Table Of Contents

TOTAL QUALITY MANAGEMENT- INTRODUCTION .................................. 3

INTRODUCING TQM INTO A BUSINESS ................................................... 4

CONCEPT OF TQM ...................................................................................... 5

UNDERSTANDING TQM .............................................................................. 6

THE EIGHT ELEMENTS OF TQM ................................................................ 8

A SIMPLIFIED TQM DIAGNOSTIC MODEL .............................................. 12

IMPROVING FINANCIAL SERVICES THROUGH TQM: A CASE STUDY .................................................................................................................... 14

STRATEGIES TO SUCCEED IN BUSINESS WITH TQM ......................... 21

1. BASIC PRINCIPLES OF TQM................................................................212. GET QUALITY GOODS FROM YOUR SUPPLIERS.............................243. INSPECTING FOR QUALITY.................................................................264. TECHNIQUES TO GET MORE BUSINESS...........................................28

TQM AT MOTOROLA………………………………………………………………………30

CONCLUSION .......................................................................................... 33

BIBLIOGRAPHY ......................................................................................... 34

Total Quality Management- Introduction

Total Quality Management is a management approach that originated in the 1950's and has steadily become more popular since the early 1980's. Total Quality is a description of the culture, attitude and organization of a company that strives to provide customers with products and services that satisfy their needs. The culture requires quality in all aspects of the company's operations, with processes being done right the first time and defects and waste eradicated from operations.

Total Quality Management, TQM, is a method by which management and employees can become involved in the continuous improvement of the production of goods and services. It is a combination of quality and management tools aimed at increasing business and reducing losses due to wasteful practices.

Some of the companies who have implemented TQM include Ford Motor Company, Phillips Semiconductor, SGL Carbon, Motorola and Toyota Motor Company.

A company commitment to develop a process that achieves high quality product and customer satisfaction is known as total quality management.

Total Quality Management or TQM is a management strategy to embed awareness of quality in all organizational processes.

TQM aims to do things right the first time, rather than need to fix problems after they emerge or fester.

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Introducing TQM into a Business

TQM is not an easy concept to introduce into businesses - particularly those that have not traditionally concerned themselves too much with understanding customer needs and business processes. In fact - many attempts to introduce TQM fail!

One of the reasons for the challenge of introducing TQM is that it has significant implications for the whole business.

For example, it requires that management give employees a say in the production processes that they are involved in. In a culture of continuous improvement, workforce views are invaluable. The problem is - many businesses have barriers to involvement. For example, middle managers may feel that their authority is being challenged.

So "empowerment" is a crucial part of TQM. The key to success is to identify the management culture before attempting to install TQM and to take steps to change towards the management style required for it. Since culture is not the first thing that managers think about, this step has often been missed or ignored with resultant failure of a TQM strategy.

TQM also focuses the business on the activities of the business that are closest to the customer - e.g. the production department, the employees facing the customer. This can cause resentment amongst departments that previously considered themselves "above" the shop floor.

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Concept Of TQM

Management strategy to embed awareness of quality in all organizational processes. Quality assurance through statistical methods is a key component. TQM aims to do things right the first time, rather than need to fix problems after they emerge or fester. TQM may operate within quality circles, which encourage the meeting of minds of the workforce in different departments in order to improve production and reduce wastage.

In a manufacturing organization, TQM generally starts by sampling a random selection of the product. The sample is then tested for things that matter to the real customers. The causes of any failures are isolated, secondary measures of the production process are designed, and then the causes of the failure are corrected. The statistical distributions of important measurements are tracked. When parts' measures drift out of the error band, the process is fixed. The error band is usually tighter than the failure band. The production process is thereby fixed before failing parts can be produced.

It's important to record not just the measurement ranges, but what failures caused them to be chosen. In that way, cheaper fixes can be substituted later, (say, when the produce is redesigned), with no loss of quality. After TQM has been in use, it's very common for parts to be redesigned so that critical measurements either cease to exist, or become much wider.

It took people a while to develop tests to find emergent problems. One popular test is a "life test" in which the sample product is operated until a part fails. Another popular test is called "shake and bake". The product is mounted on a vibrator in an environmental oven, and operated at progressively more extreme vibration and temperatures until something fails. The failure is then isolated and engineers design an improvement.

Often a TQMed product is cheaper to produce (because there's no need to repair dead-on-arrival products), and can yield an immensely more desirable product.

Understanding TQM

Total Quality Management (TQM) is a business philosophy that seeks to encourage both individual and collective responsibility to quality at

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every stage of the production process from initial design and conception through to after sales service.

Many businesses may not use the term TQM anymore but the philosophy is still very much part of most business thinking. It is seen as being a way in which a business can add value to its product and to gain competitive advantage over its rivals. The former may allow a business to charge a higher price for its product or service Management structures have to be more consultative and less hierarchical.

Workers have to be empowered to be able to make decisions at all levels of the organisation.

Workers have to be trained and involved in the building of the philosophy.

Communication links between workers and management and between the business and all aspects of the supply chain must be excellent.

Commitment to TQM must be backed by action, which the customer can see, and experience.

TQM can be addressed in a business in a number of ways. The most common are:

A policy of zero defects - any problems in the production process are filtered out before they get anywhere near the customer.

Quality chains - each stage of the production process is seen as being a link in the chain right down to the relationship between one worker in the process and another. whilst the latter can be a key feature of its marketing programme.

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TQM requires a change in the way in which businesses operate. It implies a number of things if it is to work successfully: Quality circles - meetings of those directly involved in the production

process to discuss and solve problems and make improvements to the production process.

Statistical monitoring - the use of data and statistics to monitor and evaluate production processes and quality.

Consumer feedback - using market research and focus groups to identify consumer needs and experiences and to build these into the process.

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The Eight Elements Of TQM

Total Quality Management is a management approach that originated in the 1950's and has steadily become more popular since the early 1980's. Total Quality is a description of the culture, attitude and organization of a company that strives to provide customers with products and services that satisfy their needs. The culture requires quality in all aspects of the company's operations, with processes being done right the first time and defects and waste eradicated from operations.

To be successful implementing TQM, an organization must concentrate on the eight key elements:

1. ETHICS 2. INTEGRITY 3. TRUST 4. TRAINING 5. TEAMWORK 6. LEADERSHIP 7. RECOGNITION 8. COMMUNICATION

1. ETHICS

Ethics is the discipline concerned with good and bad in any situation. It is a two-faceted subject represented by organizational and individual ethics. Organizational ethics establish a business code of ethics that outlines guidelines that all employees are to adhere to in the performance of their work. Individual ethics include personal rights or wrongs.

2. INTEGRITY

Integrity implies honesty, morals, values, fairness, and adherence to the facts and sincerity. The characteristic is what customers (internal or external) expect and deserve to receive. People see the opposite of integrity as duplicity. TQM will not work in an atmosphere of duplicity.

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3. TRUST

Trust is a by-product of integrity and ethical conduct. Without trust, the framework of TQM cannot be built. Trust fosters full participation of all members. It allows empowerment that encourages pride ownership and it encourages commitment. It allows decision making at appropriate levels in the organization, fosters individual risk-taking for continuous improvement and helps to ensure that measurements focus on improvement of process and are not used to contend people. Trust is essential to ensure customer satisfaction. So, trust builds the cooperative environment essential for TQM.

4. TRAINING Training is very important for employees to be highly productive. Supervisors are solely responsible for implementing TQM within their departments, and teaching their employees the philosophies of TQM. Training that employees require are interpersonal skills, the ability to function within teams, problem solving, decision making, job management performance analysis and improvement, business economics and technical skills. During the creation and formation of TQM, employees are trained so that they can become effective employees for the company.

5. TEAMWORK

To become successful in business, teamwork is also a key element of TQM. With the use of teams, the business will receive quicker and better solutions to problems. Teams also provide more permanent improvements in processes and operations. In teams, people feel more comfortable bringing up problems that may occur, and can get help from other workers to find a solution and put into place. There are mainly three types of teams that TQM organizations adopt:

a. Quality Improvement Teams or Excellence Teams (QITS) - These are temporary teams with the purpose of dealing with specific problems that often re-occur. These teams are set up for period of three to twelve months.

b. Problem Solving Teams (PSTs) - These are temporary teams to solve certain problems and also to identify and overcome causes of problems. They generally last from one week to three months.

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c. Natural Work Teams (NWTs) - These teams consist of small groups of skilled workers who share tasks and responsibilities. These teams use concepts such as employee involvement teams, self-managing teams and quality circles. These teams generally work for one to two hours a week.

6. LEADERSHIP It is possibly the most important element in TQM. It appears everywhere in organization. Leadership in TQM requires the manager to provide an inspiring vision, make strategic directions that are understood by all and to instill values that guide subordinates. For TQM to be successful in the business, the supervisor must be committed in leading his employees. A supervisor must understand TQM, believe in it and then demonstrate their belief and commitment through their daily practices of TQM. The supervisor makes sure that strategies, philosophies, values and goals are transmitted down through out the organization to provide focus, clarity and direction. A key point is that TQM has to be introduced and led by top management. Commitment and personal involvement is required from top management in creating and deploying clear quality values and goals consistent with the objectives of the company and in creating and deploying well defined systems, methods and performance measures for achieving those goals.

7. COMMUNICATION

It binds everything together. Starting from foundation to roof of the TQM house, everything is bound by strong mortar of communication. It acts as a vital link between all elements of TQM. Communication means a common understanding of ideas between the sender and the receiver. The success of TQM demands communication with and among all the organization members, suppliers and customers. Supervisors must keep open airways where employees can send and receive information about the TQM process. Communication coupled with the sharing of correct information is vital. For communication to be credible the message must be clear and receiver must interpret in the way the sender intended.

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There are different ways of communication such as:

a) Downward communication - This is the dominant form of communication in an organization. Presentations and discussions basically do it. By this the supervisors are able to make the employees clear about TQM.

b) Upward communication - By this the lower level of employees are able to provide suggestions to upper management of the affects of TQM. As employees provide insight and constructive criticism, supervisors must listen effectively to correct the situation that comes about through the use of TQM. This forms a level of trust between supervisors and employees. This is also similar to empowering communication, where supervisors keep open ears and listen to others.

c) Sideways communication - This type of communication is important because it breaks down barriers between departments. It also allows dealing with customers and suppliers in a more professional manner.

8. RECOGNITION

Recognition is the last and final element in the entire system. It should be provided for both suggestions and achievements for teams as well as individuals. Employees strive to receive recognition for themselves and their teams. Detecting and recognizing contributors is the most important job of a supervisor. As people are recognized, there can be huge changes in self-esteem, productivity, quality and the amount of effort exhorted to the task at hand. Recognition comes in its best form when it is immediately following an action that an employee has performed. Recognition comes in different ways, places and time such as places, time and ways.

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A Simplified TQM Diagnostic Model

WHY LEARN A SIMPLIFIED TQM DIAGNOSTIC MODEL?

This model can help you gain confidence in making TQM decisions:

Identify necessary elements for a successful quality management approach.

Know how they fit together to successfully accomplish quality goals. Display the most options, thus helping make the right quality

management choices.

This model can help you integrate daily TQM tasks with strategic TQM goals:

Learn skills to balance competitive quality strategic planning with daily operational choices.

Learn skills to maximize human and organizational resources for daily productivity demands.

This model can help you understand and enjoy team technology in the context of TQM:

Learn how to avoid strategies that lead to the "program-of-the-month" mentality.

Learn how to keep management commitment for TQM at its highest level.

Learn how to avoid employee "end-runs" around management during TQM implementation.

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DIAGRAMATIC REPRESENTATION OF A SIMPLIFIED TQM MODEL

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[O] Organizational Management

[ I ] Individual Management

[Q] Quality Management

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Improving Financial Services Through TQM: A Case Study

The work described in this case study was undertaken in a young, rapidly expanding company in the financial services sector with no previous experience with Total Quality Management (TQM). The quality project began with a two-day introductory awareness program covering concepts, cases, implementation strategies and imperatives of TQM. The program was conducted for the senior management team of the company. This program used interactive exercises and real life case studies to explain the concepts of TQM and to interest them in committing resources for a demonstration project

Step 1 : DEFINE THE PROBLEM

1.1) Selecting the theme:

A meeting of the senior management of the company was held. Brainstorming produced a list of more than 20 problems. The list was prioritized using the weighted average table, followed by a structured discussion to arrive at a consensus on the two most important themes - customer service and sales productivity.

1.2) PROBLEM = CUSTOMER DESIRE – CURRENT STATUS:

Current status: What did the individual group members think the turnaround is currently? As each member began thinking questions came up. "What type of policies do we address?" Medical policies or non-medical? The latter are take longer because of the medical examination of the client required. "Between what stages do we consider turnaround?" Perceptions varied, with each person thinking about the turnaround within their department. The key process stages were mapped:

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Several sales branches in different parts of the country sent proposals into the Central Processing Center. After considerable debate it was agreed at first to consider turnaround between entry into the computer system at the Company Sales Branch and dispatch to the customer from the Central Processing Center (CPC). Later the entire cycle could be included. The perception of the length of turnaround by different members of the team was recorded. It averaged:

Non-Medical Policies      17 days Medical Policies             35 days

Customer desire:

What was the turnaround desired by the customer? Since a customer survey was not available, individual group members were asked to think as customers -- imagine they had just given a completed proposal form to a sales agent. When would they expect the policy in hand? From the customer's point of view they realized that they did not differentiate between medical and non-medical policies. Their perception averaged out six days for the required turnaround.

"Is this the average time or maximum time that you expect?" they were asked. "Maximum," they responded. It was clear therefore that the average must be less than six days. The importance of "variability" had struck home. The concept of sigma was explained and was rapidly internalized. For 99.7 percent delivery within the customer limit the metric was defined.

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Customer desire: Average+3 Sigma turnaround = less than 6 days

Current status:Non-medical policies (Average 19/Sigma 15) Average+3 sigma= 64 daysMedical (Average 37/Sigma 27) Average+3 sigma= 118 days

The Problem was therefore defined:Reduce Average+3 sigma of turnaround for: Non-Medical Policies From 64 to 6 daysMedical Policies From 118 to 6 days

The performance requirement appeared daunting. Therefore the initial target taken in the Mission Sheet (project charter) was to reduce the turnaround by 50 percent -- to 32 and 59 days respectively.

Step 2 : ANALYSIS OF THE PROBLEM

In a session the factors causing large turnaround times from the principles of JIT were explained. These were:

Input arrival patterns

Waiting times in process - Batching of work - Imbalanced processing line - Too many handovers - Non-value added activities, etc. Processing times Scheduling Transport times Deployment of manpower

Typically it was found that waiting times constitute the bulk of processing turnaround times. Process Mapping (Value Stream Mapping in Lean) was undertaken. The aggregate results are summarized below:

Number of operations 84 Number of handovers 13 In-house processing time (estimated) 126 man-minutes.Range of individual stage time 2 to 13 minutes.

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Could this be true? Could the turnaround be 126 minutes for internal processing without waiting? The group started to question of the status quo. The change process had begun. To check this estimate it was decided to collect data -- run two policies without waiting and record the time at each stage. The trial results amazed everyone: Policy No. 1 took 100 minutes and Policy No. 2 took 97 minutes. Almost instantly the mindset changed from doubt to desire: "Why can't we process every proposal in this way?"

Step 3 : GENERATING IDEAS

1. Determine the station with the maximum time cycle which cannot be split up by reallocation - 8 minutes.2. Balance the line to make the time taken at each stage equal 8 minutes as far as possible.3. Reduce the stages and handovers - 13 to 8.4. Eliminate non-value added activities - make personnel sit next to each other.5. Agree processing to be done in batch of one proposal.

Step 4 : TESTING THE IDEA

Testing in stages is a critical stage. It allows modification of ideas based upon practical experience and equally importantly ensures acceptance of the new methods gradually by the operating personnel.

Stage 1

Run five proposals flowing through the system and confirm results. The test produced the following results:

Average turnaround time: < 1 dayIn-house processing time: 76 minutes.

There was jubilation in the team. The productivity had increased by 24 percent. The head of the CPC summarized: "I gave five files for processing, and went for a meeting. Emerging from the meeting about 30 minutes later I was greeted by the dispatch clerk jubilantly reporting, "'Madam, the TQM files are ready for dispatch.'" The mindset was dramatically changed and line personnel were now keen to push the implementation.

Stage 2

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It was agreed to run the new system for five days -- and compute the average and sigma of the turnaround to measure the improvement. It was agreed that only in-house processing was covered at this stage and that the test would involve all policies at the CPC but only one branch as a model. This model, once proved, could be replicated at other branches.

The test results showed a significant reduction in turnaround:

1. for all non-medical policies From 64 to 42 days or 34%2. For policies of the model branch From 64 to 27 days of 60%

The Mission Sheet goal of 50 percent reduction had been bettered for the combined model branch and CPC. Further analysis of the data revealed other measures which could reduce the turnaround further. Overall reduction reached an amazing 75 percent. Turnaround, which had been pegged at 64 days, was now happening at 99.7 percent on-time delivery in 15 days.

Step 5 : IMPLEMENTING THE IDEAS

Regular operations with the new system was planned to commence. However, two weeks later it was still not implemented. One of the personnel on the line in CPC had been released by his department for the five-day trial to sit on the line but was not released on a regular basis. The departmental head had not attended the TQM awareness program and therefore did not understand why this change was required.

There were two options -- mandate the change or change the mindset to accept the change. Since the latter option produces a robust implementation that will not break down under pressures it was agreed that the group would summarize TQM, the journey and the results obtained in the project so far and also simulate the process with a simple exercise in front of the department head. This session was highly successful and led to the release of the person concerned on a regular basis.

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Step 6 : CHECK THE RESULT

The process was run for one month with regular checks. The results obtained were marginally better than the trials conducted in Step 5:

Average 11 daysSigma 9 daysAverage+3 sigma 38 days

Step 7 : STANDARDIZE CONTROL/DOCUMENT THE IMPROVEMENT STORY

Essentially the in-house processes in two centers of processing - the CPC and one sales branch had been impacted so far. Sample x-bar and sigma control charts for the CPC are shown below:

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A special "Grind It In" session was conducted for line personnel to ensure that the control chart was updated every day, and any deterioration was dealt with by finding and killing the root causes of the problems.

Customer reaction: Sales management and sales agents clearly noticed the difference.

Adoption of a similar process at the CPC and the model branch for medical policies has already reduced the average+3 sigma of turnaround time by 70 percent -- from 118 days to 37 days. The corresponding all-India reduction was from 118 days to 71 days -- a 60 percent reduction.

FUTURE ACTIONS

Non-medical policies: Goal to reduce turnaround from 42 to about 15 days.

i. Roll out process to branches to achieve 24 days throughout the country.

ii. Minimize rework by analyzing, prioritizing and training sales branches to avoid the causes of rework.

iii. Working with the bank to improve the turnaround time of banking checks and considering processing proposals while check clearance is in progress.

Medical policies: Goal to reduce turnaround from 71 days to about 24 days.

1. Roll out process to branches to reduce turnaround from 71 to 37 days.

2. Streamline the process of medical exam of the client from 37 to 24 days

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Strategies to Succeed in Business with TQM

1. BASIC PRINCIPLES OF TQM

The basic principles for the Total Quality Management (TQM) philosophy of doing business are to satisfy the customer, satisfy the supplier, and continuously improve the business processes.

How do you satisfy the customer? Why should you satisfy the supplier? What is continuous improvement?

HOW TO SATISFY THE CUSTOMER?

The first and major TQM principle is to satisfy the customer--the person who pays for the product or service. Customers want to get their money's worth from a product or service they purchase.

Users

If the user of the product is different than the purchaser, then both the user and customer must be satisfied, although the person who pays gets priority.

Company philosophy

A company that seeks to satisfy the customer by providing them value for what they buy and the quality they expect will get more repeat business, referral business, and reduced complaints and service expenses.

Internal customers

Within a company, a worker provides a product or service to his or her supervisors. If the person has any influence on the wages the worker receives, that person can be thought of as an internal customer. A worker should have the mind-set of satisfying internal customers in order to keep his or her job and to get a raise or promotion.

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WHY SHOULD YOU SATISFY THE SUPPLIER?

A second TQM principle is to satisfy the supplier, which is the person or organization from whom you are purchasing goods or services.

External suppliers:

A company must look to satisfy their external suppliers by providing them with clear instructions and requirements and then paying them fairly and on time. It is only in the company's best interest that its suppliers provide it with quality goods or services, if the company hopes to provide quality goods or services to its external customers.

Internal suppliers:

A supervisor must try to keep his or her workers happy and productive by providing good task instructions, the tools they need to do their job and good working conditions. The supervisor must also reward the workers with praise and good pay.

Get better work:

The reason to do this is to get more productivity out of the workers, as well as to keep the good workers. An effective supervisor with a good team of workers will certainly satisfy his or her internal customers.

Empower workers:

One area of satisfying the internal suppler is by empowering the workers. This means to allow them to make decisions on things that they can control. This not only takes the burden off the supervisor, but it also motivates these internal suppliers to do better work.

CONTINUOUS IMPROVEMENT

The third principle of TQM is continuous improvement. You can never be satisfied with the method used, because there always can be improvements. Certainly, the competition is improving, so it is very necessary to strive to keep ahead of the game.

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Working smarter, not harder : Some companies have tried to improve by making employees work harder. This may be counter-productive, especially if the process itself is flawed. For example, trying to increase worker output on a defective machine may result in more defective parts.

Worker suggestions: Workers are often a source of continuous improvements. They can provide suggestions on how to improve a process and eliminate waste or unnecessary work.

Quality methods: There are also many quality methods, such as just-in-time production, variability reduction, and poka-yoke that can improve processes and reduce waste.

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2. GET QUALITY GOODS FROM YOUR SUPPLIERS

In any business or job situation, your prime goals to satisfy your customer with quality goods and services. But in order to effectively satisfy your customer, it is essential that your suppliers also provide you with quality parts and services. This includes both your internal and external suppliers.

1.1 A Need for Quality Goods

This need is for quality supplies are obvious. If you get shoddy goods, items out of spec, unreliable parts, and/or late delivery, it is very difficult for you to deliver quality products yourself. Likewise, if your workers are inefficient, if the repair service is unreliable, or if you are getting low quality performance from those who provide you service, you are hindered from successfully satisfying your customer.

1.2 How Do You Get Quality?

Now, the question is: "How can you make sure that you will get the quality performance you need from your suppliers?"

1.2.1 Old method was to play tough

A method that has been used for years by many American companies is what they call "playing hard ball" with their suppliers. This includes using threats to influence their vendors, micro-managing the contract, or playing one supplier against the other.

These companies have also dealt the same way with their workers. Threats of layoffs would often keep workers in line. Brow-beating was often effective in the short run. An environment of distrust was always there in the workplace.

Other companies have simply accepted poor quality, getting what they wanted through re-work. They felt they were lucky to get anything close to specification from the supplier. Surprisingly, a large number of organizations still use these outdated methods.

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1.2.2 New method uses TQM

With the advent of the Total Quality Management (TQM) philosophy of doing business, there are much better ways to assure quality performance from your suppliers. The new way of thinking is to establish an atmosphere of trust, teamwork, and cooperation.

In other words, you must establish a partnership with your suppliers, such that it is in the best interest of both of you that the other succeeds. Working together as partners is the way to assure you will get the quality products and extra service you want and need in your business.

1.3 Steps to Achieve Goal

From studying and observing what is working in various companies and organizations that have established forms of partnerships with their external suppliers, as well as their employees, I have synthesized those examples into a strategy or continuous process consisting of three steps:

1. Work Together to Focus Understanding, 2. Share Motivation for Quality Goods, and 3. Help Each Other to Do a Good Job.

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3. INSPECTING FOR QUALITY

Whenever work is done or a product or part is made, it should be inspected to see that it fulfills the requirements and specifications. This is certainly a wise business practice. Some companies accept a certain failure rate, while others try to correct the problems they see from their inspection. Inspecting and then correcting will save company money.

What is wrong with standard inspection methods? How is failure information gathered? How can workers inspect for quality?

WHAT IS WRONG WITH STANDARD INSPECTION METHODS?

The most common type of inspection that has been done for years on the assembly lines involves sorting the defective items from the acceptable product. This method is sometimes referred to as "creating quality by inspection" and is not considered an effective quality management approach.

Production line inspection

For example, at the end of a production line the inspector gives final approval whether or not parts are good. The rejects are put into scrap or are re-worked. This assures only quality material reaches the next stage, but it does not address the cause of the failed parts nor does it correct that problem.

Office work inspection

In another situation, office workers may complete reports only to have their manager reject many of them as unacceptable. Those reports must be re-done until acceptable. Again, the reason for the failures is not addressed, and the rejection rate remains constant.

HOW IS FAILURE INFORMATION GATHERED?

A more effective method to inspect consists of gathering information and using data gained from inspection to control the process and prevent future defects. Statistical Process Control (SPC) is a type of this type of inspection.

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Inspections at intermediate stages

Since work-in-process undergoes many operating steps as it is moved through a manufacturing facility, inspections are often conducted at intermediate stages in the process. The inspections give statistical information necessary to determine the cause of the quality problem, so that it can be prevented in the future. SPC does not aggressively seek to eliminate defects and in some cases changes may be implemented too slowly to be fully effective.

White collar examples

One example in the office is that the boss may inspect a report at various stages, making corrections. He may then see that perhaps there was a communication problem in stating the requirements that may be rectified.

In the office, the engineering manager may monitor the designs of his engineers, making corrections along the way. The engineers learn from his changes and the final design is relatively free of errors.

This method of making inspections at intermediate stages is certainly better than waiting until the product in completed to inspect for acceptance or rejection.

HOW CAN WORKERS INSPECT FOR QUALITY?

One other inspection method is to have workers inspect the item from the prior operation before proceeding. In this way quality feedback can be given on a much timelier basis. Each operation performs both production and quality inspection.

By monitoring where most problems occur in a production line, a quality manager can pinpoint causes—whether it is a drunk worker or a defective piece of equipment.

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4. TECHNIQUES TO GET MORE BUSINESS

Satisfy Customers to Succeed

Business leaders wishing to succeed must satisfy their customers. This is a basic tenet of the Total Quality Management (TQM) philosophy of doing business, and it is also simply common sense.

A problem occurs in defining who is a customer. Some advocates of TQM promote the idea that everyone is your customer. That idea is incorrect. There is a difference between a customer, a user, and a supplier, and it is important to deal with each in an appropriate manner that will enhance your bottom line.

If you want to succeed in business or to improve your competitive position, you should work on satisfying your customers in the products and services you deliver. Seeking customer satisfaction is one of the great concepts of TQM (Total Quality Management).

YOUR CUSTOMER PAYS YOU MONEY

A customer in a business transaction is the person who pays money for the product or service. In a work situation, your customer is the person who either pays you money for a product or service, or who passes it on to you. For example, your boss at work is your customer, because he or she has control over your pay. This is differentiated from the customer, who is buying the company's product or service.

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You could possibly satisfy the customer and lose your job, because you didn't make your customer - your boss - happy.

There is essentially a chain of customers passing money along, from the customer to your customer to you. The book "Building a Chain of Customers" by Richard J. Schonberger, The Free Press 1990, explains this concept.

YOUR SUPPLIER MUST KEEP YOU HAPPY

On the other hand, you are the customer of those who you pay (or effect earnings) to provide you with products and services. They should keep you happy or satisfied, but it is in your best interest to pay them well in order to get the service you desire.

A USER IS NOT A CUSTOMER

There is often a difference between the person who pays for a product and service and the person that ultimately uses the commodity.

Although the user should be made happy, the top priority goes to satisfying the customer - the person who pays the money.

The Total Quality Management System can be broken down into four basic systems, these are; systems for assuring consistency, conformance, improvement and methodologies. These systems work interactively with each other and with customers. Corrective actions, which result in continuous improvement, are at the center of all these systems. The circle encompassing these systems represents the fact that continuous improvement through corrective action in a never-ending pursuit of total customer satisfaction.

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TQM AT MOTOROLA

Like an Olympic athlete seeking to score better than determined world rivals, Motorola Inc. seeks sales victories in world markets for electronic components and equipment by improving the quality of its own performance. For Motorola, quality improvement leading to total customer satisfaction is the key.

In 1981, Motorola launched an ambitious drive for a tenfold improvement in the quality of its products and services. Motorola succeeded. Now, the company has evidence that many of its products are the best in their class. Looking ahead, Motorola intends to top its achievements - further gains in quality for 1989, yet another leap in 1991, and near perfection a year later. The company's quality goal is simply stated: "Zero defects in everything we do."

Motorola's managers literally carry with them the corporate objective of "total customer satisfaction." It's on a printed card in their pockets. Corporate officials and business managers wear pagers to make themselves available to customers, and they regularly visit customers' businesses to find out their likes and dislikes about Motorola products and services. The information, along with data gathered through an extensive network of customer surveys, complaint hotlines, field audits, and other customer feedback measures, guides planning for quality improvement and product development.

MOTOROLA: A SNAPSHOT

Employing 99,000 workers at 53 major facilities worldwide and based in Schaumburg, Illinois, 60-year old Motorola is an integrated company that produces an array of products, distributing most through direct sales and service operations. Communication systems -- primarily two-way radios and pagers -- account for 36 percent of annual sales, and semiconductors account for 32 percent. The remaining revenues come from sales of cellular telephones and equipment for defense and aerospace applications, data communications, information processing, and automotive and industrial uses. Sales in 1987 totalled $6.7 billion.

Responding to the rapid rise of Japanese firms in world markets for electronics, Motorola's management began an almost evangelical crusade for quality improvement; addressing it as a company issue and, through speeches and full-page ads in major publications, as a national issue.

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The company's most persuasive messages, however, are the results of its quest for quality. Most products have increased their market share, here and abroad. In Japan, for example, Motorola pagers, supplied to Nippon Telegraph and Telephone, were introduced in 1982 and now claim a major share of that market. Over the past two years alone, Motorola has received nearly 50 quality awards and certified supplier citations, tops among the 600 electronics firms responding to a survey published in March 1987.

KEY QUALITY INITIATIVES

To accomplish its quality and total customer satisfaction goals, Motorola concentrates on several key operational initiatives. At the top of the list is "Six Sigma Quality," a statistical measure of variation from a desired result. In concrete terms, Six Sigma translates into a target of no more than 3.4 defects per million products, customer services included. At the manufacturing end, this requires designs that accommodate reasonable variation in component parts but production processes that yield consistently uniform final products. Motorola employees record the defects found in every function of the business, and statistical technologies are increasingly made a part of each and every employee's job.

Reducing the "total cycle time" -- the time from when a Motorola customer places an order until it is delivered -- is another vital part of the company's quality initiatives. In fact, in the case of new products, Motorola's cycle-time reduction is even more ambitious; the clock starts ticking the moment the product is conceived. This calls for an examination of the total system, including design, manufacturing, marketing, and administration.

Motorola management demonstrates its quality leadership in a variety of ways, including top-level meetings to review quality programs with results passed on through the organization. But all levels of the company are involved. Nonexecutive employees contribute directly through Motorola's Participative Management Program (PMP). Composed of employees who work in the same area or are assigned to achieve a specific aim, PMP teams meet often to assess progress toward meeting quality goals, identify new initiatives, and work on problems. To reward high-quality work, savings that stem from team

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recommendations are shared. PMP bonuses over the past four years have averaged about 3 percent of Motorola's payroll.

To ensure that employees have the skills necessary to achieve company objectives, Motorola has set up its own training center and spent in excess of $170 million on worker education between 1983 and 1987. About 40 percent of the worker training the company provided last year was devoted to quality matters, ranging from general principles of quality improvement to designing for manufacturability.

Motorola knows what levels of quality its products must achieve to top its competitors. Each of the firm's six major groups and sectors have "benchmarking" programs that analyze all aspects of a competitor's products to assess their manufacturability, reliability, manufacturing cost, and performance. Motorola has measured the products of some 125 companies against its own standards, verifying that many Motorola products rank as best in their class.

Conclusion

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TQM encourages participation amongst shop floor workers and managers. There is no single theoretical formalization of total quality, but Deming, Juran and Ishikawa provide the core assumptions, as a "...discipline and philosophy of management which institutionalizes planned and continuous... improvement ... and assumes that quality is the outcome of all activities that take place within an organization; that all functions and all employees have to participate in the improvement process; that organizations need both quality systems and a quality culture.".

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Bibliography

Reference Books:

Production & Operation Management - by Adam & Ebert Production & Operations Management - by Buffa

Internet:

www.managementhelp.org/quality/tqm/tqm.htm www.crossroad.to/Quotes/TQM.html www.michaellorenzen.com/eric/tqm.html www.school-for-champions.com/tqm.htm www.skyenet.net/~leg/tqm.htm

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