Module 8- Total Quality Management

Total Quality Management (TQM) is a modern management concept.

Successful organizations worldwide have adopted TQM. It is important to have a
thorough understanding of the fundamentals of quality management, so as to
understand TQM in the right perspective.

Basic Terms:
Total - made up of the whole
Quality - degree of excellence a product or service provides
Management - act, art or manner of planning, controlling, and directing.

Therefore, TQM is the art of managing the whole to achieve excellence.

What does TQM mean?

 It is an improvement to the traditional way of doing business. It is proven technique

to guarantee survival in world-class competition.
 It is the art of managing the whole to achieve excellence.
 It is both a philosophy and a set of principles that directs the foundation of a
continuously improving business organization.

What’s the goal of TQM?

(1) total client satisfaction through quality products and services; and
(2) continuous improvements to processes, systems, people, suppliers, partners, products, and
services.

 “Do the right things right the first time, every time.”

Traditional view:
Quality cannot be improved without significant losses in productivity.

TQM view:
Improved quality leads to improved productivity.

Basic Tenets of TQM:

1. The customer makes the ultimate determination of quality.
2. Top management must provide leadership and support for all quality initiatives.
3. Preventing variability is the key to producing high quality.
4. Quality goals are a moving target, thereby requiring a commitment toward continuous improvement.
5. Improving quality requires the establishment of effective metrics. We must speak with data and facts
not just opinions.

The three aspects of TQM

1. Counting - Tools, techniques, and training in their use for analyzing, understanding, and solving
quality problems
2. Customers - Quality for the customer as a driving force and central concern.
3. Culture - Shared values and beliefs, expressed by leaders that define and support quality.

Total Quality Management and Continuous Improvement

 TQM is the management process used to make continuous improvements to all functions.
 TQM represents an ongoing, continuous commitment to improvement.
 The foundation of total quality is a management philosophy that supports meeting customer
requirements through continuous improvement.

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Continuous Improvement versus Traditional Approach

Traditional Approach Continuous Improvement

 Market-share focus  Customer focus
 Individuals  Cross-functional teams
 Focus on ‘who” and “why”  Focus on “what” and “how”
 Short-term focus  Long-term focus
 Status quo focus  Continuous improvement
 Product focus  Process improvement focus
 Innovation  Incremental improvements
 Fire fighting  Problem solving

Value-based Approach:

Manufacturing Dimensions Service Dimensions

 Performance  Reliability
 Features  Responsiveness
 Reliability  Assurance
 Conformance  Empathy
 Durability  Tangibles
 Serviceability
 Aesthetics
 Perceived quality

The TQM System

What is Quality?

 Merriam Webster’s Collegiate Dictionary, defines quality as “an inherent feature;

degree of excellence; and superiority in kind

Some of definitions of quality that have gained wide acceptance in the corporate world:
 It is meeting or exceeding customer expectations.
 Juran, one of the quality quro, defined quality as fitness for use.

Based on Juran‘s definiton, quality therefore does not only have to be perceived by the customer, but
the customer experience of quality of a product or service is more important. Quality does not mean an
expensive product.

Reasons why quality is a cardinal priority for most organizations.

 Competition

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  Changing customer-the new customer is not only commanding priority based on volume but is
more demanding about the “quality system”
 Changing product mix – the shift from low volume high price to high volume, low price
resulted in a need to reduce the internal cost of poor quality.
 Product complexity- as systems have become more complex the reliability requirments for
suppliers of components have bome more stringent
 Higher level of customer satisfaction- higher customer expectations are getting spawned by
increasing competition.

History of quality management

…To know the future, know the past!

 Before Industrial Revolution, skilled craftsmen served both as manufacturers and inspectors,
building quality into their products through their considerable pride in their workmanship.

 Industrial Revolution changed this basic concept to interchangeable parts.

 F. W. Taylor (“scientific management” fame) emphasized on the use of scientific
standards equitably to managers as well as workers.

 Adam Smith who advocated dividing the labor required to make a product into simple,
repetitive tasks in order to develop workers’ skills, save time and use specialized tools.

 Frank and Lilian Gilbreth’s Time and Motion economy, they believed that a way a task is
performed is as important as the time it takes to do it.

 Statistical approaches to quality control started at Western Electric with the separation of
inspection division. Pioneers like Dr. Walter Shewhart, Deming W.Edwards and Joseph M.
Juran were all employees of Western Electric.

 Dr. Walter Shewart (1891-1967) developed the Plan, Do, Check Act (PDCA) cycle for
continuous improvement which is in use even today.

 After World War II, under General MacArthur's Japan rebuilding plan, Deming and Juran went
to Japan.

 Deming W, Edwards (1900-1993) modified PDCA cycle of Shewart to the Plan, Do, Study
and Act (PDSA). He also advocated the extensive used of statistical quality control theory to
Japanese industry along with Juran. Deming stressed the importance of suppliers and customers
for the business development and improvement.
He believed that people do their best and it is the system that must change to improve quality.
His 14 Points for Management formed the basis for his advise to top Japanese management.

 Joseph M. Juran (1904), developed the Statistical Quality Handbook for Western Electric
Company. He identified Fitness of quality and popularized the same Juran travelled to Japan to
teach is own theories- that hands-on management was necessary at all levels of corporation to
ensure quality control and that problems are opportunities to make improvements.

His approach is still known today as the Juran Trilogy; quality planning, quality control and quality
improvement

 In Japan the following individual took seed from this training and went on to developed their own
major contributions to what is now Total Quality Management:

 Kaoru Ishikawa (1915-1989), strongly advocated the use of cause and effect
diagram to provide a true representation of the organizational impact and
procedures. He developed Fishbone or Ishikawa diagram for cause and effect analyis.

 Taichi Ohno, known as the father of just-inTime production. He is also the co-creator
of Toyota Production System (TPS)

Juran’s Quality Trilogy

1. Quality planning: Process of preparing to meet quality goals. Involves
understanding customer needs and developing product features.

2. Quality control: Process of meeting quality goals during operations. Control

parameters. Measuring the deviation and taking action.

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 3. Quality improvement: Process for breaking through to unprecedented levels of
performance. Identify areas of improvement and get the right people to bring about
the change.

Elements of Total Quality Management

Quality comes first, not short-term profits

The customer comes first, not the producer
Customers are the next process with no organizational barriers
Decisions are based on facts and data
Management is participatory and respectful of all employees
Management is driven by cross-functional committees covering product planning, product design,
production planning, purchasing, manufacturing, sales, and distribution

TQM Cost of Quality

Quality costs are those incurred in excess of those that would have been incurred if product
were built or service performed exactly right the first time:

This view is held by adherents of the TQM philosophy. Costs include not only those that are direct,
but also those resulting from lost customers, lost market share, and many hidden costs and foregone
opportunities not identified by modern cost accounting systems.

Categorization of Quality Costs

The cost of quality is generally classified into four categories:

 External Failure Cost - Cost associated with defects found after the customer receives the
product or service. Example: Processing customer complaints, customer returns, warranty
claims, product recalls.
 Internal Failure Cost - Cost associated with defects found before the customer receives the
product or service. Example: Scrap, rework, re-inspection, re-testing, material review, material
downgraded.
 Inspection (appraisal) Cost: Cost incurred to determine the degree of conformance to quality
requirements (measuring, evaluating or auditing). Example: Inspection, testing, process or
service audits, calibration of measuring and test equipment.
 Prevention Cost: Cost incurred to prevent (keep failure and appraisal cost to a minimum)
poor quality. Example: New product review, quality planning, supplier surveys, process reviews,
quality improvement teams, education and training.

PDSA CYCLE

PDSA cycle is suitable for process improvement projects. Each process improvement should be
organized as a project. PDSA typically involves the following:

 The planning phase

 The do phase
 The study phase
 The Act phase

Plan – establish objectives, establish a plan that will facilitate achieving the goal, establish a
measure system.

Do – Plan for implementation and measurements, Implementation the plan on pilot basis

Study – Compare the results with the objectives, identify gaps, analyze the causes for gaps and
exceptional results if any.

Act – standardize the procedure that met or exceeded the goals, if there were gaps, improve the
plan and carry out PDSA again.

Service Quality

The definition of service as per the international standard, ISO 9000 follows: “The result
generated, by activities at the interface between the organization and the customer and by the
organization’s internal activities, to meet customer needs”.
The result generated in the case of manufacturing is a product. However, in the case of service, it may be a
product or may not be a product.

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Customer Service Attributes

In COMFORT acronym:

• C for Caring. The customer service employees should not only be, but perceived to very
interested in finding out the real needs of the customer and help them to buy what they
really intend to buy, product or service. They should not drive away customers. They should
also be ready to answer, both the relevant and irrelevant queries and go out of the way to
help customers in solving their problems.

 O for Observant. Each customer service personnel should be a good observer. The
customer contact person should pay attention to the body language of the customers
and
should also be able to read their requirements

 M for Mindful. The customer contact employees have to remember that the organization is
dependent on its customer. The organization has to strive to meet the customer needs. In
the
service industry, the customer is always late. This is true in every service organization. At the
same time, the service organization may not be able to complete the job immediately due to
genuine reasons. However, the urgency of the customer has to be considered. They should
give importance to the requirements of the customer even if the request was received very
late.

• F for Friendly. The customer service employees have to be friendly with customers. At
times, if the customers or their representatives are not very friendly, then, such situations
have to be tactfully handled by the customer service employees.

 O for Obliging. The organization should feel obliged that the customer has visited them
with an enquiry. It may so happen that the customer may not be serious about giving a
business. He may just be comparing the price for a job already finalized with some other
provider.

 R for Responsibility. While the proposals are being submitted, the organization should feel
responsible for successfully accomplishing the proposal if accepted by the customer. It is
better to subject the proposals for “contract review” before sending. The contract review
should not be an obstacle for innovative ideas and it should not cause delay.

 T for Tactful. The customer is supreme. But this does not mean that they cannot be wrong.
The organization should tactfully handle such situation. Whatever is asked for after a
contract
is signed should incur additional cost. In a service organization, generally, the customers
would demand that the job should be completed in a very short time. In such situations, the
customer contact employees should explain in detail how much time is really required for
providing the service. Tactful handling of customers will make the customers understand and
cooperate in completing the jobs successfully.

Continuous Process Improvement (CPI)

 is an endless occurrence throughout uninterrupted steady state of a series of procedures for

the common progression of the organization.

 refers to an ongoing efforts to improve business processes.

 is a formal activity, ongoing approach to improving business processes (ultimately

productivity, products, and services).

TQM on CPI

 means a gradual and continuous improvement of processes. It consists of finding new

opportunities or improvements of processes, improving them, measuring improvement, and
repeating the cycle again and again.

Kaizen is a Japanese word. It means gradual, orderly and continuous improvement.

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  Continuous improvement is achieved through improving the current way of manufacturing
and eliminating waste.

 Kaizen is a Japanese strategy for continuous improvement.

 Kaizen calls for never ending improvements.

 Two activities of KAIZEN:

1.) Maintenance 2.) Improvement .

 An organization functions with a set of processes. Maintenance involves activities directed at

maintaining current technological, managerial and operating standards. While efforts are
going on for improving the processes, the present activities should continue as per the
current standards without any interruption. It should not come to halt. Kaizen involves small,
continuous improvements of the current processes. Thus, an obligation will be involved in two
distinct activities namely, maintenance and Kaizen .

BASIC PRINCIPLES OF KAIZEN:

1. Work place effectiveness

2. Elimination of waste, strain and discrepancy
3. Standardization Work place effectiveness.

 Japanese have developed the 5S tools (sort, straighten, scrub, systematize, standardize)
for addressing the workplace effectiveness.

 Eliminating waste, strain and discrepancy. Kaizen is achieved through application of 5S tools
for workplace effectiveness and elimination of three MUs.

The three MUs stands for three Japanese words as given below Three MUs

1. Muda Waste

2. Muri Strain

3. Mura Discrepancy

5s for improving workplace effectiveness:

1.Seiri (sort) Separate out all unnecessary things and eliminate them.
2. Seiton (straighten) Arrange the essential things in order, so that they can be easily accessed.
3. Seiso (scrub) Keep machinery and working environments clean.
4. Seiketsu (systematize) Make cleaning and checking as a routine practice.
5. Shitsuke (standardize) Standardize the previous four steps.

What is the Advantage of 5S

 Tools and materials are conveniently located in uncluttered work areas

 Operators spend less time looking for items
 This leads to higher workstation efficiency, a fundamental goal in mass production
 A clean and tidy workplace leads to greater well being and increased motivation
 Company image improves
 Health and Safety is ensured
 Machine maintenance
 Quality
 Productivity
 Lean Manufacturing
 Time saving
 Quick retrieval
 Accident and mistakes minimized
 Increases space
 Creates workplace ownership

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 PDCA Measurement:

• Plan Phase- during, the possible measures are identified. The right measure is the one
that can help the organization to prove a point.
• Do (Measure) Phase. The organization collects data in this phase as per approved
procedures on a pilot basis.
• Check Phase. During this phase the results are counter checked through other means.
• Act Phase. It the results confirm the reality then the measures can be confirmed during
the Act phase.

Six Sigma is defined as a business process that allows organizations to drastically improve their
bottom line by designing and monitoring every day business activities in ways that minimize waste and
resources while increasing customer satisfaction.

 Six sigma is defined by GE as “ vision of quality which equates with only 3.4 defects per million
opportunities for each product or service transaction and strive for perfection.
 Six sigma refers to a measure of process consistency and aims at achieving the same.
 Six sigma is a methodology for improving processes.
 Six sigma was born in 1980s at Motorola. Bill Smith, an engineer at Motorola’s Communications
Sector.

Six Sigma Process Model

 DMAIC is for improvement of the existing process or a product. (Define, Measure, Analyze,
Improve, Control)

 DMADV is aimed at development of a new product or process. (Define, Measure, Analyze,

Design, Verify)

DMAIC means:

Define the system, the voice of the customer and their requirements, and the project goals, specifically.

Measure key aspects of the current process and collect relevant data; calculate the 'as-is' Process
Capability.

Analyze the data to investigate and verify cause-and-effect relationships. Determine what the
relationships are, and attempt to ensure that all factors have been considered. Seek out root cause of the
defect under investigation.

Improve or optimize the current process based upon data analysis using techniques such as design of
experiments, poka yoke or mistake proofing, and standard work to create a new, future state process. Set
up pilot runs to establish process capability.

Control the future state process to ensure that any deviations from the target are corrected before they
result in defects. Implement control systems such as statistical process control, production boards, visual
workplaces, and continuously monitor the process.

The DMADV project methodology

Define design goals that are consistent with customer demands and the enterprise strategy.
Measure and identify CTQs (characteristics that are Critical To Quality), measure product capabilities,
production process capability, and measure risks.
Analyze to develop and design alternatives
Design an improved alternative, best suited per analysis in the previous step
Verify the design, set up pilot runs, implement the production process and hand it over to the process
owner(s).

Quality System

Total Productive Maintenance (TPM)

 Total Productive Maintenance is a system of maintaining and improving the integrity of
production and quality systems through the machines, equipment, processes, and employees
that add business value to an organization.

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  TPM is a modern maintenance strategy aimed at more profits.
 TPM was evolved in Japan to take care of this important aspects of business
 Increased productivity is the hallmark of TPM
 TPM is a part of TQM since the former has a bigger role to play in satisfying customers and
shareholders of an organization.

Goals of Total Productive Maintenance (TPM)

 Is continuous improvement in up time of the equipment by harnessing the skills of every

employee leading to the growth of the organization
 Is to involve every employee in upkeep of plant and machinery.

Preventive Maintenance

 Preventive is better than cure.

 TPM calls for planned maintenance to avoid breakdown of the plant and machinery.
 Preventive maintenance – is a set of maintenance actions that are required to be carried
out by trained employees to prevent failures and increase the life of the equipment.

Quality System-ISO 9000 Standard

 ISO is engaged in formulating standard specifications in a variety of discipline such as quality

management, information technology, metrology etc.
 ISO 9000:2000 standard defines management system as : Set of interrelated and interacting
elements to establish policy and objectives to achieve those objectives.

ISO 9000 Family Standards

 ISO 9000: 2000 Quality Management System-Fundamentals and Vocabulary

 ISO 9001: 2000 Quality Management System-Requirements
 ISO 9004:2000 Gives guidance for implementation of the standard ISO 9001:2000
 ISO 1911: Guidelines on quality and/or environmental system auditing
 ISO 10012-1:1992 Quality assurance requirements for measuring equipment-Part 1: Metrological
confirmation system for measuring equipment
 ISO 10012-2: 1997 Quality assurance requirements for measuring equipment-Part 2: Guidelines
for control of measuring processes
 ISO 10013: 1995 Guidelines for developing quality manuals

Improvement

 Continual improvement- The organization should improve the effectiveness of QMS.

 Corrective Action results from a failure. The non-conformities should be identified and corrected.
 Preventive Actions are taken to prevent failures. Therefore, the potential causes of non-
conformities should be identified and prevented.

Quality Audit

 Continual improvement- The organization should improve the effectiveness of QMS.

 Corrective Action results from a failure. The non-conformities should be identified and corrected.
 Preventive Actions are taken to prevent failures. Therefore, the potential causes of non-
conformities should be identified and prevented.

Sector Specific Quality System Standards

 QS 9000. This is a document specifying quality system requirements for automotive sector.
 AS 9100. Aerospace is a major sector of industry.
 ISO/TS 16949. The technical specifications are applicable to automobile industries.
 TL 9000. This document is applicable to telecommunication industry.

Environmental Management System (EMS)-14001

 ISO 14000 is a series of international standards on environmental management.

 ISO 14001 is the corner stone standard of the ISO 14000. It specifies a framework of control foa
an EMS against which an organization can be certified by a third party.
 ISO 14004 is meant for providing guidance for EMS implementation.

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Quality Management Organizations and Awards

The Malcolm Baldrige National Quality Award- is a competition to identify and recognize top-quality
U.S. companies. This model addresses a broadly based range of quality criteria, including commercial success
and corporate leadership. Once an organization has won the award it has to wait several years before being
eligible to apply again