CHAPTER 1: TQM EVOLUTION

Powerpoint created by:

Juan Paolo G. Biscocho
 Which is more Important?

Quality of Management?
Or
Management of Quality?

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Chapter Objectives: At the end of the lesson the
students will be able to:

 be generate the right meaning and

interpretation of quality and other related
terms as these will provide a strong
foundation for TQM
 Identify the various dimensions of quality
 Outline a historical perspective of quality
and the evolution of TQM

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 Introduction:
 What is Quality?
– Merriam Webster’s Collegiate Dictionary,
10th Edition(1994) defines quality as
“an inherent feature; degree of excellence;
and superiority in kind
 Some definitions that have gained wide
acceptance in the corporate world
 “Meeting or exceeding customer
expectations”
 Juran, one of the quality gurus, defined
quality as;
 Fitness for Use
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 Introduction

 Based on Juran‘s definiton, quality

therefore does not only have to be
perceived by the customer, but the
customer experience of quality of a
product or service is more important.
 Quality does not mean an expensive
product

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 Introduction

 The American National Standards

Institute (ANSI) and the American
Society for Quality (ASO) defined
quality as;
 The totality of features and
characteristics of a product or service
that bears on its ability to satisfy
customer’s stated and implied needs.

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The Importance of Quality: The Japanese Chain Reaction

Improve Quality

Costs decreases due to fewer defects,

Lesser rework, fewer delays and better use
Of Men, Machine and Materials

Improve Productivity

Capture market with better quality

and lower price

Stay in business

Provide more jobs

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 Introduction

 What is a customer?
 Anyone who is impacted by the product
or services delivered by an organization
 External customer- the end user

 Internal customer- other divisions of the

company that receive the processed
product.

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 Introduction

 What is a product?
 the output of a process carried by the
organization. It may be goods (e.g.
cellphones), software(e.g. a computer
code, a report) or service (e.g. banking,
insurance

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 Introduction

 How is customer satisfaction

achieved?
Two Dimensions of Quality:
 Product feature- refers to the quality of
design.
 In a manufacturing industry, it includes
performance, reliability, durability, ease
of use, esthetics, etc
 In a service industry, customer
satisfation is gained through accuracy,
timeliness, friendliness and courtesy,
knowledge of server, etc.
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 Introduction

 Freedom from deficiencies – refers to

quality of conformance
 Conformance to standards- ability of
the product or service to conform to the
stated and implied requirements of
customers.
 Higher conformance means fewer
complaint and increased customer
satisfaction

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 Introduction

 Why Quality?
 Reasons why quality is a cardinal
priority for most organizations.
 Competition
 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 resulted in a need to reduce the
internal cost of poor quality.
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 Introduction

 Product complexity- as systems have

become more complex the reliability
requirments for suppliers of components
have bome more tough

 Higher level of customer satisfaction-

higher customer expectations are getting
spawned by increasing competition.

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 History of quality management
…To know the future, know the past!

 Before Industrial Revolution, skilled craftsmen

served both as manufacturers and inspectors,
building quality into their products through their
considerable pride in their workmanship.
 Industrial Revolution changed this basic concept
to interchangeable parts. Likes of ;
– F. W. Taylor (“scientific management” fame)
emphasized on the use of scientific standards
equitably to managers as well as workers.

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 History of quality management
…To know the future, know the past!

– Adam Smith who advocated dividing the labor

required to make a product into simple, repetitive
tasks in order to develop workers’ skills, save time
and use specialized tools
– Frank and Lilian Gilbreth’s Time and Motion
economy, they believed that a way a task is
performed is as important as the time it takes to do
it.

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 History of quality management
 Statistical approaches to quality control started at
Western Electric with the separation of inspection
division. Pioneers like Dr. Walter Shewhart, Deming
W.Edwards and Joseph M. Juran were all
employees of Western Electric.
– Dr. Walter Shewart (1891-1967) developed the Plan, Do,
Check Act (PDCA) cycle for continuous improvement which is
in use even today
 After World War II, under General MacArthur's Japan
rebuilding plan, Deming and Juran went to Japan.
- Deming W, Edwards (1900-1993) modified PDCA cycle of
Shewart to the Plan, Do, Study and Act (PDSA). He also
advocated the extensive used of statistical quality control theory
to Japanese industry along with Juran.
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 History of quality management

 Deming stressed the importance of suppliers and

customers for the business development and
improvement.
– He believed that people do their best and it is the system
that must change to improve quality.
– His 14 Points for Management formed the basis for his
advise to top Japanese management.

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 History of quality management
 Joseph M. Juran (1904), developed the Statistical
Quality Handbook for Western Electric Company. He
identified Fitness of quality and popularized the
same
 Juran travelled to Japan to teach his own theories-
that hands-on management was necessary at all
levels of corporation to ensure quality control and that
problems are opportunities to make improvements.
– His approach is still known today as the Juran Trilogy;
quality planning, quality control and quality improvement

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 History of quality management
 In Japan the following individual took seed from this
training and went on to developed their own major
contributions to what is now Total Quality
Management:

 Kaoru Ishikawa (1915-1989), strongly advocated

the use of cause and effect diagram to provide a
true representation of the organizational impact and
procedures. He developed Fishbone or Ishikawa
diagram for cause and effect analyis.
 Taichi Ohno, known as the father of just-inTime
production. He is also the co-creator of Toyota
Production System (TPS)

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 History of quality management

 Shigeo Shingo worked with Ohno on the TPS process

and developed some of its popular concepts including
poka-yoke (which means “mistake-proof in Japanese
and refers to taking human judgement out of some
types of production, thereby minimizing human errors)

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 History of quality management
 Next 20 odd years, when top managers in USA
focused on marketing, production quantity and
financial performance, Japanese managers
improved quality at an unprecedented rate.
 Market started preferring Japanese products and
American companies suffered immensely.
 America woke up to the quality revolution in early
1980s. Ford Motor Company consulted Dr. Deming
to help transform its operations.
(By then, 80-year-old Deming was virtually unknown
in USA. Whereas Japanese government had
instituted The Deming Prize for Quality in 1950.)

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 History of quality management
 Managers started to realize that “quality of
management” is more important than
“management of quality.” Birth of the term Total
Quality Management (TQM).
– TQM – Integration of quality principles into
organization’s management systems.
 Early 1990s: Quality management principles
started finding their way in service industry. FedEx,
The Ritz-Carton Hotel Company were the quality
leaders.
 TQM recognized worldwide: Countries like
Korea, India, Spain and Brazil are mounting efforts
to increase quality awareness.
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 The Deming 14 Point Philosophy

 The Deming Philosophy

Definition of quality, “A product or a service possesses quality if it helps
somebody and enjoys a good and sustainable market.”

Decrease cost because

Improve quality of less rework, fewer Productivity improves
mistakes.

Long-term Capture the market

Stay in with better quality
competitive business
strength and reduced cost.

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 Deming’s 14 Point 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.
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 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.

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 Juran’s Quality Trilogy
Quality Trilogy –
1. Quality planning: Process of preparing to meet
quality goals. Involves understanding customer
needs and developing product features.
2. Quality control: Process of meeting quality
goals during operations. Control parameters.
Measuring the deviation and taking action.
3. Quality improvement: Process for breaking
through to unprecedented levels of
performance. Identify areas of improvement and
get the right people to bring about the change.

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 Major Quality Concepts
1. Balance Scorecard – Robert Kaplan and David
Norton, suggest that a business’s executive team
measure progress in four areas that are equally
important
• knowledge
• financial performance
• Internal business process and
• Learning/growth
Using the knowledge to focus the entire organization and its
various programs on “balancing” the scorecard

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 Major Quality Concepts
2. ISO Standards - The International Standardization
Organization (ISO).
- headquartered in Switzerland
- more than 100 nations are “members”, that define
and agree on, and abide by a wide rang of product
and process safety and quality standards
- the idea behind ISO certification is that products
made in different nations be compatible for use in
others.
- this allows manufacturers to buy parts from
suppliers in other countries.

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 Major Quality Concepts
- The Quality Management Systems (QMS)
standards are know as “ISO 9000” family of
standards; (ISO 9000-2000, ISO 9001-2000, ISO
9004-2000); the environmental management system
are ISO 14000 and so on.

3. Just-in-Time – a manufacturing theory of producing

just enough product to fill current orders as they are
due. “just –in time for them to be used”

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 Major Quality Concepts

4. Kaizen – a Japanese term fro “unending

improvement”
-Kaizen represents a system in which management
encourages and implements small, incremental
improvements, involving employees as team members
and creating a culture of workers who all striving to do
better
- it focuses on simplifying complex process and training
employees to measurable improve them.

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 Major Quality Concepts
5. Quality Circles – based on a Japanese method of
grouping people together in “Quality Control” (QC),
meetings where they shared their expertise and worked
to solved a problem or improve process.

6. Six Sigma – created by Motorola in 1980s. The name

refers to a scientific way of describing quality based on
variations that occur in any process-plus or minus three
“sigmas.” Sigma is the Greek letter that signifies the
standard deviations in a mathematical formula.
-the “sigma level” quantifies defects per million opportunities
(DPMO)

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 Major Quality Concepts

7. TOTAL QUALITY MANAGEMENT – a comprehensive,

organization-wide effort to improve the quality of products
and services, applicable to all organizations.

- TQM quality is managed by the total effort of an

organization, and that each department or phase of
production is responsible for making its part of the
product or services as flawless as possible before
passing it on the next user or phase.

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