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By Sourabh JainMBA 2010 - 2012

National Institute of Technology Karnataka,Surathkal, India

11/30/2013 1

Sourabh Jain

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Preface

This is a PowerPoint file I created in order to

help me in my studies.

The material in these slides are a distilled

version of the literature from 2 books

1. Total Quality Management

3

rd

Edition

Besterfield, Michna, Besterfield, Sacre.

2. Total Quality Management Bharat Wakhlu

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HOME

Introduction Leadership

Customer

Satisfaction

Employee

Involvement

Continuous Process

Improvement

Performance

Measures

QMS SPC

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Introduction


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Quality

Degree to which a set of inherent

characteristics fulfils requirements.

Q=Performance/Expectations

TQM; T = Total i.e. company-wide, suppliers,customers; M = Management i.e. art of

directing and controlling


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Quality q and Total Quality Q

Product orientation

Ensure produced goods are fit for sale

No prevention, No learning


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Quality q and Total Quality Q

Customer/Process/Product orientation

Listen to customer, product design, process

optimized

Right the first time, every time; Learning; importanceof internal customers


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Dimensions of Quality

Dimension Meaning

Performance Primary product characteristics

Features Added features

Conformance Meeting standards

Reliability Consistency of performance

Durability Useful life

Service Resolution of complaints

Response Human to human interface

Aesthetics Sensory characteristics

Reputation Past performance


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Total Quality

1. Performance Superiority

2. Delight customers

3. Provide value (value=quality/cost)

4. Doing the right things

5. Right the first time


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Definition of TQM

TQM is the art of managing the whole to achieveexcellence.

TQM is a philosophy and a set of guidingprinciples that represent the foundation of acontinually improving firm.

It is the application of quantitative methods andHR to improve all processes within a firm andexceed customer needs now and in the future.


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6 basic concepts of TQM

1. Committed and involved management to provide long term- topto bottom organizational support

2. Unwavering focus on the customer internal and external

3. Effective involvement and utilization of entire workforce

4. Continuous improvement of business and production process

5. Treat suppliers as partners

6. Establish performance measures for processes


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Culture changes for TQM

Quality element OLD CULTURE TQM CULTURE

Definition Product oriented Customer oriented

Priorities Second to service and cost Equal to 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

Managers Role Plan, assign, control,

enforce

Delegate, coach, facilitate,

mentor11/30/2013 12Sourabh Jain

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Model for TQM

Outstanding

Leadership

Product,

Services

and

Process

Systems

and

Procedures

People

power

CONTINUOUS

SYSTEMATIC

IMPROVEMENT

BENCHMARKINGCUSTOMER

FOCUS

MEETING/

EXCEEDING

CUSTOMER

EXPECTATIONS


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Paradigms of TQM

Belief that people are a potential source of

beneficial forces will lead to total quality

Functional and Hierarchical divisions of a firm

contribute to parochial thinkingnot good

Everyone has to participate in obtaining total

quality


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Gurus of TQM

Shewhart

1. Economic Control of Quality of Mfg product

2. Control Chart Theory3. Assignable and chance causes of variation

4. Rational Subgroups

5. PDSA cycle


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Gurus of TQM

Deming

1. Out of the Crisis

2. Quality, Productivity and CompetitivePosition

3. 14 points to improve q,p,c

4. Taught SPC and quality to Japanese


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Gurus of TQM

Juran

1. Jurans Quality control Handbook

2. Project Improvements based on ROI3. Promoted commitment to quality at all levels

4. Juran TrilogyPlanning, Control,

Improvement


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Gurus of TQM

Feigenbaum

1. Total Quality Control

2. Customer Satisfaction3. Genuine Management Involvement

4. Employee Involvement

5. Company wide total quality control6. First line supervision leadership


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Gurus of TQM

Ishikawa

1. SPC texts in Japanese and English

2. Adapted TQC i.e. TQM in Japan3. Fishbone diagram

4. Quality circles


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Gurus of TQM

Crosby

1. Quality is Free

2. Quality without tears3. Do it right the first time

4. Zero defects


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Gurus of TQM

Taguchi

1. Loss Function

2. Quality Engineering3. Robust design of parameters/tolerances


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Obstacles to TQM1. Lack of management commitment

2. Inability to change organization culture

3. Improper planning

4. Lack of continuous training and education5. Incompatible Org structure & isolated

departments and individuals

6. Ineffective measurement techniques

7. Paying inadequate attention to customers

8. Inadequate use of empowerment and teamwork

9. Failure to continually improve11/30/2013 22Sourabh Jain

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Benefits of TQM

Improve quality

Employee participation and satisfaction

Teamwork and Working relationships Customer satisfaction

Productivity

Communication Profitability and Market Share


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Leadership


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Leader

A leader

1. Shapes

2. Promotes3. Protects

4. Exemplifies

the organizations values


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Manager vs. Leader

Manager Leadership for quality (Outstanding leadership)

Plan EXPOSE limited utility of current approaches

Organize ENVISION the future

Staff ENLIST others in the quest

Lead EMPOWER them to act

Control ENCOURAGE right effort

Feedback EXEMPLIFY by personal action


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Leadership Style

FEARFULSTYLE

RIGID STYLEWHOLESOME

STYLE

Leads to time bomb

situations

Best style


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Characteristics of Quality Leaders

1. Priority attention to internal/external customers

2. Empower, rather than control subordinates

3. Emphasize improvement, rather than maintenance

4. Emphasize prevention

5. Encourage collaboration rather than competition

6. Train and coach, rather than direct and supervise


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Characteristics of Quality Leaders

7. Learn from problems

8. Continually try to improve communications

9. Continually demonstrate their commitment to quality

10. Choose suppliers on basis of quality, not price

11. Establish organizational systems to support quality effort

12. Encourage and Recognize team effort


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7 habits of highly effective people

1. Be proactive - dontlet fate control you, you control it

2. Begin with the end in mind have a vision and plan

3. Put first things first learn to prioritize

4. Think win-win seek mutual benefits

5. Seek first to understand, then be understood

6. Synergy teams are better than individuals

7. Sharpen the saw renew ones physical, spiritual, mental andemotional dimension


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Deming Philosophy

Create and publish aims/purpose of firm

Learn the new philosophy

Understand purpose of inspection

Stop awarding business on price alone

Improve constantly and forever the system

Institute training

Teach and institute leadership


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Deming Philosophy

Drive out fear, create trust and a climate for innovation

Optimize efforts of teams, groups and staff areas

Eliminate exhortations for the work force

Eliminate numerical quotas for workforce and MBO

Remove barriers that rob people of pride of workmanship

Encourage education and self-empowerment for everyone

Take action to accomplish the transformation


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Customer Satisfaction


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Company Offer

Customer Satisfaction Model

Customer Needs

Satisfier


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Notes

CustomerInternal and External is the focus.

Customer Satisfaction is subjective, hence

hard to measure

Customer Satisfaction should not be viewed ina vacuum


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Customer feedback

1. To discover customer dissatisfaction

2. Discover relative priorities of Quality

3. Compare performance with competition

4. Identify customers needs

5. Determine opportunities for improvement


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Modes of feedback1. Comment card Service industry

2. Customer Questionnaire mail, telephone

3. Focus groups like a GD

4. Toll free telephone numbers complaints

5. Customer visits B2B

6. Report card send to customer every quarter

7. The internet blogs

8. Employee feedback why problem?

9. Mass customization variety at affordable cost


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Customer ComplaintsComplain to

Management1%

Shout at FrontLine Employees

19%

Do nothing

80%

Action

Every complaint should be accepted, analyzed and acted upon because those

who dontcomplain might have switched loyalty.


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Handling complaints

Accept feedback

Empower front-line employees to resolve

More inspection does not solve it; find the root cause

Communicate complaint to everyone in firm

Contact complainant and put mind at ease

Be proactive about customer needs


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Employee Involvement


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Motivation

Maslows Hierarchy of needs

Herzbergs 2-factor theory

What employees want

1. Interesting Work

2. Appreciation

3. Involvement

4. Job Security


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Achieving a motivated work force1. Know thyself

2. Know your employees

3. Establish a +ve attitude

4. Share goals

5. Monitor progress

6. Develop interesting work

7. Communicate effectively

8. Celebrate success


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Employee Surveys

1. Quality Council creates Survey team

2. Develop instrument (questionnaire).Constructs to be used are1. Personality Characteristics

2. Management Styles

3. Job attitudes4. The work

3. Administer survey (confidential and by 3rdparty)

4. Compile and analyze (report is circulated in firm)

5. Determine areas for improvement


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Suggestion Systems

Management must make it easy for employees tosuggest improvements

1. Be progressive regularly ask employees

2. Remove fear focus on the process, not the person

3. Simplify the process

4. Respond quickly - accept/Reject/Refer giving timeor reason

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Performance Appraisal

Purpose1. Tells employee how they are performing

2. Basis for promotions and increments

3. Counseling4. Opportunities

Employee involvement is critical and appraisals

must be continuous.

TypesRanking, Narrative, Forced, Graphic


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Problems with appraisal systems

1. Emphasis on short term performance

2. Individual appraisals destroy teamwork

3. A person is only about 15 % responsible forhis results

4. Based on subjectivity and immeasurables


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Improving the appraisal system1. Use rating scales with fewer rating categories

2. Equal emphasis to individual and group appraisals

3. More frequent performance reviews with focus on

improvement

4. Promotion decision to be based on current performanceAND potential for new post

5. External customer satisfaction a part of the process

6. 360 degree appraisals

7. Evaluation for process improvements11/30/2013 47Sourabh Jain

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Benefits of employee involvement Employees

1. Make better decisions using expert knowledge ofprocess

2. More likely to implement and support decisions they

had a part in making/better able to accept changes

3. Better able to spot pinpoint areas for improvement

4. Better able to take immediate corrective action

5. EI increases morale, improves industrial relationsand increases commitment to unit goals


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Continuous Process

Improvement


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Juran TrilogyPlan, Control, Improve

Planning1. Determine external and internal customers

2. Identify their needs and translate into requirements

3. Develop product/service as per needs of not onlycustomer but other stakeholders too

4. Develop processes able to produce product/service

5. Transfer plans to operations ensuring process validity


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Control1. Determine items to be controlled and their units of

measure

2. Set goals for controls and determine what sensors areneeded

3. Measure actual performance

4. Compare it with goals

5. Act on the difference


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Improvement

Quality council identifies improvement areas and establishes project

teams to work on it

0

10

20

30

40

50

0 1 2 3 4 5 6 7 8 9 10

Time

Quality Control (during operations)

Cost of poor Quality

QualityImprovement

Original Zone of Quality Control

New Zone of Quality ControlChronic Waste

Sporadic Waste

QUALITY

PLANNING

FEEDBACK

FEEDBACK


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PDSA Cycle

Plan

Do

Study

Act


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Problem Solving method

1 IdentifyOpportunity

2 AnalyzeProcess

3 DevelopOptimal

Solution (s)

4Implement

5 Study theresults

6Standardize

solution

7 Plan forFuture


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1 Identify Opportunity

Identify problemPareto analysis, Survey,

Brainstorm, proposals

Form teamQC forms a multifunction team if

required

Define scopescope, goals, milestones


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2 Analyze Process

Develop Process Flow diagram

Define target performance measures

Relevant Data collection

Fishbone diagram


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3 Develop Optimal Solution (s)

Brainstormcreate new process/combine

different process/modify existing process

Evaluate Test solutions using control charts

criteria: feasibility, scope, training and effects


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4 Implement

Prepare implementation plan

Obtain approval

Implement process improvements


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5 Study the results

Monitor and evaluate the change

Check if fine tuning is needed

If dissatisfied with results, repeat some phases


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6 Standardize solution

Positrol (Positive control)ensures important

variables are kept under control

Process Certification

Operator Certification


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7 Plan for Future

Regular reviews of progress by QC

Knowledge Management Systemsave

learnings

Repeat Phase 1.


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Kaizen

Process of continuous improvement in smallincrements without complex technology or highcosts making processes better

Uses concepts like: Value/Non value addedactivities, Mudas, Motion studies, SOP, 5S, VisualManagement, JIT etc

5SSort, Simplify, Sweep, Standardize, Sustain


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Six Sigma

Uses Cp analysis as a way to measure progress

We should reduce the process variability to keep process

centered on the target .

Process Capability Index = USL-LSL/6

Process Performance Index Cpk

= min(USL-X,X-LSL)/3

Default Cp >1, Cpk =111/30/2013 63Sourabh Jain

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Performance Measures


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Strategy

QC creates a total system of measures using

info from stakeholders and firms VMG and

values

Ex: Quality

% reduction in nonconformities

% of certified suppliers


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Strategy

Cost % increase in inventory turnover

% increase in output dollars per employee

Similarly for innovation (NPD time), reliability (% processeshaving Cp=2), flexibility(setup time) etc.

Tracked monthly to show trends, identify problems andallocate resources

Depts create mechanisms and authorities to capture thisdata


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Performance Measure Presentation

1. Time series graph (Time in days, weeks etc)

2. Control charts (R,Xbar)

3. Capability Index

4. Taguchi Loss Function

5. Cost of poor quality

6. Malcolm Balridge National Quality Award11/30/2013 67Sourabh Jain

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Quality Costs

Those costs associated with the non-

achievement of product or service quality as is

required

Quality cost programsquantifies this cost

Use Pareto analysis to find major cost drivers


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Quality Costs

Preventive cost: Cost used up in preventing

recurrence of some failure. Ex: Customer

surveys, Product testing, Quality audits

Appraisal cost: Cost of assuring acceptability

of product. Ex: laboratory support, measuring

equipment, certifications


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Quality Costs

Internal Failure Cost: cost to evaluate, disposeoff, & either correct or replace nonconformingproducts prior to customer delivery. Ex:

rework and scrap, poor supply materials,internal failure labor loss

External Failure Cost: After delivery. Ex:returned goods, updates, warranty claims,penalties, lost sales, liabilities, goodwill


Malcolm Balridge National Quality

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Malcolm Balridge National Quality

Award

Leadership 110

Strategic Planning 80

Customer and Market focus 80

Information and Analysis 80

HR Focus 100

Process Management 100 Business Results 450


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Quality Management System


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QMS

Registration under ISO involves assessment andperiodic surveillance audit of the adequacy of asuppliersquality system by a 3rdparty

Benefits of ISO

1. Customers are demanding compliance

2. To improve processes/systems

3. Global deployment of products

4. Snowball effect


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ISO 9000

Generic in nature

It has 3 standards

ISO 9000:2000 QMS fundamentals/vocabulary

ISO 9000:2000 QMS requirements

ISO 9000:2000 QMS guidelines for

performance improvement


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ISO 9001 requirements

1. Scope

2. Normative reference

3. Terms and Definitions

4. QMSGeneral Reqs and Documents

5. Management Responsibility

6. Resource Management

7. Product Realization

8. Measurement, Analysis and Improvement


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Process based QMS

5ManagementResponsibility

8MeasurementAnalysis and

Improvement

7 ProductRealization

6 ResourceManagement

Input

Require

ments

Output

Product

Customer

Satisfaction

4 QMS

Continual

Improve

ment


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Implementation1. Top management commitment

2. Appoint management representative3. Awareness

4. Appoint implementation team

5. Training

6. Time Schedule7. Select element owners

8. Review present system

9. Write the documents

10. Install the new system11. Internal audit

12. Management review

13. Preassessment

14. Registration11/30/2013 77Sourabh Jain

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Documentation

Policy

Procedures

Work Instructions

Proof

What will be done and why ?

Who, When, Where

How


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Statistical Process Control


d

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Introduction

SPC is a technical tool for improving productand service quality.

Pareto Diagram Process Flow Diagram

Cause and Effect Diagram

Check Sheets Histogram


i

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Pareto Diagram

Vital few and the useful many

Ranks data classifications in descending order


P Di

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Pareto Diagram

Solving 50 % of vital few is better and easier

than 50 % of useful many

Never ending process


P Fl Di

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Process Flow Diagram


C d Eff Di

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Brainstorming essential. 4 or more likelycauses determined by voting


C d Eff t Di

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Wide scope for application

Encourages participation and contribution by

everyone

Diagrams posted in key locations to stimulate

continued reference


Ch k Sh t

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Check Sheets

For ease of data collection

Customized for situation


Hi t

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Histograms

Graphically estimates Cp, relationships tospecifications and target, shape of population

and gaps in data

Graphical and analytical

Ungrouped and Grouped data (for large data)


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N l

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Normal curve

Larger the Std Dev, flatter the curve (less data)


T d C f i ti

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Types and Causes of variation

Types1. Within piece

2. Piece to piece

3. Time to time

Causes

1. Equipment

2. Material

3. Environment4. Operator


V i bl C t l Ch t

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Variable Control Charts


Process Capability

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Process Capability

= Rbar/d2

Cp = (USL-LSL)/6

USL-LSL=tolerance

X

X

Cpk = min{(USL-Xbar) or (Xbar-LSL)}/3


Cp and Cpk

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Cp and Cpk

1. Cp value does not change as process centerchanges

2. Cp=Cpk process is centered

3. Cpk1 process conforms to specifications

5. Cpk

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Scatter diagrams

For correlations


BLUE OCEAN STRATEGY

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BLUE OCEAN STRATEGY


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