UNIT – 2TQM

PRINCIPLES

INTRODUCTION “Leadership is the process of influencing others towards the accomplishment of goals”

Strong leadership from top management – absolute necessity of TQM

Leaders create clear & visible quality values and integrate these values in the organization structure

CHARACTERISTIC BEHAVIOR OF QUALITY LEADERS

The customer first Value people Build supplier partnership Empower people Demonstrate involvement/commitment

Strive for excellence

Explain & deploy policy Improve communication Promote team work Benchmark continuously Establish system Encourage collaborations

LEADERSHIP

MEANING & DEFINITION Definition – “ the art of process of influencing people so that they will strive willingly towards the achievement of group goals”

LEADERSHIP STYLES1. Autocratic or Dictatorial or Directing

2. Participative or Democratic

3. Lassiez – Faire or Free rein or Delegative

4. Consultative

1. AUTOCRATIC OR DICTATORIAL

Leader takes full decisions without consulting subordinates Full authority is held by himself Loves power & never delegates authority Subordinates have to follow him without any question Leader uses threats & punishments to get work

CONTINUEDAppropriate where Subordinates lack knowledge of company goals Subordinates are inexperienced or lack in knowledge Fear & punishment is used as disciplinary techniques Leader prefers to be active & dominant in decision making There is little room for error in accomplishment

+

Facilitates quick decision making

Provides strong motivation & satisfaction to leader

Highest productivity Less competent subordinates are needed at lower level

Yields positive outcome under conditions of stress

-

Employee morale will be low Absence of leader will affect output

Dissatisfaction will develop among employees

Employee turnover will be more

Full potential & creativity of sub not used

Misunderstood communications

2. PARTICIPATIVE OR DEMOCRATIC

Subordinates are consulted & feedback is taken into decision making process

Decisions taken after group discussion – authority decentralized

Participative leader attaches high importance to work & people The leader provides freedom of thinking & expression

+

Subordinates motivated by participation

Job satisfaction increased Absence of leader does not affect output

labour absenteeism & turn over will be minimum

Quality of decision is improved

Leader multiplies his abilities through contribution of followers

-

Time consuming & delay in decision making

If subordinates are lazy & avoid work, then controlling them is difficult

Cannot be applied at lower level management

Some leaders feel uncomfortable – reduction in power & control

Leader requires communication & persuasion skills

3. LASSIEZ-FAIRE OR FREE REIN LEADERSHP Complete freedom is given to the subordinates They plan, motivate, control & are responsible for their own actions

Leader does not take part in decision making Authority is completely decentralized

+

Positive effect on job satisfaction & morale

Creates environment of freedom, individuality & team spirit

Full utilization of potential of subordinates

-

Lack of discipline Lowest productivity No control & coordination Tense situation will prevail

4. CONSULTATIVE Leader seeks input from subordinates

Encourages participation

Leader seeks advice from subs.

REQUIREMENTS OF EFFECTIVE LEADERSHIP

Vision Empowerment Intuition Self Understanding & Value congruence

LEADERSHIP ROLES1. Producer

2. Director

3. Coordinator

4. Checker

5. Stimulator

6. Mentor

7. Innovator

8. Negotiator

ROLE OF SENIOR MANAGEMENT (TQM

LEADERS) Study & investigate TQM concepts Set clear quality policies & provide challenging tasks Establish ‘Priority of Quality’ & ‘Customer Satisfaction’ as basic policy and determine long term goals

Bring cultural change required for TQM effort Establish TQM vision for future and communicate to all involved Become coaches & cheerleaders for managers in transition period

Simulate the employees to be involved

CONTINUED To teach employees realize that organizational interest & individual interest are geared into one another

To uphold norms & values and let it be known To attend TQM training programs To create coordination & harmony among departments To monitor quality improvement programs To create a basic of trust, respect & open communication

LEADING PRACTICES FOR LEADERSHIP

1. Focusing on creating & balancing value for customers and other stakeholders

2. Create & sustain environment to sustain leadership system & environment for empowerment, innovation, agility and learning

3. Set high expectations & demonstrate substantial personal commitment

4. Integrate quality into daily leadership & management

5. Review organizational performance

6. Foster legal & ethical behavior

7. Integrate public support & community support into their business practices

QUALITY STATEMENTS

INTRODUCTION Established by Quality Council (QC) to provide directions for achieving total quality culture

Three elements of Quality Statement are:

1. Vision Statement

2. Mission Statement

3. Quality Policy Statement

1. VISION STATEMENT A short declaration of what the organization aspires to be tomorrow (long term)

Ideal state that one might not reach but strive to work towards it

Describes where the leadership sees the organization in future Describes aspiration for future without specifying the means of achieving it

Leaders & employees should work towards achieving the vision statement

CONTINUED A vision statement should be:Easy to be understood by all stakeholdersBriefly stated yet clear & comprehensiveChallenging yet attainableLofty yet tangibleCapable of stirring excitementCreate unity of purposeNot concerned with numbersSets the tone for employees

EXAMPLES “To be the leading consumer battery company in the world” – Duracell

“We create elevating experiences for the people we touch and significantly impact the world we work in” - Titan

2. MISSION STATEMENT One paragraph that describes the function of the organization Provides a clear statement of purpose for the employees, customer & suppliers

Answers questions like who are we? Who are our customers? What we do? How we do it?

Key elements:

i. Obligation to stakeholders

ii. Scope of the business

iii. Sources of competitive advantage

iv. View of the future

EXAMPLES “We will do this through a pioneering spirit and a caring, value-driven

culture that fosters innovation, drives performance and ensures the highest global standards in everything we do” – Titan

“ The Ritz-Carlton Hotel is a place where the genuine care and comfort of our guests is the highest mission”

STRATEGIC PLANNING

INTRODUCTION Sets long term direction of the organization in which it wants to proceed

Process of envisioning goals, objectives and action plans

1/3/5/10 year plan

PROCESS

CUSTOMER SATISFACTION

“The single most important thing to remember about any enterprise is that there are no results inside its walls. The result of a business is a satisfied customer” – Peter Drucker

INTRODUCTION “Customer is king” “Quality is what customer wants”

CUSTOMER SATISFACTION MODEL

Teboul’s model Companies should strive to increase the intersecting region

WHO ARE CUSTOMERS? Most important people in business Not dependent on the organization but organization depends on them

Not an interruption but purpose of business Part of business not outsiders Life blood of business Deserve the most courteous & attentive treatment

TYPES OF CUSTOMERSinternal

Employees Supervisors, etc

external

Purchaser End user Merchants Processors Suppliers Potential customers Hidden customers

CUSTOMER SUPPLIER CHAIN

CUSTOMER PERCEPTION OF QUALITY

1. Performance

2. Features

3. Service

4. Warranty

5. Price and

6. Reputation

FACTORS INFLUENCING CUSTOMER PERCEPTION OF

QUALITY

KANO’S MODEL OF CUSTOMER SATISFACTION

CONTINUED Useful tool in understanding customer needs Classifies product attributes based on how they are perceived by the customer

Customer needs categorized as 3:

1. Basic needs,

2. Performance needs and

3. Excitement needs

CUSTOMER COMPLAINTS(FEEDBACK)

“An expression of dissatisfaction with a product/service, either orally or in writing from an internal or external customer”

Complaint may be genuine or may arise due to misunderstanding

NEED To discover customer dissatisfaction To identify customer needs To discover relative priorities of quality To compare performance with the competition Determine opportunities for improvement

SOURCES FOR CUSTOMER COMPLAINT

1. Complaints related to product itself

2. Complaints related to After-Sales-Service

TOOLS FOR COLLECTING CUSTOMER FEEDBACK

1. Comment cards

2. Questionnaires

3. Post transaction surveys

4. Report cards

5. Focus group

6. Social media

7. Toll free telephone numbers

8. Customer visits

9. Employee feedback

CUSTOMER COMPLAINTS FLOWCHART

SERVICE QUALITY OR CUSTOMER SERVICE

Set of activities that an organization uses to satisfy its customers

Service can be provided before, during & after sale

Elements of customer service:

1. Organization

2. Customer care

3. Communication

4. Frontline people

5. Leadership

CUSTOMER RETENTION Process of retaining the existing customers Important because attracting a new customer is 10 times expensive than retaining existing customer

60% of revenue comes from existing customer 2% increase in retention = 10% reduction in operation costs 96% unhappy customers don't complain rather they share the unhappy experience with others

Customer retention takes customer satisfaction to next level – Customer Delight

EMPLOYEE INVOLVEMENT

“Treat your employees exactly as you want them to treat your best customers” – Stephen Covey

INTRODUCTION “Employee Involvement is the backbone of a TQM movement: Effective involvement from every person is necessary for success

Important aspects of employee involvement are:

1. Motivation

2. Empowerment

3. Teams & Teamwork

4. Recognition & Rewards

5. Performance Appraisal

1. EMPLOYEE MOTIVATION “The process of simulating people to accomplish desired goals”

Why?Improves employee involvementPromotes job satisfactionSecures high level of performanceCreates a positive work atmoshpere

THEORIES OF MOTIVATION Maslow’s Hierarchy of Needs Herzberg’s Two Factor Theory

1.MASLOW’S HIERARCHY OF NEEDS

2. HERZBERG’S TWO FACTOR THEORY

EMPOWERMENT

2.EMPLOYEE EMPOWERMENT

The opposite of helplessness or dependency Being empowered implies that person acts from a state of autonomy doing what he knows is the right thing

Defined : “Empowerment is an environment in which people have the ability, the confidence and the commitment to take the responsibility & ownership to improve the process and initiate the necessary steps to satisfy customer requirements within well defined boundaries in order to achieve organizational values & goals”

PRINCIPLES OF EMPOWERMENT

Tell people what their responsibilities are Give them authority equal to the responsibility Set standards of excellence Provide training Give knowledge & information Provide feedback on performance Build trust Allow them to fail & counsel them Treat them with dignity & respect

CONDITIONS FOR EMPOWERMENT

1. Everyone must understand the need for change

2. The system needs to change

3. Organization must provide information, education and skill to its employees

CHARACTERISTICS OF EMPOWERED EMPLOYEES

They feel responsible for their workGiven a free hand in their workBalance their own goals with those of the organizationAre well trained, equipped, creative & customer orientedAre challenged & encouragedMonitor & improve work continuouslyFind new goals & challenges daily

TEAMS & TEAM WORK

INTRODUCTIONTeam – “Group of people working together to achieve common goals”

Teamwork – “cumulative actions of the team during which each member of the team subordinates his individual interests & opinions to fulfil the objectives or goals of the group”

Essential element of TQM

BENEFITS OF TEAM WORKImproved solutions to quality problemImproved ownership of solutionsImproved communicationsImproved integration

TYPES OF TEAMS1. Process improvement team

2. Cross-functional team

3. Natural work teams

4. Self-directed/Self-managed Work Teams

CHARACTERISTICS OF SUCCESSFUL TEAMS1. Sponsor

2. Team charter

3. Team composition

4. Training

5. Ground rules

6. Clear objectives

7. Accountability

8. Well defined decision procedures

9. Resources

10. Trust

11. Effective problem solving

12. Open communication

13. Appropriate leadership

14. Balanced participation

15. Cohesiveness

ELEMENTS OF EFFECTIVE TEAM WORK

1. Purpose

2. Roles & responsibilities

3. Activities

4. Effectiveness

5. Decisions

6. Results

7. Recognition

ACTIVITIES OF TEAM MANAGEMENT

1. Advising

2. Innovating

3. Promoting

4. Developing

5. Organizing

6. Producing

7. Inspecting

8. Maintaining

9. Linking

ROLE OF TEAM MEMBERS Devote to common goals Feel responsible & equal Be interested & motivated Accept Appreciate & Respect Priority to continuous improvement

Participate actively Offer opinions, views & ideas

Trust, support & understand Attend training Abide by the decisions Be responsible for actions of team

Be aware of responsibility Make personal improvement routine

STAGES OF TEAM DEVELOPMENT

FormingStormingNormingPerformingMaintenanceEvaluating

BARRIERS TO TEAM PROGRESS

Insufficient training Incompatible rewards & compensation

First line supervisor resistance

Lack of planning Lack of management support

Access to information systems

Lack of union support Project scope too large Objectives not significant No clear measures of success

No time to improvement

RECOGNITION & REWARD

INTRODUCTIONRecognition – “ a process by which management shows acknowledgement of an employee’s outstanding performance”

Form of positive motivationEssential to sustain employee’s interestReward is tangible such as increments, commissions, cash bonus, etc

NEED FOR RECOGNITION Improved employee morale Shows company’s appreciation for better performance Creates satisfied workplace Create highly motivated workplace Reinforce behavioral patterns Stimulate creative efforts

TYPES OF REWARDS1. Intrinsic rewards

2. Extrinsic rewards

PERFORMANCE APPRAISAL

INTRODUCTION Performance appraisal – “A systematic and objective assessment or evaluation of performance and contribution of individual”

NEED FOR PERFORMANCE APPRAISAL

Identify employees for promotions, salary revisions, transfer, demotion, etc.

Take an inventory of people, skills & potential and compare it with needs

Determine training & development needs Motivate employees by providing feedback Guide to an individual to plan for his career Validate selection process Improve communication

PROCESS

BENEFITS Provides feedback to employees Helps in determining pay assistance Basis for employee promotions, etc Determining TNA Career planning Evaluating staffs Pressure for better performance

SUPPLIER PARTNERSHIP

“Deviate an inch, lose a thousand miles” – Chinese Proverb

INTRODUCTION In today’s competitive world, to meet high quality demands, organizations have recognized the importance of suppliers

Focus on quality has changed supplier relationship

PRINCIPLES OF SUPPLIER-CUSTOMER RELATIONS -

ISHIKAWA Both customer & supplier responsible for quality

Both should be independent of each other

Customer is responsible for providing the supplier with clear requirements

Both should enter into non-adversarial contract

Supplier responsible for providing quality to satisfy customer & provide necessary data on request

Both should decide in measuring quality of the product

Mutual contract for settling disputes

Continually exchange information, teams to improve quality

Both should perform business activities

Both should have best interest of end user in mind

SUPPLIER PARTNERING “A continuing relationship between a buying firm and a supplying firm, involving a commitment over an extended period, an exchange of information and acknowledgement of risks and rewards of the relationships”

Based on trust, common goals & objectives and understanding of each party’s expectation and values

BENEFITS OF PARTNERING Improved quality Reduced cost Increased productivity Increased efficiency Increased market share Increased opportunity for innovation Continuous improvement of products/services

JAPANESE VIEW - KEIRESTU Develop long term relationship with a key supplier rather than having short term relationships with many suppliers

KEY ELEMENTS OF PARTNERING

i. Long-Term commitment

ii. Trust

iii. Shared vision

SUPPLIER SOURCINGi. Sole sourcing – only one supplier for the organization when

organization does not have a choice

ii. Multiple sourcing – use of two or more suppliers for an item

iii. Single sourcing – use of one supplier for an item when several sources are available

SUPPLIER SELECTIONStages:

i. Survey stage

ii. Enquiry stage

iii. Negotiation and selection stage

iv. Experience stage

CONDITIONS FOR SELECTION & EVALUATION

Supplier should appreciate & understand management philosophy of organization

Should have a stable management system Should maintain high technical standards Provide raw materials & parts required by purchaser Supplier should have the capacity to produce Should not breach corporate secrets Easy access to supplier by transportation & communication Sincerity in implementing contract provisions Have effective quality systems such as ISO/QS 9000 Should have a track record of customer satisfaction & credibility

SUPPLIER CERTIFICATION - CRITERIA

Agreed specifications No product related lot rejection for a period of time No non product related rejections for a stated period of time No negative non product related incidents for a stated period of time

Fully documented QS Successfully pass on-site evaluation system Must conduct inspection & tests Ability provide inspection and test data

SUPPLIER RATING SYSTEM

RELATIONSHIP DEVELOPMENT

i. Inspection

ii. Training

iii. Team Approach

iv. Recognition

CONTINUOUS PROCESS IMPROVEMENT “Don’t bother just to be better than your contemporaries or predecessors. Try to be better than yourself” – William Faulkner

INTRODUCTION TQM – philosophy based on the quest for progress & continual improvement

A cyclic learning process A continuous improvement of quality of services & goods with participation from all

INPUT/OUTPUT PROCESS MODEL

JURAN’S TRIOLOGY Joseph M. Juran –Quality Control handbook Divides QM into 4 parts:

1. Quality Planning

2. Quality Control and

3. Quality Improvement

1. QUALITY PLANNING

2. QUALITY CONTROL

3. QUALITY IMPROVEMENT

1. Build awareness on need for quality

2. Set goals for improvement

3. Organize to reach goals

4. Provide training

5. Carry out projects to solve problems

6. Report progress

7. Give recognition

8. Communicate results

9. Keep score

10. Maintain momentum by making annual improvement part of system

JURAN’S TRIOLOGY DIAGRAM

TYPES OF QUALITY PROBLEMS

1. Compliance problems

2. Unstructured problems

3. Efficiency problems

4. Process-Design problems

5. Product-Design problems

IMPROVEMENT STRATEGIES (4 R’S OF TOTAL IMPROVEMENT)

1. Repair strategy

2. Refinement strategy

3. Renovation strategy

4. Reinvention strategy

PDSA CYCLE (DEMING WHEEL/CYCLE)

CONTINUOUS PROCESS IMPROVEMENT THROUGH DEMING’S CYCLE USING

PDCA

BENEFITS OF PDSA CYCLEBenefits of PDSA Cycle can be experienced in the following areas Daily routine management Problem-solving process Project management Continuous development Vendor development Human resources development New product development Process trials

5W2H METHOD

5S HOUSE KEEPING 5S is a practice of housekeeping used to establish and maintain a productive and quality environment

Well organized workplace – safer, efficient & more productive environment

OBJECTIVES OF 5S To create a clean & neat working place To systematize day to day work To improve work efficiency To standardize work practices To improve work discipline To improve quality of work & products

FACTORS IN IMPLEMENTING 5S

1. Participation by all

2. Top management commitment

3. Should be self sustaining

4. Review the program

BENEFITS?

KAIZEN Kaizen is a Japanese word meaning continuous improvement or improvement over improvement

Kaizen vs Kairyo

ELEMENTS OF KAIZEN

FEATURES OF KAIZEN

Value added & non value added activities

Muda (7wastes) – over production, delay, transportation, processing, inventory, waste motion & defective parts

Principles of motion study Principles of material handling

Documentation of SOP

5S for work place Visual management JIT Poka-Yoke Team dynamics