Total Quality Management

1.1 Why Quality Needed?

Ans - Reasons for quality becoming a cardinal priority for most organizations:

• Competition – Today’s market demand high quality products at low cost. Having `high quality’ reputation is not
Enough! Internal cost of maintaining the reputation should be less.

• Changing customer – The new customer is not only commanding priority based on volume but is more
Demanding about the “quality system.”

• Changing product mix – The shift from low volume, high price to high volume, low price have resulted in a
Need to reduce the internal cost of poor quality.

• Product complexity – As systems have become more complex, the reliability requirements for suppliers of
Components have become more stringent.

• Higher levels of customer satisfaction – Higher customer’s expectations are getting spawned by increasing
Competition.

Note- Relatively simpler approaches to quality viz. product inspection for quality control and incorporation of
Internal cost of poor quality into the selling price, might not work for today’s complex market environment.

1.2 Origin and Evolution of TQM

The roots of Total Quality Management (TQM) can be traced back to early 1920s when statistical theory was first
applied to product quality control. This concept was further developed in Japan in the 40s led by Americans.
Example: Deming, Juran and Feigenbaum.
The focus widened from quality of products to quality of all issues within an organization – the start of TQM.

The following shows the history of Total Quality Management, from inspection to business excellence.
1. Inspection: Inspection involves measuring, examining, and testing products, process and services against
Specified requirements to determine conformity. During the early years of manufacturing, inspection
Was used to decide whether a worker’s job or a product met the requirements; therefore, acceptable.
It was not done in a systematic way, but worked well when the volume of production was reasonably
low. However, as Notes organizations became larger, the need for more effective operations became
Apparent. In 1911, Frederick W. Taylor published ‘The Principles of Scientific Management’ which
Provided a framework for the effective use of people in industrial organizations. Inspection still
has an important role in modern quality practices. However, it is no longer seen as the answer to all
quality problems. Rather, it is one tool within a wider array.

2. Statistical Quality Control: Statistical Quality Control focuses on product and the detection and
Control of quality problems. It involves testing samples and statistically infers compliance of all products.
It is carried out at stages through the production process; and it relies on trained production personnel
And quality control professionals. Shewart’s work was later developed by Deming, Dodge and
 Roming. However, manufacturing companies did not fully utilize these techniques until the late 1940s.

3. Quality in Japan: In the 1940s, Japanese products were perceived as cheap, shoddy imitations. Japanese
industrial leaders recognized this problem and aimed to produce innovative high quality products. They
invited a few quality gurus, such as Deming, Juran, and Feigenbaum to learn how to achieve this aim.
In the 1950s, quality control and management developed quickly and became a main theme of Japanese
management. A by-product of quality circles was employee motivation. Workers felt that they were
involved and heard. Another by-product was the idea of improving not only quality of the products, but
also every aspect of organizational issues. This probably was the start of the idea, total quality.

4. Total Quality: The term ‘total quality’ was used for the first time in a paper by Feigenbaum at the first
international conference on quality control in Tokyo in 1969. The term referred to wider issues within an
organization. Ishikawa also discussed ‘total quality control’ in Japan, which is different from the western
idea of total quality. According to his explanation, it means ‘company-wide quality control’ that involves
all employees, from top management to the workers, in quality control.

5. Total Quality Management: In the 1980s to the 1990s, a new phase of quality control and management
Began. This became known as Total Quality Management (TQM). Having observed Japan’s success
of employing quality issues, western companies started to introduce their own quality initiatives. A
typical definition of TQM includes phrases such as: customer focus, the involvement of all employees,
continuous improvement and the integration of quality management into the total organization.
Total quality management was developed by a number of Japanese firms in the 1950s and 1960s. But
it was built largely on the teachings of W. Edwards Deming and Joseph Juran, two Americans who had
quietly developed the principles in the aftermath of the second world war.

6. Quality Awards and Excellence Models: In 1988 a major step forward in quality management was made
with the development of the Malcolm Baldrige Award in the United States. The model, on which the award
was based, represented the first clearly defined and internationally recognized TQM model. It was
developed by the United States government to encourage companies to adopt the model and improve their
competitiveness. In response to this, a similar model was developed by the European Foundation of Quality
Management in 1992. This EFQM Excellence Model is the framework for the European Quality Award.

7. Business Excellence: TQM models are often called Business Excellence Models. Also, TQM itself is now
often called Business Excellence. This is to distinguish the “new TQM” from the past work on TQM.
Business Excellence is really the same as TQM, but with a more clearly defined approach. Total quality
management was developed by a number of Japanese firms in the 1950s and 1960s. But it was built largely
on the teachings of W. Edwards Deming and Joseph Juran, two Americans who had quietly developed the
principles in the aftermath of the second world war.
1.3 Meaning and Definition of Quality:

There are varied definitions of quality. Few of these are:

“Quality is conformance to specifications.” —British Defense Industries Quality Assurance Panel
“Quality is conformance to requirements.” —Philip Crosby
“Quality is fitness for purpose.” —Dr Juran
“Quality is synonymous with customer needs and expectations.” —R J Mortiboys
“Quality is a predictable degree of uniformity and dependability, at low cost and suited to the market.”
—Dr Edward Deming

DEFINING QUALITY:
Quality can be quantified as follows Q=P/E
Where Q = Quality P = Performance E = Expectation

DIMENSIONS OF QUALITY:
Dimension Meaning and Example
Performance ……………………………………………… Primary product characteristics,
such as the brightness of the picture
Features …………………………………………… Secondary characteristics, added features,
such as remote control
Conformance ………………………………………………… Meeting specifications or industry standards,
workmanship
Reliability ………………………………………………….. Consistency of performance over time,
average time of the unit to fail
Durability ……………………………………………. Useful life, includes repair
Service ………………………………………………… Resolution of problems and complaints,
ease of repair
Response …………………………………………………. Human – to – human interface, such as the
Courtesy of the dealer
Aesthetics …………………………………………………… Sensory characteristics, such as exterior finish
Reputation ………………………………………………. Past performance and other intangibles, such
as being ranked first.
1.4 Product vs Service Quality
Quality is measured differently in manufacturing and service industries. There are three reasons
for this:

 the tangibility of the product

 the time of production
 the level of customer contact

Service Quality

Service is gauged to be of high quality if the service provided is appropriate for the task at hand and if it is
technically sound as measured by the degree to which the service provided produces a customer’s desired result.
Unlike the sale of a product, the provision of a service requires the direct interaction of the customer and service
provider. As a result, service quality is often assessed using qualitative measures.

Service Quality Measures – A customer’s perception of service quality tends to be positive if the manner in which
a service is provided meets or exceeds customer expectations in very specific ways that tend to establish or reinforce
an organization’s relationship with a customer. Eric Miller writes in “A Handbook for Measuring Customer
Satisfaction and Service Quality” that customers expect a consistent, reliable and timely provision of service, a
service provider who possesses the skills necessary to provide the service and an accessible service provider who is
polite and respectful, and who communicates with the customer in a language the customer is able to comprehend.

In addition, high service quality is achieved by a service provider who does the work necessary to understand the
customers’ needs and engenders confidence, through attitude and expertise, that service objectives will be
accomplished.

Product Quality

In that product quality implies an organization’s ability to produce low-cost products at a high volume, quantitative
tools are frequently used to measure product quality. Unlike the tools frequently used to measure service quality,
product quality assessment tools evaluate the degree to which a product adheres to its formal specifications. These
specifications may include customer business requirements and performance, technical and regulatory requirements

Product Quality Measures – Joel Wisner writes in “Principles of Supply Chain Management: A Balanced
Approach” that the quality of a product is frequently evaluated on the basis of the number of defects per unit
produced, the number of products returned or the number of warranty claims per units sold, the number of quality
certified suppliers used to produce the product, the implementation of statistical process control in the production
processes, the lead time from defect identification to correction, and the number of quality awards won by an
organization.
1.5 Total Quality Management:
Introduction:
Total Quality Management (TQM), a buzzword phrase of the 1980’s, has been killed and resurrected on a number
of occasions. The concept and principles, though simple seem to be creeping back into existence by “bits and pieces”
through the evolution of the ISO9001 Management Quality System standard.
“Total Quality Control” was the key concept of Armand Feigenbaum’s 1951 book, Quality Control: Principles,
Practice, and Administration, in a chapter titled “Total Quality Control”. Feigenbaum grabs on to an idea that
sparked many scholars interest in the following decades that would later be catapulted from Total Quality Control
to Total Quality Management.
TQM has been widely used in manufacturing, education, government, and service industries,well as NASA space
and science programs.
Definition of TQM
According to International Organization for Standardization (ISO): “TQM is a management approach for an
organization, centered on quality, based on the participation of all its members and aiming at long-term success
through customer satisfaction, and benefits to all members of the organization and to society.”
One major aim is to reduce variation from every process so that greater consistency of effort is obtained. TQM is
composed of three Paradigms:
Total: Involving the entire organization, supply chain, and/or product life cycle
Quality: With its usual Definitions, with all its complexities
Management: The system of managing with steps like Plan, Organize, Control, Lead, Staff, provisioning and the
Likes.
TQM is defined as both a philosophy and a set of guiding principles that represent the foundation of a continuously
improving organization. It is the application of quantitative methods and human resources to improve all the
Processes within an organization and exceed customer needs now and in the future.
TQM integrates fundamental management techniques, existing improvement efforts, and technical tools under a
disciplined approach.
BASIC CONCEPTS OF TOTAL QUALITY MANGEMENT:
Top Management commitment to quality in all aspects
 Customers focus of the organization
 Process focus and improvement
 Measurement of Performance
 Employee involvement and empowerment
 Continuous Improvement
 Bench Marking
 Teams
 Supplier Teaming
 Training of employees
 Inventory management
 Communication
 Quality cost
PRINCIPLES OF TQM:
 Customer‟s requirements must be met the first time, every time.
 There must be agreed requirements, for both internal and external customers.
 Everybody must be involved, from all levels and across all functions.
 Regular communication with staff at levels is must. Two way communication at all levels must be promoted.
 Identifying training needs and relating them with individual capabilities and requirements is must.
Top managements participation and commitment is must.
 A culture of continuous improvement must be established.
 Emphasis should be placed on purchasing and supplier management every job must add value.
 Quality improvement must eliminate wastes and reduce total cost. There must be a focus on the prevention of
problems.
 A culture of promoting creativity must be established.
 Performance measure is a must at organization, department and individual levels.
 It helps to asses and meet objectives of quality.
 There should be focus on team work

SIX BASIC CONCEPTS OF TOTAL QUALITY MANAGEMENT

1. Management Commitment
2. Customer Focus
3. Involvement and utilization of entire work force
4. Continuous Improvement
5. Treating Suppliers as Partners
6. Establish Performance Measures for the processes
GURUS OF TQM:
SHEWHART - Control chart theory PDCA Cycle
DEMING -Statistical Process Control
JURAN - Concepts of SHEWHART Return on Investment (ROI)
FEIGANBAUM - Total Quality Control Management involvement Employee
Involvement Companywide quality control.
ISHIKAWA - Cause and Effect Diagram Quality Circle concept
CROSBY - “Quality is Free” Conformance to requirements
TAGUCHI - Loss Function concept Design of Experiments

OBSTACLES IN IMPLEMENTING TQM:

Lack of Management Commitment
 Inability to change organizational culture
 Improper Planning
 Lack of continuous training and education
 Incompatible organizational structure and isolated individuals and departments
 Ineffective measurement techniques and lack of access to data and results.
 Paying inadequate attention to internal and external customers
 Inadequate use of empowerment and teamwork
 Failure to continually improve
Quality Guru:
–Individuals who have been identified as making a significant contribution to improving the quality of goods and
services.
• Walter A. Shewhart
• W. Edwards Deming
• Joseph M. Juran
• Armand Feigenbaum
• Philip Crosby
• Genichi Taguchi
• Kaoru Ishikawa
Contribution of Crosby, Deming and Juran
• Walter A. Shewhart
–Statistician at Bell Laboratories
• Developed statistical control process methods to distinguish between random and nonrandom variation in
Industrial processes to keep processes under control .
• Developed the “plan-do-check-act” (PDCA) cycle that emphasizes the need for continuous improvement.
Shewhart’s Plan-Do-Check-Act (PDCA) Cycle .
• W. Edwards Deming –Advocated Statistical Process Control (SPC)
• Methods which signal shifts in a process that will likely lead to products and/or services not meeting customer requirements. •
Emphasized an overall organizational approach to managing quality.
• Demonstrated that quality products are less costly than poor quality products.
• Identified 14 points critical for improving quality

The Deming philosophy

14 points for management:
1. Create and publish to all employees a statement of the aims and purposes of the company. The management must demonstrate
their commitment to this statement.
2. Learn the new philosophy.
3. Understand the purpose of inspection – to reduce the cost and improve the processes.
4. End the practice of awarding business on the basis of price tag alone.
5. Improve constantly and forever the system of production and service
6. Institute training
7. Teach and institute leadership.
8. Drive out fear. Create an environment of innovation.
9. Optimize the team efforts towards the aims and purposes of the company.
10. Eliminate exhortations for the workforce.
11. Eliminate numerical quotas for production.
12. Remove the barriers that rob pride of workmanship.
13. Encourage learning and self-improvement.
14. Take action to accomplish the transformation

TQM Framework :

1.7 Who is customer?

1.8 Customer Focus
The first quality management principle begins with the customer. Having a customer focus ensures that your
Customer receives the benefit of a product or service you are offering. This lies at the centre of most Organisations,
because without customers, your Organisation will serve no purpose to exist.
Ultimately, the customers are fundamental to the Organisation and therefore you need to understand the importance
of achieving quality and strive to do this you must have a customer focus.

Customer orientation
 It is a business strategy that requires management &employees to focus on the changing wants & needs of
its customers.
 It refers to a series of actions taken by the management to support the needs of their customers by engaging
engaging their employees in order to ensure customer satisfaction.
 It is a modern marketing philosophy & approach that guide the marketing managers to design their marketing
mix in such a way that the firm can offer max. possible satisfaction to target customers.

Customer satisfaction
The customer satisfaction (ACSI) index score is calculated as a weighted average of three survey questions that measure
different facets of satisfaction with a product or service. ACSI researchers use proprietary software technology to estimate
estimate the weighting for each question.

Customer complaints
Customer complaints are measured as a percentage of respondents who indicate they have complained to a company directly
about a product or service within a specified time frame. More complaints mean more dissatisfaction.

Customer Retention
- It is the final result of customer satisfaction and customer loyalty
- Most cases what customer says or feels may vary from actual consumption or purchase
- Customer must refer more customers and increase the revenue
- External research must be done to feel the pulse of the customer
- Employee retention is proportional customer retention

1.9 Quality costs:

The costs that are associated with preventing, finding, and correcting defective work are Quality Costs.
Normally, these costs are running at 20% – 30% of sales.
Many of these costs can be significantly reduced or completely avoided.
One of the key functions of a Quality Analysis / Engineer is the reduction of the total cost of quality associated with a product /
service.
Below are the main Quality Costs
 Prevention Costs
 Appraisal Costs
 Failure Costs
 Internal Failure Costs
 External Failure Costs
Total Cost of Quality can be calculated as the sum of costs: Prevention + Appraisal + Internal Failure + External Failure.
a)Prevention Costs: Costs of activities that are specifically designed to prevent poor quality which include
 Coding errors
 Design errors
 Mistakes in the user manuals
 Deadly documented or unmaintainably complex code
Most of the prevention costs don’t fit within the Testing Group’s budget. This money is spent by the programming, design,
and marketing staffs
b)Appraisal Costs: Costs of activities designed to find quality problems, such as code inspections and any type of testing.
Design reviews are part of prevention and part appraisal.
Please note the following two points:
1. To the degree that you’re looking for errors in the proposed design itself when you do the review, you’re doing an appraisal.
2. To the degree that you are looking for ways to strengthen the design, you are doing prevention.
Failure Costs: Costs that result from poor quality, such as the cost of fixing bugs and the cost of dealing with customer
complaints.
c) Internal Failure Costs:
Failure costs that arise before your company supplies its product to the customer. Along with costs of finding and fixing bugs
are many internal failure costs borne by groups outside of Product Development. If a bug blocks someone in your company
From doing his or her job, the costs of
 the wasted time
 the missed milestones
 and the overtime to get back onto schedule
Are all internal failure costs.
d) External Failure Costs:
External failure costs are much higher. The costs that arise after your company supplies the product to the customer such as
- Customer service costs
- Cost of patching a released product distributing the patch.
It is much cheaper to fix problems before shipping the defective product to customers.