Total Quality Management

By

Muruganantham.GMBA, M.Phil, UGC-NET, Ph.D.

Assistant Professor - DOMS - NITT

MB 722 Total Quality ManagementObjectives:•To provide a basic understanding about the various aspects of quality tools and techniques to enhance the productivity of an organization.

Unit 1 Introduction•Principles and Concepts of Quality - Dimensions of Quality - The Deming Philosophy - Quality Management Systems - Quality Planning - Functional planning deployment from Strategic plans - Benefits of TQM.

Unit 2 Continuous Improvement•Benchmarking - Quality Costs - Quality Audits - Product, Process and System - Supplier Evaluation - Continuous Process Improvements - 5S Concepts.

Unit 3 Process Capability •Six Sigma concepts - New Seven tools of Quality, Business Process Reengineering, Quality Function Deployment - Failure Mode and Effect Analysis.

Unit 4 Business Excellence•Business Excellence Awards (EFQM, Deming, Malcolm Balridge), Indian Quality Awards and Case Studies - Human Resource Management in TQM environment.

Unit 5 HR Aspects•Employee Involvement - Motivation - Teams - Reward System, Quality circles - Introductory aspects of ISO 9000 series Standards and ISO 14000.

Text Books•Dale H. Besterfield, Carol Besterfield, Glen H Besterfield and Mary Besterfield, Total Quality Management, Pearson, New Delhi.•Subburaj Ramasamy, Total Quality Management, Tata McGraw Hill, New Delhi. •Janakiraman and Gopal, Total Quality Management, PHI, New Delhi.

Reference Books•Juran, Gryna and Bingham, Quality Control Hand Book, McGraw Hill, New Delhi. •Howard, Alan, Rosa and David, Quality Management, Tata McGraw Hill, New Delhi. •Poornima M.Charantimath,Total Quality management, Pearson Education, New Delhi.

Introduction to TQMQuality Concept Evolved in USA.TQM concept evolved in Japan - world war II.Edward Deming - use of statistical methods

RM…..Consumer research

TQM set a new trend in the Japanese industry by shifting the management’s focus from profits to quality).

During 1980’s American….. Ford Motors, XeroxMfu Companies - Industrial Revolution

Q in IndiaNo competition - Public sector, one or two playersTop Management - sold, cost, awareness & interest level - selling concept1991 LPG era …competition, car, Marketing concept, customer is the king

Introduction to TQM cont…

COMPETITION CAUSES PERFORMANCEGlobalisation - Borderless world, Export - local Q, To succeed …South Indian CompaniesMindset changeIndian brands - global marketPharma, Sundaram, Six sigma, Tata steelISOSurvival ……

Customer SatisfactionCompetitiveness is measured by three parameters – Quality, price

and delivery.

Benefits of Quality efforts

• Increased Customer Satisfaction • More efficient processes• Higher productivity• Lower costs

• Increased market share• Higher Profits• High employees morale

Total Quality Management

TQM is a Management Approach - originated -1950’s. Become more popular since early1980’s

Description of the culture, attitude of the Org Act of managing the whole org, its suppliers and buyers to achieve

excellence.

Union of Japanese Scientists and Engineers(JUSE)Defines TQM “a set of systemic activities carried out by the entire organisation to

effectively and efficiently achieve company objectives to provide products and services with a level of quality that satisfies customers, at the appropriate time and price”.

TQM cont..

TQM is associated with ..doing right things right, first time.Method by which management and employees involved in

the continuous improvement.

WHAT IS QUALITY ?

Juran(1974)…. “Fitness for use”

Crosby(1979) VP of International Telephone & Telegraph (ITT)…

“Conformance to requirements or specifications”

Deming(1900 – 1993) statistician worked in western Electric company….

“Quality should be aimed at the needs of the consumer, present and future”.

Quality Cont…

Walter A Shewhart• Pioneer of Modern Quality Control• “founder of the control chart” (e.g. X-bar and R chart).• originator of the plan-do-check-act cycle. (PDCA Cycle)• perhaps the first to successfully integrate statistics, Engineering, and

economics.

• defined quality

objective quality: quality of a thing independent of people. subjective quality: quality is relative to how people perceive it. (value)

Quality cont…

In ISO 9000 : a more definitive definition of quality is given.“degree to which a set of inherent characteristics fulfillsRequirements”.Degree - quality can be used with adjectives such as poor, good

and excellent.Inherent - something, especially as a permanent characteristics.Characteristics can be quantitative or qualitative.Requirement is a need or expectation that is stated; customers,

and other interested parties.

The term quality is perceived differently by different people.

Quality Cont…

Quality is what the customer say, it is.

Excellence in everything.

Quality Cont…

Quality can be quantified as follows: Q =P / EWhere Q - Quality, P - Performance, E - Expectations. Quality of the product is decided by customer…. conformance to specifications, assured performance

level, safety, effective packaging, on - time delivery, efficient technical service and caring for the customer’s feedback.

Quality cont…Quality is both a user oriented and a production oriented

expression.

Quality, therefore is Defined by the customers, A measure of achievement of customer satisfaction Value for money Keeping one’s word Ensuring no defects A precise and measurable variable Utility to the society.

Stakeholder Expectations

• Customers - Product Quality• Employees - Career / Work Satisfaction• Owners - Investment Performance• Vendors - Continuing Business Opportunity.

Evolution of Quality1920’s - QC - Process control; - Acceptance sampling1930’s - Great depression after world war - Defense role in quality1950’s - TQC, - Japanese QC

1960’s - QA in new product development1970’s - Worldwide management of Quality1980’s - Quality systems and standards1990’s - Quality as a main winning point2000’s - Continual improvement.

A good Quality process

Driving the business from customer needs Setting a clear vision which is deployed down into coordinated action

Managing processes to their optimal capability Using the contribution of every person to the full Managing well beyond company boundaries

Developing workers to manage and mangers to lead Becoming faster, leaner and more responsive to market opportunities.

Dimensions of quality Performance: Also called Functionality or Operationality. It is the main operating characteristics of a product.Example: Crystal clear picture, for clear sound etc., in a TV set.

Enhancement or Additional Features: It represents the additional features supplementing the product’s basic function.

Example: Auto power off when not in use, Telephone directorystorage, In built videogames, child lock facility etc.,

Reliability: Probability that a product is performing its intended function over its intended life and under the stated conditions.

Dimensions of quality cont..

Conformance: The extent to which the product’s design and operating characteristics satisfy the pre . determined standards.

Durability: Measure of products. useful life,

Serviceability: Time consumed in servicing, Courtesy, Competence and ease of repair or reconditioning of a product.

Aesthetics: Should appeal to senses. It is Human response to a

product . how it looks, feels, sounds, tastes or smells..Reputation: Past performance, Brand image

New and old culture of Q

Q ElementsDefinitionDecisions

ResponsibilityProblem solvingProcurement

EmphasisManager’s Role

Prior to TQM With TQMProduct oriented CustomerShort term Long term

Quality control Every oneManagers TeamsPrice Life cycle cost &

partnership

Detection PreventionPlan, assign Delegate, coach, facilitate and mentor

Quality Management

Quality Management - coordinated activities to direct and control an

organization with regard to quality

QM = QP + QA + QC + QI

• Quality Plan-focuses on setting quality objectives• Quality Assurance- providing confidence that quality

requirements will be fulfilled• Quality Control - focused on fulfilling quality requirements • Quality Improvement - focused on increasing the ability to fulfill

quality requirements

Quality Management

Quality Planning: Planning process to meet the customer requirements

Define Q. Policy, Objectives and requirements.

Statement describes an org commitment to Q..Guides everyone in the org.Plan about the resources.Identify your customer, Determine their needs, Translate them

into your language, Develop a product.

Juran’s Q Planning..

Principles of TQM

Management commitment Customer Focus Continuous Improvement Employee Empowerment

Deming Philosophy

Edwards Deming hadproposed fourteen principlestowards quality achievement.

These principles are summarizedas follows:

1.Create and Publish the Aims and Purposes of the Organization: Long range goals, resource allocation for innovation, R&D, training and continuous education for the employees.

2. Adopt new philosophy : Focus on the customer satisfaction, prevention of non - conformance, rather than detection and correction,

3. Understand the Purpose of Inspection:

Eliminate the need for mass inspection by building quality into the product. Mass inspection is costly and unreliable. Mass inspection is managing for failure and Defect prevention is managing for

success To improve the process and reduce its cost, use of statistical techniques should

be adopted.

4. Stop Awarding Business Based on Price Alone: End the practice of selecting the suppliers, based solely on price. Price is meaningless, without quality. Minimize total cost by working with a single supplier, thereby

developing a long term ethical and economical relationship, loyalty and trust with the suppliers.

5. Improve constantly and forever - the system of production and service to improve quality and productivity and to decrease cost.

6. Institute training on the job. Each employee is to be trained in quality improvement skills,

communication skills, statistical methods and problem solving methods.

Management must allocate resource to train employees to perform their jobs in the best possible manner.

7. Teach and Institute leadership: Improving Supervision is Management’s responsibility.

Management must provide supervisors with training on analytical methods.

Instead of focusing on a negative, fault-finding atmosphere, Supervisors should create a positive, supportive climate.

All communications must be clear from top management to supervisors to operators.

8. Drive out Fear, Create Trust, and Create a climate for Innovation:

Fear is caused by lack of job security, performance appraisal by superiors, ignorance of organizational goals, poor supervision and poor knowledge of the job.

All the employees are to be treated with dignity - Only then, they can provide ideas and act upon for improvement.

Management must encourage open, effective communication and team work.

Management can begin by providing workers with adequate training, good supervision, and proper tools to do the job.

9. Optimize the Efforts of Teams and groups:

Break down barriers between departments, research, design, sales and production .

must work together to foresee problems in production .

10. Eliminate slogans, exhortations and numerical targets for the workforce:

Goals - achievable and the methods are known and made available, to all the employees.

Improvements in the process cannot be made unless the tools and methods are available.

11. Eliminate quotas or work standards: Quota and work standards give importance to quantity, rather than quality. They encourage poor workmanship in order to meet their quotas Instead of fixing quantity, the management must concentrate on the methods

for improvement and quality. Statistical method of Process Control may replace Quotas.

12.Remove barriers that rob people of their right to pride of workmanship;

Loss of pride in workmanship occurs in organizations, because of the following reasons:

Workers - unaware how to relate their efforts to the organization’s missions. They are blamed for system failure. Poor designs leading to waste of product or service. Inadequate training. Punitive supervision. Inadequate or faulty equipments and tools provided for performing the job.

When workers feel proud of their work, they will grow fully and successfully, in their job and out of their job.

13.Encourage Education and Self-Improvement

14. Put everyone in the company to work to

accomplish the transformation.

Create a structure in top management that will emphasize the preceding thirteen points every day.

The principles may be aptly called,

“codes of ethics for Quality”.

Barriers to TQM implementation

• Lack of Management commitment• Inability to change Organisation culture• Improper planning• Inadequate use of empowerment• Lack of continuous training and education• Paying inadequate attention to internal and external

customers.• Failure to continually improve

Strategic Planning to functional planning

Benchmarking

Concept of Benchmarking taken the new meaning since 1970s.Companies compared the performance CY… LYParameters like cost, profit, sales volume, expenses, etc…..Target

In a Market driven – hyper competitive – Globalised economy

“The process of identifying, understanding, and adapting outstanding practices and process from organisations anywhere in the world to an organisation to improve its

performance”…….Systematic and continuous measurement process………

Benchmarking

Systematic method by which organisations can measure themselves against the best in class org in order to achieve the best of the best.

It is the search for the industry best practices that lead to superior performance.

BenchmarkingReasons to Benchmark:Helps to set new goals and adopts the best practicesHelps to develop the strengths and reduce the weaknessBenchmarking is time and cost efficient

Types of Benchmarking:a) Internal b) Competitive – to improve the performance to the level of the

competitorsc) Functional or process or generic benchmarking – certain

process which are common across the industry Marketing, Finance, Human Resource, R&D, etc

Re-engineeringReverse engineering

…Product Benchmarking (Reverse engineering)

Benchmarking process:

a)Identify what function is to be benchmarked, (CSF)…..PROCESS that causing most trouble, factors that are not

performing up to the satisfaction level, critical factors that result in customer satisfaction, areas in which more competition,

Process or function that would help to achieve Competitive Advantage.

b)Identify best-in -class companyc) Identify the data that to be collectedd) Analyse the data to arrive at the current performance gap

Benchmarkinge) Communicate the benchmark findings to the employeesf) Establish functional goals to achieve objectivesg) Develop action plan, implement and monitor the progress.

Examples:

Benefits of Benchmarking: Company will become competitive Customer requirements can be taken care of Helps in continuous improvement Understanding the best industry practices

Benchmarking

…..Reasons for failure of Benchmarking:Lack of commitment, wrong selection process,Not being cost effective, wrong selection of team members and not positioning the

benchmarking within a larger strategy

Xerox –Case analysis

Xerox –Case analysisXerox 914 – First plain copier- 1959….New industry During 1960’s high growth….selling all it could produceCA.. STRONG PATENT, GROWING MARKET, LITTLE COMPETITIONNo focus on customerDuring 1970’s IBM, Kodak,,,,several Japanese companies High Q Low Volume copiers ……..ignoredFederal Trade commission accused xerox ..illegally monopolizing

the copier business 1700 patents to competitors1980 market share fell down by less than 50 per cent

Company would not survive

Xerox –Case analysisRework, scrap, excessive inspection, lost business costing more

than 20 per cent of revenueComparing with competition

In 1983 company president David Kearns …need for long range planning

Team……Q strategy for Xerox

Benchmarked more than 200 process

Customer satisfaction was important

Malcolm Baldrige National Q award

1989David Q isA Race without Finish Line………

Quality CostAppraisal cost

– Inspection and Testing of incoming material, In-process inspection, Final inspection,

– Product Inspection and Testing– Maintaining accuracy of test equipment

Prevention Cost– Quality Planning & Inspection, New Products Review, Product Process Design

– Process Control, Quality training, TQM

Failure cost

Internal Failure Cost

External Failure cost

• Internal Failure Costs– Scrap, Rework, Retest, Failure Analysis

– Downtime,Yield Losses.External Failure cost

– Complaint Adjustment, Returned Product

– Warranty Charges, Liability Costs, Indirect Costs

5S Principle

• SEIRI –

• SEITON –

• SEISO –

• SEIKETSU –

• SHITSUKE -

THE 5S PRINCIPLES

• SEIRI – Organisation/Sort out

• SEITON – Orderliness/Systemize

• SEISO – The Cleaning/Shining

• SEIKETSU – Standardize

• SHITSUKE - Sustain/Discipline

IDEA BEHIND 5S

• The 5S philosophy focuses on effective workplace organisation, helps to simplify the workplace environment and reduce waste, while improving quality and safety.

• Developed by the Japanese - Housekeeping System.

• Helps Create a Better Working Environment and a Consistently High Quality Process.

1. Seiri or sorting

Seiri means sorting through everything in each work area. It requires keeping only what is necessary.

• Materials, tools, equipment and supplies that are not frequently used should be moved to a separate, common storage area. Items that are never used should be discarded. This makes it easier to find the things needed and frees up additional space.

2. Seiton or systematise

• This is the next step. It requires organising, arranging and identifying everything in a work area for efficient retrieval and return to its proper place.

• Commonly used tools are readily available; storage areas, cabinets and shelves are properly labeled; and painted to make it easier to spot dirt, spaces are outlined on the floor to identify work areas, movement lanes, storage areas, finished product areas and so on.

3. Seiso or shining

• Once everything from each individual work area to the entire facility is sorted and organised, Regular cleaning and inspection makes it easy to spot lubricant leaks,

equipment misalignment, breakage, missing tools.

• When done on a regular, frequent basis, cleaning and inspecting does not take a lot of time and, in the long run, actually saves times.

4. Seiketsu or standardise• Seiketsu ensures that the first three steps of the 5S programme continue to be

effective.• The good practices developed in the first three steps need to be standardized.• Therefore, organisations must develop a work structure that will support the new practices and turn them into habits.

• Shitsuke or self-discipline

• This implies continuous training and maintenance of standards. The organisation must build a formal system for monitoring the results of the programme. A follow-up is a must for the above four steps to continue to be practice.

• There will have to be continuous education about maintaining standards. When there are changes that will affect the 5S programme -- such as new equipment, new products or new work rules -- it is essential to make changes in the standards and provide training.

• A good way to continue educating employees and maintaining standards is to use 5S posters and signs.

• If tools and materials are conveniently located in uncluttered work areas ----

• Operators spend less time looking for items

• This leads to higher workstation efficiency, a fundamental goal in mass production

• TIME SAVING • QUICK RETRIEVAL• ACCIDENTS & MISTAKES MINIMIZED• INCREASES SPACE• CREATES WORKPLACE OWNERSHIP

LITMUS TEST FOR 5S

• 30 SECOND RULE• ONE MUST LOCATE THE ITEM WITH IN 30 SECOND IF 5S IS PROPERLY

IMPLEMENTED

ICICI Bank saved more than Rs 600,000 a year on payments to third-party warehousing companies, since records can now be stored in the office.

Another advantage is that Five S could be easily followed by everybody from the "peon to the president",

The best thing about Five S is that it is extremely simple and yet powerful. More importantly, the benefits are visible immediately. "Five S is a workplace transformation exercise”.