sessions 5 & 6 - the philosophy of tqm

8/3/2019 Sessions 5 & 6 - The Philosophy of Tqm

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THE PHILOSOPHY OF TQM


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In the two sessions today and in a third session,if necessary, we shall be looking at:

The quality philosophies of Deming

Crosby

Juran & Taguchi

The PDSA cycle

The costs of Quality Measuring quality costs &

The Malcolm Balrige Award


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The Quality Philosophies of the Gurus

The common thread in the philosophies ofall the gurus is that quality improvement isa continuous process and is never static.The differences in their philosophies aremore a matter of emphasis rather than of

substance.


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W. Edwards Deming

Our first and best known Guru is W.Edwards Deming. He provides 14 pointsthat form the basis for his theory of qualityimprovement. The PDSA cycle is also hiscontribution to the framework of quality

improvement.

The 14 points of his philosophy are:


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1. Create and Publish the Aims andPurposes of the Organization

2. Learn the new philosophy 3. Understand the purpose of

Inspection

4. Stop awarding business based onPrice alone

5. Improve constantly and forever the

system 6. Institute training

7. Teach and institute Leadership


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8. Drive out Fear, Create Trust and Create aclimate for Innovation

9. Optimize the efforts of Teams, Groups and

Staff areas 10. Eliminate exhortations for the workforce 11. a. Eliminate numerical quotas for the

workforce

b. Eliminate Management by Objective 12. Remove barriers that rob people of pride of

workmanship 13. Encourage education and self-improvement

for everyone 14. Take action to accomplish the

transformation.


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Learn the new philosophy

Organizations must seek never-endingimprovement and refuse to accept non-conformance. Customer satisfaction is

number one priority. The organizationshould concentrate on defect preventionrather than defect detection. Management,

the workers, staff and union must learnthis new philosophy.


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Understand the purpose of Inspection

Management must understand that the purposeof inspection is to improve the process andreduce the cost.

Mostly, mass inspection is both costly andunreliable.

Wherever possible, it should be replaced bynever-ending improvement using statisticaltechniques.

Every effort should be made to reduce and then

eliminate acceptance sampling. Mass inspection is managing for failure and

defect prevention is managing for success.


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Eliminate numerical quotas for the workforceand numbers in MBO

The focus should be on quality and not quantityof work done. Quotas encourage poorworkmanship in order to meet them.

Quotas should be replaced with statisticalmethods of process control.

Similarly, instead of MBO, management mustlearn the capabilities of the processes and howto improve them.

Management by numerical goals is an attempt tomanage without knowledge of what to do.


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Phillip B. Crosby

Crosby argued that doing it right the first

time is less expensive than the costs of

detecting and correcting non-conformities.

His first book, in 1979, Quality is Freehasbeen translated into 15 languages.

In 1984, he authored Quality WithoutTearswhich contained his four absolutes

of quality management.


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These are:

1. Quality is conformance torequirements

2. Prevention of non-conformance and

not appraisal, is the objective

3. The performance standard is zerodefects; not thats close enough

4. The measurement of quality is thecost of nonconformance.


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Joseph M. Juran

Juran emphasized the necessity formanagement at all levels to be committedto the quality effort with hands-on

involvement. The Juran Trilogy for managing quality iscarried out by three inter-relatedprocesses of planning, control and

improvement. The first edition of Jurans Quality Control

Handbookwas published in 1951.


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Planningbegins with the external customers.

Interacting with them, defining the corecustomers in case of numerous ones andestablishing quality goals is the essential firststep. Identifying the internal customers and their

needs is the next step.

Developing the product or service that respondsto customer needs is then done. Approaches

that include QFD, Taguchis quality engineeringand quality by design are used for this.


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The third step is to develop the processes

to produce the product/service package.Facilities, training, operations planning andcontrol form part of this exercise.

The final step is transferring plans tooperations. Process validation is done toensure that the process will produce theproduct/service with a high degree ofvalidation, meeting all the requirements.


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Controlis used by the operating arm of the

organization to meet the product, process andservice requirements. It uses the feedback loopand consists of the following steps:

1. Determine items/subjects to be controlled andtheir units of measure. 2. Set goals for the controls and determine what

sensors need to be put in place to ensure theproduct, process or service.

3. Measure actual performance 4. Compare actual performance to goals 5. Act on the difference


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Statistical process control (SPC) is theprimary technique for achieving control.SPC tools like Pareto diagrams, flow

diagrams, cause and effect diagramscontrol charts etc are used to determine ifthe process is capable and centered.


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Improvementis the third part of the trilogy thataims to attain levels of performance that are

significantly higher than current levels. There are four primary improvement strategies

Repair,

Refinement, Renovation and

Reinvention.

Proper integration of these strategies willproduce never-ending improvement.


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Repair a simple strategy: anything broken isfixed so that it functions as designed. This isessentially a short term strategy which does notimprove the process over the original design.

Refinement Activities that continually improvea process that is not broken, usually on anincremental basis. This is the underlyingprinciple of Kaizen. It needs to be made part of

everyday life in the organization to succeed.


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Renovation- The strategy results in majoror breakthrough improvements. Innovation

and technological advancements are keyfactors in this approach.

Reinvention is the most demandingimprovement strategy. It requires that afresh start to be made in devising a

method/product/service to satisfy thecustomers need.


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Genichi Taguchi

Taguchi developed the loss functionconcept that combines cost, target, and

variation into one metric. Since the lossfunction is reactive, he developed thesignal to noise ratio as a proactiveelement. We shall study his approach ingreater detail in some of the latersessions.


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The PDSA Cycle

The Plan-Do-Study-Act cycle is an effective

improvement technique developed by Deming. Itcan be represented as below:

1. Identify the opportunity

2. Analyze the current process 3. Develop the optimal solution(s)

4. Implement changes

5. Study the results 6. Standardize the solution

7. Plan for the future


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Act Plan

DoStudy

Identify the opportunity

Analyze the process

Develop optimalsolutions

ImplementStudy the results

Standardize thesolution

Plan for the future


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Costs of Quality

The effect of any economic activity in an

organization has to be finally reflected in its costand its impact on the profitability of theoperation. Quality is no exception and the valueof quality must be based on its ability tocontribute to profits.

Quality costs are defined as those costsassociated with the non-achievement of

product/service quality as defined by therequirements established by the organizationand its contracts with customers and society.


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Quality costs are spread throughout theorganization and a comprehensive costprogram identifies and highlights hiddenand buried costs in all functional areas.

The costs can broadly be classified intofour areas:

1. Preventive costs

2. Appraisal costs

3. Internal failure costs

4. External failure costs


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1. Preventive Costs 1.1 Marketing/Customer/User Costs that are

incurred in the accumulation and continuedevaluation of customer and userquality needs. Market research, customersurveys, focus groups and related costs aresub-elements.

1.2 Product/Service/Design DevelopmentCosts that are incurred to translate userneeds into reliable quality standards etc priorto the release of authorized documentationfor initial production. Field trials, productdesign qualification tests, design qualityprogress reviews etc are sub-elements ofthis component.


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1.3 Purchasing Costs that are incurred to assureconformance to requirements of supplier inputs andto minimize the impact of supplier non-

conformance on the quality of the finalproduct/service. Vendor ratings, technical review ofitems for purchase and supplier quality planning aresub-elements of this cost.

1.4 Operations Cost incurred in ensuring the capabilityand readiness of operations to meet the qualitystandards and requirements. Quality controlplanning and quality education of operating

personnel, operations process validation, design anddevelopment of quality measurement andcontrol equipment and collecting quality costs aresome of the elements in this area.


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1.5 Quality administration Costs areincurred in the overall administration of thequality function.

Administrative salaries performancereporting, quality education, quality audits,documenting and evaluating quality costsare all part of this cost.


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2. Appraisal costs

2.1 Purchasing Appraisal costs

2.2 Operations Appraisal costs 2.3 External appraisal costs

2.4 Review of Test & Inspection data

2.5 Miscellaneous quality evaluations


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. Internal Failure costs

3.1 Product/service design failure

3.2 Purchasing failure 3.3 Operations failure


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4. External failure costs 4.1 Complaint investigation of customer or

user service 4.2 Returned goods 4.3 Retrofit and recall costs 4.4 Warranty claims 4.5 Liabilities

4.6 Penalties 4.7 Customer or user goodwill 4.8 Lost sales


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Measuring and reporting quality costs

The repository of all cost information in anyorganization is the accounting system and thebooks of accounts.

Accounting systems, as designed, are good atgenerating data on costs for the traditionalheads of accounts in a company.

The type of costs that would be required in a

TQM program, as listed above, may not bereadily or easily available from such a system.


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So, in most cases the relevant cost data

need to be designed into the existingsystem through the use of appropriateclassifications and codes so that theinformation can be extracted routinely.

Furthermore, the accounting personnelneed to be trained to bifurcate overallcosts of an activity into the relevant qualitycomponents before data entry and storageso that meaningful extraction is possible.


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The first step would be to build a set of qualitycost bases the baseline or datum against

which improvements and impact of changes canbe measured.

Typically, the bases are labor, production, sales

with quality cost obtained as an index qualitycost/labor hour, qc/$production cost, qc/$salesetc.

The next step would be to extract real time data

and accumulate the costs in the required headsof quality costs (preventive, appraisal, etc).


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The total costs so extracted are then used tocalculate the indices in the datum and compared

with the datum values. The difference report and exception report gives

a direction to the further effort needed to achieveimprovement in the quality program.

Consistently improved figures over the datumvalues over a period of time would indicate thata paradigm shift in the quality level hasoccurred. It may be an indicator to management

to set these improved figures as the datum anduse the PDSA cycle to take the program to thenext level.

sessions 5 & 6 - the philosophy of tqm

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