Mba IV Total Quality Management [12mba42] Notes
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TOTAL QUALITY MANAGEMENT 12MBA42
DEPT OF MBA,SJBIT Page 1
Total Quality Management 12MBA42
TOTAL QUALITY MANAGEMENT Sub Code: 12MBA42 IA Marks: 50
No. of Lecture Hrs/week: 04 Exam Hrs. 03 Hours
Total No. of Lecture Hrs. 56 Exam Marks: 100
Practical Component: 01 Hr/ Week
Module I (6 hours) Introduction to TQM,Meaning of the terms quality, quality control and quality assurance,
importance of quality, quality dimensions of products and services, quality and competitive
advantage, cost of quality, TQM, Evolution of TQM, Basic principles of TQM, TQM VS
Traditional management, advantages of TQM
Module II (10 Hours) Philosophical Framework to TQM Contribution of various gurus of TQM,Deming-Demings
chain reaction, Demings principles, deadly sins, PDCA cycle, Jurans Quality triology, Jurans
breakthrough sequence, Philips Crosby- Quality is free, Taguchis Quality loss function, Ishikawas contributions and Quality Circles.
Module III (6 Hours) Benchmarking Definition, reasons for benchmarking, types of benchmarking, process of
benchmarking what to benchmark, understanding current performance, planning, studying
others, using findings, Xerox model of Benchmarking, Advantages and pitfalls of benchmarking
Concept of Kaizen and its applications
Module IV (6 Hours) Business Process Re-engineering (BPR) Introduction, Need for BPR, Implementing BPR, Steps
in BPR, Re-engineering vs. TQM, BPR Vs. Kaizen, Re-engineering the structure, change
management and BPR, BPR and IT, Advantages and Limitations, Indian examples of BPR
Module V (8 Hours) Quality Management Systems(QMS) Introduction, meaning of QMS, ISO 9000, Benefits of ISO,
ISO 9000-2008 series, implementation of ISO 9000,Problems related to ISO 9000, QS 9000,
Need for QS 9000, QS 9000 series ENVIRONMENTAL MANAGEMENT SYSTEM (EMS),
ISO 14000 series, Benefits of ISO 14000, Integrating ISO 9000 & 14000, SEI-CMM level 5
Module VI (6 Hours) Quality Awards : Introduction, Need for Quality Awards, Deming Prize and its features,
MBNQA and its features, European quality award and its features, Golden peacock award, TQM
models.
Module VII (8 Hours) Quality Control tools: Introduction, 7 tools of quality control (Old & New), Poka-yoke, Quality
Function Deployment.
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Module VIII (6 Hours) Introduction to Six Sigma Historical developments, statistical framework for six sigma, DPU and
DPMO concepts, DMAIC methodology, Training for Six Sigma, Benefits of Six Sigma, Six
sigma and TQM.
Practical Component: Students have to study any Indian organization which has won Deming prize and identify the
quality initiatives of that organization
Students are expected to study various quality awards given in India like CII Business excellence
award, Rajiv Gandhi national quality award and Tata groups Excellence Award and compare
with international awards
Students can identify any 2 products and 2 services and develop Quality attributes for the same.
Students can identify industry from any sector and conduct a benchmark study with respect to
best in the class.
RECOMMENDED TEXT BOOKS: 1. Management and Control of Quality, James R. Evans, 8/e 2012, Cengage Learning
2. Total Quality Management, Dale.H. Besterfield, 3rd Edition, Pearson Education
3. Total Quality Management Text and Cases, G. Nagalingappa&Manjunath VS, Excel books.
4. Total Quality Management, ShridharBhat, Himalaya Publication
REFERENCE BOOKS: 1. Total Quality Management by PoornimaM.Charantimath, Pearson Education.
2. Quality Control Handbook by JURAN, Mc.Graw Hill Publication
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TABLE OF CONTENTS
MODULE NO CONTENT PAGE NO
1 Introduction to TQM 04 to 16
2 Philosophical Framework of TQM 17 to 36
3 Benchmarking 37 to 45
4 Business Process Reengineering(BPR)
46 to 57
5 Quality Management Systems(QMS)
58 to 74
6 Quality Awards 75 to 90
7 Quality Control 91 to 105
8 Six Sigma and other developments 106 to 113
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MODULE I Introduction to TQM,Meaning of the terms quality, quality control and quality assurance,
importance of quality, quality dimensions of products and services, quality and competitive
advantage, cost of quality, TQM, Evolution of TQM, Basic principles of TQM, TQM VS
Traditional management, advantages of TQM.
OBJECTIVE
To Understand and appreciate
Concepts and Practices of TQM
Meaning of the terms quality,
Quality control and
Quality assurance,
Importance of quality,
Quality dimensions of products and services,
Quality and competitive advantage,
Cost of quality,
TQM, Evolution of TQM,
Basic principles of TQM,
TQM VS Traditional man
INTRODUCTION TO TQM
Total quality management (TQM) refers to methods used to enhance quality and
productivity in organizations, particularly businesses. TQM is a comprehensive system
approach that works horizontally across an organization, involving all departments and
employees and extending backward and forward to include both suppliers and
clients/customers.
TQM is only one of many acronyms used to label management systems that focus on
quality. Other acronyms that have been used to describe similar quality management
philosophies and programs include CQI (continuous quality improvement), SQC
(statistical quality control),QFD (quality function deployment), QIDW (quality in
daily work), and TQC (total quality control). Despite the ambiguity of the popularized
term "TQM," that acronym is less important than the substance of the management
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ideology that underlies it. TQM provides a framework for implementing effective quality
and productivity initiatives that can increase the profitability and competitiveness of
organizations.
Although TQM techniques were adopted prior to World War II by a number of
organizations, the creation of the total quality management philosophy is generally
attributed to Dr. W. Edwards Deming (1900-1993). In the late 1920s, while working as a
summer employee at Western Electric Company in Chicago, he found worker motivation
systems to be degrading and economically unproductive; incentives were tied directly to
quantity of output, and inefficient postproduction inspection systems were used to find
flawed goods.
Deming teamed up in the 1930s with Walter A. Shewhart (1891-1967), a Bell Telephone
Company statistician whose work convinced Deming that statistical control techniques
could be used to supplant traditional management methods. Using Shewhart's theories,
Deming devised a statistically controlled management process that provided managers
with a means of determining when to intervene in an industrial process and when to
leave it alone. Deming got a chance to put Shewhart's statistical quality-control
techniques, as well as his own management philosophies, to the test during World War
II. Government managers found that his techniques could easily be taught to engineers
and workers, and then quickly implemented in overburdened war production plants.
One of Deming's clients, the U.S. State Department, sent him to Japan in 1947 as part of
a national effort to revitalize the war-devastated Japanese economy. It was in Japan that
Deming found an enthusiastic reception for his management ideas. Deming introduced
his statistical process control, or statistical quality control, programs into Japan's
ailing manufacturing sector. Those techniques are credited with instilling a dedication
to quality and productivity in the Japanese industrial and service sectors that allowed
the country to become a dominant force in the global economy by the 1980s.
While Japan's industrial sector embarked on a quality initiative during the middle
1900s, most American companies continued to produce mass quantities of goods using
traditional management techniques. America prospered as war-ravaged European
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countries looked to the United States for manufactured goods. In addition, a domestic
population boom resulted in surging U.S. markets. But by the 1970s some American
industries had come to be regarded as inferior to their Asian and European competitors.
As a result of increasing economic globalization during the 1980s, made possible in part
by advanced information technologies, the U.S. manufacturing sector fell prey to
more competitive producers, particularly in Japan.
In response to massive market share gains achieved by Japanese companies during the
late 1970s and 1980s, U.S. producers scrambled to adopt quality and productivity
techniques that might restore their competitiveness. Indeed, Deming's philosophies and
systems were finally recognized in the United States, and Deming himself became a
highly sought-after lecturer and author. The "Deming Management Method" became the
model for many American corporations eager to improve. And total quality
management, the phrase applied to quality initiatives proffered by Deming and other
management gurus, became a staple of American enterprise by the late 1980s. By the
early 1990s, the U.S. manufacturing sector had achieved marked gains in quality and
productivity. By the late 1990s several American industries had surpassed their
Japanese rivals in these areas.
MEANING OF THE TERMS QUALITY, QUALITY CONTROL AND QUALITY
ASSURANCE
CONCEPTS OF QUALITY
Q- Quest for excellence
U- Understanding customers needs
A- Action to achieve customers appreciation
L- Leadership-determination to be a leader
I- Involving all people
T- Team spirit to work for a common goal
Y- Yardstick to measure progress
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Quality Definitions
The ability of a product or service to meet customer needs
The totality of features and characteristics of a product or service that bears on its ability to satisfy stated or implied needs-American Society for Quality
Meeting or exceeding customer requirements now and in the future.
This means that the product/service is fit for customers use, Fitness for use is related to benefits
received by the customer and to ensure customer satisfaction.
Quality control
Quality control denotes all those activities which are directed to maintain and improve quality.
Quality control involves.
1. Setting of Quality targets
2. Appraisal of conformance (adhering to rules)
3. Taking any corrective action where any deviation is noticed
4. Planning for improvements in quality
Objectives of quality control
SQC (Statistical Quality control)
tems of the
manufactured product with the help of statistical knowledge.
assignable causes encountered in the production process.
Organising for quality control
Traditionally Quality control department has the role of a watchdog over production department
employees
ch employee is responsible for quality
which is called as quality at source
Quality at source
ion b/n quality control department and production department
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and product
rkers and managers to form a group called as Quality circle to analyze quality
problems and to solve quality problems.
Quality control strategy and policy
time which aims at continuous improvement of quality . To facilitate this Quality policy must be formulated.
Quality assurance
quality
ntended to include of all activities performed to ensure that the product
performs to the customers expectations and many departments are involved in it.
Activities in Quality assurance
product
t
manuals
ndicates inadequate
quality
Quality assurance system
method of maintaining quality
as an assembly of elements such as organizational
structure, responsibilities, procedures, processes and resources for managing quality.
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The quality assurance system must be documented in the form of a quality manual covering the
following areas:
The quality assurance system must be documented in the form of a quality manual covering the
following areas:
1. Quality planning
2. Quality advice and expertise
3. Training personnel
4. Purchase, process, service appraisal methodology
5. Customer complaints, warranty claims
6. Senior management
7. Marketing
8. Research and development
9. Product design
10. Production and operations
11. After sales/service
12. Stores/distribution/transport
Total quality control (TQC) -wide-view of product quality to achieve competitive positions by
offering quality products to consumers covering from a shop floor to a board room is termed as
Total Quality control (TQC)
ality control is an effective system for integrating
quality development, quality maintenance and quality improvement efforts of the various groups
in an organization so as to enable marketing, engineering, production and service at the most
economic levels which allow for full customer satisfaction
Importance of quality
Producing superior quality products / service is vital to the continued growth success of a
company, therefore benefits of quality are given below.
1. It gives a positive company image
2. It improves competitive ability both nationally and internationally
3. It increases market share, which translates into improved profits
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4. Overall it reduces costs which also results in profits
5. It reduces problems & avoids unnecessary costs
6. It creates an atmosphere for high employee morale, which improves productivity .
Quality Dimensions of products and services
Quality expected from a product (Tangible) Eg: TV, Computers, Bikes
1. Performance: how well the product performs customers use eg: speed of a laser printer
2. Features: special characteristics that attracts a customer eg: power steering and central locking
system of an automobile
3. Reliability: frequency of malfunction, breakdown or repairs eg: cartridge of a xerox machine
4. Serviceability: speed , cost and convenience of repairs and maintenance eg: service of washing
machines
5. Durability: length of time of use before repairs/replacement eg: a car can be used for 5-10
years
6. Appearances: look, feel, taste , smell or sound of a product eg: look of a bike, smell of a
perfume, sound of a music system
7. Customer service: treatment received by customers before, during and after the product sale
eg: credit card
8. Safety: how well the product protects users during use eg: helmets
Quality concepts of Service
Quality expected from service sectors (Intangible) Eg: Hotel, Hospitals, Banks
1. Reliability: consistency and dependability
2. Responsiveness: willingness to provide service
3. Competence: possession of skills and knowledge to perform
4. Access: approachability and ease of contact
5. Courtesy: politeness, respect, neatness and appearance
6. Communication: talking to customers in their language
7. Credibility: trust and belief
8. Security: freedom from danger, risk
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9. Understanding the customer needs: learning customer requirement, providing individual
attention
10. Tangibles: physical evidence of service (facilities, tools and equipment) eg: a cinema theatre
with good seating arrangement
Quality and Competitive advantage.
1 Market route benefits
Continuous quality Improvement
Improved competitive position
Higher prices and increased market share
Increased revenue
Increased profits
2 Cost route benefits
Continuous quality Improvement
Improved defect-free output
Reduced costs of operations
Increased profits
Cost of quality
Cost of quality (COQ)/(COPQ) is the sum of cost incurred by an organization in preventing poor
quality. There are essentially 4 types of quality costs as below
These are certain costs which are associated with product and service quality. There are 4 major
categories of quality costs. They are
1. Prevention costs
2. Appraisal costs
3. Costs of internal failures
4. Costs of external failures
Prevention costs
Are associated with preventing defects before they happen. They include costs of
to increase quality of raw materials,
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Appraisal costs
Internal failure costs
costs, replacement costs or new part costs
External failure costs
Total quality management
Total Quality covers
Earlier concept of quality related with a product is no more valid.
1. Quality is ultimately decided by all the processes which get included in the quality loop.
2. Total Quality covers every job , not just one involved in making of the product. Eg: secretaries
are expected not to make typing errors, accountants not to make accounting errors and CEOs are expected not to make strategic errors.
3. Total quality recognizes each person is involved for the quality of the individual work and for
the quality of the team work.
Total means that everyone in organisation is involved in the final product or service to the
customer.
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Quality does not just mean luxury. The original definition was, quality means conformance to
requirements.
Todays marketplace is now demanding that we go beyond this definition. A powerful definition
of quality to meet these perceptions is quality means delighting the customer by continually
meeting and improving upon agreed requirements.
Management recognises that TQM will not happen by accident. TQM is a managed process
which involves people, systems and supporting tools and techniques.
TQM is therefore a change agent which is aimed at providing a customer-driven organisation.
TQM (Total quality management)
quality and achieve customer satisfaction
improvement or kaizen) and other is goal is customer satisfaction which involves meeting or
exceeding customer expectations
8 essentials of TQM
er selection and development
Evolution of TQM
In early 1990s F W Taylor the father of Scientific Management brought the concept of product inspection .
In 1924 W Shewhart introduced statistical control charts to monitor production.
After the World War II a dramatic increase caused W Edwards Deming introduced (SQC) methods to Japanese manufacturing.
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Joseph Juran formulated his cost of quality concept emphasizing accurate and complete identification and measurement of costs of quality.
In 1950s, Armand Fiegenbaum proposed quality control on the product design and incoming raw material.
In 1960s, Philip Crosby coined the concept of Zero defects.
During 1970s there was a dramatic shift from reactive to proactive approach to quality, this in turn giving importance to customer satisfaction with a drive of team work.
The US government ,safety regulations, product recall mandated by consumer product safety commissions changed the society attitude from let the buyer beware to let the producer beware.
Demings contribution to Japanese industry
(3 decades earlier) made the US companies seek his help and experience. As a result Ford Motor ,General Motors and Procter and Gamble to take up revolution.
In 1985 ,NASA announced an excellence Award for quality and productivity.
The Malcolm Baldrige National Award was established in 1987.
In Japan, during the II World War the economy was completely disrupted.
In 1950 Dr Edward Deming ,introduced the SQC approach in Japan.
Dr K Ishikawa of Tokyo University gave his contributions.
As a result the rate of economic growth increased to 9 to 10 percent per year and the national product doubled in 7 to 8 years .
From 1950 to 1970 ,in the course of 20 years the per capita income has increased roughly by 4 times.
Walter Shewart ,the father of stastistical quality control, initiated the SQC movement during 1947 48.
Dr Edward Deming also visited India in early 1950s
In 1982 due to the quality trigger in US the concept of quality circles came into introduction in the public sector units like ,Bharat electronics and Bharat Heavy
Electricals.
QCFI Quality Circle Forum in India came into existence.
Prof. Ishikawa was invited to by CII confederation of Indian industries.
The year 1987 brought the ISO 9000 .
CII organized training course for ISO 9000 in 1989.
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Companies practice TQM though Quality circles, Suggestion schemes, kaizen and JIT
Basic principles of TQM
Customer focused approach to all activities and processes in the organization should be directed towards winning customer satisfaction.
Strategic planning and leadership :leadership should lead to strong customer orientation in the organization and be willing to make long-term commitments to its customers,
employees, vendors, stockholders and to society.
Restructuring of vertical processes to cross functional horizontal processes to change the work culture to teamwork and making everyone in the process responsible for the
quality.
Creating a culture of working through internal customer system, where each stage in the processes and each person in the process can be linked as customers to each other.
Continuous improvement of all processes and activities ,leading to total customer satisfaction and competitive advantage.
Training and development of people : it is the people who drive the processes under TQM system. Therefore people should be trained and developed for understanding the
process of TQM,
Empowerment and teamwork of people : team approach to work and cross functional process management is an important aspect of TQM work culture.
TQM V/S TRADITIONAL MANAGEMENT
TQM
Customer delight focused with respect to activities/processes. Customer satisfaction through continuous improvement. It is a proactive measure. TQM aims at superior performance Customer delight and benchmarking are the focus. It is a self-driven and self-imposed culture. Aims to satisfy all the stakeholders.
TRADITIONAL MANAGEMENT
Product/service focused. Short term satisfaction. It is often a corrective measure. It aims at quality conformance. State of control is the focus. It is based on the QMS systems (ISO 9000). Aims to satisfy customers essential needs.
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ADVANTAGES OF TQM
Better product quality Productivity improvement Reduced quality costs Increased market Increased profitability Reduced employee grievances Effective teamwork Enhancement of job interest Improvement in human relation and work area morale Participation culture Customer satisfaction Enhanced problem solving Improved corporate health Better image and goodwill.
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Module 2: Philosophical Framework to TQM Contribution of various gurus of TQM,Deming-
Demings chain reaction, Demings principles, deadly sins, PDCA cycle, Jurans Quality triology,
Jurans breakthrough sequence, Philips Crosby- Quality is free, Taguchis Quality loss function,
Ishikawas contributions and Quality Circles.
OBJECTIVE
To Understand and appreciate the:
Philosophical Framework of TQM
Contributions of various gurus of TQM,Deming-Demings chain reaction, Demings principles,
deadly sins, PDCA cycle,
Jurans Quality triology, Jurans breakthrough sequence,
Philips Crosby- Quality is free,
Taguchis Quality loss function,
Ishikawas contributions and Quality Circles.
PHILOSOPHICAL FRAMEWORK TO TQM
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Gurus
Shewhart Deming Juran Fiegenbaum Ishikawa Crosby Taguchi
Principles and Practices
Leadership Customer satisfaction Employee involvement Supplier partnership
Tools and techniques
Benchmarking Information technology Quality management systems Environmental management system Quality by design Management tools Statistical process control Quality engineering
CONTRIBUTION OF VARIOUS GURUS OF TQM
CONTRIBUTOR CONTRIBUTIONS
Deming 14 points, theory on special & common
causes of variation
Juran Quality is fitness for use, quality trilogy
,cost of quality
Feigenbaum Quality is a total field, customer defines
quality
Crosby Quality is free, zero defects
Ishikawa Cause and effect diagrams, quality circles
Taguchi Taguchi loss function
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Figure 1 DEMING W EDWARDS
DEMING W EDWARDS
An associate of Shewhart, worked in Western electric company as a statistician.
He was invited to Japan to led the quality movement.
He modified PDCA cycle of Shewhart to the Plan ,Do ,Study and act.(PDSA).
He also advocated intensive use of Statistics and control charts and focused on product improvement and service conformance by reducing variations in the process.
He joined the US census bureau in the year 1939 and proved that quality control methods could lower costs even in an exclusive service organization.
Deming stressed on the importance of suppliers and customers for the business development and improvement.
He believed that people do their best and it the system that must change to improve quality.
This 14 points formed the basis for this advice to Japanese top management.
The 14 points are applicable to every industry in product and service sector
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DR WALTER A SHEWHART
Worked in Western electric company and AT&T,USA.
He advocated Statistical quality
Control (SQC) and acceptable
Quality level (AQL).AQL is the foundation of today's SIX SIGMA.
He is considered to be the father figure of SQC, who developed control charts for quality assessment and improvements.
DrShewhart also developed the Plan,Do,Check,Act (PDCA) cycle for continuous improvement, which is in use even today
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JOSEPH M JURAN
Juran also joined Western electric company and developed Statistical quality control
handbook.
JUSE invited him to Japan in 1954.
He identified fitness quality and popularized the same.
Jurans fitness of quality
1. Quality of design- through market research, product and concept.
2. Quality of conformance through management, manpower and technology.
3. Availability through reliability, maintainability an logistics support.
4. Full service through promptness, competence and integrity.
Jurans quality planning road map
1. Identify your customers
2. Determine their needs
3. Translate into your language.
4. Develop a product that can respond to the needs.
5. Develop processes which are able to produce those product features.
6. Prove that the processes can produce the product.
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7. Transfer the result in plans to the operating forces
PHILIP B CROSBY
Crosby was vice President of international telephone and telegraph(ITT).
He four absolutes of quality are very relevant to TQM.
Four absolutes of quality
1. Quality is conformance to requirements, nothing more or nothing less and certainly not
goodness or elegance.
2. Quality has to be achieved by prevention and not by appraisal.
3. The performance standard must be zero and not something close to it.
4. The measurement of quality is the price of nonconformance ,ie, how much the defects in
design, manufacture, installation and service cost the company.
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ARMAND V FEIGENBAUM
He was the president of American Society of Quality control.
He said Quality is in its essence way of managing the organization.
Feigenbaums cycle time reduction methodology
1. Define process
2. List all the activities.
3. Flowchart the process.
4. List the elapsed time for each activity.
5. Identify non value adding tasks.
6. Eminent all possible non value adding tasks.
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KAORU ISHIKAWA
A quality guru from Japan.
He advocated the use of cause and effects diagrams to provide a true representation of the organizational impacts and producers.
He developed fishbone or Ishikawa diagram for cause and effect analysis.
DEMINGS CHAIN REACTION
The theory states that improvements in quality leads to lower costs because they result in less rework, fewer delays ,and better use of time and materials.
Lower costs ,in turn, lead to productivity improvements.
With better quality and lower prices, a firm can achieve a higher market share and thus stay in business, providing more and more jobs.
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DEMINGS 14 PRINCIPLES
1) Create constancy of purpose for improvement of product and service. importance of
stability in jobs ,long term plans as investment in innovation, training, R&D.
2) Adopt the new philosophy for economic stability. Customer driven approach as zero
defects,JIT.
3) Cease dependence on mass inspection to achieve quality. results in
bottleneck ,increases cost, measures only causes ,divides the responsibility between
production and quality people. Use appropriate tools to create a balance between quality
and production
4) End the practice of awarding business on price tag alone. Instead, minimize total cost -
move towards a single supplier for any item, on trust.
5) Improve Constantly and forever the system of production and service. Enterprise
systems and services must keep growing in order to catch up with the competitive
market.
6) Institute modern methods of training on the job.
7) Adopt and Institute modern methods of supervision and leadership.
8) Drive out fear : Change and survive.
9) Break down barriers between departments and staff . The workers in design, sales, and
production must work together to face problems and resolve them. open communication
,sharing knowledge.
10) Eliminate the use of slogans and posters . Slogans do it right the first time;; concentrate on the root cause.
11) Eliminate work standards and numerical quotas. This focuses on quantity rather than
quality of product. Ex Targets
12) Remove barriers that hinder the hourly worker. Eliminate Monotonous tasks, Abolish
annual or merit rating.
13) Institute a vigorous program of education and training. A person must grow after
joining a company, and letting them learn new technology and techniques will increase
employee longevity.
14) Create a situation in top management that will push every day on the above
points. Just like products and services, every employee in a company must work to
accomplish the transformation.
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DEMINGS DEADLY SINS
1. Lack of constancy of purpose; short term focus
2. Emphasis on short term profits; cost cutting to meet the quarterly dividend pay.
3. Over reliance on performance appraisals; self-centered NO mutual teamwork.
4. Mobility of management (job hopping); long-term plans are not effective
5. Overemphasis on visible figures; targets cannot give customer satisfaction.
6. Excessive medical costs for employee health care; absenteeism and health care costs
7. Excessive costs of warranty and legal costs ;
DEMING WHEEL/CYCLE(P-D-C-A)
The PDCA cycle is also known as a problem solving process
Plan
A plan can be to initiate a new process or improve an existing one it should be based upon customer needs, and resolve to more effectively fulfill the organizations mission
Do
Carry out the process /activities as per the plan Check
Review the gathered data to determine if the planned and implemented change has created the quality improvement intended
Act
Take action, either to implement the change or change variables to see if the process can be made more effective, or
Standardize the new, successful process.
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DEMINGS TRIANGLE
DEMINGS THEORY OF VARIANCE
The basic assumption of this theory is variation from the standard activity as a major
source of problems for all process.
Variance increases uncertainty and reduces control over the processes.
TQM assigns managers the task of finding the source of their variance and eliminating it
so that the process can be improved.
All the variance can be categorized into two :
Controlled variance and uncontrolled variance.
1 Controlled variance is a variation from standard process that a worker can correct/manage.
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2 Uncontrolled variance is a variation from the standard process due to the impact of some
factor outside the limits of the employee.
Variances can be corrected by workers or managers by changing its common
causes/special causes.
Common causes are as follows
Weakness in the product design
Equipment malfunctions
Poor maintenance of machineries
Incomplete/inaccurate documents maintenance.
Special causes are short term variations in an operating process as follows
Lack of knowledge/skill and competency Worker negligence
JURAN- QUALITY TRILOGY
Quality trilogy includes the following sequence of events:
1 Quality planning
2 Quality control
3 Quality improvement
Quality planning
1 Identify the customer both the external and internal.
2 Determine the customer needs
3 Develop product features that respond needs.
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4 Establish quality goals that meet the needs of customers and suppliers.
5 Develop a process that can produce the needed product
6 Prove the process capability.
Quality Control
1. Choose control subjects.
2. Choose the units of measurement.
3. Establish the measurement
4. Establish the standards of performance
5. Measure actual performance 6. Interpret the difference between the actual and the standard. 7. Take action on the difference
Quality improvement
1. Prove the need for improvement
2. Identify the specific projects for improvements.
3. Organize to guide the projects.
4. Organize for diagnosis for discovery of causes
5. Find the causes
6. Provide remedies
7. Prove that the remedies are effective under operating conditions.
8. Provide control mechanisms.
JURANS BREAKTHROUGH SEQUENCE
Juransbreakthrough sequence identifies a set of actions directed towards achieving major
leaps in quality.
The following are the steps
Step 1 :proof of need.
Identifies some fault in the current process that requires an immediate change.it
identifiescosts of not changing that exceed the costs of change.
Step 2 : project identification
Identifies specific project to bring about improvements which acts as a catalyst.
Step 3: organizing for improvements.
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Organizes for successful completion of the selected projects. TOP MANAGEMENT
COMMITTEE resources ;task forces
Step 4 : diagnostic journey
Traces the root cause from the symptoms (systematic causes, random causes, wilful
causes)
Step 5 : Remedial action
The project team identifies a set of alternatives and select the appropriate one .it further
includes implementation and introducing inspection and testing
Step 6 :Resistance to change
Fear of unknown techniques, fear of excel in new environment create resistance among
the employees. Formulate actions to overcome fear.
Step 7 : Holding on to gains
Freeze the new methods and techniques to prevent any return back to old methodology.
PHILIP B. CROSBY
4 Absolutes of Quality Management:
Quality is defined as conformance to requirements , not goodness
The system for achieving quality is prevention, not appraisal
The performance standard is zero defects, not that is close enough
The measurement of quality is the price of non-conformance, not indexes
Crosbys 6 Cs
Comprehension (understanding)
Commitment (by all)
Competence (Attitude, skill and knowledge)
Correction (Elimination of errors)
Communication (Support of all people, customers and suppliers)
Continuance (improvement)
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CROSBYS QUALITY VACCINE (CROSBYS TRIANGLE)
Integrity, Policies
Integrity represents an honest attempt by the management to eliminate bureaucracy, improve
performance and satisfy customers.
Systems and operations
Focus on designing new systems and operations to maintain the firms new quality environment.
Communication
Refers to the flow of information ( internal&external) both between the functional
departments ,firm ,suppliers and customers. The vaccine requires regular exchange of
information about
quality problems ,
performance on quality characteristics,
progress towards quality goals and
opportunities for improvement
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CROSBY QUALITY IS FREE
Crosby's prescription for quality improvement was a 14 step program.
His belief was that a company that established a quality program will see savings more
than pay off the cost of the quality program ("quality is free").
Crosbys 14 Steps for quality improvement
1. Management commitment
2. Quality improvement team
3. Quality measurement
4. Cost of quality
5. Quality awareness
6. Corrective action
7. Zero Defects program
8. Supervisor training
9. Zero defects day
10. Goal setting
11. Error cause removal
12. Recognition
13. Quality councils
14. Do it all over again
TAGUCHIS QUALITY LOSS FUNCTION Taguchis asserts the quality of a product is a function of key product characteristics
(performance characteristics ).
The ideal value is its target value.
Taguchis Quality loss function estimates loss to society from the failure of a product to
meet its target value for a particular performance characteristic.
A high quality product assures target values consistently throughout its life span under
all operating conditions
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This loss can be incurred by the
1 Consumers (short product life, repair costs),
2 Company (increased scrap, rework and warranty costs) and
2 Society ( pollution , safety)
Quality loss function is expressed as
L=C (X-T)2
Where L = Total Loss
C= a constant
X= actual average value of quality
characteristics and
T= target value of quality characteristic
ISHIKAWA AND QUALITY CIRCLES.
Dr Ishikawa was instrumental to formulate
1 The concept of CWCQ (companywide quality control)
2 The audit process for selection a company to Deming award.
3 Teambased problem solving
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4 Quality circles.
5 Cause and effect charts or fish bone diagrams
6 Bottom up view of quality
QUALITY CIRCLE
A quality circle or quality control circle (Q.C Circle) is a small group of employees 8 to
10 (average number of nine) who volunteer to meet regularly with a facilitator to solve
work related problems in their work area. The group with their leader usually meetonce
a week after their working hours.
Purpose:
To undertake work related projects designed to improve working conditions, enhance
mutual self developmentand to advance the company, all by using quality control
concepts.
HOW QC CIRCLE WORKS
Formation of QC circle
Registration of QC circle
Improvement of activities
QC circle grand meeting of each division
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QC circle grand meeting of plant
Companywide QC circle grand meeting
Improvement of activities
Selection of the problem
Study the problem
Planning for improvement
Execution of the improvement
Confirmation of effect
Conclusion
Presentation
Characteristics of Quality circles.
Small group of employees : 8 to 10
Members are from the same work area or doing similar type of work
Membership of the quality circle is voluntary
Members meet regularly for about an hour every week
Members meet to identify, analyze and resolve work(quality) related problems.
Members resolve work related problems leading to improvement.
Quality circles enrich the work life of the employees.
Benefits of Quality Circles
Tangible benefits
Better quality
Improved productivity
Higher safety(reduced number of accidents)
Greater cost effectiveness
Better housekeeping
Increased profitability
Waste reduction
Reduced absenteeism
Reduced grievances.
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Intangible benefits
Enriched quality of work life.
Attitudinal changes
Harmony ,mutual trust
Effective team working
Participative culture
Human resource development
Promotion of job knowledge
Greater sense of belonging.
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Module 3 Benchmarking Definition, reasons for benchmarking, types of benchmarking, process of
benchmarking what to benchmark, understanding current performance, planning, studying
others, using findings, Xerox model of Benchmarking, Advantages and pitfalls of benchmarking
Concept of Kaizen and its applications
OBJECTIVE
To understand the meaning of Benchmarking
To identify the various reasons for benchmarking,
To list the types of benchmarking,
To explore the process of benchmarking
To know what to benchmark,
To understand current performance, planning, studying others, using findings,
To appreciate Xerox model of benchmarking,
To realize the advantages and pitfalls of benchmarking
To recognize the Concept of Kaizen and its applications
BENCHMARKING DEFINITION
Benchmarking is the process of continually searching for the best methods, practices
and processes, and adapting their good features and implementing them to become the
best of the best.
It is defined as measuring our performance against that of best-in-class companies,
determining how the best-in-class achieve those performance levels and using the
information as a basis for our own company's targets, strategies and implementation
EG: Microsoft, FMCG-HLL, Toyota, Ford
REASONS FOR BENCHMARKING
It acts as a tool to achieve business and competitive objectives.
It is a powerful and effective tool to take up right decisions and align with the
organizational strategies.
It helps organizations to take right decisions in choosing the appropriate markets.
It guides the organization to determine the strengths they need to gain competitive
advantage.
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Benchmarking helps organization to develop strengths and reduce weakness.
Benchmarking helps organization to set goals based on the external environment.
TYPES OF BENCHMARKING
Performance or operational benchmarking
Process or functional benchmarking
Strategic benchmarking
Performance or operational benchmarking
Involves pricing, technical quality, features and other performance characteristics of products
and services
It also involves comparing competitors products, process and analyzing them
Process or functional benchmarking
Analyses work processes such as billing, order entry or employee training, manufacturing,
work /job design, techniques, procedure/process, sequence of operations.
This identifies the most effective best practices in companies that perform similar functions
Eg: Best practices of L.L.Beancompany was adopted by Xerox which reduced the cycle time
by 50 %
Strategic benchmarking
Examines the winning strategies of other companies and to construct a key success factor(KSF)
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BENCHMARKING PROCESS
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1 Getting started
Planning (work technique)
Organizing and ( funds, technical team, technology vendor, training team, top management)
Managing for benchmarking (adopting changes and adjustments)
2 Preparing to benchmark
Identify key processes which processes is to improved
Form team core workmen
Understand your own process KRA s strength /weakness
3 Conducting research
Collect information who is best and what is best org; brand image, market position,
competitive secret, competitors ,
4 Selecting whom to benchmark
Establish relationship
Plan to collect and share information
5 Collecting and sharing information
Surveys
Site visits
Determine any third parties( to collect the data)
6 Analyzing adapting and improving
Compare data
Plan to surpass
Implement and monitor
improve
Performance Measure Examples
Accounting
Percentage of Late Payments
Time to Respond to Customer Requests
Number of Billing Errors
Number of Payroll Errors
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Information Services
Number of Errors / Code Line
Percent of Reports Received on Schedule
Number of Rewrites
Number of Errors Found After
Marketing
Accuracy of Forecast
Number of Incorrect Order Entries
Overstocked Supplies
Contact Errors
Purchasing
Purchase Order Errors
Downtime Due to Shortages
Excess Inventory
Cycle Time (from start of purchase to receipt in-house)
Product Engineering
Project Completion Cycle Times
Engineering Changes/ Document
Number of Errors Found During Design Review
Number of Errors Found in Design Evaluation
Quality Control
Percentage of Lots Rejected in Error
Number of Engineering Changes Detected After Design Review
Errors in Reports
Cycle Time for Corrective Action
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XEROX 12-STEP BENCHMARKING PROCESS
Phase 1: Planning
1. Identify what to benchmark;
2. Identify comparative companies;
3. Determine data collection method & collect data.
Phase 2: Analysis
4. Determine current performance gap;
5. Project future performance levels.
Phase 3: Integration
6. Communicate finding and gain acceptance;
7. Establish functional goals.
Phase 4: Action
8. Develop action plans;
9. Implement specific actions & monitor progress;
10. Recalibrate benchmarks.
Phase 5: Maturity
11. Attain leadership position ;
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12. Fully integrate practices into processes.
ADVANTAGES OF BENCHMARKING
It promotes a thorough understanding of company's processes, strength & weaknesses is well
understood.
2. Saves time and money as known practices are adopted as adopts the practices followed by
superiors competitors rather than invention
3. Identifies non-value added activities and plans for process improvement
4. Enables comparison of performance measures in different dimensions, like Return on assets,
cycle time, delivery time and etc..
5. It focuses on processes and not on products, it is not restricted to a company boundary
6. It allows organizations to set realistic ,new performance targets to do things in a better way
7. It defines specific gaps in performance and to select that process for improvement, and
redesigning the process
8. It provides a basis for training human resources
9.Brings in new changes and ideas.
10.It is a ongoing system.
11. It helps to set goals with reference to external perspective.
LIMITATIONS OF BENCHMARKING
it focus on the process not the situation.
It creates arrogance against competitors.
Best practices is not static , but a moving target.
Benchmarking is not a panacea (solution) that can replace all other quality efforts
Benchmarking is not a instant pudding. It will not the improve performance , if top
management is not providing all the resources and not adopting quality culture
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KAIZEN AND ITS APPLICATIONS
Kaizen is a Japanese word for improvement, change for the better, or continuous
improvement.
the concept of Kaizen has evolved since the 1950s into a business strategy of making
small, but continuous changes for the better in company operations.
These changes can range from manufacturing steps to productivity, inventory or quality
control matters.
Kaizen involves every employee and strongly encourages suggestions for improvements
5S Kaizen Principles
Seiri means to straighten up
Seitonmeans putting things in order
Seisomeans to clean up
Seiketsumeans personal cleanliness
Shitsukemeans discipline.
Seiri means to straighten up /sort /clear out
Differentiate between the necessary and unnecessary and discard the unnecessary
It includes
Work in process
Unnecessary tools
Unused machinery
Defective products.
Papers and documents
Seitonmeans putting things in order/Set Things in Order
Keep the things in order so that they are ready to use when required.
This avoids waste of time due to searching for things like tools, parts, components.
everything should be at its place and there should be place for everything
Seisomeans to clean up /clean and shine
keep the work place clean
Every individual should clean the workplace every day before starting the days work
and also at the time of closing the work
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Seiketsumeans personal cleanliness/Standardize
Having good housekeeping practices by personal attention to personal cleanliness
Shitsukemeans discipline.
Every worker and manager has to follow procedures in the work place with discipline.
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Module 4 Business Process Re-engineering (BPR) Introduction, Need for BPR, Implementing BPR, Steps
in BPR, Re-engineering vs. TQM, BPR Vs. Kaizen, Re-engineering the structure, change
management and BPR, BPR and IT, Advantages and Limitations, Indian examples of BPR
OBJECTIVE
To understand the meaning of Business Process Re-engineering (BPR) & Introduction,
To realize the Need for BPR,
To explore the process of BPR Implementation & Steps in BPR,
To differentiate between Re-engineering vs. TQM,
To distinguish between BPR Vs. Kaizen,
To appreciate the need for Re-engineering the structure, change management and BPR,
To understand the relation among BPR and IT,
To recognize the advantages and Limitations of BPR,
To discuss Indian examples of BPR
INTRODUCTION TO BPR Customer satisfaction has increasingly become the cardinal principle governing any successful
business
Despite emphasis on customer satisfaction, there has been complaints and disappointment , the
reasons for this lies in the process and systems
In many cases, present systems can no longer be fixed and improvements are not sufficient
Hence reengineering of the entire system is needed.
Michael Hammer of the US coined the term re-engineering .
the fundamental rethinking and radical design of business processes to achieve dramatic
improvements in critical contemporary measures of performance such as cost, quality, service and
speed
It is also known as process reengineering or business process re-engineering
It involves asking basic questions about business processes why do we do it? Why it is done in
this way?
Radical redesigning involves tossing out existing procedures and reinventing the process.
The goal is to achieve quantum leaps in performance
Principles of BPR
Rule 1: Organise around outcomes, not tasks
Rule 2: Have those who use the output of the process perform the process (work should be
carried where it is)
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Rule 3: Merge information processing work into real work that produces the information
Rule 4: Treat geographically dispersed resources as though they work centralized
Rule 5: Link parallel activities instead of integrating their results
Rule 6: Put the decision point where the work is performed and build control into the process
Rule 7: Capture information once-at the source
NEED FOR BPR
Develop business vision and process objectives
Identify processes to be redesigned
Understand and measure existing processes
Identify information technology levels
Design and build a prototype of the process
THE IMPLEMENTATION OF BUSINESS PROCESS REENGINEERING
As more organizations undertake business process reengineering (BPR), issues in implementing
BPR projects become a major concern. This field research seeks empirically to explore the
problems of implementing reengineering projects and how the severity of these problems relates
to BPR project success. Based on past theories and research related to the implementation of
organizational change as well as field experience of reengineering experts, a comprehensive list
of sixty-four BPR implementation problems was identified. The severity of each problem was
then rated by those who have participated in reengineering in 105 organizations. Analysis of the
results clearly demonstrate the central importance of change management in BPR
implementation success. Resolutions of problems in other areas as technological competence and
project planning were also determined to be necessary, but not sufficient, conditions for
reengineering success. Further, problems that are more directly related to the conduct of a project
such as process delineation, project management, and tactical planning were perceived as less
difficult, yet highly related to project success. This situation was also true for human resource
problems such as training personnel for the redesigned process. These findings suggest that
reengineering project implementation is complex, involving many factors. To succeed, it is
essential that change are more contextual (e.g., management support and technological
competence) as well as factors that pertain directly to the conduct of the project (e.g., project
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management and process delineation). As one of the first pieces of empirical evidence based on a
field study, this research emphasizes the importance of addressing BPR implementation within
the broader context of organizational change in a complex sociotechnical environment.
IMPLEMENTING BPR, STEPS IN BPR
Step 1: Formulate / Modify business visions, policies, objectives
Step 2: Formulate / Modify business strategies according to changing customer requirements,
technology changes and competition
Step 3: Analyze the existing business process cycles & workflows and determine how they may
be modified or refined
Step 4: Apply IT to setup an optimal Business Information Management Architecture (BIMA) to
support the reengineered business process
Step 5: Modify or redesign the existing processes according to the reengineering strategies and
develop refined Business Process Automation Systems (BPAS)
Step 6: Apply IT strategies to map BIMA onto an Enterprise Information Management System
(EIMS) that is integrated across the enterprise and that fits into and supports the reengineered
Business process cycles and workflows.
Step 7: Integrate the EIMS with the BPAS to build up the completed reengineered business
system
Understanding
the process
Stream-
lining
Measurement
& controls
Continuous
improvements
Understanding
the process
Understanding
the process
Understanding
the process
Understanding
the process
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Step 8: Repeat steps 1-7 for continuous BPR due to changing customer demands, technology
changes and business strategies, which leads to business stability
Reengineering in a service industry
Make the customer the starting point for change
Design work processes in light of organizational goals
Restructure to support frontline performance
3 Rs of reengineering Rethink: this phase requires examining the organizations current objectives and underlying assumptions to determine how well they incorporate the renewed commitment to customer
satisfaction
Redesign: This phase requires an analysis of the way the organization produces the products or services it sells-how jobs are structured, who accomplishes what tasks and the results of each
procedure. Which element to be redesigned is determined to make the customer satisfied.
Retool: This phase requires a thorough evaluation of the current use of advanced technologies, especially electronic data processing systems, to identify opportunities for
change that can improve quality of services and customer satisfaction
RE-ENGINEERING VS. TQM
It is very important to understand that Reengineering is not a separate discipline. It is, in fact, a
subset of TQM. The essential difference between (Business Process) Reengineering and TQM is
that reengineering aims at quantum gains on the order of 30 to 50 percent or more, whereas Total
Quality Management programs stress incremental progress, striving for inch-by-inch gains again
and again.
The two approaches to improve performance are not mutually exclusive; it makes sense to use
them in tandem. Reengineering can be used to first produce good basic design that dramatically
improves a business process. Total quality programs can be used to work out bugs, perfect the
processes, and gradually improve both efficient and effectiveness.
Such two-pronged approach to implementing organizational and strategic change is like a
marathon race where you run fast four laps as fast as you can, then gradually pick up speed the
remainder of the way.
Both TQM and BPR are customer-oriented. They both aim on improving the customer
satisfaction. Also, they both suggest thinking outside in. On the other words, they both suggest to
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think from the customer's viewpoint. Also, both TQM and BPR are process-oriented. They both
target to alter the processes, but not just on the product. Moreover, they both take team approach.
Nearly all BPR projects are initiated by top-down approach. Since BPR would results great
changes, staff resistance is obvious. Therefore, top management's support and commitment are
very important. For TQM, both top-down approach and bottom-up approach are possible.
The basic assumptions of TQM and BPR are different. TQM assumes that the existing practices
or systems are principally right and useful. The target of TQM is to improve on the basis of the
existing system. However, BPR takes an opposite assumption. BPR assumes the existing system
is useless and suggests starting it over. Unlike TQM that aims on smoothly and incremental
improvements, BPR aims on dramatic results.
TQM emphasis on total involvement, including all the stakeholders. The involvement even
extends to suppliers and customers. Also, TQM also suggests involving all the processes in the
company, including human resources management, order fulfilling, manufacturing, marketing
and customer management and others. However, for BPR, the project can be controlled to a
specified area only.
Standardization is one of the key points of TQM. TQM aims on standardize the practices, thus
achieving a consistent performance. It also makes that there is a certain degree of documentation
for TQM. However, BPR emphasis on flexibility and believes that standardization would
increase the complexity of the process. Therefore, standardization is rare in BPR and the level of
documentation is much lower.
TQM emphasis on the use of statistical process control. However, there is no similar concern for
BPR. On the other hand, BPR emphasis more on the enabling role of information technology.
TQM is a cultural issue. Once the culture is built, TQM is absorbed in the daily operation.
However, BPR is a project. It is with a clear target that should be achieved as soon as possible.
In fact, BPR is a risky project that is suitable for organizations in deep trouble or facing great
challenges. However, an organization cannot always be under BPR. TQM, on the other hand, can
be treated as a consolidation approach for the organizations to maintain continuously
improvements.
BPR VS. KAIZEN
BPR assumes lack of processes as the basis of change that might not be true in all cases.
Kaizen accepts current state of processes and works towards gradual improvement.
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BPR starts the process of improvement from a clean slate, i.e. totally ignore current status
as opposed to kaizen.
BPR is hard to implement, technology oriented and requires and considerable change
management ,opposed to kaizen which is simpler, people oriented and long term oriented.
RE-ENGINEERING THE STRUCTURE
Restructuring the firm consists of altering its decision-making, operating divisions, and
management culture. Reengineering entails changing the procedures by which the work is
accomplished and products delivered.
Process restructuring, as championed by Michael Hammer and James Champy in their
Reengineering the Corporatio, can deliver costs reductions of 50 percent or more. Corporate
restructuring, as portrayed by John Womack and colleagues in The Machine that Changed the
World, also suggest a law of halves. Womack and his colleagues studied the Japanese
automobile industry, and their research revealed that Toyota and other makers by applying the
principles of teamwork, quality control, customer focus, minimal buffers and continuous
improvement had cut product defects by half, factory space by half, work-time by half, and
development time by half.
While diversification had been a hallmark of good management during the 1960s, shedding
unrelated business had become the measure during the 1980s and 1990s. De-diversification,
back to basics, and a return to core competencies emerged as restructuring drivers for good
reason. More focused firms, as Robert Hoskisson and Michael Hitt show in Downscoping,
display superior performance.
Restructuring actions taken in single areas tend to achieve few enduring gains. Downsizing the
workforce generates short-term cost savings, but in the absence of a broader reorganization, it
brings only temporary relief. Reengineering business process creates immediate gains, but the
gains are short-lived without changes in performance measures, compensation incentives,
information technologies, employee skills, and organizational structure. Restructuring and
reengineering, then, should be seen as a multi-faceted revamping of the corporation.
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Company restructuring has both worsened and improved the lot of those who work there. Lean
redesigns, cost reductions, and repeated downsizings have terminated careers and decimated
communities. At the same time, reengineering, flexible work, and streamlined hierarchies have
improved employee productivity and product quality. The process of restructuring frequently
brings long work weeks and high stress levels, but the product of restructuring also often results
in greater autonomy and more challenging work. One study of restructuring experience revealed
heightened loads, diminished morale, and reduced employee commitment, but it also found
enhanced quality, customer service, risk taking, workforce competence, and productivity.
The dual impact of corporate restructuring on those who experience and manage it accounts for
some of the schizophrenia toward restructuring. Work environments can be filled with high
anxiety and low morale. At the same time, however, the quality of work life often improves,
with more variety, responsibility, and teamwork. Executives experience stress as they manage
the transformation, but in doing so they are also laying a framework for improved company
performance, richer compensation packages, and enhanced shareholder return.
CHANGE MANAGEMENT AND BPR
BPR is all about the process. Change Management is all about the people.
In a BPR context, unless you've completely automated the process then you won't get 100% of
your ROI until 100% of the people involved have internalized the new process! One of the key
reasons that many Hammer and Champy style BPR initiatives failed miserably was that their
total focus was on the Q component, to the exclusion of the A component. Alas, for most
business initiatives you don't get dollar one of ROI until somebody's behavior changes. I
won't repeat the most excellent rant extended polemic of the previous post, but there's more
discussion of the topic there if you're interested.
All of these three terms relate to change, but to different levels and types of change. The problem
with the fuzzy definitions is that it leads to people applying the wrong practice to their business
challenge. Its like someone saying, We need to dig a tunnel from England to France; let me get
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my Black & Decker rechargeable drill. Or equally bad, We need to place a screw in the living
room wall to hang a mirror; hold on while I get the dynamite.
Change Management, Process Reengineering and Corporate Transformation are clearly diffent.
They are distinct processes, require special capabilities, and are applied in different ways.
Change Management is geared towards communications and training on some specific shift in
the use of an information system or process.
Business Process Reengineering (BPR) relates to taking an entire end-to-end business process,
like billing and collecation or sales as examples, breaking it down to component steps,
realignigng the steps to be more efficient and effective, and implmenting the new process. The
implementation of BPR projects typically entail major systems changes and significant changes
to the organization and how business is conducted.
Corproate Transformation is more focused on changing the business overall. A transformation
effort is centered on clarifying the corporate strategy and putting a process and discipline in
place to drive strategy execution, alignment of the orgnaization and disciplined follow through
for performance.
The most common mistake we see in selecting the right tool for change is underestimating the
level of change that is being called up. What may seem to management as a minor tweak in
business process is often received by sales and operations as a major shift that is disruptive to the
daily operations and requires much more preparation and considerations to accomplish. My
ChangeThis artice titled, People Dont Hate Change, They Hate How Youre Trying to Change
Them became one of the fastest downloaded pieces on their site. The team at ChangeThis said
that they knew that trying to get corporate change right was one of the biggest frustrations people
have and so this was no surprise to them.
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BPR AND IT
IT has penetrated the office and services environment since the 1978.The shift from mainframe
to PC based technology is breaking down communication barriers between employees and
customers. Now managers and employees from various departments are designing and
controlling complex business information systems. IT capabilities involve improving information
access and coordination across organizational units. It is so powerful that it can actually create
new process design options, rather than simply support it. In his book, Business the Speed of
Thought, Bill Gates argues that if the 1980s were about quality and the 1990s were about
reengineering, then the 2000s will be about velocity. Gates advocates complete digitalization of
all aspects of life. He argues that to be successful in the digital age, companies need to develop a
new digital infrastructure similar to the Human nervous system. This new digital system enables
companies to run smoothly and efficiently, makes them respond quickly to emergencies and
opportunities, provides a mean for quickly getting valuable information to the people in the
company who need it. This in turn empowers employees to make decisions and interact with
customers .What is the Relation between BPR & Information Technology? Hammer considers IT
as the key enabler of BPR . Davenport & Short argue that BPR requires taking a broader view of
both IT and business activity, and of the relationships between them. IT capabilities should
support business processes, and business processes should be in terms of the capabilities IT can
provide. They believe IT's promise and its ultimate impact is to be the most powerful tool for
reducing the costs of coordination .It has been argued that innovative uses of IT would inevitably
lead many firms to develop new, coordination -intensive structures, enabling them to coordinate
their activities in ways that were not possible before. Such coordination -intensive structures may
lead to strategic advantages.
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IT Roles in Initiating and Sustaining Reengineering
Before the Process Design
During the Process Design
During the Implementation
Create infrastructures and
manage information that
support evolving organization
Bring vast amounts of
information into the process
Create a digital feedback
loop
Foster process thinking in
organizations
Bring complex
analytical
methods to bear on the process
Establish resources for
critical evaluation of the
reengineered process
Identify and select process for
redesign
Enhance employees ability to make more informed decisions
with less reliance on formal
vertical information flows
Improve IT processes to
meet increasing needs of
those divisions that have gone
under reengineering
processes
Participate in predicting the
nature of change and
anticipate the information
needs to support that change
Identify enablers for process
design
Institute a program of
cleanup and damage control in case of failure
Educate IT staff in non
- technical issues such as
marketing, customer
relationships, etc.
Capture the nature of proposed
change and match IT strategy to
that change
Communicate ongoing results
of the BPR effort
Participate in designing
measures of success/ failures
of reengineering
Capture and disseminate
knowledge and expertise to
improve the process
Help to build commitment to
BPR
Communicate ongoing results of the BPR effort
Evaluate the potential
investment and return of
reengineering efforts
Transform unstructured processes into reutilized
transactions
Reduce/replace labor in a process
Define clear performance goals
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and objectives to drive the
implementation
Define the boundaries and scope of the process
ADVANTAGES OF BPR 1. Organization can achieve radical changes in performance by cost , cycle time, service and quality
2. It boosts competitiveness in the operations through simpler, leaner and more productive processes
3. Encourages organization to problem solving thinking approach
4. It helps organizations to make noticeable changes in the pace& quality to respond to customer needs
5. An organization can be transformed from rule driven organization to a marketing structured
organization to focus on customer
6. It helps to get better market share and profitability
7. Workers are encouraged to make suggestions and creates a TQM culture
8. It helps in creating challenging and more rewarding jobs with broader responsibilities
LIMITATIONS OF BPR 1. It is not a panacea, application of it matters a lot.
2. It is not simple or easy to do. Hence companies do not invest time and money on BPR
3. Corporate strategy support is needed
4. BPR cannot be realized without Information technology
5. Processes in functional areas must be improved
6. It requires teamwork from all the employees
Example of FORD company-BPR
FORD Company has employed 500 people in North America for Accounts Department
The Staff were spending more time in resolving problems between purchase orders, receiving documents and invoices
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FORD reengineered the Accounts payable process, introducing a system of online database for purchase orders and other documents processing
This BPR brought a very good change in FORD company
Staff members were reduced by 75% and faster processing was possible which saved time and cost
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Module 5 Quality Management Systems(QMS) Introduction, meaning of QMS, ISO 9000, Benefits of ISO,
ISO 9000-2008 series, implementation of ISO 9000,Problems related to ISO 9000, QS 9000,
Need for QS 9000, QS 9000 series ,ENVIRONMENTAL MANAGEMENT SYSTEM (EMS),
ISO 14000 series, Benefits of ISO 14000, Integrating ISO 9000 & 14000, SEI-CMM level 5.
OBJECTIVE
To understand the importance of Quality Management Systems (QMS) Introduction, meaning of QMS,
ISO 9000,
Benefits of ISO, ISO 9000-2008 series,
Implementation of ISO 9000,
Problems related to ISO 9000,
QS 9000, Need for QS 9000, QS 9000 series
ENVIRONMENTAL MANAGEMENT SYSTEM (EMS), ISO 14000 series,
Benefits of ISO 14000,
Integrating ISO 9000 & 14000,
SEI-CMM level 5
QUALITY MANAGEMENT SYSTEMS(QMS) INTRODUCTION, MEANING OF QMS
A quality management system (QMS) is a collection of business processes focused on
achieving your quality policy and quality objectives i.e. what your customer wants and
needs.It is expressed as the organizational structure, policies, procedures, processes and
resources needed to implement quality management. Early systems emphasized predictable
outcomes of an industrial product production line, using simple statistics and random sampling.
By the 20th century, labour inputs were typically the most costly inputs in most industrialized
societies, so focus shifted to team cooperation and dynamics, especially the early signaling of
problems via a continuous improvement cycle. In the 21st century, QMS has tended to converge
with sustainability and transparency initiatives, as both investor and customer satisfaction and
perceived quality is increasingly tied to these factors. Of all QMS regimes, the ISO 9000 family
of standards is probably the most widely implemented worldwide - the ISO 19011 audit regime
applies to both, and deals with quality and sustainability and their integration.
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ISO 9000
ISO 9001: 2000
A revolution occurred in 1947 in the management of quality worldwide when ISO (Geneva,
Switzerland) bought out a set of standards pertaining to the practice of quality assurance methods
within a company.
Termed as ISO 9000 standards, these standards proved their value around the globe. Many
countries including India have adopted ISO.
ISO 9000 is not a mandatory system or it is not a government regulation. However it is a very
important customer regulation. It provides assurance to a wide variety of customers about an
organizations quality assurance methods and quality management practices
5 objectives of ISO 9000
1. Achieve, maintain and seek to continuously improve product quality including service
relationships
2. Improve the quality of operations to continuously meet customers and stake holders stated and
implied needs
3. Provide confidence to internal management and other employees that quality requirements are
being fulfilled and that improvement is taking place
4. Provide confidence to customers and other stake holders that quality requirements are being
achieved in the delivered product
5. Provide confidence that quality system requirements are fulfilled
Structure of ISO Quality standards ISO 9000
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ISO 9001:2000 Model
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ISO requirements 1. Management responsibility
2. Quality system
3. Contract review
4. Design control
5. Document and data control
6. Purchasing
7. Control of supplied products
8. Product identification and traceability
9. Process control
10. Inspection and testing
11. Control of inspection, measuring and test equipment
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12. Inspection and test status
13. Control of nonperforming products
14. Corrective and preventive action
15. Handling, storage , packaging, preservation and delivery
16. Control of quality records
17. Internal quality audits
18. Training
19. Servicing
20. Statistical techniques
Quality Management System (QMS)- Principles of new standard for ISO
Principles of new standard
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Quality Manual
It is a document containing the quality policy, quality objectives, structure chart, and description
of the quality system of an organization. A quality manual often explains how the requirements
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of a quality standard are to be m