TQM Principles

Besterfield: Quality Control, 8th ed.. © 2009 Pearson Education, Upper Saddle River, NJ 07458.All rights reserved

Quality ControlQuality Control

Chapter 2- Total Quality Chapter 2- Total Quality Management and Management and

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OutlineOutline

Introduction Basic Approach Leadership Customer Satisfaction Employee Involvement


Outline-ContinuedOutline-Continued

Continuous Process Improvement Supplier Partnership Performance Measures Deming’s 14 Points


Learning ObjectivesLearning Objectives

When you complete this chapter, you should:

Know the six basic concepts, the purpose and benefits of TQM.

Understand the twelve characteristics of a leader.

Describe the necessary management activities to implement a TQM program.

Know the importance of customer satisfaction and how to achieve it.


Learning Objectives-cont’d.Learning Objectives-cont’d.

When you complete this chapter, you should:

Describe the process necessary for effective employee involvement.

Describe continuous process improvement and the problem-solving method.

Know the importance of supplier partnership and techniques to measure effectiveness.

Be able to describe the measures of performance.


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Total Quality Management (TQM) is the application of quantitative methods and human resources to improve all the processes within an organization and exceed customer needs now and in the future.

IntroductionIntroduction


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The purpose of TQM is to provide a quality product to customers, which will, in turn, increase the productivity and lower cost

TQM allows the organization to achieve the business objectives of profit and growth

Job Security. TQM creates a satisfying place to work

TQMTQM


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A company will not begin the transformation to TQM until it is aware that the quality of the product or service must be improved

TQM requires a cultural change TQM is mandated by the customer TQM is better way to run a business and

compete in domestic and word markets Quality is first among equal cost and service Improvements in quality lead directly to

increased productivity

TQMTQM


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Basic Approach:1. A committed and involved

management to provide long-term top-to-bottom organizational support

2. An unwavering focus on the customer

3. Effective involvement and utilization of the entire work force

TQMTQM


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Basic Approach cont’d:

4. Continuous improvement of the business and production processes

5. Treating suppliers as partners

6. Establishing performance measures for the processes

TQMTQM


11Clear VisionCustomer Satisfaction

LeadershipProcess Orientation

Focus on Quality

Employee Involvement

Supplier Partnering

Continuous Improvement

Business Growth

The Road to Business Growth

TQMTQM


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Quality Element

Previous State TQM

Definition Product-Oriented

Customer-oriented

Priorities Second to service and cost

First among service and cost

Decisions Short-term Long-term

Emphasis Detection Prevention

Errors Operations System

Responsibility Quality Control Everyone

Prob. Solving Managers Teams

Procurement Price Life-cycle costs

Manager’s Role Plan, enforce etc Delegate, facilitateTable2.1 New and Old CulturesTable2.1 New and Old Cultures

TQMTQM


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Quality involves the design of the product and the process

TQM is not something that will occur overnight, it takes a long time to build the appropriate emphasis and techniques into the culture

TQMTQM


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The ability to positively influence people and systems to have a meaningful impact and achieve results

LeadershipLeadership


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Recognize that the quality function is no more responsible for product quality….Quality is the responsibility of everyone in the organization

Commitment to quality becomes part of the corporation’s business strategy and leads to enhanced profit and an improved competitive position



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Leadership System: Refers to how decisions are made,

communicated, and carried out at all levels; mechanisms for leadership development, self-examination, and improvement

Effectiveness of leadership system depends in part on its organizational structure



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Leadership Characteristics:

1. Give priority attention to external and internal customers and their needs

2. Empower, rather than control, subordinates

3. Emphasize improvement rather than maintenance

4. Emphasize prevention

5. Encourage collaboration rather than competition



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Leadership Characteristics Cont’d:

6. Train and coach, rather than direct and supervise

7. Learn from problem

8. Improve communications

9. Demonstrate their commitment to quality

10.Choose suppliers on the basis of quality, not price



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Leadership Characteristics Cont’d:

11. Establish organizational systems to support the quality effort

12. Encourage and recognize team effort

Leadership is essential during every phase of the implementation process and particular

at the start!!!!!



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Begins with the Senior Management’s and the CEO’s commitment

Involvement is required Requires the education of Senior Management

in TQM concepts Timing of the implementation process can be

very important Formation of the Quality Council Development of Core Values, Vision Statement,

Mission Statement, Quality Policy Statement

TQMTQM Implementation Implementation


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Quality Council: Composed of: CEO, the Senior Managers

of the functional areas, such as design, marketing, finance, production, and quality; and a coordinator or consultant

The coordinator will ensure that the team members are empowered and know their responsibilities



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Quality Council Duties:

1. Develop the core values, vision, mission, and quality policy statements

2. Develop the strategic long-term plan with goals and the annual quality improvement program with objectives

3. Create the total education and training plan

4. Determine and continually monitor the cost of poor quality

TQM TQM ImplementationImplementation


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Quality Council Duties:

5. Determine the performance measures for the organization

6. Determine projects that improve the processes

7. Establish multifunctional project and departmental or work group team

8. Establish or revise the recognition and reward system

TQM ImplementationTQM Implementation


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Core Values for the Malcolm Baldrige National Quality Award:

Visionary Leadership Customer-driven Excellence Organizational & Personal Learning Valuing Employees & Partners



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Core Values for the Malcolm Baldrige National Quality Award Cont’d:AgilityFocus on the FutureManagement for InnovationManagement by Fact



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Core Values for the Malcolm Baldrige National Quality Award Cont’d: Social Responsibility Focus on Results and Creating Value Systems Perspective



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Quality Statements: Include the Vision Statement, Mission

Statement, and Quality Policy Statement They are part of the strategy planning

process, which includes goals and objectives

Develop with input from all personnel



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Seven Steps to Strategy Planning: Customer Needs Customer Positioning Predict the Future Gap Analysis Closing the Gap Alignment Implementation

TQM TQM ImplementationImplementation


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Who is the Customer?Who is the Customer?

External CustomerExternal Customer -- -- those who receive the final products. Occurs normally at the organizational level

Internal CustomersInternal Customers -- -- occur at the process and cross-departmental levels within the company

Identifying Customers:Identifying Customers: What parts or products are produced? Who uses our parts or products? Who do we call, correspond/interact with? Who supplied the inputs to the process?

CustomerCustomer Satisfaction Satisfaction


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Checklist to improve satisfaction:Checklist to improve satisfaction:

1. Who are my customers?

2. What do they need?

3. What are their measures and expectations?

4. How is my product or service?

5. Does my product or service exceed expectations?

6. How do I satisfy those needs?

7. What corrective action is necessary?

8. Are customers included on teams?

Customer Customer SatisfactionSatisfaction – – Cont’d.Cont’d.


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Customer Feedback:Customer Feedback:

1. Comment cards and formal surveys

2. Focus groups

3. Direct customer contacts

4. Field Intelligence

5. Study complaints

6. Monitoring the Internet

CustomerCustomer Satisfaction – Satisfaction – Cont’d.Cont’d.


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Customer Complaints:Customer Complaints: Dissatisfied customers rarely complain Opportunity for quality improvement Procedure for customer complaints, such

as: Accept complaints Feedback complaint information to all people Analyze complaints by doing effective work Eliminate the root cause Report results of all investigations and

solutions to everyone involved

Customer Customer SatisfactionSatisfaction – – Cont’d.Cont’d.


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Basic Elements of Service Quality:Basic Elements of Service Quality: Organization Customer Communication Front-Line People Leadership

CustomerCustomer Satisfaction – Satisfaction – Cont’d.Cont’d.


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…………. . any activity by which employees any activity by which employees participate in work-related decisions and participate in work-related decisions and improvement activities, with the objectives improvement activities, with the objectives of tapping the creative energies of all of tapping the creative energies of all employees and improving their motivationemployees and improving their motivation

EmployeeEmployee Involvement Involvement


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Education and Training:Education and Training: The cost of education and training for all

personnel is enormous and the time to achieve it is lengthy

Educational needs vary by function area, department and job

Quality Council may want to establish a project team for the planning of the program

Employee Employee InvolvementInvolvement – – Cont’d.Cont’d.


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The Goal is to achieve perfection:The Goal is to achieve perfection: View work as a process Make all processes effective, efficient,

and adaptable Anticipate changing customer needs Control in-process performance using

measures such as scrap reduction… Maintain constructive dissatisfaction with

the present level of performance

ContinuousContinuous Process Process ImprovementImprovement


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The Goal is to achieve perfection:The Goal is to achieve perfection: Eliminate waste and rework Investigate non-value added activities Eliminate nonconformities Use benchmarking to stay competitive Hold gains Lessons learned Use tools such as SPC, design of

experiments etc.



Continuous Continuous ProcessProcess Improvement Improvement

PROCESSPeople

EquipmentMethod

ProceduresEnvironment

Materials

FEEDBACK

OUTPUTInformation

DataProduct

Service, etc.

OUTCOMES

INPUTMaterials

MoneyInformation

Data, etc

CONDITIONS

Figure 2-3 Input/output process model


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Problem-Solving Method:Problem-Solving Method:

1. Identify the opportunity

2. Analyze the current process

3. Develop the optimal solution(s)

4. Implement changes

5. Study the results

6. Standardize the solution

7. Plan for the future



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Problem-Solving Method – Phase I:Problem-Solving Method – Phase I: Identify the opportunity

Identify and prioritize opportunities for improvement

1. Is the problem important and not superficial and why?

2. Will the problem solution contribute to the attainment of goals?

3. Can be problem be defined clearly using numbers?

ContinuousContinuous ProcessProcess ImprovementImprovement


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Problem-Solving Method – Phase I:Problem-Solving Method – Phase I: Form a team

Select the team leader and determine goals and deadlines

Define the Scope

Develop a good problem statement that states the facts, focuses on what is known and emphasizes the impact on the customer.



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Problem-Solving Method – Phase I:Problem-Solving Method – Phase I: Develop a comprehensive charter

that specifies Authority Objective and scope Composition Direction and control General

Continuous Continuous ProcessProcess ImprovementImprovement


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Problem-Solving Method – Phase II:Problem-Solving Method – Phase II: Analyze the current process

Develop a process flow Define the target performance

measures Collect all available data and

information Determine the root cause

ContinuousContinuous ProcessProcess ImprovementImprovement


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Problem-Solving Method – Phase III:Problem-Solving Method – Phase III: Develop the optimal solution

Determine possible solutions Judge possible solutions for greatest

potential for success Categorize solutions as short range

or long range



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Problem-Solving Method – Phase IV:Problem-Solving Method – Phase IV: Implement Changes

Prepare the implementation plan Obtain approval for the plan Develop implementation plan report



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Problem-Solving Method – Phase V:Problem-Solving Method – Phase V: Study the results

Take measurements Evaluate results Identify unforeseen problems as a

result of the changes



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Problem-Solving Method – Phase VI:Problem-Solving Method – Phase VI: Standardize the Solution

Institutionalize the change Certify the quality peripherals Certify operators Cross-training



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Problem-Solving Method – Phase VII:Problem-Solving Method – Phase VII: Plan for the Future

Conduct regular scheduled reviews Establish systems to identify areas for

future improvement Incorporate process measurement and

team problem solving in all work activities

Reduce complexity, variation and out-of-control processes



On average 40% or more of product or service cost is due to procurement. The supplier should be treated as an extension of the process.

This requires:Long term relationship with

supplier(s)Good supplier management

SupplierSupplier Partnership Partnership


Supplier Selection Criteria:Supplier Selection Criteria: Quality of parts/raw materials

Certified? On-time delivery 100% delivery Technology

Supplier Supplier PartnershipPartnership


ServiceBilling ErrorsSales per square feetActivity time

ProductionYieldInventory turnsOn-time delivery

PerformancePerformance Measurements Measurements


Cost of Poor Quality:Cost of Poor Quality: Prevention Costs:

Costs of minimizing failure and appraisal costs

Appraisal Costs: Costs of determining the degree of

conformance to quality requirements



Cost of Poor Quality:Cost of Poor Quality: Internal Failure Costs:

Costs resulting from defects found before the customer receives the product or service

External Failure Costs: Costs resulting from defects found after the

customer receives the product or service



Optimum Cost of Poor QualityOptimum Cost of Poor Quality Total Quality Costs = Internal and External

Failure Costs + Prevention and Appraisal Costs Poor quality usually is a result of low investment

in prevention and appraisal This results in an increase in the failure costs



Optimum Cost of Poor QualityOptimum Cost of Poor Quality As more money/effort is invested in

prevention and appraisal, the quality improves which in turn drives the failure costs down.

The total costs of poor quality is at its lowest when the failure costs are non existent.



Malcolm Baldrige National Quality Malcolm Baldrige National Quality AwardAward

The Baldrige Award is given by the President of the United States to businesses —manufacturing and service, small and large —and to education and health care organizations that apply and are judged to be outstanding in seven areas



Malcolm Baldrige National Quality Malcolm Baldrige National Quality AwardAward

Core Values/ConceptsCore Values/Concepts Visionary leadershipVisionary leadership Customer-driven excellenceCustomer-driven excellence Org. and personal learningOrg. and personal learning Valuing employees and partnersValuing employees and partners AgilityAgility Focus on the futureFocus on the future



Malcolm Baldrige National Quality Malcolm Baldrige National Quality

AwardAwardCore Values/ConceptsCore Values/Concepts Managing for innovationManaging for innovation Management by factManagement by fact Social ResponsibilitySocial Responsibility Focus on results and creating valueFocus on results and creating value Systems perspectiveSystems perspective



Unacceptable

Poor

Good

Best

High lossHigh loss

Loss (to Loss (to producing producing organizationorganization, customer, , customer, and society)and society)

Low lossLow loss

FrequencyFrequency

LowerLower TargetTarget UpperUpper

SpecificationSpecification

Target-oriented Target-oriented quality yields more quality yields more product in the “best” product in the “best” categorycategory

Target-oriented Target-oriented quality brings quality brings product toward the product toward the target valuetarget valueConformance-oriented Conformance-oriented quality keeps products quality keeps products within 3 standard within 3 standard deviationsdeviations

L = DL = D22CCwherewhere

L =L =loss to loss to societysocietyD =D =distance from distance from target valuetarget valueC =C = cost of cost of deviationdeviation

Taguchi’sTaguchi’s Loss Function Loss Function


1. Create consistency of purpose

2. Lead to promote change

3. Build quality into the product; stop depending on inspection

4. Build long term relationships based on performance, not price

5. Continuously improve product, quality, and service

Deming’sDeming’s 14 Points 14 Points


6. Start training

7. Emphasize leadership

8. Drive out fear

9. Break down barriers between departments

10. Stop haranguing workers



11. Support, help, improve

12. Remove barriers to pride in work

13. Institute a vigorous program of education and self-improvement

14. Put everybody in the company to work on the transformationtion


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TQM Principles