CHAPTER 1 (Module 1 : Week 1 & 2)

INTRODUCTION TO TOTAL QUALITY MANAGEMENT (TQM)

Learning Objectives:

● Explain the concepts of quality and performance excellence;

● Provide reasons why attention to these concepts should be a part of every organization’s culture
and management system;
● Provide a brief history of the “quality revolution”
● Describe quality in manufacturing, service, health care, education, and government
organizations;
● Explain the fundamental principles and practices of quality and performance excellence; and
● Discuss relationships of quality with organizational models in management theory.

INTRODUCTION

Philippines 2000 calls for the nation to be a community of achievers. The call for continuous
improvement can create a variety of responses. If it is not accompanied and supported by a clear
description of what people are expected to do, the call for continuous improvement can create an
enormous amount of confusion, false starts and wasted efforts.

The agenda is simply change; it is transformation. Hence, we need to tackle the issue at national,
industrial, corporate levels. An in-depth observation of the actual application of Total Quality
Management (TQM) in the Philippine setting has found many deficiencies, these however, are
surmountable. Cultural, legal, historical, ethnic and even religious values must be considered in the
implementation of the TQM general principles. Cultural awareness and sensitivity to cultural differences
and similarities are needed on the part of the TQM initiators if it is succeed.

The quality challenge of becoming world class begins with the values positivization of the
person. It demands a positive way of visioning things, people and events. It behoves everyone to act
responsibly and with a sense of urgency.

Success will not only be measured in terms of financial values, but more importantly, in terms of
the person’s and the national and corporate sense of worth. TQM implementers’ in the Philippine
setting should be considered with both results and how results are achieved to ensure sustainability.

THE PHILOSOPHY AND TOOLS OF TQM

The philosophy of TQM emphasizes a few guiding principles and applies to both large and small
organizations. These allow managers to recognize and remove barriers to change and to solicit the
opinions and ideas of their associates and utilize good ideas.

To support the philosophy of TQM, there are qualitative and quantitative tools that allow us to
measure improved quality along the way toward continuous improvement and to recognize when we
are achieving our goals of improved productivity, performance, efficiency and worklife.

TQM addresses tough issues, costs and rewards of implementing change. The decision to
implement TQM is usually based on the following:

1. The recognition that there is something to be gained, and

2. There is no other choice.
TQM AS A JOURNEY

TQM as a journey starts in the heart. It is the integration of product quality in all functions and
levels of managerial decision-making. In TQM, there are two types of language: the language of
“affection” (emotion) and the language of “reports” facts. TQM demands that refine the language of
affection into the language of reports. Reports of facts are needed to solve problems. Quality is the
result of having both qualities in fact and quality in perception. Quality in fact is achieved when an
individual or unit meets corporate specifications. Quality in perception is achieved when customers
believe that their expectations are being met. Customers are those for whom we provide a product,
service or information.

TQM requires a change from a policy of correction to a policy of prevention. This change in
policy lies at the heart of TQM. To ensure that all employees understand what behaviour is expected of
them by top management, a clear, concise policy on quality needs to be stated.

WHAT IS QUALITY, QUALITY MANAGEMENT AND TOTAL QUALITY MANAGEMENT

QUALITY – is dynamic state associated with products, services, people, processes and
environments that meets or exceeds expectations of customers.

QUALITY MANAGEMENT – It is an approach to doing business that attempts to maximize the

competitiveness of an organization through the continual improvement of the quality of its
products, services, people, processes and environment.

QUALITY MANAGEMENT

Philosophy
(the power of thinking)

Practice
*Definitions (the application of thoughts) Participation
(the use of terms)
*Perceptions
*Principles
*Brief History
*Process *Motivation
*Gurus
*Barriers *Quality Circles
*Benefits *QIT’s

TOTAL QUALITY MANAGAMENT

-is a management approach of an organization centred on quality, based on the
participation of all its members and aiming at long term success through customer satisfaction
and benefit to all members of the organization and society.

QUALITY AND PERFORMANCE EXCELLENCE

People define quality in many ways. Some think of quality as superiority or excellence of
a product or service, others view is as lack of manufacturing or service defects, still others think
of quality as related to product features or price. Quality produced several dozen different
responses, including:

1. Perfection
2. Consistency
3. Eliminating Waste
4. Speed of Delivery
 5. Compliance with policies and procedures
6. Providing a good, usable product
7. Doing it right the first time
8. Delighting or pleasing customers
9. Total customer service and satisfaction

WHAT IS THE IMPORTANCE OF QUALITY IN ORGANIZATIONS?

Consumers today are intelligent enough to recognize quality- or the lack thereof- in the products
and organizations the deal with. The organization that fails to heed its customers is in for rude
awakening, or, at worst, a quick demise. This is why an understanding of quality is still vital to every
employee in every organization. Joseph Juran, one of the most respected leaders of quality in the
twentieth century, suggested that the past century would be defined by historians as the century of
productivity. He also stated that the twenty-first century should be designated the century of quality.
“We’ve made dependence on the quality of our technology a part of life.”

THE BRIEF HISTORY

The birth of modern quality assurance methods actually began in the twelfth century B.C. in
china during the Zhou Dynasty. Specific governmental departments were created and given
responsibility for:

● Production, inventory, and product distribution of raw materials ( what we now call supply chain
management)
● Product and manufacturing
● Formulation and execution of quality standards
● Supervision and inspection

In the Middle Ages, skilled craftspeople served both as manufacturers and inspectors, building
quality into their products through their considerable pride in their workmanship. Customers expected
quality, and craftspeople understood it.

Frederick W. Taylor’s concept of “Scientific Management” greatly influenced the nature of

quality in manufacturing organizations. By focusing on production efficiency and decomposing jobs into
small work tasks, the modern assembly line destroyed the holistic nature of manufacturing. To ensure
that products were manufactured correctly, independent “quality control” departments assumed the
tasks on inspection. Thus, the separation of good from bad product became the chief means of ensuring
quality.

WHAT WILL INFLUENCE THE FUTURE OF QUALITY?

In 2011, the American Society for Quality identified eight key forces that will influence the
future of quality:

1. Global Responsibility
2. Consumer Awareness
3. Globalization
4. Increasing Rate of Change
5. Workforce of the Future
6. Aging Population
7. Twenty-first Century Quality
8. Innovation
 These forces will impact how organizations configure themselves, manager’s plan and lead, and
how all workers will perform to achieve quality. “Quality should shape society. Ultimately, quality
methodology will be used to build a better world.”

QUALITY IN ORGANIZATIONS

Managers of manufacturing and service functions deal with different types of quality issues. The
details of quality management differ between manufacturing and service industry, the customer-
driven definition eliminates these artificial distinctions and provides a unifying perspective.

QUALITY IN MANUFACTURING

Well-developed quality systems have existed in manufacturing for some time. However, these
systems focused primarily on technical issues as equipment reliability, inspection, defect
measurement, and process control.

Manufactured products have several quality dimensions, including the following:

1. Performance
2. Features
3. Reliability
4. Conformance
5. Durability
6. Serviceability
7. Aesthetics
8. Perceived Quality

QUALITY IN SERVICE

Service can be defined as “any primary or complementary activity that does not directly produce
a physical product – that is, the non-goods part of the transaction between buyer (customer) and
seller (provider). A service might be as simple as handling a complaint or as complex as approving a
home mortgage.

The production of services differs from manufacturing in many ways, and these differences have
important implications for managing quality. The most critical differences are: see pages 17-18,
book-Continuous Quality Improvement and Performance Excellent by James R. Evans.

Service organizations have special requirements that manufacturing systems cannot fulfil. The
most important dimensions of service quality include the following:

● Time
● Timeliness
● Completeness
● Courtesy
● Consistency
● Accessibility and convenience
● Accuracy
● Responsiveness

QUALITY MANAGEMENT PRINCIPLES

Principle 1: Customer Focus

Principle 2: Leadership
Principle 3: Involvement of People
Principle 4: Process Approach
 Principle 5: System Approach to Management
Principle 6: Continual Improvement
Principal 7: Factual Approach to Decision Making
Principle 8: Mutually Beneficial Supplier Relationships

References: JAMES R. EVANS, Continuous Quality Improvement and Performance Excellence with
OBE Supplements- Philippine Edition; pages 1 to 39.

CHAPTER 2 (Module 2: Week 3 & 4)

THE NATURE OF TOTAL QUALITY MANAGEMENT (TQM)
Learning Objectives:

● Understand what Total Quality Control is;

● Be able to explain the Basic Assumptions of TQC;
● Be able to analyse the Basic Components of TQC;
● Be able to understand the Total Quality Control (TQC) Campaign.

“Quality control is a continual process of testing, measuring, and evaluating products according
to the most rigorous standards and specifications.”

The most current issue facing companies today is quality, that is, improvement in cost position,
delivery performance, time to market, and responsiveness to changes in the marketplace. Quality and
satisfaction are determined ultimately by the customer’s perception of total product’s value or service
relative to its competition.

WHAT IS TOTAL QUALITY CONTROL (TQC)?

TOTAL QUALITY CONTROL, as defined by the Productivity and Development Center, is the
umbrella concept for a variety of improvement techniques which are all focused on attaining one
primary objective: full customer satisfaction. Realizing that the user of the produce/service is the final
determinant of performance, TQC maintains that all activities and decisions must be centred on meeting
customer demands/requirements/expectations. TQC also mobilizes the people-machine-information (or
humanware-hardware-software) components of business operations towards achieving excellent
product/service that will satisfy customers.

In short, TQC “establishes the environment and practices that result in products and services
meeting customers’ requirements the first time produced.” It is also “concerned ntion of errors
possible.”

BASIC ASSUMPTIONS OF TQC

TQC involves a thought which requires reorientation of people’s outlook and values. Basic among these
are the following:

1. “Respect for employees as human beings” concept.

2. “Quality First” concept.
3. “Next Succeeding Shop as Customer” concept.
4. “Customer Orientation” concept.
5. “Upper Stream Control” concept. “In Process Control” concept.
6. “Dispersion Control” concept.
7. “Vital Few” concept.
8. “Total Participation” concept.

BASIC COMPENENTS OF TQC

TQC is a comprehensive program of continuous improvement involving a number of activities.

Because of its scope, it cannot be set up overnight. It is recommended that companies deliberating on
setting up its own TQC program first take stock of its existing situation taking mote of existing
capabilities as well as its strengths and weaknesses. Such information will guide them in deciding what
programs/activities to prioritize.

As a guide, the following are the more basic components of TQC. This does not constitute a
specific set of procedures but is more of a shopping list of probable activities for TQC implementation.

A. Management by Policy
 B. Structure for Quality Management
C. Quality Management system
To be effective, the system should cover all key areas for the smooth implementation of
quality activities.
These key areas include, among other, the following:
● Formulation and implementation of work, product and process standards and their
corresponding control measures;
● Observance of the right procedures for data collection and analysis;
● Utilization of statistical methods for error prevention;
● Maintenance of quality machinery and equipment;
● Development of a quality work force with the right capabilities and attitude;
● Establishing an effective information system (recording and reporting) for
managerial decision-making; and
● Establishing a system for recognizing exemplary performance in quality
improvement.

The system for quality management is all those and much more. It should not stop in controlling
the “people-machine-information” aspects of the business. Rather, it should also include audit
procedures for checking performance against previously stated objectives and/or benchmark figures as
well as provide the mechanism for utilizing all inputs for continuous improvement.

D. Education and Training

E. Quality Work Environment
F. Quality Cost Determination

Here are some pointers in developing quality people (Kazutami, Shiga, Technoserve
International, Inc., 7 December 1993, Makati)

1.0 GREETING
2.0 OFFICE ETIQUETTE
2.1 CLEANLINESS AND ORDER
2.2 ELIMINATING WASTE AND SAVING COSTS
2.3 CONCERN FOR YOUR CO-WORKER AND SUPERVISOR
3.0 LOYALTY AND HONESTY
Loyalty and honesty are two good qualities which can be shown in little ways. Some
examples are:
a.) Giving feedback information to your superior or immediate supervisor-an
employee is not being loyal to his immediate superior if his reports are
submitted to higher management without his superior’s knowledge and
information.
b.) Stealing time is not honest. Pretending you are busy when you are not is one
way of stealing time. Supervisors should be requested to give new assignments.
Filling in your times sheets incorrectly is another way. If all employees are
honest in filling their time sheets, less time would be spent in reviewing and
checking time records.
4.0 Responsibility

VIRTUOUS ATTITUDES OF MANAGERS

The managers should develop the following virtuous attitudes:

1. Be one who gives rather than one who takes;

 2. Be trustworthy and knowledgeable;
3. Be a decisive decision-maker rendering justified decisions;
4. Be team-oriented; and
5. Keep in mind the four cardinal virtues of prudence, fortitude, temperance, and justice.

References: TOMAS Q.D. ANDRESS, Total Quality Management in the Industrial Setting; pages 9 to 23.

CHAPTER 3 (Module 3 and 4: Week 5, 6 & 7)

FRAMEWORK FOR QUALITY AND PERFORMANCE EXCELLENCE

LEARNING OBJECTIVES:
 ● Describe the philosophies of Deming, Juran, and Crosby, which provide a basis for modern
approaches to achieving quality and performance excellence;
● Provide an overview of the Malcolm Baldrige Award and other related award programs, ISO
9000, and Six Sigma as framework for quality and performance excellence; and;
● Understand the differences in scope, purpose, and philosophy of these frameworks, so as to
make informed choices when deciding to pursue an approach too organizational excellence.

“In today’s world, especially in business, there are no second chances. You’ve got to have
everything right from the beginning- your product, your pricing, and, most of all, your attitude—the will
to win, striving for excellence and technological advancement.”

FOUNDATIONS OF PERFORMANCE EXCELLENCE

W. Edward Deming, Joseph M. Juran, and Philip B. Crosby are regarded as true “management
gurus” in the quality revolution. Their insights on measuring, managing, and improving quality have
greatly influenced the practices that organizations use today. In this section, we review their thinking as
the foundation for modern concepts of performance excellence.

THE DEMING PHILOSOPHY

Deming was trained as a statistician and worked for Western Electric during its pioneering era of
statistical quality control courses as part of the national defence effort. Although Deming taught many
engineers in the United States, he was not able to reach upper management. After the war, Deming was
invited to Japan to teach statistical quality control concepts. Deming received Japan’s highest honor, the
Royal Order of the Sacred Treasure. The former chairman of NeC Electronics once said, “There is not a
day I don’t think about what Dr. Deming meant to us.”

THE DEMING CHAIN REACTION

Improve Quality

Costs decrease because of less rework, fewer mistakes,

fewer delays and snags, and better use of time and
materials

Productivity Improves

Capture the market with better quality and lower price

Stay in business

Deming summarized his philosophy in Jobs

Provide whatand
he more
calledjobs
“A System of Profound Knowledge,”
which consists of four parts:

1.) Appreciation for a system

2.) Understanding process variation
3.) Theory of knowledge
 4.) Psychology

Peter Scholtes, a noted consultant, makes some salient observations about the failure to
understand the components of Profound Knowledge:

1. When People don’t understand systems:

2. When people don’t understand variation:
3. When people don’t understand psychology:
4. When people don’t understand the theory of knowledge

DEMING’S 14 POINTS FOR MANAGEMENT

1. MANAGEMENT COMMITMENT
2. LEARN THE NEW PHILOSOPHY
3. UNDERSTAND INSPECTION
4. END PRICE TAG DECISIONS
5. IMPROVE CONSTANTLY
6. INSTITUTE TRAINING
7. INSTITUE LEADERSHIP
8. DRIVE OUT FEAR
9. OPTIMIZE TEAM EFFORTS
10. ELIMINATE EXHORTATIONS
11. ELIMINATE QUOTAS QUOTAS AND MBO (Management by Objectives)
12. REMOVE BARRIERS TO PRIDE IN WORKMANSHIP
13. INSTITUE EDUCATION
14. TAKE ACTION

THE JURAN PHILOSOPHY

Joseph M. Juran joined Western Electric in the 1920s during its pioneering days in the
development of statistical ethods for quality. He spent much of his time as a corporate industrial
engineer. He also taught quality principles to the Japanese in the 1950s just after Deming and was a
principal force in their quality reorganization.

Juran takes a more pragmatic approach to change than Deming, advocating approaches that
are designed to fit into a company’s current strategic business planning with minimal risk of rejection.
Juran views the pursuit of quality on two levels: (1) the mission of the firm as a whole is to achieve high
product quality and (2) the mission odf each individual department in the firm is to achieve high
production quality. Senior management must play an active and enthusiastic leadership role in the
quality management process.

THE CROSBY PHILOSOPHY

Philip B. Crosby, who passed away in 2001, was corporate vice president for quality at
International Telephone and Telegraph (ITT) for 14 years after working his way up from line inspector.
After leaving ITT, he established Philip Crosby Associates in 1979 to develop and offer training programs.
He also was the author of several popular books.

The essence of Crosby’s quality philosophy is embodied in what he calls the absolutes of
Quality Management are as follows:

● Quality mean conformance to requirements not elegance

● There is no such thing as quality problem
 ● There is no such thing as the economics of quality: It is always cheaper to do the job
right the first time
● The only performance measurement is the cost of quality

THE BALDRIGE AWARD

● The Baldrige National Quality Award, now known as simply the Baldrige Award, has
been one of the most powerful catalyst of TQ in the United Sates and, indeed,
throughout the world. More important, the award’s Criteria for Performance
Excellence establish a framework for understanding and integrating principles of
performance excellence in any organization.

The purposes of the award are to:

● Help stimulate American companies to improve quality and productivity;

● Recognize the achievements;
● Establish guidelines and criteria;
● Provide specific guidance for other American Enterprises.

THE CRITERIA FOR PERFORMANCE EXCELLENCE

The criteria consist of a hierarchical set of categories, items, and areas to address. The seven
categories are:

1. Leadership
2. Strategic Planning
3. Customer Focus
4. Measurement, Analysis, and Knowledge Management
5. Workforce Focus
6. Operations Focus
7. Results

MALCOLM BALDRIGE NATIONAL AWARD CRITERIA FRAMEWORK

Organizational Profile:
Environment, Relationship, and Strategic Situation

2 5
Strategic Workforce
Planning Focus

1 7
Leadership Results
 The Baldrige criteria are based on a set of key principles, called the Core Values and Concepts:

● Visionary Leadership
● Customer-Driven Excellence
● Organizational and personal Learning
● Valuing Workforce members and Partners
● Agility
● Focus on the Future
● Managing for Innovation
● Management by Fact
● Societal Responsibility
● Focus on Results and Creating Value
● Systems Perspective

Points and Received a Baldrige Award, specific portions of the Baldrige criteria that support each
of Deming’s Points are summarized here:

1. Statement of Purpose
2. Learn the New Philosophy
3. Understand Inspection
4. End Price Tag Decisions
5. Improve Constantly
6. Institute Training
7. Teach and Institute Leadership
8. Drive Out Fear and Innovate
9. Optimize the Efforts of teams and Staff
10. Eliminate Exhortations
11. Eliminate Quotas and MBO; Institute and Improvement; and Understand
12. Remove Barriers
13. Encourage Education
14. Take Action

QUALITY MANAGEMENT SYSTEM

Organizations need a structured and systematic approach to implement the principles, practices,
and techniques of Total Quality. A Quality Management System (QMS) can be considered a mechanism
for managing and continuously improving core processes to “achieve maximum customer satisfaction at
the lowest overall cost to the organization.” It applies and synthesizes standards, methods, and tools to
achieve quality-related goals. Thus, a QMS represents a specific implementation of quality concepts,
standards, methods, and tools, and is unique to an organization. A QMS provides a basis for
documenting processes used to control and improve operations, and achieve the following objectives:

● Higher product conformity and less variation

● Fewer defects, waste, rework, , and human error.
● Improved productivity, efficiency, and effectiveness.
● Drive innovation

ISO 9000:2000

As quality became a major focus of businesses throughout the world, various organizations
developed standards and guidelines. Terms such as quality management, quality control, quality system,
and quality assurance acquired different, sometimes conflicting, meanings from country to country,
within a country, and even within an industry.

ISO 9000 defines quality system standards, based on the premise that certain generic
characteristics of management practices can be standardized, and that a well-designed, well-
implemented, and carefully managed quality system provides confidence that the outputs will meet
customers’ expectations and requirements.

BENEFITS OF ISO 9000:2000

ISO 9000 has three principal benefits:

1. It provides discipline.
2. It contains the basis of a good quality system
3. It offers a marketing program

SIX SIGMA

Six Sigma can be best described as a business improvement approach that seeks to find and
eliminate causes of defects and errors in manufacturing and service processes by focusing on outputs
that are critical to customers and a clear financial return for the organization.

The origin of the term Six Sigma came from a statistical measure that equates to 3.4 or fewer
errors or defects per million opportunities. Six Sigma relates to the broader philosophy and
improvement approach. An ultimate “stretch” goal of all organizations that adopt a Six Sigma philosophy
is to have all critical processes, regardless of functional area, at a Six Sigma level of capability.

The core philosophy of Six Sigma is based on some key concepts:

1. Think in terms of key business processes and customer requirements with a clear focus on
overall strategic objectives.
2. Focus on corporate sponsors responsible for championing projects, support team activities, help
to overcome resistance to change, and obtain resources.
3. Emphasize such quantifiable measures as defects per million opportunities (dpmo) that can be
applied to all parts of an organization.
4. Ensure that appropriate metrics are identified early in the process and that they focus on
business results, thereby providing incentives and accountability.
5. Provide extensive training followed by project team deployment to improve profitability, reduce
non-value-added activities, and achieve cycle time reduction.
 6. Create highly qualified process improvement experts who can apply improvement tools and lead
teams.
7. Set stretch objectives for improvement.

SIX SIGMA IN SERVICE ORGANIZATIONS

All Six Sigma projects have three key characteristics:

1. A problem to be solved;
2. A process in which the problem exists; and
3. One or more measures that quantify the gap to be closed and can be used to monitor progress.

References: JAMES R. EVANS, Continuous Quality Improvement and Performance Excellence with OBE
Supplements- Philippine Edition; pages 48 to 92.

CHAPTER 4 (Module 5 : Week 8, 9 & 10)

TOOLS AND TECHIQUES FOR QUALITY DESIGN AND CONTROL

LEARNING OBJECTIVES:

● Describe approaches to designing products and services to achieve better customer

satisfaction;
● Illustrate the application of some tools used for process design and control; and
 ● Describe principles of statistical thinking as a basis for effective management.

DESIGNING QUALITY GOODS AND SERVICES

Customers’ needs and expectations drive the planning process for goods and services. Marketing plays a
key role in identifying customer expectations. Once they are identified, managers must translate them
into specific product and service specifications that manufacturing and service delivery processes must
meet. In some cases, the product or service that customers receive is quite different from what they
expect. It is management’s responsibility to minimize such gaps. Organizations can be used several tools
and approaches to help them focus on their external and internal customers.

Design for Six Sigma consists of four principal activities:

1. Concept development
2. Design development
3. Design optimization
4. Design verification

CONCEPT DEVELOPMENT AND INNOVATION

CONCEPT DEVELOPMENT is the process of applying scientific, engineering, and business

knowledge to produce as basic functional design that meets both customer need and manufacturing or
service delivery requirements. Developing new concepts requires creativity and innovation.

CREATIVITY is seeing things in new or novel ways. INNOVATION involves the adaptation of an
idea, process, technology, product, or business model that is either new or new to its proposed
application.

The Small Business Administration classifies innovations into four categories:

1. An entirely new category of product;

2. First of its type on the market in a product category already in existence;
3. A significant improvement in existing technology
4. A modest improvement to an existing product

QUALITY FUNCTION DEPLOYMENT

Quality Function Deployment (QFD) is a methodology used to ensure that customers’

requirement are met throughout the product design process and in the design and operation of
production systems. QFD is a philosophy and a set of planning and communication tools that focuses on
customer requirements in coordinating the design, manufacturing, and marketing goods. The focus of
QFD is translating customer requirements into the appropriate technical requirements for each stage of
product development and production. The customers’ requirements expressed in their own terms are
appropriately called THE VOICE OF THE CUSTOMER.

THE HOUSE OF QUALITY

Interrelationships

Technical Features
Building the House of Quality requires six basic steps:

1. Identify customer attributes.

2. Identify technical features.
3. Relate the customer attributes to the technical features.
4. Evaluate competing products.
5. Evaluate technical features and develop targets.
6. Determine which technical features to deploy in the production process.

Three other houses of quality are used to deploy the voice of the customer to component parts
characteristics, process, planning, and production planning. These are:

1. Technical features deployment matrix

2. Process plan and quality control charts
3. Operating instructions

DESIGN FAILURE MODE AND EFFECTS ANALYSIS

The purpose of design, failure, mode, and effects analysis (DFMEA) is to identify all the ways in
which a failure can occur, to estimate the effect and seriousness of the failure, and to recommend
corrective design actions. A DFMEA usually consists of specifying the following information for each
design element or function:

● Failure modes
● Effect of the failure on the customer
● Severity, likelihood of occurrence, and detection rating
● Potential causes of failure
● Corrective actions or controls

DESIGN FOR MANUFACTURABILITY

Design for manufacturability (DFM) is the process of designing a product for efficient production at the
highest level of quality. DFM is typically integrated into standard processes, but because of the need for
highly-creative solutions, it might be addressed in specialized “think-tank” departments in a company.

DESIGN AND ENVIRONMENTAL RESPONSIBILITY

 Pressures from environment groups clamouring for “socially responsive” designs, states and
municipalities that are running out of space for landfills, and consumers who want the most for their
money all cause designers and managers to look carefully at the concept of DESIGN FOR ENVIRONMENT,
or DFE. DFE is the explicit considerations of environmental concerns during the design of products and
processes, and includes such practices as designing for recyclability and disassembly.

DESIGN FOR SERVICES

Services are quite different from manufactured goods. First, the outputs of service processes are not as
well defined. Services are intangible and represent an interaction between the customer and service
provider; they cannot be inventoried, moved, or inspected as can manufacture goods. Second, most
service processes involve a greater interaction with the customer, often making it more difficult to
identify needs and expectations.

Services processes often involve both internal and external activities, a factor that complicates quality
design. It has three basic components: physical facilities, processes, and procedures; employees’
behaviour; and employees’ professional judgement.

DESIGNING QUALITY PROCESSES

The design of the processes that produce and deliver goods and services to both external and internal
customers can have a significant impact on cost (and hence profitability), flexibility (the ability to
produce the right types and amounts of products as customer demand or preferences change), and
quality.

POKA-YOKE (MISTAKE-PROOFING)

Poka-yoke is an approach for mistake-proofing processes using automatic devices or methods to avoid
simple human error. The poka-yoke concept was developed and refined by the late Shigeo Shingo, a
Japanese manufacturing engineer who developed the Toyota production system. Poka-yoke is focus on
two aspects: prediction, or recognising that a defect is about to occur and providing a warning, and
detection, or recognizing that the defect has occurred and stopping the process.

TYPES OF ERROR THEY DESIGNED TO PREVENT: SERVER ERRORS AND CUSTOMER ERRORS:

1. TASK ERRORS
2. TREATMENT ERRORS
3. TANGIBLE ERRORS
4. CUSTOMER ERRORS
5. CUSTOMER ERRORS DURING AN ENCOUNTER
6. CUSTOMER ERRORS AT THE RESOLUTION STAGE OF A SERVICE ENCOUNTER

PROCESS CONTROL

Control is the activity of ensuring conformance to the requirements and taking corrective action when
necessary to correct problems and maintain stable performance.

CONTROL SYSTEM has three components:

1. A standard or goal
2. A means of measuring accomplishment
3. Comparison of actual results with the standard, along with feedback to form the basis for
corrective action.
STATISTICAL THINKING AND PROCESS CONTROL TOOLS

Statistical thinking is at the heart of the Deming philosophy and is the basis for good
management. Statistical thinking is a philosophy of learning and action based on the principles that:

1. All work occurs in a system of interconnected processes;

2. Variation exists in all processes; and
3. Understanding and reducing variation are keys to success.

Some of the operational problems created by excessive variation include the following:

● Variation increases unpredictability

● Variation reduces capacity utilization
● Variation contributes to a “bullwhip” effect
● Variation makes it difficult to find root causes
● Variation makes it difficult to detect potential problems early.

References: JAMES R. EVANS, Continuous Quality Improvement and Performance Excellence with
OBE Supplements- Philippine Edition; pages 108 to 138.

CHAPTER 5 (Module 6 : Week 11, 12 & 13)

TOOLS AND TECHNIQUES FOR QUALITY IMPROVEMENT

LEARNING OBJECTIVES:

● Explain the philosophy and approaches to continuous improvement;

 ● Describe systematic improvement processes used by many organizations;
● Illustrate the application of a variety of tools for process improvement; and
● Discuss breakthrough improvement and the importance or creativity and
innovation.

PROCESS IMPROVEMENT

Any process performance measure naturally fluctuates around some average level. Abnormal
conditions cause an unusual deviation from this pattern. Removing the causes of such abnormal
conditions and maintaining level performance is the essence of control. Improvement means changing
the performance to a new level. To be able to improve a process, it must be (1) repeatable and (2)
measurable. Repeatability means that the process must recur over time. The cycle may be long, as with
product development processes or patent applications; or it may be short, as with a manufacturing
operation or an order entry process. In other words, you need the ability to learn from both successes
and failures.

IMPROVEMENT PROCESSES

Managers need systematic approaches to drive continuous improvement programs. Some

organizations follow some standard and popular approaches, while others develop unique approaches
to meet their own needs and cultures. These approaches are routinely taught in employee training
programs and form the basis for disciplined problem-solving efforts.

Seven steps for accelerated continuous improvement:

1. Focus and pinpoint;

2. Communicate;
3. Translate and link;
4. Create a management action plan;
5. Improve processes;
6. Measure progress and provide feedback; and
7. Reinforce behaviours and celebrate results.

A structured improvement approach, which describes a logical, data-driven process for

solving problems, generally includes four key steps:

1. Redefining and analysing the perceived problem;

2. Generating ideas;
3. Evaluating ideas and selecting a workable solution, and
4. Implementing the solution.

THE DEMING CYCLE

 Plan Do Plan Do

Act Study Act Study

THE DEMING CYCLE

One of the earliest approached focused on quality improvement that can be learned and applied by
everyone in an organization is the Deming Cycle. The Deming Cycle is a simple adaptation of the
scientific method for process improvement.

The “Deming Wheel” consisted of:

● Design the product with appropriate tests.

● Make the product and test in the production line in the laboratory.
● Sell the product.
● Test the product in service and through market research to find out what users think
about it and why nonusers have not bought it.

Japanese executives adapted this into the PDCA cycle – Plan (design the product), Do (ensure that
production makes the product as designed), Check (check sales/complaints and confirm whether the
customer is satisfied), Act (use feedback to incorporate improvements in the next phase of planning).
This became known as the Deming Cycle; Deming reintroduced this during his management seminars in
the 1980s and changed “check” to “study,” called it as PDSA Cycle.

Three fundamental questions to consider are:

1. What are we trying to accomplish?

2. What changes can we make that will result in improvement?
3. How will we know that a change is an improvement?

SIGMA DMAIC METHODOLOGY

Six Sigma uses a systematic improvement approach known as DMAIC – Define, Measure, Analyze, and
Control.

TOOLS FOR CONTINUOUS IMPROVEMENT

No matter which improvement approach is followed, many tools have been created or adapted from
other disciplines (such as operations research and industrial engineering) to facilitate the process.

THE SEVEN QUALITY CONTROL TOOLS

Seven simple statistically-based tools are used extensively to gather and analyse data.

1. Flowcharts
2. Check Sheets
3. Histograms
4. Pareto diagrams
5. Cause-and-effect Diagrams
6. Scatter Diagrams
7. Control Charts

ROOT CAUSE ANALYSIS

Root cause analysis is an approach using statistical, quantitative, or qualitative tools to identify and
understand the root cause, or the source of a problem.

LEAN THINKING

Improving processes to reduce waste involves the concept of lean thinking. Lean is often used to refer to
approaches initially developed by the TOYOTA Motor corporation that focus on the elimination of waste
in all forms including defects requiring rework, unnecessary processing steps, unnecessary movement of
material or people, waiting time, excess inventory, and overproduction.

Some of the general principles of lean include:

1. Reducing handoffs
2. Eliminating steps
3. Performing steps in parallel rather than in sequence
4. Involving key people early
5. The 5S’s
6. Visual controls
7. Efficient layout and standardized work
8. Pull production
9. Single minute exchange of dies (SMED)
10. Total productive maintenance
11. Source inspection

CREATIVITY ORGANIZATIONAL SYSTEMS

Warren Bennis, a recognized expert on leadership, noted: “There are two ways of being creative. One
can sing and dance. Or one can create an environment in which singers and dancers flourish.” While the
tools discussed in this chapter all help to promote creative thinking, they cannot be applied effectively in
a noncreative environment. Because management designs the organizational systems, management is
responsible for developing a climate conducive to creativity and innovation. The organizational literature
contains many different recommendations for fostering creativity. Some of these are:

● Remove or reduce obstacles to creativity within an organization

● Match jobs to individuals’ creative abilities
● Tolerate failures and establish direction
● Improve motivation to increase productivity and solve problems creatively
● Enhance the self-esteem and build the confidence of organization members
● Improve communication so that ideas can be better shared
● Place highly creative people in special jobs and provide training to take advantage of
their creativity

References: JAMES R. EVANS, Continuous Quality Improvement and Performance Excellence with
OBE Supplements- Philippine Edition; pages 150 to 184.

CHAPTER 6 (Module 7 : Week 14, 15 & 16)

QUALITY IN CUSTOMER-SUPPLIER RELATIONSHIP

LEARNING OBJECTIVES:

● Demonstrate the importance of customer-supplier relationship (CSRs) to achieving

performance excellence;
 ● Identify the principles and practices of quality CSRs;
● Give examples of effective partnerships between customers and suppliers; and
● Compare a quality-focused approach to customers and suppliers to conventional
theories

CUSTOMER-SUPPLIER RELATIONSHIPS AND PERFORMANCE EXCELLENCE

From the TQ perspective, every company is part of a long chain (actually many long chains) of customers
and suppliers. Each company is a customer to its suppliers and a supplier to its customers, so it does not
make sense to think of a company as only one or the other. One implication of this concept is that your
customer’s customers are, in a sense, you customers as well. Sometimes company must focus on both
its immediate customers and those next in the chain.

THE IMPORTANCE OF CUSTOMERS

The importance of customers has evolved over the years, from a view of the customer as a buyer to
increase profitability, to a view of the customer as an active partner and the focus of all quality activities.
Customer satisfaction translates directly into increased profits. However, while satisfaction is important,
modern firms need to look further. Achieving strong profitability and market share requires loyal
customers-those who stay with a company and make positive referrals.

THE CUSTOMER-SUPPLIER CHAIN

Customer/
Supplier Customer/
Supplier Customer/
(Coal Mine) Supplier Customer/
(Steel Mill) Supplier
(Auto plant)
(Car rental agency)

THE IMPORTANCE OF CUSTOMERS

The importance of customers has evolved over the years, from a view of the customer as a
buyer to increase profitability, to a view of the customer as an active partner and the focus of all quality
activities. Customer satisfaction translates directly into increased profits. However, while satisfaction is
important, modern firms need to look further. Achieving strong profitability and market share requires
loyal customers – those who stay with a company and make positive referrals. Satisfaction and loyalty
are very different concepts.

THE IMPORTANCE OF SUPPLIERS

The quality of goods and services received from suppliers, the upstream portion of the supply
chain, has a significant effect on the quality of goods and services that downstream customers receive.
Suppliers are those companies that provide the organization with goods and services that help them to
satisfy the needs of their own customers.

PRINCIPLES FOR CUSTOMER-SUPPLIER RELATIONSHIPS

Three governing principles CSRs under TQ:

● Recognition of the strategic importance of customers and suppliers;

● Development of win-win relationships between customers and suppliers, and
● Establishing relationship based on trust.

PRACTICES FOR DEALING WITH CUSTOMERS

 How can these principles be translated into specific practices? The most basic practices for
dealing with customers are:

1. Collect information constantly on customer expectations;

2. Disseminate this information widely within the organization;
3. Use the information to design, produce, and deliver the organization’s products and services;
and
4. Measure customers’ perception of satisfaction and their levels of loyalty and engagement.

USE CUSTOMER INFORMATION

Customer information is worthless unless it is used. Customer feedback should be integrated into
continuous improvement activities.

THE CUSTOMER-DRIVEN QUALITY CYCLE

Customer needs and expectations

(expected quality)

Identification of customer needs

Translation into product/service specifications

(Design quality)

Feedback

Output
(actual quality)

Customer perception
(perceived quality)

MEASURE CUSTOMER SATISFACTION, LOYALTY, AND ENGAGEMENT

An effective customer satisfaction measurement system yields reliable information about

customer ratings of specific product and service features and about the relationship between these
ratings and the customer’s likely future market behaviour. One way to evaluate customer satisfaction
and use it effectively is to collect information on both the importance and the performance of key
quality characteristics.

Commonly used factors to measure customer loyalty and engagement are:

● Overall satisfaction
● Likelihood of as first-time purchaser to repurchase
● Likelihood to recommend
 ● Likelihood to continue purchasing the same products or services
● Likelihood to purchase different products or services
● Likelihood to increase frequency of purchasing
● Likelihood to switch to a different provider

MANAGING CUSTOMER RELATIONSHIPS

A company builds customer loyalty by developing trust and effectively managing the
interactions and relationships with customers through customer-contact employees. In services,
customer’s satisfaction or dissatisfaction takes place during moments of truth- every instance in which a
customer comes in contact with an employee of the company.

SET THE USE SERVICE STANDARDS

Service standards are measurable performance levels or expectations that define the quality of
customer contact. Service standards might include technical standards such as response time of
behavioural standards. Customer-contact employees are particularly important in achieving service
standards. They are the people whose main responsibilities bring them into regular contact with
customers – in person, by telephone, or through other means.

MANAGE COMPLAINTS

Despite all efforts to satisfy customers, every business experiences unhappy customers.
Complaints can adversely affect business if not dealt with effectively. Many customers do not complain
because they feel it wouldn’t do any good or they are uncomfortable with the process.

EXPLOIT TECHNOLOGY

Technology can greatly enhance an organization’s ability to leverage customer-related

information and provide improved customer service. It is the key enabler of customer relationship
management (CRM) software, which is designed to help organizations increase customer loyalty, target
their most profitable customers, and streamline customer communication processes.

DON’T IGNORE INTERNAL CUSTOMERS

Individual departments and key cross-functional processes within a company have internal
customers who contribute to the company’s mission and depend on the departments or function’s
products or services to ultimately serve consumers and external customers.

PRACTICES FOR DEALING WITH SUPPLIERS

In business today, operations are often highly decentralized and dispersed around the world.
Consequently, managing a complex network of suppliers becomes a critical interorganizational issue.
Suppliers play a vital role throught the product development process, from design through distribution.
Suppliers can provide technology or production processes not internally available, early design advice,
and increased capacity, which can result in lower costs, faster time-to-market, and improved quality for
their customers.

Strong customer/supplier relationships are based on three guiding principles:

1. Recognizing the strategic importance of suppliers in accomplishing business objectives,

particularly minimizing the total cost of ownership;
2. Developing win-win relationships through partnerships rather than as adversaries, and
3. Establishing trust through openness and honesty, thus leading to mutual advantages.
References: JAMES R. EVANS, Continuous Quality Improvement and Performance Excellence with
OBE Supplements- Philippine Edition; pages 201 to 226.