Quality Uncertainty and Quality Perception

Abstract

This chapter links quality perception to quality uncertainty. The extent of information asymmetry or symmetry has been used as the basis for this linkage. Quality uncertainty or perception is viewed from both endogenous and exogenous perspectives. Total Quality Management makes the endogenous side with TQM constructs as endogenous variables, whereas marketing science framework exhibits the exogenous side. Principles of economics of information are implemented to correlate marketing parameters with the TQM practices in industry so that quality is perceived by customers. Quality perception is an outcome of combined probability of information symmetry and TQM. Theories of probability and reliability engineering are used for mathematical modeling and analysis. Fault tree and success tree method is specifically applied to analyze quality uncertainty and quality perception at the market end. Quality uncertainty and perception behaviors are also related to product life cycle. Thus, a new direction has been given to the perceived quality that traversed thus far in different streams.

Appendix A

4.1.1 Worksheets 1 and 2

4.1.1.1 Using Worksheet 1

Worksheet 1 refers to computation of TQMI which depends on the critical factors. Hence, the critical factors are presented in the first column. The status of any critical factor is determined by implementation of the related performance measures. Worksheet 1 when completed presents the TQM implementation status of any company. Entries in worksheet 1 are as follows:

• 1. The critical factors evolved through the research of the last few decades are given in column 1. These critical factors collectively represent the TQM status.

• 2. Performance measures for each critical factor are given in column 2.

• 3. Each performance measure has significance for the TQM implementation in the company.

• 4. Ponder carefully on each performance measure and fill the value in the third column that is most appropriate to the company. The value should be represented on 0–1 scale in a positive sense.

• 5. Average the values of performance measures for each critical factor in the last column. This is a value of the critical factor under consideration.

• 6. Average of the values of all critical factors is TQMI of the company. Write the TQMI at the bottom of the worksheet 1. The value will fall between 0 and 1. If the TQMI value is 0.65, it means that the TQM implementation of the company is around 65%.

4.1.1.2 Using Worksheet 2

Worksheet 2 refers to computation of information symmetry which also depends on the critical factors. Subset 1 of information asymmetry/symmetry factors represents the socio-economic conditions which are beyond the purview of any company (refer to Fig. 4.8 for subset 1 and 2). Marketing enablers or strategies to improve information symmetry are included in subset 2 of the factors. Subset 2, which makes the major portion of worksheet 2, is crucial in determining information symmetry and is common to developed and developing nations. For companies in developing nations, the values for the factors in subset 1 can be taken in the other issues. For companies in developed nations, the other relevant factors can be taken in other issues. Entries in worksheet 2 are as follows:

• 1. The identified critical factors are given in column 1. These critical factors collectively represent information symmetry.

• 2. Performance measures for each critical factor are given in column 2.

• 3. Each performance measure has significance for improving information symmetry. The performance measures for these do not have universality and may vary from company to company. But a company has to recognize the suitable performance measures for each critical factor. For example, performance measures like complaints about the product, warranty period of the product, and claims in warranty period can be considered for the critical factor of warranty/guarantee.

• 4. Ponder carefully on each performance measure and fill the value that is most appropriate to the company in the third column. The value should be represented on 0–1 scale.

• 5. Average the values of performance measures for each critical factor in the last column. This is a value of the critical factor under consideration.

• 6. Average of the values of all critical factors is information symmetry for the product of the company. Write the information symmetry at the bottom of the worksheet 2. The value will fall between 0 and 1.

After completing worksheet 1 and worksheet 2, compute quality uncertainty and quality perception.

4.1.2 Worksheet 1

Critical factor	Performance measures	Value	Average
Top management commitment	Allocating budgets resources
	Control through visibility
	Monitoring progress
	Planning for change
Quality measurement and benchmarking	Zero-defects conformance
	Use SPC for process control
	Proportion of defects
	Cost of quality
	Percentage of products needing rework
	Defective rate relative to competitors
Process management	Unit cost
	Production goals
	Reduce material handling
	Design for manufacturability
	Reduce cycle time
	Reduce setup time
	Productivity = finished goods/no. of people or production hours
	Productivity = total process time/total delivery time
Product design	Number of new products introduced
	Time taken from design to first sale
	Fitness of use
	Design quality
Employee training and empowerment	Training employees
	Training management
	Cross-training employees
	Training/retraining budget
Supplier quality management	Reduce inventory
	Supplier relations
	Number of suppliers
	Inventory turnover
	Inventory accuracy
	Implement Kanban
	Material cost
	Material availability
Customer involvement and satisfaction	Delivery dependability
	Operators involved/value-added labor
	Customer service training budget
	Prompt handling of complaints
	Number or percent of complaints
	Number or percent of orders that are delivered late
	Broad distribution channels
	Number of contacts with customers
	Consumer surveys
	Time to respond to questions/complaints
	Responsive repairs
	Percentage of repeat business
TQMI (total quality management index) = (∑Average)/7

4.1.3 Worksheet 2

Critical factor	Performance measures	Value	Average
Reputation
Advertising
Warranty/guarantee
Supply chain management
Word-of-mouth
Other issues
Information symmetry = (∑Average)/number of factors used