TOTAL QUALITY

MANAGEMENT
Kristian Veil N. Nierves
Meaning of Quality
Meeting Customers Requirements
Doing Things Right the First Time
Freedom from Failure (Defects)
Consistency
Continuous Improvement

Meaning of Quality
Conformance to specifications
Does product/service meet targets and tolerances
defined by designers?
Fitness for use
Evaluates performance for intended use
Value for price paid
Evaluation of usefulness vs. price paid
Support services
Quality of support after sale
Psychological
e.g. Ambiance, prestige, friendly staff

buisnessdictionary.com
Total Quality Management
A holistic approach to long-term success
that views continuous improvement in all
aspects of an organization as a process
and not as a short-term goal. It aims to
radically transform the organization
through progressive changes in the
attitudes, practices, structures, and
systems.


businessdictionary.com
Total Quality Management
Total quality management transcends the
product quality approach, involves
everyone in the organization, and
encompasses its every function:
administration, communications,
distribution, manufacturing, marketing,
planning, training, etc. Coined by the US
Naval Air Systems Command in early
1980s, this term has now taken on several
meanings and includes
businessdictionary.com
Total Quality Management
commitment and direct involvement of highest-
level executives in setting quality goals and
policies, allocation of resources, and monitoring
of results
realization that transforming an organization
means fundamental changes in basic beliefs and
practices and that this transformation is
everyone's job
building quality into products and practices right
from the beginning

businessdictionary.com
Total Quality Management
understanding of the changing needs of the
internal and external customers, and
stakeholders, and satisfying them in a cost
effective manner
instituting leadership in place of mere supervision
so that every individual performs in the best
possible manner to improve quality and
productivity, thereby continually reducing total
cost
eliminating barriers between people and
departments so that they work as teams to
achieve common objectives
instituting flexible programs for training and
education, and providing meaningful measures of
performance that guide the self-improvement
efforts of everyone involved.

Dimensions of Quality:
Manufacturing Organizations
Conformance
the degree to which a product
characteristic meets preset standards
Performance
such as acceleration of a vehicle
Reliability
that the product will function as
expected without failure
Dimensions of Quality:
Manufacturing Organizations
Features
the extras that are included beyond the
basic characteristics
Durability
expected operational life of the product
Serviceability
how readily a product can be repaired
Dimensions of Quality:
Manufacturing Organizations
Aesthetics
how a product looks, feels, sounds,
smells, or tastes
Safety
assurance that customer will not suffer
injury or harm from a product
Perceptions
subjective perceptions based on brand
name, advertising, and the like


Dimensions of Quality:
Service Organizations
Time and Timeliness
How long must a customer wait for service, and is it
completed on time?
Is an overnight package delivered overnight?
Completeness
Is everything customer asked for provided?
Is a mail order from a catalogue company complete
when delivered?
Courtesy
How are customers treated by employees?
Are catalogue phone operators nice and are their voices
pleasant?
Dimensions of Quality:
Service Organizations
Consistency
Is the same level of service provided to each customer each
time?
Is your newspaper delivered on time every morning?
Accessibility and convenience
How easy is it to obtain service?
Does a service representative answer you calls quickly?
Accuracy
Is the service performed right every time?
Is your bank or credit card statement correct every month?
Responsiveness
How well does the company react to unusual situations?
How well is a telephone operator able to respond to a
customers questions?

Cost of Quality
Quality affects all aspects of the
organization and has dramatic cost
implications

External Failure Costs Appraisal Costs
Internal Failure Costs Prevention Costs
Quality Failure Costs Quality Control Costs
Quality Control Costs
costs necessary for achieving high quality

Costs incurred in the process of preventing poor quality from occurring.
Costs incurred in the process of uncovering defects.
Prevention Costs
Appraisal Costs
Prevention Cost
Quality planning costs
costs of developing and implementing quality
management program
Product-design costs
costs of designing products with quality
characteristics
Process costs
costs expended to make sure productive
process conforms to quality specifications
Prevention Cost
Training costs
costs of developing and putting on quality
training programs for employees and
management
Information costs
costs of acquiring and maintaining data related
to quality, and development of reports on
quality performance


Appraisal Cost
Inspection and testing
costs of testing and inspecting materials, parts, and
product at various stages and at the end of a process
Test equipment costs
costs of maintaining equipment used in testing quality
characteristics of products
Operator costs
costs of time spent by operators to gar data for testing
product quality, to make equipment adjustments to
maintain quality, and to stop work to assess quality

Quality Failure Costs
cost consequences of poor quality
Costs associated with discovering poor product quality before the
product reaches the customer.
Costs associated with quality problems that occur at the customer site.
Internal Failure Costs
External Failure Costs
Internal Failure Cost
Scrap costs
costs of poor-quality products that must be
discarded, including labor, material, and
indirect costs
Rework costs
costs of fixing defective products to conform to
quality specifications
Process failure costs
costs of determining why production process
is producing poor-quality products
Internal Failure Cost
Process downtime costs
costs of shutting down productive process to
fix problem
Price-downgrading costs
costs of discounting poor-quality products
that is, selling products as seconds

External Failure Cost
Customer complaint costs
costs of investigating and satisfactorily
responding to a customer complaint resulting
from a poor-quality product
Product return costs
costs of handling and replacing poor-quality
products returned by customer
Warranty claims costs
costs of complying with product warranties
External Failure Cost
Product liability costs
litigation costs resulting from product liability
and customer injury
Lost sales costs
costs incurred because customers are
dissatisfied with poor quality products and do
not make additional purchases


Cost of Quality
The earlier defects are found, the less
costly they are to correct.
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
Cost of Quality
Evolution of Total Quality Management
Quality Gurus
Quality Guru Main Contribution
Walter A. Shewhart
-contributed to understanding of process variability
-developed concept of statistical charts
W. Edwards Deming
-stressed managements responsibility for quality
-developed 14 points to guide companies in
quality improvement
Joseph M. Juran
-defined quality as fitness for use
-developed concept of cost quality
Armand V. Feigenbaum -introduced concept of total quality control
Philip B. Crosby
-coined phrase quality is free
-introduced concept of zero defects
Kaoru Ishikawa
-developed cause-and-effect diagrams
-identified concept internal customer
Genichi Taguchi
-focused on product design quality
-developed Taguchi loss function
Demings 14 Points
1. Create constancy of purpose
2. Adopt philosophy of prevention
3. Cease mass inspection
4. Select a few suppliers based on quality
5. Constantly improve system and workers
6. Institute worker training
7. Instil leadership among supervisors
8. Eliminate fear among employees
9. Eliminate barriers between departments
10. Eliminate slogans
11. Remove numerical quotas
12. Enhance worker pride
13. Institute vigorous training and education programs
14. Develop a commitment from top management to implement
above 13 points
Total Quality Control Philosophy
TQM Focuses on identifying quality
problem root causes
Encompasses the entire organization
Involves the technical as well as people
Total Quality Control Philosophy
Customer focus
Continuous
improvement
Employee
empowerment
Use of quality tools
Product design
Process management
Managing supplier
quality
Goal is to first
identify and then
meet customer needs
TQM recognizes that
a perfectly produced
product has little
value if it is not what
the customer wants
Quality is customer
driven.
Total Quality Control Philosophy
Customer focus
Continuous
improvement
Employee
empowerment
Use of quality tools
Product design
Process management
Managing supplier
quality

A philosophy of never-
ending improvement
The PlanDoStudy
Act Cycle
Benchmarking

Total Quality Control Philosophy
Customer focus
Continuous
improvement
Employee
empowerment
Use of quality tools
Product design
Process management
Managing supplier
quality

to seek out quality
problems and correct
them
Employees are
rewarded for
uncovering quality
problems, not
punished

Total Quality Control Philosophy
Customer focus
Continuous
improvement
Employee
empowerment
Use of quality tools
Product design
Process management
Managing supplier
quality

External customers
those that purchase
the companys
goods and services
Internal
customers
employees of the
organization who
receive goods or
services from
others in the
company
Total Quality Control Philosophy
Customer focus
Continuous
improvement
Employee
empowerment
Use of quality tools
Product design
Process management
Managing supplier
quality

Team Approach
Two heads are
better than one
Using techniques such
as brainstorming,
discussion, and quality
control tools, teams
work regularly to
correct problems.
The contributions of
teams are considered
vital to the success of
the company.
Total Quality Control Philosophy
Customer focus
Continuous
improvement
Employee
empowerment
Use of quality tools
Product design
Process management
Managing supplier
quality

Quality Circle
A team of volunteer
production employees
and their supervisors
who meet regularly to
solve quality problems.
Total Quality Control Philosophy
Customer focus
Continuous
improvement
Employee
empowerment
Use of quality tools
Product design
Process management
Managing supplier
quality

Employees need to
identify and correct
quality problems so
they need proper
training
They need to
understand how to
assess quality by
using a variety of
quality control tools,
how to interpret
findings, and how to
correct problems

Total Quality Control Philosophy
Customer focus
Continuous
improvement
Employee
empowerment
Use of quality tools
Product design
Process management
Managing supplier
quality

Seven Tools of Quality
Control

Total Quality Control Philosophy
Customer focus
Continuous
improvement
Employee
empowerment
Use of quality tools
Product design
Process management
Managing supplier
quality

Quality Function
Deployment
A tool used to translate
the preferences of the
customer into specific
technical requirements

Total Quality Control Philosophy
Customer focus
Continuous
improvement
Employee
empowerment
Use of quality tools
Product design
Process management
Managing supplier
quality

QFD encompasses
Customer requirements
Competitive evaluation
Product characteristics
Relationship matrix
Trade-off matrix
Setting Targets


Total Quality Control Philosophy
Customer focus
Continuous
improvement
Employee
empowerment
Use of quality tools
Product design
Process management
Managing supplier
quality

Reliability
The probability that a
product, service, or part
will perform as
intended.
No product is 100%
certain to function
properly
Reliability is a
probability function
dependent on sub-parts
or components
Total Quality Control Philosophy
Customer focus
Continuous
improvement
Employee
empowerment
Use of quality tools
Product design
Process management
Managing supplier
quality

Reliability
Reliability of a system is
the product of
component reliabilities
RS = (R1) (R2)... (Rn)
RS = reliability of the
product or system
R1 = reliability of the
components
Increase reliability by
placing components in
parallel

Total Quality Control Philosophy
Customer focus
Continuous
improvement
Employee
empowerment
Use of quality tools
Product design
Process management
Managing supplier
quality

Reliability
Parallel components
allow system to operate
if one or the other fails
RS = R1 + (R2*
Probability of needing
2nd component)

Total Quality Control Philosophy
Customer focus
Continuous
improvement
Employee
empowerment
Use of quality tools
Product design
Process management
Managing supplier
quality

Quality products come
from quality sources
Quality must be built
into the process
Total Quality Control Philosophy
Customer focus
Continuous
improvement
Employee
empowerment
Use of quality tools
Product design
Process management
Managing supplier
quality

Quality at the source
a belief that it is better
to uncover source of
quality problems and
correct it
TQM extends to
quality of product
from companys
suppliers

Total Quality Control Philosophy
Customer focus
Continuous
improvement
Employee
empowerment
Use of quality tools
Product design
Process management
Managing supplier
quality

An inspection
performed to check
the quality of
materials that has
arrived is viewed as a
practice contributing
to poor quality and
wasted time and cost.

Total Quality Control Philosophy
Customer focus
Continuous
improvement
Employee
empowerment
Use of quality tools
Product design
Process management
Managing supplier
quality

TQM extends the
concept of quality to
suppliers and ensures
that they engage in
the same quality
practices.


Quality Awards and Standards
Philippine Quality Award
Malcolm Baldrige National Quality Award
(MBNQA)
The Deming Prize
ISO 9000 Certification
ISO 14000 Standards

Philippine Quality Award
Sets a standard of excellence to help
Filipino organizations achieve world-class
performance and serves as a template
for competitiveness based on the
principles of Total Quality Management
(TQM).
A national quality award comparable with
the Malcolm Baldrige National Quality
Award (MBNQA) of the US and those in
Europe and Asia.

Malcolm Baldrige National Quality
Award (MBNQA)
Award named after the former Secretary
of Commerce Regan Administration
Intended to reward and stimulate quality
initiatives
Given to no more that two companies in
each of three categories; manufacturing,
service, and small business
Past winners; Motorola Corp., Xerox,
FedEx, 3M, IBM, Ritz-Carlton
The Deming Prize
Given by the Union of Japanese Scientists
and Engineers since 1951
Named after W. Edwards Deming who
worked to improve Japanese quality after
WWII
Not open to foreign companies until 1984
Florida P & L was first US company winner

ISO 9000 Standards
Certification developed by International
Organization for Standardization
Set of internationally recognized quality
standards
Companies are periodically audited &
certified

ISO 9000 Standards
ISO 9000:2000 QMS
Fundamentals and Standards
Provides the terminology and definitions used in the
standards.
It is the starting point for understanding the system
of standards.
ISO 9001:2000 QMS
Requirements
This is the standard used for the certification of a
firms quality management system.
It is used to demonstrate the conformity of quality
management systems to meet customer
requirements.

ISO 9000 Standards
ISO 9004:2000 QMS
Guidelines for Performance
Provides guidelines for establishing a quality
management system.
It focuses not only on meeting customer
requirements but also on improving performance.
More than 40,000 companies have been
certified
ISO 14000 Standards
Focuses on a companys environmental
responsibility
Why TQM Efforts Fail
Lack of a genuine quality culture

Lack of top management support and
commitment

Over- and under-reliance on statistical
process control
TQM Within
Operations Management
TQM is broad sweeping organizational
change
TQM impacts
Marketing
providing key inputs of customer information
Finance
evaluating and monitoring financial impact
Accounting
provides exact costing
TQM Within
Operations Management
Engineering
translate customer requirements into specific
engineering terms
Purchasing
acquiring materials to support product development
Human Resources
hire employees with skills necessary
Information systems
increased need for accessible information

Reference
www.wiley.com
Wiley and Sons


The PlanDoStudyAct Cycle
A diagram that describes the activities
that need to be performed to incorporate
continuous improvement into the
operation.
Also called the Deming Wheel after
originator
Circular, never ending problem solving
process
The PlanDoStudyAct Cycle






Plan
Do
Study
Act

Evaluate current process
Collect procedures, data,
identify problems
Develop an improvement plan,
performance objectives





The PlanDoStudyAct Cycle






Plan
Do
Study
Act


Implement the plan trial basis





The PlanDoStudyAct Cycle






Plan
Do
Study
Act



Collect data and evaluate
against objectives





The PlanDoStudyAct Cycle






Plan
Do
Study
Act


Communicate the results from
trial
If successful, implement new
process




Benchmarking
Studying the business practices of other
companies for purposes of comparison
Seven Tools of Quality Control
Cause-and-Effect
Diagrams
Flowcharts
Checklists
Control Charts
Scatter Diagrams
Pareto Analysis
Histograms
A chart that identifies
potential causes of
particular quality
problems.
Cause-and-effect
diagrams are
problem-solving tools
commonly used by
quality control teams.
Seven Tools of Quality Control
Cause-and-Effect
Diagrams
Flowcharts
Checklists
Control Charts
Scatter Diagrams
Pareto Analysis
Histograms
Specific causes of
problems can be
explored through
brainstorming.
The development of a
cause-and-effect
diagram requires the
team to think through
all the possible causes
of poor quality.

Quality
Problem
Out of adjustment
Tooling problems
Old / worn
Machines
Faulty
testing equipment
Incorrect specifications
Improper methods
Measurement
Poor supervision
Lack of concentration
Inadequate training
Human
Deficiencies
in product design
Ineffective quality
management
Poor process design
Process
Inaccurate
temperature
control
Dust and Dirt
Environment
Defective from vendor
Not to specifications
Material-
handling problems
Materials
Seven Tools of Quality Control
Cause-and-Effect
Diagrams
Flowcharts
Checklists
Control Charts
Scatter Diagrams
Pareto Analysis
Histograms
A schematic of the
sequence of steps
involved in an
operation or process
It provides a visual
tool that is easy to
use and understand.
Often the first step in
Process Re-
Engineering
Seven Tools of Quality Control
Cause-and-Effect
Diagrams
Flowcharts
Checklists
Control Charts
Scatter Diagrams
Pareto Analysis
Histograms
A list of common
defects and the
number of observed
occurrences of these
defects.
A checklist can also be
used to focus on other
dimensions, such as
location or time.

Seven Tools of Quality Control
Cause-and-Effect
Diagrams
Flowcharts
Checklists
Control Charts
Scatter Diagrams
Pareto Analysis
Histograms
Charts used to
evaluate whether a
process is operating
within set
expectations.
Seven Tools of Quality Control
Cause-and-Effect
Diagrams
Flowcharts
Checklists
Control Charts
Scatter Diagrams
Pareto Analysis
Histograms
Graphs that show how
two variables are
related to each other
They are particularly
useful in detecting the
amount of correlation,
or the degree of linear
relationship, between
two variables.

Seven Tools of Quality Control
Cause-and-Effect
Diagrams
Flowcharts
Checklists
Control Charts
Scatter Diagrams
Pareto Analysis
Histograms
A technique used to
identify quality
problems based on
their degree of
importance.
Often called the 80-20
Rule
Principle is that quality
problems are the
result of only a few
problems e.g. 80% of
the problems caused
by 20% of causes
Seven Tools of Quality Control
Cause-and-Effect
Diagrams
Flowcharts
Checklists
Control Charts
Scatter Diagrams
Pareto Analysis
Histograms
A chart that shows the
frequency distribution
of observed values of
a variable