Principles of Total Quality

1. Customer and Stakeholder Focus

● Quality is defined by the customer's satisfaction and expectations.
● Companies should understand both external (buyers) and internal (employees)
customers.
● Total Quality (TQ) organizations value long-term relationships with stakeholders,
including employees, society, and the environment.

2. Participation and Teamwork

● Employees at all levels contribute to quality, leveraging their knowledge and skills.
● Effective teamwork enhances quality through shared responsibility and
cross-functional collaboration.
● Empowered employees make decisions to meet customer needs, fostering trust and
reducing hierarchical barriers.

3. Process Focus and Continuous Improvement

● Quality is integrated into all processes, not just end-product inspections.
● Continuous improvement involves both incremental (small changes) and
breakthrough (significant changes) improvements.
● Tools like the Deming Cycle (Plan-Do-Check-Act) help identify, execute, and evaluate
improvements.

Competitive Advantage Through Quality

● High-quality products improve market share, customer loyalty, and profitability.
● Quality-focused organizations often charge premium prices and reduce costs by
minimizing rework, errors, and waste.

Quality and Business Results

● Studies show that companies with effective Total Quality Management (TQM) see
increased productivity, customer satisfaction, and financial gains.
● Research indicates that quality improvements correlate with higher operating income
and overall performance growth.

Understanding Principles of Total Quality Management (TQM)

Total Quality Management (TQM) Overview

Definition: TQM is a management philosophy that emphasizes continuous improvement and
customer satisfaction across all organizational levels.
Goal: Achieve excellence by involving all employees and meeting customer needs at optimal
costs.

Key Principles of TQM

1. Customer Focus: TQM prioritizes satisfying and exceeding customer expectations.
2. Leadership: Effective leaders set a vision for quality and inspire commitment.
3. Involvement of People: Every employee contributes to achieving quality.
4. Process Approach: Emphasizes consistency and efficiency in all processes.
5. System Approach to Management: Treats the organization as interconnected, with a
common goal.
6. Continual Improvement: Constantly enhance all processes, products, and services.
7. Factual Decision-Making: Use data to drive decisions.
8. Supplier Relationships: Build long-term, mutually beneficial relationships with suppliers.

Evolution of TQM
1. Quality Inspection: Early focus on inspecting products for quality standards.
2. Quality Control: Use of statistical methods for consistency.
3. Quality Assurance: Shift towards preventing poor quality.
4. TQM: Incorporating quality principles across the organization.

Cost of Quality
● Visible Costs: Waste, rejects, rework, and recalls.
● Hidden Costs: Overtime, billing errors, and excessive turnover due to poor quality.

Pioneers of TQM
1. Edward Deming: Known for his cycle (Plan-Do-Check-Act) and 14 Points for
Management.
2. Joseph Juran: Introduced the Juran Trilogy (quality planning, control, and improvement).
3. Philip Crosby: Advocated "Zero Defects" and emphasized quality is free.
4. Kaoru Ishikawa: Developed the Ishikawa (Fishbone) Diagram for identifying root causes.

The Future of TQM

● Evolving customer expectations, global competition, and new management
approaches will continue to shape TQM.

Understanding Customer Satisfaction, Retention, and Loyalty

1. Defining the Customer

● Organizations have both external customers (buyers) and internal customers
(employees).
● Customer satisfaction is achieved by consistently delivering quality products and
services.

2. Customer-Defined Quality
● Quality is determined by customer expectations. Meeting and exceeding these
expectations builds reliability and loyalty.
● Key Components: Understanding customer needs, maintaining a customer focus,
and fostering satisfaction through consistent improvement.

3. Steps for Identifying Customer Needs

● Speculate on Results: Anticipate customer needs.
● Develop an Information Gathering Plan: Conduct small-scale studies to refine
methods.
● Gather Information: Collect customer feedback, analyze trends, and pinpoint areas
for improvement.
 ● Validate Conclusions: Share insights with customers and adjust based on their
feedback.
● - Take Action and Communicate: Implement changes and keep customers
informed.

4. Customer Satisfaction Process

● Determine customer attributes, track satisfaction levels, and continuously improve
processes across the organization.
● Satisfaction must be renewed with each interaction, focusing on constant
improvement rather than one-time fulfillment.

5. Retention and Loyalty

● Retaining customers requires exceeding expectations and creating value in every
interaction.
● Customer Loyalty Model: Consists of four components:
● Business Performance: Quality and reliability of products, service, and relationship.
● Global Perceptions: Customer opinions on overall satisfaction and value received.
● Loyalty Behaviors: Monitoring repeat purchases and business volume.
● Financial Outcomes: Increased market share, reduced costs, higher profits, and
shareholder value.

6. Keys to Customer Loyalty

● Establishing a customer focus, continual process improvement, and building lasting
bonds beyond transactions.

Lean Six Sigma

1. Objectives:
● Understand and explain Six Sigma, its history, and its value in improving business
performance.
● Learn Six Sigma’s application across various industries, such as manufacturing and
healthcare.

2. History:
● Introduced in 1986 by Bill Smith at Motorola, Six Sigma aimed to enhance quality
management.
● Motorola’s successful implementation earned it the Malcolm Baldridge National
Quality Award.
● Later, companies like General Electric adopted it to improve quality and reduce costs.

3. Key Components:
● Statistical Benchmark: Six Sigma targets 99.99966% defect-free processes, based
on Gauss’s Normal Distribution curve.
● Philosophy and Strategy: It advocates measurable improvements in all business
processes to meet customer needs and enhance profitability.

4. Sigma Belts:
● White Belt: Basic participation in quality projects.
 ● Yellow Belt: Fundamental understanding; some training.
● Green Belt: Full course with training in the DMAIC framework.
● Black Belt: Advanced training with a focus on leadership and statistics.
● Master Black Belt: Mentorship role with project oversight.
● Champion: High-level managerial role guiding Lean Six Sigma initiatives.

5. Career Path in Six Sigma:

● Different belt levels correspond to roles, responsibilities, and training hours.
● Emphasis on progressive learning and salary increments as belts advance.

Traditional Management to Total Quality Management (TQM)

1. Transition from Traditional Management to TQM:

● Traditional management focuses on task delegation without a cohesive quality
assurance system.
● TQM emphasizes organization-wide commitment to quality, requiring agreement and
teamwork across all departments.

2. Key Features of TQM:

● Teamwork: Cross-functional teams are crucial in TQM for collaboration and
decision-making.
● Quality Assurance: Quality is embedded in processes rather than relying on
post-production checks.
● Data-Driven Decisions: Unlike traditional management, TQM uses facts and figures
to guide decision-making.

3. Cyclic Thinking and Kaizen:

● TQM focuses on continuous improvement, or Kaizen, ensuring small, stable, and
ongoing enhancements.
● This approach includes team-building exercises, brainstorming sessions, and group
decision-making to foster improvement.

4. Establishing a Quality Culture:

● Creating a TQM-based quality culture is akin to constructing a solid foundation for a
building.
● Key elements include understanding organizational history, improving systems
without disruption, and involving all employees in change.

5. Addressing Resistance to Change:

● Cultural change often meets resistance within organizations, making it essential for
leadership to understand change management principles.
● Executives aiming for cultural change should be aware of organizational dynamics
and work to address concerns openly.