TQM In service industry

7/29/2019 TQM In service industry

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What is Quality?

Quality is “fitness for use”

(Joseph Juran)

Quality is “conformance to requirements”

(Philip B. Crosby)

Quality of a product or services is its ability to satisfythe needs and expectations of the customer



What is TQM?

Constant drive

for continuousimprovement and

learning.

Concern for

employee

involvement anddevelopment

Management

by Fact

Result Focus Passion to delivercustomer value /

excellence

Organisation

responseability

Actions not just

words(implementation)

Process

Management

Partnership

perspective(internal /

external)



TQM is an integrated organisational approach in delighting

customers by meeting their expectations on a continuous basis

through everyone involved with the organisation working on

continous improvement in all services, products and processes

along with proper problem- solving methodology.

TQM is built on a foundation of ethics, integrity and trust. It

fosters openness, fairness and sincerity and allows involvement by

everyone. This is the key to unlocking the ultimate potential of TQM

Communication is a strong mortar of TQM. Communication

means a common understanding of ideas between the sender and

the receiver. The success of TQM demands communication with

and among all the organization members, suppliers and customers



Evolution of TQM

The concept of Total Quality Management (TQM)

was developed by an American, W. Edwards

Deming, after World War II for improving the

production quality of goods and services. Mr.

Deming is regarded as ―The quality Guru who never gave up.‖

But it was the Japanese who adopted TQM more

seriously in 1950 to resurrect their postwar business

and industry, used it to dominate world markets by

1980.



Contd.

The 1980‘s saw an explosion in the use of

statistical methods and quality methodology inboth manufacturing and non-manufacturing

organisations.

Mr. Subodh Bhargava, Chief Executive of Eicher,

recently revealed an interesting fact that TQM is

not new to India and its roots in Indian ancientscriptures like the Upanishads and the Srimad

Bhagavadgita.



Importance of TQM for services sector

Total Quality Management is the key mantra for the manufacturing

industry, but its benefits have been better realized by intense

customer-oriented service industries — be it fast moving consumer goods (FMCG), retail, hospitality, telecom or banking.

In service organisations, the TQM challenge lies in establishing

smooth connectivity between business processes so as to retain the

customer.

A quality control approach to cover all processes would be beneficial

to every Organisation.. Since in a service industry every aspect of

quality is associated with every employee, quality Control department

has a key and a very important role to play.

Putting in place an effective TQM mechanism in a service industry

requires patience and commitment on the part of the management and

the workforce to satisfy the customer.



Contd.

Over 60 % of the organization's future revenue will come from the existing

customers.

A 2 percent increase in customer retention has an equivalent impact

upon profitability as a 10 percent reduction in operating costs.

Upto 96% of unhappy customers do not in fact complain, but they are

three times more likely to communicate a bad experience to other customers than a good one

If a customer complains and the organization responds effectively to the

product or service failure, then the loyalty of the customer can actually

increase

It costs 5 times as much to attract a new customer as it costs to keep an

old one.



― In the future there will be two kinds of companies

– those who have implemented Total Quality andthose who have gone out of business; you do not

have to do this since survival is not compulsory‖

-Dr. Edward Deming

The Principles of Total Quality Management

(TQM) are now recognised characteristic of most

of the successful businesses world over.



Learning

LEARNING AND TQM

Process Improvement

Quality Improvement

Customer

Satisfaction

Shareholder

Satisfaction

Employee

Satisfaction



TOTAL QUALITY MANAGEMENT

Continuous Improvement or Kaizen

Quality Circles

Benchmarking

Just-in-Time (JIT)

Taguchi Concepts

Knowledge of TQM Tools



Kaizen Practice

Kaizen programme can be divided into three

segments depending upon the complexity.

1.Management- oriented Kaizen

2.Group- Oriented Kaizen

3.Individual- Oriented Kaizen



Kaizen Movement or 5S movement

Seiri – straighten up

Seiton means putting things in order

Seiso means to clean up

Seiketsu means personal cleanliness

Shitsuke means discipline



Quality Circle

QC is a small group of employees in the same workarea

or doing a similar type of work who voluntarily meet

regularly to identify, analyze and resolve work- related

problems , leading to improvement in their total

performance and enrichment of their worklife

Bharat Heavy Electricals Limited (BHEL), an engineering company was

the first one to initiate quality circles in India.



Some organisations in India give different

Individual to quality Circles .. For instance

Air India- Jet Quality Circles, 7 Aces, Safe

Air Quality Circles, Quality Brothers etc..BHEL call Quality circles by their serial

numbers like QC1, QC2, QC3, QC4 etc..

Madras Motors- Vallavar, Ganga, Bharthi

etc..



Benchmarking

Benchmarking is the systematic comparison of

elements of performance of an organisation

against those of other organizations, usually with

the aim of mutual improvement.



Types of Benchmarking

Internal Benchmarking

Competitive Benchmarking

Functional Benchmarking

Generic Benchmarking



Just In Time (JIT)

Just- in time is an approach to minimize waste in manufacturingin the form of time, materials, energy and error.

The objectives of JIT are

1) To reduce the set up times and lot sizes2) To achieve ‗zero defects‘ goal in manufacturing

3) To focus on continuous improvement

4) To eliminate waste and all non-value adding activities by systematically

identifying these.



3M‘s- Muda, Muri & Mura

These 3 Ms should be avoided to implement of JIT

◘Muda means Waste

◘Muri means Excess

◘Mura means unevenness



Taguchi Concepts

Taguchi Concepts provides an alternative for therelationship between the performance of cost andquality.

Taguchi further maintains that the relationship is quadratic

and the cost varies with the square of the deviation fromthe target . The Taguchi loss function is thereforerepresented by

L(Y) =K(Y-M)2 where

L= Loss associated with parameter YM= target expected

K= Constant



Capability Maturity Model (CMM)

It is a way to develop and refine an

organization's processes mainly for the

purpose of developing and refining software

development processes.

The model describes the maturity of the

company based upon the project the company

is handling and the related clients.



The CMM was originally intended as a tool to evaluate theability of government contractors to perform a contracted

software project. Though it comes from the area of

software development, it can be, has been, and continues

to be widely applied as a general model of the maturity of processes



Pareto Analysis

Pareto, an Italian economist discovered a

universal relationship between value andquantity.

He used this technique for assessing

uneven distribution of wealth.

Pareto charts gave rise to ―80-20 rule‖ which

suggests that 80 percent of an organization's

problems came from 20 percent of its tasks.

Pareto Analysis helps in identification of the

―Vital few‖ from the ―trivial many‖ at a glance.



Pareto Analysis can be carried out for the

problems of a company which are

contributed by the following:

Working Systems

Operating Costs

Facilities

Manpower



Uses statistics & control charts to tellwhen to adjust process

Developed by Shewhart in 1920‘s

Involves Creating standards (upper & lower limits)

Measuring sample output (e.g. mean wgt.)

Taking corrective action (if necessary)

Statistical Process Control

(SPC)



Process Control Chart

Plot of Sample Data Over Time

0

20

40

60

80

1 5 9 13 17 21

Time

S a m p l e V a l Sample

ValueUCL

Average

LCL



National Awards of Different Countries:

Malcolm Baldrige National Quality Award (United States)

The Deming Prize (Japan)

Golden Peacock National Quality Award (India)

British Quality Award (UK)

Egyptian Quality Award

Turkish Standard Institution Award (Turkey)French National Quality Award

Australian Quality Award



A list of Awards related to Quality

The Margaret Chase Smith Maine State Quality Award

Shingo Prize for Excellence in Manufacturing

The NASA Excellence Award/ George M. Low Award

The North Corolina Quality Leadership Award

Rajiv Gandhi Foundation Quality Award (India)

The Florida Sterling Award

California‘ s Eureka Award

Siemens and Sun Win Philip Crosby Award for Quality

Connecticut Quality Improvement Award



The most prestigious Quality Awards in the World are

The Deming Prize

The Malcolm Baldrige National Quality Award and

The European Quality Award



Some of the Award Winners of Macolm Baldrige National

Quality Award are:

1. Ames Rubber Corporation

2. AT&T

3. Eastman Chemical Company

4. Motorola Inc.

5. Zytec Corporation

6. Xerox Corporation- Business Products &Systems

7. The Ritz-Carlton Hotel Company

8. Marlow Industries

9. Cardillac Motor Car Company

10. IBM Rochester

11. Globe Metallurigical Inc.



Big Growth of the Service Sector

According to the survey by the Economic Times in 1992, The service

sector is a the threshold of the tremendous growth . Service and

knowledge workers are estimated to constitute 80% of the workforce with

the manufacturing sector contributing to only the rest 20 percent.

According to a recent survey of the top ranking organisation in Europe ,89 percent of the respondents said that quality was the primary buying

argument for the ultimate customer.

TQM is supported and adopted not only by the manufacturing industries

but also by the banks, hospitals, educational institutions, hotels and

community development projects.



Quality is a Journey,

not a Destination

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TQM In service industry