Total quality management report

TOTAL QUALITY MANAGEMENT

Kristian Veil N. Nierves

Meaning of Quality Meeting Customer’s Requirements

Doing Things Right the First Time

Freedom from Failure (Defects)

Consistency

Continuous Improvement

Meaning of Quality Conformance to specifications

Does product/service meet targets and tolerances 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

Psychological e.g. Ambiance, prestige, friendly staff

buisnessdictionary.com

Total Quality Management A holistic approach to long-term success

that views continuous improvement in all aspects of an organization as a process and not as a short-term goal. It aims to radically transform the organization through progressive changes in the attitudes, practices, structures, and systems.

businessdictionary.com

Total Quality Management Total quality management transcends the

product quality approach, involves everyone in the organization, and encompasses its every function: administration, communications, distribution, manufacturing, marketing, planning, training, etc. Coined by the US Naval Air Systems Command in early 1980s, this term has now taken on several meanings and includes


Total Quality Management commitment and direct involvement of highest-

level executives in setting quality goals and policies, allocation of resources, and monitoring of results

realization that transforming an organization means fundamental changes in basic beliefs and practices and that this transformation is everyone's job

building quality into products and practices right from the beginning


Total Quality Management understanding of the changing needs of the internal

and external customers, and stakeholders, and satisfying them in a cost effective manner

instituting leadership in place of mere supervision so that every individual performs in the best possible manner to improve quality and productivity, thereby continually reducing total cost

eliminating barriers between people and departments so that they work as teams to achieve common objectives

instituting flexible programs for training and education, and providing meaningful measures of performance that guide the self-improvement efforts of everyone involved.

Dimensions of Quality:Manufacturing Organizations Conformance

the degree to which a product characteristic meets preset standards

Performance such as acceleration of a vehicle

Reliability that the product will function as

expected without failure

Dimensions of Quality:Manufacturing Organizations Features

the extras that are included beyond the basic characteristics

Durability expected operational life of the product

Serviceability how readily a product can be repaired

Dimensions of Quality:Manufacturing Organizations Aesthetics

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

Safety assurance that customer will not suffer

injury or harm from a product Perceptions

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

Dimensions of Quality:Service Organizations Time and Timeliness

How long must a customer wait for service, and is it completed on time?

Is an overnight package delivered overnight? Completeness

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

when delivered? Courtesy

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

pleasant?

Dimensions of Quality:Service Organizations Consistency

Is the same level of service provided to each customer each time?

Is your newspaper delivered on time every morning? Accessibility and convenience

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

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

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

customer’s questions?

Cost of Quality Quality affects all aspects of the

organization and has dramatic cost implications

External Failure CostsAppraisal Costs

Internal Failure CostsPrevention Costs

Quality Failure CostsQuality Control Costs

Quality Control Costs costs necessary for achieving high quality

Costs incurred in the process of preventing poor quality from occurring.

Costs incurred in the process of uncovering defects.

Prevention Costs

Appraisal Costs

Prevention Cost Quality planning costs

costs of developing and implementing quality management program

Product-design costs costs of designing products with quality

characteristics Process costs

costs expended to make sure productive process conforms to quality specifications

Prevention Cost Training costs

costs of developing and putting on quality training programs for employees and management

Information costs costs of acquiring and maintaining data related

to quality, and development of reports on quality performance

Appraisal Cost Inspection and testing

costs of testing and inspecting materials, parts, and product at various stages and at the end of a process

Test equipment costs costs of maintaining equipment used in testing quality

characteristics of products Operator costs

costs of time spent by operators to gar data for testing product quality, to make equipment adjustments to maintain quality, and to stop work to assess quality

Quality Failure Costs cost consequences of poor quality

Costs associated with discovering poor product quality before the product reaches the customer.

Costs associated with quality problems that occur at the customer site.

Internal Failure Costs

External Failure Costs

Internal Failure Cost Scrap costs

costs of poor-quality products that must be discarded, including labor, material, and indirect costs

Rework costs costs of fixing defective products to conform to

quality specifications Process failure costs

costs of determining why production process is producing poor-quality products

Internal Failure Cost Process downtime costs

costs of shutting down productive process to fix problem

Price-downgrading costs costs of discounting poor-quality products—

that is, selling products as “seconds”

External Failure Cost Customer complaint costs

costs of investigating and satisfactorily responding to a customer complaint resulting from a poor-quality product

Product return costs costs of handling and replacing poor-quality

products returned by customer Warranty claims costs

costs of complying with product warranties

External Failure Cost Product liability costs

litigation costs resulting from product liability and customer injury

Lost sales costs costs incurred because customers are

dissatisfied with poor quality products and do not make additional purchases

Cost of Quality The earlier defects are found, the less

costly they are to correct. Example:detecting and correcting defects

during product design and product production is considerably less expensive than when the defects are found at the customer site

Cost of Quality

Evolution of Total Quality Management

Quality GurusQuality Guru Main Contribution

Walter A. Shewhart-contributed to understanding of process variability-developed concept of statistical charts

W. Edwards Deming-stressed management’s responsibility for quality-developed “14 points” to guide companies in quality improvement

Joseph M. Juran-defined quality as “fitness for use”-developed concept of cost quality

Armand V. Feigenbaum -introduced concept of total quality control

Philip B. Crosby-coined phrase “quality is free”-introduced concept of zero defects

Kaoru Ishikawa-developed cause-and-effect diagrams-identified concept “internal customer

Genichi Taguchi-focused on product design quality-developed Taguchi loss function

Deming’s 14 Points 1. Create constancy of purpose2. Adopt philosophy of prevention3. Cease mass inspection4. Select a few suppliers based on quality5. Constantly improve system and workers6. Institute worker training7. Instil leadership among supervisors8. Eliminate fear among employees9. Eliminate barriers between departments10. Eliminate slogans11. Remove numerical quotas12. Enhance worker pride13. Institute vigorous training and education programs14. Develop a commitment from top management to implement

above 13 points

Total Quality Control Philosophy TQM Focuses on identifying quality

problem root causes Encompasses the entire organization Involves the technical as well as people

Total Quality Control Philosophy Customer focus Continuous

improvement Employee

empowerment Use of quality tools Product design Process management Managing supplier

quality

Goal is to first identify and then meet customer needs

TQM recognizes that a perfectly produced product has little value if it is not what the customer wants

Quality is customer driven.




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A philosophy of never-ending improvement

The Plan–Do–Study–Act Cycle

Benchmarking




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to seek out quality problems and correct them

Employees are rewarded for uncovering quality problems, not punished




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External customers those that purchase

the company’s goods and services

Internal customers employees of the

organization who receive goods or services from others in the company




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Team Approach Two heads are

better than one Using techniques such

as brainstorming, discussion, and quality control tools, teams work regularly to correct problems.

The contributions of teams are considered vital to the success of the company.




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Quality Circle A team of volunteer

production employees and their supervisors who meet regularly to solve quality problems.




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Employees need to identify and correct quality problems so they need proper training

They need to understand how to assess quality by using a variety of quality control tools, how to interpret findings, and how to correct problems




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Seven Tools of Quality Control




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Quality Function Deployment A tool used to translate

the preferences of the customer into specific technical requirements




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QFD encompasses Customer requirements Competitive evaluation Product characteristics Relationship matrix Trade-off matrix Setting Targets




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Reliability The probability that a

product, service, or part will perform as intended.

No product is 100% certain to function properly

Reliability is a probability function dependent on sub-parts or components




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Reliability Reliability of a system is

the product of component reliabilities

RS = (R1) (R2)... (Rn) RS = reliability of the

product or system R1 = reliability of the

components Increase reliability by

placing components in parallel




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Reliability Parallel components

allow system to operate if one or the other fails

RS = R1 + (R2* Probability of needing 2nd component)




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Quality products come from quality sources

Quality must be built into the process




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Quality at the source a belief that it is better

to uncover source of quality problems and correct it

TQM extends to quality of product from company’s suppliers




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An inspection performed to check the quality of materials that has arrived is viewed as a practice contributing to poor quality and wasted time and cost.




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TQM extends the concept of quality to suppliers and ensures that they engage in the same quality practices.

Quality Awards and Standards Philippine Quality Award Malcolm Baldrige National Quality Award

(MBNQA) The Deming Prize ISO 9000 Certification ISO 14000 Standards

Philippine Quality Award Sets a standard of excellence to help

Filipino organizations achieve world-class performance and serves as a “template” for competitiveness based on the principles of Total Quality Management (TQM).

A national quality award comparable with the Malcolm Baldrige National Quality Award (MBNQA) of the US and those in Europe and Asia.

Malcolm Baldrige National Quality Award (MBNQA) Award named after the former Secretary

of Commerce – Regan Administration Intended to reward and stimulate quality

initiatives Given to no more that two companies in

each of three categories; manufacturing, service, and small business

Past winners; Motorola Corp., Xerox, FedEx, 3M, IBM, Ritz-Carlton

The Deming Prize Given by the Union of Japanese Scientists

and Engineers since 1951 Named after W. Edwards Deming who

worked to improve Japanese quality after WWII

Not open to foreign companies until 1984 Florida P & L was first US company winner

ISO 9000 Standards Certification developed by International

Organization for Standardization Set of internationally recognized quality

standards Companies are periodically audited &

certified

ISO 9000 Standards ISO 9000:2000 QMS

Fundamentals and Standards Provides the terminology and definitions used in the

standards. It is the starting point for understanding the system

of standards.

ISO 9001:2000 QMS Requirements

This is the standard used for the certification of a firm’s quality management system.

It is used to demonstrate the conformity of quality management systems to meet customer requirements.

ISO 9000 Standards ISO 9004:2000 QMS

Guidelines for Performance Provides guidelines for establishing a quality

management system. It focuses not only on meeting customer

requirements but also on improving performance.

More than 40,000 companies have been certified

ISO 14000 Standards Focuses on a company’s environmental

responsibility

Why TQM Efforts Fail Lack of a genuine quality culture

Lack of top management support and commitment

Over- and under-reliance on statistical process control

TQM Within Operations Management TQM is broad sweeping organizational

change TQM impacts

Marketing providing key inputs of customer information

Finance evaluating and monitoring financial impact

Accounting provides exact costing

TQM Within Operations Management

Engineering translate customer requirements into specific

engineering terms Purchasing

acquiring materials to support product development Human Resources

hire employees with skills necessary Information systems

increased need for accessible information

Reference www.wiley.com Wiley and Sons

The Plan–Do–Study–Act Cycle A diagram that describes the activities

that need to be performed to incorporate continuous improvement into the operation.

Also called the Deming Wheel after originator

Circular, never ending problem solving process


Plan Do Study Act

Evaluate current process Collect procedures, data, identify

problems Develop an improvement plan,

performance objectives


Plan Do Study Act

Implement the plan – trial basis


Plan Do Study Act

Collect data and evaluate against objectives


Plan Do Study Act

Communicate the results from trial If successful, implement new

process

Benchmarking Studying the business practices of other

companies for purposes of comparison

Seven Tools of Quality Control Cause-and-Effect

Diagrams Flowcharts Checklists Control Charts Scatter Diagrams Pareto Analysis Histograms

A chart that identifies potential causes of particular quality problems.

Cause-and-effect diagrams are problem-solving tools commonly used by quality control teams.



Specific causes of problems can be explored through brainstorming.

The development of a cause-and-effect diagram requires the team to think through all the possible causes of poor quality.

QualityProblemQuality

Problem

Out of adjustmentOut of adjustment

Tooling problemsTooling problems

Old / wornOld / worn

MachinesMachinesFaultyFaulty testing equipmenttesting equipment

Incorrect specificationsIncorrect specifications

Improper methodsImproper methods

MeasurementMeasurement

Poor supervisionPoor supervision

Lack of concentrationLack of concentration

Inadequate trainingInadequate training

HumanHuman

DeficienciesDeficienciesin product designin product design

Ineffective qualityIneffective qualitymanagementmanagement

Poor process designPoor process design

ProcessProcess

InaccurateInaccuratetemperature temperature controlcontrol

Dust and DirtDust and Dirt

EnvironmentEnvironment

Defective from vendorDefective from vendor

Not to specificationsNot to specifications

Material-Material-handling problemshandling problems

MaterialsMaterials



A schematic of the sequence of steps involved in an operation or process

It provides a visual tool that is easy to use and understand.

Often the first step in Process Re-Engineering



A list of common defects and the number of observed occurrences of these defects.

A checklist can also be used to focus on other dimensions, such as location or time.



Charts used to evaluate whether a process is operating within set expectations.



Graphs that show how two variables are related to each other

They are particularly useful in detecting the amount of correlation, or the degree of linear relationship, between two variables.



A technique used to identify quality problems based on their degree of importance.

Often called the 80-20 Rule

Principle is that quality problems are the result of only a few problems e.g. 80% of the problems caused by 20% of causes



A chart that shows the frequency distribution of observed values of a variable

Business

Total quality management report