TOTAL QUALITY MANAGEMENTTOTAL QUALITY MANAGEMENT

“ “MUST KNOW” CONCEPTS FOR ENGINEERSMUST KNOW” CONCEPTS FOR ENGINEERS

Sequence of presentationSequence of presentation IntroductionIntroduction Three Quality GurusThree Quality Gurus Commonality of Themes of Quality GurusCommonality of Themes of Quality Gurus DIFINITION OF QUALITY Five Approaches of Defining QualityFive Approaches of Defining Quality System Approach for TQMSystem Approach for TQM Triangle of wisdomTriangle of wisdom TQO HRMTQO HRM Customer Satisfaction Customer Satisfaction Indicators for Customer SatisfactionIndicators for Customer Satisfaction Cost of Quality Cost of Quality Benefits of TQMBenefits of TQM ConclusionConclusion

INTRODUCTION TO TQMINTRODUCTION TO TQM

What is TQM?What is TQM?TQM is the integration of all functions and processes within an TQM is the integration of all functions and processes within an

organization in order to achieve organization in order to achieve continuous improvement continuous improvement of the of the quality of goods and services. The quality of goods and services. The goal is customer satisfaction. goal is customer satisfaction.

“ “ No doubt , humans are always deficient”No doubt , humans are always deficient”(Al-Quran)(Al-Quran)

The Three Quality GurusThe Three Quality Gurus

Deming:Deming: the best known of the “early” pioneers, is the best known of the “early” pioneers, is credited with popularizing quality control in Japan in early credited with popularizing quality control in Japan in early 1950s.Today, he is regarded as a national hero in that 1950s.Today, he is regarded as a national hero in that country and is the father of the world famous Deming prize country and is the father of the world famous Deming prize for quality.for quality.

JURANJURAN

Juran, like Deming was invited to Japan in 1954 by the Juran, like Deming was invited to Japan in 1954 by the union of Japanese Scientists and engineers.union of Japanese Scientists and engineers.

Juran defines quality as fitness for use in terms of design, Juran defines quality as fitness for use in terms of design, conformance, availability, safety and field use. He focuses conformance, availability, safety and field use. He focuses on top-down management and technical methods rather than on top-down management and technical methods rather than worker pride and satisfaction. worker pride and satisfaction.

Philip CrosbyPhilip Crosby: : author of popular book Quality author of popular book Quality is Free. His absolutes of quality are:is Free. His absolutes of quality are:

Quality is Quality is defineddefined as conformance to requirements, not as conformance to requirements, not “goodness”“goodness”

The The systemsystem for achieving quality is prevention, not for achieving quality is prevention, not appraisal.appraisal.

The performance The performance standardstandard is zero defects, not “that’s close is zero defects, not “that’s close enough”enough”

The The measurementmeasurement of quality is the price of non- of quality is the price of non-conformance, not indexes.conformance, not indexes.

Commonality of Themes of Quality GurusCommonality of Themes of Quality Gurus

Inspection is never the answer to quality improvement, nor is Inspection is never the answer to quality improvement, nor is “policing”.“policing”.

Involvement of leadership and top management is essential to Involvement of leadership and top management is essential to the necessary culture of commitment to quality.the necessary culture of commitment to quality.

A program for quality requires organization-wide efforts and A program for quality requires organization-wide efforts and long term commitment, accompanied by the necessary long term commitment, accompanied by the necessary investment in training.investment in training.

Quality is first and schedules are second.Quality is first and schedules are second.

DIFINITION OF QUALITYDIFINITION OF QUALITY

The concept and vocabulary of quality are elusive. Different The concept and vocabulary of quality are elusive. Different people interpret quality differently. Few can define quality people interpret quality differently. Few can define quality in measurable terms that can be proved operationalized. in measurable terms that can be proved operationalized. When asked what differentiates their product or service;When asked what differentiates their product or service;

The The bankerbanker will answer” service” will answer” service” The The healthcarehealthcare worker will answer “quality health care” worker will answer “quality health care” The The hotel employee hotel employee will answer “customer satisfaction”will answer “customer satisfaction” The The manufacturermanufacturer will simply answer “quality product” will simply answer “quality product”

Five Approaches of Defining QualityFive Approaches of Defining Quality

Harvard professor David Garvin, in his book Harvard professor David Garvin, in his book Managing QualityManaging Quality summarized five principal summarized five principal approaches to define quality. approaches to define quality.

TranscendentTranscendent Product basedProduct based User basedUser based Manufacturing basedManufacturing based Value basedValue based

Transcendental viewTranscendental view

Those who hold the transcendental view would say “I can’t define Those who hold the transcendental view would say “I can’t define it, but I know it when I see it”it, but I know it when I see it”

Advertisers are fond of promoting products in these terms.Advertisers are fond of promoting products in these terms. “ “ Where shopping is a pleasure” (supermarket). “We love to fly Where shopping is a pleasure” (supermarket). “We love to fly

and it shows" (airline).and it shows" (airline).Television and print media are awash with such indefinable claims Television and print media are awash with such indefinable claims and therein lies the problem:and therein lies the problem:

Quality is difficult to define or to operationalize. It thus becomes Quality is difficult to define or to operationalize. It thus becomes elusive when using the approach as basis for competitive elusive when using the approach as basis for competitive advantage. Moreover, the functions of design, production and advantage. Moreover, the functions of design, production and service may find it difficult to use the definition as a basis for service may find it difficult to use the definition as a basis for quality management.quality management.

PRODUCT BASEDPRODUCT BASED

Quality is viewed as a quantifiable or measurable Quality is viewed as a quantifiable or measurable characteristic or attribute. For example durability or characteristic or attribute. For example durability or reliability can be measured and the engineer can design to reliability can be measured and the engineer can design to that benchmark. that benchmark.

Quality is determined objectively.Quality is determined objectively. Although this approach has many benefits, it has limitation Although this approach has many benefits, it has limitation

as well. Where quality is based on individual taste or as well. Where quality is based on individual taste or preference, the benchmark for measurement may be preference, the benchmark for measurement may be misleading.misleading.

USER BASEDUSER BASED

It It is based on idea that quality is an individual matter and products is based on idea that quality is an individual matter and products that best satisfy their preferences are those with the highest that best satisfy their preferences are those with the highest quality. This is rational approach but leads to two problems;quality. This is rational approach but leads to two problems;

Consumer preference vary widely and it is difficult to aggregate Consumer preference vary widely and it is difficult to aggregate these preferences into products with wide appeal. This leads to these preferences into products with wide appeal. This leads to the choice between a niche strategy or a market aggregation the choice between a niche strategy or a market aggregation approach which tries to identify those product attributes that approach which tries to identify those product attributes that meet the needs of the largest number of consumers.meet the needs of the largest number of consumers.

Another problem concerns the answer to the question “Are Another problem concerns the answer to the question “Are quality and customer satisfaction the same?” the answer is quality and customer satisfaction the same?” the answer is probably not. One may admit that a Lincoln continental has probably not. One may admit that a Lincoln continental has many quality attribute, but satisfaction may be better achieved many quality attribute, but satisfaction may be better achieved with an Escort.with an Escort.

MANUFACTURING BASEDMANUFACTURING BASED

Manufacturing-based definitions are concerned primarily Manufacturing-based definitions are concerned primarily with engineering and manufacturing practices and use the with engineering and manufacturing practices and use the universal definition of “conformance to requirements”. universal definition of “conformance to requirements”. Requirements or specifications are established by design Requirements or specifications are established by design and any deviation implies a reduction in quality. The and any deviation implies a reduction in quality. The concept applies to services as well as product. Excellence in concept applies to services as well as product. Excellence in quality is not necessarily in the eye of the beholder but quality is not necessarily in the eye of the beholder but rather in the standards set by the organization.rather in the standards set by the organization.

This approach has the serious weakness. The consumer’s This approach has the serious weakness. The consumer’s perception of quality is equated with conformance and perception of quality is equated with conformance and hence is internally focused.hence is internally focused.

Value BasedValue Based

It is defined in term of costs and prices as well as It is defined in term of costs and prices as well as number of other attributes. Thus, the consumer’s number of other attributes. Thus, the consumer’s purchased decision is based on quality at an purchased decision is based on quality at an acceptable price. This approach is reflected in the acceptable price. This approach is reflected in the popular popular Consumer Reports Consumer Reports magazine which ranks magazine which ranks products and services based on two criteria: Quality products and services based on two criteria: Quality and Value.and Value.

The highest quality is not usually the best value. The highest quality is not usually the best value. That designation is assigned to the “best- buy” That designation is assigned to the “best- buy” product or serviceproduct or service..

MANAGEMENT MANAGEMENT OF PROCESS OF PROCESS

QUALITYQUALITY

HUMAN HUMAN RESOURCE RESOURCE

DEVELOPMENT DEVELOPMENT AND AND

MANAGEMENTMANAGEMENTSTRATEGIC STRATEGIC

QUALITY QUALITY PLANNINGPLANNING

INFORMATION INFORMATION AND ANALYSISAND ANALYSIS

CUSTOMER FOCUS AND

SATISFACTION

QUALITY AND

OPERATIONAL RESULTS

SENIOREXECUTIVE

LEADERSHIP

System Approach for TQM

Driver

System

TOWTOWTriangle of wisdomTriangle of wisdom

LM

DM KM

Characteristics of TQM LeaderCharacteristics of TQM Leader

Visible, Committed and KnowledgeableVisible, Committed and Knowledgeable A Missionary ZealA Missionary Zeal Aggressive TargetsAggressive Targets Strong DriversStrong Drivers Communication of ValuesCommunication of Values OrganizationOrganization Customers ContactCustomers Contact

TQO HRMTQO HRM

Five Principles are:Five Principles are: QualityQuality Work Work the First Timethe First Time FocusFocus on the Customer on the Customer Strategic Strategic Holistic Approach Holistic Approach to Improvementto Improvement CICI as a Way of Life as a Way of Life MutualMutual Respect and Teamwork Respect and Teamwork

Customer SatisfactionCustomer Satisfaction Three Part SystemThree Part System

Human Resource Management

Customer Expectations

Company Operations(Processes)

Customer Satisfaction

Indicators for Customer SatisfactionIndicators for Customer Satisfaction

Frontline empowermentFrontline empowerment Excellent hiring, training, attitude and morale for front line Excellent hiring, training, attitude and morale for front line

employeesemployees Proactive customer service systemProactive customer service system Proactive management of relationship with customers Proactive management of relationship with customers Use of all listening postsUse of all listening posts Quality requirements of market segmentQuality requirements of market segment Commitment to customersCommitment to customers Understanding customer requirementsUnderstanding customer requirements Service standards meeting customers requirementsService standards meeting customers requirements

Cost of QualityCost of Quality Three Views of quality Costs Three Views of quality Costs

Higher quality means higher cost.Higher quality means higher cost. Quality attributes such as performance and features cost more in Quality attributes such as performance and features cost more in

terms of labor, material, design and other costly resources.terms of labor, material, design and other costly resources. The additional benefits from improved quality do not compensate The additional benefits from improved quality do not compensate

for additional expense.for additional expense.The cost of improving quality is less than the resulting savings.The cost of improving quality is less than the resulting savings.

The saving result from less rework, scrap and other direct expenses The saving result from less rework, scrap and other direct expenses related defects.related defects.

This is said to account for the focus on continuous improvement of This is said to account for the focus on continuous improvement of processes in Japanese firms. processes in Japanese firms.

Three Views of quality CostsThree Views of quality Costs

Quality costs are those incurred in excess of those Quality costs are those incurred in excess of those that would have been incurred if the product were that would have been incurred if the product were built or the service performed exactly right the first built or the service performed exactly right the first time.time.

This view is held by adherents of TQM philosophy.This view is held by adherents of TQM philosophy. Costs include not only those that are direct, but also Costs include not only those that are direct, but also

those resulting from lost customers, lost market share those resulting from lost customers, lost market share and the many hidden costs and foregone opportunities and the many hidden costs and foregone opportunities not identified by modern cost accounting systems.not identified by modern cost accounting systems.

Quality CostsQuality Costs

COST OF COST OF QUALITY QUALITY IS THE COST OF IS THE COST OF NON QUALITYNON QUALITY

1: 10:100 Rule1: 10:100 Rule““A stitch in time saves nine”A stitch in time saves nine”

Types of Quality CostsTypes of Quality CostsThe cost of quality is generally classified into four The cost of quality is generally classified into four categoriescategories

1.1. Cost of PreventionCost of Prevention2.2. Cost of AppraisalCost of Appraisal3.3. Cost of Internal FailureCost of Internal Failure4.4. Cost of External FailureCost of External Failure

Quality CostsQuality Costs

Cost of PreventionCost of Prevention Prevention costs include those activities which remove and Prevention costs include those activities which remove and

prevent defects from occurring in the production process.prevent defects from occurring in the production process. Included are such activities as quality planning, production Included are such activities as quality planning, production

reviews, training, and engineering analysis, which are reviews, training, and engineering analysis, which are incurred to ensure that poor quality is not produced. incurred to ensure that poor quality is not produced. AppraisalAppraisal

Those costs incurred to identify poor quality products after Those costs incurred to identify poor quality products after they occur but before shipment to customers. e.g. Inspection they occur but before shipment to customers. e.g. Inspection activityactivity..

Quality CostsQuality Costs

Internal FailureInternal Failure Those incurred during the production process.Those incurred during the production process. Include such items as machine downtime, poor quality Include such items as machine downtime, poor quality

materials, scrap, and rework.materials, scrap, and rework.External FailureExternal Failure Those incurred after the product is shipped.Those incurred after the product is shipped. External failure costs include returns and allowances, External failure costs include returns and allowances,

warranty costs, and hidden costs of customer dissatisfaction warranty costs, and hidden costs of customer dissatisfaction and lost market shareand lost market share..

Benefits of TQMBenefits of TQM

Greater customer loyaltyGreater customer loyalty Market share improvementMarket share improvement Higher stock pricesHigher stock prices Reduced service callsReduced service calls Higher pricesHigher prices Greater productivityGreater productivity

ConclusionConclusion

Remember the earth revolves around the Remember the earth revolves around the CUSTOMER. CUSTOMER. Quality begets customers and Quality begets customers and customers beget quality. Let us all have action customers beget quality. Let us all have action plans to support quality, this will make the world plans to support quality, this will make the world happy and earn us the blessing of God Almighty.happy and earn us the blessing of God Almighty.

““Actions are direct reflection of one’s Actions are direct reflection of one’s intentions” (Al-Quran)intentions” (Al-Quran)