QUALITY MANAGEMENT

About the Course…

 Introduction :
 Quality control functions:
 TQM – philosophy, quality assurance; PDCA
cycle; Reliability engineering concepts; “Z D”
concept.
 Quality for customer satisfaction; standardization
of parts ; testing of products – destructive &
non- destructive tests, life of a product.
 Process control:
 Reliability:
 Quality management systems:
 Cost of Quality.
Recommended Reading:
CONCEPT OF “QUALITY”
QUALITY?

Does it Cost more?

Does it Cost less?

Who is responsible for Quality?

QUALITY: Dr. Juran’s classic definition

“Fitness for use”

 Decided by the Customer
 Delivered over intended life

 Designed for, not an accident

 Thus, Four ‘quality of’ aspects:

Design Execution Delivery Service

QUALITY: Dr. Juran’s classic definition … con’td
 Quality of Design:
 Market Research
 Specifications
 Quality of Execution:
 Preparation e.g. engineering, training etc.
 Resources: Man, M/c, Materials, Methods
 Transformation: e.g. production, cost etc.
 Quality of Delivery:
Customer
 On time and in full Satisfaction
 Ease of transactions  delight
 Quality of Service:
 Availability Quality is
 Durability everybody’s
business!
 Disposability
QUALITY: Dr. Juran’s “trilogy”… con’td
TOTAL QUALITY ? … ctd
Evolution of Management
 Management in the 60’s, dominated by the West, was
being driven in two directions:
 The Rationalists: Taylor – Fayol – Drucker et al &
 The Humanists: Mayo – Maslow – Herzberg et al
 But something was missing – the glue binding these together.
 Manufacturing based Management (‘brick and mortar’)
centre had shifted form England/Europe to US/America and
now was challenged by Japan & the Asian Tigers.
 A slow creep away from “Supply-side” thinking (PUSH) to
“Demand-side” dominance (PULL) had taken place.
 Products, markets, buyers and users had become more
mature, knowledgeable and discerning
TOTAL QUALITY ? … ctd
Evolution of Management
By the late 60’s, demand tended to slow down and the
growing competition gave customers greater choice – ‘quality’
as an important buying criterion emerged.
 OPEC crisis in mid-70’s turned the world around on its head!
Energy, the prime mover of industrial world became very
expensive. The demand boom faded – with customers
demanding quality and lower prices and better service.

“Japanese”
Quality Western
Level
The concept of “Value for Money”

50’s 60’s 70’s

TOTAL QUALITY ? … ctd
Evolution of Management
 Western thinking and Japanese culture together:
 Two ‘out-of-box’ thinkers from US were sent to help
Japan – Dr. Deming & Dr. Juran. They redefined Quality,
based on pioneering work done by Armand Figenbaum
in the West
 Japanese heard and integrated these with their culture !
 Japanese culture:
 intrinsically ‘minimalist’: Haiku, Ikebana, Sushi
 Courtesy, Care and Concern for fellow beings
 Differentiates between “Speed” & “Haste”
TOTAL QUALITY ? … ctd
Evolution of Management
 The Western (Deming/Juran) Thinking:
 Quality has two faces: “More” and “Less”
 More the aesthetics, features or functionality – better the
product
 Less the wastage, cost or difficulty – better the product
 Combining both together is Good Quality: “Just Right”
 Quality is definitional: not negotiable or bargain-able and
is defined by the recipient of goods/services i.e.
Customer
 ‘Quality ‘ is not a set of arbitrary, self-defined annual targets
(budgeting), exhortations and sloganeering: ‘Quality’ cannot be
imposed
 Central to this theme is ‘quality is everybody’s business’
 TOTAL QUALITY ? … ctd
The Concept of a “Customer”:

Organization’s
Boundary

YOU

Supplier’s Your Your Customer’s

Supplier Supplier Customer Customer
Work Flow
TOTAL QUALITY ? … ctd
 Quality is defined by the Customer:
 A ‘customer’ receives the output created by us
 A ‘supplier’ gives us the resources needed to create the
desired output
 The ultimate customer (or consumer) is served by a chain
linked intermediaries:

Assembly Shop
Responsibility Centre
Dealers
(Resource) Supplier (Output) Customer
(transformer)
Responsibility Centre (Output) Customer
(Resource) Supplier (transformer)

Foundry
Engine Shop Engine Shop

Assembly Shop
TOTAL QUALITY ? … ctd
 With time, Customers’ requirements increase
 Requiring the suppliers to keep pace by continuously
improving to meet the requirements
 Quality is thus a ‘journey’
 Continuous Improvement has to be systemic:
 “Plan”: Who/What/When/Why & How
 “Do”: Defining and doing the necessary changes
 “Study”: ensuring actions give the required results
 “Act”: standardize to set the new system
 This is called the Deming Cycle (P-D-S-A), since this
has to be repeated over and over!
TOTAL QUALITY ? … CTD

PDCA was made popular by Dr W. Edwards Deming,

who is considered by many to be the father of modern
quality control; however, he always referred to it as the
"Shewhart cycle". Later in Deming's career, he modified
PDCA to "Plan, Do, Study, Act" (PDSA) because he felt
that "check" emphasized inspection over analysis.
TOTAL QUALITY ? … CTD
Deming offered fourteen key principles to managers for
transforming business effectiveness. The points were first
presented in his book Out of the Crisis. (p. 23–24) Although
Deming does not use the term in his book, it is credited with
launching the Total Quality Management movement.
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.
TOTAL QUALITY ? … CTD
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 (see Point 12 and Ch. 8 of "Out of the
Crisis"). 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. (See Ch. 3 of "Out of the Crisis“)
TOTAL QUALITY ? … CTD
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 work
force 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
work force.
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.
TOTAL QUALITY ? … CTD
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 (See Ch. 3 of "Out of the
Crisis").
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."
 TOTAL QUALITY ? … ctd
Pictorially, the P-D-S-A  Changing Customer
requirements mean
cycle is: ‘strategies’ for constant
improvement.
 Improvement is achieved by
rotating the P-D-S-A wheel
Requirement which both carries the
P D company and gives it size.
A S  Quantum of total effort &
weakest link determines
Q-Systems
effectiveness
 Q-systems are needed as
Time safety chocks and need to
move with the wheel to
prevent roll back.
The (Quality) Journey
 TOTAL QUALITY ? … ctd
Breakthrough: a rapid and
dramatic improvement of
performance. Not always
predictable and/or fully
Performance

Breakthrough
Improvement

controllable and usually done

by an expert team/department.
S/State 2

Improvement
Continuous
Change requires special effort.

Stabilization Continuous: a step-by-step

performance improvement ,
carried out all the time
throughout the firm, involving
S/State 1 almost everyone. Can be
controlled and is predictable.
Time Change is away of life.

A typical map of improvement activities

TOTAL QUALITY ? … ctd
 TQ was taken forward in the West by Philip Crosby –
the ‘fun uncle’ of the Quality Movement, introducing:
 the principle of "doing it right the first time" (DIRFT).
 the definition of quality is conformance to requirements
 the system of quality is prevention
 the performance standard is zero defects
 the measurement of quality is the price of nonconformance
 Crosby's prescription for quality improvement was a 14
step program, themed “War on Waste”
 His belief was that a company that established a quality
program will see savings more than pay off the cost of the
quality program ("quality is free").
 TOTAL QUALITY ? … ctd

Language of Total Quality Management

“Money”
Total Quality Control
Quality Assurance
Statistical Quality Control
Language of
“Things” Inspection & Checking
TOTAL QUALITY ? … ctd
Total Quality can be thought to comprises of
three overlapping domains:

Culture

Tools Systems
TOTAL QUALITY ? … ctd
Scope of the TQM activities are:
Principles & Practice Tools & Techniques
1. Leadership 1. Statistical Process Control
2. Customer Satisfaction 2. Reliability
3. Employee empowerment 3. Design of Experiment
4. Continuous improvement 4. Quality Engineering
5. Supplier partnership 5. FMEA
6. Performance measure 6. QFD
7. ISO Certifications
8. Benchmarking
9. Total Productive Maintenance
10.Information Technology
11.Product Liability
TOTAL QUALITY ? … ctd
 Total Quality Control: “is the use of techniques,
tools and system-based, cross-functional activities to
achieve, sustain and improve the quality of a product
or service. It involves collection, analysis and
interpretation of data for control and assurance”.
 Total Quality Management: “is both a philosophy
and a set of guiding principles that represent
foundation of a continuously improving organization. It
integrates fundamental management techniques,
existing improvement efforts and technical data-based
analytical tools in a disciplined, balanced approach.”
QUALITY MANAGEMENT
MANAGEMENT: SYSTEMS APPROACH
Man, Machine Stakeholders
Product/Services,
Material, Shareholders; Profits, Customer &
Methods, Society; Customers; Societal satisfaction,
Measurement Employees; Suppliers Other Long-term Goals

Mgt

Controlling
Organizing
Outputs
Planning

Staffing

Leading
Inputs
(External
Core (Goal
To
Oriented)
Orgnzn.)
Sup

Stake holder Feedback (reenergizing the system)

EXTERNAL ENVIRONMENT(Opportunities, Constraints)

 MANAGEMENT: SYSTEMS APPROACH...ctd
Management as a system transforms inputs as a whole &
in each type of Business Process by:

Planning (What, where & when to do?)

+ Organizing (How to do?)
+ Staffing (who will do?)
+ Leading (same direction?)
+ Controlling (OK?)
to accomplish certain pre-determined, (as
derived from stakeholder needs) goals &
objectives i.e. outcomes
MANAGEMENT: SYSTEMS APPROACH...ctd
Transformation/Business process
A business process or business method is a collection of related,
structured and sequenced activities or tasks that produce a
specific service or product (serve a particular goal) for a particular
customer or customers, repeated over time for same outcome.
There are three types of business processes:
> Management processes, that govern the operation of a system.
Typical management processes are "Corporate Governance" &
"Strategic Management".
> Operational processes: constitute the core business and create
the primary value stream. Typical operational processes are
Purchasing, Manufacturing, Marketing, and Sales.
> Supporting processes, which support the core processes.
E.g. Accounting, Recruitment, Technical support.
MANAGEMENT: SYSTEMS APPROACH...ctd
Thus, (Quality) management can be viewed as a cyclical
customer-centric system of improving a company’s
performance satisfying all stakeholders.

Plan

Customer

Improve Control
QUALITY PRACTICES: INSPECTION

Total Quality Management

Total Quality Control
Quality Assurance
Statistical Quality Control

a Inspection & Checking

QUALITY PRACTICES: INSPECTION… ctd
 A natural requirement for any man-made product is to
check for conformance:
 Checking, particularly in the initial stages of mechanized
production, was done by few ‘knowledgeable experts’.
 Insufficientmetrology acumen
 Use of judgement
 Usually performed by the ‘line boss’.

 Withsophistication of product and technology, measurement

superseded judgement i.e. Inspection
 Specialization dictated expertise – thus the ‘Inspection Department’
 A scientific basis for assessment of correctness of task performed
 Link to actual product requirement (customers’ view) unclear and
uncertain
 More concerned with technology
QUALITY PRACTICES: SQC

Total Quality Management

Total Quality Control
Quality Assurance
a Statistical Quality Control
Inspection & Checking
 QUALITY PRACTICES: SQC… ctd
 Mass production required managers to ensure that a
‘lot’ produced conformed to specifications.:
 100% testing was too tedious and/or expensive
 In many cases, testing could mean deterioration of the product
 Production done under ‘standard’ conditions were expected to
be ‘standard’
 So a nominal checking on a few samples, using statistical
tools, could be used to determine the conformance of the lot
to agreed specifications for selected parameters: the AQL
 Samples needed to be ‘randomly’ chosen to be representative i.e.
each product should have an equal chance to be chosen
 No of samples depended upon the ‘confidence level’ required and the
costs associated with the inspection exercise
QUALITY PRACTICES: SQC… ctd
 Inspection and checking could be designed on types of
measurement:
 Attributive:
in a ‘good/bad’ or ‘Go/No-go’ basis. The AQL was
determined on the % defects acceptable.
 Allowed for fast and simple inspection, using gauges etc. but
required a relatively large sample size to determine disposition of
the lot.
 Did not give any further information other than conformance.
 Variable:in discreet measurement of the parameter in M-L-T
terms. The AQL was determined by the statistical spread.
 Allowed for fewer samples and gave more information on the
disposition of the lot. Required higher level knowledge for
inspection and testing.
 Many ‘sampling standards’ were designed and are still in use.
 QUALITY PRACTICES: SQC… ctd
 Apart from the disadvantage of costs associated with
‘post-facto’ information, other limitations are:
 Separation of ‘doers’ and ‘testers’ to keep the system ‘true’ –
leading to tensions in the organization
 Finger
pointing
 Game playing, ‘get through the gate’ effort
 Acceptance of ‘bad is acceptable’ mentality
 Static standards, AQL did not demand improvement and any
effort in that direction was a ‘waste’
 Emphasis on hold the line
 ‘Optimize’ to produce AQL related lots – and save costs
 Unclear understanding of the impact on Customers:
 ‘over the wall’ syndrome.
QUALITY PRACTICES: Q A

Total Quality Management

Total Quality Control

a Quality Assurance
Statistical Quality Control
Inspection & Checking
 QUALITY PRACTICES: Q A … ctd
 With advances in measurement technology and knowledge
levels, management started focusing on prevention rather
than filtration i.e. assurance , leading to
 The birth of ‘Statistical Process Control’ and assurance:
 If standard processes could be held to (controlled), then standard
products would follow and lot sampling could double-up as an audit.
 Process tended to drift over time – due wear and tear, variations in
input parameters and so on. Some variations were random but
most had ‘assignable causes’
 If‘checks’ (by measurement) could be kept on significant parameters and
assignable causes and timely (statistically determined) corrective actions
taken, the process could be said to be under (statistical) control.
 The subject, periodicity and frequency of measurements were determined
by priority and confidence level by statistics.
QUALITY PRACTICES: Q A … ctd
Upper Spec. Limit

Upper Control Limit

X
Random Cause
Parameter

X X X
X Time
X X X
X X
X
Resetting
Assignable Cause X
X
Lower Control Limit

Lower Spec. Limit

SPC at Work
 QUALITY PRACTICES: PERFORMANCE

Language of Total Quality Management

“Money”
Total Quality Control
Quality Assurance
Statistical Quality Control
Language of
“Things” Inspection & Checking
PERFORMANCE
 Performance management is:
 An internal process of alignment to realize the firm’s
objectives, missions and goals (the ‘control’ view);
 An universal approach, cutting across industry groups
for achieving continued success (the ‘systems’ view);
 Both require hard-nosed assessments, backed by
appropriate metrics.
 Measurement of performance is the end-point of a
cycle in any quality journey:
 performance is an ‘outcome’
 performance is a ‘continuous process’
PERFORMANCE MEASURES
 Effective management control requires
measurement of activities leading to performance:
 To establish a baseline
What gets
 To identify potential ‘areas of improvement’ measured
 To justify resources allocation gets done!

 To assess improvement

 In the final analysis, the value of ‘quality control’

must be based on its ability to contribute to profits:
 Quality must cost less – while adding value to the
customer
PERFORMANCE MEASURES ... ctd
 Thus, in the ‘language of money’ the cost of (poor)
quality must be defined and reduced:
 It is no different than other costs
 It can be ‘controlled’ by budgeting & measurement to:
 increase customer satisfaction
 while reducing use of resources

 It crosses departmental lines, involving all activities of the

company and is defined as costs of ‘poor’/failed services or
products
 However, it is not readily visible in standard cost accounting
reports since it is spread across ‘cost centres’.
PERFORMANCE MEASURES ... ctd
 Generally, there are 4 categories of costs:
 Cost of Prevention: are based on experiences/SoPs and are
widespread: every department has its ‘do’s & don’ts’
 Cost of Appraisal: typically costs associated with inspection
and testing, assessment protocols and test set-ups
 Cost of Internal failure: are costs associated with evaluation
and disposal of non-conformances including repair, rework,
reprocess, retest, scrap etc. and disposal.
 Cost of External failure: are costs associated with products
and services not meeting Customers’ requirements post
delivery seen in warranty returns, rejections, retrofits,
penalties & liability costs.
PERFORMANCE MEASURES ... ctd
 What is then the ‘optimum cost’ ? While difficult to
answer, managements usually :
 Benchmark similar organizations of industry groups, with as
much available data e.g. external failure costs
 Optimize individual categories using cost-benefit analyses
 Optimize by achieving the lowest total cost – depending on
the interrelation between category costs.
Total Costs

Cost Failure Costs Prevention & Appraisal

Costs

Conformance
PERFORMANCE MEASURES ... ctd
 However, these ‘trade-offs’ have to be viewed with
caution since:
 In many cases, particularly in matters of safety and business
prudence, ‘perfection’ is non-negotiable!
 With increasing IT and technological progress, cost of
appraisal is inconsequential and demanded as standard
information by customers
 Irrespective of the ‘optimum’ (non)quality costs have be
brought down every year with continuous improvement,
both to keep the organization progressive as well as to
retain leadership position.
 The analysis of costs can be effectively used to identify
priority areas for improvement (The Pareto Principle).
PERFORMANCE MEASURES ... ctd
 Having decided the priorities, an ‘area for
improvement’ will require to be worked upon using:
 Resources internal to a particular department, requiring no
elaborate system and teams are sufficiently empowered.
About 15% activities lie in this area.
 Coordination of activities from several functional areas/
departments. More elaborate organization and interventions
is necessary for these activities.
 Basic approach to both, however, is based on:
 finding and fixing the ‘root cause’ for the concern (problem solving)
 Investing in appropriate prevention activities

 Reducing appraisal cost , appropriately and (statistically) correctly

 Find ways for further improvement

PERFORMANCE MEASURES ... ctd
 The first step in ‘control’ is to hold on to the gains
achieved from the previous cycle:
 ‘define’ the processes established to obtain the desired
result all the time
 ‘document’ and empower employees, enabling them to
carry out the standardized processes
 ‘check’ that deviations are recorded and quickly
corrected and appropriate corrective actions are taken
regarding non-conformities
 ‘activate’ improvement activities in line with the
renewed (customer)priorities
 These steps are standardized under the ISO
Quality systems
 PERFORMANCE MEASURES ... ctd
QUALITY SYSTEMS
 “ A Management System to direct and control an organization
with regard to Quality, providing assurance that requirements set
out are being fulfilled”.
 I.S.O: International Standards Organization, who have set out a
standardized criterion for framing Quality Systems. The ISO 9000
series is the most generic system.
 ISO 9000 – Quality Management and assurance standards guidelines for
selection and use;
 ISO 9001 – Quality systems – Model for Quality Assurance in Design,
Development, Production, Installation & Servicing;
 ISO 9002 – Quality systems – Model for Quality Assurance in Production,
Installation & Servicing;
 ISO 9003 – Quality Systems – Model for Quality Assurance in Final
Inspection and test;
 ISO 9004-1 – Quality Management and Quality Systems Elements –
Guidelines.
PERFORMANCE MEASURES ... ctd

 What is the intent of ISO 9000?

 Define your process(s)
 Document this
 Do what you have defined, consistently
 Ensure that you do this effectively
 Learn from your monitoring, update and train
 Change in line with the new requirements
 Process definitions must embody reality and the
current ‘state-of-art’: not dreams and targets to be
realized!
PERFORMANCE MEASURES ... ctd
 Demonstrate these to stakeholders
 By registering your Quality System with an approved
registrar;
 Involves assessment and periodic surveillance
audit of the adequacy of the system by the
registrar;
 If and when the system conforms to the registrar’s
interpretation of the standard, a certificate of
registration is issued;
 Just like the Annual financial accounts: approved by
independent, certified Auditors
 The aim is to make the system work for You, not –
You work for the system!
PERFORMANCE MEASURES ... ctd

 The ISO 9000 is a system to prevent set

organizations from sliding down, as an
assurance and to some extent as a vehicle for
improvement. The primary function is not as an
‘engine’ for a company’s improvement.

 A need for ‘something else’ was felt – beyond a

company’s holding strategy, but like the ISO
9000 series, a ‘universally understandable’
system.
PERFORMANCE MEASURES ... ctd
 The Total Quality Movement, with Quality as the
driving force for a company’s success, was being
proven by Japanese and then the Asian
companies through the 70’s and 80’s. To
recognize this effort, Japan had instituted the
“Deming Award” – for Japanese companies who
had demonstrated outstanding achievements.
In 1990, this was extended to all nations.

 The AQA instituted for American companies the

“The Malcolm Baldrige National Quality Award”
for the same purpose.
PERFORMANCE MEASURES ... ctd
These ‘awards’ are based on Deming’s teachings on ‘Way out
of Trouble’ advocated to Japanese industry in early ‘50s
 1. Create constancy of  8. Eliminate fear among
purpose employees
 2. Adopt philosophy of  9. Eliminate barriers
prevention between departments
 3. Cease mass inspection  10. Eliminate slogans
 11. Remove numerical
 4. Select a few suppliers
based on quality quotas
 12. Enhance worker pride
 5. Constantly improve
 13. Institute vigorous
system and workers training & education
 6. Institute worker training programs
 7. Instill leadership among  14. Implement these 13
supervisors points
PERFORMANCE MEASURES ... ctd
Successful organisations:
 Use a structured approach for strategic development
 Measure 5-7 key success drivers
 Evaluate the competitive environment in detail
 Have clear goals for the company’s future
 Senior managers translate goals into action plans.
 Engage everyone to make the changes
 Monitor and control progress monthly
PERFORMANCE MEASURES ... ctd
Action Steps
 Integrate strategic planning in the annual business
planning process.
 Define measurements for each key success driver.
 Develop strategic goals.
 Involve employees to develop action plans.
 Review progress against the plan monthly.
THE SYSTEMS PERSPECTIVE
 Corporations currently are using standard models to
manage performance in universally acceptable ways:
 Though based on organization’s self-appraisal, the models
provide a standardized and systematic approach to
assessments, clearly understood by all
 They help:
 Improve performance practices and capabilities
 Facilitate sharing of best practices

 Serve as a working tool for understanding performance

management (planning, training and assessment).
 Deliver superior customer value through result orientation

 The primary model in use today is “The Malcolm

Baldrige National Quality Award” (MBNQA)
THE SYSTEMS PERSPECTIVE ... ctd.
 The core concepts and values are embodied in seven
categories:
 Expanded to 19 examination items consisting of set of areas
to address.
 The specific responses are graded on a scale to give a score
 The MBNQA provides:
 a plan to keep improving all operations continuously
 and a system to measure these improvements accurately
 benchmarks to compare with ‘best-in-class’ and provide
‘stretch’ goal-setting
 a strong integration of activities across (cross-functional,
supplier to customer) and along (hierarchical) the firm.
MALCOLM BALDRIGE MODEL
 MALCOLM BALDRIGE MODEL
1 LEADERSHIP 120
1.1. Organizational Leadership 70
1.2 Social Responsibility 50
2 STRATEGIC PLANNING 85
2.1 Strategy Development 40
2.2 Strategy Deployment 45
3 CUSTOMER & MARKET FOCUS 85
3.1 Customer and Market knowledge 40
3.2 Customer relationship and satisfaction 45
4 MEASUREMENT, ANALYSIS & KNOWLEDGE 90
MANAGEMENT
4.1 Measurement & analysis of performance 45
4.2 Information & Knowledge management 45
 MALCOLM BALDRIGE MODEL
5 HUMAN RESOURCE FOCUS 85
5.1 Work Systems 35
5.2 Employee learning and motivation 25
5.3 Employee wellbeing and satisfaction 25
6 PROCESS MANAGEMENT 85
6.1 Value Creation Process 50
6.2 Support Process 35
7 BUSINESS RESULT 450
7.1 Customer focused result 75
7.2 Product & Service Result 75
7.3 Financial & Market Result 75
7.4 Human Resources Result 75
7.5 Organizational effectiveness Result 75
7.6 Governance & Social Responsibility Result 75
1000
 MALCOLM BALDRIGE MODEL

 Leadership — Examines how senior executives

guide the organization and how the organization
addresses its responsibilities to the public and
practices good citizenship.
 Strategic planning — Examines how the
organization sets strategic directions and how it
determines key action plans.
 Customer and market focus — Examines how the
organization determines requirements and
expectations of customers and markets; builds
relationships with customers; and acquires,
satisfies, and retains customers.
 MALCOLM BALDRIGE MODEL
 Measurement, analysis, and knowledge
management — Examines the management,
effective use, analysis, and improvement of data
and information to support key organization
processes and the organization’s performance
management system.
 Workforce focus — Examines how the organization
enables its workforce to develop its full potential
and how the workforce is aligned with the
organization’s objectives.
 Process management — Examines aspects of how
key production/ delivery and support processes
are designed, managed, and improved.
 MALCOLM BALDRIGE MODEL
 Results
— Examines the organization’s
performance and improvement in its key business
areas:
 customer satisfaction,
 financial and marketplace performance,
 human resources,
 supplier and partner performance,
 operational performance, and
 governance and social responsibility.
 The category also examines how the organization
performs relative to competitors.
TQM & LEADERSHIP
 TQM is mainly ‘common sense’: the art of managing
the whole to achieve excellence.
 The basic approach is defined in 6 fundamentals:
1. A committed and involved management to provide top-
to-bottom support
2. Unwavering focus on customer, internal and external
3. Establishing performance measures thereof
4. Effective involvement of the total work-force, internal
and external
5. Continuous improvement of all processes
6. Supplier partnerships
 TQM & LEADERSHIP …ctd.

TQM requires a change in ‘mid-set’ and ‘heart-set’ i.e.

Culture; these do not happen overnight!:
Quality Element Old state TQM
Orientation Product oriented Customer oriented
Priorities Quality subjugated to Cost Equal weight to Q-C-T
Decision horizon Short/mid term Long term, continuous
Control emphasis Detection Prevention
Responsibility Quality Control Dept. Everyone
Problem Solving Responsible Manager X-functional Teams
Procurement basis Price ‘Cost of ownership’
Manager’s role ‘Command & Control’ ‘Sense & respond’
TQM & LEADERSHIP …ctd.
Change requires leadership:
 Senior management has to drive the change as a team with
the CEO as the leader
 Behaviour characteristics of successful leaders:
 Giving priority to Customers’ views
 Empower and facilitate subordinates

 Emphasize improvement over maintenance

 Drive prevention rather than correction

 Institute systems to support the quality drive

 Encourage collaboration rather than competition

 Recognize and encourage team effort

 Spend time and effort on learning & training

 Communicate continuously

 Reinforce commitment to ‘Quality’

TQM & LEADERSHIP …ctd.
TQM implementation requires CEO’s commitment,
particularly at the start:
 Some activities which help are:
 Strategic Planning: discovering future customers’ needs,
positioning w.r.t to customer segments, define the operating
environment, analyse the gap, plan to close the gap, align
organization development, publish an implementation road-
map
 Establishing a ‘Quality Council’: develop the road-map,
organize communication, establishing performance metrics,
obtain ‘buy-in’, provide training, empower with resource
allocation, setting up programs and projects, monitoring
activities, recognizing and rewarding
 Annual Quality Improvement Program

 “MBWA”
 TQM & LEADERSHIP …ctd.
Satisfaction

Are difficult to discover; their absence

does not dissatisfy, but their presence
excites. They are beyond customer’s
current expectations.
Revealed requirements
Exciting requirements
What one gets by asking customers.
Satisfaction is proportional to delivery.
Requirements met

Expected requirements
Are often so basic that customers do not
mention them – until a marketer fails to
deliver them. They are so basic that their
absence causes dissatisfaction.

Dr.N. Kano’s Model of Customer Delight

TQM & LEADERSHIP …ctd.
MBWA = Management by wandering around
“ It turns out that neither superior
customer service nor constant
innovation (the cutting edges) is
built on genius in the executive
or mystical strategic moves. Both
are built instead on a bedrock of
listening, trust and respect for the
Leadership dignity and creative potential of
(MBWA) each person in the Organization.
The winner stuns us not by their
cleverness but by the fact that
each and every tiny aspect of the
business is a touch better than the
People Norm.” Tom Peters ( ‘A Passion for
Excellence’)
 TQM & LEADERSHIP … ctd

TELCO Tata Motors

Performance

Performance
Breakthrough
Improvement

Trucks &
S/State 2

Improvement
Buses Commercial

Continuous
& Passenger
Vehicles
Stabilization

Locomotives
S/State 1 & Engineering

Time Time

A typical map of a company’s journey The “S” Curve