total quality managment

1. QUALITY MANAGEMENT
“360 DEGREE” TEAM

2. TOTAL MANAGEMENT AS A CONCEPT
- HOW QUALITY IS DEFINED
- 8 PRINCIPLES OF TOTAL QUALITY MANAGEMENT
- CUSTOMER SATISFACTION
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3. 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.”
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4. 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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5. 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

6. 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

7. 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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8. QUALITY PERSPECTIVES
Everyone defines Quality based on their own
perspective of it. Typical responses about the definition
of quality would include:
1. Perfection
2. Consistency
3. Eliminating waste
4. Speed of delivery
5. Compliance with policies and procedures
6. Doing it right the first time
7. Delighting or pleasing customers
8. Total customer satisfaction and service
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9. QUALITY PERSPECTIVES
Judgmental 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

10. QUALITY PERSPECTIVES
User-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

11. 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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12. 8 PRINCIPLES OF TOTAL QUALITY
MANAGEMENT
1. Customer focus
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
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13. 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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14. 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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15. 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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16. 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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17. 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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18. 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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19. 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.

20. 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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21. PROCESS IMPROVEMENT TOOLS
 The Seven TQM Tools:
1. Check Sheets
2. Histograms
3. Scatter Diagrams
4. Control Charts
5. Run Charts
6. Ishikawa Diagram
7. 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.

23.  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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24.  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 Charts
A 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.

26.  Run Charts
Run 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.

29. 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)

30. 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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