TQM AND

PRODUCTION
MANAGEMENT
 TQM AND PRODUC

COURSE DURATION: 2 HRS PER WEEK

COURSE CREDITS: 2

SECTION A: TOTAL Q

1. INTRODUCTION (2 HRS)
• Meaning of quality – orientation
• Scope of TQM
• Basics and Imperatives of TQM
• Cost of quality and its relevance to TQ
• Concept of Kaizen and continuous im

2. STATISTICAL QUALITY CONTROL

2. PROCESS DESIGNING (3 H
• Types of production syste
• Capacity requirements pla
• Facilities, location and inf
• JIT, FMS, and Group Tech

3. PRODUCTIVITY AND WOR

• Method study: Basic proce
 SESSION 1
• 1. INTRODUCTION (2 HRS)
• Meaning of quality – orientation to customer
satisfaction
• Scope of TQM
• Basics and Imperatives of TQM
• Cost of quality and its relevance to TQM
• Concept of Kaizen and continuous improvement
TO REMAIN IN ANY BUSINESS

• ORGANISATION SHOULD ADOPT DIFFERENT

STRATIGIES

TO MEET OR EXCEED CUSTOMER NEEDS AND

EXPECTATIONS

• ONE OF THE STRATEGY IS QUALITY

MANAGEMENT SYSTEM – ADOPTION, SIMILAR
TO FINANCIAL MANAGEMENT, RISK MANAGEMENT
ETC.,
 History of Quality Systems
• Craftsmen master craftsmen and guilds.
• Mass production and inspection systems.
• Quality control systems and SPC.
• Quality Assurance./ISO 9000.

• Total Quality Management.

• Malcolm Baldridge / International Quality Award
Schemes.
• Integrated Management Systems.

09/19/10 6
 QUALITY

DEGREE TO WHICH A SET OF INHERENT

CHARACTERISTICS FULFILS THE
REQUIREMENTS.
QUALITY HAS TWO COMPONENTS :
• CONFORMANCE
• PERFORMANCE

QUALITY MANAGEMENT
• CO-ORDINATED ACTIVITIES TO DIRECT AND CONTROL
AN ORGANIZATION WITH REGARD TO QUALITY.
 PERFORMANCE
SPEED COURTESY

REPUTATION CONFORMANCE

FEATURES OF QUALITY

AESTHETICS RELIABILITY

RESPONSE DURABILITY
SERVICE

TO IMPROVE THE QUALITY OF AN

ORGANIZATION’S PRODUCT, PROCESS,
SERVICES AND SYSTEMS – SYSTEMATIC,
ANALYTICAL AND LOGICAL APPROACH IS
MOST DESIRABLE FOR CAPA’S.
Quality can also be expressed
by the following formula

P
Q=
E
P = Performance or result
E = Expectations
 What is Quality?
Continuous Satisfaction of
Customer Requirements

A ‘Customer-Centric’ View
What is
Quality
Management?
Achievement of Quality at Low
Cost.
What is
Total Quality
Management?

Attainment of
Total Quality
Through Everyone’s
Commitment on a Daily Basis
SO …..
Quality is a state in which value
entitlement is realized for the customer
and provider in every aspect of the
business relationship.

Business quality is highest when

the costs are at the absolute lowest for
both the producer & consumer and is
most readily attained when the entirety
 QUALITY MANAGEMENT

QUALITY QUALITY QUALITY QUALITY

PLANNING CONTROL ASSURANCE IMPROVEMNE
T
 TERMS AND DEFINITIONS
Quality Management: Coordinated activities,
to direct and control an
organization with regard to
quality.
Quality planning : Part of quality
management focused on
setting quality objectives
and specifying necessary
operational processes and
related resources to fulfill
requirements
Quality Control : Part of quality
management focused on
fulfilling requirements
QMS
 MANAGEMENT: Coordinated activities to direct
and control an Organization
 System:

Set of interrelated or interacting elements

 QMS: Coordinated activities, to direct and control

an organization with regard to quality.
 Evolution of Quality Management
Philosophy

Demands of First World War increased use of mass

production technology. Requirement of reliable
equipment and timely supply for the Armed Forces
made quality an important issue. Concept of formal
quality control was first developed by W A Shewhart in
his famous book “Economic Control of Quality of
Manufactured Product”.

Subsequently other quality Gurus developed this

concept further.
Deming

Demings’ philosophy of quality management is

contained in his universal 14 points for
management.

Deming originated PDCA cycle. He came out with

the new “climate” (organizational culture) which
primarily consists of joy in work, innovation and
cooperation.

He referred to this new climate as win-win as

opposed to I win : You lose.
 Juran

Planning
Juran developed the idea of quality
trilogy: quality planning, quality
improvement and quality control. He
concentrates not only on the end
customer, but identifies other
external and internal customers.
According to him, quality is “Fitness
of use”. Juran advocates 10 step
approach to quality improvement.

Control Improvement
 Crosby

Crosby is known for his concepts of “Do it right first time”

and “zero defects”. He defines quality as conformance to
requirements which the company itself has established for
its products based directly on customer needs. He
emphasizes prevention management in every area. Crosby
has suggested his own 14 step programme for quality
improvement.
 QUALITY MANAGEMENT PRINCIPLES

• CUSTOMER FOCUS
• LEADERSHIP
• INVOLVEMENT OF PEOPLE
• PROCESS APPROACH
• SYSTEM APPROACH TO MANAGEMENT
• CONTINUAL IMPROVEMENT
• FACTUAL APPROACH TO DECISION MAKING
• MUTUALLY BENEFICIAL SUPPLIER RELATIONSHIP
TQM
 TQM is a set of systematic
activities carried out by the entire
organization to effectively and
efficiently achieve company
objectives so as to provide
products and services with a level
of quality that satisfies
customers, at the appropriate
time and price.
TQM
TQM - Key Elements &
Practices

 Top Leadership
 Customer Focus
 Policy Deployment
 New Product Development
 Standardization
 Daily Routine Management
 Kaizen Activity
 Field Quality
 Manufacturing Quality
 Vendor Quality
 5S
 Application of Statistical Methods
 Utilization of IT
 Human Resources Development
 Total Participation (Involvement)
 Contribution to society, Environment
 Typical Excellence Model
European Foundation Quality Management

Policy & IMPACT ON

Strategy SOCIETY

PROCESSES
Customer & CUSTOMER
Leader Market Focus SATISFACTION Organization
Ship al Results

People PEOPLE
Management SATISFACTION

SUPPLIER &
Resource & Info PARTNERSHIP
Management PERFORMANCE

ENABLERS
RESULTS
Business Excellence Model

Enablers Results

People
People
Results

Leaders Policy & Process Customer Key

hip Strategy es Results Performa
nce
Partnerships Results
Society
and
Results
Resources
Innovation and Learning

Excellent Results with respect to Performance, Customers,

People, and Society are achieved through Leadership driving
Policy & Strategy, People, Partnerships & Resources, and
Processes.
1 Leadership 110

1.1Leadership system…………………………………………… 80

1.2 Company Responsibility and Citizenship…………………… 30

2 Strategic Planning 80

2.1 Strategy Development Process……………………………… 40

2.2 Company Strategy ……………………………………….. 40

3 Customer and Market Focus 80

3.1 Customer and Market Knowledge ………………………… 40

3.2 Customer Satisfaction and Relationship Enhancement…… 40

4 Information and Analysis 80

4.1 Selection and Use of Information and Date ……………… 25

4.2 Selection and Use of Comparative Information and Data… 15

4.3 Analysis and Review of Company Performance ………… 40

5 Human Resource Focus 100
5.1 Work systems ……………………………….................. 40
5.2 Employee Education, Training, and Development …. 30
5.3 Employee well-being and Satisfaction………………... 30
6 Process Management 100
6.1 Management of product and service processes …… 60
6.2 Management of support processes …………………… 20
6.3 Management of supplier and partnering processes … 20
7 Business Results 450
7.1 Customer satisfaction results …………................... 125
7.2 Financial and market results ……………………….. 125
7.3 Human Resource results ……………...................... 50
7.4 Supplier and Partner Results ………………............... 25
7.5 Company-Specific Results ………………................... 125
Total Points 1000
Quality certifications/
Compliance standards.
 ISO 9001
 EMS 14001
 OSHAS 18001
 TS 16949
 AS 9100
AWARDS
 National Quality Awards
 Taking a leaf out of the experiences seen
overseas, India also joined the others in
establishing and promoting National Quality
Award. Today, we have many such sponsors
who have established Quality Awards. Some
of the more popular National Quality Awards
include:
 CII – EXIM Award for Business Excellence;
 The Rajiv Gandhi National Quality Award;
 IMC Ramakrishna Bajaj National Quality Award.
 Customer satisfaction

No matter how effectively a company meets the

needs of its customers, it must remain constantly
alert and responsive to the dynamic competitive
environment and continuously changing needs and
expectations of the customers.
 Customer satisfaction

Customer satisfaction is determined by the value-to-price ratio

Customer Value the customer gets

=
Satisfaction Price the customer pays
What constitutes value to customer

Product
 Performance
 Reliability
 Durability
 Serviceability
 Aesthetics
 Perceived quality
What constitutes value to customers

Service
 Security
 Reliability
 Accessibility
 Timeliness
 Responsiveness
 Empathy
 Assurance
Maximizing Customer satisfaction
Customer satisfaction-
Characteristics

Japanese scientist, N.Kano identified three

characteristics of customer satisfaction :
A. Basic
B. Performance
C. Delight
A. Basic- must requirements

Basic relates to requirements that the customer takes

for granted. Customers expect the products they use
to display such basic, hidden or assured characteristics.
When we travel on an aircraft, we expect the flight to be
safe. This is hardly a subject for negotiation with the
airline. Meeting such requirement may not necessarily
create satisfaction, although not meeting it may result
in creating considerable dissatisfaction.
B. Performance- expected
requirements

Performance parameters relate to customer requirements that are

negotiated and agreed. For example, if the airline releases the
flight schedule, the passenger expects the flight to take off and land
at the specified time. Meeting these stated requirements creates
customer satisfaction and not meeting them will certainly lead to
customer dissatisfaction.
C. Delight - Excitement features

Finally wherever the organization performs far

beyond the expectations, so as to create
pleasant surprises, the customer feels
delighted.
 Customer quality perceptions
Very satisfied
Delight

Performance

Needs Needs

Basic

Very dissatisfied
It is therefore quite clear that satisfaction of the basic needs of
the customer is not going to help the organizations any more. The
organizations will have to constantly strive to meet more
than the basic needs of the customer and delight or excite
them to have the competitive edge.
 KAIZEN

Kaizen = Kai [to take apart and make new]

Zen [ to think about so as

to help others]

Kaizen = Thoughtful Acts

of Continuous Improvement!
KAIZEN UMRELLA
 kaizen
• IS AN UMBRELLA CONCEPT COVERING
MOST OF THE PROCESSES.
• INNOVATION IS A MAJOR CHANGEIN THE
WAKE OF TECH. BREAKTHROUGHS
• KAIZEN IS OFTEN UNDRAMATIC AND
SUBTLE AND RESULT S ARE OFTEN
IMMEDIATELY VISIBLE
 What,Why and How to use
Kaizen?

Eliminate the Gap!

Kaizen
Customer Supplier
The Need for Change
To stay competitive, businesses needs to:

bridge the gap between where we are now and where

we need to be.

To do that,
we need to change the way we do business.

Kaizen will help us do that.

 Japanese Perceptions of Job Functions

Top Management
Innovation
Middle Management
KAIZEN
Supervisors
Maintenance
Workers
An example of a Kaizen-type improvement would be
the change in color of a welding booth from black to
white to improve operator visibility. This change
results in a small improvement in weld quality and a
substantial improvement in operator satisfaction.
 P-D-C-A CYCLE
Dr. W.E. DEMING

PLAN DO

ACT CHECK
 Continual Improvement...

Application of this principle involves:

• Employing a consistent organization-wide approach to
continual improvement of the organization’s performance.
• Providing people with training in the methods and tools of
continual improvement.
Concept of Continuous improvement

P = Plan
A P Organizat
D = Do ion
C = Check C D I
m
p
Types:
A = Act A P r PDCA
o
C D v
e PDCA
m
e
A P n PDCA
t
C D PDCA

Τ im PDCA
e
 Continual Improvement...

• Making continual improvement of products, processes and

systems an objective for every individual in the
organization.
• Establishing goals to guide, and measures to track,
continual improvement.
• Recognizing and acknowledging improvements.
 Visible and hidden costs/quality costs
•Scrap
•Rework Visible costs
•Warranty costs

• Conversion efficiency of materials

• Inadequate resource utilization

• Excessive use of material

• Cost of redesign and re-inspection Hidden Costs

• Cost of resolving customer problems

• Lost customers / Goodwill

• High inventory
Quality Costs:
 Business has two problems. Customers and
competitors. Organization head looks for process
improvement and to reduce costs in comparison with
customers. Selected suppliers or in comparison with
competitors. The economics of quality relates
balance between
 Cost of conformance
AND
 Cost of non-conformance
 No product is cheaper to provide through doing
things wrong.

FAILURE IS EXPENSIVE
PREVENTION IS AN INVESTMENT
P
E
R
C
E
N
T
A
G
E
Prevention Costs:
Prevention costs are the cost of all ACTIVITIES UNDER
TAKEN TO PREVENT DEFECTS.
Specific items are:
 Design reviews
 Product qualifications
 Drawing checking
 Supplier evaluation
 Seminar / trainings
 Process capability reviews
 Operation training
 Quality orientation
 Zero defects program
 Quality Audits
 Preventive maintenance
 Calibration costs (Excluding capital costs)

Prevention costs RELATE TO QA ACTIVITIES.

Appraisal Costs:
Associated with verification activities. Typical costs are:
 Prototype inspection
 Receiving inspection
 Suppliers surveillance
 In-process verification
 Inspection equipment depreciations, maintenance
costs
 Process control costs
 Analyzing, Reviewing, Reporting and Storing. The
appraisal data

Related to “QC”
Failure Costs:
Internal failure costs: Associated with NC of product or
service typical costs are:
 Scrap
 Rework / Replacement costs
 Repair / Modify / Down grade
 Re-inspection
External Failure Costs:
 Rejected / Returned product
 Warranty / Liability
 Customer dis-satisfactory
 100% 100%
Defective Good
 Case study

A T V co m p a n y bra nd ed
d iffere ntiat io n. W ith se v
co m p etitio n. T he o w ner
co m p ayn the n he ca n beat
‘p ric e’ d iffere nt iattoio ‘ser
n
Satisfaction of customer is indicated
• Bills paid on time
• Retaining customer retur
• Accounts receivable day
months.
• Customer satisfaction su
90%
Satisfaction of employees is indica
Quality, Cost & Profit relationship
Many people think that quality costs money and
adversely effects profits. But these costs are the costs of
doing it wrong first time .
Quality in the long run results in increased profitability.
For example if we design the product right first time , build it
right first time - we save all the costs of redesign , rework,
scrap, resetting, repair, warranty work etc.
 Quality and Profit : Paradigm

Profit

Quality

Cost
Quality is free

- PHILIP CROSBY
 Assignment 1
• Individual
• Visit any industry/ service sector of ur interest
and identify the TQM practices
• Identify at least 10 organizations assessed for
• CII exim award
• Deming award