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Overview
Nature of Quality Traditional v/s Modern Quality Management Emerging Quality Standards TQM Programs Wrap-Up: What World-Class Producers Do
QUALITY
For the Japanese, it is religion For the Americans, it is their growth For the Gulf, it is bull-shit & For the Indians - is it waste of time & money ????
What is Quality?
The quality of a product or service is a customers perception of the degree to which the product or service meets his or her expectations.
Nature of Quality
Costs of Quality
Primary Optg. Characteristics of product e.g. - TV : Sound, Picture clarity, Color, Reception . Secdry Charct. that supplement basic functioning. e.g.-Free drinks on a flight, Automatic tuners in TV Dependability of product, as down-time is expensive meeting pre-established specifications
Amount of use one gets from a product before it deteriorates, e.g. -1000 hr. bulb
Appearance: looks, feels, sounds, tastes or smells. Customer service : Elapsed time before service is restored. Safety
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Assurance: Ability to convey trust and confidence. Example: being polite and showing respect for customer.
Tangibles : Physical facilities and facilitating goods. Example: cleanliness. Empathy: Ability to be approachable (e.g. being a good listener) Responsiveness: Willingness to help customers promptly. e.g. Avoid keeping customers waiting for no apparent reason.
Determinants of Quality
Quality of design Quality capability of production processes Quality of conformance Quality of customer service Organizational quality culture
Costs of Quality
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Internal Failure Cost Cost incurred before delivery of product e.g. Scrap, Rework, Repair, Down Time (No cost if no defects produced within the system ) External Failure Cost Cost incurred after product is delivered. e.g. Cost of Returned Goods , Warranty Charges, Legal Exp., Customer Dissatisfaction
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TQM
TQM is an organized scientific approach towards continuous improvement of quality, involving everyone in the organization, covering every function, aimed towards total customer satisfaction. 3 Pillars of TQM
Conventional Approach
TQM Approach
External Customers
Detection Deviation Tolerance range
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Quality Gurus
Philip B. Crosby -
Armand Feigenbaum - Developed TQM concept Kaoru Ishikawa Quality circles & fishbone diagrams Joseph M. Juran Wrote Quality Control Handbook
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Phillip Crosby (Corp. VP & Director of Quality ITT ) Quality is not a gift, but it is FREE . What costs money are the un-quality things - all the actions that involve not doing jobs right the first time. Quality is not only free; it is an honest-to-everything profit maker.
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If production does it right the first time and produces products and services that are defect-free, waste is eliminated and costs are reduced.
Quality management programs today are viewed by many companies as productivity improvement programs.
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ISO 9000 Standards Malcolm Baldrige National Quality Award Deming Prize Six Sigma Concept
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1. 2. 3. 4. 5. 6.
Leadership Strategic Planning Customer & Market Focus Information and Analysis HRD & Management Process Management
125 85 85 85 85 85
7. Business Results ( e.g. Customer Satisfaction Financial and Market Results Supplier Results , etc. ) Total Points
450 -------1000
Indian Scenario
Tata Group have formulated their TBEM ( Tata Business Excellence Model) on the basis of Malcolm Baldrige Award. This is being used as a powerful tool to conduct the business through a more systematic approach and sustainable process that will not be dependent on any individual.
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Estd. in 1950. Originally designed to reward the Japanese Cos. that demonstrated successful quality improvement programs Given by Japanese Union of Scientists and Engineers (JESU) Now also awarded to non-Japanese Cos. Four top-management activities recognized Senior management activities Customer satisfaction activity Employee involvement activities Training activity So far, 160 cos. have won worldwide, including 15 Indian cos. Indian Winners : Sundaram Clayton, M & M, Tata Steel
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Elements of TQM
Top management commitment and involvement Customer involvement Design products for quality Design production processes for quality Control production processes for quality Develop supplier partnerships Customer service, distribution and installation Building teams of empowered employees Benchmarking and continuous improvement
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Support must be genuine or TQM will be seen as just another passing fad Fundamental changes must occur in the culture of the organization Such fundamental changes are not easy, but are impossible without top managements commitment and involvement
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Customer Involvement
Mechanisms to involve the customer Focus groups Market surveys Customer questionnaires Market research programs Quality Function Deployment (QFD) Formal system for identifying customer wants Eliminate wasteful product features and activities that do not contribute
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Supplier becomes part of the customers TQM drive The relationship between the supplier and the customer becomes long-lasting and durable ( not at Arms Length)
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Packaging, shipping, and installation must be included in TQM. Warehousing, marketing, and the distribution function must be committed to perfect quality. Contact between the customers and the firms product must be planned and managed to provide satisfied customers.
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Benchmarking The practice of establishing internal standards of performance by looking to how world-class companies run their businesses
Continuous Improvement The company makes small incremental improvements toward excellence on a continual basis
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Six Sigma simply means striving for near perfection. It is a disciplined, data-driven approach & methodology for eliminating defects in any process - from manufacturing to transactional and from product to service. Driving towards 6 Std. Devns. (bet. Mean and the Spec. limit) i.e. The process must not produce > 3.4 def. /million opportunities.
PPM Defects
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Process Capability
Accomplished through 2 sub-methodologies: DMAIC (define, measure, analyze, improve, control) used for existing processes falling below specification and looking for incremental improvement. (define, measure, analyze, design, verify) used to develop new processes or products, or if a current process requires more than just incremental improvement. Both processes are executed by Six Sigma Green Belts and Black Belts, and are overseen by Master Black Belts.
DMADV
The goal of Six Sigma is to increase profits by eliminating variability, defects and waste.
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Upper specification
1350 ppm 1.7 ppm
Process Mean
+/- 3 Sigma
+/- 6 Sigma
Customer Delight
Philip Kotler : It is not just enough to satisfy a customer, but it is important to delight him. Delighting is - adding unexpected surprises to the offer Prof. W. E. Deming : It will not suffice to have customer that are merely satisfied. An unhappy customer will switch over. Unfortunately a satisfied customer may also switch, on the theory that he could not lose much, and might gain. Profit in business comes from repeat customers, customers that boast about your products and service, and that bring friends with them Examples of Customer Delight Carry Bag, Goods Return Guarantee
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Kano Model
Model of Customer Satisfaction Classifies product attributes (how they are perceived) and their effect on customer satisfaction. Indicates - when good is good enough, and when more is better.
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Kano Model
3 Categories of Product attributes Satisfaction
Threshold Attributes
Basic or musts of a product, Not contributing to any product differentiation. Increasing attributes provide diminishing returns, but absence may results into dissatisfaction. ( e.g. Brakes of a car.)
Performance Attributes
Most of the customers verbalized needs fall into this category More is better, and will improve customer satisfaction. Conversely, weak performance reduces customer satisfaction. Customers willingness to pay is tied to performance attributes. ( e.g. Car providing better fuel economy)
Excitement Attributes
Unspoken & unexpected (Latent Needs) of customers, but may result into higher customer satisfaction. However absence may not lead to dissatisfaction. Provide a competitive advantage.
Dis-satisfaction
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Thank You