CHAPTER 2

APPROACHES TO TOTAL QUALITY

TOTAL QUALITY PARADIGMS

Total quality requires a set of guiding principles. Such principles have been promoted by the
three "quality gurus"-Deming, Juran, and Crosby. Their insights on measuring, managing,
and improving quality have had profound impacts on countless managers and entire
corporations around the world.

THE DEMING MANAGEMENT PHILOSOPHY

William Edwards Deming was born on October 14, 1900, he was trained as a statistician and
worked for Western Electric during its pioneering era of statistical quality control
development in the 1920s and 1930s.

Deming's philosophy is based on improving products and services by reducing uncertainty

and variability in the design and manufacturing processes.

Deming stresses that higher quality leads to higher productivity, which in turn leads to long-
term competitive strength. The Deming "chain reaction," it summarizes this view. This theory
states that improvements in quality lead to lower costs because of less rework, fewer
mistakes, fewer delays and a better use of time and materials. Lower costs, in turn, lead to
productivity improvements.

*Deming has summarized his philosophy in what he calls "A System of Profound -
Knowledge."

Profound Knowledge

Profound knowledge consists of four parts

(1) appreciation for a system,

(2) some knowledge of the theory of variation,

(3) theory of knowledge,

(4) psychology,

Deming believes that the aim of any system is for everybody- stockholders, employees,
customers, community, the environment-to gain over the long term.

PERSPECTIVES ON PROFOUND KNOWLEDGE

Little in Deming's system of Profound Knowledge is original. The concept of common and
special causes of variation was developed by Walter Shewhart in the 1920s.
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- businesses should not exist only for profit; their true
purpose should be to serve their customers and employees.
2. Learn the New Philosophy- old methods of management create mistrust, fear, and
anxiety with a focus on “satisficing” rather than on “optimizing”. Eliminating defects
is not good enough.
3. Understand Inspection- routine inspection acknowledges defects but does not add
value to the product. Instead, it encourages defects because “someone else” catches
and fixes the problems.
4. End Price Tag Decisions- purchasing decisions traditionally have been driven by cost
through competitive bidding, not by quality.
 Deming urges businesses to establish long-term relationships with a few
suppliers, leading to loyalty and enhanced opportunities for improvement.
5. Improve Constantly- improved design results from understanding customer needs and
from continual market surveys and other sources of feedback.
6. Institute Training- all employees should be trained in statistical tools for quality
problems and continuous improvement.
7. Institute Leadership- the job of management is leadership and guidance, not
supervision and work direction.
8. Drive Out Fear- fear encourages short-term, selfish thinking, not long-term
improvement means of achieving a company’s goals.
9. Optimize Team Efforts- barriers between individuals and departments lead to poor
quality, because “customers” do not receive what they need from their suppliers.
Teamwork is an important means of achieving a company’s goal.
10. Eliminate Exhortations- motivation can be better achieved through trust and
leadership than slogans.
11. Eliminate Quotas and MBO- numerical quotas reflect short-term perspectives and do
not encourage long-term improvement, particularly if rewards or performance
appraisals are tied to meeting quotas.
12. Remove Barriers to Pride in Workmanship- the Taylor system has promulgated the
view of workers as a “commodity”.
Deming believed that one of the biggest barriers to pride in workmanship is
performance appraisal.
  Destroy teamwork by promoting competition among employees for limited
sources.
 Foster mediocrity since objectives typically are driven by numbers and what
the boss wants.
 Focus on short-term results and discourage risk-taking; and
 Are not focus on serving the customers
Deming suggests that there are three categories of performance; the majority who
works within the system, those outside the system on the superior side, and those outside
the system on the inferior side.
13. Institute Education- “Training” in number 6 refers to job skills; education refers to
self-development. Investing in people is a powerful motivation method.
14. Take Action- the TQM philosophy is a major cultural change, and many firms find it
difficult.

The Juran Philosophy

Juran advocates the accounting and analysis of quality costs to focus attention on quality
problems.
Juran defines quality as “Fitness for use”. This is broken down into four categories; quality
of design, quality of conformance, availability, and field service.

Juran views the pursuit of quality on two levels;

 The mission of the firm as a whole is to achieve high product quality.
 The mission of each individual department in the firm is to achieve high production
quality.

The Crosby Philosophy

- Philip B. Crosby, who passed away in 2001, was cooperative vice president for
quality at International Telephone and Telegraph (ITT) for 14 years after working his
way up from line inspector.
- After living ITT, he established Philip Crosby Associates in 1979 to develop and offer
training programs.
- His first book, Quality is Free, sold about one million copies, and is credited with
bringing quality to the attention of top American executives.
- The essence of Crosby’s quality philosophy is embodied in what he calls the
Absolutes of Quality Management are as follows:
 Quality means conformance to requirements, not elegance.
 There is no such thing as a quality problem.
 There is no such thing as the economics of quality: it is cheaper to do the job
right the first time.
 The only performance measurement is the cost of quality.
 The only performance standard is Zero Defects.

Zero Defects is a performance standard. The theme of ZD is to do it right the first time.
FRAMEWORKS FOR QUALITY AND PERFORMANCE EXCELLENCE

- None of these philosophies, however, provide a framework for how to implement total
quality within an organization or a means to assessing total quality efforts relative to one’s
peers or world-class companies.
The two most prominent frameworks for quality that have had worldwide influence are ISO
9000 and the Malcolm Baldrige Quality Award Criteria.

ISO 9000:2000
-The International Organization for Standardization, founded in 1946 and composed of
representatives from the national standards bodies of 91 nations, adopted a series of written
quality standards in 1987, which were revised in 1994, and again (significantly) in 2000.
- ISO 9000 defines quality system standards, based on the premise that certain generic
characteristics of management practices can be standardized, and that a well-organized, well-
implemented, and carefully managed quality system. The standards were created to meet five
objectives:

1. Achieve, maintain, and seek to continuously improve product quality in relation to

requirements.
2. Improve the quality of operations to continually meet customers’ and stakeholders’
stated and implied needs.
3. Provide confidence to internal management and other employees that quality
requirements are being fulfilled and that improvement is taking place.
4. Provide confidence to customers and other stakeholders that quality requirements are
being achieved in the delivered product.
5. Provide confidence that the quality system requirements are fulfilled

Structure of the ISO 9000 Standards

The ISO 9000:2000 standards consist of three documents:
 ISO 9000 –Fundamentals and vocabulary
 ISO 9001 –Requirements
 ISO 9004 –Guidance for performance improvement

Factors Leading to ISO 9000:2000

- ISO 9000:2000 is a response to the widespread dissatisfaction that resulted from the old
standards. The new standards have a completely new structure, based on eight 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
Principle 7: Factual Approach to Decision Making
Principle 8: Mutually Beneficial Supplier Relationships
With the underlying philosophy, the ISO 9000:2000 revision aligns much closer to the spirit
of TQ.

Implementation and Registration

- Recertification is required every three years. Individual sites –not the entire companies –
must achieve registration individually. All cost are borne by the applicant, so the process can
be quite expensive. A registration audit may cost anywhere from $10,000 to over $40,000
while the internal cost for documentation and training may exceed $100,000. As of December
1, 2000, over 400,000 organizations around the world have received registration.

Perspective on ISO 9000:2000

- ISO 9000 provides a set of good basic practices for initiating a quality system and is an
excellent starting point for companies with no formal quality assurance program. In fact, it
provides detailed guidance on process and product control.
- Using ISO 9000 as a basis for a quality system can improve productivity, decrease costs,
and increase customer satisfaction.

The Malcolm Baldrige National Quality Award

The Malcolm Baldrige National Quality Award (MBNQA) has been one of the most
powerful catalysts of total quality in the United States, and indeed, throughout the world.
world. More importantly, the Award's Criteria for Performance.

-Recognizing that US. productivity was declining President Reagan signed legislation
mandating a national study/conference on productivity in October 1982. The American
Productivity and Quality Center (formerly the American Productivity Center) sponsored
seven computer networking conferences in 1983 to prepare for an upcoming White House
conference on productivity.

-The Baldrige Award was signed into law (Public Law 100-107) on August 20, 1987. The
award is named after President Reagan's Secretary of Commerce who was killed in an
accident shortly before the Senate acted on the legislation.

The purposes of the award are to:

 help stimulate American companies to improve quality and productivity for the pride
of recognition while obtaining a competitive edge through, increased profits,
 recognize the achievements of those companies that improve the quality of their
goods and services and provide an example to others;
 establish guidelines and criteria that can be used by business, industrial,
governmental, and other enterprises in evaluating their own quality improvement
efforts; and
 provide specific guidance for other American enterprises that wish to learn how to
manage for high quality by making available detailed information on how winning
enterprises were able to change their cultures and achieve eminence.
 -The Baldrige Award recognizes U.S. companies that excel in quality management
practice and performance. The Baldrige Award does not exist simply to recognize product
excellence, nor does it exist for the purpose of "winning." Its principal focus is on
promoting high-performance management practices that lead to customer satisfaction and
business results.

The Criteria for Performance Excellence

Criteria for Performance Excellence

- designed to encourage companies to enhance their competitiveness through an aligned
approach to organizational performance management.

The criteria consist of seven categories which are:

1. Leadership
- examines how an organization’s senior leaders address values, direction, and performance
expectations.
2. Strategic Planning
- examines how an organization develops strategic objectives and action plans.
3. Customer and Market Focus
- examines how an organization determines requirements, expectations, and preferences of
customers and markets.
4. Information and Analysis
- examines an organization's information management and performance measurement
systems.
5. Human Resource Focus
- examines how an organization motivates and enables employees to develop and utilize
their full potential.
6. Process Management
- examines the key aspects of an organization's process management.
7. Business Results
- examines an organization's performance and improvement in key business areas.

The Baldrige Award Evaluation Process

The Baldrige evaluation process is rigorous. In the first stage, each application is thoroughly
reviewed. Examiners evaluate the applicant's response to each examination item, listing
major "strengths" and opportunities for improvement" relative to the criteria.

*Organizational Profile
- helps the examiners to understand the context of the organization.
*Approach
- refers to the methods the company uses to achieve the requirements addressed in each
category
*Deployment
- refers to the extent to which the approaches are applied to all requirements of the item.
*Results
- refers to the outcomes and effects in achieving the purposes given in the item.

Juran advocates a never-ending spiral of activities that includes market research, product
development, design, planning for manufacture, purchasing, production process control, and
inspection and testing, followed by customer feedback.

Juran’s prescription focus on three major aspects of quality called Quality Trilogy (a
registered trademark of the Juran Institute)
 Quality Planning
 Quality Control
 Quality Improvement

Training in managerial quality-oriented concepts as well as training in the tools for quality
improvement, cost reduction, data collection, and analysis is one of the most important
components of Juran’s Philosophy.

Using the Baldrige Criteria

-Many small businesses (defined as those with 500 or fewer employees) believe that Baldrige
criteria are too difficult to apply to their organizations because they cannot afford to
implement the same types of practices as large companies.
- Many organizations are using the award criteria to evaluate their own quality programs, set
up and implement quality initiatives, communicate better suppliers and partners, and for
education and training, even if they have no intention to apply for the award.
The Baldrige Criteria and the Deming Philosophy
- It is no secret that W. Edwards, Deming was not an advocate of the Baldrige Award. The
competitive nature of the award is fundamentally at odds with Deming’s teachings. However,
many of Deming’s principles are reflected directly or in spirit within the criteria. In fact,
Zytec implemented its total quality system around Deming’s 14 points and received a
Baldrige Award. Specific portions of the Baldrige criteria that support each of Deming’s 14
points are:

1. Statement of Purpose 8. Drive out Fear and Innovate

2. Learn the New Philosophy 9. Optimized the Efforts of Teams and Staff

3. Understand Inspection 10. Eliminate Exhortations

4. End Price Tag Decisions 11. Eliminate Qoutas and MB; Institute
Improvement; and Understand Processes
5. Improve Constant
12. Remove Barriers
6. Institute Training
13. Encourage Education
7. Teach and Institute Leadership
14. Take Action
International Quality Award Programs
- A focus on total quality has permeated organizations throughout the world. Numerous
countries and regions of the world have established awards and award criteria. Many other
award programs are similar in nature to the Baldrige criteria.

The Deming Prize

- The Deming Application Prize was instituted in 1951 by the Union of Japanese Scientists
and Engineers (JUSE) in recognition and application of W. Edwards Deming’s achievements
in statistical quality control and his friendship with the Japanese people. The Deming Prize
has several categories, including prizes for individuals, factories, and small companies, and
the Deming application prize, which is an annual award presented to a company or a division
of a company that has achieved distinctive performance improvements through the
application of Companywide Quality Control (CWQC).
The judging criteria consist of a checklist of 10 Major Categories:
1. Policies
2. The organization and its operations
3. Education and dissemination
4. Information gathering
5. Communication and its utilization
6. Analysis
7. Standardization
8. Control/management
9. Quality assurance
10. Effects and future plans
European Quality Award
- In October 1991, the European Foundation for Quality Management (EFQM) in
partnership with the European Commission and the European Organization for
Quality announced the creation of the European Quality Award.
Canadian Awards for Business Excellence
- Canada’s National Quality Institute (NQI) recognizes Canada’s foremost achievers of
excellence through the prestigious Canada Awards for Excellence.
- The Canadian Award for Business Excellence quality criteria are similar in structure
to the Baldrige Award criteria, with some key differences. The Major Categories and
items within each Category are:

1. Leadership
2. Customer Focus
3. Planning for Improvement
4. People Focus
5. Process Optimization
6. Supplier Focus
Australian Business Excellence Awards
- The Australian Quality Awards were developed independently from the Baldrige
Awards in 1988. The awards are administered by the Australian Quality Awards
Foundation, a subsidiary of the Australian Quality Council.

Four levels of awards

1. The Business Improvement Level
2. The Award Level
3. The Award Gold Level
4. The Australian Business Excellence Prize
The Reservation Clerk
- Mary Matthews works for an airline as a reservation clerk. Her duties include
answering the telephone, making reservations, and providing information to
customers. Her supervisor told her to be courteous and not to rush callers.