Almira T.

Abe BSBA-Management

June 22, 2012

1. TQM Definition: Total Whole, entire, complete Quality Excellence, class, meeting expectation Management organizing, administering, art of getting things done TQM is defined as both philosophy and a set of guiding principles that represent the foundation of continuously improving organization. It is the application of quantitative methods and human resources to improve all the process within the organization and exceed customer needs now and in the future. Total Quality Management is an effective system for integrating the quality development, quality maintenance and quality improvement efforts of various groups in an organization continuously, so as to enable marketing, engineering, production and service at the most economic levels which allow for full customer satisfaction. TQM is a philosophy advocating four basic principles (i) Intense focus on customer satisfaction, (ii) accurate measurement of activities, (iii) continuous improvement of products and processes, and (iv) empowerment of people. (Noori & Radford, 1995) TQM is a management philosophy that builds a customer driven, learning organization dedicated to total customer satisfaction through continuous improvement in the effectiveness and efficiency of the organization and its processes. (Corrigan, 1995) TQM is a system of management that gauges a companys dedication to consistent improvement and a sincere effort to serve its customers with what they expect all the time. It is a philosophy of management to achieve greater productivity and a total awareness of quality as an increasingly important element in competitiveness (Gould, 1992).

2. Historical Review of TQM

Industrialisation led to mass production in which it led to the concept of one product at a time to the assembly line of production. Though workmanship was affected but mass production led to more job and reduction in cost of the product and increase in quality, reduction of defects etc.

1924 After WWI, W.A. Sherwat of Bell Telephone statistical chart for the control of various. Concept of sample tests were followed. It was a failure in the initial stages. 1946 ASQC American Society for Quality Control, now ASQ. Frequent meetings, conferences and publications were made to public. 1950 W.Edwards Demings his guidance and lecture to Japan engineers transformed quality concepts in the organisation. His cycle ACT-PLAN-DO-CHECK 1954 Joseph M.Juran Concept of efficient and productive. Juran Trilogy Quality planning Quality Control Quality Improvement 1960 Quality control circles was formed. Zero defects concepts 1970 Reactive approach to proactive approach. Shift from Japan to USA 1980 SPC Statistical Process Control. Concepts of parameter and tolerance. Experiments 1990 Concepts of certification of ISO, CMM etc 2000 six sigma concept - Six Sigma stands for Six Standard Deviations (Sigma is the Greek letter used to represent standard deviation in statistics) from mean. Six Sigma methodology provides the techniques and tools to improve the capability and reduce the defects in any process

3. Gurus and contribution in TQM Walter A. Shewhart Walter A. Shewhart was a statistician at Bell Labs during the 1920s and 1930s. Shewhart studied randomness and recognized that variability existed in all manufacturing processes. He developed quality control charts that are used to identify whether the variability in the process is random or due to an assignable cause, such as poor workers or miscalibrated machinery. He stressed that eliminating variability improves quality. His work created the foundation for todays statistical process control, and he is often referred to as the grandfather of quality control.

W. Edwards Deming W. Edwards Deming is often referred to as the father of quality control. He was a statistics professor at New York University in the 1940s. After World War II he assisted many Japanese companies in improving quality. The Japanese regarded him so highly that in 1951 they established the Deming Prize, an annual award given to rms that demonstrate outstanding quality. It was almost 30 yearslater that American businesses began adopting Demings philosophy. A number of elements of Demings philosophy depart from traditional notions of quality. The rst is the role management should play in a companys quality improvement effort. Historically, poor quality was blamed on workers on their lack of productivity, laziness,

or carelessness. However, Deming pointed out that only 15 percent of quality problems are actually due to worker error. The remaining 85 percent are caused by processes and systems, including poor management. Deming said that it is up to management to correct system problems and create an environment that promotes quality and enables workers to achieve their full potential. He believed that managers should drive out any fear employees have of identifying quality problems, and that numerical quotas should be eliminated. Proper methods should be taught, and detecting and eliminating poor quality should be everyones responsibility. Deming outlined his philosophy on quality in his famous 14 Points. These points are principles that help guide companies in achieving quality improvement. The principles are founded on the idea that upper management must develop a commitment to quality and provide a system to support this commitment that involves all employees and suppliers. Deming stressed that quality improvements cannot happen without organizational change that comes from upper management. Joseph M. Juran After W. Edwards Deming, Dr. Joseph Juran is considered to have had the greatest impact on quality management. Juran originally worked in the quality program at Western Electric. He became better known in 1951, after the publication of his book Quality Control Handbook. In 1954 he went to Japan to work with manufacturers and teach classes on quality. Though his philosophy is similar to Demings, there are some differences. Whereas Deming stressed the need for an organizational transformation, Juran believes that implementing quality initiatives should not require such a dramatic change and that quality management should be embedded in the organization. One of Jurans signicant contributions is his focus on the denition of quality and the cost of quality. Juran is credited with dening quality as tness for use rather than simply conformance to specications. As we have learned in this chapter, dening quality as tness for use takes into account customer intentions for use of the product, instead of only focusing on technical specications. Juran is also credited with developing the concept of cost of quality, which allows us to measure quality in dollar terms rather than on the basis of subjective evaluations. Juran is well known for originating the idea of the quality trilogy: quality planning, quality control, and quality improvement. The rst part of the trilogy, quality planning, is necessary so that companies identify their customers, product requirements, and overriding business goals. Processes should be set up to ensure that the quality standards can be met. The second part of the trilogy, quality control, stresses the regular use of statistical control methods to ensure that quality standards are met and to identify variations from the standards. The third

part of the quality trilogy is quality improvement. According to Juran, quality improvements should be continuous as well as breakthrough. Together with Deming, Juran stressed that to implement continuous improvement workers need to have training in proper methods on a regular basis. Armand V. Feigenbaum Another quality leader is Armand V. Feigenbaum, who introduced the concept of total quality control. In his 1961 book Total Quality Control, he outlined his quality principles in 40 steps. Feigenbaum took a total system approach to quality. He promoted the idea of a work environment where quality devel- opments are integrated throughout the entire organization, where management and employees have a total commitment to improve quality, and people learn from each others successes. This philosophy was adapted by the Japanese and termed company-wide quality control. Phillip B. Crosby Philip B. Crosby is another recognized guru in the area of TQM. He worked in the area of quality for many years, rst at Martin Marietta and then, in the 1970s, as the vice president for quality at ITT. He developed the phrase Do it right the rst time and the notion of zero defects, arguing that no amount of defects should be considered acceptable. He scorned the idea that a small number of defects is a normal part of the operating process because systems and workers are imperfect. Instead, he stressed the idea of prevention. To promote his concepts, Crosby wrote a book titled Quality Is Free, which was published in 1979. He became famous for coining the phrase quality is free and for pointing out the many costs of quality, which include not only the costs of wasted labor, equipment time, scrap, rework, and lost sales, but also organizational costs that are hard to quantify. Crosby stressed that efforts to improve quality more than pay for themselves because these costs are prevented. Therefore, quality is free. Like Deming and Juran, Crosby stressed the role of management in the quality improvement effort and the use of statistical control tools in measuring and monitoring quality. Kaoru Ishikawa Kaoru Ishikawa is best known for the development of quality tools called cause-andeffect diagrams, also called shbone or Ishikawa diagrams. These diagrams are used for quality problem solving, and we will look at them in detail later in the chapter. He was the rst quality guru to emphasize the importance of the internal customer, the next person in the production process. He was also one of the rst to stress the importance of total company quality control, rather than just focusing on products and services. Dr. Ishikawa believed that everyone in the company needed to be united with a shared vision and a common goal. He

stressed that quality initiatives should be pursued at every level of the organization and that all employees should be involved. Dr. Ishikawa was a proponent of implementation of quality circles, which are small teams of employees that volunteer to solve quality problems. Genichi Taguchi Dr. Genichi Taguchi is a Japanese quality expert known for his work in the area of product design. He estimates that as much as 80 percent of all defective items are caused by poor product design. Taguchi stresses that companies should focus their quality efforts on the design stage, as it is much cheaper and easier to make changes during the product design stage than later during the production process. Taguchi is known for applying a concept called design of experiment to product design. This method is an engineering approach that is based on developing robust design, a design that results in products that can perform over a wide range of conditions. Taguchis philosophy is based on the idea that it is easier to design a product that can perform over a wide range of environmental conditions than it is to control the environmental conditions. Taguchi has also had a large impact on todays view of the costs of quality. He pointed out that the traditional view of costs of conformance to specications is incorrect, and proposed a different way to look at these costs. Lets briey look at Dr. Taguchis view of quality costs. Recall that conformance to specication species a target value for the product with specied tolerances, say 5.00 0.20. According to the traditional view of conformance to specications, losses in terms of cost occur if the product dimensions fall outside of the specied limits. This is shown in Figure 5-4. However, Dr. Taguchi noted that from the customers view there is little difference whether a product falls just outside or just inside the control limits. He pointed out that there is a much greater difference in the quality of the product between making the target and being near the control limit. He also stated that the smaller the variation around the target, the better the quality. Based on this he proposed the following: as conformance values move away from the target, loss increases as a quadratic function. This is called the Taguchi loss function and is shown in Figure 5-5. According to the function, smaller differences from the target result in smaller costs: the larger the differences, the larger the cost. The Taguchi loss function has had a signicant impact in changing the view of quality cost. What characterizes TQM is the focus on identifying root causes of quality problems and correcting them at the source, as opposed to inspecting the product after it has been made. Not only does TQM encompass the entire organization, but it stresses that quality is customer driven. TQM attempts to embed quality in every aspect of the organization. It is concerned with technical aspects of quality as well as the involvement of people in quality, such as customers, company employees, and suppliers

4. Cost of quality
The definition of COQ varies but, in general, is considered to be the costs (tangible &intangible) relating to be the quality characteristics of a product or service. The Traditional Cost-of-Quality Model The model states that cost can be divided into two broad categories: 1. Conformance Costs a. Prevention costs b. Appraisal costs 2. Non-Conformance Costs a. Internal failure costs b. External failure costs

Conformance Costs A. Prevention costs:

Costs associated with all activities designed to prevent defects in product or service. These include : The direct and indirect costs related to quality training and education, pilot studies, quality circles, quality engineering, etc. These costs are used to build awareness of the quality program and to keep the costs of appraisal and failure to a minimum. Prevention costs are all costs incurred in an effort to make it right the first time.

Types of Prevention Costs

1. Quality planning and engineering: creation of the overall quality plan, the inspection plan, the reliability plan, the data system, all activities of the quality assurance function, the preparation of manuals and procedures used to communicate the quality plan, costs auditing the system. 2. New products review: evaluation of new designs, preparation of tests & experimental programs to evaluate the performance of new products. 3. Product & process design: costs incurred during the design of the product or the selection of the production processes that are intended to improve the overall quality of the product. 4. Process control: the cost of process control techniques, such as control charts, that monitor the manufacturing process in an effort to reduce variation and build quality into the product. 5. Burn-in: the cost of pre-shipment operation of the product to prevent early failures in the field. 6. Training: the cost of developing, preparing, implementing, operating, and maintaining formal training programs for quality.

7. Quality data acquisition and analysis: the cost of running the quality data system to acquire data on product and process performance. Includes cost of analyzing these data to identify quality problems.

B. Appraisal costs
The costs associated with measuring and evaluating the product or service quality to ensure conformance. These include the cost of inspection, test or audit of purchases, manufacturing or process operations and finished goods or services. The direct and indirect costs of the various tests & inspections to determine the degree of conformity are included in this category.

Types of Appraisal Costs 1. Inspection & test of incoming material: Costs associated with the inspection and testing of all vendor-supplied material. Receiving inspection & test The same at the vendors facility Periodic audit of the vendors quality assurance system.

2. Product inspection & test: the cost of checking the conformance of the product throughout its various stages of manufacturing. Final acceptance testing Packing and shipping checks Salaries of inspectors and supervisors. Types of Appraisal Costs cont.

3. Materials & Services consumed: The cost of operating a system that keeps the measuring instruments and equipment in calibration. 4. Maintaining accuracy of test equipment: the cost of operating a system that keeps the measuring instruments and equipment in calibration.

Non-Conformance Costs
These are associated with products or services that do not conform the customer's requirement. They are often referred to as failure costs and consist of two types. A. Internal failure costs: costs incurred prior to the shipment of the product or the delivery of the service. These costs are associated with defects that are found prior to customer delivery. These include the net cost of scrap, re-inspection and retest, downtime due to quality problems, opportunity cost of product classified as seconds, or other product downgrades. These costs would disappear if there were no defects in the product.

Types of Internal Failure Costs 1. Scrap costs: the net loss of labor, material and overhead (fixed costs) resulting from defective product that can not economically be repaired or used. 2. Rework: the cost of correcting nonconforming units so that they meet specifications. Rework costs usually include additional operations or steps in the manufacturing process, thus includes extra direct labor, machine time and supplies costs. 3. Retest Cost: the cost of reinspection and retesting of products that have undergone rework or other modification. 4. Downtime costs: the cost of idle production facilities that result from nonconformance to requirements. 5. Downgrading cost: the price differential between the normal selling price and any selling price that might be obtained for a product that does not meet the customers requirements. Downgrading is common in the textile, apparel goods, electronics, and carpet industries. B. External Failure Costs The costs of discovered defects occurring after product shipment or service delivery. These costs include warranty charges, customer complaint adjustments, returned merchandise, product recalls, allowances, and product liability. They also include the direct and indirect costs such as labor and travel associated with the investigation of customer complaints, warranty field inspection, tests and repairs. These costs would disappear if every unit of product conformed to requirements and specifications.

Types of External Failure Costs 1. Complaint adjustment: all cost of investigation and adjustment of justified complaints attribute to the nonconforming product. 2. Returned product & material: all costs associated with receipt, handling, and replacement of the nonconforming product or material returned from the field. Also recalls of defective product. 3. Warranty charges: all costs involved in service to customers under warranty contracts. Includes repair and replacement of product or parts. 4. Liability costs: costs or awards incurred as a result of product liability litigation. 5. Indirect costs: in addition to direct operating costs of external failures, there are some indirect costs. Customer dissatisfaction with the level of quality Loss of good-will; loss of business reputation; loss of future business; loss of market share.

5. Types of leadership Leadership is the ability to influence individual or groups toward the achievement of the goal 12 Characteristics of Quality Leaders - Give priority attention to customer - Empower rater than to control subordinates - Emphasize improvements rather than maintenance - Emphasize prevention - Encourage collaboration rather than competition - Train & coach rather than direct and supervise - Learn from problems - Try ro improve communication - Continuously demonstrate commitment to quality - Choose suppliers base on Quality not price - Establish organizational system to achieve quality - Encourage and recognize teams effort 6. TQM implementation o Quality planning o Management commitment o Training o Quality chains and teams o Quality control o Quality audit

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Quality circles Effective communications Statistical monitoring