UNIT-I INTRODUCTION

Definition of Quality, Dimensions of Quality, Quality Planning, Quality costs - Analysis Techniques for Quality Costs, Basic concepts of Total Quality Management, Historical Review, Principles of TQM, Leadership – Concepts, Role of Senior Management, Quality Council, Quality Statements, Strategic Planning, Deming Philosophy, Barriers to TQM Implementation.INTRODUCTION TO QUALITY

One of the important issues that business has focused on in the last two decades is “quality”. The other issues are cost and delivery. Quality has been widely considered as a key element for success in business in the present competitive market. Quality refers to meeting the needs and expectations of customers. It is important to understand that quality is about more than a product simply working properly.

Quality refers to certain standards and the ways and means by which those standards are achieved, maintained and improved. Quality is not just confined to products and services. It is a homogeneous element of any aspect of doing things with high degree of perfection. For example Business success depends on the quality decision making.

EVOLUTION OF QUALITYTime Events

Until 1960sPrior to the Quality is an art20th century Demands overcome potential production

An era of workmanshipF.Taylor The scientific approach to management resulting in rationalization of work1900s and its break down leads to greater need for standardization, inspection and

supervisionShewart Statistical beginnings and study of quality control. In parallel, studies by R1930s A Fisher on experimental design; the beginning of control charts at western

Electric in USALate Quality standards and approaches are introduced in France and Japan.1930s Beginning of SQC, reliability and maintenance engineering1942 Seminal work by Deming at the ministry of war in USA on quality control

and samplingWorking group setup by Juran and Dodge on SQC in US armyConcepts of acceptance sampling devised

1944 Daodge and Deming carried out seminal research on acceptance sampling1945 Founding of the Japan standard association1946 Founding of the ASQC1950 Visit of Deming in Japan at the invitation of K Ishikawa1951 Quality assurance increasingly accepted1954 TQC in Japan ; Book published 1956

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1957 Founding of European organization for the control of qualityAfter 1960s1961 The Martin Co in USA introduces the zero defects approach while

developing and producing Pershing Missiles. Quality motivation is startingin the US and integrated programmes begun

1962 Quality circles are started in Japan1964 Ishikawa publishes book on Quality management1970 Iskiawa publishes the book on the basics of quality circles and the concept

of Total Quality is affirmed and devised in Japanese industries1970 to Just – in –Time and quality become crucial for competitiveness. A large1980 number of US and European corporations are beginning to appreciate the

advance of Japan’s industries. Taguchi popularizes the use ofenvironmental design to design robust systems and products

1980+ Facing the rising sun challenge in quality managementDevelopment and introduction of FMSs and greater dependence onsupplier contracts.Growth of economic based on quality control, information softwarepackages

1990+ The management of quality has become a necessity that is recognized at alllevels of managementIncreasing importance is given to off line quality management for thedesign of robust manufacturing processes and products. The growth ofprocess optimization

QUALITY – DEFINITION1. Predictable degree of uniformity and dependability at low cost and suited to the

market -Deming 2. Fitness for use-Juran 3. Conformance to requirements - Crosby 4. Minimum loss imparted by a product to society from the time the product is

shipped - Taguchi 5. A way of managing tile organization -Feigenbaum 6. Correcting and preventing loss, not living with loss - Hosffin . 7. The totality of characteristics of an entity that bear on its ability to satisfy stated

and implied needs – ISO QUANITIFICATION OF QUALITY

Quality = Performance = P Expectations E

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DIMENSION OF QUALITY

1. Performance 2. Features 3.Conformance4. Reliability 5. Durability 6.Service7. Response 8. Aesthetics 9.Reputation

TOTAL QUALITY MANAGEMENT

Total - Made up of the whole

Quality- Degree of excellence a product or service provides Management- Act, Art or manner of handling, controlling, directing, etc...Why TQM:

1. A question of survival in the intense competitive environment 2. Increasing customer consciousness

DEFINITION:

1. TQM is the management approach of an organization, centered on quality, based on me participation of all its members and aiming at long-term success through customer satisfaction. and benefits to all members of me organization and to society.- ISO

2. TQM is an integrated organizational approach in delighting customers (both internal and external) by meeting their expectations on a continuous basis through every one involved with the organization working on continuous improvement in

all products, services, and processes along with proper problem solving methodology - INDIAN STATISTICAL INSTITUTE ( ISI )

3. TQM is a. people - focused management system that aims at continual increase in customer satisfaction at continually lower cost. TQM is a total system approach (not a separate area of program ), and an integral part of high level strategy. It works horizontally across functions and departments, involving all employees, top to bottom, and exceeds backwards and forward to include the supply chain and the customer chain – TOTAL QUALITY FORUM OF USA

CHARACTERISTICS

1. Customer Oriented

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2. Long term commitment for continuous improvement of all process 3. Team work 4. Continuous involvement of top management 5. Continuous improving at all levels and all areas of responsibility

BASIC CONCEPTS OF TQM:1. Top management commitment 2. Focus on the customer – Both internal and external 3. Effective involvement and utilization of entire work force 4. Continuous improvement 5. Treating suppliers as partners 6. Establishing performance measures for the processes

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.

DIMENSIONS OF QUALITY :-------------------------------------------------------------------------------------------------Dimension Meaning and Example-------------------------------------------------------------------------------------------------Performance Primary product characteristics, such as the brightness of the picture Features Secondary characteristics, added features, such as remote

controlConformance Meeting specifications or industry standards, workmanshipReliability Consistency of performance over time, average time of the unit to failDurability Useful life, includes repairService Resolution of problems and complaints, ease of repairResponse Human – to – human interface, such as the courtesy of the

dealerAesthetics Sensory characteristics, such as exterior finishReputation Past performance and other intangibles, such as being ranked first

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QUALITY PLANNING

The following are the important steps for quality planning.

1. Establishing quality goals. 2. Identifying customers. 3. Discovering customer needs. 4. Developing product features.5. Developing process features. 6. Establishing process controls and transferring to operations.

IMPORTANT POINTS TO BE NOTED WHILE QUALITY PLANNING :

1. Business, having larger market share and better quality, earn returns much higher than their competitors.

2. Quality and Market share each has a strong separate relationship to profitably.

3. Planning for product quality must be based on meeting customer needs, not just meeting product specifications.

4. For same products. We need to plan for perfection. For other products, we need to plan for value.

QUALITY COSTS

PREVENTION COST

Marketing / Customer / User.

Product / Service / Design Development.

Purchasing

Operations (Manufacturing or Service)

Quality Administration.

APPRAISAL COST

Purchasing Appraisal Costs.

Operations Appraisal Costs

External Appraisal Costs

Review of Test and Inspection Data

Miscellaneous Quality Evaluations

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INTERNAL FAILURE COST

Product or Service Design Failure Costs (Internal)

Purchasing Failure Costs

Operations (Product or Service) Failure Costs

EXTERNAL FAILURE COST

Complaint Investigations of Customer or User Service

Returned Goods

Retrofit and Recall Costs

Warranty Claims

Liability Costs

Penalties

Customer or User Goodwill

Lost Sales

ANALYSIS TECHNIQUES OF QUALITY COST

The techniques available for analysis of quality costs is,

Trend Analysis Pareto Analysis

Trend Analysis

Trend analysis involves simply comparing present cost levels to past levels. Trend analysis provides information for long-range planning. It also provides information for the instigation and assessment of quality improvement programs. Data for trend analysis come from the monthly report and the detailed transactions that male up the elements.

Trend analysis can be done by cost category. By product, by measurement base, by plants with in a corporation, by departments by work center, and by the combinations there of

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Time scales for these time-series graphs may be by month, by quarter, or year depending on the purpose of the analysis.

TREND (or) TIME-SERIES GRAPH

Pareto Analysis

Pareto Analysis is one of the most effective cost-analysis tools.

This is the Pareto diagram for internal failures. Items are located in descending order, beginning with the largest one on the left. A Pareto diagram has few items that represent a substantial amount of the total. These items are located on the left of the diagram and are referred to as the vital few.

A Pareto diagram has many items that represent a small amount of total. These items are located on the right and are referred to as the useful many. Pareto diagrams can be established for quality costs by operator, by machine, by department, by product line, by nonconformity, by category, by element.

Once the vital few are known, projects can be developed to reduce their quality costs. Money is spend to reduce the vital few quality costs; little or no money is spend on the useful many

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2005 2006 2007 2008 2009

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SalesCOGSGM

PARETO DIAGRAM

SIX BASIC CONCEPTS OF TOTAL QUALITY MANAGEMENT

1. Management Commitment

2. Customer Focus

3. Involvement and utilization of entire work force

4. Continuous Improvement

5. Treating Suppliers as Partners

6. Establish Performance Measures for the processes

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NEW AND OLD CULTURES :

----------------------------------------------------------------------------------------------------------------Quality Element Previous State TQM----------------------------------------------------------------------------------------------------------------Definition Product Oriented Customer Oriented

Priorities Second to service First among equals ofand cost service and cost

Decisions Short term Long term

Emphasis Detection Prevention

Errors Operations System

Responsibility Quality control Everyone

Problem Solving Managers Teams

Procurement Price Life cycle costs,Partnership

Manager’s Role Plan, assign, control Delegate, coach,and enforce facilitate and mentor

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GURUS OF TQM :

SHEWHART - Control chart theory- PDCA Cycle

DEMING - Statistical Process Control

JURAN - Concepts of SHEWHART- Return on Investment ( ROI )

FEIGANBAUM - Total Quality Control- Management involvement - Employee involvement - Company wide quality control

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ISHIKAWA - Cause and Effect Diagram- Quality Circle concept

CROSBY - “Quality is Free”- Conformance to requirements

TAGUCHI - Loss Function concept- Design of Experiments

OBSTACLES IN IMPLEMENTING 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

Ineffective measurement techniques and lack of access to data and results

Paying inadequate attention to internal and external customers

Inadequate use of empowerment and teamwork

Failure to continually improve

BENEFITS OF TQM :

Improved quality

Employee participation

Team work

Working relationships

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Customer satisfaction

Employee satisfaction

Productivity

Communication

Profitability

Market share LEADERSHIP

A leader is one who instills purposes, not one who controls by brute force. He strengthens and inspires the followers to accomplish shared goals.

Leaders Shape the Organization’s value

Promote the Organization’s value

Protect the Organization’s value and

Exemplifies the Organization values

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.

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LEADERSHIP CONCEPTS :

A leader should have the following concepts1. 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.

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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 programmes 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 programme. 20. Teach others for the betterment of society and the surroundings.

QUALITY COUNCIL

A quality council is established to provide overall direction.

The council is composed of

Chief Executive Officer

Senior Managers

Coordinator or Consultant

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

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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

VISION STATEMENT :

It is a short declaration of what an organization aspires to be tomorrow.

Example :Disney Theme Park - Happiest place on earthPolaroid - Instant photography

Successful visions provide a guideline for decision making

MISSION STATEMENT :

It answers the following questions Who we are?

Who are the customers?

What we do?

How we do it?

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It describes the function of the organization. It provides a clear statement of purpose for employees, customers & suppliers

A simpler mission statement is

“To meet customers transportation and distribution needs by being the best at moving their goods on time, safely and damage free”

- National Railways

QUALITY POLICY STATEMENT :

It is guide for everyone in the organization as to how they should provide products and services to the customers.

Common characteristics are Quality is first among equals

Meet the needs of the internal & external customers

Equal or exceed competition Continuously improve the quality

Utilize the entire workforce

STRATEGIC QUALITY PLANNING

Goals – Long term planning (Eg : Win the war)Objectives – Short term planning (Eg : Capture the bridge)

Goals should

Improve customer satisfaction, employee satisfaction and process

Be based on statistical evidence

Be measurable

Have a plan or method for its achievement

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Have a time frame for achieving the goal

Finally, it should be challenging yet achievable

SEVEN STEPS TO STRATEGIC QUALITY PLANNING :

1. Customer needs 5.Closing the gap

2. Customer positioning 6.Alignment

3. Predict the future 7.Implementation

4. Gap analysis

DEMING PHILOSOPHY

1. Create and publish the Aims and Purposes of the organization. 2. Learn the New Philosophy. 3. Understand the purpose of Inspection. 4. Stop awarding business based on price alone. 5. Improve constantly and forever the System. 6. Institute Training. 7. Teach and Institute Leadership.

8. Drive out Fear, Create Trust and Create a climate for innovation.

9. Optimize the efforts of Teams, Groups and Staff areas. 10. Eliminate exhortations for the Work force. 11a. Eliminate numerical quotas for the work force.11b. Eliminate Management by objectives.

12. Remove Barriers THAT ROB PEOPLE OF PRIDE OF WORKMANSHIP.

13. Encourage Education and Self-improvement for everyone. 14. Take action to accomplish the transformation.

TQM IMPLEMENTATION :

Begins with Management Commitment

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Leadership is essential during every phase of the implementation process and particularly at the start

Senior Management should develop an implementation plan

Timing of the implementation process is very important

Formation of Quality Council

Active involvement of Middle Managers and First Line Supervisors is essential

Early discussions with the Union is a must

Communicate TQM to the entire organization

Training on quality awareness and problem solving

Customer, Employee and Supplier surveys must be conducted to benchmark

The council establishes the project teams and work groups and monitors their progress

Obstacles or barriers to the implementation of TQM

Lack of management commitment For any organizational effort to succeed there must be a substantial management

commitment of management time and organizational resources. The purpose must be clearly and continuously communicated to all personnel. Management must consistently apply TQM principles.

Inability to change organizational culture Changing an organization’s culture is difficult and will require as much as five years.

Individuals resist change. They become accustomed to doing a particular process and it becomes the preferred way. Management must understand and utilize the basic concepts of change. They are : (i) People change when they want to and to meet their own needs (ii) never expect anyone to engage I behavior that services the organization’s values unless adequate reason (why) has been gives (iii) for change to be accepted people must be moved from a state of fear to trust. It is difficult for individuals to change their way of doing things; it is much more difficult for an organization to make a cultural change.

Improper planning

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All constituents of the organization must be involved in the development of the implementation plan and any modifications that occurs as the plan evolves. Two-way communication of ideas by all personnel during the development and implementation of TQM is essential to avoid the failures.

Lack of continuous Training and Education Training and education is an ongoing process for every one in the organization. Needs

must be determined and a plan developed to achieve those needs. Training and education are most effective when senior management conducts the training on the principles of TQM. Informal training occurs by communicating the TQM effort to all personnel on a continual basis.

Incompatible organizational structure and isolated individuals and departments. Differences between departments and individuals can create implementation process. The

use of multifunctional teams will help to break down long-standing barriers. Restructuring to make the organization more responsive to customer needs may be needed. Individuals who do not embrace the new philosophy can be required to leave the organization.

Ineffective measurement techniques and lack of access to data and results. To make effective decisions the lay characteristics of the organization should be

measured. In order to improve a process it is essential to measure the effect of improvement needs. Access to data and quick retrieval is necessary for effective processes.

Paying inadequate attention to internal and external customersOrganizations need to understand the changing needs and expectations of their customers.

Effective feedback mechanisms that provide data for decision making are necessary for this understanding. One way to overcome this obstacle is to give the right people direct access to the customers.

Inadequate use of empowerment and teamwork Teams need to have proper training and at least in the beginning a facilitator. Whenever

possible, the team’s recommendations should be followed. Individuals should be empowered to make decisions that affect the efficiency of their process or the satisfaction of their customers.

Failure to continuously improve I.e. a change in the organizational culture or the mind set of employees.

From result orientation to process and result orientation From company orientation to customer and company orientation From task orientation to people and task orientation

Absence of long-term vision by top management The management related barriers are,

Fear of senior management losing control Doubts of senior management about methodology of TQM

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Lack of motivation at senior level In correct or insufficient or incompatible organizational structure.

Customer related barriers are, Inadequate attention to internal and external customers and the public. Training to

anticipates, sense and the interpretation of changing needs and aspirations of the customers and appropriate sampled surveys and feedback are initiated by many high profile companies, when a new product is launched.

Lack of social responsiveness Risks and benefits to the public are ignored or not evaluated.

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