Total Quality Management

Old Quality vs. New QualityDifference between old quality (Rolls Royce,

personal banker, ...) and new quality is that old was the work of craftsmen and the new is the work of a system (Toyota, Big Mac, Boeing Aircraft, Disney World, ...). The old is expensive, made for the few, using skilled hands, is beautiful and functionally based. The new reduces cost, made for the many by intelligent minds and should drive the economy and make business more competitive.

Toyota Commercial

Why care about qualityincrease productivity

expand market share

raise customer loyalty

enhance competitiveness of the firm

at a minimum, serve as a price of entry

Service Industries are particularly DifficultReasons:High volume of transactionImmediate consumptionDifficult to measure and controlMore labor intensiveHigh degree of customization requiredImage is a quality characteristicBehavior is a quality characteristic

Deming’s “Seven Deadly Diseases”

Lack of Constancy of purposeEmphasis on short term profitsEvaluation of performance, merit rating or

annual review of performanceMobility of managementRunning the company on visible figures aloneExcessive medical costs Excessive costs of warranty fueled by lawyers

that work on contingency fees

Interview with Deming

What is TQM??

The essence of Total Quality Management is a common sense dedication to

understanding what the customer wants and then using people and science to set up

systems to deliver products and services that delight the customer.

Greg HughesPresidentAT&T Transmission Systems

Basic Concepts of TQMCustomer Focus

Continuous Process Improvement - Kaizen

Employee Empowerment – Everyone is responsible for quality

Quality is free - focus on defect prevention rather than defect detection for it is always cheaper to do it right the first time

Benchmarking – Legally stealing other people’s ideas

Customer-Supplier Partnerships

Management by fact..by numbers..by data – Balanced scoreboard (financial, customer, process, learning)

Quality in U.S. vs. the Japanese

U.S. conforming to the requirements at the least cost

Japanese joint responsibility to make the end customer happy

8

“ I met the requirements”

9

OEM

Requireme

nt

Products

orTest

ResultsOEM

Supplier

Combative non collaborative relationship

10

“Creating the Best Vehicle/Systems with All the People All the Suppliers All the Time”

SOR

YOU meet therequirements! Let’s create

the best Vehicle andSystems together.

Partnership - Collaborative relationship

Strength of USA vs. Japan

11

Concept

Time

Strength of USA Mfg Strength of Japanese MfgKAIZEN

Good Innovative Ideas Good Implementation

Good Ideas, Good Implementation are the goals of everyone in the automotive industry

Seven Basic Quality Tools To improve Process Quality

Scatter Diagrams: Plot data on a chart – no attempt is made to classify the data or massage it

Pareto Charts: Organize data on a histogram based on frequency from most prevalent to least. Help identify major causes or occurrences (80:20 rule)

Check Sheets: Easy way to count frequency of occurrence by front line workers

Histograms: Categorize data is cells and plot (see if any patterns emerge)

Run Charts: Plot data as a function of timeCause and effects Charts: fishbone diagrams are

used to identify the root causes of a problemControl Charts: are statistical tools used to

determine if the variation in results is caused by common or special events

Summary - Concepts Quality all the time by everyone from an end

user prospective

Address issues up stream. Address product and process defects at the design stage

Fixing problems usually involves fixing the systemic process issues that caused the problem – Reoccurrence Prevention

Focus on Implementation

Focus on Change Points and Interfaces