Chapter 6 -Chapter 6 -

Total Quality Total Quality ManagementManagement

TQM WheelTQM Wheel

Customer satisfaction

TQM emphasizes three main principles: customer satisfaction, employee involvement, and continuous improvement.

Total Quality Management

Total quality management is defined as managing the entire organization so that it excels on all dimensions of products and services that are important to the customer.

Factors that can impede TQM: Managers are frequently evaluated, rewarded, and

promoted on basis of short-term financial performance

Decisions that are made to generate short-term gains can overpower TQM commitments

Customer-DrivenCustomer-DrivenDefinitions of QualityDefinitions of Quality

Conformance to SpecificationsConformance to Specifications ValueValue Fitness for UseFitness for Use SupportSupport Psychological ImpressionsPsychological Impressions

Relate each dimension to products and services

The Costs of Poor QualityThe Costs of Poor Quality

Prevention CostsPrevention Costs Appraisal CostsAppraisal Costs Internal Failure CostsInternal Failure Costs External Failure CostsExternal Failure Costs

Costs of Detecting DefectsCosts of Detecting Defects

Process Final testing CustomerWhere defect is detected

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Employee InvolvementEmployee Involvement

Cultural ChangeCultural Change TeamsTeams Individual DevelopmentIndividual Development Awards and IncentivesAwards and Incentives

PlanPlan

DoDo

CheckCheck

ActAct

Deming WheelDeming Wheel1. Plan a change

aimed at improvement.

2. Execute the change.

3. Study the results; did it work?

4. Institutionalize the change or abandon or do it again.

ReliabilityReliability

Product reliabilityProduct reliability

rrss = (= (rr11)()(rr22) . . . () . . . (rrnn))

wherewhere

rrss = = reliability of the reliability of the

complete productcomplete product

nn = = number of subsystemsnumber of subsystems

rrnn = = reliability of the reliability of the

subsystem or component subsystem or component nn

ReliabilityReliability

Product reliabilityProduct reliability

rrss = (= (rr11)()(rr22) . . . () . . . (rrnn))

wherewhere

rrss = = reliability of the reliability of the

complete productcomplete product

nn = = number of subsystemsnumber of subsystems

rrnn = = reliability of the reliability of the

subsystem or component subsystem or component nnrrss = (0.99)(0.90)(0.85) = 0.76 = (0.99)(0.90)(0.85) = 0.76

BenchmarkingBenchmarking

PlanningPlanning AnalysisAnalysis IntegrationIntegration ActionAction

Benchmarking

1. Identify those processes needing improvement.

2. Identify a firm that is the world leader in performing the process.

3. Contact the managers of that company and make a personal visit to interview managers and workers.

4. Analyze data.

Tools for Improving QualityTools for Improving Quality

Step 1—ChecklistStep 1—Checklist Step 2—Pareto chartStep 2—Pareto chart Step 3—Cause-and-effect diagramStep 3—Cause-and-effect diagram Step 4—Bar chart and HistogramsStep 4—Bar chart and Histograms

Bar Chart and Histogram - Can be used to identify the frequency of quality defect occurrences and display quality performance.

Bar Chart and Histogram - Can be used to identify the frequency of quality defect occurrences and display quality performance.

Cause and Effect Diagram - Can be used to systematically track backwards to find a possible cause of a quality problem (or effect).

Cause and Effect Diagram - Can be used to systematically track backwards to find a possible cause of a quality problem (or effect).

Pareto ChartsPareto Charts

Can be used to find when 80% of the problems may be attributed to 20% of thecauses.

Can be used to find when 80% of the problems may be attributed to 20% of thecauses.

Cause-and-Effect DiagramsCause-and-Effect Diagrams

EffectEffect

PersonnelPersonnelMachinesMachines

ProcessProcessMaterialsMaterials

Checker Board AirlinesChecker Board Airlines

Passenger processing at gate

Late cabin cleaners

Unavailable cockpit crew

Late cabin crew

Personnel

Weather

Air traffic delays

Other

Aircraft late to gate

Mechanical failures

Equipment

Materials Procedures

Waiting for late passengers

Weight/balance sheet late

Poor announcement of departures

Delayed check-in procedure

Delayed flight departures

Late food service

Late fuel

Late baggage to aircraft

Contractor not provided updated schedule

Figure 6.6Source: Adapted from D. Daryl Wyckoff, “New Tools for Achieving Service Quality.” The Cornell Hotel and Restaurant Administration Quarterly, November 1984, pg. 89. © 1984 Cornell H.R.A. Quarterly. Used by permission. All rights reserved.

Wellington Fiber Board Co.Wellington Fiber Board Co.

ChecklistsChecklists

Headliner Defects

Defect type Tally Total

A. Tears in fabric //// 4

B. Discolored fabric /// 3

C. Broken fiber board //// //// //// //////// //// //// / 36

D. Ragged edges //// // 7

Total 50

Can be used to keep track of defects or used to make sure people collect data in a correct manner.

Can be used to keep track of defects or used to make sure people collect data in a correct manner.

ISO 9000

Series of standards agreed upon by the International Organization for Standardization (ISO)

Adopted in 1987

More than 100 countries

A prerequisite for global competition?

ISO 9000 directs you to "document what you do and then do as you documented."

ISO 9000 vs. Baldrige Award

The Baldrige AwardU.S. national quality awardhighlights performance of firms that have

attained excellence in quality managementISO 9000 Certification

series of standardsprovides market access

ISO 14000standards for environmental management

Leadership—Leadership—Leadership system, values, expectations, and public responsibilities (second highest percentage of points)

Strategic Planning—Strategic Planning—The effectiveness of strategic and business planning and deployment of plans, focusing on performance requirements

Customer and Market Focus—Customer and Market Focus—How the company determines customer and market requirements and achieves customers satisfaction

Information and Analysis—Information and Analysis—The effectiveness of information systems to support customer driven performance excellence and marketplace success

Human Resource Focus—Human Resource Focus—The success of efforts to realize the full potential of the work force to create a high-performance organization

Process Management—Process Management—The effectiveness of systems and processes for assuring the quality of products and services

Business Results—Business Results—Performance results and competitive benchmarking in customer satisfaction, financials, human resources, suppliers, and operations (Highest percentage of points)

Criteria for Performance Criteria for Performance ExcellenceExcellence