UNIT-III

ORGANIZING FOR TOTAL QUALITY MANAGEMENT

INTRODUCTION

There are two prerequisites for a TQM organization.

1. Quality attitude that pervades the entire organization. Quality is not just a special activity supervised by
a high-ranking quality director.

2. Organizational infrastructure to support the pervasive attitude. Companies must have the means and the
structure to set goals, assign them to appropriate people, and convert them to action plans.

People must be aware of the importance of quality and trained to accomplish the necessary tasks.

ORGANIZING FOR TQM: THE SYSTEMS APPROACH

A system can be defined as an entity composed of interdependent components that are integrated for
achievement of an objective. The organization is a social system comprising a number of components
such as marketing, production, finance, research, and so on. These organizational components are
activities that may or may not be integrated, and they do not necessarily have objectives or operate toward
achievement of an objective. Thus, synergism, a necessary attribute of a well-organized sys- tem, may be
lacking as each activity takes a parochial view or operates independently of the others. This lack of
synergism cannot continue under the TQM approach to strategic management because interdependency
across functions and departments is a necessary precondition.

For any organization considering the implantation of quality management strategies, certain quality
management principles need to be considered. One such principle is system approach, which determines
the identification, understanding and management of a system of interrelated processes for any goals that
will improve the organization’s efficiency. This approach plays an important role in any continuous
improvement process, offering great benefit to the organization.

People
Dimension
Input n
Activities
Money Technical
Human Skills
Objectives
Resources
Machines
Material
Technology

The Organizational System

The concept of an organizational system is shown in Figure. Inputs to the system are converted by
organization activities into an output. Indeed, the sole reason for the existence of the organization and
each activity within it is to add value to inputs and produce an output with greater value. A measure of
this conversion of inputs into outputs is known as productivity, and the ratio of output to input must be a
positive number if the system is to survive in the long run.

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The activities of the organization are subsystems of the whole, but are also individual systems with inputs
and outputs that provide input to other systems such as customers and other internal activities.

Key Benefits to System Approach

The primary benefits of system approach in regards to quality management can be seen on a short and
long term scale. These benefits include the following:
• Incorporation and configuration of processes that will best ensure return on investment.
• Capacity to concentrate efforts on the primary processes.
• Giving confidence to relevant parties in regards to the reliability, success and efficiency of the
organization.

Steps to Achieving System Approach

There are five steps that comprise of the system approach, with each step assisting organizations to
achieve more effective systems within their operations and goals. These steps include the following:
➢ Outline the system through the identification or development of specific processes that are able
to ensure that certain goals can be achieved.
➢ Organize the system in order to achieve the goal in the most efficient way possible, with a clear
plan that can be implemented by relevant parties.
➢ Understand the relationship among each one of the separate processes of the system, and how
they interrelate to form a complete system.
➢ Continuously expand the system through reporting, goal measurement and regular system
evaluation.
➢ Evaluate the resources that will be required to implement processes, to determine resource
constraints before implementation of each process within the system.
When these steps are taken into consideration during the development of systems within the organization,
processes will be far more effective. This in turn will assist with achieving quality management and
continuous improvement within the workplace through efficient systems.

ORGANIZING FOR QUALITY IMPLEMENTATION

• The traditional approach to organization sees the process as a mechanical assemblage of functions
and activities without a great deal of attention to strategy and desired results.
• This approach to building an organization structure has been criticized by Peter Drucker: “What
we need to know are not all the activities that might conceivably have to be housed in the
organization structure. What we need to know are the load-bearing parts of the structure, the key
activities.”
• Key activities will differ depending on the nature of the organization, its products, and its
strategy.
• What is a key activity in one may not be in another.
Example:
- Advertising may be a key activity in the value chain of Coca-Cola, but not in Boeing Aircraft,
where design is the key activity.
- Back office activity may be a key activity in Merrill Lynch, but not in McDonald’s.
• Firms frequently fail to prioritize or identify key activities in the value chain because of a
tendency to organize around the chart of accounts.
• Some firms focus on those activities where cost, rather than quality or other source of
differentiation, is the major consideration.

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ACTIVITY VALUE TO CUSTOMER
Purchasing Improved cost and quality of product
Engineering and design characteristics Unique product
Manufacturing Product reliability
Order processing Response time
Service Customer installation
Scheduling Response time
Inspection Defect-free product
Spare parts Maintenance
Human resources Customer training

MAKING THE TRANSITION FROM A TRADITIONAL TO A TQM ORGANIZATION

The systems approach to organizing suggests three significant changes:

1. The concept of the inverted organizational chart
2. A system of intra company internal quality
3. Horizontal and vertical integration of functions and activities

Roles in organizational transition to TQM

The role of top management is critical.

• Many of the most successful companies launched their programs by creating a quality council or
steering committee whose members comprise the top management team.
• Some multi-division companies encourage a council in each division or strategic business unit.
The council provides a good vehicle for management to demonstrate its leadership in the quality
initiative.
• Opinions differ as to who should lead or coordinate the TQM effort.
• One source suggests a new role similar to that of a financial controller, a role that is justified on
the basis that quality is now a strategic business planning and management function.
• Others disagree and suggest that the company should avoid setting up a quality bureaucracy
headed by a high-profile quality director.
• There is general agreement that it should not be headed by a staff department such as personnel or
quality assurance.
• The process should be line led and given back to the business managers who implement it on a
daily basis.
• The role of middle managers has traditionally been an integrative one.
• They are the drivers of quality and the information funnel for change both vertically and
horizontally— the go-between for top management and front-line employees.
• They implement the strategy devised by top management by linking unit goals to strategic
objectives.
• They develop personnel, make continuous improvement possible, and accept responsibility for
performance deficiencies.

QUALITY CIRCLES

DEFINITION

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The most widespread form of an employee involvement team is the quality circle, defined as “a small
group of employees doing similar or related work who meet regularly to identify, analyze, and solve
product quality and production problems and to improve general operations.”

Quality Circle is a small group of 6 to 12 employees doing similar work who voluntarily meet together on
a regular basis to identify improvements in their respective work areas using proven techniques for
analyzing and solving work related problems coming in the way of achieving and sustaining excellence
leading to mutual upliftment of employees as well as the organization.
It is "a way of capturing the creative and innovative power that lies within the work force".

CONCEPT

• The concept of Quality Circle is primarily based upon recognition of the value of the worker as a
human being, as someone who willingly activises on his job, his wisdom, intelligence,
experience, attitude and feelings.
• It is based upon the human resource management considered as one of the key factors in the
improvement of product quality & productivity. Quality Circle concept has three major attributes:
– Quality Circle is a form of participation management.
– Quality Circle is a human resource development technique.
– Quality Circle is a problem solving technique.

OBJECTIVES

The objectives of Quality Circles are multi-faced.

a) Change in Attitude
• From "I don’t care" to "I do care"
• Continuous improvement in quality of work life through humanization of work.
b) Self Development
• Bring out ‘Hidden Potential’ of people
• People get to learn additional skills.
c) Development of Team Spirit
• Individual Vs Team – "I could not do but we did it"
• Eliminate inter departmental conflicts.
d) Improved Organizational Culture
• Positive working environment.
• Total involvement of people at all levels.
• Higher motivational level.
• Participate Management process.

BENEFITS AND LIMITATIONS OF QUALITY CIRCLES

Advantages of quality circles

• Increase Productivity
• Improve Quality
• Boost Employee Morale

Disadvantages/problems with quality circles

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 • Inadequate Training
• Unsure of Purpose
• Not truly Voluntary
• Lack of Management Interest
• Quality Circles are not really empowered to make decisions.

SEVEN STATISTICAL TOOLS OF QUALITY

The Seven Basic Tools of Quality (7 QC Tools) originated in Japan when the country was undergoing
major revolution in quality standards. It had become a mandatory topic as part of Japanese’s industrial
training program. These tools have simple graphical and statistical techniques which are helpful in
solving critical quality related issues.

They are also known as Seven Basics Tools of Quality because these tools could be implemented by any
person with very basic training in statistics. They are simple to apply and solve quality-related complex
issues.

The seven QC tools are:

STRATIFICATION (DIVIDE AND CONQUER)

➢ It is a method of dividing data into sub–categories. After that, one has to classify it based on
various parameters into groups and sub-groups. It helps in deriving meaningful information and
analyse the existing problem.
➢ It helps in dividing the data and deriving meaning out of it to solve a problem.

CHECK SHEET

DEFINITION:

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 ➢ Check sheets are tools for collecting data. They are designed specific to the type of data to be
collected. Check sheets aid in systematic collection of data.

EXAMPLES:

➢ Daily maintenance check sheets, attendance records, production log books, etc.

FUNCTIONS:

➢ To check the shape of the probability distribution of a process.

➢ To quantify defects by type.
➢ To quantify defects by location.
➢ To quantify defects by cause (machine, worker).
➢ To keep track of the completion of steps in a multistep procedure (in other words, as a checklist).

PARETO DIAGRAM/(80/20 RULE)

➢ Pareto Diagram is a tool that arranges items in the order of the magnitude of their contribution,
thereby identifying a few items exerting maximum influence.
➢ This is named after Vilfredo Pareto. It revolves around the concept of 80-20 rule which
underlines that in any process, 80% of problem or failure is just caused by 20% of few major
factors which are often referred as Vital Few, whereas remaining 20% of problem or failure is
caused by 80% of many minor factors which are also referred as Trivial Many.
➢ The purpose of Pareto Chart is to highlight the most important factors that is the reason for major
cause of problem or failure.
➢ Pareto chart is having bars graphs and line graphs where individual factors are represented by a
bar graph in descending order of their impact and the cumulative total is shown by a line graph.

BENEFITS:

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 ➢ Prioritize projects for improvement,
➢ Set up corrective action teams to solve problems,
➢ Identify products on which most complaints are received,
➢ Identify the nature of complaints occurring most often,
➢ Identify most frequent causes for rejections or for other similar purposes.

SCATTER DIAGRAM/SHEWHART CHART

DEFINITION:

➢ A scatter diagram, also called a scatter plot or a scatter plot, is a visualization of the relationship
between two variables measured on the same set of individuals.
➢ A tool to study the relationship between two variables is known as Scatter Diagram. It consists of
plotting a series of points representing several observations on a graph in which one variable is on
X-axis and the other variable in on Y-axis.

BENEFITS:

➢ It shows the relationship between two variables.

➢ It is the best method to show a non-linear pattern.
➢ The range of data flow, i.e. maximum and minimum value, can be easily determined.
➢ Shows a trend in the data relationship
➢ Retains exact data values and sample size
➢ Shows minimum/maximum

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CAUSE & EFFECT DIAGRAM/ FISH-BONE DIAGRAM/ ISHIKAWA DIAGRAM

➢ A cause and effect diagram, also known as a fish-bone diagram shows the many possible causes
of a problem.
➢ The defect is shown as the fish's head, facing to the right, with the causes extending to the left as
fishbones; the ribs branch off the backbone for major causes, with sub-branches for root-causes,
to as many levels as required.
➢ A diagram that shows the causes of an event and is often used to outline the different steps in a
process, demonstrate where quality control issues might arise and determine which resources are
required at specific times.
➢ To use this tool, you need to first identify the problem you are trying to solve and simply write it
in the box (head of the fish) to the right.
➢ Next, you will list the major causes of the problem on the spine of the fish.
➢ Causes are typically separated into categories of people, process, materials and equipment.
➢ Causes are then identified through brainstorming with a group familiar with the problem.
➢ Once all of the possible causes are identified, they can be used to develop an improvement plan to
help resolve the identified problem.

K-T METHODOLOGY

➢ Kepner Tregoe methodology is a structured methodology for gathering information and

prioritizing and evaluating it. It was developed by Charles H. Kepner and Benjamin B. Tregoe in
the 1960s.
➢ This is a rational model that is well respected in business management circles. An important
aspect of Kepner Tregoe decision making is the assessment and prioritizing of risk.
➢ So the idea is not to find a perfect solution but rather the best possible choice, based on actually
achieving the outcome with minimal negative consequences.
➢ It is marketed as a way to make unbiased decisions in that it is said to limit conscious and
unconscious biases that draw attention away from the outcome.
➢ It is used for decision making .

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 ➢ It is very detailed and complex method applicable in many areas, which is much broader than just
idea selection.
➢ It is called also a root cause analysis and decision-making method.
➢ It is a step-by-step approach for systematically solving problems, making decisions, and
analyzing potential risks.

There are four basic steps when using the Kepner Tregoe decision matrix:

➢ Situation appraisal - is used to clarify the situation, outline concerns and choose a direction
➢ Problem analysis - here the problem is defined and it's root cause determined
➢ Decision analysis - alternatives are identified and a risk analysis done for each
➢ Potential problem analysis - the best of the alternatives is further scrutinized against potential
problems and negative consequences and actions are proposed to minimize the risk.

Following the step-by-step approach of Kepner Tregoe decision making allows for the use of critical
thinking skills in considering many possible factors that may be vital in making the decision.

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