Definition:

Total Quality Management

Total Quality Management (TQ, QM or TQM)

and Six Sigma (6) are sweeping culture
change efforts to position a company for
greater customer satisfaction, profitability and
competitiveness.
TQM may be defined as managing the entire
organization so that it excels on all
dimensions of products and services that are
important to the customer.

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 Quality Descriptions

Design Quality (Features)

vs.

Conformance Quality

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 Conformance Quality
Meeting Our Customers Requirements

Doing (the Right) Things Right the First Time;

Freedom from Failure (Defects)

Consistency (Reduction in Variation)

Continuous Improvement

Quality in Everything We Do
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 Quality Management History
Frederick Winslow Taylor wrote Principles of Scientific Management in 1911

Walter A. Shewhart used statistics in quality control and inspection, and showed
that productivity improves when variation is reduced (1924); wrote Economic
Control of Manufactured Product in 1931

W. Edwards Deming and Joseph M. Juran, students of Shewhart, went to Japan in

1950; began transformation from shoddy to world class goods

In 1960, Dr. K. Ishikawa formalized quality circles - the use of small groups to
eliminate variation and improve processes

In the late 70s and early 80s:

- Deming returned from Japan to write Out of the Crisis,
and began his famous 4-day seminars in the United States
- Phil Crosby wrote Quality is Free
- NBC ran If Japan can do it, why cant we?
- Motorola began 6 Sigma
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 Quality Management History
On the assembly line at the Ford Motor Company in 1923, most of
the workers producing Model Ts were immigrants and could not
speak English. Many were also illiterate. Workers learned their
trade by modeling the actions of other workers. They were unable
to plan, problem-solve, and make decisions. As a result, the Taylor
scientific school of management flourished, and MBAs and
industrial engineers were invented to do this work. Today, however,
the workforce is educated. Workers know what is needed to
improve their jobs, and companies that do not tap into this
significant source of knowledge will truly be at a competitive
disadvantage.
Joseph M. Juran (1991)

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 Quality Management History

Knowledge-worker productivity is the biggest of the

21st-century management challenges. In the developed
countries, it is their first survival requirement. In no
other way can the developed countries hope to maintain
themselves, let alone to maintain their leadership and
their standards of living.
Peter F. Drucker (1999)

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 Quality Management History
Demings 14 Points
1. Create constancy of purpose for improvement
2. Adopt a new philosophy
3. Cease dependence on mass inspection
4. Do not award business on price alone
5. Work continually on the system of production and service
6. Institute Modern methods of training
7. Institute modern methods of supervision of workers
8. Drive out fear
9. Break down barriers between departments
10. Eliminate slogans, exhortations, and targets for the work force
11. Eliminate numerical quotas
12. Remove barriers preventing pride of workmanship
13. Institute a vigorous program of education and retraining
14. Take action to accomplish the transformation

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A Quality Management System Is

A belief in the employees ability to solve

problems

A belief that people doing the work are best able

to improve it

A belief that everyone is responsible for quality

 Quality Management History
Demings Concept of Profound Knowledge

Understanding (and appreciation) of Systems

- optimizing sub-systems sub-optimizes the total system
- the majority of defects come from systems, the responsibility of
management (e.g., machines not in good order, defective material)
Knowledge of Statistics (variation, capability, uncertainty in data, etc.)
- to identify where problems are, and point managers and workers
toward solutions
Knowledge of Psychology (Motivation)
- people are afraid of failing and not being recognized, so they fear
how data will be used against them
Theory of Knowledge
- understanding that management in any form is a prediction, and is
based on assumptions
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 Elements for Success

Management Support/Involvement
Mission Statement
Proper Planning
Customer and Bottom Line Focus
Measurement
Empowerment/Shared Leadership
Teamwork/Effective Meetings
Continuous Process Improvement
Dedicated Resources/Training
 Benchmarking
1. Identify those processes needing
improvement.
2. Identify a firm that is the world leader in
performing the process (Library & WWW).
3. Contact the managers of that company
and make a personal visit to interview
managers and workers.
4. Analyze data
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 Baldrige Award Criteria Framework

Organizational Profile:
Environment, Relationships, and Challenges

2 5
Strategic Human Resource
Planning Development
1 & Management 7
Leadership Business
Results
3 6
Customer and Process
Market Focus Management

Information, Analysis, and Knowledge Management

 Malcolm Baldrige National
Quality Award (2004)

1.0 Leadership (120 points)

2.0 Strategic Planning (85 points)
3.0 Customer and Market Focus (85 points)
4.0 Information and Analysis (90 points)
5.0 Human Resource Focus (85 Points)
6.0 Process Management (85 points)
7.0 Business Results (450 points)
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 Categories for the Baldrige
Award
Manufacturing companies or subsidiaries that:
produce and sell manufactured products or
manufacturing processes or
produce agricultural, mining, or construction products.
Service companies or subsidiaries that sell
service
Small businesses
Education Institutions
Health Care Organizations
Non-Profit (new)
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 Characteristics of a Baldrige
Award Winner
The companies formulated a vision of quality
and how they would achieve it.
Senior management was actively involved.
Companies carefully planned and organized
their quality effort to insure effective
initiation.
They vigorously controlled the overall process.
Studies have shown MBA Winners success.
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 ISO 9000
Series of standards agreed upon by the
International Organization for Standardization(ISO)
Adopted in 1987
More than 100 countries
A prerequisite for global competition?
ISO 9000 directs you to:
document what you do and then do as you
documented.
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 ISO 9000 Series
9001
Model for Quality Assurance in Design,
Production Installation, and Servicing.
9002
Model for Quality Assurance in Production and
Installation
9003
Model for Quality Assurance in Final Inspection
Test
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 Three Forms of Certification
1. First party: A firm audits itself against ISO
9000 standards.

2. Second party: A customer audits its

supplier.

3. Third party: A "qualified" national or

international standards or certifying agency
serves as auditor.
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 ISO 9000 versus
the Baldrige Award
Which should we pursue first?

What are the differences between the

two?

Do you have to be ISO 9000 certified

before going for the Baldrige Award?

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 ISO 9000 versus
the Baldrige Award
Baldrige

QS 9000

ISO 9000

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Irwin/McGraw-Hill Evans and Lindsay The Management and Control of Quality, Southwestern Books, p536.
 Costs of Quality: Categories

Appraisal costs

Prevention costs

Internal failure costs

External failure costs

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 The 1-10-100 Rule

10

100

Defects caught at their source cost the organization $1.

Defects caught outside of the source department but within the
organization cost $10.
Defects that reach the external customer cost $100!
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 Cost of Poor Quality Category
Examples
Failure Costs Internal Prevention Costs
Re-shipping Quality Administration
Unnecessary Travel Time Quality Planning
Re-picking/Picking Quality Systems Design
Unpacking/Storing Returns Calibration and Maintenance
Re-order Time Production/Inspection Equipment
Crediting Time Vendor Assessment
Quality Training

Failure Costs External Appraisal Costs

Loss of Sales Incoming Test and Inspection
Complaints In-Process Inspection
Returns Final Inspection
Warranty Claims Sampling Procedures
Quality Audits
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 COPQ Projections

$ Saved
External Failure Costs
$
Internal Failure Costs Total Cost Total Cost
Using a COPQ Without Using
System A COPQ
System
Appraisal Costs

Prevention Costs

Months

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 Process Flow Chart
Buffer:Material No,
Inspect
Received from
Material for Continue
Supplier
Defects Defects
found?

Yes

Can be used to find Return to

quality problems. Supplier for
Credit

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 Input-Output Analysis

Sub- Measures
Suppliers Inputs Outputs Customers
Processes

S I P O C
From Flowchart

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 Example SIPOC - Specifying
Equipment Selection and Installation
Procedures at Coca-Cola USA
Suppliers Inputs Process Outputs Customers Measures
Customers Technical Developing Equipment Burger King Number of
Information Installation Selection Guide Entities Using
Coca-Cola Cost McDonalds Guidelines
Fountain Technical Reduction Equipment Sales
Questions Manuals Prestige Installation
Programs
Coca-Cola Audit Ratings
Customer Developing Technology
Input Cost/ Benefit Fountain Survey of
Equipment
Selection Matrix Equipment Users
Policies and Suppliers Effectively
Installation Using
Procedures Guidelines Selection
Designing Installation Guidelines
Installation Time Standards
Policies and
Procedures Installation
Rating System
Installation
Design
Guidelines
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 Pareto Analysis

80% of the Frequency

problems
may be
attributed to
20% of the
causes.
Design Assy. Purch. Other
Instruct. Training

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 Run Chart
0.58
0.56
Diameter

0.54
0.52
0.5
0.48
0.46
0.44
1 2 3 4 5 6 7 8 9 10 11 12
Time (Hours)

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 Histogram
Frequency

Data Ranges

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 Scatter Diagram
12
10
Defects

8
6
4
2
0
0 10 20 30
Hours of Training

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 Checksheet (data collection)
Monday
Billing Errors

Wrong Account

Wrong Amount

A/R Errors

Wrong Account

Wrong Amount

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 Cause & Effect Diagram

Machine Man

Environment Effect

Method Material

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 Fishbone Analysis:
Existing Hiring Process Problems

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 Control Charts
1020
UCL
1010
1000
990
980
LCL

970
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

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 Customer Survey
Worst Best

Are We On Time? 5 4 3 2 1

Are We Courteous? 5 4 3 2 1

Does The Product 5 4 3 2 1

Work?
Is It Cost Effective? 5 4 3 2 1

Overall Rating? 5 4 3 2 1

General Comments:
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 Example Customer Survey
Results - Quantas Airways
Survey of Frequent Flier Needs Order of Priority:

1. No lost baggage 12. Assistance with connections

2. No damaged baggage 13. Being kept informed of delays
3. Clean toilets 14. Transport to cities
4. Comfortable seats 15. Accurate arrival info
5. Prompt baggage delivery 16. Well-organized boarding
6. Ample leg room 17. Quick/friendly airport check-in
7. Good quality meals 18. Self-service baggage trolleys
8. Prompt reservation service 19. On-time arrival
9. Friendly/efficient cabin crew 20. Provision of pillows/rugs
10. Clean and tidy cabin 21. Assistance with customs
11. Comfortable cabin temp 22. On-time departures

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 Continuous Improvement Process
Orlando Remanufacturing
And
Distribution Center

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 Remanufacturing Procedures
Disassembly and
Cleaning Reassembly

Remove Remove Inspect Soda Manifold Install Drain Pan Riser Onto Install and Connect Valve
Cup Rest Product Hoses, Tower Ice Chest Assembly Wiring Assembly
Splash Plate and Disassemble
Drain Pan
Valves Prepare Rear Tower Panel
Mounting Blocks on Woodgrain Units for
Flush Cooling Circuits Install Valve Mounting
Sabre Vinyl Install Tower Structure Onto
Inspect Fittings Blocks
Repair Dents Drain Pan Riser
Sand
Clean Clean Surface
Ice Chest Sanitize Cooling Circuits
Parts Install Valves
Tower Assembly Install New Beverage Tubing
and Rubatex
Flush Out
Apply Sabre Vinyl Install Sabre Valve Covers,
Nozzles and Decals

Polish Stainless Steel Install Clamps at Each

Surfaces That Will Be Visible Tubing End Install Lid
Remanufacturing Install Tubing to
Mounting Block Fittings
Put O rings on Fittings
Load Test Ice Bin by Leak Test Drain Pan Install Tube Protector on
Impact and Evaluate
Drain Inlets
Fittings
Evaluate Cold Plate Inspect Legs
Install Drain Pan, Drain
Clean Electrical Junction Box Fittings and Hose
Check for Frayed Wires Install Splash Plate
Hold for Write-off if Bin Drill and Tap New Mounting Tape Connections
Leaks or Circuits are Holes for Broken Hardware
Unusable
Send to QA
Test Junction Box Install Cup Rest
Requisition Needed Parts Continuity
Correct Secondary
Voltage
Install Valve Mounting Plate
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 Phase 1: Internal Kickbacks

To Be
Remanufac- Tear Down Remanu- Final
Reassembly
tured And Wash facture Clean-up
Equipment

Unit Not
OK
QA

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 Five Most Common Reasons
For Returns From QA

Missing/ Dirt/Rust Defective Leaks Poor

Wrong Part Part Insulation

January-May (61 units)

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 Reasons for Returns from QA
- Weighted Average

Leaks Dirt/Rust Stainless Missing/ Defective Poor

Steel Wrong Part Part Insulation

Weighted Avg. = % Occurring X Defect Cost (0-10, Based on Time to Repair)

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 Why Dirt?
Methods Materials Environment
Need to Rinse Parts Cleaning Dust/Humidity
off after Compounds
Sandblasting watered down Poor Lighting
Need Better Need Larger Space Limitations
Procedure for Wire Brushes
Determining What Measurement
People
to Remanufacture
Based on its Need More QA Manager Fixes
Condition Training Some Things
Without Informing
Machines More Attention the Technicians
to Detail Do it
Best tools for $$? Right the First
Time
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 Why Leaks?
Materials
Environment Machines
High Bad Tubing Bad Dispenser
Temperatures in O Rings Out of Design
Warehouse Spec Need Rims That
Poor Lighting O Rings Too Make it Easier to
Old (Dry) Install Tubing
Methods People Measurement
Softening Tubing Use Wrong No Testing for
with Water thats Clamps Leaks Prior to
Too Hot Dont QA
Crimp
Need to Check Properly Need to ID by
Units for All Mfr./Model
Possible Ways Forget to Which Units
They Could Leak Connect Leak the Most
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 PDCA Cycle (Deming Wheel)
1. Plan a change
4. Institutionalize
aimed at
the change or
improvement.
abandon or
do it again.
4. Act 1. Plan

3. Check 2. Do

3. Study the results; 2. Execute the

did it work? change.
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 What is Six Sigma?
A sweeping culture change effort to position a company for
greater customer satisfaction, profitability and
competitiveness (developed by Motorola in the late 1970s)
A goal of near perfection in meeting customer
requirements
A comprehensive and flexible system for achieving,
sustaining and maximizing business success; uniquely
driven by close understanding of customer needs,
disciplined use of facts, data, and statistical analysis, and
diligent attention to managing, improving and reinventing
business processes
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 Six Sigma DMAIC Process
Define: Define who your
Control customers are, and what
their requirements are for
Improve your products and services
Their expectations. Define
Define your team goals, project
boundaries, what you will
Analyze focus on and what you wont.
Define the process you are
Measure
striving to improve by
mapping the process.

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 Six Sigma DMAIC Process
Measure: Eliminate
Control guesswork and assumptions
about what customers need
Improve and expect and how well
processes are working. Collect
Define data from many sources to
determine speed in responding
Analyze to customer requests, defect
types and how frequently they
Measure
occur, client feedback on how
processes fit their needs, how
clients rate us over time, etc.
The data collection may
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 Six Sigma DMAIC Process
Analyze: Grounded in the
Control
context of the customer and
competitive environment,
Improve analyze is used to organize
data and look for process
Define problems and opportunities.
This step helps to identify gaps
Analyze between current and goal
Measure
performance, prioritize
opportunities to improve,
identify sources of variation and
root causes of problems in the
process.
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 Six Sigma DMAIC Process
Control

Improve: Generate both

Improve
obvious and creative
solutions to fix and prevent
Define
problems. Finding creative
solutions by correcting root
Analyze
causes requires innovation,
Measure technology and discipline.

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 Six Sigma DMAIC Process
Control: Insure that the
Control
process improvements, once
implemented, will hold the
Improve
gains rather than revert to
the same problems again.
Define Various control tools such as
statistical process control can
Analyze
be used. Other tools such as
Measure procedure documentation
helps institutionalize the
improvement.

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 Six Sigma DMADV Process
Design: Develop detailed
Validate
design for new process.
Determine and evaluate
Design
enabling elements.
Create control and testing
Define plan for new design. Use
tools such as simulation,
Analyze
benchmarking, DOE,
Measure Quality Function
Deployment (QFD),
FMECA analysis, and
cost/benefit analysis.

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 Six Sigma DMADV Process
Validate
Validate: Test detailed
Design
design with a pilot
implementation. If
successful, develop and
Define
execute a full-scale
Analyze
implementation. Tools in
this step include:
Measure planning tools,
flowcharts/other process
management techniques,
and work documentation.

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