total quality management-tqm. benefits of quality higher customer satisfaction reliable...

Total Quality Management-TQM

Benefits of Quality

Higher customer satisfaction Reliable products/services Better efficiency of operations More productivity & profit Better morale of work force Less wastage costs Less Inspection costs More market share Spread of happiness & prosperity

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Reasons to Begin NowThe reasons to begin establishing quality

improvement processes are several. For Management:

Provides an invaluable problem-solving tool.

Dispels negative attitudes. Employees gain a sense of participation. Increases efficiency and productivity. Reduces turnover rate, tardiness, costs,

errors, and scrap & rework. Improves communications within and

among all departments. Builds loyalty to the company.

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Reasons to Begin Now For employee:

Provides opportunity for personal growth and development.

Increases innovation. Encourages decision-making at the most

appropriate level. Increases motivation and acceptance of new

ideas Increases job satisfaction. Recognizes employees for their talents. Develops mutual respect among employees,

management and customers. Promotes teamwork.

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Total Quality Management (TQM) Programs

Motorola - Six Sigma

Xerox - Leadership through Quality

Intel - (PDQ)2 or Perfect Design

Quality

Hewlett-Packard - Total Quality Control

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What is Quality?

“Meeting or exceeding customer expectations”Quality is “fitness for use”

(Joseph Juran)Quality is “conformance to requirements”

(Philip B. Crosby)Quality of a product or services is its ability to satisfy the needs and expectations of the customerWebster’s Dictionary

degree of excellence of a thingAmerican Society for Quality

totality of features and characteristics that satisfy needs6

Meaning of Quality:Producer’s Perspective

Quality of Conformance Making sure a product or service is

produced according to design If new tires do not conform to specifications, they

wobble If a hotel room is not clean when a guest checks

in, the hotel is not functioning according to specifications of its design

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The 9 Dimensions of Product Quality

Performance Features Conformance Reliability Durability Service Aesthetics – of product Safety Perceptions

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Dimensions of Quality:Manufactured Products

Performance basic operating characteristics of a product;

how well a car is handled or its gas mileage Features

“extra” items added to basic features, such as a stereo CD or a leather interior in a car

Reliability probability that a product will operate

properly within an expected time frame; that is, a TV will work without repair for about seven years

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Conformance degree to which a product meets pre–established

standards

Durability how long product lasts before replacement

Serviceability ease of getting repairs, speed of repairs, courtesy

and competence of repair person

Dimensions of Quality:Manufactured Products (cont.)

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Aesthetics how a product looks, feels, sounds, smells, or

tastes

Safety assurance that customer will not suffer injury

or harm from a product; an especially important consideration for automobiles

Perceptions subjective perceptions based on brand name,

advertising, and the like

Dimensions of Quality:Manufactured Products (cont.)

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Dimensions of Quality Examples

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The 7 Dimensions of Service Quality Time and Timeliness Completeness Courtesy Consistency Accessibility and convenience Accuracy Responsiveness

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Dimensions of Quality:Service

Time and Timeliness How long must a customer wait for service,

and is it completed on time? Is an overnight package delivered overnight?

Completeness Is everything customer asked for provided? Is a mail order from a catalogue company

complete when delivered?

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Dimensions of Quality:Service (cont.)

Courtesy How are customers treated by employees? Are catalogue phone operators nice and are their

voices pleasant?

Consistency Is the same level of service provided to each

customer each time? Is your newspaper delivered on time every morning?

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Accessibility and convenience How easy is it to obtain service? Does a service representative answer you calls

quickly? Accuracy

Is the service performed right every time? Is your bank or credit card statement correct every

month? Responsiveness

How well does the company react to unusual situations?

How well is a telephone operator able to respond to a customer’s questions?

Dimensions of Quality:Service (cont.)

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TQM

Total quality management refers to systematic policies, methods, and procedures used to ensure that goods and services are produced with appropriate levels of quality to meet the needs of customers.

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The TQM Organization

Quality infused Personnel and Processes.

TM

MM

LM

Other Staff

Q

U

A

L

IT

Y

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BASIC PRINCIPLES OF TQM

Approach Management Led

Scope Company Wide

Scale Everyone is responsible for Quality

Philosophy Prevention not Detection

Standard Right First Time

Control Cost of Quality

Theme On going Improvement

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Evolution of Quality Management

Inspection

Quality Control

Quality Assurance

TQM

Salvage, sorting, grading, blending, corrective actions, identify sources of non-conformance Develop quality manual, process performance data, self-inspection, product testing, basic quality planning, use of basic statistics, paperwork control.

Quality systems development, advanced quality planning, comprehensive quality manuals, use of quality costs, involvement of non-production operations, failure mode and effects analysis, SPC.

Policy deployment, involve supplier & customers, involve all operations, process management, performance measurement, teamwork, employee involvement. 20

Modern and traditional approaches to quality

management Traditional approach emphasises quality control

Quality Control involves monitoring specific project results to determine if they comply with relevant quality standards, and identifying ways to eliminate causes of unsatisfactory results

Modern approach emphasises Quality is in-built. Quality is in built into the product at every

stage from conceiving –specification & design stages to prototyping –testing and manufacturing stages.

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Customer satisfaction

TQM Wheel

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TQM wheel

Top management commitment Customer satisfaction Employee involvement Continuous improvement Product design Process design Benchmarking Purchasing Problem solving tools

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Top ManagementCommitment and Involvement

Support must be genuine or TQM will be seen as just another passing fad

Fundamental changes must occur in the culture of the organization

Such fundamental changes are not easy, but are impossible without top management’s commitment and involvement

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Role of TQM leaders Ensure that the team’s decision is in

harmony with the quality statements of the organisation

Senior TQM leaders must read TQM literature and attend conferences to be aware of TQM tools and methods

Senior managers must take part in award and recognition ceremonies for celebrating the quality successes of the organisation

They should coach others and teaching in TQM seminars

Senior managers must liaise with internal, external customers and suppliers through visits, focus groups, surveys

They must live and communicate TQM. 25

TQM wheel

Top management commitment Customer satisfaction Employee involvement Continuous improvement Product design Process design Benchmarking Purchasing Problem solving tools

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Customer types

External and Internal customers External – current, prospective and lost

customers Internal – Every person in a process is a

customer of the previous operation(applies to design, manufacturing, sales, supplies etc.). [Each worker should see that the quality meets expectations of the next person in the supplier-to-customer chain ]

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Internal customer/Supplier relationships

Questions asked by people to their internal customersWhat do you need from me?What do you do with my output?Are there any gaps between what you

need and what you get? Good team-work and inter-departmental

harmony is required.

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Customer satisfaction

Customer is the Boss or ’King’ Customer dictates the market trends and

direction Customer not only has needs to be

supplied (basic performance functions) Also he/she ‘wants what he

wants!’(additional features satisfy him and influence his purchase decision)

Suppliers and Manufacturers have to closely follow at the heel of the customer.

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Customer Care Keep promises to customers Return customer calls promptly Allot staff to handle customer problems Treat customers with courtesy, respect

and professionalism always Evaluate customer satisfaction regularly Search for customer-related

improvements continuously Deliver Products/Service promptly and

efficiently Give every customer complete and

personal attention.30

Customer Care Maintain a neat and clean

appearance of self and work-place, at all times

Review and implement customer feedback and suggestions into current procedures when needed

Training and education to enhance job performance and commitment to customer care

Treat every customer as we would treat ourselves.

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TQM wheel

Top management commitment Customer satisfaction Employee involvement Continuous improvement Product design Process design Benchmarking Purchasing Problem solving tools

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Employee Involvement

One of the important elements of TQM is employee involvement.

Quality at the source is a philosophy whereby defects are caught and corrected where they were created.

Teams (quality circles): Small groups of people who have a common purpose, set their own performance goals and approaches, and hold themselves accountable for success.

Employee empowerment is an approach to teamwork that moves responsibility for decisions further down the organizational chart to the level of the employee actually doing the job.

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Quality Improvement and Role of Employees

Participative problem solving employees involved in

quality management every employee has

undergone extensive training to provide quality service to Disney’s guests

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Employee training

Which employees are trained first?

The successful TQM company provides training to employees in the order illustrated in the list below:

Upper Management

Remaining Management

In-House Trainers & Facilitators

Front-Line Supervisors

Non-Supervisory Employees

Training of Subcontractors & Suppliers

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Employee training

Training should be provided in the following areas:Team building and working in teamsStatistical techniquesAnalytic techniquesData collectionInterviewingCommunication skills

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TQM wheel

Top management commitment Customer satisfaction Employee involvement Continuous improvement Product design Process design Benchmarking Purchasing Problem solving tools

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Continuous Process Improvement

INPUTMaterialsMoneyData,etc.

PROCESSActivities that That takes inputs andTransforms and addvalue to create outputs

OUTPUTInfornmationDataProductService,etc.

CONDITIONS

Customer

FEEDBACK

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Continuous Improvement Continuous improvement is the philosophy of

continually seeking ways to improve processes based on a Japanese concept called kaizen.

1. Train employees in the methods of statistical process control (SPC) and other tools.

2. Make SPC methods a normal aspect of operations.

3. Build work teams and encourage employee involvement.

4. Utilize problem-solving tools within the work teams.

5. Develop a sense of operator ownership in the process.

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Five ways to Improve a Process

Reduce resources Reduce errors Meet or exceed expectations of

internal/external customers Make the process safer Make the process more satisfying to

the person doing it

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Deming Wheel: PDCA Cycle

1. PlanIdentify problem and develop plan for improvement.

2. DoImplement plan on a test basis.

3. Study/CheckAssess plan; is it working?

4. ActInstitutionalize improvement; continue cycle.

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Use for continuous improvement

TQM wheel

Top management commitment Customer satisfaction Employee involvement Continuous improvement Product design Process design Benchmarking Purchasing Problem solving tools

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Designing Products for Quality

Designing for Robustness

Product will perform as intended even if undesirable conditions occur in production or in field.

Designing for Manufacturability (DFM)

Products typically have fewer parts and can be assembled quickly, easily, and error-free.

Designing for Reliability

Manufacturing parts to closer tolerances. Using redundant components where necessary.

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Designing for Reliability

Each part of a product is designed for a given level of component reliability

Component reliability is defined as “the probability that a part will not fail in a given time period or number of trials under ordinary conditions of use”

3 common measures of component reliability are: Reliability (CR) Failure Rates (FR and FRn) Mean Time Between Failures (MTBF)

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TQM wheel

Top management commitment Customer satisfaction Employee involvement Continuous improvement Product design Process design Benchmarking Purchasing Problem solving tools

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Designing and ControllingProduction Processes The responsibility of producing products of

high quality rests with the workers producing the product

Two types of factors introduce variation in production processesControllable factors - can be reduced by

workers and managementUncontrollable factors - reduced only by

redesigning or replacing existing processes

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Statistical Process Control (SPC)

SPC is a statistics-based methodology for determining when a process is moving “out of control.”

All processes have variation in output. Some of the variation is inherent in the process

(common). Some of the variation is due to assignable

(special) causes. SPC is aimed at discovering variation due to

assignable causes and correcting those causes.

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Control Charts

Quality teams use Control Charts to assess process stability.

Control Charts are a simple but highly effective tool for monitoring and improving process performance over time because they help Six Sigma teams to observe and analyze variation.

The three basic components of any control chart are a centerline, upper and lower statistically determined control limits, and performance data plotted over time.

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TQM wheel

Top management commitment Customer satisfaction Employee involvement Continuous improvement Product design Process design Purchasing Benchmarking Problem solving tools

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Purchasing

Supplier should be the part of the customer’s TQM program

We need to make sure that our suppliers supply us non-defective products on time

The relationship between the supplier and the customer should be long-lasting and durable

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TQM wheel

Top management commitment Customer satisfaction Employee involvement Continuous improvement Product design Process design Purchasing Benchmarking Problem solving tools

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Benchmarking Benchmarking involves comparing an

organization's processes with the best practices to be found. Benchmarking is used for a variety of purposes, including:Comparing an organization's processes

with the best organization's processes.Comparing an organization's products

and services with those of other organizations.

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Benchmarking (cont.)

Comparing a department’s processses with those of other departments (internal benchmarking)

Identifying the best practices to implement.

Projecting trends in order to be able to respond proactively to future challenges and opportunities.

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Quality Gurus W. Edwards Deming

Assisted Japan in improving productivity and quality after World War II

In 1951 Japan established Deming Prize Introduced Japanese companies to the

Plan-Do-Check-Act (PDCA) cycle (developed by Shewart)

Developed 14 Points for managers

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Deming’s 14 Points for Managers

1. Create constancy of purpose toward product quality to achieve organizational goals

2. Refuse to allow commonly accepted levels of poor quality

3. Stop depending on inspection to achieve quality

4. Use fewer suppliers, selected based on quality and dependability instead of price

5. Instill programs for continuous improvement of costs, quality, service, and productivity

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Deming’s 14 Points for Managers

6. Train all employees on quality concepts7. Focus supervision on helping people do a

better job8. Eliminate fear, create trust, and encourage two-

way communications between workers and management

9. Eliminate barriers between departments and encourage joint problem-solving

10. Eliminate the use of numerical goals and slogans to make workers work harder

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Deming’s 14 Points for Managers

11. Use statistical methods for continuous improvement of quality and productivity instead of numer. quotas

12. Remove barriers to pride of workmanship

13. Encourage education and self-improvement

14. Clearly define management’s permanent commitment to quality and productivity

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Cost of Quality Cost of Achieving Good Quality

Prevention costs• costs incurred during product design

Appraisal costs• costs of measuring, testing, and analyzing

Cost of Poor Quality Internal failure costs

• include scrap, rework, process failure, downtime, and price reductions

External failure costs• include complaints, returns, warranty claims,

liability, and lost sales

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Prevention Costs Quality planning

costs costs of developing

and implementing quality management program

Product-design costs costs of designing

products with quality characteristics

Process costs costs expended to

make sure productive process conforms to quality specifications

Training costs costs of developing

and putting on quality training programs for employees and management

Information costs costs of acquiring and

maintaining data related to quality, and development of reports on quality performance

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Appraisal Costs

Inspection and testingcosts of testing and inspecting materials,

parts, and product at various stages and at the end of a process

Test equipment costscosts of maintaining equipment used in

testing quality characteristics of products

Operator costscosts of time spent by operators to gar

data for testing product quality, to make equipment adjustments to maintain quality, and to stop work to assess quality 60

Internal Failure Costs

Scrap costs costs of poor-quality

products that must be discarded, including labor, material, and indirect costs

Rework costs costs of fixing defective

products to conform to quality specifications

Process failure costs costs of determining why

production process is producing poor-quality products

Process downtime costs costs of shutting down

productive process to fix problem

Price-downgrading costs costs of discounting

poor-quality products—that is, selling products as “seconds”

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External Failure Costs

Customer complaint costs costs of investigating and

satisfactorily responding to a customer complaint resulting from a poor-quality product

Product return costs costs of handling and replacing

poor-quality products returned by customer

Warranty claims costs costs of complying with

product warranties

Product liability costs litigation costs

resulting from product liability and customer injury

Lost sales costs costs incurred

because customers are dissatisfied with poor quality products and do not make additional purchases

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Quality Costs

Operation costs~70%

Quality costs~20-30%

Profits

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