of 48 /48
1 Chapter 5 - Total Quality Management Mudassar Salman

Total Quality Management (TQM)

Embed Size (px)

Text of Total Quality Management (TQM)

Page 1: Total Quality Management (TQM)


Chapter 5 - Total Quality Management

Mudassar Salman

Page 2: Total Quality Management (TQM)


Learning Objectives Explain the meaning of TQM Identify features of the TQM philosophy Describe the four dimensions of Quality Identify the costs of Quality Identify tools used for solving Quality

problems Quality awards and Quality certifications Identify Quality leaders and their


Page 3: Total Quality Management (TQM)


What is TQM?

Meeting quality expectations as defined by the customer

Integrated organizational effort designed to improve quality of processes at every business level

Page 4: Total Quality Management (TQM)


Defining Quality – 5 Ways 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

Page 5: Total Quality Management (TQM)


Manufacturing Quality vs. Service Quality Manufacturing quality focuses on

tangible product features Conformance, performance, reliability, features,

durability, serviceability Service organizations produce

intangible products that must be experienced Quality often defined by perceptional factors

like courtesy, friendliness of staff, promptness in resolving complaints, atmosphere, waiting time, consistency

Page 6: Total Quality Management (TQM)


Dimensions of Quality for Manufacturing vs. Service Organizations

Manufacturing Conformance to

specifications Performance Reliability Features Durability Serviceability

Service Tangible factors Consistency Responsiveness to

customer needs Courtesy /

friendliness Timeliness /

promptness Atmosphere

Page 7: Total Quality Management (TQM)


Quality in Practice Motorola and GE attribute their success

to having one of the best quality management programs in the world.

Six-Sigma was implemented Levels of defects is reduced to 3.4 parts per

million Everyone is trained in quality improvement

principles and techniques Black-Belt – their full time job is to identify

and solve quality problems

Page 8: Total Quality Management (TQM)


Cost of Quality Quality effects all aspects of the organization and have

dramatic cost implications Most obvious consequence of poor quality is dissatisfied

customers and eventual loss of business Prevention costs – cost of preparing and implementing a

quality plan Appraisal costs – cost of testing, evaluating and

inspecting quality Internal failure costs – cost of scrap, rework, and material

losses External failure costs – cost of failure at customer site,

including returns, repairs and recalls External failures can sometimes put a company out of

business almost overnight External failure costs tend to be particularly high for service


Page 9: Total Quality Management (TQM)


Cost of Defects

Page 10: Total Quality Management (TQM)


The Evolution of TQM Early 20th century – Quality meant

inspection. Reactive in nature 1980s – Quality began to have strategic

meaning. Proactive in nature Successful companies understand that

quality provides a competitive advantage Put customer first, and define quality as

meeting or exceeding customers expectation

Quality excellence has become a standard for doing business

Page 11: Total Quality Management (TQM)


Evolution of TQM – New Focus

Page 12: Total Quality Management (TQM)


Quality Gurus Walter A. Shewhart (1920s & 1930s)

Grandfather of quality control Contributed to understand the process of variability Developed concept of statistical control charts

W. Edwards Deming (1940s & 1950s) Father of quality control Stressed management’s responsibility for quality Developed “14 points” to guide companies in quality

improvement Japanese established “Deming Prize” in his name 15% of quality problems are actually due to worker error 85% of quality problems are caused by systems and


Page 13: Total Quality Management (TQM)


Quality Gurus – contd. Joseph M. Juran (1950s)

Defined quality as “fitness for use” Developed concept of cost of quality Originated idea of quality triology

Quality planning Quality control Quality improvement

Armand V. Feigenbaum (1960s) Introduced the concept of total quality control

Philip B. Crosby (1970s) Coined phrase “quality is free” Introduced concept of zero defects Developed the phrase “Do it right the first time”

Page 14: Total Quality Management (TQM)


Quality Gurus – contd. Kaoru Ishikawa

Developed cause-and-effect diagrams Identified concept of “internal customer” Introduced the concept of “quality circles”

Genichi Taguchi Focused on product design quality Developed Taguchi loss function

Costs of quality increase as a quadratic function as conformance values move away from target

Robust Design A design that results in a product that can perform

over a wide range of conditions

Page 15: Total Quality Management (TQM)


Traditional view of the cost of conformance

Page 16: Total Quality Management (TQM)


Taguchi view of the cost of non-conformance – The Taguchi loss function

Page 17: Total Quality Management (TQM)


TQM Philosophy – What’s Different?

TQM attempts to embed quality in every aspect of the organization

Focus on Customer Identify and meet customer needs Stay tuned to changing needs, e.g. fashion styles

Continuous Improvement Continuous learning and problem solving, e.g. Kaizen,

6 sigma Quality at the Source

Inspection vs. prevention & problem solving Employee Empowerment

Empower all employees; external and internal customers

Team approach, quality circle

Page 18: Total Quality Management (TQM)


TQM Philosophy– What’s Different? (continued)

Understanding Quality Tools Ongoing training on analysis, assessment, and

correction, & implementation of quality tools Team Approach

Teams formed around processes – 8 to 10 people

Meet weekly to analyze and solve problems Benchmarking

Studying practices at “best in class” companies Managing Supplier Quality

Certifying suppliers vs. receiving inspection

Page 19: Total Quality Management (TQM)


Four Dimensions of Quality Quality of design

Determining which features to include in the final design

Quality of conformance to design Production processes are set up to meet

design specifications Ease of use

Instructions, operation, maintenance, safety

Post-sale service Responsiveness, rapid repair, p.m., spare


Page 20: Total Quality Management (TQM)


Cost of Quality – 4 Categories

Early detection/prevention is less costly May be less by a factor of 10

Page 21: Total Quality Management (TQM)


Ways of Improving Quality Plan-Do-Study-Act Cycle (PDSA)

Also called the Deming Wheel after its originator Circular, never ending problem solving process

Quality Function Deployment Used to translate customer preferences to


Seven Tools of Quality Control Tools typically taught to problem solving teams

Page 22: Total Quality Management (TQM)


PDSA Details Plan

Evaluate current process Collect procedures, data, identify problems Develop an improvement plan, performance

objectives Do

Implement the plan – trial basis Study

Collect data and evaluate against objectives Act

Communicate the results from trial If successful, implement new process

Page 23: Total Quality Management (TQM)


PDSA (continued)

Cycle is repeated After act phase, start planning and repeat


Page 24: Total Quality Management (TQM)


Quality Function Deployment A tool used to translate the preferences of the

customer into specific technical requirements QFD begins by identifying customer requirements,

coming from marketing department These requirements are numerically scored,

based on their importance, and scores are translated into specific product characteristics

Comparison of product is made with its competitors, relative to identified characteristics

Specific goals are set to address identified problems

The resulting matrix looks like a picture of house and is often called the “house of quality”

Page 25: Total Quality Management (TQM)


QFD – Contd. Customer requirements

Survey customers to find out what they specifically need in our product

Focus groups, telephonic interviews, directly talk to customers

Competitive Evaluation How our product compares to those of

competitors Evaluation scale is from one to five Higher the rating, the better

Page 26: Total Quality Management (TQM)


QFD – Contd. Product Characteristics

Specific product characteristics are on top of relationship matrix

The Relationship Matrix The strength of relationship between customer

requirements and product characteristics is shown in the relationship matrix

A negative relationship means that as we increase the desirability of one variable, we decrease the desirability of other

A positive relationship means that as increase in desirability of one variable is related to an increase in the desirability of another

Page 27: Total Quality Management (TQM)


QFD – Contd. The Trade-off Matrix

The roof of house is put through trade-off matrix Shows how each product characteristics is

related to the others What trade-offs we need to make

Setting Targets The bottom row of the house is the output of

QFD These are specific, measurable product

characteristics that have been formulated from general customer requirements

Page 28: Total Quality Management (TQM)


QFD Details Process used to ensure that the product meets

customer specifications

Voice of theengineer

Voice of the



Page 29: Total Quality Management (TQM)


QFD - House of Quality

Adding trade-offs, targets & developing product specifications




Page 30: Total Quality Management (TQM)


Seven Problem Solving Tools

Cause-and-Effect Diagrams Flowcharts Checklists Control Charts Scatter Diagrams Pareto Analysis Histograms

Page 31: Total Quality Management (TQM)


Cause-and-Effect Diagrams Called Fishbone Diagram Focused on solving identified quality problem

Page 32: Total Quality Management (TQM)


A general cause-and-effect diagram

Page 33: Total Quality Management (TQM)


Flowcharts Used to document the detailed steps in a

process Often the first step in Process Re-Engineering

Page 34: Total Quality Management (TQM)


Checklist Simple data check-off sheet designed to

identify type of quality problems at each work station; per shift, per machine, per operator

Page 35: Total Quality Management (TQM)


Control Charts Important tool used in Statistical Process

Control – Chapter 6 The UCL and LCL are calculated limits used

to show when process is in or out of control

Page 36: Total Quality Management (TQM)


Scatter Diagrams A graph that shows how two variables

are related to one another Data can be used in a regression analysis

to establish equation for the relationship

Page 37: Total Quality Management (TQM)


Pareto Analysis Technique that displays the degree of importance for each

element Named after the 19th century Italian economist 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

Page 38: Total Quality Management (TQM)


Histograms A chart that shows the frequency distribution of

observed values of a variable like service time at a bank drive-up window

Displays whether the distribution is symmetrical (normal) or skewed

Page 39: Total Quality Management (TQM)


Reliability The probability that a product, service. Or part will perform,

as intended. No product is guaranteed with 100% certainty to function

properly High reliability is an important part of customer-oriented

quality The reliability of a product is a direct function of the

reliability of its component parts. If all the parts in a product must work for the product to

function, then the reliability of the system is computed as product of the reliabilities of the individual components:

Rs = (R1)(R2)(R3)……(Rn)Where Rs = reliability of the product or system

R1…n = reliability of components 1 through n

Page 40: Total Quality Management (TQM)


Reliability – contd. The more components a product has, the lower

its reliability The failure of certain products can be very

critical. One way to increase product relaibility is to build

redundancy into product design in the form of backup parts

Redundancy is built into the system by placing components in parallel.

When one component fails, the other takes overRs = (Reliability of 1st component) + {(reliability of 2nd component) x (probability of needing 2nd component)}

Page 41: Total Quality Management (TQM)


Process Management A quality product comes from a quality

process Quality at source

The belief that it is best to uncover the source of quality problems and eliminate it

Managing Supplier quality The philosophy of TQM extends to concept

of quality suppliers and ensures that they engage in the same quality practices

If suppliers meet quality standards, materials do not have to be inspected upon arrival

Page 42: Total Quality Management (TQM)


Quality Awards and Standards

Malcolm Baldrige National Quality Award

The Deming Prize ISO 9000 Certification ISO 14000 Standards

Page 43: Total Quality Management (TQM)


MBNQA- What Is It? 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; FedEx, 3M, IBM, Ritz-Carlton Typical winners have scored around 700


Page 44: Total Quality Management (TQM)


MBNQA Criterion

Categories Points1. Leadership 1202. Strategic Planning 853. Customer and Market Focus 854. Information and Analysis 905. Human Resource Focus 856. Process Management 857. Business Results 450Total Points 1000

Page 45: Total Quality Management (TQM)


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


Not open to foreign companies until 1984

Florida P & L was first US company winner

Page 46: Total Quality Management (TQM)


ISO Standards ISO 9000 Standards:

Certification developed by International Organization for Standardization

Set of internationally recognized quality standards

Companies are periodically audited & certified ISO 9000:2000 QMS – Fundamentals and Standards ISO 9001:2000 QMS – Requirements ISO 9004:2000 QMS - Guidelines for Performance More than 40,000 companies have been certified

ISO 14000: Focuses on a company’s environmental


Page 47: Total Quality Management (TQM)


Why TQM Efforts Fail

Lack of a genuine quality culture

Lack of top management support and commitment

Over- and under-reliance on SPC methods

Page 48: Total Quality Management (TQM)


Chapter 5 Highlights TQM focuses on serving the customer’s quality

needs TQM uses continuous improvement, quality at the

source, employee empowerment, quality tools, teams, benchmarking, and supplier certification

Four dimensions: product/service design, conformance, easy of use, post-sale support

Quality costs; prevention, appraisal, internal & external failures

QFD and Seven Quality Tools used in managing quality

The MBNQA, Deming Prize, and ISO Certification help focus on quality improvement and excellence

The seven Quality Gurus all made key contributions