Operations Management TQM

MODULE TQM (Operation Management)
Introduction to the Course

Course Description:
It is the management philosophy , a continuous improvement

approach to doing business through a new management model.
Learning Outcomes:
• Discuss the purpose ,types and steps in control process.
• Discuss financial control and budgetary control
• Explain the meaning and importance of managing quality and total
quality management.
• Discuss other TQM tools such as ISO 9000, ISO14000, statistical
quality control, six sigma and benchmarking.
• Discuss the meaning of productivity, factors affecting productivity and
ways to improve productivity.
CHAPTER 1
Introduction to Total Quality Management
Objectives:
1. Define quality
2. Identify primary elements ,core concepts and benefits of TQM
3. Distinguish between traditional management and TQM
Defining Quality
 Quality is a lot more than nonexistence of defects which allow companies to
meet customer expectations. Quality needs controlled process
improvement, allowing companies to exceed customer’s expectations.
 Quality can only attained by the nonstop improvement of all systems and
processes in the organization not simply the production of products and
services.
Approaches to Quality Definition
1. Transcendent - TV and print media are flooded with such indescribable claims,
therein lays problem that quality is not easy to define or operationalized.
2. Product-based – Quality is observed as a quantifiable or measurable
characteristic or attribute.
3. User-based – Quality is an individual issue and products that best please their
preferences are those with the highest quality.
4. Manufacturing-based – It’s focused mainly engineering and manufacturing
practices and use the universal definition of “conformance requirements”.
5. Value-based – Using cost and prices as well as the number of attributes.
Quality Types
1. Quality of Design – All about set characteristics of the product or services must
minimally have to satisfy the requirements of the customer based on market
research.
2. Quality of Conformance – Is basically meeting standards or user-based
characteristics defined in the design phase after the product is manufactured or
while the service is delivered.
3. Quality of Performance – Is how sound the product functions or service
performs when put to use.
Quality Levels
1. Organizational Level – Quality requirements revolve around it’s customers’
quality requirements.
2. Process Level – Units of the organization are categorized into functions or
departments like marketing, operations, finance, human resource and so on.
3. Performer/Job/Task Design Level – Individuals are one of the vital components
of the human performance system.
Quality Paradigms
1. Custom-craft paradigm – focus is on the product or service and performance
should be exactly as what customer demands.
2. Mass production and sorting paradigm – focus is on production rate without
direct involvement of the customer.
3. Statistical quality control paradigm - comparable to the mass production and
sorting paradigm except that more emphasis is given to production processes.
4. Total quality management paradigm – focuses on customers and suppliers in
addition to mass production and statistical methods.
5. Techno-craft paradigm – socio-technical complement to the custom-craft
paradigm with the intention of reducing delivery time. Each unit is designed and
builds exactly the way the customer wants it built using high level of product
process flexibility.
Cost of Quality
Cost of quality is a method that permits an organization to decide on the level to

which its resources are used for activities that avoid poor quality, that assets the
quality of the organization’s products or services, and that result from internal and
external failures.
 Quality –related activities that incur costs may be divided into prevention
costs, appraisal costs, and internal and external failure cost.
1. Prevention Costs
These are incurred to prevent or avoid failure problems. These costs are
associated with the design, implementation, and maintenance of the quality
management system.
 They are planned and incurred before actual operation, and they could
include:
a. Product or service requirements – establishments of qualifications for
inward bound materials, processes, finished products, and services.
b. Quality planning – drawing of plans for quality.
c. Quality assurance – planning and continuance of the quality system.
d. Training – development, preparation, and continuance of programs.
Appraisal Costs
 These costs are associated with measuring and monitoring activities related
to quality standards and performance requirements. These costs take place
from spotting defects rather than prevention. They could include:
a. Verification – checking of inward bound material, process setup, and
products against contracted specifications.
b. Quality audits – confirmation that the quality system is operating
properly.
c. Supplier rating – appraisal and endorsement of suppliers of products and
services.
Internal Failure Costs
 These costs are acquired to treat defects revealed earlier when the product
or service is delivered to the customer. These cost happen when the results
of work fail to attain design quality standards and are noticed before they
are transferred to the customer.
 s, poor organization, or communication.

 They could include.
a. Waste – performance of needles work or holding of stock as an outcome
of error.
b. Scrap – faulty product or material that cannot be repaired, used, or sold.
c. Rework or rectification – improvement or flawed material or errors.
d. Failure analysis- activity necessary to ascertain the reasons of internal
product or service failure.
External Failure Costs
 These are costs obtained to treat defects exposed by customers. These occur
when products or services that fail to attain design quality standards are not
discovered until after transfer to the customer. They could include:
a. Repairs and servicing – both returned products and those in the field
b. Warranty claims – failed products that are replaced or service that are re-
performed under a guarantee
c. Complaints – all work and costs connected with handling and servicing
customers’ complaints
d. Returns – handling and investigation of discarded or recalled products, including
transport costs
DEFINING TOTAL QUALITY MANAGEMENT
 Total Quality Management is an all-inclusive and well thought-out means to
organizational management that searches the quality of processes, products,
services and culture through continuing minor changes in reply to constant
feedback.
 Total Quality Management consists of continuous process enhancement
activities concerning managers and workers alike in an organization in a
completely integrated effort toward improving performance at all level.
 TQM combines basic management techniques, current improvement efforts
and technical tools in a disciplined approach focused on continuous process
improvement.
 TQM begins with a focus on the customer and is boundless, with a life-time
dedication to continuous improvement.
 TQM is a process of controlled change that comprises the entire employees
in the improvement of the quality of the products and services to boost
productivity of the organization.
 TQM is accomplished using a team organization with both management and
the employees as members of “Quality Teams” which focus on continuous
process enhancement.
The Primary Elements of TQM
1. Foundation – the entire process of total quality management is built on a strong
foundation of ethics, integrity and trust.
a. Ethics – is a combination of written and unwritten codes of principles that govern
decisions and actions within a company.
b. Integrity – is the consistency of actions, values, methods, measures, principles,
expectations and outcomes at workplace.
Foundation –continued
c. Trust – is one of the most important factors necessary for implementation of
TQM because it builds a cooperative environment.
2. BUILDING BRICKS
Building Bricks – bricks are placed on a strong foundation to reach the roof of
recognition. Leadreship, teamwork, and training are the building bricks of TQM.
a. Leadership – provides a direction to the entire process of TQM.
b. Teamwork – crucial element of TQM. Rather than working individually,
employees need to work in teams. Teamwork offers contiguous improvement in
processes and operations.
The team may be:
a. Problem-solving
b. Quality improvement
c. Natural work
c. Training – employees need to be trained on TQM to become highly productive.
3. Binding Mortar
 Binding Mortar – binding mortar binds all the elements together.
Communication binds everything together, starting from the foundation and
going up to the roof. Communication is the vital link between all the TQM
elements and must be prevalent in an organization in order for TQM to work
the way it should.
 Communication binds employees and extracts the best out of them.
Information needs to be passed on from the sender to the recipient in its
desired form.
 There are three types of communication takes place between employees:
1. Downward communication – flow of information takes place form the
management to the employees.
2. Upward communication – flow of information takes place from the lower-
level employees to the top level management.
3. Sideways/lateral communication - communication takes place between
various departments.
ROOF
 Roof – includes recognition which brings greater internal customer
satisfaction which in turn leads to external customer satisfaction in the
organization.
 Recognition is the final element of TQM. Recognition is the most important
factor which acts as a catalyst and drives employees to work hard as a team
and deliver their lever best.
Core Concepts of TQM
1. Customer Satisfaction – TQM is centered on the requirements of the customer.
In order to meet customer requirements, it is imperative to listen to them and do
what is agreed upon.
2. Internal customer satisfaction – customers are not only external customers, but
the people outside who are the end user of a firm’s products and services. There is
also internal customer, the person within the company who receives the work of
another and adds his contribution to the product or service before passing it on to
someone else.
3. All work is process. – Another possible focal point of improvement is that of
business processes. A process is a combination of methods, materials, manpower
and machines that work collectively to product a product or service.
4. Measurement – In order to improve, one must first measure one’s present
performance.
5. Synergy in teamwork – The idea of synergy in teamwork, where the whole is
greater than the sum of the parts, is a key concept of TQM.
6. People make quality. – Most of the quality problems within an organization are
not usually within the control of an individual employee.
7. Continuous improvement. -
8. Prevention. – At the heart of TQM is the conviction that it is possible to achieve
defect-free work most of the time. This is termed “right first time, every time” or
zero defects.
BENEFITS OF TQM
1. Creates a good corporate culture.
2. Better reviews from customers.
3. Better performance from employees.
For further discussion please refer to the link provided: Total quality managment
https://www.youtube.com/watch?v=gwHngq4Bw0w
For further discussion please refer to the link provided TQM field of organization
https://www.youtube.com/watch?v=85Y8iBhzqwk
Reference:
Total Quality Management (OBE)
Prof. Angelita Ong Camilar-Serrano,DBA(candidate
CHAPTER 2
STRATEGIC DIMENSION OF QUALITY
Objectives:
1. Identify the eight dimension of product quality.

2. Name the Five dimensions of services quality.
3. Differentiate the dimensions of product and service quality.
DIMENSION OF PRODUCT QUALITY

At a strategic level there are eight dimensions of product quality
management that can be used to evaluate quality characteristics .
David Garvin develop a system of thinking about quality of products.
 Performance – consist of the primary operating characteristics of
a product.
 Features – added characteristics that boost the attraction of the
product or service to the user.
 Reliability - is the likelihood that a product will not fail inside a
particular time period. MTBF – mean time between failures
(literally the average time elapsed from one failure to the next.)
 Failure rate – the frequency with which a component fails,
expressed in failures per unit of time.
 Conformance – depicts to what extent a product design and
operating characteristics meet established standards.
 Durability - is a measure of how much use a person to gets from a
product before it breaks down to such a point that replacement
makes more sense than continual repair.
3 types of DURABILITY testing
1) Vibration testing – the vibration environment to which product

will be expose to in real use is produced. Products are tested this
environment to judge their durability or check for improvements.
There are two types of vibration testing;
a.Vibration Experiment – used to test a sample or representative
model of volume production. It is used to improved the product
design.
b)Vibration Stress Screening – All production products are tested
to eliminate faulty units and approved good units. It may be
compulsory in certain industries.
2) Shock Tests – replicates events to determine if structure can
withstand sudden applied forces. Shocks are characterized by their
short duration and sudden occurrence.
3) Climate Testing – materials can deteriorate over time, ageing
prematurely due to either high or low temperature extremes.
• Serviceability - involves the customer ease of obtaining repair
service like access to serve centers and/or ease of self-service.
• Aesthetics - means how a product looks, feels, sounds, tastes, or
smell. It obviously an issue of personal judgment and an indication
of individual preferences.
• Perceived Quality – is the individuals subjective appraisal of
products or services attributes; indirect measures may be their only
basis for comparing brands.
• Dimension of Service Quality
Service – is normally described as an experience felt by the consumer.
• Tangibles - dimension of quality is associated to the environment
in which the service is rendered to the customers.
• Reliability – is the ability to perform the promise service

dependably and accurately to customers on specific service.
• Responsiveness – the willingness to help customers and provide
prompt service. This dimension emphasize attentiveness in dealing
with customers requests.
• Assurance - defined as employees knowledge of courtesy and the
ability of the firm and its employees to inspire trust and
confidence.
• Empathy – refers to caring attitude that an organization provides
toward customer. Service quality calls for individual attention to
customers.
For further discussion please refer to the link provided: Garvins Quality dimension
https://www.youtube.com/watch?v=asdZLfG4s-U
For further discussion please refer to the link provided Durability test
https://www.youtube.com/watch?v=uaMA4jtoykM
Reference:
CHAPTER 3
GURUS OF TOTAL QUALITY MANAGEMENT
Objectives:
1. Identify the different quality gurus in quality management.

2. Recognize contributions of quality gurus in quality
management.
Dr. William Edwards Deming

(Oct. 14, 1900 - Dec. 20, 1993)
 Often referred to as the
“ FATHER OF QUALITY CONTROL”
 He is known for his 14 points, for the
Deming Chain Reaction and for the
Theory of Profound Knowledge.
 He modified the Shewart PDSA (plan, do, study, act)

cycle to what is now referred to as Deming Cycle (plan, do, check, act).
 Deming approach to TQM is mainly concentrated on the creation of an organizational
system that is based on cooperation and learning for facilitating the implementation of
process management practices.
 He said that the Top Management’s responsibility to create and communicate a vision to
move the firm toward continuous improvement.
 He said that only the customer can define the quality of any product or service.
 He also emphasized the importance of identification and measurement of customer
requirements, creation of supplier partnership, use of functional teams to identify and
solve quality problems, enhancement of employee skills, participation of employees and
pursuit of continuous improvement.
DEMING’S 14 POINT METHODOLOGY
1. Constancy of Purpose - Create firmness of purpose for continual improvement of
products and service and distribute resources to accommodate long term needs rather
than short term profitability with a plan to become competitive, stay in business and
provide jobs.
2. The New Philosophy - Transformation of the Western management style is necessary to
bring to an end the continued decline in the industry.
3. Cease dependence on inspection - remove the need for mass inspection as a technique
to attain quality by building quality into the product in the first place.
4. End low cost tender contracts - Deming advised businesses to utilize single-sourcing for
long term relationships with a few suppliers leading to loyalty and opportunities for
shared improvement.
5. Improve every process - Management’s job is to constantly make better the system with
contribution from workers and management.
6. Institute training on the job – Introduce up to date methods of training on the job,
incorporating management to make greatest use of all employees.
7. Institute leadership – The management has to make sure that urgent action is taken on
reports of inherited defects, maintenance requirements, poor tools fussy operational
definitions and others conditions damaging to quality.
8. Drive out fear – Build fear-free environment where everyone can contribute and work
effectively.
9. Break down barriers – People work cooperatively with reciprocal trust, respect, and
appreciation for the needs of others in their work. Barriers between organizational levels
and departments are internal barriers. External barriers are between the company and its
suppliers, customers, investors, and community.
10. Eliminates exhortation – Such exhortations only form adversarial relationships. The
volume of the cases of low quality and low productivity belong to the system; thus, lie
outside the power of the workforce.
11. Eliminate arbitrary numerical targets – Remove work standards that stipulate numerical
quotas for the workforce and the numerical goals for people in the management.
12. Permit pride of workmanship – Eliminate the barriers that steal from hourly workers and
people in the management of their rights to pride of workmanships.
13. Encourage education – This point tackles the need for going and continuous education
and self-improvement for the whole organization.
14. Top management’s commitment – A clearly defined commitment by the top
management to constantly improve quality and productivity and strengthening of
obligations to put into practice all these principles is always advantageous to the
workforce and the organization.
Deming’s 7 Deadly Diseases
1. Lack of constancy of purpose to plan products and services that have a market sufficient
to keep the company in business and provide jobs.
2. Stress on short-term profit; short-term thinking that is driven by a fear of unfriendly

takeover attempts and pressures from bankers and shareholders to generate dividends.
3. Personal review system for managers and management by objectives with no methods or
sources provided to achieve objectives; includes performance evaluations, merit rating,
and annual appraisals.
4. Job-hopping by managers.
5. Too much cost of liability driven up by lawyers who work on contingency fees.
6. Extreme medical cost.
7. Too much cost of liability driven up by lawyers who work on contingency fees.
Philip Bayard "Phil" Crosby
(June 18,1926 – Aug. 18,2001)
 He was a businessman and
author who contributed to
management theory and quality
management practices. Crosby
initiated the Zero Defects
program at the Martin Company
Philip Crosby came to national prominence with Publication of his book Quality is Free in 1979
He established the absolutes of quality management which states that the only performance
standard is zero detects and the basic elements of improvement
The essence of Crosby’s teachings is contained in what he calls the “Four Absolutes of Quality”
1. The Definition - Quality is conformance to requirements, not goodness
2. The System - Prevention, not appraisal
3. The Performance Standard - Zero defects
4. The Measurement - The price of non-conformance to requirements quality circles
Management must assess quality by continually tracking the cost of doing things erroneously,
Crosby calls this as the “price of non-conformance”.
• The Cost of Conformance - is focused on avoiding potential failures.
• The Non-conformance - in projects is the cost incurred as a result of any failure because
the quality expectations were not met.
The requirements of a product need to be defined and specified clearly so that they are correctly
known, he emphasized that higher quality lessens costs and increases profits.
Crosby also prevents the quality management maturity grid which contain five stages.
He developed a 14-step Methodology:

1. Management Commitment - To make clear the management's position on quality
2. Quality Improvement Team - To carry out quality improvement program
3. Quality Measurement - To exhibit existing and possible non-comformance problems in
the way that permits objective evaluation and remedial action.
4. Cost of Quality - To identify the components of the cost of quality, and give details on it's
application as a management tool.
5. Quality awareness - To give method of elevating individual corner among the personnel
in the company towards conformance of the product and service, and the status of the
company on the subject of quality.
6. Corrective action - To offer a systematic method of deciding the problems recognized
through, action taken in the past
7. Zero defects planning - To study the different activities that must be performed as
groundwork for initiating the Zero defects program.
8. Supervisor training - To name the type of training that supervisor required to
energetically perform their roles with regard to the quality improvement program.
9. Zero defects day - to produce an event that will allow all employee appreciate through a
personal experience, that there has been change.
10. Goal setting - To twist promises and commitment into action by persuading individuals to
set up improvement goals for themselves and their groups
11. Error-cause removal - To offer individual employees a way of communicating to the

management, the situations that make it not easy for employees to fulfil the promises to
improve
12. Recognition - To be thankful for those who contribute
13. Quality councils - To bring collectively professionals in the realm of quality for planning
communication on a customary basis with the workforce and management alike
14. Do it over again - To accentuate that the quality improvement program never ends.
DR. JOSEPH MOSES JURAN
(Dec. 24,1904 – Feb. 28, 2008)
• assisted the Japanese in their reconstruction
processes after WW II
• first became known in the U.S. as the editor of the
Quality Control Handbook (1951)
Juran introduced the quality trilogies (quality planning, quality control & quality improvement)
1. Quality Planning
involves identifying the customer’s needs and expectations, proposing products and
services, setting goals, giving training, implementation of projects, reporting,
recognizing and communicating outcome and improvements in systems.
2. Quality Control
concerns creating standards, naming measurements and methods thereof, contrasting
results with actual standards and construing the differences and taking action on
differences.
3. Quality Improvement
this is about the use of structured annual improvements projects and plans, need of
improvement, organizing to guide the projects, detecting the causes, giving and
verifying remedies and establishing control keep up gains made.
Which aspect of the Quality Trilogy is most vital ?

It’s like asking “Which leg of a stool is most important ?”

- The stool cannot function effectively without all three.
The same with the trilogy.
Juran propounded the following message on quality:

1. Quality control must be essential part of management.
2. Quality is no mistake.
3. Quality must be planned.
4. There are no shortcuts to quality.
5. Make use of problems as sources of improvement.
Juran’s formula consists of:

1. Create an awareness about the need and propose an opportunity for improvement.
2. Set goals for improvements.
3. Systematize paths to attain the goals ( begin a quality council, identify problems, choose
projects, assign teams, delegate facilitators and so on )
4. Give training
5. Do projects to resolve problems
6. Inform progress
7. Provide recognition
8. Communicate outcome
9. Keep score
10. Uphold thrust by making yearly improvements component of the regular systems and
processes of the company.
In his view, the approach to managing for quality consists of:
1. The irregular problem is detected and acted upon by the process of quality control;
2. The constant problem needs a special process, namely, quality improvement
3. Such constant problems are traceable to a poor quality planning process.

Like Deming, Juran believes most quality problems are due to management not
employees. He states that the distinction between constant and irregular problems is
essential because there are different approaches to handling the problems.
Breakthrough” activities or quality improvement include:

1. Breakthrough in attitudes – persuading those responsible that a change in quality level
is advantageous and practical;
2. Discovery of the vital few projects – determining which quality problem areas are
essential;
3. Organizing for breakthrough in knowledge – defining the organizational system for
attaining the knowledge for accomplishing a breakthrough;
4. Formation of a steering arm – defining and staffing a system for directing the study for
quality improvement;
5. Formation of an investigative arm – defining and staffing a system for executing the
technical inquiry;
6. Diagnosis – collecting and examining the facts necessary and proposing the action
desirable;
7. Breakthrough in cultural pattern – determining the effect of an anticipated change on
the people involved and looking for ways to rise above opposition to change;
8. Breakthrough in performance – getting agreement to take action;

9. Transition to the new level – implement the change
“Control” activities include:
1. Choosing the control subject which is choosing what is intended to regulate;
2. Choosing a unit of measure;
3. Setting a goal for the control subject;

4. Creating a sensor which can measure the control subject in terms of the unit of
measure;
5. Measuring real performance;
6. Interpreting the difference between actual performance and the goal;
7. Taking action (if any) on the difference.
“Planning” activities include:

1. Establish the quality goal
2. Identify customers
3. Discover customer needs
4. Develop product features

5. Develop process features
6. Establish process controls and transfer to operations
Dr. Walter Andrew Shewart

 Grandfather of Quality Management”
 Born on March 18, 1891, in New Canton
 Died on March 11, 1967, in Troy Hills, New Jersey
 Edna Hart is his wife
 In 1924, Shewart determined the problem of variety in terms of assignable cause and
chance cause.
 In May 16, 1924,he prepared a message and about 1|3 of the page was devoted to a
plain diagram that people would today recognize as a control chart. This memorandum
set forth the essential principles and considerations that become known as process
quality control.
 He develop the Shewart cycle: (PDSA) Plan-Do-Study-Act or (PDCA) Plan-Do-Check-Act,
this is to manage the effect of variations.
 He stressed that eliminating variability improved quality.
 His principle was that bringing a process into a state of statistical control would permit
the distinction between assignable and chance cause variation.
Armand Feigenbaum
(April 6, 1920 - Nov. 13, 2014)
 He devised the concept of Total Quality Control
which inspired Total Quality Management.
He was the first to classify quality cost as cost
of prevention, appraisal Internal and external failures.
He is given the credit to the formation of the idea of total

control in his book Quality control – principles, practice and
administration (1961) and his article Total Quality Control (1956).

The Three Steps to Quality
1. Quality Leadership – the management must maintain a constant focus and lead the
quality efforts.
2. Modern quality technology – the traditional quality development processes cannot
resolve 80% - 90% of quality problems.
3. Organizational commitment – continuous training and motivation of the whole
workforce.
Feigenbaum 10 points on TQM include:

1. Quality is consciousness programmed not only a technical function.
2. Quality is not what an engineer or marketer says but it is that what the customer speaks
of.
3. Quality and cost are a sum, not differences.
4. Quality must be organized to identify everybody’s job in the organization.
5. Quality is technique of managing an organization good management means continuous
stress on the quality.
6. The quality improvement highlighting must take place all through all activate of the
organization.
7. Quality is realized through assistance and contribution of each and every person related
to the organization, it is also an ethic.
8. Continuous quality improvement needs extensive range of new and existing quality
technology of information applications.
9. Total quality program approach leads to productivity and is most effective and less
capital intensive.
10. Quality comes, if it is clear, customer oriented, effective and structured
 He state the total quality management covers the complete scope of the product and
service “life cycle” from product conception through production and customer service.
 The stress is on the prevention of poor quality rather than detecting it after the event.
 He stated the deduction and training should address the three vital areas of quality
attitudes, quality knowledge and quality skills.
 Quality control underlining that human relation was a fundamental issue in quality
control activities and such things as statics and preventive measures were only a
fractions of the whole equation.
 Quality is what fits the customer and right price.
 Though inspiring and pushing everybody in an organization to realize their

responsibilities and potential on the quality of product on service.
Prof. Kaoru Ishikawa
(July 13, 1915 – April 6, 1989)
 He is the "Father of Quality Circles" for his role
in launching Japans quality movement in 1960's.
 He is recognized with developing the idea of company-wide
quality control in Japan.
Ishikawa said that the seven basic tool were "indispensable for quality control".
1. Process flow chart
2. Check sheet
3. Histogram
4. Pareto chart
5. Cause-effect diagram
6. Scatter diagram
7. Control chart
Process Flow Chart
Check Sheet
Scatter Diagrams
Ishikawa emphasized on quality as a way of management. Some of the key elements are:
1. Quality starts with education and culminates with education
2. The first step in quality is to know the customer requirements
3. The perfect state of quality control happens when inspection is no longer compulsory
Ishikawa concept of total quality control contains Six Fundamental Principles:
1. Quality first - not short term profits first
2. Customer orientation - not producer orientation
3. The next step is your customer - breaking down the fence of sectionalism
4. Using facts and data to make presentations - use of statistical methods

5. Reverence for humanity as a management philosophy, full participatory management
6. Cross-functional Management
Genichi Taguchi
(Jan.1, 1942 - June 2, 2012)
 Dr. Taguchi was born in Japan and completed
his graduation in the subject of Mechanical Engineering and obtain
Ph.D in year 1962.
 He is a Japanese quality expert known for his work of product design.

 He estimated that 80 % all defective items are called by poor product design.
 Defines quality as the “loss imported to the society from the time a product of shipped”.
The key elements of Taguchi quality concepts are briefly stated below:
1. Quality improvement should focus in reducing the variation of the products key
performance characteristics about the target values.
2. The loss suffered by a customer due to a product’s performance variation is often just
about the proportional to the square of the deviation of the performance characteristics
from it’s target value.
3. The ultimate quality product and cost of manufactured products.
4. A product or process performance variation can be lessened.

5. Statistically planed experiments can be used to name the setting and product.
Taguchi is known for applying a concept called design of experiment to product design.
This method is an engineering approach that focuses on developing robust design that
enables products to perform under varying conditions. Robust design result in a product
that can perform over a wide range of conditions.
Taguchi’s Eight-point Approach
1. Determine the main functions, side effects and loss models.
2. Determine the noise factors and the testing conditions for evaluating failure of quality.
3. Determine the quality characteristics to be observed and the objective function to be
optimized.
4. Determine the control factors and their alternate levels.
5. Blueprint the matrix requirements and define the data analysis procedure.
6. Carry out the matrix.
7. Examine the data, identify optimum level for the control factors.
8. Perform the confirmation experiment and prepare future actions.
Dr. Shingo Shigeo

(1909 – 1990)
 A Japanese greatest contributor to modern
manufacturing practices and an expert in the field of industrial engineering.
The 3 Concepts of Dr. Shingo Shigeo
1. Just in time (JIT)

- Was originated in part due to the contribution of Dr. Shingo Shigeo and Taichii Ohno of
Toyota Motor Corp. from 1949-1975.
2. Single Minute Exchange of Dies (SMED)
Is a system for speedy changeovers between products.
3. Zero Quality Control (ZQC)

– It is based on the theoretically idea scenario.
– Was basic idea to implement.
– Poka-Yoke Techniques
- To correct defect + source inspection to prevent defects = Zero Quality Control.
- This Technique can use by the following principle.

The 3 Principles
1. 100% inspection done at the starting place instead of sampling.
2. Instant feedback from consecutive quality and self-check.
3. Poka-Yoke designed manufacturing devices.
Poka-Yoke
• relates to stopping processes as soon as a defect happens,
• searching the defect source
• avoiding it from occurring one more, therefore there will be reduced reliance.
Masaki Imai
(1930- present)
 The Founder and President of Kaizen Institute who V

threw the word “kaizen”.
Kaizen
- Refers to continuous or on-going improvement in Japanese.
- Was originally introduced to the West by Masaki Imai in his book kaizen : The Key To
Japan’s Competitive Success in 1986.
Kaizen is continuous improvement that is based on certain guiding principles:
1. Good processes carry good results.

2. Go see for yourself to grab the present situation.
3. Speak with data, direct by facts.
4. Take action to contain and remedy root causes of problems.

5. Work as a team.
6. Kaizen is everyone’s business.
For further discussion please refer to the link provided: Demings 14 methodoloy
https://www.youtube.com/watch?v=WHaZvlORz1E
For further discussion please refer to the link provided Fishbone Cause and effect
https://www.youtube.com/watch?v=I0c6Gd26Fxw
Reference:
CHAPTER 4
KAIZEN: CONCEPTS AND SYSTEM
Objectives:
1. Define Kaizen as a philosophy

2. Describe the different concepts of kaizen
3. Explain the system under kaizen
4. Apply the philosophy of kaizen in everyday activities
Kaizen
-is a philosophy that calls for people and their organizations to experience ongoing improvement
at every level.
-kaizen seeks to construct effective and efficient processes and quality outputs.
-Kaizen at the workplace means continuing improvement.

Kaizen Concepts
-Kaizen is a Japanese word meaning continuous improvement. It is made up of two characters
which are “ kai ”, meaning “change” and “ zen ”, which meaning “good”. It is used to describe a
company culture where everyone, from the CEO to the front desk clerk, regularly evaluates his
work and thinks of ways to improve it.
-Kaizen originated in Japan as a result of Worlds War II. Ironically, it evolved in part from American
business leaders like Dr. W. Edwards Deming who came to help restore the country. It was first
introduced by a 1951 training film created by the American Economic and Scientific Section (ESS).
Toyota has been known as the initial company that has started Kaizen. The application that
Toyota used called “Toyota Production System”, where all line personnel are expected to
discontinue their moving production line in the case of any irregularity, and suggestions for
improvement are awarded reward. They succeeded eradicating all the wastes. Kaizen is used for
placing the terms as productivity, total quality control (TQC), zero defects(ZD), and just-in-
time(JIT).
2 types of Kaizen
• Gemba Kaizen (actual workplace)- is an action-oriented approach and refers to

improvement activities that are carried out in actual workplace.
• Teian Kaizen (plan)- represents a theory based approach and refers to strategic
improvements that are prejudiced by top management.
Kaizen and Management
2 major components of Management
-Maintenance function is to maintain current technological, managerial, and operating
standards.
-The management must first establish policies, rules, directives and standard operating
procedures (SOPs)
-Improvement function is aimed at improving current standards.

-management works constantly towards modifying the existing standards, ones they have been
mastered, and establishing higher ones.
A manager needs to work closely with the senior management, human resource professionals
to develop perfect implementation strategies. A manager has to act as a bridge between the
senior management and the entire workplace.
1. The role of a manager is to act as a facilitator at the workplace. It is the duty of a manager
to assist employees in implementing TQM. It is also his responsibility to choose and
assign right individuals who can work as line managers and take charge of the whole
project.
2. A manager must communicate the benefits of total quality management to all other
members of the organization. Call employees on a common platform and address the
benefits and importance of TQM. Make them understand how successful implementation
of TQM programs would give way to high quality products.
Process Vs Result
 Process-oriented thinking - mostly centers on how processes are carried out through the
assessment of performance indicators generated by measuring or observing the process
flow.
 Result-oriented thinking - basically disregards how processes flow and work. Instead,
process result/outcomes are obtained, monitored and evaluated systematically.
Table 2 The Features of Process and Result criteria

PDCA/ADSCA Cycles
cycles that involve processes for improvement and for maintenance: Plan-Do-Check-Act (PDCA)
and Standardize-Do-Check-Act (SDCA). When improving processes the following are the phases:
• Plan-Do-Check-Act (PDCA)
1. Planning Phase - is the most vital phase of total quality management. In this phase
employees have to come up with their problems and queries which need to be addressed.
2. Doing Phase - employees develop a solution for the problems defined in planning phase.
Strategies are devised and implemented to overcome the challenges faced by employees.
3. Checking Phase - is the stage where people actually do a comparison analysis of before
and after data to confirm the effectiveness of the processes and measure the results.
Standard is the best, safest and easiest way, to achieve and maintain a defined quality level.
Standards should be:
1. Be simple, clear and conspicuous
2. Be the best, easiest, safest way - should only have one at a time
3. Preserve know – how
4. Be guide-lines that enable performance
5. Measurement of tasks delegated

6. Assure quality, cost, delivery, and safety
7. Show relationship between cause and effect
With Standards:
1. Management becomes possible

2. There is a basis for training
3. There is a basis for audit or diagnosis
4. Problems are prevented from recurring and control variability

Putting Quality First
About performance in terms of three dimension (QCD)
QUALITY
- The most essential criteria of customers.
COST
- Manufacturer’s viewpoint as the overall cost of making and selling a product.
DELIVERY
-Bringing the necessary quantity of product in the right place at the right time.
SPEAK WITH DATA
LIFEBLOOD OF KAIZEN
- A Problem solving process or correcting the problem in a process
The next process is the customer
-means that all works think that next process is the customers.
Types of customer
• Internal customers
• External customers
JIT production system (Just in Time)
Elements of JIT
1. Make stable and level master production schedule (MPS)
2. Decrease or eliminates setup times.

3. Trim down lot sizes
4. Shrink lead times
5. Preventive maintenance
6. Flexible work force

7. Obligue supplier quality assurance and execute a zero defect quality program
Reason for a move from batch mode to just in time
1. Batch production system is the most inefficient way to make products.

2. Difficult to meet customers requirements.
3. The batch system derives from the agricultural mentality.
4. This kind of system is based on market projection is good when there is demand.
5. End up with large inventory of unsold products and overload capacity.
Total Productive Maintenance

System of maintaining and improving the integrity of production and quality system through
machines.
-is attributed to nippondenso, a company that created parts for Toyota.
And was awarded by Japanese Institute of Plant Engineer (JIPE)
To increase the Overall Equipment Effectiveness (OEE)
-one of the main objectives of TPM is to increase the productivity.

-modern Japanese concept 1951
Seiichi Nakajima
-The father of TPM, because of his numerous contribution to TPM
-is attributed to nippondenso, a company that created parts for Toyota.
And was awarded by Japanese Institute of Plant Engineer (JIPE)

To increase the Overall Equipment Effectiveness (OEE)
OEE has three factors
 PERFORMANCE
-Running and reduced speed and minor tops.
 AVAILABILITY
-breakdown and predict change over
 QUALITY
-startup rejects and running rejects,.
Eight pillars of TPM

(techniques for improving equipment reliability)
1. Focused improvement
2. Autonomous maintenance
3. Planned maintenance
4. Quality maintenance
5. Cost deployment
6. Early equipment management

7. Training and education
8. Safety health environment
TYPES OF MAINTENANCE
 Breakdown maintenance
-means that people waits until equipmetfails and repair it.

 PREVENTIVE MAINTENANCE
-it is a daily maintenance
a. PERIODIC MAINTENANCE (TIME BASED MAINTENANCE (TBM)
b. PREDICTIVE MAINTENANCE (THE LIMIT OF THEIR SERVICE LIFE
 CORRECTIVE MAINTENANCE
-it improves equipment
 MAINTENANCE PREVENTION
-it indicates the design of new equipments
Policy Development
- people follow policies, good or bad.

- it needs to state the level of defects or errors that is acceptable.
- the policy also needs to state the relationship between the company and the customer.
- ones the policy is written, management needs to determine how to explain it to employees.
Suggestion System
- is regarded as individual-oriented kaizen

- encourages all workers to talk about their suggestions orally with supervisors and put them into
action right away, even before submitting suggestion form.
- is an integral part of an established management system that aims at involving employees in
Kaizen
Three Stages of the suggestion system
1. Encouragement - in the first stage, management should make every effort to help the
workers provide suggestions, no matter how primitive, for the betterment of workers job
and the workshop.
2. Education - in the second stage, management should stress employee so that employees
can provide better suggestion.
3. Efficiency - only in the third stag, after the workers are both interested and educated,
should management be concerned with the economic impact of the suggestions
Benefits of a suggestion system
 Here are the benefits of a suggestion system, namely:
1. Important ones own work and the working environment

2. Engages and empowers employees
3. Creates ownership and trust
4. Improves motivation and morale
5. Improves costumer satisfaction
6. Improves profitability
For a suggestion system to be successful and effective, the following factors have to be
considered:
1. Formation of a suggestion committee to plan and manage the suggestions system
2. Defining the suggestion process, including a feedback system
3. Promoting the suggestion system
4. Evaluation system
5. Award system
6. Sustaining the suggestions system
Most suggestions remain to be suggestions because of:

1. Delay in approving ideas
2. Complex approval process (committees)
3. Backlog of suggestions needing approval or implementation
4. Less that 90% of ideas implemented
5. Inappropriate kaizen suggestions

6. Allowing anonymous suggestions
7. Unfair rewards
8. Motivating by clash only
9. Lack of promotion and support of the kaizen suggestion program
10. Lack of timely implementation
For further discussion please refer to the link provided: What is KAizen
https://www.youtube.com/watch?v=xpELPDY82ds
For further discussion please refer to the link provided What is TPM
https://www.youtube.com/watch?v=hNiekUD2ZwQ
Reference:
CHAPTER 5
GOOD HOUSE KEEPING
Objectives:
1. Define 5s as philosophy for improvemnet.

2. Apply 5s in everyday life.
THE 5’s
5’s which is Japanese system to reduce cost, control inventory and reduce
breakdowns and accidents drastically resulting in increased profits. It is the starting point
for any company who wants to make improvements at the workplace by reducing waste
and create better environment for its employees to work in.
5’s adoption is different in every facility, depending on the needs, processes, and
culture of any given workforce. However, no matter how it’s done, businesses large and
small can enjoy numerous benefits from adopting the 5’s methodology which includes:
 Improved Profitability- companies can save labor hours, money and other
resources.
 More Efficient Work Force- with standard procedures in place, personnel can
center on what’s important.
 Better Service- with a more organized, cleaner, streamlined workplace,
employees can use more time providing exceptional service.
 Safer Workplace- employees are at less hazard and can feel protected in clean,
organized workspaces.
THE 5 STEPS IN 5’s
1. SORT- all tools and materials used in the works process are taken care of. Sort
refers to the sorting of the clutter from the other items within the work area actually
needed.
2. SET IN ORDER- refers to straightening and orderliness. It is the process are taking
the required items that are remaining after the removal of clutter and arranging
them in an efficient manner through the use of ergonomic principles. In this stage,
the company may want to employ signboards and paintings as forms of visual
methods of orderliness.
a. THE SIGNBOARD STRATEGY- is a method for clearly indicating where,

what, and how many necessary items go where, to make the facility more
orderly.
b. THE PAINTING STRATEGY- this strategy involves marking off the factor’s
waking areas (walkways) from its working area(operation areas) using any
of the following:
 Divider lines
 Door range lines
 Markers for inventory, carts, worktables
 Tiger marks (yellow & black striped lines)
3. SHINE- stands for sweeping and cleanliness. It means to clean all items used at
work or all materials used during a manufacturing process. The workplace, for
examples, has to be clean and tidy all the time.
4. STANDARDIZED- Seiketsu, translates as “standard”. A standard refers to making

all the cleaning, control and improvement processes a customary activity in the
workplace, allowing for control and consistency. Fundamental housekeeping
standards apply everywhere in the facility. Everybody knows precisely what his
responsibilities are.
5. SUSTAIN- Shitsuke, means maintaining the process to retain long-term kaizen

goals and to retain and reviewing standards. This is to ensure that the firm has
common standards and ways of working.
For further discussion please refer to the link provided: 5s

https://www.youtube.com/watch?v=n9sxq34D9HQ
For further discussion please refer to the link provided Improved Profitability
https://www.youtube.com/watch?v=RDk_bmbxGBY
Reference:
CHAPTER 6
PHASES OF TQM IMPLEMENTATION
Objectives:
1. Recognize the different phases in TQM implementation;

2. Identify some of the methods in generating ideas for the
planning phase; and
3. Name the barriers in TQM implementation
4. Recognize contributions of quality gurus in quality

Jablonski offers a five-phase instruction for implementing total quality management namely:
management.
a. Preparation
b. Planning
c. Assessment
d. Implementation
e. Diversification
A. PREPARATION
It is during preparation when 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 poly, 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.
Planning for quality starts with setting quantifiable and measurable targets.
While doing this the organization needs to keep customer’s wants in mind.
The following are some of the methods in generating ideas for the planning
phase, which are:
1. The ‘5 Whys’ – asking ‘Why?’ at least

five times to unearth the core cause
of a problem.
2. Benchmarking is a technique that
measures a company’s performance against the best in industry.
The following are types of benchmarking:
a. Internal benchmarking is a comparison between operations or parts of
operations which are within the same total organization. For example, a
large motor vehicle manufacturer with several factories might choose to
benchmark each factory against the others.
b. External benchmarking is a comparison between an operation and other
operations which are part of a different organization.
c. Non-competitive benchmarking is benchmarking against external
organizations which do not compete directly in the same markets.
d. Competitive benchmarking is a comparison directly between competitors in
the same, or similar, markets.
e. Performance benchmarking is a comparison between the levels of achieved
performance in different operations.
f. Practice benchmarking is a comparison between an organization’s operations
practices, or way of doing things, and those adopted by another operation.
3. Brainstorming is a technique in which a group of people share ideas and

thoughts in a related atmosphere on various problems in order to
stimulate unrestrained collective thinking.
C. ASSESSMENT
This process requires a thorough self-assessment both from management
and customers or clients.
There are three methods that can be used in making an assessment which
are:
a. discussion group methods;
b. survey methods; and
c. award type
Each assessment method has advantages as well as disadvantages.
Discussion group method can yield some useful insights and facilitate
effective improvement activities.
Survey method is excellent for measuring employee perceptions of TQM in an
organization.
Award type self-assessment is the most effective form.
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 workforce are trained.
The Barriers to TQM Implementation
1. Lack of management commitment.
2. Inability to change organizational culture.
Basic concepts of change:
a. People change when they want to and to meet their own needs.
b. Never expect anyone to enage in behavior that serves the organization’s values
unless adequate reason has been given.
c. For change to be accepted, people must be moved from a state of fear to trust.
d. Improper planning.
3. Lack of continuous training and education.
4. Incompatible organizational structure and isolated individuals and departments.
5. Ineffective measurement techniques and lack of access to data and results.
6. Paying inadequate attention to internal and external customers.
7. Inadequate use of empowerment and teamwork.
8. Failure to continually improve.
E. DIVERSIFICATION – In this stage, managers utilize their TQM experiences
and successes to bring groups outside the organization into the quality
process. Diversification activities include training, rewarding

supporting, and partnering with groups that are embraced by the
organization’s TQM initiatives.
For further discussion please refer to the link provided: Planning
https://www.youtube.com/watch?v=29qE4FSxc1w&t=96s
For further discussion please refer to the link provided Benchmarking
https://www.youtube.com/watch?v=AkGwJSlkpfY
Reference:
CHAPTER 7
TQM AND PLANNING TOOLS
Objectives:
1. Identify quality tools for planning

2. Illustrate appreciation of each quality planning tools
3. Apply planning tools in quality problems
There are several basic tools of quality can be used singularly or in tandem to
investigate a process and identify areas for improvement, although they do not all
necessarily need to be used.
Cause And Effect / Fishbone Diagram
First used by Ishikawa in the 1940’s, this diagram is employed to identify the
underlying symptoms of a problem or “effect” as a means of finding the root cause.
It is called cause and effect diagram after its function and fishbone fishbone
diagram after its appearance.
Its function is to identify the factors that are causing an undesired effect (defects)
for improvement action, or to identify the factors needed to bring about the
desired result (a winning proposal).
The factors are identified by people familiar with the process involved.
As a starting point, major factors could be designated using
the Four M’s:
Method, Manpower, Material and Machinery;
or the Four P’s:
Policies, Procedures, People and Plant.
In order to use the cause and effect diagram as a tool, there is a need to first identify
the problem one is trying to solve and simply write it in the box (head of the fish)
to the right. Next, he will list the major causes of the problem on the spine of the
fish.
Causes are then identified during brainstorming with the group familiar with the
problem.
Cause And Effect / Fishbone Diagram
PARETO CHART
Alfredo Pareto was an economist who noted that a few people controlled most of
a nation’s wealth.
“Pareto’s Law” has also been applied to many other areas, including defects, where
a few causes are responsible for the most of the problems.
The Pareto Principle is based upon the principle which states that 80% of a problem
is attributable to 20% of its cause, or inputs.
A Pareto Chart organizes and displays information in order to demonstrate the
relative importance of various problems or causes of problems.
Pareto Chart is a vertical bar chart with items organized in order from the highest
to lowest, relative to a measurable effect such as frequency, cost and time.
It is simple to observe how to prioritize improvements efforts looking at the
number of defects from the largest to the smallest occurences.
PARETO CHART
CHECKSHEETS
Checksheets are also known as
Data Collection Sheets and Tally Charts.
These are non-statistical and comparatively easy.
They are used to capture data in a manual, reliable, formalized way so that
decisions can be made based on facts.
Data is collected and ordered by adding tally or check marks against predetermined
categories of items or measurements. It simplifies the task of analysis.
Cheeksheets are a simple way of gathering data so that decisions can be based on
facts, rather than anecdotal evidence.
CHECKSHEET
HISTOGRAM
Histograms are a form of Bar Chart. They are use to measure frequency distribution
of data that is normally grouped together in ranges or ‘bins’.
Most frequently they are used to tell the different regularity of occurence in long
lists of data.
Histograms shows patterns that fall within typical process conditions.
Changes in a process should trigger new collection of data.
Bar represents many observations, a histogram is most useful with a large amount
of data.
CONTROL CHARTS
Dating back to the work of Shewhart and Deming, there are several types of Control
Chart.
They are practically complex statistical tools that measure how a process changes
over time.
Control Chart focuses on monitoring performance overtime by looking at the

variation in data points and, distinguishes between common cause and special
cause variations.
The Dow Jones Industrial Average is a good example of a control chart.
Control Charts are the most complicated of the basic tools of TQM, but are based
on simple principles.
The charts are made by plotting in sequence the measured values of samples taken
from a process.
CONTROL LIMITS
These are values that sample measurements are not expected to exceed unless
some special cause changes the process.
A sample measurements within the control limits therefore indicates that the
process is no longer stable, and is usually reason for the corrective action.
SCATTER DIAGRAM
This is used to identify whether there is a relationship between two variables. It
does not prove that one variable directly affects the other, but is highly effective in
confirming that a relationship exists between the two.
Scatter Diagram is a graphical representation of how one variable changes with

respect to another.
The variables are plotted on axes at right angles to each other and the scatter in
the points gives a measure of confidence in any correlation shown.
FLOW CHART
It is a visual representation of a process. It is not statistical, but it is used to piece
together the actual process as it is carried out , which quite often varies fromhow
the process owner imagines it is.
Flow chart is used when trying to determine where the bottlenecks or breakdowns
are in work processes.
This is sometimes called process map, can be used to help the company model its
process and understand and communicate all activities in the process.
For further discussion please refer to the link provided: TQM AND PLANNING TOOLS
https://www.youtube.com/watch?v=JjJDxNCu58A
For further discussion please refer to the link provided Fishbone Cause and effect
https://www.youtube.com/watch?v=mLvizyDFLQ4
Reference:
CHAPTER 8
CUSTOMER VALUE STRATEGY
Objectives:
1. Differentiate between internal and external customer

2. Describe customer satisfaction and its nature
3. define customer focus
4. Explain customer service
Identifying Customers
There are two distinct types of customers namely:
Internal Customers are within the company. They are the colleagues working
together for delivering a service or product for the external.
External Customer may be an individual or an enterprise that hires or purchases
the product or services from another person or business in exchange of money.
External Customers can be defined in many ways, such as:
1. The one who use the product or service.
2. The one who purchases the product or service.
3. The one who influences the sale of the product or service.
One of the most important factors for the success of an enterprise is its
customers.
Without them, a business cannot exist.
Customer Satisfaction
It is not an absolutely measures but more of a feeling or attitude.
It enhances Customer loyalty, which is the feeling of attachment to affection for a
company’s people, product or services.
Loyalty generates constant purchases and increased revenues, therefore leading
to organizational excellence.
Satisfaction can be expressed in many ways, like positive word of mouth, giving
compliments to the service provider and brand loyalty to the service organization.
Customer Satisfaction is defined as the number of customers, or percentage of
total customers, whose reported experience with a firm, its products or its services
exceeds specified satisfaction goals.
Customer delight arises when perceptions exceed expectations. External customer
satisfaction shows the extent to which the organization:
1. Uses methods for determining and monitoring external customers’
perceived quality and value.
2. Uses customer feedback to improve product/service quality.
3. Handles complaints, resolve them and uses complaint information for quality
improvement.
4. Measures performance against customer targets.
5. Compares the customer satisfaction results with that of main competitors.
A Summary of Ways to Improve Internal Customer Satisfaction is Given Below:
1. Treat employees as the company would treat its customers.
2. Share the company vision.
3. Surpass their expectation.
4. Take feedback and suggestions.
5. Show appreciation for good work.
Customer Satisfaction Methods
1. Encouraging face-to-face dealings with customers.
2. Respond to messages promptly and keep the clients informed.
3. Being friendly and approachable by customers.
4. Have a clearly-defined customer service policy.
Approaches To Customer Satisfaction
1. Regular Customer feedback system

2. Market Research
3. New or Last Customer survey
4. Focus Groups
5. Customer Visits
6. Front Line personnel
7. Critical Incidents technique
Determinants of Customer Satisfaction
1. Key Indicators for Physical Products
a. Reliability
b. Aesthetics
c. Adaptability
d. Usability
e. Functionability
f. Appropriateness
2. Key Indicators for Services
a. Friendliness/Courteousness of employees
b. Safety/Risk of Service
c. Billing/Invoicing procedure
d. Responsiveness to Requests
e. Appearance of Physical Facilities
f. Approchability of the Service Provider
g. Willingness to Listen to Customer
h. Honesty and an ability to communicate in clear language
Customer Focus
Focusing on the customer involves designing products or services that meet or
exceed the customers’ expections.
This involves the product itself, its functionality, attributes, convenience and even
the means by which the information about a product is received by a client.
Customer Service
Quality Assurance means developing operational controls to ensure that the
results match the desired outcomes.
Customer Service operations are designed to keep customers satisfied while
protecting the organization.
Customer Service Quality Goals
Customer Service means helping customers solve problems.
The company can define quality assurance in customer service as a means to
evaluate the characteristics that make customer service effective.
Reliability
The quality assurance system must survey customers regularly to determine their
expectations so the system can match against promises and deliveries.
For use a gauge of reliability, the survey must specifically ask how well the company
service met the customers’ expectations.
Competence
Customers expect competent delivery of their services, and the definition of quality
assurance includes tracking competence.
Quality assurance systems evaluate competence by training and results.
Delivery
Customers expects reliable and competent delivery in an easily accessible form.
Customer Service Delivery is typically over the phone or others means of electronic
communication.
Solutions
Customers are mainly interested in solutions to their problems.
Quality assurance includes documenting customer complaints, tracking the actions
taken to resolve them and surveying customers on their satisfaction with the result.
The Quality assurance system compares high levels of reliability, competence and
delivery quality with the level of customer satisfaction. The system checks for
discrepancies.
For further discussion please refer to the link provided: CUSTOMER VALUE STRATEGY
https://www.youtube.com/watch?v=9I2baWR-rqg
For further discussion please refer to the link provided Determinants of Customer Satisfaction
https://www.youtube.com/watch?v=8EeiY24AJdc
Reference:
CHAPTER 9
QUALITY STANDARDS
Objectives:
1. Recognize the quality using Malcolm Baldridge and International

organization for Standardization ISO.
2. Differentiate between quality standard of Malcolm Baldridge and
International organization for Standardization ISO.
Quality Standards
 In essence, a standard is an agreed way of doing something. It could be about
making a product, managing a process, delivering a service or supplying materials.
 Standards are important in international trade because incongruent standards can
be barriers to trade, giving some organizations advantages in certain areas of the
world.
 Standard provide clear identifiable references that are recognized internationally
and encourage fair competition in free- market economies.
Quality Awards and Standards
MALCOLM BALDRIDGE
The Malcolm Baldridge Award is a United States quality award that covers an
extensive list of criteria evaluated by independent judges. The award is given to those
companies that productively dare and meet the requirements. The requirements and the
evaluation process should be very parallel to the Deming Prize system to be successful.
The award is named after the secretary of commerce under the Reagan administration;
Malcolm Baldrigde.
Criteria to become Baldridge Awardees
The evaluation for the award consists of meticulous set of criteria named the
Criteria for Performance Excellence with the intention to persuade firms to enhance their
competitiveness using an aligned approach to organizational performance management
with the following outcomes:
1. Delivery of increasingly improving vale, adding to market place success.
2. Enhancement of the general company performance and capabilities.
3. Learning on organization and personal level.
The criteria to address are categorized as:
1. Leadership- examines how senior executives guide the organization and how the
organization addresses its responsibilities to the public and practice good
citizenship.
2. Strategic planning- examines hoe the organization sets strategic directions and
how it determines key action plans.
3. Customer focus- examines how organization determines requirements and
expectations of customers and markets; builds relationships with customers; and
acquires, satisfies, and retains customers.
4. Measurement, analysis and knowledge management- examines the
management effective use, analysis and improvement of data and information to
support key organization processes and the organization’s performance
management system.
5. Workforce focus- examines how the organization enables its workforce to
develop its full potential and how the workforce is aligned with the organization’s
objectives.
6. Process management- examines aspects of how key production/ delivery and
support processes are designed, managed and improved.
7. Results- examines the organization’s performance and improvement in its key
business areas; customer satisfaction, financial and marketplace performance,
human resources, supplier and partner performance, operational performance and
governance and social responsibility. The category also examines how the
organization performs relatively to competitors.
Evaluation process
The scoring of responses to Criteria Items and Award applicant feedback are
based on two evaluation dimensions namely process and results. The specific factors for
process are approach, deployment, learning, and integration, are described below;
1. Approach- refers to the methods used by an organization to address the Baldridge
Criteria Items requirements.
2. Deployment- refers to the extent to which an approach is applied in addressing
the requirements of the Baldridge Criteria Item. Deployment is evaluated on the
basis of the breadth and depth of application of approach to relevant work units
throughout the organization.
3. Learning- refers to new knowledge or skills acquired through evaluation, study,
experience and innovation. Organizational learning is achieved through research
and development, evaluation and improvement cycles, ideas and input from
employees, customers ideas and input, faculty, staff, students, patients, and other
stakeholders; best practice sharing; and benchmarking.
4. Integration- refers to the harmonization of plans, processes, information,
resources decisions, actions, results, and analysis to support key organization-
wide goals.
ISO STANDARDS
The International Organization for Standardization (ISO) is an international
standard-setting body composed of representatives from various national standards
organizations.
The international Organization for Standardization (ISO) is non-governmental
network of national agencies whose purpose is the development of international
standards for business and government.
Different Types of ISO

 Quality management
The ISO 9000 family addresses various aspects of quality management and
contains some of ISO’s best known standards. The standards provide
guidance and tools for companies and organizations who want to ensure
that their products and services consistently meet customer’s requirements,
and that quality is consistently improved.
 Environmental management
ISO 14001:2004. This ISO standard is the basis of development of an
environmental management system (EMS). An EMS is a set of guidelines
and procedures developed by an organization to ensure compliance.
ISO 14004:2004. This ISO standard provides more specific information for
implementation and maintenance of an EMS, with the aim to continually
improve the plan based on its performance.
ISO 5001. This yet-to-be-released standard will address energy
management and ways to increase energy efficiency and reduce
environmental impact of organizations.
 Health and Safety
ISO 22000. This ISO standard sets global guidelines for food safety and
handling. Major corporations have embraced this standard, including Arla
Foods and Kraft Foods. Its aim is to focus on the entire food chain and
reduce hazards and safety issues such food-borne illnesses.
 Transportation
ISO/TS 16949. This standard reviewed all areas of the automotive industry
supply chain.
ISO/PAS 30003: 2008. This standard looks at specific concerns within
shipping and marine technology.
 Social Responsibility
ISO 26000. This standard assures that business and organizations do not
operate in a vacuum. Their relationship to the society and environment in
which they operate is a critical factor in their ability to continue to operate
effectively.
ISO 26000:2010. This standard provides guidance rather than
requirements so it cannot be certified to unlike some other well-known ISO
standards. Instead, it helps clarify what social responsibility is.
 Energy Management
ISO 50001. Using energy efficiently helps organizations save money as well
as helping to conserve resources and tackle climate change.
ISO 50001:2011. This is based on the management system model of
continual improvement also used for other well-known standards such as
ISO 9001 or ISO 14001.
 Risk Management
ISO 31000. This standard is about the risk affecting organizations that can
have consequences in terms of economic performance and professional
reputation, as well as environmental, safety and social outcomes.
ISO 31000:2009. This standard offers principles and guidelines, provides
principles framework and a process for managing risk.
 Food and Safety Management
ISO 22000. The ISO 22000 family of International Standards addresses
food safety and management. The consequences of unsafe food can be
serious and ISO’s food safety management standards help organizations
identify and control food safety.
 Information Security Management
ISO/IEC 27001. The ISO 27000 family of standards helps organizations
keep information assets secure. Using this family of standards will help the
organization manage the security of assets such as financial information,
intellectual property, employee details or information entrusted to you by
third parties.
 Occupational Health and Safety

ISO 45001. Over 63000 people die each day from work-related accidents
or diseases that nearly 2.3 million every year. The burden of occupational
injuries and diseases is significant, both for employers and the wide
economy, resulting in losses from early retirement, staff absence and rising
insurance premiums.
 Anti- Bribery management System
ISO 37001. This is the future anti-bribery management systems, specifies
a series of measures to help organizations prevent, detect and address
bribery. This include adopting an anti-bribery policy, appointing a person to
oversee anti-bribery compliance, training, risk assessments and due
diligence on projects and business associates, implementing financial and
commercial controls and instituting reporting and investigation procedures.
 Medical Devices
ISO 13485. Safety and quality are non-negotiable in the medical devices
industry. Regulatory requirements are increasingly stringent throughout
every step of a product’s life cycle, including service and delivery.
Registration Steps to become ISO Certified
1. Finding an ISO 9001 Registrar

There is a need to begin searching for an ISO registrar during 2 to 3 months
the company is still building its quality the quality system. Search can be done in
the ANSI- ASQ National Accreditation Board (ANAB) to select the registrar right
for the company.
2. Selecting an ISO Registrar
A company applying for registration should select a registrar that his
experience within the scope category of its specific industry, which can be found
also on the ANAB site.
3. Creating an ISO Application
A company and a registrar will agree on the application contract. This is an
important step of the ISO Registration Process because it defines the rights and
obligation of both parties, and includes liability issues, confidentiality and access
rights.
4. Conducting a Quality Document review
The registrar will require a copy of the company quality manual and
procedures to verify that all the requirements of the standard are addressed.
5. Determining Pre-assessment Need
Though optional, this 2-4 weeks initial review of the system identifies any
significant omissions or weaknesses. It saves time and allows the registrar to
assess any issues and resolve logistics before the actual assessment audit.
6. Issuing an ISO Assessment
During the audit or physical onsite inspection of procedures in action, the
auditors will issue findings if they assess anything that doesn’t meet requirements
or nonconformities. In general, the flow of activities during the audit are as follows:
a) Opening Meeting- an introduction of the audit team and key personnel in
the company.
b) Brief tour of the Facility- keep it brief, the auditors just want to get general
feel for the layout and processes involved.
c) Additional review of documents- audit team members review
documentation for areas they will audit.
d) Examination- the audit is conducted, personnel are interviewed, and
objective evidence is collected to show the system has been effectively
implemented.
e) Daily review- at the end of each day or the beginning of the next, the audit
team reviews any issues identified during the assessment.
f) Closing Meeting- the audit team states their conclusion regarding the audit
and presents any findings or nonconformities that were identified along with
any observations they may have.
g) Audit Report issued- within a few weeks of the audit, the Registrar issues
the audit report. The report generally restates what was discussed in the
closing meeting.
Audit findings are usually called nonconformities and fall into one of two categories
depending in severity.
1. A Minor Nonconformance deals with minor infractions of procedures or
minor failures of the system in meeting the ISO 9001:2008 requirements.
These will not hold up the registration.
2. A Major Nonconformance deals with issues where nonconforming product
is likely to reach the customer or where there is a breakdown in the Quality
System that results in the system not being effective in meeting the
requirements of the standard. This will hold up the registration.
7. Completing ISO 9001 Registration

After all of the findings are put into the ISO audit report and nonconformities
are addressed, the registering company has the option to register as ISO 9001
conformant. The company will receive a certificate and can also be listed in a
register, which the company can use to publicize its registration and use in
advertising.
8. Checking with Surveillance Auditor
To ensure that the system is maintained and that changes don’t result in
deficiencies in the system, registrars perform regular surveillances of the system.
For further discussion please refer to the link provided: Quality Standards
https://www.youtube.com/watch?v=EI2Mgrvq0Us
For further discussion please refer to the link provided ISO 9001
https://www.youtube.com/watch?v=FDyIcM-AFzU
Reference:
CHAPTER 10
FORCASTING DEMAND
Objectives:
1. Identify the Forecasting.

2. Recognize Influence of Product Life Cycle
WHAT IS FORECASTING?
Every day, managers like those at Disney make decisions without knowing what will
happen in the future. They order inventory without knowing what sales will be, purchase
new equipment despite uncertainly about demand for products, and make investments
without knowing what profits will be. Managers are always trying to make better estimate
of what will happen in the future in the face of uncertainty. Making good estimates is the
main purpose of forecasting.
Forecasting is the art and science of predicting future events. Forecasting may involve
taking historical data and projecting them into the future with some sort of mathematical
model. It may be subjective or intuitive prediction. Or it may involve a combination of these
that is, a mathematical model adjusted by a manager’s good judgment.
Forecasting Time Horizons

A forecast is usually classified by the future time horizon that it covers. Time horizons fall
into three categories:
1. Short-range forecast: This forecast has a time span of up to 1 year but is generally
less than 3 months. It is used for planning purchasing, job scheduling, workforce levels
, job assignments, and production levels/
2. Medium-range forecast: A medium-range, or intermediate, forecast generally spam
from 3months to 3 years. It is useful in sales planning, production planning and
budgeting, cash budgeting, and analysis of various operating plans.
3. Long-range forecast: Generally 3 years or more in time span, long-range forecasts

are used in planning for new products, capital expenditure, facility locations or
expansion, and research and development.
The Influence of Product Life Cycle

Another factor to consider when developing sales forecasts, especially longer ones, is
product life cycle. Products, and even services, do not sell at a constant level throughout
their lives. Most successful product pass through four stages: (1) introduction, (2) growth,
(3) maturity, and (4) decline.
Types of Forecasts
organizations use three majors’ types of forecasts in planning future operations:
1. Economic forecasts address the business cycle by predicting inflation rates, money
supplies, housing starts, and other planning indicators. Planning indicators that are
valuable is helping organization prepare medium to long-range forecasts.
2. Technological forecast are concerned with rates of technological progress, which
can result in the birth of exciting new products, requiring new plants and equipment.
Long-tern forecast concerned with the rates of technological progress.
3. Demand forecasts are projections of demand for a company’s product or services.
These forecasts, also called sales forecasts, drive company’s production, capacity,
and scheduling systems and serve as inputs to financial, marketing, and personnel
planning. Projections of a company’s sales for each time period in the planning
horizon.
THE STRATEGIC IMPORTANCE OF FORECASTING

Good forecasts are of critical importance in all aspects of business: The forecast is the
only estimate of demand until actual demand becomes known. Forecasts of demand
therefore drive decisions in many areas/ let’s look at the impact of product demand
forecast on three activities: (1) human resources, (2) capacity, and (3) supply-chain
management.
Human Resources
Hiring, training, and laying off workers all depend on anticipated demand. If the human
resources department must hire additional workers without warning, the amount of
training decline and the quality of workforce suffers. A large Louisiana chemical firm
almost lost its biggest customer when a quick expansion to around-the-clock shifts led to
a total breakdown in quality control on the second and third shift.
Capacity
When capacity is inadequate, the resulting shortages can lead to loss of customers and
market share, this is exactly what happened to Nabisco when it underestimated the huge
demand for its new low-fat Snackwell Devil’s Cookies. Even with production line working
overtime, Nabisco could not keep up with demand, and it lost customers. As the photo on
the next page shows, Amazon made the same error with its Kindle. On the other hand,
when excess capacity exists, cost can skyrocket.
SEVEN STEPS IN THE FORECASTING SYSTEM

Forecasting follow seven basic step. We use Disney World, the focus of this chapter’s
Global Company Profile, as an example of each step:
1. Determine the use of the forecast: Disney uses park attendance forecasts to drive
decisions about staffing, opening time, ride availability, and food supplies.
2. Select the item to be forecasted: For Disney World, there are six main parks. A
forecast of daily attendance at each the main numbers that determines labor,
maintenance, and scheduling.
3. Determine the time horizon of the forecast: it is short, medium, or long term? Disney
develops daily, weekly, monthly, annual, and 5-year forecasts.
4. Select the forecast model(s): Disney uses a variety of statistical models that we shall
discuss, including moving averages, econometrics, and regression analysis. It also
employs judgmental, or nonquatitative, models.
5. Gather the data needed to make the forecast: Disney’s forecasting team employs 35
analysts and 70 field personnel to survey 1 million people/businesses every year.
Disney also uses a firm called Global insight for travel industry forecasts and gathers
data on exchange rates, arrivals into U.S., airline specials, Wall Street trends, and
school vacation schedules.
6. Make the forecast.
7. Validate and implement the results: At Disney, forecasts are reviewed daily at the
highest level to make sure that the model, assumptions, and data are valid. Error
measures are applied; then the forecast are used to schedule personnel down to15-
minutes intervals.
FORECASTING APPROACHES
There are two general approaches to forecasting, just as there two ways to tackle all
decision modeling. One is a quantitative analysis; the other is a qualitative approach.
Quantitative forecast:
forecasts that employ mathematical modeling to forecast demand.
Qualitative forecast:
forecasts that incorporate such factors as the decision maker’s intuition, emotions,
personal experience, and value system.
Overview of Qualitative Methods
In this section, we considered four different qualitative forecasting techniques:
1. Jury of executive opinion: under this method, the opinions of a group of high-
level experts or managers, often in combination with statistical models, are pooled
to arrive at a group estimate of demand. A forecasting technique that uses the
opinion of a small group of high-level managers to form a group estimate of
demand.
2. Delphi method: There are three different types of participants in the Delphi
method: decision makers, staff personnel, and respondents. Decisions makers
usually consist of a group of 5 to 10 experts who will be making the actual forecast.
Staff personnel assist decision makers by preparing, distributing, collecting, and
summarizing a series of questionnaires and survey results. A forecasting
technique using a group process that allows experts to make forecast.
3. Sales force composite: In this approach, each salesperson estimate what sales
will be in his or her region. These forecasts are then reviewed to ensure that they
are realistic. Then they are combined at the district and national level to reach an
overall forecast. A variation of this approach occurs at Lexus, where every quarter
Lexus dealers have a “make meeting”. At this meeting, they talk about what is
selling, in what colors, and with what colors, and with what options, so the factory
knows what to build. A forecasting technique based on salesperson ‘estimates of
expected sales.
4. Consumer market survey: This method solicits input from customers or potential
customers regarding future purchasing plans. A forecasting method that solicits
input form customers regarding future purchasing plans.
Time-Series Models- Time–series models predict on the assumption that the future is
a function of the past. In other words, they look at what has happened over a period of
time and use a series of past data to make a forecast. If we are predicting sales lawn
mowers, we use the past sales for lawn mowers to make forecasts.
Associative Models- Associative models, such a linear regression, incorporate the
variables or factors that might influence the quantity being forecast. For example, an
associative model for lawn mowers sale might use factors such as new housing starts,
advertising budget, and competitors’ prices.
Decomposition of a Time Service
Analyzing time series means breaking down past data into components and then
projecting them forward. A time series has four components:
1. Trend is the gradual upward or downward movement of the data over time.
Changes in income, populations, age distribution, or cultural views may account
for movement in trend.
2. Seasonality is a data pattern that repeats itself after a period of days, weeks,
months, or quarters. There are six common seasonality pattern:
Period of “Season” Number of “Seasons”

Pattern Length in Pattern
Week Day 7
Month Week 4-41/2
Month Day 28-31
Year Quarter 4
Year Month 12
Year Week 52
Restaurants and barber shops, for example, experience weekly seasons, with Saturday
being the peak of business. See the OM in Action box “Forecasting at Olive Garden and
Red Lobster.” Beet distributors forecast yearly pattern, with monthly seasons. Three
“seasons” – May, July, And September –each contain a big beer-drinking holiday.
3. Cycles are patterns in the data that occur every several years. They are usually
tied into the business cycle are of major importance in short-term business analysis
and planning. Predicting business cycles is difficult because they may be affected
by political event or by international turmoil.
4. Random variations are “blips” in the data caused by chance unusual situations.
They follow no discernible, so they cannot predicted.
Naïve Approach
The simplest way to forecast is to assume that demand in the next period will be equal to
demand in the most recent period. A forecasting technique which assumes that demand
in the next period is equal to demand in the most recent period.
Moving Averages
A moving-average forecast uses a number of historical actual data values to generate a
forecast.
Moving averages are useful if we can assume that market demands will stay fairly steady
over time. A forecasting method that uses an average of the n most recent periods of data
to forecast the next period.
Seasonal Variations in Data
Seasonal variations in data are regular up-and-down movements in a time series that
relate to recurring event such as weather or holidays. Demand for coal and fuel oil, for
example peaks during cold winter months.
For further discussion please refer to the link provided: Forecasting

https://www.youtube.com/watch?v=rzGN1db8lks
For further discussion please refer to the link provided FORECASTING APPROACHES
https://www.youtube.com/watch?v=nnK14UvNVFA
Reference:

Operations Management TQM

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Operations Management TQM

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MODULE TQM (Operation Management)

Introduction to the Course

It is the management philosophy , a continuous improvement

Cost of quality is a method that permits an organization to decide on the level to

 s, poor organization, or communication.

1. Identify the eight dimension of product quality.

DIMENSION OF PRODUCT QUALITY

1) Vibration testing – the vibration environment to which product

• Reliability – is the ability to perform the promise service

1. Identify the different quality gurus in quality management.

Dr. William Edwards Deming

 He modified the Shewart PDSA (plan, do, study, act)

2. Stress on short-term profit; short-term thinking that is driven by a fear of unfriendly

He developed a 14-step Methodology:

11. Error-cause removal - To offer individual employees a way of communicating to the

Which aspect of the Quality Trilogy is most vital ?

It’s like asking “Which leg of a stool is most important ?”

Juran propounded the following message on quality:

Juran’s formula consists of:

3. Such constant problems are traceable to a poor quality planning process.

Breakthrough” activities or quality improvement include:

8. Breakthrough in performance – getting agreement to take action;

3. Setting a goal for the control subject;

“Planning” activities include:

4. Develop product features

Dr. Walter Andrew Shewart

 Edna Hart is his wife

He is given the credit to the formation of the idea of total

administration (1961) and his article Total Quality Control (1956).

Feigenbaum 10 points on TQM include:

 Quality is what fits the customer and right price.

 Though inspiring and pushing everybody in an organization to realize their

4. Using facts and data to make presentations - use of statistical methods

 He is a Japanese quality expert known for his work of product design.

4. A product or process performance variation can be lessened.

8. Perform the confirmation experiment and prepare future actions.

Dr. Shingo Shigeo

1. Just in time (JIT)

3. Zero Quality Control (ZQC)

- This Technique can use by the following principle.

 The Founder and President of Kaizen Institute who V

1. Good processes carry good results.

4. Take action to contain and remedy root causes of problems.

1. Define Kaizen as a philosophy

-Kaizen at the workplace means continuing improvement.

• Gemba Kaizen (actual workplace)- is an action-oriented approach and refers to

-Improvement function is aimed at improving current standards.

Table 2 The Features of Process and Result criteria

5. Measurement of tasks delegated

1. Management becomes possible

4. Problems are prevented from recurring and control variability

2. Decrease or eliminates setup times.

6. Flexible work force

1. Batch production system is the most inefficient way to make products.

Total Productive Maintenance

-one of the main objectives of TPM is to increase the productivity.

And was awarded by Japanese Institute of Plant Engineer (JIPE)

Eight pillars of TPM

6. Early equipment management

-means that people waits until equipmetfails and repair it.

- people follow policies, good or bad.

- is regarded as individual-oriented kaizen

1. Important ones own work and the working environment