9789144140261

Fourth edition

Quality Plan Do

Study Act

FROM CUSTOMER NEEDS TO CUSTOMER SATISFACTION

BO BERGMAN INGELA BÄCKSTRÖM RICKARD GARVARE BENGT KLEFSJÖ

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Art. No 4633 ISBN 978-91-44-14026-1 Fourth edition 4:1 © The authors and Studentlitteratur studentlitteratur.se Studentlitteratur AB, Lund

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2E

Design: Jesper Sjöstrand/Metamorf Design Group Cover design: Lars Tempte Photo: 3.3 (L. Gilbreth): Bettman/GettyImages 3.3 (F. Taylor): Frederick Winslow Taylor Collection, Samuel C. Williams Library, Stevens Institute of Technology, Hoboken, NJ 3.6 (T. Ohno): The Asahi Shimbun/GettyImages 5.1 (A. Maslow): Bettman/GettyImages

Contents

Preface to the fourth edition 19 The authors 21 Overview of the book 22

Part I

Quality and quality management 1 Some basic quality concepts 26 1.1

1.2

1.3

1.4

1.5

A new business landscape 27 1.1.1 Possibilities in the new business landscape 28 1.1.2 Quality improvement ever more central 28 The quality concept 29 1.2.1 Some common definitions 30 1.2.2 Garvin’s five perspectives on quality 31 1.2.3 Our view of the quality concept 33 Customers, customer value, and customer needs 34 1.3.1 Customer value 34 1.3.2 The concept of customer 35 1.3.3 Customer needs and expectations 37 The concept of product 38 1.4.1 Goods 39 1.4.2 Services 39 1.4.3 Goods vs. services 40 1.4.4 Experiences 41 1.4.5 Blurred product boundaries 42 1.4.6 Offers 44 Products and their quality dimensions 45 1.5.1 Quality dimensions of goods 45

Quality dimensions of services 46 1.5.3 A note on quality dimensions 48 Quality and profitability 48 Total Quality Management 52 1.7.1 Total Quality Management – our version 53 1.7.2 Total Quality Management – the origin 55 Further reading and endnotes 55 1.5.2

1.6 1.7

1.8

2 Total Quality Management 58 2.1 2.2

2.3 2.4

Total Quality Management – the concept 59 Total Quality Management – the cornerstones 61 2.2.1 Focus on customers 61 2.2.2 Base decisions on facts 64 2.2.3 Focus on processes 64 2.2.4 Improve continuously 66 2.2.5 Let everyone take an active part 70 2.2.6 Develop committed leadership 72 2.2.7 Values and principles – a clarification 73 Total Quality Management – the knowledge base 73 Further reading and endnotes 75

3 The evolution of quality management 77 3.1 3.2

3.3 3.4 3.5 3.6

6

Contents

Prehistory 77 The Industrial Revolution 78 3.2.1 Specialization and assembling 78 3.2.2 Taylorism 79 3.2.3 Acceptance sampling 80 Walter A. Shewhart 81 W. Edwards Deming 83 Joseph M. Juran 83 The Japanese miracle 85 3.6.1 An igniting spark 85 3.6.2 JUSE and its impact 86 3.6.3 The significance of Deming and Juran for Japan’s development 88 3.6.4 Influential persons from Japan 89

3.7 3.8 3.9

3.10

3.11

3.12

Part II

The development of reliability engineering 90 Service quality 93 Quality management in the public sector 94 3.9.1 New Public Management 94 3.9.2 Developments in healthcare 95 3.9.3 Developments in the field of education 96 In recent decades 97 3.10.1 Background 97 3.10.2 The awakening in the West 98 3.10.3 Is the Japanese halo askew? 99 3.10.4 New challenges 100 Evolution of the quality movement 101 3.11.1 Four phases of the quality movement 102 3.11.2 The quality movement seen as two schools of thought 103 3.11.3 The quality movement reaches quality management 5.0 104 3.11.4 Total Quality Management today and in the future 105 Further reading and endnotes 106

Customers and employees

4 External customer satisfaction 112 4.1

4.2

4.3

Customer needs and the Kano model 112 4.1.1 Customer needs 112 4.1.2 The Kano model 114 Customer care 119 4.2.1 Customization 119 4.2.2 Nudging 120 4.2.3 Customer relations 121 4.2.4 Customer experience (CE) 122 4.2.5 Warranty and L.L. Bean 123 Satisfaction, loyalty, and repurchase 124 4.3.1 Loyalty 124 4.3.2 Customer clubs 125

Contents

7

Satisfaction and rate of repurchase 126 4.3.4 Satisfaction, repurchase rates, and revenue 129 Some explanatory models 130 4.4.1 The Grönroos model 130 4.4.2 A model for customer satisfaction 130 4.4.3 The Gap Model 131 Measuring external customer satisfaction 134 4.5.1 Dissatisfaction and complaints 134 4.5.2 Measuring satisfaction 137 Co-creation and value-creating networks 141 Closing the loop 143 Further reading and endnotes 144 4.3.3

4.4

4.5

4.6 4.7 4.8

5 Internal customer satisfaction 148 5.1 5.2 5.3

5.4 5.5

5.6

Opportunities for improvement 148 Work and motivation 150 5.2.1 Some early studies 150 Co-workership and motivation 156 5.3.1 Co-creation and co-workership 156 5.3.2 Drivers for motivation 159 5.3.3 Flow theory 162 5.3.4 The human view 164 5.3.5 Psychological safety 164 Motivation and presence of health 166 Measuring internal customer satisfaction 166 5.5.1 Internal measurements 167 5.5.2 Employee surveys – comments and suggestions 168 Further reading and endnotes 169

6 Customer satisfaction measurements 173 6.1

8

Contents

External customer satisfaction 173 6.1.1 The Swedish Quality Index 173 6.1.2 The American Customer Satisfaction Index 179 6.1.3 The European Customer Index (EPSI) 181 6.1.4 An industry index – J.D. Power 182

6.2 6.3 6.4

Relationships between internal and external customer satisfaction 184 Concluding comments 186 Further reading and endnotes 187

Part III Improvement work 7 Continuous improvement 190 7.1

7.2 7.3

7.4

7.5 7.6

7.7 7.8

7.9

Improvement knowledge 190 7.1.1 Knowledge about variation 191 7.1.2 Psychology 192 7.1.3 Theory of knowledge 192 7.1.4 Appreciation for a system 193 7.1.5 A system of knowledge 194 Organizational improvement capability 195 Variation 196 7.3.1 Assignable and random variation 198 7.3.2 Adding variation 200 Improvement cycles 201 7.4.1 Deming’s improvement cycle 201 7.4.2 Nolan’s improvement model 203 7.4.3 The DMAIC cycle 204 7.4.4 Juran Trilogy 205 7.4.5 Quality improvement storyboard 206 The breakthrough methodology 208 Improvement groups 209 7.6.1 The beginning of quality control circles 210 7.6.2 New QC circles 211 Toyota Kata 213 Systems for suggesting improvements 214 7.8.1 Japanese suggestion systems 214 7.8.2 Comparing Japan and the US 215 7.8.3 Success factors 216 Further reading and endnotes 216

Contents

9

8 The Seven Improvement Tools 221 8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8

Data collection 222 Pareto charts 224 Cause-and-effect diagrams 225 Histograms 230 Stratification 232 Scatter plots 234 Control charts 235 Further reading and endnotes 237

9 The Seven Management Tools 239 9.1 9.2 9.3 9.4 9.5 9.6 9.7 9.8 9.9

Affinity diagram 240 Tree diagram 243 Matrix diagram 247 Relation diagram 248 Matrix data analysis 250 Process decision program chart 250 Arrow diagram 251 Relationships between the different tools 253 9.8.1 An improvement project – haemolysis 253 Further reading and endnotes 259

Part IV Product development 10 Product development with a customer focus 262 10.1 10.2

10.3 10.4 10.5

10

Contents

Success factors 263 Models for product development 264 10.2.1 Stage-gate development 264 10.2.2 Agile product development 265 10.2.3 Scaling up 269 10.2.4 A hybrid 270 Developing product families 272 Integrated product development 275 Technology development 275

Technology push or market pull 276 10.5.2 The improvement perspective 276 Design thinking 277 10.6.1 Experience-Based Co-Design 278 Service development 279 10.7.1 Models for service development 280 Innovative product development 284 Further reading and endnotes 285 10.5.1

10.6 10.7 10.8 10.9

11 Quality Function Deployment 288 11.1 11.2 11.3

11.4

11.5 11.6 11.7

Background 288 The voice of the customer 291 The House of Quality 292 11.3.1 Design 292 11.3.2 An example of the House of Quality 293 11.3.3 QFD as a chain of activities 293 Experiences of QFD 295 11.4.1 Examples of applications 295 11.4.2 Benefits and difficulties 297 Kansei Engineering 298 Pugh Concept Selection Matrix 299 Further reading and endnotes 300

12 Reliability 302 12.1

12.2

12.3 12.4

Reliability engineering 303 12.1.1 The aim of reliability engineering 303 12.1.2 Reliability and dependability 305 Basic concepts 306 12.2.1 Reliability function 306 12.2.2 Failure rate 307 Reliability improvement 310 System reliability 311 12.4.1 Series systems 312 12.4.2 Parallel systems 312 12.4.3 Other systems 313 12.4.4 Redundancy 314 Contents

11

12.5 12.6 12.7

12.8 12.9

12.10

Repairable systems 316 Feedback 317 12.6.1 Probability plotting 317 Some tools for qualitative analysis 321 12.7.1 Failure mode and effect analysis (FMEA) 321 12.7.2 Variation mode and effects analysis (VMEA) 322 12.7.3 Fault tree analysis (FTA) 324 Predictability and black swans 325 Safety and security 327 12.9.1 Safety 328 12.9.2 Security 328 Further reading and endnotes 329

13 Design of Experiments 333 13.1 13.2 13.3

13.4 13.5 13.6 13.7 13.8

Experimenting one-factor-at-a-time 333 A weighing experiment 335 A factorial design 337 13.3.1 An experimental plan 338 13.3.2 Estimating effects 339 13.3.3 Analyzing the results from the experiment 343 Fractional factorial designs 347 Studied factors and disturbing factors 350 Conjoint analysis 351 13.6.1 Conjoint analysis used for course development 352 Forecasting 353 Further reading and endnotes 355

14 Robust design 357 14.1

14.2

12

Contents

Some illustrations 358 14.1.1 Wingquist and the spherical ball bearing 358 14.1.2 Assembling 359 14.1.3 Poka Yoke 359 14.1.4 A pendulum 360 14.1.5 A transistor 360 Variation and its consequences 361 14.2.1 Sources of variation 361

P-diagram 363 14.2.3 The loss function 364 Parameter design 367 Design of Experiments for robustness 369 14.4.1 An example of Design of Experiments for robust design 369 14.4.2 Taguchi’s solution 372 Tolerance setting 373 Robust design – a summary 374 14.6.1 Principles 374 14.6.2 Beyond robustness 376 Further reading and endnotes 376 14.2.2

14.3 14.4

14.5 14.6

14.7

Part V

Process development

15 Processes and process management 380 15.1

15.2

15.3 15.4 15.5 15.6 15.7 15.8

Processes 381 15.1.1 What is a process? 381 15.1.2 Classifying processes 382 15.1.3 Process logic 384 15.1.4 Not everything is a process 386 15.1.5 Conceptual confusion in the process area 387 Process management 388 15.2.1 The process management methodology 388 15.2.2 Different roles in process management 393 Benchmarking 397 Process innovation 400 The Capability Maturity Model 401 The customers’ processes 404 Some reflections 404 Further reading and endnotes 405

16 Control charts 408 16.1

Principles for control charts 408 16.1.1 Requirements on control charts 409 Contents

13

16.2

16.3

16.4 16.5

16.6

Control charts for attribute data 412 16.2.1 np-charts and p-charts 412 16.2.2 c-charts 415 Control charts for continuous data 415 16.3.1 Sample size 416 16.3.2 Rational subgroups 417 16.3.3 Choice of control limits 418 16.3.4 An x -chart when μ and σ are unknown 419 16.3.5 Control charts for dispersion 423 16.3.6 Combining x-charts and R-charts 426 Sensitivity 426 Some other control charts 427 16.5.1 The Western Electric alarm signals 427 16.5.2 EWMA charts 429 16.5.3 A note on positive lower control limits 430 Further reading and endnotes 431

17 Capability 433 17.1

17.2 17.3

17.4

Capability measures 434 17.1.1 Some capability indices 434 17.1.2 Sensitivity and robustness of capability indices 437 Short-term and long-term capability 438 Capability studies 441 17.3.1 The steps of a capability study 441 17.3.2 Data analysis and measurement precision 445 17.3.3 Repeatability and reproducibility 446 17.3.4 Performing capability studies 449 Further reading and endnotes 451

18 Production development 453 18.1 18.2

14

Contents

Manufacturing development 454 The possibilities of digitalization 457 18.2.1 The Internet of Things 457 18.2.2 Artificial intelligence 458 18.2.3 Big data 459 18.2.4 Digital maturity 460

18.3 18.4 18.5

18.6

Smart industry 460 Digital customer journey 462 Supplier collaboration 463 18.5.1 The purchasing process 464 18.5.2 Supplier collaboration and partnership 465 18.5.3 Concluding remarks on supplier collaboration 469 Further reading and endnotes 470

Part VI Organizational development 19 Leadership 474 19.1

19.2 19.3 19.4

19.5 19.6 19.7 19.8

Leaders and leadership 475 19.1.1 Manager and leader – management and leadership 475 19.1.2 Leadership and communication 477 19.1.3 Examples of excellent leadership 480 19.1.4 The leadership of Ingvar Kamprad 481 Leadership of the digital revolution 484 Deming’s view on leadership 488 Learning organizations 493 19.4.1 Five disciplines 493 19.4.2 Single-loop and double-loop learning 496 Corporate culture 497 Total Quality Management as a system 500 Total Quality Management – possibilities and difficulties 503 Further reading and endnotes 509

20 Vision, goals, and strategies 514 20.1

20.2

Mission and vision 514 20.1.1 Mission 514 20.1.2 Vision 515 Goals, strategy, and policy 517 20.2.1 Goals 517

Contents

15

Activities and strategy 521 20.2.3 Policy 522 Policy deployment 523 20.3.1 Example of policy deployment at SÄS 525 Balanced scorecards and balanced control 531 20.4.1 Balanced scorecards 531 20.4.2 Balanced control 532 20.4.3 Applications of balanced control 534 20.4.4 Experiences of balanced control 536 Further reading and endnotes 537 20.2.2

20.3 20.4

20.5

21 Quality management systems 540 21.1

21.2

21.3

21.4

The ISO 9000 series 541 21.1.1 Background of ISO 9000 541 21.1.2 Parts of the ISO 9000 series 542 21.1.3 ISO 9000:2015 543 21.1.4 ISO 9001:2015 quality management systems – requirements 547 21.1.5 ISO/TS 9002:2016 550 21.1.6 ISO 9004:2018 550 21.1.7 ISO 19011:2018 552 21.1.8 Some reflections on the ISO 9000 series 553 Certification of quality management systems 554 21.2.1 Third-party certification 554 21.2.2 Certification of quality management systems 554 Some other standards 557 21.3.1 IATF 16949 for the automotive industry 557 21.3.2 TL 9000 for telecom 558 21.3.3 AS 9100 for the aerospace industry 559 Further reading and endnotes 560

22 Organizational assessments 562 22.1

16

Contents

The Deming Prize 562 22.1.1 Background 562 22.1.2 Recipients of the Deming Prize 564 22.1.3 The Rane Group 566

22.2

22.3

22.4

22.5 22.6

Malcolm Baldrige National Quality Award 567 22.2.1 Model and criteria 567 22.2.2 The award process 569 22.2.3 Award recipients 571 The EFQM Global Award 574 22.3.1 The EFQM Model 574 22.3.2 The recognition and award processes 576 22.3.3 Award recipients 579 The Swedish Quality Award 579 22.4.1 The SIQ Management Model 579 22.4.2 The Swedish Quality Award process 582 22.4.3 The Swedish Institute for Quality (SIQ) 582 Self-assessment 583 22.5.1 The Springboard 586 Further reading and endnotes 589

23 Improvement programmes 593 23.1

23.2

23.3 23.4 23.5

Six Sigma 593 23.1.1 Six Sigma as an improvement programme 594 23.1.2 Six Sigma deployment 600 Lean 603 23.2.1 Lean concepts and tools 603 23.2.2 Lean, Toyota Production System, and The Toyota Way 609 23.2.3 Lean, the Toyota Way, and TQM 613 23.2.4 Lean Six Sigma 614 The Scania Production System 614 Names are not relevant – content is 616 Further reading and endnotes 618

Part VII Societal development 24 Sustainability 622 24.1

Environmental consciousness 622 24.1.1 Silent Spring 622 Contents

17

The Intergovernmental Panel on Climate Change 624 24.1.3 Eco-labelling 626 Sustainable development 627 24.2.1 Three dimensions of sustainability 627 24.2.2 Agenda 2030 628 24.2.3 COP 26 in Glasgow 630 Corporate social responsibility (CSR) 630 24.3.1 The concept of CSR 630 24.3.2 Global Reporting Initiative (GRI) 631 Standards for Sustainable Development 632 24.4.1 Environmental management systems – ISO 14000 and EMAS 632 24.4.2 International standard ISO 26000 633 Sustainability in practice 634 24.5.1 Sustainability and responsibility in organizations 635 24.5.2 Actions for Sustainable Development 642 Further reading and endnotes 646 24.1.2

24.2

24.3

24.4

24.5

24.6

25 Quality in society 648 25.1

25.2

25.3

25.4

Urban quality development 648 25.1.1 Examples of TQM initiatives 649 25.1.2 Examples of sustainability initiatives 649 Global challenges 652 25.2.1 The climate crisis 652 25.2.2 The Covid-19 pandemic 653 A total quality society 662 25.3.1 Society 5.0 – a Japanese vision of the future 662 25.3.2 An even better society 664 Further reading and endnotes 665

Part VIII References Index References 670 Index 707 18

Contents

Part I

Quality and quality management An introduction

In this first part of the book, we discuss the quality concept and describe how the view of quality and quality management has changed over time. We also briefly present the concept of Total Quality Management, which forms the basis of the book.

Chapter 1

Some basic quality concepts Quality has always been important to customers when buying or using products (i.e., goods and services or any combination of these two).

Organizations with innovative and systematic ways of working with quality and quality improvements have often achieved great success in the market, as well as lower costs and a faster design and development of new products.

Currently, large and rapid changes in the business landscape place new demands on organizations, which also include public services such as police, education, and healthcare. These changes include megatrends such as digitalization, shorter product life cycles, sustainability requirements, climate threats, and global competition.

As a producer, it is crucial to understand how customers experience products. One must also understand how developing technology provides opportunities for product features that customers do not expect and understand what may attract both new and returning customers.

Knowledge is required regarding both customers and technology, but success also requires creativity and systematic development to turn knowhow into attractive products. A key part of improving both products and how they are produced is learning.

In this chapter, we first present a picture of new challenges currently changing the business landscape and creating new conditions for public organizations. The main part of the chapter is devoted to the concepts of

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Chapter 1 Some basic quality concepts

quality, customer, product, and product characteristics. The correlation between quality and profitability is also discussed. Finally, we introduce our view of Total Quality Management, which forms the basis of the book and is discussed in more detail in Chapter 2.

1.1

A new business landscape

A lot has happened since the third edition of this book was published in 2010. The digital transformation has really taken off, further boosted by the recent pandemic. Companies with new and more circular business models, new ways of working, and new products have been created in the digital revolution. The sharing of resources is rising. The commodity and service society is moving towards an experience economy.

Increasing globalization also places new demands on capacity for change, both for individuals and organizations. The “Japanese miracle” when Japan invested in quality after World War II (see Section 3.6), is currently repeating when many Asian countries, such as India, South Korea, and China, invest heavily in quality improvement in terms of processes and products. Ecological and social sustainability has also been increasingly emphasized.

In retail trade, major changes occur as customers increasingly switch to e-commerce. This trend has been further accelerated by the Covid-19 pandemic. The market share of traditional commerce based on physical stores is expected to continue decreasing in the coming years.1 The use of social distancing, lockdowns, and other actions due to the Covid-19 pandemic has led consumers to ramp up online shopping, social media use, IP telephony, and teleconferencing, as well as streaming video, audio books, and music. A similar development could be seen in the market of higher education but also partially in healthcare where online medical treatment is rapidly increasing. Nonetheless, the Apple Store shows that it is possible to run a successful chain of physical stores alongside online services if you are customer-driven and experience-based.

Today’s customers can easily compare different products and prices online.

When a customer is unhappy, this spreads quickly through various forms of social media and may influence many people. However, the companies themselves are often poorly informed about customer dissatisfaction. The

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Part I Quality and quality management

customer service channels that do exist often offer insufficient feedback to customers and lack systematic feedback to decision-makers.

1.1.1

Possibilities in the new business landscape

Digitalization creates unprecedented possibilities for both organizations and individuals. Customer preferences and needs can be captured using artificial intelligence (AI) on customer behaviour and social media material.

Digital technology also offers the possibility of creating products with completely new features, such as detailed weather information based on a continuous monitoring of the windscreen wiper status of vehicles driving on the roads. At the same time, development processes are increasingly influenced by the easy-to-move and agile working methods in software development. Production moves towards “smart factories” and “Industry 4.0” that use methods such as machine learning, Internet of Things, and geographically distributed additive production close to the consumer or even at the premises of the consumer; see Section 18.2 and Section 18.3.

Several visionary companies that not only exploit the megatrend of digitalization but also emphasize customer experiences and an open company culture based on employee initiatives have become extremely successful. At the same time, these companies are open to see possibilities and new solutions originating from external challenges.

Employees also have increasing demands on their employers. How can organizations stimulate and take advantage of the creative ideas and commitment of employees with a business aiming higher than to simply increase profits?

1.1.2

Quality improvement ever more central

As a result of the above, most organizations now need to work with quality improvement. With the accelerating speed of development in the business landscape, organizations have to shorten their time to act and react in all parts of their operations. Mounting piles of information on the state of the landscape must be ever more quickly transformed into fitting changes in processes and products. At the same time, vision and strategy need a long-

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term focus, as do relationships in the supply chain. In many cases, however, the focus is still short-term, narrowly concentrated on finances.

The improvement work key to modern quality management has often been based on using specific sets of methodologies and tools. However, current challenges require a more systematic and holistic approach based on a strong organizational culture (Eriksson et al., 2016). To achieve this, it is necessary that all employees are given the opportunity to contribute with their knowledge. Active participation by everyone in the organization is needed in terms of how to achieve improvements, such as regarding division of responsibilities, choosing methodologies and tools, and developing process designs and new product solutions. To stay competitive, there is also a much stronger need to actively involve suppliers and customers outside the organization in the improvement work.

This places great demands on supportive and committed leadership where managers realize that the survival and prosperity of the organization are largely created through employee development and commitment. The requirements for leadership in organizations outlined above must thus be fused into the organizational culture. The underlying values of quality management have developed for a very long time, including the exemplary successes of Japanese companies half a century ago and many successful organizations since then. It is also important to learn from the leadership of the digital revolution, with its focus on customer experiences and how to get motivated and creative employees; see Section 19.2.

Opportunities, difficulties, and threats linked to the changes described above are discussed in different parts and to varying degrees in this book.

We also present values, methodologies, and tools that support successful development to reach a holistic interpretation of Total Quality Management.2

1.2

The quality concept

The word “quality” is derived from the Latin qualitas, meaning “of what”.

The word is still used in this sense. One example of this is steel quality, which refers to different types of steel with various strength properties.

However, the word has acquired a significantly different and broader meaning over the last decades; see also Figure 1.1.

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Part I Quality and quality management

Figure 1.1 The Japanese signs for the quality concept. The upper sign is pronounced hin and roughly means “product”. The lower sign is pronounced shitsu and roughly means “quality”. Originally, this second sign illustrated two axes on top of a mussel, interpreted as “a promise of money or the value of money”. Nowadays, the combination of the signs denotes the quality concept.

1.2.1

Some common definitions

There are numerous definitions of the concept of product quality. Some of these are illustrated in Figure 1.2.3 A definition with a producer perspective and which draws attention to factors such as fulfilling the set tolerances and requirements is “conformance to requirements”; see Crosby (1979). A more customer-oriented characterization, “fitness for use”, has been credited to the American consultant Joseph Juran (Juran, 1951). Edwards Deming went even further towards focusing on customers when he emphasized that “quality should be aimed at the needs of the customer, present and future” (Deming, 1986, p. 5). In his definition, Deming also pointed to the importance of already today thinking about the customers of tomorrow.

As early as 1931, Walter Shewhart discussed quality issues in his book Economic Control of Quality of Manufactured Product. Shewhart argued that there are two sides to the quality concept – a more objectively measurable side, as he saw it, and a more subjective side, focusing on how customers experience the product. Both these sides are important to study. The one more objectively measurable is important from the perspective of producers and providers of products, since it is vital to have a common basis for the decisions that have to be made during the design, manufacturing, and delivery of the goods and services. At the same time, the customer is the one who in the end evaluates the product from her or his own subjective point of view. It is the customer’s experiences of the product that decides its success.4 The Japanese engineer Genichi Taguchi defined quality, or rather non-quality, as “the losses a product imparts to the society from the time the product is shipped”; see Taguchi & Wu (1979). Even if Taguchi used his definition for goods, this interpretation might just as well be used for

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quality of services. Taguchi’s definition highlights the link to the outcomes of our products, even to those not primarily using them. Thus, it becomes closely related to ideas regarding sustainable development and a sustainable society5; see Section 24.2 and Chapter 25. The international standard ISO 9000:2015 for quality management systems, as we discuss more in Chapter 21, defines quality as “the degree to which a set of inherent characteristics fulfils the requirements, i.e., needs or expectations that are stated, generally implied or obligatory”.

­

­

­

Figure 1.2 Some definitions of the quality concept.

1.2.2

Garvin’s five perspectives on quality

Garvin (1984) presents five approaches to the quality concept: the transcendent, product-based, user-based, manufacturing-based, and valuebased perspectives; see Figure 1.3.

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Part I Quality and quality management

Garvin’s five perspectives on quality

• • •

Transcendent Product-based User-based

• •

Manufacturing-based Value-based

Figure 1.3 Five perspectives of quality according to Garvin (1984).

The transcendent perspective derives from Plato’s view of beauty. Advocates of this view argue that as quality is identified when experienced, it cannot be conclusively defined – “quality lies in the eye of the beholder”. The product-based view holds that quality is possible to accurately measure and is determined by the ability to objectively and precisely measure the extent to which a product possesses certain desirable characteristics. The consequences of this approach are that, according to Garvin, higher quality in most cases costs more and that quality is an objective inherent attribute of the product, not something that the buyer or user can judge.

Proponents of the user-based approach argue that quality is determined by the customer. It concerns the degree to which the product fulfils the needs and expectations of the customer. The manufacturing-based approach relates to the fulfilment of tolerances and requirements in production.

Here, improved quality means less scrapping. According to the valuebased outlook, quality is defined in relation to cost and price. A highquality product possesses the desired attributes at an acceptable price or performance at an acceptable cost. Garvin’s own conclusion is that an organization should not just have one approach to the quality concept, but that different approaches are needed in different parts of the organization.

Among the definitions in Figure 1.2, Crosby’s definition is manufacturingbased, while Deming’s and Juran’s definitions involve a user-based perspective. Shewhart’s view of quality includes an interpretation that may be seen as a combination of a manufacturing-based (objective measurement) definition and a user-based (subjective assessment) definition; see Figure 1.2 and Shewhart (1931). Juran often clarifies his definition of “fitness for use” by emphasizing that this notion consists of two separate elements, where the first is that the product should be free from defects and the second that it should possess properties that will fulfil customer needs.

Our own definition, discussed below, is broader than the ones discussed in this section and includes a user-based perspective.

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1.2.3

Our view of the quality concept

For some time, the prevailing position, albeit expressed in different terms, has been that “the quality of a product is its ability to satisfy the needs and expectations of the customers”. Product here refers to goods (hardware), services (including software), or any combination of the two. It is the customer who determines the quality of products and, consequently, there is a need to begin with the customer when seeking to create and increase quality.

Our contention is that the definition of quality should be further expanded compared to the ones presented above and suggest the following definition: “the quality of a product is its ability to satisfy, and preferably exceed, the needs and expectations of the customers”.

Our definition in Figure 1.4 implies that it is not always sufficient to fulfil customer expectations. From time to time, someone finds a way to exceed these expectations; for example, by meeting needs that the customers were not previously aware of or thought that the product in question could satisfy. Such products are sometimes called disruptive innovations,6 but we prefer the concept of revolutionary products. These can change a whole market at once. Apple’s first iPhone was one such example.7 Cloudbased music streaming is another, as were weaving machines during the Industrial Revolution.

Figure 1.4 Our definition of the quality concept for products, including both goods and services and any combination of these.

If possible, customers should be surprised, delighted, and fascinated. In this way, organizations can create loyal customers who return and who, through various forums, tell others about their positive experiences; see more in Chapter 4. A key question is thus how to create products that positively surprise the customer.

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Part I Quality and quality management

As customers we do not just judge the individual product itself. We also make overall judgements of our experiences of the organization providing the goods and services. When buying a car, for example, we do not only consider the characteristics and performance of the vehicle. We also take into account aspects such as availability of spare parts, the possibility to service it, and how we are treated when communicating with the seller.

The quality of the goods is then only part of our total experience forming the basis for our product quality evaluation. According to this way of thinking, quality is seen more as a relationship between a product with its underlying provider organization and the customer than as a pure product characteristic. This is clearly expressed as customers increasingly weigh in various environmental aspects in their choices, both climate-related and work-related, including all observable parts of the supply chain. American Myron Tribus8 offers a view of the quality concept clearly emphasizing wholeness and relationships: Quality is what makes it possible for a customer to have a love affair with your product or service. Telling lies, decreasing the price or adding features can create a temporary infatuation. It takes quality to sustain love affair.

Love is always fickle. Therefore, it is necessary to remain close to the person whose loyalty you wish to retain. You must be ever on the alert to understand what pleases the customer, for only customers define what constitutes quality. The wooing of the customer is never done.

1.3

Customers, customer value, and customer needs

In this section we discuss the concepts of customer and customer needs.

First, however, we look at how customer value arises.

1.3.1

Customer value

The value that customers experience from a product is often created when the product is used by the customer, not just in her possession. In such cases, the user herself creates part of the customer value. Customer value is a concept closely related to our definition of product quality. Customer value is separate from market value, which is the price that the product can be sold for.

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© THE AU THORS AND S T UDENTLIT TER AT UR

Chapter 1 Some basic quality concepts

It could be argued that the customer value of a drill driver does not arise when it is purchased (although at a “good price”) but when it is used to drill holes. However, for some people having nice, and perhaps also expensive, machines in the toolbox is highly valuable even if they are never put into use. A newly purchased dress might provide a sense of security and status when in the closet. Like the drill driver, it may thus be thought of as having a certain customer value in itself. Nonetheless, a more tangible value arises when it is worn.

In the case of services, customer value often arises in collaboration with the product provider. In our view the value of a restaurant meal depends not only on the food, the service, and the environment, but also on how we interact with the waiter and how we manage to clarify our wishes and food allergy problems. The value of a family holiday trip with a tour operator to a great extent depends on what we ourselves do at the resort as well as, frequently, on the actions and behaviour of other nearby guests.

Providers of goods and services thus only contribute with some of the customer value. The rest is generally created by the customer. We can say that the value is created by the provider together with the customer, which means that customer value is co-created.

1.3.2

The concept of customer

Based on the definition of quality, it is obvious that the concept of customer is vital. Our concept of customer includes the people or other entities for whom value is created or co-created by the organization by its activities and products, both goods and services, both present and future; see Figure 1.5.

Figure 1.5 In this book the customer is seen as everyone for whom the organization wants to create value.

© THE AU THORS AND S T UDENTLIT TER AT UR

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Bo Bergman, professor emeritus, quality sciences, Chalmers University of Technology.

Ingela Bäckström, professor, quality management, Mid Sweden University.

Rickard Garvare, professor, quality technology, Luleå University of Technology.

Bengt Klefsjö, professor emeritus, quality management, Luleå University of Technology.

Quality

FROM CUSTOMER NEEDS TO CUSTOMER SATISFACTION

A new business landscape has emerged: digital developments are accelerating, offers are created by integrating goods and services, sustainability is increasingly recognized as a vital quality dimension, and global competition has intensified.

In this context, an approach to quality management with a strong focus on customer needs and expectations, and based on improvement and innovation is more important than ever.

Following a discussion on quality and quality management, the book elaborates on business development, how to co-create value with customers and employees, and how to organize improvement work, including developing products and processes. The entire chain from identifying customer needs to measuring customer satisfaction and feedback is addressed. The last part of the book discusses developing society and the role of quality management for sustainability and the future of society.

Through its holistic view on quality, previous editions of this book have served as an appreciated textbook at many universities and colleges. Many companies and public organizations have used it for their development work. In this extensively revised edition, results from current research and new practical applications have been incorporated. In addition, new concepts, methodologies, and tools are explained based on the authors’ systems concept of Total Quality Management.

Fourth edition

Art.nr 4633

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