Module 6:
Although
Forecasting Methods
1. APPROACHES TO FORECASTING
There are two general approaches to forecasting:
qualitative and quantitative. Qualitative methods
consist mainly of subjective inputs, which often defy
precise numerical description. Quantitative methods
involve either the projection of historical data or the
development of associative models that attempt to
utilize causal (explanatory) variables to make
a forecast. Qualitative techniques permit inclusion of
soft information (e.g., human factors, personal
opinions, hunches) in the forecasting process. Those
factors are often omitted or downplayed when
quantitative techniques are used because they are
difficult or impossible to quantify. Quantitative
techniques consist mainly of analyzing objective, or
hard data. They usually avoid personal biases that
sometimes contaminate qualitative methods. In
practice, either approach or a combination of both
approaches might be used to develop a forecast.
2. FORECASTING TECHNIQUES
2.1. Forecasts Based on Judgement and Opinion
a. Executive Opinions
A small group of upper-level managers (e.g., in
marketing, operations, and finance) may meet
and collectively develop a forecast. This approach is
often used as a part of long-range planning and new
product development. It has the advantage of
bringing together the considerable knowledge and
talents of various managers. However, there is the risk
that the view of one person will prevail, and the
possibility that diffusing responsibility for the forecast
over the entire group may result in less pressure to
produce a good forecast.
b. Salesforce Opinions
Members of the sales staff or the customer service staff
are often good sources of information because of their
direct contact with consumers. They are often aware of
any plans the customers may be considering for the
future. There are, however, several drawbacks to using
salesforce opinions. One is that staff members may be
unable to distinguish between what customers would
like to do and what they actually will do. Another is
that these people are sometimes overly influenced by
recent experiences.
c. Consumer Surveys
Because it is the consumers who ultimately determine
demand, it seems natural to solicit input from them. In
some instances, every customer or potential customer
can be contacted. However, usually there are too many
customers or there is no way to identify all potential
customers. The obvious advantage of consumer
surveys is that they can tap information that might not
be available elsewhere. Surveys can be expensive and
time-consuming. In addition, even under the best
conditions, surveys of the general public must contend
with the possibility of irrational behavior patterns.
2.2. Forecast Based on Time-Series Data
A time series is a time-ordered sequence of
observations taken at regular intervals (e.g.,
hourly, daily, weekly, monthly, quarterly, annually).
The data may be measurements of demand,
earnings, profits, shipments, accidents, output,
precipitation, productivity, or the consumer price
index. Forecasting techniques based on time-series
data are made on the assumption that future values of
the series can be estimated from past values.
no attempt is made to identify variables that influence
the series, these methods are widely used, often with
quite satisfactory results.Analysis of time-series data
requires the analyst to identify the underlying behavior
of the series. This can often be accomplished by
merely plotting the data and visually examining the
plot. One or more patterns might appear: trends,
seasonal variations, cycles, or variations around
an average. In addition, there will be random and
perhaps irregular variations. These behaviors
can be described as follows:
a. Trend refers to a long-term upward or downward
movement in the data.
b. Seasonality refers to short-term, fairly regular
variations generally related to factors such
as the calendar or time of day.
c. Cycles are wavelike variations of more than one
year’s duration. These are often related
to a variety of economic, political, and even
agricultural conditions.
d. Irregular variations are due to unusual
circumstances such as severe weather
conditions, strikes, or a major change in a product or
service.
e. Random variations are residual variations that
remain after all other behaviors have
been accounted for.
2.2.1. Naïve Methods
It is a simple but widely used approach to forecasting
is the naive approach. A naive forecast uses a single
previous value of a time series as the basis of a forecast.
The naive approach can be used with a stable series
(variations around an average), with seasonal
variations, or with trend. Although at first glance the
naive approach may appear too simplistic, it is
nonetheless a legitimate forecasting tool. Consider the
advantages: It has virtually no cost, it is quick and
easy to prepare because data analysis is non-existent,
and it is easily understandable. The main objection to
this method is its inability to provide highly accurate
forecasts.
2.2.2. Techniques for Averaging
Averaging techniques smooth variations in the data.
Ideally, it would be desirable to completely remove
any randomness from the data and leave only “real”
variations, such as changes in the demand. As a
practical matter, however, it is usually impossible to
distinguish between these two kinds of variations, so
the best one can hope for is that the small variations
are random and the large variations are “real.”
Averaging techniques smooth fluctuations in a time
series because the individual highs
and lows in the data offset each other when they are
combined into an average. A forecast based
on an average thus tends to exhibit less variability than
the original data.
Three techniques for averaging are described as
follows;
2.2.2.1. Moving Average
One weakness of the naive method is that the forecast
just traces the actual data, with a lag of one period; it
does not smooth at all. But by expanding the amount of
historical data a forecast is based on, this difficulty can
be overcome. A moving average forecast uses a
number of the most recent actual data values in
generating a forecast.
2.2.2.2. Weighted Moving Average
A weighted moving average is similar to a moving
average, except that it typically assigns more weight to
the most recent values in a time series.
Exponential smoothing is a sophisticated weighted
averaging method that is still relatively easy to use and
understand. Each new forecast is based on the previous
forecast plus a percentage of the difference between
that forecast and the actual value of the series at that
point. That is: Next forecast = Previous Forecast + a
(Actual - Previous forecast).Where (Actual - Previous
forecast) represents the forecast error and a is a
percentage of the error..
The smoothing constant represents a percentage of a
forecast error. Each new forecast is
equal to the previous forecast plus a percentage of the
previous error.
3. Choosing Forecasting Techniques
Many different kinds of forecasting techniques are
available, and no single technique works best in every
situation. When selecting a technique, the manager or
analyst must take a number of factors into
consideration. The two most important factors are cost
and accuracy. How much money is budgeted for
generating the forecast? What are the possible costs of
errors, and what are the benefits that might accrue from
an accurate forecast? Generally speaking, the higher
the accuracy, the higher the cost, so it is important to
weigh cost–accuracy trade-offs carefully. The best
forecast is not necessarily the most accurate or the least
costly; rather, it is some combination of accuracy and
cost deemed best by management. Other factors to
consider in selecting a forecasting technique
include the availability of historical data; the
availability of computer software; and the time
needed to gather and analyze data and to prepare the
forecast.
4. Using Forecast information
A manager can take a reactive or a proactive approach
to a forecast. A reactive approach views forecasts as
probable future demand, and a manager reacts to meet
that demand (e.g., adjusts production rates, inventories,
the workforce). Conversely, a proactive approach
seeks to actively influence demand (e.g., by means of
advertising, pricing, or product/service changes).
Generally speaking, a proactive approach requires
either an explanatory model (e.g., regression) or a
subjective assessment of the influence on demand. A
manager might make two forecasts: one to predict what
will happen under the status quo and a second one
based on a “what if” approach, if the results of the
status quo forecast are unacceptable.
MODULE 7:
Understanding Quality
1. Definition of Quality term
Quality is sometimes defined as “meeting the
requirements of the customer.”; The term quality
assurance describes any systematic process for
ensuring quality during the successive steps in
developing a product or service. ISO 9000 is a
standard for ensuring that a Company’s quality
assurance system follows best industry practices.
Quality in business, engineering and manufacturing
has a pragmatic interpretation as the non-inferiority
or superiority of something; it is also defined as
“fitness for purpose”. Consumers may focus on
the specification quality of a product/service, or how
it compares to competitors in the marketplace
There are five aspects of quality in a business
context:
a. Producing - providing something.
b. Checking - confirming that something has been
done correctly.
c. Quality Control - controlling a process to ensure
that the outcomes are predictable.
d. Quality Management – directing an organization
so that it optimizes its performance through analysis
and improvement.
e. Quality Assurance – obtaining confidence that a
product or service will be satisfactory. (Normally
performed by a purchaser)
Quality has many meanings – many of them are
subjective, such as the term “excellent” or
“outstanding” quality. In the quality management
field, quality has a more specific meaning.
“According to ISO 9001:2008, quality is defined as
“the degree to which a set of inherent characteristics
fulfills requirements”. The very favorable
experience of the client of a business when they
have received a good or service that significantly
surpasses what they had initially anticipated. A
marketing department can use instances of customer
delight to a company’s advantage by requesting
referrals and obtaining testimonials from delighted
customers that can help attract new customers.
2. Definition of Quality Assurance
Quality assurance refers to the processes and
procedures that systematically monitor different
aspects of a service, process or facility to detect,
correct and ensure that quality standards are being
met.
a. Assurance: The act of giving confidence, the
state of being certain or the act of making
certain.
b. Quality Assurance: The planned and systematic
activities implemented in a quality
system so that quality requirements for a product or
service will be fulfilled.
c. Control: An evaluation to indicate needed
corrective responses; the act of guiding a
process in which variability is attributable to a
constant system of chance causes.
d. Quality Control: The observation techniques and
activities used to fulfil requirements
for quality.
3. Process Control
Process control refers to the methods that are used
to control process variables when
manufacturing a product. For example, factors such
as the proportion of one ingredient to
another, the temperature of the materials, how well
the ingredients are mixed, and the pressure
under which the materials are held can significantly
impact the quality of an end product.
Manufacturers control the production process for
three reasons:
a. Reduce variability
b. Increase efficiency
c. Ensure safety
3. What is Total Productive Maintenance?
Total productive maintenance (TPM) is the
systematic execution of maintenance by all
employees through small group activities.
Analyzing the three words of T, P, M we have
 Total – all-encompassing maintenance and
production individuals working together.
Productive – production of goods and services
that meet or exceed customers’ expectations.
Maintenance - keeping equipment and plant in
as good as better than the original condition at all
times.
5. What is Total Quality Management?
TQM is a set of systematic activities carried out by
the entire organization to effectively and efficiently
achieve company objectives so as to provide
products and services with a level of quality that
satisfies customers, at the appropriate time and price.
TQM – Definition “Explanation of key terms”
a. Systematic activities – Planned, strong
leadership, Mid and long term vision, strategies
and policies
b. Entire organization – everyone at all levels,
across functions
c. Effective and efficient – achieve planned results
with least resources
d. Quality – usefulness, reliability, safety
A scientific, systematic, companywide activity “in
which a company is devoted to customers through
its products and services.
Focuses on customer satisfaction – the only
guarantee for long term survival assured
“quality” in every process is the objective of TQM.
6. Quality Control Process
A system for maintaining desired standards in a
product or process by inspecting samples
of the product. Maintenance of standards of quality
of manufactured goods. Quality is the key
element in every stage of the production process
from raw materials to finished product. Every
manufacturer is faced with the problem if
maintenance of the quality of his product. The term
“Quality Control” is used to coordinate all those
activities which are directed for defining
controlling and maintaining quality.
6.1. Eight Elements of Quality Control Process
Quality Control is systematic control by
management of the variables in the manufacturing
process that affect goodness of the end product.
Quality control may be defined as that technique or
group of techniques of the industrial management by
means of which products of uniform acceptable
quality are manufactured.
To be successful implementing TQM, an
organization must concentrate on the eight key
elements:
a. Ethics. Management draws up a business code of
ethics to which all personnel should adhere.
Sometimes an external company is contracted to
help produce a document.
b. Integrity. Clients expect to find integrity in an
organisation. Integrity encompasses morals, values,
fairness, honesty and sincerity. If somebody makes a
mistake, they should feel comfortable in admitting
their error.
c. Trust. TQM cannot work without trust. It is
essential for both the clients and the individual
participants at all levels of the company. When
workers are trusted to make decisions, they start to
take pride in the organisation for which they work.
d. Training. Workers can only be highly productive
when they receive appropriate training. Training can
focus on areas such as interpersonal skills, working
in a team, problem solving or performance analysis.
Training should be on-going and given as the need
arises.
e. Teamwork. The Total in TQM refers to the total
involvement of an organization’s staff. People
working in a team are more likely to make creative
suggestions than those working in isolation.
f. Leadership. Leadership does not only refer to top
management. In the case of TQM leadership is
found at all levels. Workers need to be guided by
leaders with a clear vision of the company’s goals.
g. Communication. Communication is the vital link
between all of the organization’s elements.
Information needs to be shared regularly and
constantly. Communication takes place in three
directions: downwards from top management to
employees; upwards where workers provide
management; and sideways where communication
crosses over between different departments and to
external suppliers and customers.
h. Recognition. Individuals and teams should have
their efforts, ideas and achievements recognized.
Recognition increases self-esteem and this, in turn,
increases productivity. Recognition should come as
soon as possible after the act that is being
recognized.
6.2. Key role of process management
a. Establishment of the quality standards which are
acceptable to the customer and
economical for the manufacturing operations to
maintain.
b. Location of flaws in the raw materials or in the
processing of that material which
will cause trouble at subsequent operations.
c. To analyze the trend and extent of quality
deviation in a part or product during
manufacturing process.
d. Determination of the cause of such deviation
where it is not due to chance variables.
e. Taking the necessary corrective steps to keep the
quality of the product from dropping
below the tolerance limits.
f. To segregate defective goods
7. Basic Principles of TQM
a. Focus on customer (internal and external). The
customer is usually viewed as the one who
purchases the product produced by the company.
These customers are referred to as external
customers. However, there are customers who are
part of the process. These customers are referred to
as internal customers. These needs must be
translated into specifications that can be met or
exceeded on a consistent basis.
b. Involvement of the entire organization. When a
job is rejected or the customer requests a price
reduction or even worse if the customer goes to your
competitor for new or remake work, it is never
because the job is defective in every way possible
but because some specific defect (or defects) is not
acceptable to the customer. Any one department can
do a bad or good job and it does not matter; it is the
entire job that is accepted or rejected. TQM is
putting together all the small elements so that the
entire job is excellent and the customer is satisfied.
c. Team Effort. Teams must be trained in how to
function, and they must be given the tools needed to
work together effectively. Members must be able to
offer suggestions and resolve particular problems in
a timely and cost-effective manner. Teams cannot
be set up without being given the proper time to
train, time allocations for results, and financial
support to sustain their efforts.
d. Empowering Employees. The empowerment goal
is to improve quality, productivity, and service. To
empower the work force means more than listening
to requests for changes in materials, working
procedures, equipment, training, communication
systems, and other areas that will assist the
employee in doing the job more effectively.
Empowerment means encouraging and training the
work force to take responsibility for making
decisions relating to quality, productivity, and
service to the customer.
e. Process improvement. Process improvement
requires a mind-set for change. Process
improvement requires that you understand each step
in the total operation of your organization and how
these steps are interconnected. Processes involving
more than one person should be done by the entire
group involved in that particular process. It is
necessary to first determine what is being done
presently before working on process improvement
steps.
f. Benchmark for Process Improvement.
Benchmarking is the process of measuring
your company’s performance in each function and
comparing that level of performance with the level
of performance achieved by successful leaders.
There are three types of benchmarking:
Internal benchmarking,
Competitive benchmarking
Generic (world-class) benchmarking
g. Partnering with Suppliers and Customers.
Partnering means working together for the common
good. When companies purchase their materials and
supplies by price alone, the ultimate cost may far
and away exceed choosing suppliers for their service,
quality, and price. These are the suppliers that will
suggest new and different materials and procedures
and will offer an overall more intimate working
relationship. What is true of supplier partnerships is
also true of customer partnerships. To maintain
customer partnerships requires that you have an
intimate knowledge of the business needs of your
customer.
h. Re-engineering the Organization. Re-engineering
is radical change, while process improvement is
incremental in nature.
MODULE 8:
Quality Management Gurus and Their
Key Contributions
1. The Gurus
Guru means a “respected teacher”, “spiritual leader”,
“good person”, arise person who in his field has not
only made a great contribution and innovation, but
also a large-scale revolution. People who have
established themselves and profiled philosophical
trend in quality, are the gurus of quality.
Below are the persons behind the quality
management tools and theories applied by different
organizations today.
1.1. Walter Shewhart. Walter Shewhart was a
genuine pioneer in the field of quality control, and
he became known as the “father of statistical
quality control.” He developed control charts for
analyzing the output of processes to determine when
corrective action was necessary.
1.2. W. Edwards Deming. Deming compiled a
famous list of 14 points he believed were the
prescription needed to achieve quality in an
organization. His message was that the cause of
inefficiency and poor quality is the system, not the
employees. Deming felt that it was management’s
responsibility to correct the system to achieve the
desired results. In addition to the 14 points, Deming
stressed the need to reduce variation in output
(deviation from a standard), which can be
accomplished by distinguishing between special
causes of variation (i.e., correctable) and common
causes of variation
1.3. Joseph M. Juran. Juran viewed quality as
fitness-for-use. He also believed that roughly 80
percent of quality defects are management
controllable; thus, management has the
responsibility to correct this deficiency. He
described quality management in terms of a trilogy
consisting of quality planning, quality control, and
quality improvement. Juran is credited as one of the
first to measure the cost of quality, and he
demonstrated the potential for increased profits that
would result if the costs of poor quality could be
reduced.
1.4. Armand Feigenbaum. Feigenbaum was
instrumental in advancing the “cost of
nonconformance” approach as a reason for
management to commit to quality. He recognized
that quality was not simply a collection of tools and
techniques, but a “total field.” According to
Feigenbaum, it is the customer who defines quality.
1.5. Philip B. Crosby. Crosby developed the
concept of zero defects and popularized the phrase
“Do it right the first time.” He stressed prevention,
and he argued against the idea that “there will
always be some level of defectives.”
1.6. Kaoru Ishikawa. Among his key contributions
were the development of the cause-and-effect
diagram (also known as a fishbone diagram) for
problem solving and the implementation of quality
circles, which involve workers in quality
improvement. He was the first quality expert to call
attention to the internal customer —the next person
in the process, the next operation, within the
organization.
1.7. Genichi Taguchi. Taguchi is best known for
the Taguchi loss function, which involves a formula
for determining the cost of poor quality. The idea is
that the deviation of a part from a standard causes a
loss, and the combined effect of deviations of all
parts from their standards can be large, even though
each individual deviation is small.
1.8. Taiichi Ohno and Shigeo Shingo. Taiichi
Ohno and Shigeo Shingo both developed the
philosophy and methods of kaizen, a Japanese term
for continuous improvement (defined more fully
later in this chapter), at Toyota. Continuous
improvement is one of the hallmarks of successful
quality management.
2. Quality Tools
The Seven Basic Tools of Quality is a designation
given to a fixed set of graphical
techniques identified as being most helpful
in troubleshooting issues related to quality.
2.1. Cause and Effect Diagram
One analysis tool is the Cause-and-Effect (or
Fishbone) diagram. These are also called
Ishikawa diagrams because Kaoru Ishikawa
developed them in 1943. They are called
fishbone diagrams since they resemble one with the
long spine and various connecting branches. The
fishbone chart organizes and displays the
relationships between different causes for the effect
that is being examined. This chart helps organize the
brainstorming process. The major categories of
causes are put on major branches connecting to the
backbone, and various sub-causes are attached to the
branches. A tree-like structure results, showing the
many facets of the problem. The method for using
this chart is to put the problem to be solved at the
head, then fill in the major branches. People,
procedures, equipment and materials are commonly
identified causes.
2.2. Check Sheet
A check sheet is a sheet or form used to record data.
It is one of the simplest method for collecting data
and determining trends. The recording can be used
to determine the occurrence of events such as non-
conformity. It is a way of collecting and classifying
data so that it can be easily presented or analyzed.It
is particularly useful at the start of a problem-
solving process for data gathering. It can also be
used for monitoring performance once change has
been implemented.
2.3. Flow Diagram
Flow diagrams or charts (also known as Process
map) are used to assist in systemically breaking
down the organizational process into a step by step
picture of each component. Symbols are used to
indicate activities, decisions, beginning and ending
points and the flow that the process takes. After a
process has been identified for improvement and
given high priority, it should then be broken down
into specific steps and put on paper in a flowchart.
2.4. Pareto Analysis
Pareto analysis is developed around the basic
concept that 80% of a specific effect is due to 20%
of the cause (80-20 rule). The Pareto chart can be
used to display categories of problems graphically
so they can be properly prioritized.There are often
many aspects of a process or system that can be
improved, such as the number of defective products,
time allocation, or cost savings. A Pareto chart or
diagram indicates which problem to tackle first by
showing the proportion of the total problem that
each of the smaller problems comprise. This is
based on the Pareto principle: 20% of the sources
cause 80% of the problem.
A Pareto chart is a vertical bar graph displaying rank
in descending order of importance for the categories
of problems, defects or opportunities. Generally,
you gain more by working on the problem identified
by the tallest bar than trying to deal with the smaller.
2.5. Histogram
Histogram is used for illustrating the frequency and
the extent in the context of two variables. Histogram
is a chart with columns. This represents the
distribution by mean. If the histogram is normal, the
graph takes the shape of a bell curve.The histogram
helps you analyze what is going on in the process
and helps show the capability of a process, whether
the data is falling inside the bell-shaped curve and
within specifications.
2.6. Run Chart
Run charts visually display the variation in a process
over time. The run chart displays an average line
taken from the data and will have data points and
lines connecting them. In this manner the user can
readily see how each data point varies from the
average.Run charts can also be used by companies
to plot events over time. Some of these areas
include sales calls per month, completed jobs per
week, estimates per week, and customer
complaints.
2.7. Control Chart
Control charts typically display the limits that
statistical variability can explain as normal. If your
process is performing within these limits, it is said
to be in control; if not, it is out of control.Control
chart is the best tool for monitoring the performance
of a process. These types of charts can be used for
monitoring any processes related to function of the
organization. These charts allow you to identify the
following conditions related to the process that has
been monitored.
*Stability of the process
* Predictability of the process
*Identification of common cause of variation
*Special conditions where the monitoring party
needs to react
MODULE 9:
TQM Framework, Obstacles and
Criticisms
1. The 4 P’s and 3 C’s of TQM
These ‘four Ps’ form the basis of a simple model for
TQM and provide the ‘hard management necessities’
to take organizations successfully into the twenty-
first century. From the early TQM frameworks,
however, we must not underestimate the importance
of the three Cs – Culture, Communication and
Commitment.
a. Planning – the development and deployment of
policies and strategies; setting up appropriate
partnerships and resources; and designing in quality
b. Performance – establishing a performance
measure framework – a ‘balanced scorecard’
for the organization; carrying out self-assessment,
audits, reviews and benchmarking.
c. Processes – understanding, management, design
and redesign; quality management systems;
continuous improvement.
d. People – managing the human resources; culture
change; teamwork; communications; innovation and
learning.
2. The Quality Policy
A sound quality policy, together with the
organization and facilities to put it into effect, is a
fundamental requirement, if an organization is to
fully implement TQM. Every organization should
develop and state its policy on quality, together with
arrangements for its implementation. The content of
the policy should be made known to all employees
The preparation and implementation of a
properly thought out quality policy, together with
continuous monitoring, make for smoother
production or service operation, minimize errors and
reduce waste. Management should be dedicated to
the regular improvement of quality, not simply a
one-step improvement to an acceptable plateau.
These ideas can be set out in a quality policy that
requires top management to:
a. Identify the end customer’s needs (including
perception).
b. Assess the ability of the organization to meet
these needs economically.
c. Ensure that any bought-in materials meet the
required standards of performance and
efficiency.
d. Ensure that subcontractors or suppliers share your
values and process goals.
e. Concentrate on the prevention rather than
detection philosophy.
f. Educate and train for quality improvement and
ensure that your subcontractors do so
as well.
g. Measure customer satisfaction at all levels, the
end customer as well as customer
satisfaction between the links of the supply chain.
3. The Quality Management System Design and
ISO 9000
The quality management system should apply to and
interact with all processes in the organization. It
begins with the identification of the customer
requirements and ends with their satisfaction, at
every transaction interface. ISO 9000 deals with the
fundamentals of quality management systems,
including the eight management principles on
which the family of standards is based.
ISO 9001 is defined as the international standard
that specifies requirements for a quality
management system (QMS). It is the most popular
standard in the ISO 9000 series and the only
standard in the series to which organizations can
certify.
ISO 9001 was first published in 1987 by
the International Organization for Standardization
(ISO), an international agency composed of the
national standards bodies of more than 160 countries.
The current version of ISO 9001 was released in
September 2015.
ISO 9001: 2015 applies to any organization,
regardless of size or industry. Organizations of all
types and sizes find that using the ISO 9001
standard helps them:
Organize processes
Improve the efficiency of processes
Continually improve
ISO 9001 helps organizations ensure their customers
consistently receive high quality products and
services, which in turn brings many benefits,
including satisfied customers, management, and
employees.
4. Communicating the Quality Message
The people in most organizations fall into one of
four ‘audience’ groups, each with particular general
attitudes towards TQM:
a. Senior managers, who should see TQM as an
opportunity, both for the organization and
themselves.
b. Middle managers, who may see TQM as another
burden without any benefits, and may
perceive a vested interest in the status quo.
c. Supervisors (first-line or junior managers), who
may see TQM as another ‘flavour of the period’ or
campaign, and who may respond by trying to keep
heads down so that it will pass over.
d. Other employees, who may not care, so long as
they still have jobs and get paid, though these
people must be the custodians of the delivery of
quality to the customer and own that responsibility.
Communication and training can be a powerful
stimulus to personal development at the
workplace, as well as achieving improvements for
the organization. This may be useful in the
selection of the appropriate method(s) of
communication, the principal ones being:
a. Verbal communication either between individuals
or groups, using direct or indirect
methods, such as public address and other
broadcasting systems and recordings.
b. Written communication in the form of notices,
bulletins, information sheets, reports,
e-mail and recommendations.
c. Visual communication such as posters, films,
video, internet/intranet, exhibitions,
demonstrations, displays and other promotional
features. Some of these also call for
verbal and written communication.
. Example, through the way people conduct
themselves and adhere to established working
codes and procedures, through their effectiveness as
communicators and ability to ‘sell’
good practices.
5. Phases on TQM Implementation
Jablonski offers a five-phase guideline for
implementing total quality management:
preparation, planning, assessment, implementation,
and diversification. Each phase is designed
to be executed as part of a long-term goal of
continually increasing quality and productivity.
a. Preparation—During preparation, management
decides whether or not to pursue a TQM program.
They undergo initial training, identify needs for
outside consultants, develop a specific vision and
goals, draft a corporate policy, commit the necessary
resources, and communicate the goals throughout
the organization.
b. Planning—In the planning stage, a detailed plan
of implementation is drafted (including budget and
schedule), the infrastructure that will support the
program is established, and the resources necessary
to begin the plan are earmarked and secured.
c. Assessment—This stage emphasizes a thorough
self-assessment—with input from customers
/clients—of the qualities and characteristics of
individuals in the company, as well as the company
as a whole.
d. Implementation—At this point, the organization
can already begin to determine its return on its
investment in TQM. It is during this phase that
support personnel are chosen and trained, and
managers and the work force are trained. Training
entails raising workers; awareness of exactly what
TQM involves and how it can help them and the
company. It also explains each worker;s role in the
program and explains what is expected of all the
workers.
e. Diversification—In this stage, managers utilize
their TQM experiences and successes to
bring groups outside the organization (suppliers,
distributors, and other companies have
impact the business’s overall health) into the quality
process. Diversification activities include training,
rewarding, and supporting embraced by the
organization’s TQM initiatives.
6. Obstacles to Implementing TQM
Companies have had varying success in
implementing TQM. Some have been quite
successful, but others have struggled. Part of the
difficulty may be with the process by which it is
implemented rather than with the principles of TQM.
Among the factors cited in the literature are
the following:
a. Lack of a companywide definition of quality:
Efforts aren’t coordinated; people are working at
cross-purposes, addressing different issues, and
using different measures of success.
b. Lack of a strategic plan for change: Without such
a plan the chance of success is lessened and the need
to address strategic implications of change is
ignored.
c. Lack of a customer focus: Without a customer
focus, there is a risk of customer dissatisfaction.
d. Poor intra-organizational communication: The left
hand doesn’t know what the right hand is doing;
frustration, waste, and confusion ensue.
e. Lack of employee empowerment: Not
empowering employees gives the impression of
not trusting employees to fix problems, adds red
tape, and delays solutions.
f. View of quality as a “quick fix”: Quality needs to
be a long-term, continuing effort.
g. Emphasis on short-term financial results: “Duct-
tape” solutions often treat symptoms; spend a little
now—a lot more later.
h. Inordinate presence of internal politics and “turf”
issues: These can sap the energy of
an organization and derail the best of ideas.
i. Lack of strong motivation: Managers need to
make sure employees are motivated.
j. Lack of time to devote to quality initiatives: Don’t
add more work without adding
additional resources.
k. Lack of leadership: Managers need to be leaders.
7. Criticisms of TQM
TQM programs are touted as a way for companies to
improve their competitiveness, which is a very
worthwhile objective. Nonetheless, TQM programs
are not without criticism.
The following are some of the major criticisms:
a. Overzealous advocates may pursue TQM
programs blindly, focusing attention on
quality even though other priorities may be more
important (e.g., responding quickly to a competitor’s
advances).
b. Programs may not be linked to the strategies of
the organization in a meaningful way.
c. Quality-related decisions may not be tied to
market performance. For instance, customer
satisfaction may be emphasized to the extent that its
cost far exceeds any direct or indirect benefit of
doing so
d. Failure to carefully plan a program before
embarking on it can lead to false starts,
employee confusion, and meaningless results.
e. Organizations sometimes pursue continuous
improvement (i.e., incremental
improvement) when dramatic improvement is
needed.
f. Quality efforts may not be tied to results.
MODULE 10:
TQM Problem Solving & Process
Improvement Methods
1. The Plan-Do-Study-Act Cycle
The plan-do-study-act (PDSA) cycle, also referred
to as either the Shewhart cycle or the Deming wheel,
is the conceptual basis for problem-solving activities.
a. Plan. Begin by studying the current process.
Document that process. Then collect data on the
process or problem. Next, analyze the data and
develop a plan for improvement.
Specify measures for evaluating the plan.
b. Do. Implement the plan, on a small scale if
possible. Document any changes made during this
phase. Collect data systematically for evaluation.
c. Study. Evaluate the data collection during the do
phase. Check how closely the results match the
original goals of the plan phase.
d. Act. If the results are successful, standardize the
new method and communicate the new method to all
people associated with the process. Implement
training for the new method.
2. KAIZEN (or Continuous Improvement)
Japanese term for a gradual approach to ever higher
standards in quality enhancement and waste
reduction, through small but continual
improvements involving everyone from the chief
executive to the lowest level workers. Kaizen, or
‘Continuous Improvement’ is a policy of constantly
introducing small incremental changes in a business
in order to improve quality and/or efficiency.
Kaizen can be roughly translated from Japanese to
mean”good change”; The philosophy behind kaizen
is often credited to Dr. W. Edwards Deming. Dr.
Deming was invited by Japanese industrial leaders
and engineers to help rebuild Japan after World War
II.
2.1. Five Elements of KAIZEN
a. Teamwork
b. Personal discipline
c. Improved morale
d. Quality circles
e. Suggestions for improvement
2.2. Key Features of KAIZEN
a. Improvements are based on many, small changes
rather than the radical changes that
might arise from Research and Development
b. As the ideas come from the workers themselves,
they are less likely to be radically
different, and therefore easier to implement
c. Small improvements are less likely to require
major capital investment than major
process changes
d. The ideas come from the talents of the existing
workforce, as opposed to using R&D,
consultants or equipment – any of which could be
very expensive
e. All employees should continually be seeking
ways to improve their own performance 6.
It helps encourage workers to take ownership for
their work, and can help reinforce team
working, thereby improving worker motivation
2.3. Benefits of KAIZEN
The goal of kaizen is to eliminate waste in the
process
Making job easier and safer
Making job more productive
Removing donkeywork from the job
Removing irritation from the job
Improving product quality and Saving time and
cost
3. Just in Time
An inventory strategy companies employ to increase
efficiency and decrease waste by receiving goods
only as they are needed in the production process,
thereby reducing inventory costs.
Just-in-time (JIT) is an inventory strategy that
strives to improve a business’s return on
investment by reducing in-process inventory and
associated carrying costs. This saves warehouse
space and costs. However, the complete mechanism
for making this work is often misunderstood.
Just-in-time manufacturing was a concept
introduced to the United States by the Ford
motor company.
3.1. Benefits of JIT
a. Reduced setup time.
b. The flow of goods from warehouse to shelves
improves.
c. Employees with multiple skills are used more
efficiently.
d. Production scheduling and work hour consistency
synchronized with demand.
e. Increased emphasis on supplier relationships.
f. Supplies come in at regular intervals throughout
the production day.
g. Minimizes storage space needed.
h. Smaller chance of inventory breaking/expiring.
4. 5S Process
The 5S Process, or simply “5S”, is a structured
program to systematically achieve total organization,
cleanliness, and standardization in the workplace. A
well-organized workplace results in a safer, more
efficient, and more productive operation. It boosts
the morale of the workers, promoting a sense of
pride in their work and ownership of their
responsibilities.
4.1. Seiri
The first step of the "5S" process, seiri,
refers to the act of throwing away all unwanted,
unnecessary, and unrelated materials in the
workplace. Even the number of necessary items in
the workplace must be kept to its absolute minimum.
Because of seiri, simplification of tasks, effective
use of space, and careful purchase of items follow.
4.2. Seiton
Seiton, or orderliness, is all about efficiency. This
step consists of putting everything in an assigned
place so that it can be accessed or retrieved quickly,
as well as returned in that same place quickly. The
correct place, position, or holder for every tool, item,
or material must be chosen carefully in relation to
how the work will be performed and who will use
them. Every single item must be allocated its own
place for safekeeping, and each location must
be labeled for easy identification of what it's
for.
4.3. Seiso
Seiso, the third step in “5S”, says that ‘everyone is a
janitor’; Seiso consists of cleaning up the workplace
and giving it a’shine’. Cleaning must be done by
everyone in the organization, from operators to
managers. No area should be left uncleaned.
Everyone should see the ‘workplace’ through the
eyes of a visitor - always thinking if it is clean
enough to make a good impression.
4.4. Seiketsu
The fourth step of “5S”, or seiketsu, more or less
translates to ‘standardized cleanup’;. It consists of
defining the standards by which personnel must
measure and maintain ‘cleanliness’;. Personnel must
therefore practice ‘seiketsu’; starting with their
personal tidiness. Visual management is an
important ingredient of seiketsu. Personnel are
trained to detect abnormalities using their five
senses and to correct such abnormalities
immediately.
4.5. Shitsuke
The last step of “5S”, Shitsuke, means ‘Discipline’
It denotes commitment to maintain orderliness and
to practice the first 4 S as a way of life. The
emphasis of shitsuke is elimination of bad habits
and constant practice of good ones. Once true
shitsuke is achieved, personnel voluntarily observe
cleanliness and orderliness at all times, without
having to be reminded by management.
5. Lean Management System
Lean management is an approach to managing an
organization that supports the concept of continuous
improvement, a long-term approach to work that
systematically seeks to achieve small, incremental
changes in processes in order to improve efficiency
and quality. The primary purpose of lean
management is to produce value for the customer
through the optimization of resources and create a
steady workflow based on real customer demands.
It seeks to eliminate any waste of time, effort or
money by identifying each step in a business
process and then revising or cutting out steps that do
not create value. The philosophy has its roots in
manufacturing.
5.1. Principles of Lean Management
Lean management incorporates five guiding
principles that are used by managers within
an organization as the guidelines to the lean
methodology. The five principles are:
a. Identifying value, the first step in lean
management, means finding the problem that
the customer needs solved and making the product
the solution. Specifically, the product must be the
part of the solution that the customer will readily
pay for. Any process or activity that does not add
value -- meaning it does not add usefulness,
importance or worth -- to the final product is
considered waste and should be eliminated.
b. Value stream mapping refers to the process of
mapping out the company’s workflow, including all
actions and people who contribute to the process of
creating and delivering the end product to the
consumer. Value stream mapping helps managers
visualize which processes are led by what teams and
identify the people responsible for measuring,
evaluating and improving the process. This
visualization helps managers determine which parts
of the system do not bring value to the workflow.
c. Creating a continuous workflow means ensuring
each team’s workflow progresses smoothly and
preventing any interruptions or bottlenecks that may
occur with cross- functional teamwork. Kanban, a
lean management technique that utilizes a visual cue
to trigger action, is used to enable easy
communication between teams so they can
address what needs to be done and when it needs to
be done by.
d. Developing a pull system ensures that the
continuous workflow remains stable and
guarantees that the teams deliver work assignments
faster and with less effort. A pull system is a
specific lean technique that decreases the waste of
any production process. It ensure that new work is
only started if there is a demand for it, thus
providing the advantage of minimizing
overhead and optimizing storage costs.
e. Facilitating continuous improvement refers to a
variety of techniques that are used to identify what
an organization has done, what it needs to do, any
possible obstacles that may arise and how all
members of the organization can make their work
processes better. Ensuring all employees contribute
to the continuous improvement of the workflow
protects the organization whenever problems
emerge.

6. Sustained Improvement
The never-ending improvement cycle ensures that
the organization learns from results, standardizes
what it does well in a documented quality
management system and improves operations and
outputs from what it learns. But the emphasis must
be that this is done in a planned, systematic and
conscientious way to create a climate – a way of life
– that permeates the whole organization.
There are three basic principles of sustained
improvement:
a. Focusing on the customer.
b. Understanding the process.
c. All employees committed to quality.