BITS PilaniHyderabad Campus

Total Quality Management

G. Pavan KumarFaculty

Mechanical Engineering Department

BITS PilaniHyderabad Campus

Introduction

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Contents

Introduction

Define Quality and Quality perspectives

Need and Awareness

Old vs. TQM Approach

Gurus of Quality

History of quality management

Obstacles to TQM implementation

Benefits of TQM

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TQM Course Goals

To enable you to Appreciate the importance of quality and understand

its historical evolution. Understand the basic principles & practices of TQM.

The main elements / practices required for any company wanting to achieve excellence.

Apply quantitative and qualitative tools and techniques in appropriate ways to investigate and ultimately resolve product or service quality concerns; and

Evaluate the use of TQM initiatives, tools, and techniques in an organization

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Course Overview

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Introduction

TQM is both a philosophy and a set of guiding principles for continuously improving the organization

...is the application of quantitative methods and human resources to improve all the processes within an organization and exceed customer needs now and in the future.

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Introduction – contd.,

It is an enhancement to the traditional way of doing business

It is a proven technique which guarantee a survival in the

competitive world, if implemented properly

TQM stands for

– Total - Made up of the whole

– Quality - degree of excellence a product or service provides

– Management - Act, art or manner of planning, controlling,

directing,….

Therefore, TQM is the art of managing the whole to achieve

excellence. TQM relies on common sense.

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What is quality?

Some definitions that have gained wide acceptance in various organizations: “Quality is customer satisfaction,” “Quality is Fitness for Use.”

The American National Standards Institute (ANSI) and the American Society for Quality (ASQ) define quality as:

“The totality of features and characteristics of a product or service that bears on its ability to satisfy given needs.”

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Quality perspectives

Judgmental perspective “goodness of a product.” Shewhart’s transcendental definition of quality – “absolute

and universally recognizable, a mark of uncompromising standards and high achievement.”

Examples of products attributing to this image: Rolex watches, Lexus cars.

Product-based perspective “function of a specific, measurable variable and that

differences in quality reflect differences in quantity of some product attributes.”

Example: Sony Bravia and Sansui 21 inch color televisions.

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Quality perspectives – contd.,

User-based perspective “fitness for intended use.” Individuals have different needs and wants, and hence

different quality standards. Example – Hyundai Accent Vs Mercedez Benz or

BMW cars.Value-based perspective “quality product is the one that is as useful as

competing products and is sold at a lesser price.” Example – Indigo Vs Kingfisher.

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Quality perspectives – contd.,

Manufacturing-based perspective “the desirable outcome of a engineering and

manufacturing practice, or conformance to specification.”

Engineering specifications are the key! Example: Diameter of a shaft = 20 +/- 0.5mm

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A better definition of quality

Proposed by Garvin Garvin mentioned that quality can be defined

Performance – Primary product characteristics Features – Secondary product characteristics Conformance – Meeting specifications or standards Reliability – Consistency of performance over time Durability – Useful life Service – Resolution of problem and complaints Response – Human to human interaction Aesthetics – Exterior finish Reputation – Past performance

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Basic concepts of TQM

What are the Basic Concepts of TQM. Explain? A committed and involved management to provide

long term top-to-bottom organizational support An unwavering focus on the customer – both internal

and external Effective involvement and utilization of the entire

work force Continuous improvement of the business and

production process Treating suppliers as partners Establish performance measures for the process

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TQM Language: Some Terms

What do you mean by a customer? Anyone who is impacted by the product or process delivered by

an organization. External customer: The end user as well as intermediate

processors. Other external customers may not be purchasers but

may have some connection with the product. Internal customer: Other divisions of the company that receive

the processed product. What is a product? The output of the process carried out by the organization. It may

be goods (e.g. automobiles, missile), software (e.g. a computer

code, a report) or service (e.g. banking, insurance)

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TQM Language – contd.,

How is customer satisfaction achieved? Product features – Refers to quality of design.

– Examples in manufacturing industry: Performance,

Reliability, Durability, Ease of use, Esthetics etc.

– Examples in service industry: Accuracy, Timeliness,

Friendliness and courtesy, Knowledge of server etc. Freedom from deficiencies – Refers to quality of

conformance. Higher conformance means fewer complaints and

increased customer satisfaction.

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The Need for TQM

Why quality is becoming a cardinal priority for most organizations. Explain? Competition – Today’s market demand high quality

products at low cost. Having `high quality’ reputation is not enough! Internal cost of maintaining the reputation should be less.

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 have resulted in a need to reduce the internal cost of poor quality.

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Need – contd.,

Product complexity – As systems have become more complex, the reliability requirements for suppliers of components have become more stringent.

Higher levels of customer satisfaction – Higher customers expectations are getting spawned by increasing competition.

Relatively simpler approaches to quality viz. product inspection for quality control and incorporation of internal cost of poor quality into the selling price, might not work for today’s complex market environment.

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Awareness

An organization will not begin TQM until it is aware that quality of product/service has to be improved

Awareness comes– When organization starts losing market share– Managers begin to understand quality and productivity

go hand in hand– It is thrust upon by the customer– Management understand that it is a better way to do

business Automation alone cannot increase profit/growth, if the

quality of product is poor

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Awareness – contd.,

Quality and productivity are not mutually exclusive, rather they are related

Increase in quality level lead to increase in productivity

TQM cannot happen overnight. It takes a long time and at least 4 to 5 years is required to establish it in an organization

During those time, short term profits and results should not be focused rather a long term planning and constancy of purpose should be maintained.

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Old vs. TQM Approach

Quality Element Previous Approach TQM Approach

Definition Product-oriented Customer-oriented

Priorities 2nd to service and cost Equals of service and cost

Decisions Short-term Long-term

Emphasis Detection Prevention

Errors Operations System

Responsibility Quality control Everyone

Problem Solving Managers Teams

Procurement Price Life-cycle costs,partnership

Manager’s Role Plan, assign, control, and enforce

Delegate, coach, facilitate and mentor

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Gurus of Quality

Walter Shewhart• Father of Statistical Process Control (SPC)• Worked at Western Electric and Bell Laboratories Limited• Developed the control chart theory based on the concept of

special causes and common causes Deming• Spread SPC and quality to the leading CEO’s of Japan• Provided the foundation for Japan’s quality miracle• Developed the 14 points for quality improvement, which

formed the basis of ISO 9000, QS 9000 and other quality systems

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Gurus of Quality – contd.,

Juran• Worked at Western Electric and learnt about the

Shewhart’s techniques• Stressed the necessity of all management at all levels to be

committed to quality• Proposed the Quality Trilogy Feigenbaum• Noted that quality begins with identifying the customer

needs and ends with a product/service meeting their needs• Proposed the concept of Total Quality Control

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Gurus of Quality – contd.,

Ishikawa• Studied under Deming, Juran and Feigenbaum• Helped the Japanese to adopt the quality control concepts

that were developed by the US• Developed the cause and effect diagram• He proposed the concept of quality circle team Crosby• Quality is free, proposed 4 absolutes of quality management• Stressed on the importance of “doing it right first time” and

explained that it is less expensive than the cost of detecting and correcting mistakes.

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Gurus of Quality – contd.,

Taguchi• Developed the concept of loss function, which combined

the concept of cost, target and variation• Noted that quality is all about reducing the variation• Proposed a method for the same based on the concept of

design of experiments (DOE).

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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 Thomas Jefferson and F. W. Taylor (“scientific management” fame) emphasized on production efficiency and decomposed jobs into smaller work tasks. Holistic nature of manufacturing rejected!

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History – contd.,

Statistical approaches to quality control started at Western Electric with the separation of inspection division. Pioneers like Walter Shewhart, George Edwards, W. Edwards Deming and Joseph M. Juran were all employees of Western Electric.

After World War II, under General MacArthur's Japan rebuilding plan, Deming and Juran went to Japan.

Japanese were badly defeated in World War II. Their industrial and financial bases were in chaos.

Japan had no natural resource and limited source of food for their people.

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History – contd.,

The quality movement began in Japan in 1946 with the U.S. Occupation Force's mission to revive and restructure Japan's communications equipment industry.

Deming was invited by the Union of Japanese Scientists and Engineers to Japan in 1947.

In 1954, Joseph Juran of the USA raised the level of quality management from factory to the total organization in Japan.

Deming and Juran introduced SPC to Japanese industry. The difference between approaches to quality in USA and

Japan: Deming and Juran were able to convince the top managers the importance of quality.

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History – contd.,

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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History – contd.,

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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Obstacles to TQM implementation

What are the major obstacles to TQM.Explain? Lack of management commitment Any organization change programme requires management

time and resources and it should be provided by the top management

The purpose of the change should be communicated to every employees

Every in great pressure, the quality and customer satisfaction should be perceive

Improper planning All constituents (levels) should be involved in the planning 2 way communication of idea is required among everyone

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Obstacles – contd.,

Inability to change organization culture Changing the organization culture is very difficult Individual must change- but they are accustomed to one

particular way of performing and prefers that way only Management must understand the following

People change only when their own needs are met For change to be accepted, people should be moved

from a state of fear to trust Individuals cannot change easily and naturally, the

organization also change its culture easily Lack of effective communication and emphasis on short

term results also prevent cultural change

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Obstacles – contd.,

Paying inadequate attention to internal and external customers– Organization needs to understand the changing needs of

customers– Effective feedback mechanism is necessary

Inadequate use of empowerment and teams– Team needs to have proper training and a facilitator– Teams recommendations should be followed– Individuals should be empowered to make decisions

Failure to continually improve– Lack of continuous improvement of product/services

will even make the leader to be behind the competition

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Obstacles – contd.,

Lack of continuous training and education– Training and education is an ongoing process– Needs must be identified and plan must be made for

achieving that need– Senior management must conduct the training to

explain about the principles of TQM– Lack of training on group discussions and

communication, quality improvement skills, problems solving skills etc. affect implementation

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Obstacles – contd.,

Incompatible organization structure– Differences between departments and individuals can

create problems– Use of multi-functional team is required to resolve this

problem– Individuals who do not embrace the new philosophy

should be made to leave the organization

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Benefits of TQM

Improved profitability and market share Customer satisfaction Product quality

• Less waste and rework• Higher profits

Improved communication Employee involvement

• Training• Teamwork• Employee satisfaction

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Benefits of TQM – contd.,

Studies show that quality programs such as TQM can:

Boost company revenues by as much as 40%.

Decrease productivity costs by 20 to 50%.

Cut production time by as much as 70%.

Build strong customer loyalty.

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Summing Up

Introduction

Define Quality and Quality perspectives

Need and Awareness

Old vs. TQM Approach

Gurus of Quality

History of quality management

Obstacles to TQM implementation

Benefits of TQM