Total Quality

Management

What is Quality ?

Definitions of Quality
Quality means different to different people:
1. Customer-Based: Fitness for use, meeting customer expectations.
2. Manufacturing-Based: Conforming to design, specifications, or
requirements. Having no defects.
3. Product-Based: The product has something that other similar products
do not that adds value.
4. Value-Based: The product is the best combination of price and
features.
5. Transcendent: It is not clear what it is, but it is something good...

Quality means different to different people. There are five ways of looking at quality definitions

I. Transcendent Definition:
"Quality is neither mind nor matter, but a third entity independent of the twoeven through Quality
cannot be defined, you know what it is."
II. Product-Based Definition:
"Quality refers to the amounts of the unpriced attributes contained in each unit of the priced attribute."
III. User-Based Definition:
"Quality is fitness for use." (J.M. Juran, ed., Quality Control Handbook, p2).
IV. Manufacturing-Based Definition:
"Quality [means] conformance to requirements." "Quality is the degree to which a specific product
conforms to a design or specification."
V. Value-Based Definition:
"Quality means best for certain customer conditions. These conditions are (a) the actual use and (b) the
selling price of the product."

Dimensions of quality
Performance
-Products operating characteristics

Features
- Enhancements made to add commercial appeal

Reliability
- Ability to function at the specified level of performance

Conformance
- Degree of product that meet pre-established standards

Dimensions of quality
Serviceability
Speed, competence of the product

Aesthetics
Physical appearance; how the product looks

Perceived Quality
Resulting from advertisement, image, brand etc.

COSTs of quality
Cost of Prevention
Cost incurred for activities which remove and prevent defects from
occurring

Cost of Appraisal
Cost incurred to identify poor quality products after they occur but
before shipment

COSTs of quality
Cost of Internal Failure
Cost incurred during production process

Cost of External Failure

Cost incurred after product is shipped

Evolution of quality management

TQM
Companywide Quality Control
Total Quality Control
Quality Assurance
Quality Control

Mass Inspection

What is Total Quality

Management?

What is TQM?

TQM is the enhancement to the traditional way of doing business.

It is a proven technique to guarantee survival in the world-class competition.
TQM is for the most part common sense.
Analyzing three words (TQM), we have:
TotalMade up of the whole
QualityDegree of excellence a product or service provides
ManagementAct, art, or manner of handling, controlling, directing, etc.

Therefore TQM is the art of managing the whole to achieve the excellence.

What is Total Quality Management?

A holistic approach to long-term success that
views continuous improvement in all aspects of
an organization as a process and not as a shortterm goal

Refers to management methods used to enhance quality

and productivity in business organizations.

What is Total Quality Management?

Management philosophy that seeks to integrate all
organizational functions (marketing, finance, design,
engineering, and production, customer service, etc.) to
focus on meeting customer needs and organizational
objectives.

What is Total Quality Management?

TQM is defined as both philosophy and a set of guiding principles that
represents the foundation of a continuously improving organization.

It is the application of quantitative methods and human resources to improve

all the processes within an organization and exceed customer needs now and
in future.

TQM integrates fundamental management techniques, existing improvement

efforts, and technical tools under disciplined approach.

Total Quality Management (TQM)

In trying to define TQM is it is well worth considering the relevance and meaning of the three words in it's
title.:
Total - The responsibility for achieving Quality rests with everyone a business no matter what their function.
It recognizes the necessity to develop processes across the business, that together lead to the reliable delivery
of exact, agreed customer requirements. This will achieve the most competitive cost position and a higher
return on investment.
Quality - The prime task of any business is to understand the needs of the customer, then deliver the product
or service at the agreed time, place and price, on every occasion. This will retain current customers, assist in
acquiring new ones and lead to a subsequent increase in market share.
Management - Top management lead the drive to achieve quality for customers, by communicating the
business vision and values to all employees; ensuring the right business processes are in place; introducing and
maintaining a continuous improvement culture.

Principles of TQM
1. Focus on Customer and Stakeholders
2. Participation and Teamwork of everyone in the organization
3. A Process Focus supported by Continuous Improvement and Learning

Principles of TQM
1. Customer and Stakeholder Focus
-CUSTOMER is the principal judge of Quality
*Meet Expectations
*Reducing defects and errors

*Resolving Complaints

Principles of TQM
1. Customer and Stakeholder Focus
-A TQ Organization must:
a. Demonstrate commitment to employees
b. Provide opportunities for development and growth
c. Provide recognition beyond normal compensation systems
d. Share knowledge
e. Encourage risk taking

Principles of TQM
2. Participation and Teamwork
-Full use of the knowledge and creativity of the entire workforce
-Involvement of the total workforce in attacking problems and aiming
for continuous improvement
ex: Quality Circles,

Principles of TQM
3. Process Focus and Continuous Improvement

-According to AT&T, Process is how work creates value for

customers
-Process: The collection of activities and operations involved
in transforming inputs into outputs

Principles of TQM
3. Process Focus and Continuous Improvement
-refers to both incremental and breakthrough improvements
a. Enhancing value of customer through new and
improved products and service
b. Reducing errors, defects, waste etc.
c. Increasing productivity and effectiveness
d. Improving responsiveness and cycle time performance

Antecedents of Modern Quality Management

Guilds of Medieval Europe
(From the end of 13th Century to Early 19th Century)

The Industrial Revolution

(From the end of 17th Century to 1800s)

The World War II

(From 1938 to 1945)

Post World War Era

(After 1945)

Guilds of Medieval Europe

(From the end of 13th Century to Early 19th Century)

Guilds of Medieval Europe

(From the end of 13th Century to Early 19th Century)

Antecedents of Modern Quality Management

The Industrial Revolution
(From the end of 17th Century to 1800s)

Craftsmanship
The Factory System
The Taylor System

Industrial Revolution: The Craftsmanship

World War II

Post World War II

The Birth of Total Quality Management

The birth of the Total Quality Control in US was in direct response to a quality revolution in
Japan following WW-II as Japanese manufacturers converted from Producing Military Goods for
internal use to producing civilian goods for trade.

At first Japan had a widely held reputation for shoddy exports, and their goods were shunned
by international markets. This led Japanese organizations to explore new ways of thinking about
quality.

And from here starts the era of Quality Gurus!

Total Quality Management (TQM)

What is a quality guru?

A guru, by definition, is a good person, a wise person and a teacher.

A quality guru should be all of these, plus have a concept and approach to
quality within business that has made a major and lasting impact.

These gurus have done, and continue to do, that, in some cases, even after
their death.

The Era of Quality Gurus

There have been three groups of gurus since the 1940s:

Early 1950s: Americans who took the messages of quality to Japan

Late 1950s: Japanese who developed new concepts in response to the Americans
1970s-1980s: Western gurus who followed the Japanese industrial success

Total Quality Management (TQM)

The Americans who went to Japan:

J. Edward Deming

Joseph M. Juran

Armand V Feigenbaum

Joseph Juran
Juran is a founder of the Juran Institute in Wilton, Connecticut.
He promoted the concept known as Business Process Quality,
which is a technique of Cross-Functional Quality Improvement.
He was invited to Japan in 1954 by the Union of Japanese
Scientists and Engineers (JUSE)
He predicted the quality of Japanese goods would overtake the
quality of goods produced in US by Mid-1970s because of Japans
revolutionary rate of quality improvement

W. Edward Deming
Deming, who had become frustrated with American managers when most programs
of statistical quality control were terminated once the war and government
contracts came to an end, was invited to Japan in 1954 by the Union of Japanese
Scientists and Engineers (JUSE).
Deming was the main figure in popularizing quality control in Japan and regarded
as national hero in that country.
He believes that quality must be built I into the product at all stages in order to
achieve a high level of excellence.
His thoughts were highly influenced by Walter Shwartz who was the proponent of
Statistical Quality Control (SQC). He views statistics as a management tool and
relies on statistical process control as means in managing variations in a process.

Demings View of a Production System

Armand V Feigenbaum was the originator of total quality

control, often referred to as total quality.
He defined it as:

An effective system for integrating quality

development, quality maintenance and quality
improvement efforts of the various groups within an
organization, so as to enable production and
service at the most economical levels that allow full
customer satisfaction.
He saw it as a business method and proposed three steps to
quality:
Quality leadership
Modern quality technology
Organizational commitment

Japanese who developed new concepts in response

to the Americans
Dr Kaoru Ishikawa

Dr Genichi Taguchi

Shigeo Shingo

Dr Kaoru Ishikawa made many contributions to quality, the most noteworthy being
his total quality viewpoint, company wide quality control, his emphasis on the human
side of quality, the Ishikawa diagram and the assembly and use of the seven basic
tools of quality:

Pareto analysis

Cause and effect diagrams

Stratification

how is the data made up?

Check sheets

how often it occurs or is done?

Histograms

Scatter charts

Process control charts

which are the big problems?

what causes the problems?

what do overall variations look like?

what are the relationships between factors?
which variations to control and how?

Ishikawa Diagram (Cause & Effects Diagram)

Also known as Fishbone Analysis

Shigeo Shingo
Shingo is strongly associated with Just-in-Time manufacturing, and was the
inventor of the single minute exchange of die (SMED) system, in which
set up times are reduced from hours to minutes, and the Poka-Yoke
(mistake proofing) system.
In Poka Yoke, defects are examined, the production system stopped and
immediate feedback given so that the root causes of the problem may be
identified and prevented from occurring again.

Poka Yoke: Fail Safe/Mistake Proofing System

Dr Genichi Taguchi
Taguchi believed it is preferable to design product that is robust or insensitive to

variation in the manufacturing process, rather than attempt to control all the many
variations during actual manufacture.
Taguchi methodology is fundamentally a prototyping method that enables the
designer to identify the optimal settings to produce a robust product that can
survive manufacturing time after time, piece after piece, and provide what the
customer wants.

Western gurus who followed the Japanese

industrial success
Philip B Crosby

Tom Peters

Philip B Crosby
Crosby is known for the concepts of Quality is Free and Zero Defects, and
his quality improvement process is based on his four absolutes of quality:

Quality is conformance to requirements

The system of quality is prevention

The performance standard is zero defect
The measurement of quality is the price of non-conformance

According to Philip Crosby:

Quality is not only free, it is an honest-to-everything profit maker. Every penny
you dont spend on doing things wrong, over, or instead of, becomes half a penny
right on the bottom line. In these days of who knows what will happen to our
business tomorrow there arent many ways left to make a profit improvement.
If you concentrate on making quality certain, you can probably increase your
profit by an amount equal to 5%-10% of your sales. That is a lot of money for
free.

Tom Peters
Tom Peters identified leadership as being central to the quality improvement process,
discarding the word Management for Leadership. The new role is of a facilitator, and
the basis is Managing by walking about (MBWA), enabling the leader to keep in touch
with customers, innovation and people, the three main areas in the pursuit of excellence.
He believes that, as the effective leader walks, at least 3 major activities are

Listening

suggests caring

Teaching

values are transmitted

Facilitating

able to give on-the-spot help

happening:

The Trends Accelerating Use of TQM: 1970s the era

of Hue & Cry!
If Japan Can Why Cant We?

At first U.S. manufacturers held onto to their assumption that Japanese success was price-related,
and thus responded to Japanese competition with strategies aimed at reducing domestic production
costs and restricting imports.

This, of course, did nothing to improve American competitiveness in quality.

As years passed, price competition declined while quality competition continued to increase.

By the end of the 1970s, the American quality crisis reached major proportions, attracting attention
from national legislators, administrators and the media.

A 1980 NBC-TV News special report, If Japan Can Why Cant We? highlighted how Japan had
captured the world auto and electronics markets. Finally, U.S. organizations began to listen.

The American Response

The US Business Community Wakes up in 1980s from Deep Slumber
The chief executive officers of major U.S. corporations stepped forward to provide
personal leadership in the quality movement.

The U.S. response, emphasizing not only statistics but approaches that embraced
the entire organization, became known as Total Quality Management (TQM).

Several other quality initiatives followed. The ISO 9000 series of qualitymanagement standards, for example, were published in 1987.

Integrated Organizational
Infrastructure(Support of 3 principles)
1.
2.
3.
4.
5.

Customer Relationship Management

Leadership and Strategic Planning
Human Resource Management
Process Management

Information and Knowledge Management

Integrated Organizational
Infrastructure(Support of 3 principles)
1. Customer Relationship Management
-Understanding customer needs (current and future)
-Keeping pace with changing markets
-Measuring customer satisfaction relative to competitors

-Knowing satisfaction and dissatisfaction information

Integrated Organizational
Infrastructure(Support of 3 principles)
2. Leadership and Strategic Planning
-Inventories can be managed, but people must be led.~R.Perot
-Management should serve as role models to inspire and motivate the
workforce and encourage involvement, learning, innovation, and
creativity.

Integrated Organizational
Infrastructure(Support of 3 principles)

2. Leadership and Strategic Planning

-Strategic Planning should be a driver for quality
excellence and needs to anticipate the changes
Ex: *customers expectations, new business and
partnering opportunities, Global and electronic
marketplace, technological developments, new
customer segments, evolving regulatory
requirements, community expectations, strategic
changes by competitors.

Integrated Organizational
Infrastructure(Support of 3 principles)
3.

Human Resource Management

-Management needs a well-trained and involved workforce
-Design and management of appropriate work systems
such as:
*Reward and recognition approaches
*Education and training approaches
*Healthful, safe and motivating work
environment

Integrated Organizational
Infrastructure(Support of 3 principles)
4. Process Management
-involves the design of processes to develop and deliver
products and services that meet the needs of customers,
daily control so that they could perform as required, and
continual improvement.

Integrated Organizational
Infrastructure(Support of 3 principles)
5. Information and Knowledge Management
-Depend on data and information to support performance
measurement, management, and improvement.
-The data must be supported by effective analysis and must be reliable,
accurate, and timely.

Importance of Quality in Achieving

PIMS researchers
found the following:
Competitive
Advantage
1. Product quality is an important determinant of business
profitability

Importance of Quality in Achieving

Competitive Advantage

PIMS researchers found the following:

2. Business that offer premium quality products usually have large

market share

Importance of Quality in Achieving

Competitive Advantage

PIMS researchers found the following:

3. Quality is significantly related to a higher return on investment

Importance of Quality in Achieving

Competitive Advantage
PIMS researchers found the following:
4. Use of quality improvement usually leads to increased market share but
at the cost of reduced short-run profitability
5. High quality producers can usually charge premium prices