Productivity and Quality Management

Question BankWhat is TQM? State the objectives and benefits of TQMWhat are Quality management systems?State eight building blocks of TQMState 10 steps of TQMWhat is TPM and explain TPM awards14 points of Demings philosophy14 points of Crosbys philosophyExplain eight Principles of TQMWhat is Jurans Triology

Question BankWhat are Quality circles and how do they differ from Kaizen?What are 5 S practices?What is BPR? Why is it necessary to initiate this before we start ISO 9000?What is COQ? How do we bring down the COQ?What is six sigma?

Question BankExplain Malcolm Baldrige award what are the Techniques used in TQMState the factors affecting product and service Quality seperately

Increase Sales Volume (Increase Market share)Increase Sale PriceReduce Purchase cost of InputReduce cost of productionImprove quality (Reduce cost of Quality)Improve productivityImprove Profit

Productivity and Quality Mgmt DifferentiateProduction and ProductivityInspection and Quality ControlSystem, Procedures and ProcessesQuality Control and Total Quality Mgmt (TQM)TQM and Six Sigma

Productivity- Definition(Productivity is a ratio)The amount of output per unit of input (labor, equipment, and capital). Number of products / No. of hours taken to produce them

Revenue generated by employee / Salary of employee

System, Procedure and ProcessSystem is a set of interactive elements corresponding to the given inputs to produce the desired output

Procedure is a set of activities which have to follow in a systematic format without taking any shortcuts

Process is a set of activities/operations which follow the procedures and systems with right RM and intermittent checking to avoid any lapses.

ProcessProcess is a summation of activities such as operations, inspection, delays, storage, transportation and everything else that happens between the beginning and the end of the process

Six SigmaSix Sigma- (The statistical Representation) is a process of Quality measurement, which helps the organization in the improvement of their QualitySix Sigma is a systematical process which helps the organization to eleminate the defects which prevent it from reaching perfection Six Sigma ensures the QC, TQM and Zero DefectWhen a process attains six sigma level it means that there is no room for the product to failSix sigma is professionalizing of the Quality Management functions

Sigma Level % Good PPM/DPMO Cost of Quality as % of Sales 2 95.45 45500 Over 40% 3 99.73 2700 25 - 40% 4 99.9937 63 15 - 25% 5 99.999943 0.57 5 - 15% 6 99.9999998 0.002 Less than 1%

What is TQM ?Total quality management (TQM) is a business management strategy aimed at embedding awareness of quality in all organizational processes. TQM has been widely used in manufacturing, education, hospitals, call centers, government, and service industries, as well as NASA space and science programs

Total Quality Management (TQM) is a structured system for meeting and exceeding customer needs and expectations by creating organization-wide participation in the planning and implementation of improvement (continuous and breakthrough) processesWhat is TQM ?

Total Quality ManagementTotal: Involve all functions to have customer focus and give reliable delivery of product+service in line with customers expectations at lowest cost

Quality: Design and manufacture the product+service to achieve zero defect and 100% customer satisfaction

Management: Lead to achieve quality for customers by communicating the vision, mission and values to all employees and creating continuous improvement culture

Techniques for TQMTotal Employee Involvement : Kaizen, SGA, Quality Circles, KBP/BPR, customer satisfaction surveys, Training

Just in Time/ Waste Elemination : TPM, Zero Defect, supplier Partnership

Total Quality Control: TQC is applicable to all functions, use of 7 QC Tools, use of SPC/SQC and PDCA, ISO 9000, Six Sigma, ISO 14000, understand the processes critical to quality (CTQ)

In a global marketplace a major characteristic that will distinguish those organizations that are successful will be the quality of leadership, management, employees, work processes, product and service. This means that products must not only meet customers community needs for value, they must be provided in a continuously improving, timely, cost-effective, innovative, and productive mannerWhy TQM ?

Principles of TQM1. Customer-Focused Organisation 2. Leadership 3. Involvement of People 4. Process Approach 5. System Approach to Management 6. Continual Improvement 7. Factual Approach to Decision Making 8. Mutually Beneficial Supplier Relationships

1.Customer Focussed OrganizationUnderstand customer needs and expectations for products, delivery, price, dependability, etc. Ensure a balanced approach among customers and other stake holders (owners, people, suppliers, local communities and society at large) needs and expectations. Communicate these needs and expectations throughout the organisation. Measure customer satisfaction & act on results, Manage customer relationships

2. LeadershipBe proactive and lead by example. Understand and respond to changes in the external environment. Consider the needs of all stake holders including customers, owners, people, suppliers, local communities and society at large. Establish a clear vision of the organisation's future. Establish shared values and ethical role models at all levels of the organisation. Build trust and eliminate fear. Provide people with the required resources and freedom to act with responsibility and accountability. Inspire, encourage and recognise people's contributions. Promote open and honest communication. Educate, train and coach people. Set challenging goals and targets, and Implement a strategy to achieve these goals and targets.

3. Involvement of PeopleAccept ownership and responsibility to solve problems. Actively seek opportunities to make improvements, and enhance competencies, knowledge and experience. Freely share knowledge & experience in teams. Focus on the creation of value for customers. Be innovative in furthering the organisations objectives. Improve the way of representing the organisation to customers, local communities and society at large. Help people derive satisfaction from their work, and Make people enthusiastic and proud to be part of the organisation.

4. Process ApproachDefine the process to achieve the desired result. Identify and measure the inputs and outputs of the process. Identify the interfaces of the process with the functions of the organisation. Evaluate possible risks, consequences and impacts of processes on customers, suppliers and other stake holders of the process. Establish clear responsibility, authority, and accountability for managing the process. Identify internal and external customers, suppliers and other stake holders of the processWhen designing processes, consider process steps, activities, flows, control measures, training needs, equipment, methods, information, materials and other resources to achieve the desired result.

5. System Approach to ManagementDefine the system by identifying or developing the processes that affect a given objective. Structure the system to achieve the objective in the most efficient way. Understand the interdependencies among the processes of the system. Continually improve the system through measurement and evaluation, and Estimate the resource requirements and establish resource constraints prior to action.

6. Continual ImprovementsMake continual improvement of products, processes and systems an objective for every individual in the organisation. Apply the basic improvement concepts of incremental improvement and breakthrough improvement. Use periodic assessments against established criteria of excellence to identify areas for potential improvement. Continually improve the efficiency and effectiveness of all processes. Promote prevention based activities. Provide every member of the organisation with appropriate education and training, on the methods and tools of continual improvement such as the Plan-Do-Check-Act cycle , problem solving , process re-engineering, and process innovation. Establish measures and goals to guide and track improvements,and Recognise improvements.

7. Factual Approach to Decision MakingTake measurements and collect data and information relevant to the objective. Ensure that the data and information are sufficiently accurate, reliable and accessible. Analyse the data and information using valid methods. Understand the value of appropriate statistical techniques, and Make decisions and take action based on the results of logical analysis balanced with experience and intuition.

8. Supplier RelationshipIdentify and select key suppliers. Establish supplier relationships that balance short-term gains with long-term considerations for the organisation and society at large. Create clear and open communications. Initiate joint development and improvement of products and processes. Jointly establish a clear understanding of customers' needs. Share information and future plans, and Recognise supplier improvements and achievements.

Ten Steps to TQMSet company strategy, values and cultureIdentify the customers and understand their expectationsDefine their specific needsBuild the quality in the process from the begining(advocate prevention & not correction)Reduce chronic wasteReduce variationAll levels of the organization must be involved/trained Continually improve the quality of product or serviceUse structured methodology for process improvementUse a balanced approach

Objectives of TQM

100% Customer Satisfaction

Zero Defects

Continuous Improvement Culture

Eight Building Blocks of TQMEthicsIntegrity TrustTrainingTeamworkLeadershipRecognitionCommunication

Benefits of TQMAbility to be more competitiveImproved market shareCost reductionIncreased flexibility and responsivenessSimplified processesImproved communicationsMore satisfaction among the workforce

5 S PracticesSeiri : separate out needed itemsSeiton: organize workplace for faster retrieval (fix place for each item)Seison: sweeping/cleaning around work areaSeiketsu: keep everything clean for constant state of readinessShitsuke: Everyone must understand and practice the rules in the plant

MaintenanceMaintenance is done on the equipments to keep them running as efficiently as possible for as long as possibleThere are three types of maintenance :Breakdown maintenance (unplanned)Preventive maintenance (planned)Predictive maintenance ( High tech analysis )

Total Productive MaintenanceTPM , developed in Japan, is a scientific company wide approach in which every employee is concerned about the maintenance , quality and efficiency of the equipmentThe objective is to reduce the whole life cost of equipment through more efficient maintenance management and to integrate the maintenance and manufacturing functionsTeamwork is a key element of TPMAnalysis of each equipment focuses on reduction of manufacturing losses and costs

Total Productive MaintenanceTPM aims to achieve improvements in cost, quality and speed (productivity)This is equivalent to TQM (reduces variations due to automation)TPM addresses six big losses reduced yield process defects reduced speed idling and minor stoppages setup and adjustment equipment failure

TPM AwardsEffective 1971, the factories which displayed remarkable achievement in plant maintenance were given this awardEffective 1989, the factories which have achieved company-wide efficiency & productivity by adopting company-wide TPM are given this award

Five Pillars of TPM

1. Quality Integration (Process capability- Cpk)2. New Equipment Management (design)3. Autonomous Maintenance (military like)4. Planned Maintenance (reduce unplanned)5. Equipment Improvement (productivity)

Seven Deadly DisastersDr Deming- TQMLack of consistency of purposeEmphasis on short term profitsMBO and performance Appraisal systemJob hopping by managersUsing only visible data for decision makingExcessive medical costsExcessive cost of liability

Deming Application PrizeFor organizations or divisions of organizations that manage their business autonomously Given to organizations or divisions of organizations that have achieved distinctive performance improvement through the application of TQM in a designated year

Deming WheelSales >>>>SALES

Dr Deming ( 1900-1993)14 pointsCreate and publish statement of the aims and purpose for improvementsAdopt new philosophiesDo not depend on inspection for qualityEnd the practice of contract to lowest bidderContinuously improve the system of production and serviceInstitute training on the jobTeach and institute leadership

Dr Demings 14 points 8. Drive out fear, create trust and climate for innovation9. Direct all efforts to aims and purposes of co.10. Estimate targets for workforce11. Eliminate quotas and institute methods of improvements12. Eliminate annual rating and merit system13. Encourage education and self improvement14. Action to accomplish the transformation

Crosbys 14 steps (Born 1926)Commitment of top ManagementQuality improvement teamsEstablish Quality measurementEstimate Cost of qualitySpread Quality AwarenessIdentify opportunities for improvementCommittee for Zero defect monitoring

Crosbys 14 steps (contd)8. Employee education9. Zero defect day10. Goal setting11. Error cause removal12. Recognition13. Quality councils14. Do it all again

Crosbys 4 Absolutes of QMCrosbys philosophy: Do it right the first timeThe Four absolutes are:Quality conformance to requirementsSystem for causing quality- preventionPerformance standard- zero defectMeasurement of quality- price of non-conformance (COQ)

Jurans Philosophy(1904-2008)Quality = fitness for use by the customer

Jurans Triology: (Quality oriented Principles)Quality PlanningQuality ControlQuality improvement

Steps of Quality ControlSetting Quality standards

Apraising conformance to these standards

Acting when standards are exceeded

Planning for improvements in standards

Quality AssuranceDefinition : For the customer to buy the product/service with confidence and use it for a long time with ease and satisfaction, the manufacturer has to give assurance and also give evidence that the product will not fail

Steps of Quality AssuranceDevelop quality plansCarryout vendor quality surveysCarryout product quality auditsReview disposition of non-conforming productsInitiate customers future needsCo-ordinate document control activityUpgrade inspection records

Concepts of QualityVariation is the main reason of poor QualityThere is no such thing as Quality Problem, it is an opportunity to improveThere is nothing like economics of Quality,it is cheaper to do the job right , the first timeThe only performance measurement is the cost of QualityThe only Performance standard is ZERO DEFECT

Cost Of QualityPrevention Cost.investment costAppraisal CostInspection & AnalysisInternal CostScrap and reworkExternal CostCustomer Complaints Product Recalls and Returns

Cost of Quality

Contribution of Quality CostsPrevention costs..High throughoutAppraisal costslow/same throughoutInternal costs..initially high, gradually decliningExternal costsinitially high, sharply decline (stability period)Total Cost.sharply decline as the product becomes stable

Economic Balance of Quality and CostsAs we keep improving the Quality, the total Cost of Quality keeps coming downHowever if we improve the Quality beyond a certain point, the prevention cost will sharply go up and the total cost will also go up Hence we have to find an economic Balance of Cost and Quality (six sigma)

Audit of COQSet an annual target of COQMonitor the actual expenses of COQAll departments to control COQEvaluate COQ every month/QuarterCompute COQ as a percentage of SalesAt the start of TQM activity COQ and COQ as % of Sales is high, but gradually this comes down if TQM is implemented in the scientific mannerRevise the annual target of COQ downwards year after year

The Customer DelightCustomer awareness = keeping customersrequirements in mind

These requirements are: Right Quality, Right Quantity, Right time & Right Cost

The customer delight is far beyond customersatisfactione.g: Taxi keeping newspapers, Telephonedirectory, Railway Timetable, etc

Repeat Orders Why customers Quit ?

1% die natural death3% relocate5% move away due to friends contact9% due to competitive reasons14% poor quality of product68% indifferent attitude towards customers

Definition Of TQMOld Definition of Quality: Products and services are provided exactly as per the specifications already laid down

New definition of TQM: Products and services that totally satisfy the customer needs and expectations in every respect, on a continuous basis

Techniques of TQM

Total Employee Involvement : Kaizen, SGA, Quality Circles, KBP/BPR

Just in Time/ Waste Elemination: No waiting, material comes in the factory and directly goes for assembly instead of storing in stores

Total Quality Control: TQC is applicable to all functions, use of 7 QC Tools, use of SPC/SQC and PDCA

Implementation Process ofTQMTraining : Team Leaders, Facilitators and other employees Decision Style : Democratic firm decisionVision : Long Term Dream Mission : Short term objectives to achieve vision Quality Policy : Culture to be followedTQM Team Structure : Team Leader, FacilitatorSteering Committee : For Pain AreasShared Leadership : Develop the company objectives collectivelyCommunication : Throughout the organisationAnnual Reward Policy : Annual apraisals and recognition to performers

Elements of TQMCommitment by senior management and all employees Meeting customer requirements Reducing development cycle times Just In Time/Demand Flow Manufacturing Improvement teams Reducing product and service costs Systems to facilitate improvement Line Management ownership Employee involvement and empowerment Recognition and celebration Challenging quantified goals and benchmarking Focus on processes / improvement plans Specific incorporation in strategic planning

Vision StatementBill Gates:There will be a personal computer on every desk running microsoft softwareVision Statement should answer: Why did I start this business When I move on from this business, what do I leave behind What am I providing for my customers beyond product/service If my business could be everything I dreamed how would it be

Mission StatementMission statement describes the WHAT of your business, it states why your organization is in business and what you are hoping to achieveComponents of Mission Statement: The overall purpose of your businessWhat is your business: product/serviceWhat is important for your business- the values your business lives by

Expectations from the Mission StatementMission draws on your belief statementsMission must be future oriented and portray your organization as it will beMission must focus on one common purposeMission must be specific to the organization, not genericMission statement must be short, two sentences max

Quality Systems( Quality Mgmt systems)The quality of the product is checked to see the variationThe control in variation wrt the design spec/dimension is aimed atMore the variation, poorer the qualityLess the variation better the qualityThe analysis of variations ( control charts) give direction for the action to be taken to control the variation

Quality Management SystemQuality Plan (Quality Assurance Plan) A Quality plan is a document specifying the quality management system elements and the resources to be applied in a specific caseActivities to be considered are: Product spec,quality and delivery requirements, how the product/service is created and resources required,quality verification and records to be kept to demonstrate conformity

Road Map of Quality PlanIdentify who the customers areDetermine the needs of those customersTranslate those needs into our languageDevelop a product that can respond to those needsOptimise the product features so as to meet our needs and customers needsOptimise the processProve that the process can produce the product under operating conditionsTransfer the process to operation

ISO 9000 StandardsISO 9000 is a series of International stdsTo be used by the cos. wanting to implement in house quality systemsThese stds are developed by international organization for standardization (ISO)These promote international trade by providing one consistent set of requirements recognized around the world

ISO 9000 CertificateAny organization in any business field can make application to the certifying agencies e.g. BVQI for obtaining ISO 9000 certificateThey guide the organization to make the quality manual of inhouse procedures and systemsManagement representatives are appointed to look after ISO requirementsAny deviation is termed as NC and recorded in NCR (non conformity report) which needs to be resolved Then the certifying agency awards ISO 9000 certificate

Quality ManualThis is an important document and covers the following areas of business:

1. Management responsibility2. Quality system3. Contract review4. Purchasing5. Product identification and traceability6. Process control7. Inspection and test equipments8. Control of non conforming products9. Storage, packing and delivery10. Quality records11. Internal quality audits12. Training 13. Statistical techniques

ISO 9000 SeriesISO 9001 covers product design, Mfg, marketing, installation and services

ISO 9002 covers Mfg and Mktg

ISO 9003 covers installation and testing

ISO 14000ISO 14001-1996 is a part of Quality Management system pertaining to environment management.All organizations have to control the impact of their activities, products and services on the environmentMost countries have stringent norms for control on pollutionThe company has to audit to assess their performance and ensure that it is within limits This system needs to be integrated with overall quality management system of the organization

QS 9000(Now known as TS 16949)QS 9000 issued in 1994 is the name given to the Quality System Requirements of the automotive industry which were developed by Chrysler, Ford & General Motors and the companies having QS-9000 are considered to have higher standards and better quality products. QS-9000 helps companies to stay ahead of their competition. It does this by filling gaps in the quality systems that can cause problems QS 9000 tells current and potential customers that the product has consistent quality and is manufactured under controlled conditions.

Business Process Re-engineering(BPR)

BPR is a management approach aiming at improvements by identifying and implementing new ways of carrying out work. Thus elevating efficiency and effectiveness of the processes that exist within and across the organization

Steps of BPRDevelop the business Vision and process objectives such as cost reduction, time reduction, output quality imrovement etc.Identify the business processes to be redesigned (challenge old processes)Evaluate old processes to avoid repetition of old mistakesIdentify IT levers: awareness of IT capabilities can influence BPR processDesign and build new process

Malcolm Baldrige AwardThis annual award was introduced in US in 1987 to recognize US companies for Business Excellence and Quality achievement. The objectives were :To promote awareness of QualityTo understand requirements for Performance ExcellenceSharing of successful practices with other companies

Malcolm Baldrige AwardImportant Roles:Improve performance practices and capabilitiesSharing of best practicesServe as a working tool for managing performance, planning, training and assessmentImprovement of overall co. performance

Malcolm Baldrige Award Award examines the quality of the organization in 7 categories: (100 marks each)LeadershipInformation and AnalysisStrategic PlanningHuman Resource Development & mgmtProcess Management (Improvements)Business Results (Improvements)Customer Focus and Satisfaction

Malcolm Baldrige AwardSteps for ExaminationWrite the application with the overview of co , the vision and mission, strategic plans and trends of improvements in last 5 years in all areas of criteria (categories)The application shall be assessed and marks will be given to individual companyThe site visits shall be made by the examiners to verify the trends and practices

Product and Service Quality Factors affecting Product QualityMenMaterialsMachinesManufacturing conditionsManufacturing processCapability to invest moneyManagement commitment to QualityProduct design (Tangible and *Intangible)After sales service (*Safety and Reliability)

Product and Service QualityTen Dimensions of Service Quality

1. Quality2. Tangibility3. Reliability4. Responsiveness5. Communication

6. Security7. Competence8. Courtesy9. Understanding10. Access

Some examples of Service QualityAnswer the phoneDont overpromiseListen to your CustomersDeal with ComplaintsBe helpful and knowledgeableTrain the staff to be courteousTake the extra stepThrow in something extra

Service QualityService quality has high level of intangibilityMost services are intangible as there are performances and not objectsServices are perishable , they can not be inventoried, saved and resold laterThe actual performance of service differs from provider to provider

Quality CirclesQC is a small group of employees working on similar jobs, mostly at worker level to perform quality control and improvement activities within their workplaceThese groups work on continuous improvements as a part of company wide activityThis was started in Japan in 1962 in line with the conviction of Ishikawa that the workers can significantly contribute to improve quality and productivityJapan attributes phenomenal growth in 1960-1970 to QC

Quality CirclesBasic Objectives:Wider contribution towards improvement and development of the enterpriseRespecting humanity and building a happy and cheerful workplaceExploiting human capabilities fully and drawing out infinite possibilities

Quality CirclesComponents of QCDecide on the themeEstablish the goalsClarify reasons and their importanceAccess the current situationProbe the causes and analyze themEstablish corrective measures Implement the measuresEvaluate resultsStandardize to prevent slipupsReflection of the results

Structure of Quality CircleTop management (monitor progress)Steering committee (Evaluate progress)Facilitator (eliminate hurdles)Leader and Dy Leader (guide members)Members (study cause and effect)Non members (give additional inputs)

Sequence of TQMOperational Management 5 S BPRQuality Management QC ( Quality Circles) ISO TPM ( Total Productive Maintenance) Six Sigma ( For Processes CTQ )

Books For ReferenceQuality Mgmt Systems Devendra Kumar Bhatt / Aparna RajProductivity and Quality Mgmt Shashikant D Aphale Vipul Prakashan