Organizational Theory and Management
Content
CHAPTER 4 QUALITY
1
CHAPTER CONTENTS
Section 1. Definition Of Quality And Factors Affecting The Quality
Section 2. Implementation Of Quality Management
Section 3. Quality Cost Section 4. Specifications And Standards Section 5. International Standards
2
(4.1)MANAGERIAL WISDOM: VALUE OF QUALITY
A speaker
took out of a banknote US$100 in his speech and said to the audience, “Anyone want the US$100?” Immediately a pile of people raised their hands. Then he wrinkled the banknote, asking, “Anyone still want this banknote?” Still, a pile of people raised their hands. Next he threw the banknote to the ground, stepped and stamped this banknote with his shoes, and then picked up, saying, “Now, this banknote is wrinkled and dirty, anyone still want it?” As a result, many people still raised their hands. Finally, he tear the banknote into four pieces, and asked, “Now this banknote is wrinkled ,dirty and incomplete, now anyone of you still want it?” The result was still the same many people want this banknote.
3
REMARK
When young, one should establish and recognize self-worth.
True
gold does not fear Fire.
You should not fear the original value will be damaged even if suffering from the temporarily setbacks or misunderstanding.
If products with deeply rooted value do not sell well at a time, you must continue to improve and increase the value of products. The products finally can win the customers interest.
4
QUALITY
Quality is the sole thing available to customers by enterprises. Only customers can evaluate the quality of products and services provided by enterprises. Quality is also the only thing to maintain the competitiveness of the company and to satisfy the customers, because manufacture cost for superior and inferior products are almost the same;
while superior product can bring benefits to the company and inferior products only waste the sources of the company.
5
SECTION 1. DEFINITION OF QUALITY AND FACTORS AFFECTING THE QUALITY
6
(4.2)MANAGERIAL WISDOM: IF YOU WANT EVERYONE
SATISFIED, THEN EVERYONE WILL BECOME DISSATISFIED
A father and his son hurried on with their journey pulling a donkey. Some passers-by sneered at them, “Look at the two fools, they do not use the available animal to replace their walk!” Then the father ridded on the donkey. Some other pedestrians argued them again, “This old man shall not know care about the child, he rides on the donkey but let his son walk!” So the father let his son to ride on the donkey. But there are other passers-by criticized, “This child actually makes the old man walk while he himself rides on the donkey! A pity son!” Therefore, the father and the son together rid on the donkey.
7
(4.2)Managerial wisdom cont.
Some others again were very surprised, saying, “The two people ride on such a thin donkey. They are actually cruel to animal!” Then, the father and the son stopped to examine and made a new decision that they would tie the donkey well and carried the donkey going head.
Remark
If you want to satisfy everyone, then everyone will become dissatisfied including yourself. We should consider, select and think over before selecting the right (the object requires satisfaction) and acting. It is impossible to make all people satisfied.
8
1.1 MEANING OF QUALITY
1.1.1 Define quality on the basis of customers
a. Customers Customers can be divided into :
External customers refer to consumers, who buy the products or service of the company with money. Internal customers take the next process or downstream as customers.
9
b. Need
What kind of products or service do the customers require? Need decides the survival of the company. If the customers do not need, or the supplied products or service are not required by customers, then the company cannot survive. Need of customers can be replaced by hope, wish, dream, ideal, interest, love, like, pursuit wants, demand, drive force, expectation, insufficient, deficit of the clients.
10
(4.3) MANAGERIAL WISDOM : CUSTOMER –
ORIENTATION
Computer giant IBM hit the records of the global most profitable enterprises for many times in the 80s, but it totally lost over 8 billion US dollars within the two years of 1993 and 1994 which became the highest loss-making company in America even in the whole World. However, it actually restructured and reshaped itself within the next two years to create a brilliant performance. Gerstner, chairman and chief executive officer, knows that the reason for IBM to loss and suffering from setback is the boss. Bureaucratic corporate culture which cannot meet the needs of customers.
11
(4.3) MANAGERIAL WISDOM
For this point, everyday he always thinks and implements how to communicate with customers. How to resume contending for the time? With monthly standby corporate culture, meet the needs of customers and assist them to solve problems and earn more money. Finally, with the excellent leadership of Gerstner, IBM neither used any high technology nor did any marketing hoky-poky, let alone engaging in competition with price fighting, IBM regained the corporate philosophy centering on customers, giving priority to customers and of customer-orientation, which made IBM re-started and restructured to become Big Blue.
12
REMARK
Carnegie said, “I like strawberries while fish likes earthworms, so when I am fishing, I use earthworms as lure instead of strawberries.” The reason why IBM could re-start and stood up was because Gerstner found the boss bureaucratic corporate culture resulting in the failure of IBM. She modified it aiming at this point, and corrected the IBM’s business philosophy to be customer-oriented. Through which IBM raised from the dead and once again became the business giant. Management is to satisfy my (one’s own, family, corporate and organization) needs while sale is to meet the needs of him (customers, consumers and others).
13
c. Satisfaction
How to satisfy the needs of customers:
1.
2.
3.
4.
5.
First is to identify the criteria for meeting the needs of customers. Take the satisfaction of customers as criterion to determine products or service. Make sure that the employees know the operation procedures or processes Finish every step and form the habit of “do it right first time”, and Finally let quality speak for the company.
14
(4.4)MANAGERIAL WISDOM: PROCESS IS MUCH
MORE BETTER THAN RESULT
When the United States lost the Vietnam War and American corps participating in the war came back, they received the national hero-style warm welcome.
Remark
The participatory process is often more important then the result because the result is only a point while the process is the entire line. If there is any problem arising during the process, the result cannot be perfect. If there is no problem for every point during the process, the result will be perfect.
15
1.1.2 DEFINE QUALITY BASED ON COMPETITIVENESS (DAVID GARVIN)
1. 2. 3.
Define on the basis of product manufacturing Define based on product design Define based on users
16
(4.5) MANAGERIAL WISDOM: QUALITY IS SUITABLE
FOR CUSTOMERS TO USE
Alexander Lin: Quality is the product of service satisfying the needs of customers. Crosby : Quality is the standard to meet the requirements. V. Feigenbanum: Quality is the product satisfied the customers. Ishikawa: Quality is a kind of characteristic which can make consumers or users satisfied and willing to buy. Deming: Quality is to manufacture the most useful products in the market with a most economic means.
Qiu Lan: Quality is a kind of fitness for use which can make products meet the needs of users during the use period.
17
(4.5) MANAGERIAL WISDOM CONT.
Davis: The purpose of quality is to reach or even exceed the expectations
of customers. Jack Welch : Quality is the best guarantee to make us and customers of the same kind, is the most advantageous weapon for defending the invasion of foreign competitors, and is the only way to ensure the sustainable survival and development of the company.
Remark
Every quality control master has different definitions of quality. However, the operators serving in the business community are willing to ask, “Do you want to spend money buying what you have produced or sold? Do you now use the products of your own company?” 18
1.1.3 QUALITY DEFINITION BASED ON THE
PRACTICAL APPLICATION
1.
2.
3. 4. 5. 6. 7. 8.
Functions Features Service Service life Aesthetic feeling Conformity Steady security Proverbial quality
19
(4.6)MANAGERIAL WISDOM: BAD NEWS IS THE GOLD MINE
OF INFORMATION
According to the research survey conducted by Ford, if one buys a new car and feels very well, then he will share with six to seven people. But if not satisfied, he will complain to twenty-one of his friends and relatives
Remark
Poor
quality makes reputation dwindled impaired, then the business will be affected and the future survival and competitiveness will certainly be hit. Establish the view of customers’ complaints are the gold mine, then the company has the opportunity to correct shortcomings or errors. Then the complaints of customers can transferred to the source for the company to improve competitiveness, and the praises of customers can be transferred to the drive power of the warm and sincere service.
20
(4.6)MANAGERIAL WISDOM:
BAD NEWS IS THE GOLD MINE OF INFORMATION
According
to the research survey conducted by Ford, if one buys a new car and feels very well, then he will share with six to seven people. But if he is not satisfied, he will complain to twenty-one of his friends and relatives.
Remark
Poor
quality makes reputation dwindled impaired, then the business will be affected and the future survival and competitiveness will certainly be hit. Establish the view of customers’ complaints are the gold mine, then the company has the opportunity to correct shortcomings or errors. Then the complaints of customers can transferred to the source for the company to improve competitiveness, and the praises of customers can be transferred to the drive power of the warm and sincere service.
21
1.2 Factors Affecting Quality 1. Grasp the information 2. Company policy 3. Engineering and design capability 4. Raw materials 5. Machinery and equipment 6. Production workers 7. Support of on-site sales
22
(4.7) MANAGERIAL WISDOM: MASTERING
INFORMATION AND PHILOSOPHY OF BEING SECOND
Y.I Kiu, general manager of Daheisong Corporation , says, “One must learn Octopus Philosophy and Philosophy of Being Second.” Octopus Philosophy is a concept of doing business or innovation. It is best just like the octopus as eight legs which can search information everywhere. The basic requirement of Philosophy of being second is one must not have the air of superiority and should be open-minded.
Remark
The breadth of mind of entrepreneurs shows his achievement. The accommodation of your heart means the breadth of your future path. The boss must always remind himself to make octopus as teacher to master the information in faith and quickly.
23
(4.8) Managerial wisdom: Poor management
quality
Edwards
Deming points out that 85% of quality control responsibilities lie in poor management.
Remark
Make sure that the poor management behavior must be eliminated.
If a leader sets a bad example, it will be followed by his subordinates.
24
SECTION 2. IMPLEMENTATION OF QUALITY MANAGEMENT
25
(4.9) MANAGERIAL WISDOM : THE DIFFERENCE
BETWEEN SUCCESS AND FAILURE DUE THE IMPLEMENTATION OF QUALITY
There is a bakery called Kimura House in Ginza which is the most prosperous place in Tokyo of Japan. It has made a very unique kind of sandwich bread as early as 1898.It has always maintained the unique flavor for over one hundred years. Managers of successive generations of Kimura House have always adhere to a style, that is, the manager must taste a sandwich bread in person every morning. In order to taste the unique flavor of their own products and not to make the flavor changed, managers must keep their tongue healthy and the whole body healthy. Excessive eating or drinking and addicted to drinking must be not allowed.
26
Remark
The quality of product is not good, then the company will lose a large number of customers, which is a great loss and crisis for the company. The self-confidence of managers must base on the quality of product and healthy body
27
2.1 QUALITY CONTROL CIRCLE (QCC) ACTIVITY
2.1.1 Significance
In order to achieve the objective of quality management and the improvement of management, the factory organizes the workers of various departments inside the factory into groups to be a circle according to the relevance of the nature of their work, and the length of each circle is set.
2.1.2 Connotation of practical action of QCC
a) b) c)
d)
Participation in management Take initiative to cooperate Human management Objective management
28
(4.10) MANAGERIAL WISDOM: MUCH MORE
PROFIT AND GOOD SALES
Most people always think that small profits and good sales can make profits pouring in from all sides. However the quality of a product is often ignored due to little profits. There are still some companies adhering to much more profits and good sales German Mercedes-Benz Motor Co has manufactured the first motorcycle (bicycle with motor) and automobile (the first horse carriage without horses) in the world is one of these companies. The huge profits adhered by Mercedes-Benz is to take the way of improving quality and limiting production and to set about the technical expertise and strict quality management. Due to the persistence in high quality, win the trust of the market so that the performance does not drop for a long time. Therefore, although the annual output of Mercedes-Benz is 700,000 cars, which is far less than the cars produced by US GM, Ford or Toyota Auto of Japan more than 8 million cars, the profits of it cannot be compared by other companies.
29
REMARK
The demands of customers have been always changing, but there is a constant rule: they hope to get the products with best quality with a minimum price.
Based on this concept, everyone in the enterprise must take the quality as the most important responsibility.
The simplest way for the superior quality is that every employee has the ideas and practice of quality control employees who do their work well as well as take the responsibilities and do not allow any middle processed product that does not meet the quality requirements during the process of manufacturing. This kind of idea can be thoroughly instilled into every employee so that the quality of the products of the company can become perfect.
30
2.2 QUALITY MANAGEMENT SYSTEM
a) b) c) d) e)
Quality Inspection (QI) Quality Control (QC) Quality Assurance (QA) Total Quality Control (TQC) Total Quality Management (TQM) or Total Quality Assurance (TQA)
31
Table 4.1. Development stages of quality management system
Age
1900s – 1920s
Historical view of quality
1.Quality control of operators 2. Quality control of foremen 3. Quality control of inspectors Statistical quality control
View point of quality
Quality from finally inspected products at the end of production line to separate the good and bad
System view of quality
QI
1940s
Quality is from manufactured products during the production process and the process is the key. Quality is from design
QC
1950s
Quality assurance
QA
1960s
Total quality control
Quality is sound by management Quality is from culture and habits
TQC
After the 1980s
Total quality management
TQA
32
(4.11) MANAGERIAL WISDOM: FOLLOW-UP PROCESS
IS THE CUSTOMER
Quality management is only a measure rather than an entity. No matter how the quality control personnel strive to implement the final product inspection, the quality of a product cannot be improved by itself. It is the view that the production workers must have follow-up process and take the responsibility of quality control to improve the quality. Remark The quality can be improved by improving the implementation process of manufacturing rather than carrying out the quality management at the end of production line. The view of customer is to have follow-up.
33
A) Quality Inspection (QI)
The traditional quality views believe that the quality is inspected. Quality inspectors are arranged before shipment or at the end of product line. Only good products can be shipped, and inferior products can be shipped only after repaired and inspected to be superior products.
B) Quality Control (QC) It is believes that quality is achieved by manufacturing. Process is the key and it is expected to do it right first time (DIRFT). Statistical Control Chart is the basis for statistical quality management activities The main purpose of making Statistic Control Chart is to judge the changes during the process in according to the trend of various control points on the statistical control chart.
34
C) Quality Assurance (QA)
It is believe that before the product of good quality is manufactured, the needs of consumers must be known, then good design is required. If the design is not good, then the products meeting the needs of customers or of so-called good quality cannot be produced no matter how the efforts are made.
D) Total Quality Control (TQC)
TQC is also called Companywide Quality Control (CWQC), and its purpose aims at achieving the continuous improvement of quality and providing more and better products for customers. TQC emphasizes the internal accounting system, research and development, and manufacturing process to the external promotional activities. Quality improvement becomes a habit through continuous activities
35
36
(4.12) MANAGERIAL WISDOM: A
BIG LOSS
SMALL MISS IS A
When shooters targets at the objective, everyone wants to shot in the objective, but for the shooting performance, very few people get full marks. Why? Because at the moment of shooting, as long as the angle of gun has difference of 0.1 degree, the difference for the shooting point of the objective of 100 meters will be about 1 meter. The difference for the shooting of cannon will be larger. As long as the elevation difference has 0.1 degree, then the shooting point will have difference for 1 kilometer. Remark A small miss is as large as a mile. The implementation of quality management is to master the precision during the process of manufacturing, then defect rate will be greatly reduced and the ability of profits can be greatly increased.
37
E) Total Quality Management (TQM) or Total Quality Assurance (TQA)
Edward Deming believes that the philosophy of TQC takes the following five steps as basis:
1. 2.
3.
4. 5.
Enhancing the quality means to reduce the cost. The results can results in the improvement of efficiency. Better quality can lead to higher market share due to good reputation. Thus improve the profitability of the enterprise. And further the enterprise can create more job opportunities.
38
(4.13) MANAGERIAL WISDOM: LET QUALITY SPEAK
FOR YOU
“Sir, the pens you sell cannot write”.
“Is ink installed?” “Of course it is!”.
“Have you read the manual yet?” “No, I haven’t”.
“The instruction manual says if the pen does not write. Write again after throwing it for several times”. “But I did it!”. “What is the result?”
“The pen point lost”.
39
REMARK
Make quality become the spokesperson of the company. The highest state of sales is marketing without promotion. The product sells well without marketing or promotion, relying on well-established good reputation. Superior products cannot only improve the reputation of the company, but also can achieve the effect of propaganda through the satisfaction of customers.
40
(4.14)MANAGERIAL WISDOM: THREE DON’TS
DOCTRINE OF QUALITY CONTROL
Do not accept inferior product, do not manufacture inferior products and do not make inferior products circulated.
Remark
All employees make efforts to cooperate to control the quality and hold the successful future of the company. If the trust of consumers cannot be obtained, the company cannot exist for a long time.
41
2.3 DEVELOP EXCELLENT QUALITY MANAGEMENT SYSTEM
a)
Identify the characteristics of quality Establish quality standard Develop quality review program Use of quality measurement and report system Establish the commitment to quality by all employees
b)
c)
d)
e)
42
(4.15) MANAGERIAL WISDOM:
USE THE PRODUCTS OF YOUR OWN COMPANY
Customer: “Waitress, your dishes are difficult to eat.” Employee: “Really?” Customer: “You can let your boss have a try!” Employee: “Sorry, our boss is out. He comes to eat in the next restaurant!”
Remark
If
a company manufactures the products that you yourself or your employees do not use, how can the quality be good? How can the business thrive? If the executives of a car company or the employees do not use the cars manufactured by their own company, and the employees of home appliances company do not use the products of their own companies, then who will buy their products for use? God makes people a mouth and two ears which require people to listen more than speak.
43
SECTION 3. QUALITY COST
44
(4.16) MANAGERIAL WISDOM: COST OF EXTERNAL
FAILURE
A small problem is found when testing the first generation of Pentium invented by Intel in 1994. There will be a time of error rate for rounding off after operating for 9 billion times. The engineers point out that after Pentium is installed to every personal computer, such a trivial problem can occur once every 29,000 years. Later, when the news was reported, the consumers all demanded to return the goods, even if IBM terminate the contract requirements. Intel had no idea and was forced to solve this problem, and finally US$ 475 million (about 14 billion Taiwan dollars) were shared to suppress this problem of quality defects.
Remark Small mistakes may cost largely. The quality problem must be carefully handled.
45
Quality can be measured by money.
It is definitely not just the entirely imaginary philosophical thought.
According to the indications of research, the earnings of pursing quality are far over the invested costs. Quality cost can be divide into three categories: 1. Prevention cost 2. Appraisal cost 3. Failure cost
46
(4.17) MANAGERIAL WISDOM:
QUALITY CAN MAKE THE PRICE IMPROVED
The
flight fares from Taiwan to Singapore (during the annual holiday period of Lunar New Year in February of 1997), were quoted by travel agency at the end of October of 1996: EVA Airways was US$495 Singapore Airlines was US$ 480, and Royal Brunei Airlines was US$383
However,
even though EVA Airways ticket was the most expensive flight, all the tickets were sold out and no flight seat is available.
47
REMARK
At
that time, China Airlines had just suffered airplane crash while EVA Airways was highly praised due to its security and its service quality was also good.
Although
the journey was the same, and the used aircraft of Boeing 747 was also the same, and the costs were almost the same, the flight fares of EVA Airways was showed to sell with 30% price higher than that of Royal Brunei Airlines.
That
indicated that providing high quality can be affirmed and the affirmation of customers to ensure that the ability of the company to earn profits can be greatly increased.
48
3.1 Prevention Costs
About accounting 5 to 10% of the quality costs. It is including activity to strengthen the training of employees, design manufacturing process or approach with suppliers of raw materials to ensure to obtain the costs caused by raw materials with high quality. Only by spending a small amount of prevention costs, the costs can
be greatly reduced.
3.2 Appraisal Costs
About accounting 20 ~ 25% of quality costs Directly apprise all the expenses for the quality of the products manufactured by the enterprise, such as the costs used for quality inspected manpower and the equipment costs for instruments for 49 testing.
3.3 FAILURE COSTS
About accounting 65 ~ 75% of quality cost, and can be divided into two categories: a) Internal failure cost: defects are found by self-testing before the finished products leave the factory b) External failure costs: Shortcomings are found by customers
QUALITY COST
In tradition, the view of quality management is of high prevention and high appraisal costs and of high nonperforming rate with high modified failure costs. The enterprise must invest in prevention costs and appraisal costs because the failure costs brought by every shortcoming will make the enterprise pay a high price in the future.
50
(4.18) MANAGERIAL WISDOM: THE QUALITY
APPRAISAL OF PEOPLE IS THE MOST DIFFICULT
Bao Shuya carried on the business in combination with Guan Zhong. When splitting up the money, Guan Zhong always gave himself more money, but Bao Shuya considered that it was not because Guan Zhong was greedy but because of his poor family. When Guan Zhong arranged things for Bao Shuya and got worse, Bao Shuya did not believe that Guan Zhong was stupid, only saying that it was due to back luck. The two people went fighting, and Guan Zhong fought for three times as well as fled for three times. However Bao Shuya did not think that Guan Zhong was timid because Guan’s mother was still living.
51
(4.18) MANAGERIAL WISDOM CONT.
Even when Guan Zhong was arrested, Bao Shuya bailed him out and recommended him to King Qi Huangong, and made him prime minister. No wonder Si Maqian says, “The people in the world do not usually praise the talents of Guan Zhong, but most of them appreciate the knowing of the person by Bao Shuya.”
Remark
Sometimes the eyes of people are very strange because a good thing can be viewed as bad and a bad thing is viewed as good. Bao Shuya can view negative performance of Guan Zhong from the positive point of view because good friends mutually know the background and personality characteristics of others.
52
A. Traditional view of quality:
Suppose that minimizing the shortcomings will cause the rapid increase of costs, and then small shortcomings are allowed
B. Modern view of quality: Every shortcoming should pay a high price
High failure costs
costs
High prevention and Appraisal costs
high failure costs
costs
Appraisal cost Prevention cost
53
(4.19) MANAGERIAL WISDOM: COST FOR DRAWING
COCK
A king heard that there was an artist very good at drawing animals. One day, he with his attendants paid a visit to that artist. The king said, “I love cock very much, can you draw it for me?” The artist agreed. Three years later, the king suddenly remembered that artist and the cock to be painted, and then he visited that artist again. The king said, “Where is the painting I ordered?” The artist answered, “Your cock can be finished at once!” He took out the paper and pen, and soon a very charming and beautiful cock appeared. The king felt satisfied, but the price required by the artist was so expensive to surprise the king. The king said, “You just take little time and you almost effortlessly and easily drew the painting, but you required years such a high price!” The artist said, “I look effortless and simple, but I have spent three times to exercise continuously, so I can draw so fast and good, and the price is very fair!”
54
REMARK
High quality products cannot be generated in a short time. Quality is sustainable action. If you devote to the process, then the quality will certainly be reassured.
55
SECTION 4. SPECIFICATION AND STANDARD
56
(4.20) MANAGERIAL WISDOM : ACT IN ACCORDANCE WITH RULES (SPECIFICATIONS)
A very smart student doing well in study participated in an examination. When the examination papers were handed out, he skimmed over and found that there were together 50 true-false questions except that “Please read all the questions through before you begin to answer”, was written in the first line of the paper. He could finish this examination with his strength, so he picked up the pen and began to answer with confidence. Two minutes later, someone handed in the paper with smile. This student sniggered in mind, “A guy hands in the blank examination paper.” Another five minutes later, about seven or eight students handed in, also smiling. They did not seem to hand in the blank examination paper. This smart student speeded up and immersed himself in answering when he realized that he just finished over ten questions.
57
(4.20) MANAGERIAL WISDOM CONT.
When he replied to the thirtieth question, he impressively found that the question said, “The examination paper of this time is not required answering, you can get full marks only by marking your name and handing in. You will be deducted for one point as long as you answered for an additional question.” He was very skeptical and was about to raise his hand for asking questions to the examiner, only seeing that there were several examinees looking around and puzzled. The examiner smiled mysteriously, saying, “Look at the remark of the first line in your papers.” The smart student saw the remark of the first line in the paper. Please read all the questions through before you begin to answer. He could not help hating his rapidness for answering the questions.
58
REMARK
Handle step by step and the difficult problems can be solved easily. Act failing to follow the rules (SOP and specifications), is idealess even if making great efforts and having wisdom and talents. In the course of study and growing up, zero mentality is what we must have. Only when you empty out the dead water in your mind, can newly injected sweet spring water be accepted in the course of study.
If the dead water in your mind is not emptied out, how can the wine of wisdom be put into your mind?
59
SPECIFICATION
Specification refers to the accurate description of the products requiring procurement or the required conditions of services to serve as the standard of manufacturing and the basis for the acceptance of delivery. Specification is considered from the viewpoint of the supply of products, is manufacturing-oriented and to define the quality of product or service by the conformity with a standard.
60
(4.21)MANAGERIAL WISDOM: FOUR MAJOR QUALITY
THEORIES PUT FORWARD BY P. B. CROSBY
Four major quality theories put forward by P. B. Crosby: Quality is to up to the standard which must be clear and definite. It is strictly required to do it right for the first time.
The way to improve quality is prevention rather than inspection. The so-called prevention is to know the acting procedures in advance and know how to do. The only standard for work is zero defect rather than almost. Every employee should make self-examination and have a consciousness thoroughly, and make strict demands on his own work to be perfect without flaws.
61
(4.21)Managerial wisdom cont.
Measure the quality by the cost that product is not up to the standard, and then there are chances for improving quality greatly.
Remark
Specification refers to the product quality standard in production.
62
4.1 TRANSACTION SPECIFICATION
The following are the different transaction specifications of different products.
a)
b)
c) d) e)
Sample Standardization Brand Manual or catalogue Actual
63
(4.22) MANAGERIAL WISDOM: STANDARD IS BASIS
The airplane departure time was repeatedly delayed because of bad weather. A passenger became increasingly impatient. Later, it was announced to have another half-hour delay. Then he went to the counter of Airline Company, saying to one of the clerks, “Excuse me, what is your flight schedule used for?” That clerk answered without batting an eye, “Sir, there must be a basis for the time that flight delays!”
Remark Standard is basis, and specification is the basis of production.
64
4.2 THE ADVANTAGE OF ESTABLISHING A REASONABLE STANDARD
a)
b) c) d) e)
Provide the basis of correct transaction for the buyer and the seller. Facilitate cost accounting or provide quotation. Can expand to add the manufacturers for quotation. Prevent bad practices and eliminate opportunism. Promote the delivery to be smooth and successful.
65
4.3 DISADVANTAGES FOR NOT PROPERLY ESTABLISHING SPECIFICATIONS
a)
b)
c)
d)
e)
Suppliers raise the quoted price to share risks. The quality of goods expected by the buyer and the goods deliver may have great difference. It is difficult for fairness and equity when handling. When the subject matter is accepted, it is prone to be troubled. Affect the business progress, and often is the root cause of the drawbacks of bid rigging.
66
4.4 PURCHASING PROBLEM SPECIFICATION
a)
b)
c) d)
e)
The specification is over demanding, thus market supply is difficult or the cost is too high. The specification is not that definite, so the purchasing matters cannot be handled. The specification for purchasing is invalid. The specification in use does not conform to business practices. The specification itself has contradictions.
67
SECTION 5. INTERNATIONAL STANDARD
68
(4.23) MANAGERIAL WISDOM: GOOD QUALITY ARE
CONSTANT
Once, there was an examination that all topics were multiple-choice questions; therefore student A took a dice for the examination. Student B sat next to him. The following was the condition of the examination: Student A cast the dice, then the answers for the examination were 3, 1, 3, 4, 2, 1…, after he finished, he began to sleep. After a while, student A woke up and began to cast the dice again! Student B asked, “What are you doing?” Student A answered, “I am checking the answers!”
Remark Only with output of good quality can consistent and correct answers be provided.
69
INTERNATIONAL STANDARD REQUIREMENTS CAN BE CLASSIFIED INTO FOUR CATEGORIES:
1.
2.
3.
4.
Requirements for the management of production equipment and environment of manufacturing plants, as GMP and FGMP To conduct tests aiming at individual products meet the standards of the requirements, such as UL, CSA, DIN and JIS. Aims at the consistency of implementation and records (documents) at paper work, such as ISO 9000 series and CE mark. Aims at t key production process, such as HACCP.
70
(4.24) MANAGERIAL WISDOM: FULLY CARRY OUT
THE GIVEN DIRECTIVES
During Spring and Autumn Period, Shang Yang, Prime Minister at war Period in China on purpose placed a tree at the south gate of the city. A notice was put up to announce: “Fifty gold is awarded for the people who can remove this tree to the north gate”. Common people all suspected why so many rewards were given by doing a simple thing. Someone who curiously moved the tree to the north gate, then Shang Yang immediately awarded him fifty pieces of gold accordingly.
Remark
The directives must be carried out when ordered. Decree is the standard implemented by the company, and the dignity of decree standards must be established in the minds of employees, then people can obey the law.
71
5.1 ISO QUALITY INSPECTION SERIES
5.1.1 ISO introduction
International Standard Organization (ISO) established in 1994. Originally, the main purpose for its establishment is Quality Assurance (QA) of the product, but now shifts to Total Quality Management (TQM), aiming at establishing international certification standard of QM to replace standards of various countries.
5.1.2
Usage of ISO 9000 in various countries in the world
Since ISO promotes QM and QA standards aiming at manufacturing industry and service industry in 1987, it has been acknowledged and recognized by all countries in the world. In particular, all member countries of EU have expressly specified that all the products entering the EU territory must have ISO certification. Apparently ISO become of the standard of global quality management system certification.
72
5.1.3
ISO 14000 environmental protection management standard
There are two key points of environmental protection management standards of ISO 14000 series implemented by ISO: Enterprise environmental protection management system must comply with the local basic laws and regulations of the country or the region that the enterprise lies in. Sustainable improvement of the factors that caused the environmental impact must be given, and the extent of environmental impact is expected to be minimized.
73
(4.25) MANAGERIAL WISDOM: SAY WHAT YOU CAN
DO AND DO WHAT YOU HAVE SAID
Tseng Seng’s wife went to the town, and her little child chased her, crying. She lulled the child, saying, “You go back first, then I will kill a pig for eating when I come back soon.” When she came back from the city, Tseng Seng was about to catch the pig to kill. His wife tried to persuade him, “I just played a joke with the child!” Tseng Seng answered, “How can you play such a joke with the child? He is a green-ass. He learns everything from his parents and obeys the education of his parents. Today, if you deceive him, it means that you tell him not to believe you later. As a mother, you deceive your son, how can you educate your children in the future?” So Tseng Seng killed that pig to let his son enjoy a meal.
74
REMARK
The trust of a manager lies in “say what you can do and do what you have said”. It is the same for quality. Set reasonable standard first, and then thoroughly implement this standard. The spirit of ISO is “Write what you have done, do what you have written and make improvements”.
75
5.2 GOOD MANUFACTURING PRACTICE (GMP)
5.2.1 Evaluation of GMP
GMP is a kind of manufacturing and management system centering on Prevention
The basic purpose of GMP is 1. To strengthen the self-management system of people, 2. Improve food quality and sanitation, 3. Establish common brands 4. Improve the sound development of food industry in the whole.
76
5.2.2 Meaning of FGMP
FGMP system refers to QA system of manufacturing factory. FGMP not only covers the inspection of quality control, but also takes advantages of overall production and feedback of various data in input/output system to achieve the function of assuring high quality without producing inferior products. Therefore, the control to quality by FGMP is in accordance with three functions of: Prior control, a matter of control and subsequent control.
77
5.2.3 Managerial elements of food FGMP
a) b) c) d) e)
f)
Materials meeting the specification. Machines meeting the standards. Competent operation men. In accordance with the established methods. Reduce the man-made errors during the manufacturing process. Prevent food from pollution or quality deterioration during the manufacturing process.
g)
Establish a sound quality management system.
78
5.3 Chinese National Standard (CNS)
Under
this regulation, product is taken as the target and there are two elements for approval: a) The product is tested to meet national standards. b) Manufacture of this product must have faith in the company or conduct business registration, and the quality control of this factory is up to Class A.
5.4 Underwriters Laboratory (UL)
UL is an inspection organization established by American Association of Underwriters in 1894.
It is a non-profit organization, and the purpose is to assist with the manufacturers to provide safe products for the consumers. UL mark has become the safety mark of electric appliances in the U.S. market
79
5.5 DIN
There are 130 standard review committees set in Germany.
More than20, 000 kinds of existing standards which are divided into five parts:
1. 2. 3. 4. 5.
Documents and materials Engineering equipment and tools Contact projects Testing methods Projects
80
5.6 JAPANESE INDUSTRIAL STANDARD (JIS)
1. 2. 3. 4. 5. 6. 7. 8.
Civil construction; Textiles; Mining; Paper; Crockery; Commodities; Medical and security appliances; Aviation; Miscellaneous items.
9. 10. 11. 12. 13. 14. 15. 16.
Machinery; Electric; Bicycle; Railway; Ship; Iron and steel; Non-ferrous metals; Chemistry;
81
5.7 CONFORMITY EUROPEAN MARK, ABBREVIATION OF CE IN ENGLISH
It is the mark of products for Essential Safety Requirements (ESR) specified by EU. The main content is to maintain the basic safety of products sold in EU. If the products for testing do harm to the health or safety of consumers, manufacturers are ordered to withdraw or forbidden to display and sell.
82
(4.26) MANAGERIAL WISDOM: CONSIDERATION
BEYOND THE SPECIFICATION STANDARDS
During Ming Dynasty, there was a tailor enjoying a high reputation. The clothes sewed by him in person were all very fit for whoever be it fat or thin, high or short. Once the deputy prime minister asked him to sew his royal rob worn when he was at court.
The tailor nimbly measured his height, waist circumference and other various sizes, then asked, “Excuse me, officer, how many years have you worked as an official?” The deputy prime minister sounded and felt strange, asked him, “It is enough for you to measure the size and tailor the clothes. What do you mean by asking these?”
83
(4.26) MANAGERIAL WISDOM CONT.
The tailor answered, “If young men hold at high position, they will have a high spirit and are pound. When walking, they make their chins up and chests out, so the clothe to be sew should be shorter at the back and longer in the front. If you are more than ten or twenty years, your arrogance will be pinched and you seem to be mild, then the front side and back side of the clothe should be of the same length. When you hold the position for years and are about to retire, you will feel depressed, then you will bow your heads and bend over when walking, then the clothe should be shorter at the front side and longer at the back side. So, if I do not find out the time for you at position, how could I sew the cloth fit for you?”
84
REMARK
It seems that the time of tenure of the office has nothing to do with the tailoring of the clothes;
however, an excellent tailor should take the tenure of office as an the important reference for measuring the size and tailoring the clothes.
Consideration of anything should include the impacts produced by other various kinds of interrelations as well as the limit of its own nature.
85
END OF CHAPTER 4 …
86
1
CHAPTER CONTENTS
Section 1. Definition Of Quality And Factors Affecting The Quality
Section 2. Implementation Of Quality Management
Section 3. Quality Cost Section 4. Specifications And Standards Section 5. International Standards
2
(4.1)MANAGERIAL WISDOM: VALUE OF QUALITY
A speaker
took out of a banknote US$100 in his speech and said to the audience, “Anyone want the US$100?” Immediately a pile of people raised their hands. Then he wrinkled the banknote, asking, “Anyone still want this banknote?” Still, a pile of people raised their hands. Next he threw the banknote to the ground, stepped and stamped this banknote with his shoes, and then picked up, saying, “Now, this banknote is wrinkled and dirty, anyone still want it?” As a result, many people still raised their hands. Finally, he tear the banknote into four pieces, and asked, “Now this banknote is wrinkled ,dirty and incomplete, now anyone of you still want it?” The result was still the same many people want this banknote.
3
REMARK
When young, one should establish and recognize self-worth.
True
gold does not fear Fire.
You should not fear the original value will be damaged even if suffering from the temporarily setbacks or misunderstanding.
If products with deeply rooted value do not sell well at a time, you must continue to improve and increase the value of products. The products finally can win the customers interest.
4
QUALITY
Quality is the sole thing available to customers by enterprises. Only customers can evaluate the quality of products and services provided by enterprises. Quality is also the only thing to maintain the competitiveness of the company and to satisfy the customers, because manufacture cost for superior and inferior products are almost the same;
while superior product can bring benefits to the company and inferior products only waste the sources of the company.
5
SECTION 1. DEFINITION OF QUALITY AND FACTORS AFFECTING THE QUALITY
6
(4.2)MANAGERIAL WISDOM: IF YOU WANT EVERYONE
SATISFIED, THEN EVERYONE WILL BECOME DISSATISFIED
A father and his son hurried on with their journey pulling a donkey. Some passers-by sneered at them, “Look at the two fools, they do not use the available animal to replace their walk!” Then the father ridded on the donkey. Some other pedestrians argued them again, “This old man shall not know care about the child, he rides on the donkey but let his son walk!” So the father let his son to ride on the donkey. But there are other passers-by criticized, “This child actually makes the old man walk while he himself rides on the donkey! A pity son!” Therefore, the father and the son together rid on the donkey.
7
(4.2)Managerial wisdom cont.
Some others again were very surprised, saying, “The two people ride on such a thin donkey. They are actually cruel to animal!” Then, the father and the son stopped to examine and made a new decision that they would tie the donkey well and carried the donkey going head.
Remark
If you want to satisfy everyone, then everyone will become dissatisfied including yourself. We should consider, select and think over before selecting the right (the object requires satisfaction) and acting. It is impossible to make all people satisfied.
8
1.1 MEANING OF QUALITY
1.1.1 Define quality on the basis of customers
a. Customers Customers can be divided into :
External customers refer to consumers, who buy the products or service of the company with money. Internal customers take the next process or downstream as customers.
9
b. Need
What kind of products or service do the customers require? Need decides the survival of the company. If the customers do not need, or the supplied products or service are not required by customers, then the company cannot survive. Need of customers can be replaced by hope, wish, dream, ideal, interest, love, like, pursuit wants, demand, drive force, expectation, insufficient, deficit of the clients.
10
(4.3) MANAGERIAL WISDOM : CUSTOMER –
ORIENTATION
Computer giant IBM hit the records of the global most profitable enterprises for many times in the 80s, but it totally lost over 8 billion US dollars within the two years of 1993 and 1994 which became the highest loss-making company in America even in the whole World. However, it actually restructured and reshaped itself within the next two years to create a brilliant performance. Gerstner, chairman and chief executive officer, knows that the reason for IBM to loss and suffering from setback is the boss. Bureaucratic corporate culture which cannot meet the needs of customers.
11
(4.3) MANAGERIAL WISDOM
For this point, everyday he always thinks and implements how to communicate with customers. How to resume contending for the time? With monthly standby corporate culture, meet the needs of customers and assist them to solve problems and earn more money. Finally, with the excellent leadership of Gerstner, IBM neither used any high technology nor did any marketing hoky-poky, let alone engaging in competition with price fighting, IBM regained the corporate philosophy centering on customers, giving priority to customers and of customer-orientation, which made IBM re-started and restructured to become Big Blue.
12
REMARK
Carnegie said, “I like strawberries while fish likes earthworms, so when I am fishing, I use earthworms as lure instead of strawberries.” The reason why IBM could re-start and stood up was because Gerstner found the boss bureaucratic corporate culture resulting in the failure of IBM. She modified it aiming at this point, and corrected the IBM’s business philosophy to be customer-oriented. Through which IBM raised from the dead and once again became the business giant. Management is to satisfy my (one’s own, family, corporate and organization) needs while sale is to meet the needs of him (customers, consumers and others).
13
c. Satisfaction
How to satisfy the needs of customers:
1.
2.
3.
4.
5.
First is to identify the criteria for meeting the needs of customers. Take the satisfaction of customers as criterion to determine products or service. Make sure that the employees know the operation procedures or processes Finish every step and form the habit of “do it right first time”, and Finally let quality speak for the company.
14
(4.4)MANAGERIAL WISDOM: PROCESS IS MUCH
MORE BETTER THAN RESULT
When the United States lost the Vietnam War and American corps participating in the war came back, they received the national hero-style warm welcome.
Remark
The participatory process is often more important then the result because the result is only a point while the process is the entire line. If there is any problem arising during the process, the result cannot be perfect. If there is no problem for every point during the process, the result will be perfect.
15
1.1.2 DEFINE QUALITY BASED ON COMPETITIVENESS (DAVID GARVIN)
1. 2. 3.
Define on the basis of product manufacturing Define based on product design Define based on users
16
(4.5) MANAGERIAL WISDOM: QUALITY IS SUITABLE
FOR CUSTOMERS TO USE
Alexander Lin: Quality is the product of service satisfying the needs of customers. Crosby : Quality is the standard to meet the requirements. V. Feigenbanum: Quality is the product satisfied the customers. Ishikawa: Quality is a kind of characteristic which can make consumers or users satisfied and willing to buy. Deming: Quality is to manufacture the most useful products in the market with a most economic means.
Qiu Lan: Quality is a kind of fitness for use which can make products meet the needs of users during the use period.
17
(4.5) MANAGERIAL WISDOM CONT.
Davis: The purpose of quality is to reach or even exceed the expectations
of customers. Jack Welch : Quality is the best guarantee to make us and customers of the same kind, is the most advantageous weapon for defending the invasion of foreign competitors, and is the only way to ensure the sustainable survival and development of the company.
Remark
Every quality control master has different definitions of quality. However, the operators serving in the business community are willing to ask, “Do you want to spend money buying what you have produced or sold? Do you now use the products of your own company?” 18
1.1.3 QUALITY DEFINITION BASED ON THE
PRACTICAL APPLICATION
1.
2.
3. 4. 5. 6. 7. 8.
Functions Features Service Service life Aesthetic feeling Conformity Steady security Proverbial quality
19
(4.6)MANAGERIAL WISDOM: BAD NEWS IS THE GOLD MINE
OF INFORMATION
According to the research survey conducted by Ford, if one buys a new car and feels very well, then he will share with six to seven people. But if not satisfied, he will complain to twenty-one of his friends and relatives
Remark
Poor
quality makes reputation dwindled impaired, then the business will be affected and the future survival and competitiveness will certainly be hit. Establish the view of customers’ complaints are the gold mine, then the company has the opportunity to correct shortcomings or errors. Then the complaints of customers can transferred to the source for the company to improve competitiveness, and the praises of customers can be transferred to the drive power of the warm and sincere service.
20
(4.6)MANAGERIAL WISDOM:
BAD NEWS IS THE GOLD MINE OF INFORMATION
According
to the research survey conducted by Ford, if one buys a new car and feels very well, then he will share with six to seven people. But if he is not satisfied, he will complain to twenty-one of his friends and relatives.
Remark
Poor
quality makes reputation dwindled impaired, then the business will be affected and the future survival and competitiveness will certainly be hit. Establish the view of customers’ complaints are the gold mine, then the company has the opportunity to correct shortcomings or errors. Then the complaints of customers can transferred to the source for the company to improve competitiveness, and the praises of customers can be transferred to the drive power of the warm and sincere service.
21
1.2 Factors Affecting Quality 1. Grasp the information 2. Company policy 3. Engineering and design capability 4. Raw materials 5. Machinery and equipment 6. Production workers 7. Support of on-site sales
22
(4.7) MANAGERIAL WISDOM: MASTERING
INFORMATION AND PHILOSOPHY OF BEING SECOND
Y.I Kiu, general manager of Daheisong Corporation , says, “One must learn Octopus Philosophy and Philosophy of Being Second.” Octopus Philosophy is a concept of doing business or innovation. It is best just like the octopus as eight legs which can search information everywhere. The basic requirement of Philosophy of being second is one must not have the air of superiority and should be open-minded.
Remark
The breadth of mind of entrepreneurs shows his achievement. The accommodation of your heart means the breadth of your future path. The boss must always remind himself to make octopus as teacher to master the information in faith and quickly.
23
(4.8) Managerial wisdom: Poor management
quality
Edwards
Deming points out that 85% of quality control responsibilities lie in poor management.
Remark
Make sure that the poor management behavior must be eliminated.
If a leader sets a bad example, it will be followed by his subordinates.
24
SECTION 2. IMPLEMENTATION OF QUALITY MANAGEMENT
25
(4.9) MANAGERIAL WISDOM : THE DIFFERENCE
BETWEEN SUCCESS AND FAILURE DUE THE IMPLEMENTATION OF QUALITY
There is a bakery called Kimura House in Ginza which is the most prosperous place in Tokyo of Japan. It has made a very unique kind of sandwich bread as early as 1898.It has always maintained the unique flavor for over one hundred years. Managers of successive generations of Kimura House have always adhere to a style, that is, the manager must taste a sandwich bread in person every morning. In order to taste the unique flavor of their own products and not to make the flavor changed, managers must keep their tongue healthy and the whole body healthy. Excessive eating or drinking and addicted to drinking must be not allowed.
26
Remark
The quality of product is not good, then the company will lose a large number of customers, which is a great loss and crisis for the company. The self-confidence of managers must base on the quality of product and healthy body
27
2.1 QUALITY CONTROL CIRCLE (QCC) ACTIVITY
2.1.1 Significance
In order to achieve the objective of quality management and the improvement of management, the factory organizes the workers of various departments inside the factory into groups to be a circle according to the relevance of the nature of their work, and the length of each circle is set.
2.1.2 Connotation of practical action of QCC
a) b) c)
d)
Participation in management Take initiative to cooperate Human management Objective management
28
(4.10) MANAGERIAL WISDOM: MUCH MORE
PROFIT AND GOOD SALES
Most people always think that small profits and good sales can make profits pouring in from all sides. However the quality of a product is often ignored due to little profits. There are still some companies adhering to much more profits and good sales German Mercedes-Benz Motor Co has manufactured the first motorcycle (bicycle with motor) and automobile (the first horse carriage without horses) in the world is one of these companies. The huge profits adhered by Mercedes-Benz is to take the way of improving quality and limiting production and to set about the technical expertise and strict quality management. Due to the persistence in high quality, win the trust of the market so that the performance does not drop for a long time. Therefore, although the annual output of Mercedes-Benz is 700,000 cars, which is far less than the cars produced by US GM, Ford or Toyota Auto of Japan more than 8 million cars, the profits of it cannot be compared by other companies.
29
REMARK
The demands of customers have been always changing, but there is a constant rule: they hope to get the products with best quality with a minimum price.
Based on this concept, everyone in the enterprise must take the quality as the most important responsibility.
The simplest way for the superior quality is that every employee has the ideas and practice of quality control employees who do their work well as well as take the responsibilities and do not allow any middle processed product that does not meet the quality requirements during the process of manufacturing. This kind of idea can be thoroughly instilled into every employee so that the quality of the products of the company can become perfect.
30
2.2 QUALITY MANAGEMENT SYSTEM
a) b) c) d) e)
Quality Inspection (QI) Quality Control (QC) Quality Assurance (QA) Total Quality Control (TQC) Total Quality Management (TQM) or Total Quality Assurance (TQA)
31
Table 4.1. Development stages of quality management system
Age
1900s – 1920s
Historical view of quality
1.Quality control of operators 2. Quality control of foremen 3. Quality control of inspectors Statistical quality control
View point of quality
Quality from finally inspected products at the end of production line to separate the good and bad
System view of quality
QI
1940s
Quality is from manufactured products during the production process and the process is the key. Quality is from design
QC
1950s
Quality assurance
QA
1960s
Total quality control
Quality is sound by management Quality is from culture and habits
TQC
After the 1980s
Total quality management
TQA
32
(4.11) MANAGERIAL WISDOM: FOLLOW-UP PROCESS
IS THE CUSTOMER
Quality management is only a measure rather than an entity. No matter how the quality control personnel strive to implement the final product inspection, the quality of a product cannot be improved by itself. It is the view that the production workers must have follow-up process and take the responsibility of quality control to improve the quality. Remark The quality can be improved by improving the implementation process of manufacturing rather than carrying out the quality management at the end of production line. The view of customer is to have follow-up.
33
A) Quality Inspection (QI)
The traditional quality views believe that the quality is inspected. Quality inspectors are arranged before shipment or at the end of product line. Only good products can be shipped, and inferior products can be shipped only after repaired and inspected to be superior products.
B) Quality Control (QC) It is believes that quality is achieved by manufacturing. Process is the key and it is expected to do it right first time (DIRFT). Statistical Control Chart is the basis for statistical quality management activities The main purpose of making Statistic Control Chart is to judge the changes during the process in according to the trend of various control points on the statistical control chart.
34
C) Quality Assurance (QA)
It is believe that before the product of good quality is manufactured, the needs of consumers must be known, then good design is required. If the design is not good, then the products meeting the needs of customers or of so-called good quality cannot be produced no matter how the efforts are made.
D) Total Quality Control (TQC)
TQC is also called Companywide Quality Control (CWQC), and its purpose aims at achieving the continuous improvement of quality and providing more and better products for customers. TQC emphasizes the internal accounting system, research and development, and manufacturing process to the external promotional activities. Quality improvement becomes a habit through continuous activities
35
36
(4.12) MANAGERIAL WISDOM: A
BIG LOSS
SMALL MISS IS A
When shooters targets at the objective, everyone wants to shot in the objective, but for the shooting performance, very few people get full marks. Why? Because at the moment of shooting, as long as the angle of gun has difference of 0.1 degree, the difference for the shooting point of the objective of 100 meters will be about 1 meter. The difference for the shooting of cannon will be larger. As long as the elevation difference has 0.1 degree, then the shooting point will have difference for 1 kilometer. Remark A small miss is as large as a mile. The implementation of quality management is to master the precision during the process of manufacturing, then defect rate will be greatly reduced and the ability of profits can be greatly increased.
37
E) Total Quality Management (TQM) or Total Quality Assurance (TQA)
Edward Deming believes that the philosophy of TQC takes the following five steps as basis:
1. 2.
3.
4. 5.
Enhancing the quality means to reduce the cost. The results can results in the improvement of efficiency. Better quality can lead to higher market share due to good reputation. Thus improve the profitability of the enterprise. And further the enterprise can create more job opportunities.
38
(4.13) MANAGERIAL WISDOM: LET QUALITY SPEAK
FOR YOU
“Sir, the pens you sell cannot write”.
“Is ink installed?” “Of course it is!”.
“Have you read the manual yet?” “No, I haven’t”.
“The instruction manual says if the pen does not write. Write again after throwing it for several times”. “But I did it!”. “What is the result?”
“The pen point lost”.
39
REMARK
Make quality become the spokesperson of the company. The highest state of sales is marketing without promotion. The product sells well without marketing or promotion, relying on well-established good reputation. Superior products cannot only improve the reputation of the company, but also can achieve the effect of propaganda through the satisfaction of customers.
40
(4.14)MANAGERIAL WISDOM: THREE DON’TS
DOCTRINE OF QUALITY CONTROL
Do not accept inferior product, do not manufacture inferior products and do not make inferior products circulated.
Remark
All employees make efforts to cooperate to control the quality and hold the successful future of the company. If the trust of consumers cannot be obtained, the company cannot exist for a long time.
41
2.3 DEVELOP EXCELLENT QUALITY MANAGEMENT SYSTEM
a)
Identify the characteristics of quality Establish quality standard Develop quality review program Use of quality measurement and report system Establish the commitment to quality by all employees
b)
c)
d)
e)
42
(4.15) MANAGERIAL WISDOM:
USE THE PRODUCTS OF YOUR OWN COMPANY
Customer: “Waitress, your dishes are difficult to eat.” Employee: “Really?” Customer: “You can let your boss have a try!” Employee: “Sorry, our boss is out. He comes to eat in the next restaurant!”
Remark
If
a company manufactures the products that you yourself or your employees do not use, how can the quality be good? How can the business thrive? If the executives of a car company or the employees do not use the cars manufactured by their own company, and the employees of home appliances company do not use the products of their own companies, then who will buy their products for use? God makes people a mouth and two ears which require people to listen more than speak.
43
SECTION 3. QUALITY COST
44
(4.16) MANAGERIAL WISDOM: COST OF EXTERNAL
FAILURE
A small problem is found when testing the first generation of Pentium invented by Intel in 1994. There will be a time of error rate for rounding off after operating for 9 billion times. The engineers point out that after Pentium is installed to every personal computer, such a trivial problem can occur once every 29,000 years. Later, when the news was reported, the consumers all demanded to return the goods, even if IBM terminate the contract requirements. Intel had no idea and was forced to solve this problem, and finally US$ 475 million (about 14 billion Taiwan dollars) were shared to suppress this problem of quality defects.
Remark Small mistakes may cost largely. The quality problem must be carefully handled.
45
Quality can be measured by money.
It is definitely not just the entirely imaginary philosophical thought.
According to the indications of research, the earnings of pursing quality are far over the invested costs. Quality cost can be divide into three categories: 1. Prevention cost 2. Appraisal cost 3. Failure cost
46
(4.17) MANAGERIAL WISDOM:
QUALITY CAN MAKE THE PRICE IMPROVED
The
flight fares from Taiwan to Singapore (during the annual holiday period of Lunar New Year in February of 1997), were quoted by travel agency at the end of October of 1996: EVA Airways was US$495 Singapore Airlines was US$ 480, and Royal Brunei Airlines was US$383
However,
even though EVA Airways ticket was the most expensive flight, all the tickets were sold out and no flight seat is available.
47
REMARK
At
that time, China Airlines had just suffered airplane crash while EVA Airways was highly praised due to its security and its service quality was also good.
Although
the journey was the same, and the used aircraft of Boeing 747 was also the same, and the costs were almost the same, the flight fares of EVA Airways was showed to sell with 30% price higher than that of Royal Brunei Airlines.
That
indicated that providing high quality can be affirmed and the affirmation of customers to ensure that the ability of the company to earn profits can be greatly increased.
48
3.1 Prevention Costs
About accounting 5 to 10% of the quality costs. It is including activity to strengthen the training of employees, design manufacturing process or approach with suppliers of raw materials to ensure to obtain the costs caused by raw materials with high quality. Only by spending a small amount of prevention costs, the costs can
be greatly reduced.
3.2 Appraisal Costs
About accounting 20 ~ 25% of quality costs Directly apprise all the expenses for the quality of the products manufactured by the enterprise, such as the costs used for quality inspected manpower and the equipment costs for instruments for 49 testing.
3.3 FAILURE COSTS
About accounting 65 ~ 75% of quality cost, and can be divided into two categories: a) Internal failure cost: defects are found by self-testing before the finished products leave the factory b) External failure costs: Shortcomings are found by customers
QUALITY COST
In tradition, the view of quality management is of high prevention and high appraisal costs and of high nonperforming rate with high modified failure costs. The enterprise must invest in prevention costs and appraisal costs because the failure costs brought by every shortcoming will make the enterprise pay a high price in the future.
50
(4.18) MANAGERIAL WISDOM: THE QUALITY
APPRAISAL OF PEOPLE IS THE MOST DIFFICULT
Bao Shuya carried on the business in combination with Guan Zhong. When splitting up the money, Guan Zhong always gave himself more money, but Bao Shuya considered that it was not because Guan Zhong was greedy but because of his poor family. When Guan Zhong arranged things for Bao Shuya and got worse, Bao Shuya did not believe that Guan Zhong was stupid, only saying that it was due to back luck. The two people went fighting, and Guan Zhong fought for three times as well as fled for three times. However Bao Shuya did not think that Guan Zhong was timid because Guan’s mother was still living.
51
(4.18) MANAGERIAL WISDOM CONT.
Even when Guan Zhong was arrested, Bao Shuya bailed him out and recommended him to King Qi Huangong, and made him prime minister. No wonder Si Maqian says, “The people in the world do not usually praise the talents of Guan Zhong, but most of them appreciate the knowing of the person by Bao Shuya.”
Remark
Sometimes the eyes of people are very strange because a good thing can be viewed as bad and a bad thing is viewed as good. Bao Shuya can view negative performance of Guan Zhong from the positive point of view because good friends mutually know the background and personality characteristics of others.
52
A. Traditional view of quality:
Suppose that minimizing the shortcomings will cause the rapid increase of costs, and then small shortcomings are allowed
B. Modern view of quality: Every shortcoming should pay a high price
High failure costs
costs
High prevention and Appraisal costs
high failure costs
costs
Appraisal cost Prevention cost
53
(4.19) MANAGERIAL WISDOM: COST FOR DRAWING
COCK
A king heard that there was an artist very good at drawing animals. One day, he with his attendants paid a visit to that artist. The king said, “I love cock very much, can you draw it for me?” The artist agreed. Three years later, the king suddenly remembered that artist and the cock to be painted, and then he visited that artist again. The king said, “Where is the painting I ordered?” The artist answered, “Your cock can be finished at once!” He took out the paper and pen, and soon a very charming and beautiful cock appeared. The king felt satisfied, but the price required by the artist was so expensive to surprise the king. The king said, “You just take little time and you almost effortlessly and easily drew the painting, but you required years such a high price!” The artist said, “I look effortless and simple, but I have spent three times to exercise continuously, so I can draw so fast and good, and the price is very fair!”
54
REMARK
High quality products cannot be generated in a short time. Quality is sustainable action. If you devote to the process, then the quality will certainly be reassured.
55
SECTION 4. SPECIFICATION AND STANDARD
56
(4.20) MANAGERIAL WISDOM : ACT IN ACCORDANCE WITH RULES (SPECIFICATIONS)
A very smart student doing well in study participated in an examination. When the examination papers were handed out, he skimmed over and found that there were together 50 true-false questions except that “Please read all the questions through before you begin to answer”, was written in the first line of the paper. He could finish this examination with his strength, so he picked up the pen and began to answer with confidence. Two minutes later, someone handed in the paper with smile. This student sniggered in mind, “A guy hands in the blank examination paper.” Another five minutes later, about seven or eight students handed in, also smiling. They did not seem to hand in the blank examination paper. This smart student speeded up and immersed himself in answering when he realized that he just finished over ten questions.
57
(4.20) MANAGERIAL WISDOM CONT.
When he replied to the thirtieth question, he impressively found that the question said, “The examination paper of this time is not required answering, you can get full marks only by marking your name and handing in. You will be deducted for one point as long as you answered for an additional question.” He was very skeptical and was about to raise his hand for asking questions to the examiner, only seeing that there were several examinees looking around and puzzled. The examiner smiled mysteriously, saying, “Look at the remark of the first line in your papers.” The smart student saw the remark of the first line in the paper. Please read all the questions through before you begin to answer. He could not help hating his rapidness for answering the questions.
58
REMARK
Handle step by step and the difficult problems can be solved easily. Act failing to follow the rules (SOP and specifications), is idealess even if making great efforts and having wisdom and talents. In the course of study and growing up, zero mentality is what we must have. Only when you empty out the dead water in your mind, can newly injected sweet spring water be accepted in the course of study.
If the dead water in your mind is not emptied out, how can the wine of wisdom be put into your mind?
59
SPECIFICATION
Specification refers to the accurate description of the products requiring procurement or the required conditions of services to serve as the standard of manufacturing and the basis for the acceptance of delivery. Specification is considered from the viewpoint of the supply of products, is manufacturing-oriented and to define the quality of product or service by the conformity with a standard.
60
(4.21)MANAGERIAL WISDOM: FOUR MAJOR QUALITY
THEORIES PUT FORWARD BY P. B. CROSBY
Four major quality theories put forward by P. B. Crosby: Quality is to up to the standard which must be clear and definite. It is strictly required to do it right for the first time.
The way to improve quality is prevention rather than inspection. The so-called prevention is to know the acting procedures in advance and know how to do. The only standard for work is zero defect rather than almost. Every employee should make self-examination and have a consciousness thoroughly, and make strict demands on his own work to be perfect without flaws.
61
(4.21)Managerial wisdom cont.
Measure the quality by the cost that product is not up to the standard, and then there are chances for improving quality greatly.
Remark
Specification refers to the product quality standard in production.
62
4.1 TRANSACTION SPECIFICATION
The following are the different transaction specifications of different products.
a)
b)
c) d) e)
Sample Standardization Brand Manual or catalogue Actual
63
(4.22) MANAGERIAL WISDOM: STANDARD IS BASIS
The airplane departure time was repeatedly delayed because of bad weather. A passenger became increasingly impatient. Later, it was announced to have another half-hour delay. Then he went to the counter of Airline Company, saying to one of the clerks, “Excuse me, what is your flight schedule used for?” That clerk answered without batting an eye, “Sir, there must be a basis for the time that flight delays!”
Remark Standard is basis, and specification is the basis of production.
64
4.2 THE ADVANTAGE OF ESTABLISHING A REASONABLE STANDARD
a)
b) c) d) e)
Provide the basis of correct transaction for the buyer and the seller. Facilitate cost accounting or provide quotation. Can expand to add the manufacturers for quotation. Prevent bad practices and eliminate opportunism. Promote the delivery to be smooth and successful.
65
4.3 DISADVANTAGES FOR NOT PROPERLY ESTABLISHING SPECIFICATIONS
a)
b)
c)
d)
e)
Suppliers raise the quoted price to share risks. The quality of goods expected by the buyer and the goods deliver may have great difference. It is difficult for fairness and equity when handling. When the subject matter is accepted, it is prone to be troubled. Affect the business progress, and often is the root cause of the drawbacks of bid rigging.
66
4.4 PURCHASING PROBLEM SPECIFICATION
a)
b)
c) d)
e)
The specification is over demanding, thus market supply is difficult or the cost is too high. The specification is not that definite, so the purchasing matters cannot be handled. The specification for purchasing is invalid. The specification in use does not conform to business practices. The specification itself has contradictions.
67
SECTION 5. INTERNATIONAL STANDARD
68
(4.23) MANAGERIAL WISDOM: GOOD QUALITY ARE
CONSTANT
Once, there was an examination that all topics were multiple-choice questions; therefore student A took a dice for the examination. Student B sat next to him. The following was the condition of the examination: Student A cast the dice, then the answers for the examination were 3, 1, 3, 4, 2, 1…, after he finished, he began to sleep. After a while, student A woke up and began to cast the dice again! Student B asked, “What are you doing?” Student A answered, “I am checking the answers!”
Remark Only with output of good quality can consistent and correct answers be provided.
69
INTERNATIONAL STANDARD REQUIREMENTS CAN BE CLASSIFIED INTO FOUR CATEGORIES:
1.
2.
3.
4.
Requirements for the management of production equipment and environment of manufacturing plants, as GMP and FGMP To conduct tests aiming at individual products meet the standards of the requirements, such as UL, CSA, DIN and JIS. Aims at the consistency of implementation and records (documents) at paper work, such as ISO 9000 series and CE mark. Aims at t key production process, such as HACCP.
70
(4.24) MANAGERIAL WISDOM: FULLY CARRY OUT
THE GIVEN DIRECTIVES
During Spring and Autumn Period, Shang Yang, Prime Minister at war Period in China on purpose placed a tree at the south gate of the city. A notice was put up to announce: “Fifty gold is awarded for the people who can remove this tree to the north gate”. Common people all suspected why so many rewards were given by doing a simple thing. Someone who curiously moved the tree to the north gate, then Shang Yang immediately awarded him fifty pieces of gold accordingly.
Remark
The directives must be carried out when ordered. Decree is the standard implemented by the company, and the dignity of decree standards must be established in the minds of employees, then people can obey the law.
71
5.1 ISO QUALITY INSPECTION SERIES
5.1.1 ISO introduction
International Standard Organization (ISO) established in 1994. Originally, the main purpose for its establishment is Quality Assurance (QA) of the product, but now shifts to Total Quality Management (TQM), aiming at establishing international certification standard of QM to replace standards of various countries.
5.1.2
Usage of ISO 9000 in various countries in the world
Since ISO promotes QM and QA standards aiming at manufacturing industry and service industry in 1987, it has been acknowledged and recognized by all countries in the world. In particular, all member countries of EU have expressly specified that all the products entering the EU territory must have ISO certification. Apparently ISO become of the standard of global quality management system certification.
72
5.1.3
ISO 14000 environmental protection management standard
There are two key points of environmental protection management standards of ISO 14000 series implemented by ISO: Enterprise environmental protection management system must comply with the local basic laws and regulations of the country or the region that the enterprise lies in. Sustainable improvement of the factors that caused the environmental impact must be given, and the extent of environmental impact is expected to be minimized.
73
(4.25) MANAGERIAL WISDOM: SAY WHAT YOU CAN
DO AND DO WHAT YOU HAVE SAID
Tseng Seng’s wife went to the town, and her little child chased her, crying. She lulled the child, saying, “You go back first, then I will kill a pig for eating when I come back soon.” When she came back from the city, Tseng Seng was about to catch the pig to kill. His wife tried to persuade him, “I just played a joke with the child!” Tseng Seng answered, “How can you play such a joke with the child? He is a green-ass. He learns everything from his parents and obeys the education of his parents. Today, if you deceive him, it means that you tell him not to believe you later. As a mother, you deceive your son, how can you educate your children in the future?” So Tseng Seng killed that pig to let his son enjoy a meal.
74
REMARK
The trust of a manager lies in “say what you can do and do what you have said”. It is the same for quality. Set reasonable standard first, and then thoroughly implement this standard. The spirit of ISO is “Write what you have done, do what you have written and make improvements”.
75
5.2 GOOD MANUFACTURING PRACTICE (GMP)
5.2.1 Evaluation of GMP
GMP is a kind of manufacturing and management system centering on Prevention
The basic purpose of GMP is 1. To strengthen the self-management system of people, 2. Improve food quality and sanitation, 3. Establish common brands 4. Improve the sound development of food industry in the whole.
76
5.2.2 Meaning of FGMP
FGMP system refers to QA system of manufacturing factory. FGMP not only covers the inspection of quality control, but also takes advantages of overall production and feedback of various data in input/output system to achieve the function of assuring high quality without producing inferior products. Therefore, the control to quality by FGMP is in accordance with three functions of: Prior control, a matter of control and subsequent control.
77
5.2.3 Managerial elements of food FGMP
a) b) c) d) e)
f)
Materials meeting the specification. Machines meeting the standards. Competent operation men. In accordance with the established methods. Reduce the man-made errors during the manufacturing process. Prevent food from pollution or quality deterioration during the manufacturing process.
g)
Establish a sound quality management system.
78
5.3 Chinese National Standard (CNS)
Under
this regulation, product is taken as the target and there are two elements for approval: a) The product is tested to meet national standards. b) Manufacture of this product must have faith in the company or conduct business registration, and the quality control of this factory is up to Class A.
5.4 Underwriters Laboratory (UL)
UL is an inspection organization established by American Association of Underwriters in 1894.
It is a non-profit organization, and the purpose is to assist with the manufacturers to provide safe products for the consumers. UL mark has become the safety mark of electric appliances in the U.S. market
79
5.5 DIN
There are 130 standard review committees set in Germany.
More than20, 000 kinds of existing standards which are divided into five parts:
1. 2. 3. 4. 5.
Documents and materials Engineering equipment and tools Contact projects Testing methods Projects
80
5.6 JAPANESE INDUSTRIAL STANDARD (JIS)
1. 2. 3. 4. 5. 6. 7. 8.
Civil construction; Textiles; Mining; Paper; Crockery; Commodities; Medical and security appliances; Aviation; Miscellaneous items.
9. 10. 11. 12. 13. 14. 15. 16.
Machinery; Electric; Bicycle; Railway; Ship; Iron and steel; Non-ferrous metals; Chemistry;
81
5.7 CONFORMITY EUROPEAN MARK, ABBREVIATION OF CE IN ENGLISH
It is the mark of products for Essential Safety Requirements (ESR) specified by EU. The main content is to maintain the basic safety of products sold in EU. If the products for testing do harm to the health or safety of consumers, manufacturers are ordered to withdraw or forbidden to display and sell.
82
(4.26) MANAGERIAL WISDOM: CONSIDERATION
BEYOND THE SPECIFICATION STANDARDS
During Ming Dynasty, there was a tailor enjoying a high reputation. The clothes sewed by him in person were all very fit for whoever be it fat or thin, high or short. Once the deputy prime minister asked him to sew his royal rob worn when he was at court.
The tailor nimbly measured his height, waist circumference and other various sizes, then asked, “Excuse me, officer, how many years have you worked as an official?” The deputy prime minister sounded and felt strange, asked him, “It is enough for you to measure the size and tailor the clothes. What do you mean by asking these?”
83
(4.26) MANAGERIAL WISDOM CONT.
The tailor answered, “If young men hold at high position, they will have a high spirit and are pound. When walking, they make their chins up and chests out, so the clothe to be sew should be shorter at the back and longer in the front. If you are more than ten or twenty years, your arrogance will be pinched and you seem to be mild, then the front side and back side of the clothe should be of the same length. When you hold the position for years and are about to retire, you will feel depressed, then you will bow your heads and bend over when walking, then the clothe should be shorter at the front side and longer at the back side. So, if I do not find out the time for you at position, how could I sew the cloth fit for you?”
84
REMARK
It seems that the time of tenure of the office has nothing to do with the tailoring of the clothes;
however, an excellent tailor should take the tenure of office as an the important reference for measuring the size and tailoring the clothes.
Consideration of anything should include the impacts produced by other various kinds of interrelations as well as the limit of its own nature.
85
END OF CHAPTER 4 …
86
