TQM Principles

Lecture 2

TQM
MAN 501
Dr Ejaz Ahmed
Fall 2010
Absolutes Of Quality

Philip Crosby’s four absolutes of quality

Quality is defined as conformance to customers’

requirements.

The system for improving quality is prevention.

The performance standard is zero defects—a

commitment to conform to requirements each and
every time.

The measurement of quality is the price of

nonconformance.
To successfully implement TQM,
an organization must concentrate
on the eight key elements:

Ethics
Integrity
Trust
Training
Teamwork
Leadership
Recognition
Communication
TQM has been coined to describe a philosophy that
makes quality the driving force behind leadership,
design, planning, and improvement initiatives.

These elements can be divided into four groups

according to their function. The groups are:

Foundation It includes: Ethics, Integrity and Trust.

Building Bricks It includes: Training, Teamwork and

Leadership.

Binding Mortar It includes: Communication.

Roof It includes: Recognition.

CUSTOMER?
Everyone in the organization, from hourly
employees on the front lines to senior
executives, should know
the customer is

the customer considers important.

CUSTOMER ANYONE WHO IS IMPACTED BY THE
PRODUCT OR PROCESS. MAY BE
EXTERNAL OR INTERNAL.

EXTERNAL IMPACTED BY THE PRODUCT BUT

CUSTOMER ARE NOT MEMBERS OF THE
COMPANY THAT PRODUCES THE
PRODUCT.

INTERNAL IMPACTED BY THE PRODUCT AND

CUSTOMERS ARE ALSO MEMBERS OF THE
COMPANY THAT PRODUCES
THE PRODUCT.
CUSTOMERS' NEEDS

KEEP CHANGING. THERE IS NO

SUCH THING AS A FINAL LIST OF
CUSTOMERS' NEEDS.

WHY CUSTOMERS’ NEEDS CHANGE?

DUE TO

NEW TECHNOLOGY
MARKET COMPETITION
SOCIAL UPHEAVALS
INTERNATIONAL CONFLICTS.
 Customer supply chain

Inputs from Internal Outputs to

External Customer External
Customer
Customers

Internal Customer/Supply Relationship

Three basic questions people ask from their internal
customers

1.What do you need from me?

2.What do you do from my output?
3.Are there any gaps?
TQM Philosophy: Continuous Process Improvement
Implies
There is no Acceptable Quality level
Customer’s needs constantly change- they become
more demanding

1980 – 88 Quality & Performance of Product

Price
Service

1989- 92 Quality & Performance of Product

Service
Price
 ASQ ranks end-user’s
perceptions as

•Performance
•Features
•Service
•Warranty
•Price
•Reputation
Feedback
Discover Customer Dissatisfaction
Discover relative priorities of quality
Compare performance with the competition
Identify customer’s needs
Determine opportunities for improvement
Surveys

Remember

• Clients and customers are not same

• Surveys raise customers’ expectations
• How you ask a question will determine how the
question is answered
• Be specific in questions to get better answers
• Repeated responses are not always possible
• Spend more time in survey development: You will
spend less time in data analysis and interpretation
• Whom you ask is as important as what you ask
• Before data collection analysis disciplines should
be understood
To Implement the Survey Results:

a. Focus Group
b. Toll- Free Numbers
c. Customer Visits
d. Internet & Computers
e. Employee Feedback
f. Mass Customization
Customer service is the set of activities which could
be provided before, during or after the sale.

Few such activities are:

Organization
Customer Care
Communication
Frontline People
Leadership

Write two requirements for each activity, that you feel

important for customer service.
ORGANIZATION

a. Identify each market segment

b. Write down the requirements
c. Communicate the requirements
d. Organize processes
e. Organize physical spaces
CUSTOMER CARE

1. Meet the customer’s expectations

2. Get the customer’s point of view
3. Delivered what was promised
4. Respond to all complaints
5. Over-respond to customer
COMMUNICATION

a. Optimize the trade-off between time and

personal attention
b. Minimize the number of contact points
c. provide knowledgeable, pleasant and
responsive employees
d. document in customer-friendly language
FRONT-LINE PEOPLE

• Impart care while recruiting

• Give them challenges
• Authorize them to solve problems
• Provide appropriate training
• Recognize and reward performances
LEADERSHIP

• Lead by Example
• Listen to front-line people
• Strive for continuous improvement
THE GREAT QUALITY PRINCIPLES
1. Quality can be improved and costs reduced at the same time.
2. Improving quality increases competitive advantage. Therefore, the goal should be
ultimate quality performance.
3. All variance results in loss to the system as a whole and loss to society.
Therefore, variance must be reduced.
4. Quality is perceived in the mind of the customer. Discover what customers value
now and what they may value in the future. To be the supplier of choice, exceed
their expectations.
5. Design products and services according to customers’ values, and standardize
the processes that produce them while also accommodating the specific needs of
individual customers.
6. Management controls the system; therefore quality improvement must begin with
management.
7. Detect defects, errors, and variances immediately, and provide
high-quality feedback immediately.
Earl Naumann says,

A firm that has no customer satisfaction

program and no interest in starting one
should be the delight of the firm’s
competitors
To capture early warning indicators,
combine the concept of moments of truth
with the development of listening posts by
taking the following steps:
1.Through training, build awareness of the need to gather
all tidbits of information

2.Develop a system to feed information to a central

collecting place

3.Train personnel who have frequent direct customer

contact to actively listen to the VoC

4.Create incentives for employees to communicate

customer complaints

5.Make the review of the VoC part of your quality

management system
VOC may be defined as:
1.
2.
3.
VOC may be collected through various
methods. List Three methods.

Classroom Exercise
By capturing the VoC, your organization will
create much more than a complaint management
system.

VoC can include

Customers’ suggestions
Their dissatisfaction with a product/ service
How they feel they were treated
Their perception of quality
What they would like in future products/ services, or
Their expressions of satisfaction
Your Customers Are Talking, But
Are You Listening?
With reference to this situation

List Four expected customer reactions

List Four ways to collect customer feedback
List Four ways to improve customer service
Should we bother about customer
satisfaction?

List three advantages we may expect if we

bother about customer satisfaction.

Classroom Exercise
Why Bother?
There are myriad reasons it pays to know
what’s on your customers’ minds:

Customer retention:

Wouldn’t you like to know and fix a

developing situation before it results in a lost
customer?
Why Bother?

Customer satisfaction:
Wouldn’t it be beneficial

to have a methodology for gathering and

processing customer feedback?

a process that will enable your organization to

obtain and
retain a leading position in the marketplace?
Why Bother?

Employee satisfaction:
Wouldn’t it be useful

to be able to directly reinforce your

organization’s customer focus through
measurements, feedback and positive
reinforcement of your responsible employees?
Why Bother?
Quality management system requirements:

Wouldn’t it be nice to implement preventive

action requirement, a customer data collection,
analysis, measurement and reporting process
that fully meets the intent of the standard?
Why Bother?

Cost avoidance:
Wouldn’t it be a decided advantage

to know you have the best possible approach

to avoiding costly mistakes that could result from
failure to hear the voices of your customers?
 Much can be done to

improve an organization’s ability to

really listen to
the many voices of its customers.

Reference: Westcott, R. (2006). Quality Progress. February, 22-27

Determine Customer Needs
 Whatproduct/service attributes are considered
important to your customers?

 What does your customer require (must have)?

 Whatdoes your customer want (would be nice to

have)?

 Why is it important to determine customer needs?

Identify a business of your own.

List three tangible and three intangible

wants of a customer.
My Business:

1 2 3
Tangible
wants
Intangible
wants
Classroom Exercise
Intangible Wants
 Sense of well-being
 Securing attention
 Courteous treatment
 Prompt services
 Pleasant surrounding
 Sense of importance
 Dealt with honestly
Kano Model
Unanticipated
• Excitement
• Surprise

Unspoken

Performance
Kano Model

(Intangible)
Specified
• Required
• Desired

Performance
(Tangible)
Spoken

Satisfaction
Kano Model

Performance

Basic
• Essential
• Taken for granted

Unspoken

Satisfaction
Kano Model
Unanticipated
• Excitement
• Surprise

Specified
• Required
Unspoken • Desired

Performance

Basic
Spoken • Essential
• Taken for granted
Ch

Unspoken
an
e g

Satisfaction
Hearing The Voice Of The Customer

Marketing
Innovative Ideas Laws & Regulations

Wants

Tribal Knowledge
Contracts

User Focus Groups Competitive Analysis

Customer Research

Be a customer

Simulate customer experience

Communicate with
customers

Beyond conventional market research