Total Quality Management

Background
What is TQM It is an integrated organisational effort designed to improve quality at every level of any organisation. It is about meeting quality expectations

Defining Quality
1. Conforming to specifications how well a product or service meets targets and tolerances determined by its designers 2. Fitness for use Evaluates how well the product performs for its intended use

Quality defined
3. Value for price paid: quality defined in terms of product or service usefulness for price paid 4. Support services: quality defined in terms of support provided after the product /service is purchased.

TQM defined contd.

Making quality a priority means meeting and exceeding customer expectations by involving everyone in the organisation through an integrated effort designed to improve quality at every level. TQM is meeting quality expectations as defined by the customer; this is called customer-defined quality.

Differences Between Manufacturing & Service Organ.

Manufacturing org. produce tangible product can be seen, touched and directly measure e.g. clothes, cars, computers Thus quality definitions focus on tangible features performance, durability, reliability, serviceability

Service Organisations
Produce a product that is intangible usually cannot be seen or touched e.g. delivery of health care, experience of staying in a hotel, learning at a university, being admitted in a hospital Defining quality of intangible nature difficult; quality of services often defined by perceptual factors

Quality in Service Organ.

Include responsiveness to customer needs, courtesy and friendliness of staff, promptness in resolving complaints, and atmosphere Other definitions include time (how long customer has to wait for service), consistency (degree to which service is same each time).

Cost of Quality
Poor quality related to high costs; has dramatic implications Creates dissatisfied customers and eventually leads to loss of business Other costs of quality: 1. Quality control costs which include prevention and appraisal costs 2. Quality failure costs include external failure and internal failure costs.

Quality costs
Prevention costs costs incurred in the process of preventing poor quality from occurring. Include quality costs of planning & implementing a quality plan, Costs of product and process design, from collecting customer information to designing processes that achieve conformance to specifications

Costs cont.
Employee training in quality measurement included as part of this cost, and Costs of maintaining records of information and data related to quality

Appraisal costs
Incurred in process of uncovering defects. Include cost of quality inspections, product testing, performing audits to ensure that quality standards are being met. Internal failure costs associated with discovering poor product quality before product reaches customer.

Internal failure costs cont.

Example of internal failure costs is rework which is cost of correcting defective item. Sometimes item is so defective and cannot be corrected and must be thrown away. This is called scrap and costs include all material, labor, and machine cost spent in producing defective product.

External failure costs

Associated with quality problems that occur at the customer site. Includes customer complaints, product returns, repairs, warranty claims, recalls. Lost sales and lost customers. Companies that consider quality important invest heavily in prevention and appraisal costs to prevent internal and external failure costs e.g. detecting and correcting defects during product design and production less expensive than when defects found at customer site.

*Philosophy of TQM
Characteristics: TQM focuses on (i) identifying root causes of quality problems and correcting them at the source, as opposed to inspecting the product after it has been made. (ii) Stresses that quality is customer driven and attempts to embed quality in every aspect of the organisation. (iii) Concerned with technical aspects of quality and involvement of people in quality such as customers, company employees, and suppliers.

1. Customer focus
First feature of TQM is companys focus on its customers Quality is defined as meeting or exceeding customer expectations. Goal is to identify and then meet customer needs. A perfectly produced product has little value if it is not what customer wants because tastes and preferences change. Quality is customer driven Companies need to continually gather information thru focus groups, market surveys, customer interviews to stay in tune with what customers want.

2. Continuous improvement (kaizen)

A philosophy of never-ending improvement. Requires that company continually strives to be better through learning and problem solving Because we can never achieve perfection, we must always evaluate our performance and take measures to improve it.

*Approaches that can help companies with cont. improvement

a. Plan-Do- Study-Act Cycle (PDSA) describes activities a company needs to perform in order to incorporate continuous improvement in its operation. i. Plan first step is to plan. Managers must evaluate current process and make plans based on problem found Need to document all current procedures, collect data, and identify problems This information should then be studied and used to develop a plan for improvement as well as specific measures to evaluate performance.

PDSA Cycle
ii. Do implement plan. During implementation process, managers should document all changes made and collect data for evaluation iii. Study data collected in previous phase; data evaluated to see whether plan is achieving goals established in the plan phase.

PDSA Cycle contd.

iv. Act on the basis of the results of first three phases. Best way is to communicate results to other members in company and implement new procedure if it has been successful. Afterwards, need to continue evaluating process, planning and repeating cycle again.

b. Benchmarking
Another way of implementing continuous improvement by studying business practices of other companies considered best in class for purposes of comparison. Benchmark company does not have to be in same business, as long as it excels at something that company doing the study wishes to emulate (copy).

c. Employee Empowerment
TQM empowers employees to seek out quality problems and correct them. TQM provides incentives for employees to identify quality problems and are rewarded for uncovering quality problems, not punished. Employees given continual and extensive training in quality measurement tools to assist in making decisions relative to quality in the production process.

Employee empowerment cont.

Role of employees in TQM very different from what it was in traditional systems Workers empowered to make decisions relative to quality in the production process. They are considered a vital element of the effort to achieve high quality. Their contributions are highly valued, and suggestions are implemented. Employees given continual and extensive training in quality measurement tools to perform this function

To further stress role of employees in quality

TQM differentiates between external and internal customers External those that purchase companys goods and services e.g. patients in hospital Internal customers employees of the organisation who receive goods and services from others in the company. A defective item would not be passed to external customer, nor to an internal customer.

Employee Empowerment cont.

TQM stresses team work in solving quality problems. Teams work regularly to correct problems through e.g. quality circle, brainstorming, discussion, quality control tools What is a Quality circle a team of volunteer production employees and their supervisors (810) that volunteer and meet regularly to solve quality problems. Team meets weekly; analyses and solve problems, decisions made through group concensus.

Quality circle
Open discussion promoted; criticism not allowed QCs friendly and casual but is serious business. Very successful in many firms Employees viewed as most important organisational resource and great care is taken in employee hiring and training. Employees extensively trained in customer service, communication, and quality awareness

Use of Quality tools

Continual monitoring of quality important, and employees meet regularly in teams to evaluate their effectiveness. All employees shown how quality of their individual jobs contributes to success of business. If employees are to identify and correct quality problems, they need proper training Need to understand how to assess quality by using a variety of quality control tools, how to interpret findings, and how to correct problems.

7 Tools of Quality Control

Include cause and effect diagrams, flow charts, checklist, control charts, scatter diagrams, Pareto analysis, histogram. 1. Cause and effect diagrams charts that identify potential causes for particular quality problems. Sometimes called the fishbone diagram. Head of fish (quality problem), spine that connects to head is cause of the problem. Causes could be related to machines, workers, measurements, suppliers, materials and other aspects of production.

Quality control tools

2. Flowcharts a schematic diagram of the sequence of steps involved in an operation or process. By seeing the steps involved in an operation process, everyone develops a clear picture of how the operation works and where the problem could arise. 3. Checklist a list of common defects and the number of observed occurrences of these defects. Allows worker to collect specific information regarding defects observed.

Quality control tools

4. Control charts used to evaluate whether a process is operating within set expectations relative to some measured value such as weight, width, or volume. For example, we can measure the weight of food items when delivered, volume of bottle of soft drink. When production process is operating within expectations, we say that it is in control

Quality control tools

5. Scatter diagrams are graphs that show how two variables are related to one another; particularly useful in detecting the amount of correlation, or degree of linear relationship between two variables. For example, increased production speed and number of defects could be correlated +vely; as production speed increases, so does the number of defects.

Quality control tools contd.

The greater the degree of correlation, the more linear are the observations in the scatter diagram. On the other hand, the more scattered the observations in the diagram, the less correlation exists between the variables. Other types of relationships can also be observed e.g. an inverted U. May be the case when one is observing the relationship between 2 variables such as oven temperature and number of defects, since temperature below and above the ideal could lead to defects.

Quality tools
6. Pareto analysis a technique used to identify quality problems based on their degree of importance. Logic behind this analysis is that only a few quality problems are important. Also called the 80-20 rule and trick is to identify the causes. One way is to develop a chart that ranks causes of poor quality in decreasing order based on % of defects each has caused.

Quality control tools contd.

For example, a tally can be made of the number of defects that result from different causes, such as cook error, wrong recipes, or inaccurate measurements of portions in serving special diets. Percentages of defects can be computed from the tally and placed in a histogram chart 7. A histogram chart that shows the frequency distribution of observed values of a variable.

Quality tools
In the foodservice industry, use of quality control tools important in identifying quality problems. Quality tools can be used to evaluate the acceptability of product quality and to monitor product quality from individual suppliers. Can also be used to evaluate quality problems e.g. long transit time or poor refrigeration, or evaluate and monitor quality of delivered goods (meat, vegetables, groceries, dry stores etc).

Product Design
A critical aspect of building quality into a product is to ensure that product design meets customer expectations A useful tool for translating the preferences of customer into specific technical requirements is quality function deployment (QFD). QFD also useful in enhancing communication between different functions such as marketing, food contractors, hospital administration.

Process Management
According to TQM, a quality product comes from a quality process. This means that quality should be built into the process. Quality at the source belief that it is better to uncover source of quality problems and correct it than to discard defective items after production.

Quality at source
Shows the difference between old and new concepts of quality. Old concept focused on inspecting goods after they were produced. If inspection reveals defects, defective product discarded or sent back for reworking; costs money. New concept of quality focuses on identifying quality problems at the source and correcting them.

Managing Supplier Quality

Traditionally, companies engaged suppliers in competitive price bidding. When materials arrive, an inspection is performed to check their quality. TQM views this practice as contributing to poor quality and waste time and cost. Today, company representatives reside at their suppliers location, and are involved in every stage from product design to final production.

Why TQM Efforts Fail

Most important factor in success/failure of TQM efforts is the genuineness of the organisations commitment. Companies have to embrace TQM with true belief, not mere lip service. Common causes of TQM failure: lack of genuine quality culture; lack of top management support and commitment;

Why TQM Efforts fail

Over- and under-reliance on statistical process control (SPC) methods belief system.

SPC is not a substitute for continuous improvement, teamwork, and a change in the organisations belief system but a necessary tool for identifying quality problems.

TQM oriented companies

Companies that have attained benefits of TQM have created a quality culture. Have developed processes for identifying customer-defined quality and Have a systematic methods for listening to their customers, collecting and analyzing data pertaining to customer problems, and making changes based on customer feedback.

Operations Management
Implementing TQM requires broad and sweeping changes throughout the foodservice. Also affects other decisions within operations management. It sets direction for the firm and level of commitment Decision to implement TQM affects product design, which needs to incorporate customerdefined quality. Processes are then redesigned in order to produce products with higher quality standards

Operations management
Job design is affected as workers need to be trained in quality tools and become responsible for eliminating quality problems Supply chain management also affected as commitment to quality translates into partnering with suppliers Every aspect of the operations function must change to support the commitment toward TQM.

TQM has IMPACTS on every aspect of organisation

Goal of TQM is to satisfy customer needs by producing the exact product that customers want. Requires solid identification of target markets and an understanding of whom product is intended for. Marketing needs to accurately pass customer info along to operations & operations to include marketing in any planned changes.

Summary
Decision to implement TQM affects product design which needs to incorporate customer-defined quality. Processes redesigned in order to produce products with higher quality standards Job designed affected workers need to be trained in quality tools and become responsible in identifying/solving quality problems