TOTAL QUALITY MANAGEMENT

DEFINITION OF QUALITY AND RELATED CONCEPTS

QUALITY 1. Fits for Purpose -Perhaps the most
-Ability of a product or service to useful business definition of quality is
consistently meet or exceed implicit "fit for purpose". This definition evolved
and explicit expectations. in quality management circles. It's
-Quality is "What the customer says it useful because it's applicable to any
is!" process, service or product. However, it
can be difficult to measure.
Over time, people have found many
ways to define what quality is. Some of 2. Conformance to Requirements -
the most popular definitions for quality Quality is often measured in terms of
are listed below. All of them are right, conformance to requirements. For
as they each contain a key element of example, business users define
what quality means to users of products requirements for a sales system. The
and services. sales system is developed and its
quality is measured against the
1. A degree of excellence requirements.
2. Conformance to requirements
3. Totality of characteristics which act to 3. Quality is Proportional to Cost -
satisfy a need Take note that traditionally, product
4. Fitness for use quality was thought of in terms of
5. Fitness for purpose material costs. A quality product costs
6. Freedom from defects more to produce. This type of quality
7. Delighting customers. definition works well for some simple
products. However, it's inapplicable to
technology, art and culture. The history
QUALITY -Quality is a perceptual, of technology is filled with cheaper
conditional, and somewhat subjective products that have higher quality.
attribute and may be understood
differently by different people. 4. Quality is Price -Economists tend
Consumers may focus on the to judge quality by the price consumers
specification quality of a are willing to pay. Quality is the price
product/service, or how it compares to consumers are willing to pay for a
competitors in the marketplace. product or service.
Producers might measure the If you're an economist and you need to
conformance quality, or degree to measure quality across an entire
which the product/service was produced economy — you need a quality
correctly. definition that's easy to measure.
According to economists, if something
There are five aspects of quality in a is expensive, it's high quality.
business context:
1. Producing – providing something. 5. Quality is Standard -The
2. Checking – confirming that manufacturing industry was the first to
something has been done correctly. take a hard, scientific look at quality.
3. Quality Control – controlling a Manufacturers are concerned both with
process to ensure that the outcomes the quality of products and the quality
are predictable. of the manufacturing process itself.
4. Quality Management – directing Quality is compliance with best known
an organization so that it optimizes its standards, processes, and
performance through analysis and specifications. As other industries
improvement. mature, the standards approach to
5. Quality Assurance – obtaining quality starts to make sense. For
confidence that a product or service will example, there is great interest in
be satisfactory. (Normally performed by standards for IT services.
a purchaser).
6. Quality is Value for Performance
TYPES OF QUALITY -Marketing teams look for practical
1. PRODUCT QUALITY - Products that definitions of quality that explain why
fit customer needs and fulfill customer consumers and businesses buy. One of
expectations. It is the value of a product the best ways to model purchasing
to customers. behavior is with the following definition
of quality. Quality is value for price.

7. Quality is an Experience -As

economies have shifted from a product
to a service focus marketers have
sought definitions of quality that
explain why customers purchase
services. Quality is a satisfying
experience. Experiences are measured
by establishing relationships with
customers to elicit dialog and feedback.
Experience quality can also be
measured by bottom line metrics such
as revenue, return visits and lifetime
customer value.

2. Service Quality -The value of a FACTORS AFFECTING QUALITY

service to customers. This is inherently -The quality of products and services
subjective as it is driven by the needs, are directly affected by many base
expectations and perceptions of factors. In today’s, world these factors
customers. As such, it is typically play a crucial role in an organization are
measured by quantifying customer listed.
surveys. The following are common
types of service quality. 1. Markets -New products are hitting
the market at an explosive rate. Many
3. Experience Quality -The value of of these products are manufactured by
an experience to customers. It is a material and methods unheard till a few
measure of customer perceptions that years back. Customers demand and get
can be applied to diverse services better products today. As markets
including areas such as medicine, broaden in scope, the scope of goods
technology, travel, entertainment and and services become more and more
hospitality. specialized. Burners today should be
very flexible and be able to a respond
4. IT Quality -The value of IT services rapidly and appropriately in different
to customers or internal business units. markets worldwide.
This typically includes elements of
functionality, usability, performance 2. Money -As competition has
and reliability. increased, profit margins have
decreased. Automation forced
5. Data Quality -The degree to which companies to spend heavily on new
information fits its purpose. It can be equipment’s and processes. To absorb
difficult for organizations to agree on these costs productivity has to the
data quality criteria because each team increased, which means loss
may use data towards different production, reworks and scrap has to be
purposes. kept to the minimum. Quality costs
have to be kept lo.
6. Information Quality -The value of
information for a given use. 3. Man -The rapid growth of technology
and opening of new fields have created
7. Quality of Life -is the well-being of a great demand for workers with
individuals, communities and societies. specialized knowledge. This
It is a comprehensive measure that can specialization of people has created a
be used to evaluate efforts to improve need for persons who can bring
cities and nations. together this knowledge to plan and
create operating systems that will bring
the desired results.
COST OF QUALITY
-The reason quality has gained such 4. Materials -Due to high material
prominence is that organizations have costs engineers have to constantly keep
gained an understanding of the high coming up with ways to bring down the
cost of poor quality. Quality affects all cost of material used. They also need to
aspects of the organization and has come up with new alternate materials
dramatic cost implications. The most that can replace costlier older material.
obvious consequence occurs when poor
quality creates dissatisfied customers 5. Machines -The rapid growth of
and eventually leads to loss of technology and opening of new fields
business. have created a great demand for
workers with specialized knowledge.
1. Quality Control Cost -The first This specialization of people has
category consists of costs necessary for created a need for persons who can
achieving high quality, which are called bring together this knowledge to plan
quality control costs. These are of two and create operating systems that will
types: prevention costs and appraisal bring the desired results.
costs.
 Prevention Costs -are all costs 6. Management -Today responsibility
incurred in the process of for product quality has to be distributed
preventing poor quality from among, various functions. For example,
occurring. design of design for quality of product
-They include quality planning design. Manufacturing for process
costs, such as the costs of quality, service for after sales quality
developing and implementing a and marketing for establishing the
quality plan. quantity of the new product required.
-Also included are the costs of This means that top management
product and process design, from should ensure proper allocation of
collecting customer information responsibilities to all to achieve the
to designing processes that organization goals.
 achieve conformance to
specifications. 7. Motivation -The rapid growth of
 Appraisal Costs -are incurred in technology and opening of new fields
the process of uncovering have created a great demand for
defects. workers with specialized knowledge.
-They include the cost of quality This specialization of people has
inspections, product testing, and created a need for persons who can
performing audits to make sure bring together this knowledge to plan
that quality standards are being and create operating systems that will
met. bring the desired results.
-Also included in this category
are the costs of worker time 8. Modern Methods of Information -
spent measuring quality and the With the spread of computers, data
cost of equipment used for collection, storage retrieval retrieved
quality appraisal. and transmission of information has
become easy. This also means that the
2. Quality Failure Cost -The second right information can be given to the
category consists of the cost right person at his workplaces be it on
consequences of poor quality. These the machines or in the office.
include external failure costs and
internal failure costs.
 Internal Failure Costs -are
associated with discovering poor
product quality before the
product reaches the customer
site. One type of internal failure
cost is rework, which is the cost
of correcting the defective item.
Sometimes the item is so
defective that it cannot be
corrected and must be thrown
away.
 External Failure Costs -are
associated with quality problems
that occur at the customer site.
These costs can be particularly
damaging because customer
faith and loyalty can be difficult
to regain. They include
everything from customer
complaints, product returns, and
repairs to warranty claims,
recalls, and even litigation costs
resulting from product liability
issues. A final component of this
cost is lost sales and lost
customers.

TOTAL QUALITY MANAGEMENT

TOTAL QUALITY MANAGEMENT TQM is for the most part common
-is an enhancement to the traditional sense. Analyzing the three words, we
way of doing business. It is a proven have
technique to guarantee survival in Total -Made up of the whole.
world-class competition. Only by Quality -Degree of excellence a
changing the actions of management product or service provides.
will the culture and actions of an entire Management -Act, art, or manner of
organization be transformed. handling, controlling, directing, etc.
-Therefore, TQM is the art of managing The three basic fundamentals of TQM
the whole to achieve excellence. The are:
Golden Rule is a simple but effective 1) Customer Focus
way to explain it: Do unto others as you 2) Process Improvement
would have them do unto you. 3) Total Involvement
The simple objective of TQM is “Do the
right things, right the first time, every TQM is defined as both a philosophy
time.” and a set of guiding principles that
represent the foundation of a
TQM requires six basic Concepts: continuously improving organization. It
1. A committed and involved is the application of quantitative
management to provide long-term top- methods and human resources to
to-bottom organizational support. improve all the processes within an
2. An unwavering focus on the organization and exceed customer
customer, both internally and needs now and in the future. TQM
externally. integrates fundamental management
3. Effective involvement and utilization techniques, existing improvement
of the entire work force. efforts, and technical tools under a
4. Continuous improvement of the disciplined approach.
business and production process.
5. Treating suppliers as partners. Within the paradigm of TQM, there are
6. Establish performance measures for 8 essential elements that form the crux
the processes. of the approaches mentored out for this
unique system. The success of the TQM
Group A – Foundation framework depends on these elements
Laying the foundation for TQM within that are put together and further
your organization that foster sincerity, categorized into 4 groups.
openness, and fairness among They are as follows:
employees are the following elements: · Foundation
1. Ethics 2. Integrity 3. Trust · Building Bricks
Group B – Building Blocks · Binding Mortar
These elements are the four walls of · Roof
your quality house that is responsible to
enable the house to stand straight and Group C – Binding Mortar
tall. These bricks are carefully placed on Bricks without mortar is basically a
the foundation in an effort for it to house of hay. This element brings the
reach the roof of recognition and rest together by a certain coercion. This
support it: 4. Training 5. Teamwork 6. is the famous: Communication
Leadership
Group D – Roof
A house without a roof isn’t a house at
ELEMENTS OF TQM all. This includes the bearer of solitude
1. ETHICS – Ethics can be described as and award: Recognition
the understanding that an individual
has about what they deem right or
wrong, or good or bad at a workplace. THE EVOLUTION OF TQM
Ethics form the gray decision area The concept of quality has existed for
where an employee can decide as to many years, though its meaning has
what is good to be undertaken and changed and evolved over time.
what is bad that shouldn’t be ·In the early twentieth century, quality
undertaken. management meant inspecting
products to ensure that they met
2. INTEGRITY - Integrity would specifications.
essentially be defined as upholding ·In the 1940s, during World War II,
values/virtues such as honesty, justice, quality became more statistical in
morals, and sincerity. While knowing nature. Statistical sampling techniques
that a particular action is wrong, were used to evaluate quality, and
making sure that they aren’t part of quality control charts were used to
such debauchery forms as a good monitor the production process.
example of integrity. In the 1960s, with the help of so-called
quality gurus, the concept took on a
3. TRUST - A sport team can only broader meaning. Quality began to be
overcome obstacles and win if there’s viewed as something that encompassed
relentless collaboration and trust the entire organization, not only the
among the team members. This is production process. Since all functions
applicable to organizations on the brink were responsible for product quality
of change; a change towards quality. and all shared the costs of poor quality,
quality was seen as a concept that
4. TRAINING - Training forms a affected the entire organization.
quintessential part in the life cycle of ·The meaning of quality for businesses
the TQM framework. Managers and changed dramatically in the late 1970s.
supervisors are forerunners involved in Before then quality was still viewed as
the implementation of a successful TQM something that needed to be inspected
session. It is essential for them to and corrected.
cascade to every employee within the However, in the 1970s and 1980s,
organization the importance of the many U.S. industries lost market share
elements and the basic approach, that to foreign competition. In the auto
is, TQM. industry, manufacturers such as Toyota
and Honda became major players. In
6. LEADERSHIP - Leadership comes the consumer goods market, companies
across as the most important element such as Toshiba and Sony led the way.
within TQM. It is essential at each and These foreign competitors were
every stage within the framework. producing lower-priced products with
Providing an inspirational vision to the considerably higher quality.
employees is what is expected of a ·To survive, companies had to make
leader. Making strategic moves and major changes in their quality
guiding subordinates is what is programs. Many hired consultants and
expected from a leader. instituted quality training programs for
their employees. A new concept of
7. COMMUNICATION - Binding quality was emerging. One result was
everything together and cementing the that quality began to have a strategic
relationship of the employees with the meaning. Today, successful companies
element of quality is effective understand that quality provides a
communication. Effective competitive advantage. They put the
communication enables employees to customer first and define quality as
learn better and be able to express meeting or exceeding customer
better. This facilitates innovative ideas expectations.
and a proper medium to get them
through.
QUALITY GURUS
8. RECOGNITION - The roof of your Pioneers or contributors of quality have
quality house is recognition. either originated new ideas or modified,
Recognizing someone’s work is expanded old ideas and propounded
extremely important in nowadays’ significance for the benefits of industry
competitive environment. Recognition and society at large. It is important to
promotes healthy competition in a bid take note of renowned pioneers in the
to be acknowledged for the brilliant quality management, with their
work put in. Recognition enables an philosophy and concepts. This topic
individual to put their best foot forward introduces the quality management
to be in line for a sparkling reward. It is philosophers and their contribution.
but a boost to human morale and pride. Contributions of some of the pioneers in
quality management are given.
SEVEN MAIN QUALITY GURUS
1. Dr. WALTER SHEWHART
-First of the Top Ten Quality Gurus.
-He developed the Plan, Do, Check, Act 2. Dr. W. EDWARDS DEMING
(PDCA) cycle (known as “Plan-Do-Study- -he developed his complete philosophy
Act” in some circles) as well as theories of management, which he encapsulated
of process control and the Shewhart into his “fourteen points” and the
transformation process. “seven deadly diseases of
management”. He advanced the state
of quality, originally based on work
3. Dr. JOSEPH M. JURAN done by Shewhart with his explanations
-he developed the quality trilogy – of variation, use of control charts, and
quality planning, quality improvement, his theories on knowledge, psychology
and quality control. Quality and variation. Deming greatly helped to
management plans quality focus the responsibility of quality on
improvements that raise the level of management and popularized the PDCA
performance, which then must be cycle, which led to it being referred to
controlled or sustained at that level in as the “Deming Cycle”.
order to start the cycle again.
4. ARMAND V. FEIGENBAUM
5. PHILIP B. CROSBY -he developed the idea of total quality
-he was the quality guru that developed control based on three steps to quality
the idea of “quality is free” which consisting of quality leadership, modern
asserts that implementing quality quality technology, and an
improvement pays for itself through the organizational commitment to quality.
savings from the improvement,
increased revenue from greater 6. Dr. KAORU ISHIKAWA
customer satisfaction, and the -he developed the Ishikawa diagram,
improved competitive advantage that also known as the fishbone or cause-
results. He popularized “zero defects” effect diagram. He was known for
to define the goal of a quality program popularizing the seven basic tools of
as the elimination of all defects and not quality and the philosophy of total
the reduction of defects to an quality.
acceptable quality level.
7. Dr. GENICHI TAGUCHI
--he developed the “Taguchi
methodology” of robust design, which
focused on making the design less
sensitive to variation in the
manufacturing process, instead of
trying to control manufacturing
variation. This idea of “designing in
quality” has become an important
tenant of six sigma today.

OTHER TQM GURUS

8. SHIGEO SHINGO
-he developed lean concepts such as
Single Minute Exchange of Die (SMED)
or reduced set-up times instead of
increased batch sizes, as well as Poka-
10. TAIICHI OHNO Yoke (mistake proofing) to eliminate
-Last of the Top Ten Quality Gurus. obvious opportunities for mistakes. He
-He developed the seven wastes also worked with Taiichi Ohno to refine
(muda), which are used in lean to Just-In-Time (JIT) manufacturing into an
describe non-value-added activity. He integrated manufacturing strategy,
developed various manufacturing which is widely used to define the lean
improvements with Shigeo Shingo that manufacturing used in the Toyota
evolved into the Toyota Production production system (TPS).
System.
9. DR. ELIYAHU M. GOLDRATT
PHILOSOPHY OF TQM -he developed the Theory of Constraints
Continuous Improvement which focuses on a single element in a
-A philosophy of never-ending process chain as having the greatest
improvement. leverage for improvement (i.e., “1% can
-called kaizen by the Japanese, have a 99% impact”). This compares to
-it requires that the company the Pareto principle which states that
continually strive to be better through 20% of the factors have an 80% effect
learning and problem solving. on the process.
Two Approaches of Continuous
Development
·The Plan–Do–Study–Act (PDSA) The plan–do–study–act (PDSA) cycle
Cycle -describes the activities a company
·Benchmarking needs to perform in order to
incorporate continuous improvement in
Benchmarking its operation.
-Another way companies implement -is also referred to as the Shewhart
continuous improvement is by studying cycle or the Deming wheel. The circular
business practices of companies nature of this cycle shows that
considered “best in class.” continuous improvement is a never-
-The ability to learn and study how ending process. Let’s look at the
others do things is an important part of specific steps in the cycle.
continuous improvement. The
benchmark company does not have to Plan -The first step in the PDSA cycle.
be in the same business as long as it Managers must evaluate the current
excels at something that the company process and make plans based on any
doing the study wishes to emulate. problems they find.
Six Core Steps: Do -The next step in the cycle is
1. Decide what to benchmark. implementing the plan (do).
2. Understand current Study -The third step is to study the
performance. data collected in the previous phase.
3. Plan. The data are evaluated to see whether
4. Study others. the plan is achieving the goals
5. Learn from the data. established in the plan phase.
6. Use the findings. Act -The last phase of the cycle is to act
on the basis of the results of the first
Seven Basic Quality Control Tools three phases.
1. Cause-and-effect diagrams
-identify potential causes of particular
quality problems. They are often called
fishbone diagrams because they look Seven Basic Quality Control Tools
like the bones of a fish. -proposed by Dr. Kaoru Ishikawa in
-The “head” of the fish is the quality 1968, by publishing a book entitled
problem, such as damaged zippers on a “Gemba no QC Shuho” that was
garment or broken valves on a tire. The concerned managing quality through
diagram is drawn so that the “spine” of techniques and practices for Japanese
the fish connects the “head” to the firms. It was intended to be applied for
possible cause of the problem. “self-study, training of employees by
-founded and first promoted by Dr. foremen or in QC reading groups in
Kaoru Ishikawa. Japan.
-It was developed in 1943.
2. Flowchart
3. Check sheets or checklists -is a schematic diagram of the
-A structured, prepared form for sequence of steps involved in an
collecting and analyzing data. Data are operation or process. It provides a
“collected and tabulated” on the check visual tool that is easy to use and
sheet to record the frequency of understand. By seeing the steps
specific events during a data collection involved in an operation or process,
period; or everyone develops a clear picture of
-A list of common defects and the how the operation works and where
number of observed occurrences of problems could arise.
these defects. It is a simple yet -it visualizes a picture including the
effective fact-finding tool that allows inputs, activities, decision points, and
the worker to collect specific outputs for using and understanding
information regarding the defects easily the overall objective through the
observed. process.

5. Scatter diagrams 4. Control charts

-are graphs that show how two -are a very important quality control
variables are related to one another. tool.
They are particularly useful in detecting -These charts are used to evaluate
the amount of correlation, or the degree whether a process is operating within
of linear relationship, between two expectations relative to some measured
variables. value such as weight, width, or volume.
-is a graph used to study how a process
6. Pareto analysis changes over time. Data are plotted in
-is a technique used to identify quality time order. A control chart always has a
problems based on their degree of central line for the average, an upper
importance. The logic behind Pareto line for the upper control limit, and a
analysis is that only a few quality lower line for the lower control limit.
problems are important, whereas many
others are not critical. 7. Histogram
-The technique was named after -is the commonly used chart or graph
Vilfredo Pareto, a nineteenth-century that shows the frequency distribution of
Italian economist who determined that observed values of a variable. We can
only a small percentage of people see from the plot what type of
controlled most of the wealth. distribution a particular variable
-This concept has often been called the displays, such as whether it has a
80–20 rule and has been extended to normal distribution and whether the
many areas. distribution is symmetrical.

Six Sigma has evolved into a more SIX SIGMA

general business concept, focusing on -the term was coined by the Motorola
meeting customer requirements, Corporation in the 1980s to describe
improving customer retention, and the high level of quality the company
improving and sustaining business was striving to achieve.
products and services. -specifically, it is a quality control
Understanding of Six Sigma method developed by American
(Sigma) = A standard deviation Engineer Bill Smith while working at
from the mean. Motorola in 1986.
Any business process that achieves six -The method uses a data-driven review
sigma and produces less than 3.4 to limit mistakes or defects in a
defects per 1 million chances is corporate or business process.
considered efficient.
The Six Sigma approach is organized
around a five-step plan known as Six Sigma Levels or Certification
DMAIC, which stands for Define, -Six Sigma White Belts
Measure, Analyze, Improve, and -Six Sigma Yellow Belts
Control: -Six Sigma Green Belts
Step 1: Define the quality problem of -Six Sigma Black Belts
the process. -Six Sigma Master Black Belt
Step 2: Measure the current
performance of the process. THE INTERNATIONAL
Step 3: Analyze the process to identify ORGANIZATION FOR
the root cause of the quality problem. STANDARDIZATION (ISO)
Step 4: Improve the process by - was founded in 1946 in Geneva,
eliminating the root causes of the Switzerland, where it is still based.
problem. - Its mandate is to promote the
Step 5: Control the process to ensure development of international standards
the improvements continue. to facilitate the exchange of goods and
services worldwide. ISO is composed of
more than 90 member countries.
THE ISO TECHNICAL COMMITTEE (TC) -The United States representative is the
176 American National Standards Institute
-developed a series of international (ANSI).
standards for quality systems, which
were first published in 1987. BENEFITS OF ISO REGISTRATION
-The standards (ISO 9000, 9001, and There are various reasons for
9004) were intended to be advisory and implementing a quality system that
were developed for use in two-party conforms to an ISO standard. The
contractual situations and internal primary reason is that customers or
auditing. However, with their adoption marketing are suggesting or demanding
by the European Community (EC) and a compliance to a quality system. Other
worldwide emphasis on quality and reasons are needed improvement in
economic competitiveness, the processes or systems and a desire for
standards have become universally global deployment of products and
accepted. services.1 As more and more
organizations become registered, they
ISO 9000 STANDARDS are requiring their subcontractors or
Increases in international trade during suppliers to be registered, creating a
the 1980s led to the development of snowball effect. Consequently, in order
universal standards of quality. Universal to maintain or increase market share,
standards were seen as necessary in many organizations are finding they
order for companies to be able to must be in conformance with an ISO
objectively document their quality standard. Internal benefits that can be
practices around the world. Then in received from developing and
1987 the International Organization for implementing a well-documented
Standardization published its first set of quality system can far outweigh the
standards for quality management, external pressures.
called ISO 9000.
ISO 9000
• ISO 9004:2000—Quality The three standards of the series are
Management Systems described briefly in the following
(QMS)—guidelines for paragraphs:
performance improvement • ISO 9000:2005—Quality
provides guidelines that an Management Systems
organization can use to (QMS)
establish a QMS focused —fundamentals and vocabulary
on improving performance. discusses the fundamental concepts
related to the QMS and provides the
ISO 14000 terminology used in the other two
The need for standardization of quality standards.
created an impetus for the • ISO 9001:2008—Quality
development of other standards. In Management Systems
1996, the International Standards (QMS)
Organization introduced standards for —requirements is the standard used for
evaluating a company’s environmental registration by demonstrating
responsibility. These standards, termed conformity of the QMS to customers,
ISO 14000, focus on three major areas: regulatory, and the organization’s own
-Management systems standards requirements.
measure systems development and
integration of environmental SECTOR-SPECIFIC STANDARDS
responsibility into the overall business. The ISO 9000 system is designed as a
-Operations standards include the simple system that could be used by
measurement of consumption of natural any industry. Other systems have been
resources and energy. developed that are specific to a
-Environmental systems standards particular industry such as automotive
measure emissions, effluents, and other or aerospace. These systems use the
waste systems. ISO 9001 as the basic framework and
modify it to their needs. There are
currently three other quality systems:
-In March 2001, the International AS9100, ISO/TS 16949, and TL 9000.
Aerospace Quality Group (IAQG) aligned
AS9100 with ISO 9001: 2000. Industry- AS9100
specific interpretations and -This aerospace industry quality system
methodologies are identified in italics was officially released by the Society of
and bold type. These additions are Automotive Engineers in May 1997.
accepted aerospace approaches to -Its development and release
quality practices and general represents the first attempt to unify the
requirements. Aerospace organizations requirements of NASA, DOD, and FAA,
in Europe, Japan, and the U.S. will while satisfying the aerospace
certify registrars and auditors. industry’s business needs.
-AS 9100 Revision C is released in
January 2009. SO/TS 16949
This standard is entitled Quality
Systems Automotive Suppliers—
AWARDS RECOGNIZING QUALITY Particular Requirements for the
MANAGEMENT Application of ISO 9001. It harmonizes
THE MALCOLM BALDRIGE NATIONAL the supplier quality requirements of the
QUALITY AWARD (MBNQA) U.S. big three as provided in QS 9000
was established in 1987 when Congress Third Edition with the French, German
passed the Malcolm Baldrige National and Italian automakers. The standard
Quality Improvement Act. The award is has been approved by Asian
named after the former Secretary of automakers. The goal of this technical
Commerce Malcolm Baldrige, and is specification is the development of
intended to reward and stimulate fundamental quality systems that
quality initiatives. It is designed to provide for continuous improvement,
recognize companies that establish and emphasizing defect prevention, and the
demonstrate high-quality standards and reduction of variation and waste in the
is given to no more than two companies supply chain.
in each of three categories:
manufacturing, service, and small THE DEMING PRIZE
business. Past winners include Motorola is a Japanese award given to companies
Corporation, Xerox, FedEx, 3M, IBM, and to recognize their efforts in quality
the Ritz-Carlton. improvement. The award is named after
W. Edwards Deming, who visited Japan
TOTAL QUALITY MANAGEMENT (TQM) after World War II upon the request of
WITHIN OM: HOW IT ALL FITS Japanese industrial leaders and
TOGETHER engineers. While there, he gave a series
Marketing plays a critical role in the of lectures on quality. The Japanese
TQM process by providing key inputs considered him such an important
that make TQM a success. Recall that quality guru that they named the
the goal of TQM is to satisfy customer quality award after him.
needs by producing the exact product
that customers want. Marketing’s role is Finance is another major participant in
to understand the changing needs and the TQM process because of the great
wants of customers by working closely cost consequences of poor quality.
with them. General definitions of quality need to be
translated into specific dollar terms.
Accounting is important in the TQM This serves as a baseline for monitoring
process because of the need for exact the financial impact of quality efforts
costing. TQM efforts cannot be and can be a great motivator.
accurately monitored and their financial
contribution assessed if the company
does not have accurate costing Human resources is critical to the
methods. effort to hire employees with the skills
necessary to work in a TQM
Information systems (IS) is highly environment. That environment
important in TQM because of the includes a high degree of teamwork,
increased need for information cooperation, dedication, and customer
accessible to teams throughout the commitment.
organization.