At present, due to tough competition, we need to be able to do three things well,

all at the same time!

The challenge

Reduce Cost Reduce Lead Time Improve Quality

Production Costs

Customer Price

Net Margin

“Cheaper” “Faster” “Better”

Quality

The standard of something as measured against other things of a similar kind

and the degree of excellence of something
Joseph Juran’s approaches to quality

Meaning of Quality

Producer’s Perspective Consumers’ Perspective

➢ Conformance to ➢ Quality characteristics

specifications ➢ Low price
Production ➢ Low cost Marketing

Fitness for
Consumer Use
Joseph Juran’s approaches to quality: Consumer vs
producer perspective

➢ Marketing teams and customers view quality in terms of satisfying customer

needs and meeting customer expectations
➢ Operational teams view quality in terms of conformance to specification
Joseph Jurans’ approaches to quality: Quality characteristics

➢ It is from the perspective of consumers

➢ Quality refers to a set of characteristics, customers expect from products or
services in low cost
➢ It is a combination of various factors such as performance, features durability,
reliability, serviceability, aesthetics, safety, timeliness etc.
Joseph Jurans’ approaches to quality: Quality characteristics

➢ Performance: Basic operating characteristics of a product

➢ Features: Extra items, added to basic features
➢ Durability: Time duration that product lasts before replacement
➢ Reliability: Probability that a product will operate properly within an expected
time frame
➢ Serviceability: Ease of getting repairs, speed of repairs
➢ Aesthetics: Looks, feels, sounds, smells or tastes of a product
➢ Safety: Assurance that customers will not suffer injury or harm from a
product
➢ Timeliness: Availability and/or delivery of products or service by stipulated
time
Joseph Juran’s approaches to quality: Conformance to
specification
➢ It is from the perspective of producers
➢ Quality of conformance to specification is the ability of a product, service, or
process to meet its design specifications i.e., certain design standards set by
the producer
➢ Design specifications are an interpretation of what the customer needs
➢ It also implies a measure of how well a product or service meets its purpose
Joseph Juran’s approaches to quality: Conformance to
specification
➢ At present competitive market, it’s not enough for a business to just produce
products or deliver service
➢ In order for them to sell, they must be sellable, of good quality and they must
meet the standards that the customers demand of them
➢ You can introduce a cheap/affordable product, but if it’s not of sufficient
quality, its’ likely it won’t sell
➢ When selling a product or service, a business needs to make sure that it
meets the standards that are set for it
➢ E.g., A business wants to introduce an affordable alternative to high-end
luxury phones without compromising too much in performance
➢ To do that, the business needs to find ways to lower the price
Quality: Order winner vs order qualifier

➢ Quality is no longer an order winner, it is merely an order qualifier (minimum

requirement)
➢ An order qualifier is the characteristics or features of the product or service
that must be offered to compete successfully in a market
➢ An order winner is a characteristic of a product or service that is unique and
better than that of competitors
What do you think?

Does maintaining quality of product or service increase or decrease the cost for
organization?
Types of cost of quality: Joseph Juran approach

Cost of quality

Cost of conformance Cost of non conformance

(Cost of maintaining quality) (Cost of not maintaining quality)

Prevention Appraisal Internal External

cost cost failure cost failure cost
Cost of conformance: Prevention vs appraisal cost

➢ Prevention costs are the costs of planning, training, designing, and

implementing quality activities to avoid defects or poor quality is not produced
➢ Those costs incurred to remove and prevent defects from occurring in the production
process
➢ Appraisal costs are the costs of inspecting, testing, auditing, and measuring
quality to identify defects
➢ Those costs incurred to identify poor quality products after they occur but before
shipment to customers.
➢ Both types of costs are necessary to ensure quality, but they also have a
trade-off
Cost of non conformance: Internal vs external failure cost

➢ Internal failure costs are the expenses incurred to remedy defects discovered
before the customer receives the product or service
➢ Examples of internal failure costs include scrapping a product, reworking the product,
and lost productivity due to machine breakdowns or labor errors
➢ External failure costs are the expenses incurred to remedy defects
discovered by customers after the customer receives the product or service
➢ Examples include processing customer complaints, customer returns, warranty claims,
product recalls.
Boeing 737 Max crash: External failure

➢ A total of 346 people were killed in two fatal Boeing 737 MAX crashes -
including the earlier October 2018 Lion Air crash in Indonesia
➢ The Ethiopian Airlines crash prompted the worldwide grounding of the MAX in
March 2019 for 20 months, costing Boeing more than $20 billion
➢ On January 7, 2021, Boeing settled to pay over $2.5 billion after being
charged with fraud over the company's hiding of information from safety
regulators: A criminal monetary penalty of $243.6 million, $1.77 billion of
damages to airline customers, and a $500 million crash-victim beneficiaries
fund.
The consequences of poor quality: Not maintain quality

➢ Loss of business: Customer quietly stops buying.

➢ Liability: Due to service failure: damages or injuries i.e., resulting from poor
quality design the organization needs to pay some liability
➢ Low productivity: Rework or scrap increases the cost and leads to low
productivity
➢ High costs
➢ High internal failure cost
➢ High external failure cost
Research result

➢ In average, cost of non conformance (Cost of not maintaining quality) is 20 to

35% of revenue generated
➢ Where as, in average, Cost of conformance (Cost of maintaining quality) is 3
to 4% of revenue generated
➢ These evidences show that overall cost of conformance (Cost of prevention
and cost of appraisal) is lower than overall cost of non conformance (Cost of
internal failure and cost of external failure)
➢ Thus, there is inverse (negative) relationship between quality and cost i.e.,
when quality is maintained the cost is lower in long run
Relationship: Quality, sales, cost and profit

Sales Gains via

➢ Improved customer response
➢ Improved brand reputation
➢ Flexible pricing (Either charge low or
high price)
Improved Increased
Quality Profits
Reduced Costs via

➢ Increased productivity and efficiency

➢ Lower rework and scrap costs
➢ Lower warranty costs

Maintaining and/or improving quality helps firms increase sales, reduce costs
and increase the profitability
Conformance to specification: Statistical process control
steps
SPC 1. Conformance to specification: Statistical process
control
A shampoo manufacturer operates five hours a day and the quality inspector
collects the four sample each hour out of 2000 production. State whether the
production process is under control or not. Develop X bar chart and R chart
and comment your result. Draw the control charts and plot as well.

Sample no Quantity in ml
1st hour 60.6 62 60.4 61
2nd hour 61 59.5 59.8 60.5
3rd hour 60.3 59 59.5 60
4th hour 60.3 60.5 61 59.4
5th hour 61.2 64 62 60

Note: Here No. of Sample is (N/K) = 5 and sample size/no of observation in each sample
(n) = 4
SPC 1

Sample no Quantity in ml
1st hour 60.6 62 60.4 61
2nd hour
3rd hour
4th hour
5th hour
SPC 1

Sample no Quantity in ml
1st hour 60.6 62 60.4 61
2nd hour 61 59.5 59.8 60.5
3rd hour
4th hour
5th hour
SPC 1

Sample no Quantity in ml
1st hour 60.6 62 60.4 61
2nd hour 61 59.5 59.8 60.5
3rd hour 60.3 59 59.5 60
4th hour
5th hour
SPC 1

Sample no Quantity in ml
1st hour 60.6 62 60.4 61
2nd hour 61 59.5 59.8 60.5
3rd hour 60.3 59 59.5 60
4th hour 60.3 60.5 61 59.4
5th hour
SPC 1

Sample no Quantity in ml
1st hour 60.6 62 60.4 61
2nd hour 61 59.5 59.8 60.5
3rd hour 60.3 59 59.5 60
4th hour 60.3 60.5 61 59.4
5th hour 61.2 64 62 60
SPC 1
Solution
Given,
N=5
n=4
Sample Sample
Sample no Quantity in ml ഥ)
mean (𝑿 range (R)
1st hour 60.6 62 60.4 61 61 1.6
2nd hour 61 59.5 59.8 60.5 60.2 1.5
3rd hour 60.3 59 59.5 60 59.7 1.3
4th hour 60.3 60.5 61 59.4 60.3 1.6
5th hour 61.2 64 62 60 61.8 4
ഥ = 𝟑𝟎𝟑
𝜺𝑿 𝜺𝑹 = 𝟏𝟎
For mean chart/𝑋ധ

Now
ത
ധ 𝜀𝑋 =
𝑋=
303
= 60.6 𝑚𝑙
𝑁 5
𝜀𝑅 10
𝑅ത = = =2
𝑁 5
ത chart
➢ Calculating control limits for mean (𝑋)
CL= 𝑋ധ = 60.6 ml
UCL=𝑋ധ + A2 𝑅=
ത 60.6 + 0.729 * 2 = 62.06 ml
LCL=𝑋ന - A2 𝑅=
ത 60.6 – 0.729 * 2 = 59.20 ml
Important formulae

Calculation of X bar chart and R chart when Calculation of X bar chart and R chart
Population mean & Standard deviation are when Population mean and Standard
given. deviation are not given.
For X bar chart For X bar chart
CL=µ CL=𝑋ധ
UCL=µ+3σ/ 𝑛 ധ 2 𝑅ത
UCL=𝑋+𝐴
LCL=µ-3σ/ 𝑛 ധ 2 𝑅ത
LCL=𝑋-𝐴
For R chart For R chart
CL=𝑑2 σ CL=𝑅ത
UCL=𝐷2 σ UCL=𝐷4 𝑅ത
LCL=𝐷1 σ LCL=𝐷3 𝑅ത

Where d2, D2, D1, A2, D4 and D3 are constant values based on the sample
size. This will be given in last page of the Operations Management book.
Control chart factors: To determine the value of A2
For R chart

➢ Calculating control limits for range (R) chart

ത 2
CL=𝑅=
UCL=D4 𝑅ത = 2.282 * 2 = 4.564
LCL=D3 𝑅ഥ = 0 * 2 = 0
Plotting mean chart
Plotting R chart
Decision

Since both the mean and R charts lie within the UCL and LCL, the production
process seems to be under control. There is not any quality issue.
SPC 1. What if the question was in this way?

➢ A shampoo manufacturer operates five hours a day and the quality inspector
collects the four sample each hour out of 2000 production. State whether the
production process is under control or not. Develop X bar chart and R chart
and comment your result. Draw the control charts and plot as well.

Sample no
1st hour 2nd hour 3rd hour 4th hour 5th hour
60.6 61 60.3 60.3 61.2
Quantity in ml
62 59.5 59 60.5 64
60.4 59.8 59.5 61 62
61 60.5 60 59.4 60

Note: Here No. of Sample is (N/K) = 5 and sample size/no of observation in each sample
(n) = 4
SPC 1

Sample no
1st hour 2nd hour 3rd hour 4th hour 5th hour
60.6 61 60.3 60.3 61.2
Quantity in ml
62 59.5 59 60.5 64
60.4 59.8 59.5 61 62
61 60.5 60 59.4 60
Sample mean (𝑿 ഥ) 61 60.2 59.7 60.3 61.8 𝜀 𝑋ത =434.75
Sample range (R) 1.6 1.5 1.3 1.6 4 𝜀𝑅 =209
Statistical process control

➢ Developed by Walter Shewhart in late 1920’s

➢ Uses statistics & control charts to tell whether the production process is under
control/conformation to specification or not (Whether to stop the production
process or not)
➢ The control chart is a statistical quality control tool used in the monitoring
variation in the characteristics of a product or service (Height, weight, speed
length, strength etc. or frequency/counting of defects )
Statistical process control

➢ SPC is applied during the production process i.e. while product is being
produced
➢ In SPC, the process involves
➢ Creating standards (upper & lower limits)

➢ Measuring sample output (e.g. mean weight, height, frequency of

defects etc.)
➢ Taking corrective action (if necessary)
Control limits

➢ UCL = Process Average + 3 Standard Deviations

➢ LCL = Process Average - 3 Standard Deviations

X
UCL

+ 3
Process Average CL

- 3
LCL

SAMPLE NO
Three sigma control limits: Areas under the normal curve

The empirical rule states that 99.73% of data observed following a normal distribution lies within
3 standard deviations of the mean. Under this rule, 68.26% of the data falls within one standard
deviation, 95.44% percent within two standard deviations, and 99.73% within three standard
deviations from the mean.
Types of control charts

Control charts

Control chart for Control chart for

attributes variables

np chart X bar chart &

p chart or c chart R chart
d chart
Control chart for variables

➢ We use control chart for variables when we measure the product or service
characteristics in continuous dimensions
➢ E.g., Weight, height, speed, length, strength, etc.
➢ X bar charts are to control the central tendency of the process
➢ R-charts are to control the dispersion of the process
➢ These two charts must be used together to determine the conformance to
specification or statistical process control
SPC 2

The given data is about the weight of the noodles in each packet. Construct a
neat suitable control charts for the following data in which sample size of four
units being taken every hour out of 1500 units that is produced in an hour.
Comment whether the production process seems to under control.

Sample no 1 2 3 4 5 6
1 42 39 41 69 61 67
2 65 44 54 89 78 73
3 75 80 68 91 94 81
4 78 81 77 98 99 95

Note: Here No. of Sample is (N/K)=6 and sample size/no of observation in each sample(n)=
is 4.
SPC 2

Sample no 1 2 3 4 5 6
1 42
2 65
3 75
4 78
SPC 2

Sample no 1 2 3 4 5 6
1 42 39
2 65 44
3 75 80
4 78 81
SPC 2

Sample no 1 2 3 4 5 6
1 42 39 41
2 65 44 54
3 75 80 68
4 78 81 77
SPC 2

Sample no 1 2 3 4 5 6
1 42 39 41 69
2 65 44 54 89
3 75 80 68 91
4 78 81 77 98
SPC 2

Sample no 1 2 3 4 5 6
1 42 39 41 69 61
2 65 44 54 89 78
3 75 80 68 91 94
4 78 81 77 98 99
SPC 2

Sample no 1 2 3 4 5 6
1 42 39 41 69 61 67
2 65 44 54 89 78 73
3 75 80 68 91 94 81
4 78 81 77 98 99 95
SPC 2

Solution
Given
N=6
n=4

Sample no 1 2 3 4 5 6
1 42 39 41 69 61 67
2 65 44 54 89 78 73
3 75 80 68 91 94 81
4 78 81 77 98 99 95
Sample mean (𝑿ഥ) 65 61 60 86.75 83 79 𝜀 𝑋ത =434.75
Sample range (R) 36 42 36 29 38 28 𝜀𝑅 =209
SPC 2

Now
𝜀𝑋 ത
ധ
𝑋=
𝑁
𝜀𝑅
𝑅ത =
𝑁
ത chart
➢ Calculating control limits for mean (𝑋)
CL = 𝑋ഥ
UCL = 𝑋ധ + A2 𝑅ത
LCL = 𝑋ന - A2 𝑅ത
SPC 2

➢ Calculating control limits for range (R) chart

CL=𝑅ത
UCL=D4 𝑅ത
LCL=D3 𝑅ഥ

Do both the plotting and take decision as we did earlier.

SPC 3

A machine is set to deliver packets of a given weight in micro gram by taking

10 samples of 6 sample size and the following is recorded. (No of sample
(N/K) =10, sample size (n)=6)

Sample no 1 2 3 4 5 6 7 8 9 10
ഥ
𝑿 15 17 15 18 17 14 18 15 17 16
R 7 7 4 9 8 7 12 4 11 5

Requirement: Is the production process under control? Interpret.

SPC 4

A sample observation of 5 was taken from each sample number. From the
followings, determine whether the production process is under control or not.

Sample No. 1 2 3 4 5
ഥ
𝑿 11 12 10 11 12
R 2 3 2 5 0
Types of control charts

Control charts

Control chart for Control chart for

attributes variables

np chart X bar chart &

p chart or c chart R chart
d chart
Control chart for attributes

➢ When quality characteristics can not be measured in continuous dimensions

such as weight, height, speed etc.
➢ Then,
➢ We use control chart for attributes and if quality characteristics are measured
by classifying products as either good or bad or counting the defects in
number or frequency
➢ E.g., number of fault bulbs i.e. which do not light in a given lot, number of
wrong entry of letters or data etc.
P chart

➢ A type of control chart for attributes applied, when fraction of defectives is

used to determine the control limits
➢ P means fraction of defectives
SPC 5

From 20 samples, each of size=100 of glass vessels were inspected. The result
of the inspections is given below:

Sample No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
No. of defectives 2 1 3 0 2 3 1 2 0 4 3 2 0 4 1 7 0 1 3 1

Draw p chart and state whether the production process is under control or not.
(Where p= fraction defectives)
SPC 5

Here,
N=20
n=100
𝑁𝑜.𝑜𝑓 𝑑𝑒𝑓𝑒𝑐𝑡𝑖𝑣𝑒𝑠
P=
𝑛
𝜀𝑝 0.4
𝑃ഥ = = = 0.02
𝑁 20

Sample No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
No. of
2 1 3 0 2 3 1 2 0 4 3 2 0 4 1 7 0 1 3 1
defectives
Fraction
0.02 0.01 0.03 0.00 0.02 0.03 0.01 0.02 0.00 0.04 0.03 0.02 0.00 0.04 0.01 0.07 0.00 0.01 0.03 0.01
defectives (p)

Now,
𝜀𝑝 0.4
ഥ
𝐶𝐿 = 𝑃 = = = 0.02
𝑁 20
SPC 5

Calculating control limits

𝐶𝐿 = 𝑃ഥ = 0.02
ത
𝑃(1− ത
𝑃) 0.02(1−0.02)
𝑈𝐶𝐿 = 𝑃ഥ + 3 = 0.02 + 3 = 0.062
𝑛 100

ത
𝑃(1− ത
𝑃) 0.02(1−0.02)
𝐿𝐶𝐿 = 𝑃ഥ - 3 = 0.02 - 3 = -0.022 = 0
𝑛 100

Note: If LCL value is negative, make it ZERO “0”.

SPC 5: Plotting and decision

Since the sample fraction defectives (P) do not lie within the UCL and LCL, the
production process does not seem to be under control.
d chart or np chart

➢ A type of control chart for attributes applied when number of defectives per
sample is used to determine the control limits
➢ d or np means average no of defectives per sample
SPC 6

From 20 samples, each of size=100 of glass vessels were inspected. The result
of the inspections is given below:

Sample No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
No. of defectives 2 1 3 0 2 3 1 2 0 4 3 2 0 4 1 7 0 1 3 1

Draw d chart or np chart and state whether the production process is under
control or not.
SPC 6

Here,
N=20
n=100
𝑁𝑜.𝑜𝑓 𝑑𝑒𝑓𝑒𝑐𝑡𝑖𝑣𝑒𝑠
P=
𝑛
𝜀𝑝 0.4
𝑃ഥ = = =0.02
𝑁 20

Sample No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
No. of
2 1 3 0 2 3 1 2 0 4 3 2 0 4 1 7 0 1 3 1
defectives
Fraction
0.02 0.01 0.03 0.00 0.02 0.03 0.01 0.02 0.00 0.04 0.03 0.02 0.00 0.04 0.01 0.07 0.00 0.01 0.03 0.01
defectives (p)

Now,
CL = n𝑃ഥ = 100 𝑋 0.02 = 2
SPC 6

Calculating control limits

CL = n𝑃ഥ = 100 𝑋 0.02 = 2

𝑈𝐶𝐿 = n𝑃ഥ + 3 n𝑃ഥ ∗ (1 − 𝑃ഥ ) = 2 + 3 * 2 ∗ (1 − 0.02 ) = 6.2

𝐿𝐶𝐿 = n𝑃ഥ − 3 n𝑃ഥ ∗ (1 − 𝑃ഥ ) = 2 - 3 * 2 ∗ (1 − 0.02 ) = -2.2=0

SPC 6:Plotting and decision

Now draw control chart by plotting the no of defectives of 20 samples and interpret the
result.
C chart

➢ In some cases, there might be more than one defect in a single product or
service
➢ Therefore, C chart is a type of control chart for attributes applied when
number of defectives per unit of measure is used to determine the control
limits
SPC 7

The following table shows the number of defects observed in 10 silver plates.
Calculate control limits for c chart and interpret.

Plate No 1 2 3 4 5 6 7 8 9 10
No. of defects in each plate 7 10 8 12 9 7 10 9 10 8
SPC 7

Here,
N=10
𝑇𝑜𝑡𝑎𝑙 𝑛𝑜.𝑜𝑓 𝑑𝑒𝑓𝑒𝑐𝑡𝑠 90
𝐶ҧ = = =9
𝑁 10
➢ Calculating the control limits
CL = 𝐶ҧ = 9
𝑈𝐶𝐿 = 𝐶ҧ + 3 𝐶ҧ = 9 + 3 9 = 18
𝐿𝐶𝐿 = 𝐶ҧ − 3 𝐶ҧ = 9 - 3 9 = 0
Now draw control chart by plotting the no of defectives in each plate of
10 plates and interpret the result.
SPC 8

Eighteen rolls of coiled wire were monitored and the number of defects per roll
has been recorded in the following table. Is the process in control?

Sample 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
No. of defects 3 2 4 5 1 2 4 1 2 1 3 4 2 4 2 1 3 1
SPC 9

From the information given below.

a. Find out control limit as per the fraction of defectives.
b. Compute the three sigma control limits, develop the np control chart and
test the process for control.

Sample No 1 2 3 4 5 6 7 8 9 10
No of items in each sample 100 100 100 100 100 100 100 100 100 100
Number of defectives 11 15 19 20 13 17 15 10 16 14
SPC 10

Ten samples of 15 parts each were taken from an ongoing process to establish a
chart for control. The samples and the no of defectives in each are shown in the
following table. Draw p and np charts for 95 % confidence interval. Comment on
the information provided by the chart.

Sample 1 2 3 4 5 6 7 8 9 10
Defectives 3 1 0 0 0 2 0 3 4 0
Variations in the process

➢ Variability is observed/inherent in every process

➢ There are two types of variability
➢ Natural or common causes
➢ Special or assignable causes
Natural causes

➢ Also called common causes which can not be neutralized or rectified

Assignable causes

➢ Also called special causes of variation which can be traced to a specific

reason
➢ SPC provides a statistical signal when assignable causes are present
➢ SPC detect and eliminate assignable causes of variation
➢ The objective of SPC is to discover when assignable causes are present
➢ Eliminate the bad causes
➢ Incorporate the good causes
Xerox
Downfall of western companies: Xerox

➢ In the 1970s, Xerox had a market share of 93%

➢ The company was only focusing on sales and ignored customer satisfaction
➢ The Xerox machines were malfunctioning or breaking down regularly
➢ They could have sent their designers back to the drawing board to redesign
the machines so they wouldn't fail, instead, they created a service force they
could dispatch to fix the machines
➢ Xerox's customers were no satisfied with this, they didn't want repairs, they
wanted machines that wouldn't break down in the first place
➢ This situation set the stage for the entry of competition, and the Japanese
rushed in and Xerox market share decreased to 40% by 1980s
Downfall of western companies

➢ In the 1950s, there were about 30 U.S.-owned companies making color

televisions in the United States
➢ By the 1980s, it was down to one
➢ The most publicized example took place in the auto industry
➢ Japanese cars were of such poor quality in the 1950s that they could hardly
be sold in the United States
➢ By 1980s, Japanese surpassed U.S. automakers in product quality
➢ Americans began reexamining the techniques of quality improvement and
control invented over the past 50 years and how those techniques had been
so successfully employed by the Japanese
Total Quality Management (TQM)

➢ Americans identified they were concerned only about conformance to

specification and statistical process control i.e. inspect them for defects so
that less defective products would reach to the customers
➢ Americans identified that Japanese were a step ahead of them, i.e., besides
SPC they were also focusing on process improvement for the quality
maintenance and improvement
➢ This gave the birth to TQM
Four basic components of quality management
TQM

➢ TQM is an ongoing process of detecting and reducing or eliminating errors in

the entire production or service delivery process
➢ The focus of TQM is to improve the quality of an organization's outputs,
including goods and services, through the continual improvement of internal
practices and provide better customer experience
➢ The key concepts in the TQM
➢ Quality is defined by customers' requirements/expectations
➢ Improved quality comes from systematic analysis and continuous improvement of work
processes
➢ All parties involved in the production or service process are accountable for the overall
quality of the final product or service
➢ Top management has direct responsibility for quality improvement
Traditional vs TQM views on quality
Traditional View
➢ Focus is on developing new features of
product
➢ Focuses on penetrating market share
➢ Considers quality is reactive i.e., taking
the defectives out of what is produced
➢ Assumes cost of maintaining quality is
higher
TQM View
➢ Focus is on continuous improvement of
the process to maintain the quality
➢ Focuses on satisfying customer needs
➢ Considers quality is proactive i.e.,
create process that will produce less or
no defects
➢ Assumes cost of maintaining quality is
lower
TQM philosophies

➢ Deming philosophy
➢ Juran philosophy
➢ Crosby philosophy
➢ Ishikawa philosophy
Deming philosophy

➢ William Edwards Deming, American Statistician, college professor and

consultant taught the concept SPC which was developed by Walter Shewhart
to the Japanese companies
➢ SPC is the method which uses statistics & control charts to tell whether the
production process is under control/conformation to specification or not
(Whether to stop the production process or not)
➢ Emphasized an overall organizational approach to managing quality by
focusing on customer and PDCA
PDCA cycle/Deming cycle
When to use PDCA cycle?

➢ Use the PDCA cycle when:

➢ Starting a new improvement project
➢ Developing a new or improved design of a process, product, or service
➢ Defining a repetitive work process
➢ Planning data collection and analysis in order to verify and prioritize problems or
root causes
➢ Implementing any change
➢ Working toward continuous improvement
Juran philosophy

➢ Joseph Juran, A 20th century management consultant defined quality from

producer and consumer’s perspective and defined quality from producer and
consumer’s perspective and also concluded quality as “Fitness for use”
➢ Categorized the cost of quality as cost of conformance and cost of non
conformance
➢ Gave little focus to SPC and emphasized more on
➢ Quality planning
➢ Quality control
➢ Quality improvement
➢ Quality assurance
➢ He emphasized on the top management commitment for maintaining quality
planning, control and improvement
Crosby philosophy: Zero defect philosophy

➢ Philip Bayard "Phil" Crosby, a businessman and author initiated the concept
of zero defects and popularized the phrase “Do the right things right the first
time and every time”
➢ From a literal standpoint , zero defects in quality management doesn’t mean
perfection but rather relates to a state, where waste is eliminated, defects are
reduced, and maintaining the highest quality standards in projects
➢ According to the Six Sigma standard, the definition of zero defects is defined
as 3.4 defects per million opportunities (DPMO)
➢ Zero defects examples include Japanese companies such as Toyota and
Honda, known for their high-quality standards and attention to detail
Poka-Yoke: Tool to support zero defect production

➢ Poka-Yoke principle was developed by Shigeo Shingo from Toyota Motor as a

tool to achieve zero defects of Crosby
➢ A Poka-Yoke is a Japanese word and is the mechanism in a lean
manufacturing process that helps an equipment operator avoid mistakes
➢ Poka-Yoke detects and prevents errors in manufacturing processes including
processing errors, setup errors, missing parts, improper parts, operations
errors, and measurement errors
➢ It is a foundational tool of both Kaizen, which targets waste, and Six Sigma,
which focuses on defects, with a goal of eliminating every mistake by creating
systems that either immediately prevent or detect them
Poka-Yoke types
Poka-Yoke
 It’s an old type lift
set by engineer in a
building
&
Its maximum weight
capacity is 200 kg
 Here, there are 3 people with
60+90+50=200kg
Lift capacity(200kg)=People weight
(200 kg)

Weight
50kg

Weight 60
kg

Weight 90
kg
If all three people enter into the lift,
it operates without any problem
Lift capacity(200kg)=People weight
(200 kg)
 If more people
enter the lift then
weight will
increase, which
increases the
possibility of break
down of lifts wire
because there is
no warning
mechanism on
excess weight .
 Modern lifts are very
advanced, because when
it is over weight the
alarm will start & indicate
light , until weight is not
reduced.
This is done through
poka yoke
 Poka-Yoke proofing is
powerful because its every
part is connected to a digital
signal so when any fault is
found, signal is passed

Lift move
without
any fault.

Here, four people want to use lift together, but they can’t use , why ?
➢Because modern lifts can’t run on overload.
➢This is good for our safety, so here no any defect comes out .
This is also called zero defect.

What is the key Principle of POKAYOKE?

Error is inevitable but can be eliminated
Poka-Yoke: Visual management tool

➢ Not only in manufacturing process, Poka-yoke can also be applied as visual

management tool for providing instruction to the customers so that error or
defects can be prevented
Ishikawa philosophy

➢ Kaoru Ishikawa, father of quality circle, a Japanese organizational theorist and

a professor in the engineering faculty at the University of Tokyo
➢ Emphasized that every function in the organization contributes to quality and
internal cooperation and coordination among all the employees positively
affects a customer’s needs and ultimately leads to process efficiency and
better quality of products and services
➢ Propagated the concept of internal customers, quality circles and 7 QC tools
of TQM
Ishikawa philosophy: Quality circle/Employee empowerment

➢ Quality circle is the philosophy, in which the team of workers and supervisors
are empowered to identify, analyze and solve quality problems basically
routine tasks and typically small day-to-day problems of their work area
➢ Team of workers and supervisors from same work area meet voluntarily in
informal settings, one hour a week or 4 hours a month to address work-
related problems involving quality and productivity
Ishikawa philosophy: 7 QC tools of TQM

➢ When it comes to quality control, there are 7 QC tools

➢ 7 QC tools are a set of graphical data representation and problem-solving
techniques and these tools can solve 90% of quality problems in a company
➢ These seven basic quality control tools are integral to any process
improvement methodology, including Kaizen, Six Sigma, etc.
➢ Flow diagram
➢ Check sheet
➢ Histogram
➢ Pareto chart
➢ Control charts
➢ Cause and effect diagram
➢ Scatter diagram
Ishikawa philosophy: 7 QC tools of TQM

➢ These tools are the means for colleting data , analyzing data , identifying
root causes and rectifying the errors/defects
➢ These basic tools of quality require introductory-level knowledge of statistics
➢ They are easy to understand and use, compared to advanced statistical
methods such as hypothesis testing, regression analysis etc.
Flow diagram with symbols derived from scientific
management
Flow diagram

➢ A flow diagram is a visual and graphical representation of organized steps to

follow a process for a specific task in sequential order such as
➢ Manufacturing process
➢ An administrative or service process
➢ A project plan
➢ It's a common process analysis tool and one of the seven basic quality tools
to study and identify the necessity of process improvement at each steps or
nodes
When to use a flow chart

➢ To develop understanding of how a process is done and to document a

process
➢ To communicate to others how a process is done
➢ When planning a project
➢ To study and identify the necessity of process improvement at each steps or
nodes
7 QC tools of TQM: Check sheet

➢ Recording the number of defects by type

➢ It can also be used to record the followings
➢ Recording the locations of defects: work station, shift, machine, operator
7 QC tools of TQM: Check sheet
➢ A check sheet is a simple and powerful tool for defect related data collection
used to compile and record data from existing observations or historical data
➢ E.g., Production manager wanted to see what defects were being produced
most frequently. He would set up a list of all the defects produced in the
production line and then use a check sheet to record the type of defect
whenever one occurs
➢ In this way, by the end of the day, the operator can visually see which type of
defects are more frequently occurring
Histograms: Check sheet is input for histogram

➢ Histogram is a kind of bar chart showing a distribution of variables

measured in a continuous number range in X axis
➢ Likewise, a histogram represents the frequency of such distribution of
variables measured in a continuous number range as the height in Y axis
Histograms

➢ The histogram represents frequency distribution of data clearly and concisely

amongst different groups of a sample, allowing you to quickly and easily
identify areas of improvement within your processes.
Pareto diagram: ABC classification of defects
Statistical process control
Cause & effect diagram

➢ A cause and effect diagram, also known as a fishbone diagram (because of

its shape), helps a team identify the different causes of a problem to
determine the root causes of a problem
➢ Using a fishbone diagram allows a team to focus on the problem instead of
the issues associated with the problem.
➢ It is qualitative tool of 7 QC tools of TQM
➢ It can be used by conducting a brainstorming session among team members
from the same work place
Cause and effect diagram
Cause and effect diagram

clean pillows
Equipment

Insufficient

& blankets

equipment not
Material

on-board

available
Deicing
Inadequate
Mechanical delay
supply of
magazines on plane
Inadequate special Broken luggage
meals on-board carousel
Dissatisfied
Airline
Overbooking policies Understaffed Customer
crew
Bumping policies Understaffed

Poorly trained
Poor check-in

ticket counters

attendants
policies
Mistagged
bags

Process People
Cause and effect diagram: Practice

➢ College students trying to register for a course sometimes find that the course
has been closed, or the section they want has been closed. Prepare a cause-
and-effect diagram for this problem.
➢ Suppose that a table lamp fails to light when turned on. Prepare a simple
cause-and-effect diagram to analyze possible causes.
Scatter diagram

➢ As part of a “cause and effect” analysis, a scatter diagram analysis can be

applied to verify a cause and effect relationship
➢ Instead of doing correlation analysis for analyzing the relationship between
two variables, scatter diagram is a graphical tool to check if relationships
exist between two variables such as cause and effect
➢ Height (Cause) and weight (effect) of a person
➢ Amount of baking powder (Cause) and thickness of pizza bread (effect)
➢ Drill speed (Cause) and smoothness of cut finish (effect)
Scatter diagram

➢ The scatter diagram can simply and clearly demonstrate the effect, of any
process change or process improvement activity
➢ By performing multiple scatter diagram analysis, the existence of numerous
effects from a single source cause can be identified
Four basic components of quality management
Process improvement methodology: Kaizen and Six sigma (6σ)

➢ The entire world is becoming more competitive and every organization is

looking for different methods to improve their overall management skills
➢ There are many business process methodology programs that can be used to
improve the processes of organizations around the world
➢ Kaizen
➢ Six sigma
Process improvement methodology: Kaizen and Six sigma (6σ)

➢ Kaizen: Tries to improve all aspects of a business through standardizing

processes, increasing efficiency and eliminating waste by involving everyone
➢ Six sigma: Is a set of techniques and tools for process improvement and
focuses more on improving the quality output (the final product) by finding
and eliminating causes of defects i.e., minimizing variability
Kaizen

➢ It is a Japanese workplace (Toyota) philosophy of Masaaki Imai, which

focuses on making continuous small improvements for better exponential
growth
➢ Kaizen is made of two Japanese words: where “kai” = change and “zen” =
good
➢ Kaizen tries to improve all aspects of a business through standardizing
processes, increasing efficiency and eliminating waste by involving everyone
➢ In Kaizen, collaboration and cooperativeness are highly encouraged, and it
makes the team more goal-oriented, which in turn makes the organization
more sustainable
Kaizen: Continuous improvement

➢ Kaizen works by following three main steps

➢ Identification of wasteful activities
➢ Identification of the ways these wastes are killing business efficiency
➢ Elimination or reduction of these wasteful activities
Principles of Kaizen

➢ Improve everything continuously

➢ If something is wrong, correct it
➢ Empower everyone to take part in problem solving
➢ Get information and opinions from multiple people
➢ Be economical. Save money through small improvements and spend the
saved money on further improvements.
➢ Remember that improvement has no limits. Never stop trying to improve.
Concepts inspired by Kaizen

➢ JIT/Lean Manufacturing
➢ 5S
➢ Poka-Yoke
JIT-Just In Time/Lean manufacturing

➢ JIT is not only related to the concept of inventory reduction, it is also a

philosophy for lean manufacturing (waste free production)
➢ A philosophy of manufacturing and any other operations based on planned
elimination of waste and continuous improvement of productivity
➢ Toyota Motor Company- first implemented fully functioning and successful JIT
system in 1950
➢ Some companies referred JIT with different names:
➢ TOYOTA – Toyota System
➢ HEWLETT- PACKARD (HP)- Stockless production
7 Wastes

Waste is ‘anything other than the minimum amount of equipment, materials,

parts, space, and worker’s time, which are absolutely essential to add value to
the product.’
➢ Waste of over production
➢ Waste of waiting (Waiting of materials/manpower due to poor design/machine
breakdown)
➢ Waste of transportation(unnecessary movement of materials)
➢ Waste of Underutilization of Employees
➢ Waste of Inventory
➢ Waste of motion(unnecessary movements of workers in search of materials)
➢ Waste of making defective products
Waste in operations
Waste in operations
Waste in operations
JIT goals

➢ Minimize waste of inventory, over production, underutilization of employees,

unnecessary movement of materials, unnecessary movements of workers in
search of materials and waste of making defective products
➢ Develop the mechanism of JIT production system: No demand - no
production!
➢ Eliminate disruptions and increase productivity
5s in Kaizen
5s in Kaizen

➢ 5S is a Kaizen inspired concept- A way of organizing and managing the

workplace towards an organized, clean, high-performance environment with
the intent to improve efficiency by eliminating waste
➢ Based on Japanese words that begin with S .
➢ Seiri (Sort): Tidiness, keeping only essential items.
➢ Seiton (Set In Order): Orderliness, eliminate extra motion.
➢ Seiso (Shine): Cleanliness, keep the workplace clean.
➢ Seiketsu (Standardize): Standardize work practices
➢ Shitsuke (Self Discipline): Sustaining, maintaining discipline and reviewing
standards.
Benefits of 5s

➢ 5s are 5 necessary disciplines for maintaining a visual workplace.

➢ 5s makes workplace more pleasant
➢ 5s helps in work efficiency
➢ 5s and safety go hand-in-hand
➢ 5s leads to better quality environment and higher productivity
Three sigma control limits: Areas under normal curve
Sigma Probability of producing Probability of producing Defects per 100 Defects per million
Level error free outputs defective outputs Opportunities Opportunities
A B C 100*C 1000000*C
1 0.6826 0.3174 31.74 317400
2 0.9544 0.0456 4.56 45600
3 0.9973 0.0027 0.27 2700
Six sigma control limits: Areas under normal curve
Sigma Probability of producing Probability of producing Defects per 100 Defects per million
Level error free outputs defective outputs Opportunities Opportunities
A B C 100*C 1000000*C
1 0.6826 0.3174 31.74 317400
2 0.9544 0.0456 4.56 45600
3 0.9973 0.0027 0.27 2700
6 0.9999966 0.0000034 0.00034 3.4
Six sigma

➢ Six sigma is a statistical definition of a process that is 99.99966% capable of

producing nearly perfect outputs
➢ The goal of Six Sigma is to achieve a level of quality that is nearly perfect,
with only 3.4 defects per million opportunities
➢ This is why it is sometimes referred to as a quality assurance methodology
➢ It was introduced by American engineer Bill Smith (Also known as father of
Six sigma)for Motorola in 1986
➢ Is a set of techniques and tools for process improvement and focuses more
on improving the quality output (the final product)
Six sigma (6σ)

➢ Six Sigma comes from the field of statistical quality control, a reference to the
fraction of a normal curve that lies within six standard deviations of the mean,
used to represent a defect rate
➢ Normal distribution means that values far away from the mean are extremely
unlikely
➢ For a process, the sigma capability (z value) is a metric that indicates how
well that process is manufacturing
➢ Sigma capability measures the capability of the process to produce defect
free outputs.
Four basic components of quality management
 Kaizen and Six sigma are solely a set of tools and methods used to improve
specific business processes. Whereas, Six sigma is also the quality assurance
methodology
ISO
ISO

➢ The International Organization for Standardization (ISO) is an international

standard development organization composed of representatives from the
national standards organizations of 167 member countries
➢ As of February 2023, the ISO has developed over 24,676 standards,
covering everything from manufactured products and technology to food
safety, agriculture, and healthcare except in electrical and electronic
engineering
➢ ISO 9000
➢ ISO 14000
➢ ISO 22000
➢ ISO 26000
➢ ISO 50000
➢ ISO 31000
Popular ISO standards

➢ ISO 9000. This is one of the most popular ISO standards for creating, implementing,
and maintaining a Quality Management System (QMS) for any given company,
regardless of its industry, capital, or size.
➢ ISO 14000. This ISO standard provides guidelines on what has to be done to
implement an environmental management system (EMS). It includes policies,
processes, plans, records, and best practices that define rules regarding how your
company interacts with the environment.
➢ ISO 22000. This standard details requirements for a food safety management
system (FSMS). Following this standard allows an organization that’s involved (either
directly or directly) in the food services industry to be assured that it is following best
practices for safety and hygiene.
➢ ISO 26000. A relatively new standard, ISO 26000 focuses on social responsibility. It
provides businesses direction on how they can work in a socially capable manner by
explaining their social duty. It also helps associations set up an effective system to do
activities identified with corporate social responsibility goals.
ISO standards

➢ ISO standards are Not…A product standard

➢ ISO standards do not tell you “how” to do anything
➢ Rather it specifies “what” processes need to be in place to maintain the
standard
➢ Think of ISO standards as a formula that describes the best way of doing
something
➢ ISO standards are internationally agreed by experts
➢ The standards could be about making a product, managing a process,
delivering a service or supplying materials – standards cover a huge range
of activities
ISO 9000 series

➢ ISO 9000 is a set of internationally recognized standards for Quality

Management System (QMS) with aim to encourage the production of goods
and services that meet a globally-acceptable level of quality
➢ ISO 9001 consists of requirements that organizations must fulfill for ISO
certification
➢ ISO 9002 is a model for quality assurance in production and installation
➢ ISO 9003 for quality assurance in final inspection and test
➢ ISO 9004 gives guidance on achieving sustained organizational success
ISO 9000 certification has become the de facto minimum requirement for
entering into global markets
ISO

➢ There are different systems, methodologies, tools and techniques that help in
improving the quality performance, including Kaizen, Six Sigma and ISO
9001
➢ They can be used separately or simultaneously towards achieving the
desired level of quality
➢ There is some misunderstanding on whether Six Sigma and ISO 9001 can
replace each other, but they do not
➢ ISO 9001 is a system for managing quality, whereas Six Sigma is a
methodology for process improvement.