Total Quality Management (TQM)

Principles and Practices of Total Quality Management (TQM)

• TQM defines the art of managing an entire entity to achieve excellence
• It's a philosophy combined with a set of guiding principles
• TQM applies quantitative methods along with human resources
• It enhances traditional business practices with improvement
• Management transforms organizational culture and actions via actions
• It uses common sense

TQM: Basic Aspects

• Commitment from top-down support is critical
• Focus remains targeted on both internal and external customers
• Effective workforce involvement and utilization is a core theme
• Continuous business and production process improvement is key
• Suppliers are treated as partners
• Performance measures are set for all processes

Comparing Old and New Cultures in TQM

• Old cultures are product-oriented, whereas TQM is customer-oriented
• Old cultures prioritize service and cost second, but TQM prioritizes it first
• Old cultures focus short-term, new prioritize long-term goals
• Old cultures find errors (detection), new cultures prevent them
• The old culture emphasizes operations against the system, TQM emphasizes system
• Old cultures emphasize quality control, new cultures involve everyone
• In old models managers direct; in TQM, teams collaborate
• The old focus on the price itself, but new focus on life-cycle costs and partnership
• Old cultures plan, assign, control, or enforce, while TQM cultures delegate, coach, facilitate, or mentor

Influential figures (Gurus) in TQM

• Walter A. Shewhart holds a Ph.D
• He worked Western Electric and Bell Telephone Laboratories (AT&T divisions)
• Developed the chart theory, including control limits, assignable, chance causes of variation, and rational subgroups
• Ronald Fisher created Design of Experiments (DOE) and Analysis of Variance (ANOVA) in the 1930s
• William Edwards Deming holds a Ph.D and was a protégé of Stewart (1950)
• Deming taught statistical process control and importance to Japanese Industry CEOs
• He is credited for foundation of the Japanese quality miracle and resurgence as an economic power
• He is known as the most recognized expert in the world
• Joseph M. Juran holds a Ph.D
• He worked Western Electric (1924-1941) and Shewhart
• He taught quality management in Japan (1954)
• Said that management's commitment to quality effort is a necessity
• Armand V. Feigenbaum holds a Ph.D
• He argued quality control involved productivity, market share, and competitive advantage
• He believed quality starts with understanding customer needs
• Kaoru Ishikawa holds a Ph.D
• He studied under Deming, Juran, and Feigenbaum
• He borrowed TQC and adapted it for Japanese audiences
• Ishikawa authored SPC texts in both Japanese and English
• He developed the cause and effect diagram known as the "Ishikawa diagram"
• Philip B. Crosby authored "Quality is Free" (1979), his first book, in 15 languages, selling 1.5M copies
• He stated "doing it right the first time" reduces costs
• His "Quality Without Tears" (1984) contains four absolutes of quality mgt
• Genichi Taguchu contributed the loss function concept, which combines cost, target, and variation into one metric
• Taguchu also developed the signal-to-noise ratio (proactive equivalent)

TQM Framework

• A system for improving products' and services' quality
• Involves gurus, tools, design, principles, relationships, customer and approach
• Gurus include Shewhart, Deming, Juran, Feigenbaum, Ishikawa, Crosby, and Taguchi
• Tools and Techniques include Benchmarking, IT, Quality/Environmental Management Systems, deployment/design, analysis, product liability, maintenance, management tools, statistical process control, Experimental Design, quality engineering
• Principles and Practices involves product or service realization
• People and Relationships: Leadership, Satisfaction, Involvement, Partnerships
• Customer is a key aspect of framework
• Approach involves continuous process improvement

Awareness and Quality

• Acknowledging the need to improve quality means embracing TQM
• Awareness to arise from market share loss, quality problems, mandates, and competitions

Defining Quality

• Quality is excellence of product or service exceeding expectations
• Q = P/E; if Q>10, product exceeds customer expectations
• Where Q = Quality, P = Performance, and E = Expectations

ISO Standard for Quality

• Quality is “Degree to which a set of inherent characteristics fulfill requirements" - ISO 9000:2000
• Degree is "good" or "excellent" and describes level of quality
• Inherent means features that exist within the product
• Requirements: Expectations of stakeholders

Dimensions of Quality (David A. Garvin's)

• Performance: Primary product characteristics
• Features: Secondary characteristics
• Conformance: Meeting specifications or industry standards
• Reliability: Consistency of performance
• Durability: Useful life
• Service: Resolution of problems and complaints
• Response: Human-to-human interface
• Aesthetic: Sensory characteristics
• Reputation: Past performance and other intangibles

Historical Review of Quality Control

• Middle Ages: Guild system
• 1920s / Early 20th century: Statistical Quality Control (SQC) by W. A. Shewhart
• Industrial Revolution: Specialization of Labor
• 1940s: American Society for Quality Control/American Society for Quality(ASQ)
• 1950s: Introduction of quality to Japan by Deming and Juran
• 1960s: Formation of Quality Circles
• 1970s & 1980s: Spread of Japanese practices to US
• Late 1980s: Automotive Industry and Statistical Process Control (SPC), Malcolm Baldrige National Quality Award, Design of Experiment (DOE) by Taguchi
• 1990s: Focus on customer satisfaction and quality standards (ISO 9000 & ISO 14000)
• Modern Developments: Focus on global quality through Internet

Obstacles in TQM

• Lack of management commitment
• Inability to change organizational culture
• Improper planning
• Lack of continuous training and education
• Incompatible organizational structure and isolated departments
• Ineffective measurement techniques and lack of data access
• Failure to continually improve
• Paying inadequate attention to internal and external customers
• Inadequate use of empowerment and teamwork

Benefits of TQM implementation

• Improved quality
• Employee participation
• Teamwork
• Working relationships
• Customer satisfaction
• Employee satisfaction
• Productivity
• Communication
• Profitability
• Market share

Leadership and Its Core Principles

• Leadership inspires and guides others toward shared goals
• There is no universal definition of leadership
• James MacGregor Burns: it instills purpose and elevate motivation and morality
• Bob Eaton indicated leadership is about harmony, vision and community
• Narayana Murthy noted that great leaders translate vision into reality through execution

Desirable Qualities in a Quality Leader

• Customer focus
• Empowerment
• Continuous improvement
• Prevention-oriented
• Collaboration over competition
• Coaching & training
• Learning from problems
• Effective communication
• Commitment to quality
• Recognition & motivation

Habits of Highly Effective Individuals

• Be Proactive: Accept responsibility for actions
• Begin with the End in Mind: Have clear visions and long-term goals
• Put first things first: Prioritize tasks based on importance
• Think win-win: Seek mutually beneficial solutions in relationships
• Seek first to understand, then be understood: Practice active listening, then judgement and empathy
• Synergize: Leverage diverse strengths and perspectives
• Sharpen the saw: Commit to continuous improvement

Ethics in Leadership

• Individuals act based on moral principles and values, and guide other to do the same

Root causes behind unethical behavior

• Favoring personal interests
• Rewards behavior violating ethical standards
• Separate standards of behavior at work and home
• Abuse of position/power to enhance self-interest
• Managerial values undermine integrity
• Over-emphasizing short-term results
• Arrogance

Ethical Framework in Management Programs

• Appraisal
• Prevention
• Promotion

Deming's 14 Points (by William Edwards Deming)

• Create and publish the aims and purposes of the organization
• Learn new philosophy
• Understand the purpose of inspection
• Stop awarding business based merely on price alone
• Improve constantly and forever the system
• Institute training
• Teach and institute leadership
• Drive out fear, create trust, and innovate
• Optimize the efforts of collaborations
• Eliminate exhortations for the workforce
• Eliminate quotas and management by objective
• Remove barriers that rob people of workmanship
• Encourage education and self-improvement for everyone
• Act to accomplish the transformation

Core Characteristics of TQM Leaders

• Senior managers visit customers, suppliers and departments
• Have an awareness of quality related issues
• Celebrate success
• Visibly and actively engage
• Listen to feedback
• Eliminate fear

Steps to implement TQM

• Strong commitment is vital
• Develop core values, mission, vision, and quality policy
• Communicate policy
• Encourage involvement
• Learn from successful TQM organizations

Core Functions of a Quality Council

• Develop core values, mission, vision, and quality policy
• Develop strategic plans for the long-term
• Create education and training opportunities
• Determine and monitor costs of bad quality
• Improve on processes
• Establish multidisciplinary project team
• Recognize reward systems

Corporate Social Responsibility

• Recognize impact of profit-making beyond society

Focus on tangible benefits

• Achieving tangible outcomes beneficial for customers

Systems Thinking in Business

• View business as a complex system rather than a collection of isolated parts

Quality Statements

• Vision: Short statements regarding organization's future position
• Mission: Defines who, what and how
• Policy: Guide everyone to quality

Strategic Planning

• Process to define direction with resources
• Goals: Broad and long term
• Objectives: The actions to help achieve the goals

Steps to strategic Planning

• Know Stakeholders
• Customer Positioning
• Future Predictions
• Gap Analysis
• Bridge the gap
• Alignment
• Implementation

Improvement program

• Develop improvements on strategic plan

Communications

• Improves cohesion through alignment

Exemplary Factors of Organizational Success

• Decision-making
• Leadership
• Focus on continuous improvements

Customer Satisfaction

• Is crucial for any organization
• Increases the chance of customer retention
• This also increases sales
• TQM is key
• You must consistently deliver quality

Core Requirements for an Organisation

• Improve services
• Continually deliver on time

Categories of customers

• Internal: Within the organization
• External: Anyone outside of the company

Customer Satisfaction Perception Of Quality

• You get what you pay for and its fitness for use
• Does it make customer happy
• Does it encourage you to purchase?

Getting Feedback From Customers

• Is key for improvement
• This can be done by:
  • Questionnaires
  • Report cards
  • Internet

Bad reviews impact

• This can provide some value for improvement

Elements of Good Customer Service

• The organization
• How you care for customers
• Communcations

Improvement Requires

• Determine the return for service investment

Exceptional customer service

• Merrill Lynch is a great example
• They offer real estate services

Employee Involvement

• Improves quality
• Employees are involved in decision-making process

Motivation can be understood via

• Maslow's hierarchy
• Herzberg's two factor theory

What Employees Most Want:

• Interesting work
• Being appreciated
• To be involved

What you need

• Know yourself and employees/culture
• Positive influence
• Transparency

Conducting Employee Surveys:

• Team effort
• Analyze results
• Identify improvements

Why empower others

• They have skill and ability
• Confidence
• Commitment

Conditions Create Empowerment

• Ensure understanding
• Enabled system
• Paradigms

Work Teams

• Goals
• This means their heads are better than one

Teams are

• Work simplifications
• Quality controls

Types of teams

• Process improvement
• Cross functional
• Natural work

Successful characteristics

• Good leadership
• Training
• Charter
• Trust

Member Roles

• Leader
• Facilitator
• Recorder

Roles must

• Communicate
• Be concise

Stages Of Team Development (Brice Tockman)

• Forming
• Storming
• Norming
• Performing
• Adjourning

Teams must

• Be collaborative
• Meet requirements and goals

Common People Problems

• Floundering
• Rush
• Attribution

Common Barriers To Team Progress

• Not enough Training
• Not enough support
• No clear objectives

Training Process:

• Awareness
• Acceptance
• Adaption

Focus on:

• Quality Training
• problem Solving

Teams Require:

• Recognition
• Rewards
• Appraisals

Appraisals Include

• Rankings
• Graphic
• Forced answers

They provide

• Suggestions
• Improve involvement
• Reduce friction
• Increase morale
• Spot Improvements

Unions & employee development

• Support improvement
• Fear Mgt
• Involvement