Total Quality Management (Report)

Total Quality Management

Study Report
By: Rana Asad Mustafa Saad Bin Khalid Hassaan Ahmad S. M. Abbas Mehdi 2009-NUST-BE-EL-88 2009-NUST-BE-EL-91 2009-NUST-BE-EL-37 2009-NUST-BE-EL-97
BEE-1C SEECS National University of Science and Technology (NUST)
Table of Contents
Preface .......................................................................................................................................................... v Acknowledgements...................................................................................................................................... vi 1. Introduction of Total Quality Management .......................................................................................... 1 1.1. 1.2. 1.3. 1.4. 1.5. 1.6. 2. Introduction .................................................................................................................................. 1 Quality ........................................................................................................................................... 2 Quality Dimensions ....................................................................................................................... 2 Quality Levels ................................................................................................................................ 3 Total Quality Management ........................................................................................................... 4 Importance of Total Quality Management ................................................................................... 4
History of Total Quality Management .................................................................................................. 6 2.1. 2.2. Introduction .................................................................................................................................. 6 Work of Deming, Juran and Others .............................................................................................. 7 Edward Deming ..................................................................................................................... 7 Joseph Juran .......................................................................................................................... 9 Kaoru Ishikawa .................................................................................................................... 10 Philip Crosby........................................................................................................................ 10 Baldrige ............................................................................................................................... 10 Shewhart ............................................................................................................................. 11
2.2.1. 2.2.2. 2.2.3. 2.2.4. 2.2.5. 2.2.6. 3.
Process understanding and improvement .......................................................................................... 12 3.1. The key roles of process management ............................................................................................ 12 3.2. 3.3. The elements of a process .......................................................................................................... 12 Six steps for process improvement ............................................................................................. 13
4.
Methods for total Quality Management............................................................................................. 16 4.1. Six Sigma Method ....................................................................................................................... 16 Introduction ........................................................................................................................ 16 History ................................................................................................................................. 16 Implementation Methods ................................................................................................... 16 Implementation Roles ......................................................................................................... 17 Significance of the term Six Sigma ................................................................................... 18 Applications......................................................................................................................... 19
4.1.1. 4.1.2. 4.1.3. 4.1.4. 4.1.5. 4.1.6. 5.
Tools and Techniques involved in six sigma and others ..................................................................... 20
5.1. 5.2. 5.3. 5.4. 5.5. 5.6. 5.7. 5.8. 5.9. 5.10. 5.11. 6.
Fish Bone Diagram (Ishikawa Diagram): ..................................................................................... 20 5 Whys......................................................................................................................................... 23 Analysis of Variance .................................................................................................................... 23 Check Sheet................................................................................................................................. 24 Control charts.............................................................................................................................. 25 Failure modes and effects analysis (FMEA) ................................................................................ 26 Histogram .................................................................................................................................... 27 Process Capability ....................................................................................................................... 28 Quantitative Marketing Research: .............................................................................................. 29 Scatter Diagrams ..................................................................................................................... 29 Root Cause Analysis (RCA) ...................................................................................................... 30
Impacts of Total Quality Management ............................................................................................... 31 6.1. 6.2. 6.3. 6.4. 6.5. 6.6. TQM and Profitability.................................................................................................................. 31 TQM and Sales ............................................................................................................................ 31 TQM and Cost ............................................................................................................................. 32 TQM and Profit Margin ............................................................................................................... 34 TQM and Continuous Improvement ........................................................................................... 34 TQM and Employee Empowerment ........................................................................................... 34
7.
Case Study of the visit conducted at Pak Electron Limited (PEL)........................................................ 35 7.1. 7.2. 7.3. Executive Summary ..................................................................................................................... 35 Introduction of PEL ..................................................................................................................... 35 Total Quality Management at PEL .............................................................................................. 35 Process of Quality Management ......................................................................................... 35
7.3.1.
Conclusion ................................................................................................................................................... 39 Bibliography ................................................................................................................................................ 40
Preface
This booklet is the outcome of the study conducted regarding Total Quality Management under the course of Engineering Project Management. The concepts and techniques that form the core of this topic are of fundamental importance in all Engineering as well as Management disciplines. Infact, the scope of potential and actual application of Total Quality Management continues to expand as Engineers are confronted with new challenges involving different managerial processes regarding quality issues. The concept of TQM is widely used in industry. Different companies and people monopolize the global market which in result affects the global selling and buying market. So it becomes a huge challenge for the companies to keep their product in market and the solution for this is provided by TQM which helps organizations in their survival and growth. For these reasons we feel that this topic is not only an essential element under the banner of Engineering Project Management but also one of the most rewarding, exciting and useful tool to overcome the quality crisis faced by the project managers, project engineers. We have covered the Importance and History of Total Quality Management. The tools and methods which are mostly used to implement TQM are discussed. The impacts of Total Quality Management on the business and organizational hierarchy are explained. Lastly we have also added the report of our case study conducted at (Pak Electron Limited PEL) regarding different aspects of Total Quality Management. This report provides the basic ideas regarding the Total Quality Management that establishes a firm background for anyone who wants to study this topic in detail.
Rana Asad Mustafa Saad Bin Khalid Hassaan Ahmad Syed Muhammad Abbas Mehdi BEE-1C, SEECS National University of Science and Technology
Acknowledgements
In producing this report we were fortunate to receive assistance from many teachers, fellow students and friends who were extremely generous with their time. We express our deep appreciation to: Mr. Aslam Bazmi (HOD Humanities) for sharing his knowledge regarding the topic. Mr. Muhammad Yousaf (Course Instructor) for guiding us thoroughly through the whole process from conducting the study to the completion of report. Mr. Azeem Talib (Manager Marketing Department in Power Projects), Mr. Ali Usman (Engineer in Power Projects at PEL) and Mr. Salahuddin (Quality Control Department in switchgear) for their precious time and coordination to explain the quality management process at PEL.
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1. Introduction of Total Quality Management

1.1. Introduction
Total quality management is composed of three words that are: Total Quality Management Before seeing what TQM is all together, we see each of the components individually. The word total here refers to all the perspectives of quality; therefore it is connected to the quality. So we start from management.
Management
Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively. Management comprises planning, organizing, staffing, leading or directing, and controlling an organization (a group of one or more people or entities) or effort for the purpose of accomplishing a goal. Resourcing encompasses the deployment and manipulation of human resources, financial resources, technological resources and natural resources. Hence from the above definition of management we see the in the case of TQM the objective is aimed at improving the quality. Since TQM is primarily associated with quality, so it is most appropriate to look what do we mean by the quality of the product. However before moving to quality, one can easily identify that the quality is closely related to product, customer and standard. Product Every organization strives for a goal, and to achieve that is under goes certain processes. Thus, product is defined as: Product is the output of a process carried out by an organization to meet its goals. Customer Customer is anyone who is imparted the product or process delivered by the organization. Standard Something considered by an authority or by general consent as a basis of comparison. or A rule or principle that is used as a basis for judgment.
Therefore, in the case of quality we can say that standard is the average or minimum level of quality that is accepted by the general community. Now as we have seen that what is meant by the product and customer we are in position to look in detail what is quality.
1.2.
Quality
One can define quality in many ways as it has been defined by many gurus. Standard perspective It is excellence which is better than minimum standard. or Quality is conformance to the standards and fitness for purpose. ISO 9000:2000 perspective Defines it as: It is a degree to which a set of inherent characteristics fulfills the requirements. Customer perspective Quality is defined as the excellence in the product that fulfills or exceeds the requirements of the customers. Mathematical perspective Though quality is an abstract perception, it has quantitative measure i.e.
Q=P/E
where Q: quality P: performance measured by the manufacturer E: expectations (of customers) Hence by quality we do not mean the fine tuning of your product at the final stage of manufacturing, before packing and shipping. Quality is inbuilt in the product at every stage of manufacturing from conceiving, specification and design stages to prototyping and testing and manufacturing. Quality has different dimensions. By dimension we mean the method by which we measure the quality of product.
1.3.
Quality Dimensions
Judgment Based Dimension It refers to the goodness of the product i.e. how good a product is for the customer and what the general opinion of the people is when they hear about it. Example: products attributing to the above mentioned image, Rolex watches, BMW cars.
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Product Based Dimension It refers to the function of a specific, measurable variable and that differences in the quality reflect the differences in quantity of some product attributes. Example: Quality and price perceived relations. User Based Dimension Individuals have different need and thus different quality standards. Example: Hyundai offering Sportage and Spectra in Pakistan which people didnt prefer. Value Based Dimension A quality product is one that is useful as competing products and is sold at lesser price. Example: Incentives offered by the fertilizer companies to the farmers are perceived as the compensation for lower quality. Management Based Dimension It is referred as desired outcome of an engineering or manufacturing process or conformance to standard specification. Example: Coca Cola quality is about manufacturing product that people can depend upon every time they reach for it. As discussed earlier, that quality cannot be infused in the product after its manufacturing rather it is maintained and checked at every stage and every level. So we will see what different quality levels are.
1.4.
Quality Levels
Organizational Level At this level it is checked that which products and services are meeting the requirement and expectations of the customers and which products and services need to be included. Process Level Here it is determined that what products and services are most important to the customer and what are the processes that produce these services and products. Then it is determined that what are the key inputs to the processes that have the most significance effect on the companys performance standards. Individual Job Level Here it is determined by the employer that what is required by the customer and how the requirement can be measured. Finally what are the standards for each measure? Hence after discussing the above parameters of TQM we are now in position to define Total Quality Management.
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1.5.
Definition TQM is an integrated organizational approach in delighting the customers by meeting their expectations on the continuous basis through everyone involved in the organization working on the continuous improvement in all products/processes along with proper problem solving techniques. or A comprehensive, organization wide effort to improve the quality of products and services applicable to whole organization or Total Quality Management is the philosophy and set of guiding principles that represents the foundation of a continuously improving organization product/service according to customers expectations. Objective The objective of the total quality management is to deliver highest standard/quality at lowest cost on continual basis. Before discussing in detail the different principles and approaches of TQM, it is of utmost importance to know why TQM has become so importance for the organizations that they have to maintain a separate department for total quality management.
1.6.
Importance of Total Quality Management
Market Changes Different companies and people monopolize the global market which in result affects the global selling and buying market. So it becomes a huge challenge for the companies to keep their product in market and the solution for this is provided by TQM which helps organizations in their survival and growth. Changing Customer In market for a companys product there a many different customers having different needs and standard threshold points. So in such scenario it is required by the organization to keep quality of its product to such a level that is acceptable by most of the customers. And that is achieved by maintain a TQM department which ensures that once the product is out of company, it stays in the market. Changing Product Mix Nowadays, market has shifted from low volume high price products to high volume low price products that have resulted in the need to reduce the internal cost of poor quality.
Product Complexity These days the product complexity has increased due to the aim of providing a better reliability of the products. This requirement calls for a higher quality of the product because the higher the quality the higher the reliability of the product. Thus organizations need to have TQM to ensure increased quality. Higher Levels of Customer Satisfaction Todays market demands more features, more good performance, more aesthetic beauty etc. from the products. In other word there is no harm in saying that the customer expectations have increased. This thing has in turn increased the level of customer satisfaction. So for a company to achieve higher customer satisfaction levels it is crucial for them to increase the quality of their product which calls for the company to have total quality management.
2. History of Total Quality Management

2.1. Introduction
Along with many other modern management practices TQM originated and was developed within Japanese industry after the Second World War. Japan was a defeated nation with few natural resources and an inability to feed a population of 90 million, by itself. The future lay in successfully exporting consumer products across the world market, yet it had a reputation for shoddy goods and management systems that were described as "feudal" and "despotic". General Douglas McArthur, the then allied commander of Japanese Islands realized the need for radical change and was responsible for the regeneration of the Japanese economy. Key to this was the dismissal of the old management and their systems, replacing them with younger men capable of making the changes needed to develop their economy. As a result the Union of Japanese Scientists and Engineers (JUSE) was formed, one of their first actions was to invite a well-known American statistician Dr. W. Edwards Deming, to present his ideas to them. Deming addressed the top business leaders in Japan, including managers from Companies which are now household names, Sony, Nissan, Mitsubishi and Toyota. After World War II, the U.S. was the only major power with an intact economy. Deming and Juran found their quality improvement theories irrelevant to U.S. business leaders. They were interested in quantity, not quality. Deming found a more appreciative audience in Japan, where he was conducting postwar census work. He was invited to speak about his views during a now-famous dinner in the early 1950's. They introduced new management methods, TQM being a key one. This led to Japan being the world leader in quality and productivity.
Shortly after, Dr. Deming predicted in the early 1950's that the Japanese industry would become a world-class force equal to any other country. Everyone around the world laughed. The Japanese didn't laugh. They worked hard to apply the lessons learned. Henry Ford's book on manufacturing (written decades earlier) became a Japanese best seller. There was a weekly radio program that trained workers, lead hands, supervisors, and managers on statistics and Dr. Deming's methods. It became a national hit in most Japanese homes. Drs. Deming and Juan because celebrities in constant demand as speakers and consultants. Decades later, the Emperor of Japan awarded Dr. Deming with the highest Japanese award for a civilian in recognition for his decades of hard work and leadership he gave to the Japanese people and their government.
2.2.
Work of Deming, Juran and Others
2.2.1. Edward Deming Deming had made a highly significant contribution during the war in increasing America's industrial efficiency. After the war was won, although well received by engineers and scientists, top management did not respond to his ideas. Industry went back to the old established ways of trying to meet consumer market opportunities. In Japan however Deming found a much more receptive audience, his ideas once implemented led during the 80s, to American business being battered by Japan's superior industrial practices. In order to compete and survive, the rest of the world was forced to take his ideas seriously, adopting "Japanese methods" such as TQM and Lean Manufacturing. In 1947 W. Edwards Deming Ph.D., an American statistician was invited to help the Japanese work on their census tracts. Two years later, Dr. Deming, returned to Japan to teach a course on statistical control. His first formal course began in July 1950 with 220 engineers enrolled in the course. The Japanese industrialists were receptive to idea of improving quality because they wanted to have a larger export market. What Deming was teaching, however, went well beyond traditional statistical control courses. It involved a management philosophy. Deming's concepts of process management began with the use of statistical quality control. His real contribution was his ability to cut through academic theory and present ideas in a simple way that was meaningful and practical right down to the shop floor. He interpreted quality in terms of reliability, dependability, predictability and consistency of product and service. He saw quality improvement as being analogous to reduction in process variation. By reducing this with the help of statistical control methods, variation in product quality is also reduced. The fact that processes are now under better control also means lower cost and improved productivity. Deming's approach started with understanding the causes of two types of variation 1. External influences on the process which he described as uncontrolled variation due to "special causes". Examples are changes of operation, procedures, and raw materials. All these interrupt the normal pattern of operation.
2. Controlled variations which are due to chance, random, or "common causes". All of these by definition are due to the process itself, its design or installation. For Deming, quality improvement must begin with identification of the two types of variation. The next stage is to eliminate the "special causes" and only then work on the "common causes". Identification and elimination of these is assisted by the use of Statistical Process Control (SPC) and various forms of simple control charts designed to be used on a shop
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floor environment. Management improves the process by re-designing it to improve its capability to meet customer needs. Deming also stressed the crucial importance of the need for a deep understanding of businesses work processes. Without this, true progress will not be made. Over the years Deming thoughts expanded, to cover issues of managing people, leadership and training in order to achieve quality goals. From this premise, he set out his 14 points for management, which we have paraphrased here: 1. "Create constancy of purpose towards improvement". Replace short-term reaction with long-term planning. 2. "Adopt the new philosophy". The implication is that management should actually adopt his philosophy, rather than merely expect the workforce to do so. 3. "Cease dependence on inspection". If variation is reduced, there is no need to inspect manufactured items for defects, because there won't be any. 4. "Move towards a single supplier for any one item." Multiple suppliers mean variation between feed stocks. 5. "Improve constantly and forever". Constantly strive to reduce variation. 6. "Institute training on the job". If people are inadequately trained, they will not all work the same way, and this will introduce variation. 7. "Institute leadership". Deming makes a distinction between leadership and mere supervision. The latter is quota- and target-based. 8. "Drive out fear". Deming sees management by fear as counterproductive in the long term, because it prevents workers from acting in the organizations best interests. 9. "Break down barriers between departments". Another idea central to TQM is the concept of the 'internal customer', that each department serves not the management, but the other departments that use its outputs. 10. "Eliminate slogans". Another central TQM idea is that it's not people who make most mistakes - it's the process they are working within. Harassing the workforce without improving the processes they use is counter-productive. 11. "Eliminate management by objectives". Deming saw production targets as encouraging the delivery of poor-quality goods. 12. "Remove barriers to pride of workmanship". Many of the other problems outlined reduce worker satisfaction.
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13. "Institute education and self-improvement". 14. "The transformation is everyone's job". Deming taught about problem solving and team work, concepts that were new to statistical quality control. He was even critical of some of the statistical quality control practices of his day. He taught that use of slogans to reduce production defects is counterproductive. He thought that rewarding and punishing workers based on statistical control would be blaming the victim. He thought the focus should be on improving the process not blaming the workers. He was astute enough to know that if an idea is to survive it needs organizational champions. He insisted that statistical control staff move from factory floors to management positions. In essence, Dr. Deming took the idea of statistical control and transformed it into a method of management. In Dr. Deming's hands, a concept that was previously only an engineering tool became an overarching management style. That first group of engineers went back and told their managers. Soon Japanese industrialists became committed to the idea of improving quality through Deming's management methods. Following his ideas, they set up organization wide units, involved all employees in improvement, organized cross functional teams to examine a problem and solve it. Gradually, the Japanese products improved. In time, Japanese products exceeded the quality of American Products. Entire industries were lost to Japan. The success of Total Quality Management in Japan and the loss of market share by the American companies awakened the American industrialists. 2.2.2. Joseph Juran Juran published "The Quality Control Handbook" in 1950 which became the standard reference book on quality world-wide. Juran developed his TQM philosophy around his "quality trilogy": Quality planning: the process for preparing to meet the quality goals Quality control: the process for meeting quality goals through operations Quality improvement: the process for break through levels of performance Both he and Deming correctly stressed the need to involve people throughout the organization in quality improvement but in particular that most quality issues are down to management dealing with systems. The emphasis is on getting the system correct rather than blaming failure on operator error. Juran particularly emphasize the use of quality teams and training them in measurement and problem solving. Juran's vision of quality management extended well outside the walls of the factory to encompass non-manufacturing processes, especially those that might be thought of as service related. For example, in an interview published in 1997 he observed:
The key issues facing managers in sales are no different than those faced by managers in other disciplines. Sales managers say they face problems such as "It takes us too long...we need to reduce the error rate." They want to know, "How do customers perceive us?" These issues are no different than those facing managers trying to improve in other fields. The systematic approaches to improvement are identical. ... There should be no reason our familiar principles of quality and process engineering would not work in the sales process. 2.2.3. Kaoru Ishikawa Ishikawa is regarded as the father of the quality circle approach which was involved building shop floor teams. His legacy is more directly linked to hands on, practical techniques and promoted many of the tools and techniques of measurement, analysis and problem solving commonly used as part of the TQM armory. 2.2.4. Philip Crosby Crosby did much to popularize the use of TQM. He first designed a highly successful program for ITT for whom he worked before setting up his own quality college and consultancy firm. His training program has been widely used by a large number of US and U.K. companies. Again, like other practitioners, his training is targeted at the Management team as whole and not just quality control specialists. Crosby presented his "4 Absolutes of Quality" as the cornerstones of his approach: 1. Quality is defined as conformance to requirements, not just as goodness 2. Quality is achieved through prevention not appraisal 3. The quality performance standard is "zero defects" and is not defined by AQLs which allow and build in acceptable levels of errors and inefficiencies 4. Quality is measured by the price of non-conformance Crosby spread the word that, as in the title of his most popular book, "Quality is Free". He believes that by setting up processes that are designed to prevent errors, by having people trained and motivated to operate them as designed, not only will quality improve, the costs of production will be reduced. 2.2.5. Baldrige Malcolm Baldrige is not generally considered to be one of the quality management 'gurus' (he was the US Secretary of Commerce from 1981 to 1987) but the creation of the award named for him was one of the landmark events in rekindling interest in quality management in North America. The Baldrige award criterion is an important tool that defines the elements of an effective, customer-focused management system based upon quality principles. It is widely used for educational and assessment purposes.
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2.2.6. Shewhart Dr. Walter A. Shewhart is considered the father of Statistical Process Control (SPC). Shewhart worked in Bell Laboratories and was engaged in a search for practical methods of quality control for the emerging telephone industry, which required mass production on a huge scale. His ideas, published in the 1930's, formed the basis for a system/process oriented approach to quality control, by viewing any repetitive activity as a process and using statistics to understand and to manage the variations that will always occur.
PICTOGRAPHIC REPRESENTATION
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3. Process understanding and improvement

Processes are the fundamental building blocks of all organizations, and both process understanding and process improvement form the lifeblood of total quality organizations. Processes transform inputs, which can include actions, methods and operations, into outputs. They are the steps by which we add value, and it should be the aim of customer focused, total quality organizations, for these outputs to satisfy or exceed the needs and expectations of their customers.
3.1. The key roles of process management

Effective process management requires 4 key roles: The Process Sponsor is the person who provides direction and ensures that there is sufficient resource available to improve a process. He or she is normally at a senior level in an organization. The Process Owner usually sits outside the process, and is directly and personally accountable for the end-to-end process. He or she is the final arbiter for the process and should drive any process improvement initiatives and activities. The Process Manager works inside the process and is responsible for discrete parts of it. He or she ensures day-to-day production performance, directly manages process workers and supplier relationships and provides the process owner with metrics, reports and improvement ideas. The Process Worker works inside the process with responsibility for specific delivery to agreed standards. He or she may manage small teams of less experienced workers and provide the process manager with metrics, reports and improvement ideas.
3.2.
The elements of a process
There are many elements to a process and it helps if these can be defined to aid clarity around the process, so that a common understanding may be obtained. The elements are: Process Title: The Process Title should be simple and comprise a verb and a noun, e.g., design new product. Process Purpose: The Process Purpose should always begin with Is to., e.g., is to bring a new product to market based on the latest innovative thinking, within an agreed timescale. Process Scope: The Process Scope defines precisely where the process starts and ends, and what is specifically included and explicitly excluded, e.g., the process starts with writing a project plan and ends
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when the customer accepts the final product; all manufacturing is included, but all packaging design is excluded. Inputs: The Inputs of a process are the things that are transformed by the process in to the end product or service required by the customer of the process. Inputs can be tangible, e.g., written data, or intangible, e.g., verbal requests. Output: The Outputs of a process can be products or services and should conform to the specifications agreed in advance with the recipient, i.e., with the customer, internal or external. Outputs can also be tangible, e.g., product, or intangible, e.g., advice. Process Controls: Process Controls may be imposed either externally or internally, e.g., customer specifications, legislative requirements and copyright laws are all externally imposed, whereas internal quality checks and organizational procedures are derived from within the organization. Process Resources: Process Resources are all the things that a process must routinely have to be able to convert the inputs into outputs. Resources may be tangible, e.g., people, a PC, software, or intangible, e.g., skills and experience.
3.3.
Six steps for process improvement
The opportunity for improvement to either operating or management processes can often be vast, but must be focused. It is imperative that the number of process improvement activities undertaken by an organization is matched by the organizations ability to fund the activity and implement the changes without harmful disruption to day-to-day delivery of its products and services. Initiative overload and fatigue is a common syndrome, and is ultimately counterproductive. To ensure you do not fall into this trap, use the six step methodology for process improvement as detailed on the following pages. The six steps are: Process Selection: The objective of Process Selection is to select a small and achievable number of processes, most directly influencing the achievement of the organizations goals and objectives, upon which to undertake process improvement activity. This can take anywhere from a few hours to weeks, be either proactive, e.g., management initiative, or reactive, e.g., customer complaint, and involve one or several people. The Process Classification Framework, described above, is an aid in this area. The outcomes of the Process Selection step should be an agreed number of
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processes to be reviewed, management approval to dedicate resource to the work and agreed objectives for the work. Process Understanding: Next, comes Process Understanding, covering the scope of the process where it starts and ends, what is included and excluded. In addition, the key sub-processes and accountabilities of the process to the organization must be understood. These can be achieved by completing the elements of a process - title, purpose, scope, inputs, outputs, controls and resources, and using tools such as process mapping, decomposition and flowcharting, covered later in this section. The outcomes of Process Understanding are a high level process map, sub-process maps, a list of key accountabilities and lists of the major inputs, outputs, controls and resources acting upon the processes and sub-processes. Process Performance: Process Performance involves recording and detailing the historical performance of the process, obtaining perceptual views of both current and historical performance from customers and suppliers, defining the agreed required performance of the future improved process, and agreeing how it will be measured, monitored and reviewed. Data must be gathered and analyzed this can be accomplished via several means, including observation, counting, workshops, interviews, focus groups and questionnaires, to name a few. The outcomes of Process Performance are an understanding of the key metric data, the underlying capability of the process and customers, suppliers and staff requirements for the future improved process. Process Review: In Process Review, the data and information that has been collected and analyzed is reviewed and recommendations made for the improved process. Several tools, such as Cause and Effect, Pareto and Force Field Analysis can be used in this step, and are covered in the Tools section. The outcomes of Process Review include the identification of either continuous improvement activity and/or a process re-design project, plus the identification of any tactical quick wins. The business benefits and timescales for realizing these must also be identified, together with process improvement resource allocation, performance metrics and a monitoring and reporting mechanism. Process Change: Process Change translates the prioritized process improvement mandates into an integrated program of continuous improvement or processes re-design activity. Detailed project plans with milestones, objectives, performance measures and targets, benefits, roles and deliverables must be developed, as well as a plan to manage the change and train all necessary personnel in the new process. Once the previous five steps have been implemented it is essential that the improvements that have been achieved are sustained.
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Capturing the change: In the final Capturing the Change step, the process improvements are integrated into the business management system, ensuring the change is reviewed, managed and built upon. Procedures should be written for the improved process, the changes, improvements and benefits communicated to all stakeholders, any training conducted, and the process and procedures regularly audited. The six steps are sometimes referred to as a footprint each print forms a path that if followed, will lead you to the required destination.
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4. Methods for total Quality Management

4.1. Six Sigma Method
Six Sigma is a business management strategy originally developed by Motorola, USA in 1986. As of 2010, it is widely used in many sectors of industry. 4.1.1. Introduction Six Sigma seeks to improve the quality of process outputs by identifying and removing the causes of defects and minimizing variability in manufacturing and business processes. It uses a set of quality management methods, including statistical methods, and creates a special infrastructure of people within the organization ("Black Belts", "Green Belts", etc.) who are experts in these methods. Each Six Sigma project carried out within an organization follows a defined sequence of steps and has quantified financial targets (cost reduction and/or profit increase). Guaranteed Accuracy A six sigma process is one in which 99.99966% of the products manufactured are statistically expected to be free of defects (3.4 defects per million). 4.1.2. History Six Sigma originated as a set of practices designed to improve manufacturing processes and eliminate defects, but its application was subsequently extended to other types of business processes as well. The core of Six Sigma was born at Motorola in the 1970s out of senior executive Art Sundry's criticism of Motorolas bad quality. As a result of this criticism, the company discovered a connection between increases in quality and decreases in costs of production. At that time, the prevailing view was that quality costs extra money. In fact, it reduced total costs by driving down the costs for repair or control. Bill Smith subsequently formulated the particulars of the methodology at Motorola in 1986. Six Sigma was heavily inspired by the quality improvement methodologies of the six preceding decades, such as quality control, Total Quality Management (TQM), and Zero Defects, based on the work of pioneers such as Shewhart, Deming, Juran, Ishikawa, Taguchi and others. 4.1.3. Implementation Methods Six Sigma projects follow two project methodologies. These are DMAIC DMADV DMAIC: DMAIC is used for projects aimed at improving an existing business process. It includes following five steps:

Define the problem, the voice of the customer, and the project goals, specifically. Measure key aspects of the current process and collect relevant data.
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Analyze the data to investigate and verify cause-and-effect relationships. Determine what the relationships are, and attempt to ensure that all factors have been considered. Seek out root cause of the defect under investigation. Improve or optimize the current process based upon data analysis using techniques such as design of experiments, poka yoke or mistake proofing, and standard work to create a new, future state process. Set up pilot runs to establish process capability. Control the future state process to ensure that any deviations from target are corrected before they result in defects. Implement control systems such as statistical process control, production boards, visual workplaces, and continuously monitor the process.
DMADV: DMADV is used for projects aimed at creating new product or process designs. It has the following five steps:
Define design goals that are consistent with customer demands and the enterprise strategy. Measure and identify CTQs (characteristics that are Critical To Quality), product capabilities, production process capability, and risks. Analyze to develop and design alternatives, create a high-level design and evaluate design capability to select the best design. Design details, optimize the design, and plan for design verification. This phase may require simulations. Verify the design, set up pilot runs, implement the production process and hand it over to the process owner(s).
4.1.4. Implementation Roles Six Sigma identifies several key roles for its successful implementation. Executive Leadership Executive Leadership includes the CEO and other members of top management. They are responsible for setting up a vision for Six Sigma implementation. They also empower the other role holders with the freedom and resources to explore new ideas for breakthrough improvements. Champions Champions take responsibility for Six Sigma implementation across the organization in an integrated manner. The Executive Leadership draws them from upper management. Champions also act as mentors to Black Belts. Master Black Belts Master Black Belts, identified by champions, act as in-house coaches on Six Sigma. They devote 100% of their time to Six Sigma. They assist champions and guide Black Belts and Green Belts. Apart from statistical tasks, they spend their time on ensuring consistent application of Six Sigma across various functions and departments.
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Black Belts Black Belts operate under Master Black Belts to apply Six Sigma methodology to specific projects. They devote 100% of their time to Six Sigma. They primarily focus on Six Sigma project execution, whereas Champions and Master Black Belts focus on identifying projects/functions for Six Sigma. Green Belts Green Belts are the employees who take up Six Sigma implementation along with their other job responsibilities, operating under the guidance of Black Belts. 4.1.5. Significance of the term Six Sigma The term "six sigma process" comes from the notion that if one has six standard deviations between the process mean and the nearest specification limit, as shown in the graph, practically no items will fail to meet specifications.
: Standard deviation. USL: Upper Specification Limit LSL: Lower Specification Limit Capability studies measure the number of standard deviations between the process mean and the nearest specification limit in sigma units. As process standard deviation goes up, or the mean of the process moves away from the center of the tolerance, fewer standard deviations will fit between the mean and the nearest specification limit, decreasing the sigma number and increasing the likelihood of items outside specification.
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Role of the 1.5 sigma shift Experience has shown that processes usually do not perform as well in the long term as they do in the short term. As a result, the number of sigmas that will fit between the process mean and the nearest specification limit may well drop over time, compared to an initial short-term study. To account for this real-life increase in process variation over time, an empirically-based 1.5 sigma shift is introduced into the calculation. According to this idea, a process that fits 6 sigma between the process mean and the nearest specification limit in a short-term study will in the long term fit only 4.5 sigma either because the process mean will move over time, or because the long-term standard deviation of the process will be greater than that observed in the short term, or both.
Hence the widely accepted definition of a six sigma process is a process that produces 3.4 defective parts per million opportunities (DPMO). This is based on the fact that a process that is normally distributed will have 3.4 parts per million beyond a point that is 4.5 standard deviations above or below the mean (one-sided capability study). So the 3.4 DPMO of a six sigma process in fact corresponds to 4.5 sigma, namely 6 sigma minus the 1.5-sigma shift introduced to account for long-term variation. This allows for the fact that special causes may result in a deterioration in process performance over time, and is designed to prevent underestimation of the defect levels likely to be encountered in real-life operation. 4.1.6. Applications Six Sigma mostly finds application in large organizations. An important factor in the spread of Six Sigma was GE's 1998 announcement of $350 million in savings thanks to Six Sigma, a figure that later grew to more than $1 billion. According to industry consultants like Thomas Pyzdek and John Kullmann, companies with fewer than 500 employees are less suited to Six Sigma implementation, or need to adapt the standard approach to make it work for them. This is due both to the infrastructure of Black Belts that Six Sigma requires, and to the fact that large organizations present more opportunities for the kinds of improvements Six Sigma is suited to bringing about.
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5. Tools and Techniques involved in six sigma and others

1. Fish Bone Diagram (Ishikawa Diagram) 2. 5 Whys 3. Analysis of Variance 4. Check Sheets 5. Control chart 6. Failure modes and effects analysis (FMEA) 7. Histogram 8. Process Capability 9. Quantitative Marketing Research (QMR) 10. Scatter Diagrams 11. Root Cause Analysis (RCA)
5.1.
Fish Bone Diagram (Ishikawa Diagram):
Ishikawa diagrams (also called fishbone diagrams, or herringbone diagrams) are causal diagrams that show the causes of a certain event. History Ishikawa diagrams were proposed by Kaoru Ishikawa in the 1960s, who pioneered quality management processes in the Kawasaki shipyards, and in the process became one of the founding fathers of modern management. It was first used in the 1940s, and is considered one of the seven basic tools of quality control. It is known as a fishbone diagram because of its shape, similar to the side view of a fish skeleton. Mazda Motors famously used an Ishikawa diagram in the development of the Miata sports car, where the required result was "Jinba Ittai" (Horse and Rider as One jap. ). The main causes included such aspects as "touch" and "braking" with the lesser causes including highly granular factors such as "50/50 weight distribution" and "able to rest elbow on top of driver's door". Every factor identified in the diagram was included in the final design. Causes Causes in the diagram are often categorized, such as to the 8 M's, described below. Cause-and-effect diagrams can reveal key relationships among various variables, and the possible causes provide additional insight into process behavior. The 6 Ms (used in manufacturing) Machine (technology) Method (process) Material (Includes Raw Material, Consumables and Information.) Man Power (physical work)/Mind Power (brain work): Kaizens, Suggestions
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Measurement (Inspection) Milieu/Mother Nature (Environment) The 8 Ps (used in service industry): Product=Service Price Place Promotion/Entertainment People(key person) Process Physical Evidence Productivity & Quality
Steps to make an Ishikawa Diagram Step-1: Identify and clearly define the outcome or EFFECT to be analyzed. Step-2: Draw the SPINE and create the EFFECT BOX. Step-3: Identify the main CAUSES contributing to the effect being studied. Step-4: For each major branch, identify other specific factors which may be the CAUSES of the EFFECT. Step-5: Identify more detailed levels of causes and continue organizing them under related causes or categories. Step-6: Analyze the Diagram. Step-7: Perform corrective actions.
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Examples 1.
2.
Advantages It helps determine the root causes of a problem using a structured approach. It increases knowledge of the process by helping everyone to learn more about the factors at work and how they relate. It identifies areas where data should be collected for further study.
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5.2.
5 Whys
The 5 Whys is a questions-asking method used to explore the cause/effect relationships underlying a particular problem. Ultimately, the goal of applying the 5 Whys method is to determine a root cause of a defect or problem. Example: The vehicle will not start. (the problem) 1. 2. 3. 4. Why? - The battery is dead. (first why) Why? - The alternator is not functioning. (second why) Why? - The alternator belt has broken. (third why) Why? - The alternator belt was well beyond its useful service life and not replaced. (fourth why) 5. Why? - The vehicle was not maintained according to the recommended service schedule. (fifth why, a root cause) 5th Why solution: Start maintaining the vehicle according to the recommended service schedule. The real key is to encourage the trouble-shooter to avoid assumptions and logic traps and instead to trace the chain of causality in direct increments from the effect through any layers of abstraction to a root cause that still has some connection to the original problem. Note that in this example the fifth why suggests a broken process or an alterable behavior, which is typical of reaching the root-cause level. It's interesting to note that the last answer points to a process. This is actually one of the most important aspects in the 5 Why approach...the real root cause should point toward a process. You will observe that the process is not working well or that the process does not even exist. Untrained facilitators will often observe that answers seem to point towards classical answers such as not enough time, not enough investments, or not enough manpower. These answers may sometimes be true but in most cases they lead to answers out of our control. Therefore, instead of simply asking the question why?, ask the question Why did the process fail?
5.3.
Analysis of Variance
In statistics, analysis of variance (ANOVA) is a collection of statistical models, and their associated procedures, in which the observed variance in a particular variable is partitioned into components attributable to different sources of variation. In its simplest form ANOVA provides a statistical test of whether or not the means of several groups are all equal, and therefore generalizes t-test to more than two groups. Doing multiple two-sample t-tests would result in an increased chance of committing a type I error. For this reason, ANOVAs are useful in comparing two, three or more means.
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Models: There are three classes of models used in the analysis of variance, and these are outlined here: Fixed-effects models (Model 1) The fixed-effects model of analysis of variance applies to situations in which the experimenter applies one or more treatments to the subjects of the experiment to see if the response variable values change. This allows the experimenter to estimate the ranges of response variable values that the treatment would generate in the population as a whole. Random-effects models (Model 2) Random effects models are used when the treatments are not fixed. This occurs when the various factor levels are sampled from a larger population. Because the levels themselves are random variables, some assumptions and the method of contrasting the treatments differ from ANOVA model 1. Mixed-effects models (Model 3) A mixed-effects model contains experimental factors of both fixed and random-effects types, with appropriately different interpretations and analysis for the two types.
5.4.
Check Sheet
The check sheet is a simple document that is used for collecting data in real-time and at the location where the data is generated. The document 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 sometimes called a tally sheet. A defining characteristic of a check sheet is that data is recorded by making marks ("checks") on it. A typical check sheet is divided into regions, and marks made in different regions have different significance. Data is read by observing the location and number of marks on the sheet. Five Basic types of Check Sheets: Classification: A trait such as a defect or failure mode must be classified into a category. Location: The physical location of a trait is indicated on a picture of a part or item being evaluated. Frequency: The presence or absence of a trait or combination of traits is indicated. Also number of occurrences of a trait on a part can be indicated.
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Measurement Scale: A measurement scale is divided into intervals, and measurements are indicated by checking an appropriate interval. Check List: The items to be performed for a task are listed so that, as each is accomplished, it can be indicated as having been completed.
5.5.
Control charts
Control charts, also known as Shewhart charts or process-behavior charts, in statistical process control are tools used to determine whether or not a manufacturing or business process is in a state of statistical control. If analysis of the control chart indicates that the process is currently under control then no corrections or changes to process control parameters are needed or desirable. If the chart indicates that the process being monitored is not in control, analysis of the chart can help determine the sources of variation, which can then be eliminated to bring the process back into control. Chart details: A control chart consists of: Points representing a statistic (e.g., a mean, range, proportion) of measurements of a quality characteristic in samples taken from the process at different times [the data] The mean of this statistic using all the samples is calculated (e.g., the mean of the means, mean of the ranges, mean of the proportions) A center line is drawn at the value of the mean of the statistic The standard error (e.g., standard deviation/sqrt(n) for the mean) of the statistic is also calculated using all the samples Upper and lower control limits (sometimes called "natural process limits") that indicate the threshold at which the process output is considered statistically 'unlikely' are drawn typically at 3 standard errors from the center line. Upper and lower warning limits, drawn as separate lines, typically two standard errors above and below the center line Division into zones, with the addition of rules governing frequencies of observations in each zone Annotation with events of interest, as determined by the Quality Engineer in charge of the process's quality
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Chart Usage: If the process is in control (and the process statistic is normal), 99.7300% of all the points will fall between the control limits. Any observations outside the limits, or systematic patterns within, suggest the introduction of a new (and likely unanticipated) source of variation, known as a special-cause variation. Since increased variation means increased quality costs, a control chart "signaling" the presence of a special-cause requires immediate investigation. The purpose of control charts is to allow simple detection of events that are indicative of actual process change. This simple decision can be difficult where the process characteristic is continuously varying; the control chart provides statistically objective criteria of change. When change is detected and considered good its cause should be identified and possibly become the new way of working, where the change is bad then its cause should be identified and eliminated.
5.6.
Failure modes and effects analysis (FMEA)
A failure modes and effects analysis (FMEA) is a procedure in product development and operations management for analysis of potential failure modes within a system for classification by the severity and likelihood of the failures. A successful FMEA activity helps a team to identify potential failure modes based on past experience with similar products or processes, enabling the team to design those failures out of the system with the minimum of effort and resource expenditure, thereby reducing development time and costs. It is widely used in manufacturing industries in various phases of the product life cycle and is now increasingly finding use in the service industry. Failure modes are any errors or defects in a process, design, or item, especially those that affect the customer, and can be potential or actual. Effects analysis refers to studying the consequences of those failures.
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FMEA Cycle
5.7.
Histogram
In statistics, a histogram is a graphical representation showing a visual impression of the distribution of data. It is an estimate of the probability distribution of a continuous variable and was first introduced by Karl Pearson. A histogram consists of tabular frequencies, shown as adjacent rectangles, erected over discrete intervals (bins), with an area equal to the frequency of the observations in the interval. The height of a rectangle is also equal to the frequency density of the interval, i.e., the frequency divided by the width of the interval. The total area of the histogram is equal to the number of data. A histogram may also be normalized displaying relative frequencies. It then shows the proportion of cases that fall into each of several categories, with the total area equaling 1. The categories are usually specified as consecutive, non-overlapping intervals of a variable. The categories (intervals) must be adjacent, and often are chosen to be of the same size.
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5.8.
Process Capability
A process is a unique combination of tools, materials, methods, and people engaged in producing a measurable output; for example a manufacturing line for machine parts. All processes have inherent statistical variability which can be evaluated by statistical methods. The Process Capability is a measurable property of a process to the specification, expressed as a process capability index (e.g., Cpk or Cpm) or as a process performance index (e.g., Ppk or Ppm). The output of this measurement is usually illustrated by a histogram and calculations that predict how many parts will be produced out of specification (OOS). Process capability is also defined as the capability of a process to meet its purpose as managed by an organization's management and process definition structures. Two parts of process capability are: 1. Measure the variability of the output of a process. 2. Compare that variability with a proposed specification or product tolerance.
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5.9.
Quantitative Marketing Research:
Quantitative marketing research is the application of quantitative research techniques to the field of marketing. It has roots in both the positivist view of the world, and the modern marketing viewpoint that marketing is an interactive process in which both the buyer and seller reach a satisfying agreement on the "four Ps" of marketing: Product, Price, Place (location) and Promotion. As a social research method, it typically involves the construction of questionnaires and scales. People who respond (respondents) are asked to complete the survey. Marketers use the information so obtained to understand the needs of individuals in the marketplace, and to create strategies and marketing plans.
5.10. Scatter Diagrams

A scatter plot or scatter-graph is a type of mathematical diagram using Cartesian coordinates to display values for two variables for a set of data. The data is displayed as a collection of points, each having the value of one variable determining the position on the horizontal axis and the value of the other variable determining the position on the vertical axis. This kind of plot is also called a scatter chart, scatter-gram, scatter diagram or scatter graph. How to make: A scatter plot is used when a variable exists that is under the control of the experimenter. If a parameter exists that is systematically incremented and/or decremented by the other, it is called the control parameter or independent variable and is customarily plotted along the horizontal axis. The measured or dependent variable is customarily plotted along the vertical axis. If no dependent variable exists, either type of variable can be plotted on either axis and a scatter plot will illustrate only the degree of correlation (not causation) between two variables.
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5.11. Root Cause Analysis (RCA)

Root cause analysis (RCA) is a class of problem solving methods aimed at identifying the root causes of problems or events. Root Cause Analysis is any structured approach for identifying the factors that resulted in the nature, the magnitude, the location, and the timing of the harmful outcomes (consequences) of one or more past events in order to identify what behaviors, actions, inactions, or conditions need to be changed to prevent recurrence of similar harmful outcomes and to identify the lessons to be learned to promote the achievement of better consequences.
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6. Impacts of Total Quality Management

There are as many disappointment and failures in the quality movements as there are success stories. Whether or not quality improves the businesses bottom line is an important question. Researchers have performed many analyses to study the impacts of TQM on performance of companies. The study of impacts of TQM, by different researchers, mostly involves the study of performance of companies before and after they have won some quality award (like Malcolm Baldrige Award) with the control groups. The study of the changes in sales, inventory, earnings before interest and tax (EBIT) yields the impacts of Total Quality Management.
6.1.
TQM and Profitability
In past, some business fell into financial hardships soon after winning prestigious awards like Deming award (from Japan) and Baldrige award in United States. On the other hand, Toyota known for its best quality product is also most profitable auto manufacturer. Furthermore, studies done in the past have also shown links between profitability and quality. Researchers have used earnings before interest and tax (EBIT) as a measure of profitability. After much research, the researchers declared that the change in EBIT for award winners much higher. In a review, Deepak Subedi (Assistant Professor Marshall University, Huntington, USA) and Suneel Maheshwari (Associate Professor Marshall University, Huntington, USA) after analyzing the performance of different companies wrote: it seems that Change in EBIT for Award winners are higher compared to the same for control groups. In 9 out of 10 periods average annual change in EBIT of the award winners were higher than those in the control group.
6.2.
TQM and Sales
One of the aims of quality management is to satisfy customers. This is the reason that all Quality awards give a very high importance to customer satisfaction. It is expected that satisfied customers will lead to increased market share by increasing the sales. Many entrepreneurs understand this link and embark on quality management in order to increase their market. For example, Toyota is now the number one car manufacturer and its success is based on its reputation for high quality. Besides, empirical studies by Garvin (1983) and Hendricks and Singhal (1997) suggest a link between high quality and the market share. After many analyses the researchers have declared that quality did have an impact on the sales. Deepak Subedi and Suneel Maheshwari wrote in their review: The numbers of years considered are different for different years. Award winners can be expected to outperform control group. It seems that Change in sales for Award winners are higher compared to the same for control groups.
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6.3.
TQM and Cost
Total quality management (TQM) is an organizational technology that allows firms to increase their productivity. In fact, a need to save on production cost might have been one of the reasons for Toyota to pursue TQM. The management of Toyota observed that rework took considerable time and production cost for mass manufacturers like Ford, and thought that doing things right in the very first time is an effective measure to cut costs. Furthermore, cost cutting and improving efficiency can be focus of managers who are not as successful in implementing total quality management. On average, the efficiency of American car producers performance has improved a lot, making it comparable to their Japanese rivals. However, they still lag with respect to quality. Although high quality may eventually lead to lower cost, however, application of high quality management techniques (which may require things like learning, shorter work shift to reduce fatigue) may lead to increased costs in the beginning. For example, in order to avoid rework, Toyota had to encourage its workers to focus of fixing the defects soon as they were found. Workers were also required to identify what went wrong in order not to repeat the mistake. They could stop the assembly line if required. Needless to say, the assembly lines were stopped a lot in the beginning. It took some time before they could realize the cost savings. The cost that comes on quality can be divided into two categories: Quality Control Costs consists of costs necessary for achieving high quality. These are of two types: 1. Prevention costs 2. Appraisal costs Quality Failure Costs consists of the cost consequences of poor quality. These include: 1. External failure costs 2. Internal failure costs 1. Prevention Costs These are all costs incurred in the process of preventing poor quality from occurring. They include quality planning costs, such as the costs of developing and implementing a quality plan. 2. Appraisal Costs These are incurred in the process of uncovering defects. They include the cost of quality inspections, product testing, and performing audits to make sure that quality standards are being met. Also included in this category are the costs of worker time spent measuring quality and the cost of equipment used for quality appraisal.
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3. Internal Failure Costs These are associated with discovering poor product quality before the product reaches the customer site. One type of internal failure cost is rework, which is the cost of correcting the defective item. Sometimes the item is so defective that it cannot be corrected and must be thrown away. Such an item is called scrap. 4. External Failure Costs These are associated with quality problems that occur at the customer site. These costs can be particularly damaging because customer faith and loyalty can be difficult to regain. They include everything from customer complaints, product returns, and repairs, to warranty claims, recalls, and even litigation costs resulting from product liability issues. Companies that consider quality important invest heavily in prevention and appraisal costs in order to prevent internal and external failure costs. The earlier defects are found, the less costly they are to correct. For example, detecting and correcting defects during product design and product production is considerably less expensive than when the defects are found at the customer site. This is shown in Figure
After comparing the difference in changes in Cost of Goods Sold the researchers concluded that the differences in all the cases were not significant although the award winners have the edge.
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6.4.
TQM and Profit Margin
High quality good or service may command premium price. When premium price is charged firms can enjoy high profit margins, even when their cost structures are comparable to that of their competitors. However, premium prices and market share may not be complimentary. For example, Toyota and Honda despite their reputation of high quality do not charge premium. They are more interested in increasing their market share. Prices of different models of Toyota and Honda cars are average compared to same category cars produced by their competitors. There is a possible link, therefore, between quality and profit margins.
6.5.
TQM and Continuous Improvement
Continuous Improvement is another impact of TQM. Traditional systems operated on the assumption that once a company achieved a certain level of quality, it was successful and needed no further improvements. Traditionally, change for American managers involves large magnitudes, such as major organizational restructuring. The Japanese, on the other hand, believe that the best and most lasting changes come from gradual improvements. To use a simile, they believe that it is better to take frequent small doses of medicine than to take one large dose. Continuous improvement, called kaizen by the Japanese, requires that the company continually strive to be better through learning and problem solving. They believe that because we can never achieve perfection, we must always evaluate our performance and take measures to improve it.
6.6.
TQM and Employee Empowerment
TQM seeks to empower all employees to seek out quality problems and correct them. With the old concept of quality, employees were afraid to identify problems for fear that they would be reprimanded. Often poor quality was passed on to someone else, in order to make it someone elses problem. The new concept of quality, TQM, provides incentives for employees to identify quality problems. Employees are rewarded for uncovering quality problems, not punished. In TQM, the role of employees is very different from what it was in traditional systems. Workers are empowered to make decisions relative to quality in the production process. For example, in order to avoid rework, Toyota had to encourage its workers to focus of fixing the defects soon as they were found. Workers were also required to identify what went wrong in order not to repeat the mistake. They could stop the assembly line if required. Employees are, thus considered a vital element of the effort to achieve high quality. Their contributions are highly valued, and their suggestions are implemented. In order to perform this function, employees are given continual and extensive training in quality measurement tools.
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7. Case Study of the visit conducted at Pak Electron Limited (PEL)

7.1. Executive Summary
Organizations worldwide are constantly researching new ways to maximize their profit. One way to increase the market share is to ensure the total quality management. This case study is about our visit to PEL in accordance with our topic Total Quality Management. We met Mr. Azeem Talib (Manager Marketing Department in Power Projects) and Mr. Ali Usman from EPC in Power Projects and Mr. Salahuddin (Quality Control Department in switchgear).
7.2.
Introduction of PEL
Pak electron ltd is the pioneer manufacture of electrical goods. It was establish in 1956 in technical collaboration with M/S AEG of Germany. In October 1978 the group was bought by Saigal group of industries. Since its inception, the company has always been contribution towards the advancements and development of the engineering sector in Pakistan by producing hundreds of engineers, skilled workers and technicians through its apprenticeship schemes and training program. The products manufactured by PEL have always been of high standard and the name 'PEL' is synonymous with QUALITY all over Pakistan. Since its inception, the company has been working for the advancement and development of engineering know-how in Pakistan. The company has produced hundreds of engineers, skilled workers and technicians through its apprenticeship schemes & training programs. Product Categories: The company comprises in two divisions: Appliances division Power division
7.3.
Total Quality Management at PEL
During our visit at PEL, we visited the above mentioned people and inquired about the total quality management at PEL and came up with the following analysis: 7.3.1. Process of Quality Management ISO has defined their quality standards. These standards are checked at every stage in PEL. In PEL, standards of quality are written in manuals indicating critical quality standards. Hierarchy The hierarchy of quality control department is as follows: 1. Raw Material Inspection When raw material is received the quality of raw material is inspected according to the military standards MIL_STD_105E. According to these standards, the personnel of receiving department will inspect according to the military standards AQL4. If there are a lot of 500 and they choose 13 samples from the whole lot then they select the sample
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from the upper and lower and right and left side of the whole packet. It means that they select the sample by way of diversifying the area. If the 2 units of the sample are rejected then the whole lot will be rejected and if the lot is rejected then they call back the vendors and vendor check that lot again. If the lot is very much needed by the production department then they place a written request. The 100% inspection is done on it. In this case, they call the vendors or their inspectors and they check it on 100% basis. But this happens in very rare cases. On the other hand if the lot is accepted then it is remarked as GRL (good received lot) and sent to the store. While four copies of GRL are made and sent to the following four departments: Purchase department Quality control department To store For computer entry 2. Assembly or Measurement Report 20 clauses of ISO element give the general standards. Which are equally effective on each product but for each product, firm itself form the specific standards. And 20 elements of ISO should be reflected from these standards. The auditors check it so they have to all the checking records in the shape of writing, which is checked by the auditors. It is assembly or measurement report, which contains the detailed information of each step, and all the checking is in written form which is again inspected at the end of year. 3. Formulation of Standards Standards are formed by the combination of Research & Development dept. and quality control dept. They involve the whole organization by distributing the copies of standards. When they make the standards if any concerned dept. will send them suggestion and on the mutual agreement they handle them. They write down the standard of each stage and if the production dept. will make a mistake then corrective form will send to them and all the procedure of ISO should be in written form and should be followed by everyone balance sheet has been made and it contain the whole detail of checking. 4. Audits The internal audit is done once a year. Corrective measures are taken in case of any mistake. If the internal audit is given the approval certificate, then after six months ISO9000 auditors do external audit. 5. Quality Control PEL has also got certification for its two products. They have got this certification from the Swedish firm and consultants SGS. They have got the 9002, which cover the area from the production to after sale services. The following are the products for which have gotten 9000 certification:
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Compressors Energy Meters 6. Quality Policy The continuous improvement of all services through total involvement of all employees. The developing and the strengthening of partnership with external and internal customers and suppliers. Providing innovative and higher quality products and services to achieve total customer satisfaction by understanding their requirements and anticipating their future expectations or needs. Through Monitoring annual targets for quality improvements in all areas. Creating a culture of customer focus striving to become the lowest cost producer through agreed annual cost reduction program. Value people by understanding and drawing upon their strength i.e. abilities and knowledge and make efforts for their training and development. 7. Training Program They have also trained their quality inspectors. They have a program to train the quality inspector and classes are also held. But they have no proper academy. Different organizations send their employees, which train them.
8. ISO 9000
Why ISO is Required FOR PEL? Quality management system given by ISO 9000 acts as a support to achieve customer satisfaction benefits of ISO 9000. PEL competing against foreign competitor in the local market. Raise company image. A step toward total quality management. Perceived commitment to quality. PEL need it because they promote the slogan The quality conscious company. More united workforce through total employee participation.
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Total Quality Management ISO Certified Product The certified product of PEL is Energy Meter. The productions of meters are started on August 1994. In January 1997 it got the ISO 9002 certificates. After the certification the complaint level of every meter dropped to less than 0.07%.
On the job training competency certificate is issued. The team assesses weather they learn anything or not. The backbone of this system corrective and prevention action. All the workers are trained here for skilled jobs.
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Conclusion
Researchers after studying the performances of companies that implement TQM have made it clear that when TQM is implemented effectively, financial performance improves dramatically. The proclamation that TQM is dead is premature. TQM is well and alive. One would hope that managers responsible for implementing TQM would use the research results of many researchers to debate, and perhaps put to rest, many questions that others might have about the legitimacy of TQM as a viable and effective management system. As gurus of TQM have said repeatedly that the firms want to implement TQM effectively must have patience. It is widely accepted that TQM takes a long time to implement as it requires major organizational changes in culture and employee mindset. Hence, the benefits will be realized in the long-run. The evidence reveals that even after effective implementation, it still takes a couple of years before financial performance starts to improve. This is in contrast to the expectations of many firms who sent employees for education and training on TQM methods and implemented a few other things, and then expected to see instant results. Managers that embrace TQM for quick gains will surely be disappointed. To get the benefits from TQM, one must be patient. It improves performance in the long-haul. As Hendricks and Singhal said:
Firms should be realistic about what to expect from TQM. They should not be carried away by the hype associated with it. They should keep in mind that TQM is a philosophy to develop a management system. A management system based on TQM can only improve the probability of making the right decisions. It cannot guarantee that all decisions will be right. For example, even the best performing Baldrige award winners have had periods of poor financial performance after winning the Baldrige award. Furthermore, organizational characteristics such as size, capital intensity, extent of diversification, and the maturity of implementations, all influence the gains from TQM. These and other factors should be considered in setting expectations. Finally, the gains from TQM are likely to be tempered by the behavior of competitors. As more and more firms in a particular market adopt TQM, the extent of gains from TQM will diminish.
In a nut shell, we believe that TQM has still a long way to go.
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www.dti.gov.uk/quality/process http://en.wikipedia.org/wiki/Process_capability_index http://en.wikipedia.org/wiki/Six_Sigma http://en.wikipedia.org/wiki/5_Whys http://www.ifm.eng.cam.ac.uk/dstools/represent/tqm.html http://www.authorstream.com/Presentation/surn-78153-total-quality-management-educationppt-powerpoint/ http://www.scribd.com/doc/17542381/TQM-Presentation http://www.slideshare.net/mtaram/total-quality-management-presentation-949360 http://www.slideshare.net/snehtizoro/tqm-final-ppt http://www.amcy5.com/projects/marketing/amcy70.htm http://www.authorstream.com/Presentation/puneit-157007-total-quality-managementeducation-ppt-powerpoint/ http://www.google.com.pk/url?sa=t&rct=j&q=impacts%20of%20tqm&source=web&cd=2&ved= 0CCgQFjAB&url=http%3A%2F%2Fdissertations.ub.rug.nl%2FFILES%2Ffaculties%2Fmanagement %2F2001%2Fz.zhang%2Fc3.pdf&ei=hCniTsKXLsbLrQesmIjRAQ&usg=AFQjCNHWAnYUPawVWPLHT6ihGEiqIMoUg&cad=rja www.emeraldinsight.com/journals.htm?articleid=1766697 http://asq.org/qic/display-item/index.html?item=24577
The Impact of Total Quality Management (TQM) on Financial Performance: Evidence from Quality Award Winners by Kevin B. Hendricks and Vinod R. Singhal
www.ipedr.net/vol1/58-B10078.pdf www.ijest.info/docs/IJEST11-03-05-004.pdf
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