Productivity

and
Quality Management
 Question Bank
 What is TQM? State the objectives and
benefits of TQM
 What are Quality management systems?
 State eight building blocks of TQM
 State 10 steps of TQM
 What is TPM and explain TPM awards
 14 points of Deming’s philosophy
 14 points of Crosby’s philosophy
 Explain eight Principles of TQM
 What is Juran’s Triology
 Question Bank
 What are Quality circles and how do they
differ from Kaizen?
 What are 5 ‘S’ practices?
 What is BPR? Why is it necessary to
initiate this before we start ISO 9000?
 What is COQ? How do we bring down the
COQ?
 What is six sigma?
 Question Bank
 Explain Malcolm Baldrige award
 what are the Techniques used in TQM
 State the factors affecting product and
service Quality seperately
 Improve Profit
 Increase Sales Volume (Increase Market
share)
 Increase Sale Price
 Reduce Purchase cost of Input
 Reduce cost of production
 Improve quality (Reduce cost of Quality)
 Improve productivity
 Productivity and Quality Mgmt
Differentiate
 Production and Productivity
 Inspection and Quality Control
 System, Procedures and Processes
 Quality Control and Total Quality Mgmt
(TQM)
 TQM and Six Sigma
 Productivity- Definition
(Productivity is a ratio)

The amount of output per unit of input

(labor, equipment, and capital).

• Number of products / No. of hours taken to produce them

• Revenue generated by employee / Salary of employee

 System, Procedure and Process
 System is a set of interactive elements
corresponding to the given inputs to produce
the desired output

 Procedure is a set of activities which have to

follow in a systematic format without taking any
shortcuts

 Process is a set of activities/operations which

follow the procedures and systems with right RM
and intermittent checking to avoid any lapses.
 Process
 Process is a summation of activities such
as operations, inspection, delays, storage,
transportation and everything else that
happens between the beginning and the
end of the process
 Six Sigma
 Six Sigma- (The statistical Representation) is a
process of Quality measurement, which helps the
organization in the improvement of their Quality
 Six Sigma is a systematical process which helps
the organization to eleminate the defects which
prevent it from reaching perfection
 Six Sigma ensures the QC, TQM and Zero Defect
 When a process attains six sigma level it means
that there is no room for the product to fail
 Six sigma is professionalizing of the Quality
Management functions
Sigma % Good PPM/DP Cost of Quality as % of
Level MO Sales

2 95.45 45500 Over 40%

3 99.73 2700 25 - 40%

4 99.9937 63 15 - 25%

5 99.999943 0.57 5 - 15%

6 99.999999 0.002 Less than 1%

8
 What is TQM ?
 Total quality management (TQM) is a
business management strategy aimed at
embedding awareness of quality in all
organizational processes. TQM has been
widely used in manufacturing, education,
hospitals, call centers, government, and
service industries, as well as NASA space
and science programs
 What is TQM ?

 Total Quality Management (TQM) is a

structured system for meeting and
exceeding customer needs and
expectations by creating organization-wide
participation in the planning and
implementation of improvement
(continuous and breakthrough) processes
 Total Quality Management
 Total: Involve all functions to have customer focus and
give reliable delivery of product+service in line with
customer’s expectations at lowest cost

 Quality: Design and manufacture the product+service

to achieve zero defect and 100% customer satisfaction

 Management: Lead to achieve quality for customers by

communicating the vision, mission and values to all
employees and creating continuous improvement culture
 Techniques for TQM
 Total Employee Involvement :
Kaizen, SGA, Quality Circles, KBP/BPR,
customer satisfaction surveys, Training

 Just in Time/ Waste Elemination :

TPM, Zero Defect, supplier Partnership

 Total Quality Control: TQC is applicable to all

functions, use of 7 QC Tools, use of SPC/SQC and PDCA,
ISO 9000, Six Sigma, ISO 14000, understand the
processes critical to quality (CTQ)
 Why TQM ?
In a global marketplace a major characteristic that will
distinguish those organizations that are successful
will be the quality of leadership, management,
employees, work processes, product and service.

This means that products must not only meet

customer’s community needs for value, they must be
provided in a continuously improving, timely, cost-
effective, innovative, and productive manner
 Principles of TQM
1. Customer-Focused Organisation
2. Leadership
3. Involvement of People
4. Process Approach
5. System Approach to Management
6. Continual Improvement
7. Factual Approach to Decision Making
8. Mutually Beneficial Supplier Relationships
 1.Customer Focussed Organization
 Understand customer needs and expectations
for products, delivery, price, dependability, etc.
 Ensure a balanced approach among customers
and other stake holders’ (owners, people,
suppliers, local communities and society at
large) needs and expectations.
 Communicate these needs and expectations
throughout the organisation.
 Measure customer satisfaction & act on results,
 Manage customer relationships
 2. Leadership
 Be proactive and lead by example.
 Understand and respond to changes in the external environment.
 Consider the needs of all stake holders including customers,
owners, people, suppliers, local communities and society at large.
 Establish a clear vision of the organisation's future.
 Establish shared values and ethical role models at all levels of the
organisation.
 Build trust and eliminate fear.
 Provide people with the required resources and freedom to act
with responsibility and accountability.
 Inspire, encourage and recognise people's contributions.
 Promote open and honest communication.
 Educate, train and coach people.
 Set challenging goals and targets, and
 Implement a strategy to achieve these goals and targets.
 3. Involvement of People
 Accept ownership and responsibility to solve problems.
 Actively seek opportunities to make improvements,
and enhance competencies, knowledge and
experience.
 Freely share knowledge & experience in teams.
 Focus on the creation of value for customers.
 Be innovative in furthering the organisation’s
objectives.
 Improve the way of representing the organisation to
customers, local communities and society at large.
 Help people derive satisfaction from their work, and
 Make people enthusiastic and proud to be part of the
organisation.
 4. Process Approach
 Define the process to achieve the desired result.
 Identify and measure the inputs and outputs of the process.
 Identify the interfaces of the process with the functions of the
organisation.
 Evaluate possible risks, consequences and impacts of processes on
customers, suppliers and other stake holders of the process.
 Establish clear responsibility, authority, and accountability for
managing the process.
 Identify internal and external customers, suppliers and other stake
holders of the process
 When designing processes, consider process steps, activities, flows,
control measures, training needs, equipment, methods, information,
materials and other resources to achieve the desired result.
5. System Approach to Management
 Define the system by identifying or developing
the processes that affect a given objective.
 Structure the system to achieve the objective
in the most efficient way.
 Understand the interdependencies among the
processes of the system.
 Continually improve the system through
measurement and evaluation, and
 Estimate the resource requirements and
establish resource constraints prior to action.
 6. Continual Improvements
 Make continual improvement of products, processes and systems
an objective for every individual in the organisation.
 Apply the basic improvement concepts of incremental
improvement and breakthrough improvement.
 Use periodic assessments against established criteria of
excellence to identify areas for potential improvement.
 Continually improve the efficiency and effectiveness of all
processes.
 Promote prevention based activities.
 Provide every member of the organisation with appropriate
education and training, on the methods and tools of continual
improvement such as the Plan-Do-Check-Act cycle , problem
solving , process re-engineering, and process innovation.
 Establish measures and goals to guide and track
improvements,and
 Recognise improvements.
 7. Factual Approach to Decision
Making
 Take measurements and collect data and
information relevant to the objective.
 Ensure that the data and information are
sufficiently accurate, reliable and accessible.
 Analyse the data and information using valid
methods.
 Understand the value of appropriate statistical
techniques, and
 Make decisions and take action based on the
results of logical analysis balanced with
experience and intuition.
 8. Supplier Relationship
 Identify and select key suppliers.
 Establish supplier relationships that balance short-term
gains with long-term considerations for the
organisation and society at large.
 Create clear and open communications.
 Initiate joint development and improvement of
products and processes.
 Jointly establish a clear understanding of customers'
needs.
 Share information and future plans, and
 Recognise supplier improvements and achievements.
 Ten Steps to TQM
1. Set company strategy, values and culture
2. Identify the customers and understand their
expectations
3. Define their specific needs
4. Build the quality in the process from the
begining(advocate prevention & not correction)
5. Reduce chronic waste
6. Reduce variation
7. All levels of the organization must be involved/trained
8. Continually improve the quality of product or service
9. Use structured methodology for process improvement
10. Use a balanced approach
 Objectives of TQM

 100% Customer Satisfaction

 Zero Defects

 Continuous Improvement Culture

 Eight Building Blocks of TQM
1. Ethics
2. Integrity
3. Trust
4. Training
5. Teamwork
6. Leadership
7. Recognition
8. Communication
 Benefits of TQM
 Ability to be more competitive
 Improved market share
 Cost reduction
 Increased flexibility and responsiveness
 Simplified processes
 Improved communications
 More satisfaction among the workforce
 5 ‘S’ Practices
1. Seiri : separate out needed items
2. Seiton: organize workplace for faster
retrieval (fix place for each item)
3. Seison: sweeping/cleaning around work
area
4. Seiketsu: keep everything clean for
constant state of readiness
5. Shitsuke: Everyone must understand and
practice the rules in the plant
 Maintenance
 Maintenance is done on the equipments to
keep them running as efficiently as
possible for as long as possible
 There are three types of maintenance :
1. Breakdown maintenance (unplanned)
2. Preventive maintenance (planned)
3. Predictive maintenance ( High tech
analysis )
 Total Productive Maintenance
 TPM , developed in Japan, is a scientific
company wide approach in which every
employee is concerned about the maintenance ,
quality and efficiency of the equipment
 The objective is to reduce the whole life cost of
equipment through more efficient maintenance
management and to integrate the maintenance
and manufacturing functions
 Teamwork is a key element of TPM
 Analysis of each equipment focuses on reduction
of manufacturing losses and costs
 Total Productive Maintenance
 TPM aims to achieve improvements in
cost, quality and speed (productivity)
 This is equivalent to TQM (reduces
variations due to automation)
 TPM addresses six big losses
reduced yield process defects
reduced speed idling and minor stoppages
setup and adjustment equipment failure
 TPM Awards
 Effective 1971, the factories which
displayed remarkable achievement in plant
maintenance were given this award
 Effective 1989, the factories which have
achieved company-wide efficiency &
productivity by adopting company-wide
TPM are given this award
 Five Pillars of TPM

1. Quality Integration
(Process capability- Cpk)
2. New Equipment Management (design)
3. Autonomous Maintenance (military like)
4. Planned Maintenance (reduce unplanned)
5. Equipment Improvement (productivity)
 Seven Deadly Disasters
Dr Deming- TQM
1. Lack of consistency of purpose
2. Emphasis on short term profits
3. MBO and performance Appraisal system
4. Job hopping by managers
5. Using only visible data for decision
making
6. Excessive medical costs
7. Excessive cost of liability
 Deming Application Prize
 For organizations or divisions of
organizations that manage their business
autonomously
 Given to organizations or divisions of
organizations that have achieved
distinctive performance improvement
through the application of TQM in a
designated year
 Deming Wheel
 Sales <<<<<<<< < Production
I I
 Research Design
I I
 Design Research
I I
 Production>>>>>>>>>>>SALES
 Dr Deming ( 1900-1993)
14 points
1. Create and publish statement of the aims
and purpose for improvements
2. Adopt new philosophies
3. Do not depend on inspection for quality
4. End the practice of contract to lowest bidder
5. Continuously improve the system of production
and service
6. Institute training on the job
7. Teach and institute leadership
 Dr Deming’s 14 points
8. Drive out fear, create trust and climate for
innovation
9. Direct all efforts to aims and purposes of co.
10. Estimate targets for workforce
11. Eliminate quotas and institute methods of
improvements
12. Eliminate annual rating and merit system
13. Encourage education and self improvement
14. Action to accomplish the transformation
 Crosby’s 14 steps (Born 1926)
1. Commitment of top Management
2. Quality improvement teams
3. Establish Quality measurement
4. Estimate Cost of quality
5. Spread Quality Awareness
6. Identify opportunities for improvement
7. Committee for Zero defect monitoring
 Crosby’s 14 steps (contd)
8. Employee education
9. Zero defect day
10. Goal setting
11. Error cause removal
12. Recognition
13. Quality councils
14. Do it all again
 Crosby’s 4 Absolutes of QM
 Crosby’s philosophy:
“Do it right the first time”
The Four absolutes are:
 Quality – conformance to requirements
 System for causing quality- prevention
 Performance standard- zero defect
 Measurement of quality- price of non-
conformance (COQ)
 Juran’s Philosophy(1904-2008)
 Quality = fitness for use by the customer

 Juran’s Triology: (Quality oriented

Principles)
1. Quality Planning
2. Quality Control
3. Quality improvement
 Steps of Quality Control
 Setting Quality standards

 Apraising conformance to these standards

 Acting when standards are exceeded

 Planning for improvements in standards

 Quality Assurance
 Definition :
For the customer to buy the
product/service with confidence and use it
for a long time with ease and satisfaction,
the manufacturer has to give assurance
and also give evidence that the product
will not fail
 Steps of Quality Assurance
 Develop quality plans
 Carryout vendor quality surveys
 Carryout product quality audits
 Review disposition of non-conforming
products
 Initiate customers’ future needs
 Co-ordinate document control activity
 Upgrade inspection records
 Concepts of Quality
 Variation is the main reason of poor Quality
 There is no such thing as Quality Problem, it is
an opportunity to improve
 There is nothing like economics of Quality,it is
cheaper to do the job right , the first time
 The only performance measurement is the cost
of Quality
 The only Performance standard is
“ZERO DEFECT”
 Cost Of Quality
 Prevention Cost…….investment cost
 Appraisal Cost……Inspection & Analysis
 Internal Cost……Scrap and rework
 External Cost……Customer Complaints
Product Recalls
and
Returns
Cost of Quality
 Contribution of Quality Costs
 Prevention costs…..High throughout
 Appraisal costs……low/same throughout
 Internal costs……..initially high, gradually
declining
 External costs……initially high, sharply

decline (stability period)

 Total Cost……….sharply decline as the
product becomes stable
 Economic Balance of
Quality and Costs
 As we keep improving the Quality, the
total Cost of Quality keeps coming down
 However if we improve the Quality beyond
a certain point, the prevention cost will
sharply go up and the total cost will also
go up
 Hence we have to find an economic
Balance of Cost and Quality (six sigma)
 Audit of COQ
 Set an annual target of COQ
 Monitor the actual expenses of COQ
 All departments to control COQ
 Evaluate COQ every month/Quarter
 Compute COQ as a percentage of Sales
 At the start of TQM activity COQ and COQ as %
of Sales is high, but gradually this comes down if
TQM is implemented in the scientific manner
 Revise the annual target of COQ downwards
year after year
 The Customer Delight
Customer awareness = keeping customer’s
requirements in mind

These requirements are: Right Quality,

Right Quantity, Right time & Right Cost

The customer delight is far beyond customer

satisfaction
e.g: Taxi keeping newspapers, Telephone
directory, Railway Timetable, etc
 Repeat Orders
Why customers Quit ?

 1% die natural death

 3% relocate
 5% move away due to friends contact
 9% due to competitive reasons
 14% poor quality of product
 68% indifferent attitude towards customers
 Definition Of TQM
 Old Definition of Quality:
Products and services are provided exactly
as per the specifications already laid down

 New definition of TQM:

Products and services that totally satisfy
the customer needs and expectations in
every respect, on a continuous basis
 Techniques of TQM
 Total Employee Involvement :
Kaizen, SGA, Quality Circles, KBP/BPR

 Just in Time/ Waste Elemination:

No waiting, material comes in the factory and directly
goes for assembly instead of storing in stores

 Total Quality Control: TQC is applicable to all

functions, use of 7 QC Tools, use of SPC/SQC and
PDCA
 Implementation Process of
TQM
 Training : Team Leaders, Facilitators and other employees
 Decision Style : Democratic firm decision
 Vision : Long Term Dream
 Mission : Short term objectives to achieve vision
 Quality Policy : Culture to be followed
 TQM Team Structure : Team Leader, Facilitator
 Steering Committee : For Pain Areas
 Shared Leadership : Develop the company objectives
collectively
 Communication : Throughout the organisation
 Annual Reward Policy : Annual apraisals and recognition to
performers
 Elements of TQM
 Commitment by senior management and all employees
 Meeting customer requirements
 Reducing development cycle times
 Just In Time/Demand Flow Manufacturing
 Improvement teams
 Reducing product and service costs
 Systems to facilitate improvement
 Line Management ownership
 Employee involvement and empowerment
 Recognition and celebration
 Challenging quantified goals and benchmarking
 Focus on processes / improvement plans
 Specific incorporation in strategic planning
 Vision Statement
 Bill Gates:There will be a personal computer on
every desk running microsoft software
 Vision Statement should answer:
1. Why did I start this business
2. When I move on from this business, what do
I leave behind
3. What am I providing for my customers
beyond product/service
4. If my business could be everything I dreamed
how would it be
 Mission Statement
 Mission statement describes the WHAT of
your business, it states why your
organization is in business and what
you are hoping to achieve
 Components of Mission Statement:
1. The overall purpose of your business
2. What is your business: product/service
3. What is important for your business-
the values your business lives by
 Expectations from the Mission
Statement
 Mission draws on your belief statements
 Mission must be future oriented and
portray your organization as it will be
 Mission must focus on one common
purpose
 Mission must be specific to the
organization, not generic
 Mission statement must be short, two
sentences max
 Quality Systems
( Quality Mgmt systems)
 The quality of the product is checked to see
the variation
 The control in variation wrt the design
spec/dimension is aimed at
 More the variation, poorer the quality
 Less the variation better the quality
 The analysis of variations ( control charts)
give direction for the action to be taken to
control the variation
 Quality Management System
 Quality Plan (Quality Assurance Plan)
A Quality plan is a document specifying the
quality management system elements and the
resources to be applied in a specific case
Activities to be considered are:
Product spec,quality and delivery requirements,
how the product/service is created and
resources required,quality verification and
records to be kept to demonstrate conformity
 Road Map of Quality Plan
 Identify who the customers are
 Determine the needs of those customers
 Translate those needs into our language
 Develop a product that can respond to those
needs
 Optimise the product features so as to meet our
needs and customer’s needs
 Optimise the process
 Prove that the process can produce the product
under operating conditions
 Transfer the process to operation
 ISO 9000 Standards
 ISO 9000 is a series of International stds
 To be used by the cos. wanting to
implement in house quality systems
 These stds are developed by international
organization for standardization (ISO)
 These promote international trade by
providing one consistent set of
requirements recognized around the world
 ISO 9000 Certificate
 Any organization in any business field can make
application to the certifying agencies e.g. BVQI
for obtaining ISO 9000 certificate
 They guide the organization to make the quality
manual of inhouse procedures and systems
 Management representatives are appointed to
look after ISO requirements
 Any deviation is termed as NC and recorded in
NCR (non conformity report) which needs to be
resolved
 Then the certifying agency awards ISO 9000
certificate
 Quality Manual
This is an important document and covers the following
areas of business:

1. Management 8. Control of non

responsibility conforming products
2. Quality system 9. Storage, packing and
3. Contract review delivery
4. Purchasing 10. Quality records
5. Product identification 11. Internal quality
and traceability audits
6. Process control 12. Training
7. Inspection and test 13. Statistical
equipments techniques
 ISO 9000 Series
 ISO 9001 covers product design, Mfg,
marketing, installation and services

 ISO 9002 covers Mfg and Mktg

 ISO 9003 covers installation and testing

 ISO 14000
 ISO 14001-1996 is a part of Quality Management
system pertaining to environment management.
 All organizations have to control the impact of
their activities, products and services on the
environment
 Most countries have stringent norms for control
on pollution
 The company has to audit to assess their
performance and ensure that it is within limits
 This system needs to be integrated with overall
quality management system of the organization
 QS 9000
(Now known as TS 16949)
 QS 9000 issued in 1994 is the name given to the
Quality System Requirements of the automotive
industry which were developed by Chrysler, Ford
& General Motors and the companies having
QS-9000 are considered to have higher
standards and better quality products.
 QS-9000 helps companies to stay ahead of their
competition. It does this by filling gaps in the
quality systems that can cause problems
 QS 9000 tells current and potential customers
that the product has consistent quality and is
manufactured under controlled conditions.
 Business Process Re-engineering
(BPR)

BPR is a management approach aiming at

improvements by identifying and
implementing new ways of carrying out
work. Thus elevating efficiency and
effectiveness of the processes that exist
within and across the organization
 Steps of BPR
 Develop the business Vision and process
objectives such as cost reduction, time
reduction, output quality imrovement etc.
 Identify the business processes to be redesigned
(challenge old processes)
 Evaluate old processes to avoid repetition of old
mistakes
 Identify IT levers: awareness of IT capabilities
can influence BPR process
 Design and build new process
 Malcolm Baldrige Award
 This annual award was introduced in US
in 1987 to recognize US companies for
Business Excellence and Quality
achievement. The objectives were :
1. To promote awareness of Quality
2. To understand requirements for
Performance Excellence
3. Sharing of successful practices with
other companies
 Malcolm Baldrige Award
Important Roles:
1. Improve performance practices and
capabilities
2. Sharing of best practices
3. Serve as a working tool for managing
performance, planning, training and
assessment
4. Improvement of overall co. performance
 Malcolm Baldrige Award
Award examines the quality of the organization
in 7 categories: (100 marks each)
1. Leadership
2. Information and Analysis
3. Strategic Planning
4. Human Resource Development & mgmt
5. Process Management (Improvements)
6. Business Results (Improvements)
7. Customer Focus and Satisfaction
 Malcolm Baldrige Award
 Steps for Examination
1. Write the application with the overview of co ,
the vision and mission, strategic plans and
trends of improvements in last 5 years in all
areas of criteria (categories)
2. The application shall be assessed and marks
will be given to individual company
3. The site visits shall be made by the examiners
to verify the trends and practices
 Product and Service Quality
Factors affecting Product Quality
1. Men
2. Materials
3. Machines
4. Manufacturing conditions
5. Manufacturing process
6. Capability to invest money
7. Management commitment to Quality
8. Product design (Tangible and *Intangible)
9. After sales service (*Safety and Reliability)
 Product and Service Quality
Ten Dimensions of Service Quality

1. Quality 6. Security
2. Tangibility 7. Competence
3. Reliability 8. Courtesy
4. Responsiveness 9. Understanding
5. Communication 10. Access
Some examples of Service Quality
 Answer the phone
 Don’t overpromise
 Listen to your Customers
 Deal with Complaints
 Be helpful and knowledgeable
 Train the staff to be courteous
 Take the extra step
 Throw in something extra
 Service Quality
 Service quality has high level of
intangibility
 Most services are intangible as there are
performances and not objects
 Services are perishable , they can not be
inventoried, saved and resold later
 The actual performance of service differs
from provider to provider
 Quality Circles
 QC is a small group of employees working on
similar jobs, mostly at worker level to perform
quality control and improvement activities within
their workplace
 These groups work on continuous improvements
as a part of company wide activity
 This was started in Japan in 1962 in line with the
conviction of Ishikawa that the workers can
significantly contribute to improve quality and
productivity
 Japan attributes phenomenal growth in 1960-
1970 to QC
 Quality Circles
 Basic Objectives:
1. Wider contribution towards improvement
and development of the enterprise
2. Respecting humanity and building a
happy and cheerful workplace
3. Exploiting human capabilities fully and
drawing out infinite possibilities
 Quality Circles
Components of QC
1. Decide on the theme
2. Establish the goals
3. Clarify reasons and their importance
4. Access the current situation
5. Probe the causes and analyze them
6. Establish corrective measures
7. Implement the measures
8. Evaluate results
9. Standardize to prevent slipups
10. Reflection of the results
 Structure of Quality Circle
 Top management (monitor progress)
 Steering committee (Evaluate progress)
 Facilitator (eliminate hurdles)
 Leader and Dy Leader (guide members)
 Members (study cause and effect)
 Non members (give additional inputs)
 Sequence of TQM
 Operational Management
5 ‘S’
BPR
 Quality Management
QC ( Quality Circles)
ISO
TPM ( Total Productive Maintenance)
Six Sigma ( For Processes CTQ )
 Books For Reference
 Quality Mgmt Systems
Devendra Kumar Bhatt / Aparna Raj
 Productivity and Quality Mgmt
Shashikant D Aphale
Vipul Prakashan