Total Quality Management 331 v1

TOTAL QUALITY MANAGEMENT
Sub Code-331
Developed by
Prof. P.M. Bendre
On behalf of
Prin. L.N. Welingkar Institute of Management Development & Research
CONTENTS
Contents
Chapter No. Chapter Name
Page No.
Welcome to the Wonderland of Quality
Wonderland of Quality: Continues
32-56
Total Quality Management Philosophy
57-82
Process Approach
Problem Solving and Decision Making
115-133
Preventive Techniques
134-147
Continuous Improvement
148-190
Cost of Quality
191-208
Reliability
209-220
10
Customer Focus
221-240
11
Supplier Teaming
241-251
12
People: Total Employee Involvement
252-271
13
Measurement Systems Analysis
272-286
14
Quality Management System
287-308
15
Service Quality
309-330
16
Road Map to Total Quality Management
331-342
17
Innovative Methods for TQM
343-365
18
Quality Awards
366-378
19
Latest Information on TQM
379-384
3-31
83-114
!2
WELCOME TO THE WONDERLAND OF QUALITY
Chapter 1
WELCOME TO THE WONDERLAND OF
QUALITY
Objectives
After completing this chapter, you will be able to understand:
Quality work in every aspect of life

Doing it right the first time, every time
Importance of continual improvement
Importance of internal and external customers satisfaction, delight and
thrill
Quality and competitiveness
Quality life
Thorough understanding of TQM concept made easy to grasp
Structure
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
Welcome
Our Life
Defining Quality
Evolution of Total Quality Management
Contributions of the Great Quality Gurus
Definition of a Defect
Process Approach
Human Resources Development and Leadership
Supplier Development
Continual Improvement
Concept of Internal Customer
Quality and Competitiveness
Quality is Not a Destination: It is a way of LIFE!
Ultimate Solution: Education and Training
Activities for the Students
Summary
Self Assessment Questions
Multiple Choice Questions
!3
1.1 Welcome
I welcome you to the most wonderful subject on the earth: that is, Quality.
I assure you that thorough study of this subject will not only improve your
competence as an entrepreneur, engineer, doctor or a professional in any
discipline, but also will enhance your life tremendously and make your life
on earth more meaningful. Every individual must make quality as a matter
of continuous practice and improvement.
You may be wondering what all difference I am going to make in this book
and what different topics I am going to explain to you when there are so
many books on this subject already available everywhere. Most of the
available books really give you just the theory of TQM whereas in this book
we are going to emphasize upon the implementation or application of this
theory in our practical life which has been steadily becoming very difficult,
full of tension and tedious day in and day out. We shall find ways and
means to make our day-to-day routine more pleasant, by travelling the
Quality route.
Further, this book will certainly convince you that the only way to take our
Nation to fast become the developed country is the Quality way. I had
always felt that the Primary and Secondary Education must have Quality as
the prime subject in the syllabus. If it happens, the deterioration of moral
values will stop and people will become more serious and focused about
the goals of the Nation. It is not only the Government, but also
participation of the people which is required in making our Nation a
developed country.
You will agree that as Management students, we must be more practical
than being theoreticians. And hence this effort is presented only for you.
1.2 Our Life

We always feel as consumers that we are indeed big losers, dont we? I am
citing a few examples:
1.
2.
3.
4.
Adulteration in food
Premature failure of electrical, electronic and automotive components
Late starting and late arrival of buses, trains and airplanes
Passengers luggage misplaced/lost by an airline
!
!4
5.
6.
7.
8.
9.
Poor education level in spite of high expenditure

Corruption resulting into premature failure of new constructions/roads
Zero traffic discipline
Late deliveries by courier services and transporters, transit damages
Inconsistent/Good and Bad workmanship
!
10.Poor service by almost every supplier/vendor/shopkeeper
11.Purchased product found damaged/broken
If on the scale of 1-100, level of good quality is considered as 100, I am
afraid we might be less than 5, arent we?
This situation has to be totally improved and as the students of
Management, you only might have to do it.
1.3 Defining Quality

Quality is defined as degree to which a set of inherent characteristics fulfils
customer requirements.
Requirement means need or expectation that is stated, generally
implied or obligatory.
The term quality can be used with adjectives such as poor, good or
excellent. Inherent means existing in something, especially as a
permanent characteristic.
Customer is defined as an organization or a person that receives a
product.
!5
External Customers: current, prospective and lost customers.

Customer satisfaction is defined as customers perception of the
degree to which the customers requirements have been fulfilled.
There are many earlier definitions of quality such as Fitness for use,
Conformance to specications, Value for price paid, excellence that is
better than a minimum standard etc. All of these definitions also give very
good idea what quality must be.
However, the above said definition made by ISO 9000:2005 (ref: Chapter
No. 2 and 14) gives the total perception of the subject.
Now with this definition, you can judge yourself as to where we stand if we
compare ourselves as consumers.
Case Example:
One of my friends was planning to buy a sports car. He was making a
comparative study of various models. My other friend is an expert in this
field having a long time exposure to automobiles. He advised my friend to
buy the Fortuner.
You will agree that my expert friend was right, because the Fortuner is
manufactured conforming to all specifications and is totally fit for use as a
sports car in every point of view. It has a competitive price advantage over
other models, and is better than a minimum standard. Though the Fortuner
fulfilled all the quality requirements, my friend did not buy the Fortuner,
instead he bought the Santa Fe.
The reasons for this were:
1. The Fortuner was not available in the market immediately. My friend
who is a merchant Navy guy wanted to buy the car before going on
voyage.
2. He also felt that the running cost of the Fortuner would be higher and
the after-sales service of it might not be as good.
!6
So, the definition, viz., Customers perception of the degree to which

the customers requirements have been fulfilled gives the perfect
perspective of the matter.
Though quality is an abstract perception, it has a quantitative measure:
Q = (P / E)
where, Q = quality, P = performance as measured by the
manufacturer, and E = expectations of the customer.
Better the performance better is the quality which is inversely proportional
to the expectations.
Quality Objectives are defined as something sought or aimed for,
related to Quality. Quality Objectives are generally specified for relevant
functions and levels in the organization.
Quality is in-built into the product at every stage from conceiving
specification and design stages to prototyping testing and manufacturing
stages.
Reliability
Probability and capability of components, equipments, products and
systems to perform their required function:
1. For desired period of time without failure
2. In specified environments and
3. With a desired confidence.
Effects of Poor Quality
1.
2.
3.
4.
5.
6.
7.
Low customer satisfaction

Low productivity, sales and profit
Low morale of workforce
More re-work, material and labor costs
High inspection costs
Delay in shipping
High repair costs
!7
8. Higher inventory costs

9. Greater waste of material
Benefits of Quality
1. Higher customer satisfaction
2. Reliable products/services
3. Better efficiency of operations
4. More productivity and profit
5. Better morale of workforce
6. Less wastage costs
7. Less Inspection costs
8. Improved process
9. More market share
10.Spread of happiness and prosperity
11.Better quality of life for all
12.Generally, customers are often willing to pay more for or wait for
delivery of products of superior quality.
Quality Costs
1. Quality cost is the cost of bad quality of product and services that
rebounds to the Manufacturer.
2. It adds to other costs in Design, Purchase, Production, Sales, and
Service etc. Quality costs in all departments. can be measured,
programmed, budgeted etc.
3. External failure costs Returned goods, Warranty, Service etc.
4. Internal failure Quality costs Rework of products
5. Appraisal costs Inspectors and Inspection costs
6. Prevention costs-associated with Design, Sales, Purchase
Consistency
The process must guarantee consistency in:
1. Delivery and
2. Service.
!8
Periodical calibration of instruments

Local exhaust to ensure that fumes do not spread on other operations
Traceability: by batch numbers.
1.4 Evolution of Total Quality Management

The evolution of TQM started with Inspection, followed by Quality Control,
Quality Assurance and then Total Quality Management.
Inspection
1.
2.
3.
4.
Identifying non-conformities
Salvaging
End of pipe approach
End justifies means
Quality Control
1.
2.
3.
4.
Process Performance data

Quality Planning
Statistical Tools
Control Instrumentation
Quality Assurance:
1.
2.
3.
4.
Quality Manuals
Systems Certification
Quality Costs
Documentation
Total Quality Management

1.
2.
3.
4.
Customer Focus
Human and System Component
Performance Measurement
!9
Various Definitions of TQM

TQM is the integration of all functions and processes within an organization
in order to achieve continuous improvement of the quality of goods and
services. The goal is customer satisfaction.
The TQM policy has two components:
1. Defect free product/service supplied on time to customers.
2. Advancing the state-of-the-art which is a development process to meet
the rising expectations of customers requirements.
The foundation on which a successful TQM effort rests includes:
1. Customer Focus
2. Total Participation
3. Continual Improvement
1.5 Contributions of the great quality Gurus

1. In 1924, W.A. Shewhart of Bell Telephone Labs developed a statistical
chart for the control of product variables the beginning of SQC and
SPC and showed that productivity improves when variation is reduced.
W.A. Shewhart
2. In the same decade, H.F. Dodge and H.G. Romig of Bell Telephone Labs
developed statistical acceptance sampling instead of 100% inspection.
3. In 1946, the American Society for Quality Control was formed.
!10
!
W. Edwards Deming
Joseph M. Juran
4. In 1950, W. Edwards Deming, who got inspired from Shewhart, taught

SPC and SQC to Japanese engineers and CEOs. PLAN-DO-CHECK-ACT
cycle was made popular by him however; he always referred to it as the
"Shewhart cycle". He is considered by many to be the father of modern
quality control. Later in Deming's career, he modified PDCA to "Plan, Do,
Study, Act" (PDSA) because he felt that "check" emphasized inspection
over analysis. Today, he is regarded as a national hero in Japan.
Japanese Union of Scientists and Engineers (JUSE)'s board of directors
established the Deming Prize which continues to exert considerable
influence on the disciplines of quality control and quality management.
5. In 1954, Joseph M. Juran taught Japanese managements their
responsibility to achieve quality. He focuses on top-down management
and technical methods rather than worker pride and satisfaction.
6. In 1960, Dr. K. Ishikawa formalized quality circles the use of small
groups to eliminate variation and improve processes. SQC techniques
were being applied by Japanese workers.
7. 1970s US managers were learning from Japan Quality implementation
miracles.
8. In the late 70s and early 80s:
(a) Deming returned from Japan to write Out of the Crisis, and began
his famous 4-day seminars in the United States.
!11
(b) Phil Crosby wrote Quality is Free.

(c) In 1980, Deming was featured prominently in an NBC TV
documentary titled If Japan can... Why can't we?
About the increasing industrial competition the United States was facing
from Japan. As a result of the broadcast, demand for his services increased
dramatically, and Deming continued consulting for industry throughout the
world until his death at the age of 93.
1. Motorola began Six Sigma
(a) In 1980s TQM principles and methods became popular (also in
auto industry),
(b) In 1990s, the ISO 9000 model became the worldwide standard
for QMS.
Walter A. Shewhart
(1924)
Contributed to understanding of process variability

Developed concept of statistical control charts
Originator of PDCA cycle
W. Edwards Deming
(1950 onwards...)
Stressed upon managements responsibility for

quality
SQC Approach
Developed 14 Points to guide companies in quality
Popularized PDCA cycle
Joseph M. Juran (1950 Dened quality as tness for use

onwards...)
Developed concept of cost of quality
Armand V. Feigenbaum Introduced concept of total quality control.
(Mid-1950s)
Philip B. Crosby
(1960s)
Coined phrase quality is free

Zero defects concept
Kaoru Ishikawa (1960s Developed cause-and-effect diagrams

onwards)
Identied concept of internal customer
Quality circles
Genichi Taguchi
(1950s onwards)
Focused on product design quality

Developed Taguchi loss function
!12
Demings 14 Points
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
Create constancy of purpose for improvement

Adopt a new philosophy
Cease dependence on mass inspection
Do not award business on price alone
Work continually on the system of production and service
Institute modern methods of training
Institute modern methods of supervision of workers
Drive out fear
Break down barriers between departments
Eliminate slogans, exhortations, and targets for the workforce
Eliminate numerical quotas
Remove barriers preventing pride of workmanship
Institute a vigorous program of education and retraining
Take action to accomplish the transformation
1.6 Definition of a Defect

A defect is any variation of a required characteristic of the product (or its
parts) or services which is far enough from the target value. It prevents
the product from fulfilling the physical and functional requirements of the
customer as viewed through the eyes of your customer.
A defect is anything that causes the processor or the customer to make
adjustments.
Above all, a defect is ANYTHING that dissatisfies your customer.
Case Examples:
1. In Kirloskar Electric Company Bangalore, the Marketing Department
sent a witness inspection call to the customer for an induction motor.
The customer being extremely busy in his audit requested to postpone
the date of inspection, but since the monthly target was to be fulfilled,
Marketing Department insisted on him to come on the scheduled date.
Finally, the inspector came, only to find that the offered motor was
horizontal, and not vertical as per customers order.
!13
2. In one more such incident, in Kirloskar Electric Company, Bangalore, the

Marketing Department sent a witness inspection call to the customer for
an induction motor. When the inspector gave a confirmation ring about
his arrival to the Marketing Department, nobody attended the call.
Finally the inspector came. However, he was made to wait for one hour.
Nobody offered him even a glass of water. After that the customer got a
shock when he found that the motor was not yet ready for testing.
3. In MICO Bosch, Nasik, a customer gave a trunk call from Kolkata, which
was attended by a junior clerk after so many rings, asked the customer
to hold on, went to call the concerned case worker and never came
back. After about one hour, when the customer called up again, he was
told that the concerned person to whom he wanted to speak was on
leave.
They say, most of the times the customer is unhappy not because of the
bad quality, but because of aforesaid incidents, which are nothing but
defects.
Customer Satisfaction/Dissatisfaction Feedback
1. Customer feedback has to be continuously sought and monitored not
one-time only! (Pro-active! Complaints are a reactive method of finding
out there is a problem).
2. Customer feedback can be relayed to Manufacturer.
3. Performance comparison with competitors can be known.
4. Customers needs can be identified.
5. Relative priorities of quality can be obtained from the horses mouth!
6. Areas for improvement can be noted.
Customer Feedback Methods
1.
2.
3.
4.
5.
6.
Comment cards enclosed with warranty card when product is purchased

Customer survey and questionnaire
Customer visits
Customer focus groups
Quarterly reports
Toll-free phones
!
!14
7. e-mail, Internet newsgroups, discussion forums

8. Employee feedback
Customer Handle with Care!
1.
2.
3.
4.
Employers dont pay wages but it is the customer who pays the wages!
So take good care of your customers.
Customer-care centers not just profit-centers!
The entire organization must in effect revolve around the customer
whether the customer is being well served and if he is really pleased,
contented and satisfied with the service you have to offer.
Customer Care
1. Keep promises to customers
2. Return customer calls promptly
3. Allot staff to handle customer problems
4. Treat customers with courtesy, respect and professionalism always
5. Evaluate customer satisfaction regularly
6. Search for customer-related improvements continuously
7. Deliver products/services promptly and efficiently
8. Give every customer complete and personal attention.
9. Maintain a neat and clean appearance of self and work-place, at all
times
10.Review and implement customer feedback and suggestions into current
procedures when needed
11.Training and education to enhance job performance and commitment to
customer care
12.Treat every customer as we would treat ourselves
!15
1.7 Process Approach

ISO 9000:2008 says (Here, supplier means manufacturer):
1. The supplier shall identify and plan the production, installation and
servicing processes which directly affect quality and shall ensure that
these processes are carried out under controlled conditions.
2. Process has to ensure compliance with all applicable government safety
and environmental regulations.
3. Documented process monitoring and operator instructions.
4. Process capability > 1.67 should be achieved.
5. Inspect and test the product as required by the quality plan.
Further, Process Flow Chart, Control Plan, Process Capability Summary
have to be made for all the critical processes.
1.8 Human Resources Development and Leadership

1. Deming emphasized that no organization can survive without good
people, who are improving.
2. In order to satisfy customers, businesses must first satisfy employees.
3. Secret of Toyota Quality is the workforce - everybody that has a hand in
production.
4. The human resource is the only one that the competitor cannot copy.
HRM activities include:
1. Determining organizations human resource needs
2. Assisting in design of work systems
3. Selecting, recruiting, training and developing, counseling, motivating
and rewarding employees
4. Acting as a liaison with trade union and government organizations
5. Welfare of employees
!16
1.9 Supplier development

1. Suppliers are referred as the co-producers.
2. Purchasing departments develop long-term relationships with few
suppliers rather than short-term relationship with many suppliers.
3. Along with other aspects, quality becomes the primary basis for
selection of suppliers.
4. Suppliers are ordinarily located near the buying firms factory and are
responsible for their quality.
1.10 Continual Improvement

ISO 9000:2005 defines continual improvement as:
Recurring activity to increase the ability to fulfil requirements.
The aim of continual improvement is to increase the probability of
enhancing the satisfaction of customers and other interested parties.
Customers needs are not static. They change continually. There is no
logical end to how and to what extent customers change their expectations
and to what competitors do to meet those expectations. A special
innovative product feature being considered as value for money today
might become too costly tomorrow.
For example, the customer who keeps on buying the components from a
particular automotive company expects that there must be continual
improvement in quality, performance, reliability and service from the
manufacturer; otherwise he might be attracted towards other
manufacturers who are better.
Actions for improvement include:
Analysing and evaluating the existing situation to identify areas for

improvement
Establishing the objectives for improvement
Searching for possible solutions to achieve the objectives
!17
Evaluating these solutions and making a selection
Implementing the selected solution
Measuring, verifying, analysing and evaluating results of the

implementation to determine that the objectives have been met
Formalising changes
The main focus of all our Quality actions must be on continual

improvement. This book will specially give you inputs about this aspect.
Elimination of all wastes and workplace improvement are parallel to the
idea of continual improvement, which will be discussed in detail in next
chapters.
Bad Housekeeping: Everything is in a Mess
!
Good Housekeeping
!18
A Place for Everything and Everything in its Place
!
Figure 1.1
1.11 Concept of Internal Customer

Kaoru Ishikawa was the rst quality guru to emphasize the importance of
the internal customer, the next person in the production process.
Whatever is said above about the external customer has to be practiced in
case of ALL internal customers also. Quality is not possible if internal
customers are not happy.
As mentioned earlier, Customer is defined as an organization or a person
that receives a product. Every function in an organization marketing,
!19
engineering, purchasing or production has an internal customer each

receives a product or service. Every person in a process is considered as a
customer of the preceding operation. Each workers goal is to ensure that
the quality of his operation meets the expectations of the next worker in
the process chain. Every employee throughout the organization is a part of
the chain of internal customers and suppliers.
Internal Customer/Supplier Relationships
Questions asked by people to their internal customers
1. What do you need from me?
2. What do you do with my output?
3. Are there any gaps between what you need and what you get?
Good teamwork and inter-departmental harmony is required. Also the
leaders role in supervising the internal customer-supplier chain is of very
big importance.
Case example:
In MICO Bosch an inspection operator No. 1 was not co-operating with his
next inspection operator No. 2. He did not inspect the components properly
and was pushing defectives to the next inspection operator. This resulted in
delays of the next operators work because the poka-yoke system which
was there on inspection workplace No. 2 did not accept the defectives.
Further, the operator No. 1 was frequently leaving the workplace and was
wasting time, which affected the next operators efficiency and incentive,
being fully dependent on the first operator. As an internal customer,
operator No. 2 was very must unsatisfied as well as angry. His output
quality was affected due to this problem, which was the matter of concern.
1.12 Quality and competitiveness

For a manufacturing firm to be competitive, its products and services must
be free from deficiencies and also should be acceptable to its customers.
For this, a manufacturing firm should excel in:
!20
1.
2.
3.
4.
5.
Quality of design
Quality capability of production processes
Quality of conformance
Quality of customer service
Organization Quality culture
To compete globally, it is necessary to produce goods of world-class quality

which means better goods better in performance, reliability, durability,
ease of use, serviceability, maintainability, availability, aesthetics, choices
or options for customers, better image but at reasonable, competitive
prices. So, the focus is on best cost and best quality by doing right the first
time, every time. This gives the competitive advantage.
For a country to succeed in global marketplace, it must export
manufactured goods. For this to happen, a manufacturer must be able to
outperform foreign competitors in terms of quality and productivity.
1.13 Quality is not a destination: It is a way of LIFE!

The importance of quality can be stated in the following statements:
1. No quality, no sales
2. No sales, no profit
3. No profit, no jobs
4. Quality and image are no accident: they are the result of focused hard
work and diligence.
5. Quality is not a destination: it is a way of life.
6. We strive for excellence and accept nothing less.
Seven Habits of Highly Effective People As per Stephen Covey
1.
2.
3.
4.
5.
6.
7.
Be pro-active
Begin with the end in mind
Put first things first
Think win-win
Seek first to understand, then to be understood
Synergy
Sharpen the saw
!21
Use of Quality Tools, e.g., Check Lists

Our life is becoming full of tensions and worries, most of them being as a
result of pending tasks. We have to get habituated to maintain:
1. Things to do
2. Tasks
3. Memos
This is because many times our memory fails miserably.
After making a list of things to do, you should prioritize them as per
urgency, seriousness, growing tendency of the problem. Relist them as per
geographical order so that in a single round you can finish all tasks without
backtracking and with minimum time.
You must finish at least three important tasks in a day. Before going to
bed, you must go through the list to see how many tasks could not be
completed.
This way, your tension will vanish in a weeks time and you will be able to
focus on Quality of your work in a better way.
Further, it is necessary to do systematic inspection and maintenance of our
equipments, machines, tools, documents etc. by sincerely maintaining:
!22
1. Daily check list

2. Weekly check list
3. Monthly check list
Use the 80/20 rule, which states that 80% of your accomplishments come
from only 20% of your efforts. So, devote more of your time to the
productive activities and reduce time spent on unproductive work. The
main idea is to do things on your schedule, rather than the schedules of
others. Avoid time wasters such as phone calls and meeting the people,
when you have to focus on your tasks.
!
Figure 1.2
Make every second count, by proper Time Management. You will be
astonished to know how the quality of your life gets enhanced and quality
of your work improves by these simple tools.
We must take an oath that:
1. Whatever we do, we will do it RIGHT the first time, every time.
!23
2. We shall strive for quality better than the set standards.

3. In our day to day life, we will identify ALL internal and external
customers and satisfy them.
Even some of our family members, friends and relatives could be our
internal customers. In the company, our workers and employees are our
internal customers. The internal and external customers delight is the goal
of our life: Customers perception of the degree to which the
customers requirements have been fulfilled and so we must know
what their requirements are and what their perception is. Keeping the word
of promise is also part of this. Maintaining good image, character,
truthfulness, punctuality, sincerity is also part of this.
1. In business, we shall strive to delight all of our customers by continually
improving design quality, process quality and workmanship. And
by continually improving delivery fulfillment and selling at competitive
prices.
2. We shall follow what Philip Crosby has taught us:
The system for causing quality is prevention.
The performance standard must be zero defects, not thats close
enough.
The measurement of quality is the price of non-conformance. When that
goes to zero, then quality is free.
3. Ethical way of conducting our business will be our policy.
4. We should ask, If Japan can, why cant we?
5. It has always been an unbearable thought to me that someone could
inspect one of my products and find it inferior in any way. For that
reason, I have constantly tried to produce products which withstand the
closest scrutiny products which prove themselves superior in every
respect.
Robert Bosch
!24
'If you want excellence, you must aim at perfection. I know that aiming at
perfection has its drawbacks. It makes you go into detail that you can
avoid. It takes a lot of energy out of you but that's the only way you finally
actually achieve excellence. So in that sense, being finicky is essential. A
company, which uses the name Tata, shares a tradition. The symbol 'T' has
to be a symbol of quality.'
J.R.D. Tata
1.14 Ultimate Solution: Education and Training

As is mentioned above, our humble request is that the subject Quality
should be included as a compulsory subject like science and mathematics
in the syllabi of all the standards of Primary and Secondary Education, then
in colleges also. Further, all the parents, employees and industrial workers
should be fully trained in this field.
!25
This is the ultimate solution to all the basic problems of our nation.
The quality of students entering Indian Institutes of Technology (IITs) has
deteriorated over the years due to the coaching classes that prepare
engineering aspirants.
The majority of the students fare poorly at jobs and global institutions of
higher education.
N.R. Narayana Murthy
1.15 Activities for the students

Activity A
1. Make a list of all the pending Things to do and prioritize them on the
scale of 1 to 10, for the following aspects:
Seriousness
Urgency
Growth of the concern (i.e., if the thing is not done today, the problem/
concern will increase tomorrow)
Activity B
1. Make a list of your internal customers as well as your external
customers. Write down in front of each customers name the score
about the following points on the scale of 1 to 10:
What is his perception about your product/service?

What is his perception about your behavior/character/truthfulness?
Is he happy (1 to 5 marks), delighted (6 to 9 marks) or thrilled (10
marks)?
How many customers have you lost in last year?
!26
Activity C
1. Write down the activities which you will perform in coming year by
doing it right, first time, every time.
Activity D
1. Make a list of time wasters in your life.
Activity E
1. Make a list of products or services which you have done till now with
your best ability and resulted into best quality.
1.16 Summary
Quality is not a destination: it is a way of LIFE!
Do it right, first time, every time
Take care of your external and internal customers
Improve your processes continually
The system for causing quality is prevention
!27
1.17 Self Assessment Questions

1. Explain various definitions of Quality.
2. Explain the concept of internal customer.
3. Why is a customer lost? Explain giving case examples.
4. What is the contribution of Deming and Juran? What inspiration do you
get from them?
5. Explain the term Quality is free by Philip Crosby.
6. Explain one of the definitions of TQM.
1.18 Multiple Choice Questions

1. An Organization or a person that receives a product is:
a.
b.
c.
d.
Security Inspector
Goods Inwards store
Manufacturing worker
Customer
2. Need or expectation that is stated, generally implied or obligatory is:

a.
b.
c.
d.
Purchase order
Requirement
Dream
Ambition
3. Joseph M. Juran defined Quality as:

a.
b.
c.
d.
Customer satisfaction
Value for money
Better than standards
Fitness for use
!28
4. Drive out fear is written by:

a.
b.
c.
d.
Juran
Deming
Shewhart
Feigenbaum
5. Quality circles were formalized by:

a.
b.
c.
d.
Deming
Shewhart
Ishikawa
Crosby
6. The foundation on which a successful TQM effort rests includes customer

focus, total participation and:
a.
b.
c.
d.
Inspection
Quality Planning
Documentation
!29
Transition from Chapter 1 to 2

So, my dear students, by reading the Chapter 1, you have made a
beginning of your picnic in Wonderland of Quality, havent you?
I hope that in this first chapter itself, you have already got an idea of what
the subject is like, and you have put forward your first step towards your
career in Quality life.
You have understood the meaning of quality, customer satisfaction,
reliability, effects of poor quality, benefits of good quality and cost of
quality.
You are now got acquainted with our quality gurus also.
You also know what is process approach.
All this was just the introduction to the subject. In the following chapters,
every aspect of TQM is described in more and more details, in order that
you get to know everything about TQM.
I have taken care that the language is easy to understand, so that you
really do not get bored and start getting interested and involved in the
subject and start thinking how you will make your business more and more
efficient and effective.
Let us now move to Chapter 2 which is nothing but extension of Chapter 1
with some more ideas.
!30
REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
Video Lecture - Part 1
!31
WONDERLAND OF QUALITY: CONTINUES
Chapter 2
Objectives
Vision and Mission Statements

Objectives, Goals and Targets
Quality Planning
Concept of Effectiveness as Well as Efficiency
Structure
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
2.10
Efficiency and Effectiveness

Why Should One Practice Quality Principles?
Vision and Mission Statements
Objectives, Goals and Targets Followed by Action Plans
Introduction to Quality Management System ISO 9000
Quality Planning
Summary
!32
2.1 Efficiency and Effectiveness

The manufacturer A has a very good system of marketing, design,
production, quality assurance, packing, delivery etc. He also has Just in
time system, and so he never fails in delivery schedules. He takes pride in
producing and selling his product, which is having a world-class quality. He
also exports the product.
The manufacturer B also has a similar system. His product also has
world-class quality, just in time system; everything is same as the first
manufacturer. However, there is a difference. He is very closely associated
with his customers, and makes exactly what his customers requirements
are. His quality, cost and delivery is always made in such a way that his
customer is always delighted. He makes changes in his design, processes
to suit to the changing needs of his customers. He gives world-class quality
to his customers, in time, and at a reasonable price.
Efficiency is all about how the manufacturer has performed in his
business: More output with less input resulting into more profitability. We
can say that the manufacturer A is efficient.
However, effectiveness is all about how the perception of the customer
is. We can say that the manufacturer B is effective. The customer is
delighted with him and so he is making better business than manufacturer
A.
We must be efficient, no doubt. That means, we must Do things right, the
first time, every time. However, that is not enough. We must also do right
things about our customer. He must be happy and there is no exception to
this rule.
Case Example:
In Lear Manufacturing Company, a customer had come for witness
inspection. He was sitting in an excellent meeting room with A.C. He
wanted tea without milk and without sugar. The case worker took his order
very politely, went back and came after a long time with coffee with milk
and sugar. The coffee also had become cold. You can imagine how the
customer must have felt. Small things, but important, arent they?
!33
There are many organizations which are very efficient, but are hardly
effective. Hence, they have a long list of lost customers.
Quality target is 100% and Not 99.9% because 99.9% quality will mean:
At least 160000 wrong prescriptions every year
More than 120000 new born babies accidently dropped by doctors each
year
Unsafe drinking water almost one hour every month
Two or three rail accidents every day!
There are three levels of quality implied quality, expected quality

and specified quality. It should be our effort to give implied quality to
customers internal as well as external on a continuous basis.
2.2 Why should one Practice Quality Principles?

Question of Remaining in the Business
If we do not practice quality principles, it is very difficult to compete with
the other manufacturers and survival itself is at threat. The market
situation in our country is continuously posing threat to many
organizations. This point happens to be a major driver due to which
industries are forced to practice quality principles.
Conclusion: Quality is a must for survival.
Competition
Earlier, one was able to produce the goods and services as he wanted and
was able to sell them in the market. Many monopolists were selling the
goods at exorbitant prices. The consumers had little choice but to buy
whatever was available to them.
However, in todays market, when the foreign companies are also selling
their goods at lower prices, every manufacturer is facing tough
competition. To be in market, one has to have something exclusive in his
product. He must know what exactly the customer requirements are, which
!34
are not getting fulfilled by the competitors. He must manufacture the

products tailor-made for the customer.
Conclusion: Quality is a must for competitive advantage.
Changing Needs of the Customers
The customers requirements are continuously undergoing a change. The
entrepreneur has to cater for them. The vast knowledge available for the
customers from the Internet makes them aware as to what they can
demand at lower prices. They also have so many options and alternatives.
If the manufacturer does not improve his performance, he would lose all
his existing customers, and would not get new orders also, because of loss
of reputation.
Greater Profitability
Practicing Quality Principles does improve the profitability, which is an
experience of many entrepreneurs, such as Motorola, Wipro, and Bosch
etc. This happens due to reduction in all kinds of wastes, increase in
productivity and workers morale and efficiency. One would like to
implement the Quality Principles in order to increase the profitability.
Self-motivation
This is also a driver for quality. One always wants to be number one in his
area of work and the quality principles will help him accomplish all his
goals.
2.3 Vision and Mission Statements

Vision Statement
This says what an organization should accomplish in a span of next five to
ten years. In order to always remain ahead of the competition and to
continue to be a world-class manufacturer, the entrepreneur must look into
the future; predict what is needed to be done, recognize the challenges of
the changing environment, understand the required inputs and resources,
and plan for it. Following qualities are necessary with the personnel who
make a good vision statement:
!
!35
1. Quick responsiveness
2. Creative approach
3. Innovativeness
4. Willingness to learn and unlearn
5. Pro-activeness
6. Team spirit
7. Open to the suggestions and ideas
8. Unique thinking
9. Enthusiastic
10.Progressive
Total involvement of the employees is a must for making the vision
statement because their contribution is necessary in making the vision a
reality. Brainstorming is a sure way of involving the employees in making
the vision statement.
The organizations need a vision statement to provide a direction for
making mission statements, department-wise objectives, and for each
objective, goals are identified and targets are fixed.
A sample Vision Statement is given below:
1. Customer comes first, and his delight is the first priority.
2. Our Company believes in manufacturing world class products which will
be tailor-made to satisfy every requirement of our customers including
quality, cost, delivery, reliability and safety.
3. Our company believes in continual improvement in our products and
services.
4. Aspirations of our employees are carefully monitored. They are the
internal customers having same priority as the external customers. We
shall thus create a team of committed and dynamic people.
5. By following the above principles, our vision is to become the world
leader in our products and services during next 5 to 10 years and create
a good corporate image of ethical business.
!36
Mission Statements
This is the next step after making the Vision Statement. Mission
statements are prepared to make the employees to get an idea as to how
to accomplish the Vision. These are actually the road maps to achieve the
vision.
Mission statements should clearly indicate the methods to be followed for
fulfilling the vision.
A sample Mission Statement is given below:
1. Constant interaction with the customers by direct meetings and
feedbacks, by the marketing and engineering teams.
2. Continual improvement in the designs to be in line with the changing
needs of the customers.
3. Continual improvement in design and processes to produce world class
innovative products.
4. To practice Just in time and six sigma methodologies to ensure quality,
cost and delivery targets.
5. Quarterly review of employee performance and their aspirations, and
also review of their ongoing problems and actions to solve those
problems.
6. Continuous Training for skill and management development.
7. Benchmarking techniques to always remain ahead of others.
Quality Policy
Top Management should ensure that the quality policy:
1. Is appropriate to the purpose of the organisation
2. Includes a commitment to comply with requirements and continually
improve the effectiveness of the quality management system
!37
3. Provides a framework for establishing and reviewing quality objectives

4. Is communicated and understood within the organisation
5. Is reviewed for continuing suitability
2.4 Objectives, Goals and Targets followed by Action Plans

After the Vision and Mission Statements are made, the individual
departments will start writing down their well-defined objectives in order to
realize the mission statements.
For example, the objectives of the engineering department could
be as follows:
1. Constant interaction with every customer
2. Design the product with latest know-how and technology in order to
satisfy all the customer requirements
3. Incorporate innovative ideas in the design and check the design with the
help of design failure mode and effects analysis before finalizing it.
The objectives of the purchasing, manufacturing and QA departments
could be as follows:
1. Just in time methodology to be implemented everywhere.
2. Processes to be controlled statistically and process capabilities to be
improved continually.
3. Customer complaints to be analyzed and continually reduced with a
target of zero complaints.
4. Workers participation, team work to be continually improved in order to
have better productivity and quality.
!38
Goals and Targets

In order to achieve the objectives, it is necessary for each and every
department to fix goals with time bound targets.
The goals should be SMART, i.e.:
S=
M=
A=
R=
T=
Specific
Measurable
Achievable
Realistic
Time bound
For example, the goals of the engineering department should be:

1. Customer requirement of reduction of temperature rise as per IS on an
induction motor:
a. Revised design to be ready by October 2013
b. Motor to be offered to the customer by 1st week December 2013.
2. Customer complaint of humming noise in the motor:
To be settled by improvement in design on his motor: by November

2013
3. New order for vertical motor: Customer Witness inspection to be
planned in 1st week September 2013.
The targets should be:
1. Temperature rise in medium size motors to be brought down by 10%
(Jan. 14).
2. Humming noise in all the small motors to be reduced completely (Nov.
13).
3. All the new orders design to be completed by end of July 2013.
Every target should accompany the detailed Action Plan:
!39
Goal and target: ________________________________

Serial
No.
Action
Action by
Due Date
Continuous monitoring and feedback is absolutely necessary to follow up

the progress of each and every action:
1.
2.
3.
4.
In order to achieve the goals and targets

In order to accomplish the objectives
The Mission
The Vision
2.5 Introduction to Quality Management System ISO 9000

The ISO 9000 family of standards is related to quality management
systems and designed to help organizations ensure that they meet the
needs of customers and other stakeholders.
To lead and operate an organization successfully, it is necessary to direct
and control it in a systematic and transparent manner. Success can result
from implementing and maintaining a management system that is
designed to continually improve performance while addressing the
needs of all interested parties (i.e., person or group having an interest in
the performance or success of an organization).
Managing an organization encompasses quality management amongst
other management disciplines.
The purpose of a management system:
!40
1. to ensure that an organization has a defined, consistent, managed

process to capture customer requirements including technical, price
and delivery requirements;
2. to convert those requirements into the appropriate deliverable
(product, service, etc.) through the use of a controlled, monitored and
reported process;
3. to ensure that the deliverable remained in conformance with the
customer's requirements until the contractual obligations of the
organization end; and to provide management with hard performance
data which can be used to prevent future product, system or process
failures, thereby driving continual improvement.
(a) The ISO 9000 family of standards listed below have been developed
to assist organizations, of all types and sizes, to implement and
operate effective quality management systems.
(b) ISO 9000 describes fundamentals of quality management systems
and specifies the terminology for quality management systems.
(c) ISO 9001 specifies requirements for a quality management system
where an organization needs to demonstrate its ability to provide
products that fulfill customer and applicable regulatory requirements
and aims to enhance customer satisfaction.
(d) ISO 9004 provides guidelines that consider both the effectiveness and
efficiency of the quality management system. The aim of this standard
is improvement of the performance of the organization and satisfaction
of customers and other interested parties.
(e) ISO 19011 provides guidance on auditing quality and environmental
management systems.
Together they form a coherent set of quality management system
standards facilitating mutual understanding in national and international
trade.
ISO 9000:2005 Quality Management Systems. Fundamentals and
Vocabulary" This International Standard describes fundamentals of
!41
quality management systems, which form the subject of the ISO 9000
family, and defines related terms.
Eight quality management principles have been identified that can be used
by top management in order to lead the organization towards improved
performance.
(a) Customer Focus
Organizations depend on their customers and therefore should

understand current and future customer needs, should meet customer
requirements and strive to exceed customer expectations.
(b) Leadership
Leaders establish unity of purpose and direction of the organization.

They should create and maintain the internal environment in which
people can become fully involved in achieving the organizations
objectives.
(c) Involvement of People
People at all levels are the essence of an organization and their full
involvement enables their abilities to be used for the organizations
benefit.
(d) Process Approach
A desired result is achieved more efficiently when activities and related

resources are managed as a process.
(e) System Approach to Management
To identify, understand and manage interrelated processes as a system

contributes to the organizations effectiveness and efficiency in
achieving its objectives.
!42
(f) Continual Improvement
Continual improvement of the organizations overall performance

should be a permanent objective of the organization.
(g) Factual Approach to Decision Making
Effective decisions are based on the analysis of data and information.

(h) Mutually Beneficial Supplier Relationships
An organization and its suppliers are interdependent and a mutually

beneficial relationship enhances the ability of both to create value.
These eight quality management principles form the basis for the
quality management system standards within the ISO 9000 family.
In ISO 9000:2005, various terms and definitions are given. Some
important definitions are as follows:
1. Quality is defined as degree to which a set of inherent characteristics
fulfils requirements.
(a) Characteristics = A distinguishing feature.
(b) Requirements = Need or expectation that is stated, generally
2. Quality Planning is defined as part of quality management focused
on setting quality objectives and specifying necessary operational
processes and related resources to fulfill the quality objectives.
Establishing quality plans can be part of quality planning.
(a) Quality management = Coordinated activities to direct and
control an organization with regard to Quality.
(b) Quality objective = Something sought, or aimed for, related to
quality.
!43
(c) Process = Set of interrelated or interacting activities which

transform inputs into outputs.
(d) Quality plan = Document specifying which procedures (specified
way to carry out an activity or a process) and associated resources
shall be applied by whom and when to a specific project, product,
process or contract.
ISO 9001:2008 Quality Management Systems Requirements is a
document of approximately thirty pages which is available from the
national standards organization in each country.
This international standard specifies requirements for a Quality
Management System where an organization needs to demonstrate its
ability to consistently provide product that meets customer and applicable
regulatory requirements and aims to enhance customer satisfaction
through the effective application of the system, including processes for
continual improvement of the system and the assurance of conformity to
customer and applicable regulatory requirements.
ISO 9001:2008 basically re-narrates ISO 9001:2000. The 2008 version
only introduced clarifications to the existing requirements of ISO
9001:2000 and some changes intended to improve consistency with ISO
14001:2004. There were no new requirements. For example, in ISO
9001:2008, a quality management system being upgraded just needs to be
checked to see if it is following the clarifications introduced in the amended
version.
These standards have been frequently referred to in next chapters. The
further details about these standards are available in Chapter 14.
ISO 9000 certification is only the beginning of a continuous improvement
process rather than the end and could be a useful stepping stone for
TQM. ISO 9000 can be an excellent start to TQM, if it is interpreted in a
way that encourages the company to start on the process of continual
improvement by team work of all people working in the company.
!44
2.6 Quality Planning

Management should take responsibility for the quality planning of the
organization. This planning should focus on defining the processes needed
to meet the organization Quality objectives and requirements consistent
with the strategy of the organization.
Inputs for the effective and efficient planning include:
1.
2.
3.
4.
5.
6.
Defined organizational objectives

Defined needs and expectations of the customers
Evaluation of the statutory and regulatory requirements
Lessons learned from previous experience
Indicated opportunities for improvement
Related risk assessment and mitigation data
Advanced Product Quality Planning
!
Product Quality Planning Timing Chart
!45
!
Figure 2.1
The type of product, complexity and customer expectations should be
considered in selecting the timing elements that must be planned and
charted. All team members should agree with each event, action and
timing. A well organized timing chart should list tasks, assignments and
events. The Critical Path Method as follows is appropriate for this.
In 1950, W. Edwards Deming, who got inspired from Shewhart, taught SPC
and SQC to Japanese engineers and CEOs. PLAN-DO-CHECK-ACT cycle
was made popular by him.
The success of any program depends on meeting customer needs and
expectations in a timely manner at a cost that represents value. The
Product Quality Planning cycle based on above mentioned PDCA
methodology and the chart above require a planning team to concentrate
its efforts on defect prevention, which is driven by simultaneous
engineering performed by product and manufacturing engineering activities
working concurrently.
!46
!
Following are the details of various stages of Product Quality Planning
Timing Chart
Plan and Define Program:
Inputs
Outputs
Voice of the customer
Design goals
Business plan/marketing strategy
Reliability/quality goals
Product/process benchmarking data
Preliminary bill of materials
Product/process assumptions
Preliminary process flow chart
Product reliability studies
Special characteristics
Customer inputs
Product assurance plan/management

support
Product Design and Development:
!47
Inputs
Outputs
Design goals
Design FMEA
Reliability/quality goals
Design for manufacturability and

assembly
Preliminary bill of materials
Design verification
Preliminary process flow chart
Design reviews
Prototype build-control plan
Product assurance plan/management

support
Engineering Drawings and

specifications
Process Design and Development:

Inputs
Outputs
Design FMEA
Packaging standards
Design for manufacturability and

assembly
Product/process quality system review
Design verification
Process flow chart
Design reviews
Floor plan layout
Prototype build-control plan
Characteristics matrix
Engineering Drawings and

specifications
Process FMEA
Material specifications
Pre-launch control plan
New equipment, tooling and facilities

requirements
Process instructions
Measurement systems analysis plan
Gages/testing equipment requirements Preliminary process capability studies

plan
Team feasibility commitment
Packaging specifications
!48
Product and Process Validation:

Inputs
Outputs
Packaging standards
Production trial run
Product/process quality system review
Measurement systems evaluation
Process flow chart
Preliminary process capability study
Floor plan layout
Production part approval
Characteristics matrix
Production validation testing
Process FMEA
Packaging evaluation
Pre-launch control plan
Production control plan
Process instructions
Quality planning sign off
Measurement systems analysis plan
Management support
Preliminary process capability studies

plan
Packaging specifications
Feedback, Assessment and Corrective Action:

Inputs
Outputs
Production trial run
Reduced variation
Measurement systems evaluation
Preliminary process capability study
Delivery and service
Production part approval

Production validation testing
Packaging evaluation
Production control plan
Quality planning sign off
!49
Special Characteristics
During the advanced product quality planning process, and particularly
during the preparation of FMEAs and control plans, the planning team shall
finalize special characteristics.
Appropriate process controls shall be established for all special
characteristics.
Quality Plan/Control Plan
Quality plan = Document specifying which procedures (specified way to
carry out an activity or a process) and associated resources shall be
applied by whom and when to a specific project, product, process or
contract.
Control Plan No.
Key Contact/Phone No.
Part No.
Core team
Part Name
Supplier approval date
Supplier/plant
Part
Proce
ss
numb
er
Proce
ss
descri
pti-on
Mach
-ine,
tools
Date
Customer engineering
approval/date
Customer quality approval/
date
Other approval
Chara
cterist
ics
numb
er
Chara
cterist
ics
produ
ct
Chara
cterist
ics
proce
ss
Speci
al
chara
cteristics
Other approval
Produ
ct/
proce
ss
specifi
cation
Evalu
ation/
meas
ureme
nt
techni
que
Sampl
e size
Sampl
e
Frequ
ency
Contr
ol
metho
d
Reacti
on
plan
!50
2.7 Activities for the Students

Activity A
You are going to start a business of manufacturing of fast moving
consumer goods.
Initially it will be a Private Limited Company with three of your friends, with
your own investment of ` 15,00,000 each, in addition to a loan from a
bank. You already have a site in Nasik.
You also have a person having experience in the field. You also know a
person who is expert in finance and commercial matters.
1. Make a vision and mission statement for your business.
.
.
Activity B
1. Make a process flow chart for manufacture of any vehicle spare part
about which you have some knowledge and information.
.
.
2.8 Summary
1. To be efficient as well as effective, we must do right things in a right
way, the first time, and every time.
2. It is a mere must to improve quality in education.
!51
3. It is a need of the day to impart education on quality principles to one

and all.
4. Every business must make a vision statement, a mission statement,
quality policy, department-wise objectives, goals with time bound
targets followed by action plans, and a periodical follow-up of the action
plans to monitor fulfillment of the vision.
5. One must fully understand the eight quality principles.
6. Understanding the quality planning methodology is the first step
towards TQM.

1. Explain whether you are efficient or effective or both in preparing your
Project given by the College/Institute, and how.
2. Explain the quality in education in the high school/college which you
have attended. Rate it on the scale of 1-10.
3. What will be the syllabus which you will make for education on quality in
your business organization?
4. Explain SWOT analysis done by you for yourself.
!52

1. As per Quality Management Principles given in ISO 9000:2005, an
organization and its suppliers are interdependent and a mutually
beneficial relationship enhances the ability of both to create
____________.
a.
b.
c.
d.
Image
Value
Pleasure
Delight
2. As per Quality Management Principles given in ISO 9000:2005, effective

decisions are based on the analysis of ____________.
a.
b.
c.
d.
Experience
Team opinion
Benchmarking
Data and information
3. Requirement is defined as ____________ that is stated, generally

a.
b.
c.
d.
Need or Expectation
Wish
Order
Demand
4. Top Management should ensure that the quality policy is:

a.
b.
c.
d.
Distributed and displayed throughout the organization

Descriptive and known in the organization
Printed and published
Communicated and understood within the organization
5. The organizations goals should be:

a.
b.
c.
d.
Clear
SMART
Objective
Achievable
!
!53
6. In a restaurant, tea is normally prepared by putting 2 spoons of sugar

and one teaspoon of tea powder. The customer likes the tea very much.
If the restaurant prepares equally good tea with 1.5 spoons of sugar
and 0.5 spoon of better quality but cheaper tea powder and customer
likes the tea equally well, this improvement is called the restaurants:
a.
b.
c.
d.
Effectiveness
Efficiency
Profitability
Business tactics
7. A customer has been buying all the required products from LG. Over last
ten years, he has purchased many products such as fridge, TV etc. from
LG. Every time he buys the product, he finds some innovation in it, and
he is thrilled to buy the product. This is ____________ of LG.
a.
b.
c.
d.
Efficiency
Effectiveness
Profitability
Policy
8. In a classroom, teacher-student teams are the equivalent of industrys

front-line workers. The product of their successful work together is the
development of the students capabilities, interests, and character. In
one sense, the student is the teachers ____________.
a.
b.
c.
d.
Property
Disciple
Customer
Supplier
!54

Your picnic in wonderland of quality is now becoming more and more value
adding, isnt it?
The idea of education in Quality as a prime subject in schools and colleges
is of very high significance. Please think seriously about it.
Also the deteriorating level of quality in schools and colleges is really
worrying. Youngsters like you can bring about a drastic change in the
situation.
In future, many of you will become entrepreneurs. The Chapter 2 gives
valuable ideas such as vision and missions statements, goals, targets,
quality planning etc. for new entrepreneurs to practice.
In the Chapter 3, your travel really enters into the TQM methodology, and
then onwards, you get totally engrossed in the subject.
Let me see whether this journey becomes more beneficial to you or not.
You will see that many topics are either repeated or explained differently,
the reason for this is that you get more clarification about the topic and
your queries in the mind get answered better.
Let us now move to Chapter 3.
!55
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
!56
TOTAL QUALITY MANAGEMENT PHILOSOPHY
Chapter 3
TOTAL QUALITY MANAGEMENT
PHILOSOPHY
Objectives
Meaning and Definitions of TQM

Benefits and Principles of TQM Program
Structure
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
Definitions and Concepts of TQM

What TQM
Benefits of TQM Program
Total Quality Management Principles
Summary
!57
3.1 Definitions and Concepts of TQM

1. Total Quality Management is a philosophy that involves everyone in
an organization in a continual effort to improve quality and achieve
customer satisfaction.
2. TQM is the integration of all functions and processes within an
organization in order to achieve continuous improvement of the quality
of goods and services. The goal is customer satisfaction.
3. Total Quality Management (TQM) are sweeping culture change
efforts to position a company for greater customer satisfaction,
profitability and competitiveness.
4. TQM may be defined as managing the entire organization so that it
excels on all dimensions of products and services that are important to
the customer.
5. Total Quality Is
(a)
(b)
(c)
(d)
(e)
(f)
Meeting Our Customers Requirements

Doing Things Right the First Time
Freedom from Failure (Defects)
Consistency (Reduction in Variation)
Quality in Everything We Do
6. The salient features of TQM approach are:

(a) Find out what the internal and external customers want.
(b) Design a product or service that will meet or exceed what the
customers want.
(c) Design a production process that facilitates doing right, the first
time, every time.
(d) Keep track of the result and use these results to improve the
system continually.
(e) Extend these concepts to suppliers.
!58
7. TQM stresses on three principles:

(a) Customer satisfaction
(b) Employee involvement
(c) Continuous improvements in quality and processes
8. Eight essentials of the TQM focus
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
Leadership
Quality policy
Organizational structure
Employee involvement
Quality cost
Supplier selection and development
Recognition and reward
9. Seven important points about TQM:

(a)
(b)
(c)
(d)
(e)
(f)
(g)
Strive for quality in all the things

The customer is the criterion of quality
Improve the process or system by which products are produced
Quality improvement is continuous, neverending activity
Worker involvement is essential
Ground decisions and actions in knowledge
Encourage team work and cooperation
We are people, not rabbits or alligators

Silence means non-involvement
This is a CAN DO Group
Uniqueness is an opportunity for creativity
We are all learners, responsible for own learning, which is an interactive
process
Everyone is committed to learn how to implement TQM
Show me is a healthy attitude
Implementing TQM should be a fun
!59
Eight Rules of Conduct:

1.
2.
3.
4.
5.
6.
7.
8.
Keep an open mind

Share responsibility
Respect each person and listen to him emphatically
Speak what you feel
Do not criticize ideas and people
Ask questions and participate
Utilize time well
Check the process from time to time
3.2 What TQM

The concept of quality control as a distinct discipline emerged in the US in
the 1920s. At that time, quality control was intended to simply control or
limit the creation of defectives in industrial processes. The earliest idea of
Quality Control was to inspect the output of manufacturing process and
sort the defective items from the good ones. However, even after 100%
sorting out, some defectives were escaping into the good items and
reaching the customer. Particularly when the process produced large
number of defectives, 100% sorting was found to be of no use in
preventing the escaping defectives into the lot of good components.
Shewhart (1920s-1940s) recognized the need to separate variation into
assignable and unassignable causes. He was founder of the control chart.
He was originator of the PDCA cycle. He was perhaps the first to integrate
statistics, engineering and economics.
Deming (Post world war through 1980s) was well known for helping
Japanese companies to apply Shewharts Statistical Process Control. His
main contribution was his 14 points to quality.
Demings 14 Points Explained in More Detail
Deming offered fourteen key principles to managers for transforming
business effectiveness. The points were first presented in his book Out of
the Crisis. It is credited with launching the Total Quality
Management movement.
!60
1. Create constancy of purpose toward improvement of product and

service, with the aim to become competitive, stay in business and
to provide jobs.
2. Adopt the new philosophy. We are in a new economic age. Western
management must awaken to the challenge, must learn their
responsibilities, and take on leadership for change.
3. Cease dependence on inspection to achieve quality. Eliminate the
need for massive inspection by building quality into the product in
the first place.
4. End the practice of awarding business on the basis of a price tag.
Instead, minimize total cost. Move towards a single supplier for any
one item, on a long-term relationship of loyalty and trust.
5. Improve constantly and forever the system of production and
service, to improve quality and productivity, and thus constantly
decrease costs.
6. Institute training on the job.
7. Institute leadership. The aim of supervision should be to help people
and machines and gadgets do a better job. Supervision of management
is in need of overhaul, as well as supervision of production workers.
8. Drive out fear, so that everyone may work effectively for the company.
9. Break down barriers between departments. People in research, design,
sales, and production must work as a team, in order to foresee
problems of production and usage that may be encountered with the
product or service.
10.Eliminate slogans, exhortations, and targets for the workforce
asking for zero defects and new levels of productivity. Such
exhortations only create adversarial relationships, as the bulk of
the causes of low quality and low productivity belong to the
system and thus lie beyond the power of the workforce.
!61
11. (a) Eliminate work standards (quotas) on the factory floor. Substitute
with leadership. (b) Eliminate management by objective. Eliminate
management by numbers and numerical goals. Instead substitute with
leadership.
12.(a) Remove barriers that rob the hourly worker of his right to pride of
workmanship. The responsibility of supervisors must be changed from
sheer numbers to quality. (b) Remove barriers that rob people in
management and in engineering of their right to pride of workmanship.
This means, inter alia, abolishment of the annual or merit rating and of
management by objectives.
13.Institute a vigorous program of education and self-improvement.
14.Put everybody in the company to work to accomplish the
transformation. The transformation is everybody's job.
"Massive training is required to instill the courage to break with
tradition. Every activity and every job is a part of the process.
Seven Deadly Diseases Described by Deming:
The "Seven Deadly Diseases" include:
1. Lack of constancy of purpose
2. Emphasis on short-term profits
3. Evaluation by performance, merit rating, or annual review of
performance
4. Mobility of management
5. Running a company on visible figures alone
6. Excessive medical costs
7. Excessive costs of warranty, fueled by lawyers who work for
contingency fees
!62
The Deming Chain Reaction
!
Japanese saw this as a natural approach to preventing waste, maximizing
productivity. They listened more attentively when Deming advised them on
methods of preventing the manufacture of defectives. Japanese dominated
almost every market they chose to enter. Superior quality became a
common theme of Japanese market dominance. Much of the Japanese
quality superiority occurred as a result of statistical manufacturing methods
and other management philosophies, now recognized as Total Quality
Management.
!63
Demings message had fallen on deaf ears in US. While Japan continued its
quality revolution in the years following World War II, SPC methods were
not widely pursued in US. Later on the US also recognized that
management philosophies should be applied to the quality improvement
challenge. This blending of additional management philosophies, all
targeting quality improvement, became known as Total Quality Concept.
Joseph M. Juran (Post World War Through 1980s)
He is also known for helping to improve Japanese quality. He directed most
of his work at the executive level and field of quality management.
When he began his career in the 1920s, the principal focus in quality
management was on the quality of the end, or finished, product. The tools
used were from the Bell system of acceptance sampling, inspection plans,
and control charts. The ideas of Frederick Winslow Taylor dominated.
Juran is widely credited for adding the human dimension to quality
management. He pushed for the education and training of managers.
For Juran, human relations problems were the ones to isolate. Resistance
to changeor, in his terms, cultural resistancewas the root cause of
quality issues.
Juran's vision of quality management extended well outside the walls of the
factory to encompass non-manufacturing processes, especially those that
might be thought of as service related.
For example, in an interview published in 1997 he observed:
1. The key issues facing managers in sales are no different than those
faced by managers in other disciplines.
2. Sales managers say they face problems such as "It takes us too
long...we need to reduce the error rate." They want to know, "How do
customers perceive us?"
3. These issues are no different than those facing managers trying to
improve in other fields. The systematic approaches to improvement are
identical.
!64
4. There should be no reason our familiar principles of quality and process

engineering would not work in the sales process.
The Juran Trilogy
He developed the Juran Trilogy as follows:
1. Quality Planning
2. Qulaity control
3. Quality improvement
Juran was one of the first to think about the cost of poor quality. This was
illustrated by his "Juran trilogy", an approach to cross-functional
management, which is composed of three managerial processes: quality
planning, quality control and quality improvement.
Without change, there will be a constant waste, during change there will be
increased costs, but after the improvement, margins will be higher and the
increased costs get recouped.
Philip Crosby (1980s)
He defined four absolutes of quality:
1.
2.
3.
4.
Quality is defined by conformance to requirements

System for causing quality is prevention and not appraisal
Performance standard is zero defects; not close enough
Measurement of quality is the cost of non-conformance.
Armand Vallin Feigenbaum (born 1922)
!
!
!65
He is an American quality control expert and businessman. He devised the

concept of Total Quality Control, later known as Total Quality
Management (TQM).
He was Director of Manufacturing Operations at General
Electric (1958-1968), and is now President and CEO of General Systems
Company of Pittsfield, Massachusetts, an engineering firm that designs and
installs operational systems. Feigenbaum wrote several books and served
as President of the American Society for Quality (1961-1963).
His contributions to the quality body of knowledge include:
1. "Total quality control is an effective system for integrating the quality
development, quality maintenance, and quality improvement efforts of
the various groups in an organization so as to enable production and
service at the most economical levels which allow full customer
satisfaction.
2. The concept of a "hidden" plant the idea that so much extra work is
performed in correcting mistakes that there is effectively a hidden plant
within any factory.
3. Accountability for quality: Because quality is everybody's job, it
may become nobody's job the idea that quality must be actively
managed and have visibility at the highest levels of management.
4. The concept of quality costs
(a) In process improvement efforts, quality costs or cost of quality is a
means to quantify the total cost of quality-related efforts and
deficiencies. It was first described by Armand V. Feigenbaum in a
1956 Harvard Business Review article.
(b) Prior to its introduction, the general perception was that higher
quality requires higher costs, either by buying better materials or
machines or by hiring more labor.
(c) Furthermore, while cost accounting had evolved to categorize
financial transactions into revenues, expenses, and changes in
shareholder equity, it had not attempted to categorize costs
!66
relevant to quality, which is especially important, given that most

people involved in manufacturing never set hands on the product.
(d) By classifying quality-related entries from a company's
general ledger, management and quality practitioners can evaluate
investments in quality based on cost improvement and profit
enhancement.
(e) Armand V. Feigenbaum stressed a systems approach to quality.
Costs of quality may be separated into costs for prevention,
appraisal, and failures ( internal scrap-repair and warranty
costs).
Kaoru Ishikawa (Post World War Through 1980s)
!
1. Developed concept of true and substitute quality characteristics:
True characteristics are the customers view; substitute characteristics
are the producers view. Degree of match between them ultimately
determines customer satisfaction.
2. Advocated use of seven tools.
3. Advanced the use of Quality circles.
4. Quality first: not short-term profits.
5. Developed cause-and-effect diagrams.
6. Advocated concept of internal customer.
7. Cross-functional management.
8. Use facts and data to make presentations.
!67
Genichi Taguchi (1960s-1980s)

Taguchi has made a very influential contribution to industrial statistics. Key
elements of his quality philosophy include the following:
!
1. Taguchi loss function, used to measure financial loss to society resulting
from poor quality;
2. The philosophy of off-line quality control, designing products and
processes so that they are insensitive ("robust") to parameters outside
the design engineer's control; and
3. Innovations in the statistical design of experiments, notably the use of
an outer array for factors that are uncontrollable in real life, but are
systematically varied in the experiment.
Shigeo Shingo ( Post World War Through 1980s)
!68
The relevance of his contribution is substantially confirmed by the opinions

of his contemporaries. Many saw him even as a contributor to the
fundamental concepts of Toyota Production System, such as Just in time,
and the pull production system, which were created by Toyota and
Mr.Taiichi Ohno and still remain a strong logical and practical basis for the
lean production and lean thinking management approaches. The myth
prevails that Shingo invented the Toyota Production System but what can
be stated is that he did document the system. Thanks to his charisma we
owe to Shingo the merit of having contributed to the formalization of some
aspects of the management philosophy known as Toyota Production
System (TPS), developed and applied in Japan since the 1950s and later
implemented in a huge number of companies in the world.
What cannot be denied is that he added two words to the Japanese
and English languages: Poka-yoke (mistake-proofing, not 'fool-proofing',
which Shingo rejected as a term) and Single-Minute Exchange of
Die (SMED).
In 1988, the Jon M. Huntsman School of Business at Utah State
University recognized Dr. Shingo for his lifetime accomplishments and
created the Shingo Prize that recognizes world-class, lean organizations
and operational excellence.
The theorist of important innovations related to Industrial engineering,
such as Poka-yoke and the Zero Quality Control, Shingo could influence
fields other than manufacturing. For example, his concepts of SMED,
mistake-proofing, and "zero quality control" (eliminating the need for
inspection of results) have all been applied in the sales process
engineering.
Shingo is the author of several books including: A Study of the Toyota
Production System; Revolution in Manufacturing: The SMED System; Zero
Quality Control: Source Inspection and the Poka-yoke System; The Sayings
of Shigeo Shingo: Key Strategies for Plant Improvement; Non-stock
Production: The Shingo System for Continuous Improvement and The
Shingo Production Management System: Improving Process Functions.
The quality concept developed under the guidance and teachings of
Feigenbaum, Deming, Juran, Crosby etc. All of them contributed to what
has become known as Total Quality Management.
!69
The Quality Hierarchy

1. Inspection: Inspect products.
(a) It is not enough simply to inspect the products for defects. One
cannot inspect quality, one must build it in.
2. Quality Control: Operational techniques to make inspection more
efficient and to reduce the cost of quality.
(a) The quality planner determines which attributes are important to
customer satisfaction and which are not, e.g., attractive appearance
and long service life.
(b) A method must be devised to test and measure quality for each of
the product attributes, e.g., visual inspection.
(c) The quality planner should set standards, e.g., tolerances or
minimum and maximum acceptable limits, or limit samples.
(d) A testing program should be established.
(e) Upon discovering the defects, the team should find the underlying
causes and correct them.
(f) Causes of poor quality should include defective raw materials, lack
of training, unclear procedures, a faulty machine etc.
3. Quality Assurance: Planned and systematic actions to ensure that
products and services perform to company requirements, e.g.,
Reliability analysis.
(a)
(b)
(c)
(d)
(e)
(f)
(g)
Prevent error from occurring in first place

Designing products and internal procedures that are foolproof
Working with suppliers to prevent errors
Training employees before problems occur
Perform preventive maintenance of machines and equipments.
When errors occur, correct them immediately
Poka-yoke approach: If error cannot be detected, it should be made
easy to detect.
!70
4. Total Quality Management: Incorporate QC/QA activities into a

company wide system aimed at satisfying the customer (involves all
organizational functions) with continual improvement in processes.
The Emergence of TQM
Statistical methods applied to
manufacturing
1920s-1940s Walter Shewhart
Increased emphasis on process 1940s

improvement
W. Edwards Deming
Japan emerges as a quality

leader
1950s
Deming assists Mac Arthur in

Japan
Japan emerges as a world

quality leader
1960s-1970s
Demings 14 point quality

program
Kaoru Ishikawa
Genichi Taguchi
Total Quality control emerges

in US
1970s
Deming
Jurans quality costs
Feigebaum
Zero defects movement in US
1980s
Phil Crosby
Shigeo Shingo
TQM as understood in todays

business
1980spresent time
Ultimate goal to create

customer delight in each
activity
TQM is a management philosophy which seeks to integrate all

organizational functions, viz., marketing, finance, design, engineering,
production, customer service etc. to focus on meeting customer needs and
organizational objectives. It views organization as collection of processes.
It maintains that organizations must continuously improve these processes
by incorporating the knowledge and experience of workers.
Once Upon a Time
The organizations believed that following actions would improve the quality
of their products:
!71
1. 100% inspection: 200% inspection in some cases

2. Tightening up the standards, reducing the tolerance limits
3. Employing more inspectors
4. Stopping production lines and create havoc because of some defect
found in the supplied lot
5. Correction, repairs
6. Checking random sample from a lot and if found defective, hold the
production flow.
Traditionally, quality has been regarded as responsibility of Q.C.
department. We have seen that the Q.C. people stopped the lines and
becoming heroes, because production and other persons were wasting time
to request them not to hold the lines.
If the produced units have high amount of defectives, 100% or more
inspection also cannot guarantee 100% good units in the inspected OK
lots. The defectives will slip quietly into these so-called OK lots and
consumers will find them while using them. So, to inspect 100%-200% or
random, to stop the lines, to create havoc are all outdated things. No one
can guarantee good quality by these methods.
Quality Management
Is far more than this. It requires a comprehensive approach from all the
departments of the organizations. Consumers now place a higher value on
quality than on loyalty to their producers. Hence, if they find defectives in
their parts received from the producer, there is a high possibility that the
consumer may not buy the parts from the producer again: result is the lost
customer. Actually, price is no longer a major determining factor in
consumer choice, on the other hand consumers need defect free goods,
satisfying all their needs and requirements.
Total Quality Management is an approach to improving the effectiveness
and flexibility of the business as a whole. It is essentially the way of
!72
organizing and involving the whole organization: every department, every

activity, and every individual at every level.
When we analyze the time management in the working life, we find that a
large part of the time is spent on useless activities such as:
1.
2.
3.
4.
5.
6.
Speaking on phone/mobile: attending non-value-added calls

Finding out files/documents
Policing and investigating others mistakes
Reworking and rectifying
Saying sorry to customers for delays and poor quality
Meeting unnecessary people, mainly time wasters
TQM is a method for reducing wasted efforts by involving everyone

in the process of improvement: i.e., improving the effectiveness of work
so that the results are achieved in less time. The methods and techniques
used in TQM can be applied throughout the organization. TQM needs to
gain ground and become a way of life in the organizations.
Quality, the way it is defined, gives people in different functions of an
organization a common language for improvement. It enables all the
people with different abilities and priorities to communicate readily with
one another in pursuit of a common goal.
3.3 Benefits of TQM Program

To the Customer
1.
2.
3.
4.
5.
6.
7.
Greater satisfaction
Cost effectiveness
Timely delivery
No major problems with the products/services
Continually improved product/service from time to time
Better customer care/treatment by the producer
Customers business becomes competitive
To the Producer
1. Better profitability
2. Better productivity and quality
!73
3. Satisfied customers spread word-of-mouth resulting in flourishing of

business
4. Motivated and happy employees
5. Problems are solved faster and better
6. Good brand image
To the Employees
1.
2.
3.
4.
Empowerment
Recognition
Motivation
Career enhancement
3.4 Total Quality Management Principles

1. Delight the Customer
(a) This focuses on external customers as well as internal customers
and asks: How to delight them? This implies a real need to
understand the product and service: agree requirements and fulfill
them. Delight mean being best at what really matters most to the
customer, which can change over time. Being in touch with
these changes and always satisfying the customer are an integral
part of TQM.
2. Management by Facts
(a) Knowing the current quality standards of the product or service in
your customers hands is the first stage of improvement.
(b) Having the facts necessary to manage the business at all levels, and
giving that information to everyone so that the decisions are
based on facts are an essential aspect of TQM.
3. People Based Management
(a) If people understand what to do, how to do it and get a feedback on
their performance, and are rewarded for good performance; they
will take responsibility for quality of their own work.
!74
(b) The more people feel involved, the greater will be their commitment
to quality and customer satisfaction.
(c) Role of people is extremely important; systems, standards and
technology will work better if people play their roles effectively and
efficiently.
4. Continuous Improvement
(a) TQM is not a program or a project for short time duration, which will
finish when a target is achieved.
(b) It is a management process that understands that as we improve,
our competitors also continue to improve.
(c) Customers will continue to expect more from us.
(d) Hence, continual improvement should be the aim of all the team
members, as a foundation of TQM.
For Accomplishing the Above Principles
The following points must be understood:
1. It is necessary to achieve successful internal working relations in order
to satisfy external customers.
2. A process is a combination of methods, materials, manpower and
machines. All processes contain inherent variability. Our approach must
be to progressively reduce variation thus improving process capability
and become more consistent.
3. We must measure everything how we are doing at present. What are
METRICS?
a.
b.
c.
d.
e.
f.
g.
Measure
Everything
That
Results
In
Customer
Satisfaction
!
!75
4. Internal quality measurement might include:

a.
b.
c.
d.
e.
Breach of promise
Customer complaints
Accidents
Internal scrap/repair
Time lost due to non-availability of raw material, absenteeism,
machine breakdowns
f. Cost of quality
g. Delayed delivery
5. Teamwork can provide a real opportunity for people to work together
to achieve quality improvement. Bringing people together in teams with
the common goal of quality improvement aids communication between
departmental and functional activities. Teamwork slowly breaks down
the communication barriers and acts as a platform for change.
Communication is an important two-way process. It must be
strengthened.
6. Teamwork enables a group of people to work as a task force, solving
cross-functional problems.
7. Prevention of defects is necessary to ensure that failures will not
occur. Failure Mode and Effects Analysis is one of the very effective
methods for prevention of defects in design as well as process/system.
When TQM is implemented in an organization, it invariably starts
with:
1. Setting up of TEAMs to solve particular problems.
2. Culture change on a desire to satisfy the customer and eliminate
existing problems permanently.
3. Education and training for knowledge on how to solve the problems.
4. Understanding that in TQM, all work is a process.
!76
5. Problem solving process, a continuous cycle of opening our mind to a

wide range of possible solutions and then deciding on the most feasible
option.
6. Problem solving, the basic role of which is quality improvement, to help
meet customer requirements.

Activity A
1. Visit a Local Maruti Suzuki Service Center/dealer. There will be so many
customers who have given their vehicle for warranty repairs/free
servicing. Interview a few customers to find out their perception about
the company, product and service. Tabulate the results.
.
Activity B
1. Visit a Local automotive manufacturers factory. Do not enter the
factory. Interview from outside a few employees/workers coming out
after their shift and find out their level of satisfaction about the
companys treatment to them, motivation level etc. Tabulate the results.
3.6 Summary
1. Total Quality Management is a philosophy that involves everyone in
an organization in a continual effort to improve quality and achieve
customer satisfaction.
2. Total Quality Is
!
!77
(a) Meeting Our Customers Requirements consistently

(b) Doing Things Right the First Time
(c) Freedom from Failure (Defects)
(d) Consistency (Reduction in Variation)
(e) Continuous Improvement
(f) Quality in Everything We Do
(g) Find out what the internal and external customers want
(h) Design a product or service that will meet or exceed what the
customers want
(i) Design a production process that facilitates doing right, the first
time, every time
(j) Keep track of the result and use these results to improve the system
continually
(k) Extend these concepts to suppliers

1. Explain Silence means non-involvement.
2. How good are you in Respect each person and listen to him
emphatically.
3. Explain what you understood by one of the Demings 14 principles
Eliminate slogans, exhortations, and targets for the workforce?
!78

1. He was originator of the PDCA cycle.
a.
b.
c.
d.
Deming
Shewhart
Juran
Ishikawa
2. One of the Demings 14 points: Drive out

a.
b.
c.
d.
Vehicle
People
Finished goods
Fear
3. Juran developed the Juran Trilogy as follows:

a.
b.
c.
d.
Quality Planning
Quality control
Quality improvement
All of the above
4. Deming (Post world war through 1980s) was well known for helping
_________ companies.
a.
b.
c.
d.
Japanese
American
Indian
Russian
5. If error cannot be detected, it should be made easy to detect.

a.
b.
c.
d.
Ishikawa
Juran
Shewhart
Poka-yoke
!79
6. Total Quality is doing things right:

a.
b.
c.
d.
The first time, every time

Always
The first time and the last time
In the beginning
7. Philip Crosbys one of the four absolutes of quality Measurement of

quality) is the cost of:
a.
b.
c.
d.
Non-conformance
Conformance
Performance
Efficiency
8. The concept of Feigenbaum: So much extra work is performed in

correcting mistakes that there is effectively a _________ within any
factory.
a.
b.
c.
d.
Additional workshop
Hidden plant
Sister concern
Repair plant
!80

After getting a reasonably good idea about the TQM, we now move to the
crux of the matter, that is Process Approach.
Remember, every thing what we do is a process. Every activity in the world
is a process, which consist of many small steps, many of which are value
adding and many are non-value adding.
Non-value adding activities are those for which customer is not ready to
pay.
To perform such non-value adding activities is:
1.
2.
3.
4.
Waste of time, energy, resources

A cause of loss in profit, i.e., less productivity and profitability
Low efficiency of labor
Delay in delivery resulting into customer dissatisfaction
If you become a master of process approach, nothing is impossible for you

in your business.
Process approach is the heart and soul of TQM.
Just focus your attention on what is coming in the next chapter and see
how your vision becomes a broad one.
!81
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
!82
PROCESS APPROACH
Chapter 4
PROCESS APPROACH
Objectives
Importance of Processes in Business

Flow Chart Process and Statistical Process Control
Structure
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
4.10
Definition of the Process

Process Flow Chart, Control Plan and Critical to Quality Characteristics
Process Capability
Statistical Process Control
Preventive Maintenance
SIPOC Diagram
Summary
!83
PROCESS APPROACH
4.1 Definition of the Process

A Process is defined as a set of linked or related activities that take inputs
and transform them into outputs with the purpose of producing a
product, information or service for external or internal customers.
A Process is a systematic series of actions directed to the achievement of
a goal.
The components of a process may be classified as 7 Ms as follows:
1
Materials
Raw materials, components
Manpower
People
Methods
Product/Process design, operating procedures
Machines
Tools and equipment
Measurement
Techniques and tools used to gather process

performance data
Maintenance
Care for process components, training
Management
Policy, work rules, environment
It challenges us to:
1. Do only those things those are value adding from the customers
point of view.
2. Move from managing functions to managing work processes.
3. Move from managing results to managing the processes that produce
the results.
4. Move from piecemeal problem to system-wide improvement.
Process Management is a system for:
1. Identifying the critical business processes of an enterprise.
2. Focusing on customer requirements to reduce work in process and
decisions in process.
!
!84
PROCESS APPROACH
3. Understanding the inputs and outputs of cross-functional processes and

how they are transformed from input to output.
4. Using process speed and flexibility as a competitive weapon.
Please refer to Point No. 2.5 in the Chapter 2 in which we have
mentioned about ISO 9001:2008, which defines Process Control as
follows:
1. The organization shall plan and carry out production and service
provision under controlled conditions. Controlled conditions shall
include:
(a) The availability of information that describes the characteristics of
the product
(b) The availability of work instructions
(c) The use of suitable equipment
(d) The availability and use of monitoring and measuring devices
(e) The implementation of monitoring and measurement
(f) Implementation of release, delivery and post delivery activities.
2. Validation of processes for production and service provision
(a) The organization shall validate any processes for production and
service provision where the resulting output cannot be verified by
subsequent monitoring or measurement. This includes any
processes where deficiencies become apparent only after the
product is in use or the service has been delivered. (Such a process
is often referred to as a special process).
(b) Establish arrangements to control special processes.
(c) Validation shall demonstrate the ability of these processes to
achieve planned results.
Design: The first step to Quality
Design is one of the basic management functions. A chronic weakness
among companies is under-management of design and development.
Problems in design, in turn ripple into operations. Quality suffers;
!85
PROCESS APPROACH
processing gets delayed and cost increases. The quality of goods and
services begin during the initial design activities.
Thus, a strong design program is itself one mark of organizational quality.
There is nothing as useless as doing efficiently which should not be done at
all.
Peter F. Drucker
!
Figure 4.1
Some of the Business Processes are:
1.
2.
3.
4.
5.
6.
Launching new products

Recruiting new employees
Producing goods
Providing customer service
Providing manufacturing facilities
Performing various tasks and operations
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PROCESS APPROACH
7. Transporting and delivering goods

8. Acquiring customer
9. Acquiring market knowledge
10.Purchasing
11.Strategic planning
12.Performance measurement
13.Training
Process Measures (Output)
Process Measures (Input)
All activities are performed

Sequence as per flow chart is
maintained
Accuracy is maintained
Cycle time is maintained
Cost is controlled
Efficiency
Quantity
Quality
Timeliness
Completeness
Accuracy
Effectiveness
4.2 Process Flow Chart, Control Plan and Critical to Quality

characteristics
Critical to Quality Characteristics (CTQs)
1. The requirements of the output of the process and measures of critical
process issues.
2. CTQs have to be derived from customer requirements, risks, economics,
regulations and process FMEA.
!87
PROCESS APPROACH
!
Figure 4.2
Pizza Delivery
Figure 4.3
!88
PROCESS APPROACH
The example of Pizza Delivery is given above in order to illustrate how the
CTQs are to be identified.
Case Example:
Process Sequence, and Control Plan for Zinc Plating of M.S.
Components:
The parameters highlighted in grey are the CTQs
Sr. No
1
Process
Chemical
Hot
degassing
2 A
Water
rinsing
Controlling
Parameters
Standards
Measuring
Frequency
Time
15~20 min
Every batch
Temperature
60~90 Deg
Once in a day
Pointage
Refer Note
Every batch
30~60 sec
Every batch
pH <12
Once in a day
30~60 sec
Every batch
pH <10
Once in a day
30~60 sec
Every batch
pH
pH <10
Once in a day
pH
Refer Note
Once in a day
Time
30 sec
Every batch
Tap water Time

pH
Water
rinsing
Tap water Time

pH
Water
rinsing
Pickling
Tap water Time
Conc.
HCL 33%
Specific gravity Refer Note

4 A
Water
rinsing
Tap water Time
pH
Once in a day
30~60 sec
Every batch
pH >1
Once in a day
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PROCESS APPROACH
5 *
6 A*
B*
7 C*
8 A*
B*
10
Water rinsing
Water rinsing
Anodic
cleaning
Water rinsing
Water rinsing
Acid cleaning
Water rinsing
Water rinsing
Zinc Plating
Water rinsing
Tap water
Tap water
Alkaline
chemical
Tap water
Tap water
HCL dilute
Tap water
Tap water
Acid Zinc
Boric acid,
Brightener
Zinc
Potassium
Chloride
Tap water
Time
30~60 sec
Every batch
pH
pH >4
Once in a day
Time
30~60 sec
Every batch
pH
pH >6
Once in a day
Time
8~12 min
Every batch
pH
pH <10
Once in a day
Voltage
8~12 Volts
Once in a day
Pointage
Refer Note
Once in a day
Time
30~60 sec
Every batch
pH
pH < 12
Once in a day
Time
30~60 sec
Every batch
pH
pH < 10
Once in a day
Time
30~60 sec
Every batch
pH
0.8~2
Once in a day
Time
30~60 sec
Every batch
pH
pH > 1
Once in a day
Time
30~60 sec
Every batch
pH
pH > 5
Once in a day
Time/Amps
per dm2
45 min to
120 min
depending
on part and
thickness
Timer
Voltage
8 ~ 12 volts Voltmeter
pH
4.8 ~5.4
pH meter
Time
30~60 sec
Every batch
!90
PROCESS APPROACH
11
Oven baking
Hydrogen De
embrittlement
pH
pH > 3
Once in a day
Time
2-4 Hrs
Every batch
Temperature 180 200O Every batch

C
12
Neutralization
13 A
Water rinsing
Water rinsing
Water rinsing
Nitric acid
0.5%, DM
water
DI water
rinse
DI water
rinse
DI water
rinse
Time
30~ 60 sec
Every batch
pH
pH < 3
Once in a day
Time
30~60 sec
Every batch
pH
pH > 3
Once in a day
Time
30~60 sec
Every batch
pH
pH > 5
Once in a day
conductivity
< 50
Siemens/
Meter
Time
30~60 sec
Every batch
pH
pH > 5
Once in a day
Conductivity < 50
Siemens/
Meter
14
Passivation
Time
60 sec
(Timer)
Every batch
Temperature For Blue

(Thermostat and Black:
)
RT and
Yellow:
55-60O C
Every batch
Concentratio Refer Note

n
Daily
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PROCESS APPROACH
15 A
16
Water rinsing
Water rinsing
Water rinsing
Reactive Type
Sealant/top
coat
DM water
DM water
DM water
Clear
liquid
chemical
pH
1.8~2.2
Every batch
Time
10 ~ 15 sec Every batch
Flow rate
4 Lit/min
Every batch
Conductivity < 50
micron
Once in a day
pH
pH > 3
Once in a day
Time
Flow rate
4 Lit/min
Every batch
Conductivity < 50
micron
Once in a day
pH
pH > 4
Once in a day
Time
Flow rate
4 Lit/min
Every batch
Conductivity < 50
micron
Once in a day
pH
pH > 5
Once in a day
Time
30~60 sec
Every batch
Concentratio Refer Note

n
Once in a day
17
Drying
Forced air
Time
3~5 min
Every batch
18
Oven baking
In oven
Time
20 ~ 30
min
Every batch
Temperature Min 80oC

EMT on 1
mm Sheet
Once in a day
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PROCESS APPROACH
Important Points: Storage Conditions (Silicagel, Local Exhausts)

Packing and Transportation
Figure 4.4
!93
PROCESS APPROACH
4.3 Process Capability

Making every business process capable is one of the main themes of TQM.
Deming and Juran observed that while majority of the problems are
associated with the processes, hardly any problems are caused by workers
themselves. It is not right to blame workers for something over which they
do not have any control. It is the management who should share the
responsibility with the workforce to continuously improve the processes
with which the individuals work.
There are two types of characteristics, measurable (variable) and countable
(attributive). It is possible to maintain a control chart for both types of
characteristics. We shall discuss here the control charts for variable
characteristics.
The uncontrollable and random influence of several parameters can lead to
deviations from the target value (e.g., the mean value of the tolerance
zone) despite great care.
The random interaction of multiple parameters produces the characteristic
seen for the parts in question, i.e., approximating to a Gaussian normal
distribution.
In this diagram, we have plotted the actual values of a particular
characteristic of several components. represents the average value of the
population and represents the standard deviation of the population.
1. If the upper tolerance is at + 3, and lower tolerance is at 3, the
population will probably have 99.7% good parts.
2. If the upper tolerance is at + 2, and lower tolerance is at 2, the
population will probably have 95.4% good parts.
3. If the upper tolerance is at + , and lower tolerance is at , the
population will probably have only 68.2% good parts.
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PROCESS APPROACH
!
Figure 4.5
!95
PROCESS APPROACH
!
Figure 4.6
1. In the above diagrams, the process is exactly centralized, i.e. the
average value is exactly at the center of the tolerance. The standard
deviation s or is calculated as follows:
!
!
!96
PROCESS APPROACH
where,
X = value of the individual part
_
X= average value of the population
n = number of samples
2. In practice, however, it is possible that the x bar is not in the center of
the tolerance and is shifted away from the center of the tolerance as
shown below:
!
Figure 4.7
The Process Capability Cp in case of A;
And CpU, CpL and CpK in case of B above is calculated as:
!97
PROCESS APPROACH
!
Where,
USL = Upper Specification Limit
LSL = Lower Specification Limit
_
X= average value of the population
= standard deviation of the population = s
!98
PROCESS APPROACH
!
Figure 4.8
The standard deviation indicates the inconsistency of our process; hence
we must strive to continually reduce the standard deviation of every
business process. This will result in reduction of width of the base of the
bell curve. In turn, more and more units will be within the tolerance zone.
That means, we must design the process such that uncontrollable and
random influence of several parameters leading to deviations from the
target value (e.g., the mean value of the tolerance zone) are kept as low as
possible.
Also we must strive to keep the as near as the center of the tolerance,
controlling maximum shift to 1.5. Thereby we can reduce the number of
defectives and the process will be in full control.
Process Capability (Cp)
As a guideline, Cp should be 1.33 for regular production and 1.67 for new
jobs. If the standard deviation is so much reduced that the Cp is 2, then
we call such a process as a Six Sigma process because in such a process,
the tolerance is equal to 12. This means that the standard deviation is
brought down to 1/12th of the tolerance!!!
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PROCESS APPROACH
I shall put it in an easy way.

We had made the Process sequence, control plan and process flow chart in
order to see that we do only those things those are value adding from
the customers point of view.
We also have to Control the CTQs, i.e.,
1. The requirements of the output of the process and measures of critical
process issues
2. Derived from customer requirements, risks, economics, regulations and
process FMEA.
Here, I would like to give some case examples:
Patients Waiting Time for Doctor in a Clinic
Chart of patients' waiting time in clinic in minutes
x1
20
30
26
17
24
x2
23
35
40
19
34
x3
25
40
34
23
45
x4
19
23
45
34
35
x5
15
25
20
40
26
20.4
30.6
33
26.6
32.8
25
40
45
40
45
X min
15
23
20
17
24
Range
10
17
25
23
21
USL
55
55
55
55
55
LSL
10
10
10
10
10
TOL MID
30
30
30
30
30
UCL
41.5
41.5
41.5
41.5
41.5
LCL
18.5
18.5
18.5
18.5
18.5
X bar
X max
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PROCESS APPROACH
In a clinic, the doctors keep the patients waiting for sometimes 10

minutes, 15 minutes, sometimes 20, 30, 45 minutes also without bothering
about the fact that there might be senior citizens, weak patients etc.
If the process of attending the patients could be made such that every
patient will be kept waiting only for 10 minutes or less (10 minutes can
be called as CTQ) but a constant amount of time, how wonderful would it
be! The patients can then plan their other activities. The doctors can
employ additional assistant doctors and some of the earlier patients
requiring more time can be attended by these doctors, if necessary.
The Cycle Time Order to Delivery
Sometimes fluctuates too much. It ranges from 1 month, 1.5,2.5,3,4 and
sometimes 6 months. Many times, promised delivery date is not
maintained. Due to this, the customer gets frustrated and may leave us. If
our tailor does not give us our clothes in time, and is always inconsistent,
we also shout at him! Hence, mapping the process to remove inconsistency
is a must.
If the office timing is 10 a.m., sometimes we reach the office earlier,
sometimes on dot, and many times late by 5,10,15,20minutes! You will
agree that it is possible to always reach in time if we start early and control
the process of travel between house and office properly!
If a student gets marks as follows:
1
Unit test 1
65%
Unit test 2
85%
Terminal
45%
Unit test 3
65%
Annual
40%
Can we say that the student is good in studies? For that, he has to be
consistent.
Following set of values were observed in an SPC Chart maintained on a
machine in Soft Stage of a components manufacturing process:
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PROCESS APPROACH
45
44
41
43
43
42
41
40
45
43
43
43
42
41
44
43
43
43
45
45
43
43
42
41
44
x bar
43.2
42.8
41.6
43
43.8
1.10
1.10
1.14
2.00
0.84
We can see that the values are fairly consistent in the last column but are
not consistent in the fourth column. The process has to be investigated to
find true causes of the variation.
In a Bearings Manufacturing Company, Following set of values were
obtained:
63
63
63
61
62
63
63
63
60
62
62
62
61
59
63
63
63
63
63
63
62
63
62
62
62
When almost all values are consistent, a value of 59 appears in the fourth
column. We must find the cause for this deviation.
In other words, we must continuously improve every business process to
be consistently good in order to always satisfy our customers.
4.4 STATISTICAL PROCESS CONTROL

Statistical Process Control is a process used to control a manufacturing
process on the basis of statistical methods. Samples of parts are taken and
their characteristic values are measured and entered in a form, the socalled control chart. Statistical quantities are calculated from the
!102
PROCESS APPROACH
characteristic values for evaluation of the current state of the process. If

necessary, the state of the process can be corrected by suitable measures.
The control chart method was developed by Walter Andrew Shewhart in the
1920s.
SPC is an application from the area of inductive statistics. Not all the
measured values are available, as would be in the case with 100%
inspection. Conclusions are made concerning the population on the basis of
small data set, the sample values.
The Basic Concepts Behind SPC are the Controllability and the
Capability of the Manufacturing Process
A process in control is characterized by stability. All the parameters of
process spread must be taken into consideration and be capable of
correction in the event of unwanted changes in the process state.
Fundamentally, Statistical Process Control is linked with maintaining a
Control Chart. Determination of the process capability is done through the
measured values that are entered in the control chart. The control charts
must show that the process is in control before the process capability is
calculated.
Control Charts are maintained for significant quality characteristics with the
aim of indicating and improving the controllability and capability of the
process.
Planning
1. Selection of the product characteristics.
2. Direct or indirect inspection characteristics.
3. The process must be capable of being controlled with reference to the
inspection characteristic. It must be possible to manipulate the
manufacturing devices such that the parameter in question can be
changed in a desired way.
4. The materials entering the process must meet the set quality
requirements.
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PROCESS APPROACH
5. Procurement of measurement system for the inspection characteristic.

6. Selection of the Control Chart, e.g., s Charts.
7. Sample Size: normally n = 5 is chosen.
8. Determining the sampling interval. After correcting errors or after tool
changes and re-adjustments, 100% measuring must be done until the
correct process average is achieved. The last five measured values are
considered as the first sample for the continuing process observation.
9. Determination of the sampling interval as per the expected mean fault
occurrence frequency, e.g., 10 samples within this period; or with
respect to the tool change and re-adjustment intervals, e.g., 5 samples
within the mean tool life and adjustment interval.
The inspection interval is to be set on a parts related or time related basis.
Machine Capability Study
It represents a short-term study that is intended to discover purely
machine related influences on the manufacturing process. It is necessary
to check whether processing equipment can meet the set requirements
with an adequate degree of certainty before it is introduced for mass
production.
The characteristic values of at least 50 units manufactured one after
another are determined and entered in columns as groups of 5 in the
evaluation sheet.
Case Example of Machine Capability Study:
In a bearings manufacturing company, the following set of values were
obtained for diameter:
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PROCESS APPROACH
X1
63
63
63
61
62
63
63
63
63
61
X2
63
63
63
60
62
63
63
63
63
60
X3
62
62
61
60
63
62
62
62
61
60
X4
63
63
63
63
63
63
63
63
63
63
X5
62
63
62
62
62
62
62
63
62
62
XI
63
62.8
62.4
61.2
62.4
62.6
62.6
62.8
62.4
61.2
0.55
0.45
0.89
1.30
0.55
0.55
0.55
0.45
0.89
1.30
_
Average X = 62.3
Average s = 0.748
Stability Test
_
UCL = Average X + (1.3 average s) = 63.27
_
LCL = Average X + (1.3 average s) = 61.33
_
It is found that all the X values are within the control limits. This means
that the x is stable.
Control limit for s = 2.1 * average s = 1.57
It is found that all the average s values are within the control limits. This
means that the average s is also stable.
The Machine Capability Index CmK = formula same as for CpK as follows:
!
Upper Specification Limit = 67
!
!105
PROCESS APPROACH
Lower Specification Limit = 57

CmK1 = 2.09
CmK2 = 2.36
So, the Machine capability Index CmK = 2.09 (Minimum of the two)
Production equipment (machine) is capable of ensuring that the tolerances
are met if CmK is more than or equal to 2.
Pre-Production Run
Determination of control limits requires a knowledge or estimation of the
process parameters. This is done by a pre production run. So, 25 samples
of 5 parts each are necessary for reliable results.
Figure 4.9
!106
PROCESS APPROACH
So, as a result of such pre-production run,

_
Average X = 62.2
Average s = 0.845
The control limits for the SPC Chart will be as follows (1.23 is a
constant):
UCL = mid tol + 1.23 average s = 62 + 1.23 x 0.845 = 63.03
LCL = mid tol 1.23 average s = 62 1.23 x 0.845 = 60.96
CpK as per the pre-production run =
Cpk1 =1.89
Cpk2 = 2.05
So, CpK = 1.89 (Minimum of the two) which is acceptable.
Accordingly, the s control charts using the above control limits are to be
maintained every shift for the parameters as above.
4.5 Preventive Maintenance

Preventive maintenance is the heart of all the processes, in the absence of
which it is not possible to have proper process control/process approach.
It is necessary to identify key process equipment and provide appropriate
resources for machine/equipment maintenance and develop an effective
planned total preventive maintenance system. This system shall include:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
A procedure that describes planned maintenance activities

Schedule of maintenance activities
Predictive maintenance methods
Review of manufacturers recommendations
Tool wear
Monitoring of uptime
Correlation of SPC data
Vibration analysis
Infrared monitoring of circuits
Perishable tooling characteristics
Availability of replacement parts for key manufacturing equipment
!107
PROCESS APPROACH
4.6 SIPOC Diagram

A SIPOC diagram is a tool used by a team to identify all relevant
elements of a process improvement project before work begins. It helps
define a complex project that may not be well scoped, and is typically
employed at the Measure phase of the Six Sigma DMAIC (Define, Measure,
Analyze, Improve, and Control) methodology.
The tool name prompts the team to consider the suppliers (the S in
SIPOC) of your process, the inputs (the I) to the process, the process (the
P) your team is improving, the outputs (the O) of the process, and the
customers (the C) that receive the process outputs. In some cases,
requirements of the customers can be appended to the end of the SIPOC
for further detail.
The SIPOC tool is particularly useful when it is not clear:
1.
2.
3.
4.
Who supplies inputs to the process?

What specifications are placed on the inputs?
Who are the true customers of the process?
What are the requirements of the customers?
Sample SIPOC Diagram

A SIPOC diagram is a tool used by a team to identify all relevant elements
of a process improvement project before work begins. It helps define a
complex project that may not be well scoped, and is typically employed at
the Measure phase of the Six Sigma DMAIC methodology.
SIPOC Diagram
Car Dealer Example:
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PROCESS APPROACH
!
Figure 4.10

Activity A
Take an A4 size paper and make several pieces of size 10mm 20 mm.
Use two best processes which you know for this. Take random 125 pieces
and measure the length of the pieces by the best measurement process
you know.
Plot an x s chart and also calculate the process capability. For calculating
s on MS Excel, give the formula = stdev (Value1..value5)
!109
PROCESS APPROACH
1. Which of the processes have better process capability?
.
Activity B
1. How many processes do you know for making rice in your kitchen?
Which is the better process for making rice? Why? Make a process flow
chart for the best process in your view.
4.8 Summary
1. A Process is defined as a set of linked or related activities that take
inputs and transform them into outputs with the purpose of producing a
product, information or service for external or internal customers.
2. Do only those things those are value adding from the customers point
of view.
3. Problems in design ripple into operations. Quality suffers; processing
gets delayed and cost increases.
4. CTQs have to be derived from customer requirements, risks, economics,
regulations and process FMEA.
5. Make a process flow chart, identify and eliminate non-value adding
operations, find out the process capability, make a control plan and
maintain an SPC chart, for all customer-important processes. Preventive
maintenance is the key.
6. Understand and implement SIPOC methodology.
!110
PROCESS APPROACH

1. Explain what CTQs are.
2. Explain difference between process efficiency and process effectiveness.
3. How will you reduce the standard deviation of a process?

1. The CTQs for delivery of Pizza are:
a.
b.
c.
d.
Taste
Temperature
Varieties
All the above
2. In the word SIPOC, S denotes:

a.
b.
c.
d.
Sample size
Safety
Security
Supplier
3. In the word SPC, C denotes:

a.
b.
c.
d.
Customer
Control
Critical to quality
Criteria
4. If we do value adding operations:

a.
b.
c.
d.
Cost of the product goes up

Customer pays more price
More salary to workers
Process becomes economical and efficient
!111
PROCESS APPROACH
5. In a process flow diagram,
!
a.
b.
c.
d.
denotes:
Delay
Decision
Transportation
Storage
6. There is nothing as useless as doing efficiently which should not be

done at all. This is said by:
a.
b.
c.
d.
Deming
Juran
Peter F. Drucker
Feigenbaum
7. If the upper tolerance is at + , and lower tolerance is at , the

population will probably have only
a.
b.
c.
d.
67.2%
68.2%
69.2%
70.2%
good
good
good
good
parts
parts
parts
parts
8. In a bearings manufacturing company, the order to delivery cycle time

required by customer is 60 days and the actual cycle time achieved in
last five deliveries is: 60, 61, 60, 59, 60. We can say that the
manufacturers performance is:
a.
b.
c.
d.
Efficient
Effective
Consistent
Inconsistent
9. We must strive to keep the as near as the ________ of the tolerance:

a.
b.
c.
d.
Average
Center
Minimum
Maximum
!
!112
PROCESS APPROACH

Once you become master of the process approach, we want to make you
conversant with the analytical ways of problem solving.
These are proven methods and we can assure you that one can solve
almost all technical problems and most of the other problems by practicing
these simple methods of
1.
2.
3.
4.
5.
Situation appraisal
Problem analysis
Decision analysis
Potential problems analysis
Fault tree analysis etc.
Why we face so many problems and have so many tensions is because:

1. We keep our activities and solutions to the problems pending for long
time
2. We do not work with check lists
3. We do not know what to do with the problems and how to solve them
The next chapter will make you master of problem solving.
Unbelievable, isnt it? But it is true.
Let us see how.
!113
PROCESS APPROACH
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
!114
PROBLEM SOLVING AND DECISION MAKING
Chapter 5
Objectives
To address your current on-the-job concerns and to improve daily

activities
To provide you with analytical tools to facilitate your handling of both
routine and non-routine functions. These tools are systematic techniques
or processes designed to improve your ability to gather organize and
evaluate information
To make you conversant with Problem Solving methods
To make you conversant with Decision Making methods
Structure
5.1
5.2
5.3
5.4
5.5
5.6
5.7
5.8
5.9
5.10
On-the-job Concerns
Situation Appraisal
Problem Analysis
Decision Analysis
Fault Tree Analysis
Ishikawa Diagram (Cause and Effect Diagram)
Summary
!115
!
Today, we will share with you some really interesting, effective and surest
ways and methods of solving almost any technical and most of the other
problems in our day-to-day life. We advise you to master these methods so
that you will be confident in handling any issues with analytical approach.
5.1 On-the-Job Concerns

1. What current concerns involve something going wrong (in any area
people, machinery, sales, distribution, costs etc.) for which you do not
know the cause?
2. What current concerns involve something going wrong (in any area
people, machinery, sales, distribution, costs etc.) for which you know
the cause, but you need to correct the situation?
3. What current concerns involve something that is going right, but you
think could be improved?
4. What current concerns require you to make a final decision on the best
of 2 or more alternatives?
5. What current actions or plans are you responsible for implementing?
6. What changes are about to occur?
!
!116
7. What are the threats and opportunities that face your operation?
8. Describe a current problem.
5.2 Situation Appraisal

1. Separate the concerns into:
a. Single, manageable items
b. Which can be resolved by one action
c. Any additional actions necessary to ensure success of the resolution?
2. Set priority or sequence as follows:
a. Seriousness: How severe is the impact? What/who is getting
affected and how seriously?
b. Urgency: Is there a deadline? Will opportunities be lost? How
pressing is the need for action?
c. Growth: Will it get worse? What will happen if ignored? Will the
problem grow if action is not taken?
3. Locate action sequence:
a. Is this a deviation for which cause is unknown? Then do: Problem
analysis, fault tree analysis, process mapping, brainstorming
by cause and effect diagram.
b. Does this concern require us to identify the best course of action?
Then do Decision Analysis.
c. Does this concern involve a decision which has been made but not
implemented? Then do Potential problem Analysis.
d. Can this concern be addressed by using just a few process steps?
Situation Appraisal of some concerns:
Our teams have listed some on-the-job concerns as above.
Consider that we have totally 7 concerns.
!117
Rating of seriousness and urgency done on the scale of 1-10 where 10 is

the maximum value of seriousness and urgency.
Concern
Seriousness
Urgency
We have plotted a graph of these concerns as follows. Seriousness value is

plotted on x axis and urgency values are plotted on y axis. The arrows
denote that there is going to be growth. i.e., it will get worse if not acted
upon immediately.
Seriousness (x) vs Urgency (y)
!
Figure 5.1
In the above graph, two concerns (5, 6 and 7, 9) have growth potential,
with high seriousness and urgency. These concerns must be taken for
analysis immediately.
!
!118
Case Example of Situation Appraisal: H high, M-medium, L Low.

Table 5.1
Recognize
Concerns
Separate
Concerns
Seriousness
Sales
growth is
limited
No sales growth 18% below

in region 3
plan HIGH
Production
costs are
increasing
Labor
How best to
keep
research
department
ahead of
competitors
in
technological
advances?
Materials
Exceeding
budget by
18% H
Chemicals
cost up 20%
Reopen
competitive
bidding on
interleaf
paper only
3 high bids
received)
Establish
inventory
levels for
precious
metals
Contract for 2
years M
Attracting
technical
experts to the
research
department
Competitive
disadvantage, outdated
skills H
Urgency
Growth
Locate
Process
Steps
New Plan
due
HIGH
Monthly
figures
declining
HIGH
Problem
Analysis
No
deadline
Low
Price
currently
increasing
M
Decision
analysis
Funds tied up
in inventory
High
One
Dept
current
expertise
vacancy declining
H
H
Decision
analysis
Potential
Problem
analysis
!119
5.3 Problem Analysis

Is this a deviation for which cause is unknown?
Deviation Statement
Specifically what is wrong (defect) with object, person or unit?
Table 5.2
Specify details of the deviation
Is
What
Is not
What is the object, person, or

unit with the defect?
What object, person, unit is

similar to the one involved but
does not have defect or
undesired behavior?
What is wrong? What undesired

behavior is observed?
Where
When
Extent
Where is the defect on object,

person, or unit?
What similar places the

deviation is expected to be but
is not?
Where is the object, person, or

unit observed to have the
defect?
Where at similar places the

deviation is expected to be but
is not?
When was the defect observed

When we might have expected
on is the object, person, or unit? to see the defect on the object,
person, or unit but did not?
When since then?
Prior?
How
How
How
How
How many might be involved

but are not?
many affected?
much of the object?
many defects per object?
large? Is there a trend?
!120
Develop Hypothesis for the Probable Cause

1. What is odd or unique with IS compared with IS NOT?
2. What are we doing to the IS that we are not doing with IS NOT?
3. What is true about IS and not about IS NOT?
4. What if anything has changed in each area of distinction? When did the
change take place? What event took place around or preceding the
timing of the problem?
5. What is there about this change that could cause this deviation?
6. How could this change combined with the distinction, has caused this
deviation?
7. Develop full cause and effect hypothesis.
Test the Hypothesis
1. If the hypothesis is the true cause, how does it explain BOTH IS and IS
NOT?
2. Select most probable cause on the basis of current evidence.
3. Verify the true cause by some experiments.
Case Example of Problem Analysis
Deviation Statement:
Fogging of high grade sheet film
Ref: A Customer Complaint
!121
Table 5.3
Specify details of the deviation
Is
What
Where
Distinctions
Change
Is not
1. Sheet film
Roll film, film

pack
Package
Zip top box

was
introduced
5 weeks back
2. Fogging
Black spotting, Handled in

streaking
total darkness
No change
3. Entire
surface
Only on
edges, part of
surface
Light tight
holder
No change
4. All districts
Localized,
large outlets
Interleaf paper New supplier

since 6
months
6. 10 + days
earlier
Slow turnover
7. Daily,
continuously
Sporadic,
periodic
New
employees
8. Immediately
after
developing
Before, later
New
containers
9. 10% of
dealers
complaining
All dealers,
only some
Strontium 90
5. Small outlets
When
Extent
No change
Stray
10. All units are
affected
Constant
11. Upward
trend
By looking at the IS and IS NOT, the team develops possible causes and
every possible cause is checked against each IS as well as IS NOT as
follows:
!122
Table 5.4
Develop Possible Causes
Test for Most Probable Causes
IS and IS NOT Number
Radioactivity causing
fogging
Zip top box leaks light
ok ok ok
Fire in the factory causing

contamination
Interleaf paper is
contaminated
ok ok ok
ok
10
11
ok ok ok ok
Improper mixing
+means = no it doesnt explain the cause

U means = explains only if.
Ok means = yes it explains the cause
True cause which explains most of the IS-IS NOTs = Interleaf paper is
contaminated
Verify the true cause as follows:
Logical: Check Production dates

Reality: check interleaf paper
Check old interleaf paper
5.4 Decision Analysis

Does this concern require us to identify the best course of action? Let us
say, you have three options A, B and C. Test each option with your:
1. Must Objectives (essential ones): Every option must fulfill all
essential objectives, then only we accept it (i.e., GO) otherwise
summarily reject the option (i.e., NO GO).
2. Want Objectives (desirable ones):
!
!123
(a) Every want objectives has a weightage. (i.e., how much important it
is on the scale of 1 to 10 considering your requirement?)
(b) Every option has a score with respect to the want objective. (How
far this option fulfills your want objective requirement on the scale
of 1 to 10?)
(c) The option which satisfies ALL the MUST Objectives (as GO), and
whose weight score (i.e., weightage multiplied by score) (total of all
weight scores) is highest is accepted as a decision.
Table 5.5
Classify
Objectives
Option
A
Option
B
Option C
Must
Objectives
Go/No go
Go/No go
Go/No go
What are
the
essential
objectives?
Does this
alternative
meet the
must
objective?
Does this
alternativ
e meet
the must
objective
?
Does this
alternativ
e meet
the must
objective?
Want
Objectives
Wt
Sc
Wt
Sc
Sc
Wt Sc
Sc
Wt
Sc
What are
desirable
objectives?
What is the
relative
importance
of wants?
What is
the score
of this
alternativ
e?
->
Total
weight-ed
score
->
->
1. How do the alternatives compare with each other considering all the
must and want objectives? What alternatives should be assessed for
adverse consequences?
!124
2. What could go wrong if this alternative is chosen?

3. What is the probability that this adverse consequence will occur?
4. What will be the seriousness if this occurs?
5. Make final decision.
6. If already a decision is made, change the decision suitably if the
probability of something going wrong is high and seriousness of it is also
high. This is called as Potential Problem Analysis.
Table 5.6: Case Example of Decision Analysis
Option A:
Advertising
Classify
Objectives
Must Objectives
Option B: Flip Option C: Plastic

up Box
Box
Go no go
Go/No go
Go/No go
Increase sheet
film market
share by 2% for
peak period
OK
GO
OK
GO
OK
GO
Cost not more

than 35000
OK
GO
OK
GO
OK
GO
Implement
within 5 months
OK
GO
OK
GO
OK
GO
Want Objectives
Wt
Sc
Wt sc
Sc
Wt sc
Sc
Wt sc
Ensure repeat
business
beyond peak
period
35
10
70
21
Minimize cost
21
12
10
30
Strengthen
image
10
60
10
60
30
Maximise
Market Share
10
90
54
72
Total Wt Sc
206
196
153
!125
So, advertising for which:

1. All the must objectives are: GO and
2. Sum of the weight scores is maximum is chosen as the decision
option.
Adverse consequences:
1.
2.
3.
4.
If ad agency is not ready in time, we will miss the peak season.

Professionals may not be receptive to advertising.
Competition may outweigh our program.
If there is heavy expenditure on ads, ROI may get affected.
5.5 Fault Tree Analysis
Figure 5.2
!126
It is the method to represent the logical combinations of various systems

which lead to a particular outcome, i.e., top event.
It is a graphic model that determines various combinations of equipment
faults and failures that result in a defect. Here is an example:
!
Figure 5.3
In fault tree analysis, abnormal operations are assumed in normal
operations of a plant. The ultimate abnormal event is shown in a rectangle
at the top. Then all combinations of individual failures that can lead to that
abnormal event are shown in the logical format of the fault tree.
5.6 Ishikawa Diagram (Cause and Effect Diagram)

This diagram is also called as a fishbone diagram. You will be able to see in
one go all the potential causes for an effect. There are many opinions as to
what could be the root cause for a problem. One way to systematically
present all the ideas and stimulate the brainstorming of the team members
is this diagram.
!127
To start with, make a problem statement, e.g., The repair cost in case of
one particular type of DLL Nozzles has increased by 19% during last three
months.
The bones of the diagram will have following categories:
1. Man, machine, methods, material, environment, measurements
2. Policies, procedures, people, plant/technology
!
Figure 5.4
In a brainstorming session, with the available data and evidences, following
questions will be asked to the team members. They will be supplied with
small cards (Post card size) and will be asked to write their answers on the
cards. The cards will be collected and arranged on a soft board by pinning
on the concerned category.
1. Who has produced this unit? Has the worker/setter/supervisor failed to
perform his duties? Has the designer made a mistake in drawings? Was
the regular worker absent and so another substitute worker did this job?
2. Which machine was used? Was the preventive/predictive maintenance
schedule followed in case of this machine? Is the machine capable? If
not, what is the capability index? Was the SPC skipped?
3. Were a new method/different method applied? What is the change in
recent period?
!128
4. Was the material received from a different supplier? Was it not

inspected?
5. Was it stored in a corrosive environment? Was it raining during last
week?
6. Is the gauge R & R Ok? Was the measurement method changed?
7. What is the change, if at all, in any category?
8. Where is the problem and where there is no problem?
9. Various causes of the effect are discussed and the probability of the
detailed causes is decided. The most probable cause is then found out.
10.Fast changing technology can push the industry out of race.

Activity A
1. List all the concerns in your field of work.
.
Activity B
1. Make a situation appraisal of your concerns.
5.8 Summary
By listing down all the concerns, separating them, and making a situation
appraisal gives you a lot of relief from day-to-day tensions.
By using the methods given, almost all the problems can be tackled very
effectively.
!129

1. Explain problem analysis method as understood by you.
2. Make a problem analysis for following concern:
(a) A machine which always runs smoothly with no problems has
suddenly stopped working yesterday night.
3. You have to choose a residential flat in Pune amongst three alternatives:
(a) Two BHK flat in Chinchwad
(b) Three BHK flat in Nigadi
(c) Two BHK Flat in Kothrud
Make a list of must objectives.

1. I do not know why I am always getting less marks in the exam. I have
to make:
a.
b.
c.
d.
Decision analysis
Situation appraisal
Problem analysis
None of the above
2. A student does not know what he should choose between the following
courses, viz., IT, C.A. or engineering. What should he do?
a.
b.
c.
d.
Decision analysis
Situation appraisal
Problem analysis
None of the above
3. Fault tree analysis is made to:

a.
b.
c.
d.
Find
Find
Find
Find
fault in others
fault in the seniors
true cause of the problem
a fault in the tree
!
!130
4. Situation appraisal is same as FMEA.

a. True
b. False
5. Fishbone diagram is same as:
a.
b.
c.
d.
FMEA
Problem analysis
Ishikawa diagram
Situation appraisal
6. Problem analysis is same as:

a.
b.
c.
d.
Fault tree analysis

Event tree analysis
Situation appraisal
None of the above
7. In Decision analysis, the weightage score of want objectives is as

follows:
TOTAL WT SC
Option1
Option2
Option3
206
196
153
Which option has to be preferred?

a.
b.
c.
d.
Option 1
Option 2
Option 3
None of the above
8. The meaning of a concern is __________ (in any area people,

machinery, sales, distribution, costs etc.) for which either you know the
cause or you do not know the cause?
a.
b.
c.
d.
something going wrong

defect
loss
rejection
!131
9. In case of MUST objectives, we must see the weightage score and take
a decision.
a. Right
b. Wrong

Once you are the master of process approach and problem solving
techniques, we want to take to a awesome and amazing activity called
Failure mode and effects analysis FMEA.
Almost all successful products and processes in this industry are result of a
team activity called FMEA.
The most successful product of Bosch, anti-skid-braking system(ABS) had
been finalized by the Bosch Management only after an FMEA of 109 pages
was completed and presented by the highly competent team.
A simple looking activity but highly complicated one but ultimately
interesting one because of its result oriented nature.
I am sure all of you all will get involved in this FMEA activity, which will
enrich your competence in this field of TQM.
!132
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
!133
PREVENTIVE TECHNIQUES
Chapter 6
Objectives
Importance and Types of FMEA
Structure
6.1
6.2
6.3
6.4
6.5
6.6
6.7
Failure Mode and Effects Analysis

Design FMEA
Process FMEA
Summary
!134
6.1 Failure Mode and Effects Analysis

In order to continually improve products and processes wherever possible,
using the FMEA as a disciplined technique to identify and help minimize
potential concerns is the most important matter ever. Studies have shown
that fully implemented FMEA programs have prevented many customer
complaints. One of the most important factors for the successful
implementation of an FMEA Program is timeliness. It is meant to be a
before-the-event action not an after-the-fact exercise. Up-front time
spent properly completing an FMEA, when product/process changes can be
most easily and inexpensively implemented, will minimize late change
crises.
There are three basic cases for which FMEAs are generated.
Case 1: New designs, new technology, new process
Case 2: Modifications to existing design, existing process.
Case 3: Using an existing design or process in a new environment,
location, or application.
FMEA input should be a team effort. A team of knowledgeable individuals
should be assembled.
Figure depicts the sequence in which FMEA should be performed.
There will be three types of FMEAs.
1. Design FMEA
2. Process FMEA
3. System FMEA
!135
!
Figure: 6.1
6.2 Design FMEA

1. Names of the core team members.
2. Item/Function: Enter the name and function of the item.
3. Potential Failure Mode: It is defined as manner in which a component,
sub-system, or system could potentially fail to meet or deliver the
!136
intended function. List each failure mode, which could occur but may
not necessarily occur.
4. Potential Effects of Failure: What external/internal customer might
notice, e.g., noise, roughness, poor appearance, unpleasant odor,
inoperative etc.
5. Severity (S): It is the rank associated with most severe effect for a
given Failure mode (on the scale of 1-10) as follows:
Hazardous without warning
10
Hazardous with warning
Very high
High
Moderate
Low
Very low
Minor
Very minor
None
What we have to do: We have to reduce this number to be as low as

possible.
A reduction in this severity ranking index can be effected only through
a design change/revision.
6. Potential Causes of the Failure: List to the extent possible every
potential cause/failure mechanism for each failure mode, as precisely
and completely as possible. Give a serial number for each cause.
7. Occurrence (O): Occurrence is the likelihood that a specific cause or
mechanism will occur during the design life. The likelihood of occurrence
ranking number has a relative meaning.
!137
Very high/persistent failures
High
Moderate
Low
Remote
100 per thousand
10
50 per thousand
20 per thousand
10 per thousand
5 per thousand
2 per thousand
1 per thousand
1 per 2 thousand
1 per 10 thousand
1 per one lakh

possible.
8. Current Design Controls: List the prevention, design validation,
verification, fail-safing or other activities that have been completed.
9. Detectability (D): How best the defect be detected inside the
manufacturing facility with all the design controls-prevention-detection
equipment?
Detectability is a relative ranking as follows:

Absolute uncertainty (i.e., it cannot be detected by design
control)
10
Very remote possibility
Remote possibility
Very low possibility
Low possibility
Moderate possibility
Moderately high possibility to find the defect in the house
!138
High possibility to find the defect in the house
Very high possibility to find the defect in the house
Almost certain to find the defect in house

possible.
10. Risk Priority Number (RPN): It is the most important indicator of
the FMEA activity.
It is the product of S, O and D. The value will lie between 1 and 1000.
For example, if S = 9, O = 7 and D = 5, the RPN will be 315.
What we have to do: We have to reduce this RPN number to be as

low as possible.
To begin with, as a first target, we have to see that S is not more

than 5, and RPN is not more than 125.
11. Recommended Actions: Engineering assessment for preventive/
corrective action should be first directed at:
a. High severity
b. High RPN
The intent of any action is to reduce rankings in the following order:
a. Severity: Regardless of RPN, very important.
b. Occurrence
c. Detectability
Actions such as:
a.
b.
c.
d.
e.
Revised design
Revised tolerances
Revised material specifications
Design of experiments
Revised test plan
!139
12. Actions responsibility: Actions taken and action results in terms of

reduction in RPN are to be entered. The design responsible engineer
has to ensure that the actions are implemented in time.
6.3 Process FMEA

1. Names of the core team members.
2. Process Function/Requirements: Enter a simple description of the
process or operation.
3. Potential Failure Mode: It is defined as manner in which the
process could potentially fail to meet the process requirements or
design intent. List each failure mode, which could occur but may not
necessarily occur.
4. Potential Effects of Failure: What external/internal customer might
notice, e.g., noise, roughness, poor appearance, unpleasant odour,
inoperative etc.
5. Severity (S): It is the rank associated with most severe effect for a
given Failure mode (on the scale of 1-10) as follows:
Hazardous without warning
10
Hazardous with warning
Very high
High
Moderate
Low
Very low
Minor
Very minor
None
!140

possible.
A reduction in this severity ranking index can be effected only through a

design change/revision
6. Potential Causes of the Failure: List to the extent possible every
potential cause/failure mechanism for each failure mode, as precisely
and completely as possible. Give a serial number for each cause.
7. Occurrence (O): Occurrence is the likelihood that a specific cause or
mechanism will occur during the design life. The likelihood of occurrence
ranking number has a relative meaning.
Very high/persistent failures
High
Moderate
Low
Remote
100 per thousand
10
50 per thousand
20 per thousand
10 per thousand
5 per thousand
2 per thousand
1 per thousand
1 per 2 thousand
1 per 10 thousand
1 per one lakh

possible.
8. Current Process Controls: List the process controls such as error/
mistake proofing, SPC, or other activities that have been completed.
9. Detectability (D): How best the defect be detected inside the
manufacturing facility with all the process controls-prevention-detection
equipment?
Detectability is a relative ranking as follows:
!141
Absolute uncertainty (i.e., it cannot be detected by design

control)
10
Very remote possibility
Remote possibility
Very low possibility
Low possibility
Moderate possibility
Moderately high possibility to find the defect in the house
High possibility to find the defect in the house
Very high possibility to find the defect in the house
Almost certain to find the defect in house

possible.
10. Risk Priority Number (RPN): It is the most important indicator of
the FMEA activity.
It is the product of S, O and D. The value will lie between 1 and 1000.
For example, if S = 9, O = 7 and D = 5, the RPN will be 315.
What we have to do: We have to reduce this RPN number to be as

low as possible.
To begin with, as a first target, we have to see that S is not more

than 5, and RPN is not more than 125.
11. Recommended Actions: Engineering assessment for preventive/
corrective action should be first directed at:
a. High severity
b. High RPN
The intent of any action is to reduce rankings in the following order:
!142
a. Severity: Regardless of RPN, very important

b. Occurrence
c. Detectability
Actions such as:
a.
b.
c.
d.
Revised process
Revised cycle times
Error/mistake proofing
Revised test plan
12. Actions Responsibility, actions taken and action results in terms of

reduction in RPN are to be entered. The design responsible engineer
has to ensure that the actions are implemented in time.
Table 6.2: Case Example of Process FMEA
Proc
ess
funct
ion
requi
rement
s
Pot
enti
al
fail
ure
mo
de
Potential S Potenti O Cu
effects
al
rre
of failure
causes
nt
/mecco
hanisntr
ms of
ols
failure
D RPN Recommen
-ded
action
s
Responsibili-ty
and
targ-et
completi-on
date
Action results
Act
ion
stak
en
S O D R
P
N
Sto
pad
de
d,
spr
ay
erch
ecke
d
onlin
e
7 2
Pre detec
ve- tion
nti
on
Man
ual
appli
cation
of
wax
insid
e
door
Ins
uffi
cient
wax
cov
era
-ge
ove
r
spe
cifie
d
surf
ace
Deterior
ated life
of door
leading
to:
Unsatisf
actory
appeara
nce due
to rust,
through
paint
Impaire
d
function
of
interior
door
hardwar
e
7 Manual
-ly
inserte
d
spray
head
not
inserte
d far
enoug
h
Visual
check
each
hour,
Check
film
thickn
ess
by
depth
meter
and
cover
age
one
per
shift
280 Add
Mfg
positi- engg
ve
depth
stop
to
sprayer
5 70
!143
Only one cause for the failure mode is analyzed above. Similarly, other
causes as well as other failure modes have to be analyzed.

Activity A
You have purchased a new laptop computer. You want to create a
spreadsheet for balance sheet as well as profit and loss account of your
organization.
1. Make a process flow chart for this process and make a process FMEA.
.
Activity B
1. You must have seen a recliner chair in a movie theatre. Your friend has
designed a recliner chair for household or domestic purpose. Make a
design FMEA for such a chair, imagining that a senior citizen is going to
use it.
6.5 Summary
If we are able to ascertain all the failure modes before implementation of a
product or process by FMEA we, are able to prevent every problem of
customer dissatisfaction.
!144

1. Explain what is meant by detectability.
2. Explain what is meant by occurrence.
3. If severity of the effect is 7, how would you bring it down?

1. In Process FMEA, if detectability is described as Absolute uncertainty
(i.e., it cannot be detected by process control), then the relative ranking
would be:
a.
b.
c.
d.
8
9
1
10
2. In design FMEA, if occurrence is described as Low = 1 per 2000, then

the relative ranking would be:
a.
b.
c.
d.
3
4
7
8
3. If S = 5, O = 7 and D = 9, the defect can be detected easily in the

manufacturing plant itself so that the customer may not get a defective
component.
a. True
b. False
4. If S = 7, O = 7 and D = 9, what is the risk priority number?
a.
b.
c.
d.
441
341
241
541
!145
5. As a first target, S should be brought down to __________ and RPN

should be brought down to ___________.
a.
b.
c.
d.
9 and 10
12 and 341
5 and 125
6 and 163
After studying and mastering Process Approach, problem solving methods

and preventive techniques such as FMEA, your next destination is what the
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 requirements and expectations.
This is a very important chapter and you go through this chapter word by
word and make it by heart.
The reason for this is that throughout your business life as well as private
life, you will get benefitted by this chapter. I promise that you will enhance
your whole career if you capture all the ideas given here.
It is a very interesting chapter indeed.
Gemba Kaizen, PPORF, 5 S, PDCA cycle, House of Quality and what not.
Enjoy!
!146
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
!147
CONTINUOUS IMPROVEMENT
Chapter 7
Objectives
Importance of Continual Improvement

Reasons for Continual Improvement
Poka-yoke and Quality Circles
Structure
7.1
7.2
7.3
7.4
7.5
7.6
7.7
7.8
7.9
7.10
7.11
Preamble
Continuous Improvement and Continual Improvement
Twenty Keys to Workplace Improvement
Gemba Kaizen
House of Quality: Quality Function Deployment
Poka-yoke
Quality Circles
Summary
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7.1 Preamble
Continuous improvement is an inherent part of the TQM process.
Continuous improvement consists of measuring key quality and other
process indices in all areas and taking actions to improve them. These
indices could include the output of a manufacturing process, customer
satisfaction, the errors in engineering drawings, warranty returns, or any
number of other measures to characterize a process. As the definition
states, continuous improvement should be focused on processes, and
pursued in all areas. The continuous improvement concept focuses on:
1. Finding shortfalls and sources of variability in administrative processes,
manufacturing processes, and service processes, that can detract from a
quality output
2. And improving the process to eliminate undesirable outputs.
The objective of continuous improvement is to improve the process so that
customer satisfaction increases and the cost of attaining increased
customer satisfaction decreases.
Figure 7.1
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7.2 Continuous Improvement and Continual Improvement

In this book, the adjectives, viz., continuous and continual are
frequently used. At the outset, it is necessary to explain the difference
between the meanings of two adjectives.
Continuous refers to actions which are uninterrupted: e.g., My
upstairs neighbor played his stereo continuously from 6:00 PM to
3:30 AM. The continuous improvement also means uninterrupted
improvement/innovative improvement as shown below:
!
Figure 7.2
Continual actions, however, need not be uninterrupted, only repeated: My
father continually urges me to get a job.
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!
Figure 7.3
In practice, we are able to make step function improvement and so
continual improvement is the right word to be used; and it is rightly used
in ISO 9000:2005 terminology also.
Total Quality Management is insisting on this continual improvement
again and again and so it is necessary to explain this way of working.
Reasons for Continual Improvement: External:
1.
2.
3.
4.
Continuously increasing customer expectations

Increased demands on reducing costs
Increased competition to products in domestic and international market
Customer satisfaction is must in any case
Reasons for Continual Improvement: Internal:

1.
2.
3.
4.
5.
6.
Attitudinal change required

Removal of mental blocks
Understanding that Nobody is perfect
Involving all employees is a must
There is nothing that cannot be improved further
Improvements in small steps
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One of the approaches to achieve continual improvement is to reduce

waste.
What is WASTE?
1. Waste is anything which does not add value to a product or service.
What is Value Adding?
1. Value adding is that part of the work for which the customer is ready to
pay.
2. Customer is not ready to pay for waste.
!
Figure 7.4
Total wastes (MUDA) in an organization:
1.
2.
3.
Intermediate storage
Idle machine
Too much of paperwork
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4.
5.
6.
7.
8.
9.
10.
Scrap and repair

Search tools and gauges
Lengthy procedures
Transport over long distance
Zigzag production layout: too much backtracking
Excess manpower
Too much inventory
Figure 7.5
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Our beliefs in continuous improvements:

1. Spend less money for improvements
2. Next man in the process is the internal customer
3. Activity at workplace: Gemba Kaizen
4. Improvement in small steps
5. Involvement of all employees
6. Process approach
Ten rules for continuous improvement:
1.
Take a new standpoint for hitherto procedure
2.
Think how something can be made
3.
Do not ask why something cannot be made
4.
Question everything
5.
A 50% solution is better than 100% solution that can hardly be

achieved
6.
Correct mistakes immediately
7.
Spend less money for improvements
8.
The capability to solve problems is developed through problems

themselves
9.
Ask why 5 times and find the true reasons
10. Ten people solve a problem better than an individual specialist

11. Continuous improvement has no end.
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7.3 Twenty Keys to Workplace Improvement
Let us understand the above diagram

This is regarding overall workplace improvement. We have to improve
twenty parameters. These are shown by twenty radial lines, K1K20 in
above diagrams.
In the top diagram, there are three circles
1. In the first circle, the diameter of the inner circle is small which
increases in the next circle and it further increases in the next circle.
This means that all the 20 parameters have improved equally and
simultaneously. This is what should happen.
Now look at the bottom diagram
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1. In the first circle, the diameter of the inner circle is small. In the next
circle, the improvement is observed only in case of parameter No. K1
and K7. In the next circle again, the improvement is observed only in
case of parameter No. K4, K10 and K16. This is what should not
happen.
2. We must improve all the parameters simultaneously and equally.
Synopsis of PPORF (Practical Program of Revolutions in Factories)
by Iwao Kabayashi
Cleaning and Organizing: Five S:
!
Figure 7.7
1. Seiri (Sorting)
(a) Make a survey of spare parts, material inventory, laboratory
equipment, records, measuring equipment etc. and sort out
necessary from unnecessary and working from non-working
(b) Classify repairable from non-repairable items
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(c) Classify items on the basis of frequency of use

(d) Dispose off unnecessary items
2. Seiton (Systemizing)
(a) Design a more rational layout
(b) Allocate a place close to the point of use for frequently used items
(c) Prefix a place for everything depending on the frequency of use
(d) Label and color code the pre-fixed places
(e) Establish a method for keeping record sheets, data, reports etc.
(f) Plan storing all items with a mind on easy irretrievability
(g) Trolleys, bins and forklift trucks could have proper parking places.
Systemize storage of drawings, prepare indexes, label shelves and
cabinets
3. Seiso (Spic and Span)
(a) Draw up schedules and assign clear responsibilities for cleaning
machines, working desks etc.
(b) Train employees
(c) Avoid littering: collect machine scrap etc regularly and dispose off
(d) Pay special attention to scrap yards, gardens and godowns
(e) Look for leaks, cracks on machines, identify root causes, take
necessary actions
(f) Check for oil/air clogged in pipelines
(g) Ensure clean light bulbs, shades etc.
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4. Seiketsu (Serene Atmosphere)

(a) Establish clear working standards
(b) Ensure all employees wear clean clothes, personal protective
equipment and follow safety norms
(c) Maintain sanitary conditions in common facilities
(d) Set up visual controls to spot any malfunctioning
(e) Look for heavy noise, vibration, heat in machines, analyse root
cause and take actions
(f) Ensure adequate lighting, ventilation and exhaust
(g) Check for leaky roofs
(h) Gangways to be clearly marked
(i) Eating and smoking places to be clearly marked
(j) Maintain regular monitoring
5. Shitsuke (Self-discipline)
(a) Make use of posters, banners, booklets for greater understanding
(b) Display correct work procedures and important norms in the
workplace
(c) Introduce daily check lists, responsibility check lists
(d) Ensure proper guidance and training
(e) Ensure that procedures are followed with scheduled audits
(f) Stick to rules
Rationalizing the System/Management of Objectives
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1. A company is working towards their goal.

2. If the goal is just told from top to the bottom through each level, it is
difficult to let everyone cooperate towards the goal.
3. If someone thinks of just attaining his own goal and pushes others out,
the whole goal could never be achieved.
4. Help others and be helped by others and then you can achieve your
goal.
5. Management and employees together should think of the company goal
and take it as the goals of the individual and work towards attainment.
6. Matching top-down management and bottom-up management enables
your organization to be responsive to any changes.
Small Group Activities
1. Small groups formed by first line employees who set their own goals
related to their work itself, work environment or human relations
according to their ability.
2. The activities are conducted through wisdom and efforts of all group
members.
3. A number of tasks or challenges become clear to identify when you
follow 20 implementation guidelines as per PPORF. Kaizen suggestions
will increase.
Reduce Work in Process WIP
Inventories incur interests, take up space, require administration,
transportation and equipment. WIP is the cause of many problems. During
the processes from raw materials to finished products, there are many
different forms of WIPs in the plant or in the warehouse. We must see that
the WIPs are continuously reduced by proper planning and control. Getting
the materials just in time from the suppliers is also a way to reduce the
WIPs.
Quick Changeover Technology
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It is a revolution of the way of thinking. The goal is to perform changeover

in less than ten minutes.
Value Analysis (Kaizen in Operations)
Although a factory can benefit greatly from individual one shot
improvement, looking at the entire factory and refining individual tasks
yields even greater results. It is the method to go back to the basics to see
the whole operation. Through value analysis, functions of all work units are
analyzed and objective and purpose of each unit becomes clear. To achieve
the goal, the principle is to conduct vertical kaizen (Kaizen to improve
operation rate of both workers and machines) as well as horizontal kaizen
(Kaizen to reduce required labor) simultaneously. Multitudes of kaizen in
both these directions can naturally double the productivity. The major point
for productivity increase is companywide mutual cooperation.
Zero Monitor Manufacturing
Nobody realizes that simply watching an automatic machine is a waste.
Follow the steps to eliminate monitoring, so that operators can handle
multiple number of machines without worrying about machine conditions.
Regardless of the machine types, try to run unmanned. Eliminate waiting
by balancing out the lines in assembly shop. Accomplish zero defect and
zero monitoring.
Coupled Manufacturing
Creating collaboration between upstream and downstream processes: Low
WIP, low inventories in stores, single minute changeover, combining
different processes, a line of different processes. We can make wide variety
of products in small quantities along the line.
Maintaining Machines and Equipments
Preventive/predictive maintenance.
Work Floor Time Policies
Where there is strong discipline, the work culture is refreshed. Workplace
should be comfortable. All the work must be performed as per the
schedule.
Quality Assurance System
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Zero defect on the process so that defective components cannot go out of

the factory and turn into customer complaints.
Developing Your Suppliers
Let us think what support we should give to our suppliers to strengthen
their production system. Relationship with the suppliers affects quality, lead
time and cost.
Eliminating Waste
It is called as MUDA. Once it is understood and agreed, it is necessary to
draw a treasure mountain map that shows the locations of MUDA (Waste)
at a glance.
Empowering Workers to Make Improvements
Kaizen should be conducted within your workplace.
Training and Retraining, Skill Versatility and Cross Training: Multiskilled Workforce
If operators are trained to be able to perform skills not only in their own
workplace, but also other areas, demand can be met in any unexpected
circumstances.
Production Scheduling and Process Control
Nowadays, customers needs are increasingly diversified; specification level
is higher, lead times are shorter and demands change substantially. It is,
therefore, necessary to eliminate any waiting, any idle time and meet
delivery requirement completely.
Efficiency Control
Set quantitative goals and use graphs as tools of efficiency management to
motivate employees for the accomplishment of goals. It is also necessary
to recognize the efforts of the employees.
Using Microprocessors
Computerization.
Conserving Energy and Materials
!
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Sometimes survival of a company depends on how they can be successful

in energy and resource conservation.
Leading Technology
It is necessary to evaluate the developmental speed in your plant or
workplace and compare with the standard level of your industry and if you
are behind, you must improve it as the difference will grow bigger over the
years.
7.4 Gemba Kaizen

Gemba means workplace, MUDA means waste and Kaizen means
continuous improvement.
Figure 7.8
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1. If we have to solve any problem and do any improvement, we have to

go to Gemba first, that means, we have to leave our air-conditioned
office and go to the workshop, to the machine, to the worker, and spend
value time in that environment.
2. The first and foremost activity is look for all the MUDA, i.e., wastes on
the workplace as given below. Then we have to improve the
housekeeping.
3. MUDA elimination in totality and quantum improvement in housekeeping
as per 5S methodology is a must.
4. We have to take temporary counter measures on the spot. Find the root
cause of problems.
5. We should apply the PDCA/PDSA methodology followed by SDCA cycle
followed again by PDCAas a continual effort.
PDCA Cycle
The essence of the reactive approach is standardization of the problem
solving process using Demings PDCA cycle and the seven QC steps under
the PDCA cycle, which was developed by Walter Shewhart and was
popularized by Edward Deming, and is often called as Deming cycle. It
gained wide popularity in Japan through the efforts of Deming.
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!
Figure 7.9
PDSA Cycle
Later in Deming's career, he modified PDCA to "Plan, Do, Study,
Act" (PDSA) because he felt that "check" emphasized inspection over
analysis.
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!
Figure 7.10
Source: Langley et al. (1996)
Figure 7.11
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SDCA Cycle
A refinement of the PDCA cycle aimed at stabilization of production
processes prior to making attempts to improve.
Plan Stage:
1. Select the theme or project
2. Collect and analyze data: Understand and highlight the problem
3. Analyze causes: Find out the root cause of the problem
Do Stage:
1. Plan and implement solution: eliminate the root causes of the
problem
Check Stage/Study Stage:
1. Evaluate effects
2. Summarize what was learned
Act Stage:
1. Standardize Solution: The objective of this step is that the improved
level of performance is maintained. The corrective action that has been
successful in improving the performance must be documented in current
operating procedures. The sub-steps include:
(a) Documenting
(b) Standardizing and control
(c) Training to ensure that the employees fully understand the new
methods.
2. Reflect on process and next problem:
(a) Use experience gained for future projects.
(b) Start afresh with a new breakthrough activity
The following diagram explains the concept fully.
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We must improve by PDCA and PDSA, then we must standardize the

process, i.e., we must create a document called process layout in which we
write down the new process steps clearly with control plan, and then
continue the cycle with Do-Check-Act, which means after every PDCA/
PDSA, we must follow SDCA and continue.
!
[a]
[b]
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!
[c]
Figure 7.12
Source: Imai (1997), Chapter 1
THE GOLDEN RULES OF

GEMBA MANAGEMENT
WHEN A PROBLEM / ABNORMALITY ARISES,

GO TO GEMBA FIRST
CHECK THE GEMBUTSU
TAKE TEMPORARY COUNTERMEASURES ON
THE SPOT
FINDE THE ROOT CAUSE
STANDARDIZE TO PREVENT RECURRENCE
Figure 7.13
There is a word Gembutsu in the above diagrams.
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Gembutsu is a Japanese word meaning "real thing" and it is a component

of the so-called "three reals". This is the Japanese mindset teaching that
when there is a problem somewhere, one should get as close to it as
possible before proposing a solution.
By observing the actual process at the actual place, the problem solver is
able to obtain actual data. This effort will allow for a decision to be based
on facts, instead of relying on second hand information collected by others.
In practice, this results in short office meetings, with the brunt of work
being completed on the shop floor.
The three real things are:
1. The actual place of work, shop floor or gemba (pronounced gem-baah)
2. The actual product or gembutsu (pronounced gem-boot-sue)
3. The real facts and data or jujitsu (pronounced jew-jeet-sue)
These three reals are a fundamental element of kaizen.
The following diagram enlists the concerns to be addressed.
QUALITY MANAGEMENT IN
GEMBA
CONCERNS TO BE ADDRESSED
POOR WORKMANSHIP
LACK OF TRAINING - RETRAINING
DIFFICULTIES
VARIABILITIES
INADEQUATE WORKING STANDERDS
LACK OF SELF DISCIPLINE
LACK OF TEAMWORK
LACK OF INVOLVEMENT
COMMUNICATION GAP
Figure 7.14
The following diagram enlists benefits of MUDA elimination:

!
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COST REDUCTION IN GEMBA

MUDA ELIMINATION
IMPROVE QUALITY
IMPROVE PRODUCTIVITY
REDUCE INVENTORY
SHORTEN PRODUCTION LINE
REDUCE MACHINE DOWNTIME
REDUCE SPACE
REDUCE LEAD TIME
Figure 7.15
Case Example:
In MICO Bosch, they perform the two day kaizen It is the best way to:
1. Interact with the workers and motivate them
2. To solve the problems faster
3. Achieve continuous improvements
TWO DAY KAIZEN
IMPROVEMENTS THAT MUST BE

COMPLETED IN TWO DAYS
START WITH CLEAR TARGET

INVOLVES KEY PLAYERS
MORNING SESSION
GO TO GEMBA
DISCUSS AND WORK OUT PLANS
GO BACK TO GEMBA TO CONFIRM
DISCUSS AND FINALISE PLANS
PREPARE JIGS,TOOLS AND INSTALL
VALIDATION AND TRIALS
WRAP UP SESSION
Figure 7.16
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1. A team of experienced people is formed

2. They assemble in a meeting room and take a problem to solve, decide a
clear target/goal to be achieved immediately
3. In the morning session, they decide about the Gemba to be visited
4. They go to Gemba and observe all the MUDA, housekeeping issues
5. They discuss with the workers and setters/supervisors about the work
environment, work related problems, safety/quality issues
6. They note down the issues and decide on immediate/temporary counter
measures
7. Discuss and work out plans in the meeting room
8. Go back to Gemba to confirm whether their actions are worthwhile
9. Discuss and finalize plans
10.Prepare jigs, fixtures, tools and install them
11.Validate the process, take trials
12.Presentation to management about the improvements achieved
All the team members work towards one goal: All the actions must be
completed in two days! THIS MAKES THE BIG DIFFERENCE because
the positive change is appreciated by everyone.
7.5 House of Quality: Quality Function Deployment

Quality Function Deployment, or QFD, is a basic TQM tool, which is a
graphical methodology that systematically develops and unearths
customers stated and unstated needs and expectations. It is also
called as House of Quality. Once these needs and expectations are known,
we can drive them into product development and manufacturing process
development.
QFD is driven by what the customer wants and hence this technique is
often described as deploying the voice of the customer. QFD provides
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marketing advantage because it allows companies to develop products that

are responsive to the needs and expectations of their customers. For doing
this, it is necessary to integrate several key departments within the
company, viz., engineering, manufacturing, marketing etc. In the process
of working as a team to develop a QFD analysis, engineering department
designs and develops a product that is responsive to the market needs and
can be efficiently manufactured.
QFD can also be used to improve existing products by redefining customer
needs.
Let us discuss the following example to make the concept very clear. It is
an example of table setting in a Five Star Restaurant.
Whenever any customer goes to the restaurant, he expects that the table
setting must be attractive in the sense that:
1. The table cloth and the cutlery must be absolutely clean.
2. The cloth, dcor and furniture must be very much elegant.
3. The table layout and cutlery layout must be correctly done.
These are all WHATs (What are the customer expectations?)
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!
Figure 7.17
In the following house of quality, customer requirements WHATs for table
setting are:
1 Clean cloth
Customer assigned Priority 8 out of 10
2 Clean cutlery
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3 Elegant cloth
4 Elegant dcor
5 Elegant furniture
6 Correct layout
7 Correct cutlery
How each WHAT can be achieved?

The restaurant processes are:
1.
2.
3.
4.
5.
6.
7.
8.
Laundry
Dishwashing
Table design
Table layout
Inspection
Budgeting
Purchasing
Training
How are these processes related with Customer requirements (WHATs)?

1. Laundry: Strong relationship with cleanliness of table cloth.
2. Inspection: Strong relationship with cleanliness of table cloth, cutlery,
the table layout and cutlery layout.
3. Dishwashing: Strong relationship with cleanliness of cutlery.
4. Table design: Strong relationship with elegance of the cloth, dcor and
correctness of layout.
5. Table layout: Strong relationship with dcor, correctness of table
layout and cutlery layout.
6. Budgeting: Strong relationship with furniture quality.
7. Purchasing: Strong relationship with dcor.
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8. Training: Strong relationship with dcor, correctness of table layout and

cutlery layout.
Calculating the Importance of Each Process
The strong relationship is denoted by double circle !

and 9 score
points are given to it. The importance of clean table cloth is given
weightage of 8 points by the customer. So, the importance of laundry
is shown as 8 9 = 72. (See the bottom of the first column).
In the same (last but one) row, importance of other processes is also
given.
Calculating the Weight Score Indicating the Attention to be Given
to Customer Requirements
The relationship between the customer requirements and the restaurant
processes is shown by various symbols.
Strong relationship
Medium relationship
score 9
Weak relationship
score 3
score 1
For example in case of customer requirement of clean cloth: (Refer

the first row)
1.
2.
3.
4.
5.
Laundry weight score = 8 9 = 72

Inspection weight score = 8 9 = 72
Budgeting weight score = 8 1 = 8
Training weight score = 8 3 = 24
Total of above = 176 It is shown in total column of the first row.
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In the next column, percentage of this aspect with respect to total

customer requirements is shown. For example, it is 14% in the first row of
clean cloth.
Next three columns show how this aspect compares with the competitors
on the scale of 1-10. For example, 9 in case of this company, 4 in case of
Frankies and 9 in case of Casa Nova, in the first row of clean cloth.
This way, the whole matrix is completed. On the roof of the house of
quality, correlation with individual restaurant processes is denoted by +, +
+ signs.
Conclusion
1. This company has to improve in the aspect of elegant cloth, elegant
furniture and correct cutlery, because customer surveys are
indicating low score on the scale of 1-10; and compared to competitors
also these scores are low.
2. Company has low scores in the other aspects also compared to
competitors scores.
3. Elegant dcor is the aspect having total score of 294 followed by correct
cutlery having score of 232. Maximum attention must be given to these
aspects.
4. Inspection is the most important process having importance of 345
(27%) followed by training having score of 231 (18%).
5. Table layout has a strong positive (++) correlation with inspection and
training.
QFD has several advantages. These include identifying customer needs and
expectations, determining how to meet them, defining quantified goals,
importance of each process in meeting customer requirements, and
amount of attention to be given to each requirement. The benchmarking of
our product or service with respect to those of competitors, as well as
customers perception of our product/service is also known. It is an
amazing exercise which must be done by every entrepreneur.
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7.6 Poka-Yoke
Poka-yoke is a Japanese term that means "mistake-proofing". A poka-yoke
is any mechanism in a lean manufacturing process that helps an equipment
operator avoid (yokeru) mistakes (poka). Its purpose is to eliminate
product defects by preventing, correcting, or drawing attention to human
errors as they occur. The concept was formalized, and the term adopted,
by Shigeo Shingo as part of the Toyota Production System. More broadly,
the term can refer to any behavior-shaping constraint designed into a
process to prevent incorrect operation by the user.
The term poka-yoke was applied by Shigeo Shingo in the 1960s to
industrial processes designed to prevent human errors. Shingo redesigned
a process in which factory workers, while assembling a small switch, would
often forget to insert the required spring under one of the switch buttons.
In the redesigned process, the worker would perform the task in two steps,
first preparing the two required springs and placing them in a placeholder,
then inserting the springs from the placeholder into the switch. When a
spring remained in the placeholder, the workers knew that they had
forgotten to insert it and could correct the mistake effortlessly.
Shingo distinguished between the concepts of inevitable
human mistakes and defects in the production. Defects occur when the
mistakes are allowed to reach the customer. The aim of poka yoke is to
design the process so that mistakes can be detected and corrected
immediately, eliminating defects at the source, i.e.,
1. To eliminate the possibility or opportunity for passing on errors or
making mistakes in a process.
Poka-yoke can be implemented at any step of a manufacturing process
where something can go wrong or an error can be made. For example,
a jig that holds pieces for processing might be modified to only allow pieces
to be held in the correct orientation.
Humans make mistakes (errors) because of
1. Forgetfulness Misunderstanding
2. Lack of experience/skills Lack of concentration
3. Laziness Lack of standards
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4.
5.
6.
7.
Rushing Taking shortcuts

Malicious intent (deliberate action)
Errors (can) lead to defects
Defects are not inevitable and can be eliminated by the use of simple,
low cost methods zero defects
8. Mistake proofing should take over repetitive tasks that depend on
vigilance or memory
!
Figure 7.18
In the above photo, putting the mobile phone (on-charge) inside a shoe
makes it more likely that it will be remembered when going out. The act of
putting the shoes on requires the user to pick up the phone, which could
otherwise be easily forgotten.
A very common poka-yoke is involved every time we purchase fuel for our
automobiles. When unleaded fuel was introduced, there were many
automobiles on the road that still used leaded fuel. In order to prevent
leaded fuel from being placed in unleaded automobiles, the size of the fuel
inlet was changed so that the leaded fuel dispense nozzle would not insert.
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!
Figure 7.19
Again, you can see that error-proofing or poka-yoke attempts to prevent
an error from occurring.
Figure 7.20
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!
Figure 7.21
Figure 7.22
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7.7 Quality Circles

A quality circle is a volunteer group composed of workers (or
even students), usually under the leadership of their supervisor (or an
elected team leader), who are trained to identify, analyze and solve workrelated problems and present their solutions to management in order to
improve the performance of the organization, and motivate and enrich the
work of employees. After getting matured, true quality circles become selfmanaging, having gained the confidence of management.
Quality circles are an alternative to the rigid concept of division of labor,
where workers operate in a more narrow scope and compartmentalized
functions. Typical topics are:
1. Improving occupational safety and health, improving product design,
and improvement in the workplace and manufacturing processes.
2. The term quality circle derives from the concept of PDCA (Plan, Do,
Check, Act) circles developed by Dr. W. Edwards Deming.
Quality circles were first established in Japan in 1962.
Kaoru Ishikawa has been credited with their creation.
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The movement in Japan was coordinated by the Japanese Union of

Scientists and Engineers (JUSE). The first circles were established at the
Nippon Wireless and Telegraph Company but then spread to more than 35
other companies in the first year. By 1978, it was claimed that there were
more than one million quality circles involving some 10 million Japanese
workers. They are now in most East Asian countries; it was recently
claimed that there were more than 20 million quality circles in China.
Quality circles have been implemented even in educational sectors in India,
and QCFI (Quality Circle Forum of India) is promoting such activities.
The following are the objectives of Quality Circles:
1.
To give an opportunity to employees to use their wisdom and creativity
2.
To reduce errors and enhance quality of production
3.
To encourage team spirit and cohesive culture and create harmonious

human relations
4.
To promote job involvement and participation
5.
To increase employee motivation and empowerment
6.
To harness problem solving capability
7.
To build an attitude of problem prevention
8.
To improve communication
9.
To promote personal and leadership development
10. To improve internal housekeeping

11. To improve quality of customer service
12. To facilitate achievement of business goals
13. To contribute to the improvement and development of the organization
14. To respect humanity and build a happy bright workplace which is
meaningful to work in.
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Structure:
1. Ideally, the members of a quality circle should be from the same/similar

work area.
2. Ideal size should be 6 or 7 members.
3. There can be many quality circles depending upon the number of
employees who want to be members and the nature of work handled by
them.
4. Structure of a quality circle: It may be given a name.
a. Facilitator: Manager/section head
b. Leader/deputy leader elected by members
c. Members
5. Responsibilities of the Quality Circle Members:
a.
b.
c.
d.
e.
f.
Attend all possible meetings

Offer suggestions and ideas to the circle in good faith
Participate actively in the group process
Be accountable for the overall team spirit of the circle
Assist leader/deputy leader in circle activities
Take part in management presentations
6. Responsibilities of the facilitator:

a. Demonstrates in support of the management
!183
b.
c.
d.
e.
f.
g.
h.
i.
j.
Is responsible for successful operation of the circle

Renders support and assistance to his circle members
Works closely with steering committee
Trains members by assisting leaders whenever required
Arranges management presentations of his circles
Attends circle meetings
Co-ordinates and monitors all activities
Maintains records and evaluates circle activities
Publicizes the activities
7. Pre-requisites of a successful leader:

a.
b.
c.
d.
e.
f.
g.
Focus on ideas and not on persons

Do homework and plan
Summarize action plan for next meetings
Draw a well thoughtout agenda
Clarify points/issues raised by members
Be open minded
Be sincere and interested in circle activities
8. Problem solving techniques:

a.
b.
c.
d.
e.
Brainstorming
Data collection
Pareto analysis
Cause and effect diagrams
Line graphs
9. Pre-requisites for Quality circle meetings:

a. The meeting should not disturb working of other staff.
b. The facilitator has to provide the necessary facilities for conducting
meetings.
c. The meetings fixed should not interfere with normal work.
d. Conduct of the meetings should be lively so that circle members
are enthusiastic to attend the meeting.
e. Fast changing technology can push the industry out of race.
!184

Activity A
1. Analyze the housekeeping in your own office as well as your house by
5S methodology.
Activity B
Think about a Poka-yoke method to prevent failures due to your
forgetfulness such as:
1. Not taking your books/note books, documents, portfolio etc. to your
college
2. Missing an important appointment/making a telephonic call to your boss
3. Failure of a pen during exams
7.9 Summary
The continuous improvement concept focuses on:
1. Finding shortfalls and sources of variability in administrative processes,
manufacturing processes, and service processes, that can detract from a
quality output
2. And improving the process to eliminate undesirable outputs.
3. Continuous refers to actions which are uninterrupted; Continual
actions, however, need not be uninterrupted.
!185
Reasons for Continual Improvement: (External):

1. Continuously increasing customer expectations
2. Increased demands on reducing costs
3. Increased competition to products in domestic and international market
4. Customer satisfaction is must in any case
Reasons for Continual Improvement: (Internal):
1. Attitudinal change required
2. Removal of mental blocks
3. Understanding that Nobody is perfect
4. Involving all employees is a must
5. There is nothing that cannot be improved further
6. Improvements in small steps
What is WASTE?
1. Waste is anything which does not add value to a product or service.
What is Value adding?
1. Value adding is that part of the work for which the customer is ready to
pay.
2. Customer is not ready to pay for waste.
!186

1. Explain: Ten rules for continuous improvement.
2. What is meant by Seiri?
3. What is Quick changeover technology?
4. Explain PDCA and PDSA cycles. Clarify the difference between them.
5. What is meant by Gembutsu?

1. What is meant by MUDA?
a.
b.
c.
d.
Mood
Mud
Waste
Improvement
2. In PDSA, S denotes:
a.
b.
c.
d.
Severity
Study
Smooth
System
3. If I keep my mobile in my shoes, it is an act of:

a.
b.
c.
d.
Foolishness
FMEA
Poka-yoke
Gemba kaizen
4. Kaoru Ishikawa has been credited with creation of ___________.

a.
b.
c.
d.
Poka-yoke
Gemba kaizen
Gembutsu
Quality circles
!
!187
5. Quality Function deployment is also called as:

a.
b.
c.
d.
House of quality
Customers delight
House of Gemba
Customer function
6. Time and again, my father urges me to get a job. This is an example

of:
a.
b.
c.
d.
Continual action
Continuous action
Interrupted action
Routine activity
7. Avoid littering: collect machine scrap etc regularly and dispose off.
This is:
a.
b.
c.
d.
Seiton
Seiri
Seiso
Shitsuke
8. A jig that holds pieces for processing might be modified to only allow
pieces to be held in the correct orientation. This is an example of:
a.
b.
c.
d.
Muda
Seiton
Poka-yoke
Gemba
9. You may need to decide what the customer wants, which product to
develop, or which process needs improvement first. You have to
perform:
a.
b.
c.
d.
Quality function deployment

Quality policy deployment
Poka-yoke
Gemba kaizen
!188

So, my dear students, after a very much valuable and inspiring chapter of
Continual improvement, now your next destination is cost of poor quality or
cost of quality.
Ultimately, we are doing a business and we must know cost of everything,
in order to improve our profitability.
However, cost of quality has much more meaning than the other costs. It
has a dimension of customer satisfaction. An entrepreneur reduces cost of
quality not merely to improve profitability, but mainly to improve customer
satisfaction.
Juran was one of the first to think about the cost of poor quality.
In process improvement efforts, quality costs or cost of quality is a means
to quantify the total cost of quality related efforts and deficiencies. It was
first described by Armand V. Feigenbaum in a 1956 Harvard Business
Review article.
!189
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
!190
COST OF QUALITY
Chapter 8
COST OF QUALITY
Objectives
Meaning of Quality Cost and its Classification

The concept of Taguchi Loss Function
Structure
8.1
8.2
8.3
8.4
8.5
8.6
8.7
8.8
8.9
Preamble
Definition of Quality Cost
Graph of Quality Level versus Quality Cost
Taguchi Loss Function
Case Examples
Summary
!191
COST OF QUALITY
8.1 Preamble
The Common Misconception about Quality
It is often uneconomical to make quality improvements since it brings
down productivity and increases cost.
The Reality
It is possible to improve quality continuously without reducing productivity
and without increasing cost.
As W.E. Deming says:
Productivity goes up and cost comes down as quality goes up. This fact is
known, BUT IT IS KNOWN ONLY TO A SELECTED FEW.
8.2 Definition of Quality Cost

The expenditure incurred in defect prevention and appraisal activities plus
the losses due to internal and external failures.
Also Defined as: The expenditure incurred by the producer, by the user,
and by the community associated with the product or service quality.
The quality costs are classified into three major groups:
Figure 8.1
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COST OF QUALITY
Cost of Conformance
Any product produced or serviced is done according to some specified
norms. It needs to be checked whether the finished goods and the
completed services conform to the specifications. The costs of this include
prevention costs and appraisal costs.
Prevention Costs
Cost incurred for activities, processes, and infrastructures introduced in
order to prevent or reduce and investigate cause of risk of non-conformity
or failures in the system. This includes cost of:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
Training programs, quality awareness programs

Planning: overall quality plan, inspection plan, reliability plan
Costs incurred in design and development
Costs incurred in quality review
Costs incurred in calibration of test equipments
Calibration and maintenance of product equipments
Supplier quality assurance
Reporting of quality data
Quality circles
Quality manual preparation
Quality pamphlets, booklets
Quality cell-recurring, non-recurring
Activities that set foundation for the future
Appraisal Costs
Costs incurred to determine and ensure conformance with quality
standards. This includes cost of:
1.
2.
3.
4.
Inspection
Over-checking
Auditing
Reminders
Cost of Non-conformance
When the product or service does not conform to norms or specifications,
they are defective.
!
!193
COST OF QUALITY
Internal Failure Costs

This includes cost of:
1.
2.
3.
4.
Rework
Scrap
Design changes during process
Obsolete inventory
External Failure Costs

Cost of correction methods adopted to meet quality standards after
reaching the customers. This includes cost of:
1.
2.
3.
4.
Actual expenditure
Man-hours lost
Warranty costs-replacement costs
Unplanned field service
Cost of Exceeding Requirements

Actual expenditure/cost of unnecessary, unimportant services, or
information, giving details, extra paperwork, huge analytical study,
unrequired customer visits.
Cost of Lost Opportunity
Costs due to loss of customers (both existing and potential)
Costs due to loss of confidence in the customers minds.
Table 8.1: Feigenbaum Defined the Following Quality Cost Areas
Cost Area
Costs of control Prevention
(Costs of
costs
conformance)
Description
Arise from
efforts to keep
defects from
occurring at all
Examples
Quality planning
Statistical process control
Investment in quality-related
information systems
Quality training and
workforce development
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COST OF QUALITY
Appraisal
costs
Arise from
detecting
defects via
inspection,
test, audit
Costs of failure
of control
(Costs of nonconformance)
Internal
failure
costs
Arise from
defects caught
internally and
dealt with by
discarding or
repairing the
defective items
External
failure
costs
Arise from
defects that
actually reach
customers
Product-design verification
Systems development and
management
Test and inspection of
purchased materials
Acceptance testing
Inspection
Testing
Checking labor
Setup for test or inspection
Test and inspection
equipment
Quality audits
Field testing
Scrap
Rework
Material procurement costs
Complaints in warranty
Complaints out of warranty
Product service
Product liability
Product recall
Loss of reputation
The central theme of quality improvement is that larger investments in

prevention drive even larger savings in quality-related failures and
appraisal efforts. Feigenbaum's categorization allows the organization to
verify this for itself. When confronted with mounting numbers of defects,
organizations typically react by throwing more and more people into
inspection roles. But inspection is never completely effective, so appraisal
costs stay high as long as the failure costs stay high. The only way out of
the predicament is to establish the "right" amount of prevention.
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COST OF QUALITY
Once categorized, quality costs can serve as a means to measure, analyze,

budget, and predict.
Variants of the concept of quality costs include cost of poor quality and
categorization based on account type, described by Joseph M. Juran.
Table 8.2
Cost Area
Examples
Tangible costs factory accounts
Tangible costs sales accounts
Materials scrapped or junked
Labor and burden on product scrapped or

junked
Labor, materials, and burden necessary to

effect repairs on salvageable product
Extra operations added because of

presence of defectives
Burden arising from excess production

capacity necessitated by defectives
Excess inspection costs
Investigation of causes of defects
Discount on seconds
Customer complaints
Charges to quality guarantee account
Intangible costs
Delays and stoppages caused by

defectives
Customer goodwill
Loss in morale due to friction between
departments
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COST OF QUALITY
8.3 Graph of Quality Level Versus Quality Cost
!
Figure 8.2
The above graph shows relationship between quality level and cost.
It is also possible that the quality cost curve reduces initially and takes the
least value when the quality conformance reaches 100%. This is expected
in industries following TQM.
We can, therefore, conclude that if TQM implementation is proper, if
automation is done, and if all possible preventive measures have been
taken, then the quality cost will decrease and reach a minimum value and
still it is possible to get 100% quality. It is also possible to continually
reduce the costs of quality.
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COST OF QUALITY
However, what are the real costs of poor quality? The conventional
viewpoints to losses to rework or scrapping products made outside
specifications.
8.4 Taguchi Loss Function

It explains that the implications of poor quality run deeper and include
social costs, and that such costs are a function of quality standards.
!
Taguchi suggests that every process have a target value (i.e., middle of
the tolerance) and that as the product moves away from target value,
there is a loss incurred by society. This loss may involve delay, waste,
scrap, or rework.
Taguchi Loss Function is a statistical method developed by Genichi Taguchi,
a Japanese business statistician that shows how manufacture of each nonperfect part results in a loss for the company. This concept is a landmark in
describing quality and has helped spread the concept of continuous
improvement, and finds relevance in lean manufacturing and Six Sigma.
The Background
Conventional industrial engineering considers quality costs as the cost of
rework or scrap of items manufactured outside specification. Taguchi
considered such private costs to the manufacturers as short-term costs,
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COST OF QUALITY
and introduced a new approach of understanding costs to society owing to

non-conformance with specifications. He held that any item not
manufactured to the exact specification results in some loss to the
customer or the wider community. Such losses come with the customer
needing to make an additional purchase or repairs due to early wear out or
the defect part not interfacing with other parts, and non-optimal utilization
of the product owing to the need to build in safety margins and the like.
The Concept
Taguchis loss function explains that quality does not suddenly plummet
and private and social costs do not rise suddenly when products are not in
conformance to specifications. Instead, the losses to the manufacturer and
the society are a function of the deviance or variability from the target
value or best quality level. The private and social loss is zero at the target
value (i.e., middle of the tolerance), and the losses gradually increase as
the product specifications deviate from the target value.
The three characteristics that shape the definition of Taguchi loss function
are:
1. Nominal, where the best characteristic or target value is the median of
the specified upper and lower acceptable limits and the losses owing to
deviance from the target value rise proportionate to the extent of
deviance on either side of the mean. Here, an example includes the
frequency settings in radio and wireless equipment. For instance, the
equipment not confirming exactly with the set frequency is defective
increases the social costs for repair or replacement.
2. Smaller-the-Better, where the ideal target value or best quality
standard is zero, and the higher the actual value, the higher the private
and social costs. Examples of such instances include heat loss in heat
exchanger, or carbon dioxide emissions. For instance, the more heat lost
by the heat exchanger, the less efficiently it functions, and the higher
the social costs.
3. Larger-the-Better, where the ideal characteristic or best quality
standard is infinity, and the higher the actual value, the better, and the
lower the actual value, the more the private and social costs. Examples
of such instances include maximizing product yield from a process,
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COST OF QUALITY
agricultural output, and the like. For instance, the higher yields indicate
better quality seeds, and lower yields increase the social costs.
Taguchi Loss Function uses include assessing economic loss from a
deviation in quality without having to develop the unique function for each
quality characteristic.
Look at the control chart below.
The Specification Limits are:
USL = 69
LSL = 55
The Control Limits are:
UCL = 63
LCL = 61
Sure, the product fits within the specification limits. The - chart is well
under control, all the values being within the control limits.
However, as you can see the s chart, which fluctuates, meaning that
there is a fluctuating process variation and so, the customer might have to
reset their production machines several times to accommodate the
changes in specifications. Loss!
The loss isn't linear. Taguchi theorized that the loss is proportional to
the square of the distance from the target value.
!200
COST OF QUALITY
Figure 8.3
!201
COST OF QUALITY
8.5 Case Examples

Case Example 1
Here is an example from the automotive industry. One company was
building transmissions for cars in both Japan and America. The American
transmissions had five times the warranty issues.
To determine the problem, five transmissions were selected at random
from both the Japanese factory and the American factory. Then, they took
them apart and measured all of the specifications.
American Transmissions
1. All of the American transmissions had parts that fell within the USL-LSL.
Some measures were a little higher and some a little lower.
Japanese Transmissions
1. When the inspectors measured the Japanese transmissions, they got
worried, because they got the same value on each of the parts on each
of the five transmissions. They began to suspect that their gauges were
incorrect.
2. The Japanese transmissions measured identically on all of the key
specifications. There was no variation to speak of. Their graph had the
measures centered closely on the target.
To t r u l y s e r v e y o u r c u s t o m e r, y o u r p r o c e s s h a s t o b e
both stable and capable. It cannot just be one or the other.
1. Stable It means the control chart is in complete control (no unstable
conditions)
2. Capable It means the histogram fits inside the specification limits
(USL, LSL).
So, what should be your strategy? You have to:
1. Stabilize your process
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COST OF QUALITY
2. Reduce variation
3. Reduce the loss
Stabilizing your process and reducing the variation will, in turn, reduce the
cost of the Taguchi Loss function. This will save you and your customers
time and money (rework, waste, and delay). And customers are smart.
They can tell the difference between two different transmissions and they
can tell the difference in quality between you and your competitors.
Make sure you are in charge of who your customers return to year after
year. Hitting the goal posts is not good enough any more. You have to hit
the target value most of the time. Your customers will love you for it.
Case Example 2
Suppose you are manufacturing green paint. To determine a specification
for the pigment, you must determine both a functional tolerance and
customer loss.
1. The functional tolerance, 0 is a value for every product characteristic
at which 50% of customers view the product as defective (0=10
grams).
2. The customer loss, A0, is the average loss occurring at this point. Your
target is 200g of pigment in each gallon of paint. The average cost to
the consumer, Home Decor, is ` 600 per gallon from returns or adjusting
the pigment.
3. The paint becomes unsatisfactory if it is out of the range (200 grams
+-10 grams).
Calculate the loss imparted to society from a gallon of paint with only 185g
of pigment by Taguchi method.
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COST OF QUALITY
!
This means that if you put 185 grams of pigment instead of 200 +-10
grams, the customer will have a loss of ` 1350.
This figure is a rough approximation of the cost imparted to society from
poor quality.
Case Example 3
Expanding on the first paint example, let us decide what the manufacturing
tolerance should be. The manufacturing tolerance is the economic breakeven point for reworking scrap. Suppose the off-target paint can be
adjusted at the end of the line for ` 60 a gallon. At what pigment level,
should the manufacturer spend the ` 60 to adjust the paint?
The manufacturing tolerance is determined by setting L = ` 60
!204
COST OF QUALITY
As long as the paint is within 200g +- 3.2g of pigment, the factory should
not spend ` 60 to adjust the pigment at the end of the line, because the
loss without the rework will be less than ` 60.
The manufacturing tolerance represents a break-even point between the
manufacturer and the consumer and sets limits for shipping the product.
If the paint manufacturer ships the product from example 1 with 185g of
pigment, they are saving ` 60 of reworking costs but imparting a cost of `
1350 on society. These additional costs will surface through loss of
customer satisfaction and thus brand reputation, loss of market share and
returned products.

Activity A
1. Make a project about the loss suffered by a farmer because of
substandard seeds and low quality insecticide.
.
Activity B
1. Go to a neighboring factory and interview the Production Manager about
their cost of quality.
8.7 Summary
The implementation of TQM is incomplete till one understands the
important role played by cost of quality in the business as well as customer
satisfaction.
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COST OF QUALITY

1. Explain prevention and appraisal costs.
2. Give two examples of warranty failures.
3. What do you understand by Taguchis Loss function?

1. How do Taguchi's methods differ from traditional ways of calculating
losses due to poor quality?
a. They average losses over a 12 month period of time
b. They include not only losses to the manufacturer up to the point of
shipping, but also losses to society
c. They put the losses in Yen instead of Dollars
d. They calculate the cost per product
2. How do you select a tolerance range?
a. Ask your consumers which products they are dissatisfied with
b. Find the break-even point for fixing the product and the cost
imparted to society from not fixing the product
c. Make the tolerance as small as your equipment will allow
d. Use the standard safety factor of 4
3. Taguchi suggests that every process have a _________ value and that
as the product moves away from this value, there is a loss incurred by
society.
a.
b.
c.
d.
Target
Tolerance
Human Skill
Profit
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COST OF QUALITY
4. As W.E. Deming says: Productivity goes up and cost comes down as

quality goes up. This fact is known, BUT IT IS KNOWN ONLY TO
a.
b.
c.
d.
Scientists
A selected few
Engineers
Senior Managers
5. External Failure costs are costs of _________ methods adopted to meet

quality standards after reaching the customers.
a.
b.
c.
d.
Internal
External
Manual skill dependent
Correction
One has to produce a quality product or service which he is able to if he

follows Total Quality Management principles.
However, customer satisfaction is dependent on one more important
parameter, and that is, Reliability.
Is your product or service dependable? Will it give me expected life of
required performance and will it give me value for the money which I have
invested in the product or service?
The customer would not buy the product just because it is a branded one,
just because it looks beautiful, and just because it satisfies all your needs
now. He will buy the product only if he gets assurance that it is reliable.
You will understand this one of the most important topic now.
Just see whether it gives you a feeling of some more accomplishment in
the journey of TQM!
!207
COST OF QUALITY
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
!208
RELIABILITY
Chapter 9
RELIABILITY
Objectives
Meaning, Importance and Calculation of Reliability

Introduction to Bathtub Curve
Structure
9.1
9.2
9.3
9.4
9.5
9.6
9.7
9.8
9.9
9.10
9.11
9.12
9.13
9.14
Preamble
Quality
Reliability
Availability
Maintainability
Safety
Mean Time Between Failures (MTBF)
Mean Time to Failure (MTTF)
Bathtub Curve
Calculation of Reliability An Example
Summary
!209
RELIABILITY
9.1 Preamble
Reliability engineering is an engineering field that deals with the study,
evaluation, and life-cycle management of reliability: the ability of
a system or component to perform its required functions under stated
conditions for a specified period of time. Reliability engineering is a subdiscipline within systems engineering. Reliability is theoretically defined as
the probability of failure, the frequency of failures, or in terms
o f a v a i l a b i l i t y, a p r o b a b i l i t y d e r i v e d f r o m r e l i a b i l i t y a n d
maintainability. Maintainability and maintenance may be defined as a part
of reliability engineering. Reliability plays a key role in cost-effectiveness of
systems.
Case Example 1
In year 1984, I bought my first refrigerator. I paid the bill and asked the
shop owner to give me his contact number. He politely declined to give his
phone number to me. I was taken aback by his arrogance and was upset
with him. Still, I told him calmly that it might be necessary for me to get in
touch with him in case of any problem such as noise, non-performance etc.
He said, You wont have any problem, sir.
I again insisted upon him to give me his contact number.
He repeated, Dont worry, sir. Your fridge will work without any problem. I
have closed my service workshop since workers there did not have any
work.
I was not convinced and came home. To my delight, the fridge worked
faultlessly for 20 years. I changed it not because it stopped working. I
changed it because my children insisted upon me to change that single
door old fridge and get a modern one.
9.2 Quality
When a customer buys a product, he expects to get maximum value for his
money. So, in addition to quality, i.e., Degree to which a set of inherent
characteristics fulfils requirements.
The customer expects the product to be reliable.
!
!210
RELIABILITY
9.3 Reliability
Reliable means dependable. Reliability is defined as:
The probability of a device performing its purpose adequately for the
intended period under the given operating conditions.
1. Probability: How many years/months/days would the device probably
work without failure?
2. Performance: For example, a car should give a particular pick up, high
mileage, lowest running cost etc. The device should perform as per all
the requirements of the customer.
One day, a lady called the refrigerator mechanic to attend a fault in her
fridge. The mechanic checked everything and could not find any fault.
Shocked, he asked the lady as to why she had called him. She said, Yeh
fridge awaz hi nahin karta! (This fridge is too silent. Our earlier one was
making lot of noise. (It was a TV ad).
3. Period: The customers expectation of the life of the device. Some
people would like to have the device running for a lifetime! Some would
like to change it the moment it is outdated, old fashioned, old
technology etc. However, everyone wants the device to work faultlessly
for whatever the time period as per their expectations.
4. Conditions: The customer might expect an imported car to work
without any problem on our Indian roads. He might expect an
equipment to work at Antarctica also. The device must work under all
expected internal and external conditions.
9.4 Availability
Probability that a unit is in operation for a specified time.
Uptime
Availability = - of a system
Uptime + downtime
!211
RELIABILITY
9.5 Maintainability
Probability that a failure will be repaired in specific time after the failure
occurs. For example, maintainability is good if:
1.
2.
3.
4.
Spare parts/components are easily accessible

Design is not complex
Fault is diagnosed in shortest possible time
Experienced mechanics/electricians are available
Maintenance is of various types:

1. Corrective: Repair starts on war footing after the failure has occurred.
2. Preventive: System is prevented from failure. Regular maintenance is
done at regular intervals as per the predesigned schedule.
3. Predictive maintenance: Symptoms or vital signs such as vibrations,
temperatures etc. are looked for. Once found, then the appropriate
maintenance is carried out. Periodic functional checkup is done to check
whether the machine is working satisfactorily or not.
4. Detective maintenance: Some instruments such as fire alarm are not
frequently in use. For such instruments, a periodic checkup is done.
5. Reliability controlled maintenance: The main difference between the
Preventive maintenance and this is that in Preventive maintenance,
equipment is in the focus, whereas in RCM, the function is in focus.
(a) Identification of failure modes so that loss of function can be defined
(b) Prioritization of failure modes based on functional value
(c) Identification of preventive maintenance tasks.
9.6 Safety
Capability of the unit not to cause or to occur an injury to a person for
specified time and condition.
!212
RELIABILITY
9.7 Mean Time between Failures (MTBF)

It is the predicted elapsed time between inherent failures of a system
during operation. MTBF can be calculated as the arithmetic mean (average)
time between failures of a system. The MTBF is typically part of a model
that assumes the failed system is immediately repaired (mean time to
repair, or MTTR), as a part of a renewal process.
!
Figure 9.1
This is in contrast to the mean time to failure (MTTF), which measures
average time to failures with the modeling assumption that the failed
system is not repaired (infinite repair rate).
By referring to the figure above, the MTBF is the sum of the operational
periods divided by the number of observed failures. If the "Down
time" (with space) refers to the start of "downtime" (without space) and
"up time" (with space) refers to the start of "uptime" (without space), the
formula will be:
!
The MTBF is often denoted by the Greek letter , or
MTBF = .
!213
RELIABILITY
9.8 Mean Time to Failure (MTTF)

Heater Number
Time to Failure in Hours
400
470
530
580
600
t1+t2+t3+t4+t5
MTTF = N
400+470+530+580+600
=
5
= 516 hours
This means that, on an average, the heater will work for 516 hours.
9.9 BathTub Curve

It describes a particular form of the hazard function which comprises three
parts:
1. The first part is a decreasing failure rate, known as early failures.
2. The second part is a constant failure rate, known as random failures.
3. The third part is an increasing failure rate, known as wear-out failures.
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RELIABILITY
!
Figure 9.2
The name is derived from the cross-sectional shape of a bathtub.
The bathtub curve is generated by mapping the rate of early "infant
mortality" failures when first introduced, the rate of random failures with
constant failure rate during its "useful life", and finally the rate of "wearout" failures as the product exceeds its design lifetime.
1. In the early life of a product adhering to the bathtub curve, the failure
rate is high but rapidly decreasing as defective products are identified
and discarded, and early sources of potential failure such as handling
and installation error are surmounted.
2. In the mid-life of a productgenerally, once it reaches consumersthe
failure rate is low and constant.
3. In the late life of the product, the failure rate increases, as age and
wear take their toll on the product.
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RELIABILITY
Many consumer products strongly exhibit the bathtub curve, such as

computer processors.
9.10 Calculation of Reliability An Example

Series of tests conducted on total number of items = 2000
In first hour, 650 components failed: 1350 survived.
In second hour, another 350 components failed: 1000 survived.
In third hour, another 210 components failed: 790 survived.
In fourth hour, another 166 components failed: 624 survived.
In fifth hour, another 131 components failed: 493 survived.
In sixth hour, another 103 components failed: 390 survived.
In seventh hour, another 82 components failed: 308 survived.
In eighth hour, another 65 components failed: 243 survived.
In ninth hour, another 120 components failed: 123 survived.
In tenth hour, another 123 components failed: none survived.
Reliability is the ratio of survivors at any given time to the total initial
population.
At the end of first hour, the reliability is:
1350
R(1) = = 0.675
2000
At the end of sixth hour, the reliability is:
390
R(1) = - = 0.195
2000
This can be interpreted as the probability of the component functioning
satisfactorily for at least 6 hours is 0.195.
The probability of failure is then:
1 R (t)
!
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RELIABILITY
where R = Reliability, and t = number of tests, e.g., 1st test = 1

In todays scenario, unless the reliability of the product and service is
assured, survival becomes a big question mark. Every product has to
perform the right way, every time. A small failure of a product/service
leads to loss of the goodwill and credibility of the organization. Hence,
every organization aims at manufacturing/providing reliable product/
service every time. Strategies have to be framed for:
1. Reducing the probability of failure
2. Increasing the availability and reliability

Activity A
1. Go to nearby factory and make a study of infant mortality of any newly
commissioned machine.
.
Activity B
1. Go to nearby factory. Let us assume that there are a number of old
machines of same type. Make a study of their MTBF.
9.12 Summary
In todays scenario, unless the reliability of the product and service is
assured, survival becomes a big question mark. Every product has to
perform the right way, every time. A small failure of a product/service
leads to loss of the goodwill and credibility of the organization. Hence,
every organization aims at manufacturing/providing reliable product/
service every time.
!
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RELIABILITY

1. Explain Bathtub curve in case of an electric motor.
2. Compare maintainability in case of a Maruti Suzuki car and Honda city
car as per your experience.
3. Explain system reliability.
4. Clarify difference between quality and reliability.
5. Explain active parallel redundancy

1. ____________ means probability that an unit is in operation for a
specified time.
a.
b.
c.
d.
Reliability
Maintainability
Run time
Availability
2. ____________ means capability of the unit not to cause or to occur an

injury to a person for specified time and condition.
a.
b.
c.
d.
Security
Safety
Reliability
MTBF
3. ____________ is obtained as 1 Pf where Pf =(Probability of failure)

a.
b.
c.
d.
System
System
System
System
maintainability
reliability
failure
life
4. Some instruments such as fire alarm are not frequently in use. For such
instruments, a periodic checkup is done, which is called as:
!
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RELIABILITY
a.
b.
c.
d.
Detective maintenance
Corrective maintenance
Predictive maintenance
Selective inspection
5. Say true or false:

i. Reliable means dependable
ii. Redundant means out of use
iii. Bathtub curve is the study of reliability of bathroom.
a.
b.
c.
d.
All are true

(i) is true, (ii) and (iii) are false
and (ii) are true, (iii) is false
All are false
In this great journey of TQM, by now, you have visited many important
stations. You have now got full confidence to delight your customer, in fact
to create a thrill in his mind.
The nest important station is: as you have rightly guessed: Customer
Focus.
This is a key performance factor of ant TQM organization.
Are your external customers as well as internal customers happy? Sadly,
many organizations would not be able to answer this question in
affirmative.
However, if your business has to grow continually, customer focus is the
prime factor. If we are not focused to customers, our bottom-line will
always be unsatisfactory. Our business will not have competitive advantage
if we are not focused to the customer.
If there is God in this world, a businessman will see Him in his customer.
I want all of you, my future entrepreneurs, to become 100% customer
focused.
Come on, let us study and master this chapter!
!219
RELIABILITY
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
!220
CUSTOMER FOCUS
Chapter 10
CUSTOMER FOCUS
Objectives
Types and Basic Requirement of Customers

Perception of Customers Towards Quality
Introduction of the Concepts CRM and CIM
Customer Driven Quality Circle
Structure
10.1 Preamble
10.2 Types of Customers
10.3 Six Basic Requirements of Customers
10.4 Customers Perception of Quality
10.5 Customer Driven Quality Cycle
10.6 Customer Relationship Management (CRM)
10.7 Customer Involvement Management (CIM)
10.8 Measuring Customer Satisfaction
10.9 Customer Survey
10.11 Summary
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CUSTOMER FOCUS
10.1 Preamble
Customer is defined as an organization or a person that receives a
product.
Further, ISO 9000:2005 has defined Customer satisfaction as:
Customers perception of the degree to which the customers
requirements have been fulfilled.
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CUSTOMER FOCUS
Robert Bosch Visiting Customers

It has always been an unbearable thought to me that someone could
inspect one of my products and find it inferior in any way. For that reason,
I have constantly tried to produce products which withstand the closest
scrutiny products which prove themselves superior in every respect.
Robert Bosch
The individual who buys the products or services of any organization is the
most important person. Without a buyer, the whole manufacturing process
becomes meaningless. Hence, every organization must focus on:
1.
2.
3.
4.
Retaining existing customers

Making them happy, delighted
Attracting more customers
Making continual improvements in design and processes in order to
satisfy their ever increasing needs and expectations including low price
and high reliability
Even if one factor is neglected, the organizations stand to lose heavily. The
most coveted Baldrige Quality Award stresses on customer related issues.
Customer is said to be the king in any business transactions. He needs to
be treated with dignity. Satisfying or delighting all the customers is not an
easy task. There are many types of customers in the market. However
difficult it may be, the business warrants customer focus.
10.2 Types of Customers

Customer Type 1
1. A customer who does not know what he wants; and
2. Does not know that he does not know what he wants
Be gentle with them.
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CUSTOMER FOCUS
!
Figure 10.1
Customer Type 2
1. A customer who does not know what he wants; and
2. He knows that he does not know what he wants
Teaching and training them is required.
Customer Type 3
1. A customer who knows what he wants; and
2. He does not know that he knows what he wants
Attractive, stunning advertisements are needed for these customers.
Customer Type 4
1. A customer who knows what he wants; and
2. He knows that he knows what he wants
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CUSTOMER FOCUS
These customers of type 4 are masters of themselves. They will be the

demanding types. Large percentage of customers falls in this category. The
success of quality mainly depends on making this category of people
satisfied.
Should all the customers be treated equally? Yes. However, it is also a wise
approach to concentrate on vital few customers, 20% who hold 80% of
market share.
10.3 Six basic requirements of customers

They require all these needs to be met.
1.
2.
3.
4.
5.
6.
High levels of quality and reliability

High degree of flexibility
High levels of service
Low costs
Quick response (speed)
Consistency
10.4 Customers perception of quality

It is essential to understand the customers perception of quality. Since the
customers needs, values and expectations are constantly changing, and
they are becoming more demanding, there is no acceptable quality level
for the customers. This means that there is a need for continuous
improvement of quality to meet ever changing customer expectations.
Survey conducted by the American Society for Quality on end-user
perceptions of important factors that influenced purchase showed the
following ranking:
1.
2.
3.
4.
5.
6.
7.
Performance
Features
Service
Warranty
Price
Reputation/brand image
Availability, reliability and maintainability
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CUSTOMER FOCUS
Price is an indicator of value of a product or a service to the customer.

Nowadays, customers are willing to pay a higher price to obtain a higher
value for money. However, the customers perception of value varies from
customer to customer.
Total customer satisfaction is based on the entire experience with the
organization, not just the product alone. Customers often spread their bad
experience with product or service must faster than their good
experiences.
The first test of the firms operating system is the ability of the firm to
supply customers with products and services they actually want, in the
quantities desired and at the time required. If a firm is not prepared to do
this, another firm will oblige its customers.
Demand is a reflection of the ability of the products to provide value to
customers. An important aspect of designing quality products is giving
people what they want. While listening to the customer is an important
part of the manufacturing/design link, it is closely associated with
marketing. Finding out what customer wants has the following steps:
1.
2.
3.
4.
Obtaining data
Characterizing customer needs
Prioritizing customer needs
Linking needs to design.
10.5 Customer driven quality cycle
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CUSTOMER FOCUS
Perceived quality = Actual quality minus Expected quality
!
Figure 10.2
In todays world, each company has to keep on making efforts to maintain
its competitive advantage. As the globalization continues, it is becoming a
more and more difficult task. Product exclusiveness is a very complex task,
and still it does not guarantee immediate market success. So, customer
service is a tool used by many companies to gain significant competitive
advantage.
10.6 Customer relationship Management (CRM)

A company builds its customer loyalty by developing trust and effectively
managing the interactions and interrelationships with customers through
customer contact employees. They are the people whose main
responsibilities bring them in regular contact with customers in person, by
telephone or through other means. These employees must be carefully
selected, extensively trained and empowered to meet and exceed customer
expectations.
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CUSTOMER FOCUS
Customer relationship Management is defined as:

Similar to local grocery stores, where the owner has good understanding of
the needs of the individual customers, and long-term relationships are
established, CRM is the concept of establishing such a relationship in the
big corporate world using modern technology including databases and
communication technologies.
CRM is a business strategy to select and manage customers to optimize
long-term value. It requires customer-centric business philosophy and
culture to support effective marketing, sales, and service processes. CRM
applications can enable effective customer relationship management
provided that the enterprise has right leadership, strategy and culture.
Excellent Customer Relationship Management depends on four aspects:
1. Commitment to customers: Companies that
their products make strong commitments to
commitments address the main concerns of
communicated clearly and simply to customers,
believe in the quality of

their customers. These
the customers and are
including warranty.
2. Customer focused service standards: These are measurable

performance levels or expectations that define the quality of customer
contact. Customer needs and expectations form the basis of these
standards.
3. Training and empowerment: Good Customer Relationship
Management depends on the quality of training of customer contact
employees.
4. Effective complaint management: Despite all efforts, every business
experiences unhappy customers. Effective resolution of complaints
increase customer loyalty and retention.
CRM is commonly defined in two broad categories:
Operational CRM: It refers to those products, services and operational
capabilities that enable an organization to customer care contact centers,
websites etc.
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CUSTOMER FOCUS
Analytical CRM: Strategies and tools that drive customer-centric business

decisions.
1. Marketing automation: It generates personalization, profiling,
telemarketing, e-mail marketing and campaign management projects.
2. Sales automation: It includes campaign management, sales
configuration, call management, contact management, ad management
and sales force automation and account and lead management systems.
Systems that put sales representatives directly in touch with customers
at the point of sale.
3. Service fulfillment: Ability to serve existing customers. E-mail
response management, interactive voice response etc.
4. Customer self-service: Web self-service, search, interactive chat, email, voice over IP, call me capabilities, conferencing.
5. E commerce: Capabilities such as shopping, marketplace, transaction
and payment processing, and e-commerce security.
The pre-requisites of CRM are as follows:
1. Customer: Identifying the kind of customers the company wants, based
on existing and forthcoming business models, and corporate mission.
This should specially address the strategies from mass production
make to stock to make to order.
2. Channel: Selecting the most appropriate and effective channels for
reaching these customers.
3. Brand: Clearly understanding how all interaction with customers would
contribute to companys brand value.
Determining the most appropriate capabilities for supporting

interaction points and channels.
Clear understanding of business rules at all levels. If a company wants

the most profitable and high volume customers to be serviced by
experts, the business rules should clearly define the various
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CUSTOMER FOCUS
criteria. A customer based company must align its compensation,

budgeting and incentives according to a customer-centric model.
10.7 Customer Involvement Management (CIM)

It is an approach that takes the customer orientation one step further
than Customer Relationship Management. CIM is about identifying and
developing possibilities to involve customers in the business and product
development process, such as design, marketing, sales, customer service,
etc. The degree of involvement can be as far as to make the customer a
part of the product, experience and delivery.
1. Within CIM, the product is regarded to be a subset in what meets the
customer's need of identification, problem solving and consumption. The
possibility to influence the design and the consumption itself is assumed
to be of great importance for the customers buying decision and loyalty.
2. One example of a company that uses CIM is Nike. With the
concept NikeiD, they let the customers design their own sport shoes.
3. More recently companies have started to build Web portals, in order to
involve their customer in the idea generation, selection, development
and commercialization phase of their innovation process.
10.8 Measuring customer Satisfaction

Customer feedback is vital to business. Through customer feedback, a
company learns how satisfied its customers are with its products and
services, and also about the competitors products and services. Face-toface interviews can generate a significant amount of qualitative
information.
Information from customers can be obtained in many ways. Some of the
tools/sources used for gathering information from customers are:
1.
2.
3.
4.
5.
Surveys
Phone calls
Complaint reports
Trade trials
Customer audit
!
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CUSTOMER FOCUS
6. Sales force
7. Consultants
Sample Customer Satisfaction Questionnaire
We are constantly striving to provide a good food service. This survey is
part of the process. Please help us to do this by completing this
questionnaire.
This section is about the food in the staff restaurant. Please tick the
appropriate boxes and add your comments where relevant.
1. How many times do you usually eat in the staff restaurant?
More than three times a week
Up to three times a week
Once a week
Hardly ever (Please specify, why)
.
.
2. When you eat in the staff restaurant, what type of food do you normally
choose? (Tick each one as appropriate)
Starter
Vegetables
Hot main course
Fried food
Vegetarian main course
Salads
Other (Please specify)
Desserts
Fresh fruit
Sandwiches
.
.
!231
CUSTOMER FOCUS
3. Thinking about value for money, how would you describe the food in
general?
Good value for money
Bad
Reasonable
(Please give reasons)
.
.
4. How would you describe the variety of foods on offer?
Excellent
Good
Fair
Poor
(Please give reasons)
.
.
5. What improvements, if any, would you like to see in the variety of foods
on offer?
.
.
6. If the following were introduced in the staff restaurant, how likely would
you be to try them?
Very likely Quite likely Quite unlikely Very unlikely
Low-fat spread
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CUSTOMER FOCUS
Low-fat yoghurt
Frozen yoghurt
Fresh fruit
Exotic varieties of fresh fruit
Different types of bread e.g.,
wholemeal)
Semi-skimmed milk
Jacket potatoes with fillings
vegetarian choices
A wider range of vegetarian
meals
A pasta bar
A self-service salad bar
A sandwich bar
A yoghurt bar
7. Are you concerned about the types of food you eat (i.e., do you consider
whether they are healthy for you?
Most of the time
Sometimes
Never
8. Would you like more information about

Yes
No
The ingredients used in our dishes?

How our dishes are prepared and cooked?
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CUSTOMER FOCUS
This section is about the restaurant environment and service.

Source: Langley et al. (1996)
9. Please tick as appropriate
Most of the time
Some of the time
Never
I have to queue for a long time

The restaurant is very clean
The cutlery is clean
The portion sizes are about right
The staff are helpful
The staff are well-presented
The general service is good
I can find a seat
10.Are there any other comments you would like to make:

about the breakfast service?
.
about the lunch service?
.
.
.
generally?
!234
CUSTOMER FOCUS
.
.
.
.
Please supply the following details about yourself:
Age:
under 16
16-34
Sex:
male
female
Type of work: managerial
administrative
35-54
55 and
over
clerical
manual
other (Please specify)
.
.
.
.
Thank you for completing this questionnaire. Results will be treated in
confidence. Please give your name and a contact department/number if
you would like us to follow up your comments.
Name .
Contact
department
Case Example
Customers decisions are mostly controlled by perception. There can be a
gap between what is perceived to be good and what is actually important
to the customer.
Many a times, customer survey reveals that factors in the top left quadrant
are significant. Organizations attempt to focus on these factors, without
realizing that these attributes can give only short-term dividends.Attributes
in the top right quadrant need to be focused first. Some important factors,
critical ones, have very poor perception among the customers.
!
!235
CUSTOMER FOCUS
!
In a survey conducted to get the customers feedback on different domestic
refrigerators, the finding was alarming:
1. Factors perceived by the customers as quality indicators were:
(a) Low price
(b) Longer guarantee period
(c) Less noise
2. Important factors that determine the quality of refrigerators such as:
(a) Energy efficiency ratio
(b) Environment friendliness
(c) Safety
were not there in the top right quadrant, i.e., in the priority list of
customers.
10.9 Customer Survey

Market research can be done to get the voice of the customer. The
following forms of market research are normally used:
Exploratory approach: to discover ideas and insights
Conclusive research: to evaluate alternate courses of action
Performance research: to monitor performance of critical factors
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CUSTOMER FOCUS
Having understood the need, method and models of customer focus, it is

worth analyzing the change required in the conventional organizations. In
quality-oriented industries, focus is mainly on process perfection. Every
possible effort is taken to reduce the price, increase accuracy and reduce
the cycle time of the product. Nothing was wrong in it. But the Japanese
always believed in customer orientation rather than process orientation. It
paid them rich dividends.

Activity A
1. Go to a nearby mall and interview some customers. Find out what their
needs are, whether their needs are getting fulfilled and to what extent.
.
Activity B
1. Go to either a local five star or a four star hotel and look for their
customer satisfaction survey form. Get it filled by a customer there.
10.11 Summary
It is essential to understand the customers perception of quality. Since the
customers needs, values and expectations are constantly changing, and
they are becoming more demanding, there is no acceptable quality level
for the customers. This means that there is a need for continuous
improvement of quality to meet ever changing customer expectations.
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CUSTOMER FOCUS

1. What was the policy of Mr. Robert Bosch?
2. What do you understand by customer type 3?
3. What is the meaning of perception? Explain in five sentences.
4. Explain CRM and CIM.
5. Explain exploratory approach of market research.

1. A customer who does not know what he wants; and does not know that
he does not know what he wants is:
a.
b.
c.
d.
Customer
Customer
Customer
Customer
type
type
type
type
1
2
3
4
2. ___________ is about identifying and developing possibilities to involve

customers in the business and product development process.
a.
b.
c.
d.
CRM
CIM
CIP
CID
3. Market research can be done to get the ___________ of the customer.

a.
b.
c.
d.
Money
Comments
Views
Voice
4. Information from customers can be obtained in many ways. One of the

ways is:
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CUSTOMER FOCUS
a.
b.
c.
d.
Complaint reports
FIRs
Police complaint
Police investigation
5. Every organization must focus on:

a.
b.
c.
d.
Retaining existing customers

Getting new customers
Delighting all customers
All of the above
Now, my dear students, after your have captured the customer focus, your
next destination is Suppliers Teaming.
Yes, almost everyone forgets the valuable contribution of suppliers in their
business.
We do all sorts of activities but ultimately are not successful because we
have not considered suppliers contribution as MAJOR one in our business.
Without the help of suppliers, one has to completely forget the
achievement in TQM.
Their teaming with all our employees is a mere must and so my upcoming
entrepreneurs.
Please do not do the mistake of not including suppliers in your teams.
After reading the next chapter, you are on the way to become experts in
TQM. I promise.
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CUSTOMER FOCUS
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
!240
SUPPLIER TEAMING
Chapter 11
SUPPLIER TEAMING
Objectives
Importance of Customer and Supplier Relationship

Involvement of Suppliers in TQM Process
Role of Supplier Teaming
Structure
11.1
11.2
11.3
11.4
11.5
11.6
11.7
Customer/Supplier Chain
Involvement of Suppliers
Supplier Teaming
Summary
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SUPPLIER TEAMING
11.1 Customer/supplier Chain
!
Figure 11.1
Many people forget that even if a quality improvement program could
make everything in a manufacturing facility perfect, more than half the
work would still be ignored. The missing key ingredient that many of us fail
to initially consider is the Supplier Base, that means, the companies that
sell goods and services to us.
Most manufacturing companies spend more than half their money on
purchased parts and services. Some companies have 80% of their costs
due to suppliers of goods and services. What does this mean to an
organization that wants to implement TQM? Suppliers simply form too big a
piece of the pie. Organizations have to recognize that in order to
implement the TQM successfully, they have to help their suppliers also to
be successful. Ford and IBM take the challenge so seriously that they
advertize their success in helping their suppliers attain world-class product
quality. Ford and IBM customers/potential customers realized that Ford and
IBM are serious about supplier quality and by extension of the logic,
serious about their own quality.
11.2 Involvement of Suppliers

Suppliers simply have to be included in the TQM process as follows:
1. Effectively communicating with the suppliers:
(a) That buying organization expects all its requirements to be met
(b) Any problems/defects in the supplies, need to rework
(c) Quality forums to review requirements
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SUPPLIER TEAMING
2. Making suppliers as the part of the development process for both

product and process design, and part of the continuous improvement
process: Most of the product development efforts, quality problem
resolutions, continuous improvement projects would be influenced by
components and services supplied by the suppliers. It is frequently
observed that companies attempt product development efforts, quality
problem resolutions, and continuous improvement projects without
involving suppliers.
It is strongly recommended that the suppliers have to be included in the

development programs, when attacking problems, and when attempting
to formulate and meet continuous improvement objectives.
3. Focusing on suppliers cost structures rather than their prices.
4. Supplier cost modeling to help supplier prices down and high quality.
Cost information has to be obtained gradually. Once this is done,
company helps the supplier to see where these true costs are and what
could be done to control these costs.
5. Emphasizing long-term relationships with fewer suppliers: Just
for saving a few rupees, some companies switch from one supplier to
other, which is not a good quality perspective. We must rely on fewer
suppliers and establish long-term relationships with them.
6. Objectively evaluating supplier performance and selecting suppliers
based on the results of these evaluations. The factors such as quality
management system, delivery performance, quality performance, cost
and technology are evaluated objectively.
7. Supplier surveys: A customers team is visiting the suppliers facility to
observe his system, equipments, workforce, quality assurance,
engineering, calibration systems, and other factors relevant to quality.
However, the real proof of suppliers ability to deliver quality
components is his track record. Just because the supplier does well on
survey, he need not be a good supplier.
8. Objectivity: When the production line stops, and the cause appears to
be a non-performing component from a supplier, everybody blames him.
It is tough to be objective. When the supplier is summoned for giving an
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SUPPLIER TEAMING
explanation, he proves that the customer had used the component

wrongly or had not inspected it properly. As Deming teaches, we must
look for solutions rather than blaming somebody. Philips Crosby teaches
that half of all the suppliers problems are ultimately found to be due to
customers fault or are customer-oriented. Sometimes wrong
requirements are provided to the supplier, who meets these
requirements, and finally the component does not work in the
customers product.
At Bosch, one supplier was given an order for printing Purchase Order
books, and was supplied with an artwork for the logo. The supplier printed
the books and submitted them in time. To his shock, the books were
rejected because of the faulty logo. The poor supplier cried but the
purchase department said that the logo is of old design, so cannot be
accepted.
11.3 Supplier Teaming
Figure 11.2
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SUPPLIER TEAMING
For successful internal customer/supplier relationship, three basic

questions to be asked to internal customers are:
1. What do you need from me?
2. What do you do with my output?
3. Are there any gaps between what you need and what you get?
Each department must determine what activities are important to both
external and internal customers and manage quality at each and every
step of the supplier/customer chain. Requirements of external customers
and also the requirements/expectations of each of the internal customers
must be documented.
The supplier and customer have co-operative relationship which is also
known as sub-contractor network and suppliers are referred to as coproducers. Sensitive information, assistance in reducing costs and
improving quality and even financing are often shared by customers and
suppliers.
Purchasing department develop long-term relationships with a few
suppliers rather than short-term relationships with many suppliers.
Although price is important, delivery schedules product quality and mutual
trust and co-operation become the primary basis for the selection of
suppliers.
Suppliers are located near the buying firms factory or clustered together at
some distance. This will keep the lead times shorter and more reliable.
Material is delivered in small standard size containers in exact quantities.
Delivered material by the suppliers is inspected properly by the suppliers
and is of good quality.
In modern approach, the buyer-seller relationships are working in
collaborative mode. They have realized that the competition is between
value chains, and not between members of a value chain.
The collaborative relationships have the following characteristics:
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SUPPLIER TEAMING
1. A compatibility of interests
2. Mutual need
3. A willingness to be open
4. A willingness to share information and benefits resulting from the
relationship
5. Trust
In the modern supply management approach, cross-functional teams
are used to meet specific stated objectives such as new product
development or the negotiations of all terms and conditions of a purchase
agreement. The responsibilities of the cross-functional teams include
material requirement review, development of specifications, make or buy
analysis, standardization of materials, determination of inventory levels,
determination of quality requirements, negotiation of price and terms and
conditions of supply, supplier selection, joint problem solving with
suppliers, monitoring the suppliers and analyzing their performance,
communication of changes in specifications etc.
Supply management professional must identify the appropriate type of
relationship. This team should be led by a leader having technical expertise
and leadership qualities,communication and team skills. The task involves
great challenges and great rewards such as job satisfaction and attractive
compensation.
Strategic Sourcing
It is defined as a systematic process that directs supply managers to plan,
manage and develop the supply base in line with the firms strategic
objectives. Strategic sourcing is the application of current best practices to
achieve the full potential of integrating suppliers into the long-term
business process. It is a core process within the larger function of supply
chain management. Strategic sourcing identifies new materials and
technologies and the activities of competitors.
It involves a disciplined approach which improves the value the buyers
receive from suppliers. The four principles which differentiate strategic
sourcing from traditional purchasing are:
!246
SUPPLIER TEAMING
1. Defining the total value of relationship

2. Developing solutions based on a deep understanding of the economies
of the supplier and the dynamics of the business
3. Optimizing the economic relationship
4. Embedding the required changes so that the buyer achieves not only
the measurable performance improvement in short term but continuous
improvement on a long term.
A four step implementation process is adopted by the cross-functional
team during the development of a strategic sourcing project. These steps
are:
1. Research the industry economics and dynamics of the commodity
assigned to the team.
2. Evaluate sourcing strategies and capabilities of suppliers
3. Structure the supply relationship jointly with suppliers and develop
action plans to build the required infrastructure
4. Implement the plan and organize for continuous improvement.

Activity A
1. Go to the nearby industrial area and interview some suppliers of major
industries such as Tata, Mahindra, and Maruti etc. and find out how they
are treated by their customers.
!247
SUPPLIER TEAMING
Activity B
1. If you become a supplier of Maruti Suzuki, list your expectations from
your customer.
11.5 Summary
Organizations have to recognize that in order to implement the TQM
successfully, they have to help their suppliers also to be successful.
Suppliers simply have to be included in the TQM process.
Each department must determine what activities are important to both
external and internal customers and manage quality at each and every
step of the supplier/customer chain.

1. Explain the importance of emphasizing long-term relationships with
fewer suppliers.
2. Explain the term Objectivity in case of suppliers.
3. What do you understand by Supplier cost modeling?
4. Explain the role of purchasing department.
5. Explain the importance of effectively communicating with the suppliers.
!248
SUPPLIER TEAMING

1. Although __________ is important, delivery schedules, product quality,
mutual trust and co-operation become the primary basis for the
selection of suppliers.
a.
b.
c.
d.
Price
Relationship
Company
Supplier
2. A customers team is visiting the suppliers facility to observe his

system, equipments, workforce, quality assurance, engineering,
calibration systems, and other factors relevant to quality. It is called as:
a.
b.
c.
d.
Audit
Supplier survey
Routine checkup
Periodic inspection
3. Most manufacturing companies spend more than half their money on

purchased parts and services. Some companies have _____ % of their
costs due to suppliers of goods and services.
a.
b.
c.
d.
1
2
10
80
4. Ford and IBM customers/potential customers realized that Ford and IBM
are serious about __________ quality and by extension of the logic,
serious about their own quality.
a.
b.
c.
d.
Supplier
Internal
External
local
5. We have to make suppliers as the part of the __________ process.

a.
b.
c.
d.
Development
Production
Service
Customer
!
!249
SUPPLIER TEAMING

After having knowledge of contribution of suppliers in our business, how
can we forget our own employees, who also are our internal customers?
The foundation of TQM is strong only if your employees are fully involved,
motivated and happy and they feel that they are the owners of the
business.
Ownership: Give employees responsibility for planning and conducting the
activities, for analyzing their own data, and for designing check lists.
Leadership: Set an example. Make sure, you, personally take necessary
steps to prevent defects.
Commitment: Work to get commitment to the idea that quality and
customer is number one priority for every one of your employees.
Goals: Set clear and achievable goals.
Competence: Train your employees so much that they are not only
qualified and experienced but also they can do every job themselves on
their own.
Feedback: Appreciate those employees who themselves prevent defects
and delight customers.
Involvement: Use every opportunity to encourage employees to play an
active role.
Empowerment: Empower them to take decisions and learn by their
mistakes.
Responsiveness: Make sure that you respond the employees needs
promptly.
Persistence and perseverance: Look after your employees every day, so
that they always improve their performance.
Come one, come all, let us master this part of TQM to become masters of
our business.
!250
SUPPLIER TEAMING
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
!251
PEOPLE: TOTAL EMPLOYEE INVOLVEMENT
Chapter 12
Objectives
Importance of people
One of the most important aspect of TQM, i.e., Total Employee
involvement
Structure
12.1 Human Factor
12.2 Employee Involvement
12.3 Top Management Commitment
12.4 Leadership
12.5 Change Management
12.6 Motivational Strategies
12.7 Team Building
12.8 Your Emotional Bank Balance
12.9 Implementation of Decision by Consensus
12.11 Summary
!252
12.1 Human factor

Human factor is very important in implementation of any process or
principle. It is all the more important in Quality Management. Organization
consists of a number of people working for a purpose. Each and every
employee and department has a role to play. Everybodys role is important.
Organization becomes most effective when all the employees and all the
departments work together harmoniously towards common goal and
company objectives.
The issues are:
1.
2.
3.
4.
5.
How
How
How
How
How
do
do
do
do
do
we
we
we
we
we
get everybody to work together

maintain their involvement
make them contribute their best
create satisfaction in them
improve continuously
The beliefs are:

1.
2.
3.
4.
5.
6.
Employees are not just the resources, they are the very purpose
Company hires the total man, not just hands
Problems are with system and not with people
People will be able to improve systems and solve problems
Aim is to utilize full potential of all the employees
Total employee involvement is essential for customer satisfaction
People Orientation
From
To
Individual
Team
Managing
Involving and leading
Delegation
Participation and consensus
Control
Empowerment
Problem management
Problem solving
Traditional pyramid structure
Flattened structure
Figure 12.1
!253
Elements of Employee Involvement
Problem solving at the lowest level

Meet conditions for empowerment
Team building
Revised organisational structure
Value-Action-Measurement-Reward
Figure 12.2
Problems are Best Solved at the Lowest Level
Most timely
Lowest cost
Solution at the source of problem
Shortest path of communication
Data not distorted
Best for prevention in future
Least political involvement
Provide direct satisfaction
Figure 12.3
12.2 Employee Involvement
!254
Total quality management needs higher levels of employee involvement. It

refers to any activity by which employees participate in work-related
decisions and improvement activities with the objective of tapping the
creative energies of all employees and improving their motivation. The
range of activities is:
1.
2.
3.
4.
Sharing of information
Providing input on work-related issues
Making suggestions
Self-directed responsibilities such as setting goals, making business
decisions and solving problems often in cross-functional teams.
Employee involvement should begin with a personal commitment to quality.

The employees who accept and commit to quality philosophy are more apt
to learn quality tools and techniques and use them in their daily work. As
the employees begin to see the benefits of commitment to quality, they will
be more willing to work in teams. This team interaction, in turn, reinforces
personal commitment, driving a never ending cycle of improvement.
Employee involvement also depends on:
1.
2.
3.
4.
The amount and type of information shared with employee

Training
Compensation and rewards
Empowerment practices of the firm
Thus, the HRM practices must be designed to support and facilitate

employee involvement.
Suggestion Schemes
This is one of the easiest ways to involve employees on an individual basis.
An employee suggestion scheme is a management tool for submission,
evaluation and implementation of an employees idea to save cost, improve
quality, safety, process etc. Companies reward employees for implemented
suggestions.
Empowerment
It means giving people authority to make decisions on what they feel is
right, have control over their work, take risks and learn from mistakes.
!255
Empowerment requires a sincere belief and trust in people. At Motorola,

sales representatives have authority to replace defective products up to six
years after purchase. This is a decision which earlier required top
management approval.
Empowerment builds confidence in people, generates commitment and
pride, better experience and opportunity to advance their careers.
Training and Education
Companies committed to TQM have to invest heavily in this area. The
leaders in quality Deming, Juran, Crosby actively promoted training and
education. It includes:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
Quality awareness
Leadership
Project management
Communications
Teamwork
Problem solving
Interpreting and using data
Meeting customer requirements
Process analysis
Process simplification
Waste reduction
Cycle time reduction
Error proofing
Employee efficiency and effectiveness
Safety
Other factors influencing the employee involvement are

1.
2.
3.
4.
5.
Compensation and recognition

Health, safety and employee support services
Career development
Performance appraisal
Measuring employee satisfaction and HRM effectiveness
!256
12.3 Top Management Commitment

The various factors that contribute to the success of Quality Management
practices are:
1.
2.
3.
4.
5.
Involvement/interest of EMPLOYERS
Training on quality practices
Top management commitment
Conducive work culture
Facilities for implementing quality practices
Among the above five factors, the absence of top management

commitment will cause failure.
Even if any other factor is missing, then there will be drastic reduction in
efficiency of implementation.
Hence, it is absolutely necessary to ensure top management commitment.
Every top management needs greater returns on investment. So, since
implementation of quality management principles will bring greater
returns, the top management will be naturally interested in it.
But more than just interest, what is needed is wholehearted
commitment.
1. The CEO will have to initiate quality related activities in the
organisation.
2. He has to allocate enough funds for these activities.
3. He has to arrange training on quality management principles to
everyone in the organisation including him.
4. In every meeting, he has to talk about quality and express his personal
commitment.
5. He has to initiate an award scheme for quality work.
6. CEO himself will follow quality practices.
!257
7. He should get involved in day-to-day quality activities.

8. He should avoid trusting only a few people and expect them to initiate
quality activities.
9. He should avoid putting other factors such as return on investment,
productivity, profitability etc. above the quality initiatives.
10.He has to enforce the quality activities on everyone.
11.Doing things that will produce definite results is also a mark of
commitment.
12.4 Leadership
!
Anyone who occupies a top level chair need not be necessarily a leader. It
was believed that leader has to be born. But nowadays it has been proved
that a leader can be made. A leader should possess certain qualities which
are essential for leadership.
1. Leadership mean doing right things while management is doing things
right.
2. Efficiency is the main criteria for a manager, while effectiveness is the
criteria for a leader.
!258
3. Leadership is influencing the people so that all of them do the right

things, right way at the right time, willingly and on their own, so that
the organization grows and the purpose is fulfilled.
4. A leader has the responsibility of leading teams working in a complacent
and hostile world and disturbances are on the rise. He has to be highly
creative to be fruitful as a leader.
5. It cant be expected that the leader will be charismatic. Unless people
are convinced, they wont fall in line with the leader. Hence, peoplebuilding is a prime area wherein leaders have to excel. He has to
improve their self-esteem and self-worth.
6. Then he has to train them to work as a team.
7. Then using the team, he has to achieve the targets.
8. He has to excel in conflict resolution and crisis management.
9. Leading is a dynamic process, requiring constant thinking on
appropriateness of the process.
10.Leader should have cool temperament, maturity, endurance, tact,
decisiveness and integrity.
11.He must avoid forcing, dominating, bowing down, falling at others feet
to get things done.
12.Integrity: Leader should have moral values and should hold on to the
responsibility even during moments of crisis.
13.Leader should feel secure, so that he can hold on to the organization at
all times.
14.Mark of a leader is his capacity to empower people and achieve the
targets.
Twelve Guidelines for Effective Leadership
!259
1. Give priority attention to external and internal customers and their

needs
2. Empower rather than control the subordinates
3. Emphasize improvement rather than maintenance
4. Emphasize prevention rather than cure
5. Encourage collaboration rather than competition
6. Train and coach rather than direct and supervise
7. Learn from problems
8. Continually improve communications
9. Continually demonstrate commitment to quality
10.Choose suppliers on the basis of quality, not price
11.Establish organizational systems to support quality effort
12.Encourage and recognize team effort
Commanding and Controlling in Leadership
For effective controlling:
1. Define clear-cut objectives for every job
2. Make the people involved to understand the objectives, which should be
in writing
3. Give them instructions on what to do and how to do
4. Assess the progress
5. Assess the performance
6. Informal meetings to let them know their progress and corrective
actions to be taken
7. Curb any disturbance
8. Analyze and find out the reasons for failure, if any.
9. Redefine the objectives, dos and donts and appraisal method.
!
!260
For effective commanding:

1. Tell what to do
2. Tell where to go
3. Tell what to take
4. If what is expected is not happening, tell what the recommended
remedial measures are.
5. Give knowledge about the situation and surroundings
6. Caution with concern about the possible danger
7. Assure help
8. Tell about the qualities required to fulfill the job
9. Encourage them
10.Announce reward for successful completion
12.5 Change Management

Every organization needs to change itself to meet various challenges either
externally imposed or self-imposed.
Resistance to Change
Whenever any change is introduced, it surely upsets many people.
Changes are not accepted without resistance:
!261
I dont understand
It is against my ideals
Old is gold
This has failed elsewhere The new man does not know anything This is against
norms
As it is, everything is OK
I am fed up
My workload will increase What do I get from this?
This wont work here

Ego
Figure 12.4
The personal qualities required to overcome this resistance are:
1. Self esteem
2. Positive thinking
3. Open mind
4. Unselfish attitude
5. Company interest above self-interest
6. Confidence in others
7. Willingness to take risk
8. Boldness
9. Unegoistic personality
10.Creativity
Steps to be followed while introducing a change:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Define the change

State how appropriate the change is
Make everyone know the benefits
Collect the earlier success stories about benefits from the change
CEO should be thoroughly convinced about the change
Prepare schedule for the change
Involve everyone
Introduce in one department first, let everyone see the benefits
Have many meetings and training sessions
!262
12.6 Motivational strategies

People implementing the quality processes have to be highly motivated. It
can come from others, such as superiors encouragement. But it is
desirable that motivation is present in every individual practicing quality
management. This motivation is a result of self-esteem and positive
thinking.
12.7 Team Building
When two persons work together as a team, the net effect produced will be
greater than what would have produced by an individual.
Team is defined as a number of people grouped together:
1. With common vision and dedication
2. With mutual understanding and help among themselves
3. And work interdependently to complete an assignment
!263
Team-work
All members actively participate

Members communicate openly
Conflict is effectively managed
No domination by one or two members
Decisions are critically analysed
All members share team leadership
Disruptive behaviour is confronted by the team
Team membership is rewarding and enjoyable
Figure 12.5
Characteristics of a team are:

1. Focus on goal
2. Members contribute voluntarily
3. Climate of trust and openness
4. Interdependent work
5. Two-way communication
6. Motivated to learn while performing
7. Give and take policy
8. Conflicts are automatically solved
9. Members participate in decision making
10.Harmony with systematic procedure
11.Synergetic effect
The Prime Objectives of the team leader are:
1. As he fulfills the task, he should ensure that every individual has a gain
which should be in terms of his personal development/personality
development.
2. He should work towards getting synergetic effect. This requires working
together. The leader should develop teams to work in unison.
!264
3. Think about the tasks and delegate the work to the members.
4. Take care of team members personal focus: self needs.
5. Take care of members social focus: keeping people happy will be the
motto.
6. Look after members professional focus: output, target and efficiency.
7. All the three focuses should be present for a team to be effective.
Factors that Influence Togetherness
1. Physical proximity
2. Common work area
3. Social/personal homogeneity
4. Communication: Listening is the most important quality and also most
important component of communication
5. Role clarity
6. Leaders interest/intention
7. Prevailing culture
8. Clarity of the purpose
Stumbling Blocks
1.
2.
3.
4.
5.
Ego
Selfishness
Blaming culture
Heterogeneity
Ineffective leader
12.8 Your emotional bank balance
!265
Deposits
Withdrawals (Dont)
Respect others
Show discourtesy
Keep commitment
Manipulating
Developing, training
Politics
Unconditional help
Threatening
Unconditional affection
Neglect
Listen and understand
Use, forget, conditional love

Figure 12.6
Five Important Deposits in Your Bank
Seek to understand others

Attend to small little things
Keep commitments
Show personal integrity
Apologise immediately when the withdrawal happens
!
Figure 12.7
A Thirty Days Test
Make small commitments to yourselves and keep them the next day
Do not say anything bad about a person in his absence
Do not go into blaming and accusing mode
Catch people doing right things
Select a problem in your personal life, think what you can do in your
circle of influence to solve it and take that action
Figure 12.8
!266
12.9 Implementation of decision by Consensus
!
Figure 12.9
Consensus is Defined as
Everyone understands the decision

Can live with the decision
Support the decision
The decision does not disturb you ethically and morally
A big consensus is composed of a series of little, tiny agreements
The power of consensus comes from inclusion
Consensus decisions are self-implementing and need little monitoring
Figure 12.10
!267
Consensus Ground Rules

1. Create an open and trusting climate
2. Explore difference of opinion to get additional information, to
clarify issues, seek better alternatives
3. Support one anothers idea
4. Evaluate ideas objectively
5. Avoid trying to win during group discussion
6. Discuss ideas until sufficient agreement exists
7. Watch out for voting: Minimise the use of voting when making
decision. Voting forces members to choose sides and could split
your group into opposing camps of winners and losers.
Figure 12.11

Activity A
1. Go to a nearby company and do a project about the top management
commitment there.
.
Activity B
1. Go to a nearby company and do a project about how the decisions are
implemented there. Interview the key employees for this activity.
!268
12.11 Summary
Total quality management needs higher levels of employee involvement. It
refers to any activity by which employees participate in work-related
decisions and improvement activities with the objective of tapping the
creative energies of all employees and improving their motivation.

1. Explain the importance of suggestion schemes.
2. What do you understand by empowerment?
3. Why wholehearted commitment from top management is absolutely
required?

1. Consensus is defined as:
(a)
(b)
(c)
(d)
Everyone understands the decision and supports it

Counting the team members
Concentration of team members
Create an open and trusting climate
2. In teamwork:
(a)
(b)
(c)
(d)
Disruptive behavior is confronted by team members

Disruptive behavior is accepted as a part of work
Brainstorming is not allowed
Friendship is not allowed
3. Elements of Employee Involvement

(a)
(b)
(c)
(d)
Problem
Problem
Problem
Problem
solving
solving
solving
solving
at
at
at
at
the
the
the
the
lowest level
highest level
top management level
workers union level
!269
4. These leaders in quality actively promoted training and education.

(a)
(b)
(c)
(d)
Deming
Juran
Crosby
All the above
5. Anyone who occupies a top level chair

(a)
(b)
(c)
(d)
need not be necessarily a leader

is a leader
is a manager as well as a leader
is a director as well as a leader
Transition from Chapter 12 to13
So, my dear students,

As per ISO 9000:2005, Quality Management Principles
Factual approach to decision making
One needs to master the topic of measurement systems and gauges and
their capabilities in order to get the information accurately and precisely
otherwise we will always get misled.
Accurately recorded data is very much necessary in order to know where
we stand and where we have to go.
The following chapter makes you conversant with all these important
information.
!270
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
!271
MEASUREMENT SYSTEMS ANALYSIS
Chapter 13
Objectives
Requirements of Measurement Systems

Standards and Calibration of Management Systems
Errors of Variations Associated with Measurement System
Structure
13.1 Preamble
13.2 Gauge
13.3 Measurement System
13.4 Standards
13.5 Calibration
13.6 Errors or Variation Associated with Measurement System
13.7 Gauge R & R
13.9 Summary
!272
13.1 Preamble
1. Quality is based on products compliance to expectations and
requirements.
2. Quality is a measurable characteristic.
3. Quality measurement should be based on the quantity and costs of nonconformances.
4. Poor quality raises costs unnecessarily, as poor quality increases the size
and cost of the hidden factory where wastes, scrap and repair are
manufactured.
5. Value and quality can be most effectively improved by measuring nonconformances in terms of quantity and cost and systematically attacking
the dominant non-conformances.
6. The first challenge: Developing and implementing a quality
measurement system. Quality Management Principles (Ref: ISO
9000:2005):
7. Factual approach to decision making Effective decisions are based on
the analysis of data and information.
Measurement data are used more often and in more ways than ever
before. For instance, the decision to adjust a manufacturing process or not
is now commonly based on measurement data or some statistic calculated
from them, are compared with statistical control limits for the process, and
if the comparison indicates that the process is out of statistical control,
then an adjustment of some kind is made. Otherwise, the process is
allowed to run without adjustment.
Another use of measurement data is to determine if a significant
relationship exists between two or more variables, e.g., a critical dimension
on a molded plastic part is related to the temperature of the feed material.
Such a relationship could be studied by using a statistical procedure called
regression analysis.
!273
The benefit of using a data based procedure is largely determined by the

quality of the measurement data used. If quality of this data is not
acceptable, then it is improved by improving the measurement system.
13.2 Gauge
Gauge: Any device used to obtain measurements, frequently used to refer
specifically to the devices used on the shop floor including go/no-go
devices.
13.3 Measurement System

The collection of operations, procedures, gauges and other equipments,
software, and personnel used to assign a number to the characteristic
being measured; the complete process used to obtain measurements.
The quality of a measurement system is usually determined solely by the
statistical properties of the data it produces. Other properties such as cost,
ease of use are also important.
1. The measurement system must be in statistical control.
2. Variability in the measurement system must be small compared to the
variability of the manufacturing process.
3. Variability in the measurement system must be small compared to the
specification limits.
4. The increments of the measure must be small relative to the smaller of
the process variability or the specification limits.
5. The statistical properties of the measurement system may change as
the items being measured vary.
13.4 Standards
The National Institute of Standards and Technology (NIST) is the principal
standards organization in the United States. It serves as the repository for
most of the nations physical and chemical measurement standards.
!274
One of the NISTs principal services is transferring measurements from its

standards to other measurement systems. The procedure used to transfer
the measurements is called a Calibration Procedure.
At the highest level in the hierarchy is the national standard, usually held
by NIST but in some cases by other organizations as Los Alamos Scientific
Laboratory, on behalf of NIST.
Measurements are transferred from the national standard to the next level
standard which is called a primary standard. Measurements are transferred
from the primary standard to another level of standard called a secondary
standard. For the secondary standard to be traceable, the transfer must be
done by using an appropriate calibration procedure.
Primary and secondary standards are often owned by private companies
and so they are called as company standards, maintained by metrology
department of the company. From secondary standards, measurements
may be transferred to yet another level of standard called as working
standards. Working standards are usually used to calibrate the
measurement systems found in the production facilities.
Measurements that can be connected back to NIST through the use of
proper calibration procedures used in conjunction with the hierarchy of
standards are said to be traceable to NIST.
The use of traceable standards is especially helpful for minimizing the
conflict that sometimes arises when there is lack of agreement between
the measurements of the producer and the customer.
13.5 Calibration
In general use, calibration is often regarded as the process of adjusting the
indication on a measurement instrument to agree with value of the applied
standard, within a specified accuracy.
!275
!
For example, a thermometer could be calibrated so the error of indication
o r t h e c o r r e c t i o n i s d e t e r m i n e d , a n d a d j u s t e d ( e . g .,
via calibration constants) so that it shows the true temperature
in Celsius at specific points on the scale. This is the perception of the
instrument's end-user. However, very few instruments can be adjusted to
exactly match the standards they are compared to. For the vast majority of
calibrations, the calibration process is actually the comparison of an
unknown to a known and recording the results.
In many countries a National Metrology Institute (NMI) will exist which will
maintain primary standards of measurement (the main SI units plus a
number of derived units) which will be used to provide traceability to
customer's instruments by calibration. The NMI supports the metrological
infrastructure in that country (and often others) by establishing an
unbroken chain, from the top level of standards to an instrument used for
measurement. Examples of National Metrology Institutes are NPL in
the UK, NIST in the United States, PTB in Germany and many others. Since
the Mutual Recognition Agreement was signed, it is now straightforward to
take traceability from any participating NMI and it is no longer necessary
for a company to obtain traceability for measurements from the NMI of the
country in which it is situated.
!276
13.6 Errors and variation in measurement system

The following definitions help describe the types of errors or variations
associated with a measurement system.
1. Reference Value: A reference value can be determined by averaging
several measurements with a higher level (e.g., metrology lab
equipment) of measuring equipment.
Bias is the difference between observed average of measurements and the
reference value.
Figure 13.1
!277
!
Figure 13.2
2. Repeatability: Repeatability is the variation in measurements obtained
with one measurement instrument when used several times by one
appraiser while measuring the identical characteristic on the same part.
3. Reproducibility: Reproducibility is the variation in the average of
measurements made by different appraisers using the same measuring
instrument when measuring the identical characteristic on the same
part.
Figure 13.3
!278
4. Stability: Stability or drift is the total variation in the measurements

observed with a measurement system on the same master or parts
when measuring a single characteristic over an extended time period.
5. Linearity: Linearity is the difference in BIAS values through the
expected operating range of the gauge. Lower part of range can have
lower bias and higher part of range can have larger bias.
13.7 Gauge R & R

Gauge repeatability and reproducibility case example:
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!
Figure 13.4: Gauge Repeatability and Reproducibility Data Sheet
!280
!
!
!281
Figure 13.5: Gauge Repeatability and Reproducibility Report

In the above example, there are three appraisers namely A, B and C, who
are measuring ten parts twice with the same gauge. That means:
1. Appraiser A is checking ten parts, each part twice.
2. Appraiser B is checking the same ten parts, each part twice, with the
same gauge
3. Appraiser C is checking the same ten parts, each part twice with the
same gauge
Go through the above tables and study the calculations row by row.
It is seen that:
1. Repeatability of the gauge is 18.7%
2. Reproducibility of the gauge is 16.8%
3. Gauge R & R is 25.2%
Guidelines for acceptance of gauge repeatability and reproducibility (% R & R)
are:
Under 10% error
the measurement system is acceptable
10% to 30% error
may be acceptable based upon importance of

application, cost of gauge, cost of repairs etc.
Over 30% error
measurement system needs improvement.

Make every effort to identify the problems and
have them corrected.
Figure 13.6
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Activity A
1. You have a foot rule (scale) and you along with two of your friends
should check lengths of several similar rods with the scale. Calculate the
gauge R & R of the rule.
.
Activity B
1. Go to a nearby factory and make a project about the periodic inspection
of gauges.
13.9 Summary
The benefit of using a data based procedure is largely determined by the
quality of the measurement data used. If quality of this data is not
acceptable, then it is improved by improving the measurement system.

1. Explain factual approach to decision making.
2. Explain the meaning of calibration.
3. What do you understand by bias?
!283

1. Any device used to obtain measurements, frequently used to refer
specifically to the devices used on the shop floor including go/no-go
devices is called as:
a.
b.
c.
d.
Scale
Calibration
Gauge
Measurement system
2. _________ is the principal standards organization in the United States.

a.
b.
c.
d.
MIST
JUSE
HDFC
NIST
3. _________ is often regarded as the process of adjusting the indication

on a measurement instrument to agree with value of the applied
standard, within a specified accuracy.
a.
b.
c.
d.
Reading
Master
Calibration
Measurement
4. _________ is the difference between observed average of

measurements and the reference value.
a.
b.
c.
d.
Bias
Repeatability
Stability
R&R
5. _________ is the total variation in the measurements observed with a

measurement system on the same master or parts when measuring a
single characteristic over an extended time period.
!284
a.
b.
c.
d.
Stability
Reproducibility
R& R
Linearity
So, my dear students, once you have studied the measurement systems
analysis, here comes a era of Quality Management Systems: ISO 9000
which you must have heard many times.
In the following chapter, you are going to get a complete picture about the
Quality Management Systems which you would surely like to implement in
your organisation, and get certified from an accredited authority.
I would say that ISO 9000 certification is equivalent to a degree which you
get from a university after studying the complete syllabus. Similarly, I shall
put it that ISO 9000 certification gives you a recognition that you have
implemented TQM in your organisation.
Get to know this interesting part of the book, with which you will get
benefitted fully.
Come on!
!285
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
!286
QUALITY MANAGEMENT SYSTEM
Chapter 14
Objectives
Purpose of a Management System

Principles used by Management for Improving Quality
List of ISO 9000 Family of Standards
Importance of ISO 9001 Certification
Structure
14.1 The Purpose of a Management System
14.2 Eight Quality Management Principles
14.3 ISO 9000 Family of Standards
14.4 PDCA Model of ISO 9001 : 2008
14.5 TS16949 for Automobile Manufacturers
14.6 ISO 9001 Certification as a Useful Stepping Stone for TQM
14.8 Summary
!287
14.1 The purpose of a management system

1. To ensure that an organisation has a defined, consistent, managed
process to capture customer requirements including technical, price
and delivery requirements;
2. To convert those requirements into the appropriate deliverable
(product, service, etc.) through the use of a controlled, monitored and
reported process;
3. To ensure that the deliverable remained in conformance with the
customer's requirements until the contractual obligations of the
organisation end; and
4. To provide management with hard performance data which can be
used to prevent future product, system or process failures, thereby
driving continual improvement.
14.2 Eight quality management principles

It has been identified that these principles can be used by top management
in order to lead the organization towards improved performance.
(a) Customer Focus
Organizations depend on their customers and therefore should

understand current and future customer needs, should meet customer
requirements and strive to exceed customer expectations.
(b) Leadership
Leaders establish unity of purpose and direction of the organization.

They should create and maintain the internal environment in which
people can become fully involved in achieving the organizations
objectives.
(c) Involvement of People
People at all levels are the essence of an organization and their full
!288
involvement enables their abilities to be used for the organizations

benefit.
(d) Process Approach
A desired result is achieved more efficiently when activities and related

resources are managed as a process.
(e) System Approach to Management
To identify, understand and manage interrelated processes as a system

contributes to the organizations effectiveness and efficiency in
achieving its objectives.
(f) Continual Improvement
Continual improvement of the organizations overall performance

should be a permanent objective of the organization.
(g) Factual Approach to Decision Making

(h) Mutually Beneficial Supplier Relationships
An organization and its suppliers are interdependent and a mutually

beneficial relationship enhances the ability of both to create value.
These eight quality management principles form the basis for the
quality management system standards within the ISO 9000 family.
14.3 ISO 9000 Family of standards

ISO 9000 was first published in 1987. It was based on the BS 5750 series
of standards from BSI that were proposed to ISO in 1979.
The ISO 9000 family of standards is related to quality management
systems and designed to help organizations ensure that they meet the
needs of customers and other stakeholders.
!289
The standards are published by ISO, the International Organization for

Standardization, and available through National Standards bodies. ISO
9000 deals with the fundamentals of quality management
systems, including the eight management principles on which the family of
standards is based.
Managing an organization encompasses quality management amongst
other management disciplines.
The ISO 9000 family of standards listed below have been developed to
assist organizations, of all types and sizes, to implement and operate
effective quality management systems.
1. ISO 9000 describes fundamentals of quality management systems and
specifies the terminology for quality management systems.
2. ISO 9001 specifies requirements for a quality management system
where an organization needs to demonstrate its ability to provide
products that fulfill customer and applicable regulatory requirements
and aims to enhance customer satisfaction.
3. ISO 9004 provides guidelines that consider both the effectiveness and
efficiency of the quality management system. The aim of this standard
is improvement of the performance of the organization and satisfaction
of customers and other interested parties.
4. ISO 19011 provides guidance on auditing quality and environmental
management systems.
5. ISO 10012 provides guidance on quality assurance for measurement
processes.
!290
Together they form a coherent set of quality management system

standards facilitating mutual understanding in national and international
trade.
The text of the ISO Standard has been approved as suitable for publication
as an Indian Standard without deviations. Certain conventions are,
however, not identical to those used in Indian Standards. Attention is
particularly drawn to the following:
Wherever the words International Standard appear referring to this
standard, they should be read as Indian Standard.
ISO 9001
Deals with the requirements that organizations wishing to meet the
standard have to fulfil. Third party certification bodies provide
independent confirmation that organizations meet the requirements of ISO
9001.
A number of major purchasers require their suppliers to hold ISO 9001
certification. In addition to several stakeholders' benefits, a number of
studies have identified significant financial benefits for organizations
certified to ISO 9001, with a 2011 survey from the British Assessment
Bureau showing 44% of their certified clients had won new business.
ISO 9001:2008 is the current version of ISO 9001.
ISO 9001:2008 Quality Management Systems Requirements
This is a document of approximately thirty pages which is available from
the national standards organization in each country.
ISO 9001:2008 basically re-narrates ISO 9001:2000. The 2008 version
only introduced clarifications to the existing requirements of ISO
9001:2000 and some changes intended to improve consistency with ISO
14001:2004. There were no new requirements. For example, in ISO
9001:2008, a quality management system being upgraded just needs to be
checked to see if it is following the clarifications introduced in the amended
version.
!291
ISO 9001:2008 is supplemented directly by two other standards of the

family:
1. ISO 9000:2005 "Quality management systems. Fundamentals and
vocabulary
2. ISO 9004:2009 "Managing for the sustained success of an organization.
A quality management approach"
Other standards, like ISO 19011 and the ISO 10012 series, may also be
used for specific parts of the quality system. Only ISO 9001 is directly
audited against for third party assessment purposes. The other two
standards are supplementary and contain deeper information on how to
sustain and improve quality management systems.
Two types of auditing are required to become registered to the standard:
auditing by an external certification body (external audit) and audits by
internal staff trained for this process (internal audits). The aim is a
continual process of review and assessment to verify that the system is
working as it is supposed to; to find out where it can improve; and to
correct or prevent problems identified.
Numerous certification bodies exist, which audit organizations and, upon
success, issue ISO 9001 compliance certificates. Although commonly
referred to as 'ISO 9000' certification, the actual standard to which an
organization's quality management system can be certified is ISO
9001:2008. Many countries have formed accreditation bodies to authorize
("accredit") the certification bodies. Both the accreditation bodies and the
certification bodies charge fees for their services.
Major outline contents for ISO 9001:2008 are as follows:
1. Section 4: Quality Management System: The organization shall
establish, document, implement and maintain a QMS and continually
improve its effectiveness in accordance with the requirements of this
standard.
2. Section 5: Management Responsibility: Top Management shall
provide evidence of its commitment to the development and
implementation of the QMS and continually improve its effectiveness by
!292
ensuring customer focus, quality policy, planning, responsibility,

authority and communication.
3. Section 6: Resource Management: Human resources, infrastructure
(buildings, process equipment, transport, communication), work
environment.
4. Section 7: Product Realization: Customer related processes, design
and development, purchasing, production and service provision,
validation of processes, identification and traceability, control of
monitoring and measuring devices.
5. Section 8: Measurement, Analysis and Improvement: Monitoring
and measurement of processes and products.
Before the certification body can issue or renew a certificate, the auditor
must be satisfied that the company being assessed has implemented the
requirements of Sections 4 to 8.
The standard specifies that the organization shall issue and maintain the
following six documented procedures:
1.
2.
3.
4.
5.
6.
Control of Documents (4.2.3)

Control of Records (4.2.4)
Internal Audits (8.2.2)
Control of Non conforming Product/Service (8.3)
Corrective Action (8.5.2)
Preventive Action (8.5.3)
In addition to these procedures, ISO 9001:2008 requires the organization

to document any other procedures required for its effective operation. The
standard also requires the organization to issue and communicate a
documented quality policy, and a Quality Manual (which may or may
not include the documented procedures) and numerous records, as
specified throughout the standard.
ISO 9001 is no more than documented common sense. It recognizes that
top management are the people who set the style and tone of the entire
operation, and therefore requires that they demonstrate their commitment
to the management system.
!293
Top management need to recognize that the reason for the existence of
any organization is to satisfy its customers and stakeholders and to
structure its operations around that basic premise. To help achieve
customer satisfaction, top management is required to commit to a
meaningful quality policy, create customer focused quality objectives, and
deploy them throughout the organization.
Customers want consistency. Achieving consistency in the identification of
customer requirements and the conversion of those requirements into
deliverable products and services requires stable processes. What ISO
9001 requires is that top management shall:
1. Establish such processes;
2. Implement them;
3. Monitor them at appropriate intervals;
4. Find ways of understanding customer perceptions of performance;
5. Continually seek to improve the effectiveness of the system, the
processes; and
6. The products or services being supplied.
What ISO 9001 provides is a convenient, internationally recognized
framework within which to operate these processes and activities. It also
provides the opportunity for an organization to obtain third party
certification for the processes which it has in place.
Good implementations of the ISO 9000 standards have always been
focused on process activities and customer satisfaction.
ISO 9001:2008 places considerable emphasis on both of these.
The role of top management is very prominent and the concept of
continuous improvement is a thread woven right through the requirements.
At the core of the management system are the product realization
processes.
!294
The basics of understanding a customer's requirements and having

methods in place which ensure that they are consistently met are as old as
trade itself.
A management system is a collection of resources comprising capital,
people, processes and procedures which ensures that a customer's
requirements for quality are met by the supplier organization. To really
make sense of this statement, it is necessary to understand what is meant
by 'quality' in the context of ISO 9001.
Quality is not goodness, scale or niceness. Quality is conformance to
defined specifications in terms of performance, price and delivery. The
technique used to achieve that conformance is called quality assurance or
quality management hence the term 'quality management system'. The
system is a means whereby the organization's management can plan what
they are trying to achieve in terms of delivering a quality product to their
customers, plan how they should go about fulfilling that intent, and plan
how to provide everyone involved with the tools, techniques, training and
instructions necessary to fulfil their tasks effectively.
Some organizations have the luxury of their customers telling them
precisely what they want, and then they go off and fulfil those
requirements. Other companies start on more difficult ground, and one of
the first things that they have to do is to figure out what their customers
want in other words, they have to develop the specifications against
which they will provide the deliverable.
This activity embraces the concept sometimes called 'the voice of the
customer' which is the process of listening to end-user feedback as
well as addressing the need to comply with regulatory requirements,
anticipate what new regulations may be in force when the product or
service is ready for delivery, being aware of what the competition is doing
now, and trying to guess what they may be doing down the road. Guessing
where client taste is likely to be by the time the deliverable hits the streets
adds yet another dimension, and for some organizations, all this has to be
done on a global scale.
Once the design is determined, the organization then has to create the
production process, purchase materials, arrange delivery methods, handle
orders and all of the million and one other details which go into the
!295
successful development, manufacturing and delivering of a product or

service to the customer. A management system is the series of processes
and methods whereby all this is done; an ISO 9000 management system is
one based upon the precepts of the ISO 9000 Series of Standards. This
framework has been found to be extremely effective in improving the
operational activities of many companies.
Future Version of ISO 9001 is ISO 9001:2015
The first draft called the Committee Draft of ISO 9001:2015 was
published in May 2013 and is available for consultation among members of
ISO/TC 176/SC 2 (the ISO committee that is leading the revision process)
until August 2013.
The impact of this revision will be similar to, if not greater than the 2000
edition, which was a major change for accreditation bodies, certification
bodies, training organizations, implementing organizations, procurement
organizations, consultants and customers. The transition period for ISO
9001:2000 was three years and the expectation is that the 2015 revision
will be the same, so activity is being planned up to 2018.
ISO 9000:2005 "Quality Management Systems. Fundamentals and
Vocabulary
As mentioned above, ISO 9001 is supplemented directly by ISO
9000:2005.
This International Standard describes fundamentals of quality management
systems, which form the subject of the ISO 9000 family, and defines
related terms.
This International Standard is applicable to the following:
1. Organizations seeking advantage through the implementation of a
quality management system;
2. Organizations seeking confidence from their suppliers that their product
requirements will be satisfied;
3. Users of the products;
!296
4. Those concerned with a mutual understanding of the terminology used

in quality management (e.g., suppliers, customers, regulators);
5. Those internal or external to the organization who assess the quality
management system or audit it for conformity with the requirements of
ISO 9001 (e.g., auditors, regulators, certification/registration bodies);
6. Those internal or external to the organization who give advice or
training on the quality management system appropriate to that
organization;
7. Developers of related standards.
We have frequently taken reference of ISO 9000:2005 in this book to
describe various terms such as Quality, Quality Planning etc.
ISO 9001 is Also Supplemented Directly by ISO 9004:2009
"Managing for the Sustained Success of an Organization. A Quality
Management Approach
This new ISO 9004 standard explains how organization's can use a
quality management approach to achieve sustained success. This is a
major change in focus. Sustained success is now the goal of the
standard.
4. Success Management
4.1 Quality Management Approach
i) Adopt a Quality Management Approach.
ii) Establish a Quality Management System (QMS) that
is based on ISOs Quality Management System Principles.
4.2 Sustained Corporate Success
i) Meet the needs and expectations of interested parties
4.3 Business Environment
!297
i) Monitor your organizations changing business environment

4.4. Interested Parties
i) Meet the needs and expectations of interested parties
a.
b.
c.
d.
e.
f.
Meet
Meet
Meet
Meet
Meet
Meet
the
the
the
the
the
the
needs
needs
needs
needs
needs
needs
and
and
and
and
and
and
expectations
expectations
expectations
expectations
expectations
expectations
of
of
of
of
of
of
customers
employees
suppliers
partners
owners
society
ii) Balance the needs and expectations of interested parties

5. Strategic Management
5.1. General Corporate Orientation
i) Establish a mission for your organization
5.2. Strategy and Policy Formulation
ii) Establish a process to develop your strategy and policies.
5.3 Strategy and Policy Deployment
6. Resource Management
6.1 General Resource Management
6.2
6.3
6.4
6.5
6.6
6.7
6.8
Financial Resource Management

Human Resource Management
External Resource Management
Infrastructure Resource Management
Work Resource Management
Intelligence Resource Management
Natural Resource Management
7. Process Management
!298
7.1 Using a Process Approach

8. Evaluation Management
8.1 General approach to evaluation
i) Monitor your organizations performance
ii) Measure your organizations performance
iii) Analyze your organizations performance
iv) Review your organizations performance
8.2
8.3
8.4
8.5
Monitoring your organization and its environment

Measuring organizational performance
Analyzing your organization's environment
Reviewing performance information
9. Change Management
9.1 Managing Change
i) Achieve
ii) Achieve
iii) Achieve
iv) Achieve
sustained success by managing change

success by managing improvements
success by managing innovations
success by managing learning
9.2 Managing Improvements

9.3 Managing Innovation
9.4 Managing Learning
14.4 PDCA Model of ISO 9001 : 2008

This International Standard promotes the adoption of a process approach
when developing, implementing and improving the effectiveness of a
quality management system, to enhance customer satisfaction by meeting
customer requirements.
For an organization to function effectively, it has to determine and manage
numerous linked activities. An activity or set of activities using resources,
and managed in order to enable the transformation of inputs into outputs,
!299
can be considered as a process. Often the output from one process directly
forms the input to the next.
The application of a system of processes within an organization, together
with the identification and interactions of these processes, and their
management to produce the desired outcome, can be referred to as the
process approach.
An advantage of the process approach is the ongoing control that it
provides over the linkage between the individual processes within the
system of processes, as well as over their combination and interaction.
When used within a quality management system, such an approach
emphasizes the importance of:
a.
b.
c.
d.
Understanding and meeting requirements,

The need to consider processes in terms of added value,
Obtaining results of process performance and effectiveness, and
Continual improvement of processes based on objective
measurement.
The model of a process-based quality management system shown in Figure

14.1 illustrates the process linkages presented in Clauses 4 to 8. This
illustration shows that customers play a significant role in defining
requirements as inputs. Monitoring of customer satisfaction requires the
evaluation of information relating to customer perception as to whether the
organization has met the customer requirements. The model shown in
Figure 14.1 covers all the requirements of this International Standard, but
does not show processes at a detailed level.
Note: In addition, the methodology known as Plan-Do-Check-Act (PDCA)
can be applied to all processes. PDCA can be briefly described as follows:
1. Plan: Establish the objectives and processes necessary to deliver results
in accordance with customer requirements and the organization's
policies.
2. Do: Implement the processes.
3. Check: Monitor and measure processes and product against policies,
objectives and requirements for the product and report the results.
!
!300
4. Act: Take actions to continually improve process performance

The concept of the management system as a series of interconnected
processes whereby customer requirements and associated external
requirements such as statutory, product, health and safety or
environmental specifications or needs, are integrated to provide a stable
methodology for the creation of customer satisfaction is the practical
application of the 'Plan-Do-Check-Act' cycle variously known as the
Shewart, Deming or human activity cycle. Following diagram shows how
ISO 9001activities reflect the PDCA model.
Figure 14.1
!301
Continual improvement is fundamental to the implementation of the
standard. A management system provides data which can be used to
predict likely points of failure and provide for action to be taken to avoid
those failures. It will also capture data on actual failures and take action to
correct the situation and prevent its recurrence.
Requirements for Documentation
The requirements for documentation are lean. The term 'documented
procedure' appears just six times. The mandatory procedures are for the
control of:
1.
2.
3.
4.
5.
6.
Documents,
Records,
Internal audits,
Non-conforming product,
Corrective action,
Preventive action.
The Standard also requires

1. A quality manual,
2. A statement of quality policy, and
3. Quality objectives.
It might be light on required documents, but it certainly isn't in terms of
records. Specific statements requiring that records are maintained appear
twenty-one times, and at least five other records are implied.
Legal and Regulatory Issues
The standard is heavy on regulatory issues as well. There are seven
separate references to these matters, and these are in the sections which
deal with the general intent of the system, its scope and application, the
commitment of management, the determination of product requirements,
and the input to design activity. Top management are expected to ensure
that they are operating within the law.
!302
Customer Satisfaction
The primary intention of any management system should be one of the
assuring customer satisfaction through the prevention of defects. The ISO
9000 family is no exception.
14.5 TS16949 for automobile manufacturers

The ISO/TS16949 is an ISO technical specification aiming to the
development of a quality management system that provides for continual
improvement, emphasizing defect prevention and the reduction of variation
and waste in the supply chain. It is based on the ISO 9001 and the first
edition was published in March 2002 as ISO/TS 16949:2002.
It was prepared by the International Automotive Task Force (IATF) and the
"Technical Committee" of ISO. It harmonizes the country-specific
regulations of Quality Management Systems.
About 30 per cent of the more than 100 existing automobile manufacturers
affiliate the requirements of the norm.
TS16949 applies to the design/development, production and, when
relevant, installation and servicing of automotive-related products.
The requirements are intended to be applied throughout the supply chain.
For the first time, vehicle assembly plants will be encouraged to seek ISO/
TS16949 certification.
14.6 ISO 9001 Certification as a useful stepping stone for

TQM
1. It has been recognized that the emphasis on quality has led
organizations to adopt TQM.
2. Moreover, organizations and customers have demanded external
recognition of quality, which has in turn provided the momentum for the
International Organization for Standardization (ISO) development of the
ISO 9000 series. ISO 9000 represents a trend in quality management,
which cannot be ignored in todays business environment. In fact, those
!303
companies wishing to remain competitive and improve their quality

systems are recommended the use of ISO 9000 as a foundation for a
much broader system of TQM. This is based on the fact that ISO 9000 is
an important part of TQM, and the implementation of both approaches
together will lead to organizational success and competitive advantage.
3. It is clear that both approaches tend to complement each other. ISO
9000 can be implemented first to create stability and consistency in the
organizations work, then the implementation of TQM can enhance
employee motivation and operational efficiency, and achieve overall
organizational success and performance.
4. On the other hand, it appears that some managers have misunderstood
the role of ISO 9000 certification. One possible explanation for this
misunderstanding is that managers fail to distinguish between
conformance and performance specification. These organizations seek
certification because of pressure from their customers and government
policy. The quality of their products and services may improve in the
short term, however, they are unlikely to improve and sustain their
organizational performance. In these cases, ISO 9000 certification is a
hollow achievement in the long run.
5. Researchers found that companies which implement ISO 9000 and TQM
at the same time and in an integrated manner might expect to have
advantages in product quality, delivery, productivity and customer
satisfaction.
6. ISO9000 certification is only the beginning of a continuous improvement
process rather than the end and could be a useful stepping stone for
TQM. ISO 9000 can be an excellent start to TQM, if it is interpreted in a
way that encourages the company to start on the process of continual
improvement by teamwork of all people working in the company.
!304

Activity A
1. Go to a nearby company having ISO 9001:2008 Certification and study
their status of customer satisfaction.
.
Activity B
1. Make a project about how you will implement ISO 9001:2008 in a smallscale company.
14.8 Summary

1. Explain the features of ISO 9000:2005.
2. Explain how customer requirements are covered in ISO 2001:2008.
3. Explain how process control is covered in ISO 2001:2008.
!305

1. _____________ provide independent confirmation that organizations
meet the requirements of ISO 9001.
a.
b.
c.
d.
Third party certification bodies

Government officials
Inspector of Factories
DGFASLI
2. ISO 9000 was first published in the year_____________.

a.
b.
c.
d.
1990
1963
1948
1987
3. ISO 9000 was based on the ____________ series of standards that

were proposed to ISO in 1979.
a.
b.
c.
d.
BS 5750
QS9000
Bosch
DIN
4. Major outline contents for ISO 9001 (Quality Management System) are
given in:
a.
b.
c.
d.
Section
Section
Section
Section
4
5
6
7
5. The ISO 9001:2008 standard specifies in 4.2.3 that the organization

shall issue and maintain the following documented procedures:
a.
b.
c.
d.
Control of Documents
Control of Records
Internal Audits
Corrective Action
!306

So, my dear students, now you reach a destination which I should call as
the heart of the customer satisfaction, and that is Service Quality.
The total exercise will be null and void if you and your organization are
weak in the service quality.
Like the customer expects reliability along with product quality, he expects
one more thing and that is service quality.
And the next topic gives you a complete background about various aspects
of service quality, which you will be practicing throughout your life,
wherever you are and whatever you are doing as an entrepreneur.
Once you by-heart this chapter word by word, the whole world is yours,
and you can now achieve any height and accomplish almost anything in
your life.
I know you must be feeling that I am exaggerating my statements but here
is the real key to success.
!307
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
!308
SERVICE QUALITY
Chapter 15
SERVICE QUALITY
Objectives
Importance of customer service.

Assessment of the quality of the customer service.
Structure
15.1 Preamble
15.2 Service Quality
15.3 SERVQUAL or Rater
15.4 GAP model
15.5 A Typical Case Example of Measuring Service Quality in Banks
15.6 A Typical Case Example of Measuring Service Quality in Hotels
15.7 Statistical Process Control
15.8 My Thrilling Experience
15.10 Summary
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SERVICE QUALITY
15.1 Preamble
The service sector accounts for 70% of jobs and is expected to go up to
85% in the near future. For the success of such a sector, quality
management and continual improvement are simply mandatory. In service
industries, it is not enough if only the product meets the customer
requirement, but the employee behavior must also meet customers
expectations and must be of a high standard. Thus, the service concept is
a combination of both technical as well as human behavior aspect, which is
very difficult to quantify, measure and control.
Many organizations are pure service businesses such as:
1. Education
2. Banking
3. Insurance
4. Defense
5. Municipal services
6. Welfare services
7. Legal services
8. Health services
9. Marketing
10.Travels and tours
11.Restaurants
12.Transportation
13.Public utilities such as electricity and water etc.
Some industries provide a tangible product and an intangible component as
follows that affects their customers satisfaction.
1. After-sales service
2. Warranty replacement
3. Repairs under guarantee clauses
Following are the services that support manufacturing function:
1.
2.
3.
4.
5.
Purchasing
Accounting
Pay-roll
Personnel
R&D
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It is necessary to have different measurement processes to measure

quality of services.
Suppose, a fast food restaurant produces tangible goods in form of Pizzas
and French fries, which are the quality core products of that restaurant.
These products also are very popular in all the age groups of customers.
However, the quick service and friendliness of the service could be its more
facilitating services, which are more valuable to the customers.
Nowadays, many firms lose their customers because of poor customer
services. This aspect needs a very focused attention because cost of
acquiring new customers is much higher than the costs associated with
retaining the existing customers. Firms with loyal, long time customers can
financially outperform their competitors with higher turnover of customers.
15.2 Service Quality

Service quality is a comparison of customer expectations with
performance.
A business with high service quality will meet customer needs and remain
economically competitive. Improved service quality may increase economic
competitiveness of the organization.
This aim may be achieved by understanding and improving operational
processes; identifying problems quickly and systematically; establishing
valid and reliable service performance measures and measuring and
exceeding customer satisfaction and other performance outcomes.
It reflects at each service encounter. Customers form service expectations
from past experiences, word-of-mouth and advertisement. In general,
customers compare perceived service with expected service in which if the
perceived service falls short of the expected service the customers are
disappointed.
For example, in the case of TAJ Hotels, Resorts and Palaces, wherein
TAJ remaining the old luxury brand in the five-star category, the umbrella
branding was diluting the image of the TAJ brand.
The reason for this was:
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Although the different hotels such as Vivanta, the four star

category, Gateway in the three star category and Ginger the two star
economy brand, were positioned and categorized differently, customers still
expected the high quality of Taj from all their properties.
The accurate measurement of an objective aspect of customer service
requires the use of carefully predefined criteria.
The measurement of subjective aspects of customer service depends on
the conformity of the expected benefit with the perceived result.
This in turns depends upon:
1. The customer's expectation in terms of service they might receive.
2. The service provider's ability and talent to present this expected service.
3. Successful companies add benefits to their offering that not only satisfy
the customers but also surprise and delight them. Delighting customers
is a matter of exceeding their expectations.
Service quality can be related to:
1. Service potential (for example, worker's qualifications);
2. Service process (for example, the quickness of service)
3. Service result (customer satisfaction).
Quality improvement can only be achieved through the actions of people.
Possibly 90% or more of the potential lies in service industries and service
jobs in manufacturing firms. As a strategic issue, customer service can be
considered as a major dimension of competitiveness. Defining and
controlling quality of service is more difficult than quality assurance of
products. Service industries share unique characteristics that make the
process of quality control less manageable. Moreover, the level of quality
expected is less predictable. Service companies operations are affected by
several characteristics, including less tangible nature of output and inability
to store the output.
Understanding/knowing the customer:
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The very nature of service implies that it must respond to the needs of the
customer.
1. Learning the customers specific requirements
2. Providing individualized and undivided attention
3. Recognizing the regular customer
The service must meet or exceed the customer expectations. The unique
factors determining the customer satisfaction in service quality are:
1.
Behavior of the delivery person
2.
Image of the organization
3.
Time: How long must a customer wait for the service?
4.
Timeliness: A package has to be delivered by 10:30 a.m. next day.

Will it be delivered in time?
5.
Convenience: (Access): Is the service easy to obtain?
6.
Courtesy: Do frontline employees greet the customer? Are they neat

and clean? (No muddy shoes on customers carpet)
7.
Are the service people able to understand and appreciate all the
customers needs?
8.
The presence of customers inspection team overseeing the production

process
9.
The measure of output is difficult to define
10. Variance and acceptance ranges may not apply

11. Adjusting the control system if customer is present
12. The most significant problem with the delivery of services is that it is
typically measured at the customers interface. Sometimes, if the
problem exists, it is too late to fix it.
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13. Completeness: Are all the ordered items delivered?

14. Consistency: Are services delivered consistently, i.e. same elapsed
time each occasion?
15. Reliability: It involves consistency of performance and dependability.
16. Competence: It involves knowledge and skills of personnel, research
capability of the organization
17. Tools and equipments used to provide service and physical facilities
18. Physical presentation of the service
19. Accuracy: Is service performed accurately the first time and then
every time?
20. Responsiveness: Can service personnel react quickly to unexpected
problems? It concerns willingness or readiness of employees to provide
service. It also involves promptness.
21. Are the service people able to communicate to the customers properly
about all the service process?
22. Credibility: Are the service people trustworthy? Are they believable
and honest? Is their work reliable and dependable?
23. Safety: After the service is completed, is safety of the equipment
assured?
24. Acceptability: Is the service acceptable to the customer? Is he happy
with your work? Does it solve all the customers problems? Do you
take too much time to repair and hand over back the machine/
equipment, every time?
25. Quality perceptions are derived from the comparison of before-theservice expectations of the customer, and his actual service
experience. They are derived from the service process and service
outcome.
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15.3 SERVQUAL or RATER

It is a service quality framework. SERVQUAL was developed in the
mid-1980s by Zeithaml, Parasuraman and Berry. SERVQUAL means to
measure the scale of quality in the service sectors.
SERVQUAL was originally measured on 10 aspects of service quality:
Reliability, responsiveness, competence, access, courtesy, communication,
credibility, security, understanding the customer and tangibles.
It measures the gap between customer expectations and experience. The
basic assumption of the measurement was that customers can evaluate a
firm's service quality by comparing their perceptions with their
expectations.
By the early 1990s, the authors had refined the model to the useful
acronym RATER:
Figure 15.1
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1. Reliability (Delivering on promises): It involves consistency of

performance and dependability.
2. Assurance (Courtesy): Are the service people trustworthy? Are they
believable and honest?
3. Tangibles: They are defined as the appearance of service facilities,
equipment, personnel, and communication materials.
4. E m p a t h y ( T r e a t i n g c u s t o m e r s a s i n d i v i d u a l s ) : C a r i n g ,
individualized attention the firm provides its customers.
5. Responsiveness: Can service personnel react quickly to unexpected
problems? It concerns willingness or readiness of employees to provide
service. It also involves promptness.
15.4 GAP model

The service quality model or the GAP model developed by a group of
authors-Parasuraman, Zeithaml and Berry at Texas and North Carolina
in year 1985, highlights the main requirements for delivering high service
quality. It identifies five gaps that cause unsuccessful delivery.
Customers generally have a tendency to compare the service they
'experience' with the service they expect. If the experience does not
match the expectation, there arises a gap.
GAP 1: Gap between consumer expectation and management
perception
This gap arises when the management does not correctly perceive what
the customers want.
For instance, hospital administrators may think patients want better food,
but patients may be more concerned with the responsiveness of the nurse.
GAP 2: Gap between management perception and service quality
specification
Here, the management might correctly perceive what the customer wants,
but may not set a performance standard. An example here would be that
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SERVICE QUALITY
hospital administrators may tell the nurse to respond to a request fast ,

but may not specify how fast.
GAP 3: Gap between service quality specification and service
delivery
This gap may arise owing to the service personnel.
The reasons are: poor training, incapability or unwillingness to meet the
set service standard.
GAP 4: Gap between service delivery and external communication:
Consumer expectations are highly influenced by statements made by
company representatives and advertisements.
The gap arises when these assumed expectations are not fulfilled at the
time of delivery of the service.
For example The hospital printed on the brochure may have clean and
furnished rooms, but in reality it may be poorly maintained in this case
the patients expectations are not met.
GAP 5: Gap between expected service and experienced service:
This gap arises when the consumer misinterprets the service quality. The
physician may keep visiting the patient to show and ensure care, but the
patient may interpret this as an indication that something is really wrong.
15.5 typical case example of measuring service quality in

Banks
1. The SERVPERF model was carved out of SERVQUAL by Cronin and Taylor
in 1992. SERVPERF measures service quality by using the perceptions of
customers.
2. There are 13 private banks and 3 public banks operating in the city.
3. A probability sampling method was employed to identify the sample
respondents.
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4. In this study, both primary and secondary sources of data were used to
collect the needed information from the sources. The primary data were
collected through administrating questionnaire from selected customers.
In order to get the answer for questions, 260 questionnaires were
distributed to 260 customers of private banks. From the 260
questionnaires, 250 responses were received. The screening process
resulted in excluding 5 responses from the study because of missing
data items. The remaining responses 245 represent an effective
response rate of around 94% of the total sample.
5. The questionnaire has four sections consisting of 32 questions. The first
part of the questionnaire consists of issues related to the personal
information of the respondents. It included the age, gender, educational
background and frequency of use of the respondents.
6. The second part was concerned with the questions used to assess
service quality of the private banks. The research instrument designed
is based on the five dimensions of service quality and the 22 service
items of the SERVPERF model.
7. The developed questionnaire includes:
a.
b.
c.
d.
e.
Four items corresponding to the tangibles dimension

Five items correspond to the reliability dimension
Four items correspond to the assurance dimensions
Five items to the responsiveness and
Four items to empathy.
8. Respondents were asked to indicate their degree of agreement with

each of the items on five point scale.
9. In this study, customers satisfaction was measured using one item that
captures overall satisfaction on service offered by the banks. It was
measured using a five-point scale.
10.Customers loyalty comprised four items. It comprised of questions that
can be used to measure the passengers willingness to recommend the
service to other people, their future commitment and intention of
repurchase. It was also measured using a five-point scale.
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11.According to Cronin and Taylor (1992), their performance based

SERVPERF scale is a better method of measuring service quality.
12.Data on demographic characteristics of the respondents. It includes
variables like age, gender, educational qualifications, and frequency of
use. The sample includes 245 customers of private commercial banks.
Females make 33% of the customers. On the other hand, males
respondents represented (67%) of the survey population. The largest
group of respondents (58%) is aged between 31 and 55. The next
largest group (34%) is aged between 18 and 30. Smaller groups of
respondents are aged above 50 (8%).
13.With regard to educational level, respondents with diploma and below
make 16% of the customers. While first degree holders are the largest
group of respondents comprising 69% of the respondents. Finally,
holders of postgraduate degrees make 15% of the customers.
14.Regarding the frequency of use, majority of the respondents are not
frequent users (51% and 46%), they use the service at most once in a
month.
15.Mean score for the five dimensions of service quality.
a.
b.
c.
d.
The highest mean is scored by tangibility

Followed by assurance and reliability.
The least mean score is for empathy
Followed by responsiveness.
Table 15.1: Mean Score for Service Quality Dimensions
Service Quality Dimensions
Mean Score
Tangibility
3.40
Reliability
3.00
Responsiveness
2.625
Assurance
3.175
Empathy
2.605
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SERVICE QUALITY
According the above table, the tangibility dimension of service quality is

carried out superior to the other four dimensions with a mean score of
3.40. This indicates that the private banks are performing at satisfactory
level in possessing good looking equipments, visually appealing materials
and neat appearing employees.
The second dimension as per the rating of the customers is assurance with
a mean score of 3.18. The customer perceived that the banks are
performing better in having knowledgeable and courteous employees and
providing secure and trustworthy service.
The third dimension is reliability with 3.00 mean score.
The least performed dimensions are responsiveness and empathy with a
mean score of 2.63 and 2.61 respectively. As per the response of the
customers, private banks are not good in delivering responsive and
empathic service. This indicates that there are weaknesses in helping
customers, responding to customer inquiries, delivering prompt service and
understanding individual customer needs.
16.It is also found that there is a significant positive relationship between
the five dimensions of service quality and customer satisfaction.
a. The highest correlation is between empathy and customer
satisfaction followed by responsiveness, tangibility and assurance
respectively. The weakest correlation is between reliability and
customer satisfaction. This showed that service quality and customer
satisfaction is positively related.
b. It means the better service quality was the higher customer
satisfaction. Accordingly, the most important service quality
dimension that affects customer satisfaction is empathy, which goes
to prove that empathy perceived as a dominant service quality
followed by responsiveness; indicating improvements in employees
customer satisfaction levels were significant.
c. Empathy, responsiveness and assurance dimension of service quality
have a significant influence on customers satisfaction.
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SERVICE QUALITY
15.6 A typical case example of measuring service quality

in Hotels
1. Hotel guests perceptions were measured with a self-administered
questionnaire. The questionnaire was adopted to suit the specic
features of a hotel setup.
2. As a foundation for questionnaire development, the Servqual model was
used with a total of 29 hotel attributes. These attributes represented
seven dimensions: ve original Servqual dimensions (tangibles,
reliability, responsiveness, assurance, empathy) and two new
dimensions, named as accessibility and output quality.
3. The questionnaire consisted of two parts:
a. The rst part measured guests perceptions of hotel attributes using a
modied Servqual model. Service quality perceptions were measured
on a seven-point scale ranging from 1 strongly disagree to 7
strongly agree.
b. The second part was designed to capture respondents demographic
and traveling characteristics, which included country of residence,
age, gender, purpose of visit, duration of staying at a hotel, level of
education, and hotel category.
4. The target population of the survey was guests staying in hotels during
the summer of 2007. Questionnaires were distributed in 15 (2-, 3- and
4-star) hotels, after hotel managers agreed to participate in the study.
Reception desk employees were asked to administer the questionnaires
to guests during their hotel stay, and to collect them after completion.
In each hotel, questionnaires were randomly distributed to the guests.
Of 265 returned questionnaires, 12 were not included in the analysis
because of incompleteness. Thus, data analysis is based on a sample of
253 valid questionnaires. The response rate was 26 per cent.
5. The statistical analysis was conducted on 253 valid questionnaires.
6. The demographic and traveling characteristics of the respondents: The
sample included domestic (16.6 per cent) and international tourists
(83.4 per cent). There were slightly more males (51.8 per cent) than
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SERVICE QUALITY
females (48.2 per cent), and most of the respondents (55 per cent)
were older than 46 years. More than 60 per cent of hotel guests in the
sample had a university or college education. About 86 per cent of the
respondents indicated that the main purpose of their visit was vacation.
Most of them stayed at a 4-star hotel, for between four and seven days.
7. The results of the descriptive statistical analysis of guests
perceptions in the hotel industry are shown in the following table. The
range of service quality perceptions items was from 1 (very low
perceptions) to 7 (very high perceptions). The mean scores of guests
perceptions ranged from 4.77 to 6.34. The lowest perception item was
offering a variety of facilities, which indicates that hotels do not provide
enough suitable facilities that could enhance hotel quality. On the other
hand, hotel guests highest perceptions were regarding the ease of
nding a way around the hotel. Furthermore, guests highly assessed the
following hotel attributes: feeling safe and secure, willingness for
helping guests and courteous hotel staff. These indicate that a hotels
staff has one of the crucial roles in performing high service quality. The
overall mean score for service quality perceptions items was 5.92. This
score indicates rather high perceptions of hotel guests regarding service
quality.
Table 15.2: Average Scores of Service Quality Perceptions in Hotel
Settings
Attributes
Mean Score
V1
Modern-looking equipment
5.31
V2
Visually appealing physical facilities
5.53
V3
Neat hotel staff
6.13
V4
Visually appealing materials (pamphlets, websites)
5.53
V5
Clean and tidy hotel
6.06
V6
Appropriate location
6.19
V7
Parking area
4.96
V8
Performing service in the promised time
5.98
V9
Interest in solving guests problems
6.09
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V10
Performing services right the rst time
5.99
V11
Service without delays
6.02
V12
Error-free service
5.81
V13
Knowing the exact time when service will be

performed
6.00
V14
Hotel staff provides prompt service
5.98
V15
Willingness to help guests
6.25
V16
Hotel staff has time to answer guests questions
6.13
V17
Hotel staff instills condence
6.14
V18
Courteous hotel staff
6.25
V19
Hotel staff has knowledge to answer questions
5.99
V20
Feeling safe and secure
6.29
V21
Providing individual attention
5.81
V22
Convenient opening hours
5.94
V23
Hotel staff provides personal attention
5.86
V24
Guests best interests at heart
6.02
V25
Understanding guests specic needs
5.86
V26
Ease of nding ones way around the hotel
6.34
V27
Available and clear information in the hotel
6.17
V28
Offering a variety of facilities
4.77
V29
Typical service quality for hotel category
6.03
15.7 Statistical Process Control

As mentioned earlier, the following factor is very important in customer
service.
Consistency: Are services delivered consistently, i.e., same elapsed time
each occasion?
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The following example gives statistical evaluation of Order to delivery

time of a service process.
An organization has several induction motors. They depend on a service
provider for any maintenance, breakdown or routine overhaul of their
machines. As soon as there is any problem, they inform the service
provider by telephone and he rushes and attends the problem. The
customer expects that the motor must be put back to service in 7 hours +
3 hours from the time of the telephone call.
The chart shows a record of totally 125 occasions during a period of three
years. It is seen that the service provider has taken maximum 9 hours and
minimum 5 hours to put back the motor in working condition. There is not
even a single occasion in which he has exceeded the limit of 10 hours. He
has to travel about 10 kilometers to reach the customer. His planning is so
good that customer is delighted with his service.
Statistical Process Control is a proven method by which the service
quality can be measured objectively. It can be used to measure following
parameters:
1.
2.
3.
4.
5.
Mean time to repair

Mean time between failures
The time/number of rings to pick up the customers phone
Availability of machines
Availability (number) of expert electricians/mechanics to attend the
service against required number (e.g., three are required but only one is
available)
Order to Delivery Time of a Service Process

_
In this example, a control chart - X and s chart - has been plotted for 125
occasions of order to delivery time in hours. The elapsed time from the
receipt of the customers order to the delivery of the product is plotted in
this chart, in the groups of 5.
In the first group of 5 deliveries, 4 values are 7 hours, but one value is 8
hours.
_
The average of these 5 values = X is 7.2 hours, and the standard deviation
s is 0.4, which denotes consistency.
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The control limits are:

UCL = 7.8 hours
LCL = 6.2 hours and the average order to delivery time must lie within
these control limits.
_
Looking at the X chart, it is observed that all the values are within control
limits which is OK.
However, look at the s chart. The values are fluctuating. That means the
consistency is not upto the mark.
In service industry, consistency is the most important key word!
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!
Figure 15.3
15.8 My thrilling experience

I was normally giving my car for repairs to the authorized service station
which was very much renowned for giving excellent service.
I used to take my car to them by driving about 8 kilometers, and they
were completing the job sometimes in 2 days, 3 days etc. and there was
no commitments from them about when the job will be done.
The bill normally used to be hefty, in the range of ` 2000 to ` 2500 and
there was no discussion about that possible.
One day, I decided to get the job done by one of my sons friends who had
his own garage. I phoned him up about it. To my surprise, he came to my
house, took and drove the car to his garage.
Next day, he came to me and told that the cost would be ` 700 and he
wanted that amount to buy some materials. I gave him the amount.
After two days, he completed the repairs and brought back the car to me
and apologized to me because he could not give the car back on the same
day.
This service was something very thrilling for me.
Then I thought he did this courtesy because he was my sons friend.
But afterwards, I came to know that he did this kind of service to all his
customers.
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Activity A
1. Participate in a tour to Kerala arranged by a tour operator. Make an
assessment of their service quality playing a role of their customer.
.
Activity B
1. Go to a nearby four star hotel and visit their kitchen. Make an
assessment of the kitchen process using house of quality. You will be
playing the role of customer and your friend will be playing a role of the
hotel manager along with the hotel staff.
15.10 Summary
In service industries, it is not enough if only the product meets the
customer requirement, but the employee behavior must also meet
customers expectations and must be of a high standard. Thus, the service
concept is a combination of both technical as well as human behavior
aspect, which is very difficult to quantify, measure and control.

1. Make short notes on:
a. Consistency
b. SERVPERF
c. After-sales service
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SERVICE QUALITY

1. Service quality is a comparison of customer expectations with
___________.
a.
b.
c.
d.
Conformance
Performance
Skill
Staff
2. Are the service people trustworthy? Are they believable and honest? Is
their work reliable and dependable? This quality is called as:
a.
b.
c.
d.
Credibility
Competence
Skill
Qualification
3. Gap-created by poor training-between service quality specification and

service delivery:
a.
b.
c.
d.
Gap
Gap
Gap
Gap
1
2
3
4
4. Mean time between failures is related to:

a.
b.
c.
d.
Quality
Reliability
Maintainability
Availability
5. Transportation is a:
a.
b.
c.
d.
Pure service business

Productive activity
Small-scale industry
Public sector activity
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SERVICE QUALITY
Transition from Chapter 15 to 16-17

Until now, you have understood almost the complete information about
TQM and now it is time for all of you to implement TQM in your
organisation.
One completes his study, then he practices his knowledge, and gets some
experience about the subject. He becomes competent in the matter.
However, when the time of implementation comes, he gets confused and
then his activity gets delayed.
This should definitely not happen with you.
So, we are presenting to you the road map for actual implementation of
TQM to you.
We are confident that if you follow these footsteps, you will be a successful
TQM executive.
We have practiced these steps in our organisations and have come out with
flying colours.
Welcome to the road map!
After this chapter, we have presented some innovative methods which you
should practice while implementing TQM.
They are very amazing, I promise!
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SERVICE QUALITY
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
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ROAD MAP TO TOTAL QUALITY MANAGEMENT
Chapter 16
ROAD MAP TO TOTAL QUALITY
MANAGEMENT
Objectives
How to prepare your organization for TQM

How to make TQM as a part of your life
Structure
16.1
16.2
16.3
16.4
16.5
16.6
16.7
16.8
Preamble
TQM Road Map
OEA Model
TQM Implementation Strategy
Summary
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16.1 Preamble
My dear students, by now, you must have totally got an idea as to what
TQM is all about and we are sure that you must be thinking seriously as to
how to implement it in your real life as well as at your place of work.
The purpose of this book will be fulfilled if and only if you have all the
enthusiasm, motivation and willingness to make quality as the main
subject of your career. Let me make it clear that you as an entrepreneur/
occupier/director of the future will be successful if and only if you follow
the path of TQM, and this is no exaggeration.
16.2 TQM Road Map

My friends, what is meant by a road map? It is nothing but a guide to you,
in order to help you to reach your destination without any hurdles and in
time. Parents give education and culture to their child and then show him
the path to become a responsible citizen of our nation. In this book of
TQM, we are playing that role.
In school, our teachers have always told us that whenever you travel to
places such as Delhi, Kolkata etc., always carry the map of the city, and
follow it, and never ever ask the routes to any strangers.
Whenever you want to travel anywhere, you need to know the starting
place, mode of travel and destination. You also need resources such as
money, luggage, food items, dresses, and identity card and so on. You also
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must know what are the constraints such as money, time etc. You also
have to take into account the health issues, if any. You also need to make a
schedule and monitor it accurately. On reaching the destination, you should
celebrate and reward the people who were a part of your team to make
your travel successful.
Step 1:
Similarly, when you want to implement a strong TQM methodology in your
organization, you also need to have information about:
1. Where does the company stand now? What is the present status?
2. Who are your customers? Are they happy? What are the customer
related issues?
3. How do the Balance Sheet and Profit & Loss accounts look like?
4. What are the opportunities? What are the threats?
5. What is the level of employee satisfaction and motivation? Are they
treated as internal customers?
6. What are the workers issues?
7. Who are the competitors? How does your product and service compare
with their product and service? What is your market share?
8. How are the business processes in the company? Are the equipments
pretty old or fairly latest? Is any activity such as continuous process
improvement in place?
Step 2:
Once all this information is available, ask:
1. Where do you want to be?
2. Analyse the market. How does it look?
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3. Do the benchmarking exercise. How far we are comparable with other

manufacturers? How much investment is needed to be in line with or to
be ahead of them?
4. What is your Quality Policy?
5. Do we have enough resources such as money, capable processes, skilled
manpower, required machines and equipment?
6. Do the GAP analysis. What are the Gaps 1, 2, 3, 4 and 5?
7. Get/update the required resources.
Step 3:
1. Calculate the present return on investment
2. Calculate the present cost of quality
3. Assess present involvement of employees
4. Do the Situation Appraisal, and find out all the concerns.
5. Problem Analysis, decision analysis and potential problem analysis
6. Find out the constraints and make an action plan to overcome them.
Step 4:
1. Finalize the methodology and tools required to implement TQM. Always
remember:
(a) TQM stresses on three principles:
i. Customer satisfaction
ii. Employee involvement
iii. Continuous improvements in quality and processes
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(b) Eight essentials of the TQM focus on:

i. Customer satisfaction
ii. Leadership
iii. Quality policy
iv. Organizational structure
v. Employee involvement
vi. Quality cost
vii.Supplier selection and development
viii.Recognition and reward
(c) Seven important points about TQM:
i. Strive for quality in all the things
ii. The customer is the criterion of quality
iii. Improve the process or system by which products are produced
iv. Quality improvement is continuous, never-ending activity
v. Worker involvement is essential
vi. Ground decisions and actions in knowledge
vii.Encourage teamwork and cooperation
Step 5:
1. Prepare a comprehensive training plan with scientific approach on TQM
principles and employee empowerment.
2. See that the top management is fully involved. Training to top is also a
must.
3. Involve all the employees and workers in the training.
4. Evaluate the training.
5. Remember the five Es which also help TQM:
a.
b.
c.
d.
e.
Engineering
Education
Enforcement
Enthusiasm
Evaluation
!335
STEP 6:
1. Prepare the time schedule for the TQM exercise.
2. Make a Gantt chart or CPM Chart.
3. All the elements have to be included, the activities which can run
parallel manner as well as series manner, and there should not be any
loss of time.
4. There should be a weekly meeting for progress monitoring.
5. Periodic auditing
6. The activity if delayed must be informed to CEO and extension taken
from him only.
Step 7:
1. Once we get any success such as a customer becomes happy and
returns with more orders, or a process becomes more capable etc. the
success must be celebrated by rewarding the team members in
presence of CEO.
16.3 OEA Model

Orientation:
Once TQM is introduced,
1. It is necessary to set goals.
2. Set up new organization structures.
3. Management and workers should be informed about what TQM is and
why it is to be implemented.
4. A new TQM planning and facilitation organization to be created.
!336
Empowerment
1. The workers must be given tools to practice TQM and be encouraged to
use the tools and be involved in quality effort.
2. Be empowered to take necessary decisions
3. They must be informed about earlier success stories.
Alignment:
1. Once TQM has started, and is moving ahead, you need pulling power to
direct the activity.
2. To synchronize and align to TQM and goals and practices of the firm.
16.4 TQM Implementation Strategy

1. It has to be understood that the outcome of TQM implementation
depends only on how the implementation process is conducted
whether successfully or not.
2. One has to be very careful in formulating TQM implementation strategy.
3. Ensure commitment of CEO: Budget for TQM.
4. Identification of the needs of the customer.
5. Formulation of Quality metrics.
6. Training
(a) A few potential trainers are to be identified and have to be sent to
outside institutions to be trained as trainers.
(b) They have to be good in counseling.
(c) They will have the qualities required for facilitators.
7. Formulating the job description and specification for every employee.
!337
8. Quality manuals.
9. Formulation of cross-functional quality teams.
(a) If the team formed has specific goals such as solving a
departmental problem, then the members can be from the same
department as in case of quality circles.
(b) Quality improvement programs
10.Development of a database.
(a) Scientific methods of data collection have to be followed and a
database to be developed.
(b) What are METRICS?
i. Measure Everything That Results In Customer Satisfaction
(c) Data based approach is more important than information based
approach or knowledge based approach.
(d) Scientific tools (after development of database)
11.Implementation of 5S strategy
12.Formation of quality policy and goals
13.Formation of bottom-up strategies:
(a) Effective communication from bottom to top has to be strengthened
(b) Improvement of the quality of work done by every individual who is
master of the situation.
(c) All the suggestions for quality improvement should come only from
the individual concerned and it should reach the top officials at the
quickest time possible.
14.Continuous improvement strategies based on benchmarking
!338
15.Standardization of implementation strategies

16.Re-engineering
17.Development of performance appraisal and development system
18.Rewarding system directed by CEO
19.Celebration
Obstacles Which We Have to Overcome
Once an organization embarks on TQM, there will be obstacles to its
successful implementation.
The first eight most common were determined by Robert J. Masters after
an extensive literature search and the last obstacle added by the authors.
They are given below.
1. Lack of Management Commitment
2. Inability to Change Organizational Culture
3. Improper Planning
4. Lack of Continuous Training and Education
5. Incompatible Organizational Structure
6. Isolated Individuals and Departments
7. Ineffective Measurement Techniques and Lack of Access
8. Paying Inadequate Attention to Internal and External Customers
9. Inadequate Use of Empowerment and Teamwork
10.Failure to Continually Improve

Activity A
1. Make your own road map to implement TQM in your college/institute.
!339
Activity B
1. How will you implement TQM in your own house? Consider that you are
running a cottage industry such as making spices etc in your house.
Consider your parents and brothers/sisters/cousins as your internal
customers and buyers of your product as external customers.
16.6 Summary
TQM road map is a tool which helps in systematic approach. As a road map
of a country or a state needs a starting place and a destination, the TQM
road map requires basic information about the present status of the
company analogous to the starting point in the country road map. The end
result or the destination is the goal of the company that has to be achieved
within the given time period. Introduction of TQM in an organization
requires a meticulous plan.

1. Explain three reasons of failure of TQM.
2. Explain what you will do to get sure success in TQM.
3. Explain OEA model.
!340

1. In SWOT analysis, O denotes:
a.
b.
c.
d.
Operation
Zero
Opportunity
Orientation
2. In OEA model, O denotes:

a.
b.
c.
d.
Operation
Orientation
Opportunity
Order
3. Gantt means:
a.
b.
c.
d.
Activity schedule chart

Guide to the activities and techniques
General information
Grinding machine
4. In CPM chart, C denotes:

a.
b.
c.
d.
Central
Critical
Chronology
Criteria
5. For increasing productivity from 30 to 60 parts per day, one has to:
a.
b.
c.
d.
Invest in a better process

Double the workers strength
Reduce the scrap/repair
a and c above
!341
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
!342
INNOVATIVE METHODS FOR TQM
Chapter 17
Objectives
Innovative Methods for Preparation of TQM
Structure
17.1 Acceptable Quality Level (AQL)
17.2 Cost Benefit Analysis
17.3 Quality Policy Deployment
17.4 Matrix Data Analysis
17.5 Lateral thinking
17.6 Affinity Diagram
17.7 Suggestion Schemes
17.8 Check Sheets
17.9 Good Bad Comparison
17.10 Cusum Chart
17.11 Quality Over checking Report
17.13 Summary
!343
17.1 Acceptable Quality Level (AQL)

When it is necessary to manufacture, inspect and deliver in time thousands
of components to the customers, it is neither practicable nor economical to
check the components 100%. However, an acceptable quality level, let us
say, 2.5%, could be agreed upon with the customer and just by inspecting
a small quantity from the lot, a decision could be arrived at whether to
accept the lot or to reject it.
The small quantity to be inspected is called as a sample. It is possible to
prepare a structure of sampling plans, risks and inspection strategies to
ensure that the customer receives the quality that the supplier has agreed
to deliver.
The Acceptable Quality Level., (AQL) can be used for either defective
units, i.e. the units having one or more defects, or the individual defects
itself.
The agreed AQL is defined as the lowest quality level which can be
considered as acceptable. It can be expressed in terms of per cent
defectives or defects per 100 units. The following are the methods of
sampling:
1. Single Sampling: A single sample is taken and a decision is made to
accept, reject or check the whole batch 100% if more than given
number of defectives found in the lot.
2. Double Sampling: A sample is taken, and even if one defective is
found in that sample, a second sample is taken, and if in these two
samples, totally more than given defectives are found, the whole lot is
inspected 100%.
Case Example 1
A company purchases injection nozzles from Bosch. The critical to quality
parameter of the nozzle is the repetition of the injection which can be
tested on a test bench. An acceptable quality level AQL of 2.5%
defectives is agreed with Bosch.
!344
Table 17.1: AQL Sampling Information (BS 6001)

Inspection
level
Code letter of
sampling plan
Sample size
to inspect
Acceptance Criteria
Accept
Reject
Plan G
32
II
Plan J
80
III
Plan K
125
Table 17.2: Operating Characteristic Curves of Sampling Plans G, J

and K Implications in Terms of Sampling Risk
Results of Inspection
Plan G
Plan J
Plan K
Quality of submitted batch 5% chance of

better than AQL
rejection
2.5% chance of
rejection
0.5% chance of
rejection
Quality as bad as 5%
defective
80% chance of
acceptance
78% chance of
acceptance
70% chance of
acceptance
Quality as bad as 10%

defective
37% chance of
acceptance
19% chance of
acceptance
7% chance of
acceptance
The customer will be inspecting the injection nozzles so that defective units
are to be inspected. The nozzle is either good or bad. The normal
inspection level has been selected. The batch size is 1000 nozzles
manufactured in a continuous process.
If we use Plan G, we will be inspecting only 32 units and will be taking a
decision whether to accept a lot or not. If we use Plan K, we will be
inspecting 125 units from the lot and will be taking a decision. Obviously,
the risk which we take in passing the lot to the customer will be less if we
check as per Plan K. Hence, we have to make a judgment as to which plan
is best for our use, considering the manufactured quality level of the
components based on SPC or 100% inspection.
Table 17.3: Sampling Plan Used in Bosch
!345
Order qty
n
<100
100%
101-250 251-500 501-1000 1001-2000 2001-5000

100%
250
350
450
550
P90
0.03
0.02
0.015
0.015
P10
0.7
0.5
0.5
0.41
D max
0.1
0.1
0.1
0.06
100
120
160
200
250
P90
0.07
0.06
0.06
0.05
0.04
P10
2.0
1.5
1.2
1.0
0.9
D max
0.3
0.23
0.22
0.18
0.14
c
Test
EX
100%
c
EV
EII
EI
EOX
45
55
70
90
110
130
P90
0.18
0.18
0.15
0.12
0.10
0.08
P10
3.8
3.8
2.8
2.3
2.0
1.7
D max
0.6
0.6
0.5
0.39
0.32
0.27
20
24
30
40
50
60
P90
0.4
0.42
0.36
0.26
0.21
0.18
P10
10
8.1
5.4
4.4
3.8
D max
1.6
1.4
1.2
0.9
0.7
0.6
14
14
14
14
14
14
P90
0.8
0.8
0.8
0.8
0.8
0.8
P10
15
15
15
15
15
15
D max
2.5
2.5
2.5
2.5
2.5
2.5
!346
EOV
EOI
P90
1.8
1.8
1.8
1.8
1.8
1.8
P10
32
32
32
32
32
32
D max
5.5
5.5
5.5
5.5
5.5
5.5
P90
3.5
3.5
3.5
3.5
3.5
3.5
P10
54
54
54
54
54
54
D max
10
10
10
10
10
10
= Sample
= Acceptance Number
P90 = AQL = Percentage of Defective Parts in the Lot (For 90%

Acceptance Probability)
P10 = Percentage Of Defective Parts In The Lot (For 10% Acceptance
Probability)
D
i
max
= Average % of outgoing defective parts if lot is accepted

= number of defective parts = decision if i = more than 0, reject the
lot
Take samples from various lots of the order

Use test EOX, EOV, EOI only if production capability is high.
In the above Sampling Plan, let us discuss for example, Plan EOX.
1. In this Plan, (n=) 14 components are inspected from the lot of any size
up to 5000.
!347
2. c = 0 means we should not find any defective in this sample; otherwise

the lot has to be inspected 100%.
3. If in this way, we accept the lot (P90), there is 90% probability that the
lot might have 0.8% defectives.
4. If in this way, we accept the lot (P10), there is 10% probability that the
lot might have 15% defectives.
5. If in this way, we accept the lot (Dmax), there is a probability of
maximum 2.5% defectives in the outgoing lot.
6. We must select one of the above plans depending upon the risk we want
to take in accepting the lot, and also depending upon the AQL.
17.2 Cost Benefit Analysis

Case Example 2
There was a battery of 20 imported internal grinding machines which were
bottleneck machines because the total capacity of the machines in three
shifts was just sufficient to manufacture the targeted output. One of the
O rings used in the machine spindles was breaking frequently and the
lost hours due to this problem was 2 hours per machine per week and so
the targeted production was not achieved. The price of the O ring was ` 5
only.
It was then decided to import the O ring from Sweden. The price of the
imported O ring was ` 60. The O ring once fitted lasted for three months.
The Cost Benefit Analysis was as under:
Consumption of the O ring:
Local O Ring:
20 machines 4 per month ` 5 = ` 400 per month

Imported O Ring:
20 machines 1 per three months ` 60 =` 1200 per three months

= ` 400 per month
!
!348
It is interesting that the imported O ring though very expensive, turned out
to be having same cost of consumption per month, thanks to the long life
of the ring.
But look at the major benefit given by this imported O ring. The lost time
of 2 hours per machine per week was saved and the targeted production
was achieved.
Many times, in order to save the defects due to human errors making, it
necessary for us to rework 20% to 25% components, it is necessary to
invest into an expensive machine. However, if it really produces defect-free
components, the cost of the machine can be recovered within one or two
years.
Hence, we must be conversant with Cost Benefit Analysis so that we are
not afraid of investing into the necessary equipment.
17.3 Quality Policy Deployment

The Policy of the Corporate Office is, let us say, to delight the customer.
Now, this policy has to be made successful in every department of the
company equally well.
In order to accomplish this goal of the Corporate Office, the departmental
goals should be as under:
Manufacturing department: To reduce the cost of poor quality,
particularly warranty cost and internal failure cost.
Accounts department: The Invoices to be prepared without any errors.
Packing and Delivery section: To deliver the goods in time and the
quality of transportation should be so good that there will be no transit
damages.
Maintenance department: Reduce machine breakdowns by 20% by
implementing and strengthening preventive and predictive maintenance
systems.
!349
Service department: To attend the service calls consistently within 8

hours by sending expert, competent and polite service personnel.
Steps:
1. Define short-term and long-term goals of the organization
2. Identify measurable goals
3. Decide the critical processes in achieving these goals
4. Teams to agree on performance indicators at appropriate stages of the
process.
17.4 Matrix data analysis

Case Example 3
CAR: Effectiveness of various brands.
Figure 17.1
!350
In the above diagram, we can see that the Car Brand 1 is in the upper right
position, which denotes high comfort level and high running cost/cost of
maintenance.
Car Brand 2 and 3 are in the lower right position, which denotes high
comfort level and low running cost/cost of maintenance.
Car Brand 4, 5 and 6 are in the lower left position, which denotes low
comfort level and low running cost/cost of maintenance.
Conclusion
1. Brands 2 and 3 having high comfort level as well as low running as well
as maintenance cost and hence customers will prefer to buy these cars.
2. Brand 1 is not preferred by customers because of high running as well
as maintenance cost.
3. Brand 4, 5 and 6 are not preferred at all.
17.5 Lateral thinking

Lateral thinking is solving problems through an indirect and creative
approach, using reasoning that is not immediately obvious and involving
ideas that may not be obtainable by using only traditional step-bystep logic. The term was coined in 1967 by Edward de Bono.
Case Example 4
In the following example, six eggs are kept in a basket. Six people take
one egg each. One egg is left in the basket. One could say that it is
impossible. But lateral thinking says it is possible.
This is because after five people take one egg each, one lady takes the last
egg which is still in the basket.
!351
!
Figure 17.2
While solving the problems we must think laterally, and think out of the
box.
Case Example 5
In the following diagram, six points are plotted which have to be joined by
using four straight lines without lifting our hand. Initially, it looks
impossible. However, when we go out of the box, as shown by the arrows,
then only we can solve this problem.
!352
!
Figure 17.3
17.6 Affinity Diagram

It is an activity of organizing large amounts of data in groups according to
some form of natural affinity.
The affinity diagram is a business tool used to organize ideas and data.
The tool is commonly used within project management and allows large
numbers of ideas stemming from brainstorming to be sorted into groups,
based on their natural relationships, for review and analysis. People have
been grouping data into groups based on natural relationships for
thousands of years; however the term affinity diagram was devised by Jiro
Kawakita in the 1960s and is sometimes referred to as the KJ Method.
Process
1. Record each idea on cards or notes.
2. Look for ideas that seem to be related.
3. Sort cards into groups until all cards have been used.
Once the cards have been sorted into groups, the team may sort large
clusters into subgroups for easier management and analysis. Once
completed, the affinity diagram may be used to create a cause and
effect diagram.
!
!353
In many cases, the best results tend to be achieved when the activity is
completed by a cross-functional team. The process requires becoming
deeply immersed in the data, which has benefits beyond the tangible
deliverables.
17.7 Suggestion Schemes
!
Figure 17.4
To generate ideas for improvement
1. Set up a steering group to oversee the process.
2. Delegate as far down as practical the decision on whether the decision
should be implemented or not.
3. Give awards to supervisors and managers whose employees generate
more ideas.
4. In the early stages, go for quantity of ideas, not quality.
!354
5. Try to set themes for ideas and change the themes regularly.
6. Ensure that ideas are acknowledged quickly and the person generating
the idea is told whether it is to be implemented and if not why not.
7. Look for the reasons to say yes rather than no.
8. In the early stages be prepared for ideas to be about environmental
aspects rather than operational ones.
A head office function of a major service organisation introduced a
suggestion scheme as a part of its TQM process. In the first year, 18
suggestions per employee were generated and 90 per cent were acted
upon. The organization began a suggestion of the month award and
suggestion of the year award and the scheme flourished.
17.8 Check sheets

To collect data when number of times a defect or value occurs is important.
During an attempt to reduce unauthorised absence from work, a team
collected data on the day of the week that absences occurred. The check
sheet shown in the following figure gives the results of the study over a six
month period. The team used the data in consultation with departmental
managers to crack down on absenteeism.
Table 17.4
Day
Absences
IIII
IIII
Total
M.P. Jantre
IIII
IIII
S.K. Jadhav
IIII
P.K. Shinde
S.T. Chavan
K. Balan
IIII
I
IIII
20
3
10
It is found that M.P. Jantre was frequently absent.
!355
On a cylindrical grinding machine, the shaft diameters of various

components having tolerance of 9 mm +/-0.1 mm were recorded as
follows:
Table 17.5
Dimension
No. of Components
8.98
IIII
IIII
8.99
IIII
9.00
IIII
IIII
9.01
IIII
IIII
9.02
IIII
Total
13
IIII
I
IIII
I
IIII
27
13
5
17.9 Good Bad Comparison

The techniques of component search and paired comparison are presented
here. Significant differences between various sub-assemblies or system
conditions can be determined with them.
Component search: At least one good and one bad unit are available. The
units can be dismantled.
1. The good and bad units are dismantled and then re-assembled. If there
is no problem in reassembling, proof is provided that the assembly
process does not affect the problem. Compare before and after
assembling the units.
2. On the BAD unit, individual components are replaced until the
component causing the failure is found. If results are not clear, replace
two components at a time.
3. The components which may be causing failure are installed in the GOOD
unit so that the cause of failure can be established.
Paired comparison: Several good and several bad units are available.
They do not necessarily have to be capable of being dismantled without
destroying them.
!
!356
1.
2.
3.
4.
5.
Select a good unit and a bad unit

Determine differences
Test other pairs
Analyze differences and evaluate them
The good and bad units are compared in pairs until the difference is
significant.
Example:
The cylinder rivets from a supplier result in poor riveting.
Table 17.6
Drawing data
No difference
Hardness
No difference
Spectral analysis
No difference
Ground section
No difference
Pressure test
A significant difference is
found in break off
behavior
These tests of good and bad

rivets did not show any results
17.10 Cusum Chart

Cusum Charts are particularly useful for plotting daily or weekly averages.
In a company, on a cylindrical grinding operation, a worker has to make
1050 parts in a shift in order to achieve 100% efficiency. If he makes more
than this quantity, then he gets an incentive for the extra components
made. For example, if he makes 1260 pieces, his efficiency is 120% and he
gets an incentive for that.
The workers were making only 1155 pieces and so the efficiency was 110%
only. So, the industrial engineering department along with process planning
department made an improvement in material handling and loading
system. The company decided to use a cusum to monitor individual
productivity to assess how effective the new improved system was. The
target value chosen from historic data for each workers productivity was
120%. The data collected and cusum values are given in the following
Table 17.7.
!357
Week No.
Productivity %
Cusum value
XT
(X T)
109
-11
-11
110
-10
-21
112
-8
-29
120
-29
112
-8
-37
123
-34
123
-31
115
-5
-36
125
-31
10
121
-30
11
126
-24
12
125
-19
13
123
-16
14
125
-11
15
125
-6
16
125
-1
17
126
18
123
19
127
15
20
123
18
21
124
22
22
125
27
23
128
35
24
129
44
25
125
49
26
127
56
!358
The cusum chart clearly shows a change following week 9 when the
improved system was implemented. From week 1 to week 8, the
productivity value was approximately between 109% to 115% only
sometime being more than that. From week 9, the slope of the cusum
changed, corresponding to a new value of more than 120%. So, it can be
said that the new system was effective.
!
Figure 17.5
17.11 Quality over-checking report

The finished goods stock is over-checked periodically and a report is made
for corrective actions.
Table 17.8
!359
Nasik
From: QA to
all concerned
Quality Over-checking Report
Report No. 245/2013
Product: Element type A

Part No. 9 411 038 384 MFD 768
Q test
(dimensional,
visual,
functional)
done
Sample size
Z test
(endurance)
done
metallography
done
25
Sr. No.
Functional
Defects
Result
Defect
Critical
Defect
class
1
Defect
class
2
Defect
class
3
15
Defect
class 1
Defect
class
2
Defect
class 3
Correcti
ve
actions
1.1
Shaft
clearance
more
Spec 0-220
actual
300cc
1.2
Plunger
shaft taper
more
Spec 1
actual up to
1.4
Dimensional
2.1
Foot length
more
Spec
20.6+0.1
mm actual
20.73
2.2
Vane
thickness
more
Spec
7.0-0.022
is up to
7.007
Visual
Ok
Form errors
!360
4.1
Shaft
roundness
Spec 0.5
actual 1
4.2
Shaft
roughness
Spec 0.7
actual 0.79
metallograp
hy
Ok
Remarks: Stores stock frozen
No
Corrective actions
Yes
Stores stock checked
Yes
Advance information given dated _______________

Activity A
1. You are in a mall and are purchasing rice. Inspect the rice by AQL
sampling information (BS 6001) Plan K. Defect criteria is broken grain
and AQL level is 2.5%. Tabulate your results.
Inspection
level
Code letter of
sampling plan
Sample size
to inspect
Acceptance Criteria
Accept
Reject
Plan G
32
II
Plan J
80
III
Plan K
125
!361
Activity B
1. In the above example, check 250 grains of rice 100% and compare the
results with those of activity A.
17.13 Summary
These innovative methods will give an insight into better preparation for
TQM.

1. You have to decide whether to buy a new car or to retain your five-year
old car which is in excellent condition. Explain Cost Benefit Analysis in
both the cases.
2. Make a matrix data analysis between the various brands of toothpastes.
3. You have ten pens of same brand say TRIMAX. Two of these pens are
old, defective and also not working. Make a good bad comparison. Will
you throw these pens away or retain them?

1. _____________ are particularly useful for plotting daily or weekly
averages.
a.
b.
c.
d.
Cusums
CBA
AQL
Sampling plans
2. The agreed AQL is defined as the _____________ quality which can be

considered as acceptable.
!362
a.
b.
c.
d.
Best
Good
Worst
Concessional
3. To collect data when number of times a defect or value occurs is

important.
a.
b.
c.
d.
Check sheets
FMEA
CBA
Matrix
4. ______ is solving problems through an indirect and creative approach,

using reasoning that is not immediately obvious and involving ideas that
may not be obtainable by using only traditional step-by-step logic.
a.
b.
c.
d.
Brainstorming
Lateral thinking
Vertical thinking
Horizontal thinking
5. It is an activity of organizing large amounts of data in groups according

to some form of natural relationship.
a.
b.
c.
d.
Brainstorming
Cause and effect diagram
Fault tree analysis
Affinity diagram
!363

The successful companies who have accomplished TQM are eligible for
awards and every organization must strive to get these awards.
The following chapter gives you information about two of the awards.
Even if you do not want to get the awards, the guidelines will let you know
whether you are on the right track of implementation of TQM.
These are international guidelines and will surely show you the way if you
are in any kind of difficulty in implementation of TQM.
Go through this chapter and know for yourselves where you stand!!
!364
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
!365
QUALITY AWARDS
Chapter 18
QUALITY AWARDS
Objectives
The purpose of this chapter is to give you information about prestigious

awards such as Deming Prize and Malcolm Baldrige National Quality
Award given for excellence in TQM. It is expected that you prepare for
TQM so well that one you could aspire for one of these awards, or at
least prepare yourself by using the principles based on which these
awards are given.
Structure
18.1 Preamble
18.2 Road Map to Deming Prize
18.3 Deming Prize Winners in India
18.4 Malcolm Baldrige National Quality Award
18.5 Road Map to Malcolm Baldrige National Quality Award
18.6 Which Organizations Have Received the Award?
18.7 When Were the Education and Health Care Categories Established?
18.9 Summary
!366
QUALITY AWARDS
18.1 Preamble
!
W.E. Deming, one of the foremost experts of quality control in the United
States, was invited to Japan Union of Scientists and Engineers (JUSE) in
July 1950. He gave lectures about his eight day course on Quality Control
at the auditorium of the Japan Medical Association in Tokyo. The transcript
of the lectures was distributed at a charge. Deming donated his royalties to
JUSE. In appreciation, M.D. of JUSE proposed using the donation to fund a
prize to commemorate Demings contribution and friendship and to
promote the continual developmental work in Japan. The JUSE Board of
Directors unanimously made a resolution to establish the Deming Prize.
The Deming Prize has exerted an immeasurable influence directly or
indirectly on the development of quality control management in Japan.
The Deming Prize examination does not require applicants to conform to a
model provided by Deming Prize Committee. Rather, the applicants are
expected to understand their current situation, establish their own themes
and objectives, and improve and transform themselves company-wide.
The Demings Prize Committee views the examination process as an
opportunity for Material Development rather than examination.
!367
QUALITY AWARDS
!
Prof. Deming and President Fukio Nakagawa at the Demings Prize
Award Ceremony 1965
18.2 Road Map to Deming Prize
!
The Deming Prize check list focuses both on process and results. There are
at least three categories that look at the process: analysis, standardization
and control.
!368
QUALITY AWARDS
1. Policy
2. Organization and its Management
a.
b.
c.
d.
e.
Committees and their activities

Utilization of staff
Utilization of QC Circle activities
Interdivisional co-operation
Delegation of authority
3. Education and distribution of information and knowledge so that it

reaches many people or organizations
4. Collection, distribution and use of information on quality
a. Collection of external information
b. Transmission of information between divisions
c. Statistical analysis of information, data processing
5. Analysis
a.
b.
c.
d.
e.
f.
g.
Selection of key problems and themes

Analytical approach
Utilization of statistical methods
Linkage with proper technology
Quality and process analysis
Utilization of analytical results
Improvement suggestions
6. Standardization
7. Control
8. Quality assurance
a. Procedure for development of new products and services: analysis
and upgrading of quality, checking of design, reliability, safety,
immunity from product liability
b. Process design, process analysis, process control and improvement
c. Process capability
!369
QUALITY AWARDS
d.
e.
f.
g.
h.
i.
j.
Instrumentation, gauging, testing and inspecting

Equipment maintenance
Control of sub-contracting, purchasing and services
Quality assurance system and its audit
Utilization of statistical methods
Evaluation and audit of quality
Actual state of quality assurance
9. Measurement of results
a. Results in quality, services, delivery time, costs, profits, safety,
environment
b. Measures for overcoming defects
10.Planning for future
a. Long-term plans
b. Measures for overcoming deviations
18.3 Deming Prize Winners in India

1998
Sundaram-Clayton Limited, Brakes Division
2001
Sundaram Brake Linings Limited.
2002
TVS Motor Company Limited

Hi-Tech Carbon GMPD
2003
Brakes India Limited, Foundry Division

Mahindra and Mahindra Limited, Farm Equipment Sector
Rane Brake Lining Limited
Sona Koya Steering Systems Limited
Birla Cellousic, Kharach A Unit of Grasim Industries Limited
(India)
2004
SRF Limited, Industrial Synthetics Business

Lucas TVS Limited
Indo-Gulf Fertilisers Limited
!370
QUALITY AWARDS
2005
Krishna Maruti Limited, Seat Division

Rane Engine Valves Limited
Rane TRW Steering Systems Limited, Steering Gear Division
2007
Asahi India Glass Limited, Auto Glass Division (India)

Rane (Madras) Limited (India)
Reliance Industries Limited, Hazira Manufacturing Division (India)
2008
Tata Steel Limited (India)
2010
National Engineering Industries Limited (India)
2011
Sanden Vikas (India) Limited
2012
The Deming Grand Prize

Tata Steel Limited (India)
Mr. H. M. Nerurkar, Managing Director
Rane (Madras) Limited (India)
Mr. L. Ganesh, Chairman Lucas TVS Limited (India)
Mr.T. K. Balaji, Managing Director
Deming Distinguished Service Award for Dissemination and
Promotion (Overseas)
Mr. Janak Mehta
Chairman & Managing Director, TQM International Pvt. Ltd.
The Deming Prize
SRF Limited, Chemicals Business (India)
Mr. Roop Salotra, President and CEO
Mahindra & Mahindra Limited, Farm Equipment Sector, Swaraj
Division (India)
Mr. Bishwambhar Mishra, Chief Executive
18.4 Malcolm Baldrige National Quality Award
!371
QUALITY AWARDS
!
1. The Malcolm Baldrige National Quality Award recognizes US
organizations in the business, health care, education, and non-profit
sectors for performance excellence.
2. The Baldrige Award is the only formal recognition of the performance
excellence of both public and private US organizations given by
the President of the United States.
3. It is administered by the Baldrige Performance Excellence Program,
which is based at and managed by the National Institute of Standards
and Technology, an agency of the US Department of Commerce.
4. Up to 18 awards may be given annually across six eligibility categories
manufacturing, service, small business, education, health care, and
non-profit.
5. As of 2011, 90 organizations had received the award.
6. The Baldrige National Quality Program and the associated award were
established by the Malcolm Baldrige National Quality Improvement Act
of 1987 (Public Law 100-107). The program and award were named
for Malcolm Baldrige, who served as United States Secretary of
Commerce during the Reagan administration.
!372
QUALITY AWARDS
7. In 2010, the program's name was changed to the Baldrige Performance

Excellence Program to reflect the evolution of the field of quality from a
focus on product, service, and customer quality to a broader, strategic
focus on overall organizational quality called performance excellence.
8. The award promotes awareness of performance excellence as an
increasingly important element in competitiveness. It also promotes the
sharing of successful performance strategies and the benefits derived
from using these strategies.
9. To receive a Baldrige Award, an organization must have a role-model
organizational management system that ensures continuous
improvement in delivering products and/or services, demonstrates
efficient and effective operations, and provides a way of engaging and
responding to customers and other stakeholders. The award is not given
for specific products or services.
18.5 Road Map to Malcolm Baldrige National Quality Award
!
What are the Baldrige Criteria?
The Baldrige Performance Excellence Criteria are a framework that any
organization can use to improve overall performance.
Seven categories make up the award criteria:
1. Leadership: Examines how senior executives guide the organization
and how the organization addresses its responsibilities to the public and
practices good citizenship.
!
!373
QUALITY AWARDS
2. Strategic Planning: Examines how the organization sets strategic

directions and how it determines key action plans.
3. Customer and market Focus: Examines how the organization
determines requirements and expectations of customers and markets.
4. Information and Analysis: Examines how the management uses
effectively and analyzes data and information to support key
organization processes and the organizations performance management
system.
5. Human Resource Focus: Examines how the organization enables its
workforce to develop its full potential and how the workforce is aligned
with the organizations objectives.
6. Process Management: Examines aspects of how key production/
delivery and support processes are designed, managed and improved.
7. Business Results: Examines the organizations performance and
improvement in its key business areas:
a.
b.
c.
d.
e.
f.
customer satisfaction,
financial and marketplace performance,
human resources,
supplier and partner performance, and
operational performance
The category also examines how the organization performs
relative to competitors.
18.6 Which Organizations have Received the Award?

Which Organizations have Received the Award?
2002:
Motorola Inc. Commercial, Government and Industrial Solutions

Sector, Branch Smith Printing Division and SSM healthcare
2001:
Clarke American Checks Incorporated, Pals sudden service, Chugach

School district, Pearl River school district, University of WinconsinStout
!374
QUALITY AWARDS
2000:
Dana Corp. Spicer Driveshaft Division, KARLEE Company Inc.,

Operations Management Inc. and Los Alamos National Bank
1999:
ST Micro electronics, Inc.-Region Americas, BI, The Ritz-Carlton Hotel

Co., LLC, and Sunny Fresh Foods
1998:
Boeing Airlift and Tanker Programs, Solar Turbines Inc. and Texas
Nameplate Co. Inc.
1997:
3M Dental products Division, Solectron Corp., Merrill Lynch Credit

Corporation, and Xerox Business Services
1996:
ADAC Laboratories, Dana Commercial Credit Corporation, Custom

Research Inc. and Trident Precision Manufacturing Inc.
1995:
Armstrong World Industries Building Products Operation and Corning

Telecommunication Products Division
1994:
AT&T Consumer Communications Services, GTE Directories Corp. and

Wainwright Industries Inc.
1993:
Eastman Chemical Co. and Ames Rubber Corp.
1992:
AT&T Network Systems Group/Transmission Systems Business Unit,

Texas Instruments Inc., Defense Systems and Electronics Group, AT&T
Universal Card Services, The Ritz Carlton Hotel Co. and Granite Rock
Company
1991:
Solectron Corp., Zytec Corp. and Marlow Industries
1990:
Cadillac Motor Car Division, IBM Rochester, Federal Express Corp. and
Wallace Co. Inc.
1989:
Milliken & Co., and Xerox Corp. Business Products and Systems
1988:
Motorola Inc., Commercial Nuclear Fuel Division of Westinghouse

Electric Corp. and Globe Metallurgical Inc.
18.7 When were the education and health care categories

established?
Both categories were introduced in 1999. Since then, a total of 47
applications have been submitted in the education category and 42 in the
health care category.
!375
QUALITY AWARDS
Any for-profit or not-for-profit public or private organization that provides

educational or health care services in the United States or its territories is
eligible to apply for the award.

Activity A
1. Consider that you are working in a multinational company and you are
the in-charge of preparation for Deming Prize. Make your road map for
this activity in the form of a flow chart.
.
Activity B
1. Make a research paper about role of the organization about customer
satisfaction in case of preparation for Deming Award.
18.9 Summary
The criteria for winning the above-mentioned awards give you world-class
guidance about preparation for TQM in your organization. Every employee
must master these criteria.

1. Explain the contribution of Deming in todays advanced world of quality
and productivity.
2. What advantage an organization will get by preparing for Deming
Award?
3. Make a comparative chart of the criteria of Deming prize and Malcolm
Baldrige award. Underline the highlights.
!376
QUALITY AWARDS

1. The Deming Prize checklist focuses both on process and ___________.
a.
b.
c.
d.
People
Results
Factory
Customer
2. The Deming Prize has exerted an immeasurable influence directly or

indirectly on the development of quality control management in
___________.
a.
b.
c.
d.
America
England
India
Japan
3. Following company in India has received Deming Prize:

a.
b.
c.
d.
Robert Bosch
Kirloskar Electric
Rane Madras
Tata Motors
4. W.E. Deming, one of the foremost experts of quality control in the

United States was invited to ___________ in July 1950.
a.
b.
c.
d.
Rane Madras
Daimler Benz
Motorola
JUSE
5. Malcolm Baldrige had served as ___________ during the Reagan

administration.
a.
b.
c.
d.
UN Secretary General
US Secretary of Commerce
Minister of States
A Senator
!377
QUALITY AWARDS
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
!378
LATEST INFORMATION ON TQM
Chapter 19
Objectives
Latest Information on TQM
Structure
19.1
19.2
19.3
19.4
Sustainability as a Business Practice: The New TQM?

Demings Success Puts Quality on the Map
Exciting Trend
Achievement of TATAs
!379
19.1 Sustainability as a Business Practice: The New TQM?

An Article by Mike Fraser
Sustainability means use of natural resources kept at steady level that is
not likely to damage the environment.
There is a unique twist present in current business opportunities one not
directly considered in the origins of TQM. Sustainability exciting and
compelling, making the world a better place.
It is a much different world filled with incredible innovations and
opportunities. Technological and regulatory changes, for example, have
provided opportunities for a companys stakeholders to have a much
clearer view of the companys operations. And with a belief not seen since
those TQM glory days, businesses are finding it makes sense to embrace
this need for stakeholder transparency and use it in a way to collaborate
and uncover opportunities to continuously improve.
I believe it is this altruistic (that means concern for the happiness and
welfare of other people rather than yourself) aspect of Sustainability
coupled with its inherent operational and organizational benefits that
business, academia and government have been embracing the growing
global awareness that sustainability is good business. It is about good
business.
19.2 Demings Success Puts Quality on the Map

Going Green can be greener to the bottom line if you use the lens of
sustainability to uncover long-hidden opportunities within your business
and its supply chain.
Think back to the work of W. Edwards Deming, one of the fathers of quality
improvement in business. He made dramatic strides in the 1950s and
1960s within Japanese industry before turning his talents to companies like
Ford in the early 1980s and helping provide a process-driven foundation
that helped turn around woefully lagging companies.
He based his quality improvement efforts on a simple premise:
When people and organizations focus primarily on quality, quality tends to
!
!380
increase and costs decline over time. Ive seen it succinctly stated in the
following formula: Quality = Results divided by Costs.
Ironically, Deming also found that when people and organizations focus
primarily on costs, costs tend to rise while quality declines over time. Odd,
isnt it? It is same as the case of the muscle-bound baseball player who
focuses so intently on hitting the ball that he squeezes the bat with all his
might and then is consistently unable to make contact with the ball.
The good news in all of this, then, is that the true ROI of a well-executed
Sustainability/Quality initiative has compounded since Demings initial
work. The potential returns are enhanced today by our ability to measure
the results as defined by his formula and those results have expanded
to include elements not even considered in Demings original efforts.
Sustainable companies endure over time, and they do so by delivering
consistent operating performance, identifying and executing continuous
improvements, and heres whats new and improved reducing their
environmental impact on our planet by measuring and reducing their
carbon, water and waste footprints.
19.3 Exciting Trend

Sustainability is not an event; it is not a one-hit wonder. This is a defining
moment within business, and the early adopters are the ones who are
encountering the challenges that greet most leaders. However, theyll also
be the ones to reap the corresponding rewards the long-term benefits
that come from stakeholder respect and a more efficiently run business.
Sustainability is a mother tongue of organizational and technological
innovations that yield both bottom-line and top-line returns. Becoming
environment-friendly lowers costs because companies end up reducing the
inputs they use. In addition, the process generates additional revenues
from better products or enables companies to create new businesses. In
fact, because those are the goals of corporate innovation, we find that
smart companies now treat sustainability as innovations new frontier.
Compare that with the countless observations on TQMs impact on a failing
Ford Motor Company in the early 1980s. See the parallels?
!381
The Deming-led initiative delivered countless organizational and

technological innovations that ultimately allowed the company to soar to
new levels over the following 20 years. By focusing on the key elements
that ultimately embedded quality within Fords fabric, Ford became
synonymous with Quality.
Improving product and service quality, reducing costs, and cooperating/
collaborating with suppliers all formed key elements of that successful
effort, and can also be used to describe revolutionary product sustainability
efforts currently underway at some of the worlds leading retailers and their
suppliers.
19.4 Achievement of TATAs

JAMSHEDPUR: 10TH February, 2012:
Tata Steel bagged the Sustainability Prize at the CII-ITC Sustainability
Award 2011s ceremony in the Category A for Large Business Organization
(for companies with turnover of above ` 500 crores). The prestigious
ceremony was held at Delhi today in the August presence of senior
government officials such as Mr. Anand Sharma, Union Minister of
Commerce, Industry and Textiles, Government of India and several other
dignitaries from various corporate houses.
!
L-R Mr. Sanjiv Paul (VP, CS, Tata Steel Ltd.), Mr. Y.C. Deveshwar
(Chairman, ITC) and Mr. Anand Sharma (Union Minister of Commerce
and Textiles)
!382
The annual CII-ITC Sustainability Awards are given out to recognize and
reward excellence in economic, environmental and social performance.
They are conferred to Indian businesses that demonstrate excellent
performance in the area of Sustainable Development.
On behalf of the company, Mr Sanjiv Paul, Vice President, Corporate
Services, Tata Steel received the Sustainability Prize from the hands of Mr.
Anand Sharma, Union Minister of Commerce, Industry and Textiles,
Government of India. Reiterating the values that the company has always
adopted as a benefactor for the community, Mr Paul said, Sustainable
development means valuing the interdependence of environmental, social
and economic aspects so as to aim at improving the quality of life for
everyone, now and for generations to come.
Further he added, In Tata Steel, we understand that whatever choices we
make and all the actions that we pursue today impact everything in future.
I can proudly state that we have build on a legacy of caring and our
commitment is based on achieving business success through responsible
social, environmental and economic practices that help build happy
communities. I would like to extend my heartfelt thanks to CII-ITC
Sustainability Awards for acknowledging Tata Steels efforts in regards to
the same.
Tata Steel had already received the Sustainability Prize in the year 2006,
2007, and 2008 for Large Business Organization; and in the year 2009 and
2010 for Commendation for Significant Achievement.
Tata Steels CSR initiatives have been recognized with many awards. Since
2006, the company has showcased an exceptional track record of receiving
this coveted award initiated by the CII-ITC Centre of Excellence for
Sustainable Development. Recently, the Company has received the CNBC
Asias Corporate Social Responsibility Award at CNBC-TV 18 India Business
Leader Awards (IBLA) and the corporate social responsibility award at the
seventh edition of NDTV Profit Business Leadership Awards.
In addition to this, Tata Steel has been recognized by other prestigious
awards like Safety and Health Excellence Recognition Award 2010 by the
World Steel Association, was adjudged as the winner in Corporate Social
Responsibility at the Procurement Leaders Forum 2011 and honoured with
the Rashtriya Khel Protsahan Puruskar for the second consecutive year in
!383
2010. Other esteemed awards include the CSR Excellence Award 2010 by
ASSOCHAM, National CSR Committee and CSR Organizing Committee; the
Businessworld-FICCI-SEDF Corporate Social Responsibility Award 2009; the
Best Corporate Social Responsibility Practice Award at the 6th Social and
Corporate Governance Awards 2010 by the Bombay Stock Exchange.
Established in 1907 as Asias first integrated private sector steel company,
Tata Steel Group is amongst the leading steel manufacturers in the world
with an annual crude steel capacity of over 28 million tonnes per annum
(mtpa). It is now the worlds second-most geographically-diversified steel
producer, with operations in 26 countries and a commercial presence in
over 50 countries. The Tata Steel Group, with a turnover of US $ 26.64
billion in FY 11, has over 81,000 employees across five continents and is a
Fortune 500 company. The Groups vision is to be the worlds steel industry
benchmark in Value Creation and Corporate Citizenship through the
excellence of its people, its innovative approach and overall conduct. In
2008, Tata Steel India became the first integrated steel plant in the world,
outside Japan, to be awarded the Deming Application Prize 2008 for
excellence in Total Quality Management.
CII-ITC Centre of Excellence for Sustainable Development
The CII-ITC Centre of Excellence for Sustainable Development is an
institution that creates a conducive, enabling climate for Indian businesses
to pursue sustainability goals. It creates awareness, promotes thought
leadership, and builds capacity to achieve sustainability across a broad
spectrum of issues. A pioneering effort by CII, the Centre is the
fountainhead of ideas and practices to promote sustainability.
It enables Indian businesses become sustainable, and channels the
potential of Indian industry to power Indias agenda for inclusive growth
and sustainable development. It enables businesses transform themselves
by embedding the concerns of sustainable development into their own
strategies and processes. The Centre recognizes businesses that make
outstanding contributions to sustainable development. In the process, they
become role models for Indias corporations in adopting cutting-edge
practices to promote sustainable development.
!384

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TOTAL QUALITY MANAGEMENT

Welcome to the Wonderland of Quality

Wonderland of Quality: Continues

Total Quality Management Philosophy

Problem Solving and Decision Making

People: Total Employee Involvement

Measurement Systems Analysis

Quality Management System

Road Map to Total Quality Management

Innovative Methods for TQM

Latest Information on TQM

WELCOME TO THE WONDERLAND OF QUALITY

Quality work in every aspect of life

WELCOME TO THE WONDERLAND OF QUALITY

1.2 Our Life

WELCOME TO THE WONDERLAND OF QUALITY

Poor education level in spite of high expenditure

1.3 Defining Quality

WELCOME TO THE WONDERLAND OF QUALITY

External Customers: current, prospective and lost customers.

WELCOME TO THE WONDERLAND OF QUALITY

So, the definition, viz., Customers perception of the degree to which

Low customer satisfaction

WELCOME TO THE WONDERLAND OF QUALITY

8. Higher inventory costs

WELCOME TO THE WONDERLAND OF QUALITY

Periodical calibration of instruments

1.4 Evolution of Total Quality Management

Process Performance data