LESSON-1 Introduction to Quality and TQM

Total Quality Management Introduction ===================================== **Total Quality Management (TQM)** is enhancement to the traditional way of doing business. - **Total:** Made up of whole or Involvement of all levels in the organization - **Quality:** Degree of excellence a prod...

Total Quality Management Introduction ===================================== **Total Quality Management (TQM)** is enhancement to the traditional way of doing business. - **Total:** Made up of whole or Involvement of all levels in the organization - **Quality:** Degree of excellence a product or service provides or Conformance to agreed upon requirements **Management:** Act, art or manner of handling, controlling, directing **Quality:** A subjective term for which each person or sector has its own definition. **TQM** is defined as both philosophy and a set of guiding principles that represent the foundation of a continuously improving organization. It is the application of quantitative methods and human resources to improve all the processes within an organization and exceeds customer needs now and in future. **Total Quality Management** means that the organizations culture is defined by its 2 key aspects which supports the constant attainment of (1) **customer satisfaction** through an integrated system of tools, techniques, and training. This involves the (2) **continuous improvement of organizational processes (Kaizen)**, resulting in high quality products and services. Gurus of TQM ============ A. Walter A. Shewhart: W.A Shewhart, PhD, spent his professional career at Western Electric and Bell Telephone Laboratories, both divisions of AT&T. He developed control chart theory with control limits, assignable and chance causes of variation, and rational subgroups, he authored Economic Control of Quality of Manufactured Product, which is regarded as a complete and though work of the basic principles of quality control. He also developed the PDSA(Plan, Do, Study, Act) cycle for learning and improvement. B. W. Edward Deming: Deming was protégé of Shewhart in 1950, he thought statistical process control and the importance of quality to the leading CEOs of Japanese industry. He is credited with providing the foundation for the Japanese quality miracle and resurgence as an economic power. Deming is the best known quality expert in the world. His 14 points provide a theory for management to improve quality, productivity, and competitive position C. Joseph M. Juran: He worked at Western Electric from 1924-1941. There he was exposed to the concepts of Shewhart. Juran traveled to Japan in 1954 to teach quality management. He emphasized the necessity for management at all levels to be committed to the quality effort with hands on involvement. He recommended project improvements based on return on investment to achieve breakthrough results. The Juran Trilogy for managing quality is carried out by three interrelated processes of planning, control, and improvement. D. Armand V. Feiganbaum: He argues that total quality control is necessary to achieve productivity, market penetration, and competitive advantage. Quality begins by identifying the customer's requirements and ends with a product or services in the hands of a satisfied customer. In addition to customer satisfaction, some of Feiganbaum's quality principles are genuine management involvement, employee involvement, first line supervision leadership, and companywide quality control. E. Kaoru Ishikawa: PhD studied under Deming, Juran, and feigenbaum, he barrowed the total quality control concept and adapted it for the Japanese. Ishikawa is best known for the development of the cause and effect diagram, which is sometimes called Ishikawa diagram. He developed the quality circle concept in Japan whereby work groups including their supervisor were trained in SPC. F. Phillip B. Crosby: He argued that "doing it right the first time \"is less expensive than the costs of detecting and correcting nonconformities. His four absolutes of quality are Quality is conformance to requirements, Prevention of nonconformance is the objective not appraisal, The performance standard is zero defects not "that is close enough" and The measurement of quality is the cost of conformance. G. Genichi Taguchi, PhD, developed his loss function concept that combines cost, target and variation into one metric. Because the loss function is reactive, he developed the signal to noise ratio as proactive equivalent his robust design of parameters and tolerances. Historical Background of TQM ============================ A. Quality in articles and artefacts produced by skilled craftsmen and artisans from the B.C. era e.g.. goldsmiths, silversmiths, blacksmiths, potters, etc. B. Artists & Artisans Guilds in the Middle ages spent years imparting quality skills and the works men had pride in making quality products. C. Industrial Revolution brought factory manufacturing where articles were mass-produced and each worker made only a part of the product, and did not sense the importance of his contribution to the quality of the product. D. In 1924, W.A. Shewhart of Bell Telephone Labs developed a statistical chart for the control of product variables -- the beginning of SQC and SPC. E. In the same decade, H.F. Dodge and H.G. Romig of Bell Telephone Labs developed statistical acceptance sampling instead of 100% inspection. F. In 1946,the American Society for Quality Control was formed. G. In 1950, W. Edwards Deming, who learnt SQC from Shewhart, taught SPC & SQC to Japanese engineers and H. Historical Background of TQM I. In 1954,Joseph M.Juran taught Japanese managements their responsibility to achieve quality. J. In 1960, the first quality control circles were formed. SQC techniques were being applied by Japanese workers. K. 1970's US managers were learning from Japan Quality implementation miracles. L. In 1980's TQM principles and methods became popular.(also in auto industry) 9 Dimensions of Quality ----------------------- 1. **Performance: This is the product's basic operating characteristics. Basically the primary task you'd want a product to do or provide.** 2. **Features: The extra stuff added to the product's basic functionality, to better facilitate the user in, well, using the product.** 3. **Reliability: The product's ability to operate properly within the expected time frame.** 4. **Conformance: Basically how a product fares regarding its ability to meet pre-established standards.** 5. **Durability: this means that when a product breaks down, disposal is not the only option. You have the option to get the product repaired.** 6. **Serviceability: in this context is about ease of repair, and speed of repair.** 7. **Aesthetics: How a product looks, feels, sounds, smells, or tastes.** 8. **Perception: This is how a product fares against subjective perceptions, likely from parties other than the user / purchaser. These perceptions are influenced by factors such as the brand of the product or advertisements.** 9. **Safety: The assurance that no injury or harm will befall the one(s) using the product.** Quality Planning ================ - It is a structured process for developing products that ensures that customer needs are met by the final result - The tools and methods of quality planning are incorporated along with the technological tools for the particular product being developed and delivered Quality Costs ============= **Cost of quality (COQ) is defined as a methodology that allows an organization to determine the extent to which its resources are used for activities that prevent poor quality, that appraise the quality of the organization's products or services, and that result from internal and external failures. Having such information allows an organization to determine the potential savings to be gained by implementing process improvements.** Bases for Quality Costs ======================= An excerpt from [[The Handbook for Quality Management]](https://qualityamerica.com/index.php?cID=722) (2013, McGraw-Hill) by Paul Keller and Thomas Pyzdek Analysing quality costs requires a suitable base, so that the quality cost is analysed as a percent of an appropriate base: Generally, a suitable base is related to quality costs in a meaningful way, well known to the managers who will review the quality cost reports, and a measure of business volume in the area where quality cost measurements are to be applied. Several bases are often necessary to get a complete picture of the relative magnitude of quality costs. Some commonly used bases are (Campanella, 1990, p. 26): - A labor base (such as total labor, direct labor, or applied labor) - A cost base (such as shop cost, operating cost, or total material and labor) - A sales base (such as net sales billed, or sales value of finished goods) - A unit base (such as the number of units produced, or the volume of output) While actual dollars spent is usually the best indicator for determining where quality improvement projects will have the greatest impact on profits and where corrective action should be taken, unless the production rate is relatively constant, it will not provide a clear indication of quality cost improvement trends. Since the goal of the cost of quality program is improvement over time, it is necessary to adjust the data for other time-related changes such as production rate, inflation, etc. Total quality cost compared to an applicable base results in an index that may be plotted and analyzed using statistical control charts. For long-range analyses and planning, net sales is the base most often used for presentations to top management (Campanella, 1990, p. 24). If sales are relatively constant over time, the quality cost analysis can be performed for relatively short spans of time. In other industries this figure must be computed over a longer time interval to smooth out large swings in the sales base. For example, in industries such as shipbuilding or satellite manufacturing, some periods may have no deliveries, while others have large dollar amounts. It is important that the quality costs incurred be related to the sales for the same period. Consider the sales as the "opportunity" for the quality costs to happen. Some examples of cost of quality bases are (Campanella, 1990): - Internal failure costs as a percent of total production costs - External failure costs as an average percent of net sales - Procurement appraisal costs as a percent of total purchased material cost - Operations appraisal costs as a percent of total productions costs - Total quality costs as a percent of production costs An important basis for justifying TQM practice understands its impact on total quality costs. TQM is rooted in the belief that preventing defects is cheaper than dealing with the costs of quality failures. In other words, total quality costs are minimized when managers strive to reach zero defects in the organization. The four major types of quality costs are prevention, appraisal, internal failure, and external failure. - Prevention costs are the costs created from the effort to reduce poor quality. Examples are designing the products so that they will be durable, training employees so they do a good job, certifying suppliers to ensure that suppliers provide quality in products and services, conducting preventive maintenance on equipment, and documenting quality procedures and improvements. - Appraisal costs are a second major type of quality cost. Appraisal costs include the inspection and testing of raw materials, work-in-process, and finished goods. In addition, quality audits, sampling, and statistical process control also fall under the umbrella of appraisal costs. Inspection and testing of raw materials is very important, since substandard raw materials lead to substandard products. Raw materials used for a bridge determine the strength of the bridge. For example, soft steel will erode away faster than hardened steel. Moreover, the concrete bridge decking needs to be solid, as concrete with air pockets will erode and crumble faster creating an unsafe bridge. - Internal failure costs are a third category of quality costs. This cost occurs when quality defects are discovered before they reach the customer. Examples of internal failure costs include scrapping a product, reworking the product, and lost productivity due to machine breakdowns or labor errors. Internal failure costs are typically more expensive than both prevention and appraisal costs because a great deal of material and labor often has been invested prior to the discovery of the defect. - External failure costs are the fourth major cost of quality. External failure costs when the defect is discovered after it has reached the customer. This is the most expensive category of quality costs. Examples include product returns, repairs, warranty claims, lost reputation, and lost business. Analysis Techniques for Quality Costs ===================================== The most frequent techniques are the tendency analysis and the Pareto analysis. The objective of these techniques is to determine the opportunities for the improvement of quality. The tendency analysis implies the simple comparison between the level of the costs from the present and from the past. 1. The **Cost**-of-**Quality Trend Analysis** illustrates the **costs** of poor **quality** by constructing a chart displaying prevention, appraisal, and failure **costs** over time. In addition, statistical runs tests are performed to determine whether or not significant **trends** exist in any of those time series.  2. **A Pareto chart is a bar graph. The lengths of the bars represent frequency or cost (time or money), and are arranged with longest bars on the left and the shortest to the right. In this way the chart visually depicts which situations are more significant. This** [**cause analysis tool**](https://asq.org/quality-resources/root-cause-analysis/tools) **is considered one of the** **[seven basic quality tools.](https://asq.org/quality-resources/seven-basic-quality-tools)** TQM six basic Concepts ====================== 3. Quality at all levels of the work force. 4. Continuous improvement of the production/business process. 5. Treating suppliers as partners 6. Establish performance measures for the processes. Basic Principles of TQM ======================= 1. Customers' requirements - (both internal & external) must be met first time & every time 2. Everybody must be involved 3. Regular two-way communication must be promoted I 4. Identify the training needs and supply it to the employees 5. Top management commitment is must 6. Every job must add value 7. Eliminate waste & reduce total cost 8. Promote creativity 9. Focus on team work. - The customers first. - Value people. - Built supplier partnership. - Empower people. - Demonstrate involvement/commitment. - Strive for excellence. - Explain and deploy policy. - Improve communication. ✓ Promote teamwork. - Benchmark continuously. - Establish system. - Encourage collaboration. 1. Producer role. 2. Director role. 3. Coordinator role roles. 4. Checker role. 5. Stimulator role. 6. Mentor role. 7. Innovator role. 8. Negotiator role. CHARACTERISTICS OF QUALITY LEADERS ================================== 1. They give priority attention to external and internal customers and their needs. 2. They empower, rather than control, subordinates. 3. They emphasis improvement rather than maintenance. 4. They emphasis prevention. 5. They emphasis collaboration rather than competition. 6. They train and coach, rather than direct and supervise. 7. They learn from the problems. 8. They continually try to improve communications. 9. They continually demonstrate their commitment to quality. 10. They choose suppliers on the basis of quality, not price. 11. They establish organizational systems to support the quality effort. 12. They encourage and recognize team effort. LEADERSHIP CONCEPTS =================== 1. People, Paradoxically, need security and independence at the same time. 2. People are sensitive to external and punishments and yet are also strongly self - motivated. 3. People like to hear a kind word of praise. Catch people doing something right, so you can pat them on the back. 4. People can process only a few facts at a time; thus, a leader needs to keep things simple. 5. People trust their gut reaction more than statistical data. 6. People distrust a leader's rhetoric if the words are inconsistent with the leader's actions. **THE 7 HABITS OF HIGHLY EFFECTIVE PEOPLE:** 1. Be Proactive 2. Begin with the End in mind 3. Put First Things First 4. Think Win -- Win 5. Seek First to Understand, then to Be Understood 6. Synergy 7. Sharpen the Saw (Renewal) ROLE OF SENIOR MANAGEMENT ========================= 1. Management by Wandering Around (MBWA). 2. Strategy of problem solving and decision making. 3. Strong information base. 4. Recognition and Reward system. 5. Spending most of the time on Quality. 6. Communication. 7. Identify and encourage potential employee. 8. Accept the responsibility. 9. To play a role model. 10. Remove road blocks. 11. Study TQM and investigate how TQM is implemented elsewhere. 12. Establish policies related to TQM. 13. Establish 'priority of quality' and 'customer satisfaction' as the basic policy. 14. Assume leadership in bringing about a cultural change. 15. Check whether the quality improvement programs are conducted as planned. 16. Become coaches and cheer leaders to implement TQM. 17. Generate enthusiasm for TQM activities. 18. Visit other companies to observe TQM functioning. 19. Attend TQM training program. TQM IMPLEMENTATION ================== When planning and implementing a total quality management system or quality management strategy, there is no one solution for every situation or workplace. Each organization is unique in terms of the culture, management practices, and the processes used to create and deliver its products and services. Quality management strategy vary from organization to organization; however, a set of primary elements should be present in some format. GENERIC STRATEGY MODEL FOR IMPLEMENTING TQM SYSTEMS =================================================== 1. Top management learns about and decides to commit to TQM. TQM is identified as one of the organization's strategies. 2. The organization assesses current culture, customer satisfaction, and quality management systems. 3. Top management identifies core values and principles to be used, and communicates them. 4. A TQM master plan is developed on the basis of steps 1, 2, and 3. 5. The organization identifies and prioritizes customer demands and aligns products and services to meet those demands. 6. Management maps the critical processes through which the organization meets its customers' needs. 7. Management oversees the formation of teams for process improvement efforts. 8. The momentum of the TQM effort is managed by the steering committee. 9. Managers contribute individually to the effort through hoshin planning, training, coaching, or other methods. 10. Daily process management and standardization take place. 11. Progress is evaluated and the plan is revised as needed. 12. Constant employee awareness and feedback on status are provided and a reward/recognition process is established. EXAMPLES OF TOTAL QUALITY MANAGEMENT SYSTEM STRATEGIES ====================================================== Imprints of TQM concepts can be found in modern approaches to quality management, such as the Malcolm Baldrige National Quality Award (MBNQA) criteria, ISO 9001, Six Sigma and lean manufacturing, as well as the examples below. **Total Quality Management (TQM) Implementation Strategies** Strategy 1: The TQM element approach ==================================== The TQM element approach takes key business processes and/or organizational units and uses the tools of TQM to foster improvements. This method was widely used in the early 1980s as companies tried to implement parts of TQM as they learned them. Examples of this approach include quality circles, statistical process control, Taguchi methods, and quality function deployment. Strategy 2: The guru approach ============================= The guru approach uses the teachings and writings of one or more of the leading quality thinkers as a guide against which to determine where the organization has deficiencies. The organization makes appropriate changes to remedy those deficiencies. For example, managers might study Deming's 14 points or attend the Crosby College. Afterward, they would work on implementing the approach learned. Strategy 3: The organization model approach =========================================== In this approach, individuals or teams visit organizations that have taken a leadership role in TQM and determine their processes and reasons for success. They then integrate these ideas with their own ideas to develop an organizational model adapted for their specific organization. This method was used widely in the late 1980s and is exemplified by the initial recipients of the Malcolm Baldrige National Quality Award. Strategy 4: The Japanese total quality approach =============================================== Organizations using the Japanese total quality approach examine the detailed implementation techniques and strategies employed by Deming Prize-winning companies and use this experience to develop a long-range master plan for in-house use. This approach was used by Florida Power and Light---among others---to implement TQM and to compete for, and win, the Deming Prize. Strategy 5: The award criteria approach ======================================= When using this model, an organization uses the criteria of a quality award (e.g., the Deming Prize, the European Quality Award, or the Malcolm Baldrige National Quality Award), to identify areas for improvement. Under this approach, TQM implementation focuses on meeting specific award criteria. Although some argue that this is not an appropriate use of award criteria, some organizations do use this approach and it can result in improvement. *Adapted from The Certified Manager of Quality/Organizational Excellence Handbook. Fourth Edition, ASQ Quality Press.* QUALITY COUNCIL =============== A quality council is established to provide overall direction. The council is composed of: 1. Chief Executive Officer 2. Senior Managers 3. Coordinator or Consultant 4. A representative from the Union Duties of the council are: - Develop the core values, vision statement, mission statement and quality policy statement - Develop the strategic long term plan with goals and Annual Quality Improvement Program with objectives - Create the total education and training plan - Determine and monitor the cost of poor quality - Determine the performance measures - Determine projects those improve the process - Establish multifunctional project and work group teams - Revise the recognition and rewards system A typical meeting agenda will have the following items - Progress report on teams - Customer satisfaction report - Progress on meeting goals - New project teams - Benchmarking report Within three to five years, the quality council activities will become ingrained in the culture of the organization. QUALITY COUNCIL =============== A quality council is established to provide overall direction. The council is composed of: 5. Chief Executive Officer 6. Senior Managers 7. Coordinator or Consultant 8. A representative from the Union Duties of the council are: - Develop the core values, vision statement, mission statement and quality policy statement - Develop the strategic long term plan with goals and Annual Quality Improvement Program with objectives - Create the total education and training plan - Determine and monitor the cost of poor quality - Determine the performance measures - Determine projects those improve the process - Establish multifunctional project and work group teams - Revise the recognition and rewards system A typical meeting agenda will have the following items - Progress report on teams - Customer satisfaction report - Progress on meeting goals - New project teams - Benchmarking report Within three to five years, the quality council activities will become ingrained in the culture of the organization. QUALITY STATEMENTS ================== Three elements of quality statements are: 1. Vision statement, 2. Mission statement, and 3. Quality policy statement **What is Vision Statement?** 1. ***The vision statement is*** a short declaration of what on organization aspires to be tomorrow. 2. It is the ideal state that might never be reached; but on which one will work hard continuously to achieve. Successful visions provide a brief guideline for decision making. 3. The vision statement should be coined in such a way that the leaders and the employees working in the organization should work towards the achievements of the vision statement. 4. ***An example of a simple vision statement is:*** "To continuously enrich knowledge base of practitioners in mobility industry and institutions in the service of humanity". -- Society of Automotive Engineers (SAE) **What is Mission Statement?** 1. The mission statement, describes the function of the organization. It provides a clear statement of purpose for employees, customers, and suppliers. 2. ***The mission statement*** answers the following questions: who we are? who are our customers?; what we do?; and how we do it? 3. ***An example of a simple mission statement is:*** **What is Quality Policy Statement?** - ***The quality policy*** is a guide for everyone in the organization as to how they provide products and service to the customers. - It should be written by the CEO with feedback from the workforce and be approved by the quality council. - A quality policy is a important requirement of ISO 9000 quality systems. ***An example of a simple quality policy statement is***: "Xerox is a quality company. Quality is the basic business principle for Xerox. Quality means providing our external and internal customers with innovative products and services that fully satisfy their requirements. Quality is the job of every employee". VISION STATEMENT ================ ***[Successful visions provide a guideline for decision making]*** MISSION STATEMENT ================= QUALITY POLICY STATEMENT ======================== Seven Steps to Strategic Quality Planning ========================================= STRATEGIC QUALITY PLANNING ========================== Goals: Long term planning (Eg : Win the war) Objectives: Short term planning (Eg : Capture the bridge) Goals should: SEVEN STEPS TO STRATEGIC QUALITY PLANNING ========================================= In order to integrate quality with the strategic planning process, a systematic and sequential procedure has to be adopted. There are seven basic steps to strategic process planning. They are: Step 1. Customer Needs ---------------------- The basic step is the identification of customers and their wants and needs. An organization must seek its customers' requirements, expectations and assess future trends before developing a strategic plan. Step 2. Customer Position ------------------------- The second step requires the planners to determine its positioning with regards to its customers. Various alternatives such as whether the organization should give up, maintain or expand market position should be considered. In order to become successful, the organization should concentrate and consolidate its position in its areas of excellence. Step 3. Predict the Future -------------------------- Next, the planners must predict future conditions that will affect their product or service: To help predicting the future, the tools such as demographics, economic forecasts, and technical assessments or projections may be used. Step 4. Gap Analysis -------------------- In this step, the planners must identify the gaps between the current state and the future state of the organization. This concept is also known as *value stream mapping.* For identifying the gaps, an analysis of the core values and concepts and other techniques may be used. ***Step 5. Closing the Gaps*** Now the planners should develop a specific plan to close the gaps. This process is also termed as *Process improvement*. By assessing the relative importance and relative difficulty of each gap, planners can close the gaps. Step 6. Alignment ----------------- Now the revised plan should be aligned with the mission, vision, and core values and concepts of the organization. Organization should embrace quality as an essential ingredient in their vision, mission, and objectives. Step 7. Implementation ---------------------- In order to implement the action plan, resources must be allocated to collecting data, designing changes, and overcoming resistance to change. Also the planners should monitor and assess the result of the strategic plan. Since quality is a continuous improvement process, one has to reassess and renew the strategic plans periodically. So it is a cyclic process. Figure summarizes the strategic planning cycle. Deming's 14 point Philosophy ============================ - Create and publish the aim and purpose of the organization - Learn the new philosophy - Understand the purpose of inspection Stop awarding business based on price along. - Improve constantly and forever the system. - Institute training. - Teach an institute leadership. - Dry out fear, create trust and create climate for innovation. - Optimize the efforts of teams, groups on staff. - Eliminate exhortations for the work force. - Eliminate management by objective(MOB). - Remove barriers that rob people of workmanship. - Encourage education and self improvement for everyone. - Take action to accomplish transformation. Obstacles in the implementation of TQM ====================================== - Lack of management Commitment - Inability to change organizational culture - Improper planning - Lack of continuous training and education - Incompatible organizational structure and isolated individuals and departments - Paying inadequate attention to customers - Inadequate use of empowerment and team work - Failure to continually improve