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Total Quality Management Aireen Y. Clores, M.B.A HRTM Instructor Dept. of Family & Consumer Sciences
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Page 1: Module 1 Introduction

Total Quality Management

Aireen Y. Clores, M.B.AHRTM InstructorDept. of Family & Consumer Sciences

Page 2: Module 1 Introduction

Some questions . . .

Total Quality Management

• Does higher quality has any relation with business performance?

• Does higher quality means more cost and more time Or quality is free?

• Operational problems faced by organizations can be generalized?

• What management experts have advised to improve aver all operation?

?

Shall we learn lesson from management experts or try our own methods

Page 3: Module 1 Introduction

Contents

Total Quality Management

Total Quality

Quality Definition

Quality Movements

History of Quality Paradigms

Quality Control & Assurance

Total Quality Management - Pillars of TQM - Other components of TQM

Quality is never an accident; it is always the result of high intention, sincere effort, intelligent direction and skillful execution; it represents the wise choice

of many alternatives. Will A Foster

Page 4: Module 1 Introduction

What is TQM?

Constant drive for continuous improvement and learning.

Concern for employee

involvement and development

Management by Fact

Result FocusPassion to deliver customer value /

excellence

Organisation response

ability

Actions not just words

(implementation) Process Management

Partnership perspective (internal / external)

Page 5: Module 1 Introduction

Total Quality Management

TQM Philosophy

Philosophy of TQM revolves around customer driven management.

Its major emphasis is on determining customer need or expectation from the product.

Total Quality is the culture of the organization.

It is attitude of people how they perform their assigned work with aims to provide, customers with products and services that satisfy their needs.

The culture change means all members of the organization participate in the improvement of process, products, and services.

Total Quality Management

Page 6: Module 1 Introduction

TQM Philosophy

“Do the right things, right the first time, every time”

You must put a quality product into QC before you can expect to get out one, otherwise wastage (or rework) will be very high.

Total Quality Management

Page 7: Module 1 Introduction

Pillars of TQM

1- Customer Focus: Studying customer needs, gathering customer requirements, and measuring and managing customer satisfaction.

Customer satisfaction is seen as the company's highest priority. The company believes that it will only be successful if its customers are satisfied.

2- Process Management: Develop a production process that reduce the product variations. Applying the same process; the same product should be produces with the same level of quality every time.

Teams are process-oriented, and interact with their internal customers to deliver the required results. Management's focus is on controlling the overall process, and rewarding teamwork.

Total Quality Management

Page 8: Module 1 Introduction

3- Employee Empowerment (Human side of Quality): TQM environment requires a committed and well-trained work force that participates fully in quality improvement activities.

On-going education and training of all employees supports the drive for quality.

4- Continuous Improvement: TQM recognizes that product quality is the result of process quality. As a result, there is a focus on continuous improvement of the company's processes.

This will lead to an improvement in process quality. In turn this will lead to an improvement in product quality. Measurement and analysis id the tool that has been used for that.

Pillars of TQM

Page 9: Module 1 Introduction

Continuous Improvement (through measurement and analysis)

Customer Focus

ProcessManagement

Employee Training & Empowerment

T. Q. M.

• Reduce rework activities (Cost reduction) • Shorter development cycle (Cost reduction) • Increased customer satisfaction (Quality improvement)

Pillars of TQM

Page 10: Module 1 Introduction

Other elements of TQM

Total Quality Management

Leadership

Vision and Plan Statement

Employee Participation

Recognition and Reward

Education and Training

Supplier Quality Management

Performance Evaluation

Product Design

Page 11: Module 1 Introduction

Learning

LEARNING AND TQM

Process Improvement

Quality Improvement

Customer Satisfaction

Shareholder Satisfaction

Employee Satisfaction

Page 12: Module 1 Introduction

BASIC PRINCIPLES OF TQM

Approach Management Led

Scope Company Wide

Scale Everyone is responsible for Quality

Philosophy Prevention not Detection

Standard Right First Time

Control Cost of Quality

Theme On going Improvement

Page 13: Module 1 Introduction

Quality Definition

• Quality is the conformance to requirements. (Crosby in 1979)

• Fitness for use. (Juran 1970)

• The degree to which a system, component, or process meets specified requirements. (IEEE)

Total Quality Management

Page 14: Module 1 Introduction

Quality Gurus

• Walter A. Shewhrat (Father of Quality, 1920-1940s)

• Dr. W. Edwards Deming (14-points, 1945-1980s)

• Dr. Joseph M. Juran (TQM, post WWII – 1980s)

• Philip Crosby (Quality is Free, 1980s)

• Kaoru Ishikawa (Fish Bone, SPC, post WWII - 1980s)

Total Quality Management

Page 15: Module 1 Introduction

Quality Movements

• Japanese were badly defeated in World War II. Their

industrial and financial bases were in chaos.

• Japan had no natural resource and limited source of food

for their people.

• The quality movement began in Japan in 1946 with the

U.S. Occupation Force's mission to revive and restructure

Japan's communications equipment industry.

• Dr. Deming was invited by the Union of Japanese

Scientists and Engineers to Japan in 1947.

• In 1954, Dr. Joseph Juran of the United States raised the

level of quality management from the factory to the total

organization in Japan. Total Quality Management

Page 16: Module 1 Introduction

Results from Japan’s implementation from American

quality experts led to an industrial revolution that

eventually left the American industry lagging behind.

It was during the late 1980s that American industry began

to finally look to their quality experts for methods to

improve quality.

In the late 1980s, an NBC documentary called If Japan Can

Why Can’t We brought national attention to the needs for

quality improvements for global competition.

Quality Movements

Total Quality Management

Page 17: Module 1 Introduction

History of Quality Paradigms

1- Customer-Craft quality Paradigm

Design and build each product for a particular customer.

Producer knows the customer directly.

2- Mass production & inspection Paradigm

Focus on designing and building products for mass consumption.

- Push products on the customer (limit customer choices).

- Quality is maintained by inspecting and detecting bad products.

Major innovation to this paradigm: statistical process control

3- TQM Paradigm

Potential customers determine what to design and build.

Higher quality obtained by focusing on preventing defects and continuously reducing variability in all processes.

Total Quality Management

Page 18: Module 1 Introduction

Quality Evolution

Inspection

Quality Control

Quality Assurance

Total Quality Management

Reactive Approach

Proactive Approach

Detection

Finding & Fixing mistakes

Prevention

Stop defects at source.

Zero defects

1

2

3

4

Inspect products

Incorporates QC/QA activities into a company-wide system aimed at satisfying the customer.

(involves all organizational functions)

Planned and systematic actions to insure that products or services conform to company requirements

Operational techniques to make inspection more efficient & to reduce the costs of quality. (example: SPC)

Page 19: Module 1 Introduction

Quality Control

The purpose of quality control is to uncover defects and have them corrected so that defect-free products will be produced.

Quality control is limited to looking at products .

Quality control is testing the final product against product quality standards.

Quality control is operational techniques that are used to fulfill requirements for product quality.

Total Quality Management

Juran says, software quality control is the process of measuring actual quality, comparing this to some standard, and then acting on the discrepancy.

Page 20: Module 1 Introduction

Quality Assurance

Quality assurance is oriented toward preventing defects.

It is defined by those activities that modify the development processes to prevent the introduction of defects.

Quality assurance is more concerned with the processes that produce the final product, and making sure that quality is part of each phase.

QA is about maturing the process towards minimum defect.

It is about balancing methodology, leadership, and technology.

It is about taking into account human factors as well as technological ones.

Total Quality Management

Page 21: Module 1 Introduction

FOUR KEY PRINCIPLESFOUR KEY PRINCIPLES

•Measure quality so you can affect it

•Focus on a moving customer

•Involve every employee

•Think long term - Act short term

Page 22: Module 1 Introduction

THE CONCEPT OF QUALITY

• Perfection• Consistency• Eliminating waste• Speed of delivery• Compliance with policies

and procedures

• Providing a good, usable product

• Doing it right the first time

• Delighting or pleasing customers

• Total customer service and satisfaction

Page 23: Module 1 Introduction

THE IMPORTANCE OF QUALITY

• Quality drives market share.

• Quality can also reduce costs.

• As quality improves, so does cost, resulting in improved market share and hence profitability and growth.

Page 24: Module 1 Introduction

THE CASE FOR QUALITY1 Success of competitors who take quality seriously

2 Rising expectations of customers

3 Quality differentiates companies from the competition

4 Narrowing of supplier bases by quality conscious companies

.

Page 25: Module 1 Introduction

5 Growing evidence that growth in market share comes from sustained quality.

6 Cost advantages

7 High cost of catastrophic failure

8 Inspection poor substitute for right first time

THE CASE FOR QUALITY

Page 26: Module 1 Introduction

Leadership

Total Quality Management

• The ability of top management to establish, practice, and lead a long-term vision for the firm, driven by changing customer requirements, as opposed to an internal management control role.

• Lack of top management commitment is one of the reasons for the failure of TQM efforts (Brown et al. 1994).

• A predominant requirement for quality management is that strong commitment from top management is vital.

• To be an effective leader in most modern firms, the top manager must continue to develop and learn.

• Knowledge of the business and continual learning are essential prerequisites to effective leadership (DuBrin, 1995).

Page 27: Module 1 Introduction

Leadership

Total Quality Management

• In order to effectively lead the firm, top management must be committed to provide education and training to employees and regarding them as valuable resources of the firm.

• Top management must be committed to allocating sufficient resources to prevent, as well as repair, quality problems.

• Top management should discuss quality frequently; by having session on the topic and asking questions about quality at every staff meeting.

• Top management must train and coach employees to assess, analyze, and improve work processes (Deming, 1986).

Page 28: Module 1 Introduction

Vision & Plan Statement

Total Quality Management

Vision statement describes how a firm wants to be seen in its chosen business. Vision describes standards, values, and beliefs of the organization.

Intent of a vision statement is to communicate the firm’s values, aspirations and purpose, so that employees can make decisions that are consistent with and supportive of these objectives.

Plan statement is a detailed road map of actions; what and how organization intended execute that plan in future.

Organization may have many kinds of plan; - Strategic business performance plan - Quality goal plan - Quality improvement plan

Page 29: Module 1 Introduction

Vision & Plan Statement

Total Quality Management

Strategic business performance plan can be divided into long- and short-term business performance plans that include, for example, market share, profits, annual sales, exports, and sales growth.

Quality goal plan can involve, for example, conformity rate, defect rate, internal failure costs, external failure costs, performance, reliability, and durability.

Quality improvement plan aims for quality improvement, which are actions taken throughout the organization to increase the effectiveness and efficiency of activities and processes in order to provide added benefits to both the organization and its customers (ISO 8402, 1994).

Page 30: Module 1 Introduction

Employee Participation

Total Quality Management

Employee participation can be defined as the degree to which employees in a firm engage in various quality management activities.

By participating in quality management activities, employees acquire new knowledge, see the benefits of the quality disciplines, and obtain a sense of accomplishment by solving quality problems.

A remarkable characteristic of employee participation is teamwork. Breakdown barriers between departments. People in research, design, sales, and production must work as a team (Deming’s 9th point).

If several knowledgeable people are brought into the decision-making process, a number of worthwhile possibilities may be uncovered.

Page 31: Module 1 Introduction

Employee Participation

Total Quality Management

TQM implementation practice is formation of short-term problem-solving teams (SEPG).

Problem-solving teams work on a wide variety of tasks, ranging from cross-functional involvement in tackling quality problems to solving within-functional quality problems.

TQM firms create employee suggestion systems. Production workers should regularly participate in operational decisions such as planning, goal setting, and monitoring of performance.

They are encouraged to make suggestions and take a relatively high degree of responsibility for overall performance.

Employees should be encouraged to inform managers or supervisors concerning conditions that need correction (e.g., process defects, incompetent staff and poor tools).

Page 32: Module 1 Introduction

Recognition & Reward

Total Quality Management

Recognition is defined as the public acknowledgment of superior performance of specific activities.

Reward is defined as benefits, such as increased salary, bonuses and promotion, which are conferred for generally superior performance with respect to goals (Juran and Gryna, 1993).

Public recognition is an important source of human motivation.

Important feature of any quality improvement program is the showing of due recognition for improved performance by any individual, section, department or division within the firm.

A large majority of firms implementing TQM modify their performance measurement and reward systems so that achievement of specific quality goals can be assessed and rewarded.

Page 33: Module 1 Introduction

Education & Training

Total Quality Management

Training programs attempt to teach employees how to perform particular activities or a specific job.

Institute a vigorous program of education and self-improvement (Deming’s 13th point).

According to Deming, Japanese firms obviously regard their employees as their most significant competitive assets and provide good general orientation as well as training in specific skills.

According to Feigenbaum, a brief and general course for first-line supervision is modern methods of planning and controlling quality, concentrating essentially upon the physical elements affecting product quality.

Page 34: Module 1 Introduction

Performance Evaluation

Total Quality Management

Evaluation can identify the difference between actual and the expected performance.

Evaluation information should be communicated to employees in order to encourage employees to make things better.

Uncontrolled variance in processes or outcomes is the primary cause of quality problems and must be evaluated and controlled by those who perform the firm’s front-line work.

It is important to note that the major aim of

evaluation is improvement, NOT criticism.

Page 35: Module 1 Introduction

Product Design (SW Dv’mt)

Total Quality Management

Product design translates customer expectations or requirements into specific engineering and quality characteristics, which can be called specifications.

It is an important practice for design engineers to have some marketing knowledge, making it easier for them to understand customer needs, expectations, and future requirements.

Different departments in a firm should participate in new product design.

Before production, new product design should be thoroughly reviewed in order to avoid problems during production.

Page 36: Module 1 Introduction

Good Managers (Leaders)

1. Give priority attention to customers and their needs

2. Empower, rather than control, subordinates.

3. Emphasize improvement rather than maintenance.

4. They emphasize prevention.

5. Encourage collaboration rather than competition.

6. They train and coach, rather than direct and supervise.

Total Quality Management

Page 37: Module 1 Introduction

Good Managers (Leaders)

7. Learn from problems.

8. They continually try to improve communications.

9. They continually demonstrate their commitment to quality.

10. Choose suppliers on the basis of quality, not price.

11. Establish organizational systems to support the quality effort.

12. Encourage and recognize team effort.

Total Quality Management

Page 38: Module 1 Introduction

Total Quality Management

Understand People

People,normally, need security and independence at the

same time.

People are sensitive to rewards and punishments and

yet are also strongly self-motivated.

People like to hear a kind word of appreciation.

People can process only a few facts at a time; thus, a

leader needs to keep things simple.

People trust their gut reaction more than statistical data.

People don’t trust a leader (or boss) if the words are

inconsistent with the his/her actions.

Page 39: Module 1 Introduction

Total Quality Management

Old vs. TQM Approach

Quality Element Previous Approach TQM Approach

Definition Product-oriented Customer-oriented

Priorities 2nd to service and cost Equals of service and cost

Decisions Short-term Long-term

Emphasis Detection Prevention

Errors Operations System

Responsibility Quality control Everyone

Problem Solving Managers Teams

Procurement Price Life-cycle costs,partnership

Manager’s Role Plan, assign, control, and enforce

Delegate, coach, facilitate and mentor

Page 40: Module 1 Introduction

Total Quality Management

1

5

10

1

2 3 4 5 6 7

Cost of Quality

Software Quality

Business Performance

Years

ImprovementMultiplier

By Herb Krasner

QoQ vs Performance Improvement

Page 41: Module 1 Introduction

Advantages of TQM

• create an organizational atmosphere of excitement and sense of accomplishment through the rewarding of creativity.

• Eliminating errors and doing things right the first time saves time and resources

• higher productivity, increased morale, reduced costs, and greater customer commitment may lead to greater public support and improvement of an organization’s public image.

Page 42: Module 1 Introduction

Advantages of TQM

• gives employees the experience of problem solving and using their knowledge and experiences in a collaborative effort

• Total Quality Management may be a "profit generator," even for public organizations

Page 43: Module 1 Introduction

Disadvantages of TQM

• Long-range plans advocated by TQM may limit an organization’s flexibility and agility.– Objectives the plan was

designed to accomplish are forgotten; achieving the transformation becomes the most important objective.

• TQM detractors also argue that although Total Quality Management calls for organizational change, it does not demand radical organizational reform

– Real quality improvement requires radical structural change, such as flattening organizational structures. It requires liberation of employees from stifling control systems and the tyranny of functionalism, both of which stifle teamwork.

Page 44: Module 1 Introduction

Disadvantages of TQM

• Total Quality Management calls for the elimination of the goals and objectives required by Management-by-Objectives.

• Total Quality Management calls for the elimination of performance assessments that rate employees in relation to each other.

• Total Quality Management calls for its implementation to be immediate and complete.

• Total Quality Management develops its own bureaucracy.

TQM detractors contend its statistical burden and committee structure is cumbersome, slows organizational momentum, and consumes too much time and resources.

Page 45: Module 1 Introduction

Disadvantages of TQM

• Opponents of Total Quality Management maintain that it appeals to egotism.

• Total Quality Management calls for a cultural transformation. – Some argue it creates a

process-crazed organization, similar to a cult, where the impression is that only total commitment to TQM can save the organization from ruin.

Page 46: Module 1 Introduction

Thanks

Page 47: Module 1 Introduction

ASSIGNMENT:CASE ANALYSIS

 

H. James Harrington, a noted quality consultant, related the following story in Quality Digest magazine:

I called to make a flight reservation just an hour ago. The telephone rang five minutes before a recorded voice answered. ‘’Thank you for calling ABC Travel services,’’ it said. ‘’To ensure the highest level of customer service, this call may be recorded for future analysis.’’ Next I was asked to select from one of the following choices: ‘’ If the trip is related to company business, press 1.Personal business, press 2. Group travel, press 3.” I pressed 1.

 •  

The Reservation Nightmare  

DISCUSSION QUESTIONS

Summarize the service failures associated with this experience.

What might the travel agency have done to guarantee a better service experience for Mr. Harrington? How do your suggestions relate to the TQ principles?

Page 48: Module 1 Introduction

ASSIGNMENT:CASE ANALYSIS I was then asked to select from the following

choices: “If this is a trip within the United States, press 1.International, press 2.Scheduled training, press 3. Related to conference, press 4.” Because I was going to Canada I pressed 2.

Now two minutes into my telephone call, I was instructed to be sure that I had my customer identification card available. A few seconds passed and a very sweet voice came on, saying, “All international operators are busy, but please hold because you are a very important customer.’’ The voice was then replaced by music. About two minutes later, another recorded message said, “Our operators are still busy, but please hold and the first available operator will take care of you.’’ more music. Then yet another message: ‘’ Our operators are still busy, but please hold. Your business is important to us.’’ more bad music.

The Reservation Nightmare

 DISCUSSION QUESTIONS

Summarize the service failures associated with this experience.

What might the travel agency have done to guarantee a better service experience for Mr. Harrington? How do your suggestions relate to the TQ principles?

Page 49: Module 1 Introduction

ASSIGNMENT:CASE ANALYSIS Finally the sweet voice returned, stating, ‘’to

speed up your service, enter your 19-digit costumer service number.’’ I frantically searched for their card, hoping that I could find it before I was cut off. I was lucky; I found it and entered the number in time. The same sweet voice came back to me, saying, ‘’ to confirm your service number, enter the last four digits of your customer service number, enter the last four digits of your social security number.” I pushed the four numbers on the keypad. The voice said: ‘’ Thank you. An operator will be with you shortly. If your call is emergency, you can call 1-800-CAL-HELP, or push all of the buttons on the telephone at the same time. Otherwise, please hold, as you are a very important customer.” This time, in place of music, I heard a commercial about the service that the company provides.

The Reservation Nightmare

 DISCUSSION QUESTIONS

Summarize the service failures associated with this experience.

What might the travel agency have done to guarantee a better service experience for Mr. Harrington? How do your suggestions relate to the TQ principles?

Page 50: Module 1 Introduction

ASSIGNMENT:CASE ANALYSIS

At last, a real person answered the telephone and asked,’’ Can I help you? ‘’ I replied, ‘’ Yes, oh yes.’’ He answered, “Please give me your 19-digit customer service number, followed by the last digit of your social security number so I can verify who you are.’’ (I thought that I gave these numbers in the first place to speed up service. Why do I have to rattle them off again?

The Reservation Nightmare

 DISCUSSION QUESTIONS

Summarize the service failures associated with this experience.

What might the travel agency have done to guarantee a better service experience for Mr. Harrington? How do your suggestions relate to the TQ principles?

Page 51: Module 1 Introduction

ASSIGNMENT:CASE ANALYSIS • I was now convinced that he would call

me Mr. 5523-3675-0714-1313-040. But, to my surprise, he said: “Yes, Mr. Harrington. Where do you want to go and when?” I explained that I wanted to go to Montreal the following Monday morning. He replied: ‘’ I only handle domestic reservations. Our international desk has a new number: 1-800-1WE-GOTU. I’ll transfer you.’’ A few clicks later a message came on, saying. ‘’All of our international operators are busy. Please hold and your call will be answered in the order it was received. Do not hang up or redial, as it will only delay our response to your call. Please continue to hold, as your business is important to us.”

The Reservation Nightmare

 DISCUSSION QUESTIONS

Summarize the service failures associated with this experience.

What might the travel agency have done to guarantee a better service experience for Mr. Harrington? How do your suggestions relate to the TQ principles?


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