Tqm 2

Which is more Important?
Page 2
Quality of Management?
Or
Management of Quality?

Chapter Objectives: At the end of the lesson the
students will be able to:
be generate the right meaning and
interpretation of quality and other related
terms as these will provide a strong
foundation for TQM
Identify the various dimensions of quality
Outline a historical perspective of quality
and the evolution of TQM
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Introduction:
What is Quality?
– Merriam Webster’s Collegiate Dictionary,
10thEdition(1994) defines quality as
“an inherent feature; degree of excellence;
and superiority in kind
Some definitions that have gained wide
acceptance in the corporate world
“Meeting or exceeding customer
expectations”
Juran, one of the quality gurus, defined
quality as;
Fitness for Use
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Introduction
Based on Juran‘s definiton, quality
therefore does not only have to be
perceived by the customer, but the
customer experience of quality of a
product or service is more important.
Quality does not mean an expensive
product
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Introduction
The American National Standards
Institute (ANSI) and the American
Society for Quality (ASO) defined
quality as;
The totality of features and
characteristics of a product or service
that bears on its ability to satisfy
customer’s stated and implied needs.
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The Importance of Quality: The Japanese Chain Reaction
Improve Quality
Costs decreases due to fewer defects,
Lesser rework, fewer delays and better use
Of Men, Machine and Materials
Improve Productivity
Capture market with better quality
and lower price
Stay in business
Provide more jobs
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Introduction
What is a customer?
Anyone who is impacted by the product
or services delivered by an organization
External customer- the end user
Internal customer- other divisions of the
company that receive the processed
product.
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Introduction
What is a product?
the output of a process carried by the
organization. It may be goods (e.g.
cellphones), software(e.g. a computer
code, a report) or service (e.g. banking,
insurance
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Introduction
How is customer satisfaction
achieved?
Two Dimensions of Quality:
Product feature- refers to the quality of
design.
In a manufacturing industry, it includes
performance, reliability, durability, ease
of use, esthetics, etc
In a service industry, customer
satisfation is gained through accuracy,
timeliness, friendliness and courtesy,
knowledge of server, etc.
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Introduction
Freedom from deficiencies – refers to
quality of conformance
Conformance to standards- ability of
the product or service to conform to the
stated and implied requirements of
customers.
Higher conformance means fewer
complaint and increased customer
satisfaction
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Introduction
Why Quality?
Reasons why quality is a cardinal
priority for most organizations.
Competition
Changing customer-the new customer is
not only commanding priority based on
volume but is more demanding about the
“quality system”
Changing product mix – the shift from
low volume high price to high volume,
low price resulted in a need to reduce the
internal cost of poor quality.
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Introduction
Product complexity- as systems have
become more complex the reliability
requirments for suppliers of components
have bome more tough
Higher level of customer satisfaction-
higher customer expectations are getting
spawned by increasing competition.
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History of quality management
…To know the future, know the past!
Before Industrial Revolution, skilled craftsmen
served both as manufacturers and inspectors,
building quality into their products through their
considerable pride in their workmanship.
Industrial Revolution changed this basic concept
to interchangeable parts. Likes of ;
– F. W. Taylor (“scientific management” fame)
emphasized on the use of scientific standards
equitably to managers as well as workers.
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…To know the future, know the past!
– Adam Smith who advocated dividing the labor
required to make a product into simple, repetitive
tasks in order to develop workers’ skills, save time
and use specialized tools
– Frank and Lilian Gilbreth’s Time and Motion
economy, they believed that a way a task is
performed is as important as the time it takes to do
it.
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Statistical approaches to quality control started at
Western Electric with the separation of inspection
division. Pioneers like Dr. Walter Shewhart, Deming
W.Edwards and Joseph M. Juran were all
employees of Western Electric.
– Dr. Walter Shewart (1891-1967) developed the Plan, Do,
Check Act (PDCA) cycle for continuous improvement which is
in use even today
After World War II, under General MacArthur's Japan
rebuilding plan, Deming and Juran went to Japan.
- Deming W, Edwards (1900-1993) modified PDCA cycle of
Shewart to the Plan, Do, Study and Act (PDSA). He also
advocated the extensive used of statistical quality control theory
to Japanese industry along with Juran.
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Deming stressed the importance of suppliers
and customers for the business development
and improvement.
– He believed that people do their best and it is the system
that must change to improve quality.
– His 14 Points for Management formed the basis for his
advise to top Japanese management.
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Joseph M. Juran (1904), developed the Statistical
Quality Handbook for Western Electric Company. He
identified Fitness of quality and popularized the
same
Juran travelled to Japan to teach his own theories-
that hands-on management was necessary at all
levels of corporation to ensure quality control and that
problems are opportunities to make improvements.
– His approach is still known today as the JuranTrilogy;
quality planning, quality control and quality improvement
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In Japan the following individual took seed from this
training and went on to developed their own major
contributions to what is now Total Quality
Management:
Kaoru Ishikawa (1915-1989), strongly advocated
the use of cause and effect diagram to provide a
true representation of the organizational impact and
procedures. He developed Fishbone or Ishikawa
diagram for cause and effect analyis.
Taichi Ohno, known as the father of just-inTime
production. He is also the co-creator of Toyota
Production System (TPS)
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Shigeo Shingo worked with Ohno on the TPS process
and developed some of its popular concepts including
poka-yoke (which means “mistake-proof in Japanese
and refers to taking human judgement out of some
types of production, thereby minimizing human errors)
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Next 20 odd years, when top managers in USA
focused on marketing, production quantity and
financial performance, Japanese managers
improved quality at an unprecedented rate.
Market started preferring Japanese products
and American companies suffered immensely.
America woke up to the quality revolution in early
1980s. Ford Motor Company consulted Dr. Deming
to help transform its operations.
(By then, 80-year-old Deming was virtually unknown
in USA. Whereas Japanese government had
instituted The Deming Prize for Quality in 1950.)
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Managers started to realize that “quality of
management” is more important than
“management of quality.” Birth of the term Total
Quality Management (TQM).
– TQM – Integration of quality principles into
organization’s management systems.
Early 1990s: Quality management principles
started finding their way in service industry. FedEx,
The Ritz-Carton Hotel Company were the quality
leaders.
TQM recognized worldwide: Countries like
Korea, India, Spain and Brazil are mounting efforts
to increase quality awareness.
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The Deming 14 Point Philosophy
The Deming Philosophy
Definition of quality, “A product or a service possesses quality if it helps
somebody and enjoys a good and sustainable market.”
Improve quality
Decrease cost because
of less rework, fewer
mistakes.
Productivity improves
Capture the market
with better quality
and reduced cost.
Stay in
business
Long-term
competitive
strength
Page 23

Deming’s 14 Point Management
1. Create and publish to all employees a statement
of the aims and purposes of the company. The
management must demonstrate their commitment
to this statement.
2. Learn the new philosophy.
3. Understand the purpose of inspection – to
reduce the cost and improve the processes.
4. End the practice of awarding business on the
basis of price tag alone.
5. Improve constantly and forever the system of
production and service.
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6. Institute training
7. Teach and institute leadership.
8. Drive out fear. Create an environment of innovation.
9. Optimize the team efforts towards the aims and
purposes of the company.
10. Eliminate exhortations for the workforce.
11. Eliminate numerical quotas for production.
12. Remove the barriers that rob pride of workmanship.
13. Encourage learning and self-improvement.
14. Take action to accomplish the transformation.
Page 25

Quality Trilogy –
1. Quality planning: Process of preparing to meet
quality goals. Involves understanding customer
needs and developing product features.
2. Quality control: Process of meeting quality
goals during operations. Control parameters.
Measuring the deviation and taking action.
3. Quality improvement: Process for breaking
through to unprecedented levels of
performance. Identify areas of improvement and
get the right people to bring about the change.
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Juran’s Quality Trilogy

1. Balance Scorecard – Robert Kaplan and David
Norton, suggest that a business’s executive team
measure progress in four areas that are equally
important
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•
•
•
•
knowledge
financial performance
Internal business process and
Learning/growth
Using the knowledge to focus the entire organization and its
various programs on “balancing” the scorecard
Major Quality Concepts

2. ISO Standards - The International Standardization
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Organization (ISO).
- headquartered in Switzerland
-more than 100 nations are “members”, that define
and agree on, and abide by a wide rang of product
and process safety and quality standards
-the idea behind ISO certification is that products
made in different nations be compatible for use in
others.
-this allows manufacturers to buy parts from
suppliers in other countries.

- The Quality Management Systems (QMS)
standards are know as “ISO 9000” family of
standards; (ISO 9000-2000, ISO 9001-2000, ISO
9004-2000); the environmental management system
are ISO 14000 and so on.
3. Just-in-Time – a manufacturing theory of producing
just enough product to fill current orders as they are
due. “just –in time for them to be used”
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4. Kaizen – a Japanese term fro “unending
improvement”
-Kaizen represents a system in which management
encourages and implements small, incremental
improvements, involving employees as team members
and creating a culture of workers who all striving to do
better
- it focuses on simplifying complex process and training
employees to measurable improve them.
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5. Quality Circles – based on a Japanese method of
grouping people together in “Quality Control” (QC),
meetings where they shared their expertise and worked
to solved a problem or improve process.
6. Six Sigma – created by Motorola in 1980s. The name
refers to a scientific way of describing quality based on
variations that occur in any process-plus or minus three
“sigmas.” Sigma is the Greek letter that signifies the
standard deviations in a mathematical formula.
-the “sigma level” quantifies defects per million opportunities
(DPMO)
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7. TOTAL QUALITY MANAGEMENT – a comprehensive,
organization-wide effort to improve the quality of products
and services, applicable to all organizations.
- TQM quality is managed by the total effort of an
organization, and that each department or phase of
production is responsible for making its part of the
product or services as flawless as possible before
passing it on the next user or phase.
Page 32

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