TQM AND

PRODUCTION MANAGEMENT

TQM AND PRODUCTION MANAGEMENT COURSE DURATION: 2 HRS PER WEEK FOR 10 WEEKS COURSE CREDITS: 2

SECTION A: TOTAL QUALITY MANAGEMENT 1. INTRODUCTION (2 HRS)

Meaning of quality – orientation to customer satisfaction Scope of TQM Basics and Imperatives of TQM Cost of quality and its relevance to TQM Concept of Kaizen and continuous improvement

2. STATISTICAL QUALITY CONTROL (3 HRS)

Concept of SQC Acceptance sampling and inspection plans Statistical process control Process capability studies

3. PEOPLES ISSUES IN TQM (2 HRS)

Leadership issues Total employee involvement 5 S concept Quality circles

4. QUALITY MANAGEMENT SYSTEMS (2 HRS)

Quality audits Lead assessment & ISO - 9000

5. QUALITY GURUS AND LEARNINGS FROM THEM (1 HR)

Issues on quality by Demming, Crosby, Taguchi, Juran, and other experts

SECTION – B: PRODUCTION (AND OPERATIONS) MANAGEMENT 1. MANAGING OPERATIONS (2 HRS)

Nature and scope of production/operation management Relationship with other functional areas Standardisation and simplification Reliability and redundancy Value engineering Ergonomic considerations Product (and service) design for differentiation

2. PROCESS DESIGNING (3 HRS) Types of production systems and layouts Capacity requirements planning Facilities, location and influencing factors; evaluation of alternatives JIT, FMS, and Group Technology

3. PRODUCTIVITY AND WORK STUDY (2 HRS)

Method study: Basic procedure, charts, diagram Work measurement & Time study Work sampling, learning curve, production standards Aggregate production planning; heuristic methods

4. PROCESS CONTROL (3 HRS)

Inventory management: Basic concepts; selective inventory control models; ordering systems; material requirement planning; operations scheduling: Meaning; dynamic and static scheduling; design rules

Quality control; variables and attributes Process control and acceptance sampling Maintenance: Facilities; total productive maintenance

BASIC TEXTS

Total Quality Management (by) Besterfield (Pearson) Production & Operations Management (by) S. N. Chary (TMH)

SESSION 1

• 1. INTRODUCTION (2 HRS)• Meaning of quality – orientation to

customer satisfaction• Scope of TQM• Basics and Imperatives of TQM• Cost of quality and its relevance to TQM• Concept of Kaizen and continuous

improvement

TO REMAIN IN ANY BUSINESS

• ORGANISATION SHOULD ADOPT DIFFERENT STRATIGIES

TO MEET OR EXCEED CUSTOMER NEEDS AND EXPECTATIONS

• ONE OF THE STRATEGY IS QUALITY MANAGEMENT SYSTEM – ADOPTION, SIMILAR TO FINANCIAL MANAGEMENT, RISK MANAGEMENT ETC.,

04/11/23 6

History of Quality Systems

• Craftsmen master craftsmen and guilds.• Mass production and inspection systems.• Quality control systems and SPC.• Quality Assurance./ISO 9000.

• Total Quality Management.• Malcolm Baldridge / International Quality Award

Schemes.• Integrated Management Systems.

QUALITY

DEGREE TO WHICH A SET OF INHERENT CHARACTERISTICS FULFILS THE REQUIREMENTS.

QUALITY HAS TWO COMPONENTS :

• CONFORMANCE • PERFORMANCE

QUALITY MANAGEMENT

• CO-ORDINATED ACTIVITIES TO DIRECT AND CONTROL AN ORGANIZATION WITH REGARD TO QUALITY.

TO IMPROVE THE QUALITY OF AN ORGANIZATION’S PRODUCT, PROCESS,

SERVICES AND SYSTEMS – SYSTEMATIC, ANALYTICAL AND LOGICAL APPROACH IS

MOST DESIRABLE FOR CAPA’S.

SPEED

REPUTATION

AESTHETICS

RESPONSE

SERVICE

DURABILITY

RELIABILITY

CONFORMANCE

COURTESY

PERFORMANCE

FEATURES OF QUALITY

Quality can also be expressed by the following formula

Q = P

E

P = Performance or resultE = Expectations

What is Quality?

A ‘Customer-Centric’ View

Continuous Satisfaction ofCustomer Requirements

What isQuality Management?

Achievement of Quality at Low Cost.

What isTotal QualityManagement?

Attainment ofTotal QualityThrough Everyone’sCommitment on a Daily Basis

SO …..

Quality is a state in which value entitlement is realized for the customer and provider in every aspect of the business relationship.

Business quality is highest when the costs are at the absolute lowest for both the producer & consumer and is most readily attained when the entirety of the organization’s human resource is engaged..

QUALITY MANAGEMENTQUALITY MANAGEMENT

QUALITY

PLANNING

QUALITY

CONTROL

QUALITY

ASSURANCE

QUALITY

IMPROVEMNET

TERMS AND DEFINITIONS TERMS AND DEFINITIONS

Quality Management:Coordinated activities, to direct and control an organization with regard to quality.

Quality planning : Part of quality management focused on setting quality objectives and specifying necessary operational processes and related resources to fulfill requirements

Quality Control : Part of quality management focused on fulfilling requirements

Quality Assurance : Part of quality management focused on providing confidence that quality requirement quality will be fulfilled.

QMS MANAGEMENT: Coordinated activities to

direct and control an Organization System: Set of interrelated or interacting elements

QMS: Coordinated activities, to direct and control an organization with regard to quality.

Evolution of Quality Management Philosophy

Demands of First World War increased use of mass production technology. Requirement of reliable equipment and timely supply for the Armed Forces made quality an important issue. Concept of formal quality control was first developed by W A Shewhart in his famous book “Economic Control of Quality of Manufactured Product”.

Subsequently other quality Gurus developed this concept further.

Demings’ philosophy of quality management is contained in his universal 14 points for management.

Deming originated PDCA cycle. He came out with the new “climate” (organizational culture) which primarily consists of joy in work, innovation and cooperation.

He referred to this new climate as win-win as opposed to I win : You lose.

Deming

Improvement

Planning

Control

Juran developed the idea of quality trilogy: quality planning, quality improvement and quality control. He concentrates not only on the end customer, but identifies other external and internal customers. According to him, quality is “Fitness of use”. Juran advocates 10 step approach to quality improvement.

Juran

Crosby

Crosby is known for his concepts of “Do it right first time” and “zero defects”. He defines quality as conformance to requirements which the company itself has established for its products based directly on customer needs. He emphasizes prevention management in every area. Crosby has suggested his own 14 step programme for quality improvement.

• CUSTOMER FOCUS

• LEADERSHIP

• INVOLVEMENT OF PEOPLE

• PROCESS APPROACH

• SYSTEM APPROACH TO MANAGEMENT

• CONTINUAL IMPROVEMENT

• FACTUAL APPROACH TO DECISION MAKING

• MUTUALLY BENEFICIAL SUPPLIER RELATIONSHIP

QUALITY MANAGEMENT PRINCIPLES

TQM

TQM is a set of systematic activities carried out by the entire organization to effectively and efficiently achieve company objectives so as to provide products and services with a level of quality that satisfies customers, at the appropriate time and price.

TQM

TQM - Key Elements & Practices

Top Leadership Customer Focus Policy Deployment New Product Development Standardization Daily Routine Management Kaizen Activity Field Quality Manufacturing Quality Vendor Quality 5S Application of Statistical Methods Utilization of IT Human Resources Development Total Participation (Involvement) Contribution to society, Environment

Typical Excellence Model European Foundation Quality Management

ENABLERSRESULTS

SUPPLIER &PARTNERSHIP

PERFORMANCE

PEOPLESATISFACTION

CUSTOMERSATISFACTION

IMPACT ONSOCIETY

Leader Ship

PR

OC

ES

SE

S

Organizational Results

Policy &Strategy

Customer & Market Focus

PeopleManagement

Resource & Info Management

Leadership ProcessesKey

Performance Results

People Results

Society Results

Customer Results

People

Partnerships and Resources

Policy & Strategy

I n n o v a t i o n and L e a r n i n g

Enablers Results

Business Excellence Model

Excellent Results with respect to Performance, Customers,

People, and Society are achieved through Leadership driving

Policy & Strategy, People, Partnerships & Resources, and

Processes.

1 Leadership 110

1.1Leadership system…………………………………………… 80

1.2 Company Responsibility and Citizenship…………………… 30

2 Strategic Planning 80

2.1 Strategy Development Process……………………………… 40

2.2 Company Strategy ……………………………………….. 40

3 Customer and Market Focus 80

3.1 Customer and Market Knowledge ………………………… 40

3.2 Customer Satisfaction and Relationship Enhancement…… 40

4 Information and Analysis 80

4.1 Selection and Use of Information and Date ……………… 25

4.2 Selection and Use of Comparative Information and Data… 15

4.3 Analysis and Review of Company Performance ………… 40

5 Human Resource Focus 100

5.1 Work systems ……………………………….................. 40

5.2 Employee Education, Training, and Development …. 30

5.3 Employee well-being and Satisfaction………………... 30

6 Process Management 100

6.1 Management of product and service processes …… 60

6.2 Management of support processes …………………… 20

6.3 Management of supplier and partnering processes … 20

7 Business Results 450

7.1 Customer satisfaction results …………................... 125

7.2 Financial and market results ……………………….. 125

7.3 Human Resource results ……………...................... 50

7.4 Supplier and Partner Results ………………............... 25

7.5 Company-Specific Results ………………................... 125

Total Points 1000

Quality certifications/ Compliance standards.

ISO 9001 EMS 14001 OSHAS 18001 TS 16949 AS 9100

AWARDS National Quality Awards Taking a leaf out of the experiences seen

overseas, India also joined the others in establishing and promoting National Quality Award. Today, we have many such sponsors who have established Quality Awards. Some of the more popular National Quality Awards include:

CII – EXIM Award for Business Excellence; The Rajiv Gandhi National Quality Award; IMC Ramakrishna Bajaj National Quality Award.

Customer satisfaction

No matter how effectively a company meets the needs of its customers, it must remain constantly alert and responsive to the dynamic competitive environment and continuously changing needs and expectations of the customers.

Customer satisfaction

Customer satisfaction is determined by the value-to-price ratio

CustomerSatisfaction

=Value the customer gets

Price the customer pays

What constitutes value to customer

Product Performance Reliability Durability Serviceability Aesthetics Perceived quality

What constitutes value to customers

Service Security Reliability Accessibility Timeliness Responsiveness Empathy Assurance

Maximizing Customer satisfaction

Customer satisfaction- Characteristics

Japanese scientist, N.Kano identified three characteristics of customer satisfaction :

A. Basic B. Performance C. Delight

A. Basic- must requirements

Basic relates to requirements that the customer takes for granted. Customers expect the products they use to display such basic, hidden or assured characteristics. When we travel on an aircraft, we expect the flight to be safe. This is hardly a subject for negotiation with the airline. Meeting such requirement may not necessarily create satisfaction, although not meeting it may result in creating considerable dissatisfaction.

B. Performance- expected

requirements

Performance parameters relate to customer requirements that are negotiated and agreed. For example, if the airline releases the flight schedule, the passenger expects the flight to take off and land at the specified time. Meeting these stated requirements creates customer satisfaction and not meeting them will certainly lead to customer dissatisfaction.

C. Delight - Excitement features

Finally wherever the organization performs far beyond the expectations, so as to create pleasant surprises, the customer feels delighted.

Delight

Performance

Basic

Needs

Very satisfied

Very dissatisfied

Needs

Customer quality perceptions

It is therefore quite clear that satisfaction of the basic needs of the customer is not going to help the organizations any more. The organizations will have to constantly strive to meet more than the basic needs of the customer and delight or excite them to have the competitive edge.

Kaizen = Kai [to take apart and make new]

Zen [ to think about so as

to help others]

Kaizen = Thoughtful Acts of Continuous Improvement!

KAIZEN

KAIZEN UMRELLA

kaizen

• IS AN UMBRELLA CONCEPT COVERING MOST OF THE PROCESSES.

• INNOVATION IS A MAJOR CHANGEIN THE WAKE OF TECH. BREAKTHROUGHS

• KAIZEN IS OFTEN UNDRAMATIC AND SUBTLE AND RESULT S ARE OFTEN IMMEDIATELY VISIBLE

What,Why and How to use Kaizen?

Eliminate the Gap!

Customer Supplier

Kaizen

The Need for Change To stay competitive, businesses needs to:

bridge the gap between where we are now and where we need to be.

To do that, we need to change the way we do business.

Kaizen will help us do that.

Japanese Perceptions of Job Functions

Top Management

Middle Management

Supervisors

Workers

Innovation

KAIZEN

Maintenance

An example of a Kaizen-type improvement would be the change in color of a welding booth from black to white to improve operator visibility. This change results in a small improvement in weld quality and a substantial improvement in operator satisfaction.

P-D-C-A CYCLEP-D-C-A CYCLE

PLANPLAN

ACTACT CHECKCHECK

DODO

Dr. W.E. DEMING

Continual Improvement...

Application of this principle involves:

• Employing a consistent organization-wide approach to continual improvement of the organization’s performance.

• Providing people with training in the methods and tools of continual improvement.

P

DC

A

P

DC

A

P

DC

AP = Plan

D = DoC = CheckA = Act

Organization Types:PDCA

PDCA

PDCA

PDCA

PDCA

Improvement

ime

Concept of Continuous improvement

• Making continual improvement of products, processes and systems an objective for every individual in the organization.

• Establishing goals to guide, and measures to track, continual improvement.

• Recognizing and acknowledging improvements.

Continual Improvement...

•Scrap•Rework

•Warranty costs

Hidden Costs

Visible costs

• Excessive use of material

• High inventory

• Inadequate resource utilization

• Cost of redesign and re-inspection

• Cost of resolving customer problems

• Lost customers / Goodwill

Visible and hidden costs/quality costs

• Conversion efficiency of materials

Quality Costs:Quality Costs: Business has two problems. Customers and Business has two problems. Customers and

competitors. Organization head looks for process competitors. Organization head looks for process improvement and to reduce costs in comparison with improvement and to reduce costs in comparison with customers. Selected suppliers or in comparison with customers. Selected suppliers or in comparison with competitors. The economics of quality relates competitors. The economics of quality relates balance between balance between Cost of conformanceCost of conformance

ANDAND Cost of non-conformanceCost of non-conformance

No product is cheaper to provide through doing No product is cheaper to provide through doing things wrong.things wrong.

FAILURE IS EXPENSIVEFAILURE IS EXPENSIVEPREVENTION IS AN INVESTMENTPREVENTION IS AN INVESTMENT

FAILURE IS EXPENSIVEFAILURE IS EXPENSIVEPREVENTION IS AN INVESTMENTPREVENTION IS AN INVESTMENT

PERCENTAGE

Design reviewsDesign reviews Product qualificationsProduct qualifications Drawing checkingDrawing checking Supplier evaluationSupplier evaluation Seminar / trainingsSeminar / trainings Process capability reviewsProcess capability reviews Operation trainingOperation training Quality orientationQuality orientation Zero defects programZero defects program Quality AuditsQuality Audits Preventive maintenancePreventive maintenance Calibration costs (Excluding capital costs)Calibration costs (Excluding capital costs)

Prevention Costs:Prevention Costs:

Prevention costs are the cost of all Prevention costs are the cost of all ACTIVITIES UNDER ACTIVITIES UNDER TAKEN TO PREVENT DEFECTS.TAKEN TO PREVENT DEFECTS.

Specific items are:Specific items are:

Prevention costs Prevention costs RELATE TO QA ACTIVITIES.RELATE TO QA ACTIVITIES.

Prototype inspectionPrototype inspection Receiving inspectionReceiving inspection Suppliers surveillanceSuppliers surveillance In-process verificationIn-process verification Inspection equipment depreciations, maintenance Inspection equipment depreciations, maintenance

costscosts Process control costsProcess control costs Analyzing, Reviewing, Reporting and Storing. The Analyzing, Reviewing, Reporting and Storing. The

appraisal dataappraisal data

Appraisal Costs:Appraisal Costs:

Associated with verification activities. Typical costs are:Associated with verification activities. Typical costs are:

Related to “QC”Related to “QC”

ScrapScrap Rework / Replacement costsRework / Replacement costs Repair / Modify / Down gradeRepair / Modify / Down grade Re-inspectionRe-inspection

Failure Costs:Failure Costs:

Internal failure costs: Associated with NC of product Internal failure costs: Associated with NC of product or service typical costs are:or service typical costs are:

External Failure Costs:External Failure Costs:

Rejected / Returned productRejected / Returned product Warranty / LiabilityWarranty / Liability Customer dis-satisfactoryCustomer dis-satisfactory

100%100%DefectiveDefective

100%100%GoodGood

A TV company branded ‘SS’ established in 80’s was selling its brand based on ‘price’ differentiation. With several MNC entering the market, SS started facing stiff competition. The owner Mr. Nattan felt if he focuses his company’s image as a quality company then he can beat the competition. Hence he shifted the company’s focus from ‘price’ differentiation to ‘service’. He started concentrating in finding what the customer wants. Prior to quality introduction, the performance measures were in terms of, number of new clients, total billings, etc. while meeting the customer, the sales talk was on ‘high service delivery’ without any respect to customer’s needed level of service or on the satisfaction as in the minds of the customer. There was hence a possibility of not meeting their own stated level of service delivery which led to disappointment among customers. Quality goals were now established which were felt to be the indicators of Quality-assuring the company in terms of tangible success.

Case study

Satisfaction of customer is indicated through Bills paid on time Retaining customer return rate at 70%. Accounts receivable days outstanding are improved by 30% within the next 6

months. Customer satisfaction survey will indicate customer satisfaction to be above

90% Satisfaction of employees is indicative by

Turnover rate brought down by 3% in 6 months time. Absenteeism is lowered by 10%. Employee satisfaction survey indicating a level.

Growth of the organization is indicated by Obtaining ISO certification. Increase in share price by 30%. Increase in the number of customers.

Discuss: 1. Do you agree with the methodology adopted by the company for becoming

‘quality organization’? 2. Evaluate the firm’s ‘indicators of quality’ which is expected to measure quality. 3. Identify a few quality indicators to measure quality effectiveness for a company

gearing toward TQM.

Quality, Cost & Profit relationship

Many people think that quality costs money and

adversely effects profits. But these costs are the costs of

doing it wrong first time .

Quality in the long run results in increased profitability.

For example if we design the product right first time , build

it right first time - we save all the costs of redesign ,

rework, scrap, resetting, repair, warranty work etc.

CostQuality

Profit

Quality and Profit : Paradigm

Quality is free

- PHILIP CROSBY

Assignment 1

• Individual

• Visit any industry/ service sector of ur interest and identify the TQM practices

• Identify at least 10 organizations assessed for

• CII exim award

• Deming award