OPEQUAL
Lesson 2: Total Quality Management
(Fampo. Kalaw. Santos)
Defining Quality
- “quality is a subjective term for which
each person has his or her own
definition”
- Definition of quality is dependent on
the people defining it
- There is no single, universal definition
of quality
Defining Quality – 5 ways
5 common definitions include:
1. Conformance to specifications
- Does product/service meet targets
and tolerances defined by designers?
2. Fitness for use
- Evaluates performance for intended
use
3. Value for price paid
- Evaluation of usefulness vs. price
paid
4. Support services
- Quality of support after sale
5. Psychological
- Ambiance, prestige, friendly staff
Defining Quality- Different Views
1. Customer’s View (more subjective)
- the quality of the design (look, feel,
function)
- product does what’s intended and
lasts
2. Producer’s View
- conformance to requirements
(Crosby)
- costs of quality (prevention, scrap,
warranty)
- increasing conformance raises
profit
3. Government’s View
- products should be safe
- not harmful to environment
Defining Quality
- Manufacturing Quality
o Manufacturing quality focuses on
tangible product features
o Conformance, performance,
reliability, features
- Service Quality
o Service organizations produce
intangible products that must be
experienced
o Quality often defined by
perceptional factors like courtesy,
friendliness, promptness, waiting
time, consistency
Quality then is simply meeting the
customer requirements.
Customer-Driven Quality
- Currently many companies define
quality as “Meeting or exceeding
customer expectations”
o Consumers
o External customers
o Internal customers
Note: ang pinagkaiba ng consumers sa
customers ay end-users ang consumers.
Defining TQM
- TQM is integration of all functions
and processes within an organization
in order to achieve continuous
improvement of the quality of goods
and services.
- The goal is customer satisfaction.
- It means thinking about quality in
terms of all functions of the enterprise
and is a start-to-finish process that
integrates interrelated functions at all
levels.
- The watchword for TQM is
“continuous improvement”.
Cost of Quality
- Quality affects all aspects of the
organization
- Quality has dramatic cost implications
of:
o Quality control costs
•Prevention costs
•Appraisal costs
o Quality failure costs
•Internal failure costs
•External failure costs
Prevention Costs: costs of preparing and
implementing a quality plan
Appraisal Costs: costs of testing,
evaluating and inspecting quality
Internal Failure Costs: costs of scrap,
rework and material losses
External Failure Costs: costs of failure at
customer site including returns, repairs
and recalls.
Early detection/prevention is less costly.
Evolution of TQM
History and Importance of Quality
- The Age of Craftsmanship:
o Skilled craftsmanship during
Middle Ages
- Early Twentieth Century:
o Scientific Management—early
1990s— Frederick Taylor: rise of
inspection and separate quality
departments
- Post World War II
o Dr. Joseph Juran and Dr. W.
Edwards Deming introduced
SQC to Japanese
o Culture of continuous
improvement
o Deming Prize
o Quality management in Japan
- U.S. Revolution
o Quality awareness in U.S.
manufacturing industry during
1980s
o Malcolm Baldrige National
Quality Award (1987)
o Quality in service industries,
government, health care, and
education
o Current challenge: keep progress
in quality management alive.

Lesson 3: TQM Philosophies
Leaders in the Quality Revolution
- W. Edwards Deming
- Joseph M. Juran
- Philip B. Crosby
- Armand V. Feigenbaum
- Kaoru Ishikawa
- Genichi Taguchi
W. Edwards Deming
- Quality is “uniformity and
dependability”
- Focus on SPC and statistical tools
- “14 Points” for management
- PDCA method
- 1900-1993
- Ph.D’s in Physics and Statistics
- Western Electric—Statistical
techniques
- DEMING PRIZE started by Union of
Scientists and Engineers in Japan
- In 1980, NBC broadcast a TV
program, and it led to his becoming an
overnight celebrity
- “out of the crisis” ---book
“I probably won’t even be remembered.”
“Well, maybe… as someone who spent
his life trying to keep America from
committing suicide.”
Deming Chain Reaction
Improve quality
Costs decrease
Productivity improves
Increase market share with better
quality and lower prices
Stay in business
Provide jobs and more jobs
Deming’s 14 Points
1. Management commitment
2. Learn the new philosophy.
3. Understand inspection.
4. End price tag decision.
5. Improve constantly.
6. Institute training.
7. Institute leadership.
8. Drive out fear.
9. Optimize team efforts.
10. Eliminate exhortations.
11. Eliminate quotas and M.B.O.
12. Remove barriers to pride in
workmanship.
13. Institute education.
14. Take action.
Deming’s System of Profound
Knowledge
- Appreciation for a System
o Most organizational processes are
cross-functional
o Parts of a system must work
together
o Every system must have a purpose
o Management must optimize the
system as a whole
- Understanding Variation
o Chief culprit of poor quality
o Many sources of uncontrollable
variation exist in any process
o Excessive variation results in
product failures, unhappy
customers, and unnecessary costs
- Theory of knowledge
o Management decisions should be
driven by facts, data and theories.
o Experience alone does not
establish a theory, it only
describes.
o But, good theories supported by
data can establish a cause-and-
effect relationship that can be
used for prediction.
- Psychology
o People are motivated intrinsically
and extrinsically
o No leader can manage well
without understanding these
factors
Joseph Juran
- Quality is “fitness for use”
- Pareto Principle
- Cost of Quality
- General management approach as
well as statistics
- 1904-2008
- “Quality Control Handbook” –
1951
- Employees at different levels of
an organization speak in different
“languages”
- Quality as “fitness for use” and
integrity
Juran’s Quality Trilogy
(1951- Quality Control Handbook)
- Quality planning
- Quality control
- Quality improvement
Fitness for use
- Quality of design: market research,
product concept, and design
specifications
- Quality of conformance: technology,
manpower and management
- Availability: reliability,
maintainability, logistical support
- Field service quality: promptness,
competence
Joseph M. Juran’s 10 Steps to Quality
Improvement
1. Build awareness of the need and
opportunity for improvement.
2. Set goals for improvement.
3. Organize to reach the goals (establish
a quality council, identify problems,
select projects, appoint teams,
designate facilitators).
4. Provide training.
5. Carry out projects to solve problems.
6. Report progress.
7. Give recognition.
8. Communicate results.
9. Keep score.
10. Maintain momentum by making
annual improvement part of the
regular systems and processes of the
company.
Philip B. Crosby
- Known for concepts of “Quality is
free” and “Zero Defects”
- His quality improvement is based on
his absolutes of quality
“Quality is free. It’s not a gift, but it is
free. What costs money are the unquality
things -- all the actions that involve not
doing jobs right the first time.”
Absolutes of Quality Management:
- Quality means conformance to
requirements
- Problems are functional in nature
- There is no optimum level of defects
- Cost of quality is the only useful
measurement
- Zero defects is the only performance
standard
Definition – conformance to
requirements.
System – prevention.
Performance standard – zero defects.
Measurement – price of non-
conformance
Basic Elements of Improvement
- Determination
- Education
- Implementation
Comparison of American TQM Gurus
A.V. Feigenbaum
- “TOTAL QUALITY CONTROL” in his
book published in 1951 ---Japanese used
this to set up “Company wide quality
control”
Three Steps to Quality
- Quality Leadership, with a strong
focus on planning
- Modern Quality Technology,
involving the entire work force
- Organizational Commitment,
supported by continuous training and
motivation
Kaoru Ishikawa
- quality guru in Japan
- Quality Circles
- Tools such as Fishbone Charts etc.
- Instrumental in developing Japanese
quality strategy
- Influenced participative approaches
involving all workers
- Advocated the use of simple visual
tools and statistical techniques.
Genichi Taguchi
- Pioneered a new perspective on
quality based on the economic value
of being on target and reducing
variation and dispelling the traditional
view of conformance to
specifications:
- Tolerances – allowable variations
from the target.
TQM Philosophy
- TQM Focuses on identifying quality
problem root causes
- Encompasses the entire organization
- Involves the technical as well as
people
- Relies on basic concepts of:
o Customer focus
 Identify and meet
customer needs
 Stay tuned to changing
needs, e.g. fashion styles
o Continuous improvement
 Continuous learning and
problem solving, e.g.
Kaizen, 6 sigma
 Plan-Do-Study-Act
(PDSA)
 Kaizen describes the
ongoing process of
unending improvement
 TQM and zero defects
also used to describe
continuous improvement
Six Sigma
1. Defines the project’s purpose,
scope, and outputs, identifies the
required process information
keeping in mind the customer’s
definition of quality
2. Measures the process and collects
data
3. Analyzes the data ensuring
repeatability and reproducibility
4. Improves by modifying or
redesigning existing processes and
procedures
5. Controls the new process to make
sure performance levels are
maintained
Six Sigma
- Two meanings
o Statistical definition of a process
that is 99.9997% capable, 3.4
defects per million opportunities
(DPMO)
o A program designed to reduce
defects, lower costs, save time, and
improve customer satisfaction
- A comprehensive system for
achieving and sustaining business
success
Ways of Improving Quality
- Plan-Do-Study-Act Cycle (PDSA)
o Also called the Deming Wheel
after originator
o Circular, never ending problem
solving process
- Seven Tools of Quality Control
o Tools typically taught to problem
solving teams
- Quality Function Deployment
o Used to translate customer
preferences to design
PDSA Details
- Plan
o Evaluate current process
o Collect procedures, data, identify
problems
o Develop an improvement plan,
performance objectives
- Do
o Implement the plan – trial basis
- Study
o Collect data and evaluate against
objectives
- Act
o Communicate the results from
trial
o If successful, implement new
process
Cycle is repeated – After act phase,
start planning and repeat process
o Employee empowerment
 Getting employees involved
in product and process
improvements
 85% of quality problems
are due to process and
material
 Techniques
1. Build communication
networks that include
employees
2. Develop open, supportive
supervisors
3. Move responsibility to
employees
4. Build a high-morale
organization
5. Create formal team
structures
o Use of quality tools - Established in 1988 by the U.S. and Health Care Criteria have slightly
 Ongoing training on analysis, government different nomenclature.]
assessment, and correction, - Designed to promote TQM practices • The building blocks, or Categories,
& implementation tools - Recent winners include are essential -- performance in the
 Studying practices at “best in - Lockheed Martin Missiles and Fire Baldrige categories is the cost of entry
class” companies Control, MESA Products Inc., North -- but excellence in the linkages will
o Product design- Quality Mississippi Health Services, City of be the mark of competitive leadership.
Function Deployment Irving, Concordia Publishing House, The arrows point to excellence.
 Critical to ensure product Henry Ford Health System, • The umbrella over strategy and action
design meets customer MEDRAD, Nestlé Purina PetCare plans:
expectations Co., Montgomery County Public • It is the set of customer and market
 Useful tool for translating Schools focused company-level requirements.
customer specifications into Baldrige Criteria • These are derived from short- and
technical requirements is - Applicants are evaluated on: long-term planning.
Quality Function • They are the things that must be done
Deployment (QFD) well for the strategy to succeed.
 QFD encompasses • The action plans “bring the strategy to
Customer requirements life.”
Competitive evaluation • They guide overall resource decisions.
Product characteristics • They drive the alignment of measures
Relationship matrix for all work units to ensure customer
Trade-off matrix satisfaction and market success.
Setting Targets The Baldrige Framework – • The system:
 Process used to ensure that A Systems Perspective • The leadership triad -- leadership,
the product meets customer strategic planning, customer & market
specifications 2 focus -- emphasizes the importance of
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 critical linkage for company success --
and shows the role leaders must play
in driving results improvement.
• Information and analysis are critical to
a fact-based system; they are the
foundation for the performance
management system.
1. Leadership (120 pts.)
- Addresses Senior Leaders’ Roles,
Governance, and Citizenship
- examines how senior leaders address
organizational values, directions, and
performance expectations, as well as a
focus on customers and other
stakeholders, empowerment, innovation,
and learning. Also included are the
organization’s governance and how public
and community responsibilities are
addressed. In 2003, organizational
governance and leadership’s responsibility
for the organization’s legal and ethical
behavior have an increased focus.
1.1 Organizational Leadership (70
pts.)
- focuses on how senior leaders guide
the organization, its governance system,
and how senior leaders review
organizational performance
- (Areas to Address: the central role of
senior leaders in setting values and
directions, creating and balancing value
for customers and other stakeholders in
their performance expectations: the roles
of senior leaders and the governing body
in creating an environment fostering and
requiring legal and ethical behavior;
organizational reviews by senior leaders
that cover all areas of performance,
including how well the organization is
performing currently and how well it is
moving toward the future)
1.2 Social Responsibility (50 pts.)
- examines how an organization
fulfills its public responsibilities, ensures
ethical behavior, and practices good
citizenship. It also asks you to identify
your key processes and measures for
monitoring ethical behavior throughout
your organization
2. Strategic Planning (85 pts.)
- Addresses Strategic and Action
Planning and Deployment of Plans
- addresses how the organization
develops strategic objectives and action
plans. Also examined are how the chosen
strategic objectives and action plans are
deployed and how progress is measured.
In 2003, there is an added focus on
continuity and how changes will be
sustained.
2.1 Strategy Development (40 pts.)
- examines how an organization sets
its strategic objectives, including how it
enhances its competitive position, overall
performance, and future successes. (Areas
to Address: information on how key
strategic objectives balance the needs of
key stakeholders and key challenges
identified in the Organizational Profile)
2.2 Strategy Deployment (45 pts.)
- examines how an organization
converts its strategic objectives into action
plans to accomplish objectives and how it
assesses progress relative to these action
plans.
3. Customer and Market Focus (85
pts.)
- Addresses How an Organization
Seeks Knowledge, Satisfaction, and
Loyalty of Customers
- addresses how your organization
determines requirements, expectations,
and preferences of customers and markets.
It also examines how an organization
builds relationships with customers and
determines the key factors that lead to
customer acquisition, satisfaction, loyalty
and retention, and to business expansion.
In 2003, references to building customer
loyalty and exceeding customer
expectations are added.
3.1 Customer and Market
Knowledge (40 pts.)
- examines your organization’s key
processes for gaining knowledge about its
customers and markets. The aim is to offer
relevant products and services, to keep
pace with marketplace changes, and to
develop new opportunities.
3.2 Customer Relationships and
Satisfaction (45 pts.)
- examines your organization’s
processes for building relationships to
acquire, satisfy, and retain customers; to
increase customer loyalty; and to develop
new opportunities. How your organization
determines customer satisfaction is also
included.
4. Measurement, Analysis, and
Knowledge Management (90 pts.)
- Addresses Analysis and
Management of Data, Information, and
Knowledge Assets
- examines how your organization
selects, gathers, analyzes, manages, and
improves its data, information, and
knowledge assets. In 2003, there is an
enhanced emphasis on innovation and
organizational and industry changes.
There is also a new Area to Address on
the management of organizational
knowledge.
4.1 Measurement and Analysis of
Organizational Performance (45 pts.)
- covers how your organization
measures, analyzes, aligns, and improves
its performance data and information at all
levels and in all parts of the organization
4.2 Information and Knowledge
Management (45 pts.)
- addresses the availability and quality
of data and information for employees,
suppliers and partners, and customers;
Also included is how your organization
builds and manages its knowledge assets.
5. Human Resource Focus (85 pts.)
- Addresses Key Human Resource
Practices
- addresses how your organization’s
work systems and employee learning and
motivation enable employees to develop
their full potential in alignment with the
organization’s overall objectives. Also
examined are the organization’s efforts to
build and maintain a work environment
and employee support climate conducive
to performance excellence and to personal
and organizational growth. In 2003, there
is an enhanced emphasis on employee
motivation and career development.
5.1 Work Systems (35 pts.)
- examines how an organization’s
work and jobs enable employees and the
organization to achieve high performance.
This includes compensation, career
progression, and related workforce
practices.
5.2 Employee Learning and
Motivation (25 pts.)
- examines how education, training,
and career development support the
achievement of overall objectives;
contribute to high performance; and build
employee knowledge, skills, and
capabilities.
5.3 Employee Well-Being and
Satisfaction (25 pts.)
- examines how your organization’s
work environment and employee support
climate contribute to satisfaction and
motivation of all employees while
recognizing their diverse needs.
6. Process Management (85 pts.)
- Addresses Key Work Processes and
Process Management
- is the focal point within the Criteria
for examining all key product, service, and
business processes. In 2003, there is a new
Item addressing all the processes your
organization considers important for
creating value for itself, customers, and
other key stakeholders.
6.1 Value Creation Processes (50
pts.)
- addresses the processes for creating
customer value and achieving business
success and growth. These are the
processes most important to “running the
business” and achieving a sustainable
competitive advantage.
6.2 Support Processes (35 pts.)
- examines your organization’s key
processes that support the value creation
processes.
7. Business Results (450 pts.)
- Addresses Progress on Results—
Including Levels, Trends, and
Comparative Data
- addresses your organization’s
performance and improvement in six key
business areas. Also examined are
performance levels relative to those of
competitors. New in 2003 is an Item on
governance and social responsibility to
encourage ongoing monitoring of these
important areas.
7.1 Customer-Focused Results (75
pts.)
- examines customer satisfaction and
customer-perceived value.
7.2 Product and Service Results (75
pts.)
- examines the organization’s key
product and service performance results.
7.3 Financial and Market Results
(75 pts.)
- examines key financial and
marketplace performance results. (These
might include aggregate measures of
financial return and/or economic value
and measures of marketplace
performance, such as market
share/position, business growth, and new
markets entered.)
7.4 Human Resource Results (75
pts.)
- examines results relating to work
system performance and employee
learning, development, well-being, and
satisfaction.
7.5 Organizational Effectiveness
Results (75 pts.)
- examines key operational
performance results that contribute to the
achievement of organizational
effectiveness. (These might include
productivity, cycle time, and
supplier/partner performance.)
7.6 Governance and Social
Responsibility (75 pts.)
- examines your organization’s key
governance and social responsibility
results, including evidence of fiscal
accountability, ethical behavior, legal
compliance, and organizational
citizenship.
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
The purpose of the Deming Prize was to
recognize those who excelled in quality
control and as a way of driving quality
control. It was also established to thank
Dr. Deming for his accomplishments and
impact in the Japanese industry.
Deming Prize concentrates on:
- Policy
- Organization and Operations
o How smoothly an organization
controls communication, effective
use of employees, and clear
authority
- Collections and Use of Information
o Information flow, processing, and
documentation
- Analysis
o Being able to find problems
within, and how the correct such
problems. And again,
docmentation.
- Planning for future
o Long term plans of improvement
that were looked over carefully
and planned for the current
situations of the firm
- Education and training
o Looks at an organization’s way of
dealing with the training of
employees. What plans are made
and how it is implemented.
- Quality assurance
o How products are services are
designed. How is the quality of
the good or service and the safety.
Will consumers be content?
- Quality effects
o Documentation of how the plans
for quality improvement has
affected the firm
- Standardization
o Setting a standard and how
standards are controlled and
monitored
- Control
o How they use uality control, what
they use, and level of control at
the firm
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 responsibility
ISO 9000 Characteristics
• Leadership demonstrates commitment
to customer requirements.
• Policy and measurable quality
objectives are set and renewed.
• Processes are identified, analyzed, and
managed.
• Customer satisfaction is measured.
• Data are collected, analyzed, and used.
• System effectiveness is continually
improved.
ISO Process Approach
-Company must identify and manage
numerous linked activities.
-An activity uses resources, is managed in
order to enable the transformation of
inputs into outputs.
The ISO 9000 family
-ISO 9001 is the standard that gives the
requirements for a quality management
system.
-ISO 9001:2008 is the latest, improved
version.
-It is the only standard in the ISO 9000
family that can be used for
certification.
-There are 16 other standards in the family
that can help an organization on
specific aspects such as performance
improvement, auditing, training…
The ISO 14000 family
- ISO 14001 is the standard that gives
the requirements for an environmental
management system.
- ISO 14001:2004 is the latest,
improved version.
- It is the only standard in the ISO
14000 family that can be used for
certification.
- The ISO 14000 family includes 21
other standards that can help an
organization specific aspects such as
auditing, environmental labelling, life
cycle analysis…
Benefits of ISO 9001 and ISO 14001
- International, expert consensus on
state-of-the-art practices for quality
and environmental management.
- Common language for dealing with
customers and suppliers worldwide in
B2B.
- Increase efficiency and effectiveness.
- Model for continual improvement.
- Model for satisfying customers and
other stakeholders.
- Build quality into products and
services from design onwards.
- Address environmental concerns of
customers and public, and comply
with government regulations.
- Integrate with global economy.
- Sustainable business
- Unifying base for industry sectors
- Qualify suppliers for global supply
chains
- Technical support for regulations
- Transfer of good practice to
developing countries
- Tools for new economic players
- Regional integration
- Facilitate rise of services
Environmental Management System
- An environmental management
system helps organizations identify,
manage, monitor and control their
environmental issues in a holistic
manner.
- Like other ISO management systems,
it uses a High-Level Structure. This
means it can be integrated easily into
any existing ISO management system.
- It also includes the need for continual
improvement of an organization’s
systems and approach to
environmental concerns.
Lesson 5: Quality Tools
TQM Tools
- Tools for Generating Ideas
 o Check Sheet
o Scatter Diagram
o Cause-and-Effect Diagram
- Tools to Organize the Data
o Pareto Chart
o Flowchart (Process Diagram)
- Tools for Identifying Problems
o Histogram
o Statistical Process Control Chart
1. Check Sheet
- An organized method of recording
data
-Simple data check-off sheet designed to
identify type of quality problems at
each work station; per shift, per
machine, per operator
2. Scatter Diagram
-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
3. Cause –and-Effect
- A tool that identifies process
elements (causes) that might
affect an outcome
- Called Fishbone diagram
4. Pareto Chart
-Technique that displays the degree of
importance for each element
-Named after the 19th century Italian
economist; often called the 8020 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
5. Flowchart (Process Diagram)
-A chart that describes the steps in a
process
-The UCL and LCL are calculated limits
used to show when process is in or out
of control
MRI Flowchart
1. Physician schedules MRI
2. Patient taken to MRI
3. Patient signs in
4. Patient is prepped
5. Technician carries out MRI
6. Technician inspects film
7. If unsatisfactory, repeat
8. Patient taken back to room
9. MRI read by radiologist
10. MRI report transferred to physician
11. Patient and physician discuss
(Note: feeling ko hindi kasali ‘tong MRI
Flowchart??? Hahaha example lang ata ‘to jusq)
6. Histogram
-A distribution showing the frequency of
occurrences of a variable
7. Statistical Process Control Chart
-A chart with time on the horizontal axis to
plot values of a statistic