GE 6757

TOTAL QUALITY MANAGEMENT

UNIT I - INTRODUCTION

Introduction – Need for Quality – Evolution of quality- Definition of quality –

Dimensions of manufacturing and service quality – Basic concepts of TQM –
Definition of TQM – TQM Frame work – Contributions of Deming, Juran and
Crosby – Barriers to TQM - Quality statements – Customer focus – Customer
orientation, Customer satisfaction, Customer complaints, Customer retention –
Costs of Quality.

INTRODUCTION TO QUALITY
Total Quality Management (TQM) is an enhancement to the traditional way of
doing business.
Total - Made up of the whole
Quality - Degree of Excellence a Product or Service provides.
Management - Art of handling, controlling, directing etc.

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.
One of the important issues that business has focused on in the last two decades
is “quality”. The other issues are cost and delivery. Quality has been widely
considered as a key element for success in business in the present competitive
market. Quality refers to meeting the needs and expectations of customers. It is
important to understand that quality is about more than a product simply working
properly. Quality refers to certain standards and the ways and means by which those
standards are achieved, maintained and improved. Quality is not just confined to
products and services. It is a homogeneous element of any aspect of doing things with
high degree of perfection. For example Business success depends on the quality
decision making.

EVOLUTION OF QUALITY

PERIOD EVENTS
Prior to the Quality is an art
20th century Demands overcome potential production
An era of workmanship
F.Taylor The scientific approach to management resulting in
1900s rationalization of work and its break down leads to
greater need for standardization, inspection and
supervision
Shewart Statistical beginnings and study of quality control. In
1930s parallel, studies by R A Fisher on experimental design;
the beginning of control charts at western Electric in
USA
Late Quality standards and approaches are introduced in
1930s France and Japan.
Beginning of SQC, reliability and maintenance
engineering
1942 Seminal work by Deming at the ministry of war in
USA on quality control and sampling
Working group setup by Juran and Dodge on SQC in
US army
Concepts of acceptance sampling devised
1944 Daodge and Deming carried out seminal research on
acceptance sampling
1945 Founding of the Japan standard association
1946 Founding of the ASQC
1950 Visit of Deming in Japan at the invitation of K
Ishikawa
1951 Quality assurance increasingly accepted
1954 TQC in Japan ; Book published 1956
1957 Founding of European organization for the control of
quality
1961 The Martin Co in USA introduces the zero defects
 approach while developing and producing Pershing
Missiles. Quality motivation is starting in the US and
integrated programmes begun
1962 Quality circles are started in Japan
1964 Ishikawa publishes book on Quality management
1970 Iskiawa publishes the book on the basics of quality
circles and the concept of Total Quality is affirmed and
devised in Japanese industries
1970 to Just – in –Time and quality become crucial for
1980 competitiveness. A large number of US and European
corporations are beginning to appreciate the advance
of Japan’s industries. Taguchi popularizes the use of
environmental design to design robust systems and
products
1980+ Facing the rising sun challenge in quality management
Development and introduction of FMSs and greater
dependence on supplier contracts.
Growth of economic based on quality control,
information software packages
1990+ The management of quality has become a necessity
that is recognized at all levels of management
Increasing importance is given to off line quality
management for the design of robust manufacturing
processes and products. The growth of process
optimization

QUALITY – DEFINITION
1. Predictable degree of uniformity and dependability at low cost and suited to
the market -Deming
2. Fitness for use-Juran
3. Conformance to requirements - Crosby
4. Minimum loss imparted by a product to society from the time the product is
shipped - Taguchi
5. A way of managing tile organization -Feigenbaum
6. Correcting and preventing loss, not living with loss - Hosffin .
7. The totality of characteristics of an entity that bear on its ability to satisfy
stated and implied needs – ISO
QUANITIFICATION OF QUALITY:
Q = P/E

P = Performance E = Expectations

DIMENSIONS OF QUALITY:
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Dimension Meaning and Example
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Performance - Primary product characteristics, such as the brightness of the picture
Features - Secondary characteristics, added features, such as remote control
Conformance - Meeting specifications or industry standards, workmanship
Reliability - Consistency of performance over time, average time of the unit to fail
Durability - Useful life, includes repair
Service - Resolution of problems and complaints, ease of repair
Response - Human – to – human interface, such as the courtesy of the dealer
Aesthetics - Sensory characteristics, such as exterior finish
Reputation - Past performance and other intangibles, such as being ranked first
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QUALITY PLANNING
The following are the important steps for quality planning.
1. Establishing quality goals.
2. Identifying customers.
3. Discovering customer needs.
4. Developing product features.
5. Developing process features.
6. Establishing process controls and transferring to operations.

IMPORTANT POINTS TO BE NOTED WHILE QUALITY PLANNING

1. Business, having larger market share and better quality, earn returns much
higher than their competitors.
2. Quality and Market share each has a strong separate relationship to profitably.
3. Planning for product quality must be based on meeting customer needs, not just
meeting product specifications.
4. For same products. We need to plan for perfection. For other products, we need
to plan for value.

QUALITY COSTS
1. PREVENTION COST
Marketing / Customer / User.
Product / Service / Design Development.
Purchasing
Operations (Manufacturing or Service)
Quality Administration.

2. APPRAISAL COST
Purchasing Appraisal Costs.
Operations Appraisal Costs
External Appraisal Costs
Review of Test and Inspection Data
Miscellaneous Quality Evaluations

3. INTERNAL FAILURE COST

Product or Service Design Failure Costs (Internal)
Purchasing Failure Costs
Operations (Product or Service) Failure Costs

4. EXTERNAL FAILURE COST

Complaint Investigations of Customer or User Service
Returned Goods
Retrofit and Recall Costs
Warranty Claims
 Liability Costs
Penalties
Customer or User Goodwill
Lost Sales

Why TQM:
1. A question of survival in the intense competitive environment
2. Increasing customer consciousness

DEFINITIONS OF TQM:

1. TQM is the management approach of an organization, centered on quality, based

on me participation of all its members and aiming at long-term success through
customer satisfaction. and benefits to all members of me organization and to
society.- ISO

2. TQM is an integrated organizational approach in delighting customers (both

internal and external) by meeting their expectations on a continuous basis through
every one involved with the organization working on continuous improvement in
all products, services, and processes along with proper problem solving
methodology - INDIAN STATISTICAL INSTITUTE ( ISI )

3. TQM is a. people - focused management system that aims at continual increase in

customer satisfaction at continually lower cost. TQM is a total system approach
(not a separate area of program ), and an integral part of high level strategy. It
works horizontally across functions and departments, involving all employees, top
to bottom, and exceeds backwards and forward to include the supply chain and
the customer chain – TOTAL QUALITY FORUM OF USA
CHARACTERISTICS
1. Customer Oriented
2. Long term commitment for continuous improvement of all process
3. Team work
4. Continuous involvement of top management
5. Continuous improving at all levels and all areas of responsibility

BASIC CONCEPTS OF TQM:

1. Top management commitment
2. Focus on the customer – Both internal and external
3. Effective involvement and utilization of entire work force
4. Continuous improvement
5. Treating suppliers as partners
6. Establishing performance measures for the processes

PRINCIPLES OF TQM:
1. Customers requirements - ( both internal & external) must be met first time &
every time
2. Everybody must be involved
3. Regular two way communication must be promoted I
4. Identify the training needs and supply it to the employees
5. Top management commitment is must
6. Every job must add value
7. Eliminate waste & reduce total cost
8. Promote creativity
9. Focus on team work.
NEW AND OLD CULTURES :
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Quality Element Previous State TQM
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Definition Product Oriented Customer Oriented
Priorities Second to service First among equals of
and cost service and cost
Decisions Short term Long term
Emphasis Detection Prevention
Errors Operations System
Responsibility Quality control Everyone
Problem Solving Managers Teams
Procurement Price Life cycle costs,
Partnership
Manager‟s Role Plan, assign, control Delegate, coach,
and enforce facilitate and mentor

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TQM FRAME WORK:
GURUS OF TQM :

SHEWHART - Control chart theory

- PDCA Cycle
DEMING - Statistical Process Control
JURAN - Concepts of SHEWHART - Return on Investment ( ROI )
FEIGANBAUM - Total Quality Control
- Management involvement
- Employee involvement
- Company wide quality control
ISHIKAWA - Cause and Effect Diagram
- Quality Circle concept
CROSBY - “Quality is Free”
- Conformance to requirements
TAGUCHI - Loss Function concept
- Design of Experiments

OBSTACLES IN IMPLEMENTING TQM :

Lack of Management Commitment

Inability to change Organizational culture
Improper planning
Lack of continuous training and education
Incompatible organizational structure and isolated individuals and
departments
Ineffective measurement techniques and lack of access to data and results
Paying inadequate attention to internal and external customers
Inadequate use of empowerment and teamwork
Failure to continually improve
BENEFITS OF TQM :
Improved quality
Employee participation
Team work
Working relationships
Customer satisfaction
Employee satisfaction
Productivity
Communication
Profitability
Market share

CONTRIBUTIONS OF QUALITY GURUS:

I. W.EDWARDS DEMING
Deming, an American, was the senior quality guru.

1928 – awardede doctorate in mathematical physics.

1946 – after sharing his expertise in statistical quality control to help the US war
effort during world war II, the war department sent Deming to Japan to help nation
recover from its wartime losses.
1951 – after having impressed by his contributions, the Japanese established the
Deming prize. Deming prize is awarded annually to firms that distinguish themselves
with quality management programs.
1956 – awarded the shewhart medal by the American society of quality control.
1960 – awarded by the Japanese emperor with the second order of the Sacred
Treasure for his teachings.
Deming was a prominent consultant, teacher and author on the subject of quality. He
has published more than 200 works, including well-known books 'Quality' ,
'Productivity and Competitive Position' , and 'Out of the Crisis'.

DEMING'S CONTRIBUTIONS:
Deming's contributions can be grouped under the following four topics:
1. Deming's 14 points on route to Quality.
2. Deming cycle (or PDCA Cycle)
3. Seven deadly diseases of Management
4. System of profound knowledge.

1. DEMING'S 14 POINTS:
Deming Compiled a famous list of 14 points, which he believed were the
prescription needed to achieve quality in an organisation.
1. Create constancy of purpose toward improvement of product and service.
2. Adopt the new philosopphy.
3. Cease dependence on inspection to achieve quality.
4. End the practice of awarding business on the basis of prize tag.
5. Improve constantly and forever the system of production and service.
6. Institute Training.
7. Institute Leadership.
8. Drive out fear.
9. Break down barriers between departments.
10.Eliminate slogans,exhortations, and targets for the work force.
11.Eliminate work standards (quotas) on the factory floor.
12.Remove barriers to pride of workmanship.
 13.Institute a vigorous program of education and self-improvement.
14.Ccomplish the transformation.

2. DEMING CYCLE (or PDCA CYCLE):

Deming encouraged a systematic approach to problem solving and promoted the
widely known plan. Do, check, Act (PDCA) cycle. The PDCA cycle is also known as
the Deming cycle or Deming wheel, although it was developed by a colleague of
Deming, Dr.Walter A.Shewhart.

It is an universal improvement methodology, the idea is to constantly improve, and

thereby reduce the difference between the requirements of the customer and the
performance of the process.
The cycle is about learning and ongoing improvement, learning what works and what
does not in a systematic way: and the cycle repeats: after one cycle is complete,
another is started.

3. SEVEN DEADLY DISEASES OF WESTERN MANAGEMENT:

The implementation of Demng's 14 points can transform the western style of
management. This transformation can fully materialize only when certain bad
practices, called by Deming unforgivable sins od deadly diseases (DD), are
eliminated.
1. Lack of consistency of purpose.
 2. Emphasis on short term profits.
3. Reliance on performance appraisal and merits.
4. Staff mobility.
5. Reliance on financial figures.
6. Excessive medical costs.
7. Excessive legal costs.

4. SYSTEM OF PROFOUND KNOWLEDGE:

The system of profound knowledge, or management by positive co-operation,
is described by Deming. The four ingredients (or elements) of the system of profound
knowledge that is necessary to learn and practice are given below.
1. Appreciation for a system.
2. Knowledge of statistical theory.
3. Theory of knowledge.
4. Knowledge of psychology.

II. JOSEPH M.JURAN

Juran born in Romania (1904) and emigrated to America in 1912.

1951 – published "Quality control Handbook".

Mid 1950's – like Deming, travelled to Japan to conduct top and middle level
executive seminars on planning, organisational issues, management responsibilities
for quality and the need to set and monitor improvement target goals.
Juran has authored hundreds of papers and 12 books, including "Juran's Quality
control Handbook", "Quality planning and Analysis", and "Juran on leadership for
quality".
Juran has been awarded over 30 medals and fellowships world wide, including
Japan's highest honour for a non-Japaneses citizen, the second order of the Sacred
treasure presented by the Emperor.

JURAN'S CONTRIBUTIONS:
Juran's contributions can be studied under the following six topics:
1. Internal Customer
2. Cost of quality
3. Quality trilogy
4. Juran's 10 steps for quality improvement
5. The breakthrough concept.

1.INTERNAL CUSTOMER:
Juran realised that the customer was not just the end customer and that each
person along the chain has an internal customer. Each person along the chain, fro
product designer to final user, is a supplier and a customer.
In addition, the person will be a process, carrying out some transformation or
activity. Therefore Juran maintained that at each stage was a "three role model".
Supplier, Process and Customer.
2.COST OF QUALITY:
Juran classified the cost of quality into three classes as:
(i) Failuer costs: Scrap, rework, corrective actions, warranty claims,
customer complaints and loss of customer.
(ii)Appraisl Costs: Inspection, compilance auditing and investigations.
(iii) Prevention costs: Training, Preventive auditing and process
improvement implementation
Juran demonstrated the potential for increased profits that would result if the costs of
poor quality could be reduced.

3.JURAN'S QUALITY TRILOGY:

Juran views quality as fitness-for-use. He also believes that roughly 80% of
quality defects are managemnet controllable. Thus management has the responsibility
to correct this deficiency.
Juran divides quality management into three parts. They are given below.
1. Quality Planning
2. Quality Control
3. Quality improvement
According to Juran, quality planning is necessary to establish process that are capable
oof meeting quality standards. Quality control is necessary to know when the
corrective action is needed and the quality improvement will help to find better ways
of doing things.
The entire concepts of Juran's quality trilogy can be summarised as below.
1.Quality Planning:
• Identify the customers
• Determinr the customer's needs
• Develop product features
• Establish quality goals
• Develop a process
• Prove Process capability
2.Quality Control:
• Choose control subjects
• Choose units of measurement
• Establish measurement
• Establish standards of performance
• Measure actual performance
• Interpret the difference
• Take action on the difference

3.Quality Improvement:
• Prove need for improvement
• Identify specific projects for improvement
• Organise to guide the projects
• Organise for diagnosis – for discovery of causes
• Diagnose to find the causes
• Provide remedies
• Prove that remedies are effective under the operating conditions
• Provide for control to hold gains

4. JURAN'S 10 STEPS FOR QUALITY IMPROVEMENT:

1. Build awareness of the need and opportunity for improvement.
2. Set goals for improvement.
3. Organise to reach the goals.
4. Provide training.
5. Carryout projects to solve problems.
6. Report Progress.
7. Give Recognition.
8. Communicate results.
9. Keep score.
 10.Maintain momentum by making annual improvement part of the regular
systems and processes of the company.

5. THE BREAKTHROUGH CONCEPT:

Like the Deming cycle, Juran's breakthrough concerns itself with the
product/service life cycle. In essence, it splits it up into two areas: the "journey from
symptom to cause" and the "journey from cause to remedy".

III. PHILIP CROSBY

Crosby is another of the American quality gurus who rose to international
frame mainly thanks to his teachings on quality management. He is best known for
the concepts of 'Zero Defects' and 'Do it right first time'.

He has authored many books, including "Quality is free", "Quality without

Tears", and "Let's talk Quality and Leading: The art of being an executive".
He was the founder and chairman of the board of career IV, an executive management
consulting firm. He also founded Philip Crosby associates Inc. And the Quality
College.
CROSBY CONTRIBUTIONS:
Crosby is known for his following contributions:
1. Four absolutes of quality.
2. Fourteen steps to quality management.
3. Croby's Quality vaccine.
1. Crosby Absolutes for Quality Management

First Absolute: The definition of quality is conformance to requirements, not

goodness.
Second Absolute: The system for causing quality is preventive, not appraisal.
Third Absolute: The performance measure must be zero defect, not "that's close
enough".
Fourth Absolute: The measurement of quality is the price of non-conformance, not
indexes.
2. CROSBY'S FOURTEEN STEPS FOR QUALITY IMPROVEMENT:
Crosby has laid down 14 steps for implementing the quality improvement
process in an organisation.
Step 1: Establish and ensure management commitment.
Step 2: Form quality improvement teams (QITs) for quality improvement process
planning and administration.
Step 3: Establish quality measurements.
Step 4: Evaluate the cost of quality and explain its use as a management tool to
measure waste.
Step 5: Raise quality awareness among all employees.
Step 6: Take actions to correct problems identified through previous steps.
Step 7: Establish a zero defects committee and programme.
Step 8: Train supervisors and managers on their role and responsibilities in the
quality improvement process.
Step 9: Hold a zero defects day to reaffirm management commitment.
Step 10: Encourage individuals and groups to set improvement goals.
Step 11: Obstacle Reporting.
Step 12: Recognise and appreciate all participants..
Step 13: Establish quality councils to discuss quality matters on a regular basis.
Step 14: Do it all over again to demonstrate that the improvement process never ends.
3.Crosby's Quality Vaccine:
In the crosby style, the "vaccine" is explained as medicine for management to
prevent poor quality. The five sections of vaccine that cover the reqiurements of total
quality management are as follows.
1. Integrity
2. Systems
3. Communication
4. Operations
5. Politics

BARRIERS TO TQM IMPLEMENTATION:

1. Lack of management commitment
2. Lack of faith in and support to TQM activities among management personnel
3. Failure to appreciate TQM as a cultural revolution. In other words, inability to
change organizational culture
4. Misunderstanding about the concept of TQM
5. Improper planning
6. Lack of employees commitment
7. Lack of effective communication
8. Lack of continuous training and education
9. Lack of interest or incompetence of leaders
10. Ineffective measurement techniques and lack of access to data and results
11. Non-application of proper tools and techniques
12. Inadequate use of empowerment and team work
BENEFITS OF TQM
Tangible Benefits Intangible Benefits
· Improved product quality · Improved employee participation
· Improved productivity · Improved team work
· Reduced quality costs · Improved working relationships
· Increased market and customers · Improved customer satisfaction
· Increased profitability · Improved communication
· Reduced employee grievances · Enhancement of job interest
· Enhanced problem solving capacity
· Better company image

QUALITY STATEMENTS
VISION STATEMENT:
It is a short declaration of what an organization aspires to be tomorrow. It is an
ideal state which may never be achieved.
Example:
“To continuously enrich knowledge base of practioners in mobility industry and
institutions in the service of humanity” - SAE

MISSION STATEMENT:
Describes the function of the organization. It provides the clear statement of
purpose for the employees, customers and suppliers.
Example:
“ Facilitating world class technical education through high quality institutions,
academic excellence and innovative research and development programmes,
technology forecasting and global manpower planning, promoting industry institute
interaction, inculcating entrepreneurship” - AICTE
QUALITY POLICY STATEMENT:
It is a guide for everyone in the organization as to how they provide products
and services to the customer. Written by the CEO feedback from workforce and
approved by quality council.
Example:
“Xerox is a quality company. Quality is the basic business principle for Xerox.
Quality means providing our external and internal customers with innovative
products and service that fully satisfy their requirements. Quality is the job of every
employee” – Xerox Corporation
CUSTOMER SATISFACTION
The Customer is the King - Emphasized by Today's Buyers Market. TQM's
Purpose is meeting or exceeding customer expectations, so that the customers are
delighted. The customer satisfactions must be the primary goal of any organization.

CUSTOMER SATISFACTION MODEL

Teboul’s Model of customer satisfaction as shown in figure

From the above diagram it is understood that the company should strive for
increasing the intersection portion i.e. Customer Satisfaction.

THE CUSTOMERS ARE

· The most important people in the business
· Not dependent on the organization, but the organization depends on them.
· Not an interruption to work but are the purpose of it.
· Doing a favor when they seek business and not vice-versa.
· A part of business, not outsiders and they are life blood of the business
· People who come with their needs and jobs
· Deserve the most courteous and attentive treatment.
TYPES OF CUSTOMERS
Internal Customer:
The customer inside the company are called internal customers
External Customers:
An external customer is the one who used the product or service or who purchase the
products or service or who influences the sale of the product or service.

CUSTOMER SUPPLIER CHAIN

CUSTOMER COMPLAINTS (FEEDBACK)

Customer feedback must be continuously solicited and monitored to reduce the
dissatisfied customers as much as possible.

CUSTOMER FEEDBACK OR CUSTOMER COMPLAINT IS REQUIRED

· To discover customer dissatisfaction
· To identify customer’s needs
· To discover relative priorities of quality
· To compare performance with the competition
· To determine opportunities, for improvement

TOOLS USED FOR COLLECTING CUSTOMER COMPLAINTS

· Comment card - Low cost method, usually attached to warranty card
· Questionnaire - Popular tool, costly and time consuming - by mail or telephone
preferably multiple choice questions or a point rating system (1 to 5) or (1 to 10)
 Customer Focus groups - Meeting by a representative of the company with the
group of customers. Imprint analysis is an emerging technique to obtain intrinsic
feelings using customer meetings, word associations, discussion, relaxation
techniques etc.
· Phone - Toll free Telephone numbers
· Customer visits - Visit customer's place of business.
· Report cards - Usually, send to customer on a quarterly basis.
· The internet and computer - It includes newsgroups, electronic bulletin board
mailing lists,
· Employee feedback.
· Mass Customization - Capturing the voice of customers using data of what
customer want instead of what customer is thinking about buying and
manufacturing exact what they want.

STEPS TO SOLVE CUSTOMER COMPLAINTS

· Complaints can be collected from all sources (letters, phone -calls, meetings and
verb inputs)
· Develop procedures for complaint resolution, that include empowering front-line
personnel.
· Analyze complaints, but understand that complaints do not always fit into new
categories
· Work to identify process and material variations and then eliminate the root
cause.
· When a survey response is received, a senior manager should contact the
customer and strive to resolve the concern.
· Establish customer satisfaction measures and constantly monitor them.
· Communicate complaint information, as well as the result of all investigation
solution, to all people in the organization. .
· Provide a monthly complaint report to the quality council for their evaluation and
needed, the assignment of process improvement teams.
· Identify customer's expectations beforehand rather than afterward through
complaint analysis.

CUSTOMER RETENTION
· More powerful and effective than customer satisfaction
· It is the process of retaining the existing customer
· Customer care can be defined as every activity which occurs within the organization
that ensures that the customer is not only satisfied but also retained.

SIGNIFICANCE OF CUSTOMER RETENTION

· 60% of organizations future revenue will come from exiting customers
· 2% increase in customer retention has 10% decrease in operating cost.
· 96% of unhappy customers do not complain but 3 times likely to convey to other
customers about their bad experience.
· 91% of unhappy customers never purchase goods and services from you.
· It costs 5 times more to attract the customer than retaining the existing customer.
· Customer retention creates customer loyalty and moves customer satisfaction to a
next level called customer delight.

QUALITY COST
Quality costs are defined as those costs associated with the non-achievement of
product or service quality as defined by the requirements established by the
organization and its contracts with customer and society.

Quality costs:
Costs of control
Prevention costs
Appraisal costs
Costs of failure of control
Internal failure costs
External failure costs

Quality costs are broadly classified into:

1. Failure costs
2. Appraisal costs
3. Prevention costs

Failure costs:
Failure costs are the direct and indirect costs incurred on those products or
services, which fail to comply with their prescribed specifications.
Internal failure costs – before delivered to customers
External failure costs – after delivered

Appraisal costs:
Appraisal costs are those costs involved in actual checking of the quality, viz., the
cost of carrying out actual inspection.

Prevention costs:
Prevention costs are those, which are involved in ensuring that faulty or defective
work, or rejections are not produced in very first instance.