OMTQM – FINALS

TOTAL QUALITY MANAGEMENT

Quality as a Field

Quality is a discipline that focuses on product and service excellence. Both manufacturing and service
companies have quality programs. Quality is closely related to the variation in both products and
processes, and statistics is the tool that allows us to study variation. Most of the quality programs are
data driven and almost all data show variation that can be studied using statistics.

Major Objectives

One of the major objectives of the quality programs:

To reduce the variation in the product and process to the extent that the likelihood of producing a
defect is virtually nonexistent - This means improving quality and meeting or exceeding customer's
expectations. The improved quality and reliability in products and services lead to higher perceived value
and increased market share, thereby, increasing revenue and profitability.

Quality Defined

- the standard of something when it is compared to other things.’ - Oxford Dictionary

- The total composite product and service characteristics of marketing, engineering, manufacture
and maintenance through which the product and service in use will meet the expectation by the
customer’ – Feigenbaum, the first man to write a book with ‘Total Quality’ in the title.
- The totality of features and characteristics of a product or service that bear on its ability to
satisfy stated or implied needs’– BS 4778: 1987 (ISO 8402, 1986) Quality Vocabulary: Part 1,
International Terms.

Quality has a transcendental definition and can also be product based, user based, manufacturing
based, and value based.

Quality - refers to certain standards and the ways and means by which those standards are achieved,
maintained and improved. “Performance upon expectations” and “fit for functions.”

QUALITY AS:

 Fitness for intended use

 Conformance to specifications

 Inversely proportional to variation

 Total customer service and satisfaction

 Meeting or exceeding customer expectation

 The degree or standard of excellence of something

Quality is a subjective concept, but it is generally understood to mean the degree to which a product or
service meets or exceeds customer expectations. It can also be defined as the fitness for use of a product
or service.

Following are some of the other ways quality has been defined:

Transcendent: Quality is something that is intuitively understood but nearly impossible to communicate,
such as beauty or love.

Product-based: Quality is found in the components and attributes of a product.

User-based: If the product or service meets or exceeds customer's expectations, it has good quality.

Manufacturing-based: If the product conforms to design specifications, it has good quality.

Value-based: If the product is perceived as providing good value for the price, it has good quality.

Dimensions of Quality

Garvin’s 8 Dimensions of Quality

1. Performance – a performance characteristic describes a product’s essential function.

2. Features – a secondary aspect of performance.
3. Reliability – is the ability of a product or service to perform as expected over time.
4. Conformance – is the degree to which a product conforms to its specification.
5. Durability – is the measurement of product of life.
6. Serviceability – is the ease at which a user can repair a faulty product or get it fixed.
7. Aesthetics – refers to the appearance of a product or service.
8. Perceived Quality – is the overall opinion of the customers towards the product.

Importance of Quality

There is a close relationship between quality, profitability, and market share. Quality is achieved through
customer's perception; therefore, organizations must understand customer needs and expectations to
meet and exceed them. Customer needs and expectations can be achieved through quality
improvement. Quality is important to the consumers.

Importance of Quality to Consumers

 It ensures error free products.

 It enhances the development of new or innovated products.

 It helps to give warranty or guarantee of products.

 It enables good customer service.

 It promises timely delivery.

 It helps in getting all the desired features in products and services.

 It helps in getting satisfaction after the use of products and services

Importance of Quality to Producers/ Manufacturers

 Quality helps in meeting the changing demands of the consumers.

 It ensures delivery of flawless or zero error products or services.

 It ensures delivery of products or service on time.

 It helps in giving superior products produced with advanced engineering technology

 It helps in meeting or fulfilling the commitment.

Cost of Quality

In his book Quality is Free, Phillip Crosby has described quality costs or the costs of quality (COQ) as
having two components:

(1) costs of good quality (or the cost of conformance)

(2) costs of poor quality (or the cost of nonconformance).

The cost of quality (CoQ) is a measure of the total cost associated with ensuring that products and
services meet quality standards. It includes both the costs of preventing defects and the costs of dealing
with defects that do occur.

The CoQ can be divided into two main categories:

 Cost of good quality (COGQ): These are the costs associated with preventing and detecting
defects, such as the costs of quality planning, training, inspection, and testing.

 Cost of poor quality (COPQ): These are the costs associated with defects that do occur, such as
the costs of scrap, rework, warranty claims, and customer dissatisfaction.

The COPQ can be further divided into two subcategories:

 Internal failure costs: These are the costs associated with defects that are found before the
product or service reaches the customer, such as the costs of scrap and rework.

 External failure costs: These are the costs associated with defects that are found after the
product or service reaches the customer, such as the costs of warranty claims, customer
dissatisfaction, and product recalls.

By measuring and managing their CoQ, businesses can identify areas where they can improve quality
and reduce costs. This can lead to several benefits, including:

 Increased customer satisfaction

 Reduced risk of product recalls

 Improved efficiency and productivity

 Increased profitability
Quality Management - It includes all the functions of the organization to design and provide quality
products and services which fulfils the needs of the customers and generate ultimate satisfaction.

Juran Trilogy - is a universal way of thinking about quality—it fits all functions, all levels, and all product
and service lines. The Juran Trilogy diagram is often presented as a graph, with time on the horizontal
axis and cost of poor quality on the vertical axis.

The underlying concept is that managing for quality consists of three universal processes:

• Quality Planning (Quality by Design)

• Quality Control (Process Control & Regulatory)

• Quality Improvement (Lean Six Sigma)

TOTAL QUALITY MANAGEMENT

- ensures that every single employee is working towards the improvement of work culture, processes,
services, systems and so on to ensure long term success.

TQM four categories:

PDCA CYCLE

- Plan – create charter, scope effort, form team

- Do – discover, design, test, implement, create sustainability plan, train staff
- Check – monitor process performance, conduct regular process audits
- Act – adjust process as needed, continuously improve.

Planning Phase - is the most crucial phase of total quality management. In this phase employees have to
come up with their problems and queries which need to be addressed.

Doing Phase - employees develop a solution for the problems defined in planning phase. Strategies are
devised and implemented to overcome the challenges faced by employees. The effectiveness of
solutions and strategies is also measured in this stage.

Checking Phase - is the stage where people actually do a comparison analysis of before and after data to
confirm the effectiveness of the processes and measure the results.

Acting Phase - In this phase employees document their results and prepare themselves to address other
problems.

TQM Principles

Total Quality Management (TQM)

- is a management approach that emphasizes continuous improvement through the involvement of all
employees, focusing on meeting customer needs and expectations.

- is a comprehensive approach to quality management that involves all aspects of an organization, from
top to bottom, and from suppliers to customers.
Total Quality Management Focus

1. Identify customers and satisfy their needs.

2. Find and eliminate problems that interfere with quality.

3. Eliminate waste.

4. Encourage pride and teamwork.

5. Create an environment that is conducive to creativity.

TQM Philosophies

W. Edwards Deming – 14-point program for managing productivity and quality.

- American pioneer who was popularized in Japan in 1950.

- Message to top management was that poor products were they fault.

- Deming Prize is Japan’s award for excellence in quality.

Philip B. Crosby – 14-point program for quality management.

- added four quality absolutes: definition, prevention system, performance standard, and
measurement.

Joseph M. Juran – Juran Trilogy incorporates planning, control, and quality improvement.

- defined quality as “fitness to use”

- emphasized the reliability of a product or service.

Kaoru Ishikawa – collection on analytical tools.

- developed cause and effect diagram.

Ludwig Von Bertalanffy – System Theory (1934)

- applied in organizational development interventions.

- essential to the quality movement and leads to process improvement.

- based on understanding the relationship between three key components.

Elihayu Goldratt: Theory of Constraints (1991)

Assumes the goal of a system has been articulated and its measurement defined:

Step 1: Identify the system’s constraints.

- Constraints prevent the business from obtaining more of the goal.

Step 2: Decide how to exploit the system’s constraints.

- How to get most out of the constraint.

Step 3: Subordinate or exploit everything else to above decision.

- Align the whole system or business to support the decision made above.

Step 4: Elevate the system constraints.

- Make the other major changes needed to break the constraint.

Step 5: Warning!! If a constraint has been broken in the previous steps, go back to step 1.

- Do not allow inertia to cause a system constraint.

8 Elements of TQM

1. Ethics
2. Integrity
3. Trust
4. Training
5. Teamwork
6. Leadership
7. Recognition
8. Communication

Customer-Focused - this involves identifying customer requirements, designing products and services to
meet those requirements, and delivering them in a timely and reliable manner.

Employee Involvement - this means providing employees with the training and resources they need to
identify and solve problems and empowering them to make decisions that will improve quality.

Process Approach - this involves identifying and mapping key processes, measuring process
performance, and continuously improving processes to eliminate defects and reduce waste.

Integrated System - this means that quality must be considered at all stages of the product or service
lifecycle, from design and development to production and delivery.

Strategic and Systematic Approach - this involves setting clear quality goals, developing a plan to
achieve those goals, and tracking progress towards those goals.

Continual Improvement - this involves using data and feedback to identify areas for improvement,
implementing changes to address those areas, and then measuring the impact of those changes.

Fact-based Decision Making - this involves collecting and analyzing data, using statistical methods to
identify trends and patterns, and using the data to inform decision-making.

Communications - this involves sharing information about quality issues, recognizing and rewarding
employees for their contributions to quality, and involving customers in the quality improvement
process.

**TQM can be summarized as a management system for a customer-focused organization that

involves all employees in continual improvement. It uses strategy, data, and effective communications
to integrate the quality discipline into the culture and activities of the organization.
Significance of TQM Principles

TQM principles are significant because they provide a framework for organizations to achieve continuous
improvement and organizational excellence. By implementing TQM principles, organizations can achieve
the following benefits:

1. Improved customer satisfaction

2. Increased productivity

3. Reduced costs

4. Enhanced employee morale

5. Improved market position

TQM Methodologies

Six Sigma

 A statistical quality control methodology that aims to reduce defects to a very low level (3.4
defects per million opportunities).
 Six Sigma uses a DMAIC (Define, Measure, Analyze, Improve, Control) approach to process
improvement.

Lean Manufacturing

 A systematic method for eliminating waste and optimizing processes.

 Lean emphasizes the importance of value, flow, pull, and continuous improvement.

 Key tools of Lean include value stream mapping, 5S, and Kanban.

Deming Cycle

• A four-step cycle for continuous improvement: Plan, Do, Check, Act (PDCA).

• The Deming Cycle is used to identify and address problems, implement solutions, and
monitor the results.

PDCA Cycle

• A simplified version of the Deming Cycle: Plan, Do, Check, Adjust (PDCA).

• PDCA is often used in smaller-scale improvement projects.

TQM Tools and Techniques

Statistical Process Control (SPC) – a set of tools and techniques used to monitor and control processes.

SPC charts are used to visualize process variation and identify potential problems.
Cause-and-Effect Analysis - a technique used to identify the root causes of problems. Cause-and-effect
diagrams, also known as fishbone diagrams, are used to visualize the relationships between potential
causes.

ROOT Cause Analysis - a systematic approach to identifying the underlying reasons for problems. Root
cause analysis involves digging deeper than immediate symptoms to uncover the true root causes.

Benchmarking - A process of comparing an organization's performance to that of other organizations or

industry standards. Benchmarking can help identify areas for improvement.

- The Process of Benchmarking:

What to benchmark
Understand current performance.
Plan
Study others
Learn from data
Use findings

Failure Mode and Effects Analysis (FMEA) - a technique used to identify and prioritize potential failure
modes in a process. FMEA helps organizations take preventive measures to reduce the risk of failures.

TQM in Various Industries

TQM in Manufacturing
TQM is widely used in manufacturing to improve product quality and reduce costs. Manufacturing
companies use TQM tools and techniques to identify and eliminate waste, streamline processes, and
reduce defects.

TQM in Services
TQM is also becoming increasingly popular in the service industry. Service companies use TQM to
improve customer satisfaction, reduce errors, and increase productivity.

TQM in Healthcare
TQM is being used in healthcare to improve patient safety, quality of care, and efficiency. Healthcare
organizations use TQM tools and techniques to identify and address potential risks, improve
communication, and reduce waste.

TQM in Education

TQM is being used in education to improve student learning outcomes, teacher effectiveness, and school
operations. Educational institutions use TQM tools and techniques to identify and address gaps in
student achievement, improve instructional practices, and overall education system.
Total Quality Management

Pros
- Delivers stronger, higher quality products to customers.
- Results in company-wide costs.
- Minimizes waste throughout the entire production and sale process.
- Enables a company to become more adaptable.
Cons
- May require substantial financial investment to convert to TQM practices.
- Often requires conversion to TQM practices over a long period of time.
- May be met with resistance to change.
- Requires company-wide buy-in to be successful.