TOTAL QUALITY MANAGEMENT

TQM
TQM is the integration of all functions and processes within an organization in order to achieve continuous improvement of the quality of goods and services. The goal is customer satisfaction.

Commonality of Themes of Quality Gurus

Inspection is never the answer to quality improvement, nor is policing.

DIFINITION OF QUALITY

The concept and vocabulary of quality are elusive. Different people interpret quality differently. Few can define quality in measurable terms that can be proved operationalized. When asked what differentiates their product or service; The banker will answer service The healthcare worker will answer quality health care The hotel employee will answer customer satisfaction The manufacturer will simply answer quality product

Five Approaches of Defining Quality

Harvard professor David Garvin, in his book Managing Quality summarized five principal approaches to define quality. Transcendent Product based User based Manufacturing based Value based

Transcendental view

Those who hold the transcendental view would say I cant define it, but I know it when I see it Advertisers are fond of promoting products in these terms. Where shopping is a pleasure (supermarket). We love to fly and it shows" (airline). Television and print media are awash with such indefinable claims and therein lies the problem: Quality is difficult to define or to operationalize. It thus becomes elusive when using the approach as basis for competitive advantage. Moreover, the functions of design, production and service may find it difficult to use the definition as a basis for quality management.

PRODUCT BASED

Quality is viewed as a quantifiable or measurable characteristic or attribute. For example durability or reliability can be measured and the engineer can design to that benchmark. Quality is determined objectively. Although this approach has many benefits, it has limitation as well. Where quality is based on individual taste or preference, the benchmark for measurement may be misleading.

USER BASED
It is based on idea that quality is an individual matter and products that best satisfy their preferences are those with the highest quality. This is rational approach but leads to two problems; Consumer preference vary widely and it is difficult to aggregate these preferences into products with wide appeal. This leads to the choice between a niche strategy or a market aggregation approach which tries to identify those product attributes that meet the needs of the largest number of consumers. Another problem concerns the answer to the question Are quality and customer satisfaction the same? the answer is probably not. One may admit that a Lincoln continental has many quality attribute, but satisfaction may be better achieved with an Escort.

MANUFACTURING BASED

Manufacturing-based definitions are concerned primarily with engineering and manufacturing practices and use the universal definition of conformance to requirements. Requirements or specifications are established by design and any deviation implies a reduction in quality. The concept applies to services as well as product. Excellence in quality is not necessarily in the eye of the beholder but rather in the standards set by the organization. This approach has the serious weakness. The consumers perception of quality is equated with conformance and hence is internally focused.

Value Based

It is defined in term of costs and prices as well as number of other attributes. Thus, the consumers purchased decision is based on quality at an acceptable price. This approach is reflected in the popular Consumer Reports magazine which ranks products and services based on two criteria: Quality and Value. The highest quality is not usually the best value. That designation is assigned to the best- buy product or service.

System MANAGEMENT OF PROCESS QUALITY

Driver
SENIOR EXECUTIVE LEADERSHIP

HUMAN RESOURCE DEVELOPMENT AND MANAGEMENT

CUSTOMER FOCUS AND SATISFACTION

STRATEGIC QUALITY PLANNING

QUALITY AND OPERATIONAL RESULTS

System Approach for TQM

Characteristics of TQM Leader

Visible, Committed and Knowledgeable A Missionary Zeal Aggressive Targets Strong Drivers Communication of Values Organization Customers Contact

HRM

Five Principles are: Quality Work the First Time Focus on the Customer Strategic Holistic Approach to Improvement CI as a Way of Life Mutual Respect and Teamwork

Customer Satisfaction Three Part System

Company Operations (Processes)

Customer Satisfaction

Indicators for Customer Satisfaction

Frontline empowerment Excellent hiring, training, attitude and morale for front line employees Proactive customer service system Proactive management of relationship with customers Use of all listening posts Quality requirements of market segment Commitment to customers Understanding customer requirements Service standards meeting customers requirements

Quality Costs

COST OF QUALITY IS THE COST OF NON QUALITY

1: 10:100 Rule A stitch in time saves nine

Types of Quality Costs The cost of quality is generally classified into four categories
1. 2. 3. 4.

Cost of Prevention Cost of Appraisal Cost of Internal Failure Cost of External Failure

Quality Costs
Cost of Prevention Prevention costs include those activities which remove and prevent defects from occurring in the production process. Included are such activities as quality planning, production reviews, training, and engineering analysis, which are incurred to ensure that poor quality is not produced. Appraisal Those costs incurred to identify poor quality products after they occur but before shipment to customers. e.g. Inspection activity.

Quality Costs

Internal Failure Those incurred during the production process. Include such items as machine downtime, poor quality materials, scrap, and rework. External Failure Those incurred after the product is shipped. External failure costs include returns and allowances, warranty costs, and hidden costs of customer dissatisfaction and lost market share.

Benefits of TQM

Greater customer loyalty Market share improvement Higher stock prices Reduced service calls Higher prices Greater productivity

TQM

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

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

TQM

Total Quality Management means that the organization's culture is defined by and supports the constant attainment of customer satisfaction through an integrated system of tools, techniques, and training. This involves the continuous improvement of organizational processes, resulting in high quality products and services.

Goal of TQM

Do the right things right the first time, every time.

(1) total client satisfaction through quality products and services; and (2) continuous improvements to

processes, systems, people, suppliers, partners, products, and services

Traditional view:

Quality cannot be improved without significant losses in productivity. Improved quality leads to improved productivity.

TQM view:

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

TQM and CI

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.

Concept of Quality

A Customers impression of quality begins with the initial contact with the company and continues through the life of the product. Customers look to the total package - sales, service during the sale, packaging, deliver, and service after the sale. Quality extends to how the receptionist answers the phone, how managers treat subordinates, how courteous sales and repair people are, and how the product is serviced after the sale. All departments of the company must strive to improve the quality of their operations.

The TQM System

Continuous Improvement

Principles

Customer Focus

Process Improvement

Total Involvement

Elements

Leadership Education and Training Supportive structure Communications Reward and recognition Measurement

Conclusion
Quality begets customers and customers beget quality.