Total Quality Management Courseware

TQM Certification Introduction to Total Quality Management Introduction to Total Quality Management Total Quality Management What is Quality? Why a Quality Management System is required? What is Cost of Quality? Benefits of a Total Quality Management System Foundations of TQM Foundations of TQM...Continued Comparison of TQM with Traditional Management Practices Important Aspects and Principles of TQM Important Aspects and Principles of TQM Commitment to Customers Gathering and Analyzing Data Human Resource Management Continuous Improvement TQM and ISO 9000 Elements of a TQM Organizational System Elements of a Quality Cost System Paving the Way for Organizational Transition to TQM Paving the Way for Organizational Transition to TQM Building a Quality Framework The Development Stage Communicating the Quality Strategy Measuring Performance and Feedback Chapter 3 Chapter 2 Chapter 1

Measuring Performance and Feedback...Continued Measuring Performance and Feedback...Continued The Implementation Stage The Evaluation and Control Stage Quality Management Systems and Tools Quality Management Systems and Tools Business Process Reengineering (BPR) Benchmarking Quality Function Deployment (QFD) Malcolm Baldrige National Quality Award Six Sigma Lean Manufacturing Tools for Total Quality Management 7 Quality Control (QC) Tools 7 Quality Control (QC) Tools ...Continued 7 Management and Planning (MP) Tools 7 Management and Planning (MP) Tools...Continued 7 Management and Planning (MP) Tools...Continued Statistical Process Control Design of Experiments (DOE) Failure Mode and Effects Analysis (FMEA) TQM in Various Fields TQM in Various Fields TQM in Manufacturing TQM in Healthcare TQM in Education TQM in Construction Chapter 5 Chapter 4

Chapter 1 - Introduction to Total Quality Management

1.1 Total Quality Management Definition of TQM Total Quality Management (TQM) is an organizational management method that seeks to improve quality of products and services by implementing a process of continuous improvement. It is an approach to improve flexibility, effectiveness and competitiveness of an organization. The main feature which distinguishes TQM from other management practices is TQM's emphasis on continuous improvement. At the core, TQM is a management strategy that aims to deliver long term success through customer satisfaction.
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A TQM system is a method of continuous improvement, in which all employees of an organization play a part in the improvement of products, processes and services, and 'quality management' is integrated into all aspects of the organization. It is a way to improve the culture and attitude of the organization. A total quality culture involves doing things right the first time and eliminating wastes and defects from the business. All organization functions like marketing, designing, engineering, production, finance, customer service etc. are integrated together to result in customer satisfaction and for achieving the whole organizational goal. Besides being a management perspective, TQM can be achieved through long term planning by making annual quality plans which eventually lead the organization to achieve the overall objective.

TQM can be defined as:

Total: Every employee of the organization is involved. Quality: Customer requirements are continually satisfied. Management: Senior management is fully committed towards the goals of total quality. The following diagram illustrates the concept of TQM:

The diagram given above presents a framework for excellent performance. It covers all aspects of an organization and the way it operates. Performance is achieved by planning the involvement of people in improving the processes. All this can be implemented by an organizational culture characterized by effective leadership, communication and commitment.

In a TQM system, the focus is on incorporating quality in all work processes (processes are systems internal to the organization which get the work done); therefore, every person working on each process has to be actively involved. This can be made possible by the management which can guide effective changes down the organizational chain to ensure maximum and the most effective employee participation in all areas. The supervisors and managers have to ensure they monitor the process and listen to suggestions of downstream workers regarding any wasteful operation or nonviable procedure. Improvements must be documented and made into standard procedure. The simple objective of TQM is "Work smart by doing things right the first time". Total quality management is not about short term fixes, it is about changing the way work is done, forever. TQM actions are based on statistical data and analysis. A basic principle of TQM is that all work is process. Therefore to improve work processes, it is necessary to understand how the process works, and then to quantify, control and reduce the variation in the process. TQM takes the help of statistical concepts to understand variation in processes and to rectify them. Process improvement ultimately leading to performance improvement and customer satisfaction is achieved by controlling and reducing process variation. (This will be discussed in detail in Chapter 4- Quality Management Systems and Tools) TQM had its early beginnings in the 1920s when statistical theory was first applied to product quality control. The concept of TQM was taken a step further in Japan in the 1940s by pioneers like Juran, Deming, Crosby, and Ishikawa. The focus broadened from product quality to quality issues pertaining to the entire organization. How these thinkers influenced TQM will be discussed in the later section. TQM has gained acceptance in the West since the early 1980s. TQM was originally applied to manufacturing processes alone. In the present day, TQM has become a general management approach and has been widely used in service as well as public sector undertakings like hospitals, schools, science programs and government institutions. Companies like Ford Motor Company, Toyota Motor Company, Philips, Motorola, Sony, Nissan, IBM, Hewlett Packard and a host of others have adopted TQM practices. To better understand the concept of Total Quality Management, it is essential to understand the meaning of quality.

1.2 What is Quality?' Quality' gives competitive advantage to today's businesses. A company's competitiveness is based on its reputation for quality. In order to make an entry into the completive market, every organization must fulfill and sometimes even exceed the quality criteria defined by the existing market. Quality, to many may seem to be an abstract term but in business processes quality is something which has definite measurable characteristics.

For example, quality in a manufacturing process may mean conformance to specific physical dimensions. Quality in a hotel chain may mean some amount of "Professional Service". Quality in a pizza chain may amount to satisfying customers with regard to the taste, size, hotness or time of delivery of the pizzas.

As has been stated earlier, TQM is the management of total quality. Quality can be described as "something which satisfies customers' requirements fully". Quality can also be used to describe the "excellence" of a product or service. This is a basic concept from which many quality definitions have been derived. Juran and Gryna define quality as "fitness for purpose or use". According to Deming, the guru of quality management,

"Quality is a predictable degree of uniformity and dependability, at low cost and suited to the market. Quality should be aimed at the needs of the consumer, present and future".

Crosby defines quality as "conformance to requirements". Robert Flood explains quality as "Quality means meeting customers' requirements, formal and informal, at the lowest cost, first and every time". In the current day, managers must aim at a larger perspective; that is better productivity through better quality. It is to be noted that customer requirements are the core idea behind all quality definitions; and customers are both internal and external. Customer requirements may mean availability, reliability, delivery, maintainability, and price effectiveness. Therefore all enterprises must integrate these early in the life cycle of the product or service. That is, measurable qualities that satisfy customers should be built into all products and services. All needs associated with design, durability, cost, safety, reliability, and delivery must be exactly met in the product. In other words, there must be conformance to product or service specifications. This has led to some Japanese enterprises to use a wider definition of quality, which is, "providing extraordinary customer satisfaction".

For example, the quality of design signifies the degree to which the design or make of the product or service meets the requirements of the customer or market. For this, a clear understanding of the requirements of the customer and the corresponding product specification will be required. Failure in design quality is usually the costliest mistake which requires redesigning the product and reengineering the production process. Failure in design is also not easy to detect until after the launch of the product or service. Hence, the design stage should stress on prevention rather than detection. For instance, the
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petrol tank in a car requires a very good design or else it will be prone to rupture in case of an accident. A failed petrol tank will require redesigning the petrol tank and positioning of the tank in the body of the car. This will prove to be an expensive process for the car company. Therefore, conforming to design requirements is one of the most important aspects of quality. There are various public perceptions of quality.

A number of perceptions as reported by Ryan (1988) and Hutchens (1989) are summarized below: (B.G. Dale, 1994) The following is a ranking of factors that people consider important when they purchase a product: performance, durability, ease of repair, service availability, warranty and ease of use. People will pay a premium to get what they perceive to be of higher quality. The following are the factors that make for higher quality in services- Courtesy, promptness, a basic sense that one's needs are satisfied, and attributes of the service provider. The term "total quality" in TQM is of significant importance. The word 'total' denotes three things: Quality of products and services aligned with customer specifications Quality or amount of returns to satisfy stakeholder needs Quality of working conditions internal to the organization; right from the top to the bottom of the organizational pyramid Total quality is the description of the whole culture and attitude of the organization. The most important consideration of 'total quality' is that the employees at every level should be involved in generating quality. It is a broad spectrum under which the CEO to the lowest paid worker endeavors to create customer satisfaction at lowest costs. The term "at lowest costs" implies there is no place for wastes; like wastage of time, labor or material in the production and delivery process of the product or service. Quality, as described above, is embedded at every level of production. Every job in every process is critical, and any wastage or production falling below standards at any process level will diminish the quality of the final product. Products or services have to be made and delivered perfectly, conforming to all requirements, at the first time itself.

TQM focuses on 'quality chains', the relationship between customers (internal and external) and suppliers. Each individual in the quality chain should be able to answer the following questions in order to achieve quality in an organization:

Customers

Who are his immediate customers? What are their expectations? How will he find out about their requirements? Does he have the necessary capability to meet their requirements? Does he persistently meet the requirements? What does he do to monitor changes in the requirements?

Suppliers

Who are his immediate suppliers? What are his requirements from the suppliers? How will he communicate his requirements? Do the suppliers have the necessary capability to meet his requirements? Do the suppliers persistently meet the requirements? How will he communicate changes in his requirements to his suppliers?

The basis of a total quality performance is excellent communication between customers and suppliers. Feedback systems should be in place in the organization to assimilate customer information.
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1.4 Why a Quality Management System is required? All business and service processes in an organization are characterized by quality chains. Aprocess is asequence of events that transform inputs into outputs. It is a mixture of several parts which include raw materials, resources, manpower, and roles and actions to accomplish a certain task. In other words, a process adds value to an input. A process is ongoing and this is what leads to production of output, i.e. goods and services. Some inputs in turn may be supplied as outputs from a preceding process.

All business and service processes are a coordinated effort that produces customer satisfaction in the form of quality products and services. Customer requirements can be defined as price, quality, timing of launch of product, product grade etc. An organization wanting to deliver better quality can ascertain customer requirements by doing market research, gathering data, carrying out product surveys, studying customer complaints, applying techniques like brainstorming and focus groups, etc. As mentioned earlier, all work is process and each process in each department can be examined by studying its components- inputs and outputs. This will help the management to ascertain the areas in which quality needs to be improved. Therefore, regular watch and control over the inputs is essential to determine that the process is capable of meeting the customer requirements. After ensuring process capability, the process needs to be continually monitored and controlled to ensure that the quality is maintained at the same or a higher level. This means quality is assured. Quality Control, therefore, can be largely said to be the procedures and actions employed to monitor and sustain the quality of a product, process or service. It is ensuring that customer requirements are satisfied continually by identifying and removing issues that cause quality problems. Quality Assurance is the planned organization wide activity, which includes documentation, to continually prevent quality problems Quality assurance is therefore a full time activity that requires the setting up of a good quality management system. The commitment of the top management and participation of all employees is an essential prerequisite towards achieving a perfect quality management system. A good quality management system will ensure that both customers' requirements and organization's requirements are met. An organization's requirements mean both the internal and external requirements are met, at optimum cost and optimum utilization of available resources. A quality management system therefore comprises of management structure, resources, responsibilities, and processes; whereas, the implementation of a quality management system is a strategic decision, and it should be aligned with the organizational objectives, its processes, size of the organization and products on offer

1.5 What is Cost of Quality? To understand quality better, it is necessary to be familiar with the concept of 'cost of quality'. The cost of quality (or quality cost) is the cost of not creating a quality product or service. Every time a defective product is made or there is waste like wastage of time, labor or material; the cost of quality increases. In other words, the cost of quality is the cost that would not have had to be expended had the quality of product or service been perfect.

According to Thomas Pyzdek (1976), the quality equation states that quality lies in "doing the right things" and "not doing the wrong things". Doing the right things means including product or service features that delight the customers. Not doing the wrong things mean avoiding defects and other behaviors that cause customer dissatisfaction. The quality costs address only the latter aspect of quality.

Examples are: Rework and scrap Excess material Rebuilding a machine Reworking of a service, like replacing an order in a restaurant Reordering to replace defective products Redesigning a defective part Reworking a manufactured item Reengineering a business process

To ascertain the financial benefit of the organization, it is important to be familiar with the concept of cost of quality. Quality cost systems aid senior management in identifying which projects to apply their total quality efforts to by selecting opportunities that yield greatest return on investment. Quality is in itself not a cost. But quality is a force that raises profits through lower costs. Therefore, cost of quality means any cost that is incurred because the quality of the product or service produced is not perfect. Cost of quality is also known as cost of poor quality.

The quality costs are a total of the following costs: 1. Prevention Costs: These are costs that are incurred when undertaking activities to prevent poor
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quality in products and services. For example, quality improvement team meetings, quality planning, product review, supplier capability surveys, education and training etc. 2. Appraisal Costs: These are the costs associated with measuring, auditing, and evaluating products or services to test adherence to quality standards or performance requirements. For example, inspection tests for purchased stock, in process and final inspection, product or process audits etc. 3. Failure Costs: These are the costs that are incurred from products and services that do not adhere to the required standards or fail to meet customer needs. These are classified into: Internal Failure Costs are those which occur prior to delivery. Examples are rework, scrap, reinspection, retesting, etc. External Failure Costs are those which occur during or after delivery. Examples are warranty charges, costs of processing customer complaints, product replacements etc Poor quality or high quality costs bring down the revenue of the company through higher expenses and poor customer satisfaction. Therefore, the goal of any company should be to lower the costs of quality to the lowest possible level. According to Juran and Gryna(1998), the cost of failure declines as conformance quality levels improve towards perfection, while the cost of appraisal and prevention increases. The total cost of failure and the cost of appraisal and failure determine the level of costs of quality. Quality cost management should be included in the charter of senior level management teams. The way to control quality costs is to find out the actual cause behind quality lags and then eliminate those causes.

1.6 Benefits of a Total Quality Management System 1. TQM helps to sustain the level of customer satisfaction. TQM is based on continuous improvement, which is a continual effort to improve products and services. The quality of the product is an output of the process quality; therefore there is emphasis on the company to improve its processes. Continuous improvement of the quality of the process and eventually the product is the only way to maintain a steady level of customer satisfaction. (Read more on continuous improvement in Chapter 2) 2. The application of TQM enables senior management to make all levels of management in the organization responsible for quality. It can empower everybody in the chain, right till the downstream workers to supervise quality systems. This leads to quality awareness among all members of the organization. 3. The application of TQM helps reduce costs of the organization through the management of cost of quality. 4. In an organization where TQM is employed, cross departmental barriers are removed as a total quality system believes in effective communication on a daily basis among different departments. People across various departments coordinate amongst themselves to solve problems as a team. This leads to a better understanding of how the organizational system works.
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5. TQM leads to faster problem solving because of usage of measurement tools and techniques like SPC, FMEA, QFD, benchmarking etc. This results in better understanding of the causes of variation in work processes, faster detection of failures, identification of root causes of failures etc. These techniques aid in quicker and more accurate problem solving. 6. TQM results in reduction of time involved from product conception to delivery time. This is because in a TQM system, there is fast response to customer needs to maintain customer satisfaction. Fast response means there are short product and service introduction cycles, and continuous process oriented development leads to efficiencies like elimination of non-value adding activities. 7. TQM leads to overall development in the workforce of the company. It increases the pride of workmanship amongst employees. This helps to achieve the quality objective. The employees are welltrained and motivated to produce consistent results because TQM systems promote employee participation, and there are reward and recognition systems, ongoing education and training. Employees are taught effective communication and they are encouraged to innovate. 8. A TQM culture promotes better supplier communication. In this system, the staff is directly involved with their concerned suppliers. Direct relation with suppliers helps to prevent wastes like reordering parts or raw material, material recall etc. This makes it possible for the organization to satisfy customer needs in a quicker and more efficient manner. 9. A TQM culture makes it possible for the company to realize its overall mission and bottomline goal. TQM results in decreased costs, increased productivity and increased sales. The stress on quality improves the efficiency of operations. It trims down work requirements, reduces defects and inventory, and results in cash savings through more efficient use of scarce resources. 10. A TQM system also increases the readiness of the company to produce desired results. 1.7 Foundations of TQM TQM became the center of focus for quality issues in the western world after observing Japan's successful initiative in quality management strategies. The methods of implementing TQM can be traced back to the teachings of quality leaders such as Deming, Juran, Ishikawa, Crosby, Shingo, and Feigenbaum; who have studied management systems and have tried to improve management systems. The American quality thinkers like Edwards Deming, Philip B. Crosby, and Joseph Juran tried to make sense of the largely successful Japanese manufacturing industry. Deming and Juran have made tremendous contribution in the success of Japan's organizational systems in the 1950s and 1960s. How the insights of these gurus influenced quality management organizational systems is discussed separately below. William Edwards Deming The most well known advocate of TQM was W. Edwards Deming, an American statistician. He is considered to be the guru of modern quality management. Deming contributed a great deal to the rebuilding of Japan in the 1940s, post World War II. The concepts of quality introduced by Dr. Deming were very popular and became fundamental to the Japanese industry. He introduced 'Statistical Process Control', a set of procedures which helped them to produce quality machinery at
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low costs. Deming was not heard in the USA until 1979, until when he was working with the Nashua Corporation. Deming was awarded the Second Order of the Sacred Treasure, one of Japan's most respectable honors, for his role in Japanese quality. Dr. Deming identified customers as the most important aspect in production. Here, customers are those who are 'delighted' with a company's products and services and will bring more business for them. Deming also highlighted the importance of suppliers who would be ready with products before customers demand them, to be ahead of competitors. Deming advocated a systematic approach to quality. Improved quality leads to reduced rework, lesser errors and delays, increased productivity, better profitability, success of business objective. Deming observed the strengths and 'diseases' of the industry and laid emphasis on the importance of leadership, motivation, teamwork, and quality performance at every stage of work. He published 14 points in 1982, to aid management, which became the foundations for implementing TQM. Deming's 14 Points 1. Create constancy of purpose towards improvement of product and services- Organizations must allocate resources for long term planning instead of reacting to short term problems.

2. Adopt the new philosophy- Organizations, both at the managerial and workforce level, must no longer accept the 'acceptable' levels of delays, defective material and workmanship.

3. Cease dependence on mass inspection to achieve quality- Quality must be built into the design of the processes preventing defects rather than detecting them after the errors have occurred. 4. End the practice of awarding business on the basis of price tag. 5. Improve constantly- Management and employees must locate problems and strive to constantly improve quality by reducing variation in all aspects, like planning, production and service. 6. Institute modern methods of training on the job- This will reduce variation in the way work is done.

7. Adopt and institute modern methods of supervision- Managers must lead, not supervise, and the responsibility of workers must shift to quality instead of numbers. 8. Drive out fear, through effective communication- Employees must feel secure to work effectively for the organization. 9. Break down barriers between departments- This will promote clarity of working among different departments, such as research, design, production and sales; and improve quality and productivity. 10. Eliminate numerical goals, slogans (exhortations), targets for the workforce- Let the workforce be encouraged to increase productivity without providing the methods to achieve this.
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11. Eliminate work standards that prescribe numerical quotas- To produce numerical quotas, employees will churn out low quality products.

12. Remove barriers that rob the hourly worker of the right to pride of workmanship- Individual performance reviews are a great barrier. 13. Institute education and training for everyone. 14. Create a structure in top management that will drive employees everyday on the above 13 pointsTo achieve this transformation, everybody in the company should be put to work.

Deming has also highlighted the seven deadly diseases towards achieving quality. The first five are:

1. Lack of constancy of purpose 2. Emphasis on short term profits 3. Evaluation pf performance 4. Mobility of management 5. Running an organization on visible figures alone.

The other two diseases are in context with medical costs and warranty costs, which pertain mainly to USA.

Joseph Juran Another guru of quality management who gained worldwide popularity is Dr. Joseph M. Juran. Juran followed Deming to Japan, where his name became as famous as Deming. Juran published the 'Quality Control Handbook', which became the standard reference book on quality. He was also awarded the Second Order of the Sacred Treasure in Japan, like Deming. Juran developed his ideas on TQM based on his quality trilogy. He drew parallels between quality processes and financial management processes of an enterprise. He thought that problems could be looked at through three quality processes which are quality planning, quality control and quality improvement.

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Quality planning is the process of preparing to meet the daily goals. The essential points are: Identify the customers, both internal and external Determine the needs of customers Set quality goals that correspond to these needs Organize to reach the goals (establish quality council, identify problems, select projects, appoint teams, delegate facilitators) Prove process capability (prove that the process can meet the quality goals under operating conditions) Quality control is the means of meeting quality goals. The essential points are: Select what to control Select units of measurement Establish standards of performance Measure actual performance Measure actual performance versus standard performance Take action on the difference Quality improvement is the process to break through to new levels of performance and includes: Identifying projects for improvement Carrying out these projects to solve problems Discovering causes of problems Providing remedies Providing for control to hold the gains Reporting progress Giving recognition Communicating results Maintaining the quality by making annual improvements part of the regular system

Juran mainly stressed on getting the system straight rather than blaming operating systems. He laid emphasis on providing training to quality teams in measurement and problem solving.
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1.8 Foundations of TQM...Continued Phil Crosby Philip B. Crosby gained worldwide popularity for his consultancy services and contribution to TQM. After a fourteen year stint at the ITT, Crosby started his own consultancy firm and quality college known as Philip Crosby Association. Crosby was the person who introduced the concept of zero defects, which translated to "doing things right the first time". Crosby defined quality as conformance to requirements based on customers' needs. He introduced the cornerstones of his quality approach, known as the 'four absolutes'. These are: 1. The definition of quality is conformance to requirements. 2. The system of quality is prevention, not appraisal. 3. The quality performance standard is zero defects. 4. The measurement of quality is the price of non-conformance.

Crosby laid emphasis in early prevention rather than detection of defects or errors. He advocated that by training employees to operate processes as designed will improve quality along with reducing the cost of non conformance. Phil Crosby also introduced a 14 step approach to improve quality: (Total Quality Management: Text with Cases, J.S. Oakland)

1. Make it clear that management is committed to quality. 2. Set up quality improvement teams with representatives of the team drawn from each department. 3. Identify where current and potential non conformance problems come from. 4. Evaluate the cost of quality and explain its use as a management tool. 5. Raise the quality awareness and personal concern of all employees. 6. Take actions to correct problems identified through previous steps. 7. Establish a committee for the zero defects program. 8. Train supervisors to actively carry out their part of the quality improvement program. 9. Hold a 'zero defects day' to let all employees realize that there has been a change.

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10. Encourage individuals to establish improvement goals for themselves and their groups. 11. Encourage employees to communicate to management the obstacles they face in attaining their improvement goals. 12. Recognize and appreciate those who participate. 13. Establish quality councils to communicate on a regular basis. 14. Do it all over again to emphasize that the quality improvement program never ends. Kaoru Ishikawa Kaoru Ishikawa is another guru associated with TQM. He is believed to be the inventor of the quality circle approach. Ishikawa introduced the concept of company wide quality control (CWQC) in Japan during 1955-1960. According to him, CWQC implies that quality not only means the quality of product but also of after sales service, quality of management, the company itself and the human life. Such an approach ensures the participation of all employees, from top management to downstream workers.

Ishikawa contributed a lot to quality control by simplifying the usage of statistical methods for quality control. He publicized many tools and techniques for analysis and problem solving like the seven quality tools, and he created the Ishikawa Diagram, also known as the Fishbone Diagram. (These tools will be discussed in detail in Chapter 4- Quality Management Systems and Tools) Ishikawa's quality control method produces the following results: 1. Improvement in product quality, reduction in defects 2. Reduction in waste and rework 3. Reduction in costs 4. Reduction in inspection and testing costs 5. Expansion of sales market 6. Improvement in interdepartmental relations 7. Open atmosphere for discussion and meetings 8. Improvement in human relations Shigeo Shingo Shigeo Shingo has made very significant contributions to quality management. His principles and ideas of quality revolved around reducing the cost of manufacturing. He made a huge impact in the
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way manufacturing was looked at in Japan which in turn also impacted quality manufacturing in the West. The essential principles of his manufacturing techniques emphasized on reducing the cost of manufacturing while at the same time maintaining higher quality standards and reducing defects. This resulted in manufacturing of large number of innovative products using less manpower backed by the idea of continuous improvement through involvement of all employees.

Shingo was working in Toyota as an industrial engineer when he started developing the Poka Yoke technique and source inspection systems. Poka Yoke, which is Japanese for error proofing, is a technique used to prevent special causes that give rise to defects. The word Poka means inadvertent errors and Yokero means to avoid. Error-proofing is based on the principles of reality which comprehends that not even a small number of defects are acceptable.

Poka Yoke is a mechanism that prevents a mistake from being made. It is done by eliminating or hugely reducing the opportunity for an error, or to make the error so obvious at the first glance, that the defect reaching the customer is almost impossible. Poka Yoke creates the actions that have the ability to eliminate mistakes, errors, and defects in everyday processes and activities. In other words, it is used to prevent causes that give rise to defects. Mistakes are not converted to defects if the errors are discovered and eradicated beforehand.

An analysis of the cause-and-effect relationship of a defect is the first step towards the mechanism of Poka Yoke. Then, a remedy that wipes out the occurrence of the mistakes that lead to that defect is applied.

Poka Yoke can be done in two ways: The Type-1 corrective action, or detection at source, usually believed to be the most effective form of process control, is a type of control which when applied to a process eliminates the possibility of an error condition from occurring. This can be done at every stage of the process, by observing potential error sources. In this way, defects are corrected at source rather than when the product is ready for the customer. The second most effective type of control is the Type-2 corrective action, also known as the detection application method. This is a control that discovers when an error occurs and stops the process flow or shuts down the equipment so that the defect cannot move forward. Thus Poka Yoke devices had the ability of reducing defects to 'zero'. This technique also reduced the need for statistical sampling, which left the workers more time to focus on activities like knowing potential error sources. A key aspect which Shingo highlighted on was good engineering and process investigation for implementing zero defects. He, like Deming and Juran, was also of the opinion that display of improvement statistics is far more encouraging to employees than slogans and exhortations on the number of defects.

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1.9 Comparison of TQM with Traditional Management Practices In the early days of manufacturing, a decision to accept or reject a particular work was taken when an operator's work was examined. Full time inspection jobs came into existence with the expansion of businesses. Gradually, the quality control department came into being and the standards, training, recording of data and accuracy of measuring equipment changed. The TQM gurus described how all employees, from top management to the workers must study and participate in quality control. A comparison between TQM and the Traditional Management practices is drawn below.

TQM approach is entirely based on customer satisfaction. All the important decisions are taken based on customer preferences and services and processes can be modified to meet those preferences as well as possible. However, in the Traditional Management approach, the products and services which are valuable to the company are preferred. Moreover, TQM is based on extensive research and data collection and decisions are taken based on the analysis of this data. On the contrary, traditional management systems take the decision first and then see if it works in favor or against them. Both traditional management and TQM are associated with the rate of improvement. The difference, however, lies in the duration of improvement. While the goal of TQM is continuous improvement, the goal of Traditional Management is to maintain the current position of the company and changes are only made as a reaction to crisis. Traditional Management believes in taking big leaps in situations of crisis unlike in TQM where small improvements might be made everyday. Elimination of waste and thus saving on costs and time is one of the most important goals of TQM. Traditional Management practices, on the other hand, consider waste to be a part of the process. Traditional organizations are divided into further divisions which work independently and without involvement of the other divisions. There is very little communication among the employees and in different levels of hierarchy. The flow of information is from top to bottom. TQM organizations, on the other hand, work as crossfunctional units which work in close cooperation with each other. Teams can be appointed for special purposes with representation from a number of levels in the organization. There is a flow of information irrespective of the level. It can either flow horizontal or vertical. The most remarkable difference between TQM and the Traditional Management practices, however, is the involvement of employees in the decision making process. TQM lays emphasis on employee participation. TQM treats each employee as a part of a larger system and therefore each employee is expected to make improvements in the organization. The Traditional Management practices, on the contrary do not involve all employees in the decision making. Each employee performs a particular role and only has the power to make alterations in that role.

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Chapter 2 - Important Aspects and Principles of TQM

2 Important Aspects and Principles of TQM Introduction It is very important to identify the customer and his needs because it is the customer who is and will remain the core element for an organization in the long run. TQM is a structured system that helps in improving the quality of products, processes and resources of an organization for customer satisfaction, employee satisfaction and for continuous improvement. The main objective of TQM, that is, customer satisfaction can only be sustained through continuous improvement. A. Important Aspects of TQM

The four important aspects of a TQM philosophy are: Commitment to Customers Gathering and Analyzing Data Human Resource Management Continuous Improvement

These four aspects have been discussed at length in the next few pages. 2.1 Commitment to Customers The aspect of Commitment to Customers focuses on customer needs, customer satisfaction and the things that would 'delight' them. A Company should constantly provide the customers with new 'delighters' and provide customer satisfaction as these are two vital aspects of Total Quality Management. Delighters These are hidden attributes which delight the customer and lead to high levels of satisfaction if they are present, but do not cause any dissatisfaction if the product lacks this feature. These 'delighters' are the surprise elements in the product and Companies can use this attribute to set their product apart from their competitors. In course of time, as expectations rise, today's delighters become tomorrow's basics. For example, a car with an inbuilt television can be today's delighter, but can be a basic tomorrow. In order to survive cut-throat competition, and to lead in the market, Companies need to be constantly
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innovative and research the current level of quality that the customers desire to meet customer expectations. Some top Companies not only provide quality products, but also give extra service to make their customers feel important and valued. Inclusion of one or more delighters will provide stiff competition to similar players. Customer Satisfaction

The customers are the main focus of any organization. It is very important to streamline the demands of the customers. The aspect of Commitment to Customers emphasizes on measuring customer satisfaction. Customer satisfaction not only rests in the quality of the product but also in such services as the ordering procedure, delivery, mode of payment and after sales services. It is very important to make changes in the products, processes or services keeping the customers' demand in mind. The data collected from customer satisfaction surveys are useful in determining customer demands and the performance of the product. However, it is also very important to mould the way the processes will be carried out or the way the products and services will be manufactured keeping in mind the organization goals. A customer views a product from the point of view of its usefulness, price and quality. A product or a service that has no relevance for the customer is not of any use for the organization. Customer satisfaction is the biggest accomplishment for any organization and without it; no project can achieve its desired end. The customers should be pampered so much that they do not feel the need to go to the competitor. It is very important to pay heed to each customer's needs and he/she should be made to feel that he is important and his/her opinion is valued. His problem should be resolved at the first go in the best possible manner. If the customers know that they are valuable for the organization they would certainly help improve business and increase sales. Quality Cannot be Compromised Quality is considered to be the most important attribute of production, operations and services by producers, customers and consumers. Total Quality Management does not just increase productivity, raise standards, improve processes, increase motivation, improve customer satisfaction but also helps in lowering costs and increasing savings as far as operating costs are concerned. In other words, TQM ensures quality at the most effective costs. Quality concerns need to be checked in order to turn these concerns into improvement opportunities. Even a minor issue with quality can be annoying for a customer and customer dissatisfaction can lead to a loss in goodwill. Customer dissatisfaction increases the costs in two ways-first in analyzing what has gone wrong and second in trying to put things in place. Moreover, such disappointing experiences can influence a business performance and lead to deterioration in the market share.

Quality is one attribute which cannot be negotiated. If a customer is lost due to the non-conformance of quality, he is lost forever. The costs of quality are the same as that of profitability.

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Relationship with Internal and External Customers A process is a sequence of events that lead to an output. A good business process is one where a coordinated effort produces great results. It is a mixture of several parts which include raw materials, resources, manpower, and roles and actions to accomplish a certain task effectively and efficiently. In other words, a good performance is one when a process adds value to an input and when the outputs are considered valuable by the customers. It is in an organization's interest to work with suppliers to produce high quality goods and services. Supply Chain Management The term Supply Chain Management was invented by Keith Oliver, of Strategy Consulting Firm, Booz Allen Hamilton in 1982. The Supply Chain Management is the process of planning, executing and managing the actions of the supply chain. Supply Chain Management helps to satisfy the requirements of the internal as well as the external customers as best as possible. A supply chain constitutes the movement and storage of the reserves, supplies and finished goods from the point-of-origin to the point-of-consumption.

Supply Chain Management is the management of materials as they move in a process from a dealer to a producer to the wholesaler to the seller and finally to the customer. It is about synchronizing and amalgamating these flows both within and among companies. The Supply Chain Management treats customers and suppliers as trading partners whose success would depend on the entire supply chain. There are two kinds of suppliers in an organization and it is important to keep both of them satisfied. External Suppliers An external supplier is someone who directly sells the products or services required by a business enterprise. It is important to provide clear instructions to the external suppliers so that they can supply the good quality goods or services that an organization is looking for. At the same time, the organization should also satisfy the suppliers by paying them reasonably and in time. Internal Suppliers An internal supplier or support service is a group in the distribution channel which supplies processes, products and services and assists other operations to function effectively and efficiently in the organization. Their services include information and data processing services, research and development and housekeeping among others. People involved in each process have to treat those next in the process as their customer. In addition to the external customer, every activity in the factory has an internal customer. The service to the internal customer is the one which will help gear up the organization to finally deliver the required service to the customer. The internal suppliers can be kept satisfied with the aid of clear instructions, by equipping them with the tools they require to do their work with and by providing them good working conditions. The employees must be kept motivated with a reasonable remuneration and with rewards and recognition. Labor costs can be reduced by increasing efficiency, and the cost of materials can be reduced by
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educating the suppliers. The Just in Time systems work the best when the suppliers deliver small batches. If the lead time (the time between placement of an order and its delivery) is long, then it will hinder the internal time reductions. According to Walker (2001), the largest barrier to successful supply management is the lack of trust between the trading partners. An example of this is the purchasing department which tries to squeeze in concessions from the suppliers. This creates distrust and makes it defective. Some of the reasons that make a supply chain defective are lack of communication and sub optimization. It is important to manage the supply chain to reduce the cycle time. The supply chain should be planned and implemented and there should be coordination in the supply system. These days, the customers are aware and they want the delivery to be on time. Moreover, reduced cycle time is good for the organization as it leads to cost savings and optimization of resources. The focus of TQM is harmony, not competition or adversarial relations. Customer satisfaction can only be achieved when all supervisors and subordinates function as a team. Quality improves customer satisfaction because it reduces costs and keeps customers happy. Even in a recession customers prefer quality goods and services.

2.2 Gathering and Analyzing Data It is very important to possess knowledge about the current quality standards in order to improve the quality of business processes. A process is a sequence of events that lead to an output. A business process is a coordinated effort that can produce great results. It is a mixture of several parts which include raw materials, resources, manpower and roles and actions to accomplish a certain task. In other words, a process adds value to an input. A process is ongoing and this is what leads to production of goods and services.

By measuring the current quality standards of the work and processes, you can focus both on the customer needs as well as the requirements of the employees. However, this is also a fact that all processes vary naturally and one of the characteristics of a quality management process is to reduce this variability. If the chain of processes is made efficient and effective, then the resulting products or services will also be efficient and effective. Total Quality Management relies on collection and analysis of the process data. Data can be collected through various methods which include customer surveys and tracking and documentation of any important data. TQM provides a rational basis for making decisions. The data (after collection) is provided in the hands of those people who are in the best position to analyze it and can take appropriate measures to reduce costs and prevent nonconformance.(Data collection tools have been discussed in detail in Chapter 4, Quality Management Systems and Tools).

Another important aspect of TQM, that is, continuous improvement, motivates the employees to surpass the current level of performance. Continuous improvement can only be accomplished once the data has been collected and analyzed, through constant experimentation, through learning from mistakes, and through dissemination of information throughout the organization.
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Employee performance and variation in the processes can be measured through such methods as Statistical Process Control (SPC), Design of Experiments (DOE) and Failure Modes and Effects Analysis (FMEA) which have been discussed in the subsequent chapters. 2.3 Human Resource Management People or human resources play a significant role in an organization. People create quality. A successful TQM environment needs a committed and well-trained work force that participates fully in quality improvement activities. If the people (employees) in an organization have a clear understanding of their roles and responsibilities and they are constantly upgraded about their performance, they can be motivated to take responsibility of the quality of their own work, to communicate more effectively and act creatively. The more the employees feel involved, the more committed will they be towards achieving the goal of customer satisfaction. Constant education and training of all employees is mandatory to enhance the quality. It is important to establish successful internal professional relations so that the needs of the external customers can be satisfied. The speed, efficiency and accuracy of the employees should be kept in mind to improve customer satisfaction of the customers. Involvement of the employees can be reinforced by reward and recognitions which highlight the importance of achieving quality objectives.

The Role of Higher Management For the TQM to be successful, higher management should be : Committed to the development and implementation of the quality program at every level of the company. The leaders in the organization should lead by example and exhibit commitment towards work. The leaders should be accessible and involve the other employees in the communication process to spread knowledge, awareness and understanding. The higher management must set clear quality goals which are in sync with the objectives of the company. It is also the responsibility of the higher management to create and deploy well defined systems and methods for accomplishing those goals.

Employee Motivation It is very important to empower the workers to make decisions regarding the things they can control. It lessens the load of the higher authority as well as motivates the employees to work efficiently. Motivation and appreciation of the quality control activities is of prime importance. Mistakes should be reckoned with knowledge and not condemnation. Autonomy to Employees An individual alone cannot control the quality problems within an organization. The system can prove to be an impediment even if an individual is doing a good job. For instance, a worker may be working
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very hard. However, if the machine is not working properly, he would not be able to produce great results. Motivation is not a solution to such a problem. Therefore, the higher authority must make sure that everything required is in place so that the employees can create quality. This kind of cooperation from the higher authority can create such an environment where the people (employees) agree to take responsibility of their work. Recognizing every employee's talent in this way can bring a culture change in the organization. Documentation of crucial work processes and provision of necessary tools and resources can also minimize wastage and increase efficiency. Giving autonomy to the employees, however, does not mean that the management hands over the entire responsibility and completely entrusts decision making to the employees without holding them accountable. Working in Teams Working in teams can be a great prospect for people to work together and achieve the goal of quality improvement. Team work can aid communication between people, departments and business processes. Team work helps in overcoming the barriers of communication and acts as an agent of change. Working in teams can make people identify and solve cross functional or cross departmental issues. Team work also helps embrace new ways of doing things. It can also reduce the turnover and absenteeism in the organization.

2.4 Continuous Improvement Total Quality Management is a long term activity which does not end once a project gets completed. TQM is a continuous improvement process. TQM works on the premise that the customers want an organization to upgrade on a regular basis. Continuous improvement should be included in the routine of TQM and not be considered a step forward. An organization should never get contented with the method used because there is always scope for improvement. Competitors are always striving to keep ahead of time. So, the one of the prominent goals of an organization should be continuous improvement. The improvement in terms of all aspects including capabilities, people, processes and technology should be continuous. Elimination of waste is one of the main constituents of the continuous improvement approach. The continuous improvement approach also stresses on prevention rather than detection and also strives to improve quality by using methods just as just-in time production, variability reduction and poka-yoke that can improve processes and reduce waste. The PDCA cycle is among the most widely used tools for continuous improvement. It is also referred to as "Shewhart Cycle" or "Deming Cycle". This is so because the model was developed by Walter Shewhart in the 1930's and later used by W. Edwards Deming in the 1950's. PDCA, also referred to as "Deming Wheel" is an active model that never ends and consistently strives to improve the process. It is like a vicious circle in which one act leads to the other but there is no end to continuous improvements. Kaizen Kaizen is a philosophy which strives for continuous improvement. The term originated in Japan and is
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applied to all aspects of life there. However, it has become a very popular tool and is applied both in manufacturing and service industries. One of the committed followers of Kaizen includes Toyota. Kaizen approach believes in making minor improvements in ongoing processes and does not concern itself in making major changes. The idea of Kaizen is to optimize existing processes. The basic aim is to persuade organizations to achieve quick, transparent, and sustainable processes. The term is generally used for business processes in the United States of America. Kaizen became a fad in the business world when it was first introduced to the corporate world by Masaaki Imai through his book Kaizen: The Key to Japan's Competitive Success in 1986. The book was translated in fourteen languages. Imai soon realized that the concept was not being executed in a proper fashion. So, he introduced an advanced form of kaizen in his book Gemba Kaizen: A Commonsense, Low-Cost Approach to Management. Through this book, Imai stressed the significance of the shop floor to bring about continuous improvement in an organization. There are two mechanisms in any given organization- process improvement and process control. Control means to sustain the current improved performance of the process. If there are no indications regarding the deviation in the performance of the process, then standard operating procedures (SOPs) are considered. On the other hand, improvement implies conducting experiments and altering the performance to produce better results. When the improvement is made, the SOPs are altered and a new way of doing things is established. According to Imai (1986) the job responsibilities regarding the improvement and maintenance of a process are divided according to the level of position held by personnel in the organization. The figure below represents how and where Kaizen fits in an organizational hierarchy.

In the figure drawn above, there is a portion which goes beyond Kaizen. It is a point of radical innovation. This is where Lean Thinking relates to Six Sigma. The figure drawn below illustrates the
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point.

Positions and Responsibilities 1.Top Management They should be determined to introduce Kaizen as a corporate strategy They allocate resources and support and give direction to Kaizen efforts They develop policy for Kaizen and cross-functional activities They help to achieve the goals set through Kaizen policy deployment and audits They build systems, procedures and structures which are favorable for Kaizen 2.Middle Management They help to deploy and execute the policies of Kaizen according to the directions given by the top management They make use of Kaizen in functional capabilities They setup, preserve and improve standards and staff They provide training to the staff and make them 'Kaizen-conscious' They help employees to develop skills and tools for problem-solving 3.Supervisors They make use of Kaizen in functional roles They make plans related to Kaizen and give a direction to the customers They motivate the workers by communicating with them
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They help to maintain discipline They provide suggestions for Kaizen They support small group activities 4.Workers They take on Kaizen with the help of the suggestion system and small group activities They follow discipline They engage in continuous self-development activities They increase their skills and performance expertise with cross education Conclusion The principles of Total Quality Management seek to satisfy the external customer with quality goods and services, an organization's internal customers (employees) by empowering them; an organization's external and internal suppliers; and help to continuously improve processes by working smarter and using special quality improvement methods.

2.5 TQM and ISO 9000 In order to understand the link between Total Quality Management and ISO 9000 quality management standards, you need to understand what ISO 9000 is. In this way, the common attributes between the two can be better understood. ISO 9000 is essentially a starting point towards implementing TQM in an organization. ISO 9000 can be said to be one of the tools to achieve the quality objectives in an organization. What is ISO 9000? ISO 9000 is a generic name applied to an international family of standards created to provide a framework for implementation of quality management systems. ISO 9000 has been developed and maintained by ISO (International Organization for Standardization) in Geneva, Switzerland and have undergone updating many times. It is applied to a Company's procedures and systems to ensure quality assurance and quality management. The ISO 9000 family, which focuses on quality management, is one of the most well known quality standards. They are essentially an international standard on good management practices, to assist companies to document the elements they require to sustain an efficient quality system. ISO 9000 standards align the organization to meet regulatory requirements, and achieve continual improvement. In this way, they ensure that an organization can satisfy customers' quality requirements by consistently delivering goods and services. The ISO 9000 series is a certificate of conformance to standards. For example, any company has the right to publicly announce that it is "ISO 9001 certified" if it has been certified and audited to be in
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adherence with ISO 9001 standards. Compliance to ISO 9000 standards is not a complete guarantee of quality of products and services, but it is a definite first step towards quality improvement. These standards ensure a workable quality system. The ISO 9000 Series in Brief The ISO 9000 family of quality standards has recently been revised. The ISO 9000 family now includes the following standards: In today's competitive atmosphere, companies need to give a commitment to quality to its customers to stay afloat in the market. Therefore, more and more Companies are using quality management systems like ISO 9000 as a business tool to ensure profitability and efficiency in the long term. 1. ISO 9000:2000(Fundamentals and Vocabulary) - This part provides an understanding of the basic definitions and terminology of quality management systems and the core language of the ISO 9000 series of standards. 2. ISO 9001:2000 (Quality Management Systems-Requirements) - This part covers the requirements that a Company needs to fulfill in order to meet customer requirements through production of consistent good quality products and services. These standards are used to evaluate a Company's ability to deliver customer satisfaction. This is the only standard against which third party certification can be awarded. Some requirements of ISO 9001:2000 include: A set of standards or procedures which is applicable to all the main processes in the business Maintaining records of processes Monitoring work in process Inspecting output for defects, and advising remedial action wherever necessary Regular assessment of the quality system itself Facilitating continuous improvement A quality management system adhering to ISO 9001:2000 standards will supply the organization with a set of practices which will ensure consistency and efficiency in the way processes work, thus guaranteeing customer satisfaction. 3. ISO 9004:2000 (Quality Management Systems - Guidelines for performance improvements) - This part provides guidelines on what could be done to improve an existing system; in other words, it provides guidelines for continuous improvement of the quality management system. (Note: For more information on ISO 9000 standards, log onto: http://www.iso.org/iso/home.htm) Advantages of Implementing ISO 9000 According to Wade and Barnes, "ISO 9000 guidelines provide a comprehensive model for quality
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management systems that can make any Company competitive." Many Companies internationally have introduced ISO 9000 quality management standards in their systems. Clearly, the advantages can be summed up as the following: Standardizes and organizes operations so that they become more effective and efficient Improves the performance of processes continually Provides a disciplined way of managing resources Improves all aspects of business because of systematic use of statistical data and analysis Improves customer satisfaction and customer loyalty Increases revenue through wider market base, international trade Reduces audits Quick elimination of non-conformances by early detection Reduces costs by eliminating - repetition, defect management, warranty costs etc. Improves employee morale and motivation ISO 9000 and Total Quality Management TQM and ISO 9000 are fundamentally different, in the sense that TQM is an older and wider concept and makes sure organizations 'do the right thing'. TQM embraces adherence to standards like ISO 9000 as one of the methods to improve the manner of running the business. When a Company adopts TQM, it should consider complying with ISO 9000 standards as a primary step towards improving business activity, thus achieving total quality. A lot of Companies need to comply with ISO 9000 standards for some of their suppliers. For many Companies, it is a minimum requirement to gain entry into the market. Operating Principle of ISO 9000 Standards The PDCA cycle or The Deming Wheel or The Shewart Cycle is said to be the operating principle behind ISO 9000 system standards. The PDCA cycle is explained in brief: PLAN- Set objectives and make plans. DO- Implement those plans. CHECK- Measure your current performance against planned objectives. ACT- Correct outcome for necessary improvement, and improve plans for next implementation.

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2.6 Elements of a TQM Organizational System On the basis of understanding of the meaning, important concepts and principles of TQM, some of the important elements of a TQM organizational system are listed below. Continuous Improvement Continuous improvement is one of the most important goals of TQM. TQM organizations are always on the lookout for new methods to enhance the quality and efficiency of processes. The collection and analysis of customer needs data is constantly aimed at searching for areas of improvement. In fact, one of the main goals of TQM is identification and prevention of errors at the basic level. TQM does not work in an environment of duplicity. It strives for providing the best quality products and services. TQM is totally customer focused. Customer is the one who ultimately determines the level of quality in a TQM environment. The efforts put in by an organization in the form of training employees, integrating quality into the design process or buying new measurement tools will only be considered worthwhile if it is considered so by the customers. Leadership Leadership from the higher management acts as the support system of a TQM organizational system. Leaders include senior executives, managers, team leaders and facilitators. Success in business requires a commitment and personal involvement from the leaders. Trainers are important to implement the TQM programs in an organization. They provide on the job training for improvement tools and techniques as well as job skills. Employees are trained during the development of a TQM program so that they can become efficient. Apart from the leaders, employees are also empowered to make important decisions in a TQM environment. Teams Teams are essential for the success of a TQM program. Self- managed work teams are one of the forms of employee empowerment. People work towards a common goal when they work in a team. Teamwork takes out the best in people as they try to improve their performance as well as improve processes. Teams facilitate better decision making, more participation and connect the employees of the organization to each other. Businesses receive quicker and better solutions to problems from employees working in teams. Communication Communication is an important element for any organization to function efficiently. Effective communication can save time and money. It can act as an important link between all the elements of TQM. Communication can either be vertical or horizontal and can happen through internet, intranet or telephone or can even be face to face. The credibility of information depends on clear communication. Communication can play a major role in maintaining morale and motivating employees at all levels.

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Conclusion All the above mentioned elements are important for the success of a TQM environment. Correct guidance of the leaders, continuous improvement and effective communication are very important to bring in efficiency and create quality. 2.7 Elements of a Quality Cost System Quality costs are the costs related to locating and preventing errors. Quality cost categories are a blend of quality cost elements which include detailed functions, tasks, or expenses. Quality cost elements vary for every industry. According to Harrington, there are four kinds of quality costs which include: 1. Prevention Costs Prevention costs are the costs spent on preventing errors from happening in processes. Quality planning and housekeeping are instances of elements of prevention costs. 2. Appraisal Costs Appraisal costs include the costs expended while assessing the output and while a review is being done to measure the processes. Appraisal costs include elements like process controls and customer satisfaction surveys. 3. Internal Failure Costs Internal failure costs include the costs expended by an organization due to the errors that occur before the product or service is supplied to an organization's customer. Rework, rejects and failure reports can all be elements of internal failure. 4. External Failure Costs External failure costs are the costs expended by an organization when the customer receives unacceptable products or services. Customer dissatisfaction, product recalls and expenditures on warranty can be elements of external failure. Therefore, Total Cost of Quality = Prevention costs + Appraisal costs + Internal failure costs + External failure costs The above mentioned quality costs adversely affect 20%-40% of total sales. They can either be drastically reduced or completely avoided. Quality cost data can be used for a variety of purposes which include measurement of processes, for analysis of problems and for budgeting. The quality cost system helps the management to determine if its resources are properly allocated. This system also helps to guide the management in guiding them to improve quality. The management should have a goal to reduce the cost of quality by at least 10% every year. A realistic assessment of the reasons for current quality cost elements should be made and an improvement plan should be chalked out on the basis of this assessment.
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Chapter 3 - Paving the Way Organizational Transition to TQM

3 Paving the Way for Organizational Transition to TQM Introduction

for

A properly documented Quality Management System not only aids an organization to attain its policies and bottom line goals, but also to hold the improvements and build upon them. An organization's leadership interested in making it a quality organization has to take charge in creating such a system. This chapter will provide you the framework around which a quality management system can be planned, communicated, organized and implemented in an organization. Planning the quality management process is the first step towards orienting your organization towards a quality management framework. The following are the main details to be chalked out in order to plan a change to TQM. 1. What are the commitments, i.e., missions, aims, and objectives that have to be achieved in the long run? 2. How will leadership be organized for this change in culture? 3. What will be the strategies and policies for total quality? 4. How will these plans and policies be communicated to staff, suppliers and customers? 5. How will the Total Quality Management system be implemented in the organization? 6. How will the performance be measured after implementing it in the organization. 7. What will be the framework for assessing self improvement? In most organizations, these responsibilities for planning will be assumed by the senior management or an executive team specially created for overseeing quality activity.

3.1 Building a Quality Framework 1. Commitment to Total Quality Every organization needs to define what Total Quality Management means to them. Whatever may be the specific nature of the organization, a commitment to total quality is required if it wants to remain competitive and successful. Quality management requires more than the involvement of the Quality Assurance or the Quality Control department, as many organizations are likely to believe. The traditional approach to quality problems was the detection/inspection system, which was a temporary fix. The same problems were
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prone to occur again because the root causes, the intrinsic problems were not addressed. Companies have to realize that quality problems arise not only from product processes, but also from administrative, commercial and service areas. The implementation of TQM requires a shift from detection to 'prevention' modes of quality control and management. Commitment to TQM originates from the chief executive level. TQM requires a concerted approach from the management that needs to recognize the value of quality in order to reap rewards. The competitive nature of the market necessitates that management develop a strategic overview and commitment towards development of a TQM framework to sustain their share in the market. Commitment to quality involves every employee, every department and every process to satisfy customer needs. Most people of the organization have to go through a complete culture change and overcome the many barriers to change to overcome quality problems. Employees need to undergo a shift in their working culture, they need to be trained on how to rearrange their time and efforts in examining their processes, identify root problems and correct the causes of problems; instead of detecting the problems or rejecting the failed items after the process is complete or the product is produced. Every organization has to define policies for the achievement of total quality. Implementing adequate quality management requires that the senior management be clear about the basic objective of the organization 1. Which business the organization is involved in? 2. Which distinctive quality or competence the Company should concentrate their efforts on? 3. How will they go about the business? Once the bottom line goal is clear, the organization has to formulate a set of objectives that they aim to achieve through TQM. These may include: Cutting costs and increasing profitability Assessing costs arising out of defects, errors, customer complaints, lost sales etc. Prevention of waste Ensuring quality at the design stage Achieving excellence in products and business Reviewing the Company's present quality management systems- Do documentation systems, processes, and operating systems need review? Continuous training and education of employees Motivating employees to do work right the first time Total culture change through behavior and attitudes towards working Associated improvements in operational safety, work health and environment
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2. Creating and Changing the Culture Creating a culture to become a total quality organization means creating a style of management, and implementing a set of actions that becomes the organization's intrinsic manner of operation. It means gradually merging the organization with an environment favorable for continuous improvement. The organization needs to integrate quality assurance into all processes and functions. The management and senior executives in a Company desiring to improve quality in their organization have to create an atmosphere where traditional management practices have been noticeably changed. An organization cannot be on the path to total quality if quick fixes and easy solutions like focus on problems, quality circles, customer care programs etc. are applied. TQM will work only if the two components - a total culture change and a project by project approach are combined together and applied in the operation. A total culture change involves changing through a systematic process the behavior and mindsets of the people at all levels of hierarchy. The middle level executives and staff have to be taught how to overcome resistance to change in order to imbibe the culture change. Changing the culture to total quality involves: 1. Recognition that change is continuous and must be integrated in the culture of the organization 2. Developing and reviewing all customer supplier relation scenarios consistently 3. Ensuring participation of all members through teamwork at all levels, and at all stages of the improvement process 4. Continuous education and training to be reflected in attitudes, actions and conduct and increase in knowledge base 5. Focus on the long term and the evolving nature of business

3. Leadership Leadership is a necessary condition for introducing TQM. Without the total commitment of the CEO and other senior managers, permanent change will not occur. The senior management will have to take the bull by its horns. They have to get involved personally in TQM. They have to direct, streamline processes, impose their leadership on employees and guide the improvement efforts. It is the leadership's prerogative to facilitate teamwork, squeeze the best out of their employees, and win profits for the organization. They have to outline quality goals, quality policies, and quality plans. Management may define quality goals as satisfaction of external customers. Quality policies define the means or methods of reaching the quality goals. These two have to be followed up by formal quality plans. Quality audits are an integral part of TQM and leadership has to actively participate in quality audits to be aware of quality problems and guide corrective action.

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In order to introduce TQM successfully, management has to answer the following questions: Where are we now? Where do we want to be? How do we get there? The Japanese strategies for world leadership in quality can be summed up as follows: (Juran, 1989) 1. 2. 3. 4. The upper managers take charge of quality. The entire hierarchy is trained in how to manage quality. Quality improvement is undertaken at a revolutionary rate. Quality circle concept enables the work force to participate in the quality revolution

Employee Empowerment Quality starts with people. Empowerment is a keyword in TQM. Leadership must understand that employees are indispensable to the organization and they cannot be ignored while making necessary organizational changes. Empowerment means allocating responsibility right from the top level executives to the lower level managers and supervisors. Employee empowerment has a positive effect on motivation, satisfaction, and performance. Many middle level managers think that empowerment might lead them to lose their authority. Most resistance to empowerment therefore emanates from the middle management. But this can be overcome by effective management and evaluation of team performance. Empowering the employees helps them develop good relationships with the higher management, encourages teamwork and motivates them to make continuous improvement efforts. This is the stage where the progression towards quality improvement is made. Employees should be involved in rootcause analysis, corrective action, process measurements and making improvements. People empowerment can be explained with the help of an 'empowerment hierarchy' pyramid: Suggestion groups form the bottom of the hierarchy. This group can suggest ideas and voice their opinions on the improvement efforts taken up in their functional area of expertise, but the final decision lies with the management. Problem solving groups form the middle of the pyramid. People in this group work on work process related problems on a daily basis. Self managing groups, as the name suggests, are permanent teams and make independent decisions on a number of work unit related problems. Role of Senior Management in Implementing Quality It is the senior management who has to create the strategic atmosphere and organizational environment for TQM to thrive. They have to ensure that resources are provided and directed towards building a quality management system. The CEO has to get personally involved and has to spread the knowledge and clear the air about any
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misconceptions regarding TQM to his senior managers. He also must exhibit patience and believe that TQM is a long term strategy and must not expect immediate financial benefits. The CEO must also ensure an accurate reflection of the needs and expectations of customers to enable the organization to make quality improvements, through performance measures like failure statistics, customer surveys and complaints, lost sales, customer returns, unaccepted tenders, etc. Senior managers must create an atmosphere which promotes teamwork, co-operation and participation from all members in healthy decision making, and effective two way communication. An important responsibility of the top management is to assign the roles and responsibilities to responsible personnel who will assist them in the deployment of total quality management. The responsibility of ensuring that all employees know why the organization is heading towards TQM, and what potential benefits will result in their area or function or process, lies with the senior managers. Senior managers must also realize and accept that there is no single or best way to implement TQM. They need to learn from experience, attend courses and seminars, study about the best practices as far as TQM is concerned, and consult other organizations in the same industry who have introduced TQM successfully. Senior managers must be ready to understand and apply the statistical methods in problem solving and decision making like SPC to make sure that the improvement effort is based on fact and data and not opinion or myth. Their responsibilities can be summed up as: Disseminating the idea of total quality Setting standards like zero failure Monitoring quality performance (quality costs) Introducing a quality system based on 'prevention' rather than detection Introducing process control methods like Statistical Process Control (SPC) Role of Middle Management and First Line Managers The responsibilities of middle managers can be summed up as: Learning the technical skills required to design, implement, assess and change the quality management system directly under their control Communicating the goals and objectives of TQM in a language understandable to people down their line Identifying improvement opportunities and making plans for their respective departments Acting as TQM coach and advisor to employees under their operational control Guaranteeing t hat line managers are trained in the usage and implementation of tools and techniques The first line managers are also known as supervisors or overseers. They are at the front of the improvement efforts. They ensure that the plans are well understood and implemented with rigor by
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the workers at the shop floor levels. Teamwork Teamwork is an important element while building the TQM framework. Leadership has to organize teams and allocate roles like those of team members, team leaders, sponsors and facilitators. Involving teams ensure the commitment and participation of people across departments. Moreover, it is important that people's positive contributions are made public and rewarded. 3.2 The Development Stage 1. Preparing Initial Approach The attenuation of the global market has organizations and Companies vying for a place in the market. Everybody from business and industrial arena is trying to carve a niche for themselves. The customers can choose from a large variety of products and services which are being provided to them at reasonable prices due to stiff competition. Not only is there competition among Companies in the private sector, the service and government sector is also trying to prove its mark. The increased competition has also seen the rise of a number of quality initiatives like Total Quality Management. The various aspects of TQM include customer satisfaction, just in time production, employee empowerment and continuous improvement. It is the responsibility of the higher management to establish the needs of the business and design the system around them. Data related to customer needs, processes, products and services should be analyzed and broken down into key areas. One of the main goals of TQM is involvement of each and every employee (and suppliers and distributors) to improve quality and save costs. Empowering the employees is important to facilitate them to take quick decisions in today's competitive world where customer preferences keep changing frequently. By involving the employees in the problem solving and decision making process, many innovative solutions can come up. Employees can also suggest improvements as far as products, processes and work environment are concerned. 2. Strategic Planning and the Quality Policy It is the senior management who has to create the strategy and develop an environment for the implementation of TQM. A long term strategy for TQM throughout the organization has to be developed. This strategy has to be integrated with the other organizational and business goals like production, IT, human resources etc. The deployment of quality policies and objectives through the organizational hierarchy is an important aspect so that every employee can carry out his work in his functional area with the aim of attaining quality improvement targets. A good way of getting started is to investigate the organization's strength and opportunities for improvement as far as quality is concerned and conduct a self assessment review. This will help to know the progress made with respect to TQM and formulate the future course of action. The planning has to be for the long term, like five years, to ensure TQM securely takes root in the philosophy of the organization. Moreover, there should be an audit system in place to find out if improvement goals are being attained.
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Creating a sound strategy is to pave the ground for performance through stages of What and Hows at all levels of the organization. Many a times there is incongruity between what is planned and what is applied, which leads to failure of the basic strategy itself. Strategies may fail because of the following reasons: 1. 2. 3. 4. 5. 6. 7. They lack concurrence with the Hows. They lack consistency over a period of time. They contradict with desired performance. They do not emphasize and let everybody know the end objective. The objectives of the strategy are misaligned with reality. They emphasize on short term achievements which seldom sustain in the long run. They emphasize very little on the importance of capturing the voice of the customer.

Policy management is the vehicle by which business plans are put together and communicated at all levels of organization. (Gopal K. Kanji) Quality Policy Deployment An approach to strategic planning and introducing TQM in an organization is Quality Policy Deployment (QPD). QPD is a management process that is used to create, communicate, evaluate and update the quality strategy within all levels of the enterprise. QPD is derived from the Japanese system of Hoshin kanri or policy control, and in this system goals and objectives of each department or function originate from the quality policy. It is a long term strategy used to manage quality implementation, spanning a period of 8-10 years. Senior management is responsible for QPD and for communicating QPD at all levels of the organization. The aim of quality policy deployment is to guarantee that quality policies and targets are aligned with the organization's goals. QPD is a process by which congruence of goals at all levels can be reached, and the issues about the Whats and Hows can be solved. The focus stays on sustainability, continuous improvement, optimizing process capability, and adopting the best practices regarding quality. Benchmarking is an important tool in QPD. (Read more on Benchmarking in Chapter 4- Quality Management Systems and Tools) QPD is based on Deming's PDCA (Plan Do Check Act) cycle. It is basically a planning process, wherein factors like service, price, reliability, delivery speed, design cycle time and the like are analyzed and converted into departmental and team objectives. An important element of QPD is that it also incorporates a review mechanism to adjust plan changes, employee feedback and deal with barriers to plan implementation. It is, therefore, a participative form of management. The steps which display a QPD exercise in any organization over a two to three month period are mentioned below. The readers of this course should read these steps carefully to understand the steps involved in QPD. Step 1: In order to define the key objectives of an upcoming QPD, the management of any organization needs to review its existing quality policy in order to identify and prioritize parameters which are critical to the organization. These can range from pricing to supply chain to delivery, and can cover any aspect which the organization feels will impact the end objective directly or indirectly.
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Step 2: The management then defines a plan to make short and long term improvements for the key parameters identified for a longer duration (5 or more years). This ensures sustainability of actions, goals and performance. Step 3: The key parameters identified by the management in Step 1 and the improvement plans developed around them in Step 2 are then shared with the middle management which in turn holds a meeting in order to identify the respective activities within their departments that can impact these objectives. Step 4: Each department ensures that it plans its activities in line with the improvement plan laid down by the management. At the same time the respective departments comment on the defined key parameters so as to communicate their voice to the management. Viability of the goals defined for the parameters and the respective department's opinion on the components of action and strategy for achieving them are crucial elements of communication between the middle and top management during this stage. Step 5: Based on the recommendations and opinions voiced by the middle management, the top management then makes acceptable changes to the original plan and sends it back to all department heads. Step 6: The Departmental heads then communicate the same to their respective teams and conduct seminars within their own departments to chalk out a plan of action, to achieve short and long term objectives for critical parameters as laid out in the plan. The first phase for target setting is ideally kept within 1 to 3 years. Step 7: This is followed by a series of acts of communication of the critical parameters and individual department targets both short and long term, between the Departmental heads, their line managers and through them to all within the respective functions. During these communication meetings all possible hindrances to achieve the laid down implementation of QPD are identified and counter strategies devised. To ensure a thorough review of the defined plan, this entire act is backed by a half yearly review at the corporate level and a quarterly review at the departmental level. These reviews form the basis of the check mechanism and are aimed at assessing the correct and effective implementation of the plan. These reviews also look at re-defining certain policies and procedures to suit and align with the changing times. For a single point of monitoring, it is important that a TQM facilitator be appointed, who besides ensuring the formulation and implementation of a QPD can also act as a coordinator for promoting internal communication of QPD objectives, both vertically and horizontally, within the organization. Management can also seek the help of third party audits to check its progress. QPD thus helps an organization to define common and critical objectives and also helps various sub functions align its short and long term goals with the broader goals of the organization backed by a well defined review mechanism.

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After the Quality Policy is established, top management has to perform a check to see if it meets the following criteria: 1. Is it clear and specific? 2. Is it aligned with the business goals and reflects the core competence of the enterprise? 3. Is it clear enough on what the organization wishes to achieve in the future, in measurable terms? 4. Is it flexible enough to allow adjustments? 5. Is it focused on the central strategy or tries to deal with too many things? 6. Is it attainable? Note: The term QPD is often confused with QFD (Quality Function Deployment). Read more on QFD in Chapter 4- Quality Management Systems and Tools

3.3 Communicating the Quality Strategy 1. Creating Awareness about the Change It is a matter of regret that academicians and business houses still consider TQM as an evolutionary process rather than a revolutionary one. The concepts and principles of TQM are considered to be just some added features which are not mandatory for the organization. Instead of being viewed as a culture change in the organization, TQM is still seen as a combination of some concepts and techniques which can be implemented in the current management practices. One of the primary reasons for failure of TQM projects is lack of communication of the commitment towards TQM. The quality strategy has to be communicated clearly by the leaders so that the vision is accepted by all the stakeholder groups- customers, employees, shareholders and suppliers. The employees should be continuously educated and trained to foster their attitudes, management beliefs and value system so that the change can be easily implemented. Quality management is a digression from the regular tasks in the organization; therefore, it requires an effort on the part of the top management to communicate to the people about how the quality strategy will be deployed. Most people have a fear to adopt things which are new. Communication brings clarity and removes fear related to change. Management has to calculate how the quality policy will impact employee acceptance, reaction and motivation, operating procedures, and technological requirements. The vision of the quality policy deployment has to percolate down to all levels. There should be two way process of communication; of continuing dialogue and feedback, between top management, executives and staff. This ensures continuous improvement at all levels which is a condition for change to total quality. A well defined communication plan has to be in place. The responsibility and development of the communication should be determined at the outset. A TQM communicator responsible for
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communication on quality can be appointed, who will report to the top leadership. An effective way to make policy deployment highly visible at all levels is to display departmental policies, themes and objectives in each unit of the organization. The manager or leader at each level should make a presentation to his staff on the plan targets and improvement goals. Briefings on the strategy on quality will bring in feedback and throw light on attitudes of the workforce. The leader should also clearly demarcate the roles and responsibilities of the personnel and the policies that need to be adopted. He has to determine what will be the frequency of communication with his group, and which communication tool or technique will be used. There are plenty of communication techniques that a modern organization can avail of. Some of them are: Compulsory staff meetings on quality problems, customer complaints and measurement data Team briefings and presentations Quality newsletters, magazines and manuals Updates in the annual report regarding quality Quality review meetings Internet and Intranet Suggestion boxes Discussion forums Lobby displays DVD presentations Telephone hotline Inclusion of the TQM idea in new employee induction programs 2. Creating Consensus It is very difficult to create consensus among the employees for a culture change. An all empowered employee force takes a lot of time and effort to implement. Bringing in a culture change in the organization means crossing barriers like resistance to change, mistrust of the employees and lack of commitment from them. Lack of experience in decision making and in providing inputs to higher management can act as an impediment in bringing in a change. Support and motivation of the higher management is a chief factor to remove mistrust and doubts among the employees. Training and education of the employees also takes place at this stage. The higher management needs to act like action vehicles to drive the change and strategies and infrastructure to enable the change to happen. The leaders should list out the resources needed and discuss the effectiveness of the existing processes with the staff. The pros and cons of each process should be discussed in detail and training should be imparted to the employees if required.
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3.4 Measuring Performance and Feedback This stage of implementation of TQM is the awakening stage where the higher management begins to gather data. The implementation of TQM requires a leader to act as a change agent by playing a major role in the time of a crisis, making a strategic decision or bringing in a culture change in the organization and by successfully stating the objective of change and creating awareness about it. The leaders gather and collect information on improved quality by drafting a plan by keeping customer satisfaction as their new focus. To know that business processes are reaching somewhere, the leaders need to create a baseline against which measurements can be made. There needs to be a set of critical success factors or indicators that can be used as a benchmark for setting improvement standards. These benchmarks should be developed by taking internal and external customer inputs as well as current business measures. This facilitates assessment of feedback against these set standards and devising corrective and improvement action to overcome the gaps in performance. Before you go into detail about performance measurement, you have to be clear about how processes are deployed and how process improvement can be implemented in an organization. Processes Processes are the backbone of all organizations. Processes fuel the organizational machinery by transforming inputs to outputs by adding value to inputs. Processes take place in every department and functional area of the organization, and outputs of some processes act as inputs for other processes. The aim of process outputs of all total quality organizations should be to satisfy and often exceed customer requirements. Understanding processes and improving processes are the main agenda of total quality organizations. The processes should be such that they produce products of the best quality. This is because the quality of the products is directly related to customer satisfaction. The processes should be clear to the employees for them to work effectively, and at the same time, be made keeping the customer demands in mind. The process should, therefore, be looked at from customer's perspective.

How is Process Improvement carried out? Process improvement has to be executed in such a manner that the day to day activities of the organization are not interrupted and the organization has the adequate financial resources at its disposal to carry out the improvement activity. Process improvement can be systematically carried out in the following manner: 1. Identify Process for Improvement The first and most vital step is to identify a number of attainable processes which affect the organization's missions and objectives. The management may give approval on the core processes to
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be improved or those processes can be identified from feedback in the form of customer complaints, customer surveys and focus groups. A number of critical success factors (CSFs) must be defined to measure performance. The top leadership must commit to process improvement by providing the adequate funding. 2. Understand Process Scope The next step is to define the boundaries or scope of the process. Understanding the process scope means understanding the core processes and gaining process sponsorship. The scope demarcates the start and end points of the process, what is to be achieved, where the resources will be sourced from, who will sponsor the process, which tools will be used and within what timelines the goal will be achieved. This step also involves breaking down core processes into sub-processes, activities, tasks and creating improvement teams around these activities. Tools like high level process maps, sub process maps, flowcharts can be used to define the inputs, outputs, and controls and resources of the process. 3. Measure Process Performance Process performance means developing metrics or standards of performance, documenting past performance of the process, comparing this data with the current performance, measuring the gaps in performance, defining new performance standards for future improvement, and agreeing on how performance will be measured, controlled and reviewed in the future. A process performance model should ideally result in understanding the capability of the process to achieve the predefined goals. It also should act as an indicator of customer, both internal and external, supplier and stakeholder expectations of the process or product in question. 4. Review the Process This step involves reviewing the data that has been the subject of analysis in the previous step, and suggesting actions for improvement. It also involves proposing new courses of action for the improved processes and suggestions on how to sustain the improvements. Process improvement tools like Pareto Analysis, Fishbone Diagram, Force Field Analysis etc. are used. A process review results in deciding if continuous improvement action has to be applied to the process or if the process has to be redesigned. The timelines for achieving these is chalked out along with streamlining a control and reporting system, and allocating financial support for the improvement. (Process Improvement Tools will be described in Chapter 4) 5. Imbibe the Process Change Process change means embedding the process improvements permanently into the working of the process by a program of continuous improvement or redesigning the entire process to suit the new environment. A process change also demands that new project plans be made; goals, objectives, roles and deliverables be outlined together with a plan for ongoing training and education for people involved in the process. 6. Capture the Change The change is incorporated into the very culture of the organization and business system. It is the management's responsibility to see that the change is sustained and built upon. Any change effort is
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incomplete without documentation; therefore it is imperative that the new methods and procedures are documented in proper format. The most important aspect of capturing the change is to communicate the change to all concerned parties like customers and stakeholders. An audits and review system also has to be developed to ensure that the improvement effort is heading in the required direction.

What is Performance Measurement? Performance measurement is a vital element in all TQM programs. The Quality strategy is framed for the single reason that the organization satisfies customer requirements more effectively and efficiently than its competitors. Therefore, successful implementation of the quality strategy is improving the performance of the organization in key areas of competence. Measuring performance is necessary to monitor that the desired level of performance is achieved and sustained. All key processes in the company must work towards achieving the goal of customer satisfaction to achieve total quality. To improve the performance of the company in key areas or processes, the operational performance needs to be measured. Performance needs to be measured by improvements that are relevant to the customer. Therefore, it is important to establish the key performance metrics or measures to measure
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performance and to determine whether the process is being implemented in the correct manner. The performance measurement system must be designed so that customer feedback is attained and analyzed for improvement action. There should be appropriate metrics of customer satisfaction. It should be set up at all levels of the organization, ideally as a team activity. The primary purpose of measurement is to judge the levels of performance and to evaluate what, where and how things are happening. Measures are used in process control and process improvement; they are an indicator of how well the processes and people are performing, and in which areas improvement efforts need to be directed. They essentially become a tool or a quality indicator for people who are responsible for improving the processes. Performance measurement, therefore, can be said to be a system that involves process optimization through increased effectiveness and efficiency of the process, through a cycle of continuous improvement, to achieve conformance to customer requirements of the desired product or service. The goal of performance measurement is primarily to assist people concerned in reaching sound decision making in their work processes by reducing and eliminating overall process variation. The participation of all concerned teams or employees is a precondition for the successful implementation of the performance measurement process because ideas originate from people and team effort is reinforced. Therefore, performance measurement is vital in: managing business processes by identifying and pinpointing processes for improvement evaluating if organizational goals are being achieved ensuring that customer requirements are being met telling if processes are in statistical control comparing performance against internal standards comparing performance against the external market providing feedback for steering the improvement effort

3.5 Measuring Performance and Feedback...Continued Technical Definition of a Performance Measure or Metric A performance measure or a metric is composed of two parts- a number and a unit of measure. The number gives the numerical magnitude (how much) and the unit assigns this number a meaning (what). Example Measures can be represented by single dimensional units like hours, nanoseconds, number of accounts opened, number of reports generated, number of rooms cleaned etc.
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Measures can also be represented by multidimensional units like: Number of errors per thousand hours worked, Number of on-time deliveries per total number of vendor, Number of defects per million opportunities Performance measures are always linked to a goal or target. Measures can be broadly classified into internal performance metrics or external performance metrics. Internal performance metrics can be developed on metrics such as: (Managing Quality, B.G.Dale) Non conformance levels Yield results Quality costs Quality audit results Employee satisfaction Employee involvement Service level agreements Percentage of employees satisfied that the organization is a customer focused organization For e.g, Internal process metrics for a Pizza Chain could be baking capacity, order lead time, kitchen inventory, vendor vehicle performance etc. a. Attributes of a Good Performance Measure To measure the performance, it is important that the metric chosen is also the appropriate one. For measures to be effective and to gain acceptance by users, they have to possess certain attributes. TQM will fail if measures do not reflect the actual factors of process performance. Measures can be categorized into three elements: The Human Element The measures used : must be developed by people who are going to use it must be easily understood by their users must be meaningful to those working in and around the process must reflect customers' needs must be interpreted by all in the same manner must be compatible with the rewards and recognition system
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must be so designed that little or no manipulation is possible The Technical Element The measures used : should represent the controllable aspects of a process should represent a relevant factor of process management should be accurate, precise and sensitive to performance changes should focus on what is important in the process rather than measuring a lot of things which do not impact the process The Business Element The measures used : must be objective and timely must measure things that impact customer satisfaction must be result oriented and aligned with business goals, policies and values of the company b. Categories of Performance Measures Performance measures are meant to measure progress. Progress can be measured in the areas of effectiveness, efficiency, productivity, timeliness, quality and safety. Organizations usually develop their own set of metrics to understand current performance. Effectiveness This measure shows the extent to which the process output conforms to predefined requirements, and whether the organization or process owner are achieving the desired results. For e.g., batches manufactured, accounts opened, grade of product, level of service, product cycle time, unit costs etc. It can be described as the percentage actual output over the expected output.

Effectiveness = (actual output/ expected output) x 100 %

Efficiency This measure indicates whether the defined goal is achieved through utilization of minimum or planned resources. As a measure, it is the percentage resource actually used over the resources that were intended to be used. This measure assesses the process system management. Efficiency ratios
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may use labor staff efficiency, inventory efficiency, equipment efficiency, inventory data, throughput yields etc.

Efficiency = (resources actually used/resources planned to be used) x 100% Productivity This measure should be designed to match the process outputs to its inputs. Inputs may be the value of labor and capital used. Productivity = outputs/inputs Expected Productivity = Expected output/Resources expected to be consumed Actual Productivity = Actual output/Resources actually consumed Ratios are tons per man hour, computer output per operator day etc. Timeliness Timeliness measures whether a unit of work has been completed within defined timelines. Timeliness is based on certain pre-defined parameters which in all scenarios are driven by customer requirements. For e.g., speed of delivery etc. Quality This measure defines the exactness of a task/job to defined procedures. These procedures and processes are designed to meet the customer objectives by following a set of tasks which can be quantified and are therefore measurable. Safety This measure can be used to check the overall health of the organization and the working environment of its employees. c. What is the Need for Measurement? Measurement of any activity based on a set of defined rules with a desirable output is an important aspect for TQM. Absence of measure leads to absence of control and any act without control is prone to mismanagement and inefficiency. Lack of measurement also impacts intelligent decision making as the latter is an output of analysis backed by some measurable records. Measurement thus can be used to take care of the following critical elements: Control Measurement helps in controlling unpredictable variation. Self Assessment Measurements can used to evaluate the progress of a task or a set of tasks at any stage of progress.
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This can be used as an input for further action planning. Continuous Improvement Measurements are useful in identifying areas of improvement and to analyze the probable patterns of activities involved in a process. This can be handy in enhancing effectiveness and efficiency and at the same time plugging gaps in the system. Management Assessment Measurements are the only means to ensure that the management has enough know how to evaluate and assess the progress of any activity and to relate it to the planned processes or end goal. This is highly effective when the tasks are stretched over a long duration of time.

3.6 Measuring Performance and Feedback...Continued The Performance Measurement Process A general description of how performance measurement in a process can be implemented is given below. The steps can be summarized as follows: 1. Define the Process Flow: This is one of the most critical steps in defining a process. A proper definition of work flow should be, as far as possible, backed by a mutual agreement amongst all the participants of the process. An awareness of the process flow will thus help the participants to measure it more effectively. Broadly, in the organizational framework, the strategic objective has to be defined. 2. Define an activity/A set of critical activities to be measured: This should also involve a methodology to define individual performance measurement of all the participants in a process. 3. Define Performance Standards: In order to measure the achievement of various tasks or the end result in a process, it is pertinent to define certain value based standards or predefined benchmarks, or what has to be measured. This is the only way to intelligently define the success or failure of a process. 4. Define Performance Measurement: This is an individualistic aspect of the previous aspect where individual performance becomes a scope of measure which collectively impacts the overall progress of a process. 5. Define Ownership: This helps to align an individual or a set of individuals to defined tasks within a process with measurable responsibility of predefined procedures and goals.

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6. Collect Relevant Data: The next logical step is to design a data collection system. Collection of data which is reliable and accurate is an important activity for the beginning of any process. It is important therefore that there is a thorough analysis of the data in the beginning so that the adequacy of the data collection system can be established. The data collection system guarantees that all measurements are collected and stored in the required format and classification, and that the data is easily accessible to the people concerned. Data collection can be done on forms like check sheets and data sheets. (Check Sheets will be discussed in Chapter 4 under Quality Control Tools) 7. Report Actual Performance: The raw data collected in the initial steps has to be given meaning by converting them into performance measures, and presented in meaningful reports. This data is now ready for analysis. 8. Compare Actual Performance with Predefined Goals: In this step, the actual performance of the process is to be compared with the predetermined performance standards. This helps to measure the variation, or the deviation from the standards, if any. 9. Determine Need for Corrective Action: The comparison of the data in the previous step, followed by analysis, will help establish the process shortcomings and if corrective action on the process is necessary. Necessary changes have to be made to align process performance with the standards. The best solution or a set of attainable actions has to be chosen and applied to the process. 10. Establish Need for New Performance Measures: Periodic evaluation and revision of performance standards is necessary to keep pace with the organization's latest processes. Sometimes new performance measures need to be created because the measures used currently may not adequately reflect the improvement that is required of critical processes. Sometimes too much of effort goes into goal improvement, and sometimes no effort is required at all. In both scenarios, performance measures need to be redefined. Changes in work processes also demand the establishment of new performance measures and goals. The following diagram will explain the performance measurement process:

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After the business or manufacturing processes have been identified for improvement, process data is analyzed through statistical methods, root causes of problems have been ascertained, potential solutions have been generated, the best solution has been selected and implemented, the solution has been sustained, The processes can be said to be under control. Verifiable statistical data collected through an organized data collection setup, backed by knowledge arising out of data analysis, form an important mechanism for continuous improvement. The processes can be said to be under a state where procedures and work instructions have been developed and successfully implemented. Training and education are also ongoing to facilitate teams working on these processes to adapt to and use these new methods. Now, this is the phase where redesigning processes, products or services according to customer requirements starts, depending on the requirement of the process. Process Redesign and Business Process Reengineering (BPR) Business process redesign or business process reengineering is a process in which the entire scope of the process is changed or redesigned backed by an organizational change. The strategy of BPR is to make major improvements. According to Hammer and Champy, 1993, BPR is "The fundamental re-thinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, speed and service." BPR will be discussed in detail in Chapter 4- Quality Management Systems and Tools. Apart from applying process performance management for target setting, an organization may also apply Quality Costs for overall quality improvement and Statistical Process Control (SPC) to bring business and manufacturing processes under control.
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Performance Measurement through Quality Costs The concept of quality costs has been discussed elsewhere in this course. As mentioned before, the costs of quality can be classified as Prevention, Appraisal and Failure costs.

The Process Cost Model divides cost of quality into cost of conformance (COC) and cost of non conformance (CONC).Therefore, COQ = COC + CONC

Quality costing is another tool which an organization uses to savor the long term effects of quality management. Quality costs usually start when the organization decides to change its approach from detection to prevention. Quality costs are about identifying poor costs of quality or how poor quality affects the quality of an organization. Quality costing can be started by management committing resources and specialized manpower to implement quality costing and seeking best practices and methods to spot and collect quality costs. This can be followed by finding out the causes and effects of these costs, proposing improvement solutions, and keeping track of the progress. A quality cost management team should be set up to take charge, supervise and control the quality costing system. Continuous training is also necessary to make employees realize the monetary implications of the quality costing system.

The analysis of costs of quality: aids management to know if investments in continuous improvement are justified helps in monitoring the effectiveness of various improvement efforts on appraisal and nonconformance costs helps to decrease the costs associated with errors by reducing the number of errors reveals the costs incurred in inspection and rework and provides feedback about what corrective action to take facilitates improved process controls provides a means of identifying opportunities, savings, and which areas to focus efforts on Apart from these benefits, quality costs are an important communication tool by providing a means to develop awareness about the significance of quality. Managing costs of quality should favorably result in reduced failure costs reduced appraisal costs
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more effective workforce higher customer base higher market share The cost of quality approach can fail due to the following reasons difficulty in explaining its concepts inability to establish a baseline of costs that can be used as a basis of comparison problems in calculating and allocating costs to the different costs of quality like prevention, appraisal and failure costs Note: SPC will be discussed in Chapter 4- Quality Management Systems and Tools

3.7 The Implementation Stage 1. Launching the Change The implementation stage is one of the most crucial because at this point the business and manufacturing processes have to be brought under control. Procedures and work instructions have to be clearly issued by the higher management. Designing of products and services and reworking the processes according to customer needs also takes place at this stage. The main focus while implementing TQM will be on customer needs, customer satisfaction, continuous improvement and a supportive cultural environment. One of the keys to the successful implementation of TQM lies in translating the goals into reality. This is to ensure that the whats are turned into hows. 1. The first step while implementing TQM is to acknowledge the fact that no two organizations can be similar. The processes, systems and work culture differ in each organization. As a result, the strategy that has been successful in one organization may not prove to be as successful in your organization. 2. The customer data that you have collected should be used to assess the current position of your organization. Identify your customers and their requirements. This will help you to pave the way for quality improvement efforts as well as measure your progress after you have applied the quality management tools. Project planning and implementing tools and data collection tools (discussed in the subsequent chapter) will be handy here. 3. If it is possible, test the chosen solution to the issue on a small scale. A simple plan that generates action and gets results is better than an elaborate plan that gathers dust. Moreover, you should continue your test long enough to observe problems. As your plan moves to the next step, be prepared for unexpected observations and problems. 4. A manual of quality should also be created where the correct procedure to carry out the processes can be documented for future use. The manual should highlight the goal of commitment to quality and customer satisfaction.
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2. Organizing and Coordinating the Total Quality Plan A steering group, together with the TQM facilitator has to coordinate the total quality plan. The coordination for crucial issues such as resource prioritization, progress, performance updates and communication for the ongoing program and continuous training are handled by the steering group. It is also important to set up a two way system of communication, for information to be channeled up and down the organization. Consistency in communication and feedback, both horizontal and vertical, is required to sustain the quality plan. 3.8 The Evaluation and Control Stage The evaluation and control stage is the one where the culture change has taken place in the organization and efforts are being made to maintain this position. All the processes, systems and employees of the organization work towards defect and problem prevention rather than emphasizing on taking corrective action. Quality audits and reviews should be done on a continuous basis to make sure that TQM has been implemented effectively. ISO 9000 registration is an effective way to measure the organization's progress and evaluate its current status. Quality Audits, Self Assessment and Review A check can also be kept on the processes by assigning someone who can make sure that the processes are working fine and proper procedures are being followed. Targets can also be set for each process and a check can be kept on how much each process contributes for the good of the organization. The processes must be revised from time to time. The organizations which do not continuously improve their processes, products and services for their customers definitely lag behind. Problems can crop up at any step while implementing TQM. It can be a success or failure depending on how well it is planned, executed, analyzed and motivated. Some of the common problems include not receiving the full support from the higher management, mistrust among the employees about the change and lack of focus on quality. Customer satisfaction is one of the most important priorities of TQM. However, most leaders do not realize this and they, instead, place importance on factors like market share, profitability and return on investment without realizing the fact that these factors cannot be totally controlled. The main focus of the management should be customer satisfaction. The higher management should make sure that they do not stress too much on stating the benefits of TQM and thus turn it into a failure. The goals of customer satisfaction, continuous improvement and focus on quality should be accomplished slowly but steadily. TQM should not be considered a short term goal or a solution to a particular issue. TQM entails a culture change in the organization. There are several methods to assess the performance of an organization after TQM is implemented. One of the methods is to evaluate the overall performance of an organization by tracing the changes that have taken place after implementing TQM. The results on the basis of performance for each company would vary based on several aspects like commitment from the higher management, sales and marketing skills and behavior of competitors. The only disadvantage of this method is that it is very difficult to trace the kind of progress the organization has made because several factors work
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hand in hand to make an organization successful and TQM is just one of them. Audits Quality audits are an integral activity of TQM and are conducted to review the progress relative to TQM. A quality audit involves checking if the quality plans of the company are resulting in the desired quality results. Quality audits provide a roadmap for future opportunities for improvement, give feedback on individual achievement and indicate if work has been appropriately delegated. In other words, it is monitoring the quality of the processes of the company. Quality audits are usually performed on a monthly, quarterly or annual basis by a steering committee. Technically, an audit is performed to guarantee that the actual processes or procedures are carried out according to the documented quality plans and procedures. The steps involved in an audit can be summarized as follows:

1. The extent and the frequency of the audit are established. 2. This is followed by an evaluation of the documented procedures, making plans about the program and preparing the documents for audit. 3. The final step is the performance of the audit by the steering committee by collecting evidence, evaluating the process and stating the observations regarding the progress of the improvement activity. Reviews Additionally, in order to achieve a desired output from a process, it is important that a robust review mechanism be defined. Reviews are integral to measure the effectiveness, efficiency and capability of the quality management system. Systematic and timely review is necessary to trace the progress of the improvement efforts.

A review typically should include: 1. Results of audits 2. Conformance to process and the end product 3. Evaluation of action plans derived from earlier reviews 4. Customer feedback 5. Proposed or current changes that impact QMS 6. Concrete plans for further improvement Review conducted in this manner should result in tangible output. Some of them are:
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1. Improvements in the current QMS plans and related aspects 2. Improvements aimed at incorporating customer feedback and resulting in better product delivery 3. Defined action plans to redefine Resource Management, if required A robust review mechanism should ensure that all proceedings as well as actions emanating out of it should be well documented. These actions defined during the course of the reviews should be open to internal audit from time to time. This is essential as it ensures adherence to the actions by all responsible parties. The process of reviewing or auditing the quality system of any organization is defined in different ways depending on who is conducting the assessment, against what standards the process/TQM/organization is being measured and what relationship the assessing unit share with the assessed one. Consequently these audits can be categorized into First Party, Second Party or Independent Third Party Audits. First Party Audits: An internal party makes an assessment of any internal department or supplier against some internally defined set standards or some externally recognized quality standards. Second Party Audits: An external party does an assessment of any department or supplier against its self defined or national or international set standards. Independent Third Party Audits: An external body who is a neutral party between the manufacturer, supplier and customer, conducts an assessment of a particular department; the entire organization; the supplier or the end product; or a combination of all on some internationally defined quality standards. In such cases, the assessment body is generally accredited by some International/National Quality Standard organization and their positive assessment can result into certification for the unit in the form of audit. Most organizations use this certification to ensure long term adherence to defined standards as they are then subject to regular audits by the certifying body and it is also used as a means to impose faith in their practices/products by the customers. Self Assessment Self Assessment is a methodology of assessment in which stake holders participate in the assessment exercise aimed at identifying key improvement areas and to build in a feeling of responsibility and enthusiasm amongst the key holders of a process/unit. Self assessment is based on set guidelines which have been developed independently by EFQM (European Foundation for Quality Management) and BQF (British Quality Foundation), both renowned accreditation bodies. While choosing either one of these two standards for self assessment, the former should have a positive approach towards
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identifying areas of improvement and opportunities rather than simply trying and achieving certain benchmark scores. Self Assessment can be carried out by various means, such as: 1. Surveys and Questionnaire 2. Self Audits of Processes 3. Group Discussions 4. Internal Workshops 5. A mock reward ceremony 6. A combined approach of the above

The ideal approach to undertake Self Assessment should follow certain defined steps. These are:

Step 1: Plan the objective of self assessment and the scope of assessment Step 2: Define means for collection of relevant data Step 3: Assess the data Step 4: Identify strength areas of improvement Step 5: Define action plan to overcome areas of improvement

Business Excellence Awards In today's competitive world, modern organizations aiming at quality oriented approach are setting standards for themselves by measuring their processes and products against world class quality standards. Most of them thus are aligning themselves to Total Quality Management Standards such as of European Foundation for Quality Management's (EFQM) "Excellence Model", which is promoted in the UK as Business Excellence by the British Quality Foundation (BQF). Many organizations around the world also assess their standards and competencies as against others who believe in Total Quality Management by applying for a number of Awards of Excellence in Quality which are given out in various parts of the world. Some of the earlier such awards were the Deming Prize which originated in Japan in 1951, and the Malcolm Baldrige National Quality award (MBNQA) of USA which has been awarded since 1987. The European equal to these awards are the EFQM Excellence Award which is Europe's most
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prestigious award for organizational excellence since 1991. In UK, it is the UK Business Excellence Award. These awards generate a considerable interest amongst its applicants who apart from hoping to win these prestigious awards aim at learning from the valuable feedback they receive during the exercise of selection process. Conclusion However, this is also true that if the current condition of the organization does not require that TQM be implemented, it should not be done so. TQM implementation should be put off until the organization is in a position in which TQM is likely to succeed. It will be easier to implement TQM if there is support from the higher management and if the employees are provided adequate knowledge about the benefits of TQM. A successful leader is one who is able to effectively champion the cause behind bringing in a culture change and showing others the path to this change.

Chapter 4 Quality Management Systems and Tools

Quality Management Systems The TQM systems described in this chapter are some main quality improvement systems and methodologies for organizing and managing quality improvement across an organization. Each of the methodologies discussed below originated and have been adopted from the quality philosophies discussed by Deming, Juran and other early Japanese practitioners of quality. Some features of a good quality management system are that it must be well documented, be well equipped to provide feedback, and performance must be audited and assessed on a regular basis. The system should be oriented towards prevention and not detection. Non conformances must be eliminated at the design stage itself. A two way communication system to channel communication and feedback at all levels should be set up, to enhance efficiency in working. A good QMS will also use the correct tools, techniques, statistical methods and packages at the right time and right opportunity. 4.1 Business Process Reengineering (BPR) BPR is the fundamental reconsideration and the radical redesign of organizational processes, in order to achieve dramatic improvement in critical, contemporary measures of performance, such as cost, quality, services and speed. (Hammer and Champy)

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The core of business process reengineering is to align employees of the business, their roles and responsibilities with the organization and its processes.(J.S. Oakland) The concept of BPR was popularized by Hammer and Champy in their bestselling book "Reengineering the Corporation". They said that radical redesign of workflow and rethink of an organization's goals, objectives and technology is often required to reduce costs and increase the quality of service of the organization. Information technology also plays an important role in facilitating that change. BPR is based on the idea that the organization's current strategy and people management is no longer valid and workable. The process of BPR can be explained in the following steps: 1. Define the scope and objectives of the reengineering process model. This involves building a process model that has specific outcomes like time reduction, cost reduction, service improvement, quality improvement etc. This will also involve a culture change. 2. Identify the business process to be redesigned. A process quality team including the lead executive, process owner, facilitator, and performance improvement team is to be formed with new goals and responsibilities. 3. Measure and analyze the current process as it is. The purpose of measuring and analyzing the process 'as it is' is to provide a benchmark from which to measure and redesign. This also prevents people from repeating the same old mistakes. 4. Redesign the process vision. The process improvement team creates a new process vision, using tools such as process mapping and high level process maps. This should result in the identification of the critical success factors for the process, an action plan including measurable improvement objectives and 'qualitative attributes of the future process state'. This requires the approval of the team. 5. Build a prototype of the new process. The next step is to build a prototype of the new process alternative with iterations and choosing the best alternative out of these. This prototype has to be implemented by a migration process and the improvement team has to be trained for the new roles and responsibilities. In this way the current process is transformed to the new design state. 6. Establish a performance measurement system for the new process. Performance metrics for the new process has to be developed to measure the performance of the new process, activities and tasks. 7. Control process by Continuous Improvement.
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The process improvement team now controls the performance of the new process by a process of continuous improvement. The application of a PDCA cycle and performance metrics helps to accomplish this. Examples BPR can be useful not just for the whole organization but can also be applied to individual departments. BPR can pay huge returns if it is implemented in a proper fashion. Product quality, better management, employee involvement and customer satisfaction are some of the areas which can be reengineered in the interest of the organization. BPR has helped big names like General Motors, Southwest Airlines and Dell Incorporated among others in the past to reap financial rewards. General Motors and Procter and Gamble were among organizations which were losing business due to competition. The reengineering process of General Motors entailed reinstating various brands of the company's desktop systems, network operating systems and application development tools and making the company's business systematic. BPR has helped Southwest Airlines to use an original strategy of business. Dell Incorporated is another example of BPR. Their customers deal directly with the manufacturer and this direct dealing helps to cut costs of inventory tracking and the huge warehouse maintenance costs. 4.2 Benchmarking Benchmarking means assessing one's performance but in terms of the performance of the competitors. Once the performance is measured and an organization is able to determine its own performance, it tries to find out the factors that work for the organizations that are the best in their class. Then, the organization strives to achieve that position by implementing the same techniques that its competitors are using. Definitions

"Benchmarking is a tool to help you improve your business processes. Any business process can be benchmarked." "Benchmarking is the process of identifying, understanding, and adapting outstanding practices from organizations anywhere in the world to help your organization improve its performance." "Benchmarking is a highly respected practice in the business world. It is an activity that looks outward to find best practice and high performance and then measures actual business operations against those goals." The benchmarking process was introduced by Robert. C. Camp. Xerox Corporation wanted to improve their parts distribution process. They inculcated the benchmarking process in their organization and Camp was one of the pioneers to carry out the process. Camp acknowledges the introduction of the process to Japanese manufacturers who introduced this concept as a quality improvement tool to challenge the supremacy of their American counterparts. These days, because of the internet and wide-spread knowledge about the process, benchmarking has become a very frequently used tool in organizations all over the world.
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Benchmarking, in the past, has been associated with studying one's own products and services in terms of the competitor's. However, these days it is synonymous with terms like "step-change", "breakthrough" and "rediscovery". It is about being the best, the most superior in the business. Also, benchmarking today is more about how things are done. Emphasis is laid on following the best practice rather than adopting the norms followed by the best organization. Since the main concern is on the best practices, the organization from where the practice is borrowed may use it for different purposes than the organization who is borrowing it. This is how benchmarking is different from other quality improvement techniques. Sometimes internal benchmarking is done across an organization. Often, the same thing is done differently in different locations in very big organizations. Standardizing the best internal practice across the enterprise can be effective in giving instantaneous results. Benchmarking is also characterized by lot of cooperation and sharing between organizations. Instead of secretly stealing ideas or best practices and outcomes for competitors, benchmarking is marked by communication and mutual exchange about information and data about the best methods. The best way to inculcate the benchmarking tools and practices in the organization is to develop it into a process. Camp has listed some steps that need to be followed to implement it. They are: Planning- Includes identifying what needs to be benchmarked and which Companies to consider as a reference point. Analysis- Includes considering the loop-holes and visualizing the future level of performance. Integration- Includes disseminating the results of benchmarking and establishing new goals to be accomplished by the organization. Action- Includes evolving a plan of action, executing it and then, evaluating the performance. Maturity- Includes becoming a pro in the new process. The new method is merged in the ongoing process. Benefits: 1. Improves performance 2. Helps establish goals that are tough yet achievable. 3. Helps to minimize wastage because no new experiments need to be done. 4. Helps share innovative ideas and the best practices between benchmarking organizations. Note: 1. It is not just important to imitate but to imitate in the right manner, in the manner that best suits one's organization.
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2.The benchmarking tool requires a lot of supervision. Benchmarking is an ongoing process because learning has no end and an organization that needs to grow will always be in need of innovative ideas to improve performance. 4.3 Quality Function Deployment (QFD) Quality Function Deployment is a structured process for planning the design of a new product or service or for redesigning an existing one. (The Quality Toolbox, Nancy R. Tague) Quality Function Deployment (QFD) is a process that is followed by understanding the Voice of the Customer (VOC). The VOC reveals the needs and demands of the customers. These requirements are then converted into product and service characteristics or quality metrics. These metrics are then converted into process details that will produce the product or service. These metrics are a graphical representation of the effects of the planning process. These metrics are created by each department separately which makes them very accurate. All the personnel in the organization contribute equally to the designing and quality control activity. The VOC can be explained by the Kano Model. Kano Model and Customer Satisfaction The Kano Model is another quality measurement technique to measure client happiness. It is a useful tool in evaluating and prioritizing customer requirements when QFD is applied. The model says that not all requirements are equally important to all customers, and the attribute of a product will be ranked differently by different customers in their need chart. Therefore, this model is used to rank requirements according to the importance of each segment's needs, which differentiates between must haves and differential attributes. Applying Kano model in the workplace to learn customer requirements will change the quality team's viewpoint towards customer satisfaction. The team will be able to know which values and services the customer covets for the most, and how to plan for the quality program. Product attributes can be classified as: Basic/Threshold attributes: Threshold attributes are those which the customer normally assumes to be present in the product. Their absence will cause dissatisfaction among customers. However, the customer will remain neutral even if these attributes are provided in a better way. For example, refrigerators come with freezers and door handles. A sleeker handle or a frost-free freezer will not cause any more satisfaction in the customer. Performance/Linear attributes: The presence of performance attributes are directly proportional to customer satisfaction. There are high levels of satisfaction if their performance is high and dissatisfaction if their performance is low. For example, the time spent waiting in line at the check-in counter of an airport terminal. This attribute is represented as a linear and symmetric line in the graph. A high level of execution of these linear attributes can add to product competitiveness. Exciters/Delighters: These are hidden attributes which delight the customer and lead to high levels of
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satisfaction if they are present, but do not cause any dissatisfaction if the product lacks this feature. These 'delighters' are the surprise elements in the product and Companies can use this attribute to set their product apart from their competitors. In course of time, as expectations rise, today's delighter's become tomorrow's basics. For example, a car with an inbuilt television can be today's delighter, but can be a basic tomorrow. In order to survive cut-throat competition, and to lead in the market, Companies need to be constantly innovative and research what is the current level of customer quality to meet customer expectations. A higher grade of execution of performance attributes and inclusion of one or more delighters/exciters will provide stiff competition to similar players. In the figure below, the entire basic attribute curve lies in the lower half of the chart, indicative of neutrality even with improved execution, and dissatisfaction with their absence. The exciters curve lies entirely in the upper part of the graph. The more the exciters, the higher is the level of satisfaction. The performance attributes are shown as a 45 line passing through the center of the graph.

Benefits of QFD QFD keeps customer preferences in mind and designs and moulds the product according to customer needs. Therefore, customers are satisfied with every product produced out of the shop floor. This also results in fewer customer complaints. QFD is a very effective system because the QFD metrics help to view the real picture. The organization is able to compare its goals to the stiff competition in the market. It increases market share and profitability. The planning stage of the product or service requires a shorter time when QFD is applied. This is because QFD lowers the time taken to design the product. Another benefit to be gained from applying a QFD process is that all the team members are equally involved in the development of a product because the focus is on the customer. This kind of brainstorming helps to increase the utility of the product and makes it user-friendly. This strengthens customer satisfaction which is the underlying element of TQM. When the QFD process is in its final stages, quality control measures are introduced. This helps to make sure customer satisfaction is an ongoing process even after process is in operation. The QFD approach can be studied in four different phases:
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Selection Phase In this phase, the product or the area which needs to be improved is chosen. The team belonging to a specific department is then selected and then the direction of the QFD study is defined. Aspects Phase The interdepartmental team looks at the product from different aspects such as the level of demand, usability, cost and reliability. Discovery Phase In this phase, the team searches for areas that need to be amended as far as improved technology, cost reduction and better usability is concerned.

Enforcement Phase The team working on the product explains the way the manufacturing of the improved product will be carried out.

The House of Quality - A Tool in QFD QFD is an integrated method to match the customer requirements to product specifications. QFD uses a tool called The House of Quality to relate customer requirements stated in VOC to quality features of the product or service. The point where the two matrices intersect represents the correlation between the two matrices and is known as the 'requirement matrix'. When this matrix is accentuated by showing the correlation of the two matrices, the result is the 'house of quality' or the QFD matrix. This storehouse of matrices helps to establish the important Critical-to-Quality parameters which are a key to determine customer requirements. QFD is also very useful because it helps to determine the credibility of a product even before it is manufactured or launched. The whats and the hows are two prime ingredients of a House of Quality diagram. This makes it very helpful for a TQM project. The VOC can be heard clearly and it can lead to effective decision-making. A House of Quality diagram is given below. (Thomas Pyzdek, 1976)

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4.4 Malcolm Baldrige National Quality Award The Malcolm Baldrige National Quality Award (MBNQA) is given annually to those organizations by the President of the United States that produce high quality products and have improved their performance levels. This award was mainly created to make US businesses focus on quality management. It was established in 1987 by Congress for manufacturers, service sector and for small businesses. Non-profit organizations also became eligible to apply for the award since 2007. The seven key areas in which the organizations should prove their mettle include: 1. 2. 3. 4. 5. 6. 7. Leadership Strategic planning Customer focus Market focus Measurement, analysis, and knowledge management Human resource focus Process management Results

This award is given only if the following criteria are satisfied by the organization who applies for the award: The said organization should be able to help improve the current practices and procedures being followed in the other organizations It should help to improve communication and disseminate information about the best practices followed It should serve as a guiding principle for understanding and managing performance and as a basis for steering plans and learning opportunities

The award motivates organizations to deliver quality goods to the customers, improve the efficiency in the organization and as a guiding tool for effective learning. Some of the famous names which have received the award include Motorola Inc (1988), AT&T Network Systems Group/ Transmission Systems Business Unit and the Ritz-Carlton Hotel Co (1992) and Boeing Aerospace Support (2003) among others. 4.5 Six Sigma Six Sigma is a process based methodology for pursuing continuous improvement. Six Sigma can be said to be a well-known quality management technique to control the defects arising in various processes in an organization, producing an efficiency of 99.9997%. It can be defined as a tool which is used to measure the digression from the mean, or the deviation from the desired goal or target, and at the same time to effectively manage and eliminate those deviations. Six Sigma uses teams that are allocated well defined projects that have an effect on the business. It also provides key team members training in advanced statistical tools and project management which is necessary for the project. The role of Six Sigma is to assist management in producing the most value with the minimum amount of resources, that is, in achieving efficiency. The organization does this by applying scientific Six Sigma principles to processes and products like the DMAIC (Define-Measure-Analyze-ImproveControl) approach or the DFSS (Design for Six Sigma) approach to design efficient products or
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processes. A number of Companies have found that upon embracing the Six Sigma initiative, the business enterprise prospers. Note: The details of the Six Sigma methodology are beyond the scope of this course. To know more about this, you can refer to the Six Sigma courses offered by our site. 4.6 Lean Manufacturing The word Lean was coined in the early 1990s by Massachusetts Institute of Technology (MIT) researchers. According to them, "Lean production is aimed at the elimination of waste in every area of production including customer relations, product design, supplier networks and factory management. Its goal is to incorporate less human effort, less inventory, less time to develop products, and less space to become highly responsive to customer demand while producing top quality products in the most efficient and economical manner possible". Definitions 1. A business performance improvement tool that focuses on enhancing quality, cost, delivery and people. Exposes waste and makes continuous improvement possible. 2. A philosophy of production that emphasizes the minimization of the amount of all the resources (including time) used in the various activities of the enterprise. It involves identifying and eliminating non-value-adding activities in design, production, supply chain management, and dealing with the customers. The basic idea contained in the definitions is the elimination of waste. Waste is generally referred to as 'muda', 'muri' or 'friction' in Lean Manufacturing. According to the advocates of Lean, a perfect lean enterprise is one from which friction or waste is absent. However, we cannot ignore the fact that friction is never completely absent, so there are only degrees of leanness. Lean Manufacturing and Lean enterprise are two different concepts. Scientific Management or Lean Manufacturing is an arrangement of synergistic and mutually sustaining methods that help in running a business or a manufacturing unit and Lean Enterprise constitutes the entire supply chain or value stream. The main purpose, however, of both Lean Manufacturing and Lean Enterprise is the elimination of waste and non-value added activities. If an organization strives to become a Lean Enterprise it needs equal participation from all the departments and from all the levels including the upper management, accounts department and the like. Lean needs to be incorporated as a way of life, as a routine in the organization to make it successful. Everyone in the value chain, including the suppliers and vendors, need to understand Lean in order to rename an organization as a Lean enterprise.

Note: The details of Lean Manufacturing are beyond the scope of this course. To know more about this, you can refer to the Lean Manufacturing course offered by our site.

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4.7 Tools for Total Quality Management TQM is about continuous performance management. TQM is based on fact and statistical analysis that aids in planning, improvement in processes and assessment of performance, rather than opinion for problem solving and decision making. The statistical approach to overcome problems stems from the fact that all problems are system related, rather than triggered by particular workers or employees. Statistical analysis encompasses collection of data, reviewing of the data, analyzing the data, comparing this data with past performance and making improvement decisions.

The main goal of a quality management program is reducing the variation in key processes. This will reduce costs and non-conformances. This section will explain the tools used to control quality, measure performance and feedback. 4.8 7 Quality Control (QC) Tools The original 7 quality control tools are the Cause and Effect (Fishbone) Diagram, Pareto Charts, Checksheets, Control Charts, Histogram, Scatter Diagram and Flowcharts or Run Charts. These are used in every quality management program. 7 Statistical Tools Cause and Effect Diagram (Fish-Bone)

One of the best ways of reaching at root cause of a problem is "Fish Bone Diagram". Fish bone diagram helps the users to visualize various causes leading to the problem. Once all the causes have been brainstormed, they are graphed and their sub problems are noted. The fishbone diagram is not applicable for problem-searching but is employed for problem-solving by the team members. The process is analyzed by measuring the inherent variability of waste generation which is expected from the process. Anything beyond this level of variability is not acceptable and is examined with the help of the Cause and Effect Diagram. The advantage of using fishbone diagram is that it helps the team to focus on why the problem occurs and not just to detect the problem; hence this tool is also very helpful in the Analysis Phase. Example : Suppose the MNC dealing in the home delivery of pizzas wants to find out the various causes that are leading to a fall in their customer base. They depict the problem graphically, by putting the problem and causes under the fishbone diagram. The following is the fishbone diagram, tailored to the "pizza home delivery" example:
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In the fish head, the pizza problem has been defined. The main causes leading to the problem are defined under the fish bones. The causes are then further sub-classed into generic problems, like, one of the cause, which is "pizza not delivered in time", has been further categorized into sub-causes, which infer the reasons why the pizza couldn't be delivered in time. The reason could be any one of these: traffic congestion, the scooter's tire was punctured or the pizza delivery boy couldn't locate the address easily.

Pareto Chart Analysis Pareto Chart analysis is used to understand the most significant reasons for customer dissatisfaction. This helps enterprises to identify which problems to tackle first to obtain the quickest improvement. A Pareto chart is a specialized vertical bar graph that exhibits data collected in such a way that important points necessary for the process under improvement can be demarcated. It exhibits the comparative significance of all the data. It is used to focus on the largest improvement opportunity by emphasizing the "crucial few" problems as opposed to the many others. The Pareto chart is based on the Pareto principle. The Pareto principle has to be understood before getting to know the Pareto chart. The Pareto principle was proposed by management thinker Joseph M. Juran. It was named after the Italian economist Vilfredo Pareto, who observed that 80% of the wealth in Italy was owned by 20% of the people. This principle can be applied to work related to business: "80% of the business defects are caused by only 20% of the errors" "80% of the results are produced from 20% of the efforts" "80% of the profit to a company is earned by 20% of the customers" "80% of the complaints to a business are caused by 20% of the products or services"

Take an example of a multi-national Company dealing in the home delivery of pizzas that wants to check the problem areas while delivering the pizzas. The data collected is displayed in the following table:

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Then the 80- 20 rule of the Pareto analysis is applied, and a line is drawn from 80% on Y axis until it meets the line graph. When this line reaches the line graph, it has to be vertically dropped down to the X axis as shown in the following graph. With the help of these identified problems, the root cause of the problem can be found out. Once the root cause is pinpointed, the problem area can be worked upon.

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All the problems that fall to the left of the 80% line are the few problems accounting for most of the complaints. They are: Not hot - Late delivery - No extras Wrong Billing - Wrong Pizza - Lesser ingredients - No delivery in a particular area These account for 80% of the problems encountered in the home delivery of the pizza. If these are immediately taken care of, then 80% of the problems can be solved. In this way, Pareto analysis helps in determining which problems to concentrate your efforts on. Q Quality Control (QC) Tools ...Continued Histogram

Histograms are used as a graphic tool to display continuous occurrence of data values and attempt to show the number of times a value has occurred most frequently and least frequently. In a Histogram, the size is shown on the horizontal axis and the frequencies of each size are shown on the vertical axis. The bar lengths are proportional to the relative frequencies of the data. Example: Suppose you are the new manager in a Company and you are disturbed by the trend of certain employees coming late. You have decided to monitor the employees' punctuality over the next four weeks and decided to note down by how much time they get late everyday (on an average basis).
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Data Gathering: Cluster the data for each day over the next four weeks. Record the data in an ordered manner as shown in the following:

Organizing Data: Determine what should be the values on x-axis and what should be the values on y-axis. Assume day of the week on the x-axis and time on the y-axis.

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Scatter Diagram

The Scatter Diagram is a tool used for establishing a correlation between two sets of variables. It is used to depict the changes that occur in one set of variables while changing the values of the other set of variables. This diagram does not determine the exact relationship between two variables, but only determines whether the two set of variables are related to each other or not; and if they are related, then how strong the relationship is. To create a scatter diagram, the points are plotted by assigning values of independent variables X to the horizontal axis and values of the dependent variable Y to the vertical axis. The pattern made by the points plotted on the scatter diagram usually suggests the basic nature and strength of the relationship between two variables. These impressions suggest that the relationship between two variables may be described by a straight line crossing the Y-axis below the origin and making approximately a 45-degree angle with X-axis. It looks as if it would be simple to draw, freehand, through the data points the line that describe the relationship between X and Y. In fact, it is not likely that any freehand line drawn through the data will be the line that best describes the relationship, since freehand lines will reflect any defects of vision or judgment of the person drawing the line.
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Below is a sample scatter diagram.

Control Charts Control charts are used to understand how the performances are changing over time. It is defined as a graphical tool for monitoring changes that occur within a process because of some common cause. Control charts help to show the trends in the average or the variation, which further helps in the debugging process. A control charts consists of a run chart, centerline and upper and lower limits determined statistically. A control chart consists of three horizontal lines: A central line to indicate the desired standard or level of the process (CL) An Upper Control Limit (UCL) A Lower Control Limit (LCL)
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In the control chart, the upper control limit (UCL) and the lower control limit (LCL) are usually plotted as dotted lines and the central line (CL) is plotted as a dark line. If t is the underlying statistic, then these values depend on the sampling distribution of t and are given by: UCL = E (t) + 3 S.E. (t) LCL = E (t) - 3 S.E. (t) CL = E (t) From time to time a sample is taken and the data are plotted on the graph paper. As long as the sample points fall within the upper and lower control limits there is no cause for worry, as the variation between the sample points can be attributed to chance causes. The problem occurs only when a sample point falls outside the control limits. This is considered as a danger signal, which indicates that assignable causes give rise to variations. This can be represented in a diagram:

Flowcharts A flow chart is a diagrammatic representation of the nature and the flow of work in a process. The elements that can be included are: sequence of actions, inputs and outputs entering or leaving the process, decisions that must be made, people who become involved in the process, time durations at each step etc. Representations in a flow chart, also known as a flow diagram has numerous benefits. A flow chart helps in explaining people the working of the process
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A flow chart can help in the training of newly appointed employees according to the standardized procedures of the organization Problem areas are easy to identify because in the flow chart, all the process steps are diagrammatically represented. This also helps in simplifying and refining the process.

A flow chart uses symbols. Each symbol has a specific meaning. These symbols are connected by arrows which indicate the flow of the process. Example: The following flowchart shows the acquisition and implementation of a new process in a BPO.

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Check Sheets A check sheet is the most common tool for collecting data. A check sheet is a structured form consisting of a list of items for collecting and analyzing data. It helps display the frequency of the data. It contains pre-recorded descriptions of events that are likely to occur. A well thought out check sheet consists of questions like: "Is everything done?" "How often does the problem occur?" "Have all inspections been performed?" Check sheets are tremendously useful for solving a problem and for process-improvement. Data collected in a check sheet can be used as inputs for other tools such as Pareto diagrams and histograms. They can be in the form of: process check sheets where ranges of measurement values are written and actual observations are marked defect check sheets where defects are described and frequencies are recorded defect location check sheets which are actual diagrams that show where the problem occurs cause and effect check sheets in which the problem area is shown by marking that area in the cause and effect diagram

Steps in Creating a Check Sheet

1. Identify the problem to be observed. 2. Decide when the data will be collected and what will be the duration. 3. Design the form such that data recorded does not have to be rewritten for analysis. For example, data can be recorded by simply making check marks or similar symbols against the fields. 4. Label all spaces on the form. 5. Each time the targeted event takes place; record it on the check sheet. Example 1: The following table represents a defect check sheet in the delivery process of a pizza manufacturing chain.

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Example 2: The following figure shows a check sheet used by HR to collect data on causes of increasing attrition rates in a BPO.

It is clear from the data collected that slow growth and high stress levels contributed to high attrition levels in one month. This data can be used for further analysis. 4.10 7 Management and Planning (MP) Tools The seven MP tools are theAffinity Diagram, Tree Diagram, Interrelationship Diagram, Matrix Diagram, Matrix Data Analysis, Arrow Diagram and Process Decision Program Chart (PDPC). Affinity Diagrams The affinity diagram organizes various ideas into meaningful categories by recognizing their natural relationships. It is used to reduce and refine the long, complex, and raw data into a smaller number of dimensions and categories. This method helps to bring out the team's intuition and creativity levels. This tool is used when group consensus is necessary. This technique was created by Japanese anthropologist Jiro Kawakita in the 1960s. Affinity diagrams can be constructed using existing data like survey results, drawings, letters, or data gathered from brainstorming. They can be used before creating a storyboard or tree diagram (discussed in the subsequent sections of this chapter). They can be used together with other techniques like cause and effect diagrams and interrelationship diagraphs.
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The Affinity Diagram is created in the following manner: Write the ideas on small pieces of paper or sticky notes. Randomly paste these notes on a working surface which is visible to everyone. The team has to work in silence during this stage. Look for patterns in the ideas. Look for ideas that seem to be correlated. Place them next to each other by moving the sticky note. Repeat the process until all ideas are grouped. There could be notes which fit into any category. It's alright to have such "standalones". You can also move a note someone else has moved before. It is alright to talk now. The team can now review and assess these final groupings. Any unsuspected patterns or reasons why the notes were shifted can be discussed. Select a heading for each group that would capture the essence of the group. The grouping of these ideas will assist the team in taking a decision, or making a plan. Tree Diagram

A tree diagram is an important project planning tool. The tree diagram helps to identify all aspects of a project, right down to the work package level. Sometimes the tree diagram used in project planning is also called a Work Breakdown Structure (WBS). It displays the structure of a project; showing how the broad categories of the project can be broken down into smaller details. This diagram shows the overall picture of a project's steps, the logical flow of actions from the identified goals. The tree diagram is also used to display existing projects in an easy to understand diagram. The tree diagram starts with one item that branches into two or more stems. Each of these branch into two or more, and so on. The main trunk is the generalized goal, and the multiple branches are the finer levels of action. The tree diagram is a generic tool that has wide applications apart from project planning. It can be used to find out root causes of problems as part of process improvements, used to correct the existing plans or processes as part of the implementation plan. Steps in Constructing a Tree Diagram 1. Identify the statement of the goal or project plan, or whatever is being studied. Write it at the top (this will make a vertical tree) or far left of the working surface (this will make a horizontal tree). 2. Subdivide the goal into various sub categories. Ask a question that will lead you to the next level of detail. For example, for a goal or work breakdown structure, the team could ask "Which tasks must be done to meet this goal? What is required to accomplish this?" Answers could be taken from the brainstorming sessions or affinity diagrams. Write these items in a line below or to the right. Arrows have to be used to show the links between the ideas. Ensure that these items will be sufficient to answer the questions above. This is called a "necessary and sufficient check". 3. Each of the new idea statements now becomes a goal or problem statement. For each of these ideas, ask questions again to unearth then next level of detail. Jot down the next level of sub-headings and link them with the previous line of statements with arrows. Do a "necessary and sufficient check" again for each of these items.
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4. Continue the process till all the fundamental components are covered. 5. Do a review of the whole diagram to check for sufficiency and completeness. Do a check for all the sub-headings. Are all of them necessary for the main objective? Will they help achieve the anticipated goals? Example: The following tree diagram is a project for increasing the productivity of customer care executives in a BPO. The goal of the project is to reduce the average call handling time, (the average time taken by each customer care executive to handle customer calls) which will have a positive effect on productivity.

Interrelationship Diagraphs Interrelationship Diagrams/Diagraphs are used to examine the relationship between complex issues. They are made to illustrate the relationship between various factors, areas, or processes. They can also be used as a means of organizing disjointed ideas (usually generated from brainstorming). The analysis by an Interrelationship Diagram aids in making a distinction between elements which operate as the root causes and those which are the outcomes of the root cause. These root causes can then be used for further analysis in problem resolution.

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Steps in Generating an Interrelationship Diagram: 1. The group has to define the particular issue or problem under discussion.

2. Write down all the factors or ideas on pieces of paper. These have to be pasted on a large flip-chart or any working surface. 3. Link each factor to all others. Use an arrow, also known as "influence arrow", to link related factors. 4. Draw the "influence arrows" from the factors that influence to those which are influenced. 5. If two factors influence each other, the arrow should be drawn to reflect the stronger influence. 6. Count the arrows. 7. The elements with the most outgoing arrows will be root causes or drivers. 8. The ones with the most incoming arrows will be key outcomes or results.

Example: A pizza chain is involved in home delivery of pizzas. An interrelationship diagram can be derived and the interrelationship between the various factors like the product (pizza) quality, sales, delivery time, quality of manpower etc. can be found out. From the interrelationship diagram, it is clearly visible that the most number of arrows are originating from incompetent staff. They are root cause of the outcome, that is low sales and eventually fall in profits.

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4.11 7 Management and Planning (MP) Tools...Continued Matrix Diagrams A Matrix diagram is an analysis tool that compares relationships between two, three, or four sets of data. It gives information about the nature of correlation between the elements, such as its strength, roles donned by various individuals, or measurements. It is a representation of elements in a tabular form. A Matrix diagram can be used: while trying to comprehend how groups of items relate to one another or affect one another while trying to comprehend how groups of items relate to one another or affect one another when comparing cause-and-effect relationships when designating responsibilities for tasks among a group of options

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