MS-096

1. MS-096 TOTAL QUALITY MANAGEMENT

2. VOLUME-I PART-I PHILOSOPHY AND BASIC CONCEPTS Unit-I Introduction: Basic Concepts and Approach

3. Introduction • What is quality? Dictionary has many definitions: “Essential characteristic,” “Superior,” etc. Some definitions that have gained wide acceptance in various organizations: “Quality is customer satisfaction,” “Quality is Fitness for Use.” • The American National Standards Institute (ANSI) and the American Society for Quality (ASQ) define quality as: “The totality of features and characteristics of a product or service that bears on its ability to satisfy given needs.”

4. Introduction • What is TQM? • A comprehensive, organization-wide effort to improve the quality of products and services, applicable to all organizations.

5. Introduction • What is a customer? Anyone who is impacted by the product or process delivered by an organization. External customer: The end user as well as intermediate processors. Other external customers may not be purchasers but may have some connection with the product. Internal customer: Other divisions of the company that receive the processed product. • What is a product? The output of the process carried out by the organization. It may be goods (e.g. automobiles, missile), software (e.g. a computer code, a report) or service (e.g. banking, insurance)

6. Introduction • How is customer satisfaction achieved? Two dimensions: Product features and Freedom from deficiencies. • Product features – Refers to quality of design. Examples in manufacturing industry: Performance, Reliability, Durability, Ease of use, Esthetics etc. Examples in service industry: Accuracy, Timeliness, Friendliness and courtesy, Knowledge of server etc. • Freedom from deficiencies – Refers to quality of conformance. Higher conformance means fewer complaints and increased customer satisfaction.

7. Why Quality? Reasons for quality becoming a cardinal priority for most organizations: • Competition – Today’s market demand high quality products at low cost. Having `high quality’ reputation is not enough! Internal cost of maintaining the reputation should be less. • Changing customer – The new customer is not only commanding priority based on volume but is more demanding about the “quality system.” • Changing product mix – The shift from low volume, high price to high volume, low price have resulted in a need to reduce the internal cost of poor quality.

8. Why Quality? • Product complexity – As systems have become more complex, the reliability requirements for suppliers of components have become more stringent. • Higher levels of customer satisfaction – Higher customers expectations are getting spawned by increasing competition. Relatively simpler approaches to quality viz. product inspection for quality control and incorporation of internal cost of poor quality into the selling price, might not work for today’s complex market environment.

9. Quality perspectives Everyone defines Quality based on their own perspective of it. Typical responses about the definition of quality would include: • Perfection • Consistency • Eliminating waste • Speed of delivery • Compliance with policies and procedures • Doing it right the first time • Delighting or pleasing customers • Total customer satisfaction and service

10. Quality perspectives Judgmental perspective • “goodness of a product.” • Shewhart’s transcendental definition of quality – “absolute and universally recognizable, a mark of uncompromising standards and high achievement.” • Examples of products attributing to this image: Rolex watches, Lexus cars. Product-based perspective • “function of a specific, measurable variable and that differences in quality reflect differences in quantity of some product attributes.” • Example: Quality and price perceived relationship.

11. Quality perspectives User-based perspective • “fitness for intended use.” • Individuals have different needs and wants, and hence different quality standards. • Example – Nissan offering ‘dud’ models in US markets under the brand name Datson which the US customer didn’t prefer. Value-based perspective • “quality product is the one that is as useful as competing products and is sold at a lesser price.” • US auto market – Incentives offered by the Big Three are perceived to be compensation for lower quality.

12. Quality perspectives Manufacturing-based perspective • “the desirable outcome of a engineering and manufacturing practice, or conformance to specification.” • Engineering specifications are the key! • Example: Coca-cola – “quality is about manufacturing a product that people can depend on every time they reach for it.”

13. Quality levels At organizational level, we need to ask following questions: • Which products and services meet your expectations? • Which products and services you need that you are not currently receiving? At process level, we need to ask: • What products and services are most important to the external customer? • What processes produce those products and services? • What are the key inputs to those processes? • Which processes have most significant effects on the organization’s performance standards?

14. Quality levels At the individual job level, we should ask: • What is required by the customer? • How can the requirements be measured? • What is the specific standard for each measure?

15. History of quality management …To know the future, know the past! • Before Industrial Revolution, skilled craftsmen served both as manufacturers and inspectors, building quality into their products through their considerable pride in their workmanship. • Industrial Revolution changed this basic concept to interchangeable parts. Likes of Thomas Jefferson and F. W. Taylor (“scientific management” fame) emphasized on production efficiency and decomposed jobs into smaller work tasks. Holistic nature of manufacturing rejected!

16. History of quality management • Statistical approaches to quality control started at Western Electric with the separation of inspection division. Pioneers like Walter Shewhart, George Edwards, W. Edwards Deming and Joseph M. Juran were all employees of Western Electric. • After World War II, under General MacArthur's Japan rebuilding plan, Deming and Juran went to Japan. • Deming and Juran introduced statistical quality control theory to Japanese industry. • The difference between approaches to quality in USA and Japan: Deming and Juran were able to convince the top managers the importance of quality.

17. History of quality management • Next 20 odd years, when top managers in USA focused on marketing, production quantity and financial performance, Japanese managers improved quality at an unprecedented rate. • Market started preferring Japanese products and American companies suffered immensely. • America woke up to the quality revolution in early 1980s. Ford Motor Company consulted Dr. Deming to help transform its operations. (By then, 80-year-old Deming was virtually unknown in USA. Whereas Japanese government had instituted The Deming Prize for Quality in 1950.)

18. History of quality management • Managers started to realize that “quality of management” is more important than “management of quality.” Birth of the term Total Quality Management (TQM). • TQM – Integration of quality principles into organization’s management systems. • Early 1990s: Quality management principles started finding their way in service industry. FedEx, The Ritz-Carton Hotel Company were the quality leaders. • TQM recognized worldwide: Countries like Korea, India, Spain and Brazil are mounting efforts to increase quality awareness.

19. Evolution of TQM philosophies • The Deming Philosophy Definition of quality, “A product or a service possesses quality if it helps somebody and enjoys a good and sustainable market.” Improve quality Decrease cost because of less rework, fewer mistakes. Productivity improves Capture the market with better quality and reduced cost. Long-term competitive strength Stay in business

20. Unit-II Quality Management : Leading Thinkers

21. Philip B. Crosby • Five Absolutes of Quality Management • Quality is defined as conformance to requirements, not as ‘goodness’ nor ‘elegance’ - i.e. quality is an essentially measurable aspect of a product or service and that quality is achieved when expectations or requirements are met • There is no such thing as a quality problem - i.e. poor management creates the quality problem • It is always cheaper to do it right first time - i.e. quality needs to be designed into a product, not that flaws should be inspected out. • The only performance measurement is the cost of quality - i.e price of non conformance, cost of quality is always a measurable item, quantitative approach • The only performance standard is zero defects - i.e. perfection is the target, quantitative approach to quality

22. Three Essential strands • a belief in quantification • management leadership • prevention rather than cure • Assumptions: • Management process as the key driver of quality - conformance to requirements are defined and communicated amongst all stakeholders • zero defects is an achievable objective • it is possible to establish a company that does not start out expecting mistakes - is this realistic? Customer’s Product volume or quality requirements?

23. The 14 Steps • Step 1: Establish management commitment - it is seen as vital that the whole management team participates in the programme, a half hearted effort will fail. • Step 2: Form quality improvement teams - the emphasis here is on multi-disciplinary team effort. An initiative from the quality department will not be successful. It is considered essential to build team working across arbitrary and often artificial organisational boundaries • Step 3: Establish quality measurements - these must apply to every activity throughout the company. A way must be found to capture every aspects, design, manufacturing, delivery and so on. These measurements provide a platform for the next step

24. Step 4: Evaluate the cost of quality - this evaluation must highlight, using the measures established in the previous step, where quality improvement will be profitable. • Step 5: Raise quality awareness - this is normally undertaken through the training of managers and supervisors, through communications such as videos and books and by displays of posters etc. • Step 6: Take action to correct problems - this involves encouraging staff to identify and rectify defects or pass them on to higher supervisory levels where they can be addressed

25. Step 7: Zero defects planning - establish a committee or working group to develop ways to initiate and implement a zero defects programme. • Step 8: Train supervisors and managers - this step is focussed on achieving understanding by all managers and supervisors of the steps in the quality improvement programme in order that they can explain it in turn. • Step 9: Hold a zero defects day to establish the attitude and expectation within the company. Crosby sees this as being achieved in a celebratory atmosphere accompanied by badges buttons and balloons.

26. Step 10: Encourage the setting of goals for improvement. Goals are of course of no value unless they are related to appropriate timescales for their achievement. Step 11: Obstacle reporting - this is encouragement to employees to advise management of the factors which prevent them achieving error free work. This might cover defective or inadequate equipment poor quality components etc. Step 12: Recognition for contributors - Crosby considers that those who contribute to the programme should be rewarded through a formal although non-monetary reward scheme.

27. Step 13: Establish Quality councils - these are essentially forums composed of quality professionals and team leaders allowing them to communicate and determine action plans for further quality improvement. • Step 14: Do it all over again - achievement of quality is an ongoing process.

28. Possible Strengths: • clarity • recognition of worker participation • rejection of a tangible quality problem, acceptance of the idea of solutions • Crosby’s metaphors - vaccine (integrity; dedication to communication and customer satisfaction; company wide policies and operation which support the quality thrust) and maturity • Crosby’s motivational style

29. Perceived Weaknesses: • danger of misdirected effort from blaming workers (in question) • emphasis on marketing more than recognition of barriers • the management and goal orientation of the 14 step programme as failing to free workers from externally generated goals • potential for zero defects to be interpreted as zero risk • ineffectiveness in coercive power structures • charismatic/evangelical style - lack of substantial underpinning?

30. W. Edwards Deming • Approach can be seen as founded in scientific method - urged management to focus on the causes of variability in manufacturing processes. First belief in causes. Common causes are those which arise from the operation of the system itself and are a management responsibility. Special causes are seen as those relating to particular operators or machines and requiring attention to the individual cause. Use of SPC charts as key method for identifying special and common causes and assisting diagnosis of quality problems. Eliminate the outliers which arise from special causes then concentrate on the common causes to further improve quality. Second belief is the quantitative approach to identifying problems. Third belief was Deming, Shewhart or PDCA cycle - Plan, Do, Check, Action. Two further beliefs – systematic and methodical approaches; needed for continuous quality improvement action. • www.deming.org.

31. Seven Deadly Sins of Western Management • Lack of constancy - ‘flavour of the month’ • Short term profit focus - manipulate the books for a quarter • Performance appraisals - nourish short-term performance • Job-hopping - destroys teamwork, short term orientation of organisation • Use of visible figures only – a lot of hidden benefits, spin-offs • Excessive medical costs • Excessive costs of liability

32. Summarising: • quantitative, statistically valid, control systems • clear definition of those aspects under the direct control of staff • a systematic, methodological approach • continuous improvement • constancy and determination • quality should be designed in to both the product and the process

33. Assumptions: • Management are seen to be responsible and capable of eliminating the common causes • Statistical methods properly used will provide quantitative evidence to support changes • continuous improvement is both possible and desirable • prime role of the service sector rests in enabling manufacturing to do its job

34. Methods: • the PDCA cycle • statistical process control - 94% belong to the system • 14 principles of transformation • 7 point action plan

35. Deming’s 14 points for Management 1. Create constancy of purpose toward improvement of product and service, with the aim to become competitive and to stay in business, and to provide jobs. 2. Adopt a new philosophy. We are in a new economic age. Western management must awaken to their challenge, must learn their responsibilities, and take on leadership for change. 3. Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place. 4. End the practice of awarding business on the basis of price tag. Instead, minimise total cost. Move towards a single supplier for any one item, on a long-term relationship of loyalty and trust. 5. Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs. 6. Institute training on the job. 7. Institute leadership (see point 12). The aim of leadership should be to help people and machines and gadgets to do a better job. Leadership of management is in need of overhaul, as well as leadership of production workers.

36. Shigeo Shingo • Started with the ‘scientific management’ ideas of Frederick Taylor in the early 19th c (1911) i.e. the ‘economic man’ theory of motivation, until he became aware of the methods of Statistical Quality Control. Then in the ‘70s he came to believe in defect prevention. Shingo believed that ‘statistical methods detect errors too late in the manufacturing process’. He became focused ion prevention. • ‘he would prefer to be remembered for his promotion of the understanding necessary behind the concepts of looking at the total manufacturing process and the elimination of transportation, storage, lot delays and inspection. • He believed in zero defects but through good engineering and process investigation and rectification.

37. Assumptions: • Adhered to a mechanistic approach to organisation throughout his career. Scientific management to statistical quality control to error prevention through good engineering. However, while error free may be possible in an engineering context, in the service sector there are many variables which cannot be controlled to the extent that Shingo’s approach requires. • He ignores the human relations aspects of organisations. • Principal contribution to quality is the mistake proofing concept, Poke-Yoke, ‘Defect=0’. This approach stops the production process whenever a defect occurs, defines the cause and generates action designed to prevent a recurrence. Alternatively ‘on-line’ adjustment to the product or process may be made, enabling continuous process to be managed. Poke-Yoke relies on a process of continuously monitoring potential sources of error. Machines used in the process are equipped with feedback instrumentation to carry out this task as Shingo considered that human personnel are fallible. People are used to trace and resolve the error causes. Installation of the system is expected to lead over time to a position where all likely recurring errors have been eradicated. Concept adopted to some extent in food processing.

38. Strengths: • on-line real-time control • Poke-Yoke emphasis effective control systems • Weaknesses: • source inspection only works effectively in manufacturing processes - not so for the service sector • Shingo says little about people other than that they are fallible

39. Genichi Taguchi • The two founding ideas of his quality work are essentially quantitative. First is a belief in statistical methods to identify and eradicate quality problems. The second rests on designing products and processes to build quality in, right from the outset. Could be seen as the cost of non-quality i.e. ‘the loss imparted to society from the time the product is shipped’. His prime concern is with customer satisfaction and with the potential for ‘loss of reputation and goodwill’ associated with failure to meet customer expectations. He saw that loss not only occurred when a product was outside its specification but also when it varied from its target value.

40. Three stage prototyping method: • system design - involving both product and process - attempt to develop a basic analytical, materials, process and production framework - functional design - product design and process design. • parameter design - search for the optimal mix of product variation levels and process operating levels aiming to reduce the sensitivity of the production system to external or internal disturbances - monetary loss arising from variation. • tolerance design - enables the recognition of factors that may significantly affect the variability of the product. Additional investment, alternative equipment and materials are then considered as ways to further reduce variability. - minimising the total sum of product manufacturing and lifetime costs.

41. So there is a clear belief in identifying and as far as possible eradicating potential causes of ‘non-quality’ at the outset. His approach also relies on a number of organisational principles: • 1. Communication • 2. Control • 3. Efficiency • 4 Effectiveness • 5 Efficacy • 6 Emphasis on location and elimination of causes of error • 7 Emphasis on design control • 8 Emphasis on environmental analysis

42. Quantitative methods provide measurements for control; eradication as far as possible of causes of failure at the outset; societary cost of non-quality; systems view of inter-dependence and interrelationship both within the organisation and with its environment.

43. Assumptions: • Quality can always be controlled through improvement in design - validity in service sector must be questioned. • Little or nothing is said about people or the management process which implies that they are not considered a significant factor in the production of quality goods. • Seems to assume that the organisation can wait for results - that delays between product conception and production will be acceptable - while such delays are to some extent inevitable, they must be minimised in the contemporary market. • Much of his work has been informed by his background in engineering and quantitative methods. The adoption of a systemic view, while not apparently extending to the management process of the organisation, is certainly a step forward from the work of many of his fellow gurus.

44. The principal tools and techniques espoused by Taguchi centre around the concept of kaizen thinking i.e. continuous improvement. His backward step into the design process helps to ensure a high basic quality standard. Besides the usual statistical methods, he also adopts experimental studies, prototyping and the quadratic loss function. • Eight stages of product development i.e. design of experiments. • 1. Define the problem. • 2. Determine the objective - what output characteristics are to be studied and optimised through the 4experimental process, and what measurements are to be taken - may have to run control experiments in order to validate results. • 3. Conduct a brainstorming session - all managers and operators are involved to determine the controllable and uncontrollable factors affecting the situation. • 4. Design the experiment. • 5. Conduct the experiment. • 6. Analyse the data.

45. 7. Interpret the results - aims to identify optimal levels for the control factors which seek to minimise variability and bring the process closest to its target value. Prediction is used at this stage to consider the performance of the process under optimal conditions • 8. Run a confirmatory experiment may have to revisit stages 3-8 • suggested steps fall into the ‘parameter design’ stage of product development - Deming's ‘Plan,Do,Check,Action cycle’ • The quadratic loss function is his principal contribution to the statistical aspects of achieving quality - it is used to minimise the cost of a product or service • L = c(x - T)2 + k • where x is a particular quality characteristic with target T • c is cost of failing to meet target, k represents the minimum loss to society • May be viewed as a measure of efficiency and of effective utilisation of resources

46. Strengths: • quality is a design requirement • the approach recognises the systemic impact of quality • it is a practical method for engineers (rather than statisticians) • it guides effective process control • Weaknesses: • usefulness is biased towards manufacturing • guidance is not given on management or organisational issues • it places quality in the hands of the experts • it says nothing about people as social animals

47. Unit-III Building Blocks of Total Quality Management

48. The TQM initiatives is built upon the following beliefs: • People are untapped resources • People who do the work are in the Best position to Improve Organizational Processes • Continual improvement • Values drive behavior • Preventive as opposed to detection • Organization- wide involvement and commitment.

49. Stumbling Blocks (obstacles) of TQM • Overselling TQM • Setting mediocre expectations • Poorly or inadequately diagnosing the situation • Failing to train personnel • Making continuous improvement too complex and unnatural • Failing to recognize and celebrate successes.

50. PDCA Cycle In the 1920s, Walter Shewhart, a statistician at Bell Telephone Laboratories, developed the Shewhart cycle, known as Plan, Do, Check, Act (PDCA).