TOTAL QUALITY MANAGEMENT

Definition

• Total quality management is the integration of all functions and processes within an organization in order to achieve continuous improvement of the quality of goods and services. The goal is customers satisfaction`

Historical Evolution of Total Quality Management

The historical evolution of Total Quality Management has taken place in four stages:They can be categorized as follows:

1. Quality inspection2. Quality control3. Quality assurance4. Total Quality Management

First stage (QI)

• The first stage of this development took place in the 1910s• When the Ford Motor Company’s ‘T’ Model car rolled off

the production line• The company started to employ teams of inspectors to

compare or test the product with the project standard• This was applied at all stages covering the production

process and delivery, etc. • The purpose of the inspection was that the poor quality

product found by the inspectors would be separated from the acceptable quality product and then would be scrapped, reworked or sold as lower quality

First stage (QI)

• Second World War, manufacturing systems became complex and the quality began to be verified by inspections rather than the workers themselves

• Statistical quality control by inspection - methods designed by Shewhart and Dodge-Roming during 1924–1931 were practised through development of control charts and accepting sampling

Second stage (QC)

• With further industrial advancement came the second stage of TQM development and quality was controlled through supervised skills, written specification, measurement and standardization

• At this stage Shewhart introduced the idea that quality control can help to distinguish and separate two types of process variation;– Firstly, the variation resulting from random causes– Secondly, the variation resulting from assignable or special

causes

Second stage (QC)

• He also suggested that a process can be made to function predictably by separating the variation due to special causes

• Further, he designed a control chart for monitoring such process variation in order to decide when to interact with the process

• The main processes which help products and services to meet customers’ needs are inspection and quality control

Third stage (QA )

• Quality Assurance contains all the previous stages in order to provide sufficient confidence that a product or service will satisfy customers’ needs

• Other activities such as comprehensive quality manuals, use of cost of quality, development of process control and auditing of quality systems were also developed in order to progress from quality control to the quality assurance era of Total Quality Management

• At this stage there was also an emphasis of change from detection activities towards prevention of bad quality

Forth stage (TQM)

• Total Quality Management involves the understanding and implementation of quality management principles and concepts in every aspect of business activities

• Total Quality Management demands that the principles of quality management must be applied at every level, every stage and in every department of the organization

• The idea of Total Quality Management philosophy must also be enriched by the application of sophisticated quality management techniques

• The process of quality management would also be beyond the inner organization in order to develop close collaboration with suppliers

The Concept of TQM

• TQM means thinking about quality in terms of all functions of the enterprise and a start to finish process that integrates interrelated functions at all levels

• TQM ensures that the overall effectiveness of the system is greater than the individual output of a subsystem

• The subsystem includes:– Design– Planning– Production– Distribution &– Field services

Quality - Definitions• Quality is excellence that is better than a minimum

standard It is conformance to standards and ‘fitness of purpose’ • ISO 9000:2000 definition of quality - It is the degree to

which a set of inherent characteristics fulfills requirements

• Quality is ‘ fitness for use ‘ of the product –Joseph Juran

Quality and customer expectations

Quality is also defined as excellence in the product or service that fulfills or exceeds the expectations of the customer

Though quality is an abstract perception, it has a quantitative measure- Q= (P / E ) , where Q=quality, P= performance(as measured by the Mfgr.), and E = expectations( of the customer)

Quality and customer expectations

Quality is not fine-tuning your product at the final stage of manufacturing, before packaging and shipping

Quality is in-built into the product at every stage from

conceiving –specification & design stages to prototyping –testing and manufacturing stages

TQM philosophy and guiding principles continuously improve the Organization processes and result in customer satisfaction

The 9 Dimensions of Quality Performance Features Conformance ----------------------------- Reliability Durability Service ----------------------------- Response- of Dealer/

Mfgr. to Customer Aesthetics – of product Reputation- of

Mfgr./Dealer

Cost

Performance

FeaturesService

TQM’s Six Basic Concepts

Management commitment to TQM principles and methods & long term Quality plans for the Organization

Focus on customers – internal & external Quality at all levels of the work force Continuous improvement of the

production/business process Treating suppliers as partners Establish performance measures for the processes

Effects of poor Quality

Low customer satisfaction Low productivity, sales & profit Low morale of workforce More re-work, material & labor costs High inspection costs Delay in shipping High repair costs Higher inventory costs Greater waste of material

Benefits of Quality Higher customer satisfaction Reliable products/services Better efficiency of operations More productivity & profit Better morale of work force Less wastage costs Less Inspection costs Improved process More market share Spread of happiness & prosperity Better quality of life for all

The Deming Philosophy

Deming defines quality as a predictable degree of uniformity and dependability, at low cost, and suited to the market• Create and publish the aims and purposes of the

organization• Learn the new philosophy• Understand the purpose of inspection• Stop awarding business based on price alone• Improve constantly and forever the System• Institute training• Teach and institute leadership

The Deming Philosophy

• Drive out fear, create trust, and create a climate for innovation

• Optimize the efforts of teams, groups, and staff areas• Eliminate exhortations for the work force• Eliminate numerical quotas for the work force• Eliminate management by objectives• Remove barriers to pride of workmanship• Encourage education and self-improvement for all• Take action to accomplish the transformation

Juran’s ten stepsDefines quality as fitness for use in terms of design, conformance, availability, safety and field use1. Build awareness of opportunities to improve2. Set goals for improvement3. Organise to reach goals4. Provide training5. Carry out projects to solve problems6. Report progress7. Give recognition8. Communicate results9. Keep score10. Maintain momentum by making annual improvements part of the

regular systems and process of the company

Philip CrosbyHe argues that poor quality in the average cost 20% of revenues, most of which could be avoided by adopting good practices. His absolutes of quality are:1. Quality is defined as conformance to requirement, not

goodness2. The system for achieving quality is prevention, not

appraisal3. The performance standard is zero defects, not ‘’that’s

close enough’’4. The measurement of quality is non-conformance, not

indexes

Crosby’s fourteen points1. Management commitment – communicate through written policy 2. Quality improvement teams – to oversee improvements in de pts.3. Quality measurement – identify areas in need of improvement4. Cost of quality – areas where improvement would be profitable5. Quality awareness – employees to understand conformance to Q.6. Corrective action – review actions 3 to 47. Zero defect planning – program appropriate to company’s culture8. Supervisor training – all levels of management to be trained9. Zero defect day – designate a day for company’s standards10. Goal setting – individuals/ groups to set goals for themselves11. Error cause removal – problems that generates errors12. Recognition – in-public appreciation to goal achievers13. Quality councils – meet regularly to share experiences, ideas & problems14. Do it all over again

Common Themes of TQM Gurus Inspection is never the answer to quality improvement,

nor is policing Involvement of and leadership by top management are

essential to the necessary culture of commitment to quality

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

Quality is first and schedules are secondary

Customer satisfaction• Customer is the Boss or ’King’• Customer dictates the market trends and direction• Customer not only has needs to be supplied( basic

performance functions)• Also he ‘wants what he wants!’( additional features

satisfy him and influence his purchase decision)• Hence the Suppliers and Manufacturers have to closely

follow at the heel of the customer

What is customer satisfaction?

• Is it due to Product quality?• Is it due to pricing?• Is it due to good customer

service ?• Is it due to company reputation?• Is it something more?

Customer satisfaction/Dissatisfaction feedback

Customer feedback has to be continuously sought and monitored - not one-time only!( Pro-active! Complaints are a reactive method of finding out there is a problem)

Customer feedback can be relayed to manufacturer Performance comparison with competitors can be known Customers needs can be identified Relative priorities of quality can be obtained from the

horses’ mouth! Areas for improvement can be noted

Customer feedback methods

• Comment cards enclosed with warranty card when product is purchased.

• Customer survey and questionnaire• Customer visits• Customer focus groups• Quarterly reports• Toll-free phones• e-mail, Internet news groups, discussion forums• Employee feedback• Mass customization

The Baldrige Award

• Leadership – CEO, management for quality, public responsibility

• Information and Analysis – use of data, competitive comparisons, bench marking

• Strategic quality planning - company quality performance plans

• Human resource development and management-employee involvement, employee training/ education, employee performance, employee satisfaction

The Baldrige Award

• Management of process quality-introduce -quality products and services, process management(delivery processes, support services),supplier quality, assessment at all stages

• Quality and operational results - product and services result, company operational result, supplier quality result

• Customer focus and satisfaction - customer expectations, customer relationship with management, customer satisfaction

Five ways to Improve a Process

• Reduce resources• Reduce errors• Meet or exceed expectations of

internal/external customers• Make the process safer• Make the process more satisfying to the person

doing it

Four Improvement Strategies

• Repair• Refinement• Renovation• Re-invention

TQM principles from the Japanese

The 3 K Method

• Kimerareta Kotoo – What has been decided

• Kimerareta Tori – must be followed• Kichim to Mamorukoto – as per standard

The 5s Method

• Seiko - Sort ( Proper arrangement )• Seiton - Set ( Systematic or Orderliness )• Seiso - Shine ( Sweep or clean-up )• Seiketso - Standard ( Personal cleanliness )• Shitsuke - Sustain ( Self-discipline )

Kaizen…….Change for the better

• Kaizen is a philosophy that sees improvement in productivity as a gradual and methodical process

• It makes the work environment more efficient and effective through its five founding elements:– Team work– Personal Discipline– Improved Morale– Quality Circles– Suggestions for Improvement

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Kaizen Principles

1. Don't look for excuses, look for ways to make things happen

2. Get rid of all old assumptions. Say "NO" to status quo

3. Don't worry about being perfect - even if you only get it half right “ start NOW

4. It does not cost money to do KAIZEN5. If something is wrong "Fix it NOW6. Good ideas flow when the going gets tough7. Ask "WHY" five times - get to the root cause8. Look for wisdom from Ten people rather than one 9. Never stop doing KAIZEN

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Kaizen Cycle

36Source: Archfield Consulting Group

Benefits of Kaizen

• It is a process oriented approach, hence has lasting impact as improvements are made where faults are identified

• There is a high level of employee involvement which enhances their morale and motivation

• It helps to improve quality, there by enhancing customer satisfaction

• It helps to improve productivity resulting in low cost of operation

• It helps to reduce the rate of accidents thus improving work safety

• It aids in waste reduction in areas such as inventory, waiting time, transportation and others which in turn aids in better utilization of space and resources 37

Challenges faced by Kaizen

• Kaizen is a top-down approach• It requires lot of effort especially by executives at the top-

most level• It is a people oriented approach. So employee support is

critical for successful implementation of Kaizen• It should be a continuous process or else the expected

results would not be obtained• It requires a long term discipline and commitment. So

everyone should be patient about the results

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14 Principles followed by

Toyota was the first company to implement Kaizen• Base your management decisions on a long-term philosophy, even at the

expense of short-term financial goals• Create a continuous process flow to bring problems to the surface.• Use "pull" systems to avoid overproduction • Level out the workload (heijunka). (Work like the tortoise, not the hare)• Build a culture of stopping to fix problems, to get quality right the first time• Standardized tasks and processes are the foundation for continuous

improvement and employee empowerment• Use visual control so no problems are hidden• Use only reliable, thoroughly tested technology that serves your people and

processes

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14 Principles followed by Toyota(Contd…)

• Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others

• Develop exceptional people and teams who follow your company's philosophy

• Respect your extended network of partners and suppliers by challenging them and helping them improve

• Go and see for yourself to thoroughly understand the situation

• Make decisions slowly by consensus, thoroughly considering all options; implement decisions rapidly (Nemawashi)

• Become a learning organization through relentless reflection (hansei) and continuous improvement (Кaizen)

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Kaizen In Pakistan

• Difficult to implement because of the “no- problem” attitude among Pakistanis

• We don’t give importance to customers though the attitude is changing slowly

• They fail to implement QFD (Quality Function Design)• But changes are happening• Few Companies like PEL, Siemens have successfully

implemented Kaizen• PEL has been able to reduce its workforce by half, increase its

production by 40%, revenues by 20% after they started practicing Kaizen

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Kaizen In lhr PC

Problem: Breakages in the main kitchen of PC Hotel Lahore were high due to

incorrect flow of cutlery and crockery during washing

Solution: Kaizen team was set up. The system of one piece at a time into the

dishwasher was implemented. The layout of the dishwashing area was changed to facilitate single-piece flow

Result: The breakage of crockery came down by 28 per cent. Savings from the

stoppage of breakages are at Rs 6 lakh per annum

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Kaizen Technique

• Kaizen- defines the managements role in continuously encouraging and implementing small improvements in the individual & organization

• Break the complex process into sub-processes and then improve the sub-processes

• Continuous improvements in small increments make the process more efficient ,controllable and adaptable

• Does not rely on more expense, or sophisticated equipment and techniques

PDSA cycle- seven steps or phases

Right first time

A. Plane Plan of action based on analysis of the collected data

B. Do This may involves minimum PDCA cycle until the issues of implementation are resolved

C. Check Where results after implementation are compared with targets to asses if the expected performance improvement has been achieved

D. Act If the change has been successful then the out come is standardized . If this change has not been successful, however , the lesson are recorded and the cycle starts again

Six sigma method• Six sigma method can be defined as a business

improvement approach that seeks to find and eliminate causes of defects and errors in manufacturing and service process by focusing on outputs that are critical to customers and a clear financial return for the organization

• The term six sigma is based on a statistical measure that equates to 3.4 or fewer errors or defects per million opportunities that can be applied to all parts of an org.

• Create highly qualified process improvement experts, who can apply improvement tools and lead teams

Comparison between Six sigma & TQM TQM

• Is based largely on worker empowerment and teams

• Its activities generally occur within a function, process, or individual work place

• Its training is generally limited to simple improvement tools and concepts

• It is focused on improvement with little financial accountability

SIX Sigma

• Is owned by business leader champions

• Its functions are truly cross- functional

• It focusses on more rigorous and a structured problem solving methodology DMAIC – define, measure, analyse, improve and control

• It requires a verifiable return on investment and focus on the bottom line