1.

Core processes in TQM

 The major activities needed to run the business
 Directly observable in action
 Able to be expressed in verb – plus – object form
 Measurable
 Frequently cross – functional
 Understand markets and customers
 Design products and services
 Market and sell products/services
 Produce and deliver for manufacturing
 Invoice and service customers
 Develop and manage human resources
 Manage information resources.

2. Costs of Quality (p.106)

 A competitive product or service based on a balance between
quality and cost factors is the principal goal of responsible
management
 The analysis of quality – related costs may provide a method of
assessing the effectiveness of the management of quality and of
determining problem areas, opportunities, savings, and action
priorities.
 Total quality costs may be categorized into prevention , appraisal ,
internal failure, and external failure costs, the P – A – F model.
 Prevention costs are associated with doing it right the first time,
appraisal costs with checking it is right, and failure costs with
getting it wrong.
 When quality awareness in an organization is low, the total quality
– related costs are high, the failure costs predominating. After an
initial rise in costs, mainly through the investment in training and
appraisal, increasing investments in prevention causes failure,
appraisal and total costs to fall.

3. Measuring the performance and the improvement cycle ?

(p.101)
 Traditionally, the measures used have not been linked to the
processes where the value – adding activities take place. What has
been missing is a performance measurement framework that
provides feedback to people in all areas of business operations. Of
course, TQM stresses the need to start with the process for
fulfilling customer needs.
 The critical elements of a goods performance measurement
framework (PMF) are:
- Leadership and commitment
- Full employee involvement
- Good planning
- Sound implementation strategy
- Measurement and evaluation
- Control and improvement
- Achieving and maintaining standards of excellence
 The Deming cycle of continuous improvement – Plan, Do, Check,
Act – clearly requires measurement to drive it, and yet it is a
useful design aid for the measurement system itself :
- PLAN: establish performance objectives and standards.
- DO: measure actual performance.
- CHECK: compare actual performance with the objectives and
standards – determine the gap.
- ACT: take the necessary actions to close the gap and make the
necessary improvements.
 Before we use performance measurement in the improvement
cycle, however, we should attempt to answer four basic question:
- Why measure?
- What to measure?
- Where to measure?
- How to measure?
 Traditional performance measures based on cost – accounting
information provide little to support TQM - they do not map
process performance and improvements seen by the customer.
 Measurement is important in tracking progress, identifying
opportunities, and comparing performance internally and
externally.
  Measures, typically non – financial, are used in process control
and performance improvement.
 Some financial indicators, such as ROI, are often inaccurate,
irrelevant and too late to be used as measures for performance
improvement.
 The Deming cycle of Plan – Do – Check – Act is a useful design aid
for measurement systems, but firstly four basic questions about
measurement should be asked. (why, what, where, how)
 In answering the question “how to measure?” progress is
important in five main areas: effectiveness, efficiency,
productivity, quality and impact.
 Activity – based costing (ABC) is based on the activities performed
being identified and costs traced to them, ABC uses cost drivers,
which reflect the demands placed on activities.

4. Requirements of Benchmarking?
 Benchmarking measures an organization’s products, services and
processes to establish targets, priorities and improvements,
leading in turn to competitive advantage and/or cost reductions.
 The benefits of benchmarking can be numerous and include:
- Creating a better understanding of the current position
- Heightening sensitivity to changing customer needs
- Encouraging innovation
- Developing stretch goals
- Establishing realistic action plans
 Data from APQC suggests an average benchmarking study takes
six months to complete, occupies a quarter of the team members'
time and the average return was five times the costs.
 The four basic types of benchmarking are: internal, functional,
generic and competitive, although the evolution of benchmarking
in an organization is likely to progress through focus on
continuous improvement.

5. Six Sigma – DMAIC and DMADV

 Six Sigma is a system of statistical tools and techniques focused on
eliminating defects and reducing process variability.
  Six Sigma aims to reduce time, defects and variability.
 Thanks to Six sigma: Increases customer loyalty and improves
employee morale.
 Six Sigma has two major methodologists: DMAIC and DMADV
 DMAIC:
 Define: Figure out what the customer wants.
 Measure: Collect the data.
 Analyze: Determine the cause of a defect.
 Improve: Create a new future state process.
 Control: Put control systems in place and constantly
monitor the process.

 DMADV:
 Define: Figure out what the customer wants.
 Measure: Collect the data.
 Analyze: Figure out how to develop and design alternatives.
 Design: Fix the problem.
 Verify: Implement the production process and then monitor
it.

6. Integrating TQM ( Total Quality Management) into the Policy &

Strategy:
 Policy and strategy is concerned with how the organization
implements its vision and mission in a clear stakeholder – focused
strategy supported by relevant policies, plan, objectives, targets
and processes.
 Senior management may begin the task of alignment through six
steps:
 Develop a shared vision and mission
 Develop the critical success factors
 Define the key performance indicators ( balanced scorecard )
 Understanding the core processes and gain ownership
 Break down the core processes into sub – processes, activities
and tasks
 Ensure process and people alignment through a policy
deployment or goal translation process
 The deliverables after one planning cycle will include:
 An agreed policy/goal deployment framework
 Agreed vision and mission statements
 Agreed CSFs and owners
 Agreed KPIs and targets
 Agreed core processes and sponsors
 Whats/hows deployment matrices
 Focused business improvement plans