Total Quality Management

Submitted by,

R Madhu Mohan

Asst Professor / MBA

Brief Introduction to TQM Total quality management is a management’s approach towards the quality. It can be in regard to products, customer satisfaction and employees satisfaction. Continuously improving the quality of various products and services. TQM works on one belief that mistakes can be avoided and defects can be

prevented. The aim of TQM is to reduce variations in quality of the products as well as in the

working of whole organization. TQM is now a days called as TPM (total productivity management) and an

organization needs to consider ABCD for the effective application

Where ABCD stands for,

A stands for accident cure.

B stands for breakdown.

C stands for cost reduction.

D stands for damage.

TQM works effectively if the organization works in a family manner. Here management is like a father, employees are the children and manager is like mother and as father and mother takes care for their home collectively the same way , management and managers are supposed to take care for their organization with the help of tool called TQM.

Total quality management is called Total because entire organization is involved, Quality means degree of excellence. And Management in literal sense means getting things done by others.

The concept of TQM talks about adopting the new policy, creating quality products, eliminate defects, estimate for breakdown, accidents etc

Hence TQM should be purpose driven so first the whole organization should be willing to accept the change then only TQM can actually affect the organization in a positive way.

Total Quality ManagementTQM is an enhancement to the traditional way of doing business.  Total - Made up of the whole Quality - Degree of Excellence of a Product or Service provides Management - Art of handling, controlling, directing etc.

  TQM is the application of quantitative methods and human resources to improve all the processes within an organization and exceed CUSTOMER NEEDS now and in the future.

 

DEFINING QUALITY :

Quality can be quantified as follows Q = P / E

 

where,

Q = Quality

P= Performance

E= Expectation

UNIT I

DIMENSIONS OF QUALITY : ------------------------------------------------------------------------------------------------------- Dimension Meaning and Example--------------------------------------------------------------------------------------------- ---------- Performance Primary product characteristics, such as the

brightness of the picture. Features Secondary characteristics, added features, such as

remote control. Conformance Meeting specifications or industry standards,

workmanship Reliability Consistency of performance over time, average time

of the unit to fail. Durability Usage life of a product, includes repair Service Resolution of problems and complaints, ease of repair Response Human – to – human interface, such as the courtesy

of the dealer. Aesthetics Sensory characteristics, such as exterior finish Reputation Past performance and other intangibles, such as

being ranked first.--------------------------------------------------------------------------------------------- ---------------------------------

QUALITY PLANNING The following are the important steps for quality planning.

Establishing quality goals. Identifying customers. Discovering customer needs. Developing product features. Developing process features. Establishing process controls and transferring to operations.

IMPORTANT POINTS TO BE NOTED WHILE QUALITY PLANNING :

  Business, having larger market share and better quality, earn

returns much higher than their competitors. Quality and Market share each has a strong separate

relationship to profitably. Planning for product quality must be based on meeting

customer needs, not just meeting product specifications. For same products. We need to plan for perfection. For other

products, we need to plan for value.

Service Features

Performance

Cost

BASIC CONCEPTS OF TQM: Top management commitment Focus on the customer – Both internal and external Effective involvement and utilization of entire work force Continuous improvement Treating suppliers as partners Establishing performance measures for the processes

DEFINITION: TQM is the management approach of an organization, centered on

quality, based on me participation of all its members and aiming at long-term success through

customer satisfaction. and benefits to all members of me organization and to society.- ISO

TQM is an integrated organizational approach in delighting customers (both internal and external) by meeting their expectations on a continuous basis through every one involved with the organization working on continuous improvement in all products, services, and processes along with proper problem solving methodology - INDIAN STATISTICAL INSTITUTE ( ISI )

TQM Framework

BARRIERS TO TQM IMPLEMENTATION

Lack of management commitmentLack of faith in and support to TQM activities among management

personnelFailure to appreciate TQM as a cultural revolution. In other words,

inability to change organizational cultureMisunderstanding about the concept of TQM Improper planningLack of employees commitmentLack of effective communicationLack of continuous training and educationLack of interest or incompetence of leaders Ineffective measurement techniques and lack of access to data

and resultsNon-application of proper tools and techniques Inadequate use of empowerment and team work

Tangible BenefitsIntangible Benefits

Improved product quality Improved productivity Reduced quality costs Increased market and customers Increased profitability Reduced employee grievances

Improved employee participation Improved team work Improved working relationships Improved customer satisfaction Improved communication Enhancement of job interest Enhanced problem solving capacity Better company image

Benefits of TQM

Deming’s PhilosophyW. Edwards Deming Ph.D.: 14 points of theory of

management to improve quality, productivity and competitive position

- 11 -

UNIT IILEADERSHIPThe process of influencing others towards the accomplishment

of goals. He triggers tile will to do, shows the direction and guide the group members towards the accomplishment of goals.

CHARACTERISTICS OF QUALITY LEADERSCustomers first Value people Build supplier partnership Empower people Strive for excellence Demonstrate involvement / commitment Explain & deploy policy Improve communication Promote teamwork Benchmark continuously Establish system Encourage collaboration

STRATEGIC PLANNING It sets the long term direction of the organization in which it wants to

proceed in future. Can be defined "As the process of deciding on objectives of the organization, on changes on this objective, on the resource used to obtain these objectives and on the policies that are to govern the acquisition use and disposition of these resources"

QUALITY STATEMENTS

VISION STATEMENT: It is a short declaration of what an organization aspires to be tomorrow. It is an ideal state which may never be achieved.

MISSION STATEMENT: Describes the function of the organization. It provides the clear statement of purpose for the employees, customers and suppliers. 

QUALITY POLICY STATEMENT: It is a guide for everyone in the organization as to how they provide products and services to the customer. Written by the CEO feedback from workforce and approved by quality council. 

Customer satisfaction: The Customer is the King - Emphasized by Today's Buyers Market.

TQM's Purpose is meeting or exceeding customer expectations, so that the customers are delighted. The customer satisfactions must be the primary goal of any organization.

CUSTOMER SATISFACTION MODEL

Teboul’s Model of customer satisfaction as shown in figure

From the above diagram it is understood that the company should strive for increasing the intersection portion i.e. Customer Satisfaction.

TYPES OF CUSTOMERS

Internal Customer: The customer inside the company are called internal customers

External Customers: An external customer is the one who used the product or service or who purchase the products or service or who influences the sale of the product or service.

 THE CUSTOMERS ARE  The most important people in the business Not dependent on the organization, but the organization depends on

them. Not an interruption to work but are the purpose of it. Doing a favor when they seek business and not vice-versa. A part of business, not outsiders and they are life blood of the

business People who come with their needs and jobs Deserve the most courteous and attentive treatment.

CUSTOMER SUPPLY CHAIN

CUSTOMER FEEDBACK OR CUSTOMER COMPLAINT IS REQUIRED

To discover customer dissatisfaction To identify customer’s needs To discover relative priorities of quality To compare performance with the competition To determine opportunities, for improvementSTEPS TO SOLVE CUSTOMER COMPLAINTS  Complaints can be collected from all sources (letters, phone -calls,

meetings and verb inputs) Develop procedures for complaint resolution, that include empowering

front-line personnel. Work to identify process and material variations and then eliminate the

root cause. Establish customer satisfaction measures and constantly monitor them. Communicate complaint information, as well as the result of all

investigation solution, to all people in the organization. . Provide a monthly complaint report to the quality council for their

evaluation and needed, the assignment of process improvement teams.

CUSTOMER RETENTIONMore powerful and effective than customer satisfaction It is the process of retaining the existing customer Customer care can be defined as every activity which occurs

within the organization that ensures that the customer is not only satisfied but also retained.

 SIGNIFICANCE OF CUSTOMER RETENTION 60% of organizations future revenue will come from exiting

customers 2% increase in customer retention has 10% decrease in

operating cost. 96% of unhappy customers do not complain but 3 times likely to

convey to other customers about their bad experience. 91% of unhappy customers never purchase goods and services

from you. It costs 5 times more to attract the customer than retaining the

existing customer. Customer retention creates customer loyalty and moves

customer satisfaction to a next level called customer delight.

EMPLOYEE INVOLVEMENT 

It is the total involvement from every person at all levels in the organization

ASPECTS OF EMPLOYEE INVOLVEMENTEmployee motivationEmployee EmpowermentTeams and Team workRecognition and Reward SchemesPerformance Appraisal 1.EMPLOYEE MOTIVATION

It is the process of stimulating people or attempting to influence other to do your will or accomplish desire goals through the possibility of reward

Improves employee involvementReduces absenteeism and increases turn overPromotes job satisfaction

PDSA CYCLE It is also called as Deming Cycle or Deming Wheel.

Developed by Walter A. Shewart and popularized by Edward Deming

PLAN Identify the problem, plan and opportunities Observe and analyze Isolate the real causes Determine corrective actionsDO Prepare Apply Check applicationSTUDY / CHECK Check results Compare with goalsACT Standardize and consolidate Prepare next stage of planning

BENEFITS OF PDSA CYCLE Daily routine management for the individual and or the team Problem solving process Project management Continuous development Vendor development Human resource management New product development Process trials

5S HOUSE KEEPING

This is a house keeping technique used to establish and maintain a productive and quality environment in an organization. This method is invented in Japan which will give safer, more efficient and more productive operation results in boosting of morale of workers, job involvement and satisfaction and ownership of their responsibilities.

JAPANESE TERM ENGLISH EQUIVALENT MEANING

SEIRI Tidiness

Cleaning – Throw away all rubbish unrelated materials in the work place

SEITON Orderliness

Arranging – Set everything in proper place for quick retrieval and storage

SEISO Cleanliness

Sweeping – Clean the work place, every thing with out fail

SEIKETSU Standardization

Maintaining Cleanliness – Standardizing the way of maintaining cleanliness

SHISUKE Discipline

Self Discipline – Practice ‘5S’ daily. Make it a way or life. This also means commitment

KAIZEN Kaizen is a Japanese word for the philosophy that defines

management’s roles in continuously encouraging and implementing small improvements involving everyone.

It focuses on simplification by breaking down complex progress into their sub – processes and then improving them.

The Kaizen improvement focuses on the use of :Value – added and non – value work activities.Muda, which refers to the seven classes of waste – over-

production, delay, transportation, processing, inventory, wasted motion, and defective parts.

Principles of motion study and the use of cell technology.Principles of materials handling and use of one – piece flow.Documentation of standard operating procedures.The five S’s for workplace organization.Visual management. Just – in – time principles.Poka – Yoke.Team dynamics.

SUPPLIER PARTNERSHIPThe suppliers should be treated as partners to achieve the same quality

level as attained within the organization.The following forces need Supplier Partnership to improve quality, reduce

costs and increase market share.  Deming Philosophy (Deming’s 4th point) Just-in-time Continuous process improvement ISO 9000PARTNERINGPartnering is a relationship between two or more parties based upon trust,

dedication to common goals. The benefits of partnering are Improved quality Increased efficiency Lower cost Increased opportunity for innovation Continuous improvement The three key elements to a partnership relationship are Long term commitment Trust Shared Vision

UNIT IIIThe Seven Traditional tools of Quality

1)PARETO DIAGRAM2)FLOW DIAGRAM3)CAUSE AND EFFECT DIAGRAM

STEPS IN CONSTRUCTING A CAUSE & EFFECT DIAGRAM :

Define the problem or effect to be analyzed. Form the team to perform the analysis. Often the team will

uncover potential causes through brainstorming. Draw the effect box and the centerline. Specify the major potential cause categories and join them as

boxes connected to the centerline. Identify the possible causes and classify them into the categories

in step d. Create new categories, if necessary. Rank order the causes to identify those that seem most likely to

impact the problem. Take corrective action.

6) CONTROL CHARTS

A Sample Control Chart

7) SCATTER DIAGRAMIn scatter diagram, three types of co-relations exist. 

Positive correlation. Negative correlation. No correlation.

Bench Marking Benchmarking is a systematic method by which

organization can measure themselves against the best industry practices.

Essence of BM is the process of borrowing ideas and adapting them to gain competitive advantage.

Reasons for Bench MarkingTo achieve Business & Competitive Objectives.Goals & Objectives Based on External Environment.Cost Efficient.Continuous Improvement & New Development.

BENCHMARKING CONCEPTWhat is our performance level

What are others’ performance levels?How did they get there

CreativeAdaptation

Breakthrough Performance

32

Bench Marking ProcessPhases S.no Steps

Planning 1 Earmark what is to be Bench Marked ?

2 Identify the best competitor

3

Determine the data collection method and start collecting data

Analysis 4 Determine the current performance GAP

5 Project future performance levels

33

Bench Marking Process

Phases S.no Steps

Integration 6 Communicate bench mark findings and gain acceptance

7 Establish Functional Goals

Action

8 Develop Action Plans

9 Implement specific actions and monitor Progress

Communicate Data For analysis

Acceptance for Analysis

34

Bench Marking Process

Phases S.no Steps

Maturity 10 Recalibrate Benchmarks

11 Attain the Leadership position

12 Integrate Practice into the Process

35

Bench Marking Template

Benchmark

WHAT?

US

THEM

Output, Results, Success Factor

WHO /WHATis Best

How doWe do It ?

How Do They do it ?

DATAANALYSIS

DATACOLLECTION

DATACOLLECTION

36

BENEFITS OF B MBest Practices incorporated into the processMotivation for creativity & innovationTechnological Breakthrough in one’s industryBetter professional growthMeet effectively customer requirementsAssist in attaining competitive position

FMEA ( Failure Mode Effective Analysis)Introduction Failure Mode Effect Analysis is an analytical technique that goes in for

combining Technology and Experience of people to identify foreseen failures in a product or process and planning to eliminate the Failure.

Definition FMEA is a group of activities to understand and evaluate potential failure of

product or process and its effects, and identify actions that eliminate or reduce the potential failures.

Types of FMEA Major ClassificationDesign FMEAProcess FMEA Sub ClassificationEquipment FMEAMaintenance FMEAService FMEASystem FMEA

Failure Rate:Products follow a pattern of failure.There is no information about the reliability (i.e.

Failure) of the product.Failure Rate is a constant is known period of

failure can be found out using Exponential Distribution

Rt = e – λt Rt = Reliability of survival

Rt = e - t / θ t = Time for operation without failure

λ = Failure rate θ = Mean time to Failure

ProblemFailure Rate λ = .0002 per hourWhat is the probability that it will survive

or reliable during the first 200 hours of operations?

Solution Rt = e – λt

= e – (200) (0.0002)

= 96.08 %

UNIT IV

QUALITY FUNCTION DEPLOYMENTQuality Function Deployment is a planning tool used to fulfill

customer expectations.Quality Function Deployment focuses on customer

expectations or requirements, often referred to as voice of the customer.

QFD TEAM :There are two types of teams namely

1. Team for designing a new product2. Team for improving an existing product

BENEFITS OF QFD : Improves Customer satisfaction

Creates focus on customer requirements Uses competitive information effectively Prioritizes resources Identifies items that can be acted upon

Reduces Implementation Time Decreases midstream design changes Limits post introduction problems Avoids future development redundancies

Promotes Team Work Based on consensus Creates communication Identifies actions Provides Documentation Documents rationale for design Adds structure to the information Adapts to changes (a living document)

THE STEPS IN BUILDING A HOUSE OF QUALITY ARE :

List Customer Requirements (WHAT’s)

List Technical Descriptors (HOW’s) Develop a Relationship Matrix Between WHAT’s and HOW’s Develop an Inter-relationship Matrix between HOW’s Competitive Assessments Customer Competitive Assessments Technical Competitive Assessments Develop Prioritized Customer Requirements Develop Prioritized Technical Descriptors

Interrelationship

Between

Technical Descriptors

Technical Descriptors

(Voice of the organization)

Relationship between

Requirements and

Descriptors

Prioritized

Technical Descriptors

Customer

Requirements

(Voice of the

customer)

Prioritized

Customer

Requirements

TAGUCHI’S QUALITY LOSS FUNCTION Taguchi’s Quality Loss Function concept combines cost, target

and variation in one metric with specifications being of secondary importance.

Taguchi has defined quality as the loss imparted to society from the time a product is shipped. Societal losses include failure to meet customer requirements, failure to meet ideal performance and harmful side effects.

CUSTOMERS PERCEIVE QUALITY AS MEETING THE TARGET RATHER THAN JUST MEETING THE SPECIFICATIONS.

There are three common quality loss functions1. Nominal - the - best. 2. Smaller - the - better. 3. Larger - the - better. 

TOTAL PRODUCTIVE MAINTENANCE (TPM) Total Productive Maintenance (TPM) is defined as keeping the

running plant and equipment at its highest productive level with the co-operation of all areas of the organization.

Predictive and Preventive maintenance are essential to building a foundation for a successful TPM environment. Predictive Maintenance is the process of using data and statistical tools to determine when a piece of equipment will fail. Preventive Maintenance is the process of periodically performing activities such as lubrication on the equipment to keep it running.

OBJECTIVES OF TPM :1. To maintain and improve equipment capacity.2. To maintain equipment for life.3. To use support from all areas of the operation.4. To encourage input from all employees.5. To use teams for continuous improvement.

TPM PHILOSOPHY – CONCEPT OF TPM :

Total Productive Maintenance (TPM) is an extension of the Total Quality Management (TQM) philosophy to the maintenance function.

TPM has the following steps: 

1. Management should learn the new philosophy of TPM.2. Management should promote the new philosophy of TPM.3. Training should be funded and developed for everyone in the organization.

  4. Areas of needed improvement should be identified. Loss measurements to identify improvement needs are

Down time losses Reduced speed losses Poor quality losses

5. Performance goals should be formulated. 6. An implementation plan should be developed. 7. Autonomous worth groups should be established.

QUALITY COSTS1.PREVENTION COST Product / Service / Design Development. Marketing / Customer / User. Purchasing Operations (Manufacturing or Service) Quality Administration.

2. APPRAISAL COST Purchasing Appraisal Costs. Operations Appraisal Costs External Appraisal Costs Review of Test and Inspection Data Miscellaneous Quality Evaluations 

3. INTERNAL FAILURE COST Product or Service Design Failure Costs (Internal) Purchasing Failure Costs Operations (Product or Service) Failure Costs

4. EXTERNAL FAILURE COST Complaint Investigations of Customer or User Service Returned Goods Retrofit and Recall Costs Warranty Claims Liability Costs Penalties Customer or User Goodwill Lost Sales

UNIT V

ISO 9000 STANDARDSISO 9001

Design, Development, Production, Installation & Servicing

ISO 9002Production, Installation & Servicing

ISO 9003Inspection & Testing 

ISO 9004Provides guidelines on the technical, administrative and human factors affecting the product or services.

BENEFITS OF ISO 9000 STANDARDS :

Achievement of international standard of quality. Value for money. Customer satisfaction. Higher productivity. Increased profitability Improved corporate image Access to global market Growth of the organization Higher morale of employees

CLAUSES (ELEMENTS) OF ISO 9000 (During the year 2000) Scope Normative Reference Terms and Definitions Quality Management System (QMS)

General Requirements Documentation

Management Responsibility Management Commitment Customer Focus Quality Policy Planning Responsibility, Authority and Communication Management Review

Resource Management Provision of Resources Human Resources Infrastructure Work Environment

Product Realization Planning of Product Realization Customer related processes Design and Development Purchasing Production and Service Provision Control of Monitoring and Measuring devices

Monitoring and Measurement General Monitoring and Measurement Control of Non-Conforming Product Analysis of Data Improvement

QUALITY AUDITINGThe term Audit refers to a regular examination and checking of accounts or financial records, settlement or adjustment of accounts.It also refers to checking, inspection and examination of Production Processes.PURPOSE OF QUALITY AUDIT :•To establish the adequacy of the system.•To determine the effectiveness of the system.•To afford opportunities for system analysis.•To help in problem solving.•To make decision making easier etc.TYPES OF QUALITY AUDIT :

1.First – Party Audit.2.Second – Party Audit.3.Third – Party Audit.

Quality audit can also be classified on the basis of the area taken into account for the audit such as

•System Audit.•Process Audit.•Product Audit.•Adequacy Audit.•Compliance Audit.

ISO 14000 – ENVIRONMENTAL MANAGEMENT SYSTEMThe overall aim of the Environmental Management systems is to

provide protection to the environment and to prevent pollution.

REQUIREMENT OF ISO 14001There are six elements GENERAL REQUIREMENTS 

EMS should include policy, planning implementation & operation, checking & corrective action, management review.

ENVIRONMENTAL POLICY (Should be based on mission) The policy must be relevant to the organization’s nature. Management’s Commitment (for continual improvement &

preventing pollution). Should be a framework (for Environmental objectives & Targets). Must be Documented, Implemented, & Maintained.

PLANNING Environmental Aspects Legal & other Requirements Objectives & Targets Environmental Management Programs

IMPLEMENTATION & OPERATION Structure & Responsibility Training, Awareness & Competency Communication EMS Documentation Document Control Operational Control Emergency Preparedness & Response

CHECKING & CORRECTIVE ACTION Monitoring & Measuring Nonconformance & Corrective & Preventive action Records EMS Audit

MANAGENMENT REVIEW Review of objectives & targets Review of Environmental performance against legal & other requirement Effectiveness of EMS elements Evaluation of the continuation of the policy

BENEFITS OF ENVIRONMENTAL MANAGEMENT SYSTEM :

GLOBAL BENEFITS Facilitate trade & remove trade barrier Improve environmental performance of planet earth Build consensus that there is a need for environmental management and a

common terminology for EMS

ORGANIZATIONAL BENEFITS Assuring customers of a commitment to environmental management Meeting customer requirement Improve public relation Increase investor satisfaction Market share increase Conserving input material & energy Better industry/government relation Low cost insurance, easy attainment of permits & authorization

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