CHAPTER 2

Total Quality Management

 Chapter Outline

2.1 Introduction of TQM

2.2 Definition of Quality

2.3 Understand the Concept of ISO9000 &

ISO14000

2.4 7 QC Tool

2.5 Statistical Process Control Chart

  Define the 7 concepts of TQM,
product quality, cost of
quality and quality
Learning conformance
 Describe the 14 points of
Objectives: Deming principles
 Define the concept of ISO9000
and ISO14000
  Introduction of TQM
 Definition of quality
 Define the seven concepts
of TQM
Contents:  14 points of Deming
principles
 Understand the concept of
ISO9000
 Understand the concept of
ISO14000
 Total Quality Management

What is TQM?
Total Quality Management (TQM) is a
comprehensive and structured
approach to organizational management
that seeks to improve the quality of
products and services through ongoing
refinements in response to continuous
feedback.
 Total Quality Management

7 Concepts of TQM
Continuous Improvement
Six Sigma
Employee Empowerment
Benchmarking
Just-in-Time
Taguchi Concept
Knowledge of TQM Tools – 7 Tools of TQM
 Total Quality Management
(cont..)
Continuous Improvement
Represents continual improvement of all processes
Involves all operations including suppliers and customers
that covers People, Equipment, Materials, and Procedures
Deming developed a circular model known as PDCA (Plan-
Do-Check-Act) to stress the continuous nature of the
improvement process
Japanese use the word ‘Kaizen’ to describe continuous or
ongoing process improvement. Watch Kaizen video here.
 Total Quality Management
(cont..)
Shewhart’s PDCA
Model
1.Plan
4. Act Identify the
Implement improvement
the plan and make
a plan

3. Check 2. Do
Is the plan Test the Watch PDCA video
working? plan
here.
 Total Quality Management
(cont..)
Six Sigma
Originally developed by Motorola
In statistical sense, Six Sigma refers to an
extremely high measure of process capability
(99.9997% accuracy)
A Six Sigma capable process will return no more
than 3.4 defects per million operations (DPMO)
Highly structured approach to process
improvement
Six Sigma improvement model known as DMAIC
(Define-Measure-Analyze-Improve-Control)
 Total Quality Management
(cont..)
Six Sigma is a program designed to reduce defects to
help lower costs, save time, and improve customer
satisfaction.
3 key players in the Six Sigma program
Master Black Belts – full time teacher who have extensive
training in statistics, quality tools, and leadership
Black Belts – project team leaders
Green Belts – spend part of their time on team projects
and the rest on their normal jobs
 Total Quality Management
(cont..)
Define critical outputs
DMAIC Approach
and identify gaps for improvement
Measure the work and
collect process data
Analyze the data
Improve the process
Control the new process to make sure
new performance is maintained
Watch Six Sigma video here.
 Total Quality Management
(cont..)
List of Six Sigma software

ARIS Six NCSS SigmaXL

Sigma Statistical
Software
Total Quality Management
(cont..)
 Total Quality Management
(cont..)
Employee Empowerment/ Quality Circle
Group of employees who meet regularly to solve
problems
Trained in planning, problem solving, and
statistical methods
Often led by a facilitator
Very effective when done properly
Watch video here.
Watch another video here.
 Total Quality Management
(cont..)
Benchmarking
Selecting best practices to use as a standard for
performance
Benchmarking procedures/steps,
Determine what to
benchmark
Form a benchmark team
Identify benchmarking partners
Collect and analyze benchmarking information
Take action to match or exceed the benchmark
Watch video here.
 Total Quality Management
(cont..)
Example of benchmarking report
An shipping company that had been actively expanding its
operations across Asia Pacific over the last few years was
concerned that their Work-Life Balance policies, Employee Health
plans and Vehicle benefits may no longer be competitive with
what the market is offering.
The HR manager wanted to benchmark each benefit in all their
operating countries quickly and economically so that he could
present his plans to the management team in time for the budget
allocation.
With the short turn-around time and visual simplicity of
benchmarking report, the HR manager was able to help the
company management understand where they stood against
their competition and why changes where needed.
 Total Quality Management
(cont..)
Example of benchmarking report
 Total Quality Management
(cont..)
Just-in-Time
JIT systems are designed to produce or deliver
goods just as they are needed
Related to quality in three ways;
JIT cuts the cost of quality – scrap, rework, inventory
investment, damage costs are directly related to
inventory on hand
JIT improves quality – limits the number of potential
sources of error
Better quality means less inventory and better, easier-
to-employ JIT system
Watch video here and here.
 Total Quality Management
(cont..)
Taguchi Concepts
Experimental design methods (DOE) to improve product
and process design
Identify key component and process variables affecting product
variation
Three concepts
Quality robustness - Ability to produce products uniformly in
adverse manufacturing and environmental conditions
Quality loss function – mathematical function that identifies all
costs connected with poor quality (repair, scrap, warranty, etc)
Target-oriented quality – a philosophy of continuous
improvement to bring the product exactly on target
 Quality
“Quality is never an accident; it is
always the result of intelligent
effort.” -John Ruskin-
 Quality

There is one rule for the industrialist and that is:

Make the best quality of goods possible at the
lowest cost possible, paying the highest wages
possible.

-Henry Ford (1863-1947) American industrialist-

 Quality
Quality is remembered long after the price is forgotten.
Gucci Family Slogan

The bitterness of poor quality remains long after low

pricing is forgotten!
Leon M. Cautillo

The quality, not the longevity, of one's life is what is

important.
Martin Luther King, Jr.
 Quality

Quality is the first priority!!!

Quality but not quantity!!!

 Quality
Quality is…
Judged by customer
Meeting and exceeding customer needs
Delighting the customer
Customer satisfaction
External customers – who buy and use a product or
service
Internal customers – who are the next persons in
the process
 Quality (cont..)
Definition of quality:
Fitness for Use
Conformance to Specifications
Producing the Very Best Products
Excellence in Products and Services
Total Customer Satisfaction
Exceeding Customer Expectations
 Quality (cont..)
Different Views of Quality
User-based – better performance, more
features
Manufacturing-based – conformance to
standards, making it right the first time
Product-based – specific and measurable
attributes of the product
 Quality (cont..)
Quality & Strategy
Quality helps firms increase sales and reduce costs
Sales Gains
 Improved response
 Higher Prices
 Improved reputation
Improved Increased
Quality Profits
Reduced Costs
 Increased productivity
 Lower rework and scrap costs
 Lower warranty costs
 Quality (cont..)
Key Dimensions of Product Quality
Performance – the basic operating characteristics of a product
Features – the extra items added to the basic features
Reliability – the probability that a product will operate properly
within an expected time frame
Conformance – the degree to which a product meets pre-
established standard
Durability – how long the product last; its lifespan before
replacement
Serviceability – the ease of getting repair, the speed of repairs,
competence of repair person
Aesthetics – how a product looks, feels, sounds, smells or tastes
Safety – user protection before/during/after use
 QualityWhat
(cont..)
happens if
Costs of Quality we abandon quality?
Prevention costs - reducing the potential for defects
(planning, design, process, training)
Appraisal costs - evaluating products, parts, and services
(inspection, testing, equipment, operator)
Internal failure - producing defective parts or service
before delivery (scrap, rework, process failure, downtime)
External costs - defects discovered after delivery
(complaints, returns, warranty claims, liability, lost sales)
 Quality Gurus
W. Edwards Deming – 14 Points for
implementing quality, PDCA cycle
Joseph M. Juran – Top management
commitment, fitness for use
Armand Feigenbaum – Total Quality Control
Philip B. Crosby – Quality is Free, zero
defects
See video: Quality Gurus video
More video here.
 Deming’s 14 points
Deming’s 14 points for Implementing Quality
Improvement
1. Create consistency of purpose
2. Lead to promote change
3. Build quality into the product; stop depending on
inspection
4. Build long term relationships based on performance,
not price
5. Continuously improve product, quality, and service
6. Start training
 Deming’s 14 points
Deming’s 14 points for Implementing Quality
Improvement Self-reading on
https://www.mindtools.com/pages
7. Emphasize leadership /article/newSTR_75.htm
8. Drive out fear
9. Break down barriers between departments
10. Stop criticizing workers
11. Support, help, improve
12. Remove barriers to pride in work
13. Institute a vigorous program of education and self-
improvement
14. Put everybody in the company to work on the transformation
 International Quality Standard
International Organization for Standardization (ISO) –
non-governmental organization headquartered in Geneva
ISO 9000 – published in 1978, reviewed every 5 years is a
procedure/system for certifying suppliers to ensure they
meet international standard for quality mgmt.
ISO 9000 certified – involves documenting quality
procedures, on-site assessment, ongoing series of audit of
products or services
ISO 9001:2000 – revised standard which emphasis on
leadership by top management and customer satisfaction
rather than documented procedures
 ISO 14000 Environmental Standard

ISO 14000 – an environmental management

standard established by the International
Standards Organization (ISO)
Core elements
Environmental management
Auditing
Performance evaluation
Labeling
Lifecycle assessment
Watch video here.
 ISO 14000 Environmental Standard

In general, how many ISO standards are there?

There are over 20 thousands of standards (as up to
05/01/2016).
This number will have increased further by the time
you read this.
The standards cover all corners of every industry,
ranging from the popular ISO 9001:2015: Quality
management System to the 14001 environmental.
Other standards also cover day to day activities that
affect us all, including cinematography, shoes sizes,
thermal insulation and textiles.
 In Class Activity

1. Briefly discuss the history of ISO.

2. Explain the benefits of ISO registration.
3. Explain why some customers would want their
suppliers to be ISO registered?
4. Describe the differences between ISO and TQM.
5. Explain how ISO 2000 is different from ISO 9000.
 Solution for In Class Activity

1. History of ISO
 Solution for In Class Activity

2. Benefits of ISO registration

 Solution for In Class Activity

3. Why some customers would want their suppliers to be

ISO registered?
 Solution for In Class Activity

4. Differences between ISO and TQM.

Solution for In Class Activity
 Solution for In Class Activity

5. Differences between ISO 9000 and ISO 14000.

Any Questions???
Thank You