UNIVERSITY OF NAIROBI

MASTER OF ARTS – PROJECT PLANNING & MANAGEMENT

LDP 607: PROJECT TOTAL QUALITY MANAGEMENT
Course Tutor: Musyoka Michael.
(5.30 – 8.30 pm) Thursdays
Contact: Mobile 0725 – 784982
Email: [email protected]
COURSE OUTLINE

Introduction
Total Quality Management (TQM) involves the application of quality management principles
to all aspects of a business. Its application has dramatically transformed the quality of
products (projects) and services, reduced waste of resources and cut costs beyond limits
previously thought impossible. Today, the most progressive organizations are embarking on
the journey of transformation towards TQM and this is coupled with the spread from
manufacturing to service sector and onto public services.

This course unit therefore aims at equipping the learner with the necessary knowledge and
skills that will enable him/her to utilise TQM principles in the management of projects in an
efficient and effective manner.

Objectives

At the end of this course unit, the learner should be able to:
(a) understand the nature of quality and total quality
(b) describe quality management systems in project
(c) describe the historical development of quality management
(d) explain the various international standards applicable to projects
(e) describe the processes and phases in project management
(f) apply total quality management principles to project management

Content
1. Introduction to Total Quality Management
 Basic concepts of quality
 Definition of total quality management
 Management system concept

2. Total Quality Management Philosophy

 Evolution of TQM
 TQM gurus
 Preparing for TQM
 TQM models
3. Quality Management Principles
 Customer Focus
 Leadership
 Involvement of People
 Process Approach
 Systems approach to Management
 Continual Improvement
 Factual Approach to Decision making
 Mutual Beneficial supplier Relationship
4. Quality Planning
 Situation Analysis
 Strategic Planning
 Organisational Culture
5. Customer Orientation
 Customer focus
 Customer Satisfaction model
 Customer Retention Model
 Quality function Deployment
 Customer Satisfaction Measurement
6. Continuous Improvement Strategies
 Deming wheel
 Zero Defect concept
 Benchmarking
 Six Sigma (6 δ)
 Kaizen
7. Total Quality Management Guidelines for Quality Management in projects
 Terms and conditions
 Quality management systems in projects
 Management responsibility
 Resource management
 Product realization
 Measurement, Analysis and Improvement
8. International Organization for Standards (ISO)
 ISO in brief
 History of quality assurance
 Projects Standards

References
Chapman and Hall, Total Quality Management: The Key to Business Improvement
Handbook on the Implementation of ISO 9000 Standard (2007), KEBS Training and
Advisory

ISO 9001: 2000 Quality Management Systems – Systems Requirements

ISO 10006: 2003 quality Management Systems – Guidelines for Quality Management
in Projects

Ross, Joel Total Quality Management: Texts, Cases and Readings

Suganthi L and Anand, A. S (2004) Total Quality Management, New Delhi: Prentice
Hall of India

Evaluation

Class participation 10%

Class presentations (assignments) 10%
Continuous Assessment Test 10%
Semester Exam 70%
100%
BASIC CONCEPTS OF QUALITY:

 What is quality?
 Quality dimensions/characteristics.

Definition of quality:

Often defined loosely using attributes/features for example freshness is an expression of

quality, beauty, goodness, expensiveness etc. all these attributes vary depending on people.
The definition of quality depends on the role of the people defining it. Most consumers have
difficult time defining quality, but they know it when they see it.

Broadly defined as:

Quality is the degree of excellence i.e. extent to which something is fit for its purpose.

Some common narrow definitions of quality are:

 Conformance to specifications measures how well the product or service meets the
targets and tolerances determined by its designers. For example a wait for a hotel
room service may be specified as 20 minutes, but there may be an acceptable delay
of an additional 10 minutes. If a 60 watts bulb delivers 50 watts it does not conform
to specifications. Conformance to specification is directly measurable, though it
may not be directly related to the consumer’s idea of quality.
 Fitness for use focuses on how well the product performs its intended function or
use. For example Noah Wekesa minister for Forestry saying that the government
push for all ministers to use VW Passat do not help in job that requires off-road
driving asking for an AWD (All Wheel Drive) instead. This fitness for use is a user
based definition in that it is intended to meet the needs of a specific user/group.
 Value for price paid is a definition of quality that consumers often use for product
or service usefulness. This is the only definition that combines economics with
consumer criteria; it assumes that the definition of quality is price sensitive. If you
have two options in paying for a similar item and you get one option in which you
pay less you would feel that you have received greater value for the price.
 Support services provided are often how the quality of a product or service is
judged. Quality does not only apply to the product or service itself but also applies
to the people, processes and organizational environment associated with it.
Example quality of a university not only staff and course offerings but also
efficiency and accuracy of processing paperwork.
 Psychological criteria is a subjective definition that focuses on the judgmental
evaluation of what constitutes product or service quality. Different factors
contribute to the evaluation such as atmosphere of the environment of the
perceived prestige of the product. We commonly associate certain products with
 excellence because of their reputation: Rolex watches Mercedes Benz automobiles
etc.

Note that quality satisfaction is pegged on what the customer expects from a good or
service. The aim of quality is to meet and even surpass these expectations.

Customer & producer of service or product:

Producer: Quality to this party means conformance to specification. You thus have quality of
conformance to some predetermined design.

Customer: Quality of the design is what s/he talks about. Extent to which a product/service
achieves what they require. Are they doing the expected task right? Quality of design is a
measure of how well a product or service is designed to achieve the requirement. Using the
customer’s point of view the producer seeks to create things that meet the expectations of
the consumer. (Projects??)

SOME CLARIFICATIONS ABOUT THE CONCEPT OF QUALITY:

1. Quality is a result: It is a result of comparison between what is required and what

was provided (required vs. actual). Quality is not judged by the
producer/provider of a product/service but by the receiver/consumer. This
judgment can be deduced as an intention or output. As an intention it means
making a choice as a selection e.g. selecting a service provider “I will contract A
as opposed to B” As an output when purchasing a good you choice one over
another.

2. Quality and customer satisfaction: the only true measure of acceptable quality is
customer satisfaction considering both subjective and objective interpretations
of the needs of a customer. Courtesy, taste, beauty, safety are difficult to
measure and can thus be subjective. If customers are satisfied with
product/service offered, then the organization has not only interpreted the
customer’s needs and expectations but has also provided a good/service of
acceptable quality.

3. Customers changing perception: Customer’s needs/expectations constantly

change. This means that an organization should constantly improve quality so
that satisfied customers are retained and new ones created. The source of these
changing needs could be competition, new technology, legislation or generally
developments in the macro environment.
 4. Quality is not:

a) Perfection,

b) A procedure

c) An abstract measure.

It therefore follows that no amount of inspection can change the quality of a

product/service. Quality thus does not exist in isolation, but there got to be an entity
whose quality is being discussed (is the customer satisfied?) Quality is primarily concerned
with the customer.

DIMENSIONS OF QUALITY: (Performance, Features, Reliability, Conformance, durability,

Serviceability, Aesthetics, Perception)

The definition of quality is often a hotly debated topic. While it may seem intuitive, when we
get right down to it, “quality” is a difficult concept to define with any precision.

The most fundamental definition of a quality product is one that meets the expectations of
the customer. However, even this definition is too high level to be considered adequate.

In order to develop a more complete definition of quality, we must consider some of the key
dimensions of a quality product or service.

Dimension 1: Performance

Does the product or service do what it is supposed to do, within its defined tolerances? e.g.
+/- 1

Performance is often a source of contention between customers and suppliers, particularly

when deliverables are not adequately defined within specifications.

The performance of a product often influences profitability or reputation of the end-user. As

such, many contracts or specifications include damages related to inadequate performance.

Dimension 2: Features

Does the product or services possess all of the features specified, or required for its intended
purpose?

While this dimension may seem obvious, performance specifications rarely define the
features required in a product. Thus, it’s important that suppliers designing product or
services from performance specifications are familiar with its intended uses, and maintain
close relationships with the end-users.
Dimension 3: Reliability

Will the product consistently perform within specifications?

Reliability may be closely related to performance. For instance, a product specification may
define parameters for up-time, or acceptable failure rates.

Reliability is a major contributor to brand or company image, and is considered a fundamental

dimension of quality by most end-users.

Dimension 4: Conformance

Does the product or service conform to the specification?

If it’s developed based on a performance specification, does it perform as specified? If it’s

developed based on a design specification, does it possess all of the features defined?

Dimension 5: Durability

How long will the product perform or last, and under what conditions?

Durability is closely related to warranty. Requirements for product durability are often
included within procurement contracts and specifications.

For instance, fighter aircraft procured to operate from aircraft carriers include design criteria
intended to improve their durability in the demanding naval environment.

Dimension 6: Serviceability

Is the product relatively easy to maintain and repair?

As end users become more focused on Total Cost of Ownership than simple procurement
costs, serviceability (as well as reliability) is becoming an increasingly important dimension of
quality and criteria for product selection.

Dimension 7: Aesthetics

The way a product looks is important to end-users. The aesthetic properties of a product
contribute to a company’s or brand’s identity. Faults or defects in a product that diminish its
aesthetic properties, even those that do not reduce or alter other dimensions of quality, are
often cause for rejection.
Dimension 8: Perception

Perception is reality. The product or service may possess adequate or even superior
dimensions of quality, but still fall victim to negative customer or public perceptions. e.g.
some people perceive Infinix phones to be inferior even though they have quality features.

As an example, a high quality product may get the reputation for being low quality based on
poor service by installation or field technicians. If the product is not installed or maintained
properly, and fails as a result, the failure is often associated with the product’s quality rather
than the quality of the service it receives.

Summary

It should be obvious from the above that the individual dimensions of quality are not
necessarily distinct. Depending on the industry, situation, and type of contract or specification
several or all of the above dimensions may be interdependent.

When designing, developing or manufacturing a product (or delivering a service) the

interactions between the dimensions of quality must be understood and taken into account.

While these dimensions may not constitute a complete list of relevant dimensions, taking
them into consideration should provide us with a better understanding of the slippery
concept of quality.

What other dimensions can you think of?

In particular reference to a physical good you’d find:

 Features or extras (AC, Power windows in a car etc.)

 Performance (basic operating characteristics of a product/good.
 Reliability. Performs consistently well
 Durability. Gives you a good lifespan before replacement.
 Conformance: pre-established standards,
 Serviceability: repairs, parts, time, employees’ expertise.
 Aesthetics: looks, feel, taste
 Safety: freedom from injury while using it.

In particular reference to services:

 Time and timeliness: how long it takes to enjoy a service.

 Completeness of service: getting all one asks for.
 Courtesy: good treatment while getting the service.
 Consistency: Same service level to all and all the time.
 Accuracy: meeting the desired need as agreed.
 Responsiveness: service provider’s reaction to unusual circumstances.
 Total quality management (TQM)

Total quality management (TQM) is a management philosophy and strategy designed to

involve all members of an organization in the process and responsibility for producing
quality products and services. Total quality management is based on the ideas of W. Edward
Deming, Philip B. Crosby, and Joseph M. Juran, quality-control experts in the United States
and Japan. TQM was first associated with the Toyota production system. Companies using a
total quality management system typically incorporate

 just-in-time production (JIT) systems

 business process reengineering, analyzing and redesigning the work environment
 traditional quality systems such as ISO 9000

As a corporate philosophy, total quality management includes eight principles.

 Define quality in terms of customers and their requirements.

 Pursue quality at the source.
 Stress objectives rather than subjective measurement and analysis.
 Emphasize prevention rather than detection of defects.
 Focus on process rather than output.
 Strive for zero defects.
 Establish continuous improvement as a way of life.
 Make quality everyone’s responsibility.

The nine total quality management principles lead to sets of activities that will vary,
depending on the nature of the organization. Management professor Robert J. Trent
developed a set of activities for applying total quality management (TQM) to supply-chain
management (purchasing), including the following.

 Identify internal supply-chain customers and establish communication linkages.

 Conduct regular performance reviews.
 Create performance measures that quantify expectations and requirements.
 Involve suppliers early in product and process development.
 Develop a consistent source-selection procedure.
 Upwardly migrate supplier-performance targets.
 Use longer-term contracts selectively.

Traditionally issues of product inspection and quality are associated with manufacturing
processes, but in a total quality management system quality is perceived to be the concern
of all members of the organization. TQM consultant Rod Collard describes the implications
of total quality management programs as

 reductions in staff numbers, particularly those previously responsible for directing

others
 changes to a flatter management style, including teamworking and cross-functional
teams
 less control of tasks by individuals, since everyone is responsible for quality

While total quality management remains a popular and widely used management practice (a
1997 United Kingdom survey indicated over two-thirds of the country’s 500 largest companies
had implemented TQM), it is subject to a variety of criticisms. Dr. Edward Lestrade, one of the
leading critics of total quality management practices in the United Kingdom, describes the
goal of total quality management (TQM) as being “designed to be motivational, in that it
increase the responsibilities of the employees in the organization and widens the scope of
their duties. However, the reality is that the natural outcome of the organizational total
quality management system is to drive the employee to work harder and longer hours thereby
increasing the potential for incidences of stress-related illness.” In Japan the term karoshi
(death from overwork) is associated with the stress and demands made in organizations
practicing TQM. Lestrade concludes, “I recommend therefore that organizations using total
quality management, should, for legal, ethical as well as commercial reason, investigate other
methods of management as a matter of some urgency.”

Other critics of total quality management are less dramatic than Dr. Lestrade. Many
organizations have found total quality management too deliberative and quantitatively
oriented to utilize in fast-changing markets. Author John Addey identified a variety of myths
associated with quality systems, one of which is the idea that staff follow quality control
procedures during their daily work. Addey suggests that workers actually tend to do what
they think will work, ignoring often-boring and inaccurate or inappropriate quality-control
guidelines. Another myth is that quality audits are a good way to find problems, and managers
welcome auditors as a means of identifying opportunities to improve. As Addey points out,
though, quality audits review only the past, not current situations. Since they are based on
samples and are usually carried out by external staff, they may be resisted by workers in the
affected unit. Addey notes, “In quality management systems effectiveness is rarely assessed;
most audits only check compliance.” He provides many other myths about quality
management as well, including the statement, “If everything is controlled, all will be well.”
Addey suggests instead that sometimes the best control is no control at all. While it is still
espoused in many organizations, total quality management probably peaked as a
management system in the United States in the mid-1990s.
 Deming’s 14 points
Deming’s 14 points comprise a philosophy about business and efforts to achieve quality
devised by Dr. W. Edward Deming (1900–93), a mathematical physicist. In 1950 Deming was
invited to Japan to teach. His statistical quality-control methods were quickly adopted by
Japanese manufacturers, and in 1951 a Deming Prize was established in his honor. Deming
has had a significant impact on business managers, first in Japan and more recently in the
United States.

Deming’s 14 points, referred to as “A System of Profound Knowledge,” are a basis for

transformation for industry. Quality advocates suggest they apply anywhere, to small and
large organizations, to the service industry, and to the manufacturing.

As one of the first MANAGEMENT GURUS, Deming brought together ideas from many
sources and emphasized the importance of human factors in achieving excellence.

The 14 points are:

• Create constancy of purpose toward improvement of product and service.
• Adopt the new philosophy. We are in a new economic age.
• Cease dependence on mass inspection to achieve quality.
• Continuous improvement.
• Remove barriers.
• Drive out fear. Create trust and a climate for innovation.
• Break down barriers between departments.
• Eliminate numerical goals.
• Eliminate work standards (quotas).
• Institute modern methods of supervision.
• Institute modern methods of training.
• Institute a program of education and retraining.
• End the practice of awarding business based on lowest price alone.
• Involvement of all people. .
MANAGEMENT SYSTEM CONCEPT
A quality management system (QMS) can be expressed as the organizational structure,
procedures, processes and resources needed to implement quality management.

Elements of a Quality Management System

1. Organizational Structure
2. Responsibilities
3. Methods
4. Data Management
5. Processes
6. Resources
7. Customer Satisfaction
8. Continuous Improvement
9. Product Quality

Concept of quality - historical background

The concept of quality as we think of it now first emerged out of the Industrial Revolution.
Previously goods had been made from start to finish by the same person or team of people,
with handcrafting and tweaking the product to meet 'quality criteria'. Mass production
brought huge teams of people together to work on specific stages of production where one
person would not necessarily complete a product from start to finish. In the late 19th century
pioneers such as Frederick Winslow Taylor and Henry Ford recognized the limitations of the
methods being used in mass production at the time and the subsequent varying quality of
output. Birland established Quality Departments to oversee the quality of production and
rectifying of errors, and Ford emphasized standardization of design and component standards
to ensure a standard product was produced. Management of quality was the responsibility of
the Quality department and was implemented by Inspection of product output to 'catch'
defects.

Application of statistical control came later as a result of World War production methods.
Quality management systems are the outgrowth of work done by W. Edwards Deming, a
statistician, after whom the Deming Prize for quality is named.

Quality, as a profession and the managerial process associated with the quality function,
was introduced during the second-half of the 20th century, and has evolved since then.
Over this period, few other disciplines have seen as many changes as the quality profession.
The quality profession grew from simple control, to engineering, to systems engineering.
Quality control activities were predominant in the 1940s, 1950s, and 1960s. The 1970s were
an era of quality engineering and the 1990s saw quality systems as an emerging field. Like
medicine, accounting, and engineering, quality has achieved status as a recognized
profession

Industrial Revolution

A Watt steam engine, the steam engine fuelled primarily by coal that propelled the
Industrial Revolution in Great Britain and the world.

The Industrial Revolution was a period from the 18th to the 19th century where major
changes in agriculture, manufacturing, mining, transportation, and technology had a
profound effect on the socioeconomic and cultural conditions of the times. It began in the
United Kingdom, then subsequently spread throughout Europe, North America, and
eventually the world.

The Industrial Revolution marks a major turning point in human history; almost every aspect
of daily life was influenced in some way. Most notably, average income and population
began to exhibit unprecedented sustained growth. In the two centuries following 1800, the
world's average per capita income increased over 10-fold, while the world's population
increased over 6-fold.

In the words of Nobel Prize winner Robert E. Lucas, Jr., "For the first time in history, the
living standards of the masses of ordinary people have begun to undergo sustained growth.
... Nothing remotely like this economic behavior has happened before."

Starting in the later part of the 18th century, there began a transition in parts of Great
Britain's previously manual labour and draft-animal–based economy towards machine-
based manufacturing. It started with the mechanisation of the textile industries, the
development of iron-making techniques and the increased use of refined coal. Trade
expansion was enabled by the introduction of canals, improved roads and railways.
The introduction of steam power fuelled primarily by coal, wider utilization of water wheels
and powered machinery (mainly in textile manufacturing) underpinned the dramatic
increases in production capacity. The development of all-metal machine tools in the first
two decades of the 19th century facilitated the manufacture of more production machines
for manufacturing in other industries. The effects spread throughout Western Europe and
North America during the 19th century, eventually affecting most of the world, a process
that continues as industrialization. The impact of this change on society was enormous.

The first Industrial Revolution, which began in the 18th century, merged into the Second
Industrial Revolution around 1850, when technological and economic progress gained
momentum with the development of steam-powered ships, railways, and later in the 19th
century with the internal combustion engine and electrical power generation. The period of
time covered by the Industrial Revolution varies with different historians. Eric Hobsbawm
held that it 'broke out' in Britain in the 1780s and was not fully felt until the 1830s or 1840s,
while T. S. Ashton held that it occurred roughly between 1760 and 1830.

Some 20th century historians such as John Clapham and Nicholas Crafts have argued that
the process of economic and social change took place gradually and the term revolution is a
misnomer. This is still a subject of debate among historians.[9][10] GDP per capita was broadly
stable before the Industrial Revolution and the emergence of the modern capitalist
economy. The Industrial Revolution began an era of per-capita economic growth in capitalist
economies. Economic historians are in agreement that the onset of the Industrial
Revolution is the most important event in the history of humanity since the domestication
of animals and plants.
TQM IMPLEMENTATION:

Please note that there is no set rule of thumb in implementing TQM. However, the following
should be borne in mind if success in implementation is to be achieved.

1. Top management involvement: Top management has to demonstrate its commitment to

TQM and provide strategic direction to the organization (strategic outlook). The top
management team at the corporate level should start a TQM transformation with a clear
understanding of why TQM is essential to its corporate objective and strategy and how TQM
philosophy fits their values. Questions such as "Is TQM essential to our success as a
corporation and why?" and "How does TQM fit our values and style as a senior management
team?" is the only way to ensure that TQM is not a program that will fade. Unless the
corporate top management team can come to agree that TQM is the core strategic capability
needed to succeed, the initiative will fail. If the decision is made to go forward with TQM,
senior management should avoid "pushing" TQM into the organization through corporate-
wide top-down training programs. Instead, they should motivate aspirations for continuous
improvement in quality by establishing ambitious performance goals for subunit leaders and
the means for measuring their attainment. Research suggests, however, that in the early
stages of TQM implementation corporate top management is best served by focusing
resources on a small number of units where TQM fits the strategy and where leaders'
attitudes, skills, and behavior create a fertile context for TQM. These units are the laboratories
where the corporation's leaders will learn how TQM practices and philosophy can be
integrated into the day-to-day process of running the business. Through leading this diffusion
process, top management is slowly reshaping the DNA of the company-the attitudes, skills,
and behavior of its leaders and people. Over time this approach will result in an ever-larger
circle of organizational subunits that have internalized TQM practices and culture.

2. Customer Involvement/Satisfaction. This is borne from the fact that quality is often driven
by the customer. There exists in each department, each office, each home, a series of
customers, suppliers and customer-supplier interfaces. These are “the quality chains”, and
they can be broken at any point by one person or one piece of equipment not meeting the
requirements of the customer, internal or external. The failure usually finds its way to the
interface between the organization and its external customer, or in the worst case, actually
to the external customer. Failure to meet the requirements in any part of a quality chain has
a way of multiplying, and failure in one part of the system creates problems elsewhere,
leading to yet more failure and problems, and so the situation is exacerbated. The ability to
meet customers’ (external and internal) requirements is vital.

3. Shared vision (suppler/Vendors, employees, employer) partnership. Quality can only be

propagated if all stakeholders are aligned to the quality goal. All stake holders should have
the same view of quality objective to ensure they play their part in the quality seeking
objective.
4. Teamwork consensus: Teams can be defined as small groups of interdependent individuals
that take responsibility for their organizational outcomes. Although teams are spreading
rapidly in organizations, they, like other quality-improvement practices, are not panaceas.
Indeed, there are usually significant obstacles to successful team implementation.
Furthermore, managing teams may be complex: reporting procedures can be muddled
because of both horizontal and vertical communication lines, the balance of power between
individuals may be difficult, and problems with priorities and resource allocation may occur.
However, a well-designed training program can prepare individuals to work effectively in a
team environment, efficiently employ team productivity techniques such as team goal setting
and team problem solving, and develop interpersonal skills and conflict management
techniques necessary for teams to function well

5. Process orientation: Own and control the process in a manner that builds in the quality.
Everything we do is a Process, which is the transformation of a set of inputs, which can include
action, methods and operations, into the desired outputs, which satisfy the customers’ needs
and expectations. In each area or function within an organization there will be many
processes taking place, and each can be analyzed by an examination of the inputs and outputs
to determine the action necessary to improve quality. In every organization there are some
very large processes, which are groups of smaller processes, called key or core business
processes. These must be carried out well if an organization is to achieve its mission and
objectives. The section on Processes discusses processes and how to improve them, and
Implementation covers how to prioritize and select the right process for improvement.

6. Continuous quality improvement attitude: this is from the fact that customer expectations
are dynamic and requires monitoring in order to keep up. The customer has a high likelihood
of becoming loyal if their expectations are surpassed. What better way of doing this than
continually improving what you have to offer.

7. Cultural change at all levels: Culture is reflected by the management policies and actions
that a company practices. Therefore, organizations that believe in the principles of total
quality are more likely to implement the practices successfully. Conversely, actions set culture
in motion. As total quality practices are used routinely within an organization, its people learn
to believe in the principles, and cultural changes can occur.

8. Value based decision making: TQM demands effective use of data to analyze business
issues. Using measurements to discover opportunities to drive business results and to drive
improvement.
9. Innovations attitude: In TQM both incremental change and breakthrough change are
supported and expected. These changes are not only directed at the products and services
but also how the company itself works internally and interface with the rest of the world.
10 Employee empowerment: (refer TQM philosophy notes)
11. Training: The most frequently cited factor that limits the effectiveness of participation is
the lack of employee knowledge. For example, those with technical backgrounds fear
obsolescence of their old skills while worrying about their ability to acquire new ones.
However, training focused on broadening employees' knowledge and skills can represent
opportunities for individual growth and development and result in advantageous outcomes
such as more proficient team-related skills, increased workforce flexibility, and enhanced
knowledge. In particular, training has been known to be as a significant factor in team
development Thus, it is reasonable to expect employees to be less resistant to TQM practices
once they have received clear information and enhanced teamwork skills through training.

12. Reward system: An appropriate reward system has been recognized as an important
management tool to influence organizational members' attitudes toward employee
involvement. If top management fails to align performance management systems with the
goals of employee involvement, their exhortation to involve employees and manage in new
ways will compete with systems that reinforce old ways of behaving. Employees understand
that management objectives for quality programs are more related to improvements in
organizational efficiency and effectiveness than to improvements in employee work life.
Correspondingly, one of the determinants of employee support for such programs is the
perceived benefit accrued to the employees themselves. That is, employee support for TQM
initiatives may depend upon rewarding the behavior that constitutes such support.

Cultural Differences between TQ and Traditional Organizations

Some of the contrasting differences between modern TQ organizations and traditional

organizations that pre-dated the quality revolution are summarized below.

Organizational structures: (dependent and interdependent) Traditional management views

an enterprise as a collection of separate, highly specialized individual performers and units,
linked within a functional hierarchy. Lateral connections are made by intermediaries close to
the top of the provinces. TQ views the enterprise as a system of interdependent processes,
linked laterally, over time, through a network of collaborating (internal and external) suppliers
and customers. Processes are connected to the enterprise’s mission and purpose, through a
hierarchy of micro and macro processes. Every process contains sub-processes and is itself
contained within a higher order process. This structure of processes is repeated throughout
the hierarchy.

Role of people: (commodity vs competitive advantage) Traditional management views people

as a commodity, virtually interchangeable, and to be developed based on the perceived needs
of the enterprise. People are passive contributors, with little autonomy, doing what they are
told and nothing more. TQ views people as the enterprise’s true competitive edge. Leadership
provides people with opportunities for personal growth and development. People take joy
and pride through learning and accomplishment, and enhance the capability of the enterprise
to succeed. People are active contributors, valued for their creativity and intelligence. Every
person is a process manager, presiding over the transformation of inputs to outputs of greater
value to the enterprise and to the consumer.
Definition of quality: (adherence to specifications, go beyond specifications) In traditional
management, quality is the adherence to internal specifications and standards. The absence
of defects, therefore, defines quality. Inspection of people’s work by others is necessary to
control defects. Innovation is not required. In TQ, quality is defined in a positive sense as
products and services that go beyond the present needs and expectations of customers.
Innovation is required.

Goals and objectives: (either self-interest or greater good, both self-interest and greater good)
In traditional management, the functional provinces are in a zero-sum game in which there
must be a loser for every winner. People do not cooperate unless it serves their own or their
unit’s best interests. Parochialism is a fact of business life. In TQ, self-interest and the greater
good are served simultaneously by serving one’s customers. Everyone wins or no one wins.
Cooperation takes the place of competition.

Knowledge: (knowledge only in manufacturing vs knowledge within the entire org is required)
in traditional management, quality embodies knowledge applicable only to manufacturing
and engineering. In TQ, quality embodies knowledge applicable to all the disciplines of the
enterprise. All levels of management and the workforce must, as Deming often said, “learn
the new philosophy.”

Management systems: (dependent vs interdependent) in traditional management, managers

oversee departments or functions or collections of individuals. The pieces do not know they
are interdependent. They each act as if they are the whole. Quality problems occur when
individual people or departments do not do their best. In TQ, managers oversee
interdependent systems and processes and exercise managerial leadership through
participative management. Their roles are to act as mentors, facilitators, and innovators.
Quality results from the enterprises’ systems and individuals working together. People
working in the system cannot do better than the system allows (recall the Red Bead
experiment). The majority of problems are prevented and improvement promoted when
people understand how they fit in, and have the knowledge to maximize their contribution to
the whole system. Only management can create an environment that nurtures a team-
oriented culture, which focuses on problem prevention and continuous improvement.

Reward systems: In traditional management, performance appraisal, recognition, and reward

systems place people in an internally competitive environment. This environment reinforces
individualism to the detriment of teamwork. In TQ, reward systems recognize individual as
well as team contributions and reinforce cooperation.

Management’s role: (sticking to what works vs. seeks continual improvement) Once the
organization has found a formula for success it is reluctant to change it. Management’s job,
therefore, is to maintain the status quo by preventing change. In TQ, the environment in
which the enterprise interacts constantly changes. If the enterprise continues to do what it
has done in the past, its future performance, relative to the competition, will deteriorate.
Management’s job, therefore, is to provide the leadership for continual improvement and
innovation in processes and systems, products, and services. External change is inevitable,
but a favorable future can be shaped.

Union-management relations: In traditional management, the adversarial relationship

between union and management is inevitable. The only area for negotiation lies in traditional
issues, such as wages, health, and safety. In TQ, the union becomes a partner and a
stakeholder in the success of the enterprise. The potential for partnership and collaboration
is unlimited, particularly in the areas of education, training, and meaningful involvement of
employees in process improvement.

Teamwork: In traditional management, hierarchical “chimney” organization structures

promote identification with functions and tend to create competition, conflict, and
adversarial relations between functions. In TQ, formal and informal mechanisms encourage
and facilitate teamwork and team development across the entire enterprise.

Supplier relationships: In traditional management, suppliers are pitted against each other to
obtain the lowest price. The more suppliers competing against each other, the better it is for
the customer company. In TQ, suppliers are partners with their customers. Partnership aims
to encourage innovation, reduce variation of critical characteristics, lower costs, and improve
quality. Reducing the number of suppliers and establishing long-term relationships helps to
achieve this aim.

Control: In traditional management, control is achieved by pre-established inflexible

responsive patterns laid down in the book of rules and procedures. People are customers of
the “book,” which prescribes appropriate behaviors. In TQ, control results from shared values
and beliefs, as well as knowledge of mission, purpose, and customer requirements.

Customers: In traditional management, customers are outside the enterprise and within the
domain of marketing and sales. In TQ, everyone inside the enterprise is a customer of an
internal or external supplier. Marketing concepts and tools can be used to assess internal
customer needs and communicate internal supplier capabilities.

Responsibility: In traditional management, the manager’s job is to do the subordinates’

planning, and inspect the work to make sure the plans are followed. In TQ, the manager’s job
is to manage his or her own process and relationships with others and give subordinates the
capability to do the same through empowerment. The manager must be a coach and
facilitator rather than a director.

Motivation: In traditional management, motivation is achieved by aversive control. People

are motivated to do what they do to avoid failure and punishment, rather than contribute
something of value to the enterprise. People are afraid to do anything that would displease
their supervisor or not be in compliance with company regulations. The system makes people
feel like losers. In TQ, managers provide leadership rather than overt intervention in the
processes of their subordinates, who are viewed as process managers rather than functional
specialists. People are motivated to make meaningful contributions to what they believe is an
important and noble cause and of value to the enterprise and society. The system enables
people to feel like winners.

Competition: In traditional management, competition is inevitable and inherent in human

nature. In TQ, competitive behavior--one person against another or one group against
another--is not a natural state. Instead, competitive behavior seeks to improve the methods
for pleasing the customer, eliminating waste of nonrenewable resources, or preventing
passing on to future generations a damaged planet, incapable of sustaining human life.

Benefits of TQM??

List and explain them.

EVOLUTION OF TQM:
This can be traced to four stages namely:
 Quality inspection stage,
 Quality control stage,
 Quality assurances stage,
 Total quality management stage
Quality inspection Stage

Customer-Craft OR the Inspection Era:

Until the nineteenth century, skilled craftsmen manufactured goods in small volume. They
handcrafted and fit together parts to form a unique product that was only informally
inspected. Population growth and industrialization brought about production in larger
volume. Manufacturing in the industrialized world tended to follow this craftsmanship model
till the factory system, with its emphasis on product inspection, started in Great Britain in the
mid-1750s and grew into the Industrial Revolution in the early
1800s.

The factory system, a product of the Industrial Revolution in Europe, began to divide the
craftsmen’s trades into specialized tasks. This forced craftsmen to become factory workers
and forced shop owners to become production supervisors, and marked an initial decline in
employees’ sense of empowerment and autonomy in the workplace.

Quality in the factory system was ensured through the skill of laborers supplemented by
audits and/or inspections. Defective products were either reworked or scrapped.

Mass Production and Inspection

In the 1800s, increased specialization, division of labor, and mass production required more
formal inspection. Parts had to be interchangeable. Inspectors examined products to detect
flaws and separate the good from the bad. They used gauges to catch deviant parts and make
sure parts fit together at final assembly. The gauging system made inspections more
consistent than those conducted solely by eye, and gave inspection a new respectability.

Formalizing the Inspection Function

By the early 1900s, gauging had become more refined, and inspection was even more
important. It was prominent in Henry Ford’s moving assembly line and Frederick W. Taylor’s
system of shop floor management. In 1922, G.S. Radford formally linked inspection to quality
control. For the first time, quality was regarded as an independent function and a distinct
management responsibility. Radford defined quality in term of conformance to “established
requirements” and emphasized inspection. He also suggested some lasting quality principles,
such as getting designers involved early, closely coordinating various departments, and
achieving the quality improvement results of increased output and lower costs.

Late in the 19th century the United States broke further from European tradition and adopted
a new management approach developed by Frederick W. Taylor. Taylor’s goal was to increase
productivity without increasing the number of skilled craftsmen. He achieved this by assigning
factory planning to specialized engineers and by using craftsmen and supervisors, who had
been displaced by the growth of factories, as inspectors and managers who executed the
engineers’ plans.

Taylor’s approach led to remarkable rises in productivity, but it had significant drawbacks:
Workers were once again stripped of their dwindling power, and the new emphasis on
productivity had a negative effect on quality.

To remedy the quality decline, factory managers created inspection departments to keep
defective products from reaching customers. If defective product did reach the customer, it
was more common for upper managers to ask the inspector, “Why did we let this get out?”
than to ask the production manager,
“Why did we make it this way to begin with?”

Through the 1920s, however, quality control was most often limited to inspection and
focused on activities such as counting, grading, and rework, which goes against Total Quality
Management’s emphasis on prevention to avoid defects. Inspection departments and quality
professionals were not required to troubleshoot, to understand and address the causes of
poor quality, until the 1930s, with the creation of statistical quality control.

Quality Control Stage:

In the early 20th century, manufacturers began to include quality processes in quality
practices. After the United States entered World War II, quality became a critical component
of the war effort: Bullets manufactured in one place, for example, had to work consistently in
rifles made in another. The armed forces initially inspected virtually every unit of product;
then to simplify and speed up this process without compromising safety, the military began
to use sampling techniques for inspection, aided by the publication of military-specification
standards and training courses in Walter Shewhart’s statistical process control techniques.

The Statistical Quality Control Era

In 1931, Walter A. Shewhart gave quality a scientific footing with the publication of his book
Economic
Control of Quality of Manufactured Product. Shewhart was one of a group of people at Bell
Laboratories investigating problems of quality. The statistical quality control approach that
Shewhart advocated is based on his views of quality. Statistical quality control requires that
numbers derived from measures of processes or products be analyzed according to a theory
of variation that links outcomes to uses.

Shewhart’s Views of Quality

Shewhart offered a pragmatic concept of quality: “The measure of quality is a quantity which
may take on different numerical values. In other words, the measure of quality, no matter
what the definition of quality may be, is a variable”. Shewhart’s emphasis on measurement
in his definition of quality obviously relates to his prescriptions for statistical quality control,
which requires numbers.

Shewhart recognized that industrial processes yield data. For example, a process in which
metal is cut into sheets yields certain measurements, such as each sheet’s length, height and
weight. Shewhart determined this data could be analyzed using statistical techniques to see
whether a process is stable and in control, or if it is being affected by special causes that
should be fixed. In doing so, Shewhart laid the foundation for control charts, a modern-day
quality tool.

Shewhart’s concepts are referred to as statistical quality control (SQC). They differ from
product orientation in that they make quality relevant not only for the finished product but
also for the process that created it.

“Ensure that there is minimal variation in the material produced”

Quality Assurance stage:

During the quality assurance era, the concept of quality in the United States evolved from a
narrow, manufacturing-based discipline to one with implications for management throughout
a firm. Statistics and manufacturing control remained important, but coordination with other
areas, such as design, engineering, planning, and service activities, also became important to
quality. While quality remained focused on defect prevention, the quality assurance era
brought a more proactive approach and some new tools.

The quality assurance era significantly expanded the involvement of all other functions
through total quality control, and inspired managers to pursue perfection actively. However,
the approaches to achieving quality remained largely defensive. Controlling quality still meant
acting on defects. Quality was something that could hurt a company if ignored, rather than a
positive characteristic necessary in obtaining competitive advantage.
This view started to change in the 1970s and 1980s, when managers started to recognize the
strategic importance of quality.

Total Quality Control and Customer Driven Quality

The beginning of the 20th century marked the inclusion of “processes” in quality practices. A
“process” is defined as a group of activities that takes an input, adds value to it and provides
an output, such as when a chef transforms a pile of ingredients into a meal.

In 1956, Armand Feigenbaum extended this principle by suggesting that high-quality products
are more likely to be produced through total quality control than when manufacturing works
in isolation:

The underlying principle of this total quality view. . . . is that, to provide genuine effectiveness,
control must start with the design of the product and end only when the product has been
placed in the hands of a customer who remains satisfied .. . . the first principle to recognize
is that quality is everybody’s job.

The birth of total quality in the United States came as a direct response to the quality
revolution in Japan following World War II. The Japanese welcomed the input of Americans
Joseph M. Juran and W.
Edwards Deming and rather than concentrating on inspection, focused on improving all
organizational processes through the people who used them.

Feigenbaum’s message reinforced Juran’s emphasis on managerial responsibility. To make

total quality control work, many companies developed matrices or relationship charts. These
charts list functions (departments or groups) across the top and required activities down the
side, and shows responsibility relationships in each cell. The considerable overlap among
functions means that cross-functional teams are needed to ensure required communication
and collaboration, for example, in assessing the “manufacturability” of a design and
debugging new manufacturing techniques through pilot runs.

Both Juran and Feigenbaum acknowledged that statistical methods and manufacturing
control were still important. However, they also felt total quality control would require new
management skills to deal with areas such as new product development and vendor selection.
Managers also would be required to engage in activities such as quality planning and
coordinating cross-functional teamwork. Despite the emphasis on teamwork, Feigenbaum’s
TQC suggests that more than half of the primary responsibilities for quality belong to the
quality control department, another practice that is antithetical to modern Total
Quality Management.
W Edwards Deming, a statistician with the U.S. Department of Agriculture and Census Bureau,
became a proponent of Shewhart’s SQC methods and later became a leader of the quality
movement in both
Japan and the United States.

Total Quality management Stage:

The Strategic Quality Management Era

The present quality era, Strategic Quality Management, incorporates elements of each of the
preceding eras, particularly the contributions of Shewhart, Deming, Juran, and Feigenbaum.
So many elements of previous eras are incorporated into Strategic Quality Management that
the last two decades may at first appear to be just a repackaging of old ideas. There are,
however, dramatic differences from earlier eras.
For the first time, top managers began to view quality positively as a competitive advantage,
and to address it in their strategic planning processes, which are focused on customer value.

Because quality started to attract the attention of top managers, it impacted management
throughout the organization. Quality was not just for the inspectors or people in the quality
assurance department to worry about. This era marks the emergence of a new paradigm for
management. A number of developments were brought together and reconfigured into a new
approach to management in all departments and specialties.

A variety of external forces brought quality to the attention of top managers. They began to
see a link between losses of profitability and poor quality. The forces that brought this
connection to their attention included a rising tide of multimillion-dollar product liability suits
for defective products and constant pressures from the government on several fronts,
including closer policing of defects, product recalls. Perhaps the most salient external force
was the growing market share incursions from foreign competitors, particularly the Japanese,
in such diverse industries as semiconductors, automobiles, machine tools, radial tires, and
consumer electronics.

Producing products with superior quality, lower cost, and more reliable delivery, Japanese
firms gained market shares and achieved immense profitability. The onslaught of these events
in the mid-1970s and
1980s seemed rather sudden, however, Japanese firm had been building their industrial
capabilities for decades, developing and refining approaches to quality grounded in the
principles taught to them by
Americans after World War II. Indeed, the Strategic Quality Management era borrows a
number of it elements from the developments that quality took place in Japan at the same
time as the quality assurance era in the United States.
Total Quality Management
Just as the definition of quality has been a source of confusion, so has the definition of Total
Quality
Management. There is no consensus on what constitutes TQM. Almost every organization
defines it differently or calls it something other than TQM.

Ideally, managers in the Strategic Quality Management era regard total Quality management
as something more than a “program,” and take it beyond all the deficiencies mentioned
earlier.

In this context, the word “Total” conveys the idea that all employees, throughout every
function and level of an organization, pursue quality. The word “quality” suggests excellence
in every aspect of the organization. “Management” refers to the pursuit of quality results
through a quality management process. This begins with strategic management processes
and extends through product design, manufacturing, marketing, finance, and so on. It
encompasses, yet goes beyond, all of the earlier definitions of quality by pooling them
together into a never-ending process of improvement.
Accordingly, TQM is as much about the quality process as it is about quality results or quality
products.
It began with people, particularly managers.

In the 1970s a re-known American company set up a task force to study consumer perception
of quality of some of their products. They found out that relative poor reputations for quality
were found product lines that:

 Deemphasize the customer’s view point,

 Regard quality as synonymous with tight tolerance and conformance to
specifications,
 Tie quality objectives to manufacturing flows,
 Express quality objectives as the number of defects per unit, and
 Use formal quality control systems only in manufacturing.
In contrast customers praised product lines that:

 Emphasized satisfying customers’ expectations,

 Determined customers’ needs through market research,
 Used customer based quality performance measures, and
 Used formal quality control systems for all business functions not only in
manufacturing.
From the above quality was deemed fit not as a technical discipline but a management
discipline. This is quality permeate all aspects of business enterprise: design manufacturing,
human resource mgt, supplier relations and finance.
Companies gradually recognized this broad scope of quality thus the birth of the concept of
total quality.

Total Quality (TQ) is a people-focused management system that aims at continual increase in
customer satisfaction at continually lower real cost. TQ is a total system approach (not a
separate area or program) and an integral part of high-level strategy; it works horizontally
across functions and departments, involves all employees, top to bottom, and extends
backward and forward to include the supply chain and the customer chain. TQ stresses
learning and adaptation to continual change as keys to organizational success.

The foundation of total quality is philosophical: the scientific method. TQ includes systems,
methods, and tools. The systems permit change, the philosophy stays the same. TQ is
anchored in values that stress the dignity of the individual and the power of community action.

Principles of Total Quality:

Total quality is based on three fundamental principles:

1. A focus on customers and stakeholders.

2. Participation and teamwork by everyone in the organization.

3. A process focus supported by continuous improvement and learning

Identifying Inspection Statistical Quality Strategic Total

Characteristics/ (1800s) Quality Control Assurance Quality
Date of (1930s) (1950s) Management
inception (1980s)
Primary concern Detection Control Coordination Strategic
impact
View of quality A problem to be A problem to be A problem to be A competitive
solved solved solved, but one opportunity
that is attacked
proactively
Emphasis Product Product The entire The market and
uniformity uniformity production consumer
with reduced chain, needs
inspection from design to
market, and the
contribution of
all
functional
groups,
 especially
designers, to
preventing
quality
failures
Methods Gauging and Statistical tools Programs and Strategic
measurement and techniques systems planning,
goal-setting,
and
mobilizing the
organization
Role of quality Inspection, Troubleshooting Quality Goal-setting,
professionals sorting, and the measurement, education and
counting, application quality training,
and grading of statistical planning, consultative
methods and program work
design with other
departments,
and
program design
Who has The inspection The All department, Everyone in the
responsibility for department manufacturing although top organization,
quality and engineering management is with
departments only top
peripherally management
involved in exercising
designing, strong
planning, and leadership
executing
quality
policies
Orientation and “Inspects in” “Controls in” “Builds in” “Manages in”
approach quality quality quality quality

THE TQM PHILOSOPHY

What characterizes TQM is the focus on identifying root causes of quality problems and
correcting them at the source, as opposed to inspecting the product after it has been made.
Not only does TQM encompass the entire organization, but it stresses that quality is customer
driven. TQM attempts to embed quality in every aspect of the organization. It is concerned
with technical aspects of quality as well as the involvement of people in quality, such as
customers, company employees, and suppliers.
Concept of the TQM Philosophy:

Concept Main Idea

Customer focus Goal is to identify and meet customer needs.
Continuous improvement A philosophy of never ending improvement.
Employee empowerment Employees are expected to seek out, identify and correct
quality problems.
Use of quality tools Ongoing employee training in the use of quality tools.
Product design Products need to be designed to meet customer
expectation.
Process management Quality should be built into the process, source of quality
problems should be identified and corrected.
Managing supplier quality Quality concepts must extend to a company’s suppliers.

Customer Focus
The first, and overriding, feature of TQM is the company’s focus on its customers. Quality is
defined as meeting or exceeding customer expectations. The goal is to first identify and then
meet customer needs. TQM recognizes that a perfectly produced product has little value if it
is not what the customer wants. Therefore, we can say that quality is customer driven.
However, it is not always easy to determine what the customer wants, because tastes and
preferences change. Also, customer expectations often vary from one customer to the next.
For example, in the auto industry trends change relatively quickly, from small cars to sports
utility vehicles and back to small cars. The same is true in the retail industry, where styles and
fashion are short lived. Companies need to continually gather information by means of focus
groups, market surveys, and customer interviews in order to stay in tune with what customers
want. They must always remember that they would not be in business if it were not for their
customers.

Continuous Improvement
Another concept of the TQM philosophy is the focus on continuous improvement. Traditional
systems assumed that once a company achieved a certain level of quality, it was successful
and needed no further improvements. There was tendency to think of improvement in terms
of plateaus that are to be achieved, such as passing a certification test or reducing the number
of defects to a certain level. Traditionally, change for American managers involves large
magnitudes, such as major organizational restructuring. The Japanese, on the other hand,
believe that the best and most lasting changes come from gradual improvements. To use an
analogy, they believe that it is better to take frequent small doses of medicine than to take
one large dose. Continuous improvement, called kaizen by the Japanese, requires that the
company continually strive to be better through learning and problem solving. Because we
can never achieve perfection, we must always evaluate our performance and take measures
to improve it. Two approaches that can help companies with continuous improvement are:
 the plan –do– study – act (PDSA) cycle and,
 Benchmarking.

Employee Empowerment
Part of the TQM philosophy is to empower all employees to seek out quality problems and
correct them. With the old concept of quality, employees were afraid to identify problems for
fear that they would be reprimanded. Often poor quality was passed on to someone else, in
order to make it “someone else’s problem.” The new concept of quality, TQM, provides
incentives for employees to identify quality problems. Employees are rewarded for
uncovering quality problems, not punished. In TQM, the role of employees is very different
from what it was in traditional systems. Workers are empowered to make decisions relative
to quality in the production process. They are considered a vital element of the effort to
achieve high quality. Their contributions are highly valued, and their suggestions are
implemented. In order to perform this function, employees are given continual and extensive
training in quality measurement tools. To further stress the role of employees in quality, TQM
differentiates between external and internal customers. External customers are those that
purchase the company’s goods and services. Internal customers are employees of the
organization who receive goods or services from others in the company. For example, the
packaging department of an organization is an internal customer of the assembly department.
Just as a defective item would not be passed to an external customer, a defective item should
not be passed to an internal customer. TQM stresses that quality is an organizational effort.
To facilitate the solving of quality problems, it places great emphasis on teamwork. The use
of teams is based on the old adage that “two heads are better than one.”Using techniques
such as brainstorming, discussion, and quality control tools, teams work regularly to correct
problems. The contributions of teams are considered vital to the success of the company. For
this reason, companies set aside time in the workday for team meetings. Teams vary in their
degree of structure and formality, and different types of teams solve different types of
problems. One of the most common types of teams is the quality circle, a team of volunteer
production employees and their supervisors whose purpose is to solve quality problems.

Use of Quality Tools

You can see that TQM places a great deal of responsibility on all workers. If employees are to
identify and correct quality problems, they need proper training. They need to understand
how to assess quality by using a variety of quality control tools, how to interpret findings, and
how to correct problems. There are generally seven different quality tools which are often
referred to as the seven tools of quality control. They are easy to understand, yet extremely
useful in identifying and analyzing quality problems. Sometimes workers use only one tool at
a time, but often a combination of tools is most helpful. These tools are:

 Cause-and-Effect diagram/fishbone diagram

  Flow charts
 Checklists
 Control charts
 Scatter diagram
 Pareto Chart
 Histograms

Product Design
Quality Function Deployment a critical aspect of building quality into a product is to ensure
that the product design meets customer expectations. This typically is not as easy as it seems.
Customers often speak in everyday language. For example, a product can be described as
“attractive,” “strong,” or “safe.” However, these terms can have very different meaning to
different customers. What one person considers to be strong, another may not. To produce
a product that customers want, we need to translate customers’ everyday language into
specific technical requirements. However, this can often be difficult. A useful tool for
translating the voice of the customer into specific technical requirements is quality function
deployment (QFD). Quality function deployment is also useful in enhancing communication
between different functions, such as marketing, operations, and engineering.

Process Management

According to TQM a quality product comes from a quality process. This means that quality
should be built into the process. Quality at the source is the belief that it is far better to
uncover the source of quality problems and correct it than to discard defective items after
production. If the source of the problem is not corrected, the problem will continue. For
example, if you are baking cookies you might find that some of the cookies are burned. Simply
throwing away the burned cookies will not correct the problem. You will continue to have
burned cookies and will lose money when you throw them away. It will be far more effective
to see where the problem is and correct it. For example, the temperature setting may be too
high; the pan may be curved, placing some cookies closer to the heating element; or the oven
may not be distributing heat evenly. Quality at the source exemplifies the difference between
the old and new concepts of quality. The old concept focused on inspecting goods after they
were produced or after a particular stage of production. If an inspection revealed defects, the
defective products were either discarded or sent back for reworking. All this cost the company
money, and these costs were passed on to the customer. The new concept of quality focuses
on identifying quality problems at the source and correcting them.

Managing Supplier Quality

TQM extends the concept of quality to a company’s suppliers. Traditionally, companies

tended to have numerous suppliers that engaged in competitive price bidding. When
materials arrived, an inspection was performed to check their quality. TQM views this practice
as contributing to poor quality and wasted time and cost. The philosophy of TQM extends the
concept of quality to suppliers and ensures that they engage in the same quality practices. If
suppliers meet preset quality standards, materials do not have to be inspected upon arrival.
Today, many companies have a representative residing at their supplier’s location, thereby
involving the supplier in every stage from product design to final production.

OBSTACLES TO IMPLEMENTING TQM

Many organization of small size operating in niche markets are sometimes comfortable with
their current state. They are satisfied with the work done, profits realized and the perception
that the customer are satisfied. This state of affairs continues until loss of market share starts
creeping in. Embracing TQM and implementing it is one way of remaining competitive and
safeguarding an organization’s market share. Implementing TQM usually encounters the
following obstacles:

1. Lack of management commitment.

2. Inability to change organization culture.
3. Improper planning.
4. Lack of continuous training and education
5. Incompatible organizational structure and isolated individuals and departments.
6. Ineffective measurement techniques and lack of access to data and results.
7. Paying inadequate attention to internal and external customers.
8. Inadequate use of employee empowerment and teamwork.
9. Failure to seek continual improvements

Quality and profitability: Research on corporate performance found out the following:
1. Product quality is an important determinant of business profitability.
2. Business that offer premium-quality products and services usually have a
higher market share and were early entrants to the market.
3. Quality is positively and significantly related to higher return on investment for
almost all kinds of products and market situations.
4. Instituting a strategy of quality improvement usually leads to increased market
share but the cost of reduced short-run profitability.
5. High quality producers can usually charge premium prices.
 Course: LDP 607: Project Total Quality Control
Introduction
Definition of a quality guru?
“A Guru is a spiritual guide who is considered to have attained complete insight. “
“A guru, by definition, is a good person, a wise person and a teacher. A quality guru should be
all of these, plus have a concept and approach to quality within business that has made a
major and lasting impact. The gurus mentioned in this section have done, and continue to do,
that, in some cases, even after their death.
In order to define Total Quality Management we need to breakdown each entity. When we
think of total we envision the whole, the entirety;
Total - The responsibility for achieving Quality rests with everyone a business no matter what
their function. It recognizes the necessity to develop processes across the business, that
together lead to the reliable delivery of exact, agreed customer requirements. This will
achieve the most competitive cost position and a higher return on investment.
Quality - The prime task of any business is to understand the needs of the customer, to
conform to specific requirements – meeting customer's expectations then deliver the product
or service at the agreed time, place and price, on every occasion. This will retain current
customers, assist in acquiring new ones and lead to a subsequent increase in market share.
Management - Is the act, manner, or practice of managing .Top management lead the drive
to achieve quality for customers, by communicating the business vision and values to all
employees; ensuring the right business processes are in place; introducing and maintaining a
continuous improvement culture. Therefore, Total Quality Management is an organizational
culture or attitude that aims to provide and continue to provide, its customers with products
and services that satisfy their needs. This culture requires all aspects of the company to "do
it right the first time”. "TQM is the process for managing quality.

2.0 TQM GURUS

The Six experts on quality: The gurus
There have been three groups of gurus since the 1940’s:
I. Early 1950’s Americans who took the messages of quality to Japan:
 W. Edwards Deming
 Joseph M. Juran
 Armand V Feigenbaum
II. Late 1950’s Japanese who developed new concepts in response to the Americans:
 Kaoru Ishikawa
 Dr Genichi Taguchi
III. 1970’s-1980’s Western gurus who followed the Japanese industrial success:

 Philip B. Crosby

DEFINITION OF QUALITY

2.1 DEMING EDWARDS: THE USER’S PERSPECTIVE

To Deming, the only meaningful definition of quality is that which the consumer specifies. A
product could meet every possible technical specification and be offered at an appropriate
price, but if it is the wrong product, it is worthless to the consumer. However, Deming also
argues that quality has a short-term and a long-term component. It is important to anticipate
the consumer’s future needs as well as those of the present in order to continue to meet the
consumer’s definition of quality and maintain a competitive advantage. It is at this point that
Deming introduces his Continuous Improvement Helix, an outgrowth of the famous Deming
Cycle (Plan, Do, Check, Act):
a. Design the product.
b. Make it; test it in the production line and the laboratory.
c. Put it on the market
d. Test it in service; find out what the user thinks of it, and why the nonuser has
not bought it.
According to Deming, these four steps, repeated continuously, will result in increasing quality
at a decreasing price. Thus, the conditions for quality as seen by the consumer are met:
knowledge of what the consumer needs at the present time, the ability to meet that need,
and the ability to anticipate the future needs of the consumer(Deming, 1986, p. 169)..

2.2 JURAN: THE MANUFACTURER’S PERSPECTIVE

Like Deming, Juran also sees quality as a concept which can only be usefully defined by the
consumer. Strictly put, Juran defines quality as "fitness for use." Under this heading, Juran
goes on further to quantify "fitness for use" in two different categories:
a. Product features that meet customer needs
b. Freedom from deficiencies
To achieve the first objective, Juran, like Deming, proposes that the producer learn what the
customer expects from the product. In many cases, this also includes determining who the
end customer really is. At this point, the task is to translate the customer demands into the
desired production specifications and features, and come up with a coherent plan to produce
them.
The second objective is achieved through measuring the results of production and how well-
received the product is in the marketplace. Anyone affected by the product is considered a
customer, according to Juran. This group includes the internal customers, and the external
customers. By comparing the actual results with the desired results, acting on deficiencies
and providing feedback into the system, continuous improvement can be attained. These
three activities - quality planning, quality control, and quality improvement - are known as
the Juran Trilogy.
Like the Deming Cycle, the Juran Trilogy is intended to be seen as an endless feedback loop,
although Juran takes the concept further and explores the practicalities of implementing such
a system for any given operation, be it service or manufacturing-related.
Whereas Deming sees quality problems as a result of poor understanding of an existing
system, Juran is of the opinion that proper planning of a system in the beginning can help the
producer avoid unnecessary rework and hidden quality costs.

2.3 FEIGENBAUM: THE MANAGEMENT PERSPECTIVE

He defined it as:” An effective system for integrating quality development, quality

maintenance and quality improvement efforts of the various groups within an organization,
so as to enable production and service at the most economical levels that allow full customer
satisfaction”.
He saw it as a business method and proposed three steps to quality namely:– Quality
leadership, Modern quality technology and Organizational commitment.
According to Armand Feigenbaum: "Quality is a customer determination based upon a
customer's actual experience with a product or service, measured against his or her
requirements -stated or unstated, conscious or merely sensed, technically operational or
entirely subjective -and always representing a moving target in a competitive market."

2.4 TAGUCHI: THE SOCIETY’S PERSPECTIVE

Taguchi presented another definition of quality. His definition stressed the losses associated
with a product. Taguchi stated that "quality is the loss a product causes to society after being
shipped, other than losses caused by its intrinsic functions." Taguchi asserted that losses in
his definition "should be restricted to two categories: (1) loss caused by variability of function,
and (2) loss caused by harmful side effects." Taguchi is saying that a product or service has
good quality if it "performs its intended functions without variability, and causes little loss
through harmful side effects, including the cost of using it."

2.5 KAORU ISHIKAWA, (DR.): THE ORGANIZATION’S PERSPECTIVE

The author defines quality as meaning not only the quality of the product but also after sales
services, quality of management, the company itself and the human being. It involves vertical
and horizontal cooperation. He believed quality must be companywide – including the
product, service, management, the company itself and the people.
Quality improvement must be companywide in order to be successful and sustainable.
Narrowly interpreted, quality means quality of product
Broadly interpreted, quality means quality of work, quality of service, quality of information,
quality of process, quality of division, quality of people, including workers, engineers,
managers, and executives, quality of system, quality of company, quality of objectives, etc.
To control quality in its every manifestation is the basic approach.

2.6 CROSBY: THE MANAGEMENT PERSPECTIVE

While Deming and Juran have mainly focused on quality as seen from a customer perspective,
Crosby tends to take a narrower, management-centered view. Crosby sees many of the more
nebulous statements about quality (delight the customer, continuous improvement, etc.) as
simply extension of a very basic definition: conformance to requirements.
In Crosby’s view, if requirements are clearly communicated to all levels of the organization,
then an attitude of "no reason for not doing it right" can be built throughout the
company. Like Deming, Crosby does focus on prevention as a means to achieving quality;
however, Crosby downplays the role of statistical analysis in favor of strategic planning. The
numbers, according to Crosby, are guidelines and should not dictate the process. However,
Crosby makes a point of mentioning that drawing comparisons between himself and other
quality leaders (particularly Deming and Juran) is meaningless, as each is focusing on his own
field of expertise: Deming as a statistician, Juran as an engineer, and Crosby as a manager. To
aid managers in tracking the cost of doing things wrong, he developed the following formula:
Cost of Quality (COQ) = Price of Conformance (POC) + Price of non-conformance (PONC).
The POC refers to the cost of getting things done right the first time. PONC provides
management with information regarding the wasted cost and a visible indication of progress
as the organization improves.
Crosby’s measurements are more conceptual, consisting of his Complete Transaction Rating
(CTR) and the less qualitative Price of Non-Conformance (PONC).
The CTR is simply a rating on a scale of 0 to 1, with 1 being the desired level, of how well a
supplier is meeting requirements.
The PONC is really an outgrowth of the CTR, and is calculated by determining the amount of
time needed to repeat or correct an error in production or service, and the amount of money
spent in the process. According to Crosby, who goes to great lengths to illustrate his point,
these measures are the most effective and ultimately the only way to measure quality in a
process.
3.0 GURUS CONTRIBUTIONS TO QUALITY PRINCIPLES

3.1 DEMING (User Perspective)

Deming takes a systems and leadership approach to quality. Concepts associated with his
approach include:
a) The System of Profound Knowledge
b) The Plan–Do–Check–Act Cycle
c) “Prevention by Process Improvement”
d) The Chain Reaction for Quality Improvement
e) Common Cause and Special Cause Variation
f) The 14 Points; and
g) The Deadly and Dreadful Diseases
DEMING'S SYSTEM OF PROFOUND KNOWLEDGE
What Deming calls profound knowledge is knowledge universal to all businesses, large or
small, in service or manufacturing, profit making or not-for-profit. The prevailing style of
management must undergo transformation. A system cannot understand itself. The
transformation requires a view from outside. It is needed to provide an outside view, which
is called a system of profound knowledge. It provides a map of theory by which to understand
the organizations that we work in.
The first step is transformation of the individual. This transformation is discontinuous. It
comes from understanding of the system of profound knowledge.
The individual, transformed, will perceive new meaning to his life, to events, to numbers, to
interactions between people. Once the individual understands the system of profound
knowledge, he will apply its principles in every kind of relationship with other people. He will
have a basis for judgment of his own decisions and for transformation of the organizations
that he belongs to. The individual, once transformed, will:
 Set an example
 Be a good listener, but will not compromise
 Continually teach other people
 Help people to pull away from their current practice and beliefs and move into the
new philosophy without a feeling of guilt about the past
The layout of profound knowledge appears here in four parts, all related to each other:
 Appreciation for a system
 Knowledge about variation
 Theory of knowledge
  Psychology

APPRECIATION OF A SYSTEM:
A system is complex. It is made up of interrelated components of people and processes with
a clearly defined, shared destination or goal. Everyone must share a distinct understanding
and commitment to the aim or purpose of the system.
Appreciation of a system depends on quality leaders’ understanding the interconnectedness
and interdependence the interconnectedness must be clearly defined and documented for
successful flow or continuous improvement of the process. The objective of an organization
is the optimization of the total system and not the optimization of the individual subsystems.
The total system consists of all constituents—customers, employees, suppliers, shareholders,
the community, and the environment. A company's long-term objective is to create a win-win
situation for all of its constituents.
Optimization of a system can occur when all interconnecting components are orchestrated to
achieve the organization’s goal. The people, free of fear and competition within the system
can band together for optimization of the system. In a quality system, everybody gains. The
traditional “management by objectives” philosophy fails to orchestrate the components,
leaving each one to do a job separate from the other components and often causing them to
work against the successes of others. No one component may seek its own reward without
destroying the balance of the system. Each component is obligated to contribute its best to
the system as a whole. In all negotiations the results must be win/win.
A flow chart can be used to clearly illustrate the components of a system and their
interconnectedness. It can serve as an organizational diagram. Each person must understand
their job, know how to do it well, and understand the interdependent role he/she plays with
the rest of the system. Using flow charts, people can see how each person’s is interrelated to
accomplish the organizational aim for the good of all.
Competitiveness within the system leads to loss for the system. Each component works
interdependently with the other components.

THEORY OF VARIATION.

No two things are exactly alike, not people, not processes. Variation is a natural, inevitable
part of life. The goal of quality or continuous improvement is to reduce the range of variation
over time, in addition to adjusting the process level to the desired level. Almost all variation
within a process is due to chance causes, inherent in the design of the process. Management
controls the design of the process. People within the system are limited by that design
Deming's philosophy focuses on improving the product and service uncertainty and variability
in design and manufacturing processes. Deming believed that variation is a major cause of
poor quality. In mechanical assemblies, for example, variations from specifications for part
dimensions lead to inconsistent performance and premature wear and failure. Likewise,
inconsistencies in service frustrate customers and hurt companies' reputations. Deming
taught Statistical Process Control and used control charts to demonstrate variation in
processes and how to determine if a process is in statistical control.

THEORY OF KNOWLEDGE.

The theory of knowledge, as stated here, implies that system improvement depends on
continuous study of the organization. Improvement is learning and developing new
knowledge about the system. The learning process requires several steps: 1) forming a theory,
2) making predictions based on past experiences, 3) testing the theory, 4) checking the results.
Building knowledge through systematic analysis of short-term/long-term results and revision
and extension to the theory provides the learning process.

THEORY OF PSYCHOLOGY.

The system self-organizes around its Identity. That includes its vision, purpose, guiding
principles, values, history, theory of success and shared aspirations. A clearly designed, shared
identity allows the organization to self-organize in alignment with the identity desired by
leadership. All systems are complex adaptive systems which adapt around their identity. The
identity may be designed by leadership or it may occur without design, more by accident. If it
is allowed to occur accidentally it will lack clear, shared direction. Thus empowerments will
not be fully successful.

DEMING'S FOURTEEN POINTS

Deming formulated the following Fourteen Points to help organizations to survive and
flourish in the long term:
a. Create a constancy of purpose to improve products and services - take a longer
term view, and innovate;
b. Adopt the new philosophy - accept the management style which promotes constant
improvement;
c. Cease dependence on mass inspection - concentrate on improving processes;
d. End the practice of awarding business on the basis of price tag alone, building up
relationships with fewer suppliers to understand jointly specifications of and uses
for materials and other inputs;
e. Constantly and forever improve the system - search continually for problems in all
processes. It is management’s job to work on the system;
f. Institute modern methods of training on the job - for all, to make the best use of
every employee;
g. Institute modern methods of supervision - managers to focus on quality not
numbers;
 h. Drive out fear - so that people work more effectively;
i. Break down barriers between departments - team working to tackle problems;
j. Eliminate numerical goals for the workforce - eliminate slogans and exhortation,
make reasonable requests of the workforce;
k. Eliminate work standards and numerical quotas - focus on quality and provide
support;
l. Remove barriers that rob workers of pride in their work - for example, defective
materials, poor tools, lack of management support;
m. Institute a vigorous program of education and training - for continual updating and
improvement;
n. Create a top management structure to push every day on the above 13 points. Top
management commitment is where it begins and ends.

THE DEMING CYCLE

The steps in the Deming PDCA or PDSA Cycle as shown in below:

1. Plan a change or test (P).
2. Do it (D). Carry out the change or test, preferably on a small scale.
3. Check it (C). Observe the effects of the change or test. Study it (S).
4. Act on what was learned (A).
5. Repeat Step 1, with new knowledge.
6. Repeat Step 2, and onward. Continuously evaluate and improve.

Fig.1
Deming's PDCA Cycle

3.2 JURAN (manufacture’s perspective)

Juran proposes a strategic and structured approach to achieve quality including:

i. The Spiral of Progress in Quality
 ii. The Breakthrough Sequence
iii. The Project–by–Project Approach
iv. The Juran Trilogy, and
v. The principle of the Vital Few and Trivial Many.

Ten Steps to Quality Improvement

The Spiral of Progress in Quality

Juran stresses that any organization produces and distributes its products through a series
of specialized activities carried out by specialized departments. These activities (actions)
are depicted by the spiral of progress in quality (Juran and Gryna, 1988, p. 2.4). The spiral
shows actions necessary before a product or service can be introduced to the market.
Each specialized department in the spiral [e.g., customer service, marketing, purchasing] is
given the responsibility to carry out its assigned special function.
In addition, each specialized department is also assigned a share of the responsibility of
carrying out certain company-wide functions such as human relations, finance, and quality
(Juran & Gryna, 1988, p. 2.4). Quality results from the interrelationship of all departments
within the spiral. Juran talks about quality function to describe activities through which the
departments around the spiral can attain quality.
Quality improvement projects are carried out throughout the organization. The approach
includes:
i. Identifying the activities that could meet the company s goals of fitness for use.
ii. Assigning the activities to the various departments and organizations around
the spiral.
iii. Providing the facilities and tools needed to conduct these activities.
iv. Conducting the assigned activities within the designated departments.
v. Ensuring that these activities are properly carried out.
vi. Coordinating the departmental activities.

Breakthrough Sequence:
Juran’s philosophy addresses improvement and innovation in terms of breakthrough. He
defines breakthrough as a dynamic, decisive movement to new, higher levels of performance
(Juran,1964). His breakthrough sequence involves activities that, if carried out properly, will
result in improvements in quality and will eventually result in unprecedented performance
that will help the organization launch innovative products. Breakthroughs can lead to: (1)
attainment of quality leadership, (2) solution to an excessive number of field problems, and
(3) improvement of the organization s public image.
According to the author, breakthrough and control are part of a continuing cycle of gains and
plateaus in performance, and he considers that all managerial activity is directed at either
breakthrough or control (Juran, 1964). Juran further observes that all breakthroughs follow
the same sequence:
i. Policy making
ii. Setting objectives for breakthrough
iii. Breakthrough in attitudes
iv. Use of Pareto principle
v. Organizing for breakthrough in knowledge
vi. Creation of steering arm
vii. Creation of diagnostic arm
viii. Diagnosis
ix. Breakthrough in cultural pattern
x. Transition to the new level
Project-by-Project Approach:
The quality improvement methodology, as depicted by Juran, requires project-by-project
implementation. Two kinds of teams are formed, the steering arm and the diagnostic arm, to
work on analysing problems. A committee of managers is formed to solicit project
nominations from all employees, to select that year’s projects, and to appoint teams to
address each one.
Typically, large numbers of project teams must be formed, depending on how many projects
have been selected. His approach requires that members of the team develop skills in team
leadership and team participation and acquire knowledge of problem-solving tools. Also, all
employees need to participate in the improvement process and have the skills needed to
make improvements.

The Juran Trilogy

This trilogy states that management for quality consists of three interrelated quality-oriented
processes--quality planning, quality control, and quality improvement (Juran, 1986).
 Quality planning's purpose is to provide operators with the ability to produce goods
and services that can meet customers' needs.
In the quality planning stage, an organization must determine who the customers
are and what they need, develop the product or service features that meet
customers' needs, develop processes which are able to deliver those
products and services, and transfer the plans to the operating
forces. If quality planning is deficient, then chronic waste occurs.
  Quality control is used to prevent things from getting worse. It’s concerned with
holding onto gains and not letting waste increase. Quality control is the inspection
part of the Quality Trilogy where operators compare actual performance with plans
and resolve the differences. Chronic waste should be considered an opportunity for
quality improvement, the third element of the Trilogy.
 Quality improvement encompasses improvement of fitness-for-use and error
reduction, seeks a new level of performance that is superior to any previous level,
and is attained by applying breakthrough thinking. It’s concerned with lowering the
cost of poor quality in existing processes, but, more importantly, are responsible for
using the lessons learned for seeking innovative ways to achieve better levels of
performance. In this respect, Juran s approach addresses continuous improvement.
Each process in the trilogy (planning, control, and improvement) is universal (inherent in
organizations focusing on quality). Relevant activities include identifying customers,
establishing measurements, and diagnosing causes. Juran compares the activities of the
trilogy with those of financial operations. Money is the language of management and, in his
terms, quality planning is analogous to budgeting, quality control to cost control, and quality
improvement to cost reduction.

The Vital Few and the Trivial Many

Because Juran emphasizes prioritization of problems to be solved, the Pareto diagram is an
especially useful tool to him. The diagram is based upon the principle developed in 1897 by
the Italian economist Vilfredo Pareto. Pareto conducted studies of wealth distribution. He
found that the vast majority of wealth in his society was held by a remarkably small
percentage of the population.
In general, the Pareto principle states that a few factors account for the largest percentage of
a total.
Juran applied this principle during the strategic goal deployment process as follows:
A relatively few number (roughly 20%) of the “projects” selected during the quality
improvement process will provide the bulk (roughly 80%) of the improvement. Most of the
cost of poor quality can be attributed to a relatively small number of causes--”The Vital Few”
Identification of the “Vital Few” projects should receive TOP priority Beyond the “Vital Few”
projects are the “Useful Many” projects collectively they contribute only a minority of the
Improvement, but they provide most of the opportunity for employee participation choice of
these projects is made through the nomination selection process.

Ten Steps to Quality Improvement

Juran believed quality is associated with customer satisfaction and dissatisfaction with the
product, and emphasised the necessity for ongoing quality improvement through a
succession of small improvement projects carried out throughout the organisation. His ten
steps to quality improvement are:
 • Build awareness of the need and opportunity for improvement
• Set goals for improvement
• Organise to reach the goals
• Provide training
• Carry out projects to solve problems
• Report progress
• Give recognition
• Communicate results
• Keep score of improvements achieved
• Maintain momentum

3.3 FEIGENBAUM (management perspective)

Fiegenbaum is the originator of Total Quality Control. He sees quality control as a business
method rather than technically, and believes that quality has become the single most
important force leading to organisational success and growth. According to him management
fundamentals of Total Quality include:
ii. There is no such thing as a permanent quality level.
iii. A hallmark of good management is personal leadership in mobilizing the quality
knowledge, skill, & positive attitudes of everyone in the organization to recognize
the importance of quality
iv. Quality is essential for successful innovation because of two reasons:
 The greatly increased speed of new product development.
 When a product design is likely to be manufactured in several countries
the entire development process must be clearly & visibly structured.
iv. Quality & cost are complementary not conflicting business objectives

3.4 GENICHI TAGUCHI, (DR.) (SOCIETY PESPECTIVE)

Robust Design focuses on improving the fundamental function of the product or process, thus
facilitating flexible designs and concurrent engineering. Taguchi product development
includes three stages:
 System design (the non-statistical stage for engineering, marketing, customer
and other knowledge)
 Parameter stage (determining how the product should perform against
defined parameters;
  tolerance design (finding the balance between manufacturing cost and loss).
Taguchi proposed that as conformance values moves away from the target, loss increases as
a quadratic function. This means that smaller differences from the target result in smaller
costs.

Taguchi Loss Functions

Model introduced by Dr. Genichi Taguchi used to approximate the financial loss
for any particular deviation in a product using the best specification target and for
the amount of variation in any process.

The model argues that there is an increasing loss (both for producers and for society
at large), which is a function of the deviation or variability from the best or perhaps target
value of a parameter. The greater the deviation from target, the greater is the loss. The
notion that loss is dependent on variation is very well established in some design theories,
and at a technique level is associated with the assistance and the cost related to
dependability.

Formulas:
Loss at a point: L(x) = k*(x-t) ^2
k = loss coefficient
x = measured value
t = target value

Average Loss of a sample set: L = k*(s^2 + (pm - t) ^2)

s = standard deviation of sample
pm = process mean

Total Loss = Avg. Loss * number of samples

Philosophy of the Taguchi Method

a. Quality should be designed into a product, not inspected into it. Quality is
designed into a process through system design, parameter design, and tolerance
design.
Parameter design, which will be the focus of this article, is performed by determining what
process parameters most affect the product and then designing them to give a specified
target quality of product. Quality "inspected into" a product means that the product is
produced at random quality levels and those too far from the mean are
simply thrown out.
b. Quality is best achieved by minimizing the deviation from a target. The product
should be designed so that it is immune to uncontrollable environmental factors. In other
words, the signal (product quality) to noise (uncontrollable factors) ratio should be high.
 c. The cost of quality should be measured as a function of deviation from the standard
and the losses should be measured system wide. This is the concept of the loss function, or
the overall loss incurred upon the customer and society from a product of poor quality.
Because the producer is also a member of society and because customer dissatisfaction will
discourage future patronage, this cost to customer and society will come back to the
producer.

3.5 KAORU ISHIKAWA, (DR.) (organization’s perspective)

Ishikawa believed that quality improvement initiatives must be organization-wide in order to
be successful and sustainable over the long term. He invented a diagram which is sometimes
called an "Ishikawa diagram” or a "fishbone diagram" because of the way it looks. It
graphically illustrates the relationship between a given outcome and all the factors that
influence the outcome.
Constructing a Cause-and-Effect Diagram can help your team when you need to
 Identify the possible root causes, the basic reasons, for a specific effect, problem, or
condition.
 Sort out and relate some of the interactions among the factors affecting a particular
process or effect.
 Analyze existing problems so that corrective action can be taken.

Fig. 2 Basic sketch of cause and effect

3.6 CROSBY
Crosby s main point is that quality is achieved by preventing defects and conforming to
requirements. His approach to quality is best described by the following concepts:
 Do It Right the First Time?
  Zero Defects and Zero Defects Day
 The Four Absolutes of Quality
 The Prevention Process
 The Quality Vaccine and
 The Six C s.

Do It Right the First Time?

Crosby’s approach focuses on doing things right the first time and every time. There is no
place in his philosophy for differing levels of quality or categories of quality, e.g. high/low,
good/poor.
He believes there should be no reason for planning and investing in strategies that are
designed in case something does not conform to requirements and goes wrong. He stresses
that the way to manage quality is by prevention, not detection and testing. To Crosby, any
product that falls within its design specifications is a quality product (Garvin & March, 1986).
Crosby addresses the need to change management’s perception of and attitudes about
quality. He has found it is a common attitude among managers to believe that error is
inevitable, it is a normal part of business life, and one needs to cope with it.
He believes management creates most of its problems through its attitudes and practices in
terms of what is rewarded and supported in an organization. For example, if adherence to
schedule is reinforced over quality, then schedule will become the focus of the work.

Zero Defects and Zero Defects Day:

The ultimate goal of his quality improvement process is Zero Defects or defect-free" products
and services. Contrary to what is generally believed, Zero Defects is not just a motivational
slogan, but an attitude and commitment to prevention. Zero Defects does not mean that the
product has to be perfect. It does mean that every individual in the organization is committed
to meet the requirement the first time, every time, and that not meeting the requirement is
not acceptable. To get everyone involved in the process of quality improvement, Crosby
stresses individual conformance to requirements. To Crosby, when people are asked to do it
right the first time, requirements are the it (Crosby, 1987).
His approach provides for the establishment of a Zero Defects Day, a day that provides a
forum for management to reaffirm its commitment to quality and allows employees to make
the same commitment.
Four Absolutes of Quality:
Quality improvement begins with what Crosby calls the four absolutes of quality
management, considered by him to be the core concepts of the quality improvement process.
The four absolutes are:
 I. Quality is conformance to the requirements: All the actions necessary to run an
organization, produce a product and or service, and deal with customers must be met and
agreed. If management wants people to do it right the first time, they must clearly
communicate what it is and help them achieve it through leadership, training, and fostering
a climate of cooperation.
ii. The system of quality is prevention: The system that produces quality is prevention
(i.e., eliminating errors before they occur). To Crosby, training, discipline, example, and
leadership produce prevention. Management must consciously commit themselves to a
prevention-oriented work environment.
iii. The performance standard is Zero Defects (Do it right the first time): The attitude
of close enough is not tolerated in Crosby s approach. Errors are too costly to ignore. Leaders
must help others in their pursuit of conforming to requirements by
allocating resources for training, providing time, tools, etc.,
to all employees.
iv. The measurement of quality is the price of non-conformance: Non-conformance is
a management tool for diagnosing an organization s effectiveness and efficiency.
To implement his quality improvement process, Crosby delineates a 14-step approach
consisting of activities that are the responsibility of top management, but also involve
workers. The 14 steps represent Crosby s techniques for managing quality improvement and
communicating the four absolutes. His fourteen steps to quality improvement are:
a. Management is committed to a formalised quality policy
b. Form a management level quality improvement team (QIT) with
responsibility for quality Improvement process planning and administration
c. Determine where current and potential quality problems lie
d. Evaluate the cost of quality and explain its use as a management tool to
measure waste
e. Raise quality awareness and personal concern for quality amongst all
employees
f. Take corrective actions, using established formal systems to remove the
root causes of problems
g. Establish a zero defects committee and programme
h. Train all employees in quality improvement
i. Hold a Zero Defects Day to broadcast the change and as a management
recommitment and Employee commitment
j. Encourage individuals and groups to set improvement goals
 k. Encourage employees to communicate to management any obstacles they
face in attaining their Improvement goals
l. Give formal recognition to all participants
m. Establish quality councils for quality management information sharing
n. Do it all over again – form a new quality improvement team

Prevention Process
Crosby’s approach addresses prevention rather than inspection and correction of errors. He
says that prevention involves thinking, planning, and analysing processes to anticipate where
errors could occur, and then taking action to keep them from occurring. To Crosby, problems
usually arise because product or service requirements are either lacking or in error. His
prevention process begins by establishing the product or service requirement, developing the
product or service, gathering data, comparing the data to the requirement, and taking action
on the result. Crosby suggests this is a continuing activity.

Quality Vaccine
Crosby sees problems as bacteria of non-conformance that must be vaccinated with
antibodies to prevent problems (Crosby, 1984).
The guru has formulated a quality vaccine that consists of three distinct management actions-
-determination, education, and implementation.
Top management is responsible for continually administering the vaccine.
Determination surfaces when management sees the need to change and recognizes that
change requires management action. Education is the process of providing all employees with
the common language of quality, helping them to understand what their role is in the quality
improvement process, as well as helping them to develop a knowledge base for preventing
problems. The third action is implementation, which consists of the development of a plan,
the assignment of resources, and the support of an environment consistent with a quality
improvement philosophy. In this phase, management must lead by example and provide
follow-up education.
Six C s
To Crosby, education is a multi-stage process that every organization must go through, a
process he calls the Six C s (Crosby, 1984).

The first is comprehension, which addresses the importance of understanding what is meant
by quality. Comprehension must begin at the top and eventually include all employees.
Without comprehension, quality improvement will not occur.

The second is commitment, which also must begin at the top and represents the stage when
managers establish a quality policy.
The third is competence; developing an education and training plan during this stage is critical
to Implementing the quality improvement process in a methodical way.

The fourth is communication; all efforts must be documented and success stories published
so that complete understanding of quality by all people in the corporate culture is achieved.

The fifth is correction, which focuses on prevention and performance.

The sixth is continuance, which emphasizes that the process must become a way of life in the
organization. Continuance is based on the fact that it is never cheaper or quicker to do
anything right the second time, so quality must be integrated into all day-to-day operations
(Quality Process Improvement Management College [course materials], 1987).

4.0 STRENGTHS AND WEAKNESSES IN THE GURUS CONTRIBUTIONS TO QUALITY

PRINCIPLE

4.1 DEMING
STRENGTHS OF DEMING PHILOSOPHY:
 The systems logic, particularly the idea of internal customer-supplier relationship
 Management before technology
 Emphasis on management leadership
 The sound statistical approach
 Awareness of different social-cultural contexts

WEAKNESESS OF DEMING PHILOSOPHY:

 Lack of well-defined methodology
 The work is not adequately grounded in human relations theory
 The approach is unlikely to help in an organization with a biased power structure

4.2 JURAN
STRENGTHS OF JURANS PHILOSOPHY:
 New understanding of the customer, referring to both internal and external customer
 Management involvement and commitment is stressed
 Its concentration on the genuine issues of management practices

WEAKNESESS OF JURAN’S PHILOSOPHY:

 The emphasis on management’s responsibility for quality fails to get the grip with the
literature on motivation and leadership.
 The contribution that the worker can make is undervalued.
 The methods advocated are traditional and old fashioned, getting at the basic control
system and failing to deal adequately with the human dimensions of organizations
failing to address culture and politics
 4.3 CROSBY
STRENGTHS OF CROSBY’S PHILOSOPHY:
 Emphasis on interaction and communications between companies and their current
and potential customers
 Emphasize the strategically planned, step by step process of quality improvement
rather than shortcut to quality
 Rewards based on results
 Clarity
 Recognition of worker participation
 Rejection of a tangible quality problem, acceptance of the idea of solutions

WEAKNESESS OF CROSBY’S PHILOSOPHY:

 Difficulties catering to all tastes
 Quality is not everything
 A danger of misdirected effort from blaming workers
 The potential of “zero defect” to be interpreted as zero risk
 Emphasis on marketing more than recognition of barriers

4.4 TAGUCHI
STRENGTHS OF TAGUCHI’S PHILOSOPHY:
 It perceives that quality is a design requirement
 His approach recognizes the systemic impact of quality
 It is a practical method for engineers
 It guides effective process control
WEAKNESESS OF TAGUCHI’S PHILOSOPHY:
 Its usefulness is biased towards manufacturing
 Guidance is not given on management or organizational issues
 It places quality in the hands of experts
 It says nothing about people as social animals

4.5 ISHIKAWA
STRENGTHS OF ISHIKAWA’S PHILOSOPHY:
 Its emphasis on participation
 The variety of qualitative and quantitative methods employed
 Its whole system view
 The relevant of quality control cycles to all sectors of economy

WEAKNESESS OF ISHIKAWA’S PHILOSOPHY:

 Fishbone diagrams (cause and effect) are systematic but not systemic
 Quality control cycle depend upon management support
  It fails to address coercive contexts

4.6 ARMAND V. FEIGENBAUM

STRENGTHS OF ARMAND V. FEIGENBAUM’S PHILOSOPHY:
 It places a total or whole approach to quality control
 It places emphasis on the importance of management
 Socio-technical systems thinking is taken into account
 Participation is promoted

WEAKNESESS OF ARMAND V. FEIGENBAUM’S PHILOSOPHY:

 The work is systemic but not complementarist
 The breath of management theory is recognized but not unified
 The political or coercive context is not addressed.

5.0 CONCLUSION AND RECOMMENDATIONS

The gurus of the quality improvement sciences are in three distinct but overlapping
categories. In the statistical category are Gauss, Pareto, Shewhart, and Fisher. In the
management category are Juran, Crosby, and Feigenbaum, whereas in the execution category
are Deming, Shainin, and Taguchi.
On the technical front, SPC, JIT, DOE, Taguchi methods, QFD, and TPM philosophies and
methodologies have been attempted; On the system front, ISO9000 has been interpreted as
a must; On the human front, Total Employee Involvement (TEI), participative management,
and
quality circles have attracted the attention of many companies; On the motivational front,
many quality improvement awards have been instituted. By and large, quality is not yet
integral to all businesses or all activities in any given business.
Quality improvement efforts in the 1980's and continuing into 1990's throughout the world
have been fueled by a host of good ideas to make quality integral to the business decision
making process. The Total Quality Management (TQM) concept therefore has the potential
to integrate all the improvement philosophies proposed by the TQM gurus which have herein
been discussed. However, TQM can end up being diffused like all other improvement
philosophies if the TQM concept is not well executed. Many companies may choose to listen
to only one quality guru, assuming that listening to many might confuse them. Other
companies may listen to all of the experts and continuously synthesize ideas to make them
applicable to their own operations. The latter is the recommended choice.
It should be noted here that the elements of TQM are rather straight forward; but the
execution is quite not as easy.
After accomplishing the initial conceptual journey, many companies falsely tend to believe
that TQM is simply a matter of applying common sense.
Any one quality improvement expert does not have all the answers. The success of TQM is
dependent on the prudent choices: We must learn to synthesize good ideas and make them
integral to business practices; we must acquire the actual experiences of solving problems
rather than search for and focus on methods; we must redirect our focus from productivity
improvement to quality improvement and finally, we must focus on quality improvements
and let a quality system emerge based on improvement experiences. Therefore to solve real-
life problems, one has to be able to select, sequence, and synthesize the messages from
various experts to come to a useful conclusion.
TOTAL QUALITY MANAGEMENT

CONTRIBUTIONS BY TQM GURUS

1.O Origins of Quality Management

Quality management in is not derived from a single idea or person. It is a collection of ideas,
and has been called by various names and acronyms:

 TQM, total quality management;

 CQU, continuous quality improvement;
 SQC, statistical quality control;
 TQC, total quality control, etc.

However each of these ideas encompasses the underlying idea of productivity initiatives
that increase profit by improving the product.

The roots of quality can be traced even further back, to Frederick Taylor in the 1920s. Taylor
is the "father of scientific management." As manufacturing left the single craftsman's
workshop, companies needed to develop a quality control department. As manufacturing
moved into big plants, between the 1920s and the 1950s, the terms and processes of quality
engineering and reliability engineering developed. During this time productivity was
emphasized and quality was checked at the end of the line. As industrial plants became
larger, post-production checks became more difficult and statistical methods began to be
used to control quality. This was called reliability engineering because it moved quality
control toward building quality into the design and production of the product. Taylor was
the pioneer of these methods. Although some writers consider Taylor's methods part of
classical management in opposition to the quality management system, both Deming and
Juran both used statistical methods for quality assurance at Bell Telephone laboratories.

1.10 Deming’s Contributions

Edward Deming was an American who worked in the 1930s with Walter A. Shewhart at Bell
Telephone Company. Shewhart was a statistician who had the theory that product control
could best be managed by statistics. He developed a statistical chart for the control of
product variables. Deming developed a process, based on Shewhart's, using statistical
control techniques that alerted managers of the need to intervene in the production
process. Deming developed the chain reaction:

 as quality improves, costs go down and productivity goes up;

 this leads to more jobs, greater market share, and long-term survival.
Deming developed fourteen points for management which can be summarized as:

1. Create a plan; publish the aims and purposes of the organization.

 2. Learn and adopt the new philosophy of quality.
3. Understand the purpose of inspection; stop depending on inspection.
4. Stop awarding business based on price alone.
5. Improve the system constantly.
6. Institute training.
7. Teach and institute leadership.
8. Drive out fear, create trust, and create a climate for innovation.
9. Optimize the efforts of teams, groups and staff areas.
10. Eliminate exhortations, and targets for the work force; provide methods of
achievement.
11. Eliminate numerical quotas for the work force.
12. Remove barriers that rob people of pride for workmanship.
13. Encourage education and self-improvement for everyone.
14. Make action to accomplish the transformation, make it everyone's job.

Besides the fourteen points, Deming is known for the Deming Cycle and the Seven Deadly
Diseases. The Deming Cycle is illustrated in Figure 1. It involves five steps: consumer
research and planning of the product (plan), producing the product (do), checking the
product (check), marketing the product (act), and analyzing how the product is received
(analyze.)

The Seven Deadly Diseases can be summarized as:

1. Lack of constancy of purpose to plan products and services.

Figure 1
The Deming Cycle

2. Emphasis on short-term profits.

3. Personal review systems for managers and management by objectives.
4. Job hopping by managers.
5. Using only visible data in decision making.
6. Excessive medial costs.
 7. Excessive costs of liability driven up by lawyers that work on contingency.

1.20 Juran’s Contributions

Joseph Moses Juran (December 24, 1904 – February 28, 2008) was a 20th century
management consultant who is principally remembered as an evangelist for quality and
quality management, writing several influential books on those subjects

Joseph M. Juran, like Deming, went to Japan in 1954 and assisted the Japanese in their quest
to achieve quality. Like Deming, Juran emphasized planning, organizing and controlling.
However he emphasized customer satisfaction more than Deming did and focused on
management and technical methods rather than worker satisfaction. Juran was a prolific
author, publishing over a dozen books. His most influential book Quality Control Handbook
(later called Juran's Quality Handbook )was published in 1951 and became a best seller.

Juran argued that the production process should: "concentrate on the 'vital few' sources of
problems; don't be distracted by less important problems."

The following were the three major contribution of Juran:-

1. Quality planning (determine customer needs, develop product in response to needs).

2. Quality control (assess performance, compare performance with goals, act on
differences between performance and goals).
3. Quality improvement (develop infrastructure, identify areas of improvement and
implement projects, establish project team, provide teams with what they need).

Juran's ten steps to quality improvement are:

1. Build awareness of opportunities to improve.

2. Set goals.
3. Organize to reach goals.
4. Provide training.
5. Carry out projects to solve problems.
6. Report progress.
7. Give recognition.
8. Communicate results.
9. Keep score.
10. Maintain momentum by making annual improvement part of the systems and
processes of the company.
1.30 Philip Bayard Grosby’s Contributions (Born June 18, 1926 in Wheeling, West Virginia,
USA )

Philip Cosby developed a theory of Zero Defects in production process and the following
were his arguments:-

(1) quality is defined as conformance to requirements, not goodness;

(2) the system for achieving quality is prevention, not appraisal;

(3) the performance standard is zero defects, not that's close enough; and

(4) the measure of quality is the price of non-conformance, not indexes.

Like Deming, Crosby had fourteen points:

1. Manage commitment, that is, top level management must be convinced and
committed and communicated to the entire company.
2. Quality improvement team composed of department heads, oversee improvements.
3. Quality measurement are established for every activity.
4. Cost of quality is estimated to identify areas of improvement.
5. Quality awareness is raised among all employees.
6. Corrective action is taken.
7. Zero defects is planned for.
8. Supervisor training in quality implementation.
9. Zero defects day is scheduled.
10. Goal setting for individuals.
11. Error causes are removed by having employees inform management of problems.
12. Recognition is given, but it is non-financial, to those who meet quality goals.
13. Quality councils meet regularly.
14. Do it all over again (i.e., repeat steps one through thirteen).

Looking at the history of quality management, we see several stages of development. The
first was quality control, which involved setting up product specifications and then inspect
the product fore for leaves the plant. The second state is quality assurance, which involved
identifying the quality characteristics and procedures for quantitatively evaluating and
controlling them. The next phase is the true total quality control, a term actually coined by
Feingenbaum in 1983. At this stage the quality became a total organization effort. It
effected production, profit, human interaction and customer satisfaction. The fourth stage is
total quality management. In TQM the customer is the center and quality is an organization-
wide effort.
1.40 Taguchi’s Contribution

Gen'ichi Taguchi Taguchi Gen'ichi) (born January 1, 1924, in Tokamachi, Japan) is an

engineer and statistician. From the 1950s onwards, Taguchi developed a methodology for
applying statistics to improve the quality of manufactured goods. Taguchi methods have
been controversial among some conventional Western statisticians, but others have
accepted many of the concepts introduced by him as valid extensions to the body of
knowledge.

Taguchi has made a very influential contribution to industrial statistics.

Key elements of his quality philosophy include the following:

1. Taguchi loss function, used to measure financial loss to society resulting from poor
quality;
2. The philosophy of off-line quality control, designing products and processes so that
they are insensitive ("robust") to parameters outside the design engineer's control;
and
3. Innovations in the statistical design of experiments, notably the use of an outer array
for factors that are uncontrollable in real life, but are systematically varied in the
experiment.

Genichi Taguchi’s Methods of Controlling Quality

Taguchi claims that quality is greatly determined at the design level. In addition to quality
control in production, he emphasizes quality control in four other functions:

(1) product planning,

(2) product design,
(3) process design,
(4) Production service after purchase.

QUALITY MANAGEMENT PRINCIPLES

These are considered as comprehensive and fundamental rules of leading and operating an
organization that aim at continuously improving performance over the long-term by
focusing on customers while addressing the needs of all other interested parties.

The quality management principles are derived from ISO principles that were developed by
a technical committee. The committee came up with guidance for quality management in
projects and are founded on 8 principles.

The 8 principles enable an organization to determine the right thing to do and also
understand why they are doing it.
The 8 quality management principles are:

1. Customer focus,
2. Leadership,
3. Involvement of people,
4. Process approach,
5. System approach to management,
6. Continual improvement,
7. Factual approach to decision making,
8. Mutually beneficial supplier relationships.

1 Customer Focus:

Statement:

Organizations depend on their customers and therefore should understand current and
future customer needs. Organizations should meet customer requirements and strive to
exceed the customer’s expectations.(ISO 9000:2000 0.2 a)

Benefits:

 Increased revenue and market share obtained through flexible and fast responses
to market opportunities.
 Increased effectiveness in the use of the organization's resources to enhance
customer satisfaction.
 Improved customer loyalty leading to repeat business

Results:

 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).

Implications:

 Organization should focus their efforts in satisfying the customer

 Organizations should understand their sustenance and profitability comes from
satisfying the customer.
  Customer’s expectations are created by the market place or the dominant
competitor.

Application in project management:

 Satisfaction of the customers’ and other interested parties’ requirements is

necessary for the success of the project. These requirements should be clearly
understood to ensure that all processes focus on and are capable of meeting them.
 The project objectives should take into account the needs and expectations of the
customers and other interested parties.
 The project objectives should be documented in the project management plan and
should detail what is to be accomplished (expressed in terms of time, cost, and
product quality) and what is to be measured.
 Interfaces should be established with all the interested parties facilitating the
exchange of information as appropriate throughout the project noting that success
of one aspect/party has a bearing in the success of the other.
 Normally when conflicts arise between the customers’ requirements and other
interested parties, customers’ requirements take precedence, except in cases of
statutory or regulatory requirements.
 Throughout the project, attention will need to be paid to changes in the
requirements of the interested parties.

2 Leadership:

Statement:

Leaders establish unity of purpose and direction of the organization. They should create and
maintain the internal environment in which people become fully involved in achieving the
organizations objectives.

Benefits:

 People will understand and be motivated towards the organization's goals and
objectives.
 Activities are evaluated, aligned and implemented in a unified way.
 Miscommunication between levels of an organization will be minimized.

Results:

 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.

Implications:

 Leadership involves providing role model behavior consistent with the values of the
organization.
 Leadership seeks to have the management style, motivation trust as well as support
forming part of the internal environment and culture of the organization.

Application in project management:

 A project manager should be appointed as early as possible and assigned the
responsibility and authority for managing the project (project/team leader) ensuring
the project’s quality management system is established.
 The authority delegated to the project manager should be commensurate with the
responsibility so assigned.
 Top management of originating and project organizations should assume leadership
in creating a culture of quality. How
o Setting the quality policies and identifying the objectives,
o Providing resources and infrastructure aimed at achieving objectives.
o Provide organizational structure conducive for the purpose.
o Factual based decision making.
o Empowering and motivating the project personnel towards improved product
processes.

3 Involvement of people:

Statement:
People at all levels are the essence of an organization and their full involvement enables
their abilities to be used for the organizations’ benefit.

Benefits:
 Motivated, committed and involved people within the organization.
 Innovation and creativity in furthering the organization's objectives.
 People being accountable for their own performance.
 People eager to participate in and contribute to continual improvement.

Results:
  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.

Implications:

Involving people means sharing knowledge, organizing their contribution and experience in
a way that gains some synergy.

Application in project management:

 Project personnel should have well defined responsibility and authority for their
participation in the project.
 Competent personnel should be assigned to the project organization.
 The project personnel should be equipped with the appropriate tools, techniques
and methods to enable them control and monitor the processes.
 Where projects are multi-national or multi-cultural, joint ventures etc., then the
cross-cultural implications should be addressed.

4 Process Approach:

Statement:
The desired result is achieved more efficiently when activities and related resources are
managed as a process

Benefits:
 Lower costs and shorter cycle times through effective use of resources.
 Improved, consistent and predictable results.
 Focused and prioritized improvement opportunities.

Results:
 Systematically defining the activities necessary to obtain a desired result.
 Establishing clear responsibility and accountability for managing key activities.
 Analysing 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

Implication:
 A project has activities and resources that are necessary to get final results. They can
only be brought together by a process noting that the process is dynamic and is the
only means of making things happen.
 The processes so formed should be structured towards achieving project objectives.
They need to be progressive in order to have effectiveness and efficiency.

Application in project management:

 The project processes should be identified and documented right from the planning
phase.
 Project originating organization should communicate the experiences gained in
developing and using their own processes or those from other projects to the project
organization. (Cuts time, cost)
 Project organization should take the given experience in coming up with their own
processes but should also consider establishing any other processes that might be
unique to the project.
5 Systems approach to Management

Statement:
Identifying, understanding and managing interrelated processes as a system contributes to
the organization’s effectiveness and efficiency in achieving its objectives

Benefits:
 Integration and alignment of the processes that will best achieve the desired
results.
 Ability to focus effort on the key processes.
 Providing confidence to interested parties as to the consistency, effectiveness and
efficiency of the organization.

Results:
 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.

Implication:
 Systems are constructed by connecting inter-related processes together to deliver
systems objectives. In quality management systems the objectives should aim at
satisfying the customers and stakeholders.
 Systems approach allows for the coordination and compatibility of and
organization’s planned processes clearly defining their interfaces.

Application to project management:

 A project should be carried out as a set of inter-related and inter-dependent

processes rather than isolated tasks.
 The project organization should control the project processes while defining and
linking them to come up with the system that aligns itself with the overall project
objectives as set out by originating organization.
 There should be clear division of responsibility and authority between project and
originating organization and record to boot.
 Project organization should ensure appropriate communication processes are well
defined and information exchange between all stakeholders well facilitated.

6 Continual Improvement:

Statement:

Continual improvement of the organization’s overall performance should be a permanent

objective of the organization.

Benefits:
 Performance advantage through improved organizational capabilities.
 Alignment of improvement activities at all levels to an organization's strategic
intent.
 Flexibility to react quickly to opportunities.

Results:
 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.

Implications:

Continual improvement is the progressive improvement in organizational efficiency and

effectiveness. Doing something right today while seeking better ways of doing it tomorrow.

Application to project management.

 The use of Plan-Do-Check-Action (PDCA) to come up with improvement gaps.
 Originating and project organizations are responsible for continually seeking to
improve the effectiveness and efficiency of the processes for which they are
responsible.
 Project management should be treated as a process and not an isolated task. A
system of recording and analyzing information on the project should be put in place
for use of continual improvement process (learning from experience)
 Provisions for self assessment internal and if required external audits should be
made in order to identify opportunities for improvement.

7.Factual approach to decision making:

Statement:
Effective decisions are based on the analysis of data and information.

Data: raw facts.

Information: processed data to make it possible to make decisions

Benefits:
 Informed decisions.
 An increased ability to demonstrate the effectiveness of past decisions through
reference to factual records.
 Increased ability to review, challenge and change opinions and decisions

Results:
 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.
Implications:

Information about the projects progress and performance should be recorded in the project
log. This information should be made from observation and the recording done by a
qualified person.

Application to project management:

 Information about the projects progress and performance should be recorded e.g. in
a project log.
 The project organizations should analyze the information from performance and
progress evaluations to make effective decisions regarding the project and for
revising the project management plan.
 Information on earlier projects should be analyzed and used to support the
improvement of current or future projects.

8. Mutually beneficial supplier relationships:

Statement:
An organization and its suppliers are interdependent and a mutually beneficial relationship
enhances the ability of both to create value.

Benefits:
 Increased ability to create value for both parties.
 Flexibility and speed of joint responses to changing market or customer needs and
expectations.
 Optimization of costs and resources.

Results:
 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.
Implications:

Beneficial relationships are those in which both parties are knowledgeable and share values
and understanding.
They are aware prices of inputs and end products specifications to satisfy the end customer.
Suppliers provide quality inputs at good prices while manufactures produce quality products
to delight the customers. Not and exploitative or adversarial relationship more of
commitment to delight the end customer.

Application to project management:

 Project organization should work with suppliers in defining their strategies for
obtaining external products especially those with long leadtimes.
 Requirements for suppliers’ processes and product specifications should be
developed jointly by the project organization and its suppliers thereby benefiting
from the suppliers knowledge.
 The project organization should put into consideration the customers’ preferred list
of suppliers as well as selection criteria when assessing potential suppliers’ ability to
meet the processes and products requirements.
 Possibility of a number of projects using a common supplier should be investigated.
 QUALITY PLANNING:

Definition:

Quality planning involves setting quality objectives and then specifying the operational
processes and resources that will be needed to achieve those objectives. Quality planning is
one part of quality management.

A quality plan is a document that is used to specify the procedures and resources that will
be needed to carry out a project, perform a process, realize a product, or manage a
contract. Quality plans also specify who will do what and when.

By planning the quality one has to respect some principles:

 Customer satisfaction comes first: Quality is defined by the requirements of the

customer.
 Prevention over inspection: It's better to avoid mistakes than to inspect the result
and repair the defects.
 Management responsibility: Costs of quality must be approved by the management.
 Continuous improvement: Becoming better is an iteratively structured process.

Dangers of not setting the quality objectives:

 Repair-service behavior
o Without any clear idea of what the benchmarks are, we go in search of
things that are broken and our goal becomes fixing them.
 Know-how behavior:
o We often don’t solve the problems that need to be solved but the ones we
know how to solve
 No justification for any quality action
o “I’m doing it for quality” anarchy
o Wasting a lot of time with no alignment.

Process output in project management:

 The Quality Management Plan is a document describing how the project

management team will implement the performing organization's quality policy.
 The Quality Metrics are building a system of scales and procedures for measuring the
quality
 The Quality Checklists are building a set of documents to verify that a set of required
steps has been performed
 The Process Improvement Plan details the steps for analyzing processes that will
facilitate the identification of waste and non-value added activity [...] or targets for
improved performance.
  The Quality Baseline is the set of quality objectives which must be met by the
project.

The Planning Process:

Development is a cyclical process. It starts with plan formulation; i.e., identifying a problem
and a plan to solve this. The plan is then implemented and monitored. As a result of
monitoring and evaluation, the plan is reviewed and adjusted. Adjustments are
correspondingly made in the implementation. The iteration continues until the plan is
declared as successfully completed (or abandoned).
The first step in formulating a plan is to do a situational analysis, as shown in Figure 1 below.
Figure 1. Steps in plan formulation
Situational analysis To identify and prioritize problem situations
affecting the
target population or specific segments of the
population.

Goals, Objectives &Targets To specify the desired outcomes to be achieved by

formulation addressing the priority problem identified in the
situational
analysis.

Policy & strategy To provide a broad direction on how to achieve the

formulation
stated
goals, objectives and targets.

Program &Project To translate the policies and strategies into specific

identification
implementable activities.

To identify which programs and projects can be

funded and
Investing or Budgeting implemented according to a definite schedule or time
frame.

SITUATION ANALYSIS:

To understand the current state of a company, management must look at both its
qualitative and quantitative attributes. Historically, management has focused on the
quantitative side of the analysis, because the information is verifiable from the company’s
historical accounting information, which is centered primarily on financial statement
numbers and cost accounting numbers. But the qualitative analysis of the company
generally provides more insight about the company and its future prospects. This step will
focus on some of the common frameworks used to analyze a company, its industry, and its
position in the marketplace. Without an understanding of the industry, it is impossible to
develop an effective strategy for the company, determine the company’s critical success
factors, or develop a meaningful performance measurement system designed to create
value. It is a common belief that management should develop its strategies around the
company’s mission statement. It has been argued that a company does not own its mission,
rather, the marketplace gives it to you. It has been further said “a company’s mission is to
do what it does best better.”
Although we often think we set our mission, the marketplace really sets it for us and
ultimately determines our success or failure depending on how we respond to the
marketplace and its many influences. As management, our responsibility is to read the
marketplace, sort of like tea leaves, to determine the company’s mission and how we can do
what we are doing better than any other company. To accomplish this task management
needs to have a complete understanding of the marketplace or industry it operates in.

SWOT Analysis:

One of the simplest but perhaps most effective methods for executives to use in analyzing
their company is to perform a SWOT analysis of the company. SWOT analysis gets its name
from the four concepts it attempts to analyze—the company’s strengths, weaknesses,
opportunities, and threats. Using this simple framework will focus your activities into areas
where you are strong and where the greatest opportunities lie, while requiring you to
address your weaknesses and the new threats from your competitors or from technological
advances.
There are many benefits to using a SWOT analysis in analyzing a company. Benefits include:
 A framework for identifying and analyzing strengths, weaknesses, opportunities, and
threats.
 An impetus to analyze a situation and develop suitable strategies and tactics.
 A basis for assessing core capabilities and competences.
 The evidence for, and cultural key to, change.
 A stimulus to participation in a group experience.

SWOT is argued to be ineffective as a means of analysis because of:

 The generation of long lists.
 The use of description, rather than analysis.
 A failure to prioritize.

It is interesting that the concerns on ineffectiveness listed are not really about the method
itself but how individuals can misuse the analysis process or not complete a thorough
analysis. Despite the cited shortcomings, a consistent use of the SWOT analysis by
management should lead to a more complete analysis of the company than the systems
they are currently employing.
As can be seen the table below that the SWOT analysis box also addresses internal and
external forces. Strengths and weaknesses are both concerned with the internal analysis of
the company, while the opportunities and threats are concerned with the external forces
affecting the company.
As management develops its list of strengths, weaknesses, opportunities, and threats, they
need to remember that for every positive attribute of the company there is a negative
attribute. In contrast, every negative attribute has a positive attribute for the company. For
example, if a company has the strength of having no competition it also has the threat of
new competitors entering the marketplace. Another example relates to technology. If the
competitors have established technology (your company’s weakness) then the company has
the opportunity to develop a better technological mousetrap.
Factors that can be considered when performing the SWOT analysis include:
 Quality and depth of management.
 Size of the company.
 Geographic and product line diversification.

Table: SWOT Analysis

“SWOT” Analysis

Strengths (internal): Weaknesses (internal):

• What do you do better than the  What do the competitors do better
competitors? than you do?
 What intellectual property do you  What do you need to compete more
own? effectively?

Opportunities (external): Threats (external):

 What changes are occurring in the  What changes are occurring in the
industry or in customer demands industry or in customer demands
that you can take advantage of? that your competitors can take
 What weaknesses of your advantage of better than you can?
competitors can you take advantage  What are your competitors doing to
of? attract your customers?

Using a SWOT analysis will allow management to articulate the strengths, weakness,
opportunities and threats to the company. With this type of analysis, management can
develop plans to create a better market position than its competitors and to gain market
share.
Porters Five Forces:

• The Analysis provides a framework to analyze the forces that reduce the profits of an
industry.
• The Analysis focuses on whether or not a force is sufficiently strong to reduce or
eliminate the profit of an industry.
• The Model has the following limitations:
– It doesn’t account for the magnitude of demand
– The model focuses on an industry as a whole – not on individual firms
– The industry and the markets must be well defined
The stronger these forces are, the more likely the profits will be less for the particular
industry.
Porter divides industry structure into five forces:

1. Rivalry between current incumbents.

2. Threat of new entrants.
3. Bargaining power of customers.
4. Bargaining power of suppliers.
5. The threat of substitute products.

This model, used thoughtfully in a company analysis, can provide valuable information
regarding the relative risk to the future market position, growth, and profitability of the
subject company.

Potential
Entrants
Threat of New
Entrants

Industry
Competitors Bargaining Power
Bargaining Power
Industry of Suppliers of Buyers Buyers
Suppliers Rivalry among
existing firms
Threat of
Substitute Products
and /or Services
Substitutes
1 Rivalry amongst current incumbents:
Industry growth is the speed at which the market is growing. Rapidly growing markets
provide less incentive for firms to aggressively compete with each other.
Intermittent overcapacity is the amount demand fluctuates during a year (or over a business
cycle) and the impact lower demand has on how efficiently the firm is able to use its plant
and equipment. In some industries a decrease in demand leads to significant idle productive
capacity, while other industries are not as susceptible to this factor. More intense rivalry is
likely to be fostered in an industry in which firms face either large amounts of unused plant
capacity or face frequent idle capacity.
Concentration and balance is the number of firms in the industry and their relative size. An
industry in which a few firms supply most of the output is likely to not be very competitive
because the large firms will control the market.

2 Threat of new entrants:

Economies of scale mean larger firms can produce at lower cost per unit. This tends to lower
the number of firms in the industry and reduce competition.
Proprietary product differences are the characteristics that make a product appeal to a large
market segment. But only those characteristics that cannot be copied at low cost by
competitors (“proprietary”) will be a barrier to entry.
Brand identity is the extent to which buyers take the brand name into account when making
purchase decisions.
Capital requirements are the total cost of acquiring the plant and equipment necessary to
begin operating in the industry.

3 Bargaining power of customers:

Buyer concentration versus firm concentration refers to the extent of concentration in the
buyer’s industry compared to the extent of concentration in your industry. The more
concentrated the buyer’s industry relative to your industry the greater the bargaining power
of buyers.
Buyer volume is the number of units of your product the buyer purchases from all sources.
The greater buyer volume compared to the quantity purchased from you, the greater the
bargaining power of buyers.
Buyer information is the state of information buyers have about your industry. The more
information buyers have about your industry the more bargaining power buyers have.
Substitute products means the number and closeness of substitutes available for your
product. The greater the number of available substitutes the more bargaining power buyers
have.
Price of your product relative to total expenditures on all products. This is the fraction of
total expenditure buyers spend on your products. The greater the fraction of total
expenditure the greater the price elasticity of demand and the more bargaining power
buyers have.
Product differences refers to the degree of differentiation between your product and other
products in the market. The greater the differentiation of your product, the lower its price
elasticity of demand and the less bargaining power buyers have.
Brand identity is the extent to which your brand name is recognized and sought out by
buyers. The stronger your brand identity the less bargaining power buyers have.

4 Bargaining power of suppliers:

Differentiation of inputs means that different suppliers provide different input
characteristics for inputs that basically do the same job. The greater the degrees of
differentiation among suppliers the more bargaining power suppliers have.
Presence [and availability] of substitute inputs means the extent to which it is possible to
switch to another supplier for an input (or a close substitute). The greater the number and
closeness of substitute inputs the lower the bargaining power of suppliers.
Supplier concentration is the degree of competition among suppliers. Usually the more
concentrated the industry, the fewer suppliers and the more control suppliers have over the
prices they charge. Greater supplier concentration often means greater supplier bargaining
power.
Cost relative to total purchases in the industry refers to the amount your firm spends on
inputs from a particular supplier compared to the total revenue of all firms in the supplier’s
industry. Lower expenditure usually implies more bargaining power for the supplier. The
buyer’s bargaining power falls as spending with a particular firm falls simply because the
buyer’s business isn’t as important to the supplier.

5 The threat of substitute products:

Relative price performance of substitutes is the price of substitutes for your output
compared to the price you are charging. If the price of substitutes is lower, the competitive
threat increases as the price differential increases.
Switching costs refers to the cost to the buyer of switching from one seller to another. The
greater the switching costs the lower the threat of substitutes because buyers have a
stronger incentive to stick with a single supplier.
Buyer propensity to substitute is the extent to which buyers are willing to consider other
suppliers.

The key to growth and survival according to Porter is to use the knowledge on these five
forces to “stake out a position that is less vulnerable to attack by head-to head opponents,
be they new or well established ones, and less vulnerable to erosion from direction of
buyers, suppliers or substitute goods” Such a position can be gained by solidifying
relationships with profitable consumers, product differentiation ( thru redesign or
marketing), integrating operations or by gaining technical leadership.
PESTEL analysis of the macro-environment

There are many factors in the macro-environment that will affect the decisions of the
managers of any organization. Tax changes, new laws, trade barriers, demographic change
and government policy changes are all examples of macro change. To help analyze these
factors managers can categorize them using the PESTEL model (Political, Economic, Social
Cultural, Technological, Environmental and Legal). This classification distinguishes between:

Political factors. These refer to government policy such as the degree of intervention in the
economy. What goods and services does a government want to provide? To what extent
does it believe in subsidizing firms? What are its priorities in terms of business support?
Political decisions can impact on many vital areas for business such as the education of the
workforce, the health of the nation and the quality of the infrastructure of the economy
such as the road and rail system. Increase in civil service retirement age.

Economic factors. These include interest rates, taxation changes, economic growth, inflation
and exchange rates. For example:

Higher interest rates may deter investment because it costs more to borrow
A strong currency may make exporting more difficult because it may raise the price in terms
of foreign currency
Inflation may provoke higher wage demands from employees and raise costs
Higher national income growth may boost demand for a firm's products

Social factors. Changes in social trends can impact on the demand for a firm's products and
the availability and willingness of individuals to work. Higher life expectancy , for example,
the population has been ageing. This has increased the costs for firms who are committed to
pension payments for their employees because their staff are living longer. Getting less
children per family means demand for toys is falling.

Technological factors: new technologies create new products and new processes. MP3
players, computer games, online gambling and high definition TVs are all new markets
created by technological advances. Online shopping, bar coding and computer aided design
are all improvements to the way we do business as a result of better technology.
Technology can reduce costs, improve quality and lead to innovation. These developments
can benefit consumers as well as the organizations providing the products.

Environmental factors: environmental factors include the weather and climate change.
Changes in temperature can impact on many industries including farming, tourism and
insurance. With major climate changes occurring due to global warming and with greater
environmental awareness this external factor is becoming a significant issue for firms to
consider. The growing desire to protect the environment is having an impact on many
industries such as the travel and transportation industries (for example, more taxes being
placed on air travel and the success of hybrid cars) and the general move towards more
environmentally friendly products and processes is affecting demand patterns and creating
business opportunities.

Legal factors: these are related to the legal environment in which firms operate. Most
recently in Kenya we have the maternity and paternity labour laws that firms are now
seeking to heed to. Legal changes can affect a firm's costs (e.g. if new systems and
procedures have to be developed) and demand (e.g. if the law affects the likelihood of
customers buying the good or using the service).

Different categories of law include:

 consumer laws; these are designed to protect customers against unfair practices
such as misleading descriptions of the product
 competition laws; these are aimed at protecting small firms against bullying by larger
firms and ensuring customers are not exploited by firms with monopoly power
 employment laws; these cover areas such as redundancy, dismissal, working hours
and minimum wages. They aim to protect employees against the abuse of power
by managers
 health and safety legislation; these laws are aimed at ensuring the workplace is as
safe as is reasonably practical. They cover issues such as training, reporting
accidents and the appropriate provision of safety equipment

Typical PESTEL factors to consider include:

Factor Could include:

Political e.g. EAC enlargement, the aspiration of one EA currency, international
trade, taxation policy (East Africa Customs regulations)
Economic e.g. interest rates, exchange rates, national income, inflation,
unemployment, Stock Market
Social e.g. ageing population, attitudes to work, income distribution, smaller
families
Technological e.g. innovation, new product development, rate of technological
obsolescence
Environmental e.g. global warming, environmental issues
Legal e.g. competition law, health and safety, employment law

By using the PESTEL framework we can analyze the many different factors in a firm's macro
environment. In some cases particular issues may fit in several categories. For example, the
creation of the Monetary Policy Committee & Economic Stimulus package by the government
in after global economic downturn is a government initiative but had the ability to set interest
rates was a political decision but has economic consequences; meanwhile government
economic policy can influence investment in technology via taxes and tax credits. If a factor
can appear in several categories managers simply make a decision of where they think it best
belongs.

However, it is important not to just list PESTEL factors because this does not in itself tell
managers very much. What managers need to do is to think about which factors are most
likely to change and which ones will have the greatest impact on them i.e. each firm must
identify the key factors in their own environment. Managers must decide on the relative
importance of various factors and one way of doing this is to rank or score the likelihood of a
change occurring and also rate the impact if it did. The higher the likelihood of a change
occurring and the greater the impact of any change the more significant this factor will be to
the firm's planning.

In "Foundations of Economics" we focus on the economic environment. We examine issues

such as the effect of interest rate changes, changes in exchange rates, changes in trade policy,
government intervention in an economy via spending and taxation and economic growth
rates. These can be incredibly important factors in a firm's macro-environment. The growth
of China and India, for example, have had massive effects on many organizations. Firms can
relocate production there to benefit from lower costs; these emerging markets are also
providing enormous markets for firms to aim their products at. With a population of over 1
billion, for example, the Chinese market is not one you would want to ignore; at the same
time Chinese producers should not be ignored either. However, the relative importance of
economic factors compared to other factors will depend on the particular position of a
business. Exchange rate fluctuations may be critically important to a multinational but less
significant to a local cleaning company. Rapid economic growth or economic decline may be
very significant to a construction business that depends heavily on the level of income in the
economy but may be slightly less significant to a milk producer whose product is less sensitive
to income. So whilst the economy is important to all firms on both the supply side (e.g.
unemployment levels affect the ease of recruitment) and demand side (e.g. income tax affects
spending power) the relative importance of specific economic factors and the relative
importance of the economy compared to, say, regulation or social trends will vary.