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THIS IS A CLASS WORK DONE AT WARRI CONTINUEING CENTRE OF AKWA IBOM STATE POLY. NIGERIA
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TOTAL QUALITY MANAGEMENT
BY
EMMANUEL NELSON BASSEY
A TERM PAPER WRITEN IN PARTIAL FULFILLMENT FOR THE
COURSE PRODUCTION MANAGEMENT
HND 11, BUSINESS ADMINISTRATION, DEPARTMENT OF BUSINESS
STUDIES. AKWA IBOM STATE POLYTECHNIC.
IKOT OSURUA- IKOT EKPENE.
AKWA IBOM STATE.
JULY 2009
1
ABSTRACT
Today's competitive market, in almost every category of products and services, is
characterised by accelerating changes, innovation, and massive amounts of new
information. Much of this rapid evolution in markets is fueled by changing customer
needs. Significant customer behavior and market changes happen almost overnight.
Changes in market preference or technology, which used to take years, may now
take place in a few months.
As the pace of change accelerates, it becomes more difficult to maintain stable
relationships with suppliers, customers, brokers, distributors, and even your own
company personnel. "Putting out fires" and reacting to new emergencies is
unfortunately the norm for many large and small companies caught in the whirlpool
of technological change.
Total Quality Management (TQM) is a business management strategy aimed at
embedding awareness of quality in all organizational processes. There are several
keys to a successful TQM program for business organisation:
Quality work and customer satisfaction must be a commitment of all
employees.
Improving quality and customer satisfaction must also be a commitment of all
employees.
Every company activity must incorporate quality and customer satisfaction,
including all communications with customers and suppliers.
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It doesn't have to cost more to make quality and customer satisfaction your
priority.
Significant changes may be required to make quality and customer
satisfaction improvements.
Small advantages in all company functions can set your quality and customer
satisfaction apart from the competition.
In this term paper, the writer began with introduction, followed with the review of the
related literature on the relevant materials on the subject matter. The summary and
conclusion brought the write-up the end.
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TABLE OF CONTENTS
Abstract….2
Table of content…..4
Unit 1……..5
Introduction…5
Definition………5
Origins……7
Customer-driven quality…..9
Continuous improvement…….10
Fast response……..11
Unit 2…….14
Literature review……14
Total quality management……14
TQM as a foundation…….16
Ten steps to total quality management…….17
Key to quality…….18
Six questions six graphs for planning a change….19
Company philosophy ….21
Quality methods…..24
Unit 3 ……..25
Summary…..25
Unit 4…….26
Conclusion…..26
References……27
4
UNIT 1
INTRODUCTION
Total Quality Management is an approach to the art of management that originated
in Japanese industry in the 1950's and has become steadily more popular in the
West since the early 1980's.
1.1 DEFINITION
Total Quality Management is the organization-wide management of quality.
Management consists of planning, organizing, directing, control, and
assurance. Total quality is called total because it consists of two qualities:
quality of return to satisfy the needs of the shareholders, or quality of
products.
As defined by the International Organization for Standardization (ISO):
"TQM is a management approach for an organization, centered on quality,
based on the participation of all its members and aiming at long-term success
through customer satisfaction, and benefits to all members of the organization
and to society." ISO 8402:1994
5
One major aim is to reduce variation from every process so that greater
consistency of effort is obtained. (Royse, D., Thyer, B., Padgett D., & Logan
T., 2006)
In Japan, TQM comprises four process steps, namely:
1. Kaizen – Focuses on "Continuous Process Improvement", to make processes
visible, repeatable and measurable.
2. Atarimae Hinshitsu – The idea that "things will work as they are supposed to"
(for example, a pen will write).
3. Kansei – Examining the way the user applies the product leads to
improvement in the product itself.
4. Miryokuteki Hinshitsu – The idea that "things should have an aesthetic quality"
(for example, a pen will write in a way that is pleasing to the writer).
TQM requires that the company maintain this quality standard in all aspects of
its business. This requires ensuring that things are done right the first time
and that defects and waste are eliminated from operations.
Total Quality Management continues to evolve in the form of the Criteria for
Performance Excellence which was first published in 1988. The criteria
provide the basis for the Baldrige National Quality Program (BNQP) that is
administered by the National Institute of Standards and Technology (NIST).
Organizations benchmark against the criteria to assess how well their actions
are aligned with their strategies. Results are examined to determine the
6
effectiveness of their approaches and deployment of these strategies. Dr.
Juran once stated that the Criteria for Performance Excellence is the
embodiment of those philosophies and practices we call TQM.
1.2 ORIGINS
The origin of the expression Total Quality Management is unclear. Bill Creech
claims to have coined the phrase in his book The Five Pillars of TQM[3],
comparing the functionally centralised approach to organisation (with examples
from America) with the team-oriented, decentralised approach pioneered in
Japan after World War II.
"Total Quality Control" was the key concept of Armand Feigenbaum's 1951
book, Quality Control: Principles, Practice, and Administration[4]. In a chapter
titled "Total Quality Control" Feigenbaum grabs on to an idea that sparked
many scholars' interest in the following decades. The expression Total Quality
Control existed together with the Japanese expression "Company Wide Quality
Control" (CWQC) and the differences between the two expressions were
unclear. Major influencers for both expressions were W. Edwards Deming,
Joseph Juran, Philip B. Crosby, and Kaoru Ishikawa, known as the big four.
The expression Total Quality Management started to appear in the 1980s and
there are two theories of its origin:
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One theory is that Total Quality Management was created as a
misinterpretation from Japanese to English since no difference exists between
the words "control" and "management" in Japanese. [5]. According to William
Golomski (American quality scholar and consultant, 1924-2002) TQM was first
mentioned by Koji Kobayashi at NEC (Nippon Electrical Company) in his
speech when he received the Deming Prize in 1974.
The American Society for Quality says that the term Total Quality Management
was used by the U.S. Naval Air Systems Command in 1984 to describe its
Japanese-style management approach to quality improvement since they did
not like the word control in Total Quality Control. The word management should
then have been suggested by one of the employees, Nancy Warren.[7][8] This is
consistent with the story that the United States Navy Personnel Research and
Development Center began researching the use of statistical process control
(SPC), the work of Juran, Crosby, and Ishikawa, and the philosophy of W.
Edwards Deming to make performance improvements in 1984. This approach
was first tested at the North Island Naval Aviation Depot.
Total Quality is a description of the culture, attitude and organization of a
company that aims to provide, and continue to provide, its customers with
products and services that satisfy their needs. The culture requires quality in all
aspects of the company's operations, with things being done right first time, and
defects and waste eradicated from operations.
Many companies have difficulties in implementing TQM. Surveys by consulting
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firms have found that only 20-36% of companies that have undertaken TQM
have achieved either significant or even tangible improvements in quality,
productivity, competitiveness or financial return. As a result many people are
sceptical about TQM. However, when you look at successful companies you
find a much higher percentage of successful TQM implementation.
Some useful messages from results of TQM implementations:
if you want to be a first-rate company, don't focus on the second-rate
companies who can't handle TQM, look at the world-class companies that
have adopted it
the most effective way to spend TQM introduction funds is by training top
management, people involved in new product development, and people
involved with customers
Important aspects of TQM include customer-driven quality, top management
leadership and commitment, continuous improvement, fast response, actions
based on facts, employee participation, and a TQM culture.
1.3 Customer-driven quality. TQM has a customer-first orientation. The
customer, not internal activities and constraints, comes first. Customer
satisfaction is seen as the company's highest priority. The company
believes it will only be successful if customers are satisfied. The TQM
company is sensitive to customer requirements and responds rapidly to
them. In the TQM context, `being sensitive to customer requirements' goes
9
beyond defect and error reduction, and merely meeting specifications or
reducing customer complaints. The concept of requirements is expanded to
take in not only product and service attributes that meet basic
requirements, but also those that enhance and differentiate them for
competitive advantage.
Each part of the company is involved in Total Quality, operating as a
customer to some functions and as a supplier to others. The Engineering
Department is a supplier to downstream functions such as Manufacturing
and Field Service, and has to treat these internal customers with the same
sensitivity and responsiveness as it would external customers.
1.4 TQM leadership from top management. TQM is a way of life for a company.
It has to be introduced and led by top management. This is a key point.
Attempts to implement TQM often fail because top management doesn't lead
and get committed - instead it delegates and pays lip service. Commitment
and personal involvement is required from top management in creating and
deploying clear quality values and goals consistent with the objectives of the
company, and in creating and deploying well defined systems, methods and
performance measures for achieving those goals. These systems and
methods guide all quality activities and encourage participation by all
employees. The development and use of performance indicators is linked,
directly or indirectly, to customer requirements and satisfaction, and to
management and employee remuneration.
10
1.5 Continuous improvement. Continuous improvement of all operations and
activities is at the heart of TQM. Once it is recognized that customer
satisfaction can only be obtained by providing a high-quality product,
continuous improvement of the quality of the product is seen as the only way
to maintain a high level of customer satisfaction. As well as recognizing the
link between product quality and customer satisfaction, TQM also recognizes
that product quality is the result of process quality. As a result, there is a focus
on continuous improvement of the company's processes. This will lead to an
improvement in process quality. In turn this will lead to an improvement in
product quality, and to an increase in customer satisfaction. Improvement
cycles are encouraged for all the company's activities such as product
development, use of EDM/PDM, and the way customer relationships are
managed. This implies that all activities include measurement and monitoring
of cycle time and responsiveness as a basis for seeking opportunities for
improvement.
Elimination of waste is a major component of the continuous improvement
approach. There is also a strong emphasis on prevention rather than
detection, and an emphasis on quality at the design stage. The customer-
driven approach helps to prevent errors and achieve defect-free production.
When problems do occur within the product development process, they are
generally discovered and resolved before they can get to the next internal
customer.
11
1.6 Fast response. To achieve customer satisfaction, the company has to
respond rapidly to customer needs. This implies short product and service
introduction cycles. These can be achieved with customer-driven and
process-oriented product development because the resulting simplicity and
efficiency greatly reduce the time involved. Simplicity is gained through
concurrent product and process development. Efficiencies are realized from
the elimination of non-value-adding effort such as re-design. The result is a
dramatic improvement in the elapsed time from product concept to first
shipment.
1.7 Actions based on facts. The statistical analysis of engineering and
manufacturing facts is an important part of TQM. Facts and analysis provide
the basis for planning, review and performance tracking, improvement of
operations, and comparison of performance with competitors. The TQM
approach is based on the use of objective data, and provides a rational rather
than an emotional basis for decision making. The statistical approach to
process management in both engineering and manufacturing recognizes that
most problems are system-related, and are not caused by particular
employees. In practice, data is collected and put in the hands of the people
who are in the best position to analyze it and then take the appropriate action
to reduce costs and prevent non-conformance. Usually these people are not
managers but workers in the process. If the right information is not available,
then the analysis, whether it be of shop floor data, or engineering test results,
can't take place, errors can't be identified, and so errors can't be corrected.
12
1.8 Employee participation. A successful TQM environment requires a
committed and well-trained work force that participates fully in quality
improvement activities. Such participation is reinforced by reward and
recognition systems which emphasize the achievement of quality objectives.
On-going education and training of all employees supports the drive for
quality. Employees are encouraged to take more responsibility, communicate
more effectively, act creatively, and innovate. As people behave the way they
are measured and remunerated, TQM links remuneration to customer
satisfaction metrics.
1.10 A TQM culture. It's not easy to introduce TQM. An open, cooperative culture
has to be created by management. Employees have to be made to feel that
they are responsible for customer satisfaction. They are not going to feel this
if they are excluded from the development of visions, strategies, and plans.
It's important they participate in these activities. They are unlikely to behave in
a responsible way if they see management behaving irresponsibly - saying
one thing and doing the opposite.
1.11 Product development in a TQM environment. Product development in a
TQM environment is very different to product development in a non-TQM
environment. Without a TQM approach, product development is usually
carried on in a conflictual atmosphere where each department acts
independently. Short-term results drive behavior so scrap, changes, work-
arounds, waste, and rework are normal practice. Management focuses on
supervising individuals, and fire-fighting is necessary and rewarded.
13
Product development in a TQM environment is customer-driven and focused
on quality. Teams are process-oriented, and interact with their internal
customers to deliver the required results. Management's focus is on
controlling the overall process, and rewarding teamwork.
UNIT 2
LITERATURE REVIEW
The latest changes coming up for the ISO 9001:2000 standard’s "Process
Model" seem to complete the embodiment. TQM is the concept that quality
can be managed and that it is a process. The following information is provided
to give an understanding of the key elements of this process.
Total Quality Management (TQM)
Total = Quality involves everyone and all activities in the company.
Quality = Conformance to Requirements (Meeting Customer Requirements).
Management = Quality can and must be managed.
TQM = A process for managing quality; it must be a continuous way of life; a
philosophy of perpetual improvement in everything we do.
14
At its core, Total Quality Management (TQM) is a management approach to
long-term success through customer satisfaction.
In a TQM effort, all members of an organization participate in improving
processes, products, services and the culture in which they work.
The methods for implementing this approach come from the teachings of such
quality leaders as Philip B. Crosby, W. Edwards Deming, Armand V.
Feigenbaum, Kaoru Ishikawa and Joseph M. Juran.
A core concept in implementing TQM is Deming’s 14 points, a set of management
practices to help companies increase their quality and productivity:
1. Create constancy of purpose for improving products and services.
2. Adopt the new philosophy.
3. Cease dependence on inspection to achieve quality.
4. End the practice of awarding business on price alone; instead, minimize total
cost by working with a single supplier.
5. Improve constantly and forever every process for planning, production and
service.
6. Institute training on the job.
7. Adopt and institute leadership.
8. Drive out fear.
15
9. Break down barriers between staff areas.
10.Eliminate slogans, exhortations and targets for the workforce.
11.Eliminate numerical quotas for the workforce and numerical goals for
management.
12.Remove barriers that rob people of pride of workmanship, and eliminate the
annual rating or merit system.
13. Institute a vigorous program of education and self-improvement for everyone.
14.Put everybody in the company to work accomplishing the transformation.
The term “Total Quality Management” has lost favor in the United States in recent
years: “Quality management” is commonly substituted. “Total Quality
Management,” however, is still used extensively in Europe.
2.1 TQM COMPARED TO ISO 9001
ISO 9000 is a Quality System Management Standard. TQM is a philosophy
of perpetual improvement. The ISO Quality Standard sets in place a system
to deploy policy and verifiable objectives. An ISO implementation is a basis
for a Total Quality Management implementation. Where there is an ISO
system, about 75 percent of the steps are in place for TQM. The
requirements for TQM can be considered ISO plus. Another aspect relating
to the ISO Standard is that the proposed changes for the next revision (1999)
16
will contain customer satisfaction and measurement requirements. In short,
implementing TQM is being proactive concerning quality rather than reactive.
2.2 TQM AS A FOUNDATION
TQM is the foundation for activities which include;
Meeting Customer Requirements
Reducing Development Cycle Times
Just In Time/Demand Flow Manufacturing
Improvement Teams
Reducing Product and Service Costs
Improving Administrative Systems Training
2.3 TEN STEPS TO TOTAL QUALITY MANAGEMENT (TQM)
The Ten Steps to TQM are as follows:
1. Pursue New Strategic Thinking
2. Know your Customers
3. Set True Customer Requirements
4. Concentrate on Prevention, Not Correction
5. Reduce Chronic Waste
17
6. Pursue a Continuous Improvement Strategy
7. Use Structured Methodology for Process Improvement
8. Reduce Variation
9. Use a Balanced Approach
10.Apply to All Functions
2.4 PROCESSES
Processes must be managed and improved! This involves:
Defining the process
Measuring process performance (metrics)
Reviewing process performance
Identifying process shortcomings
Analyzing process problems
Making a process change
Measuring the effects of the process change
Communicating both ways between supervisor and user
2.5 KEY TO QUALITY
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The key to improving quality is to improve processes that define, produce and
support our products. All people work in processes.
People
Get processes "in control"
Work with other employees and managers to identify process problems and
eliminate them
Managers and/or Supervisors Work on Processes
Provide training and tool resources
Measure and review process performance (metrics)
Improve process performance with the help of those who use the process
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2.6 PLANNING A CHANGE
TQM Process Improvement and Problem Solving Sequence
PLAN
(PLAN A CHANGE)
DO
(IMPLEMENT THE CHANGE)
CHECK
(OBSERVE THE EFFECTS)
ACTION(EMBED THE
FIX INTO THE PROCESS
FOR GOOD)DEFINE
THE PROBLEM
IDENTIFY POSSIBLE
CAUSES
EVALUATE POSSIBLE
CAUSES
MAKE A
CHANGE
TEST THE
CHANGE
TAKE PERMANENT
ACTION1. Recognize that what you are doing is a "PROCESS"
2. Identify the commodity being processed.- Process Inference
3. Define some measurable characteristics
6. "BRAINSTORM" what is causing the problem.7. Determine what past data shows.o Frequency distributiono Pareto chartso Control charts- sampling
8. Determine the relationship between cause and effecto Scatter diagramso Regression analysis 9. Determine what the process is doing now
10. Determine what change would help
Your knowledge of the process
Scatter diagrams
Control Charts- sampling
Pareto
11. Determine what change worked (confirmation).
Histograms Control charts
- sampling
Scatter diagrams
12. Ensure the fix is embedded in the process and that the resulting process is used.
Continue to monitor the process to ensure:
A. The problem is fixed for
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of value to the commodity.
4. Describe the "PROCESS"o Process Flow Analysis'so Flow chartso List of steps
5. Identify the "Big" problemo Brainstormingo Checklistso Pareto analysis
o Control charts- sampling
analysis
****Then make the change.
good.
and
B. The process is good enough
o Control charts- sampling
****To ensure continuous improvement, return to step 5.
2.7 BASIC PRINCIPLES OF TOTAL QUALITY MANAGEMENT (TQM)
by Ron Kurtus (28 May 2001)
The basic principles for the Total Quality Management (TQM) philosophy of doing
business are to satisfy the customer, satisfy the supplier, and continuously improve
the business processes.
Questions you may have include:
How do you satisfy the customer?
Why should you satisfy the supplier?
What is continuous improvement?
21
Satisfy the customer
The first and major TQM principle is to satisfy the customer--the person who pays for
the product or service. Customers want to get their money's worth from a product or
service they purchase.
Users
If the user of the product is different than the purchaser, then both the user and
customer must be satisfied, although the person who pays gets priority.
Company philosophy
A company that seeks to satisfy the customer by providing them value for what they
buy and the quality they expect will get more repeat business, referral business, and
reduced complaints and service expenses.
Some top companies not only provide quality products, but they also give extra
service to make their customers feel important and valued.
Internal customers
Within a company, a worker provides a product or service to his or her supervisors. If
the person has any influence on the wages the worker receives, that person can be
thought of as an internal customer. A worker should have the mind-set of satisfying
internal customers in order to keep his or her job and to get a raise or promotion.
22
Chain of customers
Often in a company, there is a chain of customers, -each improving a product and
passing it along until it is finally sold to the external customer. Each worker must not
only seek to satisfy the immediate internal customer, but he or she must look up the
chain to try to satisfy the ultimate customer.
Satisfy the supplier
A second TQM principle is to satisfy the supplier, which is the person or organization
from whom you are purchasing goods or services.
External suppliers
A company must look to satisfy their external suppliers by providing them with clear
instructions and requirements and then paying them fairly and on time.
It is only in the company's best interest that its suppliers provide it with quality goods
or services, if the company hopes to provide quality goods or services to its external
customers.
Internal suppliers
A supervisor must try to keep his or her workers happy and productive by providing
good task instructions, the tools they need to do their job and good working
conditions. The supervisor must also reward the workers with praise and good pay.
23
Get better work
The reason to do this is to get more productivity out of the workers, as well as to
keep the good workers. An effective supervisor with a good team of workers will
certainly satisfy his or her internal customers.
Empower workers
One area of satisfying the internal suppler is by empowering the workers. This
means to allow them to make decisions on things that they can control. This not only
takes the burden off the supervisor, but it also motivates these internal suppliers to
do better work.
Continuous improvement
The third principle of TQM is continuous improvement. You can never be satisfied
with the method used, because there always can be improvements. Certainly, the
competition is improving, so it is very necessary to strive to keep ahead of the game.
Working smarter, not harder
Some companies have tried to improve by making employees work harder. This may
be counter-productive, especially if the process itself is flawed. For example, trying to
increase worker output on a defective machine may result in more defective parts.
24
Examining the source of problems and delays and then improving them is what is
needed. Often the process has bottlenecks that are the real cause of the problem.
These must be removed.
Worker suggestions
Workers are often a source of continuous improvements. They can provide
suggestions on how to improve a process and eliminate waste or unnecessary work.
Quality methods
There are also many quality methods, such as just-in-time production, variability
reduction, and poka-yoke that can improve processes and reduce waste.
25
UNIT 3
SUMMARY
The principles of Total Quality Management are to seek to satisfy the
external customer with quality goods and services, as well as your
company internal customers; to satisfy your external and internal
suppliers; and to continuously improve processes by working smarter and
using special quality methods.
26
UNIT 4
CONCLUSION
Unlike other management approaches such as "Management by
Objectives (MBO), TQM manages by both objectives and the way in which
we achieve them. It is as important to follow the standards as it is to
achieve the results. Why? Let's say a business objective is achieved (such
as reduced costs) because of outside uncontrollable influences such as
the price of oil going down. Competitors will receive the same benefit and
so there will be no net market gain. If both process and results are
pursued, than the company might actually realize a better cost reduction
that the competition. Conversely, if the cost of oil goes up, all competitors
will be effected, but the TQM company will have offsetting gains from
following the business process as well.
In conclusion, every organization must be willing to adopt the Principles that:-
1. Quality can and must be managed.
2. Everyone has a customer and is a supplier.
3. Processes, not people are the problem.
4. Every employee is responsible for quality.
5. Problems must be prevented, not just fixed.
27
6. Quality must be measured.
7. Quality improvements must be continuous.
8. The quality standard is defect free.
9. Goals are based on requirements, not negotiated.
10.Life cycle costs, not front end costs.
11.Management must be involved and lead.
12.Plan and organize for quality improvement.
REFERENCES
http://www.asq.org/learn-about-quality/total-quality-management/overview/overview.html
http://home.att.net/~iso9k1/tqm/tqm.html
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