INTRODUCTION

By the end of this topic, the student

should be able to:
 Define TQM.
 Identify and explain the 3 basic
principles of TQM.
 Explain how to establish TQM in an
organization.
 Identify major contributors to the TQM
understanding and their contributions.
What Is Total Quality Management?

a philosophy that involves

everyone in an organization in a
continual effort to improve
quality and achieve customer
satisfaction.
 THE TOTAL QUALITY FRAMEWORK

Customer Focus

QUALITY
PRINCIPLES
Participation Continuous Improvement
and Teamwork and Learning

PRACTICES INFRASTRUCTURE TOOLS

Activities that occur Customer Relationship Management Include a wide
within each element of variety of graphical
the infrastructure to Leadership and Strategic Planning and statistical
achieve high methods to plan
performance Human Resource Management work activities,
objectives. collect data, analyze
Process Management results, monitor
progress, and solve
Data and Information Management problems.
3 Fundamental Principles of TQM
 T
 Focus on customers
stakeholders
and

 Process focus supported by

continuous improvement and
learning.
 Participation and teamwork by
everyone in the organization
Stakeholder - a person or group with
a direct interest, involvement, or
investment in the organization.
 Stakeholders of an Organization
Shareholders Employees Consumers
• return on investment • higher pay • safe and reliable
• security for their • more benefits products at
money • job security reasonable prices

Suppliers
• Government
• taxes
ORGANIZATION • compliance
Financial with the law
institutions
•
Competitors
Community • fair play
Labor unions • “good corporate citizen”
• • maximum number of jobs
with minimum pollution
 Quality Management Principles
T1.2. Customer Focus
Leadership
3. Engagement of People
4. Process Approach
5. Continuous Improvement
6. Evidence-Based Decision Making
7. Relationship Management
Customer Focus
The primary focus of QM is to meet
customer requirements and to strive
to exceed customer expectations.
Customer Focus
Actions you can take:
• Know your customer and their
requirements
• Link the organization’s objectives to
customer needs and expectations
• Communicate customer requirements
throughout the organization
• Measure and monitor customer
satisfaction and take appropriate
actions
Customer Focus
Key benefits:
• Increased customer value and
satisfaction
• Increased revenue and market
share
Leadership
Leaders at all levels establish unity
of purpose and direction and create
conditions in which people are
engaged in achieving the
organization’s quality objectives.
Leadership
Actions you can take:
• Communicate the organization’s vision,
mission, strategy, policies and
processes throughout the organization
• Provide people with the required
resources, training and authority to act
with accountability
• Ensure that leaders at all levels are
positive examples to people in the
organization
Leadership
Key benefits:
• Increased effectiveness and
efficiency in meeting quality
objectives
Engagement of People
Competent, empowered and
engaged people are all levels
throughout the organization are
essential to enhance its capability
to create and deliver value.
Engagement of People
Actions you can take:
• Communicate with people to promote
understanding of the importance of
their individual contribution
• Promote collaboration throughout the
organization
• Conduct surveys to assess people’s
satisfaction, communicate the results,
and take appropriate actions
Engagement of People
Key benefits:
• Enhanced involvement of people
in the achievement of quality
objectives
• Enhanced people satisfaction
Process Approach
“Process is a set of interrelated or
interacting activities that use
inputs to deliver an intended
result.”

“System is a set of interrelated of

interacting elements.”
Process Approach
Consistent and predictable results
are achieved when activities are
understood and managed as
interrelated processes that function
as a coherent system.
Process Approach
Actions you can take:
• Define objectives of the system and
processes necessary to achieve them
• Establish authority, responsibility and
accountability to managing processes
• Determine and manage processes and
their interrelations as a system
Process Approach
Key benefits:
• Enhanced ability to focus effort
on key processes and
opportunities for improvement
• Consistent and predictable
outcomes through a system of
aligned processes
Continuous Improvement
Successful organizations have an
ongoing focus on improvement.
Continuous Improvement
Actions you can take:
• Promote establishment of improvement
objectives at all levels of the
organization
• Educate and train people at all levels
on how to apply basic tools and
methodologies to achieve improvement
objectives
• Recognize and acknowledge
improvement
Continuous Improvement
Key benefits:
• Improved process performance,
organizational capabilities and
customer satisfaction
• Enhanced focus on root-cause
investigation and determination,
followed by prevention and
corrective actions
Evidence-Based Decision Making
Decisions based on the analysis
and evaluation of data and
information are more likely to
produce desired results.
Evidence-Based Decision Making
Actions you can take:
• Determine, measure and monitor key
indicators to demonstrate the
organization’s performance
• Make all data needed available to the
relevant people
• Analyze and evaluate data and
information using suitable methods
• Ensure people are competent to
analyze and evaluate data as needed
Evidence-Based Decision Making
Key benefits:
• Improved decision-making
processes
• Improved assessment of process
performance and ability to
achieve objectives
Relationship Management
For sustained success, an
organization manages its
relationships with interested
parties, such as suppliers.
Relationship Management
Actions you can take:
• Determine relevant interested parties
(such as suppliers, partners,
customers, investors, employees, and
society as a whole) and their
relationship with the organization
• Pool and share information, expertise
and resources with relevant interested
parties
• Measure performance and provide
feedback to interested parties
Relationship Management
Key benefits:
• Common understanding of goals
and values among interested
parties
• A well-managed supply chain that
provides a stable flow of goods
and services
 The TQM Approach
1.
T2.
Find out what customers want.
Design a product or service that will meet
or exceed what customers want.
3. Design a production process that
facilitates doing the job right the first time.
4. Keep track of results, and use those to
guide improvement in the system.
5. Encourage participation and teamwork by
everyone in the organization.
6. Extend these concepts to suppliers and to
distribution.
Contributors to the TQM Philosophy
W. Edwards Deming
• 14 Points

• System

• Management

• Chain Reaction
 Contributors to the TQM Philosophy
W. Edwards Deming
 14 Points of Quality Management
 The cause of inefficiency and poor quality is the system
 Management’s responsibility is to correct the system
 Workers want to create and learn, but management
unintentionally often does things that rob them of their internal
motivation
 Management’s greatest challenge in achieving quality is in
motivating workers to contribute their collective efforts to
achieve a common goal
 The Deming chain reaction: Quality improvement reduces
cost, increases productivity, increases market share, and allows
firms to stay in business and provide jobs
Contributors to the TQM Philosophy
Joseph M. Juran
• 10 Steps

• Fitness for use

• Management

• Quality Trilogy
 Contributors to the TQM Philosophy
Joseph M. Juran
 10 steps for quality improvement
 Quality is fitness for use
 Largely 80% of quality defects are management-controllable
 Commitment of management is a key to continual
improvement
 The Quality Trilogy – quality planning, control, and
improvement – provides a direction for quality assurance in
organizations
Contributors to the TQM Philosophy
Philip Crosby
Quality
means DRiFT
zero
defects

Quality
Prevention reduces
Cost
 Contributors to the TQM Philosophy
Philip Crosby
 Quality is zero defects; argued against the idea that “there will
always be some level of defectives.”
 DRiFT – Do it right the first time
 Stressed prevention
 “The costs of poor quality are so great that rather than viewing
quality efforts as costs, organizations should view them as a
way to reduce costs, because the improvements generated by
quality efforts will more than pay for themselves.”
Contributors to the TQM Philosophy
Armand V. Feigenbaum
Customer Total
defines QC
Quality

Quality Cost of
at the Quality
Source
 Contributors to the TQM Philosophy
Armand V. Feigenbaum
 The customer defines quality
 Total quality control: a system integrating quality development,
maintenance, and improvement in an organization
 Quality control involves (1)setting quality standards,
(2)appraising performance relative to these standards, (3)taking
corrective action when these standards are not met, and
(4)planning for improvement in the standards
 Factors that can affect quality can be divided into two major
categories: technological and human. The human factor is
the more important one.
 It is important to control quality at the source
 Contributors to the TQM Philosophy
Armand V. Feigenbaum
 Operating quality costs can be divided into four categories:
prevention costs, appraisal costs, internal failure costs, and
external failure costs.
Prevention costs – costs of preventing defects from occurring; e.g.,
quality improvement programs, training, monitoring, data collection and
analysis, and design costs.
Appraisal costs – costs of activities designed to ensure quality or uncover
defects; e.g., inspection equipment, testing, labs, inspectors, and the
interruption of production to take samples.
Internal failure costs – costs related to defects discovered before
products or services are delivered to customers; e.g., rework costs, problem
solving, material and product losses, scrap, and downtime.
External failure costs – costs related to defects discovered after
delivering substandard products or services to customers; e.g., returned
goods, rework costs, warranty costs, loss of goodwill, liability claims, and
penalties.
Contributors to the TQM Philosophy
Kaoru Ishikawa
User-
Shared friendly
Vision Quality

Internal
Customer
Fishbone
Diagram

QCs
 Contributors to the TQM Philosophy
Kaoru Ishikawa
 Developed the cause-and-effect (fishbone or Ishikawa)
diagram for determining possible causes of a problem
 Implemented quality circles that involve workers in quality
improvement.
 First to call attention to the internal customer – the next
person in the process
 Strongly proposed the need for companies to have a shared
vision in order to unite everyone in the organization in a
common goal
 Widely recognized for his efforts to make quality control “user
friendly” for workers
Contributors to the TQM Philosophy
Genichi Taguchi
 Contributors to the TQM Philosophy
Genichi Taguchi
 Best known for the Taguchi loss function – a formula for
determining the cost of poor quality
 Quality Awards
The Deming Prize
 was established in 1951 to
recognize companies that
have achieved distinction
through the application of
companywide quality
control approaches,
supported by statistical
methods and continuous
improvement efforts.
 Quality Awards
The Malcolm Baldrige
National Quality Award
 recognizes U.S. companies that
excel in quality management
practices and business results that
achieve the highest levels of
customer satisfaction.
 The Baldrige Award criteria define
key practices in categories of
(1) leadership, (2) customer and
market focus, (3) strategic planning,
(4) human resource focus,
(5) information and analysis, and
(6) process management.
 Quality Awards
ISO 9000
 defines quality system
standards, based on the
premise that certain generic
characteristics of management
practices can be standardized,
and that a well-designed, well-
implemented, and carefully
managed quality system
provides confidence that the
outputs will meet customer
expectations and requirements.
 The ISO 9000 Series
ISO 9000
 helps companies determine which standard of ISO
9001, 9002, 9003, and 9004 applies.

ISO 9001
 outlines guidelines for companies that engage in
design, development, production, installations, and
servicing of products or service.
 The ISO 9000 Series
ISO 9002
 similar to ISO 9001, but excludes companies engaged
in design and development.

ISO 9003
 covers companies engaged in final inspection and
testing.
ISO 9004
 the guidelines for applying the elements of the Quality
Management System.
 ISO 14000
ISO 14000
 international standards for assessing a company’s
performance in terms of environmental responsibility.