Chapter Two Total Quality Management

1. Chapter TwoTotal Quality Management

2. What is Quality? • A quality (from a latin word qualitas) is an attribute or a property • Attributes are ascribable by a subject, whereas properties are possessible. • In contemporary philosophy, the idea of qualities and especially how to distinguish certain kinds of qualities from one another remains controversial.

3. In popular use, the word quality suggests a degree of excellence-a Cartier watch, a Rolls- Royce car, and a Christian Dior dress: something expensive and conforming to a high, perhaps luxurious, specification. • However, this is too imprecise and limited idea of quality to be of any use in determining company policy.

4. Different scholars give different interpretations to the term quality: • For engineers it is conformance to specifications, • For users it is fitness for use, • For marketing it is the degree of excellence at an acceptable price that will influence the market share. • For customer service a quality product is that with less customer complaint

5. Quality is fitness for use - Juran • Quality is conformance for requirements - Crosby • Quality means best for certain customer conditions. These conditions are: the actual use and the selling price of the product - Feigenbaum • Quality is defined only in terms of the agent - Deming • Quality is providing our customers with products and services that consistently meet their needs and expectations - Boeing Company • Quality is doing the right thing right the first time, always striving for improvement, and always satisfying the customers -U.S.A. Department of Defense

6. A comprehensive definition of quality is: Exceeding Customers Expectation Thus the closer this conformation indicates the higher the degree of quality.

7. What is Management?

8. Definition of management • Management is the art of getting things done through people • Management is the process of getting activities completed efficiently and effectively with and through other people and resources

9. What is this little boy doing? • Can you see where he is going? • Do you know what could happen if he falls in the water? • Can you really see what the consequences are going to be? • Have you got the big picture in mind? • With anything that one does in life you start with the end in mind. You decide what you want to achieve and then you decide how you will work towards achieving it. • This is what management is.

10. So That You and Your Followers Can Reach Your Vision Put Stepping Stones in Place Chart the Path

11. In general "management" identifies a special group of people whose job is to direct the effort and activities of other people toward common objectives. • Simply, management gets things done through other people by planning, coordinating and directing the activities of an organization • The decisions and judgments made are normally oriented to the needs of the organization

12. The art and science of making things happen by people who do not have interest and make them enjoy it.

13. Total Quality Management (TQM) • TQM is the application of quality principles to all facets of an organization. • TQM is composed of the following three words to have a combined effect. • Total -made up of the whole • Quality –Customer satisfaction • Management -science and art or manner of planning, controlling, directing

14. TQM (cont’d) • A more comprehensive definition of TQM is given by another of the authors on classical quality control, A.V. Feigenbaum, in his material ‘Total Quality Control’. • Here, quality is described as “an effective system for integrating quality improvement efforts of the various groups of the organization, so as to provide products and service at levels which allow customer satisfaction.”

15. Key concepts of TQM • The key ideas in the definition of TQM are: • Customer Focus • Internal alignment • External alignment • Total Involvement • Continuous Improvement • Leadership Commitment

16. The Need for Quality Control • If a defective product enters in the market, it will cause: • customer dissatisfaction, • unnecessary expenditure for warranty, and • poor product salability. • Having a quality product increases market share, resulting in better profits.

17. Total Quality Management (TQM) Gurus

18. W.A.Shewhart (1891-1967) • Shewhart's most important contribution to both statistics and industry was the development of the statistical control of quality • The limitation was it did not find the magnitude of change in the process, and it was unable to quickly find large changes within small samples

20. W. Edwards Deming (1900–1993) • W. E. Deming, who was a statistician during 1940s, is regarded as the father of the TQM revolution. • When he was once asked to summarize his philosophy he replied “If I have to reduce my message to management to just few words, I would say, it all had to do with reducing variation”.

21. W.Edwards Deming (1900–1993) • Deming argued that higher quality leads to higher productivity, which, in turn, leads to long-term competitive strength • Deming noted that workers are responsible for 10 to 20 percent of the quality problems in a factory, and that the remaining 80 to 90 percent is under management's control.

22. Deming's System of Profound Knowledge • Theory of Optimization • Theory of Variation • Theory of Knowledge • Theory of Psychology.

23. The Deming Cycle

24. Deming (cont’d) • Deming emphasized that random or common causes of variations are inherent in the process which managers themselves have designed and established them in the system unknowingly • He estimates 94% of the problems arise due to system deficiencies rather than the fault of operators of the system or process.

25. Deming (cont’d) Deming’s fourteen points are: • Create consistency of purpose toward improvement of product and service, with the aim to become competitive and stay in business and provide jobs. • Adopt the new philosophy of the need for higher quality. • Cease dependence on mass inspection to achieve quality.

26. End the practice of awarding business on the basis of price tag alone. • Improve constantly and forever • Institute modern methods of training and education on the job, including management. • Adopt and institute leadership. • Drive out fear, so that every one may work effectively for the economy.

27. 9. Break down barriers between staff areas. 10. Eliminate slogans and exhortations asking the work force for unrealistic targets. 11. Eliminate numerical quotas for the work force and numerical goals for management. 12. Remove barriers that rob people of pride of workmanship. 13. Institute a vigorous program of education and self-improvement for everyone. 14. Put everyone in the company to work to accomplish the transformation.

28. Deming suggests that western management suffers from the following deadly diseases. • Lack of constancy of purpose • Emphasis on short-term profits • Evaluation of performance on annual review • Mobility of Top management • Running a company on figure alone with no consideration for unknown figures • Excessive medical costs, and • Excessive warranty cost fuelled by lawyers.

29. Some of the obstacles for effective quality management, according to him, are • Our problems are different – management thinks • Reliance on quality control departments • Quality by inspection • Blaming the workforce • Inadequate testing of prototypes

30. Joseph Juran • Quality management according to Juran consisted of three basic processes (Juran Trilogy): • Quality Planning, • Quality Control, and • Quality Improvement

31. Juran and the Cost of Quality There are two types of costs: these are: • Unavoidable Costs: preventing defects (inspection, sampling, sorting, QC) and • Avoidable Costs: defects and product failures (scrapped materials, labour for re-work, complaint processing, losses from unhappy customers so on)

33. Joseph Juran Juran has two definitions for quality: “Freedom from deficiencies” and “Fitness for use” which is a utility value concept, which varies from one customer to another

34. Joseph Juran His concept of “fitness for use” reflects meeting customer needs and is based on the following five quality characteristics, as outlined by him: • Technological (strength) • Psychological (beauty) • Time-oriented (reliability) • Contractual (guarantee) • Ethical (sales staff courtesy)

35. Joseph Juran Juran puts his thinking about managing quality in a trilogy of management processes: • Quality planning, • Quality control, and • Quality improvement

36. Joseph Juran Quality planning has the customer at the core to develop a product or service feature, which responds to the customer needs, by developing processes that are capable of producing these features

37. Joseph Juran The Quality control in the managerial process is an essential process for assisting the operating forces to achieve product or process goals Like any control activity, quality control process evaluates actual operating performance, compares it to goals and act on difference.

38. Joseph Juran The most significant contribution of Juran to the TQM movement is the Quality Improvement Process. The search for never-ending improvement is what it is all about, not just only in the quality of product or service provided but also in the process employed.

39. Joseph Juran Juranemphasized that the improvement of product or services and processes applies to all customers, internal and external. He was the first to recognize that customers are both internal and external

40. Joseph Juran The delimitation he gave for these customers is outlined as follows. • Internal Customer: Are those departments or persons who supply products to each other. • External Customer: These are impacted by the product but are not members of the company (or other institution) which produce the product.

41. Joseph Juran In order to set about improving quality, Juran formulated ten steps which companies can follow: • Build awareness of the need and opportunity for improvement • Set goals for improvement

42. Joseph Juran • Organizeto reach goals • Provide training • Carry out projects to solve problems • Report progress • Give recognition • Communicateresults • Keep scores achieved on quality improvement • Maintain momentum by making annual Improvement

43. Joseph Juran Juran was also the first to point out that the Pareto Principle could be used to quality improvements The basis is to distinguish the important vital few from the trivial many

44. Philip Crosby “Conformance to requirements” Before the implementation of the program, Crosby outlines some quality basics that should be emphasized to management

45. Philip Crosby Crosby wrote more than thirteen books in the field of quality management and is currently a leader in the area of quality management. He is the founder of Philip Crosby Associates II Inc., which engages itself in consultancy and training service

46. Philip Crosby “The four absolutes of quality” • Quality is defined as conformance to requirements, not as 'goodness' or 'elegance'. • The system for causing quality is prevention, not appraisal. • The performance standard must be Zero Defects, not "that's close enough". • The measurement of quality is the Price of Nonconformance, not indices.

47. Philip Crosby Crosby has forwarded a fourteen-point plan for quality improvements implementation issues • Management commitment • The quality improvement team • Quality measurement • Cost of quality • Quality awareness

48. Philip Crosby • Corrective action • Zero defects planning • Supervisor training • Zero Defects day • Goal Setting • Error cause removal • Recognition • Quality councils • Do the quality improvements process over again

49. Philip Crosby Crosby attributes 80% quality problems to management and hence the cure for these problems lies with management leadership He stresses that the essential ingredient is management integrity and formal education and training so as to build an implementation process for quality improvement

50. Philip Crosby Crosby’s other views if change in organizations is to occur are: • People will take quality as seriously as management takes it, no more. • Integrity is unrelenting • The tools of quality, like SPC, are not designed to cause prevention throughout the organization. • Think about quality improvements in terms of quality per share. • Every individual in the company needs continual education.