Introduction and evolution of quality movement

K J Somaiya Institute of Management, India 1

General thoughts ….

 Why are we learning this subject?

 I thought TQM is only for Operations…..

 What has Finance got to do with TQM…

 What has Marketing go to do with TQM…..

 TQM is for manufactured product, right….

 How do I “pass this subject”….

K J Somaiya Institute of Management, India

A story of the ‘80s

Ford Motor Company 

  

Ford was simultaneously manufacturing a car model with transmissions made

in Japan and the United States.
Soon after the car model was on the market, Ford customers were requesting
the model with Japanese transmission over the US-made transmission, and
they were willing to wait for the Japanese model.
As both transmissions were made to the same specifications, Ford engineers
could not understand the customer preference for the model with Japanese
transmission. Finally, Ford engineers decided to take apart the two different
transmissions.

K J Somaiya Institute of Management, India

A story of the ‘80s (cont’d)

Ford Motor Company 

  

So what did they find out?

….  The American-made car parts were all within specified tolerance levels.
On the other hand, the Japanese car parts were virtually identical to each other,
and much closer to the nominal values for the parts – e.g., if a part was
supposed to be one foot long, plus or minus 1/8 of an inch – then the
Japanese parts were all within 1/16 of an inch.

This made the Japanese cars run more smoothly and

customers experienced fewer problems

K J Somaiya Institute of Management, India

After 50s Japanese industries followed the path of Quality Gurus Joseph
Juran & Deming and followed TQM.
Japanese companies, for example,
Sony and Casio in consumer electronics,
Toyota and Honda in four-wheeler automobile industry, Honda and Yamaha in
two-wheeler Industry,
Seiko and Citizen in Watch Industry and
Mitsubishi in heavy industry ……….
followed TQM principles and became world famous Japanese companies.
Pioneering work in TQM was also done by Taichi Ohno, who implemented
famous JIT and Toyota Production Systems(TPS).

Gradually, the concept of TQM spread to most of the world and By 1980s,
Japanese became world leaders in many industries and consumer product
segments

Prof. Ishikawa was invited by CII in 1986

Dr Juran in 1987.
Quality Council of India was set up by the GoI in 1997
K J Somaiya Institute of Management, India
Quality Management in India

Until late 1980s, Indian industries had a comfortable period, due to

License Raj. Quality was followed in an informal way.
They were in protective environment operating in seller’s market.
Customer Orientation was missing. Following of socialistic policies led to
lethargic work force and both private and public Indian companies,
operated with outdated technology, lower productivity, poor product
quality, and stagnant Industry.

In early1990s, floodgate of liberalization and globalization was opened in

India and suddenly, a wide gap in quality was visible in Indian products
and they struggled to compete with Japanese and other progressive
companies .
Gradually, Indian companies started appreciating TQM principles . A new
branch of management consultants started talking about SQC, Kaizen
and quality circles. Then emerged a new group of Industries like TVS
Group, Wipro, Infosys, Reliance industries, etc, who practiced TQM
principles like customer focus, continuous improvements, Employee
empowerment, Six sigma, ISO 9000,QMS and other SPC techniques.
Existing industries like L&T, Tata group, Birla group etc also joined this
TQM movement and gained big success in the competitive world.
K J Somaiya Institute of Management, India
Why talk of Quality
 Increased competition
 Customers become choosy
 Resources are becoming scare and costly
 Competitive Advantage

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K J Somaiya Institute of Management, India 8
What is Quality
Quality can be defined as the totality of FEATURES and
CHARACTERISTICS of a product or service that satisfies the
stated and/or implied need.
 Conformance to specifications
 Does product/service meet targets and tolerances defined by designers?

 Meeting the need

 Value for price paid
 Evaluation of usefulness vs. price paid. e.g. Axe made of gold v/s axe
made of iron ?? which is of good/better quality

 Fitness for use

 Product is considered to be of good quality, if it is fit for intended use over
the period of time. Without causing harm or side effects

K J Somaiya Institute of Management, India

Customer Requirements/Satisfaction.

What can I expect when I buy the product?- -> the specification.

Is it what I expected?- the conformance and meeting the need

Does it continue to do what I expected?- the reliability (fitness for use)

How much do I pay?.- the value.

When can I have it?.- delivery.

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Quality is………..

 Performance
 Features
 Conformance
 Easy to maintain
 Durability
 Aesthetics/Appearance
 Serviceability
 Safety
 Customer service/Response

K J Somaiya Institute of Management, India

Modern Importance of Quality

“Thefirst job we have is to turn out quality merchandise that

consumers will buy and keep on buying. If we produce it efficiently
and economically, we will earn a profit, in which you will share.”
- William Cooper Procter
(William Cooper Procter was head of Procter & Gamble from 1907 to 1930 and was the last
member of the founding families to lead the company)

Quality, productivity, and cost remain imperatives for

modern organizations.

K J Somaiya Institute of Management, India

Thank You
simsr.somaiya.edu

K J Somaiya Institute of Management, India 13