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