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Quality Management


Nature of Quality Traditional v/s Modern Quality Management Emerging Quality Standards TQM Programs Wrap-Up: What World-Class Producers Do


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

Dimensions of Quality Determinants of Quality

Costs of Quality

. Why should we understand them ???



All members of staff please note that due to recession, there will only be one drink per person at this year's Annual Party.
And please bring your own cup! Regards, Management

And what happened at the annual party !!!


The specifications were missing in the memo (size of cup).

Moral of the story: 6 Give very clear specifications, in your daily life including project work.

8 Dimensions of Product Quality

Performance : Features : Reliability : Conformance : Durability :

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

5 Dimensions of Service Quality (RATER)

Reliability: Perform promised service dependably and accurately.

Example: receive mail at same time each day.

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

Cost of Prevention for preventing defective goods to be provided.

e. g. : Investment in M/Cs, Technology, Education Programs, Data Collection & Analysis, This investment brings in high returns like Customer Satisfaction, Reduced Scrap, and Reduced Rework Expenses.


Cost of Detection/ Appraisal Inspection of

RM / WIP / FG, Final Performance Test, Maintenance of Test Eqpt.


Cost of Failure Relates to non-conforming & non-performing products

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 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

Customer Satisfaction Continuous Improvement Total Employee Involvement

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Conventional Approach

TQM Approach

Begins at the end of product line

Begins at the start of the process

External Customers
Detection Deviation Tolerance range

Internal and External customers

Prevention Error Free Target Value

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Quality Gurus

W. Edwards Deming - Assisted Japan in improving

productivity and quality

Philip B. Crosby -

Quality Is Free Co. should have the goal of zero defect

Armand Feigenbaum - Developed TQM concept Kaoru Ishikawa Quality circles & fishbone diagrams Joseph M. Juran Wrote Quality Control Handbook

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Crosbys Concept of Free Quality

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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Quality Drives the Productivity Machine

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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Emerging Quality Standards

ISO 9000 Standards Malcolm Baldrige National Quality Award Deming Prize Six Sigma Concept

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Malcolm Baldrige National Quality Award

Awards given annually to U.S. firms Criteria include

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

1 Winners are required to share their strategies to other applicants. 7

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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The Deming Prize

(details from Tisco Annual report 2008-09)

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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ISO - Benefits of implementation:

ISO 9001 forces a firm to document all its processes. Such documentation makes the system process-dependant and no person-dependant. While defining the processes, the process-owners have to visualize all possible defect opportunity and strengthen the process. Audit procedures continually check the working of the process and force a re-examination of the processes. General benefits include: Clear understanding of customer requirements Better relationship with vendors and customers Reduction in operations cost Efficient business communication at all levels with all stake holders Lower defect rates, consistent output

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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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Top Management Commitment and Involvement

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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Developing Supplier Partnerships

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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Customer Service, Distribution, and Installation

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 and Continuous Improvement

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 Concept

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

308,537 66,807 6,210 233 3.4

Defects per Million Opportunities 2 7

Six Sigma Process

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.


The goal of Six Sigma is to increase profits by eliminating variability, defects and waste.

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3 Sigma and 6 Sigma Coverage

Lower specification
1350 ppm 1.7 ppm

Upper specification
1350 ppm 1.7 ppm

Process Mean

+/- 3 Sigma
+/- 6 Sigma

Six Sigma-Practical Meaning

99% Good (3.8 Sigma) 20,000 lost articles of mail /hr. Unsafe drinking water for almost 15 minutes each day 5,000 incorrect surgical operations per week Two short or long landings at most major airports each day 200,000 wrong drug prescriptions each year 99.99966% Good (6 Sigma) Seven articles lost per hour One unsafe minute every seven months

1.7 incorrect operations /week

One short or long landing every five years

68 wrong prescriptions / year

One hour without electricity 3 every 34 years 0

No electricity for almost seven hours each month

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.


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Thank You

Pratik Saraiya

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