Answers to Questions TQM

Prepared by: THUN Kosal Page 1 of 11

The Preparation Question of TQM 2012

MBA Class (Promotion 13, Group 5)

3 Questions:

1. Why the business organizations need improvement? Explain.

Business organizations need to improve to meet the challenge of world competitiveness. Productivity

and quality improvement is most effective when it is done in a balanced manner to include

managerial, behavioral and technical initiatives. Organizations need to introduce a much more

data-driven orientation, facilitating both grassroots continuous improvement and top-down strategic

projects to correct bench-marked shortfalls. The most common improvement theme is taking the

variation and waste out of upstream systems in order to create complete customer satisfaction with

finished products and services.1

2. Explain the concept and principles of TQM?

Total quality management is a management system for a customer focused organization that

involves all employees in continual improvement of all aspects of the organization. TQM uses

strategy, data, and effective communication to integrate the quality principles into the culture and

activities of the organization.2

Total quality management (TQM) refers to management methods used to enhance quality and

productivity in organizations, particularly businesses. TQM is a comprehensive system approach

that works horizontally across an organization, involving all departments and employees and

extending backward and forward to include both suppliers and clients/customers.3

Principles of TQM:

Customer and stakeholder focus

Customer is principal judge of quality

Organizations must first understand customers’ needs and expectations in order to meet and

exceed them

Organizations must build relationships with customers

Customers include employees and society at large

Participation and teamwork

Employees know their jobs best and therefore, how to improve them

Management must develop the systems and procedures that foster participation and

teamwork

Empowerment better serves customers, and creates trust and motivation

Teamwork and partnerships must exist both horizontally and vertically

Process focus and continuous improvement

A process is a sequence of activities that is intended to achieve some result

1 http://findarticles.com/p/articles/mi_m1094/is_n4_v26/ai_11413074/

2 http://www.bexcellence.org/Total-quality-management.html

3 http://www.referenceforbusiness.com/encyclopedia/Thir-Val/Total-Quality-Management-TQM.html

Answers to Questions TQM

Prepared by: THUN Kosal Page 2 of 11

Enhancing value through new products and services

Reducing errors, defects, waste, and costs

Increasing productivity and effectiveness

Improving responsiveness and cycle time performance

3. Why TQM is needed especially business organization?

There are many advantages of Total Quality Management (TQM). Essentially, Total Quality

Management refers to the total quality in fulfilling the needs of the customers, the quality of the

products, and the quality of life (both in the workplace and also at home). Having these focuses can

benefit your business in several different ways. Here are some of the benefits to Total Quality

Management:4

i. Higher Quality Products: your company will be able to focus more on creating the highest

level of quality possible

ii. Better Reviews from Customers: customers and clients become better satisfied with the

results of your work

iii. Better production from your employees: more attention placed on meeting the needs of the

employees within the company

4. Describe the benefit of ISO 9001:2008 for business organization that receive it?

Benefits of ISO 9001:2008 are:5

o Meet customer requirements;

o Get more revenue and business from new customers;

o Improve company and product quality;

o Increase customer satisfaction with your products;

o Document, understand, and communicate your company processes;

o Develop a professional culture and better employee morale;

o Improve the consistency of your operations;

o Keep management and employees focused on quality;

o Improve efficiency, reduce waste and save money; and

o Achieve international quality recognition.

5. Why are systems thinking important to TQM?

Systems thinking are important to TQM because systems thinking contain subsystems that are linked

together as internal customers and suppliers. For example, consider the infrastructure elements of a

total quality system: customer relationship management, leadership and strategic planning, human

resources management, process management, and data and information management. Senior

leaders need to focus on strategic directions and on customers; strategies need to be linked to

human resource plans and key processes in order to effectively align resources; human resources

issues such as training and work system design must support the processes that manufacture

products or deliver services; and data and information management provides the means for

obtaining useful feedback to better understand the relationship between strategy and execution, and

provide a means for improvement.

6. How do service standards differ from manufacturing specifications? How they similar?

4 http://businessknowledgesource.com/manufacturing/how_tqm_can_benefit_your_business_023766.html#more

5 http://www.bizmanualz.com/blog/business-improvement-services/top-10-reasons-why-you-need-iso-9001-

certification.html

Answers to Questions TQM

Prepared by: THUN Kosal Page 3 of 11

Differences:

Customer needs and performance standards are more difficult to identify and measure

Services requires a higher degree of customization

Output is intangible

Services are produced and consumed simultaneously

Customers are often involved in actual process

Services are more labor-intensive than manufacturing

Services handle large numbers of transactions

Similarities:

Both must address timeliness requirements

7. Why TQM are needed to apply leadership?

Leadership – It is possibly the most important element in TQM. It appears everywhere in

organization. Leadership in TQM requires the manager to provide an inspiring vision, make strategic

directions that are understood by all and to instill values that guide subordinates. For TQM to be

successful in the business, the supervisor must be committed in leading his employees. A supervisor

must understand TQM, believe in it and then demonstrate their belief and commitment through their

daily practices of TQM. The supervisor makes sure that strategies, philosophies, values and goals are

transmitted down through out the organization to provide focus, clarity and direction. A key point is

that TQM has to be introduced and led by top management. Commitment and personal involvement

is required from top management in creating and deploying clear quality values and goals consistent

with the objectives of the company and in creating and deploying well defined systems, methods and

performance measures for achieving those goals.6

8. Let explain, why customer satisfaction and loyalty are important for TQM?

Customer satisfaction and loyalty are important for TQM because

A person who employs the service or buys the product is often termed as consumer or

customer. Two types of customers are identified by the customers: External and Internal. As

the customer's need, expectation and values keep on changing, there is no such picture of

customer's quality need. As according to ASQ, survey, important factors for purchase for the

customer are

Features

Performance

Price

Service

Reputation

Warranty

TQM requires customer feedback to be continuously monitored. It is required to identify

costumer dissatisfaction, needs, opportunities for enhancement and comparison with

substitute in the market. Studies suggest that the customer who did not complain is most

prone to switch to another product. Every individual complaint is needed to be entertained.

It is more powerful and efficient in company's point of view as with customer satisfaction. It

6 http://www.isixsigma.com/methodology/total-quality-management-tqm/eight-elements-tqm/

Answers to Questions TQM

Prepared by: THUN Kosal Page 4 of 11

is involved with the activities which basically are related to customer satisfaction in order to

increase the loyalty of the customers towards the company. 7

9. Why process management is important to business organization? Let explain base on TQM concept.

Translate customer requirements and internal capabilities into product and service design

requirements early in the process

Ensure that quality is built into products and services and use appropriate tools during

development

Manage product development process to enhance communication, reduce time, and ensure

quality

Define, document, and manage important production/delivery and support processes

Define performance requirements for suppliers and ensure that they are met

Control the quality and operational performance of key processes and use systematic

methods to identify variations, determine root causes, and make corrections

Continuously improve processes to achieve better quality, cycle time, and overall

operational performance

Innovate to achieve breakthrough performance using benchmarking and reengineering

10. Why should control HACCP? Why is its benefit for organization?

Organization should control HACCP because

Hazard analysis

Critical control points

Preventive measures with critical limits for each control point

Procedures to monitor the critical control points

Corrective actions when critical limits are not met

Verification procedures

Effective record keeping and documentation

HACCP benefits:

A company can gain a number of key business benefits if it adapts the HACCP approach:

it provides a more systematic approach to the control of identified hazards than can be

achieved by traditional inspection and quality control procedures

its overall purpose is to enhance management confidence in the safety and effectiveness of

the whole process

it can identify areas of concern where failure has not yet been experienced and is therefore

particularly useful for new operations

it enables meaningful process control standards to be set and as such is a vital building block

of a quality system, such as ISO 9000, that ensures those process controls are adequately

executed and documented

it is a useful training tool, giving in depth details of processes, and it reduces loss of

technical knowledge following organizational changes

it saves money by focusing technical resource into critical areas, reducing the requirement

for end product testing and reducing product losses.8

_________________________

7 http://EzineArticles.com/4472505

8 http://www.just-food.com/analysis/an-it-approach-to-maximizing-the-benefits-of-haccp_id93382.aspx

Solution to exercises TQM

Prepared by: THUN Kosal Page 5 of 11

Attribute chart:

p and np chart

1) Calculate p and np chart base on data in the table below. Results of 16 samples of 100 Microchips

each taken by workers at INTCO to monitor their process.

Sample Nº 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Defect Nº 10 12 11 9 11 13 8 8 4 13 6 9 8 11 7 12

Solution

**Formulation of p -chart

(Center line) Total Defect

pSample group sample size

(Upper Control limit) 1

3p

p pUCL p

n

(Lower Control limit) 1

3p

p pLCL p

n

(if 0LCL , take 0LCL )

152 152

0.09516 100 1600

p

.

0.095 1 0.095

0.095 3 0.1830100

pUCL

.

0.095 1 0.0950.095 3 0.0070

100pLCL

.

Sample Nº 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Defect Nº 10 12 11 9 11 13 8 8 4 13 6 9 8 11 7 12

% Defect 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0 0.1 0.1 0.1 0.1 0.1 0.1 0.1

p -Chart

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

0.18

0.2

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17k (sample group)

Defect

Center line

UCL

LCL

Solution to exercises TQM

Prepared by: THUN Kosal Page 6 of 11

**Formulation of np -chart:

(Center line) ( )

Total Defectn p

Sample group subgroup

(Upper control limit) 3 1n p

UCL n p n p p

(Lower control limit) 3 1n p

LCL n p n p p

152

9.5 0.095 100 0.09516

n p or n

9.5 3 9.5 1 0.095 18.2964n p

UCL

9.5 3 9.5 1 0.095 0.7036n p

LCL

2) c and u chart

a. Calculate c chart base on data in the table below. Number of defect in 20 Rolls of Coate

paper.

Roll Nº 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Defect Nº 5 6 3 5 3 6 6 7 5 5 4 3 5 4 9 11 3 7 5 5

Solution

**Formulation of c -chart:

(Center line) Total Defect inall roll

cTotal roll inspect

(Upper Control limit) 3cUCL c c

(Lower Control limit) 3cLCL c c

107

5.3520

c .

5.35 3 5.35 12.289cUCL .

0

5

10

15

20

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

UCL

Center line

LCL

Solution to exercises TQM

Prepared by: THUN Kosal Page 7 of 11

5.35 3 5.35 1.589 0cLCL .

b. Calculate u chart. Area and Nº of blemishes in 20 Counter top.

Counter

top Nº1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Area Nº 18 19 17 37 47 23 28 26 27 38 25 24 29 28 30 29 38 40 25 26

Nº of

blemishes4 10 1 9 14 3 9 12 3 10 4 8 8 14 8 13 8 12 6 8

Solution

**Formulation of u -chart:

(Center line) Total Defect observer

uTotal areainspection

(Upper Control Limit) 3iu

i

uUCL u

a

(Lower Control Limit) 3iu

i

uUCL u

a ( 1,2,3,...i )

164

0.2857574

u

1

0.28570.2857 3 0.6637

18uUCL ,

1

0.28570.2857 3 0.0923

18uLCL

2

0.28570.2857 3 0.6536

19uUCL ,

2

0.28570.2857 3 0.0822

19uLCL

3

0.28570.2857 3 0.6746

17uUCL ,

3

0.28570.2857 3 0.1032

17uLCL

4

0.28570.2857 3 0.5493

37uUCL ,

4

0.28570.2857 3 0.0221

37uLCL

5

0.28570.2857 3 0.5196

47uUCL ,

5

0.28570.2857 3 0.0518

47uLCL

6

0.28570.2857 3 0.6201

23uUCL ,

6

0.28570.2857 3 0.0487

23uLCL

7

0.28570.2857 3 0.5888

28uUCL ,

7

0.28570.2857 3 0.0173

28uLCL

0

5

10

15

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

UCL

CL

LCL

Solution to exercises TQM

Prepared by: THUN Kosal Page 8 of 11

8

0.28570.2857 3 0.6002

26uUCL ,

8

0.28570.2857 3 0.0288

26uLCL

9

0.28570.2857 3 0.5943

27uUCL ,

9

0.28570.2857 3 0.0229

27uLCL

10

0.28570.2857 3 0.5458

38uUCL ,

10

0.28570.2857 3 0.0256

38uLCL

11

0.28570.2857 3 0.6064

25uUCL ,

11

0.28570.2857 3 0.0350

25uLCL

12

0.28570.2857 3 0.6130

24uUCL ,

12

0.28570.2857 3 0.0416

24uLCL

13

0.28570.2857 3 0.5835

29uUCL ,

13

0.28570.2857 3 0.0121

29uLCL

14

0.28570.2857 3 0.5888

28uUCL ,

14

0.28570.2857 3 0.0173

28uLCL

15

0.28570.2857 3 0.5785

30uUCL ,

15

0.28570.2857 3 0.0071

30uLCL

16

0.28570.2857 3 0.5835

29uUCL ,

16

0.28570.2857 3 0.0121

29uLCL

17

0.28570.2857 3 0.5458

38uUCL ,

17

0.28570.2857 3 0.0256

38uLCL

18

0.28570.2857 3 0.5393

40uUCL ,

18

0.28570.2857 3 0.0322

40uLCL

19

0.28570.2857 3 0.6064

25uUCL ,

19

0.28570.2857 3 0.0350

25uLCL

20

0.28570.2857 3 0.6002

26uUCL ,

20

0.28570.2857 3 0.0288

26uLCL

Variable chart:

3) X- and R-chart

Calculate X-chart and R-chart: 14 consecutive weekly Accounts Receivable Balances for Marnec

Ltd.

0.0000.0500.1000.1500.2000.2500.3000.3500.4000.4500.5000.5500.6000.6500.7000.750

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

Blemishesper unitUCL

LCL

Solution to exercises TQM

Prepared by: THUN Kosal Page 9 of 11

Weeks 1 2 3 4 5 6 7 8 9 10 11 12 13 14

ARB 47.0 41.3 64.3 83.3 48.0 87.8 65.3 40.8 55.5 50.8 47.8 66.3 39.0 31.5

Solution

**Formulation of x -chart and R -chart:

1 2 3 ... nx x x xx

n

2 3 4 ...

1

rR R R RR

r

2.66xUCL x R

2.66xLCL x R

**Formulation of R-chart:

3.267RUCL R

0RLCL

47 41.3 64.3 83.3 48 87.8 65.3 40.8 55.5 50.8 47.8 66.3 39 31.5 768.754.91

14 14x

2 47 41.3 5.7R , 3 41.3 64.3 23R , 4 64.3 83.3 19R ,

5 83.3 48 35.3R , 6 48 87.8 39.8R , 7 87.8 65.3 22.5R ,

8 65.3 40.8 24.5R , 9 40.8 55.5 14.7R , 10 55.5 50.8 4.7R ,

11 50.8 47.8 3R , 12 47.8 66.3 18.5R , 13 66.3 39 27.3R ,

14 39. 31.5 7.5R

5.7 23 19 35.3 39.8 22.5 24.5 14.7 4.7 3 18.5 27.3 7.518.8846

13R

54.91 2.66 18.8846 105.1402xUCL

54.91 2.66 18.8846 4.6741xLCL

3.267 18.8846 61.6960RUCL

0RLCL

4) Calculate x -chart and R-chart:

Tensile strength for 12 samples of plastic card Produced by PLASTEX:

Solution to exercises TQM

Prepared by: THUN Kosal Page 10 of 11

Sample Nº

1 75 78 85 81

2 83 84 76 80

3 81 82 79 74

4 77 81 89 79

5 79 76 82 78

6 83 77 85 85

7 87 79 83 75

8 80 85 76 76

9 86 79 82 80

10 74 82 80 84

11 80 74 75 81

12 76 81 79 78

Sample Value (Tensile strength)

Solution

** Formulation of x -chart and R -chart:

1 2 3 ... nx x x xx

n

1 2 3 ... rR R R RR

r

x -chart: 2xUCL x A R

2xLCL x A R (Note: 2 3 4, ,A D D are shown in table)

R-chart: 4RUCL D R

3RLCL D R

Sample Nº R

1 75 78 85 81 79.75 10

2 83 84 76 80 80.75 8

3 81 82 79 74 79.00 8

4 77 81 89 79 81.50 12

5 79 76 82 78 78.75 6

6 83 77 85 85 82.50 8

7 87 79 83 75 81.00 12

8 80 85 76 76 79.25 9

9 86 79 82 80 81.75 7

10 74 82 80 84 80.00 10

11 80 74 75 81 77.50 7

12 76 81 79 78 78.50 5

Total 960.25 102

Sample Value (Tensile strength)

x1x 2x 3x 4x

1

75 78 85 8179.75

4x

, 2

83 84 76 8080.75

4x

Solution to exercises TQM

Prepared by: THUN Kosal Page 11 of 11

3

81 82 79 7479

4x

,

4

77 81 89 7981.50

4x

5

79 76 82 7878.75

4x

,

6

87 77 85 8582.50

4x

7

87 79 83 7581.00

4x

,

8

80 85 76 7679.25

4x

9

86 79 82 8081.75

4x

,

10

74 82 80 8480.00

4x

11

80 74 75 8177.50

4x

,

12

76 81 79 7878.50

4x

79.75 80.75 79 81.5 78.75 82.5 81 79.25 81.75 80 77.5 78.5 960.2580.0208

12 12x

max minR x x

1 85 75 10R , 2 84 76 8R , 3 82 74 8R , 4 89 77 12R ,

5 82 76 6R , 6 85 77 8R , 7 87 75 12R , 8 85 76 9R ,

9 86 79 7R , 10 84 74 10R , 11 81 74 7R , 12 81 76 5R

10 8 8 12 6 8 12 9 7 10 7 5 1028.5

12 12R

80.0208 0.729 8.5 86.2173x

UCL ( 2 0.729A , See the table with 4sample size )

80.0208 0.729 8.5 73.8243x

LCL

2.282 8.5 23.97RUCL ( 4 2.282D , See the table with 4sample size )

0 8.5 0RLCL ( 3 0D , See the table with 4sample size )

4

Table of Control Chart Constants

X-bar Chart for sigma R Chart Constants S Chart Constants

Constants estimate

Sample

Size = m A2 A3 d2 D3 D4 B3 B4

2 1.880 2.659 1.128 0 3.267 0 3.267

3 1.023 1.954 1.693 0 2.574 0 2.568

4 0.729 1.628 2.059 0 2.282 0 2.266

5 0.577 1.427 2.326 0 2.114 0 2.089

6 0.483 1.287 2.534 0 2.004 0.030 1.970

7 0.419 1.182 2.704 0.076 1.924 0.118 1.882

8 0.373 1.099 2.847 0.136 1.864 0.185 1.815

9 0.337 1.032 2.970 0.184 1.816 0.239 1.761

10 0.308 0.975 3.078 0.223 1.777 0.284 1.716

11 0.285 0.927 3.173 0.256 1.744 0.321 1.679

12 0.266 0.886 3.258 0.283 1.717 0.354 1.646

13 0.249 0.850 3.336 0.307 1.693 0.382 1.618

14 0.235 0.817 3.407 0.328 1.672 0.406 1.594

15 0.223 0.789 3.472 0.347 1.653 0.428 1.572

16 0.212 0.763 3.532 0.363 1.637 0.448 1.552

17 0.203 0.739 3.588 0.378 1.622 0.466 1.534

18 0.194 0.718 3.640 0.391 1.608 0.482 1.518

19 0.187 0.698 3.689 0.403 1.597 0.497 1.503

20 0.180 0.680 3.735 0.415 1.585 0.510 1.490

21 0.173 0.663 3.778 0.425 1.575 0.523 1.477

22 0.167 0.647 3.819 0.434 1.566 0.534 1.466

23 0.162 0.633 3.858 0.443 1.557 0.545 1.455

24 0.157 0.619 3.895 0.451 1.548 0.555 1.445

25 0.153 0.606 3.931 0.459 1.541 0.565 1.435

Control chart constants for X-bar, R, S, Individuals (called "X" or "I" charts), and MR (Moving Range) Charts.

NOTES: To construct the "X" and "MR" charts (these are companions) we compute the Moving Ranges as:

R2 = range of 1st and 2nd observations, R3 = range of 2nd and 3rd observations, R4 = range of 3rd and 4th

observations, etc. with the "average" moving range or "MR-bar" being the average of these ranges with the "sample size" for each of these ranges being n = 2 since each is based on consecutive observations ... this

should provide an estimated standard deviation (needed for the "I" chart) of

� = (MR-bar)/d2 where the value of d2 is based on, as just stated, m = 2.

Similarly, the UCL and LCL for the MR chart will be: UCL = D4(MR-bar) and LCL = D3(MR-bar)

but, since D3 = 0 when n = 0 (or, more accurately, is "not applicable") there will be no LCL for the MR chart, just a UCL.