Chapter 5 - Total Quality

Management

Mudassar Salman

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Learning Objectives
 Explain the meaning of TQM
 Identify features of the TQM philosophy
 Describe the four dimensions of Quality
 Identify the costs of Quality
 Identify tools used for solving Quality
problems
 Quality awards and Quality certifications
 Identify Quality leaders and their
contributions
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What is TQM?
 Meeting quality expectations as defined
by the customer

 Integrated organizational effort

designed to improve quality of
processes at every business level

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Defining Quality – 5 Ways
 Conformance to specifications
 Does product/service meet targets and tolerances defined
by designers?
 Fitness for use
 Evaluates performance for intended use
 Value for price paid
 Evaluation of usefulness vs. price paid
 Support services
 Quality of support after sale
 Psychological
 e.g. Ambiance, prestige, friendly staff

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Manufacturing Quality vs.
Service Quality
 Manufacturing quality focuses on
tangible product features
 Conformance, performance, reliability, features,
durability, serviceability
 Service organizations produce intangible
products that must be experienced
 Quality often defined by perceptional factors like
courtesy, friendliness of staff, promptness in
resolving complaints, atmosphere, waiting time,
consistency
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Dimensions of Quality for Manufacturing
vs. Service Organizations
 Manufacturing  Service
 Conformance to  Tangible factors
specifications  Consistency
 Performance  Responsiveness to
 Reliability customer needs
 Features  Courtesy /
 Durability friendliness
 Serviceability  Timeliness /
promptness
 Atmosphere

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Quality in Practice
 Motorola and GE attribute their success to
having one of the best quality management
programs in the world.
 Six-Sigma was implemented
 Levels of defects is reduced to 3.4 parts per
million
 Everyone is trained in quality improvement
principles and techniques
 Black-Belt – their full time job is to identify and
solve quality problems

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Cost of Quality
 Quality effects all aspects of the organization and have dramatic
cost implications
 Most obvious consequence of poor quality is dissatisfied
customers and eventual loss of business
 Prevention costs – cost of preparing and implementing a quality
plan
 Appraisal costs – cost of testing, evaluating and inspecting
quality
 Internal failure costs – cost of scrap, rework, and material
losses
 External failure costs – cost of failure at customer site, including
returns, repairs and recalls
 External failures can sometimes put a company out of business
almost overnight
 External failure costs tend to be particularly high for service
organizations
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Cost of Defects

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The Evolution of TQM
 Early 20th century – Quality meant inspection.
Reactive in nature
 1980s – Quality began to have strategic
meaning. Proactive in nature
 Successful companies understand that quality
provides a competitive advantage
 Put customer first, and define quality as
meeting or exceeding customers expectation
 Quality excellence has become a standard for
doing business

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Evolution of TQM – New Focus

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Quality Gurus
 Walter A. Shewhart (1920s & 1930s)
 Grandfather of quality control
 Contributed to understand the process of variability
 Developed concept of statistical control charts
 W. Edwards Deming (1940s & 1950s)
 Father of quality control
 Stressed management’s responsibility for quality
 Developed “14 points” to guide companies in quality
improvement
 Japanese established “Deming Prize” in his name
 15% of quality problems are actually due to worker error
 85% of quality problems are caused by systems and errors
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Quality Gurus – contd.
 Joseph M. Juran (1950s)
 Defined quality as “fitness for use”
 Developed concept of cost of quality
 Originated idea of quality triology
 Quality planning
 Quality control
 Quality improvement
 Armand V. Feigenbaum (1960s)
 Introduced the concept of total quality control
 Philip B. Crosby (1970s)
 Coined phrase “quality is free”
 Introduced concept of zero defects
 Developed the phrase “Do it right the first time”

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Quality Gurus – contd.
 Kaoru Ishikawa
 Developed cause-and-effect diagrams
 Identified concept of “internal customer”
 Introduced the concept of “quality circles”
 Genichi Taguchi
 Focused on product design quality
 Developed Taguchi loss function
 Costs of quality increase as a quadratic function as
conformance values move away from target
 Robust Design
 A design that results in a product that can perform over a
wide range of conditions

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Traditional view of the cost of
conformance

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Taguchi view of the cost of non-conformance –
The Taguchi loss function

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TQM Philosophy – What’s Different?
 TQM attempts to embed quality in every aspect of the
organization
 Focus on Customer
 Identify and meet customer needs
 Stay tuned to changing needs, e.g. fashion styles
 Continuous Improvement
 Continuous learning and problem solving, e.g. Kaizen, 6 sigma
 Quality at the Source
 Inspection vs. prevention & problem solving
 Employee Empowerment
 Empower all employees; external and internal customers
 Team approach, quality circle
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TQM Philosophy– What’s Different?
(continued)
 Understanding Quality Tools
 Ongoing training on analysis, assessment, and
correction, & implementation of quality tools
 Team Approach
 Teams formed around processes – 8 to 10 people
 Meet weekly to analyze and solve problems
 Benchmarking
 Studying practices at “best in class” companies
 Managing Supplier Quality
 Certifying suppliers vs. receiving inspection
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Four Dimensions of Quality
 Quality of design
 Determining which features to include in the final
design
 Quality of conformance to design
 Production processes are set up to meet design
specifications
 Ease of use
 Instructions, operation, maintenance, safety
 Post-sale service
 Responsiveness, rapid repair, p.m., spare parts 19
Cost of Quality – 4 Categories

 Early detection/prevention is less costly

 May be less by a factor of 10

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Ways of Improving Quality
 Plan-Do-Study-Act Cycle (PDSA)
 Also called the Deming Wheel after its originator
 Circular, never ending problem solving process

 Quality Function Deployment

 Used to translate customer preferences to design

 Seven Tools of Quality Control

 Tools typically taught to problem solving teams
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PDSA Details
 Plan
 Evaluate current process
 Collect procedures, data, identify problems
 Develop an improvement plan, performance
objectives
 Do
 Implement the plan – trial basis
 Study
 Collect data and evaluate against objectives
 Act
 Communicate the results from trial
 If successful, implement new process 22
PDSA (continued)

 Cycle is repeated
 After act phase, start planning and repeat process

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Quality Function Deployment
 A tool used to translate the preferences of the
customer into specific technical requirements
 QFD begins by identifying customer requirements,
coming from marketing department
 These requirements are numerically scored, based on
their importance, and scores are translated into
specific product characteristics
 Comparison of product is made with its competitors,
relative to identified characteristics
 Specific goals are set to address identified problems
 The resulting matrix looks like a picture of house and
is often called the “house of quality”

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QFD – Contd.
 Customer requirements
 Survey customers to find out what they
specifically need in our product
 Focus groups, telephonic interviews, directly talk to
customers
 Competitive Evaluation
 How our product compares to those of
competitors
 Evaluation scale is from one to five
 Higher the rating, the better

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QFD – Contd.
 Product Characteristics
 Specific product characteristics are on top of relationship
matrix
 The Relationship Matrix
 The strength of relationship between customer requirements
and product characteristics is shown in the relationship
matrix
 A negative relationship means that as we increase the
desirability of one variable, we decrease the desirability of
other
 A positive relationship means that as increase in desirability
of one variable is related to an increase in the desirability of
another

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QFD – Contd.
 The Trade-off Matrix
 The roof of house is put through trade-off matrix
 Shows how each product characteristics is related
to the others
 What trade-offs we need to make
 Setting Targets
 The bottom row of the house is the output of QFD
 These are specific, measurable product
characteristics that have been formulated from
general customer requirements

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 QFD Details
 Process used to ensure that the product meets customer
specifications

Voice of the
engineer

Voice Customer-based
of the benchmarks
customer

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 QFD - House of Quality
 Adding trade-offs, targets & developing product
specifications
Trade-offs

Technical
Targets Benchmarks
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Seven Problem Solving Tools
 Cause-and-Effect Diagrams
 Flowcharts
 Checklists
 Control Charts
 Scatter Diagrams
 Pareto Analysis
 Histograms
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Cause-and-Effect Diagrams
 Called Fishbone Diagram
 Focused on solving identified quality problem

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A general cause-and-effect
diagram

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Flowcharts
 Used to document the detailed steps in a
process
 Often the first step in Process Re-Engineering

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 Checklist
 Simple data check-off sheet designed to
identify type of quality problems at each work
station; per shift, per machine, per operator

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Control Charts
 Important tool used in Statistical Process
Control – Chapter 6
 The UCL and LCL are calculated limits used to
show when process is in or out of control

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Scatter Diagrams
 A graph that shows how two variables are
related to one another
 Data can be used in a regression analysis to
establish equation for the relationship

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Pareto Analysis
 Technique that displays the degree of importance for each
element
 Named after the 19th century Italian economist
 Often called the 80-20 Rule
 Principle is that quality problems are the result of only a few
problems e.g. 80% of the problems caused by 20% of causes

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Histograms
 A chart that shows the frequency distribution of
observed values of a variable like service time
at a bank drive-up window

 Displays whether the distribution is symmetrical

(normal) or skewed

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Reliability
 The probability that a product, service. Or part will perform, as
intended.
 No product is guaranteed with 100% certainty to function
properly
 High reliability is an important part of customer-oriented quality
 The reliability of a product is a direct function of the reliability of
its component parts.
 If all the parts in a product must work for the product to
function, then the reliability of the system is computed as
product of the reliabilities of the individual components:

Rs = (R1)(R2)(R3)……(Rn)
Where Rs = reliability of the product or system
R1…n = reliability of components 1 through n

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Reliability – contd.
 The more components a product has, the lower its
reliability
 The failure of certain products can be very critical.
 One way to increase product relaibility is to build
redundancy into product design in the form of
backup parts
 Redundancy is built into the system by placing
components in parallel.
 When one component fails, the other takes over
Rs = (Reliability of 1st component) +
{(reliability of 2nd component) x (probability of
needing 2nd component)}
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Process Management
 A quality product comes from a quality
process
 Quality at source
 The belief that it is best to uncover the source of
quality problems and eliminate it
 Managing Supplier quality
 The philosophy of TQM extends to concept of
quality suppliers and ensures that they engage in
the same quality practices
 If suppliers meet quality standards, materials do
not have to be inspected upon arrival

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 Quality Awards and
Standards
 Malcolm Baldrige National Quality
Award
 The Deming Prize
 ISO 9000 Certification
 ISO 14000 Standards

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MBNQA- What Is It?
 Award named after the former Secretary of
Commerce – Regan Administration
 Intended to reward and stimulate quality
initiatives
 Given to no more that two companies in each
of three categories; manufacturing, service,
and small business
 Past winners; FedEx, 3M, IBM, Ritz-Carlton
 Typical winners have scored around 700
points
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MBNQA Criterion
Categories Points
2. Leadership 120
3. Strategic Planning 85
4. Customer and Market Focus 85
5. Information and Analysis 90
6. Human Resource Focus 85
7. Process Management 85
8. Business Results 450
Total Points 1000
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The Deming Prize
 Given by the Union of Japanese Scientists and
Engineers since 1951
 Named after W. Edwards Deming who worked
to improve Japanese quality after WWII
 Not open to foreign companies until 1984
 Florida P & L was first US company winner

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ISO Standards
 ISO 9000 Standards:
 Certification developed by International
Organization for Standardization
 Set of internationally recognized quality standards
 Companies are periodically audited & certified
 ISO 9000:2000 QMS – Fundamentals and
Standards
 ISO 9001:2000 QMS – Requirements
 ISO 9004:2000 QMS - Guidelines for Performance
 More than 40,000 companies have been certified
 ISO 14000:
 Focuses on a company’s environmental
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responsibility
Why TQM Efforts Fail
 Lack of a genuine quality culture

 Lack of top management support and

commitment

 Over- and under-reliance on SPC

methods
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 Chapter 5 Highlights
 TQM focuses on serving the customer’s quality needs
 TQM uses continuous improvement, quality at the
source, employee empowerment, quality tools, teams,
benchmarking, and supplier certification
 Four dimensions: product/service design, conformance,
easy of use, post-sale support
 Quality costs; prevention, appraisal, internal & external
failures
 QFD and Seven Quality Tools used in managing quality
 The MBNQA, Deming Prize, and ISO Certification help
focus on quality improvement and excellence
 The seven Quality Gurus all made key contributions
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