Department of Business Administration

JUC-Male Branch

Total Quality Management

Dr. Ishaq Kalanther, PhD

Assistant Professor of Business Administration

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 Chapter 2

Foundations of
Quality Management

MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 10E, © 2017 Cengage Publishing,
Quality Culture at The Ritz-Carlton
Hotel Company
 “Ladies and Gentlemen Serving Ladies and
Gentlemen”— anticipating the wishes and needs of
the guests, resolving their problems, and exhibiting
genuinely caring conduct toward guests and each
other.
 Create a “Skilled and Empowered Work Force
Operating with Pride and Joy.”

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Quality Profile – Texas Nameplate Company,
Inc.
“Fear is useless; what is needed is trust.”
A continuous learning environment that enables
empowered teams of workers to take charge of
processes and to deliver products and services with a
“star quality.”
Reduced its defects from 3.65 percent to about 1
percent in four years.
satisfaction rates in five areas employees say are the
most important exceed national norms by a significant
margin.
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Quality Profile: MEDRAD-USA
A culture of high performance.
Systematic approaches to capture customers’
expectations and preferences.
The Customer Complaint Process focuses on timely
response and successful resolution of customer issues
MEDRAD’s overall Net Promoter (NP) scores (a loyalty
metric defined by the level of repeat sales and
referrals) have been consistently 60 percent or higher,
compared to the 50 percent or higher marks for other
organizations over the same time periods.

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Leaders in the Quality Revolution
W. Edwards Deming
Joseph M. Juran
Philip B. Crosby

Armand V. Feigenbaum
Kaoru Ishikawa

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 Deming Philosophy
The Deming philosophy focuses on
continual improvements in product
and service quality by reducing
uncertainty and variability in design,
manufacturing, and service
processes, driven by the leadership of
top management.

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Deming’s 14 Points (Abridged) (1 of 2)
1. Create and publish a company mission
statement and commit to it.
2. Learn the new philosophy.
3. Understand the purpose of inspection.
4. End business practices driven by price alone.
5. Constantly improve system of production
and service.
6. Institute training.
7. Teach and institute leadership.
8. Drive out fear and create trust.

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 Deming’s 14 Points (2 of 2)

9. Optimize team and individual efforts.

10. Eliminate slogan, exhortations and target for
work force. (Long talk and complicated advice)
11. Eliminate numerical quotas and Management by
Objectives (M.B.O). Focus on improvement.
12. Remove barriers to pride in workmanship
(Pleasure/Satisfaction from achievement)
13. Encourage education and self-improvement.
14. Take action to accomplish the transformation.
www.deming.org

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 Deming’s System of Profound
Knowledge (Deep knowledge)
Appreciation for a system
Understanding variation
Theory of knowledge
Psychology

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 Systems
Most organizational processes are
cross-functional (All departments involvement)
Parts of a system must work together
Every system must have a purpose
Management must optimize the
system as a whole

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 Variation
Many sources of uncontrollable variation
exist in any process
Excessive variation results in product
failures, unhappy customers, and
unnecessary costs
Statistical methods can be used to
identify and quantify variation to help
understand it and lead to improvements

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 Theory of Knowledge
Knowledge is not possible without
theory
Experience alone does not establish a
theory, it only describes
Theory shows cause-and-effect
relationships that can be used for
prediction

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 Psychology
People are motivated intrinsically and
extrinsically; intrinsic motivation is the
most powerful
Fear is demotivating
Managers should develop pride and joy
in work

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 Juran Philosophy
Juran proposed a simple definition of quality:
“fitness for use.” This definition of quality
suggests that it should be viewed from both
external and internal perspectives; that is, quality
is related to:
“(1) product performance that results in
customer satisfaction;
 (2) freedom from product deficiencies, which
avoids customer dissatisfaction.”

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Juran’s Quality Trilogy
Quality planning
Quality control
Quality improvement

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Juran’s Breakthrough Sequence
Proof of the Need
Project Identification
Organization for Breakthrough (steps forward)
Diagnostic Journey
Remedial Journey
Holding the Gains

These steps represent a common sense sequence of discovery,

organization, diagnosis, corrective action, and control.

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 Crosby Philosophy
“Quality is free . . .
... It’s not a gift, but it is free. What costs
money are the unquality things -- all the
actions that involve not doing jobs right
the first time.”

The cost of poor quality should include all of the things that are involved in not
doing the job right the first time. Crosby coined the term zero defects and stated,
“There is absolutely no reason for having errors or defects in any product or
service.”
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Crosby’s Absolutes of Quality Management
Quality means conformance to requirements
Problems are functional in nature
There is no optimum level of defects
Cost of quality is the only useful measurement
Zero defects is the only performance standard

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 A.V. Feigenbaum
Three Steps to Quality
Quality Leadership, with a strong focus on
planning
Modern Quality Technology, involving the
entire work force
Organizational Commitment, supported by
continuous training and motivation

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 Kaoru Ishikawa
Instrumental in developing Japanese
quality strategy
Influenced participative approaches
involving all workers
Advocated the use of simple visual
tools and statistical techniques

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 Total Quality
Principles – foundation of the
philosophy
Practices – activities by which principles
are implemented
Techniques – tools and approaches to
make practices effective

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Core Quality Management Principles

Customer focus
Teamwork
Continuous improvement

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ISO 9000:2000 Quality Management Principles
Customer Focus
Leadership
Involvement of People
Process Approach
System Approach to Management
Continual Improvement
Factual Approach to Decision Making
Mutually Beneficial Supplier Relationships

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 Customer Focus Practices
Researching and understanding customer needs and
expectations.
Ensuring that the objectives of the organization are linked
to customer needs and expectations.
Communicating customer needs and expectations
throughout the organization.
Measuring customer satisfaction and acting on the results.
Systematically managing customer relationships.
Ensuring a balanced approach between satisfying
customers and other interested parties (such as owners,
employees, suppliers, financiers, local communities and
society as a whole).
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 Leadership Practices
Considering the needs of all interested parties including
customers, owners, employees, suppliers, financiers, local
communities and society as a whole.
Establishing a clear vision of the organization’s future.
Setting challenging goals and targets.
Creating and sustaining shared values, fairness and ethical
role models at all levels of the organization.
Establishing trust and eliminating fear.
Providing people with the required resources, training and
freedom to act with responsibility and accountability.
Inspiring, encouraging, and recognizing people’s
contributions.
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Involvement of People Practices
People understanding the importance of their contribution
and role in the organization.
People identifying constraints to their performance.
People accepting ownership of problems and their
responsibility for solving them.
People evaluating their performance against their personal
goals and objectives.
People actively seeking opportunities to enhance their
competence, knowledge, and experience.
People freely sharing knowledge and experience.
People openly discussing problems and issues.

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 Process Approach Practices
Systematically defining the activities necessary to obtain a
desired result.
Establishing clear responsibility and accountability for
managing key activities.
Analyzing and measuring of the capability of key activities.
Identifying the interfaces of key activities within and
between the functions of the organization.
Focusing on the factors such as resources, methods, and
materials that will improve key activities of the
organization.
Evaluating risks, consequences, and impacts of activities
on customers, suppliers, and other interested parties.
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System Approach to Management Practices
 Structuring a system to achieve the organization’s objectives in the
most effective and efficient way.
 Understanding the interdependencies between the processes of the
system.
 Structured approaches that harmonize and integrate processes.
 Providing a better understanding of the roles and responsibilities
necessary for achieving common objectives and thereby reducing
cross-functional barriers.
 Understanding organizational capabilities and establishing resource
constraints prior to action.
 Targeting and defining how specific activities within a system should
operate.
 Continually improving the system through measurement and
evaluation.
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 Continual Improvement Practices
Employing a consistent organization-wide approach to
continual improvement of the organization’s performance.
Providing people with training in the methods and tools of
continual improvement.
Making continual improvement of products, processes,
and systems an objective for every individual in the
organization.
Establishing goals to guide, and measures to track,
continual improvement.
Recognizing and acknowledging improvements.

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Factual Approach to Decision Making Practices
Ensuring that data and information are
sufficiently accurate and reliable.
Making data accessible to those who need it.
Analyzing data and information using valid
methods.
Making decisions and taking action based on
factual analysis, balanced with experience and
intuition.

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Mutually Beneficial Supplier Relationships Practices
Establishing relationships that balance short-term
gains with long-term considerations.
Pooling of expertise and resources with partners.
Identifying and selecting key suppliers.
Clear and open communication.
Sharing information and future plans.
Establishing joint development and improvement
activities.
Inspiring, encouraging, and recognizing improvements
and achievements by suppliers.
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 TQ Techniques
Statistical methods
Visual aids for problem solving, such as
flowcharts
Techniques specific to quality assurance
activities, such as control charts, measurement
systems analysis, reliability models, and so on.

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 Statistical Thinking
All work occurs in a system of
interconnected processes
Variation exists in all processes
Understanding and reducing variation
are the keys to success

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Problems Created by Variation
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.

The bullwhip effect is a supply chain phenomenon describing how

small fluctuations in demand at the retail level can cause progressively
larger fluctuations in demand at the wholesale, distributor,
manufacturer and raw material supplier levels.

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 Types of Variation
Uncontrollable variation (common
causes) are a natural part of a process
Special (assignable) causes of
variation can be recognized and
controlled
Failure to understand these
differences can increase variation in a
system

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 Two Fundamental Management
Mistakes
1. Treating as a special cause any fault,
complaint, mistake, breakdown, accident or
shortage when it actually is due to common
causes
2. Attributing to common causes any fault,
complaint, mistake, breakdown, accident or
shortage when it actually is due to a special
cause

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 Lessons Learned
Quality is made at the top.
Rigid procedures are not enough.
People are not always the main source of
variability.
Numerical goals are often meaningless.
Inspection is expensive and does not
improve quality.

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 Quality Management Systems (QMS)
Quality Management System (QMS) - a
mechanism for managing and continuously
improving core processes to "achieve maximum
customer satisfaction at the lowest overall cost to
the organization.”
Objectives
Higher product conformity and less variation.
Fewer defects, waste, rework, and human error.
Improved productivity, efficiency, and
effectiveness.
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 Quality Manual
A permanent reference for implementing
and maintaining the system.
Typical records
inspection reports
test data
audit reports
calibration data (to correct and revise measurement)

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 ISO 9000:2000 Objectives
1. Achieve, maintain, and seek to continuously improve product
quality (including services) in relationship 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 quality system requirements are
fulfilled.

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 ISO 9000:2000 Documents
1. ISO 9000:2005—Fundamentals and vocabulary: This
document provides fundamental background information
and establishes definitions of key terms used in the
standards.
2. ISO 9001:2008—Requirements: This is the core document
that provides the specific requirements for a quality
management system to help organizations consistently
provide products that meet customer and other regulatory
requirements.
3. ISO 9004:2009—Guidelines for Performance
Improvements: This document provides guidelines to assist
organizations in improving and sustaining their quality
management systems.
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 ISO 9001:2008
Management Responsibility addresses what top
management must do to ensure an effective quality system.
Resource Management ensures that an organization
provides sufficient people, facilities, and training resources.
Product Realization refers to controlling the
production/service process from receipt of an order or
quote through design, materials procurement,
manufacturing or service delivery, distribution, and
subsequent field service.
Measurement, Analysis, and Improvement focuses on
control procedures for assuring quality in products and
processes, analysis of quality-related data, and correction,
prevention, and improvement planning activities.
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 Benefits of ISO 9000
It provides discipline. The ISO 9001 requirement for audits
forces an organization to review its quality system on a
routine basis.
It contains the basics of a good quality system. These
include understanding customer requirements, ensuring
the ability to meet them, ensuring people resources capable
of doing the work that affects quality, ensuring physical
resources and support services needed to meet product
requirements, and ensuring that problems are identified
and corrected.
It offers a marketing program. ISO certified organizations
can use their status to differentiate themselves in the eyes
of customers.
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 Building an Effective QMS
An effective QMS should
Be integrated with enterprise systems such as ERP,
MES, and SCM, and should focus on actionable
decision making, seeking the root causes of problems,
and improving processes and systems.
Drive the principles of quality management
throughout the organization by fostering effective
practices to implement the principles.

ERP = Enterprise Resource Planning

MES = Manufacturing Execution System
SCM = Supply Chain management
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 Any Question

Thank You

© 2017 Cengage Publishing, ALL RIGHTS RESERVED. May not be scanned, copied or duplicated, or published to a publicly accessible website, in whole or in part.
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