Total Quality Management (TQM)

© Operational Excellence Consulting. All rights reserved.
Total Quality
Management (TQM)

© Operational Excellence Consulting. All rights reserved. 4
Outline
1. Introduction to TQM
2. Customer Focus
3. Employee Involvement & Empowerment
4. Process Management
5. Cost of Quality
6. Business Excellence & Quality Management Models
7. Total Quality Leadership
8. Implementing TQM
9. Tools & Techniques for Total Quality
10. Summary & Closing
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Yesterday Today Tomorrow
A Committed A Quality A World-Class
Workforce Workforce Workforce
Training for Training for Training for
Employment Development Employability
Problem-solving A Quality An Innovation
Mindset Mindset Mindset
Changing Scenarios for Organizations

Characteristics of TQM
• Focuses on meeting customers’ needs, by providing
quality products and services at a reasonable cost
• Focuses on continuous improvement
• Recognizes role of everyone in the organization
• Views organization as an integrated system with a
common aim
• Focuses on the way tasks are accomplished
• Emphasizes teamworkThis document is a partial preview. Full document download can be found on Flevy:

Increased
Competitiveness
Changing
Product
Mix
Customer
Demands
Globally
Integrated
Economy
Total
Quality
Management
Impetus for Implementing TQM

Deming’s 14 Points
1. Create constancy of purpose toward the improvement of products
and services in order to stay competitive, stay in business and
provide jobs
2. Adopt the new philosophy
3. Stop depending on inspection to achieve quality
4. Stop awarding contracts on the basis of low bids
5. Improve continuously and forever the system of production and
service, to improve quality and productivity, and thus constantly
reduce costs
6. Institute training on the job
7. Institute leadership

Juran Trilogy
Quality
Improvement
Time
Original Zone of
Quality Control
New Zone of
Quality Control
CostofPoorQuality
Sporadic Spike
Chronic Waste
Quality Planning Quality Control (During Operations)
Lessons Learned
Source: Joseph Juran

Crosby articulated his view of quality in:
1. Quality means conformance to requirements.
2. Quality comes from prevention, which is a result of training,
discipline, example, leadership and more.
3. Quality performance standard is zero defects. Errors should not
be tolerated.
4. Quality measurement is the price of non-conformance.
Four Absolutes of Quality Management

“As with many other
things, there is a
surprising amount of
prejudice against
quality control, but the
proof of the pudding is
still in the eating.”
Kaoru Ishikawa

Activity: TQM Philosophies
1. In groups, review the philosophies of the
various TQM gurus.
2. Identify the specific teachings that can help
your organization to achieve better business
results, improved quality and increased
customer satisfaction.
3. Present your ideas to the class.
Time: 10 mins

Quality Management Principles
(ISO 9001:2015)
1.
Customer
Focus
2.
Leadership
3.
Engagement
of People
4.
Process
Approach
5.
Improvement
7.
Relationship
Management
Quality
Management
Principles
6.
Evidence-based
Decision Making

Holistic Approach to TQM
Source: Adapted from John Oakland
Culture
Systems Tools
Teams
Process
Customer-
Supplier
e.g. ISO 9000 Quality
System, Business
Excellence Models, etc.
e.g. Problem Solving
Techniques & Tools
e.g. Quality Management Team,
Quality Improvement Teams, etc.

“Profit in business
comes from repeat
customers, customers
that boast about your
project or service, and
that brings friends
with them.”
W. Edwards DemingThis document is a partial preview. Full document download can be found on Flevy:

Customer
Supplier
Customer
Supplier
Customer
Supplier
Customer
Customer
&
Supplier
Customer
&
Supplier
Customer
&
Supplier
Supplier
Customer
&
Supplier
Customer
&
Supplier
Customer
&
Supplier
2 Types of Customers:
Internal Customer
External Customer
Modern View of Suppliers and Customers

Kano’s Model : Customer’s Expected and
Latent Requirements
Source: Noriaki Kano
Satisfaction
Requirement
Unfulfilled
Requirement
Fulfilled
Dissatisfaction
Performance
(Satisfier)
Delighters
Basic
(Dissatisfier)

PERFORMANCE
FEATURES
RELIABILITY
CONFORMANCE
DURABILITY
SERVICEABILITY
AESTHETICS
PERCEIVED
QUALITY
PRODUCT
QUALITY
Source: Garvin, David A. (1984).
“What does Product Quality Really Mean?
Sloan Management Review. Vol. 26, No. 1.
Eight Dimensions of Product Quality

Class Activity
Meeting Customer’s Deadline

Learning Points from ‘Meeting Customer’s
Deadline’ Activity
1. The variability in the product delivery process by various parts of
the value chain represents the uncertainty faced by the end-
customer and different players in the value chain. What could the
company do to ensure a more timely and consistent delivery
process?
2. Apart from timely product delivery, what other requirements might
be demanded by the customers?
3. In the context of the work situation, identify who your suppliers
and customers are. What might be some of their requirements?

A Typical Organisation
Structured Vertically
Production Engineering Quality
General
Manager
Employees perform by divisions, leading to poor internal partnership.
Traditional View of Organization (Silo Effect)

Employees perform as a Linked Process, supporting the initiative
of Internal Partnership-Building.
The New View: Team Approach

“Alignment is the necessary
condition before empowering
individuals will empower the
whole team. Empowering the
individual when there is
relatively low level of
alignment worsens the chaos
and makes managing the team
more difficult.”
Peter Senge
The Fifth Discipline

Empowerment & Tools
• People empowerment comes from the ability of
employees to make a difference in the process they
manage
• People need tools to analyze, organize, understand and
use large amounts of data to make important decisions
that impact the bottom line

Quality Circle / Kaizen Team
• A group of workers who do
similar work and who meet:
Voluntarily
Regularly
In normal working time
Under the leadership of their
supervisor
To identify, analyze and solve
“work-related” problems
To recommend solutions to
management

Speaking with data is a
prerequisite
in successful process
management
Sustain Process
Improve/Modify
Process
Yes
No
Use & Analysis of
Information
Key Performance
Indicators
Meet
Targets &
Goals?
• Customer Feedback
• Market Data
• Product/Service
Performance
• Operational Results
• Supplier Quality
Process
Plan
DoCheck
Act
Applying Management-by-Fact in Process
Management

Definition of Key Process Elements
(continued)
• Customer: the internal and/or external recipient of our
product/service
• Output requirements: agreements negotiated with the
customers that define in measurable terms the product
or service that the customer needs
• Output: the product or service provided to satisfy the
output requirements
• Process: consisting of work activity or sequence of
tasks that adds value

Process Definition & Documentation
• Identify key process elements
• Document the process
Narrative documentation
Flowcharting
Process mapping
Value stream mapping
Process modeling tools

Process Improvement Roadmap
1. Define Customer Requirements
2. Establish Current Standards
3. State Improvement Goals
4. Analyze Current Process
5. Select Areas to Improve
6. Implement Improvement Actions
7. Evaluate the Results
8. Incorporate New Process

Process Control
• Control relates to conformance with requirements
• A problem exists when the process deviates from its
norms in terms of process parameters
• In such an event, a problem solving methodology is
employed to bring the process back into control

Why Measure COQ?
• Gain senior management commitment - $$$
• A scorecard with a common unit of measurement ($, or
as % of sales)
• An effective tool to measure and prioritize improvement
efforts
• Allocate resources for quality improvement
• Help set and monitor departmental quality improvement
targets
• Determine effectiveness of the quality plan

The 1-10-100 Rule
Prevention Cost
Correction Cost
Failure Cost
1
10
100
One dollar spent on prevention will save 10 dollars
on correction and 100 dollars on failure costs.
Source: Total Quality Management, Joel E. Ross

Cost of Non-Conformance (CONC)
• The costs incurred as a result of not doing things
right the first time
• Examples
Mistakes
Scrap
Rework
Equipment Downtime
Handling customer complaints
Warranty claims
Customer return analysis

Total Quality Costs can be reduced over time
with an effective quality management program
Low High
Low
High
COST
QUALITY
Total Cost of Quality
Cost of Conformance
Cost of Non-
Conformance

External Failure Costs
• The costs occurring after delivery or shipment of the
product — and during or after furnishing of a service
— to the customer
• Examples:
Warranty claims
Replacements
Customer returns
Product recalls
Customer return analysis
Handling customer complaints
Loss of customer goodwill

Prevention Costs
• The costs of all activities specifically designed to
prevent poor quality in products or services.
• Examples:
New product review
Quality planning
Quality education and training
Writing of procedures and instructions
Process capability studies
Preventive maintenance
Supplier capability surveys
Quality improvement projects

Less
Visible
Visible
Activity: Brainstorm a list of COQ
items in your organization or function
?
?
Time: 10 mins

Historical Background of Business Excellence
Models
Japan
USA Europe
The Deming
Prize
The Deming
Prize
The Malcolm
Baldrige National
Quality Award
The Malcolm
Baldrige National
Quality Award
The European
Quality Award
The European
Quality Award
The Australian
Business Excellence
Framework
The Australian
Business Excellence
Framework
Australia

The Deming Prize Framework
Source: Assessing Business Excellence, Porter & Tanner
2. Organization2. Organization
3. Information3. Information
4. Standardization4. Standardization
5. Human resource
development and
utilization
5. Human resource
development and
utilization
1. Policies1. Policies
10. Future plans10. Future plans
6. Quality assurance
activities
7. Maintenance/
Control activities
8. Improvement
activities
6. Quality assurance
activities
7. Maintenance/
Control activities
8. Improvement
activities
9. Effects9. Effects
Direction ResultsImplementationSupport

Excellence Categories
1. Leadership
2. Planning
3. Information
4. People
5. Processes
6. Customers
7. Results

2. Planning
• Focuses on the
organization’s planning
process and how all key
performance
requirements are
integrated into the
organisation’s plans.
Also examines the
deployment of the plans
and how performance is
tracked.
“Total Quality does not guarantee the
companies will produce strategies.
Winning strategies must come from the
minds of the leaders, augmented by
inputs from the troops.”
- Edwin Artzt
Chairman & CEO, Procter & Gamble

3. Information
• Key Excellence Indicators:
Balanced set of Performance Measures
Focus on Knowledge (Information of Value that is put to use)
Reliable, Accessible, Timely and Consistent Information
Organization has Strong Capability to Analyze Information

5. Processes
• Focuses on the key
processes the
organisation uses to
pursue its objectives and
goals, including the
design process,
production and delivery
processes, and supplier
and partnering
management processes.
“The quality of leadership will determine
the quality of products and services, and
the level of customer satisfaction.”
- Dr. Kenneth Blanchard
The One Minute Manager

6. Customers
• Key Excellence Indicators:
Well-defined Segmentation of Markets & Customers
Wide Range of Proactive Systems to Identify Current & Future
Markets / Customer Needs
Strategic Infrastructure Support for Customer Relationship
Proactive Systems to gather Hard & Soft Performance Data on
Customer Satisfaction

Total Quality Leadership
7

Systemic Alignment and Integration
S
Y
S
T
E
M
S
S
Y
S
T
E
M
S
• Customer Focus
• Vision, Mission
& Goals
• Shared Values
• Quality Principles
• Quality Policy
• Customer Focus
• Vision, Mission
& Goals
• Shared Values
• Quality Principles
• Quality Policy
TQM Operating
Philosophy
Ensures alignment &
integration to all
internal systems
Aligned to
company
goals
Misaligned to
company goals

Fundamentals of Quality
• The customer comes first
• Quality happens through people
• All work is part of a process
• Prevention is achieved through
planning
• Quality improvement never ends

Internalizing Quality in Our Work
• All work is part of a process
• Set standards based on
Customer Requirements
• Count defects and measure
cycle time against those
standards
• Keep it simple
These are the keys to making the
quality principles work for people

Key Forms of Waste
• Not doing things right the first time
• Doing things that are unnecessary
• Doing necessary things with
unnecessary steps
Both for Organizations and Individuals

Purely Personal Standards
• Quality principles can help us in our
personal as well as professional
lives
• Setting standards is essential; e.g.
responsiveness
• The presence of these items on a
list has a substantial and favorable
effect on actual behavior
Follow Benjamin Franklin who had a list of
virtues!

Personal Values Statement
• I commit to these values to guide my decisions and
behavior:
Respect for others: treat all other people with respect and
dignity at all times
Integrity: honesty in all of my dealings with others and with
myself
Commitment: applications of my energies and capabilities to the
people and organizations to whom I have an obligation
Excellence: always endeavor to be the best that I can be

Transition from Personal Quality to Total
Quality
Scarcity
Mentality
Abundance
Mentality
Dependence Independence Interdependence
Personal &
Professional
Development
Interpersonal
Relationship
Managerial
Effectiveness
Private
Victory
Public
Victory
Personal
Quality
Total
Quality
• Be Proactive
• Begin with the End
in Mind
• Put First Things First
• Think Win-Win
• Seek First to Understand
Then be Understood
• Synergize
• Sharpen the Saw
Process
Quality
Organizational
Productivity

Activity: Leadership Modeling
• In groups, discuss ideas that your department
management can implement in the next six
months to improve the following:
a) Personal leadership
b) Personal quality
c) Waste elimination
• Present your ideas to the class
Time: 10 mins

Generic Model for Implementing TQM
• Top management learns about and decides to commit to
TQM. TQM is identified as one of the organization’s
strategies.
• The organization assesses current culture, customer
satisfaction, and quality management systems.
• Top management identifies core values and principles to
be used, and communicates them.
• A TQM master plan is developed on the basis of steps 1,
2, and 3 (above).
Source: ASQ

Total
Customer
Satisfaction
External
Customer
Focus
Internal
Customer
Survey Corporate
Citizen & Public
Relations
VIA
Public
Relations
Marketing
Comm-
unication
Leadership &
Communications
Policy
Deployment
Mass
Comm
MSA
Human
Resources
Optimization
TQM
Resource
Group
Newsletter
OJT
Resource
Group
ST
Resource
Group
IST
Resource
Group
IE
Resource
Group
Personal
Mastery
Program
OCS
SnRCafeteria
Safety
Operational
Excellence
TPM
8D
Bench-
mark
SIT
BPR
Top/TQM
Projects
Patents
Win-Win
IFI
5S
ESD
TQM STEERING
COMMITTEE
Example: TQM Teams

What is Hoshin Kanri?
• A visual planning tool that helps us identify the key focus
points and strategies we will use to steer us towards our
vision
• Enables everyone to ‘see’ where we’re going and our
plans to get there
• Build plan and strategies as a team
• Shared responsibility for getting resultsThis document is a partial preview. Full document download can be found on Flevy:

Quality Function Deployment (QFD)
• QFD is a methodology for
defining the customer's desires in
the customer's own words,
prioritizing these desires,
translating them into engineering
requirements, and establishing
targets for meeting requirements
• Tool for defining the “right”
problem to solve
• Uses a series of matrices to
structure information acquisition
and documentation
QFD application on a Backpack
Tools & Techniques for Total Quality

The FMEA Process
1. Review the process
2. Brainstorm potential failure modes
3. List potential effects of failure
4. Assign Severity rankings
5. Assign Occurrence rankings
6. Assign Detection rankings
7. Calculate the RPNs
8. Develop the action plan
9. Take action
10. Calculate the resulting RPNs

7 Basic QC Tools
1. Stratification
2. Check Sheet
3. Control chart
4. Pareto Chart
5. Cause & Effect Diagram
6. Histogram
7. Scatter Diagram

Summary
10

Key Learning Points
• Total quality also implies that the organization has a
social responsibility in the community it operates in.
• Total quality culture can be viewed from three levels
namely, artifacts, values and belief, and underlying
assumptions. A culture of total quality has to be modeled
by the leadership.
• Strategy precedes organization.
• The application of tools and techniques facilitates the
systematic approach in implementing total quality.
Conclusion

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