Total Quality Management.

Chapter 1
Introduction

1
Broadly defined, quality refers to the ability of a product or service to
consistency meet or exceed customers requirements or exceptions.
• Quality is a dynamic state associated with products, services, people,
process and environments that meets and exceeds customer
expectations.
• Quality is an attribute of a product or service that can be improved.
Quality is not only products and services but also includes processes,
environment, and people.
• Quality involves meeting or exceeding customer expectations in the
goods and services offered.

2
The American Society for quality Control defines , “Quality is a total
set of features and characteristics of a product or services that define
its ability to satisfy stated or implied needs.”

Quality has several different attributes David Gravin has identified

different quality dimensions on which a company can compete as well
as that determine the quality of a particular product or services. These
are:
• Product Quality dimensions:
• Service Quality dimensions:

3
a. Performance –is a measure of product’s primary operating
characteristics. That is how well the product or service performs the
customer’s intended use.
b. Features---important special characteristic of product that appeal to
customers. Customization of product quality.
c. Reliability-of a product relates to the probability that the product
will not fail or malfunctioning during a specified period of time. It
concerned with meeting operating specification over some period
of time. The likelihood of breakdowns, or need of repairs etc.
d. Durability- relates to the expected operational life of a product.
Amount of use before performance deteriorates. The length of time
or amount of use before needing to be repaired or replaced.

4
e. Conformance-is the degree to which a product’s design and
operating characteristics meet pre-established standards.
f. Serviceability--- is concerned with how readily a product can be
repaired and the speed, competence, convenience, and courtesy
associated with that repair.
g. Aesthetics — relates to the appearance of a product i.e. how a
product looks, feels, tastes, smells or sound.
h. Perceived quality--- is directly related to the reputation of the firm
that manufactures the product. Consumers rely heavily on the past
performance and reputation of the firm choosing the product,
attaching a perceived value. It is based on product image of a
company.

5
Service Quality dimensions:
a. Timeliness : Performed in promised period of time.
b. Courtesy : Performed cheerfully indicating politeness, respect and friendliness.
c. Consistency: Giving all customers similar experiences each time.
d. Convenience: Accessibility customers.
e. Completeness: Fully services as required.
f. Accuracy & reliability: Performed correctly each time.
g. Responsiveness: Willingness to help customers, and provide promote service.
h. Understanding: knowing the customer, his needs and requirements.
i. Communication: Keeping customers informed in a language they can understand.
j. Creditability: Honesty and trustworthiness.
k. Empathy: Caring, individualized attention provided by the firm to its customers.
l. Tangibles: Physical facilities, equipment and appearance of personnel
6
 Quality management is not just a strategy. It must be a new style of working,
even a new style of thinking. A dedication to quality and excellence is more
than a good business, it is a way of life, giving something back to society,
offering your best to others.
Quality Control:
A. Quality control is concerned with the prevention of defects in
manufacturing, so that the item may be made right and not have to be
rejected.
B. Quality control may also be defined as,” Quality control refers to the
systematic and regular control of variables that are inherent in the
manufacturing process as they affect the quality of the manufactured
products.”
C. According to A. Y. Feigorbaum,” Quality control is an effective system for
integrating the quality development, quality maintenance and quality
improvement efforts of the various groups in an organization, so as to
enable production of goods and services at the most economical levels,
which allow full customer satisfaction.

7
Total Quality Management:
• TQM has been recognized as a critical source of sustainable
competitive advantage. Many companies have demonstrated
improvement in achieving high quality and business performance.

• The Total Quality concept as an approach to doing business began to

gain wide acceptance in different developed economies in the late
1980s and early 1990s. However, individual elements of the
concept—such as the use of statistical techniques, team work, and
employee involvement — have been used by visionary organizations
for years. It is the pulling together and coordinated USC of these and
other previously disparate elements that gave birth to the
comprehensive concept known as total quality.

8
• TQM refers to a quality emphasis that encompasses to the entire
organization from supplier to consumer.
• “TQM is an approach to improving the effectiveness and flexibility of
business as a whole. It is essentially a way of organizing and involving
the whole organization, every department, every activity every single
person at every level.
• TQM is defined as both a philosophy and a set of guiding principles
that represent the foundation of a continuously improving
organization. It is the application of quantitative methods and human
resources to improve all the processes within an organization and
exceed customer needs now and in the future. TQM integrates
fundamental management techniques, existing improvement efforts,
technical tools under a disciplined approach.

9
• The TQM is a philosophy that involves every one in an organization in
a continuous effort to improve quality and achieve customer
satisfaction. TQM stresses three principles: customer satisfaction,
employee involvement and continuous improvement in quality.
• TQM is defined as creating an organizational culture committed to the
continuous improvement of skills, team work, processes, product and
service quality and customer satisfaction.
• Richard schonberger’s defines TQM as “continuous,
customer-centered and employee-driven improvement.”
• TQM may also be defined as, strategic commitment by the top
management to change its whole approach to business to make
quality a guiding factor in everything it does.

10
• TQM also involves benchmarking, product and service design, process
design, purchasing and problem solving tools.
• TQM consists of continuous improvement activities involving every
one in the organization—managers and workers—in a totally
integrated effort toward improving performance at every level. This
improved performance is directed toward satisfying such
cross-functional goal as quality, cost, schedule, mission need, and
suitability. TQM integrates fundamental management techniques,
existing improvement efforts, and technical tools under a disciplined
approach focused on continuous process improvement. The activities
arc ultimately focused on increased customer/user satisfaction.
• Total quality management is a philosophy that involves everyone in an
organization in a continual effort to improve quality and achieve
customer satisfaction.
11
The Eight quality management principles are:

QMP 1– Customer focus

QMP 2 – Leadership
QMP 3– Involvement of people
QMP 4– Process approach
QMP 5 – System Approach to Management
QMP 6– Continual Improvement
QMP 7– Factual Approach to Decision Making
QMP 8- Mutually beneficial supplier relationships

Customer Focus: The primary focus of quality management is to meet

customer requirements and to strive to exceed customer expectations.

12
Principle 1 – Customer focus
Organizations depend on their customers and therefore should
understand current and future customer needs, should meet customer
requirements and strive to exceed customer expectations.
Key Benefits:
Increased revenue and market share obtained through flexible and fast
responses to market opportunities
Increased effectiveness in the use of the organization’s resources to
enhance customer satisfaction
Improved customer loyalty leading to repeat business.

13
Principle 2 – Leadership
Leaders establish unity of purpose and direction of the organization.
They should create and maintain the internal environment in which
people can become fully involved in achieving the organization’s
objectives.
• Key Benefits:
• People will understand and be motivated towards the organization’s
goals and objectives
• Activities are evaluated, aligned and implemented in a unified way
• Mis-communication between levels of an organization will be
minimized.

14
Principle 3 – Involvement of people
• People at all levels are the essence of an organization and their full
involvement enables their abilities to be used for the organization’s benefit.
• Key Benefits:
• Motivated, committed and involved people within the organization
• Innovation and creativity in furthering the organization’s objectives
• People being accountable for their own performance
• People eager to participate in and contribute to continual improvement.
Principle 4 – Process approach
• A desired result is achieved more efficiently when activities and related
resources are managed as a process.
• Key Benefits:
• Lower costs and shorter cycle times through effective use of resources
• Improved, consistent and predictable results
• Focused and prioritized improvement opportunities.
15
• Principle 5 – System approach to management
• Identifying, understanding and managing interrelated processes as a
system contributes to the organization’s effectiveness and
efficiency in achieving its objectives.
• Key Benefits:
• Integration and alignment of the processes that will best achieve the
desired results
• Ability to focus effort on the key processes
• Providing confidence to interested parties as to the consistency,
effectiveness and efficiency of the organization.

16
• Principle 6 – Continual improvement
Continual improvement of the organization’s overall
performance should be a permanent objective of the organization.
• Key Benefits:
• Performance advantage through improved organizational capabilities
• Alignment of improvement activities at all levels to an organization’s
strategic intent
• Flexibility to react quickly to opportunities.

17
Principle 7 – Factual approach to decision making
• Effective decisions are based on the analysis of data and information
Key Benefits:
• Informed decisions
• An increased ability to demonstrate the effectiveness of past
decisions through reference to factual records
• Increased ability to review, challenge and change opinions and decisions.
Principle 8 – Mutually beneficial supplier relationships
• An organization and its suppliers are interdependent and a mutually
beneficial relationship enhances the ability of both to create value
Key Benefits:
• Increased ability to create value for both parties
• Flexibility and speed of joint responses to changing market or customer
needs and expectations
• Optimization of costs and resources.

18
We can describe the TQM approach as follows:
• Find out what customers want. This might involves the use surveys, focus
groups, interviews ,or some other technique that integrates the customer’s
voice in the decision making process. Be sure to include the internal and
external customer.
• Design a product or service that will meet (or exceed what customers want.
Make it easy to use and easy to produce.
• Design a production process that facilitates doing the job right the first
time. Determine where mistakes are likely to occur again. Strive to make
the process ‘mistake-proof.
• Keep tract of result and use those to guide improvement in the system.
Never stop trying to improve.
• Extend these concepts to suppliers and to distribution.
• Successful TQM programs are dedication and combination efforts of
everyone in the organization.

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TQ Practices
TQ practices can be classified into six basic areas of management that
are generic to any organization:
1. Strategic planning and design of organizational and work systems
2. Customer engagement and knowledge acquisition
3. Workforce management
4. Process management
5. Information and knowledge management
6. Leadership

20
T.Q Techniques
TQ techniques include a wide variety of tools and statistical methods to
plan work activities, collect data, analyze results, monitor progress, and
solve problems. For instance, a chart showing trends in manufacturing
defects as workers progress through a training program is a simple tool
to monitor the effectiveness of the training; the statistical technique of
experimental design is often used in product development activities.
Throughout this book we will introduce many techniques that are
useful in quality planning, control, and improvement activities.

21
 Elements or characteristics of TQM
• The TQM approach has the following characteristics or key elements:
i. Strategically based
ii. Customer focus
iii. Obsession with quality
iv. Scientific approach to decision making and problem solving
v. Long term commitment
vi. Teamwork
vii. Continual process improvement
viii. Educational and training
ix. Freedom through control
x. Unity of purpose
xi. Employee involvement and empowerment

22
i.Strategically based-Total-quality organization have a comprehensive
strategic plan that contains at least the following elements: vision, mission,
broad objectives, and activities that must be completed in order to
accomplish the broad objectives. The strategic plan of a total-quality
organization is designed to give a sustainable competitive advantage in the
market place. The competitive advantages of a total-quality organization are
geared toward achieving world-leading quality and improving on it
continually forever.
ii.Customer focus: In total-quality setting, the customer is the driver. This
applies to both internal and external customers. External customers-those
who purchases or use the products or services—define the quality of the
product or service delivered. Internal customers-fellow employees whose
work depends on the work that precedes them—help define the quality of
the people, processes, and environments associated with the products or
services. Under quality leadership, an organization’s goal is to meet and
exceed customer needs, to give lasting value to the customer.

23
iii.Obsession with quality-In a total quality organization, internal and
external customers define quality. With quality defined, the
organization must then become obsessed with meeting or exceeding
this definition. This means all personnel at all levels approach all
aspects of the job from the perspective of “How can we do this
better?” When an organization is obsessed with quality, good enough is
never good enough.
iv.Scientific Approach: While it is true that people skills, involvement,
and empowerment are important in a total-quality setting, they
represent only a part of the equation. Another important part of the
equation is the use of the scientific approach in structuring work and in
decision making and problem solving that relates to the work. This
means that hard data are used in establishing benchmarks, monitoring
performance, and making improvements.

24
v.Long-term commitment – Organizations that implement
management innovations adopt the total quality approach requires a
whole new corporate culture. So long-term commitment to change is
necessary for its success.
vi.Teamwork-The quality company must foster teamwork and
partnerships with the workforce and their relationship with workforce
and their representatives. It is a common struggle for the customers,
not separate struggles for power. The nature of a common struggle for
quality also applies to relationships with suppliers, regulating agencies,
and local communities.
.

25
vii.Continual improvement of System: The philosophy that seeks to
improve all factors related to the process of converting inputs into
outputs on an ongoing basis is called Continuous improvement. It
covers equipment, methods, materials, and people. In order to
continually improve the quality of products or services-which is a
fundamental goal in a total-quality setting-it is necessary to continually
improve systems.
viii.Education and Training- Education and training are fundamental to
total quality because they represent the best way to improve on a
continual basis. In a quality organization everyone is constantly
learning. Management encourages employees to constantly elevate
their level of technical skills and professional expertise. People gain
ever-greater mastery of their jobs and learn to broaden their
capabilities. It is through education and training that people who know
how to work hard learn how to also work smart.

26
ix.Freedom through control- In quality leadership there is control, yet
there is freedom. There is control over the best-known method for any
given process. Employees standardize processes and find way to ensure
everyone follows the standard procedures. They reduce the variation of
output by reducing variation in the way work is done.
x. Unity of Purpose- In order to apply the total quality approach,
organizations must have unity of purpose. This means that internal
politics has no place in a total quality organization. Rather,
collaboration should be the norm. Employees should feel more
involved and empowered in a total-quality setting than in traditionally
managed situation, but the goal of total-quality is to enhance
competitiveness, not eliminate unions.

27
xii. Employee involvement and Empowerment-Employee involvement
increases the likelihood of a good decision, better plan, or a more
effective improvement by bringing more minds to bear on the
situation-not just any minds., but of people who are closest to the work
in question. Employee empowerment: Giving workers the
responsibility for improvements and the authority to make changes to
accomplish them provides strong motivation for employees. This puts
decision making into the hands of those who are closer to the job and
have considerable insight into problems and solutions.
xii.Suppliers’ Partnership: Must maintain both formal and information
relationship with fewer number good suppliers.

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 Potential Benefits of TQM
The objectives of TQM are improved quality, employee participation, team
work, working relationships, customer satisfaction, employee satisfaction,
productivity, communication, profitability, and market share.
The advantages of adopting TQM system are numerous which are outlined
below
a. TQM helps to focus clearly on the needs of the market. It tries to abstract
the satisfaction perceptions of market and thus helps the organization to
identify and meet the requirements of the market in a better way.
b. TQM facilities to aspire for a top quality performer in every sphere of
activity. It is well accepted fact that the negative attitudes of employees
and non-participative culture of the organization pose the greatest hurdle
to organization’s success, growth and prosperity. TQM emphasizes, on
bringing about attitudinal and cultural change through promotion of
participative work culture and effective team-work.

29
a. It channelizes the procedures necessary to achieve quality performance.
By focusing on defining the quality policies, goals and objectives, and
communicating these properly to one and all in the organization,
adopting SQC, and SPC techniques and developing and using a system of
evaluation, the organizations can channelize their efforts to achieve the
desired and targeted quality performance.
b. It helps examine critically and continually all processes to remove non
productive activities and waste. A continuous effort to identify the
problems and resolve them helps to reduce the waste. The culture of well
being thus improves housekeeping, cost-effectiveness and safety.
c. It gears organizations to fully understand the competition and develop an
effective combating strategy. It is essential for the organization to
understand the competition and develop and adopt suitable strategies to
meet the challenge of continuous changing global business environment.
As TQM helps to understand the pulse of the customers and thus the
market, it gives an edge to the organization to meet the competition.

30
a. It helps to develop good procedures for communication and
acknowledging good work. TQM brings together members of
various related sections, departments, and different levels of
management thereby providing an effective vehicle of
communication and interaction.
b. It helps to review the process needed to develop the strategy of
never ending improvement. Quality improvement efforts cannot be
restricted to any time period.

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Obstacles to Implementing TOM
Companies have had varying success in implementing TQM. Some have been quite
successful, but others have struggled. Part of the difficulty may be with the process
by which it is implemented rather than with the principles of TQM. Among the
factors cited in the literature are the following:
1. Lack of a companywide definition of quality: Efforts aren’t coordinated; people
are working at cross- purposes, addressing different issues, and using different
measures of success.
2. Lack of a strategic plan for change: Without such a plan the chance of success is
lessened and the need to address strategic implications of change is ignored.
3. Lack of a customer focus: Without a customer focus, there is a risk of customer
dissatisfaction.
4. Poor intraorganizational communication: The left hand doesn’t know what the
right hand is doing; frustration, waste, and confusion ensue.
5. Lack of employee empowerment: Not empowering employees gives the
impression of not trusting employees to fix problems, adds red tape, and delays
solutions.

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6. View of quality as a “quick fix”: Quality needs to be a long-term,
continuing effort.
7. Emphasis on short-term financial results: “Duct-tape” solutions often
treat symptoms; spend a little now—a lot more later.
8. Inordinate presence of internal politics and “turf” issues: These can
sap the energy of an organization and derail the best of ideas.
9. Lack of strong motivation: Managers need to make sure employees
are motivated.
10. Lack of time to devote to quality initiatives: Don’t add more work
without adding additional resources.
11. Lack of leadership:9 Managers need to be leaders.
This list of potential problems can serve as a guideline for organizations
contemplating implementing TQM or as a checklist for those having
trouble implementing it.

33
Quality and Competitive Advantage:
Competitive advantage denotes a firm’s ability to achieve market superiority. In the
long run, a sustainable competitive advantage provides above-average
performance. S. C. Wheelwright identified six characteristics of a strong competitive
advantage:
1. It is driven by customer wants and needs. A firm provides value to its customers
that competitors do not.
2. It makes a significant contribution to the success of the business.
3. It matches the organization’s unique resources with opportunities in the
environment. No two organizations have the same resources; a good strategy uses
the firm’s particular resources effectively.
4. It is durable and lasting, and difficult for competitors to copy. A superior research
and development department, for example, can consistently develop new products
or processes that enable the firm to remain ahead of competitors.
5. It provides a basis for further improvement.
6. It provides direction and motivation to the entire organization.

34
Each of these characteristics relates to quality, suggesting that quality is an
important
source of competitive advantage,
The importance of quality in achieving competitive advantage was
demonstrated
by several research studies during the 1980s. PIMS Associates, Inc., a
subsidiary
of the Strategic Planning Institute, maintains a database of 1,200 companies
and
studies the impact of product quality on corporate performance.29 PIMS
researchers
found the following:
• Product quality is an important determinant of business profitability,
• Businesses that offer premium-quality products and services usually have
large
market shares and were early entrants into their markets.

35
• Quality is positively arid significantly related to a higher return on
investment
for almost all kinds of products and market situations. (PIMS studies
showed
that firms whose products were perceived as having superior quality
earned more than three times the return on sales of firms whose
products were perceived as having inferior quality.)
• Instituting a strategy of quality improvement usually leads to
increased market
share, but at the cost of reduced short-run profitability.
• High-quality producers can usually charge premium prices.

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What did Philip Crosby mean by ‘Quality Is Free”?
Improved conformance in production or service delivery leads to lower
costs through savings in rework, scrap, resolution of errors, and
warranty expenses. Philip Crosby popularized this viewpoint in his book
Quality Is Free. Crosby states:
Quality is not only free, it is an honest-to-everything profit maker. Every
penny you don’t spend on doing things wrong, over, or instead of,
becomes half a penny right on the bottom line. In these days of “who
knows what is going to happen to our business tomorrow,” there aren’t
many ways left to make a profit improvement. If you concentrate on
making quality certain, you can probably increase your profit by an
amount equal to 5 percent to 10 percent of your sales. That is a lot of
money for free. The net effect of improved quality of design and
conformance is increased profits.
37
Is there any relationship between quality and profitability? How?
These findings are summarized in Figure 1.3. A product’s value in the marketplace is
influenced by the quality of its design. Improvements in design will differentiate the
product from its competitors, improve a firm’s quality reputation, and improve the
perceived value of the product. These factors allow the firm to command higher
prices as well as to achieve a greater market share, which in turn leads to increased
revenues that offset the costs of improving the design.
Fig: 1.3

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Three Levels of Quality:
An organization that is committed to total quality must apply it at three
levels: the organizational level, the process level, and the performer/job
level.
At the organizational level, quality concerns center on meeting external
customer requirements. An organization must seek customer input on a
regular basis. Questions such as the following help to define quality at the
organizational level:
1. Which products and services meet your expectations?
2. Which do not?
3. What products or services do you need that you are not receiving?
4. Are you receiving products or services that you do not need?
Customer-driven performance standards should be used as bases for goal
setting, problem solving, performance appraisal, incentive compensation,
nonfinancial rewards, and resource allocation.

39
At the process level, organizational units are classified as functions or
departments, such as marketing, design, product development, operations,
finance, purchasing, billing, and so on. Because most processes are
cross-functional, the danger exists that managers of particular organizational
units will try to optimize the activities under their control, which can sub
optimize activities for the organization as a whole. At this level, managers
must ask questions such as the following:
1. What products or services are most important to the (external) customer?
2. What processes produce those products and services?
3. What are the key inputs to the process?
4. Which processes have the most significant effect on the organization’s
customer-driven performance standards?
5. Who are my internal customers and what are their needs?

40
At the performer level (sometimes called the job level or the
task-design level), standards for output must be based on quality and
customer-service requirements ±at originate at the organizational and
process levels. These standards include requirements for such things as
accuracy, completeness, innovation, timeliness, and :cost. For each
output of an individual’s job, one must ask:
1. What is required by the customer, both internal and external?
2. How can the requirements be measured?
3. What is the specific standard for each measure?
Viewing an organization from this perspective clarifies the roles and
responsibilities of all employees in pursuing quality. Top managers must
focus attention at the organizational level; middle managers and
supervisors at the process level; and all employees must understand
quality at the performer level. Getting everyone involved is the
foundation of TQ.
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Current and Future Challenges:
1.Globalization: Globalization is driving global supplier networks and the need to
manage global quality platforms. Organizations are no longer bound by location and
space. Likewise, entirely new consumer markets are being created—often by the
Internet, which creates opportunity and concern. Globalization will influence trade
policy and trading partners in new, unimagined ways.

2.Social responsibility (SR): As organizations begin to realize that social responsibility

is not only the moral thing to do, but that it’s also good for business, the world will
continue to embrace SR philosophies and practices at an increasing
rate. Consumers are demanding more knowledge of organizational practices, and
corporate reputation will play a greater role in consumer buying choices.
Organizations that seek to improve their practices will need to know the con- cepts,
techniques, and tools of quality to deliver on their goals. Issues such as ethics,
transparency, social behavior, and environment coincide with the broader
considerations of SR and formulate what some have called a “triple bottom line”
impact that encompasses people, planet, and profits.

42
3. New dimensions of quality: A new collection of quality-related competencies
will be required if quality is to maintain relevance in a quickly changing world.
Organizations are looking for leadership in innovation—the ability to develop
new ideas and manage change. This necessitates the commingling of quality and
innovation. The emerging focus must work within the systems of
organizations—not just be focused on products and services. Organizations must
master change and these emerging capabilities, or give way to smaller, newer,
and more agile competitors.
4. Aging population: The world’s population is getting older, and with that trend
come problems and solutions. According to a 2008 report from the United
Nations on global population changes, the median age is projected to increase
from 29 to 38 years between 2009 and 2050. The fastest growing segment of the
population will be people 60 years or older.12 This aging population will push
economies and organizations to respond to the resulting market needs. Aging
workers will leave the workforce, and organizations will be charged with replacing
those skills. This, in turn, may cause traditional retirement to be redefined as
organizations seek to tap into the skills of those who have left the workforce.

43
5. Health care: A by-product of the other forces on this list,
globalization and the aging population have heightened the need and
expectation for quality health care. Quality can play an important role
in health care by taking waste out of the system so that more people
can benefit. Policymakers must also address equity of
access—inefficiencies in the system only exacerbate these problems.
On the positive side, advancements in biotechnology and
nanotechnology will result in cures for diseases and prolonged lives.
This will require increased focus on quality in the waste-free
development of these technologies. Quality can also help ensure
operational efficiencies in health care delivery.
6. Environmental concerns: The world has come to understand that
much of the environmental damage that has been done cannot be
reversed, and that increasing consumption will put even more strain on
finite resources. Quality provides the concepts, tools, techniques, and
standards to foster change.
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7. 21st century technology: Technology’s impact is difficult to forecast
and will most certainly surprise us in terms of how it affects current
models we think we understand. Some believe technology will deliver
solutions to address energy, food, and water shortages, and the need
for clean air. Information technology and advances in genetics,
biotechnology, and nanotechnology will change everyday life and drive
our future state. A new, innovative definition of quality is required for
this innovative age.

45
Comparison between TQM approach and Traditional Approach:
* Aspects/attributes traditional Total Quality Management

Overall Mission: Maximum return on Meet or exceed customer satisfaction.

investment
Objectives: Emphasis on short-term Balance of long and short-term.

Management: Not always open; Open, encourage employee input, consistent

sometimes inconsistent objectives. objectives.

Role of Manager: Issue orders; enforce. Coach, remove barriers, built trust.

Customer Requirements: Not highest Highest priority; important to identify and

priority, may be unclear. understand.

46
Problems: Assign blame; punish Identify and resolve.

Problem solving: Not systematic; individuals. Systematic, teams.

Improvement: Erratic Continual.

Suppliers: Adversarial Partners.

Jobs: Narrow, specialized; much Individual Brand, more general; much team effort.
effort
Focus: Product oriented. Process oriented.

Quality organization status: Quality is not Quality is through the leader. Quality
consider as integral part of organization. managers on Board of Directors.
Consider quality is hidden in manufacturing.

Organization : Hierarchical—vertical Networking across and among the functions.

47
Span of control: Short span and many layers of Large span of control with authority almost
pushdown to the lower level.
Production Schedule: Long production runs for Economy to time, just-in-time production quick
low cost and high efficiency customer.
Communication: Convey by slogan Conveyed with action.
Perception of Quality: Quality is defined in terms Quality is considered multidimensional and the
of single dimension, that is conformance to dimensions are customer oriented.
specifications.
Responsibility for quality: Delegated to With top management
subordinates
Workforce: Emphasis on division of labor Multi-skilled workforce with job rotation.
Employee: Emphasis on monolithic pattern. Employees are motivated and are given
Opportunities for participation does not exist. significant role regardless of level to find better
ways to work.

48
Priority: The first priority is to profit. Quality is topmost priority.
Quality productivity relationship: Contribution Considers high correlation between the two
of quality in improving productivity not forces.
recognized.
Ways of improving: Improvement in inspection Changing corporate culture, increasing employee
and gauging. education, use of process control.
Key to firm success: Growth in sales, profits Customer satisfaction & Production of high quality
and return on investment goods and services.
Management understanding & attitude: No Consider quality management as essential part of
compensation for quality Tend to blame quality company system.
department for quality problems.

49
The Costs of Quality
Any serious attempt to deal with quality issues must take into account
the costs associated with quality. Those costs can be classified into
three categories: appraisal, prevention, and failure.
Appraisal costs relate to inspection, testing, and other activities to
uncover defective products or services, or to assure that there are
none. They include the cost of inspectors, testing, test equipment, labs,
quality audits, and field testing.
Prevention costs relate to attempts to prevent defects from occurring.
They include costs such as planning and administration systems,
working with vendors, training, quality control procedures, and extra
attention in both the design and production phases to decrease the
probability of defective workmanship.

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 Failure costs are incurred by defective parts or products or by faulty services.
Internal failures are those discovered during the production process; external failures are those
discovered after delivery to the customer.
Internal failures occur for a variety of reasons,
i. including defective material from vendors,
ii. incorrect machine settings,
iii. faulty equipment,
iv. incorrect methods,
v. incorrect processing,
vi. carelessness, and
vii. faulty or improper material handling procedures.
The costs of internal failures include
i. lost production time,
ii. scrap and rework,
iii. investigation costs,
iv. possible equipment damage, and
v. possible employee injury.
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Rework costs involve the salaries of workers and the additional
resources needed to perform the rework (e.g., equipment, energy, raw
materials). Beyond those costs are items such as inspection of
reworked parts, disruption of schedules, the added costs of parts and
materials in inventory waiting for reworked parts, and the paperwork
needed to keep track of the items until they can be reintegrated into
the process.
External failures are defective products or poor service that go
undetected by the producer. Resulting costs include warranty work,
handling of complaints, replacements, liability/litigation, payments to
customers or discounts used to offset the inferior quality, loss of
customer goodwill, and opportunity costs related to lost sales.

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Total Quality Management Excellence Model (TQMEX)
The TQMEX Model advocates an integrated approach in order to
support the transition to systems management, which is an ongoing
process of continuous improvement that begins when the company
commits its elf to managing by quality. The model illuminates the
elements that help us to understand the TQM philosophy and its
implementation company-wide.
It is necessary to develop a conceptual model in order to have a
systematic approach to TQM. TQMEX model is a sequence of steps
arranged logically to serve as a guideline for the implementation of a
process in order to achieve the ultimate goal. The idea was to develop a
universally applicable step by-step guideline by including the
recognized practices of TQM as shown in Figure 3.5.

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Fig3.5 The TQMEX Model

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The Japanese 5-S Practice (5 S)
The 5 S is the key to total quality environment, a philosophy most
Japanese factories endorse and practice. Japanese factories well known
for their cleanliness and orderliness and; hence, are addressed as
“parlours”. The 5-S practice is a technique used to establish and
maintain quality environment in an organization. The name stands for
five Japanese words—Seiri, Seiton, Seiso, Seiketsu and Shitsuke. The
Japanese 5-S practice is useful not just for improving the physical
environment, but also for improving the thinking processes. The English
equivalent, their meanings and typical examples are shown in Table 3.2.

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Table 3.2 The Japanese 5-S Picture
Japanese English Meaning Typical Example
Seiri Structurize Organization Discard rubbish
Seiton Systemize Neatness Retrieving a document
within 30 seconds
Seiso Sanitize Cleaning/cleanliness Individuals responsible for
maintaining cleanliness
Seiketsu Standardize Standardization Transparency of storage
Shitsuke Self-discipline Discipline Performing the 5 S daily

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 Business Process Management (BPM)
BPM is a holistic management discipline aimed at enhancing or
improving the efficiency of business processes. BPM can leverage the
benefits of technology to achieve innovation, flexibility and operational
efficiency. It attempts to continuously improve processes—the ones
that define, measure and improve other processes. It is a discipline that
treats business processes as assets when working towards ne goal of
improving agility and operational performance. BPM is a structured
approach that employs methods, policies, metrics, management
practices and software tools to manage and continuously optimize an
organization’s activities and processes. The three areas where BPM
plays a crucial role are business strategy, governance and structure and
culture and values.

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Quality Control Circles (QCC)
QCCs originated in Japan in the 1950s. A QCC is a small group of staff working
together to contribute to the improvement of the enterprise, to respect
humanity and to build a cheerful workgroup through the development of the
staff’s infinite potential.
A QCC team of people usually come from the same work area, meet
voluntarily on a regular basis to identify, investigate, analyze and solve their
work-related problems. The basic concepts behind QCC activities as part of
the company-wide quality control efforts are:
• To contribute to the improvement and development of the enterprise.
• To respect humanity and to build worthwhile lives and cheerful work areas.
• To give maximum recognition to human capabilities and to draw out each
individual’s infinite potential.

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The Seven Quality Control Tools
Prof Karou Ishikawa, “the father of QCCs,” developed the seven QC
tools. Through his experience, he identified a set of tools, which could
be used by teams and individuals to interpret the data fully and derive
maximum information from it. These seven effective methods offer any
organization a means of collecting, presenting and analyzing most of its
data and problems. They are process flowchart, check sheet, histogram,
Pareto analysis, cause-and-effect analysis, scatter diagram and control
charts. Since their applications are so wide, they are also known as the
seven tools for QCCs.
QCC is essential to the quality of product and improvement of service.
To implement QCC, companies must spend time in the early stages
ensuring that everyone in the company is properly informed and
consulted before any QCC activity begins. QCC needs employee
empowerment. Moreover, the specifications for improvement should
not be too rigid.
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Quality Management Systems
The International Organization for Standardization (ISO) is the specialized agency
for standardization and comprises the national standards bodies of 95 countries.
ISO is made up of approximately 180 technical committees. Each technical
committee is responsible for one of the many areas of specialization, ranging from
asbestos to zinc. The purpose of ISO is to promote the development of
standardization and related activities in order to facilitate easier international
exchange of goods and services and to develop cooperation in intellectual,
scientific, technological and economic activities. The results of ISO technical
projects are published as international standards. The ISO 9000 series is a result of
this process.
ISO is a worldwide standard that establishes requirements for the management of
quality Unlike product standards, these standards are for quality management
systems. The impact of these standards is reflected in the widespread distribution
of the ISO 9000 series, which has become the bestseller in the history of the ISO.

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Total Productive Maintenance
In 1971, The Japan Institute of Plant Maintenance (JIPM) defined TPM as a system of
maintenance covering the entire life of equipment in every division including
planning, manufacturing and maintenance. The term TPM is sometimes known as
total productivity management because it focuses on improving productivity.
TPM involves everyone from the top executives to the shop floor workers,
Productive maintenance
is promoted through morale-building management and small-group activities in an
effort to maximize
equipment efficiency. Basically, TPM implies utilizing plant capability to its fullest
extent to:
• Reduce equipment stoppages (both line stoppages and stoppages for reworking)
• Quantitatively and qualitatively enhance equipment capability
• Improve safety, health and environmental factors in the expectation that such
improvements will contribute to better quality and higher profits
• Utilize small-group activities and prevention
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