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Managing for Quality and Performance TENTH EDITION JAMES R. EVANS Carl H. Lindner College of Business University of Cincinnati WILLIAM M. LINDSAY Professor Emeritus of Management Northern Kentucky University Australia Brazil Japan Korea Mexico Singapore Spain United Kingdom United States Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

This is an electronic version of the print textbook. Due to electronic rights restrictions, some third party content may be suppressed. Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. The publisher reserves the right to remove content from this title at any time if subsequent rights restrictions require it. For valuable information on pricing, previous editions, changes to current editions, and alternate formats, please visit www.cengage.com/highered to search by ISBN#, author, title, or keyword for materials in your areas of interest. Important Notice: Media content referenced within the product description or the product text may not be available in the eBook version. Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

Managing for Quality and Performance Excellence, Tenth Edition James R. Evans and William M. Lindsay Vice President, General Manager: Balraj Kalsi Product Director: Joe Sabatino Product Manager: Aaron Arnsparger Content Developer: Conor Allen Marketing Manager: Nate Anderson Art and Cover Direction, Production Management, and Composition: Cenveo Publisher Services Manufacturing Planner: Ron Montogomery Cover Image: © Joe Ginsberg/Getty Images Intellectual Property Analyst: Christina Caramella Project Manager: Nick Barrows © 2017, 2014 Cengage Learning WCN: 02-200-203 ALL RIGHTS RESERVED. No part of this work covered by the copyright herein may be reproduced, transmitted, stored, or used in any form or by any means graphic, electronic, or mechanical, including but not limited to photocopying, recording, scanning, digitizing, taping, Web distribution, information networks, or information storage and retrieval systems, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the publisher. For product information and technology assistance, contact us at Cengage Learning Customer & Sales Support, 1-800-354-9706 For permission to use material from this text or product, submit all requests online at www.cengage.com/permissions Further permissions questions can be emailed to permissionrequest@cengage.com Unless otherwise noted all items © Cengage Learning Library of Congress Control Number: 2015944523 ISBN: 978-1-305-66254-4 Student Edition ISBN: 978-1-305-66254-4 Cengage Learning 20 Channel Center Street Boston, MA 02210 USA Cengage Learning is a leading provider of customized learning solu- tions with office locations around the globe, including Singapore, the United Kingdom, Australia, Mexico, Brazil, and Japan. Locate your local office at: www.cengage.com/global Cengage Learning products are represented in Canada by Nelson Education, Ltd. To learn more about Cengage Learning Solutions, visit www.cengage.com Purchase any of our products at your local college store or at our preferred online store www.cengagebrain.com Printed in the United States of America Print Number: 01 Print Year: 2016 Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

Brief Contents Preface xvii PART 1 PRINCIPLES OF QUALITY 1 Chapter 1 Introduction to Quality 3 Chapter 2 Foundations of Quality Management 49 Chapter 3 Customer Focus 97 Chapter 4 Workforce Focus 153 Chapter 5 Process Focus 205 PART 2 TOOLS AND TECHNIQUES FOR QUALITY 251 Chapter 6 Statistical Methods in Quality Management 253 Chapter 7 Design for Quality and Product Excellence 309 Chapter 8 Measuring and Controlling Quality 373 Chapter 9 Process Improvement and Six Sigma 457 PART 3 BEYOND QUALITY MANAGEMENT: MANAGING FOR PERFORMANCE EXCELLENCE 517 Chapter 10 The Baldrige Framework for Performance Excellence 519 Chapter 11 Strategy and Performance Excellence 557 Chapter 12 Measurement and Knowledge Management for Performance Excellence 595 Chapter 13 Leadership for Performance Excellence 635 Chapter 14 Building and Sustaining Quality and Performance Excellence 665 Appendices A-1 Index I-1 Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. iii

Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

Contents Preface xvii PART 1 PRINCIPLES OF QUALITY 1 Chapter 1 Introduction to Quality 3 QUALITY PROFILES: Motorola, Inc. and PricewaterhouseCoopers Public Sector Practice 5 Defining Quality 6 6 6 Transcendent (Judgmental) Perspective Product Perspective User Perspective 7 Value Perspective Manufacturing Perspective Customer Perspective Integrating Quality Perspectives in the Value Chain 9 7 8 8 History of Quality Management 10 13 13 12 The Age of Craftsmanship 11 The Early Twentieth Century Post–World War II The U.S. “Quality Revolution” Rapid Growth of Quality in Business From Product Quality to Total Quality Management Early Management Failures Performance Excellence 16 Emergence of Six Sigma 17 Globalization of Quality 17 Current and Future Challenges Quality in Manufacturing 19 14 16 17 15 Manufacturing Systems 19 Quality in Service Organizations 23 Contrasts with Manufacturing Components of Service Quality 23 24 Quality in Business Support Functions 26 Quality and Competitive Advantage 27 Quality and Business Results 29 Quality and Personal Values 30 Summary of Key Points and Terminology 31 QUALITY IN PRACTICE: The Evolution of Quality at Xerox 31 Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. v

vi Contents QUALITY IN PRACTICE: Quality Practices in Modern China 36 Review Questions 38 Discussion Questions 38 Projects, Etc. 40 CASES Skilled Care Pharmacy 41 Dinner On-the-Go 43 Who’s Responsible for the Quality? 43 Deere & Company 43 Notes 45 Chapter 2 Foundations of Quality Management 49 QUALITY PROFILES: Texas Nameplate Company, Inc. and MEDRAD 50 The Deming Philosophy 51 52 Deming’s 14 Points Profound Knowledge 57 The Juran Philosophy 62 The Crosby Philosophy 65 Comparing Deming, Juran, and Crosby 66 Other Quality Philosophers 66 A. V. Feigenbaum 67 Kaoru Ishikawa 67 Principles, Practices, and Techniques of Quality Management 68 Quality Management Principles Quality Management Practices Quality Management Techniques 68 69 69 Variation and Statistical Thinking 72 Understanding Variation 72 Deming’s Red Bead and Funnel Experiments 74 Quality Management Systems 80 ISO 9000 Family of Standards Building Effective Quality Management Systems Summary of Key Points and Terminology 86 QUALITY IN PRACTICE: Bringing Quality Principles to Life at KARLEE 86 81 85 QUALITY IN PRACTICE: ISO 9000 and Sears’ Quality Management System 87 Review Questions 88 Discussion Questions 89 Projects, Etc. 91 CASES The Disciplinary Citation 91 Nashville Custom Guitars 91 Walker Auto Sales and Service 92 The Quarterly Sales Report 93 Notes 94 Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

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