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Fundamental Concern of Management Worldwide

a) Quality
b) Delivery

c) Cost

CONCEPT OF QUALITY Responses on Definition of Quality: 1. 2. 3. 4. 5. 6. 7. 8. 9. Perfection Consistency Eliminating Waste Speed of Delivery Compliance with Policies and Procedures Providing a Good, Usable Product Doing it Right First Time Delighting or Pleasing Customers Total Customer Service or Satisfaction

WHAT IS QUALITY? Most Managers agree to pursue quality is to satisfy customers. American Society for Quality (ASQ) and American National Standards Institute (AWSI) define quality as the totality of features and characteristics of a product that bears on its ability to satisfy stated or implied needs of customer.

Fitness for use.

Meeting or exceeding customers satisfaction.

Conformance to requirements.

Conformance To Specifications - does the product/service meet targets and specifications defined by designers. Fitness for Use - Evaluates performance for intended use Value for Price Paid - Evaluation of usefulness Vs price paid Support Services - Quality of support after sale

Dimensions of Quality: Manufactured Products

basic operating characteristics of a product; how well a car is handled or its gas mileage

extra items added to basic features, such as a stereo CD or a leather interior in a car

probability that a product will operate properly within an expected time frame; that is, a TV will work without repair for about seven years

Dimensions of Quality: Manufactured Products (cont.)

degree to which a product meets preestablished standards

how long product lasts before replacement

ease of getting repairs, speed of repairs, courtesy and competence of repair person

Dimensions of Quality: Manufactured Products (cont.)

how a product looks, feels, sounds, smells, or tastes

assurance that customer will not suffer injury or harm from a product; an especially important consideration for automobiles

subjective perceptions based on brand name, advertising, and the like

Dimensions of Quality: Service

Time and Timeliness
How long must a customer wait for service, and is it completed on time? Is an overnight package delivered overnight?

Is everything customer asked for provided? Is a mail order from a catalogue company complete when delivered?

Dimensions of Quality: Service (cont.)

How are customers treated by employees? Are catalogue phone operators nice and are their voices pleasant?

Is the same level of service provided to each customer each time? Is your newspaper delivered on time every morning?

Dimensions of Quality: Service (cont.)

Accessibility and convenience
How easy is it to obtain service? Does a service representative answer you calls quickly?

Is the service performed right every time? Is your bank or credit card statement correct every month?

How well does the company react to unusual situations? How well is a telephone operator able to respond to a customers questions?

Critical Differences - Manufacturing and Services

1) Customers needs and performance standards are different. Often difficult to identify and measure because customers define what they are and each customer is different.

2) Output of many service systems are intangible. Manufacturing quality can be assesses. Service, quality can be assessed only through customers expectations. Poor service can be followed only by apologies.
3) Services cant be stored and inventoried. 4) Customers are often involved in service process and present while it is being performed. 5) Services are labour intensive.

What is TQM TQM

Total - Made up of the whole Quality - degree of excellence a product or service provides Management - Act, art or manner of planning, controlling, directing,.

Therefore, TQM is the art of managing the whole to achieve excellence.

Total Quality Management What is TQM? A systems approach to management that aims to continuously increase value to customers by designing and continuously improving organisational processes and systems. Processes: group of activities that take an input, add value to it and provide an output. Systems : collection of processes and resources

Management creation and continuous improvement of organizational systems that when used by organizational members lead to increased value for customers. Continuous Improvement: Constant refinement of and improvement of products services and systems.

Employee Involvement: Participation and involvement of employees in their jobs and continuous improvement.

What does TQM mean?

Total Quality Management means that the organization's culture is defined by and supports the constant attainment of customer satisfaction through an integrated system of tools, techniques, and training. This involves the continuous improvement of organizational processes, resulting in high quality products and services.

Total Quality Management

TQM is a management philosophy embracing all activities through which the needs and expectations of the customer and the community and the objectives of the organisation are satisfied in the most efficient and effective way by maximising the potential of the employees in a continuous drive for improvement

THE TQM SYSTEM Continuous Improvement versus Traditional Approach

Traditional Approach Continuous Improvement

Market-share focus Individuals Focus on who and why Short-term focus Status quo focus Product focus Fire fighting

Customer focus Cross-functional teams Focus on what and how Long-term focus Continuous improvement Process improvement focus Problem solving

TQM Philosophy Whats Different? (continued)

Understanding Quality Tools
Ongoing training on analysis, assessment, and correction, & implementation tools

Team Approach
Teams formed around processes 8 to 10 people Meet weekly to analyze and solve problems

Studying practices at best in class companies

Managing Supplier Quality

Certifying suppliers vs. receiving inspection


Sr. Dimension/Attributes No. Characteristics/Categories Total Quality Management Approach Considers Quality Management as essential part of company system Traditional Approach No compensation for quality. Tend to blame quality department for quality problems.

1 Management understanding
and attitude

Quality organization status

Quality is through the leader. Quality managers on Board of Directors

Considers quality is hidden in manufacturing. Quality is not considered as integral part of organisation.

3 Problem handling Emphasis on prevention of problems.

A structure approach to identifying and solving the problem.

Problems are fought as they occur fighting fire approach. No organisational activity.

4 Quality

improvement action 5 Priority Quality is topmost priority

Quality improvement is a continuous activity.

The first priority is to profit

Focus Focus on customer satisfaction

Focus on management requirements

7 Organization

Networking across and among the functions Large span of control with authority almost pushed down to the lowest level. Economy to time, just in time production, quick customer Conveyed with action With Top management

Hierarchical vertically Short span of control and many layers of authority. Long production runs for low cost and high efficiency Conveyed by slogan Delegated to subordinates

8 Span of Control

9 Production Schedule

10 Communication 11 Responsibility for quality

12 Perception of Quality is considered Quality multidimensional and the dimensions are customer oriented.

Quality is defined in terms of single dimensions, that is conformance to specifications. Emphasizes on monolithic work pattern . Opportunities for participation does not exist. Emphasis on division of labour

13 Employee

Employees are motivated and are given significant role regardless of level to find better ways to work.

14 Work Force

Multiskilled work force with job rotation


Quality productivity relationship

Considers high correlation between the two forces

Contribution of quality in improving productivity not recognised Improvement in inspection and gauging Growth in sales, profits and Return on investments.


Ways of improving

Changing corporate culture, Increasing employee education, use of process control. Customer satisfaction and Production of high quality goods and services


Keys to firm success


Approach Scope Scale Philosophy Standard Control Theme Management Led Company Wide Everyone is responsible for Quality Prevention not Detection Right First Time Cost of Quality On going Improvement

Evolution of Quality Management

Inspection Quality Control
Salvage, sorting, grading, blending, corrective actions, identify sources of non-conformance

Develop quality manual, process performance data, self-inspection, product testing, basic quality planning, use of basic statistics, paperwork control.
Quality systems development, advanced quality planning, comprehensive quality manuals, use of quality costs, involvement of non-production operations, failure mode and effects analysis, SPC. Policy deployment, involve supplier & customers, involve all operations, process management, performance measurement, teamwork, employee involvement.

Quality Assurance

Evolution of TQM New Focus

Shewhart Deming Juran Feigenbaum Ishikawa Crosby Taguchi


Tools & Techniques

Benchmarking Information Technology Quality Management Systems Environmental Management System Quality Function Deployment Quality by Design Failure Mode & Effect Analysis Products & Service Liability Total Productive Maintenance Management Tools Statistical Process Control Experimental Design Taguchis Quality Engineering Customer

Principles & Practices

Products or Service Realization

People & Relationships: Leadership Customer Satisfaction Employee Involvement Supplier Partnership

Approach: Continuous Process Improvement

Measure: Performances Measures

AMERICAN QUALITY GURU 1. 2. 3. 4. W.Edward Deming Joseph Juran Phil Crosby ShewartC

JAPANESE QUALITY GURU 1. 2. 3. 4. Kaoru Ishikawa Shigeo Shingo Taichi Ohno Taguchi

W Edwards Deming
regarded by the Japanese as the chief architect of their industrial success all processes are vulnerable to loss of quality through variation: if levels of variation are managed, they can be decreased and quality raised quality is about people, not products

W Edwards Deming
Core element is the management circle
planning do/implementation check/study action PDCA (or PDSA) cycle

Continuous improvement (Kaizen)

teamwork and competence in problem solving

The Deming Cycle or PDCA Cycle


Plan a change to the process. Predict the effect this change will have and plan how the effects will be measured

Adopt the change as a permanent modification to the process, or abandon it.

Implement the change on a small scale and measure the effects

Study the results to learn what effect the change had, if any.

W Edwards Deming
Out of the Crisis (1984)
having a satisfied customer is not enough profit in business comes from
repeat customers customers that boast about your product and service customers that bring friends with them

necessary to anticipate customer needs

W. Edwards Demings 14 Points 1) Create constancy of purpose towards improvement

of product and services.

2) Adopt the new philosophy. We can no longer live

with commonly accepted levels of delays, mistakes, defective workmanship.

3) Cease dependence on mass inspection. Require,

instead, statistical evidence that quality is built in.

4) End the practice of awarding business on the basis of

price tag.

W. Edwards Demings 14 Points

5) Find problems. It is managements job to work
continually on the system.

6) Institute modern methods of training on the job.

7) Institute modern methods of supervision of

production workers. The responsibility of foremen must be changed from numbers to quality.

8) Drive out fear that everyone may work effectively for

the company.

W. Edwards Demings 14 Points

9) Break down barriers between departments. 10) Eliminate numerical goals, posters and slogans for
the workforce asking for new levels of productivity without providing methods.

11) Eliminate work standards that prescribe numerical


12) Remove barriers that stand between the hourly

worker and his right to pride of workmanship.

W. Edwards Demings 14 Points

13) Institute a vigorous programme of education and

14) Create a structure in top management that will push

everyday on the above 13 points.

Demings Chain Reaction

Improve Quality

Provide jobs and more jobs Stay in business

Cost decreases because of less rework, fewer mistakes, fewer delays, snags, better use of machine time and materials

Productivity improves
Capture the market with better quality and lower price

Joseph Juran
structure CWQM concept: Company-Wide Quality Management essential for senior managers to
involve themselves define the goals assign responsibilities measure progress

Joseph Juran
empowerment of the workforce quality linked to human relations and teamwork key elements
identifying customers and their needs creating measurements of quality planning processes to meet quality goals continuous improvements

Joseph JURAN
Quality PLANNING consists of: Identifying customers and their needs Establishing optimum quality goals Creating measurements of quality Plan to meet quality goals under operating conditions Produce continuing results

Philip CROSBY Quality is defined as conformance to requirements Traditional quality control represent failure Manufacturing companies spend 20% revenues doing things wrong so
Do it Right First Time Zero Defects



To give priority attention to internal and external customers and their needs. Empower rather than control subordinates Emphasize improvement rather than maintenance Emphasize prevention Encourage collaboration rather than competition Train and coach rather than direct and supervise Learn from problems which are opportunities Continuously try to improve communications Continuously demonstrate commitment to quality Chose suppliers on the basis of quality Establish organisational systems to support quality effort Encourage and recognise team effort.


General Guidellines
a) b) c) Involve as many employees Should project growth and development should be realistic

Should have following characteristics a) b) c) d) e) Future oriented Creative Setting high standards of excellence Inspire enthusiasm and encourage commitments Very clear and challenging

1) What will be organization in 10 years 2) How to reach it? 3) Why the department exists and what are broad expected outcomes? 4) Specific, measurable, attainable, realistic and time bound break up of outcomes of department Vision Mission



5) Break up of above into individual specific short term outcome

6) What to do, how to do , sequence of actions of every individual

Targets Action Plan

Customer satisfaction major purpose of Quality Management System Customer satisfaction is subjective and hard to measure Internal and external customer A simple definition of customer satisfaction
Company offer

Customer Needs

Total satisfaction is reached when the offer matches the need or the circle is superimposed on the square.

Customer Perceptions of Quality

One of basic concepts of TQM philosophy is continuous process

improvement This concept implies that there is no acceptable quality level because customer needs, values expectations are constantly changing and more demanding ASQ Survey on end user perceptions of important factors that influenced purchases showed following ranking: 1) 2) 3) 4) 5) 6) Performance Features Service Warranty Price Reputation