Notes for “Master of Science”

Students
Level: M.SC. (Administrative Sciences)
Semester: (3rd) spring 2021
University: Allama Iqbal Open University
(AIOU)
Study Notes Course: (5011) TQM
Prepared By: Sardar Umer Chaudhary
Department: Dept. Of Business Administration,
Islamabad main campus of AIOU.
Unit.1: Introduction to Total Quality Management (TQM)
1.1 Defining Total Quality Management:
TQM is an integrated effort designed to improve quality performance at
every level of the organization.
Explanations:
Total: Quality involves everyone and all the activities performed in the
company.
Quality: Conformance to the requirements (meeting customer
requirements).
Management: Quality can and must be managed.
Therefore, TQM is a process for managing quality.
Simply, TQM is a continues improvement process and also managing this
process & quality.
TQM is defined as a management approach that tries to achieve and
sustain long-term organizational success by encouraging employee
feedback and participation, satisfying customer needs and expectations,
respecting societal values and beliefs and obeying governmental statutes
and regulations.
Pillars of TQM:
Product, process, system, people and leadership form the five pillars of
TQM.
TQM word derived by the misinterpretation of some scholars like koji
kobashi former CEO (Nippon Electric Company) received Deming prize
1974 and accidently used word TQM another theory say the American
naval use word Total Quality Control.
1.2 Basic Approaches of Total Quality Management:
David Garvin identified five major approaches to defining quality.
1 The five approaches are as follows:
The Transcendent Approach:
Quality is recognized through learning and experience defined in terms
of innate excellence. In this view “quality is synonymous with ‘innate
excellence’ and is absolute and universally recognizable.” This is the
approach which aligns most closely with Socrates’ question “What is the
fine?” from Greater Hippias. This approach implies that there is a
construct called quality that is universally applicable. This is the approach
that forms the basis for Bird’s-eye view: Quality is important to
businesses but can be quite hard to define. A good definition of quality
is: “Quality is about meeting the needs and expectations of customers.
The Product-based Approach:
Quality is precise and measurable; it can be ranked on various attributes
and is an inherent part of the product. In this regard, quality is “a precise
and measurable variable” which is a composite of all the attributes that
describe the degree of excellence of a product. This approach is
illustrated by a draft of the ISO 8402 standard which stated that “quality
is the degree to which a product possesses a specified set of attributes
necessary to fulfill a stated purpose.”
The User-based Approach:
This is an approach to assure that the customer’s voice is incorporated
during product design and is reflected in consumer demand curves.
While this approach has been practical in the design of products based
on incremental innovations, it is of limited value in designing products
based on radical innovations. Products based on radical innovation enter
a market that may not exist and where customers may not be able to
articulate their needs. In the case of radical innovation, the transcendent
approach may be of more than just philosophical interest.
The Manufacturing-based Approach:
Quality is defined as conformance to specifications; reduce costs by
reducing the number of deviations with a focus on engineering and
manufacturing practices. W. Edwards Deming criticizes this approach as
“the absurdity of meeting specifications.” “Specifications don’t tell you
what you need…Just to meet specifications—what you think the
customer requires—no. That won’t keep you in business.”
The Value-based Approach:
Quality is defined as performance or conformance at an acceptable cost.
In this approach, quality is defined in terms of costs and prices. A quality
product is one that provides performance at an acceptable price or
conformance at an acceptable cost. Philip Crosby also endorses this
approach. This blends the value-based approach with the manufacturing
based approach.

1.3 Gurus of Total Quality Management:

In understanding of TQM without the philosophies of gurus it is
difficult to understand.
TQM Gurus is described here….

Walter Shewart:
Walter Shewart1 (1891–1967) was a statistician at Bell Labs and is
considered by many to be the founder of the modern quality movement,
and an innovator in the application of statistics to quality. His project
based on Bell Telephone laboratories & wrote two books; Economic
Control of Quality of Manufactured Product in 1931 and Statistical
Method from the Viewpoint of Quality Control in 1939. Shewart2 is often
referred to as the “grandfather of quality control.” He developed what
came to be known as the Shewart cycle; Plan-Do-Study-Act (PDSA) or
Plan-Do-Check-Act (PDCA) to manage the effects of variation.

W. Edwards Deming:
W. Edwards Deming (1900–1993) is often referred to as the “father of
quality control.” Deming is best known for initiating a transformation in
the Japanese manufacturing sector in the aftermath of World War II,
which enabled it to become a big player in the world market. The
Deming Prize, the highest award for quality in Japan, is named in his
honors. He is also known for his 14 Points (a new philosophy for
competing on the basis of quality), for the Deming Chain Reaction and
for the Theory of Profound Knowledge. He also modified the Shewhart
PDSA (Plan, Do, Study, Act) cycle to what is now referred to as the
Deming Cycle (Plan, Do, Check, Act).

The Deming Cycle: PDCA Cycle4:

Deming introduced the “Deming cycle,” one of the crucial QC tools
for assuring continuous improvement. The Deming cycle is also
known as the Deming wheel or the PDCA (Plan-Do-Check-Action)
cycle. Deming stressed the importance of constant interaction
among the four stages of Design, Production, Sales and Research
for a company to arrive at better quality that satisfied customers.
Plan: mean product development
Do: Production
Check: Sales
Action: Market research.
Deming’s 14-Point Methodology:
1. Constancy of purpose: Create constancy of purpose for continual
improvement of products and service, and allocate resources to cater
to long term needs rather than short-term profitability with a plan to
become competitive, stay in business and provide jobs.
2. The new philosophy: Adopt the new philosophy for one can no longer
accept delays, mistakes and defective workmanship.
3. Cease dependence on inspection: Eliminate the need for mass
inspection as a way to achieve quality by building quality into the
product in the first place.
4. End lowest tender contracts: End the practice of awarding business
contracts solely on the basis of price tags.
 5. Improve every process: Constantly improve every process involved in
the stages of planning, production and service.
6. Institute training on the job: Institute modern methods of training on
the job, including management to make maximum use of all
employees.
7. Institute leadership: Adopt and institute leadership, which is aimed at
helping people do a better job.
8. Drive out fear: Encourage effective two-way communication and
other means to drive out fear throughout the organization so that all
employees are able to work effectively and ensure greater
productivity for the company.
9. Breakdown barriers: Breakdown barriers between people in different
divisions of the organization such as R&D, Sales, Administration and
Production.
10. Eliminate exhortations: Eliminate use of slogans, posters and
exhortations demanding zero defects and new level of productivity from
the workforce, without providing commensurate methods.
11. Eliminate arbitrary numerical targets: Eliminate work standards that
prescribe numerical quotas for the workforce and numerical goals for
people in the management.
12. Permit pride of workmanship: Remove the barriers that rob hourly
workers and people in the management of their rights to pride of
workmanship.
13. Encourage education: Institute a vigorous programmed of education
and encourage self-improvement.
14. Top management’s commitment: A clearly defined commitment by
the top management to constantly improve quality and productivity.
 Joseph Juran (1904–2008):
Assisted the Japanese in their reconstruction processes after
World War II. Juran first became famous in the US as the editor of
the Quality Control Handbook (1951), and later for his paper
introducing the quality trilogy—quality planning, quality control and
quality improvement.
• Quality planning provides a system that is capable of
meeting quality standards.
• Quality control is used to determine when corrective
action is required.
• Quality improvement seeks better ways of doing things.
His philosophy is also effective in continues improvement
process.
Armand Feigenbaum:
Is credited with the creation of the idea of total quality control in his
book Quality Control.
“Three Steps to Quality,” which has been described below.
(i) Quality leadership: This is evident when the management
emphasizes on sound planning rather than reacting to failures.
The management must maintain a constant focus and lead the
quality effort.
(ii) Modern quality technology: The traditional quality development
processes cannot resolve 80 to 90 per cent of quality problems.
This task requires the integration of office staff, engineers as well
as the shop-floor workers who continually evaluate and implement
new techniques to satisfy customers in the future.
(iii)Organizational commitment: Continuous training and motivation
of the entire workforce as well as an integration of quality in
business planning stage indicates the importance of quality and
provides the means for including it in all respects of the
organization’s activities.
(iv) Philip Crosby (1926–2001)
Philip Crosby (1926–2001) came to national prominence with the
publication of his book Quality is Free (1979). He established the Absolutes
of Quality Management, which states that the only performance standard
(that makes sense) is zero defects, and the basic elements of improvement.
Goal setting, central to Crosby’s theory, was also criticized for leading to
negative accomplishment. The reality is that Deming was probably reacting
to the inappropriate use of slogans and goals.
The essence of Crosby’s teachings is contained in what he calls the “four
absolutes of quality.”
The definition: Quality is conformance to requirements, not goodness.
The system: Prevention, not appraisal.
The performance standard: Zero defects.
The measurement: The price of non-conformance to requirements, not
quality indices. Based on these premises, he developed a 14-step
methodology.

Professor Kaoru Ishikawa (1915–1989)

Professor Kaoru Ishikawa12 (1915–1989) is known as the “father of quality
circles” for his role in launching Japan’s quality movement in the 1960s.
Ishikawa advocated the following principles:
• Quality is a company-wide issue and must wield an all-pervasive influence
on the way every issue of business is conducted.
• Seven simplified tools of quality control need to be used by all the people
in an organization.
• Quality circles.

Dr Genichi Taguchi
Dr Genichi Taguchi14 is a Japanese quality expert known for his work in the
area of product design. He estimated that as much as 80 per cent of all
defective items were caused by poor product design. Taguchi stressed that
companies needed to focus their quality efforts on the design stage, as it
was much cheaper and easier to make changes during this stage than later
in the production process.

Dr Shingo Shigeo
Was a Japanese industrial engineer and perhaps the greatest contributor to
modern manufacturing practices? He defined quality as the defects in a
process. He introduced the concept of poka-yoke (zero defects). The
greatest impact of Dr. Shingo Shigeo’s teachings can be classified into three
concepts—just in time (JIT), single minute exchange of dies (SMED) and zero
quality control (ZQC). The Shingo Prize for Operational Excellence is named
after him because he distinguished himself as one of the world’s leading
experts on improving manufacturing processes.

Masaaki Imai’s
Masaaki Imai, a quality management consultant, was born in Tokyo in 1930.
In 1955, he received his bachelor’s degree from the University of Tokyo,
where he also did graduate work in international relations. In 1962, he
founded Cambridge Corp., an international management and executive
recruiting firm based in Tokyo. As a consultant, he assisted more than 200
foreign and joint-venture companies in Japan in fields including recruiting,
executive development, personnel management and organizational studies.
From 1976 to 1986, Imai served as president of the Japan Federation of
Recruiting and Employment Agency Associations. In 1986, Imai established
the Kaizen Institute18 to help Western companies introduce Kaizen
concepts, systems and tools.

Obstacles in implementing TQM:

The common barriers in the implementation and development of a TQM
programme are poor planning, lack of management commitment, resistance
of the workforce, lack of proper training, teamwork complacency, use of an
off-the-shelf programme, failure to change the organizational philosophy,
lack of resources and lack of effective measurement of quality improvement.

Benefits of TQM:
Creates a good corporate culture: Total quality management is an approach
where the customer is the focal point of the business rather than the
department.
Better reviews from customers: Another benefit of TQM is that customers
and clients are highly satisfied with the performance.
Better performance from employees: Through TQM, there is often more
attention placed on meeting the needs of the employees or internal
customers.

Historical Review:
Total quality management (TQM) is an approach to business that looks
critically not only at the products and services a company provides in
relation to the process it employs to create them, but also at the workforce,
to ensure that outputs fully satisfy customer requirements. This approach is
called “total” because it encompasses everything the company does—all its
processes and employees at every level in the company at all times. TQM is
a management philosophy that seeks to integrate all organizational
functions (marketing, finance, design, engineering, production and customer
service, etc.) to focus on meeting customer needs and organizational
objectives. TQM is a necessity. It is a journey that will never end. One theory
is that TQM was created as a result of a misinterpretation of the Japanese
words for “control” and “management” since no difference exists between
these words in Japanese. William Golimski, an American quality scholar and
consultant, refers to Koji Kobayashi, former CEO of Nippon Electrical
Company (NEC) as being the first to use the words TQM during a speech
when he received the Deming prize in 1974. The American Society for
Quality says that the term total quality management was used by the US
Naval Air Systems Command in 1984 to describe its Japanese-style
management approach to quality improvement since they did not like the
word “control” in the term total quality control. US Naval & japnese used
word SPC Statistical process control. And in last write definition TQM who is
placed in top of the notes.

TQM Framework:
Total Quality Management (TQM) is a management framework based
on the belief that an organization can build long-term success by
having all its members, from low-level workers to its highest
ranking executives, focus on improving quality and, thus,
delivering customer satisfaction. They work in development,
production, or fulfillment. The TQM framework was developed
by management consultant William Deming, who introduced it to the
Japanese manufacturing industry. Today, Toyota is perhaps the best
example of the TQM framework in action. The carmaker has a
“customer first” focus and a commitment to continuous improvement
through “total participation”.
Awareness about the improved quality:
Quality is an investment that leads towards continuous improvement.
Quality management research has produced consistent results based on
a well-established body of knowledge and widely practiced management
philosophy. Quality awareness is the way to promote quality activities
by emphasizing quality at all stages of the business, which can help
solving complex problems and denote excellence. Quality has become a
key concern to organizations, not only because of growing importance
of the quality system, but also because of the multitude challenges. The
aim of our study is to describe quality awareness components in order
to enforce quality practices in an organization.
 Unit: 2 Leadership & Total quality Management:
2.1 Defining Leadership:
Leadership is a process by which a person influences others to accomplish
an objective and directs the organization in a way that makes it more
cohesive and coherent. Leaders carry out this process by applying their
leadership attributes such as beliefs, values, ethics, character, knowledge
and skills.
“Leadership is the capacity to translate vision into reality.”--- Warren Benis
“Leadership is the only thing that differentiates successful organizations
from others over the long run.”

2.2 Characteristics of Quality Leader’s:

 Leaders create vision: One aspect common to all leaders is vision. Good
leaders create a vision, passionately own it.
 Leaders build teams: Dynamic leaders know how to build groups into teams.
 Leaders are role models: At all levels leaders need to be conscious of the
fact that they are role models for quality.
 Leaders take decisions: Leaders should ensure that the decisions made have
merit and are framed within a scheduled time period.
 Leaders inspire: An inspirational leader takes a workforce beyond
compliance and into an environment where employees embrace and believe
in the vision, want to achieve it, live the culture and seek to go beyond set
targets.

2.3 Leadership Concepts:

Leadership concepts refer to factors that leaders consider when
applying a leadership style and overseeing a team of individuals. These
 principles focus on ideas and perceptions about the traits leaders should
have and how they should perform in a leadership role. Additionally,
leadership concepts help professionals understand what kind of skills and
character traits to develop in order to advance in leadership roles.
Leadership concepts encompass the styles, traits and principles of
different approaches to managing a team of employees. Essentially,
leadership concepts are based off of various theories of management,
and these traits serve as a standard for effective managers, supervisors
and other positional leaders. Additionally, leadership concepts drive the
creation of theories of standard management styles and behaviors, and
are often inclusive of traits such as personality and character, initiative,
motivation, influence, decision-making abilities and other principles that
form the basis of many integrated leadership styles.
2.4 The seven habits of highly effective people:
Habit 1: "Be proactive":
Proactivity is about taking responsibility for one's reaction to one's own
experiences, taking the initiative to respond positively and improve the
situation.
Habit 2: "Begin with the end in mind":
Covey discusses envisioning what one wants in the future (a personal
mission statement) so one can work and plan towards it, and
understanding how people make important life decisions.
Habit 3: "Put first things first":

 Quadrant I. Urgent and important (Do) – important deadlines and crises

 Quadrant II. Not urgent but important (Plan) – long-term development
 Quadrant III. Urgent but not important (Delegate) – distractions with
deadlines
 Quadrant IV. Not urgent and not important (Eliminate) – frivolous
distractions
Habit 4: "Think win–win"[edit]
Seek mutually beneficial win–win solutions or agreements in your
relationships, says Covey. Valuing and respecting people by seeking a
"win" for all is ultimately a better long-term resolution than if only one
person in the situation had gotten their way. Thinking win–win isn't
about being nice, nor is it a quick-fix technique; it is a character-based
code for human interaction and collaboration, says Covey.
Habit 5: "Seek first to understand, then to be understood"[edit]
See also: Rogerian argument
Use empathetic listening to genuinely understand a person, which
compels them to reciprocate the listening and take an open mind to be
influenced. This creates an atmosphere of caring, and positive problem-
solving.
Habit 6: "Synergize"[edit]
Combine the strengths of people through positive teamwork, so as to
achieve goals that no one could have done alone, Covey exhorts.
Habit 7: "Sharpen the saw"[edit]
See also: Kaizen
Covey says that one should balance and renew one's resources,
energy, and health to create a sustainable, long-term,
2.5 Quality & Ethics:

Quality appears to be good business. Quality is also good

ethics. It is unethical to ship defective products knowingly to
customers. Reliable products with low defects reflect an
ethical approach of management’s care for its customers. As
an example, if someone in the grocery store has to choose
between the two leading brands of paper towels one of which
is the quicker picker-upper and another is ultra-strong. One of
the brands of paper towels is made from 100% recycled
 materials. The good ethics marketing revolution becomes a
problem when companies and advertisers cannot teach us
how to differentiate between what is a company with good
ethics and what is a company with a quality product. If
consumers demand more companies to be ethical and have
better quality standards, then this will force the companies to
become this way in order to meet their consumers’ demands.
2.6 Deming Philosophy:
Dr. W. Edwards Deming a statistician who went to Japan to help with
the census after World War II, Deming also taught statistical process
control to leaders of prominent Japanese businesses. His message
was this: By improving quality, companies will decrease expenses as
well as increase productivity and market share. After applying
Deming's techniques, Japanese businesses like Toyota, Fuji, and
Sony saw great success.
DR. Deeming give a 14 points for successful improvement process for
better productivity.
Create a constant purpose toward improvement.
 Plan for quality in the long term.
 Resist reacting with short-term solutions.
Adopt the new philosophy.
 Embrace quality throughout the organization.
 Put your customers' needs first, rather than react to
competitive pressure – and design products and services to
meet those needs.
Stop depending on inspections.
Inspections are costly and unreliable – and they don't improve quality,
they merely find a lack of quality.
Use a single supplier for any one item.
 Quality relies on consistency – the less variation you have in the input,
the less variation you'll have in the output.
Improve constantly and forever.
 Continuously improve your systems and processes. Deming promoted
the Plan-Do-Check-Act approach to process analysis and
improvement.
 Emphasize training and education so everyone can do their jobs
better.
Use kaizen as a model to reduce waste and to improve productivity,

effectiveness, and safety.
Use training on the job.
 Train for consistency to help reduce variation.
 Build a foundation of common knowledge.
Implement leadership.
Expect your supervisors and managers to understand their workers and
the processes they use.
Eliminate fear.
Allow people to perform at their best by ensuring that they're not afraid
to express ideas or concerns.
Break down barriers between departments.
Build the "internal customer" concept – recognize that each department
or function serves other departments that use their output.
Get rid of unclear slogans.
Let people know exactly what you want – don't make them guess.
Eliminate management by objectives.
Look at how the process is carried out, not just numerical targets.
Deming said that production targets encourage high output and low
quality.
Remove barriers to pride of workmanship.
 Allow everyone to take pride in their work without being rated or
compared.

Implement education and self-improvement.

Improve the current skills of workers.

Make "transformation" everyone's job.

Improve your overall organization by having each person take a step
toward quality.

2.7 Role of Leaders in TQM:

Top management facilitates employee empowerment and improved
levels of job satisfaction through its leadership and commitment to
the Total Quality Management (TQM) goal of customer satisfaction by
creating an organizational climate that emphasizes total quality and
customer satisfaction.

2.8 Implementation:
The process of putting a decision or plan into effect; execution.
In TQM 1st is implement the plan and then measure performance with
customer surveys.

2.9 Quality control:

Quality control (QC) is a process through which a business seeks to
ensure that product quality is maintained or improved. Quality control
requires the company to create an environment in which both
management and employees strive for perfection. This is done by
training personnel, creating benchmarks for product quality, and testing
products to check for statistically significant variations.
X bar chart, tauchi method & 100 percent inspection method. SIX
SIGMA is e.g of quality control.
2.10 Core Values, Concepts and Framework:
Core values of TQM:
1. Customer focus. ...
2. Total employee commitment. ...
3. Process approach. ...
4. Integrated system. ...
5. Strategic and systematic approach. ...
6. Continual improvement. ...
7. Fact-based decision-making. ...
8. Communications.
Core concept of tqm:
Customers-orientation (both internal and external), never-ending
improvement, statistical control of business processes, upstream
preventive maintenance, participative management, ongoing
preventive action, cross-functional management and committed
leadership and commitment
TQM framework present in above topic:

2.11 Strategic Planning and Communication:

Strategic planning is a process in which organizational leaders
determine their vision for the future as well as identify their goals and
objectives for the organization.
Strategic communication is a process in which organization think
how they discuss strategic plan and execute and discuss
communication plan.
 Situational Analysis: How do you gather internal and external
information to provide context to your plan? This could include a
media analysis and a competitive analysis about your field and
organization.
 Communications Goals and Objectives: What communications
goal have you established that is related to your organizational
goal? What steps have you created for measuring progress toward
your goal?
 Audiences: Who are your priority audiences? How do you identify
and segment them?
 Messages: What messages resonate the most with your
audiences? What is your call to action?
 Materials: Which tools are the most effective in reaching your
audiences?
 Pretesting: How do you learn which messages and materials
resonate with your audiences before you finalize them?
 Channels: What are the best ways to reach the audiences you
have identified?
 Activities, Events and Partnerships: What types of activities,
events and partnerships do you use to engage your audiences?
 Implementation: What is your timeline and budget? What are your
staffing needs?
 Evaluation: How do you measure success?
 Mid-Course Corrections: Are there changes or revisions you
need to make to your plan?

2.12 Decision Making:

Decision making is the process of making choices by identifying a

decision, gathering information, and assessing alternative
resolutions.

Unit-3 Customer Satisfaction and Employee

Involvement:

Customer Satisfaction (An Overview):

Customer satisfaction is defined as a measurement that

determines how happy customers are with a company’s products,
services, and capabilities. Customer satisfaction information,
including surveys and ratings, can help a company determine how
to best improve or changes its products and services. An
organization’s main focus must be to satisfy its customers. This
applies to industrial firms, retail and wholesale businesses,
government bodies, service companies, nonprofit organizations,
and every subgroup within an organization.

What is customer?
A customer is an individual or business that purchases another
company's goods or services.
Customer perception of Quality and feedback from customer:

A customer's perception of the quality of a product, brand or

business is predominately the result of subconscious thought.
Most people will have an intrinsic ability to determine a product’s
quality from looking, feeling and listening to it. Often, an opinion is
formed in a matter of minutes or even seconds. Customer
feedback about quality is an opportunity for business need to
consider it.
Effectively using customer complaints:

#1: Put Your Emotions Aside

Whether it's a friendly lady trying to simply tell you how

to do your job better.

#2: Avoid Challenging Their Complaint

It's easy and - quite frankly - natural to want to tell a

customer they are wrong in what they are saying.

#3: Thank Your Customer

The old saying "kill them with kindness" could not be

more true in a situation with a customer complaining.

#4: Acknowledge What They Say

Listening to your customer complain may not be your

ideal scenario, but try your best to really hear what they
are saying.
#5: Offer Support

Support comes in a variety of shapes and sizes.

#6: Be Flexible

If no resolution is available to make your customer happy

or at the very least, content, then consider how else you
can help them.

#8: Offer an Apology - With Gratitude Attached

The thing about saying "I'm sorry" is that a lot of people

won't believe you - and even more importantly, you may
not even mean it.

#9: Follow Up

After you've said you're sorry, showed your appreciation

and overall gave them the support they were hopefully
looking for, consider how else you can help support
customers who complain.

#10: Move On

When all is said and done, you can't dwell on customer

complaints in order to move on and forward with your
next tasks on hand.

Transforming needs into requirement of customers and

importance of customer retention.

The customer retention definition in marketing is the process of

engaging existing customers to continue buying products or
services from your business.
 Customer retention formula;

Importance of customer retention:

Your best customers don’t just buy one product or use your service
once. They come back again and again for more. Customer
retention increases your customers’ lifetime value and boosts your
revenue.

It also helps you build amazing relationships with your customers.

You aren’t just another website or store. They trust you with their
money because you give them value in exchange. It also increases
ROI, boosts loyalty, and brings in new customers.

Employee involvement in improving quality.

 Involved employees are able to make informed, logical decision

with the help of their extensive understanding of the process;
 Involved employees are more likely to get behind decisions they
helped to make;
 Involved employees can notice and report on improvement areas
or competency gaps;
 Involved employees are better equipped to take instant corrective
actions;
 Involved employees feel like they are part of the company, and
have more morale and motivation to make it successful;
 Involved employees communicate better with their peers and
work more productively and effectively with others;
 Involved employees handle change better and wish to have more
control over the work environment;
 Involved employees are committed to achieving goals because
they feel truly invested.

Motivational theories:

Three theories of employee motivation formulated during the 1950s

are probably the best known.

Hierarchy of needs theory:

The best-known theory of motivation is Abraham Maslow’s

hierarchy of needs, 4 which hypothesizes that within every human
being there is a hierarchy of five needs

The original five needs are:

1. Physiological. Includes hunger, thirst, shelter, sex, and other bodily

needs.

2. Safety-security. Security and protection from physical and emotional

harm.

3. Social-belongingness. Affection, belongingness, acceptance, and

friendship.

4. Esteem. Internal factors such as self-respect, autonomy, and

achievement, and external factors such as status, recognition, and
attention.
5. Self-actualization. Drive to become what we are capable of becoming;
includes growth, achieving our potential, and self-fulfillment.

Herzberg Two-Factor theory:

Believing an individual’s relationship to work is basic, and that the

attitude toward work can determine success or failure, psychologist
Frederick Herzberg wondered, “What do people want from their
jobs?

Intrinsic factors such as advancement, recognition, responsibility, and

achievement seem related to job satisfaction. Respondents who felt good
about their work tended to attribute these factors to their situations, while
dissatisfied respondents tended to cite extrinsic factors, such as
supervision, pay, company policies, and work conditions.

McClelland’s theory of needs:

McClelland’s theory of needs was developed by David McClelland and

his associates.11 As opposed to, say, Maslow’s hierarchy, these needs are
more like motivating factors than strict needs for survival.

There are three:

• Need for achievement (nAch) is the drive to excel, to achieve in

relationship to a set of standards.

• Need for power (nPow) is the need to make others behave in a way they
would not have otherwise.

• Need for affiliation (nAff) is the desire for friendly and close
interpersonal relationships.

Empowerment:

Empowerment means giving people authority to make decisions

based on what they feel is right, have control over their work, take
risks and learn from mistakes, and promote change (Evans and
Lindsay, 2008).

Empowerment is the process of enabling or authorizing an

individual to think, behaves, take action, and control work and
decision making in autonomous ways.

Employees empowerment The basic philosophy of total quality

management is to involve every employee in the organization
along with its suppliers and distributers to improve quality and thus
enhance customer satisfaction. Employee involvement is very
important in any T.Q.M initiative, as it is a system wherein
employees are encouraged to use their expertise and knowledge to
suggest methods for improvements in their work areas. These
suggestions could relate to improvements in the job, the product,
the work atmosphere or the company as a whole. Many companies
have ventured into a participation-style of management by
involving employees in the problem solving and decision making
processes. While the actual practice of employee empowerment
varies across organizations, empowerment is based on the
concept of job enlargement and job enrichment. Job enrichment
involves increasing the depth of the job to include responsibilities
that have traditionally been carried out at higher levels of the
organization.

Teams and their effectiveness:

Team effectiveness is the capacity a team has to accomplish

its goals and objectives over time. For teams to be highly
effective, leaders need to create work environments and team
cultures that foster and balance employee performance with well-
being.

Rewards, Recognition and Performance appraisal

 A reward is something given or done in return for good.

There are two types of rewards—tangible and intangible. Tangible

rewards are money, vacations, and material objects.

Intangible rewards can be things such as prizes, plaques, and

awards given at annual celebrations for exceptional performance
like employee of the year.

Recognition:

What is TQM recognition?

Recognition is a process whereby management shows
acknowledgement of an employee's outstanding performance.

Performance appraisal:

The term performance appraisal refers to the regular review of an

employee's job performance and overall contribution to a company.
Also known as an annual review, performance review or
evaluation, or employee appraisal, a performance appraisal
evaluates an employee’s skills, achievements, and growth, or lack
thereof.

 Self-assessment: Individuals rate their job performance and

behavior.
 Peer assessment: An individual's workgroup or coworkers rate
their performance.
 360-degree feedback assessment: Includes input from an
individual, supervisor, and peers.
 Negotiated appraisal: A newer trend that utilizes a mediator and
attempts to moderate the adversarial nature of performance
evaluations by allowing the subject to present first.

Union and employee involvement:

A labor union is an organization that acts as an intermediary

between its members and the business that employs them. The
main purpose of labor unions is to give workers the power to
negotiate for more favorable working conditions and other
benefits through collective bargaining.
Employee involvement:
Employee involvement is the direct participation of staff in activities
that help the business fulfill its mission and attain its goals.

Benefits of employee involvement?

1. You have more motivated employees

2. You retain and attract talent because of your employee-centric
culture
3. You manage change better and welcome it
4. Your employees care more about attaining business goals
5. You nurture a learning environment.
Unit-4 Continuous Process of Improvement and
Performance Measures

Perfection through continuous improving process

 Remind however that perfection is not only about quality of the end product or
end service itself. And certainly not what the delivering organisation thinks itself
about what should be ‘the perfection’. It is about what perfection is for
customers. There is obviously a strong relation to Lean’s 1st principle:
Customer Value. Perfection is also about delivering at the right time – i.e. when
the customer expects it -, and at a fair price. It is of course also about – even
mainly – how to achieve perfection for customers through the entire value
stream or value chain. But if the Perfection principle is actually about Quality
and Continuous Improvement, how is it different from other Quality
Management philosophies or methodologies, like Total Quality Management,
ISO, etc.? Let’s have a closer look…Simply perfection is based on
lean,pdca,kaizen.

Process:

The Continuous Improvement Process (CIP) is an ongoing effort to

improve products, services, or processes. It’s is a six-step
systematic approach to plan, sequence and implement
improvement efforts using data and elaborates on the Shewhart
Cycle (Plan, Do, Study Act).
The Six (6) Steps of the Continuous Improvement Process
(CIP)

Step 1: Identify Improvement Opportunity: Select the

appropriate process for improvement.
Evaluate Process:
Select a challenge/problem
Step 2: Analyze: Identify and verify the root cause(s).
Step 3: Take Action: Plan and implement actions that
correct the root cause(s).
Step 4: Study Results: Confirm the actions taken to achieve
the target.
Step 5: Standardize Solution: Ensure the improved level of
performance is maintained.
Step 6: Plan for the Future:
Plan what is to be done with any remaining problems
Evaluate the team’s effectiveness Set a target for
improvement

The Juran Approach to continuous improvement process:

The Juran Trilogy was developed by Dr. Joseph Juran, and it’s
something I learned about recently in my Total Quality
Management and Six Sigma course. The Juran Trilogy is an
improvement cycle that is meant to reduce the cost of poor quality
by planning quality into the product/process.

The Juran Trilogy

1. Quality Planning
In the planning stage, it is critical to define who your customers are
and find out their needs (the “voice of the customer”). After you
know what your customers need, you’re able to define the
requirements for your product/process/service/system, etc., and
develop it. Additionally, any plans that might need to be transferred
to operators or other key stakeholders should be done during the
planning phase. Planning activities should be done with a
multidisciplinary team, with all key stakeholders represented.

2. Quality Control
During the control phase, determine what you need to measure
(what data do you need to know if your process is working?), and
set a goal for your performance. Get feedback by measuring actual
performance, and act on the gap between your performance and
your goal. In Statistical Process Control (SPC), there are several
tools that could be used in the “control” phase of the Juran Trilogy:
Pareto Analysis, flow diagrams, fishbone diagram, and control
charts, to name a few.
3. Quality Improvement
There are four different “strategies” to improvement that could be
applied during this phase:

 Repair: Reactive; fix what’s broken.

 Refinement: Proactive; continually improve a process that
isn’t broken (like the continual pursuit of perfection in Lean!)
 Renovation: Improvement through innovation or technological
advancement
 Reinvention: Most demanding approach; start over with a
clean slate.

Improvement Strategies:

6 Process Improvement Strategies

1. Define Business Processes.

Process maps provide the foundation for how work gets done
and insights into what can be done to improve it. By defining
and deploying strong business processes, an organization
engages its employees in a valuable way, distributing
responsibility and accountability closer to the work itself.

2. Improve the Customer Experience.

Behind every unhappy customer lays a broken business

process. Improving the customer experience begins by
aligning internal business processes to deliver better
external customer outcomes. By systematically studying
customers, an organization can build robust business
processes that consistently meet their needs.

3. Reduce Costs.

By understanding cost drivers, an organization can improve

its costs effectiveness. These costs come from four basic
areas, including inputs, conversion, people, and supporting
overhead. When organizations operate through strong
standard business processes, the costs of goods and
services become transparent, which facilitates visible and
sustainable improvement.

4. Improve Process Efficiency.

Efficiency defines the extent to which a process performs

relative to its full potential. Greater efficiency comes by
delivering a greater output of goods and services relative to
the assets required for that purpose. Less efficient
organizations operate at a competitive disadvantage.

5. Improve Resource Productivity.

Organizations acquire assets with the express purpose of

using them to produce profits. The productivity of those
assets is derived from the ratio of outputs produced by the
process relative to the resources required to produce those
outputs. Assets include people, tools and equipment,
facilities, information technology, and intellectual property.
Few actually measure the extent to which assets serve their
intended purpose.

6. Reduce Response Time.

By understanding the business processes that produce and

deliver products and services to a satisfied customer, an
organization can systematically analyze the time and
activities behind that value creation. By removing non-value
added tasks and time, any organization can
dramatically reduce cycle times. An organization that builds
consistent capability to deliver a faster response will enjoy a
preferred position with customers.

Types of problem:
Simple problem
Complicated problem
Complex problem
Chaotic problem (tsanumi,stock market crash they come
accidently)
Problem solving method:
Kaizen:
Kaizen is an approach to creating continuous improvement
based on the idea that small, ongoing positive changes can reap
significant improvements. It was developed in the manufacturing
sector to lower defects, eliminate waste, boost productivity,
 encourage worker purpose and accountability and promote
innovation.
Kaizen cycle for continuous improvement
Kaizen can be implemented in a seven-step cycle to create an
environment based on continuous improvement. This systematic
method includes the following steps:

 Get employees involved. Seek the involvement of employees,

including soliciting their help in identifying issues and problems.
Doing so creates buy-in for change. Often, this is organized as
specific groups of individuals charged with gathering and
relaying information from a wider group of employees.
 Find problems. Using widespread feedback from all
employees, gather a list of problems and potential opportunities.
Create a list if there are many issues.
 Create a solution. Encourage employees to offer creative
solutions, with all manner of ideas encouraged. Pick a winning
solution or solutions from the ideas presented.
 Test the solution. Implement the winning solution chosen
above, with everyone participating in the rollout. Create pilot
programs or take other small steps to test out the solution.
 Analyze the results. At various intervals, check progress, with
specific plans for who will be the point of contact and how best
to keep ground-level workers engaged. Determine how
successful the change has been.
 If results are positive, adopt the solution throughout the
organization.
 These seven steps should be repeated on an ongoing basis,
with new solutions tested where appropriate or new lists of
problems tackled.

Reengineering:
This theory is developed the Fredrick Winslow tailor
Reengineering is most commonly defined as the redesign of
business processes—and the associated systems and
organizational structures—to achieve a dramatic improvement in
business performance. It is the examination and change of five
components of the business strategy, process, technology,
organization, and culture. Many companies continue to experiment
with reengineering, even if they have failed in previous attempts.

Process of BPR;

Step #1: Identity and Communicating the Need for

Change

Step #2: Put Together a Team of Experts (SENIOR &

OPERATIONAL MANGER & REENGINEERING EXPERT)

Step #3: Find the Inefficient Processes and Define Key

Performance Indicators (KPI)

Step #4: Reengineer the Processes and Compare KPIs.

Six sigma:

Six Sigma is a set of management tools and techniques designed

to improve business by reducing the likelihood of error. It is a data-
driven approach that uses a statistical methodology for eliminating
defects.
The two main Six Sigma methodologies are DMAIC and DMADV.
Each has its own set of recommended procedures to be
implemented for business transformation.

DMAIC is a data-driven method used to improve existing products

or services for better customer satisfaction. It is the acronym for the
five phases: D – Define, M – Measure, A – Analyze, I – Improve, C
– Control. DMAIC is applied in the manufacturing of a product or
delivery of a service.

DMADV is a part of the Design for Six Sigma (DFSS) process used
to design or re-design different processes of product manufacturing
or service delivery. The five phases of DMADV are: D – Define, M
– Measure, A – Analyse, D – Design, V – Validate. DMADV is
employed when existing processes do not meet customer
conditions, even after optimization, or when it is required to
develop new methods. It is executed by Six Sigma Green Belts and
Six Sigma Black Belts and under the supervision of Six Sigma
Master Black Belts. We'll get to the belts later.

Objectives of Performance measures:

 To help clarify organisation goals, directions and expectation.

 To help organisations learn how to accomplish goals more
effectively.
 To communicate the priorities of the organisation.
 To support strategic/business line planning by linking broad
statements of direction to specific operational outputs and
outcomes.
 To support budgetary planning and resource allocation
processes.
 To monitor the operation of programs and to make continuous
improvements.

Appropriate Strategy:
Top management’s performance can usually be measured in
terms of sales volume, market share, cash flow, profit, ROI,
dividends and market value.
Presentation of Performance Measures:
Make simple presentations of performance measures and
include all stockholder and management for self-assessment,
control, continues improvement, management assessment.
Quality Costs:
Quality costs are the costs associated with preventing,
detecting, and remediating product issues related to quality.
Types of quality cost:
Prevention cost
Appraisal cost
Internal failure cost
External failure cost.
Malcolm Baidrige National Quality Award;

The Malcolm Baldrige National Quality Award (MBNQA) is an

award established by the U.S. Congress in 1987 to raise
awareness of quality management and recognize U.S.
 companies that have implemented successful quality
management systems. The award is the nation's highest
presidential honor for performance excellence.
Three MBNQA awards can be given annually in six categories:

 Manufacturing
 Service Company
 Small Business
 Education
 Healthcare
 Non-profit.

Unit-5 Benchmarking “A tool for Continuous

Improvement” Tomorrow.
Concept of Benchmarking:

Benchmarking is the competitive edge that allows organizations to

adapt, grow, and thrive through change. Benchmarking is a
systematic and continuous measurement process. It is a process of
measuring and comparing an organization’s business processes
against business process leaders anywhere in the world, to gain
information which will help the organization to improve its
performance. It is basically a quality practice. Benchmarking is the
process of measuring key business metrics and practices and
comparing them—within business areas or against a competitor,
industry peers, or other companies around the world—to
understand how and where the organization needs to change in
order to improve performance.

There are four main types of benchmarking: internal, external,

performance, and practice.
1. Performance benchmarking involves gathering and comparing
quantitative data (i.e., measures or key performance indicators).
Performance benchmarking is usually the first step organizations
take to identify performance gaps.
2. Practice benchmarking involves gathering and comparing
qualitative information about how an activity is conducted through
people, processes, and technology.
3. Internal benchmarking compares metrics (performance
benchmarking) and/or practices (practice benchmarking) from
different units, product lines, departments, programs, geographies,
etc., within the organization.
.External benchmarking compares metrics and/or practices of one
organization to one or many others.

Importance of Benchmarking:

1.Increase effectiveness and efficiency

Performing regular benchmarks contributes to a company's overall

effectiveness and efficiency by allowing an organization to identify
any potential areas of improvement internally.

2. Set clear business goals

Performing regular benchmarks will allow you to set clearer

business goals for your organization.

3. Provide new opportunity for discovery

Another reason why benchmarking in business is important is

because it gives you a way to discover new opportunities for
increased growth and success.

4. Increase business sales performance

Strong sales greatly increase a company's overall success, but not
having the appropriate insight to understand your sales
performance can create a barrier for your organization.

5. Motivate employees

Regular benchmarking in business also provides a great

opportunity to rejuvenate employees and increase their overall
motivation and contribution to the organization.

6. Better understand the competition

An obvious reason why benchmarking in business is important is

that it allows you to better understand your competition as a whole

7. Improve quality of product

You can also use benchmarking to assess your current product

quality and improve upon it.

Definition of Benchmarking

Benchmarking is the process of measuring key business metrics

and practices and comparing them—within business areas or
against a competitor, industry peers, or other companies around
the world—to understand how and where the organization needs to
change in order to improve performance. Types of bench marking
is also mention in def.

Important Reasons of Benchmarking:

Same topic of imp of benchmarking is also mention in this topic and

readout.
Process of Benchmarking

Planning:

Simply do planning how benchmarking is do for organization?

Collection of Information

Information can be broadly classified under the sub texts of

primary data and secondary data. (Marketing research, Expolitory
research, Interviews, Quesniores, etc.)

Analysis of Data

Once sufficient data is collected, the proper analysis of such

information is of foremost importance.

Implementation

This is the stage in the benchmarking process where it becomes

mandatory to walk the talk.

Monitoring
As with most projects, in order to reap the maximum benefits of
the benchmarking process, a systematic evaluation should be
carried out on a regular basis.
Deciding what to Benchmark:
Selecting the right benchmarks is essential to successful
benchmarking. For instance, if you apply the benchmarking
process to your customer service department and select time
spent on hold as one of your benchmarks, this has the potential to
be useful only if that really is a priority concern for your customers.
If the successful resolution of complaints is a higher priority for
most of your customers, time spent on hold may be a
counterproductive benchmark for you to study. Pricing is one
example of a useful benchmark. If your competitor is selling far
more of a similar product than you at a lower price, the difference
in price may well be the reason for the difference in sales. Where
you need benchmarking & what sector.
Benchmark Planning:
Benchmarking is a technique that enables better strategic
planning in business. Benchmarking involves looking at other
examples of best practices used by competitors or within other
industries. Benchmarking may be used to evaluate products,
services, processes or functions.
Actions to close the Gap between Benchmark:
Closing the Gap with Internal Benchmarks, When a company
uses benchmarking across the enterprise, it builds a more realistic
foundation for improvements. Even when products are somewhat
different from plant to plant, or among the various lines, the
company sets the stage for operational excellence.
Closing the Gap by Looking to Other Industries for Insight, It’s
natural to look to across the same industry for insight about
manufacturing performance.
Closing the Gap with Survey Data Survey-based benchmarks provide the
best estimation of performance “perception.”
Closing the Gap with Rich Real-Time Information Internal
benchmarking is an excellent place to begin a benchmarking effort.
Closing the Gap from Perception to Reality Performance
expectations for a production line, plant or industry are formed from past
performance and perceptions about what constitutes manufacturing
excellence.
Pitfalls and Criticisms of Benchmarking:
Pitfalls and Criticisms of Benchmarking The basic idea of
benchmarking can be summed up quite simply. Find someone who
executes a process better than you do and imitate what he or she
does. The most persistent criticism of benchmarking comes from
the idea of copying others. How can an organization be truly
superior if it does not innovate to get ahead of competitors? It is a
question, but one can also ask the reverse: How can an
organization even survive if it loses track of its external
environment? Benchmarking is not a strategy, nor is it intended to be
a business philosophy. It is an improvement tool and must be used
properly. Benchmarking isn't very helpful if it is used for processes
that don't offer much opportunity for improvement. It breaks down if
process owners and managers feel threatened or do not accept
and act on findings. Over time, things change and what was state-
of-the-art yesterday may not be today. Some processes may have

to be benchmarked repeatedly. Benchmarking is also not a

substitute for innovation; however, it is a source of ideas from
outside organization. Benchmarking forces an organization to set
goals and objectives based on external reality. Consumers care
about quality, cost, and delivery, and not productivity of the
organization. If any organization implement wrong strategy you
copying you’re are failed with those company.