SEVEN (7) CONCEPTS OF TQM Continous Improvement Six Sigma Employee Empowerment Benchmarking Just-in-Time Taguchi Concept Knowledge of TQM tools

1. QUALITY MANAGEMENT
• is the management of input so that output will
meet two opposing standard and expectation.
A Customer-Focused Organization
1. understands the requirements of their
customers and
2. measures how well these requirements are
met.
3 MAJOR FUNCTION OF BUSINESS
ORGANIZATION
1. Marketing - generate demand
2. Operations/Production - creates product
3. Finance - tracks progress, pays bills, collects
money
THREE (3) TYPES OF ACTIVITY
1. Value adding (5%) - customers are willing to
pay for
✴ Customers define value.
2. Necessary but Non-Value Adding (35%) -
companies need but customers will not be
willing to pay for it.
ex. Financial Manager
3. Non-Value Adding (60%)
OPERATIONS STARTEGY
– An approach use to guide operations function
– Products, processes, methods, operating
resources, quality, costs, lead times,
scheduling
– Narrower in scope, operations aspect of the
organization
– High level of detail
– Short time horizon
– Low management level
– Low management because a good
operation strategy will manage itself.
QUALITY AND STRATEGY
• Managing quality supports
★ differentiation,
★ low cost, and
★ response strategies
• Quality helps firms increase sales and reduce
costs
• Building a quality organization is a demanding
task
PRODUCTIVITY
• ratio of outputs (goods and service) divided by
the input (resources such as labor and capital)
• Objective is to improve the measure of
efficiency
• Production is the measure of outputs ONLY and
not a measure of efficiency
DEFINE QUALITY
The totality of features and characteristics of a
product or service that bears on its ability to satisfy
stated or implied needs
QUALITY
• Freedom from deficiencies.
The absence of defects means higher yield, higher
delivery performance. – J.M. Juran
• Conformance to Specifications – Quality
Department.
• The totality of features of a product or service
that bears on its ability to satisfy stated and
implied needs of customer – ISO 9000

2.
QUALITY BASED ON DIFFERENT VIEWS
• User-based – better performance, more features
• Manufacturing-based – conformance to
standards, making it right the first time
• Product-based – specific and measurable
attributes of the product
MEASURING QUALITY
“We cannot control what we cannot quantify”
WHAT IS VALUE?
• Adding form fit, or function to the product or
service.
VALUE DEFINITION
• Customer Value: A task or activity for which the
customer would be willing to pay.
• Business Value: A task that is required to build
a window but for which the customer is not
willing to pay
• Non-Value Add (WASTE): A task that is not
required and should be eliminated because it is
wasteful
✴ Do not be mistaken to reduce value-adding
activities
TWO (2) WAYS TO IMPROVE PROFITABILITY
1. Sales gain via
a. Improved response
b. Flexible pricing
c. Improved reputation
2. Reduce cost via
a. Increase productivity
b. Lower rework and scarp cost
c. Lower warranty cost
IMPLICATIONS OF QUALITY
1. Company reputation
• Perception of new products
• Employment practices
• Supplier relations
2. Product liability
• Reduce risk
3. Global implications
• Improved ability to compete
KEY DIMENSIONS OF QUALITY
1. Performance
2. Features
3. Reliability
4. Conformance
5. Durability
6. Serviceability
7. Aesthetics
8. Perceived quality
9. Value
COST OF QUALITY
• Prevention costs - reducing the potential for
defects
• Appraisal costs - evaluating products, parts, and
services
• Internal failure - producing defective parts or
service before delivery
• External costs - defects discovered after
delivery
TOTAL QUALITY MANAGEMENT (TQM)
• Encompasses entire organization, from supplier
to customer
• Stresses a commitment by management to have
a continuing, companywide drive toward
excellence in all aspects of products and
services that are important to the
customer

3. SEVEN (7) CONCEPTS OF TQM
1. Continous Improvement
2. Six Sigma
3. Employee Empowerment
4. Benchmarking
5. Just-in-Time
6. Taguchi Concept
7. Knowledge of TQM tools
CONTINUOUS IMPROVEMENT
• Continual Improvement in all aspects
• Involves all operations and work center
including supplier and customer
SHEWHART’S PDCA MODEL
1. Plan - Identify what to improve and make a
plan
2. Do - test the plan
3. Check - is the plan working
4. Act - implement the plan
SIX SIGMA
Two (2) meanings:
1. Statistical definition of a process that is
99.9997% capable, 3.4 defects per
million opportunities (DPMO)
✴ Opportunity refers to possible aspects of quality
of one product
2. a methodology designed to reduce defects,
lower cost, improve customer
satisfaction
✴ You want all product as near as possible to the
tolerance area (x) since the graph has the
tendency to shift.
METHODOLOGY OF SIX SIGMA
1. Define critical output and identify gaps of
improvement.
2. Measure the work and collect process data
3. Analyze data
4. Improve the process
5. Control the new process to make sure new
performance is maintained
QUALITY CIRCLE
• Groups of people who meet regularly to solve
problems
• Trained in planning, problem solving, and
statistical methods
• Often led by a facilitator
• Very effective when done properly
EMPLOYEE EMPOWERMENT
• Getting employees involved in product and
process improvements
• 85% of quality problems are due to
process and material
• Techniques
• Build communication networks
that include employees
• Develop open, supportive
supervisors
• Move responsibility to employees
• Build a high-morale organization
• Create formal team structures
BENCHMARKING
Selecting best practices to use as a standard for
performance.
• compare to competitors
• only use if your company is big enough
★ Determine what to
benchmark
★ Form a benchmark team

4. ★ Identify benchmarking partners
★ Collect and analyze benchmarking
information
★ Take action to match or exceed
the benchmark
BEST PRACICES IN RESOLVING CUSTOMER
COMPLAINS
‣ Make it easy for clients to complain
‣ Respond quickly to complaints
‣ Resolve complaints on first contact
‣ Use computers to manage complaints
‣ Recruit the best for customer service jobs
JUST IN TIME (JIT)
• ’Pull’ system of production scheduling including
supply management
• Production only when signaled
• Allows reduced inventory levels
• Inventory costs money and hides
process and material problems
• Encourages improved process and product
quality
✴ Not about speed. It’s about Flow.
✴ Faster Speed = Proper Rhythm
JIT relationship to quality:
1. cuts the cost of quality
2. improves quality
‣ does not only apply to
perishable goods
‣ w/o JIT cost of inventory
increases.
HOW TO ACHIEVE JIT?
1. Value - adding function to product or service
2. Value Stream
3. Flow - to produce and move on item at a time
through a series of processing steps as
continuously as possible without stopping or
changing pace
4. Pull - doing thing only when it is required by
the next process.
- Strives to eliminate over prodiction and
is the essential concept of JIT
- Nothing is produce until a customer
wants it.
5. Perfection - “lean” is a continuous, evolutionary
process of change and adaptation
- not a singular, idealized vision or
technology-driven goal state.
- LEAN is CHANGE
TAGUCHI CONCEPT
Engineering and experimental design methods to
improve product and process design
‣ Identify key component and process
variables affecting product variation
Taguchi Concepts
‣ Quality robustness
‣ Quality loss function
‣ Target-oriented quality
QUALITY ROBUSTNESS
Ability to produce products uniformly in adverse
manufacturing and environmental conditions
• Remove the effects of adverse conditions
• Small variations in materials and process do
not destroy product quality
TOOLS OF TQM
Tools for Generating Ideas
• Check sheets - an organized method of
gathering data
• Scatter diagrams - graphs the relationship of
two variables
• Cause-and-effect diagrams - a tool that
identifies the process elements (cause) that

5. might affect outcome (effect).
Ex. fish bone diagrams
• Why-Why Diagram - just keep asking why until
you reach an answer. Ex. Tree Diagram
Tools to Organize the Data
• Pareto charts - A graph to identify and plot
problems or defects in descending order of
frequency.
- 80% of the contribution is the cause of
the problem
• Flowcharts - a chart that describe the steps of a
process
Tools for Identifying Problems
• Histogram - A distribution showing the frequency
of occurrences of a variable
• Statistical process control chart - A chart with
time on the horizontal axis to plot values of a
statistic
Check List
Scatter Diagram
Cause and Effect Diagram
Why - Why Diagram
Pareto Chart
Flow Chart
Histogram
Statistical Process Control Chart

6. STATISTICAL PROCESS CONTROL
• Assumed that variability is inherent in every
process
• natural process or common cause
• special or assignable cause
• Provides a signal to detect assignable causes
• Detects and eliminate assignable cause of
variation
Four (4) Key Steps
1. Measure the process
2. When a change is indicated, find the
assignable cause
3. Eliminate or incorporate the cause
4. Restart the revised process
INSPECTION
❖ Involves examining items to see if an item is
good or defective
• Detect a defective product
❖ Does not correct deficiencies in process or
product
• It is expensive
❖ Issues
• When to inspect
• Where in process to inspect
WHEN AND WHERE TO INSPECT
1. At the supplier’s plant while the supplier is
producing
2. At your facility upon receipt of goods from the
supplier
3. Before costly or irreversible processes
4. During the step-by-step production process
5. When production or service is complete
6. Before delivery to your customer
7. At the point of customer contact
INSPECTION
❖ Many problems
• Worker fatigue
• Measurement error
• Process variability
❖ Cannot inspect quality into a product
❖ Robust design, empowered employees,
and sound processes are better solutions
SOURCE OF INSPECTION
• Also known as source control
• The next step in the process is your customer
• Ensure perfect product
to your customer
Poka-yoke is the concept of foolproof devices or
techniques designed to pass only acceptable
product
ATTRIBUTES VS VARIABLES
• Attributes
‣ Items are either good or bad, acceptable
or unacceptable
‣ Does not address degree of failure
• Variables
‣ Measures dimensions such as weight,
speed, height, or strength
‣ Falls within an acceptable range
• Use different statistical techniques
TQM IN SEVICE
Service quality is more difficult to measure than the
quality of goods
Service quality perceptions depend on
‣ Intangible differences between products
‣ Intangible expectations customers have of
those products

7. SERVICE QUALITY
The operations manager must recognize:
1. the tangible components of service is important
2. the service process is important
3. service is judged according to customer
expectations
4. expectations will occur
DETERMINANTS OF SERVICE QUALITY
1. Reliability
2. Responsiveness
3. Competence
4. Access
5. Courtesy
6. Communication
7. Credibility
8. Security
9. Understanding/ knowing the customer
10. Tangibles
SERVICE RECOVERY STATEGY
Managers should have a plan for when services fail
Marriott’s LEARN routine
• Listen
• Empathize
• Apologize
• React
• Notify