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Total Quality Management (TQM)

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Total Quality Management (TQM)

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Total Quality Management (TQM)

  1. 1. SUBMITED BY: Hafsa Khan Rada Khan Uzma Chandio Department of Public Administration University of Sindh jamshoro
  2. 2. Contents: Quality Cost Of Quality The Evolution Of Total Quality Management The Philosophy Of Total Quality Management Quality Awards & Standards Total Quality Management Across The Organization
  3. 3. QUALITY: The standard of something as measured against other things of a similar kind; the degree of excellence of something. Quality can be quantified as: Q = P/E Where: Q = Quality P = Performance E = Expectations
  4. 4. Dimensions Of Quality Manufacturing Organizations Service Organizations DIMENSIONS OF QUALITY: The Dimensions of Quality is divided into two categories: Manufacturing Organizations Service Organizations
  5. 5. DIMENSIONS OF MANUFACTURING ORGANIZATIONS: The Dimensions of Manufacturing Organizations is divided into 8 dimensions which are as follows: 1) Performance 2) Reliability 3) Durability 4) Serviceability 5) Aesthetics 6) Features 7) Perceived Quality 8) Conformance to Standards
  6. 6. PERFORMANCE Performance refers to a product's primary operating characteristics. This dimension of quality involves measurable attributes; brands can usually be ranked objectively on individual aspects of performance. The performance of a product often influences the profitability or reputation of the end user.
  7. 7. RELIABILITY Reliability is the likelihood that a product will not fail within a specific time period. This is a key element for users who need the product to work with out fail. This dimensions reflects the profitability of a product malfunctioning or failing within a specific time period.
  8. 8. Durability measures the length of a product life. When the product can be repaired, estimating durability is more complicated.
  9. 9. The speed with which the product can be put into service when it breaks down as well as the competence & behavior of the service person.
  10. 10. AESTHETICS Aesthetics referring to how the products looks. For instance, the painted finish on a piece of furniture.
  11. 11. FEATURES Features are additional characteristics that enhance the appeal of the product or service to the user. Similar thinking can be applied to features, it is a dimension of quality that is often a secondary aspects of performance.
  12. 12. PRECIEVED QUALITY Perceived Quality is the quality attributed to a good or service based on indirect measures. An equally important dimension of quality is the perception of the quality of the product in the mind of the consumer.
  13. 13. The dimension of Conformance depicts to what extent a product design & operating characteristics meet established standards.
  14. 14. DIMENSIONS OF SERVICE ORGANIZATIONS There are 5 Dimensions of Service Organization or Quality which are as follows: 1)Reliability 2)Responsiveness 3)Assurance 4)Empathy 5)Tangibles
  15. 15. RELIABILTY It is the ability to perform the promised service dependably and accurately. Reliability means that the company delivers on its promises-promises about delivery, service provision, problem resolutions and pricing. Customers want to do business with companies that keep their promises, particularly their promises about the service outcomes and core service attributes. All companies need to be aware of customer expectation of reliability. Firms that do not provide the core service that customers think they are buying fail their customers in the most direct way.
  16. 16. RESPONSIVENESS IT IS THE WILLINGNESS TO HELP CUSTOMERS AND PROVIDE PROMPT SERVICE. THIS DIMENSION EMPHASIZES ATTENTIVENESS AND PROMPTNESS IN DEALING WITH CUSTOMER'S REQUESTS, QUESTIONS, COMPLAINTS AND PROBLEMS. RESPONSIVENESS IS COMMUNICATED TO CUSTOMERS BY LENGTH OF TIME THEY HAVE TO WAIT FOR ASSISTANCE, ANSWERS TO QUESTIONS OR ATTENTION TO PROBLEMS. RESPONSIVENESS ALSO CAPTURES THE NOTION OF FLEXIBILITY AND ABILITY TO CUSTOMIZE THE SERVICE TO CUSTOMER NEEDS.
  17. 17. ASSURANCE It means to inspire trust and confidence. Assurance is defined as employees' knowledge of courtesy and the ability of the firm and its employees to inspire trust and confidence. This dimension is likely to be particularly important for the services that the customers perceives as involving high rising and/or about which they feel uncertain about the ability to evaluate.
  18. 18. EMPATHY It means to provide caring individualized attention the firm provide its customers. In some countries, it is essential to provide individual attention to show to the customer that the company does best to satisfy his needs. Empathy is an additional plus that the trust and confidence of the customers and at the same time increase the loyalty.
  19. 19. TANGIBLES SINCE SERVICES ARE TANGIBLE, CUSTOMERS DERIVE THEIR PERCEPTION OF SERVICE QUALITY BY COMPARING THE TANGIBLE ASSOCIATED WITH THESE SERVICES PROVIDED. IT IS THE APPEARANCE OF THE PHYSICAL FACILITIES, EQUIPMENT, PERSONNEL AND COMMUNICATION MATERIALS. IN THIS SURVEY, ON THE QUESTIONNAIRE DESIGNED, THE CUSTOMERS RESPOND TO THE QUESTIONS ABOUT THE PHYSICAL LAYOUT AND THE FACILITIES THAT THE FIRM OFFERS TO ITS CUSTOMERS.
  20. 20. Cost of quality Cost of quality = Cost of conformance + Cost of non- conformance • 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)
  21. 21. DEFINITION OF COQ
  22. 22. COST OF QUALITY CONFORMANCE NON- CONFORMANCE PREVENTION COST APPRAISAL COST INTERNAL FAILURE EXTERNAL FAILURE
  23. 23. “Prevention cost support activities whose purpose is to reduce a number of defects” The costs incurred to avoid or minimize the number of defects at first place are known as prevention costs. The most effective way to manage quality costs is to avoid having defects in the first place. Much less costly to prevent a problem from ever happening than it is to find and correct the problem after it has occurred.
  24. 24. Market survey Quality Audit Process control Process planning Training and education Design review
  25. 25. “Appraisal costs support activities categories whose purpose is to determine the of quality degree of conformance to the quality requirements.” Appraisal costs (also known as inspection costs) are those cost that are incurred to identify defective products before they are shipped to customers. All costs associated with the activities that are performed during manufacturing processes to ensure required quality standards are also included in this category. Identification of defective products involve the maintaining a team of inspectors. It may be very costly for some organizations.
  26. 26. Internal audit Document review Balancing Equipment calibration Laboratory testing Vendor surveillance
  27. 27. INTERNAL FAILURE COST “ The costs of deficiencies discovered before delivery which are associated with the failure (nonconformities) to meet explicit requirements or implicit needs of external or internal customers.”
  28. 28. EXAMPLES OF INTERNAL FAILURE COST
  29. 29. “ The costs associated with the deficiencies that is found after product is received by the customer.” These are the costs incurred by a business due to failure of product or service at the customer end. These costs results into warranty claims and loss of reputation. It is also includes the lost opportunities for sales revenue. If defective products have been shipped to customers, external failure costs arise.
  30. 30. THE EVOLUTION OF TOTAL QUALITY MANAGEMENT Total Quality Management (TQM) comprehensive and structured approach to organizational management that seeks to improve the quality of products and services through ongoing refinements in response to continuous feedback.
  31. 31. QUALITY GURUS & THEIR CONTRIBUTION The quality GURUS have made a significant impact on the world through their contributions to improving not only business but all organizations including state & national government military organizations educational institutions health care organizations & many other establishments & organizations. There are main seven GURUS of Total Quality Management (TQM) which are as follows:  Walter A. Shewhart  W. Edwards Deming  Dr. Joseph M. Juran  Armand V. Feiganbaum  Kaoru Ishikawa  Philip B. Crosby  Dr. Genichi Taguchi
  32. 32. WALTER A.SHEWART PHD. Spent his professional career at western electric & Bell Telephone laboratories. In 1931, he authored Economic control of quality of manufactured product which is regarded as a complete & thorough work of basic principles of quality control. WALTER A. SHEWHART W. EDWARDS DEMINGS Edwards Deming, PHD, was a protégé of shewhart, in 1950, he taught statistical process control & the importance of quality to the leading CEOs of Japanese industry, he is credited with providing foundation for the Japanese quality miracle & resurgence as an economic power. Deming is the best-known quality expert in the world. There are four ideas of Deming which are as follows:  Better design for products to improve services.  Higher level of uniform product quality.  Improvement of products testing in the workplace & in research centers.  Greater sales through side (global) marketers.
  33. 33. JOSEPH M. JURAN Worked at western electric from 1924 to 1941.Juran traveled to japan in 1954 to teach quality management. The Juan trilogy for managing quality is carried out by three interrelated processes. PLANNING CONTROL IMPROVEMENT ARMAND V. FEIGANBAUM PHD argues that total quality control is necessary to achieve productivity, market penetration & competitive advantage. Quality begins by identifying the customer requirements &ends with a product or service in the hands of a satisfied customer.
  34. 34. KAORU ISHIKAWA Kaoru Ishikawa, studied under Deming, Juran & Feigenbaum. He borrowed the total quality control & adopted it for Japanese. He is best known for the development of Cause & Effect diagram which is sometime called an “Ishikawa Diagram” or “Fish Bone Diagram”. He was known for popularizing the seven basic tools of quality & philosophy of tool quality.
  35. 35. PHILIP B. CROSBY Philip B. Crosby was the quality guru that developed the idea of “Quality is Free” which asserts that implementing quality improvement pays for itself through the savings from the improvements, increased revenue from greater customer satisfaction & the improved competitive advantage that results. He popularized “Zero Defects” to define the goal of a quality program as the elimination of all defects & not the education of defects to an acceptable quality level. GENICHI TAGUCHI Dr. Genichi Taguchi developed his loss function concept that combines cost target & variation into one metric because the loss function is reactive. He developed the signal to noise ratio as a proactive equivalent. He developed the “Taguchi Methodology” of robust design which focused on making the design less sensitive to variation in the manufacturing process, instead of trying to control manufacturing variation. This idea of “Designing in Quality” has become an important tenant of six sigma today.
  36. 36. TQM PHILOSOPHY Customer focus Continuous Improvement Product Design Employee Empowerment The Philosophy of TQM is based on the following 4 components which are as follows: Customer Focus Continuous Improvement Employee Empowerment Product Design
  37. 37. Customer focus is an essential part of any successful business. And that focus has to be integral to the culture of the business, not bolted on. Customer service is a series of activities designed to deliver customer satisfaction. The process of providing customer satisfaction is based on an understanding of what customers want and need.
  38. 38. Continuous improvement is an ongoing effort to improve products, services or processes. These efforts can seek “incremental” improvement over time or “breakthrough” improvement all at once.
  39. 39. PDSA CYCLE The basic Plan- Do-Study-Act (PDSA) Cycle was developed by Shewart & then modified by Deming. This is a 4 step process which is stated as: STEP # 1: Plan carefully what is to be done. STEP # 2: Carry out the Plan (DO IT). STEP # 3: Study the results. STEP # 4: Act on the results by identifying what worked as planned & what didn’t.
  40. 40. Employee empowerment is giving employees a certain degree of autonomy and responsibility for decision-making regarding their specific organizational tasks. Employee empowerment should lead to increased organizational responsiveness to issues and problems.
  41. 41. Products are need to be designed to meet customer expectations. This means a company should structure all of its systems to create products and services that satisfy its customer base.
  42. 42. QUALITY AWARDS AND STANDARD
  43. 43. The Malcolm Baldrige National Quality Award (MBNQA) The Malcolm Baldrige National Quality Award was established in 1987 when Congress passed the Malcolm Baldrige National Quality Improvement Act. The award is named after the former Secretary of Commerce Malcolm Baldrige, and is intended to reward and stimulate quality initiatives. It is designed to recognize companies that establish and demonstrate high-quality standards and is given to no more than two companies in each of three categories: manufacturing, service, and small business.
  44. 44. Malcolm Baldrige Quality Award Malcolm Balridge quality award symbolizes the highest standards of total quality management. The award is evaluated on the basis of seven sections in attaining global quality standards . These sections are:-• 1.Leadership 2.Information and analysis 3.Strategic quality planning 4.Human Resource development and management 5.Management of process quality 6.Quality & operational result 7.Customer focus and satisfaction
  45. 45. The Deming Prize is a global quality award that recognizes both individuals for their contributions to the field of Total Quality Management (TQM) and businesses that have successfully implemented TQM. It is the oldest and most widely recognized quality award in the world. It was established in 1951 to honor W. Edwards Deming who contributed greatly to Japan’s proliferation of statistical quality control after World War II. His teachings helped Japan build its foundation by which the level of Japan’s product quality has been recognized as the highest in the world.
  46. 46. DEMING MEDAL
  47. 47. ISO, founded in 1947, is a worldwide federation of national standards bodies from some 100 countries, with one standards body representing each member country. The American National Standards Institute (ANSI), for example, represents the United States. Member organizations collaborate in the development and promotion of international standards. Among the standards the ISO fosters is Open Systems Interconnection (OSI), a universal reference model for communication protocols. According to ISO, "ISO" is not an abbreviation. It is a word, derived from the Greek isos, meaning "equal“ The name ISO is used around the world to denote the organization, thus avoiding the assortment of abbreviations that would result from the translation of "International Organization for Standardization" into the different national languages of members. Whatever the country, the short form of the organization's name is always ISO.
  48. 48. The ISO 9000 family of standards is related to quality management systems and designed to help organizations ensure that they meet the needs of customers and other stakeholders while meeting statutory and regulatory requirements International standards promote international trade by providing one consistent set of requirements recognized around the world. ISO 9000 can help a company satisfy its customers, meet regulatory requirements and achieve continual improvement. It provides the base level of a quality system, not a complete guarantee of quality. Originally published in 1987 by the International Organization for Standardization (ISO), a specialized international agency for standardization composed of the national standards bodies of 90 countries.
  49. 49. ISO 9000 ISO 9001 ISO 9002 Explains fundamental quality concepts and provides guidelines for the selection and application of each standard Model for quality assurance in design, development, production, installation and servicing Model for quality assurance in the production and installation of manufacturing systems
  50. 50. ISO 9003 ISO 9004 Quality assurance in final inspection and testing Guidelines for the applications of standards in quality management and quality systems. ISO 9000 and ISO 9004 are guidance standards. They describe what is necessary to accomplish the requirements outlined in standards 9001, 9002 or 9003.
  51. 51. ISO 14000 is a series of environmental management standards developed and published by the International Organization for Standardization ( ISO ) for organizations. The ISO 14000 standards provide a guideline or framework for organizations that need to systematize and improve their environmental management efforts. The ISO 14000 standards are not designed to aid the enforcement of environmental laws and do not regulate the environmental activities of organizations. Adherence to these standards is voluntary.
  52. 52. ISO 14001 ISO 14020 ISO 14010 Is an EMS (environmental management system) standard. Is about environmental labeling. Series of standards are about Auditing.
  53. 53. ISO 14030 ISO 14040 Is standard on environmental performance evaluation. Series are on environmental life cycle assessment (LCA).
  54. 54. TOTAL QUALITY MANAGEMENT ACROSS THE ORGANIZATION TQM consists of organization-wide efforts to install &make permanent a climate in which an organization continuously improves its ability to deliver high products & services to customer. TOTAL QUALITY MANAGEMENT IN MARKETING Porter’s 1985 description of the value chain of activities (processes or collection of processes) that an organization performs in order to deliver a valuable product or service for the market
  55. 55. TQM IN FINANCE & ACCOUNTING TQM is the solution for finance & accounting is to apply holistic thinking to finance applications. The primary measures for a TQM view of finance & accounting are throughput operating expenses & investment. Throughput is calculated from sales minus “totally variable cost” where totally variable cost is usually calculated as the cost of raw materials TQM IN HRM HRM is a function of organization design to maximize employee performance in service of employee strategic objective. HR is primary concerned with the management of people with in organizations focusing on policies on systems. HRM covers these areas which are as follows:  Job design & analysis  workforce planning  recruitment & selection  Training & development  performance management  Compensation (remuneration) & legal issues. TQM is the help of these areas to developed high quality
  56. 56. TQM IN INFORMATION TECHNOLOGY Advance the business Information Technology over the years, have changed business processes within & between business enterprises. In the 1960s operating system holds limited functionality & any workflow. The 1970s-1980s saw the development of data driven approaches, as data storage & retrieval technologies improved. Data modeling rather than process modeling was the starting point for system
  57. 57. CONCLUSION Total Quality Management (TQM) is the art of managing the whole to achieve the excellence. TQM integrates fundamental management techniques, existing improvements efforts & technical tools under a disciplined approach
  58. 58. REFERENCES  Operation Management by R. Dan Reid & Nada R. Sanders 3rd Edition © Wiley 2007  Total quality Management by Dale H. Besterfield, Carol Besterfield-Michna, Glen H. Besterfield & Mary Besterfield-Sacre  www.google.com  www.wkipedia.com  www.bizmanualz.com  www.ukessays.com  www.workchron.com

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