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The Costs and Benefits of Quality Management Systems Dr Joe Gunning School of Built Environment University of Ulster
Q
TQM Certified QMS Documented QMS Quality Plans
Quality Control
Time
Intermediate goals of quality development
Key Elements of a Management System • • • • • • •
Overall Policy Clear Aims and Objectives Effective Programmes Documentation Working Procedures Record-Keeping Audit and Review
4 Basic Requirements of a QMS 1.
Everyone should play their part – and know what their part is.
2.
There should be a policy for quality attainment set down by management and understood by all.
3.
Activities should be as effective and efficient as possible – with procedures, instructions and training.
4.
Continuous review and updating is required to ensure continuing compliance and relevance.
• • • • • •
Define WHAT is to be done Explain WHY it is done Establish WHEN it is to be done Control HOW it is to be done Show WHERE it is to be done Identify WHO is to do it
The ISO 9000:2000 family of standards on quality management systems BS EN ISO Name
Purpose
9000:2000
Quality management systems – Fundamentals and vocabulary
Describes the fundamentals and specifies the terminology for a QMS
9001:2000
Quality management systems Requirements
Specifies the requirement for a QMS where an organization needs to demonstrate its ability to provide products that fulfil customer and applicable regulatory requirements and aims to enhance customer satisfaction
9004:2000
Quality management systems – Guidelines for performance improvements
Provides guidelines that consider both the effectiveness and efficiency of the QMS, with the aim of improving the performance of the organization and satisfaction of customers and other interested parties
Reasons for Quality Certification • Gain of market advantage • Customer pressure (present or future) • Compliance with specifications / regulations • Improved quality of product and service • Avoidance of multi-assessment
Benefits of Quality Management Systems • Satisfied customers with repeat business • Enhanced reputation and market share • More consistent performance, with fewer defects and claims • Higher productivity, with reduced wastage and delays • Better planning and communication • Clear operating procedures • Increased morale and job satisfaction
Quality Costs for a Typical RMC Producer Notional % of Total 1
Costs of Prevention a Auditing and review of QMS b Periodic updating of the system c On-going training of staff
2 2 4 Sub total
2
Costs of Appraisal a Increased testing of raw materials b Increased sampling and testing at plant/on site c Operation of a quality control system (ie Cusum)
10 10 2 Sub total
3
8%
Costs of Quality Failure a1 Rejected loads – at plant – to be scrapped or downgraded a2 Rejected loads – on site – to be scrapped or downgraded b Consequential claims by customers c Loss of goodwill/reputation – incalculable!
22% 10% 10% 50%
Sub total
70%
Grand Total
100%
Total quality – related costs
Quality related costs
Failure
Appraisal
Prevention Quality awareness and improvement
Increasing quality awareness and improvement activities Source: British Standard BS6143, 1991
Quality Management – Diagnosis of State STATE
UNCERTAINITY
AWAKENING
UNDERSTANDING
INSIGHT
CERTAINITY
Quality cost as % of turnover
Unknown (Probably 20%)
Assuming 3% Actually 15%
Assuming 7% Actually 12%
Assuming 5% Actually 8%
Assuming 3% Actually 3%
Summary of attitude to quality
“We don’t know why we have a quality problem”
“We try to motivate but our efforts are fragmented”
“Problems Solved” by a quality improvement programme
“Preventive efforts are a natural activity”
“We know why we don’t have a quality problem”
ASPECT
Initial Costs of a QMS 1. 2. 3. 4.
Consultant Fees: £10,000 Document Development: £5,000 Staff Training: £3,000 Certification: £2,000 ______________ TOTAL: £20,000
Maintenance Costs -
Auditing Reviewing Updating documentation Administration Adherence to procedures Periodic reassessment/surveillance
PEOPLE
PERFORMANCE MEASUREMENT
TEAMWORK SYSTEM (ISO 9000) QA/QMS
EFFECTIVE COMMUNICATIOTION CULTURAL CHANGE TOTAL COMMITMENT
TQM
Features of Total Quality • Commitment from Senior Management • Philosophy of quality and continuous improvement • Customer Focus • Closeness to suppliers • Benchmarking against best practice • Training in quality principles • Trusting culture • Employee empowerment • Target of zero defects • Measurement of quality performance
Recommendations -
Involve senior management Retain good existing practices Involve as many people as possible Train all relevant staff Delay certification until fully prepared Allocate all costs carefully Circulate key cost data Use audits and reviews to drive improvements
Q
TQM Certified QMS Documented QMS Quality Plans
Quality Control
Time
Intermediate goals of quality development
Key Elements of a Management System • • • • • • •
Overall Policy Clear Aims and Objectives Effective Programmes Documentation Working Procedures Record-Keeping Audit and Review
4 Basic Requirements of a QMS 1.
Everyone should play their part – and know what their part is.
2.
There should be a policy for quality attainment set down by management and understood by all.
3.
Activities should be as effective and efficient as possible – with procedures, instructions and training.
4.
Continuous review and updating is required to ensure continuing compliance and relevance.
• • • • • •
Define WHAT is to be done Explain WHY it is done Establish WHEN it is to be done Control HOW it is to be done Show WHERE it is to be done Identify WHO is to do it
The ISO 9000:2000 family of standards on quality management systems BS EN ISO Name
Purpose
9000:2000
Quality management systems – Fundamentals and vocabulary
Describes the fundamentals and specifies the terminology for a QMS
9001:2000
Quality management systems Requirements
Specifies the requirement for a QMS where an organization needs to demonstrate its ability to provide products that fulfil customer and applicable regulatory requirements and aims to enhance customer satisfaction
9004:2000
Quality management systems – Guidelines for performance improvements
Provides guidelines that consider both the effectiveness and efficiency of the QMS, with the aim of improving the performance of the organization and satisfaction of customers and other interested parties
Reasons for Quality Certification • Gain of market advantage • Customer pressure (present or future) • Compliance with specifications / regulations • Improved quality of product and service • Avoidance of multi-assessment
Benefits of Quality Management Systems • Satisfied customers with repeat business • Enhanced reputation and market share • More consistent performance, with fewer defects and claims • Higher productivity, with reduced wastage and delays • Better planning and communication • Clear operating procedures • Increased morale and job satisfaction
Quality Costs for a Typical RMC Producer Notional % of Total 1
Costs of Prevention a Auditing and review of QMS b Periodic updating of the system c On-going training of staff
2 2 4 Sub total
2
Costs of Appraisal a Increased testing of raw materials b Increased sampling and testing at plant/on site c Operation of a quality control system (ie Cusum)
10 10 2 Sub total
3
8%
Costs of Quality Failure a1 Rejected loads – at plant – to be scrapped or downgraded a2 Rejected loads – on site – to be scrapped or downgraded b Consequential claims by customers c Loss of goodwill/reputation – incalculable!
22% 10% 10% 50%
Sub total
70%
Grand Total
100%
Total quality – related costs
Quality related costs
Failure
Appraisal
Prevention Quality awareness and improvement
Increasing quality awareness and improvement activities Source: British Standard BS6143, 1991
Quality Management – Diagnosis of State STATE
UNCERTAINITY
AWAKENING
UNDERSTANDING
INSIGHT
CERTAINITY
Quality cost as % of turnover
Unknown (Probably 20%)
Assuming 3% Actually 15%
Assuming 7% Actually 12%
Assuming 5% Actually 8%
Assuming 3% Actually 3%
Summary of attitude to quality
“We don’t know why we have a quality problem”
“We try to motivate but our efforts are fragmented”
“Problems Solved” by a quality improvement programme
“Preventive efforts are a natural activity”
“We know why we don’t have a quality problem”
ASPECT
Initial Costs of a QMS 1. 2. 3. 4.
Consultant Fees: £10,000 Document Development: £5,000 Staff Training: £3,000 Certification: £2,000 ______________ TOTAL: £20,000
Maintenance Costs -
Auditing Reviewing Updating documentation Administration Adherence to procedures Periodic reassessment/surveillance
PEOPLE
PERFORMANCE MEASUREMENT
TEAMWORK SYSTEM (ISO 9000) QA/QMS
EFFECTIVE COMMUNICATIOTION CULTURAL CHANGE TOTAL COMMITMENT
TQM
Features of Total Quality • Commitment from Senior Management • Philosophy of quality and continuous improvement • Customer Focus • Closeness to suppliers • Benchmarking against best practice • Training in quality principles • Trusting culture • Employee empowerment • Target of zero defects • Measurement of quality performance
Recommendations -
Involve senior management Retain good existing practices Involve as many people as possible Train all relevant staff Delay certification until fully prepared Allocate all costs carefully Circulate key cost data Use audits and reviews to drive improvements
