Examination Paper of Quality Management

IIBM Institute of Business Management

Examination Paper MM.100
Total Quality Management
Section A: Objective Type & Short Questions (30 Marks)
Part One:
Multiple Choices:
1. Which of the following techniques is used by quality Control Circles?
a. Brainstorming
b. Pareto Analysis
c. Check Sheets
d. All of the above
2. It is a means of getting a large number of ideas from a group of people in a
very short time.
a. Brainstorming
b. Pareto Analysis
c. Check Sheets
d. None
3. Cause and effect diagram is an investigation tool. This is also
called_____________
a. Ishikawa
b. Histogram
c. Both (a) & (b)
d. None
4. SPC stands for______________
a. Statistical Progress Control
b. Statistical Process Control
c. Statistical Planning Control
d. None
5. DMAIC stands for__refers to a data-driven improvement cycle used for
improving, optimizing and stabilizing business processes and
designs__________
6. It is a structured process to design products and services based on the
customers‟ needs.
a. Quality Function Development
b. Quality Function deployment
c. Information
Examination Paper of Quality Management
2
IIBM Institute of Business Management
d. None
7. Six Sigma is a business management strategy originally developed
by___________
a. Motorola
b. Toyota
c. Wipro
d. None
8. The basic plan-do-study-act (PDSA) cycle was first developed by
a. Deming
b. Shewhart
c. Juran
d. Fleming.
9. The quality system other than ISO 9000
a. PS 9000
b. CS 9000
c. AS 9000
d. LS 9000
10. The multiplication of importance of customer, scale up facture and sales
point is called
a. Relative weight
b. Absolute weight
c. Weight of scale
d. Weight of sales

Part Two:
1) Discuss the concept of Business Process Reengineering.
ANS: Business Process Reengineering (BPR) is a management approach
aiming at improvements by means of elevating efficiency and effectiveness of
the processes that exist within and across organizations.

1.Introduction:
Business Process Reengineering (BPR) is a management approach aiming at
improvements by means of elevating efficiency and effectiveness of the
processes that exist within and across organizations. The key to BPR is for
organizations to look at their business processes from a “clean slate”
perspective and determine how they can best construct these processes to
improve how they conduct business.
Business process reengineering is also known as BPR, Business Process
Redesign, Business Transformation, or Business Process Change Management.
In 1990, Michael Hammer, a former professor of computer science at the
Massachusetts Institute of Technology (MIT), published an article in the
Harvard Business Review, in which he claimed that the major challenge for
managers is to obliterate non-value adding work, rather than using technology
for automating it (Hammer 1990).
This statement implicitly accused managers of having focused on the wrong
issues, namely that technology in general, and more specifically information
technology, has been used primarily for automating existing work rather than
using it as an enabler for making non-value adding work obsolete.
Hammer’s claim was simple: Most of the work being done does not add any
value for customers, and this work should be removed, not accelerated through
automation. Instead, companies should reconsider their processes in order to
maximize customer value, while minimizing the consumption of resources
required for delivering their product or service.
A similar idea was advocated by Thomas H. Davenport and J. Short (1990), at
that time a member of the Ernst & Young research center, in a paper published
in the Sloan Management Review the same year as Hammer published his
paper.
This idea, to unbiased review a company’s business processes, was rapidly
adopted by a huge number of firms, which were striving for renewed
competitiveness, which they had lost due to the market entrance of foreign
competitors, their inability to satisfy customer needs, and their insufficient cost
structure. Even well established management thinkers, such as Peter Drucker
and Tom Peters, were accepting and advocating BPR as a new tool for (re-
)achieving success in a dynamic world.
During the following years, a fast growing number of publications, books as
well as journal articles, was dedicated to BPR, and many consulting firms
embarked on this trend and developed BPR methods. However, the critics were
fast to claim that BPR was a way to dehumanize the work place, increase
managerial control, and to justify downsizing, i.e. major reductions of the work
force 1995, Industry Week 1994), and a rebirth of Taylorism under a different
label.
Despite this critique, reengineering was adopted at an accelerating pace and by
1993, as many as 65% of the Fortune 500 companies claimed to either have
initiated reengineering efforts, or to have plans to do so. This trend was fueled
by the fast adoption of BPR by the consulting industry, but also by the study
Made in America, conducted by MIT, that showed how companies in many US
industries had lagged behind their foreign counterparts in terms of
competitiveness, time-to-market and productivity.
 2) What do you mean by process capability?

ANS:- Process capability is defined as a statistical measure of the inherent

process variability of a given characteristic. You can use a process-capability
study to assess the ability of a process to meet specifications.

During a quality improvement initiative, such as Six Sigma, a capability

estimate is typically obtained at the start and end of the study to reflect the level
of improvement that occurred.

Several capability estimates are in widespread use, including:

 Potential capability (Cp) and actual capability during production (Cpk) are
process capability estimates. Cp and Cpk show how capable a process is of
meeting its specification limits, used with continuous data. They are valuable
tools for evaluating initial and ongoing capability of parts and processes.
 "Sigma" is a capability estimate typically used with attribute data (i.e., with
defect rates).

Capability estimates like these essentially reflect the nonconformance rate of a

process by expressing this performance in the form of a single number.
Typically this involves calculating some ratio of the specification limits to
process spread.

3) Describe the advantages of „Statistical Quality Control‟.

ANS:- Advantages of Statistical Quality Control (SQC)
The main advantages of SQC are as follows
(i) It gives an early warning of defects. It provides a means of detecting errors at
inception.
(ii) Rework and scrap are minimized. Statistical Quality Control avoids the need
for and costs of cent per cent inspection by pointing out trouble spots.
(iv) SQC helps to maintain customer relations by ensuring uniformly high
quality.
(v) it helps to avoid unnecessary machine adjustments so long as the process is
in a state of control.
(vi) Provides a basis for attainable specifications.
(vii) It serves as a means of determining, the capability of the manufacturing
process to turn out products with prescribed specifications. Thus Statistical
Quality Control tends to prevent production or purchase of bad items and
therefore, it is superior to inspection.
4) Write a short note on „Quality Circles‟.
ANS:-

Quality Circle is a small group of 6 to 12 employees doing similar work who

Voluntarily meet together on a regular basis to identify improvements in their

respective work areas using proven techniques for analysing and solving
work related problems coming in the way of achieving and sustaining
excellence leading to mutual upliftment of employees as well as the
organisation. It is "a way of capturing the creative and innovative power that
lies within the work force".

If workers are prepared to contribute their ideas, the management must be

willing to create a congenial environment to encourage them to do so.

Concept:

The concept of Quality Circle is primarily based upon recognition of the value
of the worker as a human being, as someone who willingly activises on his job,
his wisdom, intelligence, experience, attitude and feelings. It is based upon the
human resource management considered as one of the key factors in the
improvement of product quality & productivity. Quality Circle concept has
three major attributes:
a. Quality Circle is a form of participation management.
b. Quality Circle is a human resource development technique.
c. Quality Circle is a problem solving technique

Section B: Caselets (40 marks)

Caselet 1
Questions:
1. Discuss the various labour troubles which compelled the company
management and its Dutch parents to decide to wind up the Calcutta plant.
What were the problems?
Ans:- In the wake of the booming consumer goods market in 1992, PIL decided
to modernize its Salt Lake factory located in Kolkata. Following this, the plant's
output was to increase from a mere 40000 to 2.78 lakh CTVs in three years. The
company even expected to win the Philips Worldwide Award for quality and
become the source of Philips Exports in Asia. PIL wanted to concentrate its
audio and video manufacturing bases of products to different geographic
regions.

In line with this decision, the company relocated its audio product line to Pune.
In spite of the move that resulted in the displacement of 600 workers, there were
no signs of discord largely due to the unions' involvement in the overall process.
By 1996, PIL's capacity expansion plans had fallen way behind the targeted
level.
The unions realized that the management might not be able to complete the task
and that their jobs might be in danger. PIL on the other hand claimed that it had
been forced to go slow because of the slowdown in the CTV market. However,
the unconvinced workers raised voices against the management and asked for a
hike in wage as well. PIL claimed that the workers were already overpaid and
under productive. The employees retaliated by saying that said that they
continued to work in spite of the irregular hike in wages. These differences
resulted in a 20-month long battle over the wage hike issue; the go-slow tactics
of the workers and the declining production resulted in huge losses for the
company.
In May 1998, PIL announced its decision to stop operations at Salt Lake and
production was halted in June 1998. At that point, PWU members agreed to the
Rs 1178 wage hike offered by the management. This was a climb down from its
earlier stance when the union, along with the PEU demanded a hike of Rs 2000
per worker and other fringe benefits. PEU, however, refused to budge from its
position and rejected the offer. After a series of negotiations, the unions and the
management came to a reasonable agreement on the issue of the wage structure.

2. How would you apply the Phillips India policy to help other electronics
companies in India to implement TQM?
Ans:- Decided closing Calcutta plant bust manager implement the TQM so we
suggest to other electronics company to apply the TQM system in her plant like
below strategy use Phillips The first step was total employees involvement. The
management adopted the strategy of managing people through involving,
empowering and motivating. The management re-established its future vision to
be an international design and production center and decided to benchmark with
international quality system standards ISO 9000. The main weakness of the
company during 1990 started converting into strength when labour unions
started participating intensively. A number of self-directed and self-directed and
self managing mini, micro and mega-teams were formed and assigned
responsibility and accountability under dynamic leaders. By 1995 the Calcutta
plant of Philips India became a model factory for its major competitors to envy-
its operations and turnaround.
Caselet 2

Questions:
1. What is the Top initiative in Siemens AG? Discuss it various aspects.
Ans:- The Top movement is based on a simple model: productivity, innovation,
and new markets are the pillars; the base is corporate culture; and the Top of the
temple is customer-orientation and profit ability. According to Heinrich Von
Pierer, President, Siemens AG, the Top initiative is not about re-engineering or
cost-cutting, the core theme is growth through innovation. “The motor driving
the Top initiative is cultural change-we must focus on our customers,” he says.
However, Top is not only about encouraging cultural change. In 1996, in the
course of three years, it has achieved cost savings of DM 20 billion. The Top
innovation initiative is made up of eight modules: mobilization, communication,
idea initiatives, teaching of operational skills, and cooperation with non-
industrial research, patent initiatives, white space projects, and strategic
innovation projects. The viewpoints and business objectives are different at
different places. For instance, in high-wage Germany, Top is an integral part of
Siemens AG‟s human resources and management motivation exercise. The
central unions are also involved. It was also an integral part of the company‟s
R&D drive. Siemens AG spends DM 7.3 billion on R&D every year. “A
company‟s innovative strength ultimately determines its long-term competitive
viability,” says Claus Weyrich, member of the managing board, Siemens AG.
For instance, the company has announced the „Siemens Inventor Prize‟. The 12
German recipients of the prize in 1996 hold 400 patents among them. Starting
from 1997, the prize has gone international. The aim is that Siemens AG‟s
annual total of 2,500 patents goes up. As a precursor to complete
internationalization, Siemens had launched an international „innovation
competition 1997‟, with a special category for young innovators whose
innovations may not have yet achieved practical applicability. Forty winners
from regional centers will be feted at Siemens‟ 150 years celebrations next
year. The fact that Siemens take its Top initiative very seriously. Indeed it is
apparent from its system of implementation through Top champions. Top
champions are senior managers who work full times as Top coordinators.
Internationally, the Top movement is coordinated through a Top center in
Munich, which even has a home-page on the Internet to interact and coordinate
with Top manager across the world. All this is besides annual international
conferences held within and outside Germany. At Siemens India Ltd, Ranjeet
Dalvi is a full-time General Manager in charge of the Top program. Besides, the
company‟s 13 divisions each have at least one Top champion - a senior
manager with a large circle of influence, who is the divisional Top coordinator,
and reports directly to the divisional head. The resonance between Top
champions or divisions in various countries with each other and with Germany
also differs. In India, the evolution of the Top program has been naturally
different from that in Germany. The aims differ, to fit in with Siemens Ltd‟s
objectives: to increase its global presence substantially, and ensure that it stays
ahead of opportunities in the local market. “It is no longer enough that we serve
the local market.

2. What are the Top eight initiatives for innovation in Siemens AG?
Evaluate their impact on quality and TQM.
Ans:- Siemens AG use some strategy in her business and impact in her TQM
1) Performance and portfolio
 Solve mobile device
 Finalize strategic reorientation of I&C example- Com and SBS
 Reach target margin at all groups
 Build portfolio for 2X GDP growth
2) operational excellence
 Execute Siemens management system (power by top) with focus
on
I. Innovation
II. Customer focus
III. Global competitiveness
3) People excellence
 Achieve high performance culture
 Establish leadership excellence program
 Increased global talent pool
 Strengthen expert careers
4) Corporate responsibility
 Best in class
I. Corporate governance
II. Business practices
5) Continue focus on
 Sustainability
 Corporate citizenship

Section C: Applied Theory (30 marks)

1. Describe the TQM framework for quality improvement; also explain the
various benefits of TQM.
Ans:- Total Quality Management (TQM) is a management approach aimed at
satisfying all customer requirements, needs and expectations using a Continuous
Improvement approach .The TQM principles can be grouped into the following
practical and common sense concepts (Hari, 1995):
Customer Focus (internal and external customers)
Leadership (management role changes to active leadership)
Teamwork (multi-disciplinary teams, including involvement of customers and
suppliers)
Continuous Improvement of processes
Measurement (the improvement process is based on quantitative and qualitative
metrics)
Benchmarking as a driver to improvement in a competitive environment
The framework is outlined in Figure 1. Its components are described in the
following section.
The need to improve the quality of a certain portion of the company information
is identified, and an improvement process is INITIATED
(1). This is activated by any of the following information stakeholders:
customers (users), providers, solutions' suppliers, MIS organization, or company
management.
A TEAM (2) is formed. It includes representatives of the information customers
(users), information providers, information suppliers, information organization
and other stakeholders.
The team uses the CONTINUOUS IMPROVEMENT cycle of PDCA (Plan Do
Check Act) as the backbone of the improvement process. In the PLAN phase
(3), the customer needs are examined and translated into IQ dimensions and
then into IQ METRICS specifications
(4) , which become a critical part of the information solution specification. The
team BENCHMARKS
(5) IQ performance in external organizations/ functions/ information domains.
This allows the team to set world-class and at the same time realistic and
achievable targets and has a motivational effect on the team. In the DO
(6) phase, information specifications are translated into a solution. IQ targets,
expressed as quantitative METRICS, are designed into the solution.
In the CHECK
(7) phase, the team uses the METRICS to compare solution performance with a
pre-defined target. Gaps between customer needs/expectations and actual IQ are
identified.
In the ACT
(8) Phase, activities to close these gaps are agreed and implemented.
A new PDCA cycle begins
(9), in order to further improve the same information or handle a different
portion of the information used by the company. The process contributes to the
organization IQ metrics and dimensions KNOWLEDGE BASE
(10). IQ dimensions, metrics' and performance specifications are documented in
order to be used in future PDCA cycles.
The process is CUSTOMER FOCUSED
 (11), meaning that satisfaction of the customer needs serves as the overall
objective of the framework. The customer plays an active role throughout the
process.
The LEADERSHIP
(12) role is to deploy an IQ culture in which the improvement process can
flourish. Its responsibility includes: resource provision, improvement process
initiation, example setting in demanding, using and providing high quality
information.

The various benefits of TQM.

Total quality management (TQM) is a general philosophy of gradually
improving the operations of a business. This is done through the application of
rigorous process analysis by every involved employee and business partner.
TQM is usually applied at the tactical, front-line level, where production,
clerical, and low-level managers are deeply involved. There are a number of
tools available to assist in a TQM effort, such as:

 Benchmarking
 Failure analysis
 Plan-do-check-act (PDCA) cycle
 Process management
 Product design control
 Statistical process control

There is some debate regarding which tools fall within the umbrella of TQM, so
there are a number of other tools not mentioned here that could be of assistance.

TQM can be implemented successfully in any part of a business, such as:

 Accounting
 Field servicing
 Finance
 Legal and administration
 Maintenance
 Manufacturing
 Materials management
 Research and development
 Sales and marketing
2. Explain the followings.
a. Brainstorming
Ans- Brainstorming is a method for generating ideas to solve a design problem.
It usually involves a group, under the direction of a facilitator. The strength of
brainstorming is the potential participants have in drawing associations between
their ideas in a free-thinking environment, thereby broadening the solution
space.
Brainstorming is an extremely popular ideation technique for design teams
because of the freedom they have to expand in all directions, using out-of-the-
box and lateral thinking in search of the most effective solutions – rough
answers they’ll refine later. Marketing CEO Alex Osborn, brainstorming
“inventor”, captured the refined elements of creative problem-solving in his
1953 book, Applied Imagination. In brainstorming, we aim squarely at a design
problem and produce an arsenal of potential solutions. By not only harvesting
our own ideas but also considering and building on colleagues’ notions, we
cover the problem from every angle imaginable.

It is easier to tone down a wild idea than to think up a new one.

- Alex Osborn
Before a design team gather (preferably in a room with a large board/wall for
pictures/Post-Its) for a brainstorming session, the target problem must
be clearly defined. A good mix of participants will expand the experience pool,
thus broadening the idea space.

Brainstorming may seem to lack constraints, but success depends on the

observance of eight house rules and someone acting as facilitator.

1. Set a time limit – depending on the problem’s complexity, 15–60 minutes is

normal.
2. Begin with a target problem/brief – members should approach this sharply
defined question, plan or goal and stay on topic.
3. Refrain from judgment/criticism – no-one should be negative (including via
body language) about any idea.
4. Encourage weird and wacky ideas – further to the ban on killer phrases like
“too expensive”, keep the floodgates open so everyone feels free to blurt out
ideas, as long as they’re on topic.
5. Aim for quantity – remember, “quantity breeds quality”; the sifting-and-
sorting process comes later.
6. Build on others’ ideas – it’s a process of association where members expand
on others’ notions and reach new insights, allowing these ideas to trigger
their own. Say “and”—rather than discourage with “but”—to get ideas closer
to the problem.
7. Stay visual – diagrams and Post-Its help bring ideas to life and help others
see things in different ways.
8. Allow one conversation at a time – keeping on track this way and showing
respect for everyone’s ideas is essential for arriving at concrete results.

Capturing ideas in brainstorming sessions means someone plays “scribe”,

marking every idea on the board. Alternatively, write down your own ideas as
they come, and share these with the group. Often, design problems demand
mixed tactics: brainstorming and its sibling approaches – braindumping (for
individuals), and brainwriting and brainwalking (for group-and-individual
mixes).

Taking Care with Brainstorming

Brainstorming involves harnessing synergy – we leverage our collective
thinking towards a variety of potential solutions. However, having boundless
freedom presents challenges. In groups, introverts may stay quiet while
extroverts dominate. Whoever’s leading the session must “police” the team to
ensure a healthy, solution-focused atmosphere where even the shiest
participants feel fearless about speaking up. Likewise, a warm-up activity can
cure brainstorming “constipation” – e.g., asking participants to list ways the
world would be different if metal were like rubber.

Another risk is letting the team stray off topic and/or address other problems. As
we may use brainstorming in any part of our design process—including areas
related to a project’s main scope—sticking to the problem relevant to that part
(what Osborn called the “Point of View”) is vital. Similarly, framing problems
with “How Might We” questions helps us remember brainstorming is organic
and free of boundaries. Overall, brainstorming involves staying fluid in our
search for ways we might resolve an issue, not chasing a “holy grail” solution
developed elsewhere. The idea is to mine idea “ore” and refine “golden”
solutions from it later.

B. Pareto Analysis
Ans:- Pareto Analysis is a statistical technique in decision-making used for the
selection of a limited number of tasks that produce significant overall effect. It
uses the Pareto Principle (also known as the 80/20 rule) the idea that by doing
20% of the work you can generate 80% of the benefit of doing the entire job.
Take quality improvement, for example, a vast majority of problems (80%) are
produced by a few key causes (20%). This technique is also called the vital few
and the trivial many.

In the late 1940s Romanian-born American engineer and management

consultant, Joseph M. Juran suggested the principle and named it after Italian
economist Vilfredo Pareto, who observed that 80% of income in Italy went to
20% of the population. Pareto later carried out surveys in some other countries
and found to his surprise that a similar distribution applied.

We can apply the 80/20 rule to almost anything:

 80% of customer complaints arise from 20% of your products and

services.
 80% of delays in the schedule result from 20% of the possible causes of
the delays.
 20% of your products and services account for 80% of your profit.
 20% of your sales force produces 80% of your company revenues.
 20% of a systems defects cause 80% of its problems.

The Pareto Principle has many applications in quality control. It is the basis for
the Pareto diagram, one of the key tools used in total quality control and Six
Sigma.

In PMBOK, Pareto ordering is used to guide corrective action and to help the
project team take steps to fix the problems that are causing the greatest number
of defects first.

Pareto Analysis

Here are eight steps to identifying the principal causes you should focus on,
using Pareto Analysis:

1. Create a vertical bar chart with causes on the x-axis and count (number of
occurrences) on the y-axis.
2. Arrange the bar chart in descending order of cause importance that is, the
cause with the highest count first.
3. Calculate the cumulative count for each cause in descending order.
 4. Calculate the cumulative count percentage for each cause in descending
order. Percentage calculation: {Individual Cause Count} / {Total Causes
Count}*100
5. Create a second y-axis with percentages descending in increments of 10
from 100% to 0%.
6. Plot the cumulative count percentage of each cause on the x-axis.
7. Join the points to form a curve.
8. Draw a line at 80% on the y-axis running parallel to the x-axis. Then drop
the line at the point of intersection with the curve on the x-axis. This
point on the x-axis separates the important causes on the left (vital few)
from the less important causes on the right (trivial many).

Figure 1: Pareto Analysis Diagram

Here is a simple example of a Pareto diagram, using sample data showing the
relative frequency of causes for errors on websites. It enables you to see what
20% of cases are causing 80% of the problems and where efforts should be
focussed to achieve the greatest improvement. In this case, we can see that
broken links, spelling errors and missing title tags should be the focus.

The value of the Pareto Principle for a project manager is that it reminds you to
focus on the 20% of things that matter. Of the things you do for your project,
only 20% are crucial. That 20% produces 80% of your results. Identify, and
focus on those things first, but don't entirely ignore the remaining 80% of the
causes.
C. Control Charts

Ans- The control chart is a graph used to study how a process changes over
time. Data are plotted in time order. A control chart always has a central line for
the average, an upper line for the upper control limit, and a lower line for the
lower control limit. These lines are determined from historical data. By
comparing current data to these lines, you can draw conclusions about whether
the process variation is consistent (in control) or is unpredictable (out of control,
affected by special causes of variation). This versatile data collection and
analysis tool can be used by a variety of industries and is considered one of
the seven basic quality tools.

Control charts for variable data are used in pairs. The top chart monitors the
average, or the centering of the distribution of data from the process. The
bottom chart monitors the range, or the width of the distribution. If your data
were shots in target practice, the average is where the shots are clustering, and
the range is how tightly they are clustered. Control charts for attribute data are
used singly

These charts are used to achieve and maintain an acceptable quality level for a
process, whose output product can be subjected to quantitative measurement or
dimensional check such as size of a hole i.e. diameter or depth, length of a
screw/bolt, wall thickness of a pipe etc.

These are used for measureable, quality characteristics. Let the quality
characteristics of all the products be measured in subgroups. The subgroups are
the samples having fixed number of items/products/ component taken at random
over a period of time.
Advantages of Control Charts:
Various advantages of control charts for variables are as follows:
(1) Control charts warn in time, if required rectification is done, well in time the
scrap and percentage rejection can be reduced.

(2) Thus ensures product quality level.

(3) A control chart indicates whether the process is in control or out of control
thus information about the selection of process and tolerance limits are
provided.

(4) The inspection work is reduced.

(5) The control charts separate out the chance and assignable causes of
variations in the observation thus substantial quality improvement is possible.

(6) Determines process variability that and detects unusual variations taking
place. So reputation of the concern/firm can be built by application of these
charts.