BBA303: QUALITY MANAGEMENT

ASSIGNMENT

DRIVE	SUMMER  2015
PROGRAM	Bachelor of Business Administration- BBA
SEMESTER	3
SUBJECT CODE & NAME	BBA303: QUALITY MANAGEMENT
BK ID	B1597
Credit & Marks	4 CREDITS & 60 MARKS

Note – Answer all questions. Kindly note that answers for 10 marks questions should beapproximately of 400 words. Each question is followed by evaluation scheme.

1 Define the term Quality management. What are the dimensions of quality? Differentiate between Quality Control and Quality Assurance.

Answer: Definition of Quality :

Quality in business, engineering and manufacturing has a pragmatic interpretation as the non-inferiority or superiority of something; it is also defined as fitness for purpose. Quality is a perceptual, conditional, and somewhat subjective attribute and may be understood differently by different people. Consumers may focus on the specification quality of a product/service, or how it compares to competitors in the marketplace. Producers might measure the conformance quality, or degree to which the product/service was produced correctly. Support personnel may measure quality in the degree that a product is reliable, maintainable, or sustainable. Simply put, a quality item (an item that has quality) has the ability to perform satisfactorily in service and is suitable for its intended purpose.

Dimensions of quality :

Eight dimensions of product quality management can be used at a strategic level to analyze quality characteristics.

Dimension 1: Performance

Performance is often a source of contention between customers and suppliers, particularly when deliverables are not adequately defined within specifications. The performance of a product often influences profitability or reputation of the end-user. As such, many contracts or specifications include damages related to inadequate performance.

Dimension 2: Features

While this dimension may seem obvious, performance specifications rarely define the features required in a product. Thus, it’s important that suppliers designing product or services from performance specifications are familiar with its intended uses, and maintain close relationships with the end-users.

Dimension 3: Reliability

Reliability may be closely related to performance. For instance, a product specification may define parameters for up-time, or acceptable failure rates. Reliability is a major contributor to brand or company image, and is considered a fundamental dimension of quality by most end-users.

Dimension 4: Conformance

If it’s developed based on a performance specification, does it perform as specified? If it’s developed based on a design specification, does it possess all of the features defined?

Dimension 5: Durability

Durability is closely related to warranty. Requirements for product durability are often included within procurement contracts and specifications. For instance, fighter aircraft procured to operate from aircraft carriers include design criteria intended to improve their durability in the demanding naval environment.

Dimension 6: Serviceability

As end users become more focused on Total Cost of Ownership than simple procurement costs, serviceability (as well as reliability) is becoming an increasingly important dimension of quality and criteria for product selection.

Dimension 7: Aesthetics

The way a product looks is important to end-users. The aesthetic properties of a product contribute to a company’s or brand’s identity. Faults or defects in a product that diminish its aesthetic properties, even those that do not reduce or alter other dimensions of quality, are often cause for rejection.

Dimension 8: Perception

Perception is reality. The product or service may possess adequate or even superior dimensions of quality, but still fall victim to negative customer or public perceptions.

Differences between Quality Assurance and Quality Control

Definitions of QA and QC

·         Quality Assurance (QA) refers to the process used to create the deliverables, and can be performed by a manager, client, or even a third-party reviewer. Examples of quality assurance include process checklists, project audits and methodology and standards development.

·         Quality Control (QC) refers to quality related activities associated with the creation of project deliverables. Quality control is used to verify that deliverables are of acceptable quality and that they are complete and correct. Examples of quality control activities include inspection, deliverable peer reviews and the testing process.

·         Quality control is about adherence to requirements. Quality assurance is generic and does not concern the specific requirements of the product being developed.

·         Quality assurance activities are determined before production work begins and these activities are performed while the product is being developed. In contrast, Quality control activities are performed after the product is developed.

Q2. Differentiate between Mission and Vision Statements. Write a brief note on “quality objectives”.

Answer: Difference between Mission and Vision Statements :

1. About:

A Mission statement talks about HOW you will get to where you want to be. Defines the purpose and primary objectives related to your customer needs and team values.           

A Vision statement outlines WHERE you want to be. Communicates both the purpose and values of your business.

2. Answer:

A mission statement answers the question, “What do we do? What makes us different?”

A vision statement answers the question, “Where do we aim to be?”

3. Time :

A mission statement talks about the present leading to its future.           

A vision statement talks about your future.

4. Function        

A mission statement lists the broad goals for which the organization is formed. Its prime function is internal; to define the key measure or measures of the organization's success and its prime audience is the leadership, team and stockholders.               

A vision statement  lists where you see yourself some years from now. It inspires you to give your best. It shapes your understanding of why you are working here.

5. Change :         

Your mission statement may change, but it should still tie back to your core values, customer needs and vision.

As your organization evolves, you might feel tempted to change your vision. However, mission or vision statements explain your organization's foundation, so change should be kept to a minimum.

6. Developing a statement :

In mission statement it is What do we do today? For whom do we do it? What is the benefit? In other words, Why we do what we do? What, For Whom and Why?            

In vision statement it is Where do we want to be going forward? When do we want to reach that stage? How do we want to do it?

Quality Objectives :

The purpose of quality objectives is to determine conformity to (customer and regulatory) requirements, and facilitate the effective deployment and improvement of the quality management system (QMS). Quality objectives must originate from the organization’s quality policy. Developing a QMS must be a strategic business decision and therefore top management must provide the necessary direction and leadership, starting with establishing the quality policy and objectives. Your quality policy provides top management’s vision on quality management for the organization. It provides the organization with focused direction, i.e. high level goals and objectives for quality management. Besides your own organization, requirements for quality policies and objectives (e.g., for product as well as product realization processes) may also come from the customer, regulatory bodies and industry standards or codes. Your quality policy and objectives must be consistent with the scope of your QMS and must complement other business objectives of your organization such as those related to growth, finance, profitability, the environment and occupational health and safety. Aggressive sales or marketing strategies must not be at the expense of quality management.

Q. 3. Explain the following:

a) Kaizen: Kaizen, Japanese for "change for better". When used in the business sense and applied to the workplace, kaizen refers to activities that continually improve all functions and involve all employees from the CEO to the assembly line workers. It also applies to processes, such as purchasing and logistics,that cross organizational boundaries into the supply chain. It has been applied in healthcare, psychotherapy, life-coaching, government, banking, and other industries.

By improving standardized activities and processes, kaizen aims to eliminate waste (see lean manufacturing). Kaizen was first implemented in several Japanese businesses after the Second World War, influenced in part by American business and quality management teachers who visited the country. It has since spread throughout the world and is now being implemented in environments outside of business and productivity.

The Toyota Production System is known for kaizen, where all line personnel are expected to stop their moving production line in case of any abnormality and, along with their supervisor, suggest an improvement to resolve the abnormality which may initiate a kaizen.

The cycle of kaizen activity can be defined as:

·         Standardize an operation and activities,

·         Measure the operation (find cycle time and amount of in-process inventory).

·         Gauge measurements against requirements.

·         Innovate to meet requirements and increase productivity.

·         Standardize the new, improved operations.

·         Continue cycle ad infinitum.

This is also known as the Shewhart cycle, Deming cycle, or PDCA.

b) Benchmarking and its importance:Benchmarking is the process of comparing one's business processes and performance metrics to industry bests or best practices from other companies. Dimensions typically measured are quality, time and cost. In the process of best practice benchmarking, management identifies the best firms in their industry, or in another industry where similar processes exist, and compares the results and processes of those studied (the "targets") to one's own results and processes. In this way, they learn how well the targets perform and, more importantly, the business processes that explain why these firms are successful.

Benchmarking is used to measure performance using a specific indicator (cost per unit of measure, productivity per unit of measure, cycle time of x per unit of measure or defects per unit of measure) resulting in a metric of performance that is then compared to others.

Also referred to as "best practice benchmarking" or "process benchmarking", this process is used in management and particularly strategic management, in which organizations evaluate various aspects of their processes in relation to best practice companies' processes, usually within a peer group defined for the purposes of comparison. This then allows organizations to develop plans on how to make improvements or adapt specific best practices, usually with the aim of increasing some aspect of performance. Benchmarking may be a one-off event, but is often treated as a continuous process in which organizations continually seek to improve their practices.

Q. 4. What is meant by Customer Focus? Describe in brief the concept of Customer satisfaction and Customer delight.

Customer satisfaction is essential for business success in today's marketplace. Customer satisfaction refers to the extent to which customers are happy with the products and services provided by a business. Customer satisfaction levels can be measured using survey techniques and questionnaires.

Gaining high levels of customer satisfaction is very important to a business because satisfied customers are most likely to be loyal and to make repeat orders and to use a wide range of services offered by a business.

Customer focused

Studies carried out by companies like Argos and Cadburys have found very high levels of customer satisfaction. It is not surprising because these companies emphasise market research and marketing as the tools to find out what customers want. Knowing what your customer wants then makes it possible to tailor everything you do to pleasing the customers e.g. providing the goods that customers want, in the packaging that they want, in retail outlets which are convenient to use and well placed.

There are many factors which lead to high levels of customer satisfaction including:

Products and services which are customer focused and thence provide high levels of value for money.

Customer service giving personal attention to the needs of individual customers.

After sales service - following up the original purchase with after sales support such as maintenance and updating (for example in the updating of computer packages).

What is clear about customer satisfaction is that customers are most likely to appreciate the goods and services that they buy if they are made to feel special. This occurs when they feel that the goods and services that they buy have been specially produced for them or for people like them. This relates to a wide range of products such as razors that are designed for ease of use and good quality finish, petrol products that are environmentally friendly and customised to meet the needs of particular types of engines, etc.

Customer satisfaction is a marketing term that measures how products or services supplied by a company meet or surpass a customer’s expectation.

Customer satisfaction is important because it provides marketers and business owners with a metric that they can use to manage and improve their businesses.

In a survey of nearly 200 senior marketing managers, 71 percent responded that they found a customer satisfaction metric very useful in managing and monitoring their businesses.

Here are the top six reasons why customer satisfaction is so important:

·         It’s a leading indicator of consumer repurchase intentions and loyalty

·         It’s a point of differentiation

·         It reduces customer churn

·         It increases customer lifetime value

·         It reduces negative word of mouth

·         It’s cheaper to retain customers than acquire new ones

Q. 5. Write Short notes on the following:

a) Cost of Quality:When calculating the business case for a Six Sigma project, the cost of poor quality (COPQ), which is the cost caused through producing defects, is a commonly used concept. Within the total amount of quality cost, however, COPQ represents only a certain proportion. Costs do not result from only producing and fixing failures; a high amount of costs comes from ensuring that good products are produced. This article explains the cost of quality as a more comprehensive concept covering the cost of poor quality and the cost of good quality. In short, any cost that would not have been expended if quality were perfect contributes to the cost of quality.

Cost of Quality

As defined by Philip B. Crosby in his book Quality Is Free, the cost of quality has two main components: the cost of good quality (or the cost of conformance) and the cost of poor quality (or the cost of non-conformance). As Figure 1 shows:

·         The cost of poor quality affects:

o   Internal and external costs resulting from failing to meet requirements.

·         The cost of good quality affects:

o   Costs for investing in the prevention of non-conformance to requirements.

o   Costs for appraising a product or service for conformance to requirements.

b) Productivity:Productivity is an average measure of the efficiency of production. It can be expressed as the ratio of output to inputs used in the production process, i.e. output per unit of input.When all outputs and inputs are included in the productivity measure it is called total productivity. Outputs and inputs are defined in the total productivity measure as their economic values. The value of outputs minus the value of inputs is a measure of the income generated in a production process. It is a measure of total efficiency of a production process and as such the objective to be maximized in production process.  Productivity measures that use one or more inputs or factors, but not all factors, are called partial productivities. A common example in economics is labor productivity, usually expressed as output per hour. At the company level, typical partial productivity measures are such things as worker hours, materials or energy per unit of production.

In macroeconomics the approach is different. In macroeconomics one wants to examine an entity of many production processes and the output is obtained by summing up the value-added created in the single processes. This is done in order to avoid the double accounting of intermediate inputs. Value-added is obtained by subtracting the intermediate inputs from the outputs. The most well-known and used measure of value-added is the GDP (Gross Domestic Product). It is widely used as a measure of the economic growth of nations and industries. GDP is the income available for paying capital costs, labor compensation, taxes and profits.

Q. 6. Define Quality Management System. Explain Quality Management Principles.

Answer:A quality management system (QMS) is a collection of business processes focused on achieving quality policy and quality objectives to meet customer requirements. It is expressed as the organizational structure, policies, procedures, processes and resources needed to implement quality management. Early systems emphasized predictable outcomes of an industrial product production line, using simple statistics and random sampling. By the 20th century, labour inputs were typically the most costly inputs in most industrialized societies, so focus shifted to team cooperation and dynamics, especially the early signalling of problems via a continuous improvement cycle. In the 21st century, QMS has tended to converge with sustainability and transparency initiatives, as both investor and customer satisfaction and perceived quality is increasingly tied to these factors. Of all QMS regimes, the ISO 9000 family of standards is probably the most widely implemented worldwide - the ISO 19011 audit regime applies to both, and deals with quality and sustainability and their integration.  Other QMS, e.g. Natural Step, focus on sustainability issues and assume that other quality problems will be reduced as result of the systematic thinking, transparency, documentation and diagnostic discipline.

Elements of a Quality Management System

·         Quality policy

·         Quality objectives

·         Quality manual

·         Organizational structure and responsibilities

·         Data Management

·         Processes - including purchasing

·         Product quality leading to Customer satisfaction

·         Continuous improvement including corrective and preventive action

Quality management principles:

The International Standard for Quality management (ISO 9001:2008) adopts a number of management principles that can be used by top management to guide their organizations towards improved performance.

Customer focus: Since the organizations depend on their customers, they should understand current and future customer needs, should meet customer requirements and should try to exceed the expectations of customers.

Leadership: Leaders of an organization establish unity of purpose and direction of it. They should go for creation and maintenance of such an internal environment, in which people can become fully involved in achieving the organization's quality objective.

Involvement of people: People at all levels of an organization are the essence of it. Their complete involvement enables their abilities to be used for the benefit of the organization; however, the ultimate key decisions are made by the project manager.

Process approach: The desired result can be achieved when activities and related resources are managed in an organization as a process.

System approach to management: An organization's effectiveness and efficiency in achieving its quality objectives are contributed by identifying, understanding and managing all interrelated processes as a system. Quality Control involves checking transformed and transforming resources in all stages of production process.

Continual improvement: One of the permanennfrani"/>

Factual approach to decision making: Effective decisions are always based on the data analysis and information.

Mutually beneficial supplier relationships: Since an organization and its suppliers are interdependent, therefore a mutually beneficial relationship between them increases the ability of both to add value.

These eight principles form the basis for the quality management system standard ISO 9001:2008.