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TOTAL QUALITY MANAGEMENT: TQM Origins, Evolution & key elements

21 st . century winners Total quality - focused. Information technology based. Vision directed. Flatter and empowered. Customer driven. Flexible and adaptive. Time based. Innovative. Global. Networked.

CURRENT DEMANDS FROM ORGANISATIONS TO UNDERSTAND WHAT CUSTOMER WANTS AND TO PROVIDE IT , IMMEDIATELY ON DEMAND , AT LOWEST COST TO PROVIDE PRODUCTS & SERVICES OF HIGH QUALITY AND RELIABILITY CONSISTENT TO KEEP UP WITH PACE OF CHANGE , TECHNOLOGICAL AS WELL AS POLITICAL AND SOCIAL TO BE ONE STEP AHEAD OF THE CUSTOMER’S NEEDS ; THAT IS , TO PREDICT WHAT THE CUSTOMER WILL WANT ONE YEAR OR TEN YEARS FROM NOW CUSTOMER MEANS INTERNAL CUSTOMER AS WELL

TQM Total – made up of the whole Quality – Degree of excellence a product or service provides Management – Act, art, or manner of handling, controlling, directing etc. TQM is the art of managing the whole to achieve excellence.

QUALITY MANAGEMENT TRIANGLE COMMITMENT TO NEVER-ENDING QUALITY IMPROVEMENT INVOLVEMENT SCIENTIFIC KNOWLEDGE

What is Quality? Quality is “fitness for use” (Joseph Juran) Quality is “conformance to requirements” (Philip B. Crosby) Quality of a product or services is its ability to satisfy the needs and expectations of the customer “ The quality of a product or service is a customer’s perception of the degree to which the product or service meets customer’s expectations.”

Meaning of Quality Webster’s Dictionary degree of excellence of a thing American Society for Quality totality of features and characteristics that satisfy needs

WHAT IS QUALITY ? EVERYTHING WHICH MATTERS TO THE CUSTOMER WHAT IS POTENTIAL OF AN ORGANISATION ? ( INCLUDING THE EFFECT OF SYNERGY ) WHAT IS PRESENT LEVEL OF PERFORMANCE ? QUALITY MANAGEMENT ATTEMPTS TO FILL THIS GAP

Nature of Quality Dimensions of Quality Determinants of Quality Costs of Quality

Best-In-Class and World-Class Customers’ expectations of quality are not the same for different classes of products or services. Best-in-class quality means being the best product or service in a particular class of products or services. Being a world-class company means that each of its products and services are considered best-in-class by its customers.

Some Dimensions of Product Quality Performance – relative to customer’s intended use Features – special characteristics Reliability – likelihood of breakdowns, malfunctions Serviceability – speed/cost/convenience of servicing Durability – amount of time/use before repairs Appearance – effects on human senses Customer service – treatment before/during/after sale Safety – user protection before/during/after use

Traditionally Quality has 3 main dimensions Performance Price Promptness In present context , following more dimensions should be added to Concern for Quality – Global competitiveness Concern for environment Concern for safety

Determinants of Quality Quality of design – products/service designed based on customers’ expectations and desires Quality capability of production processes – processes must be capable of producing the products designed for the customers Quality of conformance – capable processes can produce inferior product if not operated properly Quality of customer service – a superior product does not mean success; must have quality service also Organization quality culture – superior product and service requires organization-wide focus on quality

Costs of Quality Scrap and rework - rescheduling, repairing, retesting Defective products in the hands of the customer - recalls, warranty claims, law suits, lost business, … Detecting defects - inspection, testing, …. Preventing defects - training, charting performance, product/process redesign, supplier development, ….

Traditional Quality Management Rigorous system of inspection Defective products will be identified and discarded Quality can be inspected into products Main decision is how many products to inspect (largely a question of economics)

Meaning of Quality: Consumer’s Perspective Fitness for use how well product or service does what it is supposed to Quality of design designing quality characteristics into a product or service A Mercedes and a Ford are equally “fit for use,” but with different design dimensions

Quality management Have three main components: quality control quality assurance quality improvement. Quality management is focused not only on product/service quality, but also the means to achieve it. Quality management therefore uses quality assurance and control of processes as well as products to achieve more consistent quality.

Evolution of Quality Management Inspection Quality Control Quality Assurance TQM Salvage, sorting, grading, blending, corrective actions, identify sources of non-conformance Develop quality manual, process performance data, self-inspection, product testing, basic quality planning, use of basic statistics, paperwork control. Quality systems development, advanced quality planning, comprehensive quality manuals, use of quality costs, involvement of non-production operations, failure mode and effects analysis, SPC . Policy deployment, involve supplier & customers, involve all operations, process management, performance measurement, teamwork, employee involvement.

Inspection Does not add value Inspectors distrusted by workers Increase quality and reduce need for inspectors Poka-yoke - “mistake proof” Have workers do own inspecting Before – are inputs good? During – process happening properly? After – conforms to standards?

W. E. Deming and the 6 Era’s of Quality 1920’s : New statistical thinking and methods in manufacturing 1930/40’s : Use of statistical thinking outside manufacturing 1950/60’s : Systems of improvement 1970/80’s : The fourteen points Late 80’s : The “New Climate” 1990’s : System of Profound Knowledge

W. Edwards Deming Statistics professor, specializing in acceptance sampling Assisted Japan in improving productivity and quality after World War II Introduced Japanese companies to the Plan-Do-Check-Act (PDCA) cycle (developed by Shewart) System (not employees) is cause of poor quality Developed 14 Points for managers

Deming’s Paradigms Intrinsic & extrinsic motivation Management needs to improve and innovate processes to create results Optimize the system toward its aim Cooperation is better than competition

Deming’s view of a production as a system Consumer Research Design & redesign Receipt & test of materials Suppliers, materials & equipment Production, assembly, inspection Distribution Consumers Test of processes, machines, methods, cost

Improve Quality Productivity improves Provide jobs and more jobs Deming’s Chain Reaction Cost decreases because of less rework, fewer mistakes, fewer delays, snags, better use of machine time and materials Stay in business Capture the market with better quality and lower price

PLAN CHECK DO ACT The Deming Cycle or PDCA Cycle Plan a change to the process. Predict the effect this change will have and plan how the effects will be measured Implement the change on a small scale and measure the effects Adopt the change as a permanent modification to the process, or abandon it. Study the results to learn what effect the change had, if any.

W. Edwards Deming’s 14 Points Create constancy of purpose towards improvement of product and services. Adopt the new philosophy. We can no longer live with commonly accepted levels of delays, mistakes, defective workmanship. Cease dependence on mass inspection. Require, instead, statistical evidence that quality is built in. End the practice of awarding business on the basis of price tag. 1) 2) 3) 4)

W. Edwards Deming’s 14 Points Find problems. It is management’s job to work continually on the system. Institute modern methods of training on the job. Institute modern methods of supervision of production workers. The responsibility of foremen must be changed from numbers to quality. Drive out fear that everyone may work effectively for the company. 5) 6) 7) 8)

Break down barriers between departments. Eliminate numerical goals, posters and slogans for the workforce asking for new levels of productivity without providing methods. Eliminate work standards that prescribe numerical quotas. Remove barriers that stand between the hourly worker and his right to pride of workmanship. 9) 10) 11) 12) W. Edwards Deming’s 14 Points

Institute a vigorous programme of education and retraining. Create a structure in top management that will push everyday on the above 13 points. 13) 14) W. Edwards Deming’s 14 Points

Deming’s System of Profound Knowledge Appreciation for system Knowledge about variation Theory about knowledge Knowledge of psychology

Joseph Juran Went to Japan in 1951 Wrote Quality Control Handbook Quality begins by knowing what customers want 80% of defects are controllable Quality Planning Quality control Quality improvement

Philip B. Crosby Martin Marietta, ITT, starting in 1960s Wrote “Quality is Free” in 1979 Management must be firmly behind any quality plans Do it right the first time Company should have the goal of zero defects Cost of poor quality is greatly underestimated Traditional trade-off between costs of improving quality and costs of poor quality is erroneous

Quality Gurus Armand V. Feigenbaum Developed concept of total quality control (TQC) Responsibility for quality must rest with the persons who do the work ( quality at the source ) Kaoru Ishikawa Wrote Guide to Quality Control in 1972 Credited with the concept of quality circles Suggested the use of fishbone diagrams

Quality Gurus Genichi Taguchi Contends that constant adjustment of processes to achieve product quality is not effective Instead, products should be designed to be robust enough to handle process and field variation

Quality Drives the Productivity Machine If production does it right the first time and produces products and services that are defect-free, waste is eliminated and costs are reduced. Estimated that 20-25% of COGS in the US is spent on finding and correcting errors Quality management programs today are viewed by many companies as productivity improvement programs.

Dimensions of Quality: Manufactured Products Performance basic operating characteristics of a product; how well a car is handled or its mileage Features “ extra” items added to basic features, such as a stereo CD or a leather interior in a car Reliability probability that a product will operate properly within an expected time frame; that is, a TV will work without repair for about seven years

Dimensions of Quality: Manufactured Products (cont.) Conformance degree to which a product meets pre–established standards Durability how long product lasts before replacement Serviceability ease of getting repairs, speed of repairs, courtesy and competence of repair person

Dimensions of Quality: Manufactured Products (cont.) Aesthetics how a product looks, feels, sounds, smells, or tastes Safety assurance that customer will not suffer injury or harm from a product; an especially important consideration for automobiles Perceptions subjective perceptions based on brand name, advertising, and the like

Dimensions of Quality: Service Time and Timeliness How long must a customer wait for service, and is it completed on time? Is an overnight package delivered overnight? Completeness: Is everything customer asked for provided? Is a mail order from a catalogue company complete when delivered?

Dimensions of Quality: Service (cont.) Courtesy: How are customers treated by employees? Are catalogue phone operators nice and are their voices pleasant? Consistency Is the same level of service provided to each customer each time? Is your newspaper delivered on time every morning?

Dimensions of Quality: Service (cont.) Accessibility and convenience How easy is it to obtain service? Does a service representative answer you calls quickly? Accuracy Is the service performed right every time? Is your bank or credit card statement correct every month? Responsiveness How well does the company react to unusual situations? How well is a telephone operator able to respond to a customer’s questions?

Meaning of Quality: Producer’s Perspective Quality of Conformance Making sure a product or service is produced according to design if new tires do not conform to specifications, they wobble if a hotel room is not clean when a guest checks in, the hotel is not functioning according to specifications of its design

Meaning of Quality: A Final Perspective Consumer’s and producer’s perspectives depend on each other Consumer’s perspective: PRICE Producer’s perspective: COST Consumer’s view must dominate

Meaning of Quality Fitness for Consumer Use Producer’s Perspective Consumer’s Perspective Quality of Conformance Conformance to specifications Cost Quality of Design Quality characteristics Price Marketing Production Meaning of Quality

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