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© 2005 Wiley 1
Total Quality Management
© 2005 Wiley 2
What is TQM?
Meeting quality expectations as defined by the customer
Integrated organizational effort designed to improve quality of processes at every business level
© 2005 Wiley 3
Defining Quality – 5 Ways Conformance to specifications
Does product/service meet targets and tolerances defined by designers?
Fitness for use Evaluates performance for intended use
Value for price paid Evaluation of usefulness vs. price paid
Support services Quality of support after sale
Psychological e.g. Ambiance, prestige, friendly staff
© 2005 Wiley 4
Manufacturing Quality vs. Service Quality Manufacturing quality focuses on
tangible product features Conformance, performance, reliability, features
Service organizations produce intangible products that must be experienced Quality often defined by perceptional factors like
courtesy, friendliness, promptness, waiting time, consistency
The customer is part of the “production” process: if a defect occurs, the customer will be aware of it.
Can the defect be fixed? (bangs cut too short?)
© 2005 Wiley 5
Evolution of TQM – New Focus
© 2005 Wiley 6
TQM Philosophy – What’s Different?
Focus on Customer Identify and meet customer needs Stay tuned to changing needs, e.g. fashion styles
96% of customers do not complain (stop buying and/or tell others 9-11 people); satisfied customers 1 person
Fixing the problem after the complaint customers become more loyal than if they had not had the problem in the first place
It costs more to obtain a new customer than to retain one Customers increase their spending the longer they buy
from a company Continuous Improvement
Continuous learning and problem solving ( e.g. Kaizen, 6 sigma)
© 2005 Wiley 7
TQM Philosophy – What’s Different?
Quality at the Source Inspection vs. prevention & problem
solving Employee Empowerment
Empower all employees; external and internal customers
© 2005 Wiley 8
TQM Philosophy– What’s Different? (continued)
Understanding Quality Tools Ongoing training on analysis, assessment, and
correction, & implementation tools Team Approach
Teams formed around processes – 8 to 10 people
Meet weekly to analyze and solve problems Benchmarking
Studying practices at “best in class” companies Managing Supplier Quality
Certifying suppliers vs. receiving inspection
© 2005 Wiley 9
Four Dimensions of Quality Quality of design
Determining which features to include in the final design
Quality of conformance to design Production processes are set up to meet
design specifications Ease of use
Instructions, operation, maintenance, safety
Post-sale service Responsiveness, rapid repair, p.m., spare
parts
© 2005 Wiley 10
Cost of Quality – 4 Categories
Early detection/prevention is less costly May be less by a factor of 10
© 2005 Wiley 11
Ways of Improving Quality Plan-Do-Study-Act Cycle (PDSA)
Also called the Deming Wheel after originator Circular, never ending problem solving process
Quality Function Deployment Used to translate customer preferences to
design
Seven Tools of Quality Control Tools typically taught to problem solving teams
© 2005 Wiley 12
PDSA Details Plan
Evaluate current process Collect procedures, data, identify problems Develop an improvement plan, performance
objectives Do
Implement the plan – trial basis Study
Collect data and evaluate against objectives Act
Communicate the results from trial If successful, implement new process
© 2005 Wiley 13
PDSA (continued)
Cycle is repeated After act phase, start planning and repeat
process
© 2005 Wiley 14
QFD Details Process used to ensure that the product meets
customer specifications
Voice of theengineer
Voice of the
customer
Customer-basedbenchmarks
© 2005 Wiley 15
QFD - House of Quality
Adding trade-offs, targets & developing product specifications
Trade-offs
Targets
TechnicalBenchmarks
© 2005 Wiley 16
Seven Problem Solving Tools
Cause-and-Effect Diagrams Flowcharts Checklists Control Charts Scatter Diagrams Pareto Analysis Histograms
© 2005 Wiley 17
Cause-and-Effect Diagrams Called Fishbone Diagram Focused on solving identified quality problem
© 2005 Wiley 18
Flowcharts Used to document the detailed steps in a
process Often the first step in Process Re-Engineering
© 2005 Wiley 19
Checklist Simple data check-off sheet designed to
identify type of quality problems at each work station; per shift, per machine, per operator
© 2005 Wiley 20
Control Charts Important tool used in Statistical Process
Control – Chapter 6 The UCL and LCL are calculated limits used
to show when process is in or out of control
© 2005 Wiley 21
Scatter Diagrams A graph that shows how two variables
are related to one another Data can be used in a regression analysis
to establish equation for the relationship
© 2005 Wiley 22
Pareto Analysis Technique that displays the degree of importance for each
element Named after the 19th century Italian economist Often called the 80-20 Rule Principle is that quality problems are the result of only a few
problems e.g. 80% of the problems caused by 20% of causes
© 2005 Wiley 23
Histograms A chart that shows the frequency distribution of
observed values of a variable like service time at a bank drive-up window
Displays whether the distribution is symmetrical (normal) or skewed
© 2005 Wiley 24
Quality Awards and Standards
Malcolm Baldrige National Quality Award
The Deming Prize ISO 9000 Certification ISO 14000 Standards
© 2005 Wiley 25
MBNQA- What Is It? Award named after the former Secretary
of Commerce – Reagan Administration Intended to reward and stimulate quality
initiatives Given to no more that two companies in
each of three categories; manufacturing, service, and small business
Past winners; FedEx, 3M, IBM, Ritz-Carlton Typical winners have scored around 700
points
© 2005 Wiley 26
The Deming Prize
Given by the Union of Japanese Scientists
and Engineers since 1951
Named after W. Edwards Deming who
worked to improve Japanese quality after
WWII
Not open to foreign companies until 1984
Florida Power & Light was first US
company winner
© 2005 Wiley 27
ISO Standards ISO 9000 Standards:
Certification developed by International Organization for Standardization
Set of internationally recognized quality standards Companies are periodically audited & certified ISO 9000:2000 Quality Management Systems
(QMS) – Fundamentals and Standards ISO 9001:2000 QMS – Requirements (customer) ISO 9004:2000 QMS - Guidelines for Performance More than 40,000 companies have been certified
ISO 14000: Focuses on a company’s environmental
responsibility
© 2005 Wiley 28
ISO Standards
(1) Design/Development -> (2) Procurement -> (3) Production -> (4) Installation -> (5) Servicing ISO 9001: 2000 (1) (5) ISO 9002, ISO 9003: withdrawn,
incorporated into ISO 9001: 2000 ISO 10011: Guidelines for Quality
Management
© 2005 Wiley 29
Quality Gurus Walter A. Shewhart W. Edwards Deming Joseph M. Juran Armand V. Feigenbaum Phillip Crosby Kaoru Ishikawa Genichi Taguchi
© 2005 Wiley 30
Why TQM Efforts Fail
Lack of a genuine quality culture
Lack of top management support and commitment
Over- and under-reliance on SPC methods