1

KOE – 085
Quality Management
 UNIT – II
Organization structure and design:
Quality function, decentralization, designing and fitting,
organization for different type products and company,
economics of quality value and contribution, quality cost,
optimizing quality cost, seduction program.
Human Factor in quality:
2 Attitude of top management, cooperation of groups,
operator’s attitude, responsibility, causes of apparatus error
and corrective methods.
 3 Organization Structure
Organization
structure and Organizational structure depends on business functions and the management. The
design:
organization structure for the management of quality requires, the knowledge of the
Quality function,
factors that influence this activity. These factors are:
decentralization,
designing and
 Company policies and objectives
fitting, organization
for different type
 Type of Business
products and
company, economics
 Type of product
of quality value and
contribution, quality  Company size and Organization
cost, optimizing
quality cost,  Market and Customer
seduction program.
 4 Organization Design
Organization
structure and Three basic steps in designing any organization:
design:
Quality function,  Identification and grouping of jobs
decentralization,
designing and
 Allocation of Authority and responsibility
fitting, organization
for different type
products and  Establishment of Co-operative relationships
company, economics
of quality value and
contribution, quality
cost, optimizing
quality cost,
seduction program.
 5 Organization Structure & Design
Organization
structure and Quality Function
design:
Quality function,
The main quality functions can be considered in two
decentralization, distinct groups.
QE: This comprises of QC: It is concerned with
designing and the interpretation and
specialist staff functions
fitting, organization implementation of quality
as well as activities
for different type  Quality Engineering connected with the plans that comprises of in
products and process and post
 Quality Control development, defining,
production testing, which
company, economics and planning of quality
of quality value and during the re- are aimed at ensuring the
production stage. quality conformance of
contribution, quality
products.
cost, optimizing
quality cost,
seduction program.
 Quality Engineering
6
 Advice to the Management on the quality policy of the company and laying down
Organization realistic quality objectives.
structure and  The analysis of the customers quality requirements and the formulation of design
design: specifications.
 The review and evaluation of product design with a view to improving quality and
Quality function,
reducing quality costs.
decentralization,
 Defining quality standards and preparation of product specifications.
designing and
fitting, organization  Planning process controls and formulation of procedures to ensure quality
conformance.
for different type
products and  Development of quality control techniques and inspection methods including the
design"of special test equipment.
company, economics
of quality value and
 Conducting process-capability studies.
contribution, quality  Analysis of quality costs.
cost, optimizing  Planning and Organising quality control for incoming stores and materials
quality cost, including the capacity verification of the vendors.
seduction program.  Quality audit of the company.
 Organising training in quality programme.
 Quality Control
7  Assistance in establishing quality controls at various points of the manufacturing
process.
Organization
 Maintenance and calibration of process control equipment.
structure and
design:  Investigation of defects and assistance in solving quality problems during production.

Quality function,  Implementation of quality control measures for incoming materials and stores.
decentralization,  Running a test laboratory for carrying out necessary test and analysis.
designing and
 Organising stage or interstage inspection or spot checks whenever required.
fitting, organization
for different type  Arranging final inspection to assess the quality of the end-product and the
products and effectiveness of quality control measures.
company, economics  Checking the quality of the packaging to ensure that the product is able to withstand
of quality value and transportation hazards.
contribution, quality  Conducting tests for the measurement and analysis of goods on which customer
cost, optimizing complaints have been received.
quality cost,
 Feedback of defect data and customer complaints to the Quality Engineering Section.
seduction program.
 Decentralization of Quality Functions
8

Organization  It is not essential for all the above work elements to be performed
structure and directly by the Quality Department.
design:
 All that is required is, that these tasks be performed by the most
Quality function,
decentralization,
appropriate individual or group to ensure effective quality
designing and management.
fitting, organization  Based on the overall company policy, the Quality Manager may
for different type
recommend to the Management, the allocation of various quality
products and
company, economics tasks to the department or sections which can perform these with
of quality value and maximum efficiency and economy.
contribution, quality
cost, optimizing
quality cost,
seduction program.
 Decentralization of Quality Functions
9

Organization The main benefit is the

structure and smooth flow of production
design: and less interdepartmental
friction.
Quality function,
decentralization, On the other hand, the longer
designing and feedback loop results in
fitting, organization slower reactions, which
means that, should any defects
for different type
arise in the product, a
products and relatively longer time is taken
company, economics before corrective measures
of quality value and are applied and thus a
contribution, quality substantial number of
cost, optimizing defective products produced
quality cost, in the meantime.
seduction program.
 Designing Organization for Quality Management
10

Organization  Quality management is basically a staff function, the design of its

structure and organisational structure should start from the top downwards.
design:
 It is the responsibility of the quality manager to provide the
Quality function,
decentralization,
necessary staff advice.
designing and  Therefore, his first decision will be whether or not he will be able to
fitting, organization perform this function by himself ?
for different type
products and  If not, what additional human help he will require?
company, economics
 The internal structure of the quality component is generally a line
of quality value and
contribution, quality
organisation, because quality is its prime function.
cost, optimizing
quality cost,
seduction program.
 Designing Organization for Quality Management

11
Quality
Manager
Organization
structure and
design:
Quality Cost Quality Market Quality
Quality Control
Quality function, Analysis Engineering Research
decentralization,
designing and
fitting, organization Quality Inspection &
for different type Planning Testing
products and
company, economics
of quality value and Inward
Standards &
contribution, quality Material
Specifications
cost, optimizing
Control
quality cost,
seduction program. Test Equipment Process
Design Control
 Fitting the Quality Component in a Company Organisation

Organization  Single product line at the one location (medium-sized company)

structure and  Multiproduct company at one location (medium-sized company)
design:
 Single-product, multiplant situation.
Quality function,
 Large divisionalised corporation with different product divisions.
decentralization,
designing and  A jobbing factory, manufacturing according to customers' designs and
fitting, organization specification.
for different type  Cottage industry.
products and
company, economics
of quality value and
contribution, quality
cost, optimizing
quality cost,
seduction program.
Single product line at the one location (medium-sized company)

 In this case, a medium-sized company is having one basic product line (say,
compressors) for industrial use.
 All company operations including design and manufacturer, are carried out at
one location
 A single product oriented quality engineering group will be more effective and
economical.
 Inward material control, final inspection, and the test laboratory are centralized
for economy and effective control.
 Single product line at the one location (medium-sized company)

Organization Chief Executive

structure and
design: Quality Production
Manager Manager
Quality function,
decentralization, Quality Process Quality
Foundry Machine Shop
Engineer Contro;l
designing and
fitting, organization
for different type Foundry Machining Electrical Shop Assembly
products and
company, economics
Electrical Assembly
of quality value and
contribution, quality
Incoming
cost, optimizing Final Inspection Material
Inspection
quality cost,
seduction program.
Test Lab
 Multiproduct company at one location (medium-sized company)

 In this case, the manufacturing operations of the company are organised

Organization
on the product line system, rather than on a functional basis.
structure and
design:  Products of a similar nature are grouped in production shops, so that the
same plant may be utilized for different products.
Quality function,
decentralization,  Here, both QE and QC components are organised on a product-line basic
designing and in conformity with the manufacturing organisation.
fitting, organization  In this organisation process control also includes the final inspection of
for different type the product.
products and
company, economics
of quality value and
contribution, quality
cost, optimizing
quality cost,
seduction program.
 Multiproduct company at one location (medium-sized company)

Chief Executive
Organization
structure and Production
Quality Manager
Manager
design:
Quality function, Quality
Engineering Foundry Product A
decentralization,
designing and Inspection
Quality Control
Equipment Design Products B,C Products D,E,F&G
fitting, organization & Fabrication
Planning

for different type

products and Product (A,B,C) Product (D,E,F)
Process Control
(Product A)
company, economics
of quality value and Process Control
Foundry Inspection (Product - B&C)
contribution, quality
cost, optimizing Process Control
Incoming Material (Product -D,E,F,G)
quality cost, Inspection

seduction program.
 Single-product, multiplant situation

 The quality organisation in a relatively large company

Organization
with more than one manufacturing plant for the same
structure and
design: product.
Quality function,  It is possible that the machinery and equipment in the
decentralization, various plants may not be exactly similar, since the
designing and number of plants would have increased as the
fitting, organization company grew and therefore, the plants established
for different type
later are likely to be more advanced.
products and
company, economics  Thus, although design, sales and other functions that
of quality value and are independents of production techniques have been
contribution, quality centralised.
cost, optimizing
quality cost,  Engineering is decentralised and placed under the
seduction program. respective plant managers.
 Single-product, Multiplant situation

Organization Chief Executive

structure and
design: Quality
General
Manager
Manager Production
Quality function,
decentralization,
Quality
designing and QC for Plant A Plant A
Engineering
fitting, organization
for different type General Product
Market Quality Process Quality Process Control
Quality Plant B
products and Survey Planning Planning & Inspection

company, economics
Inspection
of quality value and New Design Inward Material
Equipment Plant C
Quality Control Design Inspection
contribution, quality
cost, optimizing
quality cost, QC for Plant D QC for Plant B QC for Plant C

seduction program.
 Large divisionalised corporation with different product divisions

 As companies grow and diversify their products, a stage comes,

Organization when they have to change from a functional to a divisional
structure and organisation.
design:
 In the latter organisation, separate divisions for individual
Quality function,
decentralization,
products or groups of similar products are established.
designing and  The top management also has small specialised staff
fitting, organization components to advice it in their respective fields.
for different type
products and  In this situation, every division has its own quality management
company, economics organisation which works directly under the General Manager
of quality value and of the division.
contribution, quality
cost, optimizing
quality cost,
seduction program.
 Large divisionalised corporation with different product divisions

Organization
Chief
structure and Executive
design:
Quality function,
decentralization, Quality
Other Staff
Advisor
designing and
fitting, organization
for different type Division B Division C
Division A (same as in (same as in
products and
Division A) Division A)
company, economics
of quality value and Other
contribution, quality Quality
Functional
Department
cost, optimizing Groups
quality cost,
seduction program.
 A Jobbing factory

 The main characteristic of a jobbing company is, that it has

Organization no specific line of production.
structure and
design:  It has the facilities of various specialised technologies, and
Quality function,
is capable of undertaking any job within the capacity of the
decentralization, facilities available.
designing and  The jobs undertaken and specification are according to the
fitting, organization
customers designs.
for different type
products and  Process control essentially consists of stage inspection
company, economics which may be decentralised to the shops for smooth
of quality value and functioning.
contribution, quality
cost, optimizing
quality cost,
seduction program.
 A jobbing factory

Chief Executive
Organization
structure and
Production
design: Quality Manager
Manager
Quality function,
decentralization, Quality
Test Lab
Foundry &
Engineering Forge
designing and
fitting, organization
for different type Foundry &
Machining Machining
Forging
products and
company, economics
Fabrication &
of quality value and Metal finishing
Assembly
Metal Finishing
contribution, quality
cost, optimizing Stage Inspection
Fabrication &
Final Inspection (Decentralised
quality cost, to shops) Assembly
seduction program.
d
 A Small Company Working as a Cottage Industry
 The size of a company often indicates the size and organisation
Organization of its quality component.
structure and design:
 Small company neither needs nor can afford a large staff
Quality function,
employed exclusively on quality control jobs.
decentralization,
designing and fitting,  As an extreme, all quality functions may be performed by only
organization for one or two persons.
different type products
and company,
economics of quality
value and contribution,
quality cost,
optimizing quality
cost, seduction
program.
 A Small Company Working as a Cottage Industry

Organization
Proprietor-
structure and design: Cum-Manager
Quality function,
decentralization, Procurement &
designing and fitting, Storage
organization for
different type products Mechanical
Components Quality
and company, Assembly Engineer
Manufacture
economics of quality
value and contribution,
quality cost, Examiner
optimizing quality
cost, seduction
program.
 Economics of Quality

Organization  Economics is the driving force for any industrial enterprise.

structure and design:  One of the main aims of an industry is to secure economics
Quality function, gains in the form of profit.
decentralization,
designing and fitting,
 The desirability of any industrial function or activity is
organization for generally assessed by the economic yardstick.
different type products
and company,
economics of quality
value and contribution,
quality cost,
optimizing quality
cost, seduction
program.
 What Quality Products ??

Organization  The quality of a product is subject to the law of supply and

structure and design: demand in the same manner as its price.
Quality function,  Since improvement in quality generally involves increased
decentralization, cost of manufacture and a consequently higher selling price,
designing and fitting, it is the buying capacity of the customer which sets upper
organization for
limit to the quality of the product.
different type products
and company,  When a higher quality product is very expensive, the
economics of quality customer may option for a cheaper product of lower quality.
value and contribution,
quality cost,  However, there is a certain minimum limit for the quality
optimizing quality level, again set by the customer; the product of quality lower
cost, seduction than this level will not be acceptable to the customer at any
program. price.
 Quality Value and Contribution
 To appreciate the concept of quality value, let us suppose
Organization that a product can be manufactured at two quality levels, i.e.
structure and design: Grade A (the Deluxe model) and Grade B (the Popular
Quality function,
model).
decentralization,  It is found that the, Deluxe model can be sold at Rs 500/- per
designing and fitting, unit, and the Popular model at Rs 400/- per unit.
organization for
 It can be seen that the increase in quality from grade A to B
different type products
gives additional value to the product which is worth Rs.
and company,
economics of quality
100/- to the customer.
value and  Let us further suppose that the difference in production costs
contribution, quality of the two model is Rs 60/- per unit.
cost, optimizing
 Thus in this particular case an investment of Rs. 60/- in
quality cost, seduction
quality, results in the increase in value to the extent of Rs.
program.
100/-. The difference between the two i.e. Rs 40/- is the net
increase in quality contribution (towards profitability).
 Quality Value and Contribution
The general relationship between the value and the cost of a product with increasing-quality
levels-shown in Fig.
Organization
structure and design:
Quality function,
decentralization,
designing and fitting,

Value (Cost in Rs.)

organization for
different type products
and company,
economics of quality
value and
contribution, quality Quality Contribution
cost, optimizing
quality cost, seduction
program. Increasing Quality
 Quality Costs
In quality control practice, any costs which is incurred to
Organization
structure and design:
ensure that the outgoing product is of requisite quality is
termed as Quality Cost.
Quality function,
decentralization, Four Categories of
designing and fitting,
Quality Costs
organization for
different type products  Prevention costs
and company,
economics of quality
 Appraisal costs
value and contribution,  Internal failure costs
quality cost,
optimizing quality  External failure
cost, seduction
program.
 Optimizing above costs is known as Quality Cost
optimization.
 Quality Costs

Prevention costs: Appraisal costs:

Incurred to prevent poor quality in the Incurred to determine whether products and
products or services being produced services are conforming to their
requirements or customer needs.
Examples: quality training, quality audits,
market research, design reviews, prototype Examples: inspections, testing, vendor
inspection verifications

Internal failure costs: External failure:

This nonconformance is detected This nonconformance is detected after being
prior to the product being shipped or delivered to outside parties
the service being delivered to outside
Parties Examples: recalls, returns and allowances,
warranties, discounts due to defects, lost
Examples: scrap, re-work down time, sales
repairs, design and process changes
31 Quality Costs versus defects
32 Cost Reduction Programs
 Preventive Quality control programs should be utilized in such a manner as to yield
maximum results.
 The frequency of failure in the process result in the production of defective job.
 For this isolate the product having high rate of rejection
33 Cost Reduction Programs
 On the basis of cost of failures of products, graph will change to:

 The cause showing the highest failure cost deserves first attention.
34 Process Control
 Process control deals with architecture, mechanisms and algorithms for controlling the
output of a specific process.
 It is statistics and engineering discipline
 Can be divided into following categories:
 Discrete Process
 Continuous Process
 Acceptance Sampling
 Statistical Process Control
 Troubleshooting
35 Human Factor
 Most important and considered critical component
 Most difficult to control
 Matters at all levels
 There is increased probability of accidents , errors, lower productive output, increase in lost
time, higher medical cost etc.
Various human factors are:
1. Cycles of human factor
2. Attitude of top management
3. Cooperation of functional groups
4. Operators attitude
5. Operators responsibility
6. Causes of apparatus error.
36 Human Factor
 Most important and considered critical component
 Most difficult to control
 Matters at all levels
 There is increased probability of accidents , errors, lower productive output, increase in lost
time, higher medical cost etc.
Various human factors are:
1. Cycles of human factor
2. Attitude of top management
3. Cooperation of functional groups
4. Operators attitude
5. Operators responsibility
6. Causes of operator error.