Chapter 5 - Total Quality

Management
Mudassar Salman

Learning Objectives

Explain the meaning of TQM

Identify features of the TQM philosophy
Describe the four dimensions of Quality
Identify the costs of Quality
Identify tools used for solving Quality
problems
Quality awards and Quality certifications
Identify Quality leaders and their
contributions
2

What is TQM?

Meeting quality expectations as

defined by the customer

Integrated organizational effort

designed to improve quality of
processes at every business level

Defining Quality 5 Ways

Conformance to specifications

Fitness for use

Evaluation of usefulness vs. price paid

Support services

Evaluates performance for intended use

Value for price paid

Does product/service meet targets and tolerances

defined by designers?

Quality of support after sale

Psychological

e.g. Ambiance, prestige, friendly staff

7

Manufacturing Quality vs.

Service Quality

Manufacturing quality focuses on

tangible product features

Conformance, performance, reliability, features,

durability, serviceability

Service organizations produce

intangible products that must be
experienced

Quality often defined by perceptional factors like

courtesy, friendliness of staff, promptness in
resolving complaints, atmosphere, waiting time,
consistency
8

Dimensions of Quality for

Manufacturing vs. Service
Organizations

Manufacturing

Conformance to
specifications
Performance
Reliability
Features
Durability
Serviceability

Service

Tangible factors
Consistency
Responsiveness to
customer needs
Courtesy /
friendliness
Timeliness /
promptness
Atmosphere
9

Quality in Practice

Motorola and GE attribute their success

to having one of the best quality
management programs in the world.
Six-Sigma was implemented

Levels of defects is reduced to 3.4 parts per

million
Everyone is trained in quality improvement
principles and techniques
Black-Belt their full time job is to identify
and solve quality problems
10

Cost of Quality

Quality effects all aspects of the organization and have

dramatic cost implications
Most obvious consequence of poor quality is dissatisfied
customers and eventual loss of business
Prevention costs cost of preparing and implementing a
quality plan
Appraisal costs cost of testing, evaluating and inspecting
quality
Internal failure costs cost of scrap, rework, and material
losses
External failure costs cost of failure at customer site,
including returns, repairs and recalls

External failures can sometimes put a company out of business

almost overnight
External failure costs tend to be particularly high for service
organizations
11

Cost of Defects

12

The Evolution of TQM

Early 20th century Quality meant

inspection. Reactive in nature
1980s Quality began to have strategic
meaning. Proactive in nature
Successful companies understand that
quality provides a competitive advantage
Put customer first, and define quality as
meeting or exceeding customers
expectation
Quality excellence has become a standard
for doing business
13

Evolution of TQM New

Focus

14

Quality Gurus

Walter A. Shewhart (1920s & 1930s)

Grandfather of quality control

Contributed to understand the process of variability
Developed concept of statistical control charts

W. Edwards Deming (1940s & 1950s)

Father of quality control

Stressed managements responsibility for quality
Developed 14 points to guide companies in quality
improvement
Japanese established Deming Prize in his name
15% of quality problems are actually due to worker error
85% of quality problems are caused by systems and errors

15

Quality Gurus contd.

Joseph M. Juran (1950s)

Defined quality as fitness for use

Developed concept of cost of quality
Originated idea of quality triology

Armand V. Feigenbaum (1960s)

Quality planning
Quality control
Quality improvement

Introduced the concept of total quality control

Philip B. Crosby (1970s)

Coined phrase quality is free

Introduced concept of zero defects
Developed the phrase Do it right the first time
16

Quality Gurus contd.

Kaoru Ishikawa

Developed cause-and-effect diagrams

Identified concept of internal customer
Introduced the concept of quality circles

Genichi Taguchi

Focused on product design quality

Developed Taguchi loss function

Costs of quality increase as a quadratic function as

conformance values move away from target

Robust Design

A design that results in a product that can perform

over a wide range of conditions
17

Traditional view of the cost

of conformance

18

Taguchi view of the cost of nonconformance The Taguchi loss function

19

TQM Philosophy Whats

Different?

TQM attempts to embed quality in every aspect of

the organization
Focus on Customer

Continuous Improvement

Continuous learning and problem solving, e.g. Kaizen, 6

sigma

Quality at the Source

Identify and meet customer needs

Stay tuned to changing needs, e.g. fashion styles

Inspection vs. prevention & problem solving

Employee Empowerment

Empower all employees; external and internal customers

Team approach, quality circle
20

TQM Philosophy Whats

Different? (continued)

Understanding Quality Tools

Team Approach

Teams formed around processes 8 to 10 people

Meet weekly to analyze and solve problems

Benchmarking

Ongoing training on analysis, assessment, and

correction, & implementation of quality tools

Studying practices at best in class companies

Managing Supplier Quality

Certifying suppliers vs. receiving inspection

21

Four Dimensions of
Quality

Quality of design

Quality of conformance to design

Production processes are set up to meet

design specifications

Ease of use

Determining which features to include in the

final design

Instructions, operation, maintenance, safety

Post-sale service

Responsiveness, rapid repair, p.m., spare

parts

22

Cost of Quality 4
Categories

Early detection/prevention is less costly

May be less by a factor of 10

23

Ways of Improving Quality

Plan-Do-Study-Act Cycle (PDSA)

Quality Function Deployment

Also called the Deming Wheel after its originator

Circular, never ending problem solving process

Used to translate customer preferences to

design

Seven Tools of Quality Control

Tools typically taught to problem solving teams

24

PDSA Details

Plan

Do

Implement the plan trial basis

Study

Evaluate current process

Collect procedures, data, identify problems
Develop an improvement plan, performance
objectives

Collect data and evaluate against objectives

Act

Communicate the results from trial

If successful, implement new process

25

PDSA

(continued)

Cycle is repeated

After act phase, start planning and repeat process

26

Quality Function
Deployment

A tool used to translate the preferences of the

customer into specific technical requirements
QFD begins by identifying customer requirements,
coming from marketing department
These requirements are numerically scored, based
on their importance, and scores are translated
into specific product characteristics
Comparison of product is made with its
competitors, relative to identified characteristics
Specific goals are set to address identified
problems
The resulting matrix looks like a picture of house
and is often called the house of quality
27

QFD Contd.

Customer requirements

Survey customers to find out what they

specifically need in our product

Focus groups, telephonic interviews, directly talk

to customers

Competitive Evaluation

How our product compares to those of

competitors
Evaluation scale is from one to five
Higher the rating, the better
28

QFD Contd.

Product Characteristics

Specific product characteristics are on top of

relationship matrix

The Relationship Matrix

The strength of relationship between customer

requirements and product characteristics is shown in
the relationship matrix
A negative relationship means that as we increase
the desirability of one variable, we decrease the
desirability of other
A positive relationship means that as increase in
desirability of one variable is related to an increase in
the desirability of another
29

QFD Contd.

The Trade-off Matrix

The roof of house is put through trade-off matrix

Shows how each product characteristics is
related to the others
What trade-offs we need to make

Setting Targets

The bottom row of the house is the output of

QFD
These are specific, measurable product
characteristics that have been formulated from
general customer requirements
30

QFD Details

Process used to ensure that the product meets

customer specifications

Voice of the
engineer

Voice
of the
customer

Customer-based
benchmarks

31

QFD - House of Quality

Adding trade-offs, targets & developing product

specifications
Trade-offs

Targets

Technical
Benchmarks
32

Seven Problem Solving

Tools

Cause-and-Effect Diagrams
Flowcharts
Checklists
Control Charts
Scatter Diagrams
Pareto Analysis
Histograms
33

Cause-and-Effect
Diagrams

Called Fishbone Diagram

Focused on solving identified quality problem

34

A general cause-and-effect
diagram

35

Flowcharts

Used to document the detailed steps in a

process
Often the first step in Process Re-Engineering

36

Checklist

Simple data check-off sheet designed to

identify type of quality problems at each
work station; per shift, per machine, per
operator

37

Control Charts

Important tool used in Statistical Process

Control Chapter 6
The UCL and LCL are calculated limits used
to show when process is in or out of control

38

Scatter Diagrams

A graph that shows how two variables

are related to one another
Data can be used in a regression analysis
to establish equation for the relationship

39

Pareto Analysis

Technique that displays the degree of importance for each

element

Named after the 19th century Italian economist

Often called the 80-20 Rule

Principle is that quality problems are the result of only a few

problems e.g. 80% of the problems caused by 20% of causes

40

Histograms

A chart that shows the frequency distribution of

observed values of a variable like service time
at a bank drive-up window

Displays whether the distribution is symmetrical

(normal) or skewed

41

Reliability

The probability that a product, service. Or part will perform,

as intended.
No product is guaranteed with 100% certainty to function
properly
High reliability is an important part of customer-oriented
quality
The reliability of a product is a direct function of the
reliability of its component parts.
If all the parts in a product must work for the product to
function, then the reliability of the system is computed as
product of the reliabilities of the individual components:

Rs = (R1)(R2)(R3)(Rn)
Where Rs = reliability of the product or system
R1n = reliability of components 1 through n
42

Reliability contd.

The more components a product has, the lower its

reliability
The failure of certain products can be very critical.
One way to increase product relaibility is to build
redundancy into product design in the form of
backup parts
Redundancy is built into the system by placing
components in parallel.
When one component fails, the other takes over
Rs = (Reliability of 1st component) +
{(reliability of 2nd component) x (probability
of needing 2nd component)}
43

Process Management

A quality product comes from a quality

process
Quality at source

The belief that it is best to uncover the

source of quality problems and eliminate it

Managing Supplier quality

The philosophy of TQM extends to concept of

quality suppliers and ensures that they
engage in the same quality practices
If suppliers meet quality standards, materials
do not have to be inspected upon arrival
44

Quality Awards and

Standards

Malcolm Baldrige National

Quality Award

The Deming Prize

ISO 9000 Certification

ISO 14000 Standards

45

MBNQA- What Is It?

Award named after the former Secretary of

Commerce Regan Administration
Intended to reward and stimulate quality
initiatives
Given to no more that two companies in
each of three categories; manufacturing,
service, and small business
Past winners; FedEx, 3M, IBM, Ritz-Carlton
Typical winners have scored around 700
points
46

MBNQA Criterion
Categories

Points

Leadership
120
2.
Strategic Planning
85
3.
Customer and Market Focus
85
4.
Information and Analysis
90
5.
Human Resource Focus
85
6.
Process Management
85
7.
Business Results
450
Total Points
1000
1.

47

The Deming Prize

Given by the Union of Japanese Scientists

and Engineers since 1951

Named after W. Edwards Deming who

worked to improve Japanese quality after
WWII

Not open to foreign companies until 1984

Florida P & L was first US company winner

48

ISO Standards

ISO 9000 Standards:

Certification developed by International

Organization for Standardization
Set of internationally recognized quality standards
Companies are periodically audited & certified
ISO 9000:2000 QMS Fundamentals and
Standards
ISO 9001:2000 QMS Requirements
ISO 9004:2000 QMS - Guidelines for Performance
More than 40,000 companies have been certified

ISO 14000:

Focuses on a companys environmental

responsibility
49

Why TQM Efforts Fail

Lack of a genuine quality culture

Lack of top management support

and commitment

Over- and under-reliance on SPC

methods
50

Chapter 5 Highlights

TQM focuses on serving the customers quality needs

TQM uses continuous improvement, quality at the
source, employee empowerment, quality tools,
teams, benchmarking, and supplier certification
Four dimensions: product/service design,
conformance, easy of use, post-sale support
Quality costs; prevention, appraisal, internal &
external failures
QFD and Seven Quality Tools used in managing
quality
The MBNQA, Deming Prize, and ISO Certification help
focus on quality improvement and excellence
The seven Quality Gurus all made key contributions

51