TOTAL QUALITY

MANAGEMENT

INTRODUCTION

What is quality?
Some definitions that have gained wide acceptance in
various organizations: Quality is customer satisfaction,
Quality is Fitness for Use.

The American National Standards Institute (ANSI) and

the American Society for Quality (ASQ) define quality
as:
The totality of features and characteristics of a product
or service that bears on its ability to satisfy given
needs.
2

INTRODUCTION

What is TQM?
A comprehensive, organization-wide effort to improve
the quality of products and services, applicable to all
organizations.

INTRODUCTION

What is a customer?
Anyone who is impacted by the product or process delivered
by an organization.
External customer: The end user as well as intermediate
processors. Other external customers may not be purchasers
but may have some connection with the product.
Internal customer: Other divisions of the company that receive
the processed product.

What is a product?
The output of the process carried out by the organization. It
may be goods (e.g. automobiles, missile), software (e.g. a
computer code, a report) or service (e.g. banking, insurance)

INTRODUCTION
How is customer satisfaction achieved?
Two dimensions: Product features and Freedom from
deficiencies.
Product features Refers to quality of design.
Examples in manufacturing industry: Performance,
Reliability, Durability, Ease of use, Esthetics etc.
Examples in service industry: Accuracy, Timeliness,
Friendliness and courtesy, Knowledge of server etc.
Freedom from deficiencies Refers to quality of
conformance.
Higher conformance means fewer complaints and
increased customer satisfaction.

WHY QUALITY?
Reasons for quality becoming a cardinal priority for
most organizations:
Competition Todays market demand high quality
products at low cost. Having `high quality reputation is
not enough! Internal cost of maintaining the reputation
should be less.
Changing customer The new customer is not only
commanding priority based on volume but is more
demanding about the quality system.
Changing product mix The shift from low volume,
high price to high volume, low price have resulted in a
need to reduce the internal cost of poor quality.

WHY QUALITY?
Product complexity As systems have become more
complex, the reliability requirements for suppliers of
components have become more stringent.
Higher levels of customer satisfaction Higher
customers expectations are getting spawned by
increasing competition.

QUALITY LEVELS
At organizational level, we need to ask following
questions:
Which products and services meet your expectations?
Which products and services you need that you are not
currently receiving?
At process level, we need to ask:
What products and services are most important to the
external customer?
What processes produce those products and services?
What are the key inputs to those processes?
Which processes have most significant effects on the
organizations performance standards?

QUALITY LEVELS
At the individual job level, we should ask:
What is required by the customer?
How can the requirements be measured?
What is the specific standard for each measure?

HISTORY OF QUALITY
MANAGEMENT
Top managers in USA focused on marketing, production
quantity and financial performance, Japanese managers
improved quality at an unprecedented rate.
Market started preferring Japanese products and
American companies suffered immensely.
America woke up to the quality revolution in early
1980s. Ford Motor Company consulted Dr. Deming to
help transform its operations.
(By then, 80-year-old Deming was virtually unknown in
USA. Whereas Japanese government had instituted The
Deming Prize for Quality in 1950.)

10

HISTORY OF QUALITY
MANAGEMENT
Managers started to realize that quality of management
is more important than management of quality. Birth
of the term Total Quality Management (TQM).
TQM Integration of quality principles into
organizations management systems.
Early 1990s: Quality management principles started
finding their way in service industry. FedEx, The RitzCarton Hotel Company were the quality leaders.
TQM recognized worldwide: Countries like Korea, India,
Spain and Brazil are mounting efforts to increase quality
awareness.

11

EVOLUTION OF TQM
PHILOSOPHIES
The Deming Philosophy
Definition of quality, A product or a service possesses
quality if it helps somebody and enjoys a good and
sustainable market.

Improve quality

Long-term
competitive
strength

Decrease cost because

of less rework, fewer
mistakes.

Stay in
business

Productivity improves

Capture the market

with better quality
and reduced cost.
12

TQM FOR MIDDLE

MANAGEMENT
Process Management

Statistical Process Control (SPC)

PROCESS MANAGEMENT
Planning and administrating the activities necessary to
achieve high quality in business processes; and also
identifying opportunities for improving quality and
operational performance ultimately, customer
satisfaction.
Process simplification reduces opportunities for errors
and rework.
Processes are of two types value-added processes and
support processes.
Value-added processes those essential for running the
business and achieving and maintaining competitive
advantage. (Design process, Production/Delivery
process)

14

PROCESS MANAGEMENT
Support processes Those that are important to an
organizations value-creation processes, employees and
daily operations.
Value creation processes are driven by external customer
needs while support processes are driven by internal
needs.
To apply the techniques of process management, a
process must be repeatable and measurable.
Process owners are responsible for process performance
and should have authority to manage the process.
Owners could range from high-level executive to
workers who run a cell.
Assigning owners ensures accountability.

15

PROCESS IMPROVEMENT
Customer loyalty is driven by delivered value.
Delivered value is created by business processes.
Sustained success in competitive markets require a business to
continuously improve delivered value.
Continuous process improvement is an old management
concept dating back to 1895. However, those approaches were
mainly productivity related.
More recently (1951) Toyota implemented Just-In-Time which
relies on zero defects and hence continuous improvement!

16

PROCESS IMPROVEMENT:
KAIZEN
Three things required for successful kaizen program:
operating practices, total involvement, and training.
Operating practices expose opportunities for
improvement. JIT reveals waste and inefficiency as well
as poor quality.

17

PROCESS IMPROVEMENT:
KAIZEN
Every employee strives for improvement. Top
management views improvement as part of strategy and
supports it. Middle management can implement top
managements improvement goals by establishing,
maintaining, and upgrading operating standards. Workers
can engage through suggestions, small group activity.
Middle management can help create conducive
environment for improvement by improving cooperation
amongst departments, and by making employees
conscious of their responsibilities for improvement.
Supervisors can direct their attention more on
improvement than supervision, which will facilitate
communication.

18

KAIZEN: IMPLEMENTATION

The Deming cycle: Originally developed by Walter Shewart,

but renamed in 1950s because Deming promoted it extensively.

19

KAIZEN: IMPLEMENTATION
Plan Study the current system; identifying problems;
testing theories of causes; and developing solutions.
Do Plan is implemented on a trial basis. Data collected
and documented.
Study Determine whether the trial plan is working
correctly by evaluating the results.
Act Improvements are standardized and final plan is
implemented.

20

PROCESS IMPROVEMENT
TOOLS
Seven QC Tools
1.
2.
3.
4.
5.
6.
7.

Flow charts
Check sheets
Histograms
Pareto diagrams
Cause-and-effect diagrams
Scatter diagrams
Control charts
21

FLOW CHARTS
Process map identifies the sequence of activities or the
flow in a process.
Objectively provides a picture of the steps needed to
accomplish a task.
Helps all employees understand how they fit into the
process and who are their suppliers and customers.
Can also pinpoint places where quality-related
measurements should be taken.
Also called process mapping and analysis.

22

CHECK SHEETS

Special types of data collection forms in which the

results may be interpreted on the form directly without
additional processing

24

CAUSE-EFFECT DIAGRAMS
Also called fishbone diagrams (because of their shape)
or Ishikawa diagrams.
Helps in identifying root causes of the quality failure.
(Helps in the diagnostic journey.)

25

RUN CHARTS AND CONTROL

CHARTS
Run chart: Measurement against progression of time.
Control chart: Add Upper Control Limit and Lower
Control Limit to the run chart.

26

CASE STUDY 1
27

JET AIRWAYS

FORMATION OF JET AIRWAYS

Mr.Naresh Goyal founded Jetair (ltd) in May

1974

MISSION:

Jet Airways will be the most preferred domestic

airline in India.
Jet Airways will achieve this pre-eminent
position by offering a high quality of service
and reliable, comfortable and efficient
operations.

TQM TECHNIQUES
Jet Airways formulated a Quality
ManagementSystem for In-flight Services in
February 2001 as partof a comprehensive
exercise to implement ISO inselective operational
areas.
They also implement KAIZEN techniques to
improvethe services of their employees through
continuous training programs.

EXAMPLE

In the passengerairlinecase, capacity is

regarded fixed because changing what aircraft
flies a certain service based on the demand is the
exception rather than the rule. When the aircraft
departs, the unsold seats cannot generate any
revenue and thus can be said to have perished.
Airlines use special software to monitor how
seats are being reserved and react accordingly,
for example by offering discounts when it appears
that seats will remain unsold & vice versa

QUALITY CERTIFICATION

In flight Services, ISO 9001 : 2000 certified

Certification for the product and service ranges
includes Design, Development and Delivery of
Customer Services that meet world-class
standards

COST CONTROL MEASURES

Jet Airways and Kingfisher Airlines, have put

aside
their differences and joined hands to cut costs
through
code-sharing and combining ticketing and ground
services.
The airline leased two of its Boeing 737s to a
Japanese company, and implemented a number
of
workforce productivity measures.
Salary cut of employees

CUSTOMER RESPONSE THROUGH

SURVEYS
(WORD OF MOUTH)

Positive Aspects :
Jet travelers found its flights to be on time.
Jet usually informed their customers about delay
in advance through SMS or telephone call.
In the case of a delay Jet usually provides
travelers with refreshments
Jet was found to be providing good in-flight food
& entertainment
Baggage loss was found to be almost never a
problem with Jet Airways
Staff friendly and helpful

Negative Aspects:
The main problem with Jet however is their staff.
Although they are polite and try to be helpful, they
seem to be untrained and get overwhelmed easily.
Sometime there is a delay for baggage
Their catering is poor in variety and quantity

TQM FOR THE

WORKFORCE
Kaizen teams

Quality Circles

QUALITY CIRCLES
Teams of workers and supervisors that meet regularly to
address work-related problems involving quality and
productivity.
Developed by Kaoru Ishikawa at University of Tokyo.
Became immediately popular in Japan as well as USA.
Typically small day-to-day problems are given to quality
circles. Since workers are most familiar with the routine
tasks, they are asked to identify, analyze and solve
quality problems in the routine processes.

36

CASE STUDY 2
37

TATA STEEL

INDUSTRY CHALLENGES OF
TATA STEEL

Market driven realizations

New players, glut and fight for survival
Lower import tariffs
Emergence of buyers market

CHALLENGES OF TATA STEEL

(CONTD..)

Financially burdened
Human resource under utilization
Lack of competitive culture in the firm

STEPS TOWARDS EXCELLENCE

If we dont take care of our customers, somebody else does- Tata Steel CMD

TOOLS USED FOR

DELIVARABLES
TOTAL OPERATIONAL PERFORMANCE

PRODUCT & CUSTOMER RATIONALIZATION

TOOLS USED (CONTD..)

CUSTOMER VALUE MANAGEMENT

It is used to plug any gaping holes of the process and maximise customer
returns.

TOOLS USED (CONTD..)

RETAIL VALUE MANAGEMENT

For better estimates of the market prices and demand planning.

TOOLS USED (CONTD..)

STRATEGIC SOURCING

RESULTS

QUALITY
MANAGEMENT
AWARDS AND
FRAMEWORK
ISO 9000: 2000

Malcolm Baldrige National Quality

Award
Deming Prize.

ISO 9000: 2000

Created by International Organization for
Standardization (IOS) which was created in 1946 to
standardize quality requirement within the European
market.
IOS initially composed of representatives from 91
countries: probably most wide base for quality standards.
Adopted a series of written quality standards in 1987
(first revised in 1994, and more recently (and
significantly) in 2000).
Prefix ISO in the name refers to the scientific term
iso for equal. Thus, certified organizations are assured
to have quality equal to their peers.

47

ISO 9000: 2000

Created to meet five objectives:
1.
Achieve, maintain, and seek to continuously improve
product quality in relation to the requirements.
2.
Improve the quality of operations to continually meet
customers and stakeholders needs.
3.
Provide confidence to internal management that
quality requirements are being met.
4.
Provide confidence to the customers that quality
requirements are being met.
5.
Provide confidence that quality system requirements
are fulfilled.
48

ISO 9000: 2000 STRUCTURE

1.

Consists of three documents

ISO 9000 Fundamentals and vocabulary.

2.

ISO 9001 Requirements.

Organized in four sections: Management
Responsibility; Resource Management; Product
Realization; and Measurement, Analysis and
Improvement.

3.

ISO 9004 Guidelines for performance improvements.

49

ISO 9000: 2000 QUALITY

MANAGEMENT PRINCIPLES
Principle 1: Customer Focus
Principle 2: Leadership
Principle 3: Involvement of people
Principle 4: Process approach
Principle 5: Systems approach for management
Principle 6: Continual improvement
Principle 7: Factual approach to decision making
Principle 8: Mutually beneficial supplier relationships.

50

ISO 9000: 2000 REGISTRATION

Originally intended to be a two-party process where the
supplier is audited by its customers, the ISO 9000
process became a third-party accreditation process.
Independent laboratory or a certification agency
conducts the audit.
Recertification is required every three years.
Individual sites not entire company must achieve
registration individually.
All costs are to be borne by the applicant.
A registration audit may cost anywhere from $10,000 to
$40,000.

(more information at http://www.iso.ch)

51

TQM FOR TOP

MANAGEMENT

Strategic Quality Management

(SQM)
Competitive Advantage

SQM: HOSHIN PLANNING

Hoshin kanri: Japanese for management cycle build

around Plan, Do, Check, Act. Elements of this cycle
include
Quality policies
Quality goals
Deployment of goals
Plans to meet goals
Organizational structure
Resources
Measurement feedback
Review of progress
Training

53

SQM: VISION/MISSION
STATEMENT
Developed by taking everyone in confidence. Guide for
the Quality journey. Ties quality to overall business
goals.
Vision Statement: Collection of quality policies. A vision
statement outlines what a company wants to be. It
focuses on tomorrow; it is inspirational; it provides clear
decision-making criteria; and it is timeless. A vision
needs to address three areas: people, culture (or values)
and product or service.
Mission statement: A mission statement outlines what the
company is now. It focuses on today; it identifies the
customers; it identifies the critical processes; and it states
the level of performance.

54

SQM: CAVEATS
Reasons of failure of SQM could be
Lack of leadership by upper management.
Lack of infrastructure for quality.
Failure to understand the skepticism about the new
quality program.
Management assumption that the exhortation approach
will work.
Failure to start small and learn from pilot programs.
Reliance on specific techniques as the primary means.
Underestimating the time and resource required.
55

CASE STUDY 3
56

COCA COLA

QUALITY MANAGEMENT

COCA COLA-SRI LANKA

As one of the largest and well
experienced business over 125 years,
Coca Cola has their own developed
quality management system that
perfectly matches with all of their
operations.
They implements 5S and Kaizen
theories inside the frame of their own
quality management system to smooth
overall quality.

Kaizen is a Japanese word. KAI means change and ZEN

means better, the two words together mean - change for
the better, or improvement.
Coca-Cola use kaizen for
Small improvements first rather than on the big
ones,
Utilizing everyones potential and knowledge
rather than depending on a few experts
Implementing a continual stream of small
improvements at a steady pace rather than some
big changes once in a while,
and done at every place where some work is done.

This 5S system describes how to fill the organization work gap to improve
the efficiency and the effectiveness by identifying and storing the items
used, maintaining the areas and items, and sustain according to the new
order.
5S consists of these five steps:
SEIRI :
Sort through and sort out
SEITON :
Standardize and share information
SEISO :
Set in order
SEIKETSUS: Sustain the improvements made
SHITSUKES: Shine and inspect through cleaning.

Accordingly, Coca cola Sri Lanka uses this 5S system for few
months and it started with the big cleaning day. It increased
morale of the employees and customers where it can be found
through the all behaviors of the Company.

Business Planning
The business planning procedure considers the following at
minimum:
Determination of the factors of success for the department or

An assessment of financial, economic, environmental, safety,

other current factors that bear on the organizational units suc

System Planning
Top management of each organizational unit has ensured tha

Planning of the quality management system is carried out in o

meet the requirements of The Coca-Cola Company, as well as i
objectives

Document Control
Each organizational unit is controlling all documents required by T
Cola Quality System
a.
Structure and numbering of the documentation system
b.
Protocols for creation and approval of documents prior to is
c.Review, updating as necessary, and preapprovals of documents

Process Orientation & Organizational Structure

Each organizational unit has:
a.
Identify the processes and procedures needed for the quali
system and their application throughout the organization
b. Determine the sequence and interaction of these processes

 Process Monitoring and Control

Each organizational unit is planning, implementing, controlling, m
measuring, and analyzing its processes, and effectively ensure
existing processes continuously produce material, product, and
within Company specifications

Design and Development Planning

The organizational unit is planning and controlling the design and
product and other process outputs.
Design and development planning has determined:
a. Design and development stages
b. Review, verification, and validation those are appropriate to ea
development stage

6) Incident Management and Crisis Resolution (IMCR)

Crisis Resolution (IMCR) procedure to prevent and manage incidents
or situations effectively
in a manner that protects their consumers, assets, and the image and
trademarks of The
Coca-Cola Company.
07) Training
Each organizational unit has identified and documents the skill
requirements for each position and competency levels necessary for
each employee to perform their job safely and effectively.
8) Audit
Each organizational unit has implemented an audit procedure to
monitor conformance with this Quality Management System Standard
and other relevant Company requirements, and to assess the intent,
implementation, and effectiveness of its quality system.

9).Consumer Responses and Customer Satisfaction

Determination of Contractual Requirements
Each organizational unit has identified the requirements of each
order or contract.
Customer Satisfaction
Each organizational unit has implemented a procedure for
measurement and
analysis of customer satisfaction data
against established customer requirements and expectations and
takes actions to ensure they are met.
10) Continual Improvement
Each organizational unit has continually improve the effectiveness
of its quality management system using the business plan, quality
statement, objectives and metrics, audit results, analysis of data,
corrective and preventive actions, and management review
.

 Corrective Action
Each organizational unit has implemented a corrective
action procedure that ensures action is taken to
eliminate the cause of nonconformities in order to
prevent recurrence.
Preventive Action
Each organizational unit has determined preventive
actions, and implements a preventive action procedure
that ensures that the actions are taken, to eliminate the
cause of potential nonconformities in order to prevent
occurrence.

Coca-Cola Beverages Sri Lanka Ltd. (CCBSL) has been honored with the

National Quality Awards 2013, in the Large Scale Manufacturing Category

Certifications Coca-Cola Sri Lanka has been certified with,

FSSC 22000:2010 (Food Safety System)

ISO 9001:2008 (Quality Management System),
ISO 14001:2004 (Environment Management System),
BS OHSAS 18001:2007 (Occupational Health & Safety System),
PAS 220, and
TCCQS-E3 quality standards.

The Companys production facility in Biyagama has been awarded by th

India & South West Asia Business Unit (INSWABU) as being amongst the
plants in The Coca-Cola System worldwide.

Coca-Cola has very effective and efficient

quality management system.
Since 1995 Coca-Cola maintains their own
quality management system
Coca-Cola system has more than 900
bottling plants worldwide under same
quality management system.
Some stated lines of TCCQS bring additiona
cost to the organization
At the practical level, company has to
implement some points of TCCQS as rules.
Tough regulations and practices can make