Cost of Quality and Juran’s Trilogy
The cost of poor quality:
• “In most companies the costs of poor quality
runs between 20 to 40 percent... In other
words, about 20 to 40 percent of the
companies’ efforts are spent in redoing
things that went wrong because of poor
quality” (Juran on Planning for Quality)
• Crosby’s Quality Management Maturity Grid
states that if an organization doesn’t know
it’s cost of quality, it’s probably at least 20%.
(Crosby, Quality is Free)

Quality Crisis
According to Dr. Juran:
1. “There is a crisis in quality. The most obvious
outward evidence is the loss of sales due to
competition in quality and the huge costs of poor
quality.”
2. “The crisis will not go away in the foreseeable
future.”
3. “Our traditional ways are not adequate to deal
with the quality crisis.”
4. “To deal with the crisis it requires some major
breaks with the tradition.”

Juran’s Reasons for Poor Quality
• Most organizations have about 33%
running in to costs of poor quality (e.g.,
rework, waste, scrap, etc.)
• About 80% of all quality efforts have no
measurable results.
• Most failures in quality are due to “poor
choice of strategy”.
• In order to choose a quality strategy-
wisely, organizations need to know how
to manage for quality.

Quality Objectives and Strategy
What are the organization’s quality objectives?
• Customer Satisfaction?
• Time to market?
• On-Time Delivery?
• Cost Savings?
• ROI?
• Productivity?
• Performance?
• Cycle time?

“Fitness for Use”
Product Features that
Meet Customer Needs
Freedom from
Deficiencies
• Eliminate defects,
errors, & waste
• Avoid product
dissatisfaction
• Effect is on costs
• Higher quality costs
less
Juran’s Definition of Quality
• Provide customer
satisfaction
• Create product salability
• Compete for market share
• Respond to customer
needs
• Higher quality costs more

Types of defects
• Management controllable defects
• Operator controllable defects
• Sporadic and Chronic problems

The Juran Trilogy for
Quality Management
Quality Planning Quality Control (during operations)
Major
Crisis
Original zone of
quality control
New zone of
quality control
Continuous
Waste, Errors,
& Defects
Lessons learned
Time
• Adapted from Juran's Quality Control Handbook , J.M. Juran, 4th Edition
Improved Process
Current
Process
Reduced Waste,
Errors, & Defects

Fundamental Quality
Strategies or Juran’s Trilogy
Managing for Finance Managing for Quality
Financial Planning: Setting
business goals; budgeting
Quality Planning: Setting
quality goals; design in quality
Financial Control: Cost
control; actual vs. planned
Quality Control: Planned
vs. actual quality goals;
taking action on difference
Financial Improvement:
Cost reduction; mergers;
acquisitions
Quality Improvement:
Waste and rework reduction;
eliminate & prevent defects

Aim of Juran’s Trilogy
To make the process
1. Efficient
2. Effective
3. Under control
4. Simplify and
5. Adaptable
To Achieve this GOAL…..

Requirements
‰ View all work as a process.
(whether production or business)
‰ Make all processes
1. Effective
2. Efficient
3. Adaptable
‰ Anticipate the change in customer
needs.

Requirements. Cont…
‰ Control “in process performance
using measurements” such as
1. Scrap reduction
2. Cycle time reduction and
3. Using Control charts
‰ Maintaining constructive
dissatisfaction with present
levels of performance.

Requirements. Cont…
‰ Eliminate all types wastes and rework
‰ Find activities that do not add value to the
product or service
‰ Eliminate non conformities at all phases of
every ones work; even if the increment of
improvement is very small
‰ Use bench marking to improve competitive
advantage

Requirements. Cont…
‰ Innovate to achieve Break through
‰ Incorporate the lessons learnt into future
activities
‰ Use technical tools such as
1.SPC
2.Experimental Design
3.Bench Marking
4.QFD, and so on….

Process
‰ Process refers to business and production
activities. It has Input, Process, and Out
Put activities.
Material
Money
Information
Data
Input
People
Equipment
Method
Procedures
Environment
Material
Information
Data
Product
Service
Out Put
Process

Process. cont…
‰ The process definition should begin with
Internal/External Customers.
‰ Customer defines the purpose of
organisation and every process within it.
‰ The process improvements must be
defined in terms of
1.Customer satisfaction
2.Quality of products
3.Good service

Process. cont…
‰ The process must have value
added activities and repeatability.
‰ It must be a part of process
improvement.

Improvement
‰ The five basic points
1. Reduce resources More resource
Waste
2. Errors Reflects Poor Workmanship.
3. Meet or Exceed Customer Satisfaction
Improved Process.
4. Make the process safer More Productive.
5. Make the process more satisfying to the
person doing it.

Juran’s Trilogy
‰ The process improvement involves
three important components.
1. Planning (5 stages)
2. Control
3. Improvement

1. Planning Stage
Step-I. Marketing External customer
Stated Automobile
• Need
Real Transportation
These needs must be translated to requirement

Planning Stage, cont….
step- II, III
II. Internal Customer
III. Develop product or Service Features
a) Customer needs
b) Needs of the organisation
c) Competitive
d) Optimize the cost of all stakes
holders

Planning Stage, step III. Cont…
‰ These needs are to be analyzed by
Multifunctional Team using the tools such
as,
1.QFD
2.CE
3.Taguchi’s Quality Engineering
4.FMEA and so on…

Planning Stage cont…
Step- IV
‰ Develop the process to produce
product and service features.
This task is carried by design team, for
which the facilities required are
1. Training 4. Operation
2. Control 5. Maintenance
3. Scaling up 6. Process Capability
(prototype) Evaluation

Planning Stage,
step- V,
‰ Operation:
1. Process planning
2. Production facilities
3. Men
4. Material
5. Positrol (positive control) i.e., the
important variables are to be kept under
control.

2. Control stage
‰ This is being used by operating forces to
help the product, process, and service
requirements. They also get the feed back.
The steps involved are
1. Evaluating actual operating performance
2. Comparing actual performance to goals, &
3. Acting on the difference

Tools used in this stage
¾ SPC
¾ Pareto Diagram
¾ Flow Charts
¾ Cause and Effect Diagram
¾ Check Sheets
¾ Histogram
¾ Control Charts
¾ Scatter Diagram
Find whether the process is centered or not.

3. Improvement stage
‰ This stage involves developing an effective
Infrastructure through Quality Council.
The Duties of Quality council are
1. To identify improvement projects and
establishing the team
2. Providing the resources to determine the causes
3. Developing solutions
4. Establishing control to hold the gains.