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  1. 1. By Sourabh Jain MBA 2010 - 2012 National Institute of Technology Karnataka, Surathkal, India12/11/2012 Sourabh Jain 1
  2. 2. Preface• This is a PowerPoint file I created in order to help me in my studies.• The material in these slides are a distilled version of the literature from 2 books1. Total Quality Management – 3rd Edition – Besterfield, Michna, Besterfield, Sacre.2. Total Quality Management – Bharat Wakhlu12/11/2012 Sourabh Jain 2
  3. 3. HOME Introduction Leadership Customer Employee Satisfaction Involvement Continuous Process Performance Improvement Measures QMS SPC12/11/2012 Sourabh Jain 3
  4. 4. Introduction12/11/2012 Sourabh Jain 4
  5. 5. Quality• Degree to which a set of inherent characteristics fulfils requirements.• Q=Performance/Expectations• TQM; T = Total i.e. company-wide, suppliers, customers; M = Management i.e. art of directing and controlling12/11/2012 Sourabh Jain 5
  6. 6. Quality q and Total Quality Q• Product orientation• Ensure produced goods are fit for sale• No prevention, No learning12/11/2012 Sourabh Jain 6
  7. 7. Quality q and Total Quality Q• Customer/Process/Product orientation• Listen to customer, product design, process optimized• Right the first time, every time; Learning; importance of internal customers12/11/2012 Sourabh Jain 7
  8. 8. Dimensions of QualityDimension MeaningPerformance Primary product characteristicsFeatures Added featuresConformance Meeting standardsReliability Consistency of performanceDurability Useful lifeService Resolution of complaintsResponse Human to human interfaceAesthetics Sensory characteristicsReputation Past performance12/11/2012 Sourabh Jain 8
  9. 9. Total Quality1. Performance Superiority2. Delight customers3. Provide value (value=quality/cost)4. Doing the right things5. Right the first time12/11/2012 Sourabh Jain 9
  10. 10. Definition of TQM• TQM is the art of managing the whole to achieve excellence.• TQM is a philosophy and a set of guiding principles that represent the foundation of a continually improving firm.• It is the application of quantitative methods and HR to improve all processes within a firm and exceed customer needs now and in the future.12/11/2012 Sourabh Jain 10
  11. 11. 6 basic concepts of TQM1. Committed and involved management to provide long term- top to bottom – organizational support2. Unwavering focus on the customer – internal and external3. Effective involvement and utilization of entire workforce4. Continuous improvement of business and production process5. Treat suppliers as partners6. Establish performance measures for processes12/11/2012 Sourabh Jain 11
  12. 12. Culture changes for TQMQuality element OLD CULTURE TQM CULTUREDefinition Product oriented Customer orientedPriorities Second to service and cost Equal to service and costDecisions Short term Long termEmphasis Detection PreventionErrors Operations SystemResponsibility Quality Control EveryoneProblem Solving Managers TeamsProcurement Price Life cycle costs, PartnershipManager’s Role Plan, assign, control, Delegate, coach, facilitate, enforce mentor12/11/2012 Sourabh Jain 12
  13. 13. Model for TQM Product, Systems Outstanding Services People and Leadership and power Procedures Process MEETING/ EXCEEDING CUSTOMER EXPECTATIONS CONTINUOUS CUSTOMER BENCHMARKING SYSTEMATIC FOCUS IMPROVEMENT12/11/2012 Sourabh Jain 13
  14. 14. Paradigms of TQM• Belief that people are a potential source of ‘beneficial forces’ will lead to total quality• Functional and Hierarchical divisions of a firm contribute to parochial thinking – not good• Everyone has to participate in obtaining total quality12/11/2012 Sourabh Jain 14
  15. 15. Gurus of TQM• Shewhart1. Economic Control of Quality of Mfg product2. Control Chart Theory3. Assignable and chance causes of variation4. Rational Subgroups5. PDSA cycle12/11/2012 Sourabh Jain 15
  16. 16. Gurus of TQM• Deming1. Out of the Crisis2. Quality, Productivity and Competitive Position3. 14 points to improve q,p,c4. Taught SPC and quality to Japanese12/11/2012 Sourabh Jain 16
  17. 17. Gurus of TQM• Juran1. Juran’s Quality control Handbook2. Project Improvements based on ROI3. Promoted commitment to quality at all levels4. Juran Trilogy – Planning, Control, Improvement12/11/2012 Sourabh Jain 17
  18. 18. Gurus of TQM• Feigenbaum1. Total Quality Control2. Customer Satisfaction3. Genuine Management Involvement4. Employee Involvement5. Company wide total quality control6. First line supervision leadership12/11/2012 Sourabh Jain 18
  19. 19. Gurus of TQM• Ishikawa1. SPC texts in Japanese and English2. Adapted TQC i.e. TQM in Japan3. Fishbone diagram4. Quality circles12/11/2012 Sourabh Jain 19
  20. 20. Gurus of TQM• Crosby1. Quality is Free2. Quality without tears3. Do it right the first time4. Zero defects12/11/2012 Sourabh Jain 20
  21. 21. Gurus of TQM• Taguchi1. Loss Function2. Quality Engineering3. Robust design of parameters/tolerances12/11/2012 Sourabh Jain 21
  22. 22. Obstacles to TQM1. Lack of management commitment2. Inability to change organization culture3. Improper planning4. Lack of continuous training and education5. Incompatible Org structure & isolated departments and individuals6. Ineffective measurement techniques7. Paying inadequate attention to customers8. Inadequate use of empowerment and teamwork9. Failure to continually improve12/11/2012 Sourabh Jain 22
  23. 23. Benefits of TQM• Improve quality• Employee participation and satisfaction• Teamwork and Working relationships• Customer satisfaction• Productivity• Communication• Profitability and Market Share12/11/2012 Sourabh Jain 23
  24. 24. Leadership12/11/2012 Sourabh Jain 24
  25. 25. Leader• A leader1. Shapes2. Promotes3. Protects4. Exemplifies• the organization’s values12/11/2012 Sourabh Jain 25
  26. 26. Manager vs. LeaderManager Leadership for quality (Outstanding leadership)Plan EXPOSE limited utility of current approachesOrganize ENVISION the futureStaff ENLIST others in the questLead EMPOWER them to actControl ENCOURAGE right effortFeedback EXEMPLIFY by personal action12/11/2012 Sourabh Jain 26
  27. 27. Leadership Style Leads to time bomb situations Best style FEARFUL WHOLESOME RIGID STYLE STYLE STYLE12/11/2012 Sourabh Jain 27
  28. 28. Characteristics of Quality Leaders1. Priority attention to internal/external customers2. Empower, rather than control subordinates3. Emphasize improvement, rather than maintenance4. Emphasize prevention5. Encourage collaboration rather than competition6. Train and coach, rather than direct and supervise12/11/2012 Sourabh Jain 28
  29. 29. Characteristics of Quality Leaders7. Learn from problems8. Continually try to improve communications9. Continually demonstrate their commitment to quality10. Choose suppliers on basis of quality, not price11. Establish organizational systems to support quality effort12. Encourage and Recognize team effort12/11/2012 Sourabh Jain 29
  30. 30. 7 habits of highly effective people1. Be proactive - don’t let fate control you, you control it2. Begin with the end in mind – have a vision and plan3. Put first things first – learn to prioritize4. Think win-win – seek mutual benefits5. Seek first to understand, then be understood6. Synergy – teams are better than individuals7. Sharpen the saw – renew one’s physical, spiritual, mental and emotional dimension12/11/2012 Sourabh Jain 30
  31. 31. Deming Philosophy• Create and publish aims/purpose of firm• Learn the new philosophy• Understand purpose of inspection• Stop awarding business on price alone• Improve constantly and forever the system• Institute training• Teach and institute leadership12/11/2012 Sourabh Jain 31
  32. 32. Deming Philosophy• Drive out fear, create trust and a climate for innovation• Optimize efforts of teams, groups and staff areas• Eliminate exhortations for the work force• Eliminate numerical quotas for workforce and MBO• Remove barriers that rob people of pride of workmanship• Encourage education and self-empowerment for everyone• Take action to accomplish the transformation12/11/2012 Sourabh Jain 32
  33. 33. Customer Satisfaction12/11/2012 Sourabh Jain 33
  34. 34. Customer Satisfaction Model Company Offer Satisfier Customer Needs12/11/2012 Sourabh Jain 34
  35. 35. Notes• Customer – Internal and External is the focus.• Customer Satisfaction is subjective, hence hard to measure• Customer Satisfaction should not be viewed in a vacuum12/11/2012 Sourabh Jain 35
  36. 36. Customer feedback1. To discover customer dissatisfaction2. Discover relative priorities of Quality3. Compare performance with competition4. Identify customer’s needs5. Determine opportunities for improvement12/11/2012 Sourabh Jain 36
  37. 37. Modes of feedback1. Comment card – Service industry2. Customer Questionnaire – mail, telephone3. Focus groups – like a GD4. Toll free telephone numbers – complaints5. Customer visits – B2B6. Report card – send to customer every quarter7. The internet – blogs8. Employee feedback – why problem?9. Mass customization – variety at affordable cost12/11/2012 Sourabh Jain 37
  38. 38. Customer Complaints Complain to Action Management Shout at Front 1% Line Employees 19% Do nothing 80% Every complaint should be accepted, analyzed and acted upon because those who don’t complain might have switched loyalty.12/11/2012 Sourabh Jain 38
  39. 39. Handling complaints• Accept feedback• Empower front-line employees to resolve• More inspection does not solve it; find the root cause• Communicate complaint to everyone in firm• Contact complainant and put mind at ease• Be proactive about customer needs12/11/2012 Sourabh Jain 39
  40. 40. Employee Involvement12/11/2012 Sourabh Jain 40
  41. 41. Motivation• Maslow’s Hierarchy of needs• Herzberg’s 2-factor theory• What employees want1. Interesting Work2. Appreciation3. Involvement4. Job Security12/11/2012 Sourabh Jain 41
  42. 42. Achieving a motivated work force1. Know thyself2. Know your employees3. Establish a +ve attitude4. Share goals5. Monitor progress6. Develop interesting work7. Communicate effectively8. Celebrate success12/11/2012 Sourabh Jain 42
  43. 43. Employee Surveys1. Quality Council creates Survey team2. Develop instrument (questionnaire).Constructs to be used are 1. Personality Characteristics 2. Management Styles 3. Job attitudes 4. The work3. Administer survey (confidential and by 3rd party)4. Compile and analyze (report is circulated in firm)5. Determine areas for improvement12/11/2012 Sourabh Jain 43
  44. 44. Suggestion Systems• Management must make it easy for employees to suggest improvements1. Be progressive – regularly ask employees2. Remove fear – focus on the process, not the person3. Simplify the process4. Respond quickly - accept/Reject/Refer giving time or reason5. Reward the idea12/11/2012 Sourabh Jain 44
  45. 45. Performance Appraisal• Purpose1. Tells employee how they are performing2. Basis for promotions and increments3. Counseling4. Opportunities• Employee involvement is critical and appraisals must be continuous.• Types – Ranking, Narrative, Forced, Graphic12/11/2012 Sourabh Jain 45
  46. 46. Problems with appraisal systems1. Emphasis on short term performance2. Individual appraisals destroy teamwork3. A person is only about 15 % responsible for his results4. Based on subjectivity and immeasurables12/11/2012 Sourabh Jain 46
  47. 47. Improving the appraisal system1. Use rating scales with fewer rating categories2. Equal emphasis to individual and group appraisals3. More frequent performance reviews with focus on improvement4. Promotion decision to be based on current performance AND potential for new post5. External customer satisfaction a part of the process6. 360 degree appraisals7. Evaluation for process improvements12/11/2012 Sourabh Jain 47
  48. 48. Benefits of employee involvement• Employees1. Make better decisions using expert knowledge of process2. More likely to implement and support decisions they had a part in making/better able to accept changes3. Better able to spot pinpoint areas for improvement4. Better able to take immediate corrective action5. EI increases morale, improves industrial relations and increases commitment to unit goals12/11/2012 Sourabh Jain 48
  49. 49. Continuous Process Improvement12/11/2012 Sourabh Jain 49
  50. 50. Juran Trilogy – Plan, Control, Improve• Planning1. Determine external and internal customers2. Identify their needs and translate into requirements3. Develop product/service as per needs of not only customer but other stakeholders too4. Develop processes able to produce product/service5. Transfer plans to operations ensuring process validity12/11/2012 Sourabh Jain 50
  51. 51. Juran Trilogy – Plan, Control, Improve• Control1. Determine items to be controlled and their units of measure2. Set goals for controls and determine what sensors are needed3. Measure actual performance4. Compare it with goals5. Act on the difference12/11/2012 Sourabh Jain 51
  52. 52. Juran Trilogy – Plan, Control, Improve • Improvement • Quality council identifies improvement areas and establishes project teams to work on it Quality Control (during operations) 50 Sporadic Waste 40 30 Original Zone of Quality Control QUALITY 20 New Zone of Quality ControlPLANNING 10 Chronic Waste Quality Improvement FEEDBACK 0 0 1 2 3 4 5 6 7 8 9 10 Time FEEDBACK 12/11/2012 Sourabh Jain 52 Cost of poor Quality
  53. 53. PDSA Cycle Plan Act Do Study12/11/2012 Sourabh Jain 53
  54. 54. Problem Solving method 1 Identify Opportunity 7 Plan for 2 Analyze Future Process 6 3 Develop Standardize Optimal solution Solution (s) 5 Study the 4 results Implement12/11/2012 Sourabh Jain 54
  55. 55. 1 Identify Opportunity• Identify problem – Pareto analysis, Survey, Brainstorm, proposals• Form team – QC forms a multifunction team if required• Define scope – scope, goals, milestones12/11/2012 Sourabh Jain 55
  56. 56. 2 Analyze Process• Develop Process Flow diagram• Define target performance measures• Relevant Data collection• Fishbone diagram12/11/2012 Sourabh Jain 56
  57. 57. 3 Develop Optimal Solution (s)• Brainstorm – create new process/combine different process/modify existing process• Evaluate Test solutions using control charts – criteria: feasibility, scope, training and effects12/11/2012 Sourabh Jain 57
  58. 58. 4 Implement• Prepare implementation plan• Obtain approval• Implement process improvements12/11/2012 Sourabh Jain 58
  59. 59. 5 Study the results• Monitor and evaluate the change• Check if fine tuning is needed• If dissatisfied with results, repeat some phases12/11/2012 Sourabh Jain 59
  60. 60. 6 Standardize solution• Positrol (Positive control) – ensures important variables are kept under control• Process Certification• Operator Certification12/11/2012 Sourabh Jain 60
  61. 61. 7 Plan for Future• Regular reviews of progress by QC• Knowledge Management System – save learnings• Repeat Phase 1.12/11/2012 Sourabh Jain 61
  62. 62. Kaizen• Process of continuous improvement in small increments without complex technology or high costs making processes better• Uses concepts like: Value/Non value added activities, Mudas, Motion studies, SOP, 5S, Visual Management, JIT etc• 5S – Sort, Simplify, Sweep, Standardize, Sustain12/11/2012 Sourabh Jain 62
  63. 63. Six Sigma• Uses Cp analysis as a way to measure progress• We should reduce the process variability σ to keep process centered on the target μ.• Process Capability Index = USL-LSL/6 σ• Process Performance Index Cpk = min(USL-X,X-LSL)/3 σ• Default Cp >1, Cpk =112/11/2012 Sourabh Jain 63
  64. 64. Performance Measures12/11/2012 Sourabh Jain 64
  65. 65. Strategy• QC creates a total system of measures using info from stakeholders and firms’ VMG and values• Ex: Quality• % reduction in nonconformities• % of certified suppliers12/11/2012 Sourabh Jain 65
  66. 66. Strategy• Cost• % increase in inventory turnover• % increase in output dollars per employee• Similarly for innovation (NPD time), reliability (% processes having Cp=2), flexibility(setup time) etc.• Tracked monthly to show trends, identify problems and allocate resources• Depts create mechanisms and authorities to capture this data12/11/2012 Sourabh Jain 66
  67. 67. Performance Measure Presentation1. Time series graph (Time in days, weeks etc)2. Control charts (R,Xbar)3. Capability Index4. Taguchi Loss Function5. Cost of poor quality6. Malcolm Balridge National Quality Award12/11/2012 Sourabh Jain 67
  68. 68. Quality Costs• Those costs associated with the non- achievement of product or service quality as is required• Quality cost programs – quantifies this cost• Use Pareto analysis to find major cost drivers12/11/2012 Sourabh Jain 68
  69. 69. Quality Costs• Preventive cost: Cost used up in preventing recurrence of some failure. Ex: Customer surveys, Product testing, Quality audits• Appraisal cost: Cost of assuring acceptability of product. Ex: laboratory support, measuring equipment, certifications12/11/2012 Sourabh Jain 69
  70. 70. Quality Costs• Internal Failure Cost: cost to evaluate, dispose off, & either correct or replace nonconforming products prior to customer delivery. Ex: rework and scrap, poor supply materials, internal failure labor loss• External Failure Cost: After delivery. Ex: returned goods, updates, warranty claims, penalties, lost sales, liabilities, goodwill12/11/2012 Sourabh Jain 70
  71. 71. Malcolm Balridge National Quality Award• Leadership 110• Strategic Planning 80• Customer and Market focus 80• Information and Analysis 80• HR Focus 100• Process Management 100• Business Results 45012/11/2012 Sourabh Jain 71
  72. 72. Quality Management System12/11/2012 Sourabh Jain 72
  73. 73. QMS• Registration under ISO involves assessment and periodic surveillance audit of the adequacy of a supplier’s quality system by a 3rd party• Benefits of ISO1. Customers are demanding compliance2. To improve processes/systems3. Global deployment of products4. Snowball effect12/11/2012 Sourabh Jain 73
  74. 74. ISO 9000• Generic in nature• It has 3 standards• ISO 9000:2000 QMS fundamentals/vocabulary• ISO 9000:2000 QMS requirements• ISO 9000:2000 QMS guidelines for performance improvement12/11/2012 Sourabh Jain 74
  75. 75. ISO 9001 requirements1. Scope2. Normative reference3. Terms and Definitions4. QMS – General Reqs and Documents5. Management Responsibility6. Resource Management7. Product Realization8. Measurement, Analysis and Improvement12/11/2012 Sourabh Jain 75
  76. 76. Process based QMS 5 Management Responsibility 4 QMS 8 6 Resource Continual Measurement Customer Management Improve Analysis and Satisfaction Improvement ment 7 Product Input Realization Require Output ments Product12/11/2012 Sourabh Jain 76
  77. 77. Implementation1. Top management commitment2. Appoint management representative3. Awareness4. Appoint implementation team5. Training6. Time Schedule7. Select element owners8. Review present system9. Write the documents10. Install the new system11. Internal audit12. Management review13. Preassessment14. Registration12/11/2012 Sourabh Jain 77
  78. 78. Documentation What will be done and why ? Policy Procedures Who, When, Where How Work Instructions Proof12/11/2012 Sourabh Jain 78
  79. 79. Statistical Process Control12/11/2012 Sourabh Jain 79
  80. 80. Introduction• SPC is a technical tool for improving product and service quality.• Pareto Diagram• Process Flow Diagram• Cause and Effect Diagram• Check Sheets• Histogram12/11/2012 Sourabh Jain 80
  81. 81. Pareto Diagram• Vital few and the useful many• Ranks data classifications in descending order12/11/2012 Sourabh Jain 81
  82. 82. Pareto Diagram• Solving 50 % of vital few is better and easier than 50 % of useful many• Never ending process12/11/2012 Sourabh Jain 82
  83. 83. Process Flow Diagram12/11/2012 Sourabh Jain 83
  84. 84. Cause and Effect Diagram• Brainstorming essential. 4 or more likely causes determined by voting12/11/2012 Sourabh Jain 84
  85. 85. Cause and Effect Diagram• Wide scope for application• Encourages participation and contribution by everyone• Diagrams posted in key locations to stimulate continued reference12/11/2012 Sourabh Jain 85
  86. 86. Check Sheets• For ease of data collection• Customized for situation12/11/2012 Sourabh Jain 86
  87. 87. Histograms• Graphically estimates Cp, relationships to specifications and target, shape of population and gaps in data• Graphical and analytical• Ungrouped and Grouped data (for large data)12/11/2012 Sourabh Jain 87
  88. 88. 12/11/2012 Sourabh Jain 88
  89. 89. Normal curve• Larger the Std Dev, flatter the curve (less data)12/11/2012 Sourabh Jain 89
  90. 90. Types and Causes of variation• Types1. Within piece2. Piece to piece3. Time to time• Causes1. Equipment2. Material3. Environment4. Operator12/11/2012 Sourabh Jain 90
  91. 91. Variable Control Charts12/11/2012 Sourabh Jain 91
  92. 92. Process Capability• σ = Rbar/d2• Cp = (USL-LSL)/6 σ• USL-LSL=tolerance• X• X• Cpk = min{(USL-Xbar) or (Xbar-LSL)}/3 σ12/11/2012 Sourabh Jain 92
  93. 93. Cp and Cpk1. Cp value does not change as process center changes2. Cp=Cpk process is centered3. Cpk<=Cp4. Cpk>1 process conforms to specifications5. Cpk<1 process not conforms to specifications6. Cp<1 process not capable7. Cpk=0 average =USL or LSL8. Cpk <0 average outside specifications12/11/2012 Sourabh Jain 93
  94. 94. Scatter diagrams• For correlations12/11/2012 Sourabh Jain 94
  95. 95. BLUE OCEAN STRATEGY12/11/2012 Sourabh Jain 95
  96. 96. 12/11/2012 Sourabh Jain 96