DBA 5206

MASTER OF
BUSINESS ADMINISTRATION

QUALITY MANAGEMENT

CENTRE FOR DISTANCE EDUCATION

ANNA UNIVERSITY
CHENNAI - 600 025
Course Writer Repurposer
Dr. M. Senthil Dr. Devamaindan
Reader in Management Studies Associate Professor
Alagappa Institute of Management IDE, Madras University
Alagappa University Chennai - 600 005
Karaikudi – 630 004 Mob. No. 9444167633
mail Id - [email protected]

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CENTRE FOR DISTANCE EDUCATION
ANNA UNIVERSITY
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 QUALITY MANAGEMENT
OBJECTIVES
COURSE OBJECTIVE:
• To understand about Quality, Contributions of Quality gurus, Six sigma,
BPR, Tools used for Quality Management and Quality systems.

COURSE OUTCOME:
• Enhanced Quality Products with higher customer Satisfaction. Better use of
different tools used to enhance Quality.
UNIT I INTRODUCTION TO QUALITY MANAGEMENT - Defi
nitions – TOM framework, benefits, awareness and obstacles. Quality – vision,
mission and policy statements.Customer Focus – customer perception of quality,
Translating needs into requirements, customer retention. Dimensions of product
and service quality. Cost of quality.
UNIT II PRINCIPLES AND PHILOSOPHIES OF QUALITY
MANAGEMENT - Overview of the contributions of Deming, Juran Crosby,
Masaaki Imai, Feigenbaum, Ishikawa, Taguchi techniques – introduction, loss
function, parameter and tolerance design, signal to noise ratio. Concepts of Quality
circle, Japanese 5S principles and 8D methodology.
UNIT III STATISTICAL PROCESS CONTROL AND PROCESS
CAPABILITY - Meaning and signifi cance of statistical process control (SPC)
– construction of control charts for variables and attributed. Process capability
– meaning, signifi cance and measurement – Six sigma concepts of process
capability. Reliability concepts – defi nitions, reliability in series and parallel,
product life characteristics curve. Total productive maintenance (TMP) – relevance
to TQM, Terotechnology.Business process reengineering (BPR) – principles,
applications, reengineering process, benefits and limitations.
UNIT IV TOOLSAND TECHNIQUES FOR QUALITYMANAGEMENT
- Quality functions development (QFD) – Benefi ts, Voice of customer, information
organization, House of quality (HOQ), building a HOQ, QFD process. Failure
mode effect analysis (FMEA) – requirements of reliability, failure rate, FMEA
stages, design, process and documentation. Seven old (statistical) tools. Seven
new management tools. Bench marking and POKA YOKE.
UNIT V QUALITY SYSTEMS ORGANIZING AND
IMPLEMENTATION - Introduction to IS/ ISO 9004:2000 – quality management
systems – guidelines for performance improvements. Quality Audits. TQM culture,
Leadership – quality council, employee involvement, motivation, empowerment,
recognition and reward.
TEXT BOOKS:
1. Dale H.Besterfi eld et al, “Total Quality Management”, Third edition, Pearson
Education (First Indian Reprints 2004).
2. Shridhara Bhat K, “Total Quality Management – Text and Cases”, Himalaya
Publishing House, First Edition 2010.

REFERENCE BOOKS:
1. Douglas C. Montgomory, “Introduction to Statistical Quality Control”, Wiley
Student Edition, 7th Edition, Wiley India Pvt Limited, 2012.
2. James R. Evans and William M. Lindsay, “The Management and Control of
Quality”, Sixth Edition, Thomson, 2010.
3. Poornima M.Charantimath, “Total Quality Management”, Pearson Education,
2nd edition, 2012.
4. “Indian standard – quality management systems – Guidelines for performance
Improvement” Fifth Revision, Bureau of Indian standards, New Delhi.
 QUALITY MANAGEMENT
SCHEME OF LESSONS

UNITS SUBJECT Page No

UNIT I INTRODUCTION TO QUALITY MANAGEMENT 7

PRINCIPLES ANDPHILOSOPHIES OF QUALITY
UNIT II 35
MANAGEMENT
STATISTICAL PROCESS CONTROL& PROCESS
UNIT III 127
CAPABILITY
TOOLS AND TECHNIQUES FOR QUALITY
UNIT IV 167
MANAGEMENT
QUALITY SYSTEMS: ORGANISING AND
UNIT V 221
IMPLEMENTATION
 Lesson 1 - Introduction to Quality Management

UNIT I Notes

LESSON 1 - INTRODUCTION TO
QUALITY MANAGEMENT
CONTENTS
I Learning Objectives
II Learning Outcomes
III Overview
1. Definitions of TQM
1.1. TQM Benefits
1.2. TQM frame work
1.3. Awareness
1.4. Obstacles
2. Quality statements
2.1. Vision statement
2.2. Mission statement
2.3. Quality policy statements
3. Customer focus
4. Customer perception of quality
5. Translating needs into requirements
6. Customer retention
7. Dimensions of Product and Service quality
8. Cost of Quality
8.1 Quality Gurus
9. Deming’s contributions
9.1 Deming’s 14 points on
9.2 PDCA cycle
9.3 7 deadly diseases of management
9.4 System of profound knowledge
10. Quality Gurus and their contributions
IV Summary
V Keywords
VI Case Study
VII Self-Assessment Questions
VIII Further Readings

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Quality Management

Notes I LEARNING OBJECTIVES

The objective of TQM is to decrease the errors in all operating areas, early mistake
recognition, error prevention and avoidance of waste, reduction of the lead times,
increase of the flexibility and profitability, contented position of the customers
and employee morale, etc
• Learn Quality Culture in an Organization
• Learn Customer Centric Approach
• Learn Customer Relationship Management
• Learn Quality Assurance
• Learn Production, Planning and Control
• Learn TQM through Six Sigma

II LEARNING OUTCOMES
• Evaluate the principles of quality management and to explain how
these principles can beapplied within quality management systems.
• Identify the key aspects of the quality improvement cycle and to select
and use appropriatetools and techniques for controlling, improving
and measuring quality.
• Critically appraise the organisational, communication and teamwork
requirements for effectivequality management
• Critically analyse the strategic issues in quality management, including
current issues anddevelopments, and to devise and evaluate quality
implementation plans

III OVERVIEW: Introduction to Quality

Management:
• Quality management is the act of overseeing all activities and tasks needed
to maintain a desired level of experience.Quality management includes the
determination of a quality policy, creating and implementing quality planning
and assurance, and quality control and quality improvement.
• Quality management ensures that an organization, product or service is
consistent.
Total - Made up of the whole
Quality - Degree of excellence a product or service provides
Management - Act, art, or manner of handling, controlling and directing.
Therefore, TQM is the art of managing the whole to achieve the excellence.

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Quality definitions: Notes

• Predictable degree of uniformity and dependability at low cost and suited
to the market – Deming
• Fitness for use – Juran
• Conformance to requirements ( Meeting specifications) – Crosby
• Minimum loss imparted by a product to society from the time the product
is shipped – Taguchi
• A way of managing title organization – Feigenbaum
• Correcting and preventing loss, not living with loss – Hosffin
• The totality of characteristics of an entity that bear on its ability to satisfy
stated and implied needs – ISO
Q = P/E
Where , P = Performance, E = Expectations.

1. Definitions of TQM:
What is TQM?
♣ TQM is the enhancement to the traditional way of doing business.
♣ It is a proven technique to guarantee survival in the world-class competition.
♣ TQM is for the most part common sense.
♣ Analyzing three words (TQM) we have:
• Total—Made up of the whole
• Quality—Degree of excellence a product or service provides
• Management—Act, art, or manner of handling, controlling, directing, etc.
♣ Therefore TQM is the art of managing the whole to achieve the excellence.
• As defined by the International Organization for Standardization: (ISO)
TQM is a management approach for an organization, centered on quality, based
on the participation of all its members and aiming at, long term success through
customer satisfaction, and benefits to all members of the organization and to the
society.
• As defined by American Society for Quality
Quality is a subjective term for which each person has his or her own definition. In
a technical usage, quality can have two meanings: The characteristic of a product
or service that bear on its ability to satisfy stated or implied needs and, a Product
or Service free of deficiencies.
• Definition by Besterfield: The art of managing the total organization to
achieve excellence in all spheres of activity.
• Definition by Omanchonu: The integration of all functions and processes
within an organization in order to achieve the continuous improvement
of the quality of goods and services.

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Notes • Tqm is defined as a continuous effort by the management as well as

employees of a particular organization to ensure long term customer
loyalty and customer satisfaction.
• Tqm is defined as both a Philosophy and a set of guidance principles that
represent the foundation of continuously improving organization. It is
the application of qualitative methods and human resources to improve
all the processes within an organization and exceed customer needs now
and in the future.
1.1. TQM Benefits
Customer satisfaction oriented benefits:
• Improvement in product quality
• Improvement in product design
• Improvement in production flow
• Improvement in employee morale and quality consciousness
• Improvement in product service
• Improvement in market place acceptance
Economic improvement oriented benefits
• Reduction in operating costs
• Reduction in operating losses
• Reduction in field service costs
• Reduction in liability exposure
1.2. Awareness
• An organization will not begin in the transformation of TQM until it is
aware that the quality of the product or service must be improved.
• Awareness comes about when an organization loses market share or realizes
that quality and productivity go in hand-in-hand.
• It also occurs if the customers give indications towards TQM or the
management itself realizes that implementing TQM is the better way to
run a business in a successful way in local as well as global markets.

1.3.TQM Framework

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Notes

1.4. Obstacles
• Lack of management commitment
• Inability to change organizational culture
• Improper planning
• Lack of continuous training and education
• Incompatible organizational structure and isolated individuals and
departments
• Ineffective measurements techniques and lack of access to data and results
• Paying inadequate attention to internal and external customers
• Inadequate use of empowerment and team work
• Failure to continuously improve
Quality statements
Definition of Quality:
1. Predictable degree of uniformity and dependability at low cost and suited to
the market - Deming
2. Fitness for use-Juran

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Notes 3. Conformance to requirements (Meeting Specifications) - Crosby

4. Minimum loss imparted by a product to society from the time the product is
shipped – Taguchi
5. A way of managing tile organization - Feigenbaum
6. Correcting and preventing loss, not living with loss - Hosffin.
7. The totality of characteristics of an entity that bear on its ability to satisfy
stated and implied needs – ISO
Quality means different to different people:
1. Customer-Based: Fitness for use, meeting customer expectations.
2. Manufacturing-Based: Conforming to design, specifications, or requirements.
Having no defects.
3. Product-Based: The product has something that other similar products do not
that adds value.
4. Value-Based: The product is the best combination of price and features.
5. Transcendent: It is not clear what it is, but it is something good.

2. QUALITY STATEMENTS
• Quality statements are established by the quality council to provide overall
direction for achieving the total quality culture.
• Three Elements of Quality statements are
1. Vision Statement
2. Mission Statement
3. Quality Policy Statements
2.1.Vision statement
A vision statement describes the desired future position of the company. Vision
may take 5 or even 10 years to achieve.
Guidelines for vision statement :-
Involve as many employees as possible in the formulation of vision statement
• The statement should project your growth and development.
• It should be short and realistic to the present situation.
Characteristics of vision statement:-
• Future oriented
• Creative
• Reflecting the uniqueness
• Very clear and challenging.

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Steps in Vision Formulation and Implementation Notes

• Proprietor dreaming about how the organization should be in the next 10
to 20 years.
• Meeting with employees and motivating them to have visions giving
them directions on the vision of the CEO. The vision statement should
be checked for its simple, easy to understand language and style.
2.2. Mission Statement
A Mission statement defines the company’s business, it’s objective and its approach
to reach those objectives.
Characteristics of mission statement:-
• These statements should clearly indicate the important roles and the
methods followedfor fulfilling the vision.
• Techniques and tools used for achieving it.
• Mission statements should actualize the vision.
• These statements will carry information which need to be fulfilled in the
near future. Eg: Tata motors
• To be the most admired multi-national Indian car company producing
vehicles thatpeople love to buy.
• Create an organization that people enjoy working for, doing business
with andinvesting. Eg. Canadian National Railways - To meet customer’s
transportation and distribution needs by being the best at moving their
goods on time, safely and damage free.
2.3. Quality Policy Statements
Quality policy statement is a guide for all working in an organization with respect
to how they should provide products and services to the customers.
Quality policy statement is prepared as follows:
• The CEO of the organization gets information and feedback related to
quality fromthe workforce
• Then the CEO prepares the quality policy statement.
Common characteristics are:
• Quality is first among equals
• Meet the needs of the internal and external customers
• Equal or exceed the competition
• Continually improve the quality
• Include business and production practices
• Utilize the entire work force.

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Notes Example of Vision, Mission and Quality Policy statements

SAP :
Vision:
SAP’s vision for quality management is to consistently deliver high-quality
solutions focused on improving customer satisfaction.
Mission:
The mission of quality management at SAP is to: ƒ
• Research and develop new methods and standards ƒ
• Proactively communicate and share knowledge ƒ
• Apply the knowledge to enhance our products, processes, and services ƒ
• Continually monitor and improve our performance against set targets ƒ
• Strive for prevention of failure, defect reduction, and increased customer
satisfaction
Quality Policy:
Policy Quality is the basic requirement for the satisfaction of our customers and
the resulting competitiveness and economic success of SAP. The Executive Board
dedicates itself to implementing and monitoring the following global quality
policy principles: ƒ
• SAP strives to further intensify the close cooperation with its internal
and external customers and partners, and the performance-oriented
communication with its suppliers.
• The continual improvement of our products, processes, and services
combined with innovation is at the center of our endeavors. For this
purpose, we strive to further optimize our organizational, operational, and
technical processes. Quality management supports the business-oriented
behavior of all parties involved.
• Promoting employee satisfaction and quality awareness are major
managerial functions in the entire company. ƒ
• Commitment, professional competence, and personal responsibility are
required from all SAP employees to achieve the goals based on the global
quality policy principles. Employees know the input requirements to
comply with quality in their area. Internal education is provided to help
SAP employees fulfill their tasks.
• The quality goals based on this policy are regularly defined, implemented,
and monitored by the responsible parties within the framework of quality
management at SAP

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Notes
3. Customer Focus
Internal customers are people working with the organization who have to be
served amotivating experience for them to replicate and carry out the same to the
external customers.Changing the business focus to a customer-centered paradigm
has a broad –reaching impactacross the organization. It gives many companies an
opportunity to revisit their company as awhole and improve business processes
and achieve significant returns on investment.
The individual who buys the products of any manufacturing organization is the
most important person. Without the buyer the whole manufacturing process
becomes meaningless.
Hence every organization should focus on
• Attracting more customers
• Making them happy
• Retaining them
Customer is said to be the king in any business transactions. He needs to be
treatedwith dignity. Satisfying or delighting the customer is a hard task, when
there are many types of customers in the market. However tough it may be, quality
warrants customer focus. How to deal with different types of customers may be
a nightmare for many. But simple solutions are available.
There are four types of customers
TYPE1:-
‘A customer who knows not what he wants and knows that he knows not what he
wants’. They are significant customers. Be gentle with him. It is relatively easy
to satisfy him.
TYPE 2:-
‘A customer who knows not what he wants and knows that he knows not what
he wants’. They are humble customers. Teaching and training will make them
knowledgeable. Then satisfying will be easy.
TYPE3:-
‘A customer who knows what he wants and knows not that he knows what he
wants‘They are sleeping customers. There may be only a few customers of this
type. However, to awake them, attractive, stunning advertisements will make
them understand the reality.
TYPE4:-
A customer who knows what he wants and knows that he knows what he wants’.
They are masters of themselves. They will be the demanding types. Large
percentage of customers falls in this category. The success of quality mainly

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Notes depends on making this category of people satisfied. They will even assume the
position of the king.
Key to customer focus:-
• The ability to anticipate the needs.
• Existing loyal customer.
• Potential customer
• Dissatisfied customer
• Competitor loyal customer.
3.1. Buyer-Supplier relationships:-
Deming realized and suggested that a long term relationship between the purchaser
and supplier is necessary for economy. Several guidelines will help both the
supplier and customer benefit from a long term partnering relationship:
• Implementation of TQM by both supplier and customer
• Long term commitment to TQM and to the partnering relationship between
the parties
• Reduction in the supplier base
• Get suppliers involved in the early stages of research, development and
design
• Bench marking

4. Customer Perception of Quality

According to Deming, “Quality may be defined as an excellent product or services
that fulfills or exceeds our experiences”.In marketing, “customer perception”
refers to customers awareness, their impressions and their opinions about business,
products, and brand. Customer perception is shaped by multiple variables,
including direct and indirect interactions with your offerings. This includes three
stages namely Sensing, Organizing and Reacting.
1. Sensing: Characterized by the physical senses, customers use this stage
to accumulate ‘knowledge’ about a product, service, or brand. This may
apply to facts such as clothing sizes, but also product smells, taste, and
touch.
2. Organizing: During this stage, customers make sense of the information
they’ve attained, interpreting its value based on context, personal beliefs,
perceptions of themselves, and other highly subjective factors. At this
stage, customers will categorize the object of their critique and compare it
to other objects within their chosen categories. For example, a consumer
hoping to buy a winter coat may prioritize coats by price, but also color
and thickness, during the organizing stage.

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3. Reacting: Customers will act based on the sensing and organizing stages, Notes
but also internal and external stimuli ranging from personal historyto
online reviews. Although each reaction and its contributing factors are
different, buyers tend to go through similar processes of evaluation before
making their decision.
Some tangible factors that influence customers perceptions include:
• Price: Price should always be part of a comprehensive marketing plan.
However, marketers must understand that context impacts customers’
perception of its value—lower is not always better, as often seen in luxury
markets where it’s reflective of the product’s true worth.
• Quality: Quality can apply to multiple attributes in a product—attributes
whose importance will differ from customer to customer. Marketers should
understand what feature most distinguishes their products or services,
and which are most desirable in target markets.
• Branding: Logos, artwork, and even packaging all deliver a message about
your company and your brand. Marketers should ensure these elements
meet and exceed customers’ expectations, helping your brand to stand
above others.
• Service: Service quality will make or break customer perception, where
even companies with superior products miss out if their service is poor.
Customers are more likely to write online reviews after highly positive
or highly negative service experiences, which can improve or exacerbate
brand awareness.
Some less-tangible factors that influence customers’ perceptions include:
• Advertising: What you say about your company, the mediums you choose,
and how you deliver your message can drive customers in both positive
and negative directions.
• Reputation: Brand reputations are built over time and can be quite durable.
They are formed from customer experiences with products and services,
but also secondary interactions from third-parties (e.g. media coverage).
While marketers attempt to measure their reputations online, sudden
events can impact reputation without warning.
• Influencers: Influencers are people whom customers trust, and are
among the biggest factors impacting customer perception aside from
the customer’s own personal experience. Customers who have firsthand
experience with your product, service, or brand are most likely to sway
other potential customers during the organizing stage.

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Notes

The higher the needs in this hierarchy only come into focus when the lower needs
in the pyramid are met.
There are three key elements of quality: customer, process and employee.

Delighting Customers
Customers are the center of universe, they define quality. They expect performance,
reliability, competitive prices, on-time delivery, service, clear and correct
transaction processing and more. In every attribute that influences customer
perception, we know that just being good is not enough. Delighting our customers
is a necessity, because if we don’t do it, someone else will!

The process
Outside-In Thinking Quality requires us to look at our business from the customer’s
perspective, not ours. In other words, we must look at our processes from the
outside-in. By understanding the transaction lifecycle from the customer’s
needs and processes, we can discover what they are seeing and feeling. With
this knowledge, we can identify areas where we can add significant value or
improvement from their perspective.

The employee
Leadership Commitment People create results. Involving all employees is
essential to quality approach. We should be committed to providing opportunities
and incentives for employees to focus their talents and energies on satisfying
customers. All employees should be trained in the strategy, statistical tools and
techniques of Six Sigma quality. Training courses should be offered at various
levels:

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• Quality Overview Seminars: basic Six Sigma awareness. Notes

• Team Training: basic tool introduction to equip employees to participate
on Six Sigma teams.
• Master Black Belt, Black Belt and Green Belt Training: in-depth quality
training that includes high-level statistical tools, basic quality control
tools, and Change Acceleration Process and Flow technology tools.
Design for Six Sigma (DFSS) Training: prepares teams for the use of statistical
tools to design it right the first time. Quality is the responsibility of every employee.
Every employee must be involved, motivated and knowledgeable if we are to
succeed.

DIMENSIONS OF PRODUCT AND SERVICE QUALITY:

When it comes to measuring the quality of your services, it helps to understand the
concepts of product and service dimensions. Users may want a keyboard that is
durable and flexible for using on the wireless carts. Customers may want a service
desk assistant who is empathetic and resourceful when reporting issues. Quality
is multidimensional. Product and service quality are comprised of a number of
dimensions, which determine how customer requirements are achieved. Therefore
it is essential that you consider the entire dimension that may be important to
your customers.

Product quality has two dimensions:

• Physical dimension - A product’s physical dimension measures the
tangible product itself and includes such things as length, weight, and
temperature.
• Performance dimension - A product’s performance dimension measures
how well a product works and includes such things as speed and capacity.
While performance dimensions are more difficult to measure and obtain
when compared to physical dimensions, but the efforts will provide more
insight into how the product satisfies the customer.
DIMENSIONS OF MANUFACTURING (product) Quality
υ Performance
υ Features
υ Conformance
υ Reliability
υ Durability
υ Service
υ Response
υ Aesthetics
υ Reputation

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Notes υ Performance - Primary product characteristics, such as signal strength,

battery life
υ Features - Secondary characteristics, added features, such as remote
control.
υ Conformance - Meeting specifications or industry standards, workmanship.
υ Reliability – Consistency of performance over time, average time for the
unit to fail. υ Durability – Useful life, includes repair
υ Service – Resolution of problems and complaints, ease of repair. υ
Response – Human-to-human interface, such as the courtesy of the dealer.
υ Aesthetics – Sensory characteristics, such as exterior finish
υ Reputation – Past performance and other intangibles, such as being ranked
first
Like product quality, service quality has several dimensions:
• Responsiveness - Responsiveness refers to the reaction time of the
service.
• Assurance - Assurance refers to the level of certainty a customer has,
regarding the quality of the service provided.
• Tangibles - Tangibles refer to a service’s look or feel.
• Empathy - Empathy is when a service employee shows that she
understands and sympathizes with the customer’s situation. The greater
the level of this understanding, the better. Some situations require more
empathy than others.
• Reliability - Reliability refers to the dependability of the service providers
and their ability to keep their promises. The quality of products and
services can be measured by their dimensions. Evaluating all dimensions
of a product or service helps to determine how well the service stacks up
against meeting the customer requirements

5. Translation of need into requirements

• Translating needs into requirements is another vital part of the quality
management.Requirements management is concerned with meeting the
needs of end users throughidentifying and specifying what they need.
• Requirements may be focused on where the main concern is to describe
what is wanted rather than how it should be delivered. The important issue
is that those specifying the requirement have an adequate understanding
of what the users need and how the market is likely to meet that need;
they also need to be able to keep any changes to the requirement to an
appropriate minimum and to document the requirement in such a way
that the market will be able to understand what is required.

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• Requirements are capabilities and objectives to which any product or Notes

service must conform and are common to all development and other
engineering activities.
• In reality customer doesn’t buy a specification; the customer buys the
product or service to fulfill a need. Customers are loyal to whatever best
helps them achieve their desired outcome. Just meeting the customer’s
needs are not enough; the organization must exceed the customer’s needs.

6. Customer retention
Customer retention refers to the activities and actions companies and organizations
take to reduce the number of customer defections. The goal of customer retention
programs is to help companies retain as many customers as possible, often through
cutomer loyalty and brand loyalty initiatives.

6.1. Importance of Customer Retention:-

• To acquire a customer a company spends promotional costs like
advertising, sales promotion etc. It is said that it costs five times more to
attract a new customer than retaining one.
• Services being rich in experience and credence qualities, it takes some
time for customers to get accustomed to it and once they are used to the
service and are satisfied with the service provider ,they tend to purchase
more over a period of time.
• As they remain satisfied with a service provider, they spread a positive
word of mouth, which is very effective in case of services for attracting
new customers. Longer the customer stays with an organization, more
the organization knows about him, which enables it to offer customized
services which make it difficult for the customer to defect.

6.2. Customer Retention Programmes

Step1: Review the mission statement
The first step is to review the company’s mission statement. Mission statement
should be based on the needs of the customer and not just product or competition
based. For example rather than saying about the mission. In other words changing
the focus from internal to both internal and external quality.
Step2: Research your customer base
Research the customer base to identify the most profitable customers and customer
segments. There is much focus today on “one-to-one” marketing. However many
small companies cannot maintain the massive amounts of data required to market
to a “segment of one”.

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Notes Step 3: Measure customer defection rate

Measuring customer defection rates is essential to take steps to reduce customer
defections. Set a goal for customer retention and communicate that goal to the rest
of the company. Making customer retention a focus may also require organizational
changes. Companies that operate with separate functional departments have a hard
time ensuring quality for eachcustomer’s individual needs.
Step 4: Stay in front of the customers
Develop contacts with the customer at least five to six times in a year .The contacts
may be in the form of face to face meetings, electronic communications or direct
mails.
Step 5: Take the extra Mileage
Take extra steps to learn about businesses run by customers. This is needed in
order to help them become more profitable.
Step 6: Create a proprietary way of communicating or servicing customers
Customers should know whom to contact when they have a problem or question.
Information should be provided on the internet or in customer service manuals.

7. Dimensions of Quality

7. 1. Dimensions of Product quality

Explanation (taking a cell

Dimension Meaning
phone as an example)
Performance Primary p r o d u c t The signal coverage and audio
characteristics, such as signal quality of the mobile phone
strength, battery life
Features Secondary Characteristics, Facebook facility, camera and
added features, such as remote music system features
control.

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Conformance M e e t i n g S p e c i f i c a t i o n s Some Blackberry mobile Notes

o r i n d u s t r y s t a n d a r d s , models are banned in India as
workmanship they fail to conform the fail
to conform the government’s
regulations
Reliability Consistency of performance MTBF of a mobile phone
over time, average time for the can be specified in number of
unit to fail. months
Durability Useful life, includes repair Durability of a low priced
mobile phone can be
considered as 2 to 3 years.
Service Resolution of problems and Customers prefer the mobile
complaints, ease of repair. service providers who offer
easy, faster and economical
service to their mobiles.

Response Human to Human interface, Development of multi – cim

such as the courtesy of the mobile phones is an example
dealer. of responsiveness of the
manufactures to satisfy the
customer need
Aesthetics Sensory characteristics, such The mobile models with slim
as exterior finish. in size, the flip flop design,
touch screen, coloured finish
attract more customers
Reputation Past performance and other For instance, Nokia, Sony
intangibles, such as being Ericson and Samsung etc are
ranked first. considered as branded mobile
manufactures in India.

7.2. Dimensions of Service quality

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Notes Examples of questions that

Dimension Meaning
customer might ask
Tangibles Refers to a service’s look Is my bank statement easy to
or feel understand?
Reliability Refers to the dependability Is my college bus on time
of the service providers and always?
their ability to keep their
promises
Responsiveness Refers to the reaction time of Are letters/e-mails replied with
the service a day or two?
Assurance Refers to the level of certainty Do the customer service
a customer has regarding personnel seem knowledgeable
the quality of the service about the repair?
provided.
Empathy Being able to understand Are customer service personnel
the needs of the customer as and the cashier friendly and
an individual and meet the courteous?
special requirements of the
customer.
• Others : Time, Timeliness, completeness, courtesy consistency,
accessibility, accuracy, competence, access, communication, credibility
and security.

8. Cost of Quality
Cost of Quality includes all costs associated with the quality of a product from
preventive costs intended to reduce or eliminate failures, cost of process controls to
maintain quality levels and the costs related to failures both internal and external.
Cost of Quality = Prevention cost + Appraisal cost+ Internal failure cost +
External failure cost
• Appraisal costs are associated with measuring and monitoring activities
related to quality. These costs are associated with the suppliers’ and
customers’ evaluation of purchased materials, processes, products, and
services to ensure that they conform to specifications.
ex: inspection, testing, process or service audits, calibration of measuring
and test equipment.
• Internal failure costs are incurred to remedy defects discovered before the
product or service is delivered to the customer. These costs occur when
the results of work fail to reach design quality standards and are detected
before they are transferred to the customer.
ex: scrap, rework, re-inspection, re-testing, material review, material

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downgrades. Notes
• External failure costs are incurred to remedy defects discovered by
customers. These costs occur when products or services that fail to reach
design quality standards are not detected until after transfer to the customer.
ex: processing customer complaints, customer returns, warranty claims,
product recalls.
• Prevention costs are incurred to prevent or avoid quality problems. These
costs are associated with the design, implementation, and maintenance
of the quality management system. They are planned and incurred before
actual operation
ex: new product review, quality planning, supplier surveys, process reviews,
quality improvement teams, education and training.
How to reduce the cost of quality
• The total cost of quality can be minimized by observing the relationship
between cost of quality and the degree of conformance to customer
requirements. When the degree of conformance is very high (low
defects),the cost of failure are low but the costs of control are quite high.
When the degree of conformance is low(high defects), the opposite
situation exists. Thus there is, between the two extremes, an optimal level
of conformance where total quality costs are minimized.

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Notes IMPORTANCE OF COST OF QUALITY:

Quality processes cannot be justified simply because “everyone else is doing
them” - but return on quality (ROQ) has dramatic impacts as companies mature.
Research shows that the costs of poor quality can range from 15%-40% of business
costs (e.g., rework, returns or complaints, reduced service levels, lost revenue).
Most businesses do not know what their quality costs are because they do not
keep reliable statistics. Finding and correcting mistakes consume an inordinately
large portion resources. Typically, the cost to eliminate a failure in the customer
phase is five times greater than it is at the development or manufacturing phase.
Effective quality management decreases production costs because the sooner an
error is found and corrected, the less costly it will be.

HOW TO USE COST OF QUALITY?

Gather some basic information about the number of failures in the system, apply
some basic assumptions to that data in order to quantify the data, chart the data
based on the four elements listed above and study it, allocate resources to combat
the weakspots, do this study on a regular basis and evaluate your performance
The Cost of Quality has other version too. . Like all things there is a price to pay
for quality. This total cost can be split into two fundamental areas:

a. Nonconformance.
This area covers the price paid by not having quality systems or a quality product.
Examples of this are:
(1) Rework. Doing the job over again because it wasn’t right the first time.
(2) Scrap. Throwing away the results of your work because it is not up to the
required standard.
(3) Waiting. Time wasted whilst waiting for other people.
(4) Down Time. Not being able to do your job because a machine is broken.

b. Conformance.
Conformance is an aim of quality assurance. This aim is achieved at a price.
Examples of this are:
(1) Documentation. Writing work instructions, technical instructions and
producing paperwork.
(2) Training. On the job training, quality training, etc.
(3) Auditing. Internal, external and extrinsic.
(4) Planning. Prevention, do the right thing first time and poka yoke.
(5) Inspection. Vehicles, equipment, buildings and people.

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8.1 QUALITY GURUS Notes

• WALTER ALFRED SHEWART
• EDWARD DEMING
• JOSEPH M .JURAN
• ARMOND V. FEIGENBAUM
• KAROU ISHIKAWA
• PHILIP CROSBY
• GENECHI TAGUCHI

AMERICAN QUALITY GURUS

1. Walter Shewhart (1920 -1940s)
2. W.Edward Deming (post world war II through 1980s)
3. Joseph .M.Juran (post world war II through 1980s)
4. Philip Crosby (1980s)
5. Armand Feigenbaum (1970s -1980s)
JAPANESE QUALITY GURUS
1. Kaoru Ishikawa (post world war II through 1980s)
2. Genichi Taguchi (1960s – 1980s)
3. Shigeo Shingo (post world war II through 1980s)
4. Masaaki Imai (1980s)

9. DEMING CONTRIBUTIONS:
1. Deming‘s 14 points on quality management
2. Deming (PDCA) cycle
3. Seven deadly diseases of management or Deming unforgivable sins or deadly
diseases
4. System of profound knowledge
9.1. Deming’s 14 points on quality management
1. Create constancy of purpose for improving products and services.
2. Adopt the new philosophy.
3. Cease dependence on inspection to achieve quality.
4. End the practice of awarding business on price alone; instead, minimize total
cost by working with a single supplier.
5. Improve constantly and forever every process for planning, production and
service.

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Notes 6. Institute training on the job

7. Adopt and Institute leadership.
8. Drive out fear.
9. Break down barriers between staff areas.
10. Eliminate slogans, exhortations and targets for the workforce.
11. a. Eliminate numerical quotas for the workforce
11. b. Eliminate management by objective.
12. Remove barriers that rob people of pride of workmanship, and eliminate the
annual rating or merit system.
13 . Institute a vigorous program of education and self-improvement for everyone.
14. Put everybody in the company to work accomplishing the transformation.

9.2. PDCA cycle

When to use PDCA cycle?
Use the PDCA cycle when:
• Starting a new improvement project
• Developing a new or improved design of a process, product, or service
• Defining a repetitive work process
• Planning data collection and analysis in order to verify and prioritize
problems or root causes
• Implementing any change
• Working toward continuous improvement

The Plan-do-check-act Procedure

1. Plan: Recognize an opportunity and plan a change.
2. Do: Test the change. Carry out a small-scale study.
3. Check: Review the test, analyze the results, and identify what you’ve learned.
4. Act: Take action based on what you learned in the study step. If the change did
not work, go through the cycle again with a different plan. If you were successful,
incorporate what you learned from the test into wider changes. Use what you

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learned to plan new improvements, beginning the cycle again. Notes

*PLAN:
The A+ Approach begins with a “plan” step, which the school district calls
“analyze.” In this step, students’ needs are analyzed by examining a range of
data available in Pearl River’s electronic data “warehouse.” The data reviewed
includes everything from grades to performance on standardized tests. Data can
be analyzed for individual students or stratified by grade, gender, or any other
subgroup.
*DO
The A+ Approach continues with two “do” steps:
1. The “align” step asks what the national and state standards require and how
they will be assessed. Teaching staff also plans curricula by looking at what
is taught at earlier and later grade levels and in other disciplines to ensure a
clear continuity of instruction throughout the student’s schooling. Teachers
develop individual goals to improve their instruction where the “analyze”
step showed any gaps.
2. The “act” step is where instruction is provided, following the curriculum
and teaching goals. Within set parameters, teachers vary the delivery of
instruction based on each student’s learning rates and styles.
*CHECK:
Formal and informal assessments take place continually, from daily teacher
assessments to six-week progress reports to annual standardized tests. Teachers
also can access comparative data on the electronic database to identify trends.
High-need students are monitored by a special child study team.
Throughout the school year, if assessments show students are not learning as
expected, mid-course corrections are made (such as re-instruction, changing
teaching methods, and more direct teacher mentoring). Assessment data become
input for the next step in the cycle.
*ACT
In this example, the “act” step is “standardization.” When goals are met, the
curriculum design and teaching methods are considered standardized. Teachers
share best practices in formal and informal settings. Results from this cycle become
input for the “analyze” phase of the next A+ Approach cycle.

9.3. SEVEN DEADLY DISEASES OF MANAGEMENT:

1. Lack of constancy of purpose
2. Emphasis on short-term profits
3. Personal review systems including evaluation by performance, merit-rating
or annual review 4.Mobility of management

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Notes 5. Running a company on visible figures alone rather than ‗invisible‘ or non-
numerical data
6. Excessive medical costs
7. Excessive liability costs
9.4. SYSTEM OF PROFOUND KNOWLEDGE:
1. APPRECIATION FOR A SYSTEM:
The need for managers to understand the relationships between functions
and activities, and that the long term aim is for everyone to win-employees,
shareholders, customers, suppliers and the environment.
2.KNOWLEDGE OF STATISTICAL THEORY :
Knowledge and understanding of variation, process capability, control charts,
interactions and loss functions.
3.THEORY OF KNOWLEDGE:
As all plans require prediction based on historical information, the theory must
be understood before it can successfully be copied.
4.KNOWLEDGE OF PSYCHOLOGY :
The understanding of human interactions, how people are motivated and what
disillusions them.

10. QUALITY GURUS AND THEIR CONTRIBUTIONS:

QUALITY GURUS CONTRIBUTIONS

WALTER ALFRED Statistical Control Charts
SHEWART PDSA to manage the effects of the variations
14 Points for Quality management
PDCA Cycle (Deming Cycle)
EDWARD DEMING
Seven deadly diseases of management
System of profound knowledge

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Defined Quality as ― Fitness to Use Notes

Wrote Quality control hand book called ―
Bible of Quality
QUALITY TRILOGY
JOSEPH M.JURAN Quality Planning
Quality Control
Quality Improvement
10 Steps for Quality Improvement
Categorized the Cost of Quality
Four absolutes of Quality
14 Steps for Quality Improvement
Philip B. Crosby
Concept of ―Zero Defects
Written Book ― Quality is Free
Masaki Imai
Propounded the Kaizen concept (Continuous
Improvement)
KAI = Change
ZEN = Good
Lean Manufacturing

10.1 JOSEPH M JURAN CONTRIBUTIONS:

QUALITY TRILOGY
1. Quality Planning
2. Quality Control
3. Quality Improvement
1.Quality planning
• Establish quality goals.
• Identify who the customers are.
• Determine the needs of the customers.
• Develop product features that respond to customers’ needs.
• Develop processes able to produce the product features.
• Establish process controls; transfer the plans to the process.
2. Quality control
• Evaluate actual performance.
• Compare actual performance with quality goals.
• Act on the difference.
3. Quality improvement
• Prove the need.
• Establish the infrastructure.

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Notes • Identify the improvement projects.

• Establish project teams.
Provide the teams with resources, training, and motivation to:
• Diagnose the causes, and Stimulate remedies.
• Establish controls to hold the gains

10.2 CROSBY’S CONTRIBUTIONS:

FOUR ABSOLUTES OF QUALITY
His “Absolutes” are:
(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.
CROSBY’S 14 STEPS OF QUALITY MANAGEMENT:
1. Management 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 to oversee
improvements. Total Quality Management
3. Quality measurement is 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 are 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 informed management of
problems.
12. Recognition is given, but it is nonfinancial, to those who meet quality goals.
13. Quality councils meet regularly.
14. Do it all over again (i.e., repeat steps one through thirteen)

IV SUMMARY
The eight principle, which act as a base for defining Quality Management is
presented in detail. The Total Quality Management is presented in framework
that comprises of three paradigms and each one compliments the other .The

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process quality, involvement of leaders and employee, culture of the organization Notes
will all lead towards the establishment of TQM in organization, The benefits are
many and using an example of hotel, it is emphasized for the benefit of readers.
Vision, mission and policy statements on quality are presented using examples
of SAP, Honeywell Technology Solutions Lab, Department of Defence, USA to
give an idea. The indispensability of the customer and the focus required to be is
emphasized are presented in detail. The quality dimensions of product and service
are deliberated in detail. The cost of quality, its importance, application areas are
elaborated for the benefit of the learners.

V KEY WORDS
TQM, Vision, Mission, Customer Focus.

VI CASE STUDY
Case Study: Quality Indicator for a TV Company
A TV company branded ‘SS’ established in 80’s was selling its brand based on
‘price’ differentiation. With several MNC entering the market, SS started facing
stiff competition. The owner Mr. Nattan felt if he focuses his company’s image
as a quality company then he can beat the competition. Hence he shifted the
company’s focus from ‘price’ differentiation to ‘service’. He started concentrating
in finding what the customer wants. Prior to quality introduction, the performance
measures were in terms of number of new clients, total billing etc. While meeting
the customer, the sales talk was on ‘high service delivery’ without any regard to
customer’s needed level of service or on the satisfaction as in the minds of the
customer. There was hence a possibility of not meeting their own stated level
of service delivery which led to disappointment among customers. Quality goals
were now established which were felt to be the indicators of quality – assuring
the company in terms of tangible success.
Satisfaction of customer is indicated through
• Bills paid on time
• Retaining customer return at 70%
• Accounts receivable days outstanding is improved by 30% within the
next 6 months
• Customer satisfaction survey will indicate customer satisfaction to be
above 90%
Satisfaction of employee is indicated by
• Turnover rate brought down by 3% in 6 months time
• Absenteeism is lowered by 10%
• Employee satisfaction survey indicating a level above 95%

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Notes Growth of the organization is indicated by

• Obtaining ISO certification
• Increase in share price by 30%
• Increase in number of customers

Discuss:
1. Do you agree with the methodology adopted by the company for becoming
‘quality organization’?
2. Evaluate the firm’s ‘indicators of quality’ which is expected to measure
quality.
3. Identify a few quality indicators to measure quality effectiveness for a
company gearing towards TQM
4. Discuss the dimensions of quality for the Product “TV”
5. Discuss how SS can improve their quality?

VII. REVIEW QUESTIONS

1. Enumerate various principles of quality management and explain their
usefulness to managers.
2. “ The TQM framework is dynamic and is fast changing”-Critically examine.
3. Describe the benefit of TQM in streamlining the operations of an organization.
4. Discuss the importance of vision, mission and policy statements on quality
in organizations. Describe the process of its evolution.
5. Explain the impact on quality due to no retention of customers.
6. Explain various cost elements in achieving quality in an organization.
Demonstrate how do they interact with each other

VIII. REFERENCE BOOKS:

1. Douglas C. Montgomory, “Introduction to Statistical Quality Control”, Wiley
Student Edition, 7th Edition, Wiley India Pvt Limited, 2012.
2. James R. Evans and William M. Lindsay, “The Management and Control of
Quality”, Sixth Edition, Thomson, 2010.
3. Poornima M.Charantimath, “Total Quality Management”, Pearson Education,
2nd edition, 2012.
4. “Indian standard – quality management systems – Guidelines for performance
Improvement” Fifth Revision, Bureau of Indian standards, New Delhi.

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UNIT II Notes

LESSON 2 - PRINCIPLES AND

PHILOSOPHIES OF
QUALITY MANAGEMENT
CONTENTS
I Learning Objectives
II Learning Outcomes
III Overview
2.1 Introduction
2.1.1 Overview of the contributions of Deming, Juran Crosby,
Masaaki Imai, Feigenbaum, Ishikawa, Taguchi techniques
2.2 Concepts of Quality circle
2.3 Japanese 5S principles and 8D methodology
2.4 TQM Leadership
2.5 Strategic Quality Planning
2.6 Quality Council
2.7 Motivation
2.8 Employee Empowerment and Employee Involvement
2.8.1 Employee Empowerment
2.8.2 Employee Involvement
2.9 Team and Teamwork
2.10 Rewards and Recognition:
2.11 Performance Appraisal
2.12 Continuous Process Improvement
2.13 Jurans Triology
2.14 Supplier
2.15 Kaizen
2.16 PDCA
IV Summary
V Key Words
VI Case Study
VII Self Assessment Questions
VIII Further Readings

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Notes
I LEARNING OBJECTIVES
Upon completion of this unit, you will be able to:
• Have an understanding of western and Japanese thinking on quality
• Appreciate the evolution process of various dominant techniques in quality
• Understand the process of evolution of various techniques
• The contributors profile and their contributions in particular

II LEARNING OUTCOMES
• Examining the philosophy and approaches to continuous improvement.
• Analyzing systematic improvement processes used by many organizations.
• Illustrating the application of a variety of tools for process improvement
such as the Seven
• QC Tools, Root Cause Analysis, and Lean Thinking, including those used
in Six Sigma, Lean
• Six Sigma, and Total Quality Management.
• Reviewing examples of organizations that have used various continuous
improvement
• approaches to improve their processes.

III OVERVIEW

2.1 INTRODUCTION
Different schools of thought on management dominate the minds of the
industrialists and practitioners. The western school of thought accelerates the
decision-making process but when it comes to the stages of implementation there
is a slowdown comparatively. On the other side, the Japanese Management spend
a lot more time in arriving at the particular decision and because of which the
implementation is faster. Many quality management principles and philosophies
have emerged from Japanese soil. The notable contributions and the profile of
the contributors are presented in this part. This unit deals with Overview of the
contributions of Walter Shewhart, Overview of the contributions of Deming,
Overview of the contributions of Juran, Overview of the contributions of Crosby,
Overview of the contributions of Masaaki Imai, Overview of the contributions
of Feigenbaum, Overview of the contributions of Ishikawa, Overview of the
contributions of Taguchi, Overview of the contributions of Shingeo, Concepts of
quality circle, Japanese 5S Principles, 8D Methodology.
2.1.1. Overview of the Contributions
DEMING’S CONTRIBUTIONS
Contributions:
• 14 Points of Quality management.

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• System of Profound Knowledge Notes

• Deming summarized his philosophy in what he called “A System of
Profound Knowledge”. It comprised of 4 parts:
(1) appreciation for a system,
(2) some knowledge of the theory of variation,
(3) theory of knowledge, and
(4) psychology. Deming recognized the synergy among these diverse subjects
and developed them into a theory of management.
• Popularized the ‘Seven Deadly Sins and Diseases’
• Popularized the ‘Deming Triangle’.

Deming’s 14 points for Management:

1. Create and publicize to all employees the aims and purposes of the
organization.
For the company that wants to stay in business, the two general types of problems
that exist are the problems of today and the problems of tomorrow. It is easy to
become wrapped up with the problems of today, but the problems of the future
demand, first and foremost, constancy of purpose and dedication to keep the
company alive. Decisions need to be made to cultivate innovation, fund research
and education, and improve the product design and service, remembering that the
customer is the most important part of the production line.

2. Adopt the new philosophy (of customer satisfaction, continuous

improvement, defect prevention, management-labor cooperation, etc.).
Government regulations and antitrust activities need to be changed to support the
well-being of people. Commonly accepted levels of mistakes and defects can no
longer be tolerated. People must receive effective training so that they understand
their job and also understand that they should not be afraid to ask for assistance
when it is needed. Supervision must be adequate and effective. Management
must be rooted in the company and must not job-hop between positions within
a company.

3. Stop dependence on inspection to achieve quality. (Managers must

understand how variation affects their processes and take steps to reduce
the causes of variation. Workers must take responsibility for their own
work).
Inspection is too late, ineffective, and costly. It is too late to react to the quality of
a product when the product leaves the door. Quality comes not from inspection but
from improving the production process. Cor¬rective actions are not inspection,
scrap, downgrading, and rework the process.

4. End the practice of awarding business on the basis of price tag alone.
(Costs due to inferior materials/components increase costs in the later

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Notes stages of production. Suppliers themselves are part of the whole system
and hence should be treated as long-term partners).
Price and quality go hand in hand. Trying to drive down the price of anything
purchased without regard to quality and service can drive good suppliers and good
service out of business. Single-source suppliers are desirable for many reasons. For
example, a single-source supplier can become innovative and develop an economy
in the production process that can only result from a long-term relationship with
the purchaser. Lot-to-lot variability within a one-supplier process is often enough
to disrupt the purchaser’s process. Only additional variation can be expected
with two suppliers. To qualify a supplier as a source for parts in a manufacturing
process, perhaps it is better first to discard manuals that may have been used as
guidelines by unqualified examiners to rate suppliers. Instead, suppliers could be
asked to present evidence of active in¬volvement of management, encouraging
the application of many of the IEE concepts discussed in this volume. Special
note should be given to the methodology used for continual process improvement.

5. Improve constantly and forever the system of production and service

.(Aim for small, incremental, continuous improvements – not merely in the
area of production but also covering transportation, maintenance, sales,
service, administration, etc. – all areas of the organization).
There is a need for constant improvement in test methods and for a better
understanding of how the customer uses and misuses a product. In the past,
American companies have often worried about meeting specifications, while the
Japanese have worried about uniformity, i.e., reducing variation about the nominal
value. Continual process improvement can take many forms. For example, never-
ending improvement in the manufacturing process means that work must be done
continually with suppliers to improve their processes. It is important to note that,
like depending on inspection, putting out fires is not a process improvement.
6. Institute training. (Employees need the proper tools and knowledge to do a
good job, and it is management’s responsibility to provide these. Training not
only improves quality and productivity, but also enhances workers’ morale).
Management needs training to learn about all aspects of the company from incoming
materials to customer needs, including the impact that process variation has on
what is done within the company. Management must understand the problems
the worker has in performing his or her tasks satisfactorily. A large obstacle exists
in training and leadership when there are flexible standards for acceptable work.
The standard may often be most dependent on whether a foreperson is having
difficulty in meeting a daily production quota. It should be noted that money and
time spent would be ineffective unless the inhibitors to good work are removed.
7. Adopt modern methods of supervision and leadership. (Managers,
Supervisors should act as coaches, facilitators and not as policemen).
Supervision by management is in need of overhaul, as well as supervision of
production workers.” Management should lead, not supervise. Leaders must

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know the work that they supervise. They must be empowered and directed to Notes
communicate and to act on conditions that need correction. They must learn to
fix the process, not react to every fault as if it were a special cause, which can
lead to a higher defect rate.
8. Drive out fear. (Fear in work manifests as fear of reprisal, fear of failure,
fear of change, fear of the unknown. Fear encourages short-term, selfish
thinking, not long-term improvement for the benefit of all).
No one can give his best performance unless he feels secure. Employees should
not be afraid to express their ideas or ask questions. Fear can take many forms,
resulting in impaired performance and padded figures. Industries should embrace
new knowledge because it can yield better job performance and should not be
fearful of this knowledge because it could disclose some of their failings.
9. Break down barriers between departments and individuals. (Promote
teamwork).
Teamwork is needed throughout the company. Everyone in design, sales,
manufacturing… can be doing superb work, and yet the company can be failing.
Why? Functional areas are sub-optimizing their own work and not working as a
team for the company. Many types of problems can occur when communication is
poor. For example, service personnel working with customers know a great deal
about their products, but there is often no routine procedure for disseminating
this information.
10. Eliminate the use of slogans and exhortations. (Workers cannot improve
solely through motivational methods when the system in which they work
constrains their performance. On the contrary, they will become frustrated,
and their performance will decrease further).
Such exhortations only create adversary relationships, as the bulk of the causes of
low quality and low productivity belongs to the system and thus lies beyond the
power of the work force. Exhortations, posters, targets, and slogans are directed
at the wrong people, causing general frustration and resentment. Posters and
charts do not consider the fact that most trouble comes from the basic process.
Management needs to learn that its main responsibility should be to improve the
process and remove any special causes for defects found by statistical methods.
Goals need to be set by an individual for the individual, but numerical goals set
for other people without a road map to reach the objective have an opposite effect.
11. Eliminate work standards, numerical quotas, and MBO. (Numerical
quotas reflect short-term perspectives and do not encourage long-term
improvement. Workers may shortcut quality to reach the goal. The typical
MBO system focuses on results, not processes, and encourages short-term
behaviour).
Never-ending improvement is incompatible with a quota. Work standards,
incentive pay, rates, and piecework are manifestations of management’s lack of

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Notes understanding, which leads to inappropriate supervision. Pride of workmanship

needs to be encouraged, while the quota system needs to be eliminated. Whenever
work standards are replaced with leadership, quality and productivity increase
substantially, and people are happier on their jobs.
Goals such as “improve productivity by 4 percent next year” without a method
are a burlesque. The data tracking these targets are often questionable. Moreover,
a natural fluctuation in the right direction is often interpreted as success, while
small fluctuation in the opposite direction causes a scurry for explanations. If
there is a stable process, a goal is not necessary because the output level will
be what the process produces. A goal beyond the capability/performance of the
process will not be achieved. A manager must understand the work that is to be
done in order to lead and manage the sources for improvement. New managers
often short-circuit this process and focus instead on outcome; e.g., getting reports
on quality, proportion defective, inventory, sales, and people.
12. Remove barriers to pride in workmanship. (Treating workers as
commodities; giving them monotonous jobs, inferior tools; performance
appraisals, management assuming it is smarter than workers and not using
the workers’ knowledge and experience to the fullest extent).
The responsibility of supervisors must be changed from sheer numbers to quality.
In many organizations, the hourly worker becomes a commodity. He may not even
know whether he will be working next week. Management can face declining
sales and increased costs of almost everything, but it is often helpless in facing
the problems of personnel. The establishment of employee involvement and of
participation plans has been a smoke screen. Management needs to listen and to
correct process problems that are robbing the worker of pride of workmanship.
13. Encourage education and self-improvement for everyone.
An organization needs good people who are improving with education.
Management should be encouraging everyone to get additional education and to
engage in self-improvement.
14. Take action to achieve the transformation. (The TQ philosophy is a major
cultural change and many firms find it difficult. Top management must take
the initiative and include everyone in it).
Management needs to take action to accomplish the transformation. To do this, first
consider that every job and activity is part of a process. A flow diagram breaks a
process into stages. Questions then need to be asked about what changes could be
made at each stage to improve the effectiveness of other upstream or downstream
stages. Everyone can be a part of the team effort to improve the input and output
of the stages. Everyone on a team has a chance to contribute ideas and plans. A
team has an aim and goal toward meeting the needs of the customer.
Deming’s Seven Deadly Diseases and Sins:
[1]Lack of constancy of purpose:

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As long as the focus is on short term thinking, management will fail to plan Notes
adequately. Without good long term planning, worker efforts will be irrelevant:
Total Quality Management (TQM) cannot be a fad, as long-term forward progress
should always be the ultimate goal for any organization.
[2] Emphasis on short-term profits:
Short-term thinking - the opposite of constancy of purpose - in order to stay in
business, fed by fear of the push from bankers and owners for dividends. Boosting
short-term profits is easier, at it typically involves the cutting of any expense
related to the long term: training, quality assurance management, maintenance, etc.
[3] Over-reliance on performance appraisals:
Management by objective, on a go / no-go basis, without a method for
accomplishment of the objective, is the same thing as management by fear.
The essential problem with merit systems is that they reward results rather than
process improvement-results will almost always have a lot of system luck mixed
in. Some managers want to reward people who cooperate more or who seem to
have better attitudes, and will insist that they can recognize the people who are
most cooperative and have the highest work ethic. Instead, managers should
understand that the best way to develop cooperation is by focusing on the nature
of work environment, not monetary rewards.
[4] Mobility of management:
The simplest and yet one of the most deadly of quality systems management
diseases, management mobility (or when top management changes organizations
every 3-4 years) means continuous improvement efforts will be broken and
disjointed as new leaders come on board. With changes in leadership, there is
a change in management philosophy. Managers who have an eye on the next
promotion want results - now - to gain the next rung on the ladder.
[5] Overemphasis on visible figures:
Use of visible figures only for management, with little or no consideration of
figures that are unknown or unknowable. Some facts are simply unknowable.
Knowing this, Deming insisted that leaders must still make decisions and manage
a situation.
[6] Excessive employee healthcare costs:
For the economy as a whole, health care as a percentage of overall expenditures
has steadily risen for decades, which gradually pushes numerous businesses into
a state of crisis. Potentially the only remedy for this disease would be a political
system attempting to reform health care.
[7] Excessive warranty and legal costs:
W. Edwards Deming blamed America’s lawyers in part for the problems of
American business. The US has more lawyers per capita than any other country
in the world, and they spend much of their professional time finding people to

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Notes sue. Like health care costs in No. 6, Deming believed the remedy to this disease
will probably have to come from the government.
Deming Cycle
The idea is to constantly improve, and thereby reduce the difference between the
requirements of the customer and the performance of the process. The cycle is
about learning and ongoing improvement, learning what works and what does not
in a systematic way ; and the cycle repeats; after one cycle is complete; another
is started.

Plan What is needed

Do It
Check that it works
Act to correct problems
1. Plan: Recognize an opportunity and plan a change.
2. Do: Test the change. Carry out a small-scale study.
3. Check: Review the test, analyse the results, and identify what you’ve learned.
4. Act: Take action based on what you learned in the study step. If the change did
not work, go through the cycle again with a different plan. If you were successful,
incorporate what you learned from the test into wider changes. Use what you
learned to plan new improvements, beginning the cycle again.
CROSBY’S CONTRIBUTIONS
Contributions:
• Four absolutes of Quantity.
• 14 Steps for Quality Improvement.
• Concept of “ Zero Defects ”.
• Written Book “ Quality is Free”.
• The book ‘Quality Without Tears’ contains the essence of Crosby’s
philosophy embodied in two concepts: (i) Absolutes of Quality

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Management, and (ii) Basic Elements of Improvement. Notes

(i) Absolutes of Quality Management:
(1) Quality means conformance to requirements, not elegance.
(2) Quality is achieved by prevention, not appraisal.
(3) The performance standard is zero defects, not acceptable quality levels.
Quality is free.
(4) Quality is measured by the price of non-conformance, not indexes.
(ii) Basic Elements of Improvement
(1) Determination: Top management must be serious about quality improvement.
(2) Education: Through education, the Absolutes must be made understandable
to everyone.
(3) Implementation: Every manager must understand the implementation process.

14 Steps for Quality Improvement

[1] Establish management commitment,
[2] Form quality improvement team,
[3] Establish quality measures,
[4] Evaluate the cost of quality,
[5] Establish quality awareness,
[6] Instigate corrective action,
[7] Carry out Zero Defect planning,
[8] Undertake employee training,
[9] Hold a Zero-Defect Day,
[10] Employee goal setting,
[11] Error cause removal,
[12] Establish recognition,
[13] Establish Quality Councils, and
[14] Do it all over again.}
• He developed ‘Quality Vaccine’. Crosby advocated the concept of
Quality Vaccine for successful implementation of TQM. Its three major
components are:
(1) Integrity – towards customers, employees, and suppliers.
(2) Communication - both internal and external.
(3) Systems and Operations.
(4) Policies
JURAN’S CONTRIBUTIONS

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Notes Contributions:
• Defined Quality as “ Fitness to Use”
• Wrote Quality control hand book called “ Quality Trilogy” which includes
Quality Planning, Quality Control and Quality Improvement.
• 10 Steps for Quality Improvement.
• Categorized the Cost of Quality

Internal Customer
Juran realized that the customer was not just the end customer and that each
person along the chain has an internal customer. Each person along the chain,
from product designer to final user is a supplier and a customer.

Cost of Quality
Juran classified the cost of quality into three classes as:
• Failure cost : Scarp, rework, corrective actions, warranty claims
• Appraisal cost : Inspection, compliance auditing and investigations
• Prevention costs: Training, preventive auditing, and process improvement
implementation.

Juran’s Quality Trilogy

• Quality Planning : Objectives are to determine quality goals; to form
implementation planning; to do resource planning; to express goals in
quality terms; and to create the quality plan.
• Quality control: Objective are to monitor performance; to compare
objectives with achievements; and to act to reduce the gap.
• Quality improvement: Objectives are to reduce waste; to enhance logistics
to improve employee morale; to improve profitability; and to satisfy
customers.
Juran’s ten steps to quality improvement
• Build awareness of the need and opportunity for improvement
• Set goals for improvement
• Organize to reach the goals
• Provide training
• Carry out projects to solve problems

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• Report progress Notes

• Give recognition
• Communicate results
• Keep score
• Maintain momentum by making annual improvement part of the regular
systems and processes of the company.
Break through concept
Like the Deming cycle, Juran’s breakthrough concerns itself with the product/
service life cycle. In essence, this splits it up into two areas: the “ journey from
symptom to course” and the “ journey from cause to remedy”.

2.1.4 MASAAKI IMAI’S CONTRIBUTIONS

Contributions:
In 1997, he published his second book, ‘Gemba Kaizen: A Common Sense, Low
Cost Approach to Management’. In it, he preached the 5 golden rules of Gemba:
(1) When a problem (abnormality) arises, go to Gemba (shop floor) first.
(2) Check with Gembutsu (relevant objects).
(3) Take temporary countermeasures on the spot.
(4) Find the root cause, and
(5) Standardize to prevent recurrence.
FEIGENBAUM’S CONTRIBUTIONS
Contributions:
• Originator of the concept of Total Quality Control (TQC).
• He was the first to identify the four costs of quality: prevention cost,
appraisal cost, internal failure cost, and external failure cost.
• He was the first to develop the concept of quality at source: the idea that
quality is the responsibility of the one who does the work.
• He developed a Cycle time reduction methodology which consists of the
following steps:
1. Define the process,
2. List all activities involved,
3. Flowchart the process,
4. Find the time for each activity,
5. Identify the non-value adding tasks, and
6. Eliminate all non-value adding tasks.
ISHIKAWA’S CONTRIBUTIONS
Contributions:

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Notes • Famous for popularizing the Ishikawa diagram/Fishbone diagram/Cause-

and-effect diagram, which is considered as one of the seven old statistical
tools.
• Introduced the Quality Circle (QC) concept in Japan as a technique of
worker motivation.
• Borrowed the Total Quality Control (TQC) concept of Feigenbaum and
adapted it for the Japanese.
• He expanded Deming’s PDCA model into six steps:
1. Determine goals and targets,
2. Determine methods of reaching goals,
3. Engage in education and training,
4. Implement the work,
5. Check the effects of implementation, and
6. Take appropriate action.
Ishikawa’s 10 principles for customer / supplier relations
1) Both the customer and the supplier are fully responsible for the control of
quality.
2) Both the customer and the supplier should be independent of each other and
respect each others independence
3) The customer is responsible for providing the supplier with clear and sufficient
requirements so that the supplier can know precisely what to produce.
4) Both the customer and the supplier should enter into an non – adversarial
contract with respect to quality, quantity, price, delivery method and terms
of payments.
5) The supplier is responsible for providing the quality that will satisfy the
customer and submitting necessary data upon the customers request.
6) Both the customer and the supplier should decide the methods to evaluate the
quality of the product or service to the satisfaction of both practices.
7) Both the customer and the supplier should establish in the contract the method
by which they can reach an amicable settlement of any disputes that may
arise.
8) Both the customer and the supplier should continually exchange information,
sometimes using multifunctional teams, in order to improve the product or
service quality.
9) Both the customer and the supplier should perform business activities each as
procurement, production and inventory planning, clerical work and systems
as that an amicable and satisfactory relationship is maintained.
10) When dealing with business transactions, both the customer and the supplier

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should always have the best interest of the end user in the mind. Notes

TAGUCHI TECHNIQUES:

INTRODUCTION
Dr. Genichi Taguchi has played an important role in popularizing Design Of
Experiments (DOE). However, it would be wrong to think that the Taguchi
Methods are just another way of performing DOE. He has developed a complete
philosophy and the associated methods for “Quality Engineering”.

HIS IMPORTANT IDEAS ARE:

A quality product is a product that causes a minimal loss (expressed in money!)
to society during it’s entire life. The relation between this loss and the technical
characteristics is expressed by the loss function
• Quality must be built into products and processes. There has to be much
more attention to Off Line Quality Control in order to prevent problems
from occurring in production.
• Different types of noise (variation within tolerance, external conditions, and
dissipation from neighboring systems.) have an influence on our system
and lead to deviations from the optimal condition. To avoid the influence
of these noises we need to develop robust products and processes. The
robustness of a system is it’s ability to function optimally even under
changing noise conditions.
Taguchi methods are statistical methods developed by Genichi Taguchi to improve
the quality of manufactured goods and, more recently, to biotechnology, marketing
and advertising. Taguchi methods are controversial among many conventional
Western statisticians unfamiliar with the Taguchi methodology.
Taguchi’s principle contributions to statistics are:
1. Taguchi loss-function
2. The philosophy of off-line quality control
3. Innovations in the design of experiments.

TAGUCHI LOSS FUNCTIONS

• Taguchi Methods is a statistical methods developed largely by GENICHI
TAGUCHI to improve quality of manufactured goods.
• The philosophy of off-line quality control.
• Innovations in the design of experiments.
Taguchi defines Quality as “the loss imparted by the product to society from the
time the product is shipped.”

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Notes LOSS = Cost to operate, Failure to function, maintenance and repair cost, customer
satisfaction, poor design.
Product to be produced “being within specifications”.

TAGHUCHI’S TRADITIONAL QUALITY LOSS FUNCTION:

The Taguchi loss function is graphical depiction of loss developed by the Japanese
business statistician Genichi Taguchi to describe a phenomenon affecting the value
of products produced by a company. This means that if the product dimension
goes out of the tolerance limit the quality of the product drops suddenly.
Taguchi’s reaction to the classical design of experiments methodology of R. A.
Fisher was that it was perfectly adapted in seeking to improve the mean outcome
of a process. As Fisher’s work had been largely motivated by programs to increase
agricultural production, this was hardly surprising. However, Taguchi realized that
in much industrial production, there is a need to produce an outcome on target,
for example, to machine a hole to a specified diameter or to manufacture a cell to
produce a given voltage. He also realized, as had Walter A. Shewhart and others
before him, that excessive variation lay at the root of poor manufactured quality
and that reacting to individual items inside and outside specification was counter-
productive. He therefore, argued that quality
engineering should start with an understanding of the cost of poor quality in various
situations. In much conventional industrial engineering the cost of poor quality
is simply represented by the number of items outside specification multiplied
by the cost of rework or scrap. However, Taguchi insisted that manufacturers
broaden their horizons to consider cost to society. Though the short-term costs may
simply be those of nonconformance, any item manufactured away from nominal
would result in some loss to the customer or the wider community through early
wear-out; difficulties in interfacing with other parts, themselves probably wide
of nominal; or the need to build-in safety margins. These losses are externalities
and are usually ignored by manufacturers.

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In the wider economy the Coase Theorem predicts that they prevent markets from Notes
operating efficiently. Taguchi argued that such losses would inevitably find their
way back to the originating corporation (in an effect similar to the tragedy of the
commons) and that by working to minimizethem, manufacturers would enhance
brand reputation, win markets and generate profits. Such losses are, of course,
very small when an item is near to nominal.
Donald J. Wheeler characterized the region within specification limits as where
we deny that losses exist. As we diverge from nominal, losses grow until the
point where losses are too great to deny and the specification limit is drawn. All
these losses are, as W. Edwards Deming would describe them, unknown and
unknowable, but Taguchi wanted to find a useful way of representing them within
statistics.
TAGUCHI QUADRATIC QUALITY LOSS FUNCTION:
Taguchi specified three situations:
1. Larger the better (for example, agricultural yield)
2. Smaller the better (for example, carbon dioxide emissions)
3. On-target, minimum-variation (for example, a mating part in an assembly).

The first two cases are represented by simple monotonic loss functions.In the third
case, Taguchi adopted a squared-error loss function on the grounds:
• It is the first symmetric term in the Taylor series expansion of any reasonable,
real-life lossfunction, and so is a “first-order” approximation;
• Total loss is measured by the variance. As variance is additive it is an attractive
model of cost; and
• There was an established body of statistical theory around the use of the least
squares principle. The squared-error loss function had been used by John
von Neumann and Oskar Morgenstern in the 1930s.
Though much of this thinking is endorsed by statisticians and economists in
general, Taguchi extended the argument to insist that industrial experiments seek
to maximize an appropriate signal to noise ratio representing the magnitude of the
mean of a process, compared to its variation. Most statisticians believe Taguchi’s

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Notes signal to noise ratios to be effective over too narrow a range of applications and
they are generally deprecated.

OFF-LINE QUALITY CONTROL:

Taguchi realized that the best opportunity to eliminate variation is during design
of a product and its manufacturing process (Taguchi’s rule for manufacturing).
Consequently, he developed a strategy for quality engineering that can be used
in both contexts. The process has three stages:
1. System design
2. Parameter design
3. Tolerance design
1. SYSTEM DESIGN
This is the design at the conceptual level involving creativity and innovation.
2. PARAMETER DESIGN
Once the concept is established, the nominal values of the various dimensions
and design parameters need to be set, the detailed design phase of conventional
engineering. In 1802, philosopher William Paley had observed that the inverse-
square law of gravitation was the only law that resulted in stable orbits if the planets
were perturbed in their motion. Paley’s understanding that engineering should aim
at designs robust against variation led him to use the phenomenon of gravitation
as an argument for the existence of God. William Sealey Gosset in his work at
the Guinness brewery suggested as early as the beginning of the 20th century that
the company might breed strains of barley that not only yielded and malted well
but whose characteristics were robust against variation in the different soils and
climates in which they were grown. Taguchi’s radical insight was that the exact
choice of values required is under-specified by the performance requirements of
the system. In many circumstances, this allows the parameters to be chosen so
as to minimize the effects on performance arising from variation in manufacture,
environment and cumulative damage. This approach is often known as robust
design or Robustification.
TOLERANCE DESIGN:
With a successfully completed parameter design, and an understanding of the
effect that the various parameters have on performance, resources can be focused
on reducing and controlling variation in the critical few dimensions.

Design of experiments
Taguchi developed much of his thinking in isolation from the school of R.
A. Fisher, only coming into direct contact in 1954. His framework for design
of experiments is idiosyncratic and often flawed but contains much that is of
enormous value. He made a number of innovations.

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Dr. Taguchi of Nippon Telephones and Telegraph Company, Japan has developed Notes
a method based on “ ORTHOGONAL ARRAY “ experiments which gives much
reduced “ variance “ for the experiment with “ optimum settings “ of control
parameters. Thus the marriage of Design of Experiments with optimization of
control parameters to obtain BEST results is achieved in the Taguchi Method.
“Orthogonal Arrays” (OA) provide a set of well balanced (minimum) experiments
and Dr. Taguchi’s Signal-to-Noise ratios (S/N), which are log functions of desired
output, serve as objective functions for optimization, help in data analysis and
prediction of optimum results.
Taguchi Method treats optimization problems in two categories,

[A] STATIC PROBLEMS:

Generally, a process to be optimized has several control factors which directly
decide the target or desired value of the output. The optimization then involves
determining the best control factor levels so that the output is at the the target
value. Such a problem is called as a “STATIC PROBLEM”.
This is best explained using a P-Diagram which is shown below (“P” stands for
Process or Product). Noise is shown to be present in the process but should have
no effect on the output! This is the primary aim of the Taguchi experiments - to
minimize variations in output even though noise is present in the process. The
process is then said to have become ROBUST.

[B] DYNAMIC PROBLEMS :

If the product to be optimized has a signal input that directly decides the output,
the optimization involves determining the best control factor levels so that the
“input signal / output” ratio is closest to the desired relationship. Such a problem
is called as a “DYNAMIC PROBLEM”.
This is best explained by a P-Diagram which is shown below. Again, the primary
aim of the Taguchi experiments - to minimize variations in output even though
noise is present in the process- is achieved by getting improved linearity in the
input/output relationship.

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Notes

[A] STATIC PROBLEM (BATCH PROCESS OPTIMIZATION) :

There are 3 Signal-to-Noise ratios of common interest for optimization of
Static Problems;
(I) SMALLER-THE-BETTER :
n = -10 Log10 [ mean of sum of squares of measured data ]
This is usually the chosen S/N ratio for all undesirable characteristics like “
defects “ etc. for which the ideal value is zero. Also, when an ideal value is finite
and its maximum or minimum value is defined (like maximum purity is 100%
or maximum Tc is 92K or minimum time for making a telephone connection is 1
sec) then the difference between measured data and ideal value is expected to be
as small as possible. The generic form of S/N ratio then becomes,
n = -10 Log10 [ mean of sum of squares of {measured - ideal} ]

(II) LARGER-THE-BETTER :
n = -10 Log10 [mean of sum squares of reciprocal of measured data]
This case has been converted to SMALLER-THE-BETTER by taking the
reciprocals of measured data and then taking the S/N ratio as in the smaller-the-
better case.

(III) NOMINAL-THE-BEST :
square of mean
n = 10 Log10 -----------------
variance
This case arises when a specified value is MOST desired, meaning that neither a
smaller nor a larger value is desirable.
Examples are;
(i) most parts in mechanical fittings have dimensions which are nominal-
the-best type.

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(ii) Ratios of chemicals or mixtures are nominally the best type. Notes
e.g. Aqua regia 1:3 of HNO3:HCL
Ratio of Sulphur, KNO3 and Carbon in gun powder
(iii) Thickness should be uniform in deposition /growth /plating /etching..
[B] DYNAMIC PROBLEM (TECHNOLOGY DEVELOPMENT) :
In dynamic problems, we come across many applications where the output is
supposed to follow input signal in a predetermined manner. Generally, a linear
relationship between “input” “output” is desirable.
For example : Accelerator peddle in cars,
volume control in audio amplifiers,
document copier (with magnification or reduction)
various types of moldings
etc.
There are 2 characteristics of common interest in “follow-the-leader” or
“Transformations” type of applications,
(i) Slope of the I/O characteristics
and
(ii) Linearity of the I/O characteristics
(minimum deviation from the best-fit straight line)
The Signal-to-Noise ratio for these 2 characteristics have been defined as;

(I) SENSITIVITY {SLOPE}:

The slope of I/O characteristics should be at the specified value (usually 1).
It is often treated as Larger-The-Better when the output is a desirable characteristic
(as in the case of Sensors, where the slope indicates the sensitivity).
n = 10 Log10 [square of slope or beta of the I/O characteristics]
On the other hand, when the output is an undesired characteristic, it can be treated
as Smaller-the-Better.
n = -10 Log10 [square of slope or beta of the I/O characteristics]

(II) LINEARITY (LARGER-THE-BETTER) :

Most dynamic characteristics are required to have direct proportionality
between the input and output. These applications are therefore called as
“TRANSFORMATIONS”. The straight line relationship between I/O must be
truly linear i.e. with as little deviations from the straight line as possible.

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Notes Square of slope or beta

n = 10 Log10 ----------------------------
variance
Variance in this case is the mean of the sum of squares of deviations of measured
data points from the best-fit straight line (linear regression).

(4) 8-STEPS IN TAGUCHI METHODOLOGY :

Taguchi method is a scientifically disciplined mechanism for evaluating and
implementing improvements in products, processes, materials, equipment, and
facilities. These improvements are aimed at improving the desired characteristics
and simultaneously reducing the number of defects by studying the key variables
controlling the process and optimizing the procedures or design to yield the best
results.
The method is applicable over a wide range of engineering fields that include
processes that manufacture raw materials, sub systems, products for professional
and consumer markets. In fact, the method can be applied to any process be it
engineering fabrication, computer-aided-design, banking and service sectors etc.
Taguchi method is useful for ‘tuning’ a given process for ‘best’ results.
Taguchi proposed a standard 8-step procedure for applying his method for
optimizing any process,
8-STEPS IN TAGUCHI METHODOLOGY:
Step-1: identify the main function, side effects and failure mode
Step-2: identify the noise factors, testing conditionsand quality characteristics
Step-3: identify the objective function to be optimized
Step-4: identify the control factors and their levels
Step-5: select the orthogonal array matrix experiment
Step-6: conduct the matrix experiment
Step-7: analyze the data, predict the optimum levels and performance
Step-8: perform the verification experiment and plan the future action

2.2. CONCEPT OF QUALITY CIRCLE

MEANING: Conceptually Quality Circles can be described as a small group of
employees of the same work area, doing similar work that meets voluntarily and
regularly to iden¬tify, analyse and resolve work related problems.
This small group with every member of the circle participating to the full carries
on the activities, utilising problem-solving techniques to achieve control or
improvement in the work area and also help self and mutual development in the
process.

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The concept of the Quality Circle is based on “respect for the human individual” Notes
as against the traditional assumption based on suspicion and mistrust between
management and its em¬ployees. Quality circles built mutual trust and create
greater understanding between the manage¬ment and the workers. Cooperation
and not confrontation is the key element in its operation. Quality Circles aims
at building people, developing them, arousing genuine interest and dedication to
their work to improve quality, productivity, cost reduction etc.
Thus we can say that a quality circle is a group of 5 to 8 employees performing
similar work, who volunteer themselves to meet regularly, to identify the cause
of their on-the-job problems, employ advanced problem-solving techniques to
reach solutions and implement them.
The con¬cept is based on the premise that the people who do a job everyday know
more about it than anyone else and hence their voluntary involvement is the best
way to solve their work related problems.
The Quality Circle concept provides an opportunity to the circle members to
use their wis¬dom, creativity and experience in bringing about improvements
in the work they are engaged in by converting the challenging problems into
opportunities and it contributes to the develop¬ment of the employees and in
turn benefits the organisation as well. The concept encourages the sense of
belongingness in circle members and they feel that they have an important role
to play in the organisation.

Characteristics of Effective Quality Circles:

1. The atmosphere should be informal, comfortable and relaxed. The members
should feel involved and interested.
2. Everyone should participate.
3. The objectives should be clear to the members.
4. The members should listen to each other.
5. The group should feel comfortable even when there are disagreements.
6. The decisions should generally be taken by a kind of consensus and voting
should be minimum.
7. When an action is required to be taken, clear assignments should be made
and ac¬cepted by all the members.
8. The leader should not dominate the group. The main idea should not be as
to who controls but how to get the job done.
9. Until a final solution is found and results are attained feedback is necessary.
Objectives of Quality Circles:
Some of the broad objectives of the Quality Circle are:
(i) To improve quality, productivity, safety and cost reduction.

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Notes (ii) To give chance to the employees to use their wisdom and creativity.
(iii) To encourage team spirit, cohesive culture among different levels and sections
of the employees.
(iv) To promote self and mutual development including leadership quality,
(v) To fulfill the self-esteem and motivational needs of employees.
(vi) To improve the quality of work-life of employees.
Implementation of Quality Circles in an Organisation:
For the success of Quality Circle programme, following actions are necessary
in the Organisation:
(a) Few managers representing production, quality control, design, process
planning form the Quality Circle (Q.C.) steering committee. This acts as a
policy making body and will monitor the Q.C. in the Organisation.
(b) Top management must attend the orientation courses designed for them.
(c) A committed top and middle management is necessary.
(d) A facilitator must be appointed, who serves as a link between top management,
Q.C., steering committee, middle management circle leaders and circle
members. Facilita¬tor will coordinate training courses; get the support from
all concerned including top management Q.C., steering committee, circle
leader and circle members to help the circle leader in conducting the meetings,
and to provide necessary resources.

Organisation and Working of Quality Circles:

Q.C. was conceived in Japan in 1962 as a forum for training its work force for
improving the quality of products. Q.C. is a voluntary one. Employees are free to
join or not to join. In it, 8 to 10 employees including the Supervisor from same
workshop doing similar work join together as a group. The Supervisor can become
leader of the group, if the members of Q.C. so desire.
It is a part time activity; members of Q.C. are allowed to meet for an hour every
week. During the various meetings, these groups progressively identify, select,
analyse and solve the problems. Later they offer their proposed solutions to
management for consideration, approval and implementation.
Additionally, a senior officer from same workshop is nominated as facilitator who
guides the activities of the group.
A Management Committee at senior level is also formed, which overview the
progress of Quality Circles.
Training of members, leaders and facilitators is very important for the success
of programme.

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Rules for Quality Circles: Notes

(a) Each member can contribute an idea on his turn in rotation.
(b) Each member offers only one idea per turn regardless of how many he or she
has in mind.
(c) Not everyone has an idea during each rotation, when this occurs just say
“Pass”.
(d) No criticism or comments should be passed on the ideas being contributed
by the member whatever old it may look to be, welcome their ideas.
(e) During brain-storming, no evaluation of suggested idea should occur.
This applies equally to leader, phrases such as “We have tried it before”,
“Impractical”, “Well” “May be it would work”. “Doubtful”, “Very good”
etc. should not be uttered.
(f) Members can vote by raising their hands.
(g) Only supporting votes are taken. Votes against the ideas are not allowed.
(h) The time allotted for brain-storming session should be variable. The length
of time that can be spent profitably will vary widely with nature of problem
and the group itself. As a general practice, one hour is probably the minimum.
(i) While members give their ideas, they are recorded by the Recorder on a large
sheet.
(j) It is often helpful to set a goal originally, i.e. Let us start for 30 ideas.
(k) When all members say “pass” then the first phase of brain-storming session
is over. This means all ideas have been exhausted.
(l) Now all the ideas recorded on the sheet are displayed.
(m) These massive number of ideas are then narrowed down by the process of
voting. The voting technique works because the members are experts in their
areas. Members vote on each idea. The leader records each vote next to the
idea.
(n) Members can vote for as many ideas as they feel have value. Only supporting
votes are taken.
(o) Leader draws a circle around those ideas that receive the most votes. The
members thus find that many of the top ideas will be so identified.
(p) Now the members can focus on a few important ideas instead of being
somewhat confused by a large number of them. These few important ideas
are voted on to give ranking to the circle ideas. Leader writes the ranking
number beside each idea that has been circled.
(q) A member can ask for voting on any idea and argue for or against it. Others
can join, if they wish. Only when the discussion has finished then the voting
take place.
Idea ranked in the session can then be taken up for analysis or solution later on.

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Notes Duties of Circle Leader:

For the success of Quality Circles, circle leader must have following duties:
(i) He must assume the responsibility of guiding the members.
(ii) He must make his members sure about what is going on.
(iii) He must channelise the discussions.
(iv) Every member is allowed equal opportunity.
(v) Specific task be assigned to each member.
(vi) He must work in coordination with facilitator.
Steps for Setting up Quality Circles:
For starting Quality Circles in an organisation, following steps should be
taken:
(i) First of all Managers, Supervisors and Foremen must be made to understand
the concepts and activities of Q.C.
(ii) Management’s total support and commitment should be made known to
everyone in the organisation.
(iii) Steering committee is formed with the top management personnel to give
direction to Quality Circle activities.
(iv) A facilitator (or sometimes known as promoter) is selected from the senior
manage¬ment level, who will serve as coordinator and advisor to the circle.
(v) Supervisor and foreman are then trained to act as Q.C. leaders.
(vi) Members of each circle must be selected from the persons who are doing
similar type of work or belong to the same department or section.
(vii) Membership to the circle is voluntary.
(viii) First few meetings of the circle are held with a view to train them.
(ix) To start with, only one to two circles should be formed in an organisation, and
then increase the number gradually as more and more experience is gained.
(x) Meetings must be held regularly, may be once in a week initially and once
in a month on completion of basic training of members.
(xi) Everyone’s suggestion or problem matching with the circle’s objectives is
discussed.
(xii) Total participation of team members must be encouraged.
(xiii) Recommendations of the circle must be considered and decisions should
be taken without delay.
Benefits of Quality Circles (Q.C.):
1. Through the forum of Q.C. the chronic problems-of organisations which really
create hurdles in work get resolved by the grass root employees of organisation,
whose knowl¬edge and experience otherwise is not fully utilized.

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2. With such a capable work force, any organisation can easily undertake more Notes
difficult and challenging assignments for its growth and profit.
3. As the employees gain experience they take more challenging projects, in due
course they undertake projects on cost reduction, material handling, quality
improvement, preventing wastage, improving delivery schedule, improving
customer service, im¬proving inspection and test methods, preventing
accidents improving design and pro¬cess etc.
4. Cost reduction.
5. Increased productivity.
6. Improved quality.
7. Better communication.
8. Better house-keeping.
9. Increased team work.
10. Smooth working.
11. Better mutual trust.
12. Greater sense of belongingness.
13. Increased safety.
14. Better human relations.
Launching of Quality Circle Programme:
The typical steps for launching programme are as under:
(i) Orientation Programme for Senior Management Personnel.
(ii) Orientation Programme for Managers and Executives.
(iii) Orientation Programme for Selected Supervisors.
(iv) Orientation Programme for Workers (selected area).
(v) Formation of Circles (Minimum 2 and Maximum 4).
(vi) Training of Facilitators.
(vii) Training of Leaders.
(viii) Q.C. meetings for projects.

2.3. JAPANESE 5S PRINCIPLES AND 8D TECHNOLOGY:

JAPANESE 5S PRINCIPLES:
What is 5S?
5S is a systematic form of visual management utilizing everything from floor
tape to operations manuals. It is not just about cleanliness or organization; it is
also about maximizing efficiency and profit. 5S is a framework that emphasizes
the use of a specific mindset and tools to create efficiency and value. It involves
observing, analyzing, collaborating, and searching for waste and also involves
the practice of removing waste.

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Notes The 5S practice is a house keeping technique used to establish and maintain a
productive and quality environment in an organisation.
• SEIRI
• SEITON
• SEISO
• SEIKETSU
• SHITSUKE
OBJECTIVES OF 5S:
• To create a neat and clean work place.
• To systemize day to day working.
• To improve work efficiency.
• To standardize work practices.
• To improve work discipline.
• To improve the quality of work and products.
• SEIRI – Organization/Sort out
• SEITON – Orderliness/Systemize
• SEISO – The Cleaning/Shining
• SEIKETSU – STANDARDIZE
• SHITSUKE - Sustain/Discipline
1. SEIRI:
• Decide what you need
• Remove unnecessary clutter ((a lot of objects in) a state of being untidy)
• All tools, gauges, materials, classified and then stored
• Remove items which are broken, unusable or only occasionally used
2. SEITON:
• Once you have eliminated all the unneeded items
• Now turn to the left-over items
3. SEISO:
• Create a spotless workplace
• Identify and eliminate causes of dirt and grime – remove the need to clean
• Sweep, dust, polish and paint
4. SEIKETSU:
• Generate a maintenance system for the first three
• Develop procedures, schedules, practices
• Continue to assess the use and disposal of items

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• Regularly audit using checklists and measures of housekeeping Notes

• Real challenge is to keep it clean
5. SHITSUKE:
• Means inoculate courtesy & good habits
• Driving force behind all 5S
• Deming’s point number 1: Constancy of purpose
• Make it a way of life
• Part of health and safety
• Involve the whole workforce
• Develop and keep good habits
ADVANTAGES OF 5S
• Health and Safety is ensured
• Machine maintenance
• Quality
• Productivity
• Lean Manufacturing
• Time saving
• Quick retrieval
• Accidents & mistakes minimized
• Increases space
• Creates workplace ownership

8D TECHNOLOGY:
The 8D process alternates inductive and deductive problem-solving tools to
relentlessly move forward toward a solution. The Quality-One approach uses a
core team of three individuals for inductive activities with data driven tools and
then a larger Subject Matter Expert (SME) group for the deductive activities
through brainstorming, data-gathering and experimentation.

D0: Prepare and Plan for the 8D

Proper planning will always translate to a better start. Thus, before 8D analysis
begins, it is always a good idea to ask an expert first for their impressions. After
receiving feedback, the following criterion should be applied prior to forming a
team:
Collect information on the symptoms
Use a Symptoms Checklist to ask the correct questions
Identify the need for an Emergency Response Action (ERA), which protects the
customer from further exposure to the undesired symptoms

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Notes D1: Form a Team

A Cross Functional Team (CFT) is made up of members from many disciplines.
Quality-One takes this principle one step further by having two levels of CFT:
• A Core Team uses data-driven approaches (Inductive or Convergent
Techniques)
 The Core Team Structure should involve three people on the
respective subjects: product, process and data
• SME Team comprised of members who brainstorm, study and observe
(Deductive or Divergent Techniques)
 Additional Subject Matter Experts are brought in at various times to
assist with brainstorming, data collection and analysis
Teams require proper preparation. Setting the ground rules is paramount.
Implementation of disciplines like checklists, forms and techniques will ensure
steady progress. 8D must always have two key members: a Leader and a Champion
/ Sponsor:
• The Leader is the person who knows the 8D process and can lead the team
through it (although not always the most knowledgeable about the problem
being studied)
• The Champion or Sponsor is the one person who can affect change by
agreeing with the findings and can provide final approval on such changes

D2: Describe the Problem

The 8D method’s initial focus is to properly describe the problem utilizing the
known data and placing it into specific categories for future comparisons. The
“Is” data supports the facts whereas the “Is Not” data does not. As the “Is Not”
data is collected, many possible reasons for failure are able to be eliminated. This
approach utilizes the following tools:
• 5 Why or Repeated Why (Inductive tool)
 Problem Statement
• Affinity Diagram (Deductive tool)
• Fishbone/Ishikawa Diagram (Deductive tool)
• Is / Is Not (Inductive tool)
 Problem Description
D3: Interim Containment Action
In the interim, before the permanent corrective action has been determined, an
action to protect the customer can be taken. The Interim Containment Action
(ICA) is temporary and is typically removed after the Permanent Correct Action
(PCA) is taken.

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• Verification of effectiveness of the ICA is always recommended to prevent Notes

any additional customer dissatisfaction calls

D4: Root Cause Analysis (RCA) and Escape Point

The root cause must be identified to take permanent action to eliminate it. The
root cause definition requires that it can be turned on or off, at will. Activities in
D4 include:
• Comparative Analysis listing differences and changes between “Is” and
“Is Not”
• Development of Root Cause Theories based on remaining items
• Verification of the Root Cause through data collection
• Review Process Flow Diagram for location of the root cause
• Determine Escape Point, which is the closest point in the process where
the root cause could have been found but was not

D5: Permanent Corrective Action (PCA)

The PCA is directed toward the root cause and removes / changes the conditions
of the product or process that was responsible for the problem. Activities in D5
include:
• Establish the Acceptance Criteria which include Mandatory Requirements
and Wants
• Perform a Risk Assessment / Failure Mode and Effects Analysis (FMEA)
on the PCA choices
• Based on risk assessment, make a balanced choice for PCA
• Select control-point improvement for the Escape Point
• Verification of Effectiveness for both the PCA and the Escape Point are
required

D6: Implement and Validate the Permanent Corrective Action

To successfully implement a permanent change, proper planning is essential. A
project plan should encompass: communication, steps to complete, measurement
of success and lessons learned. Activities in D6 include:
• Develop Project Plan for Implementation
• Communicate the plan to all stakeholders
• Validation of improvements using measurement
D7: Prevent Recurrence
D7 affords the opportunity to preserve and share the knowledge, preventing
problems on similar products, processes, locations or families. Updating

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Notes documents and procedures / work instructions are expected at this step to improve
future use. Activities in D7 include:
• Review Similar Products and Processes for problem prevention
• Develop / Update Procedures and Work Instructions for Systems
Prevention
• Capture Standard Work / Practice and reuse
• Assure FMEA updates have been completed
• Assure Control Plans have been updated
D8: Closure and Team Celebration
Teams require feedback to allow for satisfactory closure. Recognizing both team
and individual efforts and allowing the team to see the previous and new state
solidifies the value of the 8D process. Activities in D8 include:
• Archive the 8D Documents for future reference
• Document Lessons Learned on how to make problem solving better
• Before and After Comparison of issue
• Celebrate Successful Completion

2.4. TQM LEADERSHIP:

DEFINITION:
There is no universal definition of leadership and indeed many books have been
devoted to the topic of leadership. In his book Leadership, James MacGregor
Burns describes a leader as one who instills purposes and not one who controls by
brute force. A leader strengthens and inspires the followers to accomplish shared
goals. Leaders shape, promote, protect and exemplify the organization‘s values.
Ultimately, Burns says, ―Leaders and followers raise one another to higher levels
of motivation and morality… leadership becomes moral in that it raises the level
of human conduct and ethical aspiration of both the leader and the led and thus
has a transforming effect on both.
Similarly, Daimler Chrysler‘s CEO Bob Eaton defines a leader as someone who
can take a group of people to a place they don‘t think they can go.
Leadership is we, not me, mission, not my show, vision, not division and
community, not domicile. As can be understood, leadership is difficult to define
in anything other than lofty words.
The Malcolm Baldrige National Quality Award has a more grounded definition of
leadership in its core values. As stated in its core values and concepts, visionary
leadership is as follows:
An organization‘s senior leaders should set directions and create a customer
focus, clear and visible values, and high expectations. The directions, values and

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expectations should balance the needs of all your stakeholders. Your leaders should Notes
ensure the creation of strategies, systems and methods for achieving excellence,
stimulating innovation and building knowledge and capabilities.
The values and strategies should help guide all activities and decisions of your
organization. Senior leaders should inspire and motivate your entire workforce
and should encourage all employees to contribute, to develop and learn, to be
innovative and to be creative.
Senior leaders should serve as role models through their ethical behavior and
their personal involvement in planning, communication, coaching, development
of future leaders, review of organizational performance and employee recognition
as role models, they can reinforce values and expectations while building
leadership, commitment and initiative throughout your organization. Leadership
can be difficult to define. However, successful quality leaders tend to have certain
characteristics.

CHARACTERISTICS OF QUALITY LEADERS:

There are 12 behaviors or characteristics that successful quality leaders
demonstrate. These are as follows:
1. They give priority attention to external and internal customers and their
needs. Leaders place themselves in the customers‘ shoes and service their
needs from that perspective. They continually evaluate the customers‘
changing requirements.
2. They empower, rather than control, subordinates. Leaders have trust and
confidence in the performance of their subordinates. They provide the
resources, training and work environment to help subordinates do their
jobs. However, the decision to accept responsibility lies with the individual.
3. They emphasize improvement rather than maintenance. Leaders use the
phrase ―If it isn‘t perfect, improve it rather than ―If it ain‘t broke, don‘t
fix it. There is always room for improvement, even if the improvement
is small. Major breakthroughs sometimes happen, but it is the little ones
that keep the continuous process improvement on a positive track.
4. They emphasize prevention. ―An ounce of prevention is worth a pound
of cure‖ is certainly true. It is also true that perfection can be the enemy of
creativity. We cannot always wait until we have created the perfect process
or product. There should be a balance between preventing problems and
developing better, but no perfect, processes.
5. They encourage collaboration rather than competition. When functional
areas, departments or work groups are in competition, they may find subtle
ways of working against each other or withholding information. Instead,
there should be collaboration among and within units.

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Notes 6. They train and coach, rather than direct and supervise. Leaders know that
the development of human resource is a necessity. As coaches, they help
their subordinates learn to do a better job.
7. They learn from problems. When a problem exists, it is treated as an
opportunity rather than something to be minimized or covered up. ―What
caused it? and ―How can we prevent it in the future? are the questions
quality leaders ask.
8. They continually try to improve communications. Leaders continually
disseminate information about the TQM effort. They make it evident
that TQM is not just a slogan. Communication is two way-- ideas will
be generated by people when leaders encourage them and act upon
them. For example, on the eve of Operation Desert Storm, General Colin
Powell solicited enlisted men and women for advice on winning the war.
Communication is the glue that holds a TQM organization together.
9. They continually demonstrate their commitment to quality. Leaders walk
their talk-- their actions, rather than their words, communicate their level
of commitment. They let the quality statements be their decision-making
guide.
10. They choose suppliers on the basis of quality, not price. Suppliers are
encouraged to participate in project teams and become involved. Leaders
know that quality begins with quality materials and the true measure is
the lifecycle cost.
11. They establish organizational systems to support the quality effort. At the
senior management level, a quality council is provided and at the first-line
supervisor level, work groups and project teams are organized to improve
the process.
12. They encourage and recognize team effort. They encourage, provide
recognition to and reward individuals and teams. Leaders know people
like to know that their contributions are appreciated and important. This
action is one of the leader‘s most powerful tools.

ROLE OF SENIOR MANAGEMENT:

1. Study and investigate TQM concepts and issues
2. Set clear quality policies and provide challenging tasks
3. Establish customer satisfaction as a long term goal
4. To become coaches and cheer leaders for encouraging and supporting the
managers during transition phase of the transformation
5. To stimulate employees to be involved
6. To attend TQM training programs
7. To up hold norms and issues

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8. To create a basic of trust, respect and open communication that ensures Notes
individual participation and continuous improvement.
9. To monitor whether quality improvement programs are conducted as planned.

LEADERSHIP STYLES:
1. Autocratic leadership style:
In this style of leadership, a leader has complete command and hold over their
employees/team. The team cannot put forward their views even if they are best
for the team’s or organizational interests. They cannot criticize or question the
leader’s way of getting things done. The leader himself gets the things done.
The advantage of this style is that it leads to speedy decision-making and greater
productivity under leader’s supervision. Drawbacks of this leadership style are that
it leads to greater employee absenteeism and turnover. This leadership style works
only when the leader is the best in performing or when the job is monotonous,
unskilled and routine in nature or where the project is short-term and risky.

2. The Laissez Faire Leadership Style:

Here, the leader totally trusts their employees/team to perform the job themselves.
He just concentrates on the intellectual/rational aspect of his work and does not
focus on the management aspect of his work. The team/employees are welcomed
to share their views and provide suggestions which are best for organizational
interests. This leadership style works only when the employees are skilled, loyal,
experienced and intellectual.

3. Democrative/Participative leadership style:

The leaders invite and encourage the team members to play an important role
in decision-making process, though the ultimate decision-making power rests
with the leader. The leader guides the employees on what to perform and how to
perform, while the employees communicate to the leader their experience and
the suggestions if any. The advantages of this leadership style are that it leads to
satisfied, motivated and more skilled employees. It leads to an optimistic work
environment and also encourages creativity. This leadership style has the only
drawback that it is time-consuming.

4. Bureaucratic leadership:
Here the leaders strictly adhere to the organizational rules and policies. Also,
they make sure that the employees/team also strictly follows the rules and
procedures. Promotions take place on the basis of employees’ ability to adhere
to organizational rules. This leadership style gradually develops over time.
This leadership style is more suitable when safe work conditions and quality
are required. But this leadership style discourages creativity and does not make
employees self-contented.

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Notes
2.5. STRATEGIC QUALITY PLANNING:
DEFINITION:
Strategic quality planning (SQP) is a systematic approach to defining long-term
business goals, including goals to improve quality and the means (i.e., the plans)
to achieve them. Many organizations have created a vision “to be the best,”
toward a goal of outperforming competitors. Many of these organizations fall
short in achieving this vision. Most do not align, or have difficulty aligning, their
performance excellence initiatives like lean and Six Sigma to the annual business
plan. This leads to lack of resources to complete projects, which in turn makes
them hard to justify.
To achieve a vision it is necessary to align the annual goals to your major change
initiatives or quality programs and integrate them into the strategic plan. This will
ensure the new focus becomes part of the plan and sustainable.
Japanese quality leaders refer to this process as hoshin kanri or “policy deployment.
Ho, shin, kan, and ri are actually four words that loosely translate to “focus,
direction, alignment, and reason.”
Focus by creating goals that provide direction and alignment of the resources
needed from the organization to meet those goals and the reasons for selection
them. The reasons force management to understand why it is selecting these goals.

BENEFITS OF STRATEGIC QUALITY PLANNING:

The potential benefits of strategic quality planning and deployment include:
• Classification of goals
• Achievability of goals
• Scheduled reduction of chronic wastes and improved quality of products
and services
• Better or new focus on customers
Strategic quality planning is the systematic process by which an organization
defines its long-term goals with respect to quality and customers, and integrates
them into a cohesive business plan. It enables an organization to execute
organizational breakthroughs to achieve a competitive advantage and quality
leadership.
The approach to providing organization wide financial goals has evolved into a
more robust strategic plan, incorporating these goals into a hierarchy that includes
the voice of the customer. A structured methodology must include a provision of
rewards, universal participation, a common language, and training.
Launching a strategic plan
Creating a strategic plan requires that leaders be personally involved, eliminating
the atmosphere of blame, and making decisions on the best available data. The

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strategic deployment process requires incorporating the customer focus. The Notes
elements needed are generally alike for all organizations. The ones in most
widespread use tend to be:
• Mission
• Vision
• Values
• Policy
The mission is the reason for the organization’s existence. The vision is the desired
future state of the organization. Values are what the organization stands for, and
they tie into strategies, which are the means to achieve the vision. Policies represent
a guide to managerial action, guiding day-to-day decision-making. And finally,
the deployment plan is what turns vision into action.
Developing the plan
Strategic deployment begins with a customer-focused vision, which should define
the benefits that can be expected. Good vision statements should be compelling
and shared throughout the organization. But vision statements are only words—a
reminder of what the organization is pursuing, which must be carried out
through actions. When forming a vision, it’s important not to focus exclusively
on shareholders, to properly explain the vision to everyone involved, and not to
create a vision too easy or difficult to achieve.
A mission is often confused with a vision, but a mission statement should clarify
an organization’s purpose. Together, a vision and mission provide an agreed-upon
direction, which can be used as a basis for decision-making.
To convert the vision into an achievable plan, it must be broken into key strategies.
Responsibility for them must be distributed to key executives. To determine what
the strategies should be, five areas must be assessed
• Customer loyalty and satisfaction
• Costs related to poor quality of products or processes
• Organization’s culture
• Business processes
• Competitive benchmarking
Each of these areas can form the basis for a balanced business scorecard. The key
strategies can be modified to reflect long-term goals. An organization must set
specific strategic goals that must be achieved for the broad strategy to be a success.
Seven areas must be addressed to ensure that the proper goals are established:
• Product performance
• Competitive performance
• Business improvement

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Notes • Cost of poor quality

• Performance of business processes
• Customer satisfaction
• Customer loyalty and retention
Goals that affect product salability and revenue generation should be based
primarily on meeting or exceeding marketplace quality. A widely used basis for
setting goals has been historical performance.
Corporate values reflect an organization’s culture. Some organizations create value
statements to further define themselves. Values are what an organization stands
for, and must be supported with actions from management lest their publication
create cynicism.
Policy declarations are a necessity during a period of major change. Most
declare the intention to meet the needs of customers, and include language
relative to competitiveness in quality. Some include specific reference to internal
customers, or indicate that the improvement should extend to all phases of the
business. Enforcement of new policies is a problem due to the relative newness of
documented quality policies. Sometimes, an audit process is mandated to ensure
the policy is carried out.
A fundamental step in establishing any strategic plan is the participation of upper
management. The executives are responsible for ensuring all business units have
a similar council at the subordinate levels of the organization. If a council is not
in place, the organization should create one.
Once the strategic goals have been agreed upon, they must be subdivided and
communicated to lower levels. Those who are assigned responsibility must
determine the needed resources and communicate this to higher levels. The
deployment process starts by identifying the needs of the organization.

Measuring progress
There are several reasons why an organized approach to measuring performance
is necessary:
• Performance measures indicate the degree of accomplishment of
objectives
• Performance measures are needed to monitor the improvement process
• Performance measures are required for periodic reviews by management
Once goals have been broken down into sub-goals, key measures need to be
established. The best measures of the strategic planning process are simple,
quantitative, and graphic. As goals are set and deployed, the means to achieve
them must be analyzed to ensure they satisfy the objective they support. Once
the system is in place, it must be reviewed periodically to ensure that goals are
being met.

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A formal, efficient review process will increase the probability of reaching the Notes
goals. The review process looks at gaps between what has been achieved and
the target. Frequent measurements of progress displayed in graphic form help
identify the gaps in need of attention. Success in closing those gaps depends on a
formal feedback loop with clear responsibility and authority for acting on those
differences.
Pursuing too many objectives at the same time will dilute the results. Trying to
plan without adequate data can create an unachievable plan. If leaders delegate too
much, there will be a lack of direction. The biggest disruption caused by strategic
planning is created by imposing a structured approach on those who prefer not
to have it. Resistance will be evident at the outset. Therefore, the most important
prerequisite is the creation of an environment conducive to change.
SEVEN STEPS TO STRATEGIC QUALITY PLANNING
In order to integrate quality with the strategic planning process, a systematic and
sequential procedure has to be adopted. There are seven basic steps to strategic
process planning. They are
Step 1. Customer Needs
The basic step is the identification of customers and their wants and needs. An
organization must seek its customers’ requirements, expectations and assess future
trends before developing a strategic plan.
Step 2. Customer Position
The second step requires the planners to determine its positioning with regards to
its customers. Various alternatives such as whether the organization should give
up, maintain or expand market position should be considered. In order to become
successful, the organization should concentrate and consolidate its position in its
areas of excellence.

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Notes Step 3. Predict the Future

Next, the planners must predict future conditions that will affect their product or
service: To help predicting the future, the tools such as demographics, economic
forecasts, and technical assessments or projections may be used.
Step 4. Gap Analysis
In this step, the planners must identify the gaps between the current state and
the future state of the organization. This concept is also known as value stream
mapping. For identifying the gaps, an analysis of the core values and concepts
and other techniques may be used.
Step 5. Closing the Gaps
Now the planners should develop a specific plan to close the gaps. This process
is also termed as Process improvement. By assessing the relative importance and
relative difficulty of each gap, planners can close the gaps.
Step 6. Alignment
Now the revised plan should be aligned with the mission, vision, and core values
and concepts of the organization. Organization should embrace quality as an
essential ingredient in their vision, mission, and objectives.
Step 7. Implementation
In order to implement the action plan, resources must be allocated to collecting
data, designing changes, and overcoming resistance to change. Also the planners
should monitor and assess the result of the strategic plan.
Since quality is a continuous improvement process, one has to reassess and renew
the strategic plans periodically. So it is a cyclic process.

2.6. QUALITY COUNCIL:

DEFINITION:
In order to build quality into the culture, a quality council is established to provide
overall direction. It is the driver for the TQM engine.
In a typical organization the council is composed of the chief executive officer
(CEO); the senior managers of the functional areas, such as design, marketing,
finance, production, and quality; and a coordinator or consultant. If there is a
union, consideration should be given to having a representative on the council.
A coordinator is necessary to assume some of the added duties that a quality
improvement activity requires. The individual selected for the coordinator’s
position should be a bright young person with executive potential. That person
will report to the CEO.
The responsibility of the coordinator is to build two-way trust, propose team
needs to the council, share council expectations with the team, and brief the

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council on team progress. In addition, the coordinator will ensure that the teams Notes
are empowered and know their responsibilities. The coordinator’s activities are
to assist the team leaders, share lessons learned among teams, and have regular
leader’s meetings.
In smaller organizations where managers may be responsible for more than one
functional area, the number of members will be smaller. Also, a consultant would
most likely be employed rather than a coordinator.

DUTIES OF QUALTIY COUNCIL:

In general, the duties of the quality council are to:
1. Develop, with input from all personnel, the core values, vision statement,
mission statement, and quality policy statement.
2. Develop the strategic long-term plan with goals and the annual quality
improvement program with objectives.
3. Create the total education and training plan.
4. Determine and continually monitor the cost of poor quality.
5. Determine the performance measures for the organization, approve those
for the functional area, and monitor them.
6. Continually determine those projects that improve the processes,
particularly those that affect external and internal customer satisfaction.
7. Establish multifunctional project and departmental or work group teams
and monitor their progress.
8. Establish or revise the recognition and reward system to account for the
new way of doing business.
In large organizations, quality councils are also established at lower levels of
the corporation. Their duties are similar but relate to that particular level in the
organization. Initially these activities will require additional work by council
members; however, in the long term, their jobs will be easier. These councils are
the instruments for perpetuating the idea of never-ending quality improvement.
Once the TQM program is well established, a typical meeting agenda might have
the following items:
• Progress report on teams
• Customer satisfaction report.
• Progress on meeting goals
• New project teams
• Recognition dinner
• Benchmarking report

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Notes Eventually, within three to five years, the quality council activities will become so
ingrained in the culture of the organization that they will become a regular part of
the executive meetings. When this state is achieved, a separate quality council is
no longer needed. Quality becomes the first item on the executive meeting agenda.

2.7. EMPLOYEE MOTIVATION:

What is Employee motivation?

Definition: Employee motivation is defined as the enthusiasm, energy level,
commitment and the amount of creativity that an employee brings to the
organization on a daily basis.Motivation is derived from the Latin word, “movere”
which literally means movement. All the definitions that you would read in books
or in dictionary relate to the fact that motivation is behaviour and one needs to
channelize this behaviour in order to achieve desired goals and results.
Employee motivation is all about how engaged an employee feels in tandem to the
organization’s goals and how empowered he/she feels. Motivation is of two types:
• Intrinsic motivation
• Extrinsic motivation
Motivated employees are an asset to an organization, they are directly proportional
to an organization’s success. Motivation is intangible, difficult to measure and
extremely difficult to control, but very easy to facilitate if done right. It’s all about
intention, intensity, and perseverance.

Types of employee motivation

There are two types of motivation, intrinsic and extrinsic. An organization needs
to understand for a fact that not employees are clones, they are individuals with
different traits. Thus effectively, motivating your employees will need to acquire
a deeper understanding of the different types and ways of motivation.
With this understanding, you will be able to categorize your employees better and
apply the right type of motivation to increase the level of employee engagement
and employee satisfaction. Some employees respond better to intrinsic motivation
while others may respond better to extrinsic motivation.

Intrinsic motivation
Intrinsic motivation means that an individual is motivated from within. He/she has
the desire to perform well at the workplace because the results are in accordance
with his/her belief system.
An individual’s deep-rooted beliefs are usually the strongest motivational factors.
Such individuals show common qualities like acceptance, curiosity, honor, desire
to achieve success.

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Research has shown that praise increases intrinsic motivation, so does positive Notes
employee feedback. But it should all be done in moderation. If you overdo any
of these, there are high chances that the individual loses motivation.
It is well observed in children and I am using this as an example here if children
are overpraised for the little things they are expected to do on a daily basis, their
motivation level decreases. Now if you are reading this blog, there are good
chances you are not a child, although we encourage children to read good content,
the purpose of writing this blog is to still focus on adults.
So if you are a manager, supervisor or in a leadership role, please be intentional
with your feedback or praise. Make sure it is empowering and your employees
understand your expectations.

Extrinsic motivation
Extrinsic motivation means an individual’s motivation is stimulated by external
factors- rewards and recognition. Some people may never be motivated internally
and only external motivation would work with them to get the tasks done.
Research says extrinsic rewards can sometimes promote the willingness in a person
to learn a new skillset. Rewards like bonuses, perks, awards, etc. can motivate
people or provide tangible feedback.
But you need to be careful with extrinsic rewards too! Too much of anything can
be harmful and as a manager or a supervisor, you need to be clear to what extent
are you going to motivate your employees to accomplish organizational goals.
Top 10 ways to motivate employees
If you are looking for ways to motivate your employees at work, here are the 5
simple ways of making it work:
1. Employee motivation surveys: Use an online survey software or platform to
conduct employee motivation surveys. Let them give candid and genuine
feedback about their experience, ideas, and suggestions. This will help you
identify areas that need your attention.
2. Employee satisfaction surveys: Employee satisfaction depends on a ton of
factors such as work environment, infrastructure, roles and responsibilities,
etc. Conducting employee satisfaction surveys will help Managers understand
dissatisfaction factors and act on them. Frequent surveys will help addressing
dissatisfaction issues faster.
3. Job well done- recognize it! Recognition plays a huge role in increasing the
motivation levels of the employees. It helps create a healthy bond between
the employer and employees. It not only fulfills our basic need of esteem but
also facilitates belonging.
4. Focus on intrinsic rewards: It is true some people need rewards to get tasks
done, but extrinsic rewards fade very quickly. Focus on motivating your

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Notes employees from within. Some may even say, “yeah this is all good but we
gotta eat and pay rent”… well, that’s true, for that you compensate your
employees well, but make sure you create values for your organization that
are long-lasting.
5. Autonomy not bureaucracy: Micromanagement is the worst thing you can do
as a manager. It is not only time consuming, but also really unwanted. If you
have hired people with certain skillset let them do their job, be a facilitator,
not a dictator. Human beings value autonomy, give them the freedom to get
things done in ways acceptable and see the changes.
6. Create an amazing work environment: No, it’s not Fussball, or free snacks or
a coffee machine. According to a study conducted by Ohio State University,
your work environment seriously impacts your mood. So it does make sense
to invest in the work environment where people actually spend 60 hours a
week. Creating a good atmosphere will motivate your staff. Just go ahead
and do it.
7. Be a visionary: Lead with vision. Employees need to know their efforts are
driving something important. They need to know their destination and more
importantly the path that will take them there. If as a leader you lack the
vision for your own organization, how do you expect them to own up to your
vision? Make a visual reminder of your organization’s road map, encourage
your employees to add to that. You will be surprised how innovative they
can get.
8. Solicit ideas and suggestions, act on them: Now that you have conducted
surveys, you have received feedback from your employees. Ensure that the
ideas, suggestions, grievances that they have put forth will looked into and
addressed in a timely fashion.
9. Career-pathing: Having a career growth plan with clearly mentioned
roles and responsibilities is crucial to employees. It helps them focus, and
direct their efforts to an achievable goal. Make sure that you sit down with
every employee and come up with a career plan that is transparent and
communicated clearly.
10. Provide flexibility: Not all employees are alike. Some prefer 9-5, others not
much; some like coming to work daily, others not much. For some, commuting
to work might be long and challenging. Allow some flexibility within reason
and your employees will be happy and motivated.
What is the importance of employee motivation?
According to psychologists, self-realization is a very human thing. It is our basic
nature to nurture something and see it flourish, it is applicable to most things we
do in our day-to-day life. This is true for both social and societal spaces.
Motivation plays a very important factor in a human’s life. Whether it is about
improving ourselves or our organization’s performance. Motivated employees

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don’t need to be told how to get things done, they take initiatives, are eager to Notes
take up additional responsibilities, are innovative and go-getters.
Motivated employees ensure:
• There is a positive atmosphere within the organization
• Co-workers are happy and feel safe at work
• Make sure clients are happy
• They always achieve better results than their counterparts
Motivation, therefore, plays a very important factor and ensures employees remain
active and contribute their best towards their organization. Furthermore, a high
level of motivation leads to a lower level of employee turnover. In the next section,
you will learn about the 5 simple ways to motivate your employees.

MOTIVATION THEORY
• Herzberg’s Motivation Theory
HERZBERG’S MOTIVATION THEORY
Herzberg’s motivation theory or two-factor theory says there are two factors
to which an organization can adjust to influence the levels of motivation at the
workplace.
The two factors identified by Herzberg are:
Motivators Hygiene Factors
Recognition Security
Growth Company policies
Achievements Salary
The work itself Work conditions
Responsibility Manager/supervisor
1. Motivating factors: The presence of motivating factors encourages employees
to work harder. They are the factors found in the workplace.
2. Hygiene factors: Hygiene factor if not present will discourage employees
from doing their best at work. Hygiene factors are the surrounding factors
that facilitate employees behavior.
Here are some of the examples of motivators and hygiene factor
There are 4 statistics that are involved here:
1. High hygiene & high motivation
This is an ideal situation any manager or supervisor would want to achieve. Here
all the employees are happily motivated and have very few grievances.
2. High hygiene & low motivation
In this situation, employees have very few grievances but are also not highly
motivated. A very good example of this situation is employees are paid well but

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Notes the work is not very interesting. Employees simply collect their pay cheques and
leave.
3. Low hygiene and high motivation
This is a tricky one, here employees are highly motivated but also have numerous
grievances. A typical example of a situation like this is when the work is extremely
interesting but the employees are not paid as per the market standard.

4. Low hygiene & low motivation

No points for guessing, it is obviously a pretty bad situation. Here neither the
employees are motivated nor are the hygiene factors are in place.

MASLOW HIERARCHY OF NEEDS

Maslow’s hierarchy of needs is a theory of psychology explaining human
motivation based on the pursuit of different levels of needs. The theory states
that humans are motivated to fulfil their needs in a hierarchical order. This order
begins with the most basic needs before moving on to more advanced needs. The
ultimate goal, according to this theory, is to reach the fifth level of the hierarchy:
self-actualization.

PHYSIOLOGICAL NEEDS
Physiological needs are the lowest level of Maslow’s hierarchy of needs. They
are the most essential things a person needs to survive. They include the need for
shelter, water, food, warmth, rest, and health. A person’s motivation at this level
derives from their instinct to survive.

SAFETY NEEDS
The second level of Maslow’s hierarchy of needs consists of safety needs. Safety,
or security needs, relate to a person’s need to feel safe and secure in their life and
surroundings. Motivation comes from the need for law, order, and protection from
unpredictable and dangerous conditions.
There are many examples of safety needs in modern society. To find stability
and security, a person must consider their physical safety. This means seeking
protection from the elements, violent conditions, or health threats and sickness.
Additionally, an individual needs economic safety to live and thrive in modern
societies. This refers to the need for job security, stable income, and savings. One
method of achieving economic safety is to learn proper investment strategies.

LOVE AND BELONGING NEEDS

The third level of Maslow’s hierarchy of needs is love and belonging needs.
Humans are social creatures that crave interaction with others. This level of the
hierarchy outlines the need for friendship, intimacy, family, and love. Humans
have the need to give and receive love; to feel like they belong in a group. When
deprived of these needs, individuals may experience loneliness or depression.

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ESTEEM NEEDS Notes

The fourth level of Maslow’s hierarchy of needs is esteem needs. Esteem needs
are related to a person’s need to gain recognition, status, and feel respected. Once
someone has fulfilled their love and belonging needs, they seek to fulfil their
esteem needs.
Maslow broke up esteem needs into two categories: the need for respect from
others and the need for respect from oneself. Respect from others relates to
achieving fame, prestige, and recognition. Respect from oneself relates to dignity,
confidence, competence, independence, and freedom.

SELF-ACTUALIZATION NEEDS
The fifth and final level of Maslow’s hierarchy of needs is self-actualization needs.
Self-actualization relates to the realization of an individual’s full potential. At this
level, people strive to become the best that they possibly can be.
The need for self-actualization can manifest in different ways, such as:
• Obtaining skills (e.g., financial modeling skills)
• Continued education (e.g., online training courses)
• Utilizing skills, knowledge, and talents
• Pursuing life dreams
• Seeking happiness
One person may strive to become the best parent and everyone’s best friend.
Another person might aim to become a millionaire and philanthropist. Others
may work toward becoming a famous athlete. In general, self-actualization is the
pursuit of personal growth.
How to use this theory in practice?
1. First and foremost rectify and change bureaucratic company policies. Make
sure your Human Resources is in line with what other organizations are
offering and they know what are the leadership’s expectations. Keeping both
in mind draft policies that is a win-win with everyone.
2. Ensure your managers are also mentors and not just bosses. Each employee
should be respected and supported.
3. Organizational culture plays a very crucial role here. No cliches here.
4. Make sure the compensation, perks, and bonuses are as per the market
standards. If you don’t compensate your employees well, why would they
show interest in taking any initiatives?
5. To increase job satisfaction make sure the jobs are constructed well and
employees find their jobs meaningful.
6. Delegate your employees’ responsibilities, make them feel valued. Respect
their individuality, listen to their feedback seriously and take action wherever
necessary.

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Notes
2.8. EMPLOYEE EMPOWERMENT AND EMPLOYEE
INVOLVEMENT
2.8.1 EMPLOYEE EMPOWERMENT
What is employee empowerment?
When someone is empowered, they have the ability to accomplish something
- and they know it, giving them the confidence needed to succeed. Employee
empowerment refers to the manner in which companies provide their employees
with anything and everything they need to succeed. This involves far more than
simple resource allocation, however. Companies that are interested in empowering
employees should act on the following:
• Give employees a voice by regularly soliciting and acting on their feedback.
• Provide opportunities for employees to grow through more autonomy,
additional responsibilities, or even an entirely new role.
• Recognize employees frequently to increase their engagement and
confidence in their own abilities.
• And, of course, provide employees with the tools, training, and authority
they need to excel.
A company’s leaders, HR professionals, and fellow employees all play key roles
in establishing a supportive, empowered environment. All parties need to establish
mutual trust, feel comfortable taking risks, and establish clear expectations and
guidelines. Without this collaboration, truly empowering employees is impossible.
The benefits of employee empowerment
Employee empowerment can instill greater trust in leadership, encourage employee
motivation, lead to greater creativity, and improve employee retention - all of
which ultimately results in a better bottom line.
Motivated employees
Empowering employees through greater autonomy has been directly linked to
increased employee motivation. Experts agree that employees who have more
control over how, when, and where they do their job will work harder and find
their work more engaging. And given the chance to show off what they can do,
employees will put their best foot forward and feel more satisfied at the end of
the day.

Greater trust in leadership

A meta analysis published in Harvard Business Review states that leaders who
empower their employees are more likely to be trusted by their subordinates
compared to leaders who do not empower their employees. This is not to say that
empowering employees involves pushing work onto underlings that managers
don’t feel like doing themselves. Leaders who empower their employees act as

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coaches, pushing their employees to do their best work and supporting them along Notes
the way. Empowered employees felt that their leaders would not take advantage
of their hard work - instead, they would recognize and celebrate their wins.

Improved creativity
In the same Harvard meta analysis, leaders who were perceived as empowering
had direct reports who were more likely to be rated by their colleagues as being
highly creative. Unsurprisingly, subordinates who allowed their employees to
think for themselves and collaborate across teams generated more novel ideas.
Not only that, direct reports who felt empowered were more likely to volunteer
for extra assignments and support their organizations outside of their day-to-day
job function. Psychologists suspected that empowered individuals were more
committed to meaningful goals, and used their creativity to achieve them.

A stronger bottom line

At the end of the day, companies that promote employee empowerment are simply
performing better than those that don’t. Businesses with highly motivated workers
are 21 percent more profitable. On the other hand, disengaged employees in the
U.S. cost businesses a staggering $450 to $550 billion each year.

4. steps for empowering employees in the workplace

There are tremendous benefits to empowering employees, but ingraining it in a
company’s culture takes a considerable level of focus. Start implementing best
practices throughout your organization by following these four steps.

1. Show employees that their feedback matters

Many companies distribute annual engagement surveys, but very few actually take
the time to read employee comments, let alone act on them. Survey fatigue is a
direct result of leadership not taking immediate action on feedback. And even if
they do act on the results of an annual survey, chances are that any response will
take place too late to make a difference, as it takes months to move through stages
of the annual survey cycle from deployment to analysis to response.
Encouraging employees to frequently provide honest feedback and actively
changing your organization to fit their needs empowers employees by giving them
a real voice in how the organization functions. In Achievers’ Engagement and
Retention Report, 90 percent of workers said that they are more likely to stay at
a company that takes and acts on feedback. HR and engagement leaders agree -
64 percent say an always-on feedback tool is essential to an engagement listening
program. However, only 20 percent use such a tool.
The timing and manner in which a company collects feedback has a direct impact
on the results they will receive. Consider using an always on, employee-driven
feedback tool - such as a workplace chatbot - so that employees can give feedback
at the moments that matter most to them. You can combine this type of feedback

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Notes channel with pulse surveys — another strategic complement to a modern-day

employee engagement strategy. They are typically a limited series of questions
(5-20) sent on a quarterly basis to track engagement levels and understand what’s
driving engagement over time.
Ensure you choose a platform that empowers managers to take action as well.
Using an employee feedback platform can immediately show leaders what drives
their employees’ engagement via dashboards and heat maps that indicate exactly
where managers can make the greatest impact. With these real-time insights that
provide guidance for any situation, managers can take positive action by engaging
in a post-pulse survey listening session where they and their team can collectively
plan and take responsibility for the response to feedback.
Feedback reveals how to effectively empower your workforce
Companies need to tailor their empowerment strategy to individual employees
and their organizational culture. Take the time to determine what employee
empowerment methods work best for your team members. And empower
employees to provide feedback to managers and senior leadership from the start
of their time with the company, so they get into the habit and any early issues
can be identified and addressed. Facilitating open, honest conversations between
employees and leaders by using the right engagement solution is a key way to
empower all team members and increase trust.
2. Recognize to empower
Recognition goes a long way. Employees who are recognized for exceptional work
feel more empowered to do their best, and recognition has been directly linked to
higher empowerment. In addition, Brandon Hall Group’s Culture of Recognition
Pulse Survey found that organizations with a high rate of employee recognition
have more than double the employee engagement, and employees who work for a
business that consistently recognizes its employees are 79 percent more likely to
give their employer a high brand rating. Recognition improves motivation as well:
90 percent of employees say receiving recognition motivates them to work harder.
To empower employees through recognition, give them words of support,
encouragement, and praise. Acknowledge their accomplishments so they know
you’re invested in their success and trust them. Recognition from all levels - from
peers, to managers, to the C-suite - is critical for establishing an empowering
culture at your organization.
Recognizing behaviors that are in line with company values incentivizes employees
to keep doing them, empowering them with the confidence they need to live your
values. 92 percent of workers agree that they are more likely to take a specific
action again in the future if they are recognized for doing it the first time. Using
a recognition platform can foster an environment of empowerment, and make it
easy for employees to feel good about taking positive risks. Besides improving
individual performance, employee recognition platforms have been shown to
improve NPS scores and raise stock prices.

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3. Provide opportunities for professional growth — and the necessary Notes

support
Professional growth and employee empowerment are highly interconnected. 87
percent of millennials say that development is important in a job, and as millennials
make up over a third of the workforce, it’s in your best interest to meet their needs.
But the need to focus on professional development is not limited by generation,
as 40 percent of employees who receive poor training will leave their job within
5 years.
All companies must then invest in learning and development. Urging employees
to share their knowledge, take on new responsibilities, and attend industry
conferences or events gives them the power to learn and improve their skills.
And empowering employees to take ownership of their own projects and sharpen
their critical thinking ensures that they’ll be ready for new opportunities. When
employees are exposed to these opportunities, they feel like a valued member of
the workplace community.
Fostering professional growth also demands that HR establishes a clear path for
career advancement at their company. Even if employees feel empowered, it can
be discouraging to work towards an ill-defined or unattainable goal. Promoting
employees in-house shows that growth and success has tangible rewards at your
organization, so all your team members can feel confident that they too can find
a long-term home with your company.
Companies also need to ensure there are plenty of coaching, mentoring, and
training programs available to employees who want to achieve their goals.
Mentoring and coaching more junior employees can boost morale and offer them
a concrete sense of direction, but consider establishing other types of mentor
relationships as well. A new hire may have just as much to teach an experienced
manager as the manager has to teach the new hire. Don’t neglect psychological
safety, either, or employees won’t get much out of the relationship.

4. Make empowerment part of your organization’s culture and vision

Revamping your company culture to focus on empowering employees is no easy
feat; it takes time and dedicated effort. Listening to and recognizing employees
is a great start, but you need to practice them daily to spark company-wide
change. According to Dr. Natalie Baumgartner, Chief Workforce Scientist at
Achievers, “employees who feel ‘heard’ by leaders are 4.6 times more likely to
feel empowered to do their best work,” and leaders must “find ways to recognize
everyday behaviors that align with company culture and goals.” To create a
culture of empowerment, leadership must realize its role to support employees,
not the reverse.
All levels of your company need to feel empowered, including HR, managers,
higher-level leadership, and employees, as every team member should be set up
for success. To ensure no one is left out of your empowerment initiatives, think

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Notes of ways for existing employees to guide new employees through orientation, set
up mentoring circles or idea exchanges, and brainstorm new and exciting ways
for employees to engage with other departments.
Empowering employees produces a culture of continuity that can handle any
changes thrown the organization’s way - even a global pandemic.

2.8.2 EMPLOYEE INVOLVEMENT:

DEFINITIONS:
Involving employees, empowering them, and bringing them into decision making
process provides the opportunity for continuous process improvement. The
untapped ideas, innovations, and creative thoughts of employees can make the
difference between success and failure. Competition is so fierce that it would be
unwise not use every available tool.
BENEFITS:
Employee involvement improves quality and increases productivity, because:
• Employees make better
• Employees make better decisions using their expert knowledge of the
process.
• Employees are more likely to implement and support decisions they had
a part in making.
• Employees are better able to spot and pinpoint areas of for improvement.
• Employees are better able to take immediate corrective actions.
• Employee involvement reduces labor/management friction by encouraging
more effective communication and cooperation.
• Employee involvement increases morale by creating feeling of belonging
to the organization.
• Employees are better able to accept change because they control the work
environment.
• Employees have an increased commitment to unit goals because they are
involved.
• Employees involvement should not be looked at as a fad that will go away
soon.
It is a way of life, crucial to TQM, and it can mean difference between being
competitive and going out of business. Employees not senior management, hold
future in their hands. The sign over the plant entrance that says, “Through these
doors pass our most important asset, our employees” does not ring true when
employees have a feeling that no one really cares. More involvement might be
encouraged by the sign “No one of us knows as much as all of us.”

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As organizational culture begins the process change, resistance to this change will Notes
certainly be present. Keeping people informed will reduce resistance, especially
when they see the benefits. Change is an ongoing process that must occur if an
organization is to continue to exist in competitive world. People do not necessarily
resist change; they resist being changed, and problems arise when a person’s
comfort zone is disturbed.
Empowering employees starts with listening and recognition
Companies need to find ways to empower employees in order to encourage
and excite them. This makes employees feel as though they are meaningfully
contributing to the company’s success and improves their emotional well-being.
Two of the main factors in empowerment are an openness to employee input
and recognizing employees. Achievers Listen and Achievers Recognize can help
jumpstart your company’s efforts towards employee empowerment. Achievers
Listen allows your employees to provide feedback on their terms through frequent,
anonymous pulse surveys and an always-on feedback channel. And it empowers
managers as well by accelerating the feedback loop and providing them with
the insights they need to take real-time action. Achievers Recognize empowers
everyone in your organization to easily send monetary and social recognition to
team members who exemplify your company values.
Both Achievers Listen and Achievers Recognize include detailed reports on KPIs
that can be shared across the organization and provide critical guidance so you
can take the right actions quickly.

2.9. TEAM AND TEAMWORK:

TEAM DEFINITION
A team is a group of people who work together toward a common goal. Teams have
defined membership (which can be either large or small) and a set of activities to
take part in. People on a team collaborate on sets of related tasks that are required
to achieve an objective. Each member is responsible for contributing to the team,
but the group as a whole is responsible for the team’s success.
TEAMWORK DEFINITION
Teamwork involves a set of tasks and activities performed by individuals who
collaborate with each other to achieve a common objective. That objective can
be creating a product, delivering a service, writing a report, or making a decision.
Teamwork differs from individual work in that it involves shared responsibility
for a final outcome.
TYPES OF TEAMS:
FUNCTIONAL TEAMS
Functional teams are permanent and include members of the same department with
different responsibilities. A manager is responsible for everything and everyone

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Notes reports to them. This is the typical top-down management approach that you’ll see
in most organisations. Across all organisational teams, it’s important to prioritise
workplace culture; the foundations of which are communication and trust.

CROSS-FUNCTIONAL TEAMS
Cross-functional teams are made up of individuals from various departments.
These teams tackle specific tasks that require different inputs and expertise. This
can happen when various teams need to work on a project together to get the
best outcome. This can be a difficult dynamic to navigate if teams have been
operating in a ‘silo’ approach up until the point of collaboration. It’s crucial that
the different personalities and perspectives are embraced, and that everyone in
the cross-functional team are working to their strengths.

SELF-MANAGED TEAMS
Generally, individuals in self-managed teams are employees of the same
organisation who work together. Even though they may have a wide array of
objectives, their aim is to reach a common goal. They operate without managers
and are relatively autonomous, sharing responsibility and leadership. High-
performing teams can often fall into this category.
People working in startups or small businesses may also find themselves in this
type of team dynamic. It can be difficult for people who have worked in other
types of teams for most of their career to adjust to this way of working, so there
will likely be an adjustment period of sorts. It’s crucial that self-managed teams
know how to deliver feedback and have tough conversations with tact. Without
high levels of communication, trust, autonomy and mutual respect, self-managed
teams will find it difficult to thrive.

VIRTUAL TEAMS
Virtual teams are made up of individuals who work in different physical locations
and who use technology and collaboration tools to achieve a common goal.
With more employees looking for work from home opportunities, virtual teams
will become much more common in the future of work. You may even have a few
remote team members in your organisation right now who need to collaborate
within a functional or cross-functional team.
It’s important for virtual team members to be involved from a cultural perspective
within your organisation. Having face to face video calls and giving your team
members the opportunity to connect on a personal relationship level will help to
improve rapport and moral. We’ve already shared a bunch of info on creating a
strong remote team culture, so give that a look when you have a moment.

TEAMWORK IMPORTANTS
Teamwork is a crucial aspect of Quality Management, while individuals are very
important, most of the work undertaken in an organization will be undertaken in

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teams, whether they are manufacturing teams, management teams or improvement Notes
teams. Teams are important for several reasons:
Task Complexity: Most tasks in organizations are multi-faceted and complex.The
likelihood that the knowledge and expertise of one individual will be sufficient
to complete the task is limited.
Synergy: Working together, teams can become much more than the sum of the
individuals within them -think about great sports teams; although there may be
outstanding individuals within the team, it is those that work best together who
maximize their potential and win more often than not.
Communication and Understanding: Working together in a team (especially a
cross-functional team) allows for individuals to better understand the issues they
and others face as part of their working lives. Communication will be enhanced
and a broader understanding of processes and their problems generated.
Social Interaction: Humans are social animals, working in isolation is not normal
for us; being in teams helps with the sense of belonging which Maslow (1987)
identified on his Hierarchy of Needs.
Building and Leading Teams
Although working in teams can be seen to be natural’, the work situation can
create stresses which mean that they require care and effort to set up and lead.
They are essentially a microcosm of the organization as a whole and so present
similar issues to leaders: Team leaders need to act as coaches and mentors rather
than controllers and drivers; it is important to have clear vision and goals for the
team to which the team are bought-in; support, challenge and trust are also
important within the team and between the leader and the team; teams need to be
environments where learning occurs and is stimulated .
An effective team must have the following (Adapted from Goetsch and Davis,
2010 and Lencioni 2003):
• A strong team identity and purpose.
• Clear goals, strong commitment and effective accountability.
• Healthy levels of challenge and conflict.
• Trust and integrity.
• Mutual support and participation towards team results.
The principal use of teams in the Quality Management environment is in process
improvement:
1. Quality Circles (sometimes called Quality Control Circles)
2. Quality Improvement Teams (which have been given many different names
in different organizations).

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Notes QUALITY IMPROVEMENT TEAMS:

Quality Improvement Teams

Quality Improvement Teams (QITs) can be formed where there is a specific
problem whose solution is unlikely to reside in a single department and which is
large enough to justify the establishment of a team to resolve the problem. For
example, if test equipment is always breaking down it may require the combined
actions of Production, Testing, Technical Departments as well as the Supplier,
and a team could be formed which would include all these departments. It is most
important to realise that these teams are not the same as Quality Circles; they have
a different purpose and are formed differently and have unique characteristics:
• They are set up by management and, therefore, can be seen to be an
extension of the management process. Members are selected for expertise
that is likely to assist in the resolution of the problem.
• They are inter-departmental in membership.The more strategic issues in
an organization cross several departments and it follows, therefore, that
the solution to problems which have strategic significance are likely to
lie in a number of departments which must be represented in the team
membership.
• Problems for resolution are usually generated outside the group. Expressed
another way, the group is usually formed to resolve a problem identified
by others.
• The team is usually disbanded once the problem is solved; another team
may be formed immediately to resolve a different issue.
The use of QITs as a powerful problem-solving activity has benefits in addition
to the solution of the problem under consideration:
• Break down Inter-Departmental Barriers: Many organisations adopting
Company-wide Process Improvement ind that the obstacle of departmental
rivalry is difficult to break down. Organisational structures and appraisal
systems have tended to produce senior management that is more committed
to departmental rather than corporate goals.The formation of a multi-
disciplinary team from various company departments starts the process of
breaking down traditional departmental barriers. Part of the QIT process
is team building and ownership of the problem, the resolution of which
they seek, regardless of the departments involved in corrective actions.
That is QIT members tend to identify with the team rather than doggedly
retain old departmental allegiance.
• Solutions Are More Global In Concept: Allied to the previous benefit is the
tendency for solutions to be more global in concept rather than being ruled
by more narrow departmental considerations.Thus, solutions are developed
which are optimised for corporate rather than departmental goals.

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• Improved Communications: Also allied to the breaking down of Notes

departmental barriers is the resulting improvement in communications
throughout the organisation, as problems and potential causes are discussed
more openly and solutions are sought for the corporate good rather than
to shit blame.
• Improved Problem Solving Capability: As the success of the QIT activity
becomes more established, so will more teams be formed to overcome
difficult problems that hither to have remained unsolved.This process will
create a degree of mobile expertise in problem solving within the company.
Although QIT members may be selected for their expertise or knowledge
pertaining to the project, they may not have the necessary skills in problem-
solving. If this is the case, adequate training in appropriate skills must be provided
before the QIT starts work. To deny the team the problem-solving tools it needs
to carry out the task is inviting failure, which will affect not only the issue under
consideration but the credibility of the QIT process itself. It is equally important
that QIT members and the person appointing the team understand the problem-
solving method.

2.10. REWARDS AND RECOGNITION:

RECOGNITION

MEANING:
Recognition is a process whereby management shows acknowledgement of an
employee’s outstanding performance. Recognition is a form of employee positive
motivation. Recognition of employees is highly essential as people find themselves
in a accepted and winning role. To sustain employee’s interest and to propel them
towards continuous improvement, it is essential to recognize the people. This
acknowledgement may be of financial, psychological or both in nature.
Ways to recognize people
Send letters to improve team members when they establish a team thanking them
for their involvement.
1. Develop a behind the scenes awards specifically for those whose actions
are not usually in the lime light, make sure such awards are in the lime
light.
2. Create best ideas of the year booklet and include everyone’s picture name
and description of their best ideas.
3. Feature the quality team of the month and put their picture in a prominent
place.
4. Honor peers who have helped you by recognizing them at your staff
meetings.

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Notes 5. Let people attend meetings, committees etc; in your place when you are
not available.
6. Involve teams with external customers and suppliers, sending them on
appropriate visits to solve problems and look for opportunities.
7. Invite a team for coffee or lunch at any time, not necessarily when you
need them for something.
8. Create a visibility wall to display information, posters, and pictures,
thanking individual employees and their teams, and describing their
contributions.
9. When you are discussing an individual or group ideas with other people,
peers, or higher management make sure that you give them credit.
WHY SHOULD ONE RECOGNISE PEOPLE?
1. improve employees morale
2. show the company’s appreciation for better performance
3. create satisfied workplace
4. Create highly motivated workplace.
5. Reinforce behavioral patterns.
6. Stimulate creative efforts.
REWARD
MEANING:
Reward is a tangible one, such as increased salaries, commissions, cash bonus,
gain sharing, etc; to promote desirable behavior.
TYPES OF REWARDS:
1. Intrinsic rewards
2. Extrinsic rewards
Intrinsic rewards are related to feelings of accomplishment of self-worth.
INTRINSIC REWARDS
1. Non-monetary forms of recognition to acknowledge achievement of quality
improvement goals.
2. Celebration to acknowledge achievement of quality improvement goals.
3. Regular expressions of appreciation by managers and leaders to employees
to acknowledge achievement of quality improvement goals.
4. 360 degree performance appraisals feedback from co-workers subordinates
to customers is incorporated into performance appraisals
EXTRINSIC REWARDS:
1. Profit sharing
2. gain sharing

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3. employment security Notes

4. compensation time
5. individual based performance systems
6. quality based performance appraisals
Recognition is a process by which management shows acknowledgement of an
employee’s outstanding performance.
Various ways for Recognition and Rewards are
1. Recognition can be expressed using verbal and written praise.
2. Rewards may be in the form of certificates and plaques.
3. Reward is normally in the form of cinema tickets, dinner for family etc.
4. The financial compensation (for recognition) can be paid in terms of increased
salaries, commissions, gain sharing etc.
5. The efforts of employees can be recognized by promotions, special job
assignments etc.
6. A letter of appreciation from the CEO or the Top Management will increase
the employee’s involvement.
7. Reward may be delayed but recognition should be in a timely basis.
8. Rewards should be appropriate to the improvement level.
9. People like to be recognized than any reward.
10. Special forms of recognition include pictures on the bulletin board, articles
in news letters, letter to families etc.
11. Supervisors can give on-the-spot praise for a job which is done well.

EFFECTS OF RECOGNITION AND REWARD SYSTEM

1. Recognition and reward go together for letting people know that they are
valuable members for the organization.
2. Employee involvement can be achieved by recognition and reward system.
3. Recognition and reward system reveals that the organization considers quality
and productivity as important.
4. It provides the organization an opportunity to thank high achievers.
5. It provides employees a specific goal to achieve.
6. It motivates employees to improve the process.
7. It increases the morale of the workers

2.11PERFORMANCE APPRAISAL
1. Meaning of Performance Appraisal:
Appraisal means evaluation about the worth of an object or person and performance
appraisal means evaluation of employees’ worth in terms of organisational

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Notes performance. Judgment of employees’ performance at work can be done formally

and informally. Informally, superiors continuously judge the performance of
employees on a subjective basis. It may have an element of bias towards employees.
Informal evaluation, however, is not enough to arrive at realistic and correct
assessment of the worth of employees in absolute or relative terms. The ultimate
goal of evaluation programme is to make the employees more valuable to the
company.
A proper evaluation and appraisal system can be valuable to the company. For this,
performance evaluation programme should involve the study of employees (their
habits, aptitude and skills) and their work record (efforts and accomplishments).
In the organisational context, performance appraisal is done in a more formal
way through formal appraisal techniques which are objective in nature. Objective
appraisal aims at systematic and accurate measurement free of bias and prejudice.
Performance appraisal is, thus, more of a formal exercise where managers evaluate
the employees, in terms of their contribution towards organizational objectives.
It evaluates their strengths and weaknesses in terms of attributes and behaviours
to meet the organisational objectives. It appraises the performance of employees
on continuous or intermittent basis and provides them feedback about their
performance.
“Performance appraisal is the process of defining expectations for employee’s
performance; measuring, evaluating and recording employee performance relative
to those expectations; and providing feedback to the employee.”
Evaluating employees is a complex task because they perform a variety of activities
and apply different skills in different work situations. They exhibit different
personal qualities in different work areas. It is, thus, important that organizations
have a sound monitoring system or performance appraisal system to evaluate
their work performance.
Performance appraisal system involves setting performance standards and
comparing actual performance with the standards to know the extent to which
employees have contributed towards corporate profits. “It is a process whereby
managers and their subordinates share understanding about what has to be
accomplished, and the manager will naturally be concerned about how best to
bring about those accomplishments by adept management and development of
people in the short and long terms.”
It also helps in:
(i) Developing inter-personal relationships between manager and his team.
(ii) Motivating employees to achieve their targets.
(iii) Identifying the need for training the workforce.
(iv) Improving use of working tools like demonstration, material, working
documents etc.

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(v) Determining and re-allocating employees’ territories and work assignments. Notes
(vi) Determining sound compensation and incentives plans for the employees.
2. Objectives of Performance Appraisal:
Performance appraisal has the following objectives:
1. Appraisal is a judgment which requires definite standards. Actual performance
is compared with standards and goals. Such standards should be worked out
by organisations and conveyed to all the employees, otherwise, judgment
will be one way only. In a sound appraisal system, goal setting must be high;
and accordingly high performance is expected.
Goal setting must be a mutual process and appraisal system should be
transparent and known to employees. If there is no system of appraisal,
superiors will waste time in making decisions. Also, in absence of specific
knowledge, they will depend upon chance. To avoid this situation, there
should be high goals and high performance appraisal system.
2. To judge means to apply a set of values. Value judgments without clear, sharp
and public standards are irrational and arbitrary. Such judgment or appraisal
will demotivate the manager and subordinates. It should, thus, be based on
sound and objective appraisal standards.
3. Performance appraisal depends on “Merit Rating”. Merit rating refers to
what the employee is. Performance appraisal refers to what the employee
does. Appraisal records what is done by the employee. Merit rating gives
information about “Potential”, “Personality” and “Promise” but appraisal
tells about performance. It, thus, helps in deciding employees worthy of
promotion or transfer to work areas that meet their skills and capabilities.
4. Standards consider what work was assigned, what resources were granted
and what promises were given regarding salary/rewards. They, thus, provide
a measure of evaluation.
5. One can only build in strength. One can only achieve by doing. One cannot
achieve anything with what one does not do. Appraisal must, therefore, aim
at bringing out what a man can do. Only when a man’s strengths are known
and understood, it makes some sense. Weaknesses, by themselves, are of no
interest.
Appraisal should refer to knowing more, doing better and behaving differently.
If these three things are accomplished, the manager will be better, stronger
and effective in managing people.
6. Appraisal should be an integral part of the system of managing. It is an
essential element in the whole system of managing and in the sub-system of
managerial staffing. Knowing how well a manager plans, organises, staffs,
directs, leads and controls is the only way to assure that those occupying
managerial positions are actually managing effectively. If a business is to
reach its goals effectively and efficiently, there should be ways of accurately
measuring and implementing management performance.

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Notes 7. It is human tendency to recall only the latest events or achievements. Similarly
only latest failures are remembered. Appraisals should cover some specific
periods where an employee was involved fully, or even in his absence, how
the deputy was doing, to what extent there was delegation of authority and
responsibility. It should reflect a whole picture so that corrective measures
can be taken.
8. It provides feedback to employees about their performance. Feedback helps
in overcoming deficiencies in the work, promoting performance and relating
his work to organisational objectives.
9. It helps in designing personal improvement plans to overcome the weaknesses
of employees on the job and devising training and development programmes
to strengthen their capabilities.
3. Merit Rating and Performance Appraisal:
Performance appraisal is an extension of merit rating. Merit rating emphasises
on personal attributes of a person regarding what the person is. It determines
qualification and skills of a person on the job to identify his chances for promotion,
demotion or transfer.
It is more of a one-to-one comparison amongst people based on rating scales. Each
employee is rated in comparison to others. Superiors communicate the rating to
employees which helps in determining the wage structure. A higher wage rate is
determined for those who stand high on merit and vice-versa.
Rather than merely rating employees to determine their wage structure,
performance appraisal aims at overall appraisal of performance in terms of what
he does in order to promote his performance on the job and develop him to exploit
his future potential.
While initially, appraisal was in the form of merit rating only (based on personal
attributes), it developed to a much larger area where factors like performance,
behaviour, skills etc. are also taken into consideration. There are mutual goal-
setting processes, comparison and conformance of actual performance to standard
performance targets and promoting desirable behaviour in line with organisational
objectives.
Merit rating, thus, refers to what a person is and performance appraisal refers to
what the employee does with his merit skills. Merit rating identifies the potential
of a person and performance appraisal appraises the extent to which the potential
has been exploited to convert it into performance.

4. Importance of Performance Appraisal:

Evaluating employees is a complex task as they perform a variety of activities.
Different situations demand different types of skills. There is also difference
in degree of personal qualities. Performance evaluation consists of setting
performance standards, both qualitative and quantitative to measure actual
performance and judge the employees in terms of their contribution to objectives.

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The key concept is productivity which means contribution to profits and sales. Notes
Productivity should be greater than the cost incurred by the company on their
work efforts. Managers should “make the events happen” and not “let the events
happen”. Every management activity has to be planned, otherwise it will be left
to chance. Managers cannot rely on chance element.
The following reasons explain the need for making appraisals:
1. To know the quality of managers:
Every organisation sets high goals and objectives for which it needs competent
managers. When an employee is recruited, he appears to be very promising
and enthusiastic. He is called “a potential candidate”. This potential has to be
converted into performance. Just to have potential is theory, but converting it
into performance is practice.
If a candidate is theoretically strong but weak in execution, the organisation may
not get a competent manager. Hence, the foremost advantage of appraisals is that
the organisation gets to know the level of competence of managers. It enables
the managers to know ‘where we are’ and ‘where we would like to go’. If an
executive has proved his potential, the organisation can focus on it and en-cash
his best merit points.
2. To put right man on the right job:
Every position has a job design or description. There should be a man to fit the
position. There must be right man for the right job. This is possible by an appraisal
method. What will happen if the organisation gets a wrong man?
For example, in the design department, there is a wonderful design engineer. He
is expert in making designs, and is well versed with his work. Over a period, he
attains specialisation in his work. He is now senior most in the department. The
organisation is in need of a dynamic person to head the design department.
This design engineer does not have managerial skills. However, he is a competent
engineer. If he is promoted as Head of design department, when he is not
competent, what will be the result? The organisation will miss a good designer
and get a bad manager to head the department. Hence, appraisal helps in getting
right man for the right job.
3. To re-structure the organisation:
Basic advantage of appraisals is to know the innermost merit point of every
employee. With the help of appraisal system, it is possible to rotate executives
in a scientific way. The advantage of job rotation is that the organisation gets a
good General Manager. Every organisation has a chart.
There are slots in the organisation which should be filled by the most competent
person. When this is known, it would be possible to re-structure the organisation.
Organisations today are flexible and dynamic. There is need to re-structure the
organisations and have changing roles for the managers. This is possible only
through competent appraisal systems.

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Notes 4. To give feedback to employees:

Appraisal is a good tool for communication. When managers talk to employees
about their achievements or failures, they take help of appraisals. In appraisals,
there are objective facts and goals which are set jointly. Thus, it becomes easy for
managers to convince employees and give them feedback on inputs and outputs.
In some organisations, appraisals are signed by both boss and subordinates so that
it is easy to give feedback to employees especially on weak areas.
5. To develop employees:
A progressive organisation is concerned about employee development.
Organisations have long-term objectives and plans. To get success, they groom
people to shoulder future responsibilities of the organisation. This is called
development process.
To achieve development, organisations develop Executive Development
Programmes with the help of appraisals. There are different methods by which
employees can be developed. Appraisal system helps to select an appropriate
method. It involves resources (time and money) to develop employees and a sound
appraisal system helps in making best use of resources to develop the employees.
6. To recommend rewards/transfers:
Appraisals are effective when they are tied with the reward system. Compensation
for achievement is the most powerful motivating force. One of the strong
motivating factors is promotion. There can be increments and cash awards. There
can also be transfers on employee’s request or organisation’s requirement. Such
decisions need sufficient data and cases. This is possible through appraisals.
For a good performance appraisal method, it is important to have a judicious
mix of quantitative and qualitative standards against which performance can be
compared. Many companies use quantitative standards. However, the tendency
of using quantity as the only yardstick of performance is no longer prevalent.
The manager selects a combination of qualitative and quantitative standards to
appraise and assess different situations.
5. Approaches to Performance Appraisal:
There are two approaches to measure the performance of employees:
1. Informal Approach
2. Formal Approach
1. Informal approach:
This approach of performance appraisal measures the performance of employees
on a continuous basis. It continuously informs them about how well they are doing.
Managers inform the subordinates of the desirable and undesirable attributes of
their work activities or the subordinates themselves go and ask the managers about
it. This helps in immediate detection and rectification of mistakes.

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2. Formal approach: Notes

Rather than assessing performance on a continuous basis, formal approach conducts
performance appraisal at regular intervals to rank the employees on the basis of
their merit. This helps managers find candidates suitable for promotions. Those
who are not performing up to the mark may be transferred to other departments.
6. Persons Responsible for Performance Appraisal:
There are different approaches to the responsibility of conducting a formal
performance appraisal:
1. Performance appraisal by superiors:
Performance appraisal in most cases is done by immediate superiors.
2. Performance appraisal by a group of superiors:
A Committee is formed consisting of several managers who evaluate the
performance of subordinates. Since evaluation is not done by the immediate boss
but by a group of bosses, the immediate boss is generally not biased against the
employees. This is a time consuming approach of performance appraisal but more
scientific and reliable than the appraisal by immediate superior.
3. Performance appraisal by the peer group:
Though not much in use, some organizations follow the practice of performance
appraisal by the peer group or co-workers. They evaluate the performance of
employees working at the same level. This enables managers find a suitable
candidate for promotion from employees working at the same level, selected by
employees themselves. This approach is accepted by employees as those who are
not selected for promotion do not feel dissatisfied. Rather, they work hard to get
promotions in future.
4. Performance appraisal by subordinates:
Very few organisations follow the approach of subordinates evaluating managers’
performance. Some educational institutions follow this approach where students
evaluate the performance of teachers on the basis of certain pre¬determined
criteria.
7. Methods of Performance Appraisal:
The methods of performance appraisal fall into two major categories:
I. Performance results-oriented methods
II. Employee behaviour-oriented methods
I. Performance results-oriented methods:
These methods measure actual performance of employees and bring it in
conformity with the pre-determined standards.
1. Graphic Scales:
These scales “list a number of rating factors, including general behaviours and
characteristics, on which an employee is rated by the supervisor.” Depending on the

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Notes factors that need to be rated like quality or quantity of work, technical knowledge,
punctuality, integrity, cooperativeness, initiative, creativity, analytical ability,
decisiveness etc., supervisors prepare a graphic scale with different grades and
employees are rated on the basis of their performance on that scale. The appraiser
goes through these set of factors on the rating scale where highest grade (A or 1)
would denote the best rating.
The usual dimensions of a graphic scale are:
Grade A = Outstanding
Grade B = Above average
Grade C = Average
Grade D = Below average
Grade E = Unsatisfactory
The advantage of this scale is that grading of employee on the scale highlights the
need for improvement in his abilities to perform the job. If an employee is placed
at Grade D, his performance is below average and he needs to improve upon it.
The limitation of this method is that every manager does not follow the same
method of rating people at a particular grade. An employee who is assigned Grade
A by one manager may be assigned Grade B or C by another manager. This method
is, thus, sensitive to errors.
Different types of rating errors are:
(i) Halo effect:
This is a presumption by managers that a person doing well in one area will be
doing well in other areas also. This is not always the case. A person good at sales
may not be good in production or vice versa.
(ii) Horns effect:
It is the opposite of halo effect. Managers presume that employees who do not
perform well in one area are poor performers in other areas too. They tend to give
such employees a low grade if they have performed badly on one job while they
may have actually performed better on other jobs.
(iii) Contrast error:
Managers rate the subordinates by comparing their individual performances rather
than measuring their performance against the standards. When two sub-standard
employees are rated on this basis, manager will give Grade A to one and B to
another while both of them may actually fall in Grade E.
(iv) Recency error:
The employees are rated on the basis of their latest or recent performance. The
earlier performance is ignored. An outstanding employee who, for some reason,

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has not been able to do well in the latest assignment, shall be placed in Grade D Notes
or E. This is not a satisfactory method of rating.
(v) Leniency error:
Supervisors give lenient rating to all the employees without measuring their actual
performance. The results are, thus, likely to be biased.
(vi) Severity error:
This is the opposite of leniency error. The supervisor gives low rating to all the
employees, without appraising their actual performance. The results would,
therefore, be again inaccurate.
(vii) Central tendency error:
An average rating or grade is given to everyone, disregarding their actual
performance. The rater marks all the people as average without discriminating as
superiors or inferiors. This may happen because the rater does not have sufficient
knowledge about employees or because he is indifferent towards employees.
(viii) Constant errors:
Some raters have the habit of rating people as high or low. They either rate everyone
high or everyone low. Some rate on the basis of present performance while others
on the basis of potential to perform in future. The results of two raters are, thus,
not comparable.
How to make rating effective:
The graphic scale is a simple and effective method to rank performance against
standards but it is highly sensitive to a wide range of errors. Steps must, therefore,
be taken to make this programme effective. The rater training programmes are
organised to train the raters who hold biased opinion about rating the subordinates.
These programmes develop general consensus among the raters to rate the
subordinates according to a common standard and improve their perceptions
about rating their performance.
2. Behaviourally anchored rating scales:
This method of performance appraisal is an extension of graphic scale method.
These rating scales are used in situations where number of employees are
performing similar work and high degree of precision is required in their job
behaviours. Rather than assessing the performance as above average or below
average, a range of levels of performance, from very high to very low is specified
on the rating scale.
Unsatisfactory performance, for example, can further be labelled as very
unsatisfactory or marginally unsatisfactory. Above average can also be ranked as
slightly above average or much above average.
Five grades in the graphic scale can be developed as:

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Notes

A wide range of performance is specified on the graphic scale and the raters are
much less sensitive to bias by the range of errors that inhibit their rating capacity
on the graphic scale. Though this method is more accurate and scientific than the
graphic scale, it is more time consuming and expensive.
It also needs high precision on the part of raters to rate the subordinates as different
rating levels form part of the same grade. Managers, therefore, often seek assistance
of experts in preparing this scale.
3. Essay evaluation:
This is an unstructured form of performance appraisal where grades are not
assigned to performance parameters. As the employees perform their jobs, the
evaluators or raters keep track of the performance and note their positive and
negative job attributes like quality and quantity of performance, knowledge about
the job skills and organisational policies, employees’ strengths and weaknesses,
their potential to work, need for training etc.
At the end of the period, they analyse all these points and give brief description
of their performance in the form of an essay. This method has the merit of rating
the employees purely on the basis of their actual performance. It reduces personal
bias of the raters. However, different raters have styles and perception about rating
the qualities of a person and this method, thus, may not be totally error free.
II. Employee behaviour-oriented methods:
These methods are also known as comparative methods of evaluation. They
compare performance of employees against each other and rank them accordingly.
1. Straight ranking:
This is the simplest method of ranking where employees are rated as rank 1, 2, 3, 4
or 5. Where an employer has to consider one of his subordinates for promotion to
higher job; he would simply see each person’s performance in the respective area
of operation, say production, and the one having produced the maximum number
of units would be given rank 1 followed by ranks 2 through 5, and accordingly
considered for promotion.

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People are, thus, given ranks on the basis of their traits. This method is effective Notes
when few number of persons have to be ranked as some of the traits for ranking
cannot be quantified. For less number of people, however, personal observations
can also be used for ranking.
Ranking method does not indicate differences in ranks as equal to differences in
ability of people being ranked. This is only a comparative method of ranking where
one is better than the other; how much better is not indicated through rankings.
2. Alternation ranking:
Rather than ranking the employees in ascending order of performance, the raters
first pick up the best and give him rank 1, then the worst and rank him 5, then
they pick up workers to be ranked as 2 and 4 and proceed this way until all the
employees are ranked. This method is similar to straight ranking method with the
difference in the approach towards picking up different ranks.
3. Paired comparison:
In this method of ranking, each person is compared with others in the group on the
basis of specific traits, usually one trait as otherwise huge number of comparisons
have to be made which can make rating a time-consuming process. A list is
prepared containing the names of persons to be ranked in pairs. The rater puts a
tick mark against the person who is better between the two.
The person who is ticked marked as better for maximum number of times is given
the highest rank. The number of comparisons to be made is calculated by using
the formula n(n – l)/2 where n is the total number of persons to be compared.
For instance, paired comparison has to be made amongst 5 people. This requires
10 comparisons [5(5 – 1)/2] to rank who gets the highest rank in terms of being
better than the others.
The comparisons are as follows:

Every person will be compared with 4 others (1 with 2, 3, 4, 5 / 2 with 1, 3, 4,

5 / 3 with 1, 2, 4, 5 / 4 with 1, 2, 3, 5 and 5 with 1, 2, 3, 4) and one who is most
preferred gets the highest rank followed by others. Though everyone is compared
with everyone else in this method, it is difficult to use this method when large
number of people are involved.
4. Forced-distribution method:
When more than one employee are rated as almost the same, it becomes difficult
for the rater to rate them as 1 or 2. As many employees are rated around a similar

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Notes point on the rating scale, one employee is not given one rank; but a group of
employees are placed in one rank.
For example, the manager might place 5% of the employees in rank 1.10% in
rank 2, 20% in rank 3, 30% in rank 4 and remaining 35% in rank 5. In case of
ranking 100 employees, therefore, 5 employees will be placed in rank 1 and 35
in rank 5. This method is suitable where supervisor has to rank a large number of
employees and individual ranking is not possible.
5. Forced choice method:
This method of rating involves appraising the performance of employees by
choosing between two or more statements that describe the characteristics of the
employees. The statements may be positive or negative. They are closely similar to
each other but the rater has to choose the most appropriate statement that describes
the employee. Many sets of such statements (positive and negative) are prepared
to analyse the performance of employees and the final rating is done on the basis
of results of all the statements.
These statements could be as follows:
One Set of Statement:
1. He is an honest employee.
2. He is always fair in his dealings (financial and non-financial) with others.
Second Set
1. He is very hard working.
2. He completes his assignments in scheduled time even if he has to work overtime.
Third Set
1. He has leadership qualities that help him guide his peer group of friends.
2. People come to him for guidance to which he always gives the right advice.
The statements in each set describe characteristics like honesty, hard working and
leadership which are very close in meaning to each other. The rater is forced to
choose the most effective statement that describes the individual. This statement
is most descriptive of the employee. Thus, one statement is chosen from different
sets for final analysis. The final rating is done on the basis of statement chosen
from all sets of statements.
This method avoids subjectivity in rating as the rater chooses the most appropriate
statement out of those which closely describe the positive or negative behaviour
of the employees.
8. Essentials of a Good Appraisal System:
Depending on the need to carry out performance appraisal of employees, i.e.,
whether work performance has to be evaluated or behaviour is to be evaluated
or inter-employee comparisons have to be made, the appropriate method of
performance appraisal should be selected.

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Whatever method is adopted, it should have the following features: Notes

1. It is easily understandable.
2. It is fit for organization’s operations.
3. It takes care of needs of the organisation and its work force.
4. It should adapt to the size of the organization.
5. It defines the responsibility of the manager and the work force.
6. It provides support to management to design the compensation plan.
7. It maintains balance between efforts and rewards.
8. It is result-oriented and focuses on customers and sales.
9. It minimizes procedural formalities in designing the appraisal system and
compensation plan.
10. It must pinpoint that aspect of employee performance (behaviour or results)
for which it is adopted.
11. It must be reliable, that is, free from errors.
9. Issues Involved in Performance Evaluation System:
A good performance evaluation system does not depend upon single criterion
of performance. It involves multiple criteria to judge employees’ efficiency in
achieving targets.
The following issues must be considered while designing the performance
evaluation system:
1. Qualitative and quantitative criteria:
Employees cannot be judged purely on qualitative or quantitative basis. Qualitative
assessment involves personal bias and subjective value judgment. Quantitative
assessment based on statistical data, on the other hand, ignores important
determinants of employee’s effectiveness like personal skills in handling problems,
ability to impress clients etc. Judging the performance on the basis of only
quantitative records does not provide adequate basis of comparison.
Sales made by different sales groups, for example, cannot be compared merely
on the basis of the accounting data. Salesmen’s convincing power, customer
friendliness also have to be taken into account. Managers should, therefore, have
judicious mix of qualitative and quantitative criteria to evaluate their personnel.
2. Comparison amongst employees:
Comparison amongst employees cannot be made on ‘man-to-man’ basis as human
element is involved in such comparisons which differs in different situations.
Different employees work under different environmental conditions and deal with
different products and customers differently.
3. Determining standards of performance:
The standards of performance should be scientific and realistic because the
whole performance evaluation process depends upon standards. If standards are
unrealistic, the purpose of performance evaluation gets defeated.

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Notes 4. Periodicity of evaluation:

The period of evaluation should be neither too long nor too short. Very short-term
evaluation ignores the factors valuable for the firm in the long-run like developing
good customer relations. Very long-term evaluation also does not give satisfactory
results because it ignores operating results of the company.
Though yearly evaluation is a common practice followed by companies, the
period depends upon the type of product sold, practices followed in the industry
and outlook of the management. Capital goods and industrial goods companies
usually follow a period longer than one year.
10. Process of Performance Appraisal:
Performance appraisal process consists of the following steps:
1. Goal setting:
Goals are set for appraising performance which become standards. Standards
should be applicable, adequate and objective. There should be scope for stretching
human abilities. They should be high but reasonable and attainable in a given
situation.
2. Measure performance:
Once standards are set, next job is to measure performance against standards.
Measurement can be annual, periodic or continuous.
3. Find deviations:
Managers observe actual performance of employees, look at the environmental
conditions and find deviations in performance.
4. Corrective action:
Some deviations are desirable and some are undesirable when compared against
goals/ standards. Corrective actions are taken and in some cases, the goals are
modified.
Diagrammatically, the performance appraisal process/control chart can be
shown as follows:

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In the performance evaluation system, manager should not just perform his Notes
role theoretically but really look forward to apply fundamentals to practice i.e.
implementation. In addition to basic managerial functions, he should focus on
other areas of concern like personality, co¬operation, maturity, intelligence,
loyalty, a good trainer etc.
These areas should be used in conjunction with appraisal of plans and goals.
Appraisal system is a continuous and sequential activity performed by managers
to institute a sound reward system for its personnel and also promote market
share for its products.
11. Performance Appraisal for Promotion:
Though performance appraisal is usually related to measuring present performance
of employees, it is not necessarily so. Employees of the organisation are trained
and developed to perform present jobs and assume jobs of higher importance in
future. The appraisal system should measure not only their present performance
but also future performance on higher- order jobs.
Thus, a potential appraisal is carried to know the potential of employee’s success
on future jobs. These are largely promotions which involve better status and
responsibilities on the future jobs. The appraisal carried for this purpose is called
potential appraisal. While performance appraisal is related to the present job,
potential appraisal is related to future jobs. It discovers future talent of a person’s
attributes to perform future jobs.
Promotion can take two forms:
1. Horizontal promotion:
It increases the position of a person with no change in the type of work performed
by him. Promotion of a lecturer to senior lecturer has no added job assignment
to the post. A lower division clerk promoted to an upper division clerk also has,
by and large, same responsibilities to discharge.
2. Vertical promotion:
It increases the position and status of a person along with job assignment and
responsibilities. A worker promoted as foreman or a foreman as superintendent
performs jobs of higher importance.
Promotion is necessary as it provides satisfaction to employees in terms of jobs,
morale and economic status. It increases organisational productivity and provides
people from within the organisation who are familiar with its policies, procedures
and structure.
The organisation, thus, saves time and money in conducting orientation
programmes to acquaint new people to the organisation structure.
Promotion is, beneficial for both organisation and the members:
(a) It allows people to satisfy their growth needs within the organisation. Though
people move from one organisation to the other for higher scales, promotions

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Notes within the organisation reduce the labour turnover rate and thus, costs for
the organisation.
(b) It motivates people to work hard as they know they will step up the
organisational ladder and earn better financial and non-financial rewards.
Promotion is, thus, an incentive to improve one’s work performance. If
organisational policies allow for higher positions to be filled through outside
recruitments only, members within the organisation will have no motivation
to work hard.
Basis for Promotion:
Promotion can be done on two basis — Merit and Seniority:
(a) Promotion on the basis of merit:
It gives promotion on the basis of performance of employees. The best performing
employee is promoted to the higher post. Competence of a person is, thus, the basis
for promotion and ensures efficiency in the organisation as the person promoted
can understand and perform the job of higher order based on his potential. Merit,
thus, promotes people on the basis of their competence and potential to perform
higher-order jobs.
Limitations:
Promotion on merit basis suffers from the following weaknesses:
(i) There is no objective criterion to measure merit. Though performance
measures like test scores, skills and attitudes of a person can be used, they
are not free from errors. They may involve biased judgment in favour of a
person,
(ii) Though a person may be good at his present post, he may not be able to
perform well at higher positions. Present knowledge may not necessarily be
the criterion to judge a person’s future potential.
(b) Promotion on the basis of seniority:
It is a widely recognised basis of promotion where a person is promoted on the
basis of his length of service. It is an objective method of promotion as people
cannot be biased on the basis of non-measurable performance parameters.
Those who have served the organisation longest are considered for promotion
followed by the chain of tenure. Most of the government organisations follow
this basis of promotion though, however, it is a matter of dispute in business
organisations between management and employees’ union.
While deciding seniority as the basis for promotion, the following points must
be taken into consideration:
1. The basis of seniority should be clearly defined.
2. It should follow a defined set of rules to avoid conflicts amongst members.
For example, if an employee goes on leave with pay and another employee

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goes on leave without pay, whether both the leave periods are counted for Notes
considering seniority or not should be clearly defined.
3. Seniority list should be maintained in the office and employees should have
access to it. Transparency avoids conflicts amongst members while deciding
about promotions.
4. Responsibilities at each level of seniority should be clearly laid down.
Some senior positions have frequent touring or overtime without additional
allowance, loss of vacation etc. People moving to higher positions should
know the privileges or otherwise of the positions they are moving to. It is
heard that some people do not move to managerial positions in banks as this
position has transferable posts. People thus, refuse seniority and maintain
their status quo for family or other considerations.
Merits:
This system of promotion has the following merits:
(i) It is an objective basis of judgment as promotion depends upon the length
of service which can be measured.
(ii) Since biased judgment is not involved, it does not affect employees’ morale
and organisation’s productivity.
(iii) It reduces the labour turnover rate as employees are promoted on the basis
of years of service in the organisation. People prefer to work in the same
organisation rather than moving to other organisation. Long serving years
also promote loyalty amongst employees and organisations save money on
conducting orientation and training programmes for new employees.
Limitations:
Promotion on seniority suffers from the following limitations:
(i) After a specific point, length of service is not the criterion for promotions.
Continued service does not bring much gain to employees and, therefore,
they look for other jobs.
(ii) It promotes lethargy as employees are assured of promotion after a specific
period of time.
Merit Versus Seniority:
Both merit and seniority have benefits and limitations. Neither of the two should be
the sole criterion for promotion. Organisations maintain balance between seniority
and merit and generally follow the practice of promoting people at lower levels
on the basis of seniority and at higher levels on the basis of merit.
This assures people at lower levels of time-bound promotions and provides them
the satisfaction of assured promotion. At higher levels, however, only those who are
worthy of assuming positions of higher importance are considered for promotion.
Length of service or merit should not be the sole factor affecting promotion. From

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Notes the most able, the senior most should be selected and minimum specific length of
service should be considered before recommending a case for promotion.
A combined ladder based on both merit and seniority at different levels can
be analysed as follows:
1. Consider promotion on the basis of length of service (seniority).
2. After a particular level, ignore promotions for those who do not prove on
the merit standards (merit).
3. Amongst those selected, consider those who have served for the longest time
period (seniority).
4. Consider further promotion only on the basis of merit (merit).
12. Barriers to Performance Appraisal:
The following barriers may arise in making appraisals:
1. Despite best efforts to be objective in making appraisals, appraisers’ may
become subjective in their judgment.
2. Appraisals based on the assumption that appraisal system is perfect
cannot give accurate results. Targets and techniques of appraisal cannot be
standardized forever.
3. Holding personal opinion about appraises can make appraisals a mere
formality. Appraisers do not spend sufficient time in designing the appraisal
system and completing the appraisal forms. This lacks a systematic review
of performance, both present and potential.
4. Appraisal is like a check on employees’ performance. Therefore, they may
be resistant to appraisals. They often tend to provide faulty or disguised
information about their performance. This makes appraisal ineffective in
nature.
5. Sometimes, appraisals are affected by psychological blocks to appraisals.
They may:
(a) Take appraisals as an added burden on them
(b) Dislike to find faults with appraises’ performance
(c) Dislike that employees’ promotions are withheld or deferred because of their
rating.
(d) Be afraid of becoming unpopular amongst employees, etc.
These fears are a hindrance to effective appraisals resulting in subjective
appraisals.
Appraisers tend to give high ratings to those whom they want to favour
irrespective of their performance. This defeats the very purpose of appraisals.
6. Appraisals are done by comparing actual performance with standard
performance as stated in the appraisal form. If these forms are not properly

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designed, the desired information cannot be extracted from the appraises. Notes
Performance criteria may be non-measurable (honesty, politeness etc.) or
ambiguous (contribution to output or number of hours worked). When
performance traits are not exactly measurable, they can be interpreted
differently by different people. This fails to give effective ratings to
employees’ performance.
7. Despite the best efforts in making performance appraisal error free, errors
may occur, consciously or otherwise.

2.12 CONTINUOUS PROCESS IMPROVEMENT:

DEFINITION:
Continuous process improvement is defined as, “The ongoing improvement
of products, services or processes through incremental and breakthrough
improvements.”
It doesn’t only mean that a business should make changes along the way when
things aren’t working smoothly. Instead, continuous process improvement is an
actual type of work style that is designed to continuously review results and rapidly
adopt new measures when deemed necessary. The keyword here is continuous
because ultimately broad-scale change and progress stem from small steps along
the way that are all geared towards optimisation.
For some, it may be easy to conflate continuous process improvement as equivalent
to other lean methodologies, including Kaizen and Six Sigma, for example. While
these frameworks help to improve processes along the way, they can live inside
the practice of continuous process improvement, but they are not the same.
Two main philosophies exist for continuous process improvement - formalised and
adaptive. Formalised continuous process improvement is typically in line with Six
Sigma, in which you have a set of techniques that are enacted for a quantifiable
financial return. Adaptive continuous process improvement may pull from lean
methodologies and approach improving processes on a case-by-case basis.
Continuous Process Improvement Model
As one of the most popular tools for continuous process improvement, many rely
on the plan-do-check-act (PDCA) cycle. This stands for:
Plan:
Identify an opportunity for change.
Do:
Implement the change on a small scale to test.
Check:
Review results by analysing data to determine if the change was successful.
One of the easiest ways to approach this step is by leveraging a data automation

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Notes software solution that can showcase real-time data and analytics as processes run
their cycles.
Act:
If the change proves successful based on the data, then it’s time to implement
it on a broader scale. If it wasn’t as effective as hoped for, later only, try again!
Continual or Continuous Improvement
It’s common for the word continuous and continuous to be used interchangeably.
However, they do have a slight variation in meaning, as defined here:
• Continual: Of frequent recurrence, with breaks in between.
• Continuous: Without interruption, or in an entire-time or space.
Why It’s Important & Providing Value
The main goal of continuous process improvement is to provide higher value
overall for a business. While it’s always desirable to achieve efficiency, that could
come at the cost of decreased quality, if the change is implemented without a close
eye or too quickly. One of the main benefits of continuous process improvement
is that it happens incrementally.
For any organisation, there will be a need to improve processes across departments.
But, there are always going to be constraints, whether it be in the form of time,
money or resources. That’s why many companies approach continuous process
improvement across events and use Value Stream Mapping to do so.
Value Stream Mapping helps to identify what is happening, what changes can
feasibly occur and how you’ll be able to measure outcomes. When businesses break
up their inner workings by events, it’s noticeable how interconnected processes
are within the overarching system. This way, when one process is altered, it often
necessitates change for the next and so on.
Creating a Culture for Continuous Process Improvement in Practice
Continuous improvement doesn’t come from one person per se. Yet, it does call for
executives and managers to support a culture of continuous process improvement
and empower employees to take the initiative.
In this way, those “on the ground” can point out where improvements can be made
and feel supported to make suggestions.
To engrain these sentiments within the company culture, management can direct
the team to:
Ask the Right Questions
• Questions that need to be asked relate to workflows and processes. Some
right items include:
• How many people are involved in the process?

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• What will teams be affected by changing any step along the process? Notes
• Is the potential benefit of the change worth impacting the overall process
workflow?
• How much time and money is spent on the workflow?
2. Ways to Approach Change
• Flowchart or Kanban board: Use a visual display to break down
processes and outline who is responsible for each step. In this way, the
whole team can better understand where the responsibility lies.
• Analysis: Use a data automation tool to quantify resources and results.
With an automation tool, you can run various types of reports to gauge
efficiency and find gaps that can be improved.
• Recommendations: The team is part of strategising solutions, as well as
implementing the changes. Actionable steps here may include training
sessions and the use of automation to increase the efficiency of a process.
Automation tools can help to alleviate bottlenecks and remove critical
person dependencies as the software system can carry out a procedure with
little to no human intervention. It also removes low-value manual tasks, so
the team can instead focus on high-value tasks such as trying new things
for continuous improvement.
CPI Techniques & Applying Them
Continuous process improvement can be applied to various techniques. Here’s a
look at some of the most common methods to consider:
Business Process Mapping: A business process map, or flowchart, is used to
represent how and why your processes exist visually. When you outline a business
process by using a diagram or business process mapping solution within an
automation tool, you can quickly pinpoint the steps that are not working as well
as they could be. Then, you can apply continuous process improvement to make
necessary changes.
PDCA: As outlined above, the PDCA cycle stands for Plan, Do, Check, Act. It was
first created for quality control, but it’s become one of the most popular methods
for continuous process improvement.
DMAIC: DMAIC stands for Define, Measure, Analyse, Improve and Control. It
happens as follows:
• Define: Define the problem or activity that needs improvement. This may
require feedback from customers or using a value stream map.
• Measure: Review how big of an issue or impact the problem may be
creating.
• Analyse: Use root cause analysis or measurement of data to determine
how and why problems are occurring.

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Notes • Improve: Address and eliminate root causes by isolating the many factors
involved in an event to find what’s causing the problem.
• Control: Implement an improved process and measure performance over
time.
Root Cause Analysis: Gather a small team to conduct root cause analysis, or to
identify where problems are occurring within a process. This requires creating
the right side, performing analysis, and assigning roles to each team member to
make sure that analysis moves forward. Once the solution has been designed, it
will take time to implement the new process.
Principles of Continuous Process Improvement
No matter what methodology you choose to implement to practice continuous
process improvement, the overall principles remain unchanged.
• These values exist at the core of CPI:
• Small changes: Improvements happen with small, incremental changes.
With minor changes that occur continuously, there’s no need for significant
paradigm shifts.
• Employees matter: Employees are critical to continuous process
improvement. Employees should feel empowered to identify opportunities
for development. This involves engaging with your staff and allowing their
voices to not only be heard but also to create change through actionable
steps.
• Incremental = inexpensive: This principle also stems from an engaged
employee base. Most employees work within processes every day, and
that’s why it’s easier for them to see where inefficiencies lie. More often
than not, they may find ways to eliminate steps instead of adding more to
increase efficiency. Small incremental changes are naturally less expensive.
• Employee ownership: When your staff is involved in coming up with
changes, they are more likely to see the value of differences and be open
to rolling them out. This consists of the idea of ownership and leads
to sustainable improvement. Automation tools can also play a role in
sustaining change as processes that are automated become standardised
and ingrained within the organisation.
• Improvement is reflective: Everyone within an organisation is busy with
the many tasks on their plates. By implementing solutions that involve
increased collaboration or visibility, it’s easier for team members to see
how their actions impact positive results. Organisations that use continuous
improvement software/data automation solutions can allow all stakeholders
to stay abreast of changes and positive impacts in real-time with dashboards
and reports.

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• Measurable and repeatable: Small improvements need to be measured Notes

to see if they are doing what they intend to do. With the help of technology
solutions like automation, you can use tools to see how success is happening
with continuous process improvement. This could involve making a change
to how accounts receivables are collected by adding an automated solution.
Then, you can track average days until payment to see if the new process
flow is producing faster results, for example.

The Wrap Up
If you look at organisations like a car, then the engine can be considered its
processes. How you position the engine within the hood of the vehicle will
impact its performance. Continuous process improvement is the framework in
which all your organisation’s processes and people reside. It involves creating
an environment in which employees feel engaged, empowered and enthusiastic
about suggesting ideas that will make the car perform better.
These changes are not a one and done deal, but rather, they rely on the consistent
oversight of an organisation’s processes. With small, incremental and measurable
improvements, the overall business will lean towards outcomes that can provide
the most significant possible value to all stakeholders.

2.13 JURAN’S TRIOLOGY:

The Juran Trilogy, also called Quality Trilogy, was presented by Dr. Joseph M.
Juran in 1986 as a means to manage for quality. The traditional approach to quality
at that time was based on quality control, but today, the Trilogy has become the
basis for most quality management best practices around the world.
In essence, the Juran Trilogy is a universal way of thinking about quality—it fits
all functions, all levels, and all product and service lines. The underlying concept
is that managing for quality consists of three universal processes:
• Quality Planning (Quality by Design)
• Quality Control (Process Control & Regulatory)
• Quality Improvement (Lean Six Sigma)
Quality Planning (Quality by Design)
The design process enables innovation to happen by designing products (goods,
services, or information) together with the processes—including controls—to
produce the final outputs. Today many call this Quality By Design or Design for
Six Sigma (DFSS)
The Juran Quality by Design model is a structured method used to create innovative
design features that respond to customers’ needs and the process features to be
used to make those new designs. Quality by Design refers to the product or service
development processes in organizations.

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Notes Quality Improvement (Lean Six Sigma)

Improvement happens every day, in every organization—even among the poor
performers. That is how businesses survive—in the short term. Improvement is
an activity in which every organization carries out tasks to make incremental
improvements, day after day. Daily improvement is different from breakthrough
improvement. Breakthrough requires special methods and leadership support to
attain significant changes and results.
It also differs from planning and control as it requires taking a “step back” to
discover what may be preventing the current level of performance from meeting
the needs of its customers. By focusing on attaining breakthrough improvement,
leaders can create a system to increase the rate of improvement. By attaining just
a few vital breakthroughs year after year (The Pareto Principle), the organization
can outperform its competitors and meet stakeholder needs.
As used here, “breakthrough” means “the organized creation of beneficial change
and the attainment of unprecedented levels of performance.” Synonyms are
“quality improvement” or “Six Sigma improvement.” Unprecedented change may
require attaining a Six Sigma level (3.4 ppm) or 10-fold levels of improvement
over current levels of process performance. Breakthrough results in significant
cost reduction, customer satisfaction enhancement and superior results that will
satisfy stakeholders.
Quality Control (Process Control & Regulatory)
Compliance or quality control is the third universal process in the Juran Trilogy.
The term “control of quality” emerged early in the twentieth century. The concept
was to broaden the approach to achieving quality, from the then-prevailing after-
the-fact inspection (detection control) to what we now call “prevention (proactive
control).” For a few decades, the word “control” had a broad meaning, which
included the concept of quality planning. Then came events that narrowed the
meaning of “quality control.” The “statistical quality control” movement gave
the impression that quality control consisted of using statistical methods. The
“reliability” movement claimed that quality control applied only to quality at the
time of test but not during service life.
Today, the term “quality control” often means quality control and compliance.
The goal is to comply with international standards or regulatory authorities such
as ISO 9000.
QUALITY IMPROVEMENT:
Quality improvement is a structured approach to evaluating the performance of
systems and processes, then determining needed improvements in both functional
and operational areas. Successful efforts rely on the routine collection and analysis
of data. A quality improvement plan describes an ongoing, or continuous, process
through which an organization’s stakeholders can monitor and evaluate initiatives
and results.

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Based on the thinking of such experts as W. Edward Demings, QI principles were Notes
developed in manufacturing in the 1940s. In the last two decades, QI processes
have also become popular in healthcare and education.
Although organizations take many approaches, QI at its foundation concerns
process management. If organizations operate according to many processes, by
reviewing and improving one process at a time and leveraging the Pareto principle,
they can more easily and gradually improve their entire system.
Quality improvement processes share these characteristics:
• Quality improvement is data driven and regards the quantitative approach
as the only reliable means to influence the qualitative elements. This
principle is expressed in the following saying of quality improvement
guru W. Edwards Deming: “The right data in the right format in the right
hands at the right time.”
• QI focuses on processes, not people. In other words, the individual is never
at fault.
• QI involves people as part of the improvement solution and looks for what
is attributed to Deming as “the smart cogs,” the employees who are directly
involved in and best understand the processes in an organization

What Is the Main Purpose of Quality Improvement?

Quality improvement aims to create efficiencies and address the needs of
customers. In healthcare, the main purpose of quality improvement is to improve
outcomes. In healthcare settings, quality improvement may be associated with
continuous quality improvement, the method used to identify problems and
implement, monitor, and provide corrective action.
The Benefits of a Quality Improvement Process
A quality improvement process can offer organizations the following benefits:
• Solutions that focus on failures in processes, not flaws in people
• A reliance on objective, data-driven solutions, rather than subjective
opinions, to identify inefficiencies, preventable errors, and inadequate
processes
• Improvements that provide better customer service, increased efficiency,
greater safety, and higher revenues
• A localized focus on testing small, incremental improvements that is less
risky than a focus on making changes at one time
• Data collection to monitor improvement efforts, which can provide the basis
for reimbursement and certification programs, particularly in healthcare
organizations

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Notes Primary Issues in Quality Improvement

Quality improvement plans are frequently measured in terms of results, employee
and stakeholder satisfaction, ease of change, and cost. Quality improvement plans
must also help companies understand how to meet the needs of diverse stakeholders
(employees, customers, regulators, and others), find a method for prioritizing the
improvement requirements of these stakeholders, comprehend the threshold of
variation that will permit required change, and know how employees can succeed
in a program if leadership support is inadequate.
Difficulties in Pursuing a Quality Improvement Process Plan
Here are some of the common difficulties in following through with a QI plan:
• Expectations are not clear.
• Leadership is not adequately engaged, making bottom-up initiatives
difficult.
• There is insufficient time and resources to properly implement the initiative.
• In healthcare settings, some physicians don’t implement new systems until
they have confidence in new processes.
• There is an inadequate emphasis on the importance and use of new
measures.
• There is a poor level of collaboration between teams.
• People underestimate the time required to implement a program.
• The extent to which a result depends on a change can’t be measured because
the extent of the original problem has not been measured.
• Specific improvement cycles can’t be evaluated.
• Costs can’t be evaluated.
• Changes result from the Hawthorne effect rather than the QI program. In
this interpretation of the Hawthorne effect, stakeholder behavior changes
because their activities and results are monitored.
• A small sample size makes generalizations impossible.
• Solving some problems creates additional problems.
• Targets are overly ambitious and therefore difficult to achieve.
• There are too many diverse stakeholder conditions.

2.14. SUPPLIER PARTNERSHIP

DEFINITION:
Partnering is a defined as a continuing relationship, between a buying firm
and supplying firm, involving a commitment over an extended time period, an

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exchange of information, and acknowledgement of the risks and rewards of the Notes
relationship.
SUPPLIER PARTNERING & SOURCING:
What is Supplier Partnering?
Partnering is a defined as a continuing relationship, between a buying firm
and supplying firm, involving a commitment over an extended time period, an
exchange of information, and acknowledgement of the risks and rewards of the
relationship. The relationship between customer and supplier should be based
upon trust, dedication to common goals and objectives, and an understanding of
each party’s expectations and values.
Benefits of Partnering
The benefits of partnering include:
(i) Improved quality;
(ii) reduced cost;
(iii) Increased productivity;
(iv) Increased efficiency;
(v) Increased market share;
(vi) Increased opportunity for innovation; and
(vii) Continuous improvement of products / services
Key Elements to Partnering
The three important elements to achieve the customer / supplier partnering
relationship are :
1. Long-term commitment: Long-term commitment provides both customer and
supplier the much needed environment to achieve the planned objectives. Because
to set up and solve the problem of continuous improvement, both parties may
require the sufficient time.
2. Trust : Mutual trust between two parties forms the basis for a strong working
relationship. Trust enables the partners to effectively combine their resources and
knowledge. It results in a ‘win-win’ situation for both partners.
3. Shared vision : Both the customers and suppliers have the common goal i.e.,
to satisfy the end user. In order to ensure this goal, both particles should share
and understand their goals and objectives.
Three types of supplier sourcing are:
 Sole sourcing;
 Multiple sourcing, and
 Single sourcing.
1. Sole Sourcing
Sole sourcing is the use of only one supplier for the organization. The organization
does not have any choice. It is forced to use only one supplier.This forced situation

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Notes is because of the following factors : patents, technical specifications, raw material
location, only one organization producing the item, etc.
2. Multiple Sourcing
Multiple sourcing is the use of two or more suppliers for an item.The basic concept
of multiple sourcing is that competition will result in better quality, lower costs,
and better service. (The selection of suppliers from various alternatives is based
on their performance in terms of prices, quality and delivery.
3. Single Sourcing
Single sourcing is the use of one supplier for an item when several sources are
available. It leads to long-term partnering relationship. The suppliers should
be treated as partners to achieve the same quality level as attained within the
organization.
The following forces need Supplier Partnership to improve quality, reduce costs
and increase market share.
Ø Deming Philosophy (Deming’s 4th point)
Ø Just-in-time
Ø Continuous process improvement
Ø ISO 9000
PRINCIPLES OF CUSTOMER – SUPPLIER RELATIONS
Dr. Kaoru Ishikawa has given ten principles of customer-supplier relations. They are
1. Both the customer and supplier are fully responsible for the control of quality.
2. Both the customer and supplier should be independent of each other.
3. The customer is responsible for providing the supplier with clear and sufficient
requirements so that the customer can know precisely what to produce.
4. Both the customer and supplier should enter into a non-adversarial contract.
5. The supplier is responsible for providing the quality that will satisfy the
customer.
6. Both the customer and supplier should decide the method to evaluate the
quality of the product or services.
7. Both the customer and supplier should establish in the contract the method
by which they can reach an amicable settlement in case of any dispute.
8. Both the customers and supplier should continually exchange information.
9. Both the customer and supplier should perform business activities.
10. Both the customer and supplier should have the best interest of the end user
in mind.
SUPPLIER CERTIFICATION AND SUPPLIER RATING:
SUPPLIER RATING
Supplier Rating is done
Ø To obtain an overall rating of supplier performance.

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Ø To communicate with suppliers regarding their performance. Notes

Ø To provide each supplier with a detailed and true record of problems for
corrective action.
Ø To enhance the relationship between the buyer and the supplier.
RELATIONSHIP DEVELOPMENT
For establishment of supplier relationship, the following are necessary.
1. Partnering
2. Supplier selection
3. Principles of customer / supplier relations
4. Certification
5. Periodic rating
For relationship development, the following are necessary.
(a) Inspection
a. 100% inspection
b. Sampling
c. Audit
d. Identity check.
(b) Training
(c) Teams
(d) Recognition and Reward
SUPPLIER CERTIFICATION
A certified supplier is one which, after extensive investigation, is found to supply
material of such quality that is not necessary to perform routine testing.
The Eight criteria for supplier certification are
1. No product related lot rejections for at least 1 year.
2. No non-product related rejections for atleast 6 months.
3. No production related negative incidents for atleast 6 months.
4. Should have passed a recent on-site quality system evaluation.
5. Having a fully agreed specifications.
6. Fully documented process and quality system.
7. Timely copies of inspection and test data.
8. Process that is stable and in control

SUPPLIER SELECTION
The suppliers should be selected with the following ten conditions
1. The supplier should understand clearly the management philosophy of the
organization.
2. The supplier should have stable management system.
3. The supplier should maintain high technical standards.

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Notes 4. The supplier should provide the raw materials and parts which meet quality
specifications required by the purchaser.
5. The supplier should have the required capability in terms of production.
6. The supplier should not leak out the corporate secrets.
7. The supplier should quote right price and should meet the delivery schedule.
The supplier should be accessible with respect to transportation and
communication.
8. The supplier should be sincere in implementing the contract provisions.
9. The supplier should have an effective quality system such as ISO / QS 9000.
10. The supplier should be renowned for customer satisfaction.
RELATIONSHIP DEVELOPMENT:
Supplier relationship management is a part of vendor management where
organizations segment their suppliers and determine important supply categories
to devise a strategy that manages all their suppliers and supplies efficiently.
Supplier relationship management comprises of three important steps: supplier
segmentation, supplier strategy development, and supplier strategy execution.
1. Supplier segmentation: Differentiate suppliers to identify opportunities and
risks.
2. Supplier strategy development: Devise an optimal way to interact with
suppliers based on business needs.
3. Supplier strategy execution: Execute the designed strategy in an effective
way to obtain desired results.
Supplier relationship management strategies
Although most businesses have a process in place to manage their supplier
relationships, most often there is still room for improvement. Here are three steps
to develop and establish a solid supplier relationship management strategy:
1. Value mapping
Most organizations still focus primarily on cost-cutting initiatives when it comes to
SRM. Through value mapping, businesses can think beyond cost-cutting initiatives
and focus on value drivers such as revenue growth, asset utilization, and risk
reduction. Value mapping enables organizations to identify where intervention
is necessary or beneficial.
Establishing a minimum amount of mutual trust, understanding, and respect
with suppliers through open communication is a minimum requirement to derive
tangible business values. A structured and strong supplier relationship management
strategy will extract the best value for everyone.
2. Top-down approach
Often, the responsibility of supplier relationship management falls on the shoulders
of procurement teams alone. Supplier relationship management strategy is all about
craftsmanship; it can never be achieved without onboarding internal stakeholders.
Just one rogue individual can collapse the whole process.

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Implementation starts at the top and moves down through the ranks of managers Notes
and staff. This top-down approach ensures that every stakeholder has a clear
understanding of potential benefits that can be derived. An effective SRM strategy
aligns seamlessly with process, people, paperwork, and the overall business
strategy.
3. Spend optimization
Strategic sourcing has reached a saturation point where the returns are diminishing
steadily for specific categories. Nearly, all ‘low-hanging fruits’ have been picked
and so extracting value through consolidation and bidding is becoming challenging.
Supplier relationship management practices like collaborative supply chain
analysis, process re-engineering, joint demand management, reduced inventory,
and total cost modeling delivers cost savings and optimizes organizational spend.
4. Risk mitigation
Organizations of all sizes experience supply chain disruption of some magnitude
due to product or service quality issues, dependency, price volatility, and more.
However, businesses that have an adequate SRM program in place can better
predict and manage those disruptions.
The types of supply risks that an organization faces depends on the corporate and
procurement frameworks used. Supplier risk segmentation can help organizations
identify risk and mitigate them effectively. Strategic tools like Kraljic Matrix and
Deloitte Priority Model can be used to segment supplier based on risks they pose
and profitability they offer.
5. Positive ROI
Most procurement teams face difficulties in securing the commitment and funding
for their SRM strategy. The major reason is that they have trouble in building a
business case that establishes the financial benefits of SRM.
Procurement teams can start calculating benefits by estimating the impact of risk
mitigation, value leakage due to non-compliant contracts, and narrating compelling
customer stories through case studies. By involving the finance team from day
one, procurement teams can capture the impact SRM makes on the organization’s
balance sheet.

2.15. KAIZEN
“Kaizen” refers to a Japanese word which means “improvement” or “change
for the better”. Kaizen is defined as a continuous effort by each and every
employee (from the CEO to field staff) to ensure improvement of all processes
and systems of a particular organization. Work for a Japanese company and
you would soon realize how much importance they give to the process of Kaizen.
The process of Kaizen helps Japanese companies to outshine all other competitors
by adhering to certain set policies and rules to eliminate defects and ensure long
term superior quality and eventually customer satisfaction.

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Notes Kaizen works on the following basic principle.

“Change is for good”.
Kaizen means “continuous improvement of processes and functions of an
organization through change”. In a layman’s language, Kaizen brings continuous
small improvements in the overall processes and eventually aims towards
organization’s success. Japanese feel that many small continuous changes in the
systems and policies bring effective results than few major changes.
Kaizen process aims at continuous improvement of processes not only in
manufacturing sector but all other departments as well. Implementing Kaizen
tools is not the responsibility of a single individual but involves every member
who is directly associated with the organization. Every individual, irrespective of
his/her designation or level in the hierarchy needs to contribute by incorporating
small improvements and changes in the system.

Following are the main elements of Six Sigma:

 Teamwork
 Personal Discipline
 Improved Morale
 Quality Circles
 Suggestions for Improvement
Five S of Kaizen
“Five S” of Kaizen is a systematic approach which leads to foolproof systems,
standard policies, rules and regulations to give rise to a healthy work culture at
the organization. You would hardly find an individual representing a Japanese
company unhappy or dissatisfied. Japanese employees never speak ill about their
organization. Yes, the process of Kaizen plays an important role in employee
satisfaction and customer satisfaction through small continuous changes and
eliminating defects. Kaizen tools give rise to a well organized workplace which
results in better productivity and yield better results. It also leads to employees
who strongly feel attached towards the organization.
Let us understand the five S in Detail:
1. SEIRI - SEIRI stands for Sort Out. According to Seiri, employees should
sort out and organize things well. Label the items as “Necessary”, ”Critical”,
”Most Important”, “Not needed now”, “Useless and so on. Throw what all
is useless. Keep aside what all is not needed at the moment. Items which
are critical and most important should be kept at a safe place.

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2. SEITION - Seition means to Organize. Research says that employees waste Notes
half of their precious time searching for items and important documents.
Every item should have its own space and must be kept at its place only.
3. SEISO - The word “SEISO” means shine the workplace. The workplace
ought to be kept clean. De-clutter your workstation. Necessary documents
should be kept in proper folders and files. Use cabinets and drawers to
store your items.
4. SEIKETSU-SEIKETSU refers to Standardization. Every organization
needs to have certain standard rules and set policies to ensure superior
quality.
5. SHITSUKE or Self Discipline - Employees need to respect organization’s
policies and adhere to rules and regulations. Self discipline is essential. Do
not attend office in casuals. Follow work procedures and do not forget to
carry your identity cards to work. It gives you a sense of pride and respect
for the organization.

2.16 PDCA CYCLE

The Plan-Do-Check-Act (PDCA) Cycle is a four-step problem-solving iterative
technique used to improve business processes. Originally developed by American
physicist Walter A. Shewhart during the 1920s, the cycle draws its inspiration
from the continuous evaluation of management practices and management’s
willingness to adopt and disregard unsupported ideas.
The PDCA Cycle can help differentiate a company from its competition, especially
in today’s corporate world, where anything that can help them streamline their
processes to reduce costs, increase profits, and improve customer satisfaction can
offer an advantage.
Many managers, potentially unknowingly, use the PDCA Cycle to help direct
their organizations, as it encompasses the very basic tenets of strategic planning.
The four components of the PDCA check are outlined below.
PLAN
A well-defined project plan provides the framework from which to operate.
Importantly, it should reflect the organization’s mission and values. It should also
map the project’s goals and clearly indicate the best way to meet them.
DO
This the step where the plan is set in motion. The plan was made for a reason,
so it is important for players to execute it as outlined. This stage can be broken
down into three sub-segments, including training of all personnel involved in the
project, the actual process of doing the work, and recording insights, or data, for
future evaluation.

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Notes CHECK
Typically, there should be two checks throughout the project. First, checks should
be done alongside implementation to make sure that the project’s objectives are
being met. Second, a more comprehensive review of the project should be done
upon completion to allow for successes and failures to be addressed, and for future
adjustments to be made.
ACTION
Corrective actions are made in the final step. Once past mistakes have been
identified and accounted for, the PDCA Cycle can be redefined and repeated anew
in the future, perhaps to better results under new guidelines.

IV SUMMARY
The principles and philosophies behind the evolution of various quality
management techniques are elaborated in this unit. Walter A. Shewhart focused
his work on ensuring control in industrial quality process. He laid the foundation
for evolutionary thinking on quality and its management. William Edwards
Deming, a contemporary to Shewhart has developed PDSA cycle and named
it as Shewhart cycle. Later, it was changed as PDCA cycle. Deming has made
an attempt to balance the standardized changes and continuous improvement of
things in the organization.
Joseph Juran’s contribution is Quality Trilogy. While emphasizing quality
planning during design of a product, he laid more stress on quality control
during operations. The famous Cost of quality curve to identify the optimum
conformance level was developed by Juran . The road –map for quality planning
and the steps to continuous quality improvement are amongst the contributions
of Juran. Philip B.Crosby has identified five absolutes of quality management and
he has prescribed a quality vaccine. To achieve zero defects in organization he
has spelt out fourteen Step Quality Programme and firmly believes that the zero
defect is an achievable goal. Masaaki Imai introduced Kaizen to the world. He
has established “Kaizen Institute” which is propagating his ideas throughout the
world. Mitchell Jay Feigenbaum pioneered studies in Chaos theory. Through his

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publications, he was able to disseminate the logistic maps developed by him. Kaoru Notes
Ishikawa suggested the diagram to identify the root cause of a problem. The fish
bone diagram also known as cause and effect diagram is predominantly used in
fixing quality related problems. The construction methodology is also presented.
Dr.Genich Taguchi has popularized the concept design of experiments. He has
also developed a complete philosophy of off-line quality control and innovations
in the design on experiments are deliberated in detail. Shingeo introduced “Zero
Defects Model” to the production community. Poke-Yoke is advocated by him.
The concepts of quality circle was introduced by Deming. The requirements for
successful quality circles and its evolution are presented. Japanese 5S principles,
namely Seiri, Seiton, Seiso, Seiketsu, Shitsuke and the 8 disciplines to be focused
in the new era are deliberated.

V KEY WORDS
5S, Rewards, Recognition, Continuous Process Improvement, Kaizen, PDCA

VI CASE STUDY
Case Study: Implementing TQM for an institution
Chennai is famous for housing many prestigious and old colleges. SS College
situated in the suburbs of Chennai, recently celebrated 50th anniversary. It offers
BE degree programme in eight different descriptions. About 4000 students are
studying in the college. The principal of the college is in the verge of retirement.
He has served the college for 35 years. The teaching staff strength is 55; in addition
25 non-teaching staff are also working. Most of them are there for more than 25
years.
Recently there has been a series of complaints from students that the facilities they
get is in no way comparable to the fees paid by them. All the hostel students went
on a day fasting strike to express their dissatisfaction. The college management
was disturbed by this. They appointed a one man committee to looking to the
affairs of the college and offer remedies.
The one man committee, during the interrogation with students and staff found
that there are many problems in the college which have not come out earlier. The
students were unhappy with the teaching offered at the college. It was found that
the results are also poor and the pass percentage has been decreasing over the
years. When enquired about the reason for this the staff and students were blaming
each other. It was noticed that even among staff there is no co-ordination. The
committee noticed that the age old practices are being followed both in teaching
and administration. In the meanwhile one of the parents wrote a strong letter to
management, expressing his displeasure about the treatment he got during his
last visit to the college. Already the government issued a notice to the college to
improve the library facilities.

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Notes With all these, the management is perplexed and looking for a direction to move.
Discuss:
1. What would be your recommendation to the college management?
2. Highlight five critical areas wherein focus is needed. Give reasons also.
3. What would be the best suited TQM model for this college?
4. What are the problems you anticipate while implementing TQM and how
will you tackle them?

VII REVIEW QUESTIONS

1. Explain the influence of Walter A.Shewhart on ensuring quality in
organization.
2. Explain Shewhart Cycle and elaborate the contributions of Deming on that.
3. Illustrate Juran Trilogy and demonstrate how quality is ensured throughout
that.
4. Enumerate the 14-step quality programme advocated by Crosby.
5. Explain how the logistics map was developed by Feigenbaum.
6. Illustrate Ishikawa diagram and demonstrate its usefulness in problem solving.
7. What is Taguchi loss function? Explain the principles of operation.
8. Highlight the concept of quality circle and explain the requirements for
successfully carrying it out.
9. Explain the Japanese 5S principle.
10. Discuss the 8D methodology with example

VIII REFERENCE BOOKS

1. Douglas C. Montgomory, “Introduction to Statistical Quality Control”, Wiley
Student Edition, 7th Edition, Wiley India Pvt Limited, 2012.
2. James R. Evans and William M. Lindsay, “The Management and Control of
Quality”, Sixth Edition, Thomson, 2010.
3. Poornima M.Charantimath, “Total Quality Management”, Pearson Education,
2nd edition, 2012.
4. “Indian standard – quality management systems – Guidelines for performance
Improvement” Fifth Revision, Bureau of Indian standards, New Delhi.

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UNIT III Notes

lESSON 3 - Statistical Process

Control & Process Capability
CONTENTS
I Learning Objectives
II Learning Outcomes
III Overview
Introduction
3.1 Meaning and definition of SPC
3.1.1 SPC system
3.1.2 Elementsof SPCsystem
3.1.3. Significance of SPC
3.1.4. UsesofSPC
3.1.5. Construction of control charts for variables and attributed
3.1.5.1 Control charts
3.1.5.2 Characteristics of control charts
3.1.5.3 Objectives ofcontrol charts
3.1.5.4 Benefits of control charts
3.2 Processcapability-meaning, significance and measurement.
3.2.1 Definition and purpose of process capability
3.2.2 Sixsigma concepts of process capability
3.2.3 Objectives of Six Sigma
3.2.4 Steps involved in the application of six sigma
3.2.5 Advantages of six sigma
3.3 Reliability Concepts
3.3.1 Reliability inseriesand parallel
3.3.2 Product life characteristics curve
3.3.3 Total Productive Maintenance
3.3.4 Steps in TPM
3.4 Tero Technology
3.4.1. ObjectivesofuseofTero technologyinTPM

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Notes
3.5 Business Process Reengineering
3.5.1 Principlesofbusinessprocessreengineering
3.5.2 Stepsfor BPR
3.5.3 Applications of Reengineering
3.5.4 Benefitsand Limitations ofBPR
IV Summary
V Key words
VI Case Study
VII Review Questions
VIII Reference books

I LEARNING OBJECTIVES
Upon completion of this unit, you will be able to:
• Assess the importance and need for process control.
• Develop and use various charts and techniques for SPC
• Analyze the evolution of six sigma
• Understand the reliability variants and their applications • Get a scenario
about BPR and its usage.
• Apply various process control techniques in real life situation.

II LEARNING OUTCOMES
1. Describing quality control systems and key issues in manufacturing and
service.
2. Analyzing the concept of Statistical Process Control(SPC) and the types
of variation.
3. Describing how to construct and interpret simple process control charts
for continuous anddiscrete data.
4. Analyzing and calculating process capability indexes.
5. Analyzing process reengineering and process improvement.
6. Describing practical issues in the implementation of SPC.

III OVERVIEW
Meaning and significance of statistical process control (SPC) – construction
of control charts for variables and attributed. Process capability – meaning,
significance and measurement – Six sigma - concepts of process capability.

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Reliability concepts – definitions, reliability in series and parallel, product life Notes
characteristics curve. Total productive maintenance (TMP), Terotechnology.
Business process Improvement (BPI) – principles, applications, reengineering
process, benefits and limitations.

INTRODUCTION
The application of the principles and philosophies of quality management calls
for capability assessment. This has to be undertaken by the professionals through
the process of re-engineering. There are specific control tools like SPC, to be
adopted in various industries at various stages. To achieve TQM, every aspect
of it whether it is reliability, maintenance, micro level technology assimilation
has to be re-looked into. This comprehensive exercise will bring out the best part
of organizational capabilities. This unit deals with Meaning and significance of
Statistical Process Control (SPC), Construction of Control Charts for variables
and attributes, Process Capability – Meaning, Significance and Measurement,
Six Sigma Concepts of Process Capability, Reliability Concepts – Definitions,
Reliability in Series and Parallel, Product Life Characteristics Curve, Total
Productive Maintenance (TMP), Relevance to TQM, Terotechnology, Business
Process Re-engineering (BPR), Principles, Applications, Reengineering Process,
Benefits and Limitations.

3.1 INTRODUCTION
Statistical process control (SPC) is a method of quality control
whichuses statistical methods.SPCisappliedinordertomonitorandcontrol a process.
Monitoringand controllingthe processensuresthat it operates at itsfull potential.
Meaningof SPC
Statistical process control (SPC) may be defined as the application of statistical
methods tothe measurement and analysis of variation in any process. SPC is the
application of appropriatestatistical tools to processes for continuous improvement
in quality of products and services, andproductivityin the workforce.
Statisticalprocesscontrol(SPC)istheapplicationofstatisticaltechniquestodetermine
whether the output of a process conforms to the product or service design. In
SPC,control charts are used primarily to detect production of defective products
or services or toindicate that the production process has changed and that products
or services will deviate fromtheirdesign specificationsunlesssomethingisdoneto
correctthe situation.

3.1.1 SPC System

SPCisforpreventionofout-of-specificationproduct,anditisnotfordetectionorinspect
ion. It is much more effective to avoid waste by not producing unusable output in
the firstplace. In the past, the whole manufacturing process mainly depended on

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Notes production to make theproduct,onqualitycontroltoinspectthefinalproduct,andscre

en-outitemsnotmeetingspecifications,whichiswastefulandcostly.SPCisafeedback
systemforprevention
1. S (Statistical): By the help of statistical data and statistic analyzing
methods
2. P(Process) : Understanding the present process capability and quality
specifications
3. C (Control) : Control the quality to meet the specification switch minimum
variations
♦ SPC is a methodology using control charts for assisting managers,
supervisors and engineers to monitor the output from a process to
identify and to eliminate various causes of variation
♦ SPC is a proven technique for reducing scrap and rework, and hence
increases productivity
♦ It provides the basis for determining process capability and predicting
the yield from the process
♦ It helps to determine when to take action to adjust a process that is
out control and when to leave the process alone.

Fig no 1 Factors of SPC

1) Education and training:
Education of statistical thinking, Quality control (QC) tools, SPC methods, and
other scientific management methods such as Total Productive Maintenance
(TPM), Just-In-Time, etc.,
2) Total participation and standardization:
Hundred per cent participation of all employees, self-motivation atmosphere,
suggestion system and full participation in making and observing standards
3)Quality improvement teamwork:
Small group activities such as quality circle, quality improvement team, taskforce-
team and cross-functional team

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4)Using statistical methods: Notes

Proper use of statistical tools such as control charts, process capability
index, reliability, correlation and regression methods, design of experiments,
etc.3ElementsofSPCsystem:
Elements of SPC System:

Fig No. 2 Elements of SPC System

a) Process:
The whole combination of suppliers, design quality, input materials, manufacturing
methods, manpower, measurement system, machines, environment that work
together to produce output.
b) Informationaboutprocessperformance:
Information about the actual performance of the process can be learned by
studying theprocess output. Quality measurement, evaluation and comparison of
the produced output arenecessary.
c) Diagnosis:
Diagnosis on the quality problems, and statistical analysis to find-out the causes
of qualityvariations.Thecausesaredivided intocommonandspecial causes.
d) Actionon the process:
Actions based on the diagnostic results are required. For common causes,
systematic action would be necessary by managers, and for special causes,
action. By people close to the process can be taken. Some adjustments may be
necessary for design quality.
The objective of a SPC system is to provide a statistical signal when assignable
causes of variation are present. Such signals can facilitate quick and appropriate
action to eliminate eassignable causes. SPC is a proven technique for improving
quality and productivity. Many customers require their suppliers to provide
evidence of statistical process control. Thus, SPC provides a means by which a
firm may demonstrate its quality capability, an activity necessary for survivalin
today’ shighly competitive markets. Because SPC requires process to show
measurable variation within 3 sigma, it is ineffective for quality levels approaching
six sigma. However, SPC is quite effective for companies in the early stages of
quality efforts.

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Notes a) The inspection processes

Many firms use quality inspection merely trying, often unsuccessfully to weed
out the defectives before they reach the customers. This approach is doomed
to failure because of internal and external failure costs. In contrast, world class
companies combine early inspection with SPC to monitor quality and detect
and correct abnormalities. Important decisions in implementing such a program
include how to measure quality characteristics, what size of sample to collect and
at which stage in the process to conduct inspection.

b) Quality measurements:
To detect abnormal variations in output, inspectors must be able to measure quality
characteristics. Quality can be evaluated in two ways- to measure variables that
is product or service characteristic such as weight, length, volume, are aetc. That
can be measured. The advantage of measuring a quality characteristic is that if a
product or service misses its quality specifications, the inspector knows by how
much. But such measurements involve special equipment’s, employee skills,
exacting procedures and time and effort.

c) Statistical fundamental
The fundamentals of statistics are necessary to describe and to completely
understand the SPCtools.
 Type sofdata
 Measures of centra ltendency
 Measures of dispersion
 Population
 Sample and sampling
 Normal curve
1) Types of data
Instatistics, data can be categorized into two types:

Fig No.3 Types of Data

 The data obtained by counting are discrete (or attribute) data while data
obtained by actual measurement are continuous (or variable data).

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 In other words, all qualitative characteristics are known as attributes and those Notes
characteristics that can be quantified and measurable are known as variables
Examples of attribute (ordiscrete) data:
 The number of defective pieces found in a sample
 Weekly number of accidents in a factory
Examples of variables (orcontinuous) data:
(i) Adimension of a part measured
(ii) Diameter of metal cylinders
2) Measures of central tendency
A measure of central tendency of a distribution is a numerical value that describes
the central position of the data.
The three measures of central tendency generally used are:
1. Mean
2. Median
3. Mode

3) Measures of dispersion
The measures of central tendency locate the center of the distribution. But they do
not tell how the individual observations are spread on either side of the center.
The three measures of dispersion generally used are:
1. Range
2. Meandeviation
3. Standard deviation
4. Population
 The word„ population ‟or„ universe‟ in statistics is used to refer to any
collection of individuals or of their attributes or of results of operations.
 A population or universe can be defined as an unknown pattern of
variation from which known sample has been drawn
5) Sample and sampling
 A part or small section selected from the population is called a sample
and the process of such selection is called sampling
 The sample selected should resemble or represent the entire
population
6) Normal curve
 The normal curve is the most important frequency curve. Normal curve
is also known as Gaussian curve and Probability curve

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Notes  A normal curve is a symmetrical, unimodal, bell-shaped distribution with

the mean, median and mode having the same value
 The normal distribution is fully defined by the population mean and
population standard deviation
3.1.3. Significance of SPC
1) Provides surveillance and feedback for keeping processes in control
2) Signals when a problem with the process has occurred
3) Detects assignable causes of variation
4) Accomplishes process characterization
5) Reduces need for inspection
6) Monitors process quality
7) Provides mechanism to make process changes and track effects of those
changes
8) Once a process is stable (assignable causes of variation have been eliminated),
provides process capability analysis with comparison to the product tolerance
3.1.4 Uses of SPC
Statistical process control (SPC) is a methodology to monitor and benchmark
a process to improve its variability, stability and capability. The control chart is
the main tool in this methodology. Statistical process control can be used to:
1) Monitor and reduce process variability
2) Monitor and maintain the process on target
3) Determine when a process needs adjusting and when it does not
4) Establish process stability and detect process changes so that corrective
action can be taken
5) Determine the capability of a manufacturing process to make product that
conforms to specifications and monitor it online
6) Improve quality and productivity by improving the process, which reduces
product inspection, scrap and re-work at the end of the line

3.1.5 Construction of control charts for

variables and attributed
3.1.5.1 Control charts
 A control chart is a statistical technique for controlling the quality of a product
being manufactured. It was first devised by Dr. Walter A. Shewart after whose
name these chartsare also called Shewart charts. The main advantage of a
control chart is that it can predict the rejects when they are likely to occur,
which enables corrective action to be taken before a defective product is
actually produced. It is based upon the fact that variability does exist in all

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the repetitive processes Notes

 A control chart is a graphical representation of the collected information.
The information may pertain to measured quality characteristics or judged
quality characteristics of samples. It detects the variation in processing and
warns if there is any departure from the specified tolerance limits.
 In other words, control chart is a device which specifies the state of statistical
control, second a device for attaining statistical control, and third, a device to
judge whether statistical control has been attained. The control limits on the
chart are so placed as to disclose the presence or absence of the assignable
causes of quality variation. This makes possible the diagnosis and correction
of many productions troubles and otenbrings substantial improvements in
product quality and reduction of spoilage and rework.
 Moreover, by identifying certain of the quality variations as inevitable
chance variations, the control chart tells when to leave the process alone and
thus prevents unnecessarily frequent adjustments that tend to increase the
variability of the process rather than to decrease it.
 With the help of a control chart, it is possible to find out the natural capability
of a production process, which permits better decisions on engineering
tolerances and better comparisons between alternative designs and also
between alternative production methods.
3.1.5.2 Characteristics of control charts
A control chart is a time-ordered diagram to monitor a quality characteristic,
consisting of:
1. A nominal value, or center line, the average of several past samples
2. Two control limits used to judge whether action is required, an upper control
limit (UCL) and a lower control limit (LCL)
3.1.5.3 Objectives of Control Charts
Control chartsare used to analyzea process with a view to one or more of the
following objectives:
 To secure information to be used in stablishing or changing specifications or
in determining whether a given process an meet specifications
 To secure information to be used in establishing or changing production
procedures. Such changes may beeither elimination of causesof variation or
fundamental changes in production methods that may be called for whenever
the control chart makes it clear that specifications cannot be met with present
methods.
 They are used to provide abasis for current decisions during production as
to when to hunt for causes of variation and take action intended to correct
them, and when to leave a process alone. This is nearly always one of
the purposes of any control charts for variables.

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Notes 3.1.5.4 Benefits of control charts:

Statistical process control plays a very important role during the effort for process
improvement. Some of the important benefits that come from using control
charts include:
1) Control charts are simple and effective tools to achieve statistical control. They
can be maintained at the job station by the operator, and give the operator
reliable information on when action should/should not betaken.
2) When a process is in statistical control, its performance to specification
will be predictable. In this way, both the producer and the customer can rely
on consistent quality levels and stable costs of achieving that quality level.
3) After a process is in statistical control, its performance can be further
improved to reduce variation. The expected effort of proposed improvements
in the system can be anticipated, and the actual effect of even relatively
subtle changes can be identified through the control chartdata. Such process,
improvements will:
(i) Increase the percentage of output that meet customer expectations
(ii) Decrease the percentage of scrapofre-work
(iii)Increase the total yield of acceptable output thought the process
Types of control charts
 Control charts for variables
 Control charts for attributes
Control charts for variables: -
 The quality characteristics which can be measured and expressed in
specific units of measurement are called variables
 Control charts based upon measurements of quality characteristics are
called as control charts for variables
Types o fvariable control charts: The most commonly used variable control
charts are
• X-bar chart. In this chart the sample means are plotted in order to control
the mean value of a variable (e.g., size of piston rings, strength of materials,
etc.).
• R chart. In this chart, the sample ranges are plotted in order to control the
variability of a variable.
• S chart. In this chart, the sample standard deviations are plotted in order to
control the variability of a variable. •
• S**2 chart. In this chart, the sample variances are plotted in order to control
the variability of a variable.
Control charts for attributes: -

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 Where the nature of product is such that the quality characteristic cannot be Notes
measured quantitatively, the items are classified only defectives and non-
defectives at the time of final inspection. There can be a number of factors
responsible for defining any item to be defective and the separate record
foreach cause may be out of question.
Types of attributes control charts used are:
 Pchart
 Np chart
 Cchart
 U chart
• C chart. In this chart (see example below), we plot the number of defectives
(per batch, per day, per machine, per 100 feet of pipe, etc.). This chart assumes
that defects of the quality attribute are rare, and the control limits in this chart
are computed based on the Poisson distribution (distribution of rare events).
• U chart. In this chart we plot the rate of defectives, that is, the number of
defectives divided by the number of units inspected (the n; e.g., feet of pipe,
number of batches). Unlike the C chart, this chart does not require a constant
number of units, and it can be used, for example, when the batches (samples)
are of different sizes.
• Np chart. In this chart, we plot the number of defectives (per batch, per day,
per machine) as in the C chart. However, the control limits in this chart are not
based on the distribution of rare events, but rather on the binomial distribution.
Therefore, this chart should be used if the occurrence of defectives is not
rare (e.g., they occur in more than 5% of the units inspected). For example,
we may use this chart to control the number of units produced with minor
flaws.
• P chart. In this chart, we plot the percent of defectives (per batch, per day,
per machine, etc.) as in the U chart. However, the control limits in this chart
are not based on the distribution of rare events but rather on the binomial
distribution (of proportions). Therefore, this chart is most applicable to
situations where the occurrence of defectives is not rare (e.g., we expect
the percent of defectives to be more than 5% of the total number of units
produced).

3.2 Process capability-meaning,

significance and measurement.
3.2.1 Definition and Purpose of process capability
Definition:
Process capability may be defined as the“minimum spread of a specific
measurement variation which will include 99.7% of the measurements from the
given process”.

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Notes In other words, Process capability = 6 standard deviation. Since 99.7% area is the
normal curve isbetween -3 standard deviation to + 3 standard deviation, therefore
process capability is equal to 6 standard deviation.
Process capability=6 standard deviation is also called as natural
tolerance.
The purpose of process capability analysisis:
(i) To find out whether the process is in herently capable of meeting the specified
tolerance limits.
(ii) To identify why a process„ capable ‟is failing to meet specifications
Method of doing process capability analysis
The procedure to do process capability analysis is as follows:
1. Calculate the average X barand Range Rofeach sample
2. Calculate the grand average X Doublebar. This measures the centering of
the process.
3. Calculate the control limits and plot X bar and R charts. The secontrol charts
measure the stability of the process.
The term process capability refers to the inherent variability of process output
relative to the variation allowed by the design specifications.
Process capability means ability of the process to meet technological or other
requirements, i.e., to fulfil demands put on it. Process capability is a measure of
variability of a process only due to common causes‟. It is measure of minimum
variability that has to be tolerated in a process at a given period. Process capability
can be improved by reducing the magnitude of variability in common causes
‟through various measures as already enumerated.

Process capability concepts

A capability study is a statistical tool which measures the variations within a
manufacturing process. Samples of the product are taken, measured and the
variation is compared with a tolerance. This comparison is used to establish how
„capable‟ the process is in producing the product. Process capability is attributable
to a combination of the variability in all of the inputs.
There are five occasions when capability studies should be carried-out, the
seare:
1) Before the machine/processis bought
2) When it is installed
3) A tregular intervals to check that the process is given the performance
required
4) If the operating conditions change
5) As part of a process capability improvement

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6) Calculate the process capability. This process capability measures the piece- Notes
to-piece variability of the process

Process Capability
1. Select a candidate for the study. This step should be institutionalized. A goal
of any organization should be the ongoing process improvement. However,
because a company has only a limited resource base and can’t solve all
problems simultaneously, it must set priorities for its efforts. The tools for
this include Pareto analysis and fishbone diagrams.
2. Define the process. It is all too easy to slip into the trap of solving the wrong
problem. Once the candidate area has been selected in step 1, define the
scope of the study. A process is a unique combination of machines, tools,
methods, and personnel engaged in adding value by providing a product or
service. Each element of the process should be identified at this stage. This
is not a trivial exercise. The input of many people may be required. There are
likely to be a number of conflicting opinions about what the process actually
involves.
3. Procure resources for the study. Process capability studies disrupt normal
operations and require significant expenditures of both material and human
resources. Since it is a project of major importance, it should be managed as
such. All of the usual project management techniques should be brought to
bear. This includes planning, scheduling, and management status reporting.
4. Evaluate the measurement system. Using the techniques described in
Chapter V, evaluate the measurement system’s ability to do the job. Again,
be prepared to spend the time necessary to get a valid means of measuring
the process before going ahead.
5. Prepare a control plan. The purpose of the control plan is twofold: 1)
isolate and control as many important variables as possible and, 2) provide
a mechanism for tracking variables that cannot be completely controlled.
The object of the capability analysis is to determine what the process can
do if it is operated the way it is designed to be operated. This means that
such obvious sources of potential variation as operators and vendors will be
controlled while the study is conducted. In other words, a single well-trained
operator will be used and the material will be from a single vendor. There
are usually some variables that are important, but that are not controllable.
One example is the ambient environment, including temperature, barometric
pressure, or humidity. Certain process variables may degrade as part of the
normal operation; for example, tools wear and chemicals are used. These
variables should still be tracked using log sheets and similar tools.
6. Select a method for the analysis. The SPC method will depend on the
decisions made up to this point. If the performance measure is an attribute, one
of the attribute charts will be used. Variables charts will be used for process
performance measures assessed on a continuous scale. Also considered will

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Notes be the skill level of the personnel involved, need for sensitivity, and other
resources required to collect, record, and analyze the data.
7. Gather and analyze the data. Use one of the control charts described in this
chapter, plus common sense. It is usually advisable to have at least two people
go over the data analysis to catch inadvertent errors in transcribing data or
performing the analysis.
8. Track down and remove special causes. A special cause of variation may
be obvious, or it may take months of investigation to find it. The effect of the
special cause may be good or bad. Removing a special cause that has a bad
effect usually involves eliminating the cause itself. For example, if poorly
trained operators are causing variability, the special cause is the training
system (not the operator), and it is eliminated by developing an improved
training system or a process that requires less training. However, the removal
of a beneficial special cause may actually involve incorporating the special
cause into the normal operating procedure. For example, if it is discovered
that materials with a particular chemistry produce better product the special
cause is the newly discovered material and it can be made a common cause
simply by changing the specification to assure that the new chemistry is
always used.
9. Estimate the process capability. One point cannot be overemphasized: the
process capability cannot be estimated until a state of statistical control has
been achieved! After this stage has been reached, the methods described
later in this chapter may be used. After the numerical estimate of process
capability has been arrived at it must be compared to management’s goals for
the process, or it can be used as an input into economic models. Deming’s
all-or-none rules provide a simple model that can be used to determine if the
output from a process should be sorted 100% or shipped as-is.
10. Establish a plan for continuous process improvement. Once a stable process
state has been attained, steps should be taken to maintain it and improve
upon it. SPC is just one means of doing this. Far more important than the
particular approach taken is a company environment that makes continuous
improvement of a normal part of the daily routine of everyone.
3.2.2 Six sigma concepts of process capability
 Six sigma stands for six standard deviation from mean (sigma is the Greek
letter used to represent standard deviation in statistics)
 Six sigma, similar to zero defects (ZD), is a philosophical benchmark or
standard of excellence proposed by Philip Crosby.
 Six sigma methodology provides the techniques and tools to improve the
capability and reduce the defectsin any process
 It was started by Motorolain 1987, in its manufacturing division.
 Six sigma strives for perfection
 Six sigma improves the process performance, decreases variation and

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maintains consistent quality of the process output. This leads to defect Notes
reduction and improvements in profits, product quality and customer
satisfaction.
3.2.3 Objectives of six sigma
 Six sigma quality levels are closes to zero defects.
 Total customer satisfaction can be achieved with reliable products/
services
 Reduction of cost is possible
 It gives higher yield
 Improved reliability
 The goal of six sigma quality programme is to improve customer satisfaction
through reducing and eliminating defects and to continuously improve
processes there by improving quality and productivity.
3.2.4 Steps involved in the application of six sigma
The methodology of six sigma consists of DMAIC and DMADV cycle. Brief
explanations of the same are asfollows.
DMAIC cycle
 D-Define/Identify
 M-Measure
 A-Analysis
 I-Improvement
 C- Control

Define / Identify:
The primary aim is to identify, within each sub-process, the possibilities for
defects orquality problems which can be arrived at through the use of different
statistical tools, such as regression analysis, design of experiments and chi-
square testing. The quality problem which requires break through solution has to
be defined clearly in measurable terms.The problem selected should consider
the requirements of the customer and should have relevance to the company’s
business. In other words, its solution should ensure great customer satisfaction
as wellas monetary gains / saving to the company. If the company has developed
its business strategies, the problem should fall under any one of them. Defining a
problem in manufacturing are aiseasier when compared to service areas.

Measure:
The second most important step is the establishment of the metrics that will be
improved using six sigma. It is also necessary to identify and rank the improvement
opportunities. First the CTQ (Critical to Quality) characteristics of the process

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Notes have to be identified in order to focus six sigma on areas that will have the greatest
impact on customer satisfaction. For instance, design might turn out to contain
the crucial CTQ in a manufacturing process while speed might be more relevant
in the case of proceeding an order.
 The output of the process, measured as multiples of its sigma under each CTQ
(existingquality level), has to be recorded so that defect per unit (DPU). These
will be used as the starting points for setting new targets, and proceeding
with the subsequent steps.
Analysis
 This is the stage at which new goals are set, and the route-maps created
for the gap between current and target performance levels. It begins with
benchmarking key product performance against the best-in-class so that the
sigma levels attained by comparable processes can be a scertained as the
basis for new targets.
 Then, a GAP analysis is conducted to identify the factors that distinguish
best-in-class processes from those being analyzed so that the areas of change
can be identified.
Improvement
 The objective of this phase is to confirm the key process variables and quantify
their effects on the CTQ.
 Identify the maximum acceptable ranges of the specification; and then tackle
the capability of the process
 If the existing quality level is 3 standard deviation, efforts must be directed
to improve the processes so as to achieve at least 3 standard deviation.
Control
 The final stage of six sigma implementation is to hold the gains that have
been obtainedfrom the improve stage. Unless there is a good control, we are
likely to go back to theoriginal state. Hence, in this stage the new process-
conditions are documented, and frozeninto systems so that the gains are
permanent. The process is assessed once more after thesetting-in-period in
order to check whether the improvements are being sustained or not.
 If a quality programmes have to achieve meaningful results, the changes
have to be put in to a formal structure. Workers may go back to the earlier
processes.
DMADVcycle
 D-Define
 M-Measure
 A-Analyze
 D-Design
 V- Verify

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Define: - Notes
In the first step, you must define the design goals that are both consistent with
your customer’s demands and your own company’s goals.
Measure: -
In this step, four things should be measured. Theyinclude, CTQ‟swhichst and for
Critical to qualities, production process capability, risk assessments and product
capabilities.
Analyze: -
It is important to use the process of analysis to develop and design better
alternatives that can reduce defects. These designs must be evaluated for their
inherent capabilities to determine whether the design is the best available or if an
alternative can be created which may be better.

Designdetails: -
In this step a design must be optimized to function at its peak. In addition, in order
tooptimize a design, a design must usually be verified. While verification is the
last process, during the design details step, a design plan should be readied for
the next step

Verification: -
Once a design has been analyzed and tested, it should be verified. Verification
usually occurs through pilot runs. As a design is verified through the pilot run, it
can be readied for full production.
CONCEPTS OF SIX SIGMA
• 6σ is used for eliminating waste and inefficiency in the process thereby
increasing customer satisfaction.
• Each participant in the 6σ team has defined roles and responsibilities.
• 6σ is a data-driven concept and needs the accurate collection of data for the
analysis
• It is a business-driven and multi-dimensional concept for achieving the
following,
• Improved processes
• Defect’s reduction
• Improved productivity
• Reduced process variability
• Cost’s reduction
• Reducing the time for the products or services
• /Improved profits
• Improved customer satisfaction levels

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Notes • High-Quality output - As per the customer expectations.

• Defect’s reduction - Defects per million opportunities (DPMO), is one the key
concept of 6σ to reduce the level of defects systematically and statistically.
• Reduce Variations in the process - Reduce the variations in the process by
improving the processes and outputs.
• Process Capability - Calculation of the Cp and Cpk factor for the process
capabilities
• Design for 6σ (DFSS) - This is used for new processes that are newly designed.
• Stable Operations - To make the operations stable, repetitive, consistent,
predictive, and adaptable.
• DMAIC –This stand of Define, Measure, Analyze, Improve, and Control.
This is done statistically and is a data-driven approach

Fig : Six Sigma Conxepts and PPM& Six Sigma Levels

SIX SIGMA ORGANISATION CONSISTS OF:

• Quality Council / Apex Council
• Sponsor • Champion
• Master Black Belts
• Black Belts
• Green Belts
• Team members

Fig : Six Sigma Organization Concepts

EXECUTIVE LEADERSHIP
Includes the CEO and other members of top management. They are responsible
for setting up a vision for Six Sigma implementation. They also empower the other

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role holders with the freedom and resources to explore new ideas for breakthrough Notes
improvements.

CHAMPIONS
Take responsibility for Six Sigma implementation across the organization in an
integrated manner. The Executive Leadership draws them from upper management.
Champions also act as mentors to Black Belts.

MASTER BLACK BELTS

Identified by champions, act as in-house coaches on Six Sigma. They devote
100% of their time to Six Sigma. They assist champions and guide Black Belts
and Green Belts. Apart from statistical tasks, they spend their time on ensuring
consistent application of Six Sigma across various functions and departments.
The “Master Black Belts” Should have completed the Black Belt Certification
and monitored at least 15 or so projects to completion.

BLACK BELTS
Operate under Master Black Belts to apply Six Sigma methodology to specific
projects. They devote 100% of their time to Six Sigma. They primarily focus on
Six Sigma project execution, whereas Champions and Master Black Belts focus
on identifying projects/functions for Six Sigma. • The “Black Belt” should have
completed the Black Belt certification and monitored four projects to successful
completion

GREEN BELTS
Are the employees who take up Six Sigma implementation along with their other
job responsibilities, operating under the guidance of Black Belts. Green belts are
similar to black belts, but they do not have a full-time role. • They are the project
heads or process owners. They execute six sigma projects as part of their normal job
GREEN BELTS: The “Green belts” should have completed the Green Belt
certification and completed one process improvement project successfully. Some
organizations use additional belt colors, such as Yellow Belts, for employees that
have basic training in Six Sigma tools and generally participate in projects and
‘white belts’ for those locally trained in the concepts but do not participate in the
project team.
3.2.5 Advantages of six sigma
A) Rapid and almost radical improvements:
Several of the quality initiatives of the earlier days such as quality circles, Kaizen
and Quality Function Deployment are very necessary for an organization at all
the times. However, by their very nature, these measures produce incremental
improvements.In addition to these kinds of improvements, an organization in
today’s fast-changing business world needs improvements to be brought in
very rapidly in order to match the pace of changing technologies and changing

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Notes customer requirements. Six sigma is such an instrument of change, which can
bring about radical changes in the way an organization function.

B) Transforms the entire organization:

When six sigma is implemented, the entire organization in all its constituent
parts is geared for absorbing rapid and radical changes. One cannot possibly bring
in large changes in thepast of the organization, without adequate measures in the
other part. Six sigma initiatives make the management to take a closer look at
the various functions and departments and the inter-relationships between them.

C) Provides a consistent metric:

 By its very nature, six sigma provides measures and targets that are
quantifiable. Specific defects–deviations from the customer requirements-
are identified and measured. Improvement performance is also measured.
A consistently uniform measurability is one of its important distinguishing
characteristics.
 Organizational changes are brought about by the implementation of six
sigma. These transformations are general in nature. But, the improvements
they generate can be and should be measurable against a yardstick. Six sigma
uses „ customer requirements‟ as its yardstick.
D) Customer is always in focus:
The benefit of constant measurements is that the customer is always in focus with
her requirements being the standard against which the measurements are done.
Due to the presence six sigma, an organization is always aware of the changes
in the market.

E) Continuous improvement process:

Since six-sigma is a measurement-based initiative, the organization that
implements this initiative would have to constantly keep itself appraised of the
customer’s requirements. Inshort, a six-sigma initiative never stops. It is forever.
It is true that six sigma signifies radical improvement. But a radica limprovement
system does not have to negate continuous improvement.

Disadvantage of six sigma

 Six Sigmais ‘Exacting’ but not necessarily ‘Exciting’:
For one, in this intensely competitive business world, quality-even six sigma or
evenliterally zero defects quality-forms just the basic minimum. When a firm
implements six sigma itis only trying to reach the level of customer‟s expectations.
This means, the firm is only trying tocatch up with the competition. A customer is
„ satisfied‟ after the six sigma efforts; but she may not be„ delighted ‟or„ excited‟,
six sigma is good, but it does not„ surprise‟the customer. While

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Quality is about prevention of non-conformance; it is more so about delightfully Notes

surprising the customer.
 Detraction from ‘creativity’:
Because six sigma believes in metrics-and-measures that detect/account for
the minutes one in a million error, it is feared that, it may get caught in it sown
number strap.
There are organizations that innovate. There are organizations that do a perfect
job as regards quality. Today’s business environment calls for an organization
that is excellent in both these aspects. Though it seems like a tall order that is
the need for a society that is ever evolving and is on a path to progress.

3.3 Reliability Concepts

Reliability concerns with the prediction of failures that may occur during the life
of a product or service. Improving reliability has become an important part of
the larger overall goal of improving product quality. It is agreed that an unreliable
product is not a high-quality product. It is also emphasized that “reliability is
quality over time”.

Definition:
Product reliability is defined as th eability of a product to performa required
unctionunder stated conditions for a stated period of time
From the above definition, four significant element of product reliability can
be identified. They are:
 Probability
 Performance
 Time
 Conditions
Objectives of reliability engineering:
The important objectives of reliability engineering are:
(i) To prevent failure;
(ii) To provide economic benefits
(iii) To assist with the optimization of operating a vailability
(iv) To lower the maintenance and its costs to the customer; and
(v) To minimize over design
Key terms relevant to there liability concepts
1. Failure: a failureis„ an in herent state of a system component in which an
itemisunable to performits standard function‟

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Notes 2. Failurerate is the number of failures per unit time

3. Common causefailure:A common cause failure is one in which several failures
can occur as a consequence of a common cause, e.g., loss of power supply
4. Availability: Availability is the probability that the system is ready to perform
its stated task as and when required
5. Maintain ability: Maintainability is the probability that a failed unit can be
put back to satisfactory working condition within a given down time
6. Redundancy: Redundancy is the existence of two or more means of carrying
out a stated function in a given system.
(i) Active redundancy: It applies when redundant units are functioning
simultaneously rather than beingswitchedon only at the moment of need
(ii) Stand by redundancy: A stand by redundancy is when an alternative
means of carrying out the function is switched on when the primary
means of performing the function fails.
7. Mean Time to Repair (MTTR):
This is the average time to failure of a large sample of identical components
or subsystems.

8. Mean Time Between Failures (MTBF):

This is the average time between successive failure sofa system or are
pairable component

9. Hazard
The hazard is expressed as the ratio of the number of failures in a given time
interval to the number of “good” components remaining at the end of the interval.
3.3.1 Reliability in series and parallel

Reliability inseries:
 The simple stand perhaps most common structure inreliability analysis is
the series configuration. In the series case the functional operation of the
system depends on the proper operation of all system components. A series
string of Christmas tree lights is an obvious example.
Reliability inparallel:
 In many systems several signal paths perform the same operation. If the
system configuration is such that failure of one or more paths still allows the
remaining path or paths to perform properly, the system can be represented
by a parallel model.
3.3.2 Product life characteristics curve
In almost all cases the failure rate of a product changes with time. A product’s
failurerate is represented by the product life characteristic curve. Because of its

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shape, the product life characteristic curve is also known as a„ bath tub curve‟. Notes
Product life characteristic curve
 Infantmortality period
 Useful-lifeperiod
 Wear-out period
Infantmortality period
 Infantmortality region, also known as burn-inregion, the„ break-inregion ‟or
the debugging region‟
 The first stage of the curve shows a high failure rate, which rapidly decreases
as function of time.The initial high failure rate, known as infant mortality
or the debugging stage.
 In this period, the failures are mainly due to weakness in the materials used,
poor manufacturing methods or incorrect installation and startup.
Useful-life period
 This part of the curve is usually the longestand of the greatest interest
inreliability studies.
 The failure rate over this region is reasonably constant and of low
value
 The failures over this period occur randomly and are unpredictable e.g.,
failures due to safety factors, human error and natural failures.
Wear-outperiod
The final phase of the lifecycle curve is the wear-out phase of the equipment life.
Thefailure rate rapidly increases as a function of time during this stage. By this
point most equipment is probably fully depreciated, and now becomes a candidate
for retirement, foruse as back-up or may be cannibalized for spare parts. As long
as it can be economically justified, the equipment’s useful life can be extended
and a proper and a proactive preventive and predictive maintenance program
can delay the wear-out phase.

Reliability in Electronic Packaging

In terms of reliability, the Japanese proactively develop good design, using
simulation and prototype qualification, that is based on advanced materials and
packaging technologies. Instead of using military standards, most companies
use internal commercial best practices. Most reliability problems are treated as
materials or process problems.
Reliability prediction methods using models such as Mil-Hdbk-217 are not used.
Instead, Japanese firms focus on the “physics of failure” by finding alternative
materials or improved processes to eliminate the source of the reliability problem.
The factories visited by the JTEC panel are well equipped to address these types
of problems.

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Notes Assessment methods. Japanese firms identify the areas that need improvement for
competitive reasons and target those areas for improvement. They don’t try to fix
everything; they are very specific. They continuously design products for reduced
size and cost and use new technologies only when performance problems arise.
As a result, most known technologies have predictable reliability characteristics.
Infrastructure. The incorporation of suppliers and customers early in the
product development cycle has given Japanese companies an advantage in rapid
development of components and in effective design of products. This is the
Japanese approach to concurrent engineering and is a standard approach used
by the companies the JTEC panel visited. The utilization of software tools like
design for assembly allows for rapid design and is an integral part of the design
team’s activities. At the time of the panel’s visit, design for disassembly was
becoming a requirement for markets such as Germany. Suppliers are expected to
make required investments to provide the needed components for new product
designs. Advanced factory automation is included in the design of new factories.
Training. The Japanese view of training is best exemplified by Nippondenso. The
company runs its own two-year college to train production workers. Managers
tend to hold four-year degrees from university engineering programs. Practical
training in areas such as equipment design takes place almost entirely within the
company. During the first six years of employment, engineers each receive 100
hours per year of formal technical training. In the sixth year, about 10% of the
engineers are selected for extended education and receive 200 hours per year
of technical training. After ten years about 1% are selected to become future
executives and receive additional education. By this time, employees have earned
the equivalent of a Ph.D. degree within the company. Management and business
training is also provided for technical managers. In non-engineering fields, the
fraction that become managers is perhaps 10%. Ibiden uses “one-minute” and
safety training sessions in every manufacturing sector. “One-minute” discussions
are held by section leaders and workers using visual aids that are available in each
section. The subjects are specific to facets of the job like the correct way to use a
tool or details about a specific step in the process. The daily events are intended
to expose workers to additional knowledge and continuous training.
As a consequence, workers assure that production criteria are met. Ibiden also
employs a quality patrol that finds and displays examples of poor quality on large
bulletin boards throughout the plant. Exhibits the panel saw included anything
from pictures of components or board lots sitting around in corners, to damaged
walls and floors, to Ziplock bags full of dust and dirt.
The factory. Japanese factories pay attention to running equipment well, to
continuous improvement, to cost reduction, and to waste elimination. Total
preventive maintenance (TPM) is a methodology to ensure that equipment operates
at its most efficient level and that facilities are kept clean so as not to contribute
to reliability problems. In fact, the Japan Management Association gives annual

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TPM awards with prestige similar to the Deming Prize, and receipt of those awards Notes
is considered a required step for companies that wish to attain the Japan Quality
Prize. No structured quality or reliability techniques are used - just detailed studies
of operations, and automated, smooth-running, efficient production.

3.3.3 TOTAL PRODUCTIVE MAINTENANCE (TPM)

Total Productive Maintenance (TPM) is the process of maximizing equipment
effectiveness through the active involvement of all supporting departments. The
goal of Total Productive Maintenance (TPM) is to improve overall productivity
by optimizing equipment availability.

How does total productive maintenance work?

Maintenance and reliability workers are always striving for “perfect production”
This is very difficult since unexpected problems arise even in the best-planned
facilities; however total productive maintenance will get a facility as close as it
can to “perfect production.”
TPM frames maintenance as a business advantage - no downtime and no
equipment failure, meaning only production and only profit. TPM is built on the
5S methodology, which helps organize and standardize facility procedures, leading
to many benefits for both production and workplace quality.

BENEFITS OF TOTAL PRODUCTIVE MAINTENANCE

1. Less unplanned maintenance
With carefully planned and scheduled maintenance, equipment is extremely well
maintained. Additionally, TPM empowers all plant personnel to take ownership
of their machines and maintenance is a positive investment for them. Since TPM
makes maintenance personal, assets are better cared for.

2. Reduced equipment downtime

More planned maintenance means fewer failures. By implementing proactive
maintenance activities, downtime events are minimized.

3. Lower manufacturing costs

As overall equipment efficiency (OEE) increases, production costs are also
minimized. Higher productivity leads to higher profits and reduced spending on
equipment stoppage time and repairs.

4. Strengthened workplace safety

Because TPM is built on the 5S foundation, the workplace is systematically
organized and cleaned. The steps in the 5S method - sort, straighten, shine,
standardize, and sustain - uncover underlying problems and challenges to
maintaining the work environment.

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Notes 3.3.4 Steps in TPM/ Total productive maintenance workflow

TPM is an innovative concept in the manufacturing industry that evolved from
the idea of preventive maintenance to adopt practices of productive maintenance,
maintenance prevention, and reliability Engineering. What we now refer to as TPM,
has become an ingenious approach to achieve overall equipment effectiveness by
involving the workforce behind the machines (i.e. the operators).
The developments in TPM were first seen in Japan. Toyota was one of the
first companies to receive TPM certification. The philosophy behind TPM was
pivotal in achieving Toyota’s Just In Time level of service and reliability in their
production facilities. Seiichi Nakajima, regarded as the Father of TPM, describes
this philosophy in a quote: “TPM is the making of products through the making
of people”.

Fig TPM Workflow

EIGHT PILLARS OF TPM

Fig: TPM Pillars

1) 5S - Sort, straighten, shine, standardize, and sustain

Just like a physical structure starts with a grounded framework, building a strong
TPM process requires a strong foundation in the form of the principles of 5S. This
is a workplace organization method that is simplified into 5 basic steps:

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 Sort tools, equipment, and materials to identify which of these can be Notes
discarded
 Straighten and set things in the proper order to reduce unnecessary motion
and efficiently travel between working groups and locations
 Shine refers to performing necessary housekeeping to clean up the work area
 Standardize and schedule activities to systematically form the habits to keep
the workplace organized
 /Sustain the process and principles for long-term applications
 The 5S approach provides a systematic approach to cleaning the workplace,
thereby uncovering underlying problems and challenges.
2) Autonomous maintenance
Maintenance tasks and caring for equipment should start with the people using
the equipment. The empowerment of operators to work on small maintenance
tasks effectively allows the maintenance teams to focus on more specialized
assignments.

3) Continuous improvement
Also known as the Japanese term Kaizen, Continuous Improvement promotes
the attitude of progressing towards zero losses and zero defects. Through small
but continual tweaks to processes, the overall effectiveness and efficiency of the
organization are developed.

4) Planned maintenance
Planned maintenance activities are essential to the prevention of equipment
breakdown. Planned maintenance is performed by periodically evaluating the
condition of equipment to proactively prevent deterioration and mechanical
failures.

5) Quality maintenance
To ensure the satisfaction of the customer, manufacturing processes aim for
zero-defect production. Standards for superior quality, and checks on whether the
standards are being met, should be in place. The goal of quality maintenance is to
identify any possible causes of deviations from zero-defect production.

6) Training
The idea of TPM is that everyone does their part to contribute to the overall
productivity of the production process. In order to achieve optimum performance,
and to build each member’s competence, proper training is required to equip each
one with the theoretical and practical know-how of working with machines and
equipment.

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Notes 7) Office TPM

A key role that is often overlooked is the administrative department that works
behind the scenes. Like the rest of the production teams and processes, the
management and administrative functions are also subject to productivity
improvement. Tins include identifying and eliminating losses and contributing
to the overall performance of the plant.

8) Safety, health, and environment

The last of the eight pillars focus on creating a safe workplace. The essence of this
pillar is realized when actively applied to each of the other pillars. The successful
implementation of this pillar will contribute to a secure and hazard-free workplace.

Example of total productive maintenance

The ideals encouraged by TPM is deeply rooted in the involvement of people.
The main factor that drives its success is the proper attitude exhibited by the
management, maintenance staff, and operators alike.
A TPM success story occurred inside one of the largest beer brewers in Latin
America, Cervecería Cuauhtémoc Moctezuma (CCM). The principles of TPM
born in Japan in the 1970s are alive and thriving in all of the company’s six plants
in Mexico.
Explaining the meaning of TPM and how CCM applies it within the organization,
plant maintenance manager Manuel Sanchez says, “It means we are all responsible
for guaranteeing the total effectiveness of the equipment — maintenance,
production, top management, human resources… everyone.”
TPM further develops the ideas of maintenance and preventive maintenance by
involving all departments and people within an organization. With an organization-
wide mindset focused on taking responsibility for the machines and equipment,
increasing overall performance is achievable even with a limited number of
resources.

RELEVANCE TO TQM:
Total productive maintenance and total quality management are two terms
often used interchangeably when talking about Lean manufacturing. While the
two programs do share a number of similarities, they are in fact two different
approaches.
Although both Lean, both terms have important distinctions. In fact, both methods
should be used to achieve maximum efficiency in your facility. TQM, or total
quality management, is a management philosophy based on quality control,
whereas total productive maintenance, or TPM, is a concept focused on improving
maintenance processes through predictive and preventative maintenance. TQM
seeks to systemize management and align divisions in an organization to improve
the quality of a product and reduce the number of defects. TPM on the other hand,

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works to improve efficiency by involving equipment operators in the ongoing Notes

maintenance of the machines they use.

Fig : Relevance TPM

TPM’s objectives are based on the belief that small consistent improvements
have a larger, more impactful influence than making huge, sweep changes every
once and awhile. TQM is focused more on customer needs, expectations, and
satisfaction. This concept uses strategy, data, and effective communication to
ensure discipline and best practices in production so that quality is achieved,
then maintained. Like most Lean manufacturing philosophies, TQM builds off of
other Lean principles and ideas. TQM was influenced by the teachings of Phillip
B. Crosby, Lean forefather W. Edwards Deming, Armand V. Feigenbaum, Kaoru
Ishikawa, and Joseph M. Juran.

Lean Manufacturing Objectives

For both TPM and TQM, the goals are the same:
• Avoid waste in fast-paced environments
• Producing quality goods consistently.
• Reduce cost.
• Minimum defects and increase quality.
TPM and TQM are different at their core, but the two programs do closely resemble
each other. For instance, both require total commitment and participation from
upper-level management in order for them to succeed. Employees play a major
role in both programs, and both works to empower employees to initiate corrective
action.

3.4 Terotechnology
• A word derived from the Greek word “tero” or “I care”, which is now used
with the term “technology” to refer to the study of the costs associated with
an asset throughout its life cycle-from acquisition to disposal
• Tero technology is concerned with the application of managerial, financial,
engineering and other skills to extend the operational life and increase the
efficiency of equipment and machinery

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Notes • It is concerned with there liability and maintain ability of physical assets and
also takes into account the processes o installation, commissioning, operation,
maintenance, modification and replacement
• Tero technology is an integrated approach to cost control and encompasses
all the costelements starting from design and development of part or product
up to its final disposal. Itis concerned with plant design, manufacture of
the plant and equipment, installation and commissioning of the same and
subsequent maintenance and repairs and after sale, service with a view to
achieve results at most economical levels.
3.4.1 Objectives of use of Terotechnology in TPM
The objectives of the use of principle softerotechnologyare,
1. To minimize to tallifecycle costs
2. Extend the useful life of the plant and equipment
3. Assure optimum availability of the installed equipment and
4. To ensure operation alreadiness a tall times
Activities of terotechnology
These may thus consist of:
• Decision regarding design, production and cost targets.
• Decision as regards requirement of physical resources, plant, and
equipment
• Considering requirements of plant and equipment from the point-of-view of
production capability, reliability, environment control, safety of operations,
decrease to xicity of materials and processes, and human aspects.
• Deciding on the specifications of the equipment to be procured from outside
• Acquiring, installing and commissioning the plant and equipment and handing
it over to the production department after carefully carried-out tests and
inspection.
Benefits of terotechnology
 Better maintenance and higher reliability of plant and equipment
 Lower costs of maintenance and repairs
 Better control on spare part management
 Less breakdowns, lower breakdown costs and smooth, uninterrupted
production
 Higherquality, better efficiency of operations, and high quality of work life
 Better image of the company amongst its customers
 Better communication between suppliers, producers and customers
 Higher prices can be fixed and greater profitability is possible

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Notes
3.5 Business Process Reengineering
“BPR is defined as the fundamental rethinking and radical redesign of business
processes to achieve dramatic improvements in critical, contemporary measures
of performance such ascost, quality, service and speed. ”The keywords in the
preceding definition are the italicizedones.
BPR advocates that enterprises go back to the basics and reexamine their very
roots.It doesn’t believe in small improvements. Rather it aims at total reinvention.
As for results: BPRis clearly not for companies who want a 10% improvement.
It is for the ones that need a ten-foldincrease.

BPR methodology
BPR employs a structured methodology that reduces work processes to their
essential composite activities, and provides cost performance metrics to facilitate
a business case for dramatic improvements. Both functional and cross-functional
processes are evaluated through work flow analysis and activity-based costing.
In many cases, the application of new technology and industry best practices will
enable quantum improvement in an organization’s cost and performance.

3.5.1 Principles of business process reengineering

Reengineering is about achieving a significant improvement in process so that
contemporary customer requirement sofquality, speed, innovations, customization
and service are met.This entails seven new rules of doing work proposed by
hammer, relating to who does the work, where and when it is done and information
gathering and integration. These seven rules are:
Rule 1: Organize around outcomes, not tasks
Rule 2: Have those who use the output of the process perform the process
Rule 3: Merge in formation processing work into the real work that produces the
information.
Rule 4: Treat geographically dispersed resources as through they work centralized
Rule 5: Link parallel activities instead of integrating their results
Rule 6: Put the decision point where the work is performed and build control
into the process
Rule 7: Capture information once-at thesource

Rule1: Organize around outcomes, not tasks

Several specialized tasks previously performed by different people should be
combined into a single job. The new job created should involve all the steps
in a process that creates a well-defined outcome. Organizing around outcomes
eliminates the need for hand-off resulting in greater speed, productivity and
customer responsiveness.

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Notes Rule2: Have those who use the output of the process perform the process
In other words, “work should be carried out where it is”, makes the most sense to
do it.This results in people closest to the process actually performing the work,
which shifts workacross traditional intra and inter-organizational boundaries. For
instance, employees can make some of their purchases without going through the
purchasing department. Customers can perform simple repairs themselves and
suppliers can be asked to manage parts in inventory.

Rule3: Mergein formation processing work into the real work that
produces the information
This means that people who collect information should also be responsible
for processing it which greatly reduces errors by cutting the numbers of external
contact points for aprocess

Rule 4: Treat geographically dispersed resources as though they work

centralized
Centralized databases and telecommunication networks allow companies to link
separate units or individual field personnel, providing them with economies
of scale while maintaining their individual flexibility and responsiveness to
customers.

Rule 5:Link parallel activities instead of integrating their results

The concept only integrating the outcome of parallel activities that must eventually
come together is the primary cause of rework, high costs and delays in the outcome
of the overall process. Such parallel activities should be linked continuously
and coordinated during the process.

Rule 6: Put the decision point where the work is performed and
build control into the process
Decision-making should be made part of the work performed. This is possible
today with a more educated and knowledgeable work force plus decision-aiding
technology. Controls are now made part of the process

Rule 7: Capture information once-at the source

Information should be collected and captured in the company ‟son-line system
only once at the source where it is created. This approach avoids data entries
and costly re-entries

3.5.2 Steps for BPR:

Phase1: Begin organizational change
Assess the current state of the organization
Explain the need for change
Illustrate the desired state

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Create a communication campaign for change Notes

Phase2: Build the reengineered organization

The major activities of the second phase are given below:
1) Establisha BPR organizational structure
2) Establish the roles for performing BPR
3) Choose the personnel who will reengineer
Phase3: Identify BPR opportunities
This phase consists of the following activities:
1) Identify the core/high–level processes
2) Recognize potential change–enablers
3) Gather performance metrics with in the industry
4) Gather performance metrics outside the industry
5) Select processes that should be reengineered
6) Prioritize selected processes
7) Evaluate pre-existing businesss trategies
8) Consult with customers to know their desires
9) Determine customer ‟sactual needs
10) Formulate new process performance objectives
11) Establish key process characteristics
12) Identify potential barriers to implementation
Phase4: Understand the existing process
The main activities of the fourth phase are:
1) Understand why the current steps are being performed
2) Model the current process
3) Understand how technology is currently used
4) Understand how information is currently used
5) Understand the current organizational structure
6) Compare current process with the new objectives
Phase 5: Reengineer the process
The major activities are:
1) Ensure the diversity of there engineering team
2) Question current operating assumptions
3) Brainst or musing change levels
4) Brainst or musing BPR principles
5) Evaluate the impact of new technologies

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Notes 6) Consider the perspectives of stakeholders

7) Use customer value as the focal point
Phase 6: Blue print the new Business system
The activities of phase 6 are the following:
1) Define the new flow of work
2) Model the new process steps
3) Model the new information requirements
4) Document the new organizational structure
5) Describe the new technology specifications
6) Record the new personnel management systems
7) Describe the new values and culture required

Phase7: Perform the transformation

Theactivitiesofthislastphaseare:
1) Develop a migration strategy
2) Create a migration action plan
3) Develop metrics for measuring performance during implementation
4) Involve the impacted staff
5) Implement in an iterative fashion
6) Establish the new organizational structures
7) Assess current skills and capabilities of workforce
8) Map new tasks and skill requirements to staff
9) Re-allocate workforce
10) Develop a training curriculum
11) Educate the staff about the new process
3.5.2 Applications of reengineering
1) Reengineering is applied to any business process
2) Hammer states that business process may be defined as a set of logically
related tasks to achieve a defined business outcome. A set of processes forms
a business system-the way in which a business unit or a collection of units
carries out its business
3) Assuming that a company has decided that its processes are ineffective and
inefficient, the following are the major steps the company should embark on
to redesign its process according to hammer.
4) Develop business vision and process objectives: this step involves prioritizing
objectives and setting targets for the future. ABPR vision statement describes
the ideal state of a process

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5) Identify processes to be redesigned; This involves identifying critical Notes

processes and envisioning the steps to avert short comings in them

3.5.3 Benefits & Limitations ofBPR

Benefits:
• Satisfaction:
• Growth of knowledge
• Solidarity to the company
• Demanding jobs
• Authority

Limitations:
70% of the BPR projects fail. Biggest obstacles that reengineering faces are:
• Lack of sustained management commitment and leadership
• Unrealistic scope and expectations
• Resistance to change

IV SUMMARY
The importance and indispensability of control in the production process is
emphasized in this unit. The Statistical Process Control has its own evolution
character and that is prescribed. Various control charts along with their
applications are dealt elaborately. The process capability and its significance
for bringing out a quality product are discussed in detail. The concept of
six sigma, the methodology of adopting them are presented for the use of
the readers. Bill Smith, the father six sigma has evolved the concept and
its application in different industries and their outcome are placed for the
consumption of the readers. The reliability concepts, their importance are
explained with application in various industries. Product Life Characteristics
Curve with its phases and quality requirements are deliberated. The Total
Productive Maintenance has lot of overlapping on TQM. The eight pillars
of TQM, viz tha 5S Components, Jishu Hozen (Autonomous Maintenance),
Kaizen, Planned Maintenance, Quality Maintenance, Training, Office TPM,
Safety, Health and Environment are elaborated for better understanding.
The Life-Cycle Costing, otherwise popularly known as terotechnology
is deliberated with a focus on how to realize it. The Business Process
Reengineering, fundamentals and methodolgy are handled in this unit.
Deliberations on whether BPR is a fad or rebirth of scientific management is
also conducted. The reengineering process is elaborately dealt in conjunction
with BPR. Examples on various sectors are also highlighted in this.

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Notes
V KEY WORDS
SPC, Six-Sigma, Control Charts, BPR.
VI CASE STUDY: Bayfield Mud Company
In November 1990, John Wells, a customer service representative of Bayfield
Mud Company, was summoned to the Houston, Texas, warehouse of Wet-Land
Drilling, Inc., to inspect three boxcars of mud-treating agents that Bayfield Mud
Company had shipped to the Houston firm.
(Bayfield’s corporate offices and its largest plant are located in Orange, Texas,
which is just west of the Louisiana-Texas border.) Wet-Land Drilling had filed
a complaint that the 50-pound bags of treating agents that it had just received
from Bayfield were short-weight by approximately 5% The light-weight bags
were initially detected by one of Wet-Land’s receiving clerks, who noticed that
the railroad scale tickets indicated that the net weights were significantly less on
all three of the boxcars than those of identical shipments received on October
25, 1990. Bayfield’s traffic department was called to determine if lighter-weight
dunnage or pallets were used on the shipments. (This might explain the lighter
net weights.) Bayfield indicated, however. that no changes had been made in the
loading or palletizing procedures. Hence, Wet-Land randomly checked 50 of the
bags and discovered that the average net weight was 47.51 pounds. They noted
from past shipments that the bag net weights averaged exactly 50.0 pounds, with
an acceptable standard deviation of 1.2 pounds. Consequently, they concluded
that the sample indicated a significant short-weight. (The reader may wish to
verify the above conclusion.) Bayfield was then contacted, and Wells was sent to
investigate the complaint. Upon arrival, Wells verified the complaint and issued
a 5% credit to Wet-Land. Wet-Land’s management, however, was not completely
satisfied with only the issuance of credit for the short shipment. The charts followed
by their mud engineers on the drilling platforms were based on 50-pound bags
of treating agents. Lighter-weight bags might result in poor chemical control
during the drilling operation and might adversely affect drilling efficiency. (Mud
treating agents are used to control the pH and other chemical properties of the
cone during drilling operation.) This could cause severe economic consequences
because of the extremely high cost of oil and natural gas well drilling operations.
Consequently, special use instructions had to accompany the delivery of these
shipments to the drilling platforms. Moreover, the light-weight shipments had
to be isolated in Wet-Land’s warehouse, causing extra handling and poor space
utilization. Hence, Wells was informed that Wet-Land Drilling might seek a new
supplier of mud treating agents if, in the future, it received bags that deviated
significantly from 50 pounds.

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The quality control department at Bayfield suspected that the light-weight bags Notes
may have resulted from “growing pains” at the Orange plant. Because of the earlier
energy crisis, oil and natural gas exploration activity had greatly increased. This
increased activity, in turn, created increased demand for products produced by
related industries, including drilling muds. Consequently, Bayfield had to expand
from a one-shift (6:00 A.M. to 2:00 P.M.) to a two-shift (6:00 A.M. to 10:00 P.M.)
Operation in mid-1988, and finally to a three-shift operation (24 hours per day)
in the fall of 1990.
The additional night-shift bagging crew was staffed entirely by new employees.
The most experienced foremen were temporarily assigned to supervise the night-
shift employees. Most emphasis was placed on increasing the output of bags to
meet the ever-increasing demand. It was suspected that only occasional reminders
were made to double-check the bag weight-feeder. (A double-check is performed
by systematically weighing a bag on a scale to determine if the proper weight is
being loaded by the weight-feeder. If there is significant deviation from 50 pounds,
corrective adjustments are made to the weight-release mechanism.)
To verify this expectation, the quality control staff randomly sampled the bag
output and prepared the following chart. Six bags were sampled and weighed
each hour.

Time Average Range

Weight
(Pounds)
Smallest Largest
6:00 A.M. 49.6 48.7 50.7
7:00 50.2 49.1 51.2
8:00 50.6 49.6 51.4
9:00 50.8 50.2 51.8
10.00 49.9 49.2 52.3
11:00 50.3 48.6 51.7
12 Noon 48.6 46.2 50.4
1:00 P.M. 49.0 46.4 50.0
2:00 49.0 46.0 50.6
3:00 49.8 48.2 50.8
4:00 50.3 49.2 52.7
5:00 51.4 50.0 55.3
6:00 51.6 49.2 54.7
7:00 51.8 50.0 55.6
8:00 51.0 48.6 53.2
9:00 50.5 49.4 52.4

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Notes 10.00 49.2 46.1 50.7

11:00 49.0 46.3 50.8
12 Midnight 48.4 45.4 50.2
1:00 A.M. 47.6 44.3 49.7
2:00 47.4 44.1 49.6
3:00 48.2 45.2 49.0
4:00 48.0 45.5 49.1
5:00 48.4 47.1 49.6
6:00 48.6 47.4 52.0
7:00 50.0 49.2 52.2
8:00 49.8 49.0 52.4
9.00 50.3 49.4 51.7
10:00 50.2 49.6 51.8
11:00 50.0 49.0 52.3
12 Noon 50.0 48.8 52.4
1:00 A.M. 50.1 49.4 53.6
2:00 49.7 48.6 51.0
3:00 48.4 47.2 51.7
4:00 47.2 45.3 50.9
5.00 46.8 44.1 49.0
6:00 46.8 41.0 51.2
7:00 50.0 46.2 51.7
8:00 47.4 44.0 48.7
9:00 47.0 44.2 48.9
10:00 47.2 46.6 50.2
11:00 48.6 47.0 50.0
12 Midnight 49.8 48.2 50.4
1:00 A.M. 49.6 48.4 51.7
2:00 50.0 49.0 52.2
3:00 50.0 49.2 50.0
4.00 47.2 46.3 50.5
5:00 47.0 44.1 49.7
6:00 48.4 45.0 49.0
7:00 48.8 44.8 49.7
8:00 49.6 48.0 51.8
9:00 50.0 48.1 52.7
10:00 51.0 48.1 55.2
11:00 50.4 49.5 54.1
12 Noon 50.0 48.7 50.9

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1:00 P.M. 48.9 47.6 51.2 Notes

2:00 49.8 48.4 51.0
3.00 49.8 48.8 50.8
4:00 50.0 49.1 50.6
5:00 47.8 45.2 51.2
6:00 46.4 44.0 49.7
7:00 46.4 44.4 50.0
8:00 47.2 46.6 48.9
9:00 48.4 47.2 49.5
10:00 49.2 48.1 50.7
11.00 48.4 47.0 50.8
12 Midnight 47.2 46.4 49.2
1:00 A.M. 47.4 46.8 49.0
2:00 48.8 47.2 51.4
3:00 49.6 49.0 50.6
4:00 51.0 50.5 51.5
5:00 50.5 50.0 51.9

Discussion:
What procedures would you recommend to maintain proper quality control?

VII REVIEW QUESTIONS

1. Explain why the statistical process control is of utmost significance to the
quality ensuring process.
2. What are the types of Control Charts and explain the construction of any one
of them?
3. Highlight the meaning, significance and measurement of process capability.
4. What is DMAIC and DMADV? Explain its steps.
5. Explain the contributions of Bill Smith and explain how it is used in cost
saving.
6. Describe the process of process capability measurement.
7. Explain the role of TPM on product life cycle.
8. Detail the steps in the introduction of TPM in an organization.
9. What is Life Cycle Costing? Using example, demonstrate it.
10. “BPR – a rebirth of scientific management” – Critically examine.
11. Discuss the criticisms and benefits of re-engineering

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Notes VIII REFERENCE BOOKS:

1. Douglas C. Montgomory, “Introduction to Statistical Quality Control”,
Wiley Student Edition, 7th Edition, Wiley India Pvt Limited, 2012.
2. James R. Evans and William M. Lindsay, “The Management and Control
of Quality”, Sixth Edition, Thomson, 2010.
3. Poornima M.Charantimath, “Total Quality Management”, Pearson
Education, 2nd edition, 2012.
4. “Indian standard – quality management systems – Guidelines for performance
Improvement” Fifth Revision, Bureau of Indian standards, New Delhi.

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UNIT IV Notes

LESSON 4 - TOOLS AND TECHNIQUES

FOR QUALITY MANAGEMENT
CONTENTS
L I Learning Objective
II Learning outcome
III Oveview
4.1 Quality Function Development
4.2 House of Quality
4.3 Seven Old Statistical Tools.
4.4. Seven New Management Tools.
4.5. Six Sigma
4.5.1 Six Sigma Concepts
4.5.2 Six Sigma Process
4.5.3 Six Sigma Organisations
4.6. Benchmarking
4.6.1 Types of Benchmarking
4.6.2 Reasons of Benchmarking
4.6.3 Process of Benchmarking
4.7. FMEA
4.7.1 Types of FMEA
4.7.2 Steps / Process of FMEA
4.7.3 Stages of FMEA
4.7.4 FMEA Procedure
4.7.5 Benefits of FMEA
4.8 Poka Yoke
IV Summary
V Keywords
VI Case Study
VII Self-Assessment Questions
VIII Further Readings

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Notes
I LEARNING OBJECTIVES
Upon completion of this unit, you will be able to:
• Build a house of quality
• Appreciate the importance of QFD and the process of deployment
• Use different analytical tools to detect and prevent failure and losses
• Compare the old and new management tools pertaining to Quality
Management.

II LEARNING OUTCOMES
• Explain the different meanings of the quality concept and its influence.
• Describe, distinguish and use the several techniques and quality
management tools.
• Explain and distinguish the normalisation, homologation and certification
activities.
• Identify the elements that are part of the quality measuring process in the
industry.
• Predict the errors in the measuring process, distinguishing its nature and
the root causes.
• Justify whether or not a measuring process fulfils the established quality
requirements.
• Understand and calculate the correction and uncertainty parameters as a
result of an instrument calibration.
• Explain the regulation and the phases of a quality system certification
process.

III OVERVIEW
Quality functions development (QFD) – Benefits, Voice of customer, information
organization, House of quality (HOQ), building a HOQ, QFD process. Failure
mode effect analysis (FMEA) – requirements of reliability, failure rate, FMEA
stages, design, process and documentation. Seven old (statistical) tools. Seven
new management tools. Bench marking and POKA YOKE

INTRODUCTION
To achieve in quality Management, one need to be in possession of various tools
and techniques. To establish a house of quality, we need to have an umbrella like
coverage in the form of quality function deployment. Loss minimization, failure
reduction process reliability improvement are possible to be achieved through
the application of various statistical and management tools –old and new. This

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exercise has to be done by identifying a benchmark and trying hard to surpass Notes
it. This unit deals with Quality Functions Development (QFD), Benefits, Voice
of Customer, Information Organization, House of Quality (HOQ), Building a
HOQ, QFD Process, Failure Mode Effect Analysis (FMEA), Requirements of
reliability, Failure Rate, FMEA stages, design, process and documentation, Taguchi
Techniques – Introduction, Loss function, Parameter and Tolerance Design, Signal
to Noise Ratio,

4.1. QUALITY FUNCTION DEVELOPMENT (QFD)

The average consumer today has a multitude of options available to select from
for similar products and services. Most consumers make their selection based
upon a general perception of quality or value. Consumers typically want “the
most bangs for their buck”.
In order to remain competitive, organizations must determine what is driving the
consumer’s perception of value or quality in a product or service. They must define
which characteristics of the products such as reliability, styling or performance
form the customer’s perception of quality and value.
Many successful organizations gather and integrate the Voice of the Customer
(VOC) into the design and manufacture of their products. They actively design
quality and customer perceived value into their products and services.
These companies are utilizing a structured process to define their customer’s wants
and needs and transforming them into specific product designs and process plans
to produce products that satisfy the customer’s needs. The process or tool they
are using is called Quality Function Development (QFD).

What is quality function Development (QFD)?

Quality Function Development (QFD) is a process and set of tools used to
effectively define customer requirements and convert them into detailed
engineering specifications and plans to produce the products that fulfil those
requirements.
QFD is used to translate customer requirements (or VOC) into measureable design
targets and drive them from the assembly level down through the sub-assembly,
component and production process levels. QFD methodology provides a defined
set of matrices utilized to facilitate this progression.
 QFD was first developed in Japan by Yoji Akao in the late 1960s while
working for Mitsubishi’s shipyard.
 It was later adopted by other companies including Toyota and its supply
chain.
 In the early 1980s, QFD was introduced in the United States mainly by the
big three automotive companies and a few electronics manufacturers.

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Notes  Acceptance and growth of the use of QFD in the US was initially rather slow
but has since gained popularity and is currently being used in manufacturing,
healthcare and service organizations.

BRIEF HISTORY OF QUALITY FUNCTION DEVELOPMENT:

Developed in 1960s Japan, QFD was imported to the United States in the early
1980s and caught on thanks to its popularity and successful track record in the
automotive industry. Copying the model from manufacturers such as Toyota and
Mitsubishi, the “big three” American car makers used QFD to bring customer
centricity to their industry.
Once adopted, QFD shortened design cycles significantly and reduced the total
number of employees required in the design process. Shifting the focus from
bottom line cost analysis to customer satisfaction brought innovations and
increased sales of domestic vehicles after the surge in popularity of Japanese
imports in the 1970s.
Today QFD and the House of Quality can be found in a variety of industries and
are part of the Six Sigma toolbox.

Why implement quality function Development (QFD)?

Effective communication is one of the most important and impactful aspects of
any organization’s success.
QFD methodology effectively communicates customer needs to multiple business
operations throughout the organization including design, quality, manufacturing,
production, marketing and sales.
This effective communication of the Voice of the Customer allows the entire
organization to work together and produce products with high levels of customer
perceived value.
There are several additional benefits to using Quality Function Development:
• Customer Focused: QFD methodology places the emphasis on the wants
and needs of the customer, not on what the company may believe the
customer wants. The Voice of the Customer is translated into technical
design specifications. During the QFD process, design specifications are
driven down from machine level to system, sub-system and component
level requirements. Finally, the design specifications are controlled
throughout the production and assembly processes to assure the customer
needs are met.
• VOC Competitor Analysis: The QFD “House of Quality” tool allows
for direct comparison of how your design or product stacks up to the
competition in meeting the VOC. This quick analysis can be beneficial in
making design decisions that could place you ahead of the pack.

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• Shorter Development Time and Lower Cost: QFD reduces the likelihood Notes
of late design changes by focusing on product features and improvements
based on customer requirements. Effective QFD methodology prevents
valuable project time and resources from being wasted on development
of non-value-added features or functions.
• Structure and Documentation: QFD provides a structured method and
tools for recording decisions made and lessons learned during the product
development process. This knowledge base can serve as a historical record
that can be utilized to aid future projects.
Companies must bring new and improved products to market that meet the
customer’s actual wants and needs while reducing development time. QFD
methodology is for organizations committed to listening to the Voice of the
Customer and meeting their needs.
How to implement quality function Development (QFD)?
The Quality Function Development methodology is a 4-phase process that
encompasses activities throughout the product development cycle. A series of
matrices are utilized at each phase to translate the Voice of the Customer to design
requirements for each system, sub-system and component. The four phases of
QFD are:
1. Product Definition: The Product Definition Phase begins with collection of
VOC and translating the customer wants and needs into product specifications.
It may also involve a competitive analysis to evaluate how effectively the
competitor’s product fulfills the customer wants and needs. The initial design
concept is based on the particular product performance requirements and
specifications.
2. Product Development: During the Product Development Phase, the critical
parts and assemblies are identified. The critical product characteristics
are cascaded down and translated to critical or key part and assembly
characteristics or specifications. The functional requirements or specifications
are then defined for each functional level.
3. Process Development: During the Process Development Phase, the
manufacturing and assembly processes are designed based on product and
component specifications. The process flow is developed and the critical
process characteristics are identified.
4. Process Quality Control: Prior to production launch, the QFD process identifies
critical part and process characteristics. Process parameters are determined
and appropriate process controls are developed and implemented. In addition,
any inspection and test specifications are developed. Full production begins
upon completion of process capability studies during the pilot build.
Effective use of QFD requires team participation and discipline inherent in the
practice of QFD, which has proven to be an excellent team-building experience.

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Notes BENEFITS OF QUALITY FUNCTION DEVELOPMENT :

The benefits of QFD are
1. A systematic way of obtaining information and presenting it.
2. Shorter product development cycle.
3. Considerably reduced start-up costs.
4. Fewer engineering changes.
5. Reduced chance of overnights during design process.
6. An environment of team work.
7. Consensus decision.
8. Everything is preserved in writing.
9. It facilitates identification of the causes of customer complaints and makes
it easier to takes prompt remedial action.
10. It is a useful tool for improving product Quality.
11. It is a useful tool for competitive analysis of product quality.
12. It is stabilizes quality.
13. It cuts down on rejects and rework at the production site.
14. It decreases claims substantially.
15. Marketing benefits are obtained by identifying sales point.
VOICE OF CUSTOMER (VoC):
 Voice of the Customer (VOC) can be defined as the needs, wants and
expectations of the customer, stated and unstated.
 This includes both external and internal customers.
 In addition, VOC is often viewed as a process or procedure for collecting,
documenting and analysing the feedback from the customer to improve a
product or process.
 The VOC process should be proactive and continually refined to effectively
capture constantly changing customer requirements.
 The process should also include methods for effectively sharing and
utilizing this valuable information to effect meaningful change.

Why implement (VOC)?:

Why would any business want to know exactly what current and prospective
customers think about their product or service? What are the benefits of having
up to date relevant data regarding your customer’s wants, needs and expectations?
For just a moment, put yourself in your customer’s shoes. You are looking for a
vendor for a purchased component and company A has something that will work
but it does not meet all your needs or requirements. Company B has exactly the
part you need and it not only meets you needs but exceeds your requirements at

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a reasonable cost. Which vendor will you award the business? Implementing a Notes
solid effective VOC process will enable you to:
• Hear what your customer is trying to tell you. Know what your customers
actually want instead of what you may believe they want.
• Respond to customer needs in a timely manner. By tracking trends in
customer feedback you can anticipate changes, react quicker and bring
new product to market sooner.
• Design and develop a product your customer wants and needs. Avoid costly
design changes.
• Provide the level of quality service that your customer expects.
• Increase sales while also maximizing margins. By knowing the voice of
the customer you can design and deliver what the customer wants, omitting
what is not important to them and avoid over designing the product.

How to implement VOC process?

There are various versions of VOC systems and software packages available and in
use today within different organizations. The particular procedures and tools vary
dependent upon the type of product or service offered and the market conditions.
There are however some basic similarities within the different systems. The system
should start with identifying who the customers are, the methods used to gather
information, utilize it effectively and then maintain the system to keep on top of
constantly changing customer requirements

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Notes Identify
The first step in any VOC process is to identify your customers. Many organizations
concentrate entirely on the end user of the product and service and forget about
other customers. Missed customers are missed opportunities. It is important to
identify all your customers when designing and implementing a VOC system.
Customers may be internal or external to the company.

Internal Customers
Who your internal customers are may depend on the type of organization
and structure. Internal customers can be stakeholders or other leaders of the
organization, the next step in a process or the associates working the particular
process.

External customers
The external customers consist of the dealers or end users of the product or
service. The type of external customer can vary as well. External customers could
be wholesale distributors, retail consumers or manufacturing companies. One
important note; do not only consider your current customers, but also look to the
future. Many New Product Introduction (NPI) projects purpose is to target new
markets and new customers. When introducing new products it is vital that you
properly study the demographics of your target market.

Collect
The next step is to determine the methods used for collection and storage of the
data and the proper sample size. Gathering data from an entire population of users
or customers would be impractical. Therefore, a sample size must be determined
that will accurately reflect the views of the population.

Sample Size
Larger sample sizes generally produce more accurate results, but can be very
costly and difficult to manage. To determine an appropriate sample size requires
an understanding of statistics. Prior to calculating a sample size, you need to
determine some key factors:
• Demographics – Determine the number of people that fit your demographic
or target population. Demographics are the statistical characteristics of
a particular group such as income level, age, or location such as rural
vs. urban populations. Target markets or segments of the population are
regularly established using demographic data.
• Confidence Interval – Also referred to as “Margin of Error”, this is a
percentage that denotes how accurately the samples will be to the true
value of the overall population. The general rule is that the smaller the
margin of error the more accurate the results. Keep in mind that selecting
smaller margins of error require larger sample sizes.

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• Confidence Level – Quantifies the degree of certainty that the sample will Notes
represent the overall population within your selected confidence interval.
For example, selecting a confidence level of 90% indicates that you are
certain that 90% of the data will fall within the selected interval. The most
common intervals used are 90%, 95% or 99%.
• Standard Deviation – The standard of deviation (sigma) indicates the
amount of variation expected within a set of data. The exact value is difficult
to define prior to collection of the data. Therefore, most often this value
is initially set at 0.5. The majority of your data should fall between ± 3
standard deviations, or 3 sigma, from the mean.
• Z-Value – A constant value based on your confidence level. It indicates
the number of standard deviations between any selected value and the
average/mean of the population. The Z value can be manually calculated
but most practitioners locate a table online. For a confidence level of 90
percent, the z value is >1.65.
The proper sample size can now be determined based upon this information.
Collection Methods
Some commonly used tools for collecting customer feedback may include,
but are not limited to, the following:
• Surveys – A survey is one of the most commonly used research tools for
collecting data. A survey may be used to gather information or to obtain the
customers impression / opinion of a particular product or service. Surveys
may be in the form of a questionnaire that the participant fills out or a list
of questions asked in an interview setting. Questionnaires are distributed
via mailers or most often are performed online.
• Dealer Meetings – Some companies utilize a group of dealers to distribute
their products, similar to the automotive industry. Dealers interact with
customers on a daily basis. Regular dealer meetings are a prime opportunity
to gather the Voice of the Customer. Dealer feedback can be a robust
addition to your customer research.
• Focus Groups – Focus groups are generally small groups brought together
to discuss or review a specific product or service. The members of the group
are demographically diverse individuals meant to represent the views of
the whole customer base. Focus groups encourage open discussion instead
of individual responses to formal questions. The moderator documents
the VOC information in the form of notes, audio recordings or video
documentation. The risk involved with only using focus groups is that the
data may consist of personal preferences or beliefs that may not represent
the general population.
• Interviews – Interviews are a more direct and personal form of information
gathering. There are two primary types of interviews commonly used. In

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Notes the Personal Interview, the interviewer works directly with the respondent,
and may ask follow-up questions and document their opinion or impression
of the interviewee and the results. Another type is the Phone Interview,
which allows for quicker information gathering than the personal interview.
Telephone interviews allow for some personal interaction between
the participants and may include follow-up questions. There are a few
disadvantages to the interview process in general. Interviews require a large
investment of time and resources. In addition, the accuracy and skills of
the interviewer introduce additional variables that may affect the quality
of the information.
Once the data has been collected, consider what information you need to store
and how often you need to back it up. In addition, assure that your system has
adequate security measures to prevent hackers from breaking in and stealing any
sensitive data. Furthermore, make sure that the archived data can be easily located.
Establish clear guidelines for labeling, classifying, storage and access to your data.

Analyze
Now that the customer feedback has been collected and stored, a system is required
to manage the complex data, set priorities and make accurate decisions based on
the data. One very popular tool is the Analytical Hierarchy Process (AHP). A
hierarchy is a method of arranging or classifying information or data relative to
its importance or relevance. AHP is effective in addressing complex decisions
involving the comparison of various elements that are difficult to quantify. Using
the hierarchical approach we can structure the information by category and sub-
categories wherein each element is compared by pairs and the criteria is weighted.
The analytical hierarchy practitioner may also utilize a matrix to perform the
pairwise comparison. The different factors are paired and weighted according to
which of the two better meet the requirements or preference of the target market.
By utilizing AHP to organize and prioritize the data, better decisions can be made
based on the Voice of the Customer information.

Integrate
Upon collection and storage of the VOC data, the next step is to translate the
customer wants and needs into product features and technical design specifications.
One of the most effective methods for accomplishing this translation is with Quality
Function Development (QFD). The House of Quality is usually the first matrix
used in the QFD process, which demonstrates the relationship between the VOC
“Whats” (customer wants and needs) and the “Hows” (design specifications)
required to meet the customer’s needs. The matrix is data intensive and allows the
team to translate and capture a large amount of information in one document. The
matrix earned the name House of Quality due to its structure resembling that of
a house. A cross-functional team possessing thorough knowledge of the product,
the voice of the customer, and the company’s capabilities should complete the
matrix. The QFD process allows for integration of the design specifications into the

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machine, system, sub-system and component level requirements. In addition, the Notes
design specifications are used to identify the key design and process characteristics,
which are then monitored and controlled throughout the production and assembly
processes. The design features and specifications derived from the VOC must
be integrated into the entire organization to assure that the customer’s want and
needs are being satisfied.

Maintain
Once the VOC process is established and integrated throughout the organization,
the next step is to assure the information stays up to date and relevant to the
customer’s continuously changing wants and needs. A system must be developed
to regularly review and reassess your VOC data on an ongoing basis to ensure
your service offerings continue to meet or exceed their requirements. There are
several software packages on the market to manage VOC data or it may be done
manually. It does not matter what method you choose to monitor and maintain your
VOC library of data, the important thing is to make certain that the information
is maintained properly. The fresher your information the more likely you are to
keep abreast of your customers’ needs and possibly introduce a ground breaking
new product.

Benefits of QFD
 Improves customer satisfaction
 Defines requirements into basic needs
 Fewer customer complaints
 Reduces implementation time
 Reduction in design changes
 Expensive corrections and redesigns are eliminated
 Promotes teamwork
 Inputs are required from all facets of an organization
 Provides documentation

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Notes  Database serves as a valuable source for future designs

 Increases in market share
 QFD is a communication and planning tool that:
 Promotes better understanding of customer demands
 Facilitates better understanding of design interactions
 Involves manufacturing in the design process
 Breaks down barriers between functions and departments
 Concentrates on design effort
 Minimises the number of later engineering changes
 Introduces new design to the market faster
 Provides better documentation of the design and development process
 Reduces the overall costs of design and manufacture
QFD process provides a structure to help managers to identify both expected
quality andexciting quality and to focus process design and implementation
specifically to meet theseneeds. Expected quality refers to statement of product
traits that customers expect to find in aproduct. These traits usually represent
order qualifiers or order losers. Customers may notappropriate them explicitly,
but failure to meet these specifications cause customerdissatisfaction. In contrast,
exciting quality refers to traits that customers do not expect. Theydo not notice
lack of such traits, but special characteristics can excite them and induce them
tochoose one product over another. In general, excited quality enhances the value
of a product,while expected quality maintains value.

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Notes
4.2 HOUSE OF QUALITY:
House of Quality refers to a well-known process for product development that is
inspired by customer desires for product or process development and anchored by
the capabilities and resources of the organization seeking to meet those desires.
It is a process of listening to customers, translating their desires into a written plan,
prioritizing steps of execution based on what is most important to the customer,
and putting a realistic plan on paper. House of Quality is a part of a larger process
called QFD, which stands for Quality, Function, Development. This represents
quality-monitoring, a focus on the function of execution of a quality plan, and
the application of resources for Development of that plan. While the name, QFD,
does not encapsulate all that QFD covers, it is a name that has been around for
quite some time. It is familiar, so organizations continue to use it.
A house of quality (HOQ) involves collecting and analyzing the “voice of the
customer” and a key component of the Quality Functional Development technique.
It is used to define the relationship between customer desires and the product or
company capabilities.

STEPS:
Step 1: Customer Requirements- “Voice of the Customer”
The first step in a QFD is to determine the market segments and identification of
prospective customers. Then team collects customer requirements for the product
or service and rate on a scale of 1 to 5. With 5 being the most important and 1
being the least. Calculate the relative importance.

Step2: Technical measures

Product requirements or technical characteristics are aligned to the voice of
customer. This step can be quite difficult as it involves people working in groups
to skim out the variable that may affect the customer requirement factors the most.
Parameters should be meaningful, measurable, and global.

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Notes Step 3: Roof / Correlation Matrix

The triangular “roof” matrix of the House of Quality is to identify how the
design requirements interact with each other. It helps the designers in the next
phase of QFD project. The triangular matrix looks like a house with a roof. The
interrelations are rating strong positive as “+ +”, where as strong negative as “-
-“and blank for no interrelation.

Step4: Relationship Matrix

Develop correlation between customer requirements or voice of customer and
design characteristics or technical requirements. Decide the symbols that you
want to use to describe the grades you want. These should be consistent and easy
to understand.
The ranking system use is a set of symbols for strong, medium and weak
relationships. Each of the symbols represents a value of 9 for strong, 3 for medium
and 1 for weak.

Step5: Importance Rating

It is the result of calculating the total sum of each column when multiplied by
the customer importance factor. It helps to determine where to assign the most
resources. Then calculate the percent of importance.
Step 6: Competitive Evaluation

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It helps to understand competitor products to fulfil the customer requirements. It Notes

is also a good idea to ask customers how the product or service rates in relation
to the competition. Use surveys, customer meetings, or focus groups/clinics to
obtain feedback. Measure the satisfaction in 1 to 5 scales. Where 1 being highly
dissatisfied and 5 being highly satisfied.

Identify more specific target values for technical specifications to satisfy the VOC.
This section helps appropriate teams within the origination to develop next-level
QFD.

PRIMARY PURPOSE OF HOUSE OF QUALITY:

Primary Purposes of House of Quality
We’ll now cover some primary purposes of House of Quality
Understand Customer Desires
Many times, customers need outside perspective to discover what they really need
to build their product or process. The goal is to understand customers perhaps even
better that they understand themselves so as to open their eyes to ideal solutions.

Understand Customer Priorities

During the interview stage, get to know customer needs, but then break those
needs down into prioritized parts. For example, if a customer is building drones
for media production, how important is battery life compared to camera quality?
How important is aesthetic compared to quality of the drone body? Weights are
assigned to each quality based on what is most important to the customer. How well
each need is met is ultimately how the customer will judge your solution’s value.

Departmental Buy-In
Often, disagreement or misunderstanding between departments of a customer’s
organization can occur in relation to what is actually needed. Marketing may think
that a drone with trending features is top priority, but engineering may think that
overhaul of a problematic part is top priority. The process helps create a plan that
addresses all true priorities and to which all departments can agree.
Translate Customer Desires Into Goals & Technicalities
This is the heart of the QFD process where the recorded desires of the customer
are ranked by priority and specific process and resource planning takes place.
They are laid out onto a useful diagram labeled the House of Quality.

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Notes Specify Traceable Requirements

Specific requirements for the execution of the customer’s product or process
should be laid out. The how and why questions should be answered in the plan–
how are we meeting the client’s requirements and why are we doing it this way?
The written requirements and should be specific enough that their completion
and success are traceable. One should be able to work forward and backward in
the plan and determine easily whether or not the overall plan is being executed
successfully. For example, if there is a question on why something is done a certain
way, one should be able to trace back to the beginning of the process to the initial
requirement that determined the process needed to meet that requirement.

Provide Structure
It is easy for customers to jump all over the place stating what they desire and
tossing out ideas. But, at the end of the day, your role is to hone in on what they
want and provide a logical, executable, traceable structure to organize their ideas.
Allocate Resources
Whether developing a physical product or creating a process for a customer,
resources are needed to do so. Humans, machines, computers, construction
materials, disposable materials and more must be accounted for. What do we have
available to us and what do the available resources allow us to do? Answering
these questions is a critical part of execution.

BUILDING HOUSE OF QUALITY:

To build the house of quality, basic six steps are performed. House of Quality
Steps are as follows:
1. Identify what customer wants.Identify how the product will satisfy
the customer. It refers to identifying specific product characteristics,
features or attributes and showing how they will satisfy customer wants.
Identify relationships between how’s. A couple of questions, that are to
be answered here: How do our how’s tie together? What is the relationship
between our two or more how’s?
2. Develop importance ratings. It refers to using the customer’s importance
ratings and weights from the relationships in the matrix to compute our
importance ratings.
3. Evaluate competing products or services. The question to be answered
here is: How well do competing products meet customer wants? This
activity is completely based on research.
4. Determine the desirable technical attributes. In this step, our performance
and the competitor’s performance are determined and compared.

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Notes

QUALITY FUNCTION DEVELOPMENT PROCESS:

Quality Function Development is a systematic approach to design based on a
close awareness of customer desires, coupled with the integration of corporate
functional groups. It consists of translating customer desires (for example, the ease
of writing for a pen) into design characteristics (pen ink viscosity, pressure on ball-
point) for each stage of the product development. Quality function Development
(QFD) is a tool that is sometimes referred to as the “voice of the customer,” or
as the “house of quality.”

Phase 1: Product Planning:

Building the House of Quality. Led by the marketing department, Phase 1, or
product planning, is also called The House of Quality. Many organizations only get
through this phase of a QFD process. Phase 1 documents customer requirements,
warranty data, competitive opportunities, product measurements, competing
product measures, and the technical ability of the organization to meet each
customer requirement. Getting good data from the customer in Phase 1 is critical
to the success of the entire QFD process.

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Notes

Phase 2: Product Design:

Phase 2 is led by the engineering department. Product design requires creativity
and innovative team ideas. Product concepts are created during this phase and
part specifications are documented. Parts that are determined to be most important
to meeting customer needs are then deployed into process planning, or Phase 3.

Phase 3: Process Planning:

Process planning comes next and is led by manufacturing engineering. During
process planning, manufacturing processes are a flowchart and process parameters
(or target values) are documented.

Phase 4: Process Control:

And finally, in production planning, performance indicators are created to monitor
the production process, maintenance schedules, and skills training for operators.
Also, in this phase decisions are made as to which process poses the most risk and
controls are put in place to prevent failures. The quality assurance department in
concert with manufacturing leads Phase

After setting the primary design characteristics “hows” from the house of quality
can be converted to as the “whats” of another house that depicts detailed product
design. This process is repeated with a process planning house and then production
planning house. In this way, the voice of the customer is carried through from
design to manufacturing.

4.3. SEVEN OLD STATISTICAL TOOLS:

In 1950, the Japanese Union of Scientists and Engineers (JUSE) invited legendary
#quality guru W. Edwards Deming to go to Japan and train hundreds of Japanese
engineers, managers and scholars in statistical process control. Deming also
delivered a series of lectures to Japanese business managers on the subject, and
during his lectures, he would emphasise the importance of what he called the
“basic tool” that were available to use in quality control.

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Notes
One of the members of the JUSE was Kaoru ishikawa, at the time an associate
professor at the University of Tokyo. Ishikawa had a desire to ‘democratise
quality’: that is to say, he wanted to make quality control comprehensible to all
workers, and inspired by Deming’s lectures, he formalised the Seven Basic Tools
of Quality Control.

Ishikawa believed that 90% of a company’s problems could be improved using

these seven tools, and that with the exception of Control Charts — they could
easily be taught to any member of the organisation. This ease-of-use combined
with their graphical nature makes statistical analysis easier for all.
The seven tools are:
• Stratification.
• Histogram

• Check Sheet.
• Cause and Effect Diagram.
• Pareto Chart.

• Scatter Diagram
• Control chart.

1.Stratification

Stratification analysis is a quality assurance tool used to sort data, objects, and
people into separate and distinct groups. Separating your data using stratification
can help you determine its meaning, revealing patterns that might not otherwise
be visible when it’s been lumped together.

Whether you’re looking at equipment, products, shifts, materials, or even days of

the week, stratification analysis lets you make sense of your data before, during,
and after its collection.
To get the most out of the stratification process, consider which information about
your data’s sources may affect the end results of your data analysis. Make sure to
set up your data collection so that that information is included.

2. Histogram
Quality professionals are often tasked with analyzing and interpreting the behavior
of different groups of data in an effort to manage quality. This is where quality
control tools like the histogram come into play.

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Notes The histogram can help you represent frequency distribution of data clearly and
concisely amongst different groups of a sample, allowing you to quickly and easily
identify areas of improvement within your processes. With a structure similar to
a bar graph, each bar within a histogram represents a group, while the height of
the bar represents the frequency of data within that group.
Histograms are particularly helpful when breaking down the frequency of your
data into categories such as age, days of the week, physical measurements, or any
other category that can be listed in chronological or numerical order.

3. Check sheet (or tally sheet)

Check sheets can be used to collect quantitative or qualitative data. When used to
collect quantitative data, they can be called a tally sheet. A check sheet collects
data in the form of check or tally marks that indicate how many times a particular
value has occurred, allowing you to quickly zero in on defects or errors within
your process or product, defect patterns, and even causes of specific defects.
With its simple setup and easy-to-read graphics, check sheets make it easy to
record preliminary frequency distribution data when measuring out processes.
This particular graphic can be used as a preliminary data collection tool when
creating histograms, bar graphs, and other quality tools.

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4. Cause-and-effect diagram (also known as a fishbone or Ishikawa Notes

diagram)
Introduced by Kaoru Ishikawa, the fishbone diagram helps users identify the
various factors (or causes) leading to an effect, usually depicted as a problem to
be solved. Named for its resemblance to a fishbone, this quality management tool
works by defining a quality-related problem on the right-hand side of the diagram,
with individual root causes and sub causes branching off to its left.
A fishbone diagram’s causes and subcauses are usually grouped into six main
groups, including measurements, materials, personnel, environment, methods,
and machines. These categories can help you identify the probable source of your
problem while keeping your diagram structured and orderly.

5. Pareto chart (80-20 rule)

As a quality control tool, the Pareto chart operates according to the 80-20 rule.
This rule assumes that in any process, 80% of a process’s or system’s problems
are caused by 20% of major factors, often referred to as the “vital few.” The
remaining 20% of problems are caused by 80% of minor factors.
A combination of a bar and line graph, the Pareto chart depicts individual values in
descending order using bars, while the cumulative total is represented by the line.
The goal of the Pareto chart is to highlight the relative importance of a variety of
parameters, allowing you to identify and focus your efforts on the factors with
the biggest impact on a specific part of a process or system.

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Notes

6. Scatter diagram
Out of the seven quality tools, the scatter diagram is most useful in depicting
the relationship between two variables, which is ideal for quality assurance
professionals trying to identify cause and effect relationships.
With dependent values on the diagram’s Y-axis and independent values on the
X-axis, each dot represents a common intersection point. When joined, these
dots can highlight the relationship between the two variables. The stronger the
correlation in your diagram, the stronger the relationship between variables.
Scatter diagrams can prove useful as a quality control tool when used to define
relationships between quality defects and possible causes such as environment,
activity, personnel, and other variables. Once the relationship between a particular
defect and its cause has been established, you can implement focused solutions
with (hopefully) better outcomes.

7. Control chart (also called a Shewhart chart)

Named after Walter A. Shewhart, this quality improvement tool can help
quality assurance professionals determine whether or not a process is stable and
predictable, making it easy for you to identify factors that might lead to variations
or defects.
Control charts use a central line to depict an average or mean, as well as an upper
and lower line to depict upper and lower control limits based on historical data.
By comparing historical data to data collected from your current process, you
can determine whether your current process is controlled or affected by specific

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variations. Notes
Using a control chart can save your organization time and money by predicting
process performance, particularly in terms of what your customer or organization
expects in your final product.

4.4. SEVEN NEW MANAGEMENT TOOLS:

Formal research on the seven new quality tools began in 1972 as part of the
Japanese Society of QC technique development meetings. It took several years
of research before the seven new tools were formalized. The original seven tools
of quality (scatter diagram, flow charts, histogram, etc.) were adequate for data
collection and analysis. However, the new tools allow for more identification,
planning, and coordination in finding a problem solution. The seven new tools,
as written by Japanese authors Mizuno Shigeru (1988) and Asaka Tetsuichi and
Ozeki Kazuo (Tetsuichi, 1990), a
The seven tools we will see are:
• Affinity diagram
• Relations diagram
• Tree diagram
• Matrix diagram
• Matrix data analysis diagram .
• Process decision programme chart
• Arrow diagram
Translating the seven new tools into English provided a better U.S. understanding.
Later, these tools were modified and adapted to the American industry. Goal/
QPC (Brassard, 1989) (Domb, 1994) formed the statistical resource committee

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Notes which modified the seven new QC tools to a similar set of seven management
and planning tools.

1.Affinity Diagram
The purpose of an affinity diagram is to provide a visual representation of grouping
of a large number of ideas or factors or requirements into logical sets of related
items to help one organise action plans in a systematic manner.

Procedure
• The steps in the procedure for preparing an affinity diagram are:
• Decide the subject or the topic
• Generate a large number of ideas through brainstorming
• Decide the number of groups and their titles. Create a card for each group.
Enter the title of the group at the top of the card.
• Distribute all the ideas among the cards. If necessary, create new cards for
additional groups.
• Arrange the cards according to the relationship between the groups.
• Give a name to the affinity diagram.

Applications:
The structure and the procedure for affinity diagram would have shown how
simple the tool is. Its simplicity makes it easy to combine it with other tools and
put it to a wide variety of applications. For instance, it can be combined with a
cause-and-effect diagram or a relations diagram to identify and regroup causes
for a problem or it can be combined with a tree diagram to categorise possible
solutions. Thus, it can assist in problem solving. It can be used to group customer
requirements in a complex product and can help one to design a product with
characteristics and features that would satisfy and delight customers. It can be
used to categorise actions in an implementation plan leading to a rationalised
distribution of responsibility. In fact, the tool can be used to break up any complex
problem or task into smaller more easily manageable bits. Someone has asked a
question - “How do you eat a whale?” which has an obvious answer -” A mouthful
at a time”. Another similar set of a question and an answer is - “How to eat an
elephant - slice by slice”.
Well affinity diagram is a tool that helps to break up a whale into convenient
mouthfuls or an elephant into manageable slices. Its simplicity makes it a very
widely applicable tool.

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Notes

2. Relations Diagram
The purpose of relations diagram is to generate a visual representation of the
relations between an effect and its causes as well as the interrelationship between
the causes in complex problems.

Structure
As mentioned in the opening paragraph of the chapter, the structure of relations
diagram is not very rigid; it is quite flexible. Only thing fixed about the diagram is
a bold bordered rectangle in which the ‘effect’ is written. The causes are entered
in light rectangles and lines are drawn to show relation between the rectangles.
The lines have arrows at one end showing which is the cause and which is the
effect - the arrow always leading from the cause to the effect. The most common
shape the diagram takes has the ‘effect’ at the centre, with immediate causes
surrounding it and secondary and tertiary causes as outer layers.

Procedure
To prepare a relations diagram, there is a need for a large number of causes. No
single individual can generate an exhaustive list of causes.
Hence the tool gives best results when it is used in a group. The group must
brainstorm the subject to get the maximum number of causes.
The steps in the preparation of a relations diagram are:
• Decide the ‘effect’ or the problem for which causes are to be found.
• Write is in the centre of the flip chart or a board and enclose it in a dark
bordered rectangle.

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Notes • Discuss the subject and confirm the ‘effect’.

• Brainstorm to identify the immediate causes for the effect first. Enter these
in rectangles around the central dark rectangle.
• Take care to place causes likely to be related to one another in adjacent
positions.
• It is quite possible that the locations of the causes may have to be changed
as one progresses.
• Hence a white board is preferable to a flip chart for this exercise. If a flip
chart is used, the causes may be written on post-it pads and stuck on the
chart so that their location can be changed easily.
• Connect these immediate causes to the effect by connecting the rectangles
of the causes to that of the effect with a line with an arrow pointing towards
the effect. Explore the cause and effect relationship among the immediate
causes and connect them, keeping in mind that the arrow always points to
an effect
• Taking each of these immediate causes as an effect, brainstorm to find
causes for them one by one.
• The key question for identifying causes is “why ?”. Keep asking the
question till the root causes are identified for the immediate, secondary
and tertiary causes.
• Explore the relationship between all the causes and connect the rectangles
as in step-3. Show as many relations among different causes as possible.
A large number of routes leading to the same root causes provides an
indication that the root cause may be an important contributor to the
problem.
• Brainstorm to find the more important root causes and more prominent
links leading to the effect. Mark these by making the rectangles and the
connecting lines darker.
• If necessary, rearrange the rectangles in such a way that the connecting
lines are short and the diagram compact.
• Provide a suitable title to the diagram.

Applications
Relations diagram can be applied to explore cause and effect relationships,
especially in complex situations where the causes are likely to be mutually related.
The most common use is in problem solving to identify multiple interrelated
causes. The output of the tool is a list of root causes for the problem with some
indication of their relative importance. The output has to be considered as only
an indication of the relative importance of the causes. Data has to be collected
to confirm or reject the conclusions arrived at the end of the session. Priority of

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corrective actions to eliminate the causes should be based on the data collected, Notes
not on output of relations diagram. The output of relations diagram is based on
the perception of the members of the group brainstorming the issue; it needs to be
supported by facts. While the output is important as it points a direction to data
collection efforts, it is no substitute for facts and data.

3. Tree Diagram
Purpose
The purpose of the tree diagram is to explore ways and means to achieve an
objective, develop a list of alternate means to reach the desired situation in a
sequential order and to present them in a visual form.

Procedure
This tool like other tools in the ‘new seven’ is a group tool. A brainstorming
session is necessary to collect a large number of ideas for the means to achieve
the objective. The rules of brainstorming should be observed to get the best results
from the tool.
The steps in the procedure to develop a tree diagram are :
• Identify a high priority problem that needs to be solved at the earliest.
Prepare an objective statement describing the desired situation or the target
solution.
• Decide the appropriate form of the diagram - cascade or tree as well as
direction of flow after a brief discussion. Place the target solution in the
dark rectangle.
• Brainstorm to identify the primary means to achieve the objective. Arrange
them in an appropriate order keeping in mind the likely interrelations
between them and place them in rectangles at the first level.
• For each of the primary means, identify secondary means which would

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Notes be necessary to attain those means. Arrange them in next level boxes.
• Identify tertiary means required to attain each of the secondary means and
place them in a proper order in the next level boxes.
• Continue the process till the group feels that the end of the line has been
reached.
• If a lower level means is required to attain two higher level means, it
may be connected to both. Rearrange the boxes if necessary, to make this
possible. Use of POST-IT pads can make such a rearrangement simple.
• Brainstorm to reach a consensus on the relative importance of the last
level means to priorities action.
Give a suitable title to the diagram. Application The most important application
of the tree diagram is for devising solutions for problems. It helps one to develop
a systematic step by step strategy to achieve an objective. It is also useful in
monitoring the implementation of solutions by taking care of accomplishment
of means at different levels.

4. Matrix Diagram

Purpose
The purpose of a matrix diagram is to explore the existence and the extent of
relations between individual items in two sets of factors or features or characteristics
and express them in a symbolic form that is easy to understand. The purpose for

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which the tool is most frequently used is to understand the relation between Notes
customer expectations as expressed by the customers and product characteristics
as designed, manufactured and tested by the manufacturer.

Procedure
The steps in the procedure to prepare a matrix diagram are :
• Decide the two sets of factors for which relations are required to be clarified.
Call the set of the main factors ‘features’ and the set of factors dependent
on it counterpart ‘characteristics’
• Divide the features into primary, secondary and tertiary features.
• Divide the characteristics into primary, secondary and tertiary
characteristics.
• Place the features vertically on the left hand side of the matrix and
characteristics horizontally on top of the matrix.
• Enter the importance of the features on the column after that for the tertiary
features.
• In the main body of the matrix, place symbols at the squares denoting
the relationship between thefeature and the characteristic meeting at the
intersection. The symbols to be used are : - Strong relationship - Medium
relationship - Weak relationship
• In case there is no relation between the concerned feature and characteristic,
leave the square blank to indicate ‘no relation’. The relationship should be
based on data available with the team or on the
• results of a brainstorming session which must be confirmed by collecting
necessary data.
• Title the diagram suitably. ApplicationsMatrix diagram, being a very simple
table showing relations between individual items in two sets of factors,
can be put to a wide variety of uses.
• The symbolic representation of the relationship makes the diagram so
much easier to understand as compared to a table with a lot of figures. Let
us see some of the possible applications of a matrix diagram.
Matrix diagram can be used to solve problems by arranging data in such a way that
the relations between relevant factors are brought into sharp focus. It can be used
to understand relations between customer satisfaction and product characteristics,
between complaints and product groups, between complaints and geographical
regions, between a product’s performance in the market and promotional inputs
on it and so on.

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Notes

5. Matrix Data Analysis Diagram

Purpose
The purpose of matrix data analysis diagram is to present numerical data about
two sets of factors in a matrix form and analyse it to get numerical output. The
factors most often are products and product characteristics. The purpose then is
to analyse the data on several characteristics for a number of products and use the
information to arrive at optimum values for the characteristics for a new product
or to decide the strong points of a product and use the information for designing
a strategy for the promotion of the product
Procedure
• The procedure for creating a matrix data analysis diagram consists of the
following steps:
• Decide the two factors whose relations are to be analyses.

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• Check the number of individual items in the two factors. Notes

• Prepare a matrix to accommodate all the items of the two factors.
• Enter numerical data in the matrix.
• Give the diagram a suitable title. Applications
The most common application of matrix data analysis diagram is to decide the
desired product characteristics of a new product based on the analysis of product
characteristics of similar products in the market and the intended positioning of
the new product. For instance, the characteristics of a toilet soap for customers
with normal skin would be somewhere in between those for a soap for dry skin
and a soap for oily skin. A cosmetic product for growing children would have
characteristics between those of a baby cosmetic and an adult cosmetic. By
collecting data on the product characteristics of related products and placing them
in a matrix data analysis diagram, one can decide the desired characteristics of the
proposed product depending on target group of customers for the new product.
Analysis of the data can also be used to identify the strongest characteristics of
an existing product to decide its promotional inputs. The tool can also be used to
study the causes of customer complaints. It can also be used to determine process
parameters to achieve desired product characteristics.
The tool can be very useful in compiling data obtained on the analysis of
competitive products with a view to develop a product better than the competition
or to devise a marketing strategy for the product based on its strengths.

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Notes 6. Process Decision Programme Chart Purpose

The purpose of process decision programme chart is to prepare for abnormal
occurrences with low probability which may otherwise be overlooked and to
present the occurrences as well as the necessary countermeasures to guard against
such occurrences in the form of a visual chart. The tool forces one to think of the
possible obstacles in the smooth progress of a process or a project and then find
ways and means to surmount those obstacles to ensure the successful and timely
completion of the process or the project. Thus the tool helps one to prepare a
contingency plan to achieve the objective if
adverse events occur.

Procedure
The steps in the preparation of a process decision programme chart are :
• Prepare a ‘normal’ flowchart of the process with all expected events as
steps in the chart.
• Consider the possibility of the process not going as per the plan due to any
abnormal, though less probable, occurrences.
• Show these occurrences on the flowchart through branching at appropriate
locations.
• Consider how the abnormal occurrence will affect the process and search
for ways and means to counter the effect.
• Show these countermeasures in rectangles connecting the corresponding
abnormal occurrence on one side and the process objective or the goal on
the other.
• Give a suitable title to the diagram.
• Steps 2 and 4 require totally different type of thinking and hence the team
must be prepared to think on appropriate lines. One needs to put on different
‘thinking hats’ while brainstorming steps 2 and 4and the facilitator must
inform all members about it. As suggested by Dr. Edward De Bono in his
book ‘Six Thinking Hats’ the correct thinking hats for steps 2 and 4 are
black and yellow which respectively encourage ‘negative logical’ and
‘positive logical’ thinking.
Applications
The tool has the widest range of applications as it can be used for a range of
activities from simple ones like a game of bridge or reaching railway station or
airport in time to catch a train or a plane to complex processes or projects. In fact if
can be applied to all processes to ensure their success by systematically minimising
the untoward effect of unexpected adverse occurrences. Through the process of
brainstorming for possible adverse occurrences and for measures to counter them,
one assures the success of the process even if such events do occur. The tool can

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be used to prevent problems by identifying opportunities for error and devising Notes
measures to avoid failure. It can be used during the implementation of solutions
for predicting resistance and for planning measures to overcome the resistance.

7. Arrow Diagram
Purpose
The purpose of an arrow diagram is to create a visual presentation of the steps of
a process or tasks necessary to complete a project with special emphasis on the
time taken for these activities. The diagram provides a clear understanding of the
schedule of various steps in the process which helps one to monitor the process
for ensuring its completion on time.

Procedure
The steps for preparing an arrow diagram are:
• List all tasks or activities that need to be accomplished before the
completion of the process or the project.
• Decide which steps are undertaken in series and which steps can be run
in parallel.
• Arrange the activities in a proper sequence.
• Prepare ‘Event Nodes’ at the completion of steps and number them. Where
the process isbifurcating into two or more parallel streams, more lines will
flow from a node and where the parallel streams are merging, two or more
steps will lead to a node.

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Notes • Write the description of the step on top of the line or to the left of the line.
Decide the time required for completing each step and write it under or to
the right of the line.
• Calculate the earliest time to reach an event node for the start of the process.
Where more than one streams are combining, the maximum time taken by
a stream is taken into consideration. This time is entered on the top half of
the rectangle. This time is related to the starting time of the process which
is taken as zero.
• After the time for all event nodes including the completion of the process
or the project is available, one calculates the latest time by which an event
node must be reached. This is done by starting at the time of completion
and going back step by step. The time is entered on the bottom half of the
rectangle. The time indication at all event nodes will appear as :

X Y where X is the earliest time by which the event can be completed and Y is
the latest time by which the event should be completed.
Give a title to the diagram. As the calculation of the time indications is extremely
important in the construction of an arrow diagram it is necessary that we understand
the procedure well. Let us understand the concept through diagram.

4.5. SIX SIGMA

Six Sigma is a quality management methodology used to help businesses improve
current processes, products or services by discovering and eliminating defects.
The goal is to streamline quality control in manufacturing or business processes
so there is little to no variance throughout.
Six Sigma was trademarked by Motorola in 1993, but it references the Greek
letter sigma, which is a statistical symbol that represents a standard deviation.
Motorola used the term because a Six Sigma process is expected to be defect-

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free 99.99966 percent of the time — allowing for 3.4 defective features for every Notes
million opportunities. Motorola initially set this goal for its own manufacturing
operations, but it quickly became a buzzword and widely adopted standard.
Six Sigma is specifically designed to help large organizations with quality
management. In 1998, Jack Welch, CEO of GE, helped thrust Six Sigma into
the limelight by donating upwards of $1 million as a thank you to the company,
recognizing how Six Sigma positively impacted GE’s operations and promoting
the process for large organizations. After that, Fortune 500 companies followed
suit and Six Sigma has been popular with large organizations ever since.

4.5.1 CONCEPTS OF SIX SIGMA

 6σ is used for eliminating waste and inefficiency in the process thereby
increasing customer satisfaction.
 Each participant in the 6σ team has defined roles and responsibilities.
 6σ is a data-driven concept and needs the accurate collection of data for
the analysis
 It is a business-driven and multi-dimensional concept for achieving the
following,
 Improved processes
 Defects reduction
 Improved productivity
 Reduced process variability
 Costs reduction
 Reducing the time for the products or services
 Improved profits
 Improved customer satisfaction levels
 High-Quality output - As per the customer expectations.
 Defects reduction - Defects per million opportunities (DPMO), is one
the key concept of 6σ to reduce the level of defects systematically
and statistically.
 Reduce Variations in the process - Reduce the variations in the process
by improving the processes and outputs.
 Process Capability - Calculation of the Cp and Cpk factor for the
process capabilities
 Design for 6σ (DFSS) - This is used for new processes that are newly
designed.
 Stable Operations - To make the operations stable, repetitive,
consistent, predictive, and adaptable.

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Notes  DMAIC - This stands of Define, Measure, Analyze, Improve, and

Control. This is done statistically and is a data-driven approach

4.5.2 SIX SIGMA PROCESS

 Six Sigma projects follow two project methodologies inspired by
Deming’s Plan-Do Check-Act Cycle.
 These methodologies, composed of five phases each, bear the acronyms
DMAIC and DMADV
DEFINE MEASURE ANALYZE IMPROVE CONTROL (DMAIC)
Define the problem, improvement activity, opportunity for improvement, the
project goals, and customer (internal and external) requirements.
• Project charter to define the focus, scope, direction, and motivation for the
improvement team
• Voice of the customer to understand feedback from current and future
customers indicating offerings that satisfy, delight, and dissatisfy them
• Value stream map to provide an overview of an entire process, starting and
finishing at the customer, and analyzing what is required to meet customer
needs

Measure process performance.

• Process map for recording the activities performed as part of a process
• Capability analysis to assess the ability of a process to meet specifications
• Pareto chart to analyze the frequency of problems or causes
Analyze the process to determine root causes of variation and poor performance
(defects).
• Root cause analysis (RCA) to uncover causes
• Failure mode and effects analysis (FMEA) for identifying possible product,
service, and process failures
• Multi-vari chart to detect different types of variation within a process

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Improve process performance by addressing and eliminating the root causes. Notes
• Design of experiments (DOE) to solve problems from complex processes
or systems where there are many factors influencing the outcome and
where it is impossible to isolate one factor or variable from the others
• Kaizen event to introduce rapid change by focusing on a narrow project
and using the ideas and motivation of the people who do the work
Control the improved process and future process performance.
• Quality control plan to document what is needed to keep an improved
process at its current level
• Statistical process control (SPC) for monitoring process behaviour
• 5S to create a workplace suited for visual control
• Mistake proofing (poka-yoke) to make errors impossible or immediately
detectable.

DEFINE MEASURE ANALYZE DESIGN VERIFY(DMADV)

Define
Project leaders identify wants and needs believed to be considered most important
to customers. Wants and needs are identified through the historical information,
customer feedback, and other information sources.
• Teams are assembled to drive the process
• Metrics and other tests are developed in alignment with customer
information
Measure
The second part of the process is to use the defined metrics to collect data and
record specifications in a way that can be utilized to help drive the rest of the
process.
• All the processes needed to successfully manufacture the product or service
are assigned metrics for later evaluation
• Technology teams test the metrics and then apply them

Analyze
The result of the manufacturing process (i.e. finished product or service) is tested
by internal teams to create a baseline for improvement.
• Leaders use data to identify areas of adjustment within the processes that
will deliver improvement to either the quality or manufacturing process
of a finished product or service
• Teams set final processes in place and make adjustments as needed

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Notes Design
The results of internal tests are compared with customer wants and needs. Any
additional adjustments needed are made.
• The improved manufacturing process is tested and test groups of customers
provide feedback before the final product or service is widely released
Verify
The last stage in the methodology is continuous. While the product or service is
being released and customer reviews are coming in, the processes may be adjusted.
• Metrics are further developed to keep track of continuous customer
feedback on the product or service
• New data may lead to other changes that need to be addressed, so the initial
process may lead to new applications of DMADV in subsequent areas
The applications of these methodologies are generally rolled out over the course
of many months or even years. The end result is a product or service that is
completely aligned with customer expectations, wants and needs.

4.5.3 SIX SIGMA ORGANISATION CONSISTS OF:

• Quality Council / Apex Council
• Sponsor • Champion
• Master Black Belts
• Black Belts
• Green Belts
• Team members

EXECUTIVE LEADERSHIP
Includes the CEO and other members of top management. They are responsible
for setting up a vision for Six Sigma implementation. They also empower the other

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role holders with the freedom and resources to explore new ideas for breakthrough Notes
improvements.

CHAMPIONS
Take responsibility for Six Sigma implementation across the organization in an
integrated manner. The Executive Leadership draws them from upper management.
Champions also act as mentor’s to Black Belts.

MASTER BLACK BELTS

Identified by champions, act as in-house coaches on Six Sigma. They devote
100% of their time to Six Sigma. They assist champions and guide Black Belts
and Green Belts. Apart from statistical tasks, they spend their time on ensuring
consistent application of Six Sigma across various functions and departments.
The “Master Black Belts” Should have completed the Black Belt Certification
and monitored at least 15 or so projects to completion.

BLACK BELTS
Operate under Master Black Belts to apply Six Sigma methodology to specific
projects. They devote 100% of their time to Six Sigma. They primarily focus on
Six Sigma project execution, whereas Champions and Master Black Belts focus
on identifying projects/functions for Six Sigma.
The “ Black Belt” should have completed the Black Belt certification and
monitored four projects to successful completion

GREEN BELTS
Are the employees who take up Six Sigma implementation along with their other
job responsibilities, operating under the guidance of Black Belts. Green belts are
similar to black belts, but they do not have a full-time role. • They are the project
heads or process owners. They execute six sigma projects as part of their normal job
GREEN BELTS: The “Green belts” should have completed the Green Belt
certification and completed one process improvement project successfully. Some
organizations use additional belt colors, such as Yellow Belts, for employees that
have basic training in Six Sigma tools and generally participate in projects and
‘white belts’ for those locally trained in the concepts but do not participate in the
project team.

4.6 BENCHMARKING
Benchmarking is defined as the process of identifying, understanding, and adapting
outstanding practices and processes from organisations anywhere in the world
to an organisation to improve its performance. Benchmarking is a continuous
improvement tool

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Notes OBJECTIVES OF BENCHMARKING

• Defining benchmarking and understanding its need
• Understanding the process of benchmarking
• Identifying the critical factors to success
• Understanding the current performance
• Planning the benchmarking exercise
• Studying and analyzing the results
• Understanding limitations and pitfalls.

4. 6.1 TYPES OF BENCHMARKING

1) Process benchmarking:
The initiating firm focuses its observation and investigation of business processes
with a goal of identifying and observing the best practices from one or more
benchmark firms. Activity analysis will be required where the objective is to
benchmark cost and efficiency; increasingly applied to back-office processes
where outsourcing may be a consideration.

2) Financial benchmarking
Performing a financial analysis and comparing the results in an effort to assess
your overall competitiveness.
3)Performance benchmarking
Allows the initiator firm to assess their competitive position by comparing products
and services with those of target firms.
4) Product benchmarking
The process of designing new products or upgrades to current ones. This process
can sometimes involve reverse engineering which is taking apart competitors
products to find strengths and weaknesses.
5)Strategic benchmarking
Involves observing how others compete. This type is usually not industry specific
meaning it is best to look at other industries.
6)Functional benchmarking
A company will focus its benchmarking on a single function in order to improve the
operation of that particular function. Complex functions such as Human Resources,
Finance and Accounting and Information and Communication Technology are
unlikely to be directly comparable in cost and efficiency terms and may need to
be disaggregated into processes to make valid comparison.

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Notes
4.6.2 Reasons to Benchmark
Benchmarking is a tool to achieve business and competitive objectives. It is
powerful and extremely effective when used for the right reasons and aligned
with organization strategy. Some of the reasons are:
• Benchmarking can inspire managers (and organizations) to compete.
• Benchmarking allows goals to be set objectively, based on external
information.
• Benchmarking partners provide a working model of an improved process,
which reduces some of the planning, testing, and prototyping effort. As
the old saying goes, Why reinvent the wheel?
• Benchmarking enhances innovation by requiring organizations to
constantly scan the external environment and to use the information
obtained to improve the process.

4.6.3 PROCESS OF BENCHMARKING

Process Organizations that benchmark, adapt the process to best fit their own
needs and culture. Although the number of steps in the process may vary from
organization to organization, the following six steps contain the core techniques.
• Decide what to benchmark.
• Understand current performance.
• Plan.
• Study others.
• Learn from the data.
• Use the findings.

Deciding What to Benchmark

Benchmarking can be applied to virtually any business or production process.
Improvement to best-in-class levels in some areas will contribute greatly to
market and financial success, whereas improvement in other areas will have no
significant impact. Most organizations have a strategy that defines how the firm
wants to position itself and compete in the marketplace. •
Some other questions that can be raised to decide high impact areas to benchmark
are:
• Which processes are causing the most trouble?
• Which processes contribute most to customer satisfaction and which are
not performing up to expectations?
• What are the competitive pressures impacting the organization the most?
• What processes or functions have the most potential for differentiating our
organization from the competition?

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Notes In deciding what to benchmark, it is best not to choose too large a scope.
Pareto analysis can be a helpful technique for deciding what processes to
investigate.
Understanding Current Performance
To compare practices to outside benchmarks, it is first necessary to thoroughly
understand and document the current process. It is essential that the organization’s
performance is well understood.
• Several techniques, such as flow diagrams and cause and-effect diagrams
can be used.
• When documenting the process, it is important to quantify it
• Special care should be taken when using accounting information.
Most accounting systems were developed to satisfy external reporting
requirements to the tax and regulatory authorities
Planning
The Benchmarking Team should do planning considering following:
• What type of benchmarking to perform: internal, competitive, and process.
• What type of data are to be collected – the method of data collection.
• Candidates to serve as the benchmark to be identified. Identifying the best
firms to find a benchmark is a research project. – timetables for each of
the benchmarking tasks : Techniques like Gant Chart, PERT, etc. can be
effectively used
• The desired output from the study

Studying Others
Benchmarking studies look for either description of how best-in-class processes
are practiced or the measurable results of these practices. For this purpose, internal
sources, data in the public domain, original research, or most likely a combination
of sources are used.
Three techniques for conducting original research are:
• Questionnaires: Questionnaires are particularly useful to ensure respondent
anonymity and confidentiality, when data are desired from many external
organizations and when using a third party to collect information.
• Site visits: Site visits provide the opportunity to see processes in action
and for face-to-face contact with best-in-class operators. Site visits usually
involve a tour of the operation or plant followed by a discussion period.
• Focus groups: Focus groups are simply panels of benchmarking partners
brought together to discuss areas of mutual interest. Most often the panels
are comprised of people who have some previous joint benchmarking
activity.

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Learning from the Data Notes

Benchmarking studies can reveal three different outcomes.
• External processes may be significantly better than internal processes (a
negative gap). Negative gaps call for a major improvement effort.
• Process performance may be approximately equal (parity).
• The internal process may be better than that found in external organizations
(positive gap). The finding of a positive gap should result in recognition
for the internal process.

Following steps should be taken in in case of negative gaps

• Identifiable benchmark gaps must be described and quantified.
• Once best-in-class practices are described and understood, key process
measures should be quantified.
• When best-in-class processes have been described and quantified, additional
analysis is necessary to determine the root causes of the gaps

Using the Findings

When a benchmarking study reveals a negative gap in performance, the objective
is to change the process to close the gap.
The findings must translate to goals and objectives, and action plans must be
developed to implement new processes.
Process changes are likely to affect upstream and downstream operations as well
as suppliers and customers. Therefore, senior management has to know the basis
for and payoff of new goals and objectives in order to support the change.
These changes have to be considered and incorporated into the strategic planning
process. When acceptance is gained, new goals and objectives are set based on
the benchmark findings
The generic steps for the development and execution of action plans are:
• Specify tasks.
• Sequence tasks.
• Determine resource needs.
• Establish task schedule.
• Assign responsibility for each task.
• Describe expected results.
• Specify methods for monitoring results.

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Notes 4.7. FMEA (Failure Mode Effect Analysis)

• FMEA also known as risk analysis, is a preventive measure to systematically
display the causes, effects, and possible actions regarding observed failures.
• The main objective of FMEA is to anticipate failures and prevent them
from occurring. FMEA prioritizes failures and attempts to eliminate their
causes.
• FMEA is a engineering technique used to define, identify and eliminate
known and / or potential failures, problems, errors which occur in the
system, design, process and service “ before they reach the customer”.
• FMEA is a “before the event” action and is done when existing systems/
products/ processes are changed or redesigned.
• FMEA is a never ending process and it is a improvement tool

4.7.1 TYPES OF FMEA

Design-FMEA
The primary objective of a Design-FMEA is to uncover potential failures
associated with the product design that could cause:
• Product malfunctions
• Shortened product life
• Safety hazards while using the product
Design-FMEAs should be used throughout the design process – from preliminary
design until the product goes into production.

Process-FMEA
Process-FMEAs uncover potential failures that can:
• Impact product quality
• Reduce process reliability
• Cause customer dissatisfaction
• Create safety or environmental hazards
Ideally, Process-FMEAs should be conducted prior to start-up of a new process,
but they can be conducted on existing processes as well.

System-FMEA
System-FMEAs (SFMEAs) are used to analyze a compilation of subsystems.
The focus of SFMEAs is on system-related deficiencies such as: Integration,
interactions, interfaces between subsystems; Interactions with the immediate or
adjoining surroundings; Interactions with workers; system safety considerations.

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Machinery FMEA Notes

Machinery-FMEAs (MFMEAs) are used to assess and increase reliability of the
machinery. MFMEAs can lead to the incorporation of failure prevention measures,
automated fail-safe shutdown techniques to minimize either equipment damage
or product defects and the reduction of both planned and unplanned downtime.

Software FMEA
Software-FMEAs (SW-FMEAs) study the programming logic that goes into
generating reports or controls associated processes. A Software-FMEA can be
conducted on software under development or existing software already in use.

Service FMEA
A Service-FMEA is conducted on transactions. Since a transaction is actually a
process, PFMEA techniques are used. Obviously, some of the rating criteria for
Severity and Detection must be customized so that it applies to transactions.

Concept FMEA
It is formulated in the very early stages in the lifecycle of a product or a process
when they are still at a conceptual stage. It is done at a system or sub-system level
before the key requirements have been decided. It targets the potential failure
modes of the factors under consideration or proposed stage. Concept FMEA helps
in identifying the factors that can be included in a product or process. It often acts
as a precursor to the Design and Process FMEA.

4.7.2 STEPS OR PROCESS OF FMEA

Step 1 Review the process or product
With the team, clearly define the subject of the FMEA study. What is and is not
included. Discuss the basic features, assembly, materials, construction, and desired
functions.

Step 2 Brainstorm potential failure modes

What could go wrong?
This can be a lot of fun. Use a variety of brainstorm techniques to get as broad
a set of ideas as possible. A good technique is to individually create ideas the
collate them using affinity grouping. Mix up the process with live brainstorming,
anchoring, and focused concerns (i.e. high temperature, user abuse, etc).
For most products, you may want to focus on one function or feature at a time.

Step 3 List potential effects of each failure mode

What could happen if the failure occurs?
Consider the possible failures and imagine what could then happen to the
surrounding environment and people.

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Notes For example, if a staircase handrail fails to provide support, it may result in the
effect of a staircase falling injury. Or, it may result in the closing of the staircase
for repair. Or, it may require a maintenance action to re-anchor the handrail.

Step 4 Assign a severity ranking for each effect

For each effect (consequence) provide a ranking score. Common scales include
3, 5, or 10 points. I often start with 10 point scale and adjust depending on the
team and nature of the study.
Common practice is to assign 9 or 10 for those effects that cause injury or death,
or major damage to its surroundings.
Document the scale actually used so others can interpret the study results properly.

Step 5 Assign an occurrence ranking for each failure mode

How often will the failure mode occur?
The worksheet includes a column of causes, which may help the team judge the
relative frequency of occurrence of failure modes. Keep in mind that a failure
mode may have many potential causes.

Step 6 Assign a detection ranking for each failure mode and/or effect
Detection is a bit different in ranking then severity or occurrence. A high score
means the effect occurs without warning. It is not detectable.
Detection can include one or both of the following methods for alerting of potential
failure.
During product development and manufacturing can we find the defect that would
lead to a failure? Can we find the problem before it is shipped?
During normal use does the product provide some means to detect an upcoming
failure?
I use the example of car brakes to illustrate. During design and manufacture, we
can test the brake assembly for braking force. If insufficient, we can redesign or
adjust the brake assembly before installation in a vehicle.
One failure mechanisms that leads to brake failure is the wearing away of the
brake pad. Therefore, the insertion of a piece of metal that creates a warning sound
before the brake pads have worn too far, alerts the vehicle operator to replace the
brake pads before brake failure occurs.

Step 7 Calculate the risk priority number for each effect

Just a bit of math. Multiple the severity, occurrence, and detection scores together
to find the RPN value.
Items that high dire consequences (high severity), occur often and provide no
warning result in the highest RPN numbers relative to other potential failures.

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Step 8 Prioritize the failure modes for action Notes

I recommend a three-step process here.
Address the severity 9 and 10 rankings as they are related to safety.
Review the prioritized ranks for groups of failure modes that one ‘fix’ (redesign,
evaluation, or process improvement) may address. The RPNs of the individual
lines may not be the topped ranked value, yet collectively the action may provide
significant risk reduction.
Address the highest remaining RPNs as the represent the remaining risk to the
product working as expected.
No team that I know of addresses every potential failure. It is a balance of safety,
functionality, customer expectation, and resources.
Step 9 Take action to eliminate or reduce the high-risk failure modes
Assign action items. These may include gathering information, conducting
experiments, considering design or process improvements, adding or removing
functions, etc.
The idea is to do something with the study. The prioritized list provides a guidance
document that the entire team can use to focus on the highest risk areas first.

Step 10 Calculate the resulting RPN as the failure modes are reduced or
eliminated
Document the changes to the product. Ideally, the results of completed actions
will reduce the risk.
Be sure to consider new information and function and recalculate. FMEA is a
process and as the program evolves and grows so should the FMEA. It’s a tool,
that helps the team address risks. Used as such it provides value.

4.7.3 STAGES OF FMEA

• STAGE 1: Specifying Possibilities
• STAGE 2: Quantifying Risk
• STAGE 3: Correcting High Risk causes
• STAGE 4: Re-evaluation of Risk

STAGES OF FMEA
STAGE 1: SPECIFYING POSSIBILITIES
• Functions
• Possible Failure Modes
• Root Causes
• Effects

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Notes • Detection/Prevention

STAGE 2: QUANTIFYING RISK:

• Probability of Cause
• Severity of Effect
• Effectiveness of Control to Prevent cause
• Risk Priority Number

STAGE 3 : CORRECTING HIGH RISK CAUSES-

• Prioritizing Work
• Detailing Action
• Assigning Action Responsibility
• Check Points on completion

STAGE 4: RE-EVALUATION OF RISK:

• Recalculation of Risk Priority Number

4.7.4 FMEA PROCEDURE

1. Describe the product / process and its function.
2. Create a block diagram of the product / process.
3. Complete the header of the FMEA form worksheet.
4. List the Product / Process functions.
5. Identify failure modes
6. Describe the potential failure effects
a. Establish a numerical ranking for the severity (S) of the effect
b. 7.1A Common Industry standard scale uses 1 to represent no effect
and 10 to indicate very serious effect.
c. This numerical ranking enables the engineer to prioritize the failures
and address the real big issues first.
7. Class the column.
8. Identify the Potential causes / Mechanism of Failures.
a. A Failure cause is identified as a design weakness that may result in a
failure. The potential cause for each failure mode should be identified and
documented
b. The causes should be listed in technical terms and not in terms of symptoms.
9. Enter the Probability factor
10. Occurrence (O) is the chance that one of the specific causes/ mechanisms will
occur. A numerical weight should be assigned to each cause that indicates
how likely that cause is (Probability of the Cause Causing).

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a. A common industry standard scale uses 1 to represent not likely and 10 to Notes
indicate inevitable.
b. A numerical weight should be assigned to each cause that indicates how
likely that cause is (Probability of the Cause Causing).
11. Identify Current Controls ( Design or Process).
12. Determine the likelihood of Detection (D).
13. Detection (D) is an assessment of the likelihood that the current controls will
detect the cause of the failure mode or the failure mode itself.
a. The likelihood of detection is also based on a 1 to 10 scale, with 1 being the
certain of detection and 10 being the absolute uncertainty of detection,
14. Review Risk Priority Number
a. (RPN) Risk Priority Number (RPN) = Severity * Occurrence * Detection
RPN = (S) * (O) * (D)
b. The RPN is used to prioritize items that require additional quality planning
or actionDetermine the recommended actions
15. Assign responsibility and a target completion date for these actions.
16. Indicate the actions taken
17. Update the FMEA, As the design or process changes, the assessment changes
or new information becomes known.

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Notes

4.7.5 BENEFITS OF FMEA

• Improve product / process reliability and quality.
• Increase customer satisfaction.
• Early identification and elimination of potential product / process failure
modes.
• Prioritize product / process deficiencies.
• Capture engineering / organization knowledge.
• Document and track the actions taken to reduce risk.
• Provide focus for improved testing and development.
• Minimize late changes and associated cost.
• Act as catalyst for teamwork and idea exchange between functions

4.8. POKA-YOKE (MISTAKE PROOFING)

Also called: poka-yoke, fail-safing. Mistake proofing, or its Japanese equivalent
poka-yoke (pronounced PO-ka yo-KAY), is the use of any automatic device or
method that either makes it impossible for an error to occur or makes the error
immediately obvious once it has occurred. It is a common process analysis tool.

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WHEN TO USE MISTAKE PROOFING? Notes

• When a process step has been identified where human error can cause
mistakes or defects to occur, especially in processes that rely on the
worker’s attention, skill, or experience
• In a service process, where the customer can make an error which affects
the output
• At a hand-off step in a process, when output (or for service processes, the
customer) is transferred to another work
• When a minor error early in the process causes major problems later in
the process
• When the consequences of an error are expensive or dangerous

MISTAKE PROOFING PROCEDURE

1. Obtain or create a flowchart of the process. Review each step, thinking about
where and when human errors are likely to occur.
2. For each potential error, work back through the process to find its source.
3. For each error, think of potential ways to make it impossible for the error to
occur. Consider:
 Elimination: eliminating the step that causes the error
 Replacement: replacing the step with an error-proof one.
 Facilitation: making the correct action far easier than the error.
4. If you cannot make it impossible for the error to occur, think of ways to
detect the error and minimize its effects. Consider inspection methods, setting
functions, and regulatory functions expanded on below.
5. Choose the best mistake-proofing method or device for each error. Test it,
then implement it. Three kinds of inspection methods provide rapid feedback:
 Successive inspection is done at the next step of the process by the next
worker.
 Self-inspection means workers check their own work immediately after
doing it.
 Source inspection checks, before the process step takes place, that
conditions are correct. Often it’s automatic and keeps the process from
proceeding until conditions are right.

SETTING AND REGULATORY FUNCTIONS

Setting functions are the methods by which a process parameter or product attribute
is inspected for errors:
• The contact or physical method checks a physical characteristic such as
diameter or temperature, often using a sensor.

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Notes • The motion-step or sequencing method checks the process sequence to

make sure steps are done in order.
• The fixed-value or grouping and counting method counts repetitions or
parts, or it weighs an item to ensure completeness.
• A fourth setting function is sometimes added, information enhancement,
which makes sure information is available and perceivable when and where
required.
Regulatory functions are signals that alert the workers that an error has occurred
• Warning functions are bells, buzzers, lights, and other sensory signals.
Consider using color-coding, shapes, symbols, and distinctive sounds.
• Control functions prevent the process from proceeding until the error is
corrected (if the error has already taken place) or conditions are correct (if
the inspection was a source inspection and the error has not yet occurred).

Benefits of poka-yoke
Some of the important benefits experienced by poka yoke are as follows:
• Improved productivity
• Reduced inspection time
• Poka yoke is the fastest way to zero defects
• It acts as a key enabler for efficient manufacturing
• It virtually eliminates scrap, rework and repair
• The cost of quality control using mistake-proofing is substantially less
expensive than traditional alternatives
• Minimized inventory
• Increased customer satisfaction and customer loyalty

IV SUMMARY
Many tools and techniques are developed over time to manage quality in various
industries. This is due to the fact that the nature and character varies from one to
another. Development of quality functions in line with customer expectations are
elaborated in this unit. The information collected for various purposes have to be
judiciously used by establishing a logical relationship between them. The House
of Quality is presented in a simpler way for better understanding. The quality
function deployment is extensively deliberated right from thinking stage. The
Failure Mode Effect Analysis, its, evolution, benefits, types and categories along
with its application are presented. The FMEA design process, the steps involved
in them are presented by using examples. Bath Tub Curve is demonstrated and
the reliability concepts are deliberated in detail. Using illustrations, the Taguchi’s

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Loss Function, its applications, the tolerance design are dealt with. The seven Notes
tools of quality – Ishikawa diagram, Pareto Chart, Check Sheet, Control Chart,
Flow Chart, Histogram and Scatter Diagrams are deliberated using examples.
The seven new management tools viz. Affinity Diagram, Relations Diagram, Tree
Diagram, Matrix Diagram, Matrix Data Analysis, Arrow Diagram and Process
Decision Program Chart are also presented with illustrations.

V KEY WORDS
FEMA, Benchmarking, Poka Yoke

VI CASE STUDY: Poka Yoke model for an

Automobile company
Naveen Scott was running an established automobile manufacturing business.
The firm manufactured family cars under the trade name ‘Scotto’ and commercial
vehicles ‘Motto’. The vehicles were known for their quality and tradition.Changes
in government policies brought in multinationals. A competitor to ‘Scotto’ entered
the business with tie-ups with multinationals. The firm with its brand of ‘Eskimo’
flooded the market with small cars for a nucleus family, which was five times
lower in price than ‘Scotto’. ‘Eskimo’ also came in from a quality certified house
since this was insisted by the multinational.
Naneen found that ‘Eskimo’ was taking away a major share of his family-car
market. Naveen wanted to use his company’s niche on quality and tradition. He
called for a meeting of the managers and briefed them on the market situation. He
said the company would have to obtain either the C11 quality award or Peacock
award for quality in two years time. The top officials put their heads together and
came out with a vision ‘market leadership through quality’. They stressed the need
to bring in quality into the process, which would ensure product quality. Naveen
in all meetings kept stressing that total quality management is a never ending
process. It is a process of continuous improvement of continuously questioning
the way you do things, and of continuously re-evaluating the market, customers
needs and work process and procedures. It is a process if done properly would
continuously renew itself.
Training was focused so that everyone in the organization is aware and come in
unison towards the management’s vision. Top manager were first trained on TQM.
It was their responsibility to train their subordinates who in turn was asked to train
their immediate juniors. Over a period of three months the entire organization
was reared towards TQM.The organization started bringing in improvisation in
the commercial vehicle segment. There was a new fleet of vehicles. The design
was made using the feedback from their existing customers. Some of the vehicles
were so designed that they could also be used as a family car. The family car
‘Scotto’ continued in the market. Another mini car was attached to the family

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Notes cars category called ‘Flash’. ‘Flash’ was brought in to compete with ‘Eskimo’ in
the mini car category. The entire team had worked towards the vision and was
waiting for the launch of the new breed of commercial vehicles and family cars
in the national auto fair. A quality consultant was approached and was asked how
to proceed further and how to launch the products.There was a 200% price hike
announced by ‘Eskimo’. The original price seemed to be an introductory offer.

Discuss:
1. The new set of vehicles have been designed considering the existing
customers feedback. Do you feel it is sufficient in the present scenario?
What will be your suggestions?
2. As the quality consultant what will be your recommendations?
3. How “Pokayoke” can be used in this scenario?

VII REVIEW QUESTIONS

1. Expalin the role of the customer in ensuring quality in an organization.
2. What is House of Quality? Explain the building process.
3. Explain how the quality function is deployed in organization without
hazzles.
4. What is FEMA? Explain the process of analyzing failures.
5. Discuss the complementary nature of reliability and failures using examples.
6. Explain the parameter and tolerance of design methodology in Taguchi
technique.
7. Compare and contrast the old and new management tools? Give examples.
8. Detail how benchmarking is arrived at. How the concept of Poka yoke is
used in this

VIII REFEENCE BOOKS

1. Douglas C. Montgomory, “Introduction to Statistical Quality Control”,
Wiley Student Edition, 7th Edition, Wiley India Pvt Limited, 2012.
2. James R. Evans and William M. Lindsay, “The Management and Control
of Quality”, Sixth Edition, Thomson, 2010.
3. Poornima M.Charantimath, “Total Quality Management”, Pearson
Education, 2nd edition, 2012.
4. “Indian standard – quality management systems – Guidelines for
performance Improvement” Fifth Revision, Bureau of Indian standards,
New Delhi.

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UNIT V Notes

LESSON 5 - QUALITY SYSTEMS:

ORGANISING AND IMPLEMENTATION

CONTENT
I Learning Objectives
II Learning outcome
III Overview
Introduction
5.1 ISO 9004: 2000
5.2 Quality Management Systems
5.3 Guidelines for Performance Improvements
5.4 Quality Audits
5.5 TQM Culture
5.6 Leadership
5.7 Quality Council
5.8 Employee Involvement
5.9 Motivation
5.10 Empowerment
5.11 Recognition and Reward
5.12 ISO9000FamilyofStandards
5.13 Implementation ofQualitySystems
IV Summary
V Key Words
VI Case Study
VII Review Questions
VIII Reference Notes

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Notes
I LEARNINGOBJECTIVES:
Uponcompletionofthisunit,youwillbeableto:
• Classifythequalitysystems
• Developand organizeQualityManagement Systems
• Handlechangemanagementonculture
• Focusingonallthestakeholders
• Applylatest developmentsinICT for ensuringqualityin organization

II LEARNING OUTCOMES
• Evaluate the principles of quality management and to explain how these
principles can be applied within quality management systems.
• Identify the key aspects of the quality improvement cycle and to select and
use appropriate tools and techniques for controlling, improving and measuring
quality.
• Critically appraise the organisational, communication and teamwork
requirements for effective quality management
• Critically analyse the strategic issues in quality management, including current
issues and developments, and to devise and evaluate quality implementation
plans

III OVERVIEW
ISO 9004:2000 – quality management systems – guidelines for performance
improvements. Quality Audits. TQM culture, Leadership – quality council,
employee involvement, motivation, empowerment, recognition and reward.

INTRODUCTION
Standards give the professional a clarity of achievability. The Quality Management
System has to engulf the organization so as to achieve Total Quality Management.
Involvement of everyone-employee, leader and other stakeholders in a positive
way will bring in success. To achieve this, the use of latest technologies like
Computers, Telecommunication have become part of system organization and
implementation process. This unit deals with Introduction to IS / ISO 9004 : 2000,
Quality Management Systems, Guidelines for Performance Improvements, Quality
Audits, TQM Culture, Leadership, Quality Council, Employee involvement,
Motivation, Empowerment, Recognition and Reward, Information Technology
Computers and Quality Functions, Internet and Electronic Communications,
Information Quality Issues

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Notes
5.1. ISO 9004:2000
ABOUT ISO AND HISTORY OF ISO:
The International Organization for Standardization (ISO) is a world wide
federation of national standards’ bodies from more than 140 countries (one from
each country). ISO standards are documented quality systems and activities,
used as the basis for adoption of uniform quality systems norms for international
exchange of goods and services.
In fact, ‘ISO’ is a word, derived from the Greek word ISO meaning ‘equal’, which
is the root of the prefix ‘ISO’ that occurs in a host of terms, such as ‘isometric’
(of equal measure or dimensions) and ‘isonomy’ (equality of laws, or of people
before the law). From ‘equal’ to ‘standard’, the line of thinking that led to the
choice of ‘ISO’ as the name of the organization is easy to follow.
The name ‘ISO’ is used around the world to denote the organization, thus avoiding
a plethora of acronyms resulting from the translation of ‘International Organization
for Standardization’ into the different national languages of members, such as,
IOS in English, OIN in French, etc
The International Organization for Standardization (ISO) is an international non
governmental organization made up of national standards bodies; it develops and
publishes a wide range of proprietary, industrial, and commercial standards and
is comprised of representatives from various national standards organizations.
The organizations abbreviated name—ISO—is not an acronym; it derives
from the ancient tGreek word ísos, meaning equal or equivalent. Because the
organization would have different acronyms in different languages, the founders
of the organization decided to call it by the short form ISO.
KEYTAKEAWAYS
 The International Organization for Standardization (ISO) is an international
non governmental organization made up of national standards bodies that
develops and publishes a wider ange of proprietary, industrial, and commercial
standards.
 The International Organization for Standardization (ISO) was founded in
1947 and is head quartered in Geneva, Switzerland.
 In addition to producing standards, ISO also publishes technical reports,
technical specifications, publicly available specifications, technical
corrigenda, and guides.
 The ISO plays an important role in facilitating world trade by providing
common standards among different countries.
ISO9000:
ISO 9000 is defined as a set of international standards on quality management
and quality assurance developed to help companies effectively document the

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Notes quality system elements needed to maintain an efficient quality system. They are
not specific to any one industry and can be applied to organizations of anysize.
ISO9000 can help a company satisfy its customers, meet regulatory requirements,
and achieve continual improvement. It should be considered to be a first step or
the base level of a quality system.

ISO9000 series of Standards

The ISO 9000 family contains these standards:
• ISO9001:2015:Quality Management Systems- Requirements
• ISO9000:2015:Quality Management Systems-Fundamentals and
Vocabulary (definitions)
• ISO9004:2018:Quality Management-Quality of an Organization-
Guidance to Achieve Sustained Success (continuous improvement)
• ISO19011:2018: Guidelines for Auditing Management Systems
ASQ is the only place where organizations can obtain the American National
Standard Institute (ANSI) versions of these standards in the ISO 9000 family.

ISO 9000 history and revisions: ISO 9000:2000, 2008, and 2015
ISO 9000 was first published in 1987 by the International Organization for
Standardization (ISO), a specialized international agency for standardization
composed of the national standards bodies of more than 160 countries. The
standards underwent major revisions in 2000 and 2008. The most recent versions
of the standard, ISO 9000:2015 and ISO 9001:2015, were published in September
2015.
ASQ administers the U.S. Technical Advisory Groups and subcommittees that
are responsible for developing the ISO 9000 family of standards. In its standards
development work, ASQ is accredited by ANSI.

ISO 9000:2000
ISO 9000:2000 refers to the ISO 9000 update released in the year 2000. The ISO
9000:2000 revision had five goals:
1. Meet stakeholder needs
2. Be usable by all sizes of organizations
3. Be usable by all sectors
4. Be simple and clearly understood
5. Connect quality management system to business processes ISO 9000:2000
was again updated in 2008 and 2015. ISO 9000:2015 is the most current
version.

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ISO 9000:2015 principles of Quality Management Notes

The ISO 9000:2015 and ISO 9001:2015 standards are based on seven
quality management principles that senior management can apply to promote
organizational improvement.

ISO 9000 Quality Management Principles

1. Customer focus
 Understand the needs of existing and future customers
 Align organizational objectives with customer needs and expectations
 Meet customer requirements
 Measure customer satisfaction
 Manage customer relationships
 Aim to exceed customer expectations
 Learn more about the customer experience and customer satisfaction
2. Leadership
 Establish a vision and direction for the organization
 Set challenging goals
 Model organizational values
 Establish trust
 Equip and empower employees
 Recognize employee contributions
 Learn more about leadership
3. Engagement of people
 Ensure that people’s abilities are used and valued
 Make people accountable
 Enable participation in continual improvement
 Evaluate individual performance
 Enable learning and knowledge sharing

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Notes  Enable open discussion of problems and constraints

 Learn more about employee involvement
4. Process approach
 Manage activities as processes
 Measure the capability of activities
 Identify linkages between activities
 Prioritize improvement opportunities
 Deploy resources effectively
 Learn more about a process view of work and see process analysis tools
5. Improvement
 Improve organizational performance and capabilities
 Align improvement activities
 Empower people to make improvements
 Measure improvement consistently
 Celebrate improvements
 Learn more about approaches to continual improvement
6. Evidence-based decision making
 Ensure the accessibility of accurate and reliable data
 Use appropriate methods to analyse data
 Make decisions based on analysis
 Balance data analysis with practical experience
 See tools for decision making
7. Relationship management
 Identify and select suppliers to manage costs, optimize resources, and create
value
 Establish relationships considering both the short and long term
 Share expertise, resources , information, and plans with partners
 Collaborate on improvement and development activities
 Recognize supplier successes
 Learn more about supplier quality and see resources related to managing the
supply chain
• ISO 9001: Design, Development, Production, Installation &
ServicingISO9002: Production, Installation & Servicing
• ISO9003: Inspection &Testing
• ISO9004: Provides guidelines on the technical, administrative and human
factors affecting the product or services.

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BENEFITS OF ISO 9000 STANDARDS: Notes

• Achievement of international standard of quality. Ø Value for money.
• Customer satisfaction.
• Higher productivity.
• Increased profitability.
• Improved corporate image
• Access to global market
• Growth of the organization.
• Higher morale of employees
CLAUSES (ELEMENTS) OF ISO 9000 (During the year 1987)
Management Responsibility
 Adequate resources for the verification activities Need for trained personnel
 Work and verification activities including audits.
 A Management Representative to be identified
 Review the Quality System performance and customer complaints periodically
• Quality System
• Contract review
• Design Control
• Documents Control
• Purchasing
• Purchaser–Supplied Product
• Product Identification and Traceability
• Process Control
• Inspection and Testing
• Inspection Measuring and Test Equipment
• Inspection and Test Status
• Control of Non– Conforming Product
• Corrective Action
• Handling, Storage, Packaging and Delivery
• Quality Records
• Internal Quality Audits
• Training
• Servicing
• Statistical Techniques
CLAUSES (ELEMENTS) OF ISO 9000 (During the year 2000)
• Scope

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Notes • Normative Reference

• Terms and Definitions
• Quality Management System (QMS)
General Requirements
1. Documentation
2. Management Responsibility Management Commitment Customer Focus
3. Quality Policy Planning Responsibility, Authority and Communication
Management Review
4. Resource Management
5. Provision of Resources Human Resources Infrastructure Work Environment
6. Product Realization Planning of Product Realization Customer related
processes Designand Development Purchasing
7. Production and Service Provision
8. Control of Monitoring and Measuring devices
9. Monitoring and Measurement General Monitoring and Measurement
10. Control of Non-Conforming Product
11. Analysis of Data
12. Improvement
PHILOSOPHY OF ISO 9000:
ISO 9000 is set up as a collection of guidelines that help a company establish,
maintain, and improve a quality management system. It is important to stress that
ISO 9000 is not a rigid set of requirements, and that organizations have flexibility
in how they implement their quality management system. This freedom allows the
ISO 9000 standard to be used in a wide range of organizations, and in businesses
large and small.
One important aspect of ISO 9000 is its process-oriented approach. Instead of
looking at a company’s departments and individual processes, ISO 9000 requires
that a company look at “the big picture.” How do processes interact? Can they
be integrated with one another? What are the important aspects of products and
services?
Once this process-oriented approach is implemented, various audits can be done
as a check of the effectiveness of your quality management system. There are
three main types of audits –1st, 2nd, and 3rd party audits. An internal audit is
a1st party audit. ISO 9000 encourages (and requires) this type of audit so that an
organization can get feedback quickly from those who know the company best.
However, this audit process cannot be viewed as impartial. Therefore, 2nd party
audits allow for a consumer to evaluate the performance on an organization. As an
alternative to a 2nd party audit, many companies choose to become certified with
ISO 9000 through a 3rd party audit. In this case, an independent certification body

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comes into an organization and evaluates it in terms of the ISO 9000 guidelines. Notes
If an organization meets the requirements of the standard, it becomes certified in
ISO 9000 and carries a seal of quality recognized throughout the world.

IMPORTANCEOFISO 9000:
The importance of ISO9000 is the importance of quality. Many companies offer
products and services, but it is those companies who put out the best products
and services efficiently that succeed. With ISO 9000, an organization can identify
the root of the problem, and therefore find a solution. By improving efficiency,
profit can be maximized.
As a broad range of companies implement the ISO 9000 standards, a supply
chain with integrity is created. Each company that participates in the process of
developing, manufacturing, and marketing a product knows that it is part of an
internationally known, reliable system.
Not only do businesses recognize the importance of the ISO 9000, but also the
customer realizes the importance of quality. And because the consumer is most
important to a company, ISO 9000 makes the customer its focus.

The ISO 9004:2000

Standard ISO 9004:2000goes beyond ISO 9001:2000 in that it provides guidance
on how you can continually improve your business’ quality management system
so that it benefits not only your customers but also:
 Employees
 Owners
 Suppliers
 Society in general
By measuring these groups’ satisfaction with your business, you’ll be able to
assess whether you’re continuing to improve.
Read about ISO 9004:2000 at the British Standards Institution (BSI) website.
The ISO 9000 series, which includes 9001 and 9004, is based around eight quality
management principles that the senior managers should use as a framework to
improve the business:
 Customer focus - they must understand and fulfil customer needs.
 Leadership - they should demonstrate strong leadership skills to increase
employee motivation.
 Involvement of people - all levels of staff should be aware of the importance
of providing what the customer requires and their responsibilities within the
business.
 Process approach - identifying your essential business activities and
considering each one as part of a process.

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Notes  System approach to management - managing your processes together as

a system, leading to greater efficiency and focus. You could think of each
process as a cog in a machine, helping it to run smoothly.
 Continual improvement – this should be a permanent business objective.
 Factual approach to decision-making - senior staff should base decisions on
thorough analysis of data and information.
 Mutually beneficial supplier relationships- managers should recognize that
your business and its suppliers depend on each other. As ISO 9004:2000 is
a set of guidelines and recommendations, you can’t be certified as achieving
it.

5.2 QUALITY MANAGEMENT SYSTEMS:

What is a QMS?
“A quality management system (QMS) is a collection of business processes focused
on consistently meeting customer requirements and enhancing their satisfaction.
It is aligned with an organization’s purpose and strategic
direction”. A QMS is defined as an extensive system meant to document important
processes and procedures and facilitate the implementation of these procedures
to achieve high-quality outputs that align with a company’s goals and objectives.
A QMS aids in coordinating and directing the activities of a business in order to
achieve customer satisfaction and meet international requirements, to enhance
efficiency and work towards continual improvement.
What is the Purpose of a QMS?
A quality management system is not simply a group of documents your organization
refers to, it is a whole system that aims to incorporate conformance to international
standards of excellence and, through the process, takes a look at executions, costs
and conveyance. In doing so, and in succeeding to continually improve upon
company procedures and consequently products, the system brings about a whole
array of advantages. A QMS integrates the various internal processes within the
organization and intends to provide a process approach for project execution. A
process-based QMS enables your organization to identify, measure, control and
improve the various core business processes that will ultimately lead to improved
business performance.– Source
Increasingly, top QMS have attempted to converge initiatives revolving around
sustainability and transparency as they recognize that customer and investor
satisfaction are tied to these factors. Out of the top regimes, the ISO 9000 family
of standards is considered the top international standard and deals with both quality
and sustainability integration in company values.

What are the Advantages of a QMS?

“A well-designed and implemented quality management system can help you
plan, simplify, and control your operations”

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The popularity of QMS can be credited to the many advantages that incorporating Notes
a quality management system into company policy has proven to bring about.
Alongside show casing an immense dedication to providing quality products and
services, having a QMS in the company allows you to establish a brand identity,
create consumer loyalty, and consistently meet client necessities and improve
upon existing frameworks. A quality management system operates as a basic
framework to help organizations manage services and document relevant changes
and corrective measures for internal and external audits.
The ISO9000 Store describes the purpose and advantages of a QMS as “At its core,
a quality management system is an integrative element, uniting diverse aspects
of a company into a unified purpose of delivering products/services in their best
form. Rather than be seen as a cost burden, an effective quality management
system is viewed as a key component of success.”

Quality management systems focus on:

 Being centred on the customer or consumer of the good or service, actively
providing that customer with the best value possible.
 Some type of continuous improvement program, which implies that there is
not a “perfect” state, all processes can be continually improved upon.
 An efficiency imperative that says waste must be reduced and all resources
maximized.
 Top management is to support and provide adequate resources to achieve
goals.
 It aids or facilitates a clear understanding of expectations between all
participants.
 Measurement and accurate data collection are incorporated to support data-
driven decision making.
 Documentation of QMS processes is maintained and controlled
CONCEPT OF QMS:
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 1800’spioneers such as Frederick
Winslow Taylor and Henry Ford recognised the limitations of the methods being
used in mass production at the time and the subsequent varying quality of output.
Taylor established Quality Departments to oversee the quality of production and
rectifying of errors, and Ford emphasised standardisation 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.

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Notes 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. No other profession has 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.
QUALITY MANAGEMENT ORGANISATIONS AND AWARDS:
The International Organization for Standardization’s ISO 9000 series describes
standards for a QMS addressing the processes surrounding the design, development
and delivery of a general product or service. Organisations can participate in a
continuing certification processs to demonstrate their compliance with the standard.
The Malcolm Baldrige National Quality Award is a competition to identify and
recognize top-quality U.S. companies. This model addresses a broadly based
range of quality criteria, including commercial success and corporate leadership.
Once an organization has won the award it has to wait several years before being
eligible to apply a gain.
The European Foundation for Quality Management’s EFQM Excellence Model
supports an award scheme similar to the Malcolm Baldrige Award for European
companies.
In Canada, the National Quality Institute presents the ‘Canada Awards for
Excellence’ on an annual basis to organizations that have displayed outstanding
performance in the areas of Quality and Workplace Wellness, and have met the
Institute’s criteria with documented overall achievements and results.
The Alliance for Performance Excellence is a network of state, local, and
international organizations that use the Malcolm Baldrige National Quality Award
criteria and model at the grassroots level to improve the performance of local
organizations and economies. NetworkforExcellence.org is the Alliance web site;
browsers can find Alliance members in their state and get the latest news and
events from the Baldrige community.

5.3 GUIDELINES FOR PERFORMANCE

IMPROVEMENTS:
Purpose: The purpose of a Performance Improvement Plan is to communicate
to the employee the specific job performance are as that do not meet expected
standard.

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Develop a Performance Improvement plan: Notes

1. Clearly state why the employee’s job performance is a concern and how it
impacts the work environment.
2. Summarize the facts and events that necessitate the development of a
Performance Improvement Plan.
3. Develop specific and measurable steps to improve performance and include
the employee’s ideas for improvement.
4. Establish reasonable timelines for improved performance on each expectation.
5. Conduct periodic reviews on a regular basis to monitor progress being made
toward the expected outcome and provide feedback.
6. Communicate consequences for failure to meet expectations and sustain
improved performance.
Implement the Performance Improvement Plan:
1. Document each step of the Performance Improvement Plan Provide
constructive feedback to help the employee understand how he/she is doing
and what is expected.
2. Focus on the job and not on the person. Concentrate on a specific behavior to
enable the employee to understand what you want and why. The individual
will feel less defensive.
Example with focus on behavior: “Your report is two days late.”
Example with focus on person: “You are not very reliable about getting things
done on time.”
3. Always meet with the employee and provide an opportunity for discussion
and feedback.
4. At the end of the Performance Improvement Plan period, the supervisor
will determine if the process was satisfactorily completed or if progressive
discipline will be implemented in conjunction with Human Resources.

5.4 QUALITYAUDITS:
Quality audit means a systematic, independent examination of a quality system.
Quality audits are typically performed at defined intervals and ensures that the
institution has clearly-defined internal quality monitoring procedures linked to
effective action. The checking determines if the quality system complies with
applicable regulations or standards The process involves assessing the standard
operating procedures (SOP’s) for compliance to the regulations, and also assessing
the actual process and results against what is stated in the SOP.
The U.S. Food and Drug Administration requires quality auditing to be done as
part of its Quality System Regulation (QSR) for medical devices, title 21 of the
United States Code of Federal Regulations part 820.

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Notes The process of a Quality Audit can be managed using software tools, often Web-
based. Internal Quality auditing is an important element in ISO’s quality system
standard, ISO 9001. With the upgrade of the ISO9000 series of standards from
the 1994 to 2000 series, the focus of audits has shifted from procedural adherence
only to measurement of the effectiveness of the Quality Management System
processes to deliver in accordance with planned results.
Higher education quality audit is an approach adopted by several countries,
including NewZealand, Australia, Sweden, Finland Norway and the USA. It was
initiated in the UK and is a term designed to focus on procedures rather than quality

DOCUMENTATION
In every organization, the quality system must be documented properly. The
documentation of the system can be seen as a hierarchical format as shown.

QUALITY AUDITING
The term Audit refers to a regular examination and checking of accounts or
financial records, settlement or adjustment of accounts.
It also refers to checking, inspection and examination of Production Processes.
PURPOSE OF QUALITY AUDIT :
 To establish the adequacy of the system.
 To determine the effectiveness of the system.
 To afford opportunities for system analysis.
 To help in problem solving.
 To make decision making easier etc.
TYPES OF QUALITY AUDIT
 First – Party Audit.
 Second– Party Audit.
 Third– Party Audit.
Quality audit can also be classified on the basis of the area taken into account for
the audit such as
 System Audit
 Process Audit.
 Product Audit.
 Adequacy Audit.
 Compliance Audit.
ISO 19011:2018 defines an audit as a “systematic, independent and documented
process for obtaining audit evidence [records, statements of fact or other
information which are relevant and verifiable] and evaluating it objectively to

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determine the extent to which the audit criteria[a set of policies, procedures or Notes
requirements] are fulfilled.” There are three main types of audits:
• Process audit: This type of audit verifies that processes are working
within established limits. It evaluates an operation or method against
predetermined instructions or standards to measure conformance to these
standards and the effectiveness of the instructions. A process audit may:
 Check conformance to defined requirements such as time, accuracy,
temperature, pressure, composition, responsiveness, amperage, and
component mixture.
 Examine the resources (equipment, materials, people) applied to transform the
inputs into outputs, the environment, the methods (procedures, instructions)
followed, and the measures collected to determine process performance.
 Check the adequacy and effectiveness of the process controls established
by procedures, work instructions, flowcharts, and training and process
specifications.
• Product audit: This type of audit is an examination of a particular product
or service, such as hardware, processed material, or software, to evaluate
whether it conforms to requirements (i.e., specifications, performance
standards, and customer requirements).
• System audit: An audit conducted on a management system. It can be
described as a documented activity performed to verify, by examination
and evaluation of objective evidence, that applicable elements of
the system are appropriate and effective and have been developed,
documented, and implemented in accordance and in conjunction with
specified requirements.
 A quality management system audit evaluates an existing quality management
program to determine its conformance to company policies, contract
commitments, and regulatory requirements.
 Similarly, an environmental system audit examines an environmental
management system, a food safety system audit examines a food safety
management system, and safety system audits examine the safety management
system.
Guidelines for planning quality audit:
Guidelines for Planning and Performing Quality Audits ISO 10011-1:1990
Quality audit Objectives:
Quality audits are intended to achieve the following kinds of objectives
 To determine to what extent your quality system
 Achieves its objectives.
 Conforms to your requirements.
 Complies with regulatory requirements.

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Notes  Meets customers’ contractual requirements.

 Conforms to a recognized quality standard.
 To improve the efficiency and effectiveness of your quality management
system.
 To list your quality system in registry of an independent agency.
 To verify that your quality system continues to meet requirements.
Professional conduct
Auditors must behave in a professional manner. Auditors must:
 Have integrity and be independent and objective
 Have the authority they need to do a proper job.
 Avoid compromising the audit by discussing audit details with auditees during
the audit.
The lead auditor’s job
A lead auditor’s job is to:
 Manage the audit.
 Assign audit tasks.
 Help select auditors.
 Orient the audit team.
 Prepare the audit plan.
 Define auditor qualifications.
 Clarify quality audit requirements.
 Communicate audit requirements.
 Prepare audit forms and checklists.
 Review quality system documents.
 Report major non conformities immediately.
 Interact with auditee’s management and staff.
 Prepare, submit, and discuss audit reports.
Auditor’s job
 An auditor’s job is to:
 Evaluate the quality system.
 Carryout assigned audit tasks.
 Comply with audit requirements.
 Respect all confidentiality requirements.
 Collect evidence about the quality system.
 Document audit observations and conclusions.
 Safeguard audit documents, records, and reports.

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 Determine whether quality policy is being applied. Notes

 Find out if the quality objectives are being achieved.
 See whether quality procedures are being followed.
 Detect evidence that might invalidate audit results.
Client’s job
A client’s job is to:
 Initiate the audit process.
 Select the auditor organization.
 Decide whether an audit needs to be done.
 Define the purpose and scope of the audit.
 Ensure that audit resources are adequate.
 Determine how often audits must be done.
 Specify which follow-up actions the auditee should take.
 Indicate which standards should be used to evaluate compliance.
 Select the elements, activities, and locations that must be audited.
 Ensure enough evidence is collected to draw valid conclusions.
 Receive and review the reports prepared by auditors.
Auditee’s job
An auditee’s job is to:
 Explain the nature, purpose, and scope of the audit to employees.
 Appoint employees to accompany and assist the auditors.
 Ensure that all personnel cooperate fully with the audit team.
 Provide the resources the audit team needs to do the audit.
 Allow auditors to examine all documents, records, and facilities.
 Correct and prevent problems that were identified by the audit.
PHASESOFAUDIT:
1. Audit planning and preparation: Audit preparation consists of planning
everything that is done in advance by interested parties, such as the auditor,
the lead auditor, the client, and the audit program manager, to ensure that
the audit complies with the client’s objective. This stage of an audit begins
with the decision to conduct the audit and ends when the audit itself begins.
2. Audit execution: The execution phase of an audit is often called the fieldwork.
It is the data-gathering portion of the audit and covers the time period from
arrival at the audit location up to the exit meeting. It consists of multiple
activities including on-site audit management, meeting with the auditee,
understanding the process and system controls and verifying that these
controls work, communicating among team members, and communicating
with the auditee.

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Notes 3. Audit reporting: The purpose of the audit report is to communicate the results
of the investigation. The report should provide correct and clear data that
will be effective as a management aid in addressing important organizational
issues. The audit process may end when the report is issued by the lead auditor
or after follow-up actions are completed.
4. Audit follow-up and closure: According to ISO 19011, clause 6.6, “The audit
is completed when all the planned audit activities have been carried out, or
otherwise agreed with the audit client.” Clause 6.7 of ISO 19011 continues
by stating that verification of follow-up actions may be part of a subsequent
audit.

The Four Phases of an Audit Cycle

Note: Requests for correcting non conformities or findings within audits are very
common.
• Corrective action is action taken to eliminate the causes of an existing
non conformity, defect, or other undesirable situation in order to prevent
recurrence (reactive). Corrective action is about eliminating the causes of
problems and not just following a series of problem-solving steps.
• Preventive action is action taken to eliminate the causes of a potential
non conformity, defect, or other undesirable situation in order to prevent
occurrence (proactive).
Follow-Up Audits
A product, process, or system audit may have findings that require correction
and corrective action. Since most corrective actions cannot be performed at the
time of the audit, the audit program manager may require a follow-up audit to
verify that corrections were made and corrective actions were taken. Due to the
high cost of a single-purpose follow-up audit, it is normally combined with the
next scheduled audit of the area. However, this decision should be based on the
importance and risk of the finding.
An organization may also conduct follow-up audits to verify preventive actions
were taken as a result of performance issues that may be reported as opportunities
for improvement. Other times organizations may forward identified performance
issues to management for follow-up.

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Notes
5.5 TQMCULTURE:
Culture is the sum total learned beliefs, values, and customs that serve to direct
the consumer behaviour of members of a particular society.
According to mead, Culture is a body learned behaviour, a collection of beliefs,
habits and traditions, shared by a group of people and successively learned by
people who enter society‖. The culture of an organization must accommodate
total quality management. This includes aspects such as teamwork, recognition
for work done, job security, fairness and ownership.
A TQM culture is based on certain values and leadership vision. A TQM culture
includes everyone and excludes no one. If there is a union then it must be involved
in the TQM effort. Total quality management related not only to the quality of the
final product, but also to the interaction between employees and the company.
Therefore, total quality management has a strong impact on the company culture.
More and more organizations are beginning to implement total quality management
(TQM) to sustain their competitive edge in industry. Implementation of TQM calls
for a complete change in the behaviour of people working in the organization

Fostering TQM culture

1. Use of information on performance and quality: Information must be
gathered continually. This information must be used to identify and understand
problems, and also to develop and implement solutions. It must be made available
to people who can use it to improve quality and performance. This information
must never be used to judge individual performance.
2. Authority: employees who are responsible for work must also have the authority
to act on the basis of information about performance and quality. They must be
empowered to control their own activities rather than wait for orders. At the same
time, employees must be able to use their empowerment successfully by applying
their knowledge, skills and tools.
3. Rewards and recognition: achievements must be recognized and employees
must be rewarded for their results. These rewards must be given for improved
quality and problemsolving. The rewards may be both symbolic and material.
Employees will probably expect material reward, but regardless of the form of
the reward, it is important for them to share in profits.
4. Teamwork: teamwork is essential. Employees must work together, and not
complete against each other. At the same time, the group must have the authority
required to fulfill its responsibilities. The reward system must focus on the
individual, the team, and the entire organization.
5. Job security: employees must know that their jobs are secure. They must
realize that job security is based on company performance rather than individual
assessment. Where employees make mistakes, they must be trained rather than

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Notes discharged. It is important to share financial information with employees. They

must understand the consequences of their own actions and be able to make
informed decisions.
6. Fairness: Employees must perceive a culture of fairness, which must be
reinforced by the actions of managers. Managers must:
 Share useful information with employees;
 Act consistently, both within and outside the workplace
 Be honest with themselves and their employees
 Observe agreed ethical guidelines
 Indicate clearly to employees what is expected of them
 Ensure that employees are given equivalent rewards for similar performance
 Ensure that standards are clear, just and adhered to
 Demonstrate respect towards employees; and
 Ensure that procedures are open to public scrutiny
There must be equitable compensation across organizational level. This means that
the ratio of the chief executive officer‘s salary to that of the lowest paid employee
must not be greater than 1: 20
Employees should have ownership in the organization
Cultural change for implementation of TQM
Following the principles of TQM, implementation of total quality strategy does
require some changes and reorientation of an organization‘s thinking and attitudes.
Some of these re-orientations are related to change of culture, values and principles,
and others relate to the structure and processes. Important changes are as follows:

Culture of communication:
TQM is a customer-focused, people driven process to attain a company‘s stated
vision, mission, and strategic goals. Therefore, the company must have
 Clear vision as to where it wants to go or what it wants to become, and by
when
 Clearmission as to what business it wants to be in, why it wants to be in
that business and what role it wants to play at large
 Clearstrategic goals as to what must be achieved, by how and when It
is the function of strategic planning and leadership to clearly define and
communicate the vision, mission and goals. What is to be emphasized for
cultural change is the culture of communication within the organization. To
draw the people into the TQM processes, they should be given a clear view
and understanding of the company‘s vision, mission and goals, and what

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roles they are expected to play. People should understand what are guiding Notes
the happenings in the organization and why. Prior to TQM implementation,
thecompany must define these strategic elements and carefully explain
them to all employees in an unambiguous manner. These strategic elements
should relate and focus on its customers, and role of employees in this
direction should be clarified. Communication and collaborative decision
making influences both customers and employees and facilitates smooth
induction of TQM systems
2.Customer first’ attitude: This is inculcating a work-culture where each person
knows and values what the next-in-process customer wants, and commits to fulfill.
This essential step forward for building in customer-first attitude in the company
is an important attitudinal jump
3.Transparency in the organization: This is ensuring that key decisions are made,
communicated, and carried-out in the organization based upon shared values,
vision and customer expectations. Actions and behavior of top management must
not raise any misgivings in the minds of people about the management ‘s motives,
ethics, or practices. It is vital to develop trust and confidence between management
and people, as it cements bonds, and fosters commitment and motivation towards
common goals. This is a quantum cultural jump for leadership, but it has to happen
fast in today ‘s changing scenario
4. Empowerment of people: Leadership system should be such that it encourages
teamwork, creativity, and empowerment of people to get best out of every individual
and group. To empower people, people ‘s skills, knowledge, and understanding
of various process techniques must first be enhanced through intensive training
and development programs, and then people should be encouraged to apply their
knowledge. The whole process demands close attention of top management and
their periodical review for improvement actions. This is an attitudinal change
towards people in the organization
5. Continuous improvement and ‘learning’: This should be part of daily
routine and any approach to problem-solving. Learning should be encouraged by
training, interactive group formation, free discussions, seminars and workshops,
and freedom to apply this knowledge on the job. This is a change of work culture
for achieving superior performance in all activities
6. Customer-focused horizontal processes: Conventional organizations run
vertical processes. TQM demands processes with direct view of customer needs
for delivery of results as per commitment. This means horizontal customer-focused
processes that run across the conventional structure of functions and their vertical
boundaries be managed by empowered cross-functional teams. This provides
opportunity for direct customer contact ownership of the process for meeting
customers by the teams. Such horizontal processes involve structural change as
well as change of work culture

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Notes
5.6 LEADERSHIP:
Definition
• Leadership has been described as the “process of social influence in which
one person can enlist the aid and support of others in the accomplishment
of a common task.”
• Alan Keith: “Leadership is ultimately about creating a way for people to
contribute to making something extraordinary happen.”
• Ken “SKC” Ogbonnia: “Effective leadership is the ability to successfully
integrate and maximize available resources within the internal and external
environment for the attainment of organizational or societal goals.”
• Ann Marie E. McSwain: “Leadership is about capacity: the capacity of
leaders to listen and observe, to use their expertise as a starting point to
encourage dialogue between all levels of decision-making, to establish
processes and transparency in decision-making, to articulate their own
values and visions clearly but not impose them. Leadership is about setting
and not just reacting to agendas, identifying problems, and initiating change
that makes for substantial improvement rather than managing change.”
• These three definitions talk about certain common things. They are
resources, utilization of resources, managing constraints and getting
extraordinary results. These definitions also talk about motivating people
to work in unison to create results.

Concepts of Leadership
1. Be Proactive: Proactive people think beforehand and are ready to face a
situation. Reactive people react as per the situation and react on whims and
emotions. A proactive person can plan beforehand for an eventuality. If you are
well prepared then you can face a situation or solve a problem more efficiently.
2. Begin with the end in mind: “If you don’t know where to go then you
will reach nowhere” goes an old saying. Start a task with set goals. Goals are
important as they tell you where to go. They help in focusing your approach as
well. Remember the famous incident from Mahabharata where Guru Dronacharya
asks his disciple about what they could see during target practice. Arjuna gives
the most perfect answer as he was focusing on the target. Because of his focused
approach Arjuna became one of the best archers of his time.
3. Put first things first: Because of multitude of tasks and assignments one
needs to prioritize. This helps in giving more attention to more important things
at hand.
4. Think win-win: Think about mutual benefits rather than your own benefit
alone. Everybody wants to have an upper hand in life and in business dealings.
But this is practically not possible. So best way is to find is the middle of the road.

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5. Seek first to understand then to be understood: First give other people Notes
ample time to express themselves. This will help on many fronts. The other person
gets enough opportunity to say what he wants to say. You get an opportunity to
understand other’s perspective. You get enough time to strategize accordingly.
6. Synergy: The best example of team work can be learnt from a pleasant
orchestra or ‘jugalbandi’ in Indian classical music. Especially in Indian classical
music you will observe how maestros bury their egos and come out with astounding
performances.
7. Sharpen the saw: Skill building or practice is very important. Nobody is
perfect and perfection is a thing which can never be achieved in one’s lifetime.
Moreover, it always pays to practice as much as you can.

5.7 QUALITYCOUNCIL
Quality council is mainly set-up to provide overall directions and guidance.
Quality council consists of the chief executive officer, senior managers of
design, marketing, finance, production and quality departments, a labour union
representative, and a coordinator. The coordinator will report to the chief executive.
The coordinator builds the two-way trust, reports the team needs to be council,
gives back the council expectations to the team and briefs the council on the team‘s
progress. The coordinator assists the team leaders, discusses on the problems and
shares their experience through regular meetings.
The duties of quality council members are as follows:
 They identify the core values; establish the vision statement, mission
statement, and quality policy statement.
 Draft the strategic long-term plan with goals and periodical quality
improvement programs with objectives.
 Install education and training plans.
 Monitor the cost of non – conformance, continually.
 Decide on the performance metrics for the organization, approve and
monitor them.
 Continually identify the problems and plan to improve the processes,
especially the ones, which lead to external and internal customer
satisfaction.
 Install cross-functional schemes and departmental teams and regularly
monitor their progress
 Install or update the recognition and reward system, to keep motivating
the people constantly
In the quality council meeting, the following matters are normally discussed-
progress report on teams, customer satisfaction report, progress on goals
achievement, new project teams, if any, and benchmarking report

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Notes Core values, concepts, and framework

Visionary leadership: An organization‘s senior leaders need to set directions
and create a customer orientation, clear and visible quality values, and high
expectations. Values, directions, and expectations need to address all stakeholders.
The leaders need to ensure the creation of strategies, systems, and methods for
achieving excellence. Strategies and values should help to guide all activities and
decisions of the organization. The senior leaders must commit to the development
of the entire workforce and should encourage participation, learning, innovation,
and creativity by all employees.
2. Customer-driven excellence: Quality is judged by customers. All product and
service characteristics that contribute value to the customer and lead to customer
satisfaction, preference, and retention must be the focus of an organization‘s
management system. Customer-driven excellence has both current and future
components-understanding today‘s customer desires and marketplace offerings
as well as future innovations. Value and satisfaction may be influenced by many
factors throughout the customer‘s overall purchase, ownership and service
experiences. These factors include the organization‘s relationship with customers
that help to build trust, confidence, and loyalty. Customer-driven quality is thus a
strategic concept. It is directed toward customer retention, market-share gain, and
growth. It demands constant sensitivity to changing and emerging customer and
market requirements and the factors that drive customer satisfaction and retention.
It also demands awareness of developments in technology and of competitor‘s
offerings, and rapid and flexible responses to customer and market requirements
3. Organizational and personal learning: Achieving the highest levels of
performance requires a well-executed approach to organizational and personal
learning. Organizational learning refers to both continuous improvement
of existing approaches and adaptation to change, leading to new goals and
approaches. Learning needs to be embedded in the way the organization functions.
Learning must be:
 A required part of the daily work
 Practiced at personal and organizational levels
 Directed at solving problems
 Focused on sharing knowledge throughout the organization; and
 Driven by opportunities to effect significant change and to do better. Sources
for learning include employees ideas, research and development (R&D),
customers‘ input, best practice sharing, and benchmarking
Organizational learning can result in:
 Enhancing value to customers through new and improved products and
services
 Developing new opportunities

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 Reducing errors, defects, waste and related costs Notes

 Improving responsiveness and cycle time performance
 Increasing productivity and effectiveness in the use of all resources; and
 Enhancing the organization‘s performance in fulfilling its public
responsibilities and Thus, learning is directed not only toward better
products and services but also toward being more responsive, adaptive
and efficient-giving the organization marketplace sustainability and
performance advantages
4. Valuing employees and partners: An organization‘s success depends
increasingly upon the skills, knowledge, creativity, and motivation of its employees
and partners. ―Valuing employees‖ means committing to their satisfaction,
development and well-being. Increasingly, this involves more flexible, high-
performance work practices tailored to employees with diverse workplace and
home life needs. Major challenges in the area of valuing employees include:
 Demonstrating the leaders‘ commitment to their employees success
 Recognition that goes beyond the regular compensation system
 Development and progression within the organization
 Sharing the organization‘s knowledge so that employees can better serve
the customers and contribute to achieving the strategic objectives, and
 Creating an environment that encourages risk-taking
Successful internal and external partnerships develop longer-term objectives,
thereby creating a basis for mutual investments and respect. Partners should
address the key requirements for success, means for regular communication,
approaches to evaluating progress, and means for adapting to changing conditions.
In some cases, joint education and training could offer a cost-effective method
for employee development
5. Agility: Success in global markets demands agility. All aspects of e-commerce
require and enable more rapid, flexible, and customized responses. Organizations
face ever-shorter cycles for the introduction of new and improved products and
services, as well as for faster and more flexible response to customers. Major
improvements in response time often require simplification of work units and
processes and the ability for rapid changeover from one process to another. Cross-
trained and empowered are vital assets in such a demanding environment A major
success factor in meeting competitive challenges, is the design-tointroduction cycle
time. To meet the demands of rapidly changing markets, organizations need to
carry-out-stage-to-stage integration, such as concurrent engineering of activities,
from the research concept to commercialization
6. Focus on the future: Focus on the future requires understanding the short-a
d long-term factors that affect an organization and the marketplace. Pursuit of
sustainable growth and market leadership requires a strong future orientation

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Notes and willingness to make long-term commitments to key stakeholders. An

organization‘s planning should anticipate many factors, such as customers‘
expectations, new business and partnering opportunities the increasingly global
marketplace, technological developments, the evolving e-commerce environment,
new customer and market segments, evolving regulatory requirements, societal
expectations, and strategic moves by competitors.
7. Managing for innovation: Innovation means making meaningful change to
improve an organization‘s products, services, and processes and to create new
value for the organization‘s stakeholders. Innovation should lean an organization
to new dimensions of performance. Innovation is no longer strictly the purview
of research and development departments; innovation is important for all aspects
of your business and all processes. Organizations should be led and managed so
that innovation becomes part of the culture and is integrated into daily work
8. Management by fact: Organizations depend on the measurement and
analysis of performance. Such measurements should device from business
needs and strategy, and they should provide critical data and information about
key processes, outputs, and results. Many types of data and information are
needed for performance management. Performance management should include
customer, product, and service performance; comparisons of operational,
market, and competitive performance; and supplier, employee, and cost and
financial performance A major consideration in performance improvement and
change management involves the selection and use of performance measures or
indicators. A comprehensive set of measures or indicators tied to customer and / or
organizational performance requirements represents a clear basis for aligning all
activities with your organization‘s goals. Through the analysis of data, measures
or indicators themselves may be evaluated and changed to better support an
organization‘s goals
9. Public responsibility and citizenship: An organization‘s leaders should
stress the need to practice good citizenship. Basic expectations to adhere to
business ethics and protection of public health, safety, and theenvironment
should be maintained. Protection of health, safety and the environment includes
an organization‘s operations, as well as the lifecycles of products and services.
Also, organizations should emphasize resource conservation and waste reduction
at the source. Planning should anticipate adverse impacts from production,
distribution, transportation, use, and disposal of products. Effective planning
should prevent problems, provide for a forthright response if problems occur and
make available information and support needed to maintain public awareness,
safety and confidence For many organizations, the product design stage is critical.
Effective design strategies should anticipate growing environmental concerns and
responsibilities. Organizations should not only meet all local, state, and federal
laws and regulatory requirements, but they should treat and related requirements
as opportunities for improvement ―beyond mere compliance.

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10. Focus on results and creating value: An organization‘s performance Notes

measurements need to focus on key results. Results should be used to create and
balance value for your key stakeholders-customers, employees, stockholders,
suppliers and partners, the public, and the community. By creating value for
key stakeholders, an organization builds loyalty and contributes to growing the
economy. To meet the sometimes conflicting and changing aims that balancing
value implies organizational strategy should explicitly include key stakeholder
needs and avoid adverse impacts on any stakeholders.
11. Systems perspective: The core values form the building blocks and the
integrating mechanism for the system. However, successful management of overall
performance requires organizationsspecific synthesis and alignment. Synthesis
means looking at an organization as a whole and builds upon key business
requirements, including strategic objectives and action plans. Alignment means
using the key linkages among requirements given in the baldrige categories,
including the key measures/indicators
12. Strategic planning Strategic may be defined as, ―the coordinated, coherent
and sustained efforts, to achieve one‘s long-term goals
The steps involved in quality planning are as follows:
 Study on the market share, customer needs and expectations and aspirations
 Decide on objectives such as, the customer needs, and satisfaction, and
customer supplier partnership
13. Alignment:
 Resource planning – design the required organization structure as estimated
for the present and for the projected future scenario. Provision of necessary
and sufficient resources, for effective implementation and improvements
 Design methods of policy implementation and communication so that
all employees understand, accept and commit themselves to realize the
objectives
Deployment
 Training to develop team spirit, in communication skills, and analytical
and statistical techniques for performance and continual improvement
 Install appraisal, metrics of performance, recognition are reward system

5.8 EMPLOYEE INVOLVEMENT

In a Harvard Business Review article, David Gumpert described a small
“microbrewery” where the head of the company attributed their success to a
loyal, small, and involved work force. He found that keeping the operation small,
strengthened employee cohesiveness and gave them a feeling of responsibility

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Notes and pride. This anecdote tells a lot about small groups and how they can impact
motivation, productivity, and quality. If quality is the objective, employee
involvement in small groups and teams will greatly facilitate the result because
of two reasons: motivation and productivity.
The theory of motivation, but not necessarily its practice, is fairly mature, and
there is substantial proof that it can work. By oversimplifying a complex theory,
it can be shown why team membership is an effective motivational device that
can lead to improved quality.
Teams improve productivity as a result of greater motivation and reduced overlap
and lack of communication in a functionally based classical structure characterized
by territorial battles and parochial outlooks. There is always the danger that
functional specialists, if left to their own devices, may pursue their own interests
with little regard for the overall company mission. Team membership, particularly
a cross-functional team, reduces many of these barriers and encourages an
integrative systems approach to achievement of common objectives, those that
are common to both the company and the team. There are many success stories.
To cite a few:
 Globe Metallurgical Inc., the first small company to win the Baldrige
Award, had a 380 percent increase in productivity which was attributed
primarily to self-managed work teams.
 The partnering concept requires a new corporate culture of participative
management and teamwork throughout the entire organization. Ford
increased productivity 28 percent by using the team concept with the same
workers and equipment.
 Harleysville Insurance Company’s Discovery program provides synergism
resulting from the team approach. The program produced a cost saving of
$3.5 million, along with enthusiasm and involvement among employees.
 At Decision Data Computer Corporation middle management is trained
to support “Pride Team”.
 Martin Marietta Electronics and Missiles Group has achieved success with
performance measurement teams (PMTs).
 Publishers Press has achieved significant productivity improvements and
attitude change from the company’s process improvement teams.

5.9 MOTIVATION
‘Motivation’ is the process of inspiring people in order to intensify their desire and
willingness for executing their duties effectively and for co-operating to achieve
the common objectives of an enterprise.
In other words, it means to induce, instigate, incite or prompt someone to a
particular course of action for getting the results expected from him.

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Factors of or Aids to Motivation: Notes

1. Adequate Financial Incentive:
Provisions should be made for fair and adequate remuneration of the employees
of the enterprise. Remuneration must be fixed in such a way that the employees
are satisfied. If they are not well paid they will not be motivated to perform their
work with sincere efforts. Therefore, proper arrangements are to be made for
sufficient amount of wages and salaries, bonus, various allowances, etc. in order
to encourage the employees.

2. Congenial Work Environment:

Conducive work environment is needed for motivating the employees effectively.
If favourable working conditions are not created, the process of motivation will
not be fruitful. A suitable work environment means proper arrangements for
ventilation and lighting, cleanliness and healthy atmosphere at the work place.

3. Provision for Promotion:

The employees are motivated through their promotion in future. Arrangement for
promotion should be based on seniority or efficiency of the employees.

4. Non-monetary Facilities:
Besides financial incentives, some non-monetary facilities like the provisions for
travelling, education, accommodation and medical treatment of the employees—
free of cost—should be arranged for motivation.

5. Retirement Benefits:
Retirement benefits of the employees should be satisfactory for influencing them
to work more. Arrangement of the important retirement benefits like the provisions
of provident fund, pension, gratuity, etc. are to be made.

6. Security of Job:
The employees should be ensured about the stability of their employment. If they
feel safe and secured in their jobs, they will be highly motivated.

7. Goodwill and Possibility of Development of the Enterprise:

The employees will be well-motivated to perform their jobs more effectively if
the enterprise in which they work has a good reputation in the market and there
lies the possibility of expansion, growth and prosperity in near future.

8. Recognition of Good Work:

The performance of good work by the employees should be recognised, accepted
and praised by the upper-level managers for creation of motivation among the
employees.

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Notes 9. Unity among the Employees:

Through the establishment of unity among the employees, motivation can be
created. For this purpose, cordial relationship should be made among them.
Equal and impartial behaviour to the employees of all levels and improvement
of working relation are also necessary.
10. Good Behaviour of the Higher Level Authority:
Sweet behaviour of the higher authority and good relation between the employees
and higher authority are needed for motivating the employees properly and
adequately.
Characteristics of Motivation:
1. Human Aspect: Motivation is concerned exclusively with the human side of
an enterprise. It means a process of stimulating human beings to make action for
getting desired results. It creates will to work in the individuals. If a manager can
enthuse, initiate and build up loyalty of the employees towards the achievement
of the enterprise objectives with their willing co-operation, the sum total of all
these will amount to motivation. Thus, motivation is a behavioural concept that
directs human behaviour towards certain goals.
2. Psychological Concept: Motivation is a psychological concept which generates
feelings of certain needs within an individual. Human needs are nothing but
feelings in the mind of a person that he lacks certain things. Such internal feelings
affect the behaviour of the person.The workers, even with extraordinary abilities,
will not be able to perform as desired unless they are effectively motivated.
Effective performance on the part of the workers can be said to be the end result
of their abilities backed by proper motivation. Thus,Performance = Motivation
x Abilities.
3. Need-Satisfying Activity:Motivation is related to satisfying human needs.
It can be effective only upon an accurate analysis of the workers’ needs for the
satisfaction of which they can be induced to work in the desired manner. A worker
will perform the desired activity only so long as he sees his action as a means of
continued fulfillment of his cherished needs.
All motivated behaviour on the part of human beings is directed towards
satisfaction or fulfilment of needs.
4. Motivation is Total not Part:
A worker cannot be motivated in parts. Each individual in the organisation is a
self-contained and inseparable unit and all his needs are inter-related. These affect
his behaviour in different ways. To be successful, motivation must take a worker
as an indivisible unit and seek to appeal to all his urges and aspirations.
5. Financial and Non-Financial:
Motivation may assume several forms depending upon the needs, emotions, and
sentiments of the workers. Broadly speaking, it can be classified as financial and

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non-financial. Financial motivation may be created by way of increasing wages, Notes

allowances, bonus, prizes, and other perquisites; while non-financial motivation
may take the form of praise, recognition, providing greater responsibility or
increased participation in decision-making, etc.
6. Constant Process:
Human needs are infinite. As very aptly put by Abraham H. Maslow, “Man is a
wanting animal—as soon as one of his needs is satisfied, another appears in its
place. This process is unending…” This means motivation cannot be a time-bound
process. It is continuous

Role or Importance of Motivation:

Motivation is one of the most important factors determining organisational
efficiency and effectiveness. All organisational facilities will go waste in the lack
of motivated people to utilise these facilities effectively. Every superior in the
organisation must motivate his subordinates to create in them the will to work.
The role or importance and significance of motivation may be summed up as
follows:
1. Removal of Apathy:
It is the considered view that the workers as a rule do not exert adequate energy
for the accomplishment of a task assigned to them. This is because they are
somehow dissatisfied with work, work situation or with the management authority.
Motivation removes this apathy of the workers for peak performance.

2. Combining ‘Will to work’ with ‘Capacity for work’:

The will to work differs from the capacity for work. A man may have the capacity
for doing a work having physical strength, technical skill, sufficient intelligence
and mental alertness; but he may not have the mentality to apply them in full to
his work. Motivation removes this psychological barrier and combines the will
to work with the capacity for work of the workers.

3. Securing Full Support and Energy of the Workers:

The vital mark of a successful manager is his capacity to ensure full support and
co-operation of the workers with their energy, ability and enthusiasm. “You can
buy a man’s time, you can buy a man’s physical presence at a given place, but you
cannot buy his enthusiasm, initiative or loyalty and his capacity, will and energy
without motivation.” The vital mark of a successful manager is, thus, associated
with motivation.

4. Understanding the Employees’ Needs:

Motivation makes the managers understand and realise the needs of the employees
and gives satisfaction to them accordingly. If there is this understanding, and
motivation works behind it, the managers are sure to receive needed co-operation
of the employees for the profitability of the enterprise.

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Notes 5. Maximum Utilisation of the Resources:

Motivation inspires the workers to make the best possible use of different factors
of production. They work whole-heartedly to apply their abilities in minimising
waste and cost. This will enable the enterprise to utilise its human, physical and
financial resources to the maximum.

6. Increase in Efficiency and Output:

Motivation is an effective instrument in the hands of the managers to maximise
efficiency of operations and output of the enterprise. Motivated employees put
higher performance as compared to other employees.
A happy and contended work force ensures improved efficiency and higher
output. Increase in labour productivity results in higher wages for the workers
and increased profits for the enterprise. The high performance is a must for an
organisation being successful and this performance comes through motivation.

7. Low Employee Turnover and Absenteeism:

Motivated employees stay in the organisation and their absenteeism is quite low.
High labour turnover and absenteeism create many problems in the organisation.
Existence of attractive financial and non-financial incentives helps to retain the
employees. They are not easily tempted away by offers from the competitors.
With reduced labour turnover, it becomes possible for the enterprise to plan its
activities on a long-term basis.

ADVERTISEMENTS:
8. Acceptance of Organisational Changes:
Organisations are integral parts of the society. The changes taking place in the
society, i.e. changes in technology, knowledge, value system, etc., require an
organisation to incorporate those changes to cope up with the requirement of the
time.
When these changes are introduced in the organisation, there is a tendency to
resist changes by the employees. However, if they are properly motivated, they
will accept, introduce and implement these changes and keep the organisation on
the right track of progress.

9. Better Industrial Relations:

Existence of attractive motivational schemes promotes closer identification
between the enterprise and its workers. They merge their individual interests
with the organisational objectives. There arises a sense of belonging and mutual
co-operation at all levels. Motivation will foster team spirit among the workers.
This will reduce labour unrest and create better relations between the managers
and workers.

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10. Facilitating Other Functions of Management: Notes

The successful accomplishment of different functions such as planning, organising,
directing, coordinating and controlling— all are inter-linked with motivation.
Motivation is the right force that can make planning successful, organisation
sound, direction forceful, co-ordination tight and control effective.
From the above discussion, it is clear that motivation is of great importance to
business activities as it is a vital part of management process. No tangible result
of best performance is possible without motivation.

5.10 EMPOWERMENT
Empowerment means investing people with authority. Its purpose is to tap
the enormous reservoir of potential contribution that lies within every worker.
Empowerment is an environment in which people have the ability, the confidence
and the commitment to take the responsibility and ownership to improve the
process and initiate the necessary steps to satisfy the process and initiate the
necessary steps to satisfy customer requirements within well defined boundaries
in order to achieve organizational values and goals. There are two steps to
empowerment. One is to arm people to be successful through coaching, guidance
and training. The second is letting people do by themselves. Empowerment
should not be confused with delegation (or) job enrichment. Delegation refers to
distributing and entrusting work to others. Employee empowerment requires that
the individual is held responsible for accomplishing a whole task. The principles
of empowering people are given here.
1. Tell people what their responsibilities are.
2. Give authority that is commensurate with responsibility.
3. Set standards for excellence.
4. Render training.
5. Provide knowledge and information.
6. Trust them.
7. Allow them to commit mistakes.
8. Treat them with dignity and respect. The empowerment matrix is shown here
A key dimension to empowerment is alignment. All employees need to know the
organization’s mission, vision, values, policies, objectives and methodologies.
Fully aligned employees not only know their roles, they are also dedicated to
attain the goals. Once the management has developed empowerment capabilities
and alignment, it can unleash the power, creativity and resourcefulness of the
workforce. This is not possible without trust. Employees need to trust management
and feel that management trusts them. Mutual trust therefore completes the picture
required to build an empowerment workforce.

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Notes 5.11 RECOGNITION AND REWARD

Quality Management Philosophies:

W. Edwards Deming is best known for helping to lead the Japanese manufacturing
sector out of the ruins of World War II to becoming a major presence in the world
market. The highest quality award in Japan, The Deming Prize, is named in his
honor. He is also known for his 14 points (a new philosophy for competing on the
basis of quality), for the Deming Chain Reaction, and for the Theory of Profound
Knowledge. Read more about Deming’s Theory of Profound Knowledge at the
MAAW web site. He also modified the Shewart cycle (Plan, Do, Check, Act) to
what is now referred to as the Deming Cycle (Plan, Do, Study, Act). Beginning
in the early 1980s he finally came to prominence in the United States and played
a major role in quality becoming a major competitive issue in American industry.
His book, Out of the Crisis (1986), is considered a quality classic. Read more about
Dr. Deming and his philosophy at the W. Edwards Deming Institute Home Page.
Joseph Juran also assisted the Japanese in their reconstruction. Juran first became
well - known in the quality field in the U.S. as the editor of the Quality Control
Handbook (1951) and later for his paper introducing the quality trilogy. While
Deming’s approach is revolutionary in nature (i.e. throw out your old system
and “adopt the new philosophy” of his 14 points), Juran’s approach is more
evolutionary (i.e. we can work to improve your current system). Deming refers
to statistics as being the language of business while Juran says that money is the
language of business and quality efforts must be communicated to management
in their language. Read more about Dr. Juran and his philosophy at the Juran
Institute web site.
Phillip Crosby came to national prominence with the publication of his book,
Quality is Free. He established the Absolutes of Quality Management which
includes “the only performance standard (that makes any sense) is Zero Defects,”
and the Basic Elements of Improvement. Phillip Crosby Associates II, Inc. home
page.
Armand Feigenbaum is credited with the creation of the idea of total quality control
in his 1951 book, Quality Control—Principles, Practice, and Administration and
in his 1956 article, “Total Quality Control.” The Japanese adopted this concept
and renamed it Company-Wide Quality Control, while it has evolved into Total
Quality Management (TQM) in the U.S.
There are other major contributors to the quality field as we know it today. The
list of major contributors would include Walter Shewhart, Shigeo Shingo, Genichi
Taguchi, Kaoru Ishikawa, and David Garvin among others

Quality Practice Award

The Quality Practice Award (QPA) is an award that is given to general practitioner
practices in the United Kingdom to show recognition for high quality patient care

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by all members of staff in the team. It is awarded by the Royal College of General Notes
Practitioners (RCGP). For the practice to achieve the award, evidence has to be
provided that conforms to a set criteria in the following areas:
 Practice Profile
 Availability
 Clinical Care
 Communication
 Continuity of Care
 Equipment and Minor Surgery
 Health Promotion
 Information Technology
 Medical Records
 Nursing and Midwifery
 Practice Management
 Other Professional Staff
 Patient Issues
 Premises
 Prescribing/Repeat Prescribing
 The Practice as a Learning Organisation

ISO9000 FAMILY OF STANDARDS:

ISO9000-QualityManagement
Quality is critical to remaining competitive in any industry. The ISO 9000 family
is thequalitymanagement standard,and comprisesofsome of ISO’sbest-known
standards.
ISO quality standards guide companies and equip them with the necessary tools
to continuously improve quality and ensure that customer demands are always
met. ISO 9001:2015 is the only standard in the category that you can be certified
to, and lays down the criteria for a quality management system.
There are over one million organisations in over 170 countries that are certified
to ISO9001.
1. ISO/IEC 27000-Information Security Management Systems
Information security is at the fore of global attention, with rapid increases in cyber
threats.The27000 category of standards ensures the safety of information assets.

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Notes These standards help organisations manage the security of assets such as
intellectual property, financial and employee data, and information held in trust
for third parties. ISO/IEC27001 is the most popular standard in this category,
and stipulates the specifications for the implementation of an Information
Security Management System (ISMS). There are 33,290 certificates issued for
this certification.

2. ISO14000–Environmental Management
This is a family of standards that provides the necessary tools and guidelines for
companies to manage their environmental responsibilities. ISO 14001 and all
other standards in this category lay emphasis on environmental systems.
These standards use tools such as audits, communications, life-cycle analysis
and environmental challenges. This standard can be used by any organisation
regardless of the industry. More than 300,000 ISO 14001 certifications have been
issued in 171countries.

3. ISO 31000:2018-Risk Management

Today’s business world is riddled with uncertainty. Risks facing companies have
a direct impact on the economic performance, reputation, as well as safety and
environmental outcomes.
ISO 31000 cannot be used for certification purposes, but it provides a framework
for managing risks. It offers guidance to organisations for internal and external
audit programs, and enables organisations to achieve objectives in an uncertain
environment by facilitating the identification of opportunities and threats.
Organisations are able to benchmark with internationally recognised practices
for effective management and corporate governance

4. ISO50001:2018-EnergyManagement
ISO 50001: 2018 provides guidance for companies in implementing an Energy
Management System (EnMS) that aims at improving efficiency in the use of energy.
This aims to reduce an organisation’s energy foot print by minimizing green house
gas emissions. ISO 50001 is not obligatory, and many organisations implement it
solely to comply with stakeholder expectations. Over 20,000 certifications have
been issued for this standard with a 69% increase from 2015.

5. ISO 26000:2010-Social Responsibility

Though organisations cannot be certified to ISO 26000, the standard provides
guidance on how organisations can embrace social responsibility. It clarifies what
social responsibility entails for organisations to lay a frame work for effective
action

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6. ISO 28000: 2007 – Specifications for Security Management Systems Notes

for the Supply Chain
This standard stipulates the requirements for a security management system in
respect to a supply chain. It is applicable to all types of organisations and provides
guidance on all activities controlled by companies that affect supply chain security.
It is crucial in the management of supply chains in manufacturing, service, storage,
and transportation and so far there are 356 certifications.

7. ISO37001:2016Anti-Bribery Management Systems

Bribery is a menace in today’s business world. This standard stipulates the
requirements andprovides guidance in establishing, implementing and continuous
improvement of an anti-bribery management system. It can be a stand-alone system
or can be implemented into theoverallmanagement system.
This standard is applicable to all types of organisations with respect to bribery and
helps prevent, detect and respond to bribery and comply with anti-bribery laws.
a. ISO 45001 – Occupational Health and Safety
Occupational injuries and diseases impact the economy negatively due to
poor health, early retirement and high insurance premiums. To manage this
problem, ISO has developed ISO 45001. That has replaced or taken into account
international standards like OHSAs18001 and IL-OSH guidelines. It provides a
framework for employee safety, reducing workplace hazards and provide safer
working environments.

b. ISO 22000 – Food Management Systems

This standard facilitates the development and implementation of a food safety
management system. It incorporates a wide array of standards, including 22002
for food manufacturing and 22001 for food and drink. This standard is widely
used by food manufacturers, restaurants, and food transportation services. So far
more than 30,000 certificates have beenissued.

CLAUSES OF ISO 9001 STANDARDS:

Take a look at the list down below to learn the specific names of each ISO 9001
clause, and keep reading to get an idea of what each one is all about.
1. Scope
2. Normative References
3. Terms and Definitions
4. Context of the Organization
5. Leadership
6. Planning
7. Support

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Notes 8. Operation
9. Performance Evaluation
10. Improvement
Scope, References, Terms and Definitions
 Scope of the standard
 Normative references
 Terms and definitions
The first three clauses in ISO 9001:2015 are scope, references, and terms and
definitions. These are informational clauses, rather than clauses that outline any
kind of actions or requirements. This is something we will get into in a later section

1. Scope of the standard

The scope of the standard highlights the two basic tenets of what quality
management is intended to achieve.
The standard encourages businesses to implement processes and systems to ensure
consistent product and service output, while ensuring that customer satisfaction
is enhanced through conformity and improvement.
2. Normative references
Normative references provide a better understanding of the terms used in ISO
9001:2015 through relatable comparisons to the vocabulary that are used in the
ISO 9000:2015 standard.

3. Terms and definitions

References for better understanding of basic terms by highlighting vocabulary and
definitions from ISO 9000:2015. Refer to ISO 9000:2015 Quality Management
Systems Fundamentals and Vocabulary.
Other related and applicable standards that you could refer to might include,
among others:
• ISO 9004-2018 Quality management — Quality of an organization —
Guidance to achieve sustained success
• ISO 19011-2018 Guidelines for auditing management systems
• ISO 10004-2018 Quality management — Customer satisfaction —
Guidelines for monitoring and measuring

5.12 Implementation of Quality Systems

The fourth clause in ISO 9001 outlines the general requirements for the entire
quality management system as a whole.
Understanding organizational context

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Collate evidence to provide assurance that your organization is regularly, or as Notes

necessary, reviewing and updating information relating to its external and internal
issues.
Although there is no requirement for documented information to define the context
of the organization, your organization will find it helpful to retain the types of
documented information listed below to help demonstrate compliance:
 Business plans and strategy reviews
 Competitor analysis
 SWOT analysis for internal issues
 PESTLE analysis for external issues
 A list of external and internal quality issues and conditions
 QMS action plans and objectives
 Annual reports
 Minutes of meetings (e.g. management review, design review minutes,
etc.)
 Process maps, tables, spreadsheets, and turtle diagrams, etc.
 Reviewing your organization’s context should include interviews with
senior management, questionnaires, surveys and research. Cross-functional
input is essential for gaining the expertise to identify the full range of issues,
such as finance, training, human resources, commercial, engineering and
design, etc.

Understanding the needs and expectations of relevant stakeholders

Similar to the context review discussed above, cross functional input is vital,
as certain functions will identify with particular stakeholders, for example
procurement with suppliers, and sales with customers.
A workshop approach should be encouraged which can be undertaken independent
to, or in conjunction with the context review workshop.
Once stakeholders and their requirements are identified, the next step is to
consider which stakeholder requirements generate compliance obligations. Legal
requirements should be identified before other requirements.
This process of adopting requirements will allow you to focus and coordinate on
what’s important.
Determining the scope of the management system
You will need to verify that your organization’s scope exists as documented
information (which may be contained in the quality manual) in accordance with
Clause 7.5.1a.

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Notes Verify that the organization’s scope has been established in consideration of
organization’s boundaries and applicability of the quality management system.
Look for confirmation that your organization has determined the boundaries
and applicability of the quality management system to establish its scope with
reference to any external and internal issues referred to in 4.1 and the requirements
of relevant interested parties referred to in 4.2.
The scope of your quality management system may include the whole of the
organization, specific and identified functions within the organization, specific
sections of the organization, or one or more functions across a group of
organizations.

The quality management system and its processes

ISO 9001:2015 include specific requirements necessary for the adoption of
processes when developing, implementing and improving a quality management
system.
This requires your organization to systematically define and manage processes
and their interactions so as to achieve the intended results in accordance with both
the policy and strategic direction.
 How well is the ‘process approach’ understood in the organization?
 Is the quality management system in line with the organization’s context,
and requirements of interested parties?
 Is it likely the established quality management system will achieve its
intended outcomes and enhance quality performance?
 Does it include the enhancement of quality management system
performance?
 Does it include the desire to fulfill of compliance obligations and objectives?
Existing operational procedures, work instructions and flow charts are valid
examples of documented information and can be used to evidence the requirement
for ‘documented information to support the operation of processes is being met’.
When an outsourced process is controlled through purchasing, there must be
documented information to ensure that the processes are being controlled - using
techniques like:
 Auditing and inspections
 Contractual agreements
 Trend monitoring
 Quality and commercial reviews
 Process performance data review on an on-going basis

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Leadership Notes
 Demonstrating leadership and commitment, and customer focus
 Establishing and communicating the quality policy
 Establishing roles of authority and responsibility in the workplace
Management responsibility has to do, mainly, with customer commitment
requirements. This is basically the company’s commitment to serving the customer
and building a more loyal following.

Demonstrating leadership and commitment, and customer focus

This section also establishes a general focus of the company, in terms of the
customer. In other words, the company is pledging to always keep the customer
happy, and do what they can to improve their products, services, and procedures
accordingly.
Without solid management commitment, you will not have a successful quality
management system. This is not a commitment in words; it is the continuous
and active demonstration to everyone in the organization that the need to meet
customers’ expectations is vital.

The actions required of Top management include:

Supporting the quality management system and actively promoting the agenda
► Encouraging the goal of meeting, customer, regulatory and statutory
requirements Develop and support the quality management system by:
 Defining and communicating the quality policy
 Establishing organizational quality objectives
 Ensuring appropriate resources are available

Implement and improve the quality management system by:

 Encouraging employees to achieve requirements
 Reviewing QMS performance
 Ensuring resources are available to improve the QMS
Customer focus involves determining customer requirements and ensuring that
processes exist to meet the requirements and achieve customer satisfaction.
Enhance customer satisfaction by ensuring that customer requirements are
identified and cascaded.
Establishing and communicating the quality policy
Management responsibility also helps a company define a quality policy and
objective guidelines, and provides help with QMS planning as a whole.
ISO 9001:2015 requires an organization’s policies to be appropriate to both its
purpose and context. This means that once your organization has determined its

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Notes context and the relevant requirements of its interested parties, Top management
must review the policies in light of that information.
ISO 9001:2015 also requires that the policies are maintained as documented
information, refer to Clause 7.5.1a. You should check whether the policies have
been established communicated and understood throughout your organization.
The policies must also be available to any relevant interested parties.
A quick and convenient way to promote and communicate the policy might be to
create a shortened version of main policy; try condensing it to five key words or
even a couple of short sentences.
This can be posted on bulletin boards in each department. You could even add it
to the reverse side of staff security passes or ID badges

Establishing roles of authority and responsibility in the workplace

The definition of authority and responsibility in the workplace is another vital
aspect of ISO 9001.
Each employee needs to know who is responsible for the various elements of the
quality management system to ensure successful implementation, operation and
maintenance.
You should develop and make available to all employees a list of personnel and
their job descriptions, competence requirements, responsibilities, along with an
organizational chart of employees as they relate to the QMS.
An effectively implemented quality management system aligns the policies with
strategic and management system objectives and provides the framework upon
which to translate these objectives into functional targets and measures.
Establish and maintain documented quality objectives and indicators, at each
relevant function and level within the organization. The objectives and indicators
help establish an important link between the quality policy and the management
programme.
The objectives and targets must be consistent with the quality policy. It is also
important to ensure that the quality objectives and associated key performance
indicators (KPIs) are mutually consistent.
It is important to ensure KPIs are meaningful to all key stakeholders including
the customer(s), top management, supervisors and the staff who actually produce
the products and services.
Properly designed and implemented, management programme should achieve
the objectives and, consequently, improve your organization’s performance. The
management programme must:
 Address each objective and target
 Designate personnel responsible for achieving targets at each function/
level of the organization

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 Provide an action plan describing how each target will be achieved Notes
 Establish a time-frame or a schedule for achieving each target
Establishing an action plan for each objective may require considerable effort on
the part of the personnel at relevant levels within your organization.
To ensure the progress of the action plan and a coordinated effort, a target leader
should be selected for each target who will be responsible for ensuring a target is
achieved within the specified time-frame.

4.1 Planning for change / change

management
Changes are intended to be beneficial but they need to be carried out when
determined by your organization as relevant and achievable. In addition,
consideration of newly introduced risks and opportunities should also be taken
into account.
To achieve the benefits associated with changes, your organization should consider
all types of change that may occur. These changes may be generated, for example by:
 Processes and procedures
 Documented information
 Infrastructure
 Tooling
 Process equipment
 Employee training
 Supplier evaluation
 Stakeholder management
 Interested party requirements

4. Support
 Resources
 Competence
 Awareness
 Communication
 Documented information
It is really important that a business has the proper resources for everyone who
is involved, no matter if they make purchases with the company or go to work
there every day. An organized and professional workplace is paramount to the
successful implementation of a quality management system!

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Notes 5. Operation
 8.1 Operational planning and control
 8.2 Determining requirements for products
 8.3 Design and development of products and services
 8.4 Control of external processes, such as suppliers and contractors
 8.5 Production and service provision
 8.6 Release of products and services
 8.7 Nonconforming products or services
Clause 8 is comparable to the requirements from ISO 9001:2008 Clause 7.1 –
Product Realization Planning, but it has been extended to include implementation
and control, as well planning, evidence of controls, acceptance criteria and
resources to address risks and opportunities

Internal auditing
These sub-clauses provide a clear framework for planning and conducting internal
audits. The internal audit process is a primary tool ensure the QMS is operating
effectively.
During the early stages of implementing ISO 9001:2015, or any other management
system standard, the internal audit programme often focuses on ensuring that any
compliance issues or non-conformities are discovered and rectified prior to the
Certification Body assessment
However, once your organization becomes certified, the audit programme must
evolve. The focus of the internal audit programme should be re-directed, away from
‘elemental’ compliance with ISO 9001:2015, to an audit strategy that considers
the ‘status and importance’ of each process comprising the quality management
system.
If your current internal audit programme been developed on an annual calendar
that merely forecasts which aspects of your quality management system are
going to be audited, you should stop Begin programming your internal audits
by basing the audit frequency upon current process performance data, feedback
from customers, etc.

Management review
Here’s what ISO 9001:2015 is really all about: defining a policy, creating a plan
devising with relevant objectives. Implement the QMS according to the plan, begin
auditing, monitoring and measuring performance against the plan and reacting
to your findings.
Bi-annual management reviews are insufficient in frequency to be able react to
any issues effectively. Performance metrics should be monitored with varying
frequencies, some hourly, some daily, some weekly and some monthly.

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Management cannot wait for six months to respond, if they do, it will be too Notes
late. Every time management convenes to review and react to performance, it is
considered as a management review.
Whether they are reviewing an individual’s performance, departmental programmes
and projects, etc., this should be considered as valid management review.
Some companies have multiple review levels, whereby, each review may require
multiple subjects and rely upon multiple metrics as inputs. Sometimes subjects
are reviewed at more than one level, e.g. production numbers might be reviewed
by the production teams during daily production meetings and then by senior
management, possibly weekly.
Top management might conduct weekly meetings in which they review metrics
and objectives to determine if any corrective action is required. The process owner
is then responsible for reporting close out progress in the meeting a week later.
Management review meeting minutes should be retained as documented
information!

IMPLEMENTATION OF QUALITY SYSTEMS IN DETAIL

What is a QMS and why is it Important?

QMS consists of written and controlled guidelines and procedures that form a
foundation for all procedures. An organized QMS ascertains the steps for key
processes and forms methods in preventing failures in a timely manner. QMS is
organized to protect the brand, organization processes, and the customers’ interest.

What are the benefits of implementing a QMS?

Implementation of quality management system should result in many long-term
financial gains. Here is the list of few benefits of effective implementation of a
QMS:
1. Achieve organizational goals.
2. Reduce costly errors.
3. Improve customer satisfaction.
4. Market your business more effectively.
5. Manage growth more effectively.
6. Improve documentation availability.
7. Correct issues to improve products and services.
8. Grow market share in new territories and market sectors.
9. Creates a culture of quality.
10. Embed vision for all projects.

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Notes 11. Better internal communications.

12. Consistent products.
13. Measure performance of individuals and teams.
14. Improve compliance.

What does a QMS need?

A quality management system requires many important elements. Here are few
of them:
• Documented quality policy and quality objectives.
• A quality manual which will document scope, exclusions with justification.
QMS includes documented procedures, guidelines, checklists. This will allow
observed quality and continuous improvement.
• Document procedures mandated by the compliance standard.
• Documents required by the company for effective planning, operation,
monitor, and control.

The Importance of Hierarchical Organization

An organization is spirited when working with controlled documents. A suggested
hierarchy for QMS documentation management is:
1. Quality Manua
2. Policies
3. Procedures
4. Work Instructions
5. Lists
6. Checklists
7. Forms
Steps for the Creation of an Effective QMS
The steps required for the conceptualization and implementation of a
QMS include the following:
1. Define and Map Your Processes
Process maps creation will force the organization to visualize and define their
processes. In the process, they will define the interaction sequence of those
processes. Process maps are vital for appreciating the responsible person. Define
your main business process and converse the flow.
2. Define Your Quality Policy
Your Quality Policy communicates the duty of the organization as it is about
the quality. The mission may be what customers need, a quality mission. When

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constructing quality management system, consider the commitment towards Notes

customer focus. It may be Quality, Customer Satisfaction, and Continuous
Improvement.

3. Define Your Quality Objectives

All Quality management systems must have objectives. Each employee must
appreciate their influence on quality. Quality objectives are derivative of your
quality policy. It is measurable and set up throughout the organization.
The objective may be in the form of critical success factors. This helps an
organization in emphasizing the journey towards accomplishing its mission.
These performance-based measures deliver a gauge to determine compliance
with its objectives.
Some Critical Success Factors are:
 Financial Performance
 Product Quality
 Process Improvement
 Customer Satisfaction
 Market Share
 Employee Satisfaction

4. Develop Metrics to Track and Monitor CSF Data

Once critical success factors are known, measurements and metrics keep track of
advancement. This can be done through a data reporting procedure used to collect
specific data. Share the processed information with leaders. A process goal is to
enhance customer satisfaction index score. There needs to be a goal and a measure
to establish achievement of that goal.

5. Define Defects for Every Process

Defects are non-conformances that happen as a product flaw or a process
deficiency. Whenever a defect occurs it needs to be measured and corrected.
Identify the required corrective action. When defining your defects:
 Determine operation volume
 Determine defects in product and process
 Define a process to record defects
 Define a process to report defects in specified formats
6. Develop Documents and Records
QMS needs to have some documented information and formats. Start with the
minimum required document set and add when needed.
 Create mandatory document information as per business model

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Notes  Create essential Quality policies, procedures, and forms

 Create documented information and formats (records) for each defined
process

7. Define Quality Process

Your quality procedure includes internal audit, Management review, Corrective
and preventive action process and communication processes.
8. Determine Training Needs
Everyone needs to exhibit competency in the job. Training is only the start and can
happen on the job, it can be a classroom or e-learning. Some important training
areas are- Internal auditor competence, Corrective Action training. Failure Modes
Effects Analysis (FMEA) training.
1. Use Quality Management System
Using the QMS means producing the best quality product. In the process
 Collect non-conformance and record them.
 Review this data for corrective and preventive action.
 Review FMEAs for risk and actions, as and when required.
 Perform internal audits and conduct management reviews.

2. Measure, Monitor and implement activities to Improve the

Performance
Using quality management system means collecting data. Analyze this data to
check if the collected data is good to use and if the intended results can be derived.
You need to:
 Track Quality Objectives and its performance
 Define few new performance yardsticks
 Determine improvement chances in the data by recognizing trends, patterns,
or correlations.
If you have identified trends through data, then it is time to act. The goal is to
bring improvement and this occurs by:
 Arranging your improvement opportunities
 Choosing prospects that make a difference
 Supporting ‘commitment to quality’ to attain better results

DOCUMENTATION OF QUALITY SYSTEMS:

A quality management system (QMS) is a formalized system that documents
processes, procedures, and responsibilities for achieving quality policies and

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objectives and thus consistently delivering a quality product or service to the Notes
customer. A QMS helps to coordinate and direct an organization’s activities to meet
customer and regulatory requirements and continually improve its effectiveness
and efficiency. The QMS documentation must accurately and succinctly document
the organisation’s structure, procedures, processes and resources.

Step 1: Identify documentation

Identify all your processes and the interaction between them using a Process
Map, analysis of the processes should then be used to determine the amount of
documentation needed for the QMS. QMS standards will determine mandatory
documents, for example ISO13485:2016 lists Quality Manual, Quality Policy,
Quality Objectives, Quality Records and six procedures as listed below as
mandatory documentation:
1. Control of Documents
2. Control of Records
3. Internal Audit
4. Control of Nonconforming Product
5. Corrective Action
6. Preventive Action
Thereafter you only require procedures to cover each section of the standard that
applies to your business and the complexity of the business will dictate the amount
of documentation and level of detail needed.

Step 2: Identify structure of documentation.

This structure is applicable to all organisations regardless of its size or complexity
and we would recommend that this structure is adopted for your organisation.

Figure 1 describes a typical QMS documentation hierarchy with different document

types at each level as follows:

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Notes Quality Manual

Describes both the QMS in place and what you are going to do as an organisation
to implement the QMS. The Quality Manual should include the scope of the
QMS, details of and justification for any exclusion, references to documented
procedures and a description of the processes of the QMS and their interactions
which is usually presented as a diagram.

Quality procedures
Describes how the organisation implements the QMS by documenting the
applicable processes. Format can include text, flowcharts, tables, a combination
of the above as best meets the needs of the organisation. Procedures usually cross
reference work instructions.

Work Instructions
Describe an activity within a process and provide detailed descriptions of how
to perform and record tasks. The structure, format and level of detail required
depends on the complexity of the work, methods used, training undertaken and
competence of personnel who execute the work instructions.

Quality Records
Serve as evidence that the organisation has done the work documenting the actions
of an activity or process.

Step 3: Generate QMS documents

QMS documents detail the organisation’s structure, procedures, processes
and resources and when followed result in a quality product or service being
consistently delivered to the customer. Good documentation will determine
employees understanding of the processes such that they can implement and
document them accordingly as quality records, thus documents need to be easy
to read, have a natural logical flow, use simple & clear language and be concise.
These attributes will ensure an understanding of the content and information being
conveyed. If time and effort is employed at this stage in getting the documents
to required standard it will avoid time and effort later in revision of documents.
Documents should be generated by the process owners as they are the people who
best understand the processes. The first documents that need to be generated are
the quality procedures of which the document control procedure should be drafted
first. The document control procedure describes the structure of all document
types within the QMS and so is the first building block in the design of QMS
documentation. The document control procedure addresses the following:
 Review and approval of documents for adequacy prior to issue
 Review of documents and update as necessary and re-approval
 Ensures correct revision status of and changes to documents are identified

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 Ensures relevant versions of applicable documents are available at points Notes

of use
 Ensures documents remain legible and readily identifiable
 Ensures documents of external origin are identified and their distribution
controlled
 Prevents deterioration or loss of documents
 Prevents unintended use of obsolete documents and application of suitable
identification to them.
 The next quality procedure documents to be generated should be those
mandated by the quality standard your organisation is following and as
you draft these documents you can start generating the Quality Manual
which will reference these documents.
 The last documents to be generated are those required to cover each
section of the standard that applies to your business. Once all the quality
procedures are generated you can start drafting the work instructions, and
once all the procedures and work instructions are generated cross check
them against your Quality Manual to ensure the Quality Manual gives an
accurate overview of your QMS.
Step 4: Implement documentation system
Document control procedure details the documentation system in place and how
it is to be implemented. The system in place must ensure that all documents are
controlled, legible, readily identifiable, retrievable, available at points of use and
reviewed regularly for ongoing suitability throughout product/service lifecycle.
This procedure must be followed for all controlled documents. Documents detail
the organisation’s structure, procedures, processes and resources and are needed
as objective evidence for regulatory compliance and are auditable thus document
control procedure is critical as if it isn’t operating properly you will very quickly
run into compliance problems and will have to apply costly resources to address
problems.
Step 5: Maintenance and Improvement
Maintenance and continuous improvement of documentation is
very important. Documentation needs to be maintained in line with document
control procedure such that the organisation is in compliance with QMS and
regulations. Documentation needs to be regularly reviewed and data from QMS
processes evaluated to identify any changes required. Updates and improvements
are identified because of changes in processes, non- conformances, audits, training,
identified improvements and changes to standards

QS 9000 AUTOMOTIVE QUALITY SYSTEM:

QS-9000 is a quality system standard that focuses on helping automotive suppliers
ensure that they are meeting/exceeding automotive customer requirements. As

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Notes mentioned before, it uses ISO 9000 as a core (document control, corrective action,
auditing, etc.), but adds quite a few additional requirements.

ISO 16949:2009
ISO/TS 16949:2009, in conjunction with ISO 9001:2008, defines the quality
management system requirements for the design and development, production
and, when relevant, installation and service of automotive-related products.
ISO/TS 16949:2009 is applicable to sites of the organization where customer-
specified parts, for production and/or service, are manufactured.

ISO 14000 ENVIRONMENTAL MANAGEMENT STANDARDS:

ISO 14000 is defined as a series of international environmental management
standards, guides, and technical reports. The standards specify requirements for
establishing an environmentalmanagement policy, determining environmental
impacts of products or services, planning environmental objectives, implementing
programs to meet objectives, and conducting corrective action and management
review.

PROMOTING ENVIRONMENTAL MANAGEMENT SYSTEMS WITH

ISO 14000
The primary objective of the ISO 14000 series of standards is to promote effective
environmental management systems in organizations. The standards seek to
provide cost- effective tools that make use of best practices for organizing and
applying information about environmental management.
The ISO 14000 family was developed in response to a recognized industry need
for standardization. With different organizational approaches to environmental
management, comparisons of systems and collaboration had proved difficult.
ISO 14000 FAMILY OF STANDARDS:
 ISO 14000 standards and practices can be applied to any organization,
regardless of size or industry.
 ISO 14001:2015 is the most popular standard of the ISO 14000 family,
which also includes the following standards:
 ISO 14004:2016 - Environmental Management Systems - General
Guidelines On Implementation
 ISO 14006:2011 - Environmental Management Systems - Guidelines For
Incorporating Ecodesign
 ISO 14015:2001 - Environmental Management - Environmental
Assessment Of Sites AndOrganizations (EASO)
 ISO 14020:2000 - Environmental Labels And Declarations - General
Principles

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 ANSI/ISO 14025:2006 - Environmental Labels And Declarations - Type Notes

III EnvironmentalDeclarations - Principles And Procedures
 ISO 14031:2013 - Environmental Management - Environmental
Performance Evaluation -

Guidelines
 ISO 14040:2006 - Environmental Management - Life Cycle Assessment
- Principles AndFramework
 ASQ/ANSI/ISO 14044:2006 - Environmental Management - Life Cycle
Assessment -

Requirements And Guidelines

 ISO/TR 14047:2012 - Environmental Management - Life Cycle Assessment
- IllustrativeExamples On How To Apply ISO 14044 To Impact Assessment
Situations
 ISO/TR 14049:2012 - Environmental Management - Life Cycle Assessment
- IllustrativeExamples On How To Apply ISO 14044 To Goal And Scope
Definition And InventoryAnalysis
 ISO 14050:2009 - Environmental Management - Vocabulary
 ISO 14063:2006 - Environmental Management - Environmental
Communication -

Guidelines And Examples

 ISO 14064-1:2018 - Greenhouse Gases - Part 1: Specification With
Guidance At TheOrganization Level For Quantification And Reporting
Of Greenhouse Gas Emissions AndRemovals
 ISO 14064-2:2019 - Greenhouse Gases - Part 2: Specification With Guidance
At The ProjectLevel For Quantification, Monitoring And Reporting Of
Greenhouse Gas EmissionReductions Or Removal Enhancements
 ISO 14064-3:2019 - Greenhouse Gases - Part 3: Specification With
Guidance For TheVerification And Validation Of Greenhouse Gas
Statements
 ISO 14067:2018 - Greenhouse Gases - Carbon Footprint Of Products -
Requirements AndGuidelines For Quantification
 ISO/TR 14069:2013 - Greenhouse Gases - Quantification And Reporting
Of GreenhouseGas Emissions For Organizations
 ISO/TS 14071:2014 - Environmental Management - Life Cycle Assessment
- CriticalReview Processes And Reviewer Competencies: Additional
Requirements And GuidelinesTo ISO 14044:2006.

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Notes  ISO/TS 14072:2014 - Environmental Management - Life Cycle Assessment

- Requirements And Guidelines For Organizational Life Cycle Assessment
 ISO 19011:2018 - Guidelines For Auditing Management Systems

ISO 14000 history

History of ISO 14000

• The first environmental management system standard, BS 7750, was
published in 1992 by the BSI group.
• In 1996, the International Organization for Standardization (ISO) created
the ISO 14000 family of standards.
• ISO 14001 underwent revision in 2004.
• The current revision of ISO 14001 was published in September 2015.

CONCEPTS OF ISO 14001:

Created in 1996 by the International Organization for Standardization, ISO 14001
standards are part of a family of standards (ISO 14000) designed to promote and
guide an environmental management approach. It is appropriate for any kind
of organization (company, NGOs, union, etc) concerned about improving its
system of production, management, and operations as a way to better control its
environmental impacts. The guidelines of this norm (that were updated in 2015)
can be checked and certified by an approved organization, as we’ll further explain

What are Ithe SO 14001 standards for? ISO 140001 has 2 main objectives:
 To give a standardized and proven framework that can help organizations
to develop an effective environmental management strategy;
 To work as an official recognition and prize for the organizations’ efforts
to improve their environmental strategies.

The principles of the ISO 14001

The application of ISO 14001 is not a legal obligation and like all standards set
by ISO, adopting it is voluntary. Nevertheless, despite not being mandatory, it
imposes a compliance commitment with the current environmental regulation
and its future developments for those who follow it. The basic principle of ISO

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norms is the search for continuous improvement, in successive cycles, according Notes
to the four-step process of the Deming (PDCA) cycle:
 Plan
 Do
 Study/Check
 Act

Implementing the ISO 14001 standards

Following the steps of the cycle PDCA mentioned above, the implementation of
the ISO 14001 standards is carried out in three stages:
At first, there is the need to audit the current organizational practices regarding
environmental management and their compliance or non-compliance with the
regulations and objectives of the ISO 14001 standards. This will allow organizations
to identify and have a clear picture of their procedures, making it easier to re-think
and transform them in order to achieve the necessary improvements required by
the ISO 14001 standards. This self-audit can be done internally before-hand, but
all the information about the organization’s environmental procedures and policies
will have to be endorsed to the certification entity and confirmed by its consultants.
Once the inventory has been completed, a program of measures to be taken and
actions to be developed (prerequisites needed for the certification) need to be
established and implemented according to an appropriate schedule. For example,
if the audit has identified that the organization is poorly managing its paper
resources, the program of measures will probably focus on the establishment of
an effective management procedure for these resources.
Finally, a rigorous evaluation of the new practices and their environmental impact
will be carried out regularly (an annual audit within every three years), where
updates or changes on the organizations’ environmental management systems
may be requested.

Where to get ISO 14001?

The full text of ISO 14001 is available (upon payment) via the ISO online
consultationplatform. The certification itself, renewable in three-year cycles, can
be requested from the following accredited bodies (non-exhaustive list):
 ANSI (American National Standards Institute)
 IAF (International Accreditation Forum)
 BSI Group

The environmental benefits of ISO 14001

ISO 14001 standards are above all a management tool. As such, they do not impose
certified organizations to achieve certain environmental objectives. Instead, ISO

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Notes 14001 demands certificated organizations to have a system of procedures that

must be respected in order to manage their environmental impacts. An ISO 14001
certified organization is not necessarily an ecological one, what it means is that it
has a system that allows it to improve on its environmental issues.

ELEMENTS OF ISO 14001:

Environmental policy
 Top management shall define its organisation’s environmental policy,
and ensure it is appropriate to the environmental impact of its activities,
products and services.
 Commitment to continuous improvement, prevention of pollution
and compliance with legislation and regulations shall be documented,
implemented and maintained.
 The environmental objectives and targets shall be set and reviewed.
 The policy shall be communicated to all persons working for the
organisation and be made available to the public.

Planning
 Procedures shall be established and maintained for activities, products and
services which can have significant impacts on the environment.
 Procedures are required for identifying applicable legal requirements
and maintaining objectives and targets at relevant functions within the
organisation, whilst considering legal, technology options, financial,
operational and business requirements.
 Programmes shall be maintained for achieving objectives and targets
including designation of responsibilities, means and time frame for
achievement.

Implementation and operation

 Resource with clear definition of roles, responsibilities and authority shall
be provided, documented and communicated, including management
representatives for reporting on the performance to top management.
 Training needs shall be identified for personnel whose work may create
significant impact upon the environment. Procedures are required to make
employees aware of importance of conformance with policy, roles and
responsibilities, emergency preparedness and response requirements.
 Activities associated with significant environmental aspects shall be
planned in line with policy, objectives and targets to ensure that they are
conducted under specified conditions.

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 The potential for accident and emergency situations shall be identified in Notes
order to prevent impact on the environment that may be associated with
them. A review of emergency preparedness and response procedures shall
be carried out and periodically tested where practicable.

Checking and corrective action

 Key characteristics of the operation which have significant impact on the
environment shall be monitored and measured on a regular basis.
 Monitoring equipment shall be calibrated, maintained and recorded.
 Environmental legislation and regulations shall be periodically evaluated.
 Non-conformances shall be investigated and action taken by authorised
responsible persons. Corrective or preventative actions shall be taken to
eliminate the causes of actual and potential non-conformances.
 Audits of the environmental management system shall be carried out at
planned intervals to determine conformance to planned arrangements.
Management review
The environmental management system shall be reviewed at planned intervals to
ensure its continuing suitability, adequacy and effectiveness.

BENEFITS OF ISO 14001:

It is becoming more and more important to demonstrate that organisations are
thinking about their environmental impact and putting in place systems that will
not only benefit the environment but will also reduce costs and improve efficiency
within the organisation.

The benefits of showing conformance to the ISO 14001 standard are

numerous:
 Cost savings in waste, recycling and consumption
 Advantage over competitors when tendering for business
 Management of environmental risks
 Compliance with individual countries environmental regulations
 Demonstrates your commitment to improving the environment
 Shows you are a responsible future focused organisation
 Can reduce insurance cover costs
 Can increase employee engagement in the knowledge that they are working
in an environmentally friendly organisation
Having a well-defined Energy Management System (EMS) framework will
provide your organisation with a systematic approach to compliance. In some

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Notes cases regulatory bodies are more flexible with companies with performance and
public accountability records.
In addition, Officials from the U.S. Environmental Protection Agency (EPA)
and Occupational Health and Safety Administration (OSHA) have indicated
that certification may lead to a reduction in the number of inspections required
for obtaining permits. In unique circumstances, the EPA has reduced fines on
the condition that financial resources are put into better practices, including
compliance to ISO 14001.
Through the General Agreement on Tariffs and Trade (GATT), ISO 14001 is
expected to become a prerequisite for doing business worldwide. Experts say that it
is the market forces, which will drive acceptance of the new global environmental
standards.
ISO 14001 is also compatible with other management standards such as ISO 9001,
OHSAS18001and ISO 27001.

IV SUMMARY
Standards are important in ensuring the TQM culture in organizations. The Quality
Management Systems use various standards and guiding principles for ensuring
the adherence to objectives and also to improve the performance. Quality Audit
will reveal the local stand of the system. The leadership plays an important and
indispensable role to win over the employees in organization through various
methods of recognition and reward. The developments in IT helped in defining
quality functions and the computers and internet are used to address to the issues
related to information quality.

V KEY WORDS
Quality Management Systems. Quality Audits, Quality Council. ISO-9000.

VI CASE STUDY: Establishment of

Quality Strategy for Brix & Co
Brix & Co is a proprietorship firm located in Dhaka. It is a TV Spare parts
manufacturing company. It is in existence for more than 55 years. There are recent
plans in the company to export its products abroad. Twenty young professionals
who are highly talented were also recruited recently.
The proprietor, Mr. Shah Alam is a strict disciplinarian who is 70 years old. He is
known for his autocratic style of management. Mr. Shah Alam attended seminar
organized for executives on quality management. Attracted by the principles taught
in the seminar, he wanted to make his company a quality company. The same day
he sat alone till 2 am and formulated a vision statement for his company. The next

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day morning at 8 am he called for an urgent meeting of all the 60 employees he had Notes
and announce proudly his intentions of making the company a quality company.
He also announced the vision statement for the company. By 10 am about 100
placards with the vision statement were made ready and fixed in all important
locations. All the employees were surprised to see the placard everywhere and
wondered what it is all about. Mr. Shah Alam enforced that the vision of the
company has to be adhere to by everyone. He was confident that company will
soon become a quality company.
One month later, Mr. shah Azad approached his brother Mr. Shah Alam to help
him in starting a joint venture company. Mr. Shah Azad was new to business. Mr.
Shah Alam being very much attached to his family, readily agreed to his brother’s
proposal to start a new company. For the next six months, Mr. Shah Alam spent
more than 80% of his time in the establishment of the new company.
In the meantime, Brix & Co in Dhaka, had a setback. Even though Brix & Co
has set targets to exports, the situation was so bad, they could not even penetrate
the local market. Percentage rejection increased and the balance sheet showed
heavy loss.

Discuss:
1. What according to you is the reason for the setback in Brix & Co?
2. What would be your advice to Mr. Shah Alam to revamp the situation?
3. What would have been the right strategy for Mr. Shah Alam in the beginning?
4. Do you feel that Mr. Shah Alam should not have started the second company?
If he still wanted to start what he should have done?

VII REVIEW QUESTIONS

1. Expalin the procedure of establishing quality system in organizations.
2. Describe ISO 9004: 2000 and state its scope and applications.
3. Enumerate the guidelines for performance improvements in service sector.
4. “Culture place an important role in achieving TQM in organizations” –
Discuss.
5. Describe the various types of leaderships and explain their impact on the
employees.
6. Trace the developments in Information Technology over the years.
7. “Computers alone do not ensure quality” – Critically examine.
8. Detail the quality issues related to the information and explain the impact of
wrong information on quality ensuring process

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Notes
VIII REFERENCE BOOKS
1. Douglas C. Montgomory, “Introduction to Statistical Quality Control”, Wiley
Student Edition, 7th Edition, Wiley India Pvt Limited, 2012.
2. James R. Evans and William M. Lindsay, “The Management and Control of
Quality”, Sixth Edition, Thomson, 2010.
3. Poornima M.Charantimath, “Total Quality Management”, Pearson Education,
2nd edition, 2012.
4. “Indian standard – quality management systems – Guidelines for performance
Improvement” Fifth Revision, Bureau of Indian standards, New Delhi.

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