Quality Management Tools And Methodologies

Quality management tools and methodologies are where most organizations will focus their efforts when implementing quality management. There are a lot of different tools and techniques used in quality management and some will work better for certain organizations. Quality management tools should be planned with specific goals in mind and the use of metrics to help successful meeting of those goals.

Quality Management Tools And Techniques

The tools and techniques most commonly used in Quality management and process improvement are:

  • Cause and effect diagram
  • Control Charts
  • Histogram
  • Pareto Charts
  • Flow chart
Cause and effect diagram

fishboneCause and effect diagram is very helpful to find the root cause of the defect. Cause-and-effect diagrams show the relationship between the results of problems and the root cause of these problems. This diagram shows all the primary and secondary causes of a problem and the effect of all the proposed solutions. This Ishikawa diagram is also called fishbone diagram due to its fish-like shape. In the above diagram: poor training, old equipment, funds are the causes and “Excessive downtime” is the effect.

Control Charts

controlControl charts measure the results of processes over time and display the results in the form of a graph. By using control charts one can determine whether process variances are in control or out of control. A control chart is works on sample variance measurements, from the samples chosen and measured, the mean and standard deviation are determined.

Let’s assume from a sample you have determined the measurement that mean is 300 and the standard deviation equals 44.72. Three standard deviations on either side of the mean become your upper and lower control points on this chart. In this case 3 standard deviations is equal to 300 +- (134.16). Therefore, if all control points fall within plus or minus three standard deviations on either side of the mean, the process is in control. If points fall outside the acceptable limits, the process is not in control and corrective action is needed. UCL and LCL are Upper control limit and lower control limit respectively. USL and LSL are upper specification limit and lower specification limit.

Histogram

histogramHistograms are a type of bar charts that depict the distribution of variables over time. This represents the distribution by mean. This graph may take different shapes based on the condition of the distribution. Histogram can be used to measure something against time i.e. the graph is plotted with a variable on x-axis and time on the y-axis.

Consider the following example: The following histogram shows number of hits on the company’s website in different time of the day. The x-axis shows the number of users or customers active on the website and the y-axis shows the time of the day.

 

Pareto chart

paretoPareto observed that 80 percent of issues occur due to 20% reasons. Over the years, others have shown that the 80/20 rule applies across many disciplines and areas. So it was a good idea to identify and focus on that category of defects which covers the maximum portion. It is a special form of vertical bar chart and used to identify the first few major sources responsible for the problem. In the figure below the total no. of defects are plotted against the reasons for those defects. The problems are rank-ordered according to their frequency and percentage of defects. By doing this ordering it is easier for you to identify the primary areas for corrective action.

 Flowchart

Flowcharts are logical steps in a logical order so as to accomplish an objective. Flow charts are drawn with the use of geometrical objects like rectangular, rhombus, parallelogram, activities, decision points to  in a process. Flowcharting can help identify where quality problems might occur on the project and how problems happen. There are different software tools in the market today for drawing flow charts, such as MS Visio.

The quality policy is a guideline created by the top management that describes what quality policies should be adopted by the project team, in line with other companies. These tools and techniques are very helpful for a project manager to understand it and incorporate it and deliver a quality product.

About Aditi Malhotra

Aditi Malhotra is the Content Marketing Manager at Whizlabs. Having a Master in Journalism and Mass Communication, she helps businesses stop playing around with Content Marketing and start seeing tangible ROI. A writer by day and a reader by night, she is a fine blend of both reality and fantasy. Apart from her professional commitments, she is also endearing to publish a book authored by her very soon.

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Quality Management Tools – including TQM, Six Sigma, Cost of Quality and EFQM

 

What are they?

Frameworks

According to the UK’s Chartered Quality Institute, the only true measure of acceptable quality is customer satisfaction, which takes into account both objective and subjective interpretations of the needs and expectations of customers.

Quality management involves planning and controlling activities to ensure that the product or service is fit for purpose, and meets design specifications and the needs of customers, according to a CIMA Official Study Text.

Traditionally, quality management focused on quality control, where finished goods were inspected and tested, and substandard ‘waste’ product disposed of or sold at a lower price. However, contemporary thinking rejects this approach as inefficient and profit-draining. As a result, several tools and philosophies have been developed that aim to focus on and eliminate waste entirely.

Cost of Quality (CoQ)

According to CIMA Official Terminology, CoQ is the difference between the actual cost of producing, selling and supporting products or services and the equivalent costs if there were no failures during production or usage. The cost of quality can be analysed into:

  • cost of conformance – cost of achieving specified quality standards
  • cost of prevention – costs incurred prior to or during production in order to prevent substandard or defective products or services from being produced
  • cost of appraisal – costs incurred in order to ensure that outputs produced meet required quality standards
  • cost of non-conformance – cost of failure to deliver the required standard of quality
  • cost of internal failure – costs arising from inadequate quality which are identified before the transfer of ownership from supplier to purchaser
  • cost of external failure – costs arising from inadequate quality discovered after the transfer of ownership from supplier to purchaser.

Total Quality Management (TQM)

CIMA Official Terminology describes TQM as the integrated and comprehensive system of planning and controlling all business functions so that products or services are produced which meet or exceed customer expectations. TQM is a philosophy of business behaviour, embracing principles such as employee involvement, continuous improvement at all levels and customer focus. It is also a collection of related techniques aimed at improving quality – such as full documentation of activities, clear goal-setting and performance measures from the customer perspective.

Originally developed in Japan in the 1950s, the aim of TQM is to get things ‘right first time’, an approach that increases prevention costs, such as system design, but helps to prevent internal and external failure costs. There is an emphasis on participation throughout the value chain, and a commitment to continuous improvement through constant reassessment of processes.

Kaizen

CIMA Official Terminology describes Kaizen as a Japanese term for continuous improvement in all aspects of an entity’s performance, at every level.

The philosophy of Kaizen seeks to involve all levels of employees, encouraging suggestions for small incremental improvements across all areas of the business which over time have a major impact. In a manufacturing context, processes are standardised, assessed and then improved, with the ultimate result being decreased waste and increased productivity.

Six Sigma

CIMA Official Terminology describes Six Sigma as a methodology based on TQM to achieve very low defect rates. The ‘sigma’ refers to the Greek letter used to denote standard deviation, so ‘six sigma’ means that the error rate lies beyond six standard deviations from the mean. To achieve six sigma, an organisation must therefore produce not more than 3.4 defects per million products.
In practice, businesses use techniques such as statistical process control to monitor and chart processes, identifying exceptions to the upper and lower limits and aiming to reduce the number of faults.

EFQM Excellence Model

The EFQM model is a framework for management systems, developed by the European Foundation for Quality Management. It aims to assess performance; integrate and align existing tools, procedures and processes; introduce a way of thinking that encourages reflection and stimulates continuous improvement; and identify the key actions that are driving results.

A key feature of the model is a diagnostic framework that allows organisations to grade themselves against nine key criteria. These focus on the cause and effect relationship between how an organisation carries out its actions (enablers), and what these achieve (results).

Enablers Results
Leadership

Strategy

People

Partnerships and resources

Processes, products and services

Customer results

People results

Society results

Business results

 

What benefits do Quality Management Tools provide?

An effective quality management programme leads to higher quality processes and outputs. These in turn lead to greater customer satisfaction and improved profitability. Quality management encourages a culture of team working at all levels of the organisation, which in turn improves productivity. Human resources are recognised as a key organisational asset. Lower costs of failure, combined with shorter processing times, will result in cost savings.

Questions to consider when implementing Quality Management Tools

  • How do we measure quality?
  • Are senior management fully committed to the quality concept?
  • Can we ensure buy-in across the organisation?
  • What training will staff require?
Actions to take / Dos Actions to Avoid / Don’ts
  • Communicate the benefits of quality management across the organisation. Quality management techniques require buy-in and engagement at all levels in order to work effectively
  • Encourage a culture of teamwork, ensuring that managers work as part of their teams, rather than as overseers
  • Encourage a culture of ownership and responsibility among employees
  • Be aware that existing rewards may conflict with quality management by encouraging individualism over teamwork
  • Don’t be complacent – quality management is a long-term process seeking to make continual, small improvements over time
  • Avoid the use of too many quality measures – be selective and recognise that some may conflict with others

Quality Management Tools and Techniques

 

We must be able to ensure sustainable quality in all products and services.  The ways we do this are as follows:

 

  • Total Quality Management (TQM) – all member of an organization participate in improving processes, products, services, and the culture in which they work.  Top management develops the vision for total quality and provides the commitment and support, including progress reviews this vision.  The customer can be internal or external.  TQM stresses quality as the integrating force in the organization.  For tQM to work, all stages in the production process must conform to specifications that are driven by the needs and wants of the end customer.  All processes must be in control and possess minimal variation to reduce time and the expense of inspection.
    • Continuous Improvement – refers to the relentless pursuit of product and process improvement through a series of small progressive steps.  This is an integral part of JIT and TQM.
    • Quality Function Deployment (QFD) – this is a method to develop higher quality products and services at less cost and in less time.  Based on teamwork and customer involvement, it integrates functional areas such as marketing, design, engineering development, manufacturing, production, and supply in new product development from the conception stage through final delivery.
  • Six Sigma – focuses on preventing defects by using data to reduce variation and waste.  Six sigma (three standard deviations from the left and right of the average or mean) means that there are no more than 3.4 defects per million opportunities.
  • Statistical Process Control (SPC) – W. Edwards Deming showed that most processes tend to behave in a statistical manner and that understanding how the process behaves without operator interference is necessary before controls can be put in place.  This was known as statistical quality control (SQC).  SPC  involves testing a random sample of output from a process in order to detect if nonrandom, assignable changes in the process are occurring.  Quality assurance is predicated on the supplier’s process capability and the acceptable quality meshes together.  If the natural range of the supplier’s process is wider that the range of the buyer’s quality requirements, then the buyer must negotiate with the supplier to narrow the gap through process improvement.
    • Causes of variation – must establish the kind of variation occurring and eliminating the variation.  Two types of variation are:
      • Common or chance causes of variation – these causes are intrinsic to the process and will always be there unless one changes the process.
      • Special or assignable causes of variation – these causes are outside, nonrandom problems that must be identified and eliminated.  SPC is primarily concerned with eliminating assignable or special causes.

 

    • Process capability – a process is capable when there are no special or assignable causes of variation, but only common or chance causes.  If a process is capable, then the probability (chance) of a process meeting customer requirements or specifications can be predicted.  The process should have upper and lower specification limits (USLs and LSLs) so that the process is monitored and can show specification are not being met.
    • Upper specification limit (USL) and lower specification limit (LSL) – see explanation above.  When measures are with the LSL and USL, they are said to be in tolerance and meeting customer requirements.
    • Process Capability Index (Cp) – The index combines process spread and tolerance into one index and indicates whether process variation is satisfactory.
    • Cpk Index – This index adjusts the process capability index (Cp) for the effect of the non centered distribution of data.
    • Process Control – is a method of monitoring a process to prevent defect.  Both the center and the variation around the center are measured.  Quality control charts are the primary tool.
    • Quality Control Charts – another way to monitor a repetitive process.  Similar to looking at process capability, on uses upper and lower control limits (UCLs and LCLs) to ensure the process perform to internal requirements.  Any results outside of the UCL or LCL must be investigated and improved for the process to be back in to conformance.  UCLs and LCLs can shift upward or downward depending on business conditions, but the reason must be determined.
    • Upper and Lower Control Limits (UCLs and LCLs) – See explanation above.
  • Sampling, Inspection, and Testing – As mentioned earlier, each organization in the supply chain is a customer, a converter, and a supplier.  Therefore, there are at least three opportunities for each organization to experience poor quality.  The high cost of correcting poor quality products and services drives the focus on building in quality in the process rather than inspecting it after production or delivery.  Sampling, testing and inspection are quality management tools that may be used at three different stages in the acquisition process:
    • Before a purchase commitment is made – It may be necessary to test samples to see if they are adequate for the intended purpose.
    • During the commitment to a supplier – Sampling or inspection is performed to ensure that the conversion process is in control and that defects are minimal.
    • After a purchase commitment has been made – Inspection may be required to ensure that the items delivered conform to the original description.

Two major types of quality checks on tangible output are:

 

    • Sampling – a sample is a small number of items selected from a larger group or population of items.  The goal is to secure a sample that is representative of the total population being tested.  The results of testing or inspecting the sample are used to accept or reject the entire batch or lot.
      • Random Sampling – one where every element in the population has an equal chance of being selected.  The method of taking a random sample will depend of the characteristics of the product being inspected.  If all products received in a shipment, for example, were thoroughly mixed together, then the selection of a sample from any part of the shipment would represent a valid random sample.
      • Sequential Sampling – used to reduce the number of items inspected in accept-reject decisions without loss of accuracy.  It is based on the cumulative effect of information that every additional item in the sample adds as it is inspected.  For example, ten percent of a lot is inspected, and the whole lot is accepted.  If the ten percent sample is not acceptable, and additional ten percent may be inspected it the decision to reject cannot be made on the first sample.
    • 100% Inspection or Screening – Inspect and sample all items, which drive up the cost of quality.  Experience shows that 100 percent inspection seldom accomplishes a completely satisfactory job of separating the acceptable from the non-acceptable item.  200 or 300 percent inspection may only working in this scenario.
    • Testing – Testing products may be necessary before a commitment is made to purchase.  The general rule followed by buyers is to accept only samples that have some reasonable chance of being used.  Buyers are more likely to accept samples than reject, because buyers are always looking for better products than the ones currently in use.
      • Use and Laboratory Tests – A use test shows that a product can do what it was intended to be used for.  A use test alone may be considered sufficient in most cases.  An advantage of a use test is that an item can be tested for the particular purpose for which it is intended and under the conditions in which it will be used.  Failure risk can be high in cost and performance with this method.
      • Commercial Testing Labs and Services – Labs are used for testing, particularly for new processes or materials or for aid in setting specifications.  It is important to keep complete records of each sample accepted.
    • Inspection upon Receipt – With regard to inspection upon receipt, it is desirable to include the procedure for inspection and testing as protection for both the buyer and seller.  The supplier cannot refuse to accept rejected goods on the ground that the type of inspection to which goods would be subjected was not known or that the inspection was unduly rigid.  Suppliers and buyers need to work out both the procedure for sampling and the nature of the test to be conducted.  In theory, the supplier and buyer should get identical results for the testing.
    • Adjustments and Returns – Non- conforming material or product can be rejected and returned at the supplier’s expense or held for disposition instructions.  The buyer must inform the supplier if the shipment is to be replaced with acceptable material or if other alternatives are being considered.  The costs incurred when materials are rejected may be divided into transportation costs, testing costs, and contingent expense.  Typically, transportation is borne by the supplier, test is borne by the buyer, and contingent (litigation) expense is borne by the buyer.  A joint quality program between the buyer and seller help to mitigates these costs.
  • The Quality Assurance and Quality Control Group – Their responsibilities include establishing and maintaining effective controls for monitoring processes and equipment, and supporting efforts to help supplier and their suppliers to design, to design, implement, and monitor continuous quality improvement programs.  They also have responsibilities of inspecting incoming material or monitoring in-house production.  This group also plays a key role in supplier certification.
  • Assuring the Quality of Purchased Services – Service fall along a continuum of highly tangible to highly intangible, and intangibles cannot be inventoried.  These two aspects of service can create special quality measurement difficulties.  Services, like products, can be measured, and performance tied into return on investment.  The following ways to measure the quality of purchased services are:
    • Informal Evaluation – an evaluation with a lack of specific criteria to measure performance.
    • Formal Evaluation – more formal process to measure quality which five quality dimensions:
      • Reliability – ability to perform the promised service dependably and accurately.
      • Responsiveness – willingness to help customers and provide prompt service.
      • Assurance – knowledge and courtesy of employees and their ability to inspire trust and confidence.
      • Empathy – caring, individualized attention the firm provides its customers.
      • Tangibles – physical facilities, equipment, appearance of personnel
    • Value of the Service – One way to look at value of service is to classify services as high, medium, or low value.  This could be done with ABC/Pareto analysis or portfolio analysis that looks at both value and risk to acquire.  ABC classification would focus on high-spend services.
    • Degree of Repetitiveness – to acquire repetitive services, it may be possible to develop a standard quality assessment and gather quality information on a regular basis.
    • Degree of Tangibility – Firms must specify tangible requirements for services in a contract that specifies measures and deliverables.
    • Direction of the Service – The ultimate user of a contracted service will play a major role in both the specification of the service, and the assessment of quality received.
    • Production of the Service – Services can be produced by people or equipment or both.
    • Nature of the Demand – Demand for a particular service may be continuous, periodic, or discrete.  Continuous is around the clock service; periodic ranges from once a week to once a month; discrete can a one time transactional agreement.
    • Nature of Service Delivery – The nature and place of service delivery may have significant acquisition repercussions.  It is vital to determine which issues are related to the quality of the service and how to write these terms clearly.
    • Degree of Standardization – It makes a difference whether a service is standard or customized specifically for the purchaser. The less consumer contact, the more standard the service becomes.
    • Skills Required for the Service – Can ranged from unskilled to skilled.  Quality may be monitored primarily by user feedback
  • Supplier Certification – is the process of evaluating and recognizing the quality performance of an organization’s suppliers.  Standards are established for quality, and often delivery and productivity performance as well; suppliers that consistently meet these standards are certified.

 

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