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Total Quality Management
Barhate Mangesh
Roll No- PG/509/MBA (I)/2009J
Page 1
TOTAL QUALITY MANAGEMENTTOTAL QUALITY MANAGEMENTTOTAL QUALITY MANAGEMENTTOTAL QUALITY MANAGEMENT
Name of Student Mr. Barhate Mangesh Tukaram
Roll No PG/509/MBA(I)/2009J
Institute Silver Bright Institute of Management (SBIM), Pune
Subject Total Quality Management
Date 10 Jan 2010
Total Quality Management
Barhate Mangesh
Roll No- PG/509/MBA (I)/2009J
Page 2
INDEX
- Preamble
- Total Quality Management
- A QUALITY ORIENTED APPROACH
- Concepts and Philosophies of TQM
- Deming’s Fourteen Points
- Ten Steps to Total Quality Management
- Plan and organize for quality improvement
- TQM Problem Solving Sequence
- The TQM Model
- The Acceptability of TQM
- TQM in Service Industry
- The Essentials of TQM
- The Effects of TQM
- TQM Tools
- Wrapping Up
Total Quality Management
Barhate Mangesh
Roll No- PG/509/MBA (I)/2009J
Page 3
Preamble
“Every nation has its own independent historical and cultural background. The quality
scenario, therefore, differs from one national setting to the other. The nations are
orienting their quality management strategies and systems to meet the requirements of
the operating environment though the primary focus remains the same, that is, Total
Customer Satisfaction .Many of the present techniques of quality management were
developed in Japan. However, U.S.A., European nations and developing nations have
also contributed significantly to this development. The studies carried out by
researchers in different national settings reveal that the concept and philosophies of
TQM are not understood by the managers and others. An all out effort, therefore is
required to promote the understanding by launching massive educational and
management development programs at all levels so as to create a cultural
consciousness towards quality. TQM is not undimensional approach but is multifaceted
in nature. Understanding these facets is essential to promote a successful quality
improvement program. An integrated approach on all vital components of TQM is
required to achieve the desired goal.”
Total Quality Management
Barhate Mangesh
Roll No- PG/509/MBA (I)/2009J
Page 4
Total Quality Management
As defined by ISO:
"TQM is a management approach of an organization, centered on quality, based on the
participation of all its members and aiming at long-term success through customer satisfaction,
and benefits to all members of the organization and to society."
In Japanese, TQM comprises four process steps, namely:
1. Kaizen – Focuses on Continuous Process Improvement, to make processes visible, repeatable
and measureable.
2. Atarimae Hinshitsu – Focuses on intangible effects on processes and ways to optimize and
reduce their effects.
3. Kansei – Examining the way the user applies the product leads to improvement in the
product itself.
4. Miryokuteki Hinshitsu – Broadens management concern beyond the immediate product.
TQM requires that the company maintain this quality standard in all aspects of its business. This
requires ensuring that things are done right the first time and that defects and waste are
eliminated from operations.
Total Quality Management (TQM) is a management strategy aimed at embedding awareness of
quality in all organizational processes. TQM has been widely used in manufacturing, education,
government, and service industries, as well as NASA space and science programs.
“A QUALITY ORIENTED APPROACH”
Total Quality Management (TQM) is one of quality-oriented approaches that many organisations
adopt. It is generally acknowledged that manufacturing companies need to be quality oriented in
conducting their business to survive the business world. TQM is an integrated management
philosophy and a set of practices that emphasise top management commitment, customer focus,
supplier relationship, benchmarking, quality-oriented training, employee focus, zero-defects,
process improvement, and quality measurement. This paper investigates the structural linkages
between TQM, product quality performance and business performance in the electronics industry
in Malaysia. Given the nature of this study, the statistical analysis technique called Structural
Equation Modelling was used. This preliminary result suggests that there is insufficient statistical
Total Quality Management
Barhate Mangesh
Roll No- PG/509/MBA (I)/2009J
Page 5
evidence to conclude significant simple relationships between TQM, product quality
performance, and business performance. This implies that the electronics industry cannot assume
direct causal linkages between these three constructs, which might also suggest that there is a
more complex relationship between TQM, product quality performance, and business
performance. However, the results reveal that top management commitment, supplier relations
and training in particular appear to be of primary importance for TQM practices in Malaysian
electronics companies.
Characteristics of TQM:
The characteristics of TQM, as revealed from above definition are as follows:
1. TQM is customer oriented.
2. TQM requires a long term commitment for continuous improvement of all processes.
3. The success of TQM demands the leadership of top management and continuous
involvement.
4. Responsibility for establishments and improvement of systems lies with the management
of an organisation.
5. TQM is a strategy for continuously improving performance at all levels and in all areas of
responsibility.
Potential Benefits of TQM:
The advantages of adopting TQM system compared to conventional quality system are numerous
and are outlined below.
1. TQM helps to focus clearly on the needs of the market.
The traditional approach of quality control focuses on the technical details of a product so as
to satisfy the customer. However, the customer longs for different satisfaction perspectives
which are generally overlooked in the traditional approach. The needs change from person to
person and also from place to place. As TQM focuses on the concept of university, it tries to
abstract the satisfaction perceptions of the market and thus helps the organization to identify and
meet the requirements of the market in a better way.
2. TQM facilitates to aspire for a top quality performer in every sphere of activity.
It is a well accepted fact that the negative attitudes of employees and non-participative culture
of the organization pose the greatest hurdle to organization’s success, growth and prosperity.
TQM emphasis, on bringing about attitudinal and cultural change through promotion of
participative work culture and effective team-work. This serves to satisfy the higher human
Total Quality Management
Barhate Mangesh
Roll No- PG/509/MBA (I)/2009J
Page 6
needs of recognition and self-development and enhances employee’s interest in the job. The
employee’s performance, thus, is not restricted to the product or service areas but reflects in
other spheres as well.
3. It channelizes the procedures necessary to achieve quality performance.
Quality in its true sense cannot be achieved instantly. It requires a systematic and a long-term
planning and strategic approach. By focusing on defining the quality policies, goals and
objectives, and communicating these properly to one and all in the organization, adopting SQC
and SPC techniques and developing and using a system of evaluation , the organization can
channelize their efforts to achieve the desired and objectivated quality performance.
4. It helps examine critically and continuously all processes to remove non-productive
activities and waste.
The organizations always aim at improving productivity as it leads to reduction in cost resulting
in increase in profitability. The efforts in this direction are contributed because of the formation
of quality improvement teams which meet regularly and through a systematic approach which
tries to remove non-productive activity. A continuous effort to identify the problems and resolve
them helps to reduce the waste. The culture of well being thus improves housekeeping, cost-
effectiveness and safety.
5. It gears organizations to fully understand the competition and develop an effective combating
strategy.
The dynamic changes in the global market and the open market policies adopted by a large
number of organizations has resulted in increased competition and for many organizations the
survival has become a key issue. For this cause it is essential for the organistions to understand
the competition and develop and adopt suitable strategies to meet the challenges. As TQM helps
to understand the pulse of customer and thus the market, it gives an edge to the organizations of
variable nature to meet the competition.
6. It helps to develop good procedures for communication and acknowledging good work.
Improper procedures and inadequate communication are yet another bane of many
organizations, which result in misunderstanding, confusion, low productivity, duplication of
efforts, poor quality, low morale and so on. TQM brings together members of various related
sections, departments and different levels of management thereby providing an effective vehicle
of communication and interaction.
7. It helps to review the process needed to develop the strategy of never ending improvement.
Quality improvement efforts cannot be restricted to any time period. They need to be continuous
to meet the dynamic challenges. TQM emphasizes on a continuous and periodic review so as to
make the required changes.
Total Quality Management
Barhate Mangesh
Roll No- PG/509/MBA (I)/2009J
Page 7
Concepts and Philosophies of TQM
Total Quality Management (TQM), a buzzword phrase of the 1980's, has been killed and
resurrected on a number of occasions. The concept and principles, though simple seem to be
creeping back into existence by "bits and pieces" through the evolution of the ISO9001
Management Quality System standard.
Companies who have implemented TQM include Ford Motor Company, Phillips Semiconductor,
SGL Carbon, Motorola and Toyota Motor Company.
The latest changes coming up for the ISO 9001:2000 standard’s "Process Model" seem to
complete the embodiment. TQM is the concept that quality can be managed and that it is a
process. The following information is provided to give an understanding of the key elements of
this process.
TOTAL QUALITY MANAGEMENT(TQM) : Total = Quality involves everyone and all activities in the company.
Quality = Conformance to Requirements (Meeting Customer Requirements).
Management = Quality can and must be managed.
TQM = A process for managing quality; it must be a continuous way of life; a philosophy of
perpetual improvement in everything we do.
TQM Compared to ISO 9001 :
ISO 9000 is a Quality System Management Standard. TQM is a philosophy of perpetual
improvement. The ISO Quality Standard sets in place a system to deploy policy and verifiable
objectives. An ISO implementation is a basis for a Total Quality Management implementation.
Where there is an ISO system, about 75 percent of the steps are in place for TQM. The
requirements for TQM can be considered ISO plus. Another aspect relating to the ISO Standard
is that the proposed changes for the next revision (1999) will contain customer satisfaction and
measurement requirements. In short, implementing TQM is being proactive concerning quality
rather than reactive.
TQM as a Foundation:
TQM is the foundation for activities which include;
1. Meeting Customer Requirements
2. Reducing Development Cycle Times
3. Just In Time/Demand Flow Manufacturing
4. Improvement Teams
5. Reducing Product and Service Costs
6. Improving Administrative Systems Training
Total Quality Management
Barhate Mangesh
Roll No- PG/509/MBA (I)/2009J
Page 8
Deming’s Fourteen Points
Presented below are Deming’s fourteen points for total quality management.
The Deming Theory
The Deming Theory of Management is a management philosophy based on four principles: (1)
an appreciation for systems, (2) a knowledge of variation, (3) a theory of knowledge, and (4)
psychology. Although the principles for continuous improvement are clearly profitable for
companies to implement, why has it been difficult to transform the culture of western
management to focus on quality? Deming compiled a list of seven deadly diseases that have
inhibited change in style of management. Although Deming’s Encyclopedia Britannica
videotape only highlights five, the entire list is presented in figure
Total Quality Management
Barhate Mangesh
Roll No- PG/509/MBA (I)/2009J
Page 9
Ten Steps to Total Quality Management (TQM)
The Ten Steps to TQM are as follows:
1. Pursue New Strategic Thinking
2. Know your Customers
3. Set True Customer Requirements
4. Concentrate on Prevention, Not Correction
5. Reduce Chronic Waste
6. Pursue a Continuous Improvement Strategy
7. Use Structured Methodology for Process Improvement
8. Reduce Variation
9. Use a Balanced Approach
10. Apply to All Functions
Principles of TQM :
The Principles of TQM are as follows:
1. Quality can and must be managed.
2. Everyone has a customer and is a supplier.
3. Processes, not people are the problem.
4. Every employee is responsible for quality.
5. Problems must be prevented, not just fixed.
6. Quality must be measured.
7. Quality improvements must be continuous.
8. The quality standard is defect free.
9. Goals are based on requirements, not negotiated.
10. Life cycle costs, not front end costs.
11. Management must be involved and lead.
Total Quality Management
Barhate Mangesh
Roll No- PG/509/MBA (I)/2009J
Page
10
Plan and organize for quality improvement
Processes must be Managed and Improved:
Processes must be managed and improved! This involves:
1. Defining the process
2. Measuring process performance (metrics)
3. Reviewing process performance
4. Identifying process shortcomings
5. Analyzing process problems
6. Making a process change
7. Measuring the effects of the process change
8. Communicating both ways between supervisor and user
Key to Quality:
1. The key to improving quality is to improve processes that define, produce and support
our products.
All people work in processes.
2. People
3. Get processes "in control"
4. Work with other employees and managers to identify process problems and eliminate
them
5. Managers and/or Supervisors Work on Processes
6. Provide training and tool resources
7. Measure and review process performance (metrics)
8. Improve process performance with the help of those who use the process
Total Quality Management
Barhate Mangesh
Roll No- PG/509/MBA (I)/2009J
Page
11
Planning a Change
To be successful implementing TQM, an organization must concentrate on the eight key
elements:
1. Ethics
2. Integrity
3. Trust
4. Training
5. Teamwork
6. Leadership
7. Recognition
8. Communication
Total Quality Management
Barhate Mangesh
Roll No- PG/509/MBA (I)/2009J
Page
12
TQM Problem Solving Sequence
TQM Process Improvement and Problem Solving Sequence
PLAN
(PLAN A CHANGE)
DO
(IMPLEMENT
THE CHANGE)
CHECK
(OBSERVE
THE EFFECTS)
ACTION
(EMBED THE FIX INTO
THE PROCESS
FOR GOOD)
DEFINE THE
PROBLEM
IDENTIFY POSSIBLE
CAUSES
EVALUATE POSSIBLE
CAUSES
MAKE A
CHANGE
TEST THE
CHANGE
TAKE PERMANENT
ACTION
1. Recognize that
what you are doing is a
"PROCESS"
2. Identify the
commodity
being processed.
- Process
Inference
3. Define some
measurable
characteristics of value to
the
commodity.
4. Describe
the "PROCESS"
o Process Flow
Analysis's
o Flow charts o List of steps
5. Identify the
"Big" problem
o
Brainstorming o Checklists
6.
"BRAINSTORM"
what is causing
the problem.
7. Determine
what past
data shows. o Frequency
distribution
o Pareto charts
o Control charts
- sampling
8. Determine the
relationship
between cause and
effect
o Scatter diagrams
o Regression analysis
9. Determine what
the process is doing
now
o Control charts - sampling
10. Determine
what change
would help
Your
knowledge
of the process
Scatter
diagrams
Control Charts
- sampling
Pareto analysis
****Then
make
the change.
11. Determine
what change
worked
(confirmation).
Histograms
Control charts
- sampling
Scatter
diagrams
12. Ensure the fix is
embedded in the
process and that the
resulting process is
used.
Continue to monitor
the process to
ensure:
A. The problem is
fixed for good.
and
B. The process
is good enough o Control charts
- sampling
****To ensure continuous
improvement, return
to step 5.
Total Quality Management
Barhate Mangesh
Roll No- PG/509/MBA (I)/2009J
Page
13
o Pareto analysis
The TQM Model
At the century close, the creation of the global market, international orientation of management
that sweeps national boundaries, introduction of new technologies, and shift towards customer
focused strategies, make the competition stronger than ever. The criteria for success in this
global, internationally oriented market have been changing rapidly. In order to expand business,
enter new markets, and set realistic, competitive long-term objectives, excellence became an
imperative. Management's effort has been directed towards discovering what makes a company
excellent.
To achieve excellence, companies must develop a corporate culture of treating people as their
most important asset and provide a consistent level of high quality products and services in every
market in which they operate. Such an environment has supported the wide acceptance of Total
Quality Management (TQM) which emerged recently as a new, challenging, marketable
philosophy. It involves three spheres of changes in an organization -- people, technology and
structure.
There is also a need for a systematic approach so that each element of TQMEX can be bonded
together smoothly. Oakland [1989] originated the idea of a 3-cornerstone model. The proposed
4-pillar model (Figure 3.1) brings the customer's requirement into the system. This makes the
approach to TQM more complete. The additional pillar -- satisfying customers -- is vital because
it explicitly addresses customers requirements. Without it TQM would have no objective.
The Four Pillars of TQM
The role of top management in implementation of total quality is crucial and its input on people
far-reaching. TQM, therefore, should be understood as management of the system through
systems thinking, which means understanding all the elements in the company and putting them
to work together towards the common goal. The TQMEX Model advocates an integrated
approach in order to support the transition to systems management which is an ongoing process
of continuous improvement that begins when the company commits itself to managing by
Total Quality Management
Barhate Mangesh
Roll No- PG/509/MBA (I)/2009J
Page
14
quality. The Model illuminates the elements that form a base to the understanding of TQM
philosophy and implementation of the process company-wide.
The Acceptability of TQM
Japanese TQM Model
At first, few but the Japanese took Deming seriously. Known for his legendary attacks on
executives and compassion for the worker, the Japanese sense of responsibility to one's superiors
and subordinates made it easier to accept Deming's message that management's role was to
provide the optimal conditions for the workers to do the best job.
The Japanese then extended Deming's teaching to many dimensions of management. Here are
TQM models from the Japanese Society of Quality and the Japan Standards Association that
show how extensive their definition of TQM is.
The Japanese identify three major dimensions of TQM: Daily Management, Hoshin/Policy
Management, and Cross Function Management. We will study these in detail in the course.
They can be visualized with the following picture.
TQM in UAS:
As regards quality, USA is at crossroads today.Inspite of the fact that USA developed the
techniques and concepts of SQC and TQC and the japenese imported these techniques, the
Total Quality Management
Barhate Mangesh
Roll No- PG/509/MBA (I)/2009J
Page
15
further orientation and development in philoshophy, concept and techniques in terms of Q.C.
circles and company wide quality control took place in Japan more rapidly and successfully.
While the American companies remained concerned about detecting and segregating defective
parts from good ones, the Japanese companies devised systems to reduce defects and produce
good quality products.This resulted in America losing its position of dominance not only in the
American market but also in the world.
Much of the quality movement in USA is based on tools and techniques developed by the
japenese. Adoption of these techniques requires complete re-development in both methods and
emphasis.The most critical challenge facing U.S quality movement is the development and
implementation of quality focused corporate management systems that achieve the coherence,
integration and comprehensiveness of quality management in japan. The American companies
are characterized by:
1. A high concentration of industry on relatively few companies.
2. Stress on promoting share-holders, and
3. Running the company by professional managers.
These features of autonomous organisations and professional management have a considerable
impact on the conduct of quality function. Each organisation determines independently what it
will produce and what quality policies it will adopt.
Marguardt divides the evolution of quality movement in USA in three periods:
1. Advocates for SQC- Emphasis on technical tools of control charts, lot inspection and
sampling schemes.
2. Administrators for system of quality control- Emphasis on the cost of quality and managerial
aspects of organizing the quality.
3. Advertising and selling quality consciousness-Emphasis on changing organizational culture
and providing an environment that will enable people to activate and sustain in their own work
and in products and services produced by the organistions with the focus on needs of customers.
TQM in Service Industry
Total Quality Management
Barhate Mangesh
Roll No- PG/509/MBA (I)/2009J
Page
16
TQM in Service Industry
Introduction
Today’s customer has before him the possibility of a wider choice of products & Services than
ever before .He is going to be demanding & keen on having the best services in the shortest
possible time & at the minimum cost .He will look for solutions that are more specific to his
needs thus creating opportunity of many niche market.
-Today customers avail ATM services 24 hrs
-Book airline tickets & check-in over phone
-Self-service at fast food restaurant.
-And many more
What is different ?
-Service is also a product of different kind .
-No time delay between the production & delivery of service
-A defective product can be replaced but a defective service may create a permanent damage.
Growth of Service sector
Service sector is growing rapidly due to
-Change in environment , life style etc
-Demand for new kind of services
-Advent of new technologies
-Fast development of information technology & computerisation
-Lean manufacturing . (contracting out most activities)
Challenge of Service sector
Delight customers
-In a dynamic environment which is changing fast
-In growing competitive market
-With relatively shorter product life cycle
-Requiring more customisation
Service Quality Dimensions
Quality of Services differs from manufactured products
-Special characteristics including intangibility.
-Simultaneity ( promptness )
Total Quality Management
Barhate Mangesh
Roll No- PG/509/MBA (I)/2009J
Page
17
-Heterogeneity
-Unique dimensions of some services (e.g. Banking)
The Essentials of TQM
TQM is the way of managing for the future, and is far wider in its application than just assuring
product or service quality – it is a way of managing people and business processes to ensure
complete customer satisfaction at every stage, internally and externally. TQM, combined with
effective leadership, results in an organization doing the right things right, first time.
The core of TQM is the customer-supplier interfaces, both externally and internally, and at each
interface lie a number of processes. This core must be surrounded by commitment to quality,
communication of the quality message, and recognition of the need to change the culture of the
organisation to create total quality. These are the foundations of TQM, and they are supported by
the key management functions of people, processes and systems in the organisation. This section
discusses each of these elements that, together, can make a total quality organisation. Other
sections explain people, processes and systems in greater detail, all having the essential themes
of commitment, culture and communication running through them.
Total Quality Management
Barhate Mangesh
Roll No- PG/509/MBA (I)/2009J
Page
18
The Effects of TQM
Improving Financial Services through TQM
The work described in this case study was undertaken in a young, rapidly expanding company in
the financial services sector with no previous experience with Total Quality Management
(TQM). The quality project began with a two-day introductory awareness program covering
concepts, cases, implementation strategies and imperatives of TQM. The program was conducted
for the senior management team of the company. This program used interactive exercises and
real life case studies to explain the concepts of TQM and to interest them in committing
resources for a demonstration project. The demonstration project, which used the Seven Steps of
Problem Solving (similar to DMAIC), was to show them how TQM concepts worked in practice
before they committed resources for a company-wide program.
Step 1. Define the Problem
1.1) Selecting the theme: A meeting of the senior management of the company was held.
Brainstorming produced a list of more than 20 problems. The list was prioritized using the
weighted average table, followed by a structured discussion to arrive at a consensus on the two
most important themes -- customer service and sales productivity.
Under the customer service theme, "Reducing the Turnaround Time from an Insurance Proposal
to Policy" was selected as the most obvious and urgent problem. The company was young, and
therefore had few claims to process so far. The proposal-to-policy process therefore impacted the
greatest number of customers.
An appropriate cross functional group was set up to tackle this problem.
1.2) Problem = customer desire – current status:
Current status: What did the individual group members think the turnaround is currently? As
each member began thinking questions came up. "What type of policies do we address?" Medical
policies or non-medical? The latter are take longer because of the medical examination of the
client required. "Between what stages do we consider turnaround?" Perceptions varied, with each
person thinking about the turnaround within their department. The key process stages were
mapped:
Total Quality Management
Barhate Mangesh
Roll No- PG/509/MBA (I)/2009J
Page
19
Several sales branches in different parts of the country sent proposals into the Central Processing
Center. After considerable debate it was agreed at first to consider turnaround between entry into
the computer system at the Company Sales Branch and dispatch to the customer from the Central
Processing Center (CPC). Later the entire cycle could be included. The perception of the length
of turnaround by different members of the team was recorded. It averaged:
Non-Medical Policies 17 days
Medical Policies 35 days
Invoking the slogan from the awareness program "In God we trust, the rest of us bring data" the
group was asked to collect data and establish reality. Armed with a suitably designed check sheet
they set about the task.
Customer desire: What was the turnaround desired by the customer? Since a customer survey
was not available, individual group members were asked to think as customers -- imagine they
had just given a completed proposal form to a sales agent. When would they expect the policy in
hand? From the customer's point of view they realized that they did not differentiate between
medical and non-medical policies. Their perception averaged out six days for the required
turnaround.
"Is this the average time or maximum time that you expect?" they were asked. "Maximum," they
responded. It was clear therefore that the average must be less than six days. The importance of
"variability" had struck home. The concept of sigma was explained and was rapidly internalized.
For 99.7 percent delivery within the customer limit the metric was defined.
Customer desire:
Average+3 Sigma turnaround = less than 6 days
Current status:
Non-medical policies (Average 19/Sigma 15) Average+3 sigma= 64 days
Medical (Average 37/Sigma 27) Average+3 sigma= 118 days
Total Quality Management
Barhate Mangesh
Roll No- PG/509/MBA (I)/2009J
Page
20
The Problem was therefore defined:
Reduce Average+3 sigma of turnaround for:
Non-Medical Policies From 64 to 6 days
Medical Policies From 118 to 6 days
The performance requirement appeared daunting. Therefore the initial target taken in the Mission
Sheet (project charter) was to reduce the turnaround by 50 percent -- to 32 and 59 days
respectively.
Step 2. Analysis of the Problem
In a session the factors causing large turnaround times from the principles of JIT were explained.
These were:Input arrival patterns
• Waiting times in process
- Batching of work
- Imbalanced processing line
- Too many handovers
- Non-value added activities, etc.
• Processing times
• Scheduling
• Transport times
• Deployment of manpower
Typically it was found that waiting times constitute the bulk of processing turnaround times.
Process Mapping (Value Stream Mapping in Lean) was undertaken. The aggregate results are
summarized below:
Number of operations 84
Number of handovers 13
In-house processing time (estimated) 126 man-mins.
Range of individual stage time 2 to 13 mins.
Could this be true? Could the turnaround be 126 minutes for internal processing without waiting?
The group started to question of the status quo. The change process had begun. To check this
estimate it was decided to collect data -- run two policies without waiting and record the time at
each stage. The trial results amazed everyone: Policy No. 1 took 100 minutes and Policy No. 2
took 97 minutes. Almost instantly the mindset changed from doubt to desire: "Why can't we
process every proposal in this way?"
Step 3. Generating Ideas
In the introductory program of TQM during the JIT session the advantages of flow versus batch
processing had been dramatically demonstrated using a simple exercise. Using that background a
balanced flow line was designed as follows:
Total Quality Management
Barhate Mangesh
Roll No- PG/509/MBA (I)/2009J
Page
21
1. Determine the station with the maximum time cycle which cannot be split up by reallocation --
8 minutes.
2. Balance the line to make the time taken at each stage equal 8 minutes as far as possible.
3. Reduce the stages and handovers -- 13 to 8.
4. Eliminate non-value added activities -- transport -- make personnel sit next to each other.
5. Agree processing to be done in batch of one proposal.
Changing the mindset of the employees so they will accept and welcome change is critical to
building a self-sustaining culture of improvement. In this case, the line personnel were involved
in a Quality Mindset Program so that they understood the reasons for change and the concepts
behind them and are keen to experiment with new methods of working. The line was ready for a
test run.
Step 4. Testing the Idea
Testing in stages is a critical stage. It allows modification of ideas based upon practical
experience and equally importantly ensures acceptance of the new methods gradually by the
operating personnel.
Stage 1: Run five proposals flowing through the system and confirm results. The test produced
the following results:
Average turnaround time: < 1 day
In-house processing time: 76 mins.
There was jubilation in the team. The productivity had increased by 24 percent. The head of the
CPC summarized: "I gave five files for processing, and went for a meeting. Emerging from the
meeting about 30 minutes later I was greeted by the dispatch clerk jubilantly reporting, "'Madam,
the TQM files are ready for dispatch.'" The mindset was dramatically changed and line personnel
were now keen to push the implementation.
Stage 2: It was agreed to run the new system for five days -- and compute the average and sigma
of the turnaround to measure the improvement. It was agreed that only in-house processing was
covered at this stage and that the test would involve all policies at the CPC but only one branch
as a model. This model, once proved, could be replicated at other branches.
The test results showed a significant reduction in turnaround:
1. For all non-medical policies From 64 to 42 days or 34%
2. For policies of the model branch From 64 to 27 days of 60%
The Mission Sheet goal of 50 percent reduction had been bettered for the combined model
branch and CPC. Further analysis of the data revealed other measures which could reduce the
turnaround further. Overall reduction reached an amazing 75 percent. Turnaround, which had
been pegged at 64 days, was now happening at 99.7 percent on-time delivery in 15 days.
Total Quality Management
Barhate Mangesh
Roll No- PG/509/MBA (I)/2009J
Page
22
Step 5. Implementing the Ideas
Regular operations with the new system was planned to commence. However, two weeks later it
was still not implemented. One of the personnel on the line in CPC had been released by his
department for the five-day trial to sit on the line but was not released on a regular basis. The
departmental head had not attended the TQM awareness program and therefore did not
understand why this change was required.
There were two options -- mandate the change or change the mindset to accept the change. Since
the latter option produces a robust implementation that will not break down under pressures it
was agreed that the group would summarize TQM, the journey and the results obtained in the
project so far and also simulate the process with a simple exercise in front of the department
head. This session was highly successful and led to the release of the person concerned on a
regular basis.
Step 6. Check the Result
The process was run for one month with regular checks. The results obtained were marginally
better than the trials conducted in Step 5:
Average 11 days
Sigma 9 days
Average+3 sigma 38 days
Step 7. Standardize Control/Document the Improvement Story
Total Quality Management
Barhate Mangesh
Roll No- PG/509/MBA (I)/2009J
Page
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1. Essentially the in-house processes in two centers of processing -- the CPC and one sales
branch -- had been impacted so far. To make sure that the gains were held, control charts
were introduced both locations. Sample x-bar and sigma-control charts for the CPC are
shown below:
2. A special "Grind It In" session was conducted for line personnel to ensure that the control
chart was updated every day, and any deterioration was dealt with by finding and killing
the root causes of the problems.
3. Customer reaction: Sales management and sales agents (internal customers) clearly
noticed the difference. For instance one sales manager reported that a customer had
received a policy within a week of giving a proposal and was so amazed that he said, "If
you give such service I will give you the next policy also!"
4. Adoption of a similar process at the CPC and the model branch for medical policies has
already reduced the average+3 sigma of turnaround time by 70 percent -- from 118 days
to 37 days. The corresponding all-India reduction was from 118 days to 71 days -- a 60
percent reduction.
5. The project objective of 50 percent in the first stage has been achieved.
6. A quality improvement story was compiled by the project Leader for training and
motivating all employees.
Future Actions
Non-medical policies: Goal to reduce turnaround from 42 days to about 15 days.
1. Roll out process to branches to achieve 24 days throughout the country.
2. Minimize rework by analyzing, prioritizing and training sales branches to avoid the
causes of rework.
3. Working with the bank to improve the turnaround time of banking checks.
4. Considering processing proposals while check clearance is in progress.
Medical policies: Goal to reduce turnaround from 71 days to about 24 days.
1. Roll out process to branches to reduce turnaround from 71 to 37 days.
2. Streamline the process of medical exam of the client from 37 to 24 days.
Total Quality Management
Barhate Mangesh
Roll No- PG/509/MBA (I)/2009J
Page
24
TQM Tools
Total Quality Management (TQM) Tools
Total quality management (TQM) tools help organizations to identify, analyze and assess
qualitative and quantitative data that is relevant to their business. These tools can identify
procedures, ideas, statistics, cause and effect concerns and other issues relevant to their
organizations. Each of which can be examined and used to enhance the effectiveness, efficiency,
standardization and overall quality of procedures, products or work environment, in accordance
with ISO 9000 standards (SQ, 2004).
According to Quality America, Inc. (ReVelle, 2003) the number of TQM tools is close to 100
and come in various forms, such as brainstorming, focus groups, check lists, charts and graphs,
diagrams and other analysis tools. In a different vein, manuals and standards are TQM tools as
well, as they give direction and best practice guidelines to you and/or your staff.
TQM tools illustrate and aid in the assimilation of complicated information such as:
· identification of your target audience
· positive and negative forces affecting business
· assessment of customer needs
· competition analysis
· market analysis
· brainstorming ideas
· productivity changes
· various statistics
· staff duties and work flow analysis
· statement of purpose
· financial analysis
· model creation
Total Quality Management
Barhate Mangesh
Roll No- PG/509/MBA (I)/2009J
Page
25
· business structure
· logistics analysis
The list goes on, though essentially TQM tools can be used in any situation, for any number of
reasons, and can be extremely effective if used properly.
TQM Tools
The following are some of the most common TQM tools in use today. Each is used for, and
identifies, specific information in a specific manner. It should be noted that tools should be used
in conjunction with other tools to understand the full scope of the issue being analyzed or
illustrated. Simply using one tool may inhibit your understanding of the data provided, or may
close you off to further possibilities.
Pie Charts and Bar Graphs
· Used to identify and compare data units as they relate to one issue or the whole, such as
budgets, vault space available, extent of fonds, etc.
Histograms
· To illustrate and examine various data element in order to make decisions regarding them.
· Effective when comparing statistical, survey, or questionnaire results.
Run Chart
· Follows a process over a specific period of time, such as accrual rates, to track high and low
points in its run, and ultimately identify trends, shifts and patterns.
Total Quality Management
Barhate Mangesh
Roll No- PG/509/MBA (I)/2009J
Page
26
Pareto Charts / Analysis (designed by Vilfredo Pareto)
· Rates issues according to importance and frequency by prioritizing specific problems or
causes in a manner that facilitates problem solving.
· Identify groupings of qualitative data, such as most frequent complaint, most commonly
purchased preservation aid, etc. in order to measure which have priority.
· Can be scheduled over select periods of time to track changes. They can also be created in
retrospect, as a before and after analysis of a process change.
Force Field Analysis
· To identify driving and restraining forces occurring in a chosen process in order to
understand why that particular process functions as it does. For example, identifying the
driving and restraining forces of catering predominantly to genealogists.
· To identify restraining forces that need to be eradicated, or driving forces that need to be
improved, in order to function at a higher level of efficiency.
Total Quality Management
Barhate Mangesh
Roll No- PG/509/MBA (I)/2009J
Page
27
Cause and Effect, Ishikawa or Fishbone Diagrams (designed by Kauro Ishikawa)
· Illustrates multiple levels of potential causes (inputs), and ultimate effects (outputs), of
problems or issues that may arise in the course of business.
· May be confusing if too many inputs and outputs are identified. An alternative would be a tree
diagram, which is much easier to follow.
Focus Groups
· Useful for marketing or advertising organizations to test products on the general public.
· Consist of various people from the general public who use and discuss your product,
providing impartial feedback to help you determine whether your product needs improvement or
if it should be introduced onto the market.
Brainstorming and Affinity Diagrams
· Teams using creative thinking to identify various aspects surrounding an issue.
· An affinity diagram, which can be created using anything from enabling software to post-it
notes organized on a wall, is a tool to organize brainstorming ideas.
Tree Diagram
· To identify the various tasks involved in, and the full scope of, a project.
· To identify hierarchies, whether of personnel, business structure, or priorities.
· To identify inputs and outputs of a project, procedure, process, etc.
Total Quality Management
Barhate Mangesh
Roll No- PG/509/MBA (I)/2009J
Page
28
Flowcharts and Modelling Diagrams
· Assist in the definition and analysis of each step in a process by illustrating it in a clear and
comprehensive manner.
· Identify areas where workflow may be blocked, or diverted, and where workflow is fluid.
· Identify where steps need to be added or removed to improve efficiency and create
standardized workflow.
Total Quality Management
Barhate Mangesh
Roll No- PG/509/MBA (I)/2009J
Page
29
Scatter Diagram
· To illustrate and validate hunches
· To discover cause and effect relationships, as well as bonds and correlations, between two
variables
· To chart the positive and negative direction of relationships
Relations Diagram
· To understand the relationships between various factors, issues, events, etc. so as to
understand their importance in the overall organizational view.
PDCA
· The Plan-Do-Check-Act style of management where each project or procedure is planned
according to needs and outcome, it is then tested, examined for efficiency and effectiveness, and
then acted upon if anything in the process needs to be altered.
· This is a cyclical style to be iterated until the process is perfected.
All of these TQM tools can be easily created and examined by using various types of computer
software (Pollock, 2003) or by simply mapping them out on paper. They can also be easily
integrated into team meetings, organizational newsletters, marketing reports, and for various
other data analysis needs. Proper integration and use of these tools will ultimately assist in
processing data such as identifying collecting policies, enhancing work flow such as mapping
acquisition procedures, ensuring client satisfaction by surveying their needs and analyzing them
accordingly, and creating an overall high level of quality in all areas of your organization.
Total Quality Management
Barhate Mangesh
Roll No- PG/509/MBA (I)/2009J
Page
30
Wrapping Up
In world trade, for buyers and sellers to work together there must be trust. Standards can provide the necessary bridge of confidence and understanding that builds mutual trust,
helping trade to thrive.
Sales are the lifeblood of any business, so the implementation of standards helps sales. This is the case whatever the size of the business or the sector they are operating in.
Establishing clear standards creates order in an increasingly complex world. Standards meet changing
market needs and are customer driven. Businesses benefit from standards because they establish
ground rules that help to guarantee quality. Achieving certification to a standard might add reassurance
for its customers and enables a business to boost its sales performance. Consumers benefit because
their safety and their satisfaction are both greatly enhanced. Governments benefit because such
measures contribute to greater productivity and economic growth, and safer work, leisure and home
environments.
IBM was the world's first national standards making body. Today it is the most prestigious
international standards institution. It works with the British government, manufacturers and other
stakeholders to create quality standards. These guarantee fitness for purpose, and help British
manufacturers to gain a competitive edge both in the UK and internationally. IBM assists British
businesses in all markets to grow and to concentrate on meeting customers' requirements.