Total quality management

Introduction to Quality
TQM concept evolved in Japan - World war II
Edward Deming - use of statistical methods.
RM……………… ………………….Consumer research
TQM set a new trend in the Japanese industry by shifting the
management’s focus from profits to quality.
During 1980’s American….. Ford Motors, Xerox.
Mfu Companies - Industrial Revolution.

Quality movement in India
No competition - Public sector, one or two players
Top Management - sold, cost, awareness & interest level
"let's stay home, let's copy or imitate, and let's
compete on price".
1991 -

Significance of LPG – World
L - Liberalization - Trade barriers
Removing license raj
Freeing Economy From Government Control
350 %.............20%
P - Privatization - Reducing Government stake
G – Globalization (Integrating the economy of a country with
the world economy. WTO, Quota System)
“One world – One Market”
(Single Market - Borderless World).
5

1991 LPG era …competition, car, Marketing concept,
customer is the God.
……………………….
6

Introduction to TQM cont…
Globalisation - Mindset change
 South Indian Companies - TVS,
Sundram Fasteners - China.
Indian brands - global market
Pharma, Six sigma, Tata steel
Quality awards - Deming Award
To succeed and to Survival ……
7

“COMPETITION CAUSES PERFORMANCE”
8

Benefits of Quality efforts
 Increased Customer Satisfaction
 More efficient processes
 Higher productivity
 Lower costs
 Increased market share
 Higher Profits
 High employees morale.

Total Quality Management
 TQM is a Management Approach - originated -1950’s.
 Become more popular since early 1980’s.
 Description of the culture, attitude of the Organisation.
 Act of managing the whole organisation, its suppliers and buyers
to achieve excellence.
Union of Japanese Scientists and Engineers (JUSE)
Defines TQM:
“A set of systemic activities carried out by the entire
organisation to effectively and efficiently achieve company
objectives to provide products and services with a level of quality
that satisfies customers, at the appropriate time and price”.

TQM cont..
TQM is associated with ..doing right things right, first
time.
Method by which management and employees
involved in the continuous improvement.

What is Quality?
Juran (1974)…. “Fitness for use”
Crosby (1979) VP of International Telephone &
Telegraph (ITT)…
“Conformance to requirements or specifications”
Deming(1900 – 1993) statistician worked in Western
Electric company….
“Quality should be aimed at the needs of the
consumer, present and future”.

Quality Cont…
Walter A Shewhart
Pioneer of Modern Quality Control
 “Founder of the control chart” (e.g. X-bar and R chart).
 Originator of the plan-do-check-act cycle. (PDCA Cycle)
 Perhaps the first to successfully integrate statistics, Engineering, and
economics.
defined quality
Objective quality: Quality of a thing independent of people.
Subjective quality: Quality is relative to how people perceive it. (value)
The term quality is perceived differently by different people.

Quality cont…
In ISO 9000 : a more definitive definition of quality is given.
“degree to which a set of inherent characteristics fulfills
Requirements”.
Degree - quality can be used with adjectives such as poor,
good and excellent.
Inherent - something, especially as a permanent
characteristics.
Characteristics can be quantitative or qualitative.
Requirement is a need or expectation that is stated by
customers, and other interested parties.

Quality Cont…
Quality can be quantified as follows: Q =P / E
Where Q - Quality, P - Performance, E - Expectations.
Quality, therefore is
 Defined by the customers,
 A measure of achievement of customer satisfaction
 Safety, effective packaging,
 On - time delivery,
 Efficient technical service, caring for the customer’s feedback.
 Keeping one’s word
 Ensuring no defects, Utility to the society.
 Quality is both a user oriented and a production oriented expression.

Quality Cont…
Excellence in everything.

Stakeholder Expectations
Customers - Product Quality
Employees - Career / Work Satisfaction
Owners - Investment Performance
 Vendors - Continuing Business Opportunity.

Evolution of Quality
1920’s - QC - Process control;
- Acceptance sampling
1930’s - Great depression after world war
- Defense role in quality
1950’s - TQC, - Japanese QC
1960’s - QA in new product development
1970’s - Worldwide management of Quality
1980’s - Quality systems and standards
1990’s - Quality as a main winning point
2000’s - Continual improvement.

New and old culture of Quality
Q Elements Prior to TQM With TQM
Definition Product oriented Customer
Decisions Short term Long term
Responsibility Quality control Every one
Problem solving Managers Teams
Procurement Price Life cycle cost &
partnership
Emphasis Detection Prevention
Manager’s Role Plan, assign Delegate, coach, facilitate
and mentor

Requirements of - A good Quality process

A good Quality process
 Driving the business from customer needs
 Setting a clear vision which is deployed down
into coordinated action.
 Managing processes to their optimal capability
Using the contribution of every person to the full
 Managing well beyond company boundaries.
 Developing workers to manage and mangers to
lead
 Becoming faster, leaner and more responsive to
market opportunities.

Dimensions of quality
Performance: Also called Functionality or Operationality.
It is the main operating characteristics of a product.
Example: Crystal clear picture, for clear sound etc., in a TV set.
Enhancement or Additional Features: It represents the
additional features supplementing the product’s basic
function.
Example: Auto power off when not in use, Telephone directory
storage, In built videogames, child lock facility etc.,
Reliability: Probability that a product is performing its intended
function over its intended life and under the stated
conditions.

Dimensions of quality cont..
Conformance: The extent to which the product’s design and
operating characteristics satisfy the pre . determined
standards.
Durability: Measure of products. useful life,
Serviceability: Time consumed in servicing, Courtesy,
Competence and ease of repair or reconditioning of a
product.
Aesthetics: Should appeal to senses. It is Human response to a
product . how it looks, feels, sounds, tastes or smells..
Reputation: Past performance, Brand image

Principles of TQM
Management commitment
Customer Focus
Continuous Improvement
Employee Empowerment

Edwards Deming had
proposed fourteen principles
towards quality achievement.
These principles are summarized
as follows:

1. Create and Publish the Aims and Purposes of the Organization:
 Long range goals, resource allocation for innovation,
 R&D, training and continuous education for the employees.
2. Adopt new philosophy :
 Focus on the customer satisfaction,
 prevention of non - conformance, rather than detection and correction,
3. Understand the Purpose of Inspection:
 Eliminate the need for mass inspection by building quality into the product.
 Mass inspection is costly and unreliable.
 Mass inspection is managing for failure and Defect prevention is managing for
success
 To improve the process and reduce its cost, use of statistical techniques should
be adopted.

4. Stop Awarding Business Based on Price Alone:
End the practice of selecting the suppliers, based solely on
price.
 Price is meaningless, without quality.
 Minimize total cost by working with a single supplier, thereby
developing a long term ethical and economical relationship,
loyalty and trust with the suppliers.
5. Improve constantly and forever - the system of production and
service to improve quality and productivity and to decrease cost.

6. Institute training on the job.
Each employee is to be trained in quality improvement skills,
communication skills, statistical methods and problem solving methods.
Management must allocate resource to train employees to perform their
jobs in the best possible manner.
7. Teach and Institute leadership:
Improving Supervision is Management’s responsibility.
Management must provide supervisors with training on analytical methods.
Instead of focusing on a negative, fault-finding atmosphere, Supervisors
should create a positive, supportive climate.
All communications must be clear from top management to supervisors to
operators.

8. Drive out Fear, Create Trust, and Create a climate for Innovation:
 Fear is caused by lack of job security, performance appraisal by
superiors, ignorance of organizational goals, poor supervision and poor
knowledge of the job.
 All the employees are to be treated with dignity - Only then, they can
provide ideas and act upon for improvement.
 Management must encourage open, effective communication and team
work.
 Management can begin by providing workers with adequate training,
good supervision, and proper tools to do the job.
9. Optimize the Efforts of Teams and groups:
Break down barriers between departments, research, design, sales and
production .
must work together to foresee problems in production .

10. Eliminate slogans, exhortations and numerical targets for the
workforce:
Goals - achievable and the methods are known and made available, to all the
employees.
Improvements in the process cannot be made unless the tools and methods are
available.
11. Eliminate quotas or work standards:
 Quota and work standards give importance to quantity, rather than quality.
 They encourage poor workmanship in order to meet their quotas
 Instead of fixing quantity, the management must concentrate on the methods
for improvement and quality.
 Statistical method of Process Control may replace Quotas.

12.Remove barriers that rob people of their right to pride of
workmanship;
Loss of pride in workmanship occurs in organizations, because of the
following reasons:
 Workers - unaware how to relate their efforts to the organization’s missions.
 They are blamed for system failure.
 Poor designs leading to waste of product or service.
 Inadequate training.
 Punitive supervision.
 Inadequate or faulty equipments and tools provided for performing the job.
When workers feel proud of their work, they will grow fully and successfully,
in their job and out of their job.
13.Encourage Education and Self-Improvement

14. Put everyone in the company to work to
accomplish the transformation.
Create a structure in top management that will
emphasize the preceding thirteen points every day.
The principles may be aptly called,
“codes of ethics for Quality”.

Barriers to TQM implementation

Barriers to TQM implementation
Lack of Management commitment
Inability to change Organisation culture
Improper planning
Inadequate use of empowerment
Lack of continuous training and education
Paying inadequate attention to internal and
external customers.
Failure to continually improve.

Quality Management
Quality Management - coordinated activities to direct and
control an
organization with regard to quality
QM = QP + QA + QC + QI
Quality Plan-focuses on setting quality objectives
Quality Assurance- providing confidence that quality
requirements will be fulfilled
Quality Control - focused on fulfilling quality requirements
Quality Improvement - focused on increasing the ability to
fulfill quality requirements.

Quality Management
Quality Planning: Planning process to meet the customer
requirements
Define Q. Policy, Objectives and requirements.
Statement describes an org commitment to Q.
Guides everyone in the org.
Plan about the resources.
Identify your customer, Determine their needs, Translate them
into your language, Develop a product.
Juran’s Q Planning..

Strategic Planning to functional planning

Quality Cost
Cost incurred by the firm because of producing poor
quality products.
Cost associated with non achievement of product as
defined by the requirements.
Any cost associated with correcting failure or
reworking the finished product or wastage go into
Quality costs.
A reduction in Quality cost will lead to increased profit.

Quality Cost
Appraisal cost
Inspection and Testing of incoming material, In-process
inspection, Final inspection,
Product Inspection and Testing
Maintaining accuracy of test equipment.
Prevention Cost
Quality Planning & Inspection, New Products Review, Product
Process Design
Process Control, Quality training, TQM
Failure cost
Internal Failure Cost
External Failure cost.

Quality Cost cont..
Internal Failure Costs
Scrap, Rework, Retest, Failure Analysis
Down time, Yield Losses.
 External Failure cost
Complaint Adjustment, Returned Product
Warranty Charges, Liability Costs, Indirect Costs.

Benchmarking
Concept of Benchmarking taken the new meaning since
1970s.
Companies compared the performance CY… LY
Parameters like cost, profit, sales volume, expenses,
etc…..Target
“The process of identifying, understanding, and adapting
outstanding practices and process from organisations
anywhere in the world to an organisation to improve its
performance”
…….Systematic and continuous measurement process………

Benchmarking
Systematic method by which organisations can measure
themselves against the best in class org in order to achieve
the best of the best.
It is the search for the industry best practices that lead to
superior performance.
BM is a tool generally used for continuous improvement.
It utilizes a systematic process for improving the
performance of product/service, process or an organization
as a whole by continuously identifying, understanding, and
adapting best practices that are found either inside or
outside the organization.

Benchmarking
Reasons to Benchmark:
 Helps to set new goals and adopts the best practices
 Helps to develop the strengths and reduce the weakness
 Benchmarking is time and cost efficient
Types of Benchmarking:
a)Internal
b)Competitive
c)Functional or process
d)Generic benchmarking

Re-engineering
Reverse engineering
…Product Benchmarking (Reverse engineering)

Benchmarking process:
a) Identify what function is to be benchmarked
(Critical Success Factor - CSF)
…..PROCESS that causing most trouble, factors that are not
performing up to the satisfaction level, critical factors
that result in customer satisfaction, areas in which more
competition,
Process or function that would help to achieve Competitive
Advantage.
b) Identify best-in-class company
c) Identify the data that to be collected

Benchmarking – Process…
d) Analyse the data to arrive at the current performance gap.
e) Communicate the benchmark findings to the employees
f) Establish functional goals to achieve objectives
g) Develop action plan, implement and monitor the progress.
Examples:
 Toyota, ITC, Amul, Arvind, Gillette, Intel, Fevicol,
 Mumbai Dabbawallahs,
 Sachet.
 Tata Indica – “More car per car”

Benefits of Benchmarking:
Company will become competitive
Customer requirements can be taken care of
Helps in continuous improvement
Understanding the best industry practices

Case Study - Tata Indica
 December 1998 – created history – within seven days of its
launch, an astonishing 1,15,000 orders were booked by the
company.
 It was positioned as a ‘More car per car’
 Maruti 800 as an inadequate car.
 Prospects were car owners who had a 3-5 year old Maruti 800.

Xerox - Case analysis
 Xerox 914 - First plain copier - 1959….New industry
 During 1960’s high growth….selling all it could produce
 CA.. STRONG PATENT, GROWING MARKET, LITTLE COMPETITION
 No focus on customer
 During 1970’s IBM, Kodak ,,,, several Japanese companies
 High Q Low Volume copiers ……..ignored
 Federal Trade commission accused Xerox ..illegally monopolizing the copier
business 1700 patents to competitors.
 1980 market share fell down by less than 50 per cent.
Company would not survive

Xerox –Case analysis
 Rework, scrap, excessive inspection, lost business costing more than
20 per cent of revenue, Comparing with competition
 In 1983 company president David Kearns …need for long range
planning
 Team……Quality strategy for Xerox
 Benchmarked more than 200 process
Customer satisfaction was important
 Malcolm Baldrige National Quality award
 1989 David Quality is
A Race without Finish Line………

Theodore Roosevelt – (26th President of the United States, 1901 –1909)

Continuous Process Improvement

Total quality management

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