Introduction to Quality

TQM concept evolved in Japan - World war IIEdward 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, Xerox.Mfu Companies - Industrial Revolution.

Quality movement in India

Quality movement in India

No competition - Public sector, one or two playersTop Management - sold, cost, awareness & interest level "let's stay home, let's copy or imitate, and let's compete

on price".

1991 -

Significance of LPG – World

L - Liberalization - Trade barriersRemoving license rajFreeing Economy From Government Control

350 %.............20%

P - Privatization - Reducing Government stakeG – Globalization (Integrating the economy of a country

with the world economy. WTO, Quota System)

“One world – One Market”(Single Market - Borderless World).

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1991 LPG era …competition, car, Marketing concept, customer is the God.

……………………….

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Introduction to TQM cont…Globalisation - Mindset change South Indian Companies - TVS,

Sundram Fasteners - China.Indian brands - global market

Pharma, Six sigma, Tata steelQuality awards - Deming Award

To succeed and to Survival ……

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“COMPETITION CAUSES PERFORMANCE”

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Benefits of Quality efforts

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

Total Quality Management

TQM is a Management Approach - originated -1950’s. Become more popular since early 1980’s. Description of the culture, attitude of the Organisation. Act of managing the whole organisation, 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 ?

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 ShewhartPioneer 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)

The term quality is perceived differently by different people.

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 by

customers, and other interested parties.

Quality Cont… Quality can be quantified as follows: Q =P / EWhere Q - Quality, P - Performance, E - Expectations.

Quality, therefore is Defined by the customers, A measure of achievement of customer satisfaction Safety, effective packaging, On - time delivery, Efficient technical service, caring for the customer’s feedback. Keeping one’s word Ensuring no defects, Utility to the society.

Quality is both a user oriented and a production oriented expression.

Quality Cont…

Excellence in everything.

Stakeholder Expectations Customers - Product QualityEmployees - Career / Work SatisfactionOwners - Investment Performance Vendors - Continuing Business Opportunity.

Evolution of Quality

1920’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.

New and old culture of QualityQ Elements Prior to TQM With TQM

Definition Product oriented Customer

Decisions Short term Long term

Responsibility Quality control Every one

Problem solving Managers Teams

Procurement Price Life cycle cost & partnership

Emphasis Detection Prevention

Manager’s Role Plan, assign Delegate, coach, facilitate and mentor

Requirements of - A good Quality process

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 capabilityUsing 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

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

Principles of TQM

Management commitmentCustomer FocusContinuous ImprovementEmployee Empowerment

Edwards Deming hadproposed fourteen principles

towards quality achievement.These principles are summarized

as 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

Barriers to TQM implementation

Lack of Management commitmentInability to change Organisation cultureImproper planningInadequate use of empowermentLack of continuous training and educationPaying inadequate attention to internal

and external customers.Failure to continually improve.

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 objectivesQuality Assurance- providing confidence that quality

requirements will be fulfilledQuality 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..

Strategic Planning to functional planning

Quality Audit

Quality Cost

Quality CostCost incurred by the firm because of producing poor

quality products.

Cost associated with non achievement of product as defined by the requirements.

Any cost associated with correcting failure or reworking the finished product or wastage go into Quality costs.

A reduction in Quality cost will lead to increased profit.

Quality CostAppraisal cost

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

Product Inspection and TestingMaintaining accuracy of test equipment.

Prevention Cost

Quality Planning & Inspection, New Products Review, Product Process Design

Process Control, Quality training, TQMFailure cost Internal Failure Cost External Failure cost.

Quality Cost cont..Internal Failure Costs

Scrap, Rework, Retest, Failure AnalysisDown time, Yield Losses.

External Failure costComplaint Adjustment, Returned ProductWarranty Charges, Liability Costs, Indirect

Costs.

Benchmarking

BenchmarkingConcept of Benchmarking taken the new meaning

since 1970s.Companies compared the performance CY… LY

Parameters like cost, profit, sales volume, expenses, etc…..Target

“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………

BenchmarkingSystematic 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.

BM is a tool generally used for continuous improvement. It utilizes a systematic process for improving the performance of product/service, process or an organization as a whole by continuously identifying, understanding, and adapting best practices that are found either inside or outside the organization.

BenchmarkingReasons to Benchmark:

Helps to set new goals and adopts the best practices Helps to develop the strengths and reduce the weakness Benchmarking is time and cost efficient

Types of Benchmarking:

a)Internal b)Competitivec)Functional or process d)Generic benchmarking

Camp - 1989

Re-engineeringReverse engineering

…Product Benchmarking (Reverse engineering)

Benchmarking process

Benchmarking process:a) Identify what function is to be benchmarked

(Critical Success Factor - 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 collected

Benchmarking – Process…

d) Analyse the data to arrive at the current performance gap.

e) Communicate the benchmark findings to the employees

f) Establish functional goals to achieve objectivesg) Develop action plan, implement and monitor the

progress.

Examples: Toyota, ITC, Amul, Arvind, Gillette, Intel, Fevicol, Mumbai Dabbawallahs, Sachet. Tata Indica – “More car per car”

Benefits of Benchmarking:

Company will become competitiveCustomer requirements can be taken care ofHelps in continuous improvementUnderstanding the best industry practices

Case Study - Tata Indica

December 1998 – created history – within seven days of its launch, an astonishing 1,15,000 orders were booked by the company.

It was positioned as a ‘More car per car’ Maruti 800 as an inadequate car. Prospects were car owners who had a 3-5 year old Maruti 800.

Indian Railways

Xerox – Case analysis

Xerox - Case analysis Xerox 914 - First plain copier - 1959….New industry During 1960’s high growth….selling all it could produce CA.. STRONG PATENT, GROWING MARKET, LITTLE COMPETITION

No focus on customer

During 1970’s IBM, Kodak ,,,, several Japanese companies High Q Low Volume copiers ……..ignored Federal Trade commission accused Xerox ..illegally monopolizing the

copier business 1700 patents to competitors. 1980 market share fell down by less than 50 per cent.

Company would not survive

Xerox –Case analysis Rework, scrap, excessive inspection, lost business costing

more than 20 per cent of revenue, Comparing with competition

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

Team……Quality strategy for Xerox Benchmarked more than 200 process

Customer satisfaction was important

Malcolm Baldrige National Quality award 1989 David Quality is

A Race without Finish Line………

Theodore Roosevelt – (26th President of the United States, 1901 –1909)

Continuous Process Improvement