TQM Briefing

TOTAL QUALITY
MANAGEMENT
Presented by:
Enrico C. Mina
TQM Briefing by Enrico C. Mina
The World Is Changing

Liberalization of trade and globalization of
business
Tougher competition
More demanding customers
Faster rate of technological change
More turbulent environment
MATSUSHITA
Change of thought makes your behavior
change.
Change of behavior makes your habits change.
Change of habits makes your personality
change.
Change of personality makes your destiny
change.
PARADIGM CHANGES (1)

THE PRINCIPAL PURPOSE OF A
BUSINESS ENTERPRISE
OLD: To make a profit.
NEW: To satisfy customers and win their
loyalty and continued patronage, which
leads to sales, market share, growth, and
profits.

DEFINITION OF QUALITY
OLD: The totality of the characteristics or
features of a product or service;
conformance to internal specifications
NEW: Conformance to customer
requirements; fitness for customers use.
Customer Superordinate Goals

GOALS
Explicit
Quality
EXPECTATION LEVELS
Implicit
Customer
Delight
Cost
Delivery
Customers Bill of Rights

A customer has the right to courteous treatment by
the sellers representatives at all times and under all
conditions.
A customer has the right to the representatives full
time and attention during each and every transaction.
A customer has the right to fast and accurate
information about the product or service or the status
of the order.

A customer has a right to have his/her
expectations met with a product or service of
the quality represented before the purchase.
A customer has the right to complain when the
product or service does not meet those
expectations--and to a prompt remedy when
the product or service is indeed at fault.

A customer has the right to expect
knowledgeability, resourcefulness, problemsolving ability, concern--and results--from
those assigned to his/her account.
A customer has the right to expect
responsiveness and follow-through in
emergencies and special situations.

A customer has the right to the benefits of
teamwork in the company he/she deals
with--without buckpassing, fingerpointing,
or runarounds.
A customer has the right to care, accuracy,
and attention to detail in filling his/her
orders for services and/or products.
10

A customer has the right to appreciation on
the part of those with whom he/she does
business -- appreciation both for the business
already given and for the business to be given
in the future so long as this Customers Bill
of Rights continues to be observed.
(From The Customer Communicator, published by Marketing
Publications, Inc., Washington, D.C.)
11

DEFINITION OF CUSTOMER
OLD: The ultimate buyer or user of the
product or service.
NEW: The next person, process, or system;
anyone on whom the product or service has
an impact.
12
Chain of Customer-Supplier
Relationships
External
Suppliers
The
Company
2
3
End-users or
consumers
Intermediaries
or distributors
13

HOW QUALITY IS TO BE ACHIEVED
OLD: Produce large quantities, then have
quality control inspectors separate the
defectives from the good units; rework the
defectives if possible.
NEW: Emphasize prevention of defects by
improving the product/service and the
process that produces and delivers it.
14
Process
DEFINITION: a series of activities that transform
inputs into desirable outputs
ELEMENTS:
Man (people)
Machines
Materials
Methods
Measurement
Environment
15

RELATIONSHIP BETWEEN QUALITY
AND PRODUCTIVITY
OLD: Quality and productivity are mutually
exclusive. High quality and low costs cannot
go together.
NEW: Quality is the road to productivity. A
high-quality process leads to reduced waste,
lower costs, and bigger volumes.
16
Cost of Quality (1)

Cost of Quality is defined as the cost of
keeping customers satisfied. It includes all
costs incurred to ensure that customer
requirements are ultimately met.
Components:
Cost of prevention - costs incurred to prevent
failures in each process element
17
Cost of Quality (2)

Cost of appraisal - costs of inspection, testing,
measurement, and information-gathering to
determine the state of the process
Cost of non-conformance - the costs of failure or
poor quality. Two types:
Internal failure costs - incurred when failures are
detected in-house, before sending output to the
customer
External failure costs - incurred when failures are
detected by the external customer.
18
Cost of Quality (3)

Quality experts estimate that costs of nonconformance are equal to 25% - 35% of
gross sales or revenue.
Not all CONCs are visible because
conventional accounting systems do not
distinguish between productive vs. nonproductive uses of resources.
19
The Cost of Non-conformance

Iceberg
visible costs
hidden
costs
20
Cost of Quality (4)

What should happen:
External failure cost
C
o
s
t
s
Internal failure cost

Appraisal cost
Prevention cost
Savings
Total costs
with improved
process quality
Time
21

MEASUREMENT OF QUALITY
OLD: Acceptable quality levels (AQL) are
good enough.
NEW: Maximum defect incidence must be
measured in terms of parts per million
(ppm).
22
99.9% Reliability
If the human heart were 99.9% reliable, it
would miss 36,817 beats a year (@ 70 /
minute), equivalent to 8.8 hours without a
heartbeat.
23
6-sigma Reliability
99.99966% reliability or 3.4 failures per
million
Equivalent to missing only one free throw
out of 300,000 attempts.
24
Overall Process/System
Reliability
0.95
Number of steps or
elements
20
1
0
0.36
0.60
0.77
0.98
0.67
0.82
0.90
0.99
0.82
0.90
0.95
0.999
0.98
0.99
0.99
5
25

THE CAUSES OF QUALITY PROBLEMS
OLD: It is the fault of the workers. They are
not careful enough.
NEW: The deficiency lies in the system or
process, over which management has
control and is therefore responsible.
26
Common and Special Causes (1)

According to W. Edwards Deming, the
causes of quality problems fall under two
categories:
Common causes, those which are related to the
system of operation, and
Special causes, those that are identifiable with
specific events and people.
27
Common and Special Causes (2)

Proportion of the incidence of problems due
to these two categories are:
Common causes
94%
Special causes
__6%
100%
28
Process Muda (1)

Muda is the Japanese word for waste.
The presence of muda in a process, through one or
more of its elements, deteriorates quality,
increases costs, and delays delivery by
lengthening the cycle time.
Muda is non-value-adding and therefore
unproductive.
29
Process Muda (2)

Overproduction - Each work station or process
stage tries to operate at full capacity, leading to a
build-up of WIP or FGI. These hide problems by
making them tolerable, although at high cost, and
prevent them from being addressed. This is the
mother of all muda.
30
Process Muda (3)

Inventory - Excessive supplies and parts are costly
to carry: cost of tied-up capital, storage, security
and pilferage, supervision, insurance,
obsolescence and deterioration.
Waiting - Waste of time when people and work
stations are capable of work but are idle.
31
Process Muda (4)

Transportation - Additional cost and time created
by transferring the location of people, materials, or
products without any value being added.
Motion - Created by people being made to exert
physical efforts that merely add to fatigue and
time but do not create value.
32
Process Muda (5)

Overprocessing - Created when the process
is performing work that is unnecessary from
the customers point of view.
Producing failures - Process failures like
defects and errors result in customer
dissatisfaction, higher costs, and delays.
33
Process Muda (6)

In most organizations, mudas are considered
normal and have been tolerated over a long
period of time. Many are even in budgets.
Every muda removed and prevented from
recurring improves process quality and
reduces cost and cycle time, thereby
automatically increasing productivity.
34
Effect of Mudas
Mudas are non-value-adding.

They lengthen process cycle times.
They increase costs.
They cause quality to deteriorate.
The value-adding moment is very short.
Eliminating mudas will cause QCD to
improve, often with very little investment.
35
Process Flowcharting (1)

The first step in identifying muda is to draw a
flowchart of the process.
A flowchart is a graphical representation of a
process. It is essential to process analysis and
improvement.
36
Process Flowcharting (2)

The flowchart, to be useful, must be the as is
flow (based on the actual sequence of activities),
not necessarily the theoretical one in the manuals.
The best sources of information are the people
who are actually working on the process.
37
Basic Symbols (1)

Beginning and end
Operation
Sub-process
Wait/delay
38
Basic Symbols (2)

Transportation
Storage
Connector
39
Basic Symbols (3)

Direction of
process flow
Document
?
Decision
40
Customer
Dept. X
Dept. Y
Dept. Z
START
Total Cycle
Time:
Min.: ___hrs
Max.: ___hrs
N
A
Y
B
Y
Ave.: ___hrs
Y
Total Distance
Traveled:
Min.: ___m
Max.: ___m
Ave.: ___m
Y
END
D C. Mina
TQM Briefing by Enrico
41
Identifying Muda (1)

Ask the following questions:
What are we doing? Can we avoid doing it at
all?
Who is doing it? Can it be done better by
someone else (e.g., a subcontractor)?
Where are we doing it? Can it be done better
somewhere else?
42

When and how often are we doing it? Can it be
done better at other times or with another
frequency?
How are we doing it? Can it be done better
through another way?
If it is done manually, can we automate it?
Can it be done simultaneously or in parallel?
Can we apply Information Technology and telecommunications effectively?
43

If there is no clear value-added, then that
particular activity is muda and should be
eliminated.
Draw a new, should be flowchart incorporating
all the muda-eliminating features.
Create, document, and continuously improve
standards for each process element. Use the
standards for training staff.
44
Muda Elimination
The process should be revised to eliminate
identified muda. Every such muda eliminated and
prevented from recurring reduces costs and cycle
time and improves process quality.
The opportunities for improvement through the
continuous elimination of muda are infinite.
45

THE ROLE OF PEOPLE
OLD: People should work in strict conformance with the instructions given by their
superiors.
NEW: The people in the workplace have
detailed knowledge, experience, and ideas for
improvement. They should be encour-aged
to actively participate in improvement.
46

TIME FRAME
OLD: Achieve the bottomline targets set for
this month or quarter.
NEW: Allocate resources to ensure
continuing ability to offer superior value to
customers relative to competitors.
47

THE ROLE OF QUALITY
OLD: Quality is an internal problem to be
solved.
NEW: Quality is our strongest strategic
weapon against the competition.
48
Profit Impact of Market Share

ACHIEVING COMPETITIVE SUCCESS
THROUGH QUALITY
Achieve superior relative perceived quality in
both products and services.
Achieve a high degree of conformance or
process quality.
(From The PIMS Principle by Robert Buzzell and
Bradley Gale)
49

PHILOSOPHY OF IMPROVEMENT
OLD: If it aint broken, dont fix it.
NEW: If it is not perfect, make it better.
50
Continuous Improvement
(Kaizen)
KAIZEN is a system of small-step
improvements taking place continuously at
all levels and functions of the organization.
It promotes improvements through projects
that do not cost much money.
51
Kaizen, Maintenance, &

Innovation
Top
Mgt.
Middle
Mgt.
Supervisors
R&F
Innovation
Kaizen
Maintenance
52
The Gemba (Workplace)

Kaizen places heavy emphasis on seeking
improvements in the gemba, the work-place
where processes are in operation and where
value is created for customers.
The opportunities for improvement in the
gemba are infinite.
53
Five Gemba Principles (1)

When an abnormality takes place, go to the
gemba first to get first-hand information.
Check with the gembutsu (the real things
inside the gemba: employees, materials,
equipment, records, actual rejects, working
conditions, etc.).
Take temporary countermeasures on the spot
to relieve the situation.
54
Five Gemba Principles (2)

Trace the root causes of the abnormality and
take permanent countermeasures that will
prevent recurrence.
Standardize all improvements made.
55
Superordinate Principles
Kaizen has to be absorbed into the
organizations culture.
Process and Results
Total Systems Focus
Non-blaming/Non-judgmental Behavior
56
Process and Results

Process creates results. If results are not
satisfactory, the only permanent way to
improve them is to improve the process first.
Results are needed to verify if process
improvements are working.
Therefore, there must be a balanced
emphasis on both process and results.
57
Total Systems Focus

A system is an integrated whole made up of
distinct but interdependent and interacting
parts.
The only real improvement is that which
enables the entire organization to serve
customer requirements better.
Systemic problems can only be solved
through cross-functional teamwork.
58
Non-blaming/Non-judgmental
Behavior
A blaming culture causes people to hide
problems.
Problems are really opportunities for
improvement in disguise.
Focus on the problem and make people
problem-solvers.
The first time you get angry is the last time
you get the truth. (Ishikawa)
59
Seven Basic Concepts (1)
SDCA to PDCA
The next process is the customer.
Quality first
Market in
Upstream management
Speak with data
Variability control and recurrence prevention
60
SDCA to PDCA
Standardization and Improvement
A
61
The Next Process Is the

Customer.
The Customer-Supplier Chain
Your
Supplier
inputs
Three Rules:
Do not
accept
defects.
Your
Process
outputs Your
Customer
Do not
make
defects.
Do not
pass on
defects.
62
Quality First
The quality of the process must receive first
priority, ahead of Cost or Delivery.
A high quality process produces high
quality products at least cost and with the
shortest cycle time (enabling on-time
delivery).
63
Market-in
A philosophy that seeks to find out factually
what customers want, and then designs the
product or service, and the processes that
create and deliver them, to suit customer
requirements.
Product-out: We know better than the
customers; we tell them what to do. We do
what is convenient for us, not for them.
64
Upstream Management
Manufacturing
Product
Concept
Full-scale
Production
Design &
Develpmt.
Distribution
Process
Engg.
Sales
Prototype
After-sales
Service
65
Upstream Management
Service
Service
Concept
Service
Strateg
y
Trial
Run
Full-scale
Operation
s
Service
Systems
Service
Staff
Follow-up
Service
66
Speak with Data

Data mean facts.
Identify problems with data, analyze causes
with data, evaluate solution alternatives
with data, verify success with data.
Gut-feel and past experience are useful but
not enough. They must be validated with
data.
67
Variability Control and

Recurrence Prevention
Problems are caused by failures occurring
in man, machines, materials, methods,
measurements, or environment.
It is necessary to identify the root causes of
a problem and to adopt countermeasures
that eliminate them, to prevent recurrence.
Ask Why? 5 times to trace root causes.
68
Exercise in Self-Diagnosis
Principle or Concept: ____________
Inconsistent Consequent
Future
Ideas for
Practices
Problems Implications Improvement
1.
2.
3.
69
10 Basic Rules for Practicing

Kaizen (1)
Discard conventional fixed idea for
operations.
Think of how to do it, and not why it cannot
be done.
Do not make excuses. Start by questioning
current practices.
70

Kaizen (2)
Do not seek perfection. Do it right away
even if for only 50% of target.
Correct mistakes at once.
Do not spend money for KAIZEN.
Wisdom is brought out when faced with
hardship.
71

Kaizen (3)
Ask Why? five times and seek root
causes.
Seek the wisdom of ten people rather than
the knowledge of one.
KAIZEN ideas are infinite.
72
Hoshin Kanri (Policy

Deployment or Management by
Policy)
Mean
s
CEO
Sr/Mid
Mgrs
Suprvsr
s
R&F
Mean
s
Mean
s
Mean
s
Result
s
Result
s
Result
s
Result
s
73
Service Quality (1)

Service means the provision of intangible
products, or work done for someone else.
It is also the work performed to help
internal customers achieve their objectives.
Where products are similar or equivalent,
service is the competitive edge.
74
Service Quality (2)

Characteristics of service operations:
The product, or the greater part of the product
package, is intangible.
Measurement is more difficult.
Production and consumption are simultaneous;
there is little chance of pre-delivery inspection.
There are frequent person-to-person contacts
(moments of truth) between customers and
front-line personnel.
75
The Service Triangle

Service
Strateg
y
CUSTOME
R
Service
System
Service
Staf
76
Service Gaps (1)

Gap 1 - The inability to discern correctly
what customers really need and expect
Gap 2 - The inability to translate knowledge
of the customers needs and wants into
service process standards
Gap 3 - The inability of operating forces to
comply consistently with service process
standards
77
Service Gaps (2)

Gap 4 - The inability to communicate
effectively with customers what the supplier
is doing to meet expectations; also, the
raising of these expectations through a
propensity to overpromise.
Gap 5 - The inability to effectively and
efficiently satisfy customer needs and wants,
as judged by the customer.
78
Service Quality Dimensions (1)

RELIABILITY - Consistent ability to
satisfy the customers needs and wants
RESPONSIVENESS - Fast action on
customer orders, requests, inquiries, or
complaints
ASSURANCE - The ability to demonstrate
competence and to give the customer peace
of mind before the transaction takes place
79
Service Quality Dimensions (2)

EMPATHY - The ability to place oneself in
the customers shoes and treat him/her as
one wishes to be treated
TANGIBLES - The physical appearance of
the service suppliers staff, facilities,
equipment, forms, vehicles, and other
resources.
80
Benchmarking (1)
Benchmarking is the search for and
adoption of ideas for improvement and best
practices from other organizations.
It provides an identification of opportunities
for improvement even if current processes
are good enough.
It avoids reinventing the wheel.
81
Benchmarking (2)
Three levels of benchmarking:
Internal the best practices of a particular
branch, plant, or facility of the same
organization become models for the others to
follow (e.g., best practices of a particular plant
are communicated to the others to have them
adopt these also)
82
Benchmarking (3)
Competitive the best practices of another
organization engaged in the same business are
identified, analyzed, and copied (e.g., the best
practices of other manufacturers of similar
products around the world can be identified and
adopted).
Do reverse engineering.
Ask common customers what the competitors
practices are.
83
Benchmarking (4)
Functional the practices of another
organization, not necessarily from the same
business, that have been identified as best in
class are analyzed and copied or adapted into
ones own organizational processes.
84
CULTURAL CHANGE (1)

HANDICAPS
Size (number of personnel)

Age of the enterprise
Past success
Weak pressures from the market
85
CULTURAL CHANGE (2)

TWO ROUTES TO THE QUALITY
JOURNEY:
CLSQ (Crisis Leadership makes you Sweat for
Quality)
VLSQ (Visionary Leadership makes you Sweat
for Quality)
86
SUCCESSFUL TQM
IMPLEMENTATION (1)
ELEVEN PRE-CONDITIONS:
Management involvement and leadership
Organization for Quality
Communication
Participative management
Training and education
Measurements and standards
87
SUCCESSFUL TQM
IMPLEMENTATION (2)
Plans, programs, and strategies

Regular reviews
Rewards and recognition
Supplier quality
Process management
88
START-UP DILEMMA
O
U
T
P
U
T
quit
point?
results
curve
cost/efort
curve
TIME
89
End
90

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TOTAL QUALITY

TQM Briefing by Enrico C. Mina

The World Is Changing

PARADIGM CHANGES (1)

PARADIGM CHANGES (2)

TQM Briefing by Enrico C. Mina

Customer Superordinate Goals

Customers Bill of Rights

Customers Bill of Rights

TQM Briefing by Enrico C. Mina

Customers Bill of Rights

Customers Bill of Rights

Customers Bill of Rights

PARADIGM CHANGES (3)

TQM Briefing by Enrico C. Mina

TQM Briefing by Enrico C. Mina

PARADIGM CHANGES (4)

PARADIGM CHANGES (5)

Cost of Quality (1)

Cost of Quality (2)

Cost of Quality (3)

The Cost of Non-conformance

Cost of Quality (4)

Internal failure cost

PARADIGM CHANGES (6)

TQM Briefing by Enrico C. Mina

TQM Briefing by Enrico C. Mina

TQM Briefing by Enrico C. Mina

TQM Briefing by Enrico C. Mina

PARADIGM CHANGES (7)

TQM Briefing by Enrico C. Mina

Common and Special Causes (1)

TQM Briefing by Enrico C. Mina

Common and Special Causes (2)

TQM Briefing by Enrico C. Mina

Process Muda (1)

TQM Briefing by Enrico C. Mina

Process Muda (2)

TQM Briefing by Enrico C. Mina

Process Muda (3)

TQM Briefing by Enrico C. Mina

Process Muda (4)

TQM Briefing by Enrico C. Mina

Process Muda (5)

TQM Briefing by Enrico C. Mina

Process Muda (6)

Mudas are non-value-adding.

Process Flowcharting (1)

TQM Briefing by Enrico C. Mina

Process Flowcharting (2)

TQM Briefing by Enrico C. Mina

Basic Symbols (1)

Basic Symbols (2)

TQM Briefing by Enrico C. Mina

Basic Symbols (3)

Identifying Muda (1)

TQM Briefing by Enrico C. Mina

Identifying Muda (2)

Identifying Muda (3)

TQM Briefing by Enrico C. Mina

PARADIGM CHANGES (8)

PARADIGM CHANGES (9)

TQM Briefing by Enrico C. Mina