Introduction to Quality (Continued…)

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Quality Theory – Philip Crosby

Philip Crosby has been mainly associated with the concept of Zero-Defects (Z-D). Accordingly, quality for Crosby meant conformance to requirements. Crosby introduced this meaning of definition during his work experience as a quality control engineer with the Martin Company’s (subsequently Martin-Marietta and now Lockheed-Martin Co.) missile production plant[1]. His main responsibility was to determine whether intensified postproduction inspection would result in ability to ship missiles completely free of defects. He examined that the number of defects reduced with greater inspection but the process did not lead to “Zero-Defects’ (Z-D) as required by the company. He signed pledges from employees that they would let no defects on their part. This led to delivery of a Pershing missile two weeks ahead of schedule with no detectable defects among the 25000 parts. Accordingly, Crosby developed a “14 Step Quality Improvement Program” that included the following:

  1. Management Commitment – Communication instead of motivation to management regarding quality
  2. Quality Improvement Team – Each department’s representative forms a team and appoint one of them to head the team
  3. Quality Measurement – Standardized measurements that reflect possibility of defects
  4. Cost of Quality Evaluation (COQ) – Indication of corrective action towards reducing costs leading to profits
  5. Quality Awareness – Communication about quality to workforce
  6. Corrective Action – Encourage everyone to highlight any issues, problems, concerns, etc that can be rectified immediately
  7. Establish an Ad hoc committee for the Zero Defects Program – Everyone understands and practices ‘zero defects’
  8. Supervisor Training Conducting orientation with all levels of management
  9. Zero Defects Day – Emphasis on the commitment
  10. Goal Setting – Determining tasks for the team for a 30, 60 or 90 day time period
  11. Error Cause Removal – Providing inputs on errors
  12. Recognition – Establish award programs for individuals meeting goals or performing acts ensuring quality
  13. Quality councils – Bring quality professionals and team together to regularly communicate, determine actions and improve quality program
  14. Do it Over Again – Set up a new team after 18 months and repeat the program all over

Summary of Crosby’s 14 Step Quality Improvement Program”

  • According to Crosby, quality should be synonymous with being good and without any defects.
  • Quality of products/services is associated with profits and is not free. According to Crosby, a business incurs the cost of quality i.e. the cost of producing zero-defects related to products
  • “Do It Right First Time” (DIRFT) was introduced by Crosby. Crosby believed that continuous inspections added to higher costs and encouraged businesses to integrate processes that did not leave room for defects. Thus businesses would incur a one-time cost for quality with minimal inspections
  • Coined the concept of “Zero Defects” based on 4 underlying principles
  • Quality is conformance to requirements
  • Defect prevention is preferable to quality inspection and correction
  • Zero defects is the quality standard
  • Quality is measured as the Price of Nonconformance (PONC). PONC is the money lost by a business that fails to deliver the required standard of quality for a product or a service.
    • Argued that mistakes are caused by two things – lack of knowledge or lack of attention
    • Extended and formalized Juran’s “Cost of Poor Quality” into “Costs of Quality” (COQ), which is the sum of the costs incurred by a company in preventing poor quality, the costs incurred to ensure and evaluate that the quality requirements are being met, and any other costs incurred as a result of poor quality being produced[2]. COQ can be broken down into four categories namely – Prevention costs; Appraisal costs; Internal failure costs and; External failure costs:
    • Prevention costs are costs incurred in preventing poor quality or defects from occurring at various stages during the delivery process. Delivery process includes the design, development, production and shipping. Examples of prevention costs are education and training (Induction about the business units to new employees, training in workings of financial markets, etc), process control (machines and equipments are tested prior to workers using them formally in a manufacturing set up), market research (new biscuit with different flavours of individuals is tested prior to its formal introduction), field testing and preventive maintenance (cars are tested prior to their introduction in the market)
    • Appraisal costs are costs incurred in the process of uncovering defects and are related to costs of inspections, testing, audits etc. Examples include inventory counts, quality administration salaries, internal product audit, supplier evaluation and their audit reports
    • Internal failure costs are costs costs associated with discovering poor product quality before reaching the customer. For example, costs of machine downtime, costs of discounting defective items for salvage value[3], rework, re-design (Tata nano went through many stages of redesigning)
    • External failure costs are costs incurred by the company resulting when the customers’ expectations are not met leading to deviation in customer faith and loyalty. Examples are costs of warranty, customer compliant administration, replacement product costs, lost reputation costs, customer dissatisfaction costs, etc[4].

Note: Juran’s Costs of Poor Quality and Crosby’s Cost of Quality seem to be identical but they are not the same. Based on their theories, Crosby expresses processes and people to be aligned with the idea of zero-defects so that the COQs are an integral part of the business and these costs should be minimal leading to profits. Juran’s Costs of Poor Quality, considers errors and defects to exist and an integral part of the business and hence measures the costs of poor quality. Juran’s and Crosby’s theories and meaning of quality however converge to another quality concept called “Quality Assurance”, which is reflective.

Quality Assurance

Quality Assurance (QA) is based on the principles of Juran and Crosby and refers to a systematic monitoring and evaluation of various aspects of a project, service or facility to maximise probability that standards of quality are being attained by the production process. Accordingly, QA involves activities that include a planned system of review procedures by personnel, preferably by independent third-parties. It is an action undertaken by a business to prevent quality problems from occurring and it means that a business should devise systems to conduct tasks that direct affect the product quality. For example, Sanjeev Kapoor (the famous chef of India) has invented a new recipe for a paneer dish. To introduce this dsh, he aligns the ingredients and quantity of the ingredients and writes a recipe. The recipe is a system for preparing this paneer dish that not only describes the ingredients but also the utensils necessary to prepare the dish, the method of cooking, testing methods when it is ready, storing and serving methods. Similar to the paneer dish recipe, products /services by business are produced/ provided by identifying a proper system and developing it systematically. Second step should be to document the systematic processes that can take the form of policies, procedures, reference information, standards followed, etc. The final step should be directed towards informing, instructing and training staff / employees who will use the processes to produce/provide producs/services[5].

Note: QA is a step undertaken towards Quality Control (QC) and Total Quality Management (TQM) that will be studied during upcoming classes.

[1] Optimizing quality in electronics assembly: a heretical approach, By James Allen Smith, Frank B. Whitehall

[2]Costs of quality, Quality Planning and the Bottom Line by G. Dennis Beecroft

[3] Salvage value is an accounting value that an asset will realise upon its sale at the end of its useful life

[4] Based on the belief how completely satisfied customers tell to about (less than or equal to) 6 others about the product/service customers’ bought, while dissatisfied tell t about 22 (or more) others, thus losing 22 or more potential customers in the future while businesses should focus on the six customers they may gain.