Tqm

By Sourabh Jain
MBA 2010 - 2012
National Institute of Technology Karnataka,
Surathkal, India
12/11/2012 Sourabh Jain 1

Preface
• This is a PowerPoint file I created in order to
help me in my studies.

• The material in these slides are a distilled
version of the literature from 2 books
1. Total Quality Management – 3rd Edition –
Besterfield, Michna, Besterfield, Sacre.
2. Total Quality Management – Bharat Wakhlu

HOME
Introduction Leadership

Customer Employee
Satisfaction Involvement

Continuous Process Performance
Improvement Measures

QMS SPC


Introduction


Quality
• Degree to which a set of inherent
characteristics fulfils requirements.

• Q=Performance/Expectations

• TQM; T = Total i.e. company-wide, suppliers,
customers; M = Management i.e. art of
directing and controlling

Quality q and Total Quality Q
• Product orientation
• Ensure produced goods are fit for sale
• No prevention, No learning


Quality q and Total Quality Q
• Customer/Process/Product orientation
• Listen to customer, product design, process
optimized
• Right the first time, every time; Learning; importance
of internal customers


Dimensions of Quality
Dimension Meaning

Performance Primary product characteristics

Features Added features

Conformance Meeting standards

Reliability Consistency of performance

Durability Useful life

Service Resolution of complaints

Response Human to human interface

Aesthetics Sensory characteristics

Reputation Past performance

Total Quality
1. Performance Superiority

2. Delight customers

3. Provide value (value=quality/cost)

4. Doing the right things

5. Right the first time


Definition of TQM
• TQM is the art of managing the whole to achieve
excellence.

• TQM is a philosophy and a set of guiding
principles that represent the foundation of a
continually improving firm.

• It is the application of quantitative methods and
HR to improve all processes within a firm and
exceed customer needs now and in the future.


6 basic concepts of TQM
1. Committed and involved management to provide long term- top
to bottom – organizational support

2. Unwavering focus on the customer – internal and external

3. Effective involvement and utilization of entire workforce

4. Continuous improvement of business and production process

5. Treat suppliers as partners

6. Establish performance measures for processes


Culture changes for TQM
Quality element OLD CULTURE TQM CULTURE

Definition Product oriented Customer oriented

Priorities Second to service and cost Equal to service and cost

Decisions Short term Long term

Emphasis Detection Prevention

Errors Operations System

Responsibility Quality Control Everyone

Problem Solving Managers Teams

Procurement Price Life cycle costs, Partnership

Manager’s Role Plan, assign, control, Delegate, coach, facilitate,
enforce mentor

Model for TQM

Product,
Systems
Outstanding Services People
and
Leadership and power
Procedures
Process
MEETING/
EXCEEDING
CUSTOMER
EXPECTATIONS

CONTINUOUS CUSTOMER
BENCHMARKING SYSTEMATIC FOCUS
IMPROVEMENT


Paradigms of TQM
• Belief that people are a potential source of
‘beneficial forces’ will lead to total quality

• Functional and Hierarchical divisions of a firm
contribute to parochial thinking – not good

• Everyone has to participate in obtaining total
quality

Gurus of TQM
• Shewhart
1. Economic Control of Quality of Mfg product
2. Control Chart Theory
3. Assignable and chance causes of variation
4. Rational Subgroups
5. PDSA cycle


Gurus of TQM
• Deming
1. Out of the Crisis
2. Quality, Productivity and Competitive
Position
3. 14 points to improve q,p,c
4. Taught SPC and quality to Japanese


Gurus of TQM
• Juran
1. Juran’s Quality control Handbook
2. Project Improvements based on ROI
3. Promoted commitment to quality at all levels
4. Juran Trilogy – Planning, Control,
Improvement


Gurus of TQM
• Feigenbaum
1. Total Quality Control
2. Customer Satisfaction
3. Genuine Management Involvement
4. Employee Involvement
5. Company wide total quality control
6. First line supervision leadership


Gurus of TQM
• Ishikawa
1. SPC texts in Japanese and English
2. Adapted TQC i.e. TQM in Japan
3. Fishbone diagram
4. Quality circles


Gurus of TQM
• Crosby
1. Quality is Free
2. Quality without tears
3. Do it right the first time
4. Zero defects


Gurus of TQM
• Taguchi
1. Loss Function
2. Quality Engineering
3. Robust design of parameters/tolerances


Obstacles to TQM
1. Lack of management commitment
2. Inability to change organization culture
3. Improper planning
4. Lack of continuous training and education
5. Incompatible Org structure & isolated
departments and individuals
6. Ineffective measurement techniques
7. Paying inadequate attention to customers
8. Inadequate use of empowerment and teamwork
9. Failure to continually improve

Benefits of TQM
• Improve quality
• Employee participation and satisfaction
• Teamwork and Working relationships
• Customer satisfaction
• Productivity
• Communication
• Profitability and Market Share


Leadership


Leader
• A leader
1. Shapes
2. Promotes
3. Protects
4. Exemplifies
• the organization’s values


Manager vs. Leader
Manager Leadership for quality (Outstanding leadership)

Plan EXPOSE limited utility of current approaches

Organize ENVISION the future

Staff ENLIST others in the quest

Lead EMPOWER them to act

Control ENCOURAGE right effort

Feedback EXEMPLIFY by personal action


Leadership Style

Leads to time bomb
situations Best style

FEARFUL WHOLESOME
RIGID STYLE
STYLE STYLE


Characteristics of Quality Leaders
1. Priority attention to internal/external customers

2. Empower, rather than control subordinates

3. Emphasize improvement, rather than maintenance

4. Emphasize prevention

5. Encourage collaboration rather than competition

6. Train and coach, rather than direct and supervise


Characteristics of Quality Leaders
7. Learn from problems

8. Continually try to improve communications

9. Continually demonstrate their commitment to quality

10. Choose suppliers on basis of quality, not price

11. Establish organizational systems to support quality effort

12. Encourage and Recognize team effort


7 habits of highly effective people
1. Be proactive - don’t let fate control you, you control it

2. Begin with the end in mind – have a vision and plan

3. Put first things first – learn to prioritize

4. Think win-win – seek mutual benefits

5. Seek first to understand, then be understood

6. Synergy – teams are better than individuals

7. Sharpen the saw – renew one’s physical, spiritual, mental and
emotional dimension


Deming Philosophy
• Create and publish aims/purpose of firm

• Learn the new philosophy

• Understand purpose of inspection

• Stop awarding business on price alone

• Improve constantly and forever the system

• Institute training

• Teach and institute leadership


Deming Philosophy
• Drive out fear, create trust and a climate for innovation

• Optimize efforts of teams, groups and staff areas

• Eliminate exhortations for the work force

• Eliminate numerical quotas for workforce and MBO

• Remove barriers that rob people of pride of workmanship

• Encourage education and self-empowerment for everyone

• Take action to accomplish the transformation


Customer Satisfaction


Customer Satisfaction Model

Company Offer

Satisfier

Customer Needs


Notes
• Customer – Internal and External is the focus.

• Customer Satisfaction is subjective, hence
hard to measure

• Customer Satisfaction should not be viewed in
a vacuum


Customer feedback
1. To discover customer dissatisfaction

2. Discover relative priorities of Quality

3. Compare performance with competition

4. Identify customer’s needs

5. Determine opportunities for improvement


Modes of feedback
1. Comment card – Service industry

2. Customer Questionnaire – mail, telephone

3. Focus groups – like a GD

4. Toll free telephone numbers – complaints

5. Customer visits – B2B

6. Report card – send to customer every quarter

7. The internet – blogs

8. Employee feedback – why problem?

9. Mass customization – variety at affordable cost

Customer Complaints
Complain to Action
Management Shout at Front
1% Line Employees
19%

Do nothing
80%

Every complaint should be accepted, analyzed and acted upon because those
who don’t complain might have switched loyalty.

Handling complaints
• Accept feedback

• Empower front-line employees to resolve

• More inspection does not solve it; find the root cause

• Communicate complaint to everyone in firm

• Contact complainant and put mind at ease

• Be proactive about customer needs


Employee Involvement


Motivation
• Maslow’s Hierarchy of needs
• Herzberg’s 2-factor theory

• What employees want
1. Interesting Work
2. Appreciation
3. Involvement
4. Job Security


Achieving a motivated work force
1. Know thyself

2. Know your employees

3. Establish a +ve attitude

4. Share goals

5. Monitor progress

6. Develop interesting work

7. Communicate effectively

8. Celebrate success

Employee Surveys
1. Quality Council creates Survey team

2. Develop instrument (questionnaire).Constructs to be used are
1. Personality Characteristics
2. Management Styles
3. Job attitudes
4. The work

3. Administer survey (confidential and by 3rd party)

4. Compile and analyze (report is circulated in firm)

5. Determine areas for improvement


Suggestion Systems
• Management must make it easy for employees to
suggest improvements

1. Be progressive – regularly ask employees

2. Remove fear – focus on the process, not the person

3. Simplify the process

4. Respond quickly - accept/Reject/Refer giving time
or reason

5. Reward the idea

Performance Appraisal
• Purpose
1. Tells employee how they are performing
2. Basis for promotions and increments
3. Counseling
4. Opportunities

• Employee involvement is critical and appraisals
must be continuous.

• Types – Ranking, Narrative, Forced, Graphic

Problems with appraisal systems
1. Emphasis on short term performance

2. Individual appraisals destroy teamwork

3. A person is only about 15 % responsible for
his results

4. Based on subjectivity and immeasurables


Improving the appraisal system
1. Use rating scales with fewer rating categories

2. Equal emphasis to individual and group appraisals

3. More frequent performance reviews with focus on
improvement

4. Promotion decision to be based on current performance
AND potential for new post

5. External customer satisfaction a part of the process

6. 360 degree appraisals

7. Evaluation for process improvements

Benefits of employee involvement
• Employees
1. Make better decisions using expert knowledge of
process

2. More likely to implement and support decisions they
had a part in making/better able to accept changes

3. Better able to spot pinpoint areas for improvement

4. Better able to take immediate corrective action

5. EI increases morale, improves industrial relations
and increases commitment to unit goals

Continuous Process
Improvement


Juran Trilogy – Plan, Control, Improve
• Planning
1. Determine external and internal customers

2. Identify their needs and translate into requirements

3. Develop product/service as per needs of not only
customer but other stakeholders too

4. Develop processes able to produce product/service

5. Transfer plans to operations ensuring process validity

• Control
1. Determine items to be controlled and their units of
measure

2. Set goals for controls and determine what sensors are
needed

3. Measure actual performance

4. Compare it with goals

5. Act on the difference


• Improvement
• Quality council identifies improvement areas and establishes project
teams to work on it

Quality Control (during operations)
50
Sporadic Waste
40
30
Original Zone of Quality Control
QUALITY 20
New Zone of Quality Control
PLANNING 10 Chronic Waste Quality
Improvement

FEEDBACK
0
0 1 2 3 4 5 6 7 8 9 10
Time
FEEDBACK
Cost of poor Quality

PDSA Cycle

Plan

Act Do

Study


Problem Solving method
1 Identify
Opportunity

7 Plan for 2 Analyze
Future Process

6 3 Develop
Standardize Optimal
solution Solution (s)

5 Study the 4
results Implement

1 Identify Opportunity
• Identify problem – Pareto
analysis, Survey, Brainstorm, proposals

• Form team – QC forms a multifunction team if
required

• Define scope – scope, goals, milestones


2 Analyze Process
• Develop Process Flow diagram

• Define target performance measures

• Relevant Data collection

• Fishbone diagram


3 Develop Optimal Solution (s)
• Brainstorm – create new process/combine
different process/modify existing process

• Evaluate Test solutions using control charts –
criteria: feasibility, scope, training and effects


4 Implement
• Prepare implementation plan

• Obtain approval

• Implement process improvements


5 Study the results
• Monitor and evaluate the change

• Check if fine tuning is needed

• If dissatisfied with results, repeat some phases


6 Standardize solution
• Positrol (Positive control) – ensures important
variables are kept under control

• Process Certification

• Operator Certification


7 Plan for Future
• Regular reviews of progress by QC

• Knowledge Management System – save
learnings

• Repeat Phase 1.


Kaizen
• Process of continuous improvement in small
increments without complex technology or high
costs making processes better

• Uses concepts like: Value/Non value added
activities, Mudas, Motion studies, SOP, 5S, Visual
Management, JIT etc

• 5S – Sort, Simplify, Sweep, Standardize, Sustain


Six Sigma
• Uses Cp analysis as a way to measure progress

• We should reduce the process variability σ to keep process
centered on the target μ.

• Process Capability Index = USL-LSL/6 σ

• Process Performance Index Cpk
= min(USL-X,X-LSL)/3 σ

• Default Cp >1, Cpk =1

Performance Measures


Strategy
• QC creates a total system of measures using
info from stakeholders and firms’ VMG and
values

• Ex: Quality
• % reduction in nonconformities
• % of certified suppliers


Strategy
• Cost
• % increase in inventory turnover
• % increase in output dollars per employee

• Similarly for innovation (NPD time), reliability (% processes
having Cp=2), flexibility(setup time) etc.

• Tracked monthly to show trends, identify problems and
allocate resources

• Depts create mechanisms and authorities to capture this
data


Performance Measure Presentation
1. Time series graph (Time in days, weeks etc)

2. Control charts (R,Xbar)

3. Capability Index

4. Taguchi Loss Function

5. Cost of poor quality

6. Malcolm Balridge National Quality Award

Quality Costs
• Those costs associated with the non-
achievement of product or service quality as is
required

• Quality cost programs – quantifies this cost

• Use Pareto analysis to find major cost drivers


Quality Costs
• Preventive cost: Cost used up in preventing
recurrence of some failure. Ex: Customer
surveys, Product testing, Quality audits

• Appraisal cost: Cost of assuring acceptability
of product. Ex: laboratory support, measuring
equipment, certifications


Quality Costs
• Internal Failure Cost: cost to evaluate, dispose
off, & either correct or replace nonconforming
products prior to customer delivery. Ex:
rework and scrap, poor supply
materials, internal failure labor loss

• External Failure Cost: After delivery. Ex:
returned goods, updates, warranty
claims, penalties, lost sales, liabilities, goodwill


Malcolm Balridge National Quality
Award
• Leadership 110
• Strategic Planning 80
• Customer and Market focus 80
• Information and Analysis 80
• HR Focus 100
• Process Management 100
• Business Results 450


Quality Management System


QMS
• Registration under ISO involves assessment and
periodic surveillance audit of the adequacy of a
supplier’s quality system by a 3rd party

• Benefits of ISO
1. Customers are demanding compliance
2. To improve processes/systems
3. Global deployment of products
4. Snowball effect


ISO 9000
• Generic in nature
• It has 3 standards
• ISO 9000:2000 QMS fundamentals/vocabulary
• ISO 9000:2000 QMS requirements
• ISO 9000:2000 QMS guidelines for
performance improvement


ISO 9001 requirements
1. Scope
2. Normative reference
3. Terms and Definitions
4. QMS – General Reqs and Documents
5. Management Responsibility
6. Resource Management
7. Product Realization
8. Measurement, Analysis and Improvement


Process based QMS

5
Management
Responsibility

4 QMS
8
6 Resource Continual Measurement Customer
Management Improve Analysis and Satisfaction
Improvement
ment

7 Product
Input Realization
Require Output
ments Product


Implementation
1. Top management commitment
2. Appoint management representative
3. Awareness
4. Appoint implementation team
5. Training
6. Time Schedule
7. Select element owners
8. Review present system
9. Write the documents
10. Install the new system
11. Internal audit
12. Management review
13. Preassessment
14. Registration

Documentation
What will be done and why ?
Policy

Procedures Who, When, Where

How
Work Instructions

Proof

Statistical Process Control


Introduction
• SPC is a technical tool for improving product
and service quality.

• Pareto Diagram
• Process Flow Diagram
• Cause and Effect Diagram
• Check Sheets
• Histogram


Pareto Diagram
• Vital few and the useful many
• Ranks data classifications in descending order


Pareto Diagram
• Solving 50 % of vital few is better and easier
than 50 % of useful many

• Never ending process


Process Flow Diagram


Cause and Effect Diagram
• Brainstorming essential. 4 or more likely
causes determined by voting


Cause and Effect Diagram
• Wide scope for application

• Encourages participation and contribution by
everyone

• Diagrams posted in key locations to stimulate
continued reference


Check Sheets
• For ease of data collection
• Customized for situation


Histograms
• Graphically estimates Cp, relationships to
specifications and target, shape of population
and gaps in data

• Graphical and analytical

• Ungrouped and Grouped data (for large data)


Normal curve
• Larger the Std Dev, flatter the curve (less data)


Types and Causes of variation
• Types
1. Within piece
2. Piece to piece
3. Time to time

• Causes
1. Equipment
2. Material
3. Environment
4. Operator


Variable Control Charts


Process Capability
• σ = Rbar/d2

• Cp = (USL-LSL)/6 σ

• USL-LSL=tolerance

• X

• X

• Cpk = min{(USL-Xbar) or (Xbar-LSL)}/3 σ


Cp and Cpk
1. Cp value does not change as process center
changes
2. Cp=Cpk process is centered
3. Cpk<=Cp
4. Cpk>1 process conforms to specifications
5. Cpk<1 process not conforms to specifications
6. Cp<1 process not capable
7. Cpk=0 average =USL or LSL
8. Cpk <0 average outside specifications

Scatter diagrams
• For correlations


BLUE OCEAN STRATEGY


Tqm

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