TQM

Total Quality Management
Steps Towards Continuous Improvement
E.H. Aghezzaf- Vakgroep Technische Bedrijfsvoering (TW18V)
Total Quality Management

Total Quality Management is a comprehensive managerial philosophy and a collection of approaches and tools for its implementation. The term Total Quality Management conveys de company-wide effort through full involvement of the entire workforce and focus on continuous improvement that companies use to achieve customer satisfaction .
E.H. Aghezzaf- Vakgroep Technische Bedrijfsvoering (TW18V) 2
Goals of TQM
Satisfy the requirements and needs of customers. Prevent poor quality rather than correcting problems after fact. Develop an attitude of continuous improvement in operations. Understand the value of measuring performance in identifying opportunities and maintaining improvements. Identify and eliminate chronic sources of inefficiencies and costs.
Foundations of TQM, the Principles

Customer Focus:
Involves collection and analysis of customer needs, and once understood and accepted these must be met.
Continuous Improvement:
Involves work on the process to reduce the variability of output and improve the reliability of the process.
Total Involvement (Participation & Teamwork):

Begins with leadership of senior management, then employees empowerment, and includes suppliers.
Foundations of TQM, Infrastructures, Practices, and Tools

An integrated organizational infrastructure, A set of management practices, A wide variety of tools and techniques:
Leadership, Strategic Planning, Data and Information Management, Process Management, Supplier Management, Human Resources Management,
Towards an Integrated Production System

Traditiona l Method
ProductManagement
Suppliers
Inspect
W aste inp ut
Modern Method
ProcessManagement
Suppliers
input
Customers
Inspect
Waste
Customers Work Process

input
W ork Process
output
Information
People Processes
Information
Quality assured through inspection:

Inspect incoming materials, Inspect outgoing products, Quality is the responsibility of QA department,
Quality designed through prevention:

Integrated customer-supplier chain, Improve quality through the system, Quality is responsibility of everyone,
Measurement Dimensions
If this is your focus... Customer then this who you need to please Customers

and these are key Measures

Customer satisfaction, Output characteristics defined by customers, Financial indicators,
Cost, sales, and profits Cost of quality
Bosses Shareholder Owners Financial Analysts
Goals and objectives defined by management , Employee satisfaction, Factors contributing to job satisfaction, Regulatory compliance, Factors impacting on society,
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Employee
Employees Government agents
Community
Social services
The TQM System

Continuous TQM Improvement
Customer Focus
Process Improvement
Total Involvement
Leadership Educatio n and Trainin g Reward s and recognitio n Measurement

Supportive Structures Communication
The TQM System

Customer Focus
Process Improvement
Total Involvement

Customer Focus -Leading Practices Define, identify, and segment key customer groups and markets, Understand customer needs and expectations (the voice of the customer), Understand linkages between the voice of the customer and design, production, and delivery, Build relationships through commitments, provide accessibility and information, set service standards, and follow-up on transactions, Develop and implement effective complaint management processes, Measure customer satisfaction for improvement,
Identifying Customers
Key customer groups: Organization level:
Consumers, External customers, Employees, Society
Process level:
Internal customer units or groups,
Performer level:
Individual internal customers,
Understanding Customer Expectations

Guidelines:
What are the product and service characteristics do customers want? What level of performance is required to satisfy customers expectations? What is the relative importance of these characteristics? How satisfied are customers with performance at the current level?

Delight!
Level 3
Latent
Value-added characteristics and features that customer did not expect Level 2
Explicit
Options and trade-offs available for selection by customers
Specifications and Requirements
Level 1
Implicit Minimum
performance levels always assumed present
Base Expectations
Implicit, Explicit, and Latent Customer Requirements

Ref- TQM, A.R. Tenner & I.J.DeToro
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Customer needs and expectations (Expected quality) Identification of customer needs Translation into product/service specifications (Design quality) Output (Actual quality) Customer perceptions (Perceived quality)
measurement and feedback

PERCEIVED QUALITY = ACTUAL - EXPECTED
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Linking Voice of Customer to Design, Production, and Delivery

Interrelationships Technical requirements Customer requirement priorities
Voice of the customer
Relationship matrix
Technical requirement priorities

Quality Function Deployment HOQ
Competitive evaluation
15
Linking Voice of Customer to Design, Production, and Delivery

The Th Quality Qualit Function Functio Deployment Process
Technical requirements Component characteristics Process operations Quality plan

Build Customer Relationships: Gathering Information

Comment cards and formal surveys: These approaches concentrate on measuring customer satisfaction. Focus groups: A panel of individuals who answer questions about a companys products and services. Direct customer contacts: Hearing complaints directly by top-executives is an eye-opening experience. Field intelligence: Conversing with customers and observing their behavior helps in gaining useful information. Study complaints: Helps in understanding de gaps between expectations and performance
Customer Relationships Management

Accessibility and commitments, Selecting and developing customer contact employees through empowerment and training, Customer focused service based on relevant customer contact requirements, Effective complaint management, Strategic partnerships and alliances,
Effective Complaint Management Processes

High Level 3
Personal interviews, Focus Groups Designed Suveys Benchmarking
Full Understanding
Maximum Level of Undestanding

Service Desk Hot Line Unstructured Surveys
Level 2
Networks Sales Data Analysis Customer Representatives
Level 1
Unsolicited Complaints
Low
Reactive
Proactive
Approach
Measuring Customer Satisfaction

Discover customer perceptions of companys performance through identification of appropriate quality dimensions and measurement schemes, Compare companys performance relative to leading competitors, Measure potential and former customers and identify areas for improvement, Track trends to determine if changes result in improvements,
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Product and service quality dimensions
Access Communication Competence Courtesy
Word of Mouth Personal Needs Past Experience
Expected Performance Quality Performance Gap
External Communication to Customers
Perceived Product/Service Quality
Credibility Reliability Responsiveness
Perceived Performance
21

Word-of-Mouth communications Personal Needs Past Experience Expected Performance
Customer
Gap 5
Perceived Performance External Communication to Customers
Gap 1
Delivery Performance
Gap 3
Gap 4
Product/Service Quality Specifications
Provider
Gap 2
Management Perceptions of Customer Expectations
The TQM System

Customer Focus
Process Improvement
Total Involvement

Scope of Process Management

Process Management: involves planning and administering the activities design, control, and improvement necessary to achieve a high level of performance, There are four types of key processes:
Design processes, Production/delivery processes, Support processes, Supplier processes,
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Process Management -Leading Practices Practice 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,
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Process Management -Leading Practices Practice 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,
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Process Improvement Steps

Defining key processes: Identify the processes that have the greatest impact on customer-driven performance standards . Planning: Establish a structured and disciplined approach to define and document the major components in the process and to understand their interrelationships. Control: Assure effectiveness so that the output is predictable and consistent with the customers expectations.
Process Improvement Steps

Measurement: Map performance attributes to customers requirements and establish criteria for accuracy, precision, and frequency of data acquisition. Improvement: Increase effectiveness of the process by permanently embedding identified improvements. Optimization: Increase efficiency and productivity of the key processes by optimizing the resources.
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Identifying Key Processes

Finance & Accounting Business Planning Management Information Systems
Developing & Understanding Markets Distributing & Delivering Installation & Services (Maintenance + Repair )
Marketing & Sales Producing
Products & Services Developing & Designing (R&D - Engineering)

Attracting Developing and Retaining People
Legal Services
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Planning and Documenting a Process - Flow DiagramsService visible to customer Repair authorized Service not visible to customer Parts available
Customer drops off car Mechanic makes diagnosis* Discuss needed work with customer* Check parts availability
Perform work
Parts not available

Inspect/ test and repair
Repair not authorized
Order parts
Corrective work necessary

Customer departs with car Collect payment Notify customer
Repair complete
Perform corrected work
* = Points critical to the success of the service
= Points at which failure is most often experienced
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Planning and Documenting a Process -Process ChartsProcess : Subject: Beginning : Ending: Emergency room admission Ankle injury patient Enter emergency room Leave hospital
Insert Step Append Step Remove Step
Step no. Time (min) Distance (ft )
Summary
Activity Operation Transport Inspect Delay Store
Number of steps 5 9 2 3
Time (min) 23 11 8 8
Distance (ft) 815
Step description X X X X X X X X X X X X X X X X X X X Enter emergency room, approach patient window, Sit down and fill out patient history, Nurse escorts patient to ER triage room, Nurse inspects injury, Return to waiting room, Wait for available bed, Go to ER bed, Wait for doctor, Doctor inspects injury and questions patient, Nurse takes patient to radiology, Technician x-rays patient, Return to bed in ER, Wait for doctor to return, Doctor provides diagnosis and advice, Return to emergency entrance area, Check out, Walk to pharmacy, Pick up prescription, Leave the building,
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
0.50 10.0 0.75 3.00 0.75 1.00 1.00 4.00 5.00 2.00 3.00 2.00 3.00 2.00 1.00 4.00 2.00 4.00 1.00
15 40 40 60 200 200 60 180 20
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Evaluating a Process -Diagnosis Are steps arranged in a logical sequence? Do all steps add value? Can some be eliminated or added? Can some be combined? Should some be reordered? Are capacities in balance? What skills, equipment, and tools are required at each step? At which points might errors occur and how can they be corrected? At which points should quality be measured? What procedures should employees follow where customer interaction occurs?
Controlling a Process
Process control consists in continually evaluating performance and taking corrective action when necessary, Components of control systems:
Standards and goals, Means of measuring accomplishments, Comparison of the results with the standard as a basis for corrective action,
A well-controlled system is predictable,

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Generic Quality Control System

Inputs (Materials) Processes Output (Products)
Correctives Actions
Inspection & Measurement
Correctives Actions
Comparison with Standards
Materials-related
Yes
Process-related
Acceptable Quality
Acceptable Quality No
Yes
Acceptable Quality No
Yes
No
Identify Causes
What was supposed to happen? What actually happened? Why is there a difference? What can we learn?
Process Improvement
Productivity improvement, Traditional Industrial Work simplification, Engineering Planned methods change, Kaizen, Stretch goals, Benchmarking, Reengineering,
New approaches from the total quality movement
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Process Improvement
Input Supplier Output Input M anagem ent developm ent & Output Input C ustom er Outpu t
Test, Evaluate & Implemen t Solutions
Identif y Qualit y Problems Categoriz e & Se t priorities
Remov e the Quality Proble m Causes
Select a Quality Problem
Develop Corrective Actions , Solutions & Ne w Objectives
Analyze the Quality Proble m Causes Collec t Relevant e Dat a & Diagnos e for Causes
Confirme the Quality Proble m Causes
36
The Quality Circle Process

Organization 8-10 members Same area Moderator Presentation Implementation monitoring Training Group processes Data collection Problem analysis
Solution Problem results Problem analysis Cause & effect Data collection & analysis
Problem ID List alternatives Brainstorming

Consensus
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Tools for Process Improvement

Headliner Defects Defect type A. Tears in fabric B. Discolored fabric C. Broken fiber board D. Ragged edges Total Tally //// /// //// //// //// //// //// //// //// / //// // Total 4 3 36 7 50
Number of defects 40 30 20 10 0 Defective Parts 50 Poor Design 100 80 60 40 20 0
Checklists
20
15 10 5 0
D A B
Defect type 1 2 6 13 10 16 19 17 12 16 20 17 13 5 6 2 1
Histogram
Pareto Chart
38
Cumulative percentage
Tools for Process Improvement

Scatter Diagram
Characteristics
20
values
15 Number of defects
10
Parameter values
05
00 First Second Shift Third
Bar Chart
Control Charts
Tools for Improving Quality

Measurement Human Machines Faulty testing equipment Incorrect specifications Improper methods Poor supervision Lack of concentration Inadequate training Out of adjustment Tooling problems Old or Worn
Quality Problem Inaccurate temperature control Dust and Dirt Defective from vendor Not to specifications Poor process design Ineffective quality management Deficiencies in product design
Materialhandling problems
Environment
Materials
Process
Cause-and-Effect Analysis E.H. Aghezzaf- Vakgroep Technische Bedrijfsvoering (TW18V) 40
Performance Measurement
Process
levels
Work
Performance
Parameters
Operation s tha t Contro l Product s or Services Produced and delivered
Output
Requirements
Features, Values and Characteristics Desire d by Cusm oters
Capability
Features, Values and Characteristics Delivered by Process
Outcome
Customer Satisfaction
Degre e to whic h Product s or Services are Perceived to Meet Expectations
Suppliers
Wor k Groups
C ustomers
41
Process Measurement
Efficiency Efficienc Measures Process Cycle Time, Resources used per unit of output, Effectiveness Effectivenes Measures Product Appearance, Performance, Reliability, Timeliness, Usability, Serviceability, Durability, Cost, Responsiveness, Dependability, Wait and delay time per unit of output, Accuracy, Adaptability, Flexibility Flexibilit Measures Degree of empowerment,
Percentage of events in which customers expectations are exceeded, Degree of difficulty to respond to special requests, Degree of authority people have to continuously improve the process, Amount of time it takes to adjust the process to handle new requirements, Number of pre-planned process scenarios,
Value Added cost per unit of output, Ratio of value added to nonvalue added time, Cost of poor quality,
42
Breakthrough Improvement
Occasional change resulting from innovative and creative thinking, Benchmarking: The search of industry best practices that lead to superior performance,
Competitive benchmarking, Process benchmarking, Strategic benchmarking,
Reengineering: Radical redesign of processes,

Breakthrough Improvement
Expected Impact Breakthrough Reengineering Occasional
44
Increamental
Ongoing
Continuous Improvement
Periodic Application Frequency

Benchmarking
The TQM System

Customer Focus
Process Improvement
Total Involvement

Total Involvement
Human Resources,
Leadership, Empowerment, Employee Involvement, Teamwork and work systems,
Suppliers Quality,
Leadership
The ability to positively influence people and systems to have a meaningful impact and achieve results, Leadership System:
Refers to how decisions are made, communicated, and carried out at all levels; mechanisms for leadership development, selfexamination, and improvement, Effectiveness of leadership system depends in part on its organizational structure,
Leadership
Leading Practices
Create a customer-focused strategic vision and clear quality values, Create and sustain leadership system and environment for empowerment, innovation, and organizational learning, Set high expectations and demonstrate personal commitment and involvement in quality, Integrate quality values into daily leadership and management and communicate extensively, Integrate public responsibilities and community support into business practices,
48
Leadership Theories
Trait approach, Behavioral approach, Contingency approach, Role approach, Emerging theories:
Attributional theory, Transactional theory,
Managing
Plan Organize Direct Coordinate Control Getting Results
Leading
Vision Align Empower coach care Improving Systems
Transformational leadership theory, Substitutes for leadership theory, Emotional intelligence theory,
Leadership
Vision
What we will look like in sucessful future state
Implement (Action)
Commitment
Allocate resources consistent with leadership framework
Style
Role model- how we will behave
Objectives Specific Intent

What is to be acheived in scheduled period of time
Methodology How objectives will be acheived through strategy and plans Politicy Statement of principles that guide how all business activities are to function
Goal Broad Intent

What is to be acheived through sustained efforts over long period of time
Foundation (Direction)
Mission
The purpose or the reason for the existance of the business
Values
Define how we will behave by delineating shared beliefs
Do the right things (What to do)

Doing things right (How to do it)
50
Human Resource Paradigms Empowerment
Old Thinking:
People are part of the process, Process requires external control, Managers have to control what people do,
New Thinking:
People design and improve processes, Workers who run the process control it, Managers must obtain commitment of workers,
51
Empowerment
Leading Practices
Promote cooperation and collaboration through teamwork, Empower individuals and teams to make decisions that affect quality and customer satisfaction, Make extensive investments in training and education, Maintain a work environment conducive to the well-being and growth of all employees, Monitor extent and effectiveness of HR practices and measure employee satisfaction,
Empowerment
Empowerment in three Dimensions
Alignment - Capability - Alignment - Trust
Build Capability
Individuals - Ability - Skills - Knowledge System - Materials - Methods - Machines
Trust
53
Empowerment
Empowerment
Build Alignment
1. Teach your mission, vision, values, and objectives, 2. Build everyone's commitment to them,
Align men t
Bureaucracy
Paralysis
Chaos
Trust
Without alignment and trust the organization will suffer with paralisis, bureaucracy, or chaos.
Build Mutual Trust

Employees feel that: 1. They can trust their managers, 2. Thier managers trust them,
54
Measuring Employee Satisfaction and Effectiveness

Satisfaction,
Quality of work-life, training, teamwork, leadership, communications, compensation, benefits, internal suppliers and customers,
Effectiveness,
Team and individual behavior, cost, quality, and productivity improvements, employee turnover; suggestions, training effectiveness,
Supplier and Partnering Processes

Recognize the strategic importance of suppliers, Develop win-win relationships through strong partnerships, Establish trust through openness and honesty, Reduce number of suppliers and integrate the important once and eliminate the others,
56
Suppliers Quality
Certified supplier one that, after extensive investigation, is found to supply material of such quality that routine testing on each lot received is unnecessary, Benefits of Effective Supplier Process Management:
Reduced costs and faster time to market, Increased access to technology, Reduced supplier risk and improved quality,
Strategies for quality

C o n tin u o u s Im p r o v e m e n t
C u s to m e r F o c u s
P r o c e s s Im p r o v e m e n t
T o ta l In v o lv e m e n t
Strategies and Plans

Linking the Strategic Planning To Process Management

Existing Desired Measures
Product Attributes Price, Time , Quality, Variety
Feasible Business Strategies
Strategy Gap?
Desired Business Strategy
Existing Capabilities
Capability Gap?
Desired Capabilities
Operations Strategy
Marketing, , Financial Strategy
Current Operational Structure: Processes & Infrastructure
Process Gap?
Desired Operational Structure: Processes & Infrastructure
Process Attributes Cost, Time, Quality, Flexibility

59
Business/Activity
The TQM Strategic Model
Mission Vision Values Goals
Critical success factors
Objectives Competitiv e Analysi s Assumptions Strengths/Weaknesses
Strategies
Programs
Projects
Organization
Budgets/Resources
60
Objective Quality
4 3 2 1
Top management Consensus Generalised Education and training Quality Management Policies Deployment From Problem Solving to Process Control
Integration of quality Management & Business Strategies
61
Strategic Planning
Guidelines Guidelin
62
Strategic Management
The Strategic Management is a long-term, future oriented process of assessment, goal setting, and decision-making that maps an explicit path between the present and a vision of the future. This process relies on careful consideration of an organizations capabilities and the environment. This process leads also to priority-based resource allocation for achieving the organizations mission.
Vision A vision is an inspiring picture of a preferred future, not bound by time. It represents global and continuing purposes. It serves as a foundation for strategic planning. A vision would depict an ideal future for the organization and the contributions that it can make to that end.
Goals The general ends toward which the organization directs its efforts. They address the primary issues facing the organization within broad grouping of interrelated concerns. They are founded on the vision and may involve coordination among several department with similar functions.
Mission The reason for an organizations existence. it succinctly identifies what the organization does, why, and for whom it does it. A mission reminds everyone in the organization, and also outside, of the unique purposes promoted and served by the organization.
66
Objectives Objectives are clear targets for specific action. They are more detailed than goals, they have shorter time frames, and may state a quantity. They are achievable, measurable, and they set the direction for strategies. A single goal may be subdivided into multiple objectives.
Strategy Strategies are the methods to achieve goals and objectives. The means of transforming inputs into outputs, and ultimately outcomes, with the best use of resources.
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Performance Measures
Indicators of the work performed and the results achieved. Can divided into: Output measures Outcomes measures Input measures Efficiency measures
Output Measures
Outputs are the goods and services produced by an organization. Output measures are the tools, or indicators, to count the services and goods produced by an organization. The number of people receiving a service, or unit produced, or the number of services and customer delivered are often used as measures of output.
70
Development Guides
Is the output reliably measurable? Is the output measure directly related to the organization's strategies? Does the output measure show the quantity of work performed? Can the measure be stated in unit cost terms? Is the output measure clear?
Outcome Measures
Outcomes are the quantified results, or impacts, of organization action. Outcome measures are tools, or indicators, to assess the actual impact of an organizations action. A means for quantified comparison between the actual results and the intended result.
72
Development Guides
Is the outcome measure directly related to the organizations goals. Is the outcome reliably measurable? Does the outcome measure show what change (difference) the organizations action will have on the target group or problem? Can the organization gather data for the outcome measure without incurring excessive costs or undertaking cumbersome procedures? Is the outcome measure clear?
Output versus Outcome Measures

Percentage of high school graduates (output measure) is not the same as the percentage of students with a certain level of mastery of subjects (outcome measure). The number of patients treated and discharged from a state mental hospital (output measure) is not the same as the number of discharged patients who are capable of living independently (outcome measure).
Input Measures
The resources that an organization uses to produce products and services, including human, financial, facility, or material resources.
Number of s expended Kilograms of material used
Also includes measures of the scope of an organizations operations:

Number of clients eligible for services Number of entities subject to inspection/regulation Number of applications or order received
Efficiency Measures
Indicators that measure the cost, unit cost or productivity associated with a given outcome or output.
Average cost per client served Average cost per inspection Average time to process an order
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Total Quality Management

Steps Towards Continuous Improvement

E.H. Aghezzaf- Vakgroep Technische Bedrijfsvoering (TW18V)

Total Quality Management

Foundations of TQM, the Principles

Total Involvement (Participation & Teamwork):

Foundations of TQM, Infrastructures, Practices, and Tools

Towards an Integrated Production System

Customers Work Process

Quality assured through inspection:

Quality designed through prevention:

E.H. Aghezzaf- Vakgroep Technische Bedrijfsvoering (TW18V)

and these are key Measures

Bosses Shareholder Owners Financial Analysts

Employees Government agents

E.H. Aghezzaf- Vakgroep Technische Bedrijfsvoering (TW18V)

The TQM System

Leadership Educatio n and Trainin g Reward s and recognitio n Measurement

Supportive Structures Communication

The TQM System

Leadership Educatio n and Trainin g Reward s and recognitio n Measurement

Supportive Structures Communication

Understanding Customer Expectations

Understanding Customer Expectations

Specifications and Requirements

Implicit, Explicit, and Latent Customer Requirements

E.H. Aghezzaf- Vakgroep Technische Bedrijfsvoering (TW18V)

Understanding Customer Expectations

measurement and feedback

Linking Voice of Customer to Design, Production, and Delivery

Voice of the customer

Technical requirement priorities

Linking Voice of Customer to Design, Production, and Delivery

Technical requirements Component characteristics Process operations Quality plan

Build Customer Relationships: Gathering Information

Customer Relationships Management

Effective Complaint Management Processes

Maximum Level of Undestanding

Measuring Customer Satisfaction

Measuring Customer Satisfaction

Expected Performance Quality Performance Gap

External Communication to Customers

Perceived Product/Service Quality

Credibility Reliability Responsiveness

E.H. Aghezzaf- Vakgroep Technische Bedrijfsvoering (TW18V)

Measuring Customer Satisfaction

Product/Service Quality Specifications

The TQM System

Leadership Educatio n and Trainin g Reward s and recognitio n Measurement

Supportive Structures Communication

Scope of Process Management

Process Improvement Steps

Process Improvement Steps

E.H. Aghezzaf- Vakgroep Technische Bedrijfsvoering (TW18V)

Identifying Key Processes

Marketing & Sales Producing

Products & Services Developing & Designing (R&D - Engineering)

E.H. Aghezzaf- Vakgroep Technische Bedrijfsvoering (TW18V)

Parts not available

Repair not authorized

Corrective work necessary

Perform corrected work

* = Points critical to the success of the service