Total Quality Management

-Reena R Patil
 M1: Introduction to Quality Management
• Quality Concepts
• Importance Of Quality
• Dimensions For Product And Service Quality
• Cost Of Quality(numerical Problems)
• TQMEX Model
• Strategic Quality Management,
• Quality Gurus- Deming, Juran, Crosby, Taguchi, Masaaki
Imai, Kaoru Ishikawa.
• Quality Standards- BIS, Deming Award, European Quality
Award, Malcolm Baldrige National Quality Award.
WHAT IS QUALITY?????
 Quality
It is the act of overseeing all activities and tasks
needed to maintain a desired level of
excellence.
Quality can have two meanings:
1. the characteristics of a product or service that bear on
its ability to satisfy stated or implied needs and,
2. a product or service free of deficiencies
 Definition of Quality
• Quality should be aimed at the needs of the
customers, present or future.- Dr. Edward Deming
• Quality is the degree of excellence at an acceptable
price and control of variability at an acceptable cost.
-Robert A. Broh
• Fitness for use or purpose is a definition of quality
that evaluates how well the product performs for its
intended use.- Joseph Juran
 Customer-driven Definitions of Quality
• Value for price paid
• Support services
• Psychological criteria
– Conformance to requirements(Crosby,1979)
– Fitness for use(Juran, 1979)
– Continual improvement(Deming, 1982)
– As defined by the customers(Ford, 1984,1990)
– Loss to society(Taguchi,1987)
– Six Sigma(Harry and Stewart- Motorola, 1988)
– Zero defects(Crosby, 1979)
– Meeting and exceeding present and future requirements of the customers
on a continuous basis(Charantimath,2006)
Gravin’s approaches to defining Quality
• The transcendent approach
• The product-based approach
• The user-based approach
• The manufacturing based approach
• The value-based approch
 Quality Management
• Quality Management is a method for ensuring that
all the activities necessary for the design,
development and implementation of a product or
service are effective and efficient with respect to the
system and its performance.
• Important quality terms:
– Quality Improvement
– Quality Control
– Quality Assurance
 Importance of Quality
• No Quality , No sale. No sale, No profit. No profits,
No jobs.
• Longevity
• Needs Fulfillment
• Cost vs. Need
• Security
• Usability
• Efficiency
Quality and Profit
 Types of Quality
• Quality of Design
• Quality of Conformance
• Quality of Performance
 Three Levels of Quality
• Organizational Level
• Process Level
• Performer Or Job Level Or Task Design Level
 Paradigms of Quality
1. Custom-craft paradigm
2. Mass production and sorting paradigm
3. Statistical quality control paradigm
4. Total quality management (TQM) paradigm
5. Techno-craft paradigm
 Dimensions Of Product Quality
• Dimension 1: Performance
• Dimension 2: Features
• Dimension 3: Reliability
• Dimension 4: Conformance
• Dimension 5: Durability
• Dimension 6: Serviceability
• Dimension 7: Aesthetics
• Dimension 8: Perceived quality
 Dimensions Of Service Quality
• The SERVQUAL (Scale of Measuring Service
Quality) Instrument measures the five dimensions
of Service Quality.
• These five dimensions are:
– Reliability
– Assurance
– Tangibility
– Empathy
– Responsiveness
 Old quality vs. new quality
Old Quality New Quality

About products About organization

Technical Strategic

For inspectors For everyone

Led by experts Led by management

High grade Appropriate grade

About control About improvement

Little ‘q’ Big ‘Q’

 Cost Of Quality(COQ)
The true concept of cost of quality is a financial
measure of the quality performance of an
organization, helping to optimize the various costs
to achieve the best quality achievable at a more
reasonable price. In order to cut internal and
external failure costs, prevention and appraisal
costs must be increased.
Cost of Quality (COQ)=
Cost Of Conformance (P C + A C ) +
Cost Of Non-Conformance (IFC + EFC)
 Four Types of Cost of Quality
• Appraisal Costs (AC)
• Prevention Costs (PC)
• Internal Failure Costs(IFC)
• External Failure Costs(EFC)
 Total Cost Of Quality
Total Cost of Quality is the aggregate cost of poor
quality or product failures- including scrap,
rework, and warranty costs- as well as expenses
incurred to prevent or resolve quality
problems(including the cost of inspection)
 Optimum Quality Cost Model
The optimum cost situation is when the Cost of
Poor Quality is zero. Adopting a Cost of Quality
program is an excellent way to align your business
results of profitability to your Quality efforts.
– Failure cost
– Cost of appraisal plus prevention
– Total quality cost curve
Quality cost in Service Organizations
 Cost Of Quality Assessment(COPQ)
• Identify the activities that result in poor quality
• Decide how to estimate cost of activities
• Collect data
• Estimate cost
• Analyze cost
• Identify major opportunities
• Improve quality
 Quality Cost Indices
• It is the ratio of total quality cost to the
manufacturing cost.
• Cost basis measured by cost ratio:
– Cost ratio= Total quality cost
Cost of operation
• Sales basis:
– Sales ratio= Total quality cost
Net Sales
• Labour/Wages basis:
– Labour ratio= Total quality cost
Direct labour cost
• Unit/Number basis:
– Unit ratio= Total quality cost
Units Produced
 Total Quality Management
• Total quality management (TQM) is the continual
process of detecting and reducing or eliminating
errors in manufacturing, streamlining supply chain
management, improving the customer experience,
and ensuring that employees are up to speed with
training.
• It is an integrated effort designed to improve quality
performance at every level of the organization.
 • Quality involves everyone
Total and all the activities
performed in the company

• Conformance to the
Quality requirements on the basis of
customers request.

• Quality and must be

Management managed
 Five Pillars of TQM
• Product
• Process
• System
• People
• Leadership
 Total Quality System
• It can be summarized as a management
system for a customer-focused organization that
involves all employees in continual improvement.
• It uses strategy, data, and effective
communications to integrate the quality discipline
into the culture and activities of the organization.
 Evolution of TQM
Inspection Total Quality Management

• Four stages of TQM:

– Quality Inspection Based
– System of Quality Control
– Quality Assurance
– Total quality management
Seven phases in development of TQM
1900 • Operator inspection

1920 • Foremen inspection

1940 • Quality control department 100% inspection

1960 • Quality control department statistical sampling inspection(SQC)

1980 • Quality control department statistical process control(SPC)

1990 • Total Quality control statistical problem solving(SPS)

2000 • TOM Zero defect Strategy(Six Sigma)

Principals of Total Quality Management
• Principle 1: Customer focused organization.
• Principle 2: Leadership.
• Principle 3: People involvement.
• Principle 4: Process approach.
• Principle 5: Systematic approach to management.
• Principle 6: Continual improvement.
• Principle 7: Factual Approach to Decision Making.
• Principle 8: Mutually beneficial supplier relationships
Key Elements of TQM
 Core concepts for TQM
1. Customer satisfaction – be customer focused.
2. Internal customers are real.
3. All work is process.
4. Measurement – measure the work.
5. Synergy/ Teamwork – top management must be involved.
6. People make quality – Do it right first time, quality is an
attitude, empowering.
7. Continuous improvement cycle.
8. Prevention.
Total Quality Management Excellence
(TQMEX) Model
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 itself to managing by quality.
 Recognized Practices of TQM
• Japanese 5 –S Practice
• Business Process Reengineering
• Quality Control Circles (QCCs)
• Quality Management System
• Total Productive Maintenance
• Total Quality Management (TQM)
Traditional organization Vs Total Quality
Management Organization
 Common Barriers to the Implementation and
development of a TQM programme
1. Lack of management commitment
2. Inability to change organizational culture
3. Improper planning
4. Lack of continuous training and education
5. Incompatible organizational structure and isolated individuals and
departments
6. Ineffective measurement techniques and lack of access to data
and results
7. Paying inadequate attention to internal and external customers
8. Inadequate use of empowerment and team work
9. Failure to continuously improve
 Prerequisites for TQM
1. Customers-orientation (both internal and external)
2. Never-ending improvement
3. Statistical control of business processes
4. Upstream preventive maintenance
5. Participative management
6. On going preventive action
7. Cross-functional management
8. Committed leadership and commitment.
 TQM Implementation
1. Clarify Vision, Mission, and Values
2. Identify Critical Success Factors (CSF)
3. Develop Measures and Metrics to Track CSF Data
4. Identify Key Customer Group
5. Solicit Customer Feedback
6. Develop a Survey Tool
7. Survey Each Customer Group
8. Develop Improvement Plan
9. Resurvey
10. Monitor CSF
11. Incorporate Satisfaction Data into Marketing Plans
12. Technology
 Benefits of TQM
1. Less product defects
2. Satisfied customers
3. Lower costs
4. Well-defined cultural values
 Strategic Quality Management
Strategic Quality Management (SQM) is the
formulation and deployment of quality management
within the overall framework of strategic planning, in
a way that is aligned with all the other initiatives
such as process re-engineering, cost management,
inventory control and target analysis.
 Strategic Quality Management
• Why there is need for strategic approach to
quality?
– Because every/any organization today faces many
challenges in full swing: customer requirements,
legislation, technology and competition.
– In other words, the quality should be "judged" for it is
undeniable strategic role in obtaining performance
dominance in all areas like: economic, commercial
image, overall productivity, participation and
motivation of all staff, customer satisfaction and
competition
 Strategic Quality Management
• The strategy of building performance quality policy is
therefore based on the commitment and involvement
of management, identifying legislative requirements,
customer requirements (stakeholders), as well as
increased staff empowerment and involvement.
• The concepts of total quality / total quality
management are used interchangeably with the
strategic quality / strategic management of quality, in
the sense of leading to collaborative quality through
mobilization of energies, i.e. participative
management and empowerment.
 Strategic Quality Management
• The new strategy should be based on the
quality of organization, planning,
empowerment and broad commitment to
complete customer satisfaction.
• All these elements bring to your attention a
new support Strategic Quality Management:
– collaborative quality,
– creative quality,
– strategic quality.
 Definitions of SQM
• According to Juran, ‘SQM is a systematic approach
to setting and achieving quality objectives
throughout the company’.
• SQM is at the forefront of a broader system of
quality management.
• Detre (2004) gives a new definition ‘as assembling
methods and practices aimed at mobilizing all
actors of organization for sustainable satisfaction
of customer needs and expectations at the best
cost’
 Definitions of SQM
• The BSI defined it ‘as a management
philosophy and company practices that aim
to harness the human and material resources
of an organization in the most effective way
to achieve the objectives of the organization’.
• These definitions are very broad and appear
to stress only the importance of management
process in achieving an organization’s goals.
 Definitions of SQM
• So SQM can more precisely be defined as
– ‘a comprehensive and strategic framework
linking profitability, business objectives, and
competitiveness to quality improvement efforts
with the aim of harnessing the human, material
and information resources organization wide in
continuously improving products or services that
will allow the delivery of customer satisfaction’
 Core Concepts of SQM
• As in the case of the definition of SQM, we
can identify certain core concepts from the
significant contributing factors that are
promoted by the quality gurus in one form or
another in managing quality.
• As such they should be fundamental in
developing the strategic as well as operational
strategies to improve continuously the quality
of products or services.
 We can identify them as:
• Customer focus;
• Leadership;
• Continuous improvement;
• Strategic quality planning;
• Design quality, speed and prevention;
• People participation and partnership; and
• Fact-based management.
 Customer focus
• As all the quality gurus stated, quality must be defined by the customer.
• The quality process is a continuous loop that begins, ends, and begins
again with the customer.
• Thus the focus on quality must be from a process- driven discipline to a
customer-driven discipline.
• All product or service attributes that contribute value to the customer
and lead to customer satisfaction need to be addressed.
• Juran and Crosby have underscored this concept by defining quality as
“fitness for use” and “conformance to requirements” respectively.
• Ishikawa, on the other hand, advanced the concept of CWQC with the
goal of producing products or services that customers want.
• Similarly, Garvin highlighted customer focus from a strategic viewpoint.
• Thus customer focus must be the overall goal of all quality objectives
and strategies in implementing strategic quality management
 Leadership
• All senior managers must create clear and visible quality values and
high expectations and build them into the way the organization
operates.
• This requires their personal commitment and involvement in
substantial proportions.
• They must take part as role models in the creation of strategies,
systems, and methods for achieving excellence in quality.
• Also, as Crosby said, the senior managers should position their
companies in such a way that inspection, testing, checking, and
analysis are not necessary.
• In addition, they should encourage leadership at all levels of
management, particularly, in maintaining close relationships among
the many divisions in an organization, communicating quality goals
and objectives vertically down the organization, educating employees
about making quality their first priority, and spreading the concept of
continuous improvement on an organization-wide basis.
• As Juran pointed out that stunning results cannot be achieved without
the active and personal leadership of senior managers.
 Strategy Process
• Environmental scanning
• Vision, mission and values
• Objectives and goals
• Strategy formulation
• Strategy implementation
• Performance and measurement(evaluation and
control)
• Strategic Quality Management (SQM)
 Phases Of Strategic Management
• Clarify Your Vision. The purpose of goal-setting is to
clarify the vision for your business
• Gather and Analyze Information
• Formulate a Strategy
• Implement Your Strategy
• Evaluate and Control