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Total Quality

Management

Research and Created by:

V. Menchavez
JWPS Journeyman Welding &
Piping Services

Definition of Total Quality Management (TQM)

Total Quality Management (TQM) is an enhancement to
technique to guarantee survival in world-class
competition.
Total Made up of the whole.
Quality Degree of excellence a product or service
provides.
Management Act, art, or manner of handling,
controlling, directing etc.

TQM
Managing the entire organization so that it excels in all
dimensions of products & services that are important to
the customer

Philosophical Element
Customer Driven quality
Continuous improvement
Employee participation &
development
Quick response
Design quality & prevention
Management by fact
Partnership development
Corporate responsibility & citizenship

Generic Tools
SPC Tools
Process flow charts
Check sheets
Pareto analysis &
histogram
Cause & effect (or fish
bone) diagrams
Run charts
Scatter diagrams
Control charts Quality
function deployment

Elements of Total Quality Management

SPC = statistical process control

Tools of Q.C Deptt.

SQC Methods
Sampling plans
Process capability
Taguchi Methods

Pareto Analysis
Pareto was an Italian economist who discovered
a universal relationship between value and
quantity. He used this technique for assessing
uneven distribution of wealth. Pareto analysis
helps in identification of the vital few from the
trivial many at a glance. Pareto diagram is
drawn after data collection for two purposes as
follows:
1. Differentiating
the
major
factors
that
contribute the most to the unsatisfactory
situation, from other trivial factors.
2. Tackling the major factors responsible for any
problem.

The use of Pareto Charts have given rise to the 80-20 rule
which suggests that 80 per cent of an organisations
problems come from 20 per cent of its tasks. A Pareto
Diagram can be constructed using the following steps:
1. Use a checklist or brainstrome to obtain data.
2. Arrange the data in descending order starting from the
largest category to the smallest.
3. Calculate the total.
4. Compute the percentage of the total that each category
represents.
5. Compute the cumulative percentages.
6. Scale the vertical axis for frequency from zero to hundred.
7. From left to right construct a bar for each category with
category and add them in descending order (combine the
categories containing the fewest items into an other
category and put it on the extreme right as the last bar).
8. Draw a vertical scale on the right and add a percentage (0 to
100 per cent) scale.
9. Plot a cumulative percentage line.

100

Critical few

75

81 %

96 %

100 %
80%
75 %

61 %

Trivial many

50

50%
38 %
Cumulative Customer
Complaints

25

a
Invoicing

Quality
performance

25%
d

e
Personnel

0
Delivery

Pa

For example, Pareto analysis can

be carried out for the problems of
a company, which are contributed
by the following:
1. Working systems (50%)
2. Operating costs (30%)
3. Facilities (10%)
4. Manpower (10%)

Cause and effect Diagram

The cause and effect diagram is an
investigative tool. This is also called
Ishikawa Diagram. Because of its shape, the
diagram is also termed as Fishbone Diagram.
There is a systematic arrangement of all
possible causes which give rise to the effect
in Ishikawa diagram. Before taking up
problem for a detailed study, it is necessary
to list down all possible causes through a
brainstorming session so that no important
cause is missed. The causes are then
divided into major sources or variables.

Method

People
Wrong
Jobs
assigned

Lack
Training

Manual
Work

Fault in
Price
very high setting

Faulty
material
Material

Price setting
not proper Products not
as per
customers
requirements
Ill maintained

Machines

The objective of a cause and effect diagram is

to cure the causes and not merely list the
symptoms. There are four key steps in
constructing a cause and effect diagram:
1. Begin by agreeing on the effect (problem
statement)
2. Generate the causes by checklist data or
brainstorming
3. Place the problem statement in a box
category and add brainstormed ideas. For
each cause, ask why does this happen?
4. Identify the root or most basic causes of the
problem by finding the factor5s that are
repeated. Collect additional data to verify
the relationship of cause and effect.

Basic Approach of TQM

requires six basic concepts:
1.

A committed and involved management to provide

long-term, top-to-bottom organizational support.
2. An unwavering focus on the customer, both
internally and externally.
3. Effective involvement and utilization of the entire
work force.
4. Continuous improvement of the business and
production process.
5. Treating suppliers as partner.
6. Establish performance measures for the processes.
These concepts outline an excellent way to run an
organization.

Dimension

Performance

the picture

Features

remote control

Conformance

workmanship

Reliability

the unit to fail

Durability

Service

Response

dealer

Aesthetics

Reputation

ranked first

ISO 9000 SERIES

ISO 9000 is a series of standards agreed upon by the
international organization for standardization (ISO) and
More than 100 countries now recognize the 9000 series
for quality standards and certification for international
trade. In Europe & European common market (ECM)
alone, more than 50,000 companies have certified as
complying with these standards.
All companies having international trade will have to
THE ISO 9000 SERIES
ISO 9000 consists of five
numbered as 9000 through 9004

primary

parts

Design
Development

Procurement

Production

ISO
9003

ISO
9002

ISO 9001

Installation

Servicing

QUALITY SYSTEM ISO

Guide line for Use:
9000 :
Quality management & quality assurance
standards- guidelines for selection & use.
9004 :
Quality management & quality system
elements guidelines
Quality system
9001 :
Model for quality assurance in design,
production, installation & servicing.
9002 :
Model for quality assurance in production &
installation.
9003 :
Model for quality assurance in final
inspection test.
ISO certification can take from 3 to 6 months to as long
as two years if top management is not fully committed.
Certification involves getting the proper documents,
initiating the required procedures & practices and
conducting internal audits.

First Party :
Second Party:
Third Party :

A firm audits itself against ISO 9000

standards
A customer audits its supplier
A Qualified national or international
standards or certifying Agency serves
as auditor

The best certification is by a third party and once

passed, the firm can be registered & recorded as
having achieved ISO 9000 status.
ISO specifies the way the firm operates as well as its
quality standards, delivery times, service levels & so
on. If a manufacturer wants to purchase, he can
either visit / audit the supplier but it is always easier,
cheaper, quicker & legally safer to select certified
supplier

ISO

9000 certification has become the de-facto

minimum requirement for those wishing to
compete globally

All actions in preparing for ISO certification & in

maintaining the certification would result in
streamlining of quality management system which
may lead to improvements in product quality.
It can also lead to significant cost reductions through
reduction in rework, warranty work, repair, scrap, etc
ISO 9000 lays stress on customer orientation. This
would result in better overall results for the company
in addition to improving customer relations.
There may be an impetus to improve employee
relations, employee empowerment and

The 20 Elements to be addressed in an

ISO 9000 Quality System
1. Management Responsibility
2. quality system
3. contract review
4. design control
5. document control
7. Customer-Supply Material
8. Product Identification and Traceability
9. Process Control
10.Inspection and Testing

11.Inspection, Measuring, and Test Equipment

12.Inspection and Test Status
13.Control of Nonconforming Product
14.Corrective Action
15.Handling, Storage, Packaging, and Delivery
16.Quality Records
17.Internal Quality Audits
18.Training
19.Servicing
20.Statistical Techniques

Difference between ISO 9000 and TQM

ISO 9000
1. Not necessarily customer focused.
2. Not integrated with corporate
strategy.
3. Technical systems and procedures
focused.
4. Employee involvement is not
necessary.
5. No focus on continuous
improvement in ISO 9000 it is a
decision
6. Can be departmentally focused.
7. Quality department responsible for
quality.
8. More likely to preserve the status
quo.
9. Three-step maxim of ISO 9000 is:
(i) document what you do, (ii) do
only what you document and (iii)
demonstrate that you have done it,
by documentary proof.
10.ISO 9000 are technical and physical
systems and standards.

TQM
1. Definitely customer focused.
2. Integral to company strategy.
3. Philosophy, concepts, tools and
techniques focused.
4. Emphasis is on employee
involvement and empowerment.
5. Continuous improvement and TQM is
a never-ending journey.
6. Organization-wide focus on all
departments, functions and levels.
7. Everyone is responsible for quality.
8. Involves process and culture change.
9. Customer satisfaction and economic
cost are TQM two distinguishing
features.
10.TQM is a philosophy where the
approach is behavioral and human.

Quality Function Deployment (QFD)

QFD is a systematic and organized approach of
taking
customer
needs
and
demands
into
consideration while designing new products and
services or while improving the existing products and
services. Some experts also call it as customer driven
engineering because the voice of the customer is
diffused throughout the product (or service)
development life cycle.
These
needs
are
deployed
into
design
requirements
and
subsequently
through
the
manufacturing chain of critical part characteristics and
key process requirements. Finally, these needs are
deployed in operational specifications.

Benefits of QFD

The major benefits of QFD are meeting and exceeding

customer satisfaction and thus obtaining higher
market share and profits.
1. QFD minimizes the later engineering changes and
results in better quality
2. Customer complaints about and dissatisfaction with
new products decrease with passage of time.
3. QFD applies a cross-functional approach breaking
communication walls amongst departments of a
company.
4. Develop a deeper understanding of customer needs
and have the customers voice into the business for
making trade-offs, resulting in superior decisions for
the organization.
5. Streamlining of processes helps in elimination of
many internal processes that do not add value.

6. QFD helps in evaluating customer needs with

respect to competitive products and services.
7. It provides opportunities for introducing new
products.
8. QFD provides an excellent framework for crossfunctional deployment of quality, cost and delivery.
9. QFD by collecting and analyzing latest information on
a continuous basis allows for quick changes in
product development process.
QFD provides a much needed horizontal weave across
the organization which in turn helps in smooth
propagation of TQM. In the most Indian companies,
this horizontal weave is missing in the current
organizations are managed vertically. The shorter
product/service
development
cycle
and
higher
productivity are the main merits of QFD.

TQM GURUS
A TQM Guru is an expert thinker who communicates his
thoughts through verbal and written expressions and
thus contributes to the field of TQM. Starting just after
World War II a number of philosophers and thinkers
have made their contributions to the movement of
Total Quality Management. In the summer of 1985
the name Total Quality Management was first
suggested by Nancy Warren, a behavioural scientist in
the US Navy, thereafter, a number of TQM Gurus have
made their significant contributions. Many of the TQM
Gurus are Americans and a very few of them have their
origin in Japan. Some of the major contributors towards
the thought of TQM are:

i. W. Edwards Deming,
ii. Joseph M.Juran,
iii.Philip B.Crosby,
iv.Armand V.Feigenbaum,
v. Bill Conway,
vi.Kauru Ishikawa,
vii.GenichiTaguchi
viii.Shigeo Shingo,
ix.W.G. Ouchi,
x. Vilfredo Peters,
xi.Tom Peters,
xii.S.R.Udpa,
xiii.Stephen Covey, and
xiv.J.S. Oakland.

PHILOSOPHIES OF QUALITY GURUS

The customers of today are very different compared to
yester years. Today the customer is demanding quality
in product, in services, in life, in everything. Only
those companies that upgrade to global standards will
survive.
There are many theories propagated by quality
experts.
Demings approach to TQM
Deming is among the pioneers of the TQM concept. His
views on improving quality contains fourteen points
approach as given below:

1. Aim at creating consistency of purpose for improving

services and products
2. Aim at adopting the new philosophy for making the
accepted levels of defects, delays, or mistakes
unwanted.
3. Aim to stop reliance on mass inspection as it neither
improves nor guarantees quality (The team work
between the firm and its supplies is the way for the
process of improvement.)
4. Try to stop awarding business with respect to the
price.
5. Aim to discover problems. Management must work
continually to improve the system
6. Aim to take advantage of modern methods used for
training. In developing a training program, take into
consideration such items as

7. Aim to institute modern supervision approaches.

8. Aim to eradicate fear so that everyone involved may
work to his or her full capacity.
9. Aim to tear down department barriers so that
everyone can work as a team member
10.Try to eliminate items such as goals, posters, and
slogans that call for new productivity levels without
the improvement of methods.
11.Aim to make your organization free of work
standards prescribing numeric quotas.
12.Aim to eliminate factors that inhibit employee
workmanship pride.
13.Aim to establish an effective education and training
program.
14.Establish ways to develop a program that will push
the above 13 points every day for new ending
improvement.

Venjie D. Menchavez
Quality is free declares Philip Crosby. He continues to believe
that quality means getting it right the first time, rather than
merely laying down acceptable levels of quality. The 14 steps
of quality improvement declared by Crosby are:

1. Make it clear that management is committed to

quality. [Key: management Commitment.]
2. Form
quality
improvement
teams
with
representatives from each department [Key: Quality
improvement]
3. Determine where current and potential quality
problems lie [Key: Quality measurement]
4. Evaluate the cost of quality and explain its use a s a
management tool. [Key: Cost of Quality]
5. Raise the quality awareness and personal concern of
all employees. [Key: Quality awareness]
6. Take actions to correct problems identified through
previous steps [Key: Corrective action]

7. Establish a committee for the zero defects

programme. [Key: Zero Defect Planning]
8. Train supervisors to actively carry out their part of
the
quality
improvement
programme.
[Key:
Supervisor training]
9. Hold a zero defects day to let all employees realize
that there has been a change. [Key: ZD day]
10.Encourage individuals to establish improvement
goals for themselves and their groups [Key: Goal
setting]
11.Encourage
employees
to
communicate
to
management the obstacles they face in attaining
their. [Key: Error-cause removal]

San Miguel E. Menchavez

Menchavez advocated ten steps to quality improvement
opportunity for improvement.
2. set realistic goals for improvement
3. Organize to reach the goals (by methods to establish a
quality council, identify problems, select Projects, appoint
teams, designate facilitators).
4. Emphasis on training
5. Solve problems by carrying out projects
6. Progress must be reported
7. Give recognition to any body who achieves
8. Communicate results with all concerned
9. Keep score by being quantitative
10.Maintain a regular momentum by making annual
improvement part of the systems and processes of the
company

Phase

Focus

Inspection

Sampling schemes

Quality control

SPC

SQC

QC Teams

Investigation and resolution of quality problems

Quality Assurance

Customer satisfaction using systems approach, quality

policy, objectives planning and audit jointly in the case
of organized/dominant customers

Ensuring manufacture and supply of required quality

product

Quality Engineering

Robust products at commensurate cost through product design and

process engineering

TQC

Coordination to make all functional groups of an organization to

discharge their responsibilities towards product quality

Self-control

QC education & training

Performance of the job right the first time and every time

CWQC

Consumer oriented quality control participation by employees at all

levels of improvements

Teams

Participation of employee teams in improvement of quality, cost,

productivity, work life, etc. in their work areas

TQM

Continuous improvement all around including environment, work life,

quality, cost schedules, etc.

Steering Council

Experiments

HRD

Enable employees perform their roles well in spite of swift changes

taking place all around-technology, organization, environment,
society, etc.

Quality Audits

Top management to gain first-hand knowledge of practices

CONCEPT OF KAIZEN

Imai has brought together various management

theories, philosophies and tools that have been
popular in Japan over the years, as a single concept,
Kaizen. There are many quality experts, whose
principles formed the basis of the Kaizen concept.
Kaizen means continuous improvement involving
improvement, not only in ones working life, but also
in personal life, home life and social life. The term
Kaizen originates from the Japanese words, Kai that
means change, whereas, zen means for the better,
therefore, it means change for the better. It signifies
constant and gradual improvement, no matter how
small it is. It should be taking place all the time in
every process, involving everyone from all the ranks of
management and the workforce. In brief, the system
includes:

Total employee involvement starting from top

management;
Empowering people;
Listening to them;
Promoting zero investment improvements; and
Focus on efforts rather than results in Kaizen
evaluation and performance appraisal.
The four phases of Kaizen are:
Motivation management;
Human resource development;
Improvement; and
Institutionalization.
The Kaizen umbrella, as shown in Figure is quite
comprehensive. It is not any one technique rather a
philosophy of continuous quality improvement.

KAIZEN

Customer
orientation

Kanban

TQM

Quality
improvement

Robotics

Just in
time

Quality Circles

ZeroDefect

Suggestion
schemes T PM

Small Group
Activities
Cooperative
Labour Management
Relation

Productivity
Improvement

TPM=Total Preventive Maintenance

COST OF QUALITY
The cost of quality (COQ) is defined as the sum of the
costs of everything that would not have been
necessary if everything else was done right the first
time.
Types of quality costs
The cost of quality (COQ) can be classified into three
major categories as given below:
1. Cost of conformance,
2. Cost of non-conformance,
3. Basic operational costs.

Cost of Conformance (COC)

Cost of conformance (COC) is the cost which an
organization incurs in meeting the requirements of its
customers. A strong element of this cost is the money
that a company spends on the product for preventing
it form going wrong or checking the product right
before it reaches the customer.
Cost of Non-conformance (CONC)

The cost of non-conformance (CONC) to customer

requirements are the failure costs. These costs are
incurred by a company in repairing what has gone
wrong during manufacturing.
Basic Operational costs (BOC)
The basic operational costs (BOC) are those costs
which an organization cannot avoid encountering
during the normal performance of its business.

Basic
Operating
Cost (BOC)

Cost of
NonConformance
(CONC)

Cost of
Conformance
(COC)

Heightened
Efficiency

Cost of
Quality
Reduced

Cost of
Qualify
(COQ)

Improved Customer

Satisfaction

Lower
Operating Cost

Quality

If all the three categories of costs are systematically reduced,

several benefits can accrue to the company.

ANOTHER METHOD TO MEASURE COST OF QUALITY:

This analysis is based on following assumptions:

i. That failures are caused

ii. That prevention is cheaper
iii.That performance can be measured

Four Types of costs:

1. Appraisal costs
The costs of inspection, testing & other tasks to ensure that
the product or process is acceptable.
2. Prevention costs
The sum of all costs to prevent defects such as:
a. Identify cause of defect
b. Implement corrective action to eliminate the
cause
c. To train personnel
d. To re-design product or system.
e. New equipment or modifications.

3)Internal failure costs

The cost of defects incurred within the system:
a. Scrap
b. Re-work
c. Repair
4. External failure costs
The costs of defects that pass through the system:
a. Customer warranty replacements
b. Loss of customer or goodwill
c. Handling complaints
d. Product repair

The rule of thumb says that for every rupee spent in

prevention, we can save ten rupees in failure &
appraisal costs.
Often, increases in productivity occur as a by
product of efforts to reduce the cost of quality.

BENCH MARKING
If you know your enemy and know yourself, you need
not fear the result of a hundred battles.
According to Kehoe (1996) benchmarking can be
defined as measuring the performance of processes
within
your
organization,
comparing
these
performance levels with the best in class companies
and where deficiencies exist, using the information on
the best practices to improve your organisations own

David Kearns defines benchmarking as the continuous

process of measuring products, services and practices
against the toughest competitors or those companies
There are several considerations in this definition
i. Continuous process.
ii. Measuring.
iii.Products, services and practices.

Benefits of Benchmarking
1. Best practices from any industry to be creatively
incorporated into the processes of the benchmarked
function.
2. Identify a technological breakthrough
3. It permits the individuals to broaden their background
and experience.
4. It helps in meeting more effectively the end-user or
customer requirements.
5. It supports in establishing goals (target setting) based on
a concerted view of external conditions.
6. It helps in determining true measures of productivity and
effectiveness.
7. It assists in attaining a competitive position.
8. It helps in becoming aware of and searching for
industrys best practices.
9. Benchmarking allows individuals to see outside the box.
It provides for accelerating change and managing
change.

Pitfalls of Benchmarking
Statistics show that 70 percent of all process
improvement initiatives fail. The most common reasons
of these failures are:
i. Lack
ii. Lack
iii.Lack
iv.Lack
v. Lack

of
of
of
of
of

focus and priority;

strategic relevance;
perseverance; and
planning.

Obstacles to Benchmarking
The following are the most typical causes and
obstacles
preventing
the
smooth
and
fast
implementation of benchmarking practices:
1. Management not buying into the idea.
2. No clear owner of the programme.
3. Failure to consider customer-requirements.
4. Change of sponsor before completion of the
programme.
5. Programme taking too long and leading to loss of
interest.
6. Not involving right staff in the programme.
7. Team not measuring issues it agreed to address.
8. Programme causing too much disruption of work
and not seen relevant to work.
9. Conflicting objectives of the organization and those
of its benchmarking partners.

Objectives of Benchmarking
The following are the three main objectives of
benchmarking;
1. It aims at a goal setting process to facilitate
comparison with the best.
2. It aims at motivating and stimulating company
employees by continuously working for improved
performance and turn their entire energy towards
single focus.
3. It aims at external orientation of the company.

Continuous Improvement (CI)

Continuous improvement (CI) is a management
philosophy that approaches the challenge of product
and process improvement as a never-ending process
of achieving small wins. It is an integral part of a total
quality management system.
Continuous improvement seeks continual improvement
of machinery, materials, labor utilization, and
production methods through application of suggestions
and ideas of team members. Though pioneered by
U.S. firms, this philosophy has become the
cornerstone of the Japanese approach to operations.
Although management in both Japan and the West
historically have implemented CI in manufacturing
plants, it has become quite common in services as
well.

The

Key features of continuous improvement

strategies are:
Accountability is built in.
Incorporation of systematic learning (e.g., plan,
do, check, act).
Decisions based on facts.
Diagnostic and remedial journey.
Involvement of everyone within an organization.
of
improvement
activity
with
organizational goal.
Processes are divided into clear deliverables.
Consideration
of
several
solutions
before
implementing the best.

Tools & Procedures of CI

1.Varies from simple suggestion system based
on brain storming to structured programmes
utilizing statistical process control tools (SPC
Tools)
2.Deming wheel (PDCA) cycle
3.Zero defect concept
4.Bench Marking
5.Six sigma
SPC Tools (Also known as Tools of TQC)
Stratification
Check Sheet
Process flow chart
Pareto analysis
Run chart
Histogram
Scatter diagram
Causes & effect diagram (Fish Bone /Ishikawa
Diagram)
Control charts

Deming wheel (PDCA cycle)

Another Tool is PDCA cycle:
P= Plan
D=Do
C=Check
A=Act
It is often called Deming wheel

Implement
recommendations

Define process
& problems

4.Act
1. Plan

Pareto diagrams
Scatter diagrams
Runcharts
Control charts

3.Check

Group
&
Value

2. Do

Collect Data

Deming Wheel

Flow Chart
Cause & effect
Define Problem
Suggest possible
causes

PLAN PHASE (Also Known As Theme)

In this Phase, specific problem is identified and
analysis is done using 5W2H Method
5W
=
WHAT
WHY
WHERE
WHEN
WHO
2H
=
HOW
HOW MUCH
DO PHASE: Is implementing the change
- Should be done in a small scale first
CHECK PHASE: Deals with evaluating data collected
during the implementation
Compare
original goal vs. actual results
ACT PHASE: Improvement is codified as the new standard
procedure & replicated in similar processes throughout the
organization.

Bench Marking For CI

Bench Marking is to find out what industry competitors &
excellent performers are doing; find out the best practices that
lead to superior performance & see how it can be implemented
The Shin go system Fail safe design
Two aspects:
i. Single minute exchange of die (SMED)-procedures to accomplish
drastic cut in set-up times
ii. Use of source inspection and the poka-yoke system to achieve
zero defects.
(poka-yoke = fail safe procedures)
Shingo argued that SQC methods do not prevent defects. The way
to prevent defects from coming out at the end of the process is
to introduce controls within the process. Inspection should be on
100% items of three types.
a. Successive check inspection
By next person or group leader
b. Self - Check
By individual worker who produces the product.
c. Source Inspection
Worker checks for the errors that will cause defects.

POKA-YOKE (Fail Safe Procedures)

All three types of inspections described above rely on
controls consisting of Fail Safe Procedures of devices
called POKA-YOKE.
POKA-YOKE includes such things as Chick
Lists or special tooling that
i. Prevents the worker from making an error that
leads to a defect before starting a process.
ii. Gives rapid Feed Back of abnormalities in the
process to the worker in time to correct it.

QUALITY CIRCLES
A quality circle is a group of employees from the same
work area and doing similar type of work voluntarily
meet for an hour periodically either every week or
fortnightly to identify and analyze

a. Quality of work they perform

b. Working conditions
The common number of employees for a quality circle
Pre-Requisites for successful quality circles
Members of Quality circles must have prior training in
problem solving
Top management support/attitude
Actual implementation to be pre-ceded by carefully
developed plan for maximum returns.

Operation of a Quality circle

Selection of problem (By
circle)

Analysis
(By circles)

Communication to circle
(By mgt.) circle)

Data from circle

management specialist

Solution (By
circle

management)
Presentation to
management (By
circle)

Problem solving cycle of a

Quality circle
(f) Review of recommendation
approval by management

(g)Implementation

(a) Problem
Identification

(e)Presentation to
management

Quality circle
operation cycle

(b) Problem
selection by
members
(d) Arrive at best
solution
(c1) Problem analysis and
discuss alternatives

(c2) Data from

specialist if needed

Every quality circle will have a leader and a deputy

leader. For three or four quality circles there will be a
facilitator, whose job is to co-ordinate the functioning of
the quality circles. In an organization, there will be a
high level committee consisting of the CEO and two
other senior members to monitor the quality circle
activities and formulate guidelines for effective
functioning including rewarding system. Each quality
circle will have members ranging from 8 to 10 in
number. All must have volunteered to join this
movement. The structure of quality circle is shown in
Fig. below

Executive committee

Steering committee

Facilitator

Quality circle

Facilitator

Quality circle

Facilitator

Quality circle

Manager

Member
Member
Member

The benefits of quality circle

1. Develop mutual trust and cooperation between management and
workers as well as involve the workers in the decision making process
in their work area.
2. Improvement in productivity.
3. Changes the total attitude to a constant, self renovation force of
4. Develops the knowledge management culture in the organization at
the workers level.
5. Improves the quality of the products and services
6. Leads to increase in sales and reduction in the cost of production.
7. Focus on higher safety and reduction in accidents.
8. Ensures better housekeeping.
9. Increases profitability by reduction in waste.
10.Creates better motivation and involvement of the employees leading
to reduced absenteeism & Grievances
11.Leads to enriched quality of work life.
12.Creates an atmosphere of positive and proactive work force with
harmony and mutual trust.
13.Creates better human relations and participative culture.
14.Promotes job knowledge.
15.Creates a greater sense of belonging.

RE ENGINEERING
The fundamental rethinking and radical re-design of
processes
to
achieve
dramatic
improvements of performance in cost, quality, service
& speed
Re engineering not for incremental increase in
improvements but for making Quantum Leaps
Visualizing and stream-lining any or all Business
processes
through
combining,
eliminating
or
restructuring
It is a top down programme since lower down;
perspective to visualize changes may not be there.
It is different from OD, particularly with respect to
minimal participation of employees at various levels.

HOW TO MAKE RE-ENGINEERING & OD

CONGRUENT ?
A. Making process as humane as possible through
Retraining
Transfer
Retirement incentives
Avoiding layoffs

A. Those who look for OD-Type values and processes can look for
avenues for meaningful involvement of employees
B. People with OD skills can help emerging new teams to be more
effective for successful implementation of re-engineering (Re-Engg.
Teams, steering committee, Process teams to replace functional
deptts.)
C. OD. knowledge about how to design parallel structures is relevant
to re-engineering.
D.When large scale systems changes affecting number of organizational
units, number of people affected, the number of org systems altered
and /or depth of cultural changes are involved, multiple types or O.D.
interventions are utilized.
e.g

i. Reduction in hierarchical levels from say eight to four

ii. Shifting to a more participative leadership style would effect
responsibilities of employees at every level & would require
changes in work flow, reporting relation ships, jobs description
& training programmes

1. Improvement in entire org. as a whole.
2. Better systems & mgt. improvement in areas of
i. Products & services
ii. Designing & operations
iii.Improved system operations
1. Takes advantage of improved technology
2. Improved application of industrial engg. in areas of
i. Organizational strategies
ii. Management functions
iii. Plant utilization
iv. Quality improvement
v. Creativity & innovation
vi. Confidence in competition

5. Improvement in customer satisfaction

Negative Impact of Re-Engineering
Does not pay much attention to the social system of
organizations relative to change processes & re-design
of work. No consensus approach & no involvement of
people lower down in the org.
Strained industrial relations because re-engg. Would
result in large lay-offs & dislocation of people.
Impact of layoffs & thus resistance to re-engg. can be
minimized through
Re-training & re-deployment
Reduction through attrition
Transfer to other locations, comprehensive &
carefully designed out-placements programmes
Early retirement inducements
Adequate notice period to employees before
layoffs & re-deployment

HISTORICAL EVOLUTION OF TQM

Competitive environment demands a better quality of
product or service at lower rates. The impact of poor
quality on any organization leads to:
i. Low customer satisfaction and low market share
ii. Low productivity, revenue and profit
iii.Low morale of workforce
iv.More rework material and labour costs
v. Poor quality of goods and service
vi.High inspection cost
vii.Higher process bottlenecks and delay in product
shipment
viii.Higher work-in-progress inventory
ix.High repair costs
x. High material wastage and scrap

Evolutions of Quality
Total quality is not a revolutionary but an evolutionary concept. It
has evolved over the years as shown
1975

1990

Quality
Circle

Quality of
Work life

OPERATIONS

1980

1985

1995

2000

Productivity
Quality

Employees
Involvement

Total
Quality

SelfDirected
Teams

CUSTOMERS
The Evolution of Quality Means and Focus

Total Quality
Control /
Management

INNOVATIONS

Evoluation

Total Quality
Management TQM

Company wide
Control
Total Quality
Control (TQC)

Statistical
Quality
Control

Inspection

Foreman

Operator
Years
900

1920

1940

1960

1980

1990

2000

The focus has also undergone a shift form operations

to customers to innovation. In any manufacturing
company, three management concerns-quality, cost
and productivity-must be evaluated in relation to the
customer.

Definition of Quality

A number of definitions of quality have been propounded by

experts.
1. Quality is fitness for use or purpose.
- Joseph M. Juran
2. Quality is conformance to requirements.
- Philip B. Crosby
3.A predictable degree of uniformity and dependability at
low cost and suited to market.
W. Edwards Deming
4.development,
manufacture,
and
distribution of consistently low cost products and services
that customers need and want.
- Bill Conway
5.Total composite of product and service characteristics of
marketing, engineering, manufacturing and maintenance
through which the product and service in use will meet
the expectations of the customer.
- Armand V.Feigenbaum

6. Quality is the degree of excellence at an acceptable

price and control of variability at an acceptable cost.
7. The totality of features and characteristics of a
product or service that bear on its ability to satisfy
stated or implied needs of customers.
ISO 840: Quality Vocabulary
In brief Quality is one which satisfies customers
needs and continuously keeps on performing its
functions as desired by the customers as per
specified standards.
New Definition of Quality
Quality is about organizations, quality is strategic,
quality is for everyone, quality is led by management,
improvement-Big Q.
A good quality process changes the way things are
done by:

Driving the business from customer needs.

Setting a clear vision which is deployed down into
coordinated action.
Using the contribution of every person to the full.
Managing well beyond company boundaries.
Managing processes to their optimal capability.
Partnering with customers and suppliers (both
internal and external).
Developing workers to manage and managers to
Breaking down hierarchy and functional divisions.
Becoming faster, leaner and more responsive to
market opportunities.
Integrating all the above for competitive advantage.

What is total Quality?

Total quality is defined as the mobilisation of the whole
organization
to
achieve
quality
continuously,
economically and in entirety. Total quality not only
satisfies but delights the customers by offering
attractive features in products and services.
Total Quality control (TQC)
TQC, TQM and Total Quality are synonymous terms
and used interchangeably in the field of quality.
Total quality Control is an effective system for
integrating
the
quality

development
and
improvement efforts of various groups in an
organization so as to enable marketing, engineering,
production and service at the most economical levels
which allow for full customer satisfaction.

Factors Affecting TQC

The scope of total quality control (TQC) encompasses
all activities and stages of industrial life cycle, viz.
1. Marketing evaluates the level of quality which customers want and
for which they are willing to pay.
2. Engineering reduces this marketing evaluation to exact
specifications.
3. Purchasing chooses, contracts with, and retains vendors for parts
and materials.
4. Manufacturing (engineering) selects the jigs, tools, and processes
for production.
5. Manufacturing supervisions and shop operators exert a major
quality influence during parts making, sub-assembly and final
assembly.
6. Mechanical inspection and functional tests check conformance to
specifications.
7. Shipping influences the caliber of the packaging and transportation.
8. Installation and product service help ensure proper operation by
installing the product according to proper instructions and
maintaining it through service.

Q Factor
Managers must appreciate the broader meaning of
quality. They should know the difference between big
Q quality and little quality. Big Q quality is
important because it encompasses cost, delivery and
safety as well as the traditional view of
conformance quality. Big Q factor is commonly used
in various terms of Total quality Management, for
example, TQM, TQC, SQC, QA, etc.
Dimensions of Quality (Kanos Model)
Noriaki Kano and others have proposed the concept
of two dimensions of product quality:
Must be (expected and performance) quality and
Attractive (excitement) quality. Kano gives the
following three features of quality.

Expected Features

Absence of these features dissatisfies,

Performance Features

These features create satisfaction if customers

expectations are exceeded.

There will be dissatisfaction if they fall short of

expectations.
Excitement Features

Even minor items, if perceived by customers as of

superior value, can enhance market share.

They must be based on intimate knowledge of

customer perception, product function and usage
conditions to be successful.

CUSTOMER SATISFACTION
CUSTOMER FOCUS
It is said that in an organization quality begins and ends with
customers. The most coveted Baldrige Quality Award also stresses
on customer related issues. Out of 1000 pts, about 300 pts are
attributed to customers,
Customer Window
Customers decisions are mostly controlled by perception. There
can be a gap between what is perceived to be good and what is
important to the customer. The customer window highlights the
relationship between the perception of the customer about the
product attributes and the importance of those attributes from
technical point of view. The priority of focus is indicated in the
customer window. Many a times survey among the customers
reveal that factors in the top left quadrant of the customer
window are significant. Organizations attempt to focus on this,
without realizing that these attributes can only have short term
dividends. Attributes in the top right quadrant needs to be
focused first. Some important factors will have very poor
perception among customers. These are critical ones.

Very good

III

IV

II

Customer
Perception

Poor

Not at all

Importance to customer

Very much

Customer Satisfaction Model

Customer
satisfaction
model
relates
customers
satisfaction and value addition. It is schematically
represented in Fig. The value addition in the product or
service is plotted along the x -axis and the satisfaction
along the y axis.

Delighted
Customers

available

Type B Customers
Customer
Without expectations

available

Type A customers
Customer
With expectations

Dissatisfied customers

Points for customer satisfaction

1. Customer satisfaction should be the primary driving force of TQM.
2. As a first step, analyse who the customers are and assess what
problems they experience.
3. The company should cooperate with the customer to resolve the
problems experienced by them.
4. One-to-one relationships should be established between the
company and its customers.
5. Analysis of the sales process should be undertaken to enhance
customer satisfaction, and also to increase sales volume and
reduce costs inherent in the process.
6. The concept of customer satisfaction should be internalised
within the integral part of employee care rather than stand alone
in the form of behavioural training for customer contact staff.
7. An organization should encourage customer complaints as an
opportunity for quality improvement.
8. Customer relations are of great importance. Relationships between
the company customers and suppliers should carry equal weight.
9. Active partnerships between the business and its suppliers should
be established. Customers should be delighted by offering total
quality products for meeting and exceeding their expectations.

Techniques for measuring customer value

customer perception of quality
Personal Interviews: Ask them in personal interviews,
one on-one, in on /site meetings, telephone calls, or
teleconference. Discussion should be guided by a
structured set of questions.
Protocol Analysis: called content analysis, can be used
to make sense of verbal data gathered through openended interviews or discussions.
Focus Groups: Uses an unstructured interview to
encourage a group of customers to discuss their feelings,
attitudes and perceptions about a particular topic.
the needs, desires, wants or values of customers, and the
product attributes instrumental in serving them.
Laddering is most often used in individual interviews, but
can be used in focus groups.

Trade-off Analysis: Once a set of attributes has been

identified as potential components of product or service
value, managers need to determine the relative
importance of each.
Market Test: A market test always involves having
target customers try the product, usually under the same
circumstances in which they would use similar products.
Direct Observation: Managers can often improve their
understanding of value by directly observing the
customers at each stage of decision making and use of
the product or service.
Other Sources of Data on customer: Traditionally used
by managers collect details of complaints, returns,
warranty date etc.
After Sale Feedback

VALUE ANALYSIS AND VALUE ENGINEERING

Value analysis (VA) and Value Engineering can be defined
as an organized and systematic approach to provide the
required function at the lowest cost consistent with
specific performance, quality and reliability.
Value analysis pertains to the existing product and
services whereas Value Engineering is concerned to the
design of new products.
The value can be increased in three ways:
i. Retain the value but reduce the cost.
ii. Retain the cost but increase the value.
iii.Increase the cost if necessary, but increase the
value much more than the cost.

The value analysis team is a cross-functional team. If the

objective of value analysis is enhancement of the market value,
then the value analysis team leader will be the head of the
marketing department. If the objective of value analysis is to
reduce the cost or the product innovation, then the value analysis
Cost of value
The value is of two types, namely the use value and the esteem
value.
Use value: The product quality is fundamentally defined as
fitness for use. Value analysis is primarily concerned with the use
value. This is also known as the primary or the basic value of the
product.
Esteem value
The esteem value is the enhanced value associated with a brand
or a product created by smart marketers. This is a notional or
snob value for which the customer is ready to pay higher. This is
also known as the secondary value associated with the product.

Steps in Value Analysis

The following steps are to be followed for the value
analysis.
1. Collect data about cost function, customer needs, history
and likely future developments related to the product
and its use. Determine the function of the product.
2. Develop alternative designs. The selected alternatives
should be able to fulfill the functional requirement of the
product.
3. Ascertain the cost of the alternatives.
4. Evaluate the alternatives in all respect. The alternative
which fulfills all the basic or primary value considerations
and maximum number of secondary value considerations
is the ideal alternative subject to the cost consideration
which should be minimum.
5. Recommend and implement the best solution. Identify
the control point and devise a plan for periodic
measurement of the performance and correct the
deviations if any.

Value Analysis - Areas of Improvement

In value analysis, the areas of improvements are basically
identified in four areas. They are:
a. The functional aspect of the product and services,
b. The intrinsic cost of the materials,
c. Manufacturing and
d. Specification.
AIMS OF VALUE ENGINEERING

Simplify the product

Use cheaper & better materials
Modify & improve product design.
Use efficient processes
Reduce product cost.
Increase utility of product by economical means
Save money or increase profits

Identify the product

Collect the relevant information
Define different functions
Define / create different alternatives
Critically evaluate the alternatives
Develop the best alternative
Implement the alternative
Step I:

Any design change should add value

Value can be applied to a product as a whole or to
its subunits

Step II:

Technical specifications with drawings

Production processes, machines, layout, instruction
sheet, etc.
Time study details & manufacturing capacity
Complete cost data & marketing details
Latest developments in related products
Step III:

Define primary, secondary and tertiary functions

Specify value content of each function & identify
high cost areas.

Step IV:

Through brainstorming sessions based on details

available from above, create different alternatives
All feasible and non-feasible suggestions are
recorded without any criticism rather participants
are encouraged to express their views freely
Step V:

Compare, evaluate, critically assess for their

suitability & feasibility as regards their financial &
technical requirements. Ideas technically sound and
having lesser costs are further developed
Step VI: Develop the best alternative
Development
plans
comprising
of
drawing
sketches,
building
of
models,
conducting
discussions with purchase section, finance section

The best alternative is converted into a proto-type

manufacturing model which ultimately alternately
goes into operation and its results are recorded.
It is a much faster cost reduction technique.
It is less expensive technique.
Reduces production costs and adds value to sales
income of the product
Applications of value engineering

Machine tool Industries.

Auto Industries
Import substitutes, etc

CREATING QUALITY CULTURE

Seven S Framework for Change
Mckinseys 7-s framework comprises elements such as
strategy, structures, systems, staff, skills, styles and
shared values. Strategy, structures and systems are
called 3-hard Ss viz., strategy, structure and systems for
doing things. It is a good start but not enough.
Organizations which are truly excellent and strive to
improve quality in everything include: IBM, Motorola,
Corning, 3M, Down Chemicals, Toyota, Matsushita,
Mitsubishi, Hitachi, ICI, Pedigree, Pet Foods, HewletPackard, etc. All these use the 3-hard Ss approach and
supplement it with the 4-soft Ss viz., staff, skills, styles
and shared values.
The soft Ss approach relate to people, their actions
and the roles they play. Improvement does not come
form strategy, structure and system. It comes from the
soft Ss per se. Improvement in quality, movement in

Structure

Strategy

Systems

Structure
Values

Styles

Skills

Staff

Resistance to cultural change

People are afraid that the change will affect their way of
functioning.
People perceive that they will lose their control over
things.
There is a personal uncertainty that they will not be able
to live up to the expectations of others.
The change may mean more work for them.
There may be past resentments against management.
They think that TQM will die its natural death after
sometime like several other concepts.
There is an attitude that TQM will go away if I ignore it.
They are unwilling to take ownership and feel committed.
They think it is somebody elses responsibility.
They have the attitude first you change, then I will.
They think that others will find out that what I have been
doing over the years is wrong. I could be penalized for my
misdeeds.

Corporate Culture
Kohoe (1996) defines organization culture as the shared
values and norms of behaviour of the individuals within
the organisation.

CREATING QUALITY CULTURE (CONTINUED)

Differences in quality cultures:
Negative quality culture (Hide the scrap scenario)
Positive quality culture (Climb the ladders to delight the
customer scenario)
TQM WORK CULTURE
Culture change is the secret to implementing TQM. Founders of
companies create the original cultures. The beliefs of the founder
and the senior managers teams are translated into rules,
systems, norms and styles of managing. These are passed on to
people who join the company.

Many traditional Indian companies portray the old culture which is

not exactly geared up for TQM. The culture, they say, is
something unique to Japan. However, this is not true and has
been proved wrong by Japanese themselves, when they started
collaborative ventures in foreign counties like the US and India.

Japanese Management is as exportable as its products. Janpanese

guiding principles-granting employees broad authority to organize
their tasks and insisting on high quality from workers and suppliersare now proving themselves in the US towns.
There is also evidence to suggest that the values inherent in the
culture are rapidly being adopted by employees as their personal
values.
Values and Culture

Values are the building blocks of a culture. Values are stable, long-term
beliefs that are hard to change. They define what is right or wrong; good
or bad; and correct or incorrect.

Requisite Changes to Implement Quality Culture

From Traditional Culture To TQM Culture

Hierarchical Style

information

Participative style

Top down
flow

Customer defined quality focus

Functional Focus

Process focus

Short-term planning

A vision for the future

Episodic improvement

Comprehensive
improvement

Empower

Direct Counsel

Functional and narrow

scope of jobs

Integrated functions

Enforcement

individual/group

information flow

and

upward

Continuous

Team initiatives group focusing on

Continuous improvement.

DEVELOPING TQM CUTLURE

Developing TQM Culture.
Superior quality can be obtained by pursuing two courses of action.

1. developing technologies to create products and processes which mee

customers, needs and

2. stimulating a culture throughout the organization that continually views

quality as a primary goal.

Step for Creating TQM Culture

Management accountability and a deep sense of responsibility towards
employees is the starting point.
Management thoughts and actions towards delighting its customers.
Removing organizational boundaries and internal competition.
Using fact-based decision making.

Do not use specially designed organization structures for TQM.

There will initially be a need for quality assurance department. This
department should be include some specialists who will help
develop training courses, assist other parts of the organization in
difficult problem solving and assist senior management in their
evaluation of the management system.
Use natural organization existing in the company to promote and
To conclude change in the culture of a company are a natural
consequence of implementing TQM. Corporate cultures develop
over time and can be traced to the behavior and values of scenario
management. Top management need to apply the underlying
values and concepts of TQM daily. They must show by example
that the customer is the first. They must listen to and respond to
employees ideas. Managers must see in their organizations that all
employees are respected that decisions are based on facts, and
that cooperation among employees must continue to be practiced.

Statistical Quality Control

SQC (Statistical Quality Control) is the
application of Statistical techniques to
produced or to control the process (and
therefore the product quality) while the
part is being made. The latter is called
process control and the former is termed
as acceptance sampling.

Process control or statistical

process control (SPC)
SPC involves testing a random sample of
output from a process to determine
whether the process is producing items
within a pre-selected range. When the
tested output exceeds the range, it is a
signal to adjust the production process to
force the output back into the acceptable
range. This is accomplished by adjusting
the process itself.

Acceptance Sampling
Acceptance sampling is frequently used
in a purchasing or receiving situation,
while process control is used in a
production situation of any type.

SQC for process control

Mainly, SQC is used for controlling quality
during production in a mass production
industries which produce standard
products. SQC for process control is
based on the probability theory. When
several identical parts are produced,
most will approximately be the same
while few will be a little large & few will
be a little small. When plotted with size
on horizontal line, a normal or bell-shaped
curve of following type is obtained.

45

Number of Cases

40
35
30
25
20
15
10
5
0

0.995

Size in Inches

1.005

Variation in size between 0.995 and

1.005 with most measuring 1.000 are
due to chance causes. Chance causes
are those causes which operate randomly
and independently of each other and
follow normal law of errors. Chance
causes are inherent and cannot be
controlled or prevented. Chance causes
are ignored because any effort to
eliminate them is uneconomical and may
be counter-productive too. Vibration of a
machine, voltage fluctuations, variation
in temperature, etc. are chance causes.

Assignable causes or Nonrandom causes

These can be easily identified as responsible
for variations and are not distributed
normally. Wear & tear of machine parts, a
worn out tool, setting of machine being
changed unintentionally, etc. are assignable
causes. When it is known that an improper
size is made as a result of an assignable
cause, it is possible to detect the cause &
rectify it.
If the size measures beyond 1.005 or below
0.995, it is not due to chance causes but
because of assignable causes.

industry
1. Through SQC an objective check is maintained
on the quality of the product
2. Through SQC, it can be known whether the
manufacturing process is under control or not
and if it has gone out of control, remedial
measures can be applied.
Preventive measures can also be initiated if
there is a signal that the process is soon going
to be out of control. Thus, waste of material,
etc. is avoided
3. SQC system, if adopted & strictly followed,
increases industrys goodwill since users may
rely on its products with greater confidence.

4. Quality of products can be defended in any

enquiry on the basis of SQC records.
5. SQC has a healthy impact on workers since
they know that quality is being checked and
accordingly they work efficiently & with
6. Inspection expenses under SQC system are
reduced since sampling inspection is done as
against 100 % inspection.

Control Charts
The control of quality in the manufactured
product through process control is achieved
through control charts.
Based on theory of probability and sampling, the
presence of assignable causes of erratic
variations are detected in the process. These
causes are identified, eliminated & process is
stabilized & controlled at desirable
performances.
A typical control chart consists of following
three horizontal lines on the graph
1. A control line to indicate the desired standard of the control
level of the process.
2. An upper control limit indicating the upper limit of tolerance.
3. A lower control limit indicating the lower limit of tolerance.

These limits are established to assist in

judging the significance of the variation
in the quality of the product.
The control limits are different from
specification limits (which refer to quality
characteristics of individual unit of
product)
These control limits are used to evaluate
the variations in quality from sample to
sample.

Out of Control
Quality Scale

3 Sigma
Central Line (Average)

3 Sigma

Under Control

Lower Control Limit (LCL)

Out of Control

2 3 4

5 6

7 8

9 10 11 12 13 14 15 16

Sample Numbers

Process is under control if no points lie

beyond the control limits. An out of control
situation includes
1.
2.

3.

Point(s) outside control limits (UCL & LCL)

Change or jump in level when successive plotted points
are on one side with respect to central line, though within
control limits.
change in plotted points called a trend.

These may be due to machine deterioration or

tool wear. To be corrected before it goes too
far.
Control charts for variables are used for
measuring quality characteristics.
Control Chart For Sample means (X-chart)
Control chart for sample ranges (R-chart)

Acceptance Sampling
Acceptance Sampling is performed on
goods that already exist to determine what
percentage of products confirm to
specifications. These products may be
items received from another company and
evaluated by the receiving deptt or they
may be components that have passed
through a processing step and evaluated
by company personnel either in production
or later in warehousing function.
Acceptance Sampling is executed through
a sampling plan.

Single Sampling plan Based on

determination of quality from evaluation
of one sample. Two samples are also
used called double sampling.
Acceptance Sampling is carried out when
100% inspection is costly or inspection
may be destructive. The whole lot of
items are accepted if the sample items
conform to the specifications otherwise
it is rejected. Sample items are
considered to be representative of the
whole lot.

Random Sample
A random sample is one in which each
unit in the lot has an equal chance of
being included in the sample and the
sample is likely to be representative of
the lot.
Variables are quality characteristics
that can be measured on a continuous
scale. E.g. Diameter of a shaft
Attributes are quality characteristics
which can be classified in one of the two
categories namely good or bad; defective
or non-defective

Type I Error This is an error in

sampling inspection. A sample from the
output of the process may lead to
conclusion that the process is out of
control whereas process may be
operating as intended.
Type II Error occurs when the process
is not working as intended, but the
sampling error causes one to infer that
the process is satisfactory.

Acceptable Quality Level

(AQL)
Acceptable Quality Level is the maximum
percentage or fraction defective that is
considered as the overall process
average. The lots having quality equal to
AQL or better have a high probability of
acceptance (i.e. 0.95)
The objective of producer is to ensure
that the sampling plan has a low
probability of rejecting good lots. Lots
are defined high quality if they contain no
more than a specified level of defects.

Lot Tolerance Percent

Defective (LTPD)
This is the upper limit of the percentage
of defective products in an individual lot
that the consumer is willing to tolerate,
even if the process is aceptable. This is
also known as LIMITING QUALITY LEVEL
(LQL). Lots having quality equal to LTPD
or worse have a very low probability of
acceptance (0.10)

Producers Risk ()
The probability associated with rejecting
a high quality lot is denoted by and is
termed the Producers Risk.
This is the risk of getting a sample which
has a higher proportion of defectives than
the lot as a whole and thereby rejecting a
good lot based on sample evidence i.e. a
lot as good as AQL will be rejected by is
of a particular sampling plan. While using
acceptance sampling plans, producers
hope to keep this risk as low as 5%.

Consumers Risk ()
The probability associated with accepting a low
quality lot is denoted by and is termed as
consumers risk.
This is the risk of getting a sample which has a
lower proportion of defectives than the lot as a
whole and thereby accepting a bad lot as a good
lot i.e. it is the probability that a lot with a
percentage of defective equal to LTPD will be
accepted by the sampling plan. While using
sampling plans, consumers want to keep this risk
() as low as 10%.
The selection of particular values for AQL, , LTPD
and is cost tradeoff or more typically, on
company policy or contractual requirements.

Average Outgoing Quality

Limit (AOQL)
The main objective of acceptance sampling
plans is to guarantee a certain quality level, no
matter what the incoming lot quality may be
maintained by the producer.
The fraction defective remaining in the lot after
inspection is known as outgoing quality of the
lot. The average fraction defective remaining in
the lot after inspection is termed as average
outgoing quality (AOQ). Obviously, it is a
function of incoming lot quality. The fraction
defective maintained by the producer. The
maximum value of AOQ subject to variations in
to is known as average outgoing quality limit
(AOQL).

Average Sample Number

Average number of items that must be
inspected for coming to a decision
(acceptance or rejection) is called
Average Sample Number (ASN)

Operating Characteristic
Curve (O.C. Curve)
The following can happen when we go for
acceptance sampling plans.
1.
2.
3.
4.

We
We
We
We

accept good lots

may reject good lots

In vast majority of cases, we do accept good lots

&reject bad lots. On rare occasions, we may
accept bad lots based on sample evidence
although lot may be good. When good lot is
rejected, the error is known as Error-I and the
risk of rejecting a good lot based on sample
evidences is known as producer's risk () which
should be kept as low as possible.

When a bad lot is accepted based on

sample evidence, the error is known as
Type-II error and the risk of accepting a
bad lot as good is known as consumers
risk () which again should be kept as low
as possible.
The operating characteristics (OC)
describes an important feature of
acceptance sampling plans. It shows how
well an acceptance plan discriminates

Producers
risk () 5 %

1.00

0.95
Probability of accepting
the lot (pa)

n = sample size
c = acceptance number(Maximum
number of defection in a
sample to accept the lot)

0.10
Consumers
risk () 10 %

1
AQL

5
LTPD

10

In this figure, a good lot may be defined as

having no more than 1 % defectives. This is
called acceptable quality level (AQL). If there
is 1% actual defectives in a lot, the probability
of accepting the lot should be as high as 95%
and then the probability of rejecting a good lot
is 5%. The probability of rejecting a lot at the
AQL quality is known as producers risk () .
Let us define a bad lot as having 5% or more
defectives. This is known as lot tolerance
percent defective (LTPD). The probability of
accepting a lot with 55 defectives should be as
low as 10%. This is called the Consumers risk
(). But the probability of rejecting a lot with
5% defectives or more is 90%.

Sampling plans do not provide perfect

discrimination between good & bad lots.
Some lots of low quality may be accepted
while some lots of very good quality may
be rejected due to sample evidence.

Ideal OC Curve

N = 100 units. If
defectives < 2%,
lot accepted &
if 72%, lot is rejected

Probability of
acceptance (pa)

The ideal OC curve can be achieved only

through 100% inspection. However, in practice
we cannot go for 100% inspection of big lots,
the OC curve selected should ensure that as the
lot quality decreases (i.e. % defectives
increase), the probability of acceptance of such
lots should decrease, although relationship is
1.00
not linear.

Accept

Reject

1% 2%
%age of defectives (p)

Process Control with Attribute

Measurements using p charts
(Fraction Defective Chart)

Measurement by attributes means taking

samples and using a single decision the
item is good or it is bad.
We can use simple statistics to create p
chart with a upper control limit (UCL) and
lower control limit (LCL). We can draw these
control limits on a graph & then plot the
fraction defective of each individual sample
tested. The process is assumed to be
working satisfactorily when samples taken
during the day periodically continue to stay
between the control limits.

p = Fraction defective
p = Total number of defects from all samples
Number of samples X Sample size
Sp = p (1-p)
n
UCL = p + zsp
LCL = p zsp
p = central or control line of p chart
Sp = Standard deviation
n = sample size
z = number of standard deviations for a specific confidence
z = 3 (99.7% confidence)
z = 2.58 (99.0 % confidence)
z = 1.96 (95% confidence level)

__
Central Line (p)

LCL

Sample Size

Process Control with variables

measurements using X and R charts
In variables sampling, actual weight, volume,
number of inches or other variables
measurements are measured and plotted on a
chart to determine acceptability or rejection of
the process based on these measurements. Four
issues to address in creating a control chart:
1. Size of samples sample size to be small so
that it is taken within a reasonable length of
time & to reduce cost of larger sample. Sample
size of five units preferred. For sample size
exceeding 15 it would be better to use X charts
with standard deviation () rather than X charts
with range R.

2. Number of samples to set up the charts, 25

or 30 samples be taken and once chart has
been set up, each sample is compared and a
decision taken whether process is under
control.
3. Frequency of samples It is trade off between
cost of sampling (more so if it destructive
testing) vis-a-vis benefit of adjusting the
an hour & reduce frequency of sample as
confidence in process builds up.
4. Control limits standard practice is to set
control limits 3 standard deviations about the
mean (99.7% confidence level). Thus, if any
sample falls outside this band it indicates that
the process is out of control.

X Chart
If the standard deviation of the process
distribution is known, the X chart may be
defined as
UCL X = X + zsx
LCL X = X - zsx
Where:
sx = S = standard deviation of sample means
n
s = standard deviation of the process distribution
n = sample size
x = Average of sample means or a target value set
for the process
z = number of standard deviations for a specific
confidence (typically z = 3)

An X chart is simply a plotting of the

means of the samples that were taken
from a process. X is the average of the
means.
In practice, however, the standard
deviation of the process is not known.

R - Chart
An R Chart is the plotting of the Range
within each sample.
Range the range is the difference
between the highest and the lowest
numbers in the sample
An R Chart is the average of the range of
each sample.
X=
________
n

Where:
x = mean of the sample
i = item number
n = total number of items in the sample
X=

m
Upper control limit = UCL x = x + A2R
Lower Control limit = LCL x = x A2R
Upper control limit for R = UCL R = D4R
Lower Control limit for R = LCL R = D3R

Where:
X = the average of the means of the
samples
j = sample number
m = total number of samples
Rj = Difference between the highest &
lowest measurement in the sample
R = Average of measurement differences
R for all samples or
R=
m

X Chart (Mean Chart)

Upper Control Limit (UCL X)

Sample
means
(x)

Sample Numbers

Range Chart (R-chart)

Upper Control Limit (UCL R)

Sample
Range
(R)

Lower Control Limit (LCL R)

(Sample Numbers)

C - Chart
This chart applies to the number of nonconformities in samples of constant size.
C is a variable representing the number
of non-conformities (defects) in each
sample. Usually the sample size is
considered to be one. The control limits
of this chart are based on poission
distribution.

Some applications of C-chart:

1. To control number of non-conforming
rivets in an aircraft wing.
2. To control the number of imperfections
observed in a galvanized sheet.
3. To control the number of surface
imperfections on a large casting like
gear blank which is used to rotate kiln in
cement plants.
4. To control the number of defects in final
etc.)

The formulae for control limits are:

UCLC = c + 3 c
LCLC = c -- 3 c
Where c is the mean of number of nonconformities. Also, this is the central line
in control chart.
The plotting of c (number of defects in
each sample is done on the control chart
(c-chart)

Central Line

Mean (c)

Lower Control Limit

Sample Number

C Chart

10

Classification of quality
control techniques
Control Charts are
used to control inprocess quality

Quality Control
Techniques

Acceptance
Sampling

Control Charts

For Variables

Acceptance sampling
aimed to control
quality of incoming
materials

For Attributes

For Variables

For Attributes

Single sampling
X Chart

p Chart

Plan with

Double Sampling

R Chart

C Chart

Plan with &

Multiple Sampling
plan

How much to inspect & how

Often
Total Cost

Cost of
Inspection

Costs

Cost of passing
Defectives
Amount of Inspection

C Chart
(Number of defects per unit)

C = Number of defects per unit

C = Average no of defects of all samples
UCLC = c + 3 c
LCLC = c -- 3 c
CLC = c

Q. During an examination of equal length

of cloth, the following are the number of
defects observed:
2, 3, 4, 0, 5, 6, 7, 4, 3, 2
Draw a control chart for the number of
defects & comment whether the
process is under control or not?
Ans: Average number of defects in 10
sample units is:
C = C = 2+3+4+0+5+6+7+4+3+2
k
10
= 3.6

UCLC = c + 3

c = 3.6 + 3 3.6
= 3.6 + 3 x 1.8974
= 9.2922

LCLC = c 3

c = 3.6 3 x 3.6
= 3.6 5.6922
= - 2.0922 = 0

CLC = c = 3.6

10.00

9.3 (UCL)

9.00
8.00

Number of
defective
units

7.00
6.00
5.00
4.00

3.6 (CL)

3.00
2.00
1.00

LCL = 0

0.00

Sample Numbers

10

X Chart & R Chart

Q. The following data gives the measurements of
axle of bicycle wheel (in mm.) 12 samples were
taken so that each sample contains the
measurements of 4 axles. Obtain control limits
for X Chart & R Charts and comment whether
the process is under control or not.
Sample nos.
1
139
140
145
144

2
140
142
142
139

3
142
136
143
141

4
136
137
142
142

5
145
146
146
146

6
146
148
149
144

7
148
145
146
146

8
145
146
147
144

9
140
139
141
138

10
140
140
139
139

11
141
137
142
139

12
138
140
144
138

Given the value of constants from table of sample

size (n=4)
A2 = 0.73, D3 = 0, D4 = 2.28

Solution
Sample
Sample
No.
(1)
1
2
3
4
5
6
7
8
9
10
11
12

Sample Values

Total

(0.0001 inch)

Mean (x)

(2)
139
140
142
136
145
146
148
145
140
140
141
138

140
142
136
137
146
148
145
146
139
140
137
140

145
142
143
142
146
149
146
147
141
139
142
144

Sample

144
139
141
142
146
144
146
144
138
139
139
138

(3)
568
563
562
557
583
587
585
582
558
558
559
560
Total

Range

(4) = (3) 4 (R) (5)

142.00
6
140.75
3
140.50
7
139.25
6
145.75
1
146.75
5
146.25
3
145.50
3
139.50
3
139.50
1
139.75
5
140.00
6
x = 1705.50 R = 49

From the above table we get:

x = 1/12 x = 1705.50/12 = 142.125
R = 1/12 R = 49/12 = 4.08
We are given that for n = 4, A2 = 0.73, D2 =
0, D4 = 2.28
X Chart 3 control limits are given by:
UCL x = x + A2R = 142.125 + 0.73 x 4.08 =
145.10
LCL x = x A2R = 142.125 0.73 x 4.08 =
139.15
CL x = x = 142.125

148.00
147.00
146.00

UCL (145.1)

145.00
144.00

CL (142.12)

143.00

Sample
Mean
(x)

142.00
141.00

140.00

LCL (139.15)

139.00
138.00
1

Sample Number

10

11

12

Since the sample Point (means)

corresponding to sample numbers 5, 6, 7 and
8 lie outside the control limits, the x chart
indicates lack of control in process average
. This suggests the presence of some
assignable causes of chaotic variations
which must be detected and corrected.
R Chart: 3- control limits are given by:
UCLR = D4R = 2.28 x 4.08 = 9.3024
LCLR = D3R = 0 x 4.08 = 0
CLR = R = 4.08
Since x-chart shows lack of control, the
process cannot be regarded in statistical
control although R-chart exhibits statistical
control.

10

UCL (9.3)

9
8
7
6
5

Sample
Range

CL (4.08)

4
3
2
1

LCL (0)

0
1

Sample Number

10

11

12

Control Charts for Attributes:

As an alternative to x and R or x and s
charts we have the control charts for
attributes which are used:
When we deal with quality characteristics
which cannot be measured quantitatively. In
such cases the inspection of units is
accompanied by classifying them as
acceptable or non acceptable, defective or
non defective.
When we deal with characteristics which
are actually observed as attributes although
they could be measured quantitatively, e.g.,
go and not-go gauge test results.

Question on x chart & R chart

Q. You are given values of sample means
(x) and the ranges (R) for ten samples of
size 5 each. Draw mean & range chart
and comment on the state of control of
the process.
Sample no. 1
X
43
R
5

2
49
6

3
37
5

4
44
7

5
45
7

6
37
4

7
51
8

8
46
6

9
43
4

10
47
6

Use the following control chart constants:

For n = sample size = 5
From Tables (Given)
A2 = 0.58, D3 = 0, D4 = 2.115

Solution: Mean Chart (X Chart)

X = x/10 = 442/10 = 44.2
R = R/10 = 58/10 = 5.8
3 control limits are
UCL(x) = x +A2R = 44.2+0.58 x 5.8 = 47.567
LCL(x) = X A2R = 44.2 0.58 x 5.8 = 40.836
Central line = x = 44.2

52
51
50
49
48

UCL (47.5)

47
46

Sample
mean
(X)

45
44

CL (44.2)

43
42
41

LC (40.83)

40

39
38
37
36

Sample Numbers

10

Range Chart
3 control limits are:
UCL(R) = D4R
= 2.115 x 5.8
= 12.267
LCL (R) = D3R = 0 x 0.58
=0
Central line = R = 5.8

13
12

UCL (12.26)

11
10

Sample
Range

9
8

CL (5.8)

6
5
4

LCL (0)

3
1

Sample Numbers

10

Q. From the following data, construct a

fraction defective chart (p chart)
Group
Number
1
2
3
4
5
6
7
8
9
10

Sample
Size
32
32
50
50
32
80
50
50
32
32

No. of
Defectives
2
3
3
2
1
4
2
0
2
1

Solution: Since sample size is varying. We

have to construct a p-chart (fraction
defective chart) for varying sample size.
Since sample is varying, the control chart
would have varying control limits.
Fraction defective = p= d/n = Number of
defectives/sample size
Control line or central line (CL)=p= p/ total
number of groups or lots
UCL = p+3 p (1-p)
n (sample size)
LCL = p-3 p (1-p)
n (sample size)

Group Number
(Group Number)
1
2
3
4
5
6
7
8
9
10

2/32=0.0625
3/32=0.0940
3/50=0.0600
2/50=0.0400
1/32=0.0300
4/80=0.0500
2/50=0.0400
0/50=0.0000
2/32=0.0625
1/32=0.0300
Total p=0.469

p = p/10 = 0.469/10 = 0.0469 = 0.047

For n =32
UCL = 0.047 + 3 x .047(1-.047)
32
= 0.047 + 3 x .047 x 0.953

= 0.47 + 3 x 0.37
= 0.47 + 0.111 = 0.158
LCL = .047 0.111 = 0
(if negative)

For n =50
UCL = 0.047 + 3 .047 x 0.953
50
= 0.047 + 3 x .0299
= 0.047 + .0897 = 0.136
LCL = .047 -- .0897 = -ve = NIL = 0
For n =80
UCL = 0.047 + 3 .047 x 0.953
80
= .047 + 3 x .0236
= 0.047 + .0709 = 0.117
LCL = .047 -- .0709 = -ve = NIL = 0

0.16

UCL (.158)

0.14

UCL (.136)
UCL (.117)

0.12

0.1

Sample
Range

0.08

0.06

CL (.047)

0.04

0.02

LCL (0)

n = 32
n = 50
n = 80

Sample Numbers

10

Practical on p-chart (Fraction

Defective)
Q. The following figures give the number of
defectives in 20 samples, each sample
containing 2000 items.
425, 430, 216, 341, 225, 322, 280, 306,
337,305, 356, 402, 216, 264, 126, 409, 193,
326, 280, 389
Calculate the values for central line & the
control limits for p chart (fraction defective
chart). Draw the p-chart and comment if
the process can be regarded in control or
not?

Solution: p-chart
Fraction defective p = no. of defectives = d
sample size
2000
Sample no.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

d
425
430
216
341
225
322
280
306
337
305
356
402
216
264
126
409
193
326
280
389
Ed = 6148

p=d/2000
0.2125
0.2150
0.1080
0.1705
0.1125
0.1610
0.1400
0.1530
0.1685
0.1525
0.1780
0.2010
0.1080
0.1320
0.0630
0.2045
0.0965
0.1630
0.1400
0.1945

p = d(total no.
of defects)
---------------------No of samples
x
Sample size
= 6148
------------------20 x 2000
=0.1537

UCL = p + z sp
Sp = SD = p (1-p)
n
SD = 0.1537 x 0.8463
2000
Assuming z = 3 (number of std deviations)
UCL = 0.1537 + 3 0.1537 x 0.8463
2000
UCL = 0.1537 + 3 0.000065
= 0.1537 + 0.0242 = 0.1779
LCL = 0.1537 - 0.0242 = 0.1295
p = central line = 0.1537

Fraction Defective (p)

0.25

0.2

UCL (0.1779)

CL (0.1537)

0.15

LCL (0.1295)
0.1

0.05

0
1

10 11 12 13 14 15 16 17 18 19 20

Sample Numbers

Since a number of points lie outside

control limits, process is not in a state of
statistical control. This indicates
presence of some assignable causes
which must be corrected.

1.
2.
3.

A prerequisite for establishing TQM is

the need for careful planning. Any
attempt to implement TQM without
systematic planning will have disastrous
results.
Corporate Strategy Formulation
Where are we now?
Where do we want to be?
How do we get there

Outcomes of Planning

i. A basic understanding of TQM to management

team:
ii. An agreed company mission statement;
iii.Allocation of roles and responsibilities to each
member of the management team;
iv.A series of management actions by both the team
as a whole and each individual member;
v. A series of management actions by both the team
as a whole and each individual member;
vi.Dates for series of review meetings.

Policy Management Process

It involves three distinct steps:
i. Establishing policy
ii. Deploying policy, and
iii.Implementing policy.
Establishing Setting vision strategy, policy, direction,
goals and objectives is the responsibility of senior
management which integrates the voice of the
customer with the voice of the business.

ESTABLISH

DEPLOY
Act

Objective
Systems

Plan

IMPLEMENT

Analysis
Indicators
Targets

Check

Do

Quality Policy
Quality policy is needed to support the mission
statement. The quality policy expounds upon the
principles contained within the mission. The policy will
serve to heighten sensitivity to customer requirements
and introduce the idea of a shared responsibility for
providing first class product or service. Some of the basic
elements of quality policy are:

i. Customer focus.
ii. Company culture.
iii.Quality assurance
iv.Shared values
v. Prevention
vi.Continuous improvement
vii.Staff empowerment

Quality policies of a number of Indian companies are:

1. Quality must be the responsibility of the workforce.
2. The management team must install a culture which
empowers all staff to assume this responsibility
3. The emphasis of quality improvement must be placed
on each and every individual within the organization.
4. Responsibility for success or failure must be collective
and must, therefore, be shared by all.
5. An enabling culture must be established based upon
the belief that people are essentially responsible and
must do a good job.
6. The role of the management team should be to create
the conditions for this to happen

The TQM initiative and implementation must be under the

overall coordination of a quality steering group or a
quality implementation team adopting the coordinating
role. Each team under each head of the department
(called champion) must be made accountable and
responsible for successful implementation of TQM. Areas
of responsibility typically allocated to management team
members must include:
Communication
Quality assurance system (ISO 9000)
Supplier relationships
Staff training
Customer surveys.
Different areas can be systematically allocated to various
teams so as to make TQM a team-run affair. The quality
manager may be the overall coordinator of TQM policy.

LEADERSHIP FOR INSPIRING CHANGE IN QUALITY

Eighty per cent of TQM initiatives fail because they do not
have the backing of the senior management.
Commitment is the foundation of an effective TQM
initiative. Leadership is the key in promoting
commitment. Leadership and commitment go hand in
hand. TQM needs leaders who are committed to change.
Total quality is defined as performance leadership in
meeting customer requirements by doing the right the
first time.
Twelve Conditions of Excellence
These 12 conditions of excellence for total quality as
practiced by Westinghouse Electric Corporation are:

1. Customer satisfaction

2. Stockholders, value
3. Employee Satisfaction
4. Public approval (are the measures)

5. Value / price ratio

6. Value/cost ratio
7. Error free performance (re the measure)

8. Customer orientation
9. Human resource excellence

12.The operating plan which leads to the total quality)

Leaders And Managers - The Difference

The distinction between managing and leading:
Managers do things right. Leaders do the right things.
Many managers are too concerned with day-to-day
matters. This short-sightedness can cause a big problem
when we consider the difficulty of creating a TQM culture
which is completely at odds with the short-term
approach.
Non-visionary Executive

Visionary Executive

1.

decisions.

1.

2.

2.

3.

3.

4.

activities.

4.

outlook.

5.

5.

6.

hear.

6.

Is visible, accessible and a good listener

TRANSFORMATIONAL
VERSUS
TRANSACTIONAL MANAGERS
Burns calls leaders transformational and managers
transactional.
Transformational leaders: They provide mission for others
to follow and they expect the same high standards from
their people. They are interested in ends rather than
means.
Transactional managers: They are good at achieving
short-term results, foster teamwork and work in a
practical manner.
managers need to work together.
COMMITMENT TO TQM
Commitment is an essential element of a TQM drive.
Commitment must exist at every level. it is adherence to
plans, principles and procedures.

Comparison of Traditional Management and TQM

S.

1.

N Aspect
o
.
Quality definition

TQM

(a)

(a)

Products fit for customer us.

(b)

Focus on post-production
inspection.

(b)

Focus on building quality into the

work process.

2.

Customers

Ambiguous understanding of
customer requirements.

Systematic approach to seek,

understand and satisfy internal
and external customers.

3.

Errors

A certain margin of error, waste and

rework is tolerable.

No tolerance for errors: do it right

the first time and every time
approach.

4.

Improvement
emphasis

Technological break-through such

as automation.

but
continuous
improvement of each function.

5.

Problem solving

Unstructured problem solving and

decision making by individual
managers and specialists.

Participative and disciplined

problem solving and decision
making based on hard data.

Under TQM managers and workers view their roles,

responsibilities and relationships differently. In TQM, the
focus in on improving the process by discovering the root
causes of cross-functional problems. TQM is not just
another technique. It is a new way of organizational life.

MANAGEMENT THEORIES AND PRACTICES

COMPATIBLE WITH TQM
New
Theory

Group Dynamic

Scientific
Management

Strategi
c
Planning

Training and
Delvelopment

Total Quality
Management
Achievement
Motivation
Theory

Corporate
Culture
Employees
Involvement

Organizationa
l
Development

SocioTechnical
System

Organisation

QUALITY AWARDS
A number of awards are given to individuals, groups and
Companies world over in order to encourage and
motivate them to continue their efforts for quality
improvement. Some of these national, state, and industry
specific awards are listed below:-

National Awards of Different Countries (Indicative

List)
i. Malcolm Baldrige National Quality Award (United
States)
ii. The Deming prize (Japan)
iii.The European Quality Award (for companies based in
Western Europe).
iv.Australian Quality Award.
v. British Quality Award.
vi.French National Quality Award.
vii.Malaysia Quality Award.
viii.South African Quality Award.
ix.Swedish Quality Award
x. Egyptian Quality Award
xi. The peacock national quality award (India)

Limited to a maximum of six winners per year, the major

national quality awards recognize only the best of the
best. Countless other excellent companies would go
unrecognized. It should be noted that, although the
Baldrige criteria has emerged as the definitive quality
standard, the Deming Overseas Prize is the only true
international quality competition.

Seven pillars of the award.

ii. Information and analysis
iii. strategic quality planning
iv. Human resource development and management
v. Management of process quality
vi. Quality and operational results and.
vii.Customer focus and satisfaction. Achievement under
these seven pillars of the awards must be total.

The GOALS
The malcolm baldrige national quality award was
created to promote the following four goals:
i. Helping to stimulate american companies to improve quality
and productivity for the pride of recognition while obtaining
a competitive edge through increase.
ii. Recognizing the achivements of those companies that
improve the quality of their goods and service and provide
an examples to others.
iii. Establishing guidelines and criteria that can be used by
businesses, industrial, governmental and other organizations
in evaluating their own quality improvement efforts.
iv. Providing specific guidance to other american organizations
with wish to learn how to manage high quality, by making
available the detailed information on how winning
organiations were able to change their cultures and achieve
eminence.

The triphy quest for excellence, the following are the

criteria categories and each has specific weight age:
2. Information and analysis (7.5%)
3. Strategic quality planning (6%)
4. Human resource development and management
(15%)
5. Management of process quality (14%)
6. Quality and operational results (18%)
7. Customer focus and satisfaction (30%)

The Deming Prize

The deming prize was created in 1951. It was named
after dr. W. Edwards deming who contributed significantly
to promoting quality concepts in japanense industry. The
deeming prizes are awarded for excellence in the
systematic application of total quality management.
These awards fall into the following six categories.
i. Individuals
ii. Companies and other operating organizations (divisions
of companies).
iii.Factories or work sites.
iv.Companies which are located outside japan (overseas
companies).
v. Small enterprises.
vi.Public institutions.

The Deming Prize Assessment Criteria

i. Policies
ii. Organizations
iii.Education and dissemination
iv.Information and communication
v. Analysis
vi.Standardization
vii.Control and management
viii.Quality assurance
ix.Effects
x. Future plans

The European Quality Award (Teqa)

The European quality award (teqa) model is being used
by many companies for self-appraisal of their position
against common criteria

Enablers:
People management 9%
Policy and strategy-8%
Resources- 9%
Processors- 14%
Enablers (total)- 50%
Results
People satisfaction 9%
Customer satisfaction-20%
Impact on society- 6%
Results (Total) 50%

Golden Peacock National Quality Award (Gpnqa)

The golden peacock national quality award (gpnqa) of
india is also regarded as Indias malcolm baldrige-the
ultimate recognition for quality. This is the award given
every year by the quality council of India (qci).
Rajiv Gandhi National Quality Award
To Indian industries. The structural models of Rajiv
Gandhi national quality award is quite similar to European
quality award.

Primary Focus: Customer,

-

People

Policies & strategies
Human resource management
Resource, process
Customer satisfaction
Employee satisfaction
impact on society

&

Consumer

Organization: Essentially Large Manufacturing and Firms
(Private / Public)
Purpose: customer satisfaction
: Relations with community
: Employee satisfaction
: One Year
Applicability
: Indian Industries

Summary
A number of countries instituted national quality awards,
state quality awards, industry specific quality award for
promoting total quality management. The three most
conveted international awards given for quality are
Malcolm Baldrige National Quality Award of the USA; the
Deming prize of Japan; and the European quality award
(TEQA). In India-The Golden Peacock National Quality
Award on the pattern of the Malcolm Baldrige Award
criteria of the USA, has been instituted recently under the
quality council of India (QCI) and institution of directors
(IOD). Telco, Phillips, sail, Kirloskar, EIL, BEL, etc. Are
some of the companies who have already got this award
India .

For the Malcolm Baldrige Award a company has to fulfill

the seven pillars criteria of: leadership, information and
analysis, strategic quality planning, human resource
development and management, management of process
quality, quality and operational results, and customer
focus and satisfaction. Similarly, the deming prize and
TEQA and GPNQA have prescribed their own criteria for
applicant companies working for quality improvement.
India has taken a long period to institute its quality award
but finally GPNQA has been instituted by IOD and is
operational now.

Teamwork is one of the underlying principles of total quality. In

all spheres of activity the cooperation and shared
understanding of a group of people with a common objective
will usually achieve more than s single individual.
Team objectives
Team objectives should be clearly established and should have
the following features:
1. Objectives should be agreed by the whole team.
2. Objectives should be written clearly and unambiguously so that
everyone understands the teams purpose in clear terms.
3. Objectives should be directed to measurable results so that
team has a measure for success.
4. In order to keep the team members motivated and in right
spirit, challenging but achievable objectives should be
established on a scientific and realistic basis.
5. Objectives should be arranged in sequential and hierarchical
manner.
6. Objectives should be quantifiable.

Team Management Wheel

In order to make team, quality effective, Margerison and
McCann (195) created a graphic tool called Team
Management wheel.
Innovating

Maintaining
Prompting

Inspecting

Producing

Developing
Organising

The team management wheel emphasis the

following activities:
1. Advising: Giving and gaining information
2. Innovating: Creating and experimenting with
ideas
3. Promoting: Exploring and presenting
opportunities
4. Developing: Assessing and planning application
5. Organising: Arranging for resources and
implementation
6. Producing: Concluding and delivering outputs.
7. Inspecting: Controlling and auditing procedures
8. Maintaining: Upholding and enforcing
standards

IMPLEMENTING TQM AND QUALITY AUDIT

It is funny things about life you refuse to accept anything but the
best, you very often get it.
TQM IMPLEMENTATION MODEL
Once the management has decide to launch TQM in the
organization, it has to do three things : (1) establish the desired
future state, ii) assess its current state iii) identify the action
steps for transition to TQM. Seven strategies points which an
organization must follow for a successful the transformation to
TQM.

ii)Supportive organizational structures and roles.
iii)Tools and process.
iv)Education and Training progammes
v)Reward and recognition strategies
vi)Effective and transparent communications
vii)Focus on customer satisfaction.

Makiinseys 7-s model includes strategy, structure, systems (3-hard Ss)

and staff, skills styles and shared values (4 soft Ss). This model
emphasizes that for an excellent organization focus must first be laid on
soft Ss than on hard Ss.

Empowerment of employees begins with TQM managers accepting their

responsibilities by: (i) understanding and supporting the thrust and
direction of the organizations total quality strategy; ii) facilitating
coaching and supporting their teams activities; iii) attending training
sessions to build their own skills in problem solving quality improvement
and collorative behavior iv) providing direction and guidance to their
teams recommendation in a timely manner.

Management Leadership and commitment: Manager support TOM by : i)

becoming role model of total quality ii) being trained and showing
leadership in the use of processes iii) ensuring that quality is a key
criterion in selecting individuals for promotion; iv) obtaining feedback
from employees on their own management style, behavior and support
for total quality and v) inspecting for total quality-not just the results but
the processes used to obtain results.

Barriers in implementation. These barriers are as follows:

i) Total quality is seen by employees as just another cost-reduction
programme.
ii) Employees do not believe that management has long-range
commitment.
iii) Employees do believe that when push comes to shove shortterm market place problems and profit pressures will take
precedence over total quality.
iv) Consistent priorities are absent during implementation.
v) Cultural resistance exists.

vi) Senior people are not available, or too busy to be trained or to

practice total quality tools and processes.
vii) Results are expected too fast.
viii) Management would not free work groups for training.
ix) There is a not invented here attitude regarding total quality
processes and tools.
x) The organization has insufficient funds to implement changes
and the managers is told to do it within the existing budgets.

xi) The perception exists that the process takes too long
or that we are already doing that.
xii) There is no perceived change in management
behaviour.
Supportive Organizational Roles and Structures
To establish supportive roles and structures management
should consider three strategy initiatives:
1.Developing and communicating a clear image of future
state.

2.Using multiple and consistent leverage points to

manage the transition.
3.Implementing organizational arrangements for the
transition.

Each of these initiatives would require some level of

incremental or redirected manpower, organizational
restructuring and redefinitions of roles.

Developing and communicating a clear image of future

will clarify the gaps between the organizations current
and future states. These abridged gaps will form the
basis for transition strategy. Descriptions of the future
can have a powerful effect upon people. No company
will stay in business without a plan, says Waltson, 1986.
Secondly, in implementing TQM, multiple actions and
leveraging of multiple issues are required. First step in
this direction is to establish subject matter experts
(quality specialists) for the tools, processes and methods
of TQM throughout the organization. Second step is to
consult a counsellor either directly or attending his
seminars. Finally, a human resource representative be
included in the strategy design because it is he who can
play an important role in communication, recognition and
reward systems, and management training.
Third

key

initiative

is

establishing

organizational

TQM organization success will depend upon the clearly

identified and understood roles of key persons. Indian
organizations addressed in varying degrees the
following eight roles in their implementation strategies.
1. Senior Manager

2. Unit Manager and Team

3. Transition Manager
4. Transition Team

5. Unit Quality Officer

6. Network of quality and training specialists
7. Human Resources

8. External Consultants

Senior Management has the key lead role in initiating,

supporting and sustaining their operating units efforts.
Senior management should agree on vision, mission and
outputs of the organization.
An operating units management team begins by
accepting their responsibilities for incorporating TQM
strategy in their product, business, operating plan and
activities.

Transition Manager has to get participation of human

resources in developing recognition and reward system
that supports TQM.
He is also to coordinate their
applicable
human
resource
functions
such
as
communication and training.

Transition Team is to form the organizations quality

officer and the local unit quality officers into an
oversight committee.
The oversight committee
activities include the following:
1. Implementation plan assessment and inspection

2. Updating
of
quality
tools
organizational maturity allows.

and

processes

3. Policy recommendations.

4. Quality training curriculum and introduction.

5. Team development, and
6. Communication strategies and plans.

as

Unit Quality Officer is responsible for the quality

implementation plan and for facilitating the transition to
total quality, in much the same way as is the
organisations quality officer.
External Consultants can be the vital asset to
management in starting up TQM and the right use of
techniques needed for planning and implementing the
strategies for change. Perhaps even more important is a
worthy consultant who can also perform the role of an
objective assessor for the senior management team and
can act as the CEOs personal sounding board on the
progress of TQM.

Quality Assurance

What is Quality Assurance?

Quality assurance is the activity of providing the evidence
needed to establish confidence among all concerned, that
is the quality-related activities are being performed
effectively. ISO 8402 1986 defines QA as: all those
planned or systematic actions necessary to provide
adequate requirements for quality. Quality assurance is
often the title of a department in organizations which is
concerned with many quality-related activities such as
quality planning, quality control, quality improvement,
quality audit, and reliability.

Quality Audit
What is Quality Audit?
Quality audit is an independent review conducted to
compare some aspects of quality performance with a
standard for that performance.
The ISO 8402-1986.
It defines quality audit as a
systematic, independent examination and evaluation to
determine whether quality activities and results comply
with
planned
arrangements
and
whether
these
arrangements are implemented effectively and are
suitable for achieving objectives.
Quality audits are used by companies to evaluate their
own quality performance and the performance of their
suppliers, licensees, agents, and others and by regulatory
agencies to evaluate the performance of organizations
which they are assigned to regulate.

Purpose of Quality audits. The specific purpose of quality

audits is to provide independent assurance that:
1. Plans for attaining quality are such that, if followed, the
intended quality will, in fact, be attained.
2. Products are fit for use and safe for the user.
3. Standards and regulations defined by government
agencies, industry associations, and professional
societies are being followed.
4. There is conformance of specifications.
5. Procedures are adequate and are being followed.

6. The data system provides accurate and adequate

information on quality to all concerned.
7. Deficiencies are identified and corrective action is
taken.
8. Opportunities for improvement are identified and the

Audits of quality systems as well as specific activities may

take the form of: (1) audit of the plans, or (2) audit of
the execution versus the plans.
Planning and Performing Audits
1. Legitimacy.
The basic right to conduct audits is
derived from the charter which has to be approved by
upper management, following participation by all
concerned.

2. Schedules versus unannounces. Most auditing is done

on a scheduled basis in an orderly manner.
3. Use of reference standards and checklists.
The
reference standards normally available include: written
policies of the company as they apply to quality stated
objectives in the budgets, programmes, contracts, etc.
customer and company quality specifications, pertinent
government specifications and handbooks; company,
industry, and other pertinent quality standards on
products, processes.

4. Verification of facts: Auditors are universally expected

to review with the line supervision the facts of any
deficiencies discovered during the audit. The facts should
be agreed on before the item enters a report that will go
to higher management.

5. Discovery of causes. In many companies, the auditor is

expected to investigate major deficiencies in an effort to
determine their causes. Audit recommendations will then
include proposals that such investigations may be made.
6. Recommendations and remedies. Auditors are
invariably expected to make recommendations with a
view to reducing deficiencies and improving performance.
However,
auditors
are
expected
to
follow
up
recommendations to assure that something specific is
done i.e., the recommendations are accepted or else
considered and rejected.

Policy issues are often incorporated into a Quality Audit

Manual. Such a manual also includes details on the
subject matter to be covered in audits, checklists of items
to be checked and questions to be asked.
Human Relations in Auditing
1. The reasons behind the audits. These reasons may be
well discussed during the basic formulation of the audit
programme.
2. Avoiding an atmosphere of blame. Audit reports and
recommendations should be problem-oriented rather than
person-oriented.
3. Balance in report. Overall summaries or ratings which
consider not only deficiencies but also the opportunities
for deficiencies.
4. Depersonalising the report. The real basis of the
recommendations should be the facts rather than the
opinion of the auditors. The ultimate responsibility for
results on the line managers, not on the auditors.

5. Post-audit meeting.
At this meeting, the audit
observations are presented so that the manager can plan
for corrective action. In addition, the manager can point
out to the auditor any mistakes with respect to the facts
that have been collected.
A self-audit and an independent audit can be combined to
provide a two-tier audit.
Audit Reporting
The report may be jointly issued by the auditor and
auditee:
The report should include the following items:

2. Details of the audit plan including audit personnel,

dates, the activity that was audited (personnel
contacted, material reviewed, number of observations
3. Audit observations including supporting
conclusions, and recommendations.

evidence,

4. Recommendations for improvement opportunities.

5. Recommendations for follow-up on the corrective action
that is to be proposed and implemented by line
management, along with subsequent audits, if
necessary.
6. Distribution list for the audit report.

1. Reports of each discrepancy to secure corrective

action.
These reports are made promptly to the
responsible operation personnel, with copies to some of
the managerial levels.
2. A report of the overall status of the subject matter
under review.
Distribution of the Audit Report

With a view to promoting harmony and a constructive

viewpoint on audits, some organizations have adopted a
different policy. The audit report is sent only to the
manager whose activity is audited. A follow-up audit is
scheduled. If the deficiencies are found to be corrected
in the follow-up audit, the audit file is closed. Otherwise,
copies of both audit reports are sent to the upper
management.

Product Audit
Product audit is an independent evaluation of product
quality to determine its fitness for use and conformance
to specifications.
Product auditing takes place after
inspections have been completed.

Why Total Quality in Service Sector?

The role of the service sector in economic development is
increasing with an accelerated pace.

World Scenario of Service Sector

Today, the USA has emerged as the first service economy
of the world with more than 70 per cent of its total revenue
and more than 50 per cent (75 million people) of its
population employed in producing and distributing services.
Japans services now account for 63 per cent of that nations
GDP and service sector is growing in Japan at the rate of 35
per cent compared to manufacturing growth rate of 25 per
cent. Japanese methods include: regular meetings between
customers and senior managers, market research of
potential customers, questionnaires research, customer
clinics, comment cards attached to products, analysis of
complaints, and toll free telephone numbers.

Concept of Service
A service is any activity or benefit that one party can offer
to another, which is essentially intangible and does not
result in the ownership of anything. Its production may
or may not be tied to a physical product. It is important
that customers needs and wants are appropriately
understood for designing and providing the services
better suited to meet the needs and expectations of
customers.
Characteristics of Services
(i)A service cannot be touched
(ii)Precise standardisation is not possible
(iii)There is no ownership
(iv)A service cannot be patented
(v)Production and consumption are inseparable
(vi)There are no inventories of services
(vii)Middlemen roles are different
(viii)The consumer is part of the production process so the
delivery system must go to the market or vice versa.

Inseparability: In general, services cannot be separated

from the person or firm providing it.
Heterogeneity: Standardisation of services is very difficult
because of involvement of human element in providing and
delivering.

Perishability: Services cannot be stored and are perishable

with the passage of time. This perishability characteristic of
services aggravates their marketing due to fluctuating
demand.
Ownership: The aspect of ownership is missing in services
due to their instability. If quality of services is improved,
their marketability increases.
So TQM is necessary in
service sector as well.
Service Marketing Strategies
For marketing of products, the 4Ps (elements) of marketing
mix are: product, price, place (distribution) and promotion.
These 4Ps are called marketing mix elements and are used

in a specific combination to arrive at a marketing strategy.

In the case of services, there are three additional elements
of service marketing mix, thus, making these as 7Ps. These
three additional elements are: people, physical evidence
and process. While making a service marketing strategy,
we must consider all these seven elements of marketing
mix.
The people constitute an important dimension in the
marketing of services and there is a need to select, train
and maintain them properly. The physical evidence may be
of two types: (1) peripheral and (2) essential. Peripheral
evidence is actually the part of purchase of service but by
itself is of no value, e.g. airline ticket, banks, building,
facilities and decoration.
The process constitutes the
systems by which you receive delivery of the service viz.,
self-service, job shop operations or intermittent operations.

Product and Service

While products are transportable, only service providers are
transportable. The customer assessment of product quality
starts at the time of its purchase and continues through its
lifetime. On the other hand, service quality is assessed at
the time of its execution. In some cases, the customers
may feel dissatisfied after the completion of the service, for
instance, cracks appearing in a building a few months after
construction and occupation.

Benefits of Quality Systems in Service Sector

The application of quality management at all stages of a
service process specifies opportunities for:
Improved productivity and cost reduction
Improved market opportunities
Improved service performance
The standard states that to achieve these benefits, the
quality system for services should also respond to the
human aspects involved in the provisions of a service by:
- Managing the social process involved in a service

- Regarding human interactions as a crucial part of

service quality
- Recognizing the importance of customers perception of
the service organizations image, culture and
performance
- Motivating personnel and developing their skills to

Hence ISO 9004-2 requires the organization to lay down

quality objectives or standards keeping in view the
following:
Customer satisfaction with quality of service
Protection of the environment and society at large in
respect of service activities.
Efficiency in providing service

Areas of Application
The ISO 9004-2 lists some of the services to which the
international standard can be applied:
Hospitality services (like catering, television, etc.)
Health (like hospitals, medical test laboratories, etc.)

Maintenance (like: electrical, mechanical, automobiles,

etc.)
Utilities (like water supply, electrically, transport, waste
management, etc.)

Financial (like banking, accounting, etc.)
Professional (like architects, chartered accountants,
education, etc.)
Technical (like consultancy, test laboratory, etc.)

Implementation of TQM in Service Sector

Malcolm Baldridge Quality Award of the USA is also won by
service organizations e.g. Federal Express by adhering to
standards and having Total Quality Management.
An
electric power supply company which won the coveted
award, provided with statistics their progress in the
achievement of some of their set standards between 1983
and 1990. The number of power breakdowns came down
from 75 minutes/year to 47.5 minutes/year. Complaints per
1000 customers came down from 0.75 to 0.23. The price of
electricity in cents / kWH went up only marginally in 7 years
from 6.50 to 7.40 in spite of inflation, reflecting successful
cost reduction through TQM.

In our country, some of the service organizations are

building up standards and quality culture towards providing
better customer satisfaction. Engineers India Ltd., (EIL),
and NTPC are good examples as they have won the
Company Standardisation Award constituted by the Institute

of Standards Engineers (ISE) and MECON a project

consultancy organization in the steel sector. EIL has recently
won the Golden Peacock National Quality Award of the
Institute of Directors, New Delhi.
Importance of Defining Service

Within service businesses, three quality dimensions are

defined as accomplishments, behavaiour and products.
Accomplishments are usually the most important. They are
the outputs or products, such as seminars and repaired
machines.

Behaviour is an activity performed by employees. It is

customer and employee relationship such as a registration
clerk handling an irate hotel guest. Products are usually the
least important dimension. They are the physical outputs
produced or manufactured.
All service businesses produce accomplishments and have
employees whose behaviour is important.

Nature of the

Accomplishments

Behaviour

Products

Fast food
restaurant

Food prepared,
Orders taken.
Tables cleaned

Greet customers,
Input orders

Hamburgers,
Fries, Soft
drinks

Accounting firm

Tax payments,
Audit survey

Gather data,
Interpret, Suggest
improved
procedures

Reports, Forms,
Financial
statements.

Retail store

Display products,
Make sales, Meet
customer needs

Greet customers,
Determine
customer needs

Customers
products

Automobile
dealers service
department

Write repair orders, Gather

Sell parts Repair
information from
cars
customers,
Diagnose cause,
Explain work.

Automobile
space, paints

BIG Growth of Service Sector

An article in the Economic Times of 17th September, 1992, said
The service sector is at the threshold of tremendous growth.
Service and knowledge workers are estimated to constitute 80
per cent of the workforce, with the manufacturing sector
contributing to only the rest 20 per cent by the turn of the year
2000.

A Survey Findings
A recent survey of the top ranking organisations in the Europe
provides some useful insights into the importance of total quality
in services. Of those organisations who responded, 89 per cent
said quality was the primary buying argument for the ultimate
customer; 66 per cent believed it was a major means of
reducing costs; 56 per cent thought it was a major means of
improving flexibility and responsiveness; and 40 per cent said
total quality was important to reduce throughput time.

Cornerstones of Service Quality

Only 15 per cent of the mistakes are commommitted
by the people in work-shops and the remaining 85 per
cent are attributed to the organisational or the system
failures, which only management can correct.
The three main cornerstones of the pyramid of the total
quality
management
are:
the
management
commitment, the quality tools and techniques, and the
team work and participation of one and all in the
organisation. Supported by these cornerstones are the
load bearing factors of customer satisfaction, quality of
worklife, and performance leadership. An effort has
been made to depict this philosophy.

Management
Commitment

T
Q
M
Quality of Worklife

Increased Profits Through Service Quality

The products of the service sector are also equally potential
candidates for the export market. Export should not only be
viewed in the light of things that are going out of the
country. It should also be viewed in the light of the potential
they hold by way of attracting foreign users (like in medical
care, tourism, education, etc.) of these services. Foreigners
would not mind coming all the way to India to avail of these
services if they are comparable in the world and are at
reasonable price. For example,
i)
Education
ii)
Hospitals
iii)
Banks
iv)
Insurance