operations management chapter 6 managing quality

cost quality

cost, quality A framework for quantifying the total cost of quality-related efforts and deficiencies.

Fitness for consumption is a very broad definition of quality. Operations managers must define quality in more specific terms that are relevant for their products and intended customers. In Chapter 2 we noted various aspects of product quality, addressing product design and conformance. Aspects of design quality address product functions, features, and characteristics. This includes how well the product does what the consumer needs, but it also includes ancillary aspects such as how environmentally friendly the product is, or how socially responsible the providing company is. Conformance quality is measured by how well an actual delivered product matches the dimensions and traits specified in its design.

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It is easy to draw parallels between the quality dimensions for tangible products and those for service products. Notions of performance, features, reliability, durability, and conformance can be applied to the task portion of the service quality dimension. For example, the durability of a service might be associated with how well a service is performed (how often do you have to get your hair "permed"?). Both tangible good and service quality dimensions contain some aspects that are fairly easy to measure objectively, and others that are mostly subjective and very difficult to assess. For example, aesthetics and perceived quality dimensions are both difficult to quantify, mainly because judgments vary widely from customer to customer and from situation to situation. Surprisingly, quality is poorly understood and weakly defined in some firms. Managers in different functions sometimes emphasize different dimensions of quality . Marketing managers tend to care a lot about product aesthetics and perceptual aspects such as brand image. Design engineers tend to focus on aspects such as performance, reliability, and durability. Operations personnel, on the other hand, often focus on conformance quality. While each functional group has its primary area of focus, it is important for all managers in a given firm to understand all of the dimensions of quality that are important to customers.

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It is not enough that managers within a given firm practice quality management principles; they need to permeate throughout the supply chain (for example, see the Get Real box on tracing quality in food supply chains on page 174). Quality is an important consideration when selecting suppliers. Practices such as single sourcing and full partnerships with suppliers can be used to extend quality management practices upstream and downstream. Some large companies help their suppliers understand and implement quality management practices. Similarly, companies work closely with their customers in order to clearly define customers' specifications of quality. Ultimately, the customer decides whether a "quality" product has been delivered.

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Table 6-5 shows the levels of quality associated with other sigma levels, along with some of the quality levels seen in our everyday lives. In truth, very few business operations ever attain a Six Sigma level of quality. More important than the absolute goal are the quality improvement processes that comprise a Six Sigma program.

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The TQM and quality initiatives we have discussed up to this point are company specific; project improvements and their evaluation varies from company to company. Operations managers often want to know how their operational quality processes compare to others. In addition, prospective customers often want assurances that a given supplier has achieved some level of quality performance. External audits in the forms of certifications and awards programs help to provide universal standards that managers and customers can use to gauge a company's quality progress. In this section, we focus on two such programs: ISO 9000 and the Malcolm Baldrige Quality Award.

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Six Sigma: A Systematic Approach to Quality Management six Sigma

six Sigma management program that seeks to improve the quality of process outputs by identifying and removing the causes of defects and variation in the various processes. In addition to general methods for quality improvement that can be applied by all workers, companies often need to organize specific quality improvement projects. In recent years, the Six Sigma program for quality and process improvements has been adopted by many of the larger firms around the world. Six Sigma is a management strategy that seeks to improve the quality of process outputs by identifying and removing the causes of defects and variation in the various processes.

standard deviation

standard deviation A measure of the variability or dispersion of a population, data set, or distribution. The term sigma refers to the Greek symbol, σ, that represents the standard deviation of values for the output of a process. The standard deviation is an indicator of process variability (inconsistency). In statistics, standard deviation is a measure of the variability or dispersion of a population, a data set, or a probability distribution. A low standard deviation indicates that the data points tend to be very close to the same value, typically the mean, while high standard deviation indicates that the data are spread out over a large range of values. As standard deviation increases, there is greater uncertainty about the exact outcome. As previously noted in this chapter, variability is regarded as a source of quality failures. A primary objective of the Six Sigma method is to design and improve products and processes so that sources of variability are reduced.

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• First, it is customer-oriented, with a great emphasis placed on defining, meeting, and achieving customer satisfaction. • Second, it emphasizes the need to make improvements on a regular basis. • Third, it recognizes the importance of product design to quality by including product realization (i.e., all the processes and activities a firm undertakes to design, develop, and build a new product) in the standard. • Finally, the standard emphasizes the definition, measurement, and documentation of processes. In general, the standard is fairly flexible in that it tells management what to do, not necessarily how to do it. Businesses are motivated to seek ISO 9000 certification for several reasons. Increasingly, firms are required to be certified to sell products in most major markets. Virtually every major industrial nation in the world has accepted these standards. Certification at least gives the appearance that a company will be a reliable supplier. Beyond appearances, ISO 9000-certified firms benefit from internal improvements as a result of the certification. To pass the audit, employees usually must reexamine and critically challenge their practices. The certification process can also improve communication links between functional areas within the firm. It forces people to forge agreements on important issues such as the firm's definition of quality and its identification of its target market. The success with ISO 9000 has caused the ISO organization to extend the focus of business issues covered by such standards. For example, in 1996 ISO introduced the ISO 14000 standard for environmental systems. This standard is discussed in greater detail in Chapter 16.

The PDCA cycle consists of four separate but linked activities:

• Plan. Identify a problem by studying the current situation to detect a gap between it and the desired future situation. Identify actions to improve the situation (i.e., close the gap). Formulate a plan for closing the gap (e.g., a plan for reducing the number of defects coming from a specific process). • Do. Having formulated a plan, implement it. • Check. Use performance metrics to monitor and inspect the results. Identify unplanned problems elsewhere in the system or previously hidden problems uncovered by the changes. • Act. Review information collected in the check step and take corrective actions to prevent reoccurrence of problems. Institutionalize changes (through revised procedures and associated training) as a starting point for the next PDCA cycle. Page 182 The PDCA method is simple, giving all employees the impetus and guiding structure for attacking problems on a daily basis. Workers at all levels can be trained in the PDCA process and in the use of the quality tools referenced above.

Recognizing the Total Impacts of Quality Performance In addition to affecting sales and other direct measures of business performance, poor product quality can have hidden or indirect effects. For example, poor quality can affect inspection, rework, and warranty costs—elements often buried in a company's overhead expenses. A focus on quality management demands that the total costs and benefits of quality performance be first understood by everyone in the organization. This usually requires a quite involved and far-reaching analysis. An operations management framework known as a cost of quality (COQ) analysis was developed by Feigenbaum to help clarify the cost impacts of poor conformance quality. COQ identifies and assesses four major cost categories: prevent cost. Appraisal cost. Internal failure cost External failure cost

• Prevention costs result from efforts to prevent product defects (nonconforming products), and from efforts needed to limit both failure and appraisal costs. Such costs include resources spent on planning, new-product reviews, investments in more capable processing equipment, training, process control, and quality improvement projects. • Appraisal costs result from inspections used to assess products' quality levels. Such costs include resources spent on incoming material inspections, product and process inspections, inspection staff salaries, test equipment, and development of test procedures. • Internal failure costs result from defects that are found in products prior to their shipment to customers. These costs include scrapped materials, salvage and rework, excess material inventories, and other costs of correction. • External failure costs result from defects that are found only after products reach customers. These costs include complaint settlements, loss of customer goodwill and future sales, returned materials, warranty work, and field service or repairs. Prevention costs are the costs of activities aimed at eliminating the potential causes of product defects, or failures, while appraisal costs are the costs of activities aimed at ensuring that defective products are identified and not delivered to customers. Failure costs include both the internal costs of defects found inside the company and the external costs of defects found by customers.

The core values of quality management are fleshed out in various quality improvement methodologies, certification standards, and awards criteria. In the following sections, we describe several methodologies and standards that you are likely to encounter, namely:

Plan-Do-Check-Act Cycle Six Sigma Approach to Quality Improvement ISO 9000 Series: An International Quality Standard Malcolm Baldrige Award

As project teams work through the DMAIC process, they focus on several objectives:

1. Each critical-to-quality (CTQ) characteristic should be defined from a customer's perspective and in a way that it can be measured as objectively as possible. 2. It is important to determine and consider the future market and technology strategies for the product, as well as the strategies for the processes that are involved in delivery of the CTQ characteristics. 3. The quality improvement tools described in the supplement to this chapter are especially useful in the analyze, improve, and control steps of the process. 4. If the data do not already exist, the project team needs to develop a way to measure important outcomes on a frequent and regular basis. 5. The lessons learned from the process should be documented, and the final problem solution should be implemented in all applicable areas.

Over the years, increased awareness of the importance of quality has inspired the introduction of numerous quality awards, at the city, state, and international levels. At present, some 40 U.S. states have their own quality awards programs in place. These quality award programs have helped formalize the ways that firms consistently design, produce, and deliver high-quality products. The Malcolm Baldrige National Quality Award is the foundation on which many of the current state, national, and international awards are based. It is a national quality award bestowed by the United States National Institute for Standards and Technology (NIST) in recognition of superior quality and performance excellence. The Baldrige Award was originally designed to strengthen American competitiveness by:

1. Helping improve organizational performance practices, capabilities, and results. 2. Facilitating communication and sharing of "best practice" information among all organizations. 3. Serving as a working tool for understanding and managing performance and for guiding planning and opportunities for learning. Separate awards are given to organizations in manufacturing, services, small business, education, and health care. The list of past winners (see www.quality.nist.gov) includes many firms from the elite of American industry. Each award provides other companies with a way to benchmark their quality progress. In addition, award winners can serve as role models for firms seeking to improve. Table 6-8 shows the seven award examination categories and the scoring system used by the NIST to evaluate award applicants. The categories and weights assigned to each category have changed over time as the reviewers have become aware of the changing requirements of business. For example, the emphasis on supplier partnering is recent and reflects the increasing importance of the supply chain. As you can see, the core values of TQM are well represented in these evaluation categories.

Plan-Do-Check-Act Cycles (Deming Wheel)

: A process for improving quality that describes the sequence used to solve problems and improve quality continuously over time; also known as the <i>Deming Wheel</i> or <i>Deming Cycle.</i> reiteration A popular methodology used to guide problem identification and solution is the plan-do-check-act cycle (PDCA), also known as the Deming Wheel or Deming Cycle (in honor of W. Edwards Deming, the man who frequently used it). The PDCA cycle (see Figure 6-2) describes the sequence used to solve problems and improve quality continuously over time.

design for six Sigma

A design approach that balances customer requirements with the constraints and capabilities of the supporting manufacturing and service processes reiteration The DMAIC process is usually aimed at improving existing products and their supporting operational processes. A similar approach has been developed to guide design decisions made in the creation of new products. Design for Six Sigma (DFSS) is an approach in which a cross-functional team designs products and processes in a way that balances customer requirements with the constraints and capabilities of the supporting manufacturing and service processes. The primary difference between DFSS and DMAIC is that DFSS takes place in the development phase, whereas DMAIC usually takes place after a new product has been launched. DFSS makes use of design engineering tools that may be used to simulate and evaluate different product/process design scenarios, whereas DMAIC ideally works with actual product and operational data. Other "design-for" processes and tools similar to DFSS are described in Chapter 4.

An Inverted View of Management table 6 - one

A focus on quality management turns a conventional view of management on its head. Traditional management views make sharp distinctions between managers and workers, often elevating the importance of managers. That is, the workers are present to support the activities of management. This view is illustrated by the pyramid shown on the left-hand side of Figure 6-1. The base of the pyramid consists of frontline workers who interact routinely with customers and operational processes, so they deal with the daily problems and difficulties of running the business. In doing so, frontline workers can be seen as supporters of smaller and smaller layers of management. In this view of the organization, managers are thought to be the decision makers and "owners" of operating processes and, therefore, they are seen to have primary responsibility for product quality. A progressive quality management approach challenges this view, arguing that it is the workers on the front lines of business who should actually have primary "ownership" of operating processes. Further, managers should support workers, not the other way around. Frontline workers have the closest contact with customers and operational processes; therefore, they ultimately determine the quality level that the firm offers, and how customers view the firm. In addition, they know more than anyone about the firm's problems and the best ways to solve them. In total, quality management advocates believe that the entire organization should support the frontline workers, as the right-hand side of Figure 6-1 illustrates. This idea of elevating and empowering frontline workers is a core value of total quality management. Page 179 What does employee empowerment actually mean? Several elements are required in order for employees to be empowered to actively manage the quality of an organization's products. First, frontline workers must be given both the responsibility and authority to make decisions. This is sometimes the hardest change for both managers and frontline workers to accept. Both groups have to clearly define and recognize the enlarged scope of decisions for which frontline workers are responsible, and then managers have to relinquish control and actively encourage these frontline workers to take charge. Measurement and incentive systems may also need to be changed to motivate frontline worker involvement. Second, frontline workers need to have the knowledge required to make good decisions. Empowerment usually requires education and cross-training (job rotation) of employees on all technical issues related to their job environments. Equally important, employees need training on quality management concepts and in the use of problem-solving tools. If frontline workers are to set appropriate priorities and make good business decisions, they also need an understanding of the organizational strategy and current objectives. Finally, frontline workers must have the resources required to make quality improvements. Such resources usually include data, tools and systems, money for investments, and time.

The Malcolm Baldrige Quality Award

A national quality award bestowed by the United States National Institute for Standards and Technology (NIST) in recognition of superior quality and performance excellence.

ISO 9000: An International Quality Standard

A set of internationally accepted standards for business quality management systems. reiteration ISO 9000 defines a set of internationally accepted standards for business quality management systems. It was initially developed by the International Organization for Standardization to facilitate international trade. Since its inception in 1987, the standard has been revised several times. The newest version is referred to as the ISO 9000:2008 standard. National bodies from over 120 countries now support this standard. As a standard, ISO 9000 is applicable to all forms of organizations, irrespective of size or product offerings. Certifications have been attained by banks, consulting operations, manufacturing plants, software development firms, tourism operations, and even universities. The essential purpose of ISO 9000 is to ensure that operating processes are well documented, consistently executed, monitored, and improved. ISO 9000 certification provides essentially the same function for business processes as financial accountants provide when they audit a company's financial transactions.

DMAIC: The Six Sigma Process

An acronym for the five steps at the heart of the Six Sigma process: define, measure, analyze, improve, and control reiteration At the heart of the Six Sigma approach is a five-step process: define, measure, analyze, improve, and control (DMAIC). Figure 6-3 describes the DMAIC process. For any given good or service, members of a cross-functional team usually work through these steps together to complete a quality improvement project. The focus of the DMAIC improvement process is initially on the product outcome; then it shifts to the underlying processes needed to produce and deliver the product.

Building an Organizational Culture Around Quality table 6 - four

An organizational culture is reflected in the values and behavioral norms that guide the decisions and interactions of people within an organization. Culture is shaped by the actions of the organization's leaders, by the environment, and by the collective experiences of the people in the organization. For example, think about the values and norms that exist among members of a sports team. Team members' goals and beliefs are shaped by what the coach says and does, but they are also shaped by what their teammates say and do. Experiences also play a role. Consider the effects on team culture that result from a series of close wins or losses. Close wins can build a sense of confidence and a winning spirit. Close losses can be disheartening. Managers have to recognize that their actions, more than their words, help to shape culture. At the same time they have to recognize that they are not completely in control of the firm's culture. Both past experiences and external forces, such as the economic environment, labor union influences, and governmental controls, can have big impacts. The culture within an organization can have tremendous effects on the success or failure of quality improvement initiatives. History contains many cases of companies whose quality initiatives were rendered ineffective by an incompatible culture. Most often cultural barriers to change are created by perceived inequities that have created a mistrust of management, or by incentive systems that motivate behaviors at odds with the values of quality management (e.g., when management pays for output irrespective of the quality). It is critical for managers to continually assess the dynamics of culture in their organizations that may be creating values and norms of behavior that are supportive, or damaging, for quality management initiatives. Through communications, actions, measures, rewards, and incentives, managers should seek to build the values of total quality management into their corporate culture. Table 6-4 lists the values we have discussed in this section, along with some of the factors that have contributed to the creation of a TQM culture. Note that the success factors are not guarantees of success, but their absence will hinder successful implementation.

Viewing Quality Management as a Never-Ending Quest

Because products and processes are continually changing, and because perfection (zero defects) is deemed to be an appropriate goal, continuous process improvement should be a part of every person's job. A widely used improvement process known as Kaizen, or Continuous Improvement, is based on the notion that the long-term survival and success of any organization occurs only when everyone in the firm actively pursues opportunities to identify and implement improvements every day. Chapter 3 discussed the practice of Kaizen for process improvement. Pursuit of small improvements keeps people thinking about the process and its current operation. Furthermore, small improvements are often gained without needing large investments of capital. In many cases, these improvements can be gained with little or no required investment.

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It is important to note that, as a product progresses from one stage to the next in the supply chain, a defect found in later stages is much more costly than a defect found in earlier stages. In later stages more resources have been invested in the product, and there is sometimes less ability to rework the product. Costs are highest when a defect is uncovered by the customer. Repair costs are relatively large, but often more importantly the costs of lost sales and tarnished product image can be very large. Lincoln Electric, one of the most visible users of TQM, uses COQ. They estimate that a quality problem that costs $1 to repair internally (i.e., internal failure) costs $8 to repair once it is in the hands of the customer (i.e., external failure). Some of the costs contained in these four categories are identifiable in expense reports, yet others are hidden in overhead and other administrative accounts. For example, it may be difficult to establish the percentage of production engineering and management salaries (an overhead expense) that is attributable to solving quality problems. Similarly, some percentage of safety stock inventories may be needed to cover quality problems, but this is rarely explicitly identified. A thorough COQ analysis usually requires quite a bit of digging, and cooperation by accounting and operations personnel. They often find that the cost of poor quality is surprisingly large! Once a COQ analysis helps managers quantify the monetary impact of quality on their company's performance, they are typically highly motivated. The COQ analysis points out the magnitude of the opportunity, and gives managers a stronger basis for financially justifying investments in quality improvement initiatives.

Implementing Six Sigma

Organizations often view Six Sigma as an improvement program aimed at gaining greater consistency and efficiency throughout the organization. The most common approach for implementing Six Sigma is to start by training key leaders in the organization in quality management philosophies and tools. Then these initial leaders train others, who then train others, and so on. Usually there are two to three levels of training targeted for various employees in the organization. Persons completing the levels of training are given names taken from the Asian martial arts tradition. For example, persons who complete the highest levels of training are called Black Belts, or even higher-level Master Black Belts. Black Belt personnel have usually completed at least several quality improvement projects. Master Black Belts may even work full-time in training others in Six Sigma processes. Employees who complete the basic level of training are often called Green Belts. To achieve Green Belt status, employees usually must complete a project that applies the Six Sigma process to a product in their own areas of work. These projects often must satisfy certain operational or financial performance goals (e.g., the project will achieve a 25 percent reduction in lead times, or the project will generate a minimum 25 percent return on investments). The cost savings from such projects can be used to pay back the costs of training for the Six Sigma program. Numerous companies have shown tremendous benefits from implementing Six Sigma. Yet, some companies are finding that Six Sigma has limitations as well. Under certain conditions, managers are finding that the use of Six Sigma can be a deterrent to innovation. That is the point raised in the Get Real box on page 187, "Does Six Sigma Stifle Innovation?"

Attaining ISO 9000 Certification

Over one million organizations have been independently certified to ISO 9000. To attain certification, an organization must be audited by an external, authorized party. Certification states that the firm's processes meet the requirements in the ISO 9000 standards. Typically, an organization first conducts an internal audit to determine whether its processes are consistent with the standards. Then, it contracts with a registrar (an external and independent body) to perform a formal audit. Attaining ISO 9000 certification is usually quite demanding and time-consuming. The process can take anywhere from 3 to 24 months, depending on the initial level of compliance of the firm's systems. If the organization passes the audit, its certification is recorded by the registrar. The standard itself consists of five sections. Table 6-6 provides a brief description of each section. The standard emphasizes many of quality management's core values.

product quality Design quality Conformance quality Quality management

Product quality is a product's fitness for consumption in terms of meeting customers' needs and desires. Fitness for consumption is determined by both a product's design quality and its conformance quality. Design quality is a measure of how well a product's designed features match up to the requirements of a given customer group. Conformance quality is a measure of whether or not a delivered product meets its design specifications. Quality management is a management approach that establishes an organizationwide focus on quality, merging the development of a quality-oriented corporate culture with intensive use of managerial and statistical tools.

Process-Oriented Focus on Prevention and Problem Solving Variability in repeated activities is noted as the major source of problems for all operations processes.

Quality management approaches view products as the outcomes of processes. All organizations, functions, and activities involved in the design, production, and delivery of a product, good, or service should be viewed collectively as parts of a process. This extended process view includes suppliers and customers, making quality management principles very consistent with the overall supply chain management perspective. Quality problems are often only solvable through the involvement of suppliers, because their inputs may be related to problem causes. Suppliers can also help determine the costs and feasibility of changes required to address quality problems. As stated above, it is almost always more efficient to solve problems at as early a supply chain stage as possible, rather than trying to find a remedy or workaround at some later stage. Involving customers can clarify requirements needed to define acceptable levels of quality. In TQM, problem prevention is emphasized, rather than an emphasis on fixing problems after they occur. It is better to eliminate the causes of problems than it is to only find and sort out defectives before they go to customers. In the long term, prevention is almost always cheaper than correction. Sometimes managers refer to this prevention-oriented approach as quality at the source as opposed to quality through inspection. Furthermore, problem solving is most effective when decisions are based on the analysis of actual data, as opposed to conjectures or opinions. The supplement to this chapter illustrates a number of analytical tools that have been developed to collect and analyze data. Use of these tools along with a data-led, or fact-based, approach helps managers to detect and solve problems in processes. Variability in repeated activities is noted as the major source of problems for all operations processes. For example, variability in the time it takes to complete a task often disrupts work flows. Variations in a purchased material characteristic, such as in the diameter of a ball bearing, can cause unreliability in product performance. Variations in marketing promotions can cause large swings in product demand. Variability causes unpredictability, which increases uncertainty and reduces control over processes and outputs. Thus, an important task in quality management is to continually find and eliminate sources of unwanted and uncontrolled variability. Later in this chapter we will discuss the Six Sigma program for quality management, an approach that builds upon this idea.

Functional Roles in Quality Management table 6 - two

Quality management is fundamentally a business management approach, in that it encompasses many functional areas and activities both within and across companies in the supply chain. Table 6-2 provides examples of some of the ways that decisions made by managers in various functions might impact product quality. Note that some of these decisions might be made in places and times that are far away from actual production and delivery operations. Sometimes it is difficult to anticipate how decisions about markets or facilities, for example, might affect product quality outcomes in the future. Managers who are far removed from operations activities might not even be aware of how their decisions impact product quality. This is why the development of a culture of quality awareness is such a fundamentally important beginning to quality improvement programs within a business.

total quality management

TQM : An integrated business management strategy aimed at embedding awareness of quality in all organizational processes Total quality management (TQM) is an integrated business management strategy aimed at embedding awareness of quality in all organizational processes. The word total in total quality management has several important connotations. 1. First, a product's quality is ultimately determined by the customer's acceptance and use of the product. Accordingly, any discussion of product quality issues should always start with a focus on all of the attributes, the total package that targeted customers will care most about. 2. Second, quality management is a total, organizationwide activity, rather than a technical task. Quality assurance is not simply the responsibility of product inspectors. Every employee in a company has a stake in product quality, and almost everyone has some direct or indirect influence on it. Consequently, the responsibility for quality belongs to everyone. 3. Third, quality improvement requires a total commitment from all employees. A quality product results from good design combined with effective production and delivery methods. Because almost everyone in a company has some role either directly or indirectly related to design, production, or delivery, commitment to high quality is required of everyone in the firm. To make good decisions, people from all affected functions should be involved. Consequently, TQM has a heavy emphasis on decision making in cross-functional teams.

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That explains the sigma in Six Sigma, but what about the six? One of the issues in quality improvement is deciding how far variability reduction efforts should go. In a Six Sigma approach, the goal is to achieve a process standard deviation that is 12 times smaller than the range of outputs allowed by the product's design specification. In this case, the design specification encompasses six process output standard deviations on each side of its center point.2 Consider Example 6-1 on the next page. Curious students often ask, "Why is six sigma the goal? Why not five sigma, or seven sigma?" Good question. Early developers of the Six Sigma approach at Motorola originally chose six sigma as an appropriate goal because of the nature of their products and manufacturing processes. A six sigma rated process, where upper and lower product specifications are set 12 standard deviations apart, will produce at most only 3.4 product defects per million outputs. Is this goal suitable for other products? It all depends on the costs of quality. If the costs of failure outweigh the costs of prevention and appraisal, then pursuing greater levels of conformance (more "sigmas") is probably justified. However, for some products there is a point at which the size of potential failure cost savings does not justify the investments required to achieve them. For example, Six Sigma quality is arguably not justified for a product such as an inexpensive ballpoint pen, because the internal and external failure costs are low once a reasonable level of quality has been achieved. On the other hand, Six Sigma quality may be too low a goal for products such as drugs and medical devices, where the cost of a single failure can be very high (someone's life!).

table 6 - one

These quality traits were originally developed with tangible goods in mind. However, they apply equally well to services. In addition, face-to-face services require an expanded notion of product quality that considers interpersonal interactions, and customers' perceptions throughout the service experience. Table 6-1 provides a summary of dimensions of product quality that have been identified for goods and services, respectively. Note that the service quality dimensions go beyond the specifics of the service task. Service quality is affected by the environment surrounding the service as well as by the interpersonal communications and experiences involved. These aspects can have huge effects on customers' perceptions of service quality.

Industry Interpretations of ISO 9000

While the guidelines in ISO 9000 can be applied just about anywhere, each organization needs to carefully interpret them for their context. In some cases industry groups have created interpretations for their specific requirements. Table 6-7 shows some examples of common interpretations of ISO 9000.