Tqm introduction
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Total Quality Management (TQM) is an integrated approach to improving quality at all levels of an organization. It involves putting customers first, making continuous improvements, aiming for zero defects, training employees, and involving all departments. TQM focuses on preventing defects through quality planning and inspection, rather than just finding defects after production. The costs of quality include prevention costs to avoid defects, appraisal costs to inspect for defects, and failure costs when defects occur internally or externally with customers. Earlier detection of defects results in lower costs to fix.
Tqm introduction
- 2. Commonly used definitions • TQM: An integrated effort designed to improve quality performance at every level of the organisation. • Customer-defined quality: The meaning of quality as defined by customers. 2
- 3. Defining Quality • The definition of quality depends on the role of the people defining it. Most consumers have a difficult time defining quality, but they know it when they see it. Some of the more common definitions of quality are: • Conformance to specifications • Fitness for use • Value for price paid • Support services • Psychological criteria 3
- 4. Manufacturing organisations and Service Organisations • Dimensions of quality for manufacturing versus service organisations Manufacturing Organisations Service Organisations Conformance to specifications Tangible factors Performance Consistency Reliability Responsiveness to customer needs Features Courtesy/friendliness Durability Timeliness/promptness Serviceability Atmosphere 4
- 5. Cost of Quality Quality has many costs, which can be divided into two categories. • The first category consists of costs necessary for achieving high quality, which are called quality control costs. These are of two types: prevention costs and appraisal costs. • The second category consists of the cost consequences of poor quality, which are called quality failure costs. These include external failure costs and internal failure costs. • The first two costs are incurred in the hope of preventing the second two. 5
- 6. • Prevention costs are all costs incurred in the process of preventing poor quality from occurring. • Appraisal costs are incurred in the process of uncovering defects. • Internal failure costs are associated with discovering poor product quality before the product reaches the customer site. • External failure costs are associated with quality problems that occur at the customer site. 6
- 7. Prevention Cost • Costs of preparing and implementing a quality plan. Appraisal Cost • Costs of testing, evaluating, and inspecting quality. Internal Failure Cost • Costs of scrap, rework, and material losses. External Failure Cost • Costs of failure at customer site, including returns, repairs, and recalls. 7
- 8. Companies that consider quality important invest heavily in prevention and appraisal costs in order to prevent internal and external failure costs. The earlier defects are found, the less costly they are to correct. For example, detecting and correcting defects during product design and product production is considerably less expensive than when the defects are found at the customer site. This is shown in Figure(next slide) 8
- 10. Note: External failure costs tend to be particularly high for service organizations. The reason is that with a service the customer spends much time in the service delivery system, and there are fewer opportunities to correct defects than there are in manufacturing. Examples of external failure in services include an airline that has overbooked flights, long delays in airline service, and lost luggage. 10
- 11. The Evolution of Total Quality Management(TQM) Early 1900s Inspection 1940s Statistical sampling 1960s Organizational quality focus 1980s and Beyond Customer driven quality Old Concept of Quality: Inspect for quality after production. New Concept of Quality: Build quality into the process. Identify and correct causes of quality problems.11
- 12. Put Customers First: A quality product or service satisfies customer’s needs and expectations. Whether a product or service is of high or low quality, will be decided by how it made the consumer feel and whether consumer expectations were satisfied or exceeded. Customers can be put first through a variety of initiatives including: • Undertaking market research to discover consumer needs so that the organisation can develop products and services that exceed their consumer's needs. • Looking after all customers whether internal or external - Internal customers are employees of the organisation and are known as customers when they approach each other for a service. • Effective customer care systems - Customer care systems are all systems that support customer service; they include customer advice, after sales support, product warranties and in store facilities such as parent and baby rooms, shoe fitting services and waiting rooms. • Ensuring that all service standards are met. • Listening to customer views and opinions - Responding to customer views including resolving customer complaints in a manner that satisfies their expectations. 12
- 13. Make Continuous Improvement: The Japanese term “Kaizen” has contributed to this component. Kaizen believes that there are no limits to continuous improvement. This means that a TQM organisation will continuously strive to improve their product/service and increase the quality standards. Aim for Zero Defects: Defects are expensive because they will lower the customer’s confidence in the product. Also it is more expensive to rectify defects than it is to prevent them occurring in the first place. Zero defects can be achieved through a combination of quality assurance and quality control. Training and Development: An organisation will need to train their employees to ensure that they understand the principles of TQM. Any organisation employee will need to understand how TQM is to be achieved or maintained and how they as an employee will ensure that the organisation emulates TQM. 13
- 14. Involvement of other functions in TQM • Marketing • Finance • Accounting • Engineering • Purchasing • Human Resources • Information Systems 14