TOTAL QUALITY MANAGEMENT

Text and Cases

B. JANAKIRAMAN
Professor and Head
Department of Management Studies
M.S. Ramaiah Institute of Technology
Bangalore
and
R.K. GOPAL
Assistant Professor
Department of Management Studies
M.S. Ramaiah Institute of Technology
Bangalore

Delhi-110092
2006
TOTAL QUALITY MANAGEMENT: Text and Cases
B. Janakiraman and R.K. Gopal

© 2006 by PHI Learning Private Limited, Delhi. All rights reserved. No part of this book may
be reproduced in any form, by mimeograph or any other means, without permission in writing
from the publisher.

ISBN-978-81-203-2995-9

The export rights of this book are vested solely with the publisher.

Published by Asoke K. Ghosh, PHI Learning Private Limited, Rimjhim House, 111, Patparganj
Industrial Estate, Delhi-110092 and Printed by Mudrak, 30-A, Patparganj, Delhi-110091.
 Contents

Preface ix

CHAPTER 1 INTRODUCTION TO QUALITY CONCEPTS 1–10

1.1 Introduction 1
1.2 Various Definitions of Quality 2
1.3 Eight Dimensions of Quality 2
1.4 Importance of Quality in Business and
Commerce 4
1.5 Service Quality vs Product Quality 5
1.6 Determinants of Service Quality 6
Questions 8
CASE STUDY—The Case of the Quality Crusader 9
Discussion Questions 10

CHAPTER 2 MANAGING FOR QUALITY PRODUCTS AND SERVICES 11–31

2.1 Introduction 11
2.2 Strategies and Quality 13
2.3 Classifying the Quality Theme 13
2.4 Quality Control 14
2.5 Quality Assurance 16
2.6 Process Capability—Cp 19
2.7 Better Measure of Variation and Process
Capability—Cpk 20
2.8 Process Variation 22
2.9 Design of Experiments 27
Questions 31

CHAPTER 3 SEVEN QC TOOLS 32–49

3.1 Introduction 32
3.2 Check Sheets 32
3.3 Stratification 33
3.4 Pareto Chart 33
3.5 Cause and Effect Diagram 34
3.6 Control Chart 35
3.7 Histograms 36
iii
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3.8 Scatter Diagram 39

3.9 Run Charts/Time Plot/Trend Chart 40
Questions 40
CASE STUDY—Failure Analysis of UPS Systems 42

CHAPTER 4 THE PHILOSOPHY OF TQM 50–66

4.1 Introduction 50
4.2 What TQM Is 50
4.3 Emergence of Total Quality Management 53
4.4 Overview of TQM 58
4.5 Implementing TQM 60
4.6 Benefits of TQM Programme 62
4.7 Where TQM Fails 63
Questions 64
CASE STUDY—Missing Reservation 65
Discussion Questions 66

CHAPTER 5 QUALITY GURUS 67–82

5.1 Introduction 67
5.2 Deming and His 14-Point Programme 67
5.3 Juran 71
5.4 Crosby and His 14-Point Programme 76
Questions 80
CASE STUDY—Startrek Resorts and Its Quality Focus 81
Discussion Questions 82

CHAPTER 6 QUALITY CIRCLES 83–101

6.1 Introduction 83
6.2 Quality Circles 84
6.3 Teams 91
Questions 96
CASE STUDY—How a Nationalized Bank Tackled Its Various
Problems Through a Quality Circle 97

CHAPTER 7 REACTIVE IMPROVEMENT 102–107

7.1 Introduction 102
7.2 Process Control 102
7.3 Reactive Improvement 103
7.4 Proactive Improvement 103
7.5 PDCA Cycle 104
7.6 Benefits of the PDCA Improvement Cycle 106
Questions 107
 Contents v

CHAPTER 8 PROACTIVE IMPROVEMENT 108–115

8.1 Introduction 108
8.2 House of Quality 109
8.3 Benefits of Using QFD 111
8.4 The Seven Management and Planning
Tools 112
Questions 115

CHAPTER 9 SIX SIGMA CONCEPTS 116–125

9.1 Introduction 116
9.2 Design for Six Sigma 117
9.3 Six Sigma DMAIC Process 118
9.4 Key Analytical Tools for Implementing
Six Sigma 121
9.5 Advantages of Six Sigma 121
9.6 Different People in Six Sigma and Their Roles
and Responsibilities 121
9.7 Issues to be Considered while Selecting a
Project for Six Sigma 124
9.8 Do’s and Don’ts for Making Six Sigma
Effective 124
9.9 The Zero Defects Concept 124
Questions 125

CHAPTER 10 JUST IN TIME 126–133

10.1 Introduction 126
10.2 Historical Development 127
10.3 Prerequisites of JIT 127
10.4 Components of JIT 127
10.5 Benefits of JIT 128
10.6 Kanban System 128
Questions 133

CHAPTER 11 TAGUCHI AND HOSHIN 134–143

11.1 Introduction 134
11.2 Contributions of Taguchi 134
11.3 Assessment 138
11.4 Hoshin Plan 138
11.5 Principle of 5S 140
11.6 Kaizen and Innovation 141
Questions 143
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CHAPTER 12 QUALITY AWARDS 144–152

12.1 Introduction 144
12.2 Deming Prize Award Criteria 146
12.3 Malcolm Baldrige National Quality Award 148
12.4 The European Quality Award 151
Questions 152

CHAPTER 13 QUALITY STANDARDS 153–165

13.1 Introduction: ISO 9001–2000 153
13.2 Process Approach 153
13.3 Relationship with ISO 9004 155
13.4 Compatibility with other Management Systems 155
13.5 ISO 9001–2000 Certification Procedure 156
13.6 Do Not Mistake ISO 9000 for TQM 158
13.7 Vision, Mission, Goals, Objectives and Plans 158
13.8 ISO 14000: Environmental Management 160
13.9 QS 9000 162
13.10 Quality Audits—Guidelines 163
13.11 Automotive Standards: TS 16949 164
Questions 165

CHAPTER 14 BUSINESS PROCESS RE-ENGINEERING 166–180

14.1 Introduction 166
14.2 Definition 167
14.3 Glimpses of Dramatic Improvements Due to
Re-Engineering 168
14.4 Myths about BPR 170
14.5 BPR Methodology 172
14.6 Differences between TQM and BPR 172
14.7 Approaches to Integrate TQM and BPR 173
14.8 Systems Approach to Change Initiatives 173
14.9 Advantages of BPR 174
14.10 Before and After Business Process
Re-Engineering in an Organization 175
14.11 Limitations of BPR 176
14.12 Why Re-Engineering Initiatives Fail 176
14.13 Future of BPR 177
14.14 Principles of Re-Engineering 177
Questions 178
CASE STUDY—Re-Engineering in Triton Engineering
Company Ltd. 179
Discussion Questions 180
 Contents vii

CHAPTER 15 BENCHMARKING 181–193

15.1 Introduction 181
15.2 Process of Benchmarking 182
15.3 Code of Conduct for Benchmarking 184
15.4 Types of Benchmarking 185
15.5 Benchmarking Customer Service 187
15.6 Internal Benchmarking 187
15.7 Advantages and Limitations of Benchmarking 188
15.8 Steps in Benchmarking 189
15.9 Linking Benchmarking with Other Management
Practices 190
Questions 190
CASE STUDY—Benchmarking Efforts at Quality Medicare
Centre 192
Discussion Questions 193

CHAPTER 16 CAPABILITY MATURITY MODEL FOR SOFTWARE

INDUSTRY 194–204
16.1 Introduction 194
16.2 Evolution of Capability Maturity Model 195
16.3 Total Quality Management and CMM 196
16.4 The Software Process Maturity Framework 196
16.5 Process Capability and the Prediction of
Performance 200
16.6 Structure of Capability Maturity Model 201
Questions 203

CHAPTER 17 CUSTOMER RELATIONSHIP MANAGEMENT 205–215

17.1 Introduction 205
17.2 Defining CRM 206
17.3 E-CRM 207
17.4 E-CRM Technology in the Internet 209
17.5 Myths About CRM 211
17.6 Advantages of CRM 214
17.7 Limitations of CRM 214
17.8 Prerequisites of CRM 215
Questions 215

APPENDIX A IS/ISO 9001–2000 217–232

A.1 Scope 217
A.2 Normative Reference 218
A.3 Terms and Definitions 218
A.4 Quality Management System 218
A.5 Management Responsibility 220
viii Contents

A.6 Resource Management 223

A.7 Product Realization 224
A.8 Measurement, Analysis and Improvement 229

APPENDIX B ISO 14000—GUIDANCE ON THE USE OF THE

SPECIFICATION 233–240
B.1 General Requirements 233
B.2 Environmental Policy 234
B.3 Planning 235
B.4 Implementation and Operation 237
B.5 Checking and Corrective Action 238
B.6 Management Review 240

Bibliography 241–246

Index 247–250
 Preface

Corporate success today largely depends on quality. The ascent of Japan, a

country without any natural resource, as one of the most industrialized
and admired countries is mainly due to its commitment to quality.
Total Quality Management (TQM) has assumed a pivotal role in
manufacturing industry and the service sector. Today the market is fiercely
competitive; only the fittest can survive and the main yardstick for
measuring the fitness is nothing but quality. Business firms all over
the world have realized that the secret to the superior performance of
the Japanese companies has been their concentration on quality and
educationists have therefore correctly included this subject in the
curriculum.
An attempt is made by us to present the concepts of Total Quality
Management coupled with cases and practical examples in an easy-to-
understand style. This book covers quality concepts, quality standards and
awards, and the quality philosophy preached by quality gurus. It
describes the strategic importance of different dimensions of quality and
the various types of quality control tools. Besides, the text discusses the
differences between TQM and BPR (Business Process Re-engineering) and
describes the approaches to integrate them. Finally, the book elaborates on
the capability maturity model and customer relationship management.
At the end of each chapter questions have been given to enable
students to test their post-reading acquisition of knowledge.
Though primarily meant to be a textbook on Total Quality
Management for management students, the book promises to be of interest
to engineering students, management practitioners, administrators and
executives as well.
To all those whose work and ideas have been so helpful in writing
this book, we wish to express our sincere appreciation.
We thank all our friends who have helped us in this endeavour.
Suggestions for improvement are welcome from the readers.

B. JANAKIRAMAN
R.K. GOPAL

ix
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