tqm

Total Quality Management (TQM)

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What is Quality?

• Excellence or the best

– But this is not a practical business concept

• Fitness to purpose

– Juran J M

• Conformance to requirements

– Crosby P B

• In general quality is a matter of meeting requirements with an emphasis on customer requirements.

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What is Quality?

• The totality of features and characteristics of a product or service that bear on its ability to satisfy stated and implied needs.

– Formal definition adopted by both British Standards Institute and American Society for quality control

• Degree to which a set of inherent characteristics (of a product , system or process) fulfills requirements. (of customer and other interested parties)

– Definition in ISO9000:2005 Fundamentals & Vocabulary

• Quality is Customer delightness with respect to, standard, availability, price and safety.

– Latest Definition 3

Leaders in the field of Quality Management

• Joseph M. Juran

– Defines Quality as ……. “Fitness for use”

– Background was in statistics

– Spread ideas about teamwork, internal customers, problem solving techniques and pareto analysis for quality issues

• W. Edwards Deming

– Statistical methods in quality control

– Deming cycle (PDCA cycle)

– Focuses on process rather than product quality control

• Genichi Taguchi

– Statistical methods in product and process development

• Philip B. Crosby

– Zero defects strategy

– Getting it right first time 4

How Quality is achieved?

• Commitment to quality

– TQM programs (eg Quality circles, suggestions,…etc) play a main role in achieving and improving quality of a product in an organization and also the motivation of the staff

• Process to deliver quality

– A system to deliver quality constantly and consistently eg. ISO 9000

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Cost of Quality

• The costs that are incurred as a result of poor quality and those which are spent to prevent these costs are together referred to as the cost of quality.

• Can be divided into 3 categories.

1. Failure: The product has not reached the intended standard

2. Appraisal: Costs for formal way of assessing

3. Prevention: Costs incurred to the investments made in quality before production begins

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Internal Failure Cost

• Scrap costs

– Costs of poor-quality products that must be discarded, including labor, material, and indirect costs

• Rework costs

– Costs of fixing defective products to conform to quality specifications

• Process downtime costs

– Costs of shutting down process to fix problems

Process failure costs

Costs of determining/ investigating why production process is producing poor-quality products

Price-downgrading costs

Costs of discounting poor-quality products - that is, selling products as “seconds”

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External Failure Cost

• Customer complaint costs

– Costs of investigating and satisfactorily responding to a customer complaint resulting from a poor-quality product

• Product return costs

– Costs of handling and replacing poor-quality products returned by customer

• Warranty claims costs

– Costs of complying with product warranties

Product liability costs

Litigation costs resulting

from product liability and

customer injury

Lost sales costs

Costs incurred because

customers are dissatisfied

with poor-quality products

and do not make

additional purchases

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Appraisal Cost

• Inspection and testing – Costs of testing and inspecting materials, parts, and

product at various stages and at end of process

• Test equipment costs – Costs of maintaining equipment used in testing

quality characteristics of products

• Operator costs – Costs of time spent by operators to gather data for

testing product quality, to make equipment adjustments to maintain quality, and to stop work to assess quality

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Prevention Cost Quality planning costs

Costs of developing and

implementing quality

management program

Product-design costs

Costs of designing products

with quality characteristics

Process costs

Costs expended to make

sure productive process

conforms to quality

specifications

Training costs

Costs of developing and putting on quality training programs for employees and management

Information costs

Costs of acquiring and maintaining data related to quality, and development and analysis of reports on quality performance

Purchase costs

To buy new equipment or modifications, etc.

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Contribution to Total Quality Cost

External Failure

Internal Failure

Prevention

Appraisal

Total

Cost

Quality Improvement

Total Cost

prevention cost is the mostly influential factor for quality costs A rule of thumb: Every Rupee spend in prevention saves Rs. 10 in appraisal costs

Quality Control vs Quality Assurance

• Quality Control: QC works by inspecting all(or a sample of) finished products. The inspection will be against some template of what is required and may involve testing of physical properties or aesthetic conditions. Rejection is the only way of achieving quality. Within this model it was not interested to find why things go wrong or how to put them right.

• Quality Assurance: This focus how things are produced (or the service is carried out) rather than the characteristics of what is produced; finding effective or best ways of managing the process to minimize defects and errors. The objective of this model is systematic investigation and solving problems. Methods use in this model to assure the quality includes a formal quality system, internal auditing, etc.

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TQM

• TQM is a philosophy of quality that links policy and operational practice.

• Of the three elements of TQM; – Total: suggests the commitment of everyone in the

organization

– Quality: …..

– Management: implies an active process led from the top

• Definition: TQM is a process of involving everyone in an organization in continuously improving products and processes to achieve, on every occasion, quality that satisfies customer’s needs.

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Concepts of the TQM Philosophy

1. Customer Focus

– The goal is to first identify and then meet customer needs.

– TQM recognizes that a perfectly produced product has little value if it is not what the customer wants.

– Companies need to continually gather information by means of

• focus groups, market surveys, and customer interviews

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Concepts of the TQM Philosophy 2. Continuous Improvement

– A philosophy of never-ending improvement.

– The company continually strive to be better through learning and problem solving

– Must always evaluate our performance and take measures to improve it.

– Two approaches that can help with continuous improvement

• PDCA Cycle (PDSA Cycle)

• Benchmarking

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Concepts of the TQM Philosophy 2.1 PDCA or PDSA cycle

Describes the activities a company needs to perform in order to incorporate continuous improvement in its operation.

The circular nature of this cycle shows that continuous improvement is a never-ending process.

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The Deming Cycle • Link the production with consumer needs and focus the

resources of all departments (R&D, design, marketing)

• Corporate effort from all to meet the needs

Steps in the Cycle (PDCA):

Plan: Conduct consumer research, use it for plan

Do: Produce the product

Check: Check products to make sure it was produced in accordance with plan

Act: Market the product

Analyze how the product is received the marketplace in terms of quality, costs, and other criteria (con. Research)


2.2 Benchmarking

• Studying the business practices of other companies for purposes of comparison.

• “best in class”

• The ability to learn and study how others do things is an important part of continuous improvement.

• Does not have to be in the same business

– E.g. order filing, product delivery, etc.

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Concepts of the TQM Philosophy 3. Employee Empowerment

• Give authority or power to all employees to seek out quality problems and correct them.

• With old concept – poor quality is passed on to someone else

• With new concept-

– provides incentives for employees to identify quality problems.

– Employees are rewarded for uncovering quality problems, not punished.

– Their suggestions are implemented

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Concepts of the TQM Philosophy 3. 1 Team approach

• TQM stresses that quality is an organizational effort.

• To facilitate the solving of quality problems, it places great emphasis on teamwork.

• Quality Circles

– Open discussion is promoted,

– and criticism is not allowed.

– Although the functioning of quality circles is friendly and casual, it is serious business.

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4 Use of Quality Tools

• If employees are to identify and correct quality problems,

– they need proper training.

– They need to understand how to assess quality by using a variety of quality control tools,

– how to interpret findings,

– and how to correct problems.

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Tools in TQM • Tools for Generating Ideas (may be used for organizing as

well)

– Check sheets

– Scatter diagrams

– Cause-and-effect diagrams

– Cause-and-effect matrix

• Tools to Organize the Data (may be used for generating ideas as well)

– Pareto charts

– Flowcharts & Process Flow Charts

• Tools for Identifying Problems

– Histogram

– Statistical process control chart

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Check Sheets • An organized method of recording data

• Generate the idea looking at the pattern

• Incorporate with histograms

/

/

/ / /// /

// ///

// ////

///

//

/

Hour

Defect 1 2 3 4 5 6 7 8

A

B

C

/

/

//

/

• a checklist can be developed that measures the number of occurrences per shift, per machine, or per operator. In this fashion we can isolate the location of the particular defect and then focus on correcting the problem.

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Histograms • A distribution showing the frequency of occurrences of a

variable

• Generate idea and help to identify the problem

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Scatter Diagrams • A graph of the value of one variable vs. another variable


• Help to identify the problem

• E.g., increased production speed and number of defects could

be correlated positively;

Absenteeism

Pro

du

cti

vit

y

• increased worker training might be associated with a decrease in the number of defects observed.

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Cause-and-Effect Diagrams • Also known as “fish-bone” diagram

• A tool that identifies process elements (causes) that

might effect an outcome

• Generate the idea about the causes and their effect

• These are problem-solving tools commonly used by

quality control teams.

– Specific causes of problems can be explored through

brainstorming.

– The development of a cause-and-effect diagram requires

the team to think through all the possible causes of poor

quality.

Brainstorming • used for generating a large number of ideas, most

of which will subsequently discarded, but with perhaps a few novel ideas are being identified as worth following up.

• Do

1. Capture everything

2. Encourage participation

3. Ask clarifying questions

• Don’t

1. Evaluate anything

2. Force participation or sequence

3. Ask judging questions

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Example for Cause-&-Effect

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Notes on Cause-&-Effect • To construct the skeleton, remember:

– For manufacturing - the 4 M’s

man, method, machine, material

– For service applications

equipment, policies, procedures, people

– May add another dimension

See next slide

• Advantages – Making the diagram is educational in itself

– Diagram demonstrates knowledge of problem solving team

– Diagram results in active searches for causes

– Diagram is a guide for data collection

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A general cause and effect diagram

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Pareto Charts

• A graph to identify and plot problems or defects in descending order of frequency

• Logic behind Pareto’s principle

is that most quality problems

are a result of only a few

causes. The trick is to identify

these causes.

• Find the few causes account

for most of the defects.

Fre

qu

en

cy

Pe

rce

nt

A B C D E

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Flowcharts • A chart that describes the steps in a process


• Example – MRI Flowchart:

1. Physician schedules MRI

2. Patient taken to MRI

3. Patient signs in

4. Patient is prepped

5. Technician carries out MRI

6. Technician inspects film

7. If unsatisfactory, repeat

8. Patient taken back to room

9. MRI read by radiologist

10. MRI report transferred to

physician

11. Patient and physician discuss

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10

20%

9

8 80%

1 2 3 4 5 6 7

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Process Flowcharts • Chart that clearly describes the steps in a process, displaying

different operations (see next slide)


Different Process Flowcharts

Outline process chart Flow process chart - workflow process chart - material process chart - equipment process chart Two handed process chart Procedure flowchart

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Process Charts Symbols

• Five Main Symbols, “Decision” – rarely used

Symbol Name Description

OPERATION Indicates main steps in a process, method or procedure

INSPECTION Indicates an inspection for quality and/or check for quantity

TRANSPORT Indicates the movement of workers, material or equipment from place to place

DELAY (Temporary Storage)

Indicates a delay in the sequence of events: e.g. waiting between consecutive operations

STORE (Permanent Storage)

Indicates a controlled storage in which material is received into or issued from s store

DECESION (not much used)

Indicates the decision point for other operation

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Statistical Process Control Charts

• These charts are used to evaluate whether a

process is operating within expectations relative to

some measured value such as weight, width, or

volume.

• For example, we could measure the width of a

tire, or the volume of a bottle of soft drink.

• When the production process is operating within

expectations, we say that it is “in control.”

Statistical Process Control Charts

Four key steps

Measure the process

When a change is indicated, find the assignable cause

Eliminate the cause

Restart the revised process

Upper control limit

Target value

Lower control limit

Time


5 Product design

Products need to be designed to meet customer

expectations.

5.1 QFD:

• to ensure that the product design meets customer expectations.

• A useful tool for translating the voice of the customer into specific technical requirements

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Concepts of the TQM Philosophy 5.2 Reliability

• An important dimension of product design is that the product functions as expected - reliability

• Reliability is the probability that a product or part will perform as intended for a specified period of time under normal conditions.

• Product reliability - product warranties.

• E.g, product with a 90% reliability has a 90% chance of functioning as intended. the probability that the product will fail is 10%

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• Reliability of the system is computed as the product of the reliabilities of the individual components:

– Where Rs -Reliability of the product or system

– R1…n – Reliability of components 1 through n

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))....()()(( 321 ns RRRRR

• Example 1: Assume that product has 2 parts, both of which must work for the product to function. Part 1 has a reliability of 80% and part 2 has a reliability of 90%. Compute the reliability of the product.


• The failure of certain products can be critical.

• To increase product reliability – build redundancy into the product design in the form of backup parts

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• Example 2: Two power generators provide electricity as a facility’s main and backup generator. The main generator has a reliability of 0.95 and the backup has a reliability of 0.90. What is the reliability of the system?

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Concepts of the TQM Philosophy • Example 3:

a) An office security system at Delco, Inc. has two component parts, both of which must work for the system to function. Part 1 has a reliability of 80%, and part 2 has a reliability of 98%. Compute the reliability of the system.

b) Delco, Inc. from Problem a), is not happy with the reliability of its security system and has decided to improve. The company will add a backup component to part 1. The backup component will also has a reliability of 80%. What is the reliability of the improved system?

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6. Process Management

• Quality products comes from quality process

• Quality should be built into the process

• Identify quality problems and correct them. – rather than discarding the defective items after production

• Monitor the process quality using quality tools – such as control charts

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Concepts of the TQM Philosophy 7. Managing superior quality

• TQM extends the concept of quality to a company’s suppliers

• Traditionally when materials arrived, an inspection was performed to check their quality

• Waste of time, cost, contribute to poor quality

• TQM extends the concept of quality to suppliers and ensure that they engage in the same quality practices.

• If suppliers meet preset quality standards do not have to be inspected upon arrival 44


Concept Main Idea

Customer focus Goal is to identify and meet customer needs

Continuous improvement A philosophy of never-ending improvement

Employee empowerment Employees are expected to seek out, identify and correct quality problems

Use of quality tools Ongoing employee training in the use of quality tools

Product design Products need to be designed to meet customer expectations

Process management Quality should be built into the process: sources of quality problems should be identified and corrected

Managing superior quality Quality concepts must extend to a company’s suppliers

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