2. What is Quality
FEDEX - “Performance to the standard expected by the customer”
General Services Administration - “Meeting the customer’s need
the first time and every time”
BOEING - “Providing customers with products and services that
consistently meet their needs and expectations.
US Department of Defense - “Doing the right thing right the first
time, always striving for improvement, and always satisfying the
customer”.
Quality can be defined in terms of the agent. Who is the judge of
quality?
3. Contd…..
Quality involves meeting or exceeding customer expectations.
Quality applies to products, services, people, processes, and
environments.
Quality is an ever-changing state (i.e., what is considered quality
today may not be good enough to be considered quality tomorrow).
Quality (kwol’e-te’). A systematic approach to the search
for excellence. (Synonyms: productivity, cost reduction,
schedule performance, customer satisfaction, teamwork, the
bottom line.)
Quality is a dynamic state associated with products, services,
people, processes and environments that meets or exceeds
expectations.
4. Fundamental aspects of
quality
Measurable aspects of
quality
Consumer (marketable)
Operational aspects of
quality
Conservational aspects
of quality
Environmental aspects
of quality
Human aspects of
quality
Quality of design (specifications,
standards, grades)
Quality of conformance
Fitness for use, performance,
reliability, life, price, availability,
delivery
Quality of management,
operations, employees, system,
maximum output, minimum waste
and cost, optimum delivery
Optimum use of resources
(materials. Machines, money,
land, energy, people)
Ecology, clean air, unpolluted
water, potable water, tolerable
noise levels, safe waste, open
space, landscape, recreation,
beauty
Quality of life, health, education,
culture, society, freedom, ethical
and moral values
5. What is Quality?
Conformance to specifications How well a product or service meets the
targets and tolerances determined by its designers.
For example, the dimensions of a machine part may be specified by its
design engineers as 3.05 inches. This would mean that the target
dimension is 3 inches but the dimensions can vary between 2.95 and 3.05
inches. Similarly, the wait for hotel room service may be specified as 20
minutes, but there may be an acceptable delay of an additional 05
minutes. Also, consider the amount of light delivered by a 60 watt light
bulb. If the bulb delivers 50 watts it does not conform to specifications
6.
Fitness for use A definition of quality that evaluates how
well the product performs for its intended use.
For example, a Mercedes Benz and a Jeep Cherokee both
meet a fitness for use definition if one considers
transportation as the intended function. However, if the
definition becomes more specific and assumes that the
intended use is for transportation on mountain roads and
carrying fishing gear, the Jeep Cherokee has a greater fitness
for use. You can also see that fitness for use is a user-based
definition in that it is intended to meet the needs of a specific
user group.
7.
Value for price paid is a definition of quality that consumers
often use for product or service usefulness. This is the only
definition that combines economics with consumer criteria; it
assumes that the definition of quality is price sensitive.
For example, suppose that you wish to sign up for a personal
finance seminar and discover that the same class is being
taught at two different colleges at significantly different
tuition rates. If you take the less expensive seminar, you will
feel that you have received greater value for the price.
8.
Support services provided are often how the
quality of a product or service is judged. Quality
does not apply only to the product or service itself; it
also applies to the people, processes, and
organizational environment associated with it.
For example, the quality of a university is judged not
only by the quality of staff and course offerings, but
also by the efficiency and accuracy of processing
paperwork.
9.
Psychological criteria is a subjective definition that focuses
on the judgmental evaluation of what constitutes product or
service quality. Different factors contribute to the evaluation,
such as the atmosphere of the environment or the perceived
prestige of the product.
For example, a hospital patient may receive average health
care, but a very friendly staff may leave the impression of
high quality.
Similarly, we commonly associate certain products with
excellence because of their reputation; Rolex watches and
Mercedes-Benz automobiles are examples.
10. DEFINITION OF TQM
TQM is a management approach for an
organization, centered on quality, based on
the participation of all its members and
aiming at long-term success through customer
satisfaction, and benefits to all members of
the organization and to society
TQM Definitions:
Focussing on customers satisfaction.
Provides best quality product at lowest possible price
Prevention of defects, target is zero defects
11.
12. Details About TQM
Total = Quality involves everyone and all
activities in the company.
I.Marketing
II.Finance
III.Design
IV.Engineering
V.Production
VI.Customer service
13. Cont…
Q : quest for excellence
U : understanding customer
A : action for achieve customer satisfaction
L : better leadership
I : involvement of all people
T : team spirit to work for common goal
Y : yardstick to measure progress
18. Main Advantages of TQM
1.
2.
3.
4.
5.
Encourages a strategic approach to management at the operational
level through involving multiple departments in cross-functional
improvements and systemic innovation processes;
Provides high return on investment through improving efficiency;
Works equally well for service and manufacturing sectors;
Allows organizations to take advantage of developments that enable
managing operations as cross-functional processes; and
Fits an orientation toward inter – organizational collaboration and
strategic alliances through establishing a culture of collaboration
among different departments within organization.
20. Barriers in Successful TQM
Lack of management commitment
Inability to change org. culture
Improper planning
Lack of continuous training and Education
Lack of data & results or access to data or
ineffective measurement
Inadequate attention to customer (I&E)
Inadequate use of empowerment & teamwork
Incompatible org structure , individualistic
21. History of Quality Management
Frederick W. Taylor wrote Principles of Scientific Management in 1911.
Walter A. Shewhart used statistics in quality control and inspection, and
showed that productivity improves when variation is reduced (1924); wrote
Economic Control of Manufactured Product in 1931.
In 1942 – W. Shewart introduced statistical control charts to monitor
production.
In 1930 H.F. Dodge and H.G. Romig introduced tables for acceptence
sampling.
World War II caused a dramatic increase in Quality Control.
US Universities started training engineers in the industries
W. Edwards Deming (SQC) and Joseph M. Juran (Cost of Quality
Approach), students of Shewhart, went to Japan in 1950; began
transformation from “shoddy” to “world class” goods.
22. Contd…
Armand Fiegan Baum proposed TQC which enlarged the focus of QC from
manufacturing to include product design and incoming raw material.
In 1960, Dr. K. Ishikawa formalized “quality circles” - the use of small groups to
eliminate variation and improve processes.
Around the same time the concept of “Zero-Defects” (Philip Crosby) gained
favour , focused on employee motivation and awareness.
Early 1970s quality assurance methods were used in services govt. operations,
healthcare and banking services etc..
A Dramatic shift from Quality Assurance to Strategic Approach to Quality, i.e.,
from reactive approach of finding and correcting defectives in products
manufactured was changed to pro-active approach of focusing on preventing
defects from recurring altogether.
In the late ‘70’s and early ‘80’s:
Deming returned from Japan to write Out of the Crisis,
and began his famous 4-day seminars in the United States
Philp Crosby wrote Quality is Free
NBC ran “If Japan can do it, why can’t we?”
Motorola began 6 Sigma
23. Dimensions of Quality:
Manufactured Products
Performance
Features
primary operating characteristics of a product; how well a car is
handled or its gas mileage, for a television it includes sound, picture
clarity, colour and ability to receive signals and other applications.
“extra” items added to basic features, such as a stereo CD or a leather
interior in a car, boot space, central lock system and etc….
Reliability
Probability of a product will operate properly within an expected time
frame; that is, a TV will work without repair for about seven years.
MTFF (Mean time to first failure) AND MTBF (Mean time between
failures)
24. Dimensions of Quality:
Manufactured Products (cont.)
Conformance
Durability
degree to which a product meets pre–established
standards, For Ex: product design and stds.)
how long product lasts before replacement, measure of
product life, it has both economic and technical
dimensions. (A light bulb will burn for certain hours)
Serviceability
ease of getting repairs, speed of repairs, courtesy and
competence of repair person, measured as Mean Time To
Repair( MMTR)
25. Dimensions of Quality:
Manufactured Products (cont.)
Aesthetics
Perceived Quality
how a product looks, feels, sounds, smells, or
tastes
subjective perceptions based on brand name,
advertising, and the like
Safety
assurance that customer will not suffer injury or
harm from a product; an especially important
consideration for automobiles
26. Dimensions of Quality
Reliability: involves consistency of
performance and dependability. Firm
performs the service right the first time.
Firm should honour its promises
Accuracy in billing
Keeping records correctly
Performing the service at the designated time
27. Contd…
Responsiveness: willingness or readiness of
employees to provide service
Timeliness of service
Mailing a transaction slip immediately
Calling the customer back quickly if necessary
Giving prompt service, e.g., setting up
appointments quickly
28. Contd…
Competence: possession of the required skills and
knowledge to perform the service
Knowledge and skills of control personnel
Knowledge and skills of operation support personnel
Access: ease of contact and approachability
The service is easily accessible by telephone (lines are not
busy and do not put you on hold)
Waiting time to receive service (bank) is not extensive
Convenient hours of operation
Convenient location of service facility
29. Contd…
Courtesy: politeness, respect, consideration,
and friendliness of contact personnel
Communication: Keeping customers informed
in the language they understand and listening
to them.
Explaining the service
Explaining how much the service will cost
Assuring the consumer that a problem will be
handled.
30. Contd….
Credibility: trustworthiness, believability and
honesty. Having customer’s best interests at
heart.
Company name
Company reputation
Personal characteristics and behaviour of the
contact personnel.
31. Contd….
Security: Freedom from danger, or doubt
Physical safety: (Will I get mugged at the
automatic teller machine)
Financial Security (Does the company know
where my stock certificate is, is my investment
safe?)
Confidentiality (Are my dealings with the
company private?)
32. Contd….
Empathetic to Customer: Efforts to understand the
needs of customer
Learning the customer’s specific requirements
Providing individualized attention
Recognizing the regular customer
Tangibility: Includes physical evidence of the
service such as
Physical facilities
Appearance of personnel
Tools or equipment used to provide the service
Other service facility
34. Why do we need to know COQ?
This tool speaks in the language of management $$$$
Research shows that cost of poor quality can range from 15 %
to 40 % of the business costs
It can prioritize quality improvement actions
Cost of quality data shows how profit is affected by quality
It helps identify the redundant activities
37. Cost of quality
Cost of quality = Cost of conformance + Cost of nonconformance
Cost of conformance is the cost of providing products or services as
per the required standards. This can be termed as good amount spent.
(Prevention & Appraisal costs)
Cost of non-conformance is the failure cost associated with a process
not being operated to the requirements. This can be termed as
unnecessary amount spent.( Internal & External failure costs)
38. Prevention Costs
Prevention costs are associated with design, implementation , maintenance,
and planning prior to actual operation, in order to avoid defects from
happening.
The emphasis is on the prevention of defects in order to reduce the
probability of producing defective products. Prevention activities lead to
reduction of appraisal costs and both type of failures ( internal and
external ).The motto is “Prevention rather than appraisal” .
39. Activities associated with
Prevention costs
Market research
Quality training programs.
Contract review
Design review
Field trials
Supplier evaluation
Process plan review
Process capability review
Design and manufacture of jigs and fixtures
Preventive checks & maintenance
40. Appraisal costs
Appraisal costs are spent to detect defects to
assure conformance to quality standards.
Appraisal cost activities sums up to the “cost of
checking if things are correct”.The appraisal
costs are focused on the discovery of defects
rather than prevention of defects
41. Activities associated with Appraisal costs
Proto type testing
Vendor surveillance
Incoming material inspection
Process inspection/control
Final inspection
Laboratory testing / measurement
Depreciation cost for measuring
Quality audits.
42. Internal failure costs
Internal failure costs occurs when results of work fail to reach designated
quality standards , and are detected before transfer to the customer takes
place.
43. Examples
Internal failure costs
Design changes/ corrective action
Scrap due to design changes
Excess inventory
Rectification / reject disposition of
purchased material
Rework/rejection in manufacturing
Downgrading of end product
Downtime of plant & machinery
Trouble-shooting & investigation of
defects
44. External failure costs
External failure costs occur when the product or service from a process
fails to reach designated quality standards , and is not detected until after
transfer to the customer.
45. Activities associated with
External failure costs
Processing / investigation of customer complaint
Repair/replacement of sold goods
Warranty claims
Product liability & litigation costs
Interest charges on delayed payment due to quality problems
Loss of customer goodwill & sales.
46. Size of four categories of quality costs.
The organizations which do not follow TQM,there is less emphasis on
prevention and their main quality efforts are on appraisal with very little
control on internal and external failure costs.
Various studies have shown that quality cost in manufacturing companies
the world over range from 20 % to 30 % of turnover and in the case of
service companies it can go up to 40 % as illustrated in graph on the next
slide.
47. Size of various quality cost elements
Quality costs in % of sales
10-15%
10-12%
The total quality
costs 25-35 %
of turnover.
4-6%
1%
Preventive
Appraisal
Internal
Failure
External
Failure
48. Impact of TQM on
costs.
TQM is primarily aimed to improve the quality of the product , higher
customer satisfaction and better working environment for the employees.
The most dramatic impact of TQM is on reduction of quality costs which
directly effect the profitability .
This is demonstrated by the results of TQM program in Xerox Corp . The
change in various elements of quality cost before and after launching
TQM by Xerox Corp is shown on the next slide.
49. Impact of TQM on costs.
An example from Xerox Corp.
35
% of sales
30
25
Internal
Failure
20
15
10
Internal
Failure
Appraisal
Appraisal
5
0
prevention
Before TQM
Prevention
After TQM
51. cost of quality
Traditionally recorded quality cost generally account for only 4 to
5 percent of sales which mainly comprise of cost of scrap, rework and warranty.
52. Hidden costs of quality
There are additional costs of quality which are hidden and do not appear
in the account books of the company, as they are intangible and difficult
to measure. These additional costs could be as high as 20-25% of sales.
53. Visible and hidden costs
Visible costs
•Scrap
•Rework
•Warranty costs
Hidden Costs
• Conversion efficiency of materials
• Inadequate resource utilization
• Excessive use of material
• Cost of redesign and re-inspection
• Cost of resolving customer problems
• Lost customers / Goodwill
• High inventory
54. TQM V/S Traditional Management
Total Quality Management
Traditional Approach
Market-share focus
Individuals
Focus on ‘who” and “why”
Short-term focus
Status quo focus
Product focus
Innovation
Fire fighting
Customer focus
Cross-functional teams
Focus on “what” and “how”
Long-term focus
Continuous improvement
Process improvement focus
Incremental improvements
Problem solving
Total Quality Management
55. Traditional Approach
Total Quality Management
Lack of communication
Open communications
Control of staff
Empowerment
Inspection & fire fighting
Prevention
Internal focus on rule
External focus on customer
Stability seeking
Continuous improvement
Adversarial relations
Co-operative relations
Allocating blame
Solving problems at their roots
56. SCOPE of TQM
TQM is the foundation for activities, which includes:
Commitment by senior management and all employees
Meeting customer requirements
Reducing development cycle times
Just In Time/ Flow Manufacturing
Improvement teams
Reducing product and service costs
Systems to facilitate improvement
Employee involvement and empowerment
Recognition and celebration
Challenging quantified goals and benchmarking
Focus on processes / improvement plans
This shows that TQM must be practiced in all activities, by all personnel, in
Manufacturing, Marketing, Engineering, R&D, Sales, Purchasing, HR, etc.
57. Benefits of Implementing TQM
Image of the organization has improved.
Reduction in inventory.
Shorter lead time in design, manufacturing,
procurement service etc.,
Reduction in rejections and complaints.
Customer satisfaction.
Quality cost % to turnover reduction.
Lower manufacturing cost.
Reduction in deviation.
Continuous improvement.
Drastic reduction in defectives and number
of defects.
59. FORD Motor Company
o
o
Is an American multinational automaker based
in Dearborn, Michigan, a suburb of Detroit. The
automaker was founded by Henry Ford and
incorporated on June 16, 1903.
Ford is the second largest automaker in the U.S.
and the fifth-largest in the world based on annual
vehicle sales in 2010. At the end of 2010, Ford
was the fifth largest automaker in Europe. Ford is
the eighth-ranked overall American-based
company in the 2010 Fortune 500 list, based on
global revenues in 2009 of $118.3 billion.
60. TQM techniques that Ford used:
Six Sigma
Quality Operating System or (QOS)
developed their own quality process or 5S.
The DMAIC process, or define, measure,
analyze, improve, and control has built an
overall strategy for consistency in their
teams,
61. Federal Express (FedEx)
FedEx created the overnight air express
business in 1973. Ten years later, it was the
first U.S. company to top $1 billion in
revenues in its first decade. The company is
the world’s largest express transportation
company: more than 110,000 employees
moved more than 2million items to over 200
countries each business day. In 1990, FedEx
became the first service company to win the
Baldrige Award.
62. Leading the Transition
Commit to quality
Know you Company’s Systems and Values
Participate in your Company’s Quality
Processes
Integrate Quality in the Company’s
Management model
63. XEROX
The Xerox Corporation started its thrive
towards TQM in the 1970’s with the
invention of PARC, Palo Alto Research
Center.
64. XEROX
Xerox has established a program called
Leadership Through Quality (LTQ) and a
Quality Training Task Force for its
company’s leadership teams. "Today, more
than 100,000 Xerox employees worldwide
have been trained in this process, which
stresses continuous improvement and
defines quality precisely as meeting
customer requirements" (Evans-Correia,
1997, 135).
66. Toyota Corporation
A multinational automaker headquartered
in Toyota, Aichi, Japan. In 2010, Toyota
Motor Corporation employed 317,734
people worldwide. TMC is the world's
largest automobile
manufacturer by
sales and production.
