AE 6132

Total Quality Management

 Course details
• Credits : 02 (GPA)
• Hours allocated : Thursday at 11.15 a.m to
1.15 p.m

Reference book: Dale H. Besterfield, Carol

Besterfield– Michna, et al; (2005),Total
Quality Management, 3rd edition, Pearson
Education (Pvt) ltd, India.
 Assessment Criteria

• End Semester Examination 80 %

• Assignments 05 %

• Group Case studies 07%

• Phase test /Industrial visit report 08%
 Lecture hall rules
• No admission after 11.30 a.m
• No mobile phones usage during the lecture
• Please feel free to ask questions if you cann’t
understand (you may interrupt me during lecture )
• Students aren’t allowed to sleep or cross talk
during lecture
• Copying (identical) assignments /phase test may
lead to get zero
• Late submission of assignments is not allowed
• Not allowed to sign for the absentees
• 5 min break after each hour
 Course Contents
1. Quality Concepts
Definitions, complain mushroom, Demin cycle, quality control, supplier-customer chain,
standerdiazation, eight quality management principles

2.Quality Auditing
Types, Classification, stages of audit, auditing techniques, nonconformity reports.
 
3.Quality Management Systems
General requirements, documentation requirements, mandatory procedures, management
responsibilities, resource management, product realization, monotoring, measurements
and analysis of data.
 
4.Control Charts
Charts, R Charts, p - Charts, np - Charts
 
5.Quality Costs
Prevention costs, Appraisal costs, Internal failure costs, External failure costs.
 Bridging
• Video
 Objective of today’s lecture
• Importance of TQM
What is Total Quality Management (TQM)?

-An enhancement to the traditional way of doing

business.
-To guarantee survival in world class competition
- Only by changing the actions of management
 TQM stands for?

Total – made up of the whole

Quality- degree of excellence a product or service
provides
Management- art or manner of handling,
controlling, directing

TQM is art of managing the whole to achieve excellence.

 Quality Concepts
Definition

TQM is defined as both a philosophy and a

set of guiding principles that represent the
foundation of a continuously improving
organization.
 TQM
is the application of quantitative methods and
human resources to improve all the processes
within an organization and exceed customer
needs now and in future.

integrates,
fundamental management techniques, existing
improvement efforts and technical tools.
 Quality?
• The banker will answer” service”
• The healthcare worker will answer “quality
health care”
• The hotel employee will answer “customer
satisfaction”
• The manufacturer will simply answer “quality
product”
 Benefits of TQM
• Greater customer loyalty
• Market share improvement
• Higher stock prices
• Reduced service calls
• Higher prices
• Greater productivity
 Six basic concepts of TQM
1. A committed and involved management to provide
long-term top- to- bottom organizational support.
- Management must participate in the quality program.
- Develop a clear vision, set long term goals and direct the
program.
- Quality goals are included in the business plan.
- An annual quality improvement programme – involved
input from the entire work force.
- Managers act as coaches in quality improvement teams.
- TQM is a continual activity which must be
communicated to all people.
2. An unwavering focus on the customer, both
internally and externally.
- The key to an effective TQM program is its focus on
the customer.
- An excellent place to start is by satisfying internal
customers.
- Listen to the “voice of the customer”
- Emphasize design quality and defect prevention
- Do it right the first time and every time
- Customer satisfaction is the most important
consideration.
3. Effective involvement and utilization of the entire
work force.
-TQM is an organization –wide challenge that is
everyone’s responsibility.
-All personnel must be trained in TQM, statistical
process control(SPC), other appropriate quality
improvement skills
-internal suppliers on project teams as internal
customers
-Changing behavior is the goal
- People must come to work not only to do their jobs,
but also to think about how to improve their jobs.
4. Continuous improvement of the business and
production process.
-There must be a continual attempt to improve all
business and production processes.
-Quality improvement projects ( on-time delivery,
order entry efficiency, billing error rate,
customer satisfaction, cycle time, supplier
management)
-Technical techniques (statistical process control,
benchmarking, quality function deployment,
ISO 9000) good for problem solving.
5. Treating suppliers as partners.
- On the average 40% of the sales is purchased
product or service
-The supplier quality must be outstanding.
-A partnering relationship must be developed.
- Both parties have as much to gain or lose based on
the success or failure of the product or service.
-The focus should be on quality and life cycle costs
rather than price.
- Number of suppliers should be few as it led for true
partnering
6. Establish performance measures for the
processes.
- Performance measures such as uptime, percent
nonconforming, absenteeism and customer
satisfaction should be determined for each
functional area.
-These measurements should be posted for
everyone to see.
- Quantitative data are necessary to measure the
continuous quality improvement activity.
 The purpose of TQM
- is to provide a quality product and/or service to
customers, which will, in turn, increase productivity and
lower cost, with a higher quality product and lower
price, competitive position in the marketplace will be
enhanced.

-Series of events will allow the organization to achieve the

objectives of profit and growth with greater ease.

-In addition, the work force will have job security, which
will create a satisfying place to work.
 Assignment 01
Critically explain the position of a leader in
Total Quality Management. Discuss about the
characteristics of an effective leader in order
to ensure the quality of products
 New and Old cultures
Quality Element Previous state TQM
Definition Product- oriented Customer-oriented
Priorities Second to service and First among equals of
cost service and cost
Decisions Short-term Long-term
Emphasis Detection Prevention
Errors Operations System
Responsibility Quality control Everyone
Problem solving Managers Teams
Procurement Price Life-cycle costs,
partnership
Manager’s Role Plan, assign, control and Delegate, coach, facilitate
enforce and mentor
 Gurus of TQM
• Shewhart – control chart theory with control limits
• Deming – foundation for the Japanese quality
miracle, theory for management to improve
quality, productivity and competitive position
• Juran- Emphasized the necessity for management
at all levels to be committed to the quality effort
with hands-on involvement.
• Feiganbaum- Quality begins by identifying the
customer’s requirements and ends with a product
or service in the hands of a satisfied customer.
 Gurus of TQM
• Ishikawa – total quality control concept adapted for
Japanese and developed the cause and effect
diagram.
• Crosby – “Quality is Free” book published and sold
1.5 million copies and changed the way
management looked at quality. “Doing it right the
first time” is less expensive than the costs of
detecting and correcting.
• Taguchi – developed loss function concept that
combines cost, target and variation into one metric.
 TQM framework (concept)

• For organizations to survive and grow in

today's challenging marketplace they
need true commitment to meeting
customer needs through communication,
planning and continuous process
improvement activities.
 TQM framework
• Creating this culture change can improve the
products and services of your organization as
well as improve employee attitudes and
enthusiasm.

• All of these help with the ultimate goal of

improved quality, productivity and customer
satisfaction which is an important competitive
advantage in today's marketplace.
 Table 01: Gain in productivity with Improved Quality

Item Before After Improvement

Improvement
Relative total cost for 20 1.00 1.00
units
Conforming units 18 19
Relative cost for 0.10 0.05
nonconforming (defect)
units
Productivity increase (100 ) (1/18) = 5.6%
Capability increase (100 ) (1/18) = 5.6%

Profit increase (100 ) (1/18) = 5.6%

 From table 01:
• Quality and productivity are not mutually exclusive.
• Improvements in quality can lead directly to
increase productivity and other benefits.
• As shown in table 01, the improved quality results
in a 5.6% improvement in productivity, capacity and
profit.
• Many quality improvement projects are achieved
with the same work force, same overhead and no
investment in new equipment.
- More and more corporations are recognizing the
importance and necessity of quality improvement
to survive domestic and world-wide competition.
• Quality improvement is not limited to the
conformance of the product or service to
specifications; it also involves the essential
quality in the design of the system.
• The prevention of product, service and
process problems is a more desirable
objective than taking corrective action after
the product is manufactured or a service
rendered.
• TQM does not occur overnight.
- It takes a long time to build the appropriate
emphasis and techniques into the culture.
 Defining Quality
• Quality – in terms of an excellent product or
service that fulfills or exceeds our expectations.
- These expectations are based on the intended use
and the selling price.
- ex: A customer expects a different performance
from different grade materials.
- When a product surpasses (be greater than) our
expectations we consider that quality.
 Quality can be quantified,
Q= P/E
Where, Q = quality
P = performance
E = expectations
Conditions: If Q> 1 , the customer has a good feeling
about the product or service.
The determination of P and E will most likely be
based on perception with the organization
determining performance and the customer
determining expectations.
 Definitive definition of quality
- Is given in ISO 9000:2000
• It is defined as the degree to which a set of inherent
characteristics fulfills requirements.
- Degree means that quality can be used with adjectives
such as poor, good and excellent.
-Inherent is defined as existing in something, especially
as a permanent characteristic.
-Characteristics can be quantitative or qualitative.
-Requirement is a need or expectation that is stated;
generally implied by the organization, its customers
and other interest parties.
 9 dimensions of quality
The Dimensions of Quality
Dimension Meaning and Example
Performance Primary product characteristics, such as the brightness of the picture

Features Secondary characteristics, added features, such as remote control

Conformance Meeting specifications or industry standards, workmanship

Reliability Consistency of performance over time, average time for the unit to fail

Durability Useful life, includes repair

Service Resolution of problems and complaints, ease of repair
Response Human – to – human interface, such as the courtesy of the dealer
Aesthetics Sensory characteristics, such as exterior finish
Reputation Past performance and other intangibles, such as being ranked first

These are independent, therefore product can be excellent in one dimension & poor in other.
 Further about 9 dimensions
Therefore, quality can be determined by using a
few of the dimensions of quality.
• Marketing is responsible of identifying the
relative importance of each dimension of
quality.
• Then , these dimensions are then translated into
the requirements for the development of a new
product or the improvement of an existing one.
 Awareness
• An organization will not begin the transformation to
TQM until it is aware that the quality of the product or
service must be improved.
- Awareness comes when an organization loses market
share or realizes that quality and productivity go hand-
in-hand.
-TQM is a better way to run a business and compete in
domestic and world markets.
• A new attitude has emerged – quality first among the
equals of cost and service
- To sum it up, the customer wants value.
 Historical Review
• Middle ages: Quality was to a large extent controlled by
the long periods of training
• Industrial revolution: the concept of specialization of
labor
- A worker no longer made the entire product, only a
portion.
- In early days quality wasn’t greatly affected.
- As product became more complicated and jobs more
specialized
• In 1924, W.A. shewhart of Bell telephone Laboraties
developed a statistical chart for quality control.
• This was the beginning of statistical quality control.
 Historical Review
• In 1946, the American Society for Quality Control was
formed.
• Currently, American Society for Quality (ASQ)
- publications, conferences, training sessions, promoted
the use of quality for all types of production and
service.
• In 1950, W. Edwards Deming, learnt about statistical
quality control from shewhart and gave a lecture on
statistical methods to Japanese engineers on quality.
• Japanese set the quality standards for the rest of the
world to follow.
 Historical Review
• In 1960, the first quality control circle was
formed for the purpose of quality
improvement.
• A quality renaissance began to occur in U.S
products and services,
Planby the middle of 1980
the concepts of TQM were being publicized.
Quality
Check Assurance DO

Action
 Historical Review

• In late 1980s the automotive industry began to

emphasize statistical process control (SPC).

• Malcolm Baldrige National Quality Award was

established.
• Measure TQM
• Genechi Taguchi introduced design of
experiments (DOE) as a valuable quality
improvement tool.
 Historical Review
• Saturn automobile ranked first in customer
satisfaction in 1996.
• In addition, ISO 9000 became the worldwide
model for a quality management system.
• ISO 14000 was approved as the worldwide
model for environmental management systems.
 Obstacles
- during implementation
- Small – niche
- Comfortable with the current state
- Satisfied about the amount of work being
performed
- Profit realized
- perception of the customers
- Such organizations will see little need for TQM
-
Most common obstacles of implementing TQM
Lack of
Lack of Inability to
Improper continuous
Management change
Planning training and
commitment Organizational
education
culture

Paying Inadequate
Incompatible inadequate use of
organizational attention to empowerme
Ineffective
structure and internal and nt and team
measurement
isolated external work
techniques and
individuals and customers
lack of access
departments to data and
results Failure to
continually
improve
 Lack of Management commitment

• a substantial management commitment of

management time and organizational
resources.
• purpose must be clearly and continuously
communicated to all personnel.
• Consistently apply the principle of TQM
 Inability to change Organizational culture
• Changing an organization’s culture is difficult
• Will require 5 years
• Individuals resist change
• Management should understand the basic concept of
change
-People change when they want and meet their own
needs
-Never expect anyone to engage in behavior that serves
the organization’s values unless adequate reason
(why) has been given
- People must move from a state of fear to trust
 Inability to change Organizational culture con’t
• Difficult for individuals to change their way of
doing things
• Much more difficult for an organization to do
cultural change

• Speeches, slogans and campaigns will motivate

people
Ex: Pizza Hut : we have a salad bar for some reason
 Improper Planning
• All constituents of the organization must be
involved during implementation
• Two-way communication of ideas by all
personnel during development of plan,
implementation
• Customer satisfaction should be the goal
rather than financial or sales goals
 Lack of continuous training and education

• Training and education is an ongoing process for

everyone.
• Training and education are most effective when
senior management conduct the training
• Informal training
Incompatible organizational structure and
isolated individuals and departments
• Difference between departments and individuals
can create implementation problems.
• The use of multifunctional teams will help to break
long standing barriers.
• Re-structuring to make the organization more
responsive to customer needs may be needed.
• Individuals who donot embrace the new philosophy
may leave the organization
• Adherence to 6 basic concepts
Ineffective measurement techniques and lack of access to data and results

• Key characteristics should be measured, so the

effective decisions can be made
• In order to improve, you need to measure
• Access to data and quick retrieval is necessary
Paying inadequate attention to internal and external customers

• Need to understand the changing needs and

expectations of their customers.
• Effective feedback mechanisms for better
decision making
• Give the right people direct access to the
customers
Inadequate use of empowerment and teamwork

• Teams need to have the proper training

• Facilitator at the beginning
• Team’s recommendations should be followed
• Empower individuals to make decisions that
affect the efficiency of their process or the
satisfaction of their customers.
Failure to continually improve
Benefits of TQM