QUALITY MANAGEMENT

“360 DEGREE” TEAM

TOTAL MANAGEMENT AS A CONCEPT - HOW QUALITY IS DEFINED

- 8 PRINCIPLES OF TOTAL QUALITY MANAGEMENT

- CUSTOMER SATISFACTION

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INTRODUCTION What is quality? In manufacturing, a measure of excellence or a state of

being free from defects, deficiencies and significant variety.

Some definitions that have gained wide acceptance in various organizations: “Quality is customer satisfaction,” “Quality is Fitness for Use.”

The American National Standards Institute (ANSI) and the American Society for Quality (ASQ) define quality as:

“The totality of features and characteristics of a product or service that bears on its ability to satisfy given needs.” 3

INTRODUCTION What is a customer? Anyone who is impacted by the product or process delivered

by an organization. External customer: The end user as well as intermediate

processors. Other external customers may not be purchasers but may have some connection with the product.

Internal customer: Other divisions of the company that receive the processed product.

What is a product? The output of the process carried out by the organization. It

may be goods (e.g. automobiles, missile), software (e.g. a computer code, a report) or service (e.g. banking, insurance)

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INTRODUCTION How is customer satisfaction achieved? Two dimensions: Product features and Freedom from

deficiencies. Product features – Refers to quality of design. Examples in manufacturing industry: Performance,

Reliability, Durability, Ease of use, Esthetics etc. Examples in service industry: Accuracy, Timeliness,

Friendliness and courtesy, Knowledge of server etc. Freedom from deficiencies – Refers to quality of

conformance. Higher conformance means fewer complaints and

increased customer satisfaction. 5

WHY QUALITY?

Reasons for quality becoming a cardinal priority for most organizations:

Competition – Today’s market demand high quality products at low cost. Having `high quality’ reputation is not enough! Internal cost of maintaining the reputation should be less.

Changing customer – The new customer is not only commanding priority based on volume but is more demanding about the “quality system.”

Changing product mix – The shift from low volume, high price to high volume, low price have resulted in a need to reduce the internal cost of poor quality. 6

WHY QUALITY? Product complexity – As systems have become more

complex, the reliability requirements for suppliers of components have become more stringent.

Higher levels of customer satisfaction – Higher customers expectations are getting spawned by increasing competition.

Relatively simpler approaches to quality viz. product inspection for quality control and incorporation of internal cost of poor quality into the selling price, might not work for today’s complex market environment.

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QUALITY PERSPECTIVES Everyone defines Quality based on their own

perspective of it. Typical responses about the definition of quality would include:

1. Perfection2. Consistency3. Eliminating waste4. Speed of delivery5. Compliance with policies and procedures6. Doing it right the first time7. Delighting or pleasing customers8. Total customer satisfaction and service

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QUALITY PERSPECTIVESJudgmental perspective “goodness of a product.” Shewhart’s transcendental definition of quality –

“absolute and universally recognizable, a mark of uncompromising standards and high achievement.”

Examples of products attributing to this image: Rolex watches, Lexus cars.

Product-based perspective “function of a specific, measurable variable and that

differences in quality reflect differences in quantity of some product attributes.”

Example: Quality and price perceived relationship. 9

QUALITY PERSPECTIVESUser-based perspective “fitness for intended use.” Individuals have different needs and wants, and hence

different quality standards. Example – Nissan offering ‘dud’ models in US markets

under the brand name Datson which the US customer didn’t prefer.

Value-based perspective “quality product is the one that is as useful as competing

products and is sold at a lesser price.” US auto market – Incentives offered by the Big Three are

perceived to be compensation for lower quality. 10

QUALITY PERSPECTIVES

Manufacturing-based perspective “the desirable outcome of a engineering and

manufacturing practice, or conformance to specification.”

Engineering specifications are the key! Example: Coca-cola – “quality is about manufacturing a

product that people can depend on every time they reach for it.”

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8 PRINCIPLES OF TOTAL QUALITY MANAGEMENT

1. Customer focus2. Leadership3. Involvement of people4. Process approach5. System approach to management6. Continual improvement7. Factual approach to decision making8. Mutually beneficial supplier relationships

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PRINCIPLE 1 – CUSTOMER FOCUS

• Researching and understanding customer needs and expectations.

• Ensuring that the objectives of the organization are linked to customer needs and expectations.

Organizations depend on their customers and

therefore should understand current and future customer needs, should meet customer

requirements and strive to exceed customer

expectations.

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PRINCIPLE 2 – LEADERSHIP

Leaders establish unity of purpose and direction of the organization. They should create and maintain the internal environment in which people can become fully involved in achieving the organization’s

objectives.

•Considering the needs of all interested parties including customers, owners, employees, suppliers, financiers, local communities and society as a whole.

• Establishing a clear vision of the organization’s future

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PRINCIPLE 3 – INVOLVEMENT OF PEOPLE

People at all levels are the essence of an organization and their full involvement enables their abilities to be used for

the organization’s benefit.

People accepting ownership of problems and their responsibility for solving them

People identifying constraints to their performance

People understanding the importance of their contribution and role in the organization

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PRINCIPLE 4 – PROCESS APPROACH

A desired result is achieved more efficiently when activities and related resources are

managed as a process.

Systematically defining to obtain a desired result the

activities necessary.

Establishing clear responsibility and accountability for

managing key activities.

Analyzing and measuring of the capability of key

activities.

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PRINCIPLE 5 – SYSTEM APPROACH TO MANAGEMENT

Identifying, understanding and managing interrelated processes as a system contributes

to the organization’s effectiveness and efficiency in achieving its objectives.

• Structuring a system to achieve the organization’s objectives in the most effective and efficient way.

• Understanding the interdependencies between the processes of the system.

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PRINCIPLE 6 – CONTINUAL IMPROVEMENT

•Establishing goals to guide, and measures to

track ,continual improvement

•Providing people with training in the methods and tools of continual

improvement

Continual improvement of the

organization’s overall performance

should be a permanent objective of the organization.

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PRINCIPLE 7 – FACTUAL APPROACH TO DECISION

MAKING

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Effective decisions are based on the analysis of data and

information.

• Ensuring that data and information are sufficiently

accurate and reliable..

• Making data accessible to those who need it.

• Analyzing data and information using valid

methods.

PRINCIPLE 8 – MUTUALLY BENEFICIAL SUPPLIER

RELATIONSHIPS

• Identifying and selecting key suppliers.

• Pooling of expertise and resources with partners.

• Establishing relationships that balance short-term gains with long-term considerations.

An organization and its suppliers are interdependent and a mutually beneficial relationship enhances the ability of both to create value.

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PROCESS IMPROVEMENT TOOLS The Seven TQM Tools:1. Check Sheets2. Histograms3. Scatter Diagrams4. Control Charts5. Run Charts6. Ishikawa Diagram7. Pareto Diagram

“With correct implementation of the Seven TQM Tools 95% of quality related problems can be solved.” 21

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Check Sheets• Check Sheets are simple documents that

are used for collecting data in real-time. • A Check Sheet is typically a blank form

that is designed for the quick, easy and efficient recording of the desired information, which can be either quantitative or qualitative.

• When the information is quantitative, the check sheet is called a Tally Sheet.

Histograms• A histogram divides up the

range of possible values in a data set into classes or groups.

• For each group, a rectangle is constructed with a base length equal to the range of values in that specific group, and an area proportional to the number of observations falling into that group.

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Scatter Diagrams• Scatter Diagrams are used to present

measurements of two or more related variables. • A Scatter Diagram does not specify dependent

or independent variables. • Either type of variable can be plotted on either

axis. • Scatter Diagrams represent the association (not

causation) between two variables.

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Control ChartsA control chart consists of the

following:• A Centre Line (CL) drawn at the

process mean value.• Lower and Upper Control Limits that

indicate the threshold at which the process output is considered statistically unlikely.

Run ChartsRun Charts are similar in some regards to Contol Charts, but do not show the control limits of the process. They are therefore simpler to produce, but do not allow for the full range of analytic techniques supported by Control Charts.

• Run chart: Measurement against progression of time.

• Control chart: Add Upper Control Limit and Lower Control Limit to the run chart. 26

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Ishikawa Diagram• Also called fishbone diagrams (because of their shape)

or Ishikawa diagrams.• Helps in identifying root causes of the quality failure.

(Helps in the diagnostic journey.)

Problem

Method Material

Machine Manpower

• Ishikawa Diagram is also called Cause-and-Effect Diagram. Often are four generic heading used: 4 M´s!

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Pareto Diagram• The purpose of the Pareto Diagram is to highlight the

most important set of factors among a typically large amount of causes for a problem.

• In order to develop the Pareto Diagram for a specific process, the knowledge of Frequncy, Relative Frequency, Cumulative Frequency and Percentage Frequency is needed.

QUESTIONS : TRUE OR FALSE

1) Ishikawa Diagram is called Cause-and-Effect? 2) Today’s market demand high quality products at high cost. 3) Quality is a measure of excellence? 4) A customer is a person who purchases goods merchandise? 5) A product is any good’s offered to a market to satisfy a want or

need? 6) There are 12 principles of total quality management? 7) (TQM) means “total quality management”? 8) There are 8 tools of total quality management? 9) A product can be a service or an item? 10) Run Charts are similar to Contol Charts?

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(False)

(False)

(False)

(True)

(True)

(True)

(True)

(True)

(True)

(True)

QUESTIONS : LINK Reasons for quality 8 Principles of TQM The Seven TQM Tools A customer A product Judgmental perspective Check Sheets

Goodness of a product. An a item. Higher customer

satisfaction. Leadership. Simple documents. Run Charts. A person who purchases

goods

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