POM

Module 2: Total Quality Management

Unit 3: TQM Philosophers and their Contributions to TQM

Overview:

Remember your leaders, who spoke the word of God to you.

Consider the outcome of their way of life and imitate their faith.
Hebrews 13:7 (NIV)

Module Objectives:

After successful completion of this Unit, you should be able to:

• Discuss the quality gurus and their contribution to our understanding of

TQM;
• Explain the Deming Chain Reaction;
• Explain Deming’s 14 Points.

Course Materials:
• Handout: Quality Gurus and their Contribution to TQM; Deming’s Chain Reaction;
Deming’s 14 Points

Read:
QUALITY GURUS AND THEIR CONTRIBUTION TO THE TQM PHILOSOPHY

❖ W. Edwards Deming, Joseph Juran, and Philip Crosby are recognized as

the top three international leaders of modern quality thinking. A. V.
Feigenbaum, Kaoru Ishikawa, and Genichi Taguchi have also made
significant contributions to modern quality management practice.
• Proposed 14 Points of Quality Management.
• The cause of inefficiency and poor quality is the system.
• Management’s responsibility is to correct the system to achieve desired
results.
• There is a need to reduce variation in output (deviation from a standard);
reducing variation can be accomplished by distinguishing between special
causes of variation (i.e., correctable) and common causes of variation (i.e.,
random).
• Workers want to create and learn, but management unintentionally often
does things that rob them of their internal motivation.
• Management’s greatest challenge in achieving quality is in motivating
workers to contribute their collective efforts to achieve a common goal.
• The Deming chain reaction states that quality improvement reduces cost,
increases productivity, increases market share, and allows firms to stay in
business and provide jobs.

• Quality is fitness for use.

• Largely 80% of quality defects are management-controllable.
• Management’s responsibility is to correct the system to achieve desired
results
• The Quality Trilogy – quality planning, control, and improvement –
provides a direction for quality assurance in organizations.
▪ Quality planning is necessary to establish processes that are capable of consistently meeting quality
standards.
▪ Quality control is necessary to know when corrective action is needed.
▪ Quality improvement will help to find better ways of doing things.
• Commitment of management is a key to continual improvement.
• Proposed 10 steps for quality improvement.
1. Build awareness for the need and opportunity for improvement.
2. Set goals for improvement.
3. Organize people to reach the goals.
4. Provide training throughout the organization.
5. Carry out 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.
• Developed the concept of zero defects and popularized the phrase: “Do it
right the first time.”
• Stressed prevention; and argued against the idea that “there will always be
some level of defectives.”
• His quality-is-free concept emphasized that the costs of poor quality are so
great that rather than viewing quality efforts as costs, organizations
should view them as a way to reduce costs, because the improvements
generated by quality efforts will more than pay for themselves.

• The customer defines quality.

• Key elements of Feigenbaum’s quality control philosophy:
1. Total quality control is a system for integrating quality development,
maintenance, and improvement in an organization.
2. The “control” aspect of quality control should involve setting quality
standards, appraising performance relative to these standards, taking
corrective action when these standards are not met, and planning for
improvement in the standards.
3. Factors that can affect quality can be divided into two major categories:
technological and human. The human factor is the more important one.
4. It is important to control quality at the source.
5. Operating quality costs can be divided into four categories: prevention
costs, appraisal costs, internal failure costs, and external failure costs.
▪ Prevention costs – costs of preventing defects from occurring; e.g.,
quality improvement programs, training, monitoring, data collection
and analysis, and design costs.
▪ Appraisal costs – costs of activities designed to ensure quality or
uncover defects; e.g., inspection equipment, testing, labs,
inspectors, and the interruption of production to take samples.
▪ Internal failure costs – costs related to defects discovered before
products or services are delivered to customers; e.g., rework costs,
problem solving, material and product losses, scrap, and downtime.
▪ External failure costs – costs related to defects discovered after
delivering substandard products or services to customers; e.g.,
returned goods, rework costs, warranty costs, loss of goodwill,
liability claims, and penalties.
 • Developed the cause-and-effect (fishbone or Ishikawa) diagram for
determining possible causes of a problem.
• Implemented quality circles that involve workers in quality improvement.
• First to call attention to the internal customer – the next person in the
process.
• Strongly proposed the need for companies to have a shared vision in order
to unite everyone in the organization in a common goal.
• Widely recognized for his efforts to make quality control “user friendly” for
workers.

• Best known for the Taguchi loss function – a formula for determining the
cost of poor quality.

Managers need to understand the differences and similarities in the leading

quality philosophies and develop a quality management approach tailored to
their organization.

THE DEMING CHAIN REACTION

The Deming Chain reaction is Deming’s explanation on why organizations and

managers must pursue quality improvement.
Improve Quality. What Deming had in mind was not just the quality
improvement of the organization’s goods and services, but primarily of the whole
production-distribution system – quality suppliers, quality organization, quality
distributors. Within the organization, it involves improvement in the quality of
resources (manpower, materials, machines, information), relationships, and
processes (management, operations, marketing, finance, accounting, design),
and so on.

Decrease Costs. Although improving the quality of the whole system would
mean higher prevention and appraisal costs, it could significantly lower the
internal and external failure costs, decrease resource costs, as well as lessen
transaction costs with partners along the supply chain (suppliers, distributors).
For instance, having high quality suppliers would result in lesser need for
inspection and evaluation of manpower, material, and machine inputs. Having
high quality distributors would result in lesser returns of products that have
been damaged in transit from the organization to the end-users. Quality
resources and processes would yield lesser defective outputs of goods and
services, which means lesser costs of rework and wasted time, materials and
labor. The organization would also be able to decrease its production time due
to lesser operational delays caused by, say, unexpected machine breakdowns.

Improve Productivity. Improved quality of products and lesser costs combined

would mean higher productivity; i.e., greater ability of the organization to
produce highly satisfying goods and services with less resources, which further
means lesser burden to the environment.

Decrease Price. With lesser costs, the organization would be in a better position
than its competitors to compete in terms of lesser price; thus, greater
competitiveness in almost all areas: quality, customer service, price, speed, and
flexibility.

Increase Market Share. Greater competitiveness and productivity would result

in higher market share.

Stay in Business. The combined positive results mentioned above would

contribute greatly to the organization’s ability not just to survive, but to be
sustainable over the long term.

Provide More Jobs. As the organization thrives and grows, it could provide more
jobs and training to more people and support the government through the taxes
that they pay.

Increase ROI. The resulting benefits of improved quality also accrue to the
business owners, in addition to those already mentioned regarding customers,
employees, business partners, the government, the society and the environment.
DEMING’S 14 POINTS

Deming’s 14 Points may be considered as Deming’s 14 commandments to

managers with regards to establishing TQM in their organizations. Here they are:

Point 1: Create a Vision and Demonstrate Commitment

An organization must define its values, mission, and vision of the future to
provide long-term direction for its management and employees. Deming believed
that businesses should not exist simply for profit; they are social entities whose
basic purpose is to serve their customers and employees. To effectively serve
customers, they must take a long-term view and invest in innovation, training, and
research.

Deming understood that business must adopt a long-term perspective and

take responsibility for providing and improving a firm’s competitive position. This
responsibility lies with top management who must develop a vision and set the
policies and mission of the organization they must then act on the policies and
show commitment.

Point 2: Learn the New Philosophy

The world has changed in the last few decades. Old methods of
management built on Frederick Taylor’s principles, such as quota-driven
production, work measurement, and adversarial work relationships will not work
in today’s global business environment. They create mistrust, fear, and anxiety
and a focus on “satisficing,” rather than “optimizing.”

Companies cannot survive if products of poor quality of conformance or poor

fitness for use leave their customers dissatisfied. Instead, companies must take a
customer-driven approach based on mutual cooperation between labor and
management and a never-ending cycle of improvement. Everyone, from the
boardroom to the stockroom, must learn the new philosophy.

Point 3: Understand Inspection

Routine inspection acknowledges that defects are present, but does not add
value to the product. Rather, it is rarely accurate, and encourages the production
of defective products by letting someone else catch and fix the problem. The rework
and disposition of defective material decreases productivity and increases costs.
In service industries, rework cannot be performed; external failures are the most
damaging to business.

Workers must take responsibility for their work, rather than leave the
problem for someone else down the production line. Managers need to understand
the concept of variation and how it affects their processes and seek to reduce the
common causes of variation. Simple statistical tools can be used to help control
processes and eliminate mass inspection as the principal activity in quality control.
Inspection must be used as an information-gathering tool for improvement, not
as a means of “assuring” quality or blaming workers.

Point 4: Stop Making Decisions Purely on the Basis of Cost

Purchasing departments have long been driven by cost minimization

without regard for quality. What is the true cost of purchasing substandard
materials? The direct costs of poor quality materials that arise during production
or during warranty periods, as well as the loss of customer goodwill, can far
exceed the cost “savings” perceived by purchasing. Purchasing must understand
its role as supplier to production.

Deming urged businesses to establish long-term relationship with a few

suppliers, leading to loyalty and opportunities for mutual improvements.
Management has long justified multiple suppliers for reasons such as providing
protection against strikes or natural disasters but has ignored “hidden” costs such
as increased travel to visit suppliers, loss of volume discounts, increased setup
charges resulting in higher unit costs, and increased inventory and administrative
expense. Most importantly, because each supplier’s process is different, constantly
changing suppliers solely on the basis of price increases the variation in the
material supplied to production.

In contrast, a reduced supply base decreases the variation into the process,
thus reducing scrap, rework, and the need for adjustment to accommodate this
variation. A long-term relationship strengthens the supplier-customer bond, allows
the supplier to produce in greater quantity, improves communication with the
customer, and therefore enhances opportunities for process improvement.
Suppliers know that only quality goods are acceptable if they want to maintain a
long-term relationship. Statistical methods provide a common language for
communication within that relationship.

Point 5: Improve Constantly and Forever

Improvements are necessary in both design and production. Improved

design comes from understanding customer needs and continual market surveys
and other sources of feedback, and from understanding the manufacturing
process and developing manufacturable designs. Improved production is achieved
by reducing the causes of variation and establishing stable, predictable
processes. Statistical methods provide a tool for improvement, which goes beyond
production and includes transportation, engineering, maintenance, sales, service,
and administration. When quality improves, productivity improves and costs
decrease.
Point 6: Institute Training

For continuous improvement, employees – both management and workers –

require the proper tools and knowledge. People are an organization’s most
valuable resource; they want to do a good job, but they often do not know how.
Management must take responsibility for helping them. All employees should be
trained in statistical tools for quality problem solving. Not only does training result
in improvements in quality, but it adds to worker morale, and demonstrates to
workers that the company is dedicated to helping them and investing in their
future. In addition, training reduces barriers between workers and supervisors,
giving both incentive to improve further.

Point 7: Institute Leadership

The job of management is leadership, not supervision. Supervision is simply

overseeing and directing work; leadership means providing guidance to help
employees do their jobs better with less effort. In many companies, supervisors
know little about the job itself because the position is often used as an entry-level
job for college graduates. The supervisors have never worked in the department
and cannot train the workers, so their principal responsibility is to get the product
out the door. Supervision should provide the link between management and the
workforce. Good supervisors are not police or paperpushers, but rather coaches,
helping workers to do a better job and develop skills. Leadership can help to
eliminate fear from the job and encourage teamwork.

Point 8: Drive Out Fear

Driving out fear underlies many of Deming’s 14 Points. Fear is manifested

in many ways: fear of reprisal, fear of failure, fear of the unknown, fear of
relinquishing control, and fear of change. No system can work without the mutual
respect of managers and workers. Workers are often afraid to report quality
problems because they might not meet their quotas, their incentive pay might be
reduced, or they might be blamed for problems in the system. Fear encourages
short-term thinking. Managers fear losing power.

Point 9: Optimize the Efforts of Teams

Teamwork helps to break down barriers between departments and

individuals. Barriers between functional areas occur when managers fear they
might lose power. Internal competition for raises and performance ratings
contributes to building barriers. The lack of cooperation leads to poor quality
because other departments cannot understand what their “customers” want and
do not get what they need from their “suppliers.” In Japan, companies emphasize
that the next department or individual in the production process is actually the
customer and train their workers to manage such customer relationships.
Point 10: Eliminate Exhortations

Posters, slogans and motivational programs calling for Zero Defects, Do It

Right the First Time, Improve Productivity and Quality, and so on, are directed at
the wrong people. These motivational programs assume that all quality problems
are due to human behavior and that workers can improve simply through
motivational methods. Workers become frustrated when they cannot improve or
are penalized for defects.

Motivational approaches overlook the source of many problems – the

system. Common causes of variation stemming from the design of the system are
management’s problem, not the workers’. If anything, workers’ attempts to fix
problems only increase the variation. Improvement occurs by understanding the
nature of special and common causes. Thus, statistical thinking and training, not
slogans, are the best route to improving quality. Motivation can be better achieved
from trust and leadership than from slogans and goals.

Point 11: Eliminate Numerical Quotas and Management by Objective (MBO)

Measurement has been, and often still is, used punitively. Standards and
quotas are born of short-term perspectives and create fear. They do not encourage
improvement, particularly if rewards or performance appraisals are tied to meeting
quotas. Workers may shortcut quality to reach the goal. Once standard is reached,
little incentive remains for workers to continue production or to improve quality;
they will do no more than they are asked to do.

Arbitrary management goals, such as increasing sales by 5 percent next

year of decreasing costs next quarter by 10 percent, have no meaning without a
method to achieve them. Deming acknowledged that goals are useful, but
numerical goals set for others without incorporating a method to reach the goal
generate frustration and resentment. Further, variation in the system year to year
or quarter to quarter – a 5 percent or a 6 percent decrease, for example – makes
comparisons meaningless. Management must understand the system and
continually try to improve it.

Point 12: Remove Barriers to Pride in Workmanship

People on the factory floor and even in management have become, in

Deming’s words, “a commodity.” Factory workers are given monotonous tasks,
provided with inferior machines, tools, or materials, told to run defective items to
meet sales pressures, and report to supervisors who know nothing about the job.
Salaried employees are expected to work evenings and weekends to make up for
cost-cutting measures that resulted in layoffs of their colleagues. Many are given
the title “management” so that overtime need not be paid.
 Deming believed that one of the biggest barriers in workmanship is
performance appraisal. Performance appraisal destroys teamwork by promoting
competition for limited resources, fosters mediocrity because objectives typically
are driven by numbers and what the boss wants rather than by quality, focuses
on the short term and discourages risk-taking, and confounds the “people
resources” with other resources. If all individuals are working within the system,
then they should not be singled out of the system to be ranked. Some people have
to be “below average,” which can only result in frustration if those individuals are
working within the confines of the system. Deming sorted performance into three
categories: the majority of performances that are within the system, performances
outside the system on the superior side, and performances outside the system on
the inferior side. Statistical methods provide the basis for these classifications.
Superior performers should be compensated specially; inferior performers need
extra training or replacement.

Point 13: Encourage Education and Self-Improvement

The difference between this point and Point 6 is subtle. Point 6 refers to
training in specific job skills; Point 13 refers to continuing, broad education for self-
development. Organizations must invest in their people at all levels to ensure
success in the long term. A fundamental mission of business is to provide jobs as
stated in Point 1, but business and society also have the responsibility to improve
the value of the individual. Developing the worth of the individual is a powerful
motivation method.

Point 14: Take Action

The transformation begins with top management and includes everyone.

Applying the Deming philosophy launches a major cultural change that many
firms find difficult, particularly when many of the traditional management
practices Deming felt must be eliminated are deeply ingrained in the
organization’s culture.

Issues for Review and Discussion

1. Discuss the interrelationship among Deming’s 14 Points. How do they

support each other? Why must they be viewed as a whole rather than
separately?

2. According to Deming’s Point 1, what does it mean for managers to

create a vision? How can they show commitment to that vision?

3. According to Deming’s Point 2, what was the old philosophy? What is

the new philosophy that everyone in the organization needs to learn?
 4. According to Deming’s Point 3, what was the old way of understanding
the purpose of inspection? What’s the new and better use of inspection?

5. According to Deming’s Point 4, what are the disadvantages if

Purchasing makes decisions based solely on cost? What does Deming
propose? What advantages could be gained if Point 4 is adopted?

6. According to Deming’s Point 5, how can the product design be

continuously improved? How can the production process be
continuously improved?

7. According to Deming’s Point 6, what particular training should

managers and workers undergo? What are some benefits that could be
gained from having well-trained people in the organization?

8. According to Deming’s Point 7, what’s the difference between leading

and supervising? What do supervisors do? What should leaders do?

9. According to Deming’s Point 8, why is the presence of fear contradictory

to the pursuit of quality?

10. According to Deming’s Point 9, what’s an effective way to optimize

teamwork?

11. According to Deming’s Point 10, what should be done instead of

exhortations and motivational programs? How should it be done?

12. According to Deming’s Point 11, are goals and numerical quotas
unnecessary? What should be done apart from setting goals and
quotas?

13. According to Deming’s Point 12, what’s a good way to remove barriers
to pride in workmanship?

14. What’s the subtle difference Deming’s Point 13 and Point 6?

15. According to Deming’s Point 14, what major difficulty is encountered

by companies that apply Deming’s new philosophy?

Activity: Answer each of the 15 questions above and be ready to share these with
your classmates when we discuss Deming’s 14 Points in our Google meet
(schedule to be announced later).
Activities/Assessments: