tqm

2. KANDUKURI MALLIKARJUNAREDDY(MBA)

3. Total Quality Management (TQM)
Total = Quality involves everyone and all activities in the
company.
Quality = Conformance to Requirements
(Meeting Customer Requirements).
Management = Quality can and must be managed.
Total Quality Management is to obtain total quality by involving
everyone’s daily commitment

4. 4
TQM can be explained as follows:
 If quality is to satisfy customer’s requirements
continually…then
 Quality is “fitness for use” (Joseph Juran)
 Total Quality is to achieve quality at low cost…then
Kanji

5. 5
So, what is a Service?
A service can be defined as an essentially intangible set of benefits
provided by one party to another.
Examples of a service:
 Having a haircut
 Receiving waiter service at a café
 Getting support from a call centre etc.

6. IT
Services
Prof’
Services
“Take it or leave it”
Top-Down
Bottom-Up
Specialized
Parallel
Series
Standard
Service
Complex
Service
Simple
Diagnosis
Complex
Diagnosis
“How can we help you”“Menu”
Not a
meaningful choice
Cafeteria
Bank
Branch
Fast
Food
Outlet
ServiceSystemStructure
Nature of Service Offering
IncMg
Services
Repair

7. SERVICE SECTOR

9. CONTENTS
INTRODUCTION
GDP SHARE OF SERVICE SECTOR
EMPLOYMENT SHARE OF SERVICE SECTOR
EXPORT SHARE OF SERVICE SECTOR
TRADE
INDIAN TOURISM AND HOSPITALITY INDUSTRY
TRANSPORT SERVICE
REAL ESTATE SERVICE AND HOUSING
BUSINESS SERVICE

10. INTRODUCTION
 The tertiary sector of the economy (also known as the service sector) is
one of the three economic sectors,
 The others being the secondary sector (approximately the same
as manufacturing)
 And the primary sector (agriculture, fishing, and extraction such
as mining)

11.  The basic characteristic of this sector is the production
of services instead of end products
 For the last 100 years, there has been a substantial shift from
the primary and secondary sectors to the tertiary sector in
industrialised countries.
CHARACTERISTICS

12.  The National Accounts classification of the services sector
incorporates
SERVICE SECTORS SERVICE SECTORS
Transport storage
communication Financing
Insurance Real Estate
Business Service Community, Social and Personal
Service
Trade Hotels and Restaurants

13. WHAT IS GROSS DOMESTIC PRODUCT ?

14.  In world GDP of US$70.2 trillion in 2011, the share of services was 67.5 per cent, more or less the
same as in 2001. This list includes the major developed countries and Brazil, Russia, India and
China.
 Among the top 15 countries with highest overall GDP in 2011, India ranked 9th in overall GDP
and 10th in services GDP.
GDP share of Service Sector

16. Employment Share in Service Sector
 While the share of services in employment for many developed countries is very high and in
many cases higher than the share of services in incomes.
 Except China and India, all the other BRICS countries also have a similar pattern. In the Indian
and Chinese cases, there is a wide gap between the two, with gap being wider for India.
 China’s share of services in both income and employment is relatively low due to the
domination of the industrial sector, but the gap is also narrower than that of India.

17. 2011-12 [ percent] 2012-13** [ percent]
Hotels and Restaurant 18.0 25.1
Trade 16.6
[6.5]
Hotels 1.5
[2.8]
Transport , Storage and
Communication
7.1
[8.4]
Railways 0.7
[7.5]
Storage 0.1
[9.5]
Communication 0.9
[8.3]
Share and Growth of India’s Service Sector [ At factor Cost]

18. 2011-12 2012-13
Financial, Insurance,
Real Estate and Business
Service
16.6
[11.7]
17.2
[8.6]
Banking and Insurance 5.7
[13.2]
Real Estate and Business
Service
10.8
[10.3]
Community, Social and
Personal GDP
14.0
[6.0]
14.3
[6.8]
Public administration
and Defence
6.1
[5.4]
Other Services 7.9
[6.5]
Construction 8.2
[5.6]
8.2
[5.9]
Total Service 57.7
[8.2]
56.6
[5.2]
Total Service
Incl.Construction
63.9
[7.9]
64.8
[6.5]
Total GDP 100.0 100.0

19. India’s Share of Services Export in the World
 India’s share of services in the world exports of services, which increased
from 0.6 per cent in 1990 to 1.0 % in 2000 and further to 3.3 per cent in 2011,
has been increasing faster than the share of merchandise exports in world
exports.
 The overall openness of the economy reflected by total trade including
services as a percentage of GDP shows a higher degree of openness at 55.0 per
cent in 2011-12 compared to 38.1 per cent in 2004-5.

21. Trade
 Trade with a share of above 15 per cent In India’s GDP in the last seven years
(16.6 per cent in 2011-12).
 As per the A.T. Kearney, Global Retail Development Index 2012 report, India
ranked at 5th place remains a high-potential market with accelerated retail
market growth of 15 to 20 per cent expected over the next five years.
 The luxury retail sector saw 20 per cent growth last year, with luxury malls
becoming entrenched in Delhi, Mumbai, and Bangalore.

22. INDIAN TOURISM AND HOSPITALITY
INDUSTRY
 India has 28 world heritage sites and 25 bio-geographic zones. The country’s big coastline
provides a number of attractive beaches, diverse offerings such as adventure, rural and
wildlife tourism.
 India ranked 12th among 184 countries in terms of travel & tourism’s total contribution to
Gross Domestic Product (GDP) in 2012.
 The sector’s direct contribution to GDP totalled US$ 34.7 billion in 2012 and is expected to
grow to US$ 40.8 billion in 2013.

24. Transport Service Shipping
 Shipping plays an important role in merchandise trade.
 The fortunes of the former depend on the growth of the latter and the prospects of the latter
depend on the efficiency of the former.
 About 95 per cent of India’s trade by volume and 68 per cent in terms of value is transported
by sea.

26. REAL ESTATE SERVICE AND HOUSING
 Real estate and dwellings has a share of 5.9 per cent in India’s GDP and a growth of 7.2
percent in 2011-12.
 The growth of the real estate services in particular has been impressive consistently at over
25 per cent since 2005-6 with26.3 per cent growth in 2011-12.
 Housing is a basic necessity for human life and is the second largest generator of
employment, next only to agriculture.

27. BUSINESS SERVICE
 Business services include services like computer-related services, R&D,
accounting services and legal services, and renting of machinery in order of
importance (shares) as per India’s National Accounts.
 The share of business services in India’s GDP, has risen over the years, and
these are also the dynamic services with a combined growth rate f 13.5 per cent
in 2011-12. They grew at around 20 per cent during 2005-6, 2006-7 and 2008-9
but growth decelerated in the next two years due to the global economic
situation.

28. Hotel scenario
Expected Those taken for granted: Bed, light, clean, space for clothes
Wanted Those asked for: Non-smoking room, room service, a view
Excitement Those unlikely to be asked for but delighted to find: Free
flowers, chocolates
Business scenario
Expected Those taken for granted: Business knowledge, tech
specification, regulatory or statutory regulations
Wanted Those asked for: To be identified through consultation with the
customer, may allow for some element of negotiation
Excitement Those unlikely to be asked for but delighted to find:
Innovative and imaginative ideas
SERVICES IN DIFFERENT SCENARIO

29. Importance of TQM for services sector
Total Quality Management is the key mantra for the manufacturing
industry, but its benefits have been better realized by intense customer-
oriented service industries — be it fast moving consumer goods (FMCG),
retail, hospitality, telecom or banking.
In service organisations, the TQM challenge lies in establishing smooth
connectivity between business processes so as to retain the customer.
A quality control approach to cover all processes would be beneficial to
every Organisation.. Since in a service industry every aspect of quality is
associated with every employee, quality Control department has a key and
a very important role to play.
Putting in place an effective TQM mechanism in a service industry requires
patience and commitment on the part of the management and the
workforce to satisfy the customer.

30. Over 60 % of the organization's future revenue will come from the existing
customers.
A 2 percent increase in customer retention has an equivalent impact upon
profitability as a 10 percent reduction in operating costs.
Upto 96% of unhappy customers do not in fact complain, but they are
three times more likely to communicate a bad experience to other
customers than a good one
If a customer complains and the organization responds effectively to the
product or service failure, then the loyalty of the customer can actually
increase
It costs 5 times as much to attract a new customer as it costs to keep an old
one.

31. BIG GROWTH OF THE SERVICE SECTOR
According to the survey by the Economic Times in 1992, The service sector is a the threshold of
the high growth . Service and knowledge workers are estimated to constitute 80% of the workforce
with the manufacturing sector contributing to only the rest 20 percent.
According to a recent survey of the top ranking organization in Europe , 89 percent of the
respondents said that quality was the primary buying argument for the ultimate customer.
TQM is supported and adopted not only by the manufacturing industries but also by the banks,
hospitals, educational institutions, hotels and community development projects.

32. Quality is a Journey,
not a Destination