More and more companies have implemented quality management in their operations.

According to

isixsigma.com, many international organizations have implemented total quality management (TQM) such

as Toyota Motor, Motorola, Ford Motor, and Philip semiconductor. TQM which is a strategy aimed at

embedding awareness of quality in all organizational process (wikipedia) began in the 1950’s and it has

become widely known in 1980’s. Also, Six Sigma was originated from Motorola in 1986. Its purpose is to

“identify and remove the causes of defects and errors in manufacturing and business processes. It uses a set

of quality management methods, including statistical methods, and creates a special infrastructure of people

within the organization” (wikipedia). Another system, Just in Time (JIT) is used to manage inventory

effectively and increase the return on investment. Just in Time is first applied by Ford Company in 1923, and

then it was implemented by Toyota Motor. Applications of these strategies

and techniques have provided many benefits for a company. Beasley states that some of the benefits of JIT
are: cost savings, higher productivity, reduce scrap and rework. Wilson also mentions that TQM helps
reduction in variation, and supplier integration. In discussing Six Sigma, Waxer lists some of the benefits of
Six Sigma as cost avoidance, additional revenue, and increase in productivity. Thus, the practices of TQM,
JIT, and Six Sigma have impacts to each other.

tqm
At its core, Total Quality Management (TQM) is a management approach to long-term success
through customer satisfaction.

In a TQM effort, all members of an organization participate in improving processes, products,

services and the culture in which they work.

The methods for implementing this approach come from the teachings of such quality leaders as
Philip B. Crosby, W. Edwards Deming, Armand V. Feigenbaum, Kaoru Ishikawa and Joseph M.
Juran.

A core concept in implementing TQM is Deming’s 14 points, a set of management practices to help
companies increase their quality and productivity:

1. Create constancy of purpose for improving products and services.

2. Adopt the new philosophy.
3. Cease dependence on inspection to achieve quality.
4. End the practice of awarding business on price alone; instead, minimize total cost by
working with a single supplier.
5. Improve constantly and forever every process for planning, production and service.
6. Institute training on the job.
7. Adopt and institute leadership.
8. Drive out fear.
9. Break down barriers between staff areas.
10. Eliminate slogans, exhortations and targets for the workforce.
11. Eliminate numerical quotas for the workforce and numerical goals for management.
12. Remove barriers that rob people of pride of workmanship, and eliminate the annual rating
or merit system.
13. Institute a vigorous program of education and self-improvement for everyone.
14. Put everybody in the company to work accomplishing the transformation.
The term “Total Quality Management” has lost favor in the United States in recent years: “Quality
management” is commonly substituted. “Total Quality Management,” however, is still used
extensively in Europe.

Total Quality Management (TQM) is an approach that seeks to improve quality and
performance which will meet or exceed customer expectations. This can be achieved by
integrating all quality-related functions and processes throughout the company. TQM looks at
the overall quality measures used by a company including managing quality design and
development, quality control and maintenance, quality improvement, and quality assurance.
TQM takes into account all quality measures taken at all levels and involving all company
employees.

Origins Of TQM

Total quality management has evolved from the quality assurance methods that were first
developed around the time of the First World War. The war effort led to large scale
manufacturing efforts that often produced poor quality. To help correct this, quality inspectors
were introduced on the production line to ensure that the level of failures due to quality was
minimized.

After the First World War, quality inspection became more commonplace in manufacturing
environments and this led to the introduction of Statistical Quality Control (SQC), a theory
developed by Dr. W. Edwards Deming. This quality method provided a statistical method of
quality based on sampling. Where it was not possible to inspect every item, a sample was
tested for quality. The theory of SQC was based on the notion that a variation in the
production process leads to variation in the end product. If the variation in the process could
be removed this would lead to a higher level of quality in the end product.

After World War Two, the industrial manufacturers in Japan produced poor quality items. In a
response to this, the Japanese Union of Scientists and Engineers invited Dr. Deming to train
engineers in quality processes. By the 1950’s quality control was an integral part of Japanese
manufacturing and was adopted by all levels of workers within an organization.

By the 1970’s the notion of total quality was being discussed. This was seen as company-wide
quality control that involves all employees from top management to the workers, in quality
control. In the next decade more non-Japanese companies were introducing quality
management procedures that based on the results seen in Japan. The new wave of quality
control became known as Total Quality Management, which was used to describe the many
quality-focused strategies and techniques that became the center of focus for the quality
movement.

Principles of TQM

TQM can be defined as the management of initiatives and procedures that are aimed at
achieving the delivery of quality products and services. A number of key principles can be
identified in defining TQM, including:

• Executive Management – Top management should act as the main driver for TQM and
create an environment that ensures its success.
• Training – Employees should receive regular training on the methods and concepts of
quality.
• Customer Focus – Improvements in quality should improve customer satisfaction.
• Decision Making – Quality decisions should be made based on measurements.
 • Methodology and Tools – Use of appropriate methodology and tools ensures that non-
conformances are identified, measured and responded to consistently.
• Continuous Improvement – Companies should continuously work towards improving
manufacturing and quality procedures.
• Company Culture – The culture of the company should aim at developing employees
ability to work together to improve quality.
• Employee Involvement – Employees should be encouraged to be pro-active in
identifying and addressing quality related problems.

The Cost Of TQM

Many companies believe that the costs of the introduction of TQM are far greater than the
benefits it will produce. However research across a number of industries has costs involved in
doing nothing, i.e. the direct and indirect costs of quality problems, are far greater than the
costs of implementing TQM.

The American quality expert, Phil Crosby, wrote that many companies chose to pay for the
poor quality in what he referred to as the “Price of Nonconformance”. The costs are identified
in the Prevention, Appraisal, Failure (PAF) Model.

Prevention costs are associated with the design, implementation and maintenance of the TQM
system. They are planned and incurred before actual operation, and can include:

• Product Requirements – The setting specifications for incoming materials, processes,

finished products/services.
• Quality Planning – Creation of plans for quality, reliability, operational, production and
inspections.
• Quality Assurance – The creation and maintenance of the quality system.
• Training – The development, preparation and maintenance of processes.

Appraisal costs are associated with the vendors and customers evaluation of purchased
materials and services to ensure they are within specification. They can include:

• Verification – Inspection of incoming material against agreed upon specifications.

• Quality Audits – Check that the quality system is functioning correctly.
• Vendor Evaluation – Assessment and approval of vendors.

Failure costs can be split into those resulting from internal and external failure. Internal failure
costs occur when results fail to reach quality standards and are detected before they are
shipped to the customer. These can include:

• Waste – Unnecessary work or holding stocks as a result of errors, poor organization or

communication.
• Scrap – Defective product or material that cannot be repaired, used or sold.
• Rework – Correction of defective material or errors.
• Failure Analysis – This is required to establish the causes of internal product failure.

External failure costs occur when the products or services fail to reach quality standards, but
are not detected until after the customer receives the item. These can include:
 • Repairs – Servicing of returned products or at the customer site.
• Warranty Claims – Items are replaced or services re-performed under warranty.
• Complaints – All work and costs associated with dealing with customer’s complaints.
• Returns – Transportation, investigation and handling of returned items

Six Sigma – what does it mean?

Six Sigma at many organizations simply means a measure of quality that strives
for near perfection. Six Sigma is a disciplined, data-driven approach and
methodology for eliminating defects (driving toward six standard deviations
between the mean and the nearest specification limit) in any process -- from
manufacturing to transactional and from product to service.

The statistical representation of Six Sigma describes quantitatively how a

process is performing. To achieve Six Sigma, a process must not produce more
than 3.4 defects per million opportunities. A Six Sigma defect is defined as
anything outside of customer specifications. A Six Sigma opportunity is then the
total quantity of chances for a defect. Process sigma can easily be calculated
using a Six Sigma calculator.

The fundamental objective of the Six Sigma methodology is the implementation

of a measurement-based strategy that focuses on process improvement and
variation reduction through the application of Six Sigma improvement projects.
This is accomplished through the use of two Six Sigma sub-methodologies:
DMAIC and DMADV. The Six Sigma DMAIC process (define, measure, analyze,
improve, control) is an improvement system for existing processes falling below
specification and looking for incremental improvement. The Six Sigma DMADV
process (define, measure, analyze, design, verify) is an improvement system
used to develop new processes or products at Six Sigma quality levels. It can
also be employed if a current process requires more than just incremental
improvement. Both Six Sigma processes are executed by Six Sigma Green Belts
and Six Sigma Black Belts, and are overseen by Six Sigma Master Black Belts.

According to the Six Sigma Academy, Black Belts save companies approximately
$230,000 per project and can complete four to 6 projects per year. General
Electric, one of the most successful companies implementing Six Sigma, has
estimated benefits on the order of $10 billion during the first five years of
implementation. GE first began Six Sigma in 1995 after Motorola and Allied
Signal blazed the Six Sigma trail. Since then, thousands of companies around
the world have discovered the far reaching benefits of Six Sigma.

Many frameworks exist for implementing the Six Sigma methodology. Six Sigma
Consultants all over the world have developed proprietary methodologies for
implementing Six Sigma quality, based on the similar change management
philosophies and applications of tools.
 Adams Associates using six sigma plus specializes in synergistic combination of
strategic planning, leadership and total quality management (tqm) so clients
achieve more goals more often. Six sigma plus is a planned use of strategy,
total quality management (tqm) and leadership development. It is the plus in
six sigma plus that cause people to align for goal accomplishment. This is a
major difference between six sigma plus and a statistical approach or a
teaching of total quality management (tqm) tools. The plus is often the catalyst
that allows all other concepts to be a success.

Issues are selected for special attention as six sigma plus projects. Projects with
significant importance are assigned to Black Belts as six sigma projects. Thus
each six sigma plus project is assigned a leader trained in six sigma and total
quality management (tqm) tools. These Six Sigma Plus Black Belts' duties
include teaching other members of the six sigma plus project team appropriate
total quality management (tqm) philosophy, interfacing with management,
coaching, leadership skills, teaching total quality management (tqm) tools and
changing systems to sustain six sigma plus projects improvements.

Senior Leadership is responsible for the strategic plan, and selecting potential
six sigma plus project areas. Once a six sigma plus project is understood
using total quality management (tqm) tools, total quality management (tqm)
techniques generate alternatives. Improvements are then implemented. Six
sigma plus projects maintain improvements using control tools of total quality
management (tqm). This is the define, measure, analyze, improve and control
sequence (DMAIC) of six sigma.

Six sigma training is recommended for the management and champions as

well as for any six sigma black belt or green belt.

WHAT IS THE DIFFERENCE BETWEEN TQM AND SIX

SIGMA?

This article will discuss the differences between TQM and Six Sigma.
Knowing the difference between TQM and Six Sigma can be incredibly
helpful for managers or business owners who are looking for a quality
control and management approach that is right for their organization.
It's important to remember that while TQM, or Total Quality
Management, was around for quite a while before Six Sigma came
along, Six Sigma and TQM do not have to be mutually exclusive in
terms of business use. They are actually quite compatible in a number
of different business situations and industries. It's best to think of the
relationship between TQM and Six Sigma as TQM being able to help
you improve the quality of your processes, your products, and your
services, Six Sigma has the ability to help you make those
improvements even sharper and more focused.

Alright, let's start with TQM, Total Quality Management.

TQM is a quality control approach that is usually thought of along with
the development, implementation, and continual control of different
organizational systems that are used with a number of different
processes. TQM is based on a particular organizational approach, an
approach that zones in on how to keep already existing quality
standards at a high while simultaneously improving quality.
Essentially, TQM is meant to focus on the culture of a business. What
TQM strives to do is to get different departments in your business-
whether manufacturing, service, or something else-to work together
so that you can all help improve the quality of processes and products.
Six Sigma is also an approach that seeks to correct and improve the
quality of your processes. So how is Six Sigma different from TQM?
Well, let's look at how it's obviously different. TQM strives for general
improvements based on a collaborative cultural approach to the
problem. Six Sigma also requires the efforts of numerous
departments. However, Six Sigma is a statistical and data driven
approach that measures and analyzes data in an effort to discover how
variations and defects can be reduced to the level where when you are
running a process, there are less than 3.4 defects per million cycles or
million products. Six Sigma is used along with Statistical Process
Control, and together the two of them use statistics in order to
monitor and maintain your processes. Six Sigma is a lot of TQM taken
to another level.
So now that we've gone over what the general differences are between
TQM and Six Sigma, let's talk about the most fundamental difference
between the two approaches. The fundamental difference between Six
Sigma and TQM is the way that each one approaches quality control.
First, let's look at TQM. TQM defines quality as the level to which a
process or a product meets standards produced inside the company.
Six Sigma shifts the definition of quality to a relational one,
emphasizing that quality is based on the fewest number of defects,
which must be removed as much as possible. However, Six Sigma's
quality is also defined in large part by the customer, who determines
the value of the process or the product. Six Sigma takes a more
holistic approach to quality improvement, working to improve the
entire business instead of focusing on individual processes and
operations within segregated departments. Another difference between
TQM and Six Sigma is that if you want to implement Six Sigma's
approach, you need professionals who are certified in Six Sigma
techniques. TQM does not require this type of complete, full-time
dedication to the quality management system chosen by your
company. Once again, while there are many fundamental and
superficial differences between Six Sigma and TQM, the two can work
in tandem and support each other in all situations.

Differences and Similarities Between Six Sigma and

TQM, total quality management.
A question we frequently get asked is the difference between Six Sigma and TQM,
total quality management. First off the tools are basically the same,
depending upon the level of TQM, total quality management,
sophistication. For a definition of Six Sigma see:

http://www.adamssixsigma.com/Glossary_of_terms/what_is_six_sigma.htm

If Six Sigma is used only at the project level to eliminate defects, it is an incremental
improvement approach with some structure and discipline. This can be very
valuable but misses much of the true value of Six Sigma and the major differences
between TQM, total quality management and Six Sigma.

The real value of Six Sigma starts to show when it is integrated with the
organization's Strategic Plan helping to implement that plan with a focus on the
paying customers. In order to achieve the true benefits of Six Sigma, projects will
cross organizational boundaries and be focused on business processes this is
relatives unusual for most TQM, total quality management efforts. Sustained
strategic results can be achieved when this is done. When applied to a business
process the benefits obtained move the organization toward World Class
Performance in that business process.

Following are some key areas with a typical TQM, total quality management
approach followed by the Six Sigma approach.

Core Business:

TQM, total quality management

·Frequently not part of the Business Strategy.

·Quality Council did not include Senior Managers.

·No bottom line accountability

·Re-stripe the parking lot projects.

Six Sigma

·A strategy from the top of the Business Unit

·Champions and Senior Management are the Quality Council

·Projects frequently have a profitability hurdle

·Projects are carefully selected with managers accountable.

Some helpful links:

http://www.adamssixsigma.com/strategic_planning.htm

http://www.adamssixsigma.com/Newsletters/strategy_vision_values.htm

http://www.adamssixsigma.com/Newsletters/products_services_distribution.htm
 Goals:

TQM, total quality management

·Improve everything

·Usually not targeted to a process or business

·Frequently without focus

·No projected performance levels.

Six Sigma

·3.4 defect per million opportunities

·Targeted areas

·Projects have a defined scope by management.

Some helpful links:

http://www.adamssixsigma.com/six_sigma_training/leadership_skills_development.htm

http://www.adamssixsigma.com/Newsletters/employee_motivation.htm

http://www.adamssixsigma.com/Newsletters/supply_chain_management.htm

Leadership:

TQM, total quality management

·Frequently vocal strong supporters

·Most places with active leadership succeeded at some level

·Most management treated it as a fad

 ·When supporters left so did TQM, total quality management.

Six Sigma

·Where successful the top management demands implementation

·Management takes an active role in all phases of Six Sigma

·If management treats like TQM, Six Sigma will have the same success/failure.

Some helpful links:

http://www.adamssixsigma.com/Newsletters/leadership_skills.htm

http://www.adamssixsigma.com/six_sigma_training/executive_coaching.htm

http://www.adamssixsigma.com/six_sigma_training/management_training.htm

Application:

TQM, total quality management

·Learn the tools

·Don't worry about the bottom line

·Use as many tools as possible

·Many re-stripe the parking lot projects.

Six Sigma

·Black Belts are well trained

·Projects are expected to meet objectives

·Use only the tools necessary for the projects

 ·Significant improvement expected.

Some helpful links:

http://www.adamssixsigma.com/six_sigma_training/management_and_champions.htm

http://www.adamssixsigma.com/six_sigma_training/six_sigma_black_belt_training.htm

http://www.adamssixsigma.com/six_sigma_training/six_sigma_green_belt_training.htm

Change:

TQM, total quality management

·Within departments

·Incremental

·Seldom based on customer critical criteria

·No time urgency.

Six Sigma

·Best results when focused on customer

·Business process focus

·Crosses departmental functions

·Significant improvement for each project

·Time frame part of scope.

Some helpful links:

http://www.adamssixsigma.com/six_sigma_training/six_sigma_methodology.htm

http://www.adamssixsigma.com/Newsletters/customers_results.htm

http://www.adamssixsigma.com/Newsletters/competition.htm
 Organization:

TQM, total quality management

·Separate organization

·Not accountable to the business unit

·Collection of "experts"

·A career

·Not a respected or strong area of the corporation

·Parking place for ended careers.

Six Sigma

·Champion reports within the Business

·Black Belts are in the Business Unit

·Black Belts are expected to return to line function

·Quality Council of Senior Leaders and Champions.

Some helpful links:

http://www.adamssixsigma.com/strategic_planning.htm

http://www.adamssixsigma.com/Newsletters/design_redesign.htm

http://www.adamssixsigma.com/six_sigma_training/cycle_time.htm

http://www.adamssixsigma.com/six_sigma_training/project_management.htm

Focus:

TQM, total quality management

 ·Manufacturing

·Products

·Little on service

·Little on logistics

·Little on marketing.

Six Sigma

·All business processes

·Non-manufacturing are often the largest opportunities.

Some helpful links:

http://www.adamssixsigma.com/Newsletters/products_services_distribution.htm

http://www.adamssixsigma.com/Newsletters/measure_value.htm

http://www.adamssixsigma.com/Newsletters/data_analysis.htm

http://www.adamssixsigma.com/Newsletters/supply_chain_management.htm

Total Quality Through Six

Sigma
Some argue that many of the tools Six Sigma uses are not new. However, while Six
Sigma uses conventional methods, its application is anything but conventional. Instead it
stresses the importance of searching for a new way of thinking and doing. In fact, Six
Sigma defines a clear road map to achieve Total Quality:

1. Leadership Commitment: Top management not only initiates Six Sigma

deployment, it also plays an active role in the whole deployment cycle. Six Sigma
starts by providing senior leadership with training in the principles and tools it
needs to direct the development of a management infrastructure to support Six
 Sigma. This involves reducing the levels of organizational hierarchy and
removing procedural barriers to experimentation and change.
2. Customer Focus: Systems are developed for establishing close communications
with “external customers” (direct customers, end-users, suppliers, regulatory
bodies, etc), and with internal customers (employees). From upstream suppliers to
ultimate end-users, Six Sigma eliminates the opportunities for defects.
3. Strategic Deployment: Six Sigma targets a small number of high-financial
leveraged items. It focuses the company’s resources: right support, right people,
right project, and right tools, on identifying and improving performance metrics
that relate to bottom-line success.
4. Integrated Infrastructure: The Leadership Team defines and reviews project
progress. The Champion acts as a political leader and removes the barriers for the
project team. The Master Black Belt acts as a technical coach and provides in-
depth knowledge of quality tools. The Black Belt controls the project while the
Green Belt supports the Black Belt - together they form the Six Sigma Project
Teams. In addition, the incentive and recognition systems motivate the project
teams to achieve the business goals.
5. Disciplined Framework: Six Sigma projects are Implemented using the
Measure, Analyze, Improve and Control disciplined road map. This MAIC
discipline sets up a clear protocol to facilitate internal communication. In
addition, from a business perspective, Six Sigma is also a framework for
continuous business improvement.
6. Education and Training: Six Sigma believes that true commitment is driven by
true understanding. As a fact-based methodology, it intensively utilizes quality
and statistical tools to transform a practical problem to a practical solution. Thus,
a top-to-bottom training is conducted in Six Sigma philosophy and system
improvement techniques for all levels.

In conclusion, Six Sigma’s approach and deployment makes it distinguishable from other
quality initiatives. The Six Sigma approach involves the use of statistical tools within a
structured methodology for gaining the knowledge needed to achieve better, faster, and
less expensive products and services than the competition. The repeated, disciplined
application of the master strategy on project after project, where the projects are selected
based on key business objectives, is what drives dollars to the bottom line, resulting in
impressive profits. Moreover, fueled by the bottom line improvement, top management
will continuously be committed to this approach, the work culture will be constantly
nurtured, customers will definitely be satisfied, and Total Quality will ultimately be
achieved.
 Six Sigma VS. Total Quality
Management (TQM)
In some aspects of quality improvement, TQM and Six Sigma share the same philosophy
of how to assist organizations to accomplish Total Quality. They both emphasize the
importance of top-management support and leadership. Both approaches make it clear
that continuous quality improvement is critical to long-term business success. However,
why has the popularity of TQM waned while Six Sigma's popularity continues to grow in
the past decade?

T. Pyzdek (Why Six Sigma is Not TQM, 2001) stated that the primary difference is
management. Unlike TQM, Six Sigma was not developed by technicians who only
dabbled in management and therefore produced only broad guidelines for management to
follow. The Six Sigma way of implementation was created by some of America's most
gifted CEOs - people like Motorola's Bob Galvin, Allied Signal's Larry Bossidy, and
GE's Jack Welch. These people had a single goal in mind: making their businesses as
successful as possible. Once they were convinced that tools and techniques of Six Sigma
could help them do this, they developed a framework to make it happen.

The differences between TQM and Six Sigma are summarized in Table 7.1.

Table 7.1: TQM vs. Six Sigma

TQM
A functional specialty within the
organization.
Focuses on quality.
Motivated by quality idealism.
Loosely monitors progress toward
goals.
People are engaged in routine duties “Slack” resources are created to change key
(Planning, improvement, and
control).
Six Sigma
An infrastructure of dedicated change
agents. Focuses on cross-functional value
delivery streams rather than functional
division of labour.
Focuses on strategic goals and applies them
to cost, schedule and other key business
metrics.
Driven by tangible benefit far a major
stockholder group (customers, shareholders,
and employees).
Ensures that the investment produces the
expected return.
business processes and the organization
itself.
 Emphasizes problem solving. Emphasizes breakthrough rates of
improvement.
Focuses on standard performance, Focuses on world class performance, e.g.,
e.g. ISO 9000. 3.4 PPM error rate.
Quality is a permanent, full-time job. Six Sigma job is temporary. Six Sigma is a
Career path is in the quality stepping-stone; career path leads elsewhere.
profession.
Provides a vast set of tools and Provides a selected subset of tools and
techniques with no clear framework techniques and a clearly defined framework
for using them effectively. for using them to achieve results (DMAIC).
Goals are developed by quality Goals flow down from customers and senior
department based on quality criteria leadership's strategic objectives. Goals and
and the assumption that what is good metrics are reviewed at the enterprise level
for quality is good for the to assure that local sub-optimization does
organization. not occur.
Developed by technical personnel. Developed by CEOs.
Focuses on long-term results. Six Sigma looks for a mix of short-term and
Expected payoff is not well-defined. long-term results, as dictated by business
demands.

THE JUST-IN-TIME (JIT) APPROACH

(Sample of Full-Text)

SUMMARY

JIT presentations often employ the analogy of a stream when describing

proper inventory management. Well-managed systems achieve a flow
of inventory from raw material to the customer like a smooth river,
unimpeded by shoals of scrap or machine breakdown or other
problems. This concept did not originate with the Japanese. Henry
Ford's River Rouge plant regularly converted iron ore into a Model T in
four days. However, in recent years, especially the 1970s, American
business has not improved its manufacturing capability quickly enough
to maintain a competitive position in cost or quality or market
responsiveness or flexibility.

In 1983 APICS began a zero inventory crusade---strongly advocating

JIT. Firms such as CM, Ford, Chrysler, Bendix, Harley-Davidson, IBM,
Hewlett-Packard, AT&T, and others began the journey even earlier.
There has been much progress on regaining competitiveness in recent
years. This progress has been achieved by emphasizing continuous
improvement, reduced inventories, expanded roles for hourly workers,
fewer levels of management, longer term relationships with customers
and suppliers, and an emphasis on providing value to the customer,
Many American firms are once again at or near world class status. We
should remember, however, that complacency is the principle barrier to
maintaining world class status. We must adopt the philosophy of
Kaizen, continuous improvement. The Japanese underscore the
urgency of maintaining competitiveness with a phrase taught to every
schoolchild, "Export or Die!" In yesterday's world, export or die was a
truism for any island economy. In today's global village, export or die is
a truism for all economies.

What is Just-In-Time? / Why is JIT Important?

To prosper---and often even to survive---manufacturing companies must

provide value at least equal to that of competitors. Today,
manufacturing competition includes plants located in many different
parts of the world. For example, some refrigerators sold at major
department stores in Canada are assembled in Wroclaw, Poland, using
a condenser manufactured in Sao Paulo, Brazil. Much of the world is
one big market, with goods crossing many different types of boundaries.

Although international trade always has existed, it has exploded in the

last few decades. Improved communication and transportation have
been contributing factors, but the primary cause has been dramatically
improved manufacturing productivity---with emphasis on both quality
and cost. Although Japan has been in the forefront of this advance,
South Korea, Taiwan, Malaysia, Singapore, and Thailand have made
remarkable strides. Progress is also taking place in Mexico and Brazil,
and most Western European countries have continued to improve their
industrial capability. In addition, it is not unreasonable to expect that
Eastern European countries will improve their competitive position as
they revise their economic policies.
These developments and a benign neglect of manufacturing by top
management in many North American firms caused foreign trade
balance deficits and a lower productivity growth in the United States
during the 1960s and 1970s than in many other countries. Some U.S.
companies lost market share and others lost markets. The MIT
commission on industrial productivity reported a large and increasing
balance of trade deficit in automobiles, consumer electronics, machine
tools, semiconductors, and textiles (Dertouzos et al. 1989). Continuation
of such a pattern can have dire consequences for the quality of life in
any country. Foreign debt, currency devaluation, and loss of markets
and profits eventually not only affect the ability of consumers to
purchase material goods such as toasters and automobiles but also limit
a nation’s ability to support health care, the arts, education, and
recreation activities. In brief, the standard of living can decrease
dramatically. For example, Argentina was a relatively prosperous
country at the turn of the century, but today its economy is in shambles.
Nearly all citizens suffer when such a change occurs.

The MIT commission observed:

A large continental economy like the United States will not be able to
function primarily as a producer of services in the foreseeable future.
One reason is that it would have to rely on exports of services to pay for
its imports, and this does not seem realistic. In 1987 gross U.S. exports
of services, excluding income from overseas investments and overseas
sales of government services, were worth $57 billion, whereas the total
value of goods and services imported into the United States was about
$55 billion. - - , The United States thus has no choice but to continue
competing in the world market for manufactures. The ultimate scale of
American manufacturing is not known, but it will not be trivial. The
important question is not whether the United States will have a
manufacturing industry but whether it will compete as a low-wage
manufacturer or as a high-productivity manufacturer. (Dertouzos et al.
1989, 39-40)

Clearly it is preferable to compete as a high-productivity manufacturer.

These considerations led many organizations in the United States,

Canada, and other countries to examine successful manufacturing
organizations in North America and throughout the world to identify the
operating characteristics and practices of companies capable of
competing in the present worldwide market. The essential
characteristics of a such a company are that it produces high quality
products at low cost and that it responds quickly to customer requests
for delivery, changes in design, and changes in volume, When a
company has achieved these goals, it can compete with anybody,
anywhere. It is important to understand that both high quality and low
cost are relative terms; continuous improvement is needed to maintain
high relative quality and low relative cost. Referring to the degree of
change needed to achieve world class status in Thriving on Chaos
(1987), Tom Peters notes:

Radical changes in organizational structure and procedures are called

for, Layers of management must be reduced in most big firms by 75
percent. Product development time and order lead time must be slashed
by 90 percent. Electronic/telecommunication linkups to customers and
suppliers must be developed posthaste. Just listening to customers and
dealers needs to become the norm-and as yet it is not.

Different terms are used to identify the process of improving

manufacturing productivity with emphasis on high quality and low cost:
the Just-in-Time (JIT) approach, zero inventory, total quality
management, world class manufacturing, and the search for excellence.
We are using JIT because it seems to have been the first, and all of the
essential concepts are inherent to it. The title of the process is not
important; adopting the philosophy and pursuing its operating objectives
are. This section includes concepts, approaches, and practices that may
have originated under the aegis of programs with each of the different
labels and titles given to various productivity improvement programs...

THE PHILOSOPHY OF JIT

JIT is a philosophy embodying various concepts that result in a different
way of doing business for most organizations. The basic tenets of this
philosophy include:

A. All waste, anything that does not add value to the product or service,
should be eliminated Value is anything that increases the usefulness of
the product or service to the customer or reduces the cost to the
customer.

B. JIT is a never ending journey, but with rewarding steps and

milestones.
C. Inventory is a waste. It covers up problems that should be solved
rather than concealed. Waste can gradually be eliminated by removing
small amounts of inventory from the system, correcting the problems
that ensue, and then removing more inventory.

D. The customers' definitions of quality, their criteria for evaluating the

product, should drive product design and the manufacturing system.
This implies a trend toward increasingly customized products.

E. Manufacturing flexibility, including quick response to delivery

requests, design changes, and quantity changes, is essential to
maintain high quality and low cost with an increasingly differentiated
product line.

F. Mutual respect and support based on openness and trust should

exist among an organization, its employees, its suppliers, and its
customers.

G. A team effort is required to achieve world class manufacturing

capability. Management, staff, and labor must participate. This implies
increasing the flexibility, responsibility, and authority provided to the
hourly worker.

H. The employee who performs a task often is the best source of

suggested improvements in the operation. It is important to employ the
workers' brains, not merely their hands.

JIT is a very eclectic approach. It includes many old ideas and some
new ones and relies on basic concepts from many disciplines, including
statistics, industrial engineering, production management, and the
behavioral sciences. But first and foremost, it is pragmatic and, thus,
empirical. Discovering "what works" and why it works requires that plant
operations be studied thoroughly. This requires the collection and
analysis of relevant data concerning the plant's operation and its
performance. This pragmatism causes the manufacturing process and
its environment to be viewed as a research laboratory, similar to a
university hospital, in that the primary task may be to produce quality
output but another important goal is to learn how to do it better the next
time.

Traditionally, inventory has been viewed as an asset, one that can be

converted to cash. The Just-in-Time view is that inventory does not add
value but instead incurs costs, and thus is a waste. Holding inventory is
analogous to not receiving any interest for a deposit in a bank and,
furthermore, paying to keep it there. Traditionally, holding inventory was
seen as being less costly than correcting the production and distribution
efficiencies that inventory overcame. For example, large lot sizes
spread the cost of expensive setups across many parts. JIT takes a
different view.

JIT views inventory as a symptom of inadequate management, a

method of hiding inefficiencies and problems, see Figure 1.
Inefficiencies that cause inventory include: long and costly setups,
scrap, lengthy and widely varying manufacturing lead times, long
queues at work centers, inadequate capacity, machine failure, lack of
worker and equipment flexibility, variations in employee output rate, long
supplier lead times, and erratic supplier quality. JIT emphasizes that
solving each of these problems will reduce the need for inventory and
improve productivity. It strives to have the right material, at the right
time, at the right place, and in the exact amount. Thus, the name "Just-
in-Time" is used by many to designate an organized and continuing
program to improve operations productivity.

In Kaizen (1986), Masaaki Imai argues that the most important aspect of
JIT is a philosophy of continuous improvement. He explains that
although Westerners and Japanese both ascribe to improvement, he
has discovered that the two cultures have 'different concepts of what
this term means. Westerners think of improvement as a step function---
a change represents a marked increase in performance. That level of
performance is held until the next performance leap is introduced. The
Japanese view continuous improvement as an upward sloping line-
driven by numerous incremental improvements, Each improvement is in
itself imperceptible, but collectively the changes made in a few months
wilt represent a great deal of progress.

This difference in culture can be seen in the management of

suggestions, Western companies offer large rewards for suggestions
that substantially reduce company costs. In a typical year a few hundred
suggestions may be received, a small percentage of which actually are
implemented. Toyota, by contrast, offers a small, fixed fee---less than
$1---per suggestion. They receive hundreds of thousands of
suggestions each year and implement more than 90 percent of them.
Imai contends that the total improvement achieved by emphasizing
incremental improvement is greater than that achieved by emphasizing
dramatic improvement. Certainly the performance of Toyota in recent
years represents a strong ease for Imai's point of view.

The Japanese do not neglect dramatic improvement, either. The books

of Shigeo Shingo (1985, 1986,1988) explore from an engineer's
perspective the process of analyzing operations for opportunities for
dramatic improvement, One story illustrates his approach. A client of
Shingo's, a manufacturer of engraved brass plates, was seeking a way
to efficiently remove the lubricating fluid used to cool the engraving pen,
because cleaning the engraved plate represented the largest single
process cost. Shingo, on reflecting on the purpose of the fluid-cooling
plus debris removal, suggested the use of a focused stream of
compressed air rather than fluid. The company's management felt that
air would not properly protect the pen and would shorten the pen's life.
On Shingo's insistence, the company tried it and found that the method
not only eliminated the need to clean the plate after engraving but also
actually extended the pen life by 30 percent. This story illustrates two
aspects of continuous improvement---careful analysis combined with a
willingness to try new approaches, even when they seem unpromising...
(there's much more!)

Six Sigma and TQM (Total Quality Management) are both methods for
monitoring the quality of your products, processes, and services. TQM is aimed
at overhauling the way that companies do things. Lean Six Sigma is aimed
towards obtaining the fastest change possible in a company. While both methods
aim at improving quality, there are important differences between them.

Lean Six Sigma

Lean Six Sigma arose out of a combination of Six Sigma principles and Lean
manufacturing methodology. The principles behind Lean Six Sigma include:

• Customer-satisfaction based initiatives for quality improvement

• Specific metrics that drive decision making
• Seeks to reduce variation that causes quality
• Separates non-value work from value work - considering non-value work
to be waste
• Focuses upon speed
Total Quality Management (TQM)

Total Quality Management gave birth to methodologies like Six Sigma and Lean
Six Sigma. The process centers on quality and takes a customer-focused
approach. While Lean Six Sigma focuses upon speed, metrics, and reducing
variation, TQM focuses on the long haul of quality improvement.

Features include:

• Having a consistent, constant, and stated purpose behind improving

quality
• Reducing dependence upon inspections (Lean Six Sigma is very data-
intensive)
• Getting rid of fear and hierarchy in the company
• Ensuring everyone in the company has undergone training and that they
are working towards quality improvement
• Ensuring that education is an on-going process

Which Method is Best for You?

If you work in a field that requires precision (i.e. healthcare, manufacturing,

engineering, etc.) then Lean Six Sigma may have more benefits to you due to the
dependency on data gathering and monitoring any variation that occurs. This can
be a very productive way to ensure the quality of your services and products.
Through using DMAIC (Decide, Measure, Analyze, Improve, Control) each
change inducted into a process is carefully monitored.

On the other hand, if your industry is more service-based or less precise, total
quality management may work best for you in your situation. This means that you
improve quality by having a purpose, erasing boundaries between divisions in the
company, and ensure the training of every individual. Customer service might be
an example where TQM is more appropriate than Lean Six Sigma.

Both methods are extremely effective at improving the quality of goods and
services - if carefully implemented and supervised by a project management
team.

Read more: http://www.brighthub.com/office/project-

management/articles/46733.aspx#ixzz1GNw30crG