CONTENTS. 3 Quality Improvement and Cost Reduction Sporadic and Chronic Quality Problems Project-by-Project Approach 50.

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1 CONTENTS 1 Basic Concepts Quality A Look at History Quality The Changing Business Conditions Quality Defined The Quality Function Relationships: Quality, Productivity, Costs, Cycle Time, and Value Managing for Quality Quality Disciplines and Other Disciplines Perspective on Quality Internal versus External 13 Summary 14 Problems 15 References 16 Supplementary Reading 16 Websites 17 2 Companywide Assessment of Quality Why Assessment? Cost of Poor Quality Categories of Quality Costs Relating the Cost of Poor Quality to Business Measures Optimum Cost of Quality Standing in the Marketplace Organization Culture on Quality Assessment of Current Quality Activities Malcolm Baldrige National Quality Award ISO 9000 Quality Standards 42 Summary 45 Problems 46 References 47 Supplementary Reading 48 Websites 48 3 Quality Improvement and Cost Reduction Sporadic and Chronic Quality Problems Project-by-Project Approach 50 xiii

2 xiv Contents 3.3 Example of a Project Proving the Need for a Major Quality Improvement Initiative Experiences with the Project-by-Project Approach Introduction to Six Sigma Define Phase Measure Phase Analyze Phase Improve Phase Control Phase Maintaining a Focus on Continuous Improvement 95 Summary 96 Problems 96 References 99 Supplementary Reading 100 Websites Operational Quality Planning and Sales Income Contribution of Quality to Sales Income Quality and Financial Performance Achieving a Quality Superiority Customer Satisfaction versus Customer Loyalty Economic Worth of a Loyal Customer Impact of Quality on Lost Sales Level of Satisfaction to Retain Present Customers Life Cycle Costs Spectrum of Customers Planning for Product Quality to Generate Sales Income A Quality Planning Road Map for Ensuring Product Salability 113 Summary 118 Problems 120 References 120 Supplementary Reading 121 Website Quality Control Definition of Control Measurement Self-Control The Control Subjects for Quality Establish Measurement Establish Standards of Performance Measure Actual Performance Compare to Standards Take Action on the Difference A Process Control System That Uses the Six-Sigma Concept 139

3 Contents xv Summary 141 Problems 141 References 142 Supplementary Reading 142 Website Process Management Functional versus Process Management Process Management Selection of Processes Organize the Process Team Example of Process Management The Planning Phase of Process Management Transferring and Managing the New Process Impact of Process Management on an Organization 160 Summary 160 Problems 161 References 161 Supplementary Reading 162 Websites Strategic Quality Management Elements of Strategic Quality Management Integrating Quality into Strategic Management Mission, Environment Analysis, Vision Developing Strategies Development of Goals; Competitive Benchmarking Deployment of Goals Provide Executive Leadership to Implement the Strategies Review Progress with Measurements, Assessment, and Audits; Balanced Scorecard The Learning Organization Implementing Total Quality Obstacles to Achieving Quality Goals 184 Summary 185 Problems 185 References 186 Supplementary Reading 187 Websites Organization for Quality Evolution of Organization for Quality Coordination of Quality Activities Role of Upper Management Role of the Quality Director 193

4 xvi Contents 8.5 Role of Middle Management Role of the Workforce Role of Teams General Quality Project Teams Workforce Teams Self-Managing Teams Selection, Training, and Retention of Personnel Quality Project Management and Traditional Project Management 209 Summary 211 Problems 211 References 213 Supplementary Reading Developing a Quality Culture Technology and Culture Theories of Motivation Corporate Culture Quality Culture Provide Quality Goals and Measurements at All Levels Provide Evidence of Management Leadership Provide for Self-Development and Empowerment Provide Participation as a Means of Inspiring Action Provide Recognition and Rewards 234 Summary 237 Problems 237 References 238 Supplementary Reading Basic Concepts of Statistics and Probability Statistical Tools in Quality The Concept of Statistical Variation Tabular Summarization of Data: Frequency Distribution Graphical Summarization of Data: The Histogram Box-and-Whisker Plots Graphical Summarization of Time-Oriented Data: The Run Chart Methods of Summarizing Data: Numerical Probability Distributions: General The Normal Probability Distribution The Normal Curve and Histogram Analysis The Exponential Probability Distribution The Weibull Probability Distribution The Poisson Probability Distribution The Binomial Probability Distribution Basic Theorems of Probability Enumerative and Analytic Studies 264

5 Contents xvii Statistical Thinking at Three Levels in an Organization Computer Software for Statistical Analysis 266 Summary 267 Problems 267 References 270 Supplementary Reading 270 Website Statistical Tools for Analyzing Data Scope of Data Planning and Analysis Statistical Inference Sampling Variation and Sampling Distributions Statistical Estimation: Confidence Limits Importance of Confidence Limits in Planning Test Programs Determination of the Sample Size Required to Achieve a Specified Accuracy in an Estimate Test of Hypothesis Testing a Hypothesis When the Sample Size Is Fixed in Advance Drawing Conclusions from Tests of Hypotheses Determining the Sample Size Required for Testing a Hypothesis The Design of Experiments Some Tools for Sound Experimentation Contrast Between the Classical and Modern Methods of Experimentation Analysis of Variance Taguchi Approach to Experimental Design Shainin and the Red X Approach to Experimental Design Planning for Experimental Design Regression Analysis Advanced Tools of Data Analysis 307 Summary 308 Problems 308 References 312 Supplementary Reading 313 Website Understanding Customer Needs Quality and Competitive Advantage Identify the Customers Customer Behavior Scope of Human Needs and Expectations Sources of Market Quality Information Market Research in Quality ( Voice of the Customer ) Needs Related to Product Features Needs Related to Product Deficiencies Measuring Customer Satisfaction 327

6 xviii Contents Market Research for Internal Customers 329 Summary 329 Problems 330 References 330 Supplementary Reading 331 Websites Designing for Quality Opportunities for Improvement in Product Design Design and Development as a Process Phases of Product Development and the Early Warning Concept Designing for Basic Functional Requirements; Quality Function Deployment Designing for Time-Oriented Performance (Reliability) Availability Designing for Safety Designing for Manufacturability Cost and Product Performance Design Review Concurrent Engineering Software Development Quality Measurement in Design Improving the Effectiveness of Product Development 366 Summary 368 Problems 369 References 371 Supplementary Reading 372 Websites Designing for Quality Statistical Tools The Statistical Toolkit for Design Failure Patterns for Complex Products The Exponential Formula for Reliability The Relationship between Part and System Reliability Predicting Reliability During Design Predicting Reliability Based on the Exponential Distribution Predicting Reliability Based on the Weibull Distribution Reliability as a Function of Applied Stress and Strength Availability Setting Specification Limits Specification Limits and Functional Needs Specification Limits and Manufacturing Variability Specification Limits and Economic Consequences Specification Limits for Interacting Dimensions 394 Summary 397

7 Contents xix Problems 398 References 401 Supplementary Reading 402 Websites Supply Chain Management Supplier Relations A Revolution Scope of Activities for Supplier Quality Specification of Quality Requirements for Suppliers Supplier Selection; Outsourcing Assessment of Supplier Capability Supply Chain Quality Planning Supply Chain Quality Control Supply Chain Quality Improvement 424 Summary 428 Problems 429 References 431 Supplementary Reading 432 Website Operations Manufacturing Sector Quality in Manufacturing in the 21st Century Initial Planning for Quality Concept of Controllability: Self-Control Automated Manufacturing Overall Review of Manufacturing Planning Organizing for Quality in Manufacturing Operations Planning for Evaluation of Product Process Quality Audits Quality Measurement in Manufacturing Operations Maintaining a Focus on Continuous Improvement 462 Summary 464 Problems 465 References 466 Supplementary Reading 467 Websites Operations Service Sector The Service Sector Initial Planning for Quality Planning for Self-Control Control of Quality in Service Operations Process Quality Audits Frontline Customer Contact Organizing for Quality in Service Operations 487

8 xx Contents 17.8 Six-Sigma Projects in Service Industries Quality Measurement in Service Operations Maintaining a Focus on Continuous Improvement 491 Summary 491 Problems 492 References 493 Supplementary Reading 494 Websites Statistical Process Control Definition and Importance of Statistical Process Control Advantages of Decreasing Process Variability Statistical Control Charts General Advantages of Statistical Control Steps in Setting Up a Control Chart Control Chart for Variables Data Pre-Control Attributes Control Charts Special Control Charts Process Capability Estimating Inherent or Potential Capability from a Control Chart Analysis Measuring Process Performance Process Capability Analysis Using Probability Paper Planning for the Process Capability Study Six-Sigma Concept of Process Capability Statistical Process Control and Quality Improvement Software for Statistical Process Control 532 Summary 533 Problems 534 References 539 Supplementary Reading 540 Website Inspection, Test, and Measurement The Terminology of Inspection Conformance to Specification and Fitness for Use Disposition of Nonconforming Product Inspection Planning Seriousness Classification Automated Inspection Inspection Accuracy Errors of Measurement How Much Inspection Is Necessary? The Concept of Acceptance Sampling Sampling Risks: The Operating Characteristic Curve 567

9 Contents xxi Quality Indexes for Acceptance Sampling Plans Types of Sampling Plans Characteristics of a Good Acceptance Plan ANSI/ASQC Z Selection of a Numerical Value of the Quality Index How to Select the Proper Sampling Procedures 580 Summary 582 Problems 583 References 587 Supplementary Reading 588 Websites Marketing, Field Performance, and Customer Service Quality Concepts in the Marketing Function Customer Relationship Management Warranty of Quality Field Performance Obtaining Feedback on Field Performance Analyzing Field Data Safety and Product Liability Customer Service Significance of Field Complaints Processing and Resolution of Customer Complaints Estimating Lost Profit Due to Product Problems Customer Loyalty and Retention Quality Measurement in Marketing, Field Performance, and Customer Service 618 Summary 619 Problems 620 References 622 Supplementary Reading 623 Websites Administrative and Support Operations Definition and Scope Finance Human Resources Information Technology Other Administrative and Support Areas Quality Measurement in Administrative and Support Operations 638 Summary 638 Problems 639 References 640 Supplementary Reading 641 Website 641

10 xxii Contents 22 Quality Information Systems Scope and Objective of a Quality Information System Reports on Quality Initial Planning for a Quality Information System Selection of Off-the-Shelf Software Preferred Practices in Developing a Quality Information System Creating New Software Data Quality 654 Summary 656 Problems 656 References 657 Supplementary Reading 657 Website Quality Assurance; Quality Audit Definition and Concept of Quality Assurance Concept of Quality Audits and Quality Assessments Principles of a Quality Audit Program Subject Matter of Audits Structuring the Audit Program Planning Audits of Activities Audit Performance Audit Reporting Corrective Action Follow-Up Human Relations in Auditing Quality Assessments Product Audit Sampling for Product Audit Reporting the Results of Product Audit 680 Summary 681 Problems 682 References 682 Supplementary Reading 683 Website 683 Appendix I 685 Appendix II 697 Name Index 714 Subject Index 720