Total Quality Management

1|Page Total Quality Management
JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY ANANTAPUR

B.Tech. IV-II Sem (M.E)
(9A03803) TOTAL QUALITY MANAGEMENT
(Elective – III)
UNIT – I
TQM12 – overview3 , concepts4, elements5 – History-Quality management philosophies- Juran1, Deming,
Crosby, Feigenbaum, Ishikawa1– Stages of Evolution2– continuous improvement4 – objectives – internal
and external customers4.
Quality standards1 – Need of standardization - Institutions – bodies of standardization, ISO 9000 series6 –
ISO 14000 series4 – other contemporary standards – ISO certification2 process-Third party audit2.
UNIT – II
Process management1- Quality measurement systems7 (QMS) – developing and implementing QMS –
nonconformance database- TQM tools & techniques- 7 QC tools2- 7 New QC tools1.
Problem Solving techniques3 - Problem Solving process3 – corrective action – order of precedence
UNIT – III
System failure analysis approach5 – flow chart – fault tree analysis4 – failure mode assessment and
assignment matrix – organizing failure mode analysis – pedigree analysis.
Quality circles4 – organization – focus team approach – statistical process control2 – process chart –
Ishikawa diagram3 – preparing and using control charts2.
UNIT IV
Quality Function Development (QFD)3 – elements of QFD1 – benchmarking-Types2- Advantages &
limitations of benchmarking2 – Taguchi Analysis3 – loss function2 - Taguchi design of experiments. Poka-
yoke, Kaizen1, Deming cycle2.
UNIT – V
Value improvement elements3 – value improvement assault2 – supplier teaming4. Business process
reengineering3 & elements of Supply chain management4.
Six sigma15 approach – application of six sigma approach to various industrial situations.
Taguchi loss function4, Deming’s 14 points on quality5, FMEA2, effect diagram2, Importance of BPR2,
DFSS2, ISO 9001 series standard7,
TEXT BOOKS:
1. Total Quality Management, Joseph & Susan Berg
2. Total Quality Management, Besterfield, Pearson.
REFERENCE BOOKS:
1. Quality management, Howard Giltow-TMH
2. Quality management, Evans.
3. Quality management, Bedi
1|Page Prepared by D.K.Jawad, Assoc.Prof., CRIT Total Quality Management

UNIT I
TOTAL QUALITY MANAGEMENT (TQM): The continuous process of reducing or eliminating
errors in manufacturing, streamlining supply chain management, improving the customer experience and
ensuring that employees are up-to-speed with their training.
OVERVIEW:
Total quality management can be summarized as a management system for a customer-focused organization
that involves all employees in continual improvement. It uses strategy, data, and effective communications to
integrate the quality discipline into the culture and activities of the organization.
 Customer-focused: The customer ultimately determines the level of quality. No matter what an
organization does to foster quality improvement—training employees, integrating quality into the
design process, upgrading computers or software, or buying new measuring tools—the customer
determines whether the efforts were worthwhile.
 Total employee involvement: All employees participate in working toward common goals. Total
employee commitment can only be obtained after fear has been driven from the workplace, when
empowerment has occurred, and management has provided the proper environment. High-performance
work systems integrate continuous improvement efforts with normal business operations. Self-managed
work teams are one form of empowerment.
 Process-centered: A fundamental part of TQM is a focus on process thinking. A process is a series of
steps that take inputs from suppliers (internal or external) and transforms them into outputs that are
delivered to customers (again, either internal or external). The steps required to carry out the process
are defined, and performance measures are continuously monitored in order to detect unexpected
variation.
 Integrated system: Although an organization may consist of many different functional specialties
often organized into vertically structured departments, it is the horizontal processes interconnecting
these functions that are the focus of TQM.
o Micro-processes add up to larger processes, and all processes aggregate into the business
processes required for defining and implementing strategy. Everyone must understand the
vision, mission, and guiding principles as well as the quality policies, objectives, and critical
processes of the organization. Business performance must be monitored and communicated
continuously.
o An integrated business system may be modeled after the Baldrige National Quality Program
criteria and/or incorporate the ISO 9000 standards. Every organization has a unique work
culture, and it is virtually impossible to achieve excellence in its products and services unless a
good quality culture has been fostered. Thus, an integrated system connects business
improvement elements in an attempt to continually improve and exceed the expectations of
customers, employees, and other stakeholders.
 Strategic and systematic approach: A critical part of the management of quality is the strategic and
systematic approach to achieving an organization‘s vision, mission, and goals. This process, called
strategic planning or strategic management, includes the formulation of a strategic plan that integrates
quality as a core component.
 Continual improvement: A major thrust of TQM is continual process improvement. Continual
improvement drives an organization to be both analytical and creative in finding ways to become more
competitive and more effective at meeting stakeholder expectations.
 Fact-based decision making: In order to know how well an organization is performing, data on
performance measures are necessary. TQM requires that an organization continually collect and
analyze data in order to improve decision making accuracy, achieve consensus, and allow prediction
based on past history.
 Communications: During times of organizational change, as well as part of day-to-day operation,
effective communications plays a large part in maintaining morale and in motivating employees at all
levels. Communications involve strategies, method, and timeliness.
CONCEPTS:
TQM Six Basic Concepts
 1. Leadership
 2. Customer Satisfaction
 3. Employee Involvement
 4. Continuous Process Improvement
 5. Supplier Partnership

 6. Performance Measures
(All these present an excellent way to run a business)
Leadership: Higher levels of physical power, need to display power and control others, force superiority,
ability to generate fear, or group-member's need for a powerful group protector.
Characteristics of Successful Leaders
1. Give attention to external and internal customers
2. Empower, not control subordinates. Provide resources, training, and work environment to help them
do their jobs
3. Emphasize improvement rather than maintenance
4. Emphasize prevention
5. Encourage collaboration rather than competition
6. Train and coach, not direct and supervise
7. Learn from problems – opportunity for improvement
8. Continually try to improve communications
9. Continually demonstrate commitment to quality
10. Choose suppliers on the basis of quality, not price
11. Establish organizational systems that supports quality efforts
Customer Satisfaction: Customer satisfaction is a term frequently used in marketing. While it's often
abbreviated as CSAT, it is more correct to abbreviate it as CSat. It is a measure of how products and services
supplied by a company meet or surpass customer expectation.
• Customer is always right – in Japan customer is ―King‖
• Customer expectations constantly changing – 10 years ago acceptable, now not any more!
• Delighting customers (Kano Model)
• Satisfaction is a function of total experience with organization
• Need to continually examine the quality systems and practices to be responsive to ever – changing
needs, requirements and expectations – Retain and Win new customers
Issues for customer satisfaction
Checklist for both internal and external customers
1. Who are my customers?
2. What do they need?
3. What are their measures and expectations?
4. Does my product/service exceed their expectations?
5. How do I satisfy their needs?
6. What corrective action is necessary?
Customer Feedback
• Discover customer dissatisfaction
• Discover priorities of quality, price, delivery
• Compare performance with competitors
• Identify customer‘s needs
• Determine opportunities for improvement
Customer Feedback Tools/Method
• Warranty cards/Questionnaire
• Telephone/Mail Surveys
• Focus Groups
• Customer Complaints
• Customer Satisfaction Index
Good experience is told to 6 people while bad experience are repeated to 15 people.
Employee Involvement: Employee involvement can be defined as: The direct participation of staff to help
an organization fulfill its mission and meet its objectives by applying their own ideas, expertise, and efforts
towards solving problems and making decisions.
• People – most important resource/asset
• Quality comes from people
• Deming – 15% operator errors, 85% management system
• Project teams – Quality Control Circles (QCC), QIT
• Education and training – life long, continuous both knowledge and skills
• Suggestion schemes; Kaizen, 5S teams
• Motivational programmes, incentive schemes
• Conducive work culture, right attitude, commitment.
Continuous Process Improvement: A continual improvement process, also often called a continuous
improvement process (abbreviated as CIP or CI), is an ongoing effort to improve products, services, or
processes. These efforts can seek "incremental" improvement over time or "breakthrough" improvement all
at once.
• View all work as process – production and business
• Process – purchasing, design, invoicing, etc.
• Inputs – PROCESS – outputs
• Process improvement – increased customer satisfaction
• Improvement – 5 ways; Reduce resources, Reduce errors, Meet expectations of downstream
customers, Make process safer, make process more satisfying to the person doing
Problem – Solving Method

1. Identify the opportunity (for improvement)
2. Analyze the current process
3. Develop the optimal solution(s)
4. Implement changes
5. Study the results
6. Standardize the solution
7. Plan for the future
Identify the opportunity (for improvement)
• Phase 1 – Identify problems
• Use Pareto Analysis – external & internal failures, returns
• Phase 2 – Form a team (same function of multifunctional)
• Phase 3 – Define scope of problem (Paint process – data collected foe a week showed high 30%
‗runs‘ defect)
Analyze the current process
• Understand the current process, how it is performed
• Develop process flow diagram
• Define target performance
• Collect data, information
• Determine causes not solution (use cause and effect diagram)
• Root cause if possible
Develop the optimal solution(s)
• To establish solutions
• Recommended optimal solution to improve process
• Create new process, combine different process, modify existing process
• Creativity (rubber pad adhesive, door trim)
• Brainstorming, Delphi, Nominal Group Technique
• Evaluate and testing of ideas/possible solutions
Implement changes
• To prepare implementation plan, obtain approval, conduct process improvements, study results
• Why is it done? How, When, Who, When it will be done?
Study the results/Standardize the solution/Plan for the future
• Measure and evaluate results of changes
• Standardize solution – certify process, operator, done?
Supplier Partnership: Supplier Partnership is a twist to traditional sponsorship. Investing in a Partnership
allows companies to have visibility and recognition throughout the calendar year at all ASA produced events.
• 40% prod. Cost comes from purchased materials, therefore supplier Quality Management important
• Substantial portion quality problems from suppliers
• Need partnership to achieve quality improvement – long-term purchase contract
• Supplier Management activities
• Define product/program requirements;
1. Evaluate potential and select the best suppliers
2. Conduct joint quality planning and execution
3. Require statistical evidence of quality
4. Certify suppliers, e.g. ISO 900, Ford Q1
5. Develop and apply Supplier Quality Ratings
� Defects/Percent non-conforming
� Price and Quality costs
� Delivery and Service
Performance Measures: Performance measurement is the process of collecting, analyzing and/or reporting
information regarding the performance of an individual, group, organization, system or component.
• Managing by fact rather than gut feelings
• Effective management requires measuring
• Use a baseline, to identify potential projects, to asses results from improvement
• E.g. Production measures – defects per million, inventory turns, on-time delivery
• Service – billing errors, sales, activity times
• Customer Satisfaction
• Methods for measuring
• Cost of poor quality
� Internal failure
� External failure
� Prevention costs
� Appraisal costs
Award Models (MBNQA, EFQM, PMQA)
� Awards criteria
� Scoring
• Benchmarking – grade to competitors, or best practice
• Statistical measures – control charts, Cpk
• Certifications
� ISO 9000:2000 Quality Mgt System
� ISO 14000 Environmental Mgt System,
� Underwriters Lab (UL), GMP
� QS 9000, ISO/TS 16949
ELEMENTS OF TQM:
Total Quality Management (TQM) is a management approach that originated in the 1950s and has
steadily become more popular since the early 1980s. Total quality is a description of the culture, attitude and
organization of a company that strives to provide customers with products and services that satisfy their needs.
The culture requires quality in all aspects of the company‘s operations, with processes being done right the first
time and defects and waste eradicated from operations.
To be successful implementing TQM, an organization must concentrate on the eight key elements:
1. Ethics
2. Integrity
3. Trust
4. Training
5. Teamwork
6. Leadership
7. Recognition
8. Communication
I.Foundation
TQM is built on a foundation of ethics, integrity and trust. It fosters openness, fairness and sincerity and allows
involvement by everyone. This is the key to unlocking the ultimate potential of TQM. These three elements
move together, however, each element offers something different to the TQM concept.
1. Ethics – Ethics is the discipline concerned with good and bad in any situation. It is a two-faceted subject
represented by organizational and individual ethics. Organizational ethics establish a business code of ethics
that outlines guidelines that all employees are to adhere to in the performance of their work. Individual ethics
include personal rights or wrongs.
2. Integrity – Integrity implies honesty, morals, values, fairness, and adherence to the facts and sincerity. The
characteristic is what customers (internal or external) expect and deserve to receive. People see the opposite of
integrity as duplicity. TQM will not work in an atmosphere of duplicity.
3. Trust – Trust is a by-product of integrity and ethical conduct. Without trust, the framework of TQM cannot
be built. Trust fosters full participation of all members. It allows empowerment that encourages pride
ownership and it encourages commitment. It allows decision making at appropriate levels in the organization,
fosters individual risk-taking for continuous improvement and helps to ensure that measurements focus on
improvement of process and are not used to contend people. Trust is essential to ensure customer satisfaction.
So, trust builds the cooperative environment essential for TQM.
II.Bricks-
Basing on the strong foundation of trust, ethics and integrity, bricks are placed to reach the roof of recognition.
It includes:
4. Training – Training is very important for employees to be highly productive. Supervisors are solely
responsible for implementing TQM within their departments, and teaching their employees the philosophies of
TQM. Training that employees require are interpersonal skills, the ability to function within teams, problem
solving, decision making, job management performance analysis and improvement, business economics and
technical skills. During the creation and formation of TQM, employees are trained so that they can become
effective employees for the company.
5. Teamwork – To become successful in business, teamwork is also a key element of TQM. With the use of
teams, the business will receive quicker and better solutions to problems. Teams also provide more permanent
improvements in processes and operations. In teams, people feel more comfortable bringing up problems that
may occur, and can get help from other workers to find a solution and put into place. There are mainly three
types of teams that TQM organizations adopt:
A. Quality improvement teams or excellence teams (QITs) – These are temporary teams with the purpose of
dealing with specific problems that often recur. These teams are set up for period of three to twelve months.
B. Problem solving teams (PSTs) – These are temporary teams to solve certain problems and also to identify
and overcome causes of problems. They generally last from one week to three months.
C. Natural work teams (NWTs) – These teams consist of small groups of skilled workers who share tasks
and responsibilities. These teams use concepts such as employee involvement teams, self-managing teams and
quality circles. These teams generally work for one to two hours a week.
6. Leadership – It is possibly the most important element in TQM. It appears everywhere in organization.
Leadership in TQM requires the manager to provide an inspiring vision, make strategic directions that are
understood by all and to instill values that guide subordinates. For TQM to be successful in the business, the
supervisor must be committed in leading his employees. A supervisor must understand TQM, believe in it and
then demonstrate their belief and commitment through their daily practices of TQM. The supervisor makes
sure that strategies, philosophies, values and goals are transmitted down throughout the organization to provide
focus, clarity and direction. A key point is that TQM has to be introduced and led by top management.
Commitment and personal involvement is required from top management in creating and deploying clear

quality values and goals consistent with the objectives of the company and in creating and deploying well
defined systems, methods and performance measures for achieving those goals.
III. Binding Motors-
7. Communication – It binds everything together. Starting from foundation to roof of the TQM house,
everything is bound by strong mortar of communication. It acts as a vital link between all elements of TQM.
Communication means a common understanding of ideas between the sender and the receiver. The success of
TQM demands communication with and among all the organization members, suppliers and customers.
Supervisors must keep open airways where employees can send and receive information about the TQM
process. Communication coupled with the sharing of correct information is vital. For communication to be
credible the message must be clear and receiver must interpret in the way the sender intended. There are
different ways of communication such as:
A. Downward communication – This is the dominant form of communication in an organization.
Presentations and discussions basically do it. By this the supervisors are able to make the employees clear
about TQM.
B. Upward communication – By this the lower level of employees are able to provide suggestions to upper
management of the affects of TQM. As employees provide insight and constructive criticism, supervisors must
listen effectively to correct the situation that comes about through the use of TQM. This forms a level of trust
between supervisors and employees. This is also similar to empowering communication, where supervisors
keep open ears and listen to others.
C. Sideways communication – This type of communication is important because it breaks down barriers
between departments. It also allows dealing with customers and suppliers in a more professional manner.
IV. Roof-
8. Recognition – Recognition is the last and final element in the entire system. It should be provided for both
suggestions and achievements for teams as well as individuals. Employees strive to receive recognition for
themselves and their teams. Detecting and recognizing contributors is the most important job of a supervisor.
As people are recognized, there can be huge changes in self-esteem, productivity, quality and the amount of
effort exhorted to the task at hand. Recognition comes in its best form when it is immediately following an
action that an employee has performed. Recognition comes in different ways, places and time such as,
 Ways – It can be by way of personal letter from top management. Also by award banquets, plaques,
trophies etc.
 Places – Good performers can be recognized in front of departments, on performance boards and also in
front of top management.
 Time – Recognition can given at any time like in staff meeting, annual award banquets, etc.
STAGES OF EVOLUTION:
Concepts developed in Japan beginning in the late 1940's and 1950's, pioneered there by Americans
Feigenbum, Juran and Deming set the foundations of TQM. The evolution of TQM happened in a few stages
easily identified as Inspection, Quality Control, Quality Assurance and now Total Quality Management.
Inspection
This method at one stage in time was the only method that was able to ensure a certain level of quality for a
product or service. In manufacturing incoming goods and output would be measured and physically inspected
for defaults or not meeting required guidelines. Services would be appraised at certain levels and inspected in
production and delivery. The inspection process is an after-the-event measurement process that can only result
in non conforming products being sent back to be re-worked or result in lower graded products that are
produced in a rating system.
Quality Control
Quality control remains in the operation of detecting mistakes, finding and fixing them after the event has
occurred.

Under a quality control scheme you may find that everything is closely monitored, with detailed performance
and product specifications as well as control systems for paperwork and procedures, product testing at raw
material and mid-production stages with reports being filed and overall feedback on the processes involved to
personnel and suppliers.
Quality control brought about delegation of quality inspection to approved operators with more sophisticated
methods and systems. This brought about a higher number of process control with less non-conforming
products being delivered to customers through screening.
Quality Assurance
A lasting continual improvement in quality was needed as finding and solving problems wasn‘t viewed as an
effective means to eliminate the root problems. It was identified that this could only be achieved by targeting
efforts towards planning and prevention of problems occurring at the root source. On this basis Quality
Assurance was developed.
Quality systems development, advanced quality planning, comprehensive quality manuals, use of quality costs,
involvement of non-production operations, failure mode and effects analysis are features attained through
progression from quality control to quality assurance. At a minimum the systems adopted are likely to have
met the requirements of BS EN ISO 9001 (2000). Overall the organization should experience a shift in
emphasis from detection towards prevention of noncompliant produce. ―more emphasis is placed on advanced
quality planning, training, critical problem solving tasks, improving the design of the product, process and
services, improving control over the process and involving and motivating people‖ (Barrie G. Dale, 2007)
Total Quality Management
Total Quality Management (TQM) is an initiative which aims to involve every member of an organization, at
all levels, in improving the standard of product or services that they provide.
The history of quality management, from mere 'inspection' to Total Quality Management, and its modern
'branded interpretations such as 'Six Sigma', has led to the development of essential processes, ideas, theories
and tools that are central to organizational development, change management, and the performance
improvements that are generally desired for individuals, teams and organizations.
―Total Quality embraces not only the quality of a specific product or service, but everything an organization
does, might or should do to determine the opinion not only of its immediate customers or end-users, but its
reputation in the community at large. Dr J. M. Juran, the
American quality guru, defines the difference between Total Quality and product quality as capital Q vs small
q.‖ (Hutchins, 1992)
TQM should be implemented into a company as a ‗Kaizen‘ initiative, Kaizen is a strategy developed by the
Japanese meaning ‗continuous improvement‘. So with TQM, it should be at the core of an organization and
employed every working day, to achieve the best quality attainable.
―Total Quality Management (TQM) is a continuous set of mindset that keeps on improvement processes for
individuals, groups and whole organizations by understanding and discovering better process.‖
CONTINUOUS IMPROVEMENT:
A continual improvement process, also often called a continuous improvement process (abbreviated
as CIP or CI), is an ongoing effort to improve products, services, or processes.
Continuous improvement is a method for identifying opportunities for streamlining work and reducing waste.
The practice was formalized by the popularity of Lean / Agile / Kaizen in manufacturing and business, and it is
now being used by thousands of companies all over the world to identify savings opportunities.
While many companies practice a formal version of a Lean / Agile method, other companies enjoy the
flexibility of continuous improvement as a practice while reserving the right to deviate from the practice
whenever a less formal approach is needed.
Kaizen, also known as continuous improvement, is a long-term approach to work that systematically
seeks to achieve small, incremental changes in processes in order to improve efficiency and quality. Kaizen
can be applied to any kind of work, but it is perhaps best known for being used in lean manufacturing and lean
programming. If a work environment practices kaizen, continuous improvement is the responsibility of every
worker, not just a selected few.
Continuous improvement can be viewed as a formal practice or an informal set of guidelines. Many
companies have shifted focus to more formal approaches to project and process management such as Lean /
Agile methodologies (Kanban, Kaizen, Scrum, XP). These methodologies prescribe ways to identify savings
opportunities and put those savings mechanisms into place. In all Lean / Agile methodologies, continuous
improvement is a primary focus, in addition to high customer service standards and the reduction of waste in
the forms of cost, time and defects (rework).
Working to constantly improve is the number one way in which many businesses reduce operating
overhead. Continuous improvement (sometimes known as ‗Rapid improvement‘) helps to streamline
workflows. Efficient workflows save time and money, allowing you to reduce wasted time and effort. For
example, projects that involve shifting deadlines, changing priorities and other complexities are usually filled
with opportunities to improve. It‘s just that no one has taken action on that opportunity.
It‘s important for a project manager to know the cost of completing a body of work. For this reason, most
project management offices benefit from knowing the amount of time it takes to get certain types of work
done. Project managers can reduce project cost and prevent overages using Forecasting Software. Forecasting
(versus estimating) whether a project‘s constraints are likely to be broken is one way in which project
management offices are able to increase their overall effectiveness for the company.

While many companies practice a formal version of a Lean / Agile method, other companies enjoy the
flexibility of continuous improvement as a theory while reserving the right to deviate from the practice
necessary for creativity or innovation may enforce the concept more loosely as they seek new ways to lead in
the marketplace.
When To Use Continuous Improvement

Sacrificing quality can rarely be justified by the ability to do something faster or cheaper. To maintain quality
standards while cutting time and cost, companies turn to continuous improvement.
By observing continuous improvement best practices, companies can figure out ways to continue business as
usual while analyzing improvement opportunities along the way.
For companies whose teams are unable to practice continuous improvement throughout their day-to-day work,
the next best way to leverage the concept is to hold continuous improvement events, otherwise known as
Rapid Improvement events or Value Stream Mapping. Continuous Improvement events can take anywhere
between one to five days to complete, depending on the depth and breadth of the topic to be covered, and team
members usually come away with ―to-do‖ items that help the new processes take hold within the organization
and may require a small amount of time to execute.
Many companies have adopted Continuous Improvement / Lean as a standard by which all projects and work
is done, while others choose to keep it at arm‘s length. While continuous improvement helps save money for
companies by helping to identify inefficiencies (project teams with many layers of management or
manufacturing teams whose motions equate to money), other companies may perceive continuous
improvement differently. After years of continuous improvement being touted as the most beneficial way to
save on production cost, some companies say the philosophy has placed unexpected constraints on innovation
and creativity. While companies seek ways to reduce waste, the less formal, sometimes messy creative process
and ideation may hold more value in the long run than saving a few dollars on a particular process. It is
impossible to put a price on innovation, therefore a company‘s decision as to how much time to devote to
continuous improvement can be complex. Whether or not a company chooses to make continuous
improvement a part of its everyday culture depends on the particular needs of the company and the potential
cost savings that may come as a result.
How to Practice Continuous Improvement
Practicing continuous improvement begins with identifying a current process, procedure, workflow or project.
Fully understanding what you have to work with is the first step in improvement. This may seem obvious, but
many companies that skip this step spend lots of time trying to fix a process only to discover that the process in
question isn‘t needed, or the process is so poorly integrated with the company that they must take a larger step
backwards to look at the bigger picture.
Questions to ask when considering an area for improvement:
– How many people does this specific process affect?
– How much time do people spend working within the constraints of the current process?
– What would we gain if we spent time working to improve this process? (Gains should be measurable, as in
dollars, hours or other value metrics that are quantifiable.)
– What other teams / processes would be impacted by changes to the current process, and how? Would those
impacts serve as impediments? Is the amount of effort justified by the anticipated value of forming a new
process?
Before deciding what initiative to devote time and effort to, companies may take a vote on which process or
workflow they feel would most benefit from improvement. Once a topic is agreed upon, the team may come
together to brainstorm. At this point, many teams follow a series of steps that go something like this:
1. Map out the existing process using a project board or a kanban board. A project board can be a
whiteboard that is populated with sticky notes. Each sticky note should represent a single piece of the
process or action item. Teams should break down each process step as much as possible so that each
step is clearly identified. Laying out sticky notes in a linear fashion (or whatever configuration best
represents the process) is a good way for everyone to visualize what the process looks like and
understand how each piece fits together. Using a visual project board also helps people understand a
process, even if they are not necessarily involved in it. Involving the un-involved in the formation of
new processes may seem counterintuitive, but it helps to have fresh eyes viewing the process for the
first time to see that which may not have been so obvious to the team looking at the process every day.

2. Identify areas of opportunity surrounding the mapped process. To do this, teams should analyze the
current process and scrutinize areas that may be streamlined. For example, are there ways to reduce the
time it takes for something to become approved? Are there unnecessary steps that are creating
bottlenecks and/or causing people to wait? A classic example of process streamlining can be found in
the manufacturing industry and the reduction of steps a worker must take to carry a widget from one
location to another. Instead of requiring the worker to move faster (which does little but impose
ineffective process management and lower the morale of the individual), the company moves the bin
containing the widgets closer to the drop-off location, saving the worker several steps and saving the
company seconds per work item completed, or seconds that get shaved off the total time it takes to
manufacture one widget. While the immediate impact of one or two seconds may not seem to equate to
very much money, it adds up over time.
3. Finally, the team decides on a new process. Once all opportunities have been identified, the team works
together to create a new process. The new process should be communicated to everyone who is
impacted, and action steps may be taken away by certain team members who volunteer to help integrate
the new process into the company. For example, if the new process impacts another process, the
takeaway would be to work with a spokesperson for the impacted process to make the modifications
that are necessary to accommodate the new process.
Continuous improvement is a great way for companies to identify opportunities and integrate improvements
into the day-to-day workings of the company. Once continuous improvement has become second nature within
the organizational culture, your team will begin to find opportunities in the most unexpected places, creating an
environment that nurtures innovation and fosters a sense of ownership and pride among individuals.
INTERNAL AND EXTERNAL CUSTOMERS:

The customers are :
1. The most important people in the business.
2. Not dependent on the organization. The organization depends on them.
3. Not an interruption to work but are the purpose of it.
4. Doing a favour when they seek business and not vice-versa.
5. A part of business, not outsiders.
6. Life blood of the business.
7. People who come with their needs and jobs.
8. Deserve the most courteous and attentive treatment.
Types of Customers
Customers are two types. They are :1. Internal customers, and 2. External customers.
An internal customer is a customer who is directly connected to an organization, and is usually (but not
necessarily) internal to the organization. Internal customers are usually stakeholders, employees, or
shareholders, but the definition also encompasses creditors and external regulators.
An external customer is someone who uses your company's products or services but is not part of your
organization. If you own a retail store, for example, an external customer is an individual who enters your
store and buys merchandise.
Customer – Supplier Chain
In order to achieve the total customer orientation, TQM requires the better customer – supplier relationship.
Figure shows the model of customer – supplier chain.
All processes require inputs, which are provided by the internal or external suppliers. Similarly all processes
delivers outputs, which are used by internal or external customers. Each unit is considered as a customer by the
previous unit and as a supplier for the next unit.
1. Internal Customers
1. The customers inside the company are called internal customers.
2. As there is a flow of work, product and service in the organization, each department is dependent on the
other. In this, each department or each quality management unit is considered as a customer by the
previous department and as a supplier for the next department. Similarly every person in a process is
considered as a customer of the preceding operation. This explains the concept of internal customer.

10 | P a g e Total Quality Management
2. External Customers
 The customers outside the company are called external customers.
 In other words, an external customer is the one:
 who uses the product or service ;
 who purchases the product or service; or
 who influences the sale of the product or service.
Customer‘s experience facilitates internal alignment
GURUS OF TOTAL QUALITY MANAGEMENT:

Shewart:
Walter A.Shewhart, Ph.D, spent his professional career at Western Electric and Bell Telephone Laboratories,
both divisions of AT&T. He developed control chart theory with control limits, assignable and chance causes
of variation and rational subgroups. In 1931, he authored ―Economic control of quality of Manufactured
product‖, which is regarded as complete and thorough work of the basic principles of quality control.
Ronald Fisher:
In the conventional sense, Fisher is not known as quality guru. However he created solid functional statistical
methods, such as design of experiments (DOE) analysis of variance (ANOVA) in the 1030s. DOE is one of the
most powerful tools used by organizations in problem solving and process improvement.
Deming:
W.Edwards Deming, PhD, was a protégé of Shewart. In 1950, he taught statistical process control and
importance of quality to the leading CEOs of Japanese industry. Deming is the best known expert in the world.
His 14 points provide a theory of management for improve quality, productivity and competitive position. He
has authored a number of books including ―Out of Crisis‖ and ―Quality, Productivity and competitive
position‖.
Juran:
Joseph M.Juran, PhD worked at Western Electric from 1924 to 1941. There he was exposed to the concepts of
Shewart. Juran travelled to Japan in 1954 to teach quality management. He recommended poroject
improvements based on return on investment to achieve breakthrough results. The Juran Trilogy for managing
quality is carried out by the three interrelated processes of planning, control and improvement. In 1951, the
first edition of Juran‘s ―Quality Control Handbook‖ was published.
Feigenbaum:
Armand V.Feigenbaum, PhD, argues that total quality control is necessary to achieve productivity, market
penetration and competitive advantage. Quality begins by identifying customer‘s requirements and ends with a
product or service in the hands of satisfied customer. In 1951, he authored ―Total Quality Control‖.
Ishikawa:
Kaoru Ishikawa, PhD, studied and Deming, Juran and Feigenbaum. He borrowed the total control concepts and
adopted it for the Japanese. Ishikawa is the best known f or the development of the cause and effect diagram,
which is sometimes called an Ishikawa diagram. He developed quality circle concepts in Japan.
Crosby:
Philip B.Crosby authored his first book, ―Quality is Free‖, in 1979, which was translated into 15 blanguages. It
sold 1.5 million copies and changed the way management looked at quality. He argued that ―doing it right the
10 | P a g e Prepared by D.K.Jawad, Assoc.Prof., CRIT Total Quality Management

first time‖ is less expensive than the cost of detecting and correcting nonconformities. In 1984, he authored
―Quality without tears‖, which contains his four absolute of quality management.
Taguchi:
Genichi Taguchi, PhD, developed his loss function concept that combines cost, target and variation into one
metric. Because the loss function is reactive, he developed the signal to noise ratio as proactive equivalent.
DEMING’S 14 POINTS FOR MANAGEMENT:

1. Create constancy of purpose toward improvement of product and service, with the aim to become
competitive and to stay in business, and to provide jobs.
2. Adopt the new philosophy. We are in a new economic age. Western management must awaken to the
challenge, must learn their responsibilities, and take on leadership for change.
3. Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by
building quality into the product in the first place.
4. End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move
toward a single supplier for any one item, on a long-term relationship of loyalty and trust.
5. Improve constantly and forever the system of production and service, to improve quality and productivity,
and thus constantly decrease costs.
6. Institute training on the job.
7. Institute leadership. The aim of supervision should be to help people and machines and gadgets to do a
better job. Supervision of management is in need of overhaul, as well as supervision of production workers.
8. Drive out fear, so that everyone may work effectively for the company.
9. Break down barriers between departments. People in research, design, sales, and production must work as
a team, to foresee problems of production and in use that may be encountered with the product or service.
10. Eliminate slogans, exhortations, and targets for the work force which ask for zero defects and new levels
of productivity. Such exhortations only create adversarial relationships, since the bulk of the causes of low
quality and low productivity belong to the system and thus lie beyond the power of the workforce.
11. Eliminate work standards (quotas) on the factory floor. Substitute leadership. Eliminate management by
objectives. Eliminate management by numbers, numerical goals, substitute leadership.
12. Remove barriers to pride of workmanship. The responsibility of supervisors must be changed from sheer
numbers to quality. Remove barriers that rob people in management and in engineering of their right to pride
of workmanship. This means, for example, abolishment of annual or merit rating and of management by
objectives.
13. Institute a vigorous program of education and self-improvement.
14. Put everybody in the company to work to accomplish the transformation. The transformation is
everyone‘s job.
ISO 9000 SERIES:

ISO is the International Organization for Standardization. It has a membership of 158 national
standards institutes from countries large and small, industrialized and developing, in all regions of the world,
ISO develops voluntary technical standards which add value to all types of business operations. They
contribute to the distribution of technology and good business practice. They support the development,
manufacturing and supply of more efficient, safer and cleaner products and services. They make trade between
countries easier. ISO standards also safeguard users and consumers, and make many aspects of their lives
simpler.
ISO develops only those standards that are required by the market. This work is carried out by experts
coming from the industrial, technical and business sectors which have asked for the standard, and which
subsequently put them to use. These experts may be joined by others with relevant knowledge, such as
representatives of government agencies, consumer organizations, academia and testing laboratories.
The ISO 9000 family of international quality management standards and guidelines has earned a global
reputation as a basis for establishing effective and efficient quality management systems.
The need for International Standards is very important as more organizations operate in the global
economy by selling or buying products and services from sources outside their domestic market.
It provides a general perspective of the ISO 9000 family of standards. It is an overview of the standards
and demonstrates how, collectively, they form a basis for continual improvement and business excellence.
The ISO 9000 standard provides the fundamentals and vocabulary used in the entire ISO 9000 family
of standards. It sets the stage for understanding the basic elements of quality management as described in the
ISO standards. ISO 9000 introduces users to the eight Quality Management Principles as well as the use of the
process approach to achieve continual improvement.
ISO 9001 is used when you are seeking to establish a quality management system that provides
confidence in your organization‘s ability to provide products that fulfill customer needs and expectations.
There are five sections in the standard that specify activities that need to be considered when you
implement your system:
 Overall requirements for the quality management system and documentation
 Management responsibility, focus, policy, planning and objectives
 Resource management and allocation
 Product realization and process management, and
 Measurement, monitoring, analysis and improvement.

ISO 9004 is used to extend the benefits obtained from ISO 9001 to all parties that are interested in or
affected by your operations. Interested parties include your employees, owners, suppliers, partners and society
in general.
ISO 9001 and ISO 9004 are compatible and can be used separately or in combination to meet or exceed
expectations of customers and interested parties. Both standards apply a process approach. Processes are
recognized as consisting of one or more linked activities that require resources and must be managed to
achieve predetermined output. The output of one process may directly from the input to the next process and
the final product is often the result of a network or system of processes.
The eight Quality Management Principles provide the basis for the performance improvement. ISO
9004 gives guidance on a wider range of objectives of a quality management system than does ISO 9001,
particularly in managing for the long-term success of an organization. ISO 9004 is recommended as a guide for
organizations whose top management wishes to extend the benefits of ISO 9001 in pursuit of systematic and
continual improvement of the organization‘s overall performance. However, it is not intended for certification
or contractual purposes.
ISO 19011 covers the area of auditing of quality management systems and environmental management
systems. It provides guidance on the audit programmes, the conduct of internal or external audits, and
information on auditor competence. ISO 19011 provides an overview of how an audit programme should
operate and how management system audits should take place.

ISO 14000 SERIES:

Environmental management system (EMS) refers to the management of an organization's
environmental programs in a comprehensive, systematic, planned and documented manner. It includes the
organizational structure, planning and resources for developing, implementing and maintaining policy for
environmental protection.
Enterprise‘s environmental standards are set by its Group‘s Health, Safety and Environmental Policy. The
Environmental Policy sets the company‘s environmental goals which are:
1. Minimisation of environmental impact through reduction and where possible, elimination of harmful
discharges, emissions and wastes.
2. Maintenance of environmentally sound working standards and practices.
3. The management of environmental protection as an integral component of the company‘s business.
ISO has developed standards that help organizations to take a proactive approach to managing
environmental issues: the ISO 14000 family of environmental management standards which can be
implemented in any type of organization in either public or private sectors – from companies to administrations
to public utilities.
ISO 14001 is the world‘s most recognized framework for environmental management systems (EMS) –
implemented from Argentina to Zimbabwe – that helps organizations both to manage better the impact of their
activities on the environment and to demonstrate sound
environmental management.
ISO 14001 has been adopted as a national standard by more than half of the 160 national members of
ISO and its use is encouraged by governments around the world. Although certification of conformity to the
standard is not a requirement of ISO 14001, at the end of 2007, at least 154 572 certificates had been issued in
148 countries and economies.
Other environmental management tools developed by ISO/TC 207 include : ISO 14004, which
complements ISO 14001 by providing additional guidance and useful explanations.
Environmental audits are important tools for assessing whether an EMS is properly implemented and
maintained. The auditing standard, ISO 19011, is equally useful for EMS and quality management system
audits.
It provides guidance on principles of auditing, managing audit programmes, the conduct of audits and
on the competence of auditors.
ISO 14031 provides guidance on how an organization can evaluate its environmental performance. The
standard also addresses the selection of suitable performance indicators, so that performance can be assessed
against criteria set by management. This information can be used as a basis for internal and external reporting
on environmental performance.
Communication on the environmental aspects of products and services is an important way to use
market forces to influence environmental improvement. Truthful and accurate information provides the basis
on which consumers can make informed purchasing decisions.
The ISO 14020 series of standards addresses a range of different approaches to environmental labels
and declarations, including eco-labels (seals of approval), self-declared environmental claims, and quantified
environmental information about products and services.
ISO 14001 addresses not only the environmental aspects of an organization‘s processes, but also those
of its products and services. Therefore ISO/TC 207 has developed additional tools to assist in addressing such
aspects. Life-cycle assessment (LCA) is a tool for identifying and evaluating the environmental aspects of
products and services from the ―cradle to the grave‖ : from the extraction of resource inputs to the eventual
disposal of the product or its waste. The ISO 14040 standards give guidelines on the principles and conduct of
LCA studies that provide an organization with information on how to reduce the overall environmental impact
of its products and services.
ISO 14064 parts 1, 2 and 3 are international greenhouse gas (GHG) accounting and verification
standards which provide a set of clear and verifiable requirements to support organizations and proponents of
GHG emission reduction projects.
ISO 14065 complements ISO 14064 by specifying requirements to accredit or recognize organizational
bodies that undertake GHG validation or verification using ISO 14064 or other relevant standards or
specifications.
ISO 14063, on environmental communication guidelines and examples, helps companies to make the
important link to external stakeholders.
ISO 14045 will provide principles and requirements for eco-efficiency assessment. Eco-efficiency
relates environmental performance to value created. The standard will establish an internationally standardized
methodological framework for eco-efficiency assessment, thus supporting a comprehensive, understandable
and transparent presentation of eco-efficiency measures.
ISO 14051 will provide guidelines for general principles and framework of material flow cost
accounting (MFCA). MFCA is a management tool to promote effective resource utilization, mainly in
manufacturing and distribution processes, in order to reduce the relative consumption of resources and material
costs.
ISO 14067 on the carbon footprint of products will provide requirements for the quantification and
communication of greenhouse gases (GHGs) associated with products. The purpose of each part will be to:
quantify the carbon footprint (Part 1) ; and harmonize methodologies for communicating the carbon footprint
information and also provide guidance for this communication (Part 2).
ISO 14069 will provide guidance for organizations to calculate the carbon footprint of their products,
services and supply chain.
ISO 14005 will provide guidelines for the phased implementation of an EMS to facilitate the take-up of
EMS by small and medium-sized enterprises. It will include the use of environmental performance evaluation.
ISO 14006 will provide guidelines on ecodesign.
ISO 14033 will provide guidelines and examples for compiling and communicating quantitative
environmental information.
Finally, ISO 14066 will specify competency requirements for greenhouse gas validators and verifiers.
ISO CERTIFICATION:
A standard is a document that provides requirements, specifications, guidelines or characteristics that
can be used consistently to ensure that materials, products, processes and services are fit for their purpose.
ISO (International Organization for Standardization) is the world's largest developer and publisher of
International Standards.
ISO International Standards ensure that products and services are safe, reliable and of good quality. For
business, they are strategic tools that reduce costs by minimizing waste and errors, and increasing productivity.
They help companies to access new markets, level the playing field for developing countries and facilitate free
and fair global trade.
ISO is a network of the national standards institutes of 161 countries, one member per country, with a
Central Secretariat in Geneva, Switzerland, that coordinates the system.
ISO is a non-governmental organization that forms a bridge between the public and private sectors. On
the one hand, many of its member institutes are part of the governmental structure of their countries, or are
mandated by their government. On the other hand, other members have their roots uniquely in the private
sector, having been set up by national partnerships of industry associations.
Therefore, ISO enables a consensus to be reached on solutions that meet both the requirements of business and
the broader needs of society.
Because "International Organization for Standardization" would have different acronyms in different
languages ("IOS" in English, "OIN" in French for Organisation internationale de normalisation), its founders
decided to give it also a short, all-purpose name. They chose "ISO", derived from the Greek isos, meaning
"equal". Whatever the country, whatever the language, the short form of the organization's name is always
ISO.
ISO International Standards ensure that products and services are safe, reliable and of good quality. For
business, they are strategic tools that reduce costs by minimizing waste and errors and increasing productivity.
They help companies to access new markets, level the playing field for developing countries and facilitate free
and fair global trade.
ISO International Standards provide practical tools for tackling many of today‘s global challenges.
Learn how International Standards work in the real world in sectors such as Health, Water, Food, Climate
change and many more.
Standards make an enormous and positive contribution to most aspects of our lives.
Standards ensure desirable characteristics of products and services such as quality, environmental friendliness,
safety, reliability, efficiency and interchangeability - and at an economical cost.
When products and services meet our expectations, we tend to take this for granted and be unaware of the role
of standards. However, when standards are absent, we soon notice. We soon care when products turn out to be
of poor quality, do not fit, are incompatible with equipment that we already have, are unreliable or dangerous.
When products, systems, machinery and devices work well and safely, it is often because they meet standards.
And the organization responsible for many thousands of the standards which benefit the world is ISO.
ISO has developed over 19 000 International Standards on a variety of subjects and more than 1000
new ISO standards are published every year. The full range of technical fields can be seen from the listing of
International Standards at http://www.iso.org/iso/iso_catalogue.
Users can browse that listing to find bibliographic information on each standard and, in many cases, a
brief abstract. The online ISO Standards listing integrates both the ISO Catalogue of published standards and
the ISO Technical programme of standards under development.
ISO standards are developed by technical committees comprising experts from the industrial, technical
and business sectors which have asked for the standards, and which subsequently put them to use. These
experts may be joined by representatives of government agencies, testing laboratories, consumer associations,
non-governmental organizations and academic circles.
The experts participate as national delegations, chosen by the ISO national member institute for the country
concerned. These delegations are required to represent not just the views of the organizations in which their
participating experts work, but of other stakeholders too.
According to ISO rules, the member institute is expected to take account of the views of the range of parties
interested in the standard under development. This enables them to present a consolidated, national consensus
position to the technical committee.
Popular standards
 ISO 9000 Quality management
 ISO 14000 Environmental management
 ISO 3166 Country codes
 ISO 26000 Social responsibility
 ISO 50001 Energy management
 ISO 31000 Risk management
 ISO 22000 Food safety management
 ISO 27001 Information security management
 ISO 45001 Occupational health and safety
 ISO 37001 Anti bribery management systems
THIRD PARTY AUDIT:

Audit is an official inspection of an organization's accounts, typically by an independent body.
Audit Types:
Internal
 First Party
External
 Second Party
 Third Party
Internal or First Party:

 An organization auditing its own systems, a self-assessment

 Used to measure the strengths and weaknesses against requirements, and an organizations own
standards
External or Second Party:
Inspections/Audits of Other Facilities
 One organization auditing another with which it either has, or is going to have, a contract or agreement
for the supply of goods or services
 Supplier audit will include the Quality Management System involved in the items or service provided
External Third Party Audits
 Independentof the organization being audited
 Used to certify, register or verify
Third party audits are external audits as well. However, they're performed by independent organizations
such as registrars (certification bodies) or regulators. ISO 19011 2011 also distinguishes between combined.
Auditing is the on-site verification activity, such as inspection or examination, of a process or quality
system, to ensure compliance to requirements. An audit can apply to an entire organization or might be specific
to a function, process, or production step.
Third-party quality audits have been an accepted practice within the North American manufacturing
industry for several decades. In the late 1980s and early 1990s, the audit process gained enormous momentum
via the introduction of international standards such as ISO 9001, ISO 14000, and industry-specific standards
such as QS 9000 (subsequently replaced by TS 16949). Each of these compliance standards requires a third-
party audit to evaluate the organization‘s management system against the requirements outlined in the
standard. In most situations, customers require compliance to these Quality Management System (QMS)
standards; however the auditee (i.e., organization subject to the audit) pays for the third-party audit. The
original intent of these standards and audit practices was to reduce the number of audits bestowed upon an
organization while implementing a common QMS among manufacturing facilities and service providers.
Consequently, ISO 9000 standards quickly gained popularity and registration bodies surfaced throughout the
globe. Organizations believed that ISO certification offered a competitive advantage over non-certified
suppliers while concurrently, customers began mandating ISO 9000 registration as a requirement for sourcing
business. As a result, the late 80s and early 90s realized a tremendous increase in third-party audits due to the
need for certification. The third-party audit increase influenced the growth of the consulting industry, which in
turn helped increase the urgency for organizations to obtain ISO 9000 registration. Oversight boards were
implemented to oversee the registration bodies, administer and set guidelines for third-party audits, and
develop standards for auditor competency and qualification. After nearly two decades of this self-sustaining
and ever-expanding industry, organizations and individuals are challenging the necessity and relevance of the
third party audit and certification process.
Rapid industrial growth in countries like China and India has greatly reduced poverty, but it has also
led to severe air and water pollution, which cause people to lead shorter and sicker lives. The World Health
Organization estimates that urban air pollution causes 1.3 million deaths worldwide per year, most of which
are in middle-income countries. According to the World Bank, the annual cost of environmental degradation
in India amounts to nearly 6 percent of the country‘s 2009 gross domestic product.
One way to curb such pollution is through third-party audits. Around the world, governments use third-
party audits to monitor compliance with regulations in health, safety, finance, and the environment. Yet in
virtually all cases, auditors are paid by and report to the company they are auditing, creating a conflict of
interest for the auditor. Auditors may have incentives to distort or falsify their reporting to maintain business
in such a system. Moreover, if auditors do not report the truth, there is no reason for the parties being regulated
to try to comply, since regulators do not have the information necessary to punish violators.

UNIT II
PROCESS MANAGEMENT:
Process management is the collection of activities of planning and monitoring the performance of a business
process. The term usually refers to the management of business processes and manufacturing processes.
In continuing research on award-winning companies, process management best practices as:
• Identifying the key business processes
– prioritizing on the basis of the value chain, customer needs and strategic significance, and using process
models and definitions
• Managing processes systematically
– giving process ownership to the most appropriate individual or group and resolving process interface issues
through meetings or ownership models
• Reviewing processes and setting improvement targets
– empowering process owners to set targets and collect data from internal and external customers
• Using innovation and creativity to improve processes
– adopting self-managed teams, business process improvement and idea schemes
• Changing processes and evaluating the benefits
– through process improvement or re-engineering teams, project/programme management and involving
customers and suppliers.
Too many businesses and organizations generally are still not process oriented, however; they focus
instead on tasks, on jobs, on the people who do them and on structures.
In establishing a high level or core process framework, many organizations have found inspiration in the
Process Classification Framework developed by the American Productivity and Quality Centre (APQC). With
the assistance of several major international corporations, the APQC have created and developed a high-level
generic enterprise model, a taxonomy of cross functional business processes that should encourage businesses
and other organizations to see their activities from a cross industry, process viewpoint rather than from a
narrow functional viewpoint. The intention is to allow the objective comparison of performance within and
among organizations.
The Process Classification Framework supplies a generic view of business processes often found in
multiple industries and sectors – manufacturing and service companies, health care, government, education and
others. It seeks to represent major processes and sub-processes through its structure and vocabulary.
The sub-processes listed under the high level processes shown in Figure are as follows:
1. Develop vision and strategy.

 Define the business concept and long-term vision.
 Develop business strategy.
 Manage strategic initiatives.
2. Develop and manage products and services.
 Manage product and service portfolio.
 Develop products and services.
3. Market and sell products and services.
 Understand markets, customers and capabilities.

 Develop marketing strategy.

 Develop sales strategy.
 Develop and manage marketing plans.
 Develop and manage sales plans.
4. Develop products and services.
 Plan for and align supply chain resources.
 Procure materials and services.
 Produce/manufacture/deliver product.
 Deliver service to customer.
 Manage logistics and warehousing.
5. Manage customer services.
 Develop customer care/customer service strategy.
 Plan and manage customer service operations.
 Measure and evaluate customer service operations.
6. Develop and manage human capital.
 Develop and manage human resources (HR) planning, policies and strategies.
 Recruit, source and select employees.
 Develop and counsel employees.
 Reward and retain employees.
 Redeploy and retire employees.
 Manage employees‘ information.
7. Manage information technology.
 Manage the business of information technology.
 Develop and manage IT customer relationships.
 Develop and implement security, privacy and data protection controls.
 Manage enterprise information.
 Develop and maintain information technology.
 Deploy information technology solutions.
 Deliver and support information technology solutions.
8. Manage financial resources.
 Perform planning and management accounting.
 Perform revenue accounting.
8.3 Perform general accounting and reporting.
 Manage fixed-asset project accounting.
 Process payroll.
 Process accounts payable and expense reimbursements.
 Manage treasury operations.
 Manage internal controls.
 Manage taxes.
 Manage international funds/consolidation.
9. Acquire, construct and manage assets.
 Design and construct/acquire non-productive assets.
 Plan maintenance work.
 Obtain and install assets, equipment and tools.
 Dispose of productive and non-productive assets.
10. Manage enterprise risk, compliance and resiliency.
 Manage enterprise risk.
 Manage business resiliency.
 Manage environmental health and safety.
 Manage external relationships.
 Build investor relationships.
 Manage government and industry relationships.
 Manage relations with board of directors.
 Manage legal and ethical issues.
 Manage public relations programme.
12. Develop and manage business capabilities.
 Manage business processes.
 Manage portfolio, program and project.
 Manage quality.
 Manage change.
 Develop and manage enterprise-wide knowledge management (KM) capability.
 Measure and benchmark.

QUALITY MANAGEMENT SYSTEM (QMS):

A quality management system (QMS) is a collection of business processes focused on consistently meeting
customer requirements and enhancing their satisfaction.
An organization will benefit from establishing an effective quality management system (QMS). The
cornerstone of a quality organization is the concept of the customer and supplier working together for their
mutual benefit. For this to become effective, the customer-supplier interfaces must extend into, and outside of,
the organization, beyond the immediate customers and suppliers.
A QMS can be defined as:
“A set of co-ordinated activities to direct and control an organization in order to continually improve the
effectiveness and efficiency of its performance.”
These activities interact and are affected by being in the system, so the isolation and study of each one
in detail will not necessarily lead to an understanding of the system as a whole. The main thrust of a QMS is in
defining the processes, which will result in the production of quality products and services, rather than in
detecting defective products or services after they have been produced.
The benefits of a QMS:
A fully documented QMS will ensure that two important requirements are met:
• The customers‘ requirements – the ability of the organization to deliver the desired product and service
consistently meeting their needs and expectations.
• The organization‘s requirements – both internally and externally, and at an optimum cost with efficient use of
the available resources – materials, human, technology and information.
These requirements can only be truly met if objective evidence is provided, in the form of information
and data, to support the system activities, from the ultimate supplier to the ultimate customer.
A QMS enables an organization to achieve the goals and objectives set out in its policy and strategy. It
provides consistency and satisfaction in terms of methods, materials, equipment, etc, and interacts with all
activities of the organization, beginning with the identification of customer requirements and ending with their
satisfaction, at every transaction interface.
Setting up a QMS:
As illustrated in the Process section, for organizations to function effectively, they have to identify and manage
numerous interlinked, cross-functional processes, always ensuring customer satisfaction is the target that is
achieved. The schematic illustrates this concept:

Management systems are needed in all areas of activity, whether large or small businesses, manufacturing,
service or public sector. A good QMS will:
• Set direction and meet customers‘ expectations
• Improve process control
• Reduce wastage
• Lower costs
• Increase market share
• Facilitate training
• Involve staff
• Raise morale
The adoption of a QMS needs to be a strategic decision of an organization, and is influenced by varying needs,
objectives, the products/services provided, the processes employed and the size and structure of the
organization. A QMS must ensure that the products/services conform to customer needs and expectations, and
the objectives of the organization. Issues to be considered when setting up a QMS includes its:
• Design
• Build
• Control
• Deployment
• Measurement
• Review
• Improvement
Taking each of these in turn:
Design and build includes the structure of the quality management system, the process and its implementation.
It‘s design must be led by senior managers to suit the needs of the organization, and this is ideally done using a
framework to lead the thinking. Design of the QMS should come from determining the organization‘s core
processes and well-defined goals and strategies, and be linked to the needs of one or more stakeholders.
The process for designing and building the QMS must also be clear, with the quality function playing a key
role, but involvement and buy-in to the system must also come from all other functions.
Deployment and implementation is best achieved using process packages, where each core process is broken
down into sub-processes, and described by a combination of documentation, education, training, tools, systems
and metrics. Electronic deployment via Intranets is increasingly being used.
Control of the QMS will depend on the size and complexity of the organization. ISO is a site-based system,
and local audits and reviews are essential even if these are supplemented by central reviews.
Local control, where possible, is effective, and good practice is found where key stakeholders are documented
within the process and where the process owner is allowed to control all of the process. Ideally, process
owners/operators are involved in writing procedures.
Measurement is carried out to determine the effectiveness and efficiency of each process towards attaining its
objectives. It should include the contribution of the QMS to the organization‘s goals.
7 QC TOOLS:
Tools are generally a means of accomplishing change, most fundamental quality tools called the seven
basic quality tools - 7QC tools. They are easy to learn and handle and are used to analyze solutions to existing
problems.
These seven quality tools which are basic for all other tools are:
• Flow chart
• Pareto diagram
• Check sheet
• Control chart
• Histogram
• Scatter plot
• Cause-and-effect diagram.
The seven quality tools were first emphasized by Ishikawa (in the 1960s), who is one of the quality
management gurus. His original seven tools include stratification, which some authors later called a flow chart
or a run chart.
They are also called the seven "basic" or "old" tools. After that other new tools have been developed for
various purposes but the basis for every work is related to the 7QC tools [3].These tools are also fundamental
to Kaizen and Juan‘s approach to quality improvement.
A flowchart is a type of diagram that represents an algorithm, workflow or process, showing the steps
as boxes of various kinds, and their order by connecting them with arrows. This diagrammatic representation
illustrates a solution model to a given problem.
A Pareto chart, named after Vilfredo Pareto, is a type of chart that contains both bars and a line
graph, where individual values are represented in descending order by bars, and the cumulative total is
represented by the line.
A check sheet is a structured, prepared form for collecting and analyzing data. This is a generic tool
that can be adapted for a wide variety of purposes.

A control chart is a graph used to study how a process changes over time. Data are plotted in time
order. The control chart always has a central line for the average, an upper line for the upper control limit and
a lower line for the lower control limit. These lines are determined from historical data.
A histogram is a graphical representation of the distribution of numerical data. It is an estimate of the
probability distribution of a continuous variable (quantitative variable) and was first introduced by Karl
Pearson.
A scatter plot is a plot of the values of Y versus the corresponding values of X: Vertical axis: variable
Y--usually the response variable. Horizontal axis: variable X--usually some variable we suspect may ber
related to the response.
A fishbone diagram, also called a cause and effect diagram or Ishikawa diagram, is a visualization
tool for categorizing the potential causes of a problem in order to identify its root causes.

Application of 7QC Tools:

These simple but effective "tools of improvement" are widely used as "graphical problem-solving methods"
and as general management tools in every process between design and delivery. The challenge for the
manufacturing and production industry is for "Everyone to understand and use the improvements tools in their
work". Some of the seven tools can be used in process identification and/or process analysis.
7 NEW QC TOOLS:
The seven advanced tools of quality management or the ‗New Seven‘ is a collection of tools put together by a
set of Japanese quality professionals. Many of the tools were already known to managers in other disciplines,
sometimes by names different, for instance, Arrow Diagram, was known to engineers and project managers by
names like PERT (Programme Evaluation and Review Technique) or CMP (Critical Mean Path). Another tool
in this set PDPC (Process Decision Programme Chart) has been used in operations research. The seven tools
we will see are:
1. Relations diagram
2. Tree diagram
3. Arrow diagram
4. Affinity diagram
5. Matrix diagram
6. Matrix data analysis diagram
7. Process decision program chart. (PDPC)
Relations Diagram
The purpose of relations diagram is to generate a visual representation of the relations between an effect and its
causes as well as the interrelationship between the causes in complex problems.
Tree Diagram
The purpose of the tree diagram is to explore ways and means to achieve an objective, develop a list of
alternate means to reach the desired situation in a sequential order and to present them in a visual form.
Arrow Diagram
The purpose of an arrow diagram is to create a visual presentation of the steps of a process or tasks necessary
to complete a project with special emphasis on the time taken for these activities. The diagram provides a clear
understanding of the schedule of various steps in the process which helps one to monitor the process for
ensuring its completion on time.
Affinity Diagram
The purpose of an affinity diagram is to provide a visual representation of grouping of a large number of ideas
or factors or requirements into logical sets of related items to help one organize action plans in a systematic
manner.
Matrix Diagram
The purpose of a matrix diagram is to explore the existence and the extent of relations between individual
items in two sets of factors or features or characteristics and express them in a symbolic form that is easy to
understand. The purpose for which the tool is most frequently used is to understand the relation between
customer expectations as expressed by the customers and product characteristics as designed, manufactured
and tested by the manufacturer.


Matrix Data Analysis Diagram

The purpose of matrix data analysis diagram is to present numerical data about two sets of factors in a matrix
form and analyze it to get numerical output. The factors most often are products and product characteristics.
The purpose then is to analyze the data on several characteristics for a number of products and use the
information to arrive at optimum values for the characteristics for a new product or to decide the strong points
of a product and use the information for designing a strategy for the promotion of the product.

Process Decision Programme Chart

The purpose of process decision programme chart is to prepare for abnormal occurrences with low probability
which may otherwise be overlooked and to present the occurrences as well as the necessary countermeasures to
guard against such occurrences in the form of a visual chart. The tool forces one to think of the possible
obstacles in the smooth progress of a process or a project and then find ways and means to surmount those
obstacles to ensure the successful and timely completion of the process or the project. Thus the tool helps one
to prepare a contingency plan to achieve the objective if adverse events occur.
PROBLEM SOLVING TECHNIQUES:

The problem solving method (also called the scientific method as applied to process improvement has
seven phases:
A- Identify the opportunities.
B- Analyze the current process.
C- Develop the optimal solution.
D- Implement changes.
E- Study the results.
F- Standardize the solution.
G- Plan for the future.
These steps are not totally dependent they are sometimes interrelated. In fact some techniques such as the
control chart can the effectively utilized in more than one step. Phase one: identify the opportunity: The
objective of this phase is to identify and prioritize for improvement, it has two parts: identify the problem and
form the team. Problems can be identified from verity of inputs, such as following:
A- Pareto analyze of repetitive alarm signals, as companies, returns, others.
B- Pareto analyze of repetitive internal alarm signals for example scrap, rework, sorting.
C- Data on performance of products, d-Comments of key people outside the organization.
D- Customer‘s surveys.
E- Brain storming by work groups.
F- Proposal from suggestions schemes.
Phase two: Analyze the current process: The objective of this phase is to understand the process and how it
is currently preformed. Key activities are determine the measurement needed to analyze the process; gather
data, define the process boundaries, outputs and customers (students), inputs and suppliers, and process flow;
identify root causes and identify levels of customers.
i- Establish performance measures with respect to customer's requirements.
ii- Determine data needed to manage the process.
iii- Establish regular feedback with customers and suppliers.
iv- Establish measures for quality/ cost/ timelines of inputs and outputs.
The team wills the customers and their expectations as well as their inputs, and interfaces of the process.
Design information, such as specifications, drawings, functions, bills of costs of materials which used in
educational process, field data, services, and maintainability process information. Statistical information's are
used in analyses the data and results, such as an average, median, range, slandered deviation, kurtosis,
skewness, and frequently distribution. Phase three: This phase has the objective of establishing problem
solutions and recommending the optimal solution to improve the process in this phase creativity plays the
major role, and brain storming is the principle technique, other group dynamics that can be considered for this
step are the Delphi method and nominal group technique. Note: (The other phases cannot be described in this
research due on the limited space for the research), will I have give more description for the first three phases,
because they are the essential of the method.
SEVEN STEP PROBLEM SOLVING TECHNIQUE:

The seven step problem solving technique covers:
1. Finding the right problem to solve
2. Defining the problem
3. Analyzing the problem
4. Developing possibilities
5. Selecting the best solution
6. Implementing
7. Evaluating and learning
1 Find the Right Problems to Solve:

Surprised to start with this step? Not many problem solving processes include this step, yet it is absolutely
crucial. Think how often we spend time and resources on problems which don‘t necessarily demand such
attention. Ask yourself ―Is it the right problem to solve?‖. This is also one of themost important stages in our
seven step problem solving technique. Why?
Well too often our approach to problem solving is reactive, we wait for the problems to arise. So firstly in our
seven step problem solving process, we advocate taking a proactive approach, go and find problems to solve;
important and valuable problems. The real starting point then for any problem solving process is to find the
right problem to solve.
How do you go about finding the right problems to solve?

That‘s what we set to answer in our problem solving skill article: ―Finding the Right problems to Solve‖. You
will find useful management tips in this activity to start the problem solving process by looking firstly at the
possibilities in your current issues and then secondly looking to the future.
2 Define the Problem:

It is very tempting to gloss over this step and move to analysis and solutions. However, like the first step, it is
one of the secrets of effective problem solving and helps to differentiate our seven step problem solving
technique. Combining problems that are valuable to solve, with defining exactly what you are trying to solve,
can dramatically improve the effectiveness of the problem solving process. The secret to defining the problem,
is really about attitude. Try to see every problem as an opportunity.
This is the crucial attitude which will then help you define the problem in a way which focuses on the potential
and opportunity in the situation. Peter Drucker advocates that we should starve problems and start feeding
opportunities. Perhaps because we don‘t see the right problems to solve or the opportunity in solving them.
Essentially Drucker suggests that we should move from a problem focus to an opportunity focus.
Define your problem as an opportunity! Our problem solving activity tool does just that, providing a process to
frame your problem as an opportunity and a question checklist to help you define what exactly the problem is,
and why it is worth your while solving it. The question checklist also leads you through a structured set of
questions to start the analysis of the problem. Which is the next step in the seven step problem solving
technique.
3 Analyse the Problem:
Analysis is a process of discovery of the facts, finding out what you know about the situation. The problem
solving activity question checklist leads you through a set of questions to identify the nature of the problem
and to analyse what it is and what it isn‘t.
One of the most important aspects of analysing any situation is involving the right people.
In ‖the best management tools ever: a good question― we suggest using Reg Revans approach of asking three
questions:
 Who knows? - about the situation/opportunity, or who has the information we need to solve it/realise it
 Who cares? - that something is done about it
 Who can? - do something about the solution
These questions are fundamental management tips. They help us to identify the people who need to come
together, in order to take appropriate action to solve an issue or realise an opportunity.
Analysis often requires a detailed examination of the situation. This is an important element in seven step
problem solving.
An excellent approach to detailed examination is adopted in our structured problem solving technique which
uses four steps to improve processes in your organisation. This management tool firstly helps you define
the current situation, then challenges all aspects of that current process. The third and fourth steps are
to develop options and then seek an optimal solution. The tool leads us from analysis to the next two stages in
our seven step problem solving technique, that is developing options and selecting a solution.
4 Develop Possibilities:
The previous steps will have already revealed plenty of possibilities for solving the problem and realising the
opportunities. At this stage it is important to give time and space for creative solutions. Placing a high value on
the ideas of others is a crucial leadership concept and facilitator skill when generating ideas to solve problems.
We have already suggested that for effective problem solving you need to ensure that you find the right
problems to solve and then ask yourself what opportunities are created by solving this problem. But how do
you focus on opportunities?
We have developed a tool, the power of positive thinking, which helps you to focus on those opportunities,
using 5 questions that create opportunities. A group process is recommended to help get possible solutions
from a wide range of people – solutions which can create significant opportunities for the organisation.

A second resource provides a great process to explore new possibilities and potential. In ‖the best management
tools ever: a good question‖ there is a tool which groups questions to help you:
 focus collective attention on the situation
 connect ideas and deeper insight
 create forward momentum and move to action
A rich range of possible solutions opens up the opportunities. When you consider you have plenty of ideas
with potential it‘s time to make a decision.
5 Select the Best Solution:
The next phase in our seven step problem solving technique is to consider the number of solutions found. It‘s
likely that more than one will be viable so how do you decide which solution to select? There will be
constraints restricting what you can do, issues about whether solutions fit within what is currently done, and
various stakeholders views to consider. Solutions therefore need to be evaluated. A powerful way to do this has
been proposed by Peter Drucker. In our business planning tool, ‖business goal setting―, we suggest using
Druckers three criteria as a filter to select ideas to take forward. To screen your ideas apply the three filter
tests:
1. Operational validity - Can you take action on this idea, or can you only talk about it? Can you really
do something right away to bring about the kind of future you desire?
2. Economic validity - Will the idea produce economic result? What would be the early indicators that it
was working?
3. Personal commitment - Do you really believe in the idea? Do you really want to be that kind of
people, do that kind of work, and run that kind of business?
Take you time answering these questions. You may well find that many of the other stages in our business goal
setting article can help in the problem solving process. Especially if the problem is of organisational
significance and its solution could impact the dir
ection the business or unit takes.
6 Implement:
Implementation of the seven step problem solving technique moves to a project implementation process. But
before putting your decision into effect check that you have:
 carefully defined the problem, and the desired outcome
 analysed the problem at length
 collected every available item of information about it
 explored all possible avenues, and generated every conceivable option
 chosen the best alternative after considerable deliberation.
To implement first make sure that you follow project management guidelines, particularly to be clear on the
outcomes, ask yourself what will be different when you solve the problem and realise the opportunity.
Secondly what are the objectives, these should clearly demonstrate how you will get to the outcomes. Gaining
clarity on these, and acceptance from the various stakeholders is crucial to succeeding.
The implementation process can then effectively follow a project management model of:
Define it
Design it
Do it – carry out activities to implement
Deliver it – test and ensure it has met the outcomes
Make sure that the three ―who‘s‖ are with you!
During the seven step problem solving process you should build the commitment of those:
who care – they want to see a solution,
who can – they are able to make it happen
who know – they can help you implement effectivel
7 Evaluate and Learn from the seven step problem solving technique:
You will have done some things really well by applying this seven step problem solving technique. It would be
all too easy to forget them in rushing to solve the next problem, or to implement the solution. You should
evaluate at least two areas:
 How you carried out the seven step problem solving process
 The effectiveness of the solution you implemented. Did it deliver the outcomes you expected?
You should also ask what you are now able to do, or what you could do next, now that you have improved
things by solving the problem. What further opportunities can you now realise that you weren‘t able to before?
This seven step problem solving technique ensures you follow a systematic process but it also emphasises two
secrets of effective problem solving:
 Use your problem solving skills to ask: ―is it the right problem to solve?‖
 Then ensure that any problem solving activity asks the question: ―what opportunities are created by
this problem?‖

PROBLEM SOLVING PROCESS:
The problem solving process is a logical sequence for solving problems and improving the quality of decisions.
It is also a guide to identifying which tools and techniques to apply.
The problem solving process can be applied to any problem or deviation from requirements but can also be
used to tackle an opportunity.

Problems, no matter their size or complexity, can best be solved by proceeding through a sequence of steps.
This ensures that everything possible will be done to apply the available resources in the most effective
manner, to consider a number of options, and to select the best solution.
The problem solving process can be used for:
 Producing a clear statement of the identified problem/opportunity
 Gathering all necessary information associated with a problem/opportunity
 Analysing collected data and providing a clear statement of the root causes of a problem or the benefits
of an opportunity
 Producing a list of all potential solutions to a problem/opportunity
 Selecting the best solution to fit the problem/opportunity
 Implementing and testing a plan
 Establishing a process for continuous improvement and holding the gains

UNIT III
SYSTEM FAILURE ANALYSIS APPROACH:
The systems failure analysis approach requires defining the problem, identifying all potential failure
causes, objectively evaluating each potential failure cause, and implementing actions to prevent recurrence.
This approach works well for several reasons.
Focusing on identifying all potential failure causes a universe of potential failure causes. These
probably would not be considered if the failure analysis team jumped to and addressed only the most likely
causes. Several techniques for identifying all potential failure causes are covered. For now, it is important to
recognize that the objective is to identify all potential causes, not just the perceived obvious ones.
If the failure being analyzed is a recurring or intermittent condition, the failure causes will almost
certainly be subtle. Identifying all potential causes forces the investigator to look away from the obvious
causes. If the cause of a recurring or intermittent problem was obvious, would not prior failure analysis efforts
have already identified and corrected it?
When the failure analysis team focuses on identifying all potential failure causes, the failure analysis
team will identify potential causes beyond those that caused the failure under investigation. Even if the failure
analysis team determines that these other hypothesized failure causes did not cause the failure being
investigated, this approach creates numerous improvement opportunities. The failure analysis team can address
the other hypothesized causes and prevent them from recurring as well.
The Four-Step Problem-Solving Process
In subsequent chapters, this book introduces and develops several sophisticated approaches for identifying and
evaluating potential failure modes, developing potential corrective actions, and then selecting the best
corrective actions. All of these can be condensed, however, to the simple four step problem-solving process
shown in Figure.
Four-step problem-solving process guides the systems failure analysis technologies and approach
Each of these steps is examined as follows.

What Is the Problem? Defining the problem sounds easy. It frequently is not. Based on experience in
hundreds of organizations spanning several industries, this is a step that many people miss (consider the
McDonnell Douglas MMS example described previously). It is very easy to focus on symptoms or to jump to
conclusions regarding potential causes and thus miss the problem. Therefore, it is highly recommended to
spend enough time on this step. All members of the failure analysis team should agree that the problem has
been accurately defined before moving on to the next step.
What Is the Cause of the Problem? After defining the problem, the failure analysis team can use several
technologies to identify potential failure causes. It is important to recognize that this is not a simple process. It
is also important to realize that this question is not always treated as objectively as it should be. Consider these
scenarios:
• One or more of the participants in a failure analysis meeting feels confident that they know what caused the
failure before all of the facts are available.
• Potential failure causes are dismissed without careful consideration.
• The people in such discussions jump ahead to define corrective actions before the failure causes have been
confirmed.
During this step of the four-step problem-solving process, the failure analysis team should focus on
accomplishing two objectives. The first is to identify all potential failure causes. The second is to objectively
evaluate the likelihood of each. This book develops a structure for doing both.
To help identify all potential failure causes, the following methods are covered:
• Brainstorming
• Ishikawa diagrams
• The ―five whys‖ approach
• Mind mapping
• Fault-tree analysis
All of these approaches for identifying potential failure causes are good ones, but fault-tree analysis is
preferred in many cases for its systematic coverage. After the failure analysis team has identifi ed all potential
failure causes, the team focus should then shift to objectively evaluating each.
This book describes several technologies covering this important part of the systems failure analysis process.
What Are the Potential Solutions? Identifying the potential solutions can only occur after the causes have
been identified, and there are categories of corrective actions ranging from highly desirable to those that are
not so desirable. Highly desirable corrective actions are those that remove all potential for human error. These
corrective actions can include such things as designs that prevent incorrect assembly or processes with
capabilities that guarantee outputs within acceptable ranges. Less desirable corrective actions rely on people
doing things correctly. Examples of these include additional inspections to eliminate defects (an approach

highly likely to allow defects to escape, as is explained in later chapters), assembly sequences that can induce
defects if not followed exactly, and other actions similarly dependent on people doing things perfectly.
What Is the Best Solution? The aforementioned guidance notwithstanding, the best solution may not always
be the one selected for immediate implementation. Sometimes, product or process redesigns are not feasible for
cost or schedule reasons. Sometimes, additional inspections or screenings are the only avenue available in the
short term. In many cases, the failure analysis team may opt to implement interim, less desirable corrective
actions immediately, to be followed up by longer term, more desirable corrective actions that absolutely
preclude failure recurrence.
As mentioned previously, the failure analysis team should not restrict its thinking only to the actual failure
cause. The failure analysis team should also consider corrective actions to prevent the other hypothesized
causes from inducing future failures. The failure analysis team should also go beyond the system that failed. In
many cases, other identical systems will have already been fielded or placed in storage. Other systems may be
in production. The failure analysis team should evaluate all product areas to determine if these areas should
incorporate the corrective actions applied to the failed system. Finally, the failure analysis team should
consider other similar system designs susceptible to the same problems. Where appropriate, these also receive
the same corrective actions.
The Failure Analysis Team
Many organizations assign failure analysis responsibilities to a single department (typically engineering or
quality assurance). This is a mistake. Experience has shown that the most effective failure analysis teams
include engineers, quality-assurance specialists, manufacturing technicians, purchasing personnel, fi eld-
service personnel, and others. The inclusion of an organization‘s major disciplines ensures that no single
department subjectively and unilaterally concludes the fault lies outside their area of responsibility.
A system design, manufacturing process, tooling, or inspection approach can induce failures. Components or
subassemblies provided by suppliers can induce failures. The environment in which the system is operated can
induce failures. There are many other factors that can induce failures. For example, manufacturing
organizations typically purchase more than half of their product content; including a purchasing representative
on the team ensures quick and accurate communication with suppliers. The failure analysis team will need to
assess the product pedigree, which may require additional testing or inspection; including a quality-assurance
representative will expedite obtaining this information. In some cases, failures occur even when all parts are
conforming to the engineering drawings and the system has been properly assembled; in such cases, it makes
sense to have an engineer on the team to assess design adequacy.
FAULT TREE ANALYSIS:

Fault tree analysis (FTA) is a top down, deductive failure analysis in which an undesired state of a system
is analyzed using Boolean logic to combine a series of lower-level events.
Fault Tree Analysis (FTA) is another technique for reliability and safety analysis. Bell Telephone Laboratories
developed the concept in 1962 for the US Air Force for use with the Minuteman system. It was later adopted
and extensively applied by the Boeing Company.
Fault trees are built using gates and events (blocks). The two most commonly used gates in a fault tree are the
AND and OR gates. As an example, consider two events (called input events) that can lead to another event
(called the output event). If the occurrence of either input event causes the output event to occur, then these
input events are connected using an OR gate. Alternatively, if both input events must occur in order for the
output event to occur, then they are connected by an AND gate. As a visualization example, consider the
simple case of a system composed of two components, A and B, where a failure of either component causes
system failure.
A fault tree diagram is used to conduct fault tree analysis (or FTA). Fault tree analysis helps determine the
cause of failure or test the reliability of a system by stepping through a series of events logically.
Steps to Creating a Fault Tree Diagram
1. Define the undesired event: the primary fault or failure being analyzed
2. Deduce the event's immediate causes
3. Keep stepping back through events until the most basic causes are identified
4. Construct a fault tree diagram
5. Evaluate your fault tree analysis
Benefits of Fault Trees
A fault tree creates a visual record of a system that shows the logical relationships between events and causes
lead that lead to failure. It helps others quickly understand the results of your analysis and pinpoint weaknesses
in the design and identify errors.
A fault tree diagram will help prioritize issues to fix that contribute to a failure.
In many ways, the fault tree diagram creates the foundation for any further analysis and evaluation.

For example, when changes or upgrades are made to the system, you already have a set of steps to evaluate for
possible effects and changes.
You can use a fault tree diagram to help you design quality tests and maintenance procedures.
How Are Fault Tree Diagrams Used
Fault tree analysis is useful in engineering, especially in industries where failure can have huge consequences
such as nuclear power or aeronautics. However, fault tree analysis can also be used during software
development to debug complex systems.
Fault Tree Diagram Symbols and Notations

There are two basic types of fault tree diagram notations: events and logic gates. The primary or basic failure
event is usually denoted with a circle. An external event is usually depicted with a symbol that looks like a
house. It's an event that is normal and guaranteed or expected to occur. Undeveloped event usually denotes
something that needs no further breakdown or investigation or an event for which no further analysis is
possible because of a lack of information. A conditioning event is a restriction on a logic gate in the diagram.
These gate symbols describe the Boolean relationship between outcomes.
Gate symbols can be the following:
 OR gate - An event occurs as long as at least one of the input events takes place
 AND gate - An event occurs only if all input conditions are met
 Exclusive OR gate - An event occurs only if one of the input conditions is met, not if all conditions are
met
 Priority AND gate - This is probably the most restrictive scenario when an event occurs only after a
specific sequence of conditions
 Inhibit gate - An event will only occur if all input events take place as well as whatever is described in a
conditional event


QUALITY CIRCLES:
A quality circle is a participatory management technique that enlists the help of employees in solving
problems related to their own jobs. Circles are formed of employees working together in an operation who
meet at intervals to discuss problems of quality and to devise solutions for improvements.
―Quality Circle is a small group of employees in the same work-area or doing a similar type of work who
voluntarily meet regularly for about an hour every week to identify, analyse and resolve work-related
problems, leading to improvement in their total performance, and enrichment of their work life‖.
In Japan, quality circles are organized within a department or work area for the purpose of studying and
eliminating production related problems. They are problem solving teams which use simple statistical methods
to research and decide on solutions to workshop problems.
Features of Quality Circles
The main features of quality circle are:
(a) Quality circle is a small group of employees:
Quality circle is a small group of employee of 8 to 10. A circle with less than 5 members would lose its
strength due to high rate of absenteeism. This may cause a circle to become inactive. On the other hand, more
than 15 members in a circle could result in rejection of opportunity for active participation by everyone. As
such, 8 to 10 are recommended as the minimum and maximum strength of quality circles respectively.
(b) Quality circle is organized in the same work area or doing similar type of work:
A quality circle is a homogeneous group and not an inter-departmental or inter-disciplinary one. Members
participating in circle activities must be on the same wave-length. Discussions taking place at the meetings
should be intelligible to each one of the members. This is possible only if the composition of the circle includes
employees working in the same work area or engaged in a similar type of work. Designations of members need
not necessarily be equal but the work in which they all are engaged should be common. For example, in any
assembly area, turner, drillers, electricians, and unskilled workers, etc.
(c) Quality circles are voluntary:
Employees decide to join quality circles on their own willingness. No compulsion, pressure can be brought on
any employee to join or not to join quality circles. This is based on voluntarism principle.
(d) Quality circles meet regularly for about an hour every week:
Normally, a quality circle meets for about an hour every week. It is therefore possible for the circle to meet
atleast three or four times a month. The regularity of such meetings is very significant and it must be adhered
to. These meetings could be conducted during or after working hours. This decision is left to quality circle
members themselves. For example the Bharath Heavy Electric Ltd., Bangalore, have been conducting the
meetings for an hour after the shift hours on every Saturdays.
(e) Quality circles identifies, analyses and resolves work-related problems:
The employees who work continuously in a work area knows best what problems are hindering achievement of
high quality, productivity and optimum performance as also how they can be remedied. The members of
quality circles themselves can, therefore, identify problems and entertain requests from the management and
other departments to look into certain problems that may be worrying them. The focus of quality circles is
―work related problems‖ and not other extraneous issues such as grievances or demands.
For Example in a non ferrous foundry in BHEL, Hyderabad, one of the problems identified by a quality circle
was on an unhealthy, smoke polluted environment.
(f) Quality circle leads to total performance:
As quality circles resolve work related problems relating to quality, productivity, cost reduction, safety etc. the
total performance of the work area naturally improves. This results in both tangible and intangible gains to the
whole organization. Empirical data provided in chapter 5 would substantiate this feature of quality circle.
(g) Quality circle enriches work life:
The spin off benefits of quality circles of the organization includes enrichment of the work life of their
employees apart from attitudinal changes, cohesive team culture, etc. Improved working environment, happier
relations with co-employees, greater job satisfaction etc. are responsible for this enrichment of their work life.
Assumptions of Quality Circles
The concept and philosophy of quality circles are derived from the following basic assumptions.
1. It is primarily based on recognition of the value of a workman as a human being as someone who willingly
activises on his job, his wisdom, intelligence, experience, attitudes and feelings.
2. Employees have the ability to contribute creative ideas to organizational processes.

3. The employees are the real experts on the intricacies and hidden potentials of their jobs. They can make
valuable suggestions on many small things that go wrong, or are not fully utilized provided they feel motivated
to do so. They have a desire to participate in the problem solving process.
Fig. Quality Circle in a Nutshell
STATISTICAL PROCESS CONTROL:

Statistical process control (SPC) is a method of quality control which uses statistical methods. SPC is
applied in order to monitor and control a process. Monitoring and controlling the process ensures that it
operates at its full potential.
Statistical Process Control is an analytical decision making tool which allows you to see when a process is
working correctly and when it is not. Variation is present in any process, deciding when the variation is natural
and when it needs correction is the key to quality control.
Where did this idea originate?
The foundation for Statistical Process Control was laid by Dr. Walter Shewart working in the Bell Telephone
Laboratories in the 1920s conducting research on methods to improve quality and lower costs. He developed
the concept of control with regard to variation, and came up with Statistical Process Control Charts which
provide a simple way to determine if the process is in control or not.
Dr. W. Edwards Deming built upon Shewart‘s work and took the concepts to Japan following WWII. There,
Japanese industry adopted the concepts whole-heartedly.
The resulting high quality of Japanese products is world-renowned. Dr. Deming is famous throughout Japan as
a "God of quality". Today, SPC is used in manufacturing facilities around the world.
What exactly are process control charts?
Control charts show the variation in a measurement during the time period that the process is observed.
In contrast, bell-curve type charts, such as histograms or process capability charts, show a summary or
snapshot of the results.

Process control charts are fairly simple-looking connected-point charts. The points are plotted on an x/y axis
with the x-axis usually representing time. The plotted points are usually averages of subgroups or ranges of
variation between subgroups, and they can also be individual measurements.
Some additional horizontal lines representing the average measurement and control limits are drawn across the
chart. Notes about the data points and any limit violations can also be displayed on the chart.
What is the purpose of control charts?
Control charts are an essential tool of continuous quality control. Control charts monitor processes to show
how the process is performing and how the process and capabilities are affected by changes to the process.
This information is then used to make quality improvements.
Control charts are also used to determine the capability of the process. They can help identify special or
assignable causes for factors that impede peak performance.
How do they work?
Control charts show if a process is in control or out of control. They show the variance of the output of a
process over time, such as a measurement of width, length or temperature. Control charts compare this
variance against upper and lower limits to see if it fits within the expected, specific, predictable and normal
variation levels.
If so, the process is considered in control and the variance between measurements is considered normal
random variation that is inherent in the process. If, however, the variance falls outside the limits, or has a run
of non-natural points, the process is considered out of control.
What’s this relationship between variation and assignable causes?
Variation is the key to statistical process control charts. The extent of variation in a process indicates whether a
process is working as it should.
When the variation between the points is large enough for the process to be out of control, the variation is
determined to be due to non-natural or assignable (special) causes.
So how are these normal-predictable variance levels determined?
One of the beauties of control charts is that the process itself determines the control limits. The process itself
shows what can and can not be expected. The control limits are automatically calculated from the data
produced by the process. These calculations are done painlessly by Statit QC software, no need to calculate
them by hand. By definition control limits cannot be pre-assigned, they are a result of the process or the ―voice
of the process".
Control limits are NOT specifications, corporate goals, or the ―voice of the customer".
These two concepts must never be confused.
―Get real‖ might be a nice way of putting the concept of control limits vs. specification lines.
What about these rules violations for determining if a series of points within the control limits is
unnatural?
The work done by Shewart and his colleagues gave them a base of empirical knowledge on which to base
Rules Violations. For example, six points in a row steadily increasing or decreasing. These have been codified
and are contained in the AT&T Statistical Quality Control Handbook. Statit Software uses these time-tested
and industry proven standards to automatically check for rules violations.
In control? Out of control? What’s the point?
If a process is in control, the outcomes of the process can be accurately predicted. In an out of control process,
there is no way of predicting whether the results will meet the target. An out of control process is like driving a
bus in which the brakes may or may not work and you have no way of knowing!
If a process is out of control, the next step is to look for the assignable causes for the process output, to look for
the out-of-controlness. If this out-of-controlness is considered negative, such as multiple defects per part, the
reasons for it are investigated and attempts are made to eliminate it. The process is continuously analyzed to
see if the changes work to get the process back in control.
On the other hand, sometimes the out-of-control outcomes are positive, such as no defects per part Then the
assignable cause is sought and attempts are made to implement it at all times. If successful, the averages are

lowered and a new phase of the process is begun. A new set of capabilities and control limits is then calculated
for this phase.
What’s this about capabilities?
A control chart shows the capabilities of a process that is in control. The outcomes of the process can be
accurately predicted, you know what to expect from the process.
Sometimes an organization‘s requirements, specifications or goals are beyond what the process is actually
capable of producing. In this case, either the process must be changed to bring the specifications within the
control limits, or the specifications must be changed to match the capabilities of the process. Other activities
are a waste of time, effort and money.
Can any type of process data be judged using Control Charts?
Processes that produce data that exhibits natural or common-cause variation will form a distribution that looks
like a bell-curve. For these types of processes, control charts should provide useful information.
If the data is not normally distributed, does not form a bell-curve, the process is already out of control so it is
not predictable. In this case we must look for ways to bring the process into control. For example, the data may
be too broad, using measurements from different work shifts that have different process outcomes.
Every process, by definition, should display some regularity. Organizing the data collection into rational
subgroups, each of which could be in control, is the first step to using control charts.
OK, I’m getting the idea these control charts are key to quality improvement. What specifically do they
look like, what are their key features and how are they created?
There are a handful of control charts which are commonly used. They vary slightly depending on their data,
but all have the same general fundamentals.
Control charts have four key features:

1) Data points are either averages of subgroup measurements or individual measurements plotted on the x/y
axis and joined by a line. Time is always on the x-axis.
2) The Average or Center Line is the average or mean of the data points and is drawn across the middle section
of the graph, usually as a heavy or solid line.
3) The Upper Control Limit (UCL) is drawn above the centerline and often annotated as "UCL". This is often
called the ―+ 3 sigma‖ line. This is explained in more detail in Control Limits on page 16.
4) The Lower Control Limit (LCL) is drawn below the centerline and often annotated as "LCL". This is called
the ―- 3 sigma‖ line.
The x and y axes should be labeled and a title specified for the chart.
ISHIKAWA DIAGRAM:
The Fishbone Diagram is a tool for analyzing process dispersion. It is also referred to as the "Ishikawa
diagram," because Kaoru Ishikawa developed it, and the "fishbone diagram," because the complete diagram
resembles a fish skeleton. The diagram illustrates the main causes and sub-causes leading to an effect.
It is a team brainstorming tool used to identify potential root causes(G) to problems. Because of its function it
may be referred to as a cause-and-effect diagram. In a typical Fishbone diagram, the effect is usually a problem
needs to be resolved, and is placed at the "fish head".
The causes of the effect are then laid out along the "bones", and classified into different types along the
branches. Further causes can be laid out alongside further side branches. So the general structure of a fishbone
diagram is presented below.

Fig.: Ishikawa Diagram

The main goal of the Fishbone diagram is to illustrate in a graphical way the relationship between a given
outcome and all the factors that influence this outcome. The main objectives of this tool are:
 Determining the root causes of a problem.
 Focusing on a specific issue without resorting to complaints and irrelevant discussion.
 Identifying areas where there is a lack of data.
The Fishbone diagram could be applied when it is wanted to:

 Focus attention on one specific issue or problem.
 Focus the team on the causes(G), not the symptoms.
 Organize and display graphically the various theories about what the root causes of a problem may be.
 Show the relationship of various factors influencing a problem.
 Reveal important relationships among various variables and possible causes.
 Provide additional insight into process behaviors.
Dr. Kaoru Ishikawa, a Japanese quality control statistician, invented the fishbone diagram. It is often also
referred to as the Ishikawa diagram. The fishbone diagram is an analysis tool that provides a systematic way of
looking at effects and the causes that create or contribute to those effects. Because of the function of the
fishbone diagram, it may be referred to as a cause-and-effect diagram. The design of the diagram looks much
like the skeleton of a fish. Therefore, it is often referred to as the fishbone diagram. A cause-and-effect diagram
can help identify the reasons why a process goes out of control. Often the fishbone diagram can be used to
summarize the results of a brainstorming session, identifying the causes of a specified undesirable outcome. It
helps to identify root causes(G) and ensures a common understanding of the causes. The steps for constructing
and analyzing a Cause-and-Effect Diagram are outlined below:
Step 1 - Identify and clearly define the outcome or effect to be analyzed2.
Formulate the problem and write it in a box on the right side of the diagram. Everyone must clearly understand
the nature of the problem and the process/product being discussed. If everyone is not clear on the purpose of
the session, the session will not resolve the problem. In this step the following rules have to be applied:
Decide on the effect to be examined. Effects are stated as particular quality characteristics, problems resulting
from work, planning objectives, and the like.
 Use Operational Definitions. Develop an Operational Definition of the effect to ensure that it is clearly
understood.
 Remember, an effect may be positive (an objective) or negative (a problem), depending upon the issue
that‘s being discussed.
 Using a positive effect which focuses on a desired outcome tends to foster pride and ownership
over productive areas. This may lead to an upbeat atmosphere that encourages the participation
of the group. When possible, it is preferable to phrase the effect in positive terms.
 Focusing on a negative effect can sidetrack the team into justifying why the problem occurred
and placing blame. However, it is sometimes easier for a team to focus on what causes a
problem than what causes an excellent outcome. While you should be cautious about the fallout
that can result from focusing on a negative effect, getting a team to concentrate on things that
can go wrong may foster a more relaxed atmosphere and sometimes enhances group
participation.
Step 2 - Use a chart pack positioned so that everyone can see it, draw the spine and create the effect box.
 Draw a horizontal arrow pointing to the right. This is the spine.
 To the right of the arrow, write a brief description of the effect or outcome which results from the
process.
 Draw a box around the description of the effect.
Step 3 - Identify the main causes contributing to the effect being studied. These are the labels for the major
branches of your diagram and become categories under which to list the many causes related to those
categories.

 Establish the major causes, or categories, under which other possible causes will be listed. You should
use category labels that make sense for the diagram you are creating.
 Write the main categories your team has selected to the left of the effect box, some above the spine and
some below it.
 Draw a box around each category label and use a diagonal line to form a branch connecting the box to
the spine.
Step 4 - For each major branch, identify other specific factors which may be the causes of the effect
 Identify as many causes or factors as possible and attach them as sub-branches of the major branches.
 Fill in detail for each cause. If a minor cause applies to more than one major cause, list it under both.
Step 5 - Identify increasingly more detailed levels of causes and continue organizing them under related causes
or categories. You can do this by asking a series of why questions. You may need to break your diagram into
smaller diagrams if one branch has too many sub-branches. Any main cause (3Ms and P, 4Ps, or a category
you have named) can be reworded into an effect.
Step 6 - Analyze the diagram. Analysis helps you identify causes that warrant further investigation. Since
Cause-and-Effect Diagrams identify only Possible Causes, you may want to use a Pareto Chart to help your
team determine the cause to focus on first.
 Look at the ―balance‖ of your diagram, checking for comparable levels of detail for most of the
categories.
 A thick cluster of items in one area may indicate a need for further study.
 A main category having only a few specific causes may indicate a need for further identification
of causes.
 If several major branches have only a few subbranches, you may need to combine them under a
single category.
 Look for causes that appear repeatedly. These may represent root causes.
 Look for what you can measure in each cause so you can quantify the effects of any changes you make.
 Helps determine root causes
 Encourages group participation
 Uses an orderly, easy-to-read format to diagram cause and effect relationships
 Indicates possible causes of variation
 Increases knowledge of the process by helping everyone to learn more about the factors at work and
how they relate
 Identifies areas for collecting data
CONTROL CHARTS:
The control chart is a graph used to study how a process changes over time. Data are plotted in time order. A
control chart always has a central line for the average, an upper line for the upper control limit and a lower line
for the lower control limit. These lines are determined from historical data.
A control chart is a statistical tool used to distinguish between variation in a process resulting from common
causes and variation resulting from special causes. It presents a graphic display of process stability or
instability over time.
Every process has variation. Some variation may be the result of causes which are not normally present in the
process. This could be special cause variation. Some variation is simply the result of numerous, ever-present
differences in the process. This is common cause variation. Control Charts differentiate between these two
types of variation.
One goal of using a Control Chart is to achieve and maintain process stability. Process stability is defined as a
state in which a process has displayed a certain degree of consistency in the past and is expected to continue to
do so in the future. This consistency is characterized by a stream of data falling within control limits based on
plus or minus 3 standard deviations (3 sigma) of the centerline.

Why should teams use Control Charts?

A stable process is one that is consistent over time with respect to the center and the spread of the data. Control
Charts help you monitor the behavior of your process to determine whether it is stable. Like Run Charts, they
display data in the time sequence in which they occurred. However, Control Charts are more efficient that
Run Charts in assessing and achieving process stability.
 Monitor process variation over time.
 Differentiate between special cause and common cause variation.
 Assess the effectiveness of changes to improve a process.
 Communicate how a process performed during a specific period.
What are the types of Control Charts?
There are two main categories of Control Charts, those that display attribute data, and those that display
variables data.
Attribute Data: This category of Control Chart displays data that result from counting the number of
occurrences or items in a single category of similar items or occurrences. These ―count‖ data may be expressed
as pass/fail, yes/no, or presence/absence of a defect.
Variables Data: This category of Control Chart displays values resulting from the measurement of a
continuous variable. Examples of variables data are elapsed time, temperature, and radiation dose.
While these two categories encompass a number of different types of Control Charts, there are three types that
will work for the majority of the data analysis cases you will encounter. In this module, we will study the
construction and application in these three types of Control Charts:
X-Bar and R Chart
Individual X and Moving Range Chart for Variables Data
Individual X and Moving Range Chart for Attribute Data
What are the elements of a Control Chart?
Each Control Chart actually consists of two graphs, an upper and a lower, which are described below under
plotting areas. A Control Chart is made up of eight elements.
1. Title. The title briefly describes the information which is displayed.
2. Legend. This is information on how and when the data were collected.
3. Data Collection Section. The counts or measurements are recorded in the data collection section of the
Control Chart prior to being graphed.
4. Plotting Areas. A Control Chart has two areas—an upper graph and a lower graph—where the data is
plotted.
a. The upper graph plots either the individual values, in the case of an Individual X and Moving
Range chart, or the average (mean value) of the sample or subgroup in the case of an X-Bar and R chart.
b. The lower graph plots the moving range for Individual X and Moving Range charts, or the range of
values found in the subgroups for X-Bar and R charts.
5. Vertical or Y-Axis. This axis reflects the magnitude of the data collected.
The Y-axis shows the scale of the measurement for variables data, or the count (frequency) or percentage
of occurrence of an event for attribute data.
6. Horizontal or X-Axis. This axis displays the chronological order in which the data were collected.
7. Control Limits. Control limits are set at a distance of 3 sigma above and 3 sigma below the centerline [Ref.
6, pp. 60-61]. They indicate variation from the centerline and are calculated by using the actual values plotted
on the Control Chart graphs.
8. Centerline. This line is drawn at the average or mean value of all the plotted data. The upper and lower
graphs each have a separate centerline.
What are the steps for calculating and plotting an X-Bar and R Control Chart for Variables Data?
The X-Bar (arithmetic mean) and R (range) Control Chart is used with variables data when subgroup or
sample size is between 2 and 15. The steps for constructing this type of Control Chart are:
Step 1 - Determine the data to be collected. Decide what questions about the process you plan to answer.
Refer to the Data Collection module for information on how this is done.
Step 2 - Collect and enter the data by subgroup. A subgroup is made up of variables data that represent a
characteristic of a product produced by a process.
The sample size relates to how large the subgroups are. Enter the individual subgroup measurements in time
sequence in the portion of the data collection section of the Control Chart labeled MEASUREMENTS
(Viewgraph 7).
Step 3 - Calculate and enter the average for each subgroup. Use the formula below to calculate the average
(mean) for each subgroup and enter it on the line labeled Average in the data collection section.

Average Example
Step 4 - Calculate and enter the range for each subgroup. Use the following formula to calculate the range
(R) for each subgroup. Enter the range for each subgroup on the line labeled Range in the data collection
section.
Step 5 - Calculate the grand mean of the subgroup’s average. The grand mean of the subgroup‘s average
(X-Bar) becomes the centerline for the upper plot.
Step 6 - Calculate the average of the subgroup ranges. The average of all subgroups becomes the centerline
for the lower plotting area.
Step 7 - Calculate the upper control limit (UCL) and lower control limit (LCL) for the averages of the
subgroups. At this point, your chart will look like a Run Chart. Now, however, the uniqueness of the Control
Chart becomes evident as you calculate the control limits. Control limits define the parameters for determining
whether a process is in statistical control. To find the X-Bar control limits, use the following formula:
Step 8 - Calculate the upper control limit for the ranges. When the subgroup or sample size (n) is less than
7, there is no lower control limit. To find the upper control limit for the ranges, use the formula:
Step 9 - Select the scales and plot the control limits, centerline, and data points, in each plotting area.
The scales must be determined before the data points and centerline can be plotted. Once the upper and lower
control limits have been computed, the easiest way to select the scales is to have the current data take up
approximately 60 percent of the vertical (Y) axis. The scales for both the upper and lower plotting areas should
allow for future high or low out-of control data points.
Plot each subgroup average as an individual data point in the upper plotting area. Plot individual range data
points in the lower plotting area.
Step 10 - Provide the appropriate documentation. Each Control Chart should be labeled with who, what,
when, where, why, and how information to describe where the data originated, when it was collected, who
collected it, any identifiable equipment or work groups, sample size, and all the other things necessary for
understanding and interpreting it. It is important that the legend include all of the information that clarifies
what the data describe.

UNIT IV
QUALITY FUNCTION DEVELOPMENT (QFD):
QFD (quality function deployment) is defined as a method for developing a design quality aiming at satisfying
the consumer and then translating the consumer's demand into design targets and major quality assurance
points to be used throughout the production phase.
History of QFD
QFD was invented in Japan by Yoji Akao in 1966, but was first implemented in the Mitsubishi‘s Kobe
shipyard in 1972, possibly out of the teaching of Deming. Then later it was adopted and developed by other
Japanese companies, notably Toyota and its suppliers.
In the USA the first serious exponents of QFD were the 'big three' automotive manufacturers in the 1980's, and
a few leading companies in other sectors such as electronics. However, the uptake of QFD in the Western
world appears to have been fairly slow. There is also some reluctance among users of QFD to publish and
share information - much more so than with other quality-related methodologies. This may be because the data
captured and the decisions made using QFD usually relate to future product plans, and are therefore sensitive,
proprietary, and valuable to competitors.
In Akao‘s words, QFD "is a method for developing a design quality aimed at satisfying the consumer and then
translating the consumer's demand into design targets and major quality assurance points to be used throughout
the production phase.
The 3 main goals in implementing QFD are:
1. Prioritize spoken and unspoken customer wants and needs.
2. Translate these needs into technical characteristics and specifications.
3. Build and deliver a quality product or service by focusing everybody toward customer satisfaction.
Since its introduction, Quality Function Deployment has helped to transform the way many companies:
• Plan new products
• Design product requirements
• Determine process characteristics
• Control the manufacturing process
• Document already existing product specifications
QFD uses some principles from Concurrent Engineering in that cross-functional teams are involved in all
phases of product development. Each of the four phases in a QFD process uses a matrix to translate customer
requirements from initial planning stages through production control.
Each phase, or matrix, represents a more specific aspect of the product's requirements.
Relationships between elements are evaluated for each phase. Only the most important aspectsfrom each phase
are deployed into the next matrix.

Phase 1, Product Planning: Building the House of Quality. Led by the marketing department, Phase 1, or
product planning, is also called The House of Quality. Many organizations only get through this phase of a
QFD process. Phase 1 documents customer requirements, warranty data, competitive opportunities, product
measurements, competing product measures, and the technical ability of the organization to meet each
customer requirement. Getting good data from the customer in Phase 1 is critical to the success of the entire
QFD process.
Phase 2, Product Design: This phase 2 is led by the engineering department. Product design requires
creativity and innovative team ideas. Product concepts are created during this phase and part specifications are
documented. Parts that are determined to be most important to meeting customer needs are then deployed into
process planning, or Phase 3.
Phase 3, Process Planning: Process planning comes next and is led by manufacturing engineering. During
process planning, manufacturing processes are flowcharted and process parameters (or target values) are
documented.
Phase 4, Process Control: And finally, in production planning, performance indicators are created to monitor
the production process, maintenance schedules, and skills training for operators. Also, in this phase decisions
are made as to which process poses the most risk and controls are put in place to prevent failures. The quality
assurance department in concert with manufacturing leads Phase 4.
The House of Quality
The first phase in the implementation of the Quality Function Deployment process involves putting together a
"House of Quality" such as the one shown below, which is for the development of a climbing harness.

Steps to the House of Quality

Step 1: Customer Requirements - "Voice of the Customer"
The first step in a QFD project is to determine what market segments will be analyzed during the process and
to identify who the customers are. The team then gathers information from customers on the requirements they
have for the product or service. In order to organize and evaluate this data, the team uses simple quality tools
like Affinity Diagrams or Tree Diagrams.
Step 2: Regulatory Requirements
Not all product or service requirements are known to the customer, so the team must document requirements
that are dictated by management or regulatory standards that the product must adhere to.
Step 3: Customer Importance Ratings
Customers then rate the importance of each requirement. This number will be used later in the relationship
matrix.
Step 4: Customer Rating of the Competition
Understanding how customers rate the competition can be a tremendous competitive advantage. In this step of
the QFD process, it is also a good idea to ask customers how your product or service rates in relation to the
competition. There is remodeling that can take place in this part of the House of Quality. Additional rooms that
identify sales opportunities, goals for continuous improvement, customer complaints, etc., can be added.
Step 5: Technical Descriptors - "Voice of the Engineer"
The technical descriptors are attributes about the product or service that can be measured and benchmarked
against the competition. Technical descriptors may exist that your organization is already using to determine
product specification, however new measurements can be created to ensure that your product is meeting
customer needs.
Step 6: Direction of Improvement
As the team defines the technical descriptors, a determination must be made as to the direction of movement
for each descriptor.
Step 7: Relationship Matrix
The relationship matrix is where the team determines the relationship between customer needs and the
company's ability to meet those needs. The team asks the question, "what is the strength of the relationship
between the technical descriptors and the customers needs?" Relationships can either be weak, moderate, or
strong and carry a numeric value of 1, 3 or 9.
Step 8: Organizational Difficulty
Rate the design attributes in terms of organizational difficulty. It is very possible that some attributes are in
direct conflict. Increasing the number of sizes may be in conflict with the companies stock holding policies.
Step 9: Technical Analysis of Competitor Products
To better understand the competition, engineering then conducts a comparison of competitor technical
descriptors. This process involves reverse engineering competitor products to determine specific values for
competitor technical descriptors.
Step 10: Target Values for Technical Descriptors
At this stage in the process, the QFD team begins to establish target values for each technical descriptor. Target
values represent "how much" for the technical descriptors, and can then act as a base-line to compare against.
Step 11: Correlation Matrix
This room in the matrix is where the term House of Quality comes from because it makes the matrix look like
a house with a roof. The correlation matrix is probably the least used room in the House of Quality; however,
this room is a big help to the design engineers in the next phase of a comprehensive QFD project. Team
members must examine how each of the technical descriptors impact each other. The team should document
strong negative relationships between technical descriptors and work to eliminate physical contradictions.
Step 12: Absolute Importance
Finally, the team calculates the absolute importance for each technical descriptor. This numerical calculation is
the product of the cell value and the customer importance rating. Numbers are then added up in their respective
columns to determine the importance for each technical descriptor. Now you know which technical aspects of
your product matters the most to your customer.
BENCHMARKING:
The essence of benchmarking is the process of identifying the highest standards of excellence for products,
services, or processes, and then making the improvements necessary to reach those standards, commonly called
―best practices‖.
Benchmarking was begun in the late 1970s by Xerox Corporation. During this time, Xerox was losing market
share and feeling a lot of pressure from its competitors. In an attempt to try and ―get back into the game‖,
Xerox decided to compare its operations to those of its competitors. After finding quality standards with which
to compare itself, Xerox began one of the greatest trends in the business world today.
Benchmarking has been gaining popularity, especially in the last five years. The process of benchmarking is
more than just a means of gathering data on how well a company performs against others. Benchmarking can
be used in a variety of industries, both services and manufacturing. It is also a method of identifying new ideas
and new ways of improving processes and, therefore, being better able to meet the expectations of customers.
The ultimate objective of benchmarking is process improvement that meets the attributes of customer
expectations.
Robert C. Camp headed up the now-famous study at Xerox in which the buzzword ―benchmarking‖ was
coined in late 1980. When asked whether the best work practices necessarily improve the bottom line, he
replied: ―the full definition of benchmarking is finding and implementing best practices in our business,
practices that meet customer requirements.
Reasons and perceived benefits of benchmarking
Benchmarking is the process by which companies look at the ―best‖ in the industry and try to imitate their
styles and processes. This helps companies to determine what they could be doing better. The decision to begin
benchmarking is valuable to companies by opening up many different ideas to processes, approaches, and
concerns.
Increasing productivity and individual design
Companies are benchmarking for a variety of reasons. The reasons can be broad, such as increasing
productivity, or they can be specific, such as improving an individual design. By simply looking outside itself,
a company can identify breakthroughs in thinking. A similar process used in a different way can shed light on
new opportunities to use the original process.
Strategic tool
Leapfrogging competition is another reason to use benchmarking as a strategic tool. A company‘s competitors
may be stuck in the same rut as the company deciding to benchmark. It would be possible to get a jump on
competitors by using new-found strategies.
Enhance learning
Another reason to benchmark is overcoming disbelief and enhancing learning. For example, selling or hearing
about another company‘s processes and how they are working will help employees to believe that there may be
a better way to compete.
Growth potential
Benchmarking may cause a necessary change in the culture of an organization. After a period of time in the
industry, an organization may become too practiced at searching inside the company for growth. The company
would be better off looking outside its walls for potential areas of growth. An outward looking company tends
also to be a future oriented company. This often leads to a more enhanced organization and increased profits.
Assessment of performance tool
Benchmarking is defined as ―the process of identifying and learning from best practices anywhere in the
world‖ (Allan, 1997). By identifying the ―best‖ practices, organizations know where they stand in relation to
other companies. The other companies can be used as evidence of problem areas, and provide possible
solutions for each area. When companies benchmark, they use partners to share information with and learn
from each other. Benchmarking allows organizations to understand their own administrative operations better,
and marks target areas for improvement. It is an ideal way to learn from other companies who are more
successful in certain areas.
Continuous improvement tool
Benchmarking is increasing in popularity as a tool for continuous improvement. Organizations that faithfully
use benchmarking strategies achieve a cost savings of 30 to 40 per cent or more. Benchmarking establishes
methods of measuring each area in terms of units of output as well as cost. In addition, benchmarking can
support the process of budgeting, strategic planning, and capital planning.
In the early 1980s, Ford Motor Company needed to change many aspects of its operations to cut costs due to
the suffering automotive market. Management believed it could improve processes in the accounts payable
department. After gathering data on Mazda‘s accounts payable operations, Ford analyzed and compared its
own accounts payable operations. As a result, Ford reduced costs by 5 per cent.
Vehicle to improve performance
Benchmarking also allows companies to learn new and innovative approaches to issues facing management
which, in turn, provides the basis for training. Benchmarking acts as vehicle to improve performance by
assisting in setting achievable goals that have already been proven successful. It overcomes disbelief that there
are, by example, other ways of achieving and creating overall enhancement of an organization.
Types of benchmarking
There are four different types of benchmarking which consist of: internal benchmarking, competitive
benchmarking, functional or industry benchmarking, and process or generic benchmarking. Before deciding to
benchmark, a company needs to determine what it is they want to benchmark.
(1) The first basic type of benchmarking is internal benchmarking. This is benchmarking against operations. It
is one of the simplest forms since most companies have similar functions inside their business units.
Determining the internal performance standards of an organization are internal benchmarking‘s main objective.
This enables the sharing of a multitude of information. The benefit of immediate gain comes from identifying
the best internal procedures and being able to transfer them to other portions of the organization. Unless it is
later used as a baseline for external benchmarking, companies implementing this type can often retain an
introverted.
(2) Competitive benchmarking is a type used with direct competitors. Done externally, competitive
benchmarking‘s goal is to compare companies in the same markets which have competing products, services,
or work processes. An example would be McDonald‘s versus Burger King. Under this type of strategy, it is
advantageous to see what a company‘s related performance is. Only under certain conditions with direct
competitors, information would be easy to reach. Particularly information in the public domain would be the
most accessible. Competitors may choose to make it very difficult to obtain their priceless information.
(3) Functional or industry benchmarking is performed externally against industry leaders or the best functional
operations of certain companies. The benchmarking partners are usually those who share some common
technological and market characteristics. They also seem to concentrate on specific functions. Because there
are no direct competitors involved, the benchmarking partner is more willing to contribute and share. A
disadvantage can be the cost and scheduling of the already overwhelmed benchmarked companies (Matters and
Evans, 1997).
(4) Finally, process or generic benchmarking focuses on the best work processes. Instead of directing the
benchmarking to the business practices of a company, the similar procedures and functions are emphasized.
This type can be used across dissimilar organizations.
Although it is thought to be extremely effective, it is difficult to implement. Generic benchmarking requires a
broad conceptualizing of the entire process and a careful understanding of the procedures.
Each company should evaluate carefully its own perspective in what benchmarking is and how they wish to
use this process. The company needs to determine whether their focus is on financial results or on meeting
customer requirements. This is the only effective way to begin the benchmarking process.
The benchmarking process
Benchmarking is a very structured process that consists of several steps to be taken. These steps are often
provided for in a model. It should be noted that even though the process is very structured, it should not add
complexity to a simple idea. Basically, ―the structure should not get in the way of the process‖.
Most models of benchmarking process include the following steps, according to Bateman (1994) (see Figure).
According to The Nuts and Bolts of Benchmarking, written by Margaret Matters and Anne Evans (1997), there
are five stages included in the benchmarking process which is discussed below:
(1) Planning the exercise: this step involves identifying the strategic intent of the business or process to be
benchmarked. Many times this information can be obtained by looking at the company‘s mission statement
which summarizes its main purposes. Then selection of the actual processes to be benchmarked must be
chosen. This consists of identifying various products produced by the benchmarked company and asking your
own company if using this process will create positive results in the organization. Then the customer‘s
expectations must be identified. Finally, the critical success factors have to be determined in order to
benchmark. These factors are links to successful business results.
(2) Form the benchmarking team: the first step is to select overall team members. These members should be
chosen from various areas of the organization. All members should cooperate and communicate with one
another in order to get the best results out of the benchmarking process. There are three main teams comprising
the overall group. The lead team is responsible for maintaining commitment to the process throughout the
organization. The preparation team is responsible for carrying out detailed analysis, and the visit team must
carry out the benchmarking visit.
(3) Collect the data: this step involves gathering information on best practice companies and their
performances. Before a company identifies best practice companies, they should first identify their own
processes, products, and services. This step will allow a company to fully realize the extent of improvements
available. Site visits are also an important factor in collecting data because they allow for a more in-depth
understanding of the processes.

(4) Analyze data for gaps: this step involves determining how your company relates to the benchmarked
company. It allows identification of performance gaps and their possible causes.
(5) Take action: this step involves determining what needs to be done in order to match the best practice for the
process. Not only should determination of changes be made, but they also should be implemented.
Different companies have their own benchmarking methods, but no matter which method is used, the major
steps involved are as follows: first, measure the performance of the best-in-class relative to critical
performance variables such as cost, productivity, and quality; second, determine how the levels of performance
are achieved; and third, use the information to develop and implement a plan for improvement.
TAGUCHI ANALYSIS:
Since 1960, Taguchi methods have been used for improving the quality of Japanese products with great
success. During the 1980‘s, many companies finally realized that the old methods for ensuring quality were not
competitive with the Japanese methods. The old methods for quality assurance relied heavily upon inspecting
products as they rolled off the production line and rejecting those products that did not fall within a certain
acceptance range. However, Taguchi was quick to point out that no amount of inspection can improve a
product; quality must be designed into a product from the start. It is only recently that companies in the United
States and Europe began adopting Taguchi‘s robust design approaches in an effort to improve product quality
and design robustness.
What is robust design? Robust design is an “engineering methodology for improving productivity during
research and development so that high-quality products can be produced quickly and at low cost”(Phadke,
1989). The idea behind robust design is to improve the quality of a product by minimizing the effects of
variation without eliminating the causes (since they are too difficult or too expensive to conrol). His method is
an off-line quality control method that is instituted at both the product and process design stage to improve
product manufacturability and reliability by making products insensitive to environmental conditions and
component variations.
The end result is a robust design, a design that has minimum sensitivity to variations in uncontrollable factors.
Dr. Genichi Taguchi bases his method on conventional statistical tools together with some guidelines for
laying out design experiments and analyzing the results of these experiments. Taguchi's approach to quality
control applies to the entire process of developing and manufacturing a product— from the initial concept,
through design and engineering, to manufacturing and production. Taguchi methods are used to specify
dimension and feature detail and normally follow DFM activities. In the next section we discuss Taguchi‘s
concept of a quality loss function. This is then followed by a detailed description of Taguchi‘s approach to
parameter design.
G. Taguchi, a Japanese engineer, had a big effect on quality control and experimental design in the 1980s and
1990s.
Let‘s begin with the sources of product variation. Some example of the random influences or ―noise,‖ that
affect a product‘s characteristics are
1. Manufacturing
 Operator
 Raw materials
 Machine settings
 Environmental
2. Environmental (the customer‘s environment)
 Temperature
 Humidity
 Dust
 Load
3. Product Deterioration (Aging)
Taguchi suggested that ―quality‖ should be thought of, not as a product being inside or outside of
specifications, but as the variation from the target. Variation from the target can be broken into two
components, production variation, and bias.
Picture
To quantify quality loss, write T for the target value and Y for the measured value. We want E(Y ) = T. Write
L(Y ) for the loss (in dollars, reputation, customer satisfaction) for deviation of Y from T. A popular choice for
the loss function is
Now consider the product development stages at which countermeasures against various sources of variation
can be built into the product.

We can think of quality control during manufacturing as on-line quality control, while quality control efforts
during product design and process design are off-line quality control. There are potentially bigger payoffs from
off-line quality control.
Consider the example from Bell Labs. In designing a power circuit which is to have a target output voltage of
115V.
Draw picture.
Voltage depends on transistor gain nonlinearly. The engineers set the transistor gain at 350, where the voltage
response curve was fairly flat. Then they adjusted the resistor to return the voltage to the target of 115.
Taguchi recommended a two-step design process, robust design followed by tolerance design. Robust Design
is a technique that reduces variation in a product by reducing the sensitivity of the design of the product to
sources of variation rather than by controlling their sources. Tolerance Design is concerned with how much
variation of the design and noise factors is permissible. It is a method for determining tolerances that
minimizes the sum of product manufacturing and lifetime costs. The basic idea is to set tolerances around
nominal settings identified by parameter design, not by convention.
One must first identify the control parameters. These are sometimes also called design parameters. They are
the product design characteristics whose nominal settings can be specified by the product designers.
Next, one must state the problem and objectives. It works best to have a session that includes all the interested
parties, and not to work in isolation.
Here are the operational steps for robust design.
1. State your problem and objective.
2. List responses, control parameters, and sources of noise.
3. Plan the experiment.
4. Run experiment and predict improved parameter settings.
5. Run confirmation experiment.
If the objective is not met, then it‘s back to step (2). Otherwise, you can adopt the improved design.
For the response variable, one begins by identifying important measures that are being targeted. One also
wants a numerical representation of variability attributed to ―noise.‖ It is sometimes called a performance
statistic. Two commonly used measures are
In general, the higher the performance measure the better. Because of the need to estimate s2, we are led to
designs with two aspects.
First one creates a design with design parameters, called by Taguichi the Inner Array. Then one creates the
array of noise factors, called by Taguichi the Outer Array. Thus for each setting in the design matrix, one runs
one run for each setting in the noise matrix. The measurements of the performance characteristic are then
grouped to give the performance statistic for that run of the design matrix.
The Inner Array is generally a nearly-saturated array, usually a fractional factorial or Plackett-Burman design.
The same kind of designs are used for for the Outer Array.
In the analysis, we‘ll look for factors that affect the targeted response only, those that affect variability only,
those that affect both, and those that affect neither.
Let‘s consider an example from Bell Labs. The first step in silicon wafer fabrication is the growth of a smooth
epitaxial layer onto a polished silicon wafer.
The epitaxial layer is deposited on wafers while they are mounted on a rotating spindle called a susceptor. The
problem: high drop-out rate caused by deviation in thickness, both between and within wafers, from the target
value of 14.5 microns. Objective: reduce nonuniformity of epitaxial layer, and keep average thickness close to
14.5 microns. List responses: Epitaxial thickness, with a target value of 14.5 microns, a current average of
14.5, and a current std dev of 0.4. Control parameters: susceoptor rotation direction, arsenic flow rate,
deposition time, nozzle position, and deposition temperature. List noise: uneven temperature in Bell Jar,
nonuniform vapor concentration, nonuniform vapor composition, deviation in control parameter settings.
After settling on a 25-2 factorial for the control variables, the experimenters placed four wafers with five
sampling points each in the susceptor. In this wasy, they got a total of 20 measurements of epitaxial thickness,
using the same plan for every run.
For each run, they calculated the mean, the variance, and the ―robustness statistics,‖ namely
-log(variance/mean2). The results were

Draw pictures.
There are a number of issues that go into the choice of experimental design. These include
1. Number of levels of factors
2. Number of factors
3. Factor Interactions
4. Modeling versus Pick the Winner
The experimental designs commonly used include
1. Orthogonal Arrays
2. Plackett-Burman Designs
3. Fractional factorials
4. Response surface designs
Incidentally, the phrase Taguchi Methods is a trademark held by the American Supplier Institute. It
encompasses all work due to Taguchi including quality engineering methods such as
1. Parameter Design
2. Tolerance Design
3. On-line quality control
4. The loss function
5. Signal-to-noise ratio
LOSS FUNCTION:
The Taguchi loss function is graphical depiction of loss developed by the Japanese business statistician
describe a phenomenon affecting the value of products produced by a company.
A graphical representation of a variety of non-perfect parts that can each lead to an overall loss for
a company or manufacturer. Developed by Dr. Genichi Taguchi, a Japanese business statistician, the Taguchi
loss function details the implications involved with poor quality and is largely credited for the increased focus
on continuous improvement throughout the business world.
Taguchi's loss function
Genichi Taguchi's impact upon North American product design and manufacturing processes began in
November 1981 with a presentation to the Ford Motor Company.
This introduced the concept of loss function as a measure of quality. The loss function establishes a financial
measure of the user dissatisfaction with a product's performance as it deviates from a target value (the most
desirable value of the parameter under consideration). Thus, both average performance and variation are
critical measures of quality. Selecting a product design or a manufacturing process that is insensitive to
uncontrolled sources of variation improves quality. Dr Taguchi calls these uncontrolled sources of variation
noise factors. This term comes from early applications of his methods in the communications industry.
Applying Taguchi's concept entails evaluating both the variance and the average for the technical bench
marking in QFD. The loss function provides a single metric for comparison.
Measuring quality
Traditionally, quality is viewed as a step function (as shown in Figure 1). This view assumes that a product is
either good or bad and is uniformly good between the upper and lower specifications.
However, in practice products will vary on a performance scale ± and samples of products would more likely
show a curve rather than the step line. There is no sharp cut-off in the real world. Performance begins to
gradually deteriorate as the design parameter deviates from its optimum value.
In Figure 2, for example, curves A and B represent the frequencies of performance of two designs over a
certain time period. B has a higher fraction of ―b‖ performance and therefore is less ―good‖ than A.
Those making decisions based on traditional approaches to analysis and those adopting Taguchi's loss function
will often make the same judgments. If, for example, organizations consider both the position of the average
and the variance, and if the averages are equal and/or the variances are equal, then the traditional decision
maker and one using Taguchi's loss function will make the same decision. However, the traditional decision
maker calculates the percent defective over time when both the average and variance are different.
Taguchi believes that the customer becomes increasingly dissatisfied as performance departs farther away from
the target. To represent a customer's dissatisfaction with a product's performance he suggests a quadratic curve.
The quadratic curve is the first term when the first derivative of a Taylor
Series expansion about the target is set equal to zero. The curve is centered on the target value, which provides
the best performance in the eyes of the customer. Identifying this best value is not necessarily a simple task and
is often the designer's best guess. Figure 3 shows a sample curve.
LCT represents lower consumer tolerance and UCT represents upper consumer tolerance. This is a customer-
driven design rather than an engineer's specification. A common view of consumer tolerance is the
performance level where 50 per cent of the consumers are dissatisfied, though of course it varies widely
between different types of product.
It is possible to derive an equation for average loss. This loss function takes the following basic quadratic
form:
where L is the loss in dollars (money), m is the point at the which the characteristic should be set, x is where
the characteristic actually is set, and k is a constant that depends on the magnitude of the characteristic and the
monetary unit involved.
This basic loss function is used if no other function based on data is available.
From the quadratic loss function, the total loss increases parabolically as the deviation from the target value
increases. This loss represents a continuous function. This indicates that making a product within the
specification limits is not enough to suggest that the product is of good quality, since good quality is now
defined as keeping the product characteristic on target with low variation.
The Taguchi approach is aimed at developing products which meet the target value on a consistent basis. Thus,
the most important aspect of Taguchi's quality control philosophy is the minimisation of variation around the
target value.
The graph/formula permits a design team to consider the cost benefit analysis of alternate designs with
different costs yielding different average losses. Figure 3 shows that there is some financial loss incurred at the
upper consumer tolerance: this could be a warranty charge to the organization or a repair expense.
The figure shows a symmetric loss about the target, but this is not always the case. Figure 4 shows that if two
products have the same variance but different averages, then the product with the average that is closer to the
target (A) has better quality.

Similarly, Figure 5 shows that if two products have the same average but different variance, then the product
with the smaller variance has better quality. Product B performs near target less often than its competitor.
What if both average and variance are different? Calculating the average loss assumes you agree with the
concept of the loss function. The product with smaller loss has the better quality. In Figure 6, if curve A is far
to the right, then curve B would be the better.
If curve A is centered on the target, then curve A would be better. Somewhere in between, both have the same
loss. Of course these graphs simply make the point that quality should be built into the product at the design
stage. Thus understanding the loss function is not an end in itself ± it is a powerful motivator for a quality
strategy and Taguchi used it as such. He proposed the idea of brainstorming to define the processes and factors
which create the product, to be followed by experimental techniques to determine the optimum parameters to
be implemented in the parameter design stage of the product.
The brainstorming stage is perhaps the most important stage of the whole Taguchi procedure. At this stage,
clear statements of the problems are established; the objectives, the desired output characteristics, the methods
of measurement and the appropriate experiments are designed. Brainstorming has the advantage of being a
group technique which promotes participation, encourages creative thinking and generates many ideas in a
short period of time.
The experiment stage is where resulting data are examined and results analyzed and interpreted. The variability
control factors are determined and the optimal values are selected so that the variability of the product is

minimized. The target control parameters are also determined during this stage, and their settings are selected
for a desired mean response. Predictions of performance are also made at this stage.
To confirm the predicted results, a confirmatory experiment is conducted. This is an essential stage in order to
confirm that the new parameter settings do provide optimal performance. Confirmation removes any concerns
of incorrect choice of the parameters, experimental design or assumptions of product response. After
confirming the optimal settings, corrective action can follow.
A study of the new system should take place and any improvements be standardized. After successful
improvements, the optimal settings will, from there on, become a standard. (If products are to be compared on
the basis of technical benchmarks, it is important to test ``in the real world'' (though ironically it is often
necessary or cheaper to simulate this ―real‖ world) ± for example to test products in a range of environmental
conditions. The results of such tests feed the graphs and associated formulae to arrive at quantitative loss
measurements.)

KAIZEN:
 Kaizen is a Japanese word for 'continuous improvement.'
 Kaizen was first implemented in several Japanese businesses during the country's recovery after World
War II.
 Carrying out small improvements in large numbers with total employee involvement, on a continuous
basis.
 It must be achieved with 100% participation.
 It is better implemented by a person himself / herself whon has created the improvement idea and
carried out in his / her own workplace.
 Kai=Change, Zen=Good (For the Better), Kaizen=Continual Improvement.
The essence of Kaizen is that the people that perform a certain task are the most knowledgeable about that task;
consequently, by involving them and showing confidence in their capabilities, ownership of the process is
raised to its highest level. In addition, the team effort encourages innovation and change and, by involving all
layers of employees, the imaginary organizational walls disappear to make room for productive improvements.
From such a perspective, Kaizen is not only an approach to manufacturing competitiveness but also
everybody's business, because its premise is based on the concept that every person has an interest in
improvement. The premise of a Kaizen workshop is to make people's jobs easier by taking them apart,
studying them, and making improvements.
The message is extended to everyone in the organization, and thus everyone is a contributor. So, when Kaizen
for every individual could be an attitude for continuous improvement, for the company also be a corporate
attitude for continuous improvement.
As presented by Imai, Kaizen is an umbrella concept that embraces different continuous improvement
activities on an organization as shown in Figure 1. Also Kaizen constituents are presented on Figure 2.
Improvements through Kaizen have a process focus. Kaizen generates process-oriented thinking, is people-
oriented, and is directed at people's efforts. Rather than identifying employees as the problem, Kaizen
emphasizes that the process is the target and employees can provide improvements by understanding how their
jobs fit into the process and changing it.

The companies that undertake a Kaizen philosophy place an emphasis on the processes – on the 'how' of
achieving the required results .A process emphasis goes beyond designing effective processes; it requires the
teams to understand why a process works, whether it can be modified or replicated somewhere else in the
company and how it can be improved. Table1 illustrates some of the major differences between a conventional
and a process-emphasis approach.
Table 1: Improvement through Kaizen a process focus
Kaizen -The three pillars

The three pillars
According to M. Imai, a guru in these management philosophies and practices, the three pillars of kaizen are
summarized as follows:
1. Housekeeping
2. Waste elimination
3. Standardization
and as he states , the management and employees must work together to fulfill the requirements for each
category. To be ensured success on activities on those three pillars three factors have also to be taken account.
Housekeeping
This is a process of managing the work place, known as ―Gemba‖ (workplace ) in Japanese, for improvement
purposes. Imai introduced the word ―Gemba‖, which means ―real place‖, where value is added to the products
or services before passing them to next process where they are formed.
For proper housekeeping a valuable tool or methodology is used , the 5S methodology. The term ―Five S‖ is
derived from the first letters of Japanese words referred to five practices leading to a clean and manageable
work area: seiri (organization), seiton (tidiness), seiso (purity), seiketsu (cleanliness), and shitsuke (discipline).
The English words equivalent of the 5S's are sort, straighten, sweep, sanitize, and sustain.
Seiri SORT what is not needed.

Seiton STRAIGHTEN what must be kept
Seiso SCRUB everything that remains.
Seiketsu SPREAD the clean/check routine.
STANDARDIZATION and self-
Shitsuke
discipline.
Waste (Muda ) elimination.

Muda in Japanese means waste. The resources at each process — people and machines — either add value or
do not add value and therefore ,any non-value adding activity is classified as muda in Japan. Work is a series
of value-adding activities, from raw materials, ending to a final product. Muda is any non-value-added task.
In Kaizen philosophy, the aim is to eliminate the seven types of waste (7 deadly wastes ) caused by
overproduction, waiting, transportation, unnecessary stock, over processing, motion, and a defective part.
Standardization
Standards are set by management, but they must be able to change when the environment changes. Companies
can achieve dramatic improvement as reviewing the standards encouraging teams to conduct problem-solving
activities. Once the standards are in place and are being followed then if there are deviations, the workers know
that there is a problem. Then employees will review the standards and either correct the deviation or advise
management on changing and improving the standard. It is a never-ending process and is better explained and
presented by the PDCA cycle(plan-do-check-act), known as Demming cycle.
DEMING CYCLE:
The Deming Cycle, or also known as PDSA Cycle, is a continuous quality improvement model consisting out
of a logical sequence of four repetitive steps for continuous improvement and learning: Plan, Do, Study and
Act.
The foundation
Galileo, considered by many to be the father of modern science, made original contributions to the science of
motion and strengths of materials by combining designed experiments and mathematics.
Through his studies, conducting designed experiments became the cornerstone of science and the scientific
method. Sir Francis Bacon made his contribution to modern science as a philosopher who was concerned about
how knowledge is developed. He believed knowledge generation must follow a planned structure. At the time,
science depended on deductive logic to interpret nature.
Bacon insisted that scientists should instead proceed through inductive reasoning—from observations to axiom
to law. His contribution completed the interplay between deductive and inductive logic that underlies how we
advance knowledge.
Charles Peirce and William James were students at Harvard University in Cambridge, MA, in January 1872
when they formed a discussion group called the Metaphysical Club.1 This group would forever be linked with
the uniquely American philosophy called pragmatism.
The group said the function of thought is to guide action and that truth is preeminently to be tested by the
practical consequences of belief John Dewey became a leading proponent of pragmatism, and his works
influenced philosophy, education, religion, government and democracy around the world.2 James and Dewey‘s
pragmatism could be summarized in one statement: People are the agents of their own destinies.
Clarence I. Lewis, an American pragmatist also educated at Harvard, was heavily influenced by Peirce and
James. Lewis set out three ideas in Mind and the World Order to further the pragmatists‘ influence.
1. A priori truth is definitive and offers criteria through which experience can be discriminated.
2. The application of concepts to any particular experience is hypothetical, and the choice of conceptual system
meets pragmatic needs.
3. The susceptibility of experience to conceptual interpretation requires no particular metaphysical assumption
about the conformity of experience to the mind or its categories.

Shewhart and Deming

Lewis‘ book had enormous influence on Walter A. Shewhart and Deming in bringing the scientific method
to 20th century industry. Shewhart‘s Statistical Method From the Viewpoint of Quality Control, published in
1939, first introduced the concept of a straight-line, three-step scientific process of specification, production
and inspection.4 He later revised this idea into a cyclical concept. Figure 2 contrasts the two views of
Shewhart‘s idea of specification, production and inspection. ―These three steps must go in a circle instead of in
a straight line, as shown,‖ Shewhart wrote. ―It may be helpful to think of the three steps in the mass production
process as steps in the scientific method. In this sense, specification, production and inspection correspond
respectively to hypothesizing, carrying out an experiment and testing the hypothesis. The three steps constitute
a dynamic scientific process of acquiring knowledge.‖5 Shewhart‘s concept eventually evolved into what
became known as the Shewhart cycle.
Deming had a front-row seat for Shewhart‘s thinking: At the age of 39, Deming edited a series of lectures
Shewhart delivered to the U.S. Department of Agriculture into what eventually became the basis of Shewhart‘s
1939 book.
Deming built off Shewhart‘s cycle and modified the concept. He got the chance to present the new version of
the cycle in 1950 during an eight-day seminar in Japan sponsored by the Japanese Union of Scientists and
Engineers (JUSE).6
In his new version of the cycle, Deming stressed the importance of constant interaction among the four steps of
design, production, sales and research. He emphasized that these steps should be rotated constantly, with
quality of product and service as the aim, as shown in Figure 3. This new version is referred to as the Deming
wheel, the Deming cycle or the Deming circle.
Deming wheel evolves
According to Masaaki Imai, Japanese executives recast the Deming wheel presented in the 1950 JUSE
seminars into the PDCA cycle.7 Table 1 shows Imai‘s description of the relationship between the Deming
wheel and the PDCA cycle.
Imai did not provide details about which executives reworked the wheel or how they translated the Deming
wheel into the PDCA cycle. No one has ever claimed ownership of this revision or disputed Imai‘s assertion.
The resulting PDCA cycle, shown in Figure 4, shows the four-step cycle for problem solving. The cycle
includes:
1. Plan: Define a problem and hypothesize possible causes and solutions.
2. Do: Implement a solution.
3. Check: Evaluate the results.
4. Act: Return to the plan step if the results are unsatisfactory, or standardize the solution if the results are
satisfactory.

The PDCA cycle also emphasized the prevention of error recurrence by establishing standards and the ongoing
modification of those standards.
Once again, others wanted to enhance and revise the cycle. This time, it was Kaoru Ishikawa. He redefined the
PDCA cycle to include more in the planning step: determining goals and targets, and formulating methods to
reach those goals.8 Figure 5 shows the PDCA cycle and incorporates Ishikawa‘s changes. In the do step,
Ishikawa also included training and education to go along with implementation. Ishikawa said good control
meant allowing standards to be revised constantly to reflect the voices of consumers and their complaints, as
well as the requirements of the next process. The concept behind the term ―control‖ would be deployed
throughout the organization.
The PDCA cycle, with Ishikawa‘s updates and improvements, can be traced back to S. Mizuno of the Tokyo
Institute of Technology in 1959. The seven basic tools (check sheet, histograms, Pareto chart, fishbone
diagram, graphs, scatter diagrams and stratification) highlight the central principle of
Japanese quality.9 These tools—together with the PDCA cycle and the quality control (QC) story format
became the foundation for improvement (kaizen) in Japan and are still being used today.
PDSA cycle evolution
More than 30 years after Deming first revised the Shewhart cycle, Deming again reintroduced it during four
day seminars he hosted in the 1980s.10 He said the latest version had come directly from the 1950 version.
―Any step may need the guidance of statistical methodology for economy, speed and protection from faulty
conclusions from failure to test and measure the effects of interactions,‖ Deming said.11 Figure 6 illustrates the
procedure to follow for improvement.
Deming warned his audiences that the PDCA version is frequently inaccurate because the English word
―check‖ means ―to hold back.‖
Once again, Deming modified the Shewhart cycle in 1993 and called it the Shewhart Cycle for Learning and
Improvement—the PDSA cycle, as shown in Figure 7. Deming described it as a flow diagram for learning and
improvement of a product or a process.
PDCA vs. PDSA
Over the years, Deming had strong beliefs about the PDCA cycle and clearly wanted to distinguish it from the
PDSA cycle.
At a roundtable discussion on product quality at the U.S. Government Accounting Office, Deming was asked
how the QC circle (referring to PDCA) and the Deming circle related.
―They bear no relation to each other,‖ Deming said. ―The Deming circle is a quality control program. It is a
plan for management. Four steps: Design it, make it, sell it, then test it in service. Repeat the four steps, over
and over, redesign it, make it, etc. Maybe you could say that the Deming circle is for management, and the QC
circle is for a group of people that work on faults encountered at the local level.‖13 On Nov. 17, 1990, Deming
wrote a letter to Ronald D. Moen to comment on the manuscript for Improving Quality Through Planned
Experimentation, coauthored by Moen, Thomas R. Nolan and Lloyd P. Provost.14 ―Be sure to call it PDSA,
not the corruption PDCA,‖ Deming wrote in the letter.15
In response to a letter he received in 1991, Deming commented about a chart labeled plan-do-check-act. ―What
you propose is not the Deming cycle,‖ he wrote in the letter. ―I don‘t know the source of the cycle that you
propose. How the PDCA ever came into existence I know not.‖
Has the Deming PDSA cycle evolved?
In 1991, Moen, Nolan and Provost added to Deming‘s PDSA planning step of the improvement cycle and
required the use of prediction and associated theory. The authors said the study step compared the observed
data to the prediction as a basis for learning. This provided the deductive-inductive interplay necessary for
learning as required in the scientific method.

It is not enough to determine that a change resulted in improvement during a particular test, according to
Moen, Nolan and Provost. As you build your knowledge, you will need to be able to predict whether a change
will result in improvement under the different conditions you will face in the future.
Three years later, Gerald Langley, Kevin Nolan and Thomas Nolan added three basic questions to supplement
the PDSA cycle.18 Figure 8 shows the detailed cycle and the Model for Improvement.
This new approach provides a basic framework for developing, testing and implementing changes to the way
things are done that will lead to improvement.
The approach supports a full range of improvement efforts from the very informal to the most complex—for
example, the introduction of a new product line or service for a major organization.
Continuing evolution
As Imai pointed out, Japanese executives recast the Deming wheel and developed the PDCA cycle, building
from Deming‘s JUSE seminars of 1950. PDCA has not changed drastically in the last 40 years. It is clear,
however, that Deming never fully embraced the PDCA cycle. PDCA and PDSA seem related only through the
scientific method.
From 1986 to 1993, Deming was committed to evolving his PDSA cycle, and he always referred to it as the
Shewhart cycle for learning and improvement. It‘s used for learning, testing and implementation. Today, the
PDSA cycle remains relevant and continues to evolve.

UNIT – V
VALUE IMPROVEMENT ELEMENTS/VALUE IMPROVEMENT ASSUALT:

Value engineering (VE) is systematic method to improve the "value" of goods or products and services by
using an examination of function. Value, as defined, is the ratio of function to cost. Value can therefore be
increased by either improving the function or reducing the cost. It is a primary principle of value engineering
that basic functions be preserved and not be reduced as a consequence of pursuing value improvements.
An approach to improving the value of an item or process by understanding its constituent components
and their associated costs. It then seeks to find improvements to the components by either reducing their cost
or increasing the value of the functions.
Why is it used?
To determine and improve the value of a product or process by first understanding the functions of the item
and their value, then its constituent components and their associated costs, in order to reduce their costs or
increase the functions value.
When is it used?
Value Analysis should be used:
 For analyzing a product or process, to determine the real value of each component,
 When looking for cost savings, to determine components that may be optimized,
 Only when the item to be analyzed can be broken down into subcomponents and realistic costs and
values allocated to these.
How it works — detailed review
To understand Value Analysis it is necessary to understand some key concepts:
Value:
the ratio between a function for customer satisfaction and the cost of that function.
Function:
the effect produced by a product or by one of its elements, in order to satisfy customer needs.
Value analysis:
Methodology to increase the value of an object. The object to be analyzed could be an existing or a new
product or process, and it is usually accomplished by a team following a work plan.
Need:
Something that is necessary or desired by the customer.
Fig. Basic rationale used in Value Analysis
Functions may be broken down into a hierarchy, starting with a basic function, for which the
customer believes they are paying, and then followed by secondary functions, which support that
basic function.
The purpose of functions may be artistic or use, and basic functions may be either or both of these.
For example, a coat may have a use function of making you warm and an aesthetic function of
'looking attractive'.
The product or process may be broken down into components, which can be associated with the
functions they support. The value of the product or process may be then increased by improving or
replacing individual components. This also applies at the whole item being analyzed, which may
be completely replaced with a more functional or lower cost solution.
Although this is a simple-sounding Tool, it can be quite difficult in practice, as it requires both
deep analysis of the product or process to be improved, and also an innovative approach to finding
alternatives.

Fig. Function/Component hierarchy
SUPPLIER TEAMING:
With more than 50 percent of manufacturers‘ revenues spent in their supply chains, firms have a burning
platform to draw as much value from their supplier relationships as possible. In today‘s competitive global
markets, getting the best price is no longer enough.
Margins of manufacturers and suppliers alike are being squeezed, and taking an adversarial approach does
nothing to improve either party‘s competitive position. This is where a disciplined, collaborative business
model can be a game changer.
Toyota and Honda are two companies that first come to mind when one considers the benefits of supplier
collaboration. By partnering with their key suppliers, these two manufacturers have taken market share and
improved profitability for decades by making better-quality, more-competitive products.
Western companies have long used the excuse that Western culture does not have the keiretsu structure that
Japanese companies do, and thus the potential for benefiting with a collaborative approach is limited.
Often, manufacturers conduct extensive sourcing studies to assure they have selected the proper suppliers, or at
least those with the lowest prices. They also spend significant time and resources segmenting their supply base
to understand which suppliers are critical to their success [strategic] and which are easily replaceable
[transactional]. They even implement Supplier Performance Management programs to assure suppliers have

goals to improve quality, cost and delivery. But that‘s when they stop, before reaping the benefits of
collaboration! While these steps are fundamental to developing a sound supplier management program, they
are not nearly enough to provide the sustained competitive advantage of a disciplined supplier collaboration
process.
Figure 1: Proven Benefits of Collaborative Supplier Relationships
Figure 2: Supplier Collaboration and Innovation Model

Benefits of a Collaborative Approach

Teaming with suppliers in a collaborative way has enabled many companies to reap a myriad of benefits.
For example:
Quality: Jeffrey Liker, author of ―The Toyota Way,‖ reports that supplier quality (as measured in defects in
parts per million) from 1990-96 improved 47 percent for the U.S. Big Three car makers but 84 percent for
Toyota, using their more collaborative approach.
Time to market: Lexmark cut introduction time for new products in half by involving three key suppliers
early in the design process [as reported in ―The Purchasing Machine,‖ The Free Press, copyright 2001 by Dave
Nelson, Patricia E. Moody, and Jonathan Stegner].
Productivity and Inventory: Liker reports that through Toyota‘s Supplier Support Center, they were able to
improve productivity 124 percent and reduce inventory 75 percent by working with key suppliers on 31
projects over five years [ref. ―the Toyota Way‖ McGraw-Hill, 2004, p.212].
Cost: Using CGN‘s BTA methodology, one major North American manufacturer was able to take more than 7
percent out.
Risk Management: In a 2010 survey, CGN found that the top three risks companies battled in the past year
included cost [100 percent of respondents], general availability of product from their supply base usually
caused by increased demand volatility [more than 85 percent] and a lack of supplier alignment with their goals
[more than 55 percent]. All three risks scream for an increase in collaboration between corporations and their
supply base.
BUSINESS PROCESS REENGINEERING:

Business process re-engineering (BPR) is the analysis and redesign of workflows within and between
enterprises in order to optimize end-to-end processes and automate non-value-added tasks.
Business Process Reengineering (BPR) involves the fundamental rethinking and radical redesign of business
processes to achieve dramatic improvements in critical contemporary measures of performance such as cost,
quality, service and speed.
Business Process Reengineering (BPR) involves the fundamental rethinking and radical redesign of business
processes to achieve dramatic improvements in critical contemporary measures of performance such as cost,
quality, service and speed.
A reengineered organization is process oriented, where:
1) Processes are identified and named,
2) Everyone is aware of the processes they are involved in,
3) Process measurement, i.e. monitoring and control, is performed.
BPR – Methodology:
1) Envision new processes
2) Initiate change
3) Process diagnosis
4) Process redesign
5) Reconstruction
6) Process monitoring
1) Envision New Processes:
 Ensure management support
 Identify reengineering opportunities
 Identify enabling technologies
 Align with organizational strategy
2) Initiate Change:
 Set up the reengineering team
 Outline performance goals
3) Process Diagnosis:
 An assessment must be done about how IT is aligned to creating value for the business.
 A maturity model for assessing IT organization includes five stages.
4) Process Redesign:
 Develop alternative process scenarios
 Develop new process design
 Design human resource architecture
 Select IT platform
 Develop overall blueprint and gather feedback
Process Redesign - Project Scope
Projects attempting large-scale change have a much lower probability of success than those attempting less
ambitious change.
Delivery of smaller components will therefore be:
 Easier to Manage
 Easier to Implement
 Easier to accommodate internal and external changes political and financial environment, requirements,
technological change.

5) Reconstruction:
A checklist before cut-over to new capabilities includes asking:
 Is the organization ready?
 Is the staff ready?
 Are businesses and/or citizens ready?
 Is contract management in place?
 Is service management in place?
 Is benefits management in place?
 Is performance management in place?
 Are changes ahead been thought through?
6) Process Monitoring:
A checklist of key issues after transitioning to e-Government services includes asking:
 Was the business case justification realistic?
 Have changes throughout the project compromise our original intentions?
 Have we done a post-implementation review?
 Do we have enough qualified personnel to manage operations including fulfillment contract with third
parties?
 Are we actively seeking to improve performance?
 Are we measuring performance?
 Are we setting maturity targets?
Fig. Reengineered Process
ELEMENTS OF SUPPLY CHAIN MANAGEMENT:

Supply chain management is a set of approaches utilized to efficiently integrate suppliers, manufacturers,
warehouses, and stores, so that merchandise is produced and distributed at the right quantities, to the right
locations, and at the right time, in order to minimize system wide costs while satisfying service level
requirements.
This definition leads to several observations. First, supply chain management takes into consideration every
facility that has an impact on cost and plays a role in making the product conform to customer requirements:
from supplier and manufacturing facilities through warehouses and distribution centers to retailers and stores.
Indeed, in some supply chain analysis, it is necessary to account for the suppliers‘ suppliers and the customers‘
customers because they have an impact on supply chain performance.
Second, the objective of supply chain management is to be efficient and cost-effective across the entire system;
total system wide costs, from transportation and distribution to inventories of raw materials, work in process,
and finished goods, are to be minimized. Thus, the emphasis is not on simply minimizing transportation cost or
reducing inventories but, rather, on taking a systems approach to supply chain management.
Finally, because supply chain management revolves around efficient integration of suppliers, manufacturers,
warehouses, and stores, it encompasses the firm‘s activities at many levels, from the strategic level through the
tactical to the operational level.
The Development Chain
The development chain is the set of activities and processes associated with new product introduction. It
includes the product design phase, the associated capabilities and knowledge that need to be developed
internally, sourcing decisions, and production plans.
The development and supply chains intersect at the production point, as illustrated in Figure 1-2. It is clear that
the characteristics of and decisions made in the development chain will have an impact on the supply chain.
Similarly, it is intuitively clear that the characteristics of the supply chain must have an impact on product
design strategy and hence on the development chain.

Figure 1-1 The Logistics Network.
Figure 1-2 The enterprise development and supply chains.
Global Optimization:
What makes finding the best system wide, or globally optimal, integrated solution so difficult? A variety of
factors make this a challenging problem:
1. The supply chain is a complex network of facilities dispersed over a large geography, and, in many cases,
all over the globe. The following example illustrates a network that is fairly typical of today‘s global
companies.
2. Different facilities in the supply chain frequently have different, conflicting objectives. For instance,
suppliers typically want manufacturers to commit themselves to purchasing large quantities in stable volumes
with flexible delivery dates. Thus, the suppliers‘ goals are in direct conflict with the manufacturers‘ desire for
flexibility. Indeed, since production decisions are typically made without precise information about customer
demand, the ability of manufacturers to match supply and demand depends largely on their ability to change
supply volume as information about demand arrives. Similarly, the manufacturers‘ objective of making large
production batches typically conflicts with the objectives of both warehouses and distribution centers to reduce
inventory. To make matters worse, this latter objective of reducing inventory levels typically implies an
increase in transportation costs.
3. The supply chain is a dynamic system that evolves over time. Indeed, not only do customer demand and
supplier capabilities change over time, but supply chain relationships also evolve over time. For example, as
customers‘ power increases, there is increased pressure placed on manufacturers and suppliers to produce an
enormous variety of high-quality products and, ultimately, to produce customized products.
4. System variations over time are also an important consideration. Even when demand is known precisely
(e.g., because of contractual agreements), the planning process needs to account for demand and cost
parameters varying over time due to the impact of seasonal fluctuations, trends, advertising and promotions,
competitors‘ pricing strategies, and so forth. These time-varying demand and cost parameters make it difficult
to determine the most effective supply chain strategy, the one that minimizes system wide costs and conforms
to customer requirements.
Of course, global optimization only implies that it is not only important to optimize across supply chain
facilities, but also across processes associated with the development and supply chains. That is, it is important
to identify processes and strategies that optimize, or, alternatively, synchronize, both chains simultaneously.
Key Issues in Supply Chain Management
Distribution Network Configuration Consider several plants producing products to serve a set of
geographically dispersed retailers. The current set of warehouses is deemed inappropriate, and management
wants to reorganize or redesign the distribution network. This may be due, for example, to changing demand
patterns or the termination of a leasing contract for a number of existing warehouses. In addition, changing
demand patterns may require a change in plant production levels, a selection of new suppliers, and a new flow
pattern of goods throughout the distribution network.
Inventory Control Consider a retailer that maintains an inventory of a particular product. Since customer
demand changes over time, the retailer can use only historical data to predict demand. The retailer‘s objective
is to decide at what point to reorder a new batch of the product, and how much to order so as to minimize
inventory ordering and holding costs.
Production Sourcing In many industries, there is a need to carefully balance transportation and manufacturing
costs. In particular, reducing production costs typically implies that each manufacturing facility is responsible
for a small set of products so that large batches are produced, hence reducing production costs. Unfortunately,
this may lead to higher transportation costs.
Similarly, reducing transportation costs typically implies that each facility is flexible and has the ability to
produce most or all products, but this leads to small batches and hence increases production costs. Finding the
right balance between the two cost components is difficult but needs to be done monthly or quarterly.
Supply Contracts In traditional supply chain strategies, each party in the chain focuses on its own profit and
hence makes decisions with little regard to their impact on other supply chain partners. Relationships between
suppliers and buyers are established by means of supply contracts that specify pricing and volume discounts,
delivery lead times, quality, returns, and so forth.
Distribution Strategies An important challenge faced by many organizations is how much should they
centralize (or decentralize) their distribution system. What is the impact of each strategy on inventory levels
and transportation costs? What about the impact on service levels? And, finally, when should products be
transported by air from centralized locations to the various demand points? These questions are not only
important for a single firm determining its distribution strategy, but also for competing retailers that need to
decide how much they can collaborate with each other. For example, should competing dealers selling the
same brand share inventory? If so, what is their competitive advantage?
Supply Chain Integration and Strategic Partnering As observed earlier, designing and implementing a
globally optimal supply chain is quite difficult because of its dynamics and the conflicting objectives employed
by different facilities and partners. Nevertheless, Dell, Wal-Mart, and Procter & Gamble success stories
demonstrate not only that an integrated, globally optimal supply chain is possible, but that it can have a huge
impact on the company‘s performance and market share. However, in today‘s competitive markets, most
companies have no choice; they are forced to integrate their supply chain and engage in strategic partnering.
This pressure stems from both their customers and their supply chain partners.
Outsourcing and Offshoring Strategies Rethinking your supply chain strategy not only involves coordinating
the different activities in the supply chain, but also deciding what to make internally and what to buy from
outside sources. How can a firm identify what manufacturing activities lie in its set of core competencies, and
thus should be completed internally, and what product and components should be purchased from outside
suppliers.
Product Design Effective design plays several critical roles in the supply chain. Most obviously, certain
product designs may increase inventory holding or transportation costs relative to other designs, while other
designs may facilitate a shorter manufacturing lead time. Unfortunately, product redesign is often expensive.
Information Technology and Decision-Support Systems Information technology is a critical enabler of
effective supply chain management. Indeed, much of the current interest in supply chain management is
motivated by the opportunities that appeared due to the abundance of data and the savings that can be achieved
by sophisticated analysis of these data.
Customer Value Customer value is the measure of a company‘s contribution to its customer, based on the
entire range of products, services, and intangibles that constitute the company‘s offerings. In recent years, this
measure has superseded measures such as quality and customer satisfaction.
Smart Pricing Revenue management strategies have been applied successfully in industries such as airlines,
hotels, and rental cars. In recent years, a number of manufactures, retailers, and carriers have applied a
variation of these techniques to improve supply chain performance.
SIX SIGMA:
Six Sigma is a set of techniques and tools for process improvement. It was introduced by engineer Bill Smith
while working at Motorola in 1986. Jack Welch made it central to his business strategy at General Electric in
1995.
Six Sigma seeks to improve the quality of the output of a process by identifying and removing the causes of
defects and minimizing variability inmanufacturing and business processes. It uses a set of quality
management methods, mainly empirical, statistical methods, and creates a special infrastructure of people
within the organization, who are experts in these methods. Each Six Sigma project carried out within an
organization follows a defined sequence of steps and has specific value targets, for example: reduce process
cycle time, reduce pollution, reduce costs, increase customer satisfaction, and increase profits.
The term Six Sigma originated from terminology associated with statistical modeling of manufacturing
processes. The maturity of a manufacturing process can be described by a sigma rating indicating its yield or
the percentage of defect-free products it creates. A six sigma process is one in which 99.99966% of all
opportunities to produce some feature of a part are statistically expected to be free of defects (3.4 defective
features per million opportunities). Motorola set a goal of "six sigma" for all of its manufacturing operations,
and this goal became a by-word for the management and engineering practices used to achieve it.
Six Sigma is a disciplined, data-driven approach and methodology for eliminating defects (driving
toward six standard deviations between the mean and the nearest specification limit) in any process – from
manufacturing to transactional and from product to service.
Six Sigma is simply a method of efficiently solving a problem. Using Six Sigma reduces the amount of
defective products manufactured or services provided, resulting in increased revenue and greater customer
satisfaction.
Six Sigma is named after a statistical concept where a process only produces 3.4 defects per million
opportunities (DPMO). Six Sigma can therefore be also thought of as a goal, where processes not only
encounter less defects, but do so consistently (low variability).
Basically, Six Sigma reduces variation, so products or services can be delivered as expected reliably.
Six Sigma doctrine asserts:
 Continuous efforts to achieve stable and predictable process results (e.g. by reducing process variation)
are of vital importance to business success.
 Manufacturing and business processes have characteristics that can be defined, measured, analyzed,
improved, and controlled.
 Achieving sustained quality improvement requires commitment from the entire organization,
particularly from top-level management.
Features that set Six Sigma apart from previous quality-improvement initiatives include:
 A clear focus on achieving measurable and quantifiable financial returns from any Six Sigma project.
 An increased emphasis on strong and passionate management leadership and support.
 A clear commitment to making decisions on the basis of verifiable data and statistical methods, rather
than assumptions and guesswork.
The term "six sigma" comes from statistics and is used in statistical quality control, which evaluates process
capability. Originally, it referred to the ability of manufacturing processes to produce a very high proportion of
output within specification. Processes that operate with "six sigma quality" over the short term are assumed to
produce long-term defect levels below 3.4defects per million opportunities (DPMO). Six Sigma's implicit goal
is to improve all processes, but not to the 3.4 DPMO level necessarily. Organizations need to determine an
appropriate sigma level for each of their most important processes and strive to achieve these. As a result of
this goal, it is incumbent on management of the organization to prioritize areas of improvement.

The Basics of Lean Six Sigma

Lean Six Sigma is a combination of two powerful methods: Lean and Six Sigma.
Lean and Six Sigma complement each other. Lean accelerates Six Sigma, delivering greater results than what
would typically be achieved by Lean or Six Sigma individually. Combining these two methods gives your
improvement team a comprehensive tool set to increase the speed and effectiveness of any process within your
organization – resulting in increased revenue, reduced costs and improved collaboration.
At Go Lean Six Sigma, our goal is to help you easily understand Lean Six Sigma so that you can apply it
practically within your organization.
What is Lean?
Lean is simply a method of streamlining a process, resulting in increased revenue, reduced costs and improved
customer satisfaction.

 A Lean process:
 Is faster
 Is more efficient and economical
 Delivers satisfactory quality
Lean is achieved by removing ―Waste―, which is activity not required to complete a process.
After removing Waste, only the steps required to produce a product or service that is satisfactory to a Customer
will remain.
The Benefits of Using Lean Six Sigma
Organizations face rising costs and increasing competition every day. Lean Six Sigma allows you to combat
these problems and grow their businesses the following ways:
Increases revenue
Lean Six Sigma increases your organization‘s revenue by streamlining processes. Streamlined processes result
in products or services that are completed faster and more efficiently at no cost to quality.
Simply put, Lean Six Sigma increases revenue by enabling your organization to do more with less – Sell,
manufacture and provide more products or services using fewer resources.
Decreases costs
Lean Six Sigma decreases your organization‘s costs by:

 Removing ―Waste‖ from a process. Waste is any activity within a process that isn‘t required to
manufacture a product or provide a service that is up to specification.
 Solving problems caused by a process. Problems are defects in a product or service that cost your
organization money.
Basically, Lean Six Sigma enables you to fix processes that cost your organization valuable resources.
Improves efficiency
Lean Six Sigma improves the efficiency of your organization by:
 Maximizing your organization‘s efforts toward delivering a satisfactory* product orservice to your
customers
 Allowing your organization to allocate resources/revenue produced from yournewly improved
processes towards growing your business
Simply put, Lean Six Sigma enables you to create efficient processes so that your organization can deliver
more products or services, with more satisfied customers than ever before.

Develops effective people/employees
Lean Six Sigma develops effective employees within your organization by:
 Involving employees in the improvement process. This promotes active participation and results in an
engaged, accountable team.
 Building trust. Transparency throughout all levels of the organization promotes a shared understanding
of how each person is important to the organization‘s success.
Basically, Lean Six Sigma develops a sense of ownership and accountability for your employees. This
increases their effectiveness at delivering results for any improvement project they are involved in. Quite often,
this benefit is overlooked by organizations who implement Lean Six Sigma, but it‘s underlying advantages
dramatically increase the chances of continued success of Lean Six Sigma, and your business.

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1|Page Total Quality Management

JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY ANANTAPUR

1|Page Prepared by D.K.Jawad, Assoc.Prof., CRIT Total Quality Management

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Problem – Solving Method

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When To Use Continuous Improvement

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INTERNAL AND EXTERNAL CUSTOMERS:

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Customer‘s experience facilitates internal alignment

GURUS OF TOTAL QUALITY MANAGEMENT:

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DEMING’S 14 POINTS FOR MANAGEMENT:

ISO 9000 SERIES:

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ISO 14000 SERIES:

THIRD PARTY AUDIT:

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 An organization auditing its own systems, a self-assessment

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1. Develop vision and strategy.

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 Develop marketing strategy.

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QUALITY MANAGEMENT SYSTEM (QMS):

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Application of 7QC Tools:

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Matrix Data Analysis Diagram

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Process Decision Programme Chart

PROBLEM SOLVING TECHNIQUES:

SEVEN STEP PROBLEM SOLVING TECHNIQUE:

1 Find the Right Problems to Solve:

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2 Define the Problem:

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Each of these steps is examined as follows.

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FAULT TREE ANALYSIS:

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Fault Tree Diagram Symbols and Notations

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2. Employees have the ability to contribute creative ideas to organizational processes.

Fig. Quality Circle in a Nutshell

STATISTICAL PROCESS CONTROL:

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Control charts have four key features:

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Fig.: Ishikawa Diagram

The Fishbone diagram could be applied when it is wanted to:

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