9789144132143

Quality Management An Introduction

IDA GREMYR BJARNE BERGQUIST MATTIAS ELG

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Art. No 40334 ISBN 978-91-44-13214-3 First edition 1:1 Š The Authors and Studentlitteratur 2020 studentlitteratur.se Studentlitteratur AB, Lund Design: Karl Stefan Andersson Layout: Team Media Sweden AB Cover design: Jens Martin Cover illustration: alphabe/Shutterstock Printed by Dimograf, Poland 2020

Contents

Preface 7 1 Quality Management, Improvements and Science 11 1.1 Improvements—Can We Not Simply Be Content? 12 1.2 Science and Improvements 14 1.3 The History of Quality Management 17 1.4 What is Quality? 20 1.5 Principles of Quality Management 21

Part I Customer and Stakeholder Focus 2 Customer Focus 27 2.1 Customers’ Needs and Expectations 27 2.2 Customer Orientation 34 2.3 Customer Satisfaction 39 3 Quality Management for Sustainability 45 3.1 Environmental Management Systems 46 3.2 Continuous Considerations of Sustainability 46 3.3 A Stakeholder Perspective 50

Part II Models and Methods for Continuous Improvements 4 Model-Based Improvement Programmes 55 4.1 The Plan-Do-Study-Act Cycle 56 4.2 Process Management 58 4.3 Quality Management Systems 63

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4.4 4.5

Six Sigma 66 Lean Production 71

5 Continuous Improvements: Methods for Controlling and Analysing Processes and Products 77 5.1 General Approaches to Improvement Methods 78 5.2 Qualitative Methods and Tools 87 5.3 Quantitative Methods and Tools 94 5.4 Statistical Surveillance 97 5.5 A Note on Bias and Decisions 106

Part III Teamwork and Organisational Aspects of Quality Management 6 Teamwork 111 6.1 Teamwork for Improvements 112 6.2 Teamwork in Value Creation Processes 115 7 Quality Management in Practice 123 7.1 Context Matters 124 7.2 Organisational Structure for Quality Management and Improvements 131 7.3 Quality Departments and Quality Managers 136 7.4 The Future Role of Quality Management 140 References 143

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Preface

Quality management is often organised as various types of improvement programmes. The branding of these programmes seems to live a life of its own, with Total Quality Management having its heyday. A sequence of concepts such as Business Process Reengineering, Process Management, Six Sigma and Lean have been sold as the next new thing, with consultants sometimes downplaying previous concepts. We see repackaged improvement programmes under a new brand that bears a striking resemblance to earlier programmes. Does the emperor have new clothes, or is he, in fact, naked? If new concepts bring little to improve quality management, is it the responsibility of academics, such as the writers of this book, to expose this ‘nakedness’?

To answer this question, we first need to revisit the roots and origins of quality management. The foundation and founders, if you will, stem from the industrialisation era, where industry and manufacturing replaced agriculture as the workhorses of the economy. Higher productivity gains made possible by the industrialised era with mass production had a major impact on the numbers needed to produce the essentials for survival and unprecedented growth in the wealth of industrialised nations. The rise of the Japanese economy and the Japanese Quality Revolution has shown what quality management can bring on a larger scale.

Returning to the question of the emperor’s clothes—we see quality management as a sound and stable field of both research

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Preface and practise based on the principles of customer focus, con­tinuous improvement and teamwork. So, what are our current beliefs about the best ways to improve? The scientific method of analysing problems, making hypotheses of what may be beneficial for the organisation, testing these ideas and learning from the tests is a proven methodology. The scientific method has gone under many different quality management guises. In quality management approaches, one would connect the knowledge gained through the research phase with a model on how to improve things. The best-known improvement model is perhaps the Plan-Do-Study-Act (PDSA) model. The related concepts of continuous improvements or Kaizen are other variants or names for using the scientific method for improvements. Outside the scientific method, one could base improvements on lucky guesses, which could also be successful. Usually, there is some explicit or implicit knowledge, for instance, to base guesses on experience of similar events. The lucky guess success rate does, therefore, depend on the ingenuity and experience of the solver. We believe that a more structured approach should be more successful in finding root causes of problems, especially in more difficult cases or for less experienced problem solvers.

As professors, we are experienced in teaching national and international students, undergraduate and graduate students, and full-time and part-time students who are already professionals within quality management. When designing courses in quality management, there are many books to choose from. However, at the same time, there is much research going on in this field that we also want students to read and digest. So, how can we provide a reasonable amount of reading while covering both fundamental principles of quality management (that are not addressed in research papers) and the most recent research? Our answer to that question is this book. We have designed the book for several different groups. One group is students for whom we hope the presentation will help put bits and pieces of quality management together, such as various tools or improvement programmes. Scholars have

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Preface often portrayed quality management as an engineering disci­ pline, and, in truth, we can trace the origins to manufacturing and engineering. However, we would like to broaden this notion to include services, healthcare, retail and so on. Our intention has been to keep the text short not to overwhelm the reader with details better presented in other, more specialised textbooks on particular methods, programmes or applications. The idea is thus not to compete with already-existing comprehensive textbooks but to offer a concise introduction to the basic principles of quality management that may easily be supplemented by research papers.

Although our ambition has not been to provide a comprehensive text for those who would like to test a method (we will, however, give suggestions for further readings when necessary), we do hope that practitioners will find our aim useful to knit together a web of interconnected ideas, so that the reader can understand how they are related.

Authors seldom work completely without aid, and we are indebted to many people. We gratefully acknowledge the help ­provided by the publisher Studentlitteratur and, in particular, Jens Fredholm and Marianne Lundqvist. We are also greatly indebted to Peter Cronemyr, Roberta Guglielmetti, Jacob ­Hallencreutz, Andreas Hellström, Osmo Kauppila and many students for constructive criticism on the draft of this book, as well as the unnamed members of the award committee of the Studentlittera­t ur Course Literature Prize.

March 2020 Ida Gremyr, Bjarne Bergquist, Mattias Elg

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1 Quality Management, Improvements and Science I have not failed. I’ve just found 10,000 ways that won’t work.

T r a di t iona l ly at t r i bu t e d to T hom a s A . Edison

We can dispute the exact wording of Thomas A. Edison, but the essence stands—we repeatedly try until we find solutions that fulfil our needs or solve a problem. Additionally, we hope to learn from the failures along the way, so that our solution is a solid one.

The interesting thing is that a solid solution is temporal and subject to further development. What people commonly consider as the best solution may be disputed when new circumstances are revealed. In this introductory chapter, we start with some gene­ ral reflections on the constant search for improvements. Second, we turn to the role of science in improvements, i.e. how can we understand phenomena to make improvements to them. Third, we revisit some of the history of quality management. Fourth, we discuss the definition of quality used in this book before we finally take a closer look at quality management by operationalising it into three principles.

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1 Quality Management, Improvements and Science 1.1 Improvements—Can

Simply Be Content?

We Not

The world around us is in constant flux. Human beings and businesses are becoming better and better at certain tasks. At the first Olympic marathon using the current standard of 42.2 km in 1924, Albin Stenroos from Finland won in 2:41:22. At the 2016 Olympics, Eliud Kipchoge of Kenya won in 2:08:01, and the current world record by Kipchoge in Berlin, 2018, is 2:01:39. The two-hour limit is yet to be broken, but it is expected to fall within the next five years, as women and men constantly breaking athletics records.

(In October 2019, Kipchoge ran the 42.2 kilometres in 1:59:40 in an unofficial event using impermissible aid). Although some athletic achievements are disputed due to suspicion of performance-­ enhancing drugs, the trend is clear: Competition is fierce, the personal gain from being the winner is enormous and people are finding ways to keep improving. It is doubtful that record holders from the first half of the 20th century would have excelled without using the science that has gone into more effective training regi­ mens and high-tech sports gear; however, as human brains are hard-wired to seek gratification, they most likely would have tried if given a chance. Gratification can come from fulfilling our basic needs, but it can also stem from accomplishments. We set goals for ourselves and then try to reach them. Once we have reached a goal, we feel gratified and content for a while, and then discontentment grows; we start to feel an urge for new things or set new goals for ourselves. Since improvements are an essential part of our psyche’s reward system, we can safely assume that we have always striven to improve and adapt.

Moreover, the improvements achieved have helped sustain a global population with clothes, food and other necessities at an unprecedented pace. The number of humans passed one billion around the year 1900 and is currently (2019) more than 7.6 billion.

At the same time, the extremely poor proportion of the population is continually declining. This enormous change is due to improve-

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1 Quality Management, Improvements and Science ments in all fields. There are still major global issues that need consideration, global warming being a prominent one, but people are living in a safer world and are less likely to go hungry. It would be overly presumptuous to let quality manage­ment principles, practices and tools take credit for all the good developments seen in the world. Nonetheless, development needs have undoubtedly shaped those very same tools, practices and principles and have helped support the same development. Current needs in areas such as environmental management will also likely benefit from the same set of improvement basics that ingrain quality management.

But if you or your organisation are on top of your game, can you not just be content with how things are? Can you not just keep on doing what you are doing, something that without a doubt has led you to good results? After all, improvements require a great deal of effort and sustainability, effort that the organisation could have spent on producing more products, advancing the owners or something else. Spending resources on the wrong tasks is like betting on the wrong horse: If the bet fails, you will regret not having spent them more wisely. Of course, we cannot deliver clear-cut suggestions about where organisations should best use their resources. However, the management of any organisation must always consider if improvements should be at the top of the manage­ment agenda. It is also worth remembering that even though the organisation maintains a leading position, a common fallacy is that this leading position is a safeguard against having to improve. Such misplaced conviction has led to the demise of companies and even empires. A classic example illustrates this point neatly. People no longer only attribute “The Kodak Moment” to a good photo opportunity but to the point in time where Kodak missed the digital revolution and went from the world-leading position in photographic films to being left behind in digital photo­ graphy (The Economist, 2012). The Kodak Eastman company only had two global competitors: Fujifilm and Agfa. The considerable process difficulties of producing colour film for photography also protected the business. Kodak seemed to have been content and

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1 Quality Management, Improvements and Science felt safe in its profitable business segment at the turn of the new millen­nium. As it turned out, 2001 was the peak year for global sales of film, and the company filed for bankruptcy in 2012. It may come as a surprise that the Kodak Eastman Company was the inventor of digital photography in 1975. However, instead of changing and diversifying its business, Kodak tried to find business models that would maintain its lucrative colour film production. Mounting empirical evidence suggests that doing the same thing repeatedly while your competition tries something different will eventually lead to them learning something you have not, and they will surpass you. Einstein captured this neatly in his saying that, “Insanity is doing the same thing and expecting a different result.” To paraphrase Darwin: In a competitive environment, only the fittest will survive. Then again, how are we to survive in these environments? The continuous striving to improve is key in this regard. For this purpose, science and improvements come into play.

1.2 Science

and Improvements

In this book, we maintain the idea that it is advantageous for the organisation to be sustainable over time. Our belief means that we postulate that an organisation with satisfied stakeholders— including its customers, owners, employees and society at large— that does not deplete the resources of nature or exploit humans is more desirable than organisations that fail in any of these respects.

We also argue that improvement is beneficial for any organisation.

However, it is also necessary to take into account the environment within which the organisation is acting. What works for a smallscale company in a turbulent environment is something very different from a mature public sector organisation. Is there, for instance, an optimum level of expenditure for improvements? If a mature organisation devote all its resources on improvement and nothing on production, it is unlikely to be very long-lived, so there should be an optimum balance. However, does a start-up company have the same optimum balance as a mature one? Is it sector- and

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1 Quality Management, Improvements and Science context-dependent? What measures should be used as proxies for a good result? These types of questions make it challenging to give a reliable general answer to the question, “Is it beneficial to work with improvements?” We will return to this context-depen­ dency—i.e. the opposite to one generic answer—later in the book.

Today, misinformation and fake news are among the major challenges for society and many organisations. Leaders frequently need to put great effort into combatting information that simply is not true that has been published on-line, often with harmful intentions as in the case of Internet troll factories. This challenge is also problematic when engaging in improvements. There is a risk of falling into traps with severe consequences if we base improvements on personal judgements, half-truths and nonsense. Advantageously, improvements grounded in methods of science are, therefore, more likely to generate valid knowledge and evidence. However, what are the aspects that link science and improvements?

Simply put, scientific research is a systematic way to describe, explain and predict observed phenomena. The role of science is not to state the desirability of the outcomes. The scientific method involves making hypotheses of an event based on scarce information, deriving logical prediction based on the hypotheses and trying to falsify hypotheses, usually by carrying out experiments (Case 1.1).

One may consider the scientific method a quantitative approach; there are quantifiable measures with which to test hypotheses.

Apart from experiments, scientific data collection methods can involve surveys, archival analyses and so on. Note that a hypo­ thesis can never be proven true; one can always find new observations that do not fit with the hypotheses and, therefore, disprove it.

If the experimenter cannot refute the hypothesis, the hypothesis will stand as the current best estimate of the truth. The scientific method has been proven valuable but not for all research problems and questions. These may be better suited to qualitative research, which deals with non-numerical data, often focusing on the much more complex environment of human interaction.

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1 Quality Management, Improvements and Science Case 1.1 Using experiments for knowledge-based decisions Imagine a researcher working in agriculture. She hypo­ thesises that a new type of fertiliser will increase the growth rate of wheat. From experience and earlier research, the current knowledge is that this plant needs a certain amount of nourishment from the standard type of fertilisers, a particular amount of water, sunlight for the photosynthesis, heat and so on.

Consider a field test in which the experimenter uses both the standard fertiliser and the new fertiliser compound.

The researcher has access to ten wheat plots, and she randomly assigns five plots to the new fertiliser and five to the standard one while keeping all other variables that may interfere with the outcome set at specified levels.

She later tests her hypothesis by weighing the wheat from the two types of fields after the harvest. Now, as statistical tests go, she cannot prove that two populations are the same.

What she can do is to test how likely it is that any differences seen between the weight of the wheat from the standard fertiliser plots and the new fertiliser plots come from just random chance and compare this proba­bility to a limit that the she has chosen. Here, researchers use statistics and an experimental approach to differentiate between random events and what is so unlikely that we can refute the miniscule possibilities of the seen effects being due to chance.

Is there scientific backing for the hypothesis that it is bene­ficial for organisations to devote energy to improvements? This is a complex question, and one that research struggles to answer. In many studies, researchers have concluded that organisations that have worked with improvements were more successful than those that have not explicitly done so. There are also examples

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1 Quality Management, Improvements and Science where the studies led the researchers to the opposite conclusions, i.e. that organisations spending considerable resources on certain improvement activities were being outperformed or going bankrupt. Again, the questions of whether to spend resources on improvements and, if so, how much are difficult to answer and context-dependent. What works for one organisation may fail for another. So, where does this leave a textbook on quality improvements? We will try to highlight the underlying principles, practices and tools that we have seen as frequently beneficial for many organisations. However, an adoption of these principles, practices and tools must consider the context. While there are many similarities, the situation of a healthcare organisation is different from that of a beauty parlour or a car sales organisation.

Two car manufacturers may take very different routes, both turning out successful (or unsuccessful).

1.3 The

History of Quality Management

Humans have always striven for improvements to survive. As stated earlier, the human brain is hard-wired not to be content with things as they are, thus we will constantly seek opportunities to make things better in some aspects. Medieval artisan guilds are a well-known example. The guilds included crafts such as weavers, blacksmiths, masons and architects. Each guild set and enforced standards of good workmanship and ethical conduct. The masterpiece procedure, where the guild masters examined work produced by craftsmen training for the profession, guaranteed that the people of the guild were sufficiently skilled to uphold the reputation of the trade.

The industrial revolution brought with it new production ­methods: the use of machine tools and interchangeable parts.

The guilds’ role declined, and they soon disappeared as the main guardians of product quality. Frederick W. Taylor found that simplification and standardisation of work tasks could make manual labour more efficient (Taylor, 1911, p. 114). He, therefore,

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The three authors of this book are all university professors, each with more than 20 years of experience in teaching and research: Ida Gremyr at Chalmers University of Technology, Bjarne Bergquist at LuleĂĽ University of Technology, and Mattias Elg at LinkĂśping University.

Quality Management An Introduction Quality Management. An Introduction is a multi-purpose book designed for both university students and practitioners. In the book, the authors elaborate on the fundamental principles of quality management by connecting it to relevant practices and methods.

Why is this book important? Change and improvements, productivity, and focus on customers and other stakeholders are at the top of management agendas. Quality management is about managing change and improvements as well as reaching goals, whatever they may be, as efficiently as possible, and making effective efforts to do so.

Scientific methods are the bases for quality management. Furthermore, quality management is a discipline that goes beyond science into the realms of philosophy. It assumes that the changes you seek are improvements, encouraging the idea that the best route is one that leads to improvements not only for yourself but also for other stakeholders.

The book focuses on three fundamental themes in quality management: Customer and stakeholder focus, Models and methods for continuous improvements, and Teamwork and organisational aspects of quality management. The book is designed to be supplemented and supported by other in-depth practitioner texts and research articles in various courses in quality management.

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