Total Quality Management

Session-20
Introduction to Quality and
Quality Tools

2
 Recall
• Definitions of quality
• Evolution of quality
• History of quality
• Dimensions of quality
• Service quality
• Determinants of quality
• Consequences of poor quality
• Need for quality
• Responsibility for quality
• Quality Gurus
• Quality Awards

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 Quality Awards

Baldrige Award

Deming Prize

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 Recent Quality Trends: Awards
Baldrige National Quality Award
• Administered by NIST
• Promotes
– Understanding of the requirements of performance
excellence and competitiveness improvement
– Sharing information on successful performance
strategies
• Eligibility
– For-profit US companies
– Categories: Manufacturing, Service, Small business
– Winners cannot apply within 5 years
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 Baldrige National Quality Award

• 1.0 Leadership, 90 points

• 2.0 Strategic Planning, 75 points
• 3.0 Customer and Market Focus, 75 points
• 4.0 Information and Analysis, 150 points
• 5.0 Human Resource Development and
Management, 150 points
• 6.0 Process Management, 230 points
• 7.0 Business Results, 230 points
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Baldridge Award – Framework

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 Business Excellence Models
• Baldrige Criteria for Performance Excellence
• EFQM Excellence Model
• Singapore Quality Award Framework
• Canadian Framework for Business
Excellence
• Australian Business Excellence Framework
• Business Performance Improvement
Resource Model

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10
 Winners of Baldridge in the last 3 years
• 2000
– Manuf: Dana Corporation – Spicer Driveshaft Division; KARLEE Company,
Inc
– Service: Operations Management International, Inc.
– Small business: Los Alamos National Bank
• 1999  
– Manuf: STMicroelectronics, Inc. - Region Americas
– Service: The Ritz-Carlton Hotel Company, L.L.C.; BI
– Small Business: Sunny Fresh Foods
• 1998
– Manuf: Boeing Airlift and Tanker Programs; Solar Turbines Incorporated
– Small Business: Texas Nameplate Company, Inc.
–

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 Benefits of Baldrige Competition

• Financial success
• Winners share their knowledge
• The process motivates employees
• The process provides a well-designed quality
system
• The process requires obtaining data
• The process provides feedback

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 Critiques for Baldridge
• It is expensive in terms of money and time to apply
• Companies nominate themselves
• Very few companies apply
• Even fewer companies win
– It is a competition not a recognition
• Promotes a tendency to focus on the award
• It does not include financial results, innovation,
ethics, environmental issues
• It does not correlate with success

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Australian Model

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European Model

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CII-Exim Bank Model

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Japanese Model

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Singapore Model

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 Next
DEMING Prize

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 QUIZ No. 3

BITS C471/MBA C471 MIS-Quiz-2

01st April 11
OVERWRITTEN answers will not be
considered

ID: Name: ______.

20
1. The radical redesign of an
organization’s business processes
is known as _________
__________ _______________.

2. ___________ auctions are auctions

that sellers use as a selling channel
to many potential buyers.

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3. The direct sale of products and
services through electronic
storefronts or electronic malls is
known as ______________.

4. The phases in the customer service

life cycle are: Requirement,
Acquisition, Ownership and
_________________.
5. If a seller is a click-and-mortar
company, it may face a conflict
with its regular distributors when it
sells directly online. It is known as
_______ _________
6. In a _______ to _________
application, the buyers, sellers and
transactions involve only
organizations.
7. Financial value chain management
is combining financial analysis with
___________ _______________.

8. _________ __________
Management refers to activities
performed by businesses to
optimize and adapt their
processes.
9. The three types of flows in a Supply
Chain Management are: Material
flows, Informational Flows and
___________ ____________.

10.Erratic changes (usually on the

higher side) in ordering quantities
along the supply chain is known as
__________ _______________.
 Recent Quality Trends: Awards
The Deming Prize

• Honoring W.E. Deming started in 1951 with his

donation
• Administrated by Japanese Union of Scientists
and Engineers
• Everybody who meets the standard receives
the prize
• Promotes statistical quality control
• Find out 14 points in Deming’s quality approach
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 Recent Quality Trends: Awards
European Quality Award
• European Foundation for Quality Management (EFQM)
founded in 1988
• Two awards were established in 1992
– European Quality Prize
• Awarded to all who meet the criteria
– European Quality Award
• Given to the best
• Prizes intend to identify role models
– Leadership and constancy of purpose
– Customer focus
– Corporate social responsibility
– People development and involvement
– Results orientation
• Eligibility: For-profit firms with a “history of significant
commitment to Western Europe.”
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 Recent Quality Trends: ISO Series
Quality Certification: ISO 9000

• Set of international standards on quality management and

Quality assurance, critical to international Business
• ISO 9000 series standards, briefly, require firms to document
their quality-control systems at every step so that they’ll be
able to identify those areas that are causing quality problems
and correct them.
• ISO 9000 requires companies to document everything
they do that affects the quality of goods and services.
– Hierarchical approach to documentation of the Quality
Management System

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 ISO 9000 Registration Process

• When an organization feels that its quality system is good

enough, it may ask an accredited registrar or other third
party audit team for pre-assessment.

• The final audit begins with a review of the company's quality

manual, which the accredited registrar or third party audit
team typically uses as its guide. The audit team checks if
the documented quality system meets the requirement of
ISO 9000.

• When the registrar is satisfied with the favourable

recommendation of the audit team, it grants registration and
issues a registration document to the company.

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ISO 9000 Quality Management Principles

• A systems approach to management

• Continual improvement
• Factual approach to decision making
• Mutually beneficial supplier relationships
• Customer focus
• Leadership
• People involvement
• Process approach

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 ISO 14000, WEEE, RoHS

• ISO 14000 - A set of international standards for

assessing a company’s environmental performance
• Standards in three major areas
– Management systems
• Systems development and integration of
environmental responsibilities into business
planning
– Operations
• Consumption of natural resources and energy
– Environmental systems
• Measuring, assessing and managing emissions,
effluents, and other waste
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 WEEE, RoHS
• The Waste Electrical and Electronic
Equipment (WEEE) is a EU directive on
recycling regulations became effective in
Aug 2005.
• Restriction of Hazardous Substances
(RoHS) is another legislation started in
July 1, 2006. It limits the amount of
several elements that can be used in
products. Some examples of hazardous
elements are lead, mercury, cadmium.

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 ISO Series

ISO 9001
Design Control and Service

ISO 9002
Purchasing,Contracting
Process control
ISO 9003
Production,
inspection, testing

ISO 14000
Environmental issues 33
 Total Quality Management
A philosophy that involves everyone in
an organization in a continual effort to
improve quality and achieve and exceed
customer satisfaction.
T Q M

• Continuous improving
• Involvement of everyone
• Customer satisfaction

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 Why TQM?
• Ford Motor Company had operating losses
of $3.3 billion between 1980 and 1982.
• Xerox market share dropped from 93% in
1971 to 40% in 1981.

Attention to quality was seen as a way to

combat the competition.
 TQM: A “Buzzword” Losing Popularity

• For many companies, the term TQM is

associated with corporate programs (mid 1980s
~ early 1990s) aimed at implementing employee
teams and statistical process control.
• Unfortunately, many companies were
dissatisfied with the perceived results of these
programs, concluding TQM does not work.

Question: Why were they dissatisfied?

Were they justified?
 TQM
• Total - made up of the whole
• Quality - degree of excellence a product or
service provides
• Management - act, art or manner of
planning, controlling, directing,….

Therefore, TQM is the art of managing the

whole to achieve excellence.
excellence
 What does TQM mean?
Total Quality Management means that the
organization's culture is defined by and
supports the constant attainment of
customer satisfaction through an
integrated system of tools, techniques, and
training. This involves the continuous
improvement of organizational processes,
resulting in high quality products and
services.
 What’s the goal of TQM?

“Do the right things right the first

time, and every time.”
 Another way to put it
• At it’s simplest, TQM is all managers
leading and facilitating all contributors in
everyone’s two main objectives:
 (1) total client satisfaction through
quality products and services; and
 (2) continuous improvements to
processes, systems, people, suppliers,
partners, products, and services.
 Productivity and TQM
• Traditional view:
– Quality cannot be improved without significant
losses in productivity.

• TQM view:
– Improved quality leads to improved
productivity.
 Basic Tenets of TQM
1. The customer makes the ultimate
determination of quality
2. Top management must provide leadership
and support for all quality initiatives.
3. Preventing variability is the key to producing
high quality.
4. Quality goals are a moving target, thereby
requiring a commitment toward continuous
improvement.
5. Improving quality requires the establishment
of effective metrics. We must speak with data
and facts not just opinions.
 The three “C” aspects of TQM

Tools, techniques, and training in

Counting their use for analyzing,
understanding, and solving quality
problems

Customers Quality for the customer as a

driving force and central concern.

Culture Shared values and beliefs,

expressed by leaders, that define
and support quality.
 Total Quality Management
and Continuous Improvement
• TQM is the management process used to
make continuous improvements to all
functions.
• TQM represents an ongoing, continuous
commitment to improvement.
• The foundation of total quality is a
management philosophy that supports
meeting customer requirements through
continuous improvement.
 Continuous Improvement versus Traditional
Approach

Traditional Approach Continuous

Continuous Improvement
Improvement
• Market-share focus • Customer focus
• Individuals • Cross-functional teams
• Focus on ‘who” and “why” • Focus on “what” and “how”
• Short-term focus • Long-term focus
• Status quo focus • Continuous improvement
• Product focus • Process improvement
• Innovation focus
• • Incremental improvements
Fire fighting
• Problem solving
 Quality Throughout
• “A Customer’s impression of quality begins
with the initial contact with the company and
continues through the life of the product.”
– Customers look to the total package - sales,
service during the sale, packaging, deliver, and
service after the sale.
– Quality extends to how the receptionist answers
the phone, how managers treat subordinates, how
courteous sales and repair people are, and how
the product is serviced after the sale.
• “All departments of the company must strive to
improve the quality of their operations.”
 Value-based Approach
• Manufacturing • Service Dimensions
Dimensions – Reliability
– Performance – Responsiveness
– Features – Assurance
– Reliability – Empathy
– Conformance
– Tangibles
– Durability
– Serviceability
– Aesthetics
– Perceived quality
 The TQM System

Objective Continuous
Improvement

Principles Customer Process Total

Focus Improvement Involvement

Leadership
Elements Education and Training Supportive structure
Communications Reward and recognition
Measurement
 Summary
• What is Quality
• What are the various QC tools?
• What are various quality awards?
• What are ISO series of quality standards?
• What is TQM?
• Details on TQM