tqm.ppt

TQM Briefing by Enrico C. Mina 1
TOTAL QUALITY
MANAGEMENT
Presented by:
Enrico C. Mina

The World Is Changing
• Liberalization of trade and globalization of
business
• Tougher competition
• More demanding customers
• Faster rate of technological change
• More turbulent environment

MATSUSHITA
• Change of thought makes your behavior
change.
• Change of behavior makes your habits change.
• Change of habits makes your personality
change.
• Change of personality makes your destiny
change.

PARADIGM CHANGES (1)
• THE PRINCIPAL PURPOSE OF A
BUSINESS ENTERPRISE
OLD: To make a profit.
NEW: To satisfy customers and win their
loyalty and continued patronage, which
leads to sales, market share, growth, and
profits.

• DEFINITION OF QUALITY
OLD: The totality of the characteristics or
features of a product or service;
conformance to internal specifications
NEW: Conformance to customer
requirements; fitness for customers’ use.

Customer Superordinate Goals
GOALS EXPECTATION LEVELS
Explicit Implicit Customer
Delight
Quality
Cost
Delivery

Customer’s Bill of Rights
A customer has the right to courteous
treatment by the seller’s representatives at all
times and under all conditions.
A customer has the right to the
representative’s full time and attention during
each and every transaction.
A customer has the right to fast and accurate
information about the product or service or the
status of the order.

A customer has a right to have his/her
expectations met with a product or service of
the quality represented before the purchase.
A customer has the right to complain when
the product or service does not meet those
expectations--and to a prompt remedy when
the product or service is indeed at fault.

A customer has the right to expect
knowledgeability, resourcefulness,
problem-solving ability, concern--and
results--from those assigned to his/her
account.
A customer has the right to expect
responsiveness and follow-through in
emergencies and special situations.

A customer has the right to the benefits of
teamwork in the company he/she deals
with--without buckpassing, fingerpointing,
or runarounds.
A customer has the right to care, accuracy,
and attention to detail in filling his/her
orders for services and/or products.

A customer has the right to appreciation on
the part of those with whom he/she does
business -- appreciation both for the
business already given and for the business
to be given in the future so long as this
Customer’s Bill of Rights continues to be
observed.
(From The Customer Communicator, published by Marketing
Publications, Inc., Washington, D.C.)

• DEFINITION OF CUSTOMER
OLD: The ultimate buyer or user of the
product or service.
NEW: The next person, process, or system;
anyone on whom the product or service has
an impact.

Chain of Customer-Supplier
Relationships
External
Suppliers
1 2 3 4 5
End-users or
consumers
Intermediaries or
distributors
The Company

• HOW QUALITY IS TO BE ACHIEVED
OLD: Produce large quantities, then have
quality control inspectors separate the
defectives from the good units; rework the
defectives if possible.
NEW: Emphasize prevention of defects by
improving the product/service and the
process that produces and delivers it.

Process
• DEFINITION: a series of activities that
transform inputs into desirable outputs
• ELEMENTS:
– Man (people)
– Machines
– Materials
– Methods
– Measurement
– Environment

• RELATIONSHIP BETWEEN QUALITY
AND PRODUCTIVITY
OLD: Quality and productivity are mutually
exclusive. High quality and low costs
cannot go together.
NEW: Quality is the road to productivity. A
high-quality process leads to reduced waste,
lower costs, and bigger volumes.

Cost of Quality (1)
• Cost of Quality is defined as the cost of
keeping customers satisfied. It includes all
costs incurred to ensure that customer
requirements are ultimately met.
• Components:
– Cost of prevention - costs incurred to prevent
failures in each process element

Cost of Quality (2)
– Cost of appraisal - costs of inspection, testing,
measurement, and information-gathering to
determine the state of the process
– Cost of non-conformance - the costs of failure
or poor quality. Two types:
• Internal failure costs - incurred when failures are
detected in-house, before sending output to the
customer
• External failure costs - incurred when failures are
detected by the external customer.

Cost of Quality (3)
• Quality experts estimate that costs of non-
conformance are equal to 25% - 35% of
gross sales or revenue.
• Not all CONCs are visible because
conventional accounting systems do not
distinguish between productive vs. non-
productive uses of resources.

The Cost of Non-conformance
Iceberg
hidden costs
visible costs

Cost of Quality (4)
What should happen:
External failure cost
Internal failure cost
Prevention cost
Appraisal cost
C
o
s
t
s
T i m e
Savings
Total costs
with improved
process quality

• MEASUREMENT OF QUALITY
OLD: Acceptable quality levels (AQL) are
good enough.
NEW: Maximum defect incidence must be
measured in terms of parts per million
(ppm).

99.9% Reliability
• If the human heart were 99.9% reliable, it
would miss 36,817 beats a year (@ 70 /
minute), equivalent to 8.8 hours without a
heartbeat.

6-sigma Reliability
• 99.99966% reliability or 3.4 failures per
million
• Equivalent to missing only one free throw
out of 300,000 attempts.

Overall Process/System
Reliability
R 20 10 5
0.95
0.98
0.99
0.999
0.36
0.67
0.82
0.98
0.60
0.82
0.90
0.99
0.77
0.90
0.95
0.995
Number of steps or elements

• THE CAUSES OF QUALITY PROBLEMS
OLD: It is the fault of the workers. They are
not careful enough.
NEW: The deficiency lies in the system or
process, over which management has
control and is therefore responsible.

Common and Special Causes (1)
• According to W. Edwards Deming, the
causes of quality problems fall under two
categories:
– Common causes, those which are related to the
system of operation, and
– Special causes, those that are identifiable with
specific events and people.

Common and Special Causes (2)
• Proportion of the incidence of problems due
to these two categories are:
• Common causes 94%
Special causes __6%
100%

Process Muda (1)
• Muda is the Japanese word for waste.
• The presence of muda in a process, through one or
more of its elements, deteriorates quality,
increases costs, and delays delivery by
lengthening the cycle time.
• Muda is non-value-adding and therefore
unproductive.

Process Muda (2)
• Overproduction - Each work station or process
stage tries to operate at full capacity, leading to a
build-up of WIP or FGI. These hide problems by
making them tolerable, although at high cost, and
prevent them from being addressed. This is the
“mother of all muda.”

Process Muda (3)
• Inventory - Excessive supplies and parts are costly
to carry: cost of tied-up capital, storage, security
and pilferage, supervision, insurance,
obsolescence and deterioration.
• Waiting - Waste of time when people and work
stations are capable of work but are idle.

Process Muda (4)
• Transportation - Additional cost and time created
by transferring the location of people, materials, or
products without any value being added.
• Motion - Created by people being made to exert
physical efforts that merely add to fatigue and
time but do not create value.

Process Muda (5)
• Overprocessing - Created when the process
is performing work that is unnecessary from
the customer’s point of view.
• Producing failures - Process failures like
defects and errors result in customer
dissatisfaction, higher costs, and delays.

Process Muda (6)
• In most organizations, mudas are
considered normal and have been tolerated
over a long period of time. Many are even
in budgets.
• Every muda removed and prevented from
recurring improves process quality and
reduces cost and cycle time, thereby
automatically increasing productivity.

Effect of Mudas
• Mudas are non-value-adding.
• They lengthen process cycle times.
• They increase costs.
• They cause quality to deteriorate.
• The value-adding moment is very short.
Eliminating mudas will cause QCD to
improve, often with very little investment.

Process Flowcharting (1)
• The first step in identifying muda is to draw a
flowchart of the process.
• A flowchart is a graphical representation of a
process. It is essential to process analysis and
improvement.

Process Flowcharting (2)
• The flowchart, to be useful, must be the “as is”
flow (based on the actual sequence of activities),
not necessarily the theoretical one in the manuals.
• The best sources of information are the people
who are actually working on the process.

Basic Symbols (1)
Beginning and end
Operation
Sub-process
Wait/delay

Basic Symbols (2)
Transportation
Storage
Connector A

Basic Symbols (3)
Direction of
process flow
Document
Decision
Y
N
?

START
Customer Dept. X Dept. Y Dept. Z
A
A
B
N
Y
B
C
C
D
N
Y
D
N
Y
E
E
F
N
Y
END
F
Total Cycle
Time:
Min.: ___hrs
Max.: ___hrs
Ave.: ___hrs
Total Distance
Traveled:
Min.: ___m
Max.: ___m
Ave.: ___m

Identifying Muda (1)
• Ask the following questions:
– What are we doing? Can we avoid doing it at
all?
– Who is doing it? Can it be done better by
someone else (e.g., a subcontractor)?
– Where are we doing it? Can it be done better
somewhere else?

– When and how often are we doing it? Can it be
done better at other times or with another
frequency?
– How are we doing it? Can it be done better
through another way?
• If it is done manually, can we automate it?
• Can it be done simultaneously or in parallel?
• Can we apply Information Technology and tele-
communications effectively?

• If there is no clear value-added, then that
particular activity is muda and should be
eliminated.
• Draw a new, “should be” flowchart incorporating
all the muda-eliminating features.
• Create, document, and continuously improve
standards for each process element. Use the
standards for training staff.

Muda Elimination
• The process should be revised to eliminate
identified muda. Every such muda eliminated and
prevented from recurring reduces costs and cycle
time and improves process quality.
• The opportunities for improvement through the
continuous elimination of muda are infinite.

• THE ROLE OF PEOPLE
OLD: People should work in strict confor-
mance with the instructions given by their
superiors.
NEW: The people in the workplace have
detailed knowledge, experience, and ideas
for improvement. They should be encour-
aged to actively participate in improvement.

• TIME FRAME
OLD: Achieve the bottomline targets set for
this month or quarter.
NEW: Allocate resources to ensure
continuing ability to offer superior value to
customers relative to competitors.

• THE ROLE OF QUALITY
OLD: Quality is an internal problem to be
solved.
NEW: Quality is our strongest strategic
weapon against the competition.

Profit Impact of Market Share
• ACHIEVING COMPETITIVE SUCCESS
THROUGH QUALITY
– Achieve superior relative perceived quality in
both products and services.
– Achieve a high degree of conformance or
process quality.
(From The PIMS Principle by Robert Buzzell and
Bradley Gale)

• PHILOSOPHY OF IMPROVEMENT
OLD: “If it ain’t broken, don’t fix it.”
NEW: “If it is not perfect, make it better.”

Continuous Improvement
(Kaizen)
• KAIZEN is a system of small-step
improvements taking place continuously at
all levels and functions of the organization.
• It promotes improvements through projects
that do not cost much money.

Kaizen, Maintenance, &
Innovation
Top
Mgt.
Middle
Mgt.
Super-
visors
R & F
Innovation
Maintenance

The Gemba (Workplace)
• Kaizen places heavy emphasis on seeking
improvements in the gemba, the work-place
where processes are in operation and where
value is created for customers.
• The opportunities for improvement in the
gemba are infinite.

Five Gemba Principles (1)
• When an abnormality takes place, go to the
gemba first to get first-hand information.
• Check with the gembutsu (the “real things”
inside the gemba: employees, materials,
equipment, records, actual rejects, working
conditions, etc.).
• Take temporary countermeasures on the
spot to relieve the situation.

Five Gemba Principles (2)
• Trace the root causes of the abnormality and
take permanent countermeasures that will
prevent recurrence.
• Standardize all improvements made.

Superordinate Principles
Kaizen has to be absorbed into the
organization’s culture.
• Process and Results
• Total Systems Focus
• Non-blaming/Non-judgmental Behavior

Process and Results
• Process creates results. If results are not
satisfactory, the only permanent way to
improve them is to improve the process
first.
• Results are needed to verify if process
improvements are working.
• Therefore, there must be a balanced
emphasis on both process and results.

Total Systems Focus
• A system is an integrated whole made up of
distinct but interdependent and interacting
parts.
• The only real improvement is that which
enables the entire organization to serve
customer requirements better.
• Systemic problems can only be solved
through cross-functional teamwork.

Non-blaming/Non-judgmental
Behavior
• A blaming culture causes people to hide
problems.
• Problems are really opportunities for
improvement in disguise.
• Focus on the problem and make people
problem-solvers.
• “The first time you get angry is the last time
you get the truth.” (Ishikawa)

Seven Basic Concepts (1)
• SDCA to PDCA
• The next process is the customer.
• Quality first
• Market in
• Upstream management
• Speak with data
• Variability control and recurrence
prevention

SDCA to PDCA
• Standardization and Improvement
S
D
C
A P
D
C
A

The Next Process Is the
Customer.
• The Customer-Supplier Chain
• Three Rules:
Your
Supplier
Your
Process
Your
Customer
inputs outputs
Do not
accept
defects.
Do not
make
defects.
Do not
pass on
defects.

Quality First
• The quality of the process must receive first
priority, ahead of Cost or Delivery.
• A high quality process produces high
quality products at least cost and with the
shortest cycle time (enabling on-time
delivery).

Market-in
• A philosophy that seeks to find out factually
what customers want, and then designs the
product or service, and the processes that
create and deliver them, to suit customer
requirements.
• Product-out: We know better than the
customers; we tell them what to do. We do
what is convenient for us, not for them.

Upstream Management
• Manufacturing
Product
Concept
Process
Eng’g.
Design &
Develpmt.
Prototype
Full-scale
Production
Distribution Sales
After-sales
Service

Upstream Management
• Service
Service
Concept
Service
Strategy
Service
Systems
Service
Staff
Trial
Run
Full-scale
Operation
s
Follow-up
Service

Speak with Data
• Data mean facts.
• Identify problems with data, analyze causes
with data, evaluate solution alternatives
with data, verify success with data.
• Gut-feel and past experience are useful but
not enough. They must be validated with
data.

Variability Control and
Recurrence Prevention
• Problems are caused by failures occurring
in man, machines, materials, methods,
measurements, or environment.
• It is necessary to identify the root causes of
a problem and to adopt countermeasures
that eliminate them, to prevent recurrence.
• Ask “Why?” 5 times to trace root causes.

69
Exercise in Self-Diagnosis
Inconsistent
Practices
Consequent
Problems
Future
Implications
Ideas for
Improvement
1.
2.
3.
Principle or Concept: ____________

10 Basic Rules for Practicing
Kaizen (1)
• Discard conventional fixed idea for
operations.
• Think of how to do it, and not why it cannot
be done.
• Do not make excuses. Start by questioning
current practices.

Kaizen (2)
• Do not seek perfection. Do it right away
even if for only 50% of target.
• Correct mistakes at once.
• Do not spend money for KAIZEN.
• Wisdom is brought out when faced with
hardship.

Kaizen (3)
• Ask “Why?” five times and seek root
causes.
• Seek the wisdom of ten people rather than
the knowledge of one.
• KAIZEN ideas are infinite.

Hoshin Kanri (Policy
Deployment or Management by
Policy)
CEO
Sr/Mid
Mgrs
Suprvsrs
R&F
Results
Means
Results
Means
Results
Means
Results
Means

Service Quality (1)
• Service means the provision of intangible
products, or work done for someone else.
• It is also the work performed to help
internal customers achieve their objectives.
• Where products are similar or equivalent,
service is the competitive edge.

Service Quality (2)
• Characteristics of service operations:
– The product, or the greater part of the “product
package”, is intangible.
– Measurement is more difficult.
– Production and consumption are simultaneous;
there is little chance of pre-delivery inspection.
– There are frequent person-to-person contacts
(“moments of truth”) between customers and
front-line personnel.

The Service Triangle
Service
Strategy
Service
System
Service
Staff
CUSTOMER

Service Gaps (1)
• Gap 1 - The inability to discern correctly
what customers really need and expect
• Gap 2 - The inability to translate
knowledge of the customers’ needs and
wants into service process standards
• Gap 3 - The inability of operating forces to
comply consistently with service process
standards

Service Gaps (2)
• Gap 4 - The inability to communicate
effectively with customers what the supplier
is doing to meet expectations; also, the
raising of these expectations through a
propensity to overpromise.
• Gap 5 - The inability to effectively and
efficiently satisfy customer needs and
wants, as judged by the customer.

Service Quality Dimensions (1)
• RELIABILITY - Consistent ability to
satisfy the customer’s needs and wants
• RESPONSIVENESS - Fast action on
customer orders, requests, inquiries, or
complaints
• ASSURANCE - The ability to demonstrate
competence and to give the customer peace
of mind before the transaction takes place

Service Quality Dimensions (2)
• EMPATHY - The ability to place oneself
in the customer’s shoes and treat him/her as
one wishes to be treated
• TANGIBLES - The physical appearance of
the service supplier’s staff, facilities,
equipment, forms, vehicles, and other
resources.

Benchmarking (1)
• Benchmarking is the search for and
adoption of ideas for improvement and best
practices from other organizations.
• It provides an identification of opportunities
for improvement even if current processes
are “good enough.”
• It avoids “reinventing the wheel.”

Benchmarking (2)
• Three levels of benchmarking:
– Internal – the best practices of a particular
branch, plant, or facility of the same
organization become models for the others to
follow (e.g., best practices of a particular plant
are communicated to the others to have them
adopt these also)

Benchmarking (3)
– Competitive – the best practices of another
organization engaged in the same business are
identified, analyzed, and copied (e.g., the best
practices of other manufacturers of similar
products around the world can be identified and
adopted).
• Do reverse engineering.
• Ask common customers what the competitors’
practices are.

Benchmarking (4)
– Functional – the practices of another
organization, not necessarily from the same
business, that have been identified as “best in
class” are analyzed and copied or adapted into
one’s own organizational processes.

CULTURAL CHANGE (1)
• HANDICAPS
– Size (number of personnel)
– Age of the enterprise
– Past success
– Weak pressures from the market

CULTURAL CHANGE (2)
• TWO ROUTES TO THE QUALITY
JOURNEY:
– CLSQ (Crisis Leadership makes you Sweat for
Quality)
– VLSQ (Visionary Leadership makes you Sweat
for Quality)

SUCCESSFUL TQM
IMPLEMENTATION (1)
ELEVEN PRE-CONDITIONS:
• Management involvement and leadership
• Organization for Quality
• Communication
• Participative management
• Training and education
• Measurements and standards

SUCCESSFUL TQM
IMPLEMENTATION (2)
• Plans, programs, and strategies
• Regular reviews
• Rewards and recognition
• Supplier quality
• Process management

START-UP DILEMMA
O
U
T
P
U
T
TIME
quit
point?
results curve
cost/effort curve

End

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