QUALITY MANAGEMENT SYSTEM QUALITY GURUS

I. INTRODUCTION TO QUALITY JOSEPH M. JURAN

What is Quality?
• Customer’s expressed and implied requirements are met fully.
• Totality of features and characteristics of a product or service
that bears on its ability to meet a stated or implied need - ISO,
1994
• Fitness for use - Juran, 1988
• For many phenomena, 80% of consequences stem from 20%
of the causes.
• Without a standard there is no logical basis for making a
decision or taking action.
W. EDWARDS DEMING
• Quality is everyone’s responsibility.
• The first step is to learn how to change.

• Conformance to requirement - Crosby, 1979 BRIGITTE SCHWARTZ

INDUSTRIAL REVOLUTION • Original data should be presented in a way that will preserve
the evidence in the original data for all the predictions assumed
Quality was determined not by the people making the products to b useful.
but by the engineers and managers who developed the process.
MASAKI IMAI
Engr. Frederick Winslow Taylor
Engr. Walter Shewhart • You can’t do kaizen just once or twice and expect immediate
results. You have to be in it for the long haul.
JAPANESE QUALITY REVOLUTION
HENRY FORD
Focus: Defect prevention rather than inspection.
• There is one rule for the industrialist and that is: make the
Joseph Juran best quality goods possible at the lowest cost possible, paying
W. Edwards Deming the highest wages possible.

Toyota Production System THOMAS EDISON

AMERICA EMBRACES TQM & QUALITY MOVEMENT IN INDIA • I have not failed. I’ve just found 10,000 ways that won’t work.

• A result of global competition in America. PHILIP CROSBY

• In Indian industries, quality movement was consolidated by • Quality is free. It’s not a gift, but it’s free. The unquality things
pioneering efforts of Confederation of Indian industries. are what cost money.

INTRODUCTION OF SIX SIGMA AND ISO 9000 TAIICHI OHNO

In 1986, Motorola developed a quality control method called • Why not make the work easier and more interesting so that
Six Sigma. people do not have to sweat.

QUALITY Stands for: SHIGEO SHINGO

Quest for Excellence • Unless people’s motion add value they are useless toward the
goal.
Understanding Customer Needs
CUSTOMER/USER-BASED APPROACH
Action to achieve customers satisfaction
EDWARDS (1968)
Leadership determination to be leader.
Quality consists of the capacity to satisfy wants.
Involving all people
GILMORE (1974)
Team spirit to work for a common goal
Quality is the degree to which a specific product satisfies the
Yardstick measure progress wants of a specific consumer.

KUEHN & DAY (1962)

5 Myths Engineers believe about QUALITY
In the final analysis of the marketplace, the quality of a product
Quality is QAs Job depends on how well it fits patterns of consumer
preferences.
Design controls and new product development documentation
provide little view. JURAN (1988)

Risk management adds no value Quality is fitness for use.

Post-market product events are not an engineer’s concern OAKLAND (1989)

Regulations create burdens and more hoops to jump through The core of a total quality approach is to identify and meet the
requirements of both internal and external customers.
MANUFACTURING-BASED APPROACH • And it was Armand Feigenbaum who identified four quality
cost categories in 1956 in “Total Quality Control” in the Harvard
CROSBY (1979) Business Review, Vol. 34.

Quality means conformance to requirements • In 1961 Quality Cost Committee was established by the
American Society for Quality Control (ASQC).
PRICE (1985)
WHAT IS COST OF QUALITY
Do it the first time
• It is the term that is widely used and widely misunderstood.
VALUE-BASED APPROACH
• The “cost of quality” is not the price of creating a quality
BROH (1982) product or service.

Quality is the degree of excellence at an acceptable price and
the control of variability at an acceptable cost.
KANJI (1990)
Quality is to satisfy customers’ requirement continually; TQM is
to achieve quality at low cost by involving everyone’s daily
commitment.
PRODUCT-BASED APPROACH
K.B LEIFLER (1982)
• It’s the cost of NOT creating a quality product or service.
Every time work is redone, the cost of quality increases.
Examples include:
• The reworking of manufactured item.
• The retesting of an assembly.
• The rebuilding of a tool.
• The correction of a bank statement.
• The reworking of a service, such as the reprocessing
of a loan operation or the replacement of a food
order in a restaurant.

Quality refers to the amount of unpriced attributes contained Cost of Quality = Cost of conformance + Cost of non-
in each unit of the priced attribute. conformance

TRANSCENDENT CATEGORIES OF COST OF QUALITY

R.M PIRSIG

Quality is neither mind nor matter, but a third entity

independent of the two, even though Quality cannot be
defined, you know what it is.

PREVENTION COSTS

“Prevention rather than appraisal”

• Prevention costs are associated with the design,

implementation, maintenance, and planning prior to actual
operation, in order to avoid
defects from happening.

II. COST OF QUALITY • Prevention activities lead to reduction of appraisal costs and
both type of failures (internal and external).
QUALITY COST MEANING
ACTIVITIES ASSOCIATED WITH THE PREVENTION COSTS
• Some equate “QUALITY COSTS” with the costs of poor quality
(mainly the costs of finding and correcting defective work). • Market Research
• Quality Planning
• Others equate the term with the costs to attain quality. • New Product Review
• Tolerance Analysis before design release
• Still others use the term to mean the costs of running the • Field Trials
Quality Department • Research and Development
• Training
HISTORY • Quality Audits
• Defect Prevention
• It was Joseph Juran who first discussed the cost of quality
analysis in 1951 in the first edition of “Quality Control These are all planned proactive activities.
Handbook”
Albert Einstein

“Intellectuals solve problems. Geniuses prevent them.“

APPRAISAL COSTS COST OF POOR QUALITY (COPQ)

• Appraisal Costs are spent to detect defects to assure

conformance to quality standards.

• It is the cost expenditure on inspection and testing.

• Appraisal cost activities sums up to the “cost of checking if

things are correct”.

• The appraisal costs are focused on the discovery of defects

rather than prevention of defects.

ACTIVITIES ASSOCIATED WITH THE APPRAISAL COSTS

• Inspection/test of purchased material IMPACT OF QMS ON COSTS

• In-process and final inspection/test
• Product, process, or services audits
• Improved Quality
• Calibration of measuring and test equipment • Higher Customer Satisfaction
• Maintaining accuracy of testing equipment, performed in
• Better working environment
terms of periodic calibration
• Reduction of Quality Costs
• Cost of non-destructive testing such as electric probes, X-rays,
radiography etc. GOAL OF COQ SYSTEM
These are all planned proactive activities.
The goal of using COQ system is to increase prevention
activities in order to eliminate internal and external failures and
INTERNAL FAILURE COSTS
to reduce appraisal activities
• These are the failure costs occurring prior to delivery or
shipment of the product, or the furnishing of a service, to the
customer.

• These are the costs that would disappear if no defect is found

in the product before dispatching.

ACTIVITIES ASSOCIATED WITH THE INTERNAL FAILURE COSTS

• Cost of rework, scrap, defectives, waste etc.

• Cost of re-inspection, re-tests to verify the performance
analysis.
• Cost of 100% inspection
• Changing processes: Modifying manufacturing or service Why Measure COQ?
processes to correct deficiencies
• Lost production due to supplier materials and own material. • When you measure what you are speaking about and express
it in numbers, you know something - Lord Kelvin
EXTERNAL FAILURE COSTS
• You cannot manage what you do not measure - Anon
• These are costs incurred after the product is dispatched to
the consumer. When you measure what you are speaking about and express it
• It may include the cost to the business of providing a bad in numbers, you know something - Lord Kelvin
service or product and this may also result into cancellation of
order. • COQ can be used to identify quality improvement candidates
• These costs also would disappear if there were no • COQ provides one measure of comparing the success of
deficiencies. projects
• COQ can provide cost of data for motivational purpose
ACTIVITIES ASSOCIATED WITH THE EXTERNAL FAILURE COSTS
BENEFITS OF MINIMIZING COQ
• Warranty charges
• Complaint Adjustment: Costs of investigation and adjustment Decrease
of justified complaints attributed to defective product or
installation. • Defects
• Returned material: Costs associated with receipt and • Overall Costs
replacement of defective product received from the field. • Returned Goods
• Recalling of the product due to some reasons such as safety, • Customer Complaints
health, accidents, etc. • Owner & Management Stress
• Allowances: The costs of concessions made to customers due • Decrease Legal Costs
to substandard product accepted by the customer as is or to
conforming product that does not meet customer needs. Increases

• Sales
• Profit
• Capacity
• Customer Satisfaction
• Market Share
• Competitive Edge
• Employee Satisfaction
MEASURING OF QUALITY
COQ data can be measured and presented in many different
ways, such as:
• percentage of sales
• percentage of profits
• percentage of manufacturing costs
• Hours per direct labor
• Hours per unit of product
III. ISO 9001 GENERAL CONCEPTS
What is Quality?
An organization focused on quality promotes a culture that
results in the behavior, attitude, activities and processes that
deliver value through fulfilling the needs and expectations of
customers and other interested parties.(2.2.1)
Determined by the ability to satisfy customers and intended
and unintended impact on relevant interested parties
Includes not only the intended function and performance, but
also their perceived value and benefit to the customer (2.2.1)
What is Quality Management System?
Comprises activities by which the organization identifies its
objectives and determines the processes and resources
required to achieve desired results
Manages the interacting processes and resources required to
provide values and realize results for relevant interested
parties
Enables top management to optimize the use of resources
considering the long and short term consequences of their
decision
Provides the means to identify actions to address identified
and unintended consequences in providing products and
services
What is ISO?
INTERNATIONAL ORGANIZATION FOR STANDARDIZATION
- An independent, non-governmental international organization
- With membership of 161 national standards bodies
- Formed on 23 February 1947
- NOT an acronym for the organization
- From the Greek word “isos” meaning equal
- Like, isobars (a line connecting points of equal atmospheric
pressure), isonomy (equality of laws or of people before the
law
ISO IS NOT…
- ISO is NOT a product/ service quality label;
- ISO DOES NOT assess or audit management systems to
confirm that they conform to an international standard;
- ISO DOES NOT issue ISO certificates;
- ISO DOES NOT approve ISO certificates.
What is ISO 9001?
ISO 9001 provides a model for setting up a Quality
Management System.
It’s a model that is certainly not perfect, but one that, since
1987, has proven to be valuable and applicable to all types of
organization.
QMS aims to increase an organization’s awareness of its duties
and commitment in fulfilling the needs and expectations of its
customers and interested parties, and in achieving satisfaction
with its products and services
ISO 9001 Potential Benefits
1. ABILITY to consistently provide products and services that
meet customer and applicable statutory and regulatory
requirements
2. FACILITATES opportunities to enhance customer satisfaction
3. ADDRESSES risks and opportunities associated with its
context and objectives
4. ABILITY to demonstrate conformity to specified QMS
requirements
ISO 9001 adds value
Organizations find that ISO 9001:
Improves their ability to fully understand and meet customer
requirements consistently
Brings greater clarity to the goals and objectives of the
organization
Standardizes the way things are done, reducing variability, and
making it easier to solve problems
Makes it easier to manage using facts and data rather than
opinions
Enhances communication throughout the organization
Fosters continual improvement as an institutionalized core
value, and provides a platform for moving to performance
excellence
Scope of ISO 9001
ISO 9001 specifies requirements for a QMS where an
organization:
- Needs to demonstrate its ability to consistently provide
product that meets customer and applicable regulatory
requirements
- Aims to enhance customer satisfaction through the effective
application of the system
COMPATIBILITY WITH OTHER MANAGEMENT SYSTEMS PROCESS

ISO 9001 has been aligned with ISO 14001 for the benefit of the Set of interrelated or interacting activities that use inputs to
user community. deliver an intended result (3.4.1)

ISO 9001 does not include requirements specific to other NONCONFORMITY

management systems.
Non-fulfillment of a requirement (3.6.9)
However, ISO 9001 enables an organization to align or
integrate its own QMS with related management system RISK
requirements.
Effect of uncertainty(3.6.9)
ISO 9000 Family of Standards
PRODUCT
ISO 9000: 2015
● Contains the fundamentals and vocabulary used within the Output of an organization that can be produced without any
formal standards in order to ensure consistency of transaction taking place between the organization and the
interpretation customer (3.7.6)

ISO 9001: 2015 SERVICE

● Specifies requirements for a quality management system
ISO 9004: 2009
● Gives guidance on a wider range of objectives of a quality
management system.
Output of an organization with at least one activity necessarily
performed between the organization and the customer (3.7.7)
CUSTOMER

ISO 19011: 2011 person or organization that could or does receive a product or
● Gives guidance on quality and environmental management a service that is intended for or required by this person or
system auditing. organization. (3.2.4)

EVOLUTION OF ISO 9001 STANDARD CUSTOMER SATISFACTION

Customer’s perception of the degree to which expectations

have been fulfilled (3.9.2)

TOP MANAGEMENT

Person or group of people who directs and control an

organization at the highest level (of the organization) (3.1.1)

THE SEVEN QUALITY MANAGEMENT PRINCIPLES

“... fundamental rules for leading and operating an

organization.”

Aim: To facilitate a successful management culture

Why are standards being revised?

● ISO’s formal review process: 1. Customer Focus

2. Leadership
◦ Requires continual review to keep standards up to date.
3. Engagement of People
◦ Must be initiated within 3 years of publication of a standard.
4. Process Approach
● User inputs from: 5. Improvement
6. Evidence-based Decision Making
◦ A global user questionnaire/survey
7. Relationship Management
◦ A market Justification Study
◦ Suggestions arising from the interpretation process
Principle 1 – CUSTOMER FOCUS
◦ Opportunities for increased compatibility with ISO 14001
◦ The need for greater clarity, ease of use, and improved
The primary focus of quality management is to meet customer
translation
requirements and strive to exceed customer expectations.
● Current trends:
◦ Keeping up with recent developments in management system
practices.

Vocabulary

QUALITY

Degree to which a set of inherent characteristics of an object

fulfills requirements (3.6.2)

REQUIREMENT

need or expectation that is stated, generally implied or

obligatory (3.6.4)
Principle 2 – LEADERSHIP

Leaders at all levels establish unity of purpose and direction of

the organization and create conditions in which people are
engaged in achieving the organization’s quality objectives.

What is a leader?

• is not the person who does things right, but the person who
finds the right things to do
• always give his people the credit that is rightfully theirs
• is a person who takes a little more than his share of the
blame and a little less than his share of the credit
• believes in the premise that the function of leadership is to
produce more leaders, not more followers THE PROCESS APPROACH

Principle 3 – ENGAGEMENT OF PEOPLE Involves systematic definition and management of processes

and their interactions
Competent, empowered and engaged people at all levels
throughout the organization are essential to enhance the Enables control of the interrelationships and interdependencies
organization’s capability to create and deliver value. among processes in the system

How to motivate employees? The use of process approach enables:

- Understanding and consistency in meeting requirements
• Treat them as individuals - Consideration of processes in terms of added value
• Acknowledge their contributions - Achievement of effective process performance
• Back them up - Improvement of process based on evaluation of data and
• Make time for them information
• Explain why
• Let them work to their strengths Schematic representation of the elements of a single process
• Praise in public, correct in private

Principle 4 – PROCESS APPROACH

Consistent and predictable results are achieved more

effectively and efficiently when activities are understood and
managed as interrelated processes that function as a coherent
system.

Principle 5 – IMPROVEMENT

Successful organizations have an ongoing focus on

Improvement

Responding to changes in the internal and external

environment is necessary if you want to continue to deliver
value for your customers.

Principle 6 – EVIDENCE-BASED DECISION MAKING

Decisions based on the analysis and evaluation of data and

information are more likely to produce desired results.

Fact
A fact is something concrete that can be proven. You can find
facts in records, scientific findings, encyclopedias, atlases, etc.
In other words, facts are the truth and are accepted as such.

Opinion
An opinion is less concrete. It's a view formed in the mind of a
person about a particular issue. In other words it is what
someone believes or thinks, and is not necessarily the truth.
Principle 7 – RELATIONSHIP MANAGEMENT
For sustained success, organizations manage their relationships
with relevant interested parties, such as providers
What is Risk-based thinking (RBT)?
RBT is “something we all do automatically” and “is already
part of the process approach”.
It has “always been in ISO 9001”. This new version of the
standard makes risk more explicit and “builds it into the whole
management system”.

RBT ensures that risk is considered in full cycle of the process

approach. It brings preventive action as an inherent part of the
strategic and operational planning.

RISK-BASED THINKING

Essential for achieving an effective QMS

Plan and implement actions to address risks and opportunities
Addressing risks and opportunities establishes a basis for 4. Context of the Organization
increasing the effectiveness of the QMS, achieving improved
results and preventing negative effects 4.1 Understanding the Organization and its context
4.2 Understanding the needs and expectations of interested
RISKS AND OPPORTUNITIES parties
4.3 Determining the scope of the QMS
Risk is the effect of uncertainty and any such uncertainty can 4.4 QMS and its processes
have positive or negative effects.
5. Leadership
Prevent the negative effects of risk.
5.1 Leadership and Commitment
5.2 Policy
5.3 Organizational roles, responsibilities and authorities

6. Planning

6.1 Actions to address risks and opportunities

6.2 Quality Objectives and planning to achieve them
6.3 Planning of Changes

7. Support

7.1 Resources
7.2 Competence
7.3 Awareness
7.4 Communication
ISO 9001 QMS STRUCTURE
7.5 Documented Information

8. Operation

8.1 Operational planning and control

8.2 Requirements for products and services
8.3 Design and development of products and services
8.4 Control of externally provided processes, products and
services
8.5 Production and service provision
8.6 Release of products and services
8.7 Control of nonconforming outputs

9. Performance Evaluation

9.1 Monitoring, measurement, analysis and evaluation

9.2 Internal Audit
9.3 Management Review

10. Improvement

10.1 General
10.2 Nonconformity and corrective action

IV. CONCEPT OF TOTAL QUALITY MANAGEMENT

Definition of Total Quality Management

TQM is a management approach for an organization, centered

QMS STRUCTURE on quality, based on the participation of all its members and
aiming at long-term success through customer satisfaction and
Introduction 0.1 General benefits to all members of the organization and to the society.

0.2 QM Principles The aim of TQM is prevention of defects rather than detection.
0.3 Process Approach
0.3.1 General PRINCIPLES OF TQM
0.3.2 PDCA Cycle
0.3.3 Risk-based thinking 11. Customer Focus
0.4 Relationship with other Management System Standards 12. Leadership
13. People involvement
1 Scope 14. Process approach
15. Continuous Improvement
2 Normative Reference 16. Evidence - based decision making
17. Relationship Management
3 Terms and Definitions
CUSTOMER FOCUS IMPORTANCE OF TQM

An organization should know their customers.
Quality management process aims to meet customer
requirements and deliver beyond expected levels of products
or services.
1. It ensures that there is a high quality of product and service.
2. It ensures customer satisfaction.
3. It increases efficacy and productivity that positively impact
the revenue of company.
4. It improves team spirit within the organization.

LEADERSHIP TOTAL QUALITY MANAGEMENT IN TOYOTA

Good leaders help to unite an organization and give people a
sense of direction.
They must accept the responsibility for continuous quality
improvement and be dedicated to empowering others.
PEOPLE INVOLVEMENT
This principle helps to bridge the gap of communication from
management to employees.
This also enhances the capability to create value.
PROCESS APPROACH
All activities should be managed as interrelated processes to
create consistent and predictable results.
Company Overview
Toyota Motor Corporation is a Japanese multinational
automotive manufacturer headquartered in Toyota Aichi,
Japan. In 2017, Toyota’s corporate structure consisted of
364,445 employees worldwide and was considered as the
largest automotive manufacturer while in September 2018,
they were recognized as the 6th largest company in the world
by revenue. Toyota was the world’s first automobile
manufacturer to produce more than 10 million vehicles per
year which it has done since 2012, when it also reported the
production of its 200 millionth vehicle. As of July 2014, Toyota
was the largest listed company in Japan by market
capitalization worth more than twice as much as number 2
ranked Softbank and by revenue.
APPLICATION OF TQM IN TOYOTA AUTOMOBILE SEGMENT

An organization achieves its desired result when related
resources and activities are managed as a process.
CONTINUOUS IMPROVEMENT
An ongoing focus on improvement is a fundamental principle
for the success of an organization.
EVIDENCE-BASED DECISION-MAKING
The decisions are based on the insights gained from analyzing
and evaluating data.
It was found that the automobile segment of the company
experiences a problem that is defined by product defects
through wear in the machines. This issue was followed by the
American practice of operating the machine until it was broken
and only called in an engineer to fix it. The act resulted in more
defective parts as the machine wore down and a lack of
productivity ensued within the operation division. Lastly, the
issue of worker confusion in working from one machine to the
other is defined as one of the systematic defects that need the
implementation of a strategy and a solution to the problem.
CHALLENGES

This will help to produce desired results. The problem in this area is the application and implementation
of TQM in the variable problems that Toyota experiences. The
RELATIONSHIP MANAGEMENT main difficulty is how to implement TQM in its plants. Because
there are problems that are defined according to the
Organizations should manage their relationships with operational design of manufacturing the products, as well as
interested parties such as suppliers very well. how the workers are treated, it becomes apparent that the
challenge lies in how management and operations should work
This will help to sustain the levels of success achieved. together in order to achieve the maximum potential successful
provision of product and service to the client.
BENEFITS OF TQM
SUCCESS
Improved Quality
Teamwork It is identified that Toyota was able to become the highest
Customer satisfaction quality producer of cars in the world and dominated the 1980
Employee participation import market. Toyota presently experiences success in the
Employee satisfaction field of manufacturing, basically because of integrating TQM in
Working relationship its management of human resources and operations.
Productivity
Communication PROCESS IMPROVEMENT PRINCIPLE
Profitability
The customer-oriented philosophy of Toyota Production
CONCEPT OF TQM System (TPS) provides the principles which enable the
company’s day-to-day practice for many years. It has been
TQM requires 6 basic concepts: adopted and imitated by many businesses around the world.

1. A committed and involved management to provide long-

term top to bottom organization support.
2. An unwavering focus on the customer, both internally and
externally.
3. Effective involvement and utilization to the entire workforce.
4. Continuous improvement of the business and production
process.
5. Treating suppliers as partners ABUSH
6. Establish performance measures for the process.