2 Generic process for developing attributes charts........................................................................................... 75
12.3 Understanding attributes charts ..................................................................................................................... 75
12.3.1 P Charts for proportion defective ................................................................................................................... 75
12.3.2 Np Charts......................................................................................................................................................... 76
12.3.3 C and U charts ................................................................................................................................................. 76
12.4 Choosing the right attributes .......................................................................................................................... 76
12.5 Reliability models ............................................................................................................................................ 77
12.5.1 Series Reliability .............................................................................................................................................. 77
12.5.2 Parallel Reliability ............................................................................................................................................ 77
12.5.3 Measuring Reliability....................................................................................................................................... 77

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, 12.5.4 Mean time to failure (MTTF) ........................................................................................................................... 78
12.5.5 System availability........................................................................................................................................... 78
Unit 13: Six Sigma Management and lean tools ............................................................................................................. 79
13.1 Introduction .................................................................................................................................................... 79
13.2 What is Six Sigma? .......................................................................................................................................... 79
13.3 Organising Lean-Six Sigma .............................................................................................................................. 79
13.3.1 Packaging with Six Sigma ................................................................................................................................ 79
13.4 DMAIC overview.............................................................................................................................................. 80
13.5 Define Phase ................................................................................................................................................... 80
1. Developing the business case ......................................................................................................................... 80
2. Project evaluations ......................................................................................................................................... 80
3. Pareto Analysis ................................................................................................................................................ 80
4. Problem definition .......................................................................................................................................... 80
13.6 Measure Phase ................................................................................................................................................ 80
1) Selecting process outcomes ............................................................................................................................ 81
❖ FMEA ............................................................................................................................................................... 81
2) Verifying measurements ................................................................................................................................. 81
❖ Gauge R&R ...................................................................................................................................................... 81
13.7 Analyse Phase ................................................................................................................................................. 81
1. Defining objectives.......................................................................................................................................... 81
2. Identifying X’s.................................................................................................................................................. 81
3. Analysing sources of variation ........................................................................................................................ 81
13.8 Improvement phase ........................................................................................................................................ 81
13.9 Control Phase .................................................................................................................................................. 81
13.10 Taguchi design of experiments ................................................................................................................... 82
Robust design .............................................................................................................................................................. 82
13.11 Background of the Taguchi method ............................................................................................................ 82
Taguchi definition of quality ....................................................................................................................................... 82
Quality loss function ................................................................................................................................................... 82
13.12 The Taguchi Process .................................................................................................................................... 83
13.13 Design for Six Sigma .................................................................................................................................... 83
13.14 Lean-Six Sigma From a contingency perspective ........................................................................................ 83
Unit 14: Managing Quality improvement teams and projects ....................................................................................... 84
14.1 Introduction .................................................................................................................................................... 84
Why Employees enjoy teams ...................................................................................................................................... 84
14.2 Leading teams for quality improvement......................................................................................................... 84

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, Employee empowerment and involvement ............................................................................................................... 84
Flattening hierarchies for improved effectiveness ..................................................................................................... 84
Team leader roles and responsibilities ....................................................................................................................... 84
Team roles and responsibilities .................................................................................................................................. 86
Team formation and evolution ................................................................................................................................... 86
14.3 Types of teams ................................................................................................................................................ 87
14.4 Implementing teams ....................................................................................................................................... 87
Meeting management ................................................................................................................................................ 87
Conflict resolution in teams ........................................................................................................................................ 88
Saving quality teams from failure: diagnosing problems and intervening ................................................................. 89
14.5 Managing and controlling projects ................................................................................................................. 89
Qualifying Projects ...................................................................................................................................................... 89
Project Charters .......................................................................................................................................................... 89
14.6 Force-Field analysis ......................................................................................................................................... 89
Work Breakdown Structure (WBS) ............................................................................................................................. 89
Identifying outcome measures ................................................................................................................................... 89
Identifying task times .................................................................................................................................................. 90
Activity network diagrams .......................................................................................................................................... 90
Managing multiple projects ........................................................................................................................................ 90
Unit 15: Implementing and Validating the Quality system ............................................................................................. 91
15.1 Building blocks for the system of quality improvement ................................................................................. 91
15.2 People ............................................................................................................................................................. 91
15.3 Organisational Learning and Knowledge ........................................................................................................ 91
15.4 Culture............................................................................................................................................................. 91
15.5 Closeness to customer .................................................................................................................................... 91
15.6 Information and finance ................................................................................................................................. 91
15.7 The three spheres of quality ........................................................................................................................... 91
15.8 The integrative approach ................................................................................................................................ 91
15.9 Alignment between the quality system and strategy ..................................................................................... 92
15.10 Internal Validation: Documenting and assessing the quality system ......................................................... 92
15.11 Quality Audits .............................................................................................................................................. 92
15.12 Quality audit process .................................................................................................................................. 92
15.13 Types of audits ............................................................................................... Error! Bookmark not defined.
15.14 Operational audits ...................................................................................................................................... 92
15.15 Performance audits ..................................................................................................................................... 93
15.16 Qualitative and quantitative elements in audits ........................................................................................ 93

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, 15.17 Validating the quality system ...................................................................................................................... 93




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