TQM: Customer Focused Quality

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Outline Quality defined Cost of quality Framework for managing total quality Employee involvement Benchmarking Quality certification and awards Implementing TQM TQM and JIT

Total Quality Management Traditional:

Establish acceptable quality levels Detect and rework or scrap defects

TQM Focus entire company on all aspects

of quality, with emphasis on the customer’s perspective

The customer is interested in Value, which combines quality and cost

Achieving Total Quality

techniques

system

philosophy

What is Quality?

The concept of quality is subjective and difficult to define

Certain aspects of quality can be identified

Ultimately, the judgement of quality rests with the customer

Quality: Customer’s perspective Quality of design

Fitness for use Performance Features Reliability Conformance Durability Serviceability Aesthetics Perceived value

Quality: Producer’s Perspective Quality of conformance

Satisfaction of requirements or specifications

Emphasis on defect detection and defect prevention

The Meaning of Quality

Quality of Conformance Quality of Design

Producer’s Perspective Consumer’s Perspective

Fitness forConsumer Use

Production Marketing•Conformance to specifications•Cost

•Quality characteristics•Price

Cost of Quality

Prevention costs build it right the first time

Appraisal costs inspection and testing

Internal failure costs scrap and rework

External failure costs warranty claims, recalls, lost business

“Quality is Free”

For the average company, the cost of quality is about 25% of total sales

The cost of prevention is a fraction of the cost of fixing mistakes after they are made

Investments in prevention can drastically reduce the total cost of quality

Three Areas to Improve Quality Quality of design

meet the customer’s needs design for manufacturability build quality in

Quality of conformance minimize and control process variation to

satisfy the design specifications every time Quality of service

The customer must come first

Framework for Managing Total Quality

Quality must continuously improve TQM involves all parts of the

company

TQM Throughout the Company Marketing and sales

Feedback on customer wants and needs Finance and accounting Design and manufacturing

Product must satisfy customer Design for manufacture Simplify to improve quality

Production management, supervisors, line workers

TQM Throughout the Company Purchasing and suppliers

Long-term supplier relations based on quality not price

Suppliers as part of design team Customer service

Satisfy customer Feedback information for

improvement

Top Management’s Role Commitment is required

Employee Involvement Give ownership of quality to workers Organize for quality

Cross-functional teams Quality circles Process and project-oriented teams Greater customer awareness

Train and educate workers Quality skills and tools Importance of TQM

Benchmarking Find the companies with the “best

practices” Copy them Improve them

Benchmarking Process Determining what to benchmark Determining what to measure Determining whom to benchmark Collecting data Analysing data Setting goals and action plans Monitoring the action

Quality Certifications ISO 9000

Say what you do, and do what you say

QS 9000 More rigorous version adopted by big

three automakers and suppliers ISO 14000

Environmental management systems

Quality Awards Malcolm Baldrige Award Canada Award for Business

Excellence Japan’s Deming Prize Shingo Prize for Excellence in

Manufacturing

Strategic PlanningMission & Vision

Business Strategy

Marketing Strategy

Operations Strategy

Financial Strategy

Voice of the Business

Voice of the Customer

Policy Deployment Focusing and directing all activities

and processes so they support the companies vision, mission and long-term strategy

Policy Deployment Steps Develop a long term vision Determine annual policies to support

the long-term vision Deploy the policy company-wide

through participation in planning Implement the policy Audit the process and plans monthly Audit the process annually by top

management

PolicyDeployment

In other words… Make sure everyone understands

and supports the company goals Make sure individual and

department goals are consistent with company goals

Plan ways to achieve the goals Measure the success

TQM and JIT TQM and JIT are consistent,

interrelated and interdependent Often they are combined as

JIT/TQM