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  • 1. 6 Total Quality Management Chapter: 1 Introduction: Total Quality Management (TQM) refers to management methods used to enhance quality and productivity in business organizations. TQM is a comprehensive management approach that works horizontally across an organization, involving all departments and employees and extending backward and forward to include both suppliers and customers. TQM is an approach to improving the effectiveness and flexibilities of business as a whole. It is essentially a way of organizing and involving the whole organization, every department, every activity and every single person at every level. TQM ensures that the management adopts a strategic overview of the quality and focuses on prevention rather than inspection. Background: Based on the principles of management, Total Quality Management has a philosophical background. Rite from the time it was brought forward by greats like Deming and juran, it has been adopted in significant manners by many top companies of the world. Such companies are of the likes of Toyota in japan and maruti in India. Much of the organizations today use it as the means to develop their objectives which govern their management in return. There are a number of areas that this concept looks to cover. It started from monitoring and control and today it includes commitment of management, satisfaction of customers, process management employee management which look to manage the entire business in a holistic manner. The concept has a lot to-do with continuous improvement, fact response, action based on facts and employee participation. Objectives The main purpose for making this term paper is to known the total Quality Management. The specifics objective maybe show as under-  To know the Total Quality Management  To acquire knowledge of quality management to achieve goals.  Design a product or service that meets or exceeds customer wants  Design processes that facilitates doing the job right the first time  Keep track of results  Extend these concepts to suppliers
  • 2. 7 Total Quality Management Methodology: In order to meet the needs of fulfilling the objectives of the term paper secondary data are required. There are two types of sources  Primary Data Sources.  Secondary Data Sources. In this report we don’t used any kind of primary data source. Secondary data are collected through  Web site.  Journals.  Research Paper.
  • 3. 8 Total Quality Management Chapter: 2 Meaning of Quality The word “Quality” represents the properties of products and services that are valued by the customer. The Standard of something as measured against other things of a similar kind, the degree of excellence of something. There is no single definition of the term quality. Quality means different to different people such as: 1. Customer –Based: Fitness for use, meeting customer expectations. 2. Manufacturing-Based: Conforming to design, specifications or requirements. Having no defects. Quality conformance to requirements. Quality is the degree to which a specific product conforms to a design or specification. 3. Product-Based: The product has something that other similar products do not that adds value in other words quality refers to the amounts of the unprimed attributes contained in each unit of the priced attribute. 4. Value-Based: The product is the best combination of price and features or quality means best for certain customer conditions. These conditions are the actual use and the selling price of the product. 5. Transcendent: It is not clear what it is, but it is something good or it may also be defined as quality is neither mind nor matter, but a third entity independent of the two even through Quality cannot be defined.
  • 4. 9 Total Quality Management Definition of Total Quality management TQM is the enhancement to the traditional way of doing business. It is a proven technique to g guarantee survival in the world-class competition.TQM is for the most part common sense. Analyzing three words (TQM) are  Total- Made up of the whole  Quality- Degree of excellence a product or service provides  Management- Act, art or manner of handing, controlling, directing etc. Therefore, TQM is the art of managing the whole to achieve the excellence. TQM is defined as both philosophy and a set of guiding principles that represents the foundation of continuously improving organization. It is the application of qualitative methods and human resources to improve all the processes within an organization and exceed customer needs now and in future.TQM integrates fundamental management techniques, existing improvement efforts and technical tools under disciplined approach. Quality from the Producer’s perspective Product development is a function of the quality characteristics the consumer wants, needs and can afford. Product or service design results in design specifications that should achieve the desired quality. However, once the product design has been determined, the producer perceives quality to be how effectively the production process is able to conform to the specifications required by the design referred to as the quality of conformance. Dimensions of Quality Manufactured Products 1. Performance: Performance is often a source of contention between customers and suppliers, particularly when deliverables are not adequately defined within specifications. 2. Features: While this dimension may seem obvious, performance specification rarely defines the features required in a product. Thus, it is important that suppliers designing product or services from performance specifications are familiar with its intended uses and maintain close relationships with the end-users. 3. Reliability: Reliability may be closely related to performance. For instance, a product specification may define parameters for up-time or acceptable failure rates. 4. Conformance: It is the degree to which the product conforms to pre-established specifications. All quality products are expected to precisely meet the set standards. 5. Durability: It measures the length of time that a product performs before a replacement becomes necessary. The durability of home appliances such as a washing machine can range from 10 to 15 years. 6. Serviceability: Serviceability refers to promptness, courtesy, proficiency and ease in repair when the product breaks down and is sent for repairs.
  • 5. 10 Total Quality Management 7. Aesthetics: Aesthetic aspect of a product is comparatively subjective in nature and refers to its impact on the human senses such as how it looks, feels, sounds, tastes and so on, depending upon the type of product. 8. Perceived Quality: An equally important dimension of quality is the perception of the quality of the product in the mind of the consumer. Dimensions of Quality Services Products: • Time and timeliness • How long must a customer wait for service, and is it completed on time? • Is an overnight package delivered overnight? • Completeness: • Is everything customer asked for provided? • Is a mail order from a catalogue company complete when delivered? Quality from the Consumer’s Perspective: A business organization produces goods and services to meet its customers’ needs. Quality is rapidly becoming a major factor in a customer’s choice of products and service. Customers now perceive that certain companies produce better-quality products than others and they buy accordingly. Dimensions of Quality  Fitness for use How well product or service does what it is supposed to  Quality of design Designing quality characteristics into a product or service A Mercedes and a Ford are equally “fit for use,” but with different design dimensions.
  • 6. 11 Total Quality Management Quality Assurance: Quality is an essential ingredient in building successful businesses and marketing. Not only do product and services need to be of high quality but potential customers also needed to have assurance that the products will be of high quality. Organizations that have developed a quality system have found that it is becoming a vital part of their business strategy. The history of quality assurance: Quality Assurance systems were first widely introduced during WWII. There was a need to tighten controls an industry output, particularly in the military industry. These were initially just inspection and testing, and relied on catching the defects at the end of the process. As the demand for better quality and more reliable products and services increased, the quality systems evolved to become the ISO 9000 series. These now rely on prevention rather than cure and are applicable to all industries, including the construction industry. The Quality Assurance standards In 1987 respected industry representatives from around the globe assisted International Standards Organization (ISO) to develop the ISO 9000 series of quality system standards. There standards have been recognized and are in use in over 90 countries including the United Kingdom, the European Community. The 2 most commonly used standards in the ISO 9000 series are IOS 9001 and ISO 9002.
  • 7. 12 Total Quality Management Total Quality management: Total Quality Management (TQM) is the optimization and integration of all the functions and processes of a business in order to provide for excited customers through a process of continuous improvement. The 1990’s is the decade of Globalization. In order for companies to be competitive in this environment they have seen the imperative need for quality. However through the decades leading to the 90’s there have been many “gurus” who have explicitly underlined the need for Total Quality Management systems in companies, but due to many factors these ideas have either gone unheeded or been buzz word for a shot and a marketing too. Nevertheless it is a tool that is being extensively used in the 90’s to help companies gain and maintain a competitive edge over their rivals. Determinants of Quality Quality of design  Intension of designers to include or exclude features in a product or service Quality of conformance  The degree to which goods or services conform to the intent of the designers
  • 8. 13 Total Quality Management TQM Six Basic Concepts: 1. Leadership 2. Customer Satisfaction 3. Employee Involvement 4. Continuous Process Improvement 5. Supplier Partnership 6. Performance Measures (All these present an excellent way to run a business) 1. Leadership  Top management must realize importance of quality  Quality is responsibility of everybody, but ultimate responsibility is CEO  Involvement and commitment to CQI  Quality excellence becomes part of business strategy  Lead in the implementation process Characteristics of Successful Leaders: 1. Give attention to external and internal customers 2. Empower, not control subordinates. Provide resources, training, and work environment to help them do their jobs 3. Emphasize improvement rather than maintenance 4. Emphasize prevention 5. Encourage collaboration rather than competition 6. Train and coach, not direct and supervise 7. Learn from problems – opportunity for improvement 8. Continually try to improve communications 9. Continually demonstrate commitment to quality 10. Choose suppliers on the basis of quality, not price 11. Establish organisational systems that supports quality efforts Implementation Process  Must begin from top management, most important CEO commitment  Cannot be delegated (indifference, lack of involvement cited as principle reason for failure)  Top/senior management must be educated on TQM philosophy and concepts, also visit successful companies, read books, articles, attend seminars
  • 9. 14 Total Quality Management  Timing of implementation – is the org ready, re-organization, change in senior personnel, current crisis – then need to postpone to favourable time  Need a roadmap/framework for implementation  Formation of Quality Council – policies, strategies, programmes 2. Customer Satisfaction  Customer is always right – in Japan customer is “King”  Customer expectations constantly changing – 10 years ago acceptable, now not anymore!  Delighting customers (Kano Model)  Satisfaction is a function of total experience with organization  Must give customers a quality product or service, reasonable price, on-time delivery, and outstanding service  Need to continually examine the quality systems and practices to be responsive to ever – changing needs, requirements and expectations – Retain and Win new customers Customer Feedback To focus on customer, an effective feedback program is necessary, objectives of program are to: 1. Discover customer dissatisfaction 2. Discover priorities of quality, price, delivery 3. Compare performance with competitors 4. Identify customer’s needs 5. Determine opportunities for improvement 3. Employee Involvement:  People – most important resource/asset  Quality comes from people  Deming – 15% operator errors, 85% management system  Project teams – Quality Control Circles (QCC), QIT  Education and training – life long, continuous both knowledge and skills  Suggestion schemes; Kaizen, 5S teams  Motivational programmes, incentive schemes  Conducive work culture, right attitude, commitment 4. Continuous Process Improvement:  View all work as process – production and business  Process – purchasing, design, invoicing, etc.  Inputs – PROCESS – outputs  Process improvement – increased customer satisfaction
  • 10. 15 Total Quality Management  Improvement – 5 ways; Reduce resources, Reduce errors, Meet expectations of downstream customers, Make process safer, make process more satisfying to the person doing 5. Supplier Partnership:  Define product/program requirements; 1. Evaluate potential and select the best suppliers 2. Conduct joint quality planning and execution 3. Require statistical evidence of quality 4. Certify suppliers, e.g. ISO 900, Ford Q1 5. Develop and apply Supplier Quality Ratings  Defects/Percent non-conforming  Price and Quality costs  Delivery and Service 6. Performance Measures:  Managing by fact rather than gut feelings  Effective management requires measuring  Use a baseline, to identify potential projects, to asses results from improvement  E.g. Production measures – defects per million, inventory turns, on-time delivery  Service – billing errors, sales, activity times  Customer Satisfaction  Methods for measuring  Cost of poor quality  Internal failure  External failure  Prevention costs  Appraisal costs
  • 11. 16 Total Quality Management  Award Models (MBNQA, EFQM, PMQA)  Benchmarking – grade to competitors, or best practice  Statistical measures – control charts, Cpk  Certifications  ISO 9000:2000 Quality Mgt System.  ISO 14000 Environmental Mgt System.  Underwriters Lab (UL), GMP.  QS 9000, ISO/TS 16949.
  • 12. 17 Total Quality Management Chapter: 3 Concept from Quality Gurus An extensive review of literature was carried out to identify the concept of TQM from quality gurus such as Deming (1986), Juran (1993), Crosby (1979), Feigenbaum (1991) and Ishikawa (1985). Their propositions are the foundation for understanding the concept of TQM. The following subsections present the main principles and practices of TQM proposed by these quality gurus. Deming’s Approach to TQM The theoretical essence of the Deming approach to TQM concerns the creation of an organizational system that fosters cooperation and learning for facilitation g the implementation of process management practices, which in turn, leads to continuous implementation of process, products and services as well as to employee fulfillment, both of which are critical to customer satisfaction and ultimately, to firm survival. Deming (1986) stressed the responsibilities of top management to take the lead in changing processes and systems. Deming’s 14 Points for Management 1. Create constancy of purpose towards improvement of product and service with aim to be competitive, stay in business and provide jobs. 2. Adopt a new philosophy – new economic age, learn responsibilities and take on leadership for future change. 3. Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into product in the first palace. 4. End the practice of awarding business on the basis of price, instead, minimize total costs. 5. Improve constantly and forever the system of production and service, to improve quality and productivity, thus decreasing costs. 6. Institute training on the job 7. Institute leadership, supervision to help do a better job. 8. Drive out fear, everyone can work effectively for company. 9. Break down barriers between departments. Work as teams to foresee production problems. 10. Eliminate slogans, exhortations, and targets for workforce. 11. Eliminate numerical quotas on the workforce. 12. Remove barriers that rob people pride of workmanship. 13. Institute a vigorous program of education and self-improvement. 14. Put everybody to work to accomplish the transformation.
  • 13. 18 Total Quality Management The Plan-Do-Study-Act cycle describes the activities a company needs to perform in order to incorporate continuous improvement in its operation. Juran’s Approach to TQM TQM is the system of activity directed at achieving delighted customers, empowered employees, higher revenues and lower costs ( juran and gryna, 1993). Juran believed that main quality problems are due to management rather than workers. The attainment of quality requires activities in all functions of a firm. Firm-wide assessment of quality, supplier quality management,using statistical methods, quality information system, and competitive benchmarking are essential to quality improvement. According to Juran, it is very important to understand customer needs. This requirement applies to all involved in marketing, design, manufacture and services. Juran defined four broad categories of quality costs, which can be used to evaluate the firm’s costs related to quality. Such information is valuable to quality improvement. The four quality costs are listed as follows:
  • 14. 19 Total Quality Management  Failure Costs – costs incurred by defective parts/products or faulty services.  Internal Failure Costs  Costs incurred to fix problems that are detected before the product/service is delivered to the customer.  External Failure Costs  All costs incurred to fix problems that are detected after the product/service is delivered to the customer.  Appraisal Costs  Costs of activities designed to ensure quality or uncover defects  Prevention Costs  All TQ training, TQ planning, customer assessment, process control, and quality improvement costs to prevent defects from occurring Universal processes for Managing Quality Crosdy’s Approach to TQM Crosby (1979) identified a number of important principles and practices for a successful quality improvement program, which include, for example management participation, management responsibility for quality, employee recognition, education, reduction of the cost of quality. The quality management maturity grid and cost of quality measures are the main tools for managers to evaluate their quality status. Crosby offered a 14-step program that can guide firms in pursuing quality improvement. These steps are listed as follows: 1. Make it clear that management is committed to quality. 2. Form quality improvement teams with representatives from each department. 3. Determine where current and potential quality problems lie. 4. Evaluate the cost of quality and explain its use as a management tool. 5. The quality awareness and personal concern of all employees.
  • 15. 20 Total Quality Management 6. Take actions to correct problems identified through previous steps. 7. Establish a committee for the zero defects programme. 8. Train supervisors to actively carry out their part of the quality improvement programme. 9. Hold a ‘zero defects day’ to let all employees realise that there has been a change. 10. Encourage all individuals to establish improvement goals for themselves and their groups. 11. Encourage employees to communicate to management the obstacles they face in attaining their improvement goals. 12. Recognise and appreciate those who participate. 13. Establish quality councils to communicate on a regular basis. 14. Do it all over again to emphasise that the quality improvement programme never ends. Feigenbaum’s Approach to TQM Feigenbaum (1991) defined TQM as an effective system for integrating the quality development, quality-maintenance and quality-improvement efforts of the various groups in a firm so as to enable marketing, engineering, production and service at the most economical levels which allow for customer satisfaction. He claimed that effective quality management consists of four stages: Setting quality standards, Appraising conformance to the standards, Acting when standards are not met, Planning for improvement in these standards. Ishikawa’s Approach to TQM Ishikawa (1985) argued that quality management extends beyond the product and encompasses after sales service, the quality of management, the quality of individuals and the firm itself. He claimed that the success of firm is highly dependent on treating quality improvement as a never-ending quest. He has been associated with the development and advocacy of universal education in the seven QC tools. There tools are listed below: Basic Quality Tools  Flowcharts  Check sheets  Histograms  Pareto Charts  Scatter diagrams  Control charts  Cause-and-effect diagrams  Run charts
  • 16. 21 Total Quality Management Flowcharts A flowchart is a schematic diagram of the sequence of steps involved in an operation. It provides a visual tool that is easy to use and understand. Checks Sheets A checklist is a list of common defects and the number of observed occurrences of these defects. Ti is a simple yet effective fact-finding tool that allows the workers to collect specific information. Histograms A histogram is a chart that shows the frequency distribution of observed values of a variable.
  • 17. 22 Total Quality Management Pareto Charts Pareto analysis is a technique used to identify problems based on their degree of important. Scatter diagrams Scatter diagrams are graphs that how two variables are related to one another. They are particularly useful in detecting the amount of correlation or the degree of liner relationship between tow variables. Control charts Control Charts are a very important quality control tool.
  • 18. 23 Total Quality Management Cause-and-effect diagrams Cause-and-effect diagrams are charts that identify potential causes for particular quality problems. Run charts A run chart also known as a run-sequence plot is a graph that displays observed data in a time sequence. Often the data displayed represent some aspect of the output or performance of a manufacturing. QUALITY CIRCLES A quality circle is a group of employees from the same work area and doing similar type of work voluntarily meet for an hour periodically either every week or fortnightly to identify and analyze a. Quality of work they perform. b. Working conditions. c. The common number of employees for a quality circle group is about 8-10 individuals. d. Pre-Requisites for successful quality circles. e. Members of Quality circles must have prior training in problem solving. f. Top management support/attitude. Actual implementation to be pre-ceded by carefully developed plan for maximum returns.
  • 19. 24 Total Quality Management Quality in Product Design  Quality function deployment (QFD)  Used by product design teams  Used to translate customer preferences into specific technical requirements  The technical requirements are used to develop the product specification  Operations is responsible for making the product to specifications  Products that meet specifications have conformance quality  Objective is to satisfy customers Process used to ensure that the product meets customer specifications
  • 20. 25 Total Quality Management The Deming Prize The deming Prize is a Japanese award give to recognize their efforts in quality improvement. The award is named afer W.Edwards Deming, who visited Japan after Secound World War upon the request of Japanes industrial leaders.Kenichi Koyanagi, the managing director of the Japanese Union of Scientists and Engineers (JUSE) used those funds to create the Deming.  Establish in 1950 originally for Japanese companies for major advances in quality improvement  Deming’s Prize is given under Japanese Union of Scientists & Engineers  Several categories including prizes for individuals, factories, small companies, and Deming application prize  These days Deming’s Prize is awarded to non Japanese companies and even individuals  2001 – Sundram Brake Linings, the world’s first friction material company to win  2008 – Tata Steel is the first integrated steel plant in Asia to win.  The Deming Prize examination does not require applicants to conform to a model provided by the Deming Prize Committee. Rather, the applicants are expected to understand their current situation establish their own themes and objectives, and improve and transform themselves company-wide  The Deming Prize Committee views the examination process as an opportunity for "mutual-development," rather than "examination  Every factor such as the applicants' attitude toward executing Total Quality Management (TQM), their implementation status, and the resulting effects is taken into overall consideration. In other words, the Deming Prize Committee does not specify what issues the applicants must address, rather the applicants themselves are responsible for identifying and addressing such issues, thus, this process allows quality methodologies to be further developed. The Deming Prize Assessment Criteria 1. Policies 2. Organizations 3. Education and dissemination 4. Information and communication 5. Analysis 6. Standardization 7. Control and management 8. Quality assurance 9. Effects 10. Future plans
  • 21. 26 Total Quality Management Quality Award and Certifications  Malcolm Baldrige National Quality Award  ISO 9000 Certification  ISO 14000 Certifications  Malcolm Baldrige National Quality Award  Competitive quality award presented by  U. S. government  5 award categories: Manufacturing, services, small business, health care, education  All written applications are reviewed by trained examiners  Site visits to leading candidates  Maximum of 2 awards per category Baldrige Award - Business Results  Customer-focused results  Product and service performance  Financial and market results  Human resource results
  • 22. 27 Total Quality Management  ISO 9000 Set of international standards on quality management and quality assurance, critical to international business. ISO 9000 standards audits must be performed by a registrar, a firm that is certified to do ISO 9000 audits Some companies require their suppliers to be certified  ISO 14000 A set of international standards for assessing a company’s environmental on performance. Standard-setting and certification procedures are similar to ISO 9000 ISO 9000 Quality Management Principles 1. Customer focus 2. Leadership 3. People involvement 4. Process approach 5. A systems approach to management 6. Continual improvement 7. Factual approach to decision making 8. Mutually beneficial supplier relationships Objectives of ISO Standards  Achieve, maintain, and continuously improve product quality  Improve quality of operations to continually meet customers’ and stakeholders’ needs  Provide confidence to internal management and other employees that quality requirements are being fulfilled  Provide confidence to customers and other stakeholders that quality requirements are being achieved  Provide confidence that quality system requirements are fulfilled TQM is the way of Managing the future, and is far wider in its application than just assuring product or service quality– it is a way of managing people and business processes to ensure complete customer satisfaction at every stage, internally and externally. TQM, combined with effective leadership, results in an organization doing the right things, first time.
  • 23. 28 Total Quality Management TQM Efforts Fail  Lack of top management support and commitment  Lack of a genuine quality culture  Continuous improvement  Teamwork  Training  Employee empowerment  Recognition and rewards (team or individual)  Under-reliance or over-reliance on statistical process control (SPC)  SPC is an essential tool for identifying problems and monitoring quality  It is important to solve the problems (PDSA, 7 quality tools).
  • 24. 29 Total Quality Management Reference: WWW.GOOGLE.COM WWW.sideshare.com
  • 25. 30 Total Quality Management