UNIT –II

TQM PRINCIPLES

CUSTOMER SATISFACTION
 The most important asset of any organization is its
customers.

Manufacturing and service organizations are using

customer satisfaction as the measure of quality.

It is understood that the customer satisfaction must be

the primary goal of any organization.

The most important customer satisfaction is not only due

to national competitionbut also due to world wide
competition.

Therefore, it is essential that every employee in the

organization understands the importance of the
customers.

CUSTOMERS
  The customers are the most important people in the
business.
 The customers are not dependent of the organization.
 The organization depends on the customers.
 The customers are a part of business.
 The customers are the life blood of the business.
TYPES OF CUSTOMERS
Customers are of two types
 Internal customers
 External customers
INTERNAL CUSTOMERS
The customers inside the company are called internal
customers
EXTERNAL CUSTOMERS
The customers outside the company are called external
customers.

CUSTOMER PERCEPTION OF QUALITY

AMERICAN SOCIETY FOR QUALITY (ASQ) survey ranked the
customer perceptions in the following order.
 Performance
 Features
 Service
 Warranty
 Price
 Reputation

PERFORMANCE
 Performance invoves fitness for use.
 It indicates that the product and service is ready for the
customers use at the time of sale.
 Primary operating characteristics of a product such as
signal coverage and audio quality
FEATURES
Features are the secondary characteristics of the product or
service such as calculators, alarm clock, USB, etc.
SERVICE
 Customer service is intangible in nature.
 Organisation’s objective is to provide good quality of the
product to the customer at the right time
WARRANTY
 The product warranty represents an organisation’s public
promse of the quality product.
 A warranty generates feedback by providing information
on the product and service quality.
 A warranty forces the organization focus on the
customer’s definition of product and service quality.
PRICE
 Nowadays, customer is willing to pay a higher price to
obtain value. Also, customers expect high quality product
at the lower price.
 Customers are prefering the organizations who are
providing the greatest value for their money.
 Customers are constantly evaluating all the
organizations.
REPUTATION
Total customer satisfaction is based on the entire experience
with the organization.

CUSTOMER COMPLAINTS
Customer complaints (or) feedback is required
 To discover customer dissatisfaction
To discover relative priorities of quality.
To identify the customer needs.
To compare performance with the competitor.
To determine oppurtunities for improvement.
TOOLS USED FOR COLLECTING CUSTOMERS COMPLAINTS
 Comment card: it is a card normally attachted to the
warranty card, issued with the product at the time of
sale.
 Customers questionnaire
 Survey through email
 Survey through telephone
 Focus groups
 It includes customer meetings, world associations,
discussions and relaxation techniques
 Toll free telephone numbers
 Report cards
 Customer visits
 The internet and computer.

SERVICE QUALITY (OR) CUSTOMER SERVICE

Customer service is a set of activities , an organization uses to
satisfy the customers.
The service can be provided:
 Before sale of the product
 During sale of the product
 After sale of the product
Elements of customer service
1. Identify each market segment
2. Write down the requirements
3. Communicate the requirements
4. Organize process
5. Organize physical spaces
6. Meet the customers expectation
7. Get the customer’s point of view
8. Deliver what is promised
9. Make the customer feel valued
Respect all complaints
10. Reapect all complaints
11. Over-respond to the customer
12. Provide a clean and comfortable customer reception
area
13. Optimize the trade –off between time and personal
attention
14. Minimize the number of contact points
15. Provide pleasant, knowledgible
16. Write document in customer-friendly language
17. Hire people who like people
18. Challenge them to develop better methods
19. Give them the authority to solve problems
20. Serve them as internal customers
21. Be sure they are adequately trained
22. Recognize and reward performance
23. Lead by example
24. Listen to the front line people
25. Strive for contiuous process improvement
CUSTOMER RETENTION
 Customer retention is more powerful and effective
than customer satisfaction.
 Customer retention can be improved by obtaining
customer feedback and by measuring customer
satisfaction.
 It really moves the customer satisfaction to the next
level called customer delight.
 It represents the activities that produce necessary
customer loyalty.
EMPLOYEE INVOLVEMENT
 Employee involvement is the back bone of TQM
Movement.
  Employee involvement is one approach to improve
quality and productivity.
 Employee Involvement leads to meet the organization
goals and objectives.
Some of the important aspects of employee involvement are
Employee Motivation
Employee Empowerment
Teams and Team work
Recognition and Reward Schemes
Performance Appraisal
EMPLOYEE MOTIVATION
 Knowledge of motivation helps us to understand the
utilization of employee involvement to achieve process
improvement.
 Motivation means a process of stimulating people to
accomplish desired goals.
 Motivation improves Employee Involvement.
 Motivation helps in securing a high level of performance.
 One of the first and most popular motivational theories
was developed by Abraham Mas Low.
 Abraham Mas Low theory has five levels.
MasLow’s Hierarchy of needs.
 Survival
  Security
 Social
 Esteem
 Self actualization
SURVIVAL
Survival needs include proper lighting, Heating, Food, Air
Conditioning, Ventilation, Phone System and Computer
Information System.
SECURITY
Security Level means a safe place to work and job
security which are important to employees.
SOCIAL LEVEL
These needs are friendship, exchange of feelings and
conservation, etc.,
ESTEEM NEEDS
There are two types of esteem needs.
 Self - Esteem
 Esteem of others
SELF – ESTEEM
Self – Esteem needs are Self Confidence, Achievement,
Self – Respect and Knowledge.
ESTEEM OF OTHERS
The second group of esteem needs are reputation,
recognition and appreciation.
SELF – ACTUALIZATION NEEDS
This is the ultimate need which dominates a person’s
behavior when all lower needs are satisfied.
MOTIVATION – HYGIENE THEORY
MOTIVATION FACTORS
 Achievement
 Recognition
 The work itself
 Responsibility
 Advancement and Growth

HYGIENE FACTORS
 Supervisors
 Working conditions
 Inter personal relationships
 Pay and Security
 Company Policy and Administration
EMPLOYEE EMPOWERMENT
 Empowerment is an environment in which people have
the ability, the confidence and the commitment to take
responsibility and ownership to improve the process and
initiate the necessary steps to satisfy customer requirements
within well defined boundaries in order to achieve
organizational values and goals.
GENERAL PRINCIPLES FOR EMPLOYEE EMPOWERMENT
 Set standards of Excellence
 Give them knowledge and Information
 Provide them with feedback on their performance
 Trust them and create trust worthiness in the
organization
 Treat them with diginity and respect
CONDITIONS TO CREATE EMPOWERMENT AND
ENVIRONMENT
The three conditions required to create the empowerment
environment are
Every one must understand the need for change
The system needs to change to the new paradigm
The organization must enable its employees
CHARACTERISTICS OF EMPLOYEE EMPOWERMENT
They feel responsible for their own tasks
 They are well trained, equipped, creative and customer
oriented
They are challenged and encouraged
They find new goals and meet challenges
They monitor and improve their work continuously
TEAM AND TEAM WORK
A team can be defined as a group of people working together
to achieve common objectives or goals.
TEAM WORK
 Teams work because many heads are more
knowledgeable than one.
 Each member of the team has special abilities that can be
used to solve problems.
 The interaction within the team produces results that
exceed the contributions of each member.
BENEFITS OF TEAM WORK
Improved solutions to quality problems
Improved ownership of solutions
Improved communications
Improved integrations
TYPES OF TEAMS
Teams can be classified into four major groups
 Process improvement team
Cross functional team
Natural work team
Self directed / self managed work team
PROCESS IMPROVEMENT TEAM
The members of the process improvement team
represent each operation of the process or sub process
A team of about six to ten members will come from the
work unit
CROSS FUNCTIONAL TEAM
A team of about six to ten members will represent a
number of different functional areas such as engineering,
marketing, accounting, production, quality and human
resources.
It may also include the customer and the supplier.
This type of team is usually temporary.
NATURAL WORK TEAM
This type of team is not voluntary. It is composed of all
members of the work unit.
It differs from quality control circles because a manager
is part of the team and the projects to be improved are
selected by management.
SELF DIRECTED / SELF MANAGED WORK TEAMS
THEY ARE THE EXTENSION OF NATURAL WORK TEAMS
WITHOUT THE SUPERVISOR.
The team must have access to business information in
order to plan, control and improve the process.
CHARACTRISTICS OF SUCCESSFUL TEAMS
 Sponsor
 Team charter
 Training
 Ground rules
 Clear objectives
 Resources
 Trust
 Open communication
 Problem solving
ELEMENTS OF EFFECTIVE TEAM WORK
o Purpose
o Role and responsibilities
o Activities
o Effectiveness
o Decisions
o Results
o Recognition
TEAM MANAGEMENT WHEEL
Margerison and Mccann have introduced a graphic tool called
team management wheel.
It includes the following area of quality.
 Innovation
 Promotion
 Development
 Organization
 Production
 Inspection
 Advice
 Linking
ACTIVITIES OF TEAM MANAGEMENT WHEEL
 Advising : giving and gaining information
 Innovating: Creating and experimenting with ideas
 Promoting: exploring and presenting oppurtunities
 Developing: assessing and planning application
 Organizing: arranging for resources and implementation
 Producing: concluding and delivering outputs
 Inspecting: controlling and auditing procedures.
 Maintaining: upholding and enforcing standards
 Linking: establishing linkages
ROLE OF TEAM MEMBERS
  Be interested and motivated
 Accept, appreciate and respect each other
 Give high priority to continuous improvement
 Participate actively with the activities of the team
 Be responsible for their own contribution as well as the
results of the team
 Encourage feedbackon own behavior
 Make personal improvement at routine
STAGES OF TEAM DEVELOPMENT
 Forming stage
 Storming stage
 Norming stage
 Performing stage
 Maintenance stage
 Evaluating stage
BARRIERS TO TEAM PROGRESS
 Insufficient training
 Lack of management support
 Lack of union support
 Project objectives are not significant
 Lack of planning
 Access to information systems
 No clear measures of success
RECOGNITION AND REWARD
  Recognition is a process where by management
shows acknowledgement of an employee’s out
standing performance
 Recognition is a form of employee positive
motivation
 Reward is a tangible one, such as increased salaries,
Commissions, cash bonus, gain sharing, etc.,
 Reward to promote desirable behavior
TYPES OF REWARD
There are two types.
 Intrinsic rewards
 Extrinsic rewards
INTRINSIC REWARDS
These are related to feelings of accomplishment.
 Celebrations to acknowledge achievement of quality
improvement goals
 Regular expressions of appreciation by manager and
leaders.
 Development based performance appraisals
 Quality based promotions
EXTRINSIC REWARDS
These are related to pay or compensation issues
 Profit sharing
 Gain sharing
 Employment security
 Compensation time
 Individual based performance systems
 Quality based performance appraisals
PERFORMANCE APPRAISALS
 Performance appraisal is a systematic and
objective assessment
 There should be a good relationship between the
employee and the appraiser.
 The appraisal should point out strengths and
weaknesses as well as how performance can be
improved.
 Performance appraisals may be for the team or
individuals
NEED FOR PERFORMANCE APPRAISAL
 To identify employees for salary revision,
promotion, transfer and lay – off
 To determine training and development needs of
the employees
 To motivate employees by providing feedback on
their performance levels
 To know personal strengths and weakness of
different individuals
 To establish basis for research and reference for
personnel decisions in future
  To validate the selection procedure
BENEFITS OF PERFORMANCE APPRAISAL
 It provides useful feedback to the employee.
 It helps in determining the pay adjustments,
increments and bonuses
 It provides basis for employee promotion
 It helps the employee to plan their career
 It helps in evaluating the personnal department
proceduresand provides feedback on their
strengths and weaknesses.
CONTINUOUS PROCESS IMPROVEMENT
 Quality based organizations should strive to
achieve perfection by continuously improving the
business and production processes
 Making all processes effective, efficient and
adaptable.
 Eliminating waste and rework wherever it occurs.
 Using technical tools such as experimental design,
bench marking and quality function deployment.
 Continuous process improvement is designed to
utilize the resources of the organization to achieve
a quality driven culture.
PROCESS
  Process refers to business and production activity
of an organization
 Business process such as purchasing, engineering,
accounting and marketing.
 There are five basic ways to improve process
 Reduce resources and reduce errors
 Exceed expectation of downstream customers
 Make the process safer
 Make the process more satisfying to the person
doing it
JURAN TRILOGY
Process improvement involve s planning
One of the best approaches is developed by Dr. Joseph
Juran
It has three components
 Quality planning
 Quality control
 Quality improvement
QUALITY PLANNING
 Identify the customers
 Determine the customer needs
 Develop product features
  Establish quality goods
 Develop a process
 Prove process capability
QUALITY CONTROL
 Choose control subjects
 Choose units of measurement
 Establish measurement
 Establish standards of performance
 Measures actual performance
 Take action on the difference
QUALITY IMPROVEMENT
 Prove need for improvement
 Identify specific projects for improvement
 Organize to guide the projects
 Organise for diagnosis
 Provide for control to hold gains
PDSA CYCLE:
The basic plan – Do – study – act(PDSA) cycle was first
developed by shewhart and then modified by daming.
It is an effective improvement technique.
 Act Plan

Study Do

PDSA Cycle
PLAN
 Define the problem
 Determine the quality objectivesand the critical factors.
 Define the performance indicators.
 Collect and analyze the necessary process data.
 Generate possible solutions.
DO
 Train all involved employees in the use of quality
improvement methods and techniques.
 Describe the process which is considered for
improvement.
 Implement the plan on a limited scale to test the
proposed improvement.
STUDY
  Evaluate the trial project with the performance
indicators.
 Verify whether the improvement has been successful or
not.
ACT
 Act to implement proven improvements.
 The improvements are documented in standard
procedures.
BEENFITS OF THE PDSA CYCLE:
 Problem – solving process.
 Project management.
 Continous development.
 Human resources development.
 New product development.
 Process trials.
5S METHODS
 The 5s practice is a house keeping technique used to
establish and maintain a productive and quality
environment in an organization.
 An well-organization work place result more efficient and
production operation.
MEANING OF 5S ELEMENTS
 Japanese English
Term equality
SEIRI TIDINESS
SEITON ORDER LINESS
SEISO CLEAN LINESS
SEIKETSU STANDARDIZATION
SITSUKE Discipline
1.Throw away all rubbish and unrelated materials in the
work place
2. set everthing in proper place for storage
3.clean the work place,everything without fail
4. standardizing the way of maintaining cleaness
5. practice 5s daily make it a way of life. This also means
commitment
OBJECTIVES OF 5S
To crate a neat & clean workplace
To systemize day to day working
To improve work efficiency
To standardize work practices

To improve work discipline

To improve the quality of work and products.
FACTORS IN IMPLEMENTING 5S
 The following factors are required for any organization to
implement 5S concept successfully.
PARTICIPATION BY ALL:
5S programme should be understood and practiced by all
employees.
Linkage with productivity, quality, cost, delivery, safety and
customer satisfaction should be clear to everyone.
TOP MANAGEMENT COMITMENT:
The CEO along with senior management team needs
personally committed practice and supervise the programme.
HOW BE SELF SUSTAINING:
Banners, slogan posters and new tutors should be fully
utilized to draw attention of everyone in the company.
REVIEW THE PROGRAMME:
Every month, a group of people selected from different areas
of responsibility should take the plant, evaluate each zone
according to work criteria of house keeping principles.

BENEFITS IN IMPLEMENTING 5S:

Work place becomes clean and better organization.
 Results in good company image and generate more
business.
People become disciplined.
Lower cost of production.
Better quality awareness.
Better preventive maintenance.
KAIZEN PHILOSOPHY
 Kaizen is a Japanese word for the philosophy that defines
management’s role in continuously encouraging and
implementing small improvements involving everyone.
 It is the process of continuous improvement in small
increments that make the process more efficient,
effective, under control and adoptable.
The Kaizen improvement focuses on the use of
 Value – added and non-value added work activity.
 Principles of materials handling and use of one price
alone.
 Principles of motion study and the use of cell technology.
 Documentation of standard operating procedures.
 Just in time principles to produce only the units in the
right quantities, at the right time, and with the right
resources.