Unit 1

Introduction to TQM: Fundamentals of quality thinking and TQM. Understanding variation. Control charts and statistical analysis.

TQM is an enhancement to the traditional way of doing business. It is the art of managing the whole to achieve excellence. It is defined both a philosophy and a set of guiding principles that represent the foundation of a continuously improving organization. It is the application of quantitative methods and human resources to improve all the processes within an organization and exceed customer needs now and in the future. It integrates fundamental management techniques, existing improvement efforts, and technical tools under a disciplined approach. Definitions of Quality Conformance to specifications: How well a product or service meets the targets and tolerances determined by its designers. Fitness for use: A definition of quality that evaluates how well the product performs for its intended use. Value for price paid: Quality defined in terms of product or service usefulness for the price paid. Support services: Quality defined in terms of the support provided after the product or service is purchased. Total Quality Management (TQM) is an enhancement to the traditional way of doing business. It is a proven technique to guarantee survival in world-class competition. Only by changing the actions of management will the culture and actions of an entire organization be transformed. TQM is for the most part common sense. Analyzing the three words, we have Total Made up of the whole. Quality Degree of excellence a product or service provides. Management Art or manner of handling, controlling, or directing people etc.) Therefore, TQM is the art of managing the whole to achieve excellence: The Golden Rule is a simple but effective way to explain it: Do unto others as you would have them do unto you.

What is Total Quality Management? TQM is a management philosophy, a paradigm, a continuous improvement approach to doing business through a new management model. The TQM philosophy evolved from the continuous improvement philosophy with a focus on quality as the main dimension of business. Under TQM, emphasizing the quality of the product or service predominates. TQM expands beyond statistical process control to embrace a wider scope of management activities of how we manage people and organizations by focusing on the entire process, not just simple measurements. TQM is a comprehensive management system which: Focuses on meeting owners/customers needs by providing quality services at a cost that provides value to the owners/customers Is driven by the quest for continuous improvement in all operations Recognizes that everyone in the organization has owners/customers who are either internal or external Views an organization as an internal system with a common aim rather than as individual departments acting to maximize their own performances Focuses on the way tasks are accomplished rather than simply what tasks are accomplished Emphasizes teamwork and a high level of participation by all employees

TQM beliefs Presented here are universal total quality management beliefs. Owner/customer satisfaction is the measure of quality Everyone has owners/customers; everyone is an owner/customer Quality improvement must be continuous Analyzing the processes used to create products and services is key to quality improvement Measurement, a skilled use of analytical tools, and employee involvement are critical sources of quality improvement ideas and innovations Sustained total quality management is not possible without active, visible, consistent, and enabling leadership by managers at all levels If we do not continuously improve the quality of products and services that we provide our owners/customers, someone else will

The Primary Elements of TQM Total quality management can be summarized as a management system for a customer-focused organization that involves all employees in continual improvement. It uses strategy, data, and effective communications to integrate the quality discipline into the culture and activities of the organization.

Customer-focused. The customer ultimately determines the level of quality. No matter what an organization does to foster quality improvementtraining employees, integrating quality into the design process, upgrading computers or software, or buying new measuring toolsthe customer determines whether the efforts were worthwhile. Total employee involvement. All employees participate in working toward common goals. Total employee commitment can only be obtained after fear has been driven from the workplace, when empowerment has occurred, and management has provided the proper environment. High-performance work systems integrate continuous improvement efforts with normal business operations. Self-managed work teams are one form of empowerment. Process-centered. A fundamental part of TQM is a focus on process thinking. A process is a series of steps that take inputs from suppliers (internal or external) and transforms them into outputs that are delivered to customers (again, either internal or external). The steps required to carry out the process are defined, and performance measures are continuously monitored in order to detect unexpected variation. Integrated system. Although an organization may consist of many different functional specialties often organized into vertically structured departments, it is the horizontal processes interconnecting these functions that are the focus of TQM.
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Micro-processes add up to larger processes, and all processes aggregate into the business processes required for defining and implementing strategy. Everyone must understand the vision, mission, and guiding principles as well as the quality policies, objectives, and critical processes of the organization. Business performance must be monitored and communicated continuously. An integrated business system may be modeled after the Baldrige National Quality Program criteria and/or incorporate the ISO 9000 standards. Every organization has a unique work culture, and it is virtually impossible to achieve excellence in its products and services unless a good quality culture has been fostered. Thus, an integrated system connects business improvement elements in an attempt to continually improve and exceed the expectations of customers, employees, and other stakeholders.

Strategic and systematic approach. A critical part of the management of quality is the strategic and systematic approach to achieving an organizations vision, mission, and goals. This process, called strategic planning or strategic management, includes the formulation of a strategic plan that integrates quality as a core component. Continual improvement. A major thrust of TQM is continual process improvement. Continual improvement drives an organization to be both analytical and creative in finding ways to become more competitive and more effective at meeting stakeholder expectations. Fact-based decision making. In order to know how well an organization is performing, data on performance measures are necessary. TQM requires that an organization continually collect and analyze data in order to improve decision making accuracy, achieve consensus, and allow prediction based on past history. Communications. During times of organizational change, as well as part of day-to-day operation, effective communications plays a large part in maintaining morale and in motivating employees at all levels. Communications involve strategies, method, and timeliness.

These elements are considered so essential to TQM that many organizations define them, in some format, as a set of core values and principles on which the organization is to operate. The characteristics that are common to companies that successfully implement TQM in their daily operations are listed here. a) Strive for owner/customer satisfaction and employee satisfaction b) Strive for accident-free jobsites c) Recognize that the owner/customer provides the revenue while the employees are responsible for the profit d) Recognize the need for measurement and fact-based decision making e) Arrange for employees to become involved in helping the company improve f) Train extensively g) Work hard at improving communication inside and outside the company h) Use teams of employees to improve processes i) Place a strong emphasis on the right kind of leadership, and provide supervisors with a significant amount of leadership training j) Involve subcontractors and suppliers, requiring them to adopt TQM k) Strive for continuous improvement

Quality principles that successful TQM companies recognize The quality principles that successful TQM companies recognize and attempt to continually incorporate into their actions are the following: People will produce quality goods and services when the meaning of quality is expressed daily in their relations with their work, colleagues, and organization. Inspection of the process is as important as inspection of the product. Quality improvement can be achieved by the workers closest to the process. Each system with a certain degree of complexity has a probability of variation, which can be understood by scientific methods. Workers work in the system to improve the system; managers work on the system to improve the system. Total quality management is a strategic choice made by top management, and must be consistently translated into guidelines provided to the whole organization. Envision what you desire to be as an organization, but start working from where you actually are. Studies have indicated that people like working on a quality-managed jobsite especially due to the cleaner site and safer place to work. Accept the responsibility for quality. Establish datums for measurement. Use the principle of get it right, the first time, every time. Understand that quality is a journey, not a destination. It consists of steps that form a process that is continuous.

Quality Tools

1. Cause-and-effect diagrams are charts that identify potential causes for particular quality problems. They are often called fishbone diagrams.

2. A flowchart is a schematic diagram of the sequence of steps involved in an operation or process. It provides a visual tool that is easy to use and understand.

3. A checklist is a list of common defects and the number of observed occurrences of these defects. It is a simple yet effective fact-finding tool that allows the worker to collect specific information regarding the defects observed.

4. Control charts are used to evaluate whether a process is operating within expectations relative to some measured value such as weight, width, or volume. To evaluate whether or not a process is in control, we regularly measure the variable of interest and plot it on a control chart.

5. Scatter diagrams are graphs that show how two variables are related to one another. They are particularly useful in detecting the amount of correlation, or the degree of linear relationship, between two variables.

6. Pareto analysis is a technique used to identify quality problems based on their degree of importance. The logic behind Pareto analysis is that only a few quality problems are important, whereas many others are not critical.

7. A histogram is a chart that shows the frequency distribution of observed values of a variable.

Cost of quality The reason quality has gained such prominence is that organizations have gained an understanding of the high cost of poor quality. Quality affects all aspects of the organization and has dramatic cost implications. The most obvious consequence occurs when poor quality creates

dissatisfied customers and eventually leads to loss of business. However, quality has many other costs, which can be divided into two categories. The first category consists of costs necessary for achieving high quality, which are called quality control costs. These are of two types: prevention costs and appraisal costs. The second category consists of the cost consequences of poor quality, which are called quality failure costs. These include external failure costs and internal failure costs. These costs of quality are shown in Figure

The first two costs are incurred in the hope of preventing the second two. Prevention costs are all costs incurred in the process of preventing poor quality from occurring. They include quality planning costs, such as the costs of developing and implementing a quality plan. Also included are the costs of product and process design, from collecting customer information to designing processes that achieve conformance to specifications. Employee training in quality measurement is included as part of this cost, as well as the costs of maintaining records of information and data related to quality. Appraisal costs are incurred in the process of uncovering defects. They include the cost of quality inspections, product testing, and performing audits to make sure that quality standards are being met. Also included in this category are the costs of worker time spent measuring quality and the cost of equipment used for quality appraisal. Internal failure costs are associated with discovering poor product quality before the product reaches the customer site. One type of internal failure cost is rework, which is the cost of correcting the defective item. Sometimes the item is so defective that it cannot be corrected and must be thrown away. This is called scrap, and its costs include all the material, labor, and machine cost spent in producing the defective product. Other types of internal failure costs include the cost of machine downtime due to failures in the process and the costs of discounting defective items for salvage value.

External failure costs are associated with quality problems that occur at the customer site. These costs can be particularly damaging because customer faith and loyalty can be difficult to regain. They include everything from customer complaints, product returns, and repairs, to warranty claims, recalls, and even litigation costs resulting from product liability issues. A final component of this cost is lost sales and lost customers. For example, manufacturers of lunch meats and hot dogs whose products have been recalled due to bacterial contamination have had to struggle to regain consumer confidence. Other examples include auto manufacturers whose products have been recalled due to major malfunctions such as problematic braking systems and airlines that have experienced a crash with many fatalities. External failure can sometimes put a company out of business almost overnight.

Why should teams use Control Charts? Monitor process variation over time. Differentiate between special cause and common cause variation. Assess the effectiveness of changes to improve a process. Communicate how a process performed during a specific period.

What Is a Control Chart? A statistical tool used to distinguish between process variation resulting from common causes and variation resulting from special causes. What are the types of Control Charts? There are two main categories of Control Charts, those that display attribute data, and those that display variables data. Attribute Data: This category of Control Chart displays data that result from counting the number of occurrences or items in a single category of similar items or occurrences. These count data may be expressed as pass/fail, yes/no, or p resence/absence of a defect. Variables Data: This category of Control Chart displays values resulting from the measurement of a continuous variable. Examples of variables data are elapsed time, temperature, and radiation dose.

Data analysis done is represented in following types of charts: a) b) c) d) e) f) g) h) i) X-Bar and R Chart Individual X and Moving Range Chart for Variables Data Individual X and Moving Range Chart for Attribute Data X-Bar and S Chart Median X and R Chart c Chart u Chart p Chart np Chart

What are the elements of a Control Chart? Each Control Chart actually consists of two graphs, an upper and a lower, which are described below under plotting areas. A Control Chart is made up of eight elements. 1. Title. The title briefly describes the information which is displayed. 2. Legend. This is information on how and when the data were collected. 3. Data Collection Section. The counts or measurements are recorded in the data collection section of the Control Chart prior to being graphed. 4. Plotting Areas. A Control Chart has two areasan upper graph and a lower graphwhere the data is plotted.

a. The upper graph plots either the individual values, in the case of an Individual X and Moving Range chart, or the average (mean value) of the sample or subgroup in the case of an X-Bar and R chart. b. The lower graph plots the moving range for Individual X and Moving Range charts, or the range of values found in the subgroups for X-Bar and R charts. 5. Vertical or Y-Axis. This axis reflects the magnitude of the data collected. The Y-axis shows the scale of the measurement for variables data, or the count (frequency) or percentage of occurrence of an event for attribute data. 6. Horizontal or X-Axis. This axis displays the chronological order in which the data were collected. 7. Control Limits. Control limits are set at a distance of 3 sigma above and 3 sigma below the centerline [Ref. 6, pp. 60-61]. They indicate variation from the centerline and are calculated by using the actual values plotted on the Control Chart graphs. 8. Centerline. This line is drawn at the average or mean value of all the plotted data. The upper and lower graphs each have a separate centerline

What are the Benefits of TQM?

For Management
Provides an invaluable problem-solving tool for managers and supervisors to use Dispels negative attitudes Management becomes more aware of problems that affect the individuals work environment Employees gain a sense of participation Increases efficiency and productivity Reduces turnover rate, tardiness, costs, errors, and scrap & rework Improves communications within and among all departments Develops management skills that were never taught, or are long forgotten due to lack of application Develops overall company awareness and company unity Rearranges priorities which once seemed locked in place Builds loyalty to the company Reveals training requirements in all departments Lessens the number of defects received from suppliers when they are encouraged to train in quality management

For Employee
Provides opportunity for personal growth and development (as a result of team training activities) and the opportunity to develop and present recommendations Increases innovation (through a greater variety of approaches and perspectives) for solving problems, removing fear of failure Employees use their knowledge and skills to generate data-driven recommendations that will lead to well-informed decisionmaking Encourages decision-making at the most appropriate level Increases motivation and acceptance of new ideas Increases job satisfaction (as a result of the opportunity to participate in and have influence over work) Recognizes employees for their knowledge, skills, and contribution toward improvement Develops mutual respect among employees, management and customers Promotes teamwork

Obstacles associated with TQM Implementation Lack of management commitment Inability to change organizational culture Improper planning Lack of continuous training and education Incompatible organizational structure and isolated individuals and departments Ineffective measurement techniques and lack of access to data and results. Paying inadequate attention to internal and external customers. Inadequate use of empowerment and teamwork.